Crain's Detroit Business, June 20, 2016 issue

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How the Affordable Care Act has changed the game for doctors’ offices, Page 9

JUNE 20-26, 2016

A jolt to energy policy? As a legislative deadline looms, a state senator quietly floats a revised plan that would scale back the energy planning process for utilities but allow outside companies to bid on individual power projects By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

LANSING — Some state lawmakers will spend this summer working to earn enough votes to pass the biggest overhaul of Michigan’s energy policy in eight years, with just 25 scheduled session days left before the end of the legislative term. That deadline is looming amid summer break and elections this fall for the state House. Adding to the pressure: Republicans and Democrats in the Senate remain far apart on a package of bills sent to the full body shortly before the Legislature left for break. Now, Sen. Mike Nofs, who as chairman of the Senate’s energy committee has spearheaded the two-bill energy pack-

age, is quietly floating revisions to business leaders that would drastically scale back a process to plan for utilities’ long-term electricity needs in exchange for allowing outside companies to bid on individual power projects. Nofs, R-Battle Creek, said concerns from the Michigan Chamber of Commerce prompted him to

work this summer on rewriting bill language. The substitute version of Senate Bill 437, obtained by Crain’s, has not yet been presented to the full Senate, Nofs’ office said. The draft policy is circulating among chamber members in hopes of winning support from the business community, particularly as Nofs tries to secure votes from Republicans. The major difference: Rather than SEE ENERGY, PAGE 18

Seeking answers on emissions By Jay Greene jgreene@crain.com

The statewide and national conundrum over clean energy regulations could be partially solved by a tax on carbon producers or a system of tradeable permits for pollution producers, according to a new report. A report by the Anderson Economic Group LLC in Lansing concludes that using a “cap and trade” or “carbon tax” approach in Michigan to comply with the proposed Clean Power Plan — the Environmental Protection Agency regulations to significantly reduce U.S. power plants’ carbon dioxide — would be costly for Michigan residents, raise business costs and act as a damper on economic development. But doing nothing and allowing current energy production and efficiency trends to continue over the next decade will not reduce carbon dioxide pollution from power plants enough to comply with carbon reduction targets contained in the EPA's proposed plan, said Patrick Anderson, the study’s author. SEE EMISSIONS, PAGE 17

Orlando shootings one more grim security reminder for large venues By Sherri Welch swelch@crain.com

Security command centers in private Detroit buildings are nothing new. Many Detroit companies use sophisticated security centers to keep an eye on their buildings and surrounding areas and to coordinate security with local law enforcement

and other businesses. But command centers are also taking root in surprising places. “A lot of churches have a command center that would blow you away,” said Brian Fountain, a detective and investigator with the Detroit Police Department. “They actually have a room watching the parking lot with seven

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or eight monitors,” and two-way radios to communicate with those monitoring the parking lot and front door, he said. Area churches began scaling up security efforts and taking part in shooter training with the DPD even before the attack that took 49 lives in Orlando early last week, Fountain said. Church interest in the training increased following February reports that a 21-year-old Dearborn man who was arrested on marijuana and weapons charges had planned to attack a large Detroit church — which came only months after an African-American church in Charleston, S.C., was the scene of a mass shooting that killed nine people. The high-profile shootings, and others that have received national

BLAKE FROLING

Churches like Detroit’s Triumph Church and other public spaces have taken added security precautions amid high-profile mass shootings. attention, have many types of businesses and public venues thinking hard about security. DPD is advising churches to amp up vigilance of their parking lots

and front doors, watching for anything out of the ordinary and communicating it immediately if they see it. They’re advised to move SEE SECURITY, PAGE 15

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MICHIGAN

BRIEFS West Mich. manufacturing forecast eases – economists

Economists in West Michigan note that weaker-than-expected sales of passenger vehicles have resulted in the flattening of the region’s manufacturing sector, while depressed energy prices continue to hold down the oil and gas industry. “Over the last 18 months, the different measures we have of manufacturing have been cycling down,� Paul Isely, associate dean at the Seidman College of Business at Grand Valley State University, told MiBiz in a recent report. “Individual months can come up, but overall we’re seeing it cycle down.� West Michigan manufacturers reported a drawdown in new orders and production, according to the recent Current Business Trends report published by Brian Long, director of supply management research at GVSU. Long’s index of new orders flattened in May while the production index also weakened, although it still showed signs of slow growth. “A lot of companies are thinning up inventories, especially ahead of the election, because of uncertain-

ty,� Isely said. “If we start to see that type of drawdown continue, it will affect orders in the short run.� While Isely said he remains neutral on his outlook for the West Michigan manufacturing economy, he said the region’s manufacturers focused on international markets will most likely see exports decline as uncertainty in the global market continues to mount and the U.S. dollar strengthens through the year.

EPA chief: ‘Systemic’ issues with Flint water safety The nation’s top environmental regulator warned of “systemic issues� that threaten the long-term ability to provide safe drinking water to Flint after the city’s lead contamination crisis subsides, AP reported. Environmental Protection Agency Administrator Gina McCarthy said the city’s distribution system is too big, letting water stagnate in pipes and potentially preventing chlorine from fighting disease-causing pathogens. In a letter, she alerted Gov. Rick Snyder and Flint Mayor Karen Weaver that Flint’s water plant is understaffed and lacks enough experi-

A CPA that understands Medical Practice Management?

enced employees. Her other concerns included long-term financial planning and if city administrators could reliably provide administrative support. A Snyder spokesman said the letter was being reviewed.

MICH-CELLANEOUS n A $12 million renovation planned for a historic guitar factory in Kalamazoo will include a beer garden, a bar or restaurant and observation areas. Kalamazoo-based commercial real estate agency PlazaCorp. wants to develop the 5-acre site that’s home to Heritage Guitar Inc. in a mixed-use fashion, the Kalamazoo Gazette reported. The building will feature upgraded and expanded manufacturing space for Heritage and other tenants. Heritage has been operating in the space since Gibson Guitar Corp., which opened in the building in 1917, moved to Tennessee in 1984. n Michigan State University will install permanent lighting at Spartan Stadium in time for the 2017 season. The university’s governing board last week approved the new lighting project for the football stadium, which could cost between $2.2 million and $2.5 million. University President Lou Anna Simon said the project won’t cost students anything because the athletic department’s budget is “self-sufficient,� meaning it doesn’t come from the school’s general budget, AP reported. n The Department of Natural Re-

sources said the state has spent $2.9 million to purchase 717 acres in Jackson County’s Norvell Township to create Michigan’s 103rd state park, AP reported. It’s being combined with 405 contiguous acres in Manchester Township owned by Washtenaw County and will be called the Watkins Lake State Park and County Preserve. n The Michigan Department of Environmental Quality said more than $2.9 million in grants will help develop new uses for old vehicle tires, AP reported. The grants support Gov. Rick Snyder’s initiative to double the state’s residential recycling rate to 30 percent. n An organization representing Great Lakes governors and premiers has released a plan for improving the region’s maritime transportation system. Gov. Rick Snyder of Michigan and Premier Kathleen Wynne of Ontario announced the strategy in Detroit, AP reported. The goal is to double the economic output of the $30 billion maritime industry in the Great Lakes and St. Lawrence Seaway. Among the proposals are building another lock at Sault Ste. Marie that can accommodate the largest freighters, and more dredging of key channels and harbors. n Michigan’s real, inflation-adjusted gross domestic product increased by 2.6 percent in the fourth quarter of 2015, ranking ninth among the 50 states and the District of Columbia for the period. The

Whoa, baby! For ShindelRock, advising medical practices on financial and accounting matters means providing timely information so physician-owner practices can plan accordingly, taking advantage of cost-saving measures that can affect a practice’s profitably and back- office operations. Our medical practice clients, like Women’s Health Consultants, PLC of Novi, rely on the big results ShindelRock delivers, so they can focus on the delivery of (much) smaller things.

INSIDE THIS ISSUE

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

COMPANY INDEX: SEE PAGE 18

state’s fourth-quarter GDP growth outpaced the 0.2 percent increase from the fourth quarter of 2014, according to seasonally adjusted data released by the U.S. Bureau of Economic Analysis. The state’s real GDP reached $474.7 billion in the quarter, up from $454.2 billion a year earlier. n Ludington-based manufacturer Whitehall Industries has been acquired by UACJ Corp., a Tokyo-based aluminum supplier, MiBiz reported. Whitehall Industries, a vertically integrated supplier of extruded and fabricated aluminum components and assemblies for the automotive industry, operates two plants in Ludington and a plant in Paducah, Ky., and runs a processing facility in San Miguel de Allende, Mexico. Whitehall has 800 employees, about 500 of whom are based in Michigan.

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Company opens doors to cancer trials

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Ann Arbor startup aims to use its diagnostics to break drug logjam By Tom Henderson thenderson@crain.com

Strata Oncology Inc.’s business model calls for it to give away at least $300 million in free medical diagnostic services over the next three years. Venture capitalists seem to think it’s a giveaway model that makes sense, having raised $12 million in equity capital for the startup, which is based in Scio Township, west of Ann Arbor. It's a model intended to help fulfill

the promise of a field called personalized medicine by linking those with cancers caused by mutations to clinical trials of drugs targeted for them. The disconnect now, which makes it extremely difficult for personalized cancer treatment to actually be personalized, is that most cancer patients have no idea if their cancer is caused by a mutation, and that pharmaceutical companies trying to do clinical trials on drugs targeting cancer mutations waste years trying to enroll

enough patients. According to Dan Rhodes, Strata's co-founder and CEO, the company plans to break the logjam by offering 100,000 cancer patients free gene sequencing of their tumors over the next two to three years. Private companies, including Foundation Medicine of Cambridge, Mass., charge between $3,000 and $5,000 per patient for such a sequencing. “Strata will revolutionize drug

Dan Rhodes plans

to offer 100,000 cancer patients free gene sequencing of their tumors.

TOM HENDERSON

SEE STRATA, PAGE 16

GreenLight aims nonprofit successes at Detroit By Sherri Welch swelch@crain.com

M-1 RAIL

5 things to know about the QLine The Woodward Avenue QLine trolley system is looking increasingly tangible after our first look at the cars being built that will carry passengers on the line. Here are the crucial facts to know about the system, courtesy of Crain’s reporter Bill Shea:

Cost of Liberty

Car due dates

Car amenities

M-1 Rail, which is the entity managing what is now called the QLine, in June 2015 signed a $32 million contract with Brookville, Pa.-based Brookville Equipment Corp. for six streetcars, along with spare parts and support services. M-1 chose a model called the Liberty.

The first streetcar is 50 percent complete and will arrive in Detroit later this year. The final car will arrive in early 2017. The streetcars will be driven on a large flatbed truck from Brookville to M-1’s Penske Technical Center in the New Center area, where the cars will be maintained.

The three-section, articulated cars are expected to be 66 feet long and be able to carry 125 passengers on average and they will travel up to 35 mph on the 3.3-mile grade-level loop track on Woodward. Amenities in the ADAcompliant streetcars will include Wi-Fi access, vertical bike racks, and full heating and air conditioning.

MUST READS

OF THE WEEK

Lines and batteries The cars can run offline, meaning they’re not always linked to an overhead aerial network of electrical lines to power the vehicles. Sixty percent of the Woodward line will use off-wire technology, with the streetcars operating on battery power provided by 750-volt rechargeable lithium-ion batteries.

Cost to ride Fares for the Woodward line are expected to be $1.50, and a variety of passes and fare options will be available.

Boston-based GreenLight Fund, a nonprofit that’s helped fill service gaps for impoverished families in other major U.S. cities by importing best-in-class nonprofits to work on the issues, is coming to Detroit. Local corporations, foundations and leaders have contributed $3 million to $4 million to support GreenLight Detroit’s first five years of operation, outpacing the other cities where the nonprofit operates, both in the initial amount raised and the number of funders contributing. Launched in 2003 by John Simon, a managing director of Boston-based Sigma Prime Ventures, and GreenLight executive Margaret Hall, GreenLight works to improve the lives of families in high-poverty urban areas by working with an advisory committee of 20-30 local nonprofit, social entrepreneur, business, government and educational leaders to identify the most pressing, measurable service gaps — one each year. It then does extended due diligence and imports from other parts of the country nonprofits with a proven track record of helping solve that problem to work in Detroit long term, even after initial support from GreenLight expires. And it sets annual, measurable goals with the new nonprofits to gauge progress. SEE GREENLIGHT, PAGE 18

Crunch time

DMC construction

Riverfront deal

Shinola taps former

Report finds promised

Towers sell for nearly

Lions President Tom

investment mostly on track,

$80 million to New York

Lewand as CEO,

with a couple of exceptions,

investment group,

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Report: DMC’s promised $350M capital project goal nearly met; issues remain By Jay Greene jgreene@crain.com

Detroit Medical Center is in substantial compliance with the 2010 purchase agreement that led to its conversion to a six-hospital for-profit system now owned by Dallas-based Tenet Healthcare Corp., according to Legacy DMC’s fifth annual report. But the difference in capital spending promised and capital spending completed, paired with a refusal to escrow certain funds, are two lingering issues. Dick Widmer, chairman of Legacy DMC, the nonprofit board charged with overseeing the agreement for 10 years, said two contract violations were reported last week to Michigan Attorney General Bill Schuette that the board hasn’t been able to resolve with DMC. Despite spending $117 million on routine capital expenditures last year in an effort to catch up, DMC came up $3.9 million short on its commitment to spend $350 million to improve its hospitals by Dec. 31, 2015. DMC agreed to spend the $350 million on routine capital projects in the first five years of the agreement. Conrad Mallett Jr., DMC’s chief administrative officer, told Crain’s that DMC expects to spend the $3.9 million this year on unspecified projects. He said Legacy DMC will be fully informed of the exact projects in its next report. “We are concerned that they haven’t communicated how they are going to make up the $3.9 million or when,” Widmer said. But Widmer added: “From my perspective as I look at it, over the five years, DMC has substantially completed its agreement. There is a shortfall, but it is not a large issue. They are close, and we expect them to fulfill their commitments.” Some of the completed capital projects include the new DMC Heart Hospital patient tower, DMC Sinai Grace Hospital emergency room expansion and intensive care unit renovation, DMC Huron Valley’s ICU, and the façade and unified lobby at Harper. The report also said that DMC came up $80.5 million short by the end of last year in its obligation to spend $500 million on specified capital projects. DMC, however, has refused to escrow the $80.5 million, as the contract requires, Widmer said. Mallett said DMC expects to spend the $80.5 million by the end of 2017, when the new DMC Children’s Hospital patient tower and renovation project is completed. The five-floor, 226,000-square-foot tower is about half done and is expected to be completed by March. The project’s cost is about $163 million. The old Children’s Hospital will be renovated and employees and patients will be relocated for the grand opening in December 2017, Mallett said. Widmer said Legacy DMC considered suing DMC to force compliance with the contract, but decided

litigation would most likely take longer than the tower construction. He said Legacy DMC expects the Children’s Hospital tower project to be completed. But the refusal to escrow the funds, as DMC has done in the past on other projects, is a clear violation of the agreement that was reported to Schuette, Widmer said. “There is a loophole in the agreement that says if there is a change in reimbursement policies by Mediare or Medicaid that has the effect of having a negative impact in system,” the escrow can be withheld, Widmer said. “(DMC) says this was a change in reimbursement policy. We say it is just a continuation of existing policy,” he said. “We took that to the AG office to make sure our interpretation was correct and (the AG) agreed with us.” Schuette’s office declined to comment. Mallett said Tenet’s lawyers concluded the contract allows DMC to withhold escrow payments if there is a “discriminatory reduction in state and federal funding.” He said the state conducted an audit for the Centers for Medicare and Medicaid Services and determined Children’s Hospital had been overpaid during 2014.

“The calculation was wrong and the ($22.7 million) takeback should not have occurred,” Mallett said. However, Mallett said DMC felt it made its point and did not appeal the $22.7 million funding takeback. “These people (Legacy DMC) are our friends,” Mallett said. “We are not trying to play hide the ball with our friends. Within the confines of our corporate responsibilities,” Tenet and DMC decided not to escrow the $80.5 million. “It is inconceivable we would not complete the (Children’s) tower,” he said. Legacy DMC also reported that DMC has met the charity care, educational and research commitments and clinical service requirements. Over the past two years, because of Healthy Michigan Medicaid and private insurance expansion, Legacy DMC reported that DMC’s bad debt and charity care expenditures, which are considered uncompensated care, have “decreased dramatically,” nearly 70 percent. Widmer said more than $100 million a year had been written off in bad debt and charity care. Now, annual uncompensated care expended totals $30 million to $40 million, he said. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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OPINION

Lawmakers need more time on energy policy R

ules that govern the energy business are complex. There are lots of pulleys and levers driving the way power plants and power grids work together. Meanwhile, there also is an acknowledged need for more green energy sources and the need to balance the concerns of businesses, consumers, utilities and environmental advocates. The state Legislature, as Lindsay VanHulle and Jay Greene report in their Page 1 story package, is working aggressively on new energy rules in Michigan. With summer break in full swing and only 25 scheduled session days before the end of the legislative term, lawmakers have a lot to wade through, including potential revisions to a two-bill energy package expected to drop in late summer or early fall. These revised bills intend to scale back a process for utilities to plan for long-term needs in exchange for allowing outside companies to bid on individual power plant projects. The amended bills would, instead, push a “certificate of necessity” process through which utilities need to earn state approval before getting the nod to build any new plant. Separately, a new report detailed in Greene’s story examines the pluses and minuses of considering a so-called “carbon tax” that levies a charge to carbon producers. Why is reform so urgent? Utilities say that without a new set of state rules soon, and the go-ahead on some capital projects, the system could face reliability issues. This is a valid concern. However, when grappling with regulations of this magnitude, more time is needed. Can lawmakers without the appropriate engineering, regulatory and other kinds of backgrounds really make an informed decision with a set of mad-dash hearings and a cursory review of the options? There are plenty of other policy topics to tackle in the remaining legislative sessions; lawmakers should make energy reform an early 2017 priority.

Raise for primary care docs logical The Affordable Care Act had a number of consequences, intended and unintended, good and bad. In one example, as Jay Greene outlines on Page 9, it is contributing toward a pendulum swing that gives primary care physicians a pay boost. With health care reform, primary care physicians have more responsibility than ever before when it comes to coordinating care, checking for medication interactions and aiding patients in their management of chronic diseases. So, with the primary care doctors — such as family physicians, pediatricians and internists — orchestrating the care to an even greater degree than before, primary care compensation has increased an average of 18 percent since 2010. What’s the average salary? These days, the average is $250,000 nationally and somewhere north of $272,000 in Michigan. Specialists such as surgeons, cardiologists and neurologists still earn more than that, on average, but a payment model that is driven by how Medicare and private payers are rewarding front-line doctors for quality makes sense. The laws of economics strike again.

Why does one entrepreneur succeed over another? 'Irrational persistence' It is always fascinating to talk to entrepreneurs about the factors that propelled them to big success. One part raw hustle, one part product or service differentiation and one part serendipity. Dave Zilko, the former vice chairman of Garden Fresh Gourmet, was the business partner with Jack and Annette Aronson, joining just after the salsa company’s early struggles, playing a critical role in its exponential growth and, finally, serving in key roles during the negotiations that led to the company’s big sale to Campbell Soup Co. last year. Zilko has a new book out centered on what he considers the secret salsa of entrepreneurship. The book title is Irrational Persistence — which Zilko describes as that fundamental drive that keeps an entrepreneur going, even when things aren’t going exactly according to plan. Before Zilko teamed up to be part of the well-chronicled Garden Fresh success story, he was trying to grow businesses making marinades and British-style mustard. But, as he explains in the book published by Wiley & Sons (and available on Amazon and elsewhere), consumer demand for those products had already peaked and, with it, the opportunity to grow them into sizable businesses. Before the marinade and mustard businesses, the MBA grad was selling financial securities. Why didn’t Zilko just throw in the towel and do something else? There was a gap between the level at which he was living his life, both his professional and financial

Re: Legislature OKs $617 million for ailing Detroit schools Nice to see both parties working together to accomplish this; we need to

KEITH CRAIN Editor in chief

tourists from out of state or the folks who every weekend are trying to head up north for the weekend. Let's face it: At this time of year, our

Editor

fulfillment, and the life he had envisioned for himself. “That void was unacceptable to me,” he said. Also unacceptable: giving up. When Zilko met Jack Aronson at a food show in New York, Garden Fresh had some good momentum, with its products picked up at that point by Meijer Inc. and a new manufacturing plant in Ferndale. But there were some important changes yet to be made in product marketing and labeling, and big distribution network opportunities, such as the opportunity for placement in Costco stores, yet to be won. But before Zilko helped with all that, he simply was hoping Aronson would work with him to help grow his salad dressing business. Zilko accepted the offer of a free office at Garden Fresh’s new plant site, and in short order Aronson brought him onto the Garden Fresh team to focus on sales and marketing. The New York conversation was the serendipity piece. “Timing is everything,” said Zilko, who is keeping busy on his book-signing tour and by mentoring about a dozen food companies in addition to his duties as CEO of

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

work on a long-term strategy.

ADA3

This legislation, soon to be signed by the governor who once again has chosen financial expediency over human well-being, was both crafted and dictated verbatim by the charter

Roadwork season is like taking cod liver oil There are few times better in Michigan than summer. Lots going on and, for the most part, it is impossible to complain about the weather. But there is one part of this season that, along with most other folks who live here, I simply hate. This is our season for orange barrels. Construction is everywhere — turning every simple outing into a nightmare. It seems that almost every trip is 50 percent longer because of all the construction. I take pity on the unsuspecting

JENNETTE SMITH

road system is a mess. I look at it a little bit like being sick. (And they are giving me strong medicine to get well.) I simply don’t like that medicine. No one does like it. But after years of ignoring our roads and bridges for way too long, we are doing what has to be done. It is long overdue. Our highway system is really an embarrassment for our residents and, just as importantly, to our tourists who are spending lots of money in our economy. Hopefully those truckers

school and for-profit education lobby. Their intention was never to save the Detroit Public Schools, but instead to kill it and award the remains to their financial patrons. Avid CDB reader

won’t destroy the new roads before they’re finished. Transportation is the lifeblood of our Michigan economy. We are long overdue to fix and maintain our highway system. I can only hope that we are specifying that our highways and bridges will last for decades, not months. That would be an even greater tragedy. We need the best system in the country. That is simply good business. We should have been maintaining this road system for the past 50 years and should have never let it

Fuel Leadership LLC, which produces leadership conferences. Along the way, there were lessons to be learned about staying true to quality standards. For example, there is Garden Fresh’s famous adherence to making small batches in 5-gallon buckets. The book also provides some less well-known anecdotes about Garden Fresh. Despite mighty efforts to find efficiencies (and save employees' tears) from working with fresh onions, all manner of high-tech devices and frozen onion options were considered. Only fresh onions would do to preserve the product’s unique taste. The book also contains some stories about middle-of-the-night drives for product delivery or mishaps with forklifts. It’s a fun read. During my conversation with Zilko earlier this month, we talked about everything from the “entrepreneur gene” that some people seem to just be born with to common missteps by business owners. Many entrepreneurs don’t read the signs right in their first foray into business and spend a long time, as Zilko puts it, in their “dark room”— a place of uncertainty that may last a short while or decades. Then, something happens, the serendipity piece, and it’s up to the entrepreneur to seize the moment. Zilko remembers saying to Aronson, in 2002, “if we could ever get this to $10 million (in annual sales), and pay attention to our margins, wouldn’t that be a great life?” Campbell’s price for Garden Fresh, after some wrangling on both sides: $231 million.

Re: Detroit dwellers came for tax breaks, but will they stay? How about righting the tax rate as the Neighborhood Enterprise Zone reductions end so that everyone pays a fair share? Nathaniel Warshay

$500 on a $300,000 condo! Perhaps the tax increase could be gradual.

254624

decay to this degree. Meanwhile, we all have to tolerate a really lousy construction season. Sadly, no one has invented a way of repairing our highways without closures and blocked lanes that cause us to face a sea of red taillights. But if you want to talk about commerce, then we have to fix these roads. Sadly, our Pure Michigan means Pure Orange Barrels all during our good weather. It's like cod liver oil. I don't like it at all — but I know it's good for me.

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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 // J U N E 2 0 , 2 0 1 6

Shinola hires former Lions President Lewand as CEO By Bill Shea bshea@crain.com

Shinola Detroit LLC has sold a custom Detroit Lions football and has a clock in front of Ford Field. Now it has turned to former Detroit Lions team President Tom Lewand to become its CEO. Lewand will lead the 5-yearold company as it continues to expand its brand domestically and globally. As CEO, Lewand replaces Tom Lewand: To Steve Bock, a become CEO of Fossil former Shinola Detroit. Group Inc. division president who becomes CEO of Shinola sister retailer C.C. Filson Co., the Seattle-based manufacturer of upscale outdoor gear, clothing and luggage. Current Shinola President Jacques Panis will report to Lewand, who becomes the company’s first executive from metro Detroit, and to Shinola founder Tom Kartsotis. “Bringing Tom Lewand onto the team is enabling us to expand the reach of Jacques Panis into some interesting new initiatives that we are pursuing,” Kartsotis said in a statement Thursday evening. “Jacques does something that amazes me every single week. He also does something that makes me crazy every week so our customers and supporters can continue to expect the unexpected from Shinola.” Lewand was fired by Lions owner Martha Firestone Ford in November after 20 years with the team, along with General Manager Martin Mayhew, at the start of a sweeping front office restructuring for the moribund National Football League franchise. He was appointed to an interim role as the Lions’ top front office executive after Matt Millen was fired during the winless 2008 season. He had been COO under Millen, and reshaped the team’s business operations and strategies when he became team president in January 2009. Football insiders credited him with modernizing a business operation that has lagged somewhat behind the rest of the corporatized NFL. The team made the playoffs twice under Lewand as president, but struggled otherwise on the field. Lewand was the team’s top contract negotiator, a critical job under the NFL’s complex salary cap rules, and was intimately involved in all major business decisions for the team. He joined the Lions in 1995 after getting his law degree from the University of Michigan and working for political figures and law firms. His father is F. Thomas Lewand, a member of Detroit Mayor Mike Duggan’s Cabinet and a longtime Michigan Democratic Party figure. The younger Lewand was honored as a 1997 Crain’s 40 Under 40 honoree for his role in the creation of Ford Field. On the negative side, he was arrested for drunken driving in 2010, but has subsequently spo-

ken publicly about successfully battling an alcohol problem. Now, Lewand will tap his considerable Rolodex for Shinola, whose watches are worn by the likes of President Barack Obama and former President Bill Clinton, along with a slate of celebrities. Shinola was founded in 2011 by Kartsotis through his Plano, Texas-based venture capital firm Bedrock Manufacturing Co. Kartsotis built his fortune after he founded the Fossil watch brand in 1984. He decided in 2011 to launch a watch business in Detroit to help

spur job creation as part of the city’s economic recovery narrative. It has subsequently expanded to bicycles and other products available online and 15 stores, including Detroit and Ann Arbor. The chain is opening stores in Toronto, Brooklyn, Hawaii, and two in Los Angeles by the end of the year, which will give it 20 globally. Shinola has 530 employees, with 397 in Detroit. About 240 work in manufacturing. Bedrock Manufacturing also made several other Shinola promotions: n Christopher Hull to chief mer-

chant, reporting directly to Kartsotis. n  Shannon Washburn to vice president of watch product development. n  Kara Berg to vice president of sales. n  Whitney Delgado to vice president of design. n  Trish O’Callaghan to vice president of communications. The New York Times in January reported that Shinola had $60 million in 2014 revenue. The Chicago Tribune in March 2015 reported that revenue was $80 million from the start of watch production in mid-

2013 through the end of 2014. Shinola sold 170,000 watches in 2014, the Tribune reported, which the newspaper said was triple the number from 2013. Shinola has taken some criticism for its “Built in Detroit” marketing slogan because the movements for its watches are manufactured by Ronda AG in Switzerland and Thailand. The watches are assembled at Shinola’s factory on the fifth floor of the College for Creative Studies’ A. Alfred Taubman Center for Design Education. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

Helping bring progress and promise to communities since 1866. 150 years ago, we opened our fi rst branch. There were no debit cards or mobile apps. Heck, there wasn’t even electricity. All we had were our bankers, their pens and a promise. A promise that we’d help build the community. A promise to communicate honestly with our customers. And a promise to do the right thing. Keeping this promise has led to some extraordinary things over the last century and a half, but none greater than the privilege of helping transform the lives of people right in our own backyard.

Member FDIC. ¥® and Huntington® are federally registered service marks of Huntington Bancshares Incorporated. Huntington® Welcome.TM and Welcome. Our story for generations.SM are service marks of Huntington Bancshares Incorporated. ©2016 Huntington Bancshares Incorporated.

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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 // J U N E 2 0 , 2 0 1 6

Riverfront Towers sell for $79.5M New York City investor paid about $143,000 per unit By Kirk Pinho kpinho@crain.com

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A major New York City real estate investor has purchased the Riverfront Towers apartment high-rises along the Detroit River for $79.5 million. Image Capital LLC, founded by Asher Koenig, is the new majority owner of the two apartment towers totaling 557 units as the result of a deal that closed last week. Koenig confirmed the purchase but declined further comment. The purchase price amounts to $142,729 per unit. The seller was Riverfront Tower Holding LLC, which is controlled by a group of private New York City investors. Crain’s first reported that the towers were for sale in July. Image Capital is the owner of significant East Coast office properties such as the 300,000-square-foot CNN Building in Washington, D.C.; the 1.2 million-square-foot One South Wacker in Chicago; and the 360,000-square-foot 55 Broadway in New York City, among others in Orlando, Fla.; Daytona Beach, Fla.; and Minneapolis. It also owns the 1 million-square-foot Regions Tower in Indianapolis. The new management company is Indianapolis-based Apartment Management Professionals Residential, which manages Michigan

apartment properties in Grand Rapids, Grand Haven, Holland, Mount Pleasant and Lansing, according to the company’s website. The company has an office in Grand Rapids. The towers were built in several phases, starting in 1982. The 26-story Tower 100 was built in 1992, while the 29-story Tower 200 was built in 1982-83, according to the Berkadia website. Tower 300, which was converted into 285 condominiums between 2005 and 2007, is not included in the sale. That was the first Riverfront Towers building completed, with construction beginning in 1982 and completed in 1983. There wasn’t always to be a mix of apartments and condos there. A plan to convert all of the buildings into condos ran into the economic downturn, and only Tower 300 made it to the for-sale market. The complex, which was a joint venture between A. Alfred Taubman and Max Fisher, fell into receivership after the previous owners, Empirian at Riverfront LLC of Montvale, N.J., and Aintsar Riverfront LLC of Monsey, N.Y., defaulted on a $55 million mortgage.

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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 // J U N E 2 0 , 2 0 1 6

JAY GREENE

SPECIAL REPORT: HEALTH CARE

jgreene@crain.com Twitter: @jaybgreene

Increased

Primary care physician pay up since ACA

efficiency, growth in patients and revenue among

S

ince 2010, when the Affordable Care Act was approved, primary care physician salaries have grown 18 percent to average more than $250,000 in 2015, according to the most recent survey by the Medical Group Management Association. Compensation for primary care physicians — internists, family physicians and pediatricians — rose faster than specialist pay, which rose 11 percent during that period, MGMA said. “Practices are giving primary care physicians significant new responsibility for coordinating care among specialists, managing patient medications and helping patients and caregivers manage chronic conditions,” Halee Fischer-Wright, M.D., MGMA president, said in a statement. “As we shift toward value-based payment, practices will continue to look to primary care and non-physician providers to lead efforts to improve patient experiences and the quality of care they provide.” In 2015, the MGMA survey found that median primary care doctor compensation rose 4.3 percent to $251,578 compared with 2014. Specialist compensation rose almost 3 percent to $425,509 in 2015. While MGMA did not break out average physician compensation by state, Medscape data showed the top 10 states for physician compensation and the bottom 10 states. For example, the No. 1 state for average physician income is North Dakota at $348,000, with No. 10 Arkansas at $299,000. The bottom 10 states are led by New Mexico at $272,000, with Rhode Island the lowest at $224,000. So, the average income in Michigan for physicians has to be between $272,000 and $299,000. Surgeons, however, still report the highest total compensation. They include pediatric cardiovascular and neurological surgery, orthopedic spinal surgery, and neurological surgery. Cardiologists, gastroenterologists and anesthesiologists also were top average earners, MGMA said. Much of the reason for increasing primary care physician compensation has to do with how Medicare and private payers are rewarding frontline doctors for quality and keeping patients out of expensive hospitals. Specialists tend to treat more complex cases in a hospital where health care costs are known to mount. Value-based reimbursement models have been stimulated by Medicare under Obamacare which, in an effort to curb rising costs, emphasizes less expensive outpatient care over inpatient care. Another survey by physician staffing firm Merritt Hawkins said that 32 percent of physicians earned a production bonus based on quality metrics, compared with 23 percent in 2014.

the results of Obamacare

ACA checkup By Jay Greene

ing,” Matuszewski said. At Henry Ford Medical Group, CEO William Michael Williams, M.D., said his medical Conway, M.D., said the Affordable Care Act’s group has seen growth in patients and reve- health insurance expansion provisions have nue under the Patient Protection and Afford- created historic growth at the 1,100-physiable Care Act of 2010. cian group. But — like many physician groups — Wil“Across all payer categories, we are having liams’ practice also has had to deal with in- the best three-year run in 20 to 30 years” with creased regulations and compliance costs 11 percent revenue growth and a slightly that have forced the group to improve effi- lower percentage of patient volume increasciencies to maintain profit margins. es, said Conway, noting about 50 percent of “Our group is seeing more pathe growth is newly insured patients, and we have hired advanced tients and the other half marInside: practitioners to alleviate the backket-share gains. How small log,” said Williams, who is an inter“Much of (growth) is related to practices are nist with Arcturus Healthcare PLC, a high-end services,” he said. “We dealing, Page 11 41-physician primary care group have worked very hard and are with about seven advanced praccommitted to growth.” tice nurses in Rochester Hills. Now in its sixth year, the Af“Being a larger practice, we have shared fordable Care Act was opposed by nearly 60 administrative costs and reduced our ex- percent of physicians even though orgapenses,” said Williams, who also is CEO of nized medicine groups like the American United Physicians, the region’s largest physi- Medical Association threw their support becian organization with 3,400 affiliated physi- hind it. cians. Physicians opposed to it objected to a va“We have widened our margins more by riety of provisions, including a variety of perlowering our expenses through efficiency sonal and industry taxes to pay for the bill, and using our quality team to increase finan- the individual mandate that required most cial incentives than by just adding patients,” of the population to purchase a private inWilliams said of Arcturus. surance policy or pay a fine and the still-inSince Obamacare, the movement to pre- active Independent Payment Advisory Board ventive medicine has been the biggest pos- that was tasked with reducing Medicare itive for physician practices and patients, costs without jeopardizing quality. said Ewa Matuszewski, CEO of MedNetOne But as health care cost increases have Health Solutions, a Rochester-based physi- dropped to historic lows of under 4 percent cian organization with more than 1,000 phy- and Medicaid and private insurance expansicians. sion allowed 20 million patients to seek “Prevention is almost a mandate. People medical care, physician opposition has deare willing to come in for annual physicals, clined somewhat. SEE ACA, PAGE 10 and immunization rates are steadily improvjgreene@crain.com

How act has changed physician offices, practices The good:

 Boosted volume of patients at many primary care practices because more people are insured.

 Enabled accountable-care

organizations to form, which allowed doctors to work with hospitals and other providers to coordinate care of fee-forservice Medicare patients and share savings.

 Added reimbursement for physicians to conduct end-of-life counseling with Medicare patients and families.

 Expanded Medicare billable telehealth services.

 Increased wellness and preventive care. The bad:

 Rising overdue bills and bad debt as employers and individuals shift to high-deductible health plans.

The uncertain:

 Whether an increase in high-deductible health insurance policies has led to fewer follow-up visits when health problems.  Cumulative changes the past five years

have caused many small physician practices to consider joining larger physician organizations, medical groups or seek employment with hospitals.

10

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

SPECIAL REPORT: HEALTH CARE

ACA

FROM PAGE 9

By 2015, a Kaiser Family Foundation survey of physicians showed a

slight decline in doctors viewing Obamacare as unfavorable — 52 percent, compared with 48 percent of doctors who favored it. But by political party affiliation, physicians showed vastly different preferences. For example, 87 per-

cent of physicians who said they are Democrats favor Obamacare, while 87 percent who said they are Republicans have an unfavorable view. Still, besides Obamacare, the HITECH Act in 2009 that provided billions of dollars to stimulate adoption of electronic health records, and Medicare and private insurance company reimbursement changes that favor paying for quality, have forced changes at physician practices

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Patient visits changing Despite having an increase in patient volume, Williams said, physicians are seeing a troubling trend where some patients can’t afford ongoing care for chronic problems because of out-of-pocket costs. “On the commercial side, we are seeing a significant increase in collection burden passed because of the high-deductible insurances,� Williams said. “Patients come in for benefits defined under essential benefits: preventive, mammograms, that is good. But the chronically sick, if they are paying the first $3,500, it’s a big pill, and they don’t come in as frequently.� Williams said when deductibles were lower, physicians saw more patients come in for follow-up visits. “People are at significant risk, are in poorer health, doctors are seeing that,� said Williams. Conway said Henry Ford has seen an uptick in bad debt and problems paying for medications as patients have switched to higher-deductible health plans, but he hasn’t seen problems with patients not able to afford follow-up visits. “We have switched from struggling with (charity care) to bad debt,� said Conway, who added the system tries to work out solutions for patients who can’t pay. Rodger Prong, executive director of Waterford Township-based Oakland Physicians Network Services

105

ER

and in how care is delivered. While EHR systems continue to increase costs for practices, more physicians are effectively using data to focus on prevention, improve quality and conduct population health reviews on patients.

with 450 physicians in 212 practices, said many new patients have pentup demand from not seeking care for extended periods. “This has resulted in more time being spent and more tests and procedures being ordered,� Prong said. “Our visits have been increasing, and there has been a trend toward more preventive care.� Collection problems have increased for many practices because of higher-deductible plans, Prong said. “More of the cost of care is resting on the shoulders of the patients.� Conway said initial patient visits for new patients are running much longer than standard practice. “Initially with insurance expansion, first visits required more time because many patients were coming in with multiple unmanaged conditions, requiring prescription plans, among other things,� Conway said. “Lately, that phenomenon has reduced somewhat. Now the time increase is predominantly caused by Medicare patients coming in for their annual free prevention screenings, intended to address preventive services,� he said. But Conway said Medicare patients bring in a long list of health complaints. “They are using these visits to avoid a copay or deductible charge that might otherwise apply,� he said. Larger groups are benefiting

more under Obamacare than smaller groups because they have the financial resources and support staff, Prong said. “Physicians in small practices have actually seen drops in procedures since the ACA and tend to be negative about it,� Prong said. Yusuf Hai, managing director of business advisory services with Southfield-based CIG Capital Advisors, said smaller practices are hit harder by rising insurance deductibles and higher operating costs. “Their business model is still viable, but net margins are decreasing because revenue is declining,� Hai said. “They are working just as hard, maybe harder, but not making more money because reimbursement is less.� Some smaller practices are still hitting revenue targets, but primarily because they receive financial incentives from medical homes, share revenue from Medicare accountable-care organizations and participate in other quality-improvement programs, Hai said. Another technique practices are using to manage larger patient populations is adding advanced practitioners and nurse case managers. Hiring more advanced-practice nurses has been a necessity to help manage higher numbers of patients and more patients with chronic diseases, said Daniel Passerman, D.O., physician in charge of Henry Ford’s Harbortown and Detroit Northwest medical centers. “I have had more patients, more Medicaid patients� come into the clinics, said Passerman, who also is osteopathic family medicine program director at Henry Ford Wyandotte Hospital. “I had a patient several years ago who (stopped coming) because he had lost his insurance. He had significant chronic disease,� said Passerman. “When ACA came into play, (he obtained Medicaid coverage and) found me. I am his doctor again. It is nice to see those patients.� While some doctors bemoan faulty EHRs, Passerman said, Henry Ford’s Epic Corp. electronic medical record system has let physicians increase the number of patients they see or take care of each day. Iltefat Hamzavi, M.D., vice president with Hamzavi Dermatology/Dermatology Specialists, said the patient volume began to increase when the Obamacare rule that allowed parents to keep their children on their health plan until age 26 went into effect in 2011. “The severe shortage of medical dermatologists also helped increase patient volume,� Hamzavi said. “We are ahead, doing better than before� Obamacare. Lisa Keane, president of Wayne State University Physician Group, said Obamacare has less of an impact on faculty practice plans like UPG. “We take care of patients regardless of their ability to pay,� she said. Still, Keane said UPG has seen a slight uptick in patient visits due to Obamacare insurance expansion. “It is not as noticeable here because we started out with a larger number of Medicaid patients,� she said.

Accountable care One of Obamacare’s more successful pilot programs has been accountable-care organizations. More than 12 ACOs — groups of hospitals, doctors and other providers that coordinate care — have been formed in Michigan to cover 300,000 Medicare patients. All ACOs in Michigan have saved Medicare money and more than half improved quality enough and reduced costs to share in the savings, earning the hospitals and physicians $50 million last year, according to the Centers for Medicare and Medicaid Services. ACOs nationally saved

Medicare nearly $1 billion, returning $400 million to ACO owners. Some 140 OPNS physicians formed Physicians Direct ACO LLC to take advantage of the program, Prong said. “We were the third best with the lowest cost, but we didn’t get anything out of it because we started with high quality numbers and low costs,� Prong said. “We saved $1.3 million for Medicare, but we didn’t hit the threshold for savings so we didn’t share anything.� For this reason, Conway said, Henry Ford waited to jump on the ACO bandwagon until it felt Medicare had designed the correct model to fit its medical group. Earlier this year, the Henry Ford Physicians ACO was announced as part of Medicare’s Next Generation ACO model. “This ACO is very important for us,� said Conway. “We had about about 50 percent of patients in our care in risk-based contracts. With another 25,000 (Medicare patients in the ACO). we now have 70 percent of our revenue through the door in risk contracts. This will transform our practice into a single model of care.�

Beyond Obamacare As Medicare continues to roll out new regulations and reimbursement policies, physicians are bracing for more change. Starting in 2018, Medicare will begin paying physicians under the Quality Payment Program, a new reimbursement formula for physicians that combines several existing quality programs. “We’ve weathered the last five years pretty well, but the looming Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 has the potential to be far more tumultuous,� Prong said. Conway said Henry Ford hopes to qualify for the new reimbursement arrangement through its new ACO. “We have a large (management) staff, and it is so complicated. I don’t know how smaller groups can manage,� he said. Keane said MACRA will affect UPG, but she said the group is uncertain exactly how. A UPG committee is studying the law to determine what track to fall under — the Merit-based Incentive Payment System or Advanced Alternative Payment Models. “We have to make some choices,� she said. “It is too soon to say how it will impact us.� 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 // J U N E 2 0 , 2 0 1 6

SPECIAL REPORT: HEALTH CARE

Rising administrative costs have small practices seeking safety in numbers By Jay Greene jgreene@crain.com

Executives at physician organizations are seeing an unprecedented number of small groups nearing decisions whether to go it alone, join a larger group or seek hospital employment. The Affordable Care Act and related changes over the past six years have increased administrative costs for physician practices, leading many to consider joining larger groups, experts such as Bill Fera, a consultant with Ernst & Young LLP in Pittsburgh, said. “We are seeing diminishing numbers of onesy and twosy practices,” Fera said. “They are being acquired by hospitals or larger physician groups.” At Henry Ford Medical Group, CEO William Conway, M.D., said physician recruiting has never been stronger. “(Pending Medicare rules) are so complicated many physicians will give up (their independent practice) and join a physician organization,” Conway said. “We have more people talking to us about joining than ever before.” But Conway said he doesn’t just blame Obamacare or mandates for electronic health records. “Commercial insurers are coming up with narrow networks” and other performance-based contracts that require doctors to submit much quality data to receive bonus payments, he said. Mike Williams, M.D., CEO of Bingham Farms-based United Physicians Inc., said physicians have to consider joining larger organizations. “Most physicians want to see patients,” Williams said. “Unfortunately, many physicians try to run their practice on the side. None of us in one- to three-member practices can survive doing that. It is why some of us have moved to larger groups.” Williams’ own practice merged with three other primary care practices to form Prism Medical Group in 2010. Recently, Prism merged with Internal Medicine Associates to form 41-physician Arcturus Healthcare PLC. He said Arcturus’ growth plan calls for at least 200 physicians. “We have been able to share a lot of expenses (including information technology, billing and human resources) and still maintain some autonomy,” Williams said. Iltefat Hamzavi, M.D., vice president with Hamzavi Dermatology/Dermatology Specialists, said his 16-physician medical group with seven offices has grown under Obamacare because smaller practices need infrastructure support to survive. But the decision in 2012 to purchase an electronic health record system for the practice changed it more than the legislation did, Hamzavi said. “We grew because some older physicians and groups had problems with the technology and were forced to consolidate,” Hamzavi

said. “We really developed our system. It was an added expense, but the documentation has improved, and overall it is a good process.” The group conducts its own billing, credentialing, human resources and accounting. “We are trying to find a good balance between autonomy and scale, but we want to be physician-directed,” Hamzavi said. “We have been approached by larger groups, but we are not interested right now.” Lisa Keane, president of Wayne State University Physician Group, said

UPG has been recruiting physicians for clinical practice the past several years. Most of UPG’s 550 employed doctors also conduct research and teach medical students and residents. “We need to find the right fit” when hiring clinical staff, said Keane, noting that UPG has been reorganizing to improve productivity with its faculty physicians and contract partners. Keane said physicians join larger organizations also because “doctors are fearful they are not skipped over

and worried about being lost in the shuffle.” But Keane said none of the physicians interested in joining UPG have said it is to alleviate Obamacare or EHR regulations. “Many doctors like the allure of being part of an academic group,” she said. Ewa Matuszewski, CEO of Rochester-based MedNetOne Health Solutions, said there is a strong core of physicians who want to maintain their independence. Many of those doctors join physician organizations to access back-office support

services, EHRs and clinically integrated networks. Other physicians are staying independent through direct primary care (DPC) arrangements. A new DPC group has formed in Troy called Salta Direct Primary Care and is headed up by CEO John Blanchard, M.D. Under DPC, physicians charge patients a monthly fee, offer enhanced office services and agree not to bill health insurers for the specified services. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

“HOW CAN BEING MORE ENERGY EFFICIENT HELP MY BUSINESS?” Warmer weather may make it hard for businesses to save money on their gas and electric bills while still keeping employees and customers cool. That’s why DTE Energy wants you to know what you can do to accomplish both goals. Programming thermostats to automatically adjust the temperature during unoccupied periods and installing motion sensor lights in less used areas are easy ways to save without sacrificing comfort. Replacing incandescent lights with compact fluorescent or LEDs will result in even more energy savings. Together, we can reduce energy waste and help your business thrive. For more tips and ways to save, visit dteenergy.com/savenow.

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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 // J U N E 2 0 , 2 0 1 6

CRAIN'S LIST: LARGEST GROUP HEALTH CARE PLANS

Ranked by 2015 revenue Company Address Rank Phone; website

Blue Cross Blue Shield of Michigan/ Blue Care Network

Enrolled members Enrolled Enrolled Enrolled in Enrolled members members Revenue members HMO/ members in in ($000,000) Percent year-end DHMO in PPO POS other Top local executive(s) 2015/ 2014 change 2015/2014 plan plan plan plans Name of group health care plans/types

4.9% 4,533,379 B 922,907 C 3,393,977 216,495 4,530,927

Daniel Loepp president and CEO

$24,222.0 $23,100.0

2,460.7 E 2,401.9 E

2.4

689,020 685,575

255,876

52,226

0

NA

Group and individual plans including PPO, HMO, wellness, consumer directed in the group market; Medicare Advantage and Part D Prescription Drug plans in the Medicare market; and PPO, HMO and Health Savings Account eligible products in the individual market. BCBSM and BCN also offer prescription drugs, dental and vision coverage. 380,918 HMO, PPO, EPO, EPA, Medicare-HMO, ASO-HMO, ASO-PPO, Self-Funded and Network Lease

1

600 E. Lafayette Blvd., Detroit 48226 (313) 225-9000; www.bcbsm.com

2

Health Alliance Plan of Michigan D 2850 W. Grand Blvd., Detroit 48202 (313) 872-8100; hap.org

Wright Lassiter III president and interim CEO Jon Cotton president and COO

2,113.6 1,420.5

48.8

455,299 365,413

NA

NA

NA

NA

Medicaid, Medicare HMO

3

Meridian Health Plan of Michigan Inc. 777 Woodward Ave., Suite 600, Detroit 48226 (313) 324-3700; www.mhplan.com

Stephen Harris president

1,467.9 1,077.3

36.3

327,904 242,022

NA

NA

NA

NA

Medicaid, Medicare

4

Molina Healthcare of Michigan Inc. F 100 W. Big Beaver Road, Suite 600, Troy 48084 (248) 925-1700; www.molinahealthcare.com

Chip Merkel EVP, diversified businesses

1,080.0 1,164.3

-7.2

7,227,448 7,774,629

234,641

2,300,749

2,438

5

United Concordia Dental 3250 W. Big Beaver Road, Suite 127, Troy 48084 (248) 458-1581; www.unitedconcordia.com

Laura Czelada president and CEO

941.4 697.6

35.0

2,633,565 2,402,068

0

53,390

2,316,273

6

Delta Dental of Michigan Inc. Farmington Hills and Okemos (517) 349-6000; www.deltadentalmi.com

Kathy Kendall president and CEO

902.6 722.6

24.9

203,942 191,713

NA

NA

NA

NA

HMO, POS, Medicaid, Medicare Advantage

7

McLaren Health Plan Inc. G-3245 Beecher Road, Suite 200, Flint 48532 (888) 327-0671; www.mclarenhealthplan.org UnitedHealthcare 26957 Northwestern Hwy., Suite 400, Southfield 48034 (800) 842-3585; uhc.com

Dustin Hinton CEO, UnitedHealthcare Michigan and Wisconsin Tim Dimartino vice president sales and account management Pamela Sue Sedmak president and CEO

302.9 G 328.9

-7.9

NA 346,069

NA

NA

NA

NA

NA

282.1 187.5

50.5

48,094 42,906

NA

NA

NA

NA

NA

8

9 10 11

Aetna Better Health 1333 Gratiot, Ste. 400, Detroit 48207 (313) 465-1519; www.aetnabetterhealth.com/ Michigan

4,689,620 DHMO, PPO and HCR products

263,902 Delta Dental Premier, Delta Dental PPO

Total Health Care USA Inc. 3011 W. Grand Blvd., Suite 1600, Detroit 48202 (313) 871-2000; www.thcmi.com

Randy Narowitz CEO

162.1 164.8

-1.6

40,800 46,245

38,268

NA

2,532

NA

HMO

Vision Service Plan VSP 2000 Town Center, Suite 725, Southfield 48075 (248) 350-2082; www.vsp.com

M. Scott Mitchell market director Barbara Aikman senior account executive Amy Williams CEO

133.5 129.0

3.5

1,800,550 1,800,116

NA

NA

NA

NA

NA

60.5 30.7

97.1

7,540 2,268

NA

NA

NA

NA

Medicare, Michigan Medicaid

Medicaid, HMO

12

Fidelis SecureCare of Michigan Inc. 800 Tower Drive, Suite 200, Troy 48098 (877) 373-8085; www.fidelissc.com

Mehrdad Shafa president and CEO

36.6 21.9

66.8

6,638 6,034

NA

NA

NA

NA

13

Harbor Health Plan, Inc. 3663 Woodward Ave, Detroit 48201 (313) 578-2234; www.harborhealthplan.com

Joseph Lentine president

1.7 1.8

-4.5

7,977 7,836

7,977

0

0

0

14

Dencap Dental Plans 45 E. Milwaukee St., Detroit 48202 (313) 972-1400; www.dencap.com

DENCAP Dental Plans, Inc.

This list of leading metro Detroit group health care plans encompasses medical, dental, optical and other health care organizations. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies or the Michigan Office of Financial and Insurance Regulation. Companies with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. NA = not available. Health care plan types include: Exclusive Provider Organization (EPO) - Members must use the EPO provider network exclusively and medical services received outside of the EPO network are not covered except for emergencies. Exclusive Provider Arrangement (EPA) - Similar to an HMO. Members must choose a physician who authorizes referrals and arranges hospital admissions. Point of Service Plan (POS) - Members designate a primary care physician but can go outside the network for services. Administrative Services Only (ASO) - Offered by insurers to self-insured employers.

B Does not include members that are part of Michigan-based groups but reside outside of Michigan. C Includes members belonging to Blue Care Network subsidiaries. D HealthPlus of Michigan in Flint and Health Alliance Plan in Detroit received final regulatory approval to merge in February. E Figures include Health Alliance Plan (HMO), Alliance Health & Life Insurance Co. PPO and EPO; Medicare HMO and PPO; HAP Midwest Health Plan (Medicaid HMO), HAP Preferred Inc – Network Leasing, ASR (TPA)

F Acquired HealthPlus of Michigan and HAP Midwest Medicaid business last fall. G Crain's estimate. LIST RESEARCHED BY SONYA D. HILL

13

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

CALENDAR WEDNESDAY JUNE 22

Midyear Economic Forecast and State of the Industry Breakfast. 7:30-10:30

YOUR PLANE SHOULD BE

a.m. Construction Association of Michigan, Home Builders Association of Southeastern Michigan, American Institute of Architects. The event will assess the national and regional perspectives of the economy and how it is affecting the industry. Suburban Collection Showplace, Novi. $50. Contact: Mary Carabott, phone: (248) 972-1108; email: carabott@cam-online.com.

BASED WHERE YOU ARE.

FRIDAY JUNE 24

Top 10 Career Derailers and How to Avoid Them. 8-10 a.m. Inforum.

Explore specific behaviors that can be career-limiting. Learn how to avoid certain behaviors and develop a practical and winning action plan that can lead to success. Julie Scherler, director of organizational effectiveness, Kelly Services, will lead the discussion. Kelly Services, Troy. $60 Inforum members; $85 nonmembers. Website: inforummichigan.org.

UPCOMING EVENTS

State-of-the-art facilities, unrivaled safety standards and mission-specific fleet provide members best-in-class personalized services and availability. Originating right here in metro Detroit.

Big Data — Small Bytes. 8:30-10:30 a.m. July 13. Automation Alley.

Better understand what big data is and how you can use the information you have to create simple, easy-to-use yet powerful visual interfaces. Topics to be covered are an overview of what big data is, how it can be extracted, and how free to low-cost tools can be used to utilize it. Automation Alley, Troy. $15 members, $25 nonmembers. Contact: Lori Podsiadlik, phone: (248) 457-3212; email: podsiadlikl@automationalley.com.

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Minority Business Women’s Conference. 7 a.m.-7 p.m. July 27.

Ŷ Focused on health care law for systems, physicians and payors in all market segments.

Michigan Minority Supplier Development Council. This event is designed to bring together minority women business owners and corporate executives from around the country to discuss industry trends, share practical advice and network. The conference will feature national headliners, keynote speakers, discussion forums, breakout sessions, and a few surprises. The Henry Hotel, Dearborn. $200. Phone: (313) 873-3200; email: info@minoritysupplier.org; website: www.minoritysupplier. org.

Ŷ Third party reimbursement, public and private health care provider financing, and commercialization of physician inventions and ideas.

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.

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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 // J U N E 2 0 , 2 0 1 6

ACQUISITIONS AND MERGERS

Armaly Brands, Walled Lake, maker

of Brillo, announced the acquisition of the Cameo, Snobol and Parsons brands and assets from Church & Dwight Co. Inc., Trenton, N.J. Website: armalybrands.com.

CONTRACTS

Mentor Graphics Corp., Wilsonville,

Ore., a provider of automotive design tools and software, announced that Lear Corp., Southfield, has deployed its Capital software within its electrical systems design facility, Lear Virtual Proving Grounds. Websites: mentor.com, lear.com. Practice Transformation Institute, Troy, which provides medical education and customized learning programs to improve patient health cand care, and the Michigan Osteopathic Association, Okemos, announced that MOA’s new Transformation Academy will be offered through PTI with webbased, blended and classroom activities for MOA members. Websites: transformcoach.org, domoa.org.

EXPANSIONS

Socionext America Inc., Sunnyvale, Calif., an advanced system-onchip technology for video and imaging systems, has opened an office at 34441 Eight Mile Road, Suite 110, Livonia. Website: us.socionext.com.

DEALS & DETAILS

Faurecia N.A., Auburn Hills,

NEW PRODUCTS

announced a new automotive seating plant in Simpsonville, Ky., with plans to employ more than 500. Website: na.faurecia.com.

Atwater Brewery, Detroit, a craft brewery, launched a Whango mango wheat beer. Website: atwaterbeer.com.

JW Design LLC, Royal Oak, which

Acromag Inc., Wixom, a designer

offers architectural and interior design services, opened a branch in Duncansville, Pa. Website: jwdstudio.com. Duo Security Inc., Ann Arbor, a cloud-based access security provider, has opened an office in Austin, Texas. Website: duo.com. Art Van Furniture, Warren, is

opening a 45,000-square-foot showroom at 8917 E. 34 Road, Cadillac. Website: artvan.com.

NAME CHANGE

Michigan Business and Professional Association, Warren, is now operating as MichBusiness. The

rebranding was made to transform the organization, which supports and promotes business success, into a statewide community and movement, MichBusiness said. Website: michbusiness.com.

and manufacturer of industrial electronics, measurement and control products, announced a full line of microBlox isolated signal conditioning modules. Website: acromag.com.

Norma Group, Auburn Hills, an

engineered joining technology company, has launched the Breeze Super-Seal clamp for fluid connections in high-pressure applications using rubber or silicone hoses. Website: normagroup.com.

NEW SERVICES

123.Net Inc., Southfield, has added a

wireless point-of-presence site atop the Maccabees Building, Detroit, to provide greater speeds of wireless service to the downtown area. Website: 123.net. Dallas Industries, Troy, a maker of

coil handling and press feeding

equipment and controls for the stamping industry, launched a newly designed responsive website to make capabilities available to engineers and product managers on any device. Website: dallasindustries.com.

Focus: Hope announces Lee to take CEO post

Professional Auditing Services of America, Southfield, announced

Detroit-based career training and community development nonprofit

FINANCE

Brian McVeigh Chief Financial Officer Vibe Credit Union Vibe Credit Union appoints Brian McVeigh as their new Chief Financial Officer. Brian has over 30 years of experience in the financial services industry, and joins Vibe in their 80th year of business. His career accomplishments include serving as the Chairman of the Executive Committee for the National CUNA CFO Council, being a pioneer of interest rate risk management, and having key leadership roles in eight different financial institution mergers.

effective Aug. 8. He replaces the retiring

STARTUPS

The Knee Institute, West Bloomfield

Township, which offers a range of procedures to treat musculoskeletal pain, has opened at 6016 W. Maple Road, Suite 705, West Bloomfield Township. Telephone: (248) 862-2551. Website: thekneeinstitutes.com. Balance and Flow Studio, a mind and

body studio, has opened at 28983 Woodward Ave., Berkley. It offers classes in cardio conditioning, strength training and meditation. Telephone: (248) 629-6255. Website: balanceandflowstudio.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.

William Jones Jr., who held

the post since 2009. Lee was executive director of the Detroit Area Pre-College Engineering Program for 12 years. He also worked at Ford Motor Co. in the powertrain and product development organizations. Jason Lee

Assembly taps Mazey Media agency Assembly named Kendra Mazey managing partner in charge of its Detroit offices. Mazey has worked in the advertising industry for more than 20 years. At Kendra Mazey Assembly, effective July 5, she will replace Greg Clausen, who left to pursue other interests.

Pistons retool front office

LAW

LAW

Laura Ellis Bieniek

Giles Rhodenhiser

Young & Associates

Young & Associates

Bieniek will represent plaintiffs and defendants in actions across the country for a variety of multi-million dollar cases focused on complex business litigation. Bieniek’s previous position was a litigation attorney for Sedwick LLP in San Francisco, where she served as a member of the trial team for California’s largest public utility company in a $1 billion complex tort litigation matter. She attended the London School of Economics and graduated from the University of Michigan Law School.

Focus: Hope named Jason Lee as CEO,

that its newly engineered accounts payable digital recovery dashboard, PAS Dashboard, will be available to all new clients for free. Website: pas-cash.com.

ADVERTISEMENT SECTION

Attorney

PEOPLE: SPOTLIGHT

Attorney

Rhodenhiser will represent plaintiffs and defendants in actions across the country for a variety of multi-million dollar cases focused on complex business litigation. Rhodenhiser was a law clerk for Judge Chris Dillon in the North Carolina Court of Appeals. He graduated from the University of North Carolina Law School and received the Harry Bane Award for Academic Excellence, in addition to being the Articles Editor of the North Carolina Journal of International Law and Commercial Regulation.

PEOPLE ON THE MOVE provides an opportunity to announce the selection, promotion, appointment, leadership or role responsibility expansion of an employee, colleague or team member across industries and sectors. For more information or questions regarding advertising in this section, please call Lynn Calcaterra at (313) 446-6086 or email: lcalcaterra@crain.com

The Detroit Pistons announced six front office personnel changes shortly after General Manager Jeff Bower was given a one-year contract extension through June 2018. Pat Garrity was promoted to assistant general manager from director of strategic planning, Andrew Loomis was promoted to chief of staff from executive director of basketball operations, Bob Beyer was named associate head coach after being an assistant coach, and Otis Smith, former head coach of the Pistons’ developmental Grand Rapids Drive team, now is director of player development/ assistant coach. Brendan Malone, formerly an assistant coach, will become a special assignment scout, and Quentin Richardson, formerly director of player development, is leaving the organization.

Comerica’s Forte to retire Linda Forte’s 42-year career at Comerica Bank will end in August.

The senior vice president of business affairs and chief diversity officer said she will retire from the Detroit office of the Dallas-based company. Nathaniel Bennett, senior vice president of talent acquisition, will add the role of chief diversity officer.

June 20, 2016

SECURITY FROM PAGE 1

electronic equipment to inner rooms where it can’t be seen through windows and to walk through the church each night to ensure all doors are locked and all windows are closed. Churches are also taking matters into their own hands. Several are encouraging members with licenses to carry concealed weapons to church, Fountain said, noting DPD is recommending they be trained in accuracy and distance shooting and be seated strategically to minimize crossfire. Greater Grace Temple recently hosted an armed shooter training summit, Fountain said. The church did not respond to multiple requests for comment. Triumph Church in Detroit is also stepping up its security, but it did not comment before this story was published. DPD has provided similar training to some area nightclubs, schools, businesses, gas stations and grocery stores, said Fountain, who leads armed shooter training for the department. It’s something every police department in the country will provide upon request. Prevention for any organization centers on three rings of security: the parking lot, front door and interior of a building, he said. It includes constant vigilance and quick communication of issues. “We must be in a constant state of readiness,” DPD Chief James Craig said. “Clearly, these criminals

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 0 , 2 0 1 6 CRAIN’S DETROIT BUSINESS involved in mass is also important, as is having supSecurity tips shootings tend to plies like two-way radios, megalook for soft tar- phones and a stock of water on For all sites: gets. ... Generally, hand. n  Have cameras on parking lots, it’s a location Local police and fire departments building perimeters and entrances, where citizens will often take a floor plan of the and trained people watching them for are not armed. building so they have quick access unusual activity. Does that loca- to the building’s layout, he said. And For churches, auditoriums, and tion have armed mock shooter training scenarios similar sites: security … a re- with local law enforcement feedRich Donley: sponse plan?” back can also help prepare employn  Put security measures in place Works with auto Several local ees. — deadbolts, slide bolt locks on clients globally. companies con“You have a facility that has double doors, and sheaths that tacted by Crain’s 400-500 people,” Donley said. withstand up to 550 pounds of didn’t respond to requests to talk “Think of the nightclub: How can pressure. about armed shooter training and you best communicate and get n  Utilize buzzer systems to permit their level of preparedness. people out?” entry to buildings such as day care But the issue is something any Area nightclubs say they have and senior centers, church offices. company could one day face, espe- policies in place to help respond in Nightclubs/entertainment cially if security lapses are happen- the event of emergency. venues: Firebird Tavern in Detroit’s ing, said Rich Donley, senior vice n  Put armed security in place. president at Detroit-based Mort Greektown, which hosts dance Crim Communications Inc. parties on the weekends, has sen  Metal detectors or security As an extension of the crisis curity on both floors, including a pat-downs are recommended. communications he’s provided former police officer, who comcompanies for more than 20 municate with each other and the Elektricity Nightclub in Pontiac years, Donley began crisis plan- general manager through ear ning with global automotive cli- pieces. Owner Tony Piraino said has preventive measures and a full ents eight years ago. During site the DJ has a microphone if he evacuation plan in place, said ownvisits around the country, he needs to communicate, and the er Amir Daiza. Security at the door enforces the shows up an hour early to try to bartender has a walkie-talkie. gain access to the facility. Piraino, who is on the board of club’s ban on backpacks and other He found a number of practices the Greektown Preservation Society, packages, and even checks the DJ’s that could enable a would-be shoot- said he also keeps the cellphone equipment. When there is an issue, the DJ will er to gain access to a building. They numbers of DPD police officers include open doors and padlocks patrolling the Greektown area at cut the music and make an anand friendly employees holding the hand and noted that on week- nouncement right away, said Daiza, door for him, both when he’s worn ends, when crowds rise, the busi- who has owned and operated nighteveryday street clothes or a compa- ness association brings in anoth- clubs in the region for the past 35 ny shirt purchased from the compa- er group of special response years, including Saint Andrew’s Hall, officers to further heighten secu- Small’s in Hamtramck, the former ny store online. Clutch Cargo’s and the Pontiac conEchoing law enforcement, Don- rity. “We’re not one of those places cert venue 7th House. Security will ley stresses the importance of visitors signing in and out (so everyone that has a lot of issues, but that direct patrons to one of four exits, is accounted for) and escorts for vis- could change in an instant here, at a rather than just the front door, in an attempt to get everyone out. itors. Advance evacuation planning school, anywhere,” Piraino said.

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n  Communicate all issues promptly between security staff and other primary employees.

n  Move people to safe exits to get as many people out of the club as possible. In office buildings:

n  Put in place very good controls at

the point of entry, given today’s open workplace environments

n  Use a sign-in sheet, callups to

make sure the person is expecting visitors and escorts the visitors in the building.

n  Front desk attendants should

know whom to call with any issue or fear of an issue.

n  Do mock shooter training. n  Share floor plans of office with local fire and police authorities.

“Our first concern is the safety of our customers,” he said. “We hope it will never happen, but we still put policies in place.” In the event of an armed shooter entering any venue, DPD and the Michigan State Police are sharing the advice (and video) produced by the city of Houston, which urges people to “Run, hide, fight.” “If you can safely get out of the building without getting shot, get out,” Fountain said, adding that if you can’t, you should hide from the attacker. “But if you are trapped somewhere, be prepared to fight.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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trials to help deliver on the promise of precision medicine. Most importantly, Strata has the opportunity to give hope to those in need in their fight against cancer,� said Paul Brown, a partner in Ann Arbor-based eLab Ventures, a VC firm with ties to Silicon Valley that joined this round of funding. ELab also provided an undisclosed amount of seed funding to help launch Strata last October. This round was led by Ann Arbor-based Arboretum Ventures LLC, whose managing director, Jan Garfinkle, a member of Crain’s recent list of the state’s 100 Most Influential Women, is joining Strata’s board. Chicago-based Baird Capital also joined the round. Many cancers are caused by specific gene mutations. Large pharmaceutical companies have drugs in the pipeline that they hope will treat patients with those mutations. As it stands now, said Rhodes, cancer patients generally don’t know if their cancers are caused by a specific mutation or not, and without knowing what mutation they might have, they have no way to get into trials that might help them. Consequently, drug companies spin their wheels, often for years, trying to recruit enough of the right patients to win approval from the U.S. Food and Drug Administration to go to market. According to the MIT Technology Review, the drug company GlaxoSmithKline says it had to test 11,000 patients to find just 23 it needed for a study of a lung cancer drug targeting a specific DNA mutation, and the company said it could take 14 years to find enough patients for a large phase-three FDA trial. Insurance doesn’t cover gene sequencing of tumors, and the cost makes sequencing prohibitive for the average patient, since most cancers are not caused by mutations and most patients paying for their own sequencing wouldn’t qualify for a trial. “This is a really exciting area. Precision medicine offers enormous opportunities, but the system is broke,� said Rhodes. “There are dozens of precision medicines in trials, but most patients don’t know if they are eligible. You need to sequence the tumor, but the Catch-22 is insurance companies don’t cover it and medical centers aren’t going to pay for it because most patients’ cancers aren’t caused by mutations. “Pfizer took four years to find 50 patients for a trial. We could cut that to six months,� he said. Strata’s plan is to offer free sequencing of tumors at medical centers around the country. Patients whose cancers are caused by mutations can then be enrolled in drug trials targeting their mutation. Strata will get an up-front fee from pharma companies and then a per-patient fee as mutations are uncovered. Rhodes said he is in serious discussions with 12 pharma companies and expects to sign his first two contracts soon and to have as many as six signed by the end of the year.

ELab conference a boost to Strata, others Dan Rhodes said he got good advice in August on launching his new company, Strata Oncology Inc., at a conference put on by eLab Ventures, an Ann Arbor-based venture capital firm and one of his eventual investors. Called Michigan eLab Insights and held over three days at the Hotel Walloon on Walloon Lake near Petoskey, eLab’s partners gathered 25 entrepreneurs, researchers and investors from around the U.S. to have breakout sessions on three big topics: how to save a million lives in auto fatalities around the world over five years, how to save a million lives with better health care, and how to do greatly improve internet security. Three companies were launched by attendees, including Strata. “We were well down the path to building a company, but having multiple perspectives helped us go in the right direction,� said Rhodes, praising in particular the advice he got from attendee Vince Groppi, a former Pfizer Inc. executive who is now the director of the Center for the Discovery of New Medicines at the University of Michigan. The other two companies were Clinc Inc., an innovator in artificial intelligence based in Ann Arbor, and New Vital Signs Inc., an Ann Arbor company using sensors to detect illnesses. ELab has invested in all three. A second annual Michigan eLab Insights conference, tackling various issues related to connected vehicles, will be held at the Grand Hotel on Mackinac Island from Aug. 15-17. Tom Henderson

Brown said Strata’s three co-founders have national reputations that make investing easier, and finding willing partners in big pharma, too. Rhodes was a co-founder and CEO of Compendia Bioscience, a 2006 University of Michigan spinoff that marketed an oncology database that pharmaceutical companies used to develop new drugs. It was sold in 2012 to Life Technologies. Most recently, Rhodes was vice president of oncology strategy at Thermo Fisher Scientific, which is in partnership with Strata, contributing sequencing systems and other equipment. Rhodes said the sequencing machines are capable of sequencing 50,000 tumors a year. Co-founder Keith Flaherty is an oncologist at Massachusetts General Hospital in Boston, a professor of medicine at Harvard Medical School and a principal investigator with the National Cancer Institute’s MATCH program. MATCH stands for Molecular Analysis for Therapy CHoice. It is a research study that began last July of at least 1,000 patients, matching tumor abnormalities with drugs. Co-founder and lab director Scott

Tomlins is a pathologist and researcher in cancer genomics at the UM Medical School. Strata employs 15. Rhodes said it could be up to 25 by year’s end. “Strata’s model makes a huge amount of economic sense. There’s a huge need for improving the efficiency of human trials, which are massively expensive,� said Erik Gordon, an assistant professor in UM’s Ross School of Business, who focuses on entrepreneurship, technology commercialization and the biomedical industry. “It can take four years to get enough patients to run a clinical trial, and for drug companies, that’s a disaster,� he said. “Time is money. If a drug will generate $1 billion in sales a year, that’s $4 billion lost.� Gordon said that getting 100,000 patients sequenced over three years may prove to be overly ambitious. That would require Strata to recruit 91 patients a day. “It’s a great idea, but there could be a problem finding enough cancer patients that fast whose cancer isn’t being treated already,� he said. Tom Henderson: 313-446-0337 Twitter: TomHenderson2

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EMISSIONS FROM PAGE 1

For two years, Michigan legislators have debated how best to replace the state’s 2008 energy law that mandated 10 percent renewable energy generation and set targets for energy efficiency savings. The law helped create 1,500 megawatts of renewable energy, enough to power 1.3 million homes, and generate savings to rate payers of $4 billion, state officials have said. But it appears Republicans, who hold a solid majority in the state Legislature, can’t agree on issues like customer choice, net metering, a strong integrated resource planning process (which, among other things, uses predictive modeling to estimate future energy costs) and how best to encourage utilities to replace coal with renewable energy or natural gas. While Sen. Mike Nofs, R-Battle Creek, has drafted three substitute bills during the past several weeks — the last one that shifts the integrated resource planning process away from renewable energy sources — approval of the energy package appears at a stalemate, sources told Crain’s. To gain Republican votes, Nofs is also considering taking out language in the bill that would set a 35 percent clean energy target over 10 years (See story, Page 1). While currently under review by the U.S. Court of Appeals for the D.C. circuit, the Clean Power Plan would require Michigan to reduce carbon emissions by 35 percent by 2030. States can customize strategies to meet federal goals. Michigan began a review last year, but halted it in April, pending resolution of the court case. In his report, commissioned by the libertarian-leaning Niskanen Center in Washington, D.C., Anderson and his team analyzed three scenarios: continuing current trends or adopting either a “cap and trade� or “carbon tax� approach to complying with the Clean Power Plan. Valerie Brader, executive director with the Michigan Agency for Energy, said she recommended Gov. Rick Snyder suspend the CPP review until the appellate court can give more direction. She said the review hadn’t yet determined compliance options, although she suggested “credits� could be awarded to power generators to encourage carbon reduction. But Anderson’s report calls into question the potential costs for capand-trade systems or a carbon tax, two market-based approaches to reduce carbon in the air. Under the cap-and-trade systems and carbon tax scenarios, Michigan’s power plants would incur an additional $2.2 billion in annual regulatory emissions costs by 2030, which would be passed on to consumers through higher prices, the Anderson report said. “Both of the modeled regulatory scenarios would slow the economy and reduce personal income,� the report said. “In 2030, we estimate that Michigan’s personal income would be over 12 percent lower under the cap-and-trade scenario than under the baseline and over 10 percent lower under the carbon tax scenario.� A cap-and-trade system works like

this: Companies would purchase annual permits for every ton of greenhouse gas they release into the atmosphere. Facilities that don’t use all of their permits could trade or sell them to companies that produce more pollution than their permits allow.� A carbon tax system, meanwhile, would require state governments to impose taxes on power-plant emissions enough to encourage the plants to decrease carbon emissions. The taxes would be used to offset other state taxes, reducing the impact on certain populations or businesses. Even if the $2.2 billion annual cost to power plants were accurate, Brader said, Michigan spends $24 billion a year on fuel, mostly coal and natural gas. “It is a small amount in the context of the total energy system,� she said. Howard Learner, executive director with the Environmental Law and Policy Center in Chicago, said Anderson’s report is flawed in several ways, including that Michigan legislators or regulators have not discussed capand-trade or a carbon tax approach as a CPP compliance solution. Anderson said he hopes his report will stimulate such a debate. “If we want to get to those (clean

energy) goals, we have to adopt a new policy that has the effect of making it more expensive to use more carbon,� he said. Anderson said Michigan either adopting a carbon tax or a cap-andtrade policy would work by making power more expensive. “Both would accelerate the movement to lower carbon generation and discourage people from using power,� he said. Learner said several states are using a cap-and-trade system and carbon tax approach, including California and a consortium of nine New England states. But Learner also said Anderson’s report fails to consider the impact of expected future closing of more than a dozen coal-fired plants and the simple economic health benefits that would result from cleaner air. Since Anderson’s report was released, DTE Energy Co. has announced eight additional coal-fired generation unit closings in the next several years. Anderson said his baseline analysis — a “no new policy� approach by the state — includes assumptions that Michigan’s renewable energy portfolio will hold steady at 10 percent, that energy efficiency gains will continue,

the announced 11 power plants will close, the state economy grows and people need more power. Anderson acknowledged his report did not consider reduced health care costs from cleaner air. “We resisted claims that we can’t back up (with hard data), even if we believe them to be true,� he said. Given current trends, Michigan already is on track to reduce emissions to 1,588 pounds per megawatt hour by 2020, the EPA said. Additional steps would be required to reduce emissions to 1,169 pounds per megawatt hour, which is the EPA’s 35 percent reduction target by 2030. The plan allows states to customize their own strategies to meet federally set goals. But Brader said the state energy agency estimates a total of 25 coalfired power plants will close in the next decade, which would give the state breathing room to comply with the Clean Power Plan until at least 2025. But Anderson said his no-new-energy policy scenario estimates the state will fall short of meeting those goals. Brader said Anderson’s report is conservative in that it does not consider additional coal-fired plant closures that will remove tons of car-

bon from the air and help the state comply with CPP. “Assuming 10 percent renewable energy for next 10 years is like assuming (back in the 1990s) that only 10 percent of the population will own cellphones,� Learner said. Learner also criticized Anderson for not reflecting the current energy debate in Michigan. “A carbon tax and a cap-and-trade policy haven’t been seriously considered in the state Legislature,� Learner said. “If they do, Clean Power Plan compliance can happen through other policy mechanisms.� Learner said those other policies could include emissions regulations at a power plant level, multi-state coordination and incentive programs for renewable energy generation. Dave Mengebier, senior vice president of governmental and public affairs and chief compliance officer with Consumers Energy Co., said the Jackson-based utility has in the past considered a cap-and-trade program to reduce sulfur dioxide as a “cost-effective solutions.� But he said Michigan policymakers historically have not favored this approach. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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

REPORTERS Marti Benedetti (313) 446-0416 Jay Greene, senior reporter Covers health care, insurance, energy, utilities and the environment. (313) 446-0325 or jgreene@crain.com Chad Halcom Covers litigation, the defense industry, education, Macomb and Oakland counties. (313) 446-6796 or chalcom@crain.com Tom Henderson Covers banking, finance, technology and biotechnology. (313) 446-0337 or thenderson@crain.com Kirk Pinho Covers real estate, city of Detroit. (313) 446-0412 or kpinho@crain.com Adrienne Roberts General assignment. (313) 446-1612 Bill Shea, enterprise editor Covers media, advertising and marketing, the business of sports, and transportation. (313) 446-1626 or bshea@crain.com Lindsay VanHulle, Lansing reporter. (517) 657-2204 or lvanhulle@crain.com Dustin Walsh, senior reporter Covers the business of law, auto suppliers, manufacturing and steel. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits, services, food, retail and hospitality. (313) 446-1694 or swelch@crain.com ADVERTISING Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Advertising Director Matthew Langan Senior Account Manager Katie Sullivan Advertising Sales Gerry Golinske, Catherine Grace, Joe Miller, Diane Owen, Sarah Stachowicz, Classified Sales Manager Angela Schutte, (313) 446-6051 Classified Sales Lynn Calcaterra, (313) 446-6086 Meetings/Events Director Kim Winkler Events Manager Kacey Anderson Senior Art Director Sylvia Kolaski Marketing Manager Marilyn Barnes Special Projects Coordinator Keenan Covington Sales Support Suzanne Janik Production Manager Wendy Kobylarz Production Supervisor Andrew Spanos CUSTOMER SERVICE Main Number: Call (877) 824-9374 or customerservice@crainsdetroit.com Subscriptions $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or (877) 824-9374. Single Copies (877) 824-9374 Reprints (212) 210-0750; or Krista Bora at kbora@crain.com To find a date a story was published (313) 446-0406 or e-mail infocenter@crain.com Crain’s Detroit Business is published by Crain Communications Inc. Chairman Keith E. Crain President Rance Crain Treasurer Mary Kay Crain Executive Vice President/Operations William A. Morrow Executive Vice President/Director of Strategic Operations Chris Crain Executive Vice President/Director of Corporate Operations KC Crain Vice President/Production & Manufacturing Dave Kamis Chief Information Officer Anthony DiPonio G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except for a special issue the third week of November, and no issue the third week of December by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Entire contents copyright 2016 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is strictly prohibited.

FROM PAGE 1

requiring utilities to present a plan for generating power every few years to the Michigan Public Service Commission that considers all electricity sources, including renewables and efficiency — a process known as integrated resource planning (IRP) — utilities only would have to do so when they proposed to build a major new power facility. That change would significantly curtail the IRP process, which is championed by Gov. Rick Snyder’s administration and Nofs himself as an alternative to mandates that since 2008 have required utilities to produce a percentage of their electricity from renewable sources and by cutting down on wasted energy. The administration’s Michigan Agency for Energy supports a previous version of the bill approved by the Senate committee that contains the IRP process, spokeswoman Judy Palnau said. Under Nofs’ proposed amendment, the IRP would be folded into what’s known as a certificate of necessity process, through which utilities seek approval from the MPSC to build power plants costing at least $500 million before they start construction so they know whether they’ll be able to recover the cost later in rates. A draft of the revised bill also suggests the certificate of necessity, or CON, threshold would be lowered from $500 million to $250 million, meaning utilities would be able to ask for upfront approval on less-costly projects. Nofs’ office said the goal with a lower cost threshold is to get utilities, and the stripped-down IRP process, in front of state regulators more often. Nofs said he tried to move the new

GREENLIGHT FROM PAGE 3

GreenLight will focus on gaps in Detroit, but the thought is that nonprofits brought here will expand to other parts of the region, as needed, once they are established, Simon told Crain’s last week. The model is very much a business approach. But it’s not the only approach to be taken to nonprofit work, because some things can’t be measured, Simon acknowledged. “It’s just really an important additive ingredient to the community. Without it, this gap-finding and bringing something else in that works won’t happen.” It’s a model that’s been successful so far in Boston, Philadelphia, the San Francisco Bay area and Cincinnati, where the nonprofits GreenLight has brought to each city are achieving measurable results in areas such as college access and completion, family economic mobility, academic success, youth recidivism and youths aging out of foster care. The latter issue emerged in GreenLight’s 2008 selection cycle in Boston. Based on numbers from 2005, over half of the 800 youths aging out of the foster care system were unemployed and 37 percent were homeless, and

version at the end of the spring session this month, but “I just couldn’t do it in two days.” Rich Studley, president and CEO of the state chamber, declined to comment on whether he favors the certificate of necessity process to an IRP, adding that he didn’t want to negotiate legislation in the press. He did say, however, that the chamber had concerns about how competitive bidding would be applied under an IRP, including whether alternative-energy suppliers would be allowed to offer their own proposals to counter a traditional utility’s plan. Through integrated resource planning, utilities would have to compare natural gas baseload generation against the costs of renewables, energy efficiency and all other power sources to reach what Snyder’s administration calls the most reasonable and prudent plan. IRP supporters say these longer-term plans would improve energy reliability, affordability and flexibility in Michigan. The current certificate of necessity process was created as part of the 2008 legislation. It has been used once. The commission in 2013 approved a nearly $851 million certificate for Fort Wayne, Ind.-based Indiana Michigan Power Co.’s Cook Nuclear Plant in Bridgman, in Berrien County. Michigan ratepayers were to pay 17 percent of that amount, the MPSC said. Jackson-based Consumers Energy Co. filed what would have been the second CON in 2013 to build a $700 million, 700-megawatt gas plant in Genesee County, but withdrew it when the utility decided instead to purchase a 540-megawatt gas plant in Jackson for $155 million. Greg Moore, Nofs’ legislative director, said the state chamber wants to protect suppliers like Midland Cogeneration Venture — which contracts to

sell 1,240 megawatts of electric capacity to Consumers Energy through 2025 — once those purchase agreements expire. The chamber agrees with both Detroit-based DTE Energy Co. and Consumers that utilities should not be forced to sign purchase agreements to produce power simply because an alternative supplier has proposed another option, Studley said. Studley said the chamber’s goals include sustaining current levels of electric choice. Michigan has a 10 percent cap on the number of electric customers that can leave a regulated utility and purchase power from an alternative energy supplier. “We’re still optimistic that we can find the right balance between all of the different interests that are involved in this,” he said. Ariana Gonzalez, an energy policy analyst for Michigan with the Natural Resources Defense Council, a nonprofit environmental advocacy group, said she’d prefer to see an IRP component to the plan remain, in conjunction with mandates on renewable energy. Environmental groups are able to intervene in a utility’s IRP process and offer other options to generate power, she said, but the proceedings are costly and time-intensive — contributing to the argument for keeping renewable and efficiency standards in place. Dave Mengebier, Consumers Energy’s senior vice president of governmental and public affairs and chief compliance officer, said the utility favors the changes Nofs is making. Mengebier said utilities have to consider solar and wind projects, along with natural gas and other generating sources. “You would have to demonstrate that is the most reasonable way to provide for customer needs,” he said.

“The big difference between certificate of necessity in existing law (and what Nofs is proposing) is that it is project-specific. You propose a CON and then go in and present a whole suite of options (to generate power) and then get upfront approval.” Critics of the IRP process as Nofs proposed it say it lacks enforceable measures that would hold utilities accountable for their use of renewables and programs to increase efficiency. Nofs’ proposed amendment tries to wed long-term energy thinking with a project-based approach, and the two aren’t complementary, said Sam Gomberg, lead Midwest energy analyst with the Union of Concerned Scientists in Chicago. When integrated resource planning only happens within the certificate of necessity process, “it very much puts the cart before the horse” because utilities enter with the goal of convincing the public service commission to approve the large power project, Gomberg said. The purpose of an IRP, instead, is to explore all possible energy options and develop a business case based on the findings. Nofs’ proposal would make it harder for environmental groups and others to intervene, he said. “The line has already been drawn in the sand when you lead with the certificate of need process,” Gomberg said, adding: “I don’t know if there is actually a sweet spot to thread the needle between the chamber and the utilities on this.” Senate Majority Leader Arlan Meekhof will reserve judgment on energy policy until Nofs has a chance to present the revised bill to the Senate’s Republican caucus, said his spokeswoman, Amber McCann.

no program existed beyond residential services to support them. After a year of due diligence on the agencies seeing the best results with that population around the U.S., GreenLight imported Memphis-based Youth Villages LifeSet. Six years later, the nonprofit serves 177 youths annually. Six months after discharge, 84 percent of those youths were working and/or attending school, 84 percent were still living in a stable, home-like environment, and 88 percent had no further trouble with the law, GreenLight said. “In Detroit, we feel there’s a good movement on a lot of different fronts,” Simon said, pointing to companies and millennials moving to the city and new businesses being created. GreenLight was engaged by local “godparents,” as Simon calls them, who include Carol Goss, retired president of the Skillman Foundation; Mike Brennan, Civilla founder and retired CEO of United Way for Southeastern Michigan; Chris Rizik, CEO and fund manager, Ann Arbor-based Renaissance Venture Capital Fund; Benjamin Kennedy, deputy director of the Kresge Foundation’s Detroit program and director of its American Cities Practice; and Cindy Pasky, president, CEO and founder of

to complete a local search for an executive director of its Detroit affiliate, Simon said. Before the end of the year, GreenLight expects to name local leaders to the advisory committee to help identify service gaps. The executive director will choose one issue, and due diligence will begin to find the nonprofit around the country seeing the most success on that issue. By a year from this fall, GreenLight expects to announce the service gap it will work on for the first year and the nonprofit it will bring to Detroit to work on it. “There are very innovative, social entrepreneur models that have grown up and really moved the needle on particular issues. How does that innovation ... help Detroit (fill) gaps?” Simon said.

Greenlight’s process “brings a true investment mindset that will provide new opportunities and strong accountability in delivering results,” said Kevin Clark, president and CEO of Delphi Automotive Systems LLC, one of the project’s funders. “We think investing in GreenLight Detroit will pay dividends for decades to come.” Goss said she first heard about GreenLight from another fellow during a yearlong fellowship program she attended at Harvard University after her retirement at the end of 2013. While there’s innovation locally in addressing certain issues, such as the quality of early childhood programs, “there are some areas where we need to ... raise the bar,” she said.

Strategic Staffing Solutions Inc.

The organization plans by this fall

Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle Jay Greene contributed to this report.

Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

INDEX TO COMPANIES

These companies have significant mention in this week’s Crain’s Detroit Business: Anderson Economic Group .................................. 1

Hamzavi Dermatology....................................10,11

Arcturus Healthcare PLC ................................9, 11

Henry Ford Medical Group ..............................9, 11

CIG Capital Advisors ...........................................10

MedNetOne Health Solutions ........................9, 11

Consumers Energy ..............................................18

Michigan Agency for Energy ...............................18

Detroit Lions ..........................................................7

Michigan Chamber of Commerce ....................... 1

Detroit Medical Center ........................................ 4

Oakland Physicians Network Services ............10

Detroit Police Department .................................. 1

QLine .......................................................................3

eLab Ventures ......................................................16

Shinola Detroit LLC ...............................................7

Elektricity Nightclub ........................................... 15

Strata Oncology ...............................................3, 16

Firebird Tavern ..................................................... 15

United Physicians .................................................11

GreenLight Fund ....................................................3

Wayne State University Physician Group ...10, 11

WEEK Detroit to shut errant marijuana dispensaries by year’s end

D

etroit Corporate Counsel Melvin “Butch” Hollowell said he expects to complete in December the process of shutting down the city’s medical marijuana dispensaries that do not comply with its zoning ordinance. Of the city’s 211 dispensaries that were counted earlier this year, the city filed 17 nuisance abatement cases and won them all.

COMPANY NEWS n Publicis Groupe made a key

leadership change on its General Motors Co. account as the advertising agency combines the Detroit offices of Leo Burnett and DigitasLBi to service the automaker as a single unit. The newly combined entity, Engage M-1, will be led by DigitasLBi’s Robert Guay, who will retain responsibilities as executive vice president and managing director for the Boston and Detroit offices, and Ian Jones, who ran Leo Burnett Detroit, will be departing, Advertising Age reported. n After a $144 million loan on Sterling Heights-based Lakeside Mall came due this month, its Chicago-based owner, General Growth Properties Inc., didn’t make the payment, Bloomberg reported, and the default by the second-biggest U.S. mall owner may be a harbinger of trouble nationwide as a wave of debt from the last decade’s borrowing binge comes due for shopping centers. n Detroit-based Fontinalis Partners LLC said it has invested in Elementum, a cloud-based supply chain management company based in Mountain View, Calif. The amount was not disclosed. n SRG Global Inc., a tier-one interior and exterior trim supplier, is moving its world headquarters to Troy from Warren. Its new facility, at 800 Stephenson Highway, is more than 51,000 square feet and will house more than 250 employees, the company said. No timetable was given for the move. n International Bancard Corp., a Clawson-based credit card processing company, will move its headquarters to a Dan Gilbert-owned building in downtown Detroit at 1505 Woodward Ave. Construction on the offices will begin immediately, with the company's move expected to be completed by October. n Detroit-based Superior Capital Partners LLC, a private equity firm, announced it has sold Newburyport, Mass.-based Dianne’s Fine Desserts, to an affiliate of Chicago-based Geneva Glen Capital. Terms were not disclosed. n Magna Seating Detroit plans to invest nearly $6 million in its

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

ON THE WEB JUNE 11-17

Detroit Digits

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

3.9 percent

The newly instituted increase in tuition for in-state ungraduate students at the University of Michigan for the 2016-17 academic year. Also last week, Michigan State University approved increases of 3.7 percent for in-state freshmen and sophomores and 3.9 percent for in-state juniors and seniors.

$17.5 million

The donation by Sidney Forbes, founder of Southfield-based shopping center developer Forbes Co., and his wife, Madeline, to create the Forbes Institute for Cancer Discovery within the University of Michigan’s Comprehensive Cancer Center. It is the largest private donation for cancer research in the school’s history.

$54 million

The investment by Mexico Citybased automotive supplier Tremec Corp. to establish a manufacturing facility in Wixom. Tremec plans to lease and equip a new building to serve as its U.S. headquarters, sales and technical center, and advanced automotive transmission production operation.

Highland Park facility and add 148 new jobs, thanks in part to a public-private investment to rebuild the Davison Freeway service drives nearby. Highland Park will contribute $233,100 in matching funds for the $1.01 million project. n The shareholders of Ohio-headquartered FirstMerit Corp. and Huntington Bancshares Inc. approved the sale of FirstMerit in separate meetings of banks with significant Southeast Michigan presences. Columbus-based Huntington is acquiring Akron-based FirstMerit in a $3.4 billion stock-and-cash deal expected to be completed in the third quarter of this year. n The Detroit Lions announced they will have cheerleaders beginning this season, and have hired former Detroit Pistons dance team director Rebecca Girard-Smoker to manage them. n The Farmington Hills-based Bosch Community Fund will help support Detroit Public Schools students with a new $125,000 grant for two programs that include science, technology, engineering and math (STEM) in the curriculum. n Ann Arbor-based Millendo Therapeutics Inc. began Phase 2 U.S. Food and Drug Administration trials at the University of Michigan Health System of a drug candidate called ATR-101 on patients with a rare inherited endocrine disorder. The

trial will eventually involve 15-20 patients at six or seven medical centers around the U.S. n Ann Arbor-based Aysling, a provider of customer-relationship software, marketing software and digital media production services, announced it has formed a technology and business relationship with Berlin-based Sprylab Technologies GmbH. n The commissioning ceremony for the U.S. Navy’s new USS Detroit has been rescheduled for Oct. 22 on the Detroit RiverWalk at the GM Renaissance Center. It was originally scheduled for Sept. 17, but the vessel’s busy Wisconsin shipyard, ongoing sea trials and the crew’s training regimen fueled the delay, said John Peracchio, chairman of the local Navy League of the United States.

OBITUARIES n Marjorie Fisher, whose long

philanthropic activity included becoming founding chairwoman of the Max M. & Marjorie S. Fisher Foundation, died June 12. She was 92. She was married to Detroit industrialist Max M. Fisher for 52 years until his death in 2005. Marjorie Fisher n Ron Mason, longtime Michigan State University hockey coach (1979-2002) and former MSU athletics director (2002-07), died June 13. He was 76. n Gilbert Silverman, former president of the Holtzman & Silverman real estate company and founder and former president and chairman of Farmington Hillsbased Village Green Management Co., died June 12. He was 91.

RUMBLINGS

New book tackles Flint water crisis

A

new book publishes Tuesday that bills itself as the first to offer complete analysis of the Flint water crisis. Poison on Tap: How the Government Failed Flint, and the Heroes Who Fought Back is an analysis of the situation by thrice-weekly online news and analysis publication Bridge Magazine, and is based on the news outlet’s journalism. A statement from its publisher describes the 330-page softcover book as “a riveting, authoritative account of the government blunders, mendacity and arrogance that produced the lead-poisoned Flint water crisis.” It retails for $19.95 (plus shipping), and is published by Traverse City-based Mission Point Press. The book was edited by longtime Detroit Free Press staffer Bob Campbell. One dollar from every book sold will be donated to the Flint Child Health & Development Fund of the Community Foundation of Greater Flint. Bridge is owned by the Ann Arbor-based Center for Michigan, a nonpartisan nonprofit whose mission is to foster a better Michigan through an informed citizenry. Crain’s and Bridge have a joint venture agreement to produce high-quality, nonpartisan journalism.

Pure Michigan could see $1M budget increase in ’17 The Pure Michigan marketing campaign appears poised for a slight funding boost under a budget approved by lawmakers. The 10-year-old state tourism campaign, housed within Travel Michigan and the Michigan Economic Development Corp., would receive an additional $1 million in state funding under a budget proposal approved by a legislative conference committee. That would bring

Crain’s Detroit Business earns 4 national awards Crain’s Detroit Business won four awards for its 2015 work in a national journalism contest among business magazines and newspapers that are members of the Alliance of Area Business Publications. In the national contest, 46 publications competed for top honors in four categories. The winning work from Crain’s Detroit includes: n Bronze in the category “best newspaper” for large, tabloid-size business publications. Among judges’ comments: “The result offers a realistic look at the city while sharing a caring sense of civic pride.” n Gold in the category “best local coverage of a national economic story” for Lindsay VanHulle’s report on the ALICE worker, the plight of the working poor and what that segment of

19

worker means to the workforce and employer strategy. VanHulle is a reporter for Crain’s Detroit Business and Bridge Magazine. n Silver in the category “best body of work by a single writer” to reporter Kirk Pinho for his work on the real estate beat. Among the judges’ comments: “This reporter's portfolio features great versatility and enterprise.” n Gold for best ancillary publication for “Detroit 2.0,” an annual supplement that examines economic development in Detroit. The editor of the report was Managing Editor Michael Lee, and several staff members completed cover stories for the report. The award-winning business publications were honored at the conclusion of a three-day annual summer conference in Des Moines, Iowa. For more, see bizpubs.org.

ALISON GOSS/TRAVEL MICHIGAN

A Pure Michigan moment: the sun rising over Traverse City’s Grand Traverse Bay. Pure Michigan funding to $34 million in the 2017 fiscal year that starts Oct. 1. The budget awaits Gov. Rick Snyder’s signature. State tourism leaders this year have focused Pure Michigan efforts on Detroit’s post-bankruptcy rebound, as well as on so-called “passion” marketing areas as craft beer and farm-to-table food. The fall tourism campaign will focus on scenic routes, though more specific details have not yet been released. The summer campaign is focused on promoting state lakes. Pure Michigan has a roughly $12 million national TV ad buy this year. McCann Erickson’s Birmingham office produced the TV spots.

State mobility industry at Silicon Valley summit Michigan’s burgeoning mobility industry will be on display this week in the place widely considered its chief rival in the development of driverless cars — Silicon Valley. “The Detroit Story: Transformation Through Disruptive Social, Food and Mobility Entrepreneurship” will be told Thursday in Palo Alto, Calif., during the 2016 Global Entrepreneurship Summit. The event will be hosted by the White House’s Detroit federal working group, the New Economy Initiative, Endeavor Detroit and watchmaker Shinola Detroit LLC. The summit is designed to highlight entrepreneurs and connect American startups and investors with others from around the world. The Detroit story will include presentations from James Sayer, director of the University of Michigan’s Transportation Research Institute, and Anya Babbitt, founder and CEO of ride-sharing service SPLT. Other speakers are expected to focus on social enterprise and food, including Eastern Market Corp. President Dan Carmody. Full event details and a speaker list can be found at www.detroit story.co/program. Michigan’s mobility leaders presented last week at the ITS America 2016 convention in San Jose, Calif., hosted by the Intelligent Transportation Society of America. Michigan’s leaders talked about investments in mobility research and development, including the Planet M mobility marketing campaign launched at the Detroit Regional Chamber’s Mackinac Policy Conference.

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