Crain's Detroit Business, Jan. 18, 2016 issue by Crain's Detroit Business

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Birmingham gallery does brisk business in Bowie artwork after rocker’s death, PAGE 5

JANUARY 18-24, 2016

HMOs seek mental health bids Health plans group lobbying to get state OK to pursue exclusive contracts By Jay Greene jgreene@crain.com

A move is underway in Michigan to further privatize the public nonprofit mental health system by turning over $2.4 billion in state funding to Medicaid HMOs, some of which are owned by for-profit insurers. The Lansing-based Michigan As sociation of Health Plans has mounted a lobbying effort to gain state approval next year to bid for the

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potentially lucrative contracts that now are exclusively in the public health sector. “Is it feasible for health plans to contract with networks as behavioral providers? It certainly makes sense,” said Rick Murdock, MAHP’s executive director. “Should the state of Michigan look at ways to continue to improve the effectiveness of the Medicaid program? Absolutely, we think they should.” Murdock said health plans are

managing medical care, behavioral health, substance abuse and developmentally disabled in other states. They include Illinois, California, Florida, New Mexico, South Carolina, Washington, Wisconsin and Texas. On the other side, officials for the Michigan Association of Community Mental Health Boards have warned

state officials about the dangers that could face a vulnerable and needy population by allowing

health plans to take over the state’s mental health system. “This budget is pretty attractive to the health plans,” said Bob Sheehan, CEO of the mental health board association. “They see that market, and they believe they can do quite well” financially. Sheehan said the health plans underestimate the difficulty in caring for a complex population and their plans’ ability to earn high profSEE HMO, PAGE 18

Lending grows as commercial mortgage market stabilizes By Kirk Pinho kpinho@crain.com

Some real estate finance experts predicted turbulent seas ahead two years ago, expecting a wave of defaults on commercial mortgages issued during the free-lending heyday in the mid-2000s. But it appears as though the choppier waters have subsided. The 90-day delinquency rates for commercial mortgage-backed securities borrowers for buildings in and around Detroit have fallen considerably in the past three years as the local real estate market has improved, lenders agree to workout agreements with borrowers, and

bad loans from the 2005-07 lending heyday are wiped off the books, said local industry experts. Overall, those factors have helped lead to lenders being more willing to issue debt on Detroit-area properties — particularly stable office properties with good tenant rolls — as occupancy rates rebound and the region’s delinquency rate nears the national average. “You’re seeing improvement in the lending activity because properties have been able to increase their cash flow and occupancy levels,” said Anne Galbraith Kohn, senior vice president of the Capital MarSEE MORTGAGES, PAGE 16

The new Clean Planet line of meat dishes aims to take advantage of consumers’ interest in protein. MIKE RAFFIN

Aronson’s next act Garden Fresh founder launches line of healthy entrées By Sherri Welch swelch@crain.com

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Garden Fresh Gourmet founder Jack Aronson is taking the fresh approach that made his salsa the country’s top brand to another food segment with the launch of a new line of refrigerated meat entrées aimed at health-conscious eaters. He’s projecting the Clean Planet line of refrigerated, fully cooked beef, chicken and turkey dishes, and full meals expected to launch in the coming months, will generate $8 million in revenue the first year. Clean Planet Foods LLC officially opened for business last week as a subsidiary of Clinton Township-based Great Fresh Foods LLC, a company Aronson, his wife, Annette, and minority investors founded in 2012 to sell Fresh Planet (previously Jack’s Special Grilled) stuffed chicken

patties in stores including Meijer and Costco. Minority investors in Great Fresh include two with ties to Garden Fresh: Dave Zilko, who was vice chairman, and Mike Griffin, who is serving as chief marketing officer for Great Fresh. The company’s general manager, Mike Skinner, and local chef Brian Polcyn, who helped develop the recipes for both the Fresh Planet chicken patties and new Clean Planet meat line, are also minority partners. Like the salsa Aronson and his partners expanded into the top-selling refrigerated brand in the country before selling it to Campbell Soup Co . last summer, the new “chef-inspired, center of the plate proteins” sold under the Clean Planet label will last up to 60 days in the SEE FRESH, PAGE 16

“No one has done anything like this before.” JackAronson, Great Fresh Foods founder

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MICHIGAN

BRIEFS Snyder asks Obama for disaster declaration in Flint Gov. Rick Snyder asked President Barack Obama to issue an emergency and major disaster declaration amid a drinking water crisis in Flint, and state Attorney General Bill Schuette announced Friday that his office would investigate how the situation was handled. Snyder’s office said it is seeking additional federal aid for individuals and public agencies involved in the effort to provide Flint residents with clean drinking water, The Associated Press reported. Tap water became contaminated with too much lead after the city switched its water supply in 2014 to save money while under state financial management; local officials declared a public health emergency in October. Snyder’s request will be reviewed by the Federal Emergency Manage ment Agency. If it is approved, the individual assistance could include grants for temporary housing and home repairs, and the public assistance would help agencies such as city schools and the water system.

Schuette announced that his office would investigate to determine what, if any Michigan laws were violated. Federal prosecutors said they’re working with the U.S. Envi ronmental Protection Agency. State and federal health officials also said last week there has been an increase in Legionnaires’ disease cases over the past two years in Genesee County, where Flint is located, but said they can’t conclude that the increase is related to the water crisis. Legionnaires’ disease is a type of pneumonia caused by bacteria that infect the lungs.

Muskegon jumps into development biz With developers facing complications in creating a sustainable housing market in downtown Muskegon, the city has decided to jump into the business of commercial real estate development, MiBiz reported. Last month, Muskegon officials acquired an entire city block that consists of an already-under-construction 72-unit apartment build-

ing, a vacant former bank building and multiple empty lots. The properties are within blocks of ongoing significant institutional investment led by Muskegon Community College and Baker College. The city will most likely redevelop the two existing buildings on the site and leave the vacant parcels to be developed at a later date by private developers, City Manager Frank Peterson said. “Our interest is taking our downtown a step further,” he said. “It’s not profit-making. We see the value being our long-term investment.”

MICH-CELLANEOUS 䡲 Detroit-based law firm McKeen & Associates , which focuses on medical malpractice, said it will open a Kalamazoo-area office to capitalize on growth opportunities, the Grand Rapids Business Journal reported. It will be the second office for the firm, which according to its website has 16 attorneys. 䡲 Grand Rapids-based office technology dealer Applied Imaging acquired a Cascade Township office building for its new corporate headquarters, MiBiz reported. According to a statement, the company cited recent and projected growth as necessitating its move from a 25,000square-foot headquarters to a new 60,000-square-foot facility by July. 䡲 Lansing-based Two Men and a Truck named Jeff Wesley as CEO, marking the first time top leader-

ship of the moving company has fully moved outside of its founding family, the Lansing State Journal reported. Wesley, CFO for seven years, replaces Brig Sorber, whose family had run the company since 1985 and who had previously stepped down as president. Last month, Two Men and a Truck ranked first in the moving company category of Entrepreneur Magazine’s Franchise 500 list, and 162nd overall. 䡲 Michigan State University is offering a new resource to cities wanting help with managing finances and budgets, The Associated Press reported. The MSU Extension Service’s Center for Local Government Fi nance and Policy, which is being formally unveiled after it quietly started in November, will hold workshops, research municipal fiscal trends, consult local governments and issue an annual report on the financial health of each Michigan municipality. 䡲 A Canadian company has renewed interest in developing an open pit mine at an Upper Peninsula site not far from the Wisconsin border, according to the Milwaukee Journal Sentinel. Aquila Resources Inc. recently filed an application to build a mine along the Menominee River, which divides Michigan from northeastern Wisconsin and flows into Green Bay. Regulators in Michigan recently held their first public hearing on the application, and the several hundred people in atten-

INSIDE THIS ISSUE BANKRUPTCIES . . . . . . . . . . . . . . . . . . 4 CALENDAR . . . . . . . . . . . . . . . . . . . . . . . 13 CAPITAL BRIEFINGS . . . . . . . . . . . . . . 4 CLASSIFIED ADS . . . . . . . . . . . . . . . . 15 DEALS & DETAILS . . . . . . . . . . . . . . . 13 MARY KRAMER . . . . . . . . . . . . . . . . . . . 6 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 6 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 14 RUMBLINGS . . . . . . . . . . . . . . . . . . . . . 19 WEEK ON THE WEB . . . . . . . . . . . . . . 19

COMPANY INDEX: SEE PAGE 18 dance were divided on their support or opposition to the mine. Aquila plans to invest more than $300 million to extract gold, copper, zinc and silver from the site. 䡲 West Michigan businessman and philanthropist Ralph Hauenstein died Jan. 10 at age 103. Hauenstein was owner of Werner Lehara, a Grand Rapids food equipment manufacturer, and established the Hauenstein Center for Presidential Studies at Grand Valley State Universi ty and the Grace Hauenstein Library at Aquinas College. 䡲 Frederik Meijer Gardens & Sculp ture Park in Grand Rapids saw the

largest attendance in its history in 2015. Officials said more than 775,000 guests visited during the attraction’s 20th year, up from about 650,000 in 2014, The Associated Press reported. 䡲

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Wired to sell Auto show’s elaborate display builders have more in mind than entertainment By Dustin Walsh dwalsh@crain.com

orty feet above the Fiat Chrysler Automobiles NV display at the North American International Auto Show rests more than 40 miles of cable and nearly a dozen servers. The hardware powers 10,000 square feet of video surface and 30 million LED pixels as six programmers operate a multimillion-dollar control room to make the display come to life. Auburn Hills-based George P. Johnson Co., one of several display designers, was tasked with making the FCA show floor memorable — not only to entertain attendees for public and media show days, but to make the direct pitch that those attendees’ next

DUSTIN WALSH

In the technical control room behind the FCA display at the North American International Auto Show, six programmers from George P. Johnson operate the choreographed program for the display.

MUST READS OF THE WEEK

More money, more problems Gov. Rick Snyder, state legislators will face some tough choices in deciding what to do with an estimated $575 million budget surplus. Lindsay VanHulle reports in Capitol Briefings, Page 4.

Why it’s expensive to drive in Detroit A study ranks Detroit as the most expensive spot in the nation for business driving. See why on Page 19. (It’s not just the potholes.)

car purchase should be an FCA brand. “This (display) is built to sell,” Bo Puffer, manager of shows and events for FCA US LLC ’s 71 auto show appearances, said at the auto show last week. “I’m here to sell cars, and the longer someone spends in my space, the less they are with someone else.” The contractor team GPJ enlisted to erect the display and its interactive guts also regularly works on the Super Bowl halftime show and the Oscars, said Paul Hemsworth, vice president and executive creative director for GPJ. The auto show, known as Southeast Michigan’s Super Bowl, is not only a spectacle that draws SEE DISPLAYS, PAGE 17

Bill would protect employees who use med pot By Lindsay VanHulle Crain’s Detroit Business/Bridge Magazine

LANSING — In November 2009, Joseph Casias was fired from his job at a Battle Creek Walmart store after a drug test he’d taken during treatment for a workplace knee injury came back positive for marijuana. Earlier that year, Casias received a card identifying him as a registered patient under Michigan’s medical marijuana law, according to court records from a wrong-

ful termination lawsuit he later would file against the Bentonville, Ark.-based retailer. Casias showed his card both to the medical staff giving the drug test and to his shift manager, records show, but was fired for violating the chain’s drug policy. When he sued, a federal district court and the 6th U.S. Circuit Court of Appeals each sided with Wal-Mart Stores Inc. , contending the state’s medical marijuana statute doesn’t regulate private employment.

Citing Casias’ case, a Democratic state lawmaker has introduced legislation that would prevent employers from firing or taking other disciplinary action against employees solely on the basis of their status as medical marijuana patients. Rep. Sam Singh, of East Lansing, says the intent of House Bill 5161 is to treat medical marijuana the same as any other pharmaceutical medication and force employers to prove its use interfered with SEE POT, PAGE 15

Sam Singh: State lawmaker seeks to push pot debate.

Oil drilling permit sought for church land in Southfield By Jay Greene jgreene@crain.com

Jordan Development Co. LLC, one of the oldest and largest oil and gas exploration companies based in Michigan, is betting against longterm low crude oil prices and has applied for a drilling permit in Southfield. Raising some eyebrows and bucking a six-month moratorium on fossil fuel extraction recently approved by the Southfield City Council, Jordan has signed a lease agreement for the drilling with the Word of Faith International Christian Center

Inc. at Evergreen and Nine Mile roads. If the company gets a permit, said Ben Brower, a vice president with Traverse City-based Jordan Development, drilling of the 2,900-foot well will begin immediately and initially employ 50 workers for the 10day project. The company has 450 total wells under its belt. Ongoing employment would include one employee checking on the pump each day and another employee hauling oil with a truck every couple of days, he said. A decision is expected this week

on the drilling permit, said Hal Fitch, chief of the office of oil, gas and minerals with the Michigan De partment of Environmental Quality. Fitch said DEQ decided to delay its decision past the 50-day statutory period that ran out earlier this month after Jordan’s Oct. 29 application generated more than

1,500 comments. “There were only 20 to 30 opposing the project,” said Fitch, who described the details of the drilling permit application as not unusual compared with the dozens of others DEQ has received the past several years. SEE OIL, PAGE 17

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State budget: Decisions to make on surplus, less revenue in 2016

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LINDSAY VANHULLE Capitol Briefings lvanhulle@crain.com Twitter: @LindsayVanHulle

Revenue projections General fund revenue is expected to be down this fiscal year before rising again in 2017, according to consensus estimates reached last week by the state’s Treasury Depart ment and economic analysts with the House and Senate. This year, Michigan’s general fund is expected to have revenue of $9.8 billion, down nearly 2 percent from $10 billion in 2015. The state’s School Aid Fund is expected to have revenue of $12.1 billion, up 3.3 percent from the 2015 fiscal year. Michigan’s anticipated revenue problem this year is partly due to a drop in sales tax collections, the state said. Even though income tax collections were good, the state took a 1.5 percent sales tax hit last year due to lower gas prices, said David Zin, chief economist with the Senate Fiscal Agency. Gasoline purchases contributed $603.6 million in sales tax revenue in 2015, almost 27 percent less than the year before. The state also expects more companies to claim tax credit refunds under the old Michigan Business Tax in 2016 — an issue that caught the state off guard last year when the amount of credits under the now-defunct Michigan Economic Growth Authority program ballooned, prompting a $325 million midyear budget cut. Snyder’s administration recently negotiated caps on the value of credits that can be claimed by the Detroit 3 automakers, whose rising

payroll costs contributed to the problem. In the 2017 fiscal year, by contrast, general fund revenue is forecast to increase to $10.2 billion, a 3.8 percent increase over 2016. School Aid Fund revenue is expected to grow 2.9 percent in 2017 to $12.5 billion. By 2018, general fund revenue is forecast to grow 3.8 percent to $10.6 billion, while School Aid Fund revenue is projected to climb 2.8 percent to $12.8 billion.

Economic trends The reality of these estimates, however, depends on economic trends. Signs are indicating that the state’s post-recession recovery might be starting to mature, Gabriel Ehrlich, an economist and associate director of the University of Michi gan’s Research Seminar in Quantitative Economics , said during last week’s revenue conference. Job growth, led by manufacturing and especially the U.S. auto industry, is expected to temper in the next few years. UM economists predict job gains in the manufacturing sector will steadily erode until it ultimately sheds positions — to the tune of 2,000 — between 2017 and 2018. Even domestic auto sales, while continuing to flirt with record highs, are projected to slow down. Automakers tallied nearly 17.5 million light-vehicle sales in the U.S. in 2015. Analysts predict lightvehicle sales will reach 18 million within the next year or two before leveling off. Michigan should be able to recover 73 percent of the jobs lost during the last decade by 2018, UM economists said. If it happens as they predict, Michigan will have regained 624,700 jobs between the third quarter of 2009 and the end of 2018 — nearly three quarters of the 858,400 jobs lost between 2000 and 2009. 䡲

Detroit Lions close team store for redesign

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LANSING — Gov. Rick Snyder and lawmakers will have tough choices to make about how to spend a $575 million budget surplus as they start to prepare a spending plan for 2017. Flint will get some of the extra money, left over from unspent departmental funding and strong income tax collections, as it tries to contain a public health crisis over high levels of lead in the city’s drinking water and a possible outbreak of Legionnaires’ disease. The water trouble started after a state-appointed emergency manager decided to switch water sources from Detroit’s system to the more corrosive Flint River. The state’s budget director, John Roberts, told reporters last week that a state budget amendment strictly related to Flint will be out within weeks. Costs are still being calculated, Roberts said, but this budget revision is likely to address immediate needs — activation of the state’s emergency operations center, deploying the National Guard, the costs of distributing bottled water — rather than longer-term infrastructure upgrades. Some of the money will be set aside to cover unexpected costs this fiscal year, which started Oct. 1. The rest could wind up in the 2017 fiscal-year budget Snyder presents to the Legislature in February. But where? Roberts said Snyder will disclose his spending priorities with his proposal, adding that the administration prefers to use surplus funds on one-time expenses. Yet there are some likely choices — infuse the money into road or infrastructure projects, cover highpriced specialty drugs the state buys for Medicaid and incarcerated patients or bulk up the state’s reserves. “The biggest pressure for the administration and the Legislature to talk about is the specialty drugs,” he said. “That’s something we’ll continue to keep an eye on.”

CHICAGO

The Detroit Lions have closed their team store inside Ford Field so it can be renovated after the club changes its merchandise concessionaire. Details of what the new shop will look like won’t be known for several weeks, but Lions officials said the stadium architecture doesn’t allow expansion. The new store will be open before the 2016 National Football League season begins in August. It’s expected that the space’s game-day crowding will be alleviated somewhat by a redesign and the use of mobile point-of-sale tablets

by staffers to allow customers to buy items without waiting for a cash register — similar to how Apple Inc. stores work. The 5,500-square-foot retail shop inside the 13-year-old Detroit stadium has been managed since 2009 by Indianapolis-based MainGate Inc. That deal is expiring, and the Lions are in the process of negotiating a deal with an undisclosed replacement concessionaire, said Elizabeth Parkinson, the team’s senior vice president of marketing and partnerships. An announcement on the new concessionaire could come within a

month. Detroit got bids from four companies. Their names were not disclosed. Bill Shea

BANKRUPTCIES The following business filed for protection in U.S. Bankruptcy Court in Detroit Jan. 8-14. Under Chapter 11, a company files for reorganization. 䡲 Knight Capital Partners Inc. , 32611 Raphael Road, Farmington Hills, voluntary Chapter 11. Assets and liabilities not available.

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Bowie’s artwork selling Cleveland firm buys Godfrey Hammel briskly in Birmingham By Tom Henderson thenderson@crain.com

Godfrey, Hammel, Danneels & Co.

By Bill Shea bshea@crain.com

The Robert Kidd Gallery in Birmingham sold all but one piece of its collection of David Bowie’s original artwork within days of the iconic rocker’s death. Gallery director and co-owner Gerard Marti, who knew Bowie from an earlier career in music, said he’s rushing more of the late singer’s paintings from his galleries in Los Angeles and Maui, Hawaii. They’re expected to arrive this week. Marti has long curated celebrity art and said calls have been steadily coming into the gallery about the late singer’s paintings. “It’s been crazy,” said Marti, a French artist who has featured Bowie in his own work. Prices for Bowie artwork range from $1,500 to $7,000, he said. The gallery’s website lists a dozen Bowie pieces, including original acrylic-on-canvas paintings, and signed and numbered lithographs. They can be viewed at robertkiddgallery.com/people/ david-bowie. Other celebrity art available at the gallery includes pieces from John Lennon, Paul McCartney, Tony Bennett and Steven Tyler. Also for sale is artwork and photography of celebrities. Marti has co-owned the gallery since 2014 with Jennifer Vinklarek, a former advertising executive from Texas. The gallery operated as part of the estates of original owners Ray Fleming, who died in 2014, and Robert Kidd, who died in 2007. They founded the gallery in 1974. The gallery was on the verge of closing when Marti and Vinklarek bought it for an undisclosed sum. Plans are to retain the groundfloor gallery as customers have long known it, with five-figure artwork from local and noted artists such as “Spirit of Detroit” sculptor Marshall Fredericks. The lower level will be converted into more of a pop art gallery, Marti said, and plans include upcoming shows featuring Motown art and live entertainment. Tyler, the Aerosmith singer and a longtime friend of Marti, will be on hand later this year to showcase some of his paintings for sale at the gallery. The remaining Bowie piece at the gallery was a signed and numbered lithograph (out of 175) titled “Saucer II” that’s priced at $4,500. Bowie died Jan. 10 at age 69 in New York City after what has been reported as an 18-month struggle with liver cancer that he kept hidden from all but his family and confidants. The British singer and actor was known for such hits as “Changes,” “Space Oddity” and “Let’s Dance” while breaking performance ground with androgynous glam

COURTESY OF ROBERT KIDD GALLERY

“Child in Berlin” by David Bowie, a 35”x35” limited-edition lithograph, is on sale at the Robert Kidd Gallery in Birmingham. stage persona Ziggy Stardust and later the Thin White Duke character. He was inducted into the Rock and Roll Hall of Fame in 2006. Bowie’s 26th studio album, “Blackstar,” was released two days before his death. As of Friday morning, all of his albums had sold out on Amazon.com. 䡲 Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

PC , a St. Clair Shores-based accounting and consulting firm that goes back to 1920, has been bought by Cohen & Co. Ltd. of Cleveland. With 77 employees, Godfrey Hammel ranked No. 12 among the largest accounting firms in Southeast Michigan in Crain’s Book of Lists published earlier this month. The firm will be rebranded as Cohen & Co., effective Feb. 1, with current management remaining, according to Randy Myeroff, Cohen’s CEO. The firm will join Cohen’s private company services accounting practice, serving privately held companies. Terms were not announced. The combined firm will have revenue of more than $65 million. “We’re really excited about this,” said Myeroff. “We’d love to make a giant impact in this market, and this is the way to start. The drivers for us were that this is a great firm, and Detroit is a great market. Detroit has more target companies for us within 100 miles than Cleveland does.” Myeroff said talks with Godfrey Hammel began last April. “We had a strategy that we needed to grow, but carefully, and Detroit was an obvious market,” he said. “It’s Midwestern, like Cleveland,

“The drivers for us were that this is a great firm, and Detroit is a great market. Detroit has more target companies for us ... than Cleveland.” Randy Myeroff,Cohen & Co.

and it’s in its renaissance. Culturally, our firms are very similar. The more we talked, the clearer it was that we had a common approach and philosophy.” “We’re obviously very, very excited,” said Steven Guarini, Godfrey Hammel’s president. “When we started talking to the folks at Cohen, we became aware quickly that our cultures were very similar. “We came up with a tag line: We’re better together. There are going to be huge opportunities for our people because we’re going to grow the business significantly,” he said. “And our clients will benefit because we’ll have better bench strength. We’ll be able to offer a wider range of services.” According to Crain’s Book of Lists, the bulk of Godfrey Hammel’s employees, 39, are engaged in tax work; 16 are in auditing and accounting, seven are in consulting, and 15 were listed as engaged

in “other.” Cohen & Co., which employed about 330 before the Godfrey Hammel deal, also has offices in Akron, Ohio; Youngstown, Ohio; New York City; and Milwaukee. Farmington Hills-based UHY LLP’s similar size of 330 employees ranks it the fifthlargest accounting firm in Southeast Michigan. The deal is one of several in recent months involving local accounting firms. In November, Troy-based Rehmann LLC , the sixth-largest accounting firm in metro Detroit with 306 employees, announced it had bought Roegiers Goldin Chappel Nall & Associates of Stuart, Fla. In August, Troy-based Doeren Mayhew & Co. PC, the eighth-largest local accounting firm with 201 employees, announced it had bought Farmington-Hills-based Davis and Davis PC. 䡲 Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

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CRAIN’S DETROIT BUSINESS

OPINION Pot law must be clear on employer liability P

ersonal opinions on the regulation of marijuana use, particularly for treatment of certain kinds of medical conditions, run the gamut. For many employers, though, one of the big questions is legal liability. What if an employee, who legally uses marijuana to treat a condition, injures himself or others while operating equipment on the job? Providing better On the other hand, what if it is discovered that a highly valued state laws that and productive employee uses spell out an marijuana — on his or her own time and never before employer’s responsibilities coming to work — and responand liabilities is sibly? These are big questions that a worthy use of employers need to examine. lawmakers’ time. And the national fervor over pot legalization — plus newly introduced state legislation — means this issue is coming even further into the forefront. Providing better state laws that spell out an employer’s responsibilities and liabilities when it comes to workplace policies on employee use of marijuana is a worthy use of lawmakers’ time. (Read more about the recently introduced legislation in reporter Lindsay VanHulle’s story on Page 3.) It is far too early to know if the new House bill is a panacea for employer confusion; that is for the lawyers to decide. But we urge those in Lansing to take up this issue sooner rather than later. The long list of murky, confusingly worded state laws needs to be tackled — instead of growing longer.

Julie Brown: A compelling life story Last week, metro Detroit said goodbye to former auto supplier executive Julie Brown. Her death and subsequent funeral service took place without a public announcement; those who knew her say that private approach was exactly her style. Brown brought important diversity to the auto supplier world starting in the 1980s. She was born in Vietnam and built her company, Plastech Engineered Products, after a career as a Ford Motor Co. engineer. Although Plastech ultimately filed for Chapter 11 bankruptcy in 2008 after financial struggles, there was an era when Brown was celebrated for running the largest minority supplier in the business. Brown’s contributions, compelling story and challenges must be remembered — and can be instructional to others. See Philip Nussel’s blog on Julie Nguyen Brown, published by Crain’s sibling publication Automotive News, at www.autonews.com.

Poor spending decisions, plus teacher sickouts, add up to more woes for DPS e are surrounded by dysfunc-

Wtion, from bureaucrats who

apparently misjudged what would be required to make Flint River water suitable for human consumption to the series of missteps that led us to the kinds of conditions Detroit kids go to school with every day. In looking at photos and media reports on Mayor Mike Duggan’s tour of Detroit Public School buildings last week, I kept wondering: What happened to the $1.5 billion voters approved in 1994 to rebuild Detroit Public Schools? Most folks — Powerball players included — would agree that a billion dollars is a lot of money. And voters decided spending that much in 1994 to rebuild aging school buildings was a good idea. But hardly anything was spent by 1997, the year the architect of the bond vote, then-Superintendent David Snead, was ousted from his position. Snead was but one in a long line of school chiefs whose tenures were short. And there have been at least

MARY KRAMER: Publisher five emergency managers since the state seized control of the district because of its financial deficits. The bond money eventually was spent by the early 2000s. Just over a decade later, some of the same new, spiffy schools or rebuilt schools were shuttered and vacant. An analysis by the Detroit Free Press said nearly $440 million was wasted on schools that were shuttered soon after millions were invested. Why were those schools closed? Poor planning in the first place, perhaps. And the opening of Michigan to charter schools meant more competition, so enrollments in traditional public schools often

dipped. Nobody would want to work in or send their child to buildings with peeling paint, cold or too-hot classrooms or any of the other problems teachers have complained about. At the same time, the irony of the teacher sickouts is this: They probably have done more to steer students to charter schools that remain open than an advertising campaign would do. Parents — especially working parents — need to rely on dependable schools for their kids. The sickouts compound the problem of too few kids enrolled in too many buildings. We can expect more buildings to close as parents — and kids — vote with their feet. 䡲

Mary Kramer is publisher of Crain’s Detroit Business. Catch her take on business news at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760 and in her blog at www.crainsdetroit.com.

Decide to become a better decision-maker t’s

mid-January

and

we’re

I halfway through the first month

of a fresh, shiny new year. And with the new year comes that welcome — although sometimes stress-inducing — internal pressure to CHANGE. EVERYTHING. NOW! Of course our logical and reasoning brains know we can’t actually fix everything that needs some fixing about either our professional or personal routines in the first month of the year. And, really, why set yourself up to fail? Rather, what about making a resolution to make better decisions? During a December work trip, I devoured (along with a small bag of airline pretzels) a Harvard Business Review report on “The Art of Decision-Making.” Several authors over several related articles point out some things that are commonsense oriented — but take some serious discipline to do right. For instance, how can an organization leader actively work to block personal biases that sometimes get

JENNETTE SMITH: Editor in the way of the best solution emerging? One part of that could be formally asking a key person to play the role of devil’s advocate in the discussion. Another important skill to hone: How to strike just the right balance in encouraging “constructive conflict” among your team. Does your team feel comfortable having a vigorous debate over the fine points of planned strategy shift? Without it getting nasty or personal? This sort of thing takes practice — but the results speak for themselves. Decision-making in business

is an imperfect science; you make the best decision you can with the time and information that you have to work with. But, armed with a few tactics, like fostering constructive conflict and sometimes allowing an idea to ruminate — just a little bit longer — among the team can have big results. Think about it. What if the folks at Hewlett-Packard had gotten the timing and technology right on transitioning the Palm Pilot’s descendants into a truly viable competitor to Apple and Android? Closer to home, what if someone from the Motor City had conceived the first on-demand ride-sharing service? True innovation and good dayto-day decision-making practices are separate concepts, of course, but they do feed off each other. Part art and part science. Part guts and part facts. It’s fascinating, challenging, exasperating and alluring all at once. Here’s my wish you find your inner decision Jedi this year. 䡲

TALK ON THE WEB Snyder calls on Obama to declare water disaster in Flint This is an excellent way to get the federal government to pay for an antiquated water and sewage infrastructure that probably has been leaching lead to the Flint residents for decades.

Re: CRNA job cuts continue national outsourcing trend

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

Is it still worth becoming a CRNA — school loans, outsourcing, pay cuts, benefits cut, saturated job market?

come back and blame GM for years of polluting the water.

Silverexpress

I was talking to someone about this and told them the offered salary, and they said “sign me up.” Still a good gig, in my opinion.

Dave

Snyder really dropped the ball on

The state investigating itself? That works! Now the state is going to

this water problem in Flint. Carolyn Mazurkiewicz

Aralc

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Beaumont, Trinity, McLaren find time is right for bond sales By Jay Greene jgreene@crain.com

After several years of waiting for the tax-exempt bond market to improve, Beaumont Health and several other hospital systems based in Southeast Michigan have found the water is just right now for issuing municipal bonds. Next week, Beaumont plans to issue a $300 million series 2016-A bond through the Michigan Finance Authority . Credit rating agencies Moody’s Investor Services and Stan dard & Poor’s assigned the bonds ratings of A1 and A, respectively. “We have one obligated group and a single credit now,” said CEO John Fox, noting the 2014 merger of Beaumont Health System , Oakwood Healthcare and Botsford Health Care that created eight-hospital Beaumont Health. “It’s an attractive time to go out into the market.” Other health care systems agree. This month, Novi-based Trinity Health issued four fixed-rate revenue bonds totaling $556 million. Last year, Flint-based McLaren Health Care issued two fixed-rate bonds and a taxable bond that totaled $420.4 million. Nationally, over the past two years, hospitals have been on a bond selling spree, indicating that concerns over the Affordable Care Act’s Medicare payment cuts and other changes in the market have largely passed. Last September, Standard & Poor’s and Moody’s lifted their negative outlooks for nonprofit hospital bonds, citing positive impacts from health care reform. The negative watch warnings were in place since 2008. In 2015, nonprofit hospitals issued more than $18 billion in fixedrate municipal bonds, up from $12 billion in 2014, said Tampa, Fla.based HFA Partners. Much of the bonds last year were for refinancing debt on better terms, but the $300 million Beaumont bond sale is new money for new projects. Beaumont plans to use the money for several projects, including a new emergency department and proton therapy center at Beaumont Hospital in Royal Oak, expansion and renovation of a Beaumont medical center in Farmington Hills and renovation of the first-floor operating room at Beaumont Hospital, Troy. In January 2015, Beaumont Health issued a consolidated bond to refinance $398.4 million in debt that saved the new system $23.5 million. Beaumont’s total debt stands at $1.4 billion. Refinancing bonds is tricky sometimes. When issuing bonds, hospitals sometimes agree not to refinance for a set period of time. But sometimes, when rates are low enough, hospitals decide it is more cost effective to refinance and pay the “advance refunding” fee. Before last year, many nonprofit hospitals in Michigan, including Beaumont, had slowed capital investment the past five years because of the economy and Obamacare.

McLaren, which operates 12 Michigan hospitals, issued two fixedrate bonds last April through the Michigan Finance Authority and one taxable bond, totaling $420.4 million. They were rated AA- by Fitch Ratings. McLaren actually issued one single bond with two parts, 2015-A for $101.9 million, and 2015-B for $67.9 million; and a second single bond with two parts, 2015-D1 for $78.7 million and 2015-D2 for $75.4 million. The nonprofit company issued its first taxable bond for $96.3 million. “Rates were so low we were able to refinance a tax-exempt bond with a taxable bond,” said Dave

Mazurkiewicz, McLaren’s CFO and senior vice president. Mazurkiewicz said all three bonds refinanced higher-rate debt, saving the system $25.7 million. “We took advantage of market conditions to refinance,” he said. “The interest rates were as low as I’ve seen in my career. We did it for less than 4 percent.” In late summer or fall, McLaren plans to go to the market for a new bond issue to finance upgrades to its hospital in Port Huron, he said. Total debt for McLaren, which generated revenue of $2.9 billion last year, now is about $643 million.

Trinity Health, which operates 12 hospitals in Michigan and 86 total hospitals nationally in 21 states, issued the $556 million bonds through several authorities, including the Michigan Finance Authority ($271 million). Moody’s assigned an Aa3 rating to the bonds. The funds will be used to refinance older Trinity bonds and pay for new projects in Michigan, Maryland and Idaho. Early last year, Trinity issued three bonds totaling $1.45 billion, including about $350 million in taxable debt, the first time the nonprofit health system used the tax-

able market. Trinity has about $5.3 billion in debt with annual revenue of about $13.6 billion. Some $500 million was used to pay for new projects that are expected to total $3.3 billion from 2015 to 2018. In Michigan, Trinity plans several projects, including a new health care facility in Chelsea that includes surgery renovations and a cancer center; nursing home renovations in Grand Rapids and Livonia facilities; a new tower and bed renovations at St. Mary Mercy Hospital in Livonia. 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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Beaumont Health CEO sees future in consolidation electing a top management team was one of the first tasks John Fox accomplished when he was appointed CEO in March of eight-hospital Beaumont Health, Southeast Michigan’s newest integrated delivery system. By the fall of 2015, Fox was able to cross that priority off his list of things to do — by appointing 11 top executives — as part of what is expected to be a twoyear process to complete the consolidation that joined Beaumont Health System, Oakwood Healthcare and Botsford Health Care. Mirroring national consolidation trends in the wake of the Affordable Care Act, the three-way merger of Beaumont, Oakwood and Botsford was approved in September 2014. Beaumont, which once flirted with Henry Ford Health System, now is Southeast Michigan’s largest hospital system by inpatient market share, accounting for about 32 percent of all admissions. About one-third of Beaumont’s top 12 execs came from outside the system, including Fox, who had been CEO of Emory Healthcare in Atlanta. John Fox: Names “The pleasant surtop executive team. prise is that it is going very well. The organizations are very much complementary to each other, and we are seeing the value of the synergy” they have created, Fox said. Fox said a combined Beaumont will be much stronger for the future as the health care industry continues to face “significant financial pressure that will drive more consolidation.” New top executives include COO Carolyn Wilson, RN, from Fairview Health System in Minneapolis; Chief Compliance Officer Dawn Geisert, an attorney from Henry Ford Health; and Chief Nursing Officer Susan Grant from Emory Healthcare in Atlanta. Fox is still searching for a chief marketing officer. Longtime Beaumont CMO Mike Killian retired. Other top executives in place include former Botsford CEO Paul LaCasse, D.O., who now is executive vice president of post-acute and diversified business integration, a new position. Two top executives came from Oakwood: John Keuten, chief financial officer, and Mary Zatina, senior vice president of government relations and community affairs. Five top executives came from Beaumont, including David Wood, M.D., chief medical officer; Gordon Walker, chief legal officer; Subra Sripada, chief transformation officer and system chief information officer; J. Paul Conway, chief human resources officer; Margaret Cooney Casey, chief development officer. Other merger accomplishments include the following: common systemwide electronic medical record, creation of single employed medical group and progress made on streamlining clinical care services. For an expanded version of this story, see Jay Greene’s blog at www.crains detroit.com/greene.

SPECIAL REPORT:

HEALTH CARE

Crain’s reporter Jay Greene’s heart is shown in this image from his Ultimate Heart Check test.As cardiologist Joel Kahn explains it, there were no spots of calcium on the arteries, giving him a perfect score.

Off the beaten path New preventive tests help reporter get to the heart of healthy living early 30 years ago, my father died suddenly at age 62 from a heart attack. His death might have been prevented — or at least delayed 10 years or more — had he taken his prescribed medication or if he had eaten more fruits and vegetables, exercised more and kept his stress levels down. Needless to say, I was very upset when his VA doctor told me in May 1986 how he — the stubborn and headstrong former judge, lawyer and World War II Marine who had already beaten the Grim Reaper once during the war — had steadfastly refused to take his medicine. Once I told cardiologist Joel Kahn about it during a recent conversation about his new clinic, the Kahn Center for Cardiac Longevity, in Bloomfield Township and Grosse Pointe

JAY GREENE Senior Reporter jgreene@crain.com / Twitter: @jaygreene Farms, he suggested I would be the ideal candidate for his new Ultimate Heart Check, a multi-phase series of preventive tests that reveal early developing heart problems. “You are literally the avatar, the perfect candidate for this test,” said Kahn, who has been dubbed “America’s Holistic Heart Doctor” by Reader’s Digest.

“You feel fine, you are 61 with no personal history of heart disease, but you have a family history of heart disease, your labs are average” and I get regular annual physical exams, said Kahn, a professor at Wayne State University School of Medicine and Oakland University Beaumont School of Medicine. Family history of heart disease elevated me into the “intermediate” risk category, even though I don’t smoke and have good annual physical test results. Other risk factors for sudden heart attack include high cholesterol, high blood pressure, diabetes, smoking and excessive weight. Kahn is the author of several health books, including his most recent one, Dead Executives Don’t Get Bonuses. He argues in the book that few people take seriously the SEE HEART, PAGE 10

Molina, Common Ground aim to cut mental health hospital admissions, Page 12

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HEALTH CARE EXTRA

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statistic that heart disease has been America’s No. 1 killer for more than 50 years. “My goal is to prevent 1 million heart attacks over the next two years,” said Kahn. To this end, Kahn has become a strong advocate over the past 15 years of a once-controversial preventive heart attack screening test called the coronary artery/calcium (CA-CS) scan. The heart scan detects “hardening of the arteries” that continues to cause so many unexpected and preventable deaths. In 2014, heart disease led to 611,105 deaths, accounting for Kahn: People must nearly 25 per- take heart disease cent of all seriously. deaths that year, said the CDC in its 2014 report on causes of death. Cancer is a close No. 2, with 584,881 deaths. Of course my father knew he had heart disease and still continued on as if nothing was the matter. But thousands of people don’t know and end up unexpectedly “dropping dead.” An excellent Netflix documentary called “The Widowmaker” shows many examples of men and women dying of heart attacks without any warning signs — heart pain, arm pain, shortness of breath, discolored skin and so on. But more shocking is this statistic: Since 1983, more women have died of heart disease than men. And five times as many women die of heart attacks than of breast cancer. It is safe to say that Kahn’s advocacy of the coronary calcium scan — also known as the “mammogram of the heart” — is five times more important to women as a mammogram of the breast. For men, the coronary calcium scan, which takes detailed pictures of the heart to identify calcium buildup in the arteries, is more important than the annual prostate test, Kahn said.

A changing consensus After years of debate, the Ameri can College of Cardiology and the American Heart Association finally acknowledged in 2012 that the calcium test can be beneficial for people over age 45 with low to intermediate risk factors for heart disease. For years, the professional associations and interventional cardiologists, many of whom were primarily trained in treating heart attacks with angioplasty and stenting, downplayed the benefits of calcium scans for people with intermediate heart attack risks. They were concerned about radiation exposure and overuse of preventive testing. But a growing number of pioneering preventive health cardiologists like Kahn and Shukri David, M.D., chairman of cardiology at St. John Providence Health System , are

now recommending the calcium scan for patients who have high cholesterol and a family history of heart disease. Other risk factors could include high blood pressure, diabetes, smoking and excessive weight. One reason is that simple stress tests and EKGs are not as predictive of heart attacks as most once thought, Kahn said. For example, several asymptomatic executives, including former President Bill Clinton, took annual stress tests that failed to adequately identify their heart problems. In 2004, Clinton had quadruple coronary artery bypass surgery shortly after an episode of angina while on the campaign trail with John Kerry. He had passed several stress tests as president. Kahn says there are far too many people like Clinton who feel quite normal but really have hearts with arteries that are clogging with cholesterol, plaque and calcium buildup. To help identify people who have early stage heart disease, Kahn recommends people with at least one accepted risk factor take the inexpensive heart screening test to identify how much calcium is in their arteries. He also recommends advanced lab tests. “We can prevent a lot of death and suffering if we early detect problems and get people to exercise more, sleep more, reduce stress and eat healthy,” he said. David at St. John also recommends the calcium scan for his patients with intermediate risks. These risks include family history, hypertension, diabetes, kidney disease and family members under age 55 who had coronary artery disease treated with stent or coronary bypass surgery. “If someone has a (calcium) score, they have coronary artery disease. Unless there are contraindications, I treat very aggressively. I want to check their lipids; if they are not favorable, then statins (drugs to lower cholesterol) become a big part of the treatment,” said David, noting that calcium scores of less than 100 generally indicate mild plaquing in the arteries, but scores of 1,000 or above shows significant coronary artery disease. “This is only a test; the most important part is really talking with your patient and obtaining a detailed history,” he said. Toward this goal and based on my family history, Kahn offered me a free Ultimate Heart Check — normally it costs $999 — to ascertain the condition of my heart and arteries. Along with the calcium scan and the other tests I received (not included in Kahn’s heart check and outlined below), the total for all the tests I received came to about $1,150. “This is the same test (calcium scan) now given to astronauts and the president of the United States,” he said. So, after checking with my editors about accepting the gift, I deCONTINUED ON NEXT PAGE

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HEALTH CARE Since the late 1980s, when both stents and scans became available, more than 4 million men and women have died of sudden heart attack. Despite more people like me who are aware of these heart calcium scans and related tests, the numbers of deaths are increasing. FROM PREVIOUS PAGE

cided to go forward with the tests and write about my experiences. Right now, only Texas mandates health insurers to cover the calcium screening test. Michigan does not cover it, as I was informed when I registered at DMC Harper University Hospital. Before my first of two office visits and one Skype visit, Kahn asked for my latest annual physical lab results. Kahn received this info from Matt Ewald at Stonebrooke Family Physicians , a very good doctor who usually advises me each year to eat more fiber and vegetables to “increase your good cholesterol” and “lower your triglycerides.” I must digress to let you all know that I — the ex-jock who never smoked and partake each week in only a few martinis, maybe a beer or glass of wine and an occasional shot of vodka — am in unusually good health. Kahn knew that before beginning, but I did have that one risk factor — my father’s death — that increased my risk from low to intermediate. With the exception of nagging sports injuries that slow me down, my total cholesterol (under 100 when I was 35) is still about average at 200, my heart rate is 64 beats per minute and blood pressure also below average at about 120 over 88. The next step was to pay $30 for a blood and urine sample draw at Emcura Medical in Bloomfield Township. Kahn wanted a set of advanced lab tests that he sent to the Cleveland Clinic for special analysis. Two days later, I paid $75 for the coronary calcium scan at DMC Harper. Other hospitals, including Beaumont Hospital , charge higher rates, $125 or more. Still, this is a good price even though it is not covered as a preventive test by insurance. Besides the advanced lab test and the calcium scan, the Ultimate Heart Check includes a simple hand scan to measure antioxidant levels in your skin, which for me was low at 10,000, proving to Kahn I was not eating enough fruits and veggies. “The test doesn’t lie,” said Kahn, a vegan and an exercise nut who is disappointed his score is only 70,000. “I would like 80,000.” The maximum score is 90,000.

How the scan is conducted As for the calcium scan, Kahn told me it takes 10 seconds for the machine to make the images. Actually, it took a little longer if I add in the 15-minute wait in the Harper lobby, 15 minutes to complete outpatient registration and 30 more minutes of waiting in the CT/MRI scanning suite before my test. The actual calcium scan, which

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Developed by the Cleveland Clinic, studies have shown patients with high levels of TMAO are two to 2 1/2 times more likely to have a cardiac event than those with lower levels. My TMAO test came out normal. “You are darn lucky,” Kahn said about how I aced all my tests. To reduce heart attack risk, Kahn recommends people stop smoking, maintain a healthy body mass index, exercise, eat more vegetables and fruits, watch less than one hour of TV per day and drink up to one ounce of alcohol per day.

Final thoughts COURTESY JAY GREENE

Gale Greene, father of Crain’s reporter Jay Greene, was about 55 in this photo, taken

at his Sarasota, Fla., law office.

was administered by a good-humored technician, took about 10 minutes. After various adjustments back and forth, and holding my breath several times, the test was done. The next morning Joel called me to let me know he was happy to report that I had a zero calcium score. This means I have no detectable calcium in my coronary arteries. The range is zero to more than 1,000. People with 1,000 or more are in trouble, meaning they could have advanced blockages that could require stents or bypass surgery. The next morning, I took the carotid artery test, an interesting ultrasound taken on either side of your neck. The “carotid intimal-medial thickness,” or CIMT, test measures the thickness of the inner two layers of the carotid artery. This inner measurement and score compared with people of similar age is offered only at Kahn’s clinic. Unlike the calcium scan, the CIMT measures “soft plaque,” which can, over time, turn calcified. The test also indicates stroke risk. The CIMT ultrasound test, which was administered by Lisa Ostrovsky of Kahn’s clinic and Jolene Mueller of Vasolabs in Bountiful, Utah, is part of Kahn’s Ultimate Heart Check. I scored a three, which is well below average, and showed no soft plaque. My advanced labs check identified a few common issues like a low vitamin D level and a slightly high cholesterol value. Kahn advised me to eat more fruit and vegetables, less red meat, a green smoothie in the morning and a broader multi-vitamin with more plant-based supplements. He also informed me I am one of the first patients in Michigan to take the Cleveland Clinic’s trimethylamine-N-oxide blood test, or TMAO, which is part of my advanced labs.

Since the late 1980s, when both stents and scans became available, more than 4 million men and women have died of sudden heart attack. Stents have saved lives, but for these 4 million, that option was too late. Despite more people like me who are aware of these heart calcium scans and related tests, the numbers of deaths are increasing. Why? The “Widowmaker” documentary said one of the biggest enemies to encouraging more people to get scans has been the health insurance industry. “The Widowmaker” asked this question: Why do insurers pay $50,000 for a stent and yet not cover a $100 to $200 calcium heart scan? The reasons are unclear. However, a medical physicist was quoted in “The Widowmaker” as saying insurers had told him the typical policyholder is only in their plan for five years. Because the scan detects mostly long-term problems, savings from expensive stents could go to their competitors, he said. Humana media Former spokesman Wendell Potter told the “Widowmaker” producers that the insurance system isn’t designed and functioning for prevention and long-term cost savings. Despite some improvements and notable exceptions, our health care delivery system continues to be more of a “disease treatment system” designed to maximize profit for participants, he said. Regardless of whom to blame, the bottom line is it is up to us to live healthier lives. As patients, if we are lucky to have insurance and a primary care doctor, it is up to us to ask our doctors more questions about our health care. Are we eating nutritious foods, are we getting enough sleep and exercise, are we managing our stress? And are we taking the best preventive tests and getting the best data possible during our annual physical exams? I am now. But I still have work to do. 䡲

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HEALTH CARE EXTRA

Molina, Common Ground work to reduce mental health admissions By Jay Greene jgreene@crain.com

A partnership between Molina Healthcare of Michigan and mental health provider Common Ground in Bloomfield Hills is tackling arguably the most expensive and chronically ill patients in the health care system: those who are dually enrolled in the Medicare and Medicaid programs. Nationally, 9 million dual-eligible patients, including 200,000 in Michigan, account for 40 percent of all Medicaid spending and 27 percent of all Medicare spending. Care costs total about $350 billion a year, or 9 percent of the nation’s $4 billion annual health care tab. The Molina-Common Ground contract is one example of providers working together to cut into those high costs. It works like this: Under the contract, participating hospitals in Genesee County contact Common Ground when a Molina member comes into the emergency department with an acute mental health problem. Within 30 minutes, a member of Common Ground’s crisis intervention and recovery team arrives at the hospital to assess the Molina member, said Heather Rae, CEO of Common Ground. Upon consultation with the hospital emergency doctor, the patient is either admitted to the hospital or diverted to Common Ground, where the patient receives a minimum of 30 days of outpatient care, Rae said. If hospitalized, the individual is followed by Common Ground through face-to-face encounters and by telephone for 30 days. Participating hospitals in Genesee County include McLaren Flint and Hurley Medical Center in Flint. During the first year of the project, which began in early 2014, 19 of 39 patients, or 49 percent, who went to a hospital ER in Genesee County were successfully diverted to recover at home and were not admitted. Molina netted savings of $75,825 after paying Common Ground for its services, which led to a return on investment of 4.15 to 1. “The savings are significant,” said Jim Forshee, M.D., Molina’s medical director. “We want to expand this program. Some of these patients don’t need to be hospitalized. Outpatient care is a better alternative.” Patients with mental health issues end up at a hospital ER for a variety of reasons. “They have a suicide threat, they aren’t sleeping well, maybe they are abusive with family members or have a medication problem because their meds have changed,”

“The program is about providing quality alternatives to psychiatric inpatient hospitalization, not about preventing needed admission.” HeatherRae,Common Ground

Rae said. “Usually it is after 5 p.m., and they have no place to go.” Forshee said most patients who go to ERs with behavioral problems are in a crisis situation. “They have domestic problems, emotional outbursts and are sick,” Forshee said. “Some are hearing voices and seeing spiders.” Rae said too many people with mental health issues are admitted to hospitals for observation and treatment because ER staff are more trained to manage medical emergencies and not deal with mental illness. “The program is about providing quality alternatives to psychiatric inpatient hospitalization, not about preventing people from a needed admission to the hospital,” said Rae. Rae said the ER intervention concept was the brainchild of former CEO Tony Rothschild, who retired from Common Ground in October. “Molina was very interested,” Rae said. “These programs have better outcomes at a lower cost to taxpayers.” Common Ground is paid two separate fees — initial assessment and 30 days of outpatient services. “This is not a revenue center,” Rae said. “We don’t make a lot of money on it because it isn’t our purpose.”

Broader efforts Last March, a federal demonstration program began in Michigan and nine other states to reduce costs of thousands of dual-eligible patients and to improve their care coordination. Under a contract with the Michi gan Department of Health and Human Services , Troy-based Molina is tak-

ing care of several thousand dually eligible Medicare and Medicaid patients in a federal demonstration program in Macomb and Wayne counties. Molina is one of seven other HMOs and four mental health agencies participating in the Cen ters for Medicare and Medicaid Ser vices ’ demonstration in Michigan.

The goal is to cut 7 percent of costs over the next three years. Because the dual-eligible population is growing, Molina expects to expand the ER diversion program with Common Ground and other mental health providers. Forshee

said the top reason for a dual-eligible patient admission to a hospital is behavioral health issues. “Half of the visits of dual-eligible patients with mental health issues are now admitted,” said Forshee, noting that before the program began, almost all ER visits with mental health problems resulted in admission. Greg Matzelle, Molina’s behavioral health manager, said only one patient so far has been readmitted to a hospital in the same week after being assessed. “We try to empower the patient to go back to their medical home and primary care physician,” he said. Rae said Common Ground and Molina are talking about extending the joint program into Oakland County, where Molina estimates about 200 Molina patients could use the service in 2016. Forshee said cost savings in Oakland County could be higher because there are more dual-eligible patients and because Common Ground has more resources. For example, Rae said that last year Common Ground added two new services to its Oakland County program: a 23-hour medically supervised observation program and a crisis residential unit at Common Ground’s Resource and Crisis Center at the Oakland County governmental complex for county workers and other patients. Over the past 10 years, Common Ground has helped Oakland County save money by reducing the number of employees admitted to hospitals for behavioral health issues. Rae said Common Ground would like to expand the program to other health plans in Genesee, Oakland, Wayne and Macomb counties. It also is talking with another HMO in West Michigan, she said. Another benefit to the ER diversion program is that it has helped alleviate the shortage of psychiatric beds in hospitals. “Nurses sometimes have to search around for an available bed, sometimes in a different unit,” he said. “We’ve had patients transfer from Genesee County to Macomb County for a bed.” 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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ACQUISITIONS & MERGERS Material Sciences Corp., Canton

Township, producer of painted and laminated products, has acquired Continuous Color Coat Ltd., Rexdale, Ontario, recognized in the market by its trade name Metal Koting. Metal Koting provides galvanized, painted and printed steel and aluminum coils to a variety of companies in the construction, automotive, leisure product and packaging industries. Websites: materialsciencescorp.com, metalkoting.com. Penske Automotive Group Inc.,

Bloomfield Hills, an international transportation services company, has acquired a 49 percent equity ownership interest in the Nicole Group, a luxury dealership group with operations in Kanagawa and Tokyo, Japan. The Nicole dealership group operates four BMW and three Mini dealerships, a Rolls-Royce and a Ferrari dealership, along with two stand-alone service centers and two used-vehicle showrooms. Website: penskeautomotive.com.

CONTRACTS Ulliance Inc., Troy, a provider of

human resources services, has been retained to provide the

DEALS & DETAILS Voice Your Concern Report Line, an anonymous employee reporting line, to Green Brick Partners Inc., Plano, Texas, a real estate developer. Also, the company will provide wellness seminars to employees of Faurecia North America Inc., Auburn Hills, and provide Life Advisor Employee Assistance Programs to manage workplace conflicts, address personal concerns and life challenges, to Authority Health, Detroit, the Detroit Wayne County Health Authority’s community-based teaching health center. Website: ulliance.com.

SRG Global with PR counsel, global publicity and media relations support. Websites: bianchipr.com, srgglobal.com.

Bianchi Public Relations Inc., Troy, has been named PR agency by SRG Global Inc., Warren, a subsidiary of Guardian Industries Corp. and manufacturer of high-value coatings on plastic for the automotive, commercial truck and consumer goods industry. Bianchi PR will provide

Rubicon Genomics Inc., Ann Arbor, a provider of pre-analytical library preparation kits for the research market, has added distributors Delonix Healthcare Pvt. Ltd., a provider of advanced scientific tools, products and technologies to research industrial biotech, pharmaceutical

CALENDAR TUESDAY JAN. 19

The Big Four. 11:30 a.m.-1:30 p.m. Detroit Economic Club. Featuring Oakland County Executive L. Brooks Patterson, Detroit Mayor Mike Duggan, Wayne County Executive Warren Evans and Warren County Executive Mark Hackel. Moderated by Carol Cain, senior producer and host of CBS 62’s “Michigan Matters” and Detroit Free Press columnist. Cobo Center, Detroit. $45 DEC members, $55 guests of members, $75 nonmembers. Phone: (313) 963-8547; email: info@econclub.org.

5:30-8 p.m. Automotive Industry Action Group. Former Detroit Free Press Reporter David Ashenfelter, who recently emerged victorious from an 11-year legal battle to protect his source(s) from a former federal prosecutor, will speak. Automotive Industry Action Group, Southfield. $25 for Association for Women in Communications and Detroit Press Club members, $35 nonmembers, $15 students and recent graduates. Contact: Catherine Ticer, (248) 514-1441; email: catherine@catherineticer.com.

Pogoda Cos. Inc., Farmington Hills, specializing in the management of self-storage properties, has been awarded four new contracts in the Grand Rapids market. The locations were purchased in December by local investor GRW Investments LLC and will operate under Pogoda’s trademarked name, National Storage Centers. The properties offer over 145,000 square feet of rentable storage space. Website: pogodaco.com.

Inside the CEO Mind: Paul Glantz. 8-10 a.m. Feb. 3. Detroit Regional Chamber. Glantz, founder of Emagine Theatre and the driving force behind Emagine Entertainment Inc., shares his story of becoming a cinematic expert and innovator. $30 DRC members, $55 nonmembers. Emagine Royal Oak. Contact: Marianne Alabastro, (313) 596-0479; email: malabast@detroitchamber.com.

WEDNESDAY

UPCOMING EVENTS

Technology Industry Outlook. 8-11 a.m. Feb. 22. Automation Alley. The key findings of Automation Alley’s annual technology industry report will be discussed. Detroit Institute of Arts, Detroit. $25 members, $45 nonmembers. Contact: Lori Podsiadlik, (248) 457-3212; email: podsiadlikl@ automationalley.com.

JAN. 20

Global Economic and Industry Outlook for 2016 and Beyond. 8-10:30 a.m. Jan. 27. Automation Alley. A dis-

Detroit Policy Conference. 7:30 a.m. Feb. 24. Detroit Regional

Germany: The European Engine of Eco nomic Growth. 8:30-11:00 a.m. Au-

tomation Alley. An overview of Hannover Messe, the world’s leading trade fair for industrial technology. Automation Alley, Troy. $40, $20 members. Contact: Lisa Lasser, (248) 457-3200; email: info@auto mationalley.com. Automotive Industry Outlook: Oppor tunities & Risks for 2016. 5-8 p.m.

Marketing & Sales Executives of Detroit. Mike Wall, director of automotive analysis, IHS Automotive, will present the IHS Automotive outlook. Management Education Center, Troy. $45 members, $60 nonmembers. Website: www.msedetroit.org.

THURSDAY JAN. 21

A battle to protect source identity.

cussion on the shifting dynamics of the global economy and how companies can best position themselves to take advantage of the opportunities and challenges of doing business overseas. Keynote speaker: Jim Glassman, managing director, J.P. Morgan Chase and Co. Automation Alley, Troy. $40, $20 members. Contact: Lisa Lasser, (248) 457-3200; email: info@automationalley.com. Professional Leadership — The Jack Aronson Story. 7:30-9 a.m. Feb. 3.

Leadership Oakland. Featuring Jack Aronson, founder, Garden Fresh. MSU Management Education Center, Troy. $32 members, $36 nonmembers. Website: leadershipoakland.com.

Chamber. Keynote remarks by David Maraniss, Pulitzer Prizewinning journalist. MotorCity Casino Hotel, Detroit. $159 chamber members, $225 nonmembers. Contact: Janelle Arbuckle, (313) 596-0340; email: jarbuckle@detroitchamber.org. Calendar guidelines. Visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” from the drop-down menu that will appear. Fill out the submission form, then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events.

and research hospital sectors in India and Biocena Ltd., a life science distributor in Poland. Website: rubicongenomics.com.

EXPANSIONS Hanon Systems USA LLC, Van Buren Township (formerly Halla Visteon Climate Control Corp.), part of Hanon Systems Corp., Daejeon, South Korea, and a provider of automotive thermal solutions, plans a new U.S. manufacturing facility in Carey, Ohio. Production at the Ohio facility is expected to begin in mid2017. Initially, the facility will injection-mold and assemble ecofriendly heating, ventilation and air conditioning modules on future model year vehicles for global automakers. Website: hanonsystems.com. Shazaaam! LLC, Novi, a public relations and marketing firm, and Trent Creative, Rochester, a marketing design agency, announced the opening of their shared Detroit office space at 71 Garfield St., Suite 160B, Detroit. Websites: shazaaam.com, trentcreative.com.

MOVES The Siegfried Group LLP, an accounting firm, has moved from 200 Town Centre, Suite 1900, Southfield, to One Woodward Ave., Suite 1050, Detroit. Telephone: (313) 230-2660.

13 Website: siegfriedgroup.com.

NEW PRODUCTS DiaSys Diagnostic Systems USA LLC,

Wixom, announced its veterinary division is launching the respons 920VET Clinical Chemistry Analyzer, offering greater testing capacity to higher-volume laboratories with 200 tests per hour. The respons 910VET, launched last year, is for low- to mid-volume veterinary laboratories with 100-150 tests per hour. Website: diasys-us.com.

NEW SERVICES Practice Transformation Institute,

Troy, a provider of continuing medical education and customized learning programs, announced a pharmacy care management training program designed to integrate doctors of pharmacy, registered pharmacists and pharmacy technicians into the inter-professional health care team. The coursework is a blend of online courses and inperson training. Website: transformcoach.org. 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.

Newsmakers of Year luncheon set for Feb. 9 In Detroit, big ideas frequently start with an I. More precisely, an Ilitch. The father-and-son duo of Mike Ilitch and Chris Ilitch, for their work building The District Detroit, which will be anchored by the new Red Wings arena, and for funding the Mike Ilitch School of Business at Wayne State University, will be among those honored as Crain’s top Newsmakers of the Year for 2015. Nine other 2015 Newsmakers also will be honored at an annual luncheon for reasons ranging from merger and acquisition deals to economic development. The event is set for 11:30 a.m.1:30 p.m. Feb. 9 at the Motor City Casino Hotel, Detroit.

Chris (left) and Mike Ilitch

Tickets: $75; $65 students; $800 for reserved table of 10. Preregistration closes Feb. 5 at 9 a.m. If available, walk-in registration will be $95 per person. Purchase tickets at crainsdetroit.com/events. Questions: Kacey Anderson, email: cdbevents@crain.com, call (313) 446-0300.

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PEOPLE: SPOTLIGHT

ADVERTISING SECTION

AUTOMOTIVE

ARCHITECTURE Melanie Berger Studio Leader, Healthcare Design Studio Harley Ellis Devereaux (HED) HED has appointed Melanie Berger, CPSM, as Studio Leader, Healthcare Design Studio. In this role, Berger will lead healthcare client development and assist in managing the studio’s business operations. Berger brings more than 20 years of business development expertise to HED, including previous experience at AECOM and Parsons.

Larry Rollins

Meredith E. Freeman

Chief Operating Officer

Senior Program Officer

Henniges Automotive

Max M. & Marjorie S. Fisher Foundation

Rollins was promoted to Chief Operating Officer for Henniges Automotive in November 2015 with responsibility for regional Operations (North America, Europe and Asia) in addition to Global Engineering and Program Management. Larry has been with Henniges since the beginning of his career in 1988 and has taken on positions of greater responsibility over the years in manufacturing and plant management. Larry earned his Bachelor of Science degree from Cameron University.

Larry Williams Interim CEO, Chief Financial Officer and Head of Legal Affairs Henniges Automotive

David Jaeger Studio Leader, Healthcare Design Studio Harley Ellis Devereaux (HED) HED has appointed David Jaeger, AIA, LEED AP, EDAC, as Studio Leader, Healthcare Design Studio. Jaeger will continue to lead healthcare planning and design for the firm along with continued involvement in project development. With 32 years of experience designing healthcare environments, Jaeger works with clients to implement lean design solutions that focus on effective use of space to enhance the patient and staff experience.

Williams, a proven leader with over 25 years of experience, was appointed as interim Chief Executive Officer for Henniges Automotive. In addition, Larry will continue with his current responsibilities as Chief Financial Officer and Head of Legal Affairs. Larry joined Henniges in March 2003 and prior to joining he was Director of Finance for GDX Automotive North America & Europe. Larry earned his MBA from Butler University and earned a Bachelor of Science from Central Michigan University.

LAW

Christopher Vogelheim

Stefan D. Osterbur

Studio Leader, Science & Technology Design Studio

Of Counsel

Harley Ellis Devereaux (HED) Christopher Vogelheim, AIA, LEED AP, has joined HED as Studio Leader, Science & Technology Design Studio. Vogelheim will lead all aspects of the firm’s Science & Technology Studio in the Detroit area. With 23 years of architectural design and leadership experience, Vogelheim’s expertise spans across projects of varied scope and complexity. Prior to joining HED, Vogelheim most recently served as Facilities Practice Leader at AECOM.

E. James Zwolensky Studio Leader, Higher Education Design Studio Harley Ellis Devereaux (HED) E. James Zwolensky, AIA, LEED AP, has joined HED as Studio Leader, Higher Education Design Studio. Zwolensky will lead all aspects of the firm’s Higher Education Studio in the Detroit area. With over 25 years of experience in architecture and project leadership, Zwolensky’s expertise spans across projects of varied scope and complexity. Prior to joining HED, Zwolensky most recently served as Senior Project Manager at Stantec.

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

NONPROFITS

Reising Ethington P.C. An experienced patent attorney, Stefan Osterbur’s practice is directed to domestic and foreign patent prosecution, preparation of legal opinions concerning patent infringement and validity issues, trade secrets and intellectual property litigation. Osterbur comes to Reising Ethington from Fishman Stewart Yamaguchi PLLC (formerly Rader, Fishman, & Grauer PLLC), where he was a Partner. His experience includes patent portfolio management, infringement and clearance issues, and IP transactions.

In her new role, Freeman will focus on supporting the overall grant making work of the foundation. Meredith was program director for the Fair Food Network and was one of the chief architects of the Michigan Good Food Fund. She was selected in 2014 for a three-year fellowship with the Kellogg Foundation Community Leadership Network.

TELECOMMUNICATIONS Craig D’Agostini Vice President of Government Affairs Comcast D’Agostini oversees all government and community affairs for Comcast. His responsibilities include overseeing franchise and regulatory compliance and managing community investment initiatives, including the company’s Internet Essentials program. D’Agostini has 16 years of experience in the telecommunications and cable industries. Most recently, he served as senior director of government affairs for Comcast in Houston.

Parvathy Hariharan Vice President of Customer Experience Strategy

Lions name Patriots exec Bob Quinn as GM Moving relatively quickly to fill the post once their season ended, the Detroit Lions introduced Bob Quinn as general manager. The Lions agreed to a deal during the first week they were allowed to inBob Quinn terview candidates from other National Football League teams. Quinn, 39, had various roles within the New England Patriots’ personnel department for 16 years, including the past four as director of pro scouting, as the team won four Super Bowls. Quinn replaced Martin Mayhew, fired in November along with Lions President Tom Lewand after a 1-7 start to the season. The team hired Ford family adviser Rod Wood as president. No details were disclosed on terms of Quinn’s contract.

Schmitt appointed COO of United Shore league Andy Appleby didn’t look far for the top executive to manage the day-today operations of his new United Shore Professional Baseball League in

Comcast Hariharan oversees Comcast's efforts to implement the company’s multi-year strategy to transform the customer experience and to create a culture focused on exceeding customers’ expectations. Hariharan comes to Comcast from Deloitte Consulting LLP in Detroit, where she held several leadership positions. She has significant experience in building customer retention strategies for major clients.

Utica. Appleby’s Dana Schmitt

General Sports and Entertainment said that Dana Schmitt, his

longtime COO and general counsel, will become COO of the independent developmental league to begin in June. Schmitt, a 2005 Crain’s 40 under 40 honoree, will be in charge of league, ballpark and team operations. Also newly hired were Brian Berryman, as executive director of baseball operations; Matthew Schul, vice president of corporate partnerships; Rod Emmons, vice president of tickets, groups and premium sales; Theresa Doan, vice president of marketing and public relations; Tim Dameron, director of promotions in charge of game presentation and promotions; and Josh Hartman, senior account manager, corporate partnerships.

UM institute names Sayer The University of Michigan named James Sayer director of the UM Transportation Research Institute. He’ll replace interim director Carol Flannagan March 1. Sayer is head of the human factors group at UMTRI and an adjunct professor of civil and environmental engineering at the university. 䡲

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an employee’s job performance, especially if that use happened outside of work hours. The intent is to prevent blanket firings and discrimination against workers who use the drug — still considered an illegal controlled substance under federal law — for medical purposes, Singh said. Some attorneys who specialize in employment law, however, caution that the bill as written is ripe for litigation, due to language they perceive as vague and overly broad. For instance, the bill’s wording requires employers to show the marijuana use “is not incompatible with and does not hinder job performance” — a phrase some lawyers believe takes the unusual step of placing the burden of proof on employers. The bill also would prevent employers from asking whether a worker has a medical marijuana card unless he or she faces discipline or termination for a “specific incident involving marijuana” and showing the card would prevent the job action. “In my opinion, this is creating almost a special exempt class for the use of marijuana,” said Terry Bonnette, a partner with Nemeth Law PC in Detroit. “What does a specific incident involving marijuana mean?” Bonnette said. “If I am doing a random drug screen and an employee tests positive for marijuana in that random drug screen, is that a specific incident involving marijuana? Or does there have to be, for example, a workplace incident? Does an employee have to drive a hi-lo into a loading dock for me to

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say, yes, there is an incident?” Singh said the wording was intentional, in order to give employers flexibility when dealing with situations on a case-by-case basis. A drug test likely would trigger the job action, he said. “You’d have to have some very strong compelling reason as an employer to suggest that somebody’s medical marijuana use on their off time is impacting their performance that would cause a detriment to your company,” Singh said. “The onus really is back onto the employer to make the case for this — versus the other way around — which is automatically being able to assume it is adversely affecting the individual.”

Criticism of the law Michigan’s 2008 voter-initiated medical marijuana law has been criticized for its broadness since the start. A notable example is the debate about whether dispensaries that proliferated in cities such as Detroit are legal. Lawmakers this session have taken up bills to more strictly regulate the medical marijuana industry, including allowing edible marijuana products and setting up a so-called “seed-to-sale” tracking system. The bills cleared the House but have stalled in the Senate’s judiciary committee; its chairman, Sen. Rick Jones, has asked Senate Majority Leader Arlan Meekhof to discharge the bills for a vote in the full chamber. But the law largely has steered clear of private employers. Judges, including the federal appeals court panel that decided Casias’ case, have interpreted the law as not extending to businesses. “We find, however, that the statute never expressly refers to employment,

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Redwood Dental Group Expansion of the Practice Redwood Dental Group first opened its doors with its Warren location in 1962. Over the years they have added to their practice with offices in Shelby Township, Troy, Westland, Madison Heights and St. Clair Shores. In November 2015 they opened their location in Canton and will continue expansions with their Woodhaven office opening in spring 2016. For more information on Redwood Dental Group locations and services please visit our website:

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15 at work came back positive. Casias lost his job.

About the bill A bill introduced by state Rep. Sam Singh, D-East Lansing, would prohibit employers from firing or otherwise disciplining an employee solely on the basis of the worker’s status as a medical marijuana patient. House Bill 5161 was introduced in December and was referred to the House commerce and trade committee. The bill would amend Section 4 of the state’s 2008 medical marijuana law to prohibit employers from terminating or taking adverse employment action against an employee for medical use of marijuana “if the use is not incompatible with and does not hinder job performance and the employee produces his or her registry identification card for the employer’s inspection,” the legislation states. In addition, the amended law would prohibit employers from terminating or taking adverse employment action against an employee after failure to produce a registry identification card unless the employee is subject to termination or adverse employment action for a specific incident involving marijuana “and production of the card would preclude the termination or action.”

nor does it require or imply the inclusion of private employment in its discussion of occupational or professional licensing boards,” the appeals court ruled in a majority opinion in Casias v.Wal-Mart, et. al. “The statutory language of the (law) does not support Plaintiff’s interpretation that the statute provides protection against disciplinary actions by a business, inasmuch as the statute fails to regulate private employment actions.” Bonnette, of Nemeth Law, says he doesn’t believe the law needs further clarification. The amendment being proposed would preclude employers from enforcing their existing drug policies, he added. Mohammed Arsiwala, M.D., has a zero-tolerance drug policy for his roughly 200 employees at Livoniabased Michigan Urgent Care and Occupational Health , which operates 10 clinics in Southeast Michigan. Michigan Urgent Care conducts random drug screenings, for which employees are drawn through a

computer-generated system. (Arsiwala said he was tested twice himself last year.) Under a zero-tolerance policy, if an employee tested positive for THC, the main chemical in marijuana, “basically that person would lose their job,” Arsiwala said. But marijuana can show up on a drug test for a while after a person uses it. And under the bill, someone would have to determine whether the employee was under the influence at the time of the random test or after a workplace safety incident, he said. “Of course it’s going to be difficult to enforce,” Arsiwala said. In Casias’ case, he told a court he had been using the drug to treat pain from sinus cancer and an inoperable brain tumor he was diagnosed with at 17. He insisted he never used marijuana before or during his work shifts at Walmart. Even so, according to court records, the urine drug test he was given after twisting his knee while pushing a cart

An issue of fairness Singh said his bill allows employers to take job action against a worker if there is cause to do so, such as if the employee was caught using marijuana on the job or comes to work under the influence. Treating marijuana as a medicine, though, should protect employees who use the drug on their personal time, Singh said. Yet that raises the possibility for the standard to be unfairly applied, said Marlo Johnson Roebuck, office managing shareholder for law firm Jackson Lewis PC in Southfield and Grand Rapids. Companies with zero-tolerance drug policies likely would have to rewrite them and doing so could give medical marijuana patients unfair privilege. For instance, Roebuck said, the bill’s language could make it so that an employee who wasn’t using a substance and was involved in a safety incident at work could be fired, while another employee who also happened to be a medical marijuana patient might keep his or her job if involved in a similar incident. “If they are protected in that situation, then they would probably be receiving more protection than the average employee who doesn’t have a medical marijuana card, so that could create some inconsistent treatment,” she said. Singh said he hopes his bill will be the start of the conversation, adding that he would be open to discussing ways to tighten the language if the business community requested it. 䡲 Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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kets Group in the Southfield office of CBRE Inc. “I field several calls a week from CMBS lenders looking for my read on the office market.” The three-year delinquency rate high came in January 2013 when 72 CMBS loans with a balance of just over $1 billion were delinquent 90 or more days, according to New York City-based Trepp LLC . That’s a delinquency rate of 17.32 percent of the $6.04 billion in CMBS debt at the time spread across 627 loans. The national average delinquency rate was 9.57 percent that month. But last month, the local delinquency rate was just 7.66 percent (compared with 5.17 percent nationally), with 41 loans totaling $396.6 million 90 days or more delinquent, according to Trepp. The total balance of the region’s 545 CMBS mortgages as of last month was $5.17 billion, according to Trepp. Dennis Bernard, founder and president of Southfield-based Bernard Financial Group Inc. , said his office was responsible for arranging 14 of the 20 largest CMBS debt issuances last year, including $125 million across two loans issued on One Campus Martius downtown, owned by Dan Gilbert’s Bedrock Real Estate Services LLC, and $70 million, also across two loans, for the First National Building downtown, also owned by Bedrock. He said many of the loans issued during the record-setting years of CMBS debt issuance in 2005, 2006 and 2007 under more lax lending standards have already been resolved by lenders. In 2005, $1.65 billion in commercial mortgage-backed securities debt was issued in metro Detroit, according to Trepp. That tapered off over the next two years, as $1.44 billion was issued in 2006 and $1.22 billion in 2007. “A lot (of lenders) of the ‘WTF loans’ from those years have already taken the real estate back” following default, he said. “The loans were taken care of, the properties and notes were sold. If you think about it, that was most of the tip of the iceberg, so we lost that.” One of the concerns was that borrowers would not be able to make the so-called balloon payment — which is much larger than a borrower’s monthly debt service payments — that typically comes when CMBS debt matures. Workout agreements with delinquent borrowers also helped nullify the expected ramifications of the 2005-07 CMBS debt boom, Bernard said. Between 2011 and 2013, borrowers — recognizing a pending improvement in the real estate market — didn’t want to walk away from a property that would soon be able to support its debt, Bernard said. The turnaround also made banks more willing to work with borrowers. So for example, a lender would convert a $20 million loan into a $16 million note with a lower interest rate, making the debt more manageable for the borrower, and a $4

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2015 good year for loan securitizations Not only have delinquencies declined, but 2015 was a strong year for new loan securitizations. The 10 largest (figures in millions): Property Securitized loan balance

One Campus Martius

$75.0

Somerset Park Apartments

$73.5

Somerset Park Apartments

$70.0

One Campus Martius

$50.0

First National Building

$40.0

Somerset Park Apartments $36.5 First National Building

$30.0

Utica Park Place

$29.0

Plymouth Road Tech Center $28.0 Warren Industrial Center

$25.4

Source: Trepp LLC

million note that the lender might forgive. But in return, the borrower had to spend money — millions of dollars — to generate more revenue from the property through things like tenant improvements and even slightly reduced rents to attract tenants to stabilize the property, Bernard said. In some cases, that paid off. Overall, metro Detroit’s 72.5 million-square-foot office market had a vacancy rate of 19.9 percent during the third quarter last year, the most recent period for which data was available from the Southfield office of Newmark Grubb Knight Frank . The rate was around 26 percent in the first quarter of 2013. In addition to the One Campus Martius and First National Building loans issued last year, rounding out the three largest CMBS financing deals was $180 million for the $216 million purchase of the 2,226-unit Somerset Park apartments in Troy, which sold last year to Summit, N.J.based The Solomon Organization LLC. Stable office properties with solid tenancy will continue to generate CMBS debt with favorable loan terms, including loan amounts at higher levels compared with a property’s value, said John Latessa, senior managing director of the CBRE Midwest Region. For example, the $125 million One Campus Martius loans were issued at about 75 percent of the property’s value, according to Bernard. Last year, more than $1.23 billion in CMBS debt averaging 68 percent of the properties’ value was issued for metro Detroit properties, according to Trepp. Latessa also said 2016 should “bring a lot of clarity” regarding the future ownership of some prominent suburban office properties, including the former Federal-Mogul Holdings Corp. headquarters in Southfield; the Galleria Officentre , also in Southfield; and the former Blue Cross Blue Shield of Michigan

buildings in Southfield, currently occupied by Federal-Mogul. “There were a lot of big properties in this town that were in various states of flux,” he said. 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

FRESH FROM PAGE 1

refrigerator. They are exposed to high pressure at low temperatures in a bottle or sealed container to kill bacteria and micro-organisms. The process extends shelf life without freezing or adding preservatives. But unlike the Garden Fresh Gourmet salsa, hummus, dips and chips, you won’t find the new Clean Planet meats in your local supermarket. They are sold exclusively through www.cleanplanetfoods.com, select gyms and from a cooler in the lobby at the Great Fresh headquarters building. The line is sold in five packs of 4-ounce individual portions for $3.50-$4.50 per serving online. The varieties include: Piedmontese beef patties and meatballs, turkey meatloaf and Italian style turkey meatballs, chicken and turkey patties, whole chicken breasts and Jamaican style chicken, which Aronson began developing when he and his wife still owned the Clubhouse Bar-B-Q in Ferndale, where they also developed their famous salsa. The all-natural and preservativefree meat entrees are “the cleanest proteins with long shelf life,” Aronson said. “No one has done anything like this before.” The trend toward protein-centric diets is reflected in everything from the Atkins Diet to the Paleo Diet, Griffin said. At the same time, there’s a trend toward “clean food” that’s natural, preservative-free and not as highly processed. We believe Clean Planet “is on trend with the clean food movement ... (and) a good alternative for people who are time-starved and looking for highly nutritious, whole proteins that don’t have artificial ingredients.” Great Fresh, which employs about 20 people, is producing all of the Clean Planet products, with local chef Luis Reyes, formerly of Birmingham’s 220 restaurant, overseeing preparation. Aronson projects Great Fresh will reach $12 million in revenue this year, up from about $4 million last year. “My plant in Clinton Township can handle probably up to $30 million in business. Once we hit (that) for Great Fresh, we’re going to have to move or expand,” he said. The plan is to add another 80 employees soon, Aronson said. Clean Planet opted for a less conventional approach to distribution of the new Clean Planet line because of a feeling that it’s “almost too innovative for conventional retail,” he said. “There’s too much of a story to tell in the amount of time your typical shopper in a (store) is willing to take to understand the product” and the higher pricing for it, he said. So far, TV Fitness in Ferndale and Iron City Fitness & Yoga in Water-

ford Township have signed on to pur-

MIKE RAFFIN

Clean Planet Turkey Meatloaf is one of the new healthy products being offered by Great Fresh Foods LLC. chase the Clean Planet meats at wholesale pricing and sell them directly to customers from a cooler at their gyms, Griffin said. Clean Planet is negotiating affiliate relationships with other fitness clubs, as well, starting locally and creating demand here before expanding into other states, in an approach akin to the one Garden Fresh Gourmet took. With Clean Planet, “we want to start with a grassroots approach as well,” Griffin said. “We think if we can build loyalty locally, we can grow from there.” Consumers are increasingly looking for foods in their pure form, according to The NPD Group , a New York-based market research firm. More than 30 percent of consumers are cautious about serving foods with preservatives, compared with 24 percent 10 years ago, and the trend for additives follows the same progression, said Kim McLynn, executive director of public relations, in an email. In terms of protein, NPD Group’s research shows that the majority of U.S. consumers, or 78 percent, agree that protein contributes to a healthy diet, and more than half of adults say they want more of it in their diets, she said. “A precooked, clean protein meal would be a triple threat for consumers, since in addition to their interest in natural, pure foods, they are also looking to increase their protein consumption and are always interested in convenience,” McLynn said. And home delivery and offering the Clean Planet line at local gyms make sense in terms of convenience, targeting and accessibility, she said. Clean Planet Foods plans to promote its protein offerings through social media, a mailer to 600,000

MIKE RAFFIN

Jamaican Chicken 5-Pack is one of the products offered by Clean Planet.

homes in Oakland and Macomb counties and local billboards. Local fitness guru Peter Nielsen, a minority partner in the subsidiary, is serving as spokesman for the products. On behalf of Clean Planet, Great Fresh will supply online orders for people living in the Michigan, Ohio and Chicago markets from its Clinton Township base. To distribute the products in other states, Clean Planet is setting up cold-storage depots in major cities through affiliate agreements, Aronson said. The first out-of-state distribution site is set to open in February in Atlanta, and negotiations are underway to open sites in Las Vegas and Los Angeles in the next one PeterNielsen: to two months. Fitness guru to help The protein promote products. entrees are “just a stepping stone,” Aronson said. A line of fresh, prepared meals with a healthy meat entrée and sides like brown rice and broccoli is also in development under the Clean Planet brand. They’ll come in proprietary packaging that is coated with a special film to prevent the transfer of any chemical properties to the food when warmed, Aronson says. “For years, I’ve always studied the Zone Diet where anything you get ... too much of ... over a three-hour period ... will be stored in your body as fat,” Aronson said. Developed in consultation with a nutritionist and doctor, the new meals will give you everything your body needs, nutritionally, for three hours, he said. Clean Planet and Great Fresh plan to begin limited production of the preservative- and nitritefree meals from the Clinton Township plant and begin selling them over the next few months through the same channels as the Clean Planet proteins, Aronson said. “We’re out to change the way the world eats for the better,” Griffin said, with healthier products people want to eat. “It’s a business enterprise, but it’s also a passion.” 䡲 Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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Fitch said supporters overwhelmingly cited benefits of the revenue to the church and how it would help charitable and community causes. Opponents cited Southfield’s moratorium; the potential impacts to public health, safety and the environment; and concerns over hydraulic fracturing. Brower said Jordan does not plan to conduct hydraulic fracturing to extract gas from shale rocks. He said the church property is on top of a geological formation called a Niagaran reef made of porous rock. That structure makes the shale naturally fractured and doesn’t require water to be injected at high pressure to remove gas. Several neighbors of the church, including Larry Quarles and Skip Davis, contacted Crain’s last week with their environmental concerns, including that water could be used in the extraction process. “Oil is removed through natural pressure,” Brower said. “Hopefully we take out only oil, maybe some gas, and not water. If gas and water comes up, we will truck the water off the site.” If gas comes up, Brower said, normal process is to either burn it off or transport it for sale to the nearest gas pipeline. Quarles, a retired IBM engineer and one of the leaders of Stop the Drilling in Southfield, said he is concerned about the oil drilling for several reasons that include reduced property values, impact from potential methane gas air pollution and additional truck traffic through a neighborhood that is populated with schools and houses.

DISPLAYS FROM PAGE 3

more than 800,000 attendees, it’s big business. Other local companies that work in that specialty include Farmington Hills-based Czarnowski Display Service Inc., which designed the General Motors Co. display and others, and Livonia-based EWI Worldwide Inc., which produced the Ford Motor Co. exhibit and others. Automakers spend as much as $300 million in a given year on displays in hopes of luring attendees to their dealerships when they leave Cobo Center. According to Rochester-based marketing research firm Foresight Research Inc. , 71 percent of attendees for the world’s auto shows were expected to buy or lease a new car within 12 months of attending last year. For automakers and dealers, that’s more than 568,000 potential car buyers set to walk by their displays between Jan. 16-24, which translates to billions of dollars up for grabs. Sam Slaughter, president of Clarkston-based Sellers Auto Group Inc., said auto shows play an important role in introducing customers to new products.

“We are a mile from the Rouge River. There has been no regard for the health and safety of our community,” said Quarles. “The state has disregarded our (City Council) who says they do not want it.” “There are a lot of active oil or natural gas producing wells right now in Oakland County,” including the one proposed by Jordan Development in Southfield, said Fitch, noting most of the several dozen active wells are in unincorporated areas outside of the county’s cities and villages. Since last September, however, only one well is producing gas within a city limit in Oakland County out of about 66 active permits, Fitch said. This gas well is on property owned by Michigan State University at its management education center in Troy. Michigan has more than 14,000 active and producing wells, including about 179 in Southeast Michigan, said the DEQ. The majority are oil wells and are in St. Clair County, with 81 producing wells, followed by 34 in Washtenaw County, 25 in Livingston, 19 in Oakland, eight in Macomb, eight in Wayne and four in Monroe, the DEQ said. Brower said Jordan hopes to tap into a major oil supply in Southfield on the church’s 110-acre property. But he said low oil prices the past two years have slowed drilling in Michigan to levels he hasn’t seen in 18 years. “The prices are terrible, $32.25 is the national number now per barrel. Southern Michigan gets $6 less (because of transportation costs), so we are into the $26-per-barrel range,” said Brower. “It does affect the drilling. Nobody has done anything (drilling)

the last six months,” he said. “We have been working on this project such a long time we want to get it started.” Brower said he hopes oil prices will rise later this year. “It is right at the edge of not being profitable,” he said. “We hope this is a long-term project where we make money when the price goes up.” Still, Brower said some of Jordan’s dozen or so Southeast Michigan wells are producing oil and gas at good levels. For example, a joint venture project between Jordan and Traverse City-based West Bay Exploration Co. on MSU property has produced about $60 million of natural gas since the well was drilled in 2002, Brower said. Brower said the MSU gas well has generated 8 billion cubic feet of gas the past 14 years. The state has earned $ 6 million in royalties, and MSU earned $12 million. Andrea Simpson, director of public relations for Word of Faith, said

the church granted permission to Jordan last summer after receiving written assurances the drilling would not damage the property or environment. Simpson said Bishop Keith Butler told Jordan Development that the church was opposed to hydraulic fracturing to remove hard-to-get gas deposits. Simpson said that once people opposed to the drilling get accurate information about the project, “I think they would be OK with it.” Jordan’s application states it has leased 40 acres for the Word of Faith project. The nearest occupied structure is a church building 525 feet away, 75 feet more than required by law. The nearest private building to the proposed well is 900 feet. “We have a spot in dense woods that is very sealed from public viewing,” Brower said. “The church very much wants it.” Simpson said the church signed the lease agreement because “it could be a source of income or rev-

“NAIAS absolutely leads to a boost in sales for us,” Sellers said. “The show really adds to the hype of cars here in Detroit, and you’ve got to have an eye-catching display to get people’s attention and get them into the cars.” Sellers operates Sellers Buick GMC in Farmington Hills, John Bowman Chevrolet and Sellers Bowman Auto Center in Clarkston, as well as Sellers Bowman Subaru in Macomb Township. For FCA and its brands, executives want to promote brand unity while attracting customers. FCA assigned GPJ the task of making a concept called “Gears” a reality. GPJ created video-wrapped pillars for each FCA brand — Chrysler, Dodge, Jeep, Ram, Fiat and Alfa Romeo — that display 40 minutes of logos and other brand content. The pillars are connected with 18 LED-lined rings, or gears, linking the six brands into one overall theme, Puffer said. “We sell several brands, but we’re one company,” Puffer said. “We wanted to find a way to showcase that in this space in a big way.” Rounding out the hourlong program is a 20-minute video and light show called the “Super Storm.” During the storm, the lights go down, music erupts and the 38 screens on

the floor begin a choreographed sequence, more akin to a Las Vegas spectacular than an auto show. “(The FCA display) is a combination of architecture and live entertainment and marketing media working together,” Hemsworth said. “It’s important to create an interactive environment, something that’s not static, and bring synchronicity to FCA at the show.” The large metallic rings that simulate gears during the show were built in Europe and flown to Detroit in the cargo holds of seven 747s. The display required more than 100 semis to deliver it to Cobo. GPJ designed other automaker displays at NAIAS, including those for Nissan, Infiniti, Acura, Honda, Toyota , Scion and Lexus . Outside of NAIAS, it works with Maserati, Tesla and Volkswagen. EWI wasn’t available to discuss bells and whistles of the displays pitching Ford products, but interactivity remained a strong element in many displays, including Ford’s. At Ford, attendees can enter an F-150 that rises almost two stories above the show floor to showcase how a trailer responds to its Pro Trailer Backup Assist system as well as a virtual ride in an Explorer through scenic roads in America. “There are more interactive

things this year than ever before,” said Slaughter, also a co-chairman of 2016 NAIAS. “Attendees love the interaction and it gives them an experience they’re not going to get anywhere else.” However, elaborate displays play only a small role in car buying decisions, said Nancy Walter, vice president of business development for Foresight Research. For potential buyers, the equation to car sales is much simpler. The ability for show attendees to sit in the vehicle is the most influential aspect of the auto show to car buyers, according to Foresight. “For (automaker) customers we work with, we’ve been known to march up to their stands and tell them to unlock the cars,” Walter said. “That’s what they’re here for. They want to shop.” But the displays are playing a more important role as the Millennial generation continues to grow as car buyers, Walter said. Millennials — those born between 1980 and the early 2000s — fell from nearly a third of car buyers in 2009 to just 10 percent of buyers in 2013 because the recession hit the younger generations harder, Walter said. But that’s changing. “Millennials came back (to dealer-

WORD OF FAITH INTERNATIONAL CHRISTIAN CENTER

Jordan Development Co.LLC has signed a lease agreement for drilling with the Word of Faith International Christian CenterInc. at Evergreen and Nine Mile roads in Southfield.

17 enue for the church” if oil or gas is found. “We could do more mission work all over the world and community programs to help Southfield,” Simpson said. She declined to state the percentage of royalties the church would receive from Jordan. Founded in Detroit in 1979, Word of Faith moved to Southfield in 1998 for more space and to upgrade its facilities, Simpson said. The church also provides mission services of clothes, food, toys for kids, end-oflife care to seniors and other services in Southeast Michigan. “We had a transitional living home for homeless young women (Agape House) and had to close it” after three years because of funding issues, Simpson said. “The home ultimately serviced over 20 young ladies (work and life skills) during the three years it was open.” Simpson said the church might consider reopening the house depending on how much revenue is generated if the oil drilling is successful. Brower said Jordan became interested in a lease with Word of Faith after seismic tests indicated there might be a plentiful supply of underground oil in the Southfield area. “We have drilled with partners a little farther west in Livonia with good success,” said Brower. “We have quite a few wells in (Southeast Michigan) with lots of gas and oil. Not so much in Wayne County.” Brower said Jordan is a partner in three high-producing wells in Livonia with West Bay Exploration. “One well is over 200,000 barrels. That is good for anywhere in Michigan,” he said. 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

ships) in a big way last year,” Walter said. “They’ve reshaped things and made experiential more important … they want to be in places like motorsports, auto shows and events.” Roughly 70 percent of the brand displays are new at this year’s NAIAS, with many implementing more technology to engage attendees, Hemsworth told Crain’s ahead of the show in December. “Everyone (clients) has different requirements and budgets, but what they all want is to create an intimate level of interaction with the nearly million visitors at the show,” Hemsworth said. “Technology has been a big aid in meeting those demands and creating something that goes beyond brand awareness to something experiential for the show attendees.” For FCA, that means an over-thetop display that can keep the attention span of a generation inundated with over-the-top technology. “While the latest technology appeals to all ages, we do think the new interactive display will be appealing to young consumers,” Puffer said. “The combination of very cool graphics, upbeat music and a dynamic light display should attract the more connected customer.” 䡲 Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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HMO

“I am in favor of anything that streamlines the current structure.”

FROM PAGE 1

it margins in behavioral health. “This is not a traditional market most health plans are used to serving,” Sheehan said. “(We) treat the more severe cases that involve the additional complexities of poverty, housing, employment, disease and environmental concerns.” Under the state’s current mental health payment system, the Department of Health and Human Services

makes monthly per-person Medicaid payments to “prepaid inpatient health plans,” commonly called mental health authorities, in 10 regions that cover about 251,000 Michiganians. Wayne, Oakland and Macomb counties each make up one region with their mental health authorities. The mental health authorities, in turn, contract with a variety of provider organizations and community mental health agencies to deliver services that include autism, developmental, substance abuse, behavioral health and serious mental disorders. The 46 community mental health agencies, which serve 83 counties, also receive general fund dollars for services not covered by Medicaid. The opening foray by health plans, say some observers, began last year in Wayne County when forprofit Molina Healthcare , based in Long Beach, Calif., acquired a minority interest in Integrated Care Al liance , a developmental disability provider organization. ICA has a contract with the De troit-Wayne Mental Health Authority , one of the regional agencies that contract with HHS. In September, Molina acquired 100 percent interest in ICA, a move that led Tom Watkins, CEO of DWMHA, to terminate ICA/Molina’s contract for failure to notify the authority and other contract violations. The authority’s board in midDecember suspended the termination until at least Jan. 31 to study the issue. Molina said in a statement its acquisition of ICA is part of a broader strategy to integrate physical and behavioral health care for the people it serves in Michigan and at least seven other states. Craig Bass, a Molina vice president, said the health plan is looking nationally to improve care coordination between physical and be-

James Haveman,president ofthe Haveman Group

havioral health. He said Molina in Michigan already treats many of the patients that ICA does, so the acquisition was a natural fit. “We want to ensure our members get the best behavioral, medical and developmentally disabled care possible,” Bass said. “Frequently that doesn’t happen when you have two payers who are two different entities.” Of the people served by the mental health authorities in 2015, more than 70 percent are already enrolled in a Medicaid HMO, according to the Michigan HHS and the Ann Arbor-based Center for Healthcare Transformation and Research. Taft Parsons, M.D., Molina’s vice president of behavioral health, said managing diabetes and other chronic conditions in conjunction with mental health conditions results in better outcomes. “We have multidisciplinary teams that work to improve (patients’) illness burden by working with local social services (and community organizations) to deliver services the member needs,” Parsons said.

Cost savings If Gov. Rick Snyder and the state Legislature agree that Michigan should change its mental health contracting system, Bass said Molina would be better able to serve that population with the experience it is gaining through ICA and a dual eligible demonstration program in Michigan where it is coordinating physical and behavioral health care for Medicare and Medicaid patients. Sources tell Crain’s the health plans are suggesting to Snyder and state legislators that allowing them to manage medical and behavioral health in an integrated fashion could cut costs by $200 million from 2017 to 2019. The cost savings then could help pay for state general fund transfers mandated by the $1.2 billion Michigan road bill, which Snyder recently approved and begins in 2017. Most of the road improvements will be paid by higher gas and license taxes, but $150 million must be shifted by 2018, rising to $600 million by 2020 and after.

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: Beaumont Health........................................... 7, 9 Bernard Financial Group ..................................116 CBRE ......................................................................11 Clean Planet Foods .............................................11 Cohen & Co. ........................................................ 5 Common Ground .............................................. 12 Detroit-Wayne Mental Health Authority.......118 3 Fiat Chrysler Automobiles.................................3 Foresight Research............................................117 Garden Fresh Gourmet .......................................11 3 George P. Johnson Co.........................................3 5 Godfrey, Hammel, Danneels & Co....................5 Great Fresh Foods ...............................................11 Haveman Group.................................................118 Jackson Lewis ....................................................115 3 Jordan Development..........................................3 Kahn Center for Cardiac Longevity................. 9

Macomb County Community Mental Health ....118 McLaren Health Care ......................................... 7 Michigan Assoc.ofComm.Mental Health Boards.11 Michigan Association of Health Plans.............11 3 Michigan Department ofEnvironmental Quality.3 Michigan Protection & Advocacy Service.....118 Michigan Urgent Care and Occupational Health .115 Molina Healthcare of Michigan................. 12, 18 Nemeth Law.......................................................115 3 North American International Auto Show .....3 Oakland County Community Mental Health ..118 5 Robert Kidd Gallery ............................................5 St. John Providence Health System .............. 10 Sellers Auto Group.............................................117 Trinity Health ...................................................... 7 3 Word of Faith International Christian Center ..3

Murdock acknowledged savings could accrue if the HMOs managed all care. But he said benefits to the state also could help to address the following over a three-year period: the pending shortfall of state revenue in fiscal year 2017 for the Medicaid program. The shortfall, which could tally more than $1 billion, includes the potential loss of provider taxes that support the Medicaid program, rising specialty drugs costs and $150 million in 2017 in general funds to support Healthy Michigan, Murdock said. “If we are truly interested in treating the whole person, we should move toward more of an integrated approach,” Murdock said. James Haveman, former community health director, said he supports the health plan’s effort to coordinate both physical and behavioral health. “I am in favor of anything that streamlines the current structure. We need to shrink the administrative costs,” said Haveman, president of the Haveman Group , a consulting firm based in Grand Haven. “The current structure … has multiple levels of administration. I have come to the conclusion we need to lessen that so we can get out more services,” he said.

Evolving care, financing Over the past 50 years, Michigan’s mental health delivery system has changed drastically. Starting in 1987, the state began closing 11 of 16 psychiatric hospitals and moved more into the outpatient arena. In 1996, Michigan carved out behavioral health from physical health reimbursement under a federal waiver when the state began contracting with Medicaid HMOs. “Now we are preaching integrated care. You can’t preach that unless you carve back in those services,” Haveman said. “I support the carvein (to Medicaid HMOs). The community mental health board model has to change.” To reduce costs, Snyder in 2013 reorganized mental health delivery by funneling state dollars into geographic regions in no-bid contracts to 10 mental health authorities. At the same time, Lt. Gov. Brian Calley headed the Mental Health and Wellness Commission to evaluate and recommend changes in the state’s mental health system. One still unmet recommendation is to “improve coordination of behavioral health and physical health.” This recommendation could mean more streamlining in the public mental health system to eliminate administrative duplication. But mental health professionals told Crain’s they fear Snyder could be persuaded to allow for-profit HMOs like Molina, Aetna Inc., Total Health Care and Meridian Health Plan to take over the public system. Officials for Snyder’s office did not return several calls for comment.

Making a case If Medicaid HMOs take over the system, said Willie Brooks, CEO of the Oakland County Community Men tal Health Authority , the drive for profits by the health plans could take up to 10 percent of payments from an already underfunded mental health system. Brooks explained that Medicaid HMOs’ retain an average of about 15 percent of revenue as administrative overhead and profits. Nonprofit mental health agencies retain about 5 percent or less as overhead. “Whenever you don’t have to worry about shareholders’ profit, the money goes back to the people,” Brooks said. “HMOs’ goal is to avoid risk, and they make more money by avoiding risk. Our goal is to approach risk and minimize the long-term affects by providing services.” Watkins, who is at the center of the for-profit versus public nonprofit mental health debate, said he is not opposed to further privatization of the mental health system. “I am anti-profiteering,” Watkins told Crain’s in an email in a reference to the move by health plans to take over the public mental health system. But Haveman said there is enough money in the system to allow for-profit HMOs to generate their return on investment and integrate care. “Community health boards have sizable reserves,” he said. “HMOs can contract with the people who know how to provide the services. (HHS) can write the regulations to ensure services are delivered to the people.” While opposing HMO takeover plans, Elmer Cerano, executive director of the federally funded consumer advocacy group Michigan Protection & Advocacy Service , agreed that the state mental health code would have to be modified to closely regulate for-profit HMOs. “The concern we have is because there are high-cost users and there will be a temptation by for-profit companies to reduce services” to create adequate profit margins, Cerano said. “We are opposed to organizations taking profits out of the system because this removes needed resources.” Cerano said the 10 mental health authorities are capable of squeezing out more efficiency by reducing the number of community mental health agencies under contract. “We don’t need 46. They should be more aligned with the (mental health authorities) to reduce the administrative overstructure,” said Cerano, noting that Detroit Wayne already has consolidated operations. John Kinch, executive director of Macomb County Community Mental Health , said he also believes the

public system can improve to reduce costs and deliver greater services to patients. “We have come a long way (since the 1960s) to improve care for patients,” he said. “It is silly to put that at risk.” 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

CRAIN’S DETROIT BUSINESS www.crainsdetroit.com Editor-in-Chief Keith E. Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Associate Publisher Marla Wise, (313) 446-6032 or mwise@crain.com Editor Jennette Smith, (313) 446-1622 or jhsmith@crain.com 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

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WEEK Lions to keep Caldwell as head coach

ON THE WEB JAN. 9-15

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

$24 million

he Detroit Lions said Friday they would retain Jim Caldwell as head coach next season. Caldwell’s status was unclear as the team searched for a general manager after its 7-9 season, but new GM Bob Quinn cited the team’s strong finish as a factor in keeping the coach.

The investment Southfield-based Environmental and Technical Controls plans to build a hydrogen fuel cell plant on Detroit’s east side. The plan is in early stages and contingent on city approval.

COMPANY NEWS

The approximate amount of square footage Dan Gilbert added to his real estate portfolio after acquiring three buildings near Corktown. Gilbert’s Bedrock Real Estate expects to use the buildings for mixed-use development.

䡲 Arkansas-based Wal-Mart Stores Inc. plans to close 269 stores — including two in metro Detroit, in Waterford and Hartland, by month’s end — in a push to streamline the chain that will affect 16,000 jobs nationally. 䡲 Detroit Public Television and Michigan State University announced a formal collaboration on public TV programming, including development of 24/7 fare for children and families statewide. MSU will continue to operate public affiliate WKAR-TV Channel 23, and not join the Federal Communications Commission

Broadcast Incentive Auction to sell its rights to use federally controlled broadcast frequencies. DPTV’s WTVS-Channel 56 is also expected to remain on the air. 䡲 Struggling cable news network Al Jazeera America, which has a Detroit bureau since 2013, said it will cease operations by April 30. “Our business model is simply not sustainable in light of the economic challenges” in U.S. media, CEO Al Anstey wrote in a memo. 䡲 An agreement struck between M1 Concourse LLC and Southfield-based Federal-Mogul Motorparts gives Federal-Mogul’s Champion spark plugs sponsorship of M1 Concourse’s 1.5-mile recreational test track in Pontiac. 䡲 Henry Ford Health System in Detroit and Livonia-based Trinity Health have formed two of the 21 new accountable care organizations approved by Medicare and join another 456 similar ACOs that put them at full risk or partial financial risk for patient care. 䡲 Irvine, Calif.-based ConcertoHealth Inc. signed an agreement with Humana Inc. to participate in the Louisville, Ky.-based HMOs provider network in Southeast Michigan. Terms were not disclosed. 䡲 Twenty Detroit projects are among the 158 finalists of the second Knight Cities Challenge. The Miami-based John S. and James L. Knight Foundation will announce this spring the winners to receive a share of a $5 million grant. The challenge, a three-year project, seeks engagement on solving urban problems.

180,000

The percentage of jobs lost during the last decade that economists predict Michigan will recover by 2018. University of Michigan economists project the state will have gained 624,700 jobs by the end of that year.

䡲 The University of Michigan Health System has affiliated with CVS Health to share electronic prescription and visit information for its employees who visit CVS’ 17 MinuteClinic locations in Michigan. 䡲 ZF North America Inc., the Northville-based subsidiary of ZF Friedrichshafen AG, announced plans to move its headquarters to Livonia. The move is largely ceremonial, as the auto supplier will retain its Northville office, a sales and engineering center. 䡲 Southfield-based supplier Denso International America Inc.

said it has exceeded projections by investing more than $1 billion and adding 3,000 new jobs in North America since 2014. 䡲 Auto designer Henrik Fisker is joining former General Motors Vice Chairman Bob Lutz and entrepreneur Gilbert Villarreal to create a new luxury sports car company, VLF Automotive, Automotive News reported. VLF is the successor to VL Automotive, the Lutz-Villarreal company launched in 2013. 䡲 Milwaukee-based Johnson Controls Inc., the world’s largest seat supplier, said the new seating and interiors business it is spinning off will be named Adient, Automotive News reported. JCI’s automotive interiors business is based in Plymouth Township. 䡲 Pensions & Investments, a New York City-based publication of Detroit-based Crain Communications Inc., acquired two pension industry summits, the WorldPensionSummit and WorldPensionSummit Africa Special, from Nether-

RUMBLINGS In Detroit, the estimated average monthly cost for business motorists is $1,307.75 — more expensive than the nation's largest cities, including New York, Los Angeles, Chicago and Philadelphia.

lands-based Global Platform BV.

OTHER NEWS 䡲 Dan Gilbert has helped launch Courtside Ventures, a Detroitbased, $35 million early stage venture capital fund that will invest in technology and media companies with a focus on sports. 䡲 Stache International, a 2,000square-foot sandwich shop, opened in Detroit’s Eastern Market for lunch on weekdays and also for dinner on weekends.

䡲 Legoland Discovery Center Michigan at Great Lakes Crossing

Outlets in Auburn Hills crowned Clint Parry of Wauseon, Ohio, its new master model builder. The center is to open this spring. 䡲 A former Detroit Public Schools art teacher left a $1.71 million bequest to the Detroit Institute of Arts. The gift by Elizabeth Verdow, a longtime DIA volunteer who died in 2014, will fund acquisitions of contemporary art. 䡲 The historic South Lyon Theater was sold to Neil Asset Management LLC in Plymouth by Lake Street Investments LLC. Terms of the deal were not known. 䡲 Romel Casab, an Oakland County businessman who at one time claimed to be part-owner of the former Packard Motor Co. plant in Detroit, was indicted in federal court on drug conspiracy and firearm charges. 䡲 Highway safety officials plan to take several steps this year to clear the way for autonomous vehicles, including those designed to operate without a driver, to hit the streets in large numbers, U.S. Transportation Secretary Anthony Foxx said at the North American In ternational Auto Show in Detroit. 䡲 Metro Detroit single-family home and condominium sales improved in 2015, increasing 4.7 percent from 2014, according to a report from Realcomp II Ltd., while median home and condominium sale prices rose 10.6 percent. 䡲 City building and health officials will begin inspecting all Detroit public schools for possible code and safety violations, AP reported. The inspections follow visits by Mayor Mike Duggan to several schools after the teachers union complained of rodents, mold and other problems. 䡲 Julie Secontine, Oakland County’s risk manager, was named as the state’s fire marshal and as director of the Michigan Bureau of Fire Services, AP reported.

OBITUARIES 䡲 Julie Nguyen Brown, president of Plastech Holding Corp. in Dearborn, has died. Her family did not release information on her age or date or cause of death. Brown founded Plastech Engineered Products, formerly the country’s largest minority-owned automotive supplier. 䡲

Why Detroit is nation’s most expensive city for biz driving etroit landed atop the list of most expensive cities in the country for employees who drive for business, according to Runzheimer, a Waterford, Wis.-based workforce management firm. And the main reason isn’t the potholes. In Detroit, the estimated average monthly cost for business motorists is $1,307.75. It’s more expensive than the nation’s largest cities — including New York, Los Angeles, Chicago and Philadelphia. “With Detroit, the primary driver is really insurance,” said David Olson, director of business vehicle services and expense for Runzheimer. Detroit has some of the nation’s highest auto insurance rates, a reason the Michigan Legislature has taken up bills this session in an effort to address the issue. The bills haven’t moved in months, however. Incidentally, the cheapest place is just down the road a piece: Wapakoneta, Ohio, with an average monthly cost of $598.83.

Pinnacle course’s Campbell files for bankruptcy Jerry Campbell, former chairman and founder of Ann Arbor-based Republic Bancorp Inc. and co-

owner of the failed Pinnacle Race Course in Huron Township, filed for personal bankruptcy protecJerry Campbell: tion this week at In court in Florida. a federal court in Florida, for debts tied to the shuttered horse track. Campbell, who earns an annual salary of about $290,000 as president and CEO of Tampa, Fla.-based HomeBancorp Inc., claims about $9 million owed to various creditors in a voluntary Chapter 11 petition this week before Judge Rodney May of U.S. Bankruptcy Court for the Middle District of Florida.

But chiefly Campbell owes $4.8 million to Post Note LLC, which acquired a former $5 million construction loan from Bloomfield Hills-based PrivateBank in early 2009 to Campbell and his co-investors at Pinnacle. The racetrack closed less than two years later.

About $300,000 more is owed to law firms that have represented Campbell at some point in litigation with PrivateBank and Post Note at Oakland County Circuit Court. The bank in 2010 sued Campbell and track co-investor Jack Krasula, who also owns the Southfield executive-search firm Trustinus LLC and is host of a show on WJR AM 760. But Krasula, through Post Note, apparently has become Campbell’s creditor and reached a settlement with Campbell for $6 million in August 2011 to resolve the court case, according to court records in the Oakland County case. Campbell has retired about $1.2 million of that settlement debt through regular payments since then, but has been in default since the agreement increased his monthly payments starting last September to $29,531 per month, which exceeds his monthly takehome pay at HomeBanc. Republic Bancorp in Ann Arbor was sold in 2006 for $1.05 billion to Citizens Banking Corp. Campbell and Krasula, along with several other local partners, started a Tampabased bank-holding company, CNBS Financial Group Inc., and opened its first branch in 2007. HomeBanc claims 13 branch locations in central Florida in addition to its Tampa headquarters, according to its website.

Forbes gives a nod to Bon Bon Bon owner Founder-owner and chocolatier Alexandra Clark of Bon Bon Bon LLC in

Hamtramck made Forbes magazine’s list of 30 under 30 honorees for 2016 for food and drink this month. Clark, 27, who opened a Hamtramck store in July after investing $32,000 of her own money in the startup, got the magazine’s attention for confections that blend seven kinds of chocolate and locally sourced fillings that run from traditional fruit offerings to the more unconventional, like cornbread and honey. Clark has also opened a second retail location in downtown Detroit. An alumna of Michigan State University and Schoolcraft College, she worked previously at chocolate bar Max Brenner International in Boston. 䡲

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