Crain's Detroit Business, May 16, 2016 issue by Crain's Detroit Business

Ultrasonic breast cancer detection device headed to market, Page 3

MAY 16-22, 2016

Big plans where projects once towered

Putting autism to work

Brewster-Douglass redevelopment is largest for Amin Irving’s Ginosko By Kirk Pinho kpinho@crain.com

When Amin Irving’s mother, a teacher education professor at Michigan State University, died in 1995 two months after he graduated from East Lansing High School, his real estate career was born. It’s been more than two decades since he sold his mother’s 1,200-square-foot home on Abbot Road south of Saginaw Street, and now Irving, 39, is embarking on his largest ground-up construction plan to date: a $267 million project as part of a joint venture to develop 900 to 1,000 of mixed-income housing units on the site of the former Brewster-Douglass housing projects and in Eastern Market. Such a mixed-income project 80 years ago, when first lady Eleanor Roosevelt dedicated Brewster-Douglass as the first federally subsidized public housing open to African-Americans, would have

been unheard of as the poor then were corralled into concentrated areas. While he may not be a household name like Dan Gilbert, one of the other Choice Detroit LLC development partners, Irving has racked up a steady string of low-income housing developments in acquisitions since founding his Novi-based Ginosko Development Co. in 2003. So his involvement should come as little surprise. Irving, the father of three young children, has been well respected in the affordable housing field for years, said Andy Daitch, senior vice president of investments for Affordable Housing Advisors, the Southfield-based low-income housing brokerage arm of Marcus

& Millichap Real Estate Investment Services Inc.

“I think the city is in good hands

SEE GINOSKO, PAGE 16

JACOB LEWKOW

Amin Irving’s Ginosko Development Co. has racked up a steady string of low-income

Steven Glowacki has three degrees, an IQ of 150 and knocked his CPA exam out of the park. But he can’t find a job. PHOTO BY LARRY PEPLIN

Disorder’s growing population seeks place in job market By Dustin Walsh dwalsh@crain.com

Steven Glowacki has a beautiful mind. It’s being wasted. Glowacki, 35, earned three degrees — a bachelor’s in mathematics and master’s in mathematics and accountancy — and has an IQ near 150. He scored a 1520 on the SAT, placing him in the 99th percentile, in eighth grade. He passed the certified public accountants exam with 95 percent accuracy — well above the national average of 71.9 percent. Yet he can’t accrue the 2,000 hours of work experience required to earn his CPA license. Glowacki is unemployed and lives with his mother in Sterling Heights, who isn’t able to retire because she’s supporting her adult son. Glowacki has autism. Colleen Allen, president and CEO of the Southfield-based Autism Alliance of Michigan, said Glowacki represents a growing

Autism facts What it is: Autism spectrum disorder and autism are general terms for a complex disorder of brain development characterized by varying degrees of difficulties in social interaction, verbal and nonverbal communication and obsessivecompulsive behaviors. Prevalence: One in 68 children in the U.S. is diagnosed with autism. As many as 3.5 million people live with autism in the U.S. Unemployment: Estimated at 75 percent to 90 percent for adults with autism nationally. Annual economic impact: $268 billion in 2015, growing to $461 billion by 2025.

population of highly intelligent adults living in a world that doesn’t understand them — among employers that won’t

hire them. An estimated 75 percent to 90 percent of adults with an autism spectrum disorder are unemployed, and the majority want to work. “Steven is wasting away,” said Allen, president and CEO of the Autism Alliance. “He’s brilliant, but employers can’t see past his disorder — and he’s not alone. We’re inducing poverty and a poor quality of life for people that can contribute ... in big ways.” Autism represents a clear human toll. But a hefty economic avalanche is looming as more and more of those diagnosed reach working age. It’s imperative that employers in Southeast Michigan, and the U.S., adapt or miss out on a productive population with specialized skills, Allen said. Autism is already a staggering cost and is growing — estimated at $268 billion annually in the U.S. on treatment and loss of SEE AUTISM, PAGE 18

housing developments and brings that expertise to the Brewster-Douglass project.

Merging medical, mental health care

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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 // M A Y 1 6 , 2 0 1 6

MICHIGAN

BRIEFS Travel Michigan promotes ‘Lake Effect’ in ad campaign

Travel Michigan wants visitors to spend a day at the lake. The state’s tourism agency is kicking off its summer advertising season with a new campaign, “Lake Effect,” which will play up the state’s inland and Great Lakes. The roughly $7 million summer campaign will be supported with advertising on TV and radio, billboards and buses, according to Travel Michigan, a division of the

Michigan Economic Development Corp. Travel Michigan manages the

Pure Michigan branding campaign. “Lake Effect” builds off Travel Michigan’s recent marketing campaigns that promote lifestyle activities, rather than geographic destinations — including craft beer and farm-to-table food in the spring, Travel Michigan said. Pure Michigan radio ads will air in Midwestern markets in conjunction with national and regional tourism industry partners. In other state-improvement news, Gov. Rick Snyder and Chinese government leaders last week

agreed to partner on efforts to increase trade between Michigan and China. Snyder and officials with the Chinese city of Shenzhen launched the Michigan-Shenzhen

Trade, Investment and Innovation Cooperation Center, intended to help

the state attract Chinese business investment, boost exports and collaborate with China on product development and innovation.

Flint mayor denies water-fund allegations Flint Mayor Karen Weaver last week denied allegations that she was using the city’s water crisis to get cash for a political fund. Former city administrator Natasha Henderson filed a lawsuit May 9 in U.S. District Court in Detroit, claiming she was dismissed for being a whistleblower after reporting that Weaver was trying to steer donations to a campaign fund instead of a charity for families with lead-tainted water. Weaver responded by saying Henderson is making “outrageously false claims,” The Associated Press reported. Henderson said she was fired af-

ter asking the city attorney’s office to investigate claims Weaver may have been telling city staff and volunteers to send potential water crisis donors to her personal fund, named “Karenabout Flint,” rather than the fund managed by the Community Foundation of Greater Flint. In other Flint water crisis news: n Michigan lawmakers reviewing the lead contamination of Flint’s drinking water supply will turn to proposing recommendations, including changes to the state’s contentious emergency manager law, after two months of investigative hearings concluded last week, AP reported. The committee wrapped up without calling to testify Gov. Rick Snyder and some other key figures, including any of Flint’s emergency managers. n Ten foundations are acknowledging that the “Flint water crisis is far from over” by giving almost $125 million to help the city cope with health challenges, lagging economic development and implementing consistent early childhood education. The Detroit-based Skillman Foundation and Troy-based Kresge Foundation are among the initial supporters, with more partners expected to announce support soon. n The state of Michigan will pay all Flint water bills in May to encourage the flushing of lead from old pipes and the recoating of plumbing with an anti-corrosion chemical, AP reported.

MICH-CELLANEOUS n Wyoming, Mich.-based Gor-

don Food Service has agreed to pay $1.85 million and stop using what was deemed by the federal government an illegal strength test when hiring women, AP reported. The U.S. Department of Labor announced that the company has agreed to give back wages, interest and benefits to 926 qualified women seeking warehouse employment who were “systematically discriminated against,” with the company being ordered to hire 37 women. n Trustees for Ferris State University approved the addition of a doctorate of nursing practice and — perhaps more notably — an associate degree in brew management, MLive.com reported. The doctorate program is designed to take three years and be online and part time. The new associate degree of applied science in professional brew management is expected to fill an industry need and, according to a university official, “provide entry into one of the fastest-growing segments of the restaurant industry.” n Michigan State University is getting $15 million for its new $88.1 million biomedical research center in Grand Rapids ahead of a planned 2017 opening, AP reported. The university announced that Richard and Helen DeVos are giving $10 million for the Grand Rapids Research Center, and Peter and Joan Secchia are donating $5 million. In

INSIDE THIS ISSUE

BANKRUPTCIES ................................. 4 CALENDAR .........................................14 CLASSIFIED ADS...............................15 DEALS & DETAILS.............................13 KEITH CRAIN....................................... 6 MARY KRAMER .................................. 6 OPINION .............................................. 6 PEOPLE ...............................................14 RUMBLINGS .......................................19 WEEK ON THE WEB ..........................19

COMPANY INDEX: SEE PAGE 17 other MSU news, a Spartan-green-painted locomotive that was used to pull coal cars at the power plant on the East Lansing campus is for sale at the university’s surplus store, according to the Lansing State Journal. The university is now coal-free, and the train engine isn’t needed any longer, a store manager said. n Pregis Films, an Illinois company that acquired Eagle Film Extruders of Grand Rapids last year, announced it will bring 50 jobs and $17.1 million in investment to the company’s production facility in Grand Rapids, MLive.com reported. The investment will enable Pregis to open a production line that will increase capacity to meet customer demand. Eagle Film Extruders is a major supplier of packaging and sealant films used in the packaging industry.

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Sales near for ultrasonic breast cancer detector By Tom Henderson thenderson@crain.com

Delphinus Medical Technologies Inc. is about to graduate. And, after 17 years of research and development and three rounds of venture capital totaling $58.5 million, it will start selling its first devices for ultrasonic detection of breast cancer. Delphinus has been a tenant since 2010 in the Plymouth Township-based

Michigan Life Science and Innovation Center, a tech incubator in a former Pfizer Inc. facility that is owned by the Michi-

gan Economic Development Corp.

According to Mark Forchette, the company’s president and CEO, within two weeks Delphinus will move into 21,000 square feet in the former Lee Steel Corp. building in Novi, on Grand River Avenue just east of the Suburban Collection Showplace. He hopes to start selling devices by the end of the year. “This will triple our space, which is fantastic. It gives us an opportunity to expand our lab and our R&D facilities and to expand our head count. We’ve been busting at the seams. This will

give us a much better recruiting environment,” Forchette said. He said the company employs about 45 now, and he hopes to hire 10-15 by year’s end. “It’s good news,” said Fredrick Molnar, the MEDC’s vice president of entrepreneurship and innovation. “That's the way it’s supposed to work. Companies aren’t supposed to stay here forever. They get incubated here and then they move on. That’s the way it was for Esperion, too.” Esperion Therapeutics Inc. and Lycera Corp., two drug discovery companies,

DCFC races to finish stadium work ahead of Friday opener

were original tenants of the innovation center when it opened in 2009. Both have subsequently moved into their own headquarters in Ann Arbor. Forchette said the new facility will have about 7,000 square feet of lab and R&D space. And the new building will allow Delphinus to build a demonstration and training room to teach physicians how to use its devices. Delphinus will be reaching out to physicians at the Radiological Society of North America’s 102nd annual meeting,

BETTING Hazel Park, Northville Downs battle over electronic wagering

bshea@crain.com

SEE DCFC, PAGE 17

SEE DELPHINUS, PAGE 15

At odds over

By Bill Shea

With less than a week until the season opener, the semi-pro Detroit City Football Club is rushing to ensure the renovation of its new home is completed on time. Team co-owner Todd Kropp said 80-year-old Keyworth Stadium, which the club has leased for 10 years from the city’s school district, will see the remaining concrete work finished before DCFC begins its fifth National Premier Soccer League season against Ann Arbor FC at 7:30 p.m. Friday. Damaged concrete at the 6,000-seat stadium is being chipped away and replaced with a new layer, and work also will wrap up by the end of the week on structural patching, concrete re-forming and weatherproofing, Kropp said. Installation of thousands of feet of new wooden bleachers also will be finished before Friday. The club raised $741,250 from fan pledges in a specialized fundraising campaign to pay for stadium work, of which about $720,000 actually came through, he said. Detroit-based Integrity Building Group is the stadium project manager. Keyworth Stadium was Michigan’s first project by the Depression-era federal Works Progress Administration and opened in 1936. Also this week, specialists will clean the stadium’s artificial turf, level the rubber infill pellets that form the field’s base, and replace turf in some areas — especially around the heavy-traffic goals — where the fabric is badly worn, Kropp said. The team expects a decision in the next six months on replacing the field with natural grass after this season. “We’ve had conversations with the school district. Our preference would be to play on a natural grass surface,” Kropp said. “Turf is still an option there. It wouldn’t be our first choice. We know that the field is well past its lifespan.” Some of the top European clubs require a grass field, which would limit future opponents, he added, if Keyworth remains with artificial turf for the long term. Any decision on the future of the playing surface will also take into account the

Mark Forchette: “Investors are very supportive.”

By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

Split decision: In the backdrop of efforts to shore up Michigan’s beleaguered racing industry is the question of how to split purses between the two remaining tracks: Northville Downs (top) and Hazel Park Raceway.

LANSING — After years of sparring about the best way to split the pot, Michigan’s two remaining horse tracks have found some common ground when it comes to divvying up the money from bets placed on horse races. That consensus, though, hasn’t yet reached other parts of the business that owners of both tracks say will be necessary if the industry is going to be relevant in the 21st century — namely, the introduction of electronic wagering. Past efforts didn’t bear fruit. And now the tracks — Hazel Park Raceway, which holds thoroughbred races, and Northville Downs, which runs standardbred harness races — find themselves on opposite sides of proposed legislation that initially attempted to resolve the issue. Executives at Northville Downs say the bill as written is a nonstarter, even after a controversial provision that would have allowed some Internet-based wagering at the tracks was stripped from the bill on the Senate floor. In response, Hazel Park Raceway and its affiliated horsemen’s group, the Howell-based Michigan Horsemen’s Benevolent and Protective SEE HORSES, PAGE 16

MUST READS OF THE WEEK Mackinac marquee

Motor City’s Silicon Valley moment

Mona Hanna-Attisha, the physician who

Mary Kramer: Rise of the

helped bring Flint’s water crisis to light, is

connected car is Detroit’s chance

among the headliners at Mackinac Policy

to incorporate tech industry DNA, Page 6

Conference, Page 7

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

New law intends to help firms protect trade secrets By Dustin Walsh dwalsh@crain.com

â&#x20AC;&#x153;Our employees come to us with a willingness and true desire to be the best. And that leads to great results.â&#x20AC;? â&#x20AC;&#x201C; Rob MacKinlay, President RQH Ă&#x20AC;UP EHWWHU WRJHWKHU _ FRKHQFSD FRP JKG

U.S. companies are set to find an ally in protecting valuable trade secrets from the federal court system. Both the U.S. Senate and House of Representatives stamped their approval last month on the Defend Trade Secrets Act of 2015 â&#x20AC;&#x201D; a bill that provides civil action in federal courts and stiff penalties for theft of protected information from corporations. President Barack Obama signed the bill last week. Tom Brady, partner and head of the labor and employment practice at Detroit-based law firm Clark Hill PLC, said the impending law creates uniformity â&#x20AC;&#x201D; 48 states currently have versions of the Uniform Trade Secrets Act â&#x20AC;&#x201D; for protecting trade secrets across the nation. â&#x20AC;&#x153;Most states have a version of the trade secrets act, but itâ&#x20AC;&#x2122;s a balkanized treatment to protection,â&#x20AC;? Brady said. â&#x20AC;&#x153;(Trade secret theft) is increasingly a problem as technology expands and outside third parties increase hacking to get those secrets or employees that can now simply put in a thumb drive to download those secrets.â&#x20AC;? Trade secrets differ, and are often less protected, than copyrights and patents. Trade secrets are considered private materials such as manufacturing processes that donâ&#x20AC;&#x2122;t meet the patent guidelines, software, financial information, pricing information, etc. The Defend Trade Secrets Act

ISTOCK

â&#x20AC;&#x153;Most states have a version of the trade secrets act, but itâ&#x20AC;&#x2122;s a balkanized treatment to protection.â&#x20AC;? Tom Brady, Clark Hill PLC

differs slightly from the Uniform Trade Secrets Act in that it allows a plaintiff fearing its trade secrets have been stolen to file a federal court order to allow the government to seize the stolen information before the alleged defendant is notified of a lawsuit â&#x20AC;&#x201D; an ex parte seizure. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t have evidence to support that this happens a lot, but Iâ&#x20AC;&#x2122;d imagine whoever took the trade secret is likely to hide or destroy the (stolen) information to eliminate the proof,â&#x20AC;? Brady said. â&#x20AC;&#x153;Before (the law), the information couldnâ&#x20AC;&#x2122;t be seized until the lawsuit was over.â&#x20AC;? The penalties are also much stiffer under the Defend Trade Se-

crets Act. Plaintiffs can now seek up to two times the damages plus attorney fees, making a high-profile case very costly to the defendant, Brady said. While the law will strengthen enforcement, companies still must ensure they are protecting valuable information to be considered a trade secret, Brady said. â&#x20AC;&#x153;Companies need to start training employees on how to properly protect trade secrets in the first place,â&#x20AC;? Brady said. â&#x20AC;&#x153;Smart companies are going to put notices in their policy manuals and work to keep their secrets secret.â&#x20AC;? Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

Wells Fargo offers up to $100,000 for Smart Cities competition By Tom Henderson thenderson@crain.com

Wells Fargo & Co. is offering up to $100,000 in prize money to five finalists of the NextChallenge: Smart Cities competition, which was announced last week. NextEnergy, a Detroit-based nonprofit that supports advanced energy and transportation technologies; Denso International America Inc.; DTE Energy Inc.; and Wells Fargo put on the competition. The competition aims to find hardware and software technology solutions within the categories of smart parking, smart transportation, smart infrastructure and smart buildings. Innovations should be cloud-connected, interactive and data driven. Or, in the words of the news release announcing the competition: â&#x20AC;&#x153;Imagine a morning commute where your car alerts you of potholes and the nearest available parking spot, pays for parking automatically and signals your office to brew a fresh cup of coffee, turn on your computer and adjust the

thermostat to your preferred temperature. These visions could be closer than you think thanks to NextChallenge: Smart Cities, a global competition to address unmet challenges facing urban areas.â&#x20AC;? â&#x20AC;&#x153;Urban populations are on the rise, which is leading to challenges related to safety, mobility, emissions, accessibility and congestion,â&#x20AC;? said Jean Redfield, president and CEO of NextEnergy, in the news release. â&#x20AC;&#x153;This challenge is designed to identify new innovations to address those issues, with added benefits of identifying technology opportunities that can create new business models and drive economic development.â&#x20AC;? The winner will get up to $80,000 in grant funding from Wells Fargo. An additional combined total of $20,000 will be awarded to as many as four finalists. Those awards and programs at NextEnergy are funded by a $650,000, three-year grant from Wells Fargo.

The deadline for applications online is 11:59 p.m. July 28. Submissions will be reviewed by a panel of judges. Those with the best proposals will be required to submit a more comprehensive proposal by Oct. 4. Finalists will make presentations on Dec. 8, with awards announced in January. A webinar to learn more about the application process is scheduled for 2-3 p.m. June 9. To register for the webinar, go to nextenergy. org/nextchallenge-webinar. For more information about the challenge or to apply, go to nextenergy.org/nextchallenge.

BANKRUPTCIES The following business filed for protection in U.S. Bankruptcy Court in Detroit May 6-12. Under Chapter 11, a company files for reorganization. n ML Auto Center LLC, 5100 Dixie Highway, Waterford Township, voluntary Chapter 11. Assets: $45,000; liabilities: $183,000. Dustin Walsh

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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 // M A Y 1 6 , 2 0 1 6

OPINION

Consider hiring those with special needs

arents of children with physical or developmental disabilities share this anxiety: What is to become of their muchloved children when they become adults? Will they have jobs? Live independently? How will they fare when the parents are no longer there to care for and support them? Parents of adults with autism share those worries. So do nonprofits and government agencies that focus on children and adults with special needs. As Dustin Walsh reports on Page 1, high-performing adults on the autism spectrum could offer employers big benefits, but they often are not hired because of issues with social skills. But smart employers who can see past some of the social issues could reap big rewards. Fortunately, some major employers have been pioneers in creating opportunities for these workers. Walgreen Co.’s distribution center in South Carolina was a model for another facility in Connecticut. Turnover and absenteeism are low; accuracy and productivity are high. Walgreen coached its managers to use language that worked best with that workforce; break rooms have activities designed to calm workers with autism in their off-time. Now Walgreen is coaching other companies to tap the power of hiring workers with disabilities. Such models are worth considering in Southeast Michigan. And public policy could include tax incentives for employers who make the investment.

Review state horse racing laws Technology has changed much in how we live and work — and how many people gamble. It’s time for Michigan policymakers — including lawmakers — to decide how Michigan should balance the forms of legal gambling we have now and the digital forms that exist in other states. There’s a tax-revenue angle to all of this, too. As Lindsay VanHulle reports on Page 3, Hazel Park Raceway is asking the state to pursue online wagering on races as an administrative rule change rather than by statute. Hazel Park and Northville Downs — the only remaining horse racing tracks in Michigan — argue that “advance wagering” online or through an app is an extension of what they already do. Even the Michigan Lottery has online games. But Michigan voters in 2004 approved an amendment to the state constitution that requires a statewide vote for any expansion of gaming. Is online horse betting an expansion? Technology has changed a lot since 2004. The issue deserves a high-level review, including legal and tax implications — and a decision.

Detroit automakers’ mobility could change our collective DNA

etroit’s automakers are looking more and more like Silicon Valley. They’re “mobility companies” now. Ford Motor Co. created a separate Smart Mobility company, led by Jim Hackett, the former Steelcase Inc. CEO who, before that top job at the office furniture maker, had led a separate, upstart company owned by Steelcase. Now history is repeating itself at Ford, which is also overhauling its sprawling legacy real estate in Dearborn to create an ambitious campus to rival anything in Silicon Valley. Meanwhile, General Motors Co. CEO Mary Barra described GM as a “technology company” while speaking at the Michigan Council of Women in Technology annual summit last week at Cobo Center. She repeated her mantra: There will be more change in automotive in the next five years than the last 50. And IT and technology will be at the core. With the purchase of Cruise Automation Inc., GM is planning to test self-driving Chevrolet Bolt taxis within a year. Barra would not predict

MARY KRAMER Publisher

when we all may summon our own vehicles as our driverless chauffeurs. Not to be outdone, Fiat Chrysler is aligned with Google. Suddenly, our homegrown companies that seemed “oldschool” metal-benders not long ago to hot-shot technology whizzes and engineering grads are becoming cool. Which could have implications for our entire region. As Detroit’s legacy industry “reboots” for this century, the implications are huge for our region. New talent coming into the region is one effect. Another is how our industry reshapes transportation, including highways and roads. Yes, some of this early activity is

on the West Coast, but more and more of the hottest technology is coming to Southeast Michigan, where we have testing facilities in Ann Arbor and western Wayne County. I have to think that part of the drive at GM comes from Barra’s exposure to Silicon Valley while earning her MBA at Stanford’s business school. For years, she was on the advisory board for the Graduate School of Business, where she will deliver the commencement address June 11. She’s also on the board of trustees for the entire university. The pace of change within the auto companies is frenetic today for an industry that grew with fiveyear product cycles. The best thing for our region’s economic future is to have that pace, that energy and that technology become more of our own collective DNA. Mary Kramer is publisher of Crain’s Detroit Business. Catch her take on business news at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760 and in her blog at www.crainsdetroit.com.

TALK ON THE WEB Re: Gretchen Valade buys block in Grosse Pointe Farms Hopefully she can bring some

actual useful retail to the area.

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

Cleveland, Milwaukee and Minneapolis, let alone some of the larger cities and more established culinary destinations. Ramirez

K9oBE6NYS

Re: Law firms create dedicated automated-vehicle teams A statement that concerns me is: “In negotiations, what's great is Silicon Valley brings a new way of thinking that I think is an infusion needed in the auto industry. They bring to us a rapid pace of change; they bring to us a little more risk-taking than we’re accustomed to. They bring to us thinking outside the box.” The most significant risk is to human life. When a car becomes an

uncontrolled projectile, there are huge consequences. With the au-

tonomous car, this can become more frequent due to defective logic or equipment which complies with some standard that does not take into account unique circumstances. I’m not sure how a law firm can function unless they assist with developing laws that properly define the consequences when injury or death results form autonomous vehicles. Auto Engineer

Re: Detroit’s rebound helps elevate chefs to celebrity status Detroit’s culinary scene has a long way to go to rival such cities as

There are so many new chefs in the city now, it’s great!

292287

Re: Michigan Senate OKs ban on local regulation of plastic bags This is a prime example of business controlling state government to

overrule the wishes of the those who want to protect their environment. Midland = Dow Chemical = plastics. Maybe we should all ship these plastic bags to Midland. Shame on you, Sen. Stamos. Michael Garrett

Greed and corruption seem to follow the money The one thing that Michigan doesn’t need is more headlines about corruption in the public sector. The Detroit school principals who have admitted to various levels of kickbacks are simply disgusting. The lack of outrage on the part of Detroit residents is nothing short of amazing. A convicted felon who was just released from serving close to a year behind bars for similar shenanigans in Highland Park was quoted as saying, “It is simply so easy to steal from

“Tight contracting procedures are needed anywhere public money is floating around.” KEITH CRAIN Editor in chief

the government.” Meanwhile, federal investigators are looking at potential wrongdoing in the demolition of blighted

homes in Detroit. The mayor denies wrongdoing; a city spokesman refers queries to the city-affiliated Land Bank Authority. No charges have come out of this. But the memory is still fresh of another guy who had city ties and contracts for various construction or demolition work during the Kwame Kilpatrick era. Remember

Bobby Ferguson? He's doing a long stretch in a federal prison. In Flint, where all types of aid dollars are heading from government and individual donors, a former city hall administrator claims she was fired for blowing the whistle on the mayor allegedly trying to steer donations away from a nonprofit to a fund the mayor con-

trolled. News accounts of the whistleblower lawsuit described the fund as a political action committee of the mayor’s. And the mayor has denied the allegations. As residents, we have to be vigilant and demand that the checks and balances are in place to prevent any opportunity for unethical behavior. Tight contracting procedures are needed anywhere public money is floating around. If we are to build strong cities, we have to have an honest workforce representing the public.

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

Flint, DPS crises to lead 2016 Mackinac Policy Conference By Lindsay VanHulle lvanhulle@crain.com

LANSING — The water crisis in Flint is expected to spark conversations about urban policy and aging infrastructure during the upcoming Detroit Regional Chamber’s Mackinac Policy Conference. Urban education — specifically the cash-strapped Detroit Public Schools and a proposed debt restructuring to help the district shed more than $500 million in operating debt — is one of the themes at the conference, which runs May 31 to June 3 on Mackinac Island. About 1,600 people are expected to attend. Yet the public health emergency in Flint caused by lead contamination in drinking water also raises bigger questions about how Michigan invests in its infrastructure, chamber leaders said Thursday while unveiling the conference agenda. “We have a lot to be excited about and proud about in terms of the progress we’ve made in this state,” said Sandy Baruah, president and CEO of the Detroit chamber. “The Flint issue serves as a glaring exception to that narrative.” Mona Hanna-Attisha, M.D., director of the pediatric residency program at Hurley Medical Center in Flint and the physician who first drew attention to elevated lead in the blood of children in the city, will give a “Mackinac Moment” speech on June 1. Conference attendees will have opportunities to donate to the Flint Child Health & Development Fund, which is managed by the Community Foundation of Greater Flint. A national political panel discussion on June 3 — led by former U.S. Rep. Harold Ford Jr., of Tennessee, and former CNN anchor Soledad O’Brien — is also expected to touch on infrastructure and Flint. “What we need to be able to do is talk about Flint in a way that is productive and forward-looking,” Baruah said. The condition of Michigan’s infrastructure underlines a number of panel topics at this year’s conference — from DPS reform, to mobility and connected vehicles, to growing Michigan’s defense industry. “The business community feels that we have been underinvesting in our key infrastructure for quite some time,” Baruah said. “The crisis in Flint and the crisis in DPS are indicative of a lack of infrastructure.” As one of the three conference themes this year, urban education will feature significant discussion about the challenges facing DPS. In Lansing, the House and Senate have floated two different proposals to restructure the district. Gov. Rick Snyder has called for a $715 million plan to split the DPS into two districts, one to repay the debt and the other to educate students and handle all school operations. The plan also would create a Detroit Education Commission to oversee traditional public and charter schools. The Detroit-based Skillman Foundation will lead a session on the

morning of June 1 highlighting DPS reform, the chamber said. The Battle Creekbased W.K. Kellogg Foundation and the Troy-based Kresge Foundation

will host a lunch Sandy Baruah session June 2, discussing business’ role in investing in early childhood education. Kati Haycock, CEO of The Education Trust, will discuss best practices when it comes to school funding. “Today’s schools, especially in ur-

Hanna-Attisha

Dennis Archer Jr.

ban cities, are being challenged to do more with substantially less,” said Dennis Archer Jr., president of Belleville-based Archer Corporate Services and this year’s conference chairman. “The education crisis in

Detroit underscores one of the biggest issues we’re facing: How to sustainably fund and provide our students a quality education?” Also on the agenda: A conversation about the “Internet of Things,” a keynote address by General Motors Co. President Dan Ammann followed by a panel discussion about connected cars and mobility, a panel on growing Michigan’s defense industry as part of the conference's theme of "investing in the future," a session hosted by the Kresge Foundation about Detroit regional transit and a conversation about inclusion and economic prosperity in Detroit

as the 50th anniversary of the 1967 riots approaches next year. The conference also will highlight entrepreneurship. Daymond John, CEO of the FUBU clothing line who appears on ABC’s “Shark Tank,” will give a keynote address and judge a pitch contest June 2. Detroit Ento LLC, a company that produces edible insects, and Grand Rapids-based Fathom, which makes underwater drones, will vie for an unspecified cash prize. It will be the first time the conference has hosted a pitch contest, Baruah said. Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

Huntington is proud to have recently been recognized as a Regional and National 2014 Greenwich Excellence Award in Middle Market Banking for Cash Management Overall Satisfaction. We’re even more proud of our treasury management team, who earned this award through their hard work and dedication to our customers. Member FDIC. ¥® and Huntington® are federally registered service marks of Huntington Bancshares Incorporated. Huntington® Welcome.TM is a service mark of Huntington Bancshares Incorporated. © 2016 Huntington Bancshares Incorporated.

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

Entrepreneurs ready to pitch for funding at 35th Growth Capital Symposium By Tom Henderson thenderson@crain.com

The 35th annual Michigan Growth Capital Symposium is expected to draw about 450 venture capitalists, angel investors and service providers from around the country to the Ann Arbor Marriott Ypsilanti at Eagle Crest on Tuesday and Wednesday to hear 35 earlyand growth-stage companies from the Midwest make pitches for funding. There will also be panel discussions and keynote addresses, including the kickoff speech by Adam Lilling, a 1992 University of

Michigan business school graduate

and the founder and managing partner of Plus Capital, a venture capital firm in Santa Monica, Calif. Lilling has founded several tech companies and served as a board member for several others. In 2010, he co-founded Launchpad LA, a mentorship organization for young entrepreneurs. In 2013, he founded Plus Capital, which has 11 portfolio companies. Panels will include such topics as health care reform, challenges facing medical software startups, the keys to licensing technology and an overview of how to nurture

Julia Owens: Raised $62M in VC for her Millendo Therapeutics.

companies spun off from university research. A member of the last panel will be Julia Owens, president and CEO of Ann Arbor-based Mil-

lendo Therapeutics Inc., which

in January announced it raised a venture capital round of $62 million, the largest single VC

funding round in state history. Joining the panel on health care reform will be Tom Shehab, a principal in Ann Arbor-based Arboretum Ventures LLC, which last September raised a fund of $220 million, the state’s largest VC fund ever. But the stars of the two-day conference, and the chief reason for attendance, will be the 15-minute pitches by entrepreneurs sharing their business plans and making cases for funding. Companies include Neurable LLC, a UM spinout founded by Ramses Alcaide, a Ph.D. student at

PEACE OF M ND

UM’s Ross School of Business; and Michael Thompson, an MBA student. Neurable has developed a patented, noninvasive brain-computer interface technology that allows real-time control of software and physical objects. In April, the company won the $50,000 second-place prize at the prestigious Rice Business Plan Competition in Houston, which also came with an option for an equity investment of up to $280,000. Other notable presenters are: n Genomenon Inc., a life sciences company spun off from UM that has developed simplified genome-interpretation software to improve personalized medicine. It won $100,000 as runner-up at last November’s Accelerate Michigan Innovation event in Detroit, and in January, it finished raising a seed round of $940,000. n Ann Arbor-based ContentOro LLC, which provides content licensed from publishers for websites and which has received funding from the Michigan Angel Fund. n Quikly, a portfolio company of Dan Gilbert’s Detroit Venture Partners that offers deals on merchandise. n Ann Arbor-based CytoPherx Inc., a company that makes a device that removes white blood cells from the kidneys of patients with acute failure that in 2014 topped the Crain’s Eureka List of local companies with the highest-quality patents issued in 2013. n Ann Arbor-based HistoSonics Inc., a UM spinoff that makes ultrasonic medical devices to noninvasively shrink swollen prostates and destroy cancerous tumors. Many others at the symposium, which is sponsored by the Ross School of Business, will be making their public debuts, hoping to attract the kind of attention and funding that previous companies have received. Online registration has closed. Walk-ins are welcome Tuesday morning at the Marriott, with registration at $425. Registration is available Wednesday morning for $195. Go to www.michigangcs.com for more information. Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

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JAY GREENE

SPECIAL REPORT: HEALTH CARE

jgreene@crain.com Twitter: @JayBGreene

Definitions of ‘person-centered planning’ vary Ask any mental health expert what the main difference is between how Medicaid HMOs and community mental health organizations create patient treatment plans and you will get one answer: person-centered planning. I heard this again and again in my interviews. Even state officials, such as Lt. Gov. Brian Calley, heard it. Calley made sure it was included at the top of the list as a guiding principle of a state-led workgroup that is designing recommendations for a new system. But what is person-centered planning? And is the definition different between health plans and mental health agencies? Yes, I find that it is. In the mental health field, person-centered planning is a method of discovering from a patient how he or she wants to live and what services will make that possible. It can range from a specific doctor request to transportation issues. The goals are improvement and independence. For health plans, person-centered planning is based on the use of interdisciplinary teams that create individual care plans that follow medical guidelines in alignment with the individual’s health care needs and requirements. Willie Brooks, CEO of the Oakland County Mental Health Authority, told me care is personalized to meet the needs of individuals in the system. “When it comes to assisted living, something that works well with one person may not work well with another person,” he said. But Jon Cotton, president and COO of Meridian Health Plan of Michigan, said offering multitudes of non-standardized contracts would be costly. The state would have to authorize reimbursements to plans for individual contracts. “We won’t do onesy-twosy contracts,” said Cotton, noting the practice where mental health agencies recruit specific direct-care workers based on patient requests. “We are not going to contract with one person at a time.” Even the National Committee on Quality Assurance, which ranks HMOs, has said there is a disconnect between individual care plans and a patient’s goals, which is the heart of person-centered plans. “The documented in-care plans commonly reflected necessary services or care, things like regular physician visits, medication management and patient education,” NCQA said. “The connection between the documented goals and the stated goals was sometimes obvious, but more often, it could only be explained by individuals or their care managers,” NCQA said. NCQA then asked: “How well can providers meet a person’s needs if the care plan doesn’t fully document what matters most to the person?”

Time for change? Michigan debates integrating physical, mental health systems

By Jay Greene

jgreene@crain.com

ichigan is at a crossroads for how it delivers physical and behavioral health services under Medicaid. During the past 19 years, Medicaid health plans have managed the state’s now $8 billion-plus physical health Medicaid budget for a growing number of beneficiaries. With Healthy Michigan Medicaid expansion, HMOs now manage medical care for 1.7 million people. In 1998, Michigan also embarked on a separate system of regional public authorities to manage its now $2.4 billion-plus Medicaid behavioral health budget for 230,000 patients. The 10 prepaid inpatient health plans, or PIHPs — three in Wayne, Oakland and Macomb counties — coordinate behavioral and social-service care for serious mental conditions, developmental disabilities and substance abuse. Now the state is debating whether to integrate the systems — and if so, how. Much money is at stake, and

so are two separate systems that generally get high marks for quality. Last year, 14 Medicaid HMOs earned $298 million on revenue of $7.67 billion for a 3.9 percent margin. Now down to 12 because of acquisitions, many of those plans have received good ratings for quality and customer service that in some cases exceeded commercial HMOs, according to the National Committee on Quality Assurance, an HMO accrediting body. While no national quality accreditation body exists for managed behavioral health providers, Michigan has created a national model based on its breadth of care, according to the National Council of Behavioral Health and the National Association of County Behavioral Health and Developmental Disability Directors.

In February, Gov. Rick Snyder proposed in his fiscal 2017 budget to unify the two parallel systems by allowing the Medicaid HMOs to manage the $10.4 billion-plus managed Medicaid system for physical and behavioral health. Public outcry led the Michigan House and Senate to put a temporary hold on Snyder’s

proposal. Lt. Gov. Brian Calley already had slowed the process in February by creating a 122-member stakeholder work group to study the issue. The state Legislature wants an initial report by December. But the question remains: How best can Michigan improve delivery of physical and behavioral health care? Experts on both sides of the issue say care coordination is the best way to improve health, reduce costs and increase quality. It is well known that people with chronic diseases who also are suffering from mental illness are more likely to have higher medical bills. The question is how best to coordinate their care. Through a single delivery system managed by multiple Medicaid HMOs? By retaining the current system and using enhanced electronic medical records and a state mandate for HMOs and PIHPs to coordinate case management? Or possibly, as some state legislators and providers have suggested, by allowing Medicaid health plans to include coverage for serious mental illness and substance abuse, a socalled carve-in of those ser-

vices. In that scenario, PIHPs, or a single statewide managed care entity, would retain responsibility for patients with developmental disabilities and other related services, experts said. Doing nothing doesn’t seem part of the agenda. All sides want improvement.

Lansing searches for solution Medicaid health plan officials say they are prepared to compete for contracts to manage physical health and behavioral health Medicaid services. They say they can help the state save money, improve quality and care coordination and extend more services to patients. The National Conference of State Legislatures says more than 30 states have embarked on a variety of approaches the past five years to incorporate some behavioral health with physical health into health plan-type management systems (See story on state case studies, Page 10). Rick Murdock, executive director of the Michigan Association of Health Plans, said health plans have the experience to manage SEE MEDICAID, PAGE 10

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SPECIAL REPORT: HEALTH CARE

Growing number of states experiment with integrating m By Jay Greene jgreene@crain.com

More than 30 states have moved to integrate physical health and behavioral health services, as Michigan is now debating. States want to lower costs, reduce service duplication and improve care coordination and quality for their residents. But each state has taken a slightly different approach based on its experience in managed care, patient needs and political will, according to a report by Open Minds Institute, a consulting firm in Gettysburg, Pa. Fourteen states (27 percent) contract with HMOs for a full complement of behavioral and physical health benefits, excluding pharmacy benefits, but most HMOs subcontract out for behavioral health. Eleven states (22 percent) contract with HMOs but exclude at least one major behavioral health category such as substance abuse or developmental disabilities. And 16 states (31 percent), including Michigan, carve out most behavioral health benefits from HMO contracts, according to Open Minds. Michigan HMOs manage mild and moderate mental health issues. But because of the new federal mental health parity rule, which goes into effect next year, health plans will be required to offer the same level of benefits for mental health or substance abuse treatment as they offer for medical care. The rule will most likely mean

MEDICAID FROM PAGE 9

both systems. “We have always tried to position our industry as part of the solution, not part of the problem,” Murdock said. “With proper planning and all the systems in place, I absolutely believe we can” integrate behavioral and physical care. Murdock noted that health plans have incorporated many populations into managed care over the years. They include dual-eligible Medicaid and Medicare patients, physically disabled patients, pregnant women and special-needs high-risk children. Behavioral health officials, providers and families of clients want the state to help them improve the current system of care that they acknowledge isn’t perfect and needs streamlining. They say this is because care is delivered and funded unevenly across regions and doesn’t always address patient and family needs. Contrary to some mental health providers who argue they have been shortchanged by the state

that health plans will deliver more behavioral health services than previously required. The state now mandates HMOs offer a minimum of at least 20 mental health outpatient visits. Many states are moving to an integrated model because studies have shown that mental health problems compound existing physical health problems. National data show that 20 percent of American adults have diagnosed mental health and medical conditions such as diabetes and heart disease and are three times more likely to be suffering from depression. At least 30 percent of adults on Medicaid have a mental health condition. Michigan is only one of a growing number of states that are moving to include medical, mental, behavioral health and substance abuse into managed care plans, said Constance Garner, policy director with Foley Hoag LLP in Washington, D.C. “Over the years, states have carved out special-needs populations: developmentally disabled, intellectually developmentally disabled, mental health and foster care with waivers,” said Garner, a nurse practitioner turned consultant. “States have left them (alone) until” now when they are starting to consider moving everything into managed care. Garner said Iowa has an ambitious plan to include all behavioral health populations into managed care plans. “Kansas tried to do that (in 2013). Now it is struggling and

carved them back out,” she said. Iowa took two years and Arizona three years to plan their conversions. “It behooves the (Michigan behavioral health) work group to work this through” slowly, she said. A look at what some other states have done:

Florida The Sunshine State stepped on the Medicaid integration bandwagon in 2014 when it implemented a statewide managed care program to contract with 10 managed care organizations for physical health and most behavioral health services. Florida also contracted separately with a specialized behavioral health organization for about 20,000 patients with serious mental illness such as schizophrenia and major depression. The health plans compete for contracts and with one another for 3.2 million Medicaid enrollees based on provider networks, quality scores and customer service. Plans are then responsible for coordinating all health needs based on a single rate per member. Serious mental illnesses are put into a specialty behavioral health plan managed by Magellan Complete Care of Florida. Medicaid recipients who meet Magellan’s criteria will be assigned to it by the state. Patients have the option to switch to a different managed care plan within 90 days. Another 120,000 are expected to become eligible for specialty be-

“I absolutely believe we can” integrate behavioral health care with physical health care. Rick Murdock, executive director, Michigan Association of Health Plans

with funding, Elmer Cerano, executive director of the nonprofit advocacy group Michigan Protection and Advocacy Service Inc., said cutting regulations and bureaucracy — not more money — is needed to improve the system. “I don’t care who operates the program. I want to see better service,” Cerano said. “If profits are to be made, it should go to additional services.” There is widespread fear among mental health advocates that Medicaid HMOs, the majority of which are for-profit health plans, will siphon off profits, cut services and increase administrative costs for the state, leaving patients and families frustrated — or worse. Murdock said because health plans would be at risk for total care, HMOs will not skimp on behavioral, medical or social services.

But mental health advocates question how Medicaid HMOs can increase benefits and services while at the same time save the state an estimated $200 million — a number that was floated last year — and retain 2 percent to 5 percent profit margins for HMO owners. Tom Watkins, CEO of Detroit Wayne Mental Health Authority, asked the $2.4 billion question about the state’s effort to change the behavioral health system: “What are we trying to fix?” Administrative costs? Care coordination? Watkins said several PIHPs have already restructured to cut administrative costs. For example, the Detroit Wayne authority has used efficiency savings the past two years to increase services by $30 million and spend $21 million to give $1-per-hour pay raises to direct-care workers, who are paid

havioral services through Magellan. Patients will be allowed to remain in the 10 HMO plans also under Florida contract. At Tampa-based WellCare Health Plans Inc., Julie Harmon, its director of product operations for behavioral health, said the key to success with integration is evaluating all of each person’s needs. The state’s largest health plan, Wellcare, manages 687,000 of the state’s 3.2 million Medicaid managed care members. “There were concerns by behavioral providers that money would dry up and get lost in the medical budget,” Harmon said. “We have found (money available) has increased for the behavioral health budget.” Harmon said Wellcare’s Staywell has thousands of members with serious mental illness in its plan. “Because we are integrated, they can stay in our plan and get all the services they need,” she said. Wellcare Staywell’s behavioral services also include substance abuse treatment, residential psychiatric treatment, therapeutic group care services, therapeutic foster care services, and behavioral health onsite services for children. Nicholas Abid, D.O., Wellcare’s behavioral health medical director, said Medicaid patients have a disease burden much higher than the average insured population. Diabetes and heart disease are quite commonly associated with depression, he said. “We are working on bringing

medical and behavioral homes here to Florida,” said Abid, who graduated from osteopathic medicine school at Michigan State University. “We have found in our second year there is a real benefit to having all services under one roof in a medical-behavioral health medical home.” Wellcare Staywell is working with providers to develop at least seven multi-specialty community mental health centers in the state’s 11 regions, Abid said. Harmon said all new enrollees first receive health risk assessments to help determine a care plan that is coordinated by integrated care management teams. Each patient has a case coordinator. “Our job is to get out and meet providers and talk with them about their problems,” said Abid. “We developed the provider network and it is our job to maintain it.” Abid said WellCare has been helping physicians transition from being reimbursed primarily based on volume to having payment tied to meeting quality and health outcome measures. WellCare tracks such measures as seven-day post hospitalization follow-up rates, readmission rates and medication adherence measures. These measures are especially important for patients with such chronic conditions as diabetes, high blood pressure and elevated cholesterol, Abid said. Abid said one challenge is the excessive use of brand-name drugs prescribed by psychiatrists.

slightly above minimum wage. “We all need to be more efficient,” Watkins said. “If we go looking for savings, but we let HMOs take profits and not invest savings in services, I just don’t think we have done anything except give money to the health plans. I just believe public money should be reinvested in public good.” But to accomplish change without disruption of services, Murdock said, the health plans have to work with community mental health providers to maintain continuity of care for patients. “There already are access issues” with the current system, Murdock said. “We need to find additional providers and find more resources.” Medicaid plans already have difficulty finding enough psychiatrists to conduct mild to moderate counseling for which they are currently responsible, said Robert Sheehan, CEO of the Michigan Association of Community Mental Health Boards. “If they can’t get an appointment, they call us and we see them,” Sheehan said. “If we don’t treat the person now, it is inhumane.” While Sheehan believes funding needs to remain separate, he said

reforms can improve the current Medicaid mental health system. “Decisions we make on how dollars are spent have to be based on taking care of the most vulnerable population in Medicaid” — those with behavioral health and developmental disability problems, Sheehan said. But Sheehan said he is not tied to the current management structure of using prepaid inpatient health plans as the vehicle to manage state funds at the regional level. “We could have a single PIHP — the state could be it. There could be (fewer) public PIHPs (than the current 10 now),” he said. “The key is not letting go of public” mental health oversight. Sheehan also said he wouldn’t tamper with the behavioral health provider network. “It is very robust and comprehensive,” he said. “They do so much more than what they are paid for.” But Jon Cotton, president and COO of Meridian Health Plan of Michigan, said PIHPs have had enough time to prove they can be effective and coordinate care. “Their time has passed. Medicaid health plans should take over that role,” he said. “It’s like com-

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SPECIAL REPORT: HEALTH CARE

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â&#x20AC;&#x153;Many (physician organizations) are on the hook for those expenses, and primary care doctors were grousing about that,â&#x20AC;? Abid said. â&#x20AC;&#x153;We met with psychiatrists and talked with them about the importance of using generic drugs when possible. We developed a preferred drug list and put new patients on generics. We saw great savings.â&#x20AC;?

Iowa On Jan. 1, Iowa consolidated all Medicaid services into one managed-care program and awarded contracts to three private managed care organizations. More than 32,000 doctors and health care providers have contracted with the HMOs for Iowaâ&#x20AC;&#x2122;s 580,000 Medicaid beneficiaries, a larger number than covered by the stateâ&#x20AC;&#x2122;s previous system. Iowa decided to move to a riskbased Medicaid program because costs had doubled to $4 billion over the last decade and there was a desire by legislators to improve quality and access to care, said Amy McCoy, public information officer with the Iowa Department of Human Services. Less than half of Iowaâ&#x20AC;&#x2122;s 580,000 Medicaid members were previously enrolled in a managed care plan, she said. The three contracted Medicaid HMOs are Amerigroup Iowa Inc., with 180,000 members; Amerihealth Caritas Iowa Inc., with 203,000; and UnitedHealthCare Plan of the River Valley Inc., with 201,000. While Iowa projects to save $110 million during the second year of the

paring a bicycle to a Ferrari. You both go from A to B, but the ride is different.â&#x20AC;? Cotton said health plans have the capital to invest in more services and the infrastructure to coordinate care but in a much more cost-effective manner. He also said he looks forward to working with mental health providers. â&#x20AC;&#x153;They are incredibly valuable assets for managing behavioral health,â&#x20AC;? he said. â&#x20AC;&#x153;We could work with them in a number of ways.â&#x20AC;? For example, Meridian would contract with mental health networks the same way it does with its existing Jon Cotton: hospitals, mediPIHPsâ&#x20AC;&#x2122; â&#x20AC;&#x153;time has cal groups and passed.â&#x20AC;? pharmacies, he said. â&#x20AC;&#x153;We need everything done under one roof: medical, behavioral, social,â&#x20AC;? he said.

The timetable question Despite Snyderâ&#x20AC;&#x2122;s original proposal to start integrating funds and

program, McCoy said the state projects higher HMO administrative costs â&#x20AC;&#x201D; not administrative savings as Michigan officials have suggested. â&#x20AC;&#x153;We expect to have an 8 percent increase in administrative costs because of the higher admin loss ratios with (managed care organizations), but we will still have savings overall,â&#x20AC;? McCoy said. Savings will be generated by reducing duplication of services and avoiding unnecessary hospitalizations and emergency department visits, she said. McCoy said Iowaâ&#x20AC;&#x2122;s new program will add more than 80 additional benefits. They include pregnancy and prenatal care programs, a 24-hour nurse hotline, boys and girls club memberships, weight-management and stop-smoking programs.

Arizona Last October, Arizona began a mandatory integrated health plan for individuals with serious mental illnesses statewide, but decided to use regional behavioral health organizations to coordinate care instead of physical health HMOs. Arizona, which was the last state to adopt Medicaid in the late 1970s, is one of only a few states along with Florida to allow a behavioral health organization to also coordinate physical health care. Arizona took three years of study before it launched a new Medicaid program that integrated physical and behavioral health benefits for 50,000 people with serious mental illnesses, said Monica Higuera

services in 2017, Murdock said he supports a slower rollout over two to five years. â&#x20AC;&#x153;We need to identify a plan, identify first steps, use existing systems, work collaboratively, and through the process bring things together,â&#x20AC;? he said. However, Willie Brooks, executive director of the Oakland County Mental Health Authority, said he favors a reform plan that puts people â&#x20AC;&#x201D; not HMOs and profits â&#x20AC;&#x201D; first. PIHPs are required to redistribute excess dollars within their operations, he said, not to owners or shareholders. â&#x20AC;&#x153;It also is important that the system we have is driven by outcomes and not profitability,â&#x20AC;? said Brooks, who believes for-profit health plans, many of which are based out of state, have different goals than public mental health providers. Cotton disagrees. He said one of the weaknesses of the PIHPs is that they are public organizations. â&#x20AC;&#x153;They donâ&#x20AC;&#x2122;t want to hear that. When you put someone (HMO) at (financial) risk, you have someone saying they are willing to invest in information technology and hiring people to get the job done,â&#x20AC;? he said.

Coury, assistant director with the office of intergovernmental relations of the Arizona Health Care Cost Containment System, the stateâ&#x20AC;&#x2122;s Medicaid agency. Coury said the state had one year of focus groups, launched a request for proposal the second year and then spent the third year selecting bids and signing contracts. â&#x20AC;&#x153;That led us to put physical health into (two) regional behavioral health agencies that cover two geographic services areas, Coury said. A third three-year contract in Maricopa County already was in effect with Mercy Maricopa in Phoenix. Arizona has a separate managed care system for developmentally disabled and substance abuse patients. Early results of the program show a slight increase in use of physical health services, but a decline in emergency department visits and hospital readmissions, Coury said. â&#x20AC;&#x153;There is a better understanding among providers that behavioral health is key to the overall health of the population,â&#x20AC;? she said. â&#x20AC;&#x153;We canâ&#x20AC;&#x2122;t solve mental health needs unless we address physical health.â&#x20AC;? Coury said Medicaid is considering a proposal to integrate all physical and behavioral health services. â&#x20AC;&#x153;It is much easier for a health plan when they can see membersâ&#x20AC;&#x2122; health in their totality,â&#x20AC;? she said. â&#x20AC;&#x153;It reduces the hassle factor for members and families. There can be administrative and medical savings.â&#x20AC;? Jay Greene: (313) 446-0325 Twitter: @jaybgreene

â&#x20AC;&#x153;We were at their level maybe 15 years ago. We have much higher standards (than PIHPs) and where we were before.â&#x20AC;? But combining physical and behavioral health under one delivery system is inherently dangerous, Brooks said. â&#x20AC;&#x153;It is imperative we have a separate funding system for people we serve,â&#x20AC;? Brooks said. â&#x20AC;&#x153;They are already devalued, unnoticed by society. If you commingle dollars, the majority of dollars will go to other areas â&#x20AC;&#x201D; to physical health care and profits itself. We want to make sure all the dollars remain in the system.â&#x20AC;? A careful approach, said Kevin Fischer, CEO of the National Alliance on Mental Illness of Michigan, is to first work to improve the current public mental health system. â&#x20AC;&#x153;There is room for improvement and efficiencies, but the implication that the mental health system is broken in Michigan is not true,â&#x20AC;? Fischer said. â&#x20AC;&#x153;We can build something better. HMOs talk about integration, but the physical health system is not even ready for it.â&#x20AC;? Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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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 // M A Y 1 6 , 2 0 1 6

SPECIAL REPORT: HEALTH CARE

Michigan still fine-tuning Medicaid mental health system By Jay Greene jgreene@crain.com

Corporate Facility Graphics That Inspire

President John F. Kennedy started the mental health deinstitutionalization ball rolling early in 1963 before his assassination later that year by a man, Lee Harvey Oswald, who some believe had an untreated mental illness. Kennedy’s signing of the Mental Retardation Facilities and the Community Mental Health Centers Construction Act eventually led to Michigan closing more than 30 psychiatric hospitals beginning in the 1980s. Like many states, Michigan then moved the bulk of behavioral health care to community outpatient settings. Reasons for the change were to address widespread allegations of patient abuse and civil rights violations. But new anti-psychotic drugs also allowed more patients to be treated as outpatients. Arguably, the changes created different problems that are still being addressed. Michigan now operates three psychiatric hospitals for adults, one for children and adolescents and one for people with developmental disabilities. Over the past 30 years, Michigan also has shifted away from using state tax funds to support behavioral health, developmental disability and substance abuse

care for its citizens. Now it relies primarily on federal Medicaid dollars to fund the program. More than 70 percent of the state’s $14 billion Medicaid budget is funded by the federal government or provider and insurance company taxes. In 1998, Michigan and 19 other states began to fund Prepaid Insurance Health Plans to manage enrollees. To reduce costs and force administrative cost savings through the system, Michigan in 2013 reduced the number of PIHPs from 18 to 10. Funding for the three PIHPs in Southeast Michigan also has been cut by about 20 percent the past five years. A year earlier, Michigan also began to use managed care to deliver physical health services to its growing Medicaid population, which now accounts for 2.3 million, some 23 percent of the state’s population. The state now contracts with 12 Medicaid HMOs, or health plans, on a per-member per-month basis. The payments are adjusted based on age, gender and location, among others. It is universally accepted that Michigan’s experiment into managed care the past 19 years for physical health has been a success, both in holding down costs

and improving quality. But Michigan is still fine-tuning how it delivers Medicaid behavioral health dollars. Unlike the privately owned Medicaid HMOs, the majority of which are for-profit companies, each PIHP is managed by a public mental health authority. Similar to Medicaid HMOs, the PIHPs receive per-member-permonth Medicaid payments from the state. Their responsibilities include qualifying individuals, authorizing services and contracting with provider agencies. The result is that Michigan has two parallel managed care delivery and payment systems for physical health and behavioral health. Of the 227,020 people served by the PIHPs in 2010 — there are an estimated 230,000 now — 69 percent were covered by Medicaid, the Ann Arbor-based Center for Healthcare Research and Transformation said last year in a report on the

state’s mental health system. Experts estimate that with Healthy Michigan Medicaid expansion, the percentage of people both eligible for PIHP and Medicaid HMO care is far higher, leading to suggestions that care coordination of patients could improve quality and reduce costs. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

Crain’s seeks 2016 Health Care Heroes 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:

n Corporate achievement in health care: Honors a company that has

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

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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. n Physician: Honors a physician whose performance is considered exemplary. n Allied health: Honors an individual from nursing or allied

health fields who is deemed exemplary by patients and peers. n 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.

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

DEALS & DETAILS ACQUISITIONS & MERGERS

The Promanas Group, Ann Arbor, a commercial real estate properties investor, acquired Southfield Crossing II, a 66,196-square-foot, single-tenant office building on West 11 Mile Road, Southfield. Website: promanas.com. Unique Fabricating Inc., Auburn

Hills, which engineers and manufactures multi-material foam, rubber and plastic components used in noise, vibration and harshness management and air and water sealing applications for the automotive and industrial appliance markets, acquired the business and substantially all the assets of Intasco Corp., London, Ontario, a provider and manufacturer of precision die cut solutions. Websites: uniquefab.com, intasco.com.

FES Group, Wixom, an engineering

consulting firm, has merged with

KJWW, a division of IMEG Corp.,

Rock Island, Ill., an engineering consultant firm. Website: kjww.com.

CONTRACTS

G2 Consulting Group, Troy, a geo-technical, environmental and construction engineering services firm, has been retained by Aristeo Construction Co., Livonia, for consulting services, including soil erosion, sedimentation control inspections, environmental and cultural/historical resources, at the Pinnebog Wind Park in the thumb region. Websites: G2consultinggroup.com, aristeo.com. Arotech Corp., Ann Arbor, a

provider of defense and security products for the military, law enforcement and homeland security markets, announced that its U.S. power systems division, UEC Electronics, has received $2.6 million contract from the U.S. Marine Corps to design, develop and deliver four mobile electric hybrid power systems. The portable solutions combine battery technology with existing generator and solar solutions. Website: arotech.com.

EXPANSIONS

P3 Group, Aachen, Germany, unveiled its Mobility Innovation Center, at 25650 W. 11 Mile Road, Suite 300, Southfield. The 25,000-square-foot facility will focus on the research, development and implementation of future automotive technologies, as well as organizational solutions and processes that will support OEMs and suppliers. Website: p3-group.com.

Valbridge Property Advisors, Lansing, a commercial real estate appraisal firm, has opened a new office at 1442 Brush St., Detroit. Telephone: (313) 986-3313. Website: valbridge.com. Bassett Business Group, Detroit, a

global strategic communications management and marketing firm, has launched Bassett & Bassett Executive Search LLC, a firm focused on finding the right C-suite leadership for organizations. Website: bassettbassett.com. U-Haul Moving & Storage of Troy, a franchise of U-Haul International Inc., has opened at 1250 W. Maple

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Road, Troy. Telephone: (248) 362-0303. Website: uhaul.com.

MOVES

Healthy Dogma has moved its

natural pet food store from 1095 S. Lapeer Road, Lake Orion, to 2643 S. Lapeer Road, Lake Orion. Telephone: (248) 693-7525. Website: healthydogma.com.

NEW SERVICES

American Society of Employers,

Livonia, announced a new website that features a dashboard where members can access their benchmark data, research portals and membership information. Website: aseonline.org.

FEV North America Inc., Auburn Hills, has developed a suite of services for design, development, testing and deployment of cybersecurity and advanced driver assistance systems solutions. The services focus on the connected vehicle system and its components and interfaces, significantly reducing cybersecurity risks. Website: fev.com. Stefanini, Southfield, a global IT provider, has announced the availability of its banking and financial services for the North American market to address issues concerning development of new business models and defining new business structure. Website: stefanini.com. ZipLogic LLC, Fraser, a real estate

technology company, announced that the North Carolina Regional MLS is providing access to zipForm MLS-Connect to its members. Website: zipform.com. Deals & Details guidelines. Email cdbdepartments@crain.com. Use any Deals & Details item as a model for your release, and look for the appropriate category. Without complete information, your item will not run. Photos are welcome, but we cannot guarantee they will be used.

Share your success with reprints | E-prints | plaques and more! Reprints are a great way to leverage news coverage about your company to clients and prospects.

Contact Krista Bora at kbora@crain.com, (212) 210-0707 for a unique opportunity to co-brand your company with a reputable news source.

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

Valade buys buildings CALENDAR in Grosse Pointe Farms WEDNESDAY MAY 18

Annual Automotive Roundtable. 5-8

By Marti Benedetti mbenedetti@crain.com

Business owner and philanthropist Gretchen Valade has purchased a block of buildings along Kercheval Avenue in Grosse Pointe Farms’ The Hill business district. The seller was Van Hauswirth, managing director of Raymond James & Associates, which occupies a large portion of the historic Punch and Judy building on the block between Fisher Road and McKinley Avenue. The Punch and Judy originally was a theater built in 1927. It was converted to offices in 1987. “I was sad this transaction happened. I love the building. But I know it will be in good hands,” Hauswirth said. In addition to Raymond James on the ground floor of the Punch and Judy, tenants include 17 law firms and small businesses on the second and third floors, Hauswirth said. The block also includes a Brooks Brothers outlet store and vacant

corner office, formerly a PNC Bank branch. Valade has no immediate plans or prospects for the site, said her spokesman, Tony Michaels. He would not disclose the purchase price. Valade also owns the buildings that house her businesses on the next block of The Hill. Those include the Dirty Dog Jazz Cafe,

Morning Glory Coffee & Pastries and Capricious, a

shoe and accessory store. “It’s a real esGretchen Valade: tate investment for her,” MiAn investment, said. spokesman says. chaels “She believes in the community and wants to keep it strong and viable.” Valade is the granddaughter of Hamilton Carhartt, who founded Carhartt Inc. in Detroit in 1889.

p.m. Marketing and Sales Executives of Detroit. Moderator Dave Andrea, executive vice president of research, Center for Automotive Research, leads a panel of automotive executives to discuss the opportunities, challenges and successes of automotive suppliers. Panelists include Ken Hopkins, president and CEO, Neapco Holdings LLC; Kim Korth, president and CEO, Techniplas Group and DMP; and Jonathan DeGaynor, president and CEO, Stoneridge Inc. Sheraton, Novi. $50 members; $65 nonmembers. Website: msedetroit.org.

THURSDAY MAY 19

Pancakes and Politics. 7:30-9:30 a.m.

Michigan Chronicle. Enjoy breakfast with nearly 400 policymakers and decision-makers. Detroit Athletic Club, Detroit. $100. Phone: (313) 963-5522. CEO Series. 8-9:30 a.m. Troy Chamber of Commerce. Alessandro Dinello, president and

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UPCOMING EVENTS

Starting Up: An Introduction to the Entrepreneurial Support Ecosystem in Michigan. 9:30 a.m.-11:00 a.m. May 24. Macomb-Oakland University

Incubator. Explores several state resources to help start and/or grow a high-tech innovation. Items for discussion include business incubators, SmartZones, support services, university technology acceleration and commercialization and funding programs. Mark Ignash, the incubator’s client support administrator and strategist, will provide a formal presentation with a question-and-answer period. Velocity Center, Sterling Heights. Free. Contact: Joan Carleton, phone: (586) 884-9324; email: macinc@oakland.edu.

The Energy Renaissance — What its Price Cycles Mean to You. 11:30 a.m.-1:30 p.m. May 25. Detroit Economic Club. Ryan Lance, chairman and CEO, ConocoPhillips,

will be guest speaker. Westin Book Cadillac, Detroit. $45 DEC members; $55 guests of DEC members; $75 nonmembers. Contact: (313) 963-8547; email: info@econclub.org.

Driving Innovation and Engagement: The Role of the University Research Corridor in the Motor City. 11:30 a.m.-1:30 p.m. June 7. Detroit Economic Club. Mark Schlissel, president, University of Michigan; Lou Anna Simon, president, Michigan State University; and M. Roy Wilson, president, Wayne State University,

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CEO, Flagstar Bancorp Inc. and Flagstar Bank, will discuss “Leadership, Culture and the Community.” Walsh College, Troy. $22 members, $32 nonmembers. Contact: Jaimi Brook, phone: (248) 641-8151.

Thomas has over 25 years of industrial sales, management and marketing experience with a focus on facility equipment and upgrades. He holds a B.S. in Business Administration from Lawrence Technological University in Southfield, Michigan. Thomas is a member of the Construction Association of Michigan, the Detroit Regional Chamber, Ann Arbor Spark and Automation Alley. The Rudolph Libbe Group is a single source of comprehensive construction services.

For more information or questions regarding advertising in this section, please call Lynn Calcaterra at (313) 446-6086 or email: lcalcaterra@crain.com

will be guest speakers. $45 DEC members; $55 guests of members; $75 nonmembers. Contact: (313) 963-8547; email: info@econclub.org.

The Multi-generational Workforce. 11:30 a.m.-1 p.m. June 7. Automation Alley. Jason Morga, vice president of Kelly Services Americas marketing group, talks

about the global phenomenon of a multi-generational workforce where four distinct generations are employed in one workplace. Automation Alley, Troy. $20 members; $40 nonmembers. Email: events@automationalley. com; phone: (800) 427-5100. 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.

PEOPLE: SPOTLIGHT Free Press publisher Jenereaux to retire

Joyce Jenereaux will retire at the end of the summer as publisher of the Detroit Free Press and president of Michigan. com, the Free Press reported. Jenereaux, 62, became president of the Detroit Media Partnership,

which does business as Michigan. com, in 2011. Jenereaux The entity oversees business operations of the Free Press and The Detroit News. It handles advertising for other media outlets in the state owned by the Free Press’ parent, Virginia-based Gannett Co. Inc. She assumed the Free Press publisher role when Paul Anger retired as editor and publisher last year. She was named Free Press president in 2013. A replacement for Jenereaux was not immediately named.

Hudson-Webber Foundation names Clark Melanca Clark, who helps oversee nearly $1 billion in active grants for the U.S. Department of Justice, has been named president and CEO of the Detroit-based HudsonWebber Foundation. Clark is to start her new position in August. She will replace David Egner, who left last year to become president and CEO of the Ralph C. Wilson Jr. Foundation. Clark has been chief of staff for the Justice Department’s Office of Community Oriented Policing Services in Washington, D.C., and is a former senior policy adviser with the White House Domestic Policy Council. Her husband, Moddie Turay, has been executive vice president of real estate and finance for the Detroit Economic Growth Corp. since October.

Lions hire Colvin as general counsel The Detroit Lions announced the hiring of longtime outside counsel and Ford family attorney and adviser Jay Colvin as senior vice president of legal affairs and general counsel. Colvin, 55, most recently was a partner at Bodman plc. He has been an adviser and attorney to the Ford family for 25 years, the team said. With the Lions, he replaces Jonathan Dykema, promoted to general counsel last August. Dykema returns to his former role of manager of football administration/lead counsel.

DELPHINUS FROM PAGE 3

Nov. 27-Dec. 2 at the McCormick Place in Chicago, where it has rented space. “That’s a big meeting, and it’s key,” he said. Delphinus’ device, marketed as the SoftVue System, looks like a bed with a hole near the top. Patients lie down, with a breast through the hole. The breast is immersed in water and surrounded by a ring containing 2,048 ultrasound sensors, which generate data that are converted to 3-D images. The technology was spun out from the Detroit-based Barbara Ann Karmanos Cancer Institute in 2009 after 10 years of research. In 2010, the company raised a VC round of $8 million, and in 2013, it raised an additional $11 million. In September, the company raised a third round of $39.5 million, the largest in state history for a medical device company. Before being spun off, more than $19 million in grant funding had gone into the technology. In January 2014, Delphinus got approval from the U.S. Food and Drug Administration for the devices to be used as a follow-up diagnosis for women who have already been screened by traditional mammography, and cancer is suspected. So far, the only device in use, a prototype, is at the Karmanos Cancer Institute. When he closed on the VC round last September, Forchette said the money would be used to fund trials on women with dense breast tissue and to continue refining the software and hardware components of the system. Those trials, if success-

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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 // M A Y 1 6 , 2 0 1 6 CRAIN’S DETROIT BUSINESS

May 16, 2016

Page 15

“Our investors are very supportive, and they have a very robust ability to see us through. But I’m thinking about clinical trials, and not about fundraising. Delphinus is going to be a spectacular story for this industry, and for Michigan.” Mark Forchette, Delphinus

ful, would ultimately allow the SoftVue System to be used as an initial screening tool to detect breast cancer, replacing mammography. That is a much bigger market than its current FDA approval as a secondary screening tool. Forchette said one major problem with mammography when used on women with dense breast tissue is the high number of false positives, which leads to further testing that eventually proves to be unnecessary and expensive. He said ultrasonic imaging will sharply lower the incidence of false positives. Mammography also uses radiation, which has risks. Ultrasound is benign. Forchette said he is firming up details on trials and expects them to start in the third quarter this year. They will involve 10,000 women at eight sites, one of them in Michigan, none of which he said he can disclose yet. He said he hoped to have positive results by mid-2017 and approval from the FDA to start selling devices as a primary screening tool in 2018. He declined to disclose a sale

DELPHINUS

The SoftVue System uses technology that was spun out of the Barbara Ann Karmanos Cancer Insitute in 2009 after a decade of research. There’s a prototype in use at the institute. price until the company starts selling them later this year or early next year. The last funding round was led by Madison, Wis.-based Venture Investors LLC. It was joined by previous investors — Ann Arbor-based Arboretum Ventures LLC, Ann Arbor-based North Coast Technology Investors LP and Farmington Hills-based Beringea LLC, and by Grand Rapids-based Hopen Life Science Ventures and Waycross Ventures of Menlo Park, Calif.

MARKET PLACE

When asked if the last funding round was enough to get Delphinus through FDA trials and full commercialization, Forchette said: “Our investors are very supportive, and they have a very robust ability to see us through. But I’m thinking about clinical trials, and not about fundraising. Delphinus is going to be a spectacular story for this industry, and for Michigan.” Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

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GINOSKO FROM PAGE 1

in this,” he said. Ginosko, which owns outright or in part 23 multifamily properties in the Midwest with a capitalized value of $263 million, is also in the middle of another important Detroit housing development project: 45 supportive care units in the planned HomeBase development for veterans along the Woodward corridor just outside of Highland Park. Among the financing sources, Ginosko is applying for low-income housing tax credits from the U.S. Department of Housing and Urban Development’s October funding

round, but to make those deals work, another key component is needed. “You need to have adequate reserves to ensure that the services are there for the residents for at least 15 years,” Irving said. “You can’t just say, ‘Oh, I’ll defer a few years of developers’ fees to take care of the first few years and hope that the remaining 12 years are going to be good.’ It’s expensive, but it’s worth it, well over $1 million just in the bank account for the services.” Ginosko also poured $30 million into a 2013 renovation of the Renaissance Village Apartments (formerly known as Evergreen Estates) at Seven Mile and Evergreen roads and is the developer behind a $16.7 million

HORSES FROM PAGE 3

Association, say they intend to ask the Michigan Gaming Control Board to

pursue online wagering as an administrative rule change, rather than in statute. The practice, known as advance deposit wagering, would allow people to place bets on simulcast races from their cellphones or tablets without having to visit a track. Current law requires anyone betting on horse racing to do so from within a track. Hazel Park and Northville Downs consider online betting on horse races an extension of what they already do, replacing paper with the mobile devices that people carry everywhere. The Michigan Lottery has introduced online games, which track owners believe is essentially the same thing. And because more than 95 percent of the tracks’ wagering revenue comes from people who place bets on simulcast races, rather than live ones, the interest in electronic wagering is also financial. The tracks say they’re competing for business against out-of-state mobile wagering sites that don’t pay state taxes and don’t offer a cut of the proceeds to support either track and their affiliated horse owners’ group. Earlier versions of Senate Bill 504, sponsored by state Sen. David Robertson, included a provision that would have allowed the horse track with the larger handle during the past five years to operate advance deposit wagering. By numbers alone, Hazel Park had the larger simulcast handle — $56.6 million in 2015, compared to $45 mil-

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

renovation of a pair of Cass Corridor buildings at 3350 Cass Ave. and 149 Davenport into 47 low-income housing units. Other projects are in the New Center area and Midtown, and in Inkster, Ferndale, Pontiac, Flint, Battle Creek, Sault Ste. Marie, and Chicago. Revenue from Ginosko’s 2,100 units in which Irving has an ownership stake totaled more than $15 million last year, he said. He declined to specifically comment on the city recommending Choice Detroit LLC — technically known as the “housing implementation entity” for federal grant application purposes — for Detroit's application for up to $30 million in federal financing from HUD’s Choice Neighborhoods Program. The application for the funding is due late next month. The City Council must first approve the application for the grant. The other companies, along with Irving’s Ginosko, are Gilbert’s Bedrock Management Services LLC; Columbus, Ohio-based KBK Enterprises; and Columbia, Md.-based Enterprise Community Partners Inc.

“It’s a wonderful opportunity, and all parties involved are passionate about the city of Detroit, from the city to Bedrock to Enterprise to KBK, we are all passionate about the city and it’s so evident,” he said. “It’s really exciting to be a part of this wonderlion for Northville Downs, according to Michigan Gaming Control Board figures. “I would have had to take everybody to court,” said Mike Carlo, Northville Downs’ operations manager. “That was the biggest slap in the face I’ve ever seen in this industry. “In our world, we live under the purview of our license,” he added. “Basically, what it would have done is it would have said that Hazel Park has a different license to operate pari-mutuel wagering in a manner that Northville Downs can’t.” The bill that passed the Senate does not include that language. Instead, it would allow Michigan’s racing commissioner to draft administrative rules to govern the practice. The Michigan Gaming Control Board, which regulates the horse industry along with Detroit’s three commercial casinos, opposed the earlier version of the bill. Robertson, R-Grand Blanc Township, said the board and harness racing groups wanted the language removed. A 2004 amendment to the Michigan Constitution requires a statewide vote for any expansion of gaming. The board has not yet publicly said whether it would consider authorizing advance deposit wagering. Robertson, track owners and horsemen’s groups all say they don’t believe the practice would violate the constitutional provision. “The (board) will have to see what the options and its authority are if the bill becomes law,” gaming board spokeswoman Mary Kay Bean said via email. The bill could get a hearing in the House agriculture committee this week after clearing the Senate last

ful, brilliant team, from the government to the private sector.” Crain’s first reported the Brewster-Douglass and Eastern Market deal earlier this month. The HUD financing is contingent on the replacement of the units lost from the Brewster-Douglass projects, so at least 224 units of affordable housing are expected as part of the 900- to 1,000-unit plan. “It’s an incredibly important project, given the scale of it, but also the historical importance of developing the Brewster-Douglass site,” said John Rhea, a Detroit native and managing partner at RHEAL Capital Management LLC in New York City who has several hundred apartments planned for greater downtown. “This is a linchpin project, so I’m glad they have experience and a diverse set of developers in dealing with infill projects. I think it will set the tone for how the city and developers think about the art of the possible in some of the other neighborweek in a 30-7 vote.

A new formula? Robertson’s bill would be the first update to Michigan’s 1995 horse racing statute. Among other things, it would rewrite the formula that distributes revenue from wagers. Currently, all wagers placed on simulcast races at Hazel Park and Northville Downs are pooled into a common purse, where it’s split between the tracks and horsemen’s groups. Track owners say that setup made more sense years ago, when Michigan had more horse tracks in operation. But waning interest in horse racing led to the closure of seven tracks since 1998, leaving just two tracks. Hazel Park and Northville Downs essentially compete for the same audience, despite the fact that they don’t race the same breeds of horses, and have lost money as the wagering pool decreased. Thus, competition for market share has become increasingly important. Today, the common purse is divided in a way that offers roughly 65 percent of the proceeds to the harness racing standardbreds, after winners and a 3.5 percent state tax are paid, with the rest going to the thoroughbreds. Robertson’s bill would eliminate the common purse in favor of a “site-specific” model, meaning all of the wagers placed at Northville Downs and Hazel Park would stay at the respective tracks. “Horse racing has had very tough times. It’s been diminishing as a sport, and this is an attempt to try to amend the law in a way that will help all of racing,” Robertson said. “This

hoods with significant open space that can be developed.” The city has not disclosed specific roles or the planned development financing structure that would pay for the development, which would go on the 22 acres of the Brewster-Douglass site off I-75 and another 3.4 acres in Eastern Market on Russell Street and at the open-air Shed No. 4. “Ginosko is exactly the kind of medium-size developer that we are hoping grows as part of our Choice program, enabling them to take on even larger and more complicated developments in the city in the future. We want them to grow as we grow,” said Dan Austin, deputy communications director for Mayor Mike Duggan. “There is also an opportunity to go full circle at the Brewster-Douglass site, one of the few places African-Americans could live in Detroit in the 1930s and ’40s. Now, African-American developers are part of creating a mixed-income community in which all Detroiters are welcome.” Demolition work at the Brewster-Douglass site was completed in 2014. There were six 14-story high-rises, two six-story buildings and apartment row houses, with as many as 8,000 to 10,000 people living in the buildings at one time. But it was more than three de-

cades ago that most experts began to agree that public housing projects dedicated solely to low-income and affordable housing were laudable in their goals but misguided because they became known less for providing financially struggling families with affordable homes and more for drugs and violence, both of which plagued Brewster-Douglass. It is that site that qualifies the city for the HUD grant, the city says in its request for qualifications issued earlier this year, and will be considered the priority site for housing replacement. It is the largest residentially zoned site in Midtown, the RFQ says. The Brewster-Douglass opened in 1938 with 701 units; by 1941, it had 941. During its lifetime, the complex was home to boxer Joe Louis and the Supremes before they became Motown icons. The city has spent more than $39 million in that area since 2001 on things such as infrastructure, demolition, land acquisition and historic rehabilitation, priming it for redevelopment. “This should be a landmark deal for the city,” Daitch said. “It’s what you see driving in. It was an eyesore. It was exciting when it was torn down and it will be even more exciting when it’s rebuilt.”

language is archaic.” Northville Downs agreed to the funding formula change, which ultimately is a concession that would award them a smaller share of the simulcast purse pool than they receive now. But Carlo and the Michigan Harness Horsemen’s Association say the change triggers a problem with a different section of the bill, which they believe would require Hazel Park’s owners to sign off each time Northville Downs wanted to simulcast a thoroughbred horse race. Their fear is that Hazel Park and thoroughbred groups could block Northville Downs from simulcasting the Kentucky Derby, for instance, since the money collected under the new model would not be shared with Hazel Park and thoroughbred owners. “Since the dawn of simulcasting, all tracks have taken all breeds,” said Tom Barrett, president of the harness horsemen’s group. “We are only going to support a bill that treats both tracks the same.” George Kutlenios, president of the thoroughbred horsemen’s association, said his group doesn’t intend to prevent Northville Downs from showing thoroughbred races. “I don’t know why we would not want to send a signal,” Kutlenios said. “The more signals, the more product you have to offer. I can’t even envision a scenario where that makes sense.”

drop of 9 percent from 2014, according to the gaming control board. And the roughly $106 million wagered on live and simulcast races last year is well below the $261 million bet in 2007. Kutlenios said he has heard some industry estimates peg the amount wagered illegally in Michigan through services in other states at between $90 million and $120 million. Robertson also sponsored Senate Bill 505, which would make it a felony to accept wagers on live or simulcast horse races in Michigan without a license. That bill also moved to the House. Proponents say they want to stop vendors like TwinSpires, which is owned by Churchill Downs, from taking unlicensed wagers from potential track visitors that otherwise could be used to support Michigan’s race tracks. “There are people right now on site using their phones but not wagering even through us,” said Dan Adkins, vice president of Southfield-based real estate developer Hartman and Tyner Inc., which owns Hazel Park Raceway. Carlo, of Northville Downs, said Michigan’s horse tracks could make inroads into the market for advance deposit wagering if a third-party vendor managed it on behalf of both tracks, rather than allowing one track to operate at the expense of the other. “We’re in favor of it being in place somehow and some way,” he said, “but I don’t think we have figured out the best way for our industry in Michigan.”

Simulcast dollars The fight over simulcast revenue in some ways explains the desire for advance deposit wagering. Simulcast wagers contributed $3.6 million in state tax revenue last year, a

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

Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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

DCFC FROM PAGE 3

www.crainsdetroit.com

needs of the school district and local community, he added. Replacing the pitch is expected to be a $300,000 expense, Kropp said, and additional work on the stadium itself could add another $1 million to the current costs. Ownership has been reluctant to take on debt, but has made arrangements for additional money through the Detroit Development Fund, a nonprofit community development financial institution that provides financing for Detroit-based neighborhood businesses and services, Kropp said. The club also has discussed taking on additional investors — not the preferred option. “We’ve had people indicate they’re interested at some point (in buying into DCFC), but we’re hesitant to bring on more investors,” said Kropp, 37, a project manager at Henry Ford Health System. The other Detroit City team owners are Sean Mann, Alex Wright, David Dwaihy and Ben Steffans. The team previously played at Cass Technical High School’s 2,500seat field near downtown Detroit, attracting boisterous sellout crowds that garnered attention in the soccer world and fueled the need for a new, bigger home venue. Le Rouge, as the Detroit club is nicknamed, averaged 3,528 fans per game at Cass Tech (including standing-room tickets) last season, up from 2,878 in 2014. Kropp said DCFC expects to average 5,000 per game this season. The club sold more than 2,000 season tickets for 2016 at $60 each. They were $35 in the inaugural 2012 season. Most single-game tickets are $10. In 2012, they began at $5 per game. Group tickets are $8 each when bought in batches of 15 or more. DCFC has been busy off the field, too: The club also recently opened a mixed-use office, retail and community space at 2750 Yemans St. It sells an assortment of DCFC merchandise, including men’s and women’s clothing, youth apparel and other team accessories. The shop is open 11 a.m. to 7 p.m. Wednesday through Saturday and noon to 5 p.m. Sunday. “Sales have been steady, better than expected,” Kropp said. “Every day, people are in there, buying

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

PHOTO BY JON DEBOER/DCFC

Workers prep Keyworth Stadium in Hamtramck for new bleacher seats. Detroit City Football Club opens its season at its new home on Friday. gear, learning about the club. It’s been a great space for us. It gives people a face to the organization.” The big sellers are the new DCFC-branded soccer balls and the “Established 2012” T-shirts, he said. Merchandise sales account for about a quarter of DCFC’s annual revenue, Kropp said. He didn’t disclose a revenue total, but ownership has said the team is profitable and the operational budget is believed to be under $500,000. Season and single-match tickets account for the bulk of team revenue at 45 percent, while corporate sponsorships are 25 percent. The final 5 percent is concessions and money from the club’s adult recreational soccer leagues. Major team sponsors this year include Metro Detroit Chevy Dealers, Faygo, M1 Imaging, Henry Ford Health System, Fowling Warehouse, Flagstar Bank and 313 Energy. Kropp said revenue is projected to grow 43 percent this season compared to 2015, and each season has seen revenue grow by 40 percent or more since the club began play in 2012. Primary expenses, aside from the stadium project, are things such as game production and the club’s four full-time employees. Players, on the other hand, are not paid so they can retain their ama-

INDEX TO COMPANIES

These companies have significant mention in this week’s Crain’s Detroit Business: Affordable Housing Advisors ............................... 1

Mich. Association of Community Health Boards .10

Autism Alliance of Michigan................................. 1

Michigan Association of Health Plans ............. 9

Choice Detroit LLC ................................................ 1

Michigan Gaming Control Board .......................16

Clark Hill ................................................................. 4

Michigan Harness Horsemen’s Association ...16

Delphinus Medical Technologies .........................3

Mich. Horsemen’s Benvolent-Protection Assn. .3

Detroit City Football Club ....................................3

Michigan Protection and Advocacy Service ....10

Detroit Regional Chamber ...................................7

National Alliance on Mental Illness of Michigan ..11

Detroit Wayne Mental Health Authority .........10

NextEnergy ............................................................ 4

Ginosko Development .......................................... 1

Northville Downs ...................................................3

Hazel Park Raceway ..............................................3

Oakland County Mental Health Authority ...9, 11

Meridian Health Plan of Michigan .................9, 10

University of Michigan ......................................... 8

teur status and college eligibility while playing in the developmental NPSL. They’re mainly high school, collegiate and former professional athletes. New players this season include University of South Carolina midfielder and two-time All-American Danny Deakin, and University of Michigan players Evan Louro (goalkeeper), Brett Nason (midfielder) and Billy Stevens (defender). The team plays a 12-game regular-season schedule, with half on the road. It finished 8-2-2 last season, good for second place in the NPSL Midwest Region. DCFC is in the fourth-tier National Premier Soccer League, one of the two top amateur leagues within the seven-tier Chicago-based United States Soccer Federation’s organizational pyramid. The USSF is American soccer’s governing body. The club’s stated goal is to move up to the New York City-based North American Soccer League or the Tampa, Fla.-based United Soccer League. They’re the second and third tier of pro soccer in the U.S., respectively, underneath Major League Soccer. “That’s still the long-term plan. We have intentions of continuing to grow,” Kropp said. “It’s really just finding the right partners to help us grow this in a way that allows us to continue our commit-

ment to the community and supporter base. We’re having a lot of conversations right now about what’s the time to get the move done.” The announcement two weeks ago that billionaires Dan Gilbert and Tom Gores are seeking an MLS expansion team for downtown Detroit riled some of DCFC’s most ardent supporters, who see a top-level pro team as unfair competition to the grassroots-built Le Rouge. DCFC ownership said it has had talks prior to the announcement with the Gilbert-Gores camp, and both sides are open to figuring out a way both clubs can exist in the local soccer ecosystem. MLS clubs have lower-level teams as part of their developmental system, and DCFC could become part of that in Detroit. “We’re open to discussions,” Kropp said. “For us, the priority is to ensure this is done in a right way, for the community and supporter base.” And if Gilbert-Gores offered to buy Detroit City FC, it’s something Kropp and the others would listen to, he said. But all of that is in the future. For now, DCFC is focused on 2016, and the club heads into this NPSL season on a high note: Last week, it beat the Pontiac-based Michigan Bucks in the Lamar Hunt U.S. Open Cup exhibition tournament for the first time at Oakland University. Rochester sports entrepreneur Andy Appleby, who led a consortium that owned the second-division British soccer club Derby County FC from 2008-15, said he’s impressed with DCFC’s ownership. “They’ve done a really terrific job in terms of creating a grassroots fan base, and they seem like excellent marketers,” he said. 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 // M A Y 1 6 , 2 0 1 6

AUTISM

Book highlights autism parenting

FROM PAGE 1

productivity in 2015, rising to $461 billion, or 1 percent of U.S. gross domestic product, by 2025, according to a 2015 study by researchers at the University of California-Davis and the University of Denver. Diabetes and attention deficit and hyperactivity disorder (ADHD) are the only diseases that cost more than autism, and neither generally prevents people who have them from working. In the U.S., it’s estimated that more than 3.5 million people and one in 68 children (one in 42 for boys) being born have autism spectrum disorder — a complex brain condition associated with poor communication skills — according a 2014 Center for Disease Control and Prevention study. In Michigan, the state estimates there are 50,000 or more adults with autism, and growing. It’s called a spectrum because the symptoms can range from not understanding nonverbal communication, to lack of empathy, to obsessive-compulsive behavior, to never speaking. Less-severe cases are often called Asperger’s syndrome, but many experts no longer use that term. Roughly a quarter of children with autism cannot speak, but more prevalent are those with average or above-average IQs, nearly 50 percent of those diagnosed, according to a 2014 study. People like Glowacki. “I’m so smart and I haven’t done anything useful (with my life). I want to do something productive. I just want to ... make money and save for retirement and contribute to my household income,” Glowacki said. “But I have no experience, and most (interviewers) don’t have a clue just how intelligent I am. I’m not exactly social. (ASD) makes it difficult for me to understand the process. There are all these rules about what’s acceptable in certain situations, but I’m driven by logic and reasoning. ... I just can’t determine logically what they want to hear.” Dave Meador, vice chairman and chief administrative officer for Detroit-based DTE Energy Co. and founder of the Autism Alliance, said this is where the breakdown occurs, where business and autism don’t mesh. “The basic barrier is social issues,” said Meador, whose daughter has autism and inspired him to get involved in the cause. “Unless an employer is trained on how to interview people with autism, an amazing candidate may get rejected because they had trouble making eye contact (a common characteristic for those with autism). Employers are missing out on opportunities to get great employees.” Employees with autism can be challenging given their unique set of issues, Allen said, such as lack of social skills and social imagination and often brutal honesty, which can come across as rudeness. The U.K.-based National Autistic

Detroit native Ron Fournier’s new book, Love That Boy, made The New York Times top 10 list in May among best-selling books about parenting and family. Fournier, left, a political columnist for The Atlantic and National Journal, wrote about the diagnosis of his son, Tyler, with Asperger’s syndrome and his growth as a parent in relating to his son in new and powerful ways. Reviewers have noted that the book holds lessons for all parents, not just those who have children with autism. The book, published by Harmony Books, is subtitled What Two Presidents, Eight Road Trips and My Son Taught Me About a Parent’s Expectations. Fournier will be a speaker at the Detroit Regional Chamber’s Mackinac Policy Conference on June 2.

institutionalized. Growing up, nobody expected you to make a career out of things you weren’t interested in or good at, so why do we have this intense focus on the disability instead of the strengths? “As an employer, you need to ask yourself whether you’re missing out on talent just because social behaviors may be awkward and uncomfortable. This might not be as radical of a change as we’re making it out to be.” LARRY PEPLIN

“I’m so smart and I haven’t done anything useful (with my life). I want to do something productive. I just want to ... make money and save for retirement and contribute to my household income.” Steven Glowacki Society recommends employers

create well-structured work environments, concise directions and expectations, direct and regular feedback, as well as training of staff the employee with autism may interact with regularly. But the minor inconveniences and new processes can be worth the effort.

The potential benefits In 2007, Walgreen Co. opened a distribution center in Anderson, S.C., and piloted a program to employ workers with disabilities — 33 percent of the nearly 300 workers at that time — many of whom had autism. To accommodate workers with autism, managers are instructed to avoid metaphors and use direct instruction and outfitted a break room with beanbag chairs and puzzles to calm workers with autism who may feel sensory overload from the loud, often frantic pace of a distribution center, Workforce magazine reported in 2012. The Anderson center now employs more than 40 percent with disabilities, and Walgreen opened a similar facility in Connecticut in 2009. The results have been staggering. Turnover among employees with disabilities at Walgreen is 50 percent lower than its non-disabled employees, the Chicago Tribune reported. The accuracy and productivity measurements are also higher among its workforce with disabilities.

Walgreen has since hosted hundreds of companies at its Anderson facility to show the power of hiring workers with disabilities, including DTE in January 2015. “It’s phenomenal what Walgreens has done,” Meador said. “So often this (hiring adults with disabilities or autism) gets framed as charity work. Walgreens proved that’s not the case. So we’re going to step into this and learn what we can do. Walgreens created a more inclusive environment and found workers that can be very loyal, productive and dedicated employees. We want that, and that’s now part of my agenda.” DTE is in the early stages of launching a pilot program, Meador said. The energy provider is currently identifying which managers are receptive to the challenge as well as finding roles that could lead to the best results. Autism Alliance is also working with another large Michigan employer, which will be announced later this summer, to pilot a program. Lt. Gov. Brian Calley said companies are just now starting to “get it,” but that accommodation is still a four-letter word in business. “I think employers are open to the concept of hiring someone with autism, but where we really fall down is the systems of recruiting and accommodating employees,” said Calley, who has a daughter diagnosed with autism. “It was built at a time when people with cognitive disabilities were segregated, or

Matching person to job But Allen fears employers that desire to engage the autism population will look to traditional staffing agencies to fill jobs, something she said doesn’t work. Allen said the agencies simply fill the position with a body and don’t understand the needs of the individual and their skill set as it pertains to each job. “The traditional model is one of placement, and it’s flawed,” Allen said. “That model puts people in a job and walks away. It’s not a model of sustainability.” The Autism Alliance is working to create a new alternative staffing model for adults with autism, one that matches people with autism with the best jobs. This model wouldn’t be sustained by contracts, like the traditional staffing model, but with a buy-in from businesses seeking to employ people with autism. Allen is seeking $500,000 in funding to jump-start the operation. “It should be easy. The company has positions; we’ll send them the best employees. And it shouldn’t be jobs for people with disabilities, it should be all jobs,” Allen said. “Until it becomes that easy, this mission (putting adults with autism to work) will have barriers because employers don’t know where to begin.” On June 21, the state will host in Flint the MI Hidden Talent workshop, organized by Calley and Michigan Supreme Court Justice Richard Bernstein. The workshop will train businesses and their leaders on how to implement hiring practices that encourage employment of people with disabilities. “This is very urgent work,” Calley said. “The ramifications of getting this wrong are extraordinary.”

Wrestling with the future Meanwhile, Glowacki struggles

to fill his day with meaningful, and challenging, tasks. He last held a job at a Troy-based Partners for Progress Inc. via staffing agency Employment Plus, where he fixed cellphones at a much more efficient rate than his peers, he said. He made $10.50 an hour before the business laid him off and eventually went out of business. Professors at Walsh College, where he earned his master’s in accountancy, also occasionally hire Glowacki as a research assistant to write homework assignments and tests for its accounting courses because he knows the material so well. To fill his time, Glowacki watches lectures on YouTube from Massachusetts Institute of Technology

professors and is engulfed in sumo wrestling — not because he’s a sports fan, but because its outcomes can be predicted. He created a predictive modeling algorithm spanning 20 years of data to determine the outcomes of sumo matches. “It’s very simple; easy to understand. One guy wins, one guy loses,” Glowacki said. “I don’t watch the matches, but I found there are fantasy games just like other sports and there’s a lot of data.” In his first year of using his model to predict matches, he finished third in a league of 24 “very active” players out of hundreds of players. Allen said, and Glowacki corroborated, that the isolation and lack of productivity has caused him to be depressed. “To be that intelligent and that highly aware, that’s devastating,” Allen said. “I’m calling everyone I know. He needs a job. He’s not going to be an entry-level accountant. For the right company, he’s going to be something amazing. He could be the best accountant a firm has ever had.” For Glowacki, the workforce is something like sumo wrestling — there are winners and there are losers — and he knows which end of that spectrum he’s on. “With autism, there’s so much focus on kids, the ones that will never be able to live a normal life,” he said. “But there’s a whole group of people with mild issues, like me, that can lead a reasonable life but can’t because they won’t ... they just don’t understand.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

WEEK New St. Clair Shores pro hockey team to unveil name, logo

new minor-league hockey team that will begin play later this year in St. Clair Shores said it will unveil its name, color scheme, logo and uniform design Wednesday. The to-be-named club is a Federal Hockey League expansion team and will play at St. Clair Shores’ city-owned Civic Arena, said Brandon Contratto, the team’s general manager and associate head coach. Its owner is Global Hockey Management Ltd., which was formed to oversee the St. Clair Shores team, Contratto said. The FHL is a developmental organization with six other teams, including one in Port Huron.

COMPANY NEWS n Detroit-based Huron Capital

Partners LLC announced its purchase of the Grand Rapids Auto Auction to roll into one of its portfolio companies, The XLerate Group. Terms were not

announced. Earlier last week, Huron announced it and a partner, Elmhurst, Ill.-based

Duchossois Capital Management LLC, acquired a majority

ownership in Germantown, Wis.-based dock and truck equipment maker Systems Inc. n Troy-based Altair Engineering Inc. completed the acquisition of electromagnetics software company Cedrat SA of Grenoble, France, and its New York-based subsidiary, Magsoft Corp. Terms of the deal were not disclosed. n Birmingham-based Soaring Pine Capital announced the acquisition of Chicago-based Technology Solutions Inc. through its Soaring Pine Capital Growth Fund I, funding the transaction through a combination of equity and mezzanine and senior debt. Soaring Pine will provide support through a holding company, Tikoo Solutions LLC. Terms were not announced. n Pontiac-based My Postal Credit Union was merged into Waterford Township-based Oakland County Credit Union. My Postal, which was founded in 1928 and was one of the oldest credit unions in the state, had a single location, inside the Pontiac Post Office. With the deal, OCCU has six branches and more than 30,000 members and $300 million in assets. n The Detroit Free Press is suing Orion Township after receiving two $800 littering tickets for delivering a free weekly shopping guide to residents, AP reported. Township officials say many residents don’t want the publication, called Select, which arrives in pink plastic bags on porches or driveways. The

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

ON THE WEB May 7-13

Detroit Digits A numbers-driven look at last week's headlines:

$2.1 million The cost of the planned expansion

of Majestic Industries Inc., a Macomb Township-based die-maker. The project, slated to create 25 jobs, will be funded in part by a $210,000 performancebased grant from the Michigan Economic Development Corp.’s Michigan Strategic Fund.

$22 million The amount of a settlement,

approved by Detroit City Council, stemming from the financing of the Westin Book Cadillac Detroit hotel. The settlement would mitigate a money-losing investment made by the city and two Detroit pension funds in a hotel development that spurred downtown’s revitalization following the recession.

11.1 percent The increase in home and

condominium sales in the metro Detroit region — Wayne, Oakland, Macomb and Livingston counties — in April from the previous month, according to Farmington Hills-based Realcomp Ltd. II. Sales went from 4,004 to 4,449. Median sale prices increased 6.9 percent, from $145,000 to $155,000, during that same period.

newspaper, which says the publication is protected by the First Amendment, said it filed a lawsuit in federal court to stop the township from interfering. It also is seeking millions of dollars in punitive damages. n Filson, a Seattle-based manufacturer and outdoors outfitter, opened its first Michigan store, at 441 W. Canfield St. in Detroit. The store is in the former home of Willys Detroit. n Revenue for Detroit’s three casinos — Greektown Casino-Hotel, MGM Grand Detroit and MotorCity Casino-Hotel — climbed 1.5 percent in April compared to a year earlier, but fell 2.1 percent from March. Year-to-date aggregate revenue rose 0.6 percent compared to last year, the Michigan Gaming Control Board said.

OTHER NEWS

n The Detroit Public Schools will defer the opening of collective bargaining discussions with unions until after Michigan lawmakers take action on the district’s enormous debt, AP reported. Also, Norman Shy, a contractor accused of paying kickbacks to get business from DPS schools, pleaded guilty in federal court and said 12 principals and an administrator charged in the scheme conspired

with him to get gift cards or cash. The district’s deteriorating finances may result in a bankruptcy filing if state lawmakers don’t agree on a rescue package within the next two months, according to Moody’s Investors Service in a Bloomberg report. n Dan Gilbert has purchased two more buildings along Woodward Avenue in downtown Detroit. Gilbert, founder and chairman of Detroit-based Quicken Loans Inc. and Rock Ventures LLC, bought the 43,000-square-foot Grinnell Building and the 40,000-squarefoot Sanders Building just north of Clifford Street, a spokeswoman for Gilbert’s Bedrock Real Estate Services LLC confirmed; dBusiness first reported the news last week. The seller was Farmington Hills-based Howard Schwartz Commercial Real Estate LLC. The purchase price was not disclosed. n The U.S. District Court for the Eastern District of Michigan entered a permanent injunction against Detroit-based Scotty’s Inc. Scotty’s, which also did business as Bruce Enterprises and Bruce’s Fresh Products, makes and distributes packaged sandwiches to local police departments and gas stations in Michigan and Ohio, according to the U.S. Department of Justice. The injunction is in response to a U.S. Food and Drug Administration complaint that alleged Scotty’s prepared and packaged sandwiches in unsanitary conditions and that the business didn’t follow health code protocol. n Thanks to the presidential election, the Detroit market’s nine TV stations will see a combined $36.2 million in new broadcast advertising revenue this year compared with 2015, according to a report from Chantilly, Va.-based broadcast industry analysts BIA/Kelsey. Locally, the stations are predicted to collectively take in $337.6 million in over-the-air ad revenue in 2016, up from $301.4 million in 2015, according to the report. n Detroit-area voters could be asked to approve a transit tax that is no higher than 2 mills under a bill advancing in the Michigan Legislature, AP reported. The measure was approved by the Senate last week and sent to the House for consideration. The Regional Transit Authority of Southeast Michigan plans to ask

voters in Wayne, Oakland, Macomb and Washtenaw counties to approve a property tax millage in November.

OBITUARIES n The Rev. David Eberhard, who

served as pastor of Detroit’s

Historic Trinity Lutheran Church

from 1983 until last August and was a member of City Council from 1969 to 1993, died May 10. He was 82.

DETROIT MOWER GANG

Tom Nardone, founder of the Detroit Mower Gang, checks out one of the new mowers. Craftsman will formally donate the equipment at the Motown Mowdown.

RUMBLINGS Craftsman donates $18,000 worth of equipment to Detroit’s Mower Gang

he Detroit Mower Gang, a volunteer group of community activists that has been grooming parks in Detroit since 2010, is about to launch its 2016 mowing season in fine form, thanks to the donation of $18,000 worth of lawn and garden equipment from Craftsman. The donation includes five riding mowers, trimmers, hedgers and other gear. Craftsman is also the sponsor of the gang’s Motown Mowdown, the annual kickoff event on May 21, where 100 volunteers will mow and clean as much park land as possible in 12 hours. The Mowdown starts at 10 a.m. May 21 at O’Shea Playground, at the southwest corner of I-96 and Greenfield Road. Following a ceremony where Craftsman officials will formally make their donation, the gang will mow the playground and then head out to other parks in the city. The public, and those interesting in become members of the gang, are invited to the ceremony.

Ideal Group’s Venegas to get honorary doctorate In the season for college commencements and honorary degrees, Detroit’s Frank Venegas is going Ivy League. Venegas, founder and CEO of the Ideal Group in southwest Detroit, will receive an Frank Venegas: Dartmouth honors honorary doctorate at to come. Dartmouth College’s

commencement in Hanover, N.H., on June 12.

Venegas, his daughter Linzie and son Jesse are graduates of the Tuck Minority Business program in the Tuck School of Business at Dartmouth. Venegas has also funded scholarships for other minority entrepreneurs to attend the program. Other honorary degree recipients include Nobel Peace Prize Laureate Leymah Gbowee from Liberia, who will deliver the commencement address. Venegas will be honored for his business success in creating a thriving automotive supplier while building community engagement and employing workers from the neighborhoods nearby.

Local company created app praised by Leapfrog The Leapfrog Group is a Washington, D.C.-based nonprofit that monitors the quality of America's health care, and its spring report is to hospitals what the J.D. Power rankings are to automakers. Not so well known is the local tech company that created the smartphone app that consumers can use to get details about how their local hospitals fared according to Leapfrog. It is Patient Access Solutions, which was founded in 2014 and is based in Farmington Hills. Its free Hospital Safety Score app was trumpeted by Leapfrog and is available for Apple and Android devices. Sam Compton, one of PAS’ co-founders, serves on Leapfrog’s partner’s advisory committee. The company, which uses 10 contractors for its IT projects, also created an app that helps patients navigate the new Beaumont Health System, created when Beaumont Hospital, Oakwood Hospital and Botsford Hospital merged. The other co-founder is a doctor, Richard Fessler.

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