Crain's Detroit Business, Oct. 24, 2016 issue

Page 1

Motor City Match long road

Shareholder headaches at Taubman

Winners aren’t just given a check after the competition, Page 3

Activist investor puts mall operator’s board under microscope, Page 4

OCTOBER 24 - 30, 2016

With this issue: Giving Guide For years, metro Detroit depended on the largesse of the Big Three automakers. In corporate philanthropy, there’s a new Big Three in town. See who they are on Page 2 of Crain’s 2017 Giving Guide, packaged with this issue.

City mobility stuck in neutral Southeast Michigan’s major mobility assets

MCity, Ann Arbor: A 32-acre mini-metropolis on the University of Michigan campus that opened in 2015. The test site seeks to replicate modern urban scenarios with traffic jams and pedestrians, suburban streets, highways and rural roads. The $6.5 million site has 40 building faÇades, intersections, a bridge, a tunnel, roundabout and a four-lane highway with entrance and exit ramps.

And check out our new Wish List feature intended to link up worthy projects with givers looking to help, on Pages 12-13 of this issue.

American Center for Mobility, Ypsilanti Township: A proposed $80 million connected and autonomous vehicle test site, owned by the state, that will include a 2.5-mile highway loop, an urban street grid and pedestrian crossings. ACM still seeks up to $60 million in federal funding, with a planned open date in 2018.

As projects accelerate across rest of region, Detroit’s past troubles leave it on outside By Dustin Walsh dwalsh@crain.com

Detroit is not ready to become “Mobility City.” As development focused on mobility technologies — autonomous and connected cars and infrastructure — blooms throughout Southeast Michigan, the city remains largely ignored by the industry’s players and the federal government, which is investing in efforts to increase mobility in urban areas. Last week, the U.S. Department of Transportation awarded Pittsburgh and Denver $17 million to execute

plans to alleviate traffic congestion and create mobility options for their residents. The two awards were another blow to Detroit, which in June also lost the $50 million Smart City Challenge created by the Obama administration to integrate self-driving cars, connected vehicles and smart sensors into a city’s transportation network to boost its residents’ mobility. In a region that aims to lead the global effort for mobility technologies and testing, the city of Detroit has yet to stake out its role in myriad projects to make the region a

mobility magnet. The city, in the aftermath of its bankruptcy and trying to fix more basic services for its residents, hasn’t been able to step up and join the fray to become the centerpiece of the region’s efforts. It is now taking steps: Among them is recruiting a chief mobility officer. The University of Michigan last year established its MCity test site, which focuses on the early development of autonomous and connected vehicles. The state, with support of the automotive companies, will mint the

Southeast Michigan Connected Vehicle Test Bed, regional: A roughly 125-mile sensor installation near I-96 near General Motors Co.’s Milford Proving Grounds, I-94 from Ann Arbor to metro Detroit, U.S. 23 from Ann Arbor to Brighton, and elsewhere. The sensors connect vehicles to infrastructure, such as traffic lights, to help alleviate traffic congestion. Kettering University General Motors Mobility Research Center, Flint: Phase one of this center, which includes a 3.25-mile test track, opened this month.

SEE MOBILITY, PAGE 15

Election unease likely to impact Lansing big-ticket policy items By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

LANSING — In January, more than a third of lawmakers in the Michigan House will be new. If Democrats pick up seats, as they often do in presidential election years, Republicans could be forced

to reach across the aisle more often to pass legislation with a slimmer majority. Democrats have to win nine seats in order to flip control of the House, something they haven’t had since 2010 and a scenario pundits say is possible but unlikely. That combination — of term-lim-

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ited turnover and a wild-card presidential race — will influence how big-ticket policy items are handled in Michigan as lawmakers head into a new term in 2017, though in ways that won’t be clear until after the Nov. 8 election, political watchers say. It could mean the difference between a frenzied post-election lameduck session or the pitching of some items into the new year, and between bipartisanship or gridlock once next year’s session begins. What makes predicting the outcome harder than in other years is uncertainty about voter turnout due both to the polarizing presidential race and the lack of statewide ballot issues this year, and uncertainty about the effect GOP presidential

Tim Greimel: Road funding depends on election.

Mike Nofs: Leading drive for energy law rewrite.

nominee Donald Trump will have on Republicans in state and local contests. “If the Democrats are able to retake majority, I think (it) could completely change the dynamic in Lan-

sing,” said TJ Bucholz, a Democratic communications consultant and president of Lansing-based Vanguard Public Affairs. “I also think that you would have one doozy of a lameduck session.” In all, 42 state House seats are open this year, 38 of them due to term limits. Four seats are up for other reasons. Michigan limits state representatives to three two-year terms. Republicans hold a 62-45 edge in the House, which has three vacancies. If the Democrats win the two empty seats they previously held, they would need to pick up nine more to gain the required 56 seats for a majority. Susan Demas, editor and SEE ELECTION, PAGE 16

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MICHIGAN BRIEFS Flint water panel calls for new state EM rules Michigan should consider abandoning its one-person emergency management structure and instead install a team of three experts when deficit-ridden municipalities and school districts fall under state control, said a report released last week by a legislative committee that investigated Flint’s lead-tainted water crisis, AP reported. The contamination occurred after Flint switched from the metro Detroit utility system to a temporary water source, the Flint River, in 2014. The move, made when the financially troubled city was under state emergency management, was intended to save money until a new local pipeline could be built, but toxic lead leached into the residential water supply. The report, issued by a panel of four Republicans and two Democrats, suggests replacing lead service pipes statewide, lifting emergency managers’ general immunity from civil lawsuits and prohibiting them from using cost as the primary factor in any decision that will affect public health and safety. Other recommendations include the adoption of the country’s toughest lead-in-water rules, increased transparency about

water rates and shutoff practices, and the creation of a commission to oversee the state Department of Environmental Quality, which has been deemed primarily responsible for Flint’s water problems. It also suggests that a community’s water source should not be changed without voter approval. Also last week, the Environmental Protection Agency’s internal watchdog said the EPA had the authority and enough information to issue an emergency order to protect residents of Flint from the contaminated water as early as June 2015 — seven months before it declared an emergency. Inspector General Arthur Elkins said the crisis should have generated “a greater sense of urgency” at the EPA to “intervene when the safety of drinking water is compromised.”

INSIDE

TRAVEL MICHIGAN

The state’s “Cheers to #mibeer” campaign runs through Nov. 28.

The campaign also encourages social media users to show their love of craft beer by posting photos or Vine videos with the hashtag #mibeer, which will be featured in a photo gallery dedicated to Michigan craft beer. Photos can also be uploaded directly to michigan.org/mibeergallery. A dedicated landing page, michigan. org/mibeer, highlights Michigan’s craft beer communities and provides an interactive map to breweries and brewpubs across the state. The state’s growing craft beer industry has created more than 7,100 jobs and has had an economic impact in the state of almost $609 million, according to the Michigan Brewers Guild.

Travel campaign lauds craft beer industry Pure Michigan is celebrating the state’s love of craft beer with a new campaign running through the fall. The “Cheers to #mibeer” campaign by Travel Michigan, part of the Michigan Economic Development Corp., features new digital advertising with interactive experiences, including a “Which Michigan Craft Beer Are You?” quiz.

MICH-CELLANEOUS

J A new private equity company, Grand Rapids-based Auxo Investment Partners, announced commitments for about half of the $50 million fund it is raising to invest in

10-15 small businesses over the next five years. Two of the co-founders and managing partners, Jeff Helminski and Jack Kolodny, previously were managing directors at Grand Rapids-based Blackford Capital. Auxo plans to use equity co-investments from partners and some debt to make its acquisitions. It plans to invest in companies with EBIDTA (earnings before interest, depreciation, taxes and amortization) of $1.5 million to $15 million. J Saginaw-based finance and commercial development firm The WirtRivette Group is planning a new residential project near downtown Grand Rapids, MiBiz reported. Belknap Bluff is a $3.2 million, 11-unit condominium development in Grand Rapids’ Belknap neighborhood. Upon expected completion in 2017, Belknap Bluff will join nearby developments under construction, among them the Gateway at Belknap mixed-use project and an extended Grand Valley State University health campus. J Jim Foguth, president of True Value Builders of Wyoming, has promised to donate 5 percent of his company’s sales to Mel Trotter Ministries, a Grand Rapids-based mission that helps troubled men and women. Foguth told MLive.com he hopes to send Mel Trotter $200,000 by the end of 2017 from True Value windows, siding and roof-

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WEEK ON THE WEB

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COMPANY INDEX: SEE PAGE 17 ing projects. He said he intends to hire and train Mel Trotter’s residents and other disabled, homeless and mentally ill persons at a nonprofit window manufacturing plant he plans to start next year. Foguth said he is motivated by the kindness other employers showed him 27 years ago, when he lost his home, car and possessions after a marital breakup. J Michigan’s unemployment rate rose slightly to 4.6 percent in September, the first monthly increase for the state since June 2009, according to the Department of Technology, Management & Budget. The September rate was half a percentage point lower than the same month in 2015 and four-tenths of a percentage point lower than the national rate of 5.0 percent.

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Property tax debate: What is a charity? Communities question status of some, send property tax bills By Sherri Welch swelch@crain.com

Forsyth said the organization could do better providing aftercare when the businesses open. “That’s where I think we can do more to help our businesses grow and prosper, which is something we’re actively working on in year two of the program.” Motor City Match’s strategy is to offer an enticement to start a business, but, at the same time, it demands that a businessperson provide a percentage of the capital and obtain a sizable portion of financing

A battle is brewing in Lansing on several fronts over how to define a charitable nonprofit that should be exempt from property taxes. A growing number of nonprofits around the state are getting unexpected property tax bills, including local nonprofits like Cass Community Social Services, Downtown Boxing Gym Youth Program, Oakland Community College, Southwest Housing Solutions Corp. and Spectrum Health in Grand Rapids Township. Cities and townships are scrutinizing property exemptions more closely than ever as they continue to face pressure on municipal revenue. While charitable nonprofits have long been exempt from property taxes, communities taxing them argue those taxed are either not charitable or affiliated with for-profit operations that are only marginally tied, if at all, to their charitable mission. Nonprofits are appealing assessments before the Michigan Tax Tribunal and taking denials there to the Michigan Court of Appeals and even the Michigan Supreme Court. At the same time, three bills introduced on the issue have moved recently in the Senate. While one would codify the

SEE MATCH, PAGE 17

SEE CHARITIES, PAGE 18

Motor City Match winner LJ Nelson plans to open Slyde, a slider restaurant, after recently closing on his loan with the Detroit Development Fund. He hopes to get his $45,000 Motor City Match grant in the next few weeks.

LARRY PEPLIN

Work starts after winning Motor City Match entrepreneurs say competition just one of many hurdles By Marti Benedetti

Special to Crain’s Detroit Business

The hoopla and cheers that accompany the naming of the winners in the Motor City Match business competition might make you think they just got handed a check to get their business off the ground. Nothing could be further from the truth. The competition unlocks doors for them, but winners from the first year of the competition say it’s just the beginning of a long road. “People win and the real work be-

MUST READS OF THE WEEK

UAW health fund Retiree VEBA shortfall shrinks again, Page 10

Lear’s big bet

CEO Matt Simoncini talks about new design center — and the future of Detroit, Page 8

All 40 Motor City Match winners — and where they are now, Page 17.

gins. We’re just investors in their project,” said Michael Forsyth, director of small-business services at the Detroit Economic Growth Corp., which runs the program for the city of Detroit. About half of the $2 million in grants, $981,000, has been given out to entrepreneurs so far. Of the 40 winners, 39 are in business or still

working toward it. Winners have hoops to jump through — lots of them. Once they win, they are required to submit a spending plan, and the grants are issued on a reimbursement basis. You use your own money, demonstrate what you spent, obtain one or more loans and receive your grant, he said. Sometimes the order of how that happens varies. “And many of them are facing hard realizations when they open,” Forsyth said. “They need a little aftercare.”

Tigers new game plan: Bolster analytics New emphasis could improve bottom line but imperil team’s costly stars By Bill Shea bshea@crain.com

The Detroit Tigers intend to further invest in advanced analytics — think “Moneyball” — to make better player acquisition, development and spending decisions instead of just writing enormous checks for free agent stars. While specifics of how much additional staff will be added haven’t been revealed, it’s known that the bolstered analytics staff also will be used to help manager Brad Ausmus improve game planning — something that potentially could quell the drumbeat of criticism of his lineups and in-game decisions. The increased reliance on data to supplement scouting and decision-making comes as the team announced a major shift in payroll strategy last week. The era of big

spending appears to be over. And that could mean beloved but aging players such as Miguel Cabrera and Justin Verlander (and their gargantuan contracts) are traded for promising younger and cheaper talent. While such moves would spark fan and media anguish and backlash, the team could be more competitive and financially efficient in the long run — if the front office makes the right moves. An analysis by Crain’s of the Tigers’ player spending compared with their record since 2011 reveals a growing financial inefficiency that’s exacerbated by three years of attendance declines. With a $205.8 million payroll this season and 86 victories, the Tigers spent $2.39 million on players for each win, compared with $1.8 million on average for the rest of Major League Baseball. In contrast, three of the four teams in the American League and National League championship series last week won more cheaply than SEE TIGERS, PAGE 18

The price of victory How much have the Detroit Tigers paid for each win since 2011? They’ve been paying more than league average, and the cost gap is widening. $2.4M

$2.39M

$2.2M

Detroit Tigers

$2M $1.8M

$1.78M

$1.6M

MLB average

$1.4M $1.2M $1M 2011

2012

2013

2014

2015

2016

SOURCE: SPOTRAC’S END-OF-YEAR TOTAL PAYROLL

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Activist investor takes aim at Taubman board makeup By Kirk Pinho kpinho@crain.com

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An activist investor in Connecticut says a shakeup of the Taubman Centers Inc. board of directors could be part of the remedy to what he sees as the severely underperforming stock of the Bloomfield Hills-based mall operator. Jonathan Litt, the Stamford, Conn.-based investor who is co-founder of Land & Buildings Investment Management LLC, said in a presentation submitted to the board last week that its stock is undervalued compared with the value of its luxury mall assets across the world, as well as its real estate investment trust competitors. That has led to what he calls in his letter the “dismal performance of our company,� saying the company’s stock trades well below what it should. At market close Thursday, shares were trading at $73.91; they began the week trading at $70.99 and spiked to $76.37 Wednesday morning on news of Litt’s letter. Litt said with the right actions, including a possible sale of the company, it could trade at about twice that, or $144 per share. Litt said its net asset value is $106 per share. He puts the blame for that on the shoulders of board chairman and company President and CEO Robert Taubman and his brother, COO William Taubman, both sons of the late company founder A. Alfred Taubman; and the six other members of the board, who he said are too homogenous — all white men with an average age of 70 — with too much tenure. That longevity promotes board relationships that are too close, therefore making the board members who aren’t members of the company’s namesake family reluctant to defy the brothers. In addition, they make for stale thinking, said Toni Somers, associate dean of the Mike Ilitch School of Business at Wayne State University and co-director of the school’s Institute for Leadership and Diversity. “You don’t have any new blood,� she said. “If you keep renominating the incumbents, and you’re not filling vacancies with new people when the board terms are over, you get the same sort of skills, the same set of thinking and the same way of doing business.� In response to Litt’s letter, the company said in a statement last week that “Taubman Centers values the strong relationships we have with our shareholders and welcomes open and constructive dialogue toward the goal of enhancing long-term value.� “The board and management are committed to serving the best interests of all of its shareholders. Taubman Centers has an outstanding track record of growth and is successfully executing on a clear strategic plan to own, manage, develop and acquire high-quality retail properties that deliver superior financial performance to shareholders. The

Taubman Centers Inc. board of directors Graham Allison, 76, “founding dean� of the John F. Kennedy School of Government at Harvard University. Jerome Chazen, 89, chairman emeritus and founder of Fifth & Pacific Cos. Inc. Craig Hatkoff, 62, co-founder of Tribeca Film Festival, former vice chairman of Capital Trust Inc. Peter Karmanos Jr., 73, founder of Compuware Corp. and owner of Carolina Hurricanes. Robert Taubman, 62, chairman of the board, president and CEO. William Taubman, 57, COO. Ronald Tysoe, 63, former vice chairman of finance and real estate for Federated Department Stores Inc. (formerly Macy’s Inc.) Myron Ullman III, 69, executive chairman and past CEO and board member of J. C. Penney Co. Inc. Vacant seat: Formerly held by Upjohn heir William Parfet Source: Taubman Centers Inc.

success of Taubman Centers is reflected in the company’s strong long-term financial and operational performance.� In particular, the lack of board gender and ethnic diversity is a problem, said Erik Gordon, clinical assistant professor at the University of Michigan Stephen M. Ross School of Business. “A board that has no women seems to be almost incredibly bad. Same thing for race,� said Gordon. “Do you go to a Taubman mall, walk through it, and not see a woman? You don’t see African-Americans? You don’t see Hispanic people or people from the Middle East? You wouldn’t say that Taubman’s world is a world of 70-year-old white men; it probably includes a small number of 70-year-old white men.� When Lisa Payne, Taubman’s former CFO, left earlier this year to become chairman of Detroit-based Soave Enterprises LLC’s board and president of the Soave Real Estate Group, she had served on the Taubman board as its vice chairman, but was replaced by Myron Ullman III, a former board member, this year. Litt is floating the names of three possible board candidates when the next shareholder meeting is held next year: R. Scot Sellers, the former executive chairman and CEO of Archstone-Smith Trust, an apartment REIT; Dana Hamilton, who is cofounder and president of Ameriton LLC; and Jon Fosheim, who is cofounder of Green Street Advisors LLC,

Robert (left) and William Taubman: The brothers and sons of A. Alfred Taubman make up one-quarter of the company’s current board membership.

a REIT research and advisory firm. Other local publicly traded REITs, such as Southfield-based Sun Communities Inc. and Bloomfield Hillsbased Agree Realty Corp., each have a woman on their boards. Farmington Hills-based Ramco-Gershenson Properties Trust has two. The Taubman board has an open seat following the Sept. 27 resignation of Kalamazoo’s William Parfet amid a lawsuit by a former employee at his MPI Research Inc., the Mattawan-based company where he was president, CEO and chairman, alleging that he sexually harassed her and fathered two of her children for which he has not paid child support. In addition, the terms of two board members, Robert Taubman and Ullman, the former executive chairman and CEO of J. C. Penney Co. and a director on the Starbucks Corp. board since 2003, are up for election next year. Litt wants to reduce the average board tenure from 14 years to less than seven and separate the board chairman and CEO roles, appoint a lead independent director, and put Series B Preferred Stock voting rights to a shareholder vote. Litt’s presentation said Taubman’s malls have the highest average sales per square foot ($789 compared to $605 for peer companies), among other metrics, making it the best publicly traded mall portfolio in the country, but he says the stock price doesn’t reflect that. His recommendations also include halting any major external growth initiatives such as new development; exploration of “management-led privatization or a sale of the company to a third party;� selling assets and buying back Taubman stock; monetizing its Asia business in a joint venture, spin-off company or outright sale; and a sale of the Beverly Center in Los Angeles. Litt’s presentation said the Taubman family paid just $38,400 for its approximately 25 million shares of Series B Preferred Stock, giving it about 30 percent of the shareholder vote. Land & Buildings owns about 141,100 shares, according to Bloomberg LP data. Taubman Centers was founded in 1950 by A. Alfred Taubman, who died in April 2015 at age 91. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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OPINION

Let’s find Detroit’s niche in mobility

A

s Dustin Walsh reports on Page 1, at least four different major efforts are underway to support mobility testing and development in Southeast Michigan. Some are better funded than others. But all are focused on ways to keep the region a major player in the new technology that will transform how people get from Point A to Point B. And what is the city of Detroit’s role in this new mobility world? Other cities — Columbus, Pittsburgh and Denver — have received major federal grants for mobility projects. And the automotive giants in Southeast Michigan are testing in India, Africa, Singapore and New York. Mayor Mike Duggan is reportedly recruiting a “chief mobility officer.” But the city’s role is undefined. A new task force convened by MichAuto, the industry advoA new task cacy group under the Detroit Regional force may Chamber, may help create a strategy for help create a the city. It’s a great time for the players Mistrategy for chAuto pulls together to determine the city. whether there’s a niche for Detroit — or if the entire region should instead put some financial muscle around efforts like the American Center for Mobility in Ypsilanti Township. We should avoid repeating this recent history: Ten years ago, 30 business, workforce, education and civic leaders helped to convene a massive work effort. Called “Road to Renaissance,” the effort eventually involved dozens of people and a handful of consultants who created a blueprint around six strategies for Southeast Michigan. (The convener, Detroit Renaissance, has since morphed into Business Leaders for Michigan, a membership group of the state’s largest companies and public universities.) One of the top priorities was to become the “global center for mobility” in part by creating or expanding an agnostic center to support basic research and new technology development. It never really came together for funding and turf reasons, mostly. But an interesting footnote: In all the research and strategizing, the words “autonomous vehicles” were never spoken. The final report called for creating investments around “advanced automotive” and “alternative fuels.” Disruption is all around us in the automotive industry. Collaboration — and a clear vision for what can and should be — will ensure that Southeast Michigan, including Detroit, remains a key global player.

LETTERS

Tesla should have choice to sell cars in Michigan Editor: Keith Crain wrote “Tesla CEO Elon Musk is attempting to blackmail our governor and Michigan into making an exception just for him.” (“Musk is simply wrong,” Oct. 3, Page 6.) Wrong. The column by Crain was prompted because Tesla has the audacity to want to deal directly with its customers and not be forced by the state government to adopt the franchise business model chosen by its competitors. The government requiring certain companies to franchise and not sell directly to customers in order to legally operate in the state would be absurd on its face when applied to any other industry. Imagine if lawmakers in Lansing required Shinola

or John Varvatos stores to sell their products only via certain state-approved retailers. Consumers should be free to choose whether to shop at a traditional auto dealer, online, or in direct-to-consumer Tesla stores. It’s a question of basic free market capitalism. Tesla is an exciting company with innovative, high-demand cars. It wants to invest in our state and add Michigan jobs. It already employs more than 100 Michiganians and spends more than $1 billion annually in Michigan to directly support hundreds of auto supplier jobs. Why shouldn’t it question the wisdom of continuing that investment if Michigan remains hostile to the company? I’m stunned that Crain can take

such an economically indefensible position and advocate for naked protectionism at the expense of consumer choice and Michigan jobs. Perhaps he should recognize the blackmail that is being perpetrated by the Big Three, the auto dealer lobby and state legislators — not Tesla. Jeff Timmer Two Rivers Public Affairs Portland, Mich.

in races that make a big difference to Southeast Michigan. You may not go into the voting booth with enthusiasm, but there are plenty of candidates and issues that deserve your attention. The one thing on which we all can agree is that this has been the most bizarre presidential election in memory. We should make sure we tell younger voters that it’s not normal. We hope “normal” will resume in the future. But since emotions for and

against the presidential candidates are so strong, the craziness will continue long after the election. We have a very divided nation; sadly, we will probably have a very divided government for a long time on a national level. But we should never lose sight of the fact that local government matters. That’s reason enough to vote. It’s a long ballot, with lots of choices. The important thing is to get out and vote.

Send your letters: Crain’s Detroit Business will consider for publication all signed letters to the editor that do not defame individuals or organizations. Letters may be edited for length and clarity. Email: jhsmith@crain.com

I know, but vote anyway I’m sure there are some folks backing candidates on the November ballot who are wildly enthusiastic about their guy or gal. But my sense is there are not a lot of them out there. The enthusiasm is in their strong dislike for the other candidate. Or maybe the strong desire to see this entire election cycle end. There are not a lot of shining lights this time around. And the general media — if they are not embarrassed by this election, they should be. I have al-

KEITH CRAIN Editor-in-chief

ways believed that news columns should be completely neutral and that opinions belong on the editori-

al page. It is certainly amazing how much advocacy journalism we are seeing. What should be an embarrassment is now the norm. And it is just as bad in broadcasting as it is in print. If you read enough from different news sources, you can sometimes find a neutral report among all those biased points of view. But remember, whatever you think of the presidential candidates at the top of the ticket, plenty of folks are running farther down the ballot

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Jobs in the D looks to match expats with local employers Urbanist Richard Florida once said that Detroit’s greatest export wasn’t cars, it was talent. That may be true — especially during the economic downturns tied to the region’s cyclical, auto-centric economy. But Detroit is one of the hottest brands in the country right now. What better time for college-educated “expats” to think about coming home — for the right career opportunity. And what better time than Thanksgiving weekend, when so many millennials and Gen-Xers are home visiting family. Detroit Homecoming, the annual expat immersion event produced by Crain’s Detroit Business, is partnering with Work Fountain and the nonprofit affinity group Born and Raised Detroit to create a job-matching event, Jobs in the D. It’s the “appetizer” for BARD’s annual “Gobble Wobble” party on Friday, Nov. 25, at The Reserve in Birmingham. From 6-7:30 p.m., job candidates can meet with recruiters from area companies. This is not

TALK ON THE WEB Re: Opinion: Fines show talent gap Schools push the degree-ready curriculum so hard that they perpetuate the problem. Put the kids through four years of basic applied math rather than the college-readiness steps, reinforce the skills they will use, teach them good English and how to read technical documents, not write 15-page essays. Give them life skills. MarkYTH

Re: Lear sees center as turning point Congrats on a solid move by Lear that is a win-win for them and the city. The bigger win, which I hope Lear is planning for, would be to move the HQ to the city. I’m not saying they need to remove all of their people from Southfield, but there is an even greater symbolism if the HQ of a Fortune 500 company can be credited to the city of Detroit and not a satellite town. Much like GM, Ally, Quicken, Little Caesars. BobNB

Re: Keith Crain: Let’s save the Joe With proper vision and purpose, there wouldn’t be the need to just tear down on a whim and rebuild with taxation. Cherry Bowl Reader responses to stories and blogs that appeared on Crain’s website. Comments may be edited for length and clarity.

MARY KRAMER Publisher

your typical job fair. How many times do you meet a prospective employer over a glass of wine or cocktail? Registering as a job candidate is free; employers will pay a small fee

and can also participate in a job fair during a similar “bar night” party on Saturday, Nov. 26, created by the Jewish Federation’s NextGen Detroit young professionals group. Work Fountain is a platform best described as “match.com meets monster.com.” By answering some key questions, employers and job candidates get a better match. Matchmaking for both events will be done in advance, so candidates will meet with company recruiters at an appointed time. But recruiters will also be around informally for “walkups.” Expats looking for a job can visit a

special website to register: http:// crainsdetroit.com/newjob Interested employers can contact Keenan Covington at (313) 446-0417 or kcovington@crain.com for information on registering. The cost for both fairs is $500 for companies with fewer than 100 employees and $700 for larger companies. A similar recruiting event on “bar night” of Thanksgiving weekend in Grand Rapids usually yields a handful of job offers. (Please note: This particular opportunity is for “expats” — people who hail from metro Detroit but now live elsewhere. Local job candidates

can always register for job matches on the Job Connect page on the crainsdetroit.com website.) What parents don’t want their son or daughter closer to home? If your adult, college-graduate kids are coming home for Thanksgiving, give them a nudge to sign up. And employers worried about killing a holiday weekend for their recruiters can relax; young talent in their own organizations may be their best recruiters. They can meet candidates and have fun at the same time. Jobs in the D is supported by the William Davidson Foundation.

E C N HA

C T S LA

KEEP YOUR AD FRESH

WITH CRAIN’S BOOK OF LISTS YEAR-LONG SHELF LIFE ADDS VALUE TO YOUR ADVERTISING EFFORTS READERS REFER TO IT ALL YEAR! • Two-thirds of our readers say YES, they refer back to the Book of Lists • Over half of our readers consider Book of Lists a “must read” • 97% of readers refer back to the Book of Lists more than four times a year

Keeps fresh all year!

Source: Signet Total Audience Survey – Aug. 2015 & July 2016

ADVERTISING INFORMATION: Matt Langan (313) 446-6032, advertisingcdb@crainsdetroit.com

ISSUE DATE: Dec. 26, 2016 CLOSE DATE: Oct. 31, 2016

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DUSTIN WALSH/CRAIN’S DETROIT BUSINESS

To Matt Simoncini, president and CEO of Lear Corp., the Detroit Innovation Center represents the city’s “amazing” role in the supplier’s future.

Simoncini sees Detroit Innovation Center as turning point for Lear By Dustin Walsh dwalsh@crain.com

In a modest corner office on the fifth floor of a former cigar factory in Detroit’s Capital Park, Matt Simoncini hovers between his desk and the window. The windows are new, though they keep with the historic stylings of the 140-year-old building. Simoncini, president and CEO of Southfield-based supplier Lear Corp., is

new to the building as well. Last week, the seating and electronics supplier officially opened its Detroit Innovation Center, an idea to boost technological transformation for the company and a return to the city in which it was founded and the place Simoncini was raised — he attended Clark Elementary School. To Simoncini, the near $10 million investment represents a pivotal moment in Lear’s trajectory as a seating supplier turned advanced automotive technologies developer. But it also serves as a monument to Simoncini’s eagerness to sew his name in the tapestry of the city’s rebirth. “This city is on the cusp of changing the world,” said Simoncini, overlooking Capital Park below. “Urbanization, mass transit, that’s all going to come out of this town. While other places, like Silicon Valley, have players in a big pond. ... We are the pond. Detroit is going to have an amazing role in our future. We’re going to be part of that.” The Innovation Center, at 119 State St., is an open-office environment for Lear’s various business units to work independently of the day-to-day operations of Lear’s headquarters in Southfield. The workers there will focus on next-generation automotive battery charging, seating designs and technology integration, and non-automotive projects. For instance, Lear sews leather for Shinola, provides fabrics for Nike, Under Armour and New Balance and provides textiles for water-filtration systems. “We’re at a pivot point,” Simoncini said. “So much of the work we do sucks everyone in. If I can get those workers out of the mainstream at Lear (in Southfield) and leverage what the city has to offer, we can send big things up the food chain.” Lear is working with Wayne State University and the College for Creative Studies to develop curriculum and

LEAR CORP.

Lear’s Detroit Innovation Center, which the company officially opened on Oct. 18, stands at 119 State St. in Capitol Park.

provide opportunities for those schools’ students. “We (the auto industry) haven’t fully utilized what the city, and its universities, have to offer,” Simoncini said. “These universities are in our backyard. I’m surprised more (companies) haven’t rushed down here to access that talent and help drive innovation.” The Innovation Center isn’t Lear’s first push into Detroit in recent years — in 2010, it opened a joint venture, Integrated and Manufacturing Assembly, on the city’s northeast side. For Simoncini, this is only the beginning. In July 2015, Lear purchased the 50,000-square-foot Hemmeter Building on Centre Street for nearly $6 million. It will house employees from Lear’s shared services, information technology and administrative operations. Simoncini is also bent on opening a manufacturing plant in the city, likely in the ongoing redevelopment CONTINUED NEXT PAGE

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C R A I N ’ S D E T R O I T B U S I N E S S // O C T O B E R 2 4 , 2 0 1 6

Email app startup Notion AI raises funding round of $9.5M Ann Arbor company uses artificial intelligence to organize online messages By Tom Henderson thenderson@crain.com

DUSTIN WALSH/CRAIN’S DETROIT BUSINESS

Lear Corp. contracted graffiti artists to decorate the stairwell in its newly opened Detroit Innovation Center. FROM PREVIOUS PAGE

of the I-94 Industrial Park near Amer-

ican Axle & Manufacturing Holdings Inc.’s headquarters.

But Simoncini is no white knight. He’s a businessman. To create the 500 to 1,000 new union-represented manufacturing jobs in Detroit, Lear has asked for a new classification at a lower hourly rate than at its other plants. Simoncini has discussed creating those jobs in the city instead of Mexico if it could attain a new wage tier with the United Auto Workers that pays in the mid-teens per hour with some benefits. A specified pay rate and benefits would need to be negotiated and are subject to moving up or down, the company said. Lear currently pays $35 per hour, which includes the cost of benefits, at its just-in-time seating plants, and upward of $25 per hour at its component plants. Simoncini said those discussions are ongoing and customers continue to ask for more supplier plants in the city. “There are positive things happening behind the scenes,” he said. “But I’d say we’re only in the second inning; there’s some time before anything happens.” Lear has been aggressive in recent years, building on its two busi-

ness units with several local acquisitions. Last January, it closed on an $850 million acquisition of Auburn Hills-based automotive leather supplier Eagle Ottawa LLC. Nearly half of the cars on U.S. roadways contain leather supplied by Eagle Ottawa. The supplier generated nearly $1 billion in revenue in 2014, up from $485 million in 2011. In 2015, Lear bought the intellectual property and technology of Santa Rosa, Calif.-based Autonet Mobile Inc., an Internet-based telematics and app service provider for the automotive market, and acquired Troybased automotive connectivity supplier Arada Systems Inc. — which supplies vehicle-to-infrastructure technology on roadways, including in the city of Detroit. Swiveling in his office chair, which is Lear-branded, Simoncini spoke of his legacy and the city in which he grew up. “I want to be remembered as the CEO that left Lear better than he received it,” he said. “This is my hometown. Of course, I want to be part of its success. But we take pride in every community we work in, whether that’s Detroit or Munich or Beijing.”

Ann Arbor-based Notion AI Inc., which has created apps that use artificial intelligence to organize and manage the daily flood of email, announced last week it has closed on a funding round of $9.5 million. The round was led by Drive Capital of Columbus, Ohio, and Accel Partners of Palo Alto, Calif., and joined by Chicago-based Hyde Park Venture Partners and California-based Silicon Valley Bank. Notion AI co-founder and CEO Guy Suter, a member of the 2015 Crain's 40 under 40 class, said the company's apps are available for free

download from iTunes and Android. He said the company will charge businesses and institutions to use its services as it adds more features and capabilities. Guy Suter: Users will Company’s apps soon be able to available for free. link Notion to Amazon’s personal assistant device, Alexa, for voice-activated control of their email, he said. “We’re really excited about how

things are going and the team we’ve brought on board. We’ve dubbed ourselves the first communications intelligence company,” Suter told Crain's. He said the company employs 24. “Email is the biggest and baddest form of communication out there,” he said. “We’re all getting swamped by it. None of us can keep up.” In 2005, Suter and Notion co-founder Lindsay Snider founded a Carlisle, Pa.-based company, BitLeap, which did data backup and recovery. In 2008, they sold it to Campbell, Calif.-based Barracuda Networks Inc. and moved to Ann Arbor to work out of its office there. While still at Barracuda, they founded Notion AI in 2013.

WHO WILL MAKE BUSINESS HAPPEN? SPARTANS WILL.

Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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DUSTIN WALSH/CRAIN’S DETROIT BUSINESS

Lear’s Detroit Innovation Center includes rooftop meeting space.

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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 // O C T O B E R 2 4 , 2 0 1 6

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25TH ANNIVERSARY

Join Crain’s for a special 25th anniversary salute to this year’s 40 Under 40 winners.

WEDNESDAY, OCT. 26 55:30 :30 – 9 P.M..

At the Register at crainsdetroit.com/events, or call (313) 446-0300.

UAW retiree trust fund shortfall drops since ’12 By Jay Greene jgreene@crain.com

Long-term underfunding of the Detroit-based UAW Retiree Medical Benefits Trust, which serves 724,000 retired autoworkers and their dependents, has increased somewhat in 2015 to $21.02 billion from $20.7 billion from the previous year, with benefits paid also rising slightly to $4.3 billion, the trust reported. Still, the UAW trust’s shortfall is much less than it was in 2012, when it totaled $33 billion, according to financial records the UAW trust has filed with the U.S. Department of Labor. Medical payments have ranged from $4.2 billion to $4.4 billion over the past six years. “The bottom-line point is that (the trust) is a well-managed fund that is conservative (with investment strategy), trying to maintain benefits for the long term, prudent and careful with assumptions they make,” said Marick Masters, director of labor and professor of business at Wayne State University. “There are no red flags,” said Masters, who reviewed the trust’s recent filings for Crain’s. “The changes that occurred were due to changes in market conditions beyond their control.” The UAW retiree trust was formed in late 2008 as part of a 2007 collective bargaining agreement between the UAW and the Big Three automakers — General Motors Co., Ford Motor Co. and Chrysler LLC. The trust manages health care costs as a single fund, but it maintains separate accounts for GM, Ford and Chrysler to pay the medical benefits for each company’s retirees. At the end of 2015, the trust served about 724,000 retired autoworkers and dependents, a 3.5 percent decline from the end of 2014. The number of retirees dropped 4.8 percent to 361,659 from 380,143 at the end of 2015. In 2015, the trust paid out about $4.3 billion in benefits, which was up slightly from $4.2 billion in 2014, according to the federal filings. Total investments also dropped by $3.7 billion from $60.3 billion to $56.6 billion. Because the UAW’s retirees worked in auto plants their whole lives, medical care is tailored to take care of specific health problems many retirees face. Retired autoworkers have a high prevalence of diabetes, smoking-related ailments like asthma, congestive heart failure and cardiac diseases. Over the six years of the trust, retiree and dependent benefits and services have increased. They include dental coverage, vision care, urgent care, expanded office visits, and such preventive care as colorectal cancer screening and diabetic eye exams and education. In 2015, the trust added full dental and vision coverage for GM and Chrysler retirees. For 2016, it also decided it would not increase cost sharing to beneficiaries. “The trust focuses on managing population health as central to cost management,” said UAW Trust CFO

Mary Beth Kuderik. “When we think about cost containment programs, it’s really around creating programs that affect the overall health of our members for the rest of their lives.” Helping the trust last year was a decrease in future liabilities — or retiree benefit obligations — to $77.3 billion last year from $80 billion in 2014. This decrease primarily was due to an increase in the discount rate used to estimate future returns among the three accounts. The federally required discount rate — a percentage used to estimate future cash demands at present value — increased to about 4.2 percent for the three plans, Kuderik said. The rate, which fluctuates each year, increased from 3.8 percent in 2014 and 4.7 percent in 2013. But part of the reason for the half-billion-dollar increase in the UAW trust's long-term shortfall was a $3.5 billion decrease in net assets to $56.4 billion. Kuderik said the trust had flat investment returns, similar to what most companies experienced in 2015. Total investment income last year amounted to $218 million, but after expenses net investment totaled only $62 million. “The market has been volatile this year, doing well at times, but this is a long-term proposition and the fundamentals have not changed much in 2015 and 2016,” Masters said. For 2016 and beyond, Masters said, it is difficult to predict how the U.S. stock market and world economy will react to a new president and international instability. But Masters said the UAW trust’s 73 percent funded ratio of liabilities in 2015 is very good compared with retiree health plans operated by Fortune 1000 companies. Over the past several years, the trust’s funded ratio has ranged from 70 percent to 81 percent, he said, with higher numbers reflecting stronger financial backing for the liabilities. In 2015, the trust’s funded ratio was slightly higher, at 74.4 percent. “To put this into perspective, twothirds of Fortune 1000 companies had no assets backing up their liabilities,” said Masters, referring to a Towers Watson survey. “Another 13 percent had less than one-third of liabilities funded. In the case of the trust, 73 percent of liabilities funded is a pretty good level.” Over the trust’s six-year reporting period, total net assets available for benefits have dropped only 4 percent from $58.8 billion in 2010 to $56.4 billion in 2015 while benefit obligations to cover the retirees decreased by 2.3 percent from $79.1 billion to $77.3 billion in the same period, federal reports show. “The trust has been able to control actual liabilities by developing effective cost reduction programs,” Kuderik said. “This has contributed to a trend of stable, or decreasing, reported liabilities each year.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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C R A I N ’ S D E T R O I T B U S I N E S S // O C T O B E R 2 4 , 2 0 1 6

CALENDAR

WEDNESDAY OCT. 26

Power Lunch: Ari Weinzweig of Zingerman’s. 11:30 a.m.-1:30 p.m. Brigh-

ton Chamber of Commerce. Weinzweig, co-founder and CEO of Zingerman’s, will discuss the company’s businesses, including Zingerman’s Delicatessen, bake house, creamery, catering, mail order, ZingTrain, the newest business Cornman Farms, others. Mt. Brighton. $30. Website: brightoncoc.org. Women @ Work: Developing Detroit. 3-6 p.m. Wayne State University. Hosted by the Mike Ilitch School of Business Institute for Leadership and Diversity, this is the first in a series of events targeted to help women explore, establish and advance their careers. Keynote speaker is Jennette Smith, editor of Crain’s Detroit Business. A roundtable discussion will include Commercial Real Estate Women professionals in a variety of development-related disciplines. McGregor Memorial Conference Center, Detroit. Free. Contact: Sheri

Perelli, phone: (313) 577-6116; email: ilead@wayne.edu.

2016 Crain’s 40 under 40. 5:30-9 p.m. Crain’s Detroit Business. Annually since 1991, Crain’s has gathered 40 of the community’s top achievers for a special salute. This event will bring together the current class with colleagues, clients, family and friends to celebrate their achievement. Roostertail, Detroit. $125 individuals; groups of 10 or more $120 each; 40 under 40 alumni $95. Contact: Kacey Anderson, email: cdbevents@crain.com; phone: (313) 4460300.

UPCOMING EVENTS

Functional Framework for Business. 8:30-10 a.m. Nov. 1. Automation Alley. Learn to create a functional framework to excel and beat the competition. Speaker: Pavan Muzumdar, founder and managing director of PCS Insight. Automation Alley, Troy. $20 members; $40 nonmembers; $30 walk-in members; $50 walk-in nonmembers. Email:

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events@automationalley.com ; phone: (800) 427-5100. Leading to Win in a Complex World. 4-5 p.m. Nov. 2. Center for Positive Organizations. Gen. David Perkins, commanding general, U.S. Army Training and Doctrine Command, will discuss his philosophy on leadership, his decades of leadership experience, and outline how the Army, and any organization, can grow leaders who thrive in a complex world. Ross School of Business, University of Michigan, Ann Arbor. Free. Contact: positiveorgs.bus.umich. edu/positive-links-speaker-series. Networking Reception with Mayor Mike Duggan. 5:30 p.m. Nov. 2. Detroit

Regional Chamber. Duggan will share brief remarks and introduce his key staff. Ford Field. $15 members; price increases to $25 Oct. 27. Contact: Marianne Alabastro; phone: (313) 596-0479; email: malabast@detroitchamber.com. Oakland University Women’s Leadership Institute. 8 a.m.-5 p.m. Nov. 4.

Conference will feature leaders from business, higher education, nonprofits and government speaking on subjects related to the conference’s title: “Asking for More: Positive Strategies for Change.� Featured speaker is Sara Laschever, author, editor and cultural critic. Detroit Economic Club President and CEO Beth Chappell, Plante Moran Audit Partner Sue Novak, Beaumont Health Senior Vice President Mary Zatina and BW Limited President and CEO Barbara Whittaker will tell their stories of negotiation in a panel discussion moderated by Crain’s Editor Jennette Smith. The conference will also feature breakout seminars called “Matilda Talks,� a nod to university founder Matilda Dodge Wilson. Oakland University, Rochester. $100. Website: wwwp. oakland.edu/diversity/ouwli. APACC Women’s Leadership Conference. 11 a.m.-3:30 p.m. Nov. 9. Asian

Pacific American Chamber of Commerce. Topic: “Leading With Purpose.� Greektown Casino-Hotel, Detroit. $35 members; $45 nonmembers; $10 students. Contact: Van Nguyen, email: van@apacc.net. 5th Annual Michigan CEO Summit. 8 a.m.-2 p.m. Nov. 10. Business Leaders for Michigan. Discussion on how industries are being disrupted here at home and across the globe. Speakers include Patrick Doyle, president and CEO of Domino’s, and William Taylor, co-founder and founding editor of Fast Company. Westin Book Cadillac Detroit. $125. Contact: businessleadersfor michigan.com/ event/2016-michigan-ceo-summit.

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

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C R A I N ’ S D E T R O I T B U S I N E S S // % D A Y _ O F _ W E E K _ D A T E %

Alternatives for Girls Detroit

Autism Alliance of Michigan

Children’s Hospital of Michigan Foundation

1. One new minivan or car for street outreach

1. Auction items for Michigan Shines for Autism Gala (about 100 unique memorabilia or experiences needed)

1. Toys, books or clothing for hospitalized children

2. Hosts for vendor table at Navigating Autism Today parent conference

3. Event hosting

2. Five new single or double baby strollers 3. Audio and visual equipment (50-inch TV, mini desktop computer, and sound bar) for our Prevention Program presentations/workshops

3. Committee members for Young Professionals Board or Women Advocating for Autism in Michigan

Contact: Niki Grabowski ngrabowski@alternativesforgirls.org (313) 361-4000 ext. 273

Contact: Lauren Lewis lauren.lewis@aaomi.org (248) 436-5602

Alzheimer’s Association – Greater Michigan Chapter

Birmingham Bloomfield Community Coalition

1. Committee leadership and team captains for our Walk to End Alzheimer’s and The Longest Day events 2. iTunes gift cards for the Music and Memory program in our day centers 3. $5-$10 gift for coffee shops, fast food, restaurants, dollar stores, etc., to be used as bingo prizes in our day centers Contact: Kristin Rossi krossi@alz.org (248) 996-1063

1. Fundraising assistance through receipt “snap” 2. Advocates for BBCC and its youth-focused mission 3. Event host for fundraising dinner/ event Contact: Carol Mastroianni cmastroianni@bbcoalition.org (248) 203-4615

Boys Hope Girls Hope of Detroit 1. 20 Chromebook laptops

American Autoimmune Related Diseases Association 1. New telephone system 2. Technology assistance: New software, software upgrades and volunteers with IT skills 3. Free advertising Contact: Patricia Barber pbarber@aarda.org (586) 776-3900

Area Agency on Aging 1-B 1. Pro bono PR/Marketing support 2. Strategic partnerships to enhance lives of older adults with and without disabilities Contact: Jenny Jarvis jjarvis@aaa1b.com (248) 262-9202

2. One 15-passenger van 3. Scholarships for high school and for post-secondary tuition Contact: Heidi LeHue hlehue@bhgh.org (313) 862-0707

Canterbury-on-the-Lake 1. Two handicapped accessible vans 2. Auction items such as trips, restaurant gift certificates/cards, baskets, experiences, decorative items, etc. 3. Volunteers to sit on steering committees for 2017 events, such as its Good Samaritan Golf Outing and Gala Contact: Susan Hammersmith shammersmith@cotl.net (248) 674-5390

Capuchin Soup Kitchen 1. New 15-seat passenger van 2. 120-gallon water heater 3. 12 full-size lockers for staff changing area Contact: (313) 579-2100

2. Committee membership Visit www.chmfoundation.org/ howtogive

Cody Rouge Community Action Alliance, CDC 1. 12- to 15-seat passenger van

Easterseals Michigan 1. Auction items for our annual Cheers Gala (restaurant and retail gift certificates, sports memorabilia and sporting event tickets, other unique items and experiences) 2. Advisory council members to help develop connections for employment opportunities and fundraising 3. Committee members for annual Cheers Gala Contact: Norb Promo npromo@essmichigan.org (248) 475-6409

2. SMART Board Interactive Projector 3. Floor model color copy machine Contact: Rebecca Bare rbare@codyrouge.org (313) 397-9280

COTS (Coalition On Temporary Shelter) 1. Women’s clothing (undergarments, socks, pajamas, handbags, shoes, business attire); baby and children’s clothing (undergarments, socks, shoes, school uniforms, diapers)

Family Health Care 1. Six dental chairs (one will be dedicated to children and special needs patients) 2. Nitrous oxide system 3. Assistance fundraising to having nitrous oxide lines run to nine operatories or pro bono assistance running those lines Contact: Annie Schneider aschneider@familyhealthcare.org (231) 689-1608

2. Auction items (special event tickets, sporting event tickets, unique gifts/items, spa or salon gift cards, movie passes, restaurants gift cards, store gift cards)

Franklin-Wright Settlements, Inc.

3. Strategic partnerships in employment, education and/or fundraising

2. 25 passenger buses

Contact: Robyn Smith rsmith@cotsdetroit.org 313-576-0223

Covenant House Michigan 1. Auction items (gift certificates to local restaurants, events, sports activities and memorabilia, getaways, jewelry, etc.) 2. Men’s and women’s undergarments and toiletries 3. Committee membership in Young Professional society Contact: Melissa Golpe mgolpe@covenanthouse.org

1. 10 desktop computers 3. Mentors for after-school enrichment program Contact: Deon Mullen dmullen@franklinwright.org (313) 579-1000, ext. 248

Judson Center 1. Children’s diapers and pull-ups – all sizes 2. Pajamas for boys and girls, sizes newborn to adult 3. New bed linens (pillow cases, twin-size sheets and comforters and crib sheets) Contact: Erika Jones Erika_jones@judsoncenter.org (248) 549-4339

(313) 463-2005

Danialle Karmanos’ Work It Out 1. Event hosts 2. Board membership from strategic leaders committed to health, wellness and children in Detroit Contact: Trish Dewald trish.dewald@dkwio.org (313) 782-4616

Legal Aid and Defender Association, Inc. 1. Portable audio visual equipment to use in self-help clinics 2. Production and printing services for legal awareness materials 3. Cargo van to be used as a mobile legal unit to reach more clients Contact: Teri Donaldson teresa.donaldson@semasg.org (313) 967-5607

C R A I N ’ S D E T R O I T B U S I N E S S // % D A Y _ O F _ W E E K _ D A T E %

It’s time for metro Detroit’s business community to step up. Below, there are more than 100 ideas for companies and professional looking to donate to local nonprofits. An extra van, household supplies, food, bedding, or help with mentorship are among the needs. Stay tuned to Crain’s as we track and report on the donations as part of our Wish List blog on CrainsDetroit.com. Look at what you have and what you can give. Make a difference today.

Loyola High School Detroit 1. Mentors for young men 2. Scholarships for education 3. Corporate work partners for Work Experience Program Contact: Bill McGrail bmcgrail@loyolahsdetroit.org (313) 861-2407

Michigan State Medical Society (MSMS) Foundation 1. Household supplies for homeless and domestic violence shelters 2. Auction items for annual Golf & Tennis Classic fundraiser 3. Marketing/ public relations assistance

Mercy Education Project

Contact: Carrie Wheeler cwheeler@msms.org (517) 336-5723

1. Resource textbooks for Adult Basic Education (valued at $73.96 per person)

Midnight Golf Program

2. A 12-passenger van (new or used in good condition) 3. Premier, high-end, lead auction items for Doorway to the Future 25th Anniversary Gala Contact: Susan Bresler sbresler@mercyed.net (313) 963-5881

Methodist Children’s Home Society 1. Computers, 40 laptops, 10 tablets for children, caseworkers and therapists 2. Furniture, building supplies, paint, etc. to help renovate 80-acre campus 3. Board members knowledgeable about as governance, fundraising, finance and advocacy Contact: Brooke Adams badams@mchsmi.org (313) 531-9464

Michigan Nature Association

1. A dedicated Midnight Golf building 2. Large van, bus or transportation service 3. Strategic partnerships (university and corporate partners to provide scholarships, internships, job and technology (laptops, tablets) to MGP participants and alumni.

Rose Hill Center 1. SUV or van to transport residents 2. Gasoline-powered golf cart (new or used; in good working condition)

1. Board membership and referrals

3. 10 desktop mini business computers for resident use in computer lab

3. Volunteers in health and business to mentor students

Contact: Gayle Flanigan gflanigan@rosehillcenter.org (248) 531-2413

Contact: Beth Hagenlocker info@detroitcreativityproject.org (310) 741-0249

SAE Foundation 1. Volunteers with a passion for STEM education and desire to help raise funds.

The Salvation Army of Metro Detroit

2. Volunteers with expertise in marketing and public relations

2. Bed & Bread truck volunteers

3. Annual celebration event participation to raise funds for learning opportunities for students Contact: Jamie Ferguson jamie.ferguson@sae.org (248) 273-2472

Contact: (248) 443-5500 www.ringbell.org

United Way for Southeastern Michigan

1. Winter coats in various and slim sizes for men, women and children for new Americans (refugees)

3. Volunteers

National Kidney Foundation of Michigan

2. Christmas and birthday gifts for boys and girls, ages 3-12

Contact: Ashley Rule ashley.rule@liveunitedsem.org (313) 595-1592

3. Home goods and furniture (such as new or gently used sofas, chairs, tables, lamps, appliances or mattresses) for new Americans (refugees)

Wayne State University

1. Professional mascot costume for the Regie’s Rainbow Adventure program superhero, who travels to classrooms 2. Updated software, including Adobe Suites and video editing, to help with marketing 3. Leadership training led by exceptional professionals for staff Contact: Mary Hiller mhiller@nkfm.org (734) 222-9800

Contact: Mandy Valentine mvale1@samartias.org (313) 308-2747

Services to Enhance Potential 1. 15-20 computers, monitors and tablets to help establish computer lab

3. 20 auction items (experiences such as trips and high-end events) for annual dinner

1. Unique auction items

2. Strategic partnerships to help provide training, education, internships and jobs

2. In-kind vendor services for events

3. Fundraising assistance

3. In-kind marketing assistance

Contact: Sinziana Luchian sluchian@stepcentral.org (734) 679-0040

Contact: Alexis Weisbrod aweisbrod@ortamerica.org (248) 723-8860

The Children’s Center Ronald McDonald House of Detroit 1. Paper plates, plastic utensils (serves 1,000s of families each year)

2. Sponsors for free day at the Michigan Science Center

2. Cleaning supplies (laundry detergent and window cleaner is not needed)

3. Sponsors to help us adopt a 6th grade classroom for STE(A)M

3. Air fresheners

Contact: Sarah Cook sarah.cook@mi-sci.org (313) 577-8400, ext. 415

3. Blankets/winter outerwear

1. Fundraising support

ORT America

1. 30- or 40-foot Genie lift (and three-year service agreement) to help service the facility

1. Red Kettle bell ringer

Samaritas

2. Heavy duty equipment: 1 skid steer and 1 brush cutter

Michigan Science Center

2. Marketing assistance with website

Contact: Reneé Fluker rfluker@midnightgolf.org (248) 792-9438

1. Three heavy-duty pick-up trucks

Contact: Paul Steiner psteiner@michigannature.org (517) 655-5655

The Detroit Creativity Project

Contact: Chrissy Cooper ccooper@rmhc-detroit.org (313) 745-9487

1. Seasonally appropriate clothing, undergarments and diapers (in all sizes) for babies, children, men and women. New or used shoes, accessories, purses, ties and jewelry. 2. New, unopened toiletries (deodorant, toothbrushes, mouthwash, combs/ brushes, toothpaste, razors, shaving cream, toilet paper, feminine hygiene products, lotions, shampoo, conditioner) 3. Food - nonperishable canned foods, dry goods, baby food and formula. (Nothing in glass, please) Contact: Holly Gorecki hgorecki@thechildrenscenter.com (313) 262-1220

2. Advocates

1. Student scholarships 2. Event participation Contact: Office of Development & Alumni Affairs (313) 577-2275

WCC Foundation 1. Non-perishable foods for emergency pantry for students 2. Auction items (trips, experiences, high-end items, etc.) 3. Digital piano keyboard for music classes Contact: Rose Bailey rbailey@wccnet.edu (734) 973-3360

Wolverine Human Services 1. Volunteers for apple tree procurement and planting, ADA raised garden bed installation and Michigan natural garden design and development 2. Scholarship assistance 3. Fundraising assistance Contact: Matthew Wollack wollackm@wolverinehs.org (313) 824-4400

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DEALS & DETAILS ACQUISITIONS & MERGERS

BNP Media, Troy, a B to B publishing company, has acquired the publication Beverage World and will continue to produce that and operate its BevOps Fleet Summit. BNP will produce and expand the summit while merging Beverage World’s digital and print properties into BNP Media’s beverage industry. Website: bnpmedia.com. Andrews Hooper Pavlik PLC, Saginaw, a public accounting firm, merged with Miller & Associates PC, Ann Arbor. It expands AHP’s Michigan offices into the Ann Arbor community. Websites: ahpplc.com, millerpc.com.

CONTRACTS Ulliance Inc., Troy, a provider of human resources services, has been

retained to provide its Life Advisor employee assistance program service line to GreenPath Debt Solutions, Farmington Hills, and its student assistance program service to Madonna University, Livonia. Website: ulliance.com. Gravity Software LLC, Southfield, a

cloud business management software company, will provide consulting and implementation services to the clients of Thinkfast CRM, Vancouver, British Columbia. Websites: go-gravity.com, thinkfastcrm. com. Plumbing Professors, Canton Township, a plumbing, sewer repair and epoxy pipe lining company, was contracted by the state of Michigan for work at the state police headquarters in Dimondale. Website: plumbingprofessors.com.

Brogan & Partners, Birmingham, a marketing and advertising agency, has been named agency of record for Henry Ford Health System, Detroit. Websites: brogan.com, henryford. com.

Pogoda Cos., Farmington Hills, a brokerage and management firm of self-storage properties, has been awarded management contracts for the former Heritage Movers Self Storage, Warren, and the former Access Storage, Warren. They will operate under Pogoda’s trademarked National Storage Centers. Website: pogodaco.com. Bianchi Public Relations Inc., Troy, has been named PR agency of Valeo North America Inc., Auburn Hills, an automotive supplier, to provide media relations support in North America. Websites: bianchipr.com, valeo.us.

EXPANSIONS Atwater Brewery, Detroit, a craft brewery, has opened at 201 Michigan St. NW in Grand Rapids. Website: atwaterbeer.com. Art Van Furniture, Warren, has opened a PureSleep mattress showroom at 2036 E. Beltline Ave. NE in Grand Rapids. Website: artvan. com. Binson’s Home Health Care Centers Inc., Center Line, acquired two H-Care stores in Flint and Saginaw.

The stores will now operate as Binson’s Medical Equipment & Supplies. Website: binsons.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.

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ARCHITECTURE

ACCOUNTING Patrick Killeen, CPA Managing Partner, Michigan office Baker Tilly Nationally recognized accounting and advisory firm Baker Tilly has announced that Partner Patrick Killeen, CPA, has been named Michigan office managing partner. Killeen joined the firm in 2004 and has served in a number of progressive leadership roles. His vast experience serving both manufacturing companies and those with international needs make him exceptionally qualified to lead the office as it works to serve the evolving Michigan market.

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Paul Bierman-Lytle & Ben Ridderbos Practice Leader, Integrated Sustainability Solutions Practice Leader, Higher Education OHM Advisors Paul Bierman-Lytle, LEED AP BD+C, is leading integrated sustainability practices at OHM Advisors; incorporating high performance and sustainability solutions targeting Net Zero Carbon at Net Zero Cost. An architect and teacher, Bierman-Lytle co-authored the book, Your Natural Home; which has been featured in Architectural Digest, The New York Times, CNN and ABC. He received a Presidential Citation by the AIA as “one of the founders of green design in the USA”. Architect and Practice Leader Ben Ridderbos, AIA, LEED AP, is focused on expanding OHM Advisors’ multidisciplinary body of work across all segments of the higher education market. He brings 20 years of design and planning experience to the firm’s integrated team. His work includes campus housing, dining, classroom and research buildings; campus planning, and infrastructure. He joins OHM Advisors from Lord Aeck Sargent, where he was an associate/project architect.

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Carhartt, Inc. Carhartt has hired Ankesh Modi as its director of pricing and strategic planning. Modi will lead all pricing activities, support the category management team, and lead strategic planning activities to support Carhartt’s senior leadership team.

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

Michael J. Jones Justin W. Stemple “Dealmaker of the Year” & “Top Deal” Warner Norcross & Judd LLP A partner and a client of Warner Norcross & Judd LLP were honored by the Association of Corporate Growth for excellence in mergers, acquisitions and dealmaking. Warner partner Michael J. Jones was recognized as “Dealmaker of the Year” for his leadership and creativity in completing key transactions. During his 12 years with the firm, Jones has led or assisted with 100+ transactions involving billions of dollars in a broad range of industries. Firm client Crystal Flash received the “Top Deal” award in the middlemarket category for its transition to an ESOP, which was led by Warner partner Justin W. Stemple.

PEOPLE: SPOTLIGHT

Tech vet Klein named Genomenon CEO Mike Klein, a veteran of the Ann Arbor tech community, was named CEO of Genomenon Inc., a 2014 University of Michigan spinoff

that uses genome interpretation software to Mike Klein help provide personalized medicine. Mark Kiel, M.D., one of the company’s co-founders, steps down as CEO but continues as chief science officer and vice president of product strategy. Most recently, Klein, 55, was co-CEO of Online Tech LLC.

2 biz development execs new at DEGC Peter Chapman will join the Detroit Economic Growth Corp. as

executive vice president for business development on Nov. 1, and Aaron Turk has been hired as senior exPeter Chapman ecutive of strategy and business development. Chapman, most recently the deputy city manager for economic developAaron Turk ment and housing for Norfolk, Va., was also that city’s executive director of its economic development authority. Turk has worked in the Troy office of The Boston Consulting Group. He spent almost a decade in the U.S. Navy.

Hospital foundation names Burns to lead Lawrence Burns, former vice president for advancement at the University of Akron, is the new president and CEO of the Detroit-based

Lawrence Burns

Children’s Hospital of Michigan Foundation.

A Detroit native, Burns replaces President and CEO Anthony Werner, who resigned in July and had held the post since 2013. Jodi Wong, the interim president-CEO, remains as vice president of operations.

October 24, 2016

MOBILITY

Page 15

REAL ESTATE

FROM PAGE 1

$80 million American Center for Mobility in Ypsilanti Township that is expected to open in 2018. ACM is proposed to include a 2.5-mile highway loop for developers of connected and autonomous vehicles to test their cars at freeway speeds; a grid simulating urban streets, with intersections, buildings and pedestrian crossings; and focus on projects closer to commercialization than at MCity. Kettering University cut the ribbon on the GM Mobility Research Center in Flint earlier this month. Both Ford Motor Co. and General Motors Co. have invested heavily in the ride- and car-sharing services Uber and Lyft, respectively, but they test those services in other cities. Detroit lost the Smart City Challenge, even with the support of Ford, GM, UM, suppliers and dozens more, to Columbus, Ohio — a city with fewer automotive companies, fewer mobility researchers and fewer mobility issues. Why? Columbus “had a very impressive team” leading its effort, and the buyin from both the private and public sector pushed them to the top, said Mark Dowd, deputy assistant secretary for research and technology at DOT. “Those things were very important to us,” Dowd said. “Frankly, they knew who they were and where they wanted to go and provided a comprehensive plan to get there.” Mobility leaders whisper that the DOT didn’t believe Detroit could harness the institutional leadership from the public and private sector to accomplish its proposal, titled “City of Detroit: From ‘Motor City’ to ‘Mobility City.’” Dowd said the proposal didn’t lack leadership, but wasn’t as comprehensive as the others. “Columbus used a model of fundraising that pulled in companies that were domiciled in the city to become a better place, and I think Detroit has some of those characteristics,” Dowd said. “Detroit is in the process of trying to figure out what works for them. The guaranteed success is not there, but the intent is really important.” Leadership in the city remains the biggest barrier, said Jean Redfield, president and CEO of Detroit-based energy and transportation business accelerator NextEnergy LLC and partner in the city’s Smart City proposal. “Our auto companies have testing in India, Africa, Singapore, Manhattan, etc.,” Redfield said. “In conversations, they’ve all said they’d like to do it here. They could expose hundreds, if not thousands, of employees to these pilots (testing). But part of it is they have to have a city that’s willing to work with them.” Redfield said Detroit is lagging behind cities like Columbus, Pittsburgh (where Ford is testing autonomous vehicles with Uber) and Denver because of its financial pitfalls in recent years. “Detroit is the child prodigy in this space, but we’re still a child compared to the grown-ups.” Redfield said. “We’ve come a long way in a short time, but other cities have been

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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 // O C T O B E R 2 4 , 2 0 1 6 CRAIN’S DETROIT BUSINESS

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MCity, the connected and automated vehicle test facility at the University of Michigan's Mobility Transformation Center. talking about this for years because they didn’t have to go through bankruptcy, keep the lights on and knock down abandoned houses.” Mayor Mike Duggan, to his credit, is trying to tackle the problem. The city is recruiting a chief mobility officer to lead a team to coordinate programs in the city. Duggan’s office turned down several requests to comment for this article. Detroit’s need for improved mobility is well documented. In Detroit, 108,000, or 61 percent of employed Detroit residents, travel outside the city for their jobs, according to a 2015 Corporation for a Skilled Workforce

study. Roughly 46 percent of those travel more than 10 miles from home, the study said. Unreliable transportation for the city’s residents precludes many from finding those jobs in the suburbs. The harsh reality is that the city needs to put 49,000 of its residents to work just to match the state average of labor force participation. Creating meaningful mobility options is also key to talent attraction and retention, said Richard Wallace, director of transportation analysis for Ann Arbor think tank Center for Automotive Research. “Ford, GM and the supply base is developing these technologies regardless of what happens in Detroit,” Wallace said. “But the redevelopment of the city, including enhanced mobility, is a key element to attracting young people.” MichAuto, a unit of the Detroit Regional Chamber dedicated to boosting the region’s automotive collaboration and marketing, is assembling a committee to lead new efforts in the city. Roughly 18 organizations have committed to the effort, including: MichAuto, Detroit Economic Growth Corp., NextEnergy LLC, the New Economy Initiative, the Downtown Detroit Partnership, startup accelerator TechStars, venture capital firm Fontinalis Partners and others. Glenn Stevens, executive director of MichAuto, said the Smart City Challenge created momentum for the city to build upon. “There is a tremendous focus by the mayor’s office and different organizations that are both economic development and research, both public and private, all coalescing around a single theme: How do we use our public and private knowledge and public infrastructure to provide mobility solutions to solve problems in Detroit?” Stevens said. But even if the city is able to step up

to tackle mobility in a meaningful way, funding remains elusive and critical. “There’s definitely an opportunity for the city to build on (the Smart City Challenge) proposal and put some of its contents in place,” said John Maddox, CEO for the ACM. “It enabled some high-level planning, but it’ll be very hard to accomplish without a significant cash infusion ... and federal funding.” The 335-acre ACM received $20 million in funding commitments from the state of Michigan, but is still trying to secure an additional $60 million from the federal government. Dowd said the DOT provided the city of Detroit with a list of future grant opportunities and believes the city will be able to receive funding in the future. “Detroit has a wealth of great companies, universities and foundations,” Dowd said. “It came out of bankruptcy with a great energy, and it’s great to see everyone come together to find solutions to its very serious problems.” But Detroit has another wrinkle on the horizon. The Regional Transit Authority of Southeast Michigan’s 20-year, $3 billion tax proposal that’s primarily aimed at creating new and better bus service in Wayne, Oakland, Macomb and Washtenaw counties is on the Nov. 8 ballot. It’s also intended to pick up annual operating costs beginning in 2027 of M-1 Rail, known as the QLine, when the RTA is scheduled to assume governance of the streetcar line from the nonprofit. M-1 began in 2007 as a privately organized and funded nonprofit transit project, and subsequently has added public funding to what is now a $187.3 million project. M-1 represents an impressive collaboration between public and private organizations, like those that secured funding for Columbus, Redfield said. However, metro Detroit has a long history of failing to get a true regional mass transit system organized and funded. If voters don’t approve the tax, what does that say about regional cooperation and the effectiveness of the region’s public-private partnerships to the federal government? “While it’s not necessarily a no vote on the idea of mobility in the region, that conversation is harder without proof points, without that credibility,” Redfield said. “The RTA is critical to the region for that credibility.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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ELECTION FROM PAGE 1

publisher of Lansing-based political newsletter Inside Michigan Politics, said she gives Democrats a 25 percent chance of winning the state House and “a good shot” at four to six seats. Yet if Democratic presidential nominee Hillary Clinton is elected and Michigan Democrats ride her wave into Lansing, “you could see them get to nine. It’s not an outside chance,” Demas said. “Regardless, if the Democrats do pick up seats, that does make the Republican calculus on a lot of issues a lot more tenuous, because then you have to have some of your marginal members take very unpopular votes.” In the queue for 2017: Addressing

Michigan’s poor infrastructure has been at the top of some business groups’ wish lists this term and will carry over into the next session. Republican lawmakers have proposed some tax credits for brownfield projects, angel investing and charitable giving that have not come up for a vote; Democratic leaders in the House say the state needs more tools to encourage economic development, though Snyder is reluctant to use incentives. And no-fault auto insurance reform has stalled, as has a rewrite of Michigan’s 8-year-old energy law.

Road funding Snyder last year signed a $1.2 billion road-funding package that in-

cludes the diversion of some existing spending and some new revenue from raising the gas tax and registration fees. It won’t be fully phased in until 2020-21. The Michigan Department of Transportation is hoping to gain traction in the new session on a complete revision to the state’s road-funding distribution formula that allocates a percentage of road dollars to the state, counties and cities based on population. MDOT’s conceptual proposal would instead award municipalities and counties a new base funding amount, based on the amount they received in 2015. Any extra road revenue collected then would be granted based on several factors, including the type of road — interstates, major county roads or local streets — population and, for bridges, their size. Kirk Steudle, MDOT’s director, said the proposal reimagines road funding from scratch, as if the current formula didn’t exist, and reduces the importance of population in determining where money goes. Snyder called for the Legislature to revisit the formula in 2011, early in his first term. He reiterated the call this year, when he vetoed a bill that would have eliminated a local funding match for state trunkline projects. “I have no preconceived notion that this will be the final version, but it starts the conversation,” Steudle said, adding that the Michigan Municipal League and the County Road Association of Michigan also are working on the issue. He hopes a proposal could go before the Legislature early next year. Tim Greimel, the House Democratic Leader and likely speaker if Democrats win the House, said

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whether the political will exists to tackle road funding again will depend on which party has control. “If you look at the failure of the state to fix the roads, we have been much more aligned on those issues with the governor and with Senate Republicans than the House Republicans have been,” Greimel said. Gideon D’Assandro, a spokesman for the House Republican Caucus, said of the road funding formula: “It’s too early to say what could come up next session. We’re not even sure who’s going to be in office at that point. Obviously, it’s something the administration would like to talk about.” He added that the House GOP is “very confident” it will keep its majority.

Infrastructure The bigger infrastructure issue, Greimel said, is making sure adequate funding also exists for such systems as water and sewer lines and energy transmission. Snyder’s appointed 21st Century Infrastructure Commission is expected to release a report of its findings by Nov. 30, which likely will include recommendations about priorities. Flint’s lead-poisoning crisis has renewed attention on infrastructure needs, particularly drinking-water systems. Snyder proposed budgeting $165 million for a new state infrastructure fund this year, though lawmakers added just $5 million in part because of the need for aid for Flint and lower-than-anticipated revenue estimates. The funding issue could be raised again during next year’s budget debates. Business is paying attention: The Detroit Regional Chamber listed “infrastructure for business and residents” as its top legislative priority this year, including addressing the Flint water emergency, pursuing a Southeast Michigan regional transit millage and improving last year’s road-funding package. Chamber leaders want to revisit the idea of creating a dedicated funding stream rather than drawing so heavily from the general fund, said Brad Williams, its government relations vice president.

Energy There is speculation that lawmakers will push hard on energy policy in lame-duck session, though it will be difficult to move in a short time. Both chambers have been working for two years on an overhaul of Michigan’s 2008 energy law. The Senate’s leader on energy policy, Mike Nofs, a Battle Creek Republican, has been working throughout the summer and fall to drum up support, though lawmakers remain split on issues such as electric choice and mandates for renewable energy and energy efficiency programs. Critics say the bills favor Michigan’s large utilities, while supporters say the legislation would address concerns about longterm reliability and affordability. Senators are not up for re-election in November. But the House is losing a key energy leader in Rep. Aric Nesbitt, R-Lawton, the term-limited energy committee chairman. “If you do see Republicans lose their majority, I’m not sure that you’re

going to see the will to take on something this complicated,” Demas said. “Frankly, Republicans might be happy to let a Democratic speaker deal with this mess next session rather than perhaps paying some sort of political price by doing it before the end of the year.” But Bucholz said Democrats winning the House could be the catalyst to get an energy bill passed by December, in order for the GOP to capitalize on what’s left of its majority: “You would very much see a push by the energy community of biblical proportions to pass the bill as they’d like.”

No-fault reform Reforming Michigan’s no-fault auto insurance system could be harder. Lawmakers have debated ways to lower the state’s highest-in-the-nation driver premiums given that Michigan’s no-fault system provides lifetime medical benefits for crash victims. Provisions in a bill that passed a House committee in 2015 would cap the amount that medical providers could charge for services and that could be spent on family-provided in-home care. The bill also would restructure the entity that covers the costs of lifetime care. On the surface, the debate pits the insurance industry against health care, Demas said, particularly when crash victims testify in support of the current system. In addition, a proposal by Detroit Mayor Mike Duggan to limit medical benefits in an effort to bring Detroiters’ insurance rates down got no momentum. “They’re going to have to look at it next year, no matter what, and rework the legislation as it’s proposed,” said Tom Shields, a Republican consultant and president of Lansing-based public affairs communications firm Marketing Resource Group. The draft that cleared the Senate “was just too drastic.”

Tax incentives Some business leaders, particularly those who work in economic development, have argued that Michigan doesn’t have the tools it needs to compete with more generous states when it comes to attracting companies or new development. Term-limited Rep. Jeff Farrington, R-Utica, proposed restoring a tax credit for angel investors on a limited basis. A group of GOP senators proposed bringing back income tax credits for charitable giving that Snyder eliminated in 2011. More recently, Detroit businessman Dan Gilbert’s Rock Ventures LLC has teamed up with regional economic development agencies across the state to advocate for a sweetened brownfield incentive that would capture state sales and income taxes on large projects. That legislation is pending in the Senate. “We believe that tax incentives have a role to play in job creation in the state,” Greimel said. “We certainly don’t think every tax credit or every tax incentive is necessarily appropriate, but we do believe that many tax incentives merit support where the benefits outweigh the costs.” Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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MATCH FROM PAGE 3

from a lender. It forces them to have a business plan and all their ducks in a row. It also makes businesspeople think hard about where they want to locate their business and helps match their business with appropriate available real estate. Motor City Match winner LJ Nelson readily admitted the process of starting a business in Detroit is nerve-wracking, but said he could not have gone this far without the city’s business grant program. Motor City Match has been a big help “in ironing out all the details,” said Nelson, owner and founder of Slyde, a slider restaurant he is planning to open on Livernois Avenue near Seven Mile Road in Detroit. To start any business, you need to obtain information and learn as you go, he added. Besides Motor City Match, learning has come from his lender, Detroit-based Detroit Development Fund, and Detroit-based Lifeline Business Consulting Services, which helps entrepreneurs with business plans, funding and networking. Nelson said his restaurant will offer 15 different sliders, a selection of po’ boys and seasonal soups and salads. Although construction has not yet started on the building, he hopes to open in April. Slyde will share a building and a courtyard with Motor City Brewing Works’ second location. Nelson recently closed on his loan with the Detroit Development Fund and, in the next few weeks, expects to get his $45,000 grant from Motor City Match. That money will go toward the restaurant’s interior buildout. “Detroit Development Fund has been very good in telling us what we need to do,” he said. “I’ve heard that some (business owners) are having challenges closing on their (bank) loans.” He added that he has kept in close touch with DEGC staff so his business would not get overlooked during the process. Motor City Match said its awards have leveraged more than $13 million in loans and investment for the participating businesses. Additionally, 251 other businesses have received help with business planning and site selection and other support to help them expand. Forsyth said the winners’ demographics reflect the program’s goals: Two-thirds are Detroiters, more than 70 percent are minority-owned, and more than half are women. Detroit Mayor Mike Duggan plans for the program to operate for five years. What that means for Forsyth and other DEGC staff is they continually need to raise funds, which is vital to the success of the program. The DEGC first pursues foundation

Match winners Motor City Match’s 40 winners, and the status of their business, according to the program: OPENED Beautiful Bridal Woodward Throwbacks Hi-Def Graphx Pedicure and Shoes 2 Go Ali-Wali Mama Coo’s Boutique Mo’ Better Blues Coffee And (__) Detroit Training Center UNDER CONSTRUCTION Detroit Sip Black Pride Beauty LLC R&L Color Graphics Sovereign AEC 8044 Kercheval Live Cycle Delight Third Wave Music The Commons Woodbridge Bikes and Coffee P3E, L3C (dba Artesian Farms) Lil Brilliant Mindz LLC

dollars. Next, it contacts community development financial institutions such as Capital Impact Partners, the Michigan Women’s Foundation, Detroit LISC (Local Initiative Support Corp.), Detroit Development Fund, Invest Detroit and the Micro-Enterprise Fund to help entrepreneurs find supplemental loans. “These are nontraditional banks. Their objective is economic development,” Forsyth said. “Their goal is not to make money. They set a precedent for working together.” Forsyth said it is not always the greatest business ideas that win, but people who are organized and come in with the largest percentage of money from lenders. “We want a tangible gap that we can close,” he said. Typically, 20 percent is the owner’s capital, 40 percent from a lender and 40 percent from Motor City Match. Motor City Match also matches fledgling business owners with available Detroit real estate that would accommodate their business. “People get into trouble with the renovation part,” Forsyth said. The real estate is typically the city’s older, empty buildings, which often require substantial, costly, sometimes complex restoration. “It costs three times as much and takes three times as long to do,” Forsyth said. As Motor City Match gets ready to announce its next crop of winners, 39 of the 40 previous winners are in business or preparing to be in business. One has fallen off.

INDEX TO COMPANIES

These companies have significant mention in this week’s Crain’s Detroit Business: Always Brewing Detroit ...................................... 17

Michigan Department of Transportation ........16

American Center for Mobility ............................ 15

Michigan Nonprofit Association .......................18

Baruch Senior Ministries ....................................18

Norma G’s ............................................................. 17

Detroit Economic Growth Corp. ..........................3

Notion AI ................................................................ 9

Detroit Tigers .........................................................3

Taubman Centers ................................................. 4

Lear ......................................................................... 8

Twisted Roots LLC ............................................... 17

MichAuto .............................................................. 15

UAW Retiree Medical Benefits Trust ................10

FINANCING Amaze-Enjoyment LLC Astute Artistry Brix Assemble Sound LLC Flow Inc. (dba Twisted Roots) Block Party Meta Physica Wellness Center Bamboo Detroit Detroit Vegan Soul Demitart Gourmet (dba Norma G’s) Advance Plumbing and Heating Supply Beau Bien Fine Foods Guadalajara #2 Inc. J&G Pallets and Trucking I’m Here LLC Slyde DMex Mama Rita Foods Pharmacy 4 Less WITHDRAWN Always Brewing Detroit

One washes out Motor City Match winner Always the Grandmont-Rosedale neighborhood is closing its doors. Owner Amanda Brewington applied last year for the grant to expand her coffee shop and start a commercial kitchen next to her shop. But she recently decided the shop did not make financial sense and the business was not allowing her to have the quality of life she wanted. “I run the shop on my own, with just a little bit of help. But I don’t have a business partner,” she said. “I make some money, but not enough, so I work other jobs. I bartend and teach an entrepreneurship class at the Build Institute.” Nov. 1 is the shop’s last day. She hopes someone will buy the business and said she has interested parties. “I have a tremendous amount of respect for Amanda,” said Forsyth, “and she’s been a tremendous champion for entrepreneurs and the community.” Brewington told Motor City Match she couldn’t make enough money from the business with or without the expansion and planned to close or sell the business, and she never received her Match award. Brewing Detroit in

www.crainsdetroit.com

Motor City Match winner Teresa Norman and her daughter McKenzie of Twisted Roots LLC.

Hurdles and holdups Teresa Norman, owner of Twisted Roots LLC and a Round 4 Motor City Match winner, planned to put her beauty supply store on the second floor of a historic house across from Eastern Market near Gratiot Avenue. But just using part of the house did not make sense to lenders. She took a step back, realizing she needed to develop the business and remodel the entire building she bought at the same time. Having an open plan suited her business better. The house used to contain seven apartment units. Now she is waiting for her loan with Invest Detroit to close. After that, she will receive the $75,000 grant she won from Motor City Match.

‘Gap funding’ Lester Gouvia, owner of Norma G’s food truck, plans to open Norma G’s Caribbean restaurant in an old bank building on East Jefferson in the Jefferson-Chalmers neighborhood. He said the Motor City Match grant totaling $60,000 is, quite simply, “gap funding” compared with the more than $350,000 his business may cost. He has had to knit together several loans to reach his startup costs. “We’re about 90 percent there,” he said. He’s in the process of obtaining the building from Jefferson East Inc. and getting construction permits pulled. He hopes to open next spring. To start, he plans to serve only dinner featuring Caribbean dishes such as curry chicken with jasmine rice, Jamaican beef patties, vegan curry and chicken pelau. Gouvia’s situation is a bit different than other winners. His restaurant is part of JEI's revitalization plan for the Jefferson-Chalmers neighborhood. “They tasted my food and heard my plan and thought my restaurant could be a fine dining destination for the area,” Gouvia said.

BANKRUPTCIES The following businesses filed for protection in U.S. Bankruptcy Court in Detroit Oct. 14-20. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. America’s Best Bath LLC, 34750 Van Dyke Ave., Sterling Heights, voluntary Chapter 7. BMC Masonry Inc., 271 Annison Drive, Commerce Township, voluntary Chapter 11. Assets and liabilities not available. Rojo One LLC, dba Duel Novi, 44375 12 Mile Road, Novi, voluntary Chapter 11. Assets and liabilities not available.

Rojo Two LLC, dba Rojo Mexican Bistro, 401 N. Main St., Rochester, voluntary Chapter 11. Assets and liabilities not available. Rojo Four LLC, dba Rojo Mexican Bistro, 14600 Lakeside Circle, Sterling Heights, voluntary Chapter 11. Assets and liabilities not available. Rojo Five LLC, dba Sidecar Slider Bar and Rojo Mexican Bistro, 250 Merrill St., Birmingham, voluntary Chapter 11. Assets and liabilities not available. Rojo Six LLC, dba Rojo Mexican Bistro and Michigan Beer Co., 42875 Grand River Ave., Novi, voluntary Chapter 11. Assets and liabilities not available.

Editor-in-Chief Keith E. Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Associate Publisher Ron Fournier, (313) 446-1674 or rfournier@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 Digital Editor Carlos Portocarrero (313) 446-6056 or cportocarrero@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, manufacturing and economics. (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/Events 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 Senior Executive Vice President 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.

18

TIGERS FROM PAGE 3

Detroit, too. The Cleveland Indians, who won 14 of 18 against the Tigers this season, spent nearly $1.2 million per victory less than Detroit to win games in 2016. And Cleveland, as AL champion, is going to the World Series. After the season, Tigers General Manager Al Avila met with team owner Mike Ilitch to discuss plans for 2017. What emerged was a consensus to pare back the spending on players while still trying to contend. “We certainly want to be able to try to get back in the playoffs. But at the same time, this organization has been working way above its means as far as payroll for many, many years, and it has put us in a situation where, quite frankly, it’s difficult to maneuver,” Avila said in a yearend talk with reporters last week. Ilitch didn’t set a dollar amount for payroll, Avila said. Avila also explained his talent strategy: “It’s very difficult to run a successful organization long term by just signing free-agent players. I don’t believe that’s really the best way to have success. I think in long term the best way to have success is to scout good players, draft good players, sign good players, develop them, bring them through your system. Then, with the addition of some smart trades here and there, then you have a good foundation. Then as need-

CHARITIES FROM PAGE 3

criteria for any nonprofit to be considered charitable and exempt from property taxes, others would carve out singular exemptions for Masonic lodges and sportsmen’s clubs. At the core of the issue is what criteria should constitute a charitable nonprofit and whether all of the properties they own and operate should be exempt. A 2006 Michigan Supreme Court case, Wexford Medical Group vs. the city of Cadillac, laid out six criteria for assessing a charitable nonprofit. But the Michigan Nonprofit Association and Council of Michigan Foundations and others disagree with groups including the Michigan Department of Treasury and Michigan Municipal League on whether some or all of the factors must be met. Over the past two years, the Michigan Nonprofit Association has heard from many of its members that their tax-exempt status has been challenged, said President and CEO Donna Murray-Brown. As municipalities face increasing need to identify new sources of revenue, “it’s calling into question the value nonprofits bring,” she said. Nonprofits granted 501(c)(3) status under the Internal Revenue code are considered charitable because they are providing broad community benefit. They receive a tax benefit, but they give up profit, privacy and any involvement in partisan politics in exchange. “They are doing charitable work that decreases the burden on government and deserve to be exempt from property taxes.” The Michigan Municipal League and its members support charitable organizations in their communities, said

C R A I N ’ S D E T R O I T B U S I N E S S // O C T O B E R 2 4 , 2 0 1 6

Detroit Tigers top salaries for 2017 Miguel Cabrera: $28 million Justin Verlander: $28 million Justin Upton: $22.1 million Jordan Zimmermann: $18 million Victor Martinez: $18 million Anibal Sanchez: $16 million J.D. Martinez: $11.75 million Ian Kinsler: $11 million

ed, you would add free-agent players from time to time. That’s how you sustain success long term.” That strategy includes listening to offers for star players. “As an organization, we have to have an open mind. You have to pick up the phone and engage in dialogue and see where it takes you,” he said. Veterans such as Cabrera and Verlander have no-trade contract clauses that require their approval to be sent elsewhere. Such trades would reverse the Tigers’ philosophy for years under former GM Dave Dombrowski, whom Ilitch fired in 2015 and replaced with longtime assistant GM Avila. Under Dombrowski, Ilitch developed a reputation as an owner willing to write checks for stars he believed would get the Tigers that elusive World Series championship they’ve been chasing Chris Hackbarth, director of state and federal affairs. “We think there are absolutely important charitable institutions that deserve to be treated with tax-exempt status.” But there are others who take advantage of the exemption, and the loss of that revenue equates to losses in local services such as those for public safety, he said.

Charities fight back By MNA’s July count, more than 70 charities from around the state are appealing local property tax assessments before the Michigan Tax Tribunal, up from 42 last year. It’s not clear, however, how many of the property tax cases involving nonprofits involved a claim of exemption vs. challenging the amount of assessments. In hearing nonprofit property tax appeals, the tribunal’s judges generally rely on Wexford and the 2008 Michigan Supreme Court case Liberty Hill Housing Corp v City of Livonia, which further clarified Wexford, said Michael Loepp, communications representative for the Michigan Department of Licensing and Regulatory Affairs.

While some have prevailed before the tribunal, others have not. Some have taken their cases to the Michigan Court of Appeals. And failing again there, at least one has taken its case to the Michigan Supreme Court. Baruch Senior Ministries, a faithbased nonprofit that operates 23 assisted living, independent living and memory care facilities for seniors across the state, is fighting property tax assessments from 15 of those communities. After losing its appeal of a property tax assessed by the

since 1984. It nearly worked in 2006 and 2012, and they’ve won a lot of games. But they haven’t won it all. Now, Ilitch and his family apparently have reached their limit for what have been diminishing returns on payroll. In baseball, the only major U.S. pro sport without a salary cap, player payroll spending’s only true threshold is the team owner’s fiscal tolerance. In Detroit’s case, billionaire pizza tycoon Ilitch, who bought the Tigers for $85 million in 1992, for years was forthright about his willingness to spend like a large-market team in a midsized city. “I’ve been in baseball for a lot of years. I didn’t care about spending money,” he said during a December press conference to announce the signing of pitcher Jordan Zimmermann to a five-year, $110 million contract. “I don’t care about the money. I want the best players.” That thirst for a World Series — Detroit native Ilitch, 87, was a Tigers minor league player in the early 1950s — fueled enormous payroll spending. Since buying the team, Ilitch has spent more than $1.8 billion on player salaries. Of that, $1.4 billion has come since 2006. The family has also ramped up spending on other projects. The Ilitches over the past two years have announced $2.2 billion worth of investments in a sprawling 50-block mixed-use development called The District Detroit that’s anchored by a Township of Tittabawassee near Saginaw before the Michigan Tax Tribunal and the Michigan Court of Appeals, Baruch has taken the case to the Michigan Supreme Court. “Ninety-eight percent of the people who come into our homes spend the rest of their lives with us, even if they run out of funds,” founder and President Thomas Noble said last week during testimony before the Senate Finance Committee. Those people would have to move to state-funded Medicaid facilities if they couldn’t stay in Baruch’s residences, he said, costing the state an estimated $7 million to $9 million a year, Noble said.

Legislative battle While litigation continues, the battle has expanded to the Legislature. Two bills would carve out property tax exemptions for Masonic groups and sportsmen’s clubs. Senate Bill 570, introduced in October 2015 by Sen. Peter MacGregor, R-Rockford, would exempt 501(c)(3) nonprofit sportsmen’s clubs established for the primary purpose of educating the public in conservation, hunting, fishing, archery or hooting sports and firearms safety, passed the Senate in September and is before the House Committee on Tax Policy. And Senate Bill 732, introduced in February by Sen. Rick Jones, R-Grand Ledge, to exempt the state’s 275 Masonic lodges, which are organized as nonprofit fraternal groups, from property taxes, passed the Senate last week and is now before the House Committee on Tax Policy. Companion House Bill 5325, introduced by Rep. Ken Goike, R-Ray Township, the same month, has not

$627.5 million hockey arena for their

Detroit Red Wings, and a $150 million headquarters for their Little Caesars

pizza chain. If the Ilitches are feeling financially stretched and need the Tigers to trim spending, they haven’t said. The family rarely comments on its finances beyond disclosing $3.3 billion in combined 2015 revenue across all of its holdings. The team certainly is an expense. It has $153 million tied up in just eight players for 2017, topped by Cabrera and Verlander each getting $28 million. Additionally, ex-Tiger Prince Fielder is being paid $6 million annually from 2016-20 as part of the deal that sent him to the Texas Rangers for second baseman Ian Kinsler. Millions more are spent each season on the manager, coaches and other non-player personnel. The Tigers’ revenue has grown from $170 million in 2009 to $268 million in 2015, according to Forbes, but they’re also estimated to have lost money five of the past 10 seasons. Of course, there have been hints in the past that the freewheeling spending was done, and then Dombrowski and Ilitch would spring a megadeal. Increased investment in analytics should, in theory, help the Tigers improve their chances of making smart deals. The team has lagged behind most of MLB in sabermetrics — a term moved since it was referred to committee in February. The Michigan Municipal League is opposed to the sportsmen’s club and Masonic lodge bills. At the behest of the Michigan Nonprofit Association, with support from groups including the Council of Michigan Foundations, Sen. Jack Brandenburg, R-Harrison Township, introduced a bill in May to address the issue more broadly. Senate Bill 960 would codify the requirements to be considered a charitable nonprofit for property tax exemption. In the works for about two years, SB 960 would amend the state’s General Property Tax Act by adding the criteria for a charitable nonprofit and granting property tax exemption for nonprofits that meet it. The bill passed the Senate finance committee last week and is headed to the full Senate, despite strong opposition from groups including the Michigan Department of Treasury, the Michigan Municipal League, the Michigan Townships Association and Michigan Association of School Boards, who argue that the bill expands

nonprofits that could qualify for the exemption by broadening the standards set out in the Wexford case. Murray-Brown contends the language in the version of the bill passed tightens the Wexford qualifications for exemption by requiring an organization to not only be a 501(c)(3), which is organized as charitable under the IRS code since it provides a community benefit, while also meeting additional criteria outlined in the bill. “The intent is to make this easier for nonprofits to have a road map to follow to claim the exemption and to give assessors the same certainty,” she said. Nonprofits deemed charitable and exempt from property taxes would

for the empirical analysis of baseball statistics pioneered by author and analyst Bill James and named by him for the Society for American Baseball Research. A February 2015 ESPN analytics ranking deemed the Tigers to be “skeptics” of data-driven analysis and decision-making. Detroit’s data effort is led by Jay Sartori, senior director of baseball analytics and operations, an ex-Apple executive and former Toronto Blue Jays assistant general manager, and Sam Menzin, director of baseball operations. Avila last week said the new strategy would take a couple of seasons to execute, and warned that it’s not an overnight process. He also dithered about using the terms “rebuild” or “reboot,” but whatever you call it, his aim is to reconstruct the Tigers roster to be younger, cheaper and, ideally, more talented. That’s the dream of efficiency. How well that plays out depends on Avila and the front office’s ability to identify and develop talent, and how to unload the current roster of bloated contracts while getting longterm value in return. “Changes are coming,” Avila warned. If they fail, the change coming may sweep them away, too. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

need to meet two of four criteria: The charitable nonprofit offers services to the public without discriminating based on an individual’s ability to pay, health or other factors and has a policy to assure its services are available to all of those in need. J It is organized to advance education, advance religion, promote health and wellness, relieve poverty, erect public buildings or other public works, promote a governmental purpose or alleviate burdens or responsibilities that would otherwise be borne by the government. J It charges no more for its charitable services than is reasonably necessary to maintain the operation of the organization. J It has an overall nature that promotes charity, regardless of the amount it devotes to charitable activities on an annual basis. Opponents of the bill, including the Michigan Municipal League, Michigan Townships Association and the Michigan Department of Treasury, believe the language in the bill is too broad and would allow more nonprofits to qualify for exemptions from property taxes. Treasury estimates SB 960 could impact revenue by a median amount of about $50 million a year — a figure that includes sportsmen’s clubs, Masonic groups and other noncharitable organizations posing a loss to the State School Aid Fund and local entities. Dexter Mayor Shawn Keough was among others testifying against the bill. “Nonprofit organizations have become increasingly sophisticated. This issue to me is an issue of fairness and integrity,” he said. “Only properties where truly charitable activities take place should have the exemption.” J

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

19

C R A I N ’ S D E T R O I T B U S I N E S S // O C T O B E R 2 4 , 2 0 1 6

THE WEEK ON THE WEB OCT. 15-21

Free Press columnist Sharp dies Drew Sharp, the longtime Detroit Free Press sports columnist, died Friday at his Bloomfield Hills home. The cause of death was hypertensive cardiovascular disease, the Oakland County Medical Examiner’s office

confirmed. Drew Sharp Sharp, 56, had been with the newspaper since 1983 and became a full-time columnist in 1999.

COMPANY NEWS J Groundbreaking on a $160 million hospital expansion and renovation project at Beaumont Hospital Farmington Hills is slated for Tuesday. The project, originally set to begin in late summer 2015, will include a five-story, private room patient tower and expansion of the hospital’s emergency department and critical care unit. J The Detroit Medical Center submitted its formal corrective action plan for health code violations in its sterile processing department to the

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

$5 million

The amount of a grant announced by J.P. Morgan Chase & Co. to go toward a $30 million Strategic Neighborhood Fund to dedicate resources to commercial and residential real estate, jobs and community infrastructure in the West Village, Southwest Detroit and Livernois-McNichols areas. The fund will support the Detroit Strategic Neighborhood Initiative.

$27 million

What the University of Michigan will receive from Shenzhen, China-based Frontt Capital Management Ltd. to boost driverless vehicle research and for the university to help establish a test facility in China.

$50 million

What Detroit’s Motown Museum plans to devote to an expansion that will add 40,000 square feet to the existing Hitsville USA house on West Grand Boulevard. The expansion would include interactive exhibits, a theater, a cafe and expanded retail space.

Michigan Department of Licensing and Regulatory Affairs. The action plan

contains mostly previously disclosed steps DMC will take to address several violations found in an August inspection by LARA. J As part of a cost-cutting effort, Comerica Inc. will close 16 Michigan branches by the end of 2017. In May, the bank plans to close four Southeast Michigan branches — in Bloomfield Hills, Canton Township, Clinton Township and Plymouth — to go with previously announced closures. J Livonia-based Cole, Newton & Duran CPAs bought two accounting firms — Novi-based Michael G. Thomas CPA and Livonia-based Bartos, Hoffer Lustig & Tomes PC — and boosted its employee count from 26 to 41. Terms were not disclosed. J Auburn Hills powertrain design and development firm FEV North America Inc. acquired a 51 percent stake in Redford Township-based testing firm TrigTec LLC. Financial terms were not disclosed. J Auto parts supplier Martinrea Metal Industries Inc. plans to build a technical center and future corporate office in Auburn Hills, adding 60 jobs. The plans resulted in a $420,000 performance-based grant from the Michigan Strategic Fund. J Pontiac-based DeGarA PLLC, an emergency physician group, merged into American Physician Partners, a Brentwood, Tenn., ER group. APP will provide back-office services to DeGarA, which will keep its name. J Co-working company Bamboo De-

MAGICBUS

Silicon Valley-based MagicBus, a commuter shuttle service that picks up people near their home and drops them off near work, said it plans to launch in metro Detroit in the next two weeks.

troit said it will open a second Detroit location, in the Julian C. Madison Building downtown, in January. J Detroit-based Huron Capital Partners LLC bought Minnesota-based HME Products LLC, which designs and distributes tools to assist hunters. It is the first acquisition for Dallas-based Good Sportsman Marketing, a hunting accessories company Huron formed in June. J Detroit-based Fontinalis Partners LLC and New York City-based Lux Capital led a seed-round investment of $6.5 million in Austin, Texas-based Hangar, which makes software to capture data using drone technology. J Redford Township sneaker and sports apparel chain Elite Mr. Alan’s said it plans to invest $15 million and hire 350 employees in the next 18 months to expand in Michigan, Chicago and Florida. The company will open a northwest Detroit store Nov. 1. J The Michigan Department of Envi-

ronmental Quality reached a consent order with Novi-based gas station operator Knight Enterprises Inc., which is to pay $100,000 to cover MDEQ’s future costs related to 21 leaking underground storage tanks. J Columbus, Ohio-based Huntington Bank ranked second nationally and No. 1 in Michigan for the number of U.S. Small Business Administration 7(a) loans for the fiscal year that ended Sept. 30. J Plymouth auto components maker E & E Manufacturing announced a $23.5 million expansion to its facility in Athens, Tenn., that will create 123 new jobs, AP reported.

OTHER NEWS The Michigan Department of Treasury released Wayne County from its

J

consent agreement with the state over its finances, although Warren Evans, the county executive, cautioned that work in righting the county’s financial ship is far from over. J The U.S. Department of Treasury released $42 million in funding for Detroit’s blight demolition program now that several new protocols have been adopted in light of federal concerns over contracting. J The Woodward Avenue Action Association scrapped plans for an automotive welcome center and visitor attraction at the historic Ford Motor Co. Highland Park Plant office building in light of a bumpy road to secure financing. J Wayne State University and Ann Arbor-based Merit Network Inc. said they will again collaborate on a cybersecurity project, joining Central Michigan University and Northern Michigan University in a new training initiative to roll out next year. J The Eli Broad College of Business at Michigan State University announced it will make its executive MBA program available in Detroit starting next summer. J The Detroit Health Department, in investigating two cases of hepatitis A in connection to the prepared foods section at Whole Foods Market in Detroit, recommended that anyone who consumed prepared foods at the Whole Foods at 115 Mack Ave. Oct. 6-12 speak to a physician and seek treatment. J The Michigan Strategic Fund approved a grant of $200,000 to continue the Train the Trainers program, managed by the University of Michigan’s Center for Entrepreneurship. The program trains entrepreneurs, researchers and inventors. J A yet-to-be-named restaurant with a varied menu and full bar will open at the new apartment development The Scott at Brush Park in August. Also, a Ford’s Garage restaurant is under construction and slated to open next spring in downtown Dearborn. J The Great Lakes Water Authority has put $1.3 billion in bonds up for sale as an effort to refinance existing debt and pay for capital improvement projects. It’s the first bond sale for the 2-year-old authority.

RUMBLINGS

The Distinguished Clown Corps is a big fundraiser for The Parade Co.

Parade: Clown tradition will go on

Unbowed by a spate of “creepy clown” sightings around the country, The Parade Co. is still sending in the clowns. The Distinguished Clown Corps won’t change its act in next month’s America’s Thanksgiving Parade presented by Art Van. In the past couple of months, sinister clown sightings, real or imagined, have been reported in 20 or more states. In Michigan, costumed characters have reportedly been seen in more than 20 communities, according to MLive. People committing crimes while wearing clown masks have received media attention.

But the phenomenon will have “zero impact” on The Parade Co.’s plans to host the clown corps in Detroit again this year, President and CEO Tony Michaels said. “It’s a tradition and a major part of the event,” he said. The corps is also a significant fundraiser for the The Parade Co. Since its launch 33 years ago, the corps — whose members are local business and community leaders, philanthropists and others — passes out beads and candy to children lining the parade route, and has contributed more than $5 million to the parade’s nonprofit organizer.

Women in Defense honors 4 at gala The Michigan chapter of Women in Defense was set to honor three women for outstanding contributions to the defense industry, and one retired soldier for excellence in leadership, at a masquerade-themed black-tie gala Friday in Rochester. The networking and professional development organization presented the Horizon Industry Awards at its eighth annual event for contributions to the national defense and security professions at the Royal Park Hotel. The Horizon Industry Awards, which Crain’s Detroit Business sponsors, honor women who distinguish themselves and help their organizations develop ideas and exceed goals, in one of three categories. Winners were: J Susan Hunt, contracts specialist, Stryker program, General Dynamics

Land Systems, Sterling Heights, for

business development. Denise Rizzo, research mechanical engineer, U.S. Army Tank AutoJ

motive Research, Development and Engineering Center (TARDEC), War-

ren, for product development. J Harsha Desai, deputy executive director, ground systems engineering support, TARDEC, Warren, for innovation. Also, retired U.S. Army Col. Patricia Sellers, now a business development manager for tracked combat vehicles, robotics and autonomous systems at GDLS, received the 2016 Excellence in Leadership Award, sponsored by the Michigan Defense Center, for accomplishments in her 28-year military career. Sellers has received the Legion of Merit and two Bronze Star medals. She retired from the Army in 2015.

Crain’s 40 Under 40 winners give back Since 1991, Crain’s has honored the best and brightest business leaders under age 40 in Southeast Michigan. This year, we stepped it up a notch. We asked this year’s 40 Under 40 winners to select their favorite charities. Crowdrise, the online fundraising platform, created a page to help them support their fundraising efforts. (Crowdrise was founded by Robert Wolfe, who was honored as part of the 2004 class of 40, when he was president of Madison Heights-based Moosejaw.) The 40 winners chose a range of charities, mostly local. At press time, they were well on their way to

the suggested $100,000 goal, having raised almost $42,000. In the lead: Jeffrey Schostak, 33, vice president and director of development for Schostak Bros. & Co. Schostak’s charity of choice is the Reuben Phoenix Schostak Congenital Heart Center Research Fund at C.S. Mott Children’s Hospital. Reuben is Jeffrey’s nephew who was treated at Mott for congenital heart disease. He’s raised more than $18,000 for the fund. See the winners and their causes at crowdrise.com/Crains40under40. Fundraising will continue through the event Wednesday to honor this year’s winners. For details, visit crainsdetroit.com/40s.

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