Crain's Detroit Business, April 11, 2016 issue

Page 1

Beauty on the inside

The wow and why of Fifth Third’s interior makeover at One Woodward, Page 21

APRIL 11-17, 2016

State’s credit unions lead push for commercial loans By Tom Henderson thenderson@crain.com

Bill Beardsley, Michigan Business Alliance

SEE LENDING, PAGE 25

SECOND STAGE

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The ABCs of delegating to grow: How Zoup’s Eric Ersher and other business owners learned to do it, Page 17 © Entire contents copyright 2016 by Crain Communications Inc. All rights reserved

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Communities, dominant employers strike a delicate balance By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

It’s easy to spot the influence Dow Chemi-

cal Co. has had on Midland.

The family name of the chemical company’s ancestors is inescapable around town, from the public library to a minor league baseball stadium. The homes of Dow founder Herbert H. Dow and his son, the architect Alden B. Dow, are national historic landmarks. The Dow family foundation has given hundreds of millions of dollars to organizations across the state since the 1930s. In many ways, Midland is a model company town, boasting economic and cultural offerings far beyond what might be expected from a city of about 42,000 people, all thanks to its dominant corporate resident. That position, though, could be at risk as the chemical company finalizes a $130 billion merger with Wilmington, Del.-based DuPont that will split off some of its businesses. When completed, Midland will still be

home to one of three companies to be spun off from the new DowDuPont, the companies said in a Securities and Exchange Commission filing in February. Though the company says it remains committed to Midland — as evidenced by a six-story, 150,000-square-foot building under construction at its corporate headquarters campus — the real impact of the merger remains largely unknown. Midland is not the first community to navigate these issues. Michigan is home to several such company towns, home to a Fortune 500 headquarters or dominant local employer. Think Kellogg Co. in Battle Creek or Whirlpool Corp. in Benton Harbor. Those companies and the jobs they bring help pay for homes, send kids to college and offer all the other benefits of economic engines. But as economies change and global trends influence how and where manufacturing occurs, municipalities everywhere have to consider strategies to retain SEE TOWNS, PAGE 26

Welcome to ... East Jordan: Manhole maker East Jordan Iron Works spread the name of its hometown far and wide before renaming itself EJ Group Inc. Relationships between communities and their signature businesses can get complicated. Read more about East Jordan, along with Battle Creek Creek, Benton Harbor and Greenville, in Michigan Business, starting on Page 9

Midland: At the entrance to the Dow Chemical Co. Founder’s Garden, a statue of founder Herbert H. Dow hints at the company’s importance to its hometown. The gardens are at the site of the company’s original headquarters along the Tittabawassee River near downtown. Delve into Midland’s story as an online extra, crainsdetroit. com LINDSAY VANHULLE

EJ GROUP INC.

JEFF JOHNSTON

“Michigan leads the country in the percentage of credit unions that do commercial lending.”

Kirk Albert was a banker with Cleveland-based KeyBank for 24 years, the past four years in Ann Arbor as president of the Michigan market. He is now a symbol of the national and state trend of credit unions sharply increasing their commercial lending, diversifying away from what had been a reliance on auto loans and home mortgages. Credit union officials say Michigan has been at the forefront of that movement. Michigan’s banking industry was particularly hard hit by the recession, with numerous community banks shut down by state and federal regulators. Some large regional banks were forced to find buyers. Banks that survived brought their commercial lending to a near halt, opening a door for credit unions. The Ann Arbor-based Michigan Business Alliance, which originates and manages business loans on behalf of large area credit unions, was to announce Monday that Albert has been hired as senior vice president in charge of commercial lending. Lesli Matukaitis is another symbol. A longtime commercial banker at Comerica Bank, she was recruited by Dearborn-based DFCU

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MICHIGAN

BRIEFS Forecasters nailed Flint, Grand Rapids ... 70 years ago

Researchers have concluded that the fortunes of two of Michigan’s largest cities are headed in opposite directions. Just another study forecasting the rise of Grand Rapids and the decline of Flint? No ... this one is from 1946. Seven decades later, the predictions of sociologist C. Wright Mills and economist Melville Ulmer are getting new notice from academics, noted a recent MLive.com report. They warned that Flint was overly dependent on its big employers, primarily General Motors, even though its workers made 37 percent more than the national average at the time, and concluded that cities like Grand Rapids — defined mainly by small business but offering more middle-class mobility — would have stronger economies and a higher quality of life despite their lower wages. That 29-page study, commissioned by a congressional subcommittee in the wake of World War II and which compared 37 indicators of civic well-being, has been dusted

off as Grand Rapids enjoys an economic resurgence and Flint struggles with the aftermath of GM’s divestment in its factories. Mills and Ulmer did not name Flint or Grand Rapids at the time, but their identity was revealed in later research, said Michael DeWilde, director of the Koeze Ethic Initiative at the Seidman College of Business at Grand Valley State University. “Coming out of the war, the question with all of these returning GIs, was: ‘What’s going to provide for a higher quality of civic well-being? These towns with one or two intensive big industries or this economic diversity that Grand Rapids had already established?’ ” DeWilde said. Mills and Ulmer, he said, “were pretty clear that a place like Grand Rapids would always have an advantage.” DeWilde, a Pontiac native who graduated from GVSU, said he did not dig up the old study to disparage Flint while promoting Grand Rapids. “Our intent is to better understand what the factors are that allow for long-term economic and civic prosperity, which of those factors may be unique to a given region and

which may be transferrable,” DeWilde wrote in a recent article in the Seidman Business Review.

Tax rules prompt Pfizer, Allergan to end merger Pfizer Inc. and Allergan plc agreed to end their $160 billion merger, terminating the largest-ever health care acquisition as officials in Washington, D.C., crack down on corporate inversions. The U.S. Treasury Department’s proposed new rules announced last week to deter inversions drove the decision, the companies said in a statement, Bloomberg and The Associated Press reported. Pfizer has 2,100 employees in Michigan, mostly in Kalamazoo County at its Portage manufacturing complex, according to the company’s website. Allergan, which is run from New Jersey but has a legal domicile in Dublin, last year agreed to merge with Pfizer in a deal that would have given the New Yorkbased company a foreign address and a lower tax rate. Pfizer said it will decide whether to pursue a potential split of the company by year’s end. The termination represents a victory for President Barack Obama, whose administration proposed tougher-than-expected new rules aimed at making inversions like the Pfizer-Allergan deal harder to achieve. In an inversion, a U.S. company shifts its tax address overseas, often through a merger. Ian Read, Pfizer’s CEO, has said the deal was

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needed because U.S.-based drugmakers are at a major disadvantage to their multinational rivals based in Europe and elsewhere.

MICH-CELLANEOUS Kalamazoo-based Stryker Corp.

has completed its acquisition of Redmond, Wash.-based defibrillator maker Physio-Control International Inc. and two other major deals, MLive.com reported. The $1.28 billion cash deal with Physio-Control, announced in mid-February, was completed last week. Earlier this month, Stryker announced it had completed a $2.78 billion buyout of Cary, Ill.-based medical company Sage Products LLC and completed its previously announced all-cash acquisition of Synergetics USA Inc.’s Neuro Portfolio. Synergetics is a Missouri-based medical device company. Despite a global economic slowdown and fears of overheating in major markets, stakeholders in West Michigan’s commercial real estate industry say current regional indicators continue to show signs of a healthy market, according to an MiBiz report. Brokers, developers and economists in the region insist the industry’s good fortunes can continue for the foreseeable future because of low interest rates and high interest of smaller, independent businesses looking for space. However, Paul Isely, associate dean of undergraduate programs in the Seidman

INSIDE THIS ISSUE

CALENDAR ........................................24 CLASSIFIED ADS..............................25 MARY KRAMER .................................. 9 OPINION .............................................. 6 OTHER VOICES ................................... 6 PEOPLE ..............................................24 RUMBLINGS ......................................30 WEEK ON THE WEB .........................30

COMPANY INDEX: SEE PAGE 29 College of Business at Grand Valley State University, said he is concerned about the local impact of a plateauing automotive industry and flat activity in commercial retail. The Michigan Department of Environmental Quality has rejected proposed changes to air pollution permit rules that could have limited the number of toxic chemicals regulated by the state, AP reported. The agency said “significant public concerns” were expressed during the comment period on the proposed changes. Work is moving forward on a new $25 million cancer center in Port Huron, the Times Herald of Port Huron reported. The first patient at the 20,500-square-foot Karmanos Cancer Institute at McLaren Port Huron is scheduled to be treated in July.

A $162 million hospital expansion started last year, with the cancer institute as the first phase. Next is a new 70-room patient tower.

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Businesses step up to give USS Detroit a Motown bon voyage

Galleria to get Friedman touch Real estate company adds to its turnaround portfolio

By Bill Shea bshea@crain.com

The local chapter of the nonprofit Navy League of the United States said it has raised about half of its $450,000 fundraising goal to pay for a weeklong series of receptions, luncheons and tours for the USS Detroit commissioning ceremony in September. The Navy League’s Metropolitan Detroit Council has raised about $200,000 from several corporations, including $25,000 each from Quicken Loans Inc., General Motors Co., Penske Corp., Masco Corp. and Bank of America, said John Peracchio, chairman of the USS Detroit commissioning committee. Other notable corporate donors include $15,000 from Meijer Inc., and $10,000 each from Comerica Bank and Honigman Miller Schwartz and Cohn LLP, according to a breakdown provided by the Navy League. Detroit-based Marketing Associates is providing in-kind support in the form of design and production of promotional media, and Plante & Moran is doing pro bono accounting and tax reporting support, Peracchio said. The corporate donations are being sought because federal law forbids the Navy to fund the public events before and after the commissioning ceremony, tentatively scheduled for Sept. 19 on the Detroit River outside of the Renaissance Center. Details about the ceremonies and donations — sponsorship levels range from $500 to $100,000 and each comes with a variety of perks — can be found at ussdetroitlcs7.com. “It’s difficult to get people excited and maintain that excitement over three years,” said Leslie Andrews, Quicken Loans’ director of community relations, who has been directly involved in the USS Detroit effort. The Dan Gilbert-owned online mortgage lender is the official volunteer commissioning company, and Quicken President and Chief Marketing Officer Jay Farner is the event’s honorary chairman. Corporations have begun to pledge cash, or increased their giving, over the past 90 SEE USS DETROIT, PAGE 28

Launched in 2014, the USS Detroit is expected to be commissioned in September before it joins the U.S. Pacific Fleet.

By Kirk Pinho kpinho@crain.com

David Friedman calls it “doing our thing.” Other local real estate experts use the words “extremely successful” when describing what his Friedman Integrated Real Estate Solutions LLC has done with underperforming suburban office properties in its management and leasing portfolio in the past several years. Now Friedman, president and CEO of the Farmington Hillsbased company, has a new challenge: filling up and renovating the Galleria Officentre, the 1 million-square-foot office complex in Southfield it received the man- David Friedman: agement and leasing contract for 15 million square feet under last month. It’s the latest in a string of management. down-on-their-luck properties his 29-year-old real estate company has tackled and subsequently repositioned (See story, Page 29), ranging from the massive North Troy Corporate Park and its 1.2 million square feet to Friedman’s 429,5000-square-foot portion of the Arboretum Office Park in Farmington Hills. “Turning around buildings, you have to make sure you’re spending the right money in the right SEE GALLERIA, PAGE 29

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FRIEDMAN INTEGRATED REAL ESTATE SOLUTIONS LLC

Galleria Officentre (above and right) offers 1 million square feet of office space in Southfield.

Lorient thinks local with new $250M investment pool

New firm aims at health care, other sectors

Managing partner Mark Mitchell (left) and partner David Berman are moving Lorient Capital LLC into downtown Birmingham.

By Tom Henderson thenderson@crain.com

Lorient Capital LLC, a new firm that acts as both a private equity investor to acquire established companies and as a venture capital investor in startups, plans to make a big local impact with its commitment of $250 million in capital. Remodeling is nearly done on its 2,700-square-foot, second-floor headquarters at 102 Pierce St. in downtown Birmingham, and it has begun investing, including $3.3 million for First Sense

“We want to help provide the bridge to get companies to the next level.” Mark Mitchell, Lorient Capital LLC

SEE LORIENT, PAGE 26 LOCKHEED MARTIN MISSION SYSTEMS AND TRAINING

TOM HENDERSON

MUST READS OF THE WEEK Counting down

Military preparedness

Lord & Taylor, meet R&D

Astronaut Mark Kelly among the

Michigan defense industry girds to get ahead

Rumblings: Ford to set up research

headliners at Fuel Detroit, Page 4

of potential base realignment, Page 7

space – at Fairlane Mall? Page 30

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Fuel Leadership: Ex-astronaut Kelly reflects on ‘controlled chaos and fun’

Intellectual Property | Litigation | Technology

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

I know you and your brother, Scott, who returned to Earth last month after a year in space, are going through a battery of tests to see what physiological changes happen after such a long period of weightlessness. How is that going?

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Martha Stewart, Pro Football Hall of Famer Michael Strahan and former astronaut Mark Kelly will headline the second annual Fuel Leadership event at the MotorCity Casino Sound Board on April 21. Other speakers include Marcus Buckingham, a New York Times best-selling author on employee productivity and best-management practices; Jacques Panis, president of Shinola/Detroit LLC; and James Craig, Detroit’s chief of police. General admission is $495, with VIP tickets at $895. More details are at fuelleadership.com. The first Fuel event was at the Sound Board last April. A second Fuel event was in September in Cleveland. A three-day Fuel event is scheduled for Feb. 8-10 at the Wynn in Las Vegas. In December, Dave Zilko, who was co-chairman of Ferndale-based Garden Fresh Gourmet last June when it was sold to a division of Campbell Soup Co., was named CEO of Fuel Leadership after leading an investment of $2 million in the company. Crain’s reporter Tom Henderson talked to Kelly last week about his career, what’s he’s up to, and his upcoming appearance in Detroit.

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They’re ongoing. We’re doing 10 pretty extensive research studies with the University of Pennsylvania, Harvard, Cornell, Johns Hopkins, Purdue, Stanford and a few others. They’re looking at the molecular changes that happen in space. I’m the control subject. That we’re identical twins gave them a basis for the research. They haven’t told us any results yet. They’re still gathering data. We expect to start seeing some results and papers in six months to a year. I’ve given them a lot of blood, urine and ultrasounds over the last two years. I hear they’re coming to me for a spinal tap next. I told my brother, if I have to, I will.

wouldn’t have been able to put in the training it would have taken to go for a year. How is your wife doing?

She’s doing OK. She works hard. She’s doing well. After she was shot, you two founded Americans for Responsible Solutions to lobby elected officials for stronger gun laws. And yet, five years later, we continue to see mass shootings here in the U.S. How discouraging is that?

On the federal level, we don’t see a lot of progress, but on the state level we do. Governors and lots of state legislators realize laws matter. In states with strong gun laws, there are fewer deaths from gun violence, and not by a little bit. By a lot. At one end of the spectrum, Massachusetts has less than four gun deaths per 100,000 population. At the other end, Louisiana has 19. Clearly, we can do something about this. Congress doesn’t do anything because of powerful corporate interests, despite what the majority of people want.

Having spent that much time in space, were you happy it wasn’t you who was going to be up there for a year, or did you wish it was you?

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I had mixed feelings. I certainly would have liked to have lived in space for an extended period. It’s controlled chaos and fun. But after my wife (former U.S. Rep. Gabrielle Giffords) got shot in 2011, I made the decision to leave NASA. I

I’ll tell a bunch of stories. They’ll range from what I learned about communicating when I was flying in combat. And of decision-making in handling the crisis of my wife’s near assassination. And of managing risk on the Space Shuttle. I’ll speak for about an hour. I know you wrote a New York Times best-selling book and you’re doing speeches. What else are you up to?

I started a company with some partners called World View Enterprises. We’re an aerospace company in Tucson, Ariz. We use high-altitude balloons to take people into space for a day. Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

Was wanting to be an astronaut just the logical last step in a career as a fighter pilot, or was it something you wanted to do since you were a little kid and one night looked up at the sky and were smitten?

A little of both. I wanted to be an astronaut when I was a little kid. And I wanted to be the first guy on the moon when I was in high school. But as a Navy fighter pilot and test pilot, being an astronaut was the next logical step.

Mark Kelly

EXPANDING:

How many trips to space did you take, and for how long?

I made four trips for a total of 54 days. My last trip was 16 days.

Without giving away too much, what is the takeaway or overarching theme of your talk in Detroit?

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OPINION Company towns can learn from past D

iversification. We’ve been hearing that word for years. Locally, it was a big strategy emphasis for a lot of companies — and communities — when the state was at the low point of the most recent economic downturn. Relying too much on OEM automotive business, for example, was a dangerous position for suppliers and vendors. On the other hand, sometimes that big client, employer or civic contributor rebounds and is ready and able to reinvest when the good times re-emerge. As documented on our Page 1 and Crain’s Michigan Business section company towns report, each community and each company town is a little different. These days in Michigan, economic development work must walk a nuanced tightrope that involves global economic trends, manufacturing innovations, labor market and pricing dynamics, and even quality-of-life issues. Sometimes, as big companies evolve and shift their product focus or manufacturing methods, communities need to adjust, too. Take the company town of Battle Creek and big employer Kellogg Co. In the golden age of cereal consumption, Kellogg needed armies of food processing employees right in Battle Creek, and top company executives mostly lived in the city as well. These days, there is more automation, cheaper labor forces are found elsewhere — and there is a very real issue of talent retention for top executives. Those are some reasons Kellogg now has a regional center in the Grand Rapids area and many company execs live elsewhere as well, such as nearby Kalamazoo. Battle Creek is working on a business attraction strategy involving lots of other industries — from food to aviation, automotive and logistics. Just as Snap, Crackle and Pop can be part of a balanced meal, keeping a healthy balance between problem-solving to hold on to what you have and making some noise about future possibilities is the name of the game for Battle Creek and a long list of other Michigan communities. The good news is that we’re wiser from all the company-town case studies in Michigan — and can point to real examples of successful diversification.

FRANCES THORNTON COLLECTION

Workers at the Kellogg Co. plant in Battle Creek in the 1920s.

Immigrant talent pool can fill the needs of metro Detroit employers T

alk to economic developers or business leaders and they will tell you the economic future is tied to talent. The race for highly skilled workers is more competitive than ever. This past week, five days after opening the application process, the federal government closed the window for U.S. employers to file H-1B visas for workers who could fill unmet talent needs. This is the 14th year in a row that the supply of H-1B visas has been exhausted, with 233,000 applications filed for 85,000 spots in 2015. This issue significantly hurts metro Detroit’s economy. According to a 2015 Brookings Institution report, metro Detroit ranked eighth in the nation in H-1B approvals — more than Seattle, Boston, the Research Triangle, Houston, Philadelphia or Atlanta — and ninth in the nation in the density of H-1B workers with more than twice the national average. The 12,000 H-1B visas awarded to Michigan companies between 2010 and 2013 will create 22,000 new Michigan jobs for U.S.-born workers by 2020, while the reject-

OTHER VOICES Steve Tobocman

Tobocman is executive director of Global Detroit and former Michigan Democratic House representative for the 12th District. ed H-1B applications from metro Detroit in 2007 and 2008 are estimated to have cost our region as many as 15,000 jobs and $135.9 million in additional earnings. Despite these challenges, metro Detroit benefits from significant innovations that help employers use global talent. Global Detroit, a nationally recognized leader in immigrant talent integration, has worked with partners in the business community, state and local government, and the nonprofit sector to build competitive regional advantages in job creation and

business growth. Global Detroit oversees the Michigan Global Talent Retention Initiative, the nation’s first international student retention program. When 70.3 percent of all the graduate students in electrical engineering in America (and 63.2 percent in computer science) are international, it makes perfect sense to connect this talent pool to local employers. A second successful strategy has been to better connect college-educated immigrants who are underemployed, working outside of their professional careers — the proverbial engineer driving a tax cab. The Michigan Department of Licensing and Regulatory Affairs is a national leader in integrating highly skilled immigrant and refugee talent. While Congress is caught in gridlock, Michigan employers benefit from the nation’s first international student retention program and one of the nation’s leading state highly skilled immigrant integration efforts, giving them tremendous access to global talent, a significant competitive advantage.

Small business needs genuine relief from health insurance premiums W

hen it comes to providing access to affordable care, our health care system creates two outcomes that really work at cross purposes. People in need can access emergency care even when they can’t pay for it, but the cost of that uncompensated care gets passed along unfairly to those who can pay — like OTHER VOICES small-business owners. They Rob Fowler have felt the very real burden of Fowler is president and CEO of the Small this cost shifting and suffer by having to pay inflated base rates Business Association of Michigan. for health insurance. The Small Business Association coverage gap. Incentivizing resiof Michigan has supported Michi- dents to avoid emergency room gan’s Medicaid expansion since visits should help ease the costs the beginning. that get baked into We want it to be “We need to insurance rates. successful beWe like Healthy protect the health Michigan cause we know in part the Healthy of Michigan’s because it encourMichigan Plan most vulnerable ages accountability makes good by requiring gradual progress toward business sense. citizens, and its It has already small businesses.” buying private insurance or paying covered more higher copays and than 1.7 million contributing more primary care Rob Fowler to health savings visits, translating to savings for hospitals and in- accounts. We strongly support surance companies by closing the people becoming personally in-

vested in their health. But it’s time for the impact of Healthy Michigan to be felt by more than just hospitals and insurance companies. We need to move into a phase where small businesses see genuine health insurance premium relief. We believe it’s a poor business model to take a growing cost burden of people who come to the health care system without compensation and shift that cost to a smaller group of people — small-business owners — who struggle to afford to pay for health insurance. Healthy Michigan can reduce that piling-on effect, but only if hospitals and insurance companies are held accountable, too. The additional reimbursements that accrue to hospitals need to be reflected in price negotiations with insurance companies, who in turn have a responsibility to pass along cost savings to their small-business customers. We need to protect the health of Michigan’s most vulnerable citizens, and its small businesses. Healthy Michigan lets us do both.

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State awaits analysts’ report to fortify push for defense funding By Chad Halcom chalcom@crain.com

Michigan has been at turns a winner and a loser when the U.S. Department of Defense starts talking about “realignment” — which typically means base closings. But this time around, state officials are angling for a more active role in shaping its own defense destiny. The stakes are high. Officials believe the state receives more than $8 billion of annual military spending on various base operations, production and service contracts, personnel, veterans support services and other operations. The Michigan Defense Center, an agency of the Michigan Economic Development Corp., hopes to keep it that way or even expand the defense economy. The agency, formed in 2006 to help address proposed military cuts in the state under the last federal Base Realignment and Closure process a decade ago, should receive a new report within weeks from Colorado-based Matrix Design Group, providing economic analysis of the state’s various bases, contractors and other assets. The state entered a consulting contract with Matrix for more than $400,000 last year, under its new “Protect and Grow” defense industry initiative. The goal, Matrix and state officials say, is to be ready to pitch Michigan’s merits should the Pentagon convene another BRAC or similar restructuring proposal as expected next year. “Since the last BRAC round (in 2005), there has been a further decline in personnel and weapons systems. There is no debate that the Air Force has more than 30 percent in excess infrastructure for its current size, and the Army has something in the low 20s of excess,” said Sal Nodjomian, executive vice president at Matrix Design and program manager for the Michigan study. “It stands to reason that you can’t afford to keep everything you have open, so there is a lot of pressure to make base operations dollars stretch further.” The last federal Base Realignment and Closure Commission law, enacted in 2005, led to about $75 million in new construction and a transfer of 1,200 positions to the U.S.

ington until after the election is over, Nodjomian and MDC Executive Director Sean Carlson both said. But whether it’s a BRAC or something less formal, consolidation talks are coming and Michigan wants to court new defense assets, as well as keep what it has. The National Defense Authorization Act, signed into law last November, called on Defense Secretary Ashton Carter to complete a “comprehensive review (of) management and operational headquarters ... for purposes of consolidating and streamlining,” and to find at least $10 billion in savings

from streamlining various commands and headquarters by 2019. An earlier version of the bill called for the various armed services to find areas of excess capacity for possible right-sizing, but Congress backed off from those provisions before signing the bill. Still, experts said, that is not a typical provision in the annual NDAA bill, and signifies something. “There’s strong belief from experts on the hill, that something is going be put into play (next year),” Carlson said. “And what we can’t do is wait for a proposal to come and then react to it. Because

there’s a lot of onerous things that can still happen even without something as formal as a BRAC.” With that in mind, state officials hope the Matrix analysis will help form a strategy not only for holding onto Army and Air National Guard bases in the state, but also exploring what military commands and functions might be a good fit with the state’s industries and workforce. About 67 of Michigan’s 83 counties are a place of business under at least one military contract, Carlson said, although the number fluctuates. Military installations also support additional private sector jobs

through on-base services and vendor contracts. Bruce Legge, director of defense programs for Troy-based Automation Alley, said he has been serving as an adviser to the Protect and Grow initiative and also believes talk of military streamlining is coming in the next year or two, and Automation Alley is working with the Defense Center to support making a business case for retaining and expanding military assets. “We’re here to support whatever form that strategy takes,” he said. Chad Halcom: (313) 446-6796 Twitter: @ChadHalcom

PEACE OF M ND

Army Tacom Life Cycle Management Command in Warren from Rock Is-

land, Ill. But the commission also called for shuttering an Army support garrison at Selfridge Air National Guard Base in Harrison Township and transferring some personnel to Tacom, as well as moving some A-10 aircraft and support crew from W.K. Kellogg Air Guard Station in Calhoun County to Selfridge. Statewide, the commission’s final recommendations called for a net gain of 125 jobs, but past BRAC recommendations have led to closing Wurtsmith Air Force Base in Iosco County and K.I. Sawyer Air Force Base near Marquette. The new consolidation conversation likely won’t start in Wash-

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SPECIAL REPORT:

MARY KRAMER mkramer@crain.com Twitter: @MKramerCrain

Time for another look at women business leaders In July, Patti Poppe will become president and CEO of Jackson-based Consumers Energy. Last December, Joan Budden was named CEO of Grand Rapids-based Priority Health. In 2013, Jayne Homco was named president of the Michigan division of Kroger, and is leading the charge on investments approaching $200 million statewide. Last November, Suzanne Shank of Detroit became chairman and CEO of Siebert Brandford Shank & Co., the largest minority-owned municipal finance firm in the country. And Mary Barra has been leading General Motors Co. since January 2014 as CEO and added the role of chairman in January of this year. Women are leading organizations large and small throughout the state, and on June 6, Crain’s Detroit Business will publish a roster of the 100 leading women — those with the greatest influence and power in their industries, communities or companies. It’s our first such list since 2007, and plenty of faces have changed since then. Our first list of 100 was assembled in 1997. I remember some snarky remarks: “Can you even find 100?” We could. And we followed that list with two more, about five years apart. It’s clearly time to take another look. Inforum and its Center for Leadership have studied diversity at Michigan’s top public companies since 2003. Last year’s report, with research conducted by the Mike Ilitch School of Business at Wayne State University, showed when it comes to the C-suite, the percentage of positions held by women remained exactly the same between the reports in 2013 and 2015 — 13 percent, or 79 out of 604 positions. Yet clearly women are at the top of two of Michigan’s largest companies — GM and CMS Energy — as well as major divisions of large public companies and some privately held firms. So let’s put a spotlight on them. This year, we’re going statewide in our search for top women. And some women named to previous lists will be enshrined as “pacesetters” — which makes more room for new names — including the women mentioned at the start of this column. As our editors and reporters dig through their research, we want to be sure we’re not missing an obvious choice. If you’d like to nominate a woman leading a major company or who plays a major role in civic or philanthropic life in your community, submit her name, title, contact information and a brief description of accomplishments to Editor Jennette Smith at jhsmith@crain.com. But you’d better hurry. The slots on the list are filling up.

MICHIGAN BUSINESS

Iron works changes name, not commitment East Jordan has been stamped around the globe By Tom Henderson thenderson@crain.com

East Jordan Iron Works, named for a village on Lake Charlevoix and known for its signature manhole covers that dot the globe, has outgrown its name but not its hometown. The company was founded in 1883 by William Malpass and his fatherin-law, Richard Round, to make castings for machine parts, ships, agriculture and railroads, with a focus on companies involved in the lumber boom. The company still runs two 10-hour shifts a day at its foundry on the eastern shore of the lake, in the heart of the small city. The foundry melts 40-50 tons of iron an hour to reshape into finished products, most of it recycled, some of that scrap hauled daily from auto plants in

Company towns Towns known for their signature companies see benefits and pitfalls: Battle Creek: Cereal City shifts as production moves, Page 10 Benton Harbor: Whirlpool stands amid wealth, racial divides, Page 12 Greenville: Picking up pieces after Electrolux’s departure, Page 14 Midland: Model company town deals with uncertainty, crainsdetroit.com

Southeast Michigan. For decades, the company grew organically. In 1968, it began a series of acquisitions of castings and foundry companies around the U.S. In 2000, it began expanding worldwide, with the acquisition of a foundry in Birr, Ireland, followed in 2004 by the acquisition of a foundry in Paris and later by acquisitions in Canada, Australia, England, Germany and Belgium. Today, after two dozen acquisitions, the company supplies infrastructure projects in 150 countries across five continents,

with 50 sales offices, 10 manufacturing plants — including a state-of-the art foundry and distribution center it built in Ardmore, Okla., in 2001 — and R&D centers in East Jordan and St. Crepin, France. The company designs, makes and distributes iron, steel and aluminum covers and grates for water, sewer, drainage, telecommunications and utility networks. It also makes valves, valve boxes and meter boxes. In the post-9/11 climate in the U.S., buy-American poli-

cies enforced at some companies and municipalities got in the way of East Jordan Iron Works. As Tom Teske, vice president and general manager of the company’s Americas business unit, told Crain’s in 2011: “We'll have people say, ‘What are those Jordanians doing here?’ ” So, on Jan. 6, 2012, after much internal and occasionally heated family debate — and to the dismay of some townspeople — the company changed its name to EJ Group Inc. But that's getting ahead of the full family, and small-town, story.

Five generations of Malpasses Soon after the company's founding, Malpass summoned his brother James, a journeyman machinist in England, to join him. As the lumbering era wound down at the turn of the century, the company expanded into castings for water-works valves, fire hydrants and what would soon become its ubiquitous sewer grates and SEE TOWNS, PAGE 10

Below: Tom Teske (left) and Andrew Malpass are vice presidents at EJ Group Inc.

Left: East Jordan Iron Works was already 40 years old in 1923. Co-founder William Malpass is at top right. EJ GROUP

INC.

TOM HENDERSON

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manhole covers. In the 1920s and ’30s, William Malpass transferred management to his three sons, William Henry Malpass, Dick Malpass and Ted Malpass. In the 1950s and ’60s, the third generation of leadership emerged, with William's son, Bill, and Ted's son, F. Bruce, taking over. Since the mid-1980s, the business has been led by the fourth generation — Frederick, Bill’s son, is chairman; and Tracy, the son of F. Bruce Malpass, is president and CEO. And five members of the fifth generation are at the company, including Andrew Malpass, vice president of product strategy and sourcing for the Americas. “We’ll always think of it as a family business,� he said. One with a very visible presence around the world. When New York City wanted to install fancy new manhole covers to honor the millennium, it hired East Jordan Iron Works. When Charles de Gaulle Airport in France and Lisbon Portela Airport in Portugal needed new manhole covers, they called the company in the small Michigan town. You can look down and see its grates and manhole covers in a village in the forested nowhere of Alaska, in beach towns in Hawaii, in Mayan villages in Central America, and in big cities and small towns in Afghanistan and Iraq. Given its global presence, has the Malpass family ever thought of moving the headquarters to a more traditional place for a company with well in excess of $100 million in revenue? When asked, Andrew Malpass screwed up his face as if he’d eaten a pickle long gone bad. “We grew up here. All of our families live in East Jordan. We’re committed here,� he said. The commitment is more than psychological, and more than offering a lot of high-paying jobs, too. In the past 30 years, the Malpass Foundation has paid for a combination EMS and fire station, the police station, the high school football field and track, and the local public pool. Tom Cannon is the city administrator in East Jordan. “In my 12 years here, I can’t tell you how many things the family has done for the community, how generous they’ve been,� he said. “But for all they do and all the people they employ, they don’t throw their weight around. ... “You see the Malpasses at high school basketball games and at church and at restaurants. They’re just a regular part of the community,� he said. Of course, Cannon might be prejudiced — he plays on a basketball team in an over-35 league with Andrew and his brother, James. Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

BATTLE CREEK

Changing tastes, economy strain link between Kellogg and its hometown By Dustin Walsh dwalsh@crain.com

On June 13, thousands will descend on downtown for the Battle Creek Cereal Festival, home of the World’s Longest Breakfast Table. The tradition put on by the 110-year-old Kellogg Co., which gave Battle Creek its “Cereal City� nickname, has occurred on and off for more than 50 years. Children and adults alike will pour cold milk over tiny bowls of cereal. But fewer breakfast eaters around the globe pick up boxes of Kellogg’s cereal at the market, and fewer locals are employed at the hometown Fortune 500 company. The result is common in small cities across the U.S. — a company sweet on local workers turned salty as economics changed. The city’s per-capita income is 13 percent lower than the state average, and 21.8 percent of city residents live in poverty. Globalization, changing diets and a culture clash between Kellogg and the depressed city have strained the symbiotic relationship between a municipality that needs its once-largest corporate resident and a publicly traded enterprise that needs profits. For more than a decade, the cereal business has declined as more people reach for granola bars, yogurt and other “on-the-go� or high-protein options. U.S. cereal sales declined 19 percent between 2005 and 2015, according to market analysis firm Euromonitor. Consumers bought an average of 12.3 pounds of cereal in 2005, dropping to just 9.9 pounds by 2015 — or just under 11 boxes per consumer per year. Cereal makers are projected to lose another $1 billion in U.S. sales in the next five years, according to Euromonitor. Kellogg reported net income of $1.3 billion in 2015 on revenue of $13.5 billion, but cereal sales continue to slide, down to $5.9 billion last year from $6.6 billion in 2014. But that hit Battle Creek far before the trends hit the papers. Kellogg employs only about 385 Bakery, Confectionery, Tobacco Workers and Grain Millers International Union Local

3G workers at its Battle Creek plant, down from 2,150 in 1990 and 3,455 in 1970. “From a business standpoint, automation took away a lot of these jobs, but we’ve seen the company make decisions that impact (the workforce) in major ways,� said Trevor Bidelman, presSEE NEXT PAGE

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ident of the union. “We’ve become a culture indulged on return on investment, and that’s caused jobs to leave Battle Creek.” The remaining union jobs at Kellogg in Battle Creek pay $30 to $31 per hour, Bidelman said. Kellogg employs just over 2,000 in Battle Creek, most at its global headquarters downtown and its R&D center. In 1999, Kellogg shuttered much of its hometown cereal plant under then-CEO Carlos Gutierrez, shipping much of the work to a plant in Mexico to save money. Battle Creek’s unemployment rate, which historically rests below the national average, spiked following the partial closing of its Battle Creek plant. Unemployment was 3.9 percent in November 1999 but climbed to 7.5 percent in June 2003, years ahead of the Great Recession. John Bryant, Kellogg CEO, said in a statement to Crain’s that the company is committed to the city, even during times of contraction. “For Kellogg, being a good corporate citizen means investing in our community as well as building a business that delivers sustainable growth for the long term,” Bryant, said. “Since 2000, we’ve invested more than $54 million in the expansion of the W.K. Kellogg

From a 1913 postcard to its downtown global headquarters, Kellogg Co. has been identified with Battle Creek.

N COLLECTION FRANCES THORNTO

COURTESY OF KELLOGG CO.

Institute for Food and Nutrition Research, our R&D center, and have

contributed more than $50 million to local charities and economic development projects.” In 2015, Kellogg and the W.K. Kellogg Foundation, created a community development initiative, called BC Vision, to diversify Battle Creek’s economy, create new jobs and improve education. The BC Vision steering committee held its first

public meeting on March 24 and said it was on track to reach one goal of creating 1,000 new jobs in the community, the Battle Creek Enquirer reported. The foundation, established by Kellogg founder W.K. Kellogg in 1930, is Michigan’s largest nonprofit foundation with $7.3 billion in assets. Bryant said Kellogg is leading BC Vision’s large business task force “to develop an economic

plan that builds on the core competencies of Battle Creek — including food and agriculture, aviation, national defense, logistics and manufacturing — to attract a variety of industries.” Kellogg itself, however, is in the middle of another contraction, under a program announced in 2013 called “Project K,” which is expected to reduce its global workforce by 7 percent. Under that program, Kellogg opened a regional service center in Cascade Township, near Grand Rapids, in 2014. The plan, which called for the creation of up to 600 jobs, resulted in the loss of up to 200 jobs in Battle Creek. Bryant, in a statement to Crain’s, said the move was necessary to find talent. “Together with an independent consultant experienced in creating successful service centers for global companies, we conducted an in-depth suitability study of nine potential locations — including Battle Creek — based on a number of factors,” Bryant told Crain’s. “A particularly critical factor in the sustained success of global business service center operations is locating them where there’s a mature service center infrastructure already in place, with a sustainable pool of talent. It is not something that can be created quickly if it does not already exist.

Keeping jobs in our home state of Michigan was also a critical factor, so Grand Rapids rose to the top.” But the move came as a surprise to Battle Creek, former Mayor Joe Schwarz told the Battle Creek Enquirer after the announcement. “This was a unilateral action by the Kellogg Company — blindside, if you will,” Schwarz told the Enquirer. Mike McCullough, executive director and managing editor of the Battle Creek Enquirer, said the move is representative of a company not in touch with its community. “When I think of a company town, I think of a sense of pride and identity; I don’t see any of that,” McCullough said. “(Moving jobs to Grand Rapids) is just a reminder how precarious the world is now.” McCullough, who arrived in Battle Creek in 1998, said the city’s troubles stem from far more than job losses at Kellogg. “What made Battle Creek a company town, the connection and the investing in the local community, I don’t see anymore. I don’t think a top executive even lives in (metro) Battle Creek anymore, and there are simply fewer ties to the city itself,” McCullough said. The last C-suite executive to live in Battle Creek was Gutierrez, McCullough said. SEE NEXT PAGE

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“There was a time that Kellogg’s executives were expected to live in Battle Creek, that doesn’t exist anymore; and Kalamazoo isn’t Manhattan, but it offers more amenities and diversity,” McCullough said. “Beyond a United Way payroll deduction, I don’t see executive involvement in the city, and we’re not creating an upper-middle class here.” Yet Battle Creek’s unemployment rate, 4.4 percent in February, remains below the state average of 4.8 percent largely due to expansion of auto parts suppliers in the city’s Fort Custer Industrial Park — created in

the 1970s to diversify the workforce from cereal production.

Denso Manufacturing Michigan Inc., a subsidiary of Denso Corp., is

now the city’s largest employer at more than 2,907 at its operations in the Fort. It opened in 1986 as Nippondenso Manufacturing U.S.A. Inc. with just 325 employees and never planned to expand beyond 1,000 employees, said Karen Boyer, vice president of general administration at Denso Manufacturing Michigan. “We came to Battle Creek to support our primary customers, the Japanese automakers, but eventually branched out and we’re

now supporting every major automaker,” Boyer said. Yet the boom of the auto industry hasn’t boosted wages. Basic production workers at the nonunion plants earn between $13 per hour and $17 per hour, according to Denso's online jobs portal. “What we’ve seen is good-paying jobs go out the door for jobs that pay $15 or $17 an hour,” Bidelman said. “Yes, we’ve got jobs, and that’s maybe living wage, but barely.” Nevertheless, the auto industry continues to expand in the city and is becoming ever-more-involved in its operations. Denso, for example, is working with the city to expand services as

employment at the Fort grows, Boyer said. Denso operates a third shift and is seeking to have the city buses run during the night, as well as daycare options, Boyer said. The W.K. Kellogg Foundation is assisting, Boyer said. Despite the auto industry’s employment of thousands more than Kellogg or Post in Battle Creek, the city still retains the moniker of “Cereal City.” “When I travel and tell people where I live, they always say, ‘Oh, where Kellogg’s cereal is made,’” Boyer said. “But it’s not just Tony the Tiger anymore.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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BENTON HARBOR

Whirlpool seeks socioeconomic balance in its two SW Michigan homes By Dustin Walsh dwalsh@crain.com

The St. Joseph River divides Benton Harbor and St. Joseph. A natural, free-flowing impediment between the haves and the have-nots. Rich and poor. White and black. Existing on both sides of the divide is Whirlpool Corp. The Benton Township-based appliance manufacturer, the largest in the U.S., faces tough decisions and tougher expectations as it participates in its own brand of socioeconomic engineering to buoy the region it calls home. Benton Harbor is the poorest city in Michigan — per-capita income is just $10,059, compared with the state average of $25,135 — and is in stark contrast with Whirlpool, which opened a new $68 million campus downtown. Whirlpool reported net income of $783 million on revenue of $20.9 billion in 2015. Whirlpool also operates a technology center in St. Joseph — a city that’s 89 percent white with a per-capita income of $37,777 — and one in Benton Harbor, which is 89 percent black with upward of 50 percent of its residents living in poverty. After globalization claimed much of the manufacturing might in the region — Whirlpool closed nearly all of its manufacturing plants in the Benton Harbor area in the 1980s — the economic vibrancy of the region plummeted. Whirlpool’s white-collar workers stayed in St. Joseph and its former manufacturing workers stayed in Benton Harbor. It closed its last Benton Harbor plant in 2011, eliminating 216 jobs. “When we’ve seen a spotlight on Benton Harbor and the socioeconomic challenges that created tension, they say Whirlpool should just fix it. We can’t just fix everything, but we haven’t shied away from the tension, and it has actually brought the community together and made it easier to get things accomplished,” said Jeff Noel, vice president of communications and public relations at Whirlpool. Noel said if the company chose to maintain factories without considering global economic realities, it would have hurt the community more. He pointed to Newton, Iowa, and Maytag Corp. Whirlpool acquired Maytag in 2006 for $1.7 billion and closed Maytag’s Iowa headquarters and plant operations throughout the region and the southern U.S., consolidating them into Whirlpool’s, including in Benton Harbor. “Maytag hadn’t been aggressive in going global, and we bought SEE NEXT PAGE

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Whirlpool’s $68 million Riverview Campus opened in Benton Harbor in 2012. FROM PREVIOUS PAGE

them ... ,� Noel said. “That’s just one example of a small community that’s been more adversely impacted because the company didn’t do the things it needed to grow. So, now, we employ more in Benton Harbor than we ever have.� Whirlpool opened its $68 million Riverview Campus in Benton Harbor in 2012. It houses sales, finance and supply chain teams. However, the lack of manufacturing in the city still stings its former blue-collar workforce, said Benton Harbor Mayor Marcus Muhammad. “In a utopia, Whirlpool would open a manufacturing plant in the city ... where they had 1,200 or 1,000 assembly line jobs that would impact the day-to-day economy. ...,� said Muhammad. “In reality, Whirlpool is the Moby Dick, the white whale in this community, so there can be unrealistic expectations for the company to do everything. My administration would like to strike a balance.� The complex relationship between Benton Harbor and Whirlpool became even more muddied in 2010, when Gov. Jennifer Granholm declared a financial emergency in the city and put its operations under state control. Joe Harris, former CFO for the city of Detroit, was named Benton Harbor’s emergency manager before being replaced by Tony Saunders, now chief restructuring officer for Wayne County, in 2013. Saunders and the state relinquished control back to the city in March 2014. Saunders did not return phone calls to discuss Benton Harbor. The appointment of an emergency manager coincided with Whirlpool’s plans to reinvest in the region by consolidating operations into three campuses, including building its Riverview Campus. The project received a 12-year, $3.8 million tax abatement from city commissioners only months after the arrival of the emergency manager in 2010. In return, Whirlpool offered a voluntary $3.8 million donation toward city services, such as public safety, Benton Harbor’s Herald-Palladium reported. However, emergency manager Harris rerouted the funds from Whirlpool to shore up the Benton Harbor Police Department’s pension fund, Muhammad said. Whirlpool’s Riverview Campus won’t pay city property taxes until 2024. “If (Whirlpool) were paying taxes on all of their properties, that would feed the general fund and make the city itself more financially

stable with more tax revenue to provide better city services,� Muhammad said. Harris also sold Benton Harbor’s water lines that ran to Whirlpool’s headquarters in Benton Township for $675,000, canceling an eight-year water contract between the city of Benton Harbor and Whirlpool. Whirlpool paid for the installation of the water lines in 1967 and donated the line to the city of Benton Harbor, The Herald-Palladium reported. But Muhammad believes vacating that contract hurt the city’s long-term viability. “These kinds of moves hurt the city,� Muhammad said. “Now Benton Township enjoys the contract we once had on (Whirlpool’s) administrative building.� Outside of the consolidation into three campuses, Whirlpool, through its Whirlpool Foundation along with several other nonprofits, funded a $500 million resort development, which included high-end housing

and a public 18-hole Jack Nicklaus-designed golf course, on land on the north side of Benton Harbor once inhabited by factories. The project, called Harbor Shores, was designed to bring “social change to Benton Harbor,� according to promotional videos for the project. “The intermingling that shifts a culture, makes it more upwardly mobile and creates more striving-type sensibilities naturally occurs when you bring people of different races and classes together,� Marcus Robinson, then-president of the Consortium for Community Development nonprofit that helped lead the effort, told The New York Times Magazine in 2011. Median home prices have increased in Benton Harbor from $67,500 in April 2011 to $101,000 in March, according to real estate site Trulia Inc. — though much of that could be linked to the high-end, often $800,000-plus homes at the Harbor Shores development. Noel said the project was designed to be sensitive to the blight of the surrounding community. “Many urban redevelopment projects are seen as displacing poorer residents because new development does create change,� Noel said. “The Harbor Shores project is as well designed a process to avoid gentrification as is possible.� Whirlpool continues its own brand of socioeconomic engineering by creating diversity within the community of its predominantly

white-collar workforce. Whirlpool employs roughly 4,000 in the Benton Harbor region, Noel said, 2,000 of whom have advanced degrees. Whirlpool established a lesbian, gay, bisexual and transgender network and has achieved a perfect score for the past 13 years from the Human Rights Campaign’s U.S. Corporate Equality Index — which measures how well corporations treat LGBT employees. “Our workforce has to reflect

our customer base, and we’ve made a commitment to those values,� Noel said. Muhammad said the community is at an advantage to have the multinational corporation within its borders, even if tension still exists. “There’s definitely mixed feelings, but people in the community have gone to college on Whirlpool checks. ... That’s a lot of good that’s gone around,� Muhammad said.

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GREENVILLE

City sweeps past Electrolux with focus on regional economic development, skilled trades By Lindsay VanHulle

Crain's Detroit Business/Bridge Magazine

Kathy Jo VanderLaan steered her white convertible around a curve. A grassy lot appeared on the right, behind a chain-link fence. “That’s the Electrolux field,� VanderLaan said, gesturing out the passenger-side window at the spot where a refrigerator factory once stood in Greenville. For a decade, that empty lot has been used to paint Greenville as an example of a failed American company town, a place with so many jobs in one economic basket that a single factory closure put an esti-

mated 5,000 people out of work between the main employer and its suppliers. This year marks the 10th since Swedish appliance manufacturer AB Electrolux shuttered its refrigerator plant in Greenville and moved operations to Mexico. Close to 2,700 jobs evaporated at Electrolux alone — about a third of the city’s population, though some of the workers lived in surrounding communities. The story of Electrolux and Greenville is by now so wellknown that VanderLaan and others here wish people would stop asking about it. “I still get the Electrolux thing: ‘Oh, you poor people, you’ve rolled up the sidewalks,’� said VanderLaan, Montcalm County’s business development coordinator, who works for Grand Rapids-based economic development agency The Right Place Inc.

“I hope you noticed driving in that we didn’t fold up our sidewalks or give up.� Yet despite the

challenge of diversifying a smalltown economy long known for appliance-making, there are signs that Greenville, a city of roughly 8,400 people northeast of Grand Rapids, is learning from its past. These days, the city is marketing itself as part of the larger West Michigan region, hoping that more resources for business attraction will lead to more deals. When Montcalm County wasn’t yet ready to join up with The Right Place, Greenville signed the first contract for services in the summer of 2014; the county followed about six months later. Greenville’s largest employers now have several hundred employees each, as opposed to several thousand. And in a city where just two out of 10 people Montcalm Community College’s Greenville campus teaches advanced manufacturing using two of these “Baxter� robots, built by Boston-based Rethink Robotics Inc.

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have at least a bachelor’s degree, the local chamber of commerce and Montcalm Community College are attempting to get ahead of the looming skilled trades workforce shortage by taking high school students on tours of local factories and working with manufacturers to rewrite curricula and train students on the same robotics technology the employers use. “Talk about all eggs in one basket? We’re not going to do that again,� VanderLaan said. At its peak, Electrolux employed as many as 8,000 people in Greenville, VanderLaan said. Shortly before the manufacturer decided to close the plant, it had 3,800 employees on the payroll. That number had shrunk to 2,700 by the time the plant closed. Today, in contrast, Montcalm County’s largest manufacturer is Southfield-based automotive supplier Federal-Mogul Corp.; it employs 375 at a powertrain bearings plant in Greenville. Manufacturing remains one of the city’s largest industries, but health care now leads the pack. Montcalm County’s largest employer is Grand Rapids-based Spectrum Health, with 850 people working at United Memorial Hospital in Greenville and Kelsey Hospital in Lakeview, according to 2014 data published by the county planning commission. These days, a company the size of Electrolux is “not the main tar-

get,� said Rob Spohr, student and academic affairs vice president at Montcalm Community College and president of the Montcalm Economic Alliance, the county’s economic development agency. That’s not to say the city wouldn’t entertain an offer from a company looking for a sizable workforce. But, he said, the community today is more interested in long-term economic sustainability than short-term gains — the marathon approach to economic development, not the sprint. Greenville’s economic rebound also will depend on how successfully it can supply local manufacturers with skilled talent. An aging workforce and growing skills gap have been significant discussion topics for companies for several years, said Spohr, who is leading the community college’s Greenville campus through its third expansion in two years. The college received $1.7 million through a state grant — including more than $430,000 in matching funds from the college — to add a machine shop and lab space for welding, robotics and advanced manufacturing training. There’s reason to be optimistic: The number of apprentices to local companies has grown from just a handful during the recession to 155 today, Spohr said. Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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WORLDWATCH WHERE MICHIGAN DOES BUSINESS

Bissell Homecare Inc. Based: Grand Rapids Operations: A head office and a

technical support and external logistics center in Melbourne with sales operations in Sydney and Brisbane, plus sales agents in other capital cities and key regional markets (Australia), and sales agency support with main base in Auckland, dedicated sales agent support in South Island, external logistics center based in Wellington, plus outsourced service agents in various locations (New Zealand) Employees: 36 Products/Services: A full range of Bissell products, including deep cleaners, vacuums and cleaning formula Top executive: Chris Egan, Oceania managing director Clients: Bissell supplies major electrical retailers and specialist floor care retailers including Harvey Norman, The Good Guys, Godfreys, JB Home, Myer, David Jones, BETTA Group, Appliances Online, The Warehouse Group, Noel Lemming, Smiths City and Clive Dicks.

AUSTRALIA/NEW ZEALAND

W

ith a nominal 2015 GDP of $1.2 trillion, Australia is the world’s 19th-largest economy, sustaining most of its GDP with the service sector (70 percent), according to the CIA World Factbook. Seventy-five percent of jobs in the country are also in the service sector. The country’s economy may face some challenges in the next year as global prices of key export commodities drop. In comparison, New Zealand had a nominal 2015 GDP of $170.6 billion, making it the 71st-largest economy in the world. New Zealand’s Brisbane economy was in recession before the global financial crisis, but surfaced in 2009 and saw between 2 percent and 3 percent growth in the Perth past four years, according to the CIA World Adelaide Sydney Auckland Factbook. Melbourne Australia’s largest exports are coal, gold, wool, meat, iron ore, machinery and transport equipment, wheat and Christchurch alumina. Its biggest export partners are China (33.7 percent), Japan (18 percent), South Korea (7.4 percent) and the United States (4.2 percent). Australia’s largest imports are computers and office machines, telecommunication equipment and parts, machinery and transport equipment, crude oil and petroleum products. Its biggest import partners are China (20.5 percent), the United States (10.6 percent), Japan (6.8 percent) and Singapore (5 percent). New Zealand’s largest exports are fruit, wine, dairy products, meat and edible offal, crude oil, logs and wood articles. Its biggest export partners are China (20 percent), Australia (17.4 percent), the United States (9.3 percent) and Japan (5.9 percent). New Zealand’s largest imports are textiles, vehicles and parts, mechanical machinery, electrical machinery, petroleum and products. Its biggest import partners are China (17 percent), Australia (12.3 percent), the U.S. (11.7 percent) and Japan (6.7 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. COMING UP

May: Germany | June: Mexico

DOMINO’S

The Domino’s Pizza store in Spring Hill, Australia, is one of 571 in that country.

Domino’s Pizza Inc. Based: Ann Arbor Operations: 571 stores in

Australia and 92 in New Zealand Employees: 20,000 Products/Services: Pizza, beverages, chicken and side items Top executive: Don Meij, CEO of Australian business entity Domino's Pizza Enterprises More information: Domino’s

franchisee in Australia recently unveiled a prototype of a delivery robot developed at its local innovation lab.

Dow Chemical Co. Based: Midland Operations: The head office for

Dow in Australia and New Zealand is in Melbourne with other facilities in Brisbane, Perth, and Sydney in Australia and Auckland in New Zealand; there are four plants, in Altona and Geelong in Australia and New Plymouth and Otahuhu in New Zealand. Employees: 400 Products/Services: Performance

and advanced materials, agricultural sciences, microbials, functional materials, building products, and water solutions and process divisions Top executive: Tony Frencham, managing director and regional president of Dow in Australia and New Zealand

Australian market by the end of 2017. Holden will retain its vehicle Proving Ground and Port Melbourne design center — one of only two GM design centers with the capability to build a full-scale, working concept car from scratch (the other being in Detroit).

GM Holden Ltd.

Herman Miller Inc.

Based: Detroit Operations: A headquarters,

design center and engine manufacturing plant in Port Melbourne, a proving ground test facility in Gippsland, a vehicle manufacturing plant in Adelaide and more than 230 dealerships across the country (Australia) Employees: 2,400 GM Holden employees, plus more than 10,000 indirect dealer employees Products/Services: 12 car lines, including Spark, Barina, Cruze, Astra, Cascada, Insignia, Commodore, Caprice, Colorado, Trax, Captiva and Colorado 7 from seven vehicle body styles (hatch, sedan, convertible, utility, SUV, wagon, limousine) as well as financial service offerings Top executive: Mark Bernhard, chairman and managing director More information: Holden is one of seven fully integrated General Motors Co. operations. GM announced in December that Holden would cease local manufacturing of vehicles and switch to becoming a full-line importer of vehicles for the

Based: Zeeland Operations: A main office for the

region in Sydney, eight dealers and retailers throughout Australia and seven dealers throughout New Zealand Employees: 7,000 Products/Services: Furnishings and interior systems and related services for the workplace,

residential, health care and educational environments Top executive: Paul Macdonald, sales director of Australia and New Zealand

Kelly Services Based: Troy Operations: Full-service offices

in Sydney, Parramatta, Wetherill Park, Brisbane, Mulgrave, Adelaide and Perth (Australia) and in Auckland, Greater South Auckland, Hawkes Bay, Wellington and Christchurch (New Zealand) Employees: 200 Products/Services: Staffing and recruitment, specializing in administration, office support, call center, general management,

project management, financial services, insurance, banking, scientific, laboratory, construction, engineering and government Top executive: Penny O’Reilly, vice president and managing director of Kelly Services in Australia and New Zealand Clients: Companies from the banking and finance, transport, supply chain and logistics, manufacturing and production, government, science, mining and engineering industries

Penske Automotive Group Based: Bloomfield Hills Operations: Operates through Penske Commercial Vehicles, based

in Brisbane (Australia); has operations in Auckland and Tauranga (New Zealand) Employees: 900 Products: Commercial vehicle distribution of Western Star trucks, MAN trucks and buses and Dennis Eagle refuse collection vehicles, and power systems distribution (engines and parts distribution of Detroit Diesel, MTU, Allison Transmission, Mercedes-Benz Industrial and MTU On-site Energy) Top executive: Randall Seymore, president of Penske Transportation

Group International

Perrigo Co. Based: Allegan Operations: Manufacturing,

warehousing, laboratories and office space in Balcatta, a suburb of Perth, Australia Employees: 300 Products/Services: More than 100 individual presentations of products in the Australian market, including prescription products, formulated devices, antiseptics, disinfectants and other health care essentials Top executive: Sharon Kochan, executive vice president, international Natalie Broda

Penske Automotive Group employs 900 in Australia and New Zealand; among its locations is this one in Auckland.

PENSKE

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Building a management structure: How business owners learn to delegate By Rachelle Damico

Special to Crain’s Detroit Business

Dino Signore, manager of entrepreneurial education at the Edward Lowe Foundation in Cassopolis, works with hundreds of second-stage businesses a year, or those with $1 million to $50 million in revenue and up to 100 employees. A topic often discussed is how to formalize departments and delegate responsibilities onto management hires. A common mistake? Business owners tend to over-promote people without recognizing that just because certain employees are skilled at certain tasks does not mean they’ll be able to do more managerial or executive tasks. “Do the job description first and find the person that fits that best with the expertise that you need,” Signore said. “Try to think about the job de-

Delegation nation Zoup wants managers to shout when more managers are needed, this page For Munetrix, it’s all about hiring the right people, Page 18 Agritek finds paying managers well frees up owner to specialize, Page 19

scriptions separate from the individuals — what kind of knowledge does the position require, what are the skill sets that need to be there and what kind of abilities does the person have to have?” Larry Kooiker, president and owner of Holland-based Agritek Industries Inc., has made similar hiring mistakes in the past. “You should take a lot more time to get it right upfront, otherwise you’re just delaying the inev-

itable, and that’s more hurtful to the person and the company in the end,” Kooiker said. Another common issue for business owners: As their companies grow, they have to allow managers to make mistakes, avoid micromanaging and learn to let go. Bob Kittle, co-founder and president of Auburn Hills-based Munetrix LLC, said letting go is necessary and allows the company’s founders to spend more time on business development. “It’s where a lot of entrepreneurs fail,” Kittle said. “You have to clearly articulate what you’re looking for employees to do and accomplish, but then let them go and let them realize that they don’t have to come in for approval.” More management also means more information-flow challenges. Signore said business owners should set aside time to allow

open dialogue with the management team. “They will start to show signs of departmentalization,” Signore said. “Be sure you’ve got a meeting structure set up where all of these groups are represented and can speak together.” Eric Ersher, founder and CEO of Southfield-based Zoup, has weekly leadership meetings to keep the company’s team of eight managers on the same page. “We reserve time for issue-solving and working collaboratively,” Ersher said. In this month’s Second Stage, we spoke to owners of three different businesses — a young business, a second-stage company and a franchise business now moving past second stage — to see what practices they use to delegate responsibilities, let go and build a management structure.

The economic system and the social system: Making money and forming departments By Rachelle Damico

Special to Crain's Detroit Business

The way Dino Signore, manager of entrepreneurial education at the Cassopolis-based Edward Lowe Foundation, sees it, two primary systems are at play when it comes to managing for growth: the economic system and the social system.

Business owners in the startup stage are focused on the economic system, or how to make money, who the customers are and how to capture the market. The social system becomes a critical issue during second-stage growth, when owners begin to see how managing employees can make or break the

economic system. “These two systems need to grow together,” Signore said. “When you hire good people, it will drive the economic system.” Signore said all companies go through a certain period where they reach a plateau, and that companies should be aware of this point so as to not be stuck in

the economic stage. “Our experience shows that if you anticipate when you will be on that plateau, and when to take that plateau as a potential point to develop other systems — such as your social system — it will allow an opportunity for the organization to go to the next level,” he said.

JACOB LEWKOW

“At the core of letting go is trust,” said Eric Ersher, Zoup CEO. “When we let go, we allow people to continue to develop, grow and be challenged.”

Zoup wants managers to say when plates are full By Rachelle Damico

Special to Crain's Detroit Business

Eric Ersher, founder and CEO of Southfield-based Zoup, relies on department heads to let the company know when a new management hire is needed. The national soup and sandwich franchise company has about 30 employees. The company, whose official name is Zoup! Systems LLC, reached $48 million in revenue last year and is expected to reach $57 million in 2016. Zoup’s eight managers — including Ersher and the president of the company — head operations, finance, marketing, technology, franchise development, and real estate design and construction. Ersher said Zoup trusts department heads to let the company know when they have taken on too much responsibility and a new management hire is needed. “They need to say, ‘I don’t have the capacity to do this in the way that it needs to be done, I need SEE ZOUP, PAGE 20

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SPECIAL REPORT: SECOND STAGE

Time to delegate: Owners find it’s not easy By Rachelle Damico

Special to Crain’s Detroit Business

Bob Kittle, president of Auburn Hills-based Munetrix LLC, knew it was time to hire an office manager when his bookkeeper was unable to take on any additional work. He needed a manager to take over administrative functions such as scheduling, time sheets and other general office management responsibilities. “It starts to get to the point where the only way to grow is to delegate, and that’s a very difficult thing to do,” Kittle said. “Not only because it’s difficult to let things go, but it’s difficult to find the right person and hire the right person.” He and fellow co-founder Richard Brown formed Munetrix in 2010 as a developer of a web-based financial management tool for governments and schools. The company has nine employees, reached just under $1 million in revenue last year and now is at a point where top managers are ready to take some work off their plates. “The co-founders can’t continue to do all the administrative and

sheer business functions, and it’s time to pass that off to somebody else,” Kittle said. Munetrix has had difficulties on this front. The company hired a full-time office manager during the first year through a friend’s recommendation, but the cultural fit wasn’t there and it didn’t work out. “The biggest mistake you can make is hiring somebody who isn’t the right one,” Kittle said. “That’s lost time, productivity and money.” Kittle said Bob Kittle: Biggest mistake is “hiring that when he hired this initial somebody who isn’t the right one.” office manager he strayed from his usual hiring process rather than enlisting the help of Sterling Heights-based company The Metiss Group Inc., as he usually does. Metiss uses tools to screen employees and match them with job skills. “I broke my own tradition and didn’t follow that process,” Kittle

said. “Guess what? It didn’t work out.” Kittle used that process last month when he was hiring his new office manager, whom he found through social media. “It puts more of my time on business development and selling our product,” Kittle said. When Kittle and Brown set out to form the company, they hired the help of a lawyer, certified public accountant and insurance agent. They also contracted with a bookkeeper to make sure all legal proceedings were in order — including the corporation formation, insurance, accounting and workers’ compensation filings. “You’re exposing yourself every day you move forward without having those basics in place,” Kittle said. “Make sure you do, because you could be gone if you don’t.” The co-founders started out doing sales and marketing for the company themselves, because Kittle found salespeople were more expensive. “Salespeople want to be compensated,” Kittle said. “If you can

give them a smaller salary with a lot of upside on commission, that’s the greatest thing, because if they’re making money you’re making money.” As the company grew, Munetrix hired a marketing person tasked with responsibilities such as measuring web traffic and crafting the company’s message. More marketing was eventually needed, and Munetrix outsourced some marketing rather than hire another employee. “It really comes down to what you can afford until you get big enough to where you need it,” Kittle said. “You can buy those services from others.” That’s why Munetrix also outsources human resource needs rather than bear the costs of keeping an HR person on staff. “Maybe if you have more than 50 employees it would make sense to have an HR person, but anything less than that, outsource it,” Kittle said. “It hardly costs you anything.” Munetrix reached a point in growth where the company was able to hire a part-time salesperson in January, taking more work

off the co-founders. “We’re ramping that up to try to increase our business development exposure in the marketplace,” he said. The company has two managers on staff, while the remaining employees do coding, research, data analysis and customer support. Kittle said once he passes the $1 million revenue mark, which he expects will be next year, the company will consider forming more departments and begin the process of hiring a general manager. Kittle said more people on staff means more communication challenges. That’s why he recommends having an employee handbook, and for companies to hire a business coach or HR firm to help. “There are barriers to growth that come with a company that’s emerging,” Kittle said. “You need somebody you can talk to that’s been through it before. The entrepreneur — the person with the light bulb and the great idea — will typically not possess all the skills needed to effectively run a good business.”

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SPECIAL REPORT: SECOND STAGE

Business owner’s management advice: Hire slowly, fire quickly By Rachelle Damico

Special to Crain’s Detroit Business

Larry Kooiker, president and owner of Agritek Industries Inc., hired his first manager when his staff of seven employees was becoming too difficult to manage. “It felt like I was running in place,” Kooiker said. “I needed an extension of my mind, not my hands.” The Holland-based company manufactures, designs, engineers and produces metal products and parts. Kooiker founded the business in 1987 and now has 120 employees. Agritek reached $18 million in revenue last year. Hiring a production manager allowed Kooiker more time to Larry Kooiker: focus on busiFounded Agritek ness developin 1987; company ment, while the now employs 120. p r o d u c t i o n manager was tasked with responsibilities such as scheduling work orders and ensuring all metal parts and processes were in place and maintained properly. “It was painful, not only letting go and trusting someone, but paying them well to get that kind of a person,” Kooiker said. “You have to shell out a lot of money for somebody that has a strong track record, like you.” Kooiker ran an advertisement in the paper and took his time interviewing many candidates for the position, rather than rushing through a big decision. “Hire slow and fire fast,” he said. “You don’t know what they’re really like in practice, or sometimes it’s just a cultural fit — maybe they’re more corporate, and we’re more entrepreneurial here.” Kooiker said companies should not stall on firing people and recommends letting go of an employee within the first six months if it’s not a fit. “We’ve hired the wrong guy before, and you have to have these very painful meetings where you have to let them go,” Kooiker said. “They’re devastated. I’m feeling bad that I made the wrong decision — but you just have to correct it, move on and try again.” Kooiker said he finds and maintains good managers by treating and paying them well, and avoids micromanaging. His current production manager has been with the company for 22 years and oversees a staff of about 60 people. “As you grow, you find out that recruiting great people changes the trajectory of your company,” Kooiker said. “Give them advice, and try to stay out of the way.” His top executives include the

production manager and an engineer manager. Kooiker himself manages the business sales and development of the company. Kooiker had hired a sales employee in the past, but decided to stray from that path because salespeople tend to be expensive. “We build relationships with people that want to do business with us,” Kooiker said. “It works quite naturally for us and without any inefficiency costs associated with it.” Each department in the compa-

ny, such as machine building, welding, stamping and pressing, has a manager overseeing operations. As the company evolved over time, Kooiker formed structure by setting objectives, building and organizing the structure of the company and writing job descriptions for employees. Kooiker said a business owner should also have a good finance person, attorney, accountant and insurance agent.

“Always had good advisers in that category,” he said. “That would show you how the structure of the company should be legally and mitigate risk and liability.” Kooiker compares building a management structure to how a coach organizes a team: As the company grew, he could see where everything fit. “There’s days where you just want to change everything, but you have to give things a chance to work,” Kooiker said.

“It’s like modulating a radio station: You don’t turn the knob one inch to the right or the left, you’ve just got to tweak it so it just gets on the beam and you get a nice clear signal.” Kooiker said good department heads mean better employees and more room for the company to grow. “The best success we’ve had is good department heads that get it,” Kooiker said. “They will send the message through example.”

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ZOUP FROM PAGE 17

help,’ ” Ersher said. “Either they don’t have enough capacity to run the team effectively, or they don’t have the depth of knowledge to be able to do it." For instance, Zoup’s finance director came forward to say he no longer had the capacity to run the company’s technology department when a huge project of updating Zoup’s point-of-sale software was needed. “Technology has become such a critical part to our and our franchisees’ business that we needed a level of depth and support that we didn’t have,” Ersher said. Zoup hired a director of technology to run the project and to manage the company’s technology department, leaving the finance manager to more effectively run the finance team. Trust plays a factor in Zoup’s reliance on department heads to come forward about new management hires. Ersher said when Zoup was a smaller company, letting go was more of a challenge, but it became easier, and necessary, as the company grew. “At the core of letting go is trust,” Ersher said. “When we let go, we allow people to continue to develop, grow and be challenged.” Ersher said that letting go also allows more time for the company to focus on business development. “One of things that is helpful when letting go is to be able to continuously challenge ourselves and do other things,” Ersher said. A way the company keeps its managers on the same page is to set weekly leadership team meetings to set goals, resolve issues and ensure objectives are understood clearly. “A department head could be picturing one thing, and me and my partner could be picturing another,” Ersher said. “We cannot create accountability without having clarity.” Zoup provides employees lunch every day and has off-site meetings to discuss business more freely. “There’s a casualness of being together to help break down barriers,” Ersher said. “We invest a lot in our teams and in the culture.” Two ways Zoup finds managers is by tapping network connections and using recruiters, but Ersher said most managers have been hired from within the company. Managers and employees who work at Zoup headquarters are also required to work at a retail location for at least four days to better relate to the company’s mission. “It allows them to have context for better decision-making,” Ersher said. Ersher also works with Gino Wickman, founder of EOS — or Entrepreneurial Operating System — and looks to his tools, models and books for advice. One of the biggest lessons Ersher said he learned from Wickman is to “elevate and delegate.” “It’s through that delegation that we are able to elevate our own work.”Ersher said.

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 1 , 2 0 1 6

21

SPECIAL REPORT

TOM HENDERSON thenderson@crain.com Twitter: @tomhenderson2

Credit union finds mergers have benefits In 2004, Heidi Kassab, then 33, was named as one of that year’s class of Crain’s 40 under 40. The year before, she had been named president and CEO of Motor Parts Federal Credit Union and was hon-

ored in part for changing the credit union’s charter and name to Cornerstone Heidi Kassab

Community Financial Credit Union so it

could diversify its geography and its membership, which until then had been solely DaimlerChrysler employees and families. She was also honored for expanding the credit union’s assets in her year at the helm from $116 million to $130 million. Reporter Tom Henderson caught up to her at the credit union’s Auburn Hills headquarters. What’s the credit union’s history? We were founded in 1951 as the Mo-Par Federal Credit Union by a group of Chrysler employees in Center Line who literally operated it out of a strongbox at one of their desks. At some point, Chrysler said they wanted the Mo-Par name back, so it was changed to the Motor Parts Federal Credit Union, and eventually we changed it to Cornerstone Community. How have you expanded the footprint?

We’ve done a few mergers. In October 2014 we added three counties in northern Ohio to our geographical reach, where we’re building a new freestanding branch in Perrysburg. And we took over Northwood Credit Union in January. Now we have six branches, $262 million in assets and 26,000 members. Why are there so many credit union mergers? The larger you become, the

more benefits you can give members. Then you have the issue of CEOs retiring and volunteer board members deciding it’s time to look for a merger. And there are economies of scale with compliance issues and technology. Cybersecurity is so important, and smaller credit unions have a tougher time affording the staff to do it.

FINANCE

Dave Girodat, Fifth Third Bank’s

eastern Michigan president, enjoys this view of the Guardian Building from his remodeled top-floor office at One Woodward.

Working with the wow factor Fifth Third’s new Detroit HQ design to serve as national pilot By Tom Henderson thenderson@crain.com

The brass at Fifth Third Bank’s national headquarters in Cincinnati is so impressed with the new headquarters in downtown Detroit for eastern Michigan operations that it has decided its radical redesign of the traditional bank office will serve as a pilot for makeovers of other Fifth Third complexes around the country. Fifth Third’s West Michigan headquarters in downtown Grand Rapids will get a lookalike makeover early next year. A small office in Jacksonville, Fla., gets its makeover this month, and an office in Dallas is scheduled to get its makeover in May. Missing from what has been rechristened the Fifth Third Bank at One Woodward building — from the bank’s former headquarters in the Southfield Town Center — are large offices for executives. Gone, too, are inter-office silos, where members of each business unit of the bank worked together

PHOTOS BY LARRY PEPLIN

with little interaction with those in other departments. Mostly gone are permanent work stations for employees. “We’re piloting a design here that will be transformational for Fifth Third,” said Jack Riley, the vice president of marketing. Detroit-based Sachse Construction did the build-out in the former Michigan Consolidated Gas

Any mergers in store for you? Our goal is to do one every 18 months. Right now, we’re putting a lot of effort into the state of Ohio. Are you, like some other credit unions, doing more commercial lending? Our fo-

cus is still on auto lending. We have a few commercial loans that we’ve originated. We’ve got about $15 million in our portfolio, compared to about $140 million in auto loans.

Employees can enjoy the view and natural light (above) at workstations sheltered by wraparound plastic panels, and the office includes open spaces (right) where staff can gather.

Co. building. Cincinnati-based Champlin Architecture did the de-

signs based on recommendations by a consulting group at CBRE Inc. Most of the office furniture came from Grand Rapids-based Steelcase Inc. Fifth Third originally announced in October 2014 that it was moving its regional headquarters to Detroit and hoped to

start moving management in the following spring. The plan was to have a traditional look and feel. Then came the call from corporate headquarters that President and CEO Greg Carmichael wanted a radical new look that could serve as a prototype elsewhere for Fifth Third, which SEE DESIGN, PAGE 22

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SPECIAL REPORT: FINANCE

DESIGN FROM PAGE 21

LARRY PEPLIN

Employees without assigned desks have lockers for their personal effects.

called for a delay in construction. Getting rid of the dark and somber look was easy in the iconic downtown Detroit skyscraper designed by the legendary architect Minoru Yamasaki. Opened in 1962 as headquarters for the Michigan Consolidated Gas Co., the building is known for its floor-to-ceiling windows, a cheerful brightness and breathtaking views of Belle Isle, the Detroit River, Canada and other downtown landmarks, including the Guardian Building, which looms impressively just behind

Dave Girodat, the eastern Michigan president, as he sits in his corner office on the 26th — and top — floor of the building. The gas building was Yamasaki’s first skyscraper, and elements from its design were used when he designed the World Trade Center in New York City, which was destroyed on 9/11. Girodat’s is the only office along an outer wall on the 25th and 26th floors that Fifth Third now occupies. “Management thought we should have a wow factor when I’m meeting with clients,” he said. On the rest of the two floors, the windows and views are left for employees to enjoy.

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His office has a wow factor, indeed: The Guardian Building seemingly hovers surrealistically behind him. The office is half the size of his former office and much brighter. Fifth Third formally unveiled its new regional headquarters to the public in early March at the Fifth Third Bank at One Woodward building, owned and operated by Dan Gilbert’s Bedrock Real Estate Services. The first wave of 90 bank employees actually moved into the 31,000 square feet on the top floors in December, including senior executives, commercial bankers and support staff, mortgage bankers and the wealth-management team. Another 80 or so employees will move downtown in late spring into another 31,000 square feet on the 12th and 13th floors. Originally, Fifth Third was going to retain about 20,000 square feet in the Town Center, but eventually decided to commit entirely to downtown Detroit, Riley said. “We’re all in on Detroit, and that will resonate with people,” said Girodat. The radical change in what Fifth Third thinks a bank office or regional headquarters should look like — it calls the new open look My Workspace — is more than cosmetic, or a way to get different types of bankers to work more collegially together on behalf of a client, it also offers a significant savings in rent. Fifth Third occupied 105,000 square feet in Southfield. It will reduce that by more than 40 percent by the time all the employees have made the move. Some of that savings in space is because of eliminating large offices for executives. Bank vice presidents sit out in the shared public space with new account reps. Most employees don’t have assigned desks, which are available on a first-come, first-served basis each day. Earliest in gets the best view. Employees store their belongings in two assigned file cabinets at night and keep personal objects like coats in lockers spaced around the office during the day. “How do you put the customer at the center? How do you make the office more collaborative?” asked Girodat. By making what he described as “a no-hide environment. There’s not a room here, except bathrooms, without windows. This is the future of collaborative efficiency.” Girodat said making it easy for different bankers who work with a particular client to get together and share information is also designed to cut down on paper waste. He said the bank recently did a survey and discovered that $4 million worth of paper sits uncollected at printers companywide each year after being printed. One would expect employees to welcome a brighter, more cheerful workplace, and appreciate laptops that provide them with more flexible hours, but how are employees adapting to less privacy and less personal space, especially execuSEE NEXT PAGE

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FINANCE FROM PREVIOUS PAGE

tives used to the perk of large, quiet offices of their own? “We were worried about that, but I have to say, we’ve been surprised by the overwhelmingly positive remarks we’ve received about the office space,” said Riley. “The energy of the space, the energy of being downtown and the beautiful views that everyone gets because of the layout has more than outweighed a lack of privacy. For one thing, technology has reduced the need to have as much space. For another, there are enough meeting rooms and quiet rooms and cool spaces you can go to get away.” Soundproofed meeting rooms, called huddle rooms, abound. Small groups of employees can gather around a conference table, plug in their laptops and share files on large monitors on the wall. Employees can grab some space of their own to do work or just chill in chairs that sit apart from the banks of desks. Riley said the bank has held town meetings with employees, and fears that were expressed beforehand about moving downtown from the suburbs have largely dissipated, in part because the bank gave employees a bump in pay to cover commuting costs and parking. “There really has been a vibe about being downtown,” he said. The open office look may be new to banks, but it is fairly common to new headquarters for IT and tech companies. Fifth Third’s new space has a very similar look, and had a similar response by employees to the new headquarters Covisint Corp. built out in Southfield last May on the fifth floor of the Travelers Tower II building after it spun out from Compuware Corp. in an intial public offering. The cubicles and private offices Covisint employees had in the Compuware Building in downtown Detroit were replaced by a wide-open office punctuated by work areas where desks are bunched together, with lots of small conference rooms lined with white boards. Workers sit at counters or at small round tables, which are covered in white-board material. Small phone booth-like rooms are available at either end of the floor for those in need of privacy. “It’s been a great, collaborative space from day one,” said Enrico Digirolamo, Covisint’s CFO. “There were probably 50 offices on this floor when we took the space, and we said, ‘Just blow out the walls. And blow out the ceiling, too.’ ” Back at the Fifth Third headquarters, there are a pair of treadmills up against the windows on each floor, looking out over the city, offering some multitasking to those who might have a long conference call scheduled and would like to go for a walk while they talk. Or, again, a chance to get away for a bit. Riley, a marathon runner, is a regular visitor to the treadmills. “If you’re sweating, you’re doing it wrong,” Girodat said, jokingly. Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

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C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 1 , 2 0 1 6

PEOPLE: SPOTLIGHT

Crain’s seeks Health Care Heroes

Walsh president-CEO Bergeron to retire in ’17

Do you know a Health Care Hero? Crain’s Detroit Business is seeking nominations for Health Care Heroes, a special report on health care professionals that will run in the July 18 issue. The program will honor medical innovators and patient advocates dedicated to saving lives or improving access to care. Winners will be chosen in five categories:

Corporate achievement in health care: Honors a company

that has created an innovative health benefits plan or solved a problem in health care administration.

Advancements in health care:

Honors a company or individual responsible for a discovery or for developing a procedure, device or service that can save lives or can improve quality of life. Physician: Honors a physician whose performance is considered exemplary. Allied health: Honors an individual from nursing or allied health fields who is deemed exemplary by patients and peers. Trustee: Honors leadership and distinguished service on a health care board. A panel of health care judges will choose the Health Care Heroes winners. The deadline for nominations is May 16. They can be made at CrainsDetroit.com/ nominate. Questions? Contact Michael Lee at (313) 446-1630 or malee@crain.com.

THURSDAY APRIL 14

DEC Presents Peter Karmanos. 11:30

a.m.-1:30 p.m. Detroit Economic Club. Karmanos is the principal owner/governor and CEO of the Carolina Hurricanes, and chairman and co-founder of MadDog Technology. The Townsend Hotel, Birmingham. $45 DEC members; $55 guests of DEC members; $75 nonmembers. Phone: (313) 963-8547; email: info@econclub. org.

UPCOMING EVENTS

The Rise of Snapchat. 11:30 a.m.-1:30 p.m. April 19. Adcraft Club of Detroit. Imran Khan, chief strategy officer for Snapchat,

discusses its rise from its beginnings in 2011 to more than 7 billion daily video views in 2016. The Reserve, Birmingham. $50; $40 members; $25 junior, student members. Contact: Melanie Davis, phone: (313) 872-7850; email: mdavis@adcraft. org.

SDG ARCHITECTS

The Charles H. Wright Museum of African American History was among the notable buildings designed by Howard Sims’ firm.

Noted architect Sims dies at 82 Founder of state’s oldest minority-owned architectural firm planned landmarks

American History, said David Rudolph, Sims family spokesman. Other significant projects for Sims included the Cobo Center expansions and renovations and the Uni-

By Marti Benedetti

Social Work. Sims had been semi-retired for about three years, living primarily in Arizona. But he continued to have his finger Howard Sims: on the pulse of Founded his company in 1966. his company. Geoffrey Harrison will remain Sims Design Group’s general manager. Sims’ daughter, Frances, handles design and project man-

Crain's Detroit Business

Howard Sims, founder of the oldest minority-owned architecture firm in Michigan, died March 31 of complications from an apparent heart attack. He was 82. Sims founded the Sims Design Group Associates LLC (formerly Sims-Varner) in 1966. The downtown Detroit company is best known for the design and planning of several Detroit buildings, schools and museums. Among Sims’ favorites was the Charles H. Wright Museum of African

versity of Michigan School of

CALENDAR

Women’s Power Breakfast. 7-9 a.m. April 21. Gleaners Community

Food Bank. Event brings together more than 600 of the area’s most powerful women. Cochairwomen are Faye Nelson, vice president, public affairs,DTE Energy, and president, DTE Energy Foundation; Andra Rush, chairman and CEO, Rush Trucking Corp.; Nancy Schlichting, CEO, Henry Ford Health Systems. Eastern Market Shed 3, Detroit. $120 individual; $1,000 table. Contact: Suzette Hohendorf, phone: (313) 9233535; email: wpb@gcfb.org. DEC Presents John Noseworthy. 11:30 a.m.-1:30 p.m. April 21. Detroit Economic Club. Noseworthy is president and CEO of the Mayo Clinic. Cobo Center, Detroit. $45 DEC members; $55 guests of DEC members; $75 nonmembers. Phone: (313)

963-8547; email: info@econclub.org.

Fuel: Detroit. 9 a.m.-5 p.m. April 21. Fuel Leadership. Speakers include Mark Kelly, commander of Space Shuttle Endeavour’s final mission; authors Marcus Buckingham and Mitch Albom; Jacques Panis, president, Shinola; Martha Stewart, lifestyle guru; Sarah Kay, founder, co-director, Project Voice; Michael Strahan, co-host, “Live With Kelly and Michael.” Sound Board, Detroit. $495 general; $895 VIP. Contact: Jordan Broad, phone: (248) 206-7065; email: Jordan@ FuelLeadership.com. Next Steps to Improve Michigan’s Economy. 10-11 a.m. April 22. Automation Alley. Steve Arwood, CEO of the Michigan Economic Development Corp., discusses

MEDC plans to help grow Michigan’s economy and continue

agement at the family-owned company. “Howard Sims’ legacy and contributions are unchallenged, having received many awards for his work and noted as the founder of the oldest minority-owned architect firm in Michigan,” Rudolph said in a news release. “He valued education and worked to foster more minorities in the field of architecture,” Rudolph said. Sims established scholarships at UM, Michigan State University, Wayne State University, Lawrence Technological University and Oakland University. His board involvement included the W.K. Kellogg Foundation, Comerica Bank, DTE Energy, the Federal Reserve Detroit Branch and St. John Hospital. the state’s reinvention. Automation Alley, Troy. Free with advance registration; $10 walk-in members; $15 walk-in nonmembers. Contact: events@automationalley.com; phone: (800) 427-5100. Breakfast of Champions. 7:30-9 a.m. April 27. Leadership Oakland. Barbara McQuade, U.S. attorney,

Eastern District of Michigan, speaks on “Public Leadership — Fighting for Justice.” MSU Management Education Center, Troy. $32 LOAA members; $36 nonmembers. Website: leadershipoakland.com/events.

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

Stephanie Bergeron, president and CEO of Troy-based Walsh College since 2007, is retiring from the post early next year. Bergeron, the sixth Walsh president since its inception in 1922, expects Stephanie to remain in Bergeron: Sixth the position president in Walsh until early history. 2017, while the college finds her successor. Bergeron, 62, became Walsh interim president after predecessor Keith Pretty left in 2006 to be president and CEO at Northwood University.

Wayne State names Duke official as provost Wayne State University has tapped Keith Whitfield, vice provost for academic affairs at Duke University, to succeed outgoing Provost Margaret Winters effective June 1. Winters, provost and senior vice president for academic affairs at WSU since 2013, is retiring after 14 years there. Whitfield also is an expert on aging among AfricanAmericans as well as a research Keith Whitfield: professor at the Duke Will take Wayne State provost post medical school’s in June. Division of Geriatrics, a professor in the department of psychology and neuroscience, and co-director of Duke’s Center on Biobehavioral Health Disparities Research. At WSU, he will oversee issues related to student performance and retention, and its instructional mission.

Beyer named Chassix CFO Southfield-based supplier

Chassix Inc. announced the hiring of Michael Beyer as CFO.

Beyer most recently served as the CFO for Dearborn-based

Wolverine Advanced Materials LLC. Before that, he was corporate controller for Affinia Group and in financial management roles at Dana Corp. and Owens Corning. He replaces David Woodward,

who served in an interim capacity at Chassix as a contractor with Chicago-based

FTI Consulting Inc.

April 11, 2016

LENDING FROM PAGE 1

Financial Credit Union, the largest

credit union in the state with 220,000 members and more than $4 billion in assets, as senior vice president in charge of the commercial business operation that was launched 11 months ago. Lesli Matukaitis: Albert was reRecruited to DFCU cruited by Bill from Comerica Beardsley, the president and CEO at MBA who was his former boss at KeyBank. Most of MBA’s underwriters and portfolio managers are former commercial lenders at traditional banks. Michigan Business Alliance is known in the industry as a CUSO, or credit union service organization, which does underwriting and portfolio management on behalf of some 36 credit unions around the state. Beardsley said although he serves larger credit unions with assets generally of more than $100 million, most of them don’t have the resources to hire their own underwriters and commercial lenders. The credit unions refer members who own businesses to the MBA if they need real estate loans, lines of credit or equipment financing loans. The credit unions pay a fee to MBA to do the back-office work

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 1 , 2 0 1 6 CRAIN’S DETROIT BUSINESS but bear the risks and the profits of cial lending by credit unions has According to President and CEO those loans. On large loans, other climbed from $26.5 billion in 2008 Terry McHugh, his organization credit unions can choose to take a to $46.6 billion in 2014 and about booked commercial loans of $46.3 $56 billion last year. While dollar million in 2011 and serviced a piece of the action. MBA began modestly, with a volumes are up sharply, much of portfolio of $179.7 million. Last loan portfolio of $3.2 million at the the commercial lending seems to year, it booked commercial loans end of 2004, and grew that to $75.3 be a result of bigger credit unions of $156 million and serviced a portfolio of $388.7 million for 135 million at the end of 2007, $423 with more money to invest. About a fourth of credit unions credit unions in the state. million at the end of 2014 and $460 nationally did commercial lending It already had booked $39 milmillion at the end of last year. Beardsley described MBA’s in 2008, with just over a third of lion in loans with two weeks left in the first quarter. lending sweet spot as fairly wide, them doing it in 2015. McHugh said that while the Beardsley says the rate in Michfrom $50,000 to $5 million, though he said his CUSO will do commer- igan is much higher, with about large bulk of those loans are still cial loans as small as $15,000 and two-thirds’ participation. “Michi- real estate loans, diversification has done one as large as a little gan leads the country in the per- has been strong into such things centage of credit unions that do as equipment financing and lines more than $15 million. of credit. “I kept in touch with Bill over commercial lending,� he said. According to the Lansing-based “We’ve had a big growth in those the years and admired what he was going,� said Albert, who had Michigan Credit Union League, a trade areas in the last three to five years,� worked 24 years at KeyBank. “Bill organization, credit unions in the he said. “We’re hiring bankers with came to me last year and said he state had total outstanding busi- that expertise, and it’s going to bewas looking to take MBA in a new ness loans totaling $2.2 billion at come a bigger part of this business direction, that 85-90 percent of its the end of 2015, an increase of 15.3 moving forward.� He said his CUSO employs 32, commercial lending was in real es- percent in a year. In the past seven tate and he wanted to diversify years, commercial lending has in- and about 25 are commercial into other lines of business lend- creased by an average of 17.9 per- lenders trained at banks. ing. That was attractive to me, and cent per year. DFCU takes the plunge Even so, $2.2 billion represents so was the chance to work for a Mark Shobe, president and CEO small organization where I could a small share of the overall outhave a big say-so. I can help shape standing loans at Michigan credit of DFCU, admitted resisting getting into commercial lending for the culture here rather than have a unions of $32 billion. “During tough times, credit years. He knew from his backculture that’s pushed on you by a unions kept growing their com- ground as a banker that commerregional bank.� Beardsley said most of his 24 mercial loans, while banks were cial lenders were highly trained employees are former commercial contracting,� said Dave Adams, and in a complex niche. He prelenders at banks. “There’s been a the MCUL’s president and CEO. ferred to stick to the bread and significant talent inflow from “From 2007-2015, credit unions butter of cars and houses. Before launching his smallbanks to credit unions, particular- nationally grew their small-busily in commercial lending,� he said. ness lending by 107 percent. lending unit almost a year ago, According to BauerFinancial LLC, During the same time, banks grew DFCU surveyed its members and an agency in Fort Lauderdale, Fla., theirs 14 percent.� found out that about 8,000 of them Commercial Alliance LLC is anoth- owned companies. “We already that rates banks and credit unions on their financial health, commer- er CUSO, founded in Troy in 2004. had 8,000 warm leads, and that

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Page 25 was a good place to start,� he said. “If you like us as a customer, we already have your attention.� DFCU serves what Shobe describes as an underserved market, the business owner whose company earns less than $10 million a year who needs a loan of maybe $100,000 of $250,000. “Loans the big banks won’t look at,� he said. “If you need $50 million, we can’t help you. But need a line of credit for $100,000 to finance some equipment, we can.� Starting cautiously, his team of three commercial lenders has opened 900 accounts and generated a loan volume of $7 million. “We are building the business slowly. We didn’t need to do anything silly. Eventually, we’ll have multiples of that,� he said. Gary Moody is president and CEO of Ferndale-based Credit Union One, which has 135,000 members and more than $1 billion in assets. So far, he has resisted commercial lending. “We do very little of it. Our bread and butter is auto lending and mortgages, and we do it well. We’ve experienced 13-14 percent loan growth over the last couple of years without doing any commercial lending,� he said. “DFCU is an incredibly large and sophisticated organization, and they’re just now getting into commercial lending. I think our long-term strategic plan is to be a commercial lender, but we have to do it with the right intentions and the right people.�

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TOWNS FROM PAGE 1

LINDSAY VANHULLE

Montcalm Community College is adding a machine shop and lab space for

advanced manufacturing training at its Greenville campus. College and local economic development administrators say the Greenville community is focused on growing its skilled trades workforce. More on Page 14.

LORIENT FROM PAGE 3

Medical LLC, a Pontiac-based com-

pany that hopes to use infrared thermal imaging to detect breast cancer earlier and more reliably than mammography. Lorient, which employs five, will act as a family office, meaning it won’t need to take on limited-partner investors. All of the money will come from managing partner Mark Mitchell, who sold his majority interest in U.S. Medical

Management, a Troy-based home

care company he founded in 1993, to St. Louis-based Centene Corp. for $200 million in a deal that closed in January 2014. Some perspective as to the size of Lorient’s investment pool: Last September, Ann Arbor-based Arboretum Ventures LLC closed on a fund of $220 million, the largest VC fund in state history. In 2013, Detroit-based Huron Capital Partners LLC, a private equity firm founded in 1999, raised its fourth and largest fund of $500 million. “I had a large liquidity event,

existing businesses and attract new ones. For a company town, the risk is much greater. Consider the example of Greenville, which in 2006 lost its major AB Electrolux refrigerator plant to Mexico — and 2,700 jobs — in one swoop. Or Flint, a longtime General Motors hub that saw employment fall from a peak of 80,000 in the 1970s to about 7,200 today. There are other examples. Baby food maker Gerber Products Co., which started in Fremont, was sold in 2007 to a Nestle Group subsidiary and is now headquartered in Florham Park, N.J. — though the company still maintains a 1,300-person workforce in Newaygo County. And The Upjohn Co., a pharmaceutical

firm founded in Kalamazoo in the 1880s, eventually became part of New York-based Pfizer Inc. through a series of mergers, and is a far smaller employer in Kalamazoo County than it was in past decades. A town that is home to a corporation that can innovate and adapt to changing times is more likely to succeed, since businesses that make up the company’s supply chain are more likely to decide to

so now I’m doing my next career,” said Mitchell. “The thought was, how can we be value-added and invest smart family money? We want to help provide the bridge to get companies to the next level.” As for not seeking a larger pool of money from other investors, Mitchell said: “We can be a little out of the box without limited partners.” Mitchell’s partner at Lorient is David Berman, an investment banker who while at Ziegler, a Chicago firm focusing on health care M&A, helped Mitchell negotiate the sale of his interest in U.S. Medical Managment. After the sale, Mitchell remained as CEO, hiring Berman to join his management team as vice president of strategy. Previously, Berman was an investment banker at J.P. Morgan Chase & Co. in New York. Berman and Mitchell left U.S. Medical last July and founded Lorient in August. Mitchell remains as chairman of U.S. Medical's board. Lorient takes its name from Lorient Beach in St. Barts, where Berman and Mitchell were on va-

cation last summer making plans for their new company. Berman said that while Lorient will do deals nationally, it will focus on the Midwest and in particular on Michigan, with plans to do half its investing in health care and half in other industries. “We see a lot of opportunity here, and we like driving to portfolio companies as opposed to flying,” he said. “We’ve got three or four deals in the pipeline now.” Berman said Lorient has four investment strategies — as a private equity firm buying a majority interest in stable, mature companies; as a VC firm helping launch good ideas or get startups off the ground; providing growth capital to successful companies; and providing bridge financing to companies through a variety of debt vehicles. Other local investments include Livonia-based MedCerts, which provides training for entry-level health care workers, and Birmingham-based Mil-Spec Automotive LLC, a company founded by Mark’s son, Adam, which reconditions and sells used Humvees, the popular military vehicle. Reconditioned Humvees sell for

LINDSAY VANHULLE

Greenville’s former AB Electrolux factory is now an empty field.

move nearby, said Jim Robey, regional economic planning services director for the W.E. Upjohn Institute for Employment Research in Kalamazoo. That reduces logistics and transportation costs for the companies, Robey said, while creating more jobs for local residents. The downside, though, is that “sometimes cities take those folks for granted,” he said. Translated, it’s the belief that a company is “too big to leave.” Globalization and technological change “certainly puts the larger firms at risk,” said Donald Grimes, an economist and senior research associate at the University of Michigan’s Institute for Research on Labor, Employment and the Economy. That’s partly due to the fact that large SEE NEXT PAGE

an average of about $110,000, said Berman. Berman said Lorient will be active investors. “Our background is in operating businesses, not just being investors. We’ll be value-added. We’ll be active day to day in management, which hedges our risk,” he said. “If we need to, we’ll bring in operating executives for our portfolio companies.” He pointed out First Sense as an example that is paying off for Paul Angott, the company’s founder and CEO. At Berman’s and Mitchell’s urging, he hired a chief commercialization officer, Alan Klevens, and engaged two consultants to help him navigate the path to U.S. Food and Drug Administration approval for his medical device. Angott said he expects to get FDA approval this year and to start sales in the first quarter next year. “They provided a ton of financial expertise, which was just what I needed,” said Angott, who got a first investment from Lorient last year and a follow-up investment in March. “They pushed me on a commercialization officer, which I needed. They keep me on my toes. They bring financial resources to the table and solid business judgment. Mark is on my board, and he is super shrewd.” First Sense has raised $12 million in equity capital, and in 2013 was one of 10 finalists at the Accelerate Michigan Innovation competition in Detroit. “Any time you have a new source of private capital available to entrepreneurs in our region, it’s great news,” said Charlie Rothstein, the senior managing director at Farmington Hills-based Beringea LLC, which, like Lorient, operates as a hybrid doing both private equity investing and venture-capital investing. “Everyone in the venture community is going to be excited to have another colleague to work with. At Beringea, we’re excited to invest with them and collaborate with them if the opportunity arises,” he said. Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

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

U.S. companies now compete directly with companies abroad. Despite surviving recessions in the 1970s and 1980s, “nobody in Michigan was contemplating General Motors and Chrysler filing for bankruptcy until it happened,� Grimes said. “One of those guys easily could go out of business sometime in the next 20 years, too. ... (Kellogg in) Battle Creek — they could get bought up and moved.� If a major corporation were to leave, he added, all of the services that company supports would fall away, too — local property tax revenue, payroll and income taxes, property values, philanthropic contributions. “It’s a bad thing, no question,� Grimes said.

Pluses and minuses The existence of company towns can partially be explained this way: Companies that come to dominate a local economy tend to pay higher wages — something smaller cities and rural counties often find attractive, Grimes said. A smaller town that has one major employer isn’t likely to land another, he said, so communities try hard to hold onto them. Grimes said he doesn’t know of many smaller towns landing large companies these days, adding that many knowledge-based firms in particular prefer to locate in bigger metropolitan areas with more transportation options and a larger talent pool. For company towns that have a sizable employer paying higher wages, it also can make it harder for a community to attract other businesses that don’t pay competitive wages, Robey said. Where small towns can win, he said, is in their flexibility and their relative ease at bringing the big players to the table to negotiate a deal compared to larger cities. On the flip side, Robey added, smaller towns might be more riskaverse and have a harder time drumming up the capital resources needed for big projects.

“Every town, municipality, village, region should be concerned about their employer base.� Jim Robey, W.E. Upjohn Institute for Employment Research

“Major employers here are regularly contacted by economic developers� from other places, he said. “Every town, municipality, village, region should be concerned about their employer base." The biggest factors affecting workplace decisions today are talent and real estate, Robey said. To be competitive, he suggested communities take stock of their available workforce and buildings. Municipalities should act more as a partner than a roadblock, he said, especially when it comes to infrastructure or other business needs that could ultimately affect the cost of doing business in a particular place. But, he added: “I don’t mean that you give them the farm.�

Cities that rebound In 2014, the Federal Reserve Bank of Chicago published a report from a years-long study called the Industrial Cities Initiative, which looked at ways 10 Midwestern cities have rebounded from manufacturing job losses. The bank covers Michigan’s Lower Peninsula, along with Iowa and parts of Wisconsin, Illinois and Indiana. Grand Rapids and Pontiac were profiled as part of the project. Researchers weren’t able to pinpoint a factor or factors that worked consistently in multiple cities, so there’s no silver-bullet conclusion that could serve as the starting point for a community looking to jumpstart its industrial recovery. Yet several characteristics emerged of cities that do it well — namely, leaders who are connected to a bigger economic vision and

strategy for the city; a greater awareness of the need for regional solutions; and a general openness to racial and socioeconomic diversity, the report shows. “The way we used to think of it was you had your economic development professionals, and the holy grail of economic development was job creation. It was simply counting those jobs, without a whole lot of thought toward quality or sort of sustainability,� said Susan Longworth, senior business economist with the Chicago Fed and a leader on the project. “And then you had your community development folks who were really concerned with the quality of life� aspects of a place, Longworth said. “The line between those two disciplines is much more blurred for a lot of these places, and they have to work together.� In more than one city, researchers heard stories about business, municipal and community college leaders acting as “sort of the R&D department for many of these businesses when they needed to implement a new technology,� Longworth said. In Green Bay, Wis., for instance, a team deconstructed the papermaking process used by a paper mill and discovered they had pieces that could serve the wind turbine industry, she said. Leaders in Cedar Rapids, Iowa, began to link their city to the creative corridor in Iowa City, roughly 30 miles to the south and the home of the University of Iowa.

Woman-owned biz gains outpace U.S. average Metro Detroit ranks 2nd among major U.S. cities in growth percentage By Dustin Walsh dwalsh@crain.com

Metro Detroit and the state of Michigan are outpacing the national average in growth of woman-owned companies, according to a report released last week. Michigan ranks fourth in the nation, increasing 56.9 percent between 2007 and 2016 to 389,800 firms, according to the study by American Express OPEN. The state far outpaced the national average of 45.2 percent growth during the same period. Nationally, the number of woman-owned firms has grown five times faster than all other business, which increased by 9 percent between 2007 and 2016. Woman-owned businesses in Michigan employ 252,200, not

including their owners, up 3.2 percent since 2007, pointing to a significant increase in small firms with no or only a few employees. Revenue for the state’s woman-owned firms has grown more than 49 percent since 2007 to $46.1 million, the 10th-best increase among all 50 states and Washington, D.C., according to the study. Metro Detroit has seen even more impressive growth in woman-owned businesses since 2007, growing the number of companies more than 121 percent to 256,400 this year. Those firms generate revenue of $25.1 million, a nearly 64 percent increase, and employ 151,800, a nearly 25 percent increase since 2007. Metro Detroit ranks second among major U.S. cities in growth percentage of woman-owned firms.

A F e e - O n l y We a l t h M a n a g e m e n t G r o u p

Regional thinking So what does that mean for a company town — especially one that lost its dominant employer? In Longworth’s view, a shift toward regional thinking about economic development is crucial. That kind of shift requires coordination and doesn’t happen overnight, she said, but rather is precipitated by a “pain point,â€? such as a factory closure. “The decision to stay or to leave is not a personal one anymore. It’s one driven by economics,â€? she said. “The eventual decision was quite a surprise and often served as a wake-up call for many of these places that were going along. And why wouldn’t they? Things were good. “Some of those lessons were hard-learned, and the (places) that are sort of thriving ‌ (are) the ones that are very proactive in thinking about their economy and in thinking about the region.â€? In Michigan, cities like Greenville are moving in this direction. The city, and Montcalm County shortly thereafter, signed contracts with Grand Rapids-based economic development agency The Right Place Inc. to begin to market the city as part of the larger West Michigan region. Not even two years later, that contract already has yielded a $140 million investment from a Chinese aluminum wheel manufacturer that plans to employ close to 300 people in Greenville. Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 1 , 2 0 1 6

USS DETROIT FROM PAGE 3

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days, Andrews said, because the commissioning date is nearing and because the USS Milwaukee, a littoral combat ship in the same class as the Detroit, visited the city’s port in November. “We’re getting companies now to come to the table that needed more background or evidence,” she said. “It’s not small dollars.” GM and Ford Motor Co. both are interested in heavier involvement, Andrews said. Up to 4,000 people are expected for the official ceremony, which will formally mark the Navy’s acceptance of the USS Detroit, a $360 million LCS, into the fleet and the point at which the vessel’s captain takes official command. There are receptions, luncheons and breakfasts that the Navy League is seeking to have underwritten by corporate sponsors, said Peracchio, owner of Grosse Pointe Shores-based Peracchio & Co. LLC, an automotive-focused intelligent transportation systems consultancy. He’s been a Navy League member for more than 30 years and also serves as the group’s historian. The local Navy League chapter also is planning a number of events in the weeks and months leading up to the commission week, he said. The details of those events haven’t been disclosed. One thing that is known is that USS Detroit’s crew of about 50 sailors will receive Shinola leather goods emblazoned with the ship’s crest, Peracchio said. They won’t receive watches because the Navy limits the value of gifts that can be given to sailors for such events. The commissioning ceremony is tentatively scheduled for Sept. 17, with a week of events, parties, and tours in the days prior. The actual date for the ceremony has moved a number of times because the Navy cannot make the vessel available until construction and testing is complete, Peracchio said. After the crew arrives at the vessel’s Wisconsin shipyard from San Diego this month, the USS Detroit will conduct sea trials and testing in Lake Michigan, he said. “They have to run through each of these certifications and meet them within certain periods of time to get accepted into fleet,” he said. The 378-foot, 3,500-ton Freedom-class vessel was built by the Marinette Marine Corp. shipyard on the Menominee River in Marinette, Wis. U.S. Sen. Carl Levin’s wife, Barbara, broke a bottle of champagne across the bow to formally christen the ship on Oct. 18, 2014. Construction began in November 2012. The ship will become part of the U.S. Pacific Fleet based in San Diego. However, it will be forward-deployed out of Singapore between the Pacific and Indian oceans at the southern tip of Malaysia — always a potential hot spot because a significant portion of the world’s oil moves through the straits. The Freedom class littoral combat ships, of which the USS Detroit

Michigan at sea The littoral combat ship USS Detroit will be commissioned in September. The U.S. Navy has three other vessels with Michigan-related names commissioned, nearly ready for service, or in service: USS Carl M. Levin: A naming ceremony is scheduled April 11 on the riverfront near the RenCen for the 9,300-ton, 510-foot Arleigh Burkeclass destroyer, to be named for the state’s longtime U.S. senator from Detroit who spent 36 years on the Armed Services Committee. The $644.3 million ship will be built at the Bath Iron Works in Maine and is scheduled for commissioning in 2020. USS Gerald Ford: The $13 billion, 100,000-ton nuclear-powered aircraft carrier, named for the Grand Rapids-bred U.S. president, will be the first in a class of 10 massive vessels once it is commissioned this summer. It will have 4,300 crew members and carry 75 or more aircraft. It has been under construction since 2009 at the Newport News Shipbuilding yard in Virginia. USS Michigan: The Ohio-class nuclear-powered guided missile submarine was commissioned in 1982. Its home port is Bangor, Maine.

is the seventh, cost an average of $360 million. The Detroit was part of a contract awarded in 2004 to a consortium led by Bethesda, Md.-based Lockheed Martin Corp., a minority owner in Marinette (which is majority owned by Fincantieri-Cantieri Navali Italiani S.p.A., which builds many of the world’s cruise ships). The Detroit was designed by Arlington, Va.-based naval architect Gibbs & Cox Inc.

Shallow-draft littoral combat ships operate in coastal areas (known as the littoral in geographic nomenclature), and ships in Detroit’s class could fight the modern pirate threat in places such as off Somalia’s long coast or other threats in the Pacific islands. A shift in U.S. naval priorities in the past couple of years, including a pivot to a focus on the Asia-Pacific region and a debate over the size of the Navy, has led to a changing role for the littoral combat ships. Now, their primary duties are searching out and disarming sea mines and submarines, delivering small groups of Marines or SEALs ashore, and battling small boats such as the skiffs and speedboats that sometimes swarm ships. The Detroit and its sister vessels use a remote underwater vehicle and sensors to find lurking enemy submarines. Littoral combat ships are designed to be fast and quiet. They can travel at speeds up to 45 knots, or nearly 52 mph. Rather than propellers, they use water jets, giving the ship the ability to turn on a dime. Lockheed Martin said the Detroit’s two diesel engines create 17,370 horsepower, or the same as 275 Ford Mustangs. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 1 , 2 0 1 6

GALLERIA FROM PAGE 3 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 or shill@crain.com 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) 657-2204 or lvanhulle@crain.com Dustin Walsh, senior reporter Covers the business of law, auto suppliers, manufacturing and steel. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits, services, retail and hospitality. (313) 446-1694 or swelch@crain.com ADVERTISING Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Advertising Director Matthew Langan Senior Account Manager Katie Sullivan Advertising Sales Gerry Golinske, Catherine Grace, Joe Miller, Diane Owen, 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 Editorial Assistant Nancy Powers Production Manager Wendy Kobylarz Production Supervisor Andrew Spanos CUSTOMER SERVICE Main Number: Call (877) 824-9374 or customerservice@crainsdetroit.com Subscriptions $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or (877) 824-9374. Single Copies (877) 824-9374 Reprints (212) 210-0750; or Krista Bora at kbora@crain.com To find a date a story was published (313) 446-0406 or e-mail infocenter@crain.com Crain’s Detroit Business is published by Crain Communications Inc. Chairman Keith E. Crain President Rance Crain Treasurer Mary Kay Crain Executive Vice President/Operations William A. Morrow Executive Vice President/Director of Strategic Operations Chris Crain Executive Vice President/Director of Corporate Operations KC Crain Vice President/Production & Manufacturing Dave Kamis Chief Financial Officer Thomas Stevens Chief Information Officer Anthony DiPonio G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except for a special issue the third week of November, and no issue the third week of December by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Entire contents copyright 2015 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is strictly prohibited.

locations and doing the right things to get the effect you want, which is to lease them up,� Friedman said. “It’s not as simple as saying you’re going to renovate a building; you’ve got to renovate it with what people want in a market.� Friedman, whose company has about 15 million square feet under management and ownership, says his company has “a pretty good eye for that.� Next up: The Galleria, which had been owned by Southfield-based Nemer Property Group but has suffered mightily the last several years. Nemer did not return a voicemail seeking comment on Thursday. According to New York Citybased Trepp LLC, Nemer had been in default on a $89.6 million mortgage, the note for which was sold in September at a substantial discount. The balance before the sale was $81.52 million and it sold for about $34.95 million, representing a 57 percent loss of $46.57 million. Annual revenue fell nearly 30 percent between 2008 and 2014, from $18.55 million to $13.01 million, according to Trepp. Net operating income fell 38.3 percent from $9.52 million to $5.87 million. “It did very well for many years serving the needs of large firms� like IBM, said Steve Morris, a longtime office broker who is now managing principal of Farmington Hills-based Axis Advisors LLC, which has office space in the Friedman headquarters building on 12 Mile Road. “And we are now in a period, the last 10 years, where companies are densifying, taking smaller spaces. A lot of buildings were lost (to lenders) three, four, five or six years ago because they couldn’t compete with cheap office space. It was a very good landlord with an immaculate reputation who had a good ride for a very long time. But there was downsizing, and people were able to find less costly alternatives.� Most recently in August 2013, the property was appraised at $49 million, down 56 percent from a $112 million appraisal in October 2006, just before the loan from General Electric Capital Corp. of Norwalk, Conn.,was issued.

Office space Some recent wins in the suburban office market for Farmington Hills-based Friedman Integrated Real Estate Solutions LLC, including properties that Friedman owns outright, owns jointly with others and/or has management and leasing contracts on: Galleria Officentre, Southfield Acquired: March 2016 Onyx Building, Southfield Acquired: August 2014 Arboretum Office Park, Farmington Hills Acquired: February 2014 North Troy Corporate Park, Troy Acquired: June 2012 26711 Northwestern, Southfield Acquired: March 2012 Laurel Office Park II, Livonia Acquired: December 2010 Laurel Office Park I, Livonia Acquired: July 2010 Oakland Technology Park Acquired: February 2010

Sources: Friedman Integrated Real Estate Solutions LLC, Farmington Hills; CoStar Group Inc., Washington, D.C.

The loan’s special servicer was C-III Asset Management LLC of Irving, Texas, according to Trepp. Friedman’s new work on the Galleria, which recently netted a 40,000-square-foot lease for Sandler

& Travis Trade Advisory Services Inc.

from Farmington Hills, is par for the course, said Paul Choukourian, managing director of the Southfield office of Colliers International Inc. “David has done a great job picking up buildings at low prices, improving them and making them more attractive to the marketplace,� he said. “He’s done a nice job leasing and managing them,� Choukourian said. “He’s got the ability to improve these buildings, and they deserve it. They are all well located and they are due for renovations, but the previous owners were in situations where they couldn’t justify putting the money in.� The four-building complex was built in 1983.

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

INDEX TO COMPANIES

These companies have significant mention in this week’s Crain’s Detroit Business: Agritek Industries ...........................................17, 19

Kellogg ...................................................................10

Bissell Homecare ................................................. 15

Kelly Services ....................................................... 15

Commercial Alliance LLC ................................... 25

Lorient Capital .......................................................3

Covisint ................................................................ 23

Michigan Business Alliance .................................. 1

Credit Union One ................................................ 25

Michigan Credit Union League ......................... 25

Denso Manufacturing Michigan ........................ 12

Michigan Defense Center .....................................7

DFCU Financial Credit Union ............................ 25

Montcalm Community College ......................... 14

Domino’s Pizza ..................................................... 15

Motor Parts Federal Credit Union ..................... 21

Dow Chemical ...................................................1, 15

Munetrix ...........................................................17, 18

Edward Lowe Foundation .................................. 17

Navy League of the United States ......................3

EJ Group ................................................................. 9

Penske Automotive Group ................................. 15

Fifth Third Bank ................................................... 21

Perrigo ................................................................... 15

Friedman Integrated Real Estate Solutions ......3

Quicken Loans ........................................................3

Galleria Officentre .................................................3

Sims Design Group Associates ........................ 24

GM Holden ............................................................ 15

W.E. Upjohn Institute for Employment Research . 26

Herman Miller ....................................................... 15

Whirlpool .............................................................. 12

Inst. Research on Labor, Employment, Economy . 26

Zoup! Systems LLC ............................................. 17

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30

WEEK Detroit to star in new, edgier Pure Michigan ad

T

he newest Pure Michigan TV commercial — this one starring Detroit — was to debut before the start of Sunday’s Detroit Tigers game at Comerica Park, the state’s tourism agency said Friday. Travel Michigan planned to release more details about its Detroit campaign on Sunday, but officials have called the 30-second ad more visually edgy than usual Pure Michigan spots. Actor and Michigan native Tim Allen, the voice of the Pure Michigan campaign, will also narrate the Detroit commercial. Travel Michigan, a division of the

Michigan Economic Development Corp., has said it plans to highlight

Detroit’s post-bankruptcy comeback this year.

COMPANY NEWS

The Novi-based Kroger Co. of

Michigan said it plans to invest

$180 million in the state during 2016 through the addition of three marketplace stores — in Royal Oak, Shelby Township and White Lake Township — and six new fuel centers, plus updates and additions to 11 existing stores. Kroger said it also plans to expand Clicklist, the online ordering/in-store pickup service it launched in Michigan in December, to 22 state locations. An investment of more than $2 million is planned at the Green Oak Village Place retail center in Brighton to prepare 23,000 square feet of space for T.J. Maxx as a new anchor tenant. Southfield-based Redico LLC and Bloomfield Hills-based Lormax Stern Development, the center’s owners, plan a 7,000-square-foot expansion and interior renovations to the spaces previously occupied by Old Navy and Justice. The Detroit Tigers ranked fourth in this year’s Major League Baseball fan support index released by New York City-based market research firm Brand Keys Inc. In another survey, published by the Chicago-based Team Marketing Report, the cost of taking family or friends to a Tigers game remains in the middle of the pack within MLB. The report said the average cost for a trip to Comerica Park for four comes in at $214.52, up from last year’s $213.03; the average for MLB’s 30 clubs this season is $219.53. At an invitation-only event at the old Packard Plant site in Detroit, The Display Group Ltd. formally rolled out its new DG3D Creative Studio, for which it spent about $750,000 in 3-D design and production equipment, company President Rick Portwood said. Visteon Corp. is preparing to

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 1 , 2 0 1 6

ON THE WEB APRIL 2-8

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

1,300 The number of employees to be laid off by FCA US LLC at its Sterling Heights assembly plant in July. The automaker is eliminating a shift due to slow sales of the Chrysler 200 sedan.

$148,000

The median sale price of homes in Wayne, Oakland, Macomb and Livingston counties in March, up $8,000 from last year, according to Farmington Hills-based Realcomp Ltd. II. Home and condo sales in the counties rose from 3,964 in March 2015 to 4,244 last month.

27

The number of apartments to be created in a $6 million redevelopment of the 20,000-square-foot James Scott House in Detroit. The apartments are expected to fetch between $650 and $800 per month.

battle its former president and CEO Tim Leuliette in court over his retirement compensation package. The Van Buren Township-based auto supplier requested a jury trial against Leuliette on March 31 in U.S. Tim Leuliette:

Headed for court District Court for with old company. the Eastern District of Michigan after

Leuliette initiated an arbitration proceeding in February, court documents said. Norwegian aluminum component supplier Sapa Group opened an R&D center in Troy. The Oslo-based firm, operating as Sapa Technology Americas LLC, invested $3 million into the 10,000-squarefoot center, which will develop extruded aluminum parts for the automotive industry. San Diego-based clinical laboratory company Accumen Inc. acquired lab services company Chi Solutions Inc. of Ann Arbor. Details were not disclosed. Karamba Security, a startup cybersecurity firm based in Ann Arbor and Tel Aviv, Israel, announced it has raised a seedstage funding round of $2.5 million to develop its connectedcar technology to thwart hackers. The Container Store is coming into Michigan with stores in Novi and Troy. Scheduled to open June 4, the 22,000-square-foot Novi

location will be the Texas-based retailer’s first in the state. Detroit-based Lutheran Social Services of Michigan, an 80-year-old nonprofit that is one of the state’s largest social service and refugee resettlement agencies, said it has changed its name to Samaritas to reflect its broad reach. The West Bloomfield Township-based Dresner Foundation made a $3.5 million gift to the Michigan Humane Society to support operations at its new animal care campus in Detroit. The society said it has named the $15.5 million center the Dresner Foundation Animal Care Campus. Officials for Detroit-based Henry Ford Health System and Allegiance Health in Jackson finalized the merger agreement to bring the 475-bed Jackson-based hospital into the system as Henry Ford Allegiance Health. The addition will create a six-hospital Henry Ford system with $5.2 billion revenue, the largest by revenue in Southeast Michigan. The Toyota Research Institute announced it will open an autonomous vehicle research base in Ann Arbor in conjunction with the University of Michigan, Automotive News reported. It’s Toyota’s third U.S. facility tied to universities specializing in artificial intelligence and selfdriving vehicles, joining centers with MIT in Cambridge, Mass., and Stanford University in Silicon Valley.

OTHER NEWS Six current and former

principals at Detroit Public Schools were arraigned in federal court on charges of conspiracy to commit bribery, AP reported. Also, Gov. Rick Snyder was named in a federal lawsuit filed by the Detroit school board that, in part, blames the district’s financial troubles on Michigan’s emergency manager law. Wayne County has a budget surplus for the first time in eight years following extensive efforts to improve its financial standing, officials said. The office of county Executive Warren Evans said that for the fiscal year ending Sept. 30 it had an available general fund surplus of $5.7 million. The Children's Hospital of Michigan Foundation is giving a $135,000 grant so Detroit Public Schools, charter schools and early childhood facilities can test their drinking water for lead. The Detroit Health Department will reimburse for the lab testing through funds from the grant. M-1 Rail (QLine) construction is expected to halt foot and car traffic for six weeks on northbound Woodward Avenue at West Grand Boulevard starting April 15.

OBITUARIES Roman Gribbs, a former

Detroit mayor (1970-74) and retired Michigan Court of Appeals judge, died April 5. He was 90.

RUMBLINGS Ford expected to lease space at Fairlane

F

ord Motor Co. is expected to lease the former Lord & Taylor

department store space in

Fairlane Town Center in Dearborn for

engineers and development employees, according to multiple sources. All told, the Dearborn-based automaker plans to take 220,000 square feet in the mall, with about 120,000 of that being in the two-story former department store with 60,000-square-foot floor plates and another approximately 100,000 square feet in the attached portion of the mall, sources said. Build-out is expected to begin, and employees are expected to start occupying the space, by the end of the year, according to sources. Representatives from the mall’s owner, Greenwich, Conn.-based Starwood Capital Partners Inc. did not immediately return messages seeking comment Friday morning. Dawn Booker, communications manager for Ford Land Development Corp., the real estate arm of Ford Motor Co., confirmed a lease at Fairlane but provided no other details.

Roostertail owners to mark 50 years of planning parties Roostertail owners Tom and Diane Schoenith and 500 of their

closest friends are set to attend a invitation-only party Tuesday to celebrate the 50 years of fundraisers and events the couple have planned and to show the next generation how it’s done. Tom Schoenith said the couple’s generation has lived through the Detroit riots, depressions, bankruptcies and many mayors, but it has also lived through the good periods, such as the rise of Motown music and advent of the Michigan Opera House and Orchestra Hall. The “Fifty Years of Parties” event will celebrate the good times and “pass the baton” to the next generation, he said. The Schoeniths opened the Roostertail on Detroit’s east riverfront in 1958, two years after Tom and Diane began planning parties. But the events took place across the city. They ranged from a Supremes performance at the Roostertail, which Schoenith said broke the color barrier at the time; to a fundraiser at Chrysler’s Viper plant for the Barbara Ann Kamanos Cancer Institute; to Tom Monaghan’s

Drummond Island party in 1987 and Conway McKenzie’s lavish 25th anniversary party in 2012; and Tom Schoenith’s own Gatsby-themed, 70th birthday

party at the Roostertail (replete with a swimming pool built in the parking lot and tuxedo-clad guests swimming in it). This time around, Schoenith said he and his wife don’t want to worry about the food and booze, and they want to invite the Roostertail’s upper management to attend. The event, as it turns out, is also a fundraiser. In lieu of a ticket fee or gifts, the Schoeniths are asking guests for contributions to the Detroit Historical Society.

Chicago firm hired to study Detroit’s east riverfront Chicago-based Skidmore, Owings & Merrill has been hired by the Detroit RiverFront Conservancy and the Detroit Planning Department to

create a plan intended to guide investment and development of the city’s east riverfront. The conservancy announced the hiring last week. A cost wasn’t disclosed. The organization did say six local firms will provide consulting services and advice: Birminghambased McIntosh Poris; Detroit-based Giffels Webster; Detroit-based Kraemer Design Group; Detroit-based AKT Peerless; Southfield-based Rich & Associates; and West Bloomfield Township-based E. Austell Associates. Skidmore, Owings & Merrill, which dates to 1936, has been hired to “evaluate various conditions, including building stock, land-use patterns, major historic and cultural assets, and transportation operations on the corridor,” the conservancy said in a statement. Also addressed will be the lack of a direct connection for vehicles and pedestrians to the east riverfront area from I-375. The Michigan Department of Transportation said last week that it’s giving the conservancy $200,000 to link its ongoing study of the future of I-375 to the east riverfront project. There is some consideration for reconstructing the highway as a surface street, but the state in January indefinitely delayed any decision on its corridor study pending the results of the east riverfront plans and other ongoing development in the area. Skidmore, Owings & Merrill was one of six firms that pitched its expertise to the conservancy in January to design a plan to redevelop the 400-acre, 2-mile stretch of land east of downtown between Jefferson Avenue and the Detroit River. The plan is expected to be completed by August. The first public meeting to discuss the plan is slated for 6-8 p.m. Tuesday at Outdoor Adventure Center, 1801 Atwater St.

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