Crain's Detroit Business, Feb. 8, 2016 issue by Crain's Detroit Business

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CRAIN’S MICHIGAN BUSINESS

Powering up: Law firms, others add strength in lobbying, PAGE 11

FEBRUARY 8-14, 2016

Lions look to spruce up their lair

are constantly testing our “We water as we want to protect our visitors, not just the art. ” John Henry,Flint Institute ofArts

Options include converting suites into gathering space By Bill Shea bshea@crain.com

The Detroit Lions may turn some of Ford Field’s 132 suites into club or other gathering space under a plan to refresh the $500 million stadium that opened in 2002. New President Rod Wood said the team has asked the Detroit office of M. Arthur Gensler Jr. & Associates Inc. to re-examine, prioritize and update costs for a Ford Field improvements master plan created last year. Wood, 55, was elevated out of a job as the Ford family’s investment adviser to become team president in November after Lions owner Martha Firestone Ford fired Tom Lewand as part of a radical overhaul of the long-struggling National Football League team’s front office. In a wide-ranging telephone conversation last week with Crain’s, Wood addressed potential improvements at the stadium. He said the “Ford Field 2.0” plan Lewand hinted at in recent years is something he’ll take a seriSEE WOOD, PAGE 25

Inside More from Crain’s Rod Wood interview: Building a new front office, Page 25.

MARTI BENEDETTI

Flint: Treading water City’s biz community hopes crisis doesn’t wash away downtown rebound By Marti Benedetti mbenedetti@crain.com

The Flint water crisis is taking a toll on the city that goes beyond lead poisoning. The Flint Cultural Center , considered a jewel with its expansive neighborhood of theaters, museums and a large public library, could be hurt by declining property values and tax collections as a result of the water crisis. At the same time, Flint business owners hope water woes won’t stem the downtown renaissance of recent years. Kay Schwartz, director of library services for the Flint Public Library in the cultural center, said the water crisis has the potential to hurt library financing, but it has weathered financial crises before. In 2009, in the midst of the recession and General Motors’ bankruptcy, a library millage of 2.9 mills produced $4.7 million. The library relies on a property tax millage for 90 percent of its income. What has happened since provides a glimpse of how much Flint property values

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KathyJackson: “I’ve invested in Flint’s future. ... But with this water fiasco, you feel like Flint’s image is falling further.”

Ron Sims: “Everybody is worried, but the flip side is we will get money for improved infrastructure like new pipes.”

Those declines flattened out over the past couple of years. “But people thought values would go up again,” Schwartz said. “Now, no one knows what will happen.” Flint Tax Assessor William Fowler said property values assessed before last fall — when the water crisis came to the forefront — were likely higher than they are now. He is prepared for some property owners to ask for lower assessments at March’s board of review meeting. “They may say their property is devalued SEE FLINT, PAGE 26

Inside dropped in recent years. “We are at 4 mills now because our wonderful citizens voted an increase in 2010, and again in 2015,” Schwartz said. “But 4 mills now translates to just $2.7 million, meaning the library lost $2 million in funding due to falling property values. We have had to make enormous cuts.”

■ A roundup of news on Flint’s water crisis, Page 2. ■ Though government immunity makes them tricky, lawsuits start to pile up. Page 27. ■ Snyder seeks OK for SBA emergency lending tied to crisis, Page 27.

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MICHIGAN

BRIEFS Emails: Snyder’s aides knew about Legionnaires’in March High-ranking officials in Gov. Rick Snyder’s administration were aware of a surge in Legionnaires’ disease potentially linked to Flint’s water long before Snyder reported the increase to the public last month, internal emails show. When he disclosed the spike in Legionnaires’ cases on Jan. 13, Snyder said he had learned about it a couple of days earlier. But emails obtained by the liberal group Progress Michigan through publicrecords requests and shared with The Associated Press showed Snyder’s office was aware of the outbreak since last March. Others in the administration were scrambling to respond to suggestions that bacteria in the city’s new water source, the Flint River, could be the culprit. The outbreak was also well known within state agencies, according to emails obtained separately by AP and other news organizations. Together, the emails offered more evidence that some state officials were dismissive of county health authorities who raised con-

cerns about the safety of the community’s drinking water. Meanwhile, Michigan lawmakers moved late last week to start approving $30 million to help pay the water bills of Flint residents facing a lead-contaminated water supply, AP reported. The bill, passed unanimously by the Senate a day after Snyder formally announced the plan, goes to the House for its consideration as early as this week. In other Flint water-related news: 䡲 In Washington, officials fought over who was to blame for the water crisis at a combative congressional hearing, AP reported. Joel Beauvais, acting water chief for the U.S. Envi ronmental Protection Agency , said Michigan officials ignored federal advice to treat Flint water for corrosion-causing elements last year and delayed for months before telling the public of health risks. Keith Creagh, director of the Michigan Department of Environmental Quality , acknowledged the state should have required Flint to treat its water, but said the EPA “did not display the sense of urgency that the situation demanded.” 䡲 Sen. Debbie Stabenow, DMich., said Democrats thought they

had an agreement on a $600 million federal aid package for Flint that would be added to a bipartisan energy bill, but found that Republicans were blocking it over a procedural issue. Stabenow said she would block further work on the energy bill until Republicans agree to move forward on the package for Flint. 䡲 Businesses and organizations continued to donate money, goods and labor to help those affected by the crisis. Walker, Mich.-based Mei jer Inc. announced it would donate $500,000 to help Flint residents, and Detroit Pistons players and executives committed a total of $500,000 to the FlintNOW relief effort launched by team owner Tom Gores, who grew up near Flint.

Dow CEO Liveris says he’ll step down after merger Dow Chemical Co . CEO Andrew Liveris will leave the company after the completion of its merger with DuPont Co., marking a victory for activist investor Dan Loeb, who had called for his removal, Bloomberg reported. Liveris, who has spent four decades at Midland-based Dow, will depart once the newly created DowDuPont is ready for a planned three-way split, no later than the second quarter of 2017, he said last week on Dow’s fourth-quarter earnings call. Dow and Delaware-based DuPont have announced a merger of equals, to be followed by the sep-

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aration of a trio of businesses focused on plastics, agricultural products and specialty materials.

MICH-CELLANOUS 䡲 Kalamazoo-based medical technology company Stryker Corp. said it has agreed to buy Sage Prod ucts LLC, a maker of products to prevent hospital-acquired conditions, for nearly $2.8 billion in cash. Stryker is buying Cary, Ill.-based Sage from Madison Dearborn Partners , a Chicago-based private-equity firm. Sage, with more than 800 employees, will operate under that brand as part of Stryker’s medical division. 䡲 The insurance industry annually provides a substantial boost to Michigan’s economy, adding $37.1 billion in spending, 114,000 jobs and $6.3 billion in earnings throughout the state, according to a new report by the East Lansing-based Anderson Economic Group LLC . The report, based on 2014 data, was commissioned by the Michigan Chamber of Commerce and several other business associations and groups. 䡲 Grand Rapids-based injection molder Agape Plastics Inc. expanded manufacturing space and added equipment to serve sales growth driven largely by the auto industry. Agape added 53,600 square feet to its existing facility for a total of about 125,000 square feet of manufacturing space, Plastics News reported. 䡲 The speed limit could jump to 75 mph on some 600 miles of rural

INSIDE THIS ISSUE BANKRUPTCIES . . . . . . . . . . . . . . . . . . 5 CALENDAR . . . . . . . . . . . . . . . . . . . . . . 24 CAPITOL BRIEFINGS . . . . . . . . . . . . . . 5 CLASSIFIED ADS . . . . . . . . . . . . . . . . 25 MARY KRAMER . . . . . . . . . . . . . . . . . . . 11 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 8 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 24 RUMBLINGS . . . . . . . . . . . . . . . . . . . . 30 STAGE TWO STRATEGIES . . . . . . . 20 WEEK ON THE WEB . . . . . . . . . . . . . . 30

COMPANY INDEX: SEE PAGE 29 highway in Michigan — and possibly even higher on portions of two heavily traveled interstates — under a measure a committee sent to the state House last week. The package of five bills would raise some of the 70 mph speed limits across the state and hike limits from 55 to 60 mph for another 900 miles of highway, The AP reported. A chunk of I-75 north of Bay City and a portion of I69 between Flint and Lansing might be eligible for an 80 mph speed limit, officials said. 䡲 The Grand Rapids Public Museum is hosting a new exhibit about civil rights icon Rosa Parks. “Rosa Parks — An American Legacy” runs through March 26. Parks, who died in 2005, became a pioneer in the civil rights movement by refusing to give up her bus seat to a white man in Montgomery, Ala., in 1955. She later moved to Detroit. 䡲

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Will robots zap the job market? Growth in knowledge-based automation could make machines the new workforce By Dustin Walsh dwalsh@crain.com

David Sowerby, who has managed investment portfolios for more than 25 years, does not fear the robot revolution. But should he? The rapid innovation of automation, largely originating in manufacturing operations, is expanding into new industries, such as the financial sector, and will challenge our concept of the labor force, according to experts. And it’s coming more quickly than you think — in less than a decade. This quarter, Bank of America Corp. ’s

Merrill Lynch is serving clients with online robo-advisers, which use algorithms to assess dozens of factors and generate investing advice. Bank of America, in an extensive study published late last year, predicts advancements in robotics and automation will displace up to 25 million workers globally in the financial and legal services sectors by the end of 2025, with the potential to do the work of more than half the 230 million-person global base of knowledgebased workers in the same timeframe. Experts are split on the ill effects of automation, but they agree that the labor

State seeks to eliminate tax credit for auto insurers

force must play catch-up, and fast, to face a world where a large portion of current jobs will be done by computers. At Bank of America, robo-advisers are a win-win for the bottom line. The firm is able to target clients with investable assets below $250,000, who generally don’t get access to its live Merrill Edge advisers, at lower cost to the client. “Really, we’re targeting the untapped market (with robo-advisers),” said Beijia Ma, strategist on the thematic investing team at Bank of America in London and researcher on automation. “But, as that SEE ROBOTS, PAGE 28

RISING from the ASHES

Industry: Policy covers costs for uninsured RECLAIM DETROIT

By Lindsay VanHulle Crain’s Detroit Business/Bridge Magazine

LANSING — Nearly 100 auto insurers in Michigan last year claimed a previously unavailable tax credit that is expected to cost the state $80 million in annual revenue. Some state lawmakers now say they want to fix what they’re calling an unintended consequence of a 3-year-old policy change that shifted administrative oversight of Michigan’s assigned claims plan, which covers medical expenses for people injured in crashes in which no party has auto insurance. The issue could become a thread in a bigger debate related to reforming Michigan’s no-fault auto insurance law, which covers the assigned claims process, even as bills to update the program stall in the Legislature. On one hand, representatives for the insurance industry say the credit compensates for the amount insurers pay each year to reimburse the Michi gan Automobile Insurance Placement Fa cility for the cost of medical treatment

it is required to cover for uninsured crash victims — costs, they say, that ultimately are passed on to Michigan

Reclaim Detroit Executive Director Craig Varterian says the nonprofit has been in

negotiations to move to another location in Detroit.

Reclaim Detroit, burned out of Highland Park, was already in talks for Midtown digs By Kirk Pinho and Marti Benedetti kpinho@crain.com, mbenedetti@crain.com

Out of the ashes may come some unexpected good luck for Reclaim Detroit. Months before a massive fire engulfed the nonprofit’s space in a Highland Park warehouse last week, the company had been working with the city of Detroit and a local developer to secure new space in Midtown. Although no agreement has been finalized to redevelop the city-owned former South District Recreation Center building for Reclaim Detroit, which salvages

material from vacant homes and creates jobs in the reuse industry, discussions continue, said the planned developer, Ed Siegel, a co-owner of the Urban Bean Co. coffee shop in Capitol Park. The redevelopment of the building on Piquette Avenue would cost between $2 million and $3 million, he said. Contractors and construction timelines haven’t been chosen yet, pending finalization of a development agreement with Detroit City Council approval, Siegel said. Reclaim Detroit Executive Director Craig Varterian said the Piquette complex is about 46,000 square feet with

SEE INSURANCE, PAGE 29

outer buildings that are an additional 20,000 square feet. “The site is about 4 acres, so it’s perfect for our storage needs. The entire complex will be Reclaim Detroit’s,” he said. The nonprofit leased about 60,000 square feet in the Highland Park warehouse that burned. John Roach, spokesman for Mayor Mike Duggan, said there is no agreement on the building, which was the subject of a request for proposals from developers to turn it into a “deconstruction hub.” “The city does not comment on develSEE FIRE, PAGE 28 PHOTO BY KIRK PINHO

MUST READS OF THE WEEK Hiring boom

Whistle blowback

As supply of talent wanes relative to demand as baby boomers retire, businesses find creative ways to find new employees, Page 17

Proposed rule meant to head off nondisclosure agreements with potential whistleblowers could have unintended consequences, Page 21

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EXPANDING:

Machine manufacturer with a $1 million line of credit

Mental health board reverses CEO’s ending of ICA contract By Jay Greene jgreene@crain.com

The board of the Detroit Wayne Mental Health Authority has voted 7-2

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to reverse a decision by CEO Tom Watkins, who in December terminated a contract with Integrated Care Alliance , a Detroit-based developmental disability provider agency, over breach of contract issues. Authority board Chairman Herman Smitherman, M.D., declined several requests for an interview with Crain’s. Watkins was on vacation last week and unavailable for comment. In terminatTom Watkins: ing the $48 milCited terms of his lion contract on contract as CEO. Dec. 4, Watkins had contended ICA, which was acquired last summer by Long Beach, Calif.-based Molina Healthcare Inc. , was in violation of four contractual terms, including failing to notify the authority of an ownership change. Watkins cited terms of his employment contract as CEO as the basis to sever the ICA pact, according to documents obtained by Crain’s. “The board will be responsible for setting policy and for general oversight of the agency/authority’s operations, whereas Watkins will be responsible for day-to-day administrative activities,” according to Watkins’ employment agreement. But in the Jan. 20 meeting, the authority board passed a two-part resolution after a legal analysis and opinion issued to it by Detroitbased Allen Brothers PLLC. The board hired Allen Brothers in December to render a legal opinion on Watkins’ right to terminate the ICA contract and whether there was breach of the contract with the authority. In the resolution, the board said: “ICA did not create a breach of contract with the authority board upon the sale of their company to Molina, and that the authority to terminate a contract rests with the authority board and not with the CEO.” Moreover, the authority board said future proposed contract terminations must be presented to the board for approval. Voting in favor of the resolution were Smitherman, Cheryl Munday, Cynthia Taueg, Bernard Parker, Constance Rowley, Iris Taylor and Heather Underwood. Voting against were Timothy Killeen and Frank Ross, former chairman of the authority in 2015. Marsha Bianconi and Angelo Glenn abstained, and Terence Thomas was absent. Despite the legal opinion, it is still unclear why the authority board overturned Watkins’ decision on ICA. Watkins previously had terminated several contracts, including

ones with Wayne State University , Western Michigan University and Wayne County Retirement System , without board objections, according to authority records. Over the past five years, however, the Detroit Wayne board has authorized $17.5 million in additional funds to ICA in addition to contracted payments, according to documents on the authority’s website. Moreover, ICA was the lowestranked of the three developmental disability service providers under contract with the authority. The other two are Consumer Link Network and Community Network Services. Because of ICA budget issues and low ranking, Watkins and management did not want to offer a contract with ICA for 2015. However, the authority board voted last year to offer ICA another contract. In a previous statement to Crain’s, Molina confirmed it ac-

quired ICA/Synergy last year after purchasing a 49 percent minority interest in ICA in 2014. The sale of ICA was intended to help bolster the organization’s finances. Molina officials told Crain’s it was purchasing ICA because of its recent strategy to integrate physical and behavioral health care for members. Over the past several months, Medicaid HMOs and the Michigan Association of Health Plans have been lobbying state government officials to take over the $2.4 billion public mental health system, which is currently managed by nonprofit behavioral health organizations. “In no way does this motion alter our belief that nonprofits are the most effective method of providing mental health services in Wayne County,” the authority board concluded in its resolution. 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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Bill would stop advertising spending for Healthy Michigan Plan LANSING — A Republican state senator has floated a bill to prevent the state from advertising or encouraging enrollment in the Healthy Michigan Plan, the state’s Medicaid expansion program. But Sen. Tonya Schuitmaker, RLawton, told members of the Senate’s health policy committee last week that she revised the bill to clarify that she’s only seeking to stop the state from spending money on paid advertising. “Nothing in this bill prevents state employees from discussing Healthy Michigan, or from providing information written or otherwise or providing it on a website to residents,” Schuitmaker said during testimony. The distinction is important, in part because enrollment in Healthy Michigan has soared past expectations. As of January, the program has 613,747 participants, up nearly 7,300 members from the month before. The Michigan Department of Health and Human Services projected the program would enroll 320,000 people in the

LINDSAY VANHULLE Capitol Briefings lvanhulle@crain.com Twitter: @LindsayVanHulle first year of the program, which ended in March, and eventually reach 470,000. The state spends $2 million per year on advertising, half of which is federal money, a DHHS spokeswoman said. The remaining $1 million comes from the state’s roughly $10 billion general fund. Some Republican senators questioned whether the funds could be better spent on other services within the Healthy Michigan program, rather than on advertising. “Don’t you think this population

has been educated enough?” state Sen. Rick Jones, R-Grand Ledge, asked DHHS administrators. Even though enrollment has far surpassed expectations, enrollment fluctuates month to month, said Geralyn Lasher, DHHS’ external relations director. That’s because some people become newly income-eligible while others fail to file paperwork to determine continued eligibility or take jobs that have private coverage. Frequent turnover requires constant education, Lasher said. The committee didn’t vote on the bill. A spokeswoman for Senate Majority Leader Arlan Meekhof said he doesn’t consider the bill a priority.

removes the 60-day limit and also would allow “factual and strictly neutral information concerning the direct impact of a local ballot question on a public body or the electorate, except if the communication can reasonably be interpreted as an attempt to influence the outcome of a local ballot question.” Lyons was the sponsor of the origi-

nal provision. Gov. Rick Snyder signed the bill, but urged lawmakers to follow it up with clarifying legislation. On Friday, a federal district judge granted a preliminary injunction barring the state from enforcing the law ahead of the March 8 election. The bill moves to the House for a vote. Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

‘Gag order’ bill advances The House elections committee approved changes to a new law that prevents municipalities and school districts from sending mass mailings about ballot proposals 60 days before an election. House Bill 5219, introduced by Rep. Lisa Posthumus Lyons, R-Alto,

BANKRUPTCIES The following businesses filed for Chapter 11 bankruptcy during the week of Jan. 29-Feb. 5. Chapter 11 bankruptcy involves reorganization.

䡲 Joseph Investment LLC and Second Avenue Liquor Inc . dba Grocer Farm Market, 3435 Second Ave., Detroit (related cases). Voluntary Chapter 11. Assets not available, lia-

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䡲 Decarloan Enterprises Inc., 49556 Lakewood St., Macomb Township, Voluntary Chapter 11. Assets and liabilities not available.

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Dental Centers to move HQ, add jobs By Chad Halcom

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Bloomfield Hills-based Great Ex pressions Dental Centers could add up to 100 new jobs in Oakland County by the summer, under a plan to move its corporate headquarters and consolidate two practice support centers into the Onyx Office Plaza in Southfield. Parent company ADG LLC , formerly American Dental Group, is leasing about 30,000 square feet in the Onyx building, compared with an estimated 15,000 square feet at its previous Bloomfield Hills headquarters. It plans to gather 250 local employees in Southfield from its current corporate offices and a practice support center, along with 80-100 jobs from another practice support center in Norcross, Ga. “We had an opportunity to first get the office space in the Onyx, and an opportunity to move out of a Georgia facility, and we think we’ll end up with some efficiencies from it,” said CEO Richard Beckman. “It will help us create much better communication in the field with professionals, and for management it’s easier to talk with one voice, out of one location.” AGD claims more than 2,000 employees through practice support centers and other offices, and manages about 400 dentists, hygienists, orthodontists, periodontists and other related professionals through affiliated Great Expressions Dental Centers PC companies in 10 states. Beckman said about 25 of the 125 employees in Georgia will be transferred or assimilated into other offices in the area, while the remaining jobs will relocate to Southfield and combine with the Bloomfield Hills practice support center. The company has management service contracts for dental and oral hygiene professional groups in Michigan, Ohio, Texas, Georgia, Florida, Virginia, New York, New Jersey, Connecticut and Massachusetts. The consolidation means ADG will be hiring clerical and administrative employees who typically earn $15-20 per hour to help handle purchasing, accounting, human resources and other “back office” functions for its professional practices, Beckman said. Great Expressions has maintained the Norcross support center since it acquired Nanston Dental Group in 2010 and contracted to manage its dental practices in Atlanta. The company expects to have its Bloomfield Hills personnel in the Southfield office plaza by March, and finish consolidating the Georgia office support staff by the summer. 䡲 Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

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CRAIN’S DETROIT BUSINESS

OPINION Detroit ed reform merits high priority D

etroit is at the bottom of urban school districts in the country, and about half of the just over 100 charter schools operating in the city fare no better. For all the progress Detroit has made since bankruptcy, it cannot be a strong and sustainable city when its children can’t read and are unprepared for a competitive world of work. There are three basic issues: Finances, governance and educational success. To get to the third, you have to also solve the first two. Mayor Mike Duggan told state lawmakers last week that he backed a plan to restore local control of the schools and separate the district into “old company” and “new company” divisions — a la General Motors’ bankruptcy, with the “old company” continuing to pay down debt with voter-approved millages. But the key to the reform, Duggan said, is creating an education commission that would restore order to school openings and closings, charter and traditional public. The commission would make decisions based on how well schools perform. Children are not served, he noted, when 11 high schools are clustered in or around downtown where the high school population is tiny, and only three are on the west side where 4,000 students live. Good charter operators should welcome the commission because it would reduce competition from poor performers, whether charter or public. It is essential that lawmakers approve a plan to get true education reform in Detroit underway this year. The issue already has been deferred for too many years, and further delay will continue the consequences — to the entire region — of inconsistent educational quality and catastrophic school debt.

Water quality needs to be priority As we all learned from the crisis in Flint, clean and safe drinking water is not a resource to be taken lightly. (See stories, Pages 1, 27) Last week, The Associated Press reported on an analysis of an Environmental Protection Agency report that estimated nearly $80 billion is needed over the next 20 years to reduce sewage overflows and protect drinking water in the Great Lakes region. When needed, the federal government can provide low-interest loans to help communities upgrade sewer and water systems. If upgrades are deferred or water sources aren’t checked adequately for contaminants, water quality isn’t all that can suffer. Communities can see related losses, including beach closings or a decline in tourism-related industries such as fishing. Those sorts of problems can all be a side effect of sewer overflows or stormwater runoff that isn’t properly managed. The federal government should continue — and expand — low-interest loan programs. And the EPA needs to be a firm enforcer and aid in community problem-solving. But, beyond that, states and local communities need to take ownership of their water quality. There should never be another Flint scenario. But unless we stop deferring infrastructure upgrades and keep water quality as a front-burner topic, there undoubtedly will be.

TALK ON THE WEB Re: Snyder plans $30 million credit for Flint water customers I am very impressed by the ambitious support to right the ship in Flint and help all of its residents, especially the children. I am confused why the residents of this state are allowing our governor to push for legislation that would send large amounts of money that would have to be paid back by all state residents. Futurist610

Re: Christine Beatty to host radio call-in show

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

Successful retail requires either population density or a lot of safe, convenient parking. North of the downtown core, much of Woodward has neither. The new trolley should help when it’s operative, but Woodward retail is going to be a crapshoot until overall development is much further along. Citymec

The MPSC approved an increase of $238.2 million that went into effect Dec. 17, and DTE now wants another $344 million, probably because they didn’t get as much as they asked for in December. They stuck it to residents then, and they plan on sticking it to us again. calliffy2

Re: Reclaim Detroit tries to recover from Highland Park fire Sad. They really make some cool stuff. I hope they can bounce back. Trexinmichigan

I have no grudge whatsoever. At least she went away and is attempting to get her life together. However, she

Re: DTE files $344M rate request with MPSC

one who has overcome adversity. Her adversity was self made.

A 7.5 percent hike for homeowners and an average 5.6 percent cut for large industrial users? This sounds like a massive public subsidy of big business. How is that fair? Making the system more secure for all users is great, but since we all benefit equally, why not an equal rate hike for all users?

cowgirl_betty

Citymec

should not be considered some sort of hero and some-

Christine Beatty

Re: WSU’s medical school to begin curriculum overhaul I graduated about 20 years ago, and the curriculum was undergoing evaluation and changes back then. What in the world happened? We had a very diverse class, we had great education, great residency placements, good spirit, great relationships with all the hospitals of Detroit. contrarian90

Good for Christine that doors are opening back up for her. Just move on past the ones who can’t seem to forgive — the perfect ones who have NEVER done anything wrong. Enjoy the opening doors. Aj

Re: Financing finaled for Scott at Brush Park development Good news, but I’ll believe the re tail piece when I actually see it . We’re hearing about retail plans and space all of the time, especially on Woodward, with very little of that having panned out so far. Marco Ramirez

WAYNE STATE UNIVERSITY

Wayne State’s curriculum doesn't meet new standards of one medical education

accreditation group, according to a memo.

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Moceri, Oakland Township settle housing plan dispute By Kirk Pinho kpinho@crain.com

The settlement of a five-year legal battle between Moceri Cos. and Oakland Township will result in an even bigger housing development than the township fought in the first place. The deal was reached in a dispute over a proposed $93 million community for veterans, seniors and people with disabilities. It lets the developer, Auburn Hills-based Moceri Cos., add more living units and amenities to the project. A news release said U.S. District Court Judge Terrence Berg still must approve the settlement before it takes effect. Township Manager Dale Stuart declined to comment other than to say that the township board agreed to enter into the settlement. In December 2014, Moceri/DM Investments LLC , a subsidiary of Moceri Cos., and former township Supervisor Joan Buser, now a South Carolina resident, and the Michigan Paralyzed Veterans of America filed separate lawsuits against the township alleging violations of the federal Fair Housing Act, Americans with Disabilities Act, Michigan Persons with Disabilities Civil Rights Act and the equal protection guarantee of the U.S. Constitution, among others. The complaints were in response to a zoning dispute involving the Blossom Ridge project at Adams and Dutton roads on 42 acres of Moceri Cos.-owned land proposed in 2011 with 134 congregate care living units, 60 fourplex ranch units and 44 duplexes. All 238 residences were designed for the elderly and people with disabilities. Frank Ferriolo, a township trustee, said the settlement holds all parties harmless and the township admits “no guilt and our ordinances remain unchanged as we had been stating in our defense.” The settlement allows for another development on a second parcel of land, a veterans memorial park, rental assistance for lower-income veterans with disabilities and an additional 30 acres of community parks, the news release says. The new development, spread over the Blossom Ridge land and property in the Carillon Creek development at Adams and Silverbell roads north of Blossom Ridge, is expected to include 329 residences broken down as follows: 䡲 100 congregate care residences in Blossom Ridge. 䡲 21 two- and three-bedroom cottages in Blossom Ridge. 䡲 20 duplexes in Blossom Ridge. 䡲 48 fourplex ranch-style residences in Blossom Ridge. 䡲 56 assisted living health and wellness suites in Carillon Creek. 䡲 84 townhomes in Carillon Creek. Dominic Moceri, partner of Moceri Cos. and vice president of Moceri Management Co. , said in an interview last week that the final engineering phases are expected to take place throughout the year and improvements are expected at the

site next year, with buildings being constructed in late 2017 or early 2018. “We cannot survive on McMansions alone,” he said. Dominic Moceri: “You need diverHousing needed for sity for a comelderly, veterans. munity to be sustainable. The housing stock that’s growing the most is for the elderly, and we also need to make certain that our veterans have the housing they need.”

Opponents of the development have cited concerns about traffic congestion, density and depletion of housing values due to the development. “Blossom Ridge can go forward now for the first time within our density requirements,” Ferriolo said. “Carillon Creek, which was integrally tied to allowing that density for Blossom Ridge, can go forward.” The new development costs are expected to top $165 million, Moceri said. About 30 acres of Blossom Ridge and Carillon Creek are being donated as public park lands. The release says that other parts

of the proposed settlement include: 䡲 The township’s insurance carrier, the Michigan Municipal Risk Management Authority, matching the $400,000 Moceri is contributing to the veterans association for rental assistance for veterans who want to live in the Blossom Ridge/Carillon Creek development who have an annual income of less than 80 percent of the Oakland County statistical area median income. 䡲 The township raising $125,000 to match Moceri funding of $125,000 for a veterans memorial on the Moceri-donated land. In August 2012, the township

board approved rezoning the land at Adams and Dutton roads to accommodate Blossom Ridge . A referendum on the rezoning the next month, however, was approved to go on the ballot following public outcry from what the Moceri lawsuit called “a relatively small and uninformed but impassioned and vocal minority of residents.” In November 2012, five new members of the township board were elected, replacing the majority that had voted in favor of the rezoning. In August 2013, township voters overturned the rezoning in a 73-27 vote. 䡲

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Winery words

SPECIAL REPORT: MARY KRAMER Publisher mkramer@crain.com Twitter: @MKramerCrain

‘The Big Short’ sheds light on 2008 meltdown Once in a while, a movie comes along that I think is “required viewing.” “The Big Short” is one of them. Based on the book by Michael (“Moneyball,” “The Blind Side”) Lewis, it takes a highly complicated story — the mortgage meltdown of 2008 — and makes it understandable. Not defensible, but understandable. The movie’s cynical ending questions why nothing has happened to Wall Street to prevent another meltdown. In this presidential election year, it’s clear a lot of Americans aren’t happy. They don’t feel like they are getting ahead financially. But they read about a lot of folks who are, including people on Wall Street with multimillion-dollar payouts. Linda Paullin-Hebden, a partner at Warner Norcross & Judd LLP, read Lewis’ book. She thinks it’s ironic that the general public wasn’t more outraged by the bailouts of the big banks. Yet the rescue of the domestic auto industry was criticized. “Banks were making risky bets with all of our money,” says Paullin-Hebden, whose practice includes representing investment advisers. “Auto companies were actually making something. There’s a big difference.” Dan Broxup, meanwhile, thinks another meltdown looms, but it could hit the rich who have taken out low-interest loans backed by their own stock portfolios. The big loans are used to pay for anything from weddings to exotic vacations. When the market is going up, it’s a great deal because the client is still making money on his or her portfolio. But what if the market tanks? The lender may demand that you put more securities up as collateral or pay off the loan. Broxup, with the Grand Rapidsbased firm Mika Meyers, primarily represents investors against brokers and investment advisers. He thinks he could see more consumers filing claims against brokers or advisers if the market tanks. But these would be wealthy folks, not “average Joes.” Wealthy or middle class, PaullinHebden thinks a “lot of people just don’t understand this stuff,” including the tax rates on some of the big Wall Street payouts. If you’re in a hedge fund, your millions are taxed at capital gains rates versus the much higher personal income rate. Is that fair? Most people don’t get it, she says. Another reason to go see “The Big Short.” 䡲 Mary Kramer is publisher of Crain’s Detroit Business. Catch her weekly take on business at 6:10 a.m. Mondays on WJR AM 760’s Paul W. Smith show and in her blog at crainsdetroit.com.

MICHIGAN BUSINESS

How Chateau Chantal’s new CEO will lure next generation. Page 14

LANSING power brokers Law firms, others strengthen their lobbying corps By Lindsay VanHulle Crain’s Detroit Business/Bridge Magazine

LANSING — At times during the past few years, leaders of the Detroit Institute of Arts regularly invited Michigan lawmakers to tour the Midtown museum. The invitations were strategic. In 2013, the museum was in survival mode to keep its city-owned collection amid fear and speculation the art might be sold in federal bankruptcy court to appease Detroit’s creditors. Strategic lobbying and negotiating were invaluable during a sensitive time. Preserving the DIA art would require hundreds of millions of donated dollars, including from the state, where approval from outstate legislators wouldn’t be an easy sell. The “grand bargain” was not an easy pitch to make, even with influential nonprofit, city and judicial leaders involved. To aid in making that pitch, museum

leaders enlisted the help of their lawyers and lobbyists — namely, Detroit-based law firm Honigman Miller Schwartz & Cohn LLP and Gov ernmental Consultant Services Inc., a Lansingbased lobbying firm — to convince lawmakers that saving the DIA was of statewide necessity. “It’s pretty hard to do that sitting at a table in Lansing,” said Gene Gargaro, the DIA’s board chairman. Once lawmakers can see the art for themselves, he said, “the case gets a lot more meaningful to them.” Increasingly, lobbying isn’t just the work of traditional multi-client firms in state capitals. Some law firms with offices in Michigan are hiring more in-house lobbyists or forming other partnerships to handle meetings with legislators, prepare testimony for committee meetings and build the relationships needed to help swing the pendulum in favor SEE LOBBYING, PAGE 12 PHOTO BY BOB ALLEN

Top spenders: Multi-client firms Here are top lobbyists in the state, ranked by 2014 spending. Expanded list at crainsdetroit.com/lobby Governmental Consultant Services Inc.,

Lansing. $1,704,720 James H. Karoub Associates, Lansing. $1,479,059 Kelley Cawthorne, Lansing, Detroit. $1,335,613 RWC Advocacy (formerly Wiener Associates),

Lansing, $632,326 Michigan Health & Hospital Association,

Okemos, $547,920 Public Affairs Associates LLC, Lansing, $503,399 Muchmore Harrington Smalley & Associates LLC, Lansing, $474,741 Midwest Strategy Group of Michigan LLC,

Lansing, $446,668 Michigan Education Association,

East Lansing, $399,498 Michigan Legislative Consultants Inc., Lansing,

$398,839 Source: Michigan Campaign Finance Network

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LOBBYING FROM PAGE 11

of their clients. The investment in lobbying bandwidth isn’t without its critics, but nontraditional shifts in hiring — and consultants who serve as these behind-the-scenes dealmakers and educators — are a trend as clients seek to save money on litigation or influence policy decisions. Another motivation is to educate existing staff on legislative issues of the day. Honigman, for one, is bulking up its government relations practice by hiring Dennis Muchmore, Gov. Rick Snyder’s former chief of staff and a founder of Lansing lobbying firm Muchmore Harrington Smalley & Asso ciates LLC . Honigman plans to cre-

ate a “faculty” that can educate its younger attorneys, lawmakers and others in public policy and the legislative process. Milwaukee-based law firm Foley & Lardner LLP , which employs two attorney lobbyists in Michigan, said last month it has retained Lansingbased Michigan Legislative Consul tants Inc. as its Michigan lobbying firm for an undisclosed fee. The partnership, described as an “affiliation,” is expected to generate referrals in both directions for legal and advocacy work, said Rob Nederhood, who is senior counsel in Foley’s Detroit office and a former manager in Snyder’s administration.

To be sure, lobbying isn’t new to law firms. But it is a way to diversify their revenue streams; the billable hour common to legal work, for instance, often is replaced with monthly retainer contracts for lobbying work. The activity also comes at a time of increased spending — and heightened scrutiny of Michigan’s lobbying disclosure laws. The state earned an F for transparency in a report last fall published by the Washington, D.C.-based nonprofit investigative news organization The Center for Public Integrity. Lobbying in Lansing is dominated by traditional multi-client firms, led for years by GCSI, according to the Michigan Campaign Finance Net work . Michigan lobbyists last year spent more than $21 million through July, the most recent data available, up more than 1 percent from the same period in 2014. The big legal players in the Capitol — Honigman, Dykema Gossett PLLC and Clark Hill PLC — in general have spent more on lobbying each year, according to state lobbying records. Attorneys say their interest in growing this part of their business is to offer clients options for solving problems that don’t require a courtroom. “Sometimes litigation can take years and years and years and be very, very expensive,” said Sandra Cotter, who leads the government

policy and practice group for Dykema. The firm’s ninth-floor office is across the street from the Capitol. “If you can change the law to do what you need more efficiently and effectively, for less money, that’s a service to the client.”

Different paths A law firm’s lobbying activities commonly take one of several forms — employing its own non-attorney lobbyists, or attorneys who also are registered lobbyists with the state, to retain legal clients or attract new ones; working with established multi-client lobbying firms that share clients on major issues or campaigns; or forming affiliations with lobbying firms to refer clients to one another. The goal of all law firms that expand their lobbying practices is to keep legal clients with governmental affairs issues in-house. “That’s what we’ve been trying to say: ‘We’re a one-stop shop,’” Cotter said. Dykema has three lobbyists in Lansing, she said. The firm also has added three lobbyists in Washington, D.C., two in Chicago and one in Minneapolis, in addition to attorneys who also are registered lobbyists, she said. Dykema counts numerous automakers as legal clients. Toyota Motor Corp. was interested in hiring the firm to do some lobbying work,

the first carmaker to do so, Cotter said. Yet that poses other challenges: Because it was hired to advocate for Toyota, she added, Dykema probably wouldn’t agree to lobby on behalf of sales competitors Ford Motor Co. and General Motors Co. At Clark Hill, Del Chenault, the firm’s Lansing-based governmental affairs director, said lobbying revenue has grown an estimated 300 percent in the past seven years. He would not disclose revenue figures. The firm has 25 people in its governmental affairs practice group in seven offices, Chenault said. Twelve lobbyists work out of Lansing, three of whom are not attorneys. “Having a law degree is a great background,” he said. “Having experience in parliamentary procedure, having experience in the political dynamics and the political environment, understanding the arena from not only the issue perspective but also a campaign perspective — that provides a lot of depth.” Lobbyists with multi-client firms say teaming up with law firms can be advantageous for clients with complex issues, since lawyers can offer both legal advice and an understanding of the political environment. Yet even as the industry evolves and law firms increase their share of the business, multi-client firms have retained their influence because they focus 100 percent of their efforts on lobbying, said Mike

Hawks, a director with GCSI. It’s difficult to account for the day-andnight work of meeting with lawmakers and staffers when billing by the hour, he added. Some lawyers told Crain’s they don’t attend such events, preferring to leave them to non-attorney lobbyists on staff who specialize in relationship-building.

Adding horsepower Several firms said Honigman appears poised to boost its lobbying work, in large part because of Muchmore’s hire. Muchmore joined Honigman last week after roughly five years as Snyder’s chief of staff. He will be chairman of the firm’s government relations and regulatory practice group, with oversight of a team of attorneys who focus on health care, gaming and hospitality policy. “Certainly, there’s a lot of intellectual horsepower at Honigman, a lot of built-up experience and persuasion,” said Rich Robinson, the former director of the Michigan Campaign Finance Network. “It’s quite a natural (thing) for a law firm to exert itself in that way.” The new faculty concept, of which Muchmore will be part, “is really to add value,” said David Foltyn, Honigman’s chairman and CEO. “For us, it’s not just billing time to clients. SEE NEXT PAGE

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Muchmore reflects on long career

Michigan Economic Development Corp.

That experience led the pair to approach Michigan Legislative Consultants about a possible partnership. The firms work in similar areas, such as cutting through bureaucratic red tape.

Critics of ‘cozy’ Some critics, though, say Michigan law is too cozy toward lobbyists who previously worked for state government. The lack of prohibitions in Michigan against state government workers moving directly into a lobbying firm, often called “revolving door” laws, are one reason the state ranked last of the 50 states in a national transparency scorecard last fall by the Center for Public Integrity. Michigan law prevents legislators who resign from office from lobbying for the rest of the term they vacated, but makes no such provisions for administration employees. At least 33 states have some version of a revolving door law. Some prevent lawmakers, other elected officials or state department heads from lobbying for a period of a year

or two after leaving government, according to the National Conference of State Legislatures. “(In) a lot of states, Muchmore wouldn’t even have been allowed to take that job with Honigman,” said Chad Selweski, a former reporter at The Macomb Daily and freelance journalist who wrote Michigan’s transparency report. “The concern there is that if you know you’ve got a job lined up with a lobbying firm … you can start to push things a little bit in favor of that lobbying firm and clients before you even walk out the door.” Lobbyists are required to report only their total spending and their client lists, not how much they spend per client or per issue. Muchmore said he planned to register as a lobbyist this week. “I’m not interested in going out and going over to the Legislature and eyeballing people and then going to a client and saying, ‘I can beat these guys,’ ” Muchmore said. “I’m not interested in that kind of stuff, and that’s not Honigman anyway. Gargaro, of the DIA, would not say how much the museum paid its lobbyists on what would become the “grand bargain,” a deal topping $800 million that preserved the museum’s collection against being leveraged for city debt payments. State records show the museum paid $16,236 in 2013 and $64,207 in 2014 on “other lobbying expenses.” The DIA was “very close” to filing a lawsuit to defend the collection, but held off because its attorneys recommended trying to negotiate a solution, Gargaro said. That decision ultimately led to the grand bargain. “What you’re really saying is clients today are paying for results,” Gargaro

said. “When you have firms like that … the ability to talk about and resolve issues is enhanced and it’s not simply, ‘See you in court.’ That’s the least favorable option today.” 䡲

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INSPIRING RESULTS NT

We’re bringing value to clients.” Muchmore, though, is not the only lobbyist to translate his experience in the Snyder administration to private practice. Nederhood and Steven Hilfinger, both attorneys and lobbyists for Foley & Lardner in Detroit, left the law office to work for state government before returning to the firm a few years ago. Both spent time with the Michigan Department of Licensing and Regulatory Affairs, while Hilfinger also was an administrator with the

firm in Lansing, in 1988. He sold his interest in 2003. After he sold his partnership in the firm, Muchmore spent several years with Chicago-based executive search firm DHR International Inc. and agreed to take a two-year contract to run the Michigan United Con servation Clubs. “It was the toughest job I ever had,” said Muchmore, who was tasked with helping the organiza-

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Muchmore Harrington Smalley & Asso ciates LLC , a multi-client lobbying

tion become financially sound. His role as Snyder’s chief of staff wasn’t easy, either. As one of the governor’s top advisers, Muchmore found himself involved in the unfolding crisis over lead-tainted drinking water in Flint. Muchmore said the state has taken responsibility for the crisis but that failures at the local and federal levels contributed to the problem. Recently released emails show Muchmore at times expressing concern that Flint residents felt as though they were being “blown off” by state administrators and questioning the state’s role in switching Flint’s water source. With the benefit of hindsight, it’s clear that there were a series of breakdowns locally, with the state and with the federal government,” Muchmore told Crain’s. “Those with direct oversight should have ensured that corrosion controls were properly implemented and, when that did not occur, officials throughout the chain of command in the state should have caught the error and corrected it.” 䡲

Crain’s Detroit Business/Bridge Magazine

LANSING — Dennis Muchmore returned last week to lobbying, a job he had nearly 30 years ago in Lansing with the launch of a firm that still bears his name. But Muchmore said he’s not planning to go back to the same day-to-day lobbying work in his new position with Detroit law firm Honigman Miller Schwartz & Cohn LLP. Muchmore, 69, is the new chairman of Honigman’s government relations and regulatory practice group. He also will be part of a Dennis Muchmore: The new “faculty” team being crejob has changed ated to train too much. mostly newer attorneys within Honigman on public policy and the legislative process. He had served as Gov. Rick Snyder’s chief of staff since 2011. Muchmore came to Lansing in 1973 to work in the Senate. He re-

calls a childhood in politics, accompanying his mother, a Democrat, while she campaigned door to door in southern Illinois. “My brother has often reminded me she’d probably roll over in her grave if she knew I was doing this job,” Muchmore said of working for Snyder, a two-term Republican. Yet despite his early interest, Muchmore wasn’t looking to politics as a career. He received his bachelor’s degree in theater arts and English — more specifically, he said, 18th century English poetry — and taught high school in Warren for six years. Muchmore founded what is now

DES

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CRAIN’S MICHI GA

Northern Michigan winery tailo r By Seth Schwartz Special to Crain’s Detroit Business

Marie-Chantal Dalese grew up traversing the rich, fertile soil of Old Mission Peninsula. Now she’s drawing on her northern Michigan wine country roots to help market the region — and its wine — to a new demographic. Last year, Dalese was named

JOHN RUSSELL

Chateau Chantal overlooks the water on northern Michigan’s Old Mission Peninsula.

president and CEO of Chateau Chantal , a 65-acre winery and bed-andbreakfast her parents founded in 1983. Dalese was in second grade when her family first planted the vines for the vineyard. Today, she’s 37 and representative of the customer base the wineries are trying to capture. “For the past five years, our marketing plan has been segmented into two targets: the boomer gener-

ation, which is our core customer, and the millennials that we need to court for the future,” Dalese said. “While retaining the largest demographic footprint for wine consumption, baby boomers are now beginning a slow decline in consumption, which will accelerate in the next six years.” To reach that younger crowd, Dalese is expanding Chateau Chantal’s offerings beyond wine tastings to wine experiences — something her peers are watching.

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After spending her childhood at the family business, Dalese took the advice of her dad, Robert Begin, and sought experience outside the vineyard. That advice took her to Chicago, where she earned a degree in marketing and management at DePaul University and where she later worked for a wine distribution company; to France, where she spent time at a winemaking farm and bed-and-breakfast; and to Australia, where she earned a graduate degree in wine business — and met her future husband, Paul. In 2009, the Daleses came home to Michigan and Marie-Chantal took over as director of marketing at Chateau Chantal near Traverse City. That next year, she began apprenticing for CEO Jim Krupka; she took the reins of the family company last spring. At Chateau Chantel, Dalese manages a staff of 80, including 60 employees in the vineyard and tasting room and 20 at the bed-and-breakfast. Chateau Chantel produces 18,000 cases of its 27 wines annually. The winery also produces three distilled spirits. In 2004, it purchased a 55-acre Malbec vineyard in the Mendoza region of Argentina, rounding out its wine portfolio with a hot climate red. Over the past two years, the company’s growth has been steady at 2 to 4 percent; its annual revenue is $4 million.

A ‘sensory tour’ Last year, the winery hired Chef Reuben Rosales. A native of Saginaw, Rosales returned to Michigan after training at Le Cordon Bleu Culi nary Institute in Las Vegas and working as sous chef for Viceroy Hotels in Aspen, Colo., and Beverly Hills and Santa Monica, Calif. Rosales soon put a focus on farm-to-table, winethemed dinners, as well as informal cooking classes. Those classes and theme dinners, as well as wine boot camps, are some of the ways Chateau Chantal is reaching out to that millennial demographic: Dalese is using video content to promote the events through social media. In addition, the winery is relying on trends to capture that new customer base: Last year it introduced

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HI GAN BUSINESS

o rs tastings to younger drinkers a hard cider to its beverage lineup, and a new experience this year will feature small-plate pairings. Dalese calls that experience a “sensory tour.” “This will be a sit-down tasting focusing on how wine interacts with your senses; your specialized tour guide will lead you through our vineyard, cellar and winemaking process,” she said. “Once in the cellar, you’ll enjoy five small-bite food and wine pairings designed to treat your taste buds.” Other changes in the works for this year are an expansion of the winery’s group tasting room and a reservation-only policy for tour groups. “By providing a special area dedicated to the group, we can better serve both the group themselves and the non-bus group guests in the tasting room,” Dalese said. “It can be incredibly busy and hectic in the tasting room, and we want to ease that pressure by investing in a separate area.” Lee Lutes, a winemaker since 1998 for Black Star Farms on the nearby Leelanau Peninsula, said Dalese is a model of the next gener-

“Marie-Chantal is always prepared, sharp and very thoughtful; she’s a great addition to the industry,” Lutes said. “Our industry, without intent, is a bit of a boys’ club. It’s great to have more women at the helm of their businesses.” Karel Bush, executive director of the Michigan Grape and Wine Industry Council , worked with Dalese when she was a governor-appointed member of the council. “Chateau Chantal has achieved its success because the owners and partners have great business sense,” Bush said. “They’ve diversified. They really offer the whole package with food and wine. Marie understands the younger demographic and has the knowledge to expand the customer base.”

For love of wine More than 59,000 people visited Chateau Chantal in 2015. Here’s where they came from — and what they spent — for a glimpse at the customer base of northern Michigan’s wine industry.

About half of the guests are from metro Detroit, with 30 percent from West Michigan and the rest from Chicago and the Midwest. 46 percent visited between July and September; 24 percent came in the spring and fall.

60 percent of the winery’s sales were through distribution; 40 percent were through the tasting room.

Half of the customers who come through the winery bought at least one bottle of wine; bottles were between $12 and $16.

JOHN RUSSELL

ation of winemakers stepping in with ideas for change. Lutes and Dalese have worked together on several boards, including the Michi gan Wine Producers Association.

Marie-Chantal Dalese grew up on the vineyard where she now operates her family’s Chateau Chantal as president and CEO. One of her goals is to attract a younger generation of wine tasters.

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Bissell Homecare Inc. Based: Grand Rapids Operations: One office in Missis-

sauga, Ontario Employees: 10 Products/Services: Sales for vacu-

ums, deep carpet cleaning machines, steam mops, sweepers and rental carpet cleaning machines Top executive: Craig Emmerson, vice president and general manager of Bissell Canada Clients: Walmart Canada, Canadian

More information: Canada was the first international market for Domino’s. Michael Schlater opened a store in Winnipeg in 1983.

Faurecia North America Inc. Based: Auburn Hills Operations: One emission control

technologies facility in Brampton, Ontario Employees: 180 Products/Services: Full exhaust systems Top executive: Joel Kennedy, plant manager Clients: Ford and FCA

ries in Guelph, Ontario, and Aurora, Ontario, and one office in Montreal Employees: 253 Products/Services: Standards development, auditing, testing, certification and training for the food and beverage industries Top executives: Serban Teodorescu, global strategic consulting managing director; Petra Schennach, training and education global managing director for NSF International global food division

General Motors Co. Based: Detroit Operations: Headquarters, as-

sembly plant and Canadian engineering center in Oshawa, Ontario; a powertrain facility in St. Catharines, Ontario; an assembly plant in Ingersoll, Ontario; and about 460 dealers as well as sales offices and parts distribution centers throughout the country Employees: 9,000 Products/Services: Assembly, engineering and sales of Chevrolet, Buick, GMC and Cadillac vehicles Top executive: Steve Carlisle, president and managing director of General Motors Canada

facility in Maple, Ontario Employees: 500 Products/Services: Vehicle interior components and systems Top executive: Mike Renner, senior vice president of operations Clients: Ford, GM, Toyota and FCA

Based: Farmington Hills Operations: Plant with manufac-

Domino’s Pizza Inc.

Co. of Canada

Based: Southfield Operations: One manufacturing

Daifuku North America Holding Co. turing and office space in Hamilton, Ontario Employees: 200 Products/Services: Conveyors and conveyor parts and specialized equipment Top executive: Rob Meijer, intracompany operations manager Clients: General Motors, Chrysler, Ford and automotive suppliers

Canada and Latin America More information: Kelly Services opened its first international office in Toronto in 1968.

International Automotive Components Group

Tire, London Drugs, Sears, Home Hardware, Lowe’s, Rona, Costco, Home Outfitters and Amazon

elfor Holdings Inc. Based: Birmingham Operations: A headquarters in

Vancouver

Montreal ith a 2014 nominal GDP of $1.785 trillion, Canada is the 16th-largest economy in the world and is the Aurora world’s fifth-largest oil producer, according to the CIA World FactBrampton Oshawa book. Canada, similar to the UnitMississauga Toronto ed States, is a high-tech industrial Hamilton and market-oriented economy. London Canada is also the largest foreign supplier of energy to the U.S. Leamington Canada’s biggest exports are industrial machinery, motor vehicles and parts, aircraft, telecommunications equipment, chemicals, fertilizers, wood pulp, aluminum, plastics, natural gas, electricity and crude petroleum. Its largest export partner is the United States (76.8 percent). Canada’s biggest imports are motor vehicles and parts, machinery and equipment, crude oil, electricity and durable consumer goods. Its largest import partners are the U.S. (54.5 percent), China (11.5 percent) and Mexico (5.6 percent). Each World Watch features a different country. If you know of a Michigan company that exports, manufactures abroad or has facilities abroad, email Gary Piatek, senior editor, at gpiatek@crain.com.

Lincoln dealerships across the country Employees: 7,000 Products/Services: Ford Edge, Ford Flex, Lincoln MKX and Lincoln MKT and the 5.0L V8, 5.4L V8 and 6.8L V10 engines. Top executive: Dianne Craig, president and CEO for Ford Motor

NSF International Based: Ann Arbor Operations: Offices and laborato-

TI Automotive Inc. Based: Auburn Hills Operations: Fluid-carrying sys-

tems plants in Bramalea and Cambridge, Ontario Employees: 150 Products: Brake and fuel lines, fuel assemblies Top executives: Derek McDonald, plant manager; Carson Hodder, plant manager Clients: Hitachi, MEC Products, Ivaco Rolling Mills, Atlas Hydraulics, Transfer Flow Inc., YH America, Toyota and internal

Inteva Products LLC COURTESY OF FCA

FCA’s R&D center in Windsor.

FCA US LLC Based: Auburn Hills Operations: A headquarters, as-

sembly plant and R&D center in Windsor; an aluminum casting plant in Etobicoke, Ontario; an assembly and satellite stamping plants in Brampton, Ontario; and 440 dealers as well as sales offices and parts distribution centers across the country Employees: 11,000 Products/Services: Chrysler, Dodge, Jeep, Ram, Fiat, Mopar and Alfa Romeo vehicles and products. Top executive: Reid Bigland, president and CEO of FCA Canada

Ford Motor Co. Based: Dearborn Operations: A headquarters and

assembly complex in Oakville, Ontario; two regional offices in Edmonton, Alberta, and Montreal, Quebec; two parts distribution centers in Bramalea, Ontario, and Edmonton; two engine plants in Windsor; and 400 Ford and Ford-

Based: Troy Operations: A tier-one automo-

tive manufacturing and assembly facility in Whitby, Ontario Employees: 300 Products/Services: Production and assembly of automotive cockpits and headliners Top executive: Ralph Burlingham, plant manager

COURTESY OF ZIEBART

A Ziebart franchise in Montreal.

Clients: General Motors

Kelly Services Based: Troy Operations: A headquarters in

Toronto and a network of 22 company-owned and operated offices across Canada Employees: 200 Products/Services: Outsourcing and consulting services as well as staffing in the fields of finance and accounting, engineering, information technology, science, health care, office services, contact center, light industrial and electronic assembly Top executives: Byrne Luft, country general manager for Canada; Sergio Gomez Luengo, vice president and general manager for

Ziebart International Corp. Based: Troy Operations: A master licensee in

Laval, Quebec, and 86 franchise locations across the country Employees: 114 Products/Services: Appearance and protection services, including professional detailing, paint protection coatings, under body sound barrier, sprayed-on bed liners, automotive glass repair, architectural film, window tint, paint protection film, truck accessories, electronics, scratch repair services, vehicle wraps and vehicle graphics Top executive: Thomas Wolfe, president and CEO of Ziebart International Natalie Broda

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HealthRise expects to hit revenue highs By Dustin Walsh dwalsh@crain.com

For HealthRise Solutions , 2016 is expected to be a breakthrough year, followed by a breakout year in 2017, said CEO David Farbman. The Southfield-based firm, which focuses on helping hospitals improve billing, collections and other processes that contribute to revenue, is growing quickly, reaching $7 million in revenue in 2015 and projecting revenue to top $11 million in 2016. The firm’s products and services cover what is known as health care’s “revenue cycle,” the time when patients are admitted to the hospital, receive services and are billed. The end steps of the revenue cycle include the collections as hospitals seek payments from patients and private or government payers. “We use people, processes and technology with boots on the ground, helping hospitals get the job done,” Farbman said. “It’s really all about infused management David Farbman: and processes, All about “infused helping them do management.” a better job of screening patients and collecting revenue.” HealthRise has expanded its Michigan client base from a lone customer, Oakwood Hospital, in 2012 to include Botsford , Beaumont and Bronson hospitals. But Farbman said it’s about to cross state lines with new contracts. “We’re growing our business out of state, taking our technology to the next level then working on even bigger plays,” he said. “If we don’t double our revenue in 2017, I’d say we didn’t perform well.” Farbman has amassed a board of industry experts to help push the firm to new heights. HealthRise’s board includes Richard Helppie, founder of Bloomfield Hills-based Vineyard Capital Group and chairman and CEO of Santa Rosa Consulting Inc.; Andrew Echt, COO and director of Applebaum philanthropy at Arbor Investments Group LLC ; David Madgy, chief of otolaryngology at Detroit Medical Center and clinical professor at Wayne State University School of Medicine ; Florine Mark, president and CEO of Farmington Hills-based The WW Group Inc. ; and David Victor, president and CEO of the American Education Institute. “There comes a point in every company’s growth cycle where you need an influx of experts to be a game-changer,” Farbman said. “These people come from rich board backgrounds and a different understanding of the elements of the business we’re in. This board will help us fuel future growth.” 䡲

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SECOND STAGE

Shelving Inc. President and CEO Joe Schodowski found a

gem in a nontraditional hire. JACOB LEWKOW

As boomers retire, employers need to break with tradition to find new hires By Rachelle Damico Special to Crain’s Detroit Business

With the talent gap continuing to widen, second-stage businesses are going to have to come up with different tactics for finding talent. Demand is outpacing the supply of talent as baby boomers hit retirement age and the economy improves, putting pressure on companies to try new angles. “More people are leaving the

workforce than entering,” said Pete Davis, founder and CEO of Southfield-based Impact Manage ment Services LLC , which provides outsourced human resource services such as employee training and consulting. He’s worked with companies that are starting to groom people over the next five years for jobs that don’t even exist yet. “Companies are going to have

to start getting creative and figuring out how they can get in front of that.” For some, that means thinking about moving away from traditional cookie-cutter candidates in favor of nontraditional hires. One way to do that is to look in different places for people who otherwise may have no reason to ever come across a company. Immigrant workers, international stu-

dents, war veterans and the like can bring value, diversity and a fresh perspective to a company looking to expand its pool of talent. This approach could mean sacrificing certain skills for more valuable ones and putting a greater emphasis on cultural fit. “There are more jobs than talent that is qualified for them,” Davis said. SEE HIRING, PAGE 18

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HIRING FROM PAGE 17

“You have to be open. Some skills are more easily trainable than others.” But specialists say there are extra business rewards, beyond immediate hiring needs, for securing talent off the beaten path. There are many of these less-obvious pools of talent out there. Here are five:

1. Immigrants “There is a very large population of highly educated, skilled immigrants here in the United States who have a college education, professional experience and are fluent in English and permanently work-authorized,” said Allie Levinsky, Midwest program director of Upwardly Global, based in San Francisco. The nonprofit helps skilled immigrants and refugees integrate into the U.S. workforce. Levinsky said hiring immigrants helps fuel business growth, especially if a company is targeting international customers or markets. “When you have diversity of thought, it creates innovation and helps to drive better business outcomes,” said Levinsky. “Having people who work within your organization who understand different customers can only help you to be more effective in the way you align

Visa rules do allow for hiring international students Steve Tobocman, head of Global Detroit , said many employers misunderstand how the visa process works. “What we find is a lack of awareness on the rules and processes by which an employer can pursue talent,” said Tobocman. Most international students come to the U.S. on an F1 visa. International students using an F1 visa can stay in the U.S. for up to 12 months after graduation if they are using the Optional Practical Training program,

your business to the needs of different communities and customer bases.” Many organizations offer candidates that are already authorized to work in the United States, do not require sponsorship and are on their way to citizenship. “A lot of people don’t understand the immigration process,” said Levinsky. “Refugees are coming here and have work authorization. It doesn’t cost the employer anything.” Joe Schodowski, president and CEO of Auburn Hills-based Shelving Inc. , reached out to Detroit-based

which allows students to work in the U.S. by engaging in practical training during or after their program ends, as long as a university verifies that the student is working in the chosen field of study. International students majoring in STEM (science, technology, engineering and mathematics) fields can stay in the U.S. longer if they are using the OPT program. In 2008, President George W. Bush’s administration created the STEM OPT exten-

sion, which allows international students majoring in STEM fields to stay in the U.S. an additional 17 months after graduation if employers use an electronic verification system. Under new rules proposed in October, the Department of Home l a n d S e c u r i t y would extend the 17-month extension to 24 months. Altogether, business owners would have the opportunity to bring STEM talent into their company for three years at no extra cost to the employer.

Lutheran Social Services of Michigan

company’s best employees. “Our expectations were to find somebody that was willing to do the work and learn how to enhance their skills,” said Schodowski. “His work ethic was second to none.” Schodowski said he had to work with his installer for a few years to improve his English. He also flew and paid for his installer’s trip back to Bosnia when his father passed away. “It’s always hard to find good people, and when you find someone that’s good, you do everything you can to retain, train and keep them,” said Schodowski.

when he was in need of an installer for his company, which provides shelving and racking systems for warehouse manufacturing and distribution centers. The nonprofit suggested a Bosnian refugee, who did not require visa sponsorship. “(Immigrants) have to do a lot of work to get over here,” said Schodowski. “To me, that already demonstrates that they have drive, which you can’t teach.” The installer has been with Shelving Inc. for more than 14 years. Schodowski said he is one of the

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Tobocman said the rules allow an opportunity for an employer to work with international students and see if they’re interested in sponsoring an H1B1 visa. This visa provides three years of work authorization and can be extended another three to six years. Bringing in international talent pays “enormous dividends over time,” Tobocman said. “It can really give companies a competitive edge.” Rachelle Damico

2. International students Another group to consider is international students. Global Detroit , an immigrant-focused nonprofit led by Steve Tobocman, works with international students and studies their impact on Southeast Michigan’s economy. Tobocman said two-thirds of Michigan international students are majoring in STEM fields — science, technology, engineering and mathematics — which are in high demand among employers. “It’s incumbent upon us to have a strategy to attract those students and help them articulate into the workforce,” said Tobocman. Tobocman said many international students want to stay in the U.S. to work but are forced to leave the country once their student visas expire and have a limited time upon graduation to get a job and a work visa to stay. Companies can sponsor a visa and get top talent as a result. “They bring a diversity of perspective that can help Michigan companies have a competitive edge and find customers from across the globe, suppliers from across the globe and benefit from innovation from across the globe,” said Tobocman. Tobocman said visas can cost up to $5,000, including legal fees. It’s not cheap, but employers should consider the long-term investment. “The notion that you’re stopped somehow from considering almost two-thirds of an available talent pool because you’re unwilling to consider a $5,000 expense is penny wise and a pound foolish when you’re talking about that kind of top talent,” said Tobocman. Sophia Chue, office manager at Detroit-based Process Control & In strumentation LLC, recruits many international students because she said that the company values their work ethic. The firm hires and sponsors international students because many major in STEM fields — a plus for an industrial control systems engineering company. “Their aptitude for learning is there,” said Chue. “They want to succeed because they’re given an CONTINUED ON NEXT PAGE

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opportunity here that they’re often not allowed at home.” Chue said PCI often finds international student candidates at hiring events held by Wayne State University. “We see the value of the students when we get their réSophia Chue: Re- sumés,” said cruits international Chue. “They dig students. in, get involved and pay attention to everything.”

3. Military veterans Veterans are another often-overlooked group. “Our veterans come back with job-ready skills, but they’re also very trainable,” said Jeff Barnes, director of the Michigan Veterans Affairs Agency , which connects employers and veterans. “It’s that proven leadership, strong work ethic and trainability that makes them very adaptive,” said Barnes. Barnes said there are incentives for veterans. The military will pay for the last move of a veteran and the veteran’s family. A veteran can also receive up to five years of free health care. “That reduces costs for the busi-

ness,” said Barnes. “Veterans will relocate to where jobs and opportunities are.” MVAA has seen retention ratings of above 90 percent when employers commit time and investment into training veterans. “You tend to see a lot of loyalty that gets bred in your DNA as a military service member,” said Barnes. “When they identify with a mission, feel like they’re part of a team and they’ve got a future with the organization, they tend to stay.”

4. Long-term unemployed Don’t discount a candidate because of résumé gaps. Pamela Moore, president and CEO of Detroit Employment Solutions Corp., a nonprofit that connects employers and jobseekers, said there are many reasons candidates may have a gap on their résumé. Reasons can include medical issues, layoffs and returning back to the workforce after having a child. “A really responsible employer doesn’t just dismiss a résumé that has that gap,” said Moore. “Dig deeper and find out what those reasons are. It’s usually not that the employee isn’t employable or doesn’t have skills.” Moore said that as the talent gap continues to widen, employers will do themselves a disservice to ignore candidates because of résumé gaps.

“Employers are really at the point in Detroit — because things are growing and moving and sectors are growing so fast — that the old rules don’t apply anymore,” said Moore. “There used to be a time when you saw that gap and set the résumé to the side, but you don’t do that now.”

5. Ex-convicts Moore said companies should also consider former prisoners who are trying to establish new lives. “They’re probably older, more mature, have some work experience and know how to show up every day and come to work,” said Moore. Employers can also benefit financially when hiring those with a criminal record. Community Ventures Resources Inc., an initiative of the Michigan Economic Development Corp., gives employers up to $5,000 over time and can also help qualifying employees with transportation and other services. The U.S. Department of Labor provides bonding programs and tax incentives for companies hiring at-risk job seekers. Moore said she has worked with employers who say returning citizens are their best employees. “They have the right attitude because they’re grateful that somebody has given them that second chance,” said Moore. 䡲

Crain’s seeks 20s nominees It’s that time of year — time to nominate a 20-something professional who is making his or her mark in metro Detroit. This program recognizes the hard work of local rising stars while also giving them the opportunity to further propel their careers. Employers, take note: This is your chance to boast about internal talent. Candidates for Crain’s 20 in their include up-and-comers making waves within a company, men and women who have shown success or originality as entrepreneurs, or those who have made an impact in civic or community leadership roles. Winners will be profiled in an edition of Crain’s Detroit Business and on its website. Nominees must be 29 or younger before June 1. Nominations are due Feb. 29. To fill out the form, visit crainsdetroit.com/nominate. Read about last year’s class at crainsdetroit.com/20. Questions? Contact Assistant Managing Editor Kristin Bull at kbull@crain.com or (313) 4461608, or Special Projects Coordinator Keenan Covington at kcovington@crain.com or (313) 446-0417. 䡲

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Ad agency gains clients without sales reps Michael Watts co-founded Hook Studios in 2006 with fellow freelance

Hook Studios LLC Location: Ann Arbor Description: Advertising agency Managing director: Michael Watts Employees: 68 Revenue: $11.5 million in 2015

designer Aaron Schwartz and more talent than industry expertise. They had experience, and clients, as commercial artists but hadn’t worked for an agency or been groomed as managers. They rolled the dice anyway and started their own digital creative agency. Clients have included YouTube , Coca-Cola, Google and Old Spice. Problem: Being new to the industry, they didn’t have the contacts

most ad company founders do when they go out on their own. In other words, they didn’t have salespeople. They were left to whip up work from their existing contacts and take it from there. “We didn’t know we were supposed to have salespeople and didn’t have the money anyway,” Watts said. Solution : The solution came about less by planning and more by simply not worrying about it. The advertising industry is an incestuous one, with workers readily

bouncing from agency to agency. That worked well for Hook. As contacts at one client company moved to another, they took their goodwill toward Hook with them and sent more business Hook’s way. “Our clients became our sales force,” Watts said. After a while, Watts and his team recognized this and decided to stick with it: They hadn’t needed account managers so far; why bother with them at all? This is a bold step to make in any

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industry. It’s even more so in advertising, an industry all about sales. Employees at advertising agencies usually exist in one of two sides of the workforce: accounts (sales) or creative. To forgo accounts altogether is to disregard an ingrained industry practice. But Hook saw advantages. For starters, the company shaves 15 percent to 20 percent off expenses every year. Second, it’s more efficient. With the middle man between clients and creatives eliminated, jobs get done faster. Watts and his team made this the company’s modus operandi, installing brand and product managers as direct contacts with clients. “These are the people in the room who can speak with expertise about what is possible,” Watts said. Hook still has no account managers, and that doesn’t seem to be causing the agency any problems. Revenue grew to $11.5 million last year, a 75 percent increase from 2014. The company has worked with more than 150 brands and agencies. “Being ignorant of the standards the industry relies upon let us not fall into the same traps,” Watts said. Risks and considerations : The drawback of this approach is that it relies on happenstance events outside the company’s control. Contacts at client companies could very well stay put rather than take their love of Hook to new employers. “We couldn’t tell people who are being advocates for us to go somewhere else,” Watts said. That doesn’t deter Hook. It doubles down on the strategy by working harder to develop relationships with clients. It was relationships developed at Google and YouTube that pushed last year’s growth. Expert opinion: Startups commonly forgo salespeople out of necessity, said Dave Haviland, owner of Phi mation Ventures Inc., a consultant in Ann Arbor. For later-stage companies, it’s less common. That’s because people who are good at one thing, like creative work, are pulled away to handle sales, which they might not be so good at. “There’s no right answer. It’s a constant tension you have to manage,” Haviland said. Another way to handle this is to send in the expert-type manager at first, then pull the person back once the deal is done. This person can “assess the situation and wow the customer” before handing off follow-on tasks to a salesperson, Haviland said. Eventually, though, companies the size of Hook and larger need a formal sales team. “At the scale they’re at, it makes sense to have someone devoted to the sales function. The upside is, I bet they win a lot of bids because they don’t just have some schmuck salesperson going in. They have an expert go in, and it looks good,” Haviland said. Gary Anglebrandt

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EMPLOYMENT LAW Whistle blowback Proposed contractor rule could have unexpected pitfalls By Chad Halcom chalcom@crain.com

A proposed rule that could bar some companies from federal contracting based on their whistleblower practices could have unforeseen pitfalls, like bid protests and employee lawsuits, local attorneys said. The amendment to the Federal Acquisition Regulation, proposed Jan. 22 by the U.S. Department of Defense, General Services Administration and National Aeronautics and Space Administration, would forbid the government from spending money on businesses or nonprofits who require employees or subcontractors to sign “confidentiality agreements or statements prohibiting or otherwise restricting such employees or subcontractors from lawfully reporting (any) waste, fraud, or abuse.” Local attorneys said that may sound clear-cut, but government contractors and major law firms are likely to raise concerns about it during a comment and response period that lasts until March 22. The rule could lead to possible competitor bid protests, extensive review of supply-chain agreements, enforcement questions and “retaliation” suits from employees who feel their reporting rights were chilled by the company. Maureen Rouse-Ayoub, chairwoman of the Workplace Law Group at Detroit-based Bodman PLC, said the SEE WHISTLE, PAGE 22

Court ruling may change use of ‘pickoff’ tactic in class-action lawsuits By Chad Halcom chalcom@crain.com

A new U.S. Supreme Court ruling against Detroit-based Campbell Ewald Co . could close off or drastically change a tactic businesses nationwide sometimes use to defuse employee class-action lawsuits, before they can gain traction. Campbell-Ewald v. Gomez is not itself an employment lawsuit — the ad agency is accused of violating the federal Telephone Consumer Protection Act via mass-marketing text messages through subcontractor Mindmatics LLC to mobile phone users, on behalf of the U.S. Navy. But the court majority in that de-

cision last month switched its position on a 2013 employment case and said companies cannot get certain kinds of suits Deborah Brouwer: tossed out just by making offers to Dismissal tactic is individual emnot widespread. ployees in the early stages of litigation. At issue was whether lawsuit defendants can make an “offer of judgment” to an individual with a proposed class-action or

collective-action lawsuit, and then get the case dismissed even if the offer goes unanswered. It’s a strategy sometimes called a “pickoff” in class-action or collective-action cases: A person brings a suit on behalf of himself and others he claims have suffered the same violation. But the class isn’t a class until a judge says so by certifying one in court, and defendants sometimes offer to pay the individual claim before that happens. Why? To head off much more expensive class-action litigation. Pickoffs can take various shapes, but one approach is to make an offer of judgment, where an em-

ployer will accept a court judgment against itself and pay the highest sum an employee stands to gain in court. If the employee doesn’t respond in two weeks, the company can ask the court to dismiss the suit on the grounds that the offer made the controversy moot, even if it was not accepted or paid. The justices had previously found in Genesis HealthCare Corp. v. Szymczyk that an employment lawsuit in Philadelphia over meal break time for nurses could be dismissed that way. But local attorneys said other rulings were split about that subject, and the court in the Campbell Ewald case found an offer that

wasn’t accepted is void — essentially taking that defense strategy off the table. It’s unclear whether Campbell Ewald will continue to fight the text messages lawsuit at a California court. The Navy moved its advertising account to rival firm Young & Rubicam Inc. of New York last year, and Campbell Ewald parent company Interpublic Group (NYSE: IPG) fired the ad shop’s CEO, Jim Palmer, Jan. 29 after an unrelated racist email by a staffer at its San Antonio office became public. Kevin Wertz, the agency presiSEE TACTIC, PAGE 23

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WHISTLE

Transportation Act of 2015, which includes a modified Motor Vehicle Safety Whistleblower Act to incentivize automotive employees and insiders to bring forward information about safety defects. Rouse-Ayoub expects many businesses with government contracts, including local employers, to weigh in on some ambiguities in this proposal. “The statute is really quite vague. It provides that you cannot require a confidentiality agreement, but if

FROM PAGE 21

proposed rule is a piece of a larger framework of recent decisions and rules from President Barack Obama’s administration that redefines or sets other limits on confidentiality, through agencies like the National Labor Relations Board and the Equal Employment Opportunity Commission. Obama in December also signed the new Fixing America’s Surface

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you have one already, you have to notify employees that it’s changed,” she said. “But who’s going to be the appropriate law enforcement official to report these things? What is ‘lawful reporting’ under this rule? And someone is going to have to enforce this.” Rouse-Ayoub and Erin Toomey, partner in the government procurement practice in Foley & Lardner LLP’s Detroit office, both noted that the rule requires contractors to notify employees of subcontractors of changes in their agreements to comply with the new law, which could require an extensive review of records. But Toomey added that the rule will also require contractors to include a statement in contract bids or offers that it does not require such confidentiality agreements — possibly opening themselves to litigation if competitors or employees can challenge it. “Under the new rule, every time a company submits a proposal they must also expressly certify they are not preventing or chilling reports of fraud or waste and abuse. The fact that you gave a certification and it turned out to be inaccurate could give rise later to a (federal) False Claims Act lawsuit,” she said. “And if you can’t certify that, you might be at risk of losing the award.” Rouse-Ayoub said another part of the proposal that’s unclear is what the government will do if a contractor doesn’t comply.

Are they going to refuse to pay you on work done? Are they canceling the contract?” she said. “What’s the remedy here? What is the intended outcome?” In an industry like defense, where engineers and program managers or suppliers often move from one company to another, Toomey said, it’s possible one bidder could even protest a contract award to another one if any of its employees used to work at the winning bidder firm and still have handbooks that suggest employees are chilled from reporting abuses. Michael Brady, a partner at Warner Norcross & Judd LLP’s Southfield office, said the larger emphasis on incentives and protections for whistleblowers by the Obama administration, including the FAST act signed in December, can create difficulties for auto suppliers who try to handle waste and abuse internally. “That’s definitely a concern for us, the fact that incentives can mean an individual employee who doesn’t have all of the available information or an agenda of their own might be overly encouraged to run to the Department of Justice instead of letting the company look into the problem,” he said. Gary Klotz, shareholder in the labor and employment practice at Butzel Long PC, said it’s possible a new rule could also drive up federal agency complaints and civil lawsuits, including possible retaliation claims,

which have gained popularity in discrimination cases before the EEOC. The EEOC reports receiving almost 38,000 complaints for retaliation against an employee for reporting claims of workplace discrimination or civil rights violations in 2015, compared with just 18,200 in 1997 — even though total EEOC complaints are only up about 11 percent over the same period. Whistleblower cases as a whole before the Occupational Safety and Health Administration are also up about 65 percent between 2005 and last year, according to an OSHA annual statistical report. It’s possible the new rules for defense and other government contract reporting could also generate more cases for employers to grapple with, attorneys said. “At the EEOC, when you just compare the number of cases on more traditional claims of discrimination, those have actually been more flat. Those are essentially the same (now) as in 1997. But the total volume is up” due to retaliation claims, Klotz said. “It’s just become the theory du jour. You can allege retaliation for claiming discrimination, which is a separate claim from whether or not you prove actual discrimination, and it gives you another bite at the apple of making a case.” The government is expected to take industry comments and other proposals from the comment period under review starting this spring. 䡲

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dent who has replaced Palmer as CEO, did not respond to requests for comment on the case. Laura Wytsma, lead attorney for Campbell Ewald at Loeb & Loeb LLP in Los Angeles, also could not be reached. Jason Thompson, head of the complex litigation department at Sommers Schwartz PC in Southfield, and partner Deborah Brouwer of Detroit-based Nemeth Law PC, both said the dismissal tactic used in Campbell-Ewald is not widespread. But employers sometimes use it if a case is nearly past the statute of limitations to be heard in court, or if no other employee at the same company is likely to bring a similar lawsuit later. “It’s a strategy that works well in wage and hour cases because they’re very susceptible to a party being able to figure out exactly what is owed to one person,” Brouwer said. “And that area is one of the hottest in employment law right now, for a couple of reasons. They’re very predisposed to class actions, and if there is a class, there’s incentive for plaintiff firms to take the cases. “But I don’t think this (dismissal) tactic is all that common, because it would really be limited to cases where there is unlikely to be another plaintiff.” Thompson said his law firm has handled at least 100 lawsuits under the federal Fair Labor Standards Act nationwide, like Genesis Healthcare, since the court made that ruling in 2013, and he estimates five or fewer tried to use that specific strategy. But it is an occasional defense strategy for “running out the clock,” or settling with individuals until the alleged violation was too far back in the past for a new class action to be filed, he said. “When Genesis Health came out, a lot of us in the plaintiff’s bar were screaming that the sky was falling, and companies were going to pick off a lot of suits this way, and that didn’t really happen,” he said. “For one thing, they have to allow the judgment to be entered against them in federal court, where other parties can reference it, and not many attorneys are comfortable with that.” Both attorneys also said the ruling may have eliminated one pickoff strategy, but it remains to be seen if the court will allow a different approach — like actually attempting to pay the judgment, not just offering one, by depositing the sum into an escrow account or with a court clerk. Thompson said he actually had a potential class action under the same Telephone Consumer Protection Act law get dismissed just in the past few months, after a client actually accepted an individual offer and left the case without a controversy. “(Putting up the money) might not succeed as an actual strategy, but someone’s probably going to try it. Because the Supreme Court almost invited it, by the way the ruling was made,” Brouwer said. 䡲 Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

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24 UPCOMING EVENTS Fireside chat. 5-8 p.m. Feb. 18. Marketing and Sales Executives of Detroit. Global business leaders Steve Miller, CEO of IAC, and Steve Kiefer, vice president of global purchasing and supply chain for General Motors, are the speakers. John McElroy will lead the discussion. Westin, Southfield. $45 members; $60 nonmembers. Website: msedetroit.org. The Unlocked Summit. 9 a.m.-5 p.m. Feb. 20. A la carte Galore and Em-

pireLifeMag.com Learning experience for entrepreneurial-minded women. The goal is to help participants execute their plans and “unlock” their goals, dreams and futures as professional women. Includes 10 workshops and a panel discussion on the “State of the New Detroit.” Keynote speaker and Unlock the City award recipient is Detroit City Councilwoman Mary Sheffield. TechTown, Detroit. $100$150. Contact: TaQuinda Johnson, phone: (248) 716-0240; email: hello@theunlockedsummit.com.

CALENDAR 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. Young Professionals Panel. 7:30-9:30 a.m. Feb. 24. Leadership Oakland. Moderator: Jennifer Korman, prod-

uct and change management analyst, Mercedes-Benz Financial Services. Panel: Ryan Bladzik, village council president, Holly; Kim Martin, systems manager, performance improvement, Henry Ford Health System; and Treger Strasberg, co-founder/ CEO, Humble Design, on perspectives to leadership. MSU Management Education Center, Troy. $32 members, $36 nonmembers. Website: leadershipoakland.com.

The 2015-16 Detroit Red Wings Season, 11:30 a.m.-1:30 p.m. Feb. 25. Detroit Economic Club. Players and coaches discuss the season. MotorCity Casino Hotel, Detroit. $45 DC members, $55 guests of members, $75 nonmembers. Phone: (313) 9638547; email: info@econclub.org. Autonomous vehicles are coming: Opportunities and challenges. 7:30-11 a.m. March 2. Automation Alley.

Seminar explores the challenges and opportunities that self-driving cars will pose to our region, including legal, economic growth and policy considerations. Speakers include: John Maddox, assistant director, University of Michigan Mobility Transformation Center, and director of Collaborative Program Strategy, UM Transportation Institute; Richard Walawender, corporate group coleader and director, international practice and automotive practice

groups, Miller Canfield; Tom Kelly, COO and director of entrepreneurship, Automation Alley; Bryce Pilz, clinical assistant professor, UM Law School; Matt Gibb, deputy Oakland County executive. Automation Alley, Troy. $30; $40 walk-ins. Phone: (800) 4275100; email: info@automation alley.com. Government Forecast Breakfast. 99:30 a.m. March 7. Birmingham Bloomfield Chamber of Commerce. Speaker: U.S. Sen. Gary Peters. The Townsend Hotel, Birmingham. $50, $40 members, $290 corporate table of eight. Phone: (248) 644-1700; email: Chamber130@bbcc.com.

Calendar guidelines. Visit crainsdetroit.com and click “Events” near the top of the home page. Click “Submit Your Events” from the dropdown menu. 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.

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AUTOMOTIVE William R. Patterson, Senior Vice President, Treasurer, Ziebart International Corporation In addition to his current responsibility as Treasurer and overall management of accounting, purchasing, treasury, warehouse, and logistics functions, Bill will also be responsible for Human Resources, Licensing and Trademarks. Prior to his promotion, Mr. Patterson served as Vice President and Treasurer of Ziebart International Corporation. Mr. Patterson joined Ziebart in 2005 as Director of Finance from Prestolite Wire Corporation, most recently as Corporate Controller.

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Lisa Hamameh is a municipal litigation attorney in the Farmington Hills office who practices in: municipal, zoning and land use, and liquor licensing law. A graduate of Wayne State University Law School, Hamameh has been selected as a dBusiness Top Lawyer, Best Lawyers in America® 2016 and was also chosen for "Women in the Law" by Michigan Lawyers Weekly. Hamameh serves on three sections and two committees of the State Bar of Michigan, in addition to numerous, associations and community service organizations.

Dee Cramer, Inc. Dee Cramer announced that Heather Menary has joined the company as their new CFO to help guide the financial and strategic direction of the 78-year old firm. Heather brings deep manufacturing experience. She received her degree in Accounting from Michigan State University and became a CPA in 1999. Her career foundation in public accounting and subsequent experience in Risk Management, capital planning, financial reporting, supply chain, sales and operations provide her with a widespread business perspective.

Ray Littleton, Shareholder, Foster Swift Collins & Smith PC Ray Littleton has been elected as a shareholder in the firm of Foster Swift Collins & Smith, PC. A graduate of Yale University and Marquette University Law School, Littleton is a litigation attorney in the Farmington Hills office where he specializes in three areas: insurance litigation and claim disputes, employment and management disputes and business and contract disputes. He is a member of both the State Bar of Michigan, serving on the Representative Assembly and the State Bar of Wisconsin.

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PEOPLE: SPOTLIGHT Burns to return to Wayne State to lead foundation St. John Providence Foundations

President Susan Burns will return to Wayne State University this week to again lead the Wayne State University Foundation

and serve as vice president for development Susan Burns and alumni affairs. Burns, 54, will succeed veteran fundraiser Chacona Johnson, 62, who is retiring. Prior to serving at St. John Providence Foundations, Burns held various leadership development roles at WSU between 2001 and 2008.

Amherst adds Lewis to lead capital-raising group Amherst Partners LLC, a Birmingham-based investment banking firm, has recruited Gary Lewis as a partner to head its new capital-raising group. Lewis was most recently a managing director at Southfieldbased investment banking and private investment firm Cascade Partners LLC and has worked at Grosse Pointe-based Bainbridge Ventures Inc., among other firms.

Bassett & Bassett hires heads of overseas offices Detroit-based Bassett & Bassett Communication Managers and Counselors has hired managing directors for its newly opened offices in Lebanon and India. Bassett & Bassett named Nasser Beydoun to lead its Middle East office in Beirut. Beydoun, who has been vice president, multicultural marketing, for the company, is a former executive director of the Dearborn-based American Arab Chamber of Commerce and former CEO of Qatarbased Wataniya Restaurants Inc.

He was a 2002 Crain’s 40 under 40 honoree. Vidya Moorthy, former vice president, client services, for Bassett & Bassett, was named to lead its Asia Pacific operations office in Pune, India.

Walker-Miller names Walker COO, Batie CFO Detroit-based Walker-Miller Energy Services announced the hiring of Greg Walker as COO and Cornell Batie as COO.

CrainsDetroit.com/JobConnect

Walker has had decades of leadership experience in Fortune 500 companies, including Wal-Mart, Home Depot and Sears. Batie formerly was executive vice president, CFO and COO for the Detroit Jazz Festival. He was a finalist for the 2012 Crain’s CFO of the Year award. 䡲

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Detroit Lions president details his game plan By Bill Shea bshea@crain.com

Rookie Detroit Lions President Rod Wood doesn’t have experience in pro football but is using his years in the corporate world to reshape the long-struggling team. Wood spoke with Crain’s last week about his retooling of the business side of the Lions’ front office and the decision to nab Bob Quinn from the New England Patriots to oversee the football operation. Wood was the Ford family’s financial adviser as head of Ford Estates, and his hiring by Lions owner Martha Firestone Ford caught fans and media by surprise. He ignored the initial round of criticism and engaged in a front office shakeup that began when Ford fired his predecessor, Tom Lewand, and General Manager Martin Mayhew in November. Perhaps Wood’s most critical business move came Feb. 1 when he promoted the team’s vice president of events, Kelly Kozole, to senior vice president of business development. She will oversee events, marketing, corporate partnerships, ticketing, retail merchandising, corporate communications, digital media, broadcasting, community relations and the football education division, the team said in a statement. Kozole, 44, has been with the Lions since 2002. She fills the opening made when Wood fired Elizabeth Parkinson, who had been the team’s senior vice president of marketing and partnerships since 2012. She and Jennifer Cadicamo, the team’s vice president of marketing/partnership activation who reported to Parkinson, were terminated Jan. 26 as part of Wood’s reorganization. Wood said he wanted to combine all sales and marketing efforts under one person. Previously, several of the business units now under

Rod Wood Age: 55 Job: President of the Detroit Lions since November Past jobs: Hired in 2007 as president and CEO of Ford Estates LLC, which provides financial and lifestyle advice to the Ford family. Starting in 1999, he was executive vice president of wealth management for Wilmington Trust Co. and held various executive positions at Comerica Bank. Education: Graduated from Goodrich High School; earned a bachelor’s degree from the University of Michigan and a graduate degree from the ABA Graduate Commercial Lending School. Family: Wife, Susan; daughter, Allison; son, Taylor

Kozole were split. “That wasn’t the most optimal structure,” Wood said. Kozole is akin to a chief revenue officer in the corporate world, he said. She functionally replaces Parkinson, but retains oversight of non-football events at Ford Field, an area of revenue growth. “I think she’s the right person,” he said. “She’s got the revenue side.” Kozole will be building out her organizational structure, and searches are underway for more senior hires in marketing and sales, Wood added. Some business units don’t report directly to Kozole. Team CFO Allison Maki reports to Wood, as do the heads of media relations, information technology, human resources and facilities management. Kozole’s job is to boost local revenue, a critical practice for all 32 National Football League clubs. While the NFL apportions its $12 billion in annual revenue among all the teams, certain local spending is

kept by the team — and that money is what can drive improvement on the football field, Wood said. Player salaries are governed by the NFL’s salary cap (likely $155 million per team in 2016), but spending on coaches, staff, facilities, programs, etc., has no limit. The more revenue the Lions can generate locally, the more money they spend on enhancements to the stadium and practice facility, and on coaches and staff, Wood said. “All those things fall outside the salary cap,” he said. More money makes it easier to win, he said, and winning makes it easier to generate more money. The Lions’ $298 million in revenue, as estimated by Forbes.com for 2014, ranked 27th in the 32-team NFL.

Football changes Wood was part of the search team that hired Quinn away from the Patriots, where he was a key management figure in that club’s four Super Bowl victories since 2001. “We’re clearly partners and working together,” Wood said. “He’s a phenomenal addition to our organization. He has a great approach, a lot of energy, and he’s smart.” Quinn and Wood are parallel on the organizational chart and both report directly to Ford, the same arrangement under which Lewand and Mayhew operated. Wood and the Lions hired longtime NFL consultant Ernie Accorsi for their general manager search. He continues to rely on Accorsi’s counsel. “We’ve talked about a number of things, about people we have hired and didn’t hire,” Wood said. For example, Accorsi advised Wood on Matt Harriss, whom the Lions hired on Jan. 29 as their vice president of football administration. That’s a long title that means he’ll be

the team’s salary cap guru — a critical job that affects all football personnel decisions. Harriss spent 10 seasons in the New York Giants football operations department. Accorsi was general manager of the Giants and hired Harriss in 2006. Wood said he’ll be adding more names to his Rolodex in coming days and months. After the Super Bowl, Wood will spend two full days meeting with all business heads at the NFL’s New York office to get to know them, he said. “I really want to get to know these people and have a relationship with them,” he said. While he’s tapped some nonfootball people for advice, those who work inside pro football offer the best counsel, Wood said. “People inside the NFL have been way more valuable to me,” he said.

(Ford) family man Wood said he attended Lions-re-

WOOD FROM PAGE 1

ous look at later this year. “Now that it’s been open for more than a dozen years, we need to be refreshing the stadium,” he said. Any changes likely would begin in 2017, Wood said. While details remain fluid, Wood did say the Lions will take a hard look at reducing the number of suites in favor of larger, open club spaces, access to which would range in price. That would follow a sports industry trend of building fewer suites or converting traditional suites into other types of premium spaces. “The suite market has changed over time as companies want to entertain in different ways,” Wood said. The Lions already have converted some Ford Field spaces into clubs, such as the MGM Grand Detroit Tunnel Club that is a bar through which players enter and exit their locker room. Other NFL teams have created similar spaces, such as the Dallas Cowboys and Cleveland Browns, and base-

come with courtside seats. Gensler has a prior relationship with the Lions: It co-designed the Lions’ $35.5 million, 115,000-squarefoot headquarters and training facility in Allen Park that opened in 2002. A September 2014 analysis by Bloomberg showed that the Lions’ top single-game suite rental price of $10,300 was the least-expensive premium cost in the NFL. Detroit’s entry price of $9,300 for a 20-person single-game suite was among the lowest, but well ahead of the Oakland Raiders’ $4,610. The Lions are still determining some pricing for 2016. “We’re evaluating our ticket strategy right now,” Wood said. While specifics aren’t yet in place, he said the prices will remain in the NFL’s lower quartile for ticket costs. Season ticket holders were informed last week via email that prices would increase slightly for the third consecutive year. They will range from $399 to $2,238. 䡲 Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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ball’s Detroit Tigers and Cleveland Indians in recent years converted stadium suites into club or gathering spaces. The Lions will seek to create the right mix of suites, club seats and premium gathering spaces, Wood said. “That’s being done at a lot of other stadiums,” he said. Sports industry insiders agree. “The appetite for premium is evolving. What used to be 14-16 person suites are changing,” said Amanda Verhoff, executive director of the Cincinnati-based Association of Luxury Suite Directors. “Clients want to entertain in smaller doses, so new products are hitting the market.” Examples include 4-6 seat loge boxes (something the new Detroit Red Wings arena will include), and “living room” spaces that have cushioned club or premium seats facing TVs. Another trend are bunker suites that don’t have views of the court/game, she said. The Palace of Auburn Hills has such suites, which are for high-end entertaining that

lated meetings with the Ford family for a year before being hired and advised the Fords on whether Lewand and Mayhew should be fired. He did not say what his recommendation was. Now that he’s president, he said, his strategy is to rebuild the Lions’ culture by making the best hires and ensuring the best person is in each job. “The main thing I’m trying to do is build a great organizational culture, with the right people in right spots,” he said. He also believes he brings additional value to the role because of his deep connection to the Ford family, especially Martha Ford and daughter Sheila Ford Hamp, who is said to have her mother’s ear regarding the Lions. “One advantage of me being here, I do know ownership’s wishes and communicate back to them what’s going on,” Wood said. 䡲

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FLINT FROM PAGE 1

because their water tested positive for lead or because of the city’s poor image right now,” he said.

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happening downtown recently,” said Ron Sims, owner of The Torch Bar and Grill, a downtown fixture for 70 years. “Then we started having a slowdown in November and December.” Sims said sales were down 5 percent to 6 percent in January, although that month is typically slower, he said. “Still, people are every day, a hundred times a day, asking us about the water.” The Torch, like several downtown Flint restaurants, had a reverse osmosis filter installed in the fall and also offers patrons bottled water. Reverse osmosis allows water pressure to push tap water through a membrane, which filters out contaminants. Sims bought The Torch in 2006 and did well even during the recession as downtown Flint saw some revitalization. Now he is not sure what will happen. “Everybody is worried, but the flip side is we will get money for improved infrastructure like new pipes,” he said. Robert Kittel, who owns the downtown building that houses The Mad Hatter hat and sundries store, said it is hard to tell if his property has lost value. “Not much has changed hands downtown to know,” he said. “I think the city’s real estate as a whole might lose value, but not the downtown. People are still upbeat on downtown.” Kathy Jackson, owner of Healthy Dollar in downtown Flint and a former reporter for Crain’s Detroit Business and its sibling publication Automotive News, said her business has not been affected by the water crisis. But she fears her 8,000square-foot, three-story retail building, where she also lives, could be losing its investment value. She bought the property in 2008 when it was in foreclosure and has invested considerably in building improvements. “The businesspeople down here are taking a chance and betting on the resurgence of this place,” Jackson said. “I’ve invested in Flint’s future. People have purchased property that was abandoned, but with this water fiasco, you feel like Flint’s image is falling further.” Jackson worries that real estate

investment gains over the past three to five years will be rolled back by the crisis. “This water thing is horrendous. People in Flint need jobs, but why would any business want to invest in Flint now with this water crisis?”

Thinking positive Franklin Pleasant and Erin Caudell, owners of The Local Grocer, are taking a glass-half-full view. “Flint is our home,” Pleasant said in an email. “Throughout our lives and careers, we have chosen different ways to give back to our community. Nourishing Flint with healthy food and contributing to a healthier economy is something we are both passionate about.” After running a business at the downtown Flint Farmers’ Market, the couple in December opened a grocery store just outside of downtown. It sells locally produced, all-natural products. They also farm and serve ready-to-eat food at the store. Before opening the store, the couple had a water filtration system installed for the whole building. Tim Goodrich and Cinthia Montague, co-owners of Sutorial, a shoemaking operation downtown, opened their business in Flint three years ago. “We certainly realize the good and the bad here,” Goodrich said. He said water issues are not impacting their business. They are not tied to the local economy, but sell their boots primarily online. “But I’m surprised at the extent of how farreaching the water situation is,” he said. Jessica Buchanan, 27, a barista and crepe maker at Flint Crepe Co., pointed to Sutorial as one of “the many wonderful things going on in the city.”She added that she grew up in the area, left for a while and came back to embrace the city’s arts and culture scene. “Things are popping up here,” she added. “Flint will come back.” The crepe restaurant is one of four downtown businesses in which Robb Klaty is a managing partner. A Flint native, he started the crepe restaurant in 2011 and has since opened in the same downtown building as Merge, a bar with Asian-inspired fare; Table & Tap, serving Michigan beers and barbecue; and Tenacity Brewing, a microbrewery and restaurant. He lives above the crepe shop with his wife and six children. “I want to be part of bringing Flint’s core back,” Klaty said. Klaty was ahead of the curve because in 2011, three years before the water crisis, he bought a reverse osmosis system with demineralization capabilities for his building of businesses. He acquired a carbon filtration system for the brewery. Meanwhile, Schwartz said, the CEOs of the cultural institutions have been meeting monthly and talking about the disturbing effects of the water crisis. “It has been a slow crash since April 2014,” she said. She is hopeful Flint will continue to support its cultural offerings. “Take the Flint Institute of Music. Kids come from all over to attend,” she said. “I don’t think parents will stop sending their kids there just because they have to drink bottled water.” 䡲

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Lawsuits flow over Flint water crisis By Chad Halcom chalcom@crain.com

Wherever plenty of outrage and blame are going around, plenty of litigation is likely to follow — and so far the Flint water crisis is no exception. At least nine lawsuits have landed over the past three months in Genesee County Circuit Court, U.S. District Court in Detroit and the Michi gan Court of Claims over lead contamination, a surge in Legionnaires’ disease or other public health issues connected to city water drawn from the Flint River over 18 months. Most are brought as potential classaction suits on behalf of all city residents and businesses that might be affected by corrosion or contamination of the city’s aging water infrastructure. And while experts think governmental immunity and court precedents make suing Flint and the state a longshot, some are taking a novel approach by instead targeting companies that contract with Flint or operate in the city, or specific government employees. Eight residents allege professional negligence in a Genesee County lawsuit against Houston-based Lockwood, Andrews & Newnam Inc., an engineering services and program-management company hired to oversee a refit of the city’s nearly century-old Water Treatment Plant when Flint separated itself from the Detroit Water and Sewerage Department in April 2014. The company, which has Michigan offices in Flint and Lansing, has made more than $3.5 million on various city contract awards since preparing an analysis in 2011 for then-Mayor Dayne Walling about using the Flint River as a water source. The lawsuit alleges the company knew that river water needed anticorrosion treatment chemicals, didn’t require them and didn’t evaluate water coming out of the tap before completing the switch to river water. But the company defended its services to Flint in a statement last week. “(The company) provided a limited scope of engineering services to address specific components of the

SBA economic disaster declaration sought Gov. Rick Snyder is seeking an economic disaster declaration from the U.S. Small Business Administration for Flint and Genesee County as the city struggles with lead-tainted water. Snyder’s office says the request was made Thursday and would pave the way for financial assistance for city residents and business owners affected by the contaminated water from aging water pipes. If approved, low-interest loans would be made available for small businesses and private, nonprofit organizations that suffered substantial economic injury as a direct result of the contaminated public water supply. The Associated Press

City of Flint’s water treatment plant. LAN has provided those services in a responsible and appropriate manner in accordance with industry standards,” Pete Wentz, executive director of Chicago-based Apco Worldwide and a spokesman for Lockwood Andrews, said in a statement on the company’s behalf. “We believe that this lawsuit has no merit and will vigorously defend our position in court.” Mark McAlpine, owner of McAlpine PC in Auburn Hills and attorney for the residents in the lawsuit, said Lockwood Andrews was advised in November 2014 of a need to correct high trihalomethane levels in the Flint water supply, possibly suggesting the water was aggressively chlorinated to eliminate other chemicals it knew were present. “The engineers are by far the most knowledgeable people involved … and that’s why we think LAN has such pronounced liability in this case,” he said. “In municipal contracts like these, everyone else relies on them, even the regulatory structure that’s been put in place.” The case is one of at least four re-

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lated cases assigned to Genesee Circuit Judge Archie Hayman. In other suits, Southfield-based Fieger, Fieger, Kenney & Harrington PC

accuses McLaren Regional Medical Center of gross negligence and premises liability on behalf of two Otisville residents and two Flint residents who allegedly contracted the Legionella virus that causes Legionnaires’ disease within days of being admitted to McLaren’s hospital in Flint — including Debra Kidd, 58, who later died at Genesys Regional Medical Center last August. “A hospital won’t make money if it discloses a Legionnaires’ outbreak from contaminated water, and a governor will stop hearing whispers that he’s being considered for higher office if he reveals a water and Legionnaires’ crisis. We know what happened here,” Geoffrey Fieger said in a statement. Laurie Prochazka, vice president of marketing and communication at McLaren-Flint, said the hospital received that lawsuit only last Thursday and does not comment on pending litigation. E. Powell Miller, president of the Miller Law Firm PC in Rochester who specializes in class actions, securities litigation and high-stakes commercial litigation, said getting a judge to sign off on a class action will be difficult, because of governmental immunity and court precedents in personal injury cases. “Here especially you’re likely to have cases where some (residents) had no real injury at all, and some people have serious injury, and some had only minor injuries or different kinds of injuries — and so by personal injury law their claims aren’t similar enough to go forward together as a class (in court).” he said. “My heart goes out, but this is a case that has spurred several investigations and has the attention of the president of the United States. So hopefully the parties come up with a quick solution or some legislation comes to provide help. Because the law is very tough when you try to sue the government.” Neither the McAlpine suit nor the Fieger suit targets the state, the city or Gov. Rick Snyder, although the Fieger case does name current and former employees Stephen Busch, Liane Shekter-Smith and Brad Wurfel of the Michigan Department of Environmen tal Quality as defendants.

Two other proposed class-action lawsuits at U.S. District Court both name Snyder, former Flint Emergency Manager Darnell Earley, Walling and the city, among other defendants, while a third, by the American Civil Liberties Union of Michigan and the Natural Resources Defense Council along with the Concerned Pastors for Social Action and parent/resident Melissa Mays, names the members of the Flint Receivership Transition Advisory Board and State Treasurer Nick Khouri. Mays is also a plaintiff in lawsuits in Genesee County and the Court of Claims. 䡲 Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

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software gets better, me and my colleagues, the thundering herd of Merrill Lynch, maybe we wouldn’t be as necessary.” Robo-advisers use the same software as their human counterparts and relay portfolio management advice but are not involved in more complex scenarios such as tax or estate planning. Robo-advisers could advise clients on holdings totaling $2.2 trillion by 2020, up from $16 billion in 2014, according to a June 2015 report by Southfield-based business management consultant A.T. Kearney Inc. But for Sowerby, the threat of automating senior investing analysts seems trivial. “I certainly don’t dismiss it. I think robo-advising is, and will be, embraced by the younger generations, who are more likely to trust the algorithms that brought us Facebook, Twitter, etc., than a financial adviser,” said Sowerby, the portfolio manager and chief market analyst for Loomis Sayles & Co. LP in Bloomfield Hills. “But we gain our value by thinking forward on investing during troubling times, not by how well the market performed yesterday,” he said. “I’m not sure a robo-adviser could have talked a client off the proverbial ledge when the market was in peril in 2009. But, hey, if at minimum robo-advisers get these young people in the (investing) pool, then applause.”

“A lot of people associate automation with low-wage jobs and factories ... but the big disruption is not going to be in manufacturing, it’s going to be in the white-collar sector.”

sidiary of France-based Dassault Systemes SE . “Our system allows manufacturers to know what’s happening in real time, and the system can make optimized decisions. So often, decision-making happens at the local level from the gut, without taking in the big picture. That’s where we come in.” Dassault works in 12 industries, mostly manufacturing, but Michel said the company could expand in the future to other industries, such as the financial sector, that are interested in identifying patterns and improving overall efficiency.

Martin Ford, author of the book Rise of the Robots: Technology and the Threat of a Jobless Future

The use of robo-advisers is only a microcosm of the potential scope of automation, Ma said, which is creating concerns of how economies will handle the potential displacement of millions of jobs. “A fear definitely exists out there,” Ma said. “I don’t think there’s a clear answer whether we’re going to adapt (jobs) fast enough to keep up.” Martin Ford, a University of Michigan graduate and author of the book Rise of the Robots: Technology and the Threat of a Jobless Future, believes automation will bring with it radical change and immense job losses. “A lot of people associate automation with low-wage jobs and factories ... but the big disruption is not going to be in manufacturing, it’s going to be in the white-collar sector,” Ford said. “We’re going to automate jobs even though they require a college degree. It’s an inescapable global phenomenon.” Without a radical rethinking of

From line to foreman Robots are nothing new to the factory floor — General Motors Co. used the first industrial robot in 1962 — but now even decisionmaking is automated. At Dassault Systemes Corp. in Troy, software engineers have created the digital factory, allowing manufacturers to monitor in real time their entire operation from product assembly to logistics. The Dassault system lets manufacturers design and test parts in a simulated production environment, then monitors all resources from staff, to production, to customer delivery. “We’re not to artificial intelligence yet, but we’re getting closer,” said Patrick Michel, vice president of user experience at the U.S. sub-

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our taxation and economic structure, Ford said, automation will lead to mass unemployment and unravel the purchasing power automation is designed to create. “This isn’t only about unemployment, it’s about economics,” Ford said. “We have to have people who can buy the products we’re producing, and without discretionary spending, that’s not going to happen and will lead to economic stagnation.” Ford’s theory to alleviate the negative effects of automation is to create a minimum income, guaranteed by the government through taxes, to allow citizens to maintain purchasing power and, hopefully, spur innovation. “There’s a utopian outcome possible where no one has to do a dangerous job and have more leisure time, but we need to make a conscious choice,” Ford said. “Without a guaranteed income, companies and the wealthy are going to own the machines and undermine the mechanism that gets purchasing power into the hands of consumers.” Ma agrees that fundamental changes to our system must occur, such as increased taxing of companies like Google Inc. , Apple Inc. , and others that control as much as 75 percent of artificial intelligence intellectual property, but that automation is necessary. While automation could, in theory, replace millions of jobs, it’s needed to push gross domestic product growth, said Ma. “Historically, GDP growth has been driven by population, but the labor force is shrinking,” Ma said. “Our global GDP growth will be lower, so the only way to push growth is with productivity or automation.” The U.S. labor force — defined as those who either have a job or are actively seeking one — dropped to 62.6 percent, a 38-year low, throughout much of 2015 from more than 66 percent in 2007. Labor force dropout remains an issue in the U.S., especially as the baby boomer generation continues to retire — at a rate estimated at more than 10,000 per day. Fewer workers mean a weaker economy, but growth can be buoyed by increases in productivity. Productivity, often cyclical, rose sharply coming out of the Great Recession at 7.9 percent in the second quarter of 2009, but has fallen recently by 3 percent in the last quarter of 2015. It’s no surprise that Japan and Germany, countries with the oldest average age, have embraced rapid integration of automation, Ma said. The average U.S. work week was 34.4 hours in 2015, compared to just 26.37 hours in Germany, according to data by the Organisa -

FROM PAGE 3

“If we can maintain the growth and create jobs fast enough, it’s going to be a good thing,” Ma said. “We’re going to be left with more free time, and people won’t be doing as much physical labor.” 䡲

opments during the selection or negotiation process,” he said. In the interim, Reclaim Detroit has been temporarily operating out of space in a building at 1314 Holden St., owned by the Henry Ford Health System, that Reclaim Detroit had been using for bulk storage, Varterian said. But that doesn’t make the urgency for new space any less, he said. Just part of that is because the Holden Street building is about one-third the size of the space it had on Hamilton Avenue. “This entire situation with the fire has created a situation where we realize we have to expedite this,” he said. “Highland Park is a wipe-out over there.” Varterian said Reclaim Detroit had $472,000 in assets — between reclaimed wood, mill shop equipment, finished goods, field equipment and vehicles — and insurance will reimburse, at most, $100,000 of that inventory value. While he is grateful for even that reimbursement, there are still headwinds in the future. “The rest, that’s the challenge. We are going to have to go out to our community and seek support with foundations and individuals,” Varterian said. To help, a Crowdrise fundraising campaign launched last week had raised just over $7,800 as of Friday morning. It’s not just Reclaim Detroit that was affected. Plymouth-based Helm Inc., which owned the 565,000-square-foot building until 2012 when it sold it for $325,000 (58 cents per square foot) to an entity registered to Jeffrey Seskin, also lost its branded merchandise inventory. But Helm had business continuity and disaster recovery plans in place that have helped in the days since the fire, said Erica Konner, the company’s director of marketing and communications. “We are saddened by what happened, but business was running and it was great that we had these plans to rely on,” she said, adding that the company also has locations in Livonia, Atlanta and California. “We are still working with our clients to determine what’s next.” Helm leased 155,000 square feet of the 70-year-old building, she said, and employed five people there. The company has about 150 employees total. Some of Helm’s clients include Ford Motor Co. , Dodge and the state of Michigan. Attempts to reach Seskin last week were unsuccessful. There were three other tenants in the building, including Recycling Revolution LLC , a plastics recycling company that Varterian said occupied a majority of the warehouse. The cause of the fire has not yet been determined. Varterian said in an email he was told by a fire inspector it may have started in the back of the building in the recycling operation space. 䡲

Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

tion for Economic Co-operation and Development.

FIRE

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policyholders as higher premiums. Yet redemption of the tax credit will have budget implications. The new claims caught the state by surprise: It wasn’t until December that Treasury Department officials linked several months of lower-than-expected state insurance tax collections with the new incentive. The credits were expected to cost the state’s general fund $60 million in the 2015 fiscal year, which ended Sept. 30, and $80 million annually going forward, according to treasury estimates. News of the insurance credit surfaced last month during a state revenue estimating conference. That drop in state revenue will be one factor in the 2017 fiscal-year budget Gov. Rick Snyder presents Wednesday. In all, 93 auto insurance companies claimed the new credit for the 2014 tax year, which affected the 2015 fiscal year’s revenue, state Treasury Department spokesman Terry Stanton said. He would not disclose the names of the companies or the amount of individual credits, citing privacy laws. The 2012 law that triggered the credit moved management of the assigned claims program from the Michigan Department of State, where it had been housed since its creation in 1973, to the Michigan Automobile Insurance Placement Facility, or MAIPF, the state’s residual insurance market that assigns uninsured injury claims to participating carriers. The facility also serves as Michigan’s insurer of last resort and writes policies for drivers who can’t buy one on the open market because of poor driving records. Legislative fiscal analysts and some lawmakers were surprised in January when they learned of the credit, in large part because few had connected the tax code implications to the legislative changes to the state’s insurance code.

“Nobody reading the bill would have said, ‘Oh, wow, this is going to do something with the taxes. We should have the tax people look at it,’ ” said David Zin, chief economist with the Senate Fiscal Agency , which analyzes the fiscal impact of proposed legislation. “I mean, it’s a bill that just moved something from one office to another. “The fact that this hasn’t become an issue until this year and we made the change three years ago suggests at the time (insurers) may not have known it was going to be an issue, either.”

‘Big tax reduction’ Michigan’s assigned claims program processes between 3,000 and 4,000 claims each year, said Terri Miller, executive director of MAIPF. It covers medical care for people injured in auto accidents who don’t have insurance. That can include pedestrians hit by an uninsured or hit-and-run vehicle when the pedestrian also doesn’t have his or her own coverage, or children riding in an uninsured vehicle who are involved in a crash. Seven private insurers handle assigned claims as they would for any other policyholder, with one notable difference — the recipient of assigned claims benefits does not pay an auto insurance premium. The cost of that care, then, is shared among all insurance companies that write auto policies in the state through an assessment MAIPF charges. More than $238 million was charged to insurers last year, according to the Insurance Institute of Michigan. For years, the insurance industry had pushed for legislation that would move the assigned claims program into an organization with more expertise in vetting claims. At the time, the Department of State agreed, saying it wasn’t designed to be an insurance claims adjuster, according to a House Fiscal Agency analysis of the original 2012 bill. The MAIPF has hired more claims adjusters and is auditing medical costs and catching fraud,

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: Amway ................................................................116 Autoliv.................................................................116 Belfor Holdings ..................................................116 Bissell Homecare...............................................116 21 Bodman...............................................................2 22 Butzel Long ........................................................2 21 Campbell Ewald.................................................2 26 Charles Stewart Mott Foundation ................2 Chateau Chantal ...............................................114 Clark Hill ..............................................................112 Daifuku North American Holding ...................116 28 Dassault Systemes ..........................................2 Detroit Employment Solutions.......................119 Detroit Institute of Arts....................................111 Detroit Lions.........................................................11 4 Detroit Wayne Mental Health Authority.........4 Domino’s Pizza...................................................116 Dykema Gossett ................................................112 Faurecia North America...................................116 FCA US ................................................................116 27 Fieger, Fieger, Kenney & Harrington...............2 26 Flint Institute of Arts.......................................2 Flint Public Library...............................................11 29 Focus: Hope ......................................................2 Foley & Lardner ...........................................112, 22 Ford Motor..........................................................116 General Motors..................................................110 Global Detroit ....................................................118

Governmental Consultant Services................111 6 Great Expressions Dental Centers...................6 HealthRise Solutions ........................................117 28 Helm ...................................................................2 Honigman Miller Schwartz & Cohn............111, 13 20 Hook Studios ....................................................2 Impact Management ........................................117 29 Insurance Institute of Michigan.....................2 4 Integrated Care Alliance....................................4 International Automotive Components Group.116 Inteva Products.................................................116 Kelly Services .....................................................116 28 Loomis Sayles ...................................................2 M. Arthur Gensler Jr. & Associates...................11 27 McAlpine ............................................................2 3 Mich.Automobile Insurance Placement Facility.3 29 Michigan Department of Treasury ................2 Michigan Veterans Affairs Agency..................119 27 Miller Law Firm ..................................................2 9 Moceri Cos. ..........................................................9 23 Nemeth Law ......................................................2 NSF International..............................................116 Process Control & Instrumentation .............118 3 Reclaim Detroit ...................................................3 23 Sommers Schwartz..........................................2 TI Automotive....................................................116 22 Warner Norcross & Judd..................................2 Ziebart International........................................116

Miller said. Pete Kuhnmuench, executive director of the Insurance Institute of Michigan, which represents property and casualty insurers in the state, told Crain’s the organization learned the credit existed late in the legislative process, but it wasn’t discussed because “that wasn’t the focus of the debate.” Most insurance companies that write auto policies in the state — but especially those headquartered in Michigan — can redeem, dollarfor-dollar, the amount they pay to the MAIPF under a provision in the state’s tax code. That credit, in turn, reduces the companies’ state insurance tax liability. Zin said insurance tax collections are roughly 20 percent of the state’s total tax revenue. “It’s a big tax reduction,” he said of the credit. Kuhnmuench met last week with House Speaker Kevin Cotter, who wants to learn the effect of the credit to date and what effect it could have if eliminated, Cotter spokesman Gideon D’Assandro said. Senate Minority Leader Jim Ananich, a Flint Democrat, plans to propose a bill that would end the credit and dedicate the $80 million in revenue to fix old pipes that have leached lead into the city’s drinking water.

Rising costs Insurers, however, say they

would be forced to pass on any increases in the amount they pay into the assigned claims program to policyholders if the credit were eliminated. About half of the state’s assigned claims come from Wayne County, with 40 percent from Detroit, Miller said. Detroit has some of the nation’s highest auto insurance rates, and driving without coverage is common. Costs of uninsured crashes also have been rising. Assessments to insurers have jumped from $141.4 million in 2008 to $238.7 million in 2015, data show. A tax credit draws revenue from the state’s general fund — thus, from all taxpayers — rather than only from motorists who purchase insurance policies, Miller said. Kuhnmuench calculated the cost per vehicle of the credit to be roughly $31.73, based on $238 million in payments from insurers last year divided by an estimated 7.5 million auto insurance policies in Michigan. “If we eliminate that credit, automatically our costs go up that much because we can’t write it off anymore,” he said. “Is that the right public policy that the cost of this social benefit should only be imposed upon the folks that actually obey the law and buy the car insurance like they’re supposed to?” 䡲 Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

CRAIN’S DETROIT BUSINESS www.crainsdetroit.com Editor-in-Chief Keith E. Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Editor Jennette Smith, (313) 446-1622 or jhsmith@crain.com Director, Digital Strategy, Audience Development Nancy Hanus, (313) 446-1621 or nhanus@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Managing Editor/Custom and Special Projects Daniel Duggan, (313) 446-0414 or dduggan@crain.com Assistant Managing Editor Kristin Bull, (313) 446-1608 or kbull@crain.com News Editor Beth Reeber Valone, (313) 446-5875 or bvalone@crain.com Senior Editor Gary Piatek, (313) 446-0357 or gpiatek@crain.com Research and Data Editor Sonya Hill,(313) 446-0402 orshill@crain.com Editorial Support (313) 446-0419; YahNica Crawford, (313) 446-0329 Newsroom (313) 446-0329, FAX (313) 446-1687 , TIP LINE (313) 446-6766

REPORTERS Jay Greene, senior reporter Covers health care, insurance, energy, utilities and the environment. (313) 446-0325 or jgreene@crain.com Chad Halcom Covers litigation, the defense industry and education. (313) 446-6796 or chalcom@crain.com Tom Henderson Covers banking, finance, technology and biotechnology. (313) 446-0337 or thenderson@crain.com Kirk Pinho Covers real estate, Oakland and Macomb counties. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor Covers media, advertising and marketing, the business of sports, and transportation. (313) 446-1626 or bshea@crain.com Robert Snell, reporter Covers city of Detroit and regional politics. (313) 446-1654 or rsnell@crain.com Lindsay VanHulle, Lansing reporter. (517) 6572204 or lvanhulle@crain.com Dustin Walsh, senior reporter Covers the business of law, auto suppliers, manufacturing and steel. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits, services, retail and hospitality. (313) 446-1694 or swelch@crain.com

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Focus: Hope CEO plans to retire By Sherri Welch swelch@crain.com

Focus: Hope CEO William Jones Jr. plans to retire at the end of the year. The Detroit-based nonprofit’s board of directors has formed an executive search committee led by board member Elliot Forsyth, vice president of business operations at Michigan Manufacturing Technology Center , to conduct a nationwide

search for Jones’ successor. Jones, 64, has been planning his retirement for nearly a year with the Focus: Hope board, the nonprofit said in a statement. The retired COO of Chrysler Financial, Jones served as chairman of the Focus: Hope board before coming out of retirement in 2009. During his tenure, Focus: Hope launched the Hope Village Initiative, a long-term initiative to improve the lives of the families in the 100-block neighborhood, and it brought An droid Industries and the Oakland Uni versity School of Nursing programs to its campus, the nonprofit said. Focus: Hope credits Jones with expanding services for seniors, reinvigorating its early childhood learning programs and advancing manufacturing programs and partnerships with multiple universities and institutions over the past seven years. Still, his tenure has been marked by funding challenges in the face of declining federal and state support for its workforce development programs. Those programs have not had sustained funding since 2011 when federal earmarks for its programs were cut.

Since then, the program has relied on piecing together funding from the state, corporations and donors. The nonprofit reported positive financial results in recent years as it closed out a long-term, $100 million campaign that exceeded its goal by $2 million and raised $30 million between the end of 2012 and end of 2014. But Jones said there were times when the nonprofit had to use campaign proceeds to keep its workforce training programs going. Last year, Focus: Hope furloughed employees, cut pay, idled its machinist and information technology workforce training programs and laid off 17 employees after nearly $3.2 million total in workforce training and related grants from the Michigan Economic Development Corporation and Detroit Employment Solutions Corp. expired or were awarded to other nonprofits. Focus: Hope said in November it had secured $4.36 million in cash donations, pledges and equipment from corporate funders during its annual corporate leadership breakfast in early November, with much of it in-kind donations rather than cash. But the nonprofit has not yet restarted the idled training. It is, however, recruiting students for those programs and doing assessment testing in preparation for restarting them, said Rich Donley, senior vice president of public relations and marketing communications at Mort Crim Communications Inc. Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Senior Account Executive Matthew J. Langan Advertising Sales Catherine Grace, Joe Miller, Sarah Stachowicz Classified Sales Manager Angela Schutte, (313) 446-6051 Classified Sales Lynn Calcaterra, (313) 446-6086 Events Manager Kacey Anderson Creative Services Director Pierrette Templeton Senior Art Director Sylvia Kolaski Marketing Coordinator Ariel Black Special Projects Coordinator Keenan Covington Sales Support Suzanne Janik, YahNica Crawford Editorial Assistant Nancy Powers Production Manager Wendy Kobylarz Production Supervisor Andrew Spanos

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ON THE WEB JAN. 30-FEB. 5

Detroit Digits QStride moves A numbers-focused look at last HQ to downtown week’s headlines: Detroit from Troy 4th Where physicians educated by the

echnology solutions provider QStride Inc. has relocated its headquarters from Troy to the Fifth Third Bank at One Woodward in downtown Detroit. The new offices are in about 3,000 square feet on the 16th floor of the skyscraper owned and managed by Bedrock Real Estate Services LLC. QStride moved 10 employees to the new space and expects to hire another 30. Lease terms were not disclosed.

COMPANY NEWS 䡲 The former Dearborn Hyatt Regency, now operating as the Edward Village Michigan, was sold to an offshore group with properties in the Toronto area, said Michael O’Callaghan, executive vice president and COO of the Detroit Metro Convention & Visitors Bureau. The facility, one of the state’s largest hotels, had operated as the Royal Dearborn Hotel & Convention Center

under the ownership of Israelbased Royal Realties LLC. It went on the market last June. 䡲 Sterling Heights-based Key Safety Systems Inc. will be acquired by Chinese auto conglomerate Ningbo Joyson Electronic Corp. in a $920 million deal expected to close in the first half of this year. 䡲 French engineering firm Segula Technologies acquired Plymouth Township-based Griswold Engineering Inc. Terms were not disclosed. Griswold will report to Segula’s Troy-based subsidiary, Segula Technologies Group USA. 䡲 Detroit-based online mortgage lender Quicken Loans Inc. expanded into the personal loan business by launching RocketLoans, an online service. 䡲 Ann Arbor-based RPM Ventures is to raise a $100 million venture capital fund, according to a filing with the U.S. Securities and Exchange Commission. 䡲 Nonprofit health plans HealthPlus of Michigan in Flint and Health Alliance Plan in Detroit received final state and federal regulatory approval to merge. 䡲 Connecticut-based XPO Logistics Inc., which acquired Ann Arbor-based Con-way Inc. in 2015, said it cut about 160 jobs in its less-than-truckload business. 䡲 Ann Arbor-based NSF International, a food safety auditing, training and consulting company, said it is in the process of acquiring Belgium-based competitor Euro Consultants Group. The deal is expected to close this spring. 䡲 Rochester-based health care management organization MedNetOne Health Solutions and Novibased Sav-Mor Drug Stores announced a deal that aims to

Wayne State University School of Medicine rank nationally by patient reviews, according to the eighth annual Vitals Patients’ Choice Awards. WSU scored behind the University of Illinois at Chicago, Indiana University and Ohio State University.

$65 million

The finalized financing package for The Scott at Brush Park project in Detroit to create 199 apartments. The funding comes from Fifth Third Bank, the Detroit Neighborhoods Fund, the Detroit Investment Fund and others.

$400,000

The amount raised by the semipro Detroit City Football Club in a community financing campaign to fund renovations of its future home, Keyworth Stadium in Hamtramck. The soccer team met the minimum goal to begin work on the stadium.

connect primary care physicians with pharmacists. 䡲 Hundreds of jobs will go to Shelby Township as Flint-based hospital system McLaren Health Care centralizes billing and collections in one location. 䡲 Aerospace-defense private equity firm Admiralty Partners Inc. in California announced it is investing $3 million in Ann Arborbased Arotech Corp. 䡲 Detroit-based DTE Energy Co. filed a $344 million rate hike request with the Michigan Public Service Commission to upgrade its Southeast Michigan electric distribution system.

䡲 Saks Fifth Avenue Off 5th

opened its second Michigan location, in the Hunters Square Shopping Center in Farmington Hills. The other location is at Great Lakes Crossing Outlets in Auburn Hills.

䡲 U.S. Citizenship and Immigration Services awarded the Dearborn nonprofit Arab Community Center for Economic and Social Services $250,000 in grants to provide

citizenship services to area refugees and immigrants. 䡲 The Detroit Metro Convention & Visitors Bureau said it will collaborate with Travel Michigan and Washington, D.C.-based Brand USA to promote Detroit as a destination for events from the United Kingdom, Germany and China. 䡲 The Meadow Brook Music Festival in Rochester Hills has a new name: Meadow Brook Amphitheatre, announced by Auburn Hills-based Palace Sports & Entertainment, which operates the concert venue.

RUMBLINGS

OTHER NEWS 䡲 Darnell Earley will step down as state-appointed emergency manager of the embattled Detroit Public Schools at month’s end. Earley was also emergency manager of Flint during its controversial shift from Detroit regional water to the Flint River. Meanwhile, the state Senate Government Operations Committee held the first hearing on Gov. Rick Snyder’s plan to restructure the district. 䡲 Odis Jones, CEO of the Detroit Public Lighting Authority, resigned 20 months after his hiring amid a power struggle with Mayor Mike Duggan over authority management, said a source familiar with their relationship. 䡲 State Rep. Derek Miller, DWarren, resigned his post to be sworn in as Macomb County treasurer, replacing Ted Wahby, who died in December. Miller is a former county assistant prosecutor. 䡲 The Detroit Lions fired Sheldon White, vice president of pro personnel since 2009 and interim general manager since November. 䡲 Bill Brazier, executive director of the Society of St. Vincent de Paul of the Archdiocese of Detroit for 12 years, said he plans to retire. 䡲 The Detroit Police Athletic League said it reached its initial “Kids on the Corner” fundraising goal of $12 million, allowing the nonprofit to break ground in April on a multisport complex for Detroit children and new PAL headquarters at the site of the old Tiger Stadium. 䡲 The former Metropolitan Hotel in Romulus, shuttered since 2012, will reopen this summer as the Radisson Hotel Detroit Metro Airport, owned by Henderson, Nev.-based RKJ Hotel Management LLC. 䡲 The city of Detroit slashed property assessments for most homeowners, with cuts for about 95 percent of residential property owners to start next summer and range from 5 percent to 15 percent, Mayor Mike Duggan said. 䡲 Detroit’s 200 or so medical marijuana dispensaries can begin putting in bids to operate in the city on March 1, Corporate Counsel Melvin “Butch” Hollowell said at a Detroit City Council meeting. 䡲 Max Wicha, M.D, founder and director emeritus of the University of Michigan’s Comprehensive Cancer Center, received a $6.5 million grant from the National Cancer Institute to continue research into cancer stem cells. 䡲 Wayne County has slashed its retiree health care liability by 64 percent as part of a broader plan to stabilize county finances, Executive Warren Evans said. 䡲 Former Mumford High School Principal Kenyetta Wilbourn Snapp pleaded guilty for her role in an ongoing public corruption scandal and faces up to 46 months in federal prison. 䡲

COURTESY OF CRYSTAL CRUISES

Renderings show that some of the SS United States' superstructure would be modified along the lines of a modern cruise ship, but its general look, including its two massive funnels and elongated prow and after lines and colors, would remain the same.

Local auto supplier plays part to save historic ocean liner he historic ocean liner SS United States, rusting along a Philadelphia pier in the Delaware River for nearly 20 years, may sail again, thanks in part to a metro Detroit company’s fundraising efforts. In 2012, Livonia-based AlphaUSA helped launch a campaign for the nonprofit SS United States Conservancy in which donors bought ownership of the vessel, docked since 1997, for $1 a square inch. Los Angeles-based Crystal Cruises, owned by a Malaysian tourism conglomerate, last week announced at the Manhattan Cruise Terminal that it has signed a purchase option for the SS United States with the goal of returning the ship to oceangoing service out of New York City. It will conduct a nine-month feasibility study and cover maintenance costs and dock rental during that time. The renovation and modernization cost was estimated by Crystal Cruises CEO Edie Rodriguez at $700 million. The company would pay the makeover cost, which rivals the price of a new cruise ship.

Detroit, Flint to host presidential debates Michigan will play host to two presidential debates days ahead of the March 8 state primary. Republican candidates will debate issues in Detroit on March 3, and Democratic candidates Hillary Clinton and Bernie Sanders will face off in Flint on March 6. The two-hour GOP debate, presented by the Fox News Channel, will air at 9 p.m. across Fox’s various media platforms including Internet, TV and radio. The location of that debate has yet to be finalized, but the Fox Theatre is reportedly in the running. Megyn Kelly of Fox News will again be a moderator, leaving candidate Donald Trump’s attendance an unknown. Details on the Democratic Party debate have yet to be determined. The debates come only days after Super Tuesday, which will feature primaries or caucuses in 14 states, and less than a week before Michigan’s primary. The GOP and Democrats will hold 22 and 18 primaries and caucuses, respectively, ahead of the Michigan primary, which could cause several GOP candidates to drop out of the running or a single

candidate to run away with the nomination.

Oakland County shows it’s sweet on biz Oakland County Executive L. Brooks Patterson announced last

week the county government would send chocolate cars to the CEOs of 100 automakers and suppliers with locations in the county as Valentine’s Day gifts for their investment and employment. Getting the wheeled, edible valentines will be Chairman and CEO Mary Barra of General Motors Co. and CEO Sergio Marchionne of FCA US LLC. Also rating sweets are the top executives at Lear Corp. in Southfield; BorgWarner Inc. in Auburn Hills; Brose North America Inc. of Auburn Hills; Magna International Inc. of Aurora, Ontario; Valeo Inc., the French supplier with North American headquarters in Troy; and many others. The cars measure 8 inches long and slightly over 2 inches high. They were designed by an in-house county graphic designer and assembled by Birmingham Chocolate. Speaking of Valentine’s Day candy, recreation apparel and gear retailer Moosejaw is up to its zany promotions again. The Madison Heights-based company is spurning the “cutesy” candy hearts, with their endearing words and phrases for couples and would-be pairs, with its release of limited-edition “Moosejaw Bitter Heart” candies. Instead of “kiss me,” you’ll find “kiss this” on Moosejaw’s heart candy and other phrases like “Eww” and “Get a Job” to turn would-be Lotharios in another direction. Moosejaw is offering its Bitter Hearts free with any order on moosejaw.com or in its Moosejaw Shops while supplies last.

Crain’s editor wins women’s career award Jennette Smith, editor of Crain’s Detroit Business, is one of 20 women to be honored at the upcoming Career Mastered Awards, produced by HR consultant Linwick & Associates LLC as part of Women’s History Month. The event is March 14 at the Crowne Plaza Detroit Downtown Riverfront. A Living Legend award is going to U.S. Rep. Brenda Lawrence.

Details are at careermastered.com. 䡲

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GMRENCEN, NORTH LOBBY

KY AND BARB ARE reflecting A NEW DETROIT. COLLABORATORS. ORGANIZERS. STRONG DETROITERS. WE’VE ALL HEARD IT TAKES A VILLAGE. And, Eastside Community Network proves it. Ky Lindberg, ECN’S Resource Director, and board chair Barb Martin have seen ƓUVWKDQG KRZ D FRPPXQLW\ FDQ PDNH D EHWWHU IXWXUH (&1 ZRUNV ZLWK SDUWQHUV RQ Detroit’s Lower Eastside to drive change: rebuilding commercial corridors, supporting youth, engaging residents, and repurposing vacant land. For over 30 years, ECN has positively impacted more than 3,000 young people and put 700+ people to work. Detroiters, we’re stronger together! GMRENCEN is celebrating the spirit and vision RI WKH SHRSOH RI 'HWURLW /HDUQ PRUH DW UHŴHFWLQJGHWURLW FRP #REFLECTINGDETROIT