Crain's Detroit Business, July 6, 2015 issue by Crain's Detroit Business

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CRAIN’S Readers first for 30 Years

An accommodating time for hotel construction in Oakland County, PAGE 3

Public notices: Newspapers fight to keep tiny type, PAGE 3

DETROIT BUSINESS JULY 6-12, 2015

Somerset Park sale may bring upgrades By Kirk Pinho kpinho@crain.com

he $200 million-plus price tag is just the beginning for the New Jersey real estate company that just bought the largest apartment complex in Michigan. What is expected to come next is tens of millions of dollars in improvements to at least some of the

But they weren’t kept up to the very high-end standards that would be expected near the shopping mecca of Somerset Collection at West Big Beaver Road and Coolidge Highway, experts said. “You’re going to have to turn that into a more attractive, upscale project,” said Samuel Beznos, CEO of Farmington Hills-based Beztak Cos., which owns and manages an-

Washington, D.C.-based real estate service CoStar Group Inc. The Solomon Organization LLC

NEWSPAPER

knows that renovations are needed, with its managing director saying his Summit, N.J.-based company plans to spend “a lot of money” on improvements to the units themselves as well as things like exterior and common area upgrades. “We intend to be here for a long period of time. We want to improve the product physically, which we intend to do quickly,” said Zach Solomon, who last week declined to specify the company’s renovations budget. Somerset Park was once considered a true luxury complex when it first developed nearly 50 years ago. But over the years — including a time in the mid-1980s when it was informally known as “Sin City” due to the high number of young single professionals living there — the property’s prestige has lessened. Renovations could help turn that around. Somerset Park Beznos, whose comApartments pany has spent in excess ■ Total investment: $200 million of $5 million in the last few years upgrading ■ Number of units: 2,226 Muirwood, said im■ Upgrades: Expected to cost provement costs to the apartments alone at “tens of millions” Somerset Park could 2,226 units in the Somerset Park other of the area’s larger apartment reach $10,000 to $15,000 per unit if Apartments tucked just south of the complexes, the 1,400-unit Muir - things like HVAC systems need reSomerset Collection in Troy. That’s wood Apartments in Farmington placement. following what is believed to be the Hills. So if, for example, one-third of largest single-complex multifamily “The location would warrant a the units receive maximum upsale in the state in at least 15 years. more high-end product.” grades, that would put renovation The seller, the Frankel family of A typical unit renovation would costs between $7.4 million to $11.2 local real estate fame, and property increase rents between 5 and 10 million; if all the units receive manager, Troy-based Nyman Man - percent, Beznos said. At Somerset those upgrades, it could be $22.2 agement Co., did a good job main- Park, most rents range between million to $33.4 million. And that’s taining the units, spread out across $821 per month for a one-bed- not including the cost of improve217 acres and 156 buildings, multi- room unit to $1,545 per month for ments to things like common family real estate experts said. a three-bedroom, according to areas, grounds, club houses, tennis courts, the golf course, and any of the other features at Somerset © Entire contents copyright 2015 by Crain Communications Inc. All rights reserved. Park. crainsdetroit.com Vol. 31 No 27 $2 a copy. $59 a year. Andrew Hayman, president of Southfield-based Hayman Co., said it’s most likely that only some of the units would receive significant renovations to keep some apartments affordable to a broader group of renters. He said renovaSEE SOMERSET, PAGE 18

Plan for TriMas spinoff: Eye small acquisitions would be carve-outs from larger companies looking to generate thenderson@crain.com cash. Even in its first few hours as a He expects the company to public company last week, the close its first acquisition “in the new Horizon Global Corp . spinoff next quarter or so.” from Bloomfield Hills-based Tri “The first bite of the apple could Mas Corp. was already chasing sev- be a deal as small as $50 million. eral acquisitions. Deals at the opposite end Mark Zeffiro, president, could be triple that,” ZefCEO and co-chairman of firo said. “What I like the newly spun-off Horiabout the opportunity is zon (NYSE: HZN), said the these are fragmented and new company could hold regional markets where a secondary offering as we have the opportunity early as the third quarter to deploy capital very effifor acquisition capital. ciently.” Zeffiro, who was in New Sam Valenti: “This Wednesday’s IPO didn’t York last week to open the is basically going to raise any capital for HoriNew York Stock Exchange be a private-equity zon. The stock was disand see Horizon open for company that tributed to current TriMas trading, said the company trades as a public shareholders at the rate of is looking for small manu- company.” two shares of Horizon facturers in various indusstock for every five shares tries both here and abroad — but of TriMas stock they held — 18 has an expansion focus on China million total. and South America. And, he said, it Company holdings is considering joint ventures with Horizon Global officially shares other companies. “This is basically going to be a headquarters space with TriMas in private-equity firm that trades as a the Bloomfield Hills office of Valenpublic company,” said Sam Valenti ti Capital LLC , a wealth-manageIII, the executive chairman at Tri- ment firm, although 300 employMas and co-chair with Zeffiro at ees work in Plymouth Township at what is the operational headquarHorizon. “You want to add dry powder to ters for the company. Horizon Global has two busithe balance sheet,” he said of a secondary offering. “It gives you ness units, Cequent Americas and the flexibility to do big acquisi- Cequent Asia Pacific, Europe and tions. For now, we can fund acqui- Africa. The two dominate the towing, trailer and cargo management sitions through cash flow.” Zeffiro said current deals being industries, operating under such looked at include several small SEE TRIMAS, PAGE 17 family businesses and several that By Tom Henderson and Chad Halcom

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MICHIGAN

BRIEFS All things considered,Mich.is the best state,website says The website Thrillist , not content with ranking states based on food and beer, came out with a ranking based on, well, everything. And the winner: Michigan? Thrillist criteria were the states’ “contributions to America, so think inventions, food/drink, somewhat productive famous people, unique physical beauty, etcetera.” Contending that “far too much of the Michigan narrative centers on Detroit and its many issues,” the site goes on the extol the Great Lakes State’s extensive coastline, an “embarrassment of beer riches” and the remoteness of the Upper Peninsula, which “almost feels like a secret 51st state where they inexplicably love British meat pies.” It probably goes without saying that the compilation of this list did not involve any driving.

Report: Killing prevailing wage won’t help construction biz A report titled “The Cost of Repealing Michigan’s Prevailing Wage

Policy: Impacts on Total Construction Costs and Economic Activity” says repealing the policy would hurt the state, MiBiz reported. The report, written by policy analysts and economists from around the nation, questions the assertion that repealing a law mandating unionlevel wages on publicly funded construction projects would result in better economic conditions. The report claims that for construction projects for which the prevailing wage applies, the cost of labor and benefits account for only 20 percent of the total. It also claims that repeal would cost the state 11,320 jobs and $1.7 billion in overall economic activity. Construction industry executives and many of the state’s Republican leaders disagree, MiBiz reported.

Tim Allen’s fondness for state is also …Pure Michigan Tim Allen sounds as if he likes Michigan in those commercials, but what does he really think? Forbes.com caught up with the actor, comedian, former voice of Chevrolet ads and, most notably,

iconic voice of Buzz Lightyear in the three “Toy Story” movies. And so the man who grew up in Birmingham waxed Pure Michigan. 䡲 “Anyone is ridiculous not to try Michigan. … If you get there between the Fourth of July and late August, in a stretch where it’s 90 degrees, and you’re standing on a white sand beach and looking at a sunny day — you’d be hard-pressed to tell me where you were if you didn’t know.” 䡲 “Once people get to know Michigan, it’s a gold mine. Especially for people driving in from the rest of the Midwest, there’s a lot of bang for the buck there.” 䡲 “This isn’t like Red China; you can’t kick people out of their homes (in Detroit). But if millennials could take that city back, that could be real Pure Michigan. You could give them opportunities to homestead there.”

MICH-CELLANEOUS 䡲 A report published by Environ mental Entrepreneurs ranks Michigan fifth in the U.S. for growth in clean-energy and clean-transportation jobs in the first quarter. Michigan companies created 616 jobs from single projects in Midland, Huron and Sanilac counties, according to the study. 䡲 A Michigan historical marker now stands at the original site of the Grand Rapids store where Frederik Meijer and his father, Hendrik, began the Meijer Inc. retail grocery chain, The Grand Rapids Press reported. The store opened as a 17,000-square-

foot grocery in 1958 and became the chain’s first superstore in 1962 with the addition of 75,000 square feet of space for nongrocery items. It was renamed Meijer Thrifty Acres and allowed customers to do one-stop shopping and writers to use the phrase “one-stop shop” far too often. 䡲 Meijer also said its annual commitment to locally grown produce has grown to nearly $100 million, the Grand Rapids Business Journal reported. 䡲 Government agencies plan to spend nearly $60 million over the next two years to try to prevent Asian carp from reaching the Great Lakes, where scientists say they could unravel food chains and harm native fish, The Associated Press reported. The strategy involves strengthening defenses near the lakes while stepping up efforts to block the carps’ path farther downstream toward the Mississippi River. 䡲 Ramblewood Apartments in the Grand Rapids suburb of Wyoming, the state’s third-largest suburban apartment community, was sold for $100.4 million, MLive.com reported. The new owners are a Georgia-based investment group, which plans to upgrade the 1,710-unit community. 䡲 The U.S. Court of Appeals affirmed the ruling of a U.S. District Court judge in Grand Rapids that workers on a pickle farm in the northern Michigan community of Copemish were employees, not independent contractors. The U.S. Department of Labor accused farm owner

INSIDE THIS ISSUE BANKRUPTCIES . . . . . . . . . . . . . . . . . . 5 CALENDAR . . . . . . . . . . . . . . . . . . . . . . . 13 CAPITOL BRIEFINGS . . . . . . . . . . . . . . 7 CLASSIFIED ADS . . . . . . . . . . . . . . . . 15 DEALS & DETAILS . . . . . . . . . . . . . . . 14 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 6 OTHER VOICES . . . . . . . . . . . . . . . . . . . 6 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 14 RUMBLINGS . . . . . . . . . . . . . . . . . . . . . 19 WEEK ON THE WEB . . . . . . . . . . . . . . 19

COMPANY INDEX: SEE PAGE 17 Darryl Howes of violating laws during the cucumber harvest three years ago. The government says migrant workers got less than the minimum wage and were given poor housing. 䡲 A bill signed by Gov. Rick Snyder will allow Kent County to create a regional airport authority to run Gerald R. Ford International Airport outside Grand Rapids, The Associated Press reported. In a release, Snyder said the airport authority would help attract more talent and tourists to the area. 䡲 Two California residents donated more than 500 artworks and 7,000 art-related books, publications and catalogs to the new Kruizenga Art Museum at Hope College, The Holland Sentinel reported. The donations, worth more than $1.2 million, increased the collection by about 30 percent. The museum is scheduled to open Sept. 8. 䡲

Legacy William

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3 Legislation would move public notices – hearings, descriptions of property to be sold, election dates, all in tiny type – from print to the Web, and with it money that Michigan’s newspapers can illafford to relinquish

A Hampton Inn complex in West Bloomfield Township will have retail and a restaurant site with rooftop seating,courtyards and a garden area.

ISTOCK PHOTO

JARRATT ARCHITECTURE INC.

Oakland makes room for new hotels Low financing, high demand spur plans in county By Sherri Welch

An accommodating time for new hotels

swelch@crain.com

Construction of new Oakland County hotel projects continues in the midst of historically low financing rates for developers and strong demand. And they aren’t all limited-service projects. A project under construction in West Bloomfield Township’s community center district, for example, includes a Hampton Inn , a restaurant with rooftop seating, retail storefront space for multiple tenants, courtyards and a Ron Wilson: garden. The “Demand is strong.” garden includes a running stream and waterfall — and a spot for an extended-stay hotel to be added. A couple of miles away in Farmington Hills, a project comprising a trio of hotels will offer multiple options: limited-service and extended-stay, plus a full-service hotel bringing banquet space and a restaurant to the community. They’re two of at least four hotel projects underway or planned in western Oakland suburbs — featuring Hilton Worldwide-owned Hampton, Marriott International and Holiday Inn flags. The projects are expected to bring 370 rooms to the market,

Papers take notice of revenue threat By Lindsay VanHulle Crain’s Detroit Business/Bridge Magazine

LANSING — The next wave of digital transformation in the news business: Public notices? Unlikely. Printed in tiny type, the government notices can include upcoming public hearings, legal descriptions of property to be sold or redeveloped and election dates. They’re far from the most disruptive force challenging news organizations today, and they certainly don’t make for thrilling reading. But they do still represent a revenue stream — although no one seems to be able to say exactly how much of one — and Michigan’s

newspapers are battling to keep a lock on the business. House Bill 4183 would require that public notices be published solely online, changing the legally required practice of townships, villages, cities and counties paying to publish some notices in print newspapers serving their residents. Online-only publication now would allow TV and radio stations to compete for contracts. So far, there’s not a groundswell of support: A vote on the bill was postponed June 18, the last session day before the House left for sumSEE NOTICES, PAGE 16

Toymaker sees opportunity in licensed merchandise 1

A $4 million Marriott Towneplace Suites near 14 Mile and M-5 in Commerce Township will add 72 extended-stay rooms to the shortstay rooms at the Hampton Inn next door.

2 A Courtyard by Marriott is the first of three hotels planned near 12

Mile and Farmington roads in Farmington Hills. Also planned for the site: A four-story Homewood Suites by Hilton with 121 rooms and a six-story, full-service Holiday Inn Hotel & Suites with 140 rooms, a restaurant and banquet center.

3 The Hampton Inn complex under construction at Orchard Lake Road

and Northwestern Highway in West Bloomfield Township has 89 rooms, retail, a restaurant site with rooftop seating, courtyards and a garden area – including a waterfall.

4 A $4 million Holiday Inn Express and Suites on Northwestern Highway will bring an additional 107 rooms to Farmington Hills.

adding to the 416 rooms coming online in another Oakland community, Troy, this year or early next. “Times are good, demand is strong, (and) rates and occupancies are increasing due to new demand outpacing new supply,” said Ron Wilson, CEO of Troybased Hotel Investment Services Inc., a hotel owner, developer and

operator. During the Great Recession of 2009, financing dried up and occupancy rates fell. Many hotels were lost to foreclosure, Wilson said, and new developments were quickly shelved. The local economy improved faster than new hotels could be SEE HOTELS, PAGE 16

By Dustin Walsh dwalsh@crain.com

In the age of blockbuster films and cross-platform megafranchises, toy licensing is big business. Sales of licensed toys jumped 7 percent, twice as fast as the rest of the toy market, in the 12 months ending in April, according to the Port Washington, N.Y., research firm NPD Group . In 2014, Disney’s “Frozen” generated $500 million in toy sales alone. In the U.S., licensed toys represented 31 percent of the $18.1 billion industry and continue to grow, according to NPD. Can Walled Lake-based American Plastic Toys Inc. — which has relied on its U.S.-manufactured, lowpriced toys such as sand buckets and kitchen sets — thrive among the top-selling licensed toys like

MUST READS OF THE WEEK Driven to donate Vehicles for Change, run by Martin Schwartz (right), is the newest voice asking metro Detroiters to donate their unwanted vehicles to charity, competing with the likes of Mother Waddles, Charity Motors and Volunteers of America, PAGE 5

Lending a hand to IT Quicken Loans Inc. opened its new IT center last week in Corktown. Take a look inside, crainsdetroit.com/quickentech

Teenage Mutant Ninja Turtles, Minecraft and Jurassic World? That’s the bet. President and CEO John Gessert said the company is negotiating licensing agreements for a line of low-priced toys to improve revenue. American Plastic Toys’ revenue decreased in 2014 to $41.6 million from $50 million in 2013. “We recognize that (licensing is) a good point of differentiation for our customers,” Gessert said. “The products we’re considering will provide an opportunity for one of our retailers to provide a good entrylevel price point that’s maybe more appealing to their core customer.” American Plastic Toys, which sells toys to big-box stores such as Target Corp. and Wal-Mart Stores Inc. as well as online through Amazon.com SEE TOYS, PAGE 18

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LOOKING BACK Medical centers and auto insurance companies were talking sense - not dollars and cents - about Michigan’s seatbelt law, which took effect 30 years ago this week. More at crainsdetroit.com/30

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Vehicles for Change launches car donation service in Detroit lutions Inc. or Wayne Metropolitan Community Action Agency.

By Sherri Welch swelch@crain.com

If you’re looking for vehicle donations to support your mission, what better place than the Motor City? The region’s car-loving reputation, along with the large number of lowincome people in need of affordable transportation, has prompted another vehicle donation program to move into the market. Baltimore area-based Vehicles for Change Inc. has leased space at a former dealership and automotive repair site on Detroit’s northeast side and begun advertising here. Just weeks into the launch, it’s already received a handful of donations, President Martin Schwartz said last week. He believes its six-month/6,000mile warranty on the vehicles it repairs — and low-interest, 12-month financing and new automotive detailing and mechanics training — set Vehicles for Change apart from other car donation programs. Since its launch in 1999, Vehicles for Change has expanded across Maryland and into most of Virginia and Washington, D.C. Now, it’s set a goal to expand nationally wherever there’s a need to get affordable cars to low-income people, Schwartz said. “The opportunity to be in the backyard of the (vehicle) manufacturers and maybe get their attention to the point where they might be interested in working with us on a larger scale was a huge lure, as well,” he said.

Detroit connections A cousin of Jim Schwartz, the former Detroit Lions head coach, Martin Schwartz decided to expand to Detroit after his friend Luis Perez, who joined the team’s head office in 2011, encouraged it. “I had known Marty for 10 years in Baltimore...(and) knew he was looking to expand,” Perez said, adding that Schwartz had said for years that the greatest challenge to his operating model was the ability to get cars donated. “I just assumed, right or wrong ... if there was anywhere you could get cars donated, it would be in Detroit.” Like other vehicle donation programs, Vehicles for Change repairs

In Baltimore, Vehicles for Change has secured low-interest financing for its low-income customers through Hamilton Federal Bank and Sandy Spring Bank. In Michigan, it is still looking for a bank to provide those loans, Schwartz said. Though the loans are small, and Vehicle for Change guarantees 100 percent of them to eliminate risk for a bank, “the harder part is the reporting side,” Schwartz said. “We ask the banks to let us know how the payments are going,” to link them with support services to find a job or solve other issues that led to missed payments, he said. VEHICLES FOR CHANGE

Martin Schwartz,president of Vehicles forChange Inc.: Being in the backyard of the Detroit 3 was a plus. donated vehicles before selling them to low-income people referred by area nonprofits at below-market costs of, on average, $800-$900. It auctions off those vehicles that are too costly to repair or that have extensive body damage. Those that would be too costly for the owner to repair in the future, such as luxury vehicles, or that would command a higher retail price are sold through its Freedom Wheels public used car lot. The proceeds go back to support the mission. About 90 cents of every dollar taken in goes directly to fund its programs, Schwartz said.

Financials To give his program a running start in Detroit, Detroit Lions Charities made a $100,000 grant to fund about half of the initial costs for the local operation, Schwartz said. The nonprofit has leased 700 square feet in a 22,000-square-foot facility and lot space owned by Tamou’s Electrical Services Inc . on Gratiot Avenue, just north of Seven Mile Road. Teresa McFadden from its home office is leading the local site as director of operations. The Detroit affiliate will operate on a $650,000 budget the first year and plans to sell 80 cars to low-income individuals and families referred by one of three local charities: Matrix Human Services, Southwest So-

BANKRUPTCIES The following businesses filed for protection in U.S. Bankruptcy Court in Detroit June 26-July 2 . Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. EMG Associates LLC, 7244 Haggerty Road, Canton Township, voluntary Chapter 7. Assets: $0; liabilities: $123,264.43. P r e m i e r P r o p e r t y A d v i s o r s L L C , H.K. Grand Venture Capital LLC , 30800 Northwestern Highway, Suite 223,

Farmington Hills, voluntary Chapter 11. Assets and liabilities not available. Durant Mechanical & Electrical Con tractors LLC, 16814 Hamilton Ave.,

Highland Park, voluntary Chapter 11. Assets and liabilities not available. Jacqueline Phillips DPM Inc. , 5575 Conner St., Suite 203, Detroit, voluntary Chapter 7. Assets: $1,930; liabilities: $57,000. Natalie Broda

Other programs Until it can set up its own automotive repair operation, Vehicles for Change is working with Belle Tire Distributors Inc. to repair vehicles at reduced cost, Schwartz said. Within the next six to 12 months, he hopes to secure the balance of the new facility and raise the $600,000 needed to start the training. The program, which will largely be offered to ex-offenders, should be able to serve 35-45 people a year. Those entering the training program will also be referred by the three social service nonprofits, Schwartz said. Vehicles for Change joins a number of other car donation programs operating in Detroit, including Mother Waddles Car Donation Pro gram, Charity Motors Inc., Purple Heart and Volunteers of America Michigan.

Its arrival isn’t a positive, according to one of the other programs. “There’s a limited amount of donated cars (here),” said Alex Brodrick, president and CEO of Southfield-based Volunteers of America. A new car donation program in the market will only pull vehicles from existing programs, reducing the revenue they have for their charitable programs, he said. In operation in Michigan for 119 years, Volunteers has operated a vehicle donation program for over 30 years, producing revenue to support social services, housing and veterans services in Southeast Michigan and the greater Lansing area, Brodrick said. Last year, it took in just over 2,000 donated cars, which generated about $2.5 million — or 16 percent of its $15.6 million in total revenue — during fiscal 2015 ended June 30, he said. About 88-89 cents of every dollar generated goes to services. If Vehicles for Change is active in this market, “that will impact our car donations, which will impact our funding for social support,” Brodrick said. “If we were to lose 10-15 percent, that affects everything we do.” 䡲 Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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CRAIN’S DETROIT BUSINESS

OPINION Roads plan needs to retain tax credit W

hat anti-poverty tax policy do conservative Wisconsin Republican U.S. Rep. Paul Ryan and President Barack Obama agree on? Answer: Expanding the earned-income tax credit for that group of people often described as “the working poor.” Ryan has even proposed expanding the credit — which is based on income and number of children in the household — to childless workers. Like many conservatives, Ryan, the chair of the House Budget Committee, sees the credit as an incentive to work. The refunds on wages earned — as much as $5,000 — has actually lifted millions of working people above the official poverty level. So it’s puzzling to see some Michigan Republicans in the House voted to eliminate the state’s share of the credit to help finance the road package moving through Lansing. Senate Republicans last week approved a 15-cent boost in the state gas tax. That’s a good start toward fixing the roads with essentially a “user tax.” They did not include eliminating the EITC. So now House and Senate plans have to reconcile. Nearly 50,000 households in the Kent County/Grand Rapids area received the credit in 2013; in Oakland County, the number was more than 70,000 and in Wayne County, more than 200,000. In those three counties alone, the credits from state and federal taxes were more than $800 million – money likely spent within those counties on food, clothing and shelter. Even Business Leaders for Michigan — the group of the state’s most powerful CEOs — said it was “seriously concerned” about diverting $700 million from the general fund to roads, citing a “potential negative impact it could have on other critical priorities that are important to growing jobs and our economy.” There’s time to tweak this proposal.

Transfer of boomer knowledge is key Baby boomers are reaching retirement age at a rapid pace — roughly 10,000 a day are turning 65 — and although not all of them are leaving their jobs, employers still have strategic issues to face. As Bill Shea outlines in a special report beginning on Page 9, one of those issues is numbers, but the larger one is passing along what boomers know to the rest of the workforce. Some companies are using formal mentoring and job shadowing with success. Others are encouraging boomers to work longer. Whatever the strategies, employers need to prepare for this transition. 䡲

Urban foraging proves a fruitful pursuit he last Saturday of June was the worst summer

T weather I can remember. Not in the sense of

calamity. It wasn’t as bad as a tornado hitting or as bad as the floods of last August that wreaked havoc and disastrous flooding. But it was the worst in terms of what the day felt like, being in the midst of summer, yet rain pouring all day with howling winds that made 58 degrees feel like 38. At least the Noah-like downpour of last August was warm. It felt like summer. The next day was still cool, but the spinning, stalled front had finally circled east. And it was gorgeous — the sky cobalt, the air crystal-clear with low humidity. A perfect day for urban foraging. I did my first urban foraging nearly 30 years ago, acciKATHLEEN HENDERSON dentally, while on a 20-mile training run for the Free Press Marathon. I ran out of blood sugar, hit the wall Tom Henderson with three bowls of cherries harvested from and just had to come to an exhausted stop beneath a the east side of Detroit. shade tree in Grosse Pointe. I realized in a haze that the tree was loaded with berries that looked just like black- down. I’m not a cherry expert, but these aren’t tart cherberries but with purple tinge. ries and they aren’t sweet cherries but something right I was weak and starved and didn’t care if they were in the middle. They look like Rainier cherries, but I’m poisonous, I had to eat. They were delicious. I gobbled not 100 percent sure. Half yellow, half a weak red, they down a few handfuls, my spirits and energy came don’t look ripe, but they are perfectly ripe and delicious. zooming back up, and off I went off on my last five My wife and I took a small stepladder along (my miles. apologies if this violated any cemeAnd I’ve been an urban forager tery decorum) and in 15 minutes of ever since. The berry was a mulberpicking, we had enough to fill ourry, and its trees are all over Southselves, sate the dogs — who eat east Michigan, dropping fruit for six them pit and all — and fill three weeks in June and July. It is a mysTupperware containers. tery to me, that in an urban area Again, the lesson — as I explain with so many hungry people, why to co-workers regularly: SomeTOM HENDERSON times, if you’re hungry, all you need so much free food goes unpicked. Or why I seem to be the only per- thenderson@crain.com to do is look around you. son picking berries, cherries and ap- TWITTER: @TomHenderson2 Also at Elmwood: The service ples in Elmwood Cemetery. berries, on small trees just to the Until a week ago, when I saw two middle-aged south, were at their peak ripeness, too, tiny little purple women filling a sack with cherries at the big cherry tree berries of perfect sweetness. The mulberries were just at the east end of Elmwood, a tree whose limbs were past their prime, a bunch fermenting on the ground, bowed down, heavy with fruit. This was the first stop on the ones on the tree now just a little too sweet for my my foraging tour. taste but fine for a mixed berry pie. A quick history tour: More than a century ago, FredNext stop on the foraging tour? The Grosse Pointe erick Law Olmsted, the father of landscape architecture Academy on Lake Shore Road in Grosse Pointe Farms. — blame him for creating the concept of the American On a walk with the dogs a couple of days earlier, we’d lawn, perpetually in need of fertilizing, herbiciding and spotted a few gorgeous oyster mushrooms growing on mowing; and credit him for Golden Gate Park in Califor- the side of a maple tree. We’d picked them, fried them nia and Central Park in New York City — planted a long and had them in soup and as a side dish with beef ribs. row of fruit trees along the fence that separates Elm- Fantastic. Almost as good as morels. wood from Mount Elliott Cemetery to the east. With all the recent rain, it was time to check the tree Olmsted didn’t plant them for the fruit, he planted again, and the east side of the trunk was filled with them for their multicolored displays of flowers in the newly sprouted mushrooms. We picked a few pounds spring. But after the flowers comes the fruit. and left a bunch for any other forager happening by. There’s the big, really healthy cherry tree near the Nothing like fresh oyster mushrooms, quickly fried at fence. Last year, a killer frost in April or May killed the high heat in olive oil and butter, to make leftover pizza fruit. There were maybe six cherries on the whole tree, come to life. all of them way at the top, out of reach. Ah, life in the big city. This year? The tree is loaded, branches hanging When you visit, don’t forget to bring a basket. 䡲

As walkable urbanism grows, more investment needed cross the country, metro areas D.C., and Boston have been experiencing significant shifts toward walkable urbanism, particularly in this most recent real estate cycle, making these areas among the most walkable nationwide. Research released last month at Locus Developers’ Michigan Leadership Summit tells us that metro Detroit — and Michigan overall — are beginning to see a similar trend, though not as advanced. It would have been unthinkable 15 years ago that Detroit would be shifting toward walkable urban development, it having long followed the drivable suburban model. Not surprisingly, this drivable suburban

A like Washington, OTHER VOICES Christopher Coes and Chris Leinberger Christopher Coes is managing director of Locus: Responsible Real Estate Developers and Investors, a program of Smart Growth America. Chris Leinberger is the Charles Bendit Distinguished Scholar and Research Professor at the George Washington University School of Business and chair of its center for Real Estate and Urban Analysis.

development was propelled by the industry — car and truck manufacturing — that made Michigan one of the wealthiest regions in the world during the 20th century. However, we are seeing the pendulum moving back. It’s clear that Michigan metro areas are in favor of walkable urban places, or what the report calls “WalkUPs.” The Detroit-Ann Arbor area is a clear leader in this shift. We are seeing significant pent-up demand for walkable urbanism in Michigan, evident by the rent and price premiums for walkable real estate that have emerged over the last several years. In Detroit-Ann Arbor, while regional average office and re-

tail rents have declined since 2008, they have actually increased slightly in WalkUPs. As of the end of 2014, both office and retail rents are, on average, slightly higher in WalkUPs than in drivable suburban areas. For rental apartment and for-sale residential, the price premiums associated with WalkUPs are even greater. Multifamily rental apartments in WalkUPs achieve rents per square foot approximately 28 percent higher than in drivable suburban areas. For-sale residential prices are 57 percent higher in WalkUPs than in drivable subdivision locations. Finally, more and more income property development — which in-

cludes office, retail, hotel, rental apartments and for-sale residential — is concentrating in WalkUPs. Although WalkUPs and walkable neighborhoods make up only 3 percent of the metro region’s land, they have accounted for 25 percent of income property development in the latest cycle, up from only 6 percent from 1992 to 2000. Downtown and Midtown Detroit got an enormous shot in the arm in 2010 when Quicken Loans announced that it was moving its headquarters downtown. Other large companies and residential development and retail began to follow. SEE NEXT PAGE

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Legislature gets little respect from state voters in survey LANSING — It’s not ty party. While rea popular time to be a spondents who idenlawmaker in Michitified as Democrats gan, new polling redisapproved of the sults show. Legislature 4-to-1, Only 20 percent of those who consider registered Michigan themselves Republivoters approved of the LINDSAY cans disapproved, Legislature’s job pertoo, albeit by a smallformance in a survey VANHULLE er margin — 39 perdone last month by Capitol Briefings cent to 33 percent. Raleigh, N.C.-based lvanhulle@crain.com Gov. Rick Snyder Public Policy Polling. TWITTER: @LindsayVanHulle fared better — 40 perThe GOP-concent of survey retrolled Legislature is even unpopu- spondents approve of the two-term lar among members of the majori- Republican governor, while 47 per-

cent disapprove and 13 percent had no opinion. Unlike lawmakers, however, Republicans overwhelmingly approved of Snyder’s performance. The Legislature has not yet passed a comprehensive funding plan to fix Michigan’s roads and bridges. In May, voters by a margin of 80 percent to 20 percent trounced a ballot proposal that would have raised the state’s sales and gas taxes while removing the sales tax from fuel sales in an effort to raise $1.2 billion. Public Policy Polling surveyed 1,072

registered Michigan voters by phone and online between June 25-28.

Comings and goings 䡲 Brian Peters took over July 1 as CEO of the Michigan Health & Hospi tal Association, succeeding Spencer Johnson . Peters, 47, previously was executive vice president of the Okemos-based association, which lobbies on behalf of the state’s hospitals. Johnson, 70, retired after 30 years with the association. 䡲 Steve Faber has been hired to lead the new Grand Rapids office of

Brian Peters: New Steve Faber: To CEO of state lead Byrum & Fisk in hospital association. Grand Rapids. East Lansing-based Byrum & Fisk Advocacy Communications . Faber, 40, had been executive director of Friends of Grand Rapids Parks. 䡲

OTHER VOICES FROM PREVIOUS PAGE

It is no coincidence that these moves have been accompanied by major announcements of publicprivate partnerships and more than $2 billion of further investment in new construction and development over the past three to four years. And the new M-1 Rail is under construction, which will result in even more development, increased tax base and jobs. While the trend toward more walkable development is evident, Detroit-Ann Arbor still has a long way to go, having just 30 established WalkUPs, only six in the city of Detroit and many quite embryonic. Boston and D.C. have double that amount. Downtown Detroit presents the greatest opportunity. Realizing Detroit’s potential in walkable urbanism will require continued investment in infrastructure, especially the development of a true regional rapid transit system along the rest of Woodward Avenue into Oakland County and on the region’s other major transit corridors. Overlay zoning at these WalkUPs and walkable neighborhoods to allow for high-density, mixed-use development is crucial. With investments in infrastructure, the shift to walkable urbanism presents an opportunity for real estate developers, investors and residents to promote economic development while achieving environmental sustainability. Walkable urban places can and should be mixed-income as well. The research has shown that the combination of housing and transportation costs on the typical metro Detroit household budget is about 8 percent lower in a walkable place than in a drivable suburban location due to lower transportation costs. A growing body of evidence shows that college-educated people under the age of 35 prefer walkable urban places. Attracting and retaining these educated young professionals is critical for economic development in Michigan. Yes, a “walkable Detroit” is a new chapter in the Motor City’s history, but the landscape is changing. These walkable areas are critical to making this area competitive for the future and an even greater place to live, work and play. 䡲

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Marketing Associates buys N.C. analytics firm ics since 2006. Conclusive Analytics was founded in 2000 and does turnkey analytics work in the financial services, agriculture, industrial equipment and automotive aftermarket industries. It is not changing its name. Scott Bragg, formerly Marketing Associates’ vice president of client services, becomes managing director and chief customer officer at Conclusive Analytics. The position had been vacant prior to the acquisition. The rest of Conclusive Analytics’ management team will remain in place, Marketing Associates said.

By Bill Shea bshea@crain.com

Detroit-based Marketing Associ ates LLC said it has acquired Charlotte, N.C.-based Conclusive Analyt ics Inc. as part of its diversification strategy. Terms were not disclosed. Marketing Associates, which specializes in analytics-based digital and traditional marketing, bought the company June 16 from Charlotte-based private-equity firm Frontier Capital . Frontier, which invests in software and tech companies, had owned Conclusive Analyt-

Conclusive Analytics has 60 employees, and Marketing Associates employs 290. No staffing changes are planned as a result of the deal, Marketing Associates said. “The merger of our businesses reflects the growing demand from our clients to deliver on a seamless model of serving the needs of CIOs, (chief development officers) and CMOs,” Marketing Associates President and CEO Mark Petroff said in a statement. Conclusive Analytics had approximately $10 million in 2014 revenue. Marketing Associates, which was

founded in 1967 and is headquartered at One Kennedy Square, did not disclose revenue. Its client base includes Ford Motor Co. , Benton Harbor-based Whirlpool Corp., Sterling Heights-based KUKA Systems North America LLC , Detroit-based Amerisure Insurance Inc. and Livoniabased health information firm McKesson Corp.

Conclusive Analytics is the fifth acquisition by Marketing Associates in the past eight years, said Sameer Desai, MA’s executive vice president of client services and analytics. The business strategy behind the

Crain’s wins 7 gold awards in biz publications contest Crain’s Detroit Business won seven gold awards June 27 at the annual Alliance of Area Business Pub lishers conference and Editorial Excellence Awards. The awards recognized a range of editorial content across print and Web platforms. They were:

neighborhood districts.

tion package).

Best Bylined Commentary: Reporter Kirk Pinho ’s blog post on

䡲 Best Website . Crainsdetroit. com serves an average of 1 million

2.0. “The Big Bet on Detroit.”

Pontiac blight, which included his personal experiences in his rented home in Pontiac. 䡲 Best Headlines: Senior Editors Gary Piatek and Bob Allen, who were recognized for engaging print headlines such as: “Ctrl ... Alt ... the D: New CIO Beth Niblock starts from scratch to overhaul Detroit’s ‘fundamentally broken’ IT system” and “An elephant and a donkey in need of horse sense” (for a November elec-

June, was honored for blogs on small businesses and entrepreneurs in Detroit. 䡲 Best Use of Multimedia: Detroit Rink City. The multimedia presentation of the story included added elements such as maps, an interactive timeline and a drone tour of the site. And it was all completed in 48 hours.

unique visitors each month, updating daily with 15-20 stories written by staffers and pulling together weekly enterprise content and multiple special sections and reports. The site is designed to provide Southeast Michigan and beyond with a go-to place for business news and does so in a responsive design that adapts the content to fit every device. For all of the AABP winners, visit bizpubs.org. 䡲

䡲

䡲 Best Coverage of Local Breaking News: Detroit Rink City. Reporter Bill Shea and the entire editing team

were recognized for a quickly turned yet comprehensive report on the plans for the new Detroit Red Wings arena and five surrounding

IP Experience

䡲 Best Ancillary Publication: Detroit

䡲 Best Staff Generated Blog: Amy Haimerl. Haimerl, who left Crain’s in

Patent and trademark prosecution.

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Freedom to operate, novelty, and state of the art searches and opinions.

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Intellectual property license agreements.

Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

Calling all nonprofits Crain’s Best Managed Nonprofit Contest this year will focus on actions local nonprofits are taking to execute and/or adapt their missions and operations to the trends they foresee for their own sectors.

Examples include, but are not limited to, greater ethnic diversity, new generations of leadership, rapid technology change, and social and new models for organizing around projects and causes. Applications are due Aug. 24. Finalists will be interviewed by judges the morning of Nov. 10.

Applicants for the award must be a 501(c)(3) with headquarters in Wayne, Washtenaw, Oakland, Macomb or Livingston counties. Applications must include an entry form, a copy of the organization’s code of ethics, a copy of the most recent audited financial statement and a copy of the most recent IRS 990 form.

In Your Corner. ■

acquisitions is to continue an ongoing effort to diversify the client base away from automotive while increasing business service offerings and expanding the company’s geographic footprint, Desai said. Outside of Detroit, Marketing Associates also has an office in Wilmington, Del. Charlotte-based investment bank DecisionPoint International was Conclusive Analytics’ adviser on the deal. Marketing Associates did not use an outside adviser. 䡲

Previous first-place winners are not eligible; neither are hospitals, HMOs, medical clinics, business and professional organizations, schools, churches or foundations. The winners will be profiled in the Dec. 7 issue, receive a “bestmanaged” logo from Crain’s for use in promotional material and will be recognized at Crain’s Newsmaker of the Year lunch early next year. For an application form, please email YahNica Crawford at ycrawford@crain.com or visit crainsdetroit.com/nonprofitcontest. For information about the contest itself, email Executive Editor Cindy Goodaker at cgoodaker@crain.com or call (313) 446-0460.

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Metro Detroit

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Grand Rapids

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Kalamazoo ■ Grand Haven

■

Lansing

Contact Charles Gray at cfgray@varnumlaw.com

Tony Rothschild, CEO of Common Ground, last year’s Crain’s BestManaged Nonprofit Contest winner.

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SPECIAL REPORT:

BOOMERS

IN THE WORKPLACE

LARRY PEPLIN

Leslie Guerin, an IT manager at General Motors Co., is mentoring Samuel Brinson, a colleague in the automaker’s information technology group. By August, GM plans to start an internal online mentor portal with 4,000 staffers, most of them in the finance department.

A feeling of boom By Bill Shea bshea@crain.com

ging baby boomers are exiting the workforce as they reach retirement age, and companies locally and nationally are scrambling to keep valuable institutional knowledge from leaving with them. And while companies try to ensure key business processes are passed to younger employees, they’re also dealing with Michigan’s workforce development lag and with the trend of millennials changing jobs — and taking their newly inherited knowledge — every few years. The numbers are eyepopping: AARP, the nonprofit advocacy group for Americans age 50 and older, has said that every day, 10,000 boomers reach the traditional retirement age of 65. That trend began in 2011 and is forecast to continue for the next 14 years. Boomers today range in age from 51 to 69, and those working in Oakland, Wayne, Macomb and Washtenaw counties represent more than 21 percent of the local population, according to 2010 U.S. Census data. When they retire, decades of experience go

As older workers exit the workforce, employers don’t want their knowledge to go with them GM is launching by August an with them unless a company has Boomer breakdown. internal online mentor portal with plans in place so that their How counties compare, 4,000 staffers, most of them in the knowledge is inherited by Gen X Page 10 finance department, Oster said. and millennial employees. Boomer clout. With The program is both for young “It’s one of those sleeping giants skills shortage looming, staffers seeking a mentor and most people don’t think about. older workers may have older employees seeking to They deal with it when someone bargaining power, Page 11 mentor someone new to the leaves,” said Andrew Pena, company. assistant vice president for human Obsolete expertise? The portal allows employees to resources at New Mexico State Author wonders whether University and author of several boomers’ knowledge is all create profiles to narrow their papers and articles on retaining mentor/mentee search, such as that crucial, Page 12 corporate generational knowledge. by department, job or even by “If you don’t do something their university. proactively today, you’re going to be stuck with “We want to foster leaders to be coaches, and employees who know basic tasks but don’t have mentoring is one of the best ways to do that,” that institutional knowledge.” Oster said. “It’s really about encouraging both Locally, General Motors Co. has both formal sides of that equation to make the connection.” and informal efforts in place to capture the GM also has a dozen core programs and institutional knowledge of its 200,000-plus classes, run with Harvard and Stanford universities, intended to train young leaders to employees worldwide, said Chris Oster, the Detroit automaker’s global director for talent SEE BOOMERS, PAGE 10 development.

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SPECIAL REPORT: BOOMERS IN THE WORKPLACE

BOOMERS FROM PAGE 9

take over from older employees. For example, employees selected to participate can earn a “mini MBA” through a six-month virtual course offered by Harvard instruction, Oster said. “The idea is that we’re going to need to take more risks with promotions and accelerate the promotion of people,” she said. GM expects a “bow wave” of boomers to begin leaving the company in larger numbers starting in 2017, Oster said. To battle that, new employees across all corporate functions also participate in a two-year job track that rotates them through different jobs in their area, Oster said. “They get a breadth of exposure in their area of the business before they specialize,” she said. GM also devotes entire days to career development for newer employees, and they involve speakers and immersion in company culture.

Additionally, every department updates processes and training. “All of the functions at GM have something Chris Oster: like a learning “going to need to college or learntake more risks with ing home room,” promotions.” Oster said. On the back end, the company is increasingly hiring retirees as consultants for specialized work and to act as mentors, she said, meaning the institutional knowledge remains in the building. “I think there’s an opportunity for us to study ways to help people to stay active with us longer,” she said. Another Michigan company actively dealing with knowledge retention is Jackson-based CMS Energy Corp., parent of Consumers Energy Co. The company currently has 125 employees in a formal program to accelerate career development, said Cathy Hendrian, CMS vice presi-

dent of human resources. Those staffers are being groomed as the utility’s future leaders, and that involves absorbCathy Hendrian: ing the institu“we’re clearly think- tional knowledge ing about it.” of older employees. “We try to identify those people earlier in their career,” said Hendrian, adding that an additional 100 are on a watch list. Those in the program rotate jobs so they become familiar with different roles. As a utility company, CMS cannot afford to lose knowledge as the boomers retire. “That’s an issue out there for us, and we’re clearly thinking about it,” Hendrian said. CMS does knowledge transfer by documenting processes, formal mentoring and job shadowing, she said. It’s done across all levels of the 7,500-employee company, from human resources to engineering, finance, information technology and government affairs.

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General Motors and CMS are conducting what knowledge retention specialists say are best practices. The business community has myriad options to stave off knowledge loss, said Kenneth Mall, managing director of Dearborn-based Educational Data Systems Inc., a workforce development, customized training and consulting firm. “What we advise companies to do is to set a very deliberate strategy,” Mall said. “Start a knowledge loss risk assessment.” Companies look around and “all of a sudden they’re looking at a team, and 50 to 60 percent of the team can retire,” he said. Mall recommends that companies don’t consider the individual who may leave but the specific business knowledge that he or she possesses.

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Michigan is one of America’s grayer states. “While millennials now outnumber baby boomers on the national level, Michigan is one of 13 states that buck the trend. In 2014, Michigan had 2.5 million boomers and 2.4 million millennials,” said Kurt Metzger, the retired founder of Data Driven Detroit who spent nearly 40 years compiling information and statistical analysis locally. Michigan’s boomer share of the state population was 25.5 percent, ranking it eighth highest in the country, Metzger said. That puts it 1.8 percentage points above the national average. “Michigan was one of the fastestaging states during the last decade and has continued the trend during the first four years of this decade,” he said. Bill Shea

Boomers: A breakdown The 2010 U.S. Census found that Michigan had 2.8 million residents ages 45-64, the age range of boomers at that time. The number represents 28 percent of Michigan’s 9.8 million residents. Boomers actively employed across Oakland, Wayne, Macomb and Washtenaw counties accounted for 711,720 people, according to the 2010 Census. That age 45-to-64 workforce was 21.3 percent of the 3.3 million people ages 16 and up who live in those four counties. Boomers (ages 45-64) broken down by county in 2010:

Wayne 487,629 Oakland 356,530 Macomb 236,830 Washtenaw 86,453 Boomers in the local workforce, based on 2010 Census Wayne: 260,799

45-54: men 80,119; women 82,046 55-59: men 29,065; women 33,752 60-61: men 7,923; women 9,392

18.4% of1,416,960 residents age 16 and up

62-64: men 8,305; women 10,197 Oakland: 241,641

45-54: men 77,152; women 71,205 55-59: men 29,965; women 28,513

25.2%

60-61: men 8,939; women 8,076

of 956,005 residents age 16 and up

62-64: men 8,768; women 9,023 Macomb: 148,032 45-54: men 47,358; women 47,799 55-59: men 17,754; women 16,170

22% of 671,508 residents age 16 and up

60-61: men 4,137; women 4,739 62-64: men 4,544; women 5,531 Washtenaw: 61,248

45-54: men 18,008; women 17,370 55-59: men 7,801; women 8,344

21.7%

60-61: men 2,459; women 2,617

of 282,130 residents age 16 and up

62-64: men 2,329; women 2,320

“Don’t worry about (the employee) and experience but what critical knowledge each team member has,” he said. “What you’ll find is any employee can do great things.” The recommendations of Educational Data Systems are individualized for clients, but some basics translate across most industries and sectors. “Sometimes it’s writing an operational manual,” Mall said. “Organize thoughts in logical format. Now you have something the next generation can go by.” Educational Data Systems creates two- to five-minute YouTube-style videos for companies that feature someone explaining business processes, something Mall has done for manufacturing and professional service companies and utilities. The videos can be on anything from how to create a spreadsheet to an explanation of an invoicing process or how a piece of machinery works, he said. Another basic knowledge retention strategy is job shadowing, Mall said. The trick, he added, is creating defined objectives from the shadowing. “What is the specific knowledge you need to transfer?” he said. “At the end of the day, there’s a specific accomplishment. It might be 10 things over a few months. You have to have

measurables and identify needs.” Educational Data Systems has local clients, but Mall could not identify any because of nondisclosure agreements. “They don’t want you to know they have problems,” he said.

Warning bells Advocates for the state’s business community are sounding warning bells about the aging workforce and the knowledge heading for the exits. “It’s a really big problem, and a national problem. It’s more acute in Michigan because of the demographics of our state. We’re getting older than the nation as a whole,” said Doug Rothwell, president and CEO of Business Leaders for Michigan, the nonprofit, Detroit-based CEO council representing the region’s major employers. The demographic trends mix with years of layoffs to create a perfect storm of workforce and skills shortages in the state. “What happens is economics move faster than the workforce can keep up with the demand,” Rothwell said. Because the state faces a glut of boomers exiting the workforce, atop a host of post-recession economic SEE NEXT PAGE

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SPECIAL REPORT: BOOMERS IN THE WORKPLACE

Amid concern for coming skills gap, boomers wield bargaining power By Doug Henze Special to Crain’s Detroit Business

As is the case across the U.S., a major cause of the labor shortage is the graying of the baby boomer generation — the oldest of whom reached early retirement age in 2008. In the U.S., 10,000 baby boomers become eligible for retirement each day — a rate that’s expected to continue for the next 15 or 16 years, said Lisa Katz, executive director of the Detroit-based Lisa Katz: Key fields face worker shortages

Workforce Intelligence Network.

In Southeast Michigan, an estimated 150 people a day are turning 65. And in professional and technical services, which includes IT jobs, 20 percent of the workforce is at least 55, Katz said. Not all will retire, but many who can afford to will. “We don’t have enough people going into these fields to backfill them,” Katz said. “We are going to be looking at increasing potential for a significant skills gap.” Donald Grimes, assistant director of the University of Michigan’s Center for Labor Market Research, said persuading boomers to stay in their jobs longer may be employers’ most effective strategy to combat the job drought. “They may have to figure out a way to offer them (ways) to work fewer hours,” Grimes said. “Employees may have some bargaining power.” Oakland County’s unemployment rate reached 13 percent in 2009, but has been shrinking ever since. Last year’s unemployment rate of 7.2 percent will decline to 5.3 percent this year and 5 percent in 2016, reaching 4.6 percent by 2017, according to the 30th annual Oak-

FROM PREVIOUS PAGE

issues, Michigan’s business community and government are aware of where employment and skills gaps likely will occur in coming years, he said. “People have a pretty good handle of where the workforce shortages will be in the state,” Rothwell said. Business Leaders has made statewide workforce development a priority because Michigan lags behind much of the nation. “We have lower education attainment levels; fewer people in the education pipeline completing high school, college or technical training,” Rothwell said. “The basic concern that we have is that we need all

land County economic re“They may be able to enport co-written by Grimes tice their older workers to and UM research Professor stay,” Grimes said. Keeping George Fulton. those familiar faces around The drop means the also may require employers county will have regained to pony up a few more dol142,214 of the 163,314 jobs lars. it lost from 2000 to 2009 — “People are beginning to Donald Grimes: about 87 percent. get pay raises,” Grimes said. “If there is a risk for Boomers may have “If (companies) get someerror, it’s that our forecast bargaining power. body who is a good worker, for 2017 will be too high,” they may want to make Grimes said. “It’s a very high likeli- sure they’re kept happy.” hood (Oakland County) is going to Of course, older workers will rebe facing a labor shortage.” tire eventually. That shortage exists in high-de“Employers need to get more inmand fields such as advanced man- volved in pipeline development,” ufacturing and software engineer- Katz said. “If we want to outcoming, said Irene Spanos, director of pete our national partners, we’re economic development going to have to be more and community affairs for creative.” Oakland County. Targeting women could “We have 2,000 IT combe an answer for compapanies in Oakland County, nies in technical fields, she and they’re struggling to said. Often underreprefind talent,” she said, sented in high-tech jobs, adding that she recently women could lend a hand. heard that 70 percent of Because women often the software engineers in Irene Spanos: have caregiving responsiMichigan are being re- Oakland’s IT firms bilities as well, that could cruited by California com- struggle for talent. require the creation of spepanies. cial shifts that would allow Southeast Michigan IT compa- them to get children to school, Katz nies are waiting an average of 47 said. days to fill positions after posting Younger generations could bethem, Katz said, citing Brookings Insti- come a major source of labor for tution statistics. It’s the nation’s fifth- worker-starved companies — if stulongest wait time, she said. dents can be persuaded to choose “Demand is 17 times higher than those fields. the number of people going into Among key fields facing labor those fields in Southeast Michigan,” shortages are engineering and deshe said. “As the economy gets sign, health care and skilled trades, healthier and as current workers such as welders and CNC operators. decide their retirement funds have “We’re really pushing employers rebounded significantly enough for to be more engaged with students,” them to retire, we’re going to see the Katz said. problem get worse and worse.” Because Southeast Michigan’s But, Spanos said, “long term, it’s economy is largely driven by techgoing to be every job. There’s a need nology — primarily because of the for nurses, physicians, bankers, ac- auto industry — it’s crucial to steer countants.” students to tech fields, Katz said. In such an environment, keeping “If we aren’t growing the talent boomers on the job longer is one pool,” she said, “our bread and butoption for employers. ter is in danger.” 䡲

of the above.” By 2020, about 70 percent of Michigan jobs will require an education beyond high school, Business Leaders noted in a February report on higher education.

recovered, so has the need for training programs, he said. “The automakers are ramping them back up,” Mall said. Michigan companies are seeking professional Doug Rothwell: services talent, too, to reTalent pipeline Workforce can’t keep place boomers. The talent pipeline in the up with economics. Among the jobs that skilled trades and manufacmetro Detroit and the naturing sector has been struggling be- tion as a whole are expected to see cause many technical career training shortages of as boomers retire are programs were dismantled and management analysts, industrial fewer apprenticeship programs have engineers, financial managers, been available compared to decades labor relations managers, postal ago, said Mall of Educational Data clerks, police detectives, registered Systems. SEE BOOMERS, PAGE 12 As the automotive industry has

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SPECIAL REPORT: BOOMERS

Not everything boomers know about business is so crucial While the loss of business knowledge as baby boomers retire is a problem in Michigan and nationally, there is a silver lining. Not all institutional knowledge is worth preserving, said Andrew Pena, assistant vice president for human resources at New Mexico State University and author of several papers and articles on the retention of corporate generational knowledge. “You have people coming in that can engineer new processes and make them more efficient than how they previously had been done,” Pena said. “Maybe change is good.”

BOOMERS FROM PAGE 11

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The recession also had an upside for companies because it delayed retirement for some boomers — buying companies time to retain their knowledge. Because of delays in retirement, personal financial circumstances, improvements in health care and a general interest to keep working, the glut of boomers still is on the horizon, Pena said. “Organizations have another 10 years before the last boomer hits Social Security age and is ready to move on,” he said. Bill Shea

Knowledge webinar Kenneth Mall, managing director of Dearborn-based Educational Data Systems Inc., is hosting an hourlong webinar on knowledge retention at 11:30 a.m. July 14 through the website of the Michigan Council of

nurses, social workers and even lawyers, according to the U.S. Bureau of Labor Statistics. “There is a huge group of older workers getting out of the labor the Society for Human Resource force. They’re pulling the labor force Management, mishrm.org. participation rate down with them,” It’s free for Detroit SHRM members said Mitra Toossi, an economist in and $25 for nonmembers. the Bureau of Labor Statistics’ Office of Occupational Statistics and EmEducational Data Systems is a ployment Projections. workforce development, customized “People are getting out because of training and consulting company. retirement, old age and health issues.” Cindy Pasky, president and CEO to train the newer folks, but they’re of Detroit-based Strategic Staffing concerned that that person is just Solutions , said her company has going to leave,” he said. “If you’re inbeen pushing clients to vesting in your workforce hire military veterans to fill and there are other reasons the gap created by retirees for them to stay, you might and for companies seeking as well invest in your traintemporary employees as ing.” they transition systems. Of course, it’s not as if Veterans are disciplined the boomers didn’t job and have skill sets at hop: The average person younger ages, she said. born between 1957 and “That particular talent Cindy Pasky: Vets 1964 had 11.7 jobs from pool is good to look at for can fill the void age 18 to age 48, and nearly knowledge transfer,” Pasky created by retirees. half of these jobs were held said. “It can shorten the from ages 18 to 24, accordtime frame it takes to transfer ing to data released by the U.S. Buknowledge.” reau of Labor Statistics in March. Clients of Strategic Staffing SoluAnd the worry about younger tions began significant talks about employees leaving after expensive replacing boomers five years ago, training has a simple counterarguPasky said, and the first wave of in- ment, Mall said. vestment to replace them began “What happens if you don’t train three years ago. them and they do stay?” he said. “At Still, trepidation exists on the part the end of the day, companies have of employers to invest in extensive to decide if they’re going to make training of new workers because that investment. It’s going to cost they tend to hop jobs, Mall said. them one way or another.” 䡲 Bill Shea: (313) 446-1626 “A lot of companies would be very Twitter: @Bill_Shea19 happy to invest the time and energy

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“A lot of companies would be very happy to invest the time and energy to train the newer folks, but they’re concerned that that person is just going to leave.” Kenneth Mall, Educational Data Systems Inc.

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FRIDAY JULY 10

The Power of an Agile Mindset. 4 p.m. Ann Arbor Spark. Linda Rising,

consultant and author, discusses how an agile mindset can enhance creativity and innovation, estimation and collaboration in the workplace. Menlo Innovations, Ann Arbor. Free. Email: aflynn@ menloinnovations.com; website: annarborusa.org.

CALENDAR Best Strategies in Supplier Diversity Luncheon. Noon-2 p.m. Aug. 19. Di-

versity Information Resources. Speaker: Eric Holder Jr., former U.S. attorney general. $124. Detroit Marriott Renaissance Center. Contact: Betsy Gabler, (612) 781-6819; email: info@diversityinforesources.com.

UPCOMING EVENTS Veterans: The Untapped Talent Pool. 10 a.m.-1 p.m. July 14. Automa-

tion Alley. Season 2 of the “Michigan’s Got Talent” event series is a seminar focused on hiring veterans. David Dunckel, Roush Veterans Initia tives Program manager, will speak about the program. 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 GM’s Mary Barra Shattered the Glass Ceiling, author Laura Colby describes the character, choices and leadership style that steered Barra’s career trajectory to become CEO of General Motors Co. Westin Book Cadillac, Detroit. $40 Inforum members, $55 nonmembers, $25 students, $500 table sponsors (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 en-

trepreneurs 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 TV’s “Shark Tank.” 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 of human performance, Blue Cross Blue Shield of Michigan, looks at the importance

of risk-taking strategies for careers in health care. St. John Macomb-Oakland Hospital, Madison Heights. $20 Inforum members, $30 nonmembers. Website: inforummichigan.org. Calendar guidelines. Visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” from the drop-down menu that will appear. Fill out the submission form, then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events.

Email Marketing for Success. 8:3010 a.m. Aug. 25. Troy Chamber of Commerce. Kim Schott of Constant Contact will speak 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. Quality and the Consumer Experience. 8:30 a.m.-4:30 p.m. Sept. 2223. Automotive Industry Action Group. Administrator Mark Rosekind

of the National Highway Traffic Safety Administration will be keynote speaker at the AIAG Quality Summit. Suburban Collection Showplace, Novi. Registration before July 24: $450 members, $650 nonmembers. Registration before

Sept. 8: $575 members, $775 non-

members. Late registration: $700 members, $900 nonmembers. Contact: events@aiag.org. Wayne County Networking Reception. 5:30-7:30 p.m. Sept. 24. Detroit

Regional 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; email: malabast@detroitchamber.com; website: detroitchamber.com.

Crain’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 Crain’s Detroit Business hosts a panel discussion with the top financial executives from Detroit’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.

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DEALS & DETAILS

PEOPLE

ON THE MOVE EDUCATION Kristin Rohrbeck to director, Oakland University Center for Autism Outreach Services, Rochester

Rohrbeck

Hills, from program coordinator.

SPOTLIGHT KEN BANACH, CFO, Detroit Public Television Ken Banach has been hired as CFO of Wixom-based Detroit Public Television. Banach, 50, was most recently CFO of Detroitbased James Group International. He re-

Banach

Bogas

Pratcshler

FINANCE Julie Bogas to advisory partner,

financial, strategic and operational risk practice, PricewaterhouseCoopers LLP, Detroit, from director. Also, Tim Pratcshler to principal, tax practice, from director. James Rowe

to director of institutional sales, world asset management,

places John Wenzel, who retired after 15 years as

DPT’s CFO. Banach’s experience in the financial industry spans nearly three decades. Before his post at James Group, he was vice president and CFO of Durr Ecoclean in Wixom; director of finance, corporate secretary and treasurer at Valenite LLC in Madison Heights; and controller at Visteon Corp. in Van Buren Township. Banach, a CPA, earned a bachelor’s degree with a major in accounting from Eastern Michigan University, as well as an MBA.

Comerica Asset Management Group, Detroit,

from principal and founder, Rowe Capital Partners LLC, Boulder City, Nev. Rowe

Roger Webster to director of HR consulting, Rehmann Group, Detroit, from owner, Platinum1Solutions, Livonia.

HOSPITALITY Nate Macheske to executive chef, Rusty Bucket Restaurant and Tavern at Northville Park Place, Northville, from executive kitchen manager, Champps Kitchen & Bar, Livonia. Also, Dan Calabrese to sous chef, from independent contractor, JB Donaldson Co., Farmington Hills; Paul Creely to dining room manager, from store manager, GameStop, Westland; and Pam Ligner to dining room manager, from corporate trainer, Longhorn Steakhouse, Merritt Island, Fla.

LAW Elizabeth Pyden to partner, Saur bier & Siegan PC, St. Clair Shores,

from senior associate.

Webber

Hassouna

tor of development and marketing. Kelly Errer to director, business development, Arbor Hospice and Palliative Care, Ann Arbor, from

provider relations representative, department lead.

REAL ESTATE Jeff Atkins to senior associate of project management, Plante Moran Cresa LLC, Southfield, from project

director, Barton Malow Co., Southfield. Also, Meagan Hill to associate, transaction management, from assistant prosecuting attorney, Oakland County Prosecutor’s Office, Pontiac; John McCarroll to senior associate, project management team, from president and co-founder, McCarroll Services Inc., Brighton; and Jim Steiner to senior associate, project management, Plante Moran Living Forward senior living division, from project manager, Clark Construction Co., Southfield.

SERVICES Teresa Carroll to senior vice pres-

ident and general manager, global talent solutions, Kelly Services Inc., Troy, from senior vice president, centers of excellence and general manager, Kelly Outsourcing and Consulting Group. Also, Peter Quigley to chief administrative officer, continuing as senior vice president and general counsel. Mike Stewart to manager, business and market development, Dillon Energy Services Inc., St. Clair Shores, from energy consultant, Lakeshore Energy Services, Charlevoix.

NONPROFITS

SUPPLIERS

The Rev. Larry Webber to executive director, development, Ca-

Colleen Hanley

to vice president of communications and investor relations, FederalMogul Powertrain division,

puchin Franciscan Province of St. Joseph, Detroit, from director,

Solanus Casey Center, Detroit. Also, Kristi Hassouna to development director, from development manager, Haven Inc., Pontiac; and Jan StuartChmielarczyk

Stuart-Chmielarczyk to special

events manager, development office, from associate director of annual giving, Sacred Heart Major Seminary, Detroit.

MARKETING Byron Pope to account director, The Millerschin Group Inc., Auburn

Hills, from associate editor, WardsAuto, Southfield.

manity Detroit, Detroit, from direc-

Tara Franey to interim executive director,

Franey

Habitat for Hu -

Hanley

Federal-Mogul Holdings Corp.,

Southfield, from director of global communications, TRW Automotives Holding Corp., Livonia. 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.

ACQUISITIONS & MERGERS Agree Realty Corp., Bloomfield Hills, announced that it has closed on the acquisition of 12 retail properties for $26.5 million. The acquisitions include BJ’s Wholesale Club, Portland, Maine; an IHOP restaurant (ground lease), Elyria, Ohio; a KeyBank (ground lease), Elyria, Ohio; and an asset net leased to PetSmart, Staples and Party City, Davenport, Iowa. This was the second component of a transaction that also included the HEB Grocery store, Brenham, Texas. Other recent acquisitions include retail assets net leased to Aaron’s, Elk City, Okla.; Advanced Auto, Freeport, Fla.; Dollar General in Blacksburg, S.C.,; Portfolio, S. C.; and Ohio; and Sleepy’s, Bloomsburg, Pa. Website: agreerealty.com.

sites: paradigmdx.org, cureforward.com.

EXPANSIONS MOD Pizza LLC, Bellevue, Wash., and Team Schostak Family Restaurants, Livonia, have opened a MOD

Pizza restaurant at 13229 Middlebelt Road, Livonia. Phone: (734) 245-0710. Website: modpizza.com. Rayconnect Inc., Rochester Hills, part of the ARaymond Network of companies, added 30,000 square feet of manufacturing and office space to its 75,000-square-foot building. The plant, which produces Quick Connect fittings for fluid-handling systems for the automotive, heavy-truck, recreational, off-road and industrial markets, plans to add 60 employees. Website: araymond.com.

G2 Consulting Group, Troy, a provider of geotechnical, environmental and construction engineering services, acquired SchleedeHampton Associates Inc., Birmingham, which provides similar geotechnical engineering services to the construction industry. Website: g2consultinggroup.com.

Art Van Furniture Inc., Warren, opened a Scott Shuptrine Interiors store at 17145 Kercheval Ave., Grosse Pointe. Telephone: (313) 432-0021. Website: scottshuptrine.com.

Total Health Foods, Wyandotte, purchased the former Gail’s Office Supply Co. complex at 2948, 2954 and 2958 Biddle Ave., plus 2929 First St., Wyandotte, from the Max Gail family. Website: thfdownriver.com.

Jones Drive, Ann Arbor, to 301 E. Liberty St., Suite 700, Ann Arbor. Website: pillartechnology.com.

CONTRACTS Arotech Corp., Ann Arbor, a

provider of defense and security products for the military, law enforcement and homeland security markets, announced that its North American Power System Division, which includes UEC Electronics LLC, Hanahan, S.C., has been awarded multiple contracts totaling $7.5 million from tier-one manufacturers in the defense and medical device industries. Website: arotech.com.

MOVES The Forge by Pillar, a collaborative workspace for Pillar Technology Group LLC, has moved from 1327

The Friendship Factory at Partridge Creek has moved from space 151 to space 123 in center court, 17420 Hall Road, Clinton Township. Telephone: (586) 530-9090. Websites: thefriendshipfactory.com, choosefriendship.com. Gerry Weinberg & Associates Inc.

has moved from 29201 Telegraph Road, Suite L11, Southfield, to 29201 Telegraph, Suite 410, Southfield. Website: gerryweinberg. sandler.com.

NEW SERVICES Rubicon Genomics Inc., Ann Arbor,

Secure Beginnings LLC, Detroit, manufacturer of breathable crib mattresses, has selected Media Genesis, Troy, an Internet development company, to create a series of social media videos. Websites: secure beginnings.com, mediag.com. Paradigm Diagnostics Inc., a nonprofit molecular information corporation and collaboration between the University of Michigan Health System, Ann Arbor, and International Genomics Consortium, Phoenix, will serve as a core diagnostic laboratory partner for the next-generation sequencing molecular profiling for cancer patients to provide better access to their molecular profiling test data, which they can use at Cure Forward, a Cambridge, Mass.-based patient activation company. Web-

announced it has opened an Early Access Program for its new ThruPLEX Plasma-seq kit for the preparation of DNA libraries to analyze cell-free DNA found in plasma and other biofluids. ThruPLEX Plasmaseq is designed to detect biomarkers and genetic mutations using cell-free DNA liquid biopsies from blood, eliminating the need for invasive and costly tissue biopsies. Website: rubicongenomics.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.

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BRIEFLY

Chassix finds support for Chapter 11 exit plan

Magna Seating plans $48M HQ in Novi LANSING â&#x20AC;&#x201D; Magna International Inc. plans to spend $48 million on a new facility in Novi for its seating division. The Canadian auto supplier, which bases its U.S. operations in Troy, plans to build the 180,000-square-foot building for its Magna Seating of America Inc. subsidiary, the Michigan Economic Development Corp. said last week. The project would add 164 jobs. The MEDCâ&#x20AC;&#x2122;s Michigan Strategic Fund awarded Magna Seating a $984,000 performance-based grant to put toward the project. Novi will offer a property tax incentive, the state said. Magna Seating currently has headquarters in Novi on Lewis Drive, near Haggerty and 13 Mile roads. Its new headquarters will also be in Novi on Cabot Drive, north of 13 Mile Road and east of the M-5 highway, Magna spokesman Scott Worden said. It will house Magna Seatingâ&#x20AC;&#x2122;s engineering, sales and marketing, and research and development functions, the state said. Construction is expected to start in the fourth quarter, Worden said. He did not have a target completion date. Last month, Magna won a $1.6 million grant from the Michigan Strategic Fund to support its plan to build a $56.1 million automotive underbody component plant in Lyon Township for its subsidiary, Marada Industries Inc., dba Cosma Body Assembly Michigan. The 150,000-square-foot factory near Milford Road and Grand River Avenue is expected to add 250 jobs. LindsayVanHulle

New mixed-use project in store for Midtown A developer wants to transform a vacant apartment building in Midtown into a $3.7 million commercial and residential space. The company, 678 Selden LLC, plans to invest almost $3.7 million in the building at 678 Selden St., between Second Avenue and Third Street, the Michigan Economic Development Corp. said last week. The MEDCâ&#x20AC;&#x2122;s Michigan Strategic Fund awarded the project a $670,210 performance-based grant. The city of Detroit also has offered an incentive worth nearly $411,000 under the stateâ&#x20AC;&#x2122;s Obsolete Property Rehabilitation Act.

By Chad Halcom chalcom@crain.com

COSTAR GROUP INC.

The building at 678 Selden St., eyed for a $3.7 million renovation into mixed-use development. The project will require extensive renovations. They include new plumbing, heating and electrical systems; remodeled bathrooms and kitchens; elevator work; a laundry facility; and secured parking across the street from the building, the state said. A previous online property listing suggests the threestory building had been stripped of copper and metal, and the condition of its roof was unknown. The entity 678 Selden LLC lists its resident agent as Brandon Duckett. Duckett could not be immediately reached for comment Thursday. Possible commercial tenants have not been identified, nor has the potential number of residential units. The 23,000-square-foot building was built in 1922. Duckett bought the 30-unit building in December 2013 for $200,000, for a cost of about $6,667 per unit, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. Its assessed value was $110,778 last year.

REAL ESTATE

LindsayVanHulle

Debt-laden Southfield auto supplier Chassix Holdings Inc. entered its bankruptcy court confirmation hearing late last week with nearly unanimous creditor support for its Chapter 11 exit plan. All four voting classes of Chassix creditors â&#x20AC;&#x201D; secured bondholders, unsecured bondholders, trade claim creditors and other general unsecured creditors â&#x20AC;&#x201D; either majority-approved the Chassix plan or did not submit valid ballots in their claims against Chassix or its 17 subsidiaries and joint ventures. No creditor class that voted was less than 80 percent in favor of the plan by number or less than 77 percent in favor by claims value, according to a voter tabulation submitted last week by Prime Clerk LLC to U.S. Bankruptcy Judge Michael Wiles. A lingering dispute with Indianapolis-based Allison Transmission Inc., which had wanted its litigation claims valued in the plan at more than $1.1 billion â&#x20AC;&#x201D; which would have given Allison decision-making power in its class of creditors â&#x20AC;&#x201D; was settled last week with Allison agreeing to vote its 18 claims at $1 each. Bankruptcy law requires a debtor to gain approval from a majority of creditors by number within one class, representing more than two-thirds of the class claims by value, in order for the whole class of creditors to be considered on board

MARKET PLACE

with an exit plan. Two holders of a minority share in the $150 million unsecured bonds issued by Chassix â&#x20AC;&#x201D; PECM Strategic Funding LP and Benefit Street Credit Alpha Master Fund Ltd.

â&#x20AC;&#x201D; still opposed the plan, and their attorneys were questioning witnesses Thursday in court as the confirmation hearing got underway. It was not immediately clear how much they are owed, but four creditors in that class representing about $21.9 million in combined claims voted to reject the plan, according to the voter tabulation. Chassix, which reported annual revenue of about $1.4 billion earlier this year, filed for Chapter 11 bankruptcy March 12, claiming it owes more than $525 million to bondholders and more than $65 million to other creditors including other auto suppliers, materials manufacturers and staffing companies. The supplier of automotive chassis, brake and powertrain components is owned by Tom Goresâ&#x20AC;&#x2122; Platinum Equity LLC. The reorganization plan, largely a debt-equity swap, would give bondholders of $375 million in secured debt 97.5 percent of stock in the reorganized company and another 2.5 percent stake to trade creditors and the unsecured bondholders. Platinum retains no equity in the company if the plan is confirmed. äĄ˛ Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

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NOTICES FROM PAGE 3

mer break, when it became apparent lawmakers didn’t have enough support to pass it. It could be taken up again later this summer or fall. “The way technology’s going to go, we get our news a lot by television and other media sources, and we see readership in newspapers going down,” said state Rep. Amanda Price, a Republican from Ottawa Amanda Price: County’s Park Going digital could Township, who save money. introduced the bill. “We envisioned a time when we’ll have fewer and fewer newspapers and more and more technologies and ways to inform the public.” The bill pending in the House gradually would phase out print publication of government notices by 2025. It would allow local governments to publish notices on their own websites, or contract with newspapers or broadcast outlets to host them on their sites. A similar bill passed the House in the last legislative session, but died in a Senate committee. More than 200 state laws require advance notice of hearings and other government notices, with varying requirements, Price said. Some include specific language that notices be published in general-circulation newspapers that reach residents within the affected municipality, or that notices be published for a certain amount of time. Many of those laws were adopted before the birth of the Internet. “When these laws were enacted, newspapers were virtually the only form of reliable communication. That just isn’t the case anymore,” said Nikki Brown, a legislative associate for the Michigan Municipal

HOTELS FROM PAGE 3

brought online, “and now we are seeing a balancing of supply and demand,” he said. Financing is available at historically low rates, which creates a lower risk level for developers, Wilson said. “However, if the next recession is anything like the last one, the cycle will start all over again.” In the last 90 years there have been 18 recessions, Wilson said, which works out to an economic setback about every five years or so. “We are six years into this current recovery,” he said.

Bullish building boom But developers remain optimistic. Construction of the West Bloomfield mixed-use complex is underway and encompasses an 89room Hampton Inn, a retail building and restaurant building at Orchard Lake Road and Northwestern Highway. The project is going up on the site

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C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 6 , 2 0 1 5 League . “This legislation promotes good government and transparency by providing the public notices in other forms of communication that are visited more often.” Going digital also could save taxpayers money, Price said, by reducing the amount local governments have to spend on publishing the notices. Supporters of moving public notices online, including Price and the municipal league, however, could not estimate the amount of possible savings.

Message access Initially, Price said, her idea was to get notices in people’s hands however possible — through emailed newsletters, Twitter, text messages. The bill evolved after hearing “pretty compelling” testimony from broadcasters about their viewership numbers, she added. State and national press associations say the issue, while about money, also has to do with government transparency, universal Internet access, geography and economic competition. “Is it a turf war? Of course, that’s an aspect of it,” said Brad Thompson, president of Detroit Legal News, who says less than a tenth of his publication’s revenue comes from such notices. But, cumulatively, public notices add up to hundreds of millions of dollars for American print newspapers — and are especially important for smaller daily and weekly papers, wrote Geoffrey Cowan and David Westphal, of the Annenberg School for Communication and Journalism’s Center on Communication Lead ership and Policy at the University of Southern California, in a 2010 report.

They cited an estimate from the National Newspaper Association —

which represents 2,400 newspapers, mostly weeklies and small dailies, across the U.S. — showing government notices made up 5-10 percent of community newspaper revenue in 2000. The association’s CEO,

of an old shopping center anchored by Dunham’s Sports and a gas station. It includes a 3,000-square-foot restaurant building being prepped for a pizza chain and a 4,700-squarefoot retail building anchored on both sides of a clock tower, according to the plan filed with the township. The restaurant and retail buildings are designed with a multistorefront facade to fit the aesthetics the township wanted for its center district, said Mike Powell, principal of White Lake-based Pow ell Engineering & Associates LLC , the engineer on the project. The township was seeking a design with more architectural interest, rather than a typical shopping center design, to spur pedestrian interest, said Chris McLeod, planning director for West Bloomfield Township. Jarratt Architecture Inc. in South Lyon is the architect. Sam Sandiha, owner of Pinnacle Management Group, and Basil Bacall, co-owner of Truss Hospitality Devel opment and Management, are co-developing the site. Sandiha declined to disclose the

Tonda Rush, told Crain’s the estimate came from a previous executive and she doesn’t have an updated figure. Groups like the Michigan Press Association, which opposes the legislation, can’t say how much money its member newspapers take in from government notices — nor how much of a financial hit they’ll take. That depends, they say, on the size of the publication, the market, the ad. The nonpartisan House Fiscal Agency, in an analysis of Price’s bill, said publishing costs could hit $4,000 in a township and $50,000 in a larger county. Broadcasters, who hope they will be able to compete for government business, believe it’s time public notices enter the 21st century and adapt to new technology that has changed the way people receive information. “We just don’t feel there’s any place in a free market for exclusivity, especially now, because the way people consume media is so varied,” said Karole White, president and CEO of the Michigan Association of Broadcasters. The organization represents all of the state’s commercial TV stations and 87 percent of its radio stations. “We feel we can make public notices somewhat more popular than what they are now,” White said, adding that broadcasters would direct viewers to visit their public notice Web pages on the air. “They should be more than to line a birdcage.”

No Net? Opponents resist the digital shift in part because there’s still a large swath of the state without reliable Internet or cellphone service. Some townships and small cities, especially in rural areas, have rudimentary websites and older populations that still rely on newspapers for information. Rep. Peter Pettalia, R-Presque Isle, was a township supervisor for 16 years before he was elected to the Legislature. He said fewer than half

project’s cost. He said the Hampton Inn should be open by early September, and the hope is to break ground on the extended-stay with about 75 rooms early next year. The partners have not secured a franchise for the second hotel. The California-based pizza chain Project Pie is opening in the restaurant building, Sandiha said, and conversations are ongoing to find two retailers for the other spaces. The demand for hotel inventory amid increased demand for rooms is spurring development, Sandiha said. “There was not a whole lot going on, and all of a sudden the demand is there,” he said. “Everyone is doing well. People are taking advantage of it and building.”

Corridor growth About a quarter mile south of the Hampton Inn complex, on Northwestern Highway, a Holiday Inn Ex press & Suites is also under construction. It will bring 107 rooms to Farmington Hills. The owner and developer of the $4 million project is Jimmy Asmar of

of the townships he represents in the northeastern Lower Peninsula have Internet service at their government offices. He said his opposition to Price’s bill isn’t about protecting the print newspaper industry, but rather out of fear that government, left unchecked to post their own notices, could change or hide parts they don’t want the public to see. “If the zoning ordinance changes on the township, city or village website,” Pettalia said, “how many people actually go there on a daily basis or a weekly basis or a monthly basis or even a yearly basis to look at something that may be changed until somebody says, ‘Oh, my God, do you know what’s going on?’ ” An amendment has been attached to Price’s bill that would allow local government leaders to decide on their own whether they want to continue publishing public notices in newspapers, rather than phasing out print entirely. Price said she is supportive of the idea. “When we do things like this, we’ve got to be mindful of the variety of ways government is delivered,” she said. “It falls to the elected officials to know which way is the best way to reach their constituents.” As for the tepid support in the House for her bill last month, she said, “I need to continue to listen to my colleagues and figure out other language that (they) would like to include in the legislation.”

Papers as watchdogs Ensuring government transparency might be the only part of Price’s bill on which newspapers and broadcasters agree. Newspapers believe they have an advantage over TV and radio because they have a permanent record built into their business model, said Lisa McGraw, public affairs manager for the Michigan Press Association. Archived editions of newspapers dating back centuries can still be read on microfilm at public libraries. And newspapers consider them-

NWH Holdings LLC, said Edward Gardiner, director of planning and community development for the city. Asmar did not return calls seeking comment last week. Originally, the property was developed with two restaurants, Gardiner said. One of the restaurant buildings was demolished, and construction of the new hotel is underway. A separate plan for three hotels, also in Farmington Hills, is also taking shape on the site of the former Alexander Hamilton Life Insurance

property near 12 Mile and Farmington roads. The project — which includes a limited-service hotel, full-service hotel with a banquet center and an extended-stay hotel — received approval from the city in June. Developer Group 10 Management Co. Inc. is investing $1.85 million in the construction of the first hotel, a 106-room Courtyard by Marriott, Gardiner said. Group 10 Management could not be reached last week. The full plan also includes a fourstory Homewood Suites by Hilton with

selves government watchdogs, even more so than broadcasters, which is intended to keep government honest. The MPA doesn’t oppose cities and townships from hosting their own public notices, McGraw said. They just shouldn’t be the only source. “People don’t go to local government websites for news. We feel that we’re a better source for this kind of information,” she said. “I just don’t think the broadcasters can do what we do because they can’t provide a print source.” The revenue newspapers gain from government notices is not significant, McGraw said, but it might fund a position, particularly at a smaller daily or weekly publication. Thompson, of the Detroit Legal News, said he publishes Detroit’s public notices. He charges the city about $8 per inch and has dropped the rate several times while the city was going through financial trouble. “We have worked extremely hard to police our own industry,” he said. “Municipalities get our absolute best pricing, and most newspapers do that.” TV and radio stations don’t know what they might charge because they’ve never been able to compete for the business, said White of the broadcasters association. Whether they win contracts would depend on the market, the popularity of their websites compared to other local media outlets and how capable the sites are to host and archive public notices. Broadcast websites are just as capable of storing archived information as newspapers’ sites, White said. Newspapers disagree. “We feel it creates competition, and competition often drives down prices,” White said. “We’re going to have to cross that bridge. We know that we’re going to have to be competitive with what print has.” 䡲 Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

121 rooms and a six-story, full-service Holiday Inn Hotel & Suites with 140 rooms, a banquet center and a restaurant, Gardiner said. Bowers and Associates Inc. in Ann Arbor is architect on the project.

Race to market Roughly five miles to the west of the Farmington sites, near 14 Mile and M-5, a $4 million Marriott TownePlace Suites is under construction in Commerce Township. It will include 72 extended-stay rooms and is going up on the same site as a Hampton Inn also owned by Bacall and Bloomfield Hillsbased Truss Hospitality. Sandiha, one of the developers of the Hampton project, said he thinks the local hotel building boom will continue for the next few years but eventually come to an abrupt stop. That was one of the motivators for starting quickly, said McLeod, the township planner. “They knew these other hotels were coming.” 䡲 Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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Fines expected in FCA’s handling of recalls By Associated Press

WASHINGTON— Fiat Chrysler Automobiles is expected to face penalties from the National Highway Traffic Safety Administration for violating auto safety laws over its handling of some recalls. A top U.S. auto safety regulator accused Fiat Chrysler last week of failing to provide timely and accurate Jeep Liberty and Grand Cherokee recall information to her agency and said that customers also have problems getting accurate information. Jennifer Timian, acting director of NHTSA’s defect investigation of-

fice, made the remarks July 2 to start a public hearing on the company’s recall performance. Issues with the Auburn Hills company, now known as FCA US LLC, are widespread and involve slow response to vehicle defects that have caused deaths and injuries, Timian said. The agency is holding the hearing to listen to evidence that Fiat Chrysler misbehaved on 23 recalls involving more than 11 million vehicles. NHTSA alleges that the company didn’t notify car owners quickly enough, failed to make replacement parts or repairs fast enough, and didn’t file paperwork

on time in numerous instances. The recalls involved problems as serious as rear-mounted gas tanks that can leak and cause fires in a crash, air bags that can explode with too much force and spew shrapnel, and ignition switches that can abruptly shut off, causing engines to stall. Depending on how NHTSA rules, the company could face millions in fines, and it could even be ordered to buy back faulty vehicles, accounting for depreciation. The agency has authority to fine companies up to $35 million per infraction, and could find several infractions in one recall. But

in late June on a road trip to meet with institutional investors in Detroit, New York, Boston, Philadelphia, Chicago and Denver. He said he met with representatives of almost 60 firms. Even so, shares of Horizon fell after the opening of markets Wednesday. When Horizon stock was issued to TriMas shareholders on Tuesday, it was valued at $16.25. It began its first day of trading at $15.05, fell to $13.75 by the end of the day and was back above $14 in early trading Thursday. TriMas (NYSE: TRS) opened Wednesday at $24.99, ended the day at $24.95 and opened Thursday at $25.05. Sherry Lauderback, vice president of investor relations at TriMas, said in an email to Crain’s that share prices for Horizon were expected to be volatile over the first few weeks of trading. Chicago-based Spin-Off Advisors LLC gave Horizon Global stock a “sell” rating. Based on a multiple of 6.2 times Horizon’s EBITDA earnings (earnings before interest, taxes, depreciation and amortization), less a deduction for debt or service payments the new company is expected to make, Spin-Off gave Horizon Global an “implied value” of about $157 million and projected a target price of $9 for Horizon and target for TriMas of $28. But Spin-Off’s founding principal, Joe Cornell, said spinoffs often outperform the market over time. “There are people who bought the parent because they wanted the parent, then suddenly they get a

small-market-cap stock of a com- M&A market with too much money pany that no (analysts) cover, and chasing too few deals, driving up the knee-jerk reaction is often to sell purchase prices. and find a stock they do know a litIn June, another Birminghamtle better,” he said. based investment capital company, “And several of the top holders (of Quarton Partners LLC , said in its TriMas) are money management quarterly report on market condifunds. Some of these investors, be- tions that in the first quarter, midcause of the charter of the fund, might dle-market transactions in the U.S., have a rule that they can’t hold any- those between $10 million and $250 thing with under a $500 million mar- million, hit an average multiple — the ratio of sale price to EBITDA — ket (capitalization) or something.” At the open of markets Thursday, of 8.3, compared to a market low of Horizon Global’s market cap was 5.8 in 2009 and the pre-recession high of 8.2 in 2007. about $250 million. Valenti believes Horizon Global Rudy Hokanson, a managing director at Barrington Research Associ - will escape some of that volatility. ates in Chicago, sets the price target He said it will avoid deals brought at closer to $27 for TriMas by year’s by investment banks that require a end. He doesn’t have a target for bid process, and that its deal flow Horizon Global, but he expects Tri- will largely come from industry Mas to outperform the market as a friends and sources. whole, with Horizon Global moving His targets are generally small with the market. companies that are below the radar Scott Eisenberg, managing part- screens of private equity companer of Birmingham-based Amherst nies, and will generally involve Partners LLC, an investment banking healthy companies where current firm, said Horizon Global should be owners and management would able to bring about operational effi- rather sell at less than top of the ciencies by rolling up small compa- market provided they can remain nies. with the company. “The key is to drive value He said Horizon Global in the integration, where can offer those businesses one and one equals three. capital for expansion, betThere will be operational ter logistics and distribuimprovements you can tion channels, a broad drive through common range of engineering supownership,” he said. port, better marketing and, He praised Valenti’s track perhaps more importantly, record. “Sam has a very solid Scott Eisenberg: access to foreign markets reputation. He understands “The key is to drive where Horizon Global alwhat drives value. He’s very value, where one ready operates or plans to well suited to this,” he said. and one equals enter. In 2012, Valenti was three.” Zeffiro joined TriMas, a given a lifetime achievediversified global manument award at the annual M&A facturer of products for commerawards night hosted by Crain’s and cial, industrial and consumer marthe Detroit chapter of the Associa - kets, as CFO in June 2008 and was tion for Corporate Growth. promoted to executive vice presiEisenberg said Horizon Global dent in May 2013. gains flexibility over private-equity Before that, he was a vice presicompanies by not having to return dent of finance at Black & Decker profits in a fixed-time horizon to Corp. Zeffiro talked to Crain’s while limited partners. But it will have to on his way to the airport Wedneskeep analysts and investors happy day after leaving the exchange floor on a quarterly basis through re- in New York. “It was spectacular seeing anothquired earnings reports, which PE er Michigan company go up on the firms do have to file. And Eisenberg said that while screen. My face hurts from smiling continued near-record-low interest so much,” he said. 䡲 Tom Henderson: (313) 446-0337 rates and the ready availability of Twitter: @TomHenderson2 bank lending make this a good time Chad Halcom: (313) 446-6796 to get deals done, it is also a frothy

it’s unlikely the maximum fine would be assessed on all counts. NHTSA chief Mark Rosekind said he expected the agency to take action against FCA within “days” after the agency’s review closes on July 17. Witnesses also were to present testimony but were not cross-examined. Some were to testify about the recall of 1.56 million older Jeeps for rear-mounted gas tanks that are vulnerable in rear crashes. At least 75 people have died in post-crash fires involving the Jeeps. Automotive News Reporter Ryan Beene contributed to this report.

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

REPORTERS

TRIMAS FROM PAGE 1

brand names as Draw-Tite , Bulldog , Reese, Fulton and Hayman Reese. Horizon Global accounted for just under $612 million of TriMas’ revenue of more than $1.49 billion in 2014. The spinoff company reports 2,800 employees in more than 20 cities around the world. Foreign operations include Canada, Mexico, Brazil, South Africa, Australia, New Zealand, Thailand, Germany, Finland and the United Kingdom. TriMas retains about 4,000 employees in 16 countries and keeps the packaging, aerospace, energy and engineered components segments of the company. Valenti said that while growth won’t be as dramatic as it was when he headed Taylor-based Masco Corp. ’s M&A activities, he will use that as a model for Horizon. When he joined Masco in 1968, it had revenue of about $10 million and a limited product line. It eventually grew to revenue of $12 billion with a vast array of products. “The advantage we have over private equity is we don’t have to sell companies in five years to return money to limited partners. We can keep good companies as long as we want,” said Valenti.

Shares slide To alert institutional investors to Wednesday’s IPO and the follow-on secondary offering, Zeffiro embarked

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: 678 Selden ........................................................ 15 American Plastic Toys ...................................... 3 Amherst Partners ............................................ 17 Berkadia ............................................................ 18 Beztak .................................................................. 1 Business Leaders for Michigan ...................... 10 Chassix Holdings .............................................. 15 CMS Energy ...................................................... 10 Crain’s Detroit Business .................................. 8 Educational Data Systems ............................ 10 Fiat Chrysler Automobiles ..............................117 General Motors .................................................. 9 Group 10 Management .................................. 16 Hayman .............................................................. 1 Horizon Global .................................................... 1 Hotel Investment Services .............................. 3 Magna International ...................................... 15

Marketing Associates ...................................... 8 Michigan Association of Broadcasters ........ 16 Michigan Municipal League ............................ 16 Michigan Press Association............................ 16 National Highway Traffic Safety Admin. ......117 Nykel Management ..........................................118 Nyman Management ........................................ 1 Powell Engineering & Associates ................ 16 Quarton Partners ............................................ 17 Somerset Park Apartments ............................ 1 Sperry Van Ness................................................ 18 Strategic Staffing Solutions .......................... 12 TriMas .................................................................. 1 University of Michigan ....................................111 Valenti Capital .................................................... 1 Vehicles for Change .......................................... 5 Workforce Intelligence Network .................... 11

Jay Greene, senior reporter Covers health care, insurance, energy, utilities and the environment. (313) 446-0325 or jgreene@crain.com Chad Halcom Covers litigation and the defense industry. (313) 446-6796 or chalcom@crain.com Tom Henderson Covers banking, finance, technology and biotechnology. (313) 446-0337 or thenderson@crain.com Kirk Pinho Covers real estate, higher education, Oakland and Macomb counties. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor Covers media, advertising and marketing, the business of sports, and transportation. (313) 446-1626 or bshea@crain.com Lindsay VanHulle, Lansing reporter. (517) 6572204 or lvanhulle@crain.com Dustin Walsh Covers the business of law, auto suppliers, manufacturing and steel. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits, services, retail and hospitality. (313) 446-1694 or swelch@crain.com

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SOMERSET FROM PAGE 1

tion costs could be up to $12,000 per unit. “They definitely could take chunks of certain units of the property, renovate them and get higher rents,” he said. Even with an overall investment cost well over $200 million, a significant upgrade could be worth it, said Robert Pliska, managing director of the Birmingham office of Sperry Van Ness . The complex was first devel-

TOYS FROM PAGE 3

Inc. , currently doesn’t have any licensing agreements but has done one deal in the past. The toymaker produced some of its plastic toys with the licensed image of Clifford the Big Red Dog, made popular by Norman Bridwell’s children’s book series published by Scholastic Books. “The Clifford books were inexpensive, so it was John Gessert: a strategy to proLicense agreements vide lower-ina “necessary evil.” come customers with affordable

oped in the late 1960s. ing rents and low vacan“You can spend money cies, Pliska said. to increase the rents. You Based on that capitalcan take the risk of paying a ization rate and the $200 higher price because hopemillion-plus sale price, the fully you can raise those as complex generates at least you renovate,” he said. $13.5 million per year in The capitalization rate net operating income. — which is used to esti- Robert Pliska: The Solomon Organizamate the rate of return on Upgrade could be tion, which was founded in investment — on the deal worth the risk. 1977 and now manages was probably around 6.5 Somerset Park, owns and percent, because Somerset Park has manages about 13,000 apartments been well maintained, it’s in a prime in New York, New Jersey, Pennsylvalocation and because of overall ris- nia and Connecticut — and now

Michigan with the deal, Solomon said. CoStar has no record of a single Michigan apartment complex selling for $200 million or more this century. The official selling entity was Troy-based Nykel Management Co. complex. There were no brokers on the deal, according to George Nyman, owner of Nykel Management, who added that it was the right environment for selling the complex because of high values. Kevin Dillon, managing director

of the Troy investment sales office of Phoenix-based Berkadia , said the timing on the deal made sense to the sellers. “The owners took advantage of the opportunity to sell with extremely active capital markets and a low interest rate environment, helping support exceptional pricing in today’s marketplace,” he said. “At approximately $90,000 or more per unit, it’s well supported by other transactions in Michigan.” 䡲

toys,” Gessert said. “Those customers were, by and large, buying those books. We can certainly benefit from new licensing agreement relationships with licensors looking to provide a less expensive product for those customers.” Gessert declined to name potential licensors before the deals were signed. Mattel Inc. , the second-largest toymaker in the world by market value behind The Lego Group , declined to discuss licensing agreements. Hasbro Inc. , licensee of “Jurassic World” toys, did not respond to an inquiry about the business. Juli Lennett, senior vice president of U.S. toys for NPD, said that although licensing is a substantial business for many toymakers, it’s

price-sensitive, so we have to be careful not to have a flash-in-the-pan moment because the risk expands exponentially if we start investing in tool and spending more to accommodate licensing agreements.” While dipping a toe back into licensing, American Plastic Toys also seeks to expand offers toward consumer preference, such as alternative sporting goods toys. It manufactures toddler basketball hoops and other sports-related toys but may expand to other areas, such as a kids’ “cornhole” game, for instance, Gessert said. American Plastic Toys is also benefiting from the recent truckers’ strike this year at ports in California. The walkout prevented imports from reaching the U.S. Teamsters union truck drivers

who haul freight from the marine ports of Los Angeles and Long Beach, Calif., went on strike in April. Also this year, a conflict between West Coast dockworkers and shipping companies caused slowdowns from the same ports. Gessert said that because of those port problems, the company is seeing a double-digit increase in volume ordered in the first two quarters of the year. “We were definitely chasing to keep up in the spring,” Gessert said. “While we’re not a branded product, we’re a domestic alternative and because our plastics come from mostly the U.S., we provide retailers an opportunity to increase their profit dollars per square foot with less risk.” 䡲

not an avenue for everyone. “While licensing is very important to the toy industry … it is not critical to the success of every toy company,” Lennett wrote in an email to Crain’s. “There are many examples of toy companies who are thriving with very little or no licensing at all as part of their toy portfolio.” Lennett said companies such as Chicago-based Radio Flyer and Australia’s Moose Enterprises PTY Ltd., for example, perform well without the benefit of licensing agreements. Gessert doesn’t anticipate licensed products dominating the lineup of American Plastic Toys. The company doesn’t want to overextend itself and lose its core competencies chasing license agreements, he said. “We’re looking at it as a necessary evil,” Gessert said. “Our products are

Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 6 , 2 0 1 5

WEEK

ON THE WEB JUNE 29-JULY 2

State Senate OKs $1.5B road plan with tax hike

Detroit Digits

The Republican-led Senate on approved a $1.5 billion plan to improve deteriorating Michigan roads by raising fuel taxes and redirecting money from elsewhere in the budget. Lt. Gov. Brian Calley broke a 1919 tie on a key bill that would bring the 15-cents-a-gallon state diesel tax in line with the 19-cent gasoline tax, boost both to 34 cents by 2017 and provide for future increases pegged to inflation.

Number of servers inside the new Quicken Loans Inc. Technology Center, which opened at 1401 Rosa Parks Blvd. in Detroit’s Corktown. The 66,000-squarefoot center will serve as the IT control center for the Detroitbased company.

ON THE MOVE 䡲 Pontiac-based nonprofit Lighthouse of Oakland County Inc. named retired United Way veteran Rick David as CEO, replacing interim Lisa Machesky. David, 69, retired in 2010 after a 36-year career with United Way locally and elsewhere.

COMPANY NEWS 䡲 The Detroit-based Community Foundation for Southeast Michigan approved $26 million in funding for organizations, among them the Detroit Symphony Orchestra, the Dearborn-based Arab

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

400

$4.6M

Investment round led by Ann Arbor-based Michigan eLab LLC. The money was pumped into Grand Rapids-based Blue Medora LLC, which manages cloud-based data systems. Blue Medora has raised a total of $6 million to build its engineering, sales and marketing teams.

109

The number of square feet of a model of The District Detroit that is on display inside a new preview center at Comerica Park. The center is designed to give potential investors a look at the entertainment district and new Detroit Red Wings arena.

Community Center for Economic and Social Services, and — for design-

ing the interpretive content for the new Polk Penguin Conservation Center — the Detroit Zoo. 䡲 Southfield-based Vesco Oil Corp., a distributor of automotive and industrial lubricants, acquired Wauseon, Ohio-based fuels and chemicals distributor Britsch Inc. Terms were not disclosed. 䡲 Florida-based Spirit Airlines Inc. is planning to invest more than $31 million at Detroit Metropolitan Airport by building a 126,000-square-foot commercial airline maintenance hangar at the airport in Romulus. 䡲 The Cuban Chamber of Commerce opened its first Michigan office, in Troy. The chamber also has offices in Washington, D.C., and Miami; the Troy office will be its headquarters. 䡲 Turning Point began an emergency campaign to raise $25,000 to help offset the costs of providing off-site shelter for its clients after a fire at its Mt. Clemens site for battered women and children. 䡲 Auburn Hills-based TI Automotive Ltd. announced that its sale to private equity firm Bain Capital LLC has been completed. Terms were not disclosed. 䡲 Shares of Gannett Co., owner of the Detroit Free Press, fell by 5.2 percent on the New York Stock Exchange after the McLean, Va., company completed a spinoff of its broadcasting and digital businesses into the new Tegna Inc.

OTHER NEWS 䡲 The state’s Local Emergency Financial Assistance Loan Board announced that probable financial stress exists in Wayne County, the Associated Press reported. Michigan law requires Gov. Rick Snyder to appoint a review team to look

into the county’s finances and $52 million structural deficit. 䡲 The Continental Rail Gateway, a $400 million effort to build a new rail tunnel underneath the Detroit River, was put on hold. Primary financial backers Toronto-based Borealis Infrastructure Management Inc. and Calgary, Alberta-based Canadian Pacific Railway Ltd. blamed the “business case and economics.” 䡲 The Ren Cen 4 movie theater, in the 200 Tower at the GM Renaissance Center in downtown Detroit, closed after nearly 30 years of operation. 䡲 A new bridge connecting the Edsel & Eleanor Ford House to nearby Bird Island is set to open this week, part of more than $2 million in projects completed or launched at the Grosse Pointe Shores estate this year. 䡲 Gov. Rick Snyder signed a law prohibiting Michigan municipalities from requiring businesses to pay wages, benefits or provide sick days exceeding state or federal requirements, AP reported.

OBITUARIES 䡲 Arthur Porter, M.D., former CEO of the Detroit Medical Center and later charged in one of the largest corruption and fraud investigations in Canadian history, died June 30 of lung cancer while in custody in Panama. He was 59. 䡲 Art Moran, founder and longtime owner of Art Moran PontiacGMC Mitsubishi in Southfield, died July 1. He was 89. 䡲 Leon Atchison, the longestserving member of Wayne State University’s board of governors, died June 22. Atchison, who completed his last term in 2002 after 32 years of service, was 87.

RUMBLINGS Southeast Michigan loses three weekly newspapers hree Southeast Michigan weekly newspapers have reached their final paragraphs. The Romeo Observer, Washtenaw Now and the Ile Camera in Grosse Ile all have ceased publication. The Observer made its announcement June 24, while Washtenaw Now and the Ile Camera made announcements June 26. The Observer’s announcement lists the rise of the Internet, declining circulation and a “diminished number of readers, particularly young readers,” as reasons for the closing. The paper was owned by longtime Editor and Publisher Melvin Bleich, who purchased it in 1959. New York City-based Digital First Media owns Washtenaw Now and Ile Camera. Jeannie Parent, Digital First Media’s local publisher, announced the end of Washtenaw Now and Ile Camera in statements posted online.

Gala to support Grand Circus Park improvements The Grand Circus Gala, a fundraiser to support programming and improvements such as landscaping and streetscaping at Grand Circus Park, will be held from 6-10 p.m. July 16 and include food and live music. The event, hosted by the Detroit Entertainment District Association, features a free pre-party with entertainment and a cash bar. Tickets are $75 and $150. For more information, see

The five-acre park was established in 1850.

Italian journalist finds warmth in the D Francesca Berardi grew up in Turin, Italy’s “motor city.” But she freely admits she learned more about autos — and the heart of Detroit — in a series of visits to the American auto capital as a visiting journalist than she ever did about the Italian industry. She and her new book, Detour in Detroit, ($25, Humboldt Books), will be Turin to Detroit: celebrated Book launch planned Tuesday at a natural Detroit venue: Chrysler House in downtown Detroit. Gualberto Ranieri, FiatChrysler’s senior vice president for communications, befriended Berardi and is introducing her and the book to local media and Detroit boosters. In her series of visits, accompanied by photographer/artist Antonio Rovaldi, Berardi managed to meet dozens of Detroiters whose stories form the basis of her introduction to the city. “I did not expect such an out of the ordinary, extraordinary place,” Berardi told Crain’s. “The landscape is so different, so special. I had heard a lot about how dangerous Detroit was, but I found a lot of warmth.”

grandcircusgala.com.

Swim with the dolphins in plan-and-pitch competition

AARON ECKELS

Celebrating 20 in their 20s Crain’s inducted its 10th class of 20 in their 20s last week at a gathering at HopCat Detroit. Back row from left: Rishie Modi,Kelly PerezVergara,Shannon Smith,Marc Hudson,Rachel Klegon,Elisabeth D’Arcy,Garret Koehler,Niles Heron,Adam Hollier,Noam Kimelman,Denise Sampson,Reda Jaber and DeAnte Thompkins.Front row from left: Max Schmidt,Alison Piech,Katy Cockrel,David Anderson,Nailah Ellis-Brown and Sheri Gordon.Not pictured: Zack Sklar.Read their stories at crainsdetroit.com/20s

The Michigan Women’s Foundation is accepting applications for its Entrepreneur You Business Plan and Pitch Competition. This year, competitors will participate in what is being billed as a “Dolphin Tank” competition — a gentler version of “Shark Tank” — that will serve as practice for the main event. Separate competitions will be held for the Southeast Michigan and Grand Rapids areas. They are open to any stage company in any industry. Women must be majority owners or the chief executive. The final prize structure is not final, but organizers hope to give $140,000 in cash and in-kind services between the two contests. Winners will be selected Oct. 9 at Walsh College in Troy and Oct. 16 at Grand Valley State University in Grand Rapids. Applications can be submitted at miwf.fluidreview.com through July 13. A processing fee of $10 is required.

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