Crain's Detroit Business, Nov. 14, 2016 issue by Crain's Detroit Business

Royal Oak starts a shopping spree

Auto tech companies drive to top of Eureka Index

Page 3

25 Most Innovative Companies, Page 16

NOVEMBER 14 - 20, 2016 Real estate

Downtown office space slims, tenants widen look Available buildings seen as inconvenient or needing work By Kirk Pinho kpinho@crain.com

The downtown Detroit market for big blocks of office space is tightening, pushing large prospective tenants to locations farther outside the city’s core to find suitable space. Last week’s news that Adient Ltd., the Johnson Controls Inc. seatmaker spinoff, plans to bring about 500 employees to the Marquette Building at 243 W. Congress St. follows a series of large blocks of office space getting scooped up by big tenants, further increasing the difficulty others have finding space downtown. While space certainly remains available with a 14.2 percent third-quarter vacancy rate, according to Newmark Grubb Knight Frank, finding precious configurations of contiguous space in prime locations is getting tougher. Among the new tenants, just within the past 18 months: WeWork LLC, which is taking 80,000 square feet divided evenly between two Dan Gilbert-owned buildings at 1001 Woodward Ave. and 1449 Woodward; his Rock Connections LLC, a strategic marketing company that has filled up the 108,000-square-foot 1900 Saint Antoine Building; Quicken Loans Inc., occupying most of the former Detroit Media Partnership building along with Molina Healthcare of Michigan; and now Adient, which sources said last week is expected to occupy the 164,000-square-foot Marquette Building, owned by Mexican billionaire Carlos Slim Helu. WeWork is a New York City-based co-working space company that provides space to startup companies and others. Because of this, companies in search of large blocks of space might have to look outside downtown in places like the New Center area and SEE OFFICE, PAGE 25

Election 2016

In defeat, RTA backers look west for strategies By Bill Shea bshea@crain.com

Backers of the $3 billion metro Detroit transit tax rejected by voters last week say they will look to Seattle, Los Angeles and other western cities for clues to selling tax increases. They specifically will study two other regions that approved mas-

sive transit taxes that dwarf the tax plan considered here. In metro Seattle, voters in three counties passed a $54 billion proposal by the Central Puget Sound Regional Transit Authority to finance bus rapid transit, commuter train, and bus line expansions over 25 years. The work will include 62 more

More election news inside

Turnover in Rizzo country, Page 3

miles of light rail and 37 new stations for what eventually will be 116 miles of commuter rail that carries 500,000 riders a day, the Seattle Times reported. It doesn’t come cheap: The mea-

The Trump effect

Trade, health care among hot-button policy issues for businesses post-election

sure will cost a median household $326 in new annual taxes atop $303 already paid annually for transit. In Los Angeles, voters on Tuesday approved a countywide half-penny sales tax increase for the Metropolitan Transportation Authority that will pay for $80 billion in

SEE RTA, PAGE 27

By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

Businesses hate uncertainty. Right now, there’s a lot of it going around, since Republican Donald Trump defied pollsters’ data to clinch the presidency last week over Democratic rival Hillary Clinton — the first time Michigan has gone for a Republican presidential candidate since 1988. His business background and anti-establishment rhetoric appealed to voters who wanted change in Washington, but Trump’s controversial comments and lack of government experience have also provoked anxiety about how his White House will operate. Southeast Michigan business leaders hope Trump proves his critics wrong. “Look, I think this was not an outcome (executives) built into their expectations,” Patrick Doyle, president and CEO of Ann Arbor-based Domino’s Pizza Inc., said Thursday. “But I’ll say we’re not operating any differently than we were three days ago.” In coming weeks and months, Trump will appoint his Cabinet leaders and begin to develop a plan for his first 100 days that could have ramifications for everything from global trade to health care. Here’s a look at the impact so far and what might be coming:

Trade This week, Gov. Rick Snyder is in China on his sixth trade visit to the country as governor. He plans to promote Michigan’s automotive, agriculture and tourism industries as a way to encourage more jobs and investment in the state from Chinese companies.

OLIVIER DOULIERY ABACA VIA AP

SEE TRUMP, PAGE 26

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Protecting Michigan’s jewel Miles apart in West Michigan, two projects are aiming to improve one of the region’s most valued assets: water. See Crain’s Michigan Business, Page 9

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MICHIGAN BRIEFS GM to cut more than 800 jobs in Lansing

2017, pending regulatory approvals. The two sides have been eliminating staff and closing facilities as they get ready to combine. They say the merger will reduce their annual spending by $3 billion.

General Motors Co. said last week it

will cut more than 2,000 factory jobs — including more than 800 in Lansing — because of slowing demand for cars but plans to invest $900 million to prepare for new products at three plants, Automotive News reported. Detroit-based GM said it is eliminating the third shift at a Lansing plant that makes the Chevrolet Camaro, Cadillac ATS and Cadillac CTS. The move affects 810 hourly jobs and 29 salaried positions, effective Jan. 16. The Chevrolet Cruze plant in Lordstown, Ohio, will lose its third shift on Jan. 23. The cutback affects 1,202 hourly and 43 salaried jobs. U.S. light-vehicle sales have dropped 0.3 percent this year, but car deliveries have slipped 9.7 percent. GM’s U.S. car sales are off 7.5 percent this year, partly reflecting a pullback in daily rental shipments to focus on retail business. At the same time, GM said planned investments at three plants will retain 784 jobs in Ohio, Michigan and Indiana for work on undisclosed new products. The company said it will spend $668 million at its Toledo Transmission Operations plant in Ohio, $211 million at the

General Motors is eliminating the third production shift at a Lansing plant. Lansing plant that’s losing its third shift and $37 million at a metal-casting plant in Bedford, Ind.

EU panel delays talks on Dow-DuPont merger The EU Commission reviewing the proposed merger of agriculture and chemical companies DuPont Co. and Midland-based Dow Chemical has put its work on hold as it waits for more information from the companies, AP reported. The commission in August had expressed concern it could harm competition in the crop protection, seeds and petrochemicals sectors. Wilmington, Del.-based DuPont and Dow agreed to merge in December in an all-stock deal then valued at about $62 billion. Shareholders for DuPont and Dow approved the merger in July. A Dow spokesperson said the company expects the merger to be completed in the first quarter of

MICH-CELLANEOUS

Saline-based Mectron Inc. was placed on probation for five years and ordered to pay $200,000 for selling industrial equipment to a company in Iran, AP reported. Mectron’s attorney had warned the maker of high-speed inspection systems that it was illegal to sell equipment to Iran without an export license. Mectron didn’t get one before selling a parts inspection machine in 2010 for $47,500. J Grand Rapids-based Spectrum Health is breaking ground on a $9.8-million, 24,000-square-foot integrated care facility in that city. The Spectrum Health Integrated Care Campus in Ada Village is expected to open in the winter of 2018, the Grand Rapids Business Journal reported. J The Grand Valley State University board has given the green light for a $37.5-million health professions building along the Medical Mile in Grand Rapids, the Grand Rapids Business Journal reported. Construction on the 84,000-square-foot building and $9 million, two-level parking garage is expected to begin in December J

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INSIDE and be completed in May 2018. J Voters in Van Buren County cleared the way for South Haven Community Health System to become part of Kalamazoo-based Bronson Healthcare Group at the start of the new year, MiBiz reported. As a public authority health system, South Haven needed voter approval in the two cities and seven townships that own the health system to proceed with the affiliation. The South Haven system consists of the 65-bed South Haven Community Hospital and other facilities. J Educational furniture maker Vanerum Stelter LLC of Grand Rapids has been acquired by MooreCo Inc., a Temple, Texas-based office furniture manufacturer, MiBiz reported. Terms of the deal were not disclosed. J The Michigan House voted to no longer require that someone be inside a self-driving car while it is tested on public roads, AP reported. The legislation won overwhelming approval in the House last week; the Senate was expected to send the bills to Gov. Rick

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COMPANY INDEX: SEE PAGE 29 Snyder. Supporters tout the measures as necessary to keep the auto industry’s home state ahead of the curve on rapidly advancing technology. J Rep. Tom Leonard was elected by Republicans to be the next speaker of the Michigan House, and Rep. Sam Singh was elected to lead Democrats in the next two-year legislative session. Republicans will have a 63-47 majority in January.

Correction J An article on Page 25 of the Nov. 7 edition titled “American Axle to face new risks after Metaldyne grab” misstated the size of the company’s board after its acquisition of Metaldyne Performance Group Inc. The board will expand to 11 members with the addition of two designees from American Securities and MPG CEO George Thanopolis.

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Marketing

Royal Oak retailers duel Detroit’s draw $70,000 holiday advertising campaign scheduled By Sherri Welch swelch@crain.com

JOHN SOBCZAK

Charles Rizzo Jr., CEO of Rizzo Environmental Services Inc., resigned after GFL acquired Rizzo Environmental.

Election 2016

More in Macomb? Election unlikely to end corruption probe fallout By Chad Halcom chalcom@crain.com

Several local communities that do business with Sterling Heightsbased Rizzo Environmental Services Inc. saw political upheaval or turnover in last week’s election. But local officials and experts say it’s too early for the trash hauler’s assistance in an FBI public corruption investigation to have had much impact. More likely, the big political fallout is yet to come. Clinton Township Trustee Dean Reynolds and Macomb Township Trustee Clifford Freitas, the only officials charged so far in the case, are both leaving office after Reynolds lost 58 percent to 42 percent Tuesday in a bid to unseat Clinton Township Supervisor Robert Cannon. Freitas wasn’t on Tuesday’s ballot after fin-

ishing behind newcomer Timothy Bussineau in the Aug. 2 primary, which decides many elections in the highly Republican township, before he was even charged. But the FBI has said the charges are “part of an ongoing and long-running investigation into systemic corruption in multiple municipalities in Southeast Michigan, primarily Macomb County” — suggesting that at least one future indictment could follow against an official elsewhere in the region. The probe also involves at least three businesses, including Rizzo Environmental and likely its exCEO, Charles Rizzo Jr. The latter resigned in late October after Toronto-based Green for Life, or GFL Environmental Inc., acquired Rizzo on Sept. 30, in a deal valued around $300 million, and then learned of

Rizzo Environmental’s role in the long-running corruption probe two weeks later. Canton Township, which became a Rizzo customer in 2015 after the company acquired its municipal waste hauler, Canton Waste Recycling Inc., switches drastically from a 6-1 Republican majority to a 5-2 Democratic board after two incumbents were defeated Tuesday and two did not seek re-election. Wayne Couny’s Huron Township, which rescinded an Oct. 12 decision to switch haulers from Waste Management of Michigan to Rizzo the following week upon learning of Rizzo’s role in the probe, also switched Tuesday from a 4-3 Democratic majority to a 6-1 Republican board, but two of the four

With rising retailer interest in downtown Detroit ringing in their ears, Royal Oak’s downtown development association and retailers are launching a holiday advertising campaign to promote retail in the city. The $70,000 billboard, print and television campaign is set to launch the week of Thanksgiving, in the hopes of boosting foot traffic and sales, sluggish since Barnes & Noble left the city in 2014 and others followed. Royal Oak is known as a destination for restaurants and entertainment, said Jay Dunstan, director and chairman of the DDA and director of digital services at Midcoast Studio in Troy. “We’re trying to do our best to balance that and make people aware there’s a retail environment, too.” Underpinning that is the city’s bid to retain current stores and attract new ones as national retailers start to look at downtown Detroit. “It’s competitive out there right now with the revival of downtown Detroit and Birmingham,” Dunstan said. “We’re trying to keep Royal Oak competitive.” Concurrent with the launch of the campaign, the DDA is set to vote next week on a proposal to offer grants to new retailers coming into the city to help build out their spaces. For fiscal 2016-17, which began July 1, it has budgeted $100,000 for the program, Dunstan said.

National retailers have tuned in to everything happening in downtown Detroit, said retail consultant Cindy Ciura of CC Consulting, who is leading the Royal Oak campaign, as part of her consulting work with Oakland County. The Ilitch family is building District Detroit around the new Little Caesars Arena. Quicken Loans Founder Dan Gilbert is developing retail along Woodward Avenue and other areas. Midtown has attracted high-end retailers, including Shinola, Will Leather Goods and Jack White’s Third Man Records. And development is underway in Detroit’s New Center area. Where in the past national retailers weren’t looking at Detroit, “they’re now looking at (it) as a viable option,” Ciura said. Downtown retail in Royal Oak has had challenges the past couple of years, Ciura said. Foot traffic in the city dramatically decreased after Barnes & Noble left, leading to declines in retail sales, she said. Other retailers left in its wake, and some of the space they vacated flipped to restaurant and retail tenants that are more likely to be able to afford higher rents. “I don’t know that anybody has really gotten back to the levels we were pre-recession,” Dunstan said. “When retailers leave, it hurts remaining retailers,” because you lose the clustering or “mall effect” with multiple stores in one walkable area.

SEE RIZZO, PAGE 25

Higher education

WSU med school pares deficit By Jay Greene jgreene@crain.com

Wayne State University School of Medicine officials say the school can

break even by 2019 as part of the turnaround effort that is already shrinking its losses. To get there, the school says, it will need to lose as many as 50 unproductive scientist researchers and their salaries, increasing clinical service patient revenue, further reducing administrative and fringe benefit expenses, negotiating improved hospital partnership agreements and vendor contracts, and generating more research grants. Several medical school executives interviewed last week by Crain’s expressed optimism that the

changes underway will result in po- have boosted staff morale and creatsitioning the nation's largest urban ed a renewed sense of enthusiasm medical school, with 1,200 students, for the school's mission. Even Charles Parrish, as once again a destinapresident of the faculty tion for aspiring doctors, union at Wayne State, said clinicians and researchhe believes the medical ers after struggles with school is taking prudent falling revenue from hossteps toward financial stapital deals, accreditation bility. But he continues to problems and a dropoff in express concerns that more recruitment of minority than a dozen faculty memstudents. bers facing detenuring or Despite the $29 million other actions receive fair loss posted in 2015 by the Jack Sobel: due-process hearings. medical school and its Improvements “I think they have gotten 500-member University have boosted staff Physician Group, Dean morale. a handle of the managerial Jack Sobel, M.D., and othaspects of the medical er officials said improvements at the school. The things that had to be SEE WSU, PAGE 29 medical school over the past year

MUST READS OF THE WEEK It’s all in the mix Founded by a Novi couple, Franzese USA makes custom mixes, spurring consumer and business interest, Page 4

Passport to profits? “Beer City Brewsaders” promotion taps into thirst for craft beer in the Grand Rapids area, Page 12

SEE RETAIL, PAGE 28

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Profits are in the mix for enterprising Novi couple By Sherri Welch swelch@crain.com

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Remember Easy-Bake ovens and the packaged cake mixes that came with them that let children to “bake” their own cake? Novi-based Franzese USA Inc. is doing the same thing for KitchenAid mixers. The company, which launched five years ago with a custom hot chocolate mix made in Italy for Nordstrom’s café areas and the retail market, this summer introduced co-branded gelato and pasta mixes for KitchenAid. Produced and packaged through contractor companies in Italy and Illinois, the mixes are sold online and in the U.S. and Canada through retailers including Nordstrom, Bed, Bath & Beyond; Dillard’s; and Amazon. Franzese CEO Paolo Franzese, who co-founded the product development company with his wife five years ago, expects the KitchenAid deal to boost revenue to between $5 million and $10 million in the coming year, from $1.5 million-$2 million this year. They plan to take the same model to other companies in food and other industries, introducing products that spur existing business. Among other things in the works, Franzese is developing a baking mix that incorporates its custom hot chocolates, due out during the first quarter of next year. “We wanted to look in areas where nobody else was looking,” Franzese said. “We’re becoming an innovation arm (of) corporate entities that already exist.” The KitchenAid agreement is spurring interest from other retailers and investors, he said. “I’ve met a lot of financial partners, but not a partner who wants to be strategic and get his or her hands dirty with you. And that’s what I’m looking for.” A first-generation Italian-American, Franzese and his wife stumbled into the business after becoming enamored of a cold, creamy coffee drink they tasted while on a trip to Italy in 2011. They noted the name of the company on the machine that made it and once home bought large quantities of the Italian company’s products, including the cold drink, smoothies, coffee syrups and hot chocolate. They shipped the pallets to Franzese’s parents’ Macomb Township garage and took it in carloads to the 500-square-foot Plymouth apartment they shared with their newborn daughter. Their idea was to serve as a U.S. distributor of the products, said Franzese, now 30. While working as an information technology assistant for Dassault Systèmes in Auburn Hills at the time, he’d research prospective clients during lunch and cold call West Coast retailers at night. Failing to get

LARRY PEPLIN

Franzese USA Inc. CEO and co-founder Paolo Franzese with some of the KitchenAid mixes the company introduced this year. traction, he began taking vacation time to pound on doors, but no one was interested. The Italian company producing the products eventually figured out the couple wasn’t selling anything and stopped supplying them. Stuck with an apartment full of products they couldn’t sell, the couple was at the mall one day when they noticed Nordstrom’s coffee and cocoa offerings. After trying the hot chocolate, they realized, “We had better hot chocolate in our apartment,” Franzese said. He contacted the retailer’s main office in Seattle and sent them samples of the Italian-made hot chocolate. But Nordstrom wasn’t interested. The Italian-made drink, which included a highly modified starch, didn’t dissolve well enough in milk. The couple refused to give up. Christina Franzese, who held a bachelor’s degree in chemistry and math and was pursuing a master’s in

quantum mechanics at the University of Michigan, began researching food science and developed a hot chocolate reminiscent of the Italian company’s but one that would dissolve in milk. They contracted a different manufacturer in Italy to produce some samples and sent them to Nordstrom, which loved it and approved a contract for 80 stores, Franzese said. That was 2012. Today, Nordstrom offers the hot chocolate in original and other flavors spun from it in all 120 of its U.S. stores and a handful in Canada. During the first few months of next year, it will be the exclusive distributor of Latte Amore, a drink that tastes like cake batter, Franzese said. To increase its brand awareness, Franzese said he hired the production company of well-known chef Mario Batali to do a video for its hot chocolate. As part of the deal, Batali created SEE NEXT PAGE

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a drink recipe using the hot chocolate, pushed it out through his social media accounts and hosted it on his website at www.mariobatali.com/recipes/bicernin-batali-style/ Canisters and packages of Franzese Hot Chocolate in milk, strawberry, tiramisu and salted carmel varieties now sell from about $7.99 to $11.99 at Nordstrom, Southern Season in North Carolina and local merchants, including Busch’s Fresh Food Market, Cantoro Italian Market, Vince and Joe’s Gourmet Market and a Mackinac Island gift shop. The jump to developing products for KitchenAid — and a niche business model — came, Franzese said, after a 2013 conversation with his soccer teammate and mentor, Nick Giammarco, a principal at Birmignham-based retail design firm Studio|H2G. “He helped us understand we’d filled a custom product niche for Nordstrom,” Franzese said, “and he encouraged us to look for ways to fill niches for other companies.” After seeing a KitchenAid commercial showing how the machine could make ice cream with attachments, something clicked and Franzese immediately thought “gelato at home.” His wife set to work once again, this time researching gelato and developing early prototypes that were honed by an outside research and development company. During their presentation to KitchenAid — which Franzese believes was helped by the fact that its parent is Michigan-based Whirlpool Corp. — Christina Franzese educated the company on the science behind gelato. “I think that’s what helped us get KitchenAid … she gave us a lot of credibility,” her husband said. It took three years and a manufacturing agreement with another Italian company to launch a co-branded gelato mix available in six flavors in July. In August, the company introduced a number of pasta mixes developed for KitchenAid in consultation with a chef. Franzese began purchasing semolina flour from Italy and contracted its co-packer in Illinois to do the mixing and packaging. It’s developing new products for other companies, and it expects to gain expanded distribution for its current products with additional national retailers in the coming year. “We’re in the infant stages of our company and doing really big things, and I think food has helped us do that,” Franzese said. “But I think we have the capability and eye to innovate in other areas outside of food.” By providing niche products, a company avoids competition from bigger companies, said Erik Gordon, a professor in the Stephen M. Ross School of Business at UM. But it’s tough to scale a custom product company, he said, since it can be challenging to sell enough product to make it profitable, given the costs of having to develop custom products. “You either have to sell a lot of it or get paid a lot up front.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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OPINION

Transit dilemma must be resolved

ust 19,513 votes. That’s all that stood between the region’s approval of the regional transit tax that would have built a bus rapid transit system in Wayne, Oakland, Macomb and Washtenaw counties. In the end, an overwhelming rejection by voters in Macomb County sealed the ballot proposal’s failure. The work by business and government leaders should begin now to build the case for transit when it can next appear on the ballot — two years from now. The campaign messaging focused a lot on the benefits to “others” — elderly and non-drivers — but missed honing in on the important “what’s in it for me.” It’s important to understand the mindset behind “no” voters. Other American cities have gotten this done. As Bill Shea reports on Page 1, in metro Seattle, voters in three counties green-lighted a $54 billion proposal to finance bus rapid transit, commuter train, and bus line expansions over 25 years. Cost: More than $300 a year for the average household. Seattle is a place attracting new residents. Detroit must learn from Seattle if it wants the same growth. Meanwhile, while pilot projects involving Uber or ride-sharing agreements are good ideas as a stopgap, a comprehensive regional transit system is the best path toward higher employment for entry-level job seekers. Something employers would applaud. It’s time to solve this transit juggernaut — a policy challenge that has plagued the region for 40 years.

A property tax was sought to fund a new system of bus rapid transit, new traditional bus routes, and commuter rail between Detroit and Ann Arbor.

Workplaces — including newsrooms — must navigate election aftermath

ast week, I got an online invitation to a toddler’s birthday party that included this notation: “We request that the election not be brought up at all during (the) party.” This from a mom whose “heart still hurts” but allowed that she wanted the focus on her daughter, not the election. Which made me think: Whoa, Thanksgiving might be very interesting in many households this year. And the workplace? Before the election, managers were trying to figure out the best strategies to ensure workplaces don’t become polarized political battle zones. Now, the issue is how to cope with the fact that about half the people in the country are angry or in mourning because they wanted one outcome; the other half wanted another. Not respecting differing viewpoints has the potential for tearing offices apart. Here’s how it played out last Wednesday at the University of Michigan, whose president, Mark Schlissel, sent an email to students, faculty and employees: “It will take quite some time to completely absorb the results from yesterday’s election, understand the full implications and discern the long-term

MARY KRAMER Publisher

impact on our university and our nation,” he wrote. He urged the community to “engage respectfully across our ideological differences” and offered specifics on forums, resources and other opportunities to process the results. At one point, he highlighted services that sounded a lot like “grief counselors on call.” How did Republicans on campus view that email? Probably differently than Hillary Clinton supporters did. Whether in the classroom, the office or the factory floor, what’s different now from water-cooler conversations of old is social media — Twitter, Facebook and other platforms. For newsrooms, social media can be tricky. Our reporters and editors have opinions, but we are a respected, trusted and unbiased news source for thousands of business readers. Where’s the line between a

“personal” social media account and one our readers follow? We’re navigating that territory now. Ron Fournier, our associate publisher with two decades of experience covering politics in Washington, D.C., led an internal discussion last week in our newsroom, noting how one polarizing tweet can risk our newsroom’s reputation for integrity and objectivity. And, even more damaging, offend a cherished colleague who holds a different political view. Social media are ubiquitous, and many of us have “personal” social media accounts. We support free speech — heck, that’s a foundation for American journalism. But we respect that comments can offend readers and betray the trust they have in us. It is hard to mirror civility when the news media around us — especially on cable television — are anything but. Hard, but not impossible. The polarizing outcome we saw last week is a chance to prove that the team at Crain’s Detroit Business can uphold cherished values in its reporting (objectivity) and in the social media space (civility). I invite you to let us know what’s happening in your own workplaces.

LETTERS

City’s tax climate hurts mobility effort Editor: Dustin Walsh’s Oct. 24 article “City mobility stuck in neutral” failed to mention a critical reason why Detroit isn’t attracting new businesses pursuing next-generation automotive technologies: It’s home to arguably the worst tax and regulatory climate in the nation. Other cities and states recognize that reasonable taxes and simple, consistent regulatory requirements are reliable strategies to grow good businesses that create good jobs. Even still, economic planners at the local and state levels continue to pick and choose which favored companies will be exempt from paying the nation’s highest property tax

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 rates or a dizzying array of local taxes, business and professional license fees and other government-imposed costs of doing business. That’s the true meaning of “incentives” that’s not widely advertised: Government economic development bureaucrats get to decide which businesses don’t have to pay

the same taxes as everybody else. The potential of paying 84.5085 mills in property taxes is going to have far greater impact on a business deciding on Detroit than whether or not the city has a chief mobility officer. If Detroit is only competing by handing out special tax deals to mobility companies, it’s not truly all that competitive. Hiring yet another bureaucrat with the ability to pick more winners and losers isn’t going to address the city’s bigger problems. John Mozena VP for marketing and communication Mackinac Center for Public Policy Midland SEE NEXT PAGE

Some good and some bad Whether we like it or not, the country elected a new president last week for at least four years. There is no doubt that he has elicited more positive and negative emotion during the campaign — and in the post-election days — than anyone before him. So a new Republican president will be leading the executive branch, and we have a Republican House and Senate. All this is bound to impact Detroit and Southeast Michigan. How much? We won’t know for a while, but some things seem fairly certain.

KEITH CRAIN Editor-in-chief

We are going to see lower corporate taxes, and that will help a lot of public companies in Detroit that have been having a tough time on Wall Street. Investors should like this

and value their stocks higher. Whatever relationship President Barack Obama had with Mayor Mike Duggan is gone. Whatever that brought Detroit in benefits is also gone. But there is some optimism that newly elected Donald Trump will make a federal commitment to cities, and that means Detroit. We may find ourselves better off than before. Only time will tell. There is little doubt that federal regulations impacting the automobile will decrease. Miles-per-gallon mandates will go down, and that will

mean a great relief for our auto industry. We still have a Republican-majority House and Senate in Michigan. Maybe Gov. Rick Snyder will be able to push his programs through with support from his own party. I can only hope that protesters around the country will realize that they would be better off trying to shore up the Democratic Party than taking to the streets. The party seems to be in shambles these days. In two years, voters will face choices for the U.S. House and Senate. The party

may want to focus on that. Meanwhile, regardless of your political persuasion, it’s time to give the president-elect a chance. We will have a new health care system — it might even be an improvement. Again, we’ll have to wait and see. It was a gut-wrenching campaign, with an outcome that surprised many, including pollsters. Let’s all breathe deeply and give Trump six months in office to see how he is doing. This is one time when patience is a real virtue.

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Study: For a company to innovate, the leader must lead Innovation is a goal many organizations have difficulty achieving. To discover what’s truly holding organizations back from innovation, Twisthink conducted a survey of 200 senior executives with a vice president or higher job title at an organization with an annual revenue of $500 million of more. What we found raised a red flag. The research found that while executives believe innovation is necessary for their organization’s success, few have a formal process to foster innovation. In fact, while 93 percent of executives surveyed agree that innovation is important to their organization, 48 percent have a dedicated process for it. And 33 percent report that while innovation is encouraged, there is no formal process, and 15 percent hope that it will occur organically. Innovation is not simply summoned. It requires process, discipline and diverse perspectives informed by meaningful insights. The highest levels of an organization’s leadership must be committed and invested in innovation before the company can successfully bring forth valuable new solutions. But hope is not lost. Through my first-hand experiences in working with some of the region’s most innovative companies, I’ve seen that when the highest levels of an organization’s leadership are committed and invested in innovation, truly valuable new solutions are born. Here’s what I tell leaders about how to get there: n Creating a solid strategy with

OTHER VOICES Bob Niemiec

Niemiec is managing partner at Hollandbased Twisthink. clear, actionable goals is the first step to cultivate an innovative culture. Though many executives reported

not having a formal innovation plan, strategy is perceived to have the strongest impact on a company’s ability to innovate. In fact, more than three-quarters of the respondents (76 percent) believe a clear business strategy has a strong impact on a company’s ability to be innovative. n More than one third of executives agreed or strongly agreed that a lack of vision (35 percent) or involvement (33 percent) from the senior leadership team hinders innovation. After developing a clear strategy for innovation, it’s crucial for the C-suite to become a part of the process, whether that be through weekly

brainstorming sessions with all levels of the organization, creating a safe space for failure and the opportunity to try new things, or ensuring that the team’s new ideas are implemented and fostered. n About half of the respondents believe that a culture of risk taking is important to foster innovation, but the tolerance for risk varies widely. When it comes to investing in new innovative projects, only a little more than half of our study’s respondents (56 percent) reported that they will occasionally pursue ideas they believe have long-term potential even if the immediate business case is not

clear. Only 7 percent expressed that their company invests in exciting ideas regardless of their viability. While you shouldn’t invest in every idea, taking risks is crucial to creating an innovative culture. Pursue projects that might not have a clear business case yet, but are rooted in clear consumer desirability. Overall, the survey’s results present a strong call to action: If a leader wants the organization to be innovative, he or she must be involved and invested in promoting a culture of innovation and making strategic decisions and investments that move the organization forward.

LETTERS FROM PREVIOUS PAGE

Great Giving Guide; donor carmakers, drivers don’t mix Editor: The Giving Guide (with Oct. 24 edition) is a great special edition. Looking at major donor corporations, General Motors, Ford and FCA always make the list, sometimes Toyota. But never BMW, Kia, Nissan, Mercedes, Volvo and the other offshore companies. Yet folks in Southeast Michigan continue to drive their cars when they don’t support schools, the arts, the poor, etc. Sad! Neil Hitz Beverly Hills, Mich.

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

TALK ON THE WEB Re: WDIV anchor Carmen Harlan to retire She has brought us joy and laughter since we moved down here in October 2012. Best of luck! Julie Johnston

Re: Land sale closes for planned mobility center This is a waste of excellent industrial property with easy access to air, rail and truck. FreightTrainPete

Member FDIC. A ® and Huntington® are federally registered service marks of Huntington Bancshares Incorporated. Huntington® Welcome.TM is a service mark of Huntington Bancshares Incorporated. © 2015 Huntington Bancshares Incorporated.

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CRAIN’S MICHIGAN BUSINESS

This conceptual drawing shows how the Grand River will look after the removal of five dams and the addition of rocks, boulders and gravel, restoring the rapids in Grand Rapids.

Water works

RIVERRESTORATION & GRAND RAPIDS WHITEWATER

River, lake projects in West Michigan look to improve valued resource By Amy Lane

Special to Crain’s Detroit Business

Miles apart in West Michigan, two projects are aiming to improve one of the region’s most valued assets: water. The efforts — one to restore river rapids in downtown Grand Rapids and the other to reduce pollution in Lake Macatawa — differ markedly in what they address. But they share characteristics that include millions of dollars in private support, a quest to reverse what history has brought, and the initial and ongoing push of individuals committed to seeing change. Take Chris Muller and Chip Richards, mountain biking friends who shared an interest in bettering the Grand River, and several years ago began talking to “anybody who would listen” about how the river “could be grand,” Muller said. Discussions gained traction amid a city planning initiative called Green Grand Rapids, which focused on the importance of green infrastructure, sustainability and quality

of life and included a look at river-related opportunities like creating whitewater features and a kayak course. Muller, founder and president of M Retail Solutions, a retail real-estate brokerage and consulting firm, and retired photographer Richards in 2009 formed Grand Rapids Whitewater, a grass-roots nonprofit that’s engaged stakeholders and is spearheading what’s now a projected $34 million effort to improve a 2.2-mile stretch of the Grand River and return the rapids. The rapids disappeared in the mid-1800s as dams were built to aid log transport for the timber processing industry. It wasn’t a new idea; restoring the rapids had been talked about for years. “But it wasn’t really until Chip and Chris got involved that there was liftoff in advancing that idea, putting the rapids back in the river,” said city Assistant Planning Director Jay Steffen. “They’ve been champions, they’ve been leaders, and their support and persistence is helping to

drive the project. It’s kept it as a focus for the city. “The city has now adopted their vision, they’ve ensconced it in their plans and they’ve assigned staff to help with it.” The effort has involved numerous players. Among them are foundations and businesses who have provided money and support; the city, in roles that include applying for permits, bidding construction work and working with others to identify public funding sources; a city commission-established steering committee to provide guidance on efforts associated with the restoration of the river and riverbank and help to assure a common and coordinated vision moving forward; and buy-in and assistance from organizations like the Grand Valley Metropolitan Council and Downtown Grand Rapids Inc.

Under volunteers Muller and Richards, Grand Rapids Whitewater has grown to one full-time employee and three contract workers. It has so far raised about $5 million from contributors that have included the

Wege Foundation, the Steelcase Foundation, the Frey Foundation, the Dyer-Ives Foundation, the CDV5 Foundation, and Founders Brewing Co.,

Muller said. The money has helped pay for initial work such as hiring Colorado-based engineering and planning firm RiverRestoration to assist with planning, permitting and project implementation; legal assistance from Warner Norcross & Judd LLP; and consultants who have conducted economic impact and scientific studies that evaluated the river bottom, sediment, water flows, wildlife and other factors.

Federal involvement One milestone came in May 2013, when federal officials designated the Grand River to be included in the Urban Waters Federal Partnership, a multi-agency government initiative to collaborate with community-led revitalization efforts. The designation was the result of efforts led by Grand Rapids White-

water and assisted by others including city representatives, U.S. Sen. Debbie Stabenow, and members of the business and foundation community. Among them was Mark Van Putten, former National Wildlife Federation president and CEO and at the time a Virginia-based consultant to the Wege Foundation. Van Putten, who now heads the foundation, was Wege’s lead in working with Grand Rapids Whitewater on various areas, including the federal designation. He helped the nonprofit arrange meetings and navigate the Washington scene. “It just was happenstance that I spent a significant amount of my career in Washington, D.C., and had a sense of some of the federal agencies and who some of the key people were,” Van Putten said. But, he said, “it was the project on its own merit that convinced them to designate it.” Van Putten said he is “just one of many people who have been inspired by Chip and Chris’ vision, who have wanted to help where they can.” SEE WATER, PAGE 10

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SPECIAL REPORT: CRAIN’S MICHIGAN BUSINESS

WATER

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FROM PAGE 9

Muller said that when the U.S. Environmental Protection Agency and

others announced the river’s inclusion as one of 11 new project locations in the federal initiative at a news conference at the Gerald R. Ford Presidential Museum on the banks of the Grand River, it was a national recognition of accomplishment and a “double win. We not only were designated, but we also were able to host.” The designation provides “a direct conduit toward designated federal agencies who have all agreed that urban water projects are very important … and have pledged their support,” Muller said. It opens doors to assistance in numerous areas, and is “a forum to talk about federal funding and where it might come from, and different agency initiatives that might be applicable,” he said. The plan for the river stretches between Ann Street at the north and Fulton Street at the south — two points between which the river bottom drops 18 feet. The project includes removing five dams and restoring the flow of the natural drop; exposing a limestone shelf to increase spawning habitat for lake sturgeon and other native fish; placing 200,000 tons of rocks, boulders and gravel in the river, creating

Sch RIVERRESTORATION & GRAND RAPIDS WHITEWATER

The river project in Grand Rapids includes removing five dams; exposing a limestone shelf to increase spawning habitat for lake sturgeon and other native fish; placing 200,000 tons of rocks, boulders and gravel in the river, creating whitewater rapids and improving habitat for fish and other aquatic species; and installing a hydraulic barrier. whitewater rapids and improving habitat for fish and other aquatic species; and installing a hydraulic barrier that will help control upstream water levels and block sea lamprey. An economic impact study, commissioned by Grand Rapids Whitewater and conducted by East LanAnderson Economic sing-based Group LLC, estimates that expanded recreational use of the river and riverfront, including kayaking, other paddle sports and fishing, could generate $12.9 million to $15.5 million in direct new spending and a total annual economic impact of $15.9 million to $19.1 million. The June 2014 study says the project will draw “locals and visitors to enjoy being in, on and near the river,”

in turn generating spending at restaurants, hotels, shops, and other Grand Rapids venues. Additional benefits cited include the creation of a desirable environment for property development adjacent to the river, and enhancing the vibrancy of the downtown city core — an impact that strikes a chord with longtime project supporter Founders Brewing. Even before Muller and Richards launched the nonprofit, they would come into Founders and talk with friends Mike Stevens and Dave Engbers, brewery co-founders, about their idea and what it would do for the city, Founders events coordinator Samantha Hendricks said. It’s a relationship that has brought monetary support to Grand Rapids Whitewater, and Stevens and Founders

Executive Chairman John Green to spots on the nonprofit’s board. “For Founders, we genuinely believe that restoring the rapids would help the city, would continue revitalization right in our backyard,” Hendricks said. The brewery is on the south side of Grand Rapids’ downtown. When Founders’ KBS bourbon barrel-aged stout is released once a year, proceeds from tickets, which allow people to later purchase the beer at the brewery, go to Grand Rapids Whitewater, as do beer sales at Founders-sponsored events that include the nonprofit. And September brought the first of what is likely to become an annual major fundraiser for Grand Rapids Whitewater — an event along the

river that included bands, a beerthemed dinner and silent auction. The Founders-organized Tribute on the Grand raised $200,000, with $2,500-apiece dinner tables selling out in a week. “We didn’t know what to expect in the first year, we knew that there was community support out there, but it was an overwhelming amount of support,” Hendricks said. Kristopher Larson, president and CEO of Downtown Grand Rapids Inc., said the river effort is significant not only in restoring the city’s namesake rapids, but as “an important early stage project in a much larger vision about how our city can grow.” The quasi-public organization provided about $150,000 to Grand Rapids Whitewater to support initial scien-

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SPECIAL REPORT: CRAIN’S MICHIGAN BUSINESS tific and engineering work and has stood by the effort “in every opportunity,” Larson said. The project folds into a new strategic plan that has the Grand River overall as a critical piece. The GR Forward plan for the downtown and river corridor, developed from an 18-month public engagement effort facilitated by Downtown Grand Rapids, the city and Grand Rapids Public Schools, among other things incorporates land use that responds to a restored river condition, Larson said. For example, it looks to reinforce and build off of the Grand Rapids Whitewater project through design of the river’s edges, integration of new trails and open spaces that capitalize on the enhanced public activities on the river. Wendy Ogilvie, director of environmental programs for the Grand Valley Metropolitan Council and a member of Grand Rapids Whitewater’s planning team, said the potential benefits of the project go beyond city limits. “This is going to be the largest rapids in the lower peninsula in an urban setting,” she said. “We’re really hoping it can be an economic draw for the region.” Ogilvie has done community outreach and presentations on the river restoration project, and the Metro Council is working with the city and others to help identify and procure grant funding. Grand Rapids Whitewater is looking to raise a mix of public and private funds from local, state, federal and national sources and hopes in spring 2017 to launch an official fundraising campaign for the remaining $29 million needed. The city’s Steffen said work is underway on an environmental impact statement that will be prepared by the U.S. Fish and Wildlife Service and could be completed in 18 months. During that time, Muller said, the project will be determining when it will apply for a Michigan Department of Environmental Quality permit that could ultimately clear the way for construction. A conservation plan for the river’s snuffbox mussels, an endangered species, also must be approved by the Fish and Wildlife Service. Muller said project construction, which he hopes could begin in 2018, depending on fundraising and permitting, will take place over three years.

Project Clarity At another West Michigan water-restoration project, there’s also a multiyear timeline. Project Clarity, at its start a $12 million effort to reduce sediment, nutrient and bacterial pollution in Lake Macatawa, seeks to reverse degradation long in the making in the Macatawa Watershed, a 175-square-mile area in Ottawa and Allegan counties. The watershed encompasses land over which water drains to Lake Macatawa. It’s an expanse that over the last century has lost 86 percent of its wetlands to agricultural and urban development, leading to increased

water runoff into tributaries and the Macatawa River that flows into the lake. “Lake Mac is the symptom, but the problem is the watershed,” said Travis Williams, executive director of the Outdoor Discovery Center Macatawa Greenway, a nonprofit education and conservation organization in Holland that is managing Project Clarity. “And everybody who lives in that 175 square miles, which is about 110,000 people, has to take ownership in this issue.” Among those who have are business leader Dick DeVos and his wife, Betsy, who several years ago were out on Lake Macatawa for an early morning trip on their stand-up paddleboards and looked down upon a green algae bloom in the water. “Betsy said, ‘I hope neither of us falls in,’” DeVos said, and the two talked about the need “to do something about this, about this lake. We can do better.” DeVos, former Amway Corp. president and now president of Grand Rapids-based investment and management firm The Windquest Group, placed a call to friend and community leader Jim Brooks. Brooks connected them with Williams and Steve Bulthuis, executive director of the Macatawa Area Coordinating Council. The Holland-based council of governments had for years led implementation of a watershed management plan to reduce phosphorus, after the state Department of Environmental Quality in the late 1990s determined the lake did not meet water quality standards and set a target for phosphorus amounts. The plan included public education strategies, agricultural practices and stormwater management. The council, which has worked with landowners, municipalities and stakeholders, also did demonstration projects like installing rain gardens with plants that absorb pollutants in stormwater runoff, wetlands restoration, and mitigation of highway runoff. Led by the Outdoor Discovery Center, talks ensued that got the ball rolling on what would become a larger-scale effort: Project Clarity. The DeVoses and Jim and wife Donna Brooks engaged supporters, including through social gatherings, informational events and calls, and helped raise funds to support a $500,000 study begun in March 2011 to determine where sediment and nutrient runoff was coming from. DeVos and Brooks said it was important to know the scope of the problem, and what it would take to fix it. “We really wanted to deal with this in a serious manner, in a reasonable number of years,” said Brooks, former chairman and CEO of Beverage America Inc. and current chairman of Brooks Capital Management LLC, a Holland investment company. The 18-month study, guided by the Outdoor Discovery Center, the Macatawa council and Hope College and assisted by Grand Valley State University’s Annis Water Resources Institute and Michigan State University, found that the majority of runoff was

coming from agricultural land, but there were also urban sources, Williams said.

‘Not a silver bullet thing’ The findings led to consultations with water quality experts on actions to take and the June 2013 launch of Project Clarity, a multifaceted remediation plan to improve water quality and reduce sediment, nutrient and bacterial pollution in Lake Macatawa by 70 percent. The plan includes acquiring land to restore wetlands; instituting land features like buffer strips of vegetation that provide a permanent water filtration barrier, ditches that hold more water at high flows and “cover” crops that are planted at the end of the growing season and kept on the field until spring, reducing nutrient and sediment losses and increasing soil health; and community education and outreach on water quality and best practices. “It’s not a silver bullet thing. It’s quite a comprehensive campaign,” Brooks said. Bulthuis said that while there have been efforts “throughout the history of the watershed,” a distinguishing factor of Project Clarity is its financial scale, the “ability to help garner the resources, the size of the resources.” Property donated by Holland-based Haworth Inc., southeast of its headquarters, was the first piece of land in Project Clarity to be restored to its former wetland state. Haworth donated 70 acres, 42 of which in October 2015 were restored

to a wetland. In addition to the environmental benefit of collecting and storing water, the land could generate future revenue for Project Clarity as a wetland mitigation bank, in which “credits” are sold to other state-approved projects that impact wetlands. Haworth CFO John Mooney said the land donation meshed with Haworth’s commitment to sustainability, and valuing and being engaged in its community. Additional Haworth-owned land is leased to a farmer practicing methods like planting crops in a way that minimizes soil disturbance and impact on the land, making it less susceptible to runoff. “It’s a best practice illustration for the rest of the farmers in the community,” Williams said. He said some of the money raised for Project Clarity will be used to support other such agricultural practices and projects, disbursed to farmers by farmers that comprise a Project Clarity agricultural committee. Williams said Project Clarity work will probably take up to 10 years to complete, and it’s not possible to anticipate when the lake will reach its 70 percent reduction goal. “We told people this was a longterm project and it would take a long time to reverse the damage,” Williams said. The Annis Water Resources Institute is monitoring progress on water quality conditions throughout the watershed, including at project locations and in tributaries and Lake Macatawa. Williams said Project Clarity has raised a little over $11 million and he

expects the initial money to leverage additional funds. Contributions have come from individuals, corporations, local units of government and foundations, including the Dick & Betsy DeVos Family Foundation, which has pledged $2.5 million with $1 million still to be paid, and the Community Foundation of the Holland/Zeeland Area.

Mike Goorhouse, the community foundation’s president and CEO, said its $250,000 contribution is the largest grant the foundation has ever given and it speaks to both the opportunity to tackle a community priority “in a meaningful way” and the leadership and ability to make it happen. “You had a nonprofit with the capacity to deliver, philanthropists with the resources to come behind it, science to address this issue, so we said, ‘We’re all in,’” Goorhouse said. The foundation manages a Project Clarity endowment fund targeted to reach $3 million and provide money for future maintenance on projects and management of restoration efforts. Goorhouse also sits on a Project Clarity advisory board helping to provide long-term guidance and financial oversight of the initiative. The board is co-chaired by Brooks and DeVos. DeVos said Project Clarity “is not only exciting for Holland and the Holland community, but serves as a great example to other communities that if they have environmental issues that impact a community asset, they can, if they band together … change things.”

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SPECIAL REPORT: CRAIN’S MICHIGAN BUSINESS

Passport to profits? Grand Rapids-area ‘Beer City Brewsaders’ promotion taps into thirst for craft beer By Amy Lane

Special to Crain’s Detroit Business

Kate Herron: Brewsader “kind of a fun word.”

Jackson Van Dyke: Has seen business increase.

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has expanded, with nine new breweries joining the passport program. Experience Grand Rapids, the Kent County convention and visitors bureau, developed the program to build on the area’s growing craft beer tourism, and it even registered the Brewsader name as a trademark. “We wanted to make sure it was ours,” said Kate Herron, director of marketing. “It’s kind of a fun word, and people are starting to associate it with Grand Rapids, that know about our beer scene now.” Brewery owners such as Jackson Van Dyke, co-owner of Harmony Brewing, say the passport is having an impact. “We see a lot of people coming through, both local and regional, coming through for the Brewsader passport,” Van Dyke said. “You see people sitting at the bar … getting their passport stamped. … We’ve seen quite a bit of business increase.” It’s a concept that regions elsewhere in Michigan and the country use to encourage visits to breweries, wineries, distilleries and other stops. Experience Grand Rapids had been looking at the idea for a while, but a 2015 study on the economic impact of beer tourism propelled it to move forward. The study, by Grand Valley State University researchers, quantified what the area had been experiencing amid growth of the craft brewing industry, and national accolades and recognition. “We knew people were coming here for beer, but to have those numbers … it was a good numerical reason … of why to do” the passport, Herron said. Among the findings: Beer tourism in Kent County generates an estimated $7 million annually in direct spending on beer, food, retail, transportation, entertainment and lodging, including more than 14,000 hotel nights at an average of $148 per night. It draws an estimated 42,246 visitors, including more than 13,000 from outside Michigan, and beer tourists tend to visit multiple breweries — an average of 3.7 per person, the study found. The number of brewery visits was one aspect of particular interest to Experience Grand Rapids, Herron said. “Being the tourism bureau, we wanted to extend that, thinking that if we could extend that, (we could) extend their stay as well.” The passport program complements the Beer City Ale Trail, which stretches through several West Michigan counties and has grown from 38 breweries at its 2013 start to 76 breweries and additional cideries, distilleries and meaderies on an upcoming 2016 map to be released with a new version of the passport. Herron said more than 4,300 people, from Michigan and elsewhere, have claimed Brewsader T-shirts.

“Beer City Brewsaders” are beer enthusiasts who collect stamps at participating breweries in the Grand Rapids region and receive a commemorative T-shirt. And brewery owners say that’s just a portion of overall passport-generated traffic, as some people may not complete all their stamps or redeem for shirts. “Certainly there are far, far, far more visits … than that number,” said David Ringler, founder and owner of Cedar Springs Brewing Co. in Cedar Springs. He said beer tourism is important to his brewery, which opened a year ago and represents a $2.5 million investment. It’s about 20 minutes north of Grand Rapids. “For us to support a $2.5 million project, we need to capture not only the locals but also people outside of the area,” Ringler said. David Ringler: “We regularly Passport key to get beer tourbeer tourism. ism, and the passport has been key to that. We’re on the list. “We get people to come here without the book, but we get them with the book, too. They’re running around trying to complete their stamps, or just check out some of those in the book that look interesting.” In addition to the new passport expected to come out Nov. 21, Experience Grand Rapids is hoping to increase and broaden visitors’ stops through a recently launched area on its website where people can search for tours and experiences based on interests like art, food, shopping and beer. With the latter, options include tours at brewery locations, guided beer tours and home-brewing classes. “These kind of added-on experiences … get people to take that extra step, maybe stay a little longer, dive a little deeper into it,” Herron said.

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SPECIAL REPORT: CRAIN’S MICHIGAN BUSINESS

Keeping it in the family 106-year-old family business adjusts to markets, seizes opportunities to stay viable By Seth Schwartz

Special to Crain’s Detroit Business

The ability to adjust to changing markets and seize opportunities is critical for small family businesses to thrive, the same attributes that helped Louis Gelder & Sons reach its 106th year in business. The first opportunity arrived in 1910, when Louis Gelder moved from Chicago to Millburg, Mich., near Benton Harbor, and bought a hardware store, changed its name and started making high-end leather harnesses for wagons and buggies along with selling hardware and household products. Business was good through the decades as Louis reacted to trends, such as adding the production of barrels for fruit packaging and shifting to tractor sales and service when the era of horse-drawn farm implements came to a close. Subsequent generations of family members continued to keep the business thriving, manufacturing orchard sprayers in the ’30s, changing tractor brands when technology changed in the ’40s, and adding gas pumps at the store in the ’50s. It was in the early ’60s that the fourth generation of Gelders, brothers Bruce and Joseph, found themselves, at ages 4 and 5, sweeping the store’s floors and cleaning equipment. As they grew, they became well versed in all aspects of the company: selling tractors and farm equipment, and providing parts and service. They also became budding entrepreneurs. As teens, they ran a lawn service. By high school, they were loading tractors onto trucks and delivering equipment in Berrien, Cass and Van Buren counties. Now they are leading the company. They learned good business practices along the way. “You want to make sure it’s a good financial sale for the customer,” said now co-owner Bruce Gelder, 58. “You want to know they didn’t overpay and wouldn’t have to worry about a machine being repossessed.” Those early years of working in the business stuck with Bruce, and in 1979, after two years of college, he joined his father, “Louie,” at the family store. Then came the hard times that would put his business skills to the test. During the 1980s, a recession took its toll on farmers across the country. Fueled by high interest rates, droughts, a 25 percent drop in the value of farmland and an embargo on grain shipments to the Soviet Union, the recession put many farmers out of business. Without the farmers, tractor dealers started going out of business too, including four dealers in Berrien County. Gelder & Sons managed to survive, primarily by focusing on selling and servicing parts for their local customers.

From the late 1980s through 2002, the company expanded, adding whole tractor reconditioning to its offerings. After hunting through catalogs and maintaining contact with a variety of dealers, Bruce Gelder would drive across the Midwest during the winter and buy as many as 10 tractors a year, restoring and reselling them at prices ranging from $20,000 to $50,000. These weren’t grand corporate

maneuvers, but necessary adjustments to keep a small business moving forward — and keeping customers happy. “Bigger companies are like the Titanic,” said Gelder. “It’s hard for them to identify the problem; it’s too far down the road. By the time they see it, they don’t have enough time to react and turn around to avoid the crash. You have to think outside the SEE GELDER, PAGE 14

GELDER & SONS

Bruce Gelder reconditioned this COE cherry shaker that he bought from a farmer in Traverse City and is to ship it to a cherry farmer in Wolcott, N.Y.

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SPECIAL REPORT: CRAINâ&#x20AC;&#x2122;S MICHIGAN BUSINESS

GELDER FROM PAGE 13

box. I have to keep the guys in the shop busy and employed. Parts and service all add up to slices of the pie. ... Weâ&#x20AC;&#x2122;re always working with farmers when they have financial problems to keep them afloat.â&#x20AC;? In the middle of it all, 1993, Bruce and Joseph purchased the business from their father and changed focus a bit. â&#x20AC;&#x153;My brother and I put our heads down and went to work,â&#x20AC;? said Bruce Gelder. â&#x20AC;&#x153;We were young, dumb and had bills to pay. We saw an opportunity and seized it.â&#x20AC;? While Louis Gelder had stuck with the formula of buying and selling local tractors and service, the brothers realized that a diverse inventory was key and that there were sizable, untapped markets to mine. Going to four to five tractor shows annually in the Midwest, the brothers increased their number of medium-sized tractors. And Bruce went overseas, expanding beyond tractors to other farm implements such as used grape harvesters,

â&#x20AC;&#x153;The biggest issue in having a family business succeed into the third generation is a sophisticated skill set.â&#x20AC;? Tom Lyons, MSU Product Center and Department of Agricultural Food and Resource Economics

which they purchased from Australia and New Zealand at 45 cents to the dollar and resold for $50,000$200,000. Bruce Gelder said he is always looking for innovative products and found that the technology in some of the machinery made overseas was superior to what he could find in the states. So he now attends two trade events annually, one in Italy, the other in Germany or France. The Italian show in Bologna has 270 manufacturers and brings in 236,000 people from 140 countries.

â&#x20AC;&#x153;The trade shows in Europe enable me to get ideas,â&#x20AC;? said Gelder. â&#x20AC;&#x153;You try and see, can we market this? Sometimes it would flop, sometimes it would sell like gangbusters; you never know. We sold the chestnut harvester in Florida, Michigan, Missouri, Virginia and the Carolinas. We sold Fischer Mowers (a vineyard orchard mower) in California and Ohio.â&#x20AC;? The traveling paid off. The first year the brothers took ownership, they did $3.5 million in sales and have increased revenue between 5 percent and 10 percent each year, Bruce Gelder said. Understanding what the local market needed was crucial to their business decisions. â&#x20AC;&#x153;We ordered what could sell and concentrated on our area,â&#x20AC;? Gelder said. The expanded list of products theyâ&#x20AC;&#x2122;ve sold in the past decade are orchard sprayers, vineyard trimmers, rototillers, weed sprayers, chestnut harvesters and self-propelled fork lifts. Gelder has since established a company, Red Leg LLC, to import

tractors from Italy, 80 percent of which are sold to Gelder and the other 20 to dealers in North America, Mexico, Canada and Alaska. And he has become one of a few distributors of specialty tractors and farm equipment in the United States. â&#x20AC;&#x153;We work with a lot of diverse farmers,â&#x20AC;? said Bruce Gelder. â&#x20AC;&#x153;In this area (Berrien County), we can see how things work; itâ&#x20AC;&#x2122;s hands-on experience and allows us to see how the market reacts. If our farmers do well, it only helps us.â&#x20AC;? The companyâ&#x20AC;&#x2122;s success over the years has allowed it to open a second store, in Hart, Mich., and take over an 86-year-old fruit farm in Millburg. â&#x20AC;&#x153;Bruce has always been an innovator,â&#x20AC;? said Nikki Rothwell, director of Michigan State Universityâ&#x20AC;&#x2122;s Northwest Michigan Horticulture Research Center in Traverse City. â&#x20AC;&#x153;Heâ&#x20AC;&#x2122;s developed relationships with people in Italy and across America. ... With his shop in Hart, Bruce really serves the entire west side of the state. He has a fruit farm, so heâ&#x20AC;&#x2122;s able to relate to farmers and has empathy for what theyâ&#x20AC;&#x2122;re doing.â&#x20AC;?

And now the fifth generation is working with other family members to keep the company moving forward. Bruce Gelderâ&#x20AC;&#x2122;s son, Matt, 30, is handling sales, parts and deliveries. His daughter, Mary, a junior in college, works part time, while brother Joe does sales for new and used equipment and all ordering of domestic products. Bruce handles everything coming from abroad. â&#x20AC;&#x153;The biggest issue in having a family business succeed into the third generation is a sophisticated skill set,â&#x20AC;? said Tom Lyons, who recently was named director of the MSU Product Center and is also a professor in the MSU Department of Agricultural Food and Resource Economics. â&#x20AC;&#x153;When the next generation takes over, you need a skill set that applies to the market; you have to diversify. â&#x20AC;&#x153;Louis Gelder & Sons has built out from its core incrementally, nationally and internationally the last 30 years, which helps explain (its) success. To make it to the fourth and fifth generation is quite remarkable.â&#x20AC;?

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Progress. At the heart of West Michiganâ&#x20AC;&#x2122;s economic development, Lakers are a vital force. Throughout the region and state, Lakers live, work, and lead, helping create solutions that drive growth forward. As a major university, Grand Valleyâ&#x20AC;&#x2122;s economic impact is substantial. As a talent resource, Lakers are uniquely prepared to meet the challenges of a changing world. Thatâ&#x20AC;&#x2122;s the Laker Effect.

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WORLDWATCH WHERE MICHIGAN DOES BUSINESS

SAUDI ARABIA/QATAR

ith a nominal 2015 GDP of $646 billion, Saudi Arabia is the w o r l d ’ s 15th-largest economy. The country’s economy is mostly based on oil, and Saudi Arabia possesses roughly 16 percent of the world’s proven petroleum reserves, according to the CIA World Factbook. Saudi Arabia’s largest exports are petroleum and petroleum products. Its biggest export partners are China (13.2 percent), Japan (10.9 percent), the U.S. (9.6 percent) and India (9.6 percent). Its largest imports are chemicals, foodstuffs, machinery, motor vehicles and textiles. Qatar is the world’s 52nd-largest economy, with a nominal 2015 GDP of $166.9 billion. Qatar’s largest exports are liquefied natural gas, steel, fertilizers and petroleum products. Its biggest export partners are Japan (25.4 percent), India (14.6 percent), China (8.4 percent) and the United Arab Emirates (6.8 percent). Qatar’s largest imports are chemicals, machinery and transportation equipment and food.

Domino’s Pizza Inc. Based: Ann Arbor Operations: Master franchisee Alamar Foods operates 188 stores in Saudi Arabia

and nine stores in Qatar. Employees: 2,100 Products/Services: Pizza and side items such as chicken, potato wedges and chocolate lava cakes Top executive: Peter Jones, managing director

Dow Chemical Co. Based: Midland Operations: Offices in Riyadh, Khobar,

Jubail and Thuwal, Saudi Arabia; facilities in Dammam, Jeddah and Jubail, Saudi Arabia; R&D facility in Thuwal; a manufacturing facility in Jubail; and several joint ventures. Employees: 320 direct Dow employees and 500 Dow employees working on the Sadara joint venture Products/Services: Performance plastics and specialty chemicals for the transportation, infrastructure, packaging and consumer products Top executive: Charles Swartz, president for Dow Saudi Arabia More information: On June 16, Dow became the first company to receive a trading license from Saudi Arabia

Energy International Based: Canton Township Operations: Offices in Riyadh, Jeddah

and Dammam, Saudi Arabia; one operation in Doha, Qatar Employees: 10 Products/Services: Sales for EI’s global operations and for industrial air movement equipment (fans, VAVs, etc.), fire and smoke curtains, air curtains, pumps and building management systems Top executives: Ammar Assi, general manager in Qatar; Mazen Sheet, GM in Riyadh; Ahmed Athamneh, GM in Jeddah

Ford Motor Co. Based: Dearborn Operations: A regional office in Riyadh

and one importer-dealer in greater Saudi Arabia; one importer-dealer in Qatar Employees: 12 in Saudi Arabia and about 200 based in Dubai Products/Services: Ford products and brands Top executives: Thierry Sabbagh, managing director for Ford Middle East; Jacques Brent, president for Middle East and Africa

Ghafari Associates LLC Based: Dearborn

Operations: Offices in Jeddah, Saudi Arabia; Doha, Qatar Employees: 32 Products/Services: Engineering, architecture, process design, consulting and construction services for the automotive, aviation, commercial and corporate, health care, industrial, education, manufacturing and government industries Top executive: Ali Solaksubasi, COO, travels between Chicago and the Middle East.

Ziebart International Based: Troy Operations: Master franchisee and three

branches in Dammam, three branches in Riyadh, three branches in Jeddah and one branch in Hassa, Saudi Arabia; master franchisee, two retail locations and two processing locations in Doha, Qatar Employees: 114 Products/Services: Appearance and protection services including detailing, paint protection, underbody sound barrier, sprayed-on bed liners, automotive glass repair, architectural film, window tint, paint protection film, truck accessories, electronics, vehicle wraps and graphics. Top executive: Thomas Wolfe, president and CEO Natalie Broda

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EUREKA INDEX: MOST INNOVATIVE COMPANIES

BREAKING WITH TRADITIONAL TECHNOLOGIES Autonomous cars, device integration land automakers, suppliers among top annual patent rankings

25 MOST INNOVATIVE COMPANIES, RANKED BY PATENT QUALITY

By Leslie Green

2. Magna Electronics Inc., 130.00

Special to Crain’s Detroit Business

Telephones have evolved from tools that just make calls to mobile instruments that entertain, inform and help users complete myriad transactions. Medical products have become smart. “And people no longer buy cars for horsepower but for their electronics,” said James Malackowski, CEO of Ocean Tomo LLC. For this reason, he said, automakers and suppliers are consolidating their technologies and outnumbering life science companies on this year’s Eureka Index, Crain’s annual look at the top 25 most innovative companies. Crain’s worked with Ocean Tomo, a Chicago-based intellectual property valuation firm, to rank 2015 patent portfolios for companies in Southeast Michigan. Rankings are based on patent quality, the projected ability to bring the patents to market, and whether patent owners keep their patents or make them public domain. In 2015, there were 4,182 patent awards in Southeast Michigan, which for this report includes Wayne, Oakland,

Macomb, Washtenaw, Livingston, St. Clair and Genesee counties, up from 3,957 in 2014. Total patent awards in the U.S. last year dropped slightly to 325,979 from 326,032 in 2014. Topping this year’s list is a little-known company called Immunolight LLC. The Detroit-based biomedical firm ranked 11th in 2014 but has successfully completed a phase-one trial that essentially cured cancer in dogs. While there are smattering of additional life science companies and nonautomotive manufacturers on the list, the majority of companies this year are auto-related because they are not solely focusing on traditional automotive technologies, Malackowski said. For instance, new developments from auto supplier Magna Electronics Inc., which rose from fifth to second place, includes television screen technology, communication technology and image analysis. Such concentration is indicative of larger macroeconomic trends, Malackowski said. “Ford, for exam-

1. Immunolight LLC, 144.50 3. Bosch Automotive Service Solutions LLC, 127.70 4. Innovative Surgical Solutions LLC, 125.90 5. NeuroNexus Technologies Inc., 124.36 6. A123 Systems LLC, 123.96 7. Plastipak Packaging Inc., 122.07 8. Ilumisys Inc., 121.47 9. Henry Ford Health System, 120.10 9. American Axle & Manufacturing Inc., 120.10 11. FCA US LLC, 119.60 12. Imra America Inc., 117.20 13. Delphinus Medical Technologies LLC, 114.40 14. Ford Motor Co., 112.80 14. Global IP Holdings LLC, 112.80 16. Zephyros Inc., 109.66 17. Gentherm Inc., 108.64 18. Denso International America Inc., 107.30 19. Guardian Industries Corp., 107.20 20. Visteon Global Technologies Inc., 107.10 21. Cooper-Standard Automotive Inc., 103.30 22. Regents of the University of Michigan, 103.20 23. GKN Driveline North America Inc., 102.88 24. General Motors Co., 102.80 25. Federal-Mogul Ignition Co., 102.76

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ple, is morphing and paying a lot of attention to data for vehicle diagnostics. This plays to consolidation technology.” John LeRoy, shareholder and chair of open source software compliance at Southfield-based patent law firm Brooks Kushman PC, said automakers and suppliers are no longer innovating incrementally. Instead, they are pioneering because there are two races going on that are generating a tremendous number of patent filings: One is for autonomous vehicles; the other is for device integration. “The OEMs, non-OEMs, Apple, Android and others are jockeying for position to get access to your car console. It’s a valuable piece of real estate,” LeRoy said. He said Ford Motor Co. is trying to deliver a level-four autonomous vehicle, a car that completely takes the driver out of the loop, in four years and has even acquired Israeli machine-learning company Saips Algorithmic Solutions to make it happen. General Motors Co., he said, acquired San Francisco-based Cruise Automation Inc. with a similar march toward autonomous vehicles in mind. “These acquisitions come with a significant level of intellectual property. The degree of technology that is in the automobile is generally unSEE EUREKA, PAGE 17

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EUREKA INDEX: MOST INNOVATIVE COMPANIES

EUREKA FROM PAGE 16

derestimated,” he said. “The F-22 Raptor Fighter Jet has 2 million lines of code and the 2017 Ford GT has 10 million lines of code. That’s just the real world we are in now.” Bill Coughlin, CEO of Ford Global Technologies, said the automaker doesn’t have a number of patents it strives to file but wants to protect worthy inventions. He said Ford is working hard to energize its entire workforce through challenges, incentives, education and leadership to think more like inventors. “I teach engineers you don’t have to just invent in your own area,” he said. “Once you get people thinking like inventors, they can’t turn that off. It’s like a game you play in your head to solve problems. It’s fun.” GM holds innovation challenges that operate much like the TV show “Shark Tank” where staff compete for internal funding to do things, said Bill Peirce, director of government collaboration in GM R&D. “We run these projects much like a venture capital fund would. It’s about combing technologies from whatever source,” he said. While Ford had 831 patents in 2015 and GM 1,066, Ocean Tomo stressed the ranking isn’t about the quantity of patents but quality. Henry Ford Health System, which has advances in biomedical and software-related technologies, ranked 11th with only seven patents. Gentherm Inc.’s 2015 patent portfolio includes 13 patents. President and CEO Daniel Coker said the company, which focuses on thermal management technologies for medical and automotive uses, doesn’t just randomly create new technology. “We’ve spent quite a bit of time studying human physiology,” he said. “Your mother told you to wear a hat because that’s where you lose your body heat, but that’s not true. You lose more body heat through your hands and feet, and we’re becoming broad experts in things like this. Doug Patton, executive vice president of engineering and North American chief technology officer at Denso International America Inc., which earned 45 patents in 2015, said the company is looking at ways to spark the innovation capabilities of its associates. “We’re running an experiment on the University of Michigan-Dearborn campus where we have a couple of electric vehicles for students to use,” he said. The study is a fact-finding mission asking: Does the vehicle get charged? Does it get cleaned? What are the vehicles missing that consumers wish they had? “If you look at the Fortune 500 companies from 10 years ago, half of those companies are gone. Companies have to constantly reinvent themselves when it comes to technology,” Malackowski said. “The companies at the top of our list are best in class at doing that. They are adapting to current market need.”

1. Immunolight LLC Location: Detroit

Top executives: Frederic Bourke, founder and CEO; Harold Walder, president Patents in 2015: 6 Industry: Biomedical Score: 144.50

After Frederic Bourke’s dog, Lucy, underwent surgery for cancer, he began thinking about treating solid tumors by converting energy inside the body into light. Now Immunolight LLC, founded in 2007, is preparing a second phase of canine trials where light-absorbing nanoparticles are injected to kill tumor cells. Immunolight President Harold Walder said dogs, which are exposed to the same environment and bad food as humans, had positive results to treatments. The first study, done in partnership with the North Carolina State University College of Veterinary Medicine, included six dogs and “all were alive and doing well when the study ended a year later,” he said. One dog had the same cancer as its owner’s husband. The husband died, but the dog is now disease-free. The company has four more canine studies (working with 30 dogs), but is in discussions with the FDA regarding human trials that would likely span treatment of sarcoma, melanoma, and breast, head and neck cancers, Walder said. The development may also have other applications. “We realized shortly after we started converting wavelengths of energy, there’s a whole class of high-tech adhesives that are actually cured by UV light,” Walder said. The new adhesives, he said, could be used for cellphones, inkjet cartridges, chips, human tissue and joints in surgery and other fine parts that need bonding. Immunolight LLC’s ranking is high because its technology of treating cell disorders with photo spectro-therapy has a high probability of benefit and maintenance, said Ocean Tomo CEO James Malackowski.

2. Magna Electronics Inc. Location: Auburn Hills Top executive: Don Walker, CEO Patents in 2015: 41 Industry: Automotive supplier Score: 130.00

Magna Electronics, a subsidiary of Magna International Inc., makes electronic components for vehicles. These include sensors, driver assistance technology and actuators. Magna earned 41 patents last year and 24 in 2014. Many of its patents relate to camera-based driver assistance systems, including forward-viewing camera systems that help keep drivers in lanes, detect traffic lights, read signs, warn or automatically brake if a vehicle collision or hazard is imminent, and dim headlights as necessary as oncoming cars approach. Rear camera technology helps drivers park and check blind spots when backing up, and Magna’s SurroundVue multi-camera system, in some Ford F-150s, gives drivers a 360-degree view. “The technology and innovation behind those 2015-issued Magna patents help pave the way for the autonomous driving future we now read so much about,” Swamy Kotagiri, chief technology officer at Magna, said in an email. “We continue to invest in sensors (beyond cameras),

Bosch hits stride with vehicle diagnostic tool By Leslie Green

Special to Crain’s Detroit Business

3. Bosch Automotive Service Solutions LLC Warren Top executive: Volkmar Denner, chairman, board of management, and CEO, Robert Bosch Patents in 2015: 46 Industry: Automotive supplier Score: 127.70

Germany-based Robert Bosch GmbH purchased SPX Corp. for $1.15 billion in 2012, turning it into Bosch Automotive Service Solutions. While the transition resulted in a backlog of patents, the company in 2014 and 2015 hired a few new people and began hitting its stride in technology management, said Jim Fish, vice president of innovation for Bosch Automotive. “We have a legacy of a patent portfolio that could be considered high- or low-tech but includes effective tools for tasks in the garage,” said Fish. Recent patents include Bosch’s new Evolve diagnostic tool. Announced Nov. 1, the 10-inch touch-screen device with an Android operating system wirelessly “speaks” to and diagnoses more than 25,000 vehicle systems and 58,000 vehicle engine control unit combinations. For consumer use, Bosch earned a patent for a diagnostic tool with urgency indicators. If a software, algorithm and fusion technology.” The U.S. Patent Office has granted Magna 49 additional U.S. patents this year.

3. Bosch Automotive Service Solutions LLC See story above.

car owner thinks the vehicle has a problem, he or she can use a dongle with his or her remote electronic device, such as a smartphone, to see whether the car needs repair. Three colors classify the level — attention, caution and urgent — of repair needed. Seemingly right out of a science fiction novel are Bosch’s augmented reality applications. One of the latest patents includes technology that helps users “better understand complex issues as they visualize technical information.” In other words, Fish said, consumers in a dealership considering the purchase of aftermarket accessories could look at a tablet and see the accessories appear over the vehicle. In the service department, a service technician could hold or move a tablet or computer over a vehicle “and have the schematics and diagrams change in conjunction with the location of the computer with respect to the vehicle.” The purpose of the tech is to reduce downtime and assembly time and improve quality. The technology would also have an X-ray vision application that makes hidden components and assemblies visible without disassembly. “This world is digitizing quickly,” Fish said. “These shops are becoming software solutions for communicating with the vehicle via the cloud and detecting what could be wrong.” the procedure was effective before the patient wakes up and determine what else might need to be done. Sentio hopes it can begin marketing the technology next year for other uses, such as ear, nose and throat surgeries, pain-management procedures and developments surrounding robotic spine surgery.

4. Innovative Surgical Solutions LLC dba Sentio

5. NeuroNexus Technologies Inc.

Top executive: Chris Wybo, cofounder and president Patents in 2015: 5 Industry: Medical devices Score: 125.90

Patents in 2015: 9 Industry: Medical devices Score: 124.36

Location: Wixom

Ranked 10th last year, Sentio continues to develop “technology focused on enabling safer surgery.” Co-founder and President Chris Wybo compared its MMG (mechanomyography) technology to a GPS system for nerves. It uses sensors to help surgeons get from skin to spine safely while measuring the distance to the nerves and reducing chances of nerve injury. The company’s latest patents add more applications to the core technology, including the ability to quantify the effectiveness of the procedure. By identifying the problematic nerve, testing the nerve, performing the surgery and then testing the nerve again to see if it has improved, Wybo said, surgeons can know in real time whether

Ann Arbor Top executive: Daryl Kipke, president

NeuroNexus is a subsidiary of Plano, Texas-based Nuvectra and a University of Michigan spinoff. NeuroNexus develops components used to map brain function; to detect, stimulate or adjust neural circuits as necessary; and to deliver drugs accurately. The company’s recent patents relate “to implantable medical devices and, more specifically, to an improved implantable neural interface device with a deformable carrier or connector.” The technology is not yet ready for human clinical research, according to the company’s website. Greatbatch Inc. purchased NeuroNexus in 2012 for $12 million. In March, Nuvectra, a former Greatbatch company, spun off with NeuroNexus as a subsidiary.

6. A123 Systems LLC Livonia Top executive: Jason Forcier, CEO

Patents in 2015: 13 Industry: Battery maker Score: 123.96

A123 Systems develops and manufactures nanophosphate lithium iron phosphate batteries, nickel manganese cobalt technology for plug-in vehicles, energy storage systems, and high-performance motorsports cells for racing teams, including the Porsche 919 hybrid. The company ranked No. 13 last year. In conjunction with the Department of Energy, A123 recently was awarded patents related to performance improvements to electrochemical cells that could be used in vehicle, aerospace, medical device, electrical grid and other applications.

7. Plastipak Packaging Inc. Plymouth Top executive: William Young,

president and CEO Patents in 2015: 11 Industry: Plastics Score: 122.07

The evolution from bottling water in glass jugs to plastic bottles got Plastipak its start. Yet, as concerns over the environment has grown, so has this company. Plastipak has more than 600 patents, including highly rated patents in synthetic resins and thermoplastic polymers. Its technologies include creating lightweight plastic containers. A recent patent is to make it easier to remove labels from containers for recycling. Ocean Tomo said the developments help Plastipak respond to market needs for polyethylene terephthalate (PET) containers, plastic beer containers and the evolution of metal, glass and paper containers to recycled resin packaging.

8. Ilumisys Inc. dba Toggled Troy Top executive: Jim Scapa, founder,

chairman and CEO Patents in 2015: 11 Industry: Lighting Score: 121.47

Ilumisys Inc., a subsidiary of Altair Engineering Inc., makes LED lighting products to replace florescent tubes. David Simon, vice president of corporate communications and senior director of Altair, said the company, which has more than 90 patents, is working on developments that integrate lighting with the rest of a building’s infrastructure and intelligence, such as occupancy sensing. Simon described a scenario where the lights not only turn on when you walk in the room, but where smart infrastructure controls the lights, the room temperature, how much fresh air is coming in, and so on. “If you look at where the internet of things is taking us, it’s really toward a future that is more seamless in terms of what mechanical objects are doing to make our lives better,” he said.

9. Henry Ford Health System See story, Page 18. SEE NEXT PAGE

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EUREKA INDEX: MOST INNOVATIVE COMPANIES

Henry Ford Health: From drug therapy to gowns

9. (Tie) American Axle & Manufacturing Holdings Inc.

Special to Crainâ&#x20AC;&#x2122;s Detroit Business

Detroit Top executive: David Dauch, chairman

By Leslie Green

9. (Tie) Henry Ford Health System Detroit Top executive: Nancy Schlichting, CEO Patents in 2015: 7 Industry: Health care Score: 120.10

Since launching the Henry Ford Innovation Institute in 2012, Henry Ford Health System has earned 15 patents. In 2015, it was issued seven patents, had 43 invention disclosures and generated more than $1 million in licensing revenue, said Mark Coticchia, vice president and chief innovation officer of HFHS. Inventions vary from drug and gene therapy to addressing culinary wellness, unflattering hospital gowns and problems with internal communications.

One patent has a predictive medicine component. The hospital system is working with pharmaceutical companies to study a cardiovascular drug that may detect biomarkers that reveal whether certain cardiovascular drugs would help patients with chronic heart failure. HFHS is also working with a pharmaceutical company in Southeast Asia on clinical trials of a multi-modal cancer gene therapy with the potential to improve tumor metastases control at various stages of prostate cancer. Researchers are studying the use in other types of cancer, and Coticchia hopes the therapy, which is still subject to approvals, will be on the market in the next couple of years. Carhartt Inc. manufactured the original version of the hospital gown. Now on version 17, the latest patent for the front-opening

gown not only provides patients physical privacy, but it also can be color-coded by size, have hidden rear panels so clinicians can use stethoscopes and have telemetry and intravenous access. The gown could also be treated with anti-microbial coatings. Coticchia said HFHS recently licensed the commercial distribution rights of the gown to Illinois-based Medline Industries Inc. Patient privacy is also the basis of newly patented and commercialized software code, CareTrail, that HFHS developed with Microsoft Corp. and Detroit developer VisionIT Inc. â&#x20AC;&#x153;Inefficient communication costs us,â&#x20AC;? Coticchia said. â&#x20AC;&#x153;Hospitals lose about $12 billion a year due to adverse events, wasted clinical time and decreased patient throughput.â&#x20AC;? To address the problem, the health system created a â&#x20AC;&#x153;workflow-optimized, secure mobile

platformâ&#x20AC;? that allows clinical teams to engage in real-time communication. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a patient-centered page similar to Facebook where the care providers can communicate a patientâ&#x20AC;&#x2122;s needs with one another. It (also) provides a history of what has been done and what needs to be done next,â&#x20AC;? Coticchia said. HFHS plans to roll out the mobile app to surgery departments and home health in beta form later this year or early next year. Henry Ford Health System shows no signs of slowing down development. â&#x20AC;&#x153;Twenty-eight innovations are being used both internally as well as in the market place,â&#x20AC;? Coticchia said, with another 150 ideas under evaluation and 11 in development. â&#x20AC;&#x153;We have the potential of impacting just about every patient in our system.â&#x20AC;?

and CEO Patents in 2015: 32 Industry: Auto supplier Score: 120.10

Key areas for American Axle & Manufacturing Inc. inventions are in lightweighting, improving power density, improving fuel economy and managing torque. Its recent patent portfolio included Quantum, which is what American Axle CTO Phil Guys called â&#x20AC;&#x153;an entirely new approach to the traditional axle.â&#x20AC;? Because the axle weighs 30 percent to 35 percent less, he said, there is a 30-40 percent reduction in drag losses and an increase in fuel economy.

11. FCA US LLC Auburn Hills Top executive: Sergio Marchionne, CEO

Patents in 2015: 106 Industry: Automaker Score: 119.60

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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 // N O V E M B E R 1 4 , 2 0 1 6

EUREKA INDEX: MOST INNOVATIVE COMPANIES

Ford’s inventiveness spreads inside, outside auto industry By Leslie Green

Special to Crain’s Detroit Business

14. (Tie) Ford Motor Co. Dearborn Top executive: Mark Fields, president and CEO Patents in 2015: 831 Industry: Automaker Score: 112.80

Inventiveness at Ford Motor Co. is increasing across the board, said Bill Coughlin, CEO of Ford Global Technologies. The automaker sub“We do not approach innovation as ‘Let’s go do some peer research,’ ” said Phil Jansen, head of product development for FCA—North America. “We start with our brands and our customers’ needs … and innovate around those needs.” For one patent, Jansen said, it was time for the automaker to reinvent the fuel pump on the Chrysler Pacifica, finding ways to integrate it electrically and making it as efficient as possible. As a result, Jansen said, the fuel pump is lighter, more accurate, more energy efficient and less expensive.

12. Imra America Inc. Ann Arbor Top executive: Makoto Yoshida,

mitted about 6,000 new inventions for consideration last year, a 36 percent increase over 2014, and is making advances in technology related to electric vehicles, mobility, wearable devices, navigation and more. Coughlin pointed to patents for displays and for its new Pro Trailer Backup Assist introduced on 2016 F-series trucks. He said a couple of competitors wanted to license a patent related to Ford’s display technology. An outside display shows drivers the state of charge for electric vehicles. An inside display

shows drivers how they are driving and the impact they can make in changing their behaviors. The Backup Assist uses camera technology that allows drivers to steer trailers with a control knob. “Lots of people, particularly males, think we can back up any vehicle with a trailer,” Coughlin said, “but it’s not that easy in practice, and Ford is making it easy in practice.” In addition, the automaker earned patents for solutions that go beyond cars and trucks. Examples include innovations

around Ford’s MoDe:Me, MoDe:Pro and MoDe:Flex eBikes. The electric bikes operate in conjunction with an Apple Watch app that can provide pedal assistance when a bicyclist’s heart rate reaches a certain level and work with a mobile device to keep riders informed about routes and weather. In September, Ford announced Carr-E, a pedestrian-assisted device that Coughlin described as a four-wheeled disc you can stand on and use to move around or that can carry your packages and follow the

transmitter you carry as you walk. “I teach engineers you don’t just have to invent in your own area,” Coughlin said. And they don’t. One of the newer inventions is On-The-Go H2O. The prototype captures condensation from a car’s air conditioner and runs it through a filtration system to create drinkable water. Ford is looking at uses in areas where clean drinking water is not readily available, he said. “This is not that engineer’s job. It’s just an example of how people in the company are thinking.”

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president Patents in 2015: 21 Industry: Manufacturing Score: 117.20

Imra America is a research company, founded by Japanese auto parts maker Aisin Seiki Co. Ltd., that concentrates on nonautomotive technology. Specialized laser technology is the primary focus of Imra’s patents. President Makoto Yoshida said that while the company’s largest client is a Lasik manufacturer in Germany, Imra is expanding into micro-precision machining. Often, he said, high heat not only makes necessary cuts but also damages surrounding areas. Imra’s patents are focused on developing low-cost, high-power lasers for use with metals, semiconductors and eye surgery that doesn’t damage surrounding areas.

13. Delphinus Medical Technologies LLC Novi Top executive: Mark Forchette,

president and CEO Patents in 2015: 6 Industry: Medical devices Score: 114.40

A spinoff subsidiary of the Barbara Ann Karmanos Cancer Institute, patents for Delphinus Medical Technologies Inc. are related to its breast ultrasound technology. The invention seeks to improve detection of cancer in dense breasts and, by decreasing radiation and discomfort, increase the number of patients receiving mammograms. Delphinus raised $40 million in Series C venture funds in December and tripled the size of its facility when it moved to Novi from Plymouth in May.

14. Ford Motor Co. See story above.

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EUREKA INDEX: 14. (Tie) Global IP Holdings LLC Sterling Heights Top executive: Nick DeMiro, president

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Patents in 2015: 8 Industry: Auto supplier Score: 112.80

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Global IP Holdings LLC is the patent-holding company of Mayco International LLC, an auto supplier that makes interior and exterior body parts such as airbag covers, door panels and body side moldings. The company, which earned 19 patents in 2014, ranked second last year. Its patents include plastic moldings that look like coated genuine wood and air vent control assemblies.

16. Zephyros Inc.

Ŷ Involved in significant international trade initiatives, including creation of the World Trade Organization, the North American Free Trade Act, and the Free Trade Area of the Americas.

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Gentherm’s core business is thermal manufacturing technology for comfort systems in cars, such as heating and cooling systems for car seats and cup holders. In 2014, the company made Crain’s list of fastest-growing companies and Forbes list of best small companies. In addition to technology that heats seats, Gentherm makes a steering wheel heater. The company doesn’t stick to just cars. It has a division devoted to converting natural gas into electricity where grid power isn’t available and a medical division that is focused on keeping patients warm and comfortable. One recent patent includes technology for Blanketrol, a hyper-hypothermia system that offers programmable body temperature regulation. Another patent keeps blood at a precise temperature when taken out and then recirculated through the body. In addition to the medical and automotive technology, Gentherm also is developing systems to keep batteries warm or cool, as needed. Coker said certain types of lithium-ion batteries fail if they are too hot. “We’re a very small company, but we earn about $1 billion in revenue a year,” said President and CEO Daniel Coker. Gentherm has 800 patents in total. “We like to attack problems that are difficult.”

Ŷ Former member of the National Labor Relations Board and Commissioner of the U.S. International Trade Commission. Dennis has served as a presidential appointee under four U.S. presidents

Zephyros Inc., the patent holder for L&L Products Inc., specializes in acoustic insulation, static sealing, vibration reduction, structural reinforcements and composite components for automotive and aerospace companies. Patents for 2015 include methods for improving bond joint strength and reinforcement baffling and sealing, and creating high-tech sound absorption materials.

Patents in 2015: 17 Industry: Auto supplier Score: 109.66

and CEO Patents in 2015: 13 Industry: Auto supplier Score: 108.64

Northville Top executive: Daniel Coker, president

In Your Corner.

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Romeo Top executive: Tom Kleino, president

17. Gentherm Inc.

Labor & Employment Experience

18. Denso International America Inc. See story, page 21

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C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // N O V E M B E R 1 4 , 2 0 1 6

Special to Crainâ&#x20AC;&#x2122;s Detroit Business

18. Denso International America Inc. Southfield Top executive: Ken Ito, CEO of Denso North America Patents in 2015: 45 Industry: Auto supplier Score: 107.30

Auto supplier Denso International America Inc. reinvests about 9 percent of its net sales in research and development. Doug Patton, executive vice president of engineering and North American chief technology officer, said Denso is staking out real estate, from a patent perspective, in the areas of active safety, advanced thermal systems, economist drive, human-machine interface and connectivity. â&#x20AC;&#x153;A lot of change is going on,â&#x20AC;? he said. â&#x20AC;&#x153;One of the real values Denso has, if weâ&#x20AC;&#x2122;re talking about safety systems, is that Denso can see the whole picture. And we can innovate in specific areas.â&#x20AC;? He said patents in human-to-machine interface developments include a driver status monitor where a camera identifies not only whether the driver is sleepy or awake but also whether the driver is paying attention to the road. With adaptive cruise control, drivers are apt to look away, Patton said. However, this technology would get drivers to resume watching the road. â&#x20AC;&#x153;The camera is pretty much a camera, but the algorithms around how you adapt it can be patented,â&#x20AC;? he said. Roadways unique to North America make active safety even more of a necessity. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m not sure

thereâ&#x20AC;&#x2122;s any place in the world, like in California, where you have six or eight lanes of highway coming together,â&#x20AC;? said Patton, adding thereâ&#x20AC;&#x2122;s a lot going on with lateral motion, lane changing, people coming from all different directions. Patents in active safety technology are about how you sense that data and take action with that data, Patton said. As electric vehicles become more prominent, so do methods of making vehicles last longer on the road and providing more comfort to passengers. â&#x20AC;&#x153;If you have an electric vehicle, you donâ&#x20AC;&#x2122;t have a heat source,â&#x20AC;? Patton said, adding that heat pumps in homes help reduce energy consumption. As part of its advance thermal systems technology, Denso is developing a heat pump for electric vehicles that can help extend the range of the car because the battery isnâ&#x20AC;&#x2122;t being run down to heat the car. Drivers have their cellphones, XM radios use satellite and V2X (or vehicle to anything technology) uses short-range Wi-Fi connectivity in cars. Denso has earned patents for technology that explores ways to use these methods of connectivity independently or together to make cars safer by enabling them to communicate with each other. Using data to personalize driver experiences is also on Densoâ&#x20AC;&#x2122;s radar. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s a bunch of anticipatory opportunity with big data and collecting it now,â&#x20AC;? Patton said. He said data provides predictive opportunities in a number of ways, such as how many radio stations a driver listens to. â&#x20AC;&#x153;Why do I have to have six buttons come up on my radio even though I listen to only three? My car should know me,â&#x20AC;? he said.

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EUREKA INDEX: MOST INNOVATIVE COMPANIES 19. Guardian Industries Corp. Auburn Hills Top executive: Ron Vaupel, president

and CEO Patents in 2015: 58 Industry: Glass manufacturer Score: 107.20

Patents for Guardian Industries Corp. are primarily for its core business, the manufacturing of float glass and fabricated glass products for residential, commercial and automotive use. Last year, the company reached a $70 million settlement with the Environmental Protection Agency to reduce air pollution emissions at manufacturing plants in Michigan, California, Iowa, Texas, New York, Pennsylvania and South Carolina. New Guardian Industries technologies include anti-condensation coatings, new methods in making a vacuum insulating glass window unit, thermochromic windows, glass cylindrical lens arrays for concentrated photovoltaic systems and mirrors that include silicon aluminum to increase durability and environmental stability.

20. Visteon Global Technologies Inc. Dearborn Top executive: Sachin Lawande,

president and CEO Patents in 2015: 14 Industry: Auto supplier Score: 107.10

A subsidiary of Visteon Corp., Visteon Global Technologies Inc. earned patents last year for a variety of display-related technologies, including an LCD display unit, particle animation, and methods

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22. Regents of the University of Michigan Ann Arbor Top executive: Mark Schlissel, president Patents in 2015: 159 Industry: Research and development Score: 103.20

The automotive industry is making huge strides in innovation, but James Malackowski, CEO of IP valuation firm Ocean Tomo, said innovation is also happening in academic research. “I’m in a university with great researchers, great ideas and sufficient money to patent them and get them into the world,” said Tech Transfer director Ken Nisbet. The University of Michigan’s technology transfer office handles the commercialization of inventions by researchers in its 19 schools. In the past five years, startup companies based on those inventions have raised more than $700 million in funding. Innovations include short- and long-range wireless receivers for the plethora of internet of things-connected devices on the market and being created, drug therapies and medical procedures and new power sources. With Henry Ford Health System and the Colorado State University Research Foundation, UM has patented a method for diagnosing a bone disease or other collagen-related condition. The university is behind research that may treat endocrine diseases, such as polycystic ovary of detecting a smart device and simulating the device’s user interface on a vehicle display for user control. “With the car becoming a connected mobile platform, drivers and passengers expect to access information or entertainment in their vehicles as they do with their smartphones or tablets,” said Visteon President and CEO Sachin Lawande in a statement earlier this year. “Consequently, intuitive higher-resolution displays with unique surface appearances are expected to include 3-D graphics and intuitive interfaces.

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21. Cooper-Standard Automotive Inc. Novi Top executive: Jeffrey Edwards,

chairman and CEO Patents in 2015: 4 Industry: Auto supplier Score: 103.30

Cooper-Standard Automotive Inc. has

syndrome, Nisbet said. “This is a disease that to date has no known therapies.” Last year, Millendo Therapeutics Inc., a UM startup formerly called Atterocor, received $62 million in series B funding from New Enterprise Associates Inc. UM patented research for the therapy, called MLE4901. Millendo also entered a licensing agreement with pharmaceutical company AstraZeneca plc to perform clinical trials and bring the treatment to market. Other interesting new patents include an invention that enhances the viability of cells and induces their outward migration for cell transplantation, which is used to treat musculoskeletal disorders and degenerative diseases, such as diabetes. Nisbet also pointed to innovation behind Ann Arbor-based startup HistoSonics Inc. The company’s technology, in clinical trials, uses sound waves to destroy tumors, such as fibroids, without causing collateral tissue damage. UM also developed the technology for its spinoff PsiKick Inc. The company, run by CEO Brendan Richardson, is creating battery-less technology to power the sensors that other innovators are developing quickly. One 2015 PsiKick patent allows the technology to use data about power harvesting conditions to alter a power-on or boot sequence, another is for a wake-up receiver. “The design as well as devices would enable other manufacturers to create this nanopower, which means they can operate with very little juice or power life,” said Nisbet. “The applications are enormous.” patents for “feeling sensors,” such as those that will stop a closing door if it senses a hand or other object is in the way. “Along with feeling, we have a patent for textile properties in the appearance of rubber that makes it look nice, like fabric,” said Chris Couch, vice president of innovation and product groups. The company also patented Magalloy, a new alloy coating to enhance corrosion resistance and provide for better longterm performance. Target applications include fuel and brake lines and engine oil and transmission oil cooling lines. While Cooper-Standard earned four patents last year, Couch said the company chose not to file patents on some of its “more important innovations” because of “fundamentally new chemistry.” Couch called it the Coke recipe strategy.

22. Regents of the University of Michigan See story above

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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 // N O V E M B E R 1 4 , 2 0 1 6

EUREKA INDEX: MOST INNOVATIVE COMPANIES

GM’s plan for patents: invent, commercialize and repeat By Leslie Green

Special to Crain’s Detroit Business

24. General Motors Co. Detroit Top executive: Mary Barra Patents in 2015: 1,066 Industry: Automaker Score: 102.80

For the past year, Mary Barra, CEO of General Motors Co., has been telling staff and media alike that big change is coming to the auto indus-

try, and soon. The company has about 45,000 patents on file and no intention of slowing down, said Bill Peirce, director of government collaboration at GM R&D. Last year’s patents vary from new welding processes and in-vehicle cameras to changes in battery manufacturing, alert systems and car-sharing technologies. GM recently earned two sensor-related alert technologies. Proactive Alerts notifies drivers in advance if there’s likely to be a failure

in the vehicle’s starter motor, fuel pump or battery. The technology is available to OnStar subscribers with select Chevrolet cars. “Another one that’s so simple that we wonder why someone didn’t think of this sooner … is a patented rear seat reminder feature (because) of all the issues of people and pets being left in the back of cars,” Peirce said. The technology, he said, is based more on what drivers did with the door than what they did or didn’t

put in the car. He said if the rear car doors have been opened or closed recently, the driver will get a reminder chime before leaving the vehicle notifying him that someone or something may be in the back. Cameras are becoming an expected safety feature, and GM is making improvements. The rearview mirror in the Cadillac CT6 now has a wide-angle view because of GM’s patented mirror/camera technology. Drivers can switch between the mirror and video tech-

nology, which gives a clear view out the back window without the headrest or any of the people. Peirce said the technology will be available on the 2017 Chevrolet Volt EV. The automaker also patented a test technique for the manufacturing process of the Volt’s battery pack. “One of those is known as the spider robot,” said Peirce. It’s envisioning a robot that can sense and pick which cells, each with plus and minus tabs, should go in one of the vehicle’s five battery packs.

23. GKN Driveline North America Inc. Auburn Hills Top executive: Phil Swash, CEO

Patents in 2015: 6 Industry: Auto supplier Score: 102.88

A large part of GKN Driveline North America Inc.’s business is in drive shafts. Ramon Kuczera, senior vice president of technology for GKN, said the company has been working in the area of e-drive, high-voltage hybrids and pure electric drive transmissions. “Because of the variety of our innovations, we don’t just stick to one area,” said Kuczera. “We work in everything that makes the wheels go around, everything that makes your driving experience quite a bit better.”

24. General Motors Co.

PEACE OF M ND

See story above

25. Federal-Mogul Ignition Co. Southfield Top executive: Rainer Jueckstock, CEO

of Federal-Mogul Powertrain and co-CEO of Federal Mogul Holdings Corp. Patents in 2015: 20 Industry: Auto supplier Score: 102.76 “We’re talking about patents for conventional spark plugs, improving design, new ceramic materials … and patents for a completely revolutionary method for igniting fuel mixtures in the engine,” said Keri Westbrooke, director of engineering and technology for Federal-Mogul Powertrain, another subsidiary of Federal-Mogul Corp. Because Federal-Mogul often works anywhere from three to six years in advance of a new engine being released, its technology has to be somewhat predictive, said Westbrooke. With changes in spark plugs in mind, Federal-Mogul has patented the Advanced Corona Ignition System, which generates a corona discharge in the power cylinder. Westbrooke said the system would, among other things, result in improved fuel economy and enable OEMs to develop new combustion engine strategies. Work started about eight years ago, and limited production is expected to begin in about two years.

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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 // N O V E M B E R 1 4 , 2 0 1 6

Snyder heading to China for 8-day trade trip; Duggan to join in By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

LANSING — Gov. Rick Snyder was scheduled to leave late last week for an eight-day trade mission to China, with plans to focus on increasing jobs and investment in the state’s automotive and agriculture sectors. The trip, Snyder’s sixth to the country since taking office in 2011, also will include promotion of the state’s tourism and mobility industries. Detroit Mayor Mike Duggan will join Snyder in the southern city of Shenzhen for part of the trip, Snyder said. He and Duggan are expected to promote Michigan’s auto industry and supply base. “That’s been a major commitment, and it’s been a great return,” Snyder told Crain’s about his visits to

“That’s been a major commitment, and it’s been a great return.” Gov. Rick Snyder

China. Several Chinese companies have invested in Michigan, to the tune of close to $650 million, under Snyder’s administration, his office said. Snyder said trade visits play a critical role in building relationships and attracting investment from companies considering locating in the United States. In August, Zhongding USA Cadillac Inc., dba Michigan Rubber Products Inc., a subsidiary of Chinese rubber

parts manufacturer Anhui Zhongding Sealing Parts Co. Ltd., disclosed a $4.3

The Michigan Department of Agriculture and Rural Development also

million expansion of its manufacturing operation in Cadillac that could help it grow in heavy truck and agriculture markets. Zhongding’s project is expected to add 125 jobs. In June, Karma Automotive LLC, formerly Fisker Automotive Inc. and a subsidiary of China’s Wanxiang Group, said it will open an engineering and sales office in Troy to support production of luxury hybrid vehicles. That project is expected to cost $3.6 million and add as many as 150 jobs. And in April, Paslin Co., a subsidiary of China robotics manufacturer

will promote the state’s food and agriculture products. Michigan has an opportunity to grow exports by highlighting its value-added food processing, Snyder said. The Michigan Economic Development Corp. is taking 11 companies from Michigan to China to help them find buyers and distributors in an effort to boost exports. Snyder’s trip was scheduled to include visits to the cities of Shanghai, Hangzhou, Chongqing, Shenzhen, Guangzhou, Beijing and Nanchang. He plans to meet with companies and Chinese government leaders, and visit Shanghai Auto City, a hub of auto production in that city.

lion expansion in Warren, with 150 new jobs.

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

Zhejiang Wanfeng Technology Development Co., announced a $32.4 mil-

DEALS & CALENDAR DETAILS WEDNESDAY NOV. 16

November Economic Development Forum. 8-9:30 a.m. Troy Chamber of

ACQUISITIONS & MERGERS

Alliance Franchise Brands LLC,

Plymouth, a marketing, print and graphics communications firm, purchased KKP Canada Corp., Richmond, Ontario, a print, design and sign services franchise, to add 50 franchise locations to the Alliance Brands network. Website: alliancefranchisebrands.com.

CONTRACTS

ZipLogix LLC, Fraser, a real estate

technology company, teamed with SQFTx Inc., Boulder, Colo., a real estate listing app company, to manage home listings and transactions. Websites: ziplogix.com, sqftx.com. Doner Co., Southfield, an advertising agency, has been named agency of record for Beaumont Health, Royal Oak. Websites: beaumont.org, doner.com. Palace Sports & Entertainment, Auburn Hills, has chosen Belfor Property Restoration, Birmingham, as exclusive restoration firm of the Detroit Pistons and PS&E and presenting

sponsor for the Pistons transportation program and halftime report on the Detroit Pistons radio network. Websites: belfor.com, palacenet.com.

EXPANSIONS

APIS North America LLC, Royal Oak, a subsidiary of APIS Informationstechnologien GmbH, Braunsch-

weig, Germany, a software developer for risk mitigation and functional safety analysis of product and processes, has opened an office at 621 E. Fifth St., Royal Oak. Telephone: (586) 549-8667. Website: apis-iq.com. Olga’s Kitchen Inc., Livonia, of

Team Schostak Family Restaurants, has opened a third Olga’s restaurant in Ann Arbor at 3500 Washtenaw Ave. Telephone: (248) 855-4300. Website: olgas.com. Vokin LLC, Boise, Idaho, a vodka distillery, opened an operations facility at 710 Junction St., Plymouth. Telephone: (248) 887-9500. Website: vokinvodka.com. Ficosa North America Corp., Madison Heights, an automotive supplier of shift, rear-view mirror, fluid, parking brake and air intake systems, opened a 270,000-square-foot manufacturing facility in Cookeville, Tenn. The plant will produce automotive rear-view mirror systems. Website: ficosa.com.

NEW PRODUCTS

Reverie, Bloomfield Hills, a sleep

technology company, launched a collection of Bluetooth-enabled adjustable bases and six new mattresses, including the T series adjustable power bases, two Dream Hybrid mattresses and four Dream Supreme mattresses. Website: reverie.com.

STARTUPS

Provizr, Ann Arbor, a local investment advisory firm, has opened at 900 Victors Way, Suite 240, Ann Arbor. Telephone: (734) 864-4500. Website: myprovizr.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.

Commerce. Local industry experts will recap the past year and discuss opportunities and challenges they will face in the coming year. Speakers: Lindsey Williams, vice president of government affairs, Delphi Corp.; Thomas Shafer, president and COO, Talmer Bank & Trust; Chuck Ruiz, executive vice president, Basso Design Group; Stephanie Bergeron, president, Walsh College. Rehmann, Troy. Free for members; $10 nonmembers. Day-of-event registration is an extra $5. Website: troychamber.com.

THURSDAY NOV. 17

The National Conversation on Board Diversity. 7:30-9:30 a.m. Inforum.

Across the nation and throughout the world, business leaders will discuss one strategic question: “How can we harness investor influence, legislation, targeted publicity and other means to accelerate progress for women on boards?” Speaker Nancy Gioia, former Ford Motor Co. executive who serves on boards at Exelon Corp. and Brady Corp. Michigan First Credit Union, Lathrup Village. $35 members; $45 nonmembers. Website: inforummichigan.org. 2016 Crain’s Health Care Leadership Summit. 7:30 a.m.-1 p.m. Crain’s De-

troit Business. Learn about the ever-changing landscape of the health care industry, plus make the professional contacts to help navigate these changes. The program includes a keynote speaker, breakout sessions and the Health Care Heroes awards. Troy Marriott. $125. Price increases after Nov. 14. Contact: Kacey Anderson, email: cdbevents@ crain.com; phone: (313) 446-0300.

FRIDAY NOV. 18

CFA Annual Forecast Luncheon.

Noon-1:30 p.m. CFA Society of Detroit. Kevin O’Leary of ABC’s “Shark Tank” will share his outlook for 2017. MotorCity Casino Hotel, Detroit. $45 members; $65 nonmembers. Website: cfasociety.org.

UPCOMING EVENTS

If America Doesn’t Stand for Free Trade, Who Does? 11:30 a.m.-1:30 p.m. Nov. 21. Detroit Economic Club. Australian Ambassador Joe Hockey will argue that free trade must continue if the United States is to continue as a global and regional leader. Westin Book Cadillac, Detroit. $45 members; $55 guests; $75 nonmembers. Website: econclub.org. Sheriff Michael Bouchard — Leading in Times of Chaos. 7:30-9 a.m. Nov. 29.

Leadership Oakland. The Oakland County sheriff shares what it’s like to lead in turbulent times in law enforcement. Troy Community Center. $32 members; $36 nonmembers. Website: leadershipoakland.com. Michigan’s Private Higher Ed: A Powerful Workforce Generator. 11:30 a.m.-1:30 p.m. Nov. 30. Detroit Economic Club. Speakers include Stephanie Bergeron, president and CEO, Walsh College; Virinder Moudgil, president and CEO, Lawrence Technological University; and Keith Pretty, president and CEO, Northwood University.

MotorCity Casino Hotel, Detroit. $45 members; $55 guests; $75 nonmembers. Website: econclub.org.

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

PEOPLE: SPOTLIGHT Goodwill names schools chief Varner as CEO After a nearly yearlong search,

Goodwill Industries of Greater Detroit has named Daniel Varner, the CEO of Excellent Schools Detroit,

Daniel Varner

as its CEO, effective Nov. 21. Varner will succeed Lorna Utley, who is retiring after leading Goodwill for nine years to launch an entrepreneurial

undisclosed joint venture. Varner served as CEO of the nonprofit Excellent Schools Detroit since its inception in 2010. In that role, he helped design and implement common activities and programs, such as the Detroit College Access Network. Varner co-founded Think Detroit Inc., a youth development and recreation nonprofit that in 2006 merged with the Detroit Police Athletic League to form Think Detroit PAL. He also was a program officer for the Battle Creekbased W.K. Kellogg Foundation.

Syntel CEO resigns; COO takes interim role Nitin Rakesh, CEO and president of Troy-based information technology company Syntel, stepped down and will be replaced on an interim basis by company COO Rakesh Khanna. The company did not give a reason for the resignation. Syntel’s stock has lost more than a quarter of its value since the company reported a loss Oct. 20. Khanna is a Syntel veteran who has been COO since 2012. Also, Prashant Ranade, formerly executive vice chairman, was named co-chairman of the Syntel board. He has served on the board since 2007 and was CEO and president from 2010 to 2014, when Rakesh took the job.

Metro Times seeks new editor — again The Ferndale-based alt-weekly Detroit Metro Times is again searching for a new editor-in-chief after Dustin Blitchok resigned last week after about nine months in the job. Blitchok was the third top editor at the paper in three years under its current owners. Chris Keating, regional publisher for Metro Times’ parent company, Cleveland-based Euclid Media Group LLC, declined to disclose other details. Blitchok was previously communications director for Oakland County Treasurer Andy Meisner and, before that, a reporter for The Oakland Press.

November 14, 2016

OFFICE FROM PAGE 1

Midtown, said AJ Weiner, managing director in the Royal Oak office of JLL (formerly Jones Lang LaSalle). That’s made more possible because of the upcoming completion of the QLine streetcar, which will make commuting between the New Center area to the north and the central business district employment bases more convenient. “The vacant steel dinosaurs lurking over downtown have effectively passed us by,” he said. “What I see happening is, as developers look to add residential to the marketplace, which they are actively doing, if you’re going to build a 10-story building, add two floors of office to it, 40,000 feet, because you can justify that.” But a 14.2 percent vacancy rate of the market’s 14.35 million square feet also means there is availability — just perhaps not in the easy-to-accommodate contiguous blocks that large users prefer and generally need, or in buildings that have things like convenient parking and street visibility, said Matt Farrell, CEO and co-founder of Bingham Farmsbased real estate firm Core Partners

RIZZO FROM PAGE 3

departing incumbents had lost in August primary bids before the Macomb charges came. Still, local officials point out that Republicans had a big night in several suburban elections, a trend that likely had more to do with Donald Trump’s unexpected success in Michigan and anti-establishment sentiment than with Rizzo. Anthony Marrocco, the Democratic public works commissioner of 24 years in Macomb County, also had a small Rizzo contract for dumpster service and lost to challenger and U.S. Rep. Candice Miller, R-Harrison Township, on Tuesday. More than likely, the federal government made a calculated move in the first round of the corruption case to avoid making ripples in the election, said Andrew Arena, executive director of the nonprofit Detroit Crime Commission and a former special agent in charge of the FBI’s Detroit office. “They’re going to weigh all the factors, and put a lot of thought into it. You really don’t want to generally affect an election either way,” he said. “You are, after all, innocent until proven guilty, and that can be a concern if someone is found innocent, after you’ve already cost them their political position.” That is likely why a widespread corruption probe began in court with two non-supervisor township trustees, one already voted out of office and one already unlikely to remain on the board next year, Arena and others said. But in the coming months, other charges may target other officials with much better political prospects in future elections.

Page 2525

RAIN SD ETROIT BUSINESS C R A I N ’ S D E T R O I TCB U ’S IN ESS // N O V E M B E R 1 4 , 2 0 1 6

COSTAR GROUP INC.

The Marquette Building is at 243 W. Congress St.

LLC. He said a number of buildings — admittedly the “good, the bad and the ugly” — are available with floor plates ranging from 8,000 to 15,000 to 20,000 square feet or more. “Thirty-seven buildings have availability of 8,000 feet, and those have a lot more spaces that can accommodate it,” he said. There is no need for too much concern just yet, Jim Ketai, CEO of Gilbert’s Bedrock Real Estate Services LLC, said in a statement. “Occupancies are climbing rapidly, but there is still plenty of available office space in downtown Detroit, although it needs investment, as well

Going away almost as quickly as post-election yard signs will be the Rizzo brand, said Joseph Munem, director of government affairs and public relations for GFL Environmental USA Inc., the U.S. subsidiary of GFL created by the Rizzo purchase. The company has already covered the Rizzo name with a GFL banner at its Sterling Heights subsidiary headquarters, and will fit all Rizzo garbage collection trucks with temporary GFL banners by the end of the month. A more permanent refit, including painting all red Rizzo trucks in GFL’s green with new signs, is underway but will take closer to a year, Munem said. “That transition will take longer, because these trucks are working,” he said. “It takes about nine or 10 days to do an entire refit.” Munem also noted that GFL Environmental hasn’t actually lost any contracts since the FBI probe became public and even gained two new ones, in Dearborn Heights and Richmond Township, as GFL Environmental CEO Patrick Dovigi has been meeting with community leaders and assuring them of continued service. Rizzo isn’t the only business involved in the corruption case. While the FBI hasn’t acknowledged that Rizzo is the “Company A” who employed “Cooperating Human Source 1” assisting the government in its case against Freitas and Reynolds, the company itself acknowledges it is cooperating with the probe. Clinton Township officials have said Rizzo is the only company that landed a contract approaching the $18 million deal referenced in an Oct. 12 criminal complaint against Reynolds. But a subsequent grand jury indictment brought Nov. 2 accuses Reynolds of taking $16,000 from a “Company C” to influence township business between 2009 and 2013, and another

as ample opportunity to create more,” he said. “We are actively seeking properties that could accommodate the increasing demand to be downtown as well as opportunities for new ground-up development. WeWork, which is opening early next year, is going to be a phenomenal option for office space as well. We are always willing to work with potential tenants to find them the right space.” Among those new ground-up developments are on Gilbert-controlled property — specifically, the 2-acre site of the former J.L. Hudson’s department store on Woodward, where a high-rise is planned, perhaps as high as 60 stories; and the Monroe Block, bounded by Monroe, Farmer and Bates streets, Woodward and Cadillac Square east of the former Compuware Corp. building that Gilbert now owns with Detroit-based Meridian Health. And experts agreed that the average downtown rents now don’t support construction of new office high-rises because they aren’t high enough to service debt on construction loans. Rather than the average of $23.23 per square foot currently being asked in the prime Class A buildings downtown, according to a JLL report, new construction would

have to command at least $30 per square foot, if not even more. Some of the large vacant office buildings are the former Detroit Free Press headquarters building at 321 W. Lafayette Blvd., which is 302,000 square feet and which sources have said Gilbert is buying; and the 250,000-square-foot Old Wayne County Building, which was purchased from the county two years ago by New York investors for $13.4 million. Other vacant office buildings, such as the Philip Neudeck Building and the Gabriel Richard Building on Michigan Avenue, are currently vacant but are slated for multifamily construction by developer Joe Barbat. But those without a planned use in the works are tricky because of their layouts and the amount of work needed to make them usable. Generally, they are seen as buildings for single users, not multiple tenants, and tenants of 250,000 square feet and 300,000 square feet are not easy to come by. “It’s not like we are turning away six-figure users on a regular basis,” said Weiner. According to a report from NGKF, a national real estate company that has offices in Southfield and Farmington Hills, the two largest contiguous blocks of space downtown are

both in the Renaissance Center: one of 300,000 to 500,000 square feet, and another of 60,000 to 69,999 square feet. The rest are 30,000 square feet or smaller. Steve Morris, principal of Farmington Hills-based tenant representation firm Axis Advisors LLC, also said there is 427,000 square feet in the Penobscot Building, and about 100,000 square feet in the Buhl Building, but none of the floors are contiguous. Don’t forget the Cadillac Square office building, managed by Southfield-based Farbman Group, and the 211 W. Fort and the 150 W. Jefferson buildings, as well, Farrell said. The central business district is the region’s second-largest office market, behind Southfield, which has 17.22 million square feet. Troy is the third-largest, with 13.26 million square feet, according to NGKF. Downtown Detroit’s third-quarter vacancy rate was 14.2 percent, compared to Southfield’s 21.9 percent and Troy’s 21.3 percent, according to NGKF. Five years ago, the downtown market was 31 percent vacant, according to NGKF, while Southfield was 31.5 percent vacant and Troy was 31.7 percent vacant.

$6,000 from a “Company B” in March of this year, in two of its eight felony charges. The other six charges all reference either the company believed to be Rizzo or payments from an undercover FBI agent. Rizzo also maintained a political action committee, Rizzo Environmental Services PAC, funded largely with donations from Chuck Rizzo Jr., that gave to campaign committees across the region. In the past year, they’ve included $15,000 for Wayne County Sheriff Benny Napoleon, $12,000 to Candice Miller, more than $4,000 for Macomb County Executive Mark Hackel, at least $2,500 each to Marrocco and Wayne County Executive Warren Evans, and at least $1,000 for Freitas. Hackel said he already refunded the money his candidate committee received from the Rizzo PAC about two weeks ago, after learning of its role in the FBI case. “There’s a big difference between a campaign donation and a bribe. And what is being alleged in the Justice Department case involves personal bribes,” Hackel said last week. “And giving a donation back isn’t an indication that you did something wrong, it’s an indication of how you want to manage your own affairs and handle any potential association.” Hackel also said the strong voter rejection of Marrocco, Reynolds and several incumbent Democratic officeholders in his county was likely an expression of voter frustration. He did not think the probe into Rizzo was a major election factor. “Trump did very well here, but Bernie Sanders also did extremely well. ... People are reacting to the ways of traditional politics. There’s just fatigue.”

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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 // N O V E M B E R 1 4 , 2 0 1 6

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A handful of Chinese firms in the past year have announced plans to expand Michigan facilities or build new offices here, which together are expected to create hundreds of jobs. Trump consistently targeted China on the campaign trail as an example of what he said are broken economic policies that led companies to move jobs overseas. Charles Ballard, an economist at Michigan State University, told Crain’s that early volatility in the stock market following Trump’s election was Wall Street reacting to Trump’s protectionist trade platform that would impact bottom lines of the state’s largest industry — cars. “If Mr. Trump follows through with what he has advocated, we will see some of the highest tariffs in U.S. history levied against imports from China and Mexico,” Ballard said. “That would cause a lot of disruption in the supply chain, because a lot of goods imported from Mexico involve parts that were made in the U.S.” Snyder, who said there are trade-related issues that need to be resolved with China, also thinks establishing relationships with government and corporate leaders in the country could be productive toward a solution. “I don’t think it’s time to prejudge things. Let’s just give him a chance to establish his administration,” said Snyder, who declined to disclose which candidate he voted for president. “In the meantime, we have an opportunity to promote Michigan.” As for the governor’s future work with China, Snyder said: “I don’t see any reason at this point why that should change at all.” Trump’s platform on trade — scrapping or renegotiating the North American Free Trade Agreement and imposing a 35 percent tariff on cars imported from Mexico — has Wall Street skittish on autos. For instance, Southfield-based Lear Corp. lost nearly $500 million in market value in Wednesday trading. Troy-based Delphi Automotive plc’s market cap declined by more than $1.2 billion. That’s despite an increase in nearly 300 points in the Dow Jones industrial average. Trump’s presidency is a mixed bag for diverse manufacturers, said Joseph Anderson Jr., chairman and CEO of Wixom-based supplier TAG Holdings LLC. TAG’s largest customer is heavy equipment manufacturer Caterpillar Inc., so Trump’s call to boost infrastructure spending could mean significant sales increases for TAG. But Trump’s call to unravel free trade deals and punish manufacturers importing from Mexico would damage TAG’s auto business, Anderson said. “I’m nervous. We all heard what he said on the campaign trail,” Anderson said. “We should not be disassociating ourselves from the global economy, and if he accomplishes some of the things he said — well,

that’d be very troubling.” Anderson, a former chairman on the International Trade Administration’s manufacturing council, said President-elect Trump should instead focus on tax reform to incentivize businesses to bring back manufacturing to the U.S. For example, Anderson said altering the tax code to stop taxation on global profits for U.S. companies. “I don’t know what his real plans are,” he said. “We definitely need to hear more.”

Health care Trump, bolstered by a Republican majority in Congress, has proposed repealing President Obama’s signature health care law, the Patient Protection and Affordable Care Act. That could radically alter the business models many Michigan companies have developed the past five years. The law has covered an additional 22 million people with medical insurance, funded thousands of health clinics for the poor, provided subsidies for private health insurance to millions of lower-income people and created Medicare pilot programs to improve quality and lower costs. Critics of Obamacare in Michigan have pointed to 17 percent average premium hikes in the individual health insurance market for 2017. However, the number of people affected are only about 3 percent of the state’s insured population, and 85 percent of those receive federal subsidies to lower their premiums. Trump has promised to turn federal Medicaid funding over to the states in the form of block grants to give more local control over health funding. This means states will decide who gets Medicaid and how many, what services they receive and, ultimately, how much government will pay for it. But that also most likely means doing away with additional funding that helped expand Medicaid, which has extended coverage to an additional 630,000 Michiganians. Rick Murdock, executive director for the Michigan Association of Health Plans, said if Congress uses the budget reconciliation process, it would need only 51 percent approval from senators to defund federal Medicaid expansion. “With that, the loss of coverage for 600,000 folks,” said Murdock. “We have a risk of losing the federal subsidy (advanced tax credit) for the individual market on the exchange and the potential of those folks losing coverage.” Cutting Medicaid also poses risks to the 14 Medicaid HMOs in Michigan such as Meridian Health Plan in Detroit and Priority Health Plan in Grand Rapids — major businesses employing thousands of people. Companies that hired dozens of people to account for additional Medicaid beneficiaries will seek to downsize if profits go down. Trump has been somewhat vague on his overall plan. But he has said he wants to expand the use

of private health savings accounts, which allow individuals and families to set aside money tax-free to pay for insurance premiums and drug costs. Efforts to repeal or replace Obama’s health care law will be more challenging than the simplistic rhetoric used during the campaign, said Tom Shields, a Republican consultant and president of Lansing-based public affairs communications firm Marketing Resource Group. Any attempt will have to run the program more efficiently and cost-effectively without yanking millions of Americans’ medical coverage, Shields said.

Other policies Trump has taken a pro-coal energy stance, which makes it difficult to know how he will come down on Obama’s energy policies — including whether he will roll back ongoing federal efforts to reduce carbon emissions. During an address to the Detroit Economic Club at Cobo Center in August, he vowed to end the “Obama-Clinton war on coal” and reinvest in coal mines. Michigan lawmakers are debating new energy legislation that would require utilities to consider renewable energy among a number of power sources as they plan for future electric generation. Meanwhile, utilities in the state — including Detroit-based DTE Energy Co. and Jackson-based Consumers Energy Co. — are decommissioning coal-fired plants as they age. They would consider natural gas, not coal, as replacements. Automakers are also pushing for a relaxing of fuel-efficiency targets the Obama administration ruled the industry would need to meet by 2025. And Michigan will continue to pursue federal funding and a designation for the planned American Center for Mobility driverless car testing site at Willow Run, said Kelly Chesney, a spokeswoman for Business Leaders for Michigan, the state’s business roundtable. The mobility center has lined up about $20 million in state funding, but has yet to receive about $60 million in federal aid it needs to operate. “That’s one of our highest priorities,” Chesney said. “The need still exists, regardless of who is our president, and this industry is still moving forward. And it affects the entire nation.” Crain’s Detroit Business reporters Dustin Walsh and Jay Greene contributed to this report. Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

BANKRUPTCIES The following business filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Detroit Nov. 4-10. Chapter 11 involves reorganization. Edge Financial Group Inc., 28101 Ecorse Road, Romulus, voluntary Chapter 11. Assets and liabilities not available.

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

RTA

miliarity with what the tax would pay for. The city’s streetcar service ended in the mid-1950s, and regional streetcars and trains ended before that in favor of buses — many made by General Motors and Ford. A Detroit-Pontiac commuter rail service ended in 1983. Another contrast is the makeup of the regions: Seattle, with a metro population only slightly smaller than Southeast Michigan’s, is expected to gain a million residents in coming decades while metro Detroit has remained flat for half a century. Greater Los Angeles has nearly 20 million people and continues to grow. Michael Ford, CEO of the Regional

FROM PAGE 1

transit improvements over 40 years, including new bus rapid transit, bus, subway, and train lines. It also will pay for rail tunnels and highway and bike path improvements. The Los Angeles County Metropolitan Transportation Authority, created in 1993 as a successor to past agencies, is a system of commuter and light rail lines, subway, bus rapid transit, and 170 traditional bus lines. The system, which began modern light rail service in 1990, moves about 1.2 million people a day in a region infamous for its traffic snarls. Part of the difference? History and a gradual approach. Los Angeles, synonymous with traffic-packed expressways, saw failed regional transit tax efforts in the 1960s and ’70s before the first one passed in 1980. Seattle first passed a transit tax in 1996 and again in 1998 to create an initial system, so voters were familiar with the benefits, said James Canning, a former spokesman for the metro Detroit RTA and M-1 Rail who now is a communications director for the group supporting Seattle’s mass transit effort. “There’s been some experience using it. People here see mass transit as a solution to a problem, growth and gridlock,” he said. Detroit has only its bus systems, so many voters lack the physical fa-

Transit Authority of Southeast Michigan that sought the 20-year, $3 bil-

lion property tax for new or improved bus and train service, said Friday that his organization will examine the successful transit ballot initiatives from elsewhere while identifying the places where the local tax question was rejected. “We need to best determine lessons learned and any other vital information that can help propel us forward, so that we are successful in our next attempt to bring about needed regional transit in Southeast Michigan,” he said. The RTA staff will meet over the next several weeks to analyze the results before discussing next steps with the transit authority’s executive board, Ford said. Those talks will include discussion of not only the elec-

tion results and the master plan, but if the RTA is even the best mechanism. The RTA law allows it to seek a tax only every two years. The 2012 creation of the RTA occurred only after 40 years of repeated failures to coordinate mass transit in a splintered region roiled by racial and economic issues. The region shares that with other cities: the record of voter rejection before something gets funded and built. Despite the historic baggage, the RTA’s tax failed by fewer than 20,000 votes out of 1.7 million cast in Oakland, Wayne, Macomb and Washtenaw counties. It needed only a simply majority to pass, but a large margin of defeat in Macomb County was too great to overcome with “yes” votes elsewhere. It passed in Wayne and Washtenaw counties, but lost by 1,100 votes in Oakland County. The Macomb County results revealed the political divisions within the RTA effort that must be resolved before a new transit tax strategy effort takes shape. Macomb County Executive Mark Hackel said the pro-RTA “yes” vote campaign, called Citizens for Connecting Our Communities and orchestrated by Lansing-based political public relations firm Truscott Rossman LLC, failed to reach out to elected officials or to conduct much of a grassroots effort in his county. The RTA plan itself was flawed and didn’t lend itself to Macomb County’s interests, Hackel said.

“The reason it failed by such a larger margin (is) because of dissatisfaction,” he said. Hackel didn’t campaign for the tax, but said he didn’t campaign against it. Hackel added that he supports the general concept of regional transit, and backs the RTA governance structure after early objections, but declined to say what specific pieces of the transit plan itself he found objectionable. Kelly Rossman-McKinney, CEO at Truscott Rossman and one of the authors of the “yes” vote campaign, cast blame for the Macomb County result on Hackel. “From my perspective, his action (or inaction) set the tone in Macomb County,” she said via email. She said the campaign examined successful transit tax efforts elsewhere, including those that were approved on Tuesday in Los Angeles and Seattle. “All of our efforts were driven by research,” she said. The Citizens for Connecting Our Communities effort formally launched Sept. 6, and the strategy included rallies, events, TV and radio spots, print ads, social media elements and other tactics to get media and voter attention. Those are standard elements of transit tax campaigns. Some outside observers say the campaign wasn’t the problem, but the plan itself was overly optimistic and tried to be too much for too many.

“If our region’s voters had been presented with an incremental and thoughtful plan that focused on meeting the requirements of those people who truly need help getting around on a daily basis, it likely would have been successful,” said John Mozena, vice president for marketing and communications at the Mackinac Center for Public Policy, a free-market think tank in Midland. Instead, metro Detroit would be better served by improvements to its existing transportation providers rather than creating new systems, he said. Canning, the former RTA spokesman now working for transit in Seattle, also noted that the three metro Seattle counties that benefit from the transit system have a taxing district for it so that residents far from the buses and trains don’t have to pay for them — something that metro Detroit could consider. He also said the major employers in metro Seattle, including The Boeing Co., Microsoft Inc. and Amazon. com, backed the tax. Many of this region’s business groups, hospitals, philanthropic groups and foundations, universities, financial institutions and companies, including DTE Energy, Quicken Loans and Rock Ventures LLC, Detroit Athletic Club, Penske Corp., Rush Group and Ford Motor Co., signaled support of the RTA plan.

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Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // N O V E M B E R 1 4 , 2 0 1 6

RETAIL FROM PAGE 3

Despite that, Montreal-based activewear brand LolĂŤ opened in Royal Oak in August. And the vacancy rate is low, 2 percent, for the downtown, said Todd Fenton, economic development manager for Royal Oak, whose downtown is bounded by 11 Mile Road to the north, Lincoln Avenue to the south, Lafayette Avenue to the west, and Troy Street to the east. The range of property uses is at the crux of the issue. â&#x20AC;&#x153;The city is trying to strike a balance ... successful cities have a good balance between ... retail, restaurants and office (use),â&#x20AC;? Ciura said. Commercials promoting Royal Oakâ&#x20AC;&#x2122;s downtown are set to begin running on WDIV-Channel 4 on Nov. 25 and run through Jan. 3. Produced by WDIV, theyâ&#x20AC;&#x2122;ll focus on the categories of retailers operating there, including health and beauty; toys and gifts; footwear, apparel and jewelry; bakery and candy; and vintage and collectibles. WDIVâ&#x20AC;&#x2122;s ClickOnDetroit.com will also promote Royal Oakâ&#x20AC;&#x2122;s downtown retail during the holidays and in a Nov. 18 segment of â&#x20AC;&#x153;Live in the D,â&#x20AC;? hosted by Chuck Gaidica, Ciura said. One of three billboards advertising the campaign is already up at 14 Mile Road and Coolidge Highway. Two others will go up in the mixing bowl area of I-96 in Novi and on I-75 in Auburn Hills.

Print ads will also run in the Royal Oak Review, Woodward Talk and Birmingham Eagle for the length of the campaign. The 35 retailers participating in the campaign will share the commercials through their social media channels and cross-promote one another with posters in their windows and brochures listing their peers downtown. In addition to promoting the retailers themselves, the campaign will announce standard operating hours the stores will keep during the holidays and broadcast the cityâ&#x20AC;&#x2122;s free parking on Sundays and free meals offered for children by most restaurants on Sundays. The DDA is chipping in $55,000 for the campaign, and retailers an additional $15,000, Ciura said. That breaks down to $250 for retailers who agree to the standard operating hours, or $500 for those who donâ&#x20AC;&#x2122;t. A few, like Write Impressions, are opting to contribute the larger amount, â&#x20AC;&#x153;which is really nothing to launch this sort of campaign,â&#x20AC;? said owner Lori London, who is a member of the DDA. â&#x20AC;&#x153;To me it was just a small fee to pay for great exposure.â&#x20AC;? Thereâ&#x20AC;&#x2122;s excitement among all of the shops in the city about launching a campaign to highlight the unique retail in the downtown, Gary Baglio, president of the Royal Oak Association of Retailers and owner of Five15 Media, Mojo, and More, said in an

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emailed statement. â&#x20AC;&#x153;On one hand, we are starting to feel retail competition from the city of Detroit, and on the other hand we have the bored mall shopper. We believe that educating our consumer on the stores we have to offer will be extremely beneficial,â&#x20AC;? he said. The Birmingham Shopping District will spend about the same amount this year on television, cable and print advertising during the holidays as it did last year, said Executive Director John Heiney. The affluent city is definitely doing more online, however, through its website and social media. â&#x20AC;&#x153;We are seeing increased interest in downtown Detroit from local operators,â&#x20AC;? he said, including Art Loft, which opened its second store in Detroitâ&#x20AC;&#x2122;s Midtown about a year ago. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s definitely worth keeping an eye on (that), but right now we havenâ&#x20AC;&#x2122;t felt a need to change anything because we feel like we have the unique proposition right here,â&#x20AC;? he said. People living around Birmingham are some of the richest in the country. â&#x20AC;&#x153;That will always be greatly attractive to retailers, whether local or national,â&#x20AC;? Heiney said. However, â&#x20AC;&#x153;we feel that every downtown â&#x20AC;Ś present(s) a unique proposition.â&#x20AC;? Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

Gordie Howe bridge authority calls for bids By Lindsay VanHulle

Crainâ&#x20AC;&#x2122;s Detroit Business/Bridge Magazine

The authority leading an effort to build the Gordie Howe International Bridge said Thursday it asked three finalists to submit bids to design, construct, finance and operate the new Detroit-Windsor span. The Windsor-Detroit Bridge Authority said the formal request for proposals will take 18 months and is the second part in a process to choose a company to join the public-private partnership. The request â&#x20AC;&#x153;is perhaps the single most important document that (the authority) will deliver,â&#x20AC;? Michael Cautillo, the authorityâ&#x20AC;&#x2122;s president and CEO, said in a statement. â&#x20AC;&#x153;Much progress has already been accomplished on both sides of the border, and we continue to work to prepare the sites for this historic infrastructure project in advance of the construction.â&#x20AC;? The estimated $2.1 billion, sixlane bridge would connect Detroit and Windsor, Ontario, from I-75 to Highway 401 between Detroitâ&#x20AC;&#x2122;s Delray neighborhood and Windsorâ&#x20AC;&#x2122;s Brighton Beach area. In addition to the bridge itself, the project will add highway connections, update border crossings on the U.S. and Canadian sides and have room to accommodate increased traffic in the future. Three private-sector entities were

prequalified to compete for the contract. They include Bridging North America, CanAm Gateway Partners and Legacy Link Partners, all of which consist of multiple companies. The project is estimated to open in 2020. As of July, the authority had not yet acquired all of the needed property for the bridge. The private-sector company will recover some of its expenses through a long-term concession deal that will allow it to capture bridge toll revenue. That revenue will transfer back to the bridge authority, a Canadian nonprofit crown corporation that is handling all construction and operations details, once the companyâ&#x20AC;&#x2122;s costs are recovered. â&#x20AC;&#x153;The Gordie Howe International Bridge will open doors to global markets and enhance the essential trade relationships between Canada, Michigan and the United States,â&#x20AC;? Gov. Rick Snyder said in a statement. â&#x20AC;&#x153;Progress on this critical infrastructure is accelerating and that progress will continue. The issuance of the RFP, which is the result of thousands of hours of work and consultation by Canada, Michigan and many other project stakeholders, is an all-important milestone that we have achieved together.â&#x20AC;? Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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

WSU FROM PAGE 3

reformed there have been,” Parrish said. “I don’t agree with all the consequences with the faculty. They have not paid much attention to the niceties when it comes to the tenure process.” Wayne State has improved its curriculum and other requirements to come into compliance with national accreditation standards and straightened out minority student recruitment, Parrish said. It also has made a number of technological and program improvements, including moving to an online application process for its students. At the end of fiscal 2016, Sept. 30, Wayne State had cut its losses by $12 million to $17 million, officials said. Over the next three years, further cost reductions and revenue gains are expected to cut further losses to $11.6 million in 2017, down to a negative $5.5 million in 2018 with break-even projected for fiscal 2019. Since 2013, the medical school and UPG has lost $57.5 million, which has been covered by the university. “We are eliminating positions, combining (jobs), reducing faculty, cutting fringe benefits and memberships (such as the Detroit Athletic Club) and restructuring administration” of the medical school and UPG, said Rob Kohrman, the medical school's vice dean for fiscal affairs. By the end of the year, the medical school will have about 45 fewer employees and staff members, a decrease accomplished by a small number of layoffs at UPG, attrition and not filling vacant positions, Kohrman said. As of 2015, total employees at the medical school and UPG were 3,285, including 985 at UPG and 2,300 at the medical school. But the most difficult part of Wayne State’s turnaround has been the evaluation process Sobel and staff have undertaken to assess the relative value of about 827 medical school faculty, clinicians and researchers. “After an extensive investigation,

we identified up to 65 unproductive or underproductive faculty” who weren’t contributing enough financially to Wayne State, Sobel said. That number of targeted faculty has gone up and down over the past year, from a high of about 85, down to 42 over the summer, but after further review now stands at about 65. “It is difficult to do (drop faculty), and I have mixed feelings about it,” especially for younger faculty members who have families, he said. But Sobel said many other medical schools are facing similar problems, and tough decisions need to be made to erase Wayne State’s deficit that earlier this year amounted to a monthly burn rate of $1.5 million. “No one is guaranteed continued funding their whole life,” he said. “We allowed the ball to be dropped too low.” Underproductive research faculty are illustrated by this fact provided by Wayne State: Though the national average for tenured faculty with grants is about 40 percent, Wayne State’s average recently hovered at about 14 percent. Parrish said the main problem with Wayne State's approach is that it has failed for years to set clear expectations for faculty productivity. “You can’t tell a faculty member they are doing fine one year and the next year, because you are losing money, tell them you’re not contributing and are fired,” he said. During the next three years, up to 40 faculty members — all basic scientists — have agreed to retire or will take buyouts, Sobel said. About 18 faculty members have so far agreed to retire during the next 12 months. An additional 10 to 13 faculty members will go through a detenuring hearing process that could sever them from employment, he said. Sources said medical school officials wanted to fire more faculty, but that the union pushed for hearings. Other faculty will be asked to increase grant production. “We sent out letters to about 13 or 14, asking them to improve (the number) of applications for research

INDEX TO COMPANIES

These companies have significant mention in this week’s Crain’s Detroit Business: A123 Systems ....................................................... 17

Grand Rapids Whitewater ................................... 9

Adient ...................................................................... 1

Grand Valley Metropolitan Council ....................11

American Axle & Manufacturing Holdings ......18

Guardian Industries ........................................... 22

Bosch Automotive Service Solutions LLC ....... 17

Harmony Brewing ................................................ 12

Cedar Springs Brewing ....................................... 12

Haworth .................................................................11

Comm. Foundation of Holland/Zeeland Area .11

Henry Ford Health System .................................18

Cooper-Standard Automotive ......................... 22

Ilumisys ................................................................. 17

Delphinus Medical Technologies .......................19

Immunolight LLC ........................................... 16, 17

Denso International America ............................ 21

Imra America ........................................................19

Domino’s Pizza ..................................................... 15

Innovative Surgical Solutions ........................... 17

Dow Chemical ...................................................... 15

Louis Gelder & Sons............................................. 13

Downtown Grand Rapids .................................... 9

Macatawa Area Coordinating Council ..............11

Energy International ........................................... 15

Magna Electronics ............................................... 17

Experience Grand Rapids ................................... 12

NeuroNexus Technologies ................................. 17

FCA US LLC ...........................................................18

Plastipak Packaging ............................................ 17

Federal-Mogul Ignition ...................................... 23

Regional Transit Authority of SE Michigan ......27

Ford Motor ...................................................... 15, 19

Rizzo Environmental Services .............................3

Founders Brewing ................................................. 9

Royal Oak Downtown Development Authority ..3

Franzese USA ........................................................ 4

University of Michigan ....................................... 22

General Motors ................................................... 23

University Physician Group ..................................3

Gentherm .............................................................20

Visteon Global Technologies ............................ 22

GFL Environmental USA .................................... 25

Wayne State University ........................................3

Ghafari Associates LLC ...................................... 15

Windsor-Detroit Bridge Authority ................... 28

GKN Driveline North America ........................... 23

Zephyros ..............................................................20

Global IP Holdings LLC .......................................20

Ziebart International .......................................... 15

grants,” Sobel said. On a bright note, Sobel said, Wayne State’s biomedical research grant approvals have increased by $11 million to $12 million over 2015’s total of $117.7 million. “We are at the highest level in a decade,” he said, adding: “We have very talented individuals,” many of whom have redoubled their efforts to increase research funding. In 2010, the Wayne State medical school garnered $90.8 million in National Institutes of Health funding and $117.8 million in total funding, a 10 percent increase from 2009, officials said at the time. Overall, Wayne State’s universitywide awards hit $188 million in 2015. Last year, Wayne State also opened a 200,000-square-foot medical research facility, the Integrative Biosciences Center, at 6135 Woodward Ave. IBio, which is expected to help generate additional grants, revenue and economic impact for the university, has been dedicated to studying and eliminating Detroit’s health disparities. “We are going to announce some very exciting research initiatives in the next few weeks,” said Sobel, adding that they will be in the translational research area that will involve the entire WSU research community, not just biomedical. Another improvement for the medical school, effective Oct. 1 for fiscal 2017 if approved by the university’s board of governors, is increasing the dean’s tax to 5 percent from 2.9 percent. The dean’s tax, accumulated from the medical school’s 19 clinical departments based on professional fees collected, will be used to cover the office’s administrative costs, salaries, recruiting, new projects and initiatives. Previously, the departments paid the dean’s office 8.7 percent — which generated about $10 million to $14 million in revenue — to support a variety of services. One-third went to the dean’s office and two-thirds went into the Funds for Research and Medical Education (FRME), which essentially was a pass-through that went back to the departments for salaries, benefits, research and development costs. Sobel said FRME will essentially be eliminated, allowing the departments to better manage their expenses. He said the increase was supported by the departments because they believe it will improve efficiencies and eventually allow the school to grow through recruiting and internal staff development. “We hope the austerity (hiring freeze on new faculty) ends September 2017,” said Sobel, noting that he believes Wayne State will begin to recruit additional physicians and researchers using the dean’s tax revenue. “The average recruitment package is about $630,000,” which covers the first three years for a new clinician or researcher, Sobel said.

DMC negotiations Wayne State officials continue to decline to comment on the recent 18-month contract agreement with Detroit Medical Center. Sources say the short-term contract essentially is

revenue neutral, and could be a little less depending on production, but in any case it will not help add revenue to the medical school’s coffers. In 2015, Wayne State received about $51 million from DMC for teaching and clinical services functions, down from $68 million in 2009 and $87 million in the late 1990s. Last year, Wayne State officials said declining payments from DMC were a contributing factor to the school’s losses, although they acknowledged poor management and faculty underproduction was the primary reason for the deficit that had grown to $29 million. David Hefner, vice president for health affairs of Wayne State, also said efforts to bring in three independent clinical departments into UPG have been put on hold while the medical school restructures operations. The departments are pediatrics, emergency medicine and radiology. While Sobel declined to comment on the pediatrics department, sources told Crain’s that pediatrics is reeling from the forced departure in August of Steven Lipshultz, M.D., as chairman of the department. Tej Mattoo, M.D., has been named acting chairman. Wayne officials said the change in leadership was necessary and critical to the department's future. But in a recent meeting, the board of University Pediatricians reaffirmed Lipshultz as president of the independent medical group practice affiliated with DMC Children's Hospital of Michigan. Lipshultz also will continue as pediatrician-in-chief at Children’s. “We don’t need the (three) departments (to join UPG) to do what we need to do,” Hefner said. “There are other ways to accomplish our goals.” One way, said Hefner, is for Wayne State to form a clinically integrated network organization with UPG, the three independent departments and possibly other hospital partners. “We are working on it,” Hefner said. “We would be on the specialty side since we don’t own hospitals.” A clinically integrated network is a connected set of hospitals, physicians and other provider organizations that are formed to contract with payers or employers. Network providers adopt common clinical practices, share electronic information to enhance care and streamline administrative processes. At least four other clinically integrated networks exist in Michigan. They are Together Health Network, a partnership between Livonia-based Trinity Health and Warren-based Ascension Health Michigan; Beaumont Care Partners, which includes the eight hospitals of Southfield-based Beaumont Health and the 2,500 physicians part of United Physicians and Beaumont; and a network operated by DMC. The largest CIN is Affirmant Health Partners, with 33 hospitals and more than 6,000 physicians. Participants include Detroit-based Henry Ford Health System and Sparrow Health System in Lansing. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

www.crainsdetroit.com 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 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 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.

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

THE WEEK ON THE WEB NOVEMBER 5-11 Agency: DMC passed surprise inspection on infection control

etroit Medical Center

received confirmation that it is in full compliance with infection control regulations from the Centers for Medicare and Medicaid Services. A surprise inspection by the Michigan Department of Licensing and Regulatory Affairs, which was approved by CMS, cleared DMC from possible expulsion from the Medicare program, which could have cost the hospital system hundreds of millions in federal and state funds.

COMPANY NEWS

J Matick Toyota in Clinton Township purchased the Macomb Township dealership property currently occupied by Causley Mazda Hyundai for $4 million. Under terms of the sale, Matick could move into the 28,000-square-foot dealership as soon as Dec. 1 but will be in the new location no later than mid-January. The Hyundai and Mazda franchises were not a part of the deal and Causley will no longer operate those franchises. J New Jersey-based Oerlikon Metco (US) Inc. plans to invest $49.7 million to lease a new plant in Plymouth Township. The yet-to-be-built 70,000-square-foot plant, which will make alloy powders for 3-D printing and additive manufacturing, is expected to open next year. Oerlikon, which operates a small production plant in Troy, is a subsidiary of Switzerland-based OC Oerlikon. J Allen Park-based Belle Tire Distributors has five new dealerships in the works in Michigan and Indiana as part of a larger plan to expand its dealership network. In Michigan, the tire retailer is constructing a location in the Northridge Grove Shopping Center in Northville that’s expected to open in August. J Plastipak Packaging Inc., a subsidi-

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

30 The number of branches Auburn

Hills-based Genisys Credit Union could grow to in just over a year under an expansion plan to invest at least $5 million. The company has bought land in Clinton Township, plans to add a third branch in Macomb County, relocate a branch from Ortonville to Brandon Township, and finalize a new location elsewhere in Oakland County.

$429,900 The expected minimum sale price

for the two-bedroom, twobathroom units in the 12-unit The Selden condominium project in Midtown. The $4.5 million project, being developed by Detroit-based Ferlito Group LLC, is expected to open this summer.

$11 million The amount the Detroit Water and Sewerage Department expects to spend in paying the claims of about 800 residents who aren’t suing the city in connection with damage done after two severe storms flooded basements on the city’s east side in July.

ary of Plymouth-based plastic containers maker Plastipak Holdings Inc., acquired the business assets of Evolve Polymers Ltd., a plastic recycler in England. Terms were not disclosed. The acquisition adds about 125 employees to the 6,000plus Plastipak Packaging has worldwide. J Corporate turnaround guru Jay Alix led a group of investors in buying out a majority stake in AlixPartners LLP, the turnaround consulting firm he founded in Southfield in 1981. Alix teamed with two Canadian pension fund managers, Caisse de dépôt et placement du

CANINE TO FIVE DETROIT

Canine to Five Detroit, a dog day care and boarding facility in Midtown, plans to invest $1.6 million and create 10 new jobs through an expansion that would update its existing facility (pictured) at 3443 Cass Ave. and add a new building on property next door. Groundbreaking on the new 10,000-square-foot building is to take place in the spring; the current 6,000-square-foot facility will remain open during construction.

Québec and Public Sector Pension Investment Board, as well as Investcorp Group, to buy out the stake held by private equity firm CVC Capital Partners. Specific terms

were not disclosed.

Sock & Accessory Brands Global, a portfolio company of Detroit-based Huron Capital Partners LLC, acquired Conover, N.C.-based Twin City Knitting Co., a designer, manufacturer and wholesaler of performance athletic socks, predominantly serving the team sports market. Twin City will continue to operate out of its existing facilities in North Carolina. J Ann Arbor-based Amcor Rigid Plastics completed its acquisition of Hartsville, S.C.-based Sonoco Products Co. in a $280 million deal that allowed Sonoco to sell off its blow molding operations, Plastics News reported. The move includes seven manufacturing plants — six in the U.S. and one in Canada — that have sales of $210 million annually. J

OTHER NEWS

J After two years of work on the new $137 million M-1 Rail streetcar project and disruption on Woodward Avenue in Detroit, there is light at the end of the tunnel. Workers on Friday afternoon connected the final piece of track at the intersection of Woodward and Amsterdam Street. The 6.6-mile loop, dubbed the QLine, will run between Congress Street and Grand Boulevard and is expected to be in operation next year. J The public-private partnership working to create the American Center for Mobility driverless-car testbed has completed the purchase of land for the project at Willow Run. The nonprofit Willow Run Arsenal of Democracy Landholdings LP acquired the more than 311 acres in Ypsilanti Township for $1.2 million from RACER Trust Properties LLC, the entity created during General Motors Co.’s bankruptcy to handle abandoned properties. J The Great Lakes Water Authority submitted a proposal for Lyon Township to join its water system, for the authority’s first new municipal customer since its inception earlier this year. The authority, which began operations last January, was created out of the Detroit municipal bankruptcy negotiations. J A $3.5 million federal grant is supporting a new alliance of Midwest universities working to move academic innovations into the commercial realm, AP reported. The University of Michigan said its Engineering Center for Entrepreneurship will lead the Midwest I-Corps Node with money from the National Science Foundation’s Innovation Corps program. Other participating universities are Illinois, Purdue and Toledo. J Former Detroit City Council President Charles Pugh was sentenced to at least 5½ years in prison for having sex with a teenage boy, AP reported. Pugh worked at WJBK-TV at the time of the sex acts, in 2003 and 2004.

RUMBLINGS

Could Trump be looking at these business names?

Supreme Court Justices ith last week's Robert Young and Joan election of Donald Trump as Larsen, who are reportedpresident, what’s in store now for ly being considered for some of the key Michithe U.S. Supreme Court under a Trump adminisgan Republicans who tration. backed him financially A spokesman for the and politically? Trump campaign did not Several prominent respond before press time business names are being floated for possible feder- John Rakolta Jr.: for a request for comment. Ronald Weiser, who last al appointments in a Has not been Trump administration by offered a position. week was elected to the University of Michigan people close to the camBoard of Regents, said he was appaign. One of them, John Rakolta Jr., proached by someone representing said Friday in an email that he has Vice President-elect Mike Pence and not been offered a position or con- asked “what I wanted to do.” Weiser, who is former ambassatacted about one. “With that said, any American dor to Slovakia under Bush, said he would be honored to serve the declined any possible federal appresident of the United States if re- pointment because he is focused quested and had the skills, temper- on his new job as regent and does ament and experience to make a not want to move out of Michigan. Weiser, along with Kojaian, was difference,” said Rakolta, one of the five chairs of Trump’s Michigan fi- one of several national fundraising nance committee and CEO of De- co-chairmen for a joint fundraising troit-based contractor Walbridge committee that raised money for Aldinger Co. Trump and the Republican National Among the others whose names Committee. have arisen are the other chairman Oh, and speaking of Weiser ... of his Michigan finance commitA couple of people with tee: David Fischer, chairman and high-profile last names backed CEO of Troy-based The Suburban him very publicly in the race for a Collection; C. Michael Kojaian, own- regent position: Sarah Harbaugh er of Farmington Hills-based Ko- and Cathy Schembechler. Sarah jaian Management Corp. (who was Harbaugh is the wife of current UM unavailable for comment); John In- football coach Jim Harbaugh while hulsen, chairman of the Kent Coun- Schembechler is the widow of Bo ty Republican Party (who declined Schembechler, the legendary UM to comment); and Charlie Secchia, football skipper. partner of Grand Rapids-based deAnd now effectively, Weiser is veloper Sibsco LLC and son of Peter one of Jim Harbaugh's bosses now. Secchia, the former Ambassador to Does that cause any change in Italy under George W. Bush. his relationship with the coach? Scott Hagerstrom, who was state “Friends stay friends. I don't director in Michigan for the Trump think it changes,” Weiser said. campaign, could also get a call to “That's a long stretch. I was friends serve in the incoming president's with Sarah beforehand. I didn't go to administration. Jim. I went to Sarah, and she said Also throw in the mix Michigan yes.”

Sphinx program gains White House honor

The Sphinx Organization President and Artistic Director Afa Dworkin and a 12-year-old Detroit student of Sphinx will travel to the White House on Tuesday to receive the country’s highest honor for after-school arts and humanities programs from First Lady Michelle Obama. Sphinx Overture, which provides free violins and lessons to all public elementary schools in Flint and several in Detroit, is one of 12 programs nationwide to receive the 2016 National Arts and Humanities Youth Program Award.

More than 251 programs were nominated for the award, which recognizes and supports outstanding programs designed to spur creativity, expression and achievement outside of the regular school day. Joselyn Hernandez, who participated in the Sphinx Overture program for five years, will accept the award with Dworkin on behalf of Sphinx. Four young musicians who make up the Sphinx Perfect Fourth String Quartet and live in other parts of the country will join them in Washington, D.C., to perform during the awards ceremony.

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