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Model citizens: Couple’s creations display city’s present, future, PAGE 18
JANUARY 4-10, 2016
Judge files to claim RiverWalk trademark Conservancy officials surprised at move; name is not protected By Robert Snell rsnell@crain.com
A Wayne County judge privately aims to snatch the Detroit RiverWalk name from the nonprofit group that built one of Detroit’s premier recreational spots and plans to profit off the brand name by peddling Tshirts, hats and hoodies. Judge Terrance Keith of Wayne County Probate Court filed two trademark applications last month for the names “The Detroit RiverWalk” and “RiverWalk Detroit,” according to the U.S. Patent and Trademark Office. The move surprised Detroit RiverFront Conservancy officials, who admit they failed to trademark the name after the RiverWalk debuted in 2007. The move to sell merchandise stamped with the RiverWalk name could mean, if unchallenged, the nonprofit loses a potential revenue stream at a time when the riverfront is poised for expansion. “I’d like to give a portion of the proceeds to them, but not all,” Keith said. “If I can use this to further benefit agencies, OK, and still make some money for myself, that is what I would like to do.” The conservancy, launched in 2003 to SEE RIVERWALK, PAGE 19
Million-dollar deals: Market for high-end homes sees best year in a decade By Vickie Elmer Special to Crain’s Detroit Business
On a cold, blustery day in late December, Kay Agney drove an outof-state buyer to see a few homes along Lakeshore Drive and elsewhere in Grosse Pointe. The buyers were eager to land a luxury home, and neither price tags
of $1.7 million nor icy roads slowed them down. The luxury-home market in metro Detroit shows no signs of slipping, according to sales data and agents such as Agney. “It’s been an incredible year for the upper end of the market,” said Agney, owner and broker at Higbie Maxon Agney Inc.
Dozens of homes in Birmingham, Bloomfield Hills, Rochester, Grosse Pointe and elsewhere in metro Detroit have sold for $1 million or more in the past 12 months — so many that the high-end home market is on track to have its best year in at least a decade, according to multiple listings service Realcomp II Ltd.
© Entire contents copyright 2016 by Crain Communications Inc. All rights reserved.
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Through October, 229 homes sold at or above the $1 million mark in metro Detroit, up from the 217 in all of 2014 and 211 in 2013, according to Realcomp data pulled for Crain’s Detroit Business. A record year for luxury homes occurred in 2004, when 254 milliondollar abodes changed hands through Realcomp. But marketing manager Francine Green noted that SEE HOMES, PAGE 20
By the numbers Average days on market: Homes priced in the $1 million-to$2 million range in metro Detroit were on the market an average of 76 days, steady with 2014’s sales pace of 76 days. Active listings: The number of homes for sale in the $1 millionand-up range totaled 597 in 2015, up from 478 in 2014. The increase is considered a barometer of an improving market as more optimistic sellers list properties.
This home at 1990 Oak Pointe Drive in Rochester Hills is for sale for $1.3 million.
New construction: Of the 106 permits issued in Oakland County from January 2012 through November 2015, the top three communities for new $1 million-plus construction are Bloomfield Township (37), Bloomfield Hills(20) and Franklin Village (16).
Sources: Realcomp II Ltd., Homebuilders Association of Southeastern Michigan
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MICHIGAN
BRIEFS
long as the industry adds 1,000 jobs. Switch, which has mega-data centers in Las Vegas and Reno, will make Michigan the site of its first facility in the eastern U.S. instead of other states considered, including New York and Ohio. Switch’s 1,000 clients include eBay and Amazon.
Latest on Flint water crisis: MDEQ director resigns
MIne’s future questioned after iron ore shipment drop
Michigan’s top environmental regulator stepped down last week in the wake of Flint’s drinking water crisis. The resignation of Depart ment of Environmental Quality Director Dan Wyant was accepted by Gov. Rick Snyder, who said he plans other personnel changes for the agency. In a written statement Dec. 29, Snyder apologized for what occurred in Flint, where elevated blood-lead levels have been found in children, The Associated Press reported. The crisis began when the city switched its supply but was not required to immediately keep corrosive river water from leaching lead from service pipes into residents’ homes. Exposure to lead can cause behavior problems and learning disabilities in young children. “I want the Flint community to know how very sorry I am that this has happened,” Snyder said. “And I want all Michigan citizens to know that we will learn from this experience, because Flint is not the only city that has an aging infrastructure.” Wyant’s resignation came more than two months after he acknowl-
edged that drinking water officials misinterpreted a federal rule governing a switch in a large water system’s source. A Flint water task force appointed by Snyder recently raised concerns about a lack of organization in the response effort, and early last week the state auditor concluded mistakes were made. Keith Creagh, head of the state Department of Natural Resources, will lead the DEQ on an interim basis, Snyder said. Wyant’s spokesman, Brad Wurfel, also resigned.
All Michigan data centers can get Switch tax break Gov. Rick Snyder signed into law tax breaks designed to ensure that a data center developer expands into West Michigan, The AP reported. The bills also apply to roughly 40 existing data centers in Michigan, so Nevada-based Switch has no competitive advantage when it opens a massive data center near Grand Rapids. Under the laws, data centers and their “co-located” clients will be exempt from paying sales and use taxes on computers, servers and other equipment for 20 years as
Iron ore shipments out of Marquette’s Upper Harbor are down dramatically, prompting fears about the future of that area’s Empire Mine. According to the Lake Carriers’ Association, roughly 460,000 tons of iron ore shipped out of Marquette in November, compared with about 732,000 tons in the same month in 2014. The average monthly shipment between 2010 and 2014 was about 791,000 tons. The Mining Journal in Marquette reported that a similar downward trend was seen throughout the Great Lakes, according to the association’s report. “It’s been a rough, brutal year, and our customer demand is down,” said a spokesman for Cliffs Natural Resources, which operates the Empire and Tilden mines in Marquette County. Meanwhile, shipments from Canadian seaway ports totaled 710,000 tons in November, up 29.3 percent from 2014.
MICH-CELLANEOUS Plastic microbeads used in soaps, body washes and other per-
sonal-care products will be phased out starting in 2017 under federal legislation co-sponsored by a Michigan lawmaker and newly signed by President Barack Obama, The AP reported. Lawmakers said the bill — co-sponsored by Reps. Fred Upton, the St. Joseph Republican who heads the House Energy and Commerce Committee, and Frank Pallone, D-N.J. — was needed to protect fish and wildlife that are ingesting the tiny beads after they are rinsed down drains and discharged into lakes and rivers. Small grants are available to local governments that want to help clean up Michigan’s rivers, streams and creeks, The AP reported. The state Department of Environmental Quality and the Great Lakes Commission plan to divide $25,000 among selected applicants who are expected to match at least 25 percent of the money. The local agencies can team up with nonprofit organizations or other volunteer groups. Application deadline is Jan. 25; winners will be announced in April. A new Michigan law permits
INSIDE THIS ISSUE BANKRUPTCIES . . . . . . . . . . . . . . . . . 19 CALENDAR . . . . . . . . . . . . . . . . . . . . . . . 17 CAPITOL BRIEFINGS . . . . . . . . . . . . . . 4 CLASSIFIED ADS . . . . . . . . . . . . . . . . 17 DEALS & DETAILS . . . . . . . . . . . . . . . . 17 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 6 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 16 RUMBLINGS . . . . . . . . . . . . . . . . . . . . 22 WEEK ON THE WEB . . . . . . . . . . . . . . 22
COMPANY INDEX: SEE PAGE 20 arenas, camps and other venues to stock epinephrine injectors to treat allergic reactions, The AP reported. The newly signed measure permits doctors to prescribe and pharmacists to dispense EpiPens to youth sports leagues, amusement parks, religious institutions and other places. The proposed law also establishes storage and training requirements, and limits liability from lawsuits. The state action follows a 2013 law requiring every public school to have EpiPens.
Correction A story on Page 3 of the Dec. 14 issue about development in Detroit’s Eastern Market should have attributed information from Boydell Development Corp. to Senior Project Manager Eric Novack. An incorrect name was used. Also, a $550,000 grant from the Kresge Foundation will help support Eastern Market Corp. operations, not just those of a new development-oriented entity.
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Big City,
BIG DEALS with Kirk Pinho Kirk covers real estate, Oakland and Macomb counties. TWEET @KIRKPINHOCDB
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Saline firm finds the money’s where the mouths are Akervall Technologies takes bite of mouthguard market By Tom Henderson
SISUGUARD.COM
thenderson@crain.com
The Aero Guard, made by Akervall, is an athlete’s mouthguard designed to be thin and breathable.
If you build a better mouthguard, the world will beat a path to your door. Or, at least send you an email and ask you to become a supplier. Akervall Technologies Inc. of Saline has built a lighter, thinner, stronger mouthguard, both for athletes and for those who grind their teeth while sleeping. So far, the innovation is paying off. The company was officially founded in 2008 but started getting traction in 2010 after taking part in an entrepreneurial boot camp hosted by Ann Arbor Spark. It had revenue of $1.4 million in 2014 and $2.6 million in 2015 and projects revenue of $4.2 million in 2016 that will grow to $12.6 million in 2018. CCM , the iconic Canadian brand that has been making skates for decades for everyone from peewees to National Hockey League players, has been selling Akervall’s mouthguards since March as a result of the retail equivalent of a man-bites-dog story — an executive in Montreal heard about the Akervall mouthguard and sent the company an email introducing himself and saying he might want to be a customer. Later this month, 2,100 of the 8,000 Walgreens drugstores in the U.S. will start carrying the mouthpieces, with a national rollout to follow. Details of a rollout in another national drug chain are expected to
be finalized soon. And, in August, Akervall was named the official mouthguard of the National Lacrosse League. Akervall Technologies was named the top company in the advanced materials category at the last two recent Accelerate Michigan Innovation events at Orchestra Hall in Detroit, winning $25,000 each time.
Making connections Unlike most of her fellow finalists at the competition, President and co-founder Sassa Akervall wasn’t looking for investments from angel investors or venture capitalists. Akervall is cash-flow positive and capable of funding growth from revenue. Dan Asma is president of Warrenbased McKeon Products Inc. , which has long sold its Mack’s brand of hearing-protection and ear-related products in drugstores around the U.S. and in 70 countries. He said he heard about Akervall’s mouthpieces through a friend of his SEE AKERVALL, PAGE 21
MUST READS OF THE WEEK
Energy law’s still got the power Lawmakers haven’t adopted any updates, so key provisions in Michigan’s energy law continue into the new year. Page 4
Filling a cozy housing niche “Less is more” seems to be the adage for those planning micro apartments downtown and in the trendy suburbs. Page 7
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LANSING — Key provisions in Michigan’s energy law will continue into the new year, despite requirements that electric utilities meet renewable energy and efficiency targets by the end of 2015. Even though lawmakers haven’t adopted bills to update the state’s 7year-old energy policy, those standards don’t sunset — meaning utilities only will have to maintain current benchmarks unless or until a new law is signed. Without changes to policy, Michigan’s standards for renewable energy and energy efficiency don’t increase; utilities won’t be required to meet stricter goals than what they’ve already achieved. Under current law, utilities have to generate at least 10 percent of their electricity from renewable sources — a target they’ve met — and to offer energy efficiency programs to customers with savings equal to 1 percent of total electric sales. “Life continues on,” said Valerie Brader, executive director of the Michigan Agency for Energy , created in 2015 by executive order from Gov. Rick Snyder to administer the state’s energy programs. “I’ve heard people say, ‘So that means it expires.’ I just want everyone to be very clear: Absent a repeal, it remains there so the utility could never fall below 10 percent as calculated in the law going forward,” she said. “While it expires in the sense that there’s no new requirement, it does not actually expire from a legal sense.” Yet Snyder and other interested groups, including utilities, are calling on the Legislature to adopt changes to the law, known as Public Act 295 of 2008. The administration wants a statewide policy to help guide development of Michigan’s plan to comply with new federal carbon rules, the first draft of which is due next September. The state is tasked with meeting an emissions reduction target of 31 percent by 2030, Brader said. Utilities also are taking several coal-fired plants offline this year and have said they want more certainty for planning. The Legislature adjourned until mid-January without taking action on energy. In the House, two bills sponsored by Rep. Aric Nesbitt, RLawton, await a vote in the full chamber. In the Senate, the energy and technology committee continues to work with bills sponsored by Sens. Mike Nofs, R-Battle Creek, and John Proos, R-St. Joseph. Renewable energy and energy efficiency are among the hotly contested issues. The bills would eliminate both mandates. Utilities, including Detroit’s DTE Energy Co . and Jackson-based Con sumers Energy , say the cost has dropped to build renewable projects, and they’ll have no choice but to pursue them to comply with new federal carbon emissions rules known as the Clean Power Plan. DTE recently said it plans to build two solar projects near Lapeer that can generate 45 megawatts. Utility spokesman John Austerberry didn’t
LINDSAY VANHULLE Capitol Briefings lvanhulle@crain.com Twitter: @LindsayVanHulle immediately know how much that project would contribute above its 10 percent renewable minimum, but said it provides a cushion to DTE’s target should customer load increase. Austerberry said DTE also is seeking proposals from prospective vendors to continue efficiency programs through at least 2018, following the expiration of contracts later this year. “Energy optimization makes a lot of sense. It’s certainly one of the least-cost options when you look at other generation sources, because when you save energy — when your customers are saving energy — you don’t need to provide additional
generation,” Austerberry said. The utilities and Snyder want to end the mandates in favor of a longer-term planning process known as integrated resource planning, as proposed in the legislation. But proponents of the mandates say utilities would have no incentive to continue renewable or efficiency programs without the requirement they meet specific standards. The Michigan Public Service Com mission , in a report this fall, said electric utilities’ spending on programs to reduce energy consumption in 2014 should save customers at least $1.1 billion over the duration of those programs. “Clearly, no bill is better than a bad bill, because the existing structure stays in place,” said Martin Kushler, a senior fellow with the Washington, D.C.-based American Council for an Energy-Efficient Economy. “The existing law is not too bad. There’s some important ways it could be improved,” he said — namely, upping Michigan’s energy waste reduction standard to at least 1.5 percent. 䡲
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CRAIN’S DETROIT BUSINESS
OPINION Gun data should help form smarter policy A
nthony Tolson, 33, had just performed at a church service and was heading to visit family when he was shot to death during a carjacking outside a Detroit party store. Seven-year-old Chanell Berry was playing with Christmas presents when she was shot and killed in a drive-by shooting that stemmed from an argument among adults a couple of days after Christmas. Whether it’s the mass This is a business shootings that are too-freand economic quent headlines around issue as much as a the country or crimes in our own back yards, viosocietal lence by firearms seems issue. epidemic. And So what does one do with an epidemic? Treat it like a it affects public health crisis, suggested our sister publicathe tion, Modern Healthcare, in Detroit a cover story and editorial last month. We agree. region — Consider the numbers reand the ported by Modern Healthcountry. care: about 32,000 people die of gunshot wounds a year — on par with vehicle accidents. The Children’s Safety Network pegs the financial cost at $174 billion a year for medical and mental health care, criminal justice costs, wage losses and related costs. This is a business and economic issue as much as a societal issue. And it affects the Detroit region — and the country. Though many people cast the issue as a sacred gun rights matter, consider the parallel to public health reforms in automotive safety practices. Seatbelts were once considered an infringement on personal rights, but lawmakers began to require their installation and their use to curb highway deaths. Airbags and other safety designs followed. Detroit Police Chief James Craig put it this way after the death of Chanell Berry: “People get to argue, but they don’t get to use this kind of response to resolve whatever their differences are. … It seems to me — and this is not a criticism, this is factual — people are desensitized. They’ve come to accept a level of violence. ... So it’s not just, ‘Detroit police, what are you doing?’ It’s ‘What are we going to do? When are we going to stand up and say enough is enough?’” The public debate needs facts, not emotion. How do shooters get guns? Can firearms be made safer to prevent the kinds of tragedies we’ve seen with children finding loaded weapons? Can revamped policies or agencies address people with mental health issues or anger management problems earlier — heading off many violent incidents at the pass? Answering such questions with data is a start. The last federally funded report on gun violence by the Centers for Disease Control and Prevention was released in 1996. All lives matter. So why not invest in the research that could lead to smart policy?
A life filled with biz news …and newsrooms I
grew up in a newsroom. My father, Don Goodaker Sr., was a newspaper photographer in southern Indiana for more than 35 years, first for the Evansville Press and later for the Evansville Courier. I got to hang around newsrooms when wire service machines were clanking, pictures were developed from film seemingly by magic and a child could bang away without damage on the Underwood typewriters then used by reporters to write their stories. Pressroom wizards set my name in hot type and, when Dad wasn’t listening, told me inappropriate jokes while the ashes on their cigars hung precariously close to my face. Honestly, who wouldn’t want to become a journalist after all that? I certainly did. And because of those early experiences and others that followed, it has been my good fortune to be present for all but eight months of Crain’s Detroit Business’ nearly 31year existence, with two decades or
CINDY GOODAKER Executive editor so of that running the newsroom. It’s a road I feel remarkably lucky to have traveled. But it’s time to explore other paths and perhaps clear a few new ones. And so, as the new year rings in, with metaphorical searchlight and chainsaw in hand, I am going to see what those might be. I take with me many good relationships, memories and tales from the front. I leave behind a lot of gratitude, particularly to Keith Crain, whose vision of a business newspaper that did not cover Ford, GM or Chrysler led me to Crain’s in September 1985. It’s worth repeating that Keith’s
idea was considered a nonstarter by pretty much everyone he talked to. Most people did not believe that a business community outside the automakers existed beyond a few publicly traded companies. But, as Keith also has often said, innovation doesn’t happen in focus groups. Other lessons gleaned over the years: The people you work with every day matter. Good people who are smart and have a sense of humor are the best. Persistence matters. Look at Midtown, which became an “overnight” success after two decades of hard work. Curiosity may kill the cat, but you’ll never learn anything without it. Facts and truth are related, but are not the same thing. Everything needs context. And finally, metro Detroit right now is the place to be. I wouldn’t want to live anywhere else. And that’s the truth.
TALK ON THE WEB Re: How Detroit riverfront lost out on Gilbert’s Quicken HQ Moving to the heart of downtown as Quicken Loans did was infi -
Reader responses to stories and blogs that appeared on Crain’s website. Comments may be edited for length and clarity.
nitely better for downtown’s health
than moving to the riverfront, where workers would connect much less with the CBD (and we would not have today’s improved foot traffic). Mixed-use tall buildings with a heavy residential component are now appropriate along the riverfront — make it a better version of Manhattan’s Battery Park City. BobNB
I love stories like this about Detroit. Skepticalreason
Re: Another offer rejected in St. John Providence CRNA talks Emergency room staff, radiology, food service, etc., have all become contracted employees in recent years. What makes the MI68 so special? Why do they deserve this much publicity when hospital staff has gone through this for years and have had seamless transitions?
Providence will survive without the bad apples and will continue to provide the quality of care it always has. EVERYONE is replaceable. NoName
Re: Bagger Dave’s downtown Detroit location, 7 others closed I like the location and interior layout of the restaurant in East Lansing. The price to take the kids is pretty high, though. The market re search in Indiana must have left lots to be desired. Eric Schertzing
Re: Detroit apartment renters give city flunking grade,survey finds Interesting article. I’d be interested to know how large the sample size was and where these “registered users” are living, considering it’s practically impossible to get anything downtown or in Midtown. But
then again, there are two different De troit experiences, aren’t there? Mr. 8149
Re: 2015 saw big changes in Detroit media A great deal of change in one year, well-chronicled here. Going to miss hearing from many of these voic es and can only hope that the
shakeup in the media world does not lead to the evaporation of the Fourth Estate and the loss of the vital role it plays in keeping us informed. Jeff Stoltman
Re: Ex-Lions QB’s essay paints portrait of team’s internal rot Joey Harrington: Another blessed American who got very rich based on nothing. Carolyn Mazuriewicz
Re: Judge sides with city of Flint over water shutoffs The people of Flint should not be forced to pay for poisoned water. JestersTear
Detroit RiverWalk: No Quicken? No problem.
DETROIT RIVERFRONT CONSERVANCY
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Micro apartments fill low-cost housing niche floor, said Bob Kraemer, principal of Detroit-based architecture firm Kraemer Design Group PLC, the architecture firm on Gilbert’s project, which is expected to begin construction in the first quarter this year (and which will have kitchens in each unit). Therefore, square footage that would normally be consumed by an in-unit cooking and eating area is reserved for other uses, making the smaller space more livable than might otherwise be the case. In addition, desktop computers are being replaced by laptops and tablets. Countertop-depth cooking appliances are easily available. Wallmounted flat-screen televisions are replacing TVs over a foot in depth. Old stereo systems are being tossed in favor of devices that fit in your jeans pocket. In short, square footage becomes less important, particularly to younger generations. “Many of these millennials are living minimally,” Novack said. “They are focusing more on work and play. And let’s face it, Detroit has a lot to offer this generation: good job prospects and an entertainment district that is new and exciting.” But don’t get too bullish on the demand for micro apartments, said Austin Black II, president of City Living Detroit, a Detroit-based real estate brokerage firm. The demand for more traditional-sized rental
By Kirk Pinho kpinho@crain.com
Dan Gilbert and other developers are taking the “less is more” adage to heart with the planned construction of hundreds of new “micro apartments” in the downtown core and the trendy suburbs. Whether it’s for proximity to a job or ease of access to specific neighborhood amenities or good, oldfashioned cost, renters bent on being near a particular location, such as Capitol Park downtown and around the nightlife of downtown Royal Oak, can expect to find smaller units coming with much more affordable lease rates than a typical studio, one- or two-bedroom apartment in the same area. Defining what is and what isn’t a micro apartment can be tricky. For example, the Urban Land Institute notes that major cities where micro apartments are more prevalent — New York City, Seattle, San Francisco, Boston, Dallas and Washington, D.C., for example — all have varying definitions established under local housing rules. The ULI, however, defines a micro apartment as a small apartment with specific designs making it appear larger than its size, generally 20 to 30 percent smaller than conventional studios in a given city and ranging from 280 to 450 square feet. Some smaller micro units under 350 square feet include built-in storage units and things like Murphy beds, convertible tables and hideaway kitchen modules, according to ULI. Whether it’s Gilbert’s project downtown or Clawson-based Amber Properties Co .’s plans for new micro units in Royal Oak and Troy, location near employment and entertainment hot spots is key. “With most suburban neighborhoods, you’re looking for more longterm residents, but in your urban locations like this, their lifestyle is outside their apartment,” said Kevin Dillon, partner at the Troy office of Phoenix-based Berkadia. “You’ll find these much more acceptable in your high-income, high-education neighborhoods.” More commonly found in most established — and more expensive — urban areas like New York City, San Francisco, Boston and Miami, at least four new developments would bring the tiny units, generally in the range of 300 square feet each, to Detroit and Oakland County renters. Much of their appeal is cost. For example, near Gilbert’s planned 219unit development of micro apartments at the corner of West Grand River Avenue and Griswold Street, units ranging from 623 to 1,290 square feet in The Albert are renting for $1,200 to $2,500 per month, depending on size. But the budget-conscious or Capitol Park living could likely rent a smaller unit, with around 300 square feet, for about $700 per month in the planned project at the site of the former Grind strip club, which was damaged in a February 2014 fire and is slated for demolition.
The planned Amber Studios and Lofts in Troy. You can also look for a pair of new projects by Amber Properties, which has 27 properties with about 1,300 units in its multifamily residential portfolio. The first, the Amber on 11 Studios and Lofts in Royal Oak, would have 36 units ranging from 275 to 356 square feet renting for $845 to $1,125 per month. Construction is expected to begin this spring at the northeast corner of North Rembrandt Avenue and East 11 Mile Road, with occupancy expected in spring 2017. The second Amber Properties planned “micro apartment” development is the Amber Studios and Lofts in Troy, with 35 units ranging from 355 to 486 square feet and renting for $895 to $1,275 per month. Construction is expected to begin in the fall this year on Livernois Road north of Maple Road, said
Jerry Amber, vice president of Clawson-based Amber Properties. The project is expected to be complete in fall 2017. Also in greater downtown, a project to add about 200 micro apartments by Dennis Kefallinos’ Detroitbased Boydell Development Co. in a former Wayne State Universit y pharmacy school building is progressing, with new windows being added to the upper floors of the former Shapero Hall at 1010 Rivard St. near Lafayette Park, according to Eric Novack, senior project manager for Boydell. Aside from size, another thing that can separate a micro apartment from a traditional studio apartment is the lack of a kitchen. In micro apartment developments without in-unit kitchens, renters share a kitchen with others on the same
housing remains strong in the central business district and elsewhere throughout the suburbs, even among millennials, he said. Demand is strong partly because many are saddled with student loan debt and monthly rent payments that make it difficult for them to save for a mortgage down payment, he said. “A lot of it is that many people don’t have the ability to jump into that (home-ownership) space,” he said. Amber, vice president of Amber Properties, said that while micro apartments fill a niche in Detroit — and elsewhere in the Midwest, where they are coming to market in places like Kalamazoo; Des Moines, Iowa; and Columbus, Ohio — there won’t be a mass exodus of renters from spacious one- and two-bedroom units to the smaller apartments. “It comes down to what is sufficient for their needs,” he said. “We are not disparaging the larger units. We are not saying those units aren’t great. But there are people that don’t want a roommate, want a simple living, and don’t have a lot of belongings.” The micro units, Amber said, are just the right fit for them. 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB
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In Honor of Lear Corporation’s Matthew J. Simoncini Being Named a 2015 Newsmaker of the Year The Lear Corporation team of more than 135,000 employees in 35 countries extends its congratulations and gratitude to Matt Simoncini for his leadership as President, Chief Executive Officer and a member of the Lear Board of Directors. Under Mr. Simoncini’s leadership, Lear has added Guilford Performance Textiles, Eagle Ottawa Premium Leather, intellectual property from Autonet Mobile and Arada Systems to our portfolio of industry-leading Seating and Electrical products. Lear has never been in a stronger competitive position. We look forward to the future with the opening of new Centers of Excellence for Craftsmanship and Connectivity in Southfield, Michigan and a new Innovation & Design Center in Detroit next year. The Company is uniquely positioned to offer the best designs and highest level of craftsmanship in Seating, and to capitalize on the connectivity mega-trend in Electrical.
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THE ILITCHES Honors given for entertainment hub work and philanthropy By Bill Shea bshea@crain.com
LOOKING AHEAD What the Ilitches (Mike Ilitch, top, and Chris Ilitch) expect to focus on in 2016 ■ Continue marketing for retail, office and residential developments in The District Detroit. ■ Construction of the new Little Caesars headquarters. ■ Sign and announce additional sponsorships for the Detroit Red Wings arena. ■ Proceed with additional planning, development and zoning for the Woodward Square neighborhood (which encompasses the arena, entertainment concourse and more).
Mike Ilitch in 2015 upped the ante on his big bet on downtown Detroit. His vision, orchestrated day to day by son Chris Ilitch, was introduced in the summer of 2014 as a sprawling, 50-block, mixed-use redevelopment that would stitch together downtown and Midtown and be anchored by a state-of-the-art, 20,000-seat arena for the Detroit Red Wings. This past year, the elder Ilitch embossed that plan, known as The Dis trict Detroit, by adding $95 million in additional spending to the arena’s original $527 million price tag, and pledged $40 million for a new Wayne State University business school that will be built next to the hockey venue. The Mike Ilitch School of Business, expected to open sometime in 2018, will be a 120,000-square-foot multistory building of classrooms, offices and other spaces for about 4,500 students. Wayne State will seek another $15 million to cover the full cost of the facility, and $5 million of the Ilitch donation is earmarked for an endowment. “That (Ilitch donation) is really important for us because it moves us much closer to the heart of economic activity in Detroit,” said Robert Forsythe, dean of the Wayne State business school. “If we do things the way we need to, it will benefit our students, our faculty and the city of Detroit. … We’ve been branding ourselves as Detroit’s business school, and adding the Ilitch name to that will only en-
A conceptual rendering shows the future Woodward Square that is part of The District Detroit.
hance and further those efforts.” Ilitch and wife Marian made their fortune from the Little Caesars pizza chain, and Chris Ilitch is both the public face of the effort and the quarterback behind the scenes who handles not only the various business functions but also the details of The District Detroit. The younger Ilitch is president and CEO of Ilitch Holdings Inc. The centerpiece of the family’s efforts is the arena, which is scheduled to open in time for the 2017-18 hockey season. Its footprint will be on nearly 13 acres of mostly vacant or derelict land acquired for about $50 million west of Woodward Avenue and north of the Fisher Freeway. The arena’s concrete-and-steel skeleton began to rise in 2015 from the 40-foot-deep hole excavated as the building’s lower seating bowl, and it will begin to take shape as work continues throughout the winter. The project’s goal was to have at least 30 percent of arena contracts go to local companies, and the total is currently at 65 percent, the Ilitches have said. Michigan businesses have earned 95 percent of the value of all contracts awarded so far. The $95 million in additional spending on the arena will include an underground practice facility, an outdoor plaza featuring a massive video wall, more green spaces, and a players club for fans that will include a glass tunnel between the ice and locker room in which Red Wings will pass. While challenges still lay ahead for
the District Detroit project — among them navigating a complex city approval process for various projects and ensuring that the overall district has a unified feel — the project is well on its way toward a game-changing alteration of the downtown landscape, said Michael Cooper, president and managing principal of Southfield-based architecture firm Harley Ellis Devereaux Corp.
Cooper said the Ilitch family has always maintained its commitment to the city of Detroit, even during times “when very few people were committed.” “Anytime there is a revitalization effort, you always need really big, grand things to happen, in addition to the smaller, everyday kind of things. And the large and the grand really helps pull in the regular, everyday investors,” he said. Olympia Development of Michigan , the Ilitches’ real estate unit, is picking up all costs for the project beyond $250 million in bonds sold to finance some of the construction. The ancillary development around the arena will be entirely privately funded. The Ilitches also made progress in 2015 on the arena’s possibilities of generating revenue (all of which they will keep under the deal inked with the city Downtown Development Au thority, which ultimately will own the building). Olympia has, so far, five-year corporate sponsorship deals, for undisclosed amounts, with Meijer Inc . and St. Joseph Mercy Health System for the new arena.
A Page 1 package in the Aug. 31 edition of Crain’s marked the end of the prep work at the new Detroit Red Wings arena site. Additionally, the arena’s 52 corporate suites and all but three of the 22 mini-suites have been sold. Corporate suites lease for more than $300,000 a year and the leases are for seven to 10 years, which is at least $109 million in revenue. The hockey arena isn’t the only major brick-and-mortar project rising from the district in 2016: Work will begin this year on an eight-story, 205,000-square-foot headquarters for Little Caesars at Woodward Avenue and Columbia Street next to its current site inside the Fox Theatre. The Little Caesars Fox Office Center also will undergo a renovation. The headquarters, which will include retail, will be built on a vacant lot and connect to the Fox at 2211 Woodward Ave. through a pedestrian bridge. Crain’s has estimated the cost could be as much as $71 million. The Ilitches can afford their plans thanks to business holdings that had $3.3 billion in combined revenue in 2014, and Forbes estimates Mike and wife Marian themselves to be worth $5.5 million. Marian Ilitch owns MotorCity Casi no Hotel , and Mike Ilitch independently owns the Detroit Tigers because of Major League Baseball’s rules against casino cross-ownership. They jointly own the hockey team. Kirk Pinho contributed to this story.
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TONYA ALLEN By Chad Halcom chalcom@crain.com
Tonya Allen brought visibility and advanced the conversation on educational reform proposals in Michigan during 2015, as co-chair of the Coali -
LOOKING AHEAD Allen’s outlook for 2016
Grow Detroit’s Young Talent, which has averaged fewer than 3,500 students and people ages 14-24 in summer jobs in past years, set a new goal of 5,000 students for 2015 and exceeded it, at roughly 5,600 hires. That could grow to a goal of 8,000 this year. After the Legislature reconvenes Jan. 13, the Coalition for the Future of Detroit Schoolchildren
expects to renew its call for a bill package to address reform in its reports from 2015, such as retiring Detroit Public Schools’ debt.
New responsibilities will include chairing a youthfocused committee of the revised Detroit Workforce Development Board, which is seeking to land jobs for 100,000 job-seeking or detached city residents.
tion for the Future of Detroit School children.
But it was just one of several efforts to cultivate training for young Detroiters that she expects to escalate in 2016. Allen, president and CEO of the Detroit-based Skillman Foundation since January 2014, said one of her high points this year — besides seeing the Grow Detroit’s Young Talent program expand by more than 2,000 new jobs — was a meeting with one of its participants. The Detroit teen was so excited about a job he obtained through the ongoing initiative that he applied for, and obtained, two more on his own. “He was giving a lot of that income to his family, and he appreciated the impact so much to his bottom line, he was doing all kinds of things to make it possible to do more,” she said. The new education coalition, made up of businesspeople, nonprofit leaders and labor groups, was organized in late 2014. Last spring, it published a report calling for several reforms in K-12 education within the city. The group will renew a call for new attention from the Legislature in 2016, but Allen said Lansing isn’t the
only answer. The organization wants better quality controls in charter schools, a new Detroit Education Commission responsible for opening, closing and picking locations for schools in the city, and an immediate return to elected leadership of the public school system. It also calls for the dissolution of the Education Achievement Au thority established in 2011 that oversees 15 low-performing Detroit schools. Group members so far have not seen the legislative support they hoped for in Lansing for measures to help retire Detroit Public Schools ’ crippling $515 million debt. But Allen said some improvements can also be made administratively, and through culture change. “We also think our role can include seeing to those recommendations that can get executed regardless of the Legislature, in terms of a set of initiatives that are voluntary and collaborative, with some metrics that we set and be made accountable to meeting,” she said. “Because it’s going to require both structural change — from the Legislature — and a practices change.” Among the administrative changes, she said, is getting charter school authorizers like Michigan universities to crack down on schools
JACK ARONSON By Sherri Welch swelch@crain.com
It’s not every day a Fortune 500 company looks your way. Still, Garden Fresh Gourmet founders Jack Aronson and his wife, Annette, had seen interest in their company even before Campbell Soup Co . came along. Among others, PepsiCo had courted the Ferndale company. But none of the companies were the right fit — until the couple visited Campbell Soup Co. ’s Bolthouse Farms operation in California. There, they found a culture that mirrored the one they had created at Garden Fresh, a fresh salsa, hummus, dips and tortilla chips company they launched in 1997 from their former Ferndale restaurant, the Clubhouse Bar-B-Q. What sealed the $231 million deal in June was Campbell President and CEO Denise Morrison’s promise that it would keep the Garden Fresh operations in Ferndale, retain its 450 employees, make investments and never change a recipe without the couple’s approval, said Jack Aronson, 62. As the deal neared closing, Aronson and his wife met with each of the In a Second Stage report from the Oct. 12, 2015 edition of Crain’s,Jack Aronson talked about the Garden Fresh sale.
Cultivating Detroit’s young talent becomes a passion for leader of new education coalition
450 employees at Garden Fresh and offered them a bonus payable upon the closing. They quietly gave their employees millions of dollars. The gesture “made the employees excited about the deal closing, as opposed to dreading it,” said Mike Griffin, a partner at Garden Fresh and at the couple’s stuffed burger/fresh meat business, Clinton Townshipbased Great Fresh Foods LLC. “They earned it,” Aronson said. “We certainly wanted to show them our appreciation.” Despite the sale of Garden Fresh to Campbell, Aronson still has a full plate. He remains an adviser to the Garden Fresh Gourmet business, helping develop and test new recipes for new products like a fresh gazpacho and providing insights on small-business operations and how to apply those ideas at Campbell, said Regan
A story in the Dec. 15, 2014 edition of Crain’s set the stage for the year to come for the Coalition for the Future of Detroit Schoolchildren.
whose students underperform on academic achievement tests. Cultural changes could include building a community focus on monitoring school performance and holding schools individually accountable. “There is no reason why we are keeping any low-performing schools open. “It’s a responsibility of charter school operators, the EAA and the district to hold themselves and their schools accountable...” she said. Clark Durant, co-founder and former CEO of Cornerstone Schools and a co-chair of an academics subcommittee for the Coalition, said Allen has been very focused on learning and student outcomes and has attended many of the committee meet-
ings herself just to hear members’ ideas. Allen is also a Cornerstone board member. “She’s been a very active chairman, combining both the elements of delegation as a leader and a great deal of vested personal interest,” he said. “But she cares very much about kids no matter where they are in school, a charter or a school district or private school.” Grow Detroit’s Young Talent, a collaboration between the foundation community, City Connect and Detroit Employment Solutions Corp. that Skillman helped to launch several years ago, grew from placing fewer than 3,500 young Detroiters ages 14-24 in years past to more than 5,600 in 2015. Allen said the goal is to place 8,000 in summer jobs this year — a reasonable goal, she said, since cities like Baltimore and Philadelphia have roughly doubled that total. She also sits on Detroit’s newly reconstituted Workforce Development Board and said she hopes to cultivate more jobs training and initiatives.
Garden Fresh Gourmet founder finds ideal ingredients for company’s sale
Phillips, head of communications and public relations for the Campbell Fresh division, in an email. He’s also continuing to work with business partners to grow Great Fresh. The 3-year-old company planned in December to launch its new “Clean Planet Foods” line of fresh, cooked meats that are processed with high pressures like Garden Fresh salsa and will keep in the refrigerator for up to 60 days. Aronson spends about five hours each week on efforts to expand Great Fresh; the rest of the time he’s focused on efforts to pay it forward. At the top of his list is the relaunch in the spring of the nonprofit Startup Engine Entrepreneur Depot incubator for small food manufacturers in Ferndale. Founded by Garden Fresh and Eastern Market Corp ., SEED’s original manufacturing equipment, and the space that housed it, was transferred
to Forgotten Harvest in Oak Park after the sale of Garden Fresh. But soon, the equipment will be brought back to Ferndale to assist food startups including Detroit Water Ice Factory, an Italian ice company that Detroit Free Press columnist Mitch Albom is launching to benefit nonprofit S.A.Y. Detroit. Aronson is also continuing to negotiate with other, unnamed business partners to bring a cold-water, high-pressure processing line to Ferndale. The $7 million to $8 million investment would fund the state’s first such line and give local fresh food manufacturers a more affordable option for using the technology. Aronson expects the line to be operational within six months to a year. “We’re trying to be a part of the food entrepreneur spirit here in Michigan ... to give (food startups) an opportunity to manufacture their products and find out if they are viable before they go out and buy the farm,” he said. Aronson and his wife also have quietly donated about $25 million to needs near and far, for causes that provide housing, support for kids, literacy and other services. They created a foundation in December, the Artichoke Garlic Foundation (named after the first flavor of salsa they made), funding it with $10 million.
LOOKING AHEAD Aronson’s predictions for 2016 and beyond
Michigan’s food processing ability will double in the next five years, led by small food companies. All-natural, artisan foods will continue to grow in popularity with rising consumer demand for fresh produce, deli and dairy items. Revenue for his Clinton Township-based Great Fresh Foods LLC (known for stuffed burgers) will triple in 2016, with the launch of the “Clean Planet Foods” line of fresh, cooked meats that will keep in the refrigerator for up to 60 days.
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JON COTTON
Meridian president oversees member, space growth for family-founded health company
By Jay Greene jgreene@crain.com
LOOKING AHEAD Cotton’s expectations for 2016
Nearly double Meridian’s Medicaid members to 1.2 million, double pharmacy benefit members to 2 million, increase Medicare members to 25,000 and add 400 employees to have a workforce of more than 2,500.
Continued consolidation of smaller, independent health plans.
Because of rising costs, Medicare could move in the next 10 years to a voucher system or privatization with about 30 percent of enrollment now in private managed care plans.
Continued movement to value-based contracting to reward quality and reduce overuse of services.
Hospital mergers will continue.
Jon Cotton had a busy year, overseeing Meridian Health Plan Inc. ’s 58 percent revenue growth to $3 billion, a 42 percent increase in employees to 2,100 and a move into new corporate headquarters at One Campus Martius in downtown Detroit. But Cotton, 38, president and COO of Meridian Health Plan of Michigan, also is enjoying the moment. “It is hard to think we’d be as successful as we are,” said Cotton, one of three siblings in the family business started by his father, CEO David Cotton. The elder Cotton, a gynecologist, founded Meridian in 1997 with his wife, Shery. Siblings include twin brother Sean and younger brother Michael. “Members want to choose our health plan, and customers like the story we have to tell,” said Cotton. “We deliver on our promises.” Even though Troy-based Molina Healthcare of Michigan made two acquisitions last year to add about 180,000 members, Cotton said Meridian will still be the largest Medicaid HMO in Michigan with 450,000 members. “They will not surpass us,” Cotton promised. But even Cotton acknowledged Meridian dodged a bullet of sorts two years ago when it was planning to
A headline from the June 15, 2015 issue of Crain’s tells of Meridian’s growth. build its own new $111 million, 16story, 320,000-square-foot corporate headquarters on 2 acres off Monroe and Woodward avenues. “Thank God it never happened. We delayed our decision” and bought the (old Compuware) building at One Campus Martius in “a solid deal” with a “discount on the price,” he said. “We would have been out of space with that (original) building.” In late 2014, Meridian and Dan Gilbert’s Bedrock Real Estate Services jointly purchased the 1.1 millionsquare-foot former Compuware building for an estimated $140 million. Since September, Meridian has been moving into its new headquarters, occupying five floors and about 300,000 square feet. But Cotton said employee growth necessitated keeping three floors at One Kennedy Square at 777 Woodward. “We initially thought the entire company would fit into the new headquarters,” Cotton said. “We
JAN GARFINKLE By Tom Henderson thenderson@crain.com
“Arboretum just keeps knocking it out of the park” has become a cliché in local venture capital circles. Arguably the most successful VC firm in the state in recent years, Ann Arbor-based Arboretum Ventures LLC, founded in 2002 by managing director Jan Garfinkle, has been making big headlines since 2008, when one of its portfolio companies, HealthMedia Inc., was sold to Johnson & Johnson for $200 million. Its most recent big headline came in September, when the firm announced it had finished raising the largest VC fund in state history, closing Arboretum Ventures IV LP at $220 million, which was $5 million more than the target it had announced when it filed notice of the fund in June with the U.S. Securities and Ex change Commission. The previous largest fund in state history was the $180 million Michigan Growth Capital Partners II, raised in 2013 by Farmington Hills-based Beringea LLC. Arboretum’s previous fund, raised in 2011, also was oversubscribed. It had been targeted at $125 million and On Sept. 14, 2015, Crain’s reported on Arboretum Ventures’ raising of the largest VC fund in state history.
closed at $138 million. There’s no secret why investors eagerly write checks to become limited partners — the headlines, and profits, generated by other successful sales. In 2009, HandyLab Inc. of Ann Arbor was sold for $275 million; in 2011, Accuri Cytometers Inc. of Ann Arbor was sold for $205 million; and in 2014, Atlanta-based CardioMEMS Inc. was sold for $435 million. Then there were the initial public offerings of other portfolio companies: Ann Arbor-based Esperion Therapeutics Inc. (Nasdaq: ESPR) had an IPO of $73 million in 2013, had a secondary offering of $98 million in 2014 and had a third offering of $190 million last March; and Goleta, Calif.based Inogen Inc. had an IPO of $70.5 million last year. All of which is a far cry from Arboretum’s beginnings in 2002, when
hired up and had big growth.” Driving Meridian’s growth has been expansion of its Medicaid health plans in Michigan, Iowa and Illinois, but also its 4-year-old pharmacy benefit management company, MeridianRx Inc. MeridianRx now has 193 customers with more than 1 million members, up from about 50 clients and 50,000 members last year. Said Cotton: “The model is very scalable, and we have been growing because of consolidation in the (insurance) industry.” While Meridian’s Michigan health plan grew by about 150,000 members the past two years in part due to Healthy Michigan Medicaid’s expansion, Cotton said the largest increase was in Illinois, which grew to 250,000 members this year from 25,000 in 2013. Overall, Meridian, which also operates Medicaid plans in Illinois and Iowa, has more than 770,000 Medicaid managed care members. It
also has Medicare plans in Michigan, Indiana, Kentucky and Illinois. Cotton also is proud of Meridian’s ranking with the National Committee on Quality Assurance. It is the only HMO ranked in the top 10 in two states — Michigan at No. 9 and Illinois at 10. Meridian plans to expand Medicare operations into Pennsylvania and Nebraska in 2016 and grow its Medicare business starting in 2017. Because of the expansion, Meridian in 2015 added 880 employees to increase its workforce to nearly 2,000 in Detroit and 2,100 overall. Meridian plans to hire another 400 in Detroit. Besides business, Cotton and his family also are very much involved in civic affairs. Since 2011, the Cotton family has acquired more than 30 properties in working to create a business, dining and entertainment district in Grosse Pointe Park. Recent additions include a bakery and a “robot garage” for fledgling engineers. To boost neighborhood values and bring younger people into the area, the Cottons also created the Grosse Pointe Housing Foundation for students in college or in professional programs like medical residents. “We have 120 students. We certify the landlord properties to make sure they are nice,” said Cotton, who recently received an MBA in family business from Kennesaw State University.
State-record VC fund headlines another successful year for Arboretum
Garfinkle responded to a request from the Michigan Economic Develop ment Corp. , which was offering $250,000 to cover legal and other expenses for two new VC firms, contingent on their being able to raise $5 million. Arboretum got one award, and Birmingham-based Seneca Partners Inc. got the other. Garfinkle was able to raise the contingent money, but it took her until 2005 to close out the first fund of $24 million. She and partner Tim Petersen raised a second fund of $73 million in 2009. When asked if she ever imagined in the early days that her company would have exits as large as $435 million, or see portfolio companies raise $361 million in public offerings, or raise the largest fund in state history, Garfinkle said: “I wasn’t thinking that
way at all. I started Arboretum because I wanted to change health care. I thought we could drive cost out of the system by providing great clinical care.” Garfinkle, a past president of the Michigan Venture Capital Association , a member of the board of the National Venture Capital Association and a member of the health care advisory board at the University of Michigan , said Arboretum will stay the course. “We’ve been very focused on finding capital-efficient companies, and being in the Midwest has really helped us to do that. Rents, vendor costs and salaries here allow us to do that.” Overshadowed by news that Arboretum had closed on its recordbreaking fund was news the week before that the firm was part of a $39.5 million funding round for Plymouth Township-based Delphinus Medical Technologies Inc. , thought to be the largest single investment in a medical device company in state history. Delphinus has developed a device that uses ultrasound to detect breast cancer. That investment came out of Arboretum’s third fund. Garfinkle said the fourth fund has made one new investment and is doing due diligence on two more investments. “There are a lot of smart, really creative entrepreneurs out there.”
LOOKING AHEAD Garfinkle’s expectations for 2016
Arboretum is targeting at least three or four investments from its fourth fund this year.
It will continue to look for exit opportunities for current portfolio companies through acquisitions by larger companies.
Some portfolio companies funded from the third fund will continue to get follow-on investments as they hit designated milestones.
A trend in health care, according to Garfinkle, will be bundling payments for health care, reducing the number of procedures that are paid for by fee for service. Companies that offer technologies to support that trend will attract attention.
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DAN GILBERT By Robert Snell rsnell@crain.com
LOOKING AHEAD Gilbert’s predictions, hopes for 2016
䡲 Hoping the Cleveland Cavaliers get their first National Basketball Association
championship.
䡲 Continued diversity in retail downtown.
䡲 Expansion of Rocket Fiber, his ultrafast
optical fiber Internet service: “We expect the whole downtown by the end of 2016, for the most part, will have access to it.”
䡲 Possible real estate acquisitions: “We’re opportunistic.”
Detroit has a critical lack of office space that threatens to stymie growth in the central business district, Dan Gilbert said. During an exclusive interview, the billionaire entrepreneur said the city is poised to enter a new phase of its post-bankruptcy revitalization. That rebirth has been fueled in part by his roughly five-year spree of buying landmark downtown properties, which came to a head in 2015. Gilbert reflected on last year and looked ahead to 2016 during a wideranging interview with Crain’s Detroit Business. He touched on plans for the former J.L. Hudson’s site, explained the delay in naming the M-1 streetcar rail and talked about one real-estate purchase that stood out last year. He also addressed what he said could be a 10 million-square-foot shortage of office space in coming years — and his plans to help fix the problem. “You can make the case Detroit should be growing much faster and that Detroit should be attracting a lot more businesses than are here now,” Gilbert said. “It would be a shame if we don’t have the space.” He expects Detroit will see a flurry of office space construction in coming years. “I think the word for the next few
Office space a building problem fordowntown,but this majorcityinvestoris thinking upward on growth
years is going to be ‘vertical,’” he said. “Absolutely, there is going to be new construction.” Gilbert, 53, of Franklin, could make the first big office space announcement in early 2016. He is expected soon to announce a mixed-use development on the site of the former J.L. Hudson’s department store. Renderings that surfaced in early 2015 showed a modern, swooped building with a northward view of Woodward Avenue near Gratiot Avenue. The development is expected to include at least 225,000 square feet of mixed-use space, at least 250 residential units and at least 900 parking spaces. Gilbert did not reveal details but explained the delay in unveiling the project, which was expected initially in late 2015. “We’re working hard. We have to get it right. We want to make sure it’s a unique, special destination, something that Detroiters and visitors can be proud of,” he said. “Waiting a few weeks to get it right is nothing.” The Hudson’s site is just one piece in Gilbert’s real estate portfolio, which grew significantly in 2015. His biggest purchase was in March, when Gilbert bought
ANN MARIE SASTRY By Tom Henderson thenderson@crain.com
Ann Marie Sastry couldn’t have scripted a better year for Sakti3 Inc. , the lithium-ion battery company in Ann Arbor that she spun off from the University of Michigan in 2008. She was raising money to start the year and about to land the kind of strategic investor that founders of tech startups dream of and rarely find. In March, James Dyson, the British inventor who built the vacuum that bears his name, invested $15 million in Sakti3, part of a $20 million round that was joined by a heavyweight roster of previous investors, including General Motors Detroit-based Ventures, Silicon Valley VC firm Khosla Ventures, Tokyo-based Itochu Technol ogy Ventures Inc. and Farmington Hills-based Beringea LLC. What made Dyson’s investment strategic was that he wasn’t investing the way most venture capitalists do — to get an X times return in a few years. He was investing to accelerate the company’s technology and quickly bring its batteries to market. Or, more exactly, to power the next generation of products he plans to bring to market in the next two years. When his investment was an-
The Sept. 7 edition of Crain’s detailed the success of Sakti3’s battery technology.
nounced, Dyson told The Wall Street Journal he planned to use Sastry’s batteries, currently in prototype stage, to power the first of 100 new products his company intends to launch in four unspecified categories. Dyson got interested in Sakti3 last year after articles in Fortune and Scientific American about leaps in energy density Sakti3 had made with its batteries. The Fortune article was headlined: “Will this battery change everything?” In September, Sastry was one of just 30 early-stage tech entrepreneurs from around the country invited to the first White House Demo Day in Washington to show off her battery technology to reporters and would-be investors. In October came the news would-be investors were no longer a goal. Dyson’s company, Dyson Ltd., had bought Sakti3 for $90 million. “Dyson is a global heavyweight but still operates in many ways like an agile startup in its technical pursuits, and particularly in the way they bet on new technology,” said Sas-
the 43-story One Detroit Center — since renamed Ally Detroit Center — and an attached 2,070-space parking deck for about $100 million. In May, his Bedrock Real Estate Ser vices LLC bought the David Stott Build ing for $14.9 million and the Clark Lofts in Detroit’s Capitol Park district. Bedrock also paid a reported $30 million in August for the historic Book Tower and Book Building , as well as a nearby two-story community center. In all, Gilbert owns more than 80 properties in and around downtown — a more than $1.8 billion investment totaling more than 13 million square feet. During the buying spree, Gilbert wondered if he would ever acquire
the Book Building, a long-empty building downtown. “It was barren and empty for so long and being able to overcome that, in a way, is symbolic for downtown,” Gilbert said. “It’s a special building, a beautiful architectural gem. You can walk through it and get a feeling of what it may be one day.” Looking ahead to 2016, Gilbert is expected to name the M-1 Rail streetcar line in Detroit. His Quicken Loans Inc. has invested $10 million in the project and owns the naming rights on the 3.3-mile rail loop that will run from Congress Street downtown to Grand Boulevard in the New Center area. Quicken has trademarked several names for the rail line, including RocketRail, Quickline, Qlink and Qline, according to the U.S. Patent and Trademark Of fice. In February, Quicken trademarked the name Qride. Gilbert said he has not yet picked the winning name. “We’re still a few weeks from knowing ourselves,” he said in late December. 䡲 From Detroit 2.0, a Crain’s supplement produced in November, a graphic look at Dan Gilbert’s ownership of downtown.
New battery tech powers success of her startup
try. “Our plan was to continue to raise investment funds, but James and his team felt things were at the point where it would benefit all of us to join fully. … It’s a great outcome for all of us, the investors, staff and other stakeholders,” she said. Sastry, who is president of the newest Dyson business unit, said all of her almost two dozen employees were offered contracts, and all of them accepted. “It was a complete win-win, a profitable exit for all involved,” she said. “But not just an exit, a very nice entrance for all of us into the next phase of development.” Sastry said the company will remain in Ann Arbor. What sets Sakti3’s batteries apart is they are solid state, unlike other lithium-ion batteries, which are filled with a liquid electrolyte. Eliminating the liquid not only promises to let Sakti3 achieve higher energy densities, but when the liquid is eliminated, so is the component of traditional lithium-
ion batteries that has the potential to overheat and has caused so many meltdowns, fires, headlines and lawsuits over the years involving unstable lithium-ion batteries. Sakti3 uses what is called a thinfilm deposition process to make its batteries. That’s a process long used to make optical coatings, microchips and other semiconductor devices, depositing extremely thin layers of material on a substrate one at a time to create a final product. Sastry, who got her Ph.D. in mechanical engineering from Cornell University in 1994, has been co-inventor on more than 70 awarded and filed patents, including about two dozen that have been granted for Sakti3. From 1995 to 2012, Sastry was the Arthur F. Thurnau Professor of mechanical, biomedical and materials science and engineering at UM. In 2003, she was the founding director of the Keck Nanoscale Intracellular Signaling and Transport Center at UM, and in 2008, founding director of the school’s Advanced Battery Coalition for Drivetrains, funded with $5 million from GM. Sastry resigned from UM to devote full time to Sakti3. Sakti3 gets its name from “sakti,” the Sanskrit word for power, and the numeral 3, the atomic number for lithium. Her father, Tony, a native of India, had been a mathematics professor at Bradley University in Peoria, Ill. 䡲
LOOKING AHEAD Sastry’s expectations for 2016
䡲 To continue to improve energy densities for its prototype batteries.
䡲 Expand the team of almost 24 scientists and researchers by half. “Dyson’s move to acquire Sakti3 bodes well for expansion,” said Sastry.
䡲 Remain in Ann Arbor and not, as some other local tech companies have done after being acquired, move out of state.
䡲 Form partnerships, through Dyson’s lead, with other companies globally.
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2015: THE NEWSMAKERS
MATT SIMONCINI By Dustin Walsh dwalsh@crain.com
Matt Simoncini, president and CEO of Lear Corp., is betting big on the company’s hometown. He led the Southfield-based automotive seating and electronics supplier on a buying binge in 2015 — for both building and business in a strategy to vertically integrate its product line on a foundation in metro Detroit. Lear bought two buildings in the city of Detroit in 2015. In July, it purchased the 50,000-square-foot Hem meter Building on Centre Street for nearly $6 million. It will house employees from Lear’s shared services, information
technology and administrative operations. Then in September, it bought a building on State Street in Capital Park to house an innovation and design center. The structure will house a gallery, a seat design studio and a software design center. Simoncini said the building’s proximity to Wayne State University and the College for Creative Studies makes it a prime location to attract top design talent. “It’s a win-win and, frankly, I’m shocked more companies haven’t made moves (to Detroit),” Simoncini said. “Hell, yes, it’s a competitive advantage. You should see the résumés that are coming to us from our competitors.” Lear is also behind a city-led effort to establish an auto supplier industrial park in the city near the junction of I-94 and I-75. The push, supported by the Detroit 3 automakers — seeks
A Dec. 13, 2015 headline on CrainsDetroit.com broke news of Lear’s interest in developing an I-94 Industrial Park site .
With deals in Detroit, CEO gives Lear bigger presence in hometown
to restore manufacturing capacity — and jobs — at the I-94 Industrial Park near the American Axle & Manufactur ing Holdings Inc. headquarters. Simoncini said the company hopes to have a manufacturing plant operating in the next 24 months. “We think we can create something bigger, like a supplier park with manufacturing space that supports the wishes of our customers while creating good jobs in the city,” he said. Simoncini makes no qualms about this love of the city and his commitment to where he grew up. In 2013, he won the Detroit Free Press Automotive Leadership Award for suppliers in part for spearheading the development of a program for Detroit schools that teaches mentoring skills to college-bound high school students. Lear, which was founded in Detroit in 1917, also sponsored its first float in Detroit’s Thanksgiving Day parade last year. Simoncini is also a board member of the United Way for Southeastern Michigan. But it’s the presence of Lear in the city that makes him most proud. “I’d be lying if I said I didn’t have some personal satisfaction from seeing the Lear logo flying downtown
again,” Simoncini said. Lear also built on its two business units with several local acquisitions. Last January, it closed on an $850 million acquisition of Auburn Hills-based automotive leather supplier Eagle Ottawa LLC. Nearly half of the cars on U.S. roadways contain leather supplied by Eagle Ottawa. It generated nearly $1 billion in revenue in 2014, up from $485 million in 2011. In August, Lear bought the intellectual property and technology of Santa Rosa, Calif.-based Autonet Mo bile Inc. , an Internet-based telematics and app service provider for the automotive market. Then in November, it acquired Troy-based automotive connectivity supplier Arada Sys tems Inc.
“Connectivity will be the biggest trend in this industry since the automated assembly line,” Simoncini said. “While our acquisitions in this space have been relatively small, we’re happy with them and we’re laser-focused on growth. We’re not buying purchase orders; we’re buying capabilities. “Our future has never been brighter, and we’re positioned to take advantage of that trend.” 䡲
For more information on our portfolio of properties and leasing opportunities | 248 827 1700
LO O K I N G A H E A D Simoncini’s predictions for 2016
䡲 Connectivity will continue to expand. 䡲 Lear will look to make the seat more of a connected device in the car. 䡲 It will make more acquisitions in the connectivity space. 䡲 It will invest more in data-capturing technology.
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2015: THE NEWSMAKERS
RICK SNYDER By Lindsay VanHulle Crain’s Detroit Business/Bridge Magazine
LOOKING AHEAD Snyder’s plans for 2016
Continued efforts to boost Michigan’s skilled trades workforce
Attention to a number of legislative priorities: Detroit Public Schools
reform, energy policy, criminal justice reform and the threat of aquatic invasive species in the Great Lakes
A task force is reviewing what went wrong with Flint’s water after children were found to have elevated lead levels in their blood, while construction continues on the new Karegnondi Water Authority to serve the
region’s residents
LANSING — When Gov. Rick Snyder talks about 2015, the first thing he points to is Michigan’s economic performance. In September, the state’s seasonally adjusted unemployment rate ticked down to 5 percent, the first time in 15 years that Michigan’s monthly jobless rate was below the nation’s (5.1 percent that same month). “Economically, the state did well, and that’s the starting point,” Snyder recently told Crain’s in a wide-ranging interview. Yet while Michigan’s economy might have had success last year, Snyder has been challenged in other ways, including on roads, efforts to remake Detroit Public Schools and crisis over lead levels in Flint’s water. “It (was a) mixed year,” said Bill Ballenger, founder of Lansing-based political newsletter Inside Michigan Politics. “On balance, I would say mildly on the plus side of the ledger.” On the economy: Snyder’s administration launched Rising Tide, a program in 10 communities across the state, including River Rouge, to strengthen local planning and zoning ordinances and economic development tools. He plans to continue boosting skilled trades in Michigan. Snyder’s administration last year awarded $50 million in grants to community colleges to help them buy equipment for
Governor can boast of state’s economic boost; talent, schools among challenges for new year
training programs. Michigan’s 2016 fiscal-year budget will include $85 million for skilled trades. “There was this bias toward saying everybody needs a university degree, and that’s not a constructive metric,” Snyder said. “We need both career paths being recognized as equally honorable and, in some cases, betterpaying.” Snyder said he disagrees with analyses, including a recent report from Lou Glazer and Ann Arborbased Michigan Future Inc., that argue Michigan needs more residents with bachelor’s degrees. He said data instead should focus on young people starting their careers rather than the entire population, because Michigan’s older generations made a decent living without requiring a college education — which is no longer the case. “At some point, I’d love to talk to some of those groups that are citing those things to say, ‘I think you should recalibrate your numbers to be more representative,’” he said. On roads: The multiyear road-funding conversation finally culminated in a $1.2 billion deal in November, but that was after voters pummeled a ballot initiative in May by an 80 percent margin. Earlier in 2015 Snyder said he was concerned
DALE WATCHOWSKI By Kirk Pinho kpinho@crain.com
It was only in the three weeks leading up to the June auction of the Fisher Building and Albert Kahn Building that Dale Watchowski’s development firm, Redico LLC, became part of the acquisition team that eventually purchased the New Center-area buildings for $12.2 million. But it was the most recent in a string of mammoth — and in many cases, monumental — Detroit and suburban development/redevelopment projects for which the Southfield-based real estate company was in the driver’s seat in 2015. Between the New Center redevelopment of more
than 900,000 square feet of office space and a handful of other large projects completed, underway or planned in the past two years, Redico has or has had its hands in more than $800 million in local development and redevelopment efforts. “Our focus (recently) has been to capitalize on the fact that we are one of the few companies in the country involved in (development of) all asset classes,” said Watchowski, the president, CEO and COO of Redico. “(We do) retail, office, office/medical, residential throughout our mixed-use developments, hotels, R&D and industrial. Because we are unique in that regard, we made a decision to embark on large mixed-use developments.” Large they are. Well north of $80 million will be spent on the Fisher and Kahn building redevelopments, which are expected to include a significant portion of multifamily housing, particularly in the Kahn building. But the cost to redevelop the former Michigan State Fairgrounds site at Eight Mile Road and Woodward Avenue has nearly doubled to about $300 million, Watchowski said, up from $160 million for the 157 acres A March 19 story on CrainsDetroit.com reported on the $160 million fairgrounds site development.
about using $600 million in general fund spending due to other looming budget priorities, including Medicaid expansion. That amount ultimately made it into the final plan, along with higher fuel taxes and vehicle registration fees. “I like the fact there’s additional revenue, to be blunt,” Snyder said. “It’s more a portfolio approach.” The full $1.2 billion won’t be realized until 2020-21. Snyder said the state is reviewing the possibility of accelerating funding, even possibly issuing short-term bonds with 10- or 20-year limits, but hasn’t committed to doing so. “Listen, he would have signed anything they would have sent,” Ballenger said about Snyder. “I think he realized this is as good as it’s going to get.” State Sen. Jim Ananich, who said he was disappointed in the final plan, credited Snyder for being willing to discuss a compromise. Yet when Snyder cut off meetings with House and Senate leaders after
talks stalled this fall, “I think you get back to the table,” Ananich said. “I don’t blame him for that. That’s all of our failings.” On Detroit Public Schools: Snyder proposed a $715 million plan to split DPS into two districts — one to retire the existing district’s projected $515 million in debt, and the other, the new Detroit Community School District, to handle teaching and all other operations. Snyder wanted the bills introduced before the end of 2015, but it didn’t happen. Sen. Goeff Hansen, RHart, a likely bill sponsor, has been gathering input from lawmakers and district stakeholders to present bills with wider support, possibly early in 2016. “A lot of background work’s been done in terms of educating and getting information to legislators,” Snyder said. “In a lot of ways, I think I would have preferred to have gone faster on the legislative track.” His urgency is mostly due to timing: Snyder said he wants the DPS issue resolved by summer to prevent the district from winding up in court over its finances. The road funding saga ended Nov. 10, as reported on CrainsDetroit.com.
Redico set to go big in metro Detroit development
expected to contain everything from retail to medical uses, entertainment space to a transit center and educational space for institutions such as the Wayne County Community College District . Part of the cost increase is based on how much retail is expected. Ground-up construction is expected to begin in spring 2017. However, demolition is already underway at the site of some of the most notorious local ruins outside of Detroit: the former Bloomfield Park site, now called the Village at Bloomfield after Redico and California-based Pacific Coast Capital Partners LLC purchased the foreclosure rights to the 87-acre site in Bloomfield Township and Pontiac last year. It’s expected to include retail and office space, a grocery store, medical office space, a movie theater, restaurants, senior housing and single-family and multifamily housing in the planned $180 million project. Ground-up construction is expected to begin in the fall. There’s also the former Robert Scott Correctional Facility site at Five Mile and Beck roads in Northville Township, where Redico plans a $150 million mixed-use development of retail space, a 120-room hotel and about 150 residences developed by Farmington Hills-based Pinnacle Homes. “He is a very skilled guy, someone
who I have not really had any problems working with,” said George Jackson, the former president and CEO of the Detroit Economic Growth Corp. , who worked closely with Watchowski on the $72 million Gateway Market place deal that brought the first Meijer Inc. store to Detroit, as well as the adjacent but separate state fairgrounds project. “There is no way we’ll not be working together in the future,” said Jackson, who now runs his own development company, Detroit-based Ventra LLC. Watchowski is also president and CEO of Bloomfield Hills-based American House Senior Living Communities . American House is part-owned by Redico and was recently ranked the 15th-largest senior housing operator in the U.S. Redico will also be opening a satellite office in the Fisher Building in 2016 as part of its efforts “to capitalize specifically on Detroit as it continues its comeback.” “We’ve played a significant part and we’ve always had a presence, but what we want to do and what we are currently doing is establishing a significant focus of both financial and human resources to promote our business in the city,” Watchowski said. He added that Redico has “a pipeline” of projects that will lead its Detroit efforts.
LOOKING AHEAD Watchowski’s expectations for 2016
A more concrete redevelopment plan for the Fisher Building and Albert Kahn Building, along with retail tenant announcements.
Construction of new buildings to begin at the former Bloomfield Park site, now known as the Village at Bloomfield.
Site preparation to begin on redevelopment of the former Michigan State Fairgrounds site in Detroit.
Continued expansion of American House Senior Living Communities, which
is part-owned by Redico and is now the 15th-largest senior housing operator in the U.S.
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HONORING
H
CHRIS AND MIKE ILITC
Featured Speakers 2015 Newsmakers of the Year:
THIS YEAR’S HONOREES:
DAN GILBERT
JACK ARONSON
Lear Corporation
Quicken Loans/Rock Ventures
Garden Fresh
PHOTO: ASSOCIATED PRESS
MATT SIMONCINI
CHRIS ILITCH
MIKE ILITCH
Join us Feb. 9, 11:30 a.m. MotorCity Casino Hotel Gov. RICK SNYDER
ANN MARIE SASTRY
JAN GARFINKLE
Sakti3 Inc.
Arboretum Ventures
Limited Tickets Available! Crainsdetroit.com/events Hear about the Ilitch vision from the source at Crain’s Newsmakers of the Year event. In addition, this lunch program will recognize our Top 10 2015 Newsmakers, our Best-Managed Nonprofit winner and our Newsmaker Student Scholarship awardee.
TONYA ALLEN
JON COTTON
DALE WATCHOWSKI
Detroit Schools Coalition/ Skillman Foundation
Meridian Health Plan
Redico
MAJOR SPONSOR
PREMIER SPONSOR
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Snyder’s retiring chief of staff to take job at Honigman By Lindsay VanHulle Crain’s Detroit Business/Bridge Magazine
LANSING — Dennis Muchmore will join Detroit-based law firm Honigman Miller Schwartz and Cohn LLP next month after retiring as Gov.
Rick Snyder’s chief of staff. Muchmore, 69, will become chairman of the firm’s government relations and regulatory practice group as of Feb. 1, said David Foltyn, Dennis Honigman’s Muchmore: To chairman and lead law firm group. CEO. The role will require leading a team of attorneys who specialize in such business policy areas as health care, gaming and hospitality. Muchmore’s last day as chief of staff will be Jan. 20, though he expects to continue to advise the Snyder administration on special projects.
In addition to leading the government relations practice, Muchmore also will be part of a new faculty team that will provide training on public policy and the legislative process to Honigman attorneys and clients, lawmakers and other staff members within state government. “We’re just thrilled that Dennis is going to really reinvigorate this group,” Foltyn told Crain’s. “We have a number of up-and-coming lawyers in the group, (and) we are looking for this kind of leadership. Muchmore joined the Snyder administration as chief of staff in 2011. His tenure included Detroit’s bankruptcy; Honigman represented the Detroit Institute of Arts in the “grand bargain,” which leveraged state and private donations to protect pensioners and the city’s art collection. In the 1980s, Muchmore cofounded Lansing-based lobbying firm Muchmore Harrington Smalley & Associates LLC. He also has served as executive director of the Michigan
United Conservation Clubs and vice president of the Michigan Chamber of Commerce , and on the Oakland Uni versity board of trustees. “It’s just a great opportunity, I think, for me to realize that one piece that I always liked more than any other piece, which is being able to mentor folks or help folks understand better just how government operates,” he told Crain’s. “It’s pretty important and always has been to me.” Muchmore has a bachelor’s degree in education from Eastern Illi nois University and a master’s in public administration from Michigan State University. Honigman’s new faculty team also will include former U.S. Sen. Carl Levin, who joined the firm in April as senior counsel; Lansing-based attorneys John Pirich, Joe Garcia and Andrea Hansen; and Detroit-based attorney Khalilah Spencer. The firm did not disclose Muchmore’s salary. He will be based in
Lansing, although he will travel between Honigman’s five other offices in Detroit, Bloomfield Hills, Ann Arbor, Kalamazoo and Chicago. Muchmore’s departure is one of several recent staff changes in Snyder’s executive office. Jarrod Agen, Snyder’s communications director, will succeed Muchmore as chief of staff, while Beth Clement will remain deputy chief of staff and serve as Cabinet secretary. In addition, longtime press secretary Sara Wurfel recently resigned to become public affairs vice president at Lansing-based lobbying firm Truscott Rossman. Dave Murray was promoted to the job from deputy press secretary. Communications staff members Laura Biehl and Anna Heaton became deputy press secretaries, and former Michigan journalist Meegan Holland joined Snyder’s office as communications director. 䡲 Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle
Mark Anthony, Chief Administrative Officer, DMC Detroit Receiving Hospital
ADVERTISING & MARKETING Mark Bellissimo, CEO, JR Thompson and Competition Graphics Bellissimo has been appointed CEO of J.R. Thompson Company (JRT) and Competition Graphics (CG). A 29-year marketing and advertising industry veteran, he’ll manage all creative, business and financial aspects of JRT/CG, leading a combined staff of more than 100 people and focusing on building client relationships and driving long-term growth. Bellissimo previously worked at CampbellEwald, advancing to the position of President and Managing Director and serving as a member of the Board of Directors. He also founded and managed Campbell-Ewald’s 180person retail marketing agency, CE Retail.
EDUCATION Raymond Muscat, Industry Director, Tauber Institute for Global Operations Works in conjunction with the Tauber Institute Engineering and Business School faculty Co-Directors, plus the Managing Director, to participate in strategic planning and leading/ coordinating strategic initiatives for the Institute. Mr. Muscat’s 37 year corporate career includes global experiences in the Automotive, Defense Electronics, Aerospace and Office Furniture industries.
Mr. Mark Anthony has been named Chief Administrative Officer at DMC Detroit Receiving Hospital where his responsibilities include day-to-day hospital operations. Mr. Anthony will report to Dr. Reginald J. Eadie, CEO of DMC Detroit Receiving Hospital. In the past, Mark’s former positions included Executive Vice President, Chief Operating Officer - Borgess Health, Kalamazoo, MI; Senior Vice President Munson Medical Center, Traverse City, MI; Administrator for Clinical Services - Oakwood Healthcare System, Dearborn, MI
LAW Margaret Baxter, Director of Southeast Michigan Operations, Warner Norcross & Judd LLP An experienced automotive & international trade professional, Baxter will develop & implement business strategies to support Warner's continued expansion in SE Mich. She will work closely with teams in the firm's Southfield & Macomb County offices. Baxter brings 25 years of leadership, business development & commercial trade expertise to Warner, including positions at OESA, Canadian Consulate General and Detroit Economic Growth Corp. Most recently she was senior VP of Operations at OESA.
Denso names Milam CEO of N. America thermal biz Southfield-based Denso International America Inc. promoted Steve Milam to CEO of its thermal business operations in North America. Milam replaces Shingo Kuwamura, who will assume a new role to be named, the auto supplier said. Milam was COO of Denso’s North America thermal business and president of its Canadian manufacturing operations. He’s had various management roles at Denso since 2006; before then, he worked in the purchasing department at Ford Motor Co. Rich vanOorschot, Denso plant director, will replace Milam as president of its Canadian manufacturing operations.
Crain Communications promotes publishers to VP Detroit-based Crain Communications Inc. promoted two of its publishers — Jason Stein of Automotive News and Brennan Lafferty of Plastics News
ADVERTISING SECTION
HEALTH CARE
PEOPLE: SPOTLIGHT
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Linda Holliday, Business Development Executive, Ulliance, Inc. Holliday is responsible for identifying and executing business development strategies, establishing new and maintaining existing business relationships, and securing new accounts for Ulliance’s seven service lines. Holliday previously held various positions with Beacon Health Options, Blue Cross Blue Shield of Michigan and John Hancock. She received her Master of Science in Healthcare Services Administration from Central Michigan University.
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.
— to vice president. Stein, 44, has overseen Automotive News, one of the world’s largest automotive business-tobusiness Jason Stein news outlets, as publisher and editor since May 2013. He joined Automotive News in 2003 and spent four years leading Automotive News Europe in Munich. Lafferty, 45, has led the Crain Global Polymer Group in the
U.S. and Europe. He has been publisher of Brennan Lafferty Plastics News, the premier plastics publication in the U.S., since July 2013 and before that was publisher of Waste & Recycling News. Crain Communications has 34 print and online publications — among them Crain’s Detroit Business — and employs more than 800 in 13 locations.
McLaren Macomb agency promotes interim head The Mt. Clemens-based McLaren Macomb Healthcare Foundation named Louise RallisWibbelman as director. She had
led the organization in an interim capacity since last spring, succeeding Elsa Silverman. RallisWibbelman had been development manager-events and corporate relations for the foundation since 2012. 䡲
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DEALS & DETAILS ACQUISITIONS & MERGERS
N.Y., a developer of compressed national gas fueling stations and a subsidiary of Fortistar LLC, has completed construction of a private CNG station at the North American Detroit Terminal for FCA US LLC, Auburn Hills. The CNG station will fuel 179 tractor trucks in FCA Transport’s fleet with natural gas. Website: trustarenergy.com.
Printing Stylecraft Co. Inc., Canton
Lambert, Edwards & Associates, De-
Township, announced it has acquired Highlite Printers Co., Trenton. Highlite has moved its order entry, estimating systems, client files and certain pieces of production equipment into Stylecraft’s facilities in Canton Township. The Trenton facility has been closed. Websites: stylecraftprinting.com, highliteprinters.com.
troit, has been named the public relations agency of record for Goodwill Industries of Greater Detroit, Detroit. Websites: goodwilldetroit.org, lambert-edwards.com.
Henkel Corp., Madison Heights, a subsidiary of Henkel AG & Co. KGaA, acquired Magna-Tech Manufacturing Corp., Muncie, Ind., a provider of vacuum impregnation services. Magna-Tech, which has 10 facilities across North America, will function as a subsidiary of Henkel Corp., operating as part of its Adhesive Technologies business. Websites: henkel-northamerica.com, magnatechmfg.com.
CONTRACTS Technical Writing Solutions LLC,
Rochester Hills, a provider of technical writing products and services, was selected by Humanetics Innovative Solutions Inc., Plymouth Township, to develop, write and edit a variety of user manuals and other documentation for customers using Humanetics’ line of anthropomorphic test devices. Websites: twsinfo.com, humaneticsatd.com. Aqaba Technologies Inc., Sterling Heights, a Web design agency, has added clients Facial Pain Clinic & Sleep Center PLC, Troy, and 3D Maxillofacial Imaging Center PLC, Troy. Website: aqabatech.com. BorgWarner Inc., Auburn Hills, is ex-
panding its engine timing business in Korea by supplying its advanced cam torque actuated variable cam timing technology for Hyundai and Kia vehicles powered by 3.0 to 3.8 liter V-6 gasoline engines. Website: borgwarner.com.
Community Choice Credit Union, Farmington Hills, has opened a new branch at 30 E. Long Lake Road, Troy. Telephone: (877) 243-3528. Website: communitychoicecu.com.
TruStar Energy LLC, White Plains,
The Promanas Group, Ann Arbor, a commercial real estate investment and management firm, has completed acquisition of the Drake Pointe office building, Farmington Hills. The acquisition adds 67,848 square feet of multi-tenanted office assets to its fund. Website: promanas.com.
ProQuest LLC, Ann Arbor, has completed its acquisition of Ex Libris Group, Jerusalem, a provider of cloud-based solutions for higher education. ProQuest has formed a new business unit, Ex Libris, a ProQuest Company. Websites: proquest.com, exlibrisgroup.com.
Duo Security Inc., Ann Arbor, a cloud-based access security provider, has opened an office in Central London, United Kingdom. Website: duosecurity.com.
Aqaba Technologies Inc., Sterling Heights, has been retained by Malace HR, Troy, a business staffing company, for the development of obile responsive website, Nationwide SEO and Google Adwords advertising. Websites: aqabatech.com, malacehr.com. Delta Manor Inc. and Presbyterian Villages of Michigan, Southfield, entered into a
management agreement for Delta Manor, a 100-apartment senior community in Detroit. Presbyterian Villages of Michigan will be responsible for the day-to-day management operations of Delta Manor with reporting accountability to the Delta Manor board of directors. Website: pvm.org. U.S. Army TACOM Lifecycle Management Command, Warren, has awarded General Dynamics Land Systems,
Sterling Heights, a business unit of General Dynamics, a $92.2 million contract to upgrade M1A2 System Enhancement Package Version 2 Abrams tanks to the M1A2 System Enhancement Package Version 3 configuration. Work will be performed by existing employees in Anniston, Ala.; Tallahassee, Fla.; Lima, Ohio; and Scranton, Pa. Website: gdls.com.
MOVES Out of Ireland LLC, Ann Arbor, has relocated its Real Irish retail store from
3030 Washtenaw Ave., Suite B103, Ann Arbor, to 107 E. Grand River Ave., Brighton. Telephone: (734) 846-2025. Website: realirish.com.
Saints Peter and Paul Jesuit Church, Detroit, has renamed its Warming Center as the Pope Francis Center. Website: popefranciscenter.org.
NEW PRODUCTS Full Spektrem LLC, St. Clair Shores, a
marketing and manufacturing company, has launched a new website featuring new packaging and design for its Rock-it line of cleaning products. Website: rockitproducts.com. Infection Prevention Technologies LLC, Auburn Hills, has updated its corporate website enhancing the quality and availability of information about the benefits of its family of ultraviolet light disinfection robots. Website: infectionprevention technologies.com.
NEW SERVICES Rush Antiques and Rush Appraisals,
Rochester, has launched a website for worldwide sales of 18th, 19th and 20th century antiques of French, English, Chinese and American origin. Website: rushantiques.com.
Michigan Economic Outlook 2016. 11:30 a.m.-1 p.m. Detroit Economic Club. Speakers include David Sowerby, vice president, Loomis, Sayles & Co., and Steve Arwood, director, Michigan Talent, and CEO, economic development, Michigan Economic Development Corp. MotorCity Casino Hotel, Detroit. $45 DEC members, $55 guests of DEC members, $75 nonmembers. Phone: (313) 963-8547; email: info@econclub.org.
JAN. 10
SAA Outlook Conference. 2-7 p.m. Society of Automotive Analysts. Disruptors and taking on disruptors will be the topic for the 2016 Outlook Conference. CNBC’s Phil LeBeau will open the conference. Gem Theater, Detroit. Price depends on membership status. Contact: Michelle Krebs, (248) 760-3236; email: michelle.krebs@coxautoinc.com. Website: saaauto.com.
BUSINESS OPPORTUNITIES
FOR SALE~ AEROSPACE MACHINING COMPANY Privately held Aerospace Machining company located in Metro Detroit with long term agreements in place is for sale or merger. Owners retiring. AS-9100 and ISO-9001 registered. Very profitable niche product line with proprietary processes. Send confidential reply to:
PO Box 7416, Bloomfield Hills, Mi. 48302
MISCELLANEOUS
STARTUPS
OFFICE SPACE
Briggs Detroit Sports Bar has opened at 519 E. Jefferson Ave., Detroit. Telephone: (313) 656-4824. Website: briggsdetroit.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.
includes a series of small-group conversations on nonprofit diversity, inclusion and equity. Each seminar features a local nonprofit leader who will share strategies for success. United Way for Southeastern Michigan, Detroit. Free MNA members, $25 nonmembers. Contact: Sarah Pinder, (517) 492-2439; email: spinder@mnaonline.org. Register at www.cvent.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.
MARKET PLACE
• Cross-Dock Services • Trucking Services • Diverse Supplier • Reasonable Rates
consignment store featuring midcentury modern furniture and decor, has opened at 932 W. 14 Mile Road, Clawson. Telephone: (248) 842-7542. Website: modmartdetroit.com.
Impact Management Services, Southfield, a staffing company, opened a new office at 119 McCarthy Road, Suite E, Appleton, Wis. Website: theimpactanswer.com.
Diversity, Inclusion & Equity for Nonprofits: Simple Steps, Real Change. 10 a.m.-noon. Jan. 13. Michigan Nonprofit Association. Speaker: Diana Kern, vice president of programs, NEW, Solutions for Nonprofits. Event
er of research and reference resources, has expanded the integration of Google Apps for Education into its product lines. Researchers can log into many of their school’s or library’s Gale resources with their Google Account credentials and save, share and download content. Website: gale.cengage.com.
EXPANSIONS
opened its second location at 37 E. Flint St., Lake Orion. Website: lockhartsbbq.com.
UPCOMING EVENTS
JAN. 7
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Belfor USA Group Inc., Birmingham, a privately owned subsidiary of Belfor Holdings Inc. and operating under the brand name of Belfor Property Restoration, has opened a new of-
Lockhart’s BBQ, Royal Oak, has
THURSDAY
Gale Group Inc., Farmington Hills, part of Cengage Learning Inc. and a publish-
ModMart Detroit, a vintage resale and
fice at 24750 21 Mile Road, Macomb Township. Website: belfor.com.
CALENDAR
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REAL ESTATE FERNDALE 1000 sq. ft. Lower Level Ideal for Artist, Storage, or ? $500/mo. 248-398-7000
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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
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
JOB FRONT SALES
INSIDE SALES REPRESENTATIVE AT EVENT SOURCE Detroit, Michigan Location As an Inside Sales Representative, you will assist customers and clients with their rental needs, collecting all information necessary to ensure a successful event. You will recommend items to support menu plans, suggest design schemes, prepare and present a quote to the client as well as follow-up. Necessary skill set includes problem resolution techniques, objective listener, excellent customer service skills, self-motivated, team player, organized and detailed oriented. Also has a systematic approach to tasks and projects. Please apply online at: www.eventsource.com/careers
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Dean and Aimee Zoyes of Zoyes Creative Group spent more than 3,500 hours creating this model of a fictional downtown Detroit for Bedrock Real Estate Services. Each inch of their 12-by-14-foot model equals 32 feet of the actual downtown.
MODEL CITIZENS Couple create tabletop tableau of Detroit today ... and tomorrow By Kirk Pinho kpinho@crain.com
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he converging point between Dan Gilbert’s and the Ilitch family’s downtown real estate investments isn’t just along Woodward Avenue. It’s also in a nondescript building across from the Ferndale Dog Park, where Dean and Aimee Zoyes’ pets can play on warmer days. A building where minicities also are created. Most days, the dogs — Maggie, a 4-year-old golden retriever, and Luca, a 7-year-old Italian greyhound — roam the office where the husband-and-wife owners of Zoyes Creative Group designed and built the large tabletop models of downtown for both of the aforementioned real estate titans. The models are used to showcase both current holdings and long-term plans. Model-making has been a labor of love for the Zoyes team — who united in marriage in 2006 and in business in 2009, when Dean’s De-
troit-based architectural modelmaking company, Zoyes East Inc. , and Aimee’s Birmingham-based AC Illustration LLC merged under the Zoyes Creative name. The company, which generated about $1 million in revenue last year and projects $1.2 million this year, provides services ranging from architectural modeling to 3-D printing to digital branding. It also creates websites, marketing materials and sales displays for real estate projects, among others. “Kind of the full gamut,” Aimee Zoyes, 45, said last week in the conference room of the company’s office at 1280 Hilton Road, south of Nine Mile Road. Both Aimee, a University of Toledo graduate with a degree in painting, and Dean Zoyes, a 44-year-old architecture graduate of the then-University of Detroit , say the Gilbert and Ilitch projects were thrilling to work on and highly labor-intensive. Gilbert’s tabletop model took
3,500 man hours of cutting through paper, acrylic and plastic to create more than 200 replicas of the buildings that dot the downtown landscape. Properties light up when (or shortly thereafter) their real-life counterparts are added to the Bedrock Real Estate Services LLC real estate portfolio. Owned properties also are given an orange roof. The pair did not disclose how much Gilbert’s team paid for the roughly 12-by-14-foot model, every inch of which represents 384 inches (32 feet) of the real downtown. The model, which is seen by thousands of visitors per year, sits on the 10th floor of One Campus Martius , the building that Bedrock and Detroitbased Meridian Health purchased a year ago from Compuware Corp. (Detroit-based Rossetti Associates introduced Bedrock to Zoyes Creative while working on the 10th-floor build-out several years ago.) SEE NEXT PAGE
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In all, the machines printed for a total of 5,500 hours, and an additional 1,700 hours were spent assembling the base and painting and assembling building parts for the replica of the Ilitch plans. The model of the entire district is scaled at 1 inch to 384 inches (32 feet), while the model of the arena is scaled where 1 inch equals 128 inches (nearly 11 feet). The cost to build the District Detroit models was also not disclosed, but in real estate circles it’s estimated in the multimillions of dollars. The models are housed in the district’s sales center at Comerica Park. Zoyes Creative views itself primarily as an architectural imaging, environmental design, and branding and marketing company. It sees Detroit-based Skidmore Studio as its primary competition, although companies such as Detroit-based Lovio George Communication and De sign and Detroit-based Gyro Creative Group do similar work.
R FROM PREVIOUS PAGE
For the Ilitch family’s Olympia De velopment of Michigan models — one measuring 12 by 14 feet and encompassing the entire 40-plus-block District Detroit and one measuring 6 by 10 feet for the new Detroit Red Wings arena — Zoyes Creative used a pair of 3-D printing machines. They worked practically around the clock for nearly six months. “Each building might have taken about a day to make and then another day to sit in an acid bath,” Aimee Zoyes said. That’s just part of the process and part of the intricacy. The district model has a video projection by Southfield-based Bluewater Technologies showing cars moving up and down a bustling Woodward Avenue, while the arena model replicates a hockey game: the sound of thousands of cheering fans erupting when the Red Wings score a goal — and the accompanying celebratory, pulsating lights. It’s a replica with all the bells and whistles imaginable and is part of the visual aids that can be used as the project is explained to future sponsors, suiteholders and investors.
Since founding their individual companies in the 1990s and merging six years ago, the couple, who have a 6-year-old daughter, have navigated an industry where tabletop models were said to be on their deathbeds, as well as a crippling recession that forced significant staff reductions and in many ways the merger itself. But they say they are wellequipped to deal with future curveballs. “We’ve been in business 20 years dealing with developers,” Dean Zoyes said. “We are going to continue to be in business another 20 years, hopefully for our daughter to take over the company.” It’s not just Gilbert and Ilitch who have made use of Zoyes Creative’s services. Penske Automotive Group , Toyota USA , B r o d e r & S a c h s e R e a l E s tate Services Inc., Ford Motor Co., Shi nola , the Detroit Zoological Society and the Detroit Institute of Arts are among the other big names on the client roster. Branding, graphic design and website design were part of Zoyes Creative’s job duties for The Albert , with 127 apartment units on Griswold Street in Capitol Park, and The Scott, currently under construction on Woodward Avenue and planned to have 199 apartments in Brush Park, said Richard Broder, CEO of Birmingham-based Broder & Sachse. “They are creative and professional, work well with our team and they are helping us bring a particular brand to (The Scott) and our Detroit-based multifamily projects in general,” Broder said. 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB
THE DISTRICT DETROIT
A model of District Detroit is on display inside a preview center at Comerica Park.
19
RIVERWALK FROM PAGE 1
boost public access to the riverfront and stimulate economic revitalization, was unaware of Keith’s trademark applications until being told by Crain’s Detroit Business. “I don’t think anyone is upset. It’s too early for any feelings like that,” said Marc Pasco, the conservancy’s communications director. “Our next step is to find out what his intentions are.” The RiverWalk is a 3.5-mile path that stretches from Gabriel Richard Park near the Belle Isle bridge west to Joe Louis Arena . Once finished, the RiverWalk will span an additional two miles from Joe Louis Arena to the Ambassador Bridge. An $80 million project transforming the east and west riverfront has drawn donations from the Troy-based Kresge Foundation , Battle Creek-based W.K. Kellogg Foundation and New York Citybased Ford Foundation. The 20-acre west RiverWalk opened in July 2014 with three pathways and space for outdoor concerts on the site of the former Detroit Free Press printing plant. The conservancy ended 2013 with more than $118.5 million in net assets, but total revenue fell 36.2 percent to $12.9 million, according to the nonprofit’s most recent tax filing. Today, the RiverWalk continues to serve as a sort of connecting glue for the riverfront investment both announced and pending. Crain’s first reported in November that General Motors Co. and Dan Gilbert’s Rock Ventures LLC are working to develop more than 20 acres along the Detroit River east of the Renaissance Center. The development, south of Jefferson Avenue, would combine multifamily units, retail and other uses, sources said. The project would be the largest Detroit development site involving Gilbert, the founder and chairman of Detroit-based Quicken Loans Inc. and Rock Ventures. Keith said moving to trademark the Detroit RiverWalk name is his attempt to spotlight the “innate beauty of Detroit,” an effort that gained momentum after he published Sunrise on the Detroit River, A Love Letter to Detroit, a 2014 collection of photographs taken by the judge. “No one in Detroit or anywhere bothered to look at the innate beauty of the river and thought about what it meant and what it means to people who have endured difficult days,” Keith said. The book and the reception from readers sparked an idea about trademarking the RiverWalk name. “I was surprised to discover that it had not been trademarked,” Keith said. So was Pasco, the conservancy communications director. Conservancy officials have talked about offering branded items for sale, he said, but so far do not. Conservancy officials also have contacted their lawyer to verify that the name was never trademarked before Keith did so, Pasco said.
DETROIT RIVERFRONT CONSERVANCY
The Detroit Riverfront Conservancy trademarked “Detroit International Riverfront” but not, apparently,“Detroit RiverWalk.”
Trademark sparring on the rise Federal statistics show increased disputes over trademark use nationwide. A trademark is a word, phrase, symbol or design that protects brand names and logos used in goods and services. Trademarks in the U.S. are registered with the U.S. Patent and Trademark Office. Trademarks are not necessarily required to protect brand names or logos. A party can establish “common law” rights based on having used the mark in commerce. Anyone who thinks he or she might be harmed by a trademark registration has a limited time to oppose the registration. Disputes are heard in front of the Trademark Trial and Appeal Board. In general, someone can file a cancellation petition if he or she thinks the trademark registration would result in damages. The number of trademark cancellations was up 2.3 percent in 2015 following a nearly 14 percent rise a year ago, according to the U.S. patent office. The number of parties trying to prevent trademark applications from being approved, however, is down 4 percent this year, according to the patent office.
“... You only get trademark rights from the use of the mark, not registration. I don’t know what grounds (Terrance Keith) would have asserted to register it.” John Rothchild, Wayne State University
“That was before my time. I would guess at some point in time we did that or should have done that,” Pasco said. According to the federal trademark database, the conservancy has one live trademark, for the words “Detroit International Riverfront.” That trademark was registered in 2008. After learning that “Detroit RiverWalk” was up for grabs, Keith filed the trademark applications Dec. 13. “I said, ‘Well, maybe God is giving me an opportunity to do something with this,’” Keith said. “For a person who genuinely has affection for the river, the RiverWalk and Belle Isle, this is an opportunity for me to help shape the image of the RiverWalk, along with the conservancy, in a way that is beneficial in a broader perspective.” If the filing does result in a trademark spat, it won’t be an un-
common event. In 1992, a federal judge blocked a man from selling T-shirts and merchandise emblazoned with the words “Camden Yards” and ruled the state of Maryland owned the name. “You have to understand a really important premise of trademark protection is you only get trademark rights from the use of the mark, not registration,” said John Rothchild, an associate law professor at Wayne State University who specializes in trademarks. “I don’t know what grounds (Keith) would have asserted to register it,” Rothchild added. The conservancy can fight the trademark applications and argue that granting Keith’s requests could cause confusion among the public about whether the merchandise is being sold by the conservancy, he said. “They can say, ‘(Keith) can’t register this mark because we have prior rights and have been using it before he was using it,’” Rothchild said. 䡲 Robert Snell: (313) 446-1654 Twitter: @robertsnellnews
BANKRUPTCIES The following business filed for protection in U.S. Bankruptcy Court in Detroit Dec. 22-30 . Under Chapter 11, a company files for reorganization. 䡲 Nu-Cast Step & Supply Inc., 11745 Woodbine, Redford Township, voluntary chapter 11. Assets not available; liabilities, $2.4 million. Chad Halcom
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“It’s really a mix of people moving into the area” and those moving up into a dream home. Susan Campbell Johnson,an agent with Signature Sotheby’s in Birmingham tion, the luxury home market remains steady. Through November, builders have pulled 36 permits for $1 million plus homes, compared to 38 in all of 2014, according to the Home
HOMES FROM PAGE 1
in 2003-2004, the organization changed its data collection methodology, so it’s impossible to draw a true apples-to-apples comparison. In earlier years, high-end sales were grouped in the $400,000-and-up category. While 2015 will be remembered as a “very strong year,” local agents say they are not seeing bidding wars or multiple offers for the most expensive homes. The average days on the market for homes priced at $2 million or more declined from 115 days last year to 103 days in 2015, Realcomp reported, though for those between $1 million and $2 million, days on market remained steady — declining slightly from 76 to 74 days. Both reflect year-to-date sales through November. Sales price trends are inconsistent across the region. Some communities are seeing 10-year highs while others, including Grosse Pointe, are approaching but still have not reached the pre-recession peaks. As prices and sales gain momentum, some property owners have decided to list properties that had previously been held off the market. By November, there were 597 active homes priced at $1 million or more, up about 25 percent from a year earlier. “That’s a lot of inventory,” said Jeff Barker, a broker with Max Broock Realtors who sells many lakefront properties and also West Bloomfield and Franklin homes. “As prices have increased, people are starting to sell,” a reversal from 2007-2011, when most people felt prices were too low and held onto their sprawling compounds or 1920s mansions if they could. Renewed demand for high-end homes started about three years ago. But until 2014, there were more buyers than inventory, said Brad Wolf, managing director of Hall & Hunter Realtors in Birmingham. That imbalance started tipping the other way in 2014, “with more and more listings,” Wolf said. Homes that are “closer to town or in town” are more in demand and those with three acres of land or more seem to have fallen in favor, a switch from the market a decade ago, Wolf said. “Size isn’t as important as location,” he said, and walk-
Builders Association of Southeastern Michigan. (The data includes multi-
PHOTOS COURTESY OF REALCOMP
The home at 2501 Iroquois Ave. (above) is one of the most expensive one for sale in Detroit’s Indian Village; it’s $750,000.The Oakland Township home at 60 Piney Hill Road (below) sold for $1.1 million last year.
City hot spots
ability and move-in condition make a luxury home a standout. Zillow has reiterated in reports that “dense walkable suburbs with an urban feel” are the hot buzzwords in residential real estate right now. Still, some buyers in this price point seek more acreage, with room for a boat or a car collection, or even a pole barn to store their gear and toys, agents say. Waterfront properties, homes with “a view” and a chef’s kitchen are particularly in demand in luxury homes, according to a National Association of Realtors survey. Bloomfield Hills and Township accounted for 84 of the $1-millionplus sales last year, about 37 percent of them, with another 67 sold in Birmingham, Barker said.
regions — a trend other luxury real estate agents also note. “It’s really a mix of people moving into the area” and those moving up into a dream home, said Susan Campbell Johnson, an agent with Signature Sotheby’s in Birmingham. Many of her buyers are physicians or business owners who are thriving, though she’s also worked with a recording artist and General Motors executives. The auto sector still drives many of the million dollar home purchases — whether it’s the historic Palmer Woods mansion purchased by General Motors president Daniel Ammann and his wife for $1.55 million or a suburban showcase bought by a rival executive.
Who buys million-dollar homes?
Often, buyers for the most expensive properties pay cash for their new homes, in part because interest rates have been so low and the stock market has not appeared to be a welcome place for investing money, said Barker. Some 40 percent of the $1-million-and-up sales last year were cash purchases, and in the $2 million and up homes, it rose to almost 70 percent, he said, citing data from the MLS. Others put down 50 to 60 percent of the purchase price, so their mortgage falls below the jumbo mortgage threshold, which is $417,000 in Michigan, Campbell Johnson said. Jumbo home loans do not have to conform to federal mortgage standards, so lenders may vary criteria and the interest rate may be higher than traditional mortgages. When it comes to new construc-
While most ultra-luxury homes are purchased by locals, Agney, who has sold homes in the Grosse Pointes since 1980, recently has seen an uptick in buyers from other
INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: Akervall Technologies........................................ 3 Amber Properties............................................... 7 Arboretum Ventures......................................... 11 Bedrock Real Estate Services ......................... 12 Boydell Development ........................................ 7 Coalition forthe Future ofDetroit Schoolchildren 10 Detroit Red Wings.............................................. 9 Detroit RiverFront Conservancy....................... 1 Garden Fresh Gourmet.................................... 10 Great Fresh Foods ............................................ 10 Hall & Hunter Realtors ................................... 20 Higbie Maxon Agney........................................... 1 Honigman Miller Schwartz and Cohn............ 16
family projects in a nine-county area.) Michael Stoskopf, CEO of the Home Builders Association , expects 2016 to be the strongest year since 2006, and estimates 50 to 55 permits for $1 million properties. Since 2012, around 70 percent of new luxury homes were built in Oakland County, with construction largely in three areas: Bloomfield Hills and Township and the village of Franklin, said Stoskopf.
Ilitch Holdings..................................................... 9 LaGrasso Bros. Inc. Produce ........................... 21 Lear ..................................................................... 13 Lucido Real Estate........................................... 20 Max Broock Realtors ....................................... 20 Meridian Health Plan ........................................ 11 Olympia Development of Michigan ................ 9 Quicken Loans................................................... 12 Redico................................................................. 14 Sakti3 ................................................................. 12 Signature Sotheby’s ....................................... 20 Wayne State University .................................... 9 Zoyes Creative Group....................................... 18
Cash deals
Detroit’s high-end housing, in Indian Village, Palmer Woods and some luxury condos in Midtown, are selling robustly, agents say. Some Indian Village mansions sold for more than list price in 2015 and received multiple offers, said Betty J. Warmack of Real Estate One . Yet almost all of them are selling at $500,000 to $800,000, a big increase from a few years ago but still shy of the million-dollar mark. The city’s rebound, with restaurants, high-end retailers and more activity downtown, is spilling over to homes in Grosse Pointe. “I’m having damned near a record year,” said Alex Lucido, owner of Lucido Real Estate in Grosse Pointe. He’s sold eight homes on Lakeshore Drive, five of them cash offers, in 2015. The reason sales are robust: “It’s so close to Detroit, downtown, Midtown. The whole resurgence of the city — Grosse Pointe is a beneficiary,” he said. Agney and her daughter, agent Jaime Rae Turnbull, agreed that Detroit’s comeback helps sales. “There’s so much vitality in the city right now,” Agney said. Many agents believe that vitality will carry into 2016, with strong sales. Compared to prices in Colorado, New York or Chicago, Detroit’s luxury homes are still very affordable, Agney said. Several agents say the Federal Re serve ’s move to raise interest rates, even by a quarter percentage point, may spur some buyers who have waited to jump in and purchase this year — before borrowing rates become more expensive. While the outlook seems positive, some sound a note of caution. Rising inventories require sellers to spend time and money to offer pristine properties with updated gourmet kitchens and new smart home features. Sellers “really need to have their house in top, top shape and priced correctly,” Wolf said. Barker noted that he feels cautious because of the presidential election, and uncertainty about a decline in stocks and more volatile days on Wall Street. “The stock market affects high-end buyers more than interest rates,” he said. 䡲
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 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
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AKERVALL FROM PAGE 3
company’s CEO, Devin Benner, and met with Akervall co-founder and CEO Jan Akervall, Sassa’s husband, last year. “We had been talking about diversifying into other product categories, and Jan and I thought we could leverage each other’s strengths. Theirs is innovation, and ours is working with retailers,” said Asma. In March, McKeon began selling a mouthguard for nighttime teeth grinding under the LunaGuard Nighttime Dental Protector brand through regional outlets, which included Discount Drug Mart in Ohio; Weis Markets Inc. , a chain of supermarkets on the East Coast; and Kin ney Drugs in upstate New York. Asma said final details on a deal with another national drug chain are being worked out, and he expects the mouthguards to be in those stores soon. “Akervall’s mouthguards are so much better than traditional mouthguards,” said Asma. “Because they’re so thin, they’re very comfortable. Because they are made of thermoplastic that is remoldable. If you don’t get the fit quite right the first time, you drop it in warm water and remold it. And you can’t bite through it the way you can with other mouthguards.” Mathieu Filiatrault-Giroux is a North American product manager for CCM in Montreal. CCM is part of the Canton, Mass.-based Reebok In ternational Ltd.
He said the traditional mouthguards CCM had sold for decades were long criticized for their bulkiness and ineffectiveness. Players had difficulty speaking with them in their mouths, didn’t like the way they felt, and suffered loss of teeth even when wearing them. He said he spends a lot of time visiting retailers and early in 2014 was told about a new mouthguard someone in Michigan was making. “I went on their website and got a
TOM HENDERSON
Sassa Akervall, president and co-founder of Akervall Technologies Inc., launched the company in 2008 along with her husband, ear, nose and throat surgeon Jan Akervall, and Johannes Schwank, a professor of chemical engineering at the University of Michigan.
generic e-mail address and sent a note introducing myself,” he said. “It’s really rare for us to reach out to a company. Usually, they reach out to us. “These are extremely thin. They have breathability, and they have a fit that is on the level of a dentistmade custom mouthguard,” he said. He said CCM validated Akervall’s claims about strength and better protection through energy dispersion. CCM began selling the mouthpiece in March, using the CCM brand with the tag line “powered by Sisu.” They are made by Akervall’s outside contractors. Filiatrault-Giroux declined to provide sales numbers but said “our market share has increased significantly since then.” “Sisu” is the brand name Akervall uses for its sports mouthguards. According to Sassa Akervall, “sisu” is a popular word in her and Jan’s native country of Finland. It has no direct English translation but embodies “determination, strength and resilience.”
Akervall directly sells online or though Amazon.com three mouthguards under that brand — a standard mouthguard at $24.99, a higher-impact guard at $34.99 and a kids guard at $19.99. It also sells a guard case at $8.99 and the Sova Night Guard for teeth grinders for $44.99. It competes with makers of traditional ethylene-vinyl acetate guards, such as Minnetonka, Minn.-based Shock Doctor Inc. , the largest U.S. manufacturer of mouthguards.
A surgeon’s tool Akervall Technologies was founded in 2008 after Jan Akervall, an ear, nose and throat surgeon at William Beaumont Hospital, devised a mouthguard to keep patients’ teeth from being chipped by the heavy medical instruments used during endoscopic surgeries. “One day, Jan came home with this mouthguard and said, ‘I think you should do this as a business.’ I had run my own production company in Finland and had developed my own entrepreneurial spirit, figuring out how to get things
done,” said Sassa, who had been a TV producer, TV host and author in Finland. The company, which has filed for four patents, was co-founded by Jan, Sassa and Johannes Schwank, the James and Judith Street professor of chemical engineering at UM and director of the school’s Electron Microbeam Analysis Laboratory. The company used an existing thermoplastic polymer. Schwank, the company’s chief scientific officer, set up tests to determine what shape and thickness provided the best strength and shock absorption. One claimed result was a guard that transmits nearly all the energy of a hit throughout the mouthpiece. One real-world guide for the company as they worked on prototypes was Sassa’s daughter, Miriam, a field hockey player who, like many athletes, hated her traditional mouthguard, taking it out often to catch her breath. In 2010, Sassa went to the Spark boot camp, where she met Bill Mayer, Spark’s vice president of entrepreneurial services. He gave her advice on growing a startup, hooked her up with a consultant and mentor, Wayne Brannon, the former head of General Motors’ European operations who later joined Akervall’s board, and helped her get a microloan of $15,000 from Spark. “Fifteen thousand was huge at the time,” said Sassa. “It allowed us to buy material to start making mouthguards and build our first inventory. We had two years to pay Spark back and paid it back in 10 months.” Spark also helped find an affordable contractor to mold the mouthguards and helped Akervall build a good website. “Sassa was great to work with,” said Mayer. “She wanted to learn. She was eager for advice. She’s been the kind of entrepreneur who just keeps at it, keeps doing what needs to be done.”
21 Sports customer growth In 2011, Akervall landed its first customer, Cliff Keen Athletic, an Ann Arbor maker of athletic gear for high school and college wrestlers. Wrestlers often wrestle without mouthguards so they can breathe unimpeded. “They bought our first inventory of a couple of thousand guards, which was huge,” said Sassa. Up till then, Sassa had been the sole employee, working at the kitchen table. The Cliff Keen deal allowed her to hire her first employee, Terry Rishoi, who is now office manager, and move from the kitchen to bigger digs in the basement. Another set of early customers was the booming roller-derby community. Also in 2011, Sassa and Lynne Schwank, Johannes’ wife and Akervall’s fulfillment manager today, drove to a derby convention in Chicago and set up shop. By 2013, there were six employees in the Akervall basement setup, “and we were trying not to drive each other crazy.” In December 2013, Akervall bought a vacant 15,000-square-foot factory in an industrial park in Saline and in July 2014 moved in to the building, where it does sales and marketing, order fulfillment and engineering research on the next generation of even thinner mouthguards. The company now employs 17. On the way toward profitability, Akervall kept the bills paid and funded research with a series of three federal grants totaling $970,000 — a Phase 1 small business innovation grant from the Department of Defense, a Phase 1 SBIR grant of $150,000 from the National Science Foundation and a Phase 2 SBIR grant of $750,000 from the NSF. Sassa said the Phase 2 grant is helping Akervall develop a new material for the mouthguards that will have other applications, too. 䡲 Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2
LaGrasso Bros. growing lettuce in upcycled freight box By Rachel Premack Special to Crain’s Detroit Business
Depending on where you dine in the Detroit area, your “farm-totable” salad might have its origins in an old shipping container. Since September, LaGrasso Bros. Inc. Produce, a Detroit-based produce distributor, has been growing and selling lettuce from an upcycled freight container. It is the first Michigan company to implement technology from Boston-based sustainable food company Freight Farms, according to a news release. The hallmark product is the Leafy Green Machine — a hydroponic farming system self-contained in a 40 feet by 8 feet by 9.5 feet shipping container. It can grow herbs, lettuces and cabbage year round, and Freight Farms estimates 500 full heads of lettuce can be harvested weekly from a single unit.
Fleet Manager Joe LaGrasso said his family’s company, which was founded in 1914 and passed down the family line, implemented Freight Farms technology to provide its clientele with fresh, local produce. “As an industry, we’ve noticed a push toward local, in particular chefs wanting to source around where the restaurant is placed,” LaGrasso said. However, with hail storms, polar vortexes and blistering summers all par for the course in this area, “it’s hard to source local in Michigan 365 days per year.” Leafy Green Machines are insulated, with LED lights and in-unit sprinklers nourishing the crops. Along with being resistant to Michigan winters and other fickle weather, Freight Farms allows farmers to monitor growing envi-
ronments remotely and digitally alter the containers’ pumps, lights and other controls. Users can ensure temperature, humidity and carbon dioxide levels meet their plants’ needs through their smartphones. LaGrasso said restaurateurs have “loved” the product: a blend of light and dark green and red lettuces with a “nutty and spicy flavor profile.” Restaurants in metro Detroit and Traverse City have been its purchasers. Moreover, growing produce in an old shipping container has piqued the interest of current and potential customers alike, LaGrasso said. “They’re very impressed, very interested and want to know everything that’s going on in the machine,” he said. “They’re curious on how it runs, what we can do with
the application on the phone, what needs to be done by hand as a human and what needs to be done by the machine itself.” This is LaGrasso Bros.’ first entry into growing food. Though LaGrasso said implementing Freight Farms has boosted his company’s clientele, LaGrasso Bros. is still judging to see if it will continue its push into local farming. “We’re trying to figure out if this is something that catches on in our industry,” he said. “I could see us growing the growing aspect of our business, but it’s too early to see.” The Leafy Green Machine starts at $76,000 with yearly operating costs averaging at $13,000. LaGrasso said this was a big investment for his company, but one perhaps ultimately sustainable. LaGrasso Bros. started as a pushcart in Detroit in 1914 and, by 1980,
moved into its current space, a 40,000-square-foot facility. It experimented with selling pre-chopped produce in the 1970s. Its bread-and-butter is produce sourced from states such as California as well as growers in Michigan, which is inspected for quality and safety in its 5001 Bellevue St. facility. The Freight Farms produce, whose lettuce is delivered within hours of harvesting to customers, is a response from growing interest in fresh, local, farm-to-table ingredients. LaGrasso said wholesale distributors nationwide are experimenting with offering ultra-fresh produce, but it’s too early to know if the demand will stick or if it’s simply a trend. “We have to feel the market out,” LaGrasso added. “Everyone in the industry sees the local push and are trying to see their niche in that.” 䡲
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WEEK planned $13 million redevelopment along the east Detroit riverfront could bring about 80 multifamily units to the market. Roger Basmajian, whose Detroit real estate portfolio has grown to nearly a quarter-million square feet since 2013, said construction on the studio and one-bedroom units at the threestory building is expected to begin late in 2016 or early in 2017. Basmajian closed on the purchase of the building last month.
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COMPANY NEWS Two St. John Health System hospitals last week appeared no closer to a deal that would outsource most of their current staff of certified registered nurse anesthetists, and the system contended its new contract provider was ready to replace them. St. John Providence hospitals said a thirdparty employment service contract was in place with newly formed PSJ Anesthesia PC and expected no interruption in service when that deal was to take effect Jan. 1. After five years of planning and 18 months of construction, Haven Inc. will open its $8 million shelter for victims of domestic and sexual abuse on Jan. 8 at Telegraph Road and Vanguard Drive in Pontiac. It sits on 6 acres of land, with space for 55 beds in three connected buildings, which total 36,000 square feet. Moran Chevrolet in Clinton Township bought the Summit Place Kia dealership building, near its own site on Gratiot Avenue, for about $1 million. Moran bought the building from Tibor Gyarmati. Moran plans to renovate the building as a collision repair and paint operation, and Summit Place Kia expects in January to move into its new $6 million dealership nearby. Ventra LLC, a real estate company owned by George Jackson, former president and CEO of the Detroit Economic Growth Corp., was hired by Olympia Development of Michigan as development consultant for residential projects in the new District Detroit. Jackson worked closely on the district project — which includes the $627 million Detroit Red Wings arena to open in 2017— while at the DEGC, which he left last year. Dearborn-based Ford Motor Co. and Google Inc. are in talks to have the automaker build Google’s next-generation
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ON THE WEB DEC. 12-30
Detroit Digits A numbers-focused look at last week’s headlines:
8
The number of Bagger Dave’s Burger Tavern restaurants newly closed by Southfield-based Diversified Restaurant Holdings. They include a downtown Detroit location at 1224 Randolph St. and seven outlets in Indiana.
$460M
The price paid by IHS Inc. for London, Ontario-based Carproof Corp. Carproof provides vehicle history reports in much the same way that IHS-owned Carfax does in the U.S. IHS, a Colorado-based market-research company whose IHS Automotive is based in Southfield, bought Carfax in 2013.
34,217
The announced attendance, despite icy weather outside, at Ford Field for the second Quick Lane Bowl, in which the University of Minnesota defeated Central Michigan University 21-14 on Dec. 28. Detroit’s college football bowl game saw an uptick of more than 10,000 fans over last year’s inaugural Quick Lane game, in which Rutgers University defeated the University of North Carolina.
autonomous cars under contract, Automotive News reported. A finalized announcement could come early this month during the International Consumer Electronics Show in Las Vegas. Detroit-based Huron Capital Partners LLC bought its first addon company, National Paint Industries Inc., a North Brunswick,
N.J.-based manufacturer of specialized coatings used in commercial flooring and other applications, for one of its portfolio companies, Valentus Specialty Chemicals Inc. Terms were not disclosed; Valentus will be headquartered in North Brunswick. The first of two waves of 90 employees of Fifth Third Bank Eastern Michigan moved into the 25th and 26th floors of the One Woodward Building in downtown Detroit. A second and final wave from the previous headquarters at the Southfield Town Center is expected to move into the 12th and 13th floors of One Woodward in late spring, and the building, owned by Bedrock Real Estate Services, will be renamed Fifth Third Bank at One Woodward.
Performance Network Theatre
was to close at year’s end for lack of operating funds. A recent campaign for emergency funding did not reach its goal, officials of the small Ann Arbor theater said.
Public Lumber & Millwork and Russell Street Deli were recipients of the Detroit New Economy Initiative’s NEIdeas $100,000 Challenge. Both businesses will receive $100,000 to further expand their companies. ITC Holdings Corp., the Novibased power-line company that recently put itself up for sale, and almost two dozen other owners of transmission lines in the Midwest should cut rates and pay refunds, a federal judge recommended. Detroit-based DTE Energy Co. announced the closure in midJanuary of a metallurgical coke plant it owns in Pittsburgh. The Shenango Inc. coke battery plant employs 173.
OTHER NEWS A secret audit of Wayne County’s unfinished jail revealed negligence and exposed alleged misconduct surrounding the controversial project. Among the findings: County Auditor General Willie Mayo accused officials of negligence for failing to disclose that construction cost estimates in 2011 had swelled by $42 million. The audit, authored two years ago, had been shielded from the public amid the criminal investigation and prosecution until Wayne County Circuit Judge Timothy Kenny authorized its release. Its release came one day after county commissioners approved an interim deal to settle a lawsuit involving the county and two contractors who worked on the jail project. The Detroit City Council voted 6-1 to approve a zoning ordinance, effective March 1, that experts say could close up to half of the city’s medical marijuana dispensaries. After heated debate, the council voted not to eliminate B2 and B4 zoning districts, which include strip centers and individual stores, from the ordinance, thereby allowing dispensaries to locate in those districts. The Detroit Downtown Development Authority gave Dan Gilbert-affiliated Rosko Development Co. LLC another 30 days to finalize a development plan amendment for the former J.L. Hudson’s department store site. Organizers of the North American International Auto Show
launched a Crowdrise campaign to help raise more for the children’s charities benefiting from its Jan. 15 charity preview. Information is at crowdrise.com/2016charitypreview.
OBITUARIES Daisy Elliott, a former state House representative and coauthor of Michigan’s Elliott-Larsen Civil Rights Act, died Dec. 22. She was 98.
RUMBLINGS Yes — soup for you! Kroger picks up ‘Seinfeld’ figure’s recipes ans of the hit 1990s sitcom “Seinfeld” could find themselves face to face with one of the show’s iconic characters this month as a part of a promotional tour stop at a local Kroger store. Kroger stores in Michigan and across the country have begun selling the soups made by New Yorkbased Soupman Inc. based on the original recipes of Al Yeganeh, the founder of the soup business made famous by the popular TV show that ended in 1998. Actor Larry Thomas, whose character on the show was based on Yeganeh, will appear at a Kroger in Roseville as the Soupman, better known as the “Soup Nazi” by LarryThomas: “Seinfeld” fans. “Seinfeld” actor to The one-liner appear at Kroger. “No soup for you!” — made famous by Thomas in a 1995 episode of the show — has played a part in the revitalization of the business, which went public in December 2010. Yeganeh, who sold his company in 2004, remained in control of the recipes and brands, according to a news release. In September, the company launched four of its soups at Kroger stores: chicken noodle, crab and corn chowder, chicken gumbo and its best-selling soup, lobster bisque. The soups, which are packaged in Tetra cartons (aseptic packaging that can keep products fresh for months without refrigeration), are available at 2,100 Kroger locations in Michigan and across the nation. A 17-ounce carton of the soup sells for $3.49 on average, Soupman Inc. CEO Jamieson Karson said. “The Midwest (market) for our product and category is great, we are partnered with the best supermarket chains in the country and they’re concentrated in a lot of the Midwestern cities,” Karson said. Soupman products are available in about 6,000 supermarkets nationwide. Thomas is scheduled to appear at the Kroger on 13 Mile Road in Roseville from 11 a.m. to 3 p.m. Jan. 17. The event will include free samples of the soups and a chance to talk recipes with Thomas and Karson.
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OU extends Nike apparel contract for 10 years Oakland University nearly celebrated a landmark basketball victory over Michigan State University — the OU men lost in overtime to the top-ranked Spartans at The Palace of Auburn Hills on Dec. 22. But at that game, Oakland’s athletic de-
partment announced to fans longer-lasting news: a 10-year, $1.13 million apparel contract with Nike that is one of the largest athletic sponsorships for a mid-major school in the country. Oakland athletics will receive $1.13 million in Nike Retail dollars during the duration of the contract to purchase apparel, shoes and equipment for all OU varsity sports teams with discounts ranging from 35 to 50 percent off retail prices. The deal also includes 60 pairs of shoes, 20 warmups, 20 bags and 20 game balls for the men’s basketball team in the first year of the contract. Under the current contract, Nike and authorized dealer Team Sports Inc. has been the exclusive providers of shoes, apparel and equipment for OU since 2013. Nike LIDS will take over as authorized dealer once the contract ends May 31, 2016. The contract requires OU to spend a minimum of $150,000 a year with Nike; in addition, OU athletics will receive 10 percent back on every dollar it spends. The deal also includes promotional incentives for Nike, including game advertisements, game tickets, recognition and signage at home games and a foursome/hole sponsorship at the department’s annual golf outing. Coaches will also be required to attend clinics sponsored by Nike.
Ford, HFHS offer contest for health care apps for drivers Dearborn-based Ford Motor Co. and Detroit-based Henry Ford Health System are sponsoring an innovation challenge that offers $10,000 in prize money to employees who come up with smartphone apps that link health care with vehicles. Ideas could include in-vehicle health monitoring and warnings, medical-test ordering and records access from the road, appointment check-ins, prescription ordering and data that can be transmitted to a doctor’s office or hospital. In theory, the car and technology will do the work while the driver stays focused on the road. Online submissions open on Jan. 20. For more information, visit www.henryfordinnovation.com/ healthcareonwheels.
Ten finalists from online submissions will be chosen in March, followed by prototypes, pitches and, finally, the selection of three winners by May or June. The winning design will receive $5,000, with a runner-up prize of $3,000 and third-place prize of $2,000. Individual submissions will be accepted, but employees are encouraged to form teams.
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