Crain's Detroit Business, Nov. 16, 2015 issue by Crain's Detroit Business

20151116-NEWS--0001-NAT-CCI-CD_--

11/13/2015

5:47 PM

Page 1

CRAIN’S Readers first for 30 Years

DETROIT BUSINESS

New ways of getting paid have outpatient centers on a building kick, PAGE 11

NOVEMBER 16-22, 2015

Allegiance, Henry Ford say merger right fit

GENERATION NEXT? In a downtown with fewer and fewer empty buildings, which stand out as candidates for another wave of development? See our 64-page Detroit 2.0 report bundled with this issue.

Sources: Kaiser Permanente talks likely catalyst for pact By Jay Greene jgreene@crain.com

Jackson-based Allegiance Health may have found the right partner with Henry Ford Health System after proposed deals went south with University of Michigan Health System

last year and more recently with Toledo-based ProMedica. Last week, Allegiance signed a letter of intent to become Henry Ford’s sixth — and most distant — hospital. Allegiance’s hospital, west of Ann Arbor in Jackson, is 76 miles from Henry Ford’s flagship hospital in downtown Detroit. The westward expansion also might make Henry Ford Health more attractive to a potential partnership suitor like Oakland, Calif.based Kaiser Permanente. Bob Riney, Henry Ford’s COO, said the five-hospital system has been “looking for partners that share the same history and commitment to community.” Georgia Fojtasek, CEO of Allegiance, said Allegiance shares “a great deal of alignment of mission and vision on community health.” Under the proposal, Henry Ford Health would replace Allegiance Health’s corporate parent as the sole member of Allegiance, which includes a 480-bed hospital, a 100physician medical group and 40 outpatient medical and diagnostic centers. Two Henry Ford trustees will join Allegiance’s 16-member board. No cash will be exchanged, but Henry Ford has agreed to an unSEE MERGER, PAGE 29

PLUS: DETROIT HOMECOMING RECAP | MORE AT CRAINSDETROIT.COM/DETROIT2.0 ANDREW POTTER

Zoned out? Marijuana dispensaries fear future legal restrictions By Marti Benedetti mbenedetti@crain.com

Joe Brennan faces a lot of the same worries as all businesspeople — sourcing inventory, regulatory headaches, competitors popping up like weeds. But those weeds give Brennan a whole new set of worries. His business? Mindright, a medical marijuana dispensary in Detroit. Brennan said he has tried to do everything legitimately. But he is in

NEWSPAPER

crainsdetroit.com Vol. 31 No 46

$2 a copy. $59 a year.

Licensed to light up. The number of Michigan’s active, registered medical marijuana patients is up more than 18,000 from three years ago, Page 26

an industry that is known for angering neighbors, accused of promoting drug abuse and inviting heavy scrutiny as dispensaries proliferate in the city. Before opening earlier this year, he obtained a city license for a retailmedical sales business, bought inMARTI BENEDETTI surance, hired a security guard and made sure his marijuana products Some Detroit dispensaries have professional-looking storefronts and many have were tested for purity. “We want to slang-derived names such as The Reef, the House of Dank or the Grass Station. be completely professional,” he said. Now the U.S. Marines veteran fears marijuana dispensaries. (See box, zoned out,” he said. “My employees his dispensary, across from the Page 27.) left their jobs to work for me. PeoGrosse Pointe border, might be One of the restrictions is that a ple like me who are (running their shuttered because of a proposed dispensary cannot be within 1,000 business) right should get a fair Detroit zoning ordinance that feet of a liquor store; Mindright is shake.” would impose specific regulations next door to one. SEE MARIJUANA, PAGE 26 on the city’s more than 150 medical “We’re finding we might get

20151116-NEWS--0002-NAT-CCI-CD_--

11/13/2015

4:04 PM

Page 1

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

MICHIGAN

BRIEFS Mylan fails in hostile bid for W. Mich. drugmaker Perrigo Mylan NV failed to attract a majority of shareholders of West Michiganheadquartered Perrigo Co. by Friday’s deadline for its $26 billion unsolicited offer to acquire the over-the-counter drugmaker, Bloomberg reported. About 40 percent of Perrigo holders tendered their shares, Mylan said; 50 percent were needed to move ahead. Mylan, which can’t make another bid for a year, offered $75 in cash and 2.3 Mylan shares for each Perrigo share, a bid rejected as inadequate by Perrigo, based in Dublin, Ireland, but with North American headquarters in Allegan. Perrigo makes prescription and over-the-counter drugs that Mylan wanted to add because EpiPen, its allergy medication, faces generic competition as early as next year.

Flint a college town? Yes, says New York Times story One might not think of Flint as a place to chase the American dream, but a recent New York Times story might help change that perception. According to the report, a record

700-plus international students are studying at the University of Michi gan-Flint , a commuter school of 8,500 undergraduate and graduate students, and nearly 200 more are at nearby private Kettering University. Why did these students choose an economically depressed city that many would rather leave? The story — written by Gordon Young, a Flint native and author of the Flint-centric book Teardown: Memoir of a Vanishing City — cites low tuition at UM-Flint (especially compared with its hipper Ann Arbor parent, the University of Michigan), low housing costs, aggressive recruiting by the Flint universities and the desires of foreign students to obtain a coveted degree from a U.S. college — no matter its location.

MICH-CELLANEOUS 䡲 Want to buy a home? You could scarcely do better than Grand Rapids, which in a survey from the website Porch.com of more than 10,000 U.S. home owners was ranked No. 2 nationally (behind Denver) as the best place to own a home. The city ranked No. 1 in the

U.S. in resident satisfaction and was very high in commute (No. 2), real estate confidence (third) and educational opportunity (sixth), but only 49th in walkability. 䡲 The Grand Rapids-based law firm Warner Norcross & Judd announced it will move into a new office and residential towers planned for a downtown parking lot, MLive.com reported. The towers are slated to open in 2019. 䡲 Construction of Dow Chemical Co.’s new six-story corporate center in Midland is underway, and company officials expect it to be fully operational by mid-2017, MLive.com reported. Costs were not disclosed. 䡲 A new $10 million STEM education center in Midland is intended to motivate teachers and encourage students to pursue careers in science, technology, engineering and math, MLive.com reported. The Michigan State University STEM Center for the Great Lakes Bay Region

will be at the former Michigan Molecular Institute. 䡲 Mark and Krysta McGee made a name for themselves at the Lansing Mall as winners of an episode of the Food Network ’s “Food Court Wars” that aired in May 2014. But at the end of this year, the couple will close their Mark’s Gourmet Dogs and move their business 20 miles away to a storefront in Eaton Rapids, for a reinvented gourmet coffee, tea and sandwich shop to be called Mark’s Place , the Lansing State Journal reported. Mark McGee said the couple

have been losing money, and a more permanent location was a goal. 䡲 NBC personality Al Roker made a brief stop in Coldwater last week during an attempt to set a world record for reporting the weather from all 50 states in one week. The “Rokerthon 2” event was a fundraiser for Feeding America and food banks across the country, including the Detroit-based Gleaners Food Bank of Southeastern Michigan. 䡲 Cleanup work is continuing at Sleeping Bear Dunes National Lake shore following damaging August

storms. Crews started clearing debris from the Alligator Hill Trail with hopes of reopening part of it for ski season, a park administrator told the Traverse City Record-Eagle. 䡲 Gov. Rick Snyder last week signed bills regulating mixed martial arts bouts between amateur fighters, The Associated Press reported. One of the laws makes it a felony for a fight promoter to allow a boxing or MMA professional to participate in a fight with an amateur fighter. 䡲 The state rolled out an interactive virtual tour of Michigan’s Capitol building, meaning it now takes just a computer and an Internet connection to visit the historic building at mistatecapitol.com.

INSIDE THIS ISSUE BANKRUPTCIES . . . . . . . . . . . . . . . . . . 6 CALENDAR . . . . . . . . . . . . . . . . . . . . . . . 18 CAPITOL BRIEFINGS . . . . . . . . . . . . . . 6 CLASSIFIED ADS . . . . . . . . . . . . . . . . 25 DEALS & DETAILS . . . . . . . . . . . . . . . 22 MARY KRAMER . . . . . . . . . . . . . . . . . . . 8 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 8 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 24 RUMBLINGS . . . . . . . . . . . . . . . . . . . . 30 WEEK ON THE WEB . . . . . . . . . . . . . . 30

COMPANY INDEX: SEE PAGE 29 Novi-based LunaTech 3D did the work using Google Inc.’s Street View. 䡲 Child care workers no longer must smile, and drivers need not park cars forward in state parking lots, thanks to the Michigan Office of Regulatory Reinvention , which has axed those among thousands of regulations deemed unnecessary or obsolete, The Associated Press reported. The office recently reported hitting a milestone — the net reduction of 2,127 state rules and regulations over four years. Never fear: 17,100 rules remain on state books. 䡲

CORRECTION 䡲 A story on Page 3 of the Nov. 9 issue should have listed U.S. Mattress rather than U.S. Mattress World as the company expanding in Southeast Michigan with brick-and-mortar locations.

MARGINS BEING SQUEEZED BY DECREASING REVENUES AND INCREASING COSTS?

The Status Quo Will No Longer Work

Learn How to Build a Plan B New Release: Medical Practice White Paper s )DENTIFY AND MANAGE AREAS OF IMPROVEMENT s "UILD A SUSTAINABLE GROWTH PLATFORM s 4RANSITION TO ALTERNATIVE BUSINESS MODELS

s $ETERMINE PROlTABLE EXIT STRATEGIES s /PTIMIZE COLLABORATION WITH HEALTH SYSTEMS

Business Advisory Services

%MPOWER 9OUR -EDICAL 0RACTICE IN A 4IME OF #HANGE Choose How to Receive Your Complimentary Copy Visit us at www.cigcapitaladvisors.com/empower-your-medical-practice or contact Yusuf Hai at 248-827-1010 or yhai@cigcapitaladvisors.com www.cigcapitaladvisors.com Securities offered through CIG Securities, Inc., Member FINRA/SIPC. Investment Advisory Services Available Through CIG Asset Management, Inc., a SEC Registered Investment Advisor. Insurance Services Provided by CIG Risk Management, Inc. All Are Wholly Owned Subsidiaries of CIG Capital Advisors, Inc.

20151116-NEWS--0003-NAT-CCI-CD_--

11/13/2015

5:49 PM

Page 1

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

Pure transparency: Comcast clicks ROI of state’s ads

expansion End of merger talks opens up channels

By Zack Burgess Special to Crain’s Detroit Business

A year ago, employees throughout Michigan offices of Comcast Corp. were facing a lot of uncertainty. While the Philadelphiabased cable giant can stake claim to about half of the cable subscribers in Michigan, and threequarters of the subscribers in metro Detroit, a pending merger deal with Time Warner Cable had queued up the region for a major market landscape change. Michigan and few other states were to be a carve-out in the Time Warner deal, and a spinoff entity formed with Charter Communica tions was to become the new MARC COHEN provider to Comcast customers Clockwise from top: Miguel Gonzalez, AtefElzein, Renee Stinson and Aaron here. Kibitlewski field customer calls from Comcast Corp.’s call center in Plymouth.. That’s until Comcast (Nasdaq: CMCSA) called off the marriage. Federal regulators spoke out forward without a merger was rel“Out of the 75-plus director against the larger mother-ship atively pain-free. The company, and above positions across the deal, the $45 billion media merger which keeps the headquarters for Heartland region, only a handful with New York City-based Time its heartland region in Plymouth, moved on, and most of those who Warner, citing concerns about could move ahead previous plans, did found other positions within competition and pricing. The and it had put together incentive Comcast,” said Tim Collins, senplans were terminated in late April. packages that encouraged emSEE COMCAST, PAGE 29 At the Michigan level, forging ployees at every level to stay.

New VP for Travel Michigan pushes open books By Lindsay VanHulle Crain’s Detroit Business/Bridge Magazine

Next spring, when Detroit takes the leading role in a national TV commercial as part of the state’s Pure Michigan tourism campaign, don’t expect it to look like other Pure Michigan spots. Ixnay on the sweeping rural vistas or the picturesque Michigan landscapes. The Detroit ad, instead, will be more visually edgy, its marketers say, with close-up cuts and a faster pace meant to mimic an urban vibe. The city’s status as cool — and no longer so challenged — is the message to be conveyed in the campaign. With bankruptcy issues behind it, and lots of economic development news in the making, the ad campaign is meant to sell potential visitors on the city’s opportunity.

And a strategy of talking about the campaign now is all part of pushing a more compelling business case, and showing an example of return on investment, for the Michigan Economic Development Corp. “We’re showing our cards to our competition,” said Dave Lorenz, the new vice president of Travel Michi gan , the arm of the MEDC that manages the tourism campaign. But, he said, the department needs to share more information about a $33 million program that relies mostly on state dollars — especially since it needs to prove it can yield a return on taxpayers’ investment. That belief is not his alone. MEDC CEO Steve Arwood told Crain’s this spring that the agency SEE ADS, PAGE 28

Survey: Education should be top priority By Chad Halcom chalcom@crain.com

With Michigan’s economy on solid footing and a roads deal done in Lansing, local business community members now find education a top political priority. A survey of Crain’s subscribers conducted by EPIC-MRA Corp. for Crain’s Detroit Business and Honig man Miller Schwartz and Cohn LLP

found Southeast Michigan business owners and executives put a high priority on small class sizes and evaluations that improve teacher performances, and some priority on increasing state per-pupil school aid funding to K-12 school districts. They generally supported Gov. Rick Snyder’s recent proposal to restructure the oversight of Detroit PubSEE SURVEY, PAGE 25

MUST READS OF THE WEEK NIMBY and M-14

Produce — and jobs

Thirty years ago, Washtenaw County officials wanted to stave off development in their county along M-14. They mostly got their wish, Page 4

Red Truck Fresh Produce brings more green to Gratiot Central Market, and provides job training for veterans, Page 30

20151116-NEWS--0004-NAT-CCI-CD_--

11/13/2015

4:05 PM

Page 1

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

LOOKING BACK: On Nov. 18, 1985, Crain’s reported on development along the new M-14 freeway corridor between Wayne County’s western suburbs and Ann Arbor. Washtenaw County officials at the time sought to limit use of the county’s stretch of the highway, and they got their wish, but attitudes have changed. More at crainsdetroit.com/30

COSTAR GROUP INC.

This 127,000-square-foot building at 46201 Five Mile Road in the Metro West Technology Park in Plymouth Township along the M-14 corridor was built in 1999.

Intellectual Property | Litigation | Technology

30 years later, Washtenaw more open to development along M-14 By Kirk Pinho kpinho@crain.com

Transactional experience on par with the major Silicon Valley law firms. – BRAD KANCIGOR, ASSOCIATE GC Synopsys, Inc

YOUNG BASILE. Strategic advisors to the world’s most innovative companies. ANN ARBOR

TROY

SILICON VALLEY

www.youngbasile.com

CHICAGO

Some Washtenaw County officials’ words from 30 years ago have come true. At that time, Crain’s reported on pending or underway developments along what was then the new M-14 freeway corridor, the 22-mile stretch connecting Wayne County’s western suburbs of Livonia, Plymouth and Canton Township to Ann Arbor. While steady development began on the Wayne County portion a few years after the freeway’s completion, officials from Washtenaw County said they wanted to retain the highway’s countryside feel and have it not be the meeting point between Detroit and Ann Arbor development. They mostly got their wish, although current local officials are more receptive to development along the freeway. In the three decades that have passed, 33 buildings comprising nearly 3.5 million square feet of industrial, warehouse, distribution, and research and development facilities have sprouted along the east-west freeway. All but three, totaling 267,000 square feet, are in the 6.4-mile Wayne County stretch, according to data from the Southfield office of Newmark Grubb Knight Frank. Those three, all in Ann Arbor, are the 150,000-square-foot Flint Ink Building , the 60,000-square-foot Jackson Plaza Business Park and the 67,000-square-foot Traverwood Business Park. Space along the corridor remains desirable, with just a 3.2 percent vacancy rate, leaving only 112,000 square feet available so far in the fourth quarter, according to Newmark Grubb. The average asking rent is $6.03 per square foot, not including utility costs.

Where the sprawl stalled

275

LISA SAWYER

“As a kid, I remember people saying this whole area … was going to be developed,” said Dan Labes, senior managing director for Newmark Grubb. “But all you see (between Livonia/Plymouth and Ann Arbor) are vacant lands and signs. You see a megachurch and golf courses, but it appears that the industrial, R&D stopped just west of Beck Road.” Ken Schwartz, Superior Township supervisor, said he is open to development along the portion of the freeway that stretches through his community, as is the township board. However, a variety of infrastructure problems — including a lack of public water and sewer lines and just two Washtenaw County interchanges outside of Ann Arbor off of which to develop — make such projects difficult for developers. “I would personally be open if a large firm wanted to come in and

set up a world headquarters or a research lab, anything that would be progressive with jobs and tech space. But there are issues,” Schwartz said. Darren Frankel, principal of Troybased Stuart Frankel Development Co. , which developed the 77,000square-foot Plymouth Commerce Center in 2003, said the M-14 corridor is attractive for developers and companies because of its proximity to Detroit Metropolitan Airport and other transportation options like rail lines. He also said its connection to Ann Arbor, home of the University of Michigan and its talent stream, is desirable for high-tech and R&D companies looking for space, and that the communities through which it passes, and those surrounding it, are desirable for workers. 䡲 Kirk Pinho: (313) 446-0460 Twitter: @kirkpinhoCDB

“I would ... be open if a large firm wanted to come in and set up a world headquarters or a research lab, anything that would be progressive with jobs and tech space. But there are issues.” Ken Schwartz,SuperiorTownship supervisor

DBpageAD_DBpageAD.qxd 11/2/2015 11:49 AM Page 1

Lowest Rates. Highest Ranking. Before you renew … see what HAP can do for you. HAP is the right health insurance choice for your business. We offer some of Michigan’s lowest-cost small business plans – backed by outstanding value and the “Highest Member Satisfaction among Commercial Health Plans in Michigan, eight years in a row.”

Make the switch for 2016! Ask your agent for a quote, or call (888) 401-1616.

chooseHAP.org/group

Lowest rates based on Bronze plan in Macomb, Monroe, Oakland and Wayne counties. Health Alliance Plan of Michigan received the highest numerical score among commercial health plans in Michigan in the proprietary J.D. Power 2008-2015 U.S. Member Health Plan StudiesSM. Study based on 31,543 total member responses, measuring four plans in Michigan (excludes Medicare and Medicaid). Proprietary study results are based on experiences and perceptions of members surveyed November-December 2014. Your experiences may vary. Visit jdpower.com.

20151116-NEWS--0006-NAT-CCI-CD_--

11/13/2015

4:08 PM

Page 1

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

Schuette among targets of ads backing Clean Power Plan LANSING — Billionaire and former New York City Mayor Michael Bloomberg is taking on energy — and Michigan Attorney General Bill Schuette — in a series of political ads targeting opponents of new federal carbon rules. A representative for Schuette said Bloomberg’s $10 million ad buy, funded through his Independence USA PAC , amounts to little more than campaign rhetoric and won’t stop Schuette from pursuing a lawsuit to block the new U.S. Environ mental Protection Agency Clean Power Plan. Besides Schuette, Bloomberg’s ads

LINDSAY VANHULLE Capitol Briefings lvanhulle@crain.com Twitter: @LindsayVanHulle will focus on state attorneys general in Florida, Missouri and Wisconsin. “Our question was: ‘Why now? Why Bill?’ ” Schuette spokesman

John Sellek told Crain’s. “Could it be because he recently won a major case (about) overreach against the EPA?” Sellek said. “Or is it simply a campaign season-type attempt to intimidate state officials who oppose increased federal regulation and want to instead keep energy prices lower and protect jobs here in Michigan?” Sellek was referring to a 5-4 decision by the U.S. Supreme Court this past summer, siding with states challenging EPA rules to reduce mercury and air pollutants from coal-based power plants. Schuette is one of 24 attorneys

general suing to stop implementation of the Clean Power Plan, which targets carbon emission reductions. His position runs counter to that of Gov. Rick Snyder’s administration, which is beginning to work on a state carbon com- Schuette pliance plan. Schuette and the other attorneys general targeted in Bloomberg’s ad campaign “are trying to stop the president from doing something that I think is terribly im-

Michael Bloomberg’s $10 million ad buy won’t stop Bill Schuette’s intended suit to block the EPA’s plan. portant,” Bloomberg told The New York Times. “I want the public to know what they’re doing.”

Waiting ’til after break The Legislature has recessed for firearm deer hunting season and the Thanksgiving holiday. Lawmakers will be back in session Dec. 1. A road funding deal is now law, but legislators still have several key issues to tackle when they come back from break, including revisions to state energy policy and restructuring Detroit Public Schools to help it manage more than $500 million in debt. Snyder has proposed splitting off DPS into two districts — an “OldCoNewCo” model — that would phase out the existing Detroit Public Schools once its debt is repaid, while creating the Detroit Community School District to handle all other education operations. Snyder had hoped the bills would be ready to be introduced last week before the Legislature recessed, but that likely won’t happen now until after it reconvenes in December, Snyder spokesman Dave Murray said. Snyder and Sen. Goeff Hansen, R-Hart, chairman of the Senate’s appropriations K-12, school aid and education subcommittee and a likely bill sponsor, are considering other lawmakers’ and DPS stakeholders’ positions on the proposal before formally introducing the bills, Murray said. “We also realize that there are many people and groups who have the same goal, and might have different recommendations on how to get there,” Murray said. “We want to consider those thoughtful recommendations as we continue to move forward.” 䡲 Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

BANKRUPTCIES The following businesses filed for protection in U.S. Bankruptcy Court in Detroit Nov. 6-12. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. S.A.M. Controls LLC, 24832 Romano St., Warren, voluntary Chapter 11. Assets and liabilities not available. Gossett Corporation Inc., 31550 Gossett Drive, Rockwood, voluntary Chapter 11. Assets and liabilities not available. Charleen’s Day Care Inc., 7400 Rawsonville Road, Belleville, voluntary Chapter 7. Assets: $4,090; liabilities: $267,469.85. Natalie Broda

20151116-NEWS--0007-NAT-CCI-CD_--

11/13/2015

4:09 PM

Page 1

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

Michigan’s economy up, but behind top 10 states By Marti Benedetti Special to Crain’s Detroit Business

There’s good news and bad news when it comes to the state rankings in the Business Leaders for Michigan’s benchmarking report, released last week at the Michigan CEO Summit in Detroit. The good news: Michigan’s economic growth has outpaced nearly all other U.S. states since 2009. The report shows the state has succeeded in stabilizing its economy, lowering business Doug Rothwell: costs and beBusiness Leaders coming more for Michigan. competitive. The bad news is Michigan has a ways to go to get into the top 10 states listed in the report. Top 10 states are, in order of overall standing, North Dakota, New York, Texas, Massachusetts, Wyoming, Washington, Alaska, Nebraska, Pennsylvania and Iowa. They were selected based on their average ranking on key job, economic, personal income and population indicators from 2004 to 2014. Some of Michigan’s shortfalls in the report include: 䡲 Per capita personal income in the state continues to grow faster than most states, but the absolute level is still $11,000 below the top 10 average. 䡲 Michigan’s employment, per capita income and per capita gross domestic product have all grown faster than top 10 states, but Michigan is below average with rankings of 46th in annual unemployment, 36th in per capita income and 34th in per capita GDP. 䡲 While Michigan’s population has grown for the third consecutive year and ranks 10th in the nation, top 10 states, on average, grew seven times faster. 䡲 Only 22 percent of Michigan high school students are careerand college-ready. 䡲 Michigan’s educational attainment levels rank 31st in the country. Top 10 states spend more than double what Michigan does on economic development. About 500 senior leaders from business, policy, education and advocacy met at the Westin Book Cadillac, Detroit for updates and discussion on the state’s economic growth. Said Doug Rothwell, president and CEO of Business Leaders for Michigan: “We need to do much more to excite the interest of site selectors and talented younger workers.” 䡲

Employment Litigation Experience

In Your Corner.

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.

First Tier Ranking in Labor Law – Management Health Care Law

■

Detroit

■

Novi

■

Grand Rapids

■

Kalamazoo ■ Grand Haven

■

Lansing

Contact Barbara Buchanan at bebuchanan@varnumlaw.com

20151116-NEWS--0008-NAT-CCI-CD_--

11/13/2015

5:49 PM

Page 1

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

CRAIN’S

DAC celebrates anniversary by looking ahead

DETROIT BUSINESS

OPINION Focus on education to boost economy usiness Leaders for Michigan last week released its latest benchmarking report. The good news? Michigan’s economic growth is greater than almost every other state. But the state is stillranked 46th in annual unemployment, 36th in per capita income and 34th in per capita GDP. Low educational attainment is a factor. Less than a quarter of state high school students are career or college ready, and the state’s educational attainment level is 31st in the country. Small wonder, then, that the metro Detroit businesspeople who responded to a Crain’s survey place importance on small class sizes, teacher evaluation, merit pay and increased per-pupil funding. They also support Gov. Rick Snyder’s plan to rid the Detroit Public Schools of its debt, which depends on state contributions. (See story, Page 3.) Despite attempts to diversify its economy, Michigan is enjoying an economic boom in large part because of the robust health of the automotive industry. A downturn at some point, based on history, is inevitable. An educated citizenry is our best weapon against economic cycles. It’s the highest and best public policy focus for the remainder of Snyder’s term.

Perrigo dodges takeover — for now The “pharmageddon” feared by West Michigan is apparently over. Mylan NV’s attempted hostile takeover over Allegan-based Perrigo Co. fell short last week, with only 40 percent of outstanding shares being tendered. Perrigo had argued that Mylan did not understand its overthe-counter generic drug niche and undervalued the stock. Analysts also saw a mismatch between how much Mylan should reasonably pay for Perrigo and how much Perrigo shareholders should hold out for. So Perrigo prevailed, but not without cost. Last month, it announced plans to cut 800 jobs — about 6 percent of its global workforce — and buy back $2 billion in shares to boost shareholder returns. About 4,000 of the company’s 13,000plus global employees work in Michigan, with about 600 of those in headquarters. Because Perrigo is a public company, a sale could still be in its future. But for now, West Michigan continues to benefit from a company still rooted where it was founded in 1887.

TALK ON THE WEB Re: Detroit comeback story to be featured in Pure Michigan Maybe it’s just a tad early for the razzmatazz and ballyhoo. Good things are happening, but it’s all still in pieces. The trolley isn’t even completed yet. Abandoned buildings still dot downtown. Midtown is a work in progress. The worst thing you can do is oversell. James38

I think it is the perfect time to roll this out. The downtown and Midtown neighborhoods are steadily improving, there is foot traffic downtown on weekend nights. Jeff Reid

People do not want to live in the city, raise kids there. This is not a success story. A success story includes vibrant neighborhoods. Trixiesmom

On Dec. 18, the Detroit Athletic Club will cap its yearlong celebration of the 100th anniversary of its downtown “clubhouse.” It promises to be a night for “selfies” since members and guests are encouraged to don the style of formal attire prevalent 100 years ago. (Disclosure: I have been a member since 1992.) Make no mistake: As it looks back, the DAC is always looking forward. Millions of dollars have been invested in historic restoration and adaptation since 1997, with this year’s improvements bringing the club, literally, to new heights. A “seventh floor” was built out on the original roof, replacing aging courts and storage. The views are spectacular from private meeting rooms and an informal restaurant, with a spacious outdoor promenade that wraps the building. On the ground level, a glass-encased entry leads into the building. Members can pick up coffee, smoothies and sandwiches from a new coffee shop. And athletes who play racquet sports have a new gallery so more members can watch their competitions. Designed by Albert Kahn, the

MARY KRAMER: Publisher DAC has been restored and adapted over the years. SmithGroup has been the architect on projects since 1997, and Sachse Construction has completed the last three major projects. All these investments — and a stellar location — have paid off. Today, the DAC has waiting lists for membership: 62 people for “resident” membership and 150 for “intermediate” membership for members 33 and younger. Executive Manager J.G. Ted Gillary said some weekends the club hosts multiple weddings. Other business lines are up, from business events to a la carte dining. “We did 454 a la carte covers this week on a Tuesday night, between the roof and the Grill Room,” Gillary said.

The DAC’s success means its founders have the last laugh after all. My own version of DAC history starts with the “blue-blood” Detroit Club members who rebuffed the “new-money” car guys from becoming part of their exclusive club on Cass Avenue. Undeterred, the car guys bought land, hired an architect and breathed new life into an athletic club that had started in 1887 near what’s now Wayne State University. Over the decades, though, it was the blue-blood club that waned and the DAC has flourished — especially after Comerica Park, Ford Field and the Detroit Opera House opened their doors. Today, the membership is greatly diverse — by industry, gender, race, ethnicity and age. It’s considered by many to be the best private club in the country. It has my vote. Happy birthday, DAC. 䡲 Mary Kramer is publisher of Crain’s Detroit Business. Catch her take on business news at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760 and in her blog at www.crainsdetroit.com.

Internship shows mentoring goes full circle Early in our careers, we all need a helping hand, and a great coach. For me, that came in the form of editors at The Macomb Daily, the Times Herald (Port Huron) and The Muskegon Chronicle. Those folks, along with college instructors and colleagues at the student newspaper at Michigan State University, The State News, helped me find my reporting style and writing voice. By the time I landed at Crain’s Detroit Business in 1998, I had the basics, and the great editors here continued to help me to grow — and my career continued to advance. But it was those early editor/coaches who served as mentors, ripping my writing to shreds and teaching me the basics of how to construct a news story or conduct an interview. The best coaches have just the right The Nov. 4 edition of Dialogue: The Student touch. You the Voice of Detroit’s High know type. They are Schools firm but compassionate. They are demanding — but encouraging. These days, things are coming full circle. Michael Lewis II joined the Crain’s staff last month as an editorial intern. At Wayne State University, he is managing editor of the student newspaper, The South End. And he’s

Jennette Smith: Editor been encouraged by mentors, ever since high school, to pursue a journalism career. It started when Lewis was a student at DeMichael Lewis II troit Renaissance High School, and a member of the MSU Detroit High School Journalism Program when it had an affiliation with the Detroit Free Press. He had the chance to work as an apprentice at the Free Press in 2013, received lots of encouragement from MSU’s Joy Visconti, director of the program, and then joined WSU’s Journalism Institute for Media Diversity. This program is laser-focused on helping top talents excel, helping these students land scholarships and jobs. When Lewis applied for his internship at Crain, I didn’t know about the MSU connection. What I did know is that this was a tenacious, confident student who really wanted to join the team. In September, our newsroom learned the wonderful news that our

employer, Crain Communications, would step up as the new partner on the MSU high school program. Students at the high school level are paired with professional journalists at Crain, MSU faculty members, and MSU students to produce a newspaper and website about the big news at the schools. The first edition of the high school newspaper is beautiful; it has the paper stock and design quality of a professional Crain product, but more importantly, it is a showcase for the writing and photography of the Detroit high school students. Crain’s sister publication Automotive News is leading the charge (thanks to Publisher Jason Stein and Krishnan Anantharaman, news editor), and some Crain’s Detroit Business staff members are part of the mentoring team, including senior reporters Dustin Walsh and Sherri Welch. Autoweek and Plastics News are helping too. Lewis’ assessment of the first edition of the bundled high school newspaper, Dialogue: The Student Voice of Detroit’s High Schools: The new format is visually appealing and inviting to readers. “It was a step in the right direction,” he said. He’s looking forward to helping Visconti coach the latest batch of high schoolers and may even be part of a student team that covers portions of the 2016 North American International Auto Show. “I go back to Renaissance occasionally and give the talk about ‘how to survive college,’ ” he said. The circle of coaches continues. 䡲

20151116-NEWS--0009-NAT-CCI-CD_--

11/13/2015

11:44 AM

Page 1

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

New efforts help people with disabilities find employment By Sherri Welch swelch@crain.com

New efforts locally are creating jobs for people with developmental disabilities, a segment of the population with perhaps the highest rate of unemployment. Troy-based E m a g i n e E n t e r t a i n ment Inc. has hired clients of Angels’ Place to help package the toys it gives away to the children who come to see the children’s movies at its six Emagine Theatres. Cass Community Social Services

has taken over the operation of a Grosse Ile-based organic tea company, in its latest move to create jobs for those who face barriers to employment. And an Oakland University -based effort that includes the Judson Cen ter is creating small businesses such as a laundry service and microgreens farm to employ people with developmental disabilities. Though the efforts are creating only a handful of jobs at a time, they are badly needed, because people with disabilities were disproportionately impacted by the downsizing tied to the recession, said Leah Rosenbaum, president and CEO of Southfield-based JVS, which has been working to place them into jobs for more than 40 years. Eighty-one percent of people in Michigan with intellectual and developmental disabilities were unemployed, compared with 9 percent of people without any disabilities, as of last fall when the Employment First in Michigan report was released. Unlike their colleagues without disabilities, people with them are not always as flexible about switching between tasks and back again, something employers with smaller workforces sought during the recession, Rosenbaum said. “But the people we place are so reliable,” she said. “They love their job, show up. They’re an absolute addition to any staff.”

opmental disabilities, he said. “It’s a win-win for them to be able to do this work with us and ultimately to bring smiles to the faces of children coming to see our family pictures.” As Crain’s reported in September, Oakland University and Judson Center also teamed up last year with Smiles for Children and the Autism Alliance of Michigan to form Extraordinary Ventures Michigan , a venture to employ individuals on the autism spectrum. They’ve launched a small laundry service business line that employs seven, operating from OU’s

business accelerator OU Inc.; an organic greens farm on OU’s campus; and an office services business.

Cass Community Cass Community Social Services has been creating businesses to employ those with developmental disabilities and other barriers since 2007. They include a document shredding operation and the production of rubber floor mats from discarded tires. This fall, Cass got the chance to add even more jobs when it took over the operation of Chartreuse Ltd. Inc. , a small organic tea company. It’s operating now as

Cass Communi-Tea.

Former owner Linda Shannon, a Ford Motor Co . engineering retiree, and partner Carole Bell donated the business to Cass. Cass had the business acumen, the job-creating part of its mission, warehouse space and available garden plot to grow herbs, if it so chooses, said Shannon, 77. Most years, the company, in business since 2004, grosses $50,000$65,000, she said, from the sale of 12 varieties of organic teas through its website and at Greenfield Village and Whole Foods Market stores in seven states including Michigan, she said.

Cass began operating the company in October with its own staff. It plans in December to move three of its developmentally disabled clients into jobs mixing, packaging and shipping the teas, and two more early next year, said the Rev. Faith Fowler, executive director. She doesn’t yet know if Cass Communi-Tea will be a revenue generator for Cass. But that’s not the primary consideration. “You have to make sure everybody in the city has opportunities for jobs,” she said. 䡲 Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

When you invest in people, you get a return every time you walk in the door.

Emagine-Angels’ Place When the economic downturn happened, many of the 150 people Angels’ Place provides with group home and in-home residential services and recreational programs lost their jobs in areas like stocking and bagging at local stores, said Executive Director Cheryl Loveday. The nonprofit had been brainstorming ways to find jobs for clients when a consultant working for Emagine, Cindy Ciura of CC Consulting LLC, connected it with Emagine. Under the agreement forged in July, Emagine contracts Angels’ Place for the work, and it employs about five of its clients to split about 150200 hours of work each month affixing stickers to the toys the theater gives out. Angels’ Place clients were ideally suited to perform that service for Emagine, said Emagine co-founder and Chairman Paul Glantz. “We’re very happy with their work.” The theater chain is considering whether there are other opportunities to hire more people with devel-

Blue Cross Blue Shield of Michigan and Blue Care Network offer complete insurance solutions to protect the overall health and well-being of your employees. GROUP HEALTH PLANS

SPECIALTY BENEFITS

BCBSM.COM/EMPLOYERS

Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association.

DBpageAD_DBpageAD.qxd 11/11/2015 9:30 AM Page 1

Paid Advertisement

Smart Strategies for Overseas Growth Entering new markets in a complex era

W Matthew Elliott Michigan State President Bank of America Merrill Lynch

Joe Vito Market Executive Bank of America Merrill Lynch

hile international opportunities abound, capturing growth in today’s new era of globalization is becoming increasingly difficult. At the same time, for U.S. companies to succeed, it’s becoming inevitable they need some foreign market involvement, whether it’s selling product or establishing operations overseas. According to a recent Bank of America Merrill Lynch (BofAML) survey, 54 percent of CFOs plan to do business internationally and are increasingly playing a key role in their companies’ global reach. But factors like political uncertainty, foreign exchange risk, and constantly changing regulations have made the endeavor much more complex.

Here, BofAML executives reveal best practices for navigating these issues in an uncertain world and offer new market strategies for growth.

internationally and help CFOs stay aware of changing rules and regulations in new markets. Make sure to consult with banks and advisors already working in the countries you are targeting. This “global buddy system” can steer you toward the safest and most prudent ways of getting access to supplies and vendors, which can mean lower costs of goods sold and better pricing. One of the easiest ways for a company to enter a foreign market is to arrange for a trading partner, supplier relationship, or a distributor relationship. CFOs also can consider participating in a joint venture, merger and acquisition strategies, or growing organically into a new market. Use the vast array of industry trade shows in the U.S. to connect with potential global partners. For one company that operates triathlons overseas, it was essential for them to work with vendors and suppliers in those countries and to set up the financial infrastructure, such as international accounts, to accommodate transactions. Doing this allowed the company to enter those markets more quickly to facilitate its races and ultimately reach more customers.

PROCEED AT THE RIGHT PACE When setting up operations in new regions, go slow — even in high-growth areas such as Asia Pacific. A pilot program can “test the waters” before embarking on larger operations. Also, perform due diligence on a country-bycountry basis to understand the wide variety of regulatory environments, language and culture. Countries like Argentina, Brazil, China and India may be more of a challenge to enter, but they’ve got a lot to offer. Instead of shying away, just be aware of the risks, have a strong support team and strategy in place, and ensure appropriate funding for setting up operations. Having a law firm in the specific country to represent the company is a good initial step. As the consumer world market grows, our team wants to make sure you have access to the best opportunities. We’re here to show you how to proceed prudently and cautiously. For more on how your Detroit local business can move into international markets or expand your footprint, contact matthew.b.elliott@baml.com or joseph.vito@baml.com. To understand the complexities of foreign market entry, visit bofaml.com/worldmarketsmap.

NEW TOOLS FOR GROWING BEYOND Taking your business international can be an important strategy to expand your client base and sustain growth during tough economic times domestically. Data from the U.S. Chamber of Commerce shows that 80 percent of global purchasing power, 92 percent of the world’s economic growth, and 95 percent of the world’s consumers live outside of the United States. In Miami and other port cities, investments are being made in airports, seaports, rail and roadways as companies seek to move goods and services efficiently in and out of the U.S. to compete against global operators. In this area in particular, U.S. companies are putting new trade strategies in motion due to the planned expansion of the Panama Canal, a development that will affect nearly every sector of the American economy and allow U.S. businesses to shorten their supply chains and connect more quickly with buyers and suppliers in international markets. The Market Entry guide, a tool from BofAML, identifies 33 countries that are important to business leaders looking to expand globally. It also notes their complexity of entry, based on factors that include political and economic stability, governmental default, currency regulations, and potential for growth. Latin America, for example, benefits from attractive demographics, a large middle class, and a growing economy, which appeal to industries such as manufacturing. But the countries can be extremely diverse, and CFOs must maintain a consistent, yet flexible, framework for managing their treasury accounts in the region. When possible, CFOs should encourage electronic payments, since checks and cash can be inefficient and more susceptible to fraud when working in diverse regions. BofAML helps companies monitor and manage cash and information flows abroad with its CashPro® Online treasury management system.

Helping you see global markets as more familiar than foreign. That’s the power of a local neighbor, connecting you with over 200 countries, multiple time zones and 140 currencies worldwide. bofaml.com/yourcorner

MAKING CONTACTS ON THE GROUND Having strategic discussions about what the company will experience abroad and connecting with operators on the ground can reduce the complexity of doing business For marketing disclaimer, visit bankofamerica.com/disclaimer. ©2015 Bank of America Corporation

10-15-0031.I

20151116-NEWS--0011-NAT-CCI-CD_--

11/13/2015

12:02 PM

Page 1

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

SPECIAL SPECIAL REPORT: REPORT: JAY GREENE jgreene@crain.com Twitter: @jaybgreene

DCCC board adds clients as members T

HEALTH CARE

wo of the more interesting trustees on the board of De-

troit Central City Community Mental Health Inc. are also patients.

Dennis Leppek, 66, is an Army veteran who fought in Vietnam in 1969 and 1970 and was affected by the herbicide Agent Orange, post-traumatic stress disorder, and drug and alcohol misuse. He has been involved with suicide prevention at the Dingell VA hospital since an incident in 2012. “I ended up in the psychiatric unit at the VA for 13 days. ... I had attempted suicide three times in one week,” said Leppek, a DCCC consumer board member on the development committee since 2013. “I changed my lifestyle and decided I would help everybody I could,” he said. Leppek also volunteers about 30 hours a week with Vet-2-Vet and is secretary-treasurer of the Veterans Administration Mental Health Veterans Consumer Advocacy Council.

Daniel Spyker, 63, has dealt with depression his whole life. He began seeing a therapist at DCCC in 2008, but two years later faced a crisis. “I was confronted by my family because I wasn’t taking my prescribed meds,” he said. With Spyker back in therapy and improving, his therapist at DCCC suggested in 2012 that Spyker apply for the board because of his community interests and past experience on other boards. “I thought I would be a junior member of the board, but this board treats me like I was a bank vice president,” said Spyker, who is on the real estate committee. “I have learned an awful lot. Sometimes I walk out of board meetings bleary-eyed because they expect much of you.” Spyker also serves on the Detroit Wayne Mental Health Authority’s constituents voice council, Transportation Riders United and is a member of Central United Methodist Church. Under federal rules, the 15-member board was required in 2013 to be 50 percent clients as a condition of being converted into Detroit’s sixth federally qualified health center. Board chair Jerry Frohlich said the board looks for candidates who are natural leaders, comfortable expressing the needs of others as well as their own and wanting to strengthen DCCC and not just their own agenda. “They (Leppek and Spyker) have very interesting lives and have done so much for the community and their causes,” Frohlich said. 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

CEO Rob Casalou said St. Joseph Mercy Health System plans to add 15 outpatient centers in Southeast Michigan in the next 12 months.

LON HORWEDEL

Centers of attention More patients, high tech, new payment models drive outpatient facilities growth By Jay Greene jgreene@crain.com

assive increases in insured patients in Michigan in the past 18 months because of the Affordable Care Act, new types of risk-based reimbursement models that reward lower-cost care and ongoing technological advances are driving a new round of outpatient center expansion. Take the Detroit Medical Center, where CEO Joe Mullany said the seven-hospital system will add a large multispecialty ambulatory center in northwest Detroit and three urgent care centers over the next two years to its growing lineup of outpatient centers in Southeast Michigan. DMC, which already has 148 outpatient centers and physician offices, has opened two urgent care centers this year and in February will open its 63,000-square-foot DMC Children’s Hospital of Michigan Specialty Center, a $45 million “mini-hospital,” in Troy. “DMC was heavily inpatient-centric,” Mullany said. “We are dramatically expanding physician office space and clinics for rehabilitation, sports medicine and pediatrics.” But outpatient centers also are morphing into

short-stay facilities, also called mini-hospitals, where patients can stay 23 hours or longer if needed. Care can be offered less expensively in these settings than in traditional hospitals. At Ann Arbor-based St. Joseph Mercy Health System , CEO Rob Casalou plans to create several high-tech mini-hospital outpatient centers in Brighton, Canton Township and Howell. Casalou said five-hospital St. Joseph plans to add 15 outpatient centers in Southeast Michigan over the next 12 months to add to its lineup of 30 ambulatory facilities. For example, the new $28 million expansion to create an outpatient overnight short-stay center at St. Joseph Mercy Brighton will allow the system to offer lower cost and more convenient services to patients, he said. Casalou said the traditional strategy for hospitals was that building outpatient centers fed inpatient business. Now, he said, building outpatient centers and acquiring doctor offices is about lowering costs. “Some are still using the hospital-centric strategy because they want to maximize fee-for-service payment, but we want to shift services to the SEE OUTPATIENT, PAGE 12

What is an outpatient center? Outpatient centers, sometimes called ambulatory care centers, are health care facilities where medical procedures or tests are performed in a few hours without an overnight stay. Facilities that provide services requiring overnight stays are sometimes called mini-hospitals. They can include:

䡲 Primary care and specialist physician offices 䡲 Diagnostic services such as X-rays, MRIs and CT scans 䡲 Laboratory tests 䡲 Advanced procedures like

surgeries, chemotherapy and infusion

䡲 Physical therapy 䡲 Drug and alcohol

rehabilitation

PROFILES OF GROWTH: Retail clinics, Page 14 | Outpatient centers, Page 15 | Urgent care, Page 16

20151116-NEWS--0012-NAT-CCI-CD_--

11/13/2015

10:44 AM

Page 1

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

SPECIAL REPORT: HEALTH CARE

DESIGN AND

ART

PHOTOS COURTESY DMC

The Detroit Medical Center’s DMC Children’s Hospital ofMichigan Specialty Center, shown above in an artist’s rendering and under construction at left, is a $45 million “mini-hospital” set to open in February in Troy.

A well-thought out design, capturing your vision and imagination, is truly a work of art.

OUTPATIENT FROM PAGE 11

Fishbeck, Thompson, Carr & Huber, Inc. architects | engineers | scientists | constructors 800.456.3824 | ftch.com

outpatient side and build healthy communities,” Casalou said.

Driving growth Over the past 20 years, outpatient center growth has been primarily stimulated by private insurance re-

Business driven, data informed. A Southeast Michigan network that helps ePplo\ers ȴnG the talent the\ neeG Ior success www.win-semich.org

imbursement and government value. health incentivized by payments Since a larger percentage of that have followed outpatient tech- health care costs is paid by individnology advances. uals, patients are shopping around Those include the ability of pa- for lower-priced but high-quality tients to receive lower-cost outpa- providers for diagnostic, treatment tient services — including cataract and surgery options. surgery, colonoscopies and diagAs a result, outpatient care as a nostic imaging — that were once re- percent of revenue has increased as served for inpatient acute-care hos- much as 60 percent of total hospital pitals. revenue, up from 15 percent in the As a result, hospitals, physicians 1990s. and for-profit outpatient diagnosFor example, St. Joseph Mercy tic, treatment and surgery providers has seen its outpatient services inare competing for crease to 57 pera growing number cent of total revof patients in amenue, up from bulatory care set51 percent in “Inpatient tings, said Maria 2010. Abrahamsen, a utilization should Outpatient health care lawyer decrease if we are volume at FlintMcLaren at Dykema Gossett delivering on our based PLLC in BloomHealth Care Corp . field Hills. goals to increase has increased to More recently, 57 percent from outpatient Obamacare has 43 percent, and service.” set off a new it is projected to Rob Casalou,CEO, round of outpagrow to 60 perSt.Joseph Mercy Health System tient center excent by 2020. pansion and “We expect to physician practice see a decrease consolidation to provide more on the inpatient side, and that is a health care access points for pa- good thing — inpatient utilization tients. should decrease if we are delivering Since 2010, more than 800,000 on our goals to increase outpatient people in Michigan have gained ac- services,” Casalou said. cess to primary care and hospital “We have a stable population services, reducing the uninsured here in Southeast Michigan,” he rate in the state to 7.8 percent from said. “We do expect to grow by offer11 percent in 2013. ing a better product in terms of acLast year, Michigan’s Healthy cess, cost and quality, but not Michigan program added 600,000 through population growth.” people to Medicaid, and the federal Another more recent trend is health insurance exchange based government and private payer added another 228,000 Michigani- movement to offer prepaid conans. tracts to providers for specific proThe movement to outpatient cedures like hip and knee replacecare also is being propelled by em- ment, stroke, congestive heart ployers offering workers high-de- failure, fractures of femur and heart ductible health plans, intended to attack. lower their costs and create incenAs providers increasingly accept SEE NEXT PAGE tives for shopping for health care

20151116-NEWS--0013-NAT-CCI-CD_--

11/13/2015

10:43 AM

Page 1

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

SPECIAL REPORT: HEALTH CARE FROM PREVIOUS PAGE

more financial risk, the need to expand patient access points through neighborhood outpatient centers grows. (Population health management spurs payment incentives, Page 15.)

‘Out of space’ McLaren also is planning major outpatient center expansion. “There is not just one factor driving ambulatory growth,” said McLaren COO Greg Lane. “We are running out of space in some areas. The Weisberg Cancer Treatment Center in (Farmington Hills) is full. We are out of space. We are going to build another ambulatory cancer center in Oakland County,” Lane said. The Weisberg center is the main suburban outpatient center operated by the Barbara Ann Karmanos Cancer Institute , which McLaren acquired in 2013. Lane said McLaren hasn’t signed a purchase deal for land yet, but the system also will expand other spe-

cialty care in Oxford and Lake Orion. McLaren also plans to expand outpatient and Karmanos cancer centers in Macomb and up the I94 corridor to Port Huron, where it last year acquired a 186-bed hospital. “We are in the process of expanding the Ted B. Wahby Cancer Center at McLaren Macomb with the Karmanos brand name on it,” Lane said. Lane said the 11-hospital nonprofit system also plans to build a short-stay mini-hospital in place of its former plans to build a full-service, $300 million hospital in Independence Township. Design plans could be ready in the spring with opening sometime in 2017. Like St. Joseph’s, McLaren’s minihospital will offer 23-hour stays for surgery or other more complex treatments. The facility is expected to feature 30 to 50 beds, a 24-hour emergency department, and additional specialty services to complement a fourroom ambulatory surgery center and outpatient cancer center al-

BEAUMONT HEALTH

Beaumont Health plans to build more than a dozen more major outpatient and urgent care centers. Earlier in November it opened this 2,200-square-foot urgent care center in West Bloomfield Township.

ready on its 80-acre McLaren Health Care Village at Clarkston.

Growth elsewhere Southeast Michigan’s other four systems also plan growth in the outpatient area. For example, Warren-based St. John Providence Health System plans to add four urgent centers and increase the number of employed physicians to expand access points

for patients. Beaumont Health, a newly merged eight-hospital system based in Southfield, plans to recruit more physicians and build more than 12 more major outpatient and urgent centers — the first one in West Bloomfield — over the next three years to add to its current inventory of 160. Earlier this month, Beaumont opened a 2,200-square-foot Beau -

mont Urgent Care Center in West Bloomfield Township, located at the Beaumont Medical Center , 6900 Orchard Lake Road. Staffed by ER doctors, family medicine physicians and nurse practitioners, the Beaumont urgent center will be open Monday-Friday from noon until midnight, and weekends and holidays from 9 a.m. to 9 p.m. Detroit-based Henry Ford Health System plans to add several smaller convenient care clinics to its mix of five urgent care and 30 major ambulatory care centers. The Ann Arbor-based University of Michigan Health System is continuing to expand its 40 outpatient centers and 140 clinics in Washtenaw and Oakland counties as it projects 6 percent annual outpatient growth. For example, UM plans to open a larger West Ann Arbor Health Center in 2017 and increase exam rooms to 90 from 12 with diagnostic services. 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

SOMETIMES EVEN HEALTHCARE HEROES NEED A CHAMPION Healthcare professionals and executives rely on our attorneys to obtain the right results in the boardroom and courtroom, so they can stay focused on their patients and business.

Call Paul Mattes Vice President-Principal Certiﬁed Risk Architect

Q Licensure Actions Q Transactions Q Medical Liability Q CON Integration Q Managed Care Contracting & Disputes Q Medicare & Medicaid Q Compliance

iÀV > Ê ÃÕÀ> ViÊÊUÊÊ « ÞiiÊ i iwÌÃÊÊUÊÊ*iÀÃ > Ê ÃÕÀ> Vi

It’s time to rethink your insurance strategy 888.525.7575 | 586.323.5700 | sterlingagency.com

D. Jennifer Andreou

Mark S. Kopson

Medical Liability Practice Group Leader 586.466.7607 | jandreou@plunkettcooney.com M i ch i g a n

•

Ohio

•

Healthcare Industry Group Leader 248.901.4061 | mkopson@plunkettcooney.com Indiana

•

w w w. p l u n k e t t c o o n ey. c o m

20151116-NEWS--0014-NAT-CCI-CD_--

11/13/2015

11:38 AM

Page 1

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

SPECIAL REPORT: HEALTH CARE

Convenience, revenue fuel growth in retail clinics By Jay Greene jgreene@crain.com

Competition for urgent care and convenience care business has accelerated the past five years between physicians and hospitals and as retail pharmacies and discount stores enter the growing market. “Chain drugstores are becoming locations for immunizations and are a new source of competition for primary care physicians,” said Maria Abrahamsen, a health care lawyer Dykema Gossett PLLC in Bloomfield Hills. On the hospital side, Henry Ford Health System and Beaumont Health are two early adopters of the retail clinic strategy intended to both give patients additional options and also counter retail pharmacy and department store entries into the growing outpatient care industry. Over the past several years, retail stores like CVS, Walgreen, RiteAid, Target, Wal-Mart and Meijer have been offering walk-in medical clinics, staffed by nurses who treat minor injuries and provide vaccinations. Already a major outpatient player with 30 multispecialty ambulatory centers, Henry Ford has partnered with CVS to provide five medical directors for 12 CVS Minute

Clinics in metro Detroit.

Henry Ford also recently opened a 2,000-square-foot QuickCare clinic in downtown Detroit off Woodward Avenue. The system plans at least two additional locations staffed by nurse practitioners. Beaumont has opened a retail health clinic at the Meijer store in Royal Oak at 5150 Coolidge Highway. It also has a family medicine office in the Renaissance Center , tower 500. The Beaumont FastCare clinic, which is a joint venture with Wisconsin-based Bellin Health, is staffed by nurse practitioners and charges $77 per visit. It offers such services as vaccinations, sports physical exams and treatment for minor problems such as pink eye, rashes and fevers. Detroit Medical Center and Livonia-based Trinity Health, which is the parent company of five-hospital St. Joseph Mercy Health System in Ann Arbor, have begun expanding into the retail clinic business. For example, Trinity has signed a national agreement with Walgreen to staff retail clinics in Michigan and other states. Details are being worked out, and markets haven’t yet been identified, said Rob Casalou,

“Retailers realize that these clinics are a business opportunity, and some members of the community will prefer them.” Rob Casalou,St.Joseph Mercy Health System

CEO of St. Joseph Mercy. “We believe the best care for any person starts with a primary care physician,” Casalou said. “However, retailers realize that these clinics are a business opportunity, and some members of the community will prefer them for convenience and low cost for issues like a sore throat.” Casalou said retailers like Walgreen want customers to feel comfortable using their products and services. “A health system partnership will ensure access to primary care physicians or specialists if needed,” he said. Besides its 30 outpatient facilities and 240 physician offices, St. Joseph has acquired six-clinic Probility Physical Therapy. St. Joseph plans to integrate those into its seven physical therapy clinics.

“With 78 percent of outpatient therapies performed outside the hospital setting, this partnership will enable us to extend services to the retail setting where 60 percent of all market therapy services take place,” Casalou said. St. Joseph Mercy operates six major multispecialty centers, 11 outpatient centers, seven urgent care centers, a freestanding emergency room, six cancer centers for infusion and radiation oncology, and 240 employed physician offices. DMC, which is owned by forprofit Tenet Healthcare Corp. , is working with MedPost Urgent Care, a Tenet subsidiary, to add two urgent care centers in Livonia and Bloomfield, said CEO Joe Mullany said. A third center is expected to open next March in Grosse Pointe Woods, and two other centers are in plan-

ning stages. The urgent centers range from 3,000 to 5,000 square feet and are staffed with a physician or nurse with a medical assistant and radiology technician with an office staffer. Services include urgent care, occupational health, lab and X-rays for adults and children. Mullany said DMC’s strategy is to build more large ambulatory care facilities, urgent care centers and add employed primary care offices. Of DMC’s 148 outpatient centers, 12 are diagnostic, ambulatory surgery and urgent care clinics, 54 are employed physician offices and 82 are general outpatient facilities with multiple types of health services. Mary Zuckerman, St. John’s senior vice president of operations and integration, said patients are seeking their care in multiple settings and through new technologies such as Internet or telephone electronic visits. “We are evaluating many of these options (retail clinics) while continuing to focus on building our primary care physician base with easily accessible and patient-friendly offices,” Zuckerman said. 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

20151116-NEWS--0015-NAT-CCI-CD_--

11/13/2015

10:42 AM

Page 1

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

SPECIAL REPORT: HEALTH CARE

Payment incentives help move more care to outpatient By Jay Greene jgreene@crain.com

Besides new technology and an increase in insured patients driving outpatient center growth, the rapid hospital and physician adoption of population health management is beginning to offer payment incentives to move even more care to outpatient settings. Population health is generally defined as accepting financial responsibility for the health outcomes of groups of patients at prepaid fees. Managing populations is being driven by several new reimbursement incentives that include valuebased payments that reward quality over volume, bundled services paid at flat rates and lower-priced observation care, which is designed to be take less than 24 hours but can last longer based on patient needs. As providers begin to accept these prepaid fees, which places them at financial risk if they overuse services, health systems are increasing their complement of outpatient centers to provide patient access, said Greg Lane, COO of Flint-based McLaren Health Care Corp. “A lot of these payment mechanisms are not here yet, but they are coming, like bundled payments for orthopedic care in Flint,” Lane said.

“We do know that we are going to get paid less. Because care is less costly in outpatient settings, these payment types will drive” ambulatory care growth. Under these new at-risk reimbursement schemes, hospitals and physicians are focusing on preventive care and avoiding expensive hospital stays and unnecessary tests and procedures to lower costs. Joe Mullany, CEO of seven-hospital Detroit Medical Center , said systems like DMC that also operate an accountable care organization are using outpatient centers as places to create access for patients. Outpatient centers located close to patients can effectively lower costs by reducing readmissions and unnecessary emergency department visits, Mullany said. Lowering costs also can generate additional profits from prepaid contracts. For example, DMC owns Michigan Pioneer ACO, one of the most financially successful ACOs in the nation. Over the past several years, Michigan ACO has generated more than $16 million in profits, saved Medicare $39 million and improved quality for its 20,000 Medicare patients. Like DMC, eight-hospital, Southfield-based Beaumont Health is expanding the number of outpatient

centers and urgent care clinics — not to simply increase referrals to its hospitals, but more as an overall plan to manage population health under managed care contracts, said John Fox, Beaumont’s CEO. “Outpatient care is changing and growing rapidly,” Fox said. “It is a mental trap as technology is a disruptive care model.” For example, hip and knee joint replacement used to be reserved for inpatient hospital surgery suites. Now, hip replacement is starting to be offered in some outpatient settings, with recovery times in hoteltype settings, Fox said. “We need to look at our patient population and improve quality, safety, along with improving efficiencies,” said Fox, adding that a new generation of services is moving to outpatient settings. Fox said Beaumont has 168 outpatient clinics that will be increased over the next several years to more than 180. They include three surgery centers, 10 rehabilitation and three dialysis centers and 134 physician, imaging lab, fitness and urgent care sites. “Our strategy is to be broad and deep, not the old hub-and-spoke approach anymore,” Fox said. “We have 1 million people living in our

service area with about one-third with us. We need to look horizontally across that population and improve the quality and safety, along with Maria improving effiAbrahamsen: ciencies.” Health care lawyer David Wood, at Dykema Gossett M.D., Beaumont’s chief medical officer and president of Beaumont Physician Partners , said hospitals understand insurers are moving away from paying for sick care to paying to keep patients healthy. “We are in the process of change right now with payment models proposed by CMS and commercial payers,” Wood said. “Part of it is to develop a broader and more robust outpatient network to be able to provide care and a healthy environment to our population.” Wood said Beaumont will increase outpatient centers over time as payments move away from volume-based fee-for-service to set fees for procedures based on quality. “We are just starting now. It will be a five- to 10-year period of time,” he

said. “Mature markets like California still have fee-for-service. They have been in this process longer.” To manage patient populations under managed care, a range of locations and various types of outpatient centers are necessary, said Maria Abrahamsen, a health care lawyer at Dykema Gossett PLLC in Bloomfield Hills. “Systems can also extend their reach in markets where they don’t have inpatient beds to treat patients in place and to use as a feeder to hospitals,” she said. For example, regional systems are building freestanding full-service emergency departments, she said. Such ERs include Henry Ford’s in Dearborn and Wyandotte, Oakwood Healthcare’s in Canton Township and St. Joseph Mercy’s in Brighton. Abrahamsen said population health is a major driver of hospitals acquiring physician practices for outpatient network development, expansion of retail clinics and the formation of large multispecialty “super-groups.” “This is about addressing patient needs (for access) and the availability of office services, using home health” and other post-acute care services to focus on wellness and prevention, Abrahamsen said. 䡲

20151116-NEWS--0016,0017-NAT-CCI-CD_--

11/13/2015

10:41 AM

Page 1

C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // N O V E M B E R 1 6 , 2 0 1 5

SPECIAL REPORT: HEALTH CARE

Urgent care, health centers grow as lower-cost options By Jay Greene jgreene@crain.com

Outpatient center growth also can be seen in physician-owned urgent care centers and federally qualified health centers. Medicaid expansion and federal subsidies for individuals to purchase private health insurance in Michigan has added several hundred thousand people to the mix of patients seeking physician, specialist, outpatient and inpatient hospital care. As a result, since 2012, Michiganâ&#x20AC;&#x2122;s uninsured rate has dropped to 8 percent from 13 percent. Over the past five years, the Affordable Care Act has provided $11 billion to federally qualified health centers to expand care to more than 20 million additional patients. Michiganâ&#x20AC;&#x2122;s 40 health centers and more than 250 clinic locations have received $385 million and have treated more than 21 percent more patients and hired more than 900 employees during that period, said the Michigan Primary Care Association. Last year, health centers also saved $16 million for the state Med-

icaid program because of their lower per-patient treatment costs, the association told Crainâ&#x20AC;&#x2122;s. â&#x20AC;&#x153;We have created more space for uninsured folks with a 26 percent increase in Medicaid (revenue for enrollees treated at health centers) under Healthy Michigan,â&#x20AC;? said Kim Sibilsky, the associationâ&#x20AC;&#x2122;s president. Sibilsky said Medicaid enrollees increased at health centers to 319,905 in 2014 from 261,526 in 2013. Moreover, providing uninsured patients with medical homes and regular access to doctors and nurses helps everyone, Sibilsky said. â&#x20AC;&#x153;We are seeing patients getting increased access to specialists and diagnostic tests like colonoscopies and mammograms,â&#x20AC;? she said. â&#x20AC;&#x153;We are anticipating much lower experience in those avoidable conditions by virtue of people getting tests they were before unable to do.â&#x20AC;? Looking ahead, Sibilsky said continued federal health center funding has been assured by Congress through fiscal 2017. But funding for new sites or capital expansion would have to be appropriated by Congress, she said.

â&#x20AC;&#x153;We are seeing patients getting increased access to specialists and diagnostic tests like colonoscopies and mammograms.â&#x20AC;? Kim Sibilsky,Michigan Primary Care Association

Clinic competition There has been an explosion in the past several years of private urgent care centers to match the growth of insured patients. In Southeast Michigan, experts estimate there are an estimated 125 urgent care centers, a 25 percent increase from 2012. More than 300 are in Michigan overall, said the Urgent Care Association of America. Physician-owned urgent care centers include 10-center Michigan Urgent Care Centers ; DocNow Urgent Care, which operates centers in Waterford Township and Rochester Hills; and Premier Medicine with centers in Livonia, Canton Township, Dearborn and Detroit. Another major player in urgent care in the region is Addison, Texasbased Concentra, which operates 16

centers in Southeast Michigan and 300 nationally in 40 states. Nationally, urgent care clinics have been increasing the past few years to about 8,000, said the American Hospital Association . About 54 percent are physician owned, 25 percent are hospital owned and 18 percent are corporate owned, said the Urgent Care Association. In 1990, internist Mohammed Arsiwala, M.D., founded Livoniabased Michigan Urgent Care with a business plan designed to support primary care physicians instead of directly competing with them. â&#x20AC;&#x153;We are focused on sending patient information to the patientâ&#x20AC;&#x2122;s primary care physician,â&#x20AC;? Arsiwala said. â&#x20AC;&#x153;We want to make sure primary doctors get that information because it helps coordination of

care and it should be part of the medical home.â&#x20AC;? Arsiwala said he has signed business services agreements with several primary care groups to offer their patients access to urgent care after hours and on weekends. â&#x20AC;&#x153;This helps keep patients out of ERs for unnecessary visits, and it counts towardâ&#x20AC;? keeping medical groups certified with Blue Cross Blue Shield of Michigan for patient-centered medical homes, Arsiwala said. Arsiwalaâ&#x20AC;&#x2122;s centers, which are staffed by board-certified physicians and physician assistants, are in Grosse Pointe, Livonia, Canton Township, Novi and Dundee, plus five in Detroit. Another four are expected to open next year, including centers in Bloomfield Hills and Wyandotte, Arsiwala said. While patient volume has increased 13 percent to a projected 111,000 this year from 97,965 in 2013, revenue has flattened the past two years at an 8 percent growth rate.

*,9,1* .,'6 63$&( 72

BE HEALTHY KIDS )25 <($56 ,1 6287+($67 0,&+,*$1 HELP US REACH OUR GOAL! 'DQLDOOH .DUPDQRVÂˇ :RUN ,W 2XW KHOSV FKLOGUHQ FRPEDW REHVLW\ GHFUHDVH VWUHVV DQG LQFUHDVH VHOI HVWHHP WKURXJK \RJD DQG QXWULWLRQ HGXFDWLRQ 0DNH D \HDU HQG JLIW WRGD\

www.dkwio.org

LV SURXG WR VXSSRUW

SEE URGENT, PAGE 17

20151116-NEWS--0016,0017-NAT-CCI-CD_--

11/13/2015

10:41 AM

Page 2

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

SPECIAL REPORT: HEALTH CARE

CON ROUNDUP The following are selected certificate of need filings from Oct. 14-Nov. 11 : Letters of intent received

䡲 Henry Ford Hospital, Detroit: Expand cardiac catheterization service by adding one cardiac catheterization lab in a new space and using a temporary lab and equipment; $3.7 million. 䡲 Wellbridge of Rochester Hills: Acquire a 100-bed nursing home from Wellbridge of Rochester LLC and operate under a 10-year lease; $15 million.

URGENT FROM PAGE 16

Medicaid payments have grown at Michigan Urgent Care to 16 percent of revenue from 10 percent, but commercial insurance has declined to 52 percent from 63 percent. Self-pay also has increased to 9 percent from 7 percent, mostly reflecting increases in high-deductible plans. “We have increased patient volume, but also a lot more people have coverage” because of Medicaid and private insurance expansion, Arsiwala said. Arsiwala said health insurers are increasing copayments to $50 to

“Competition is coming from all directions. ... Urgent care is here to stay. It is a lower-cost option and convenient for patients.” Mohammed Arsiwala,Michigan Urgent Care Centers

$75 from $20 to $30 for urgent care centers. “They are putting lower copays for retail pharmacies (such as CVS’ MinuteClinics),” Arsiwala said. “Their strategy is to direct patients to lower cost models. But we provide a much wider range of care than the outpatient pharmacies.”

Arsiwala said urgent care centers aren’t losing business because of the strategy, but patients are surprised by the out-of-pocket costs. “We charge an average of $75 to $125, much lower than hospital ERs, but some people are surprised the copays are higher than

they expected,” he said. Urgent care services include minor emergency care, treatment for sore throat and respiratory infections, chest pain and urinary tract infections. The centers also provide cardiac monitoring and intravenous fluid therapy. “Competition is coming from all directions,” said Arsiwala. “We are seeing competition from retail pharmacies, other urgent cares that are opening, and competition from hospitals. “Urgent care is here to stay. It is a lower-cost option and convenient for patients.” 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

Applications received University Neurosurgical Associ ates PC dba Premier Imaging, Clinton

䡲

Township: Initiate an MRI host site on mobile MRI network 207; $3.1 million. Decisions St. Joseph Mercy Livingston Hos pital , Howell: Replacement of all

䡲

three operating rooms to the second floor west wing and renovation of patient areas on the first and second floors; $15.3 million. Approved.

䡲 Camelot Hall Convalescent Cen ter , Livonia: Replace the existing

114-bed nursing home (more than two miles) and relocate six beds from Autumnwood of Livonia ; $11.3 million. Approved. 䡲 Wellbridge of Clarkston: Begin operating a new nursing home by replacing 90 beds, under a new design model from Lahser Hills Care Center , to a new site at Sashabaw and Clarkston roads; $10.8 million. Approved. 䡲 Regency at Howell: Add 20 nursing home beds in a newly constructed leased space in Planning Area 47-Livingston; $2 million. Approved. Natalie Broda

Help salute the 40 under 40 Every year, Crain’s 40 under 40 awards program honors high achievers who have made an impact as executives, managers, entrepreneurs and community leaders. This year’s honorees will be recognized at a special event Nov. 19 at the Detroit Marriott Renais sance Center. This year’s winners launched successful companies, grew established firms, took on highpressure projects and more. Individual tickets for the event, scheduled from 5-9 p.m., cost $80. Tickets for groups of 10 or more are $75 each. For past 40 under 40 winners, the cost is $40 per ticket. A strolling dinner and drinks are included. To register for the event, go to crainsdetroit.com/events or call (313) 446-0300.

“CAN ENERGY EFFICIENCY DO MORE THAN SAVE BUSINESSES MONEY?” In addition to lowering bills, working with DTE Energy to make your business more efficient can help improve employee and customer satisfaction. Experts from DTE can show you lighting upgrades to increase safety and visibility, as well as display your products in a better light. Giving a furnace or boiler a tune-up or upgrading to a higher efficiency model can make everyone more comfortable, too. For more energy efficiency tips, visit dteenergy.com/savenow

20151116-NEWS--0018-NAT-CCI-CD_--

11/13/2015

10:37 AM

Page 1

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

CALENDAR

HOW ARE YOU ENHANCING PEOPLE & IMPROVING BUSINESS RESULTS?

THURSDAY NOV. 19

The National Conversation on Board Diversity. 7:30-9:30 a.m. Inforum

Ulliance is celebrating 25 years of delivering comprehensive services that keep your employees emotionally and physically healthy.

Life Advisor Wellness Programs that offer:

• Lower healthcare costs by decreasing employee health risk factors • Wellness coaching by licensed behavioral health experts • Personalized wellness plans and consumer education • Dedicated wellness coordinators and multiple checkpoints throughout the year to help keep your program on track

• Comprehensive programs that can be customized to meet your organization’s needs and budgets

Contact Ulliance at 866-648-8326 or www.ulliance.com

Center for Leadership, National Association of Women Business Owners-Greater Detroit. On the same day in cities throughout the world, business leaders will discuss one strategic question: Why and how do winning companies recruit to maximize board effectiveness? Skyline Club, Southfield. $30 Inforum and NAWBO members, $45 nonmembers. Website: inforummichigan.org. Global-Focused Business Plans and Marketing Strategies. 8-11:30 a.m.

Automation Alley. Success in business largely depends on the ability to diversify into international markets. Speakers include Noel Nevshehir, director of international business services, Automation Alley; Eve C. Lerman, senior international trade specialist, U.S. Department of Commerce; Jeff Jorge, principal, Michigan’s international services practice leader and Latin American services desk leader, Baker Tilly; David Newhouse, international trade development manager, Michigan Economic Development Corp.; others. Automation Alley, Troy. $20

members, $30 nonmembers, $40 walk-in members, $50 walk-in nonmembers. Phone: (800) 427-5100; email: info@automationalley.com.

UPCOMING EVENTS Inside the CEO Mind. 8-10 a.m. Dec. 1. Detroit Regional Chamber. Kouhaila Hammer, CEO, Ghafari Asso ciates LLC, shares her story and

unique perspective on leadership. Hammer is the board president of the Engineering Society of Detroit and is on the Detroit Regional Chamber board of directors. Cranbrook Institute of Science, Bloomfield Hills. $30 chamber members, $55 nonmembers. Preregistration is required; no refunds will be given. Contact: Beverly Maddox, (313) 596-0343; email: bmaddox@detroitchamber.com. 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.

The Gift of Good Health, of course.

But when a child faces serious illness or injury, the ﬁnancial impact to families can be devastating. And many families simply can’t absorb the impact. That’s just one of the reasons there’s the Children’s Hospital of Michigan Foundation – to help sick and injured children and their families with one-time assistance. This is especially important during the holidays. Improving the health of the children of Michigan is our only priority. But we need your support.

Won’t you please give the gift of health for a child. As you think about your year-end charitable giving, please consider making a donation to support children’s health. To make your contribution, visit our website at chmfoundation.org/donatenow.

Through our efforts to improve children’s health and wellness, children will have more days to play, nights to dream, and time – to just be kids.

What O would you give your child?

DBpageAD_DBpageAD.qxd 10/30/2015 11:34 AM Page 1

Who says you canâ&#x20AC;&#x2122;t choose your Family?

GROW WITH US. OVER 700 OPENINGS! The Meridian Family is expansive, ranging from our internal employees to our network providers, members and communities where we operate. Each Family Member plays a pivotal role in the success of the business. Our core values of passion, vision, integrity and quality are centered around family and woven into everything we do.

www.workatmeridian.com

DBpageAD_DBpageAD.qxd 10/30/2015 4:45 PM Page 1

20151116-NEWS--0021-NAT-CCI-CD_--

11/13/2015

10:39 AM

Page 1

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

CRAIN'S LIST: LARGEST MICHIGAN HOSPITAL COMPANIES Ranked by 2014 revenue Company Address Rank Phone; website

Top executive(s)

Full-time Net equivalent Number of revenue Licensed-bed Michigan hospitals/ ($000,000) capacity/ employees ambulatory 2014/2013 occupancy Jan. 2015 facilities Major facilities

Trinity Health Michigan 20555 Victor Parkway, Livonia 48152 (734) 343-1000; www.trinity-health.org

Richard Gilfillan president and CEO

$13,399.8 $13,119.4

15,264 70.0%

24,176

8 905

Mercy Health Muskegon and its campuses: General, Hackley, Lakeshore, Lakes Village, Mercy. Also Saint Joseph Regional Medical Center and its campuses in Ann Arbor, Chelsea, Oakland, and Livonia

Henry Ford Health System 1 Ford Place, Detroit 48202 (800) 436-7936; www.henryford.com

Nancy Schlichting CEO

4,700.0 4,517.0

NA NA

17,325

NA NA

Henry Ford Hospital and its campuses: Wyandotte, Macomb, Kingswood and West Bloomfield

Richard Breon president and CEO

4,600.0 3,928.5

2,124 NA

17,585

Spectrum Health Systems 100 Michigan Ave. NE, Grand Rapids 49503 (616) 391-1774; www.spectrumhealth.org

12 184

3,953.7 3,766.9

3,337 70.9

35,560

8 168

Spectrum Health hospitals: Butterworth, Blodgett, Reed City, United, Kelsey, Special Care, Gerber Memorial, Zeeland Community, Helen DeVos Children's, Big Rapids, Ludington, Lemmen-Holton Cancer Pavilion, Meijer Heart Center, Tamarac Medical Wellness and Fitness Center, Wheatlake Cancer Center Beaumont hospitals in Dearborn, Farmington Hills, Grosse Pointe, Royal Oak, Taylor, Trenton, Troy, and Wayne

3,249.7 NA

3,374 61.6

20,141

12 300

4 5 6

John Fox Beaumont Health 2000 Town Center, Suite 1200, Southfield 48075 CEO (248) 213-3333; www.beaumonthealth.org Gwen MacKenzie Ascension Michigan Senior VP, Ascension 28000 Dequindre Road, Warren 48092 (586) 753-0718; www.ascension.org/michigan Health, Michigan

St. John Hospital & Medical Center, Providence-Providence Park Hospital, St. John Macomb-Oakland Hospital, St. John River District Hospital, Brighton Center for Recovery, Borgess Medical Center, Borgess-Pipp Hospital, Borgess-Lee Memorial Hospital, Genesys Regional Medical Center, St. Mary’s of Michigan, St. Mary’s of Michigan Standish and St. Joseph Health System McLaren's campuses: Bay Region, Bay Special Care, Central Michigan, Greater Lansing, Orthopedic, Lapeer Region, Clarkston, Flint, Macomb, Oakland, Northern Michigan, Northern Michigan Cheboygan, Proton Therapy Center, Port Huron, Karmanos Cancer Institute, McLaren Home Care, McLaren Health Plan University Hospital, C.S. Mott Children's Hospital, Women's Hospital, UM Cancer Center, UM Cardiovascular Center, UM Depression Center, Kellogg Eye Center

McLaren Health Care Corp. G3235 Beecher Road, Flint 48532 (810) 342-1100; www.mclaren.org

Philip Incarnati president and CEO

2,903.0 2,486.6

3,067 NA

20,121

12 300

University of Michigan Health System

Michael Johns interim EVP for medical affairs, UM; CEO, UM Health System Joseph Mullany CEO

2,771.2 2,500.2

1,059 NA

15,756

3 120

1,860.0 1,840.3

1,811 58.0

12,698

NA NA

Children's Hospital of Michigan, Detroit Receiving Hospital, Harper University Hospital, Hutzel Women's Hospital, Rehabilitation Institute of Michigan, SinaiGrace Hospital, Huron Valley Sinai Hospital.

1,156.8 825.8

NA NA

5,894

NA NA

Sparrow Hospital, Sparrow Ionia Hospital, Sparrow Clinton Hospital, Sparrow Specialty Hospital

1500 E. Medical Center Drive, Ann Arbor 48109 (734) 936-4000; www.med.umich.edu

Detroit Medical Center 3990 John R, Detroit 48201 (313) 578-2442; www.dmc.org

Sparrow Health System 1215 E. Michigan Ave., Lansing 48912 (517) 364-1000; www.sparrow.org

Dennis Swan president and CEO

MidMichigan Health

Diane Postler-Slattery president and CEO

544.0 570.0

NA NA

MidMichigan Medical Centers in Clare, Midland, Center-Gratiot, Center-Gladwin

Covenant HealthCare

Ed Bruff president and CEO

528.6 509.0

NA NA

3,617

NA NA

Covenant HealthCare

Allegiance Health B 205 N. East Ave., Jackson 49201 (517) 788-4800; www.allegiancehealth.org

Georgia Fojtasek president and CEO

497.6 420.4

NA NA

3,226

NA NA

Allegiance Heart and Vascular Center, Radiation Oncology - Tejada Center; Hyperbaric Center; Specialty Center; Gayle M. Jacob Cancer Center; Hospice Home; Surgery Center; CareLink Long-term Acute Care Hospital

Lakeland Health

Loren Hamel, M.D. president and CEO

462.2 456.8

373 NA

3,826

NA NA

Lakeland Medical Center, St. Joseph; Lakeland Hospital in Niles and Watervliet; Merlin and Carolyn Hanson Hospice Center, Stevensville; Center for Outpatient Services; St. Joseph Pine Ridge: A Rehabilitation and Nursing Center; Stevensville

Hurley Medical Center

Melany Gavulic president and CEO

370.4 369.1

443 65.0

2,585

1 4

Hurley Medical Center

Metro Health

Michael Faas president and CEO

320.5 313.5

208 61.8

1,903

1 28

Metro Health Southwest; Rockford; Cascade; Community Clinic; Sports Medicine; Internal Medicine; MidTowne Ambulatory Surgery Center; Metro Health Park East; and The Cancer Center at Metro Health Village

Holland Hospital

Dale Sowders president and CEO

222.0 217.0

189 48.6

1,541

1 NA

Holland Hospital

Promedica Bixby Hospital 818 Riverside Ave. , Adrian 49221 (517) 265-0900; www.promedica.org/ contactbixbyhospital

Julie Yaroch president

76.3 75.8

88 45.0

443

1 4

Pennock Health Services

Sheryl Lewis Blake president

62.0 55.4

NA NA

Orchard Drive, Midland 48670 10 4005 (969) 839-3301; www.midmichigan.org N. Harrison, Saginaw 48602 11 1447 (989) 583-0000; www.covenanthealthcare.com

Napier Ave., St. Joseph 49085 13 1234 (269) 983-8300; www.lakelandhealth.org Hurley Plaza, Flint 48503 14 1(810) 262-9000; www.hurleymc.com Byron Center Ave. SW, Wyoming 49519 15 5900 (616) 252-7200; www.metrohealth.net Michigan Ave., Holland 49423 16 602 (616) 392-5141; www.hollandhospital.org

W. Green St., Hastings 49058 18 1009 (269) 945-3451; www.pennockhealth.com

Bixby Hospital

Pennock Hospital

This listing is an approximate compilation of the leading hospital companies based in Michigan. Revenue listed is net patient revenue plus other operating revenue. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies directly or from state and federal filings. Companies with headquarters elsewhere are listed with the address and top executive of their main Michigan office. NA = not available.

B Signed letter of intent Nov. 10 to be acquired by Henry Ford Health System. LIST RESEARCHED BY SONYA D. HILL

SPOTLIGHT: MERGERS REDUCE NUMBER OF HEALTH CARE SYSTEMS IN MICHIGAN Consolidations in the Michigan health care industry have reduced the number of the state’s total health care systems. Driven by the Patient Protection and Affordable Care Act of 2010, shifts to outpatient care, changing reimbursement models that reward quality and punish over-utilization, readmissions and medical errors, hospitals have sought the safety of larger health care organizations to gain negotiating clout with payers and shore up bottom lines. Since 2011, when Crain’s pub-

lished its first statewide hospitals list, the total number of independent health systems has dipped to 18 from 20. The result is a mixture of larger health systems and new owners for local hospitals in the search for higher quality and efficiency that can drive up profits. In 2014, Beaumont Health System, Oakwood Healthcar e and Botsford Health Care merged to form Beau mont Health . That nearly doubled Beaumont’s net revenue to $4 billion in 2014, from $2.2 billion in 2011.

While most deals increased revenue by adding hospitals in the mergers, some systems that didn’t grow through M&A experienced revenue declines for a variety of reasons, including lost market share, sale of affiliated businesses or companies, increase in bad debt and decline in government and private insurance payments. For example, Midland-based Mid Michigan Health saw revenue decline more than 5 percent to $544 million in 2014, from $570 million in 2011. Other M&A deals:

䡲 Marquette General Hospital in Michigan’s Upper Peninsula was acquired in 2012 by Duke LifePoint Healthcare , a joint venture of Brentwood, Tenn.-based LifePoint Hospi tals and Duke University Health Sys tem, based in Durham, N.C. 䡲 In August, Crittenton Hospital Medical Center , a Rochester Hillsbased nonprofit hospital, was acquired by Ascension Health Michigan. Ascension Health Michigan is part of St. Louis-based Ascension Health, the largest nonprofit health system in the nation with 131 hospitals in 24 states

and Washington, D.C.

䡲 Prime Healthcare Services of Ontario, Calif., last year acquired Garden City Hospital , a 323-bed osteopathic hospital. 䡲 ProMedica, a not-for-profit, multihospital system based in Toledo, completed its acquisition of Mercy Memorial Hospital System in Monroe this year. 䡲 In early November, Henry Ford Health System announced a letter-ofintent to acquire Allegiance Health in Jackson. Sonya Hill

20151116-NEWS--0022-NAT-CCI-CD_--

11/13/2015

11:23 AM

Page 1

C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // N O V E M B E R 1 6 , 2 0 1 5

ACQUISITIONS & MERGERS Saga Communications Inc., Grosse

Pointe Farms, announced that it has entered into an agreement to purchase the assets of radio station WLVQ-FM, Columbus, Ohio, from Wilks Broadcast Group LLC, Duluth, Ga. Saga expects to close the transaction, subject to the approval of the Federal Communications Commission, during the first quarter of 2016. Website: sagacom.com.

CONTRACTS ArborMetrix Inc., Ann Arbor, a

provider of health care analytics, announced that the American Society of Anesthesiologists Anesthesia Quality Institute, Schaum-

burg, Ill., will use ArborMetrixâ&#x20AC;&#x2122;s RegistryMetrix cloud-based analytics to power AQIâ&#x20AC;&#x2122;s national anesthesia clinical outcomes registry. Websites: arbormetrix.com, aqihq.org.

Why Have an Ordinary Holiday Event

when you can have an

Andiamo Event Andiamo is the perfect place to celebrate an extraordinary event on any budget. t "DDPNNPEBUJPOT GPS HSPVQT PG t &YQFSJFODFE TUBĂŹ UP BTTJTU XJUI QSJWBUF PS DPSQPSBUF FWFOUT t 0ĂŹ TJUF DBUFSJOH TFSWJDFT BMTP BWBJMBCMF

2!.5ĆŤ ! (ĆŤ%/ĆŤ ĆŤ !(! . 0%+*

ĆŤ ĆŤĆŤÄ&#x2018;ĆŤĆŤ ĆŤĆŤÄ&#x2018;ĆŤĆŤ ĆŤĆŤÄ&#x2018;ĆŤĆŤ ĆŤ ĆŤ ĆŤ ĆŤĆŤÄ&#x2018;ĆŤĆŤ ĆŤĆŤÄ&#x2018;ĆŤĆŤ ĆŤ ĆŤĆŤÄ&#x2018;ĆŤĆŤ ĆŤ ĆŤĆŤÄ&#x2018;ĆŤĆŤ

andiamoitalia.com

Altair Engineering Inc., Troy, announced additions to its Altair Partner Alliance. LW Engineering Software AB, Stockholm, Sweden, has joined, adding LW Finder for accurate and controlled strain gauge placement for measuring structural loads; Centre dâ&#x20AC;&#x2122;Expertise en Dynamique Rapide, Explosion et Multi physique, SAS, Neung-sur-Beuvron,

France, has joined, adding the KTEX family of integrated numeric tools for composites; and Fieldscale PC, Thessaloniki, Greece, has joined, with its Charge electromag-

DEALS & DETAILS netic simulation software. Websites: lwengineeringsoftware.com, altair.com, www.fieldscale.com, cedrem.fr. Munetrix LLC, Auburn Hills, a data aggregator that offers reporting, financial management and forecasting tools for states, municipalities and schools, has been named an approved vendor prequalified to provide data and analytic tools to Michigan public school districts. Website: munetrix.com. Clark Construction Co., Lansing, was named construction manager for the Birmingham Public Schoolsâ&#x20AC;&#x2122; 2015 bond program. The voter-approved $66 million bond program consists of $26 million for technology upgrades, $28 million for construction and $12 million for furniture, equipment and other costs. The construction budget will provide for renovation work at 16 existing facilities. Website: clarkcc.com. First Allied Securities Inc., San Diego, an independent brokerdealer and registered investment adviser with Cetera Financial Group, SEE NEXT PAGE

GET TO KNOW OUR REGIONâ&#x20AC;&#x2122;S YOUNG LEADERS

The Crainâ&#x20AC;&#x2122;s 40 Under 40 party brings together the current class with past winners and their colleagues, clients, family and friends. Network with these accomplished entrepreneurs, executives, elected officials and nonprofit/civic leaders. Read about this yearâ&#x20AC;&#x2122;s class at crainsdetroit.com/40s

TITLE SPONSOR

PREMIER SPONSOR

$< ' 6 +85 7 6 , 7+ .m.

p 9 5 â&#x20AC;˘ 9 1 Detroit , r . e t V n e O C N t Renaissance Marriot

V. 16 NDAY, NO 6-0300 O M S E S 4 O L (313) 4 ATION CL REGISTR /events, OR CAL troit.com crainsde MAJOR SPONSORS

TITLE SPONSOR

WALK-IN REGISTRATION WELCOME PROMOTIONAL PARTNER

BOOTH SPONSORS

PRINT SPONSOR f ic

ia l

pr in

Cr a in â&#x20AC;&#x2122;s De t r o it b u s in e s t er o f

s Ev

en ts

JOIN THESE RISING STARS TO CELEBRATE THEIR ACHIEVEMENTS!

34 w.g 3.0 reko printing.com â&#x20AC;˘ 734.45

20151116-NEWS--0023-NAT-CCI-CD_--

11/13/2015

10:40 AM

Page 1

C R A I N ’ S D E T R O I T B U S I N E S S // N O V E M B E R 1 6 , 2 0 1 5 FROM PREVIOUS PAGE

will provide broker-dealer and, through its affiliate First Allied Advisory Services, registered investment advisory services to Sawchuk & Langenstein Wealth Strategies, Troy, which provides fee- and commission-based wealth management advice. Websites: firstallied.com, sawchukwealth.com. Technical Writing Solutions LLC, Rochester, a provider of technical writing products and services, was selected by Rochester College, Rochester, to assist the vice president of development in researching and writing grant applications. Website: twsinfo.com.

EXPANSIONS Plum Market Corp., Farmington

Hills, has openedPlum Market Ann Arbor-North Campus, 3601 Plymouth Road, Ann Arbor. Website: plummarket.com. Gentherm Inc., Northville, a developer of thermal management technologies, is expanding in the third quarter of 2016 its production capacity by opening a manufacturing facility close to the city of Celaya in Guanajuato, Mexico. Website: gentherm.com.

MOVES Midstates Recycling Services, a re-

cycling and document destruction company for business, has moved

from 990 Decker Road, Walled Lake, to 8585 PGA Drive, Walled Lake. Website: therecyclingexperts.com.

NAME CHANGE Physician Resource Management Inc., Ann Arbor, a health care con-

sulting company, has changed its name to Caret, a Web-based platform that provides health care solutions. The company has moved from 301 E. Liberty St., Suite 600, Ann Arbor, to 24 Frank Lloyd Wright Drive, Suite H1200, Ann Arbor. Website: caretmd.com.

NEW PRODUCTS Altair Engineering Inc., Troy, an-

NEW SERVICES Park West Gallery, Southfield,

and

launched a new animation art website showcasing classic cartoon characters and a history of animation art. Website: parkwest-animation.com.

survey

Michigan First Mortgage, Waterford

Township, has launched a new website that guides first-time and experienced homebuyers through the refinancing and loan process. The website was created by Media Genesis, Troy. Website: michiganfirstmortgage.com.

STARTUPS Brome Burgers & Shakes LLC, Dear-

nounced the availability of SimLab 14.0, the newest version of Altair’s software for simplified modeling solutions for complex analysis problems. SimLab allows the user to set up simulations for engineering problems of most complex assemblies. SimLab 14.0 introduces a new graphic user interface, based on a framework toward which all the HyperWorks software products are moving. Website: altair.com.

born, has opened a fresh-casual restaurant at 22062 Michigan Ave., Dearborn. Telephone: (313) 9965050. Website: bromeburger.com.

Hino Trucks, Novi, a Toyota Group company, has expanded its Insight platform to create a connected vehicle. The platform delivers telematics, remote diagnostics and case management. This platform will be standard fit across all 2017 models. Website: hino.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.

Team Guts, a nonprofit that provides one-on-one training, fitness classes, strength training and sports camps for the special-needs community, has opened at 1008 Orchard St., Ferndale. Telephone: (248) 415-5535. Website: teamgutsmichigan.com.

Looking at Business Issues Highlights of the survey can be found in this issue. View the full survey at honigman.com or crainsdetroit.com This is the 27th in a jointly-sponsored series on critical issues.

Your company’s ﬁnances are always near— even if you’re far away.

FirstMerit Business Mobile Banking Susan likes to stay connected to her company, even when she’s on the go. By downloading FirstMerit Bank’s Business Mobile Banking app1 for her smartphone, Susan can take care of her business account when she wants — and where she wants. Whether she’s depositing checks,2 paying bills, or transferring funds into another FirstMerit account, Susan literally has her company’s ﬁnances in the palm of her hand.

FOR MOR E I N FOR M AT ION, OR TO DOW N LOA D THE A PP:

visit ﬁrstmerit.com/bizmobile or call 855-FMERBIZ.

Follow the latest market trends @ﬁrstmerit_mkt 1. Check your carrier’s app store for compatibility requirements. Wireless carrier and data fees may apply. 2. A Mobile Banking Deposit Fee of $0.50 per check deposited applies. For complete details and restrictions, see a banker or visit ﬁrstmerit.com/mbd.

ﬁrstmerit.com Member FDIC 2409_FM15

20151116-NEWS--0024-NAT-CCI-CD_--

11/13/2015

10:39 AM

Page 1

ADVERTISING SECTION

PEOPLE: SPOTLIGHT

Crain’s has moved its complete list of appointments and promotions to www.crainsdetroit.com/peopleonthemove. Guaranteed placement in print and online can be purchased at this website.

Here are some of last week’s executive appointments reported by Crain’s:

Macomb-Oakland Regional Center names COO as exec director Macomb-Oakland Regional Center Inc., one of the region’s

REAL ESTATE

MANUFACTURING Katie Clow Director of Risk and Treasury Services, Carhartt, Inc.

Diane Batayeh and David Ferszt President and Chief Operating Officer and Senior Vice-President of Property Operations, Village Green Batayeh was promoted to the dual position to oversee all of Village Green Holding's Operating Companies. She leads the development and implementation of all business plans, strategic goals and initiatives. She also plays a leading role in maintaining the company's industry leading high resident satisfaction and high owner operating margins. Batayeh began her career with Village Green 35 years ago as a sales consultant and continues to train and mentor as part of the company's executive training and promotion from within programs. Ferszt was promoted to oversee nationwide property operations at Village Green's 140 apartment communities consisting of 40,000 units valued in excess of $4.5 billion. He is one of the youngest people in Village Green's 96-year history to become Senior VicePresident. He recently worked with third party clients to acquire more than $100 million in multi-family assets. Ferszt began his career at Village Green when he entered the Manager in Training program. He now trains and mentors newly hired property managers in the same program developed through the University of Village Green.

AUTOMOTIVE

HEALTH CARE

Vice President,

Matthew Owens, MA, LLP, LLPC

Serra Automotive

Chief Network Officer,

Denny Dunfield

The long-time GM of the Al Serra Auto Plaza in Grand Blanc will work with the rest of the Serra team to continue to expand the dealer network and provide growth opportunities to associates within the organization.

PROFESSIONAL SERVICES Gregg A. Montowski Executive Director,

REAL ESTATE Michael Leinweber Vice President of Construction Services, Boji Group Leinweber brings to Boji Group 30 years of architectural and construction management experience in the design-build-finance industry, with accredited expertise in sustainable building systems and design. Leinweber served for several years as the director of business development for the Midwest office of Skanska USA and spent 16 years with 400 Monroe Associates, an entrepreneurial real estate development company based in Detroit’s Greektown district.

Oakland County Community Mental Health Authority As CNO, Owens is responsible for the overall planning, development, and implementation of programs and operations with OCCMHA’s service network, quality improvement, and provider network management teams. Owens has 20 years experience in mental health. Positions he held at MCCMH include director of business management, provider contract manager, access/utilization manager, and contractual therapist. He was also program director at Common Ground.

SMACNA Detroit SMACNA Detroit Announces Staff Addition The Sheet Metal & Air Conditioning Contractors National Association (SMACNA) Metropolitan Detroit Chapter is pleased to announce the appointment of Gregg Montowski as Executive Director effective October 2015. Montowski brings over twelve years of construction association industry experience to SMACNA Detroit.

Clow had been a Senior Manager of Risk and Treasury Services since 2012 at Carhartt, where she was responsible for evaluating risk and developing a cash flow forecasting model that allowed for proactive solutions for financing Carhartt’s growth. Clow had been a Senior Manager of Risk and Treasury Services since 2012 at Carhartt, where she was responsible for evaluating risk and developing a cash flow forecasting model that allowed for proactive solutions for financing Carhartt’s growth.

GET CONNECTED

crainsdetroit.com/mostconnected

Gerald Provencal, 75,

who is retiring after leading the Clinton Township-based mental health agency for 37 years. Bott has been with the agency since 1976. Bott

Mars Agency promotes Rivenburgh to CEO post Rob Rivenburgh has been promoted from COO to North American CEO of The Mars Agency, a new position in the Southfield-based firm. The company hired Rivenburgh, 52, in 2002 as executive vice president and general manager, according to his LinkedIn profile, and Rivenburgh promoted him to COO in 2009. He will focus on Mars’ 10 North American regional offices, while Global CEO Ken Barnett will work on expanding the agency’s international footprint, according to a news release.

Shank named chairman, CEO of restructured municipal bond firm Detroit-based Suzanne Shank has become majority owner of Siebert Brandford Shank & Co. LLC, a leading municipal fi-

IN THE 2016 NORTH AMERICAN INTERNATIONAL AUTO SHOW GUIDE *2014 SHOW STATISTICS

Advertising information: Marla Wise at mwise@crain.com (313) 446-6032 CLOSE DATE: Dec. 7, 2015 PUBLISH DATE: JAN. 18, 2016

“SIX DEGREES” DETROIT STYLE

Try it now at

largest human services agencies, has named COO Dennis Bott as executive director, effective in March. Bott, 62, will succeed

IN PARTNERSHIP WITH

nance and underwriting firm on Wall Street, while former HUD Secretary Henry Cisneros has

become a co-owner. Although Shank the firm is headquartered in New York and Oakland, Calif., and has offices in 17 U.S. cities, Shank had operated from the firm’s Detroit office as its president and CEO. Under the restructuring, she will have the titles of chairman and CEO. 䡲

20151116-NEWS--0025-NAT-CCI-CD_--

11/13/2015

5:33 PM

Page 1

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

SURVEY FROM PAGE 3

lic Schools and retire its $750 million in

debt, were lukewarm on the performance of charter schools and had middling views about merit pay tied to test scores, based on a sample of 300 people from Oct. 27 to Nov. 3, with a 5.7 percentage point margin of error. “I couldn’t care less about the roads. I grew up on a dirt road in rural Michigan. But I’m a real estate broker, and so education is a number one priority for a lot of my clients, particularly for their children,” said Joy Santiago Clark, president of Dwellings Unlimited LLC, a residential real estate broker in Farmington Hills and Detroit. “And as the school systems get funded and can improve in various regions, the property values will there as well.” Clark said education was her top priority for Lansing even before Snyder signed a $1.2 billion road spending package this month that draws upon a 7.3-cent gas tax hike, 11.3-cent diesel fuel tax increase, and 20 percent increase in vehicle registration fees. Improved education makes communities more appealing and gives homes more equity, she said, making it good policy and good business. More than 60 percent of respondents said small class sizes were a top priority, and nearly half (43 percent) said greater state aid to school districts was as well, but respondents generally did not have strong opinions about the success of charter schools. John Cavanagh, co-founder of EPIC-MRA, said the lukewarm charter school response could reflect recent media reports on their quality and oversight. About 37 percent of respondents thought charters were either performing the same academically as public schools, or that some were doing better and some worse, while 31 percent thought they were better and 16 thought they were worse. “The question put forward was really whether these schools are perceived to do better or worse in same-

JOB FRONT MISCELLANEOUS

SURVEY ANALYZE MATCH

student achievement results, not so much a political question of whether should they exist,” he said. “But it has shown up generally among voters that it can make a difference for people whether those schools operate for profit, or as a nonprofit.”

Divisive issues Far more divisive were the “clean slate” bill proposed by state Sen. Rick Jones, R-Grand Ledge, that would wipe nonviolent criminal convictions from a person’s record if he or she does not reoffend in a specified amount of time, and an Obama administration request to admit up to 10,000 refugees from the Syrian political crisis by this time next year. Fear of bad actors, Cavanagh said, might be driving the negative response. In both cases, there was a deep well of opposition. Forty-three percent strongly opposed the admission of Syrian refugees, while 9 percent were somewhat opposed. Admission was strongly supported by 27 percent and somewhat supported by 14 percent. Forty-two percent opposed the clean slate bill, with 11 percent somewhat opposed. The bill was strongly supported by 23 percent, and 19 percent somewhat supported it. “I was a little surprised about clean slate,” Cavanagh said. “The amount of time and attention that’s been given by employers to what is dubbed a talent gap would seem to argue for expanding a qualified pool of employees, and that was part of the argument on Syrian refugees as well.” “That’s looking like a long slog, getting views to change on that.” Concerns about Syrian refugees didn’t always break along party lines. Sean McNally, a partner at the Kotz Sangster Wysocki PC law firm in Detroit who calls himself “fairly conservative” and thinks Marco Rubio is gaining credibility as a presidential candidate, supported expanding Syrian immigration — as did Gretchen Schafer, a retired school psychologist

MARKET PLACE LEGAL SERVICES - IMMIGRATION

Immigration Law Firm, AV-rated Antone, Casagrande & Adwers, P.C. Dedicated to Business, Employment, and Family Immigration Matters 31555 W. 14 Mile Rd. Ste. 100, Farmington Hills, MI 48334 (248) 406-4100 www.antone.com MISCELLANEOUS

NEED WAREHOUSING? Plymouth & Livonia Area CrainsDetroit.com/JobConnect |

• Cross-Dock Services • Trucking Services • Diverse Supplier • Reasonable Rates

Call 810-701-0833

Call Us For Personalized Service: (313) 446-6068 FAX: (313) 446-0347 E-MAIL: cdbclassified@crain.com INTERNET: www.crainsdetroit.com/section/classifieds

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

More survey results Energy

51 percent believe utilities should continue to be mandated to offer energyefficiency programs. Forty percent were opposed.

Respondents were very split on a renewable energy mandate for utilities. Twenty-two percent believe the current 10 percent standard should be maintained; 22 percent believe the requirement should be eliminated; 21 percent believe it should be raised to 20 percent over seven years; and 11 percent believe it should be raised, but the requirement eliminated if federal action renders it moot.

Respondents also were split on electric choice. Thirty-six percent believe choice should be limited to the current 10 percent of electricity sold in the state, while 33 percent believe it should be unchanged. Seventeen percent want choice eliminated. Other state public policy

61 percent supported Gov. Rick Snyder’s plan to split Detroit Public Schools into an “old” district to pay off existing debt and a “new” district to assume current operations. The plan would cost the state $715 million over 10 years to help retire the debt.

62 percent support returning state income tax credits for qualified charitable contributions. The 2016 elections

There was a wide range of opinion what the most important issues are. Relative to the national economy, tax reform (12 percent) and job creation (10 percent) were the most commonly cited. Diplomacy (19 percent) and a strong national defense (11 percent) were the most important foreign affairs issues. Increasing education spending while limiting overall spending (both at 9 percent) and balancing the budget (8 percent) were the most commonly cited spending priorities.

from the Macomb Intermediate School District and longtime Democrat. “This would be an excellent time to show ourselves that we don’t always have to throw muscle around to be a world leader, and being kind and generous and compassionate is just as important as having a strong military,” Schafer said.

Focus on education McNally also said he always sees education as a “top five” issue for policymakers, but the highest legislative priority for Lansing was roads and bridges until a few weeks ago. Now it’s the Michigan economy, and providing leadership that’s beneficial to business and free enterprise. “Nationally, the economy is still a number one political priority, and foreign relations remains a key

issue,” he said. “ISIS (the Islamic State) is a big part of that but our relationship with Russia needs to be addressed. We need to look at and repair our alliance with them.” Jonathan Landsman, owner of West Bloomfield-based medical consulting firm Market Focus and an employee of a larger medical consulting company, said he supports greater K-12 per-pupil funding from the state and improving teacher performance — but he questions tying merit pay to yearly test scores and thinks a better metric might be college attainment or employment rates of a teacher’s former students, over time. “We ought to be funding more to the public schools, and I am a fan of things like career training and associate’s degree track education for skills development that the state or federal government can underwrite,” he

said. “Universities have suffered from declining state funds, but I think their rates and their size have also increased relative to their mission. Maybe there ought to be some pruning within their organizations.” Landsman also said other revenue measures like a higher international student tuition rate might also help shore up university budgets. But he opposed making a special accommodation to Syrian refugees, as Obama proposed in September. “The approach needs to be balanced,” he said. “Their situation is getting a fair deal more press right now, but that doesn’t necessarily mean they’re in any worse shape than other areas of Eastern Europe or Africa.” Clark said she thought clean slate was a good concept, both for giving people second chances in the job market and with helping employers close a skills gap within the available Michigan workforce — but she favored a measured approach. “When people have made onetime mistakes, they’ve paid for their mistakes, and they have a skill set that can be used for someone’s advantage, that past shouldn’t hold them back,” she said. “But it should be done with a certain set of criteria.” She also opposes expanded admission of Syrian refugees, but said it was more of a concern for limited resources than national security. Karen Phillippi, deputy director of the Michigan Office of New Americans, said Snyder supports refugees as a whole joining the state workforce and believes they are a benefit over time to economic development. “There is an entrepreneurial community within those groups, and if you look at refugees from countries of conflict, you often find they are doctors, engineers, or were farmers in their own country, and would bring those skills and experience here,” she said. Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

REAL ESTATE

COMMERCIAL PROPERTIES

AUCTIONS

MULTI-TENANT INDUSTRIAL BUILDING

AUCTION

10 ~ 2,400 Sq. Ft. & 5 ~ 1,500 Sq. Ft. Bldgs Utilities Indivually Metered $1.5 M ~ O.B.O. ~ 10% Cap

HOLLY - MICHIGAN 73 ~ 50’ Wide Lots ~ City Water & Sewer $1.25 Million Or Best Offer Walking Distance to Elementary School Several other Residential Lots Avaialble For more information call or email

By Order of the Court Appointed Receiver

Monroe Golf & Country Club

Donald Ross Design - Located at 611 Cole Road, Monroe, MI

BILL MCMACHEN 586-915-4441 billmcmachen@comcast.net INVESTMENT PROPERTY NATIONAL TENANT - INDUSTRIAL HIGH CAP RATES

Call or email today for information on a custom advertising plan!

cdbclassified@crain.com 313.446.6068

Romulus ~ 11.9% cap ~ $500,000. Roseville ~ 11.2% cap ~ $450,000. Columbus Twp. ~ 9.6% cap ~ $600,000 VAN ESLEY REAL ESTATE, DAVID MISKO 734-459-7570

Advertise your Products and Services in Crain’s Detroit Business

'HFHPEHU WK DW 3 0 ĉĀĀġĉąāġĊąĀĀŏŏđŏŏ333ċ$1 /+*) ./$ ((ċ +) Auction in Conjunction with Steve Reeser MI Real Estate License 650414079

20151116-NEWS--0026,0027-NAT-CCI-CD_--

11/13/2015

5:45 PM

Page 1

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

Number of registered medical marijuana patients grows The number of Michigan’s active, registered medical marijuana patients is up more than 18,000 people from three years ago, according to the Michigan Medical Marijuana Registry Program, part of Michigan Licensing and Regulatory Affairs in Lansing. Currently, the state logs 178,629 active, registered medical marijuana patients. Crain’s reported that there were about 160,000 in 2012. The number of active, registered patients with registered caregivers is 68,834 compared with 52,406 in August 2012. Patients using medical marijuana can have a registered caregiver,

MARIJUANA FROM PAGE 1

Michigan is among 23 states that have legalized medical marijuana. Colorado, Washington, Oregon, Alaska and the District of Columbia also legalized recreational marijuana. That could be in Michigan’s future as well. Marijuana activists are confident legalization of small amounts of recreational marijuana for adults 21 and older will be on the ballot for voters next fall.

but it is not required. The registered caregiver numbers in the last three years went from 27,132 to 33,264. Why a significant jump in registered caregivers? “You can grow a certain amount of marijuana if you are a caregiver and a certain amount if you are a patient. Some people may register as both so they can get double the amount,” said Gerald Fisher, professor of law at the Western Michigan University Cooley Law School in Auburn Hills. “People can be caregivers for legitimate and non-legitimate reasons.” Fisher said the leap in the number of patients does not reflect that

there are more people in chronic pain. Rather, it shows more people are using the drug recreationally. “There is a significant view that has formed that marijuana is not harmful and perfectly safe and appropriate to use recreationally.” Right now, LARA does not license dispensaries because the Medical Marihuana Act does not address or include provisions for dispensaries. Caregivers, however, must meet the requirements of the act, which are: 䡲 Being designated by qualifying patients. 䡲 Being 21 years or older. 䡲 Having no more than five

qualifying patients. 䡲 Having no disqualifying conviction. The state’s registry program is where patients bring a doctor’s prescription to get their official medical marijuana card. Cost for an application this year is $60, reduced from $100 in 2014. According to LARA in an email, the application fee was reduced to reflect the application fee that was in effect for about 90 percent of the applicants. It would not comment further. “To take the price down that much is suspect,” Fisher said. He said businesspeople’s feelings

It may not be a shoo-in. Ohio voters rejected legalization of recreational marijuana by a 2-to-1 ratio in the Nov. 3 election. For now, the issue of dispensaries, their lack of regulation and the effects on nearby neighborhoods are hot issues in Detroit and many of its suburbs. The Detroit City Planning Commis sion recently held two public hearings to get citizen feedback on the proposed ordinance. The first hearing, in late October, drew more than 300 people and resulted in 70 peo-

ple sharing their opinions with the commission; a second hearing, in early November, resulted in about 35 residents commenting. While many favored the zoning ordinance because it could close down some of the dispensaries in their neighborhoods, dispensary owners and cancer patients defended them. Written submissions included 60 letters in favor and 100 letters in opposition. Two petitions with 130 signatures in support of the ordinance were also received, according to

planning commission minutes. At that meeting, the Planning Commission recommended approval of the zoning ordinance to the Detroit City Council . It went to the Planning and Economic Development Standing Committee of the council for review. Another meeting has been scheduled for this week. That committee meets every Thursday. There is no timetable yet on when the City Council will begin its review of the ordinance, said DeAndree Watson, policy analyst for

It’s not too soon to think about year-end tax planning and our session on December 1 covers everything you need to know. Join us for a Plante Moran webinar with insights about top-of-mind business challenges. Our CPE-approved* webinars draw thousands of attendees every year. Double-booked? Don’t worry. Visit the webinar archives and enjoy the presentation at your convenience. Join us and ﬁnd out why Plante Moran’s webinars offer

a higher return on experience.

Register at webinars.plantemoran.com * Plante Moran is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have ﬁnal authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org

about dispensaries tend to vary depending on professions. For example, landlords frequently discourage pot growers, sellers and users in their buildings because they are undesirable to other tenants. But a landlord with a vacant retail strip would welcome a dispensary. Meanwhile, attitudes toward retailers are split according to urban and suburban locales. Urban areas tend to be less restrictive toward dispensaries, while the suburbs want more regulation. “This issue has nothing to do with race or wealth. It’s a lifestyle issue,” he said. Marti Benedetti

Councilman James Tate’s office, in an email.

Selling in a legal gray area Visits to dispensaries around the city show similar setups. Customers are buzzed in and greeted by a security guard. The subtle smell of marijuana wafts out the front door when it’s opened. The odor lingers in the lounge/waiting room, but no marijuana products are visible. They are shelved in a closed-door room. Proprietors consistently ask for a medical marijuana card and, without one, say they do not allow visitors beyond the waiting room. (Despite repeated requests, this reporter could not gain entry for research purposes.) Dispensary façades are often in garish shades of green, and they sport pointedly slang names such as The House of Dank , The Reef , the Grass Station and The Green Mile. Nick*, manager of Starbuds, a dispensary on Eight Mile Road in Detroit that is part of a franchise out of Colorado, said dispensaries operate like any specialty retailer. (*Many of those who work in Detroit dispensaries did not want their last names used in the story.) He said his center does not sell edibles (food such as brownies made with marijuana or its oils) or concentrates (pressed water hash or CO2 oil that is ingested). He believes there is a degree of risk with edibles and concentrates because they are ingested. However, Starbuds does carry cannabis oil cartridges, which contain THC and are smoked like e-cigarettes. “I hate how they (the anti-marijuana faction) portray people who smoke weed. We’re nonviolent, good people,” he said. Nick and other dispensary manager/owners interviewed accused banks of discriminating. “They find out and just close down your bank accounts,” Nick said. “They consider us high risk.” But banks are federally regulated institutions, so they must follow federal law, which says marijuana is illegal. SEE NEXT PAGE

20151116-NEWS--0026,0027-NAT-CCI-CD_--

11/13/2015

5:35 PM

Page 2

C R A I N ’ S D E T R O I T B U S I N E S S // N O V E M B E R 1 6 , 2 0 1 5 FROM PREVIOUS PAGE

“Federal law says we can’t have anything to do with a transaction of controlled substances,” said a major U.S. bank spokesperson who asked not to be identified. “So it’s a bit of a pickle.” Jon, manager of the Detroit Strain Station in southwest Detroit, knows all about the industry’s conundrums. He is looking forward to the day when the industry is regulated “because now it is out of control.” He said his dispensary was opened a month ago by a group of partners who were medical marijuana growers. “We feel we have a better chance of getting a city license for the store if we do it before licensing becomes mandatory,” he said. The City Council in early October passed companion legislation to the proposed zoning ordinance stating marijuana dispensaries must have a city license or be shut down. Right now, licenses are not required. Detroit Strain offers patients 40 kinds of marijuana versus the 12 to 20 varieties of most dispensaries, which Jon said gives the business a competitive advantage. It grows some of the weed it sells and sources the rest from outside growers. Jon said about 80 percent of his patients come from the Downriver suburbs, which “is why I have such a safe environment. You have to get through four doors before you get into the dispensary. Patients feel safe here.” He said owners and managers can make a living in this business, but he would not elaborate. There is no special taxation on medical marijuana yet, though there is talk of it, and owners worry that steep taxes on dispensaries could have an adverse effect on their bottom line. David, manager of Cloud9Relief , also on Eight Mile Road in Detroit, said he runs the center like “a secure doctor’s office,” with a fenced parking lot, a guard who buzzes people in, and a waiting area with a bulletproof window for patients to check in. “With this, it is safer for us and our patients,” he said. “All the dispensaries have safety for employees and patients because there are no set guidelines or rules for this business.” Different laws at different levels of government mean that the dispensaries, although tolerated by the city of Detroit, are operating in a legal gray area. First Lt. Mike Shaw, public information officer for the Michigan State Police, doesn’t see it that way. “Marijuana and medical marijuana are illegal in the state,” he said. “The court ruled dispensaries are illegal.”

Seven years of medical pot Sixty-three percent of Michigan voters passed Proposal 1, known as the Michigan Medical Marihuana Act, in 2008. The law says that state residents with qualifying medical conditions can apply for an ID card and a spot on the state registry. Qualified patients may possess less than 2.5 ounces of usable marijuana plants kept in an enclosed,

Proposed pot dispensary rules The proposed Detroit zoning ordinance, created by Detroit City Councilman James Tate earlier this year, has specific dispensary requirements and regulations that would:

䡲 Dictate that a dispensary be 1,000 feet from any zoning lot occupied by a park, play lot, playfield, playground, recreation center or youth activity center. 䡲 Be defined as a medical marijuana caregiver center. 䡲 Require a dispensary be 2,000 feet from another dispensary or 2,000 feet from a controlled use space such as an arcade, pool hall or party store.

䡲 Require a dispensary be 1,000 feet from a religious institution identified as exempt by the city assessor. Additionally, under the ordinance, background checks for the applicant and all proposed employees of a dispensary would be conducted upon application for a required business license. Law enforcement would conduct inspections to ensure that those providing medical marijuana are registered caregivers and the recipients are registered through the state. The ordinance allows dispensaries to be in local and general business and light industrial districts.

Medical marijuana bills LANSING — The state Senate is considering a series of bills that would regulate medical marijuana production and sale in Michigan. Three bills — House Bills 4209, 4210 and 4827 — cleared the state House last month by wide margins and are now pending in the Senate’s judiciary committee. Here’s what they’d do: House Bill 4209: Sponsored by Rep. Mike Callton, R-Nashville, the bill would require medical marijuana growers, processors, provisioning centers (sometimes called dispensaries), transporters and safety testing sites to have state licenses to operate. That licensing process would require written approval from the municipality in which it wants to operate. Municipalities also would be allowed to adopt local ordinances to authorize or limit the number or marijuana businesses in their jurisdictions and charge local licensing fees. The bill also would charge a 3 percent excise fee on medical marijuana facilities. House Bill 4210: Sponsored by Rep. Lisa Posthumus Lyons, R-Alto, the bill would include marijuana products, known as “edibles,” as an allowed form of medical marijuana. House Bill 4827: Sponsored by Rep. Klint Kesto, R-Commerce Township, the bill would establish a “seed-to-sale” medical marijuana tracking system. If adopted, medical marijuana plants, products, sales, returns and other transactions all would be tracked. Also tracked would be lot and batch numbers, transportation and destruction of marijuana and marijuana products and lab test results to ensure product safety. Lindsay VanHulle

locked facility. Registered caregivers may possess up to 2.5 ounces and 12 plants for each qualified patient under their care. Shaw said he knows cities such as Detroit have decriminalized pot, but “if we come across a dispensary, we will shut it down. We don’t enforce local ordinances because they are superseded by state law.”

In 2012, Detroiters voted to decriminalize marijuana use when adults 21 and older are in possession of less than an ounce on private property, which has helped fuel the rapid expansion of dispensaries. Other Michigan cities such as Ferndale and Ann Arbor did the same thing in recent years. Shaw said state police in Detroit focus on patrolling the city’s freeways and the 9th District, which has a particularly high crime rate, he said. If state police see a person walking down the street in Detroit smoking marijuana, “we would bust the person. It’s cut-and-dry for us.” Matthew Abel, a Detroit-based criminal defense attorney with the Cannabis Counsel and an activist for changes in marijuana laws, disagreed. “It is legal to have a place where a caregiver can transfer medical marijuana to their patients,” he said.

Zoning questions Abel said there is still fear around the topic of medical marijuana. If the proposed city zoning ordinance passes as is, many dispensaries in the city will have to close. “I think it should be set up that distance restrictions should only apply to schools and libraries,” Abel said. “And if we are including zones around churches, they need to be tax-exempt ecumenical properties not just a storefront church.” He added that under any circumstances, dispensaries should not be within 1,000 feet of a school. “They never should have opened there in the first place,” he said. Abel said the dispensary business presents a huge economic opportunity. “This can be an economic engine if done properly,” he said. “The sooner Detroit gets on board, these centers can work to everyone’s advantage. We need to make it so people can happily live with it in their community.” David of Cloud9Relief is confident laws will get established that will stabilize the industry. “These dispensaries employ lots of people, fill lots of vacant space in plaza locations and have not caused an increase in violence or crime,” he said. 䡲

20151116-NEWS--0028-NAT-CCI-CD_--

11/13/2015

5:46 PM

Page 1

2015

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

UPCOMING

PARTNER EVENTS

Southfield Area Chamber of Commerce 3rd Thursday November 19 • 4-6 p.m. Embassy Suites, Southfield Nonmembers: $10 Register online at www.southfieldchamber.com Business Development Series: Business Resources December 18 • 7:30 a.m. Southfield Area Chamber, Southfield Nonmembers: $10 Register online at www.southfieldchamber.com Excellence in Southfield Awards Breakfast December 2 • 7:30 a.m. Register online at www.southfieldchamber.com

Marketing & Sales Executives of Detroit The Seven Key Characteristics for Non-selling Professionals to Sell More Effectively Speaker: Gerry Weinberg, President and CEO, Gerry Weinberg and Associates/Sandler Training This program is tailor-made for engineers, lawyers, architects, accountants and project managers to help them sell without looking, sounding or acting like a traditional sales person. November 20 • 8-10:30 a.m. Management Education Center, Troy MSED members: $35 Nonmembers: $50 To register, please go to www.msedetroit.org or call Meeting Coordinators at (248) 643-6590.

Detroit Society for Human Resource Management Chapter Event & Annual Meeting Join us for a “fireside chat” with Shinola and Microsoft regarding the future of HR. We will be joined by Brad Hagemeyer, Shinola VP of HR, Jacques Panis, Shinola CEO (via live video) and John Fikany, Microsoft VP of Enterprise Sales. November 18 • 5-8:30 p.m. Westin Hotel, Southfield SHRM members: $45 (through Nov. 20), $55 (after Nov. 20) Nonmembers: $60 (through Nov. 20), $70 (after Nov. 20) To register, please go to www.detroitshrm.org or call (248) 478-6498.

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

ADS

amount of state tax revenue generated in a given year, and calculate FROM PAGE 3 an average dollar figure ROI. on the whole needs to do a better job That dollar figure doesn’t include at communicating what it does. The multipliers for secondary or tertiary culture change is the result of linger- economic benefits, Lorenz said, nor ing questions about transparency does it factor in taxes on hotel rooms. and threats of state budget cuts. Since 2006, Pure Michigan has To Lorenz, who took the helm of invested $95.4 million and earned Travel Michigan this summer fol- $4.81 for every dollar spent, Longlowing the resignation of previous woods’ data show. leader David West, transparency is The state plans to maintain a more than a buzzword. focus on Pure Michigan Last month, he testified despite a 27 percent budgbefore multiple House and et cut within the MEDC Senate committees about this fall that led to the layplans for Pure Michigan’s off of 65 employees across 2016 campaigns, somethe department. Travel thing he said had previousMichigan today has 10 ly not been done as much employees, including Lorin advance. Lorenz’s staff enz. plans to develop more ac- Dave Lorenz: Those layoffs primarily curate regional travel esti- State spends $1, are due to a revenue shortfall mates and publish its first makes $6.87. in its corporate fund, which true international data, the consists of a share of gaming latter drawing on new information revenue from tribal casinos. The Gun from Detroit Metropolitan Airport and Lake Tribe, which operates a casino in the U.S. Department of Commerce. Allegan County, withheld a roughly $7 “As much as we try to act as million state payment in June in a disthough we’re not government, we pute over Internet lottery games. Pure Michigan relies on about try to act as though we’re a not-forprofit entity just trying to do the $1.2 million in corporate dollars, best we can for our stakeholders … but the bulk of its $33 million budgpeople are naturally reticent to be- et comes from the state’s general lieve anything that comes out of fund, budget data show. Lawmakers government today,” he said. “That’s determine the MEDC’s annual general fund appropriation during the why I shared so many things.” That included data from Toron- budget cycle. That process has carto-based Longwoods International , ried its own uncertainty. which contracts with Travel MichiThis spring, House Republicans gan to evaluate the campaign’s ef- proposed siphoning off $185 milfectiveness, that suggest Pure lion in MEDC funding as part of a Michigan ads inspired 4.1 million road funding deal. The final roads out-of-state trips here last year. plan signed into law last week didThose visitors are estimated to have n’t divert any money specifically produced roughly $85.4 million in from MEDC but will shift up to state tax revenue. $600 million from the general fund For every dollar spent on Pure to roads by 2020-21. The LegislaMichigan in 2014, Lorenz said, the ture has not said which departstate made $6.87. That’s the best re- ments will be cut. sult since the department started Tracking Pure Michigan’s ROI is tracking ROI in 2006, he said. important not only to determine whether the campaign is worth Calculating ROI continued investment, Lorenz said, Pure Michigan’s ROI figure is but also because Michigan’s largely an estimate. There’s no de- tourism industry is trying to attract finitive way to survey every out-of- more visitors in hopes of turning state visitor to Michigan about them into residents — something whether a television or print ad mo- he calls the “halo effect.” tivated their trip. ‘We’re the The state knows how much it comeback city’ spends annually on national adverTourism marketers hope Detising — $12.4 million in 2014, data show. Researchers estimate the troit’s turn in the Pure Michigan number of out-of-state trips and spotlight will do just that.

In the past, Lorenz said, much of the messaging surrounding Detroit was that the city was a cool place to visit, despite its challenges. Now, “we don’t have to lead with the ‘Gee, I’m sorry’ message first,” he said. “It provides an opportunity for us to lead with, ‘Hey, we’re the comeback city. Detroit is a good place to visit, for these reasons.’” The call to action to the viewer is: “Don’t you want to be a part of this as a visitor, or as a businessperson, or as somebody looking to start their entrepreneurial career?” Lorenz said. Detroit’s commercial will be part of a roughly $12 million national TV ad buy, Lorenz said. It will be jointly funded by Travel Michigan and the Detroit Metro Convention & V i s i t o r s B u r e a u . In all, Pure Michigan expects to spend $17 million next year on promotion, including public relations and social media efforts. Said Bill Bohde, senior vice president of sales and marketing for the visitors bureau: “We’ve got to change perception, and that’s the way to do it.” Other commercials planned for spring and early summer will promote Michigan’s growing craft beer industry and its farm-to-table “foodie” culture. McCann Erickson ’s Birmingham office will produce the commercials. Detroit was not ready for an aggressive marketing campaign before now, Bohde said. Several years ago, the CVB launched a campaign dubbing Detroit “America’s Great Comeback City,” an effort to promote the bankrupt city’s assets to a national audience. The CVB’s proposed 2016 budget is $16.2 million, with $3.6 million set aside for marketing efforts, Bohde said. The budget still needs final approval from the agency’s executive committee. Detroit still has challenges — a debt-ridden school system and blighted neighborhoods among them — but those problems will take years to fix, Bohde said. New tourists, new investors and new revenue could help expedite efforts to solve them. “I don’t think there’s anything to lose here because of the momentum that we gained,” he said. 䡲 Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

20151116-NEWS--0029-NAT-CCI-CD_--

11/13/2015

5:34 PM

Page 1

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

COMCAST FROM PAGE 3

ior regional vice president for the Heartland region, which includes Michigan, Indiana, Kentucky and Arkansas. “Several others (executives) lined up post-transaction roles elsewhere within Comcast but never moved to them due to the cancellation of the deal,” he said. With Time Warner in the rearview mirror, Comcast in Michigan is now in expansion mode. The company announced two weeks ago it would fill nearly 400 new positions in Michigan over the next 12 months.

New local jobs More than 300 of those are customer care roles that will support service inquiries for subscribers at the company’s call centers in Ann Arbor, Plymouth and Sterling Heights. The company also has openings at its service centers and in technical operations, marketing and sales.

MERGER FROM PAGE 1

specified amount of capital projects, clinical improvements and management support, including installation of an electronic health record made by Epic Corp. , Riney said. Henry Ford completed installation of Epic last year. As one of the nation’s most tightly managed integrated health systems with all its hospitals and medical centers located in Southeast Michigan, Henry Ford’s Riney acknowledged challenges in generating efficiencies with Allegiance so far away. “This is not consolidation. This is growth,” Riney said. “We want to provide additional support for them to grow and expand in their own market.” But Phil Incarnati, CEO of Flintbased McLaren Health Care , said he can’t understand Henry Ford’s objective in acquiring Allegiance. “There is a quaternary (all-services) health center several miles away, at the University of Michigan and St. Joseph’s ,” he said. “What’s in it for Henry Ford? Do they expect to have patients bypass Ann Arbor and go to Detroit for services?” Wright Lassiter III, Henry Ford’s president, said Henry Ford wants to help expand Allegiance’s market presence in Jackson County and the south-central Michigan region.

Nationally, the company has committed to investing $300 million a year over the next five years on this initiative, including hiring 5,500 call center employees, Collins said. Comcast has about 4,400 employees and 1.25 million customers in Michigan. Three-quarters of those are in Southeast Michigan. Since the company’s disclosed average revenue per customer figure is $143, an estimate on quarterly revenue for Michigan is $179 million. At the company level, Comcast reported third-quarter net income of $2 billion on revenue of $18.6 billion, up from $16.8 million a year earlier. The products sold to generate those figures — and big-picture strategies — are largely conceived at the corporate level, but Collins said a lot of work is done on the front lines to target marketing tactics by geography and demographics. “This can take the form of emphasizing certain aspects of our broad product set. For example, in a university town dominated by mil-

“Joining with Allegiance Health is an important strategic step for Henry Ford as we broaden our expertise and reach beyond southeast Michigan,” Lassiter said in a statement. Riney said Henry Ford doesn’t expect to generate a lot of referrals from Jackson to Henry Ford hospitals. “We are not doing this to transfer patients,” Riney said. “It is related to expanding care at the local market. We want to help bring Allegiance specialty programs to a higher level with expanded patient base. There may be opportunities (for referrals from Allegiance) for very high-end, complex patients.” Incarnati said he expects the “University of Michigan will continue to get the bulk of referrals.” In response, Incarnati said it is possible that UM or St. Joseph will build a major multispecialty center in Jackson. “This will create new competition,” he said. Over the past several years, Henry Ford and Allegiance have been exploring mergers with various health systems. Two years ago, Henry Ford attempted to merge with Beaumont Health System in Royal Oak. Cultural and management differences ended that deal. Beaumont then merged with Oakwood Healthcare and Botsford Hospital to become eight-hospital Beaumont Health, the largest health system in South-

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: Allegiance Health................................................ 1 Angels’ Place....................................................... 9 Beaumont Health .................................. 13, 14, 15 Business Leaders for Michigan ........................ 7 Cass Communi-Tea............................................ 9 Cloud9Relief ..................................................... 27 Comcast .............................................................. 3 Detroit Central City Community Mental Health . 11 Detroit Medical Center.......................... 11, 14, 15 Detroit Metro Convention & Visitors Bureau.. 28 Detroit Public Schools .................................. 3, 6 Detroit Strain Station ..................................... 27 Dwellings Unlimited ........................................ 25 Dykema Gossett ............................................... 15 Eastern Market................................................. 25 Emagine Entertainment ................................... 9 EPIC-MRA ............................................................ 3 Henry Ford Health System ..................... 1, 13, 14

Honigman Miller Schwartz and Cohn ............. 3 Judson Center .................................................... 9 JVS........................................................................ 9 McLaren Health Care............................ 12, 15, 29 Michigan Cable Telecommunications Assoc. .. 29 Michigan Economic Development .................. 3 Michigan Primary Care Association .............. 16 Michigan Urgent Care Centers ....................... 16 Mindright.............................................................. 1 Newmark Grubb Knight Frank ......................... 4 Oakland University ............................................ 9 Red Truck Fresh Produce ................................ 25 St. John Providence Health System .............. 13 St. Joseph Mercy Health System............... 11, 14 Starbuds ........................................................... 26 Travel Michigan................................................... 3 Trinity Health .................................................... 14 University of Michigan Health System....... 1, 13

lennials, there will be more emphasis on high-speed Internet” and streaming bundles, he said. “It can also determine where new products are developed and tested; in Michigan, for example, we have been the national pilot market for prepaid cable TV services.”

Changing marketplace Comcast, regionally and nationally, is dealing with a TV landscape that looks much different than even a few years ago. Cord-cutting — the trend of consumers who are fed up with steep monthly cable bills dropping their pay-TV connections — is on the rise. Netflix’s U.S. subscriber base alone has soared to 40.3 million. That means companies like Comcast will be relying on their units that sell broadband access and other services to power growth. “There’s no question that we are in the middle of what is going to be some dramatic change in this industry,” Collins said. “It’s going to look very different five years from now.”

Vital hospital stats Henry Ford Health Founded: 1915 Hospitals: 5 Total employees: 23,000 Physicians: 1,200 employed, 2,000 affiliated 2014 revenue: $4.7 billion

Allegiance Health Founded: 1918 Hospitals: 1, in Jackson Total employees: 3,700 Total physicians: 150 employed, 250 affiliated Fiscal 2015 revenue (year ended June 30): $1.5 billion

east Michigan in market share. But Crain’s has learned another possible reason for the Allegiance acquisition is that Henry Ford is said to be in talks with Kaiser Permanente. Since earlier this year, the two nonprofit systems have been talking about a merger or affiliation. Another possibility is Kaiser would invest in Henry Ford’s Health Alliance Plan. Henry Ford and Kaiser Permanente have declined to comment. However, two sources told Crain’s the acquisition of Allegiance is part of the HAP discussion with Kaiser. “The word is that they need the 400 to 500 physicians associated with Allegiance to all become HAP providers,” one source told Crain’s. Brenda Craig, Henry Ford’s director of media relations, said there is no connection with Allegiance joining Henry Ford and any possible talks with Kaiser. But the source, who is familiar with Kaiser’s plans, told Crain’s that Kaiser is interested in Allegiance’s open-heart unit that “would be enhanced and redirect a significant amount of business away from University of Michigan.” One of the reasons talks with UM broke down was that UM wanted to continue Allegiance only as a “patient feeder source, which would mean investing much less capital.

Comcast’s infusion of call-center and tech-support workers speaks to the trend, said Matt Groen, executive director of the Michigan Cable Telecommunications Association. Groen said the association estimates about 6,500 people are employed by the cable industry in Michigan. The Comcast announcement would push that higher. “On the hardware, programming and, increasingly, software sides of their operation, the opportunity for a single problem to mushroom is high,” Groen said. “We see Comcast, and indeed other MCTA members, moving toward innovative solutions that are less mechanical and easier to seamlessly update (such as with an app).” A focus on customer service is an obvious need, such as reducing hold times or letting customers track technician visits on a phone app. “Progress is being made every day, but it’s not our job to brag about it. It’s our job to do it,”said Michelle Gilbert, vice president of public relations for the Heartland region. 䡲

For Henry Ford, it sweetens the deal for the merger with Kaiser and expands their footprint.” On the possible Kaiser affiliation with Henry Ford, Fojtasek said she wasn’t aware of any merger talks. “We are confident the strategies that Henry Ford are pursuing are compatible with our goals,” she said. “I don’t connect the dots” to Kaiser. Incarnati said if Kaiser joins with Henry Ford, Kaiser would still need to contract with St. Joseph’s and UM. Like Henry Ford and many hospitals in Michigan, Allegiance has been talking merger or affiliation with other health systems. While separate deals with UMHS and ProMedica were reportedly close at hand, Fojtasek said various issues led to the breakups. Fojtasek declined to specify why the ProMedica arrangement fell through. ProMedica officials did not respond to interview requests. But on UM, Fojtasek said the two health systems couldn’t agree on a management structure that met both organizations’ goals. “We have geographic proximity, but both of us had to believe in a structure that involves Allegiance’s new parent corporation,” she said. Sources told Crain’s that Allegiance proposed to UMHS a list of non-negotiable items, including guaranteed severance packages for top executives. It also wanted promises to continue its open-heart program and expand other clinical service lines. But Fojtasek said no guaranteed severance packages for executives are part of the deal with Henry Ford. After UM talks ended last December, Fojtasek said Allegiance issued a request for proposal that garnered 15 replies. Systems that responded included nonprofit and for-profit systems inside and outside of Michigan. Riney said Henry Ford has agreed to most of Allegiance’s capital, operational and clinical partnership needs. Pending state and federal regulatory approval, the deal is expected to close by next March. 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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, Audience Development Nancy Hanus, (313) 446-1621 or nhanus@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@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 News Editor Beth Reeber Valone, (313) 446-5875 or bvalone@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 Editorial Support (313) 446-0419; YahNica Crawford, (313) 446-0329 Newsroom (313) 446-0329, FAX (313) 446-1687 , TIP LINE (313) 446-6766

REPORTERS Jay Greene, senior reporter Covers health care, insurance, energy, utilities and the environment. (313) 446-0325 or jgreene@crain.com Chad Halcom Covers litigation, the defense industry and education. (313) 446-6796 or chalcom@crain.com Tom Henderson Covers banking, finance, technology and biotechnology. (313) 446-0337 or thenderson@crain.com Kirk Pinho Covers real estate, Oakland and Macomb counties. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor Covers media, advertising and marketing, the business of sports, and transportation. (313) 446-1626 or bshea@crain.com Robert Snell, reporter Covers city of Detroit and regional politics. (313) 446-1654 or rsnell@crain.com Lindsay VanHulle, Lansing reporter. (517) 6572204 or lvanhulle@crain.com Dustin Walsh, senior reporter Covers the business of law, auto suppliers, manufacturing and steel. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits, services, retail and hospitality. (313) 446-1694 or swelch@crain.com ADVERTISING Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Sales Manager Tammy Rokowski Senior Account Executive Matthew J. Langan Advertising Sales Christine Galasso, Catherine Grace, Joe Miller, Sarah Stachowicz Classified Sales Manager Angela Schutte, (313) 446-6051 Classified Sales Lynn Calcaterra, (313) 446-6086 Events Manager Kacey Anderson Creative Services Director Pierrette Templeton Senior Art Director Sylvia Kolaski Marketing Coordinator Ariel Black Special Projects Coordinator Keenan Covington Sales Support Suzanne Janik, YahNica Crawford Editorial Assistant Nancy Powers Production Manager Wendy Kobylarz Production Supervisor Andrew Spanos

CUSTOMER SERVICE Main Number: Call (877) 824-9374 or customerservice@crainsdetroit.com Subscriptions $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or (877) 824-9374. Single Copies (877) 824-9374 Reprints (212) 210-0750; or Krista Bora at kbora@crain.com To find a date a story was published (313) 4460406 or e-mail infocenter@crain.com Crain’s Detroit Business is published by Crain Communications Inc. Chairman Keith E. Crain President Rance Crain Treasurer Mary Kay Crain Executive Vice President/Operations William A. Morrow Executive Vice President/Director of Strategic Operations Chris Crain Executive Vice President/Director of Corporate Operations KC Crain Vice President/Production & Manufacturing Dave Kamis Chief Financial Officer Thomas Stevens Chief Information Officer Anthony DiPonio G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROITBUSINESS ISSN # 0882-1992 is published weekly,except fora special issue the third weekof November,and no issue the third weekofDecemberby Crain Communications Inc.at 1155 Gratiot Ave.,Detroit MI 48207-2732.Periodicals postage paid at Detroit,MI and additional mailing offices.POSTMASTER: Send address changes to CRAIN’S DETROITBUSINESS,Circulation Department,P.O.Box07925,Detroit,MI 48207-9732. GST# 136760444.Printed in U.S.A. Entire contents copyright 2015 byCrain Communications Inc.All rights reserved.Reproduction oruse ofeditorial content in anymannerwithout permission is strictly prohibited.

20151116-NEWS--0030-NAT-CCI-CD_--

11/13/2015

5:50 PM

Page 1

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

WEEK

ON THE WEB NOV. 7-13

Detroit Digits Rocket Fiber launches speedy Internet service $8M

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

etroit-based Rocket Fiber announced the formal launch of its ultrafast optical fiber Internet service. Dozens of buildings and thousands of residents will be added to Rocket Fiber’s network in 2016 throughout downtown and Midtown, where construction already has begun.

COMPANY NEWS UAW leaders approved a tentative labor contract with Dearborn-based Ford Motor Co. that could lead to most car production leaving the U.S. by the end of the decade, Automotive News reported. Production of four U.S.-built cars — the CMax, Focus, Fusion and Taurus — would last only through current product lifecycles. G e n e r a l M o t o r s C o . is planning to launch reviews for all of its public relations agency partners around the globe, with the goal of consolidating with one agency of record per brand, Advertising Age reported. A spokesman for the Detroit automaker said the reviews will take place mainly in 2016. Troy-based auto parts supplier Zhongli North America Inc., the U.S. subsidiary of Shanghaibased Zhongli Corp., announced the acquisition of Staples, Minn.based Stern Rubber Co. Terms were not disclosed. The Huntington Co. LLC in Berkley, the largest dry cleaning franchiser in the country, said it will rebrand several properties over the next six to 12 months under the Martinizing Dry Cleaning name. Brands being folded into the Martinizing brand are 1-800DryClean, Pressed4Time and Dry Cleaning Station. Livonia-based auto supplier Tower International Inc. said it is weighing a sale of its European operations to strengthen North American operations. Tower Europe operates factories in Germany, Slovakia, Poland, Czech Republic, Italy and Belgium. Ann Arbor-based RetroSense Therapeutics LLC announced it has closed on a Series B funding round of $6 million to continue testing of its gene-based therapy for restoring vision to those suffering from retinitis pigmentosa. Dearborn Heights-based Entertainment Express Limousine and Party Bus lost its operating license

after incurring 36 violations over the past year, the Michigan Department of Transportation announced. CHJ Aircraft Maintenance Inc., a

The stalking horse bid entered by SOK Ventures LLC, an affiliate of Livonia-based Team Schostak Family Restaurants, to acquire Troy-based Olga’s Kitchen Inc. out of Chapter 11 bankruptcy. Competing bidders have until Monday to top SOK’s opening bid.

$1.66B

The net deficit reported by Detroit Public Schools following a new accounting requirement. The 118 percent increase from last year now includes $858 million of unfunded pension liabilities.

6.1

The percent year-over-year increase in home and condo sales in Wayne, Macomb, Oakland and Livingston counties in October, according to data from Farmington Hills-based Realcomp Ltd. II. Overall, 4,957 homes and condos were sold last month, up from 4,673 in October 2014. Median sale price in the region was up 3.4 percent to $150,000.

maintenance services firm for commercial and regional airlines based at Detroit Metropolitan Airport in Romulus, was acquired by STS Aviation Group Inc. of Jensen Beach, Fla. Terms were not disclosed. Eight buildings managed by four metro Detroit companies — Detroit-based Bedrock Real Estate Services LLC, Southfield-based Farbman Group, Troy-based Summit Property Management Corp. and Livonia-based Schostak Bros. & Co. — won local TOBY (The Outstanding Building of the Year) awards from the Building Owners and Managers Association/Metro Detroit. The Parade Co. and the General Motors Foundation unveiled a new

float, “Innovation Workshop,” ahead of the 89th America’s Thanksgiving Day parade in Detroit. The 100-foot-long float features a futuristic Santa’s sleigh, handcrafted spinning elves and a 16-foot model of the GM Renaissance Center.

OTHER NEWS The often-targeted A-10 Thunderbolt aircraft could remain at Macomb County’s Selfridge Air National Guard Base and elsewhere for at least two to three years because the U.S. Senate passed a revised defense policy with its funding intact. A top U.S. Air Force official said its retirement may be delayed.

The Wayne County-owned Eloise Complex in Westland is on

the market for $1.5 million. The historic complex with 50 acres and multiple buildings is expected to sell in the first quarter of 2016. Regis Houze opened in Detroit’s New Center area as the first project of the Woodward Corridor Investment Fund managed by Arlington, Va.-based Capital Impact Partners, which brokered financing of the $4 million, 58-apartment site. Fifty-seven local art projects will share in $2.5 million in Knight Arts Challenge Detroit grants from the Miami-based John S. and James L. Knight Foundation. The grants represent the third round of the threeyear, $9 million arts challenge; the program will be renewed through 2018. The owners of Green Dot Stables and Johnny Noodle King in Southwest Detroit are opening The Huron Room, a restaurant and bar featuring Great Lakes fish dishes and Michigan-made beer, wine and spirits, Monday in Mexicantown. The Environmental Protection Agency said the federal government will pump $20 million into cleanup of the Clinton River watershed north of Detroit, an area of Harrison Township heavily polluted from industrial activity and development, AP reported. In his first news conference since being promoted within the front office a week before, Sheldon White, the Detroit Lions interim general manager, said “the best way to be a candidate” for the permanent position “is to win these games,” AP reported. The Lions had not commented on their pursuit of a new GM since team owner Martha Firestone Ford said a national search began last week. Ann Arbor-based Busch’s and other retailers are having to compete for supply for Thanksgiving after the worst U.S. outbreak of avian influenza destroyed almost 8 million turkeys earlier this year, Bloomberg reported. The Michigan Board of State Canvassers rejected a handwritten petition by Detroit pastor Angelo Scott Brown to remove Gov. Rick Snyder from office in the wake of controversy over the safety of drinking water in Flint, The Detroit News reported. The petition claimed Snyder was “culpable” for allowing “corrosive” river water to endanger Flint residents’ health.

OBITUARIES Richard Newsted, chairman of Southfield-based auto supplier Chassix Inc., died Nov. 5. He was 58. Newsted was a former president and CEO of Allen Park-based Meridian Automotive Systems Inc.

RUMBLINGS Gilbert event at Cobo raises $5M to fight nerve disease

uicken Loans Inc. founder and Chairman Dan Gilbert and wife Jennifer Gilbert raised $5 million earlier this month by hosting a third annual Detroit “beNeFit” to support the Children’s Tumor Foundation and other research programs targeting neurofibromatosis — or NF. The event was its most successful thus far, surpassing the $3 million raised last year. Some 1,600 people attended this year’s Dan Gilbert: Led fundraiser Nov. 7 fundraising effort. at Cobo Center, including LeBron James and most of the Cleveland Cavaliers players, coaching staff and front office, according to a spokesperson for Gilbert’s development company, Rock Ventures LLC. The Gilberts’ son Nicolas, 19, was diagnosed with NF, a genetic disorder, at about age 1. Since then, the couple has donated tens of millions of dollars to help fund research and treatments for the disease. Funds raised at beNeFit — the name is derived from the NF acronym — go mainly to the Children’s Tumor Foundation but also support other NF-related research.

Venture capital group honors Sooch, Arboretum Mina Sooch, CEO of Northvillebased Gemphire Therapeutics Inc., will be honored as entrepreneur of the year at the Michigan Venture Capital Association

annual awards dinner Nov. 30. Sooch is raising a $25 million venture capital round for Gemphire, which she joined in SepMina Sooch: tember 2014. She Tabbed as year’s previously raised top entrepreneur. a $59.5 million funding round in April 2014 for Plymouth Townshipbased ProNAi Therapeutics Inc., a company that raised $158.4 million in a June IPO this year. Taking honors for capital event of the year is Ann Arbor-based Arboretum Ventures LLC, which closed on a fourth fund of $220 million in September, the largest VC fund in state history. Dug Song, founder of Duo Security Inc. in Ann Arbor, will receive the 100 Award for passing the 100-employee mark. Song raised a Series C funding round of $30 million in April for that company. Getting a lifetime achievement award is Tom Porter, founder/general partner of Trillium Ventures in Ann

Arbor, who co-founded one of the state’s earliest VC firms, EDF Ventures, in 1987. The association will also present a new award, Up and Coming Investor of the Year, at the event at The Inn at St. John’s in Plymouth Township. The keynote speaker will be Gregg Kaplan, founder of Redbox Automated Retail LLC.

New support for Focus: Hope Detroit-based Focus: Hope says it has secured $4.36 million in cash donations, pledges and equipment from corporate funders. The new support came during its annual corporate leadership breakfast Nov. 9. The equipment donations, cash and pledges come in the wake of Focus: Hope idling its training programs for lack of funding. “More information about when new workforce development programs will start for machining, IT and more will be available in the future as the funds are received from these corporate donors and through other sources,” CEO and President William Jones Jr. said in a statement. Focus: Hope said in a release that the donations “will help support (its) goal of training more than 12,000 individuals over the next 15 years in the fields of manufacturing and information technologies.” The corporate gifts and pledges secured during the corporate breakfast were: A $2 million pledge of software and cash from Microsoft Corp., the majority of which is software, Jones said. A $1 million pledge and robotics equipment donation from Magna International Inc. for curriculum development and application at Focus: Hope’s Machinist Training Institute. A $500,000 pledge from Lear Corp.

A $500,000 pledge from the GM

Foundation.

A $360,000 donation from Ford

Motor Co.

Not a food truck – food from a truck A new fresh produce market opening Monday in Gratiot Central Meat Market offers both “an urban twist” in design and a new job training program to local veterans. Red Truck Fresh Produce, capitalized through a mix of public and private funds, is owned by Eastern Market Corp. and the Warren-based Community Growth Partnership. “Found” objects decorating the store, designed by consultant JGA Inc., include a red 1941 Ford truck and industrial lighting. Produce grown by Eastern Market’s wholesale market and Keep Growing Detroit growers fill the back of the vintage truck.

DBpageAD_DBpageAD.qxd 11/6/2015 10:15 AM Page 1

Congratulations to the winners of the Knight Arts Challenge! Find out about their winning arts ideas at KnightArts.org.

» » » » » » » » »

826michigan AFROTOPIA Adrienne Brown Alise Alousi Anders Ruhwald Arab American National Museum Assemble Sound Bangla School of Music Burnside Farm CAVE Cedric Tai Studios Carrie Morris Arts Production (CMAP) Chace Morris Cobo Center / Detroit Regional Convention Facility Authority Complex Movements Corktown Studios Corpus Cranbrook Art Museum Deonte Osayande Detroit Afrikan Music Institution Detroit Historical Society

» » » » » » » » » » » » »

» » » » » » »

Detroit Institute of Arts Detroit Riverfront Conservancy Detroit Youth Volume Foundation of Women in Hip-Hop Halima Cassells Hamtramck Free School Heritage Works InsideOut Literary Arts Project Interstate Arts Latin Americans for Social and Economic Development (LA SED) Marsha Music McEwen Studio / A(n) Office Michael Stone-Richards / Alexandrine St. Seminars and College for Creative Studies Michigan Theater Mosaic Youth Theatre of Detroit Museum of Contemporary Art Detroit Opera MODO Pewabic Pottery Popps Packing rootoftwo

» » » » » » » » » » » » » » » »

Scott Hocking Shara Worden Sidewalk Festival of Performing Arts Signal-Return Skyspace Detroit Sphinx Organization Spread Art Stephen Henderson / Marygrove College Stitching up Detroit / Grace in Action Stupor The Detroit Hair Experience The Prankster Press Third Wave Music Tiff Massey Vito Valdez and Katie Yamasaki YETI

The Knight Arts Challenge is a community-wide contest funding ideas that engage and enrich Detroit through the arts. Find out more at KnightArts.org. Sidewalk Festival of Performing Arts/ Cheryl Willard Photography

» » » » » » » » » » » »

KnightArts.org

@knightfdn

#knightarts

DBpageAD_DBpageAD.qxd 10/6/2015 11:53 AM Page 1

REMEMBER THE KID WHO ALWAYS JUMPED FIRST?

The one who taught you to always follow your heart. With this undaunted spirit, we set out to create a better life for everyone. And we’re leading the way as we seek out better medicine, technology and equity of care. That’s been our calling for 100 years. The world is ﬁnally catching up. HenryFord100.com