Crain's Detroit Business, Sept. 21, 2015 issue by Crain's Detroit Business

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CRAIN’S Readers first for 30 Years

DETROIT BUSINESS

A trend reset puts new spin on bowling alleys, PAGE 3

SEPTEMBER 21-27, 2015

“There are plenty of opportunities; it’s picking the right ones.”

Agent for change Arn Tellem powered up to be Gores’ point man for expansion By Bill Shea bshea@crain.com

GLENN TRIEST

Haifa Fakhouri sees opportunity for NorthTown as Syrian refugees relocate.“We believe in this revitalization project,” she says.

One square mile, thousands of lives Local activists want to rebuild NorthTown with help of Syrian refugees By Dustin Walsh dwalsh@crain.com

aifa Fakhouri, president and CEO of the Arab American and Chaldean Council, has a vision for Detroit — specifically, one square mile of the city. A nearly 20-year-old plan to redevelop an area on Seven Mile Road, now known as NorthTown and formerly called Chaldean Town, was stalled several years ago after the first phases were completed. Now, Fakhouri and the ACC see opportunity coming from war-torn Syria, where millions have fled seeking asylum across the eurozone to realize the NorthTown project, including new multifamily Section 8 housing. She believes as many 5,000 Syrian families seeking refugee status could call NorthTown home and revitalize the blighted neighborhood. Fakhouri said the placement of refugees will jumpstart the local economy and create a vibrant

district, much like Greektown or Mexicantown, but roadblocks remain. “We’ve met with several organizations and leaders, but it’s moving slowly,” Fakhouri said. “We can turn the city around and repopulate that area as more and more Syrian refugees need a place to go. We believe in this revitalization project; it will add to the social mosaic of Detroit.” Tom Kelly, director of government affairs for law firm Clark Hill PLC in Washington, D.C., and adviser to the ACC, said refugees can stabilize the neighborhood while offsetting population losses in the city. “That stretch of Seven Mile could be used as an anchor to build up the neighborhood,” Kelly said. “The wave of immigrants coming into the region stopped 30 years ago and these neighborhoods desperately need attention. This isn’t reinventing the wheel but something other major cities have done SEE SYRIA, PAGE 28

NEWSPAPER

crainsdetroit.com Vol. 31 No 38

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Detroit Pistons owner Tom Gores wants to get into the Detroit real estate market as part of his still-evolving plan to carve out a larger role for himself, the basketball team and his businesses locally and statewide. What that involvement downtown looks like is unknown for now, but it will take shape in coming months after talks with Dan Gilbert, the Ilitch family and others. “We will look at real estate downtown,” confirmed Arn Tellem, the longtime sports dealmaker Gores hired in June to orchestrate his expansion plans, in a wide-ranging interview with Crain’s on Wednesday. Tellem, 61, spent 30 years as one of the most influential agents in American sports, primarily doing billions of dollars in deals for players in the National Basketball Associ ation and Major League Baseball. Now, he’s the powerful vice president of Gores’ Palace Sports & Enter-

tainment LLC, the umbrella management company for the Pistons, the Palace of Auburn Hills and other venues. Last week was his first operSEE AGENT, PAGE 29

Taubman CFO leaves to pursue COO or CEO job By Dustin Walsh dwalsh@crain.com

Lisa Payne is stepping aside as CFO of Taubman Centers Inc. at the end of the year. But she’s not retiring. The longtime confidante to the Taubman family wants another challenge — specifically, to be the top leader of another organization. “My plan is to think about a leadership role,” said Payne, 56. “I’ve loved every year I’ve worked

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Arn Tellem: “We will look at real estate downtown.”

for Taubman. … I have a lot of Lisa Payne passion for managing people, making a company better, and I’m interested in doing that as a CEO or COO.” Payne has been CFO since 1997 and has seen the total return on investment in shares of Taubman Centers (NYSE: TCO) rise 1,254 percent in that time, the company said in a release last week. But she was never going to be CEO there because it’s run by the Taubman family. Moving on was the best decision at this stage in her career. And Robert Taubman, chairman, president and CEO of Taubman Centers, understood it, she said. Eric Hohauser, vice president of

PAGE 11 SEE PAYNE, PAGE 25

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MICHIGAN

America said in a release.

BRIEFS Tribe prevails in court fight over plans for Lansing casino A U.S. District Court judge in Grand Rapids dismissed a lawsuit against leaders of the Sault Ste. Marie Tribe of Chippewa Indians in a dispute over plans for a $245 million offreservation casino in downtown Lansing. The decision is the second time a federal court has ruled in favor of the Upper Peninsula tribe. The Sault tribe is also pursuing a casino in New Boston near I-275 and Detroit Metropolitan Airport . Tribal leaders are waiting for a decision from the U.S. Department of the Interior on whether land it purchased in Lansing and New Boston can be held in trust, a requirement to opening a casino. A spokeswoman for Attorney General Bill Schuette, who sued to block the casino, said he is reviewing the ruling. If he appeals, the decision would be sent back to the U.S. Court of Appeals for the 6th Circuit. Lindsay VanHulle

Perrigo sues Mylan over ‘false’ claims in takeover bid Perrigo Co. plc sued Mylan N.V. in U.S.

District Court for the Southern District of New York , claiming Mylan misled

investors on key parts of its $27 billion hostile takeover bid for Perrigo. The lawsuit asks a judge to declare information that Mylan sent to Perrigo shareholders “materially false and misleading” and in violation of federal securities laws. MiBiz reported. Dublin, Ireland-based Perrigo, which maintains its headquarters in Allegan, filed the lawsuit days after directors of the maker of over-thecounter drugs once again rejected Mylan’s offer and urged shareholders to take no action, arguing it significantly undervalues the company.

Chile firm plans world’s biggest particleboard mill Arauco, a Chile-based lumber pro-

cessing company, plans to create up to 250 full-time jobs at the world’s largest particleboard mill it plans to build on 600 acres purchased from Grayling Township, MLive.com reported. The $325 million investment will be the single largest continuous particleboard press in North America and one of the highest-capacity presses in the world, Arauco North

Groundbreaking is expected in late 2016, with production starting in the second half of 2018. Arauco already runs nine plants in the U.S. and Canada. According to UpNorthLive.com, Kirtland Commu nity College has pledged $1 million in training for potential workers at the mill, which could spin off hundreds of support jobs in the area.

Kellogg plans Africa growth by buying half of Nigeria firm Battle Creek-based Kellogg Co. agreed to buy 50 percent of Nigerian food distributor Multipro for $450 million and is creating a joint venture with Tolaram Africa to help expand on the continent, Bloomberg News reported. The Tolaram venture includes an option for Kellogg to buy a stake in the African company in the future, Kellogg said in a statement. Costs associated with the Multipro deal will reduce earnings per share by 1 cent in the third quarter.

$5.5M gift is largest given to Davenport endowment Grand Rapids-based Davenport University received a four-year, $5.5 million gift to its endowment fund from the M.E. Davenport Foundation, The Associated Press reported. Davenport said it’s the largest single gift in the university’s history and brings giving to Davenport University by the independent family foundation

to more than $15.4 million. With the donation, Davenport has received more than more than $18 million toward a $25 million goal for its Vision Campaign. Davenport is a private, nonprofit university with nearly 9,000 students at campuses across Michigan and online.

MICH-CELLANEOUS 䡲 The Michigan Employment Rela tions Commission ruled that the Michigan Education Association’s onemonth window to quit the union — specifically, August — is too restrictive and violates state law. The case involves a 2012 right-to-work law making financial support of unions voluntary. The union may appeal to the state appeals court. 䡲 Flint Mayor Dayne Walling asked Gov. Rick Snyder for $30 million to help improve the city’s water system and replace lead service pipes, The Flint Journal reported. Virginia Tech researchers have said residents shouldn’t drink or cook with city water without flushing lines or using a filter. The U.S. Environmental Protection Agency

says Flint’s water is within levels allowed for lead. Separately, a Genesee County judge dismissed a lawsuit that sought to force Flint to stop using the Flint River for drinking water. 䡲 Jackson-based Consumers Energy plans to purchase power from Geronimo Energy’s new 100-megawatt wind farm planned for the Thumb region, The Associated Press reported. As part of the agreement, Con-

INSIDE THIS ISSUE CALENDAR . . . . . . . . . . . . . . . . . . . . . . . 21 CAPITOL BRIEFINGS . . . . . . . . . . . . 25 CLASSIFIED ADS . . . . . . . . . . . . . . . . 25 DEALS & DETAILS . . . . . . . . . . . . . . . 22 MARY KRAMER . . . . . . . . . . . . . . . . . . . 8 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 8 OTHER VOICES . . . . . . . . . . . . . . . . . . . 9 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 23 RUMBLINGS . . . . . . . . . . . . . . . . . . . . 30 WEEK ON THE WEB . . . . . . . . . . . . . . 30

COMPANY INDEX: SEE PAGE 29 sumers will have an option to purchase the wind farm. Consumers currently purchases power from seven Michigan wind farms, owns and operates two wind farms and is working on solar power projects. 䡲 The state will open a European office to increase trade and exports of Michigan-made goods, Gov. Rick Snyder’s office said. The Michigan Europe Center will consist of offices in London and Berlin and be housed within the Michigan Economic Devel opment Corp.

䡲 Kent County hotels reported 81.2 percent occupancy in July, a record for the county’s tourism industry, MiBiz reported, citing information from Experience Grand Rapids, the agency that markets the region. The data come from Hendersonville, Tenn.-based Smith Travel Research, a hotel industry research group. 䡲

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MEDC adjusts its belt Lane owners adapt to entertainment trends, high renovation costs

State agency mulls long-term strategy after budget, job cuts By Lindsay VanHulle Crain’s Detroit Business/Bridge Magazine

Each has its own story behind its closure. For example, Sunnybrook, with its 58-lane alley, 27-hole golf course and motel, fetched what sources said is about $12 million for what is expected to be a large-scale redevelopment announced later this month. Sunnybrook overall had been performing well. Its 2,800 league bowlers were the most in the state, according to John Casbar, the bowling alley’s business and marketing director. “It wasn’t due to the economy or the construction of the bridge on 17 Mile,” said Casbar, also executive director of the

LANSING — With immediate budget pressures resolved, the Michigan Economic Development Corp. is looking to develop a new long-term plan in which it operates as a smaller, nimbler agency. Starting Oct. 1, the state’s economic development agency will have fewer employees than it did in December 2001, the first year employment records are available. The only time the agency was leaner was during a stretch from 2005 to 2008. Revenue losses have prompted the cuts of 65 employees and 27 percent of the Doug Rothwell: MEDC’s overall budget in less Hopes the budget than two weeks. That reduc- has hit bottom. tion will force its leaders to start thinking long term about alternative revenue sources and how to offer its core programs with fewer dollars. “I would hope we wouldn’t see any future cuts,” said Doug Rothwell, president and CEO of Busi ness Leaders for Michigan and chairman of the MEDC’s executive committee. He hopes the budget has hit bottom, but “no one really knows.” In the meantime, he added: “What are other ways of sustaining our organization?” How the MEDC responds to that challenge will

SEE BOWLING, PAGE 28

SEE MEDC, PAGE 26

GLENN TRIEST

Gary Winkel (right) and Tom Winkel of Woodland Lanes in Livonia rely on a loyal league following for a steady revenue stream.

Bowling reset: Alleys close, upgrade By Kirk Pinho kpinho@crain.com

he Shank family is one of the lucky ones in metro Detroit’s close-knit bowling scene, which is perhaps the largest in the country. Husband-and-wife team Randy and Cheryl, owners of Sunnybrook Golf & Bowl ing Inc. in Sterling Heights, faced a difficult decision earlier this year: Sell the popular business they have owned at 17 Mile Road and Van Dyke Avenue since 1998 — and the 140 acres on which it sits — or stick it out in an industry facing a tricky 7-10 split. In the end, the Shanks, come Sept. 30,

Lane closures: A list of recent bowling center shutdowns, Page 28

will no longer be Sunnybrook owners when it closes its doors and the family sells to what sources say is a tier-one supplier to the Detroit 3. Sunnybrook, a Macomb County institution since the Great Depression era, is one of at least five well-known local bowling alleys shuttering its doors in the last two years, according to Mark Martin, manager of the Metro Detroit United States Bowling Congress, an industry trade organization.

Detroit’s energy sways CEO to move N.Y. ride-app biz here By Tom Henderson thenderson@crain.com

Splitting Fares Inc. , a graduate of the just-concluded Techstars accelerator program at Ford Field in Detroit, is Michigan’s newest tech company. The company, which helps other companies set up appbased ride-sharing programs for employees, has moved its headquarters here from New York City and landed its first major customer, Detroit-based DTE Energy Co.

The company’s management team — co-founder and CEO Anya Babbitt, co-founder and chief technology officer Yale Zhang and co-founder and director of product development Benjamin McMillan — have rented a townhouse in Birmingham. The company, which does business as SPLT, will continue to operate out of the Techstars space until the next cohort of 10 companies starts the second year of the three-year accelerator pro-

“What I find to be embracing about Detroit is in two months I felt as if I’d built up as good a network as I had in New York,” said Splitting Fares Inc. CEO Anya Babbitt, pictured outside Ford Field, the Techstars headquarters.

gram next June. Babbitt said SPLT will also start two pilot projects this fall, for Troy-based Magna International of America Inc. , one of Techstars’ sponsors, and Honda Manufactur ing of Ohio. “If you’d have asked me 3½ months ago about whether I’d move to Detroit, my thoughts would have been completely different,” said Babbitt, who said SEE TECHSTARS, PAGE 27 TOM HENDERSON

MUST READS OF THE WEEK On the roads again

Suit settled

The road construction industry says a stable funding plan could pave the way to a boom much like it did 30 years ago,

Broadcast entrepreneur Kevin Adell will pay $325,000 to settle the legal dispute over the former Novi Expo Center, Page 20

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LOOKING BACK: In its Sept. 23, 1985, issue, Crainâ&#x20AC;&#x2122;s reported on new and returning road-related construction companies in Michigan as a result of post-recession increases in federal and state gasoline taxes. The circumstances that preceded the boom are similar to todayâ&#x20AC;&#x2122;s, but there are new problems. More at crainsdetroit.com/30

State road construction industry hopes to travel path from mid-â&#x20AC;&#x2122;80s By Lindsay VanHulle Crainâ&#x20AC;&#x2122;s Detroit Business/Bridge Magazine

LANSING â&#x20AC;&#x201D; Thirty years ago, Michiganâ&#x20AC;&#x2122;s road-building industry was flush with new gas tax money amid a construction boom that nearly tripled in size in as many years. Today, lawmakers pay for road projects by scraping together general fund dollars on an annual basis, since gasoline taxes arenâ&#x20AC;&#x2122;t enough to meet current maintenance needs. The diversion of money from other state departments has been a bandage solution while the Legislature negotiates a long-term revenue stream. The cyclical nature of road funding could come back around to abundance, some in the industry say, depending on how the Legislature decides on roads. Top lawmakers are meeting with Gov. Rick Snyder to find a compromise on roads after the House and Senate put forth proposals relying on different amounts of current and new money, but they havenâ&#x20AC;&#x2122;t reached a deal. The lack of a permanent funding fix has created uncertainty, to the point that contractors hesitate to hire or invest in equipment worth millions of dollars because they canâ&#x20AC;&#x2122;t count on projects beyond a single year, state transportation administrators and lobbyists for the road construction industry say. On Sept. 23, 1985, Crainâ&#x20AC;&#x2122;s reported that increased federal and state gasoline taxes in 1982 directly contributed to new construction companies entering the road and bridge business, while other firms returned to Michigan after leaving to work on projects in other states during the recession of the early 1980s. In the 1985 fiscal year, the Michi gan Department of Transportation

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planned to award $410 million in contracts for road work eligible for federal funds â&#x20AC;&#x201D; roughly $914 million in todayâ&#x20AC;&#x2122;s dollars. That was nearly three times more than the $146 million in road contracts MDOT awarded in 1982. The contracts followed a federal gas tax increase from 4 cents per gallon to 9 cents and a state tax hike of 4 cents per gallon that same year, according to Crainâ&#x20AC;&#x2122;s. There are parallels, for sure. Then and now, Michigan was recovering from an economic recession that halted much construction activity, including on infrastructure. Some of that work resumed as the economy improved. Even when adjusted for inflation, MDOT is spending more on roads today than it did 30 years ago, partly because the state has more roads

today. The department says it award- money, he said, is that it doesnâ&#x20AC;&#x2122;t give ed 871 contracts worth $1.3 billion companies the type of security they on projects eligible for federal need to make long-term investmoney in the 2014 fiscal year, with ments in people or equipment that another 729 contracts worth $1.2 bil- theyâ&#x20AC;&#x2122;d have with a five-, 10- or 20lion awarded this year to date. year funding strategy. But the state is struggling to keep In 1985, Leet â&#x20AC;&#x153;Edâ&#x20AC;? Denton told up with the cost of upkeep. Michi- Crainâ&#x20AC;&#x2122;s that his company, Denton ganâ&#x20AC;&#x2122;s flat 19-cent gas tax hasnâ&#x20AC;&#x2122;t been Construction Co. , took on its first raised since 1997, nor is it tied to in- Michigan road project after a sevenflation. As a result, the buying power year absence in other states. At the time, the Grosse Pointe of that revenue shrinks each year. â&#x20AC;&#x153;If we are able to secure a long- Woods-based company was the low term funding package, I think there bidder on a repaving of the Lodge Freeway in will be lots of Detroit in the opportunities, â&#x20AC;&#x153;If we are able to 1980s, a projand youâ&#x20AC;&#x2122;ll see secure a ect that initialwhat haply was delayed pened in 1985 longdue to bids all over again,â&#x20AC;? term that came in said Mike Nyshigher than trom, execufunding expected. tive vice presipackage Denton, dent of the Michigan Infra now 82, is still ... youâ&#x20AC;&#x2122;ll structure and in business, see what Transportation but on a happened in 1985 Association , a smaller scale. Lansing-based He said he all over again.â&#x20AC;? trade group sold his famiMike Nystrom, Michigan Infrastructure representing lyâ&#x20AC;&#x2122;s namesake and Transportation Association the road buildconstruction ing industry. business to â&#x20AC;&#x153;Companies will expand, will in- Warren-based Angelo Iafrate Con vest and there will be new compa- struction Co. about 15 years ago. His St. Clair Shores-based Denton nies starting up.â&#x20AC;? Enterprises Inc. now includes a conNew interest crete paving business in Lanexa, Va., Road contractors, like other con- and a small operation in North Carstruction companies in Michigan, olina. Denton said he sold in part saw projects and funding dry up because of the uncertainty of work during the late-2000s recession. in Michigan. Many firms sought work in other His operations â&#x20AC;&#x201D; totaling 350 emstates, while others downsized or ployees and upward of $30 million in went out of business. annual revenue in 1985 â&#x20AC;&#x201D; have In the last two years, Nystrom dropped to 75 to 100 workers and $12 said, his roughly 600-member asso- million to $15 million in income. ciation gained at least 40 new memâ&#x20AC;&#x153;The amount of large concrete bers, in part because of a rebound- paving jobs was diminishing around ing economy. the country, and it was increasingly Settling the debate on road fund- difficult to make money,â&#x20AC;? Denton ing with a permanent revenue said. â&#x20AC;&#x153;What weâ&#x20AC;&#x2122;re doing in Virginia stream, though, will send that num- and North Carolina is principally reber higher as companies sense a pair and maintenance work because more stable environment in which to thereâ&#x20AC;&#x2122;s not enough funding to really invest, he said. He added that more do a lot of new construction or comcompanies bidding on public road plete reconstruction. projects also could drive prices lower. â&#x20AC;&#x153;The funding is totally inadeâ&#x20AC;&#x153;No oneâ&#x20AC;&#x2122;s going into business quate, not only on a state level but when the industryâ&#x20AC;&#x2122;s flat on its back,â&#x20AC;? also at the federal level.â&#x20AC;? Nystrom said. â&#x20AC;&#x153;If you donâ&#x20AC;&#x2122;t know National logjam what the future is, you arenâ&#x20AC;&#x2122;t going to Michiganâ&#x20AC;&#x2122;s funding stalemate is invest in training employees that you might not have the work for. And it happening as Congress negotiates a long-term deal to keep the federal limits them in buying capital.â&#x20AC;? One-shot funding boosts â&#x20AC;&#x201D; in- Highway Trust Fund from running cluding annual state budget cycles out of money. In July, Congress narrowly avoidand the 2009 federal stimulus â&#x20AC;&#x201D; have created some work amid fiscal ed a shutdown by passing a threepressures, said Mark Van Port Fleet, month extension of the fund, which MDOTâ&#x20AC;&#x2122;s current chief operations allocates a portion of federal gas tax officer and chief engineer. SEE ROAD, PAGE 6 Yet the problem with one-time

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ROAD FROM PAGE 4

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revenue to states for road projects. MDOT leaders say the short-term extensions help the state continue planning road projects, but the lack of stability means they can’t project very far. Michigan receives about $1 billion yearly in federal transportation dollars, 75 percent of which goes to MDOT. The state must put up a 20 percent funding match to receive its full federal award, according to MDOT. No permanent solution in Washington also could lead to project delays, which in turn could speed up construction schedules, affect timing of materials purchases and increase costs, Van Port Fleet said. He added that the state is fast approaching the point at which road conditions will decline faster than revenue will increase to maintain them. The state trunkline system alone would need $1 billion to get 90 percent of the roads to good condition, Van Port Fleet said. Yet MDOT will get just 39.1 percent of the estimated $1.2 billion in state dollars Snyder and state policymakers are looking for, with the rest split among cities and counties based on a funding formula. Gas tax revenue has fallen from $846 million in 2009 to an estimated $820 million this year, according to MDOT figures. Lawmakers have had to shift some of the state’s general fund to roads because that amount has not been sufficient to match Michigan’s share of federal road money. In the 2016 fiscal-year budget that starts Oct. 1, that means an additional $400 million for transportation. “It is time that (new) revenue happens,” Van Port Fleet said. “How they do it is really not up to us.” House and Senate leaders have said there appears to be consensus that some new revenue is necessary, but they haven’t been able to agree on a dollar figure. The House passed a proposal this spring relying mostly on existing spending, including diverting money from the Michigan Economic Development Corp. The Senate’s plan relied on some existing revenue and a gasoline tax increase tied to inflation. Snyder favors a combination of higher fuel taxes and vehicle registration fees. Voters in May rejected the Legislature’s proposal to raise the sales and fuel taxes in order to raise money for roads, along with schools and local governments. “We can find a solution that takes care of itself year after year,” said Gideon D’Assandro, a spokesman for House Speaker Kevin Cotter. “The sticking point is finding a plan that can be a permanent solution where we don’t have to go back every year and take money and put it toward the problem.” Meetings continue with Snyder and top legislative leaders, D’Assandro said. All parties have said the talks are productive, without offering details on potential compromises. 䡲 Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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CRAIN’S DETROIT BUSINESS

OPINION Immigrants need a hand, and a plan D

etroit seems increasingly likely to be the new home for several thousand Syrian refugees. As Dustin Walsh reports on Page 1, that would present an opportunity for a square-mile area in Detroit north of Seven Mile Road between Woodward and the railroad tracks that bisect John R. That area, called NorthTown, has been planned for redevelopment since the late 1990s but has never really taken off. So to many, the refugees represent an opportunity to repopulate a Detroit neighborhood and boost the local economy. And there’s no question that immigration is an important strategy for Detroit. There’s a But let’s take a step back and think about what we can do for the chance to do good here, and refugees. For one thing, we can lobby for serve as a the U.S. to significantly lift the model for number of refugees it will take above the current, and paltry, elsewhere in 10,000 number. Other, much the U.S. smaller countries — notably Germany — have been taking as many arrivals as they can process, into the hundreds of thousands. We also should volunteer to take a large number of the expanded pool. Syrians have been immigrating to Michigan since the late 19th century and to metro Detroit since the early 1900s. And as a group, they have prospered, building business and social networks and extending help to newer incomers. What that means is we should have a plan, starting with the American Arab and Chaldean Council and adding partners to build scale. The plan should be comprehensive, specific and fully backed by local and state political leaders, with appropriate assistance from the federal government. There’s a chance to do good here — and serve as a model for elsewhere in the U.S. — and we’re especially well-suited to do it. The economic payoff will come.

MEDC cuts: Biz cycle at work As has been expected, the Michigan Economic Development Corp. announced job cuts this week — 65 direct layoffs added to 29 positions lost through attrition this fiscal year. That’s painful, but it’s an experience many companies have gone through and learned from. Fueled by revenue sharing from American Indian-run casinos, the MEDC ballooned in size over the years. But as Lindsay VanHulle reports on Page 3, some of that funding is drying up, and so the MEDC needs to refocus. The details are still emerging, but the focus will be on three core services: business investment and attraction, community development and Pure Michigan. We’re sorry to see people lose their jobs, but Michigan’s economic development efforts will survive.

Don’t take health concerns sitting down itting can be hazardous to your

S health.

We sit for hours in front of our computer screens. Or TV screens. Health experts say that can bring on a whole lotta pain. Sitting for long periods, research shows, can slow metabolism, alter hormones, raise cholesterol, weaken muscles. Who knew? Well, now we do. Evidence is growing that obesity, cancer, heart disease, hypertension, low back pain and all kinds of scary ailments can be linked to sitting for long periods of time — whether that’s at a desk or being a couch potato or playing with Facebook and social media on the screen. The Wall Street Journal reported last spring that nearly 30 percent of Americans did not participate in a single physical activity — walking, running, exercise class — even bowling or just stretching. Those are stats from the Physical Activity Council, which said the figures were an increase of 18 percent over 2007. Tom Spring, director of “health engagement and wellbeing” at Health Alliance Plan, has the mantra: “Sit less, move more.”

MARY KRAMER: Publisher HAP sponsored the Southeast Michigan’s Healthiest Employers project, produced by Crain Content Studio-Detroit (the custom publishing subsidiary of Crain’s Detroit Business). The winning companies were profiled Sept. 14, and at a breakfast awards program was earlier in the year, HAP focused on how employers could help employees be healthier through less “chair time.” Even standing burns more calories than sitting. Spring puts it at 50-70 percent higher. Spring has another tip: Don’t send an email to the colleague down the hall; get up and go talk to them. John Campanelli, publisher of Crain’s Cleveland Business, extolled the virtues of simply taking a walk

in a recent column. He recalled hearing years ago a speech by Pulitzer Prize-winning cartoonist Jim Borgman, who said that taking a walk was his path to creativity when his mind was blocked. Even at crazy-busy times. Pierrette Templeton, creative director at Crain’s Detroit Business, has embraced the notion that “sitting is the next smoking.” She has a third-party app that links to her Fitbit to alert her to get up and move around every 30 minutes. “I gave up smoking last year, so I figured I may as well give up sitting too,” Templeton says. “Even the act of making myself aware of activity levels throughout the day has nearly doubled my step count.” Fitbit, Apple Watch, whatever the technology, keeping track helps. That’s one person’s solution. What’s yours? 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.

LETTERS

Credible real estate sales reflect the market Editor: I am responding to your recent article about the use of “dark store” sales as comparables when valuing big box properties (“Retailers use ‘dark store’ theory to lighten tax load,” Sept. 14, Page 14). I am an independent commercial appraiser who has appraised such properties and testified at the Michigan Tax Tribunal. When discussing the sale of “dark stores,” one must keep in mind why the store went dark in the first place. One cannot simply say “vacant and available” is the only criteria. We need to dig deeper into these sales to ascertain whether they are truly comparable sales. Aside from bankruptcies, the only reason a store goes dark is due

Send your letters: Crain’s Detroit

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

to a shift in the market with supply and demand. If demand has declined, then the market is depressed, which makes the sale distressed. If more supply is needed, then the sale typically includes a deed restriction against future retail sales. This is due to the fact that the seller would typically build another bigger store nearby and intend on

stopping any future competition from entering the market. Such restrictions change the highest and best use of the property, given that it can no longer be used for retail. Highest and best use is fundamental in choosing comparables when valuing any property. A big box that sells only to be converted into a school does not compete within the same market investors as those properties that sell for retail. While appraisers are not influenced by whether a municipality is losing its tax base, we are certainly accountable to using credible sales that accurately reflect forces in the marketplace. Jumana Judeh President and CEO, Judeh & Associates, Dearborn

TALK ON THE WEB Re: DMC expects to settle nurse wage lawsuit for $42 million Why do companies think they can get away with this kind of behavior? How about putting a few of these CEOs in prison instead of fining them? They just charge all of us even more to recover the money. Poppycock

Re: How can Michigan welcome immigrants? Start with Syria We already have taken in more immigrants/refugees than we can economically and culturally safely as-

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

similate and afford. Arlene

Syrians and Syrian-Lebanese (as Lebanon was part of Syria until about the last 70 years) have made many contributions to the city of De troit and the surrounding area.

More businesses and more workers mean more taxes paid to the governments at all levels. Educator57

I live in Hamtramck and don’t understand the logic of admitting more immigrants into the area who rely on WIC cards to make their grocery purchases. We can’t find funds to fix the roads, so how do we have funds to finance new arrivals with welfare benefits? hamtramck49

Yes. The absolute best PR Detroit could garner right now. Cheryl Addington

Re: DIA’s new director Hope springs eternal. Jim Pallas

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Wayne County union-management climate must change hen I became Wayne County

Wexecutive on Jan. 1, I immedi-

ately recognized two fundamental changes had to occur, not only to save the county, but to allow it to flourish. We needed significant savings from wages, health care and pensions to avoid bankruptcy. We needed to restructure government to provide quality services more efficiently. We stand on the brink of accomplishing the necessary savings to restore fiscal health. We now must turn our attention even more to restructuring. A restructuring not only to ensure that Wayne County lives within its means, but to restore some or all of what we were required to take away from our dedicated employees due to the financial crisis. We are off to a strong start on the restructuring. We created the Department of Health, Veterans and Community Wellness by consolidating three county departments. This more efficient department will provide better and more comprehensive services. We are well on our way to implementing a state-of-the-art procurement system that will save millions each year, replacing the previous antiquated process. We worked collaboratively with the Circuit Court to continue to install high-tech audio/video technology that will save the county millions of dollars a year. Other examples of our restructuring efforts since Jan. 1 abound. To allow these efforts to fully succeed, continue with other necessary restructuring efforts and provide delivery of quality services, we need a new relationship with our unions. A relationship based on partnership, cooperation and the recognition that our mutual goal is the delivery of quality governmental services efficiently. All of this with the condition that workers are provided a fair and just place to work with adequate wages, health benefits and pensions. We need to create labormanagement partnerships at all appropriate levels within government, working together to identify problems and craft solutions to better serve our citizens. Unfortunately, this environment of management-union relations in Wayne County does not exist today, nor has it for a long time. These relations have been damaged by years of conflict and confrontation requiring the county and the unions to spend resources on lengthy, slow and complex dispute resolution mechanisms such as grievances, arbitrations and unfair labor practices charges. Resources and effort can be better used providing services and ensuring adequate compensation for our employees. As we continue to sit across from our union leadership at the bargaining table, it is my goal to develop this new approach to management-union relations in the county. We will not get there overnight, but

OTHER VOICES: Warren Evans Warren Evans is Wayne County executive. we will never get there if we never start to try. I assumed my position as county executive with two basic principles. The first was a belief that unions

serve an essential role by protecting working people. Unions have an important mission to ensure fair wages, health and pension benefits, and safe and fair working conditions. This belief comes from a wealth of life experiences, including union membership. An equally important belief I hold is that government can and must deliver quality services by the efficient use of tax dollars. These two principles at the foundation of my desire to devote my career to public service are not inconsistent. They are not, however,

“I hope the county unions will take seriously my open hand of partnership.” consistent with the present management-union environment in Wayne County. I have been a Democrat my entire life. I believe government is our greatest institution for achieving social justice and providing a

safety net for our citizens. We come closer to achieving these goals by running government in a fiscally responsible manner. Republicans often claim that government is the enemy, that it can’t operate efficiently. Our mission as Democrats is to show that government works. We can only do that by managing well and making fiscally responsible decisions. I hope the county unions will take seriously my open hand of partnership and work with me to restructure Wayne County government so it can flourish. 䡲

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SPECIAL REPORT: LISA SCHENCKER Lisa Schencker is a reporter for Modern Healthcare, a sibling publication of Crain’s Detroit Business.

Feds delay enforcing home care wage rule

HEALTH CARE

The U.S. Labor Department won’t start enforcing its new rule requiring higher pay for many home health care workers just yet, despite a recent court decision upholding the rule. The new rule won’t go into effect until 30 days after the District of Columbia Circuit Court of Appeals issues a mandate making its opinion effective. It’s unclear when that mandate will come because industry groups have asked the court to wait until after they try to appeal the matter to the U.S. Supreme Court. The rule was slated to go into effect Oct. 13. Last month, the circuit court upheld the rule after industry groups challenged it. The Labor Department and labor groups say the rule will mean fair wages for home health care employees, while industry groups say it will make home health care unaffordable for many seniors. For years, home health care BRUCE EDWARDS agencies haven’t had to pay minimum wage or overtime to compan- Dave Mazurkiewicz is CFO of McLaren Health Care Corp.Two of McLaren’s three hospitals in metro Detroit earned money on Medicare. ionship workers who provide “fellowship, care and protection” to seniors and disabled people. The rule would significantly narrow the definition of companionship workers to those who spend no more than 20 percent of their time providing actual care, such as feeding and bathing. It would also no By Jay Greene MedPAC predicts that average hospital longer exempt companionship jgreene@crain.com Medicare margins will continue to decline this workers employed by third parties, p until 2012, before the Affordable Care year and into 2016, even for the 13 percent of such as home health care providers, Act began cutting revenue, a majority of hospitals deemed “efficient” by MedPAC (See from wage protections. tax-exempt hospitals in Southeast story, Page 14). In recent court documents, the Michigan made profits on their Medicare busiexpenses disallowed by the IRS, such as inforindustry groups asked the court to ‘Have to make money’ ness, according to a Crain’s analysis of selected mation technology investments above a hold off on issuing its mandate Dave Mazurkiewicz, CFO of Flint-based IRS Form 990s from 2011 to 2013. capped amount and hospital-owned physipending an appeal to the Supreme McLaren Health Care Corp., said the goal of the Since then, those profits — or surplus over cian practices. Court, saying that doing so would 11-hospital system is to earn a 2.5 percent opexpenses, as measured by the Internal Revenue Community-benefit Medicare surplus ensure “certainty for the entire inService — have been slowly evaporating for erating margin on all patients.“ numbers show even lower profits — or losses dustry and the millions of elderly some of the 15 hospitals and multihospital We have to make money on Medicare. It’s — than the IRS data over the past few years, and disabled consumers who desystems in metro Detroit. The primary reahospital executives said. pend on its vital services.” SEE MEDICARE, PAGE 12 sons: reimbursement cuts, readmission In federal reports, only one-third of the naIndustry groups involved in the penalties and overpayment recoveries. tion’s 4,500 hospitals made money treating case include the Home Care Association of America, the National Associa In 2011, nine hospitals or systems earned Medicare patients, with hospitals avtion for Home Care & Hospice and the money on Medicare. But by 2013, only seven eraging a 5.4 percent loss in 2013, International Franchise Association. posted profits, and four of those suffered desaid the Medicare Payment Advisory Commission, an The government, however, has clines on their Medicare business. independent federal asked the court to issue its mandate Medicare accounts for about half of a hoscommission that quickly, arguing in court documents pital’s patient revenue. advises Conthat the industry groups’ “contention Hospitals also track Medicare profitability gress on that the final rule will harm conusing standard cost accounting and commuMedicare. sumers and workers was rejected in nity-benefit measurements — which include rulemaking comments submitted by consumer advocates, labor representatives and industry experts.” “We have to make money on Medicare. ... The Labor Department had already pledged to exercise discretion If you have a service that doesn’t make until the end of the year in deciding money, you are in trouble.” whether to go after providers once the rule goes into effect. Dave Mazurkiewicz,CFO,McLaren Health Care Corp.

A Medicare tourniquet

Hospitals try to heal cuts that bleed profits

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MEDICARE FROM PAGE 11

the largest payer in the country and will get larger,” Mazurkiewicz said. “If you have a service that doesn’t make money, you are in trouble.” Two of McLaren’s three hospitals in Southeast Michigan — McLaren Macomb in Mt. Clemens and McLaren Oakland in Pontiac — earned money on Medicare, although profitability declined from $16.7 million in 2012 to $12.2 million in 2014. The Detroit-based Barbara Ann Karmanos Cancer Institute , which joined McLaren in late 2013, lost $10.9 million in 2014, $16.9 million in 2013 and $9 million in 2012, officials said. Rob Casalou, CEO of six-hospital St. Joseph Mercy Health System in Ann Arbor, said hospitals that make money on Medicare are typically ones that are efficient and make good margins on all patients. Casalou said St. Joseph Mercy “climbed out of a hole” in 2010 and 2011 after the economic downturn and additional expenses from restructuring left the system short on cash. Total margins, including Medicare and private payer, have improved since then, he said. St. Joseph Mercy earned net income of $112 million on revenue of $1.8 billion for a net margin of 6.2 percent in 2014, the health system said. In 2013, St. Joe’s posted net income of $103 million on revenue of $1.8 billion for a 5.7 percent margin. Livonia-based Trinity Health Michigan, which includes St. Joseph Mercy Health System and three other hospitals, posted Medicare income of $44.1 million in 2011, $30.1 million in 2012 and $33 million in 2013. Regional CFO Mike Gusho said Trinity’s community-benefit report is a more complete accounting of Medicare revenue and expenses. Its report says Trinity earned $18 million in 2011 on Medicare for a 2 percent margin, $10 million in 2012 for a 1.4 percent margin, broke even in 2013 and lost $5 million in 2014, he said. “Medicare is a good payer, but we

expect Medicare to ratchet down payments” over the next several years, Casalou said. “We have time to change the demand curve to get patients out of hospital sooner. Employing doctors helps. We want a covered life strategy” for managing patients effectively. But Casalou said medical decisions at St. Joseph Mercy — and, he thinks, at most hospitals — have nothing to do with hitting profitability targets for Medicare or any payer. “I am an economist,” he said. “Health care is 18 percent of the GNP. I know it is a matter of time before (the Medicare program) looks at expenses. It doesn’t matter if they cut $500 billion (Medicare cuts from 2012 to 2022) or $1 trillion. There will be more cuts coming, and we need to be ready.”

‘Difficult but not impossible’ This year, President Barack Obama proposed additional Medicare cuts in his 2016 budget proposal to Congress. He suggested

OAKLAND

$415 billion could be squeezed out of the Medicare, Medicaid and other government-funded programs, including an additional $16 billion from graduate medical education, over the next 10 years. “It is difficult to make money on Medicare but not impossible,” said Tony Colarossi, a health care consultant with Plante Moran LLP in East Lansing. “The theory that hospitals should be shooting to make a margin on Medicare is well-acknowledged in the industry. (Hospital executives) realize Medicare will never be a profit center for them, but using Medicare as a proxy for overall efficiency is reasonable.” Since the Affordable Care Act was approved in 2010, Colarossi said, some hospitals have flourished under Medicare and some have struggled. Those hospitals that make money have several things in common, Colarossi said. First, profitable hospitals are usually part of a larger health system that can eliminate duplicative serv-

ices among operating units, concentrate resources, remove unnecessary expenses for treating diseases and command lower supply and technology costs. “Obamacare has created an increased focus on quality measurements, readmission rates and other adverse events,” Colarossi said. “(Medicare is) not going to pay for that anymore. It took quite a bit of money out of the revenue stream with reductions on annual (reimbursement) increases. Hospitals have had to adjust to that.” For example, Dearborn-based Oakwood Healthcare , now part of Southfield-based Beaumont Health , lost $22.8 million on Medicare in 2011, $57 million in 2012 and $41.8 million in 2013. Beaumont Health, which operated three hospitals from 2011 to 2013 until it added Oakwood and Botsford Hospital in Farmington Hills in a merger, earned $28.1 million on Medicare in 2011 but lost $7.2 million in 2012 and $17.4 million in 2013. Detroit-based Henry Ford Health System , which operates five hospi-

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tals in Southeast Michigan, has suffered big losses on Medicare over the past three years, primarily because the IRS disallows revenue from Henry Ford’s 1,200 employed physicians. The system lost $84.6 million on Medicare in 2012, $89.6 million in 2013 and $92.2 million in 2014, officials there said. The University of Michigan Health System , a three-hospital system based in Ann Arbor, lost $184 million in 2014 on its Medicare business, officials said. Since 2011, UM Health’s Medicare margins have decreased steadily to minus 32 percent in 2014 from minus 29 percent three years earlier. However, UM projects a 5 percent operating margin for all payers by 2017.

The probability of profitability Patrick McGuire, CFO of Warrenbased St. John Providence Health System, said a hospital’s Medicare profitability depends on a multitude of factors both within and beyond a hospital’s control. Profitability depends on the mix of Medicare inpatients and outpatients, how sick they are, whether the hospital received disproportionate-share payments for operating in low-income markets and how many physician practices are owned, CFOs told Crain’s. For teaching hospitals, another major Medicare revenue stream comes from a residency program, through indirect medical education payments to care for sicker Medicare patients and larger numbers of Medicaid patients. Besides Obamacare’s 2012 mandate of cuts in payment updates, Medicare also has imposed quality penalties including those for readmitting certain Medicare patients within 30 days. Recovery audit contractors have identified inappropriate billing or overbilling of Medicare patients that hospitals have paid back. “Our strategy is to control for utilization for all patients because hosSEE NEXT PAGE

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pitals are paid a fixed amount per stay,” McGuire said. “You want to treat patients in the most cost-effective way with the highest quality.” To reduce patient costs, McGuire said, hospitals try to minimize the time to conduct and analyze diagnostic tests and to discharge patients as soon as possible. “The quicker we get a patient to a home setting is better for costs and better for the patient,” he said. St. John Hospital and Medical Cen ter in Detroit, which is part of St.

John Providence, maintained fairly steady Medicare profits at $12.3 million, $17.2 million and $15.6 million from 2011 to 2013, 990s show. “It is hard to look at those numbers as a trend because there is variation from year to year,” McGuire said. Despite Medicare cuts, St. John Hospital increased its Medicare surplus in 2014 to $23.7 million, while Macomb-Oakland’s was $30.3 million and Providence Hospital in Southfield reported $2.1 million. “The 2014 numbers improved because we did better on the cost side,” McGuire said. “Revenue is not going up.” Like all hospitals, St. John has programs to reduce costs for all patients, McGuire said. For example, the health system has concentrated on reducing the length of stay, eliminating unnecessary testing and in-

creasing the turnaround time of lab tests to avoid duplications. “We do that and we can discharge the patient sooner because doctors have the lab results and don’t have to order the test twice,” McGuire said.

‘Diminishing returns’ But McGuire said a hospital can do only so much to lower costs.

“There are diminishing returns on utilization management,” he said. “We still have great potential, not just per unit of services but on total expense.” At McLaren, Mazurkiewicz said the system’s goal is to be the lowestcost provider in all its Michigan markets, an effort that helps with payers such as Medicaid that reimburse far below costs.

“We haven’t changed what we are doing” on costs because of Medicare cuts, he said. “We are doubling down on what we are doing.” For example, McLaren has increased its focus on reducing supply costs that directly affect clinical care. Several years ago, McLaren began participating with a group of

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similar-minded health systems to reduce the costs of physician-preference items, which include defibrillators, pacemakers and joint replacements. The company, SharedClarity , is a Phoenix-based subsidiary of United Healthcare Group. Other systems involved include Advocate Health Care, Dignity Health and BaylorScott & White Health. “We took cost information, married it up with information from physician surveys and then analyze the products to determine the differences to drive more effective prices,” Mazurkiewicz said. “The savings ($3 million this year) were significant.” Kevin Tompkins, McLaren’s vice president of marketing, said the health system also has embarked on a successful cost reduction program to manage blood supplies. Tompkins said research shows that giving patients too much blood in transfusions, transplants and other services sometimes can place them at risk for infections and other ailments. The result has been lower costs because of less purchasing and better quality, he said. “We spend millions of dollars to buy blood for our patients,” Mazurkiewicz said, adding that $3.6 million was saved through the blood management program. 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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Medicare margins fall despite hospitals being more efficient By Jay Greene jgreene@crain.com

Each year, the Medicare Payment Advisory Commission issues a report to Congress on the financial health of hospitals, physicians, home health agencies and other providers paid under Medicare, along with recommendations for reimbursement policy For hospitals, the March 2015 report said that only about 35 percent of the nation’s 4,700 hospitals made money treating Medicare patients. Since 2002, hospitals have suffered declining Medicare margins averaging minus 5.4 percent in 2013, 6 percent in 2014 and 9 percent this year, said the commission, commonly known as MedPAC. Slightly less than half of the hospitals in Southeast Michigan earned positive margins on Medicare, according to a Crain’s analysis of IRS Form 990 reports and hospital interviews. Hospitals have improved efficien-

cy and quality over the past decade, but payment reductions, financial penalties for inappropriate hospital readmissions and overbilling still have caused Medicare hospital margins to drop to negatives nationally from an average positive 2 percent margin in 2002. Future positive margins also appear doubtful, Medpac said. Hospital Medicare margins will continue to decline this year and into 2016 even for the 13 percent of hospitals deemed “efficient” by MedPAC. Despite low Medicare margins, overall margins for hospitals nationally increased to 7.2 percent in 2013, the highest level since tracking began 20 years ago, MedPAC said. High overall profitability over the past several years, Medpac said, “was caused by average (private health insurance) payment rates rising slightly faster (5 percent nationally) than average cost growth, which was in the 2 percent to 3 percent range.”

But in Michigan, hospital financial experts say, commercial rates have not risen faster than costs. Dave Mazurkiewicz, CFO of Flint-based McLaren Health Care , said total profit margins are lower than national averages because payers haven’t increased reimbursements at the same rates as those in other states. “Michigan margins are lower than the rest of the country,” Mazurkiewicz said. Tony Colarossi, a partner for health care consulting at Plante Moran LLP in East Lansing, also disagreed with the notion that commercial payers in Michigan have boosted revenue to hospitals. MedPAC acknowledged that hospitals in some states are under pressure because of a poor payer mix of patients or a lack of market strength to negotiate higher rates. Blue Cross Blue Shield of Michigan

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lion members, the second-highest pharmacy use and selection of imsingle-carrier percentage in the na- plants, experts said. But Colarossi said Michigan hostion. Only Alabama has an insurer with a more dominant market share pitals also have benefited this year — Blue Cross Blue Shield of Alabama, from Medicaid expansion with Healthy Michigan. with 84 percent. “This will improve overall margins, As a result, Colarossi said, hospieven though tals in Michigan have Medicare is losing a less clout to negotiate “Being costlittle money overfavorable efficient all,” he said. “Hoscommermeans pitals will improve cial conduring tracts and (hospitals margins this transition perihave been nationally) od even as forced to become can make a Medicare is introducing changes” more costpositive through Obaefficient to manage lower rates margin on macare that ultimately will reduce of increases. margins over time. “Being cost-effi- Medicare.” Colarossi said cient means (hospi- Tony Colarossi,Plante Moran hospitals need to tals nationally) can make a positive margin on Medicare continue to reduce the costs of clinversus the negative 5 percent for low- ical care, back office work and suppressure facilities,” said Colarossi, ex- ply purchasing. Why? plaining the MedPAC analysis. For 2015, Medicare’s base payOn relative hospital efficiency, MedPAC said that from 2010 to 2012, ment rate update is projected to be only 13 percent of hospitals were 2.2 percent, MedPAC said. But variconsidered “relatively efficient” at ous payment reductions also will cut treating Medicare patients because payments by about 2.5 percent, esthey had lower costs and higher sentially wiping out any payment increases. quality over a three-year period. The 2016 update under current In 2013, these 268 efficient hospitals had a median Medicare margin law is projected to be 2.3 percent, but payment reductions will be only of 2 percent, MedPAC said. Experts said hospitals that are about 2 percent. White House Budget Director successful in managing Medicare patients in a profitable manner Shaun Donovan recently said Medicare needs “a more aggressive have certain things in common. 䡲 They are usually part of a larger strategy” to stop improper payments health care system. to hospitals, doctors and insurers. 䡲 They closely track Medicare In a recent letter to the U.S. De services delivered to patients, mak- partment of Health and Human Ser vices , which runs Medicare, Donoing sure overuse is minimized. 䡲 They make sure employees are van said improper payments waste meeting productivity targets, in- billions of taxpayer money. cluding average hourly labor rates, For example, he said, payment staff overtime pay, per-capita errors amounted to $3.1 billion for Medicare costs and net patient rev- Medicaid and $10 billion for enue per equivalent discharge. Medicare. 䡲 Jay Greene: (313) 446-0325 Hospitals also look closely for Twitter: @jaybgreene variations in length of patient stays,

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SPECIAL REPORT: HEALTH CARE

Primary care group works directly with employers By Jay Greene jgreene@crain.com

A new primary care physician managed care services organization is forming in Southeast Michigan to directly contract with employers for enhanced primary care services. Forthright Health Management LLC , headed by Tom Valenti, has recruited about 50 primary care physicians, including internists, family medicine and pediatricians, in 13 practice locations. The network will offer a hybrid concierge medicine program in which patients are guaranteed more time and access to their doctors than in typical office visits. Another 50 doctors are expected to sign up by end of the year, Valenti said. “Linking employers and primary care physicians directly will fix the heart (the center) of health care that leads to all other services,” Valenti said. “This will result in lower costs and better quality.” Some of the medical groups signed up for the Forthright network include Prism Medical Group, Rochester Hills; Envision Medical Group, Livonia; Moore Pediatrics and Associates , Chelsea; Northville Family Medical Center ; and Farmington Family Physicians. For less than $100 per employee per month, Valenti said, employers can contract with Forthright to offer primary care access for workers for a range of office-based services and limited diagnostic testing. He said several employers are interested in the concept,

“This will result in lower costs and better quality.” Tom Valenti,Forthright Health Management

but no contracts have been signed. “If a referral to a specialist is needed or a test or lab not covered by the direct contract is needed, (a patient’s) health insurance will cover it,” Valenti said. Primary care services will include checkups, diagnosis, wellness, basic office tests, counseling, disease management, email and phone access and house calls if necessary, Valenti said. Patients will be allowed up to 25 visits per year, he said. “This will give patients more face time with their doctor,” Valenti said. “Physicians will benefit because they won’t have as many insurance forms to fill out.” The concept of direct contracting with providers — and bypassing traditional health insurers — appears to be growing nationally and in Michigan. Last year, state Sen. Patrick Colbeck, RCanton Township, won passage of Senate Bill 1033, which allows doctors to offer direct primary care without fear of state insurance department regulation. In Michigan, more than more than 75 physicians are participating in direct primary care, including John Blanchard, M.D., who

heads the Premier Family Physicians PLC office in Troy. Mike Williams, M.D., Prism’s president, said his three partners decided to join Forthright to get ahead of the curve if direct contracting becomes accepted by employers. “Employers are going to look for the best value, and that includes working with a highquality network that is interested in cost effectiveness,” Williams said. “Nobody knows where the market is going. We want to be on the cutting edge, and my practice agreed to explore the opportunity.” Williams said more employees are choosing high-deductible policies with $5,000 outof-pocket deductibles. “This is a catastrophic plan, and patients might not seek care,” he said. “There might be a better way for patients to receive care.” Williams said the long-term effect on his current practice, which will continue to accept health insurance, could be to increase patient volume and revenue. “It will save us administrative time because we won’t have to file insurance claims each time a (direct contract) patient comes in,” he said. “We will still spend time to record the correct diagnosis in our electronic medical record and still provide the same amount of care to the patient.” But Williams said less time filling out insurance forms could lead to more time spent with patients. 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

CON ROUNDUP The following are selected certificate of need filings from Aug. 12-Sept. 16:

Letters of intent received 䡲 Lakeshore Healthcare Grand Campus, Detroit: Begin operation of a new nursing home by moving 40 nursing home beds from Lakeshore Elmwood Campus to a new site to be constructed at 3025 E. Grand Blvd.; $14 million. Applications received 䡲 Select Specialty Hospital-Macomb County, Mt. Clemens: Renovate clinical space on the first, second and fifth floors; $9.8 million. Decisions 䡲 Oakwood Hospital-Dearborn: Add one cardiac catheterization lab; $3 million. Approved. 䡲 Oakwood Hospital-Taylor: Initiate a fixed MRI service at an existing host site; $3.4 million. Conditional approval. 䡲 McLaren Oakland, Pontiac: Emergency addition of 30 new adult psychiatric beds; $2.5 million. Withdrawn. 䡲 St. Joseph Mercy-Brighton: Construct a 8,400-square-foot, two-story addition and renovate 50,000 square feet of clinical space on the first and second floors; $26.7 million. Approved. 䡲 Children’s Specialty Center of MichiganTroy: Acquisition and relocation of the surgical service from DMC Surgery Hospital to a

new freestanding outpatient facility in Troy; $12.7 million. Conditional approval.

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SPECIAL REPORT: HEALTH CARE

Fla. company adds neck, back clinics in area, state By Jay Greene jgreene@crain.com

Pure HealthyBack Inc., an Orlando, Fla.-based neck and back pain rehabilitation company, is spending millions of dollars to expand operations in Southeast Michigan to five clinic locations and more than 12 statewide over the next 18 months. The company, which acquired Troy-based Dynamic Rehabilitation earlier this year for an unspecified amount, now operates centers in Troy, Canton Township, Novi, Clinton Township and Taylor. Mark Szporka: “We would like Wants to put a to put a major falocation downtown. cility in the middle of downtown Detroit,” said Mark Szporka, CFO of Pure HealthyBack. “We will as soon as we find the right spot.” Besides Detroit, expansion in Michigan could include centers in St. Clair Shores, Livonia, Ann Arbor, Lansing, Saginaw, Jackson, Battle Creek and Grand Rapids, Szporka said. The typical size of PHB’s rehabilitation center is 10,000 square feet and costs about $1 million to

build and equip, he said. “The old model of building a facility and begging doctors for referrals doesn’t work anymore,” said Szporka, who was born in Detroit and received his MBA from the University of Michigan. “Our model is a comprehensive one-year, bundled-fee program that focuses on managing populations” with chronic disease. Szporka said the company is focusing on directly contracting with labor unions, self-insured companies, accountable-care organizations and health plans. He said several contracts have been signed, but declined to name any companies or organizations other than Pipefitters Local 636 in Farmington Hills. Research has shown that chronic back and neck pain are the number one cause of lost workdays and the second most common cause of disability in the United States. More than $100 billion annually is spent on back and neck pain treatment. Pure HealthyBack uses the same rehabilitation equipment and therapy approach as Dynamic did — MedEx equipment and McKenzie therapy for diagnosis and treatment. But Szporka said PHB will employ a larger range of medical support staff because research conducted at the Duke University Integrative Medi-

cine’s program suggests comprehensive care improves health. PHB’s restoration team includes physicians, physical therapists, exercise physiologists, wellness coaches, nutritionists and yoga trainers. Competition in Southeast Michigan appears to be growing the past several years as many physical therapy and rehabilitation providers are experiencing service volume growth and adding centers. Besides hospitals that operate physical therapy clinics, providers include Team Rehabilitation , Ad vanced Physical Therapy and ATI Physical Therapy. Another fast-growing physical therapy provider is Pontiac-based Theramatrix Physical Therapy. Theramatrix also contracts with various organizations, including self-employed companies, unions and health insurers. For example, General Motors Co. now uses Theramatrix for its hourly active employees in multiple states. GM had contracted with Anthem Blue Cross and Blue Shield in Indiana, Kentucky, Missouri, Ohio and Wisconsin. Ford Motor Co. has contracted with Theramatrix for years. Stephanie Brady, vice president of care transitions at five-hospital St. John Providence Health System , said

physical therapy volume is increasing because of the movement to population health, where providers are seeking to integrate inpatient and outpatient care to focus on longer-term patient wellness. To accommodate growth, St. John has added two wellness-oriented therapy sites the past two years to go along with its 12 comprehensive physical therapy centers. Site locations are located near patients and St. John physicians, she said. “We have waiting lists for services,” Brady Stephanie Brady: said. “We are all “We have waiting seeking ways to lists for services.” add to people’s wellness and functioning.” Brady said Pure HealthyBack’s model is more oriented to treating patients with chronic neck and back disease. “We service the whole patient, all the diseases patients have. The majority of time is for acute needs, but we also have chronic cases,” said Brady, noting that average acute care treatment is 10 to 12 visits.

Brady said physical therapy has turned more into an evidencebased practice, focusing on patient outcomes for chronic and acute diseases, including whiplash, arthritis, pinched nerves and post-surgical care. “There is more specialized treatment for disease states,” including for patient falls caused by multiple sclerosis, Parkinson’s disease or vertigo, and female pelvic disorders. Michigan is one of three geographic areas that Pure HealthyBack is using to conduct outcome studies on its program to prove its clinical value to employers. “We have clinical and financial outcomes in Louisiana, Delaware and now in Michigan that demonstrate we are making patients better,” he said. In 2012, PHB signed a contract with New Orleans-based Ochsner Clinic , which owns nine hospitals and controls 70 percent of the inpatient market. Last year, PHB signed an agreement with Lewes, Del.based Beebe Healthcare , which is testing PHB’s model in a rural area, Szporka said. During the next several years, PHB plans to expand into Chicago; Dallas; Tulsa, Okla.; and New Jersey, Szporka said. 䡲

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CRAIN'S LIST: LARGEST MINORITY-OWNED BUSINESSES Ranked by 2014 revenue Company Address Rank Phone; Web site

Majority owner

Revenue Revenue ($000,000) ($000,000) Percent 2014 2013 change

Local employees Jan. 2015/ 2014

Minority group of ownership Type of business

Bridgewater Interiors LLC 4617 W. Fort St., Detroit 48209 (313) 842-3300; www.bridgewater-interiors.com

Ronald Hall president and CEO

$2,281.5

$2,179.5

972 1,104

AfricanAmerican

Automotive seating/interiors

Piston Automotive LLC 12723 Telegraph Road, Redford Twp. 48239 (313) 541-8674; www.pistongroup.com

Vinnie Johnson chairman and CEO

838.2

684.0

302 287

AfricanAmerican

Automotive supplier

The Diez Group 8111 Tireman Ave., Dearborn 48126 (313) 491-1200; www.thediezgroup.com

Gerald Diez chairman and CEO

733.0

730.0

409 NA

Hispanic

Aluminum and steel sales, blanking (scallop/wave, chevron, exposed and unexposed, dimpled, oiled) laser welded blanks, cut to length, slitting, warehousing

Rush Group Limited LLC Andra Rush chairman and CEO

694.8

593.5

721 710

Native American

Provides full module assemblies, mechanical and robotic subassemblies, ultrasonic and vibration welding, plastic injection molding, and sequencing services to the automotive industry. Other services include program management, launch management, supply chain management, logistic management, inventory and warehousing, and quality system management Automotive manufacturer, assembler, warehouse sequencer, aerospace warehousing and logistics

Detroit Manufacturing Systems LLC 12701 Southfield Road, Building A, Detroit 48223 (313) 243-0700; dms-na.com

Global Automotive Alliance LLC 2627 Clark St., Detroit 48210 (313) 297-6676

William Pickard chairman and CEO

539.0

513.0

446 446

AfricanAmerican

Arvind Pradhan president and CEO

450.0

410.0

38 34

Asian

Camaco LLC 37000 12 Mile Road, Suite 105, Farmington Hills 48331 (248) 442-6800; www.camacollc.com

Prestige Automotive 20200 E. Nine Mile Road, St. Clair Shores 48080 (586) 773-2369; www.prestigeautomotive.com

Gregory Jackson chairman, president and CEO

400.1

414.3

-3

250 250

AfricanAmerican

NYX Inc. 36111 Schoolcraft Road, Livonia 48150 (734) 462-2385; www.nyxinc.com

Chain Sandhu CEO

340.0

331.4

1,800 1,628

Asian

Plastic injection molding

Elder Automotive Group 777 John R Road, Troy 48083 (248) 585-4000; www.elderautogroup.com

Tony Elder president

303.3

343.6

-12

196 197

Hispanic

Automobile dealerships

Ron Shahani president and CEO

260.2

216.8

1,714 1,429

Asian

David Barfield CEO

243.3

216.5

1,429 1,370

AfricanAmerican

Human capital staffing services and managed service provider

Frank Venegas Jr. chairman and CEO

239.8

231.0

508 457

Hispanic

David Segura CEO

219.0

190.0

NA 345

Hispanic

General contracting, specialized miscellaneous steel manufacturing and distribution of protective barrier products, pure global supply chain management, centralized storage and on-demand distribution of parts for machinery and selling excess stock materials Systems integrator and talent management solutions.

Frank Venegas Jr. Chairman/CEO

191.6

162.0

388 350

Hispanic

General contractor/construction manager

Dilip Dubey CEO, chairman and cofounder

180.6

134.5

120 NA

Asian

Eddie Hall Jr. president

157.7

148.9

176 165

AfricanAmerican

Automobile dealerships

Bill Perkins president

146.9

134.3

136 134

AfricanAmerican

Automobile dealerships

Andra Rush founder and Chairman

137.7

111.0

350 297

Native American

Motor carrier

James Group International Inc.

John A. James Chairman and CEO

133.0

132.0

135 131

AfricanAmerican

Logistics and supply chain management

Avis Ford Inc. 29200 Telegraph Road, Southfield 48034 (248) 355-7500; www.avisford.com

Walter Douglas Sr. chairman and CEO

125.7

126.1

-0

106 102

AfricanAmerican

Automobile dealership

Global Parts & Maintenance

Paul Ureste CEO and managing member

110.0

85.0

21 18

Hispanic

OEM replacement parts, commodity supply management and procurement services

Systems Technology Group (STG)

Anup Popat chairman and CEO

95.0

82.3

330 300

Asian

Information technology outsourcing, software application development, big data analytics, mobility and software integration services

FutureNet Group Inc.

Perry Mehta president and CEO

94.0

100.0

-6

180 123

Asian

Provides infrastructure solutions primarily to governmental agencies and large corporation in construction, technology, perimeter security and energy/environment areas

David Burnley president

90.8

118.5

-23

30 26

AfricanAmerican

Durga Prasad Gadde president and CEO

82.0

70.0

NA 1,000

Asian

Acro Service Corp.

W. Six Mile Road, Suite 250, Livonia 48152 10 39209 (734) 591-1100; www.acrocorp.com

11 12

The Bartech Group Inc. 27777 Franklin Road, Suite 600, Southfield 48034 (248) 208-4300; www.bartechgroup.com The Ideal Group Inc. 2525 Clark St., Detroit 48209 (313) 849-0000; www.weareideal.com

Vision Information Technologies Inc. (VisionIT)

W. Grand Blvd., Suite 600, Detroit 48202 13 3031 (877) 768-7222; www.visionit.com Ideal Contracting LLC

Clark St., Detroit 48209 14 2525 (313) 843-8000; www.idealcontracting.com

Netlink Software Group of America Inc. 999 Tech Row, Madison Heights 48071 (248) 204-8800; www.netlink.com Royal Oak Ford/Briarwood Ford

Woodward Ave., Royal Oak 48067 16 27550 (248) 548-4100; www.royaloakford.com Bill Perkins Automotive Group

Gratiot Ave., Eastpointe 48021 17 21800 (586) 775-8300; www.merollischevy.com Rush Trucking Corp.

E. Michigan Ave., Wayne 48184 18 35160 (800) 526-7874; www.rushtrucking.com W. Fort St., Detroit 48209 19 4335 (313) 841-0070; www.jamesgroupintl.com

Executive Drive, Westland 48185 21 6112 (734) 326-7600 W. Big Beaver Road, Suite 500, Troy 48084 22 3001 (248) 643-9010; www.stgit.com Auburn St., Detroit 48223 23 12801 (313) 544-7117; www.futurenetgroup.com Devon Industrial Group

Griswold St., Suite 2050, Detroit 48226 24 535 (313) 221-1550; www.devonindustrial.com

HCL Global Systems Inc. 24543 Indoplex Circle, Suite 220, Farmington Hills 48335 (248) 473-0720; www.hclglobal.com

Full-service supplier of complete structures, concept through detailed design, including but not limited to validation, testing, prototype developments, state of the art manufacturing and complete vertical integration Automobile dealerships, insurance and real estate

Staff-augmentation, outsourcing and IT and engineering consulting

IT managed services and outsourcing solutions and cloudenabled business solutions like Netlink Care Cloud and Netlink Data & Analytics Cloud

Contracting and construction management

Provides solutions to various industries including health care, manufacturing, insurance, engineering, financial services, banking, consumer retail, telecommunications and aerospace.

This list of minority-owned businesses is an approximate compilation of the largest such businesses based in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted, the companies provided the information. NA = not available. LIST RESEARCHED BY SONYA D. HILL

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30+ showrooms | endless possibilities

Jones Day law firm grows in Detroit by bringing home Michigan expats By Chad Halcom chalcom@crain.com

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Global law firm Jones Day has been growing in Detroit more by recalling Michigan expatriates home than by scouting for talent among the region’s own law firms. And that’s by design, said Partner-inCharge Timothy Melton. The firm, which originated in Cleveland and now has 42 offices worldwide, expects to move into a 21,000-square-foot office on the 21st floor of 150 W. Jefferson by Oct. 5 from temporary offices it has occupied one floor below since it landed downtown July 6. Partner Bryan Zair, one of two corporate attorneys the firm picked up from Chicago-based Mayer Brown last week, is a Wayne State University Law School graduate who formerly practiced here and will move to Detroit next week. The firm has also offered associate positions to two recent U.S. Supreme Court clerks. Gerald Griffith, another partner who divides time between the Chicago and Detroit offices, spent

20 years at Honigman Miller Schwartz and Cohn LLP and had chaired its health care law department. Administrative partner David Rutkowski, formerly of the firm’s San Francisco office, is a native of the Traverse City area. Melton, formerly part of the capital markets practice in Chicago before opening the firm’s Detroit office, went to high school in St. Joseph, attended Wayne Law and clerked for Judge Richard Suhrheinrich, then of the U.S. District Court in Detroit, from 1987 to 1989. Now at five local attorneys, counting Zair, the firm expects to have eight by year’s end and 12 by March 31, he said. Melton said the firm expects to add more Detroit expatriates than laterals for a while. “We will be opportunistic, but we are certainly not out pounding on the door trying to sell ourselves as a firm to anyone already working here,” he said. Jones Day helped guide Detroit through federal bankruptcy, along

with Kevyn Orr, who was an attorney at the firm before becoming the city’s emergency manager in 2013. Orr returned to the firm earlier this year and is a partner in charge of its Washington, D.C., office. None of Jones Day’s local attorneys had a role in the bankruptcy, although the $975 to $1,075 perhour legal fees that made headlines during the case may be typical for some of its attorneys, Melton said. “Our intention is not to compete with anyone that is already doing legal work here,” he said. “Our goal is to capture the kind of local business that currently evaporates and goes to law firms in other markets.” That will include some auto business — the firm represented Chrysler LLC in its 2009 reorganization and defended General Motors Co. in a United Auto Workers lawsuit over pre-bankruptcy retiree benefit commitments — as well as health care and a mix of other industries. 䡲 Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

Adell settles suit over Novi center site By Chad Halcom chalcom@crain.com

Broadcast entrepreneur Kevin Adell will pay $325,000 to settle the legal dispute in which he once tried to have an Oakland County judge removed over the former Novi Expo Center, and plans to incorporate a new family partnership to oversee redevelopment at the site. Adell, president of Adell Broadcasting Corp. and owner of WADL-TV 38, and Norman Lippitt, partner in the former Hyman Lippitt PC and founder of Lippitt O’Keefe Gornbein PLLC in Birmingham, both confirmed they’d reached a resolution after mediation this month before attorney Thomas Kevin Adell: Hardy of BirmSettlement was ingham-based reasonable. Hardy Lewis & Page PC. “Sometimes you break a few eggs to make an omelet,” Adell said late last week of the Lippitt deal, which will resolve several related lawsuits dating back to 2013 in Oakland County Circuit Court. “I thought three and a quarter was a fair and reasonable settlement, and it puts the lawsuit behind us and make plans for the property without Norm lingering. I never pay until I have to pay, and I have 45 days, so I’ll pay on that 45th day and we’ll go take care of everything in court.” Lippitt, who originally won a judgment for more than $428,600 against the Adell Brothers Children’s Trust partnership from Circuit

Judge Wendy Potts last year, did not dispute the smaller sum in mediation and he expects to dismiss his litigation and remove a lien on the Expo Center property. “I’m happy to resolve any of our past differences with Kevin. I think the mediator was very gentlemanly and handled the matter very well,” he said. The Adell trust partnership balance was the largest remaining for Hyman Lippitt. He said other smaller balances are outstanding, but with the Adell litigation settled, he expects to dissolve the firm as a legal entity within the next year. The Novi Expo Center opened in 1992 on what was once the headquarters of Adell Industries. Adell Brothers Children’s Trust, a partnership of three trusts in the names of Kevin Adell’s late father, Franklin, and brothers Marvin and Robert, owned the property, which had been vacant since 2005. Blair Bowman moved the center’s event management company into what is now the Suburban Collection Showplace in Novi, and Hyman Lippitt represented the trust for a while in litigation against Bowman and that business. Hyman Lippitt later withdrew from the case and claimed Children’s Trust hadn’t paid about $200,000 in legal bills, spawning new lawsuits. Oakland County Chief Circuit Judge Nanci Grant declined last month to remove fellow Judge James Alexander from one lawsuit, in which Adell’s attorney alleged the judge made “inappropriate, biased and expletive-filled comments” and said he’d deny any request to dis-

miss Adell as a defendant. Adell said he intends to pay the Lippitt settlement with bank financing and is also paying a $5,000 mediation fee to Hardy. He then expects to form a new partnership, likely a Delaware corporation or limited liability company, in which relatives who were beneficiaries of the former trusts, and don’t bring liabilities or creditor claims from other court cases or business decisions, can hold an interest. That entity will then own and oversee redevelopment of the Expo Center site. Adell had previously been collaborating with Bingham Farmsbased Burton-Katzman Development Co . on Adell Towers, a proposed two-building, 500,000-square-foot complex comprising either two eight-story office buildings or an office building and a hotel. Adell said he has been in talks with a hotel company about a corporate-owned hotel site, as well as some restaurants and a possible destination entertainment company for a more commercial use. New suburban office towers are hard-pressed to compete for businesses being drawn to downtown Detroit right now, he said. Another possibility is a vertical mall of high-end retailers similar to those found in high-rises along the Magnificent Mile in Chicago. “There’s no real debt on the property, so I’m not spinning the wheels on a bicycle trying to pay that off. I’ve got time,” he said. “I’d like to develop it for my family, and this way we can time the market right rather than push through and get something you don’t really like.” 䡲

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TUESDAY- WEDNESDAY SEPT.22-23

Digital Summit Detroit. All day Sept. 22-23. Tech Media. Latest

digital marketing trends and practices from Netflix, Zappos, HubSpot, GM, Microsoft, Salesforce, NBCUniversal, Virgin America, BuzzFeed, StumbleUpon and more. Max M. Fisher Music Center, Detroit. $445 conference pass, $545 all-access pass, $695 platinum. Contact: Eric Gregg, (919) 274-2594; email: eric@techmediaco.com.

THURSDAY SEPT.24

The Opportunities and Challenges of a Multi-Ethnic Workplace. 5-7:30 p.m.

Asian Pacific American Chamber of Commerce. How can a multi-ethnic workplace create opportunities for companies and what challenges do companies face as their workplaces become more diverse? Dickinson Wright, Troy. Free for corporate and executive APACC members; $10 for entrepreneur, nonprofit and individual members; $20 for nonmembers. Contact: Erin Mclin, (248) 430-5855; email: erin@apacc.net. How to Get More Clients Now. 6:308:30 p.m. South East Michigan Entrepreneurs Association. New ways to turn more prospects into clients. Topics include three steps to getting more clients; the No. 1 way business owners can create cash flow; 12 tips to create authentic connections; and how to increase sales by 90 percent. Keynote speaker is Lisa Mininni, host of “The Navigating Change” radio show. Schoolcraft College, Livonia. $20. Contact: ZaLonya Allen, (248) 491-3146; email: administrator@semea.info. Know Your Numbers. 8:30 a.m.noon. Fifth Third Bank, Detroit Economic Growth Corp. and Small Business Development Center. Seminar designed to help entrepreneurs better understand their financial statements to more effectively run their operations and make better business decisions. Northwest Activities Center, Detroit. Free for Fifth Third Bank customers, the DEGC’s D2D participants and military veterans; $25 for all others. Phone: (734) 487-0355; Website: SBDCMichigan.org/training.

FRIDAY SEPT.25

Entrepalooza. 8:30 a.m.-2 p.m. The Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies, University of Michigan Ross School of Business. Katherine “Katty”

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

CALENDAR Kay, lead anchor of “BBC World

News America” and co-author of The Confidence Code, will deliver the keynote. Other confirmed speakers include Nate Aschenbach, co-founder, GameStart; Justin DeLay, CMO and co-founder, Tempo IQ; Jill Ford, special adviser to Mayor Mike Duggan and head of innovation and entrepreneurship, City of Detroit; Mary Lemmer, CEO and co-founder, Scape; Lisa McLaughlin, CEO and cofounder, Workit Health; Dawn White, CTO, co-founder and president, Accio Energy. Michigan League, Ann Arbor. Free. Contact: Marybeth Davis, mbdavis@umich.edu.

UPCOMING EVENTS 15th Annual Great Lakes Women’s Business Conference. 9 a.m.-5 p.m. Sept. 29-30. Great Lakes Women’s

Business Council. Conference will address the needs of both aspiring and established business owners and will deliver strategies for succeeding in a highly competitive market. Suburban Collection Showplace, Novi. $200 members, $225 nonmembers by Sept. 25; $225 members, $250 nonmembers at the door. Contact: Betty Aliko, (734) 677-1400; email: baliko@greatlakeswbc.org.

Crain’s 2015 Health Care Leadership Summit Oct. 28 Join Crain’s for this annual event that provides opportunities to learn about the ever-changing landscape of the health care industry, plus make the professional contacts to help navigate these changes. Held at the Marriott Renaissance Center from 7:30 a.m.-1 p.m. Oct. 28, the event includes keynote speaker Leah Binder, CEO of The Leapfrog Group, roundtable discussions and the Health Care Heroes awards. 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. Also, network with local business leaders and health care providers and discuss the latest in innovative health care strategies for 2015 and beyond. Individual tickets are $125; reserved table of 10 is $1,300. Preregistration closes Oct. 23 at 9 a.m. If available, walk-in registration will be $140 per person. For more information, contact Kacey Anderson, (313) 446-0300 or email cdbevents@crain.com.

“HOW DID MR. BUCK TRIM HIS ENERGY BILL?” After visiting DTE Energy’s online Lighting Advisor, Mr. Buck replaced old incandescent bulbs with more efﬁcient models to reduce lighting costs. He also adjusted his thermostat just a few degrees when his business was closed. Then he wrapped his water pipes and adjusted his hot water heater to save him even more. All in all, Mr. Buck says he saved around 10%, despite the harsh winter. DTE Energy wants to help you give your costs a trim, too.

Go to dteenergy.com/savenow today.

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ACQUISITIONS & MERGERS Urban Science, Detroit, a provider of analytical solutions for automotive OEMs and their dealers, has acquired AutoHook, Ann Arbor, a digital marketing company and a former division of HookLogic, New York City. Websites: leadto show.com, urbanscience.com. Fourmidable Group Inc., Bingham Farms, served as the buyer’s representative for the purchase by Edgewater Apartment Properties LLC, Petaluma, Calif., of two apartment communities in Greenville, Maplewood Square Apartments, a 104-unit market rate property closed at $5.32 million, and Meadow Ridge Apartments, with 52 units, closed at $3.39 million. Fourmidable will act as managing agent for both communities. Website: fourmidable.com.

CONTRACTS Toggled, Troy, a developer and

producer of solid state lighting technology and a subsidiary of Altair Engineering Inc., has added Ampco Lighting Ltd., Hong Kong, to its roster of LED lighting product licensees. Website: toggled.com. Paradigm Diagnostics Inc., Ann Arbor, which specializes in providing cancer testing, agreement with Deciphera Pharmaceuticals LLC, Waltham, Mass., for a phase-one clinical study of Altiratinib in molecularly defined cancers including

DEALS & DETAILS lung cancer, gastric cancer, renal cancer and glioblastoma multiforme. Paradigm will use its advanced molecular capabilities to characterize patient tissue samples from clinical trials to better predict which patients may be sensitive or resistant to Deciphera’s Altiratinib. Websites: paradigmdx.org, deciphera.com. ZipLogix LLC, Fraser, a real estate technology company, has added ClosingLinc LLC, Corona del Mar, Calif., a customer relationship engine company, to its zipAlliance partnership program. Websites: ziplogix.com, closinglinc.com. Ulliance Inc., Troy, a provider of human resources services, will provide training programs for staff and leadership at College for Creative Studies, Detroit, and Marywood Nursing Care Center, Livonia; career transition services for interns at Terumo Cardiovascular Systems Corp., Ann Arbor; and life adviser employee assistance programs to the City of Troy; the City of Midland; CLAW Logis-

tics LLC, Sterling Heights; Creative Foam Corp., Fenton; Gudel Inc., Ann Arbor; and Oakland County. Website:

ulliance.com.

EXPANSIONS NH Learning Solutions, Livonia, owner and operator of New Horizons Computer Learning Centers, has

opened an office at 211 W. Fort St., Suite 500, Detroit. Telephone: (313)230-5480. Website: nhlearningsolutions.com. Urbcam Michigan LLC, Bloomfield Hills, a real estate investment company, has opened The Lofts at the Union at Dearborn. The facility, with 99 beds and 63 units, is part of the Union of Dearborn and is managed by UCC Management Co., Bloomfield Hills. It provides housing primarily for students enrolled at the University of Michigan-Dearborn and other higher learning centers in Wayne County. Website: unionatdearborn.com.

NEW PRODUCTS BrassCraft Manufacturing Co.,

Novi, announced its new Push Connect Water Heater Connectors, the Speedi Plumb Plus Polymer Braid and ProCoat Coated Stainless Steel connectors designed for the plumbing professional. Website: brasscraft.com.

Employment Litigation Experience

In Your Corner.

ProQuest LLC, Ann Arbor, has launched Newspapers.com Library Edition, offering access to more than 85 million digitized newspaper pages, dating from the early 1700s into the early 2000s, exclusively for libraries. The papers range from well-known state and regional titles to small local newspapers in the U.S. and other countries. Website: proquest.com.

Ŷ Represents employers in litigation involving all types of employment and labor claims. Ŷ Advises healthcare organizations in matters involving peer review activities, professional credentialing and discipline. Ŷ Counsels employers regarding employment policies, reductions in force and employment agreements.

STARTUPS Pedicure & Shoes to Go LLC has

opened at 243 W. Congress St., Suite 102, Detroit. Website: pedicure-shoes-2-gollc.myshopify.com. Something Silk LLC, an online business offering hand-painted silk scarves created by owners Cindy Van Haaren, Warren, and her sister Mary Van Haaren, Chesterfield Township, has opened. Website: somethingsilk.net.

First Tier Ranking in Labor Law – Management Health Care Law

Fall 2015 Detroit

Novi

Grand Rapids

Kalamazoo

Grand Haven

Lansing

Contact Terry Miglio at tjmiglio@varnumlaw.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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ADVERTISING SECTION

SPOTLIGHT Here are some of the executive appointments from the Crain’s newsroom:

Crain’s has moved its complete list of appointments and promotions to www.crainsdetroit.com/peopleonthemove. Brief online listings for management-level positions are available at no cost, at editor’s discretion.

DIA promotes Salort-Pons to post as director The Detroit Institute of Arts has chosen its new director from within, naming Salvador SalortPons to lead the museum. He succeeds Graham Beal , who retired June 30 after 16 years. The appointment of Salort-Pons is effective Oct. Salvador 15. He has Salort-Pons been director of the DIA’s European Art Department, director of collection strategies and information, and the Elizabeth and Allan Shelden Curator of European Paintings. Salort-Pons, 45, has been senior curator at Meadows Museum at Southern Methodist Universit y in Dallas, a freelance curator at Memmo Foundation Rom e and assistant professor of art history at Complutense University of Madrid.

Plunkett Cooney CEO to step down; Cowan named Dennis Cowan was elected president and CEO of Bloomfield Hills-based Plunkett Cooney PC, effective Jan. 1. He will succeed Henry Cooney, who will step down after 18 years. Cowan, 59, has been leader of the firm’s business law department. He is a part of the real estate/transactional and governmental affairs practice groups. Cooney, 63, did not seek another three-year term in leadership because the firm’s governance rules would have required him to step down on his 65th birthday, before he could complete the full term. He said he will remain as a partner.

Guaranteed print placement in this promotional feature can be purchased at the website above.

FACILITY & MAINTENANCE

AUTOMOTIVE Andrew Sadlon

Dan Ringo

Sandy Hudson

President, Froude Hofmann Inc.

Chief Operating Officer Continuum Services, an affiliated company of REDICO

Executive Director/CEO, Wins For Warriors Foundation

Andrew Sadlon has been named President of Froude Hofmann Inc. of Novi, Michigan. Froude Hofmann manufactures Engine Test Cell Containers as well as the world’s most advanced Dynamometer products. Mr. Sadlon was formerly President of Hoffman Engineering of Stamford, Connecticut, a manufacturer of advanced LED Lighting products and test equipment.

EDUCATION Todd Baily

As COO, Ringo will assume Leadership responsibilities for Continuum Services with a focus on corporate operations and strategic planning, corporate client services, sales leadership, as well as employee development, retention, recruitment and performance. Immediately prior to joining REDICO, Dan served as Vice President of Facility Operations at SodexoMAGIC in Chicago.. He also served as General Manager of Sodexo USA, serving the Chicago Public School system, and director of operations at Powerlink Facility Management Services, where he was responsible for the Detroit Public Schools.

Assistant Vice President and Director of Victors for Michigan Campaign, University of Michigan The University of Michigan appointed Todd Baily assistant vice president and director of the $4 Billion Victors for Michigan campaign. Baily served as assistant dean for development and alumni relations at the U-M Law School since 2004. Formerly director of Principal Gifts, University of Michigan; Director Fundraising Programming and Campaign Planning, Mayo Clinic Health System, Minnesota; Assistant Dean for Development and Alumni Relations, U-M Law School.

FINANCE Richard L. Platte Jr. Chief Investment Officer, Schwartz Investment Counsel Inc. In this role, he is responsible for the implementation of investment strategy for the Firm. Mr. Platte continues in his role as coportfolio manager of the Ave Maria Rising Dividend Fund, the Ave Maria Growth Fund and the Ave Maria Bond Fund.

Trinity Home Health names Denholm as CEO Erin Denholm has been appointed CEO of Trinity Home Health Services, a division of Livonia-based nonprofit health system Trinity Health. She replaces the retiring Grace McCauley. At Centura Health in Denver, Denholm was CEO of home care and senior living communities and senior vice president of clinical transformation.

W4WF launched over two years ago by Detroit Tigers pitcher Justin Verlander to support the veterans returning with mental health disorders, including PTSD, traumatic brain injury, and depression. Hudson is the Foundation's first full-time executive. Formerly Henry Ford Hospital, Chief Development Officer. During six-year tenure with Henry Ford Health System, Hudson co-founded the successful Get Your Heart Racing annual fundraising campaign, which raised over $3 million in its 5 years.

REAL ESTATE Simon J Leopold Chief Financial Officer Taubman Simon J. Leopold will replace Lisa A. Payne as Taubman's Chief Financial Officer effective January 1, 2016. Payne will retain her role as vice chairman of the Board until leaving the company in March 2016. Leopold has served as Taubman's Treasurer and Executive Vice President, Capital Markets, since joining the company in 2012. Prior to, he spent 13 years as a managing director in the real estate investment banking groups of Deutsche Bank, KBW and UBS.

TECHNOLOGY Mikel Slater Vice President of Human Resources, Comcast

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The Detroit chapter of the Association for Corporate Growth elected Doug LaLone, partner in Bloomfield Hills law firm Fishman Stewart Yamaguchi PLLC, as president.

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In the organization of professionals involved in mergers and acquisitions, LaLone replaces Rob Dutkiewicz, a partner with Southfield accounting firm Clayton & McKervey PC.

NONPROFIT

As a key member of the region’s senior leadership team, Slater is responsible for partnering with organization leads to develop and implement the HR strategy for attracting and retaining top talent and meeting the needs of employees and the business. Slater has 15 years of leadership experience. Most recently, he served as Vice President of Human Resources, Americas for Plastic Omnium’s INERGY Automotive Systems division. Prior to that, he worked at Meritor and DTE Energy.

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JOB FRONT POSITIONS AVAILABLE

REAL ESTATE AUCTIONS

Vice President of Customer Support Covenant Eyes is looking to hire a Vice President of Customer Support. The Vice President of Customer support is a core member of the Executive Strategic Leadership team at Covenant Eyes, and is responsible for supporting the Covenant Eyes customer base, leading the customer support management and staff, and continuously shaping the business, the work, and the people in support of the company’s strategic direction. For detailed job description and to apply for position, go to our website:

http://www.covenanteyes.com/about-covenant-eyes/careers/

Online Real Estate Auction Tuesday, October 13th

KŶůŝŶĞ ŝĚĚŝŶŐ KŶůǇ͊ KƉĞŶ ƚŽ ƚŚĞ WƵďůŝĐ͊

Selling 27 real estate properties throughout Michigan through Online Auction!

&ĞĂƚƵƌĞĚ WƌŽƉĞƌƚŝĞƐ >ĂŬĞ KĚĞƐƐĂ͕ D/͗ ϵ͕ϲϬϬ ƐƋ͘ Ĩƚ͘ ĐŽŵŵĞƌĐŝĂů ƉƌŽƉĞƌƚǇ ŝŵŽŶĚĂůĞ͕ D/͗ ϯ͕ϲϬϬ ƐƋ͘ Ĩƚ͘ ŽƉĞƌĂƚŝŶŐ ƌĞƐƚĂƵƌĂŶƚ ĂŶĚ ĂƉĂƌƚŵĞŶƚ ƵŶŝƚ >ĂŶƐŝŶŐ͕ D/͗ ϰϬ͕ϬϬϬ ƐƋ͘ Ĩƚ͘ ŶŽŶͲŽƉĞƌĂƚŝŽŶĂů ďŽǁůŝŶŐ ĂůůĞǇ ŽŶ ϱ͘ϰ ĂĐƌĞ ůŽƚ &ůƵƐŚŝŶŐ͕ D/͗ ϭϲ ƵŶŝƚ ĂƉĂƌƚŵĞŶƚ ďƵŝůĚŝŶŐ sŝƐŝƚ > ^d / ƌĞĂůĞƐƚĂƚĞ͘ĐŽŵ ĨŽƌ ĐŽŵƉůĞƚĞ ůŝƐƚ ŽĨ ƉƌŽƉĞƌƚŝĞƐ ƐĞůůŝŶŐ͊

School of Nursing Operations Manager - Clinical Learning Center

&Žƌ ĚĞƚĂŝůĞĚ ŝŶĨŽƌŵĂƚŝŽŶ Θ ƚŽ ďŝĚ ǀŝƐŝƚ

> ^d / ƌĞĂůĞƐƚĂƚĞ͘ĐŽŵ Žƌ ĐĂůů ϭͲϴϬϬͲϱϮϳͲϴϮϰϯ͘

The U-M School of Nursing Clinical Learning Center (CLC) seeks an operational manager. The CLC provides unparalleled learning resources for nursing students in a new facility. This new position was created to facilitate the ongoing operations of the CLC. The manager will act as an operational manager and systems analyst responsible for analyzing and planning operational aspects of the CLC. The manager will implement necessary systems for scheduling, staffing and inventory. The manager will work with academic administrators, faculty and CLC staff to understand the materials and supplies necessary for the coursework conducted in the CLC throughout the year. Working closely with student services to fully understand and analyze the course schedules and coursework conducted in the CLC, the manager will analyze operational needs such as scheduling, equipment, inventory, etc. After defining systems, procedures and policies necessary to operate effectively and efficiently, the manager will work with appropriate groups within the School to implement these systems and develop business processes. The ideal candidate will have expertise in the areas of systems analysis, schedule optimization, inventory planning, staffing analysis and management, project management, and development of staff. A former management consultant, engineer, or operations analyst with management experience would be highly desirable for this position . Please visit the University of Michigan jobs website ’Careers at the U’ to learn more about this Opening and to apply: http://umjobs.org/ (Job Opening # 109374)

PeopleSoft Administrator for ITC Holdings Corp. in Novi, MI. Duties: dev objectives & provide tech support for PeopleSoft Fin’l, Supply Chain, & HR apps; install PeopleSoft apps, modules, & tools on Oracle 10g Real Application Cluster database platform; install & configure Oracle Web Logic server & server components, & create Web Server domains. Full duties available at www.itc-holdings.com. Req’s: Bach Deg in Comp Sci, Comp Apps or related field, or Electrical, Electronic, or Comp Sys Eng’g. 3 yrs exp in a PeopleSoft app’n admin pos’n. Exp must inc’l: configuring & tuning PeopleSoft Application Server, Process Scheduler, Web Server, & client tools for a load-balanced environment; using PeopleSoft Change Assistant for HRMS tax updates & PeopleTools app’n upgrades; data storage for PeopleSoft apps, inc’l interfacing w/ Oracle & SQL databases; administering PeopleSoft apps & Fin’l, Supply Chain, & HR modules, inc’l PeopleTools & Peoplebooks, & generating verity search collection; & Unix & Linux admin in a PeopleSoft environment. Exp can be acq’d concurrently. Apply at www.itc-holdings.com. EOE

POSITIONS AVAILABLE

û EXECUTIVE POSITIONS û Growing Michigan Franchise is hiring all Executive Positions including Director of Operations, Regional Manager and Director of Regional Marketing. Ownership opportunities also available. All candidates should email Resume and cover letter to: MiRegionalFranchise@gmail.com

SURVEY ANALYZE

MARKET PLACE BUSINESS SERVICES

CrainsDetroit.com/JobConnect |

ϳϳ ĐƌĞƐ sĂĂĐĂŶƚ >ĂŶĚ

FOR SALE LIMITED DIVIDEND HOUSING ASSOCIATION L.L.C. A MSHDA DEVELOPMENT

Property Location: 6964 N. Canal Rd, Dimondale, MI

Tons of depreciation. Certified financials. Certified current value $1.67 million dollars 12 year Future value $4.5 million

Tuesday, October 27th ~8am-2pm (Online Bidding Only)

HOUSING ASSOCIATION L.L.C. ASKING $950,000.00 Email inquires to: pfuciarelli@yahoo.com

WĂƌĐĞů ϭ͗ ϱϬ ĂĐƌĞƐ ǁ͘ ϭϭϯ Z h ;^ĞƉƚŝĐ dĂƉ ZŝŐŚƚƐͿ͘ ŽŶĞĚ ZͲϭD͘ ZĞƐŝĚĞŶƚŝĂů ĞǀĞůŽƉŵĞŶƚ WŽƚĞŶƚŝĂů͘ WĂƌĐĞůů Ϯ͗ ϭϱ ĂĐƌĞƐ ǁ͘ ϮϮ Z h ;^ĞƉƚŝĐ dĂƉ ZŝŐŚƚƐͿ͘ ŽŶĞĚ Ͳϭ͘ /ŶĚƵƐƚƌŝĂů ĞǀĞůŽƉŵĞŶƚ WŽƚĞŶƚŝĂů͘ WĂƌĐĞů ϯ͗ ƉƉ͘ ϭϮ͘ϲϮ ĂĐƌĞƐ ǁ͘ ϮϮ Z h ;^ĞƉƚŝĐ dĂƉ ZŝŐŚƚƐͿ͘ ŽŶĞĚ Ͳϭ͘ /ŶĚƵƐƚƌŝĂů ĞǀĞůŽƉŵĞŶƚ WŽƚĞŶƚŝĂů͘

ǁǁǁ͘> ^d / ƌĞĂůĞƐƚĂƚĞ͘ĐŽŵ &Žƌ ŵŽƌĞ ŝŶĨŽƌŵĂƚŝŽŶ ĂŶĚ ƚŽ ďŝĚ &Žƌ ŵŽƌĞ ŝŶĨŽƌŵĂƚŝŽŶ ĂŶĚ ƚŽ ďŝĚ ǀŝƐŝƚ > ^d / ƌĞĂůĞƐƚĂƚĞ͘ĐŽŵ Žƌ

Raise Business Capital in SEC Compliance. Offer Equity, Debt or Crowdfunding. Innovative Law Firm, 27 Years’ Experience. Info@shermanlawoffices.com

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248-318-3544

ONLINE REAL ESTATE AUCTION- Weds., Sept. 30– 8AM REQUEST FOR PROPOSALS

REQUEST FOR PROPOSAL The Detroit-Wayne Joint Building Authority (D-WJBA) owner/operator of the Coleman A. Young Municipal Center (CAYMC) is seeking proposals from qualified firms interested in providing snow removal services at the CAYMC. The CAYMC is a 745,000 square foot office building located in the heart of downtown Detroit. Mandatory site walkthrough’s will be held in the 13th floor Auditorium located in CAYMC on Thursday, September 24, 2015 at 10:00 AM Detailed Request for Proposal may be obtained on or before 10:00 AM Thursday, September 24th, 2015 by appearing in person at: The Coleman A. Young Municipal Center 2 Woodward Avenue, Suite 1316 Detroit, Michigan 48226 Or Submit a request via e-mail to Mike.Kennedy@Hines.com Interested firms must submit (4) four sealed bid copies no later than Friday, October 9, 2015 @11:00 AM (with public opening to follow) To:

MATCH

Online Real Estate Auction

RESIDENTIAL PROPERTY

Detroit -Wayne Joint Building Authority Coleman A. Young Municipal Center 2 Woodward Avenue, Suite 1316 Detroit, MI. 48226 Attention: Michael Kennedy, Property Manager

Crain’s Classifieds Gets Results

One Michigan based bank is liquidating a large amount of their bank owned real estate at public auction. Take advantage of this opportunity and be ready to bid and buy on Sept 30!

Montague: 19.74 Acres, 7 residential parcels selling as one Stanwood: .72 acre vacant residential lot, touches a hole on St. Ives Golf Course Algonac: 2 story office building Holly Township: 1 Acre r esidential lot Swartz Creek: .24 Acre residential lot in subdivision Attica: 2.57 Acre residential par cel Mt. Clemens: 3,500 sq. ft. medical office building Howell: 3.98 vacant Acres close to I-96 Howell: 4.48 vacant Acres (2 parcels selling as a package) Linden: 14.85 Acres residential land Flint: 4.98 Acres commer cial land

Flint: 26 Vacant condo lots in subdivision Burton: 6.98 acres (2 commer cial parcels) selling as one Marlette: 14,480 sq. ft. industrial building on 1.54 Acres Bad Axe: 2 story home on .2 acres3beds, 1.5 bath Port Hope: 1.93 vacant Acres Port Hope: 2 mobile homes selling as one Weidman: 1400 sq. ft. home on .86 Acres Mt. Morris: 6.72 Acres of commer cial land with 4 buildings

MARKET PLACE MISCELLANEOUS

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Call 810-701-0833

These properties will sell on Sept 30 via online auction. For more info, visit LASTBIDrealestate.com or call Jordan (616) 460-8936

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FOR SALE

Call Us For Personalized Service: (313) 446-6068

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FAX: (313) 446-0347 E-MAIL: cdbclassified@crain.com INTERNET: www.crainsdetroit.com/section/classifieds

midmich.edu/building

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

Advertise your Products and Services in Crain’s Detroit Business

for more information

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GOP lawmakers seek return of tax credits for charitable contributions LANSING — A group of Republican state senators wants to restore income tax credits for some charitable contributions that were eliminated several years ago. Businesses that used to qualify for charitable credits under the now-defunct Michigan Business Tax are not covered in the bills. The credits would, however, apply to individual taxpayers and couples, along with estates and trusts. The four-bill package, introduced this month, would reinstate credits to taxpayers for donating to public institutions, including art, museums, libraries, public broadcasting stations, colleges and universities, and the state archives; food banks and homeless shelters; and community foundations. In addition, two bills would offer credits for the donation of a vehicle to a charitable organization and for a portion of adoption expenses. “The best way to go off and incentivize some of these institutions that we’re talking about is by getting the private sector engaged. If you want a good library, for example, then let’s incentivize that behavior,” said Sen. Patrick Colbeck, R-Canton Township, who introduced the bill related to public in-

LINDSAY VANHULLE: Capitol Briefings lvanhulle@crain.com Twitter: @LindsayVanHulle stitutions. “Any time you’re deincentivizing charitable contributions, I think, it’s going the wrong direction. We’re stronger when we’re encouraging charity.” Sen. Goeff Hansen, R-Hart, and Sen. Tonya Schuitmaker, R-Lawton, co-sponsored the bills. If approved, the bills would take effect for tax years after Dec. 31, 2015. The state typically would award credits worth 50 percent of the donation made, or up to $100 for an individual and $200 for a couple filing jointly. Estates and trusts would qualify for credits worth 10 percent of their total tax liability for the year or $5,000, whichever is less. Adoption credits would be val-

ued at the taxpayer’s expenses beyond the amount credited on his or her federal tax return, or $1,200 per child, whichever is less. Taxpayers who donate vehicles would receive 50 percent of the fair market value of the vehicle, up to $50 for an individual or $100 for a couple filing jointly. These bills arrive as the Legislature tries to put together a longterm funding source to repair Michigan’s crumbling roads. Separate packages from the House and Senate have relied on some amount of existing general fund spending. Gov. Rick Snyder, who eliminated the charitable credits in 2011 in an effort to simplify the state’s tax structure, told Crain’s the restored credits would be a tradeoff to roads when it comes to general fund priorities. “I understand in principle where the governor’s coming from,” Colbeck said. Yet, he added: “This is not a bank buster. It’s really a chance to get (taxpayers’) voice out there.” The bills — Senate Bills 461-464 — were introduced Sept. 9 and referred to the Senate’s finance committee. They await a hearing. 䡲

UPCOMING

PARTNER EVENTS

Great Lakes Women’s Business Council 15th Annual Great Lakes Women’s Business Conference This conference addresses the needs of both aspiring and established busines owners and will deliver strategies for succeeding in a highly competitive market. September 29-30 Suburban Collection Showplace, Novi For additional information, call (734) 677-1400.

Detroit Society for Human Resource Management Workshop: The Non-Hired Candidate Experience and the Impact on Your Organization Speaker: David Szary, founder and president, Lean Human Capital LLC October 6 • 7:30-10 a.m. Management Education Center, Troy Detroit SHRM members: $25 Nonmembers: $35 To register, go to www.detroitshrm.org or call (248) 478-6498

Southfield Area Chamber of Commerce Taste of Southfield, presented by Kroger

UM disburses $345M of endowment for investment The University of Michigan pledged about $345 million to seven investment managers from its $10 billion longterm endowment pool, following the approval of the school’s regents on Sept. 17. The endowment committed $235 million to three new managers and more than $100 million to existing partner funds. The university has the third-largest endowment among public colleges in the U.S. One of the largest commitments was a new $100 million investment in Alyeska Investment Group , a Chicago-based hedge fund started

PAYNE FROM PAGE 1

the Troy-based executive search firm Harvey Hohauser & Associates LLC, said companies searching for a leader often seek out candidates with a financial background. “The number one route that CEOs come up through is finance,” Hohauser said. “Businesses struggling, either with a failing business unit or poor processes, always look to someone with a strong financial background. The biggest challenge is whether a CFO’s skills can be refined and translated to a new industry.” Payne hopes to land at either another real estate firm or something

by Citadel alumnus Anand Parekh. The fund has $9 billion in assets as of March, including leverage, according to a regulatory filing. Another $100 million is designated to The WindAcre Partnership , a long-only equity manager based in Houston, which has more than $500 million in assets. The fund is managed by Snehal Amin, an alumnus of the university and a founding partner of Theleme Partners hedge fund in London. The endowment also said it would invest $35 million with

VII , a private equity fund in Chicago; about $40 million in Stockholmbased private equity fund EQT VII, and $30 million in Foresite Capital Fund III, a venture capital fund that invests in late stage health care companies. The university’s endowment has been managed by Erik Lundberg since 1999. Its annual return for fiscal 2015 will be reported in October. Last year, the fund reported a 10year return of 10.0 percent, one of the top returns for public universities with at least $1 billion under management.

Madison Dearborn Capital Partners

Bloomberg News

in technology but is willing to mull over another CFO role in the right company. Simon Leopold, 48, replaces Payne at the Bloomfield Hills real estate investment company on Jan. 1, 2016. She’ll continue as vice chairman of Taubman’s board until March 31. “I want to find something that’s challenging and interesting,” Payne said. “I’ve got six months (before I leave) to network and talk to others who have been in my position about options.” If the right position doesn’t become available, Payne said, another option is to seek more board seats. She already serves on the boards of Taylor-based Masco Corp. and

Milwaukee-based Rockwell Automa tion Inc. She also serves on the nonprofit boards of Cranbrook Educa tional Community, The Henry Ford and Care House of Oakland County. Payne joined Taubman as CFO in 1997 from her position as vice president of Goldman Sachs’ investment banking division. Before that, she was vice president of real estate services at Midland-based Chemical Bank. Payne was a Crain’s CFO of the Year winner in 2013. She earned a bachelor’s degree from Elizabethtown College in Elizabethtown, Pa., and an MBA from Duke University. 䡲 Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

More than 20 local restaurants, taste of Southfield Cook Book, live entertainment and raffle drawings. October 6 • 5-8 p.m. 2000 Town Center Atrium, Southfield Tickets: $20 (advance) Tickets are available at www.southfieldchamber.com 3rd Thursday, hosted by Bluewater Technologies October 15 • 4:30-6:30 p.m. Nonmembers: $10 Register online at www.southfieldchamber.com

Marketing & Sales Executives of Detroit Back to the Future: An Evening with MSED’s Platinum Award Finalists This year, we are inviting past Platinum Award finalists to present their keys to success – what they accomplished to be nominated, why their efforts were successful and what their results are today. October 29 • 5-8 p.m. Management Education Center, Troy MSED members: $45 Nonmembers: $60 To register, please go to www.msedetroit.org or call Meeting Coordinators at (248) 643-6590.

For more local events, visit Crain’s Executive Calendar at crainsdetroit.com/executivecalendar

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Kresge pledges $350M in social investment by 2020 By Sherri Welch swelch@crain.com

The Kresge Foundation ’s board of trustees has stepped up its social investment plans with a commitment to invest $350 million, or 10 percent of the value of its endowment, in socially beneficial efforts by 2020. Those investments, which will come on top of the nearly $140 million in grants the Troy-based foundation makes each year, will be funded through returns on its $3.5 billion endowment over the next five years, Kresge said. The expanded commitment to social investments — which commonly take the form of debt, equity, guarantees and deposits — “solidifies the notion that we, as a foundation, cannot solve complex social programs through traditional grant-making alone,” said Kresge President and CEO Rip Rapson in a news release.

“The language of philanthropy is shifting, from grant-making and social investing being seen as two disparate strands of Rip Rapson: “The investment, to a Language of philan- new model, thropy is shifting.” where all types of social funding work in an integrated way toward the same end,” he said. “By defining this funding pool, we are extending our hand to for-profit and nonprofit partners alike and are asking them to join us on the front lines to use more innovative approaches to this work,” he said. With its increased commitment to social investments, Kresge said it has set a goal to attract an addition-

al $1 billion from other investors to address the issues facing cities and low-income people. The foundation’s social investments, like its grants, will continue to align with its six program areas: arts and culture, education, environment, health, human services and community development in Detroit. The new strategic commitment builds on Kresge’s use of social investments over the past several years. It began exploring these tools in 2007 but to date has made social investment budget and spending decisions annually, in addition to its annual grants. Those investments include both program-related investments — which are low-interest loans and other financial tools such as guarantees that allow entities to access capital from other investors, test new approaches and scale pro-

MEDC

Crain’s reported in 2012. Around 2011 or 2012, the foundation made a 10-year, $10 million loan at 1 percent to the Opportunity Finance Network to provide lending to small businesses and nonprofits in low-income neighborhoods. A recent example of the way Kresge uses a variety of funding tools to bring in other partners came with this week’s announcement of the Strong Families Fund. The $70-million fund pairs affordable housing with on-site social service coordination in the nation’s largest pilot of pay-for-performance. Kresge has committed $6 million in social investments and a $1.25 million grant to the fund, which attracted more than $60 million to the project from numerous other partners, including KeyBank , Goldman Sachs, and the Robert Wood Johnson Foundation. 䡲

A year of challenges

FROM PAGE 3

affect the course of its future. The agency is funded in two ways — with annual budget appropriations from Michigan’s general fund and through tribal casino revenue, referred to as corporate dollars. MEDC leaders said it’s too early to offer a specific plan. But after a year of transition and handling immediate budget pressures, CEO Steve Arwood said the agency is positioned to deal with that question. “Now we’re going to be able to look ahead and focus on that more strategically,” he said. To start, it plans to double down on its three core services — business attraction and retention, including exports and entrepreneurs; community development; and marketing, including the Pure Michigan tourism campaign. “The plan that Steve laid out gets the organization back to what its original role was a decade ago,” said Rothwell, the MEDC’s first CEO. The agency was formed in 1999 through an interlocal agreement under former Gov. John Engler. The agency was founded to withstand changes in economic development strategy borne by election cycles, Rothwell said, adding that it has continued through three governors, switches in political party power and the worst recession since the Great Depression. Today, he said, the agency has flexibility to adapt quicker as the economy changes. That likely will include revenue streams. Total tribal casino revenue has been falling, which led to smaller payments in 2014, compared to the previous year, from all six tribes that currently make them. Michigan’s American Indian tribes are required to share a percentage of their proceeds from electronic gaming revenue with the MEDC as a provision of their state gaming compacts in exchange for being allowed exclusive gaming

grams that are working — and mission-related investments, which are market-rate investments from the foundation’s corpus that align with Kresge’s mission and values. All returns are funneled back into the foundation’s funding pool for reinvestment. Kresge said its expanded social investment commitment includes $105 million in commitments made through the end of 2015 to projects ranging from expanding access to health care and affordable housing for low-income residents to investments in technology-based services that extend the reach of the social safety net. Kresge made its first program-related investments in 2008 as threeyear, zero-interest loans to 14 human service agencies around the country that were seeing skyrocketing demand for their services, as

The Michigan Economic Development Corp. is reorganizing amid budget cuts after a year of immediate challenges, including:

䡲 $25 million in legislative budget cuts, along with being targeted by the House as a possible source of revenue for a road-funding plan. 䡲 The discovery that the state’s tax credit liability for the now-defunct Michigan Economic Growth Authority program was nearly 44 percent higher

than estimated, at nearly $9.4 billion.

䡲 The loss of the state’s film incentives program, housed within the MEDC, when lawmakers voted to end them; the film office recently reorganized to include digital media, including mobile app developers and animators. 䡲 A leadership change: In January, Steve Arwood took over as CEO after Gov. Rick Snyder tapped his predecessor, Mike Finney, to be the governor’s senior economic growth adviser. “That’s a lot of change at one time,” said Doug Rothwell, chairman of the MEDC’s executive committee and president and CEO of Business Leaders for Michigan. “In times of limited resources, you’ve got to work hard to get your core mission focused.”

MEDC redeploys for budget cuts

rights within a specific geographic area. The Gun Lake Tribe also withheld a required $7 million payment to the state in June in a dispute over online lottery games. The tribe, which operates Gun Lake Casino in Allegan County, believes the lottery expansion negates the exclusivity provision in its compact that requires it to make revenue-sharing payments. Rothwell said the agency saw the tribal revenue issue on the horizon and adjusted its corporate budget — which pays for such programs as Pure Michigan Business Connect, which matches companies with instate vendors — to include more one-time expenses, rather than ongoing costs. Still, the MEDC doesn’t anticipate much growth in tribal revenue in the immediate future. As a result, the agency’s corporate, or tribal, funds are taking the biggest budget hit — 47 percent. Coupled with legislative budget cuts, both midyear and for the 2016 fiscal year that starts next week, the MEDC and separate Michigan

Strategic Fund will have a combined $351.8 million budget as of Oct. 1, down from $481.7 million this year. Most of the budget cuts will be related to staffing, since the MEDC is heavily service-based, the agency said. Some employees who remain will be trained to do more than one job. While the number of employees funded through state appropriations has been dropping steadily since records started being kept in 2001, the MEDC’s total payroll rose as high as 336 by January — in part because the number of employees paid by tribal dollars also rose. The MEDC will have 242 employees as of Oct. 1. State and local economic development administrators all say they don’t expect local agencies to be affected as much by the cuts since the MEDC’s central programs will continue to exist. At most, they say, local agencies likely will notice an impact of fewer staff, or one employee handling multiple roles. “It’s not going to be an impact

The Michigan Economic Development Corp. is dropping a handful of programs and making other changes to accommodate a 27 percent budget cut as of Oct. 1, the start of the 2016 fiscal year. Most of the cuts will affect staffing, with 65 layoffs expected. Other affected programs or services include:

䡲 Michigan Match (MI Match): The state no longer will set aside $2 million in matching funds to help strengthen companies’ applications for some federal grants. 䡲 Some functions that used to be handled by a stand-alone office, including supply and logistics, no longer will be housed separately but instead will be brought in as part of a larger division. 䡲 The MEDC is exploring ways to maximize its office space and reduce lease costs for space in Detroit. The agency owns its Lansing office building. 䡲 Some employees will be trained to do more than one job. One employee may handle both economic development and community development services in a community, where previously the services were handled by more than one staffer. that will change our operations that much,” said Sandy Baruah, president and CEO of the Detroit Regional Chamber. The chamber holds events related to the Pure Michigan Business Connect program on behalf of the MEDC and receives a fee for service, said Baruah, who also recently accompanied Gov. Rick Snyder on his trade trip to Japan. “Having a consistent strategy that can be executed year after year for

economic development at the state level is hugely important,” he said. “But we also need to move kind of beyond funding challenges to ensuring that we have a statewide economic development strategy that lasts longer than one gubernatorial term. The successful states have an economic development strategy that they essentially pursue regardless who the governor is.” 䡲 Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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“Anya is one of the best entrepreneurs I’ve run into in a long time. She has a very solid plan and sticks to it. She seems to do everything right.”

TECHSTARS FROM PAGE 3

she was surprised by the energy of the growing entrepreneurial community here. “I’m from New York, and I’m used to a different tone there. It takes a lot of time to break down doors in New York. What I find to be embracing about Detroit is in two months I felt as if I’d built up as good a network as I had in New York. People in the community here help each other. There’s an energy and a desire to change things.” There was also a major tactical reason for moving a company here that wants to help people share rides. “There’s such a lack of public transportation,” Babbitt said. “This was just the best place for us to be.” When she started in the Techstars program, Babbitt said, the business model was to sell the ride-sharing app to individuals so they could find people who live near them who also work near them. But mentors at Techstars, led by prominent local angel investor Terry Cross, helped persuade her to change her focus, to target companies instead, so that closing a deal didn’t mean adding one customer, it could mean adding hundreds, or in the case of DTE, potentially thousands. SPLT also allows employees who don’t have cars to rent them when needed from fellow employees. Steve Baker, manager of IT strategy and innovation for DTE, was so impressed by Babbitt and SPLT that he introduced her on stage at the Demo Day Techstars held at Fillmore Detroit on Sept. 10. Baker said the ride-sharing app

“That Anya is moving here from New York speaks to the rising entrepreneurial ecosystem in Detroit. ... Anya has drive and determination and is very coachable.”

Terry Cross,angel investor

Ted Serbinski,Techstars Mobility,Driven by Detroit

will be rolled out first to about 660 of can thrive. It’s a land-grab situaDTE’s IT staff and related contrac- tion,” he said. tors, with feedback from them being “That Anya is moving here from used to tweak the app. If things go as New York speaks to the rising enplanned, he said, the app will then trepreneurial ecosystem in Debe offered to the 2,500 employees of troit,” said Ted Serbinski, managthe downtown headquarters and ing director of the local program of eventually to all 10,000 employees. Boulder, Colo.-based Techstars, “This offers a simple, elegant solu- which is called Techstars Mobility, tion that our employees will rally Driven by Detroit. around,” said Baker. “We see this as “What they’re building solves a fostering engagement and collegiali- big problem, especially in a city like ty for our employees, but that’s only Detroit, which doesn’t have very half of it. The other part is this con- good mass transit,” he said. “Anya tinues to demonstrate our environ- has drive and determination and is mental stewardship. It reduces the very coachable.” number of cars on the road, it reDisplaying her willingness to be duces CO2 emissions, and it coached, Babbitt applied for reduces traffic congestion.” and was accepted to a “Anya is one of the best three-month accelerator entrepreneurs I’ve run into program run by professor in a long time. She has a David Brophy at the University of Michigan that began very solid plan and sticks to weekly meetings Sept. 16.. it. She seems to do everyBrophy, director of the ofthing right,” said Cross. fice for the study of private “For a person her age, she’s equity at the Ross School of exceptionally well versed.” David Brophy: Business at UM, said 50 Cross said there are no “She’s well on her early-stage companies from obvious competitors for way.” around the U.S. applied and SPLT in the kind of ridesharing program the company has 15 were accepted, each being paired launched, but there aren’t many bar- with a team of six UM students to improve business models and help riers to entry if competitors arise. “The company that gets off first them refine their pitches for capital. “Anya is a very interesting perand bites off big chunks of business

son,” said Brophy. “If you’ve seen her bio, she’s done 50,000 things already. She’s gathered a very good team, and she’s in a very hot space, the on-demand industry, which is spreading across every so-called firmly established industry in the world. “In her case, she’s bet on something near to everyone: How do I get a ride? And she’s well on her way to making it work.” Babbitt, 33, is a serial entrepreneur. “I’ve always had that hunger. I think it’s something you’re born with,” she said. She graduated from Boston Uni versity in 2004 with a degree in marketing and communications. In 2008, she founded a New Yorkbased marketing firm, Fiat Luxe Inc., and in 2010 co-founded New Yorkbased APT212 Realty Group Inc. , which helped corporations find

long-term rentals for executives. In 2012, she co-founded Living Luxe Inc. , a boutique real estate firm helping clients find investment properties in Manhattan and Fairfield County, Conn. She sold her stake in all three companies last summer, which allowed her to have money in the bank to launch Splitting Fares. Babbitt, the only female CEO of the 10 companies in the inaugural Techstars program in Detroit, said she has hired three local employees and now employs eight, seven here and one in New York. She said she is raising a funding round of $750,000. As part of her acceptance to Techstars, she got a start on that round by getting $120,000 in funding from Detroitbased Fontinalis and Basking Ridge, N.J.-based Verizon Ventures. 䡲

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SYRIA FROM PAGE 1

and continue to do.”

Red tape in the way? The future of the redevelopment rests on buy-in from federal, state and city governments as well as the pooling of public and private funds. The ACC has invested $14 million of its own money into NorthTown since 1998 to build community, human services and youth centers. It also acquired several vacant lots for the multifamily housing units. In 2013, it signed a deal with Penrose Village Development Corp. to build 72 single-family homes, but the final phase of building multifamily housing didn’t happen because, Kelly said, the city of Detroit never approved the project, and without support, the developer won’t break ground. “The bureaucracy in the city of Detroit has been discouraging and difficult to navigate,” Kelly said. “(The developers) have had trouble identifying who needs to approve plans, and have been sent in many directions that have led nowhere; typical inefficiency, too many layers and incompetence on the part of the city’s planning function, which we are aware Mayor (Mike) Duggan is trying to rectify.” Duggan could not comment on the plan and where it stands in the city’s approval process. However, the mayor would welcome Syrian refugees into the city, John Roach, director of communications for Duggan’s office, said in an email. Kelly said funding could, and should, come from various sources to ensure the refugee resettlement goes smoothly — including funds from the U.S. Office of Refugee Resettlement , various nonprofits, Michi gan State Housing Development and other state and local agencies.

BOWLING FROM PAGE 3

Southeastern Michigan Bowling Cen ters Association. “It was in no danger

of closing. It was ‘The Godfather.’ It was a deal they couldn’t refuse.” But on the other end of the spectrum, Cloverlanes Bowl in Livonia and Thunderbird Lanes in Troy, owned by Great Lakes Bowling Cen ters, both faced property tax issues in Wayne and Oakland counties, according to public records. Those alleys closed in May. The industry is also facing changing family entertainment demands and costly equipment improvements that can be too much for owners to absorb, said Ken Prokopec, executive director of the Bowling Centers Association of Michi gan in Southfield.

“The ones that have not reinvested, you get to the point where it does become cost prohibitive because they didn’t plan for the future,” he said. Some bowling alleys are turning into FECs — shorthand for family entertainment centers — where activities like laser tag and rope mazes,

GLENN TRIEST

The Arab American and Chaldean Council has invested $14 million of its own money into the NorthTown section of Detroit since 1998 to build community, human services and youth centers. It also acquired vacant lots for multifamily housing.

Success elsewhere There are arguments to be made for using refugees for revitalization efforts and using public and private funds to do so. Minneapolis-St. Paul and Cleveland both have found at least some success rebuilding neighborhoods with immigrants. Cleveland welcomed 4,518 refugees from Bhutan, Ukraine, Burma and Somalia between 2000 and 2012. Volunteer agencies (commonly referred to as “volags”) and cities spent $4.8 million on refugee services in 2012, according to an economic impact study on the population by Chmura Economics & Analytics . The funds included $2.5 million on wages to staff members at the organizations and $1.1 million on food, clothing and transportation. However, the economic impact outpaced the support spending tenfold, the study reported. The economic impact of those refugees in 2012 is estimated at $48 million and the creation of 650 jobs. Between 2003 and 2012, the refugees in Cleveland started 38 businesses, employing 141 employ-

and expanded arcade areas are under one roof along with bowling. Others are investing millions to upgrade scoring machines and install synthetic lanes that last up to 25 years, automated bumpers and more comfortable seating options, said Gary Winkel, co-owner of Woodland Lanes LLC in Livonia. In addition to improvements like those, for example, the former Colonial Lanes in Ann Arbor — now Revel & Roll — will reopen this month after being closed since May for a $5 million renovation that expanded entertainment and food options. The 40,000-square-foot Washtenaw County staple on South Industrial Highway had been focused largely on bowling for the last half-century. While declining to go into revenue specifics, Brian Conway, vice president and general manager of Revel & Roll, said the diversification didn’t happen based on financial need. “We based it on business trends in the bowling industry as a whole,” he said. “With the decline of the bowling alley over the last 10 to 15 years, it was becoming more difficult to attract new bowlers to our center. We wanted to stay ahead of

ees, and accounted for 248 home purchases in Cuyahoga County, according to the study. The refugees also created an estimated $2.7 million in tax revenue at the local and state levels. In 1980, thousands of Hmong, an ethnic group from rural regions of Laos and Thailand, were granted refugee status and immigrated to the U.S. following the Laotian Civil War, which was rife with ethnic cleansing and military attacks. St. Paul, Minn., is home to the largest Hmong population in the U.S. with more than 65,000 people of Hmong decent. As of 2013, Hmong businesses in greater Minneapolis-St. Paul had combined revenue of $100 million, according to Asian Americans, an encyclopedia published in 2013 on the economic history of the group. However, refugee settlement is not without pitfalls. According to the 2011 American Community Survey by the U.S. Census Bureau, 31 percent of Hmong living in Minnesota live in poverty — though that figure has dropped steadily since 1990, when it was 65 percent. Kelly said population gains are positive, even if a small number of

people are low-income. “Considering that 41 percent of Detroit residents live in poverty, 30 percent would be an improvement. Though the national average is 14.5 percent and the Hmong are roughly double that, it’s still better than Detroit,” Kelly said. “However, the focus should really be on the 70 percent who are not in poverty considering that they came to the U.S. with nothing. “Nevertheless, the some-peopleare-better-than-no-people argument is salient, especially when you consider all the theory about the impact that watchful people have over crime rates compared to vacant houses.”

Historical support Locally, Syrians were among the first Middle Eastern immigrants to the state in the late 1880s. By the early 1900s, they were flocking to Detroit seeking employment from Henry Ford and settling in Highland Park and later in Dearborn. Many of them were Chaldeans, who are Catholic Assyrians with roots in Iran, Iraq, Syria and Turkey. Later, in the 1980s, many called the Seven Mile stretch near Woodward Avenue home. It became Chaldean Town in 1999. Michigan is now home to an estimated 120,000 people of Syrian and Lebanese descent, according to census data. Most live well above the poverty line. Syrian immigrants in the U.S. have a median household income of more than $65,000, according to census data, compared to less than $52,000 for native-born Americans, more than $48,000 for Michigan’s median household income and nearly $59,000 median household income for Southeast Michigan families. Frederick Pearson, director of the Center for Peace and Conflict Studies at Wayne State University, said the

Recent bowling center closures Thunderbird Lanes

Address: 400 W. Maple Road, Troy Owner: Great Lakes Bowling Centers Lanes: 46 Opened: 1959 Closed: May Sunnybrook Golf & Bowling Inc.

Address: 7191 17 Mile Road, Sterling Heights Owner: Randy and Cheryl Shank Lanes: 58 Opened: 1962 Will close: Sept. 30 Cloverlanes Bowling

Address: 28900 Schoolcraft Road, Livonia Owner: Great Lakes Bowling Centers Lanes: 64

the curve and stay viable for the next 50 years.” Others like Woodland Lanes, on Plymouth Road in Livonia, are holding tight onto league bowling as their primary revenue source. With just 32 lanes, Woodland is still able to fill the center with

Opened: 1961 Closed: May Continental Lanes Bowling Center

Address: 31055 Gratiot Ave. , Roseville Owner: Stephan Pawl Lanes: 54 Opened: 1962 Closed: June 2013 Salt River Golf & Bowling

Address: 33633 23 Mile Road, New Baltimore Owner: Robert Orley Lanes: 32 Opened: 1975 Closed: September 2014 Source: Mark Martin, manager, Metro Detroit United States Bowling Congress

league bowlers night in and night out, Winkel said, adding that about 70 percent of its revenue comes from league bowlers, with the rest coming from open bowling, fundraisers, private parties and other sources. “We are still a strong league cen-

U.S., and Michigan, have longstanding traditions of settling refugees with success. “If you look to various populations, including the Chaldeans that settled in the same area, that were able to bootstrap their way into economic success,” Pearson said. “The people coming from Syria, in many cases, are skilled and they’ve been displaced. “People in this situation are generally dedicated to work; it’s an old tradition for our refugee population, going back to our own history with the Jews, Italians and Irish. This is quite a viable plan.” Gov. Rick Snyder is open to working with the federal government on the issue of Syrian refugees, but is in the early stages of any discussions, Dave Murray, Snyder’s deputy press secretary, said in an email. Currently, President Barack Obama’s administration has authorized the U.S. to accept 10,000 Syrian refugees, but legislators and refugee support groups are urging the U.S. to take in as many as 200,000. “If the United States aims to continue as a global humanitarian leader, then it is our obligation to significantly increase the number of refugees we resettle,” U.S. Rep. John Conyers, D-Detroit, and other party leaders said in a statement last week. But that would take a significant financial commitment from the federal government. Kelly worries that the political football over refugees could implode the entire plan. “We need to get moving on this; we need Mayor Duggan saying we can do this here, we need the support of our leaders,” Kelly said. “People are saying this is farfetched, but time is of the essence. We have an opportunity to repopulate Detroit by bringing in a new customer base, and I’d hate to see Detroit miss out.” 䡲 Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

ter,” he said. “League bowlers are very supportive and very loyal. For us, that’s what we are going to strive for, continuing with league play.” That appears to be a steady revenue stream, Martin said. The average league bowler spends about $500 per year on bowling, and with 50,000 metro Detroit members of the USBC, “very conservative” revenue estimates are at least $25 million just from them, he said. Martin said the metro Detroit USBC chapter is the largest in the country, representing 85 alleys with nearly 2,700 lanes, primarily in Wayne, Oakland and Macomb counties, making the region what the chapter calls the “Bowling Capital of the World.” Prokopec said that while the sport’s popularity has declined in recent years, things are looking up. “It’s pretty steady right now,” he said. “We are about to start a new (league) season. They are having a better start to the year than last year. They’ve had some increases in league play, maybe not major ones, but they are on the positive side.” 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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AGENT FROM PAGE 1

ating out of his new office at the Palace. The general idea is that Tellem will be Gores’ point man for finding new business, civic, philanthropic and leadership opportunities in Detroit, the metro area, and elsewhere in Michigan. Tellem will seek opportunities not only for Palace Sports, but also for Gores’ Beverly Hills, Calif.-based Platinum Equity firm. What the opportunities will be remains to be seen, but it’s clear that they will happen amid the cranes and earthmovers of Detroit’s reinvigorated downtown, and elsewhere. Tellem said he has begun the networking calls and meetings to lay the foundation of relationships that eventually will spur investment and cooperation. Tellem said he will immerse himself in relationship building “to identify ways we can be involved in business, in the community from a philanthropy standpoint, and leadership standpoint.” “Relationships are a huge part of my success,” he said, adding that his track record includes “building bridges” with leagues, owners, players and corporate sponsors. Tellem is charged with creating an integrated plan in the coming months, but “it’s really Tom’s vision,” he said. His reputation as a dealmaker is why he’s in the job. “I’ve been able to sit in a room and make a deal, not lose a deal,” he said. The meetings, Tellem said, will require continued follow-up in order for anything substantive to happen. Goals and strategies for reaching them are to-be-determined elements of the expansion plans. He termed it “ever evolving” and said the plan will be adapted as opportunities arise.

Doing deals Sports and entertainment will be the first sectors on which Tellem and the Palace/Platinum Equity staff will focus, but no specifics have been divulged. Deals will be done solo and in partnership — Tellem is long friendly with Detroit real estate mega-investor and Quicken Loans Chairman Dan Gilbert, for example. Or, companies from elsewhere could be brought in to do downtown, regional or statewide investments, he said. “There are plenty of opportunities; it’s picking the right ones,” Tellem said. It wouldn’t be surprising if Tellem

crafts something with Gilbert, whose real estate ownership portfolio includes more than 80 Detroit properties — including things like buildings and parking decks — totaling more than 13 million square feet. “I’ve always had a nice relationship with Dan Gilbert and his people,” Tellem said. Like Gores, Gilbert owns an NBA franchise, the Cleveland Cavaliers. “I am very excited that Arn Tellum has moved to the Detroit area to execute on Tom Gores’ vision,” Gilbert said in a statement. “I have known Arn for many years, and he is smart, highly effective and a highenergy doer. We are looking forward to engaging with Arn and Tom to help make anything happen in Detroit they feel will benefit their franchise and the city as well.” Tellem also praised the Ilitch family, which is building a $532 million hockey arena for their Detroit Red Wings, with a plan for surrounding it with 50 blocks of residential, commercial, retail and office space that would transform downtown Detroit. The Ilitches also own the Detroit Tigers and the Little Caesars pizza chain. One of Mike Ilitch’s key advisers is Tellem confident Steve Greenberg, the son of Tigers Hall of Famer Hank Greenberg and a significant sports dealmaker for New York City-based boutique investment bank Allen & Co. Tellem’s relationship with Greenberg dates to when the pair worked at Los Angeles-based Manatt, Phelps & Phillips LLP in the late 1970s. “I view him as a big brother. He’s the first person I call for advice and counsel,” Tellem said. Whether that relationship translates into meaningful deals won’t be known for a while. Tellem said he’s only briefly talked to Christopher Ilitch, the son who runsthe day-to-day business operations for the family. “I know them a little bit, and want to deepen that relationship,” Tellem said. The Ilitches continue to seek investors for the $200 million-plus in ancillary development around the hockey arena that’s scheduled to open in fall 2017. “It was pleasure to meet with Arn recently, welcome him to Detroit and begin to develop a relationship. Our organization is very open to exploring ways we may be able to work together,” Chris Ilitch, president and CEO of Ilitch Holdings Inc., said in a statement Friday.

Personal growth Tellem’s journey to the Palace

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: Arab American and Chaldean Council..................11 Barbara Ann Karmanos Cancer Institute ........112 Beaumont Health ..................................................112 28 Bowling Centers Association of Michigan ......2 3 Business Leaders for Michigan ............................3 Clark Hill ......................................................................11 4 Denton Enterprises ................................................4 Detroit Pistons ..........................................................11 26 Detroit Regional Chamber ..................................2 3 DTE Energy ................................................................3 Forthright Health Management ........................115 Henry Ford Health System ..................................112 20 Jones Day ................................................................2 26 Kresge Foundation ..............................................2 McLaren Health Care ........................................111, 14 3 Metro Detroit United States Bowling Congress ..3 4 Michigan Department of Transportation ..........4 3, 26 Michigan Economic Development Corp. ....3

4 Mich. Infrastructure & Transportation Assn. ....4 Oakwood Healthcare ............................................112 Plante Moran ....................................................112, 14 Prism Medical Group ............................................115 Pure HealthyBack ..................................................117 28 Revel & Roll ............................................................2 St. John Hospital and Medical Center ..............113 St. John Providence Health System ............112, 17 St. Joseph Mercy Health System ........................112 28 Southeastern Michigan Bowling Centers Assn.2 3 Splitting Fares ..........................................................3 3 Sunnybrook Golf & Bowling ..................................3 Taubman Centers ....................................................11 27 Techstars Mobility, Driven by Detroit ................2 Trinity Health Michigan ........................................112 University of Michigan ....................................112, 25 28 Wayne State University........................................2 28 Woodland Lanes ....................................................2

began in 2014 when the Los Angeles-based headhunting firm Korn/Ferry International , hired by Gores to find a top basketball executive, called him to get his thoughts on candidates. One of the candidates was Stan Van Gundy, the former Miami Heat and Orlando Magic coach. Tellem was then working as vice president at Los Angeles-based Wasserman Sports Group and endorsed Van Gundy, who was hired by Gores in May 2014 on a five-year, $35 million deal as Pistons head coach and president of basketball operations. Tellem continued to have talks with Gores’ staff about various topics, he said. Eventually, that led to a job offer earlier this year. “Over the years there were a number of opportunities, but none were right,” Tellem said, adding that Gores’ ideas and business acumen impressed him. Why leave a lucrative career as a sports agent, which was so notable that he partially fueled the inspiration for actor Robert Wuhl’s sports agent character on the HBO series “Arliss”? “I wanted to have a greater challenge,” Tellem said, adding that he’d accomplished all he could as an agent. He said the new job will allow him to learn more about himself and to experience personal growth. In addition to the expansion plans, he’s ownership’s representative on the ground, he said, and his role is to support Palace Sports CEO Dennis Mannion and Van Gundy. Tellem endorsed Van Gundy for coach because of his experience, style, personality and history — elements he believes gives the Pistons a stability they’ve lacked. “I think Stan is one of the most talented and gifted coaches,” he said.

Capital Partners II fund had held in the team since the $325 million deal was struck to buy the Pistons from Karen Davidson. “He’s committed to this longterm,” Tellem said. Ethan Davidson, son of the late team owner William Davidson, has retained a small stake in the Pistons.

Tellem, the man Tellem said golf is an obsession, and he’s in the process of picking out a club to join. When he’s not working — his iPhone 6 is never far from reach, and he’s thinking of creating a Twitter account — he spends his time doing youth basketball-related philanthropic work, traveling to locales such as Italy and Israel, playing chess and table games, and voracious reading. Next up on his nightstand, he said, is David Maraniss’ newly published Once a Great City: A Detroit Story, and he just wrapped up W.G. Sebald’s award-winning 2001 novel, Austerlitz. Tellem’s preferred reading: novels, nonfiction history, and books about Jewish culture and heritage. Additionally, Tellem said he enjoys writing and has been published in national outlets such as The New York Times and Huffington Post — the lingering legacy of a youthful desire to be a sportswriter that was rechanneled into law school, he said. “I love to write,” he said. He’s also a self-described foodie eager to experience metro Detroit’s thriving culinary scene.

Michigan roots

Tellem earned his bachelor’s degree from Haverford College near Philadelphia in 1976 and enrolled at the University of Michigan law school. When Tellem was a UM student in the late 1970s, he would come to DeOn the job troit for Tigers and Pistons games, he Tellem’s first week on the job has said. Despite being a Philadelphia nabeen getting to know the executives tive who has regularly returned there and staff at the Palace, he said. He’s to visit family, he was a big fan of Pissoon moving out of the hotel he’s tons center Bob Lanier, who played been living in in favor of a condo in for the team from 1970-80. Birmingham. Tellem also said he enjoyed His contract with Gores watching Mark “The Bird” includes a mechanism that Fidrych pitch for the Tigers. will give him a minority “It was electric then,” he ownership stake with the said of crowds at old Tiger Pistons in the future, Tellem Stadium when Fidrych was said. “It’s important for the on the mound. community to know I’m all He remains a UM footin on this,” he said. ball fan, and meeting coach No details about his Jim Harbaugh is on his toeventual ownership have Tom Gores: do list. (Tellem is well acbeen disclosed, but Tellem Contract offers quainted with Michigan certainly has the wealth: Tellem stake in coach John Beilein and Michigan State basketball Since 2008, he negotiated Pistons. coach Tom Izzo from his $3.5 billion in player deals, and agents get 3 percent to 5 percent agent days.) He planned to be at of client contracts (and often a share Saturday’s UM game against UNLV. Tellem got engaged to his wife, of their endorsement deals). Gores is also all in on the Pistons, former CBS Television Studios and MiTellem said. Because Gores is a private crosoft Corp. digital media President equity billionaire whose core business Nancy Tellem, when they lived in strategy is to buy companies and flip Ann Arbor. She was a waitress there them for a profit, there has been spec- for a time, he said. Hence, taking the job at the Palace ulation his intent was to eventually sell the team. Platinum Equity had was a sort of homecoming, he said. If bought part of the team when Gores he didn’t quit being an agent to return home to Philadelphia, metro purchased the club in 2011. Gores and his aides have long de- Detroit was the next stop. “This was as close as I could get,” nied that it’s his intent to flip the Pistons, and last week he bought out he said. 䡲 Bill Shea: (313) 446-1626 (for an undisclosed amount) the Twitter: @Bill_Shea19 minority stake his Platinum Equity

CRAIN’S DETROIT BUSINESS www.crainsdetroit.com Editor-in-Chief Keith E. Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Associate Publisher Marla Wise, (313) 446-6032 or mwise@crain.com Editor Jennette Smith, (313) 446-1622 or jhsmith@crain.com Executive Editor Cindy Goodaker, (313) 446-0460 or cgoodaker@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 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 Gilbert affiliate uses First National Bldg. to get $70M loan

5:34 PM

Dan Gilbert-affiliated entity is using the First National Building in downtown

Detroit as collateral on a $70 million commercial mortgagebacked securities loan. A deal has closed for 660 Woodward Associates LLC, tied to the Quicken Loans Inc. and Rock Ventures LLC founder and chairman, to get the loan from an undisclosed national lender, according to a news release from Southfield-based Bernard Financial Group Inc., which arranged the financing. The First National Building is at 660 Woodward Ave.

COMPANY NEWS 䡲 Under a tentative contract agreement reached between the United Auto Workers and Fiat Chrysler, U.S. car production would be moved to Mexico and pickup, SUV and crossover production would be concentrated in the U.S., Automotive News reported. 䡲 Campbell Ewald is expected to appeal after the federal government rejected the Detroit ad agency’s protest of the U.S. Navy’s decision to shift its $450 million marketing account for recruiting to another agency. 䡲 Detroit-based Shinola/Detroit LLC announced a Detroit Lions collection as part of the watchmaker’s first line of National Football League-licensed merchandise. Items include wristwatches, bicycles and a black leather wallet. 䡲 The Detroit Development Fund, J.P. Morgan Chase & Co. and W.K. Kellogg Foundation announced the Entrepreneurs of Color Fund, a $6.5 million lending program for Detroit businesses owned by minority entrepreneurs or businesses that primarily hire minorities. 䡲 UAW-represented employees at Blue Cross Blue Shield of Michigan voted down a master labor agreement with the Detroit-based company earlier this month, but both sides expected talks to continue. 䡲 Detroit Medical Center plans to settle the last piece of a nine-year class-action lawsuit over nurse wages in Southeast Michigan for $42 million, almost as much as the seven other hospitals involved in the lawsuit combined, after a federal judge approved a settlement with more than 20,000 registered nurses. 䡲 Lauren Rakolta, founder of The Rakolta Group and former vicechairwoman for the Oakland County Republican Party, acquired a majority interest in Detroit-based Devon Facility Management LLC and became its president. 䡲 Detroit-based DTE Energy Co.

ON THE WEB SEPT. 12-18

Detroit Digits A numbers-focused look at last week’s headlines:

The number of jobs Daimler North America Corp. is moving to Farmington Hills as part of relocating its North American headquarters from Montvale, N.J. Gov. Rick Snyder made the announcement at the Frankfurt Auto Show in Germany on Sept. 16.

$700,000

The starting bid for Bert’s Warehouse in Detroit’s Eastern Market in an auction Oct. 26-28. The building received a high bid of $1.985 million in a July auction, but that deal fell through.

The years Raymond Wojtowicz has spent as Wayne County treasurer. He submitted paperwork earlier this month to retire from the position he’s held since 1976. He previously served as mayor of Hamtramck.

opened Michigan’s largest solar power facility, a 1.1-megawatt project at the Domino’s Farms office complex in Ann Arbor Township. 䡲 Akron, Ohio-based FirstMerit Corp., in partnership with the Detroit Land Bank Authority, began a program in Detroit in which FirstMerit will grant up to $30,000 for down payments or renovations to qualified applicants buying or fixing up homes bought from the land bank. 䡲 Detroit-based Henry Ford Health System is moving to insource environmental services by severing relationships with Detroit-based Powerlink Facilities Management Services, Southfieldbased Vibrus Group LLC and Torrance, Calif.-based Agile 1 Workforce Solutions. 䡲 Wixom-based Detroit Public Television was one of 11 PBS stations chosen nationally by PBS and the Corporation for Public Broadcasting to share in grant funding to expand its early childhood education programs in disadvantaged areas. The amount to DPTV is expected to be about $100,000 to $125,000. 䡲 Detroit Venture Partners has named its newest portfolio company: Campless.com, a website that provides data to collectors of rare high-end sneakers. The amount of the investment was not disclosed. 䡲 Farmington Hills-based Level One Bank said it will open its first Detroit branch in January in the Julian C. Madison Building downtown. 䡲 Ann Arbor Spark is seeking early-stage companies for its 6,600 square feet of new incubator space in downtown Ann

Arbor — companies that are no longer startups but still need support before finding traditional office space.

OTHER NEWS 䡲 Speaking in Detroit, Vice President Joe Biden announced the creation of the Institute for Advanced Composites Manufacturing Innovation, to develop fiber-en-

forced polymer composites for the auto industry. It will share space in Corktown with the Institute for Lightweight Innovations for Tomorrow.

䡲 A 50-50 joint venture between Cleveland-based Industrial Commercial Properties LLC and Los Angeles-based Industrial Realty Group LLC purchased the 1.1 million-square-foot Northline Industrial Center in Romulus from Detroit-based Soave Enterprises for an undisclosed price. 䡲 Longtime Detroit radio personality Trudi Daniels is staying at WCSX 94.7 FM after signing a multiyear deal, station owner Greater Media Inc. said. Terms were not disclosed. 䡲 Steven Barry Ruza, owner of Commerce Township-based Home Legal Group PLLC, pleaded guilty to one count of conducting a criminal enterprise, a 20year felony, and faces sentencing next month. Ruza is accused of stealing hundreds of thousands of dollars from people facing mortgage foreclosures. 䡲 President M. Roy Wilson said Wayne State University plans to increase enrollment to more than 30,000 and its six-year graduation rate to at least 50 percent by 2021. Also last week, WSU’s student center reopened after a $26.5 million renovation. 䡲 The University of Michigan Health System has launched a hand transplant program that it says is the first in the state, AP reported. 䡲 Philanthropist and art dealer Gary Wasserman, president of Allied Metals Corp., will open the Wasserman Projects art space in Detroit’s Eastern Market on Sept. 25. 䡲 The Internal Revenue Service is auditing $200 million in bonds to determine whether to revoke federal subsidies given to cashstrapped Wayne County for its unfinished jail project, Bloomberg reported. 䡲 The Michigan Department of Treasury will process city of Detroit individual income taxes starting in January in order to improve efficiency, AP reported. Detroit filers will be able to, for the first time, submit returns electronically.

OBITUARIES 䡲

Jack Robinson, founder of

the former Michigan-based Perry Drug Stores chain and former president of Rite Aid of Michigan, died Sept. 15. He was 85. 䡲

RUMBLINGS High-tech security system targets gas station crime hootings and carjackings at Detroit gas stations may be reduced with help from a new high-tech system that includes exterior cameras and lights, and a quick link to a law enforcement center. “We want to use technology to fight this and make gas stations zones of safety,” said Detroit Mayor Mike Duggan at last week’s Techono my Detroit conference. “The response from gas station owners is very positive.” Duggan expressed concern at the conference over a recent escalation in gas station crime in the city, particularly at night. He said he meets periodically with gas station ownMike Duggan: ers, and safety is Concerned about one of the key gas station crime. topics they discuss. Details about the system haven’t been finalized. “The mayor and the gas station owners are on the same page as far as improving safety, and we are working toward an effective solution that works for our business owners, as well as the city of Detroit and the community,” the mayor’s office said via email. “The issue the mayor mentioned at Techonomy is very early in the process at this point, and we likely will have something more to say on this a bit later.” Carjackings have declined since 2008, when Detroit was logging more than three a day, for a total of 1,231. In 2014, that dropped to 525. But an uptick in serious gas station crime in the summer prompted Detroit Police Chief James Craig to recommend that residents be wary of buying gasoline at gas stations late at night. The Techonomy Detroit conference, in its fourth year, was held Sept. 15 at Wayne State University Law School, and it takes a high-level look at how technology is changing work and life in the U.S. and its cities.

Contest will fund Detroit transportation ideas Up to $250,000 in cash and services are being made available via an IdeaMarket contest to anyone who can gin up new ideas to improve Detroit’s transportation woes. The Detroit Transportation Challenge launched Sept. 15 and is aimed at linking investors to “entrepreneurs, engineers, designers and other creative thinkers to create an innovative solution that significantly improves transportation in Detroit, with focus on public trans-

portation.” The details and criteria are at ideamarket.com/detroittransportation-challenge. The nine-member evaluation panel that will pick the winning proposal includes Jill Ford, the city’s head of innovation and entrepreneurship; Jamie Shea, managing director of Mission Throttle; Ted Serbinski, managing director of Techstars Mobility; and Alisyn Malek, investment manager at GM Ventures. The deadline to submit is Dec. 15, and the winning team will be announced on Feb. 15. The winning idea/team will form a company and be funded by March 1. The winning team, which will be required to have an office in Detroit, will get either a capital investment or a loan. IdeaMarket gets a 5 percent stake in the company. IdeaMarket is the brainchild of California billionaire Bill Gross, who launched the site last year as a way to match ideas with investors. He also is on the evaluation panel.

Autonomous driving among topics at MichAuto Summit MichAuto, an automotive-centric initiative inside the Detroit Regional Chamber, will host its third annual MichAuto Summit on Sept. 30 at Cobo Center in Detroit. This year’s event — “The Connected Culture: Shaping Michigan’s Automotive and Mobility Future” — will focus on advanced automotive technologies related to Internet connectivity, cybersecurity, safety and autonomous driving. Gov. Rick Snyder will deliver the keynote address. Among other speakers will be Jason Koch, president and cofounder of California-based telematics software firm Telogis; Andrea Mai, director of smart connected vehicles for Cisco Systems Inc.; Chris Thomas, partner

Chris Thomas: Fontinalis partner to speak at event.

at Detroitbased venture capital firm

Fontinalis Partners LLC; Rick Haas, president and COO of Mahindra North American Technical Center; and Andre Weimerskirch, associate research scientist at the University of Michigan Transportation Research Institute. Sponsors include Pure Michigan, KPMG LLP, Phoenix Contact, Business Leaders for Michigan, ITC Holdings Corp. and others.

Tickets are $150 for chamber members and $225 for nonmembers. For event details, visit detroitchamber.com. 䡲

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