Crain's Detroit Business, June 29, 2015 issue by Crain's Detroit Business

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CRAIN’S Readers first for 30 Years

DETROIT BUSINESS

Special Report No downtown? No problem. Rochester Hills creates hubbub in its retail hubs. Page 9

June 29-July 5, 2015

Looking Back: Local theaters change focus

Avast impact: How marriage State’s boating ruling might economy affect benefits

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Pontch may get second tower

Adding a second tower to the Crowne Plaza Pontchartrain could bring the hotel up to 800-850 rooms, making it the state’s second largest.

Plan adds more rooms to attract conferences By Sherri Welch swelch@crain.com

he owners of the Crowne Plaza Pontchartrain Detroit are considering a second tower on its downtown Detroit site, the Detroit Metro Convention & Visitors Bureau has confirmed. Construction of a second tower — which experts say would cost in the $30 million-to-$35 million range — could bring the hotel up to 800-850 rooms. That would make it the state’s second largest, behind the riverfront Detroit Marriott at the Renaissance Center.

And it could help the city gain an edge in attracting large conferences. “One of our challenges is we don’t have as many hotel rooms that are an easy walk to the convention center like many of our competitors do,” said Michael O’Callaghan, executive vice president and COO of the convention bureau.

Campbell Ewald wins contract from Henry Ford By Bill Shea bshea@crain.com

A second tower at the Pontchartrain would allow the RenCen Marriott and other hotels downtown to “play well together as a group in bringing these conventions to the city,” he said. “(We) need to create some more inventory of rooms if we’re going to be successful in bringing large meetings to Detroit.” In the near term, the addition of that many rooms could decrease occupancy and average daily rate numbers for hotels downtown, said Ron Wilson, CEO of Hotel Investment Ser vices Inc., a hotel owner, developer and operator. “But long term, it’s a benefit to have that number of rooms,” Wilson said. The owner — Pontchartrain

The Detroit-based advertising agency Campbell Ewald has picked up a pair of new clients this month, work that potentially softens the blow of losing the massive U.S. Navy recruiting account in May. The firm intends to announce today that it has been hired by Detroit-based Henry Ford Health System as its agency of record. Terms haven’t been disclosed, but the health system spent $4.1 million on advertising last year, according to an annual survey by Voicetrak Inc., a Tucson, Ariz.-based market research company. That new account comes on the heels of the June 18 announcement that Campbell Ewald had won the three-year, $150 million contract to market California’s state-run health

See PONTCHARTRAIN, Page 21

See CAMPBELL EWALD, Page 19 PIERRETTE DAGG/CDB

State firm has novel role in saving Hemingway’s legacy in Cuba By Kirk Pinho kpinho@crain.com

Ronald Staley and The Christman Co.in Lansing are helping erect a building that would preserve Ernest Hemingway’s artifacts on the grounds of his Cuban home, Finca Vigía. THE CHRISTMAN CO.

Cocooned by palm, mango and avocado trees and bamboo shoots atop a hill overlooking downtown Havana 12 miles away, Finca Vigía — Ernest Hemingway’s home for more than two decades until just before he committed suicide in 1961 — is one of the top tourist attractions in Cuba. On its 12 acres in tiny San Francis-

co de Paula are some of the famed American author’s most prized possessions: about 9,000 books, rough drafts of his own work, letters, photographs, the heads of exotic game — and the guns he used to get them — from hunts in the island nation’s brutally hot and humid climate. It’s that climate and the way the documents were stored that jeopardizes many of Hemingway’s more fragile items, and it’s that climate

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that Ronald Staley, senior vice president of Lansing-based The Christman Co., first experienced nearly three years ago as an adviser to a nonprofit trying to preserve those artifacts for many more years to come. Today, Staley and Christman, which earlier this year opened a new office in the Fisher Building in Detroit, are more than advisers for a See HEMINGWAY, Page 21

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CRAIN’S DETROIT BUSINESS // June 29, 2015

MICHIGAN

BRIEFS Fifth Third to consolidate, sell; Mich. impact uncertain

Wellness, worker mobility shape office furniture biz

Cincinnati-based Fifth Third Ban corp will consolidate or sell 100

Employee wellness initiatives are changing the way corporate America makes decisions about office furniture, MiBiz reported after talking with executives at this year’s NeoCon trade show in Chicago. That push for wellness is largely driving office furniture manufacturers to strike a balance between offering both private, productive spaces and open, collaborative environments. Overall, office furniture manufacturers have been moving toward products that encourage worker mobility as a way to complement employers’ emphasis on increased productivity. That’s led the furniture makers to design a variety of private, semi-private and collaborative work areas that cater to different work styles and offer different postures for employees throughout the day. The rationale: The more options employees have, the more they’ll move around the office. “Sitting has been called the new smoking,” said Tom Newhouse,

branches and 30 other properties in response to changing practices by consumers. Jack Riley, senior vice president of marketing for Fifth Third, Eastern Michigan, said the holding company has not told its regional banks what impact they will feel. Fifth Third said it will take an impairment charge of as much as $85 million in the second quarter and spend up to $10 million in other costs, primarily from terminating real estate contracts. The company projected about $60 million in continuing cost savings by the middle of next year. The lender has about 1,300 branches and 2,600 automated teller machines in a dozen states. Fifth Third, Eastern Michigan will begin moving 180 employees from its Southfield headquarters into 62,000 square feet over four floors in the One Woodward Building in downtown Detroit. Tom Henderson

principal of Grand Rapids-based Thomas J. Newhouse Design LLC. “The assumption is that you’ll gain weight, get fat and die — what an overstatement. But sitting has proven to cause … problems when done for long durations. Humans aren’t meant to do that, but they’re not meant to stand all day, either.”

MICH-CELLANEOUS Hospitals in southern Michigan have agreed not to limit their marketing or restrict competition in response to a lawsuit by the U.S. Justice Department. Justice and the state accused the hospitals of unlawfully agreeing for years to carve out territories, The Associated Press reported. The hospitals that have settled are ProMedica Herrick and ProMedica Bixby in Lenawee County, Hillsdale Community in Hillsdale County and Community Health Center in Branch County. Allegiance Health , owner of Foote Memorial Hospital in Jackson, declined to settle. Bell’s Brewery Inc.’s Two Hearted Ale again was ranked the No. 2 beer in the country by readers of Zymurgy Magazine, a publication of the American Homebrewers Association , MLive.com reported. Bell’s Hopslam ranked No. 7. Galesburg-based Bell’s was ranked the third-best brewery. Grand Rapids-based Founders Brew ing Co. was the sixth-best brewery. Flint-based Diplomat Pharmacy purchased Philadelphia-based Bur man’s Specialty Pharmacy for $72.8 million in cash and $10 million in

Diplomat stock, MLive.com reported. Burman’s generated about $383 million in revenue for the year that ended May 31. A U.S. bankruptcy judge rejected the sale of Grand Rapids-based Family Christian Stores , the nation’s largest chain of Christian book and gift stores, to a bidder who promised CEO Chuck Bengochea a job, MLive.com. Judge John Gregg said the contact was “at the very least, reckless.” Bengochea contacted Atlanta businessman Richard Jackson about Family Christian Acquisition LLC ’s bid to take over the company and keep its stores open. Consumers Energy launched a drone to inspect utility poles and wind turbines in Jackson, Mason and Tuscola counties, the Jackson Citizen Patriot reported. The drone can be used to inspect utility lines and take thermal and regular video images. The Little Traverse Bay Bands of Odawa Indians said construction of a 5,000-square-foot “boutique” casino would begin in September on vacant Mackinaw City property the tribe purchased in 2012, The Associated Press reported. The casino is part of a five-year economic development plan that also includes a

COMPANY INDEX: SEE PAGE 21 130-room hotel at the tribe’s existing Odawa Casino in Petoskey. Downers Grove, Ill.-based Hearthside Food Solutions LLC plans to spend $10.7 million and add 91 jobs over three years at its Kentwood plant near Grand Rapids, MiBiz reported. Hearthside, the largest contract food manufacturer in North America, was awarded a $450,000 performance-based grant from the Michigan Business Development Program, administered by the Michigan Economic Development Corp.

A photo on Page 1 of the June 22 issue was a cropped photo of the Penobscot Building, not the Fisher Building. A different photo should have appeared with the story.

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BANKRUPTCIES . . . . . . . . . . . . . . . . . . 11 CALENDAR . . . . . . . . . . . . . . . . . . . . . . . 16 CAPITOL BRIEFINGS . . . . . . . . . . . . . 17 CLASSIFIED ADS . . . . . . . . . . . . . . . . 17 CRAIN’S LIST . . . . . . . . . . . . . . . . . . . . 13 DEALS & DETAILS . . . . . . . . . . . . . . . 15 MARY KRAMER . . . . . . . . . . . . . . . . . . . 7 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 6 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 14 RUMBLINGS . . . . . . . . . . . . . . . . . . . . 22 WEEK ON THE WEB . . . . . . . . . . . . . . 22

Correction

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CRAIN’S DETROIT BUSINESS // June 29, 2015

BY THE NUMBERS: THE MICHIGAN ECONOMY

Boats help keep state afloat By Dustin Walsh dwalsh@crain.com

With nearly 20 percent of the world’s fresh water found in and around the state, it’s no surprise Michiganders take to the water. In this state, you’re never more than six miles from a lake or stream. Michigan’s Great Lakes, and its more than 11,000 inland lakes and river systems, are a recreational boating powerhouse. There are nearly a million registered boats and an estimated 300,000 kayaks and canoes in Michigan. And despite a recent decline in boat registrations, Michigan boaters are spending more than twice as much on boats and boating related products than in 2008. Below is a snapshot of Michigan’s boating economy, the third largest in the nation.

Ruling could spark health plan changes Future of domestic partner coverage a question By Chad Halcom chalcom@crain.com

Noel Baril has a few big decisions to make shortly. Baril, vice president of total rewards at Detroit-based Henry Ford Health System, and his partner are raising an adopted child together and have to decide eventually what Friday’s U.S. Supreme Court ruling legalizing same-sex marriage nationwide means for their own family. It also likely means changes soon at Henry Ford Health, where Baril oversees employee benefits, compensation and retirement plan administration. He estimates that about 100 of the hospital system’s approximately 23,000 employees are enrolled in its long-standing health coverage plan for domestic partners — the kind of benefit employers and human resource organizations already have said may get phased out once

same-sex marriage is legal in Michigan. “We’re now in the situation — and it’s a wonderful challenge to have — of figuring out how Noel Baril: “It’s a we transition wonderful challenge from the domesto have.” tic partner coverage we offer to employees who could not qualify for spousal coverage before to the more traditional benefit plans we offer to married couples,” Baril said. “I think, unless there is legal or regulatory guidance that we receive that says otherwise, that we are going to offer a pretty long and liberal timeframe for any transitions that employees need to make. BeSee RULING, Page 20

LOOKING BACK The megaplex has taken on a starring role in metro Detroit over the past three decades. But the industry may be poised for a plot twist. More at crainsdetroit.com/30

Theater biz model changes its focus, then changes again By Chad Halcom chalcom@crain.com

The movie theater landscape today in metro Detroit is dominated by three companies that were largely unknown here in the mid-1980s, the result of a series of acquisitions, developments and changes in the theater business model. But while local market leaders such as Troy-based Emagine Enter tainment Inc., Bloomfield Hills-based MJR Theatres Inc. and Leawood, Kan.-based AMC Entertainment Inc. built their brand in large part on the megaplexes of the 1990s and 2000s, LISA SAWYER/CDB

MUST READS of the week ... Another ticket window of opportunity

Reflections on a life in art

The Detroit Pistons and Palace Sports & Entertainment have found a new way to sell tickets to games, concerts and other events: a text messaging service, Page 4

Graham Beal answers a few questions before he retires after nearly 16 years of leading the Detroit Institute of Arts through good times and what he calls “unwelcome challenges,” Page 5

many say it’s time to change once again. It was a different era when Crain’s reported on July 1, 1985, that market comer AMC had proposed its first foray into Southeast Michigan with the region’s first 12-screen theater in Canton Township. That development never materialized, but AMC is now the local market leader, with more than 150 screens at seven locations; and about 20 area theaters today can boast 12 screens or more. Still, some see a shift away from See THEATERS, Page 18

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Text-to-buy initiative boosts ticket sales for Pistons, PS&E By Bill Shea bshea@crain.com

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The Detroit Pistons found success last season with a new text messagebased ticket sales initiative, so it has been expanded to Palace Sports & Entertainment’s other venues. The Pistons moved about 1,000 single-game tickets with the text-tobuy technology, and PS&E has sold about 100 event tickets in the three weeks since launching the service. The numbers are not enormous, but the text service is intended as a way to move ticket inventory late, and each additional sale represents additional concession, merchandise and parking revenue. Anyone can sign up for the nearly instant service, which sends personalized text offers about games, concerts and events at the Palace of Auburn Hills, DTE Energy Music Theatre and Meadow Brook Music Festival up to 48 hours before they begin. Once they’ve created an account with event/team preference, users can buy tickets by replying to the text and confirming on a one-touch link. Users can enter their credit card information in their profile, or enter it for each purchase. The offers are for seats in a section of the venue, and users find out their seat locations when they arrive at the event. Those who respond to the text offers the fastest get the best tickets. Tickets are sent to the user both as a QR code on their phone that can be scanned at the gate on their mobile device and via printable email. That eliminates the online shopping cart, streamlining how long it takes to get tickets to a few seconds. The idea is for teams and venues to move unsold ticket inventory, whether it’s discounted nose-bleed seats or full-price premium seating, by getting the offers directly in front of fans who have opted into the system — meaning they’re among those more likely to buy such tickets. Last season, the Pistons became the first National Basketball Associa tion team to sign up with Scottsdale, Ariz.-based ReplyBuy to provide the text messaging ticketing service, known as Mobile Pass. The team got 4,000 fans to sign up for the service when it was launched in October, said Mike Donnay, PS&E’s vice president for brand networks. The Pistons did 21 Mobile Pass ticket offers during the seaMike Donnay: son. That generMobile Pass sold ated about 1,000 1,000 tickets ticket sales, of which 20 percent were first-time Pistons ticket buyers, Donnay said. “That is a great opportunity for us, and something we want to build upon,” he said. The tickets were discounted slight-

How text-to-buy works Up to 48 hours before an event begins, people who have signed up for the Mobile Pass service receive text messages featuring offers about games, concerts and events at the Palace of Auburn Hills, DTE Energy Music Theatre and Meadow Brook Music Festival.

Users can buy tickets by replying to the text and confirming on a onetouch link. Users can enter credit card information in their user profile or enter it for each purchase. Those who respond to the text offers the fastest get the best tickets.

Tickets are sent to the user as a QR code on their phone that can be scanned at the gate on their mobile device and also as printable email.

ly to $25 and were in the lower “end zone” area of the Palace. There are no fees for using the ticket texting service, Donnay said, so the $25 price is what users actually pay. Palace Sports went live with its Mobile Pass offers June 1. “What’s intriguing here, within 48 hours of launching (the) platform, more than 6,000 people opted in to receive special offers,” Donnay said. The program generated about 25 sales for the June 5 George Thorogood and the Destroyers/Brian Setzer’s Rockabilly Rio concert, he said. About 100 PS&E event tickets have been sold via text since the launch, Donnay said, a number that is expected to grow as more people become aware of the service. Teams and venues create ticketing campaigns based on the inventory they want to move and the database of fan profiles. ReplyBuy has a deal with Ticketmaster’s Archtics ticketing platform as customer relationship management software for Mobile Pass. A Pistons data analysis of ticketbuying habits revealed that most walk-up purchases happen within 48 hours of the game, so the Mobile Pass offers begin 48 hours before the game, Donnay said. Two days also is when PS&E offers are texted. “We’re trying to capture that walkup purchaser, someone that’s on the fence about coming to the game,” he said. Additionally, the Pistons and PS&E are using incentives to boost Mobile Pass participation, such as drawings to win autographed jerseys and free tickets. The Pistons and PS&E have made mobile technology a priority, and owner Tom Gores has financed tech upgrades as part of his $40 million in improvements to the Palace. ReplyBuy’s platform fits in with what PS&E is trying to do. “We saw a strategic hole in how we use mobile to get fans into the arena,” Donnay said. “It breaks down all the barriers.”

The PS&E signup is at PalaceNet.com/alerts. It allows fans to choose offers for alternative, comedy, country, family events, pop/R&B, rap/hip-hop, and rock/hard rock. The Pistons’ opt in is at ReplyBuy.com/pistons. ReplyBuy’s business model is simple: It keeps an undisclosed portion of every ticket sale. It also handles customer service issues on behalf of teams and venues. “We see Palace Sports & Entertainment as being extremely progressive in the entertainment industry. This is yet another great example by prioritizing instant mobile sales as being part of their long-term strategy,” ReplyBuy founder and CEO Josh Manley said in a statement. Mobile Pass has quickly gained a foothold among professional and college teams since ReplyBuy was launched four years ago. The Cleveland Cavaliers, owned by Detroiter Dan Gilbert, also use ReplyBuy, as does the team’s home venue, Quicken Loans Arena. Other pro teams using ReplyBuy include the Boston Celtics, Brooklyn Nets, Philadelphia Flyers, Washington Capitals, Winnipeg Jets, Arizona Coyotes, Houston Rockets, L.A. Clippers, Minnesota Timberwolves, Washington Wizards, San Francisco 49ers and Chicago Fire. At the college level, ReplyBuy clients include Eastern Michigan Uni versity , Auburn University , University of Florida, University of Kentucky, Uni versity of Colorado and Oklahoma State University. Pro and college teams, and entertainment venues, have adopted increasingly sophisticated methods of ticketing in recent years in an effort to increase attendance and boost revenue. For example, variable pricing is when ticket prices are set by the expected popularity of the opponent, and teams typically have two or three levels of prices. The Pistons and the Detroit Lions have adopted dynamic pricing. Dynamic pricing is when ticket prices change based on an algorithm of factors, and the price can be changed at any time by the team (or automatically by the software). The Detroit Tigers, Detroit Red Wings and the University of Michigan football team use dynamic pricing. Ticket industry observers say mobile technology is where teams, venues and developers are concentrating their attention and resources, and ReplyBuy is making a name in the marketplace. “They’ve proven their case with the first couple of teams that adopted it,” said Connor Gregoire, an analyst for New York City-based ticket search engine SeatGeek. “ReplyBuy has done a good job of taking over that niche of text message ticket offers. We’ll continue to see other teams give it a try.” Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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Q&A: GRAHAM BEAL, DETROIT INSTITUTE OF ARTS

Despite ‘unwelcome challenges,’ DIA’s Beal to retire happily Detroit Institute of Arts Director Graham Beal is set to retire this week after leading the museum for nearly 16 years. Although the museum’s challenges” through Detroit’s bankruptcy are best-known, Beal’s signature contribution came in 2007 when the museum reinstalled 5,000 pieces of art after a sixyear renovation and expansion. The reinstallaGraham Beal: tion project folRetiring after 16 lowed years of years leading DIA. audience research to identify what most attracted and repelled museum visitors. Beal spoke with Crain’s senior reporter Sherri Welch about his DIA tenure. His remarks have been edited for clarity and length. What would you say the highlights have been during your time at the DIA?

The reopening of the new DIA and the success of the reinstallation, which was meant to make the museum as accessible as possible. I will always cherish that as something that was more successful than I could have dared hope. The exhibition on which I exit (“Diego Rivera and Frida Kahlo in Detroit”) is everything we want the museum to be — local, international, passionate and about the significance of art in life. It really sort of sums up many of the things I feel most strongly about what museums could do. I’ve benefited from extraordinary help and support and advice, formal and informal; a great chairman; great colleagues at the DIA. I’ve been privileged to be the leader in something that’s turned out to be significant.

ing the huge asbestos problem during the renovation of the museum. It meant that we were going to have to raise a lot more money and do a whole new set of planning. I described it as a body blow at the time. What lessons would you say you’ve learned in leading the DIA?

I’ve learned a lot about dealing with pure politics with a capital “P.” The old, trite saying about the similarity between watching sausage being made and watching politics was driven home to me. It’s not always a pretty sight.

country and in Europe, there is just astonishment that an art museum could get a tax passed for it with all the politicians desperately trying to find ways to lower taxes. I think by and large people think it isn’t likely. We did it because it was existential for us. Our business model was broken. We’d lost all city support and later state support. We had been raising an additional $15 million each year and knew that was unsustainable. We knew without the millage, we were going to shut down. Most museums don’t face that.

And it looks like that is likely to happen with at least one institution. Will you and your wife stay here?

We’re going to lead a semi-nomadic existence for a while and see what things look like. Right now, we’re planning on staying here, but not forever.

Are you happy with how you are leaving the museum?

Yes, I am. I’ve done what I came to do. I’ve made my contribution. There are aspects that didn’t get quite finished, like reinstalling the Asian collection. But as a whole, it feels like the right time to be stepping aside. 䡲

Any advice for your successor? Is there anything you’d do differently or exactly the same as you did it?

I don’t think there’s anything I’d do differently. The things we wanted to do, like the reinstallation — we did them. They turned out to be successful. It would have been nice if we hadn’t lost so much state funding so we didn’t have to go out for a millage, but we did. And it would have been nice if the powers that be, the emergency manager, would have agreed with the attorney general that we were a public trust and could not be sold to repay public debts. But he didn’t. Is the millage a precedent?

It is and it isn’t. Everywhere, in this

I don’t really have advice. But I do aspire that whoever comes in that he or she will build on what’s been done here and somehow extend the mandate of inclusiveness. If, to do that, they need to tear down my beloved reinstallation, so be it. What’s important is that it’s an institution that is valued by its community. What’s next for you?

Some travel and doing some writing of, for lack of a better word, memoirs and a little bit of art history. My notion is I’m not going to be running anything full time. But obviously, I want to keep active and involved, so some form of advisory work is something I’m interested in.

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What were the low points?

The public challenges everyone knows (like the threat to the collection amid Detroit’s bankruptcy). I wouldn’t call them low points so much. They were profoundly unwelcome challenges. A real low point was the divisiveness I found here at the DIA when I first came. I’d been involved with nonprofit turnarounds before coming to the DIA, but nothing prepared me for the difficulties and complexity I found here. Because of the historical circumstances of this institution in this city — the history of the city of Detroit with all of its challenges, the economic woes of Southeast Michigan, all of those factors — it was just more challenging than I thought. Though it looked to the world like there was one DIA, there were in fact two with different working rules for different employees from the Founders Society and the city. It just took a lot of work and a long time to bring it together. After three years, I wondered, “Can I do this, am I up to this?” Obviously, we did. Another low point was discover-

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CRAIN’S DETROIT BUSINESS

OPINION Define transit plan, then find support T

his month’s rejection of rejoining a regional bus system by Bloomfield Hills city commissioners tells transit advocates they have work to do before voters are asked to approve a regional transit millage in November 2016. Residents told commissioners the wealthy suburb could “take care of its own” and didn’t need public buses — or a millage that would add $300 to $400 a year to the typical homeowner’s tax bill. And a majority of commissioners couldn’t justify spending $750,000 from city coffers to be part of the Suburban Mobility Authority for Regional Transportation. Those reasons are echoed across the more than 50 communities in the region that have opted out of SMART. State legislation creating the new four-county “regional transit authority” in Southeast Michigan removes the ability to opt out. It’s likely that the new regional plan will focus on phasing in “bus rapid transit” — sleek new buses in reserved traffic lanes with limited stops and speedier routes because traffic signals give them the green light. Woodward Avenue may in fact be the first corridor. So perhaps the new vision will be more attractive to wealthy suburban voters. Business has a stake in the debate. In Bloomfield Hills, for example, there are companies with offices on the Woodward corridor; there are nursing companies whose aides use public transit to reach clients’ homes. First step: defining the transit plan. Second step: building the support to fund it.

Beal legacy more than saving art The next director of the Detroit Institute of Arts owes Graham Beal a big debt. Beal officially leaves on Tuesday after a 16-year tenure. Most people would think that “saving the art” from sale during Detroit’s bankruptcy process is the big “win” for Beal’s successor. But it actually starts earlier than that, when Beal helped to raise the dollars required to enlarge and reshape the museum from the perspective of the visitor experience. The magnificent reopening of the museum in 2007 brought new audiences in droves and paved the way for the successful tricounty millage that now brings $23 million a year to the museum. (See senior reporter Sherri Welch’s interview with Beal on Page 5.) But with tax support comes responsibilities of transparency and stewardship, even though the DIA is technically an independent nonprofit organization. The millage runs for 10 years. If the museum intends to seek public support beyond 2021, the next director will need to be artful in continuing to engage the public imagination and support while managing sometimes thorny political relationships, too.

LETTERS

Investment in literacy also key to Detroit’s future Editor: I read Mary Kramer’s June 1 column “Detroit’s future is about more than money: jobs too” with great interest. She is right about the need for more workforce training programs. However, what always seems to be missing from this strategy is the piece that includes those with literacy skills (reading and math) too low to qualify for the training programs. In metro Detroit, the rate of low-literacy adults has been estimated from one in three to one in two. Our experience at Reading Works, through our nine literacy provider partner agencies, is that the truth probably lies somewhere between those numbers. Most current workforce training programs require a high school diploma or GED. Strike one for low-skilled adults. In 2014, the GED test got a lot harder, adding six to 12 months onto the time it takes to prepare for the test. Strike two for low-literacy adults. Funding for adult basic education from the state is in jeopardy of being drastically cut or eliminated. Strike three, and they are out of the running for self-sustaining jobs. Even worse, they are disenfranchised from fully participating in Detroit’s

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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

renaissance. It’s not just about jobs. Millions of dollars are being allocated to early childhood, with little to none going toward building family literacy. Yet the best indicator of a child’s literacy level is the literacy level of the mother. How much more impact would those dollars have if they included teaching the child’s caregivers to read more proficiently? How much more would children achieve if they had a stable home provided by parents who qualify for jobs that pay a livable wage? It’s also about health care costs. Adults who don’t yet read proficiently cannot effectively manage chronic health conditions (theirs or their children’s), read medicine instructions or follow health improvement plans that might include something as simple as cooking recipes. According to a study by Pfizer, 3 percent to 5 percent of the

total health care costs across the country are due to poor literacy skills, translating into $75 billion to $125 billion a year. And it’s not just a Detroit concern. Across the country, according to a 2013 study by the Organisation for Economic Co-Operation and Development, one in six adults in the U.S. has low literacy skills. In Michigan, that number doubles to one in three. To compare, in Japan it is one in 20. Internationally, the U.S. is below average. It’s not just buildings that have suffered from decades of neglect. Low-skilled adults are being turned away from workforce training programs and job fairs, yet they have 10, 20, 30 years left to participate in the workforce. They are unable to help their children achieve beyond the poor educational choices offered to them. They need our investment, both time and money, from Washington to Lansing to the metro Detroit region to build necessary skills and be included in our region’s economic recovery. More importantly, we need them to help build our families and our community. Paula Brown Executive director, Reading Works, Detroit

TALK ON THE WEB Re: Fox Theatre marquee gets a face-lift, thousands of new lights Exterior night-lighting in downtown Detroit tends to be sedate and corporate, all very proper and a little dull. This project will add some flash and color. I hope it encourages other venues to create visual excitement to herald all the new development in the area. James38

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

Re: Losing football, payouts fuel $7.9M UM athletics deficit Considering the legacy of David Brandon, I am happy that the deficit was ONLY $7.9 million. TomA2

Re: Court fight creates a thorn for Wesley Berry Flowers Anyone who wants to send flowers to someone should just call a local shop. Far too often, people think these national companies are convenient then are shocked to discover how much time they take, not just to place the order, but to resolve any issues. For the best See TALK ON THE WEB, Page 7

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Unions need to ponder how to stay relevant MARY KRAMER: Publisher mkramer@crain.com n a couple of weeks, the United Auto Workers and Detroit automakers will kick off contract talks to replace four-year pacts that expire Sept. 14. As Dave Barkholz has reported for our sibling publication Automotive News, the UAW hopes to eliminate or significantly change the “tier

two” wage structure it approved in 2007 to help save the Detroit 3 and create jobs. As the industry has rebounded, plants have hired thousands of new workers. Today, nearly 30 percent of the Detroit 3’s hourly workers are paid tier-two wages, which are roughly at least $10 an hour less than tier one. For the union, the two tiers rub against the grain of the “equal pay for equal work” union philosophy. For the automakers, according to Barkholz, each additional dollar per hour in wages costs the automakers

about $100 million. Eventually, all this will play out among unionized suppliers, too, because supplier contracts mirror those of their biggest customers, the Detroit . Tiered wages and transplants seem to be the big issues for the UAW’s future. The union has been stymied in its attempts to organize foreign automakers with plants in the South; the Volkswagen plant in Chattanooga, Tenn., was its last failure. So it now looks as if it is trying through the back door — by trying

to organize suppliers that have some unionized plants already. In a largely PR/pressure tactic, Lear Corp. has been picketed for allegedly creating unsafe working conditions at a small foam plant in Alabama that the UAW is trying to organize. Lear has a lot of unionized plants, but its customers for the Alabama plant are decidedly nonunion. So Lear has no interest in angering them by putting out the welcome mat for the UAW at that plant. What do the Lear workers want? That could be settled with an elec-

tion, but the UAW wants Lear to agree to a “card check” process — which is more susceptible to peer pressure than the secret-ballot process an election would afford. But beyond the issues of tiered wages and transplants, the issue for all labor unions is relevance. Despite broad public concerns about economic inequality in the U.S., workers don’t seem to be clamoring for union representation as the solution. How can unions grow without answering the question “Why aren’t they?” 䡲

TALK ON THE WEB From Previous Page

service and quality, go local. Roxanne

Re: Andiamo takes its food on the road to attract younger diners What’s great about food trucks is their ability to bring in dining options to areas where there are none or few, and/or where there are so many diners in an area the current brick-and-mortar establishments can’t handle all the business. So, it’s hard for me to un derstand why Andiamo would choose to set up shop in a parking lot in the Greektown entertainment district, where there are at least a dozen lunchtime spots and few — if any — wait lists or lines to get a seat.

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SPECIAL REPORT KIRK PINHO Reporter’s Notebook WEB: kpinho@crain.com TWITTER: @kirkpinhoCDB

OAKLAND COUNTY

Catching up on Birmingham plans A year ago last week , Crain’s reported on more than $75 million in development and redevelopment projects in and around downtown Birmingham. Some of those five projects are now largely complete, while others are in various states of progress. Birmingham remains one of the most desirable enclaves for developers and mixed-use projects. Here is an update on what’s brewing in Birmingham: 220 Merrill St., mixed-use redevelopment of the 23,000-squarefoot former 220 restaurant building into the new 220 Merrill restaurant and 7,000 square feet of office space on the second floor, with space for another restaurant or lounge in the basement. Developers: The Elia Group, Birmingham, and Denise Ilitch. Estimated cost: $5 million-plus. Completion date: November. The restaurant opened in 2014 with Executive Chef Frank Olbrantz. Office space is being marketed for lease. All Seasons of Birmingham, 820 E. Maple Road, redevelopment of the former William R. Hamilton Funeral Home into a 131-unit senior housing complex. Developers: Etkin LLC, Southfield, and Beztak Cos., Farmington Hills. Completion date: July. Estimated cost: $26 million. The Forefront, 400 S. Old Woodward Ave., 49,000-square-foot mixed-use redevelopment of the Greens Art Supply building with firstfloor commercial use and 10 highend condominiums. Developer: Joey Jonna, founder of Jonna Luxury Homes LLC, Birmingham. Estimated cost: Previously estimated at $20 million, but Jonna said that figure is no longer accurate. Completion date: Summer 2016. The Balmoral , 34901 Woodward Ave., 88,000-square-foot mixed-use redevelopment with underground parking, drivethrough space, commercial and residential space. Developer: Woodward Brown Associates LLC , owned by Harvey Weiss and Najib Samona, Royal Oak. City officials did not have development costs or completion time frame. The Palladium, 202 N. Old Woodward Ave., redevelopment of second floors of theater space into two floors of office space and three residential units on the southeast corner of the roof. Also includes two restaurants, Au Cochon and Arthur Ave., owned by Zack Sklar. Developer: A.F. Jonna Development & Management Co., Bloomfield Hills. City officials did not have development costs or completion time frame. Check crainsdetroit.com for past stories on these projects and continued updates.

HUBBUB

Rochester Hills doesn’t have a downtown, but it has retail hotspots and plenty of activity By Laura Cassar Special to Crain’s Detroit Business

ere’s a statistic that developers like to hear: Every day, 50,000 vehicles travel Rochester Hills’ main thoroughfare, Rochester Road, between M-59 and Auburn Road. That kind of market data is helping drive new construction and redevelopment in the area. One such development is Rochester & Auburn Shoppe’s . The 32,000- square-foot development is on the site of Meadowbrook Dodge, which closed during the recession and became an empty-lot eyesore. It now has one of the highest rental rates in the city, at $38 to $44 per square foot, and it’s fully leased. Starbucks Coffee Co. and Qdoba have moved in. The development is part of a retail boom in the city, which has a 6.2 percent retail vacancy rate — its lowest ever. “We don’t have a lot of virgin land available, so redevelopment opportunities are important,” said Rochester Hills Mayor Bryan Barnett.

Other tenants that have signed leases at Rochester & Auburn: 2941 Street Food, serving Mediterranean cuisine; Lapels , an organic dry cleaner; Mod Pizza , among the first in Michigan, set to open in the fall; Visionworks ; Firehouse Subs ; Sprint ; and Premier Pet Supply. “The traffic count at this location is a huge plus. It’s one of the premier intersections in Oakland County,” said Corbin Yaldoo, senior associate at CMP Real Estate Group , which manages the property.

Hills’ hubs Rochester Hills doesn’t have a downtown development association or a downtown like neighboring Rochester’s — and it doesn’t try to re-create or compete with that city’s traditional downtown atmosphere. Instead, Rochester Hills focuses on its hubs. These include: Northeast. The corner of Rochester and Tienken, which includes a Papa Joe’s Gourmet Market & See ROCHESTER HILLS, Page 10

Newcomers quick to fill retail vacancies in Rochester Hills Stein Mart. The Jacksonville, Fla.-based discount clothing and housewares store is moving into the former Borders location at 1122 Rochester Road. It will be the first Stein Mart in metro Detroit. Construction is ongoing to add 5,600 square feet to what will be a 32,000-square-foot store. After Borders closed in the fall of 2011, Famous Furniture operated from the site. Famous Furniture moved across the plaza into the space that has been vacant since Cost Plus World Market closed in 2009. Stein Mart will open later this summer. Fresh Thyme Farmers Market. The Phoenix-based natural grocer will open July 22 in the Hampton Plaza shopping center at Hamlin and Rochester roads. The site has been vacant since the 22,000-square-foot Fresh Market Inc. closed after six months in 2006. The state’s first Fresh Thyme opened this year in East Lansing. Stores are also planned in Troy and Northville. Lululemon. The women’s athletic store will open in 3,000 square feet at The Village of Rochester Hills in July. It will be the fourth Southeast Michigan location for the Canada-based store. The store is under construction in a space vacated by women’s clothing shop J Jill, which moved to another space in the Village of Rochester Hills. Lululemon brings the occupancy rate at the outdoor mall at Adams and Walton to 90 percent. Food chains. New walls are going up at Livernois Road and Walton Boulevard at the former site of the demolished Big Boy restaurant, which closed in 2010. New construction by Troy-based Stuart Frankel Development Co. will house national chains Pot Belly Sandwich Shop and Smash Burger as well as local chain Leo’s Coney Island, across the street from Rochester High School. The restaurants are slated to open in the early fall.

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SPECIAL REPORT: OAKLAND COUNTY

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Plenty of retail hotspots and activity Catering on the northwest corner and City Walk Plaza on the southeast corner, anchored by the Bar Louie restaurant for just under four years. äĄ˛ Hampton Village Centre. The 455,000-square-foot development at Rochester and Auburn roads is anchored by Target and Best Buy. It could see some redevelopment in the next few years, city officials said, although no specific plans have been presented. äĄ˛ Hampton Plaza. The nine-store plaza, at Rochester and Hamlin roads, stood nearly empty for years. Now itâ&#x20AC;&#x2122;s nearly full, with Dunhamâ&#x20AC;&#x2122;s Sports moving in this year and a Fresh Thyme Farmers Market set to open this summer (see box , Page 9). äĄ˛ The Village of Rochester Hills . The Village, at Walton Boulevard and North Adams Road, has more than 50 stores, restaurants and services, including a Whole Foods Mar ket.Its occupancy rate is 90 percent. Of all the hubs, The Village comes closest to creating a Main Street feel. It hosts community events such as the annual Rochester Hills holiday lighting ceremony, a summer concert series and outdoor movies for kids. â&#x20AC;&#x153;We try to look through the lens of the moms and at their relationships,â&#x20AC;? G. Scott Aikens, vice president of leasing for Robert B. Aikens & Associates, which owns the property. That lens has brought the openings of a Douglas J salon; Evereve , a womenâ&#x20AC;&#x2122;s boutique; and Paper Source, a stationery store that offers classes for kids and adults. In addition, Lululemon will open a store at The Village this summer (see box on page 9). â&#x20AC;&#x153;We are bringing Birmingham up to Rochester Hills,â&#x20AC;? Aikens said in discussing Lululemon and Paper Source, which have downtown Birmingham locations. Aikens said he would love to see a locally owned farm-to-table restaurant come to The Village as well as more regional and local businesses. The stateâ&#x20AC;&#x2122;s first B Spot , a burger restaurant created by â&#x20AC;&#x153;Iron Chefâ&#x20AC;? Michael Symon, has been open a little over a year at The Village, Regional Manager Frank Ritz said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re doing great. We see a lot of families and a lot of regulars.â&#x20AC;? Fast-rising property values â&#x20AC;&#x201D; the second-fastest in Michigan, according to the personal finance website nerdwallet.com â&#x20AC;&#x201D; and low unemployment make the city an attractive entrance for retailers who use it as a test market, Barnett said.

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There are 219 buildings totaling 1.86 million square feet of retail space in Rochester Hills and neighboring

Rochester, which is surrounded by Rochester Hills on three sides. Of that, 50,000 square feet is empty, for a vacancy rate of 2.7 percent, according to first-quarter data from the Washington, D.C.-based real estate information service CoStar Group Inc. Asking retail rents were $21.48 per square foot in the first quarter. Those are the second-highest asking rents in the Detroit area, behind only Birminghamâ&#x20AC;&#x2122;s $24.56 per square foot. Rochester and Rochester Hills also had the third-lowest vacancy rate for markets with more than 1 million square feet of retail space in the five-county region of Wayne, Oakland, Macomb, Washtenaw and Livingston counties. This trails only the 2.4 percent vacancy rate on 4.63 million square feet of space in the central I-96 corridor, which stretches from western Wayne County into Livingston County, and the 1.9 percent vacancy rate on 7.12 million square feet of retail space in Washtenaw County west of U.S. 23. Even at more than 93 percent occupancy, Rochester Hills does have some notable vacancies to fill. One is the former Whole Foods Market in the Rochester Center on Walton Boulevard west of Livernois, which moved to The Village of Rochester Hills. Yaldoo said the Whole Foods lease doesnâ&#x20AC;&#x2122;t end until July, but when it does, property manager CMP Real Estate, will consider splitting the 22,500-squarefoot space for smaller retailers. New tenants have begun to fill spaces outside the Whole Foods space on the property, including Anytime Fit ness and Great Lakes Laundry. The property is owned by Jonna Management Group LLC in Sylvan Lake, Laith Jonna and associated family. One of the cityâ&#x20AC;&#x2122;s largest vacancies is a former Kmart property at Rochester and Avon roads. The asking price for the 120,000-square-foot building, on 13 acres, is $7 million. Dan Kukes, associate broker at Landmark Investment , which manages the property, declined to comment about the status of the property. Jim Bieri, president of Detroitbased Stokas Bieri Real Estate , predicts the property will be sold within the next 18-24 months. â&#x20AC;&#x153;A building of that size will have more than one player vying for it,â&#x20AC;? Bieri said. â&#x20AC;&#x153;Rochester Road is an incredibly busy street with the retail close to the road, people coming and going to work, and the housing is dense.â&#x20AC;? Barnett said a business big enough to want the Kmart property could employ 300-400, and thatâ&#x20AC;&#x2122;s â&#x20AC;&#x153;what a city is supposed to do.â&#x20AC;? äĄ˛ Kirk Pinho contributed to this story

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SPECIAL REPORT: OAKLAND COUNTY

2 projects boost Rochester Hills’ multifamily housing By Laura Cassar Special to Crain’s Detroit Business

Two significant multifamily housing developments are underway in Rochester Hills: one for condominiums and one for luxury apartments. One new development is Barrington Park by Pulte Group , 148 singlefamily attached condominium units on 15.6 acres. This development, whose plan was just approved by the Rochester Hills City Council , will be off Auburn Road near Rochester Road with prices starting at $250,000. The location is near a variety of shopping and entrainment venues. The second project is an added phase for a mixed-use development by Clinton Township-based Aragona Properties. The developer says it has had great success with the commercial property at Rochester and Tienken roads, which is driving more housing to pair with it. Two of Aragona’s current tenants, Bar Louie and Big Boy , are top sales performers for their respective brands, project manager Francis Aragona said. When Aragona officials looked to a phase two for the site, they asked themselves what they could do better. The answer was to add housing via the City Loft development. “We had second-story office space at the property that never got leased, so we decided to convert it into a six-unit apartment package to test the market,” Aragona said. The City Loft units are the first of their kind in Rochester Hills. Rent for a one-bedroom unit is $1,449 a month and $1,900 a month for two bedrooms. The experiment showed that a demand existed for multifamily housing. A phase three — City Apartments , a four-story, 52- to 60-unit building — is in the planning stages. “The mixed-use development helps both the property and the city as a whole,” Aragona said. A tentative time line from Aragona Properties, which has invested about $10 million in the site, would have construction start the end of this year and apartments on the market by the end of 2016. Rent will be similar to City Lofts. The project still needs site plan approval. As for the Pulte development, a selling point is marketing to homebuyers who are priced out of the going rates for newly constructed single-family homes in the area, the

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homebuilder said. “We expect Barrington Park will draw strong demand, especially from young families and millennial buyers looking to buy new construction in one of the most desirable and prestigious submarkets in Southeast Michigan,” said Valerie Dolenga, a corporate communications representative for Pulte. “It represents one of the few opportunities for buyers to purchase new construction for less than $300,000.” The development, which will feature two-car garages that face a

back alley along with multiple pocket parks, should have its grand opening in late 2015 or early 2016. Rochester Hills Mayor Bryan Barnett said he’s pushing to see increased multifamily options in the city to attract a variety of people. Besides market demand and homebuyer requests for more options, the city has made a former push for multifamily development. And developers are starting to answer, Barnett said. “We are creating a live-walk community,” he said. 䡲

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(248) 858-0721 | SmallBusiness@OakGov.com The following businesses filed for protection in U.S. Bankruptcy Court in Detroit June 19-25. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. 䡲 LJH Construction LLC, 25801 Lehner Ct., Roseville, voluntary Chapter 7. Assets and liabilities not available. Natalie Broda

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SPECIAL REPORT: OAKLAND COUNTY

Persistence pays: Custom car condo sales take off in Pontiac By Kirk Pinho kpinho@crain.com

A lot of people thought Brad Oleshansky was out of his mind two and a half years ago. Pontiac’s bureaucracy was cumbersome, naysayers said. The city was in financial shambles, he heard. Zoning modifications would be a nightmare. No one would want to invest in a real project catered to car enthusiasts, Oleshansky was told. Brad Oleshansky: But after he Phase one sold out first floated the before ground idea to build broken. hundreds of climate-controlled car condos in the city in 2013, Oleshansky, founder and CEO of M1 Concourse LLC, appears to be proving doubters wrong. Construction on M1 Concourse, a $40 million-plus development with more than 260 car condos on an 87acre former General Motors Co. plant site at Woodward Avenue and South Boulevard, began last week, and

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M1 Concourse will have more than 260 climate-controlled car condos. Oleshansky said he is about to start revving up his presale efforts on the 57 condo units planned for the second phase of the development. “The entire first phase (80 condos) was sold before we even broke ground,” said Oleshansky. The condos arefor owners of classic and high-end cars to store vehicles in a climate-controlled environment. “There were two types of people: People who believed it was a great idea but that it was such a big idea that it would never happen, and then there were people who thought that it was pie in the sky and that it would never happen,” said Bob Waun, co-manager and partner of the Indian Hill Co. LLC and vice president of business development for

Bingham Farms-based Core Partners LLC. “There may even still be a few people who think that Brad will whiff on it. But … he’s a get-it-done kind of guy.” Oleshansky — whose equity partners are Paul and Roger Zlotoff of Birmingham-based real estate equity investment firm Uniprop Partners Ltd. — also is a nascent developer. This is the first real estate development for Oleshansky, the former CEO of Big Communications in Ferndale, which went out of business after he left. “I figured I’d start big,” he said, adding that the property had to be rezoned for mixed-use purposes. Kyle Westberg, president and CEO of Pontiac-based West Construction Services, was not one of the project’s naysayers. He said Oleshansky was perseverant in getting community support for the project, a process that included meeting with everyone from Oakland County planning officials to Rotary clubs. “When I first heard about it, I thought it was brilliant. I thought it was a great repurposing of real estate, that it would be a catalyst project and that it would drive economic development and be another positive conversation for Pontiac to talk about,” said Westberg, who is redeveloping the former Strand Theatre downtown in a $20 million project at 12 N. Saginaw St. that is expected to feature 838 seats and a Slows Bar BQ restaurant. Oleshansky said he had to spur interest in the project by meeting with public and private entities, ranging from car dealerships to banks. “I was trying to create a groundswell of support,” he said. Westberg is also the developer of the $20 million Lafayette Place development featuring the 46-unit Lafayette Place Lofts, the Lafayette Market and Anytime Fitness. All of M1 Concourse’s four phases are expected to be complete by 2019. There are two types of units in the first phase. There will be 54 units with about 600 square feet, which is enough for two cars, costing $110,000 to $120,000, depending on the location. There will be another 26 units with about 1,200 square feet, or enough for four to five cars, costing from $230,000 to $250,000, also depending on the location. The development is also expected to include a 1.5 mile recreational test track, restaurants, a walkable area with auto-focused businesses and year-round programming like car shows, concerts and product demonstrations. Pontiac-based George W. Auch Co. is the general contractor on the project, which was first announced in May 2013. 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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Top executive(s)

Revenue ($000,000) 2014

Revenue ($000,000) 2013

Percent change

Net income ($000,000) 2014/2013 Type of industry

General Motors Co. NYSE/GM; www.gm.com

Mary Barra CEO

$155,929.0

$155,427.0

0.3%

$2,804.0 $3,770.0

Automobile manufacturer

Ford Motor Co. NYSE/F; www.ford.com

Mark Fields president and CEO

144,077.0

146,917.0

-1.9

3,186.0 7,175.0

Automobile manufacturer

Lear Corp. NYSE/LEA; www.lear.com

Matthew Simoncini president and CEO

17,727.3

16,234.0

9.2

672.4 431.4

Automotive supplier

Penske Automotive Group Inc. NYSE/PAG; www.penskeautomotive.com

Roger Penske CEO

17,177.2

14,443.9

18.9

286.7 244.2

Automobile dealerships

Delphi Automotive plc NYSE/DLPH; www.delphi.com

Kevin Clark CEO and president

17,023.0

16,463.0

3.4

1,440.0 1,301.0

DTE Energy Co. NYSE/DTE; www.dteenergy.com

Gerard Anderson chairman and CEO

12,301.0

9,661.0

27.3

911.0 668.0

Ally Financial Inc. NYSE/ALLY; www.ally.com

Jeffrey Brown CEO

9,667.0

9,577.0

0.9

1,150.0 361.0

Masco Corp. NYSE/MAS; www.masco.com

Keith Allman president and CEO

8,521.0

8,173.0

4.3

856.0 288.0

Building products

BorgWarner Inc. NYSE/BWA; www.borgwarner.com

James Verrier president and CEO

8,305.1

7,436.6

11.7

655.8 624.3

Automotive supplier

Visteon Corp. NYSE/VC; www.visteon.com

Sachin Lawande CEO

7,509.0

7,439.0

0.9

(295.0) 690.0

Automotive supplier

Federal-Mogul Holdings Corp. Nasdaq/FDML; www.federalmogul.com

7,317.0

6,786.0

7.8

(168.0) 41.0

Automotive supplier

7,179.0

6,566.0

9.3

477.0 452.0

Energy

Energy company

Bank holding company

CMS Energy Corp. NYSE/CMS; www.cmsenergy.com

Con-way Inc. NYSE/CNW; www.con-way.com

Douglas Stotlar president and CEO

5,806.1

5,470.0

6.1

137.0 99.2

Transportation

Kelly Services Inc. Nasdaq/KELYA; www.kellyservices.com

Carl Camden president and CEO

5,562.7

5,413.1

2.8

23.7 58.9

Staffing services

Meritor Inc. B NYSE/MTOR; www.meritor.com

3,766.0

3,701.0

1.8

249.0 (22.0)

3,696.0

3,207.3

15.2

143.0 94.5

3,244.0

3,090.5

5.0

42.8 47.9

Automotive supplier

Metaldyne Performance Group Inc. (MPG) C NYSE/MPG; www.mpgdriven.com

Ivor Evans chairman, president and CEO David Dauch chairman, president and CEO Jeffrey Edwards chairman, president and CEO George Thanopoulos CEO

2,609.5

2,533.9

3.0

73.3 57.9

Automotive supplier

Tower International Inc. NYSE/TOWR; www.towerinternational.com

Mark Malcolm president and CEO

2,067.8

2,100.2

-1.5

21.5 (20.3)

Automotive supplier

Domino's Pizza LLC NYSE/DPZ; www.dominos.com

Patrick Doyle president and CEO

1,993.8

1,802.2

10.6

162.6 143.0

Restaurant franchisor

TriMas Corp. NASDAQ/TRS; www.trimascorp.com

David Wathen president and CEO

1,499.1

1,388.6

8.0

69.3 80.1

Manufacturing conglomerate

Universal Truckload Services Inc. Nasdaq/UACL; www.goutsi.com

Jeffrey Rogers CEO

1,191.5

1,033.0

15.3

45.4 50.6

Transportation

ITC Holdings Corp. NYSE/ITC; www.itctransco.com

Joseph Welch chairman, president and CEO Bharat Desai chairman Nitin Rakesh CEO and president Daniel Coker president and CEO

1,023.0

941.3

8.7

244.1 233.5

Utility - electricity transmission

911.4

824.8

10.5

249.7 219.7

Information technology

811.3

662.1

22.5

70.1 33.8

Thermal technology

American Axle & Manufacturing Holdings Inc. NYSE/AXL; www.aam.com

Cooper-Standard Holdings Inc. NYSE/CPS; www.cooperstandard.com

24 25

Syntel Inc. Nasdaq/SYNT; www.syntelinc.com

Gentherm Inc. Nasdaq/THRM; www.gentherm.com

Commercial vehicle, heavy duty truck and defense supplier Automotive supplier

B Meritor Inc.'s fiscal year end is 9/2014. C Metaldyne merged with Grede Holdings LLC, Southfield, and Royal Oak-based HHI Group Holdings LLC in August 2014 to form Metaldyne LIST RESEARCHED BY CRAIN'S STAFF, SONYA D. HILL

2014 total revenue: $447 billion Retail 3.8% Energy 4.6%

Manufacturing 2.2% Banking 2.2% Transportation: 1.6% Staffing: 1.2% Restaurants: 0.4% Tech: 0.2%

Automotive 83.7%

This list of publicly held companies is a compilation of the largest companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties that have stock traded on a public exchange. Information is from SEC filings.

Performance Group Inc. It went public Dec. 11, 2014.

Retail 11.2%

Banking: 2.1% Energy: 1.3% Real estate: 0.4% Services: 0.4% Agriculture: 0.3%

Automotive supplier

Manufacturing 2.7% Tech 2.3%

Automotive 79.5%

Rainer Jueckstock co-CEO, co-chairman and CEO, Powertrain Daniel Ninivaggi co-CEO, co-chairman and CEO, Motorparts John Russell president and CEO

1985 total revenue: $221 billion

Other

Company Rank Exchange/Ticker symbol; website

% of revenue by sector from top 25 on 1985, 2014 Crain’s publicly held lists

Other

CRAIN'S LIST: SE MICHIGAN PUBLICLY HELD COMPANIES Ranked by 2014 revenue

Auto still tops among shifting industries While the automotive industry still accounts for the vast majority of the revenue of the 25 largest publicly traded companies in Southeast Michigan, some changes have occurred within the pack since 1985. The biggest changes have been in banking and retail. There are fewer banks on the list with a reduction from five based on 1985 revenue to only one, Ally Financial Inc. Publicly traded retailers have also dwindled to just one, Penske Automotive Group. The sector that has grown the most is automotive, moving from five in ’85 to 13 now — and two of the original five have been acquired: Chrysler, No. 4 in 1985 revenue, now is owned by Fiat, who renamed it FCA US LLC . In 1987, Chrysler acquired American Motors Corp. which was No. 6 in 1985 revenue. Many of the companies on the original list moved off through mergers or bankruptcy: Kmart (No. 3); Burroughs (No. 5), Fruehauf (No. 8), NBD Bancorp (No. 9), Ex-Cell-O Corp . (No. 11), First Federal of Michigan (No. 12); Borman’s/Farmer Jack (No. 13), Comeri ca (No. 14), Michigan National (No. 18), Thorn Apple Valley (No. 19), Manufactur ers National (No. 20), Masco Industries (No. 21), Allied Supermarkets/Great Scott! (No. 22), Cross & Trecker (No. 23), Handleman (No. 24) and Perry Drugs (No. 25). Pulte Home (No. 17) moved its headquarters to Atlanta. Still around and on the list: General Motors (No. 1), Ford (No. 2); Detroit Edison/DTE (No. 7), Masco (No. 10), FederalMogul (No. 15) and Kelly Services (No. 16).

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CRAIN’S DETROIT BUSINESS // June 29, 2015

14 SPOTLIGHT CHRIS PERRY, chief marketing officer, United Way Chris Perry has been named chief marketing officer of the United Way for Southeast ern Michigan .

Perry, 55, will oversee the marketing, brand and communication Perry functions as well as work with community impact and fund development to help meet their goals and establish long-term strategies. He has more than 25 years of marketing experience, including as vice president of marketing for Hyundai Motor America and vice president of marketing for the Chevrolet division of General Motors Co. In addition, Perry has won numerous awards, including “Marketer of the Year” from Advertising Age (a Crain’s sibling publication), the “Automotive Leadership Award” from the Detroit Free Press and the GM “African Ancestry Network for Diversity Leadership” award. He attended C a l i f o r n i a S t a t e University, Northridge .

PEOPLE

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

EDUCATION Deshawn Johnson to executive

director, human resources department,

Citizens Bank N.A., Southfield, from managing director of wealth management, CIG Capital Advisors Inc., Southfield.

INSURANCE Todd Ruthruff to

Lawrence Techno logical University,

Johnson

Southfield, from director, human resources department.

FINANCE Timothy McCabe to manag-

McCabe

ing director, chief information officer advisory practice, KPMG LLP, Detroit, from senior vice president and CIO, Delphi Automotive Corp., Troy.

chief relationship officer, Amerisure Mutual Insurance Co.,

Farmington Hills, from COO, Agency Business Solutions LLC, a Ruthruff subsidiary of Amerisure Mutual Holdings Inc., Farmington Hills.

LAW John Gonway

to member, Dickinson Wright PLLC, Troy, from

Howard Margo lis to senior vice

Margolis

president and senior banker, Citizens Private Bank & Trust,

Gonway

Inc., Canton Township. Also, Spencer Gill to vice president, IT and business process, from independent consultant, Sistek Northville; Jeff Bonello to director of business development, from commercial manager, Continental Structural Plastics LLC, Gill Auburn Hills; Ketan Patel to associate director, IT applications, from global ERP delivery manager, Capgemini, Van Buren Township; Shane Marietta to associate director, U.S. IT operations and global services, from lead IT project manager for global support operations, Visteon Corp., Van Buren Township; and Jillian Blaze to program manager, from director of program management, Horsburgh & Scott Co., Cleveland.

shareholder, cochair, real estate practice group, Maddin, Hauser, Roth & Heller PC, Southfield.

Michael Boyle

MANUFACTURING Jim Sistek to senior vice

president, business operations,

Boyle

Superior Industries International Inc.,

Southfield, from CEO, Infologic

LLC, Danville, Ill.

to vice president operations and general manager, Detroit Chassis LLC, Detroit, from president and CEO, ThyssenKrupp Crankshaft Co.

MARKETING Max Muncey to public relations manager, North American International Auto Show,

Muncey

Troy, from account supervisor, The Quell Group Inc., Troy.

NONPROFITS Michelle Henderson to vice presi-

dent of human resources, United Methodist Retirement Communi ties Inc., Chelsea,

from director of strategic workforce planning, analytics and Henderson human resource operations, University of Michigan Health System, Ann Arbor.

SERVICES Oscar King III to director, Kelley Cawthorne, Detroit, from of-coun-

sel, Kelley Cawthorne, Lansing. 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 // June 29, 2015

ACQUISITIONS & MERGERS BNP Media, Troy, a business-tobusiness publishing company, has acquired Architectural Record, Engineering News-Record and SNAP publication brands from Dodge Data & Analytics Inc., New York City. Terms of the deal were not disclosed. Website: bnpmedia.com.

CONTRACTS Humantech Inc., Ann Arbor, an

ergonomics consulting firm, worked with Build/Create Studios, Ann Arbor, a Web design company, to develop a responsive design website at humantech.com. Medical Weight Loss Clinic, Southfield, a physician-administered weight loss program, has contracted with Train Better Personal Trainers, West Bloomfield Township, to provide patients a diet and exercise program to achieve weight-loss and fitness goals. The programs are available at all Medical Weight Loss Clinic locations. Websites: mwlc.com, trainbetter.org. Denso International America Inc., Southfield, part of Denso Corp.,

Kariya, Aichi prefecture, Japan, has entered into an investment agreement with Peloton Technology Inc., Mountain View, Calif., an automated vehicle technology company and a developer of systems that advance safety and fuel savings for large truck transportation fleets. Websites: globaldenso.com, peloton-tech.com.

DEALS Submit news to cdbdepartments@crain.com

ZipLogix, Fraser, a real estate technology company, and Systems Engineering Inc., Greensboro, N.C., a software developer for the real estate industry, have entered into an agreement that creates a new integration between zipForm Plus with zipFormMLS-Connect and SEI’s Navica MLS software to share data and streamline workflow. Websites: ziplogix.com,

NEW PRODUCTS

the central and northeastern regions of Mexico. Website: us.mahle.com.

& DETAILS tion and mobility services for Center for Sight & Hearing, Rockford, Ill., a not-for-profit, freestanding community rehabilitation and health care facility that offers vision and/or hearing loss services in northern Illinois and southern Wisconsin. Websites: centerforsighthearing.org, leaderdog.org.

seisystems.com.

SolidThinking Inc., Troy, a subsidiary of Altair Engineering Inc., Troy,

Rx Optical Laboratories Inc., Kalamazoo, opened an Rx Optical store at 867 Eisenhower Parkway, Ann Arbor. Telephone: (734) 213-3529. Website: rxoptical.com. Rue21 Inc., Warrendale, Pa., opened a store at Macomb Mall, 32335 Gratiot Ave., Roseville. Telephone: (586) 296-2996. Website: rue21.com.

EXPANSIONS Oakmont Senior Communities LLC, part of Huntington Management LLC,

Southfield, has opened Oakmont Rochester Assisted, an assisted living and memory care facility for seniors, 3466 South Blvd., Rochester Hills. Telephone: (248) 564-2200. Website: oakmontcommunities.com. Lipson, Neilson, Cole, Seltzer, Garin PC, Bloomfield Hills, has opened a

law office in Phoenix. Website: lipsonneilson.com. Mahle North America, Farmington Hills, part of Mahle GmbH, Stuttgart, Germany, has opened manufacturing plants in Ramos Arizpe and Celaya, Mexico, to support automotive customers with assembly operations in

DFCU Financial Credit Union, Dearborn, has opened a branch at 855 Ann Arbor Road, Plymouth Township. Website: dfcufinancial.com. Planet Fitness, Newington, N.H., and PF Michigan Group LLC, Northville, area developer of Planet Fitness health clubs, has opened two new franchises: 8260 Mile Road, Shelby Township and 6650 Telegraph Road, Bloomfield Township. Website: planetfitness.com.

MOVES Dongan Electric Manufacturing Co.

has moved its corporate headquarters from 2987 Franklin St., Detroit, to 34760 Garfield Road, Fraser. Website: dongan.com.

has introduced SolidThinking Inspire 2015. The software combines faster geometry functions with an updated user interface and expands the scope and complexity of problems that can be addressed. Website: solidthinking.com.

NEW SERVICES ProQuest LLC, Ann Arbor, with the National Security Archive, based at George Washington University, Wash-

ington, D.C., is providing a new online collection of declassified documents. The Digital National Security Archive has expanded to include CIA Covert Operations II: The Year of Intelligence, 1975, a collection of 1,000 declassified documents that reveal the inner workings of America’s spy agencies. Website: proquest.com. Deals & Details guidelines. Email cdbdepartments@crain.com. Use any Deals & Details item as a model for your release, and look for the appropriate category. Without complete information, your item will not run. Photos are welcome, but we cannot guarantee they will be used.

Tweddle Group Inc., Clinton Township, an international automotive communications and publishing firm, and UIEvolution Inc., Kirkland, Wash., a vertical cloud software-asa-service provider, willcollaborate to create access to owner’s manuals and vehicle information through the vehicle head unit, smartphone or Web browser. Websites: tweddle.com, uievolution.com. Art Van Furniture Inc., Warren, has signed a franchising agreement with Rettig Brothers Furniture, Findlay, Ohio. Art Van’s first franchise store in Ohio will be renamed Art Van Findlay after completing remodeling and expansion in July 2015. Website: artvan.com. Ricardo Strategic Consulting, Van Buren Township, the global management consultancy subsidiary of Ricardo plc, agreed to provide Detroit Materials Inc., Wixom, an advance materials firm focused on the commercialization of ultra-high performance structural materials, with strategy and supply chain development in the automotive, truck and transportation sector. Websites: de troitmaterials.com, ricardo.com, Sunscreen Mist, Commerce Township, has signed a contract with the magazine Allure, The Beauty Expert, New York City, a Conde Nast publication, to provide a custom sunscreen spray station at various events. Website: sunscreenmist.com. Leader Dogs for the Blind, Rochester Hills, agreed to provide orienta-

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CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS // June 29, 2015

16 N E W H O L L A N D B R E W I N G & B A R L E Y F L AT S â&#x20AC;&#x201D; A P R O J E C T W I T H R O C K F O R D C O N S T R U C T I O N

CALENDAR WEDNESDAY JULY 1

Pearls of Wisdom. 5:30-7:30 p.m. Michigan Association for Female Entrepreneurs. Connect with other women and learn more about planning for the future. Beans & Cornbread, Southfield. $32. Contact: Tonya McNeal-Weary, (313) 3634075; email: info@mafedetroit.org.

UPCOMING EVENTS

SMART DESIGN M I X E D - U S E

B U I L D I N G S

Fishbeck, Thompson, Carr & Huber, Inc. architects I scientists I engineers I constructors

The Power of an Agile Mindset. 4 p.m. July 10. Ann Arbor Spark. Linda Rising, consultant and author, discusses how an agile mindset can also enhance creativity and innovation, estimation and collaboration in the workplace. Menlo Innovations, Ann Arbor. Free. Email: aflynn@menloinnovations.com; website: annarborusa.org. Veterans: The Untapped Talent Pool. 10 a.m.-1 p.m. July 14. Automa-

tion Alley. Season 2 of the â&#x20AC;&#x153;Michiganâ&#x20AC;&#x2122;s Got Talentâ&#x20AC;? event series is a seminar focused on hiring veterans. David Dunckel, Roush Veterans Initiatives Program manager, will speak. Automation Alley headquarters, Troy. $20 members, $40 nonmembers, $30 walk-in members, $50 walk-in nonmembers. Preregistration closes July 10. Contact: (800) 427-5100; email: info@automationalley.com. A New Automotive Era. 11:30 a.m.1:30 p.m. July 15. Inforum. In her book Road to Power: How GMâ&#x20AC;&#x2122;s Mary Barra Shattered the Glass Ceiling, author Laura Colby describes the personal character, choices and leadership style that steered Barraâ&#x20AC;&#x2122;s career trajectory to become CEO of General Motors. Westin Book Cadillac, Detroit. $40 Inforum members, $55 nonmembers, $25 students, $500 table sponsor (includes table of 10 with preferred seating and recognition in event presentation). Website: inforummichigan.org. Explore the True Costs of Business. 8-10 a.m. July 22. Michigan Manufacturing Technology Center. Learn principles that can benefit your business, identify problem areas and wasteful products, and maximize your profits. Michigan Manufacturing Technology Center, Plymouth. Free. Contact: (888) 414-6682. New Enterprise Forum. 5-7:30 p.m. July 23. Ann Arbor Spark. Training

entrepreneurs on how to present to investors. Three entrepreneurs each give a 4-minute pitch of their business idea to a panel of investor judges in a kinder version of televisionâ&#x20AC;&#x2122;s â&#x20AC;&#x153;Shark Tank.â&#x20AC;? Spark Central, Ann Arbor. Free. Contact: (734) 214-0110; email : PR@NewEnterpriseForum.org HealthcareNext: Risk-Taking Strategies. 7:30-9:30 a.m. July 28. Inforum. Laura Byars, vice president human performance, Blue Cross Blue Shield of Michigan, looks at the importance

of risk-taking strategies for careers in health care. St. John Macomb-

Crainâ&#x20AC;&#x2122;s hosts 2015 CFO of the Year Awards Honor the CFOs of the year and get a peek inside the business mind of sports CFOs when Crainâ&#x20AC;&#x2122;s Detroit Business hosts a panel discussion with the top financial executives from Detroitâ&#x20AC;&#x2122;s four major professional teams. The event is 7:30-10 a.m. July 23 at The Henry, Dearborn. Individual tickets are $75; a reserved table of 10 is $800. Preregistration closes at 9 a.m. July 21. If available, walk-in registration will be $90 per person. For information, contact Kacey Anderson, (313) 446-0300; email: cdbevents@crain.com; website crainsdetroit.com/events. Oakland Hospital, Madison Heights. $20 Inforum members, $30 nonmembers. Website: inforummichigan.org. Best Strategies in Supplier Diversity Luncheon. Noon-2 p.m. Aug. 19. Diversity Information Resources. Eric Holder Jr., former U.S. attorney gen-

eral, will speak. $124. Detroit Marriott Renaissance Center. Contact: Betsy Gabler, (612) 781-6819; email: info@diversityinforesources.com. Email Marketing for success. 8:3010:00 a.m. Aug. 25. Troy Chamber of Commerce. Kim Schott of Constant Contact on marketing activities that

help a small business or organization achieve its goals and objectives. Northwood University, Troy. $10, free for Troy Chamber members. Contact: Jaimi Brook, (248) 641-0031; email: jaimi@troychamber.com. Wayne County Networking Reception. 5:30 p.m. Sept. 24. Detroit Re-

gional Chamber. Wayne County Executive Warren Evans to keynote. Detroit Golf Club, Detroit. $15 chamber members before Sept. 17, $25 after; $590 future members. Contact: Marianne Alabastro, (313) 596-0479; e-mail: malabast@det roitchamber.com; website: detroitchamber.com. Michigan CEO Summit. 8 a.m.-2 p.m. Nov. 12. Business Leaders for Michigan. Tom Kelley, general manager of design firm IDEO, will be the keynote speaker. Westin Book Cadillac, Detroit. $125 (includes breakfast and lunch). Contact: Jennifer Hayes, (313) 259-5400; email: jenniferh@businessleadersfor michigan.com.

Calendar guidelines. Visit crainsdetroit.com and click â&#x20AC;&#x153;Eventsâ&#x20AC;? near the top of the home page. Then, click â&#x20AC;&#x153;Submit Your Eventsâ&#x20AC;? from the drop-down menu that will appear. Fill out the submission form, then click â&#x20AC;&#x153;Submit eventâ&#x20AC;? at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events.

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CRAIN’S DETROIT BUSINESS // June 29, 2015

Survey of biz shows many question compliance costs LANSING — One takeaway from a recent state survey of businesses in Michigan? Companies are still concerned about the cost and effort required to comply with state regulations. It sounds obvious — some businesses aren’t fans of regulations in general — but the survey comes as the state attempts to quantify how companies perceive the cost, approval time and effort needed for compliance as part of a broader review of Michigan’s regulatory climate. The state’s Department of Talent and Economic Development recently surveyed 519 companies that do business in Michigan on their im-

LINDSAY VANHULLE Capitol Briefings lvanhulle@crain.com TWITTER: @LindsayVanHulle

pressions of the business and regulatory climates. Their answers were based primarily on their interactions with three of the state’s main

regulatory departments — Treasury, Environmental Quality and Licensing and Regulatory Affairs. Overall, respondents gave compliance costs 49 out of a possible 100 points, the lowest-scoring area of the survey. The trend line is generally positive — that’s up 6 percentage points from a comparable survey in the winter of 2014 — but down 1 point from a poll conducted last summer. How companies feel about the fees, paperwork and processing times required from the different state agencies is useful information, a LARA spokesman said, because those perceptions could influence

where they locate or expand their businesses. “That’s a pretty tough question in the first place,” Lt. Gov. Brian Calley said about efforts to quantify those costs, because regulation “is not inherently a positive experience.” But the answers are meant to help determine whether the state has duplicative or unnecessary forms and administrative rules that can be eliminated, Calley said, with the goal of speeding up processing times and improving the regulatory process. The state is trying to learn, down to dollars and cents, how shaving time off approvals translates to saved time and resources for companies,

said Mike Zimmer, LARA’s director.

Comings and goings 䡲 Paula Cunningham, president and CEO of Lansing’s Capitol National Bank, will become the state director for AARP in Michigan as of July 6. In her new role, Cunningham will direct community outreach and advocacy for the organization’s 1.4 million Michigan members. She was the first female president of Capitol National Bank, where she served for nine years, and Lansing Community College , where she worked for 25 years and was president from 2000 to 2006. 䡲

Buyback of tax vouchers expected to save state $10M Deutsche

By Tom Henderson thenderson@crain.com

Legislation signed into law last Tuesday that authorizes the buyback of $100 million in tax vouchers for what has become a controversial state program won’t have any impact on state investments in venture capital companies. The program, the Venture Michigan Fund, will continue to make investments from its two funds, and both state and out-of-state VC firms that have been promised money from the funds will get the full allotment. The legislation will save the state about $10 million in interest to

Bank

and in shortfalls the bank would have incurred from selling vouchers at less than face value, said Al Pscholka, Al Pscholka: R-Stevensville, Buying $100 million who sponsored in vouchers pays in House Bill 4101. long run. The Venture Michigan Fund was created in 2003 to jump-start investments in tech startups in the state. It got broad bipartisan support in Lansing, passing in the Sen-

ate unanimously. The first fund of $95 million was launched in 2006 with money borrowed from Deutsche Bank and was collateralized with $200 million in tax vouchers in the event the state fell behind on future principal and interest payments. The second fund of $120 million was collateralized with $250 million in vouchers to an affiliate of Credit Suisse in 2010. At the time, legislators hoped that future interest payments would be made from profits returned to the fund from the VC firms it invested in. But the Great Recession delayed investments and delayed the

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growth of the startups, in turn slowing the pace at which they could be sold or taken public. Early this year, the House Fiscal Agency told legislators that it might cost the state as much as $140 million in the next three years to cover shortfalls in loan and interest payments for the first fund. The first payment of $50 million on the VMF I fund is due this year, with another $50 million due next year and perhaps $40 million due the year after. The first payment on the VMF II fund is due in 2021. Deutsche Bank wouldn’t use the

vouchers itself but would sell them to companies with a tax liability in Michigan at a discounted rate of perhaps 85 percent to 90 percent. The state would be on the hook for the full face value of the vouchers from the companies that bought them and also would have to make up the difference to Deutsche Bank. Buying $100 million in vouchers now, Pscholka said, saves the state from having to make up any shortfall between face value and what Deutsche Bank sold them for. It also reduces interest payments. 䡲 Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

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CRAIN’S DETROIT BUSINESS // June 29, 2015

THEATERS, from Page 3: Moviegoing appears to be returning to neighborhood venues ever-escalating screen counts and a larger market radius toward a strategy of new amenities and audience cultivation to continue growing business. Paul Glantz, co-founder and chairman of Emagine, sees a renaissance coming for the downtown movie house or multi-tenant space with five to 10 screens in a busy retail corridor. That’s part of his company’s vision for its next new theater opening around Labor Day weekend in Birmingham. “My perception is that moviegoing is now returning to its roots as a neighborhood retail business, so a five- to 10-screen theater is really ideal,” Glantz said. “I believe moviegoing needs to be convenient and that a well-located neighborhood theater can do very well. It’s also true you’re deploying fewer assets, and rehabbing an existing building can be more appealing than all-new construction. But making the product itself be closer to the guests can also help drive viewing frequency.” Emagine is finalizing a fivescreen theater opening on the fourth floor of the former Palladium 12 theater, owned by A.F. Jonna De velopment & Management Co., almost exactly a year after the Palladium closed last September. It follows a nine-screen Emagine Macomb that opened in December. The Emagine Palladium will be accessible from elevators in the building lobby, Glantz said, filling only a fraction of the multilevel, 2,200-seat theater built in 2001 by The Related Cos. The developer is converting the rest of the building into condominiums and office space. Also underway are talks of a possible Emagine at the $160 million redevelopment of the Michigan State Fairgrounds by investment group Magic Plus LLC , which includes former National Basketball Association and Michigan State Universi ty great Earvin “Magic” Johnson and Southfield-based Redico LLC. Glantz said Emagine is in active talks with Redico and hopes to have a decision on the fairgrounds site this summer — but a possible return to a plan for the former Bloomfield Park site now appears off the table. Emagine had planned a 55,000square-foot movie theater with 10 screens before all construction halted in 2008 at the half-finished development along Telegraph Road north of Square Lake Road in Pontiac. Redico acquired foreclosure rights to the project late last year. “Bloomfield Park is a convoluted issue for us. That one appears to be off the table, which is not to say it couldn’t ever be resurrected,” Glantz said. “But while the fairgrounds has been in active discussion, that one (Bloomfield Park) really seems to have gone the other way.” But Glantz said Emagine is also completing plans for two other metro Detroit locations and is also close to closing a deal this year that would lead to the company’s first lo-

Location, location ... Here are metro Detroit’s largest theater owners and some of their major locations and number of screens. AMC Entertainment Inc.

Forum, Sterling Heights (30 screens); Star Great Lakes, Auburn Hills (25); Star Fairlane, Dearborn (21); Star Gratiot, Clinton Township (21); Star Southfield (20); Livonia (20); John R, Madison Heights (15) Emagine Entertainment Inc.

Novi (18 screens); Canton Township (18); Rochester Hills (10); Royal Oak (10); Woodhaven (10); Macomb, Macomb Township (9); Palladium, Birmingham (5, estimated opening: September ) MJR Theatres Inc.

Brighton Towne Square (20); Marketplace Digital, Sterling Heights (20); Southgate Digital (20); Chesterfield Crossing, Chesterfield Township (16); Troy Grand (16); Westland Grand (16); Waterford Digital (16); Partridge Creek, Clinton Township (14)

GLENN TRIEST

Paul Glantz, co-founder and chairman of Emagine Entertainment Inc., sees a renaissance coming for the downtown movie house or multitenant space with five to 10 screens in a busy retail corridor. cation outside Michigan. Glantz entered the theater business by purchasing a one-screen theater in Clarkston in 1989, followed by opening a Cinema Hollywood in Birch Run in 1997. The first Emagine landed in Novi in 2002, followed by Canton Township in 2004 and Woodhaven about a year later. The company refitted the former Star Theatre in Rochester Hills in 2010, added a Royal Oak location in 2011 and the nine-screen Macomb Township theater last year. All the theaters operate under the Emagine name except for the Clio Square Cinema near Flint, Glantz said.

Less marketing MJR Theatres was a formative company in 1985, owning drive-in locations in Adrian and second-run locations in Livonia and Ann Arbor, as well as the Main Theatre in Royal Oak. The company built its first allnew theater in Adrian in 1987, then a larger theater in Chesterfield Township in 1995. Like Glantz, MJR CEO Mike Mihalich agreed that the trend toward bigger theater buildings with larger market radius might have peaked about 10 years ago, sometime after his own MJR Marketplace 20 opened in Sterling Heights. The megaplex star was on the rise when Grand Rapids-based Loeks-Star Theatres opened the Star Southfield in 1997 and AMC

opened the Forum 30 in Sterling Heights in 1999 — but no one has tried for the Forum’s scale since. MJR’s business model calls for larger theaters than Emagine’s. The company opened a 16-screen theater at Maple and Main streets in Troy a year ago at the site of a former Kmart, and Mihalich said he expects that size to be closer to the norm in the future. “People have done analyses on this sort of thing,” he said. “Today I don’t think 10 (screens) is enough, and 20 is probably too many. But some of that can have to do with the size of the land you’re going in on or your surroundings, and 14 to 16 is probably a good range.” Some of what limits the size of theaters, Mihalich said, is the number of marketable films. While there undoubtedly is more product, much of it isn’t marketed well enough to be profitable at the box office. “You can have the biggest, nicest building in the world, and if you go through a bad run of screenings, you’ll be hurting as much as anyone,” Mihalich said. “No doubt about it, there are a lot more movies coming out now than in the past. But some of that is because states put in incentives that help some independent filmmakers cover a production budget. And these things never get any kind of distribution. They don’t have money to market their movie, and

social media isn’t going to sell it.”

AMC enters market AMC wasn’t part of Southeast Michigan in 1985 but made a notable entrance by acquiring Nicholas George theaters the next year, said Randy Thomas, president of Commerce Township-based Insite Commercial Inc. and grandson of founder Nicholas George. The company, founded in 1941, owned theaters that included the Americana in Southfield. “We had a large footprint in the Detroit metro market, but then back before the nationals got in, the market was a number of family-owned theater chains,” Thomas said. Ryan Noonan, coummunications director for AMC, said the Forum is one of only nine 30-screen locations nationwide that the chain opened, all in the late 1990s and early 2000s, in Sterling Heights along with Los Angeles, Dallas, Houston and Chicago. But the company hasn’t opened a single new theater anywhere with more than 16 screens in several years. In early 2006, AMC acquired Loews Cineplex Entertainment Corp. and its nearly 200 theaters nationwide, including most of the former local Star theaters that had been sold to Loews by Grand Rapids-based founders Jim and Barrie Loeks.

Raising the bars All three companies are continu-

ing to add amenities to attract and expand audiences. AMC followed suit on Emagine’s adult-beverage service model by introducing MacGuffins in-theater bar in 2012, and Mihalich said MJR recently added The Studio bar/lounge locations to Southgate, Troy and Sterling Heights. A fourth lounge is under construction at the MJR Westland Grand Cinema 16. MJR also has invested $5 million, beginning last year, to add amenities to theaters in Southgate and Chesterfield Township. The Chesterfield theater is getting electronically controlled reclining seats in its $2.5 million upgrade. Mihalich said this feature is becoming a popular upgrade for older or midsize theaters, much like stadium seating was in the 1990s. Also on the increase are online ticket sales and call-ahead reserve seating to avoid the hassle of the ticket line and in-theater taverns or adult-beverage service. Glantz said Emagine is making a reach for younger children and parents. With that in mind, it has started a promotional initiative offering free toys to children under 11 for recent children’s movies such as “Cinderella,” and Glantz said a collaboration with Henry Ford Health System last year to assemble healthy snack boxes also has been successful. “I believe we do especially well with films that appeal to an adult audience, and we had some spectacular business earlier this year with ‘50 Shades of Grey,’ ” Glantz said. “I think folks who are thinking of an evening out with friends or as a couple think of our amenities. But we’ve also got an opportunity to do well with children’s movies, an opportunity to focus there.” Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

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CAMPBELL EWALD, from Page 1: Rebounding agency lands contract with Henry Ford insurance exchange, Covered Cali fornia. Both accounts include generating the creative aspects of the work for television commercials, outdoor billboards, radio, print, digital ads and social media. Campbell Ewald’s first work for Henry Ford will appear in the fourth quarter, and the Covered California work begins in the fall. Getting new revenue is a priority for Campbell Ewald as it awaits word on its appeal of the Navy recruiting account. The five-year, $450 million-plus account, which the agency had handled for 15 years, was awarded May 27 to New York City-based Young & Rubicam Inc.

The one-year contract is worth $84.4 million, but four one-year options bring the cumulative value to $457.4 million, according to the contract announcement. The appeal process has a 100-day time frame for a decision, which means a ruling could come from the General Accounting Office by October. Losing the Navy was the agency’s second major account loss in less than a year. In December, Campbell Ewald and two sibling firms lost the $280 million Cadillac account. Adding Henry Ford is a boost, but the agency won’t know whether it will have to shed jobs until it gets a decision on its Navy appeal, Campbell Ewald CEO Jim Palmer said.

In January 2014, the firm moved its 500 employees from Warren to a $15 million headquarters created inside the old J.L. Hudson Co. wareJim Palmer: Decision on job cuts house attached awaits appeal on to Ford Field in downtown DeNavy contract. troit. At its height, when it was still handling Chevrolet, Campbell Ewald had more than 1,200 staffers, mostly in Warren but also in satellite offices elsewhere in the country. Chevy was given to another agency in 2010 after 91 years with CE. One local advertising industry insider said Campbell Ewald’s loss of big accounts isn’t because of its work. “Reputationally, their creative work is still outstanding, and that’s what’s important in our industry,” said Tim Smith, owner of the Detroit-based ad firm Skidmore Studios. “They’re consistently putting out good creative. It’s just a bad string of luck that has nothing to do with their abilities or creative reputation.” Campbell Ewald generated $113.5 million in 2014 U.S. revenue, ranking it 94th among all advertising agencies by that metric, according to Advertising Age, a sibling publication of Crain’s Detroit Business. Other major clients include the

Detroit Lions, OnStar, Atkins Nutrition als Inc. , Kaiser Permanente , LifeLock Inc. , S n u g g l e , E d w a r d J o n e s , U n i l e v e r and USAA.

It was Campbell Ewald’s decade of wellness marketing for the $53 billion Kaiser Permanente health system in California that Henry Ford wants the agency to do locally, said Liz Schnell, the health system’s vice president of brand strategy. “It has been catching our eye for years,” she said. “Our goal is to harness that same creative strategy.” Henry Ford wanted Campbell Ewald to bid on a marketing request for proposals two years ago, but it could not because it was doing work for a rival, Schnell said. Campbell Ewald replaces the Milwaukee-based ad agency BVK , which the hospital system hired to research and define Henry Ford’s brand look and feel, Schnell said. That research will be used in Campbell Ewald’s efforts, she said. BVK didn’t launch new work for Henry Ford but maintained the marketing in use, Schnell said. Until December, Henry Ford had used Rochester-based DBA World wide to handle a campaign for its West Bloomfield Township operations and other projects. DBA also created the “Game On Cancer” campaign in 2013 for Henry Ford and the Lions as part of the health system and football team’s three-year effort to raise $15 million for the Josephine Ford Cancer Institute. Henry Ford said the media LizSchnell: buying for its Campbell Ewald new ad camwork “has been paigns will concatching our eye for tinue to be hanyears.” dled by Clinton Township-based Harrison Media. Health care marketing is a competitive space in metro Detroit. Henry Ford’s $4.1 million in spending last year was second in the market only to the Detroit Med ical Center’s $5.4 million. “People have choices, to some degree depending on their insurance provider,” Palmer said. “In those areas where people can choose where they go, that’s where the battleground is.” While he cannot talk about the upcoming Henry Ford work, Palmer did say it won’t be like what he said is the unmemorable marketing often seen now in health care. “Most spots just go by you, a bunch of doctors smiling, and it’s over,” he said. Palmer said that the agency and health system have been in talks since Campbell Ewald moved downtown last year and that health care is a targeted growth area. “It’s been a focus for us, and we seem to perform extremely well in that area,” he said, citing the agency’s decade of award-winning work for Kaiser Permanente. “We know how to talk to people about their health,” Palmer said.

“They’re consistently putting out good creative. It’s just a bad string of luck that has nothing to do with their abilities.” Tim Smith,Skidmore Studios

He did say the initial project Henry Ford hired Campbell Ewald to handle is a soon-to-debut “medical resource for Detroit professionals on the go.” The project led to the full agencyof-record relationship, Palmer said, and that compliments what he said is the ad firm’s goal of working with more local companies. “It’s in keeping with our mission

of serving the Detroit city and Detroit area with smart marketing,” Palmer said. Advertising industry observers say getting into health care marketing is a smart move for ad agencies. “It is a very competitive business and a growing business,” said Ross Lerner, owner of Beverly Hillsbased Lerner Advertising Inc. “With the aging of the population, you see so many things health-oriented. ” The numbers reinforce Lerner’s point: Henry Ford reported $27.8 million in net income last year on $4.71 billion in revenue. In 2013, the system suffered a $12 million loss. The nonprofit hospital system, which traces its origins to 1915, said its market share in Southeast Michigan is about 18 percent. It is staffed collectively by about 23,000 employees, making it the fifth-largest employer in metro Detroit. The system’s flagship is Henry Ford Hospital in Detroit, and it also has four other hospitals, 30 general medical centers and seven specialized medical facilities in the region. 䡲 Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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6/26/2015

6:15 PM

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CRAIN’S DETROIT BUSINESS // June 29, 2015

RULING, from Page 3: Next step for employers: Figuring out impact of same-sex decision cause this is still a very big decision for all couples to make in their lives, whether heterosexual or gay. And it takes time to plan a wedding.” Like more than 10 percent of all Michigan employers who participated in a recent survey by the Livonia-based American Society of Employers , Henry Ford Health has offered domestic partner benefits to unmarried partners of its employees for same-sex couples only. But domestic partner benefits also count as “imputed income” for employees at tax time and carry a financial penalty that married couples do not suffer. The Supreme Court certainly had a mind toward the various legal benefits of marriage, including insurance, in Justice Anthony Kennedy’s decision for the majority. “While the states are in general free to vary the benefits they confer on all married couples, they have throughout our history made marriage the basis for an expanding list of governmental rights, benefits and responsibilities,” Friday’s ruling states. “These aspects of marital status include: taxation; inheritance and property rights; rules of intestate succession; spousal privilege in the law of evidence; hospital access; medical decision making authority; adoption rights; the rights and benefits of survivors; birth and death certificates; professional ethics rules; campaign finance restric-

BLOOMBERG

Attorney Dana Nussel (left) holds up a copy of the U.S.Supreme Court same-sex ruling with Jayne Rowse (center) and April DeBoer, plaintiffs in the Michigan case Obergefell v. Hodges et al., during a news conference Friday in Ann Arbor. tions; workers’ compensation benefits; health insurance; and child custody, support, and visitation rules.” The high court, in a 5-4 ruling, found that all 50 states must license same-sex marriages, even though 37 states already had begun to do so since the court last visited the issue

two years ago, and that all states must recognize same-sex unions legally performed elsewhere. Michigan had issued licenses to 323 couples in one day last year, after Judge Bernard Friedman of U.S. District Court had found that Michigan’s voter-approved ban on

same-sex marriage violates the U.S. Constitution, until the 6th U.S. Cir cuit Court of Appeals imposed a stay on that decision and later upheld the ban. The ruling Friday in Obergefell v. Hodges et al. reverses that decision for Michigan and three other states.

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U.S. District Judge Mark Goldsmith ruled in January that the previous unions are valid, but the Supreme Court case was expected to decide whether others could be performed here. Julian Davis Mortenson, a professor of constitutional law at the Uni versity of Michigan Law School and part of the legal team for the samesex couples in the Goldsmith case, also said domestic partner plans would diminish in importance after the ruling but doubted they would be completely obsolete. “Certainly in the private sector, you would expect there would be less reason to offer those plans, and anxiety that employers might have over that just might outweigh the strong commitment to justice or equity that caused them to adopt the plans in the first place,” Mortenson said. “You could imagine some of the employers would have less reason, but not no reason, to continue offering them.” Mortenson also said the marriage recognition issue was resolved for the 300-plus couples who obtained licenses in Michigan in 2014 because the state did not appeal the January ruling. But the Obergefell case still might have ramifications in other states that were in litigation over the recognition, particularly if the court had ruled a different way. “The states in some cases could have, and a few were expected to, find that the state did not have to offer recognition under a different ruling,” he said. “But that possibility has completely slipped off the table. This case has totally mooted all of those questions.” Terry Bonnette, an attorney at the Detroit-based Nemeth Law Firm PC, said the decision could mean some extensive review of paperwork for employers, some of whom still might have benefit plan underwritTerry Bonnette: ing documents Paperwork may that define marneed reviewing. riage as a union between a man and woman for coverage purposes. “It’s highly regulated when and how you can make changes to those plan documents, and the specific procedures you have to follow,” he said. Helen Stojic, director of corporate communications for Blue Cross Blue Shield of Michigan, said it’s possible that employer inquiries about its spousal coverage options will increase soon in light of the ruling. A majority of Blue Cross’ more than 3.4 million insured Michigan residents are covered under group plans that employers purchase, she said. Gov. Rick Snyder and Michigan Attorney General Bill Schuette on Friday said the state intends to follow the law and respect the Supreme Court’s decision. 䡲 Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

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HEMINGWAY from Page 1: Keeping a writer’s work from fading away new Finca Vigía (which means “Lookout Farm” in Spanish) project. They are responsible for coordinating logistics for getting materials for a new 2,500-square-foot building on the property to house Hemingway’s artifacts in a climate-controlled environment, which would spare them from the harsh Caribbean elements. It won’t be easy, though. If the project was being built in America, it could easily be completed in six months — an in-and-out job. But this is Cuba, which for more than 50 years has been under a trade embargo that only recently has been relaxed under the Obama administration. “If I need a bag of cement, electrical wire or flat washers here, I’ve got Home Depot or Walmart ,” Staley said. “Those aren’t on the island. The raw cement for making mortar is all from China. An air conditioning unit Ronald Staley: is from China. Cuba presents That’s their logislogistical challenge. tical problem for getting the building done — and they don’t know when it will show up or what government project it will go to.”

Irreplaceable documents There were times in the past 11

years when Mary-Jo Adams thought the project to build the “taller” — pronounced “tai-ER” and translated as “workshop” in Spanish — would never become a reality. The executive director of the Boston-based nonprofit Finca Vigía Foundation since 2004 has traveled several times to Cuba to visit Finca Vigía and discuss the project and its necessity with Cuban officials. “These are irreplaceable documents, some of them coming from the 1910s and 1920s that Hemingway brought with him to Cuba because he thought they were important,” she said. “But the inks were faded. They were being stored in the basement of the guesthouse, which was filled with termites. I think it was in danger of imminent collapse and that would have crushed the collection.”

Financing not finalized In large part because labor costs are so difficult to predict — Cuba has two currencies, the Cuban peso, or CUP, and the Cuban convertible peso, the CUC, which is worth 25 as much as the CUP — a final project price tag has not yet been finalized. But this much is known: about $862,000 will be spent divided about evenly on the actual construction materials, as well as things like materials shipping and warehousing. Approvals have been secured from the Cuban government as well as the U.S. departments of State,

Treasury and Commerce, Adams said. If everything goes well, she said, the first large shipment of construction materials could land on the island in the fall. Although financing has not been finalized, it’s expected to come from a mix of private companies and foundations, Adams said.

Sense of historic value The Christman Co., and in particular Staley, was selected for the project because of previous work at President Lincoln’s Cottage national monument in Washington, D.C., said William Dupont, San Antonio Conservation Society endowed professor in architecture at the University of Texas at San Antonio who is working on the Finca Vigia project. He and Staley worked together on a $15 million restoration by the Na tional Trust for Historic Preservation , with the cottage opening for the first time to the public in 2008. “I recognized Ron as one of the pre-eminent construction managers for historic preservation work,” Dupont said. “One of his strengths is protection of the existing historic fabric and being very good at planning out a project so that things go smoothly. He has a particularly keen sense for the historic value of what we’re dealing with and a great passion for making sure that the finished product we are aiming for retains that value.” Christman, founded in 1894 (five

years before Hemingway was born), has 20 employees in metro Detroit and 274 companywide. It had $601 million in revenue in 2014. Finca Vigia, owned by the Cuban government and managed by its National Cultural Heritage Council , has cultural and literary significance. Consisting of Hemingway’s main house and several smaller ancillary buildings, it is where he wrote his Pulitzer Prize-winning “The Old Man and the Sea” as well as a significant portion of “For Whom the Bell Tolls.” It was also in and around Finca Vigía that he spent much of his time hunting, fishing and playing baseball with the young children of San Francisco de Paula. He paid $12,500 for the property in 1940. President Barack Obama has been loosening the Cuban embargo, including authorizing in January that building materials for certain types of projects could be shipped to the island for the first time since Fidel Castro’s revolution in 1959. The U.S. severed relations with Cuba in 1961, the year after Hemingway left Cuba. His legacy on the island remains. “It’s like going into Memphis with Elvis,” Staley said. “The bars he went to, there are cast bronze statues in the bars. The places he hung out, went fishing – they are all important. He is Cuba, in a lot of ways.” 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

PONTCHARTRAIN,from Page 1: Tower would add rooms, competition Detroit Hotel LLC, a Mexican and European investors group led by Mexican investor Gabriel Ruiz Huerta — has been discussing a second tower for about the past six months, O’Callaghan said. Although the idea isn’t new — it was part of the hotel’s original plan when it opened in 1965 and has been talked about from time to time over the years — “this is a recent plan,” O’Callaghan said. “This current group of owners recognizes there’s some good potential.” “And from what I’ve seen, (the) second tower is even bigger than the current one.” Calls to the hotel’s general manager were not returned late last week. The hotel reopened in July 2013

after a $5 million renovation. The 25-story hotel has 367 guest rooms, including more than 60 suites, as well as an indoor Michael pool, business O’Callaghan: center, ballroom Pontch’s original and 10,000 plan had second square feet of tower. meeting space. Its location directly across Washington Boulevard from Cobo Center makes it an ideal location, O’Callaghan said. He thinks the demand for an additional 400-450 rooms at the hotel is already there, given interest from

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: 220 Merrill .......................................................... 9 All Seasons of Birmingham ............................ 9 Aragona Properties .......................................... 11 The Balmoral ...................................................... 9 Blue Cross Blue Shield of Michigan .............. 20 Campbell Ewald .................................................. 1 The Christman Co............................................... 1 CMP Real Estate Group .................................... 9 Crowne Plaza Pontchartrain Detroit .............. 1 DBA Worldwide ................................................ 19 Detroit Institute of Arts .................................. 5 Detroit Marriott at the Renaissance Center .. 21 Detroit Metro Convention & Visitors Bureau .... 1 Detroit Pistons .................................................. 4 Emagine Entertainment .................................. 3 The Forefront .................................................... 9 Hampton Plaza ................................................ 10 Henry Ford Health System .......................... 1, 3 Hospitality Advisors Consulting Group ........ 21

Hotel Investment Services .............................. 1 Lerner Advertising .......................................... 19 M1 Concourse .................................................. 12 Mich. Dept. of Licensing/Regulatory Affairs ...... 17 Mich.Dept.ofTalent/Economic Development .. 17 MJR Theatres .................................................... 3 Nemeth Law Firm .......................................... 20 Palace Sports & Entertainment .................... 4 The Palladium .................................................... 9 Pontchartrain Detroit Hotel ............................ 1 Pulte Group ...................................................... 11 Robert B. Atkins & Associates ...................... 10 Rochester & Auburn Shoppe’s ...................... 9 Skidmore Studios ............................................ 19 Stokes Bieri Real Estate ................................ 10 University of Michigan .................................. 20 Venture Michigan Fund .................................. 17 West Construction Services .......................... 12

groups in bringing larger conventions to Detroit and the demand for rooms from companies moving downtown. And another large hotel will give the city more leverage to attract more large events. Hotel occupancy downtown has been rising. O’Callaghan said average occupancy in 2014 was 62.5 percent, up from 58.7 percent in 2013. The 2014 metro area average was 65.1 percent, up from 62.6 percent the year before, according to Hendersonville, Tenn.-based STR Inc. Metro Detroit’s average daily room rates also rose, increasing 5.8 percent to $89.06 in 2014. The region hosted 14 multiple hotel meetings last year, up from six in 2013, the convention bureau said. With more rooms, the Pontch could continue to serve regular customers who at any given time occupy 150-200 rooms and people coming for conferences or meetings, Wilson said. Large hotels “have to do a delicate dance between how much group business they take, which is sporadic, versus the consistency of the individual business traveler who is there all the time,” he said. When compared with the costs of constructing a new hotel, erecting a second tower would be an economical way to bring another convention center hotel to downtown, hospitality experts said. Many of the fixed costs — the

lobby, laundry, administration, kitchen, food and beverage outlets and parking — are in place, Wilson said. A second tower would add the most profitable part of the hotel: sleeping rooms. To rebuild the Pontch today, he estimates, would cost about $180,000 per room. Wilson said. That cost drops to roughly $90,000 for an additional tower. That would put the estimated project cost at $30 million to $35 million. “If someone wanted to build an 800-room hotel downtown, I don’t think they could pull the financing together; it would be a difficult deal to do,” said Chuck Skelton, president of Ann Arbor-based Hospitality Advisors Consulting Group Inc.

“This way they’re just putting up rooms to an existing property but end up with the same kind of product. I think that’s a great resolution.” Having a second tower at the Pontch would help attract the largest conferences and events, said Judy Booth, the Marriott’s sales and marketing director. “However, all of us downtown will be competing for the one-hotel pieces of business in a market that still hasn’t reached the national demand levels,” she said. “It’s good news from a citywide perspective and bad news that there will be another larger competitor downtown.” 䡲 Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

CRAIN’S DETROIT BUSINESS www.crainsdetroit.com Editor-in-Chief Keith E. Crain Group Publisher and Editor 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) 4461621 or nhanus@crain.com Managing Editor/Custom and Special Projects Daniel Duggan, (313) 446-0414 or dduggan@crain.com Assistant Managing Editor Kristin Bull, (313) 446-1608 or kbull@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 Research and Data Editor Sonya Hill,(313) 446-0402 orshill@crain.com Web Producer Norman Witte III, (313) 446-6059 or 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

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CRAIN’S DETROIT BUSINESS // June 29, 2015

WEEK ON THE WEB/JUNE 22-25

RUMBLINGS

Ferndale IT firm Detroit Digits to open office in Detroit $80 M

Travel Michigan’s newest chief hopes post will last

FULL VERSIONS OF THESE AND OTHER STORIES @ CRAINSDETROIT.COM

A numbers-focused look at the week’s headlines:

reative Breakthroughs Inc., the Ferndale-based

information technology advisory and network security services company, will move to nearly 10,000 square feet of office space in downtown Detroit in early fall. The firm is taking the second, third and fourth floors in the 15,000-square-foot building at 1260 Library St.

ON THE MOVE HealthPlus of Michigan named Michael Genord, M.D., president and CEO of the Flint-based nonprofit health insurer, effective Sept. 1. Genord, who had been chief medical officer, will succeed Nancy Jenkins, a longtime company executive who has been CEO since last fall and is retiring at year’s end. Bankole Thompson resigned after nine years as senior editor of The Michigan Chronicle, the Detroit-based weekly newspaper aimed at an AfricanAmerican audience. In a resignation letter provided to Bankole Crain’s, Thomp- Thompson: son said his last Resigned from The Michigan Chronicle. day would be July 8. James Birge, most recently president of Franklin Pierce University in New Hampshire, was named interim president of Marygrove College in Detroit. Birge replaces David Fike, who resigned to become president of Golden Gate University in San Francisco. Leonard Israel was selected president of mortgage operations for Flagstar Bank, Troy-based Flagstar Bancorp Inc. announced. Israel most recently was a director of Sabal Financial Group LP of Newport Beach, Calif. The Birmingham-based advisory firm Angle Advisors-Investment Banking LLC hired Tom Gordy as managing director. Gordy most recently was senior managing director at Variant Capital Advisors LLC, a subsidiary of the Birmingham-based advisory firm Conway Mackenzie Inc. John Hertel, who spent the past 30-plus years as a Huron-Clinton Metropolitan Authority com-

missioner, was appointed chairman of the authority’s board of commissioners. He will continue to serve as general manager of the Suburban Mobility Authority for Re gional Transportation. Rob Casalou, CEO of St. Joseph Mercy Health System in Ann

Arbor, was installed as chairman

The high-end of the investment planned by a joint venture that acquired the Fisher Building and Albert Kahn Building in Detroit’s New Center for $12.2 million on Wednesday. The joint venture is between New York-based HFZ Capital Group and Southfieldbased Redico LLC.

5,000 The amount of new neon, in feet, to be installed in the Fox Theatre marquee as part of a renovation project. The signage will also receive more than 1,000 new LED lighting components.

10 The number of years the new $12 million independent minor-league baseball stadium in Utica will be called Jimmy John’s Field, under a naming-rights contract. The stadium is being funded by Andy Appleby, founder of Rochesterbased General Sports & Entertainment LLC.

of the board of trustees of the Okemos-based Michigan Health & Hospital Association. Bob Riney, president

and COO of Henry Ford Health System in Rob Casalou:

Detroit, was Named association named chairchairman. elect of the 25member board.

COMPANY NEWS General Motors Co. is investing $245 million in its Orion Township assembly plant and adding 300 jobs for an “all-new vehicle program,” Automotive News reported. The Detroit Pistons were one of 13 National Basketball Association clubs to announce corporate sponsorship deals with the New York City-based daily fantasy gambling giant FanDuel Inc. Ford Motor Co. and the Southeast Michigan Ford Dealers extended their title sponsorship of the Labor Day weekend Arts, Beats & Eats festival in Royal Oak through 2018. Detroit-based Huron Capital Partners LLC said it acquired Chelmsford, Mass.-based GxP Au tomation LLC — which designs, installs and maintains building automation systems — for one of its platform companies, Edison, N.J.-based Albireo Energy LLC. Terms of the deal were not disclosed.

Oxford Cos. closed on the purchase of 22 buildings spread over three office parks previously owned by fellow Ann Arbor real estate firm McMullen Realty Co. Inc., making Oxford owner-manager of about 15 percent of the office market in the city and dissolving McMullen after more than four decades in business. Grace Centers of Hope began a $2.2 million renovation to convert its former Grace Gospel Fellowship church in Pontiac into a transitional shelter for homeless women and children. The project is slated to finish by January. Fitness studio Orangetheory Fitness and SVS Vision Optical Centers signed leases to become tenants at Northville Park Place, bringing the number of committed tenants to 13 ahead of an Aug. 29 grand opening. The Miami-based John S. and James L. Knight Foundation

committed $1.5 million to Motor City Match, Detroit’s new smallbusiness attraction and development program. Motor City Match aims to fill vacant commercial spaces in Detroit’s neighborhoods by matching entrepreneurs with available properties. German auto supplier ZF Friedrichshafen AG plans to spend more than $71 million and add 571 jobs by expanding its Northville Township technical center. The Michigan Strategic Fund approved a $4 million performance grant for ZF subsidiary ZF North America Inc.

Detroit-based DTE Energy Co. issued a request for proposals for multiple solar-generating plants in Southeast Michigan that would range in size from 5 to 50 megawatts.

OTHER NEWS Madonna University’s “Leading the Way” fundraising campaign has raised $56 million, 10 percent above its $50 million goal, the Livonia school announced. Matt Prentice, longtime area restaurateur and former Trowbridge Restaurants Inc.

CEO, remains under a noncompete agreement and a $2 million law- Matt Prentice: No suit judgment appeal planned. from his former employer, the Michigan Court of Appeals ruled. Prentice told Crain’s he does not plan an appeal. The Detroit Institute of Arts conservation staff, along with Novibased Precision Installation and Services and Detroit-based Venus Bronze Works Inc., completed minor structural work and surface cleaning of “The Fist” sculpture at Jefferson and Woodward avenues. The structure, formally known as the “Monument to Joe Louis,” is a part of the DIA collection.

ith Dave Lorenz’s appointment as acting vice president of Travel Michigan, the state’s tourism arm is on its third leader in the past year. As Travel Michigan’s No. 2 administrator, Lorenz has served before as the agency’s acting director. This time, he said, he hopes to drop “interim” from his Dave Lorenz: Taking a long-term title. “I am certainly view. hopeful that that will be made permanent, but I’m not the one who will make that decision,” he told Crain’s from London, where he has been pitching the state on a sales mission this week. “My performance will help to decide that.” Lorenz said he got the call that he was replacing David West while overseas. West resigned Wednesday. The Michigan Economic Development Corp., which manages Travel Michigan, would not discuss the reason for his sudden departure. West started in December. He came to Travel Michigan from the Pocono Mountains Visitors Bureau, Pa., where he was marketing vice president, to succeed longtime director George Zimmermann. Lorenz’s “experience and knowledge of the state’s tourism industry and the Pure Michigan campaign ensures the work Travel Michigan is doing can move forward with no real transition needed,” spokeswoman Michelle Grinnell said. Lorenz joined Travel Michigan in 2002. He says his main priorities will be to revamp the Michigan.org website and lead strategic planning with his staff and major stakeholders in the tourism industry.

Probation ahead for Wayne State medical school? Would more pingpong tables have saved Wayne State University’s School of Medicine from possible accreditation probation? No, but having only one was a student complaint during a review by the Liaison Committee for Medical Education, the accrediting body for 134 American medical schools. The medical school has been notified that it faces possible accreditation probation for a dozen violations, including a lack of student diversity and lack of independent and active teaching in the curriculum. Other areas of noncompliance include inadequate numbers of lockers and lack of space in the cafeteria, lounge and auditorium areas — hence the pingpong beef. WSU President M. Roy Wilson said

graduation rates, licensing tests and residency placement rates have been “extraordinary and above national averages,” but “we didn’t respond well to Proposition 2.” Prop 2, approved by Michigan voters in 2006, banned affirmative action programs based on gender or racial preference. WSU did not compensate by stepping up recruiting and taking other measures, Wilson said. Since the inspection visit three months ago, newly appointed medical school dean Jack Sobel said, the university has taken steps to rectify the violations and is hiring staff to boost diversity recruitment and beef Jack Sobel: Fixes up teaching methods. Wilson are on the way. estimated those measures will cost roughly $550,000. In the meantime, WSU has appealed the decision and awaits a reconsideration hearing in October. It won’t officially be on probation until that is complete. Even if probation is in the offing — which Wilson says is likely — WSU will have company. From 2005 to 2014, the Liaison Committee placed on probation nearly a third of the 159 schools it reviewed.

TechTown Detroit seeks campers for biz launch TechTown Detroit is accepting applications for its fall 2015 Retail Boot Camp. The eight-week camp prepares business entrepreneurs for the launch of a brick-and-mortar business in a core Detroit commercial district. Applicants must have retail experience, funding sources and a strong proposition that offers an exciting or niche product. Concepts covered through the boot camp include choosing the right location, marketing and branding and taxes and insurance. The camp runs Sept. 14 to Nov. 3 and will comprise Web and in-person sessions covering Detroit-specific topics and a toolkit of services to help launch the businesses. Up to five graduates will be selected by partner organizations to open brick-and-mortar or pop-up storefronts in the city. Applications will be accepted at techtowndetroit.org until July 31. The program fee is $499. One-hour information sessions for those interested: June 29: 8:30 a.m., TechTown Detroit, 440 Burroughs St. June 30: 6 p.m., Always Brewing Detroit, 10180 Grand River Ave. July 1: 11 a.m., Coffee and (___), 14409 Jefferson Ave.

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