Crain's Detroit Business, July 11, 2016 issue

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Bridal shop owner among those setting up shop along Jefferson Avenue, Page 3

JULY 11 - 17, 2016

50 firms in the fast lane

Auto suppliers, construction companies and more ride improving economy as Fastest-Growing Companies in Southeast Michigan, Pages 11-20

Coke fight to go before zoning appeals board City wants pile to be contained in a structure; estimated cost $3.2M By Kirk Pinho kpinho@crain.com

A Detroit business owner may have to spend piles of cash to store piles of an industrial byproduct that was the subject of a furor last fall started by a tweet. In October, former state Rep. Rashida Tlaib notified several thousand followers on Twitter of the piles of what she referred to as “petcoke” on a Detroit riverfront site, 2½ years after a River Rouge-based company came under fire for not properly containing dust from the petroleum refining byproduct at a site near the Ambassador Bridge.

CRAIN’S MICHIGAN BUSINESS

Up north bucks

A slew of media coverage followed. But it wasn’t petroleum coke at the Waterfront Petroleum Terminal Co. site, according to the property owner’s attorney, Beth Gotthelf, a shareholder in the Bloomfield Hills office of Butzel Long PC. Now the city is trying to force the owner of the site to build a 100-by700-foot structure costing an estimated $3.2 million to contain the mounds of metallurgical coke breeze — not petroleum coke — in an area of the city that has been heavily industrial for decades but has long had tensions over pollution. Harry Warner, owner of Waterfront Petroleum Terminal Co. and subsidiaries that own the former Revere Brass and Copper Inc. land on SEE ZONING, PAGE 35 KOSCH DINING SOLUTIONS

Main Street Market opened May 23 in downtown Gaylord in a 136-year-old building that was home to a hardware store for

about 100 years.

Rochester’s Kosch Hospitality hunts double-digit revenue increase By Sherri Welch swelch@crain.com

CHRIS EHRMANN

Piles of construction aggregate, like rocks and sand, at the Waterfront Petroleum Terminal Co. site along the Detroit River. © Entire contents copyright 2016 by Crain Communications Inc. All rights reserved

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From where Gordie Kosch is standing, Gaylord is about as central as it gets in Michigan. Its location is why he and his brother Gary opened the Otsego Grand Event Center in the city last fall, and just over a month ago, Main Street Market, an upscale bistro, coffee bar and gourmet market downtown. “For people who have family or business throughout the state, Gaylord is ... easy to get to, and it’s growing,” said Gordie Kosch, pres-

More Crain’s Michigan Business: Small Petoskey VC firm finds big deals, Page 21

ident and CEO of Rochester-based Kosch Hospitality LLC, which is doing business as Kosch Dining Solutions. The northern Michigan city is on I-75, the largest artery in the state, and near a significant eastwest artery in M-32. It’s about three hours from Rochester, and an hour from the Mackinac Bridge, making it a shopping des-

tination for many Yoopers, he said. “I think that’s why a lot of big boxes have opened there on the west side of I-75,” he said. The new market and banquet facility in Gaylord, combined with contracts to manage food and beverage at the new Jimmy John’s Field in Utica, Maple Lane Golf Club in Sterling Heights and three municipal golf courses in Kentucky are expected to put Kosch Dining Solutions on track for $18 million in revenue this year. That’s up 29 SEE KOSCH, PAGE 34

Nurturing rapidly growing businesses

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MICHIGAN

BRIEFS

parently chose the free version of Pandora’s service. Deacon’s lawsuit against Pandora — a music streaming and automated music recommendation service headquartered in Oakland, Calif.— was dismissed in 2012 by a federal judge in California; Deacon is appealing.

A downtown Grand Rapids doughnut shop closed after more than two years in business — and, in a Facebook post, blamed the closure on the local homeless population that impacted its operation. Propaganda Doughnuts said in the post last week that it was “unable to find answers and overcome the problem of the increasing amount of homeless and disadvantaged people who now frequent the street in front of our location,” the Grand Rapids Business Journal reported. “It was too much to ask our customers to accept being harassed and approached by panhandlers. ... Some customers were approached and panhandled even before getting out of their vehicles.” The post was removed from the shop’s Facebook page but was posted via screenshot by a commenter. Before the removal, many commenters replied they were disappointed the business attributed its closing to the homeless, but others were sympathetic. One commenter criticized Propaganda as an “Overpriced Hip-

The metro Detroit-based Great Lakes Water Authority has voted to

GR doughnut shop blames demise on homeless

ster Doughnut Shop — Unable to Gentrify (an) Entire Neighborhood to (the) Satisfaction of (its) Owners.” Landlord Bob Dykstra said he’s seeking another tenant but that the neighborhood issues of homelessness, gang activity, drug dealing and prostitution continue to grow. “Tenants aren’t the problem,” he said.

Music lover dealt court setback in Pandora case The Michigan Supreme Court hit a sour note with a state resident who accused Pandora of illegally sharing his music tastes with others on the internet. In a unanimous decision last week, the high court ruled that the resident, Peter Deacon, did not qualify as a “customer” who rents or borrows music from the streaming service, AP reported. A federal appeals court had asked the Michigan court to rule on the issue, and the answer was important because Deacon claimed Pandora violated state privacy law by sharing his preferences. The high court said Deacon isn’t a customer under the law because no money changed hands. Deacon ap-

Detroit authority extends Flint water contract extend its emergency service agreement with Flint for another year without an increase in charges while the city copes with a lead-tainted water crisis, AP reported. Flint’s supply was switched from the Detroit water authority to the Flint River to cut costs in 2014 in anticipation of an eventual move to the Karegnondi Water Authority when it starts taking water from Lake Huron. Flint switched back to Detroit water last fall after the problems with lead became apparent. Just when Flint will start receiving water from Karegnondi is uncertain.

MICH-CELLANEOUS n The Michigan Court of Appeals

has upheld a 2013 decision by state regulators to allow Consumers Energy to roll out high-tech meters, AP reported. The attorney general’s office had challenged the Jackson-based utility’s ability to recover the costs of the so-called smart meters, but in a 2-1 decision last week,

the appeals court said state regulators relied on sufficient evidence supplied by the company. Smart meters allow utilities to track electricity consumption without sending someone to each home. n Officials in Flint are ready to kick off renovations at the Capitol Theatre Building with last week’s announcement that the Uptown Reinvestment Corp. and The Whiting have officially acquired the building, MLive.com reported. The downtown theater is slated to reopen in fall 2017. Officials said previously that the project was expected to cost $21 million and includes renovations of 25,000 square feet of attached office and retail space. n Grand Rapids-based Universal Forest Products Inc. was named by Forbes magazine as the best performing company in Michigan, based on total returns, MLive.com reported. The lumber wholesaler and manufacturer reported a total rate of return of 65.6 percent, according to the magazine, which tracked every publicly traded company in the U.S. and selected the top performer in each state by evaluating their rate of returns for the past year. n The Gerald R. Ford International Airport officially transitioned to a regional authority governance model after 60 years as a wholly owned asset of Kent County, MiBiz reported. The airport will now be governed by an airport authority board appointed by Kent County commissioners. Backers of the move say it allows the air-

INSIDE THIS ISSUE

CALENDAR .........................................31 CLASSIFIED ADS.............................. 33 DEALS & DETAILS.............................31 KEITH CRAIN....................................... 8 MARY KRAMER .................................21 OPINION .............................................. 8 OTHER VOICES ............................... 8, 9 PEOPLE .............................................. 32 RUMBLINGS ......................................38 WEEK ON THE WEB .........................38

COMPANY INDEX: SEE PAGE 37 port to be more of a regional asset. n Ferris State University has received support for a $30 million project to renovate and expand an academic building on campus, the Grand Rapids Business Journal reported. The state will provide $22.5 million toward FSU’s future Center for Welding Excellence and Center for Advanced Manufacturing. FSU will contribute the rest. Construction is slated to begin this year and be completed in 2018. n TecNiq Inc. will invest $6.6 million in the construction of a 100,000-square-foot production facility in Comstock Township near Kalamazoo, MiBiz reported. The manufacturer of LED lighting products for fleet vehicles, construction trailers and other applications, expects to hire an additional 120 workers as a result of the expansion from its current facility in Richland.

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Chesterfield Cabela’s is a go, but mall plans shift Outlet center plans idle due to tenant pullback

Years of effort pay off as small businesses grow in Detroit corridor

By Sherri Welch swelch@crain.com

CHRIS EHRMANN

The intersection of Jefferson Avenue and Chalmers Street is part of Detroit’s East Jefferson corridor, which is benefiting from an ongoing redevelopment effort.

East Jefferson’s new direction By Marti Benedetti mbenedetti@crain.com

TV fashion star Keasha Rigsby co-owns a recently opened upscale bridal salon that is among the new businesses along the Jefferson corridor.

A force she can’t quite explain is responsible for Keasha Rigsby locating her upscale bridal salon in an 1889 mansion in Detroit’s East Jefferson Avenue corridor. “It was meant to be. Every time I drove by this mansion, something was pulling me there,” said the co-owner of Beautiful Bridal with Keasha. She and co-owner Vallery Hyduk moved to Detroit from New York earlier this year after starring in the TLC reality show “Say Yes to the Dress” and hosting “Keasha’s Perfect Dress” on TV One last summer. Earlier this year, the partners were the recipients of a $50,000 Motor City Match grant. Beautiful Bridal, along with a new Caribbean restaurant, a Christian yoga center, women’s clothing boutiques, a casual branded clothing store, a used record store, and a coffee shop and bakery, are a few of the more recent businesses that have planted roots along the eight miles between downtown Detroit and Grosse Pointe Park.

Josh Elling, executive director of Jefferson East Inc., which promotes neighborhood rede-

velopment, said more than 20 years of efforts to revitalize the East Jefferson Avenue corridor on the city’s east side have been paying dividends in recent months. “Over the last two years, the amount of interest we’ve seen in Jefferson Avenue has been astounding,” he said. Since 2009, $1 billion has been invested in the five neighborhoods from Alter Road to downtown along East Jefferson, Elling said, adding that $540 million of that went to improvements to the giant FCA US plant. Within the last year, seven new businesses have opened in the Jefferson-Chalmers neighborhood in the corridor. Since 2007, JEI’s budget has climbed from $140,000 to more than $1 million. “This is one of those areas that continues to grow, but is growing quietly,” Elling said, adding that the city and mayor’s office have been “very supportive of development deep within the city’s neighborhoods.” JEI has its offices in an old bank building in SEE JEFFERSON, PAGE 36

A new Cabela’s store in the works for Chesterfield Township since last fall has secured final site plan approvals to locate near I-94 and Hall Road, but it won’t be part of an outlet center, as developers had hoped. Instead, the property’s owners are moving forward with development of an open-air mall known as a lifestyle center, the Chesterfield Towne Center. As planned, it would include a large grocery, big-box retailers like Marshall’s and Home Goods, a movie theater and several hotels. Developers Thomas Guastello, owner of Birmingham-based Center Management, and Cincinnati-based Jeffrey R. Anderson Real Estate, which jointly own the 200-acre parcel where Cabela’s and other retailers are locating, had been working on the outlet center proposal for the past two years. But they have not been able to attract large, upscale retailers such as Polo, Nordstrom, Saks Fifth Avenue, Nike and Adidas to serve as anchors at the proposed center. Major retailers “are not expanding at any discernible pace at all,” Guastello said, noting they’ve cut back considerably on new outlet center stores over the past 16 months. “At the end of the day, when we view the outlet center, we had and still have leasing, but that’s contingent on getting anchors,” he said. “And if any of the anchors were to SEE CABELA’S, PAGE 33

Conflicting bills prompt debate over mission, funding of community colleges By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

LANSING — In the long-running policy battle about whether community colleges in Michigan should be allowed to offer bachelor’s degrees, some state lawmakers opposed to the idea are willing to let them do it — if they’ll agree to forfeit revenue they collect from local property taxes. It’s an ultimatum that advocates for expanded degree choices for two-year schools say will stop the effort dead, because the colleges

rely on property taxes for, on average, roughly a third of their operating revenue. A two-bill package introduced in the House by Rep. Jeff Farrington, R-Utica, would prevent community colleges from levying property taxes if they created bachelor’s degree programs, with the exception of four programs the Legislature approved in 2012. Farrington’s bills are in direct response to a separate bill that has stalled in the Senate for more than a year. Introduced by Sen. Mike

Shirkey, R-Clarklake, the legislation would allow community colleges to offer bachelor’s degrees in ski area management, allied health, information technology, manufacturing technology and nursing. They would be allowed in addition to the four programs greenlighted in 2012 — cement technology, energy production technology, maritime technology and culinary arts. The outcome may not be decided this legislative term. Shirkey’s bill hasn’t gone up for a vote in the SEE COLLEGES, PAGE 37

MUST READS OF THE WEEK

Small-biz health Some local insurers say they’ll still offer policies that avoid ACA mandates for last time in 2017, Page 6

World Watch: U.K. In the wake of the Brexit, here are some local companies with significant British operations, Page 26

Afghanistan center opens After fits and starts, an auto center in Afghanistan opens for TTI Global, Page 27

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ANDREW POTTER

Mark Brodie (left), managing member of Global Transportation Management and vice president of Deshler Group; Richard Kaufman, deputy Wayne County executive; Dennis K. Wright, mayor of Livonia; and Robert Gruschow, president of Deshler Group, listen to remarks by Lisa Lunsford, CEO of GS3 Global (Global Strategic Supply Solutions) and vice president of Deshler Group at

a recent ribbon cutting in Deshler’s Livonia offices.

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Livonia’s Deshler Group buys door striker manufacturer By Dustin Walsh dwalsh@crain.com

Livonia-based Deshler Group is quietly expanding in Livonia after adding to its manufacturing portfolio. The family of companies, ranging from a hood striker supplier to logistics firm, closed in March on the $9 million acquisition of fellow Livonia company MSD Stamping Co. The transaction is expected to add $16 million to $17 million to Deshler’s bottom line as well as establishe a local manufacturing presence for Deshler’s Amanda Manufacturing LLC subsidiary, which operates out of a plant in Ohio, said Robert Gruschow, president of Deshler and its warehousing, distribution subsidiary Feblo International LLC. MSD will be rebranded as Amanda Manufacturing Michigan. Revenue for Deshler, and its seven subsidiaries, was $135 million in 2015, up from just $40 million in 2009. Gruschow projects the company to top $150 million in 2016, an annual growth rate of 32 percent since 2010. MSD manufactures door strikers, which aligns with Amanda Manufacturing’s door and hood closure systems it supplies to the auto industry. “We gain a bit of market share, but the acquisition really gives us technology we didn’t have inhouse,� Gruschow said. “This allows us to expand and sell into other (automakers) as well as expand into nonautomotive markets. “Everything has a door, and every door needs to close. We feel this is an engineered product that isn’t going away any time soon.�

ANDREW POTTER

The Deshler Group recently completed a yearlong renovation of its Livonia headquarters. It closed in March on the $9 million acquisition of fellow Livonia company MSD Stamping Co. Gruschow said Amanda is now targeting markets like off-road vehicles, agricultural, military and others. Deshler acquired MSD from New York private equity firm Monomoy Capital Partners after customer Ford Motor Co. pointed Deshler to the opportunity, Gruschow said. Kim Rodriguez, owner of advisory firm SCRMVision and former principal at KPMG, negotiated the deal for Deshler. Gruschow said Deshler had been working on the deal since February 2015. “There was considerable negotiations that went on over time,� Gruschow said. “Privately held companies and private equity have different goals. They were interested in buying and selling, we were interested in long-term goals.� Last week, Deshler celebrated

renovation of its offices in Livonia with a ribbon cutting and plant tours. Its other subsidiaries include aftermarket supplier Amanda Products (USA); Amanda International, which operates in Costa Rica; sensor assembly firm Global Strategic Supply Solutions LLC, known as GS3; logistics services firm Global Transportation Management LLC; and Redford-based Automated Media Inc. GS3 is a certified minority-owned supplier — Gruschow co-owns it with CEO Lisa Lunsford. Lunsford is also the vice president of sales and marketing for Deshler. Lunsford was named one of Crain’s 100 Most Influential Women in June. Deshler employs 440 worldwide, with 210 in Michigan. Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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Michigan-China Innovation Center to open downtown YOU FLY PRIVATE

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in the 1001 Woodward Building in downtown Detroit on Monday. “This center will focus on creating jobs in Michigan in partnership with China,” said Brian Connors, center executive director and formerly the China business development manager for the Michigan Eco-

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Connors has been interviewing candidates to fill the 10 full- and parttime positions for the new office. The staff will be bilingual, he said. The creation of the nonprofit center was announced in March after it received a $5 million grant from the Michigan Strategic Fund Board. Its goal during the next five years is to encourage Chinese companies to invest in the state, thereby creating new job opportunities. Funding will go toward salaries, marketing along with a Chinese website, startup costs, leasing 2,000 square feet of office space and travel. The board is part of the MEDC. “With the incredible growth of China’s economy, it is a crucial strategic partner. We want to make sure Michigan is taking advantage of all the opportunities so we can drive economic growth and increase our competitiveness,” he said. Connors said that while there will be an emphasis on attracting automotive component manufacturing and research and development, the center also will pursue other industries, namely mobility. “As mobility evolves in the U.S., it is also evolving in China,” he said. “From autonomous vehicles to ride-sharing platforms to new forms of energy, we will have the opportunity to align what we are doing with mobility with the exciting things coming out of China.” Connors said he felt strongly about locating the center downtown. “As Detroit goes, so goes the state of Michigan. It is an exciting opportunity. We expect to see a lot more traffic downtown by senior Chinese businesspeople. We’re excited to be part of the innovation downtown.” He already has “a number of fish on the line” for potential job creation, and he predicted announcing job-creating investments in the state in the coming months. Connors said Gov. Rick Snyder has been active in procuring relationships with China. In August 2015, he signed cooperative agreements with the provinces of Guangdong, Sichuan, Hubei and Zhejiang, as well as the city of Chongqing, which is independent of the province. The state is home to about 200 Chinese companies representing $3 billion in direct foreign investment.

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Some biz get option to keep to 2018 non-ACA conforming plans By Jay Greene jgreene@crain.com

Health Alliance Plan, Priority Health and Federated Insurance have decided to continue offering small-business customers with two to 50 employees the option of continuing through 2017 health plans that do not conform to new benefit and rate-setting rules mandated by the Affordable Care Act. After President Barack Obama was criticized for his campaign promise that individuals and businesses could “keep their policy if they wanted,� he deferred to state insurance commissioners in November 2013 whether to allow health insurers to extend plans that were not Obamacare-compliant through 2017. Under Obamacare, health insurance policies must include a minimum of 10 essential health benefits — including wellness, mental health, ambulatory and maternity coverage — set prices using an age rating system, and comply with other affordability requirements. Michigan’s health insurers were allowed to choose whether they wanted to extend existing plans for three years starting in 2015. Only a few allowed small businesses to continue their existing plans with

price increases that reflect historical trends. In late 2014, Detroit-based Blue Cross Blue Shield of Michigan was one of several insurers that decided not to extend non-Obamacare-compliant health plan choices for 2015, forcing many clients of the state’s dominant insurer to decide whether to purchase a more expensive ACA-compliant plan with the Blues or go elsewhere. Michael Embry, president of Comprehensive Southfield-based Benefits Inc., said HAP and Priority Health’s decision to extend transitional relief for another year is good news for his small-employer group clients. “They have Michael Embry: been struggling Decision to extend with age rating,� relief is good news said Embry, noting that noncompliant plans can use composite rating to price their products, which can save some small groups money. Under composite rating, insurers use a variety of factors to create a uniform rate for single employees and families in a small-business

group, which could include health status, claims history, gender, occupation and industry. However, there is no age rating of individual employees and their family members. For example, adding a 25-year-old costs the same as adding a 60-year old. Moreover, employers charge employees the same cost-sharing contributions, making it easier to administer plans. But under Obamacare’s age, or per member, rating, insurers price total premiums based on the age of each enrolled member in the plan, up to three children under age 21. Other factors affecting rates could include tobacco use and geography. Each employee is charged different cost-sharing rates for their health insurance. Scott Lyon, senior vice president with the Small Business Association of Michigan, said there is no question that grandfathering in existing policies will help small-business owners who wish to remain with their current plans and avoid the change to an ACA plan. He said he is not sure how many small groups are affected. “My sense is that the vast majority of small businesses have, in the last few years, moved away from the grandfathered plans to an ACA plan,� Lyon said. “If I had to bet, the

“There was a lot of backlash when the ACA was rolled out and the president said you can keep the plan you wanted. This upset small businesses because they couldn’t keep their plans.� Steve Selinsky, HAP’s director of sales

number of small-business grandfathered plans would be in the single digit percentages.� Lyon said SBAM supports eliminating the member-level rating system that was mandated by the Affordable Care Act. “We support Scott Lyon: Most movement back biz have moved to to a siman ACA plan. pler-to-administer rating system of single, two-party and family rates based upon the ages of all the covered employees of the company — the pre-ACA system employed by most carriers,� Lyon said. Lyon said the biggest advantage of staying in a grandfathered plan is avoiding member level rating and

sticking with the single employee, two-person or family rates that were in place before Obamacare. “While that is certainly an important consideration, the prices (rates) that a small-business owner will pay for employees’ health insurance plan is most likely more important,� he said. Last year, small-business group price increases averaged about 10 percent for renewed policies that weren’t ACA compliant, but the range was from no increase to about 25 percent, experts told Crain’s. For newer ACA-compliant plans, price increases initially ranged from 20 percent to 60 percent over predecessor plans. Price increases have since dropped to average below 10 percent, but rates usually depend on the average age of the plan members and geography of the business. Some SEE NEXT PAGE

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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 LY 1 1 , 2 0 1 6

ACA

FROM PREVIOUS PAGE

employer groups, if their workforce average age is younger, could have received up to 10 percent price cuts. Traditionally, small-business groups pay higher rates — 8 percent to 18 percent more than large firms for the same health insurance policy — because they don’t have the buying power of larger companies, said the National Conference of State Legislatures. Steve Selinsky, HAP’s director of sales, said Detroit-based HAP decided to extend its small-business plans through 2017 to give its customers flexibility to choose a new Obamacare plan or keep their old plan. “There was a lot of backlash when the ACA was rolled out and the president said you can keep the plan you wanted. This upset small businesses because they couldn’t keep their plans,” Selinsky said. But once Obama allowed state insurance commissioners to decide whether to allow insurers to grandfather in plans, HAP decided to work with its customers to offer what was best for them from 2015 through 2017, Selinsky said. “Some carriers pushed customers into the new health plans,” he said. “We have a nice block of small

group businesses. Some felt their current plan fit them better.” Scott Norman, vice president of sales and client services at Grand Rapids-based Priority Health, said Priority’s price increases for 2017 for small groups are expected to average only about 3 percent, with no small businesses paying more than a 10 percent increase. Of Priority’s 100,000 total members in its small group plans, Norman said about 40,000, and several thousand employers, remain in old pre-Obamacare plans. He estimated about half of the small businesses in Michigan initially stayed with their older plans, but every year more small groups switch to Obamacare-compliant plans. “They stay to maintain benefit offerings or avoid a rate increase,” said Norman, noting that some small group employers have switched to Obamacare plans to increase benefits and decrease costs. Overall, Priority’s small-group business product line has increased by 2 percent the past year after declining for several years. “We have really favorable rates now,” he said. Small businesses will have to switch to Obamacare-compliant plans after the extension expires at the end of 2017. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

University research network seeks to partner with private-sector companies Group of six Michigan schools offering up to $40,000 for opportunity By Tom Henderson thenderson@crain.com

The state’s six largest research universities want to do something about the disconnect between the private sector and their researchers and lab facilities, and they’re offering up to $40,000 to companies looking for collaborative help. Last week, Crain’s reported findings from a report on the state’s 21st Century Jobs Trust Fund and its efforts to diversify Michigan’s economy, which included the fact that Michigan fares poorly compared to Midwest and benchmark states at collaboration between the private sector and its research universities. The Michigan Corporate Relations Network is hoping to change that by offering financial incentives to help for-profit companies improve their technology or broaden their product offerings through partnering with university researchers. According to the report, by Co-

lumbus, Ohio-based TEConomy Partners LLC in 2013, there was just

$1,610 spent per $10 million of gross state product in Michigan on industry-sponsored R&D at state universities. That compared with the national average of $2,049 and ranked Michigan ninth among the 12 benchmark states identified by the report, which included Midwest states and other states with similar diversification efforts. MCRN was formed in 2011 by the Michigan Economic Development Corp. and is a partnership of the state’s six largest research organizations — the University of Michigan, Michigan State University, Wayne State University, Western Michigan University, Michigan Technological University and the University of Michigan-Dearborn — to connect the private sector to university researchers. Through a MCRN program called Small Company Innovation Pro-

gram/Technology & Commercialization Assistance, applications are now being accepted for companies in need of research help. Companies can get up to $40,000 but must come up with matching funds. According to Mike Forbis, who works in the technology and commercialization assistance program at UM’s Institute for Research on Labor, Employment and the Economy, who will oversee the MCRN program, about 20 companies will be accepted. He said he hopes to finish enrollment by early fall. “We evaluate candidates’ viability, technology roadmap and business model as part of the process to ensure funds are utilized wisely and strategically,” he said. Companies can get more information or apply at https://michigancrn.org, or they can send Forbis an email at mjforbis@umich.edu. Tom Henderson: (313) 446-0337 Twitter: @tomhenderson2

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OPINION

Coke issue merits fairness

P

et coke. Met coke. Coke breeze. Which of these pose the greatest danger to human health? And does an industrial property owner have a right to store manufacturing byproducts on site? Those are among the questions suggested by Kirk Pinho's Page 1 story about Harry Warner, owner of Waterfront Petroleum Terminal Co. in southwest Detroit. Waterfront is appealing a decision that would require him to spend more than $3 million to build a storage facility for manufacturing byproducts en route to being shipped elsewhere. The stakeholders involved all have compelling points. But terms have been thrown around loosely to define the various forms of “coke.” But there are important distinctions. Pet coke, a byproduct of petroleum processing, has health risks ascribed to airborne particles. Metallurgical coke breeze, formed during the process to make steel, is composed of larger particles that don’t create clouds of dust, similar to an aggregate. Waterfront was storing the latter, but has been condemned with the health risks of the former. This dispute, working its way through Detroit zoning appeals, is part of bigger and broader issues. First is the tension between the longtime industrial use of many riverfront sites in southwest Detroit, neighborhood demands and potential for non-industrial redevelopment. Detroit needs jobs and investment. But it also needs clean air and healthy neighborhoods. The only fair way to get both is to use data and facts and leave emotion and politics out of the decision-making process.

Past may show forward path on race The racially motivated sniper attacks on Dallas police officers last week stunned the nation and the world. But so, too, did cellphone video of the aftermath of the earlier fatal shooting of Philando Castile by a police officer in a suburb of St. Paul, Minn. What have we learned about race in America? About training police officers? The answers to both may be “not enough.” Fortunately in Detroit, Police Chief James Craig has espoused the principles of community policing since returning home to lead the force in 2013. Redeploying officers to work closely with neighborhood groups and residents is one of the best ways to build community trust. Last month, the Pew Research Center released a survey about racial attitudes among black and white Americans. Most blacks — 88 percent — say more work on racial relations is needed; 38 percent of whites say the country has done enough. More dramatically, 70 percent of white Americans believe individual instances of discrimination are more prevalent than institutional racism; 40 percent of blacks think institutional racism is the issue. Ironically, next July, Detroit will observe the 50th anniversary of its own tragedy that claimed 43 lives, injured more than 1,100 people and resulted in 7,200 arrests. Call it the “riots,” the “insurrection” or the “rebellion,” among the root causes were allegations of a history of police brutality toward the city’s African-American residents. The Detroit Historical Museum’s initiative, “Detroit 67: Looking Back to MOVE FORWARD,” may be one of the best opportunities for our entire region. To date, 100 community organizations have joined the initiative to record the past but create paths to move forward. For more information, visit www.detroit1967.org.

Immigration policies must change if U.S. wants to remain on top

N

early 130 years ago when automobile manufacturing began in Detroit, the United States led the world in invention and innovation. Today, that momentum has stalled. Unfortunately, for partisan reasons, Republicans and Democrats are continuing to avoid what is best for the nation’s economy and our world position as leaders in innovation. National policies on immigration need to change if the Motor City and the nation are to remain an industrial superpower. The refusal of Democrats and Republicans to increase the number of foreign-born engineers permitted to come and work in the U.S. is hurting us. This is an issue Donald Trump and Hillary Clinton — who both want to boost U.S. job growth — must stand behind. America is a nation of business administration and liberal arts majors. Those are the top two degrees that U.S. students have chosen to pursue over the past few decades. There are more individuals majoring in fields where jobs are scarce or wages are falling than there are in engineering, where jobs are abundant and high-paying. Mechanical engineering, a necessity in Detroit, does not even rank nationally in the top 20. It trails behind history and sociology majors at a weak 26. Engineering itself ranks 92, according to the National Science Foundation and the National Academy of Engineering. That was not the case four decades ago. The reasons we choose to be philosophers instead of engineers are for another debate. But, for now, elected officials

OTHER VOICES Tel Ganesan

Ganesan is CEO and president of Kyyba Inc., a Farmington Hills-based global IT, engineering services and a software product company.

need to look to talent outside of our borders to fill the talent gap at U.S. corporations. One hundred years ago, horses and buggies were still in every American town. Mass manufacturing of automobiles struck fear in the hearts of Americans who thought it would kill jobs. Of course, the opposite proved true and this country shaped the global economy in manufacturing, industry and innovation. Fear of change is normal, but it shouldn’t cause us to resist growth. What about today? Where is the innovation? The next phase of great global-changing technology is in connected cars, and Detroit should lead the way. Again, the problem is there simply are not enough engineers to help bring the auto industry to the next major level. Corporations and companies from coast to coast are dealing with the serious issue of employment vacancies in areas of science, technology, engineering and mathematics. The fix, compared with other areas

of immigration, is nearly free of controversy. Last year, the feds permitted 65,000 foreign-born workers to work in the states through an H1-B visa, yet received more than double the number of applications. Every submission was tied to a specific available U.S. job — meaning there were more than 170,000 employment positions last year that needed to be filled by foreign workers because there were not enough qualified U.S.-born candidates to fill them, but the number of available H1-B visas was not expanded to fit those needs. Our elected officials are too jittery to touch any immigration reform. In the same way we feared 100 years ago that manufacturing would diminish jobs, elected officials now play into our fears that foreign-born high-tech workers will steal jobs, when in fact they actually help create more. If they outline a plan clearly and concisely, Clinton and Trump — Democrats and Republicans — can support lifting the H1-B cap. National policies must become aligned with the economy, or the nation will lag behind other countries in development. Connected cars and autonomous vehicles will take the world to the next level in technological growth, safety and a better way of living. Detroit must continue its historical path as a captain of that automotive journey. If elected officials update our archaic immigration laws, we can bring the best and brightest talent into the U.S. and lead the world in innovation.

TALK ON THE WEB Re: Wayne County moves forward with Detroit jail project

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

Don’t worry, this is probably a negotiating ploy to get more money

from Gilbert and Gores.

John

How do we protest against this and get the soccer stadium? This is

just dumb. Nobody wants that stupid jail downtown. Drew Gaines

Re: Lack of staff forces resort to close restaurant Didn’t understand the lodging at $220 a month. If they hire these people just for the summer from out of the area, provide the lodging without charging them. That might help attract more people. E M Parmelee

Evans’ team is showing great improvement If you ever want to test an executive’s ability to comprehend a complicated balance sheet, hand them the current analysis of their pension plan and ask the exec to explain it. Wayne County Executive Warren Evans sent me a copy of the county’s current pension plan. He has the numbers. It is an impressive improvement over his predecessor. Evans’ team has done a remarkable job in an extremely short time to make sense out of a very complicated pension plan, a plan few people would ever

KEITH CRAIN Editor in chief

bother to try and understand. The county’s numbers are better now and, once again, this group of bright executives has been able to

get their arms around a very confusing plan. I think I will ask them to tackle our company's plan next in their spare time. I continue to marvel at just how successful Evans has been in assembling a team that has been doing some remarkable things with a county that was somewhere just short of ruin. They have put the pieces together in a way that makes sense. Evans inherited a disastrous financial situation from Robert Ficano; many folks might have expected

that bankruptcy was the only solution. The turnaround, with a plan that avoids bankruptcy court, has been nothing short of miraculous. The pension plan is only the latest example of setting things right on the road to recovery. We have all watched Oakland and Macomb counties over the past few decades and have often marveled at how well Oakland’s Brooks Patterson, particularly, has managed that county’s finances. Wayne was always left behind in a near-death situation, marked by

the type of corruption and theft that Detroit experienced pre-bankruptcy. There is no easy fix to the problems of incompetence except to root it out and replace the bad with the good. The salesmanship necessary to get those talented folks to come to work in Wayne County has to be quite a task. Wayne County, like Detroit, is on its way to recovery. It gets better every day. Let us hope Evans can keep his team intact. It’s a great beginning.

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I

Understanding the autonomous vehicle industry is a complex dance

n less than two decades, it is likely that approximately 21 million autonomous vehicles will have been sold worldwide — including 4.5 million in the United States. The projections, released by IHS Automotive in June, are another signal of how technological advancements in the autonomous vehicle sector are accelerating at a pace without precedent in automotive history. Another sign of this accelerated advancement is evident in Southeast Michigan, where stretches of “smart roads” have been equipped with more than 100 sensors capable of detecting a vehicle’s speed and location (“Coming to sensors,” Crain’s story, June 27 edition). The sensors will communicate with connected and driverless vehicle prototypes and alert them to oncoming hazards. As this trend continues, one result is an intersection of traditional manufacturers and high-tech companies, requiring a change in approach for automotive companies comfortable with the tried-and-true steps of the manufacturer-supplier dance. Those companies will have to learn a whole new step if they don’t want to be left without a dance partner at the ball. To survive and thrive in the changing mobility sector, traditional manufacturers and suppliers

must rapidly adapt to the startup mentality of technology companies and venture capital investors. In The Third Wave: An Entrepreneur’s Vision of the Future, well-known entrepreneur and investor Steve Case identifies partnerships as one of the prerequisites for success in what he calls the third wave of the internet — the internet of everything. Case quotes an African proverb that applies to traditional manufacturers and high-tech innovators, particularly those involved with autonomous vehicles: “If you want to go quickly, go alone. If you want to go far, go together.”

Going back to the dance analogy, traditional manufacturers and hightech innovators who want to successfully make their way around the obstacles on the emerging industry dance floor must understand their partners’ backgrounds, strengths and weaknesses to avoid stepping on any toes. Innovators need to understand that they cannot succeed long term by following the prior path of going it alone. In addition to technology that the innovators provide, production of autonomous vehicles requires expertise in integration, logistics, supply chain management, and compliance with

a very complex regulatory environment that traditional automotive companies can provide. Simply put, the high-tech innovators and the traditional manufacturers will need to work together if they each want to go far and actually profitably manufacture and sell large numbers of autonomous vehicles. For these partnerships to work, all aspects of each organization, from engineering to legal to marketing, must learn when to take the lead and how to communicate and understand the other’s needs and concerns — to avoid tripping over each other.

OTHER VOICES Gerald Lievois and Alexis Schostak

Lievois and Schostak are members at Dykema Gossett, Lievois in the corporate finance practice group, automotive industry group; Schostak is assistant corporate finance practice group leader.

Crain’s event focus: Food economy Behind Michigan’s food story is a business story. The food economy is one of untapped growth potential. At Crain’s Food Summit, key players from local food companies will gather to focus on building Michigan’s supply chain and pairing ideas with the visions from major national food companies. The summit will connect entrepreneurs, farmers, manufacturers, distributors, retailers, growers and processors to potential customers and those interested in learning more about our food ecosystem. Investors will be introduced to food entrepreneurs from around the state in an effort to showcase the investment-worthy companies. The program includes a keynote panel featuring Jeff Dunn, president of Campbell Fresh, along with breakout sessions on how the local food movement is impacting agriculture, processing, distribution, and retail and restaurants. There will also be a local food truck rally. The event runs from 2-7 p.m. Aug. 22 at Eastern Market in Detroit. Individual tickets are $80, and groups of 10 or more are $75 each. A discount combo ticket with the Live Love Local event is available for $100. Registration closes Aug. 18. To register, go to CrainsDetroit. com/events. Questions can be directed to Kacey Anderson at cdbevents@crain.com.

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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 LY 1 1 , 2 0 1 6

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Employers face higher fines for I-9 form errors By Dustin Walsh dwalsh@crain.com

The U.S. Department of Justice is substantially increasing fines for violating federal immigration law in an attempt to more vigorously deter employers from hiring illegal immigrants. On the surface, the rule adjustment seems of no consequence to law-abiding employers, but the hiked penalties carry consequences for every employer, said Alexandra LaCombe, partner at immigration law firm Fragomen, Del Rey, Bernsen & Loewy PLLC in Troy. The new DOJ ruling, issued June 30, increases the fine for errors on employment eligibility forms, called Form I-9, that is completed by all employees at the start of employment. The I-9 form asks whether an employee is a U.S. citizen, non-citizen, lawful alien or work-authorized alien, as well as asking for copies of two legal forms of identification. The previous rule held a maximum fine of $1,100 per violation for I-9 paperwork errors, increasing to a maximum penalty of $2,156 per violation on Aug. 1. “Certainly, there’s the knowingly hiring of illegal immigrants, but the vast majority of violations stem from clerical errors on the I-9 form,” LaCombe said. “These are forms every employer submits, and if they are not filled out correctly, the mistakes can be costly.” LaCombe said a recent audit for a large client reviewed millions of dollars in potential fines if the government had audited the company’s I-9 forms. “It’s almost always an honest mistake, but the government doesn’t care whether there was intent,” LaCombe said. “If you’re audited and they find mistakes, you will be fined.” However, companies can correct the mistakes internally after they’ve been submitted, protecting them from fines if an audit occurs. “It’s really important, even more so now, that employers periodically audit these forms internally,” LaCombe said. “Establish a system, whether that’s just another pair of eyes, an audit from a law firm, etc. Employers must establish some sort of accountability. These forms should be treated as seriously as tax forms.” LaCombe said the most common audit occurs after a company becomes a government contractor. “Some of it is complaint-driven, but if you’re a government contractor, you will get audited more often,” LaCombe said. Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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SPECIAL REPORT: FAST 50

Riding the fast lane

50 Fastest-Growing Companies in Southeast Michigan 1. Meridian Health Plan Inc. 2. Diplomat Pharmacy Inc. 3. Metaldyne Performance Group Inc. 4. Barton Malow Co. 5. Sun Communities Inc. 6. The Diez Group 7. Victory Automotive Group Inc. 8. General RV Center Inc. 9. Aristeo Construction Co. 10. United Road Services Inc.

From automotive to real estate, these companies found a way to grow

11. Talmer Bancorp Inc.

Welcome to Crain’s Fast 50, a dive into Michigan’s biggest corporate growth stories. This year’s entry reflects the big economic trends of the past few years: a resurgent automotive industry, bounce-backs in real estate and construction, and a raft of M&A. A glance through the list shows many auto suppliers, including some of the biggest in the business, and auto dealerships and construction companies (including one that renovated Daytona International Speedway, and both Michigan Stadium and Spartan Stadium). How we pick the companies: We mine our vast database of private and publicly traded companies then come up with a ranking based on dollar amount of revenue growth between 2012 and 2015 and by percentage revenue growth during the same period. The two rankings are then added together to create the list. The lower the number, the higher the final ranking. What follows on Pages 12-17 are profiles of the 50 companies that have the highest rankings. Want to see the data that backs the rankings? Check out the list on Pages 19-20. For a searchable database of the companies, go to crainsdetroit.com/Fast50.

14. LaFontaine Automotive Group

12. Acro Service Corp. 12. Alta Equipment Co. 14. Piston Automotive LLC 16. Danlaw Inc. 17. Diversified Restaurant Holdings Inc. 18. RevSpring Inc. 18. Ramco-Gershenson Properties Trust 20. Michigan CAT 21. H.W. Kaufman Financial Group Inc./Burns & Wilcox Ltd. 22. Gentherm Inc. 23. The Suburban Collection 24. Penske Corp. 24. United Shore Financial Services LLC 26. Sherwood Food Distributors LLC 27. Medcart Specialty Pharmacy 28. The Christman Co. 28. Auburn Pharmaceutical Co. 30. PrizeLogic LLC 31. Technical Engineering Consultants 32. American Axle & Manufacturing Holdings Inc. 33. Ray Laethem Inc. 34. WorkForce Software LLC 35. The Ideal Group Inc. 36. Amerisure Mutual Insurance Co. 36. Ghafari Inc. 38. Domino’s Pizza Inc. 39. W3R Consulting 40. Lear Corp. 40. Buff Whelan Chevrolet 42. Reliable Software Resources Inc. 43. Credit Acceptance Corp. 43. International Automotive Components 43. Agree Realty Corp. 43. Syntel Inc. 47. Ilitch companies 48. Orleans International Inc. 49. Plante Moran PLLC 50. National Food Group Inc.

PHOTO ILLUSTRATION BY LISA SAWYER

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SPECIAL REPORT: FAST 50 1. MERIDIAN HEALTH PLAN INC.

Detroit David Cotton, president and CEO Revenue 2015/2012: $3.36B/$977M Revenue percent change: 244 What it does: Government health

insurance programs

Reason for revenue increase: Driving

growth has been the expansion of its Medicaid health plans in Michigan, Iowa and Illinois. Its 4-year-old pharmacy benefit management company, MeridianRx Inc., has also seen significant membership growth, Cotton said.

2. DIPLOMAT PHARMACY INC.

Flint Phil Hagerman, chairman and CEO Revenue 2015/2012: $3.37B/$1.13B Revenue percent change: 199 What it does: Nationwide specialty

pharmacy

Reason for revenue increase: Continu-

ing to expand into new markets through acquisitions, including the 2015 acquisition of Cincinna-

ti-based BioRx LLC, a pharmacy and infusion services company, for $210 million in cash and $105 million in Diplomat common stock. Also diversified into high-growth therapeutic medication.

3. METALDYNE PERFORMANCE GROUP INC.

Southfield George Thanopoulos, CEO; Douglas Grimm, president and COO Revenue 2015/2012: $3.05B/$1.10B Revenue percent change: 177 What it does: A global automotive

supplier providing precision-engineered products for powertrain applications.

Reason for revenue increase:

Metaldyne was acquired by private equity firm American Securities LLC in 2012 and merged with $1 billion companies Grede Holdings LLC and HHI Group Holdings LLC, both majority-owned by American Securities, to form MPG in 2014. The merger created about a $3 billion automotive and industrial parts supplier.

4. BARTON MALOW CO.

Southfield Ryan Maibach, president and CEO Revenue 2015/2012: $1.78B/$1.0B Revenue percent change: 77 What it does: General contracting,

construction management, design-build, engineer-procure-construct, integrated project delivery, self-perform services: civil, concrete, rigging and interiors

Reason for revenue increase:

Increased regional and national presence with strategic clients and markets, particularly in industrial, manufacturing and education. Projects include helping in the redevelopment of the Daytona International Speedway, expanding and renovating the football stadiums for the University of Michigan and Michigan State University, and building automotive facilities, said Doug Maibach, executive vice president.

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Southfield-based construction manager Barton Malow Co. helped in the “Daytona Rising� redevelopm Daytona Beach, Fla.

5. SUN COMMUNITIES INC.

8. GENERAL RV CENTER INC.

Revenue 2015/2012: $675M/$340M Revenue percent change: 99 What it does: Real estate operations Reason for revenue increase: Growth

Revenue 2015/2012: $582M/$303M Revenue percent change: 92 What it does: Recreational vehicle

Southfield Gary Shiffman, chairman and CEO

from acquisitions, including last year’s $1.32 billion acquisition of the Green Courte Partners LLC portfolio of 59 properties in 11 states, including Michigan. Also expanded existing communities and increased from 136 communities nationwide and 45,000 housing sites to 337 communities nationwide and 117,000 housing sites.

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and trailer dealership

Reason for revenue increase: Growth

stems mostly from out-of-state expansions, said Baidas. A new corporate headquarters and supercenters in Wixom and Florida opened last year, and the company has seen strong sales growth and increased market share.

6. THE DIEZ GROUP

9. ARISTEO CONSTRUCTION CO.

Revenue 2015/2012: $1.08B/$610M Revenue percent change: 77 What it does: Aluminum and steel

Revenue 2015/2012: $410M/$206M Revenue percent change: 99 What it does: General contractor

Dearborn Gerald Diez, CEO

sales, processing and warehousing companies Reason for revenue increase: New sites, new equipment and an overall increase in business have helped propel the company’s growth.

7. VICTORY AUTOMOTIVE GROUP INC.

Canton Township Jeffrey Cappo, president

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Wixom Robert Baidas, CEO; Loren Baidas, president and chairman

Revenue 2015/2012: $1.22B/$703M Revenue percent change: 74 What it does: Automotive dealerships Reason for revenue increase: Has

seen significant sales from launching its service retention program CarDoc in 2013, and growth from purchasing 15 dealerships nationally, mainly in California.

Livonia Joseph Aristeo, president

and construction manager

Reason for revenue increase:

Diversified into new markets, including energy and higher education. A recent project includes DTE Energy Co.’s wind farm, about a $30 million project, in mid-Michigan’s Gratiot County that is the largest in the state in terms of energy production. Also saw growth from expanded services and an increase in automotive projects.

10. UNITED ROAD SERVICES INC. Romulus Kathleen McCann, president and CEO

Revenue 2015/2012: $500M/$275M Revenue percent change: 82 What it does: Vehicle logistics for

vehicle manufacturers, remarketers, auctions, dealers and internet vehicle transactions nationally

Reason for revenue increase:

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Reason for revenue increase:

Continued growth by adding telematics for the automotive insurance industry.

17. DIVERSIFIED RESTAURANT HOLDINGS INC.

Southfield Michael Ansley, chairman, president and CEO Revenue 2015/2012: $172M/$77M Revenue percent change: 123 What it does: Buffalo Wild Wings

franchisee, Bagger Dave’s restaurants. Reason for revenue increase: Expansion in Buffalo Wild Wings franchises.

18. REVSPRING INC. ROSSETTI ASSOCIATES INC.

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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 LY 1 1 , 2 0 1 6

Completed an acquisition of auto hauling division of Billings, Mo.-based Waggoners Trucking Inc. for $225 million in December 2013. Has also seen growth organically.

11. TALMER BANCORP INC. Troy David Provost, chairman, president and CEO

Revenue 2015/2012: $235M/$103M Revenue percent change: 129 What it does: Banking and financial

services

Reason for revenue increase:

Acquired eight banks through acquisitions, including First of Huron Corp. of Bad Axe and its wholly owned subsidiary, Signature Bank, in a deal valued at about $13.4 million. The bank is in the process of being acquired by Midland-based Chemical Financial Corp.

12. ACRO SERVICE CORP.

Livonia Ron Shahani, president and CEO Revenue 2015/2012: $318M/$160M Revenue percent change: 99 What it does: Staff augmentation for

IT, engineering, office support, outsourcing and IT and engineering consulting, application development and enablement, relational database design and development, Web design and development Reason for revenue increase: Organic growth, as well as an increase in demand for its staffing and technology tools and services.

12. ALTA EQUIPMENT CO.

Wixom Steven Greenawalt, CEO Revenue 2015/2012: $303M/$152M Revenue percent change: 99 What it does: Heavy construction equipment, material handling equipment, industrial equipment, cranes Reason for revenue increase:

Expansions into new construction markets including cranes, contractor rentals, and power generation, as well as a robust auto sector that continues to benefit the industrial side of the business.

14. PISTON AUTOMOTIVE LLC Redford Township Vincent Johnson, chairman

Revenue 2015/2012: $931M/$570M Revenue percent change: 63 What it does: Automotive supplier Reason for revenue increase:

Company did not comment, but sales in the automotive sector have grown with the economy.

14. LAFONTAINE AUTOMOTIVE GROUP Highland Township Michael LaFontaine, owner and chairman; Maureen LaFontaine, owner and president

Revenue 2015/2012: $768M/$453M Revenue percent change: 70 What it does: Automobile dealer-

ships

Reason for revenue increase: Rapid

growth from purchasing about eight dealerships. Vehicle sales also increased.

16. DANLAW INC.

Novi Raju Dandu, chairman and CEO Revenue 2015/2012: $118M/$30M Revenue percent change: 294 What it does: Cloud-based,

Wixom Timothy Schriner, president and CEO Revenue 2015/2012: $416M/$236M Revenue percent change: 76 What it does: Business process

Revenue percent change: 49 What it does: Specialty insurance,

reinsurance, premium financing, loss control and premium audits. Reason for revenue increase: Organic growth, acquisitions and investments in acquiring solid talent, said Daniel Kaufman, senior vice president.

22. GENTHERM INC.

Revenue 2015/2012: $2.00B/$1.37B Revenue percent change: 46 What it does: Automobile dealer-

ships

Reason for revenue increase: Growth

from the upswing in the automotive industry and aggressively pursuing acquisitions that led to the purchasing of 14 dealerships, said Fischer. In 2014, eight dealerships were purchased.

Northville Daniel Coker, president and CEO

24. PENSKE CORP.

Revenue 2015/2012: $856M/$555M Revenue percent change: 54 What it does: Global developer and

Revenue 2015/2012:

marketer of thermal management technologies for heating and cooling and temperature control applications

Reason for revenue increase:

Continued growth from penetrating key automotive markets and has seen an increase in its customer base.

23. THE SUBURBAN COLLECTION

Troy David Fischer, chairman and CEO

Bloomfield Hills Roger Penske, chairman $29.18B/$21.30B

Revenue percent change: 37 What it does: Retail automotive,

truck leasing and logistics, motorsports racing Reason for revenue increase: Organic growth due to the increase in automotive sales. Also saw significant growth from acquisitions, including Texas-based Premier Truck Group, which added $18 million in annual revenue. SEE NEXT PAGE

outsourcing, accounts receivable management Reason for revenue increase: Grew both organically and through acquisitions, said Schriner. Four buyouts from the last two years have also added further revenue.

18. RAMCOGERSHENSON PROPERTIES TRUST

Farmington Hills Dennis Gershenson, president and CEO Revenue 2015/2012: $252M/$125M Revenue percent change: 101 What it does: Real estate investment

trust focused on shopping centers

Reason for revenue increase:

Acquisitions, shopping center redevelopments and property sales has added revenue. Last year sold $88.7 million in properties.

20. MICHIGAN CAT

Novi Bill Hodges, executive vice president Revenue 2015/2012: $627M/$392M Revenue percent change: 60 What it does: Heavy equipment

dealer providing sales of new and used equipment as well as rental and parts and service

Reason for revenue increase:

Benefited from increased funding passed by Legislature specific to infrastructure projects, and also benefited from low interest rates and reinvestment in Michigan. Also increased sales by investing in building and expanding four facilities in 2015.

Progress. At the heart of West Michigan’s economic development, Lakers are a vital force. Throughout the region and state, Lakers live, work, and lead, helping create solutions that drive growth forward. As a major university, Grand Valley’s economic impact is substantial. As a talent resource, Lakers are uniquely prepared to meet the challenges of a changing world. That’s the Laker Effect.

21. H.W. KAUFMAN FINANCIAL GROUP INC./BURNS & WILCOX LTD. Farmington Hills Alan Jay Kaufman, chairman, president and CEO

Revenue 2015/2012: $1.83B/$122B

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SPECIAL REPORT: FAST 50 FROM PREVIOUS PAGE

24. UNITED SHORE FINANCIAL SERVICES LLC Troy Mat Ishbia, president and CEO

Revenue 2015/2012: $510M/$321M Revenue percent change: 59 What it does: Mortgage banking Reason for revenue increase: Saw a

220 percent increase in new hires and training, and invested in technology to streamline the mortgage process, including loan tracking mobile apps.

26. SHERWOOD FOOD DISTRIBUTORS LLC Detroit Earl Ishbia, chairman, president and CEO

Revenue 2015/2012: $2.18B/$1.52B Revenue percent change: 43 What it does: Wholesale food distributor Reason for revenue increase: Saw

rapid growth from two new distribution centers in Atlanta and

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28. THE CHRISTMAN CO.

Detroit Ronald Staley, senior vice president, Southeast Michigan operations Revenue 2015/2012: $120M/$61M Revenue percent change: 97 What it does: Construction

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Reason for revenue increase:

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Benefited from the uptick in the economy and awarded multiple projects that include higher education, office buildings and public work. Recent projects include Detroit Medical Center’s specialty children’s center in Troy, a $22 million project.

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growth stems from uptick in generic drug demand. Also expanded West Coast operations and invested in technology, including an online service that offers patients 24-hour prescription refills.

30. PRIZELOGIC LLC Southfield Keith Simmons, CEO

Revenue 2015/2012: $50M/$14M Revenue percent change: 251 What it does: Online promotion

execution for Fortune 100 brands

Reason for revenue increase:

Expanded internationally, grew from new product investments, benefited from mobile marketing incentives and won many contracts as compared with competition.

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Troy Kurt Mains, senior vice president Revenue 2015/2012: $75M/$33M Revenue percent change: 123 What it does: Staffing in automo-

tive, engineering, IT, machine tool and other technical fields Reason for revenue increase: Growth due to the merger of two staffing companies — Batton Technical Inc. and Technical Engineering Consultants Inc. — combined with organic growth.

32. AMERICAN AXLE & MANUFACTURING HOLDINGS INC. Detroit David Dauch, chairman and CEO

Revenue 2015/2012: $3.90B/$2.93B Revenue percent change: 33 What it does: Automotive supplier Reason for revenue increase: Record

pharmaceuticals

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sales and gross profits due to strong North American automotive market.

33. RAY LAETHEM INC. Grosse Pointe Jeff Laethem, president

Revenue 2015/2012: $148M/$87M Revenue percent change: 70 What it does: Automobile dealer-

ship

Reason for revenue increase: Growth

fueled by strong new vehicle sales.

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34. WORKFORCE SOFTWARE LLC Livonia Mike Morini, CEO

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SPECIAL REPORT: FAST 50 Reason for revenue increase: Growth

stems from product demand for its software products.

35. THE IDEAL GROUP INC.

Detroit Frank Venegas Jr., chairman and CEO Revenue 2015/2012: $276M/$182M Revenue percent change: 52 What it does: General contracting,

specialized miscellaneous steel manufacturing and distribution of protective barrier products, global supply chain management, other Reason for revenue increase:

Increased business with General Motors Co., introduced new products and saw growth from corporate customers that include Wal-Mart Stores Inc., Target Corp. and Walgreens Boots Alliance Inc.

36. AMERISURE MUTUAL INSURANCE CO.

Farmington Hills Gregory Crabb, president and CEO Revenue 2015/2012: $760M/$551M Revenue percent change: 38 What it does: Property and casualty

insurance company

Reason for revenue increase:

Continuing to grow due to the rebound of the construction industry and demand for workers’ compensation.

DOMINO’S

Domino’s Pizza expanded its store count by more than 2,000 in the past three

years and has expanded into new international markets.

36. GHAFARI INC.

Dearborn Yousif Ghafari, chairman Revenue 2015/2012: $174M/$110M Revenue percent change: 58 What it does: Architecture and engineering organization providing architectural, manufacturing and process engineering; 3-D building information modeling and laser scanning, consulting and professional staffing Reason for revenue increase:

Business diversification, and grew with the resurgence of the economy, particularly in the automotive industry.

38. DOMINO’S PIZZA INC. Ann Arbor

Patrick Doyle, president and CEO Revenue 2015/2012: $2.22B/$1.68B Revenue percent change: 32 What it does: Restaurant franchisor Reason for revenue increase: Saw an increase in store sales and expanded by more than 2,000 stores. Also expanded into new international markets, including Italy.

39. W3R CONSULTING Southfield Eric Hardy, chairman, president and CEO

Revenue 2015/2012: $57M/$27M Revenue percent change: 111 What it does: IT staffing and

consulting, including application development, business intelligence and data analytics

Reason for revenue increase:

Acquired major accounts and expanded business by developing a health care division.

LEAR CORP.

Lear Corp. purchased this building at 119 State St. in Capitol Park in downtown Detroit from Bedrock Real Estate Services LLC last fall and plans to turn it into its

Innovation and Design Center.

40. LEAR CORP. Southfield Matthew Simoncini, president and CEO Revenue 2015/2012:

What it does: Automotive supplier Reason for revenue increase: Growth

stems from product development in industry trends such as safety, fuel and economy. Also saw an increase in market share and

$18.21B/$14.57B

Revenue percent change: 25

SEE NEXT PAGE

16

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

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LITTLE CAESARS

The proposed Little Caesars Global Resource Center along Woodward Avenue in Detroit is among the newly announced projects from the Ilitch companies. FROM PREVIOUS PAGE

growth from the acquisition of automotive leather supplier Eagle Ottawa LLC for $850 million.

40. BUFF WHELAN CHEVROLET Sterling Heights Kerry Whelan, president

Revenue 2015/2012: $208M/$137M Revenue percent change: 52 What it does: Automotive dealership

sales and service

Reason for revenue increase:

IS EVERYTHING.

Company did not comment, but sales in the automotive sector have grown with the economy.

42. RELIABLE SOFTWARE RESOURCES INC.

Northville Ravi Vallem, CEO; Sridhar Kodati, CFO; Venkat Gone, president Revenue 2015/2012: $58M/$28M Revenue percent change: 107 What it does: Data and application

services including big data, advanced analytics, business intelligence

Reason for revenue increase:

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Invested in new talent, and has seen growth due to high demand for data and analytic services, said Vallem.

43. CREDIT ACCEPTANCE CORP. Southfield Brett Roberts, CEO

Revenue 2015/2012: $825M/$609M Revenue percent change: 35 What it does: Financial institution Reason for revenue increase: Growth

from increases in loans in recent years.

43. INTERNATIONAL AUTOMOTIVE COMPONENTS Southfield Robert “Steve” Miller, president and CEO

Revenue 2015/2012: $5.90B/$4.70B Revenue percent change: 26 What it does: Global supplier of

interior automotive components and systems including cockpits and overhead systems and soft trim and acoustics Reason for revenue increase: Added 14 facilities in seven countries for a total of 103 facilities. Countries include Brazil, South Africa, Mexico and China.

43. AGREE REALTY CORP. Farmington Hills Joey Agree, CEO

Revenue 2015/2012: $70M/$36M Revenue percent change: 95 What it does: Real estate investment

trust focused on retail properties

Reason for revenue increase:

Invested $600 million in development of acquisitions in net lease retail, which includes more than 200 properties in more than 30 states, said Agree.

43. SYNTEL INC.

Troy Bharat Desai, chairman; Nitin Rakesh, CEO and president Revenue 2015/2012: $969M/$724M Revenue percent change: 34 What it does: IT outsourcing,

knowledge process outsourcing, application development and management, e-business services, architecture consulting and support, IT infrastructure management, cloud computing, data

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47. ILITCH COMPANIES

Detroit Christopher Ilitch, president and CEO Revenue 2015/2012: $3.30B/$2.60B Revenue percent change: 27 What it does: Little Caesars Pizza,

Detroit Red Wings, Blue Line Foodservice Distribution, Champion Foods, Olympia Entertainment, Olympia Development, MotorCity Casino Hotel, Little Caesars Pizza Kit Fundraising Program and Ilitch Holdings Inc.

Reason for revenue increase:

Continued growth mainly due to demand for products under the Little Caesars brand.

48. ORLEANS INTERNATIONAL INC. Farmington Hills Earl Tushman, president and CEO

Revenue 2015/2012: $856M/$637M Revenue percent change: 34 What it does: Meat importer Reason for revenue increase: Growth

due to general increases in meat

costs and diversification of products, including higher-end and imported meats. Market share has also increased.

49. PLANTE MORAN PLLC

Southfield Gordon Krater, managing partner Revenue 2015/2012: $466M/$331M Revenue percent change: 41 What it does: Accounting and

management consulting firm

Reason for revenue increase: Organic

growth in the private equity, wealth management and management consulting practices. The merger of Chicago-based Blackman Kallick in 2013 accounted for about $50 million in revenue.

50. NATIONAL FOOD GROUP INC. Novi Sean Zecman, president and CEO

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opportunity buys, commodity processing Reason for revenue increase: Growth due to pursuit of new talent. Employee turnover rates have decreased from 18 percent in 2011 to 9 percent in 2015.

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CRAIN'S LIST: THE FAST 50 Rank

Company Address Phone; website

Top executive(s)

Ranked by combined revenue growth rankings, 2012-2015

Combined Revenue revenue Revenue Revenue 3-year growth Revenue growth ($000,000) % change % change ($000,000) growth rankings 2015/2012 2015-2012 ranking 2015-2012 ranking Reason for increase

1

Meridian Health Plan 1 Campus Martius, Detroit, 48226 (313) 324-3700, corp.mhplan.com

David Cotton CEO

9

$3,365.5 $977.3

244%

3

$2,388.3

6

Driving growth has been expansion of its Medicaid health plans in Michigan, Iowa and Illinois. MeridianRx Inc, has also seen significant membership growth.

2

Diplomat Pharmacy Inc. 4100 S. Saginaw St., Flint , 48507 (888) 720-4450, diplomatpharmacy.com

Phil Hagerman chairman and CEO

11

3,366.6 1,126.9

199

4

2,239.7

7

Acquisitions, including the 2015 acquisition of Cincinnati-based BioRx LLC, a specialty pharmacy and infusion services company. Also diversified into high-growth therapeutic medication.

3,047.3 1,100.0

177

5

1,947.3

8

42

1,780.3 1,005.9

77

28

774.4

14

4

Barton Malow Co. 26500 American Drive, Southfield, 48034 (248) 436-5000, www.bartonmalow.com

George Thanopoulos, CEO; Douglas Grimm, president and COO Ryan Maibach president and CEO

13

3

Metaldyne Performance Group Inc. One Towne Square, Suite 550, Southfield , 48076 (248) 727-1829, www.mpgdriven.com

Gary Shiffman chairman and CEO

50

674.7 339.6

99

21

335.1

29

5

Sun Communities Inc. 27777 Franklin Road, Suite 200, Southfield, 48034 (248) 208-2500, www.suncommunities.com

6

The Diez Group 8111 Tireman Ave., Dearborn, 48126 (313) 491-1200, www.thediezgroup.com

Gerald Diez CEO

52

1,079.0 610.0

77

29

469.0

23

Metaldyne LLC was acquired by private equity firm American Securities LLC in 2012 and merged with $1 billion companies Grede Holdings LLC and HHI Group Holdings LLC, both majority-owned by American Securities, to form MPG in 2014. Increased regional and national presence, particularly in industrial, manufacturing and education. Projects include the Daytona International Speedway, the football stadiums for the UM and MSU, and building automotive facilities Growth from acquisitions, including last year’s $1.32 billion acquisition of the Green Courte Partners LLC portfolio. Also expanded existing communities and increased to 337 communities nationwide to 117,000 housing sites. New sites, new equipment and an overall increase in business have helped propel the company's growth.

7

Victory Automotive Group Inc. 46352 Michigan Ave., Canton Twp., 48188 (734) 495-3500, www.victoryautomotivegroup.com

Jeffrey Cappo president

53

1,223.7 B 703.5 B

74

32

520.3

21

Has seen significant sales from launching its service retention program CarDoc in 2013, and growth from purchasing 15 dealerships nationally, mainly in California.

General RV Center Inc. 25000 Assembly Drive, Wixom, 48393 (248) 349-0900, www.generalrv.com

Robert Baidas, CEO; Loren Baidas, president and chairman Joseph Aristeo president

57

582.0 303.0

92

25

279.0

32

Growth stems mostly from out-of-state expansions.

61

410.0 206.0

99

20

204.0

41

Diversified into new markets, including energy and higher education. Also saw growth from expanded services and an increase in automotive projects.

8 9

Aristeo Construction Co. 12811 Farmington Road, Livonia, 48150 (734) 427-9111, www.aristeo.com

10

United Road Services Inc. 10701 Middlebelt Road, Romulus, 48174 (734) 947-7900, unitedroad.com

Kathleen McCann president and CEO

63

500.0 275.0

82

27

225.0

36

Completed an acquisition of auto hauling division of Billings, Mo.-based Waggoners Trucking Inc. for $225 million in December 2013. Has also seen growth organically.

Talmer Bancorp Inc. C 2301 W. Big Beaver Road, Suite 525, Troy, 48084 (248) 649-2301, www.talmerbank.com

David Provost chairman, president and CEO

64

234.9 102.6

129

8

132.3

56

12

Acro Service Corp. 39209 W. Six Mile Road, Suite 250, Livonia, 48152 (734) 591-1100, www.acrocorp.com

Ron Shahani president and CEO

66

318.3 159.6

99

19

158.7

47

Acquired eight banks through acquisitions, including First of Huron Corp. of Bad Axe and its subsidiary, Signature Bank. The bank is being acquired by Midland-based Chemical Financial Corp. Organic growth, as well as an increase in demand for its staffing and technology tools and services.

12

Alta Equipment Co. 28775 Beck Road, Wixom, 48393 (248) 449-6700, www.altaequipment.com

Steven Greenawalt CEO

66

303.2 152.0

99

18

151.2

48

Expansions into new construction markets including cranes, contractor rentals, and power generation, as well as a robust auto sector that continues to benefit the industrial side of the business.

14

Piston Automotive LLC 12723 Telegraph Road, Redford Twp., 48239 (313) 541-8674, www.pistongroup.com

Vincent Johnson chairman

67

930.8 569.9

63

39

360.9

28

Company did not comment, but sales in the automotive sector have grown with the economy.

Michael LaFontaine, LaFontaine Automotive Group 4000 W. Highland Road, Highland Township, 48357 owner and chairman; Maureen (248) 887-4747, www.thefamilydeal.com LaFontaine, owner and president Raju Dandu Danlaw Inc. chairman and CEO 41131 Vincenti Court, Novi, 48375 (248) 476-5571, www.danlawinc.com Michael Ansley Diversified Restaurant Holdings Inc. chairman, president 27680 Franklin Road, Southfield, 48034 and CEO (248) 223-9160, www.diversifiedrestaurantholdings.com Timothy Schriner RevSpring Inc. president and CEO 29241 Beck Road, Wixom, 48393 (248) 567-7300, www.revspringinc.com Dennis Gershenson Ramco-Gershenson Properties Trust president and CEO 31500 Northwestern Highway, Suite 300, Farmington Hills, 48334 (248) 350-9900, www.rgpt.com Bill Hodges Michigan CAT executive vice 24800 Novi Road, Novi, 48375 president (248) 349-4800, www.michigancat.com

67

768.4 453.3

70

37

315.1

30

Rapid growth from purchasing about eight dealerships. Vehicle sales also increased.

68

118.2 30.0

294

1

88.2

67

Continued growth by adding telematics for the automotive insurance industry.

72

172.5 77.4

123

9

95.0

63

Expansion in Buffalo Wild Wings franchises.

74

416.0 236.1

76

30

179.9

44

Grew both organically and through acquisitions, said Timothy Schriner, CEO. Four buyouts from the last two years have also added further revenue.

74

251.8 125.2

101

17

126.6

57

Acquisitions, shopping center redevelopments and property sales have added further revenue. Last year, sold $88.7 million in properties.

76

627.0 392.0

60

41

235.0

35

Benefited from increased funding passed by Legislature specific to infrastructure projects, and also from low interest rates and reinvestment in Michigan.

H.W. Kaufman Financial Group Inc./Burns & Wilcox Ltd. 30833 Northwestern Highway, Farmington Hills, 48334 (248) 932-9000, www.kaufmanfinancialgroup.com

Alan Jay Kaufman chairman, president and CEO

79

1,830.0 1,225.0

49

61

605.0

18

Organic growth, acquisitions and investments in acquiring solid talent, said Daniel Kaufman, senior vice president.

Gentherm Inc.

Daniel Coker president and CEO

80

856.4 555.0

54

49

301.5

31

Continued growth from penetrating key automotive markets and has seen an increase in its customer base.

The Suburban Collection 1795 Maplelawn Drive, Troy, 48084 (877) 471-7100, www.suburbancollection.com

David Fischer chairman and CEO

83

2,001.5 1,370.8

46

66

630.7

17

Upswing in the automotive industry and dealership acquisitions.

Penske Corp. 2555 Telegraph Road, Bloomfield Hills, 48302-0954 (248) 648-2000, www.penske.com

Roger Penske chairman

86

29,178.0 21,300.0

37

84

7,878.0

2

Organic growth due to the increase in automotive sales. Also saw significant growth from acquisitions, including Texas-based Premier Truck Group, which added $18 million in annual revenue.

11

14 16 17 18 18 20 21 22 23 24

21680 Haggerty Road, Suite 101, Northville, 48167 (248) 504-0500, www.gentherm.com

This list is an approximate compilation of the fastest-growing companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. Fastest growing is a measurement of revenue growth and does not denote whether a company is profitable. It is not a complete listing but the most comprehensive available.

B Automotive News. C Midland-based Chemical Financial Corp. has agreed to buy Talmer Bancorp Inc. Pending approval by shareholders, the deal is expected to close this year. David Provost will join the Chemical Financial Corp.'s board of directors once purchase is approved. SEE NEXT PAGE

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FROM PREVIOUS PAGE

CRAIN'S LIST: THE FAST 50 Rank

Company Address Phone; website

Top executive(s)

Ranked by combined revenue growth rankings, 2012-2015

Combined Revenue revenue Revenue Revenue 3-year growth Revenue growth ($000,000) % change % change ($000,000) growth rankings 2015/2012 2015-2012 ranking 2015-2012 ranking Reason for increase

24

United Shore Financial Services LLC 1414 E. Maple Road, Troy, 48083 (855) 888-8737, www.unitedshore.com

Mat Ishbia president and CEO

86

$510.1 $321.3

59%

43

$188.8

43

Saw a 220 percent increase in new hires and training, and invested in technology in order to streamline the mortgage process, including loan tracking mobile apps.

26

Sherwood Food Distributors LLC 12499 Evergreen Road, Detroit, 48228 (313) 659-7300, www.sherwoodfoods.com

Earl Ishbia chairman, president and CEO

88

2,181.3 1,523.4

43

72

657.9

16

Saw rapid growth from two new distribution centers in Atlanta and Miami, said Jason Ishbia, CFO. Also saw growth from an undisclosed large national food service customer.

27

Medcart Specialty Pharmacy 32131 Industrial Road, Livonia, 48150 (877) 770-4633, www.medcartpharmacy.com

Eddie Abueida and Ed Saleh co-CEOs

96

81.0 35.0

131

7

46.0

89

Grew with the specialty pharmaceutical distribution industry, and with the demand for new drug therapies for managing chronic diseases, including hepatitis C.

28

Auburn Pharmaceutical Co. 2354 Bellingham, Troy, 48083 (248) 526-3700, auburngenerics.com

Jeffrey Farber chairman, president and CEO

100

106.2 52.7

101

16

53.5

84

Uptick in generic drug demand. Also expanded West Coast operations and invested in technology, including an online service that offers patients 24-hour prescription refills.

Ronald Staley senior vice president, Southeast Michigan operations

100

120.1 60.9

97

22

59.2

78

28

The Christman Co. The Fisher Building, 3011 W. Grand Blvd., Detroit, 48202-3030 (313) 908-6060, www.christmanco.com

Benefited from the uptick in the economy and awarded multiple projects that include higher education, office buildings and public work. Recent projects include Detroit Medical Center's specialty children center in Troy, a $22 million project.

30

PrizeLogic LLC B 25200 Telegraph Road, Suite 405, Southfield, 48033 (888) 795-6442, www.prizelogic.com

Keith Simmons CEO

103

49.9 14.2

251

2

35.7

101

Expanded internationally, grew from new product investments, benefited from mobile marketing incentives and won many contracts as compared with competition.

31

Technical Engineering Consultants 850 Stephenson Highway, Suite 600, Troy, 48083 (248) 720-5020, www.tec.biz; www.battoninc.com

Kurt Mains senior vice president

104

74.6 33.5

123

10

41.1

94

Growth due to the merger of two staffing companies, Batton Technical Inc. and Technical Engineering Consultants Inc., combined with organic growth.

American Axle & Manufacturing Holdings Inc.

David Dauch chairman and CEO

111

3,903.1 2,930.9

33

99

972.2

12

Record sales and gross profits due to strong North American automotive market.

32

One Dauch Drive, Detroit, 48211 (313) 758-2000, www.aam.com

33

Ray Laethem Inc. 1677 Mack Ave., Grosse Pointe, 48224 (313) 886-1700, www.raylaethem.com

Jeff Laethem president

112

148.0 87.0

70

35

61.0

77

Growth is fueled by strong new vehicle sales.

34

WorkForce Software LLC 38705 Seven Mile Road, Livonia, 48152 (877) 493-6723, www.workforcesoftware.com

Mike Morini CEO

113

65.9 30.3

118

11

35.6

102

Growth stems from product demand for its software products.

35

The Ideal Group Inc. 2525 Clark St., Detroit, 48209 (313) 849-0000, www.weareideal.com

Frank Venegas Jr. chairman and CEO

118

276.3 182.0

52

54

94.3

64

Increased business with General Motors Co., introduced new products and saw growth from corporate customers that include Wal-Mart, Target Corp. and Walgreens Boots Alliance Inc.

36

Amerisure Mutual Insurance Co. 26777 Halsted Road, Farmington Hills, 48331 (248) 615-9000, www.amerisure.com

Gregory Crabb president and CEO

121

759.7 551.2

38

81

208.4

40

Continuing to grow due to the bounce-back of the construction industry and demand for workers’ compensation.

36

Ghafari Inc. 17101 Michigan Ave., Dearborn, 48126 (313) 441-3000, www.ghafari.com

Yousif Ghafari chairman

121

173.9 110.3

58

46

63.6

75

Business diversification, and grew with the resurgence of the economy, particularly in the automotive industry.

38

Domino's Pizza Inc. 30 Frank Lloyd Wright Drive, Ann Arbor, 48105 (734) 930-3030, www.dominos.com

Patrick Doyle president and CEO

122

2,216.5 1,678.4

32

102

538.1

20

Saw an increase in store sales and expanded by more than 2,000 stores. Also expanded into new international markets, including Italy.

39

W3R Consulting 1000 Town Center, Suite 1150, Southfield, 48075 (248) 358-1002, www.w3r.com

Eric Hardy chairman, president and CEO

124

57.0 27.0

111

13

30.0

111

Acquired major accounts, and expanded business by developing a health care division.

40

Lear Corp. 21557 Telegraph Road, Southfield, 48033 (248) 447-1500, www.lear.com

Matthew Simoncini president and CEO

125

18,211.4 14,567.0

25

121

3,644.4

4

Growth from product development in areas such as safety, fuel and economy. Also an increase in market share, and growth from the acquisition of Eagle Ottawa LLC.

40

Buff Whelan Chevrolet 40445 Van Dyke Ave., Sterling Heights, 48313 (586) 939-7300, www.buffwhelan.com

Kerry Whelan president

125

207.9 136.7

52

53

71.2

72

Company did not comment, but sales in the automotive sector have grown with the economy.

42

Reliable Software Resources Inc. 22260 Haggerty Road #285, Northville, 48167 (248) 504-6869, www.rsrit.com

Ravi Vallem, CEO; Sridhar Kodati, CFO

126

58.0 28.0

107

14

30.0

112

Invested in new talent, and has seen growth due to high demand for data and analytic services, said Ravi Vallem, CEO.

43

Credit Acceptance Corp. 25505 W. 12 Mile Road, Southfield, 48034 (248) 353-2700, www.creditacceptance.com

Brett Roberts CEO

128

825.3 609.2

35

90

216.1

38

Growth from increases in loans in recent years.

Syntel Inc. 525 E. Big Beaver Road, Suite 300, Troy, 48083 (248) 619-2800, www.syntelinc.com

Bharat Desai, chairman; Nitin Rakesh, CEO and president Joey Agree CEO

128

968.6 723.9

34

94

244.7

34

Growth mainly from banking and financial services. Also great organically.

128

70.0 35.8

95

24

34.2

104

Invested $600 million in development of acquisitions in net lease retail, which includes over 200 properties in over 30 states, said Joey Agree, CEO.

Robert Miller president and CEO

128

5,900.0 4,700.0

26

118

1,200.0

10

Added 14 additional facilities in seven different countries for a total of 103 facilities. Countries include Brazil, South Africa, Mexico and China.

Christopher Ilitch president and CEO

129

3,300.0 2,600.0

27

114

700.0

15

Continued growth mainly due to demand for products under the Little Caesars brand.

Earl Tushman Orleans International Inc. 30600 Northwestern Highway, Suite 300, Farmington president Hills, 48334 (248) 855-5556, www.orleansintl.com Gordon Krater Plante Moran PLLC managing partner 27400 Northwestern Highway, Southfield, 48037 (248) 352-2500, www.plantemoran.com Sean Zecman National Food Group Inc. president and CEO 46820 Magellan Drive, Suite A, Novi, 48377-2454 (800) 886-6866, www.nationalfoodgroup.com

130

856.0 637.0

34

93

219.0

37

Growth due to general increases in meat costs and diversification of products, including higher-end and imported meats. Market share has also increased.

132

465.9 331.0

41

77

134.9

55

Growth in the private equity, wealth management and management consulting practices. The merger of Chicago-based Blackman Kallick in 2013 accounted for about $50M in revenue.

134

96.4 56.9

69

38

39.5

96

Growth due to pursuit of new talent. Employee turnover rates have decreased from 18 percent in 2011 to 9 percent in 2015.

43 43 43 47 48 49 50

Agree Realty Corp. 31850 Northwestern Highway, Farmington Hills, 48334 (248) 737-4190, www.agreerealty.com

International Automotive Components 28333 Telegraph Road, Southfield, 48034 (248) 455-7000, www.iacgroup.com Ilitch companies 2211 Woodward Ave., Detroit, 48201 (313) 471-6600, www.ilitchcompanies.com

This list is an approximate compilation of the fastest-growing companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. Fastest growing is a measurement of revenue growth and does not denote whether a company is profitable. It is not a complete listing but the most comprehensive available.

B The Charlotte, N.C.-based private equity firm Pamlico Capital took majority ownership stake in the company on June 30. LIST RESEARCHED BY SONYA D. HILL

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SPECIAL REPORT: CRAIN’S MICHIGAN BUSINESS MARY KRAMER Publisher

mkramer@crain.com Twitter: @mkramercrain

40 years later, Gerald Ford gets his due

W

ho do you trust? Distrust in politics and public institutions is all around us, from Flint to presidential politics. Maybe that’s why there’s a small groundswell aimed at giving President Gerald R. Ford his due. Only about 40 years too late. A new documentary about Ford, commissioned in part by the Peter F. Secchia Family Foundation, debuted in May on the National Geographic cable channel. New York Citybased Ark Media wrote and produced “Gerald R. Ford: A Test of Character.” Michigan’s own Jeff Daniels narrated the film, which includes interviews with Ford Cabinet members like Dick Cheney and Henry Kissinger. Ford is also the only person to serve as vice president and president without being elected to either post. Last but not least, he’s the only president who earned the rank of Eagle Scout. Which may actually have something to do with the reputation he built for trust and integrity. Ford is known best for giving a full and unconditional pardon to the disgraced Richard Nixon. Now even his critics admit it was the right call to move the country forward, though it may have cost Ford the election that instead gave us four years of Jimmy Carter. But we can learn business lessons from Ford as well. Like putting a high-performing team together and setting two or three key goals. Ford liked to mix top-drawer younger staff with more seasoned veterans, encouraging them to debate ideas, once telling a reporter that he worried about “group think” and “circle the wagons” mentality. After the Nixon pardon, he focused on the ailing economy. He told Congress that no new spending programs would come until the budget was balanced. He vetoed 66 bills. Peter Secchia, a former U.S. ambassador to Italy and a Grand Rapids supporter of Ford’s, said the film will be shown in education programs at the presidential museum in Grand Rapids to teach lessons in character and integrity. “His (Ford’s) presidency was so short, nobody knows enough about him,” Secchia said last week. Here’s one lesson: Martha Griffiths, a Democrat and congressional veteran and lieutenant governor of Michigan, said of Ford that she never knew him to “make a dishonest statement nor a statement part-true and part-false. He never attempted to shade a statement, and I never heard him utter an unkind word.” What member of an opposing party would say the same of the current crop of political leaders? Mary Kramer is publisher of Crain’s Detroit Business. Catch her take on business news at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760 and in her blog at www.crainsdetroit.com.

BioStar shines bright in VC sky

Physician-run firm in Petoskey finds big deals despite small size By Tom Henderson thenderson@crain.com

Here’s the venture capital equivalent of a man-bites-dog story: TransMedics Inc., a medical device company in Andover, Mass., hopes to have approval from the U.S. Food and Drug Adminstration later this year to revolutionize the way organ transplants are done in the U.S. Its device, already approved for use in Europe, keeps organs warm and oxygenated and viable for transplant for two or three days, compared to the low-tech method used now of putting an organ on ice and needing to get it delivered in an Igloo cooler to a recipient in three or four hours. TransMedics raised a funding round of $51.2 million in May. It is hardly a surprise that joining that round was Menlo Park, Calif.-based Kleiner Perkins Caulfield & Byers, one of the oldest and largest venture capital firms in the U.S., having raised about $7.5 billion in various funds and invested in more than 500 companies since its founding in 1972. What might be surprising — the equivalent of the man who bites the big dog — is that a small venture capital firm in northern Michigan was asked to join the organ transplant innovation deal. It certainly would have come as a surprise to skeptics who told Lou Cannon and Steven Almany, two very successful heart surgeons, that they must be crazy when they said 13 years ago that they wanted to become venture capitalists, too. Stick to your day jobs as doctors, they were told. They ignored the advice.

BIOSTAR VENTURES LLC

Their BioStar Ventures LLC is a small venture capital firm by national standards, the size of its funds more like rounding errors to the huge national players on the East and West coasts. And BioStar is based in an as out-of-the-way place as venture capital gets — far, far away from Silicon Valley or Route 158 in Boston or even Michigan’s hotbed of investing in Ann Arbor. Instead, Biostar has a small office in the northern Michigan tourist destination of Petoskey. But its reputation is anything but small, or small town. In addition to Kleiner Perkins, its investment partners include Texas-based SEE BIOSTAR, PAGE 22

A closer look at BioStar’s investments, Page 22.

Lou Cannon (pictured above) moved his office to Petoskey to be closer to his summer home. Now he can look out his office window onto Little Traverse Bay.

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BIOSTAR FROM PAGE 21

Essex Woodlands Health Ventures, which has raised $2.5 billion in various funds since being founded in 1985. And BioStar counts among its institutional investors Morgan Stanley’s FrontPoint Partners LLC, JANA Partners LLC in New York City, the Dow Foundation, the Trout Group in New York, the William Beaumont Foundation and Becker Ventures LLC, the Grosse Pointe-based family office for Chuck Becker, the former chairman of the Karmanos Cancer Institute. And while its first three funds were relatively small — BioStar finished raising its first fund of $28.7 million in 2005, its second fund of $38.4 million in 2010 and its third fund of $68.8 million in 2015 — Cannon, BioStar’s senior managing director, says he has already begun talking to investment bankers and would-be investors about a fourth fund of $250 million. This fund would be the largest in state history, surpassing the $220 million raised by Ann Arbor-based Arboretum Ventures LLC last September. “A fourth fund is two years out,” Cannon said. “We want to make sure BioStar III is successful first.

Investments so far BioStar Ventures’ first fund invested in 14 companies. It sold seven and still has four in its portfolio. The second fund has had nine exits and still has eight portfolio companies. The third fund has 10 portfolio companies and no exits yet. BioStar has one portfolio company in Michigan, Ablative Systems Inc. of Kalamazoo, which has developed a catheter-based system for delivering diagnostic and therapeutic agents for the treatment of hypertension. Other companies include: Angioslide Ltd. of Natanya, Israel, which makes a balloon catheter for use in the lower limbs. Aria CV Inc. of St. Paul, Minn., which is developing a cardiovascular medical device to treat patients with pulmonary hypertension, which is high blood pressure in the arteries of the lungs. Avantis Medical Systems Inc. of Sunnyvale, Calif., which makes devices to detect and treat cancers of the gastrointestinal tract. Domain Surgical Holdings Inc. of Salt Lake City, Utah, which is developing a surgical tool that aids clotting, with an initial focus on the spine and neurological markets. Kona Medical Inc. of Bellevue, Wash., which is developing a noninvasive ultrasonic device for the treatment of hypertension. OrthoSpace Ltd. of Tel Aviv, Israel, which develops implantable, biodegradable balloons that can relieve pain and return the range of motion to patients with massive tears of the rotator cuff.

We’ve returned 147 percent of investor capital from the second fund, and we still have eight companies left.” Cannon said TransMedics should play a big part in making the third fund a success. “I wouldn’t be sur-

prised if this didn’t become a $1 billion company in three or four years,” he said. That quarter-of-a-billion target for BioStar is bolstered by a series of lucrative exits from some of its portfolio companies.

BIOSTAR

TransMedics’ new device to preserve

organs for transplants attracted the interest of BioStar Ventures, which joined a funding round on behalf of the Massachusetts company’s innovation. In March 2011, less than a year after the second fund was raised, it got a nice return when Wayne, Pa.-based Embrella Cardiovascular Inc., which made devices to reduce strokes during cardiovascular procedures, was sold for $43 million to Edwards LifeSciences Corp. of Irvine, Calif. In January 2013, Palo Alto, Calif.-based CV Ingenuity Corp., which made devices to reduce vascular obstructions, was sold to Dublin-based Covidien Ltd. for $270 mil-

lion, with an upfront payment of $100 million, which provided an immediate return on invested capital to BioStar’s limited partners. In February, Aliso Viejo, Calif.-based Ellipse Technologies Inc., a developer of remote-controlled implant technology, was acquired by San Diego-based NuVasive Inc. for $380 million. “While BioStar isn’t as well known as many venture funds in the Midwest, the team at BioStar has a great national reputation,” said Chris Rizik, CEO and portfolio manager at Ann Arbor-based Renaissance Venture Capital Fund, an affiliate of Business Leaders for Michigan that invests in VC firms that in turn are willing to invest in Michigan companies. He is not an investor in BioStar. Cannon is a surgeon at McLaren Northern Michigan hospital in Petoskey. Almany, one of BioStar’s managing directors, is director of the Cardiac Catheterization Laboratory at Beaumont and an associate professor at the William Beaumont School of Medicine at Oakland University. “BioStar doesn’t get invited into great deals because the startup companies need their money; they get invited because the startup companies want their expertise, and the money follows,” Rizik said. “TransMedics didn’t need our money, but they liked having us in the deal. We’ve become the Good

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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 LY 1 1 , 2 0 1 6

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SPECIAL REPORT: CRAIN’S MICHIGAN BUSINESS Housekeeping seal of approval,” said Almany. That Almany is at Beaumont, one of the premier health systems in the U.S., isn’t a surprise. But why is such a nationally known doctor as Cannon based in Petoskey? Before he was recruited to the hospital there in 2003, prior to its acquisition by McLaren, he had been founder and president of the Michigan Cardiovascular Institute, a medical practice with about 20 doctors in Saginaw, Bay City and Midland. The move to Petoskey gave him a chance to live in the summer home he owned on Lake Charlevoix but had been too busy to get to very often. “I love it here,” said Cannon, pointing to his office window and the view of Little Traverse Bay in the foreground. Almany said his interest in investing in medical device companies goes back to 1999, when he was recruited by a New York hedge fund to help it look into possible health care investments. He said he was at a meeting in 2003 in Las Vegas where medical specialists from around the country had been brought together to vet possible investments. He said he and Cannon knew each other by reputation but had never met. They met there and decided that rather than receive modest stipends

to help investors make fortunes by choosing the right companies to invest in, they’d rather become investors themselves. They quickly formed a company, found out institutional investors wanted no part of a new fund run by doctors, and started the labor-intensive, two-year process of raising money from high-net-worth individuals and colleagues. “Who knows why? Eventually people gave us money,” said Almany. Typically, they invest between $1 million and $3 million in very-earlystage companies.

“You want to do what?” David Brophy, director of the Center for Venture Capital and Private Equity at the Ross School of Business at the University of Michigan, is one of the godfathers of the local VC community, having founded the annual Michigan Growth Capital Symposium in 1979. The symposium brings together investors from around the U.S. to hear pitches for capital from early-stage Midwest firms. In 2003, having decided to launch a fund, Cannon paid him a visit for advice. “Louie walked into my office one day and said, ‘Everyone says I have to talk to you because I want to start a medical technology fund,’” recalled Brophy. “I said, ‘Why would you want to do that? You’re a successful doctor. Funds aren’t easy;

David Brophy: “They fight above their weight.”

Marty Sutter: “They are the real deal.”

they’re hard work.’” “David laughed at us: ‘You want to do what?’” said Almany. Not only did Cannon convince him there was a need for a fund led by practicing physicians, he talked Brophy into becoming a member of his board of directors. “Everyone on BioStar’s team is very tightly connected to all the big players in the medical device field,” said Brophy, who said that includes such large device companies as Dublin-based Medtronic and New Brunswick, N.J.-based Johnson & Johnson — one of its directors, William Kucheman, is the recently retired CEO of Marlborough, Mass.based Boston Scientific Corp. — and to such institutions as the Cleveland Clinic, New York University Medical Center, Stanford University and the University of Texas. “They fight above their weight,”

Brophy said. “They get invited into deals with very large funds based on their knowledge and on their connections.” Helping Biostar size up deals is Managing Director Renee Masi, a veteran of more than 25 years in venture capital. In 1990, she opened the Boston office of Technology Funding, a $250 million VC firm based in San Mateo, Calif. Before joining BioStar in 2006, she was a partner in Windward Ventures, a Los Angeles-based VC firm focusing on early-stage companies.

Impact for patients, investors Marty Sutter, a co-founder and managing director at Essex Woodlands, said Cannon first came to his attention seven or eight years ago. He kept seeing a hospital in northern Michigan being listed as a participant in various FDA human clinical trials and wondered why a small hospital in an obscure location could be such a national player. “The answer was Lou Cannon, who’s been at the cutting edge of technology for a long time,” said Sutter. Cannon has been president and CEO of the Petoskey-based Cardiac & Vascular Research Center of Northern Michigan, which tests medical devic-

es and pharmaceuticals and partici-

pates in FDA trials, since 2004. He has also been program director for the Heart & Vascular Institute at the Petoskey hospital since 2005. “BioStar is a great group to focus on. They’re rising stars in Michigan. They’re the real deal,” said Sutter. “There’s a void in practicing physicians involved in deal flow, so it helps that they are practicing doctors who are good at identifying unmet clinical needs.” “There really is a secret sauce with Louie and his team,” said Jim Bennethum, executive vice president of Becker Ventures, which invested in the third BioStar fund. “They’re savvy doctors who are current practitioners, which means they cut through the B.S. of deal flow. Cannon and Almany do this for a living, and they know what will work and what won’t. What the gaps and needs are. “BioStar is working on some really exciting opportunities that will make a good return for their limited partners and a transformational difference for patients,” Bennethum said. “We’ll be eager investors in their fourth fund.” Said Cannon: “I didn’t think BioStar would grow the way it has, or have the impact we’ve had. It’s one thing to make money, which is nice. It’s better to have an impact.” Tom Henderson: (313) 446-0337 Twitter: @tomhenderson2

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SPECIAL REPORT: CRAIN’S MICHIGAN BUSINESS

Varsity News Network brings sports to web, expands reach By Tom Henderson thenderson@crain.com

Sometimes, the right business model boils down to a better way of handling a nuts-and-bolts task. Take the business of tracking high school sporting events. Offered as part of a web platform that allows

schools to post game results and photographs from their sports programs, Grand Rapids-based Varsity News Network Inc. is making headlines and earning attention from funders. And growing. CEO Ryan Vaughn says generating revenue at an annual rate of

$6.5 million puts the company within range of being cash-flow positive, but the short-term goal isn’t breaking into the black, it’s continuing its rapid market penetration of U.S. high schools. “We’re within shouting distance of being cash-flow positive, but that has never been the goal. The goal is to grow. Value is predicated on scale, not profit,” said Vaughn. Varsity News was founded in 2010 to provide a web-based platform for schools to post content about their sports programs. It first made headlines when it won the grand prize of $500,000 at the annual Accelerate Michigan Innovation in Detroit in 2013, and subsequent headlines when it raised $3 million in venture capital in 2014 and $3.7 million last September. When it won the Accelerate Michigan event, VNN was working with some 250 high schools in 14 states. Today, it has about 1,750 U.S. schools and 7 million users in 43 states. Vaughn said that works out to total market penetration of more than 8 percent of U.S. high schools. VNN also works with about 500 middle schools. For now, net income will take a back seat to such numbers as the number of athletic directors who

Fishers High School in Fishers, Ind., has been using the Varsity News Network since March 2015 to post information about the school’s sports team, including calendars, results of games and lots of photos from parent volunteers.

are customers, the number of companies VNN signs up to be sponsors of school websites, the number of unique visitors and page views schools generate and, of course, market penetration. If he can hit his penetration targets, revenue and profits will take care of themselves, Vaughn said. It’s market share that will translate into a return on investment for his investors. “If we can capture 50 percent of

the market by 2020, which we think we can do, we’ll have a $1 billion exit,” he said, referring to a sale price for the company. VNN has 40 employees. More important, it has a freelance sales force of about 50 spread across the states to find sponsors for individual schools. VNN gets 75 percent of sponsor fees, with the schools getting 25 percent. “Most of the schools we were with are profitable with their sites,” he said. One national sponsor is the National Guard, which Vaughn said paid a “substantial” fee to be able to place banner ads on school sites. One of VNN’s customers that generates a profit is Fishers High School in Fishers, Ind., a school with 3,600 students a few miles northeast of Indianapolis. Fishers Athletic Director Rob Seymour said he has been using VNN since March 2015. He said the only cost to the school was a one-time fee of $1,400. “They’ve been great, really easy to work with,” he said. The school posts calendars of upcoming sports events, results of games, news about car wash fundraisers or seniors’ nights and lots of photos from parent volunteers. During the school season, he said, the school’s site gets as many as 90,000 hits a month. “In football, we have a freshman team, a JV team and a varsity team, and we have parent volunteers who work every game. They upload hundreds of photos and then I just hit the select button for the ones I want,” he said. In February, Fishers began streaming student broadcasts of games, which gave visitors to the site the feel of a live game while providing students with hands-on training. Seymour uses the site to handle registration to various sports camps the school is involved with and to serve as a clearinghouse for coaches trying to reserve school facilities for meetings or practice. Seymour said the site has 13 sponsors. One posts coupons that SEE NEXT PAGE

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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 LY 1 1 , 2 0 1 6

SPECIAL REPORT: CRAIN’S MICHIGAN BUSINESS FROM PREVIOUS PAGE

can be downloaded for discounts on meals. Seymour said he avidly recommends VNN to other athletic directors. “They’ve been great, really easy to work with,� he said. “They even helped us with our Facebook presence. We had 3,500 Twitter followers but weren’t doing much with Facebook. They said, ‘Here’s what you need to do.’ � VNN also offers a free app it calls Sportshub, where parents or school fans can check their mobile device for schedules, driving directions, photos and results. Vaughn said expanding VNN’s presences nationally and ramping up sales and marketing will require another fundraising round later this year, despite projections of growing revenue to between $10 million and $15 million in 2017. “Growing really fast requires capital. We’re looking for a growth round this year,� he said, declining to put a dollar figure to it. “We’re prepared to make a major push into schools across the country.�

Here to stay In November, VNN moved into 6,000 square feet on the third floor of the Riverview Center, a renovated industrial building along the Grand River just north of downtown. Vaughn said he has been urged by New York investors to move there, “but this is where we are going to stay,� said Vaughn. “There’s less competition for talent and a cheaper cost of living, and western Michigan is where I’m from.� Vaughn played basketball and football at Grand Haven High School, where he graduated in 2003, then

VARSITY NEWS NETWORK

Ryan Vaughn, CEO of Varsity News Network Inc., says the company is within range of being cash-flow positive, but is concentrat-

ing on growing market penetration.

got an undergraduate degree in creative writing from Western Michigan University and a master’s degree in communications from Grand Valley State University. While at GVSU, “I fell in love with the internet,� said Vaughn. In 2007-08, he ran a site called the

Detroit Sports Report, which did updates on Detroit sports teams. “It absolutely bombed,� he said. From 2008 to 2010, he ran the West Michigan All Star, an online site that posted game results on high school sports, which morphed into VNN, thanks to $20,000 in

funding from Momentum, a tech accelerator in Grand Rapids that itself morphed into Start Garden. “That $20,000 lasted two years,� said Vaughn. He and his co-founder, Matt Anderson, worked part-time jobs to pay the bills while they beat the bushes for high school custom-

ers and investors. By the time of Accelerate Michigan Innovation, VNN had received funding from the Grand Angels in Grand Rapids; Lakeshore Advantage, an economic developing agency in Zeeland; and a matching investment of $250,000 from the Michigan Pre-Seed Fund, a state fund administered by Ann Arbor Spark. The win at Accelerate Michigan certainly accelerated VNN. While many of the competitors and attendees at the event at Orchestra Hall groused that VNN wasn’t high-tech enough, and that the money should have gone to someone in health care or biotech, investors took notice. It only took three months for Vaughn to close on his first VC round. That financed the push into Indiana and Ohio in 2013 and 33 states by the end of 2014. Institutional investors now include Arsenal Venture Partners of Winter Park, Fla.; Ann Arbor-based North Coast Technology Investors LP; New York City-based RSL Venture Partners, whose partners include Dick Parsons, the former CEO of Time Warner Inc.; Start Garden of Grand Rapids; Invest Detroit’s Detroit Innovate fund; the Grand Angels; Traverse City-based Northern Michigan Angels; and the Ann Arbor-based Michigan Angel Fund. Tom Henderson: (313) 446-0337 Twitter: @tomhenderson2

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

WORLDWATCH WHERE MICHIGAN DOES BUSINESS: UNITED KINGDOM

Altair Engineering Based: Troy Operations: A headquarters in

Royal Leamington Spa and regional offices in Bristol and Manchester Employees: 55 Products/Services: Proprietary software and services, which include engineering simulation software, software for on-demand computing and software for industrial design Top executive: Royston Jones, managing director and CTO for Altair Product Design Clients: Jaguar Land Rover, Airbus, Unilever, BAE Systems, McLaren Automotive, Bombardier Transportation and Ford Motor Co.

Belfor Holdings Inc. Based: Birmingham Operations: Headquarters in

Tamworth with operational branches in Livingston, Washington, Runcorn, Worksop, Abingdon, Bristol, South Brent, Cardiff and Dungannon Employees: 200 Products/Serives: Disaster restoration and recovery services including commercial and domestic fire, smoke and water restoration services, document and data recovery, mold remediation, electronics and machinery restoration, environmental services Top executive: Alasdair Phillips, managing director

Beringea LLC Based: Farmington Hills Operations: Office in London Employees: 30 Products/Services: Growth

capital investments in rapidly growing businesses Top executive: Malcolm Moss, co-founder, senior managing director

Bissell Homecare Inc. Based: Grand Rapids Operations: A subsidiary office in

Slough

Employees: 15 Products/Services: Floor care

products all across the U.K. and Ireland Top executive: Tracey Scully, sales and marketing director Clients: Amazon.com Inc., Argos, Currys, Lakeland, JD Williams, Shop Direct Group, AO.com and Tesco plc

Cooper-Standard Automotive Inc. Based: Novi Operations: Sales and engineer-

ing office in Coventry Employees: 25 Products/Services: Sales and engineering

president of IAC Europe

W

Clients: Jaguar Land Rover, Nissan, GM Opel, Ford Motor Co., Mercedes-Benz, Volkswagen and BMW

ith a nominal 2015 GDP of $2.8 trillion, the United Kingdom is the 10th largest economy in the world as well as the third largest economy in Europe, according to the CIA World Factbook. The country has a large supply of natural gas, coal and oil resources but has also been a net importer of energy in the past decade. In light of the recent “Brexit” vote, the following data on imports and exports is likely to change. The United Kingdom’s largest exports are fuels, chemicals, manufactured goods, tobacco, food and beverages. Its biggest export partners are the United States (12.7 percent), Germany (10.5 percent), the Netherlands (7.6 percent) and France (6.5 percent), according to 2014 data. The United Kingdom’s largest imports are fuels, foodstuffs, machinery and manufactured goods. Its biggest import partners are Germany (14.6 percent), China (8.9 percent), the Netherlands (8 percent) and the U.S. (6.8 percent). Each World Watch features a different country. If you know of a Michigan company that exports, manufactures abroad or has facilities abroad, email Gary Piatek, senior editor, at gpiatek@crain.com.

Lear Corp. Based: Southfield Operations: Manufacturing

operations in Alfreton, Coventry, Redditch and Sunderland Employees: 1,900 Products/Services: Fully assembled seats and seat components (foam and fabric) Top executive: Gideon Jewel, president for Global JIT Clients: Jaguar Land Rover and Nissan

NSF International Based: Ann Arbor Operations: Offices in Oxford,

COMING UP August: Thailand and Malaysia | September: India

Belfor Holdings has

200 workers employed at its facilities throughout the United Kingdom, including its headquarters in Tamworth (left).

COURTESY/BELFOR

Top executive: Fernando de Miguel, senior vice president and president, Europe Clients: Honda, Nissan, Jaguar Land Rover, Vauxhall

Dayco Products LLC Based: Troy Operations: An aftermarket sales

and technical support office in Basildon as well as a distribution center in Redditch and original equipment sales and engineering associates in the region Employees: 20 Products/Services: Timing and accessory drive system products for passenger and heavy-duty vehicles including timing belt kits, PV and V belts, belt tensioners and idlers, dampers, water pumps and alternator pulleys as well as sales support at the national, branch and garage level and technical, product-focused training Top executive: Bruno Vallillo, president for Europe, Middle East, Africa and India Clients: Ford Motor Co., Daimler,

Products/Services: Pizza, soft drinks, breadsticks and chicken wings Top executive: David Wild, CEO

More information: Domino’s Pizza Group plc is the master franchise

company for the U.K., Ireland and Switzerland. DPG just purchased minority ownership in the master franchise for Iceland and Denmark.

Federal-Mogul Corp. Based: Southfield Powertrain operations: Manufac-

Jaguar Land Rover

turing and technical center in Coventry and a manufacturing facility in Bradford Motorparts operations: Manufacturing and technical center in Chapel-en-le-Frith Products/Services: Valve seats and guides, piston pins and brake friction Employees: 1,000 Top executives: Martin Hendricks, Federal-Mogul Motorparts, president for global braking and EMEA; Gian Maria Olivetti, Federal-Mogul Powertrain, chief technology officer

Domino’s Pizza Inc.

George P. Johnson Co.

Based: Ann Arbor Operations: 869 pizza stores

across the country Employees: 18,760

Products/Services: Strategy and planning, creative, studio, production, digital, client services, event management and registration Top executives: Jason Megson, managing director; Joost Dop, CEO, Project: WorldWide Clients: Cisco, Salesforce, One Young World, Statoil, Gartner, Workday Inc., IBM, Magento, GSMA, Gilead and Swift

International Automotive Components Group Based: Southfield Operations: Manufacturing

facilities in Coleshill, Elmdon, Halewood, Scunthorpe and Sunderland as well as a technology center in Coleshill and a customer center in Basildon Employees: 3,000 Products/Services: Vehicle interior products including cockpit and overhead systems including doors, instrument panels and consoles as well as flooring and acoustics products Top executive: Kelli Carney,

Northwich, York and Rotherham and Oakdale Employees: 365 in addition to a network of over 500 contractors Products/Services: A wide range of certification, testing and safety auditing services for a number of industries and products Top executives: Tom Chestnut, vice president, global food division; Bob Pietrowski, vice president, global health sciences; Tarik Bellahcene, managing director/ European Agency for the Evaluation of Medicinal Products, water division

TI Automotive Ltd. Based: Auburn Hills Operations: Manufacturing

facilities in Deeside, Sunderland, Telford and Burnaston and administrative offices in Oxford Employees: 275 Products/Services: Coex fuel tanks, mono layer fuel tanks, filler pipes, brake and fuel lines and bundles, fuel line assemblies Top executive: Tim Edwards, group controller Clients: Toyota, Honda, General Motors Co., Nissan, Jaguar Land Rover, BMW, Bentley, Aston Martin

Natalie Broda

Based: Auburn Hills Operations: A facility in Kingston

upon Thames Employees: 102

Domino’s has 869 pizza stores across the United Kingdom.

COURTESY/DOMINO’S PIZZA

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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 LY 1 1 , 2 0 1 6

TTI Global opens auto service center in Afghanistan By Blake Froling bfroling@crain.com

When Lori Blaker, president and CEO of TTI Global, went to the U.S. Embassy in Afghanistan in 2012, it had been years since anyone there had seen an American looking to open a business in the region, she said. She was met with skeptical looks and almost a sense of bewilderment. Blaker said she saw the 35 percent unemployment rate in the country and the extremely young population — with a median age of 18.4 years, acLori Blaker: cording to the President and CEO CIA — as a recipe of TTI Global. for disaster. She also noticed that foreigners were being brought in for simple services such as plumbing and electrical work and weren’t passing on those skills to locals. She thought she could help. After years of delays, her Rochester Hills-based company, which provides staffing and training services focused mostly on the automotive industry, opened its first retail automotive service center in Kabul, Afghanistan, on May 26. Crain’s first reported in 2012 on TTI’s plans after Blaker completed a U.S. Department of Commerce trade mission in Afghanistan. But the project was met with delay after delay. It took nearly two years to find an appropriate location, which needed modification to meet the company’s requirements. TTI applied for and received a USAID ABADE (Assistance in Building Afghanistan by Developing Enterprises) grant for $25,000, but the process took six months. Then Blaker said USAID, an anti-poverty U.S. government agency, wanted to buy the equipment and tools necessary for the centers in Afghanistan to try to prevent the funds from being wasted or disappearing, which Blaker said was a common occurrence. Months later, they found out that this was nearly impossible, and Blaker was able to purchase equipment in Dubai. Then came more delays, this time with customs. Blaker said the equipment she bought was mixed in with equipment USAID bought, which made matters even more complicated. The equipment sat in customs from February to April of this year, and “90 percent of it was probably someone was waiting for a gratuity at some point, and that’s very prevalent,” Blaker said. TTI didn’t pay any bribes. The original goal was to open in September 2015. “Everything was difficult,” Blaker said. “There wasn’t one step that didn’t cause issues. I had to go out myself and rattle cages and shake trees.” Blaker hopes all of the headaches will pay off. The Kabul service center employs

20 people — 15 men and five women — all from the local community. Blaker estimated startup costs were about $175,000, which included purchasing tools and other equipment and buying facilities and remodeling them to fit their specifications. The training center will open in about three months. Recent business at the service center was slow because of the Muslim holiday of Ramadan, which took place June 6-July 5. Now that it is over, they expect to return to business as usual. Blaker’s goal for the Afghanistan project is improving the quality of life for people there by training them to be mechanics or technicians, skills that are severely lacking in a country where vehicles routinely break down because of the harsh environment. She wants Afghan people to staff both centers completely and eventually open more centers or their own mechanic shops. It’s especially tough for women to work in Afghanistan, said Blaker, one of Crain’s 100 Most Influential Women this year. She experienced the hardships they face firsthand during her 2012 trade mission. “It’s a totally different world,” she said. “It seems like in the professional circles, the young people are more open to men and women working together. Older generations are very difficult. I was covered up from head to toe the whole time.”

TTI GLOBAL

A small sign directs people to Rochester Hills-based TTI Global’s auto service center in Kabul, Afghanistan. Because of the cultural difference, TTI can’t train women as mechanics or technicians. Instead, the business administration staff is made up entirely of women, who learn about marketing, finance, parts ordering and coordinating workshops. “In our office, the management completely belongs to women,” said Maryam Sahak, the project manager and a native of Afghanistan. “We are trying our best, and if we have a few more organizations like this with women working in management, then it will definitely get better.” During the Taliban rule in the early 2000s, women lived in constant fear and had few human rights, Sahak said. “Over the 2000s, the situation was not good,” she said. “Women weren’t allowed to go out from their homes

for shopping, but it’s getting better. Women can work outside; in open areas, they’re fine.” Progress is being made more quickly than Blaker expected. She said women would constantly approach her, ask if she was American, and tell her how grateful they were for the Americans’ support. “The women especially, their lives are changing in a good way,” she said. “And we don’t hear that on the news. We don’t hear how thankful they are. We only hear about the ‘bad guys.’” Unfortunately, the “bad guys” are making the area more dangerous, Blaker said. American employees are afraid to go to markets or restaurants, and she said the last time she visited, she heard two explosions in one day. Security is always the biggest con-

cern and played a role in delaying the centers’ opening. But she hopes economic investment in the area, like hers, can help to stabilize the area. “Security is always an ongoing concern,” Blaker said. “It’s hard to freely move and schedule meetings and basically get business done.” TTI Global employs nearly 2,000 people in 25 or more countries, and revenue has grown to about $100 million from $3 million when Blaker took over in 1992. If all goes well, Blaker said, she’ll start thinking about opening another center in the region at the end of the year, and possibly more after that. This is a for-profit venture, but she said she would be OK with just covering operating costs at about $75,000-$100,000 per year. So what would she consider a success? “If the training center is fully booked on a continual basis and the service center is covering its costs,” she said. “What we’re doing is, to me, I’m making a statement.” Blaker hopes that statement is successful enough to be seen by other Western companies and entice them to open in the region. “I would hope that we could send a message to others that it’s possible,” Blaker said. “Not only can you set up a viable business, but you can do a lot of good in the process.”

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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 LY 1 1 , 2 0 1 6

COSTAR GROUP

The Raleigh Officentre at 10 Mile and Telegraph roads in Southfield is two interconnected buildings totaling about 290,000 square feet.

Raleigh Officentre note in Southfield goes to auction next month By Kirk Pinho kpinho@crain.com

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The note on the Raleigh Officentre office complex in Southfield is expected to go to auction next month. The starting bid for the nonperforming loan on the connected six-story buildings totaling about 290,000 square feet is $2.25 million, according to the online listing at Ten-x.com, the commercial property affiliate of auction.com. The $35 million loan’s current balance is $22.57 million with an interest rate of 5.71 percent, according to the listing. It matured in December. The two connected buildings that make up Raleigh Officentre, originally built in 1989 at 10 Mile and Telegraph roads, were collateral on the loan, according to the listing.

The property has 1,235 parking spaces and the occupancy rate is 53.45 percent, according to the listing. The owner is Bloomfield Hillsbased Kojaian Management Corp., according to CoStar Group Inc., a Washington, D.C.-based real estate information service. Newmark Grubb Knight Frank, which has offices in Southfield and Farmington Hills, has the leasing contract on the property, which rents for $17.50 per square foot per year, according to the company’s website. According to NGKF, Southfield has 17.22 million square feet of office space. Of that, 22.4 percent was vacant during the first quarter, the most recent quarter for which data was available.

Parts inspection equipment maker in Saline faces fine over Iran deal By Chad Halcom chalcom@crain.com

A Saline engineering company that makes parts inspection and imaging equipment could face a $200,000 fine, five years of federal probation and special compliance measures on charges of illegally selling equipment to Iran. Mectron Engineering Co. Inc. awaits a criminal sentencing Aug. 2 before U.S. District Judge John Corbett O’Meara in Ann Arbor, after its president in February entered an agreement to plead guilty to violating the federal International Emergency Powers Act for exporting equipment to Iran without a license. The charge carries a maximum penalty of $1 million, but the plea agreement calls for Mectron to pay $200,000 and establish a corporate compliance program “monitored by an independent entity� to follow federal law in the future. The company, established in 1968 and based in the Sauk Trail Business Park of Saline, makes quality control and handling equipment, including its own laser, eddy

current and thread inspection systems to test auto parts, firearm ammunition and aerospace fasteners. It allegedly sold a magnetic imagery, or MI8500, inspection system to the Iran Tohid Co. of Tehran in March 2010 for $47,500, and once before in late 2008 for $44,600, according to court documents. An attorney allegedly advised the company in 2009 that it was illegal to make such a sale. Iran Tohid is a diversified parts manufacturer for automotive and other customers, according to its website. Mectron President Mark Hanna and CFO Carol Hanna did not return messages seeking comment last week. Also not immediately available were the company’s attorney, Chairman David DuMouchel of the compliance, internal investigations and criminal defense practice at Butzel Long PC. A federal prosecutor at the U.S. attorney’s office in Detroit declined to comment on the case last week. Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

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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 LY 1 1 , 2 0 1 6

Michigan tax on Glacier Hills to become subsidiary of Trinity Senior Living paid self-insured claims allowed to stand By Blake Froling bfroling@crain.com

By Jerry Geisel Crain News Service

For the second time, a federal appeals court has upheld a 2011 Michigan law that imposes a 1 percent state tax on paid health care claims for self-insured and other employers. That law had been challenged by the Self-Insurance Institute of America Inc., which argued that the statute ran afoul of a provision in the Employee Retirement Income Security Act that preempts state and local laws related to employee benefit plans. In 2014, the 6th U.S. Circuit Court of Appeals in Cincinnati, upholding a U.S. District Court ruling, disagreed, saying the Michigan law had no effect on plan administrators. The SIIA later asked the U.S. Supreme Court to review the ruling, and the high court in March ordered the appeals court to review its decision. That was after the high court struck down — on ERISA pre-emption grounds — a Vermont law requiring employers turn over health care claims information to the state. But in its latest ruling, issued early this month, the 6th Circuit is sticking to the core of its 2014 decision that ERISA does not preempt the Michigan health care claims tax law. The Michigan statute “does not directly regulate any integral aspects of ERISA,” the threejudge appeals court panel ruled in its decision written by Judge Karen Nelson Moore. While the law requires plan administrators and insurers liable for the tax to keep accurate records, “these provisions are not direct regulation of employee benefit plans. Rather, they are peripheral requirements that did not warrant pre-emption,” Moore added. The SIIA now is reviewing what, if any steps, the Simpsonville, S.C.-based trade group will take. “We are obviously disappointed by the court’s ruling and will be reviewing our appeal options,” SIIA President and CEO Mike Ferguson said in a statement last week. “What is very clear is that ERISA pre-emption threats have become increasingly serious, so industry stakeholders should be prepared to respond accordingly.” The Michigan tax is intended to raise several hundred million dollars a year to fund the state’s Medicaid program. This story originally appeared in Crain’s sister publication Business Insurance.

Glacier Hills, a full-service senior campus in Ann Arbor, finalized an agreement to become a subsidiary of Livonia-based Trinity Senior Living Communities. The agreement was signed June 21 and went into effect July 1. Financial details were not disclosed. “Aligning with TSLC will preserve our mission into the future,” Ray Rabidoux, president and CEO of Glacier Hills, said in a statement. “It enhances the continuum of care in the region for seniors and aligns Glacier Hills to meet the needs of health

care reform, deepens the existing relationships with St. Joseph Mercy Health System and enables us to continue providing quality care and service to our residents and their families. It also assures our continuing relationship with the University of Michigan Health System.” Glacier Hills will not be adding any staff at this time, and everything will be mostly “business as usual,” said Betsy Pilon, communication manager for TSLC. TSLC is looking to create a “sustainable regional model with other Trinity Health Regional Health Ministries,” according to a news release.

Pilon said TSLC is currently in a “growth phase.” As part of the deal, more patients from St. Joseph Mercy Health System will have easier access to Glacier Hills and a “stronger continuum of care,” Pilon said. Last year, United Methodist Retirement Communities took a 50 percent stake in Glacier Hills Home Care Inc. for $1.3 million. According to John Thorhauer, president and CEO of United Methodist Retirement Communities, they agreed to be bought out of their agreement, receiving the $1.3 million back. TSLC is a competitor of United Methodist and

thought it would be best to accept the buyout, Thorhauer said. “Glacier Hills has been a long-standing partner with United Methodist, and we are certain this will continue,” Thorhauer told Crain’s. Glacier Hills and TSLC will also establish The Glacier Hills Legacy Fund with the Ann Arbor Area Community Foundation “to focus on supporting the future needs of seniors in Washtenaw County,” said the news release. Pilon said more details about specific funding amounts and dates will be announced later.

“HOW DOES DTE ENERGY KEEP NATURAL GAS SAFE?” Customer safety is our highest priority. That is why we take many precautions when delivering natural gas to over 1.2 million homes and businesses across the state. We inspect nearly 10,000 miles of pipeline each year using advanced technologies, and modernize about 100 miles of pipeline annually. We also add an ingredient that makes natural gas smell like rotten eggs, making it easily identifiable in the case of a leak. If you smell natural gas or suspect a leak, do not use electronic devices or open flames, leave the area immediately, and call DTE Energy at 800.947.5000 24 hours a day.

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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 LY 1 1 , 2 0 1 6

Blue Cross’ new Medigap pricing strategy to raise rates in 2017 By Jay Greene jgreene@crain.com

Blue Cross Blue Shield of Michigan

last week announced its plan to increase prices for its Medicare supplemental insurance policies, effective Jan. 1, following the ending of its five-year rate freeze with Attorney General Bill Schuette and its twoyear agreement with the state to continue more than $200 million in annual Medigap subsidies. Price increases in Southeast Michigan for the Blues’ Medigap policies — which cover a portion of the 20 percent of bills that tradition-

al Medicare doesn’t cover — will range from a low of about $48 per month for Plan C for a 65-year-old female to about $177 per month more for an 80-year-old male. Rate increases for those younger than 65 and with disabilities will be about $188 more than they currently pay. “Anyone living on a fixed income is going to be concerned when they are asked to pay more for their insurance coverage,” Julie Smith, Blue Cross senior vice president for senior health services, said in a statement. “Even though this is our first rate change in five years, we under-

stand the concern this will cause.” Blue Cross is working with members to explain the changes, she said. Last week, the Michigan Health Endowment Fund board approved a plan to partially take over the duty from the Blues of providing subsidies for an estimated 79,000 seniors who purchase Medicare supplemental insurance policies. The Michigan Health Endowment said those under 65 with a disability will get a $125 per month subsidy, those 65 to 75 will get $40 per month and those over 75 years of age will receive $65 per month.

Eligibility was set for seniors at 150 percent or below the federal poverty level. Open enrollment starts Oct. 1 and runs through Dec. 15 for policies effective Jan. 1. There are approximately 200,000 seniors purchasing Medigap policies through Blue Cross. Another 200,000 seniors purchase Medigap from the dozen or more carriers in Michigan. Smith said Blue Cross Medigap rate increases in other parts of Michigan will be substantial, but lower than in Southeast Michigan.

Trust.

“Even though this is our first rate change in five years, we understand the concern this will cause.” Julie Smith, Blue Cross senior vice president for senior health services

For example, Medigap purchasers under age 65 in Southeast Michigan and greater Michigan will pay $226.14 per month. In Southeast Michigan, males age 70 will pay $148.98 and females age 70 will pay $137.94, but those in greater Michigan will pay $138.58 for males and $132.09 for females. In a news release, Blue Cross said it: Will not profit on Medigap business despite the rate increases. This year, Blue Cross estimates it will lose $249 million on its Medigap business. Future losses will average about 10 percent of revenue per year. Will eliminate rate increases for those age 81 or older who have received Medigap coverage from Blue Cross in the past. Will allow seniors to keep their same policies and will not price rates based on health status. Will introduce new Medigap plans next year. As part of the 2014 conversion of Blue Cross into a nonprofit mutual health insurance company, Blue Cross was allowed to drop at the end of this year its 36-year mandate to provide Medigap subsidies. In exchange, Blue Cross is paying $100 million in annual taxes and contributing $1.56 billion over 18 years to the Michigan Health Endowment Fund, which was created with a mission to fund a broad range of child and senior preventive health services, including Medigap. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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Time is running out to purchase tickets to Crain’s annual 20 in their 20s event. The reception, which salutes this year’s class of metro Detroit’s best and brightest under age 30, is set for 5:30-9:30 p.m. July 20 at the Detroit Yacht Club on Belle Isle. Tickets are $60 for individuals, $55 for groups of 10 or more and $45 for 20 in their 20s alumni. The prices increase after July 17. A portion of each ticket purchased will be donated to the Belle Isle Conservancy. To purchase tickets, go to CrainsDetroit.com/events. Questions can be directed to Kacey Anderson at cdbevents@crain.com or (313) 446-0300.

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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 LY 1 1 , 2 0 1 6

CALENDAR

DEALS & DETAILS CONTRACTS

Altair Engineering Inc., Troy, and Maplesoft, Waterloo, Ontario,

announced an agreement allowing Altair to use the modeling language engine of MapleSim to support its development strategy and focus on multi-physics simulation. Also, Altair and APWorks, by Airbus Group, Taufkirchen, Germany, announced an agreement for additive manufacturing with joint, end-toend consulting and other benefits. Websites: altair.com, apworks.de, maplesoft.com. Meridian Health Plan, Detroit, and ConcertoHealth, Irvine, Calif.,

announced a contract to serve Medicare and Medicaid-eligible patients in the greater Detroit area with Meridian’s Medicare Advantage HMO, Dual Special Needs plan, Medicare-Medicaid plan and Medicaid for aged, blind and disabled patients 55 and older. Websites: mhplan.com, concertohealthcare.com.

EXPANSIONS

UBreakiFix, Troy, a franchise of

uBreakiFix, Orlando, Fla., has opened at 24508 12 Mile Road, Southfield. The technology repair company is owned by Drew Lessaris, Ron Harb, Joyce Harb and Matthew Harb. Telephone: (248) 281-4958. Website: ubreakifix.com.

WEDNESDAY JULY 13

Big Data — Small Bytes. 8:30-10:30 a.m. Automation Alley. Better understand what big data is and how it can be used to create 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 it can be used with low-cost tools. Automation Alley, Troy. $15 members; $25 nonmembers. Contact: Lori Podsiadlik, phone: (248) 457-3212; email: podsiadlikl@automationalley. com.

UPCOMING EVENTS

Starting Up: An Introduction to the Entrepreneurial Support Ecosystem in Michigan. 9:30-11 a.m. July 19.

Macomb-OU INCubator. A workshop to explore the resources in Michigan to help start and/or grow high-tech innovation. Items for discussion include business incubators, SmartZones, various support services, university technology acceleration and commercialization, and funding programs. The incubator at Velocity Center, Sterling Heights. Free. Contact: Joan Carleton, phone: (586) 884-9324; email: macinc@oakland.edu.

Scam and Fraud Prevention. 8-10 a.m. July 20. Better Business Bureau.

Presentation on common frauds, scams, prevention tips, protection from ID theft and protection from financial crime. BBB, Southfield. Free. Contact: Demitria Robinson, phone: (248) 799-0305; email: drobinson@easternmichiganbbb. org. 2016 Crain’s 20 in their 20s. 5:30-9 p.m. July 20. Crain’s Detroit

Business. Each year, Crain’s publishes a special feature on the best and brightest up-and-coming local businesspeople in their 20s. The recognition program celebrates them and their achievements. Detroit Yacht Club, Detroit. $60 individual; $55 each for groups of 10 or more; $45 alumni. $5 of each ticket will be donated to the Belle Isle Conservancy. Preregistration closes 5 p.m. July 18. If available, walk-in registration will be $70 per person. Contact: Kacey Anderson, phone: (313) 446-0300; email: cdbevents@crain.com. Minority Business Women’s Conference. 7 a.m.-7 p.m. July 27.

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. Doing Business in Mexico. 11:30 a.m.-1:30 p.m. July 28. Automation Alley. Seminar aims to help Michigan’s small and midsize companies identify key market opportunities, determine entry strategies, and learn more about technical requirements for selling products, services and technologies in Mexico. Hear case studies from those who have been there, discover more about industry in Mexico, and identify opportunities and find potential Mexican business partners and customers. Automation Alley, Troy. $20 members; $40 nonmembers. Contact: Lisa Lasser, phone: (248) 457-3283; email: lasserl@automationalley.com. New Enterprise Forum Showcase and Pitch Pit. 5-7:30 p.m. July 28. Spark.

Training entrepreneurs on how to present to investors. Learn what is important to communicate and what not to do. Three entrepreneurs will each give a four-minute pitch of their business

idea to a panel of investor judges in a kinder version of TV's “Shark Tank.” Spark, Ann Arbor. Free. Contact: NEF Public Relations, phone: (734) 214-0110; email: PR@NewEnterpriseForum.org Location, Location, Location — Geo-targeting Your Audience. 11:30 a.m.-1 p.m. Aug. 10. Troy Chamber of Commerce. Brian Blau, Quell Communications Group, will walk

attendees through an integrated digital marketing program to target specific audiences within specific markets. Discussion includes messaging and positioning, content generation, digital production and media deployment across diverse online channels including Hulu, Pandora, Spotify and others. Troy School District Services Center, Troy. $28; $18 Troy Chamber members. Add $5 for registering on day of event. Contact: Jaimi Brook, phone: (248) 641-8151; email: theteam@troychamber.com.

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.

Maxion Wheels, Novi, a division of lochpe Maxion S.A., opened a new

light vehicle aluminum wheel plant in Limeira, Sao Paulo, Brazil. Website: maxionwheels.com.

IP Experience

Tropical Smoothie Cafe of Westland, a franchise of Tropical Smoothie Cafe, Atlanta, Ga., has opened at 35599 Warren Road, Westland. The food and smoothie café is owned by Salem Najjar and John Abuaita. Telephone: (734) 351-5986. Website: tropicalsmoothiecafe.com.

In Your Corner.

Patent and trademark prosecution.

Freedom to operate, novelty, and state of the art searches and opinions.

Intellectual property license agreements.

NEW PRODUCTS

Continental Automotive Systems Inc.,

Auburn Hills, a division of Continental AG, debuted a new electronic integrated brake system, MK C1, that is lighter and more compact than conventional systems and results in shorter braking distances. Website: continental-corporation.com.

®

Ziebart International Corp., Troy, has introduced Z-Shield paint protection film, which custom fits to vehicle specifications and wraps around surfaces such as mirrors and bumpers. Website: ziebart.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.

Ŷ

Detroit

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Novi

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Grand Rapids

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Contact Charles Gray at cfgray@varnumlaw.com

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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 LY 1 1 , 2 0 1 6

For auto suppliers, self-driving payday nears Sensor, software boom expected by 2020 By David Sedgwick Crain News Service

A true driverless car — one that will give you a look-ma-no-hands experience from door to door — is not going to liven up dealer showrooms for another decade or two. But for suppliers, the payoff is right now. By 2020, vehicles that can accelerate, brake and steer themselves will generate additional annual sales of $20 billion to $25 billion worth of sensors and software, according to a study by Southfield-based AlixPartners. AlixPartners based that forecast on market surveys published this year by two consulting firms, IHS Automotive in Southfield and Dolcera in San Mateo, Calif. Annual software revenue from the sale of navigation maps, collision-avoidance programs and other features will range from $10 billion to $15 billion, predicted Dolcera. Meanwhile, sales of vehicle cameras, radar, ultrasonic sensors and lidar will generate an estimated $9.9 billion in annual revenues, according to IHS Automotive. “It’s not a mature market yet,” said Mark Wakefield, a managing director at AlixPartners who co-authored the report. “The ‘take rate’ is still going up, and it’s well above the market growth of vehicles.” Radar, cameras and ultrasonic sensors each have established markets, but lidar is just starting to attract automaker attention. By 2020, lidar will generate annual sales of $185 million, barely a drop in the bucket by comparison to the other rapidly emerging technologies.

Lidar technology, which uses light from a laser to track the distance of objects, is likely to enjoy growing demand as suppliers cut costs. Several of the industry’s largest suppliers are developing lidar products.

“It’s not a mature market yet. The ‘take rate’ is still going up, and it’s well above the market growth of vehicles.” Mark Wakefield, AlixPartners

But lidar, a vision technology that uses light from a laser to track the distance of objects, is likely to enjoy growing demand as suppliers cut costs and shrink the hardware package. Several of the industry’s largest suppliers, including Continental AG, Robert Bosch GmbH, Valeo, Autoliv, Delphi and Denso, are developing lidar products. While those suppliers are familiar names to the auto industry, Silicon Valley companies are poised to dominate the market for vehicle

software. “I think Google is probably in the best position,” Wakefield said. “And Mobileye is hot and heavy in this space,” he added, referring to the fast-growing supplier of obstacle-detection software. Meanwhile, automakers and traditional suppliers are frantically hiring software engineers to keep pace with newer Silicon Valley automotive competitors, which are accustomed to the one-year cycle of consumer electronics.

“This is really where the automakers and traditional suppliers are furthest behind,” Wakefield said. “They have to shift their workforce and their capital expenditures.” The ranks of technology suppliers will be evolving at an inopportune time for the industry, according to the AlixPartners report. It forecasts that 2016 will be the end of the current U.S. auto sales boom. According to the report, U.S. sales will top out this year at 17.8 million new light vehicles, ahead of 2015’s 17.47 million sales. It forecasts that 2017 will begin a cycle of lower sales, bottoming out in 2019 at 15.2 million. This story first appeared in Crain’s sister publication Automotive News.

Foley picks up 3 senior Honigman partners in expansion By Chad Halcom chalcom@crain.com

Sometimes building a footprint sells lawyers, as much as clients, on a law firm, as the Detroit office of Foley & Lardner LLP picked up three partners with 75-plus years experience from Honigman Miller Schwartz and Cohn LLP.

Former Honigman litigation department co-Chairman Norman Ankers, former firm assistant general counsel and white-collar crime and investigations practice Chairman Jennifer Zbytowski Belveal, and tax appeal and real estate litigation partner Jason Conti all left Honigman to start July 1 as partners at Foley. Ankers, senior of the trio with 36 years’ experience, said the three attorneys had “bonded” well during their time at Honigman and had been shopping their ser-

vices to several local and national firms for several months, with several suitors. “There was no plan to act as a group, but all of us were looking for ways to augment our own practices, and complement the services of a larger firm,” he said. “More and more, as I’ve tried to pitch litigation work, particularly with prospective new clients, I’ve been in situations where the general counsel (of a corporation) is impressed with my services, and our talents. But the response was ultimately, ‘Well, we really need the cover of a national firm.’” Foley, headquartered in Milwaukee, has nearly 900 attorneys across 17 U.S. locations including Detroit plus overseas offices in Belgium, China and Japan. It also consistently ranks among the top 50 national law firms with more than

$600 million global revenue, according to recent data from American Lawyer. Honigman, at less than a third that size, historically has avoided much expansion out of state and only recently added a Chicago location to its five Michigan offices by acquiring the 14 attorneys of Schopf & Weiss LLP last year. Honigman declined to comment for this story, but has said in the past no other out-of-state expansions were imminent after the Schopf deal. The Chicago office of Honigman has grown to more than 20 lawyers since late last year, according to its website, while total headcount was slightly off since January across the firm as a whole. The three lateral hires bring Foley to about 36 local attorneys, and that figure could approach 40 when

some summer associates join the firm full-time this fall, said Daljit Doogal, managing partner for the firm’s Detroit office. He also said the new hires bring some new white-collar and real estate tax expertise. Ankers, who was also previously a managing partner of Honigman’s first Oakland County office, said he and the other laterals were not seeking management positions at the new firm for now. “I come as a foot soldier, which is to say I wanted to devote myself more fully to the practice of law,” he said. “I believe leadership is something you earn, and you aren’t just knighted with it, and if I grow my practice to a point where a leadership role makes a good fit later, we’ll see.” Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

PEOPLE: SPOTLIGHT Fanuc America names Cicco president, CEO

Mike Cicco has been named president and CEO of Rochester Hills-based Fanuc America Corp., which also named Rick Schneider, a board member of Japanese parent company Fanuc Corp., as its new Mike Cicco chairman. Fanuc provides robotics, computer numeric control systems and factory automation. Cicco, with Fanuc since 1999, transferred to its headquarters in Rochester Hills to become the national account manager of the company’s authorized system integrator sales group. He later became the general manager of several robot division groups and then was promoted to vice president of North and South American sales and execution.

Eubanks appointed to MPSC for partial term Rachael Eubanks, director of public finance for Robert W. Baird & Co. Inc. in Lansing, has been appointed to the Michigan Public Service Commission.

Eubanks fills a partial term vacated Rachael Eubanks by the former commission chairman, John Quackenbush. Her term will end in July 2017. Quackenbush left his six-year term in March to return to the private sector.

TechTown adds 7 to board TechTown Detroit, a nonprofit business incubator and accelerator, named seven new members to three-year terms on its board of directors. The new members are Diane Dunaskiss, retired principal of Pine Tree Elementary School in Lake Orion; Robert Forsythe, dean of Wayne State University’s Mike Ilitch School of Business; Jacalyn Goforth, partner with PricewaterhouseCoopers LLP’s assurance services; Christopher Graunstadt, director of treasury services and project management office for Henry Ford Health System; Tonya Matthews, president and CEO of the Michigan Science Center; Rodrick Miller, president and CEO of the Detroit Economic Growth Corp.; and Fredrick Molnar, vice president of entrepreneurism and innovation for the Michigan Economic Development Corp.

CABELA’S FROM PAGE 3

burn out, that would allow the other tenants to leave.� “We had the choice of doing (the outlet center) or the more traditional lifestyle center ... with restaurants ... bigger boxes like Marshall’s or Home Goods, a bookstore,� Guastello said. “Those are longer-term uses (that) we think better serve the project,� he said, with 10- to 20-year leases rather than the five-year leases outlet center projects typically bring. Guastello said he and the co-owner of the property plan to hold in reserve the 40 acres or so planned for the outlet center at the corner of I-94 and M-59/Hall Road in case upscale-anchor interest in the project is revived once the Cabela’s and lifestyle center bricks start going up. Developers of the Outlets of Michigan, another luxury outlet center

JOB FRONT TECHNOLOGY

planned in Romulus, declined to comment last week on the status of the project. Like the Chesterfield outlet center, the Romulus plan, at Vining Road and I-94 near Detroit Metropolitan Airport, has been in development since summer 2014. A third outlet center plan proposed for Canton Township was abandoned for infrastructure cost reasons at the end of 2014, and that project’s developer, Baltimore-based Paragon Outlet Partners, teamed up with Newton, Mass.based New England Development on the Romulus outlet center plan. They secured initial approvals for their jointly developed center from Romulus during the first quarter of 2015 and had planned a summer 2015 groundbreaking, pending lease negotiations with retailers. As planned, the $100 million, open-air concept will include 80-90 national retailers, according to the site plan submitted to the city. Reported anchors for the Romulus center were announced during

the International Council of Shopping Centers’ annual retail conference in Novi last summer. They included Nike, Tommy Hilfiger, Calvin Klein, Gap, Brooks Brothers, Old Navy, Under Armour, Express and Off Broadway Shoes. But last week, Kelvin Antill, development partner at Paragon, declined to confirm or release any names of the retailers that have signed on to the project. Outlet anchors are pulling back because they do better when the economy is challenging, said retail consultant Cindy Ciura, principal of CC Consulting LLC in Bloomfield Hills. “Customers shop more full-price traditional lifestyle centers when the economy is doing well, like now,� she said. Despite competition from nottoo-distant lifestyle centers like Partridge Creek and The Village of Rochester Hills, the Chesterfield Township site “is located on two major Detroit metropolitan freeways in a market that continues to grow its population pretty steadily, so I would say it

MARKET PLACE

POSITIONS AVAILABLE

"

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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 LY 1 1 , 2 0 1 6 CRAIN’S DETROIT BUSINESS

July 11, 2016

"

GM Financial seeks a Sr. Specialist ETL Prog.: Requires a BS in CS or Info. Sci. & 5 yrs exp coding & test. in ETL & Cognos for critical bus. components using DataStage, Kronos Workforce Mgmt, & UNIX Shell Scripting. Minimum domestic travel required. Position in Detroit, MI.

Mail resumes to: Steven Plate 200 Renaissance Center Detroit, MI 48265 EOE

MISCELLANEOUS

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Call Us For Personalized Service: (313) 446-6068 CLOSING TIMES: Monday 3 p.m., one week prior to publication date. Please call us for holiday closing times. FAX: (313) 446-0347 E-MAIL: cdbclassified@crain.com INTERNET: www.crainsdetroit.com/section/classifieds Confidential Reply Boxes Available PAYMENT: All classified ads must be prepaid. Checks, money order or Crain’s credit approval accepted. Credit cards accepted.

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hunting, fishing and camping gear retailer. “Until we make an announcement, we can’t speak about or speculate about a potential new store location,� said Cabela’s communications specialist Nathan Borowski. However, “nothing is out of the realm of possibility; we’re still in retail expansion mode,� he said, noting the company has moved to a smaller footprint of 70,000-100,000 square feet for its stores. The Grandville store Cabela’s opened best characterizes the size of its next-generation stores, Borowski said. The company is no longer developing large stores of roughly 200,000 square feet, such as the one in Dundee, or smaller stores of roughly 42,000 square feet, such as Cabela’s “outpost� location in Saginaw. “The new size allows us to build closer to highly populated areas, putting us in more convenient locations for customers,� Borowski said. Sherri Welch: (313) 446-1694 Twitter: @sherriwelch

REAL ESTATE

INDUSTRIAL SERVICES

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BUSINESSES FOR SALE

is a good site for new development,� Ciura said. Sidney, Neb.-based Cabela’s Inc. (NYSE: CAB) secured final site-plan approvals from the township’s zoning board of appeals June 29 and is working with the township’s engineering department on infrastructure prep for the new store. Its store will be closer to 21 Mile Road on the east side of the property, along I-94, Guastello said. Construction is expected to begin within a month, and the store is slated to open next spring. Township Treasurer Linda Hartman said the new store will create 150 to 180 jobs. Cabela’s did not seek incentives for the project. The outdoor gear retailer is “a strong lead tenant for the Chesterfield Towne Center, and (its) presence already has attracted quality business interest, a diversified land use to accommodate retail as well as commercial, office uses,� Hartman said. The Chesterfield location will be the fourth Michigan store for the

Page 33

AUCTIONS

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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 LY 1 1 , 2 0 1 6

KOSCH FROM PAGE 1

percent from $14 million last year. The company's 2014 revenue was $12 million. Kosch Dining began as a tavern and restaurant operator in Sterling Heights in the early 1980s. Today, it manages onsite dining operations for several metro Detroit companies and parks, ranging from the Huron-Clinton Metroparks to Troy Community Center, Walsh College, Monroe County Community College, Blossom Heath in St. Clair Shores and Paint Creek Country Club in Lake Orion through a joint operating agreement with Davey Golf, which is the Lake Orion-based division of the Davey Tree Co. in Kent, Ohio. Though based in Rochester, Kosch isn’t new to Gaylord or northern Michigan. Its owners began acquiring property 10-20 years ago, beginning in Rochester and then heading north to Traverse City, Elk Rapids, Petoskey and Gaylord. In establishing the Kosch Properties Division, the idea was to hold the properties as a hard asset and to lease them to produce revenue. The brothers operated the wellknown Gordie Howe’s Tavern & Eatery in Traverse City from 1994-2005 and today rent the restaurant to the operators of Agave Mexican Grill, Gordie Kosch said. They also own and operate other eateries familiar to many tourists and northern residents, including the Alpine Tavern & Eatery in Gaylord, with its outdoor beer garden during the warm weather; The Boathouse, on Traverse City’s Mission Peninsula; the building that houses Trout Town Tavern & Eatery in Kalkaska; and the 140-year-old Cook Electric building in Petoskey. The Cook building is now a multi-tenant office and retail building that houses Great Lakes Pie Co. and other businesses. Their newest northern Michigan property, Main Street Market,

Founders Gordie (left) and Gary Kosch: The brothers began acquiring property 10-20 years ago, beginning in Rochester and then heading north.

KOSCH DINING SOLUTIONS

Main Street Market in Gaylord offers customers a glass of wine or coffee and a

selection of baked goods before or after they peruse its selection of gourmet cheese, meat and other made-in-Michigan products.

opened May 23 downtown in Gaylord in a 136-year-old building they’ve held and leased to a number of tenants for the past 12 years. Installing new electricity and heating, ventilation and air conditioning systems, Kosch Dining Solutions invested $400,000 to convert the historic building, a hardware store for roughly 100 years, into a bistro, bar and gourmet market. Its venerable tin ceiling and interior brick walls remain intact. “The uniqueness of the concept is a progressive, upscale, new consumer experience,” Kosch said. With seating for up to 60, the market offers customers a glass of wine, a selection of small plates or a coffee and baked good before or after perusing its limited gourmet selection of high-end cheeses, cured meats, pasta, chutney and other made-in-Michigan products. The market is the second business Kosch has opened in Gaylord this year. Last fall, it purchased the 4-acre parcel next to the Big Buck Brewery on I-75 in Gaylord for $350,000 and spent an equal amount to expand and renovate the

former Wisconsin Street Hall building and surrounding area. Now operating as the Otsego Grand Event Center, the venue has seating for up to 220 people, an onsite ceremony space with a waterfall, and arbor and landscaping to create a private setting for wedding parties in the back garden area. “We already have $600,000 of business for that venue on the books for this year,” Kosch said.“That’s better than expected.” Two-thirds of the booked business is for weddings and the remainder is for corporate, nonprofit and private events such as birthday parties and baby showers.

“A banquet business is different from a restaurant (where) ... pretty much how you do the first few months is typical of the volume you’re going to realize,” Kosch said. A banquet center takes time to build a customer and referral base, Kosch said. Despite competition from established venues including TreeTops Resort and Otsego Club & Resort, he projects Otsego Grand will do about $750,000 in revenue this year and $850,000 to $900,000 next year. Kosch Dining Solutions is also seeing growth on the local and outof-state fronts, its co-owner said. The company has a three-year contract to manage the 15 concession stands, AAA Clubhouse, 30 suites and all catered, on-premise picnics for the new Jimmy John’s Field, which opened May 30 in Utica. The stadium is expected to do about $2.5 million in food and beverage revenue each year, Kosch said. Gordie Kosch said he and his wife, Julie, have known Andy Appleby, who built the stadium for his independent United Shore Professional Baseball League, and his wife, Kris, for 20 years through Young Presidents’ Organization. That relationship, coupled with a competitive bid, won Kosch Dining Solutions the contract, he said. “I think it had a lot to do with customized solutions — a national (food and beverage company) will not customize solutions; they’re going to go with their format.”

Appleby wanted a unique, customer-driven service, and that’s what Kosch Dining is delivering, Kosch said. He and his wife drove to Kansas City, Kan., late this spring to buy a commercial smoker that had been used in professional competitions so they could smoke pork butt, beef brisket and other meats right on site at the new stadium. “I don’t know of any national (food and beverage company) doing on-site smoking” at a stadium, Kosch said. (Most use commissaries and then transport.) Kosch, which now employs 600650 people, also landed a two-year contract in February to manage food and beverage for Maple Lane Golf Club in Sterling Heights for owner Moceri Cos. And last week, it took over the food and beverage operations for the 54-hole Kenton County Golf Course and its banquet center in Kentucky through a second joint operating agreement with Davey Golf, which is managing the golf operations for the courses. The contract, which runs through December 2019, is expected to do $550,000 in gross food and beverage revenue on an annual basis, Kosch said. Kosch Dining and Davey Golf — which is projecting $10 million in sales this year, up from $7.7 million last year — are now talking with a Florida course about taking over operations as well, he said, noting the golf industry is trending significantly to outsourcing. The majority of golf courses have a food and beverage operations. “If you can’t have that under your management direction, you just can’t compete for management contracts,” said Davey’s national division manager, Mark Jackson. “We are not a food and beverage company; Kosch is. They get that end of the business, and we get all the facets of golf,” he said. “So we’ve teamed up with them so we have the best practices of both worlds.” Sherri Welch: (313) 446-1694 Twitter: @sherriwelch

Judge to limit deposition order for OEMs in supplier price-fixing litigation By Chad Halcom chalcom@crain.com

A federal judge will rein in a previous order for automakers, including General Motors Co., FCA US LLC and Toyota Motor Engineering & Manufacturing North America Inc., to give

depositions in the massive Detroit auto supplier price-fixing litigation, after more than half a dozen of the companies challenged the order in court. U.S. District Judge Marianne Battani held a hearing in late June and is expected to adopt a written ruling as early as this week, limiting the April deposition and discovery order by court-appointed special master Gene Esshaki. The lawsuit in Detroit combines various cases filed nationwide, alleging price-fixing in more than 30 industry segments of the automotive supply chain. Esshaki ordered that nine “non-party” automakers and some of their affiliate financing and re-

search and development companies each offer up to 14 hours of deposition over two days apiece, covering pricing data for the auto parts in dispute and some vehicle sales data and price adjustments for their networks of automobile and truck dealerships. But attorneys told Crain’s that Battani will order that first subpoenas must go out to the OEMs well in advance and give the companies time to respond, and that the suppliers and consumers in the litigation must give the OEM witnesses at least a rough outline of questioning topics beforehand. Fiat Chrysler, GM, Hyundai Motor America, Nissan North America Inc., American Honda Motor Co. Inc., Daimler Trucks North America and other trucking operations of Daimler AG either brought or supported various objections to the deposition and discovery order in early May. Ford Motor Co. is involved in an

OEM plaintiff action against the suppliers within the Detroit litigation, so it is not named as a “non-party OEM” in the deposition order. The OEMs have generally stayed out of the case since it began in 2012, and they contend in court that the depositions as previously ordered improperly involve them in questions on “broad substantive topics” about it. The 4-year-old civil lawsuit in Detroit has closed in on a half a billion dollars in commitments from about a dozen companies that have settled since 2013 — but more than 100 supplier companies or their subsidiaries in more than 30 industry segments are still defendants. The federal government and other regulatory agencies in Europe and Japan have alleged that suppliers around the world were involved in a global practice of fixing inflated prices of parts shipped to OEMs or other suppliers in violation of anti-

trust laws, from at least the late 1990s until about February 2010, when a handful were raided in Southeast Michigan and Japan. The U.S. Department of Justice has surpassed $2.6 billion in criminal fines levied against about 40 companies in Michigan and several other states, in separate criminal proceedings since 2011. But many companies were accused of participating only in parts of the conspiracy, involving specific auto industry segments like exhaust systems, seating and safety systems, instrument panels and other subsystems, or of participating for more limited periods. Michael Palese, corporate communication strategy and litigation communications manager for Fiat Chrysler, said the company continued to “monitor developments on this matter and to consider its legal options,” but did not elaborate on whether the expected Battani order

was satisfactory or if Chrysler would appeal. Nick Richards, GM product development communications manager, said in a statement last week that the company would not comment on pending litigation. In court, both automakers have argued that Esshaki stepped outside his role as a referee on evidence-sharing matters. “If this were an evidentiary hearing, then both sides — the (OEM groups) and the (suppliers and consumers who are parties) — would have a right to obtain and present evidence. It would not be a one-sided affair, in which the parties may cross examine the (OEMs), but (they) have no power to compel testimony as to the parties’ lack of substantial need for information sought,” they argued in a motion before Battani in May. Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

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ZONING FROM PAGE 1

West Jefferson near Junction Street, is expected to go before the Board of Zoning Appeals on Tuesday to appeal the April Buildings, Safety Engineering and Environmental Department decision to require a structure on the site. “The zoning ordinance ... allows us to impose conditions we feel are for the safety and protection of the public's interest, health, safety, welfare and environment,” David Bell, director of BSEED, said in a statement. “We would let them have storage of coke or coal-related products at this location, but not according to their current proposal.” But Gotthelf says there has been no evidence the site has posed a public health hazard. She says toxicologists and air quality and stormwater experts have all said that piles at the site have not caused public health or water quality problems. The case may be taken to circuit court if Waterfront Petroleum's appeal is denied, Gotthelf said. The company provides bulk liquid storage and fueling for ships up to 1,000 feet long. It also is petroleum provider for the city of Detroit. Tlaib, who is now community partnerships and development director for the Detroit-based Maurice & Jane Sugar Law Center for Economic and Social Justice, which is representing Bridge Watch Detroit in a

lawsuit against Waterfront Petroleum over the piles, said she understands the Detroit-based company's concern over cost but is concerned about public health impacts in the surrounding Southwest Detroit community where she lives. “We are not trying to make them stop; we are trying to make them do it better,” Tlaib said.

Health, environmental concerns Gotthelf says the site had about 30-foot-tall piles of coke breeze derived from metallurgical coal, not petroleum coke, a coal-like byproduct of oil refining. Metallurgical coke is produced from coal and used in steelmaking, while pet coke is used as a fuel source in industrial and power generating plants. According to testimony in the Bridge Watch Detroit case from Ranajit Sahu, an independent environmental expert who has worked with the Sierra Club in North Dakota on coal issues and others, “met coke” breeze is generally used as a fuel source in the iron and coal industries. He testified that pet coke breeze is commonly used as a protective backfill around oil pipeline protection systems. In July 2014, the Michigan Department of Environmental Quality determined that Detroit Bulk Storage Inc. didn't have sufficient dust control measures to prevent air pollution from pet coke that came from Marathon Petroleum Corp. refining. Cardiovascular and respiratory problems could be caused by lengthy exposure to particulate

“We can’t kick out the residents. We can’t kick out industry.” Kathy Wendler, Southwest Detroit Business Association

matter from pet coke, the DEQ determined five months earlier in February 2014. The U.S. Environmental Protection Agency says it is “particularly concerned” about dust particles smaller than 10 micrometers (one-tenth the thickness of a human hair) in diameter because those are the ones that enter the lungs through the throat and nose. Tlaib on Thursday said Waterfront Petroleum has referred to the piles both as “met coke,” as well as one of its derivative, coke breeze, which has individual pieces ranging in sizes from that of a split pea down to pretzel salt. But that is beside the point, Tlaib said. “They can call it coke milkshake,” she said. “They have said it’s a different thing, met coke. They refer to it as coke breeze, which according to our experts and research, is just a smaller, finer product of pet coke. What we know is that there were high piles of coke.” Waterfront Petroleum says in legal documents that there have been “no complaints of visible dust com-

ing from the Waterfront properties” made to the companies when the coke breeze was put on the property, when it sat there waiting for transfer, or when the transfer actually took place. Teresa Seidel, assistant division chief for the DEQ's Air Quality Division in Lansing, said there have been no violations or complaints filed with the state agency about the Waterfront Petroleum property. And Gotthelf says that requiring a structure to be constructed to house the material, which is temporarily stored on the site for periods generally ranging from 30 to 45 days before it is shipped, would make Detroit one of only three markets in the country with such a requirement. The other two are Chicago and Los Angeles, and Detroit companies would effectively be “priced out” if there is such a requirement, which is part of a new bulk storage ordinance currently being considered by the Detroit City Council. There are currently “no coke products whatsoever” on the site, Gotthelf said. The met coke breeze piles from October came from Zug Island, the heavily industrialized island mostly in River Rouge south of Detroit where U.S. Steel Corp. has mill operations. “We are just a port,” Gotthelf said. “Other people bring the material on-site and ship it off-site. We don’t know where the material goes” after it leaves the property.

History of the site This isn't the 13 acres’ first flirtation with potentially hazardous materials. It is part of the former 29-acre Revere Copper and Brass Inc. property, where between 1943 and 1944, at least 1,220 tons of uranium were extruded as part of the Manhattan Project, which led to the creation of the world’s first nuclear bomb during World War II. (The site is not believed to hold residual radiation.) Revere Copper, established in Massachusetts in 1801, vacated the site in 1985 after melting scrap and virgin copper into cakes for fabrication into copper bearings there for decades. The property tax-reverted back to the city in 1986. Between 1987 and 1988, the EPA removed barrels and drums, as well as the organic chlorine compound polychlorinated biphenyls, more commonly known as PCBs. Kathy Wendler, president of the Southwest Detroit Business Association, said the area has historically

been used for heavy industry. “But it’s also a place of jobs and entrepreneurship and dense community and a real sense of community here,” she said. “We can’t kick out the residents. We can’t kick out industry. We’ve been figuring out how to live together for some time,” said Wendler, whose organization was started in 1957. “It’s part of our history and part of our identity, and we have to make it work because we don’t want to lose

either. We think people are entitled to a clean environment, and we also don’t want to lose the jobs and industry. We struggle on a daily basis working on this.” Warner began buying parts of the former Revere Copper plant in 2013 as the city teetered on the largest Chapter 9 municipal bankruptcy case in American history. The first portion, totaling 6.8 acres, he paid $1.2 million to acquire. The second portion, totaling 5.5 acres, cost him $735,000. Between the two parcels, Warner expects to spend $6 million on improvements as it expands its marine liquid and bulk distribution operations, Gotthelf said. Some of those improvements have already taken place, including blight removal. Among the things that were removed were 17 abandoned vehicles from the water on which his property sits, said Gotthelf, who is also Butzel Long’s director of innovation and external relations, co-chairman of the energy and sustainability practice, and chairman of the aerospace and defense industry team. The rest of the former Revere Copper site, totaling 17.1 acres, was purchased earlier this year by Revere Dock LLC, a subsidiary of Grand Rapids-based rigging, transport and engineering provider Erickson Inc., for $2.28 million. The company plans more than $10 million in improvements. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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JEFFERSON FROM PAGE 3

Jefferson-Chalmers. Elling said Lester Gouvia will open a high-end Caribbean restaurant called Norma G’s Caribbean Cuisine in the JEI building. The area’s first sit-down restaurant in decades also will serve as a home base for Gouvia’s popular food truck. Named after his mother, Norma G’s will offer entrees that hail from Gouvia’s Trinidad birthplace. “Mr. Gouvia’s passion for food and his desire to be a community anchor in the Jefferson-Chalmers neighborhood is one of the most exciting things I have witnessed during my entire tenure here at Jefferson East,” Elling said. “With Norma G’s, we are able to provide that desperately needed community spot that allows long-term Lester Gouvia: Detroiters to Set to open walk to a great Caribbean eatery. meal from their homes.” Construction is expected to begin in the fall, Gouvia said. The 14,000-square-foot 14700 Jefferson building, on the first block of Jefferson-Chalmers that borders Grosse Pointe Park, was purchased in May 2015 and is being rehabbed by restaurant owner Jessica Caizza, who owns real estate development company Jeff14700 LLC. She said the building and improvements will total more than $1 million. The second floor of the building was gutted and will become a shared workspace, and retail on the street level will continue to include institutions such as Marshall’s Bar and Moe’s Bait Shop, she said. “I feel the resurgence of (downtown) Detroit, but I see the need to work on improving the bookends. I bought the building because I want to give more walkable retail to the people who live there. My building is (part) of bridging the two communities (Detroit and Grosse Pointe Park).” JEI, formerly called the Jefferson East Business Association and founded in 1994, plans to move into the back of the former Kresge building at the corner of Lakewood Street and Jefferson. Four thousand square feet in the front of the building will be leased. JEI’s offices will temporarily locate to a space near the intersection of Jefferson and Chalmers Street, while its old headquarters is being converted to Gouvia’s restaurant. Elling said the resurgence of downtown, combined with business-supporting organizations such as TechTown Detroit and Motor City Match, has had a positive impact on East Jefferson. “Where you have a walkable area, people are gravitating there,” he said, adding that would include The Villages, parts of Rivertown near downtown and Jefferson-Chalmers. Those neighborhoods are three of the five on or near East Jefferson. The others are the Marina District and Lafayette Park. Elling said the refurbishing of a

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

New on Jefferson Businesses along East Jefferson Avenue that have opened this year include: 1. Hello Again Records and Coffee and (____): Ray Cronk, owner of Hello Again Records and co-owner of the adjoining coffee shop and bakery in the Jefferson-Chalmers neighborhood, said getting the two businesses up and running was a lengthy process. The former teacher, who has a background in records and coffee, reunited with Angela Foster a few years ago. (They are old friends from Saginaw.) JEI helped them get off the ground starting in 2014. “They helped us get going during the pop-up stage,” he said. “I’m delighted and fascinated that there is a resurgence and demand for this (record store),” he said. Cronk and Foster got $35,000 for their businesses in round one of the Motor City Match competition. The record store opened last October; the coffee shop started in June. 2. Red Bag Boutique: This women’s clothing shop opened last November in Jefferson-Chalmers. 3. Beautiful Bridal with Keasha: Its co-owners relocated from New York City to open a bridal salon in turn-of-the-century Detroit entrepreneur John N. Bagley’s red brick and sandstone manse. 4. Sacred Space Yoga Centre: Owner and founder Trina Campbell has opened a Christian-centered yoga studio. 5. Posh Fashions: Billed as “a trendy, affordable women’s fashion boutique” by owner Aisha Warrent, it opened in May in the Chene Park shopping center. 6. Three Thirteen Clothing: This casual clothing store for men and women features clothing with its own brand in the Chene Square shopping center. It also carries other Detroit-brand and some national-brand streetwear. 7. Detroit Denim: The founder of this jeans manufacturer, Eric Yelsma, moved his business from Ponyride in Corktown to Franklin Street, just off East Jefferson, in March. “We outgrew the space and wanted our own space and storefront,” he said. He has eight employees and expects to add more this year. Blue jeans are custom made and sell for $250 to $550. 8. Bucharest Grill: Shawarmas and more can be had at this restaurant, which moved near the former Lucky’s Grille on East Jefferson in a shopping strip earlier this year. The restaurant spent its first five years inside the Park Bar on Park Street downtown. It also has locations on Michigan Avenue in Corktown and Piquette Avenue in Milwaukee Junction.

handful of large, old, empty buildings on East Jefferson is in the offing for the near future. One of those is the $1 million redevelopment of the 12,000-square-foot, three-story St. Columba Parish building and the 7,000-square-foot church behind it on East Jefferson near Manistique Street. Fox Creek Partners LLC, a local investment group, purchased the buildings from the Episcopal Diocese of Michigan. The group stabilized the building and is beginning work on the upper floors and carving out storefronts for lease on the street level, said Kyle Hacias, co-managing member of Fox Creek Partners. The ornate parish building was built between 1913 and 1922, and the church was built between 1913 and 1927, Hacias said.

Elling said it is too soon to disclose plans for the historic, long-vacant Vanity Ballroom building on East Jefferson at Lakewood Street or the empty, dilapidated block to the west of it, which is being held by the owner who is dealing with a longtime city nuisance-abatement suit. Across the street from there, the historic building next to the Perry Liquor store will be renovated into the Lakewood Century Apartments. The $7 million project will include 35 apartment units with retail on the street level, said Dorayd (Ray) Bacall, owner of Detroit-based Bacall Companies Inc., which is developing the apartments. Meanwhile, two apartment buildings on Marlborough Street off Jefferson will be rehabbed into 19

1 2 5

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units. “We are still finalizing financing on those,” Elling said. “We want to make sure this is an inclusive neighborhood by providing (a percentage of affordable housing) so long-term residents can stay.” The multi-family housing projects, called the Jefferson Chalmers Main Street Redevelopment Project, will be redeveloped by JEI, Shelbourne Development, Enterprise Community Partners and the Michigan State Housing Development Authority. This year, JEI received a multi-

year, $825,000 grant from the Troybased Kresge Foundation to help support the project. Kathy Makino-Leipsitz, owner of Shelbourne Development, said the two 1920s Marlborough apartment buildings — the Marlborough and the IDEO — have been vacant and boarded for years. They will be gutted and turned into 11 and eight units, respectively. “We will preserve the exteriors of the beautiful brick structures,” she said. Since 2014, crime along the Jefferson corridor declined more than 31 percent. In 2015, there was a 38 percent drop in auto theft and a 22 percent reduction in robberies, according to JEI’s “Safe Jefferson” program. Of note is that the Jefferson-Chalmers street-scape improvements, which include a halfmile protected bike lane and a landscaped center island, will be extended all the way to East Grand Boulevard. The work for the extension will begin early next year and the city likely will tie in repaving and additional landscaped islands along

Hello Again Records (left) is among the businesses that have opened this year on East Jefferson Avenue.

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CHRIS EHRMANN

Jefferson Avenue. “The mayor (Mike Duggan) likes islands,” Elling said. “People need a third place to go after home and work,” he said, adding that Jefferson East keeps that in mind as it plans for new business. “We’re also working on transit linkages that tie East Jefferson to downtown.” If given the go-ahead by voters, the Regional Transit Authority will step in to provide enhanced bus service; the city has already put efforts toward improved bus transit along the route. The corridor has several retail strip centers, which were built about 15 years ago to revitalize the neighborhood. Before and during the Great Recession, the shopping centers struggled, resulting in high vacancy rates. In the past couple of years, new businesses have been slowly moving in. But, Elling said, the days of building suburban-style strip centers in the city are likely over. Duggan has emphasized a new vision that developers are embracing: for the city to offer the type of development the suburbs don’t have. Regina Ann Campbell, TechTown’s managing director of placebased entrepreneurship, said that four years ago TechTown started the small-business support program SWOT (Strengths, Weaknesses, Opportunities and Threats). East Jefferson Avenue was one of four neighborhoods chosen. The other three are Brightmoor, Osborn and Grandmont-Rosedale. “We were looking for neighborhoods that have a strong partner who invited us in,” Campbell said. JEI’s Elling filled the bill. “The partner needs to understand what (businesses) and residents in the area want,” she added. Campbell has worked with Jefferson East to get the new businesses rolling. “We’re very excited by the activity that has come from new and existing businesses along East Jefferson,” she said. She said of the four neighborhoods in the SWOT program, the area overseen by JEI, is making the most progress. “There’s been a lot of investment, both economic and residential development. More people want to open businesses there. It’s at a tipping point." When asked why it has taken so long for East Jefferson to take off, Campbell said it took downtown’s and Midtown’s revitalization and Detroit riverfront’s redevelopment “to spill over” to East Jefferson to make a difference.

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COLLEGES FROM PAGE 3

Senate since it was reported out of committee a year ago, and he said last week that he doesn’t yet have enough votes for passage. And with just 25 days left on the session calendar, there may not be enough time to wrap them up. Still, the broader policy question isn’t likely to go away. Of the handful of subject areas Shirkey proposed authorizing in the Senate, nursing is the focal point. Language allowing colleges to offer bachelor’s degrees in nursing was introduced four years ago but taken out on the Senate floor to win necessary votes. Community college administrators believe the issue is about improving access — they want to offer more students the opportunity to earn a bachelor’s degree in career-ready fields, especially those who live far from a university or otherwise couldn’t afford to attend. Michigan in years past has had a nursing shortage, but community colleges are responding to what they say is a desire from hospitals to employ nurses with higher credentials. Opponents, mainly Michigan’s fouryear public and private universities, worry that they will compete with community colleges for students. They point to ongoing partnerships with two-year schools, from holding university classes on community colleges’ campuses to agreements that let students transfer credits. “I give them credit for wanting to broaden their base and scope, but I just think there’s a line and we finally crossed it,” said Farrington, adding that he attended Macomb Community College before earning degrees from Walsh College. “It filled a void, but that’s a lot different than the next step, which is literally competing.” Robert LeFevre, president of Michigan Independent Colleges & Universities, which represents nonprofit and

private universities, said he believes there would be a “high probability” of a lawsuit challenging Shirkey’s Senate bill if it were to pass. Said Shirkey of the House legislation: “It’s mostly a gesture of those who are opposed to what I’m trying to accomplish saying, ‘We’ve got to kill this thing.’”

A financial matter In the 2015 fiscal year, property taxes made up 34 percent of community colleges’ operating revenue, according to state financial data compiled for Michigan’s 28 public two-year schools. That year, colleges took in nearly $531.5 million in local dollars, up from nearly $522 million the year before. Tuition and fees are their largest revenue source, at 41.2 percent last year. State aid makes up much of the rest. The Senate Fiscal Agency, in an analysis of Shirkey’s bill, said community colleges’ locally elected boards would have to decide whether to cover the extra costs of operating a fouryear program by charging higher tuition and fees to all students or just those enrolled in bachelor’s degree programs, or by spreading the costs within the existing budget. Those financial decisions would be more challenging under the House bills, because colleges “would need to make up one-third of lost revenues or drop the baccalaureate programs,” according to a House Fiscal Agency analysis. “It would basically cause no community colleges to want to go down that road,” Shirkey said. “It’s a punitive bill intended to be so.” Daniel Hurley, CEO of the Michigan Association of State Universities, said expanding the mission of community colleges would be an inefficient use of taxpayer resources because Michigan already has 15 public universities that offer bachelor’s degrees. Community colleges doing the same, he said, would be an unnecessary service duplication when collaboration between the two systems could serve students just as well. To date, only four such schools offer bachelor’s degrees. They include Schoolcraft College in Livonia, which launched a culinary arts degree program; Northwestern Michigan College in Traverse City, which offers a maritime technology degree; and Jackson College in Jackson County and Lake Michigan College in Berrien County, which both teach energy production technology. Including Michigan, 23 states have given community colleges some authority to offer bachelor’s degrees, according to the Washington, D.C.-based trade group Ameri-

INDEX TO COMPANIES

These companies have significant mention in this week’s Crain’s Detroit Business: AlixPartners ........................................................ 32

Glacier Hills .......................................................... 29

Altair Engineering ............................................... 26

Health Alliance Plan ............................................. 6

Beautiful Bridal with Keasha ...............................3

Honigman Miller Schwartz and Cohn LLP ...... 32

Belfor Holdings ................................................... 26

International Automotive Components Group . 26

Beringea LLC ........................................................ 26

Jefferson East ........................................................3

BioStar Ventures ................................................. 21

Kosch Dining Solutions ........................................ 1

Bissell Homecare ................................................ 26

Lear ....................................................................... 26

Blue Cross Blue Shield of Michigan ..................30

Mectron Engineering .......................................... 28

Cooper-Standard Automotive ......................... 26

Michigan-China Innovation Center ....................5

Davey Golf ............................................................... 1

Michigan Corporate Relations Network ............7

Dayco Products LLC ........................................... 26

MSD Stamping ...................................................... 4

Deshler Group ....................................................... 4

NSF International ............................................... 26

Domino’s Pizza .................................................... 26

Priority Health ....................................................... 6

Federal-Mogul ..................................................... 26

Raleigh Officentre .............................................. 28

Federated Insurance ............................................ 6

TI Automotive ..................................................... 26

Fiat Chrysler ........................................................ 34

Trinity Senior Living Communities .................. 29

Foley & Lardner LLP ........................................... 32

TTI Global ..............................................................27

Fragomen, Del Ray, Bernsen & Loewy PLLC ....10

United Methodist Retirement Communities .. 29

General Motors ................................................... 34

Varsity News Network ....................................... 24

George P. Johnson Co. ........................................ 26

Waterfront Petroleum Terminal ......................... 1

can Association of Community Colleges and the Education Commission of the States. Just 65 of the more

than 1,100 U.S. community colleges offered one in 2014. The movement toward giving twoyear schools more degree-granting authority began in 1989 with West Virginia and continued throughout the 1990s, according to an April 2015 analysis from the Education Commission of the States. Many states restrict the number and type of degrees to certain programs, and some limit the number of schools that can award them. How it’s done varies by state. In California, for instance, lawmakers approved a pilot program in 2014 that allows 15 community college districts to offer a single degree program that could meet a specific workforce need, though the program couldn’t also be offered at a nearby state university campus. Florida’s legislature in 2001 limited the number of community colleges that could award fouryear degrees; it expanded the program in 2008 but required colleges to get approval from the state board of education and consult with four-year universities. Schoolcraft College wants to expand its nursing program to award bachelor’s degrees, spokesman Frank Ruggirello said. The two-year program has about 130 students per class, with a wait list. Schoolcraft this fall will charge $102 per credit hour to in-district students, who live within the jurisdiction of Livonia, Clarenceville, Garden City, Northville, Plymouth-Canton and part of Novi public school systems. Ruggirello said the tuition rate would not increase for nursing students in their third or fourth years of a bachelor’s program; the college also did not increase tuition for students enrolled in its new culinary arts bachelor’s degree program. “Is the funding issue a lot of political bluster? Probably,” Ruggirello said of the House bills. “If we were allowed to offer bachelor’s degrees, we would be really judicious in the areas we chose to do it.” Just because they could offer higher degrees, though, doesn’t mean they would: Oakland Community College administrators said the college does not plan to create bachelor’s degree programs because of its proximity to four-year universities, though the concept makes sense in more rural areas. “First of all, we wouldn’t ask for more state aid, and second of all, there isn’t a lot of state aid to go around,” said Mike Hansen, president of the Michigan Community College Association, which represents all 28 public community colleges. The budget Gov. Rick Snyder recently signed for the 2017 fiscal year that starts Oct. 1 includes a 1.4 percent funding increase for community colleges, which equates to $4.4 million. “None of the community colleges yet have gone out and said, ‘We’re offering baccalaureate degrees, so now we have to raise your property tax revenue,’” Hansen said. Hansen said colleges view the programs they want to offer as “occupational degrees,” in demand by employers looking to fill gaps in their

workforce. Hospital systems across Michigan are on record supporting the Senate bill, in particular its nursing provision. Critics argue the language in Shirkey’s legislation is too broad, and that allied health and information technology are vague terms that encompass numerous programs. “Tell me any college right now — (a) four-year institution — that doesn’t offer information technology,” Farrington said. “We went from a slippery slope to a full-on dive in the pool.”

Constitutional question Some opponents say the broader policy question is irrelevant because the state constitution doesn’t allow community colleges in their present form to offer any four-year degrees. The 1963 constitution spells out governance requirements for the state’s three research universities, the University of Michigan, Michigan State University and Wayne State University; for “other institutions of higher education established by law having authority to grant baccalaureate degrees,” generally the state’s other public universities; and for community colleges. Universities argue that the document calls for higher education institutions allowed to grant bachelor’s degrees to have governor-appointed boards, while community colleges are governed by locally elected boards with oversight from the state board of education. Universities also can’t collect local property taxes. Opponents say community colleges would have to be subject to the same requirements as other public universities if they want to offer bachelor’s degrees, including dropping their local boards and millages. “Our position has always been constitutional,” said LeFevre, of the independent colleges association, who added that Farrington’s bill doesn’t go far enough and should also eliminate colleges’ local boards. “The baseline question is can they (offer bachelor’s degrees), and our position is no they cannot, not in their current structure.” In 2012, LenWolfe, a Lansing-based attorney with Dykema Gossett PLLC, presented research his firm conducted on behalf of public universities during the first round of bachelor’s degree talks that reviewed the state constitution, convention records, case law and other opinions. His findings were that expanding community colleges’ degree-granting authority would create conflicts related to how colleges are governed and raise concerns about the fate of community colleges and their taxing power. “It’s a legislative powers case, like a lot of these cases,” said Wolfe, who added that constitutional convention records clearly show “that these were really two different types of schools and that they were complementary to each other.” Yet the document does not specifically state that community colleges should only be allowed to award associate degrees, Hansen said. If that were the intent of the framers in 1963, he added, “I don’t know why they didn’t spell it out that way. ” Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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38

WEEK

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

ON THE WEB JULY 2-8

Wayne County Detroit Digits moves forward with jail project 4

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

W

ayne County is moving forward with plans to complete its unfinished jail in downtown Detroit after reaching a settlement with the original design engineers and architects and hiring a consultant to oversee the project. The Wayne County Commission approved a settlement with Detroit-based AECOM and Dearborn-based Ghafari Associates LLC, which provides the county with a $2.5 million payment from the two firms, ownership of all design documents and dismissal of all counter claims against the county and the building authority. Still up in the air is an effort by businessmen Tom Gores and Dan Gilbert to build a soccer stadium at the 15-acre site.

COMPANY NEWS n More than 40 metro Detroit

Wendy’s Co. restaurants are among

more than 1,000 of the Ohio-based chain’s outlets nationwide potentially affected by hackers being able to steal customers’ credit and debit card information. A list of sites and more information are at wendys.com. n A group of investors led by Quicken Loans Inc. Chairman Dan Gilbert was expected to offer a third and final bid for internet pioneer Yahoo Inc., Redcode.net reported. The bid was reportedly being backed by billionaire investor Warren Buffett. Experts predicted bids between $3.5 billion and $5 billion. n Pamlico Capital, a Charlotte, N.C.-based private equity firm, has taken a majority ownership stake in Southfield digital promotions company PrizeLogic. Details were not immediately disclosed. n Reclaim Detroit got the green light from the city to establish a deconstruction center in a former parks and recreation storage building in Midtown. The Highland Park warehouse the nonprofit had been renting was destroyed by fire in February. n Robert Elmes, founder of

The number of locations for Dearborn-based Westborn Market Group once it opens a new site in Plymouth on July 14. The downtown market will join Westborn locations in Berkley, Dearborn and Livonia.

68

The number of employees slated to be laid off by Ontario-based Martinrea International Inc. next month at its Detroit subsidiary, Martinrea Hot Stampings Inc., according to a notice filed to the state of Michigan, as Fiat Chrysler discontinues production of certain models.

150

The approximate number of employees to be hired for the new Wahlburgers restaurant, owned by actor Mark Wahlberg and his family and scheduled to open in Greektown later this month. Hundreds of prospective employees turned out last week for a job fair for the restaurant.

Brooklyn-based Galapagos Art Space, said he plans to transform a

128,000-square-foot building he owns near Corktown into a workspace for artists and a retail incubator in a venture called Commonwealth Detroit. n American Girl will open a temporary boutique in Twelve Oaks Mall in Novi on Aug. 6. It will be the first location in Michigan for the doll maker and retailer, a subsidiary of El Segundo, Calif.-based Mattel. n Detroit is one of five Goodwill Industries organizations to be awarded part of a $4.5 million U.S. Department of Labor grant to establish LifeLaunch, a program to help young adults exiting the criminal justice system with education and employment services. n Four organizations were awarded federal Head Start and Early Start grants to provide the

CITY OF DETROIT

The city of Detroit is seeking partners to convert more than 10 acres of vacant land to ecological, agricultural, energy, crop and other uses within a neighborhood context, according to the RFP.

programs for children in Wayne County outside of Detroit over the next five years. The awardees are Wayne Metropolitan Community Action Agency, $36 million; The Guidance Center, Southgate, $33.2

million; Wayne County, $29.5 million; and Starfish Family Services, Inkster, $22 million.

OTHER NEWS n The city is targeting a quarter square mile of northwest Detroit for large-scale improvements with the release of two requests for proposals for 100 vacant houses and 257 vacant lots between Marygrove College and the University of Detroit Mercy. The properties are Fitzgerald neighborhood houses to be demolished or rehabilitated and vacant lots to be turned into “produce landscapes,” according to a city news release. Responses to the RFP are due Aug. 26; respondents are expected to be notified by Sept. 30. n Visitors to Detroit’s Mexicantown will be able to navigate its main street businesses and restaurants more easily with a printed and digital marketing brochure available starting in September. The brochure will be possible through the Southwest Detroit Business Association and the Mexicantown Community Development Corp.’s MexicantownHubbard Communities Main Street program. n The National Highway Traffic Safety Administration asked the Pennsylvania State Police for information about a July 1 Tesla Motors Co. rollover crash that involved Albert Scaglione, owner of Southfield-based Park West Gallery, and his son-in-law — the latest incident spotlighting the safety of Tesla’s Autopilot driver assist technology, Bloomberg reported. The Detroit Free Press quoted a police officer as saying the driver had told him the self-driving system was engaged when the accident occurred near Bedford, Pa. Tesla said it had no evidence of whether or not the system was activated. Attempts to reach Scaglione were unsuccessful. n The Kensington Hotel in Ann Arbor, formerly the Kensington Court Ann Arbor, is undergoing a multimillion-dollar renovation to modernize its guest rooms, hallways, restaurant, pool area and meeting spaces. n Planned renovations this summer to the Detroit-Windsor Tunnel are being delayed until 2017 so the project can be re-engineered, officials said. n After being let go from WJBK-TV2 in March, longtime entertainment reporter Lee Thomas returned to Fox 2. He will primarily report for the morning program “The Nine,” although that role may expand to include more days as well as reporting for other programs, a station spokesman said.

RUMBLINGS Community policing may get sharper focus

P

ublic furor over police shootings of black Americans, coupled with the sniper shootings that killed five officers in Dallas last week, may cause police departments nationwide to refocus on community policing principles. Research suggests increasing the presence of officers in communities, on foot or bike, and not in a vehicle, greatly reduces the fear of crime and policing, said Harry Dolan, former chief of the Grand Rapids Police Department and now CEO of Raleigh, N.C.-based firm Dolan Consulting Group LLC. But following the terror attacks of 9/11 and other terrorism-related incidents, police departments shifted training resources to shootings — at the expense of community-policing techniques and training. In Detroit, Police Chief James Craig has touted communitypolicing since arriving from Cincinnati in 2013. He launched the Neighborhood Police Officers Program in 2014 to get to know businesses, residents, churches and neighborhood groups in their assigned precincts. The program has been credited with improving

the trust of Detroit residents. Additional training for officers has focused on defusing volatile situations officers encounter. The chief also initiated community advisory groups within each precinct to meet regularly with the captains in those districts, said Cathy Govan, executive director of the Detroit Public Safety Foundation, which raises money to support police programs not covered by city budgets. Dolan, who served as the chief in Grand Rapids from 1998 to 2007, agrees that working with business in city neighborhoods can help boost community policing efforts. “Businesses have established incredible mechanisms to reach people,” Dolan said. “They can play a vital role in coordinating information sharing and support these initiatives beyond the resources available to local (police) departments.” Dolan and his consulting firm are hosting a training session, called “Community Policing: Winning Back Your Community,” on Aug. 3 at the Velocity Center in Sterling Heights. Tickets are $195. For more information, go to dolanconsultinggroup.com.

The Detroit Zoo is beginning its campaign push for a 10-year renewal of the one-tenth-mill that property tax voters in Wayne, Oakland and Macomb counties approved in 2008 to support the zoo’s operation.

Detroit Zoo begins millage renewal push Tigers and birds and frogs are coming to a lawn near you. The Detroit Zoo is beginning its campaign push for a 10-year renewal of the one-tenth-mill that property tax voters in Wayne, Oakland and Macomb counties approved in 2008 to support the zoo’s operation. Renewal of the millage, which amounts to about $10 for a home worth $200,000 and expires in 2018, goes before voters in the three counties on Aug. 2. The zoo is hoping the animal lawn signs — which were very popular the first go-round, according to zoo CEO Ron Kagan — will help do the trick once again. In the campaign for the millage renewal, the zoo is posting information on its website and social media and conducting media interviews about its impact, including its growth from about 1 million visitors in 2008 to

1.5 million last year, and updates since the millage passed, Kagan said. With the current millage, the zoo initially expected to get just under $15 million per year in tax revenue to support its operations. But the amount it’s taken in has fallen short in the years following the housing collapse and recession. The zoo now receives just over $11 million each year from property tax revenue, Kagan said. Even so, the zoo decided seeking an increase wasn’t the right path to go, he said. But with the millage revenue representing just under a third of the zoo’s $35 million budget, a renewal was. “The tri-county (area) has been very clear it values culture and understands the need for a modest amount of money for the zoo and (Detroit Institute of Arts),” Kagan said. “The polling we did last year and early this year all suggests the public still feels very strongly about the zoo and the millage.”

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