Crain's Detroit Business, Aug. 15, 2016 issue by Crain's Detroit Business

Atlas Oil founder Sam Simon builds investment war chest from funky Birmingham digs, Page 12

AUGUST 15 - 21, 2016

ANDREW HARNIK/AP

EVAN VUCCI/AP

Hillary Clinton

No biz consensus

TAXES n Impose a 4 percent surcharge on taxpayers making more than $5M per year. n Eliminate tax “loopholes” for carried interest, IRA funding and corporate inversion.

Trump, Clinton unveil economic plans in metro Detroit to mixed reviews

n Reduce estate tax exemption to 2009 levels of $3.5M from $5.45M.

By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

n Tax wealthy people of to-be-determined value at least 30 percent in income tax. n Impose exit tax on U.S. companies establishing a foreign tax domicile. n Undisclosed plan to lower tax compliance burdens for small businesses. TRADE n Repeal Trans-Pacific Partnership. n Appoint chief trade officer and triple trade enforcement staff. n Impose tariffs on countries that break the rules of trade agreements.

This year’s historic presidential election, starring two of the most polarizing candidates in memory, has taken on a populist tone as the major-party candidates appeal to working- and middle-class voters. Yet business is paying attention to Donald Trump’s and Hillary Clinton’s positions on jobs and the economy — particularly regarding corporate taxation and global trade — since the outcome in November will determine the direction of some business decisions. Some Michigan political leaders already have taken sides. Three former governors — Democrats

Jennifer Granholm and James Blanchard, and Republican William Milliken — are backing Democratic nominee Clinton. Sitting Republican Gov. Rick Snyder has declined to endorse Republican nominee Trump, though Lt. Gov. Brian Calley, Attorney General Bill Schuette and Michigan Republican Party Chairwoman Ronna Romney McDaniel have. Former GOP presidential nominee Mitt Romney has said publicly he will not vote for either candidate. The West Michigan-based DeVos family, among the state’s top Republican donors, has not given money to Trump and has not donated to any candidate since the spring primaries, according to SEE ELECTION, PAGE 16

Donald Trump TAXES n Reduce number of tax brackets from seven to three. n Eliminate carried-interest “loophole.” n Reduce the federal corporate income tax to 15 percent from 35 percent. n Temporary moratorium on all new regulations from federal agencies. n 10 percent tax on offshore income to entice corporations to repatriate funds. n Repeal the estate tax. TRADE n Repeal Trans-Pacific Partnership. n Impose a 45 percent tariff on imports from China. n Enforce stronger intellectual property and cybersecurity measures against China. n Renegotiate NAFTA.

‘No more Band-Aids’: I-75’s $1 billion reconstruction project kicks off By Blake Froling bfroling@crain.com

The massive $1 billion I-75 modernization project set to begin this week that may have commuters pulling their hair out has businesses getting ready for headaches, too. Some companies expect they’ll let some employees work flexible schedules or telecommute more of-

ten to keep up productivity and morale. Others are dreading more practical problems, such as shipping or delivery. The first phase of the widening and reconstruction project will kick off at 9 a.m. Monday from Coolidge Highway to South Boulevard and will eventually extend from Eight Mile Road to just south of M-59.

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Further segments of the project are scheduled to continue into 2030. The years of congestion and construction could inconvenience the more than 100,000 people who use the area’s main artery of transportation every day. The first of eight segments is being paid for with a two-year, $90.8 million investment, 80 percent of which comes from the Federal Highway Administration. Construction is starting by the Square Lake Road interchange because it is one of the most dangerous on I-75, resulting in about 600 accidents during a five-year study by the Michigan Department of Transportation. The interchange will be reconfigured so that all entrances and exits will be on the right side instead of the left.

I-75 lane closings When: Starting 9 a.m. Monday. Where: I-75 north and south between Coolidge Highway and South Boulevard. What: Southbound right lane will be closed for shoulder improvements; northbound right lane will be intermittently closed for shoulder improvements. Why: Shoulders are being improved for future traffic shifts to allow reconstruction work on the highway and modernization of the Square Lake Road interchange. First will occur in mid-September, moving the northbound lanes to the southbound side until mid-December; southbound lanes will move to northbound side in spring 2017 until November 2017.

The northbound I-75 bridges over Adams Road and Square Lake Roads will be replaced, as well as the Squirrel Road overpass above I-75. In total, 47 bridges will be replaced

and four will be newly built over the course of the project. “There’s no more Band-Aids, folks. There’s nothing more we can SEE I-75, PAGE 17

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MICHIGAN

MICH-CELLANEOUS n Virginia Tech researchers who

BRIEFS Water filter copies keep Whirlpool lawsuits flowing

One replacement part — a $50 refrigerator water filter — has been the subject of some 40 lawsuits filed by Benton Township-based appliance maker Whirlpool Corp. According to a Bloomberg report, the company has used a Texas court, known as the venue of choice for people trying to win patent cases, to sue retailers that sell knockoff filters for half the price of Whirlpool’s. Since last September, after Whirlpool noticed a sudden emergence of the non-Whirlpool filters in 2015, it has been filing patent-infringement lawsuits in Texas, claiming companies are selling unauthorized replacement parts for its refrigerators — including the water filter cartridges. By suing retailers, Whirlpool is borrowing a tactic from computer printer makers that try to block the sale of unauthorized toner cartridges, and from automakers that sometimes try to fend off sale of refurbished replacement parts. Most of the cases focus on a single patent, issued in 2006 and transferred to Whirlpool in 2007. Companies that have filed responses to the

exposed the lead problem in Flint say the city’s water quality has greatly improved, based on tests at 162 homes, AP reported. Researchers said last week that 45 percent of homes tested in July showed no detectable levels of lead. The head of the team, Marc Edwards, said the situation is “dramatically better” than last year when he sounded the alarm over lead due to a lack of corrosion controls. Edwards said Flint residents should continue to keep filters on their kitchen taps or use bottled water until officials say unfiltered water is OK. Meanwhile, the Battle Creek-based W.K. Kellogg Foundation is giving $7.1 million to Flint nonprofits and organizations supporting efforts to recover from the crisis. n Midland-based Chemical Financial Corp.’s $1.4 billion acquisition of Troy-based Talmer Bancorp Inc. will head to a close this fall after securing approval last week from the Federal Reserve Board, MiBiz reported. The deal would create the largest bank headquartered in Michigan, with $16 billion in assets. n Grand Rapids-based Advance Packaging Corp. has spent $8 million on new production space, and is on track to spend another $8 million on expansion in 2017, MLive.com reported. Some of the new business is from popular Comstock Township-based Bell’s Brewery, for which Advance makes corrugated packaging for 12- and 24-pack cases. n Grand Rapids Metrology Inc., the

lawsuits say the patent, and others asserted in some of the cases, are invalid or weren’t infringed.

Diners get charge out of under-the-table device A Grand Rapids restaurant, Kitchen 67: An American Bistro, is the first

in the Midwest to try out next-generation wireless charging technology developed by Grand Rapids-based Gill Electronics. Kitchen 67 is one of a handful of eateries nationally to offer customers wireless tabletop charging for phones and tablets, MLive.com reported. State-of-the-art resonant TesLink wireless charging stations were recently installed by Gill at the restaurant. The devices, placed underneath seven booth tables, let customers set their phones or tablets anywhere on the table, for instant charging while dining. “Customers are going crazy over them,” said restaurant owner Johnny Brann Jr. “It’s different and better.” The wireless chargers have applications in airport terminals, hotels, vehicles and other uses, and in recent months have entered the hospitality and restaurant marketplace.

state’s largest provider of measurement products and services, has acquired the Michigan operations of West Virginia-based Kanawha Scales and Systems, MLive.com reported. n The Michigan Agency for Energy and Michigan Public Service Commission sent a letter to the Midwest’s electricity transmission operator, Midcontinent Independent System Operator, to determine how vulnera-

ble Michigan is to power outages in emergency situations. They are asking for a study looking at the effects of decommissioning some coalfired generation units and possible future outages at state nuclear energy facilities on electric reliability. n The state announced that parents will be able to make child support payments at thousands of 7-Eleven or Family Dollar stores throughout the country. Customers will pay a $1.99 fee and must have access to a computer or smartphone before going to a store to make the payment, AP reported. Instructions are at www.misdu.com. n In a filing last week, Michigan Attorney General Bill Schuette urged a federal appeals court to restore the state’s ban on straight-party voting in the fall election. Saying the law “imposes a minimal burden” on voters,

INSIDE THIS ISSUE

BANKRUPTCIES ................................18 CLASSIFIED ADS...............................15 DEALS & DETAILS.............................14 KEITH CRAIN....................................... 6 OPINION .............................................. 6 OTHER VOICES ................................... 6 PEOPLE ...............................................14 RUMBLINGS .......................................19 WEEK ON THE WEB ..........................19

COMPANY INDEX: SEE PAGE 18 Schuette wants the appeals court to suspend an injunction issued by a Detroit federal judge, who said the ban violates the rights of black voters. n A Michigan State University program is turning storm-damaged and other felled campus trees into tables, chairs, picture frames and works of art, AP reported. Officials said the “MSU Shadows” program provides a sustainable alternative to turning trees into wood chips or putting debris in a landfill. The items are sold at the surplus store on campus and online, with proceeds going toward planting new trees, supporting student internships and developing academic programs in urban forestry.

Correction n A Deals & Details item in the Aug. 8 issue of Crain’s about a MedNetOne Health Solutions program incorrectly listed it as new service, omitted that it was recently recognized by the Centers for Disease Control and listed an incorrect location for the business, which has a mailing address in Rochester.

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Detroit Sports Commission bids for 15 NCAA finals Top-division basketball, hockey among proposals By Bill Shea bshea@crain.com

KENSINGTON CHURCH

Kensington Church extends its growth by adding to its roster the Bay Pointe Community Church (above) in Traverse City, where it recently held a service.

Northern light

Troy-based Kensington Church follows parishioners’ up north wish, expands to Traverse City By Sherri Welch swelch@crain.com

Troy-based Kensington Church has absorbed Bay Pointe Community Church in Traverse City, establishing its first campus in northern Michigan and continuing its rapid expansion. The addition gives a footprint up north to the nondenominational church that is growing through a strategy one of its leaders describes as “a little bit like a franchise model.” Bay Pointe legally transferred its assets, including a roughly 40,000-square-foot church on the

west side of Traverse City, along with a $2.4 million mortgage, to Kensington on July 1. The official launch of Kensington Traverse City is set for Sept. 11. Several years in the making, the deal came together after Kensington contacted Bay Pointe to say it was considering a permanent campus in the city. “There were some people who were Kensington folks down here in the Troy area who had (Traverse City) on their mind and on their hearts for a long time,” said Greg Gibbs, Kensington’s director of organizational advancement.

Some were thinking of having the same church to attend when they were up north vacationing, he said. But the majority “ ... who have come to God or come back to God ... want that same thing for their family, friends and business associates” up north. The conversation evolved between 2013 and 2014 into a merger of the two churches, given their common, classical Christian teachings and beliefs, he said. Founded in 1990, Kensington Church has six metro Detroit locations and a national campus in Orlando, Fla. Its campuses in Troy

and Orion Township are permanent; it also holds services in rented sites — typically high schools — in Birmingham, Clinton Township, Shelby Township, Clarkston and Orlando. Kensington has grown to a weekend attendance of more than 13,000 people across its seven campuses. It’s helped to establish 53 other nondenominational churches across the U.S. and has relationships with nine global organizations that establish churches around the world. SEE CHURCH, PAGE 15

Roco builds portfolio with deal-by-deal financing By Kirk Pinho kpinho@crain.com

Roco Real Estate Inc., for the time being, is bucking what would be a logical next step in its growth trajectory. The Bloomfield Hills-based multifamily real estate investment company, started just four years ago, has expanded its ownership portfolio nearly 800 percent since April 2013. But rather than starting a large investment fund now that it has a track record and a substantial portfolio under its belt to finance acquisitions of what it deems undervalued apartment buildings across the country, the company is sticking

with its tried-and-true financing strategy of securing funding deal by deal. David Colman, the 30-year-old Roco principal who started the company with his brother and another set of brothers in 2012, said real estate investment funds typically have 10-year terms and five- to seven-year ownership periods for the real estate they purchase. And Roco, he said, has a much longer-term investment and ownership strategy.

“We want to invest in our communities and our people,” he said. “Our investors and us want consistent quarterly cash flow from these

properties with a long-term capital appreciation. The short-term flip model is dangerous a lot of times.

VENTURE PHOTOGRAPHY

From left to right: David Colman, Michael Colman, Tyler Ross

SEE ROCO, PAGE 15

The Detroit Sports Commission on Friday submitted 54 applications to bring 15 college championships in nine sports to the region in coming years, including NCAA basketball, hockey, wrestling and football across different divisions. The nonprofit commission, in charge of seeking amateur and college events for the area, had to submit requests to host the events by Friday. It said it is seeking events in conjunction with the Univer-

sity of Detroit Mercy, Oakland University, the University of Michigan, Michigan State University, Wayne State University, Adrian College, Olympia Entertainment and the Detroit Lions.

The NCAA in February released its championship site bid specifications for the four academic years from 2018-19 to 2021-22. Finalists will be announced Oct. 26 and winning sites on Dec. 7. Separately, Palace Sports & Entertainment said Friday it has also submitted bids, with support from the commission, for the 2018-22 men’s basketball tournament’s First Four, first and second rounds, and regionals, along with the women’s basketball regionals, and the women’s volleyball and men’s wrestling championships in those years. Those events would be held at the Palace of Auburn Hills. Among the commission’s own applications are to host the first and second rounds, and regionals, for the 2019-22 men’s Division I basketball tournaments. UD Mercy and Oakland would be the host schools for those events, and the site would be the new Little Caesars Arena, which will open in September 2017 in Detroit. The other Division I applications SEE SPORTS, PAGE 18

MUST READS OF THE WEEK Paging Dr. iPad

Blues switch

Telemedicine slowly gains currency as companies

Insurer sells larger-group plans to PEOs;

try to offer convenience, save money, Page 8

potential savings for small biz, Page 4

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Blue Cross offers small businesses option to join lower-cost large group health plans By Jay Greene jgreene@crain.com

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Blue Cross Blue Shield of Michigan is expanding its health plan offerings by contracting in unusual arrangements with AccessPoint, CoStaff Services LLC and Trion Solutions, three Southeast Michigan-based staffing and professional employer organizations that serve small and medium-sized companies. Under arrangements with the Blues, the three PEOs will soon be able to offer their small-business clients access to Blue Crossâ&#x20AC;&#x2122; large group health plans at a lower price than small-group rates. Over the past several years under health care reform, some small businesses have seen their health insurance prices jump 10-30 percent, experts said. â&#x20AC;&#x153;We made a decision to enter into a contract with the three PEOs. They met the criteria we designed,â&#x20AC;? said Sandy Fester, vice president of middle and small-group businesses at Detroit-based Blue Cross. The contracts with Troy-based Trion and AccessPoint in Farmington Hills begin Oct. 1, and the one with Southfield-based CoStaff starts Nov. 1, she said. â&#x20AC;&#x153;The Affordable Care Act has served as a catalyst to PEO growth, and we have made a business decision to further consider this market,â&#x20AC;? Fester said. For example, Fester said, Blue Cross has contracted with ADT Corp. since 2004 in a successful business model. She said Blue Cross projects to add another 4,000 members, additional revenue and contracts through the PEO health plans. â&#x20AC;&#x153;We have competitors (at least two) that do arrangements like this,â&#x20AC;? she said. â&#x20AC;&#x153;We had to decide to take the legacy approach or change.â&#x20AC;? Blue Cross and Priority Health are the only known health insurers that offer PEO contracts. Aetna Inc. is considering contracting with PEOs, experts said. Spokespersons for Health Alliance Plan and United Healthcare said they do not contract with PEOs. Aetna was unavailable for comment. Priority Health says it serves a handful of PEOs representing between 5,000 and 10,000 members. Greg Packer, CEO of AccessPoint, said the PEO and human resource management company has been working to develop the program with the Blues for several months. He said AccessPoint had a contract with HealthPlus of Michigan before its commercial business was sold to HAP. â&#x20AC;&#x153;We handle the open enrollment process for our small groups, and they have been seeing 10 percent to 20 percent increases in premiums and have been frustrated with us,â&#x20AC;? said Packer, who became CEO in 2002 and also founded a similar company, Novi-based Amstaff, which was sold to ADT in 1997. â&#x20AC;&#x153;They want help with their health care issues. We think the savings for the small-business community will be in the 5 percent to 10 percent

range,â&#x20AC;? said Packer, adding that he projects adding 2,000 additional covered lives. Under the Affordable Care Act of 2010, the PEO industry has grown tremendously as small businesses have sought assistance with the regulations and the lower-cost health insurance options, according to the National Associa-

â&#x20AC;&#x153;The main advantage to the small group is they will pay level community rates instead of member level,â&#x20AC;? said Mike Krause, president of Krause Benefits in Farmington Hills. Community level, or composite rating, allows uniform rates for single employees and families. Member-level rates are calculated on the age of employees and their depention of Professional Employdents, geography and toer Organizations. bacco use. Greg Packer: This is because the PEO Possible savings of Krause said small-busibusiness model allows a 5-10% for small ness groups need to assess â&#x20AC;&#x153;co-employment relation- businesses. the level of service beshipâ&#x20AC;? between the employer tween PEOs and the tradiand the PEO, said Packer. Other ser- tional broker-agents. vices include human resources serâ&#x20AC;&#x153;I have lost clients to (PEOs), and vices, including payroll, billing, re- they have come back to me because cruiting and compliance, he said. the service was not good,â&#x20AC;? Krause In health insurance, PEOs can con- said. solidate risk and combine smallFester said the three PEOs under group employers to make them a Blue Cross contract are interested in large employer for underwriting, but working with agents and developed only if they find a health insurer will- compensation programs for them. ing to do that, Packer said. Over the past five years, AccessUnder Obamacare in Michigan, Point has grown to more than 400 small groups are defined as organi- clients in the U.S., with about 85 zations with two to 50 employees. percent based in Michigan, repreFor several reasons, premiums for senting about 5,000 employees. Jay Greene: (313) 446-0325 small businesses generally are highTwitter: @jaybgreene er than larger groups.

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Fire closes St. Clair DTE power plant By Jay Greene jgreene@crain.com

The fire that shut down DTE Energy Co.â&#x20AC;&#x2122;s coal-fired St. Clair Power

Plant in East China Township last week isnâ&#x20AC;&#x2122;t expected to affect overall electric capacity in Southeast Michigan. Some 50 workers were at the plant in St. Clair County at the time of the fire and all escaped within five minutes without injury, the company said. A total of 294 workers are employed at the plant, which was built in 1953. Workers will be reassigned to other DTE facilities while the plant is closed, the company said. â&#x20AC;&#x153;There are no injuries and no threat to the community. Everyone is safe,â&#x20AC;? DTE said in a statement. â&#x20AC;&#x153;DTE teams successfully invoked emergency procedures and shut down all generating units at the site while working with first responders to successfully control the situation.â&#x20AC;? The St. Clair plant is one of three DTE coal-fired facilities scheduled to be closed over the next seven years. The other two plants to be shut down are at River Rouge and Trenton. The plants together generated about 25 percent of electricity produced by the utility in 2015, enough to power 900,000 homes, according to the company. The utility said it will replace them with a mix of newer, more modern sources such as wind, natural gas and solar. The blaze started about 6:30 p.m. Thursday as one of six coal-fired generation units that produces electricity inside the facility caught fire, the utility said in a statement. No other explanation was given by the company. News reports quote witnesses as saying they heard a loud explosion at the plant before they saw the smoke. DTE denies there was an explosion. â&#x20AC;&#x153;We expect the plant to remain closed and do not have an estimate at this time as to when the plant will reopen,â&#x20AC;? DTE said Friday. During the evening, black and gray smoke could be seeing for miles around the plant, which is on the St. Clair River at 4901 Pointe Drive. Nearly 100 firefighters from at least 30 departments responded. Any environmental damage was not yet clear Friday, although a joint statement by Valerie Brader, executive director of the Michigan Agency for Energy, and Sally Talberg, chairman of the Michigan Public Service Commission, expressed concern. DTE said air monitoring systems remain in place with â&#x20AC;&#x153;readings continuing to be well within normal limits outside the facility perimeter.â&#x20AC;? Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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OPINION

Political season: Don’t forget right to listen

hank goodness for the Olympics. The athletes give us something — and someone — to cheer for, and a welcome respite from this ugly political season. Both presidential candidates visited metro Detroit last week. Donald Trump spoke at a Detroit Economic Club lunch, and Hillary Clinton spoke at a Warren defense contractor. Both were theoretically “private” events, but only Trump was interrupted by women protesters who stood on chairs and screamed their protests, trying vainly to silence the candidate. Both candidates are wooing middle-class, working-class voters, promising platforms aimed at increasing better-paying jobs and changing trade policies that have been favored by both parties in the past. The messages were clearly worth hearing, particularly because both candidates are so polarizing to many. As Lindsay VanHulle reports on Page 1, Michigan will be a hotly contested state in November. It isn't surprising that many Economic Club members of all political stripes were chagrined that Trump was interrupted so many times; more than a dozen protesters were ejected, hoping perhaps that Trump would erupt in some kind of gaffe. We agree with Dan Gilbert, who tweeted: “When did it become un-American to listen to everyone whether you agree or not?” Gilbert also has attended a Clinton event, urging his Twitter followers: “Listen. Research. Analyze. Then form view.” Trump may not be our candidate, but he should have the opportunity to speak — without interruption — to allow listeners the chance to make up their minds. “The DEC has always been a nonpartisan forum for the respectful and professional debate and discussion of issues of the day,” the club’s COO, Steve Grigorian, told Crain’s. “We are disappointed an individual and his guests chose not to honor that tradition.” The club likely will tighten its procedures for future political speakers. Rashida Tlaib, a former state lawmaker and now activist at the left-of-center Sugar Law Center, may have been the bestknown of the protesters. We think the Economic Club should publicize the names of all the parties: the “member” who bought the tickets under false pretenses and his “guests” who were ejected. In this crazy political season, we increasingly value a newly endangered right: the right to listen.

Oral chemo fairness bill should be OK’d

acing a cancer diagnosis can be one of the scariest moments an individual can experience. There are many decisions that person has to make, such as “What treatment path will I follow?” “How will this affect my quality of life and the lives of my family and other loved ones?” and “How will this affect my job?” Now imagine having to pay hundreds or even thousands of dollars for monthly treatments, all because your health insurance plan covers your anti-cancer oral agents differently than it would intravenous chemotherapy. The last thing a person who has been diagnosed with cancer wants to think about is “Will this disease bankrupt me financially?” The Michigan Senate recently voted 36-1 in support of Senate Bill 625, the Oral Chemotherapy Fairness Bill. If passed by the state House of Representatives, it would ensure that cost sharing and treatment limitations for oral medication are no more restrictive than those for intravenous chemotherapy. We applaud the Senate for this move. With this bill, cancer patients who are prescribed anti-cancer oral agents to treat their disease would not have to worry about paying more out-of-pocket costs for that medication than they would for chemotherapy administered intravenously. But the problem is that orally administered anti-cancer agents are covered under an insurance plan’s pharmacy benefit, where many of these drugs are placed on a fourth or “specialty” tier. The average coinsurance rate for fourth-tier drugs is 28 percent, according to the Kaiser Family Foundation. So, if you’re pre-

OTHER VOICES Elisabeth Heath and William Mayer

Heath, M.D., is the Patricia C. and E. Jan Hartmann Endowed Chair in Prostate Cancer Research at the Barbara Ann Karmanos Cancer Institute and a Wayne State University School of Medicine professor. Mayer is president and CEO of Federation Care Network, a clinically integrated network of hospitals and providers. scribed an oral medication that costs $3,000 per month, this could mean more than $800 in out-ofpocket costs per month. This is in contrast to intravenously administered anti-cancer medications, which are typically covered under an insurance plan’s medical benefit. With this, most patients are responsible only for an office copayment for each episode of care and are not required to pay a separate fee for the intravenous drug. The out-of-pocket cost disparity between intravenous and oral chemotherapy can lead to patients being forced to make treatment decisions based on cost, not on what the doctor feels is most beneficial to them. That’s not a decision cancer patients should have to face. The American Cancer Society Cancer Action Network has found no evidence that this proposed leg-

TALK ON THE WEB

Re: Clinton pitches tax changes, investment in Warren speech

Re: Trump’s economic math: He still needs to show his work

All good ideas, but she will be blocked at every turn by the Republi-

The only way we will ever get a decent change is to clean house, vote out all the party members, Republican and Democrat, and get independents in for a few years. Then push for them to clean out the deadwood from the civil service and promote people on merit rather than time served.

cans just like Obama was unless the power shifts in Congress.

Rock & Roll 35

She has taken most of her ideas from Trump and Bernie. She just repeats what got a lot of applause.

Clgatwork

MarkYTH

islation has increased health insurance premiums in states with similar laws in effect. Both the Kansas State Employees Health Care Commission and the Indiana Department of Insurance have stated that there is no evidence that implementation of the states’ oral chemotherapy access laws have significantly increased health insurance premiums. Today, anti-cancer oral agents comprise about 10 percent of available therapies and roughly 25 percent of the medications in the oncology development pipeline. Certain new chemotherapies are available only in oral form. Patients on these oral medications can have more freedom to enjoy their families and the activities that brought them joy before their diagnoses. They can get on with the business of living. Now that the Oral Chemotherapy Fairness Bill has made it through the Senate, it is being studied in the House Insurance Committee. When legislators reconvene from their summer vacations, we hope that they take a long, hard look at how differences in insurance coverage of chemotherapy drugs affect cancer patients. We think cancer patients should be free to make treatment decisions based on their health care provider’s recommendation, not based upon what medication they can or cannot afford. We at the Barbara Ann Karmanos Cancer Institute and the American Cancer Society Cancer Action Network urge the Michigan House of Representatives to vote in support of the Oral Chemotherapy Fairness Bill. Allow cancer patients the freedom of choice.

Re: Eastern Market growth plan Expanding and modernizing it, while bringing in residential and retail, will make it one of the premier neighborhoods in America by 2025. BrewPubNate

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

Let’s not talk ourselves into a downturn

There is a lot of talk these days about a pending slowdown. The CEO of Ford, Mark Fields, is cautiously warning that Ford will have an economic slowdown soon. But at the same time, things in Detroit seem to be booming. Happily, Detroit seems to be ignoring all the potential gloom and doom. We are seeing a constant stream of good news, with new companies opening every week and old companies announcing that they are going to be relocating in Southeast Michigan.

KEITH CRAIN Editor-in-chief

It all sounds too good to be true. A lot of naysayers seem to be convinced that we are just around the

corner from another recession. Sadly, the news media seem happiest when they have something bad to write about. Economic growth doesn’t make for great headlines like firing hundreds of people or closing plants. They are the bad news bears. If enough folks cry “the sky is falling,” too many people will start to believe it. I am afraid that we have a real follow-the-leader mentality in our country. All we need is a bit of a nudge and a landslide begins. I am often reminded about the

man who owned a hot dog stand and business was very good. But when his Ivy League son returned home from college, the son told his father that a recession was about to start and business would be terrible. The father cut everything in anticipation of the downturn and sure enough, business dropped off. The father was very impressed with his son and his college education. Let’s not listen to the economists. They don’t run a business. They merely predict what will happen ...

maybe. If we are told that this strong economy will continue in Detroit, it certainly sounds reasonable to me. I don’t want to predict anywhere elsewhere in the world, but we should all enjoy our good fortune and work hard to keep it going indefinitely. The worst thing we can do is listen to that college kid who tells us all about doom and gloom. If we listen to him for too long, we can make it happen. That sure doesn’t make a lot of sense.

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Move to Crain’s proves you can go home again

I left my hometown of Detroit in 1985 to accept the only job I could find out of college, a cops and courts beat in Hot Springs, Ark. It eventually led me to Little Rock, where I covered a young governor named Bill Clinton. I got to know his wife, Hillary Clinton, too. In January 1993, while the Clintons traveled to Washington for his inauguration, my family moved, too: The Associated Press thought the few contacts I had in the Clinton world might prove useful on the White House beat. I’ve had a great ride in Washington — more lucky than good, and blessed with extraordinary editors and colleagues. Atlantic Media’s visionary owner, David Bradley, allowed me the privilege of working for National Journal and The Atlantic since leaving the AP in 2010. But now it’s time to start anew where I started out — to move back to Detroit, the place my wife, Lori, and I never stopped calling home. In the past three decades, we returned so often to visit our families in Michigan that our eldest daughter, Holly, born in Arkansas and raised in suburban Washington, decided after college to move to Detroit, where she has started a career and a family. Her younger sister, Gabrielle, attends Michigan State University College of Law. Their brother, Tyler, misses his sisters and extended family in Michigan. Our family cottage in Michigan’s northern woods stands empty too often. But there is more to this move than nostalgia. It comes with an exciting career change. In Detroit, I will be the associate publisher of Crain’s Detroit Business, a media brand devoted to telling the story of Southeast Michigan’s economic trials and transformation. For the first time in my lifetime, my hometown has a chance to rebound from decades of decline — thanks to the cooperative energies of political leaders like Mayor Mike Duggan, business leaders like Dan Gilbert and Christopher Ilitch, and an influx of purpose-driven entrepreneurs. It’s thriving because of people like Khali Sweeney, who uses boxing lessons to get kids into his after-school education program, and David Kirby, a Brooklyn-born millennial who defied political and economic conventions to open a local-foods market on Detroit’s gritty east side. Whenever I come home, whenever I talk to people like Sweeney and Kirby, I’m reminded of what my colleague James Fallows chronicled in his March cover story for The Atlantic. He found surprising sources of strength in every community that belie the grim portrait of America painted by opportunistic politicians and social scolds. “What Americans have heard about the country since Deb and I started our travels is the familiar chronicle of stagnation and strain,” Fallows wrote of the 54,000mile reporting trip he took with his wife. “The kinds of things we have seen makes us believe that the real

RON FOURNIER news includes a process of revival and reinvention that has largely if understandably been overlooked in the political and media concentrations on the strains of this Second Gilded Age.”

The real news in Detroit is revival and reinvention, and we’d like to be a small part of it. While I’ve written extensively about institutional reform and the unique optimism and purpose of the millennial generation, the bulk of my work in Washington has been focused on political corruption, dysfunction and decay. Even from Detroit, I hope to find the time, from time to time, to write for The Atlantic on the Clinton-Trump election. I’m proud of my work in Washington. But the action is at the local level, where innovation isn’t a talking point, it’s a way of life.

And so we’re moving to Detroit this fall. You can go home again. We will go home again, knowing the life we left behind 30 years ago is gone, but that we can help build anew. Each fall, my new company organizes a conference for hundreds of “expats” from around the globe, Detroit natives like myself who fled the city during its slow decline, which some date to the riots of 1967, Crain’s calls the conferences the Detroit Homecoming, and the next one begins Sept. 14, at the epicenter of the presidential campaign. I’ve attended before as an expat. This year, I will be home for it.

This column is reprinted with the permission from The Atlantic. Ron Fournier will begin his new post as Crain's Detroit Business associate publisher Sept. 6. Fournier, 53, is coming to Crain’s from Atlantic Media, where he served as editor-in-chief of the National Journal for two years and as senior political columnist for the National Journal and The Atlantic. Before joining Atlantic Media, Fournier was Washington bureau chief for The Associated Press and spent 20 years with the wire service. He is also the author of recent New York Times best-seller Love That Boy.

You do business where we do business. We should meet. At Huntington we believe that a stronger business community makes the whole community stronger. That’s why we work so hard to truly understand your business goals, and to deliver the insights that can get you there. We’re proud of the place we call home, and together we can make it even better.

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C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 5 , 2 0 1 6

SPECIAL REPORT: HEALTH CARE

Taking a dose of

telemedicine Employers see savings, increased productivity by offering remote diagnoses, treatment plans Stories by Jay Greene jgreene@crain.com

In an increasingly mobile world, the idea of seeing a doctor through your smartphone is becoming more common. And people are finding that it’s also helpful when family members are on the go or away from home. Becky McLaughlan, vice president with Troy-based Marsh & McLennan, and Cheryl Gambrell, vice president of human resources at TNG Worldwide, a beauty supply distributor based in Lyon Township, referred their children to telemedicine providers, and it paid off. McLaughlan’s daughter, Megan, 19, received an antibiotic for her strep throat, and Gambrell’s son, Zach, 22, received an antibiotic for his pink eye. “My son woke up one morning and his eyes were swollen with a lot of drainage. He registered with Teladoc, talked with a board-certified doctor, then uploaded a prescription for pink eye,” said Gambrell, who had previously registered and

signed up her family. “He had a tee time, had to go golfing. He picked up the prescription on his way home.” McLaughlan recently got a phone call from her daughter at Purdue University about a sore throat. “My daughter used telemedicine (at college for strep throat),” said McLaughlan. “She got a prescription (for antibiotics).” Three weeks later, after Megan returned home from college, she had a recurrence of strep. The Teladoc provider recommended she visit her primary care doctor for a closer inspection, which led to Megan’s tonsils being removed. McLaughlan, Gambrell and dozens of other employees and relatives working at growing numbers of companies in Michigan are finding access to telemedicine services from vendors like Teladoc Inc., MDLive and American Well or through health insurers. The access is saving employees money and time, and improving worker productivity and job satisfaction, experts say.

Telemedicine encompasses a growing variety of services using two-way video, email, smartphones, wireless blood pressure, weight and diabetes and heart monitoring and other technology. Services include remote consultations, primary and specialty care patient visits, health assessment, diagnosis, intervention and supervision. A recent Towers Watson study of employers with at least 1,000 employees concluded that companies could save up to $6 billion per year if their employees routinely engaged in remote consults for appropriate medical problems instead of visiting emergency rooms, urgent care centers or physicians’ offices. According to projections from IHS Technology, U.S. telehealth spending per year will rise from just $240 million in 2014 to $2.2 billion in 2018. It is predicted that there will be 7 million telehealth encounters in two years. Driven by demands for better access, convenience, cost reductions, innovation and quality, private and government payers are expanding coverage for telehealth options. SEE DIAGNOSE, PAGE 9

Telemedicine consults tackle tougher tasks Telemedicine generally focuses on common conditions such as earaches, sore throats and the like. But telemedicine for complicated chronic diseases or major surgeries? It is happening, in a way, through online video consultations for second opinions with medical specialists. Telemedicine second opinions cover diagnoses for back surgery, breast cancer, medication changes, hysterectomy, mastectomy or neurological disorders. Leading companies include Best Doctors, Advance Medical and 2ndMD. “We focus on the more-complex situations,” said Kirk Rosin, chief strategy officer with Houston-based 2ndMD. “Individuals with new diagnosis, surgery, change in medication therapy or chronic conditions whose symptoms become worse.” 2ndMD was founded in 2011 by CEO Clint Phillips, a chiropractor from South Africa and father whose infant daughter had a stroke and could not easily find a neurological treatment plan for her. “He felt no one should have to wait and travel distances to get their medical questions answered,” said Rosin, a Crain’s 40 Under 40 winner in 2010 who lives in metro Detroit. 2ndMD, which has a 400-physician provider panel that covers 120 recognized subspecialties, has more than 50 large-employer clients, including Hirotec America, an auto supplier based in Auburn Hills, said Rosin, who joined the company last November after several years in sales and business strategy with Aetna Inc. “We charge employers on a per-employeeSEE TASKS, PAGE 9

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SPECIAL REPORT: HEALTH CARE

TASKS FROM PAGE 8

per-month basis or a per-use rate, depending on the client,” said Rosin. “There are no copayments for patients. We don’t want to create a financial barrier for patients.” Some 25 percent of consultations are for lower back or musculoskeletal issues with average savings of $19,949, Rosin said. Of those consults, the patient cancels the surgery 52 percent of the time. The other 75 percent of consults range from neurological, cancer or male or female reproductive issues. About 34 percent of consults results in recommendations for alternative diagnosis and treatments, he said. “Seventy-three percent of consults results in an improved treatment plan. These are staggering numbers,” Rosin said. Becky McLaughlan, vice president at Marsh & McLennan in Troy, said she is in contact with several employers that are considering using specialty medicine to expand employee access to specialty physicians to make better health care decisions or answer questions. “Usually it is done through employers. We are talking with larger clients about it. It can save money on expensive operations,” McLaughlan said. “It is a specialized form of telemedicine that can save money on expen-

sive operations that aren’t necessary or can be handled differently,” she said. McLaughlan said she is not aware that health insurers are offering this approach, although some insurers require second opinions for certain surgeries, including lower back, and cover other second opinions, depending on the procedure. How it works: Employees request service and are assigned a nurse to discuss symptoms and medical history and to request medical records from providers. The employee then is given the choice of several doctors to have an online video chat. Within three days, a secure videoconference is set up to discuss the case. “We want to be convenient to patients with 62 percent of visits on nights and weekends,” Rosin said. “Patients receive a written summary, including any research, clinical trials or evidence, within 24 hours.” Rosin said patients can request the medical expert to discuss the findings with the original doctor. Or the second opinion can remain secret, he said. Typically, a face-to-face normal second opinion can cost up $3,500 to $4,000, which sometimes is partially covered by insurance. “Ours is less than that, about $2,500,” said Rosin, who added that 2ndMD is also talking with health insurers to cover the online second opinion as a cost-containment and quality-improvement program.

DIAGNOSE FROM PAGE 8

Currently, 29 states and the District of Columbia have parity laws requiring that insurers cover telehealth costs as they would in-person services. “Michigan has the most favorable laws for telehealth. Texas is the absolute worst. Almost no state has done a great job with dealing with licensing issues, practicing across state lines,” said Kimberly Lovett Rockwell, M.D., a physician-turned-lawyer in the Bloomfield Hills office of Honigman Miller Schwartz and Cohn LLP. “If I am a Michigan doctor and contract with a third-party agency who does telehealth, I can’t take calls from patients residing in California because I am not licensed there,” Rockwell said. “A major barrier in Texas is that state law requires you to see a patient in person before you prescribe. Michigan doesn’t currently place those types of limits.” While Michigan is one of the more permissive states when it comes to regulating telemedicine, Senate Bill 495 would require physicians to have interstate licensure for practicing telemedicine across state lines. The bill, which was introduced last year, would also require

doctors to be licensed in Michigan to provide telemedicine consultations with Michigan residents. One solution to the state licensing problem is a proposal from the Federation of State Medical Boards, which has developed an interstate medical licensing compact that would facilitate license portability and the practice of interstate telemedicine. Other advanced practice provider organizations are working on their own compact proposals. “Some doctors prefer to see patients face to face. They aren’t against telemedicine. They are happy if they get compensated per visit,” she said, adding: “Misprescribing is a concern for a lot of clinicians. It is a lot easier to miss something if you don’t see them in person or have full vital signs.” But Rockwell said primary care telemedicine can be used to diagnose uncomplicated urinary tract infections, bronchitis, upper respiratory infections and common diarrhea. For chronically ill employees who need constant monitoring of blood pressure, weight or diabetes, Rockwell said wireless monitors can feed information to telemedicine providers to take vital signs and facilitate routine follow-up visits. “It is much less expensive, espe-

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cially if conducted by a nurse practitioner or physician assistant. Just displacing physician visits can be cost effective under such circumstances,” Rockwell said. “It also increases preventive care so you can reduce crisis care of going to the ER or the urgent care.” In Michigan, telemedicine use has doubled each of the past two years either by employers contracting with private vendors like Teladoc or Amwell or through health insurers offering as part of a fully insured coverage, said McLaughlan. In 2016, 38 percent of midsized employers offered telemedicine to employees, up from 20 percent last year, said Marsh & McLennan’s 13th annual Southeast Michigan Mid-Market Group Benefits Survey. An additional 24 percent are considering adding telemedicine. Nationally, 34 percent of companies offer telemedicine benefits, with some estimating up to 80 percent by 2018. McLaughlan said employers are just starting to understand that if employees can avoid a high-cost emergency department visit and instead use their smartphone to talk with a doctor or nurse, savings and convenience can pay dividends. SEE DIAGNOSE, PAGE 10

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SPECIAL REPORT: HEALTH CARE

DIAGNOSE FROM PAGE 9

“The driving force is convenience. Employees need less time off work and are present more,” McLaughlan said. “It is hard to measure that, but (if) they are healthier sooner and don’t have to take that afternoon off, it is convenient for them. Another reason is good will (built up) for their employRebecca ers.” McLaughlan: While firstEmployee usage year usage iniramps up over tially is low, betime. tween 5 percent to 10 percent, McLaughlan said employee use ramps up over time, depending on the robustness of the communication plan. Costs to employees range from zero copays to $50 per telemedicine consultation, which is the average full visit cost charged by telemedicine companies, McLaughlan said. “This relatively low utilization, particularly when the program is new, is one of the challenges to telemedicine offering cost savings,” she said. “Employers really need to com-

municate the program effectively to drive this up, and the copay they charge for using the service will impact utilization also. Many employers set the telemedicine copay the same as the primary care physician copay. Of course, the lower the copay, the higher the utilization.”

Company experiences At Troy-based Residential Home Health, Sarah Kerr, senior benefits

administrator, said Residential began using telemedicine services in Illinois this year for its 300 employees under a contract with United Healthcare. Overall, Residential has 600 of 800 total employees in its health plans, she said. “The majority of staff (nurses, therapists and aides) are on the road visiting patients and getting to a facility is not an easy thing to do,” Kerr said. “We thought this would be perfect for us. They do documentation on tablets already. This is a perfect technology to use to get better faster.” Under United Healthcare, Kerr said the telemedicine service with physicians is part of overall PPO benefits and there is a $25 copay for employees on the PPO plan and a $39 copay for employees on the high-deductible plan with a health savings account until the deductible is reached. A nurse telephone hotline is free, she said. “We estimated (costs) to be some-

what neutral,” Kerr said. “We know there is a minimal fixed cost for adding the service and there may be some additional utilization due to the ease of access.” In Michigan, Residential contracts with Aetna and is considering adding Teladoc as a stand-alone service in 2017. “We are looking at other insurers in Michigan. It is possible we offer it as a stand-alone benefit outside of insurers,” Kerr said. Kerr agreed the biggest challenge for an employer is to inform workers about available benefits. “We try little email reminders about what benefits are available. We show them how much an MRI is at Beaumont versus Botsford and remind employees about cost savings and how telemedicine is cheaper than urgent care.” Despite annual meetings and employee newsletters, TNG and Residential all believe they can do a more effective job at getting employees to sign up and use telemedicine services. But generally less than 20 percent of the workforce locks onto a new program the first year, experts say. “Truthfully, the best way is word of mouth,” Gambrell said. “A manager knows someone is sick and asks if (the employee) uses Teladoc. They say, ‘I forgot about it.’ They register and have a great experience.” In January, TNG began offering telemedicine to its 100 employees

“There is great benefit in getting diagnosed quickly and not affecting other employees, not missing more time from work.” Cheryl Gambrell, TNG Worldwide

and 200 dependents through its self-insured plan managed by Blue Cross, Gambrell said. Blue Cross contracts with Amwell. “We thought about it last year and decided we weren’t quite ready,” Gambrell said. “We see ourselves as a trend-setter and didn’t want to wait too long. From a cost perspective, it was only $4,000 per year, so it was a minimal cost investment to get started.” Another reason TNG decided to invest in telemedicine is the calculation that if employees used the service that the company would spend less on health care. “Fewer ER visits, urgent care, physician visits, less missed time from work, especially in the winter months when it is most difficult to see doctors,” she said. So far, of TNG’s 140 total employees, 100 are on its medical plan. Six months into the first year, employees had 34 consultations, for a 34 percent use rate, Gambrell said. The average wait for a call back is seven minutes.

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In a report from Teladoc, Gambrell said TNG potentially saved $7,000 because its employees used the service instead of visiting doctors or hospitals. TNG spent $4,000 on Teladoc, potentially saving $3,000 in avoided visits. To estimate savings, Teladoc asks each user what they would have done if they did not call. Of the 34 consultations, 20 said they would have gone to urgent care, eight to their primary care doctor, two to the ER. The other four would have skipped getting care. TNG’s top five diagnoses were upper respiratory infections, acute sinusitis, acute maxillary sinusitis and skin rash. The top five prescriptions were all antibiotics and smoking cessation drugs. “My hope is that next year employees will continue to use the program and it will increase,” Gambrell said. “There is great benefit in getting diagnosed quickly and not affecting other employees, not missing more time from work. It is awesome what they are doing. Most people know their own bodies and know when they are sick.” For Spectrum Health, an integrated delivery system with 12 hospitals, a 1,100-member medical group and a managed care organization based in Grand Rapids, the use of telemedicine services worked out extremely well, said Joe Brennan, senior director with MedNow, Spectrum’s telemedicine program. MedNow not only is offered to the 650,000 members of Priority Health, but also to Spectrum’s 24,000 employees who choose Priority Health. Spectrum recently has contracted with two western Michigan employers to offer MedNow to their workforces and is talking with other employers, Brennan said. MedNow’s top five calls are for coughs, rashes, sore throats, sinus pain and urinary pain, Brennan said. The average return on investment, Brennan said, is $47 per employee per use. “As an integrated system, we have an advantage with telemedicine and referrals,” said Brennan. “If a provider is not comfortable with prescribing they will offer an alternative and direct (the patient) to the appropriate setting.” For example, Brennan said a patient called into MedNow service with flu symptoms and stomach problems. The on-call physician listened carefully to the symptoms and acted quickly. “He had his gall bladder removed that night,” Brennan said. “If MedNow was not available and he had waited until Monday, it would have ruptured.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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CRAIN'S LIST: LARGEST MICHIGAN HOSPITAL COMPANIES

Ranked by 2015 revenue Company Address Rank Phone; website

Top executive(s)

Full-time Net Net Licensed equivalent Number of revenue revenue bed Michigan hospitals/ ($000,000) ($000,000) Percent capacity/ employees ambulatory 2015 2014 change occupancy Jan. 2016 facilities Major facilities

Richard Gilfillan president and CEO

$14,338.2

$13,399.8

7.0%

NA NA

14,212

Trinity Health Michigan 20555 Victor Parkway, Livonia 48152 (734) 343-1000; www.trinity-health.org

8 25

Mercy Health Muskegon and its campuses: General, Hackley, Lakeshore, Lakes Village, Mercy. Also Saint Joseph Mercy Health System and its campuses in Ann Arbor, Chelsea, Oakland, and Livonia

Nancy Schlichting CEO

5,000.0

4,700.0

6.4

2,495 NA

15,374

Henry Ford Health System B 1 Ford Place, Detroit 48202 (800) 436-7936; www.henryford.com

6 103

Henry Ford Hospital and its campuses: Macomb, West Bloomfield, Wyandotte and Kingswood, and Henry Ford Allegiance

Spectrum Health System 100 Michigan St. NE, Grand Rapids 49503 (616) 391-1382; www.spectrumhealth.org

Richard C. Breon president and CEO

4,710.9

4,302.4

9.5

1,561 59.7

19,757

12 104

John Fox Beaumont Health 2000 Town Center, Suite 1200, Southfield 48075 president and CEO (248) 213-3333; www.beaumonthealth.org

4,111.8

3,953.7

4.0

3,337 69.9

26,190

8 168

Spectrum Health hospitals: Butterworth, Blodgett, Reed City, United, Kelsey, Special Care, Gerber Memorial, Zeeland Community, Helen DeVos Children's, Big Rapids, Ludington, Pennock, Lemmen-Holton Cancer Pavilion, Meijer Heart Center, Tamarac Medical Wellness and Fitness Center, Wheatlake Cancer Center Beaumont hospitals in Dearborn, Farmington Hills, Grosse Pointe, Royal Oak, Taylor, Trenton, Troy, and Wayne

McLaren Health Care Corp. G3235 Beecher Road, Flint 48532 (810) 342-1100; www.mclaren.org

Philip Incarnati president and CEO

3,500.0

2,903.0

20.6

3,096 NA

21,688

12 300

Ascension Michigan 28000 Dequindre Road, Warren 48092 www.ascension.org/michigan

Gwen MacKenzie senior VP, Ascension Health, Michigan

3,364.4

3,284.6

2.4

3,273 64.8

20,252

14 200

University of Michigan Health System (Michigan Health Corp.) 1500 E. Medical Center Drive, Ann Arbor 48109 (734) 936-4000; www.med.umich.edu

Marschall Runge EVP for medical affairs

2,771.7

2,771.2

0.0

1,059 79.0

15,948

3 120

Detroit Medical Center 3990 John R, Detroit 48201 (313) 578-2442; www.dmc.org

Joseph Mullany CEO

1,927.9

1,860.0

3.7

1,811 56.0

11,418

9 80

Sparrow Health System 1215 E. Michigan Ave., Lansing 48912 (517) 364-1000; www.sparrow.org

Dennis Swan president and CEO

1,277.0

1,156.8

10.4

NA NA

6,616

5 NA

Children's Hospital of Michigan, Detroit; Children's Hospital of Michigan, Troy; Detroit Receiving Hospital; Harper University Hospital; Hutzel Women's Hospital; Cardiovascular Institute; Rehabilitation Institute of Michigan; Sinai-Grace Hospital; Huron Valley Sinai Hospital. Sparrow Hospital, Sparrow Ionia Hospital, Sparrow Clinton Hospital, Sparrow Specialty Hospital

Diane PostlerSlattery president and CEO

611.0

578.0

5.7

NA NA

MidMichigan Health 4005 Orchard Drive, Midland 48670 (969) 839-3301; www.midmichigan.org

5 NA

MidMichigan Medical Centers in Clare, Midland, Center-Gratiot, Center-Gladwin

Ed Bruff president and CEO

574.3

528.6

8.6

NA NA

2 NA

Covenant HealthCare

Covenant HealthCare 1447 N. Harrison, Saginaw 48602 (989) 583-0000; www.covenanthealthcare.com

Loren Hamel, M.D. president and CEO

474.6

462.2

2.7

370 NA

3,216

Lakeland Health 1234 Napier Ave., St. Joseph 49085 (269) 983-8300; www.lakelandhealth.org

3 34

Lakeland Medical Center, St. Joseph; Lakeland Hospital in Niles and Watervliet; Merlin and Carolyn Hanson Hospice Center, Stevensville; Center for Outpatient Services; St. Joseph Pine Ridge: A Rehabilitation and Nursing Center; Stevensville

Melany Gavulic president and CEO

412.9

370.4

11.5

443 NA

2,700

1 NA

Hurley Medical Center

Hurley Medical Center 1 Hurley Plaza, Flint 48503 (810) 262-9000; www.hurleymc.com

Michael Faas president and CEO

359.0

320.5

12.0

208 60.1

1,960

Metro Health 5900 Byron Center Ave. SW, Wyoming 49519 (616) 252-7200; www.metrohealth.net

1 42

Metro Health Southwest; Rockford; Cascade; Community Clinic; Sports Medicine; Internal Medicine; MidTowne Ambulatory Surgery Center; Metro Health Park East; and The Cancer Center at Metro Health Village

Dale Sowders president and CEO

222.3

222.0

0.2

189 48.6

1,514

1 10

Holland Hospital

Holland Hospital 602 Michigan Ave., Holland 49423 (616) 392-5141; www.hollandhospital.org ProMedica Bixby Hospital 818 Riverside Ave. , Adrian 49221 (517) 265-0900; www.promedica.org/ contactbixbyhospital

Julie Yaroch president

78.9

76.3

3.5

NA NA

1 NA

Bixby Hospital

3 4 5 6 7 8 9

Bay Region, Bay Special Care, Central Michigan, Greater Lansing, Orthopedic, Lapeer Region, Clarkston, Flint, Macomb, Oakland, Northern Michigan, Northern Michigan Cheboygan, Proton Therapy Center, Port Huron, Karmanos Cancer Institute, McLaren Home Care, McLaren Health Plan St. John Hospital & Medical Center, Providence and Providence Park Hospital, St. John Macomb-Oakland Hospital, St. John River District Hospital, Brighton Center for Recovery, Borgess Medical Center, Borgess-Pipp Hospital, Borgess-Lee Memorial Hospital, Genesys Regional Medical Center, St. Mary’s of Michigan, St. Mary’s of Michigan Standish and St. Joseph Health System University Hospital, C.S. Mott Children's Hospital, Women's Hospital, UM Cancer Center, UM Cardiovascular Center, UM Depression Center, Kellogg Eye Center

This listing is an approximate compilation of the leading hospital companies based in Michigan. Revenue listed is net patient revenue plus other operating revenue. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies directly or from state and federal filings. Companies with headquarters elsewhere are listed with the address and top executive of their main Michigan office. NA = not available.

B On March 14, the boards of Detroit-based Henry Ford Health System and Jackson-based Allegiance Health signed the final agreement to merge. On April 5, Allegiance Health's new name became Henry Ford Allegiance Health. LIST RESEARCHED BY SONYA D. HILL

C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 5 , 2 0 1 6

SPECIAL REPORT: FINANCE

Sam Simon started Atlas Oil Co. in 1985 with a single truck. Today, it’s a $2 billion-a-year business headquartered in the historic former St. Clair Edison building in downtown Birmingham.

PHOTOS BY JACOB LEWKOW

INVESTING IN PEOPLE Sam Simon considers deals for undervalued companies with the same attitude that built his business By Tom Henderson thenderson@crain.com

Sam Simon, who launched Taylor-based Atlas Oil Co. in 1985 with a single truck and a credit card and built it into a $2 billion-a-year fuel wholesaler, is building a network of private equity funds based in downtown Birmingham. The funds operate as a family office for Simon and five wealthy local families, who requested anonymity. The funds have raised $75 million in committed capital and invest in a wide range of industries and companies, some in Simon’s sweet spot of oil distribution and service-station management, others as far from that as managing digital content for political candidates and providing modular classrooms for schools. Simon said he began investing as a de facto family office in 2006, but the business began in earnest in 2013. In 2014, he formed Soaring Pine Capital as a brand name under which to house a series of investment funds operating as

limited-liability corporations. (See related story, Page 13.) Until then, Simon had raised money from investors as needed to do deals, including dozens of single-asset LLCs. But raising money on a deal-by-deal basis was cumbersome, and so Simon began raising larger pools of capital to have on hand as potential deals arose. He has invested about a third of the $75 million. Generally, the funds look to invest in underperforming, undervalued companies, usually with revenue between $10 million and $100 million, where management can be brought in to turn things around. “The best investment opportunities lie at the bottom of the pyramid,” said Simon. He said he approaches deals the same way he grew Atlas Oil. “When I started Atlas Oil, I had a passion for working hard and finding the best people. I gave them the tools and the freedom to do their jobs. I gave peo-

ple freedom to make mistakes. Now, I want to invest in people who understand their businesses,” he said. “I love investing in people. When I started my business in 1985, if someone had invested in me, think where they’d be now. I’m looking for people who want to start the next American dream.” Simon, 52, was speaking from his office on the second floor of the historic former St. Clair Edison building on Pierce Street. He bought the building in 2009 at the bottom of the market. He lived nearby and was looking for a showcase office and, at a mile from his home, a much shorter commute than the drive to Taylor. He spent a lot of money — he declined to say how much — and it’s evident. The first floor is rented to a retailer, with Simon’s office an eye-catching space complete with a large wine cellar of exposed brick and a large kitchen with a long, U-shaped marble counter where he can offer SEE SIMON, PAGE 13

Sam Simon spent $7 million on a complete

renovation and build-out of office space at 335 E. Maple in downtown Birmingham.

C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 5 , 2 0 1 6

SPECIAL REPORT: FINANCE

SIMON FROM PAGE 12

lunches or dinners made by his personal chef to business partners or those he is wooing. Simon’s various private equity funds and some of his portfolio companies operate around the corner, in a four-story, even more eye-popping building Simon bought at 335 E. Maple Road. He said he spent a total of $7 million on the building and its complete 17,000-square-foot renovation, another year-and-a-half build-out that was finished a few months ago. Parts of floors were cut out to open the space up and increase the interior light. The fourth floor contains two bedrooms, not because Simon wants to get into the individual apartment rental business, but because Birmingham codes require renovations of downtown buildings to have residential on the top floor. Sam Valenti III, executive chairman of Bloomfield Hills-based TriMas Corp. (Nasdaq: TRS) and president and CEO of Bloomfield Hills-based wealth management firm Valenti Capital LLC, had a bird’seye view of Atlas’ growth in the 1980s and 1990s. Valenti was then at Taylor-based Masco Corp., leading its acquisition strategy, which in the course of 100 acquisitions grew the business from annual revenue of $10 million to almost $13 billion. “Simon’s story is potent stuff. He came to this country as an immigrant, with nothing,” said Valenti, who said he has become friends with Simon over the years. Simon emigrated to the U.S. from Iraq when he was 9. Though his grandfather had owned a BP station in Iraq, his father, Ramzi, had been in the shoe business. But upon arriving here, Ramzi went to work at a friend’s gas station in Detroit at Six Mile and Hoover. And promptly put his son to work, too. “I was pumping gas there when I was 9. That's where I got my work ethic,” said Simon. “My father got me to understand how you dedicate yourself to hard work. If you want something, you have to go after it, and never give up.” “Sam is a throwback,” said Valenti. “He’s a father figure for Atlas. He knows his employees and their families. He works them hard, but he gives them their freedom. He’s got a wildly loyal crew of folks who surround him.” Simon's private equity team includes his brother, Victor, the executive vice president of real estate; Vice President Paul Schapira, a longtime area banker and investor who had been Simon’s lender in the 1990s while with the National Bank of Detroit; Michael Evans, an executive vice president and COO who previously was president of Atlas Oil; and Steve Rochowiak, vice president of business strategy who formerly was with the Ford family office. As for Simon’s reputation as a deal-maker, Valenti said: “He’s a force of nature. If he puts his efforts behind a project, it’s as good as done. ... He doesn’t need a focus group to decide

what to do.” Kevin Prokop, a managing partner at Detroit-based Rockbridge Growth Equity LLC, one of Dan Gilbert’s family of companies, doesn’t know Simon personally, but he praised Simon’s investment strategy of buying underperforming companies in areas where he has particular expertise, then bringing in management to turn them around. “It’s one of the trends in private equity — trying to find opportunities where you have an edge, where you have industry experience and contacts,” said Prokop. A successful example was the MSB Energy Fund II LLC, which was formed in September 2012 to purchase notes from Flagstar Bank on four service stations — in Dundee, Northville, Pontiac and Taylor — for a total of $3.8 billion. New property managers were brought in and eventually bought the stations. The last of the four stations was sold in June; investors ended up making a profit of $2.2 million. Lorient Capital LLC is a neighbor of Simon’s on Pierce Street in downtown Birmingham. It is a family office with $250 million in capital from co-founder Mark Mitchell, who sold his majority interest in U.S. Medical Management, a Troy-based home care company he founded in 1993, to St. Louis-based Centene Corp. for $200 million in 2014. His partner and co-founder, David Berman, had an introductory meeting with Simon and his investment team in July. “We’ve begun to share opportunities with them, and we’re thinking about potential investments we can do together,” said Berman. Vesta Modular Solutions Inc., one of the Simon group portfolio companies based at 355 E. Maple, is an example of finding the right operators and then backing them. Before co-founding Vesta, its CEO, Daniel McMurtrie had been vice president and general manager of Champion Home Builders Inc. in Troy from 2008-2014; Vesta COO Billy Hall was chief estimator and construction manager at Champion. Champion specialized in modular construction of hotels, apartments and single-family developments, and Vesta also has a focus on the modular industry. In July, it bought 76 modular classroom units out of bankruptcy in Florida and immediately leased them to the schools. Another example of partnering with seasoned industry veterans is Birmingham-based Tikoo Solutions LLC, a new platform company of Soaring Pine Capital Growth Fund I. In May, Soaring Pine bought Chicago-based Technology Solutions Inc., a provider of field services for cable TV companies, and rolled it into the new platform, run by CEO Jerry McCoy and COO Bill Fenton. The plan is to buy other providers of field services for the cable industry. “As you get a track record, more and more people want to do deals with you,” Evans said. Tom Henderson: (313) 446-0337 Twitter: @tomhenderson2

Simon grows network of investment vehicles By Tom Henderson thenderson@crain.com

Sam Simon’s Birmingham-based private equity interests include growing numbers of funds and portfolio companies. The various legal entities operate under the brand of Simon Holdings Group, which was created in 1985 with the founding of Taylor-based Atlas Oil Co., which has grown into a $2 billion-a-year company. Simon Holdings operates as a family office for the Simon family and five other wealthy local families, who declined to be named. Those families can invest in LLCs of their choosing. In addition, other families or high-net-worth individuals can invest in funds. The funds have raised a total of $75 million in committed capital so far, about a

third of that from Simon, who declined to specify specific funding totals for most of the funds. A new fund, the Soaring Pine Capital Real Estate and Debt Fund II LLC, is raising money and has made its first investment, and another new fund, U Store Investment Fund II, is expected to start fundraising in 90-180 days. Next year, the Simon group plans to start raising a second growth fund, a $50 million private equity fund. Here is a description of the growing network of investment vehicles: n Fast Track Ventures LLC, the real estate development arm of Atlas Oil, which has managed the acquisition, management and sale of more than 200 retail gas stations and convenience stores in the past 20 years. n Lone Pine Investments, an umbrella under which there are 20 sin-

gle-asset LLCs.

n Soaring Pine Capital Growth Fund I LLC, a private equity fund that invests in operating companies.

n Soaring Pine Capital Real Estate and Debt Fund I LLC, which buys nonperforming or distressed debt owed by retail gas stations.

n Soaring Pine Capital Real Estate and Debt Fund II LLC, which made its

first investment in May, a loan to an experienced operator of multifamily housing units to help it buy the Rouge Park Apartments in Detroit. n U-Store Investment Fund I LLC, which invests in self-storage facilities in Michigan, Ohio, Indiana and Illinois. Simon Holdings is a 43 percent investor in the $7.5 million fund, with an outside investor, Southfield-based Bee Store Investment Fund I LLC, the majority investor.

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C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 5 , 2 0 1 6

DEALS & DETAILS ACQUISITIONS & MERGERS

NSF International Inc., Ann Arbor,

which writes standards and tests and certifies products for the food, water, health sciences and consumer goods industries, acquired Euro Consultant Group, Wavre, Belgium, a food safety and quality service firm. Website: nsf.org. RHP Properties Inc., Farmington Hills, owner and operator of manufactured home communities, acquired the 263-site Rivermead Home Community and 199-site Colonial Home Community, both in East Hartford, Conn. Website: rhp-properties.com.

CONTRACTS

SunTel Services, Troy, a provider of

services for unified communication networks, has partnered with CarbonBlack/Bit 9 Inc., Cambridge,

Mass.; Simplivity, Westborough, Mass.; and CyberArk, Newton, Mass., for additional security to enhance efforts to battle network threats. Websites: suntel.com, carbonblack.com, simplivity.com, cyberark.com.

Q10 | Lutz Financial Services LLC, Birmingham, a subsidiary of Lutz Real Estate Investments, has opened an office at One Campus Martius, Suite 200, Detroit, formerly the Compuware Building. Phone: (248) 432-3200. Website: q10lutz.com.

Valassis Communications Inc., Livonia, is working with Silvercrest Advertising, Los Angeles, a media

Fourmidable Group Inc., Bingham

planning and buying provider, to help business owners target consumers with LMap, Silvercrest’s localized media automation platform. Websites: valassis.com, silvercrestadvertising.com.

EXPANSIONS

SRG Global Inc., Troy, a subsidiary of Guardian Industries Corp., a

manufacturer of coatings on plastic for the automotive, commercial truck and consumer goods industry, is opening an Asia-Pacific headquarters in Hong Kong. The 3,300-square-foot office space will centralize its Asia-Pacific management group. Website: srgglobal.com.

Farms, a national real estate company, has opened 64-unit communities at Greenwood Place, Algood, Tenn.; Raines East, Bolivar, Tenn.; Rutledge Place, Morristown, Tenn.; and Ware Park, Union City, Tenn. Website: fourmidable.com.

and gluten free and will appear on shelves in fall 2016. They are: Berry Cherry, California Almonds, California, Dark Chocolate, Great Lakes, In-Shell Pistachios, Naked, Premium Duet, Roasted Pistachios, Simplicity, Wholesome and Whole Cashews. Website: secondnaturesnacks.com. Acromag Inc., Wixom, a designer

MOVES

Rockind Law has moved its law office from 28411 Northwestern Highway, Suite 1150, Southfield, to 36400 Woodward Ave., Suite 210, Bloomfield Hills. Phone: (248) 208-3801. Website: rockindlaw.com.

NEW PRODUCTS

Second Nature, a brand of Kar’s Nuts, Madison Heights, announced

that 12 of its medleys are now non-GMO verified, kosher certified

and manufacturer of industrial electronics, measurement and control products, announced the APA7-200 series module that provides a user-customizable field-programmable gate array on an AcroPack mezzanine. Website: acromag.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.

ADVERTISEMENT SECTION

MANUFACTURING

TECHNOLOGY

PEOPLE: SPOTLIGHT

St. Joseph Mercy names Howell hospital chief John O’Malley has been appointed president of St.

Joseph Mercy Livingston in

Howell, officials for

St. Joseph Mercy Health System in

Ann Arbor announced. O'Malley, John O’Malley who will begin duties Sept. 12, will oversee operations of the hospital and St. Joseph Mercy Brighton health center. He will report to Dave Brooks, CEO of St. Joseph Mercy Ann Arbor and Livingston hospitals. O'Malley previously was CEO of Select Specialty Hospital, located within St. Joseph Mercy Ann Arbor. St. Joseph's health facilities in Livingston County are undergoing a $41 million renovation to upgrade St. Joseph Mercy Livingston hospital and develop a center for overnight stays at St. Joseph Mercy Brighton.

Bierley new to lead Learning Care Group Novi-based Learning Care Group Inc. named former Borders Group Inc.

BOARDS Deanna S. Hatmaker Board Member

Michigan Parkinson Foundation Deanna S. Hatmaker, Senior Vice President of Development and Strategic Performance for Ulliance, Inc. has been elected to the Michigan Parkinson Foundation Board of Directors. She will serve alongside medical and business professionals with the primary focus of advancing the nonprofit organization’s mission and programs throughout the state. In addition to 15 years of executive leadership, Hatmaker’s involvement with the nonprofit will add to her previous experience with Parkinson organizations.

INSURANCE Kari Bush

Sales Executive TruAssure Insurance Company TruAssure Insurance Company is pleased to announce the hiring of Kari Bush, who will join the company as sales executive for the Northeast region. Bush will be responsible for sales in Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, West Virginia and Wisconsin. Bush brings over a decade of business-to-business sales experience to her role at TruAssure, along with over fifteen years of experience with group insurance plans.

executive

Mark Bierley

Pete Chryplewicz

Tariq Malik

Michigan Strategic Account Leader

Director Big Data & Advanced Analytics

Seegrid

Value Integration, LLC

Seegrid, the pioneer in vision guided driverless vehicles, announces the addition of Pete Chryplewicz. Chryplewicz joins the strategic account sales team and will be heading up the company’s Michigan robotics initiative. Chryplewicz, a native to Detroit and former Lions tight end, has over 15 years of manufacturing sales success. Chryplewicz’s past employment experience includes Irvin Automotive, Plastech Engineering, Air Center and CCK Construction Services.

FINANCE Ray Gunn

Senior Managaing Directror Van Conway & Partners Gunn has 36 years of experience as a financial, operating & business development executive, including 28 years acting as the principal architect in the formation, growth and IPO or sale of more than 10 early-stage companies. He was managing partner of Wingspan Capital and CEO of MexAmerica Foods & Clarity Technologies as well as CFO of Somanetics. He was co-founder of First Michigan Bank, now Talmer B&T. Gunn currently serves on several boards including Oakland University’s School of Business

Malik is responsible for the firm’s Big Data & Advanced Analytics Division. His primary focuses will be in the government, automotive and utility industries. Malik has over 21 years experience helping governments improve service delivery using innovative technologies, during which he developed an extensive knowledge of big data, data analytics, biometrics, smart cards and innovative technologies. Previously he was a government systems leader at Teradata & Deputy CIO in Wayne County.

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

president and COO. Bierley, 49, assumed the new posts July 18. Mark Bierley He replaces Erin Wallace, who is returning to the hospitality industry, said a news release from the for-profit early education and child care provider. Bierley joined Learning Care Group as CFO in 2012. Before that, he was CFO and senior vice president of The Pantry Inc. and held several leadership positions at now-defunct Borders, including executive vice president, CFO and COO.

Clark Hill absorbs Axe & Ecklund firm Clark Hill PLC has absorbed the Axe & Ecklund PC municipal finance boutique, taking the two partners and some support staff from the Grosse Pointe firm into its Detroit office. John Axe, who has practiced more than 50 years as a bond attorney and municipal lawyer, has become senior counsel at Clark Hill. Peter Ecklund, who has been the lead attorney in more than 300 municipal bond and note offerings, started last week as a partner.

CHURCH

“We’re replicating ... what we do in Troy at other campuses, with the same marketing, teaching website and music. It’s a bit like a franchise model.”

FROM PAGE 3

Kensington’s co-founding pastors, Steve Andrews, Mark Nelson and Dave Wilson, remain with the church. The church says the three are supported by a directional team, which includes Gibbs and Kyle Nabors, executive director of the church. “We’re replicating ... what we do in Troy at other campuses, with the same marketing, teaching, website and music,” Gibbs said. “It’s a little bit like a franchise model.” Kensington is operating on a $19.3 million budget for fiscal 2017 that began in July, with the addition of Kensington Traverse City, Gibbs said. That’s up from $17.3 million for 2016. Founded in 1998, Bay Pointe had operated a single nondenominational church on the 37-acre campus since 2007. Its services drew about 1,000 people each weekend, said Nick Twomey, the former senior pastor at Bay Pointe and current teaching pastor at Kensington Traverse City. Its total membership was closer to a couple of thousand people, and it operated on a budget of about $1.8 million for 2015 and 2016. Kensington and Bay Pointe were not identical, “but there was a strong enough commonality on several levels (that a merger) made sense to me,” Twomey said. Following the merger, Kensington hired 10 of Bay Pointe’s 23 employees and brought eight new people on board, including five part-time staff

ROCO FROM PAGE 3

People do it right, absolutely. But we don’t have that philosophy.” Plus, when Roco first started, its principals hadn’t yet built a name for themselves, so they wouldn’t have been able to tie down investors into a substantial fund. But in a few years, that has changed, and they now have a 16,000-unit portfolio under ownership and management — a far cry from their portfolio of less than 2,000 units a few years ago. But even though Roco isn’t considering raising a fund now, it isn’t ruling out such an effort in the future. “Never say never,” said Colman, a 2014 Crain’s 20 in their 20s honoree.

Expanding portfolio Roco — which Colman started with his brother, Michael, and brothers Tyler and Evan Ross (a silent partner and opera singer) — is growing at a furious clip, with plans to continue its growth in the next 18 months. Since April 2013, when the company had just 1,800 apartment units in its portfolio, Roco has ballooned to almost 16,000 units in properties spread across 10 states. By the end of this year, its portfolio is expected to grow to 17,500 based on deals in the pipeline, and David Colman said he expects to add 4,000 more units next year, bringing it to about 21,500 by the

C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 5 , 2 0 1 6 CRAIN’S DETROIT BUSINESS

August 15, 2016

Greg Gibbs, Kensington Church

members, said Melissa Thwing, Kensington development communications coordinator. It’s now in the midst of a $750,000 renovation to upgrade the Traverse City church’s auditorium with new conventional and intelligent lighting, staging and curtains, a new coffee area in the lobby and renovations to the small-group rooms for children. In total, Kensington is investing $1.2 million in the Traverse City church, with staff and other transition costs, Gibbs said. The Troy-based church is funding the cost of opening its northern Michigan campus as part of a $30 million campaign it took public in the spring after a silent phase launch in the fall. To date, it has pledges for $22 million, most made for a three-year-period, Gibbs said. A portion of the campaign funds will also go toward constructing a $14 million, 57,000-square-foot facility on land at Hall Road and I-94 to serve as a permanent site for its Clinton Township campus, which is now operating at the John R. Armstrong Performing Arts Center. The facility will serve as a permanent hub from which Kensing-

ton plans to launch other churches that make a worldwide impact, it said. Kensington is waiting until more pledges are fulfilled in the campaign before setting a timeline for construction of the Clinton Township campus, Thwing said. The campaign will also fund $3 million in deferred maintenance and/or capital improvements at the Birmingham, Troy and Orion campuses, $3 million toward a down payment on a permanent location in Birmingham, and $1 million worth of investments at its temporary campuses in Shelby Township, Clarkston and Orlando. Another $4 million will be split between global and local outreach, new campuses and church planting in other parts of the country, information technology and website updates, new signage and other projects, Gibbs said. Kensington raised $18.5 million during its last campaign, between 2008 and 2012. The new Orion campus, one of the projects that campaign funded, today has 4,500 members, Gibbs said.

end of 2017.

know it is because they have been around this for a while and they have been researching,” Beznos said. David Colman said his company focuses on off-market deals for underperforming properties in what he describes as “tertiary markets,” such as San Marcos, Texas; Birmingham, Ala.; Jackson, Miss.; and Euclid, Ohio. In Michigan, Roco owns apartment complexes in Jackson, Lansing, Flint, Traverse City, Clinton Township, Melvindale, Chesterfield Township, Roseville, Southfield, Kalamazoo, Warren, New Baltimore, Davison, Wayne, Grand Rapids and Westland. “With the high returns we are giving our investors, it’s very tough to do that in New York City or Chicago because you’re buying at such a low (capitalization) rate,” Colman said, referring to a rate of return on a real estate investment. He said Roco’s portfolio has a $750 million fair market value. And it plans to stay almost exclusively dedicated to multifamily real estate. “The only other deal we’ve done outside of multifamily is this deal,” Colman said in his office in the Governor’s Place office building off Woodward Avenue in Bloomfield Hills, of which Roco is a part owner and where it has built out its space from a modest first-floor office to 10,000 square feet across two floors in the building. “It’s enticing to do others, but we are staying focused.”

Managing properties Six months ago, the company formally started its property management branch, Roco Management LLC, which swelled its payroll from 10 to about 400. At the heart of the move is ensuring that its ownership portfolio of 85 properties is well maintained, thereby helping maintain or improve rental and occupancy rates and in turn, an annualized return of 10 percent-plus to investors, David Colman said. “Your property manager, your leasing agent, your maintenance supervisor, your maintenance technician — those are what will make or break you in this industry,” David Colman said. None of its 85 properties, a third of which are in Michigan with about 6,500 units, will be managed by third-party companies. The property management division is a natural course of action for a growing multifamily company, said Samuel Beznos, CEO of Farmington Hills-based Beztak Cos. “When you get to a certain size, it’s easier to control your own portfolio if you have your own management company,” said Beznos, whose firm owns and manages about 13,000 apartment units in roughly 50 properties throughout Michigan, six other states and Washington, D.C. “Long term, it’s probably the right decision if they plan on being in this business for a long time, but it’s a big undertaking, which they

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

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

Page 15

JOB FRONT

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C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 5 , 2 0 1 6

ELECTION FROM PAGE 1

Federal Election Commission records.

But Michigan business groups mostly are staying out of the fray. That includes Business Leaders for Michigan, the Detroit Regional Chamber and the Small Business Association of Michigan, whose leaders said they generally don’t endorse presidential candidates. “I think there’s certain elements of each one of the candidates that are appealing and certain elements of both candidates that the business community in general probably finds terrifying, and that’s why you don’t see a lot of business leaders just kind of saying, ‘I’m with Trump’ or ‘I’m with Clinton,’” said Sandy Baruah, president and CEO of the Detroit chamber. Executives he has talked to appear to be split, Baruah said, with two-thirds having “found a way” to vote for Trump or Clinton and a third either undecided or planning a write-in vote. Trump pitched tax simplification, which corporate leaders support in concept, Baruah said, though Clinton “provides stability.” The main reason he said he has heard for business support of Trump is the likelihood the next president will appoint a U.S. Supreme Court justice to replace Antonin Scalia, who died in February. “Under normal times, I find business leaders for the most part willing to ... state publicly who they’re voting for and why,” he said. “This year, ob-

viously, it’s very, very different.” Some leaders in the region heard from the candidates first-hand last week; Southeast Michigan was the backdrop for both major-party presidential candidates as they unveiled their respective economic agendas during campaign stops, outlining their disparate views of American tax and trade policies. On Aug. 8, Trump stood at a lectern at Cobo Center in Detroit, where he proposed massive business tax cuts to 1,500 members and guests of the Detroit Economic Club and threatened to pull the U.S. out of global trade deals if the terms aren’t renegotiated. The crowd of business executives cheered his tax proposal, though the response from Detroit appeared more tepid concerning trade. Clinton took a different tack than the New York businessman; she stumped Thursday at a tooling and engineering firm in Warren, surrounded by workers and an invite-only crowd of 500. She proposed imposing an “exit tax” on companies that move their profits overseas while investing in infrastructure projects and offering tax credits to encourage corporate profit-sharing and skilled trades apprenticeships. Clinton also formally took a stand against the Trans-Pacific Partnership, saying: “I will stop any trade deal that kills jobs or holds down wages.” Trump also opposes the TPP. That Trump and Clinton chose metro Detroit to unveil their jobs proposals was strategic and sym-

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bolic, several political analysts said, especially since they easily could have chosen to give the speeches in the Rust Belt swing states of Ohio and Pennsylvania. It could signal that Michigan will be significant come November, though that’s especially true for Trump, who is trailing in recent polls and whose campaign believes it needs to win Michigan to help secure victory for the GOP in the general election. State and national political observers, though, have Michigan leaning or likely Democratic. The state hasn’t gone for a Republican presidential candidate since George H.W. Bush in 1988. Clinton also has a commanding lead in the fundraising race; she has taken in $2.7 million from Michigan donors, compared with roughly $242,000 for Trump, FEC records show. Neither campaign commented on the record for this story. “There is symbolism that you can’t overlook” about choosing to talk about jobs in Detroit, said Geoffrey Skelley, a political analyst with the University of Virginia Center for Politics in Charlottesville, Va.

Economic differences In May, a poll of 300 business owners and managers commissioned by Crain’s and law firm Honigman Miller Schwartz and Cohn LLP

found low support for both Clinton and Trump. Roughly one-third of respondents had a favorable opinion of both candidates, while Clinton was more unpopular (a 61 percent unfavorable rating) than Trump (55 percent). If the election were held that day, 41 percent of survey respondents would vote for Trump, while 36 percent would pick Clinton. Nearly a quarter were undecided. John Rakolta Jr., chairman and CEO of Walbridge Aldinger Co., introduced Trump and his running mate, Indiana Gov. Mike Pence, for the Detroit Economic Club during last week’s event at Cobo Center. Rakolta, the Trump campaign’s Michigan finance chairman, said he supports the Republican nominee and said he believes his economic plan “has far more probability of being successful and returning the economy back to a growth rate that would, in almost all cases, substantially help the middle class.” Here’s how the two nominees compare on the economy: n Tax policy: Trump would cut the corporate income tax rate from 35 percent to 15 percent, an effort to discourage companies from shifting their profits overseas, a practice known as corporate inversion. Trump also would reduce the number of income tax brackets from seven to three and eliminate a carried interest deduction and the estate tax. Clinton would implement what her campaign calls a “fair share surcharge” on millionaires’ income to make sure that tax breaks don’t disproportionately favor the wealthy, and charge an “exit tax” to companies that choose to move profits overseas, where they are untaxed. n Higher education: Clinton supports making college debt-free.

Trump did not mention higher education or job training during his Detroit address. n Wages: Clinton supports a higher, “living” federal minimum wage. Trump did not mention wages in his Detroit address. n Child care: Trump would allow all Americans to fully deduct the average cost of child care on their income taxes. Clinton proposes 12 weeks of paid family and medical leave and expanding access to affordable child care, including by expanding a child tax credit. n Carbon emissions: Trump would end the “Obama-Clinton war on coal,” which he claimed cost the U.S. 50,000 jobs, by reinvesting in coal mines. Clinton supports reducing carbon and methane emissions by investing in clean energy, while pushing for guaranteed health and pension benefits for miners who worked for now-bankrupt coal companies.

Stand on trade In a relatively new move, Clinton came out against the Trans-Pacific Partnership trade deal, after initially supporting it early in the campaign. Charles Ballard, an economist at Michigan State University, said while Clinton did not spend a lot of time elaborating on her decision to withdraw support for TPP, it stood out in her speech Thursday. “She used to be in favor of it, but pressure from both (Bernie) Sanders and Trump caused her to change her mind,” Ballard said. “She was under a lot of pressure to clarify that, and she did.” The accord is designed to level the playing field for trade among the nations by opening trade and creating consistent environmental and labor standards. For U.S. exporters, the TPP would make 18,000 tariffs disappear. But for Southeast Michigan’s automotive industry — which dominates the list of the state’s largest exporters — the headline-grabbing figure is unlikely to move the needle much on trade, as Crain’s reported in October. That’s partly because the economics of manufacturing have changed. Over the past two decades, the industry has pushed hard to build parts where the final product is sold. That shift is not only to avoid tariffs but, more importantly, to avoid exchange rate fluctuations during shipment and excessive freight costs. The TPP would affect trade in as much as 40 percent of the world economy. TPP countries include the U.S., Japan, Canada, Mexico, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. It is expected to boost the world economy by $223 billion per year, or about 0.3 percent of last year’s global GDP, by 2025, according to the Peterson Institute for International Economics, a Washington, D.C., think tank. However, U.S. companies aren’t expected to feel the greatest economic impact, according to the study. Some business groups have come out in favor of the agreement, while some big companies aren't satisfied that it will expand trade op-

portunities. Dearborn-based Ford Motor Co. is not supporting the accord. In January, Ford said it would close all operations this year in Japan and Indonesia because it saw “no reasonable path to profitability” in the two countries. Ford CEO Mark Fields told Bloomberg last month that TPP did not do enough to prevent currency manipulation from Japan, so it would not support the agreement. “We’re against TPP not because we’re against free trade; we’ve been free traders forever,” Fields told Bloomberg. “But when you look at some of the countries like Japan — they have (manipulated currency) in the past, and we just want to make sure we’re competing on a level playing field.” Both presidential candidates now support walking away from TPP, though Clinton has not gone as far as Trump, who also is calling for renegotiation of the North American Free Trade Agreement. Clinton said Thursday she would hire a “chief trade prosecutor” and triple the number of enforcement officers to crack down on countries that break the rules, even proposing targeted tariffs on bad actors. “The auto companies, in particular, are in a really tough spot, because (Trump has) directly gone after Ford and he’s made the assertion that he’s going to force them to close their plants overseas and bring the jobs back,” said Susan Demas, editor/publisher of Lansing-based political newsletter Inside Michigan Politics. “When he talks about trade, they are really affected if he were to make good on that sort of bombastic rhetoric,” Demas said. “I’m not sure that it would be terribly easy for a lot of executives at the Big Three to fully board the Trump train, but other business executives — I think a lot of them, frankly — are willing to roll the dice despite his many, many drawbacks.” One other possible hurdle for the auto industry: Trump called for a temporary moratorium on new regulations under his presidency. What remains unknown is whether this includes new regulations from the National Highway Traffic Safety Administration, which dictates the use

and rules for new automotive technology. The industry has spent billions on new technology, such as autonomous driving, that are awaiting final rules from NHTSA. Richard Wallace, director of transportation systems analysis for the Ann Arbor-based Center for Automotive Research, said any plan to curtail future NHTSA regulations will impede road safety. “On the safety side, I have some strong concerns,” Wallace said. “Given that we do not yet have a (vehicle-to-vehicle communication) mandate, and perhaps still won’t by 2017, this could fall under such a moratorium and that could jeopardize rollout of cooperative active safety and ultimately cost lives .” Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

Senior reporter Dustin Walsh contributed to this report.

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I-75

FROM PAGE 1

do,” said Rob Morosi, a spokesman for MDOT. Those Band-Aids have been getting pretty expensive for MDOT over the years. Maintenance expenditures on the 18-mile stretch of I-75 increased from $1.1 million in 2012 to $1.9 million in 2016. Morosi said the cost-effectiveness of maintaining the freeway instead of reconstructing it just did not make sense anymore. This portion of I-75 sees a daily traffic volume of 103,000174,000, one of the highest in the state, according to MDOT. Some 90 percent of costs for the project will go toward replacing what exists today. The 18-mile portion of I-75 is one of the most dangerous stretches of highway in the state, according to MDOT. The area had the highest fatal and severe injury crash rate of any comparable highway in the state during a 2010-2014 study by MDOT: More than 1,000 total crashes per year, of which 52 percent were rear-end collisions, which Morosi said indicates that the highway is over capacity and needs to be updated to today’s traffic volumes. I-75 was built from 1957 to 1973 and has not received any major updates like this since. To combat the growing congestion, a High Occupancy Vehicle lane will be created, the first in Michigan, which only cars with two or more people can use during peak hours. But don’t expect to be able to use it anytime soon. There is a federal minimum length that an HOV lane must be before it can be used, and while it will be built in the first segment of the project, it won’t be open for use until after the 2020 segment is completed and the two segments are connected. During his State of the County address in February, Oakland County Executive L. Brooks Patterson said the project will be good for the county’s economy. “Adding a fourth lane … will have a significant impact on commerce and driver convenience,” Patterson said. “Companies support this modernization and will see their employees in safer commutes.” While this extensive and costly reconstruction project should ultimately benefit the area and make transportation quicker and easier, it will cause a lot of short-term pain to the many businesses along the I-75 corridor. Crain’s surveyed its database of companies, asking how the construction would affect their businesses. Some said they would not see much of a difference and would not make a long-term plan to deal with the project. One company spokesperson, who requested to remain anonymous, said the impact on their business would be “substantial. Oakland County needs (I-)75 to survive!” “My associates will not work as hard to grow our practice because they cannot get around without burning an entire day,” the spokesperson said. “I expect business to decline.” Some businesses said they would try to incorporate more videoconfer-

ence meetings during the construction period. Others said they might try using flexible work hours to avoid an even more congested rush hour. Perhaps more important are the delays in deliveries that could disrupt supply chains. “Customers will not want to drive through construction-delayed areas, and internal deliveries of product will take more time (increasing our costs),” said another business spokesperson. Diane DeForest, a spokesperson for Automation Alley, a technology business association with nearly 1,000 members in Southeast Michigan, said it expects the construction to affect about half its employees. The group will encourage them to use an app called Waze, a map ser-

vice that shows the fastest routes based on real-time feedback from other users, to find the best way to get around the construction. Rosemary Gilchrist, chief administrative officer of Giarmarco, Mullins and Horton P.C. in Troy, said the impact on her business would be mostly with employees changing their schedules to either come in earlier and leave earlier or vice versa. Even though she said there will be some pains, Gilchrist is on board with the project. “At the end of the day, I think it’s great, but you have to go through the growing pains. We have to be flexible,” she said. “If we’re ever going to address the infrastructure problem, it has to happen now.” Morosi said that sometimes major

construction projects actually help businesses located on nearby surface streets because of the increase in cars that avoid the highway or are forced into detours. “Every road construction project we do has an impact … but the businesses on the local roads sometimes see an increase in traffic,” said Morosi. “It depends on type of business and location.” A formal detour is expected to be put in sometime during the project, most likely routing drivers to Woodward Avenue or Telegraph Road. An environmental study was launched in 2002 by MDOT to explore ways to reconstruct the highway in the most environmentally friendly way possible, which was approved in 2006 by the FHWA. In 2009,

MDOT completed its engineering report of the area from 12 Mile to M-59, and in 2010 the area from Eight Mile to 12 Mile. The department then had to go back and do an environmental re-evaluation in 2015, which was approved by FHWA in 2016. The general contractor for the project is Shelby Township-based Dan’s Excavating Inc.; Walled Lakebased C.A. Hull is the bridge contractor; Ajax Paving in Troy is responsible for paving. There is an incentive capped at 30 days, $100,000 per day for an early opening of the highway in an effort to speed up work. MDOT also has a five-year warranty on the pavement, so if anything goes wrong within that time, the contractors will be responsible for paying for it.

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

C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 5 , 2 0 1 6

SPORTS FROM PAGE 3

were for men’s college wrestling championships in 2019-22 (with UM as the host school) and the men’s “Frozen Four” hockey championship (with MSU as host). Those events would also be at Little Caesars Arena. The commission also is seeking the Division I men’s and women’s golf championships at Oakland’s Katke Cousins Golf Course in 2018-22. Last year, the sports commission came up short in its bid for the 2019 college football national championship game at Ford Field, but this time is applying for the Division II and III

football championships in 2018-21 there. The host schools would be WSU and Adrian. The commission said it is proposing a championship football weekend at Ford Field with the Division II and III football championships played on the same days. Other championships applied for Friday included Division II softball, Division II men’s and women’s golf, Division III baseball, Division III wrestling, and the college women’s bowling and mixed-gender fencing championships. Various years were sought for each sport. The Division III baseball championship would be played in 2019 at the former Tiger Stadium site that’s now being turned into Detroit PAL’s

INDEX TO COMPANIES

These companies have significant mention in this week’s Crain’s Detroit Business: AccessPoint .......................................................... 4

Michigan Department of Transportation .......... 1

Atlas Oil ........................................................... 12, 13

Residential Home Health ...................................10

Blue Cross Blue Shield of Michigan .................... 4

Roco Real Estate ....................................................3

CoStaff Services LLC ............................................ 4

Simon Holdings Group ........................................ 13

Detroit Sports Commission .................................3

Spectrum Health .................................................10

DTE Energy ..............................................................5

Tikoo Solutions .................................................... 13

Honigman Miller Schwartz and Cohn LLP ........ 9

TNG Worldwide ..................................................... 8

Kensington Church ...............................................3

Trion Solutions ...................................................... 4

Lorient Capital LLC .............................................. 13

Vesta Modular Solutions .................................... 13

Marsh & McLennan .......................................... 8, 9

Willie Horton Field. The sports commission has successfully sought an array of college and amateur events since the organization was launched in 2005. Among them have been the Mid-American Conference football championship from 2004 through the present; the 2009 NCAA men’s basketball Final Four; the 2010 NCAA men’s Frozen Four; the 2015 Big Ten Conference men’s hockey tournament; and, beginning earlier this year, the Horizon League’s men’s basketball tournament. It also has brought wrestling, bowling, gymnastics, skating and volleyball events. The commission also organizes the annual Prep Kickoff Classic at the start of each high school football season. The event began in 2005, and today is played at WSU. Last year’s seven games drew 14,504 fans. The Detroit Sports Commission was launched in 2001 and was known until 2008 as the Detroit Metro Sports Commission. It markets the city for amateur and college sporting events, acts as a go-between for media and corporate relations, and provides organizational services. The commission is a 501(c)(3) non-

profit subsidiary of the Detroit Metro Convention & Visitors Bureau. “The process was very extensive, but exciting to be a part of,” Dave Beauchnau, Detroit Sports Commission executive director, said in a statement. “The effort put in from our team, the host institutions and our local sports organizations was tremendous, and we’re proud of this collaborative effort as well as the future effect it could have on our community.” Bill Shea: (313) 446-1626 Twitter: @bill_shea19

BANKRUPTCIES The following businesses filed for protection in U.S. Bankruptcy Court in Detroit Aug. 5-11. Under Chapter 11, a company files for reorganization. n Eight Mile Holdings LLC, 971 E. Eight Mile Road, Hazel Park, voluntary Chapter 11. Assets and liabilities not available. n United Metal Holdings LLC, 1401 Woodland Ave., Detroit, voluntary Chapter 11. Assets and liabilities not available. CHRIS EHRMANN

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

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

WEEK Motor City Brewing plans Livernois site A

fter a yearlong search, Motor City Brewing Works co-owners John Linardos and Dan Scarsella have chosen a historic building on Livernois along Detroit’s Avenue of Fashion for their second location. The owners of the Midtown brewery plan to open their new location next summer in a 2,000-square-foot space in the former Hunter Supper Club building. It will be joined by Slyde, a fast casual, gourmet slider restaurant.

COMPANY NEWS

nIntending to bring the $32 million Element Detroit at the Metropolitan Building extended-stay hotel to downtown, Metropolitan Hotel Partners finalized the purchase of the Metropolitan Building at 33 John R with the Downtown Development Authority. n Macy’s Inc., the nation’s largest department store chain, announced plans to close about 100 stores next year but did not say which. Macy’s has 20 Michigan stores, 11 in metro Detroit. Meanwhile, Meijer Inc. opened a 150,000-square-foot store in Flat Rock, the last of nine supercenters for the Grand Rapids-based chain to open this year. n Former Visteon Corp. President-CEO Tim Leuliette appeared to win an early round in litigation with his former employer after a federal judge agreed to temporarily halt the Van Buren Township auto supplier’s lawsuit against him in a severance pay dispute. n Southfield-based Lear Corp. renamed its electrical business segment E-Systems to better reflect the complexity of its automotive

C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 5 , 2 0 1 6

ON THE WEB AUG. 6-12

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

$22 million

The amount given by the Toyota Research Institute in a deal with the University of Michigan to boost research and development in artificial intelligence, autonomous driving and robotics over the next four years.

$9.5 million

The estimated cost of parking structure projects planned by Cobo Center, which would give it another 550 parking spaces.

The number of consecutive years that attendance at the Detroit Zoo has surpassed 1 million visitors. The mark was reached nearly three weeks earlier than last year, officials said.

electrical systems. n Detroit-based senior day care and health services program PACE Southeast Michigan is expanding services in Oakland County and has opened a new center in Southfield to replace its Detroit Northwest center. n Revenue for Detroit’s three casinos — MGM Grand Detroit, MotorCity Casino-Hotel and Greektown Casino-Hotel — rose 9.1 percent in July compared to June, said the Michigan Gaming Control Board, but year-to-date aggregate revenue was relatively flat. n New York City-based Delta Air Lines, Detroit Metropolitan Airport’s largest carrier, canceled more than 2,000 flights around the world and

delayed thousands more after a computer outage. n Detroit-based Crain Communications Inc. shut down its Business Insurance brand. The 49-year-old trade publication’s last issue was published Aug. 1, and its website ceased updates last week.

OTHER NEWS

n Nearly a half-acre of property in Detroit’s Brush Park will go up for auction Sept. 19-21. The starting bid is $500,000 for the Brush Lofts LLC-owned properties: the 19,000-square-foot building at 435 Division St., the 2,500-squarefoot building at 2711 Beaubien St., and vacant parcels at 2717 and 2725 Beaubien. n A condominium development with 42 residences is slated for downtown Rochester on the site of the 136-year-old Rochester Elevator Co. grain elevator building. The building could be moved across the street from its location at 412 Water St., or disassembled and then reassembled in the municipal park. n Michigan’s plan to bail out the troubled Detroit Public Schools is putting debt backed by state aid at risk of falling into default if the bonds aren’t refinanced by mid-October, Bloomberg reported. Ratings have been slashed twice by S&P Global Ratings since late June on the district’s debt by a total of six levels to junk. Meanwhile, Steven Rhodes, the retired judge who handled Detroit’s bankruptcy, told the Detroit Free Press he plans to stay as state-appointed DPS transition manager until January. n The median home sale price in metro Detroit in July increased 6.7 percent to $175,000 when compared year over year, Farmington Hills-based Realcomp Ltd. II reported. That’s also up from $173,000 in June this year. However, home and condo sales remained flat in July in the region when compared to a year ago, with a 1.4 percent increase to 5,685 units sold. n A food service worker at Social Kitchen and Bar in Birmingham was identified as being infected with hepatitis A, the Michigan Department of Health and Human Services

AARON ECKELS

High-end sporting goods like this copper-plated bicycle will be made at Williamson Goods, a sports equipment manufacturing company to launch in Detroit next month. Shawn Ward, a Detroit native who founded the Brooklyn-based Ward & Fifth Consulting for startups and early-stage companies, broke the news during the kickoff of the Detroit Homecoming III event last week at the Museum of Contemporary Art. He also announced the opening of an Eastern Market office of his consulting company and a business development initiative, Urban Future Program-Detroit.

said. People who consumed food or drinks at the restaurant between July 16 and Aug. 6 may have been exposed to the virus, officials said. n The Detroit Police Department’s canine unit will receive added field protection with the donation of five bullet-resistant vests. The vests, which cost about $1,000 each, were donated by Cindy Pasky, president and CEO of Detroit-based Strategic Staffing Solutions.

OBITUARIES

n Ernest Lofton, a former United Auto Workers vice president who was the first African-American to direct the union’s National Ford Department for Dearborn-based Ford Motor Co., died Aug. 4. He was 84.

RUMBLINGS Law firm builds case for cloud-based growth

aw firm FisherBroyles LLP is startups and smaller companies in expanding in the Michigan need of top-rate advising, those market. that couldn’t afford his services In April, attorney Michael Khoury previously. He said his services are left Southfield-based Jaffe, Raitt, now closer to $300 or $400 an hour, Heuer & Weiss PC after 12 as opposed to $500 or years to join FisherBroyles more at traditional firms in — which doesn’t have a Detroit. Lance Gable, associate Michigan office. dean at the Wayne State In fact, it doesn’t have University Law School, said any offices. the FisherBroyles model The firm bills itself as can be challenging, but the nation’s first “cloudcould be a model for future based” law firm. Its 150 firms. attorneys, across 20 U.S. “It’s intriguing and in markets, leverage technol- Michael Khoury some ways isn’t surprising ogy to operate indethat law firms are joining a more pendently from the traditional law decentralized model like other firm model in an effort to provide industries are trying,” Gable said. more cost-effective rates to clients. “However, there are challenges. Can “Large overhead doesn’t do much as far as value proposition for they maintain a cohesive culture and support the business-side clients,” Khoury said. “Office space challenges?” is one of the biggest expenses for Khoury said the firm believes law firms. In New York, for instance, Michigan to be a growth market I would have to bill $1,000 an hour and it has plans to expand next to cover overhead. That’s a tough year. It employs three attorneys in sell for a lot of companies.” the state and four others in the Khoury said he joined FisherMidwest licensed to practice here. Broyles so he could work with

New league of ex-NBA players targets Detroit Former Detroit Pistons player Mark Aguirre was chosen last week as the president of basketball operations for a startup summer league that features former NBA players and intends to have a Detroit team by 2017. Details about the Detroit club are to be released by end of this year. Aguirre, 56, was with the Pistons from 1989 to 1993 and won a pair of NBA titles in Detroit. Now he’s the top basketball recruiter and in charge of game logistics for the New York Citybased Champions Basketball League, the new organization said in a statement. Aguirre also played for the Dallas Mavericks and L.A. Clippers and was an assistant coach with the New York Knicks and Indiana Pacers. The new league says it will begin

play this summer with an exhibition season, and in 2017 will play a July-August schedule with 16 teams — including a Detroit squad that has yet to be formed. Teams will play 14 games each, and a championship game would be played in September in Las Vegas. “A Detroit team will be formed for the 2017 season,” league chairman and CEO Carl George said last week in an email to Crain’s. “The ownership group and venue have both been under development and will be announced in the fourth quarter of this year.” It’s not clear to whom the league has talked regarding ownership. Only one team, the New York-based Gotham Ballers, led by team President Walt Frazier and Earl “The Pearl” Monroe as general manager, has been announced.

Inventev seeks backers to open Detroit center Inventev LLC, a TechTown Detroit tenant that is developing and marketing a mobile power-generation system for work trucks, is seeking financial partners for its quest to open a vehicle development center in Detroit. The startup is submitting a proposal to the U.S. Department of Energy on Aug. 29 for the plan, which it is calling the Detroit Advanced Vehicle Integration Center. Inventev is seeking a $4.5 million grant but needs matching support from new equity partners, project funding, in-kind support, economic development incentives or other sources.

Dave Stenson, Inventev’s founder and CEO, said the company would use the center to take its product to market, but also serve as a home for software developers and other startups breaking into the automotive market. “We think establishing a vehicle development hub downtown would be unique,” Stenson said. “We hope it could start out small and expand into a large development space for others.” If Inventev achieves its matching support, the DOE would notify the company whether it is awarding the grant in spring 2017. It received a $500,000 DOE grant in January.

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