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CRAIN’S Readers first for 30 Years
DETROIT BUSINESS
Tiresome wait: Uniroyal site plans only a vision after three decades
Aircraft museum plans to fly higher with move to Oakland County
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AUGUST 17-23, 2015
Clean energy expected to power up more jobs But some say more rules, higher costs will result in net loss By Jay Greene jgreene@crain.com
The wind and solar energy industries in Michigan are expected to continue steady growth and add hundreds of jobs over the next decade — regardless of what state legislators and Gov. Rick Snyder come up with in a final energy bill package this year. That’s one belief shared by executives of utilities, renewable energy companies, and of environmental groups alike. Part of the optimism comes from a regulatory announcement earlier this month by the U.S. Envi ronmental Protection Agency , which issued final rules governing carbon dioxide emissions from power plants. The EPA’s Clean Power Plan requires states to reduce CO2 emissions 32 percent over the next 15
years from the baseline year of 2005. Michigan produced 188 metric tons of CO2 in 2005. By 2013, carbon emissions dropped to 70 tons with the EPA goal set at 47.5 tons in 2030. Energy experts say Michigan is in a good position to meet the emission reduction rules by developing more renewable energy resources, continuing efficiency programs — and by moving from coal to gas-fired plants. These green energy rules eventually lead to green energy jobs; in February, a Michigan Public Service Commission report said $2.9 billion of investments in renewable energy during the past five years created 8,300 jobs in Michigan. By 2020, energy jobs are expected to grow another 7.1 percent, the PSC report said. SEE JOBS, PAGE 20
Free Press future: Lean, digital New editor’s challenge: Quality journalism amid falling revenue By Bill Shea bshea@crain.com
Health Care Heroes From medical professionals on the front lines of care to teams working on prevention and cost-planning, Crain’s crop of 2015 Health Care Heroes demonstrates innovation and compassion. Page 11 © Entire contents copyright 2015 by Crain Communications Inc. All rights reserved.
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The Detroit Free Press that Robert Huschka took over as executive editor last week is a significantly different newspaper than the one his predecessor was hired to run a decade before. The newspaper is smaller, both physically and with fewer employees, and it operates out of a single floor of leased space in the former Federal Reserve Building downRobert Huschka: town rather than The 43-year-old has its old sprawling, design background. costly structure. Its circulation also has fallen by more than half in that time, and home delivery is limited to three days a week. But the Free Press has staked out significant territory online, claiming more than 10 million readers a month to make it one of the biggest-readership newspapers in the nation in the ever-expanding digital landscape.
The newspaper’s journalism trophy case also has impressive additions from the past decade: a pair of Pulitzer Prizes, two Edward R. Murrow awards and four Emmy awards. That happened under Paul Anger, who retired in May after a tenure that also included layoffs, furloughs and benefit and wage cuts or freezes — symptoms of the overall decline of the newspaper industry. In 2009, Anger also had to orchestrate the newspaper’s costsavings transition from a traditional daily home-delivered product to a hybrid print-digital product. It’s now Huschka’s job as executive editor to ensure the Free Press continues its history of awardwinning watchdog journalism while con-
fronting the stark realities of the 21st century newspaper business. While the online numbers at the Free Press are impressive, digital advertising revenue continues to lag a distant second behind the print advertising dollars that remain the financial lifeblood of legacy print media. Huschka, 43, was hired to run Michigan’s largest news-gathering organization from a design desk background rather than coming from the reporting ranks. He was Anger’s No. 2 for a time and interim editor after he left. His résumé includes involvement SEE FREE PRESS, PAGE 19 PHOTO BY NATALIE BRODA
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MICHIGAN
BRIEFS Language quirk of extra ‘s’ isn’t Michigan’s to possess
Gas hike: Market at work … or worthy of investigation
Those who persist in saying “Meijer’s” instead of “Meijer” or “Ford’s” rather than “Ford” may be comforted to know that such pronunciation isn’t just a Michigan thing. Many in the state like to add that possessive “s” to a store or company’s name, and believe “that this is part of the Michigan dialect,” said University of Michigan English professor Anne Curzan at MichiganRadio.org. Curzan co-hosts “That’s What They Say” weekly on Michigan Radio. But Curzan said she’s heard the possessive “s” used in other states, too, and she can explain its frequency here. “The website michigannative.com says this goes back to ‘Ford’s,’ ” she said. People in Michigan referred to the Ford Motor Co. as “Ford’s Factory,” since it was owned by Henry Ford. Curzan said adding the possessive is a trend also encouraged by the number of companies that do incorporate it in their name. Notable examples: Trader Joe’s, McDonald’s, Wendy’s and Macy’s. No doubts about it.
Gasoline prices have jumped across the Great Lakes region because of the unexpected, partial shutdown of a large Indiana oil refinery, and those increases could continue, oil and gas industry watchers said last week to The Associated Press, Bloomberg and MLive.com. The average retail price for a gallon of gas in the state was $2.80 on Aug. 13, up 22 cents from the day before, according to Dearbornbased AAA Michigan . Rep. Michael Webber, R-Rochester Hills, and Sen. John Proos, R-St. Joseph, called for a probe by Attorney General Bill Schuette. “We cannot allow the hard-working people of Southwest Michigan to be taken advantage of by artificially high gas prices,” Proos said in a statement. The gas prices have been tied to a malfunction of a crude distillation unit at a BP refinery. Patrick DeHaan, senior petroleum analyst for GasBuddy.com, dismissed the recent hike as a “speed bump — albeit a large speed bump” on the road to lower prices. “I still expect gas prices
to come down ... and, as we approach Christmas, could still knock on the door of $2 a gallon,” he said.
MICH-CELLANEOUS 䡲 Grand Rapids-based Family Christian Stores will be sold debt-free to a related entity, Family Christian Acquisitions, for between $52.4 million and $55.7 million, MLive.com reported. A federal judge approved the Chapter 11 bankruptcy sale last week. The chain claimed debts of more than $127 million and assets of nearly $75 million. 䡲 In the wake of severe weather in northern Michigan — the economic toll of which was chronicled in a Crain’s story last week — Gov. Rick Snyder declared a state of disaster for Grand Traverse County, making state aid available to help with recovery from the damaging thunderstorms, The Associated Press reported. Authorities said they had reopened parts of Sleeping Bear Dunes National Lakeshore, the popular tourist area at which trees were uprooted and debris scattered across the scenic landscape during the Aug. 2 storm. 䡲 State public colleges and universities are on the hook for millions of dollars each year because the Michigan Indian Tuition Waiver program, which provides free tuition to Native American students, isn’t fully funded, The Associated Press reported. University officials and Native American leaders want lawmakers to fully fund the program, which has survived attempts
in the Legislature to abolish it since it was enacted in 1976. The program’s roots date to 1934, when Native Americans agreed to shut down a boarding school in Mount Pleasant so Central Michigan University could expand. 䡲 Strong demand has led lowcost carrier Allegiant Air to resume nonstop flights between Gerald R. Ford International Airport in Grand Rapids and Punta Gorda Airport near Fort Myers, Fla., effective Nov. 4, the Grand Rapids Business Journal reported. 䡲 Traverse City’s Cherry Capital Airport is getting nearly $1.5 million in federal funding to help construct a taxiway and fix its runway, The Associated Press reported. The grant through the U.S. Department of Transportation also will help the airport install additional markings to help prevent accidents. 䡲 Munson Medical Center in Traverse City has joined the network of hospitals and institutions created by Mary Free Bed Rehabilitation Hospital in Grand Rapids. Mary Free Bed will manage Munson’s 12-bed inpatient rehab unit, the hospital-wide therapy program and several outpatient therapy services in Traverse City. The two hospitals have worked together for years to coordinate care for those in need of intensive inpatient rehab. 䡲 The Eagle Mine asked the Michigan Department of Natural Resources to let it lease 40 additional acres of state land near its existing mine in Marquette County to explore more mining possibilities, The Mining
INSIDE THIS ISSUE BANKRUPTCIES . . . . . . . . . . . . . . . . . 20 BUSINESS DIARY . . . . . . . . . . . . . . . . 18 CALENDAR . . . . . . . . . . . . . . . . . . . . . . . 17 CAPITOL BRIEFINGS . . . . . . . . . . . . . . 9 CLASSIFIED ADS . . . . . . . . . . . . . . . . 17 MARY KRAMER . . . . . . . . . . . . . . . . . . . 8 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 8 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . . 17 RUMBLINGS . . . . . . . . . . . . . . . . . . . . 22 WEEK ON THE WEB . . . . . . . . . . . . . . 22
COMPANY INDEX: SEE PAGE 21 Journal of Marquette reported. An environmental group, Save the Wild U.P., said the parcel is part of a sensitive wetlands complex and wants the DNR to reject the lease. 䡲 Plans for the city of Port Huron to separate from the Port Huron Museum are on hold, the Times Herald reported. A plan to pull funding was announced last fall with other city budget cuts. City Manager James Freed said the city contributes between $50,000 and $80,000 annually to the museum. He said the goal to cut most, if not all, of the city support will take time and consideration. 䡲 Repairs to a key Great Lakes shipping lock in Sault Ste. Marie are taking longer than expected, MLive.com reported. The U.S. Army Corps of Engineers revised its projected reopening date for the MacArthur Lock to Aug. 19. The lock was drained after closing July 29 because of a faulty gate mechanism. 䡲
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BY THE NUMBERS: THE MICHIGAN ECONOMY
State’s golf economy back on course By Ryan Felton Special to Crain’s Detroit Business
Despite its long winter season and a devastating economic collapse during the Great Recession, Michigan is a top state for golfers. In 2000, 565 million rounds of golf were played across the nation, with Michigan accounting for a significant portion, one study found, as tourists flocked to its 951 public and private courses. The tally of the public courses alone was 799 that year. But by the mid-2000s, as the auto industry slid into a steep decline, the state’s golf industry fell in tandem, said Kevin Frisch, CEO of Gaylord-based Fusion Media Strategies, a golf and travel marketing firm. By 2006, more than 110 courses shuttered, according to a separate study. Over the past several years, however, the industry has slowly reclaimed lost ground. Frisch said that can be attributed to a combination of factors, including the rebound of the local economy. A recent change locally was the purchase last week of the Maple Lane Golf Club in Sterling Heights by Auburn Hills-based residential developer Moceri Cos. In the graphic below, average rounds played per course is up, year-over-year, and three new courses are under construction. While a deep-dive study on the industry’s economic impact hasn’t been conducted since 2006, industry observers say the mainstay findings hold true: Golf supports about 57,000 jobs in the state and contributes $4.2 billion to the economy.
COSTAR GROUP INC.
If M1T buys the former Hyatt Regency,it plans to bring back Atmosphere Hospitality to manage the property.
M1T makes new bid to buy former Hyatt Current owner says thanks but no thanks; even so, hedge fund plans to persist By Sherri Welch swelch@crain.com
M1T Capital Partners is hoping the second time is a charm in its bid to acquire the former Dearborn Hyatt Regency.
The New York City-based hedge fund, which backed a failed joint effort with Atmosphere Hospitality Management LLC to buy the 772room hotel and conference center over the past couple of years, last week submitted a formal bid of its own to acquire it. If successful, M1T plans to bring back Highlands Ranch, Colo.-based Atmosphere Hospitality to manage the property — now operating as the Royal Dearborn Hotel & Confer ence Center — said Anthony Gude, co-executive director of M1T. “Detroit is our generation’s chance,” said Gude, 30, who leads the firm with co-Executive Director Steven Schlamann, 29. “I want to help rebuild things. When I see certain things (in metro Detroit), it reminds me of what my father (also an investor) used to talk about ... when old guys saved New
MUST READS OF THE WEEK Capitol Briefings
Q&A with Dave Egner, Jim Boyle
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Melissa Gilbert’s name should help her bid for Congress, but she still faces an uphill battle, writes Lansing reporter Lindsay VanHulle. Page 9
The New Economy Initiative, in its seventh year, has awarded $88 million in grants to Detroitarea companies. Read what top executives have planned for the future. Page 7
New restaurant with 250 vintages and 43 wines by the glass to open in The Ashley in October.
Gilbert
Crainsdetroit.com
York in the 1980s,” Gude said. Gude’s father, Anthony Gude Sr., sold his automotive parts distribution business, Ramp Auto Parts , to Pep Boys years ago, his son said, and went on to become an active investor in multifamily, hotel and resort projects in New York and New Jersey. Gude said, though, that investments in M1T came from friends and other family members, not his late father. Gude said his immediate family lived well below their means, although he did not know that at the time. His father, instead, insisted on hard work and encouraged Gude to find something he could build from the ground up. “Since I thought we were poor, I went ahead and focused on school instead,” Gude said in an email, getting a bachelor’s degree in engineering, M.S. and MBA from the Stevens Institute of Technology in New Jersey. Even as it bids on the Dearborn hotel, M1T said it is negotiating to become an investor in the renovaSEE HOTEL, PAGE 21
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LOOKING BACK: In an article in the Aug. 19, 1985, Crain’s edition, officials projected the site of the former Uniroyal Tire Co. and a MichCon coal-gasification plant would be cleared by the end of that year. Thirty years later, that hasn’t happened, but there is still hope for redevelopment. More at crainsdetroit.com/30
Vision for Uniroyal site connects people, river By Kirk Pinho kpinho@crain.com
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It was shortly after flying over industrial wasteland in a 1986 tour that Donald Trump decided a redevelopment of the former Uniroyal Tire Co. factory site was not in his future. Circumstances have changed since then for Trump, now a GOP presidential candidate, and the site across from Belle Isle nestled between Gabriel Richard and Mt. Elliott parks. Yet it will still be a long slog to redevelopment, even after remediation of its 15-acre westernmost parcel was declared completed by the state in July 2014 after more than 700,000 tons of dirt and other materials were removed. The city and developers have long envisioned the three-parcel property — which from 1941-1978 was home to a Uniroyal tire manufacturing plant and a Michigan Con solidated Gas Co. coal-gasification plant — as ripe for development with as many as 2,000 residential units plus office and retail. The land, according to an Aug. 19, 1985, Crain’s story, was expected to be cleared and ready for development by the end of that year. So much for that time frame. With 28 acres divided between two parcels yet to be cleared of the waste produced over more than 100 years of industrial use, it will be years before the entire property is redeveloped. The three-decade lag is the result of economic conditions as well as substantial cleanup costs, said George Jackson, the former president and CEO of the Detroit Economic Growth Corp. who last year founded Ventra LLC , a consulting and development company in Detroit. “We knew this would be long term,” said Jackson, who headed the DEGC for 12 years and worked on the Uniroyal site development until stepping down last year. Remediation of just the western parcel alone cost Detroit-based DTE Energy Co. , which now owns MichCon; E.I. du Pont de Nemours & Co. ; and Michelin USA Inc. around $35 million, said Robert Lee, manager of DTE’s environmental management and resources department. The cleanup, which began in September 2011, involved 150 workers and resulted in the installation of a 740-foot-long seawall going 115 feet deep — “probably twice the depth of the Detroit River,” Lee said. “This was probably one of (the
biggest), if not the biggest, environmental cleanups in the city of Detroit’s history.” The Michigan Department of Envi ronmental Quality assigned the cleanup cost to DTE, Michelin, DuPont and London-based Enodis plc in 2006. Steven Hoin, senior geologist in the DEQ’s remediation and redevelopment division, said cleanup costs are expected to be substantially less for the remaining two parcels. So now it’s up to Pittsburghbased C.J. Betters Enterprise, which is affiliated with the city-chosen developer Bettis/Betters Development LLC, to oversee the planned redevelopment, which at the time had an expected price tag of $500 million. John Roach, the city’s communications director, said a timetable for redevelopment hasn’t been set and that details and timing of the remaining remediation “are progressing, but have not been finalized.” Among the Bettis/Betters investors is Jerome Bettis, the Detroit native and running back for the Pittsburgh Steelers until he retired in 2005, the year after Bettis/Betters was awarded the redevelopment contract. Requests for interviews with a Bettis/Betters representative were not responded to. The city bought the land from Uniroyal in 1981 for $5 million and spent another $3.6 million razing structures and clearing the site. Whatever development happens with the site should connect to the Detroit River, said Mark Wallace, president and CEO of the Detroit Riverfront Conservancy and a former director at Hines Interests LP. “It will be successful if it does a great job of connecting people to the water and does a great job of building an authentic sense of
The cost of cleanup Parcel 1 Responsible for cleanup costs: DTE Energy Co.; E.I. du Pont de Nemours & Co.; Michelin USA Inc. Cost: $35 million Cleanup status: September 2011July 2014. Complete. Size: 15 acres
Parcel 2 Responsible for cleanup costs:
Michelin Cost: Under $6 million Cleanup time frame: To be
determined Size: 17 acres
Parcel 3 Responsible for cleanup costs: Enodis plc Cost: To be determined, but “low” Cleanup time frame: To be
determined Size: 11 acres Source: Steve Hoin, senior geologist, Michigan Department of Environmental Quality
place,” he said. “Typically that means high-quality architecture, a mixture of uses and a diversity of product type.” The conservancy envisions that the estimated $140 million Detroit RiverWalk project will eventually stretch five and a half miles southwest from Gabriel Richard Park to the Ambassador Bridge. Roach said construction of the segment between Mt. Elliott and Gabriel Richard parks will start soon after remediation is complete. 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB
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Arch Global rounds up $96M, to acquire 3 companies By Dustin Walsh dwalsh@crain.com
Arch Global Precision LLC this week completed a $96 million investment round as it prepares to close on three new acquisitions by the year’s end. The Livonia-based machined aluminum component supplier plans to diversify its customer profile with acquisitions in California, Arizona and Alabama, said Eli Crotzer, president and CEO. All three businesses perform high-precision machining for the space exploration, commercial aerospace and military industries.
Customers include Elon Musk’s Space X (Space Exploration Technologies Corp.), Boeing Co. and the U.S. military, Crotzer said. Arch Global has signed letters of intent with the three businesses and plans to close by year’s end for a total of more than $20 million, Crotzer said. The new businesses are projected to add an additional $30 million in revenue. Arch Global, which has 480 employees, saw its 2014 revenue of $88.7 million rise from $48 million in 2012. Arch projects revenue of $124 million this year. Crotzer said the plan is to reach
$300 million in revenue in the next three years. The company is looking to reduce its reliance on the automotive industry from a third of Eli Crotzer: ”A lot its business to of (revenue gain) less than a quarwill be from organic ter. growth ... and more “A lot of (the acquisitions.” revenue gains) will be from organic growth with existing and new customers, but obviously some of it
will come from more acquisitions,” Crotzer said. Since January 2014, Arch Global has made five acquisitions: UltraDex Tooling Systems , Voisard Tool , P r o f e s s i o n a l M a c h i n e I n c . , Jasco Tools Inc. and Valley Machine. Arch Global operates 10 locations, three of which are in Michigan. Its customers include General Motors Co., Cass City-based Millenni um Industries LLC, General Electric Co., Titan Tool Inc. and others. Arch Global was formed in December 2011 after Birminghambased private equity firm Strength Capital Partners LLC acquired three
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businesses from TriMas Corp. in a $38.6 million asset purchase. The $96 million funding round comes from Strength Capital and new investors. Some of the additional funds from the round will provide returns to some of its original investors. Previous investors to Arch received a 5.6-times return on the deal over the past 3½ years. Strength Capital continues to be the largest investor. The new investors include insurance companies, university endowments and other high-net-worth investors, Steve LaBarre, partner for Strength Capital, said in an email to Crain’s. Strength Capital was the winner of the Crain’s M&A Awards for deals under $100 million in 2012 for its formation of Arch. Don Piper, Arch’s CFO, was a finalist in the 2015 Crain’s CFO of the Year Awards. 䡲 Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh
Deadline nears to enter Crain’s Best Managed Nonprofit Contest 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. 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 www.crainsdetroit.com/nonprofitco ntest. For information about the contest itself, email Executive Editor Cindy Goodaker at cgoodaker@crain.com or call (313) 446-0460.
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Q&A: DAVID EGNER, JIM BOYLE, NEW ECONOMY INITIATIVE
NEI works to make sure its network survives The Detroit-based New Economy Initiative is in its seventh year. Its role is to fund the nonprofit organizations that support entrepreneurship, small-business growth and innovation for both grassroots and high-growth companies. Crain’s Detroit Business contributor Marti Benedetti interviewed NEI Executive Director David Egner and Jim Boyle , NEI senior program officer, for an update on the NEI, which by the end of 2014 awarded almost $88 million in grants to Detroit area companies. This is an edited version of that conversation. How healthy is job growth through entrepreneurship in our region?
Job growth potential won’t come from startups in the next 10 years. It will come from existing companies that will really blow it out. Endeavor (a New York-based nonprofit with a Detroit office that offers various services to companies on the brink of rapid growth) was brought here to do that. They don’t care if it is hightech or food as long as it has highgrowth potential. McClure’s Pickles and Algal Scientific are two examples that are getting access to Endeavor’s expertise and mentors. (These companies were chosen to be Endeavor Entrepreneurs Aug. 8, giving them access to business mentors and volunteers from Fortune 500 consulting firms to spark rapid growth.) What are some small but significant companies you have seen blossom as a result of your funders?
Success stories include Ron Waters, owner of screen printing business One Custom City on the city’s west side; Functional Fluidics, created by Dr. Patrick Hines, who invented micro-fluidic devices to help physicians assess which drugs to use to treat patients when clotting is a concern — particularly AfricanAmericans with sickle cell anemia; Ellis Island Tropical Tea, a bottled tea production-distribution company; Floyd Design LLC , a company that makes table legs and clamps that can transform an old door or plank into a table; and high-growth companies such as McClure’s and Algal. The food sector in Detroit is really robust. Numbers crunched by Jonathan Silberman, a professor at the Oakland University School of Business, show the Detroit area ranking dead last among the country’s 15 largest metros when it comes to startups. (See July 26 Crain’s story.) How can that be ?
Those measurements are blunt instruments because they are attached to venture capital money. VC money is not an indication of entrepreneurial activity; it is an indication of high-tech activity. It’s the
David Egner
Jim Boyle
wrong metric. We think the right metric is measuring the network itself and its connectivity. We know in 2008 there were five “on-ramps” for new business; now there are dozens of on-ramps. We are trying to find the right metrics and the right impact studies and finding the metrics that measure entrepreneurial outputs accurately. In April, 1,400-plus businesses had been started by clients of NEI grantees. The number of people asking for help and potentially getting services is a telling number. We could fill Michigan Stadium and still have 30,000 people in the parking lot. That’s how many people have asked for help since 2009. Detroit has epicenters of entrepre neurship such as Midtown and Cork town. Where are the next big hubs?
Well, Midtown encompasses six neighborhoods, including New Center, so it is larger than people realize. We are seeing the development of micro-markets across the city such as West Village. Expect to see more business in GrandmontRosedale, Southwest Detroit’s Hubbard Farms and Clark Park, further east in the Jefferson Chalmers neighborhood — although that’s a ways off, and Livernois and Seven Mile Road. What’s missing with Livernois is a strong community development corporation. Do people understand your organi zation?
Entrepreneurs have no idea what we are. We’re a funding organization. When we think about our transition (of ceasing to exist), we think about how to make sure this network survives as a network. … what does it look like moving forward? We’re starting to have that discussion. Do we need to promote the system? When we go away, we want to make sure people understand the system, so we are trying to explain the system’s message as much as possible. There are so many nuances. It’s like explaining cold fusion. What would you like to change about NEI’s mission?
To some degree, we’re still elephant hunting. We are looking for a big attraction, a big manufacturer, but that hasn’t worked in a couple of decades. It’s been done in the south
and it’s been done at an enormous tax cost. It has not raised the prosperity level in those areas much. Our corporate leadership is looking at economic development, and it needs a new model. So, if there is anything I could change, it would be accelerating that. The next great opportunities for this region will come from this work — not from hunting the next factory. What is the amount of funding your organization has received since incep tion?
In 2007, $100 million was raised, and we got it when we started the NEI in 2008. In 2014, we recapitalized and got $35 million more for a total of $135 million. At the end of 2014, we had spent $87 million of the total on grants and investments. This leaves out our administrative costs. What will be the focus for spending moving forward?
A sustaining innovation network — in other words, what are the innovation organizations that are trying to get new product to commercial distribution; neighborhoods; and making sure we are truly serving grassroots to high-growth companies while being inclusive at all levels. (There are) spaces and neighborhoods where we will make announcements in the next 30 days. And a third piece — stimulus and storytelling. This is where we stimulate activity by using contests and storytelling such as the Accelerate Michigan Innovation Competition. After tapping organizations for the Grand Bargain, is it a challenge now to approach them for additional funding? The
Grand Bargain has not decreased available philanthropic money, it has increased it. I don’t have empirical data to show that, but what you have is funders of the Grand Bargain — take the Hudson Webber Foundation (which Egner heads) — on a percentage basis, we were a very large contributor to the Grand Bargain. We put in $10 million over 20 years. We have $180 million in net assets, so that half million a year came out of a $7.5 million to $8 million charitable contribution. Some might say, “That’s a half million you can’t put elsewhere.” But, coming out of bankruptcy, the attention in Detroit is on new corporate dollars. New philanthropic dollars far outpace anything else. We’ve attracted more investor interest...There are more investors here than we’ve seen in my 18 years at Hudson Webber. Post-bankruptcy Detroit is far more attractive to invest in, and you have clear paths of what you want to accomplish now that you didn’t have before. So there’s more money in the system — not less.
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CRAIN’S
For our money, it’s Jackson OPINION who deserves to be ousted DETROIT BUSINESS
Time’s up: Uniroyal cleanup is overdue I
t’s amazing how long some things can drag out. The Uniroyal site on the Detroit riverfront by Belle Isle is perhaps Exhibit A in what can happen when bureaucracy, cost and inertia combine. (And also a reminder of why it’s better not to pollute in the first place.) As Kirk Pinho reports on Page 4 in the “Looking Back” feature updating stories from 30 years ago, city officials projected in August 1985 that the site would be cleared by the end of the year. That didn’t happen. In fact, the first piece of the site did not get fully WSU WALTHER REUTHER LIBRARY COLLECTION remediated until last The Uniroyal site in 1930. summer. Cleanup is just starting on a second portion and nothing has happened yet on a third. There are a lot of reasons. Establishing financial responsibility for the cleanup took time. Market demand to redevelop the site wasn’t there, affected at times by the economy and in general by the city’s reputation. Taking a back seat to more immediate city issues is likely another. But it’s time to move forward as quickly as possible. The site is in a prime location overlooking Belle Isle. A key piece of the RiverWalk can’t be completed until the cleanup is done. And really, 30 years is plenty long enough. City officials need to do their best to kick this cleanup into overdrive.
Boards slow to appoint women Delphi Automotive plc expanded its board by one this week, which ordinarily wouldn’t be a matter for comment. But it is, because the appointment is a woman — Bethany Mayer, president and CEO of California-based telecommunications firm Ixia. Delphi’s other 12 board members are men. This is not the first female board member Delphi has had, and we’re not intending to single out the company. But it’s an opportunity to point out the glacial progress that has taken place in recruiting qualified women to publicly traded company boards. The Inforum Center for Leadership, which publishes biennial studies on the topic, reported in 2003 that women executives held 9.6 percent of the board seats of Michigan’s largest 100 public companies. In 2013, the most recent report, women held 11.5 percent of the board seats of the top 100. That’s not moving the needle very far. The candidates are out there. Mayer, for example, although in the CEO ranks for less than a year, has a quarter century of big-company technology experience. That’s relevant board experience. Companies can, and should, cast their nets wider.
ouldn’t you know it? Just as
WAlexander Hamilton is com-
ing back into vogue (the hit musical “Hamilton” is packing them in on Broadway), he’s losing his spot on the $10 bill. Or will lose it — in about five years. U.S. Treasury Secretary Jack Lew announced in June that a historic American woman will take Hamilton’s place in 2020 — which is the centennial of the 19th Amendment that gave women the right to vote. Entrepreneur Andra Rush likes the idea of seeing an important American woman on paper money, but even more important is getting Andrew Jackson off the $20 bill. Rush founded three companies — one trucking and two manufacturing — in metro Detroit. Her Native American heritage is through her grandmother, a member of the St. Regis tribe within the Mohawk nation, with roots in New York state and Ontario. When the dust-up over the name of the Washington Redskins football team started picking up steam a couple of years ago, it was Rush who
MARY KRAMER: Publisher told me that many Native Americans were more incensed about Jackson’s visage than mascot and team names. Jackson signed the Indian Removal Act of 1830, which forced American Indian tribes to leave their homes and property in southern states to make way for white settlers and cotton. More than 100,000 Indians living between Florida and Louisiana and north to Michigan were forced west between 1830 and 1850 — sometimes at bayonet or gunpoint, sometimes in chains. It was called “Trail of Tears” for a reason: Thousands died — from starvation, disease or simply freez-
ing to death. Small wonder many Native Americans resent having to look at Jackson’s face on their $20s. “One elder told me it was like putting Hitler’s face on your money,” Rush said. But if that’s not enough to rethink Jackson, consider this: He’s the only president who has “slave trader” on his pre-presidential résumé in addition to “slave owner.” The brutality of his treatment of slaves has been documented, too. So why did Hamilton, not Jackson, get the boot? One advocate for change said the $10 bill was already up for a redesign because of its popularity with counterfeiters. That seems pretty lame, since the redo isn’t slated till 2020. I’m with Andra Rush: It’s time to erase Jackson from our $20s.䡲 Mary Kramer is publisher of Crain’s Detroit Business. Catch her take on business news at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760 and in her blog at www.crainsdetroit.com.
The reality is that autonomous cars will be safer despite current risks ast month, security researchers
L Chris Valasek and Charlie Miller
remotely hacked a Jeep Cherokee. The pair disabled the SUV’s transmission. On the highway. At highway speeds. The headlines were, and are, everywhere. Cybersecurity and the threat of chaos is a new reality in the age of connected and autonomous cars. The key word in that last sentence is “reality.” This is the reality in which we live. Cars can, and will, be hacked. More commonly, autonomous and connected cars will lose control. Accidents will happen. People will get hurt. Reality. Matt Lauer will interview top cybersecurity experts on “The Today Show.” The news will drum up a pandemic of fear. Lawsuits will happen; finger-pointing will occur. Liability will be splayed in front of courts, local and federal. Senators will flay automotive executives in nationally televised hearings. Legislation will be written and rewritten. Reality. Riding in a semi-autonomous car designed by Continental Automotive Systems USA in Auburn Hills a
DUSTIN WALSH: WEB: dwalsh@crain.com TWITTER: @dustinpwalsh
few years ago, an executive told me it only takes one crash to derail the industry’s progress. But should it? It’s safe to assume no one wants accidents to happen and want to see a death even less. The automotive industry certainly doesn’t want its customers to get hurt while using its products. But accidents will happen. They must happen. It’s in the name of safety that accidents will happen. Innovation doesn’t happen in a vacuum. With each accident, automakers and suppliers will learn something new. Something to fix, something to do better. Lives will be saved. According to a McKinsey report this year, autonomous vehicles — those equipped with enough tech-
nology to drive without much driver interaction — could reduce traffic accidents by 90 percent. Ninety percent. Fewer accidents; fewer deaths. With some napkin math, that equates to roughly 27,000 lives saved out of the roughly 30,000 claimed by traffic accidents in the U.S. each year. That’s enough to shoot for the moon on autonomous cars, in my opinion. But that won’t end the skepticism and looming litigation and legislation. And that’s OK. “The liability and finger-pointing will be rampant, but it’s going to take some crashes of cars with these features before we’ve got it all figured out,” said Claudia Rast, partner at Butzel Long PC in Ann Arbor. “It’s going to be a major issue that’s going to grab headlines and it’s going to be a bit of mayhem for a while; but we’re talking about a dramatic decrease in deaths.” So, yes, for those of us lucky enough to live through the nascent stages of autonomous vehicles, we will carry some inherent risk. But not a greater risk. Autonomous cars are, or at least will be, safer. And, in the end, our children will be safer. Isn’t that worth it? I think so. 䡲
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Name value could aid Gilbert’s bid for Congress, but uphill battle looms LANSING — Havof-touch elitist on ing ties to Hollywood the West Coast,” could be a good Ballenger said. thing for actress “‘They’re not one of Melissa Gilbert, who us’ — that was all plans to run for Conpart of what the Regress in Michigan publicans are sayand will need a siz- LINDSAY ing — and she was able war chest, politilike Exhibit A.” VANHULLE cal observers said Yet Gilbert and Capitol Briefings last week. her husband, actorOne caveat: Her lvanhulle@crain.com director Timothy ability to leverage TWITTER: @LindsayVanHulle Busfield, have been her name recogniactive in Livingston tion while fundraising for her cam- County since they moved here in paign won’t easily offset the fact that 2013, which would challenge opposhe owes hundreds of thousands of nents who want to “hang around dollars in unpaid federal taxes, which continues to grab headlines. That could make it hard for Gilbert, a newcomer both to politics and to Michigan, to unseat an incumbent congressman in a Republican-leaning district. Gilbert, who starred as Laura Ingalls Wilder in television’s “Little House on the Prairie,” said she will run in 2016 as a Democrat in the 8th District, which spans Ingham and Livingston counties and northern Oakland County. She will challenge freshman incumbent U.S. Rep. Mike Bishop , a Rochester Republican who was Senate majority leader in Michigan before running in 2014 to succeed former U.S. Rep. Mike Rogers. Can Gilbert win? “Highly unlikely,” said Bill Bal lenger , the founder of Lansingbased political newsletter Inside Michigan Politics and a former Republican state lawmaker. Unseating Bishop, who will have political name recognition after two years in Congress, will be “a really tough haul,” Ballenger said. “If there had been no negative publicity about her finances, we might be having a slightly different conversation right now,” he added.
Past debts In a news release launching her campaign last week, Gilbert said she is running on an economic platform to help families “who feel they have fallen through the cracks in today’s economy.” Immediately, Republicans focused on Gilbert’s celebrity status, calling her out of touch and seizing on the fact that she owes more than $472,000 in back taxes to the federal government and the state of California. “Melissa Gilbert has a lot of issues that she has to sort through,” Bishop campaign spokesman Stu Sandler said. “I don’t think she’s a good fit for the district, based on her values.” Gilbert has said her tax issues stem from a lack of acting work, a divorce and the recession. Her campaign did not respond to a request for comment from Crain’s, but previously it told the Detroit Free Press that she negotiated a payment plan with the Internal Revenue Service that would pay off the balance by 2024. “Somebody like Melissa Gilbert, it was almost like a tailor-made target for Republicans, because Republicans like to talk about the out-
her neck that she’s a carpetbagger,” said TJ Bucholz , president and CEO of Lansing-based political consulting firm Vanguard Public Affairs. And Gilbert campaigned for Democratic gubernatorial candidate Mark Schauer in the 2014 election. “You can see already that … the base is supporting her,” Bucholz said. “From a money perspective, it’s going to be a bit easier for her.” Still, he cautioned, Gilbert will need to educate voters on her stance on critical national issues, from the budget to foreign policy. “You have to be able to convince voters that you understand the
workings of Washington and policy machination,” Bucholz said.
National Republican Congressional Committee has listed Bishop on
Tough territory
its “Patriot Program” to help raise money for what it considers possibly vulnerable incumbents. Bucholz said Bishop could benefit in a presidential-year election if voters perceive “party fatigue” and decide to elect a Republican to the White House. But Ballenger said Democrats in general tend to do better in elections with a presidential race because turnout increases. This could be true if Democrats have a popular candidate, namely if former Secretary of State Hillary Clinton wins the party’s nomination. 䡲
Any Democrat running in the 8th District could have a difficult go of it. Voters there haven’t elected a Democrat since 1998, when now-U.S. Sen. Debbie Stabenow won the seat. That’s partly because redistricting has shuffled its boundaries, adding more of Republican-leaning northern Oakland County while dropping more liberal Washtenaw County. National analysts have pegged the 8th District as “likely” or “safe” Republican in 2016. Even so, the
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Thank you for your commitment to improving healthcare delivery and patient care quality! United Physicians, Inc. (UP) is one of Michigan’s largest independent physician organizations, representing nearly 2,300 physicians with medical staff privileges at hospitals throughout Southeast Michigan. UP’s mission is to deliver a healthcare system of excellence to its community through a coordinated, efficient and integrated network of physicians. Visit www.updoctors.com. * Honor Roll=Practices that have been designated for the past two years ** Blue Cross Ž Blue Shield Ž of Michigan is a nonprofit corporation and an independent licensee of the Blue Cross and Blue Shield Association.
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SPECIAL REPORT: DAN DUGGAN
Managing editor, special projects dduggan@crain.com
Health care summit topics: Data, heroes There’s a growing debate around the information that’s available about health care. Nationally, Michigan has been given an “F” grade on cost and quality transparency for consumers and employers in surveys — primarily for failing to mandate insurers contribute data to an “all payer claims database.” This database can provide the public with critical data to make health care treatment decisions. However, a number of Michigan’s health insurers, some hospitals and consulting firms specializing in transparency are starting to provide critical data to help consumers and employers choose the lowest-cost and highest-quality provider. This data discussion will be the crux of the Crain’s Health Care Leadership Summit Oct. 28
at the Marriott Renaissance Center in Detroit. Health Care Leah Binder: Heroes, featured Keynote speaker on this page, also will be recognized at the summit. Putting the information-sharing topic into perspective will be keynote speaker Leah Binder. Binder is CEO of The Leapfrog Group, a national nonprofit based in Washington, D.C., representing employers and other purchasers of health care calling for improved safety and quality in hospitals. Under Binder, The Leapfrog Group launched the Hospital Safety Score, which assigns letter grades assessing the safety of general hospitals across the country. She has been named to Modern Healthcare’s annual list of the 100 Most Influential People in Healthcare since 2009. Modern Healthcare is a sister publication to Crain’s Detroit Business. New this year will be a breakout session specifically for human resources executives. It will feature case studies and examples of how companies are using information about the cost of health care to save money for their business and employees. Another session will focus on transparency for health care providers and insurers. Registration is open now at www.crainsdetroit.com/events.
HEALTH CARE HEROES Finding a path Death of grandfather put Graddy on road to a career in geriatric medicine Stories by Jay Greene | Photos by Glenn Triest
N
ot only did Gwendolyn Graddy decide to become a doctor at age 16 because of her grandfather, she decided early to specialize in geriatric
WINNER: PHYSICIAN Gwendolyn Graddy, M.D., medical director, PACE Southeast Michigan, Detroit
2015 HONOREES Crain’s Detroit Business honors leaders in health care each year for innovation and above-and-beyond performance. The winners are selected by a panel of industry experts.
Physician Winner: Gwendolyn Graddy, medical director, PACE Southeast Michigan. This page Finalist: Michelle Macy, pediatric emergency doctor, C.S. Mott Children’s Hospital. Page 12
Corporate Achievement Winner: David Share, senior vice president of value partnerships, Blue
the Medicare and Medicaid programs. medicine. Cross Blue Shield of Michigan. Page 12 At PACE, Graddy implemented several Her grandfather, Thomas Postell, died Finalist: Michael Miller, chief mission officer, St. Joseph Mercy Health programs that helped to reduce hospital at 78 from metastatic prostate cancer. System. Page 13 readmissions the last two years to 14 perBut he may have been able to live longer Finalist: Michael Freed, president and CEO, Priority Health. Page 13 cent from 24 percent for the dual-eligible or suffer less if he had sought treatment Nursing orAllied Health field patient population served by PACE. The for his pain. national average for hospital readmis“When my grandfather died, it was a Winner: Polly Swingle, co-founder, The Recovery Project. Page 14 sions is about 20 percent for all Medicare pivotal point in my life,” said Graddy, Finalist: Melissa Swiecicki, nurse, John D. Dingell VA Medical Center. patients. who graduated from Wayne State UniverPage 14 sity School of Medicine in 1984 and later In 2014, Graddy expanded PACE’s beTrustee was a staff physician at Henry Ford Medical havioral health program by hiring a fullWinner: Karen Colina Wilson Smithbauer, Oakwood Foundation. Group. Page 15 SEE GRADDY, PAGE 12 “I decided I was going to do someFinalist: N. Charles Anderson, New Center Community Services. thing about this. I always had a Page 15 sense that older people are important. They deserve quality Advancements in Health Care care.” Winner: Donald Powell, CEO, American Institute of Preventive In 2001, Graddy decided to exMedicine. Page 16 pand on her geriatric care commitment by becoming medical 2015 JUDGES director of what is now called PACE Southeast Michigan, a nonMary Beth Bolton, medical director, Medical and Care profit health care organization coManagement/PPO, Blue Cross Blue Shield of Michigan sponsored by Henry Ford Health Sonia Hassan, associate dean for maternal, perinatal and child System and Presbyterian Villages of health, Wayne State University, and director of the Center for Michigan. Advanced Obstetrical Care and Research at the Perinatology Research Branch, WSU/Detroit Medical Center PACE, which stands for Program of All-Inclusive Care for the Mary Zatina, senior vice president, government relations and community affairs, Beaumont Health Elderly, is a joint program designed to keep the elderly in their Denise Rabidoux, CEO, Evangelical Homes of Michigan homes and out of long-term care Gwendolyn Graddy expanded on her geriatric care commitment Stephen Howard, board member, Beaumont Health; CEO, facilities. It is jointly funded by by becoming medical director of PACE Southeast Michigan. Spearhead Group
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SPECIAL REPORT: HEALTH CARE HEROES
A mea culpa over past Farid Fata honor Hindsight is 20/20, the saying goes. In retrospect, naming Farid Fata in 2011 with an honorable mention in the Health Care Heroes physician achievement category for his Swan for Life Cancer Foundation seems incredible. But that was 2011; it’s clear from the records that Fata’s nominator was deceived by Fata’s seemingly benevolent work to provide wellness programs and support services to patients — and so was the Crain’s judging panel. The former oncologist was sentenced in July to 45 years in prison after pleading guilty to fraud and money laundering charges. Investigators say he administered medically unnecessary chemotherapy and other treatments and billed patients, Medicare and
private insurers for tens of millions of dollars. We needed to revoke that 2011 award while we also announce this year’s honorees. Crain’s Detroit Business counts on staff expertise and expert industry judges for awards such as Health Care Heroes. Since the program’s inception in 2002, we’ve honored dozens of industry leaders. Our focus continues to recognize the outstanding work that is going on throughout the region with health care. For every Dr. Fata, there are hospitals full of innovative medical caregivers and support teams. Read Pages 11-16 for profiles of this year’s award winners. Jennette Smith, managing editor
WINNER: CORPORATE ACHIEVEMENT
ER doctor pushes for tougher child restraint law Michelle Macy was surprised FINALIST: — and alarmed — one morning PHYSICIAN while listening to a radio show in which parents talked about how Michelle Macy, M.D., they exercise their own judgment pediatric emergency when it comes to putting their physician, C.S. Mott Children’s children in car booster seats. Hospital, Ann Arbor “I was finishing up my fellowship and expecting my third child,” said Macy, who finished her “I have yet to meet a parent who fellowship in 2009 at the University is in the ER with a hurt kid that didof Michigan and is now a practicing n’t think they were doing the right ER physician at the Ann Arbor pe- thing,” she said. diatric hospital. “My husband and I Macy said recommendations by were figuring out how to fit three the National Highway Transportation Safechildren (and ourselves) into our ty Administration are that children be in rear-facing car seats until age 3 or car and keep them safe.” Macy said she might not have longer. From ages 4 through 7, chilfelt so concerned by what she was dren should be in forward-facing car hearing if she hadn’t seen children seats in the back seat. Once they outinjured in car accidents in her work grow commercial car seats, children as an ER doctor: In many cases, should be in booster seats from ages they weren’t following booster and 8 through 12, or until they are large enough to fit in adult seatbelts. car seat safety recommendations.
tions. As a champion for child passenger restraint usage in Michigan, Macy is conducting a clinical study at UM and Hurley Medical Center in Flint with 350 parents on the best way to educate families on the use of auto seat restraints and booster seats for their children. The goal would be to come up with an ERbased intervention to talk with parents about safe child restraint use. “We want to help them make more informed choices,” she said. 䡲
Several years ago, she also created the center’s hospice program, now called Comfort Care. “Our continuity of care is much better. It is difficult for people to go from one set of caregivers to another at this difficult time,” she said. Graddy said the two to four residents each month from Henry Ford Hospital who rotate through PACE’s two clinics gain important geriatric experience. The residents learn to
present cases in common language to a multi-disciplinary team of nurse practitioners, social workers and bus drivers, she said. “Not a lot of medical students and residents go into geriatric care,” Graddy said. “I am most proud we have had two residents who went on to become geriatricians. We need many more because many doctors will be retiring and the baby boomers are getting older.” 䡲
GRADDY FROM PAGE 11
time behavioral health specialist to provide seniors with individual and group therapy. A psychiatrist also sees patients twice a month. “We are seeing benefits. People are more compliant with medications, and we see less acting up. Staff also understands more how to address” behavior, she said.
“Many parents don’t follow the recommendations even though kids can benefit from using booster seats,” Macy said. “Some parents make their own choices when to use booster seats. It got me thinking about how parents view laws” or safety recommenda-
David Share, M.D., senior vice president of value partnerships, Blue Cross Blue Shield of Michigan, Detroit
Physician’s passion: Improving health care for young people David Share’s passion is working as a physician with patients in community settings, primarily teens, children of teens and young people up to age 25. This is illustrated by his 35-year commitment to the Corner Health Center clinic in Ypsilanti. But since he became involved with Blue Cross Blue Shield of Michigan in 1982 — first as a consultant and later in 1993 as a part-time employee before assuming his current position in 2011 — Share has persuaded the state’s largest insurer into adopting ideas that sprung out of his passions. Those lifelong passions — driven by his concept of empowering people — have led to development of collaborations between Blue Cross and many of the state’s 140 hospitals and thousands of doctors. Programs include the Blues’ continuous quality initiatives, the physician group incentive program and patient-centered medical homes. So far, Blue Cross has developed 22 continuous quality initiatives that include bariatric surgery, general surgery, cardiac surgery and vascular conditions.
Blue Cross estimates that more than $600 million has been saved along with hundreds of lives by reducing complication rates. “I saw an opportunity at the Blues to empower them to create systems of care to improve quality,” Share said. “When doctors are fully engaged, they can transform their practices. They will do so much more on their own than by doing what a payer decides they should do.” The first continuous quality initiative began in 1997 when five hospitals and Blue Cross began to look at variations in angioplasty procedures. Share said the Blue Cross Founda tion was critical to helping fund early initiatives to prove the value of the strategy. Darrell “Skip” Campbell, M.D, a professor of surgery and director of the Michigan Surgical Quality Collaborative with the University of Michigan, said Blues programs brought national recognition to the state. Campbell nominated Share. In 2005, Share and Thomas Simmer, the Blues’ chief medical officer, helped create the Blues physician group incentive programs to financially reward doctors for quality improvement and cost-cutting efforts. “We envisioned a partnership approach with physicians because the system in Michigan was not working well,” Share said. “We had to persuade Blue Cross to transform reimbursement to support that system.” Share said the patient-centered medical home program was created as part of the physician group incentive program to reward physicians for improving care. More than 3,000 physicians have been certified as operating their practices as medical homes, which require primary care doctors to coordinate patient care among providers. “We have made a lot of progress, but we still have a ways to go” to linking all physicians, hospitals and Blue Cross in a seamless care delivery system to reduce costs and improve quality, Share said. Share, who continues to volunteer at the Corner Health Center every Wednesday, is also chairman of the Michigan State Medical Society. 䡲
s
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SPECIAL REPORT: HEALTH CARE HEROES FINALIST: CORPORATE ACHIEVEMENT Michael Miller,
chief mission officer, St. Joseph Mercy Health System,
Ann Arbor
Door opens to dental clinic for patients of low income Michael Miller read the paper one Sunday morning in 2013 and knew immediately he could help make a dental clinic for low-income people a reality in Washtenaw County. “Richard Fleece was the county health officer (at the time) and was trying to establish a partnership for a dental clinic,” Miller recalled. “I called him on Monday and told him we have space. He was thrilled.” In February, the Washtenaw County Dental Clinic opened in St. Joseph Mercy Health System’s Haab Health medical office building in Ypsilanti. With 11 chairs and two practicing dentists, the dental clinic is a collaboration of the Washtenaw County Public Health Department, St. Joseph Mercy, Washtenaw Health Plan and the Michigan Community Dental Clinics. Besides Fleece, who has since retired, Ellen Rabinowitz, current county health officer, also was instrumental to making the dental clinic a reality, Miller said. There are several free dental clinics in Washtenaw, including the University of Michigan’s community clinic, but most are running at full capacity, Miller said. A serious problem Miller knew about is that more than 40,000 people in Washtenaw County do not have dental insurance and few dentists accept Medicaid coverage because of low payment rates. Studies have shown that untreated dental problems can lead to medical problems and employment barriers. “We knew there was a big need for the clinic. At St. Joseph’s ER, we provide stopgap dental care, Band-Aid kind of stuff,” Miller said. “We are not set up in the ER” to do more. During the first four months, the clinic has logged 1,200 visits. At full capacity, when the office will have five dentists, the clinic is expected to serve about 6,000 patients annually with 15,000 visits. 䡲
Priority Health’s app calculates out-of-pocket health care Michael Freed is a big proponent of eliminating the mystery of health care prices when people shop for medical care. Freed is at the forefront of providing price and quality transparency to members of nonprofit health insurance company Priority Health. This year, Priority Health began offering members a mobile application that helps them estimate the cost of their health care. It’s a hightech way for people to estimate the cost of a doctor visit or hospital procedure and shop around for a
FINALIST: CORPORATE ACHIEVEMENT Michael Freed, president and CEO, Priority Health, Grand Rapids
lower-cost option. Many health insurers offer members online methods to get price information for medical procedures, but Priority’s app is linked to a member’s specific benefit plan
and can calculate outof-pocket costs instantly. “The cost estimator is a way to get patients engaged with the health care system and become more knowledgeable about their health,” Freed said. In July, Priority began offering members financial incentives of $50 to $200 to use its cost estimator app if they eventually schedule one of the 300 listed procedures. Top pro-
cedures are MRIs, colonoscopies, lab tests and knee arthroscopies. As high-deductible health plans grow in popularity, people are finding they are being asked to contribute higher out-of-pocket payments when using health care services. “We have the technology today to put solutions in people’s hands,” Freed said. “We need them to be collaborators in their care plan. We can only solve the cost problem when we have educated consumers.” 䡲
DELTA DENTAL PROUDLY SUPPORTS MICHIGAN COMMUNITIES
PROVIDING DENTAL CARE TO THOSE IN NEED IMPROVING CHILDREN’S ORAL HEALTH AND SCHOOL SUCCESS
SUPPORTING THE DENTAL HEALTH PROFESSION
ENGAGING OUR EMPLOYEES ORAL HEALTH EDUCATION Learn more about Delta Dental of Michigan’s efforts to improve oral and overall health and wellness in Michigan through our Brighter Futures initiative at deltadentalmi.com/bfreport.
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SPECIAL REPORT: HEALTH CARE HEROES
Injured man’s drive leads to founding of clinic Polly Swingle wondered nearly 20 years ago if cutting-edge physical therapy conducted on cats with spinal injuries that allowed them use of their hind legs would work on humans. It did. Working with her patient Charlie Parkhill, a businessman who had injured his spinal cord in a freak swimming accident in 1998, Swingle began to test her ideas in Detroit using high-intensity workouts. “Charlie was 100 percent successful in his personal and business life. He had such a drive in him,” said Swingle of Parkhill’s determination to walk again. “I thought, ‘Let’s strap this guy on a treadmill that was located in the orthopedic unit (of Detroit Medical Center ’s Rehabilitation Institute of Michigan) — something that was not used for spinal injuries — and see if he can learn to walk,’ ” said Swingle, a physical therapist who worked at the DMC at the time. “He learned to walk. It worked.” Thus was born high-intensity therapy — the use of specialized treadmills, stationary bicycles and other equipment to treat patients for two to three hours at a time. Typical physical therapy is for an hour maximum, two to three times a
WINNER: ALLIED HEALTH Polly Swingle, co-founder, The Recovery Project, Livonia, Clinton Township
week, she said. “I didn’t invent it. During that period in the mid-1990s, many people across the country were reading the research and trying the same thing,” Swingle said. “I was the first in Detroit and Michigan to use it.” After six months of high-intensity therapy, Swingle said, Parkhill was able to use a walker for short distances. As a quadriplegic whose spinal cord injury left him motion-
less from the neck down, Parkhill uses a wheelchair for longer distances. “His prognosis was he would be wheelchair-bound and need assistance for everything,” Swingle said. “He needs some assistance for transfer” from wheelchair to bed or chair. In 2003, Swingle and Parkhill founded The Recovery Project, a forprofit physical therapy rehabilita-
tion clinic with offices in Livonia and Clinton Township. They employ 40 therapists and support workers. The clinic specializes in spinal cord and traumatic brain injury and geriatric rehabilitation, but it also treats patients with Parkinson’s disease, multiple sclerosis, and other neurological disorders and injuries. In 2005, Parkhill took his first unassisted steps and has walked nearly 100 feet on his own at one time. “He has a quality of life now that nobody would have ever dreamed of before,” Swingle said. “Spinal cord injury patients like Charlie who exercise regularly also don’t have as many secondary health problems like obesity, diabetes, heart disease or respiratory conditions.” Geriatric patients who have been injured or lost mobility also have fewer secondary medical conditions, she said. Swingle said the degree of recovery is based on the seriousness of the injury, the motivation to improve and the quality of their health insurance coverage. “Health insurance plays a huge part,” she said. “We are blessed to have no-fault insurance in Michigan where people in car accidents can have this treatment.” 䡲
FINALIST: ALLIED HEALTH Melissa Swiecicki, nurse, John D. Dingell VA Medical Center, Detroit
ICU nurse’s career inspired by son’s death Melissa Swiecicki always knew she wanted to become either a nurse, a paramedic or a firefighter. As a stay-at-home mom with parttime retail jobs, her ultimate decision was born out of tragedy. In 2002, her son Lucas died at age 3 of cancer. Eighteen months of chemotherapy and nights in the intensive care unit inspired her to become an ICU nurse. “I was so impressed by pediatric ICU nurses. It was a very eye-opening experience for me. I wanted to be part of that elite service,” said Swiecicki, who was 30 when Lucas died. “When he passed away, a friend suggested I go back to college.” Judges were impressed by Swiecicki’s willingness to turn her own sadness into a nursing career and dedicate herself to helping the sick and disabled. In 2006, Swiecicki graduated with an associate degree in nursing at Oakland Community College, then joined Beaumont Hospital in Royal Oak as a nurse. While working at Beaumont and raising two daughters with her husband, Peter, an engineer at General Motors Co., she finished her bachelor’s degree in 2011 at the University of Michigan-Flint. That same year, hearing about the need for health care providers in the military, Swiecicki joined the U.S. Navy Reserves . She plans to serve at least 20 years. Now a lieutenant, she decided last year to join the ICU nursing staff at John D. Dingell VA Medical Center in Detroit. “Disabled veterans are very near and dear to my heart. I now have the opportunity to work with wounded warriors. They are very special people, and it is important to reach out for them,” she said. Working the midnight shift, Swiecicki and other nurses regularly bring in home-cooked meals for the vets and breakfast for the families. “My compass, my being is to be an advocate for patients. You work through death and dying of patients and take time to talk with the families because doctors sometimes are rushed and don’t have a lot of time,” she said. “I want to serve veterans because I will be a veteran one day.” 䡲
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SPECIAL REPORT: HEALTH CARE HEROES
Trustee pushes for better health services for women When Karen Colina Wilson Smithbauer beat breast cancer 12 years ago, she wanted to make sure other women going through treatment had a better experience. As founding chairwoman of the women’s health advisory committee on the Oakwood Foundation board, Smithbauer, 70, has challenged Oakwood physicians and clinical staff to improve health care services for women. Her donations, which now total $7.2 million, also have enabled four-hospital Oakwood, which is part of the new Beaumont Health, to help create the Karen Wilson Smith bauer Comprehensive Center for Breast Care in Dearborn.
The center, which opened in June, combines technology with a multidisciplinary clinical team. But the key to helping women cope with a cancer diagnosis, said Smithbauer, is the nurse navigation services. During Smithbauer’s cancer treatment, she received care from four different health systems — the University of Michigan , St. Joseph Mercy Health System , Henry Ford Health System and the Cleveland Clinic. She said not one provider knew what the other was doing. “I had to be my own health care advocate. I did the research, asked the questions and made sure my care was the best,” she said. “My experience with my own business in health benefits enabled me to navigate the system, but a lot of women don’t know where to begin.” Smithbauer was chairman and CEO of Romulus-based Central Dis tributors of Beer Inc . until she sold
WINNER: TRUSTEE Karen Colina Wilson Smithbauer, Oakwood Foundation, Dearborn
the business and retired in 2007. She serves on nine boards that include Monroe Bank and Trust , the Wright Foundation and Lyons Consulting Group. Her experience at a physician office early in her treatment imbedded into her consciousness what she felt needed to change. “I went in for an appointment, and even before I talked with the doctor about what care I needed, a nurse came into the room and started talking about where to go for a prosthesis, a wig, how to clean out a (breast drainage) tube” after surgery, she said. “I left that office and on my way home I got lost,” she said, recalling how upset she was. “I told that doc-
tor, ‘You cannot do this to people.’ ” Once joining the Oakwood Foundation board in 2010, Smithbauer pushed to create the women’s health advisory committee that advocated for women’s cancer care improvements. In addition to the nurse navigator, other clinical team members include a genetic counselor and a nurse practitioner. Recruiting is underway for a plastic surgery physician, she said. “We are looking at gaps now in mental health care for women with cancer,” she said. “There is a range of periods where mental health can affect women: post-partum depression, middle years, during menopause and through the senior ages.” 䡲
Trustee turns around community services agency N. Charles Anderson beFINALIST: came a board member of New Center Community Services in TRUSTEE late 2010 when it was in crisis. N. Charles Anderson, New New Center, a nonprofit Center Community Services, mental health agency, was esDetroit sentially facing bankruptcy, having been informed by several banks, including Comerica Bank, that it was headed for default less than 15-minute meetings,” Anon loans. Unpaid vendors also were derson said. “Their finance reports asking for past-due payments. only covered the month. There were On top of those challenges, the no expenses to budget. We were just board structure was outdated and told: ‘We spent (X amount) that the mix of trustees not up to the job, month.’ It didn’t say above or below said Anderson, the former chairman budget. There was no trend inforof Health Alliance Plan and longtime mation.” CEO of the Detroit Urban League. When the previous CEO retired “It was an eye-opening, shocking in 2012, Anderson said that is when experience. I came on the board everything broke down. and became the de facto chairman The banks called in the loans. and emergency manager” of New After some struggles, New Center Center until the hiring of a new now is on stronger financial footing CEO, Joy Calloway, in 2013, Ander- with an effective board, Anderson son said. said. The nonprofit has 137 employ“I was amazed the finance com- ees and serves 4,500 adults and chilmittee prided themselves on having dren with severe and persistent men-
tal health conditions in 14 programs at four clinic locations. In 2010, New Center posted a $2.6 million loss on $14 million revenue. After renegotiating vendor contracts and layoffs, New Center posted a $3.7 million surplus in 2012 and a $1.6 million surplus in 2013. However, investments in information technology systems led to a $1.7 million loss in 2014, but the agency had reserves to pay for it. To provide oversight, Anderson said he also updated the board’s committee structure and bylaws to remove lifetime appointments. Trustees are recruited for diverse talents and are limited to three three-year terms, he said. The 15-member board now has committees on finance, human resources, programs and quality. Despite recent state mental health funding cutbacks, Anderson said he feels the agency is running smoothly and prepared for the future. 䡲
PEOPLE IN HEALTH CARE Send news items and photos to dbdepartments@crain.com
䡲 Peter Lichtenberg , director of the Institute of Gerontology at Wayne State University , has been awarded the Judge Edward Sosnick Courage to Lead Award, presented annually by the Oakland County SAVE Task Force , which increases aware-
ness of elder abuse. 䡲 Jinsheng Zhang, professor and research director for the Wayne State University School of Medicine’s department of otolaryngology-head and neck surgery, has been elected chairman of the scientific advisory panel of the American Tinnitus Association. 䡲 Angelo Patsalis, M.D., was recently sworn in as president of the Michigan Academy of Family Physicians Foundation. The academy also named Pierre Morris, M.D., the Family
Medicine Educator of the Year.
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SPECIAL REPORT: HEALTH CARE HEROES
CON ROUNDUP
Focus on prevention gets attention Donald Powell took his psychology dissertation on smoking cessation from the University of Michigan in 1979 and turned it into a business and career. “I was a two-pack a day smoker,” said Powell, 65, a Brooklyn native who arrived in Ann Arbor as a freshman at age 18 and ended up staying in Michigan. “My dissertation adviser suggested the research. It killed two birds with one stone. I stopped smoking and got my Ph.D.” Now, as CEO of the Farmington Hills-based American Institute of Pre ventive Medicine, Powell provides preventive and well-being consulting and educational services to corporations that include Fiat Chrysler Auto mobiles , Lowes , H e n r y F o r d H e a l t h S y s tem, the U.S. Army and the CIA. What do employers want to know? Powell says they want to save money and improve productivity by encouraging their employees to stop smoking, drop weight, reduce stress and learn how to make the best health care treatment decisions possible. “Conservatively, 25 percent of all physician visits are unnecessary, and 50 percent of emergency department visits are for non-urgent reasons,” Powell said. “With health education, we try to help employees understand
WINNER: ADVANCEMENTS IN HEALTH CARE Donald Powell, CEO, American Institute of Preventive Medicine,
Farmington Hills
what to do with this health symptom or that.” Helping employees make the right decision can save companies $83.15 per employee per year by lowering medical utilization, he said. It also can save lives. Turning his research into tobacco cessation into practice, Powell founded the for-profit institute in 1983. He first began to help hospitals develop smoking cessation programs and
The following are selected certificate of need filings from June 10-Aug. 11:
later taught companies how to educate their employees to make better health care decisions when faced with poor health symptoms. During the 1980s, Powell’s company was in such high demand that he developed a licensing program for smoking cessation and health education that trained executives at hospitals and other companies. Powell’s Smokeless program has been cited in four U.S. Surgeon General’s reports, in 1982, 1983, 1988 and 1989, with demonstrated quit rates that are more than three times the national average of about 15 percent. Powell also has worked closely with the Veteran’s Administration and the U.S. Army. He wrote a 432-page book for the VA, Veterans Health at Home, that has improved veterans’ health and saved the VA an average of $171 per veteran. But Powell said one of the biggest barriers for companies wanting to get their employees more engaged in preventive and wellness programs is the company’s own culture. “Companies that have more of a culture of health see more participation from employees,” he said. “There is research that shows the use of incentives, either reward or punishment, can increase participation.”
Applications received
Select Specialty Hospital-Grosse Pointe : Begin operation of a
long-term acute care hospital with 30 hospital beds from St. John Hospital and Medical Center; $8.8 million. Regency at Waterford, Waterford Township: Add 50 existing licensed nursing home beds from Bloomfield Orchard Villa; $5 million. Garden City Hospital: Add a cardiac catheterization laboratory, $5.7 million. BCA StoneCrest Center, Detroit: Add 32 adult psychiatric beds under the high occupancy provision; $7.7 million. The Village of Redford, A Senior Living Community: Acquire an 88bed nursing home via Rhema-Redford Operating LLC and operate under a new 5-year lease; $3.1 million. Beaumont Hospital, Royal Oak: Create a new observation unit in shelled space on the lower level of the north pavilion; $12.8 million. Rochester Endoscopy and Surgery Center LLC, Rochester Hills: Initiate a new freestanding surgical outpatient facility with four operating rooms; $6.6 million. McLaren Oakland, Pontiac: Emergency addition of 30 new adult psychiatric beds; $2.5 million.
Decisions Harper University Hospital, Detroit: Expand existing surgical service by adding two operating rooms in the Cardiovascular Institute Surgery Center; $5 million. Approved. Henry Ford Macomb Hospital, Clinton Township: Construct a shelled space in an expansion of the existing first two floors of the northwest wing; $8 million. Approved. University of Michigan Health System, Ann Arbor: Renovate existing shelled space for future clinical use, $11.6 million. Approved. Natalie Broda
Can Michigan provide consumers and employers the data needed to make smart decisions in health care? A growing number of Michigan’s health insurers, hospitals and consulting firms are already doing it. Attend the debate lead by keynote speaker Leah Binder, CEO of The Leapfrog Group, a national nonprofit based in Washington, DC, representing employers and other purchasers of health care calling for improved safety and quality in hospitals. Michigan’s “F” grade came from the Report Card for State Price Transparency Laws issued by Catalysts for Payment Reform and the Health Care incentives Improvement Institute. Find out why the score was so low.
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PEOPLE Kevin Spiess to
senior project manager,
Donna Jackson to deputy director, senior resources, City of Westland, from owner, All Star Expediting LLC, Westland.
Oliver/Hatcher Construction,
Novi, from project manager, Walbridge Aldinger Co., Detroit.
Spiess
Ellin Callahan
Callahan
to director of business development, Barton Malow Co., Southfield, from director of business development, Granger Construction Co., Novi.
ENTERTAINMENT Jimmy Ansara to president, Activ8 Gaming, Ferndale, from general
manager.
SPOTLIGHT LARRY McCARTER, CEO, Burroughs Inc.
McCarter, 55, has had a 30-year career with Burroughs and formerly Unisys in both the technology products McCarter and, recently, technology services businesses. McCarter holds a bachelor’s degree in business administration from Central Michigan University. Burroughs offers cash and check automation products and services, with more than 80,000 ATMs, 25,000 cash management and 250,000 check and server products under contract.
FINANCE
Snyder
Troy Snyder to partner, enterprise risk services practice, Plante Moran PLLC, Southfield, from partner, Ernst and Young LLP, Los Angeles.
Ralph Sherman to general counsel and senior vice president of government relations and SEC
John Crockett to managing director, credit and underwriting for nationwide equipment leasing operations, TIP Capital, Bloomfield Hills, from head of North American operations, Macquarie Equipment Finance LLC, Bloomfield Hills.
BUSINESS SERVICES
MISCELLANEOUS
SURVEY
Now Accepting Orders for Large Boxes!
rector of technical design, Carhartt Inc., Dearborn, from vice president of technical design, Lane Bryant Inc., Columbus, Ohio.
RETAIL Victoria Strickler to design manager, Scott Shuptrine Interiors Grosse Pointe Gallery, Grosse
Pointe, from sales representative, F. Schumacher & Co., Michigan Design
Strickler
313.446.6086 • FAX: 313.446. 034 7 E-Mail: cdbclassif ied@crain.com
Anetrini
Kane
Center, Troy. Also, Dolores Anetrini to design manager, Scott Shuptrine Interiors Royal Oak Gallery, Royal Oak, from designer, Gorman’s Home Furnishings and Interior DesignsLakeside, Shelby Township, and Whitney Kane to design manager, Scott Shuptrine Interiors Novi Gallery, Novi, from interior designer.
SERVICES Daniel Rutenbar to business
development manager, Tebis America Inc., Troy, from senior client executive, CAM Logic, Oxford. Rutenbar Joe Frost to executive director, Oxford Downtown Development Au thority, Oxford, from community
preservation specialist, Eastern Regional Office, Indiana Landmarks, Cambridge City, Ind.
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.
WATERFRONT PROPERTY
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Economic Development Forum. 89:30 a.m. Troy Chamber of Commerce. Lisa Bargar Katz, executive director, Workforce Intelligence Network, talks about the collaborative effort of seven Michigan Works agencies and eight community colleges. Rehman, Troy. $15; free for Troy Chamber members. Contact: Jaimi Brook, (248) 641-0031; email: jaimi@troychamber.com.
FRIDAY AUG. 21
Latino Business Summit. 7:30 a.m.-4
ANALYZE
CrainsDetroit.com/JobConnect |
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.
p.m. Julian Samora Research Institute at Michigan State University. Review the state of Latino businesses in Michigan, identify challenges, promote awareness. Kellogg Center, East Lansing. Free. Telephone: (517) 432-1317; email: jsamorai@msu.edu.
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REAL ESTATE
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JOB FRONT
Singlewall, Doublewall, and Triplewall
Tim Walsh to director, construction practice, property and casualty, Oswald Cos., Bloomfield Hills, from executive vice president, Walsh managing national director of project solutions, Aon Risk Solutions Detroit, Southfield.
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THE MACOMB MUSIC THEATER (Liquor License Included) by Order of the U.S. Bankruptcy Court Eastern District of Michigan Southern Division Honorable Marci M. McIvor Case No. 15-43593-MBM Macomb County’s largest entertainment venue originally built in 1921 by acclaimed architect C. Howard Crane. The theater was recently restored with old world craftsmanship and attention to detail. This theater includes a liquor license. The minimum bid at the auction will be $700,000.00. Additional bids will be in increments of $20,000.00. For further information, please contact Ernest M. Hassan III, Esq. 248.354.7906 ehassan@sbplclaw.com
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UPCOMING
PARTNER EVENTS
Marketing & Sales Executives of Detroit Summer Networking Join marketing and sales professionals from Southeast Michigan for a casual evening of networking in downtown Royal Oak. August 26 • 5 - 7 p.m. Blackfinn Ameripub, Royal Oak MSED Members: $10 Nonmembers: $15
For additional information and to register, visit www.msedetroit.org or call Meeting Coordinators at (248) 643-6590.
Southfield Area Chamber of Commerce Oakland Chamber Network Mixer August 26 • 5:30 - 7:30 p.m. Courtyard Marriott, Southfield Nonmembers: $25 Business Development Series: Sales Training Expert, Kirk Armstrong September 2 • 7:30 - 9 a.m. Southfield Chamber Offices, Southfield Nonmembers: $10 For additional information and to register, visit www.southfieldchamber.com
Air museum plans to fly higher with move to Oakland County
The World Heritage Air Museum is expanding to the Oakland County In ternational Airport in Waterford Township to continue its operation amid stricter fly zone regulations instituted last year. Founded in 2011, the museum rescues Cold War-era military jets from the 1950s-1970s and returns them to flight status to preserve their history and educate the public by offering group tours and demonstrations locally and taking the jets to air shows in Michigan, like Thunder Over Michigan the last weekend of August. The shows also travel to other states. Flying the jets at air shows requires training to give pilots mechanical and flying proficiency, said Marty Tibbitts, co-founder and executive director of the museum, which will be moving from its De troit City Airport berth. “In Detroit, we are under the class B airspace of (Detroit Metropolitan Airport), so we are limited to how high we can fly,” which is only up to 3,500-4,000 feet, he said, to better
protect incoming aircraft. “Our jets burn a lot more fuel down low than up high.” In Oakland County, the jets can fly as high as 18,000 feet and higher with permission, Tibbitts said. “It makes the actual operation much more economical,” he said. Tom Proctor, another of the museum’s founders, bought a hangar at the Oakland County airport and is donating that space to the museum, which is moving six of its 18 jets there, Tibbitts said. Those jets are from Britain, Switzerland, Czechoslovakia, Spain, France, Russia and Poland. The new space in Waterford Township will also have “more of a look and feel of a museum than you see in Detroit,” Tibbitts said. Museum officials hope that look, and the museum’s ability to attract more volunteers and docents, will enable it to be open to the public for regular hours rather than just prescheduled tours, he said. The museum plans to retain its space at Detroit City Airport for maintenance and restoration of its
planes and to house the remainder of the jets. The museum, which is finalizing its tax filing for 2014, broke even with total revenue of about $340,000 last year, Tibbitts said. That compares to $404,145 in revenue the year before, with an operating excess of just under $99,000. “We have certain donors who will donate as needed. ... Our larger donors write checks every month,” he said. Having operated for a few years, the museum has proven it can restore, maintain, operate programs and “negotiate fantastic deals for aircraft,” Tibbitts said. The next step is to solicit grant funding and other income, including sponsorships and opportunities to offer the museum’s jets to the U.S. Air Force and U.S. Navy for test pilot training, he said. “Their test pilot schools are looking for aircraft with unusual flight characteristics to teach them better the skill sets necessary to evaluate new aircraft designs,” Tibbitts said. 䡲
DEALS & DETAILS
cludes EMU undergraduate and graduate classes offered at HFC; availability of evening, weekend and hybrid classes; and transferfriendly policies and guaranties. Websites: emich.edu, hfcc.edu.
Township. Telephone: (586) 580-5500. Website: cienahealthcare.com.
By Sherri Welch swelch@crain.com
Great Lakes Women’s Business Council 15th Annual Great Lakes Women’s Business Conference Attendees include women business enterprises, Great Lakes Women’s Business Council corporate members, additional Fortune 500 executives, U.S. government entities and partner organizations. The key benefit of the conference is the numerous opportunities to cultivate business relationships. Conference attendees can achieve months of sales prospecting in one afternoon at “Meet the Buyers,” an opportunity to meet with more than 70 supplier diversity and procurement representatives. Women’s Business Showcase features more than 125 tabletop displays of certified women enterprises. September 29-30 Suburban Collection Showplace, Novi Early bird rate: $175 (ends August 28) For more information or to register, visit www. greatlakeswbc.org or call (734) 677-1400.
For more local events, visit Crain’s Executive Calendar at crainsdetroit.com/executivecalendar
CONTRACTS
EXPANSIONS
ZipLogix, Fraser, a real estate tech-
Fresh Thyme Farmers Market, Down-
nology company, has added a tracking and reporting app by Taxbot LLC, Bountiful, Utah, to its partnership program. The agreement connects zipForm Plus users with the small-business tax education resource. Also added to ZipLogix’s partnership program are Zip Your Flyer, Lynnwood, Wash., a marketing and design company that creates custom email and print fliers for the real estate industry, and SkySlope, Sacramento, Calif., a digital transaction management software provider. Websites: ziplogix.com, taxbot.com, zipyourflyer.com, skyslope.com.
ers Grove, Ill., has opened three grocery stores: 901 E. Big Beaver Road, Troy; 2025 S. Rochester Road, Rochester Hills; and 15480 Sheldon Road, Northville. Website: freshthyme.com.
iDashboards, Troy, a supplier of business intelligence dashboards, is providing its data visualization products to customers of PI Plugins, United Kingdom, a provider of business solutions, and Phoenix Systems, Newmarket, Ontario, a software and hardware service provider and reseller. Websites: idashboards.com, pho-sys.com.
EDUCATION Henry Ford College, Dearborn, and Eastern Michigan University, Ypsilanti,
are establishing the Eastern Michigan University Center at Henry Ford College. The agreement in-
Overstock Outlet has opened two
new stores, 31550 and 31614 Grand River Ave., Farmington. Telephone: (248) 957-9300. Biggby Coffee, East Lansing, has opened a location at 222 W. 11 Mile Road, Madison Heights. Telephone: (248) 291-5932. Website: biggby.com. CMIT Solutions Inc., Austin, Texas, a provider of information technology services to small and mediumsized businesses, has opened a CMIT Solutions of Greater Oakland County
franchise, 900 Wilshire Drive, Suite 202, Troy. Stuart Feravich is the president of the new location. Telephone: (248) 519-2366. Website: cmitsolutions.com. Ciena Healthcare Management Inc., Southfield, has opened a new skilled nursing and short-term rehabilitation center, Shelby Township Care Center LLC dba Regency at Shelby Township, 7401 22 Mile Road, Shelby
Sherri Welch: (313) 446-1694 Twitter: @SherriWelch
NEW PRODUCTS Jervis B. Webb Co., Farmington Hills, a subsidiary of Daifuku North America Holding Co., a provider of air-
port baggage handling systems, launched a new energyefficient baggage handling conveyor that reduces energy usage by as much as 40 percent compared to traditional motor conveyors.Website: daifukuna.com. Secure-24 LLC, Southfield, a provider of cloud-based software services for companies, introduced New Application Performance Management Service, a software information service to integrate applications monitoring and network management. Website: secure-24.com. BoostUp LLC, Detroit, an online savings platform, has launched realestate.boostup.com, which gives real estate professionals the ability to connect with active homebuyers and ease the process of saving for a down payment. Websites: boostup.com, realestate.boostup.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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in the Free Press digital efforts, which certainly fueled the decision by local management and corporate parent Gannett Co. Inc. to hire him, newspaper industry analysts said. “I’m not surprised someone from a digital background is taking charge,” said Rick Edmonds, a media business analyst with nonprofit Poynter Institute in St. Petersburg, Fla. “Gannett, for some period of time, has been doing a lot of things to signal the future is in digital.” As part of that, he expects the newsroom and business department to increasingly collaborate on projects and new products that can generate revenue. “You really have to have the two working together pretty closely,” Edmonds said.
How to operate?
journalism — had 321,297 print subscribers for the three months ending July 10, the most recent period of measurement available for Arlington Heights, Ill.-based circulation trackers Alliance for Audited Media. Andrews to a new position called Ten years ago, the Sunday Free Press had a circulation of 692,054. chief of innovation, which Anger Average weekday readership for described as a job intended to crethe Thursday and Friday print ediate new products and projects. Antions is 156,637, according to AAM. drews left the newspaper earlier Its data is supplied by the newspathis summer. pers themselves. Anger named Julie Topping as senior director of content strategy In 2005, the average weekday under Laughlin, a job intended to readership for the Free Press, which handle quality-of-life coverage was Monday-Friday then, was across all sections of the newspa346,419 subscribers. per. The rival News, which doesn’t Ashley Woods became director of have a Sunday edition, is averaging audience analysis. She’s now con88,000 subscribers for its Thursday sumer experience director. and Friday editions. Prior to those moves, Christo Nationally, vast sums of money pher Kirkpatrick was promoted to have evaporated from the newspadirector of business and local enper business: Print ad revenue last terprise in June 2014. year fell to $16.4 billion nationally, Bill Shea down from a peak for $47.4 billion in 2006, according to industry data. Digital ad revenue last year later, he was promoted to assistant managing editor for presentation reached just $3.5 billion for newspaand news desks, according to his pers. That’s because of the readership data: The majority of newspaLinkedIn profile. The 1994 University of North Dako- per readers still read the paper ta graduate also worked as a copy version, and that’s where advertiseditor at the Minot Daily News and ers are willing to pay for ads. Grand Forks Herald, both North Specifically, 56 percent of those Dakota newspapers. who consume a newspaper read it “I wouldn’t expect dramatic exclusively in print, while 11 perchanges immediately because cent also read it on desktop or lapRobert has been with us for many top computers; 5 percent also read years and has been it on mobile; in interim charge and another 11 here for the past (Huschka stood percent read it few months al- out among the in print, on ready,” said John desktop and on other Gallagher, a mobile, accordFree Press candidates ing to Nielsen Scarborough’s business rebecause he 2014 Newspaporter and wrote a) per Penetration the newsvia the room’s “very, very Report Pew Research union chairdetailed Center ’s Project man for Newspaper for Excellence and Guild Local 34022 , in Journalism. comprehensive But the digivia email. tal numbers A new collective vision continue to bargaining agreement in 2016 will statement about inch up, so the Free Press, like be one of the issues where the Free the rest of Ganon Huschka’s plate. Press can go in nett, is all-in on The newspaper digital. guild approved the future.” In January, three-year collective bargaining Joyce Jenereaux, president and Freep.com agreements in Feb- publisher of the Free Press and ranked 15th napresident ofMichigan.com tionally among ruary 2013. newspapers by “As guild presidigital traffic dent, I hope and expect to negotiate a good contract (desktop and mobile) at 10.6 milfor our members early next year lion unique visitors. Topping the list when the current contract expires,” was USAToday.com at 54.5 million. What the Free Press does is tied to Gallagher said. The Free Press has about 150 the finances of its corporate parent. newsroom employees, less than Gannett has focused on cutting half of the 300-plus it had when costs while simultaneously investing and focusing on digital news Anger was hired in 2005. gathering in recent years. A declining industry In June, Gannett (NYSE: GCI) Such declines are a function of was split into a stand-alone debtthe financial troubles faced by the free print publishing company that newspaper industry, which were retained the Gannett name while largely fueled by the shift from con- the digital and broadcast units besumer news consumption to free came a separate public company, Tegna Inc. (NYSE: TGNA). online and mobile sources. Gannett’s midyear numbers still The Free Press Sunday edition — the flagship paper with the coupons paint a picture of decline: $1.4 biland the week’s most important lion in revenue for the six months
New Free Press editor takes over an evolving newsroom Robert Huschka’s promotion to Free Press executive editor comes less than a year after his predecessor, Paul Anger, shuffled newsroom leadership. Anger promoted Nancy Laughlin to managing director — a title that in the olden days of newspapers would have been managing editor. She retired in February and was replaced by Huschka. Stephen Henderson, who won the Pulitzer Prize for commentary in 2014, became managing director of opinion and community engagement, and Anger said he wanted him to become more active in management of the newsroom. Another promotion was Nancy
Huschka assumes command of an editorial staff during one of the dates were interviewed for the job. newsiest times in Detroit’s history, Corporate parent Gannett was inas the city continues to rebuild volved in the interviewing. physically and financially after colOne of the other candidates, lapse. though, was M.L. Few details are Elrick, who won a public about “I’m not Pulitzer Prize for Huschka’s specific surprised local reporting at vision for running newspaper in someone from a the the newsroom and 2009 and now how he’ll get the digital works for WJBKTV2. best multiplatform background is Elrick, who was storytelling and a newsroom union continued aggres- taking charge. representative sive reporting out Gannett, for while at the newsof a deeply repaper, praised duced newsroom. some period of Huschka and The business time, has been called him a friend, entity that operates and also explained the joint business doing a lot of why he was interfunctions of the things to signal ested in the job. Free Press and The “The Free Press Detroit News, Michi- the future is in gan.com , declined digital.” is in desperate to make Huschka need of leadership available last week Rick Edmonds,PoynterInstitute and to find its way, after initially and to recommit scheduling time to its role as a for him to talk to Crain’s. watchdog,” he said. “It’s vital for the Huschka did talk to Columbia people of Michigan to have a Journalism Review on Aug. 11, the healthy, focused and aggressive Free day he was hired, and he told CJR Press. My goal was to make the Free that he is most excited about the Press better, even if meant someone role because it offers the opportu- else got hired and took some of my nity “to tell great stories, to right ideas.” wrongs, to be involved in the Elrick stressed that he’s happy things that deeply affect the com- with his television gig and his bossmunity.” es at Fox 2, but was concerned Huschka said that he’s aware of about what he called a “leadership the importance of his new role. vacuum” at the newspaper that “My ambition is not small. … I do prompted him to seek the editor understand the weight that comes job. with this job,” CJR quoted him as “I think the newsroom has lost its saying. way. Talent is not allowed to realize He did not go into specifics. its potential. And that potential is Joyce Jenereaux, president and tremendous, which is another reapublisher of the Free Press and pres- son I wanted the job,” he said. ident of Michigan.com, told ColumNewsroom staffers contacted by bia Journalism Review that Huschka Crain’s said Huschka was well-liked, stood out among the other candi- and a known commodity because dates because he wrote a “very, very he’s been at the newspaper for 16 detailed and comprehensive vision years. statement about where the Free Huschka came to the Free Press Press can go in the future. That was as a page designer in 1999 from The something unique and well Kansas City Star, where he had thought-out.” worked as a designer and copy ediShe also said that Huschka was tor since 1997. the “most passionate” candidate He became the design director she considered, CJR reported. for news in 2005 and editor for news She did not say how many candi- and presentation in 2010. Two years
19 ending June 28 compared to $1.5 billion a year ago. In that same time, net income declined to $86.5 million from $93.2 million the year before. Gannett does not disclose the financials of its individual properties, and Jenereaux and other partnership executives have declined to discuss Free Press finances. One of the nation’s leading newspaper analysts said Gannett’s priorities will directly affect what Huschka does with the newsroom. “This is a company where the signals are called by Gannett corporate. It is the most centralized of all the chains. It has profoundly changed a lot of its newsrooms to be digital first,” said Ken Doctor, who often analyzes the industry for the Nieman Journalism Lab at Harvard University. He noted that Gannett has invested in training and retraining on the digital front, and places emphasis on story count. Doctor also said Gannett, to its credit, also is emphasizing investigative journalism. “They know that is important to their brands,” he said. But the profit-first business strategy hinders the journalism, he added. Doctor said he’s alarmed by Gannett’s financial situation, specifically the revenue declines and the tepid results from digital and marketing solutions units aimed at offsetting those declines. “Things are getting worse. They’re not stable,” he said. “It’s a major strategic problem. The only solution that they’ve had is cutting, cutting and more cutting. They’ve tried to change editorial and business strategy, but have had no turn in fortunes of their business. They’re not replacing what they’re losing on the print side.”
The JOA The Free Press and News have separate newsrooms but share production, delivery and advertising functions under a joint operating agreement that expires in December 2025. Gannett owns 95 percent of the partnership while The News’ owner, New York City-based Digital First Media, owns the remaining 5 percent. The JOA and collective bargaining agreement have sheltered the Free Press from fully instituting some of Gannett’s staffing initiatives that have forced employees to reapply for their own jobs — measures that have drawn heavy criticism. On Aug. 3, the clock began officially ticking on an early-termination clause. The JOA states that 10 years after its Aug, 3, 2005, launch, either party may opt out if the partnership has sustained three consecutive years of financial losses. “Trying to have two papers in the same town, even with a JOA, is harder than having one paper,” Poynter’s Edmonds said, adding that just six such arrangements remain in the U.S. 䡲 Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19
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GOP bills seek new approach to renewable energy
Carrots for utilities The state already is halfway to federal compliance on the new EPA rules. That’s attributed to deadlines enacted by Public Act 295 — the Clean, Renewable Efficient Energy Act — approved under former Gov. Jennifer Granholm. This act, which expires Dec. 31, mandates that utilities offer customers energy efficiency programs and they produce 10 percent of power through renewable sources. Meanwhile, three Republican bills now in the Michigan Legislature seek to replace the sun-setting state law with a new regulatory approach. (See related story.) Regardless of how state energy laws are crafted, the new EPA rules contain many incentives for the state’s utilities, including such powerhouses as DTE Energy Co. and Con sumers Energy Co., to reduce carbon emissions and greenhouse gases — such as the anticipated effect of being able to record a better ROI on their renewable infrastructure. David Mengebier, chief compliance officer at Jackson-based Consumers, said whatever legislation is approved this year, the Clean Power Plan will stimulate jobs in Michigan. “It has the poDavid Mengebier: tential to create Plan will prompt new jobs in the job growth. clean energy sector,” he said. “But I wouldn’t limit (job creation) to biomass, solar, wind and hydroelectric. We will have (jobs) in energy (efficiency projects) and new natural gas plants.” In addition, incentives for residential customers to install energy efficient appliances, windows and other upgrades are expected to spur a range of spending and jobs. Irene Dimitry, DTE’s vice president of business planning and development, said the Detroit-based energy company has not conducted studies on the employment impact from the EPA rules, but expects jobs will be created. “We expect to Irene Dimitry: DTE invest in generato invest $8 billion. tion ($8 billion over the next several years) for a number of reasons, and the Clean Power Plan is one,” said Dimitry. So far, renewable energy job creation in Michigan places the state fourth in the nation behind Nevada, California and New York, said Envi ronmental Entrepreneurs. But not everyone believes Michigan is on the right path. Rep. Aric Nesbitt, R-Lawton, said while the clean energy sector may add jobs, increased regulation and higher costs from the EPA rules will create a net loss of jobs in Michigan. “How do new regulations that
By Jay Greene jgreene@crain.com
Three key Republican bills in the Michigan Legislature seek to replace Public Act 295 — which provides state mandates on renewable energy — with a new regulatory approach known as integrated resource planning. An IRP, which would be approved for each utility by the Michigan Public Service Commission , would be part of the rate-setting regulatory process that forecasts utility supply and customer demand for electricity. It would evaluate energy production alternatives, including new generation gas-fired plants, renewable energy sources, power purchases and efficiency programs based on ensuring reliable supply at the least cost. Supporters say IRP offers the state more control and flexibility on electricity generation that will provide customers with better rates. Critics say the plan could work against progress in growing the state’s renewable power industry.
takes money from somebody else, destroy incentives for businesses … create jobs?” said Nesbitt, who also is chairman of the House Energy Committee. “You may create jobs in one area, but mandates at the end of the day will raise costs to businesses and cost jobs in other areas,” Nesbitt said. What about job losses when coalfired plants are closed? Mengebier said Consumers expects to offer different jobs to interested workers at the seven coal-fired plants it plans to close by 2016. “As we change out our older power plants and convert to gas, we see a net job increase ahead,” said Mengebier. “We are working with the cities of Muskegon and Luna Pier, where we have two plants closing down,” he said. “We are looking at alternative uses for the port to stimulate investments in other types of businesses.”
Beating benchmarks? Mark Barteau, director of the University of Michigan Energy Institute , said the EPA Clean Power Plan could significantly boost renewable energy in Michigan. But he said the state should aim for even loftier goals. Earlier this year, the Energy Institute issued a report that outlined opportunities for significantly increasing electricity production from wind and solar sources, Barteau said. The UM plan said Michigan would meet the final EPA requirements easily by 2030 by simply establishing a renewable energy portfolio standard of 25 percent by 2025. Average cost increases per household would be $2.60 per month by 2025, or a 3 percent price hike. Rebecca Stanfield, Midwest director of the National Resources De fense Council , said Michigan has
changing the method by Sponsors of the proposed which residential and bills include Rep. Aric small business rooftop Nesbitt, R-Lawton; Sen. solar is reimbursed by Mike Nofs, R-Battle Creek; utilities — could work and Sen. John Proos, R-St. to reduce investment in Joseph. alternative electricity Nesbitt said federal regsources. ulations calling for a “Replacing the renew32 percent reduction in able portfolio standard carbon emissions issued Mark Barteau: this month by the U.S. En - New plan could hurt with an integrated revironmental Protection renewable power. source plan system and Agency will provide incengutting net metering will tives for utility companies to con- have a negative impact on renewtinue energy efficiency programs able power generation in Michigan, and renewable energy investments will harm renewable energy comwithout mandates contained in the panies, and will make it harder to 2008 energy law. meet EPA requirements,” Barteau Mark Barteau, director of the said. University of Michigan Energy Insti Since 2008, Michigan manufactute , said the EPA’s Clean Power turers and businesses have develPlan adds powerful incentives for oped one of the nation’s strongest utilities to significantly invest in ad- renewable energy workforces, said ditional renewable energy in the Jim Dulzo, senior energy policy state. specialist with the Ground Works But Barteau said the pending Center for Resilient Communities in legislation that removes PA 295’s Traverse City. “We make towers, blades, cells mandates for energy efficiency and renewable energy — along with and gears for wind turbines,” Dulzo
said. “It behooves state legislators to make a commitment to these industries and not just talk about the free market and opposition to mandates.” But Nesbitt said his bill, anchored by IRP, has the support of Gov. Rick Snyder. Snyder’s spokeswoman, Sara Wurfel, said in a statement that the governor is working closely with the Legislature to create a comprehensive energy plan that could generate 19 percent of power from renewable energy. “The governor believes that we can and should hit 30 to 40 percent of Michigan’s power coming from its cleanest sources (energy waste reductions and renewable energy) by 2025,” Wurfel said. Valerie Brader, director of the Michigan Energy Agency , is studying the regulations to evaluate the implications. She said she plans on making a statement in September about the Clean Power Plan.
been in the top 10 nationally for creating renewable energy jobs the past five years because policies in effect encourage wind, solar and other renewable industries. “The EPA’s clean energy investment program encourages states to build projects in low-income neighborhoods by 2020,” Stanfield. “This will speed up their investments (in wind and solar).”
Rapids-based Astraeus Wind and Canton-based Danotek Motion Tech nologies. There’s also a network of specialty companies in other renewable areas. Gary Melow, director of Ithacabased Michigan Biomass, a business coalition of wood-fired power plants, said the Clean Power Plan also can encourage further generation of home-grown energy. Michigan Biomass has provided woodfueled power, supporting 700 jobs, for more than 30 years, he said. And Lee Mueller, co-member manager of Boyce Hydro Power LLC, a Sanford-based family-owned business that owns four hydroelectric plants, said renewable energy like hydro has proven to be cost-competitive with fossil fuel sources. Boyce Hydro sells 11 megawatts of power to Consumers annually, he said. Jim Dulzo, senior energy policy specialist with the Ground Works Center for Resilient Communities in Traverse City, said the Clean Power Plan creates a path for Michigan to encourage more renewable energy development and efficiency programs. “By continuing our investment in renewables — maybe increasing it only slightly — we can be ahead of the curve,” Dulzo said.
Michigan power mix Currently, of Michigan’s 10 percent renewable energy production, 60 percent is from wind, 16 percent from hydroelectric, 14 percent from biomass, 5 percent from landfill gas, 4 percent from municipal solid waste and 1 percent from solar, the PSC said. Eventually, utility companies will build and own more large-scale solar projects and new gas-fired power plants to comply with the federal rules, said Sunil Agrawal, president of Nova Consultants Inc., a Novi-based engineering and environmental company. Since 2009, Michigan has developed 1,200 megawatts of renewable energy, including 28 megawatts of solar from DTE and Consumers. The Lansing Board of Water and Light also plans a 5-megawatt solar project. However, Consumers and DTE this year have proposed up to 60 megawatts of community solar projects. “We also will have more solar, more wind, more biomass and hydroelectric, but unless rooftop solar continues in the residential and small business markets, (that) growth will not be as strong,” said Agrawal, whose company provides engineering services for utility companies, public and private businesses and homeowners. Over the next five years, Agrawal predicted, Michigan’s power com-
panies could invest in more than 200 megawatts of solar projects. Since 2010, wind power costs have dropped 50 percent and commercial solar panels are down 49 percent. Solar is currently the fastest-growing renewable resource, accounting for 36 percent of new capacity last year, up from 29 percent in 2013. Mark Hagerty, president of Commerce Township-based Michigan Solar & Wind Power Solutions, said the federal Clean Power Plan is good for his company and the renewable energy industry in the state. Over the past two years, Hagerty said his rooftop solar installation business has grown from nine jobs in 2014 to about 55 jobs this year. “Our business has grown exponentially the past two years,” Hagerty said. Although critics talk about Michigan being a poor state for solar power production, due to fewer sunny days than some other parts of the country, solar panels are more efficient in relatively colder climates, experts said. Then there’s wind. Rick Wilson, vice president of operations for Traverse City-based Heritage Sustainable Energy, which operates wind farms in Rubicon Township, McBain and Garden Township, said wind energy can further expand in Michigan under a combination of federal regulations and state legislation. “Wind is on par with coal for costs with none of the pollution,” Wilson said. “But we are capped at 10 percent under state law. We could meet 47 percent of demand.” Heritage purchases wind turbines from Monroe-based Ventower , one of 121 Michigan companies, which employ 4,000 workers, that manufacture or supply wind components. Other Michigan wind companies include Eaton
Jay Greene: (313) 446-0325 Twitter: @jaybgreene
Jay Greene: (313) 446-0325 Twitter: @jaybgreene
BANKRUPTCIES The following business filed for protection in U.S. Bankruptcy Court in Detroit Aug. 7-13. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. JSBAR LLC, 221 Walper Ave., Clawson, voluntary Chapter 7. Assets and liabilities not available. Natalie Broda
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LevelEleven looks to next level after $2M funding round By Tom Henderson thenderson@crain.com
LevelEleven LLC , a Detroit-based company that makes cloud-based sales-motivation software and smart apps, has closed on a funding round of $2 million. The funding, led by a new investor, NCT Ventures of Columbus, Ohio, comes three months after the company moved out of its incubator space in the Madison Building in downtown Detroit into 5,000 square feet in the former Lane Bryant Building at 1520 Woodward Ave., one of Dan Gilbert’s buildings. The investment is from the $50 million NCT Ventures Fund II. It brings the total amount of funding LevelEleven has raised to $8.4 million since it was spun off from Pleasant Ridge-based ePrize Inc., now HelloWorld, in October 2012 with $1 million in funding from Detroit Venture Partners, DVP is a venture capital firm founded in 2010 by Gilbert, Brian Hermelin and Josh Linkner. Many of its companies are housed in the Madison Building. Bob Marsh had been the senior vice president of sales strategy at ePrize. “It’s really important when you can add a new investor,” he said. “It gives you that validation that you are on the right track.” In June, NCT was part of a $4.2 million funding round in another of DVP’s portfolio companies, Detroit-based Are You A Human LLC. The name LevelEleven pays homage to the cult film classic “This Is Spinal Tap,” whose band members can crank up amplifiers to 11 on a 10-point scale. Marsh said the company will use the funding to hire a COO and add to its eight-person sales team and seven-person engineering team. He said the company employs 25 and plans to add five to 10 by the end of the year. “Raising capital is all about accelerating growth,” he said. “We’ve got some real momentum in the marketplace, and it’s time to accelerate that, which means investing
heavily in marketing, sales and engineering.” He said new customers this year include Syman tec , Staples , Rocket Fuel Inc.
and a division of EMC Software. Other customers include C o m c a s t , eBay Stanley and Black & Decker. Bob Marsh: ”We’ve got some Marsh said real momentum in the company is the marketplace. generating revIt’s time to enue at a rate accelerate that.” of $2 million a year and wants to increase that by 150-200 percent in the next year. He said that growth should allow the company to raise a much larger round of venture capital, $8 million to $10 million, by the end of next year. The new round included some angel investors, said Marsh. It did not include more funding from DVP, he said. Other past investors include Salesforce.com ; Chicago-based Hyde Park Ventures ; Detroit-based First Step Fund; Rick Inatome, the founder of Inacomp Computer Cen ters ; and Mashburn Justice Capital Partners, an investment firm founded by Jamal Mashburn, a former player in the National Basketball As sociation , and Winston Justice, a former player in the National Foot ball League. In April, LevelEleven was the only early-stage tech company from Michigan and one of 12 in the U.S. to be invited to the annual Google Demo Day in Mountain View, Calif. In September, LevelEleven will have a booth and Marsh will speak at the annual Dreamforce event in San Francisco, a sales, marketing and productivity conference that attracts more than 100,000 attendees. 䡲 Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2
INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: American Institute of Preventive Medicine ....116 6 Arch Global ..........................................................6 Blue Cross Blue Shield of Michigan ................112 C.S. Mott Children’s Hospital ..........................112 20 Consumers Energy ..........................................2 Detroit Free Press ..........................................11, 19 20 DTE Energy ........................................................2 John D. Dingell VA Medical Center..................114 21 LevelEleven ........................................................2 4 Michigan Dept. of Environmental Quality ......4 20 Michigan Energy Agency ................................2 Michigan Public Service Commission ..............11
20 Michigan Solar & Wind Power Solutions ......2 New Center Community Services ..................115 New Economy Initiative ....................................77 20 Nova Consultants ............................................2 Oakwood Foundation ......................................115 PACE Southeast Michigan ................................111 Priority Health....................................................113 The Recovery Project........................................114 3 Royal Dearborn Hotel & Conference Center ..3 St. Joseph Mercy Health System ....................113 20 University of Michigan ....................................2 U.S. Environmental Protection Agency............11 World Heritage Air Museum ............................118
HOTEL FROM PAGE 3
tion of the former Holiday Inn of Southfield , a project reported in Crain’s in late July. “Here, we can show up with our investors and get nice solid pieces. ... It’s a way to grow together with a place,” Gude said. “You can still do a lot with a little here.”
Money differences M1T’s desire to make a mark in metro Detroit may not happen in Dearborn. Robert Timsit, a member of the hotel’s Israel-based ownership group, Royal Realties LLC, said in an email that he has directed the broker for the hotel, New York-based Savills Studley’s U.S. Capital MarketsHotel Group , not to entertain the
M1T bid because of a lawsuit and other issues related to the previous failed bid. Royal paid $15.45 million for the Hyatt in 2011 after the original owner, Ashford Hospitality Trust Inc., defaulted on its loan. Royal is asking $40 million for it today. “We got a bid at $30 million, which we refused,” Timsit said. “We will not sell the hotel (for) less than $35 million,” he said. “To build this hotel today (would) cost more than $150 million.” Located across from Ford Motor Co.’s world headquarters along the Southfield Freeway, the 14-story hotel is the state’s second largest and includes 62,000 square feet of meeting space. Gude declined to say how much M1T is bidding on the property, citing a nondisclosure agreement. But he said the hedge fund sees the value closer to the mid-$20 million range. M1T believes it can increase cash flow and is interested in holding the property long term, Gude said. “To make (the Dearborn hotel) financeable, it’s a bit tricky; the cash flows and profit are low,” he said. “But if you cut all the fat out, there’s a few hundred thousand profit annually.” If M1T is successful in its bid, it is likely to look at a plan to shut down the upper rooms of the hotel to “give its balance sheet a rest” while it figures out long-term options, such as adding an extended-stay component, Gude said.
New bids M1T and Atmosphere attempted to purchase the hotel through a joint purchasing company, Adoba Capital, in fall 2012, after Hyatt Corp. pulled out. Atmosphere managed the hotel while due diligence was being performed, Gude said. That bid ended when the relationship between Atmosphere and Royal disintegrated. Atmosphere filed a breach-of-contract lawsuit early in 2014 after Royal sought to end its management contract. The hotel also saw a near-foreclosure early this year by Wayne County for nonpayment of property taxes. Royal and Atmosphere reached a confidential settlement in the lawsuit last fall. And Royal resolved the
tax issues and other debts owed to the city of Dearborn early this year before putting the hotel up for sale in mid-June. Marc Magazine, executive managing director of Savills Studley’s U.S. Capital Markets-Hotel Group, declined to comment on whether M1T has bid, but said there have been “a lot of people looking at the property.” “The first round of bids is coming in, and we’re happy with the response we’re getting,” he said.
Ability to buy? Among other things, Royal alleged in the lawsuit that Adoba Capital did not have the financial backing needed to purchase the hotel. Not so, said Gude. “We’ve always had the ability to buy,” he said. M1T, which has been in business for a decade, Gude said, is managing about $300 million in investments from its principals and a small group of institutional investors. About $90 million of that is in its hospitality fund. It has property and investment portfolios in the New York area and other major cities such as Houston, Miami and Los Angeles, he said, focused largely on health care services and hotel-anchored properties and companies. In November 2012, as Atmosphere took on management of the former Hyatt, M1T invested $75 million in Adoba Capital to buy properties to expand the Adoba Eco Hotel & Suites’ “green” hotel brand. A year later, M1T invested $3.4 million in Cloud Medical , a health care IT company focused on developing hardware and software systems to minimize inefficiencies related to compliance and auditing, giving providers more control over medical procedures, processes and records. M1T is also an investor in the property improvement plan for the New Ebony Hotel in central Harlem and a majority owner in a 300-unit planned hotel development, the Liberty State Park Hotel , in Jersey City, N.J., Gude said. The latter hotel, which Gude said has preliminary approvals, would be across from Liberty Rising , a 90story and casino development proposed by Reebok founder Paul Fireman. Gude said he believes the first bid came apart when “we suggested an earn-out of the property by about 10 percent.” Through the proposed arrangement, M1T would have paid Royal 90 percent of the purchase price and the remainder out of future profits, Gude said. Such arrangements are protection against issues a buyer doesn’t see coming. Gude believes Royal will entertain M1T’s bid in the end “because it will be the best offer on the table and they know we have the capability and resources to reposition the property.” “Ultimately, I think M1T’s money is as good as anyone’s,” he said. 䡲 Sherri Welch: (313) 446-1694 Twitter: @SherriWelch
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CRAIN’S DETROIT BUSINESS www.crainsdetroit.com Editor-in-Chief Keith E. Crain Group Publisher and Editor Mary Kramer, (313) 446-0399 or mkramer@crain.com Associate Publisher Marla Wise, (313) 446-6032 or mwise@crain.com Executive Editor Cindy Goodaker, (313) 446-0460 or cgoodaker@crain.com Managing Editor Jennette Smith, (313) 446-1622 or jhsmith@crain.com Director, Digital Strategy Nancy Hanus, (313) 4461621 or nhanus@crain.com Managing Editor/Custom and Special Projects Daniel Duggan, (313) 446-0414 or dduggan@crain.com Assistant Managing Editor Kristin Bull, (313) 446-1608 or kbull@crain.com Senior Editor/Design Bob Allen, (313) 446-0344 or ballen@crain.com Senior Editor Gary Piatek, (313) 446-0357 or gpiatek@crain.com Research and Data Editor Sonya Hill,(313) 446-0402 orshill@crain.com Web Producer Norman Witte III, (313) 446-6059 or nwitte@crain.com Editorial Support (313) 446-0419; YahNica Crawford, (313) 446-0329 Newsroom (313) 446-0329, FAX (313) 446-1687 , TIP LINE (313) 446-6766
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WEEK Auto Club Group CEO to retire next year EO Charles Podowski of Dearborn-based The Auto Club Group, which includes AAA of Michigan, will retire effective March 2016. Joseph Richardson Jr., recruited from the Farmers Insurance Group, was appointed CEOdesignate and will become CEO after Podowski steps down.
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ON THE MOVE 䡲 The Henry Ford Village Foundation in Dearborn named Stan Simek executive director. He succeeds Ryan Ambrozaitis, now chief development officer at Vista Maria.
Simek had been major gifts officer at Walsh College. 䡲 Dennis Muchmore, Gov. Rick Snyder’s chief of staff, will retire in January but continue to advise the administration on special projects, his office said. Muchmore will be replaced by Jarrod Agen, Snyder’s communications director. 䡲 Eric Kracht, Detroit-based vice president of sales for Fox Networks, was named president of the Adcraft Club of Detroit, a professional development and networking organization for metro Detroit advertising and marketing. 䡲 Troy-based auto supplier Delphi Automotive plc elected Bethany Mayer, president and CEO of California-based telecommunications firm Ixia, to its board of directors, effective Oct. 1.
COMPANY NEWS 䡲 Thai Summit America Corp. this month will begin a 44,000-squarefoot expansion in Howell. The subsidiary of Thailand-based Thai Summit Group plans to spend $52.5 million to expand metal stamping operations in Livingston County by 2017. 䡲 Detroit-based Asterand Bioscience Inc. announced it has acquired AdeptBio LLC, a Memphis, Tenn.-based biobank that specializes in procuring human tissue specimens. Terms of the deal were not announced. 䡲 The Humane Society of Huron Valley is on the prowl for a leased location in Ann Arbor for a new “cat café” to open next winter. The society is seeking a way to relieve the cramped quarters for homeless cats at its main site in Ann Arbor.
OTHER NEWS 䡲 The Wayne County Commission approved a consent agreement with the state of Michigan, allowing the county to bolster its finances and avoid bankruptcy, Bloomberg reported.
ON THE WEB AUG. 10-14
Detroit Digits A numbers-focused look at the week’s headlines
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The acreage of Maple Lane Golf Club in Sterling Heights, acquired by Auburn Hills-based residential development company Moceri Cos. The 54-hole course had been owned by the Roehl family for 90 years.
24 The credits required to earn a brewing and distillation certificate from Schoolcraft College. The Livonia-based community college will begin offering the program in the fall semester. It plans to install a $1 million, 217-gallon batch oncampus brewery as part of the curriculum.
0 The number of viable proposals submitted to the city of Detroit for redevelopment of the R. Thornton Brodhead Naval Armory
on Jefferson Avenue. The city issued requests for proposals in 2003, 2010 and this year for redevelopment of the site, but has come up empty each time.
䡲 A wealthy German family is equity partner in an investment group that purchased a 38-unit apartment building near the east Detroit riverfront for $1.9 million. The family, which wasn’t identified, is at least part owner of 1000 Van Dyke Investments LLC, which purchased Van Dyke Manor this month from Greenwood Village, Colo.-based Triton Investments Co. 䡲 Peter Allen, president of Ann Arbor-based developer Peter Allen & Associates, and three investment partners have purchased a building, have another under contract and are trying to buy the remaining buildings on Woodward Avenue between Milwaukee and Baltimore avenues in Detroit’s New Center for a redevelopment with new apartments, retail and office space. 䡲 Twenty-seven buildings totaling nearly 192,000 square feet of space throughout the city have been approved for consideration to be the sites of new and expanding Detroit businesses through the Motor City Match program. 䡲 Voting has opened at hatchdetroit.com to choose four finalists among 10 semifinalists in the Comerica Hatch Detroit contest presented by Opportunity Detroit. The annual contest awards cash and pro bono legal services, advertising, accounting and IT services for the best new, locally based
retail business plans. The winner will be announced Aug. 28 at the Hatch Off event. 䡲 To obey federal law for disability access, Michigan Stadium will seat 2,300 fewer fans for football games and non-football events, the University of Michigan athletic department said. The new capacity, still college football’s largest, is 107,601, down from 109,901. UM also said season ticket holders will be able to permanently sell their seats every year, for a fee, in November and December. 䡲 The University of Michigan said it again has processed and reviewed a record number of freshman applications — 51,760 for a fall class of about 6,000 at its Ann Arbor campus, AP reported. It is the ninth year in a row of increases. 䡲 State and local governments across the U.S. should not assume Detroit’s Chapter 9 filing is the only solution for distressed municipalities, but the city is a good case study for the importance of early state intervention in community fiscal troubles, said a report from Philadelphia-based The Pew Charitable Trusts. 䡲 Executive Vice President Paul Hogle will lead the Detroit Symphony Orchestra through October while President and CEO Anne Parsons is on sabbatical in China. Also, the DSO is launching an ondemand archive of its webcast performances. 䡲 Workers began installing windows at the shuttered Michigan Central Station train depot. The project is part of a land transfer deal between building owner Manuel “Matty” Moroun’s Detroit International Bridge Co. and the city. 䡲 The four-county metro Detroit housing market continued to climb as total sales rose 10.3 percent year-over-year and median sale prices went up 7.5 percent, according to data from by Farmington Hills-based Realcomp Ltd. II.
RUMBLINGS Longtime journalist honors ‘Orby’ in new anthology eteran Detroit journalist Rob St. Mary’s history of one of the city’s most iconic arts, culture, music and humor publications hits store shelves Sept. 1. The 272-page glossy paperback, The Orbit Magazine Anthology: ReEntry, from Wayne State University Press , includes 369 photos and retails for $34.99. The irreverent alt-monthly was published from 1990-1999 and featured a globe-headed cartoon logo named Orby. Film director Quentin Tarantino wore an Orby T-shirt in the 1994 blockbuster “Pulp Fiction.” The magazine was the brainchild of Jerry Peterson, better known as provocateur Detroit artist Jerry Vile. He’s more known these days as the founder and chief organizer of the juried erotic art exhibition “The Dirty Show.” Vile wrote the forward for the new book, which also includes information on Vile’s two previous magazines, White Noise and Fun. St. Mary chronicles the colorful history of all three magazines, with heavy emphasis on Orbit, and he includes information about the dynamics of alt publishing. “When Orbit was around, I didn’t know how singular it was. I didn’t realize that we had something special that not every city in America had. Also, as I talked to people, I realized that Jerry Vile is one of the most important people in Detroit arts history in the past 35-plus years,” he said. St. Mary in July began hosting the Detroit Free Press’ “Detour” podcast about the city’s arts and entertainment scene. He’s also marketing and program manager at Detroit crowdfunding startup Patronicity, and from 2008-13 was a reporter at WDET 101.9 FM. St. Mary has author appearances scheduled, beginning at Book Beat in Oak Park at 7 p.m. Sept. 10. More de-
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For the love of classic cars
Orbit magazine founder Jerry Peterson wrote the forward to The Orbit Magazine Anthology: Re-Entry. tails can be found at facebook.com/orbitbookdetroit and
on Twitter at @orbitbook.
Granholm on the docks Former Michigan Gov. Jennifer Granholm will be in town Sept. 18 at the Detroit Yacht Club on Belle Isle. There, she will speak on “lessons and invigorating narratives on economic stimulus, job growth, and the power of change” for a breakfast held by EcoWorks (formerly WARM Training Center). The announcement of the event bills Granholm as “one of the nation’s leading authorities on clean energy policy” and credits her with “introducing strategies to invest in new alternative energy sources to create domestic jobs.” Since her second term as governor ended in 2011, Granholm has worked as a host for the now-defunct Current TV channel launched by Al Gore and as a clean energy adviser to Pew Charitable Trusts. She is a senior research fellow at the Berkeley Energy and Climate Institute. The event is scheduled from 7:3010 a.m. Tickets are $75. For more information, call (313) 894-1030.
Go wild for fish, game Detroit Young Professionals and Gourmet Gone Wild will host an
Last week, in the spirit of the Woodward Dream Cruise, we asked readers to submit photographs of their classic cars. Reader Judy Stern gave us this photo of a 1965 Corvette being inspected by a coordinate measuring machine — now that’s a tuneup. Both the machine and the car are owned by Dale Robenault, president of Canton Township-based Inspec Inc.
event called Riverfront Takeover on Wednesday at Milliken State Park and Harbor to provide a taste of wild fish and game. Lansing-based Gourmet Gone Wild promotes wild fish and game foods to young professionals. Activities will include fishing with Gourmet Gone Wild fishing instructors, a live cooking demonstration and roasting marshmallows. A fishing license is required if attendees want to fish; gear will be provided. The event will be held from 6 to 9 p.m. Registration costs $10 for DYP members and $20 for nonmembers. Details: (248) 259-3001.
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