Crain's Detroit Business, April 3, 2017 issue by Crain's Detroit Business

APRIL 3 - 9, 2017

What’s next for Silverdome, Palace and Summit Place

Water, water everywhere, but not from tap (usually)

Future finally begins to get clearer, Page 8

Bottled water in Michigan by the numbers, Page 3

Commentary

Gilbert the father, and Gilbert the son I f you want to truly understand Dan Gilbert, ask him about fatherhood. “I did not have a close relationship with my dad,” the titan of finance and Detroit real estate told me. “My dad was a World War II military guy, and then he owned a bar in Detroit.” Gilbert’s rat-a-tat cadence made it hard for me to keep up with his hot flurry of thoughts and images. Including this chilling story: “My dad is 12 years old, and his

RON FOURNIER Publisher and Editor

brother is 10. (He) was born and raised in Detroit, a very poor neighborhood. He is delivering newspa-

pers with his brother, and it’s a foggy day, and his 10-year-old brother gets run over, and it’s a priest who runs him over and kills him. It wasn’t the priest's fault, and the priest is doing last rites over the body …” Gilbert looked up from the table in his office at Quicken Loans, the mortgage company that launched his business empire and has driven a resurgence in downtown Detroit. He stared me in the eyes and continued. “The worst part of the story: His immigrant father from Russia. He

put his finger in his face and said, ‘You killed your brother. You should have watched your brother.’” Gilbert shook his head in sympathy for his long-deceased dad, who would have turned 100 years old this year. “You can imagine what my grandfather did to my father,” Gilbert said. “So you can understand how anybody who experiences that kind of trauma would have a hard time getting close to anybody, including his kids.” SEE GILBERT, PAGE 20

For Gilbert, his son’s condition was a reminder of life’s limits. “What does money really mean? All the money in the world can’t fix this thing he’s got.”

Sports Business

Who are Detroit’s highest-paid No. 2 athletes of 2017?

No. 1

Miguel Cabrera $28 million

Justin Verlander $28 million

Here’s a hint: Most start work today

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he Detroit Tigers, who open their season this week, also dominate the 2017 Crain’s list of highest-paid Detroit athletes, making up six of the top 10, another legacy of their late owner Mike Ilitch. See who’s ranked where on the list of those blessed both athletically and financially, starting on Page 12.

No. 3

Justin Upton $22.125 million

“W m m m w th go d n

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MICHIGAN BRIEFS Senate OKs bringing back job-creation tax breaks Michigan would provide tax incentives for business expansions under legislation approved by the Senate, The Associated Press reported. Michigan has moved away from such tax breaks under Gov. Rick Snyder’s watch in favor of a smaller pot of grants. But the Republican-led Senate voted 32-5 for the new incentives Wednesday because economic development officials say Michigan is losing business to states with generous incentives. The bills would authorize Michigan to let companies keep part or all of their employees’ income tax withholdings for five or 10 years. The businesses would have to create at least 500 jobs that pay the regional average wage. Companies also could qualify if they add at least 250 jobs that pay 125 percent of the regional average. Snyder supports the concept of the legislation, which goes to the House.

Speedier tax cut for car buyers OK’d by MI Senate Michigan senators have voted to more quickly phase in a tax break for

INSIDE

people who trade in their car for a new one. A 2013 law lets buyers subtract some of the value of their trade-in from the purchase price of a new vehicle for tax purposes. The change is being phased in until 2039. The Republican-controlled Senate unanimously approved legislation Wednesday to accelerate the phase-in of the tax cut 10 years sooner, by 2029.

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OPINION

OTHER VOICES

PEOPLE RON FOURNIER

18 1

RUMBLINGS

WEEK ON THE WEB

COMPANY INDEX: SEE PAGE 22

Judge approves plan to replace Flint water lines A federal judge approved a deal Tuesday to replace water lines at 18,000 homes in Flint to settle a lawsuit over lead-contaminated water in the troubled city, The Associated Press reported. Flint will be responsible for replacing lead and galvanized-steel lines that bring water into homes. The cost could be as high as $97 million with federal and state governments roughly splitting the bill. Pipes at more than 700 homes have been replaced so far. Marc Edwards, an expert at Virginia Tech who in 2015 warned about dangerous lead levels after Gov. Rick Snyder’s administration repeatedly dismissed the concerns, said the agreement is a good deal

CALENDAR

A federal judge approved a deal to replace water lines at 18,000 homes in Flint. for residents. Edwards told The Associated Press that with improved water quality, temporary use of filters and new pipes, “Flint residents really have nothing to worry about other than the lost trust and history of this disaster, which may take a generation to repair.”

Nominate your company as one of Michigan’s Cool Places to Work in Michigan returns for another year. This prestigious program recognizes employers that go the extra mile to make their employees feel appreciated – as judged, in part, by the employees themselves.

Fight over big-box store taxes back in Legislature Municipalities that are collecting substantially lower property taxes than they used to from bigbox stores must overcome opposition from business interests and

their allies in the Legislature to tilt the tax assessing system back in favor of local governments, The Associated Press reported. The retailers have been successfully reducing their tax bills in the Michigan Tax Tribunal since 2010, when the administrative court began agreeing that the real estate should be compared to “dark,” or vacant, structures for tax purposes. Bipartisan House legislation reintroduced last month would restore fairness to the property tax appeals system, according to supporters who contend that the problem has reached crisis proportions especially in smaller communities unable to afford legal fights.

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Regulations

Seven-day auto insurance plans may end by April 15 in Michigan

By Chad Livengood clivengood@crain.com

The future of seven-day auto insurance plans in Michigan is in limbo. The state insurance department has put the state’s largest carrier on notice that it may forbid the sale of one-week coverage starting April 15. The Department of Insurance and Financial Services notified Integon National Insurance Co. on March 15 that it was withdrawing the North Carolina-based carrier’s license to sell seven-day “Jump Start” auto insurance plans. Seven-day plans are

prolific in Detroit because of the city’s high cost of year-round insurance. The state’s notice said Integon’s ability to sell seven-day plans through L.A. Insurance stores in Michigan would end on April 15, according to the March 15 notice. “They’re trying to shut down the seven-day insurance plan,” L.A. Insurance CEO Anthony Yousif told Crain’s. Andrea Miller, a spokeswoman for the insurance department, said the matter is still under review. She de-

clined to elaborate. “The seven-day policy is the subject of an ongoing DIFS administrative review,” Miller said in an email. “Therefore, I am not at liberty to comment.” State insurance regulators said Integon’s seven-day coverage plan is “designed” to skirt state law requiring continuous no-fault auto insurance coverage on state-registered vehicles. Rhonda Fossitt, senior deputy director of the state insurance SEE AUTO, PAGE 19

Nonprofit

A new innovation center will be located in the Durfee Elementary-Middle School building, converting the expansive school into a community hub with a gymnasium and auditorium for public use, on-the-job-training for high school students, entrepreneur education and new business investment through a developing social investment fund.

Project targets Detroit neighborhood with connection to 1967 uprising By Sherri Welch swelch@crain.com

Fifty years after the 1967 uprising, the central Detroit neighborhood where it started is a world away from the busy central business district downtown. Vacant homes with peeling paint and broken windows mix with tidy ranch homes and more modern apartment buildings along residential streets. Abandoned storefronts and empty lots outnumber businesses along the commercial corridors, telling the story of companies that closed or left long ago.

But change could be on its way. New jobs, training, investment and other resources for entrepreneurs may be headed to the neighborhood as part of an effort by the nonprofit Life Remodeled to convert a school that closes in June into a community innovation center over the next two years. It’s part of a larger blight removal effort with major corporate backing and private investors targeting the neighborhood that is getting momentum from the anniversary of the uprising. Life Remodeled annually picks a Detroit neighborhood to help with

blight removal, home repairs and a signature renovation project that’s important to each community. This year it hopes to recruit 12,000 volunteers and hundreds of companies to remove blight from 300 city blocks in the neighborhood, board up 300 homes and complete critical home repairs for 50 homeowners for the central Detroit neighborhood, as it did for the Cody-Rouge, Osborn and Denby neighborhoods between 2014 and 2016. The six-day blight removal project is scheduled for July 31-Aug. 5. SEE PROJECT, PAGE 21

MUST READS OF THE WEEK Chappell to leave Economic Club Longtime leader plans to go into business with her son-in-law, Page 4

Of family, and launching pads Chad Livengood: Lessons from the past show how economic ladders last through generations, Page 6

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Chappell to leave Detroit Economic Club CEO’s post

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The Detroit Economic Club’s longtime president and CEO, Beth Chappell, plans to leave her position at the organization at year’s end. She’s departing after 15 years to become executive chairwoman of RediMinds Inc., a Southfield-based data strategy, data engineering and analytics firm she co-founded with her son-inlaw Madhu Reddiboina last year. Beth Chappell: PVS ChemiLeaving to work cals Inc. Chairwith son-in-law. man James B. Nicholson is leading an Economic Club board committee that’s conducting a local search for Chappell’s successor. In another leadership move, Bill Ford Jr., executive chairman of Ford Motor Co., plans to step down this summer after serving as chairman of the Detroit Economic Club for the past 12 years. DTE Energy Co. Chairman and CEO Gerard Anderson will succeed him as chairman. During her tenure, Chappell, 59, has increased not only the club’s memberships and sponsorships but also its community impact and prestige on the world stage, Ford said in a release. Membership has more than doubled to 3,800 current members, including 1,150 young leaders age 40 and under. Chappell launched the young leaders group six years ago to ensure the club’s viability going forward and last year launched an initiative that takes many of them into local classrooms to help teach students career-readiness skills. Under her direction, the club has also welcomed high school and college students to its meetings. Chappell launched a sponsorship program for the club shortly after joining to turn around the organization’s finances. Today, its budget has more than quadrupled to about $2.3 million, and the organization is building reserves to help it remain on stable ground in the future, Chappell said. It’s bittersweet to leave the Detroit Economic Club, she said, but she’s excited about the prospect of building a business with her son-inlaw. “It’s time for somebody else to come in and take the club to the next level...and it’s time for me to move on to a new challenge,” Chappell said. Founded in 1934, the Detroit Economic Club provides a nonpartisan platform for the discussion and debate of important business, government and social issues.

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OPINION

Look backward to see value of economic launching pads

he recent death of my grandpa reminded me that your starting place on the economic ladder is often boosted by those who climbed it first with opportunities not afforded to the previous generation. At a Detroit Regional Chamber breakfast last Thursday, the head of an organization that worked to desegregate North Carolina's economy shared his family’s story of upward economic mobility. David Dodson’s grandmother, Lillian, was the granddaughter of a mid-19th century African slave who made his way to freedom in Chatham, Ontario, through the Underground Railroad. Lillian was driven to create a better life for herself and graduated from Fisk University — a historically black college in Nashville — in 1910 and went to “the Silicon Valley of the early 20th Century” to become a teacher, Dodson said. She went to Detroit. Dodson’s grandfather, Norris, was the grandson of a free black man who grew up in Washington, D.C. After attending a rigorous boarding school, he made his way to Ann Arbor, where he earned a degree in chemistry at the University of Michigan. Lillian and Norris eventually met in Detroit, married and paved a new path to prosperity for their family amid a “rigorously and viciously segregated” society, Dodson said. Dodson, a former ethicist for the diesel engine manufacturer Cummins Inc., has master’s degrees from both Yale’s Divinity School and its School of Organization and Management. “I wouldn’t be here if it hadn’t been for Detroit,” said Dodson, who is president of MDC, a Durham, N.C.-based nonprofit dedicated to reducing poverty through expanded economic opportunity. Dodson told of his family’s economic mobility at the chamber’s “Detroit Drives Degrees” event at the Detroit Athletic Club to get the near-

CHAD LIVENGOOD “I love this idea of launching pad institutions. We used to have them. They used to proliferate. And we urgently need them again.” David Dodson

ly 200 people in attendance to turn to their neighbors and talk about their own stories.

Our own stories, our own ladders We all have a story of how we got to where we are now. Coincidentally, I had just told a version of my family’s story on the previous Thursday during the eulogy for my paternal grandfather that I delivered at his funeral at a church in Marshall, Mo., where I'm originally from. Born in March 1928, Bill Livengood grew up with a meager existence during the Great Depression in west-central Missouri. His father, Elmer “Pete” Livengood, worked on the railroad between Kansas City and St. Louis — and that seemed like his destiny. In July 1941, his father got two tickets to baseball’s All-Star game at Detroit’s Briggs Stadium (which later became Tiger Stadium). My grandpa detailed this trek to the corner of Michigan and Trumbull in a mini-memoir he wrote in 2009 about his life. “My first long rail trip,” he wrote.

Bill Livengood, pictured with his wife Betty Jeanne, graduated from Central Missouri University in 1951 with a business management degree. His college education was paid for by the G.I. Bill after his military service at the end of World War II. Bill Livengood’s college education was a springboard into a 27-year career at Westinghouse Electric Corp. A year ago, during our last in-person visit, I asked him about this nugget because of my own connection as a Detroit journalist. He told me about arriving on a train at Detroit’s once-grand Michigan Central Station and staying at a railroad YMCA boarding house near the ballpark (presumably in Corktown). That trip to Detroit came at a impressionable and pivotal time in my grandpa’s life. He was 14 years old.

He had never seen any part of the world outside of rural Missouri. And it occurred five months before the Japanese attacked Pearl Harbor, thrusting America into a world war. In the spring of 1946, the war was won, but the country still needed troops in the south Pacific. My grandfather had just turned 18 and was drafted into the Army for a short term of service through the end of that year.

He volunteered to stay in the Army for a full two-year term with one goal in mind: obtain the G.I. Bill and become the first person in his family to get a four-year college education. “In all likelihood I would never had gone to college otherwise,” Grandpa Livengood wrote in his memoir. “Dad had already lined me up for a job on the railroad! No Way!!!” Grandpa’s Army service and G.I. Bill-funded college education turned out to be an economic and social launching pad to mobility that seemed unfathomable before the war. He got a good job in purchasing at the Westinghouse Electric Corp. in Kansas City, which led to a series of promotions and moving to Pittsburgh and traveling the world for the company’s nuclear division. That created a comfortable middle-class life and spurred my dad, uncle and aunt to follow their father’s footsteps through college and careers. Grandpa’s eight grandchildren all went to college. After I shared this story with the chamber’s communications director, Tiffany Jones, Dodson asked people in the room at the DAC to share their stories of upward economic mobility. The concept of “launching pad institutions” being vital was frequently cited. Launching pads like the all-black college his grandmother attended and the G.I. Bill my grandpa earned for his service in the Philippines. Dodson challenged the educators and business people in attendance to focus on creating bigger and better launching pads in Detroit that go beyond the programs in place now to encourage more young people to get a post-secondary education. “I love this idea of launching pad institutions,” Dodson said. “We used to have them. They used to proliferate. And we urgently need them again.”

A remarkable lady: Gretchen Valade I have to admit, I don't know her very well. Her daughter-in-law is a fellow board member at the College for Creative Studies, but sadly, I have met Gretchen Valade only a couple of times. The first was at her jazz club in Grosse Pointe, the Dirty Dog. It has become a well-known jazz hangout for music aficionados. Her civic pride in sponsoring music — particularly jazz — is breathtaking.

KEITH CRAIN Editor-in-chief

Gretchen has been the primary sponsor and benefactor of the De-

troit Jazz Festival held over Labor Day weekend. We certainly need more folks who are willing to step up to the plate and not just to sponsor an event but get deeply involved in the program and execution. The lady knows her music. And she wants to make sure that Detroiters have a chance to enjoy jazz in its many forms. This is the 12th year for this itera-

tion of the Jazz Festival. It’s a free event, for hundreds of thousands of jazz fans who flock downtown during the festival. One of the exciting things about our city is the ability of so many events to find sponsors who nurture them. Many events simply could not happen without private-sector sponsor dollars, whether it’s the Thanksgiving Day parade or the hydroplane

races on the Detroit River. Sometimes it’s companies, sometimes it’s an individual like Gretchen Valade, a youthful 91, who get financially involved. This is a wonderful tradition that has been going on for decades. Gretchen Valade has been a generous sponsor for a long time. We should thank her and all folks who are like her. Consider our city very lucky.

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Include managed care in behavioral health integration tests MeridianHealth has been involved in the behavioral health integration initiative since Gov. Rick Snyder’s 2017 fiscal year budget recommendation was initially released in February 2016. Through the stakeholder group known as the 298 Workgroup, we quickly learned that managed care organizations would have a difficult time winning a seat at the table for the concepts that we believe would have profound impact on today’s disjointed behavioral health system. Why is it that the behavioral health organizations and advocacy groups are so vehemently opposed to allowing the Medicaid managed care organizations to submit our ideas and proposals with equal clout? Additionally, why is there so much focus on preventing our organizations from being part of the pilot process? I strongly feel that it’s because they believe that not only would managed care organizations succeed in managing the behavioral health benefit, but that we would be better at it. The intent of a pilot would be to demonstrate options that would provide a positive, significant impact on the behavioral health system by assessing models that improve health outcomes, access to service and financial savings. If behavioral health organizations truly believe they can do a better job than health plans, then they should welcome a pilot for the opportunity to prove it. However, if their only advancement through the 298 Workgroup is to make minor modifications to the antiquated system that exists today, ultimately it is Michiganders who are being disadvantaged. The behavioral health organizations’ arguments boil down to self-preservation, plain and simple. We have an opportunity to improve the lives of some of the most vulnerable populations in the state of Michigan, and we need to take advantage of it. Members with physical and behavioral health co-morbidities are among the most vulnerable of the populations we serve. With today’s divided physical and behavioral health systems, we are at an incredible disadvantage. It’s a struggle to effectively manage these members and make meaningful interventions that will improve access to care and services, increase adherence to medication and treatment, and promote overall improved health outcomes. We’re not talking about just a few members. More than half of Medicaid recipients with disabilities also have a mental illness, and individuals with mental illnesses live, on average, 25 years less than people without mental health concerns. These Medicaid beneficiaries with mental illness and chronic health conditions incur health care costs as much as 75 percent more than those without. Consider for a moment a person diagnosed with depression, heart disease, and diabetes. We know that chronic conditions like heart disease and diabetes require self-administered treatment. Not only does this require medication adherence, but it

OTHER VOICES Jon Cotton

Cotton is president of MeridianHealth Plan in Michigan. also requires the commitment to healthy lifestyle changes like an improved diet and routine exercise.

We know that depression can interfere with the desire to perform that self-administered care and can have a profound impact on the person’s willingness to reach out to friends, family members or physicians for help. When you consider the fact that the likelihood of noncompliance with medical treatment is three times higher for depressed patients than for nondepressed patients, there becomes a real need to promote meaningful intervention. And this example barely grazes the surface of the issues that transpire from having physical and mental co-morbidities treated through separate systems.

Excel

When looking at the future of behavioral and physical health integration, we do not see any substantial profit margins from assuming responsibility of the behavioral health benefit. Instead, with full integration, there is an overwhelming need to reinvest more dollars into the behavioral health system to treat this vulnerable population. By doing so, we see real savings in physical health costs when members with co-morbidities are able to treat their behavioral health conditions, which will promote their adherence to treating their physical health conditions and keep them out of the emergency room and urgent care.

WITH

By eliminating the superfluous layers that exist in today’s behavioral health system, the funds needed to support the increased access to adequate behavioral health services are easily attainable. Allowing managed care organizations to pilot a proposed model in support of behavioral health integration opens the opportunity for true patient-centered care and improved health outcomes. Barring managed care from this process limits our ability to bring meaningful change to the system that is not providing the comprehensive care we know is possible.

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SPECIAL REPORT: REAL ESTATE

Sites of potential The Palace of Auburn Hills

The Summit Place Mall site in Waterford Township. CRAINS DETROIT BUSINESS

The remains of the Silverdome in Pontiac.

CRAINS DETROIT BUSINESS

Fates of big Oakland County parcels to be decided soon By Kirk Pinho kpinho@crain.com

The fates of three prominent north Oakland County properties could be resolved in the next several months. Officials in Pontiac and Waterford Township have long tried to find solutions for the blighted Summit Place Mall and the Pontiac Silverdome properties. Meanwhile, the owner of The Palace of Auburn Hills is in the process of determining what to do with the arena once the Detroit Pistons pack their bags for Little Caesars Arena downtown later this year. Now, demolition of the Silverdome is scheduled to begin this summer, and new details have emerged about what a yet-to-be identified developer wants to do with the mall that straddles the Waterford/Pontiac border. Combined, those properties and the Palace make up more than 300 acres of property with either active redevelopment proposals or a high likelihood of redevelopment in the not-so-distant future. Time will tell what happens: There is a crucial April 10 meeting on the Summit Place fate, and last week's court agreement makes it all but certain the Silverdome will be demolished in the next several months. They are among the most promi-

PRIME DESIGN INC.

A “major sports and entertainment development” project is planned on the site of closed Summit Place Mall in Waterford Township.

Inside  Metro Detroit apartment market

has one of the lowest vacancy rates, Page 9

nent — and perplexing — sites in north Oakland County, with bounds of potential uses for whoever can make the redevelopments work. Another 100 acres of developable land across three sites are available at the Oakland Technology Park in Auburn Hills, though development questions have proved less vexing for these parcels.

Summit Place Mall Delivered a death by a thousand cuts over the last several years, the Summit Place Mall site at Telegraph and Elizabeth Lake roads sits empty and blighted. It has been the target of redevelopment proposals ranging from minor-league baseball stadiums to water parks to multifamily housing, none of which have materialized. Now the Waterford Township board expects to vote April 10 on whether to allow a sale of the property to a private development group which has not been publicly identi-

fied due to a non-disclosure agreement. “‘Hello and welcome, or goodbye,’” said Supervisor Gary Wall, characterizing the decision expected to be made next week. What happens with the site is up in the air. But Eric Banks, executive principal and executive director of brokerage services for Bingham Farmsbased Core Partners, which is representing Santa Monica-based owner SD Capital LLC in the sale, said a “major sports and entertainment development” project is planned. The nuts and bolts, according to Banks: a 12,000-seat arena with basketball courts, four hockey rinks, a wave pool, an IMAX theater, a hotel, 100,000 square feet of sports-related retail space, outlot restaurants, soccer and football fields and other uses. Earlier this year, Crain's reported that former Detroit Lions wide receiver Herman Moore is in talks to invest with the development group, and former University of Michigan basketball player and current Oakland Community College men’s basketball coach Antoine Joubert is a committed investor. There is a tentative purchase agreement, which has a six-month due diligence period, to buy the mall from SD Capital. If the township does not accept the plan next week, the township could

Prominent properties The most prominent sites in north Oakland County. Property

Site size

Summit Place Mall

75 acres

Pontiac Silverdome

127.5 acres

The Palace of Auburn Hills

110 acres

Oakland Technology Park

100 acres

consider moving forward with its dangerous building process, likely leading to demolition of the mall, which opened in 1963 and was developed by what is now Farmington Hills-based Ramco-Gershenson Properties Trust (NYSE: RPT). Wall said the site is massive. “I have 40-plus years in the construction business and I have never worked (on) anything of this size,” he said. First known as the Pontiac Mall, it began declining when nearby Great Lakes Crossing Outlets in Auburn Hills, developed by Bloomfield Hillsbased Taubman Centers Inc., opened in 1998 and siphoned shoppers northeast. SEE SITES, PAGE 10

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SPECIAL REPORT: REAL ESTATE

Metro Detroit apartment market has one of nationâ&#x20AC;&#x2122;s lowest vacancy rates By Kirk Pinho kpinho@crain.com

Downtown Detroit isnâ&#x20AC;&#x2122;t the only hot area for apartments in town. In fact, the entire metropolitan area has one of the lowest vacancy rates nationally, according to a report from Marcus & Millichap Real Estate Investment Services Inc., which is based in Calabasas, Calif., and has its regional office in Southfield. A number of factors are driving the remarkably low vacancy rate. The Urban Land Institute says in its annual Emerging Trends in Real Estate report that an influx of millennials into the job market, weariness for single-family housing following the 2008 crash, and the desire for lifestyle flexibility â&#x20AC;&#x201D; along with consumer credit issues, student debt loads and tighter mortgage requirements â&#x20AC;&#x201D; are buoying the apartment sector across the country. With a 2.6 percent vacancy rate expected this year, holding steady at the same level as 2016, the regionâ&#x20AC;&#x2122;s apartment market is tied with Los Angeles, and bested only by Riverside-San Bernardino (2.5 percent), Miami-Dade and Sacramento (2 percent each) and Minneapolis-St. Paul (1.9 percent) nationally, according to the Marcus & Millichap forecast. Steven Chaben, senior vice president and regional manager of Marcus & Millichapâ&#x20AC;&#x2122;s Southfield office, said itâ&#x20AC;&#x2122;s the strongest apartment market he has seen in more than three decades. â&#x20AC;&#x153;The fundamentals of the Southeast Michigan apartment market today might be as strong as they have been in the last generation, certainly in my 35-year career,â&#x20AC;? Chaben said. â&#x20AC;&#x153;I canâ&#x20AC;&#x2122;t remember a marketplace as tight as this with vacancies as low as they are, and thatâ&#x20AC;&#x2122;s creating a lot of rent growth. Thatâ&#x20AC;&#x2122;s music to the ears of investors of apartment buildings.â&#x20AC;?

Dave Ferszt: Steven Chaben: Millennials coming Market creating back to state. rent growth.

A growing employment base is driving demand for apartment living, said Dave Ferszt, president of Farmington Hills-based apartment manager and developer Village Green Cos. â&#x20AC;&#x153;As you are seeing jobs generating in the MSA (metropolitan statistical area) ... auto is a big part of that, but millennials are coming back to Michigan for professional jobs, and I donâ&#x20AC;&#x2122;t think they are really home buyers today,â&#x20AC;? Ferszt said. â&#x20AC;&#x153;The general employment market improvement has helped tremendously.â&#x20AC;? But another reason vacancy rates are so low is because supply isnâ&#x20AC;&#x2122;t keeping up with demand. While a limited number of new apartments are under construction in pockets like Royal Oak, Ferndale, Milford and Plymouth, the pace of new apartment development in the metro Detroit area may lag behind other regions, said Samuel Beznos, CEO of Farmington Hills-based Beztak Cos. â&#x20AC;&#x153;We had 10 plus years of downturn, and it could have arguably been more. There is very little construction,â&#x20AC;? said Beznos. â&#x20AC;&#x153;The articles recently about Detroit, with 2,000 units coming to the city â&#x20AC;&#x201D; other metros could have had 20,000,â&#x20AC;? Beznos said. Beztak has a 17,000-unit multifamily portfolio under ownership and management, with 12,000 of those units in Michigan.

Rents have also been rising substantially, which could spur new construction. This year, 2,600 apartments are expected to come online, up from 2,400 in 2016 and 1,500 in 2015, according to Marcus & Millichap. Rents are expected to rise 5.7 percent this year to $951 and rose 5.7 percent last year to $910 per month, according to Marcus & Millichap. Marcus & Millichap is not the only firm that gives metro Detroit strong marks for its multifamily market. Berkadia, which is based in Ambler, Pa., and has an office in Southfield, predicts the vacancy rate will remain steady at 3.4 percent and expects a 3.5 percent rent increase to $1,005 per month by the end of the year. Kevin Dillon, managing director of Berkadiaâ&#x20AC;&#x2122;s Southfield office, said he expects rents to continue to rise overall between 3 and 6 percent through 2018 and, barring a downturn, multifamily occupancy rates to remain above 95 percent. The strong rent and vacancy numbers have fueled some large local apartment complex sales in recent years, including some of the largest, in terms of total cost. Two of the top five investment sales in 2016 were for big apartment buildings, including the $79.5 million purchase of the Riverfront Towers in downtown Detroit and the $32.25 million purchase of the Fairlane East apartments in Dearborn. Riverfront Towers has 557 apartments ($142,729 per unit), while Fairlane East has 244 ($128,074 per unit). Both sold to outof-state investors. In 2015, the largest sale of the year was 2,226-unit Somerset Park Apartments in Troy for $216 million; Cedarbrooke Apartments in Auburn Hills sold for $49 million for its 584 units. Those also sold to out-of-state investors. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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By Kristin Bull Crain Content Studio If you visit crainsdetroit.com today, youâ&#x20AC;&#x2122;ll see weâ&#x20AC;&#x2122;ve gone blue. Thereâ&#x20AC;&#x2122;s a story behind that color change, one that illustrates our commitment to listening and messaging and customization. Judson Center came to Crainâ&#x20AC;&#x2122;s with a clear need: To bring awareness to World Autism Month, which is now. The theme of the month: â&#x20AC;&#x153;Bringing autism to light.â&#x20AC;? The color: Blue. Judson Center is a nonprofit that provides services to thousands of metro Detroit families, including children and adults on the autism spectrum. â&#x20AC;&#x153;Judson Centerâ&#x20AC;&#x2122;s goal was to help increase understanding and acceptance of autism in the month of April, so weâ&#x20AC;&#x2122;re lighting it up this month,â&#x20AC;? said Lisa Rudy, Crainâ&#x20AC;&#x2122;s director of sales. Rudy worked with Carlos Portocarrero, deputy product manager for digital, to turn the top of the home

)RU IXUWKHU LQIRUPDWLRQ SOHDVH YLVLW WKH +8' 0+/6 ZHEVLWH DW ZZZ KXG JRY IKDORDQVDOHV page -- which is traditionally a light shade of grey -- to a vibrant blue. Storytelling doesnâ&#x20AC;&#x2122;t always follow a beginning-to-end formula, and advertising doesnâ&#x20AC;&#x2122;t need to be bound to a sales sheet. Every client has a different need, a particular message, a specific problem to try to solve. Rather than a linear approach, our team is committed to a more diverse one. Thatâ&#x20AC;&#x2122;s the theory behind â&#x20AC;&#x153;customâ&#x20AC;? advertising: Itâ&#x20AC;&#x2122;s made for you. Or in this case, itâ&#x20AC;&#x2122;s made for Judson Center -- and shining the light on autism. Kristin Bull is director of custom content for Crainâ&#x20AC;&#x2122;s Detroit Business. Reach her at kbull@crain.com.

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SPECIAL REPORT: REAL ESTATE

SITES FROM PAGE 8

The enclosed portion of Summit Place Mall closed in 2009 following years of decline. Anchor stores Macy's and J.C. Penney closed in 2010 and Sears closed in December 2014. If the plan is approved, parts of the mall would be demolished, and other parts might be repurposed, Banks said. â&#x20AC;&#x153;The developer had been looking at other areas south near the airport, and one of the things that attracted them to this site was a large swath of land that could be redeveloped.â&#x20AC;?

Pontiac Silverdome Perhaps the best-known ruin in Oakland County, the Silverdome has been the subject of a pair of legal battles in recent months that could be settled soon. Last week, its owner agreed to demolish the Silverdome as part of a lawsuit filed by the city in late February. Steve Apostolopoulos, co-founder and managing partner of Triple Properties, which owns the 80,311-seat former home of the Detroit Lions at Opdyke and Featherstone roads, declined comment last week. But in a press release last week, his father, Andreas Apostolopoulos, CEO of Toronto-based Triple Investment Group, said the company has â&#x20AC;&#x153;reached a point where we must say goodbye to what was once one of the worldâ&#x20AC;&#x2122;s greatest venues.â&#x20AC;? â&#x20AC;&#x153;As we say goodbye to an iconic place that was the setting for so many great memories, we put in place new development opportunities for one of the most unique properties in our nation.â&#x20AC;? Late last year, Triple Properties sued the local office of Los Angeles-based CBRE Inc., which had marketed the property for sale, alleging that brokers had not properly informed Triple that there was an opportunity to extend a lease for a portion of the site for FCA USA LLC parking. John Latessa, president of the CBRE Midwest Division, which oversees the Southfield office, declined comment. A year and a half ago, a conceptual rendering demonstrated the siteâ&#x20AC;&#x2122;s potential: J A 500,000-square-foot corporate headquarters or light industrial building. J Four single-story light industrial buildings totaling 750,000 square feet. J Retail and entertainment space totaling 192,000 square feet. J A 104,000-square-foot hotel. J Nearly 46,000 square feet of residential space. J And another 50,000 square feet of multitenant commercial space that would include restaurants. The concept would require the complete demolition of the Silverdome. Triple Properties purchased the Silverdome at auction from the city in 2009 for $583,000, just 1.05 percent of the total 1975 construction cost of $55.7 million.

The 1,100-acre-plus Oakland Technology Park in Auburn Hills has faced fewer struggles than the Silverdome and Summit Place Mall. The Lions moved to Ford Field in downtown Detroit in 2002. In recent years, the Silverdome has fallen into disrepair, with its inflated ceiling collapsing and its field and seats strewn with debris.

The Palace of Auburn Hills In November, the Pistons announced they would be moving from the 22,000-seat Palace to Little Caesars Arena in downtown Detroit, which is currently under construction and expected to be complete in time for the 2017-18 NHL and NBA seasons. Real estate experts have said they expect the Palace to eventually be demolished and redeveloped. Among the development probabilities: corporate users, which have headed to Auburn Hills in droves in the last several years to build new North American and global headquarters buildings and other facilities, like research and development space. City Manager Tom Tanghe said city officials will meet with Palace Sports & Entertainment in the coming weeks to discuss the fate of the property, which sits on about 100 acres. â&#x20AC;&#x153;These discussions will be preliminary since they have plans to continue the use of the offices and practice facility into 2018,â&#x20AC;? he said. â&#x20AC;&#x153;That means we have some time to plan with them.â&#x20AC;? Kevin Grigg, a spokesman for PS&E, said â&#x20AC;&#x153;nothing has been determined regarding the future of The Palace other than the Pistons wonâ&#x20AC;&#x2122;t be playing basketball at the venue next year.â&#x20AC;? The team and Henry Ford Health System announced a new joint training, medical facility and team HQ in February planned for the block west of Cass Avenue on what is currently a parking lot between Second and Third avenues, bounded by railroad tracks to the north and Amsterdam Street to the south. Itâ&#x20AC;&#x2122;s expected to cost $83 million. Internal conversations have also taken place about the arenaâ&#x20AC;&#x2122;s future should it ultimately be demolished, Tanghe said. â&#x20AC;&#x153;Clearly, the land is very strategically located and the opportunities for a number of potential uses exist, including its current use.â&#x20AC;? Former Pistons owner Bill Davidson, whose death in 2009 led to the

teamâ&#x20AC;&#x2122;s sale to Tom Gores, built the Palace in 1988 for $90 million out of his own pocket. He spent an additional $112.5 million in subsequent renovations. Gores has spent more than $40 million in renovations and upgrades, including a three-year replacement of all 22,000 seats in a project scheduled to wrap up this year. The building is still widely considered to be an excellent sports and concert facility and draws first-tier acts.

Oakland Technology Park The 1,100-acre-plus Oakland Technology Park in Auburn Hills has faced fewer struggles than the Silverdome and Summit Place Mall. It has attracted companies like Faurecia North America Inc., Atlas Copco North America Inc., and Hirotec America Inc. for new buildings, and it still has 100 acres of undeveloped land available for new projects, said Stacy Fields, asset manager for Southfield-based General Development Co. LLC, which owns the remaining property in a joint-venture with Farmington Hills-based Friedman Integrated Real Estate Solutions LLC. She said there are two parcels â&#x20AC;&#x201D; one 35 acres, another 40 acres â&#x20AC;&#x201D; on High Meadow Circle and another 25-acre parcel on Entrance Drive available. The High Meadow properties can accommodate a total of 700,000 square feet, while Entrance Drive can be built with 300,000 square feet or more, Fields said. The tech parkâ&#x20AC;&#x2122;s more than 200 acres have attracted $100 million or more in development activity since General Development and Friedman purchased it from Chrysler Corp. during its bankruptcy for $2.5 million. The remaining 800 or so acres of Oakland Technology Park have multiple owners, the largest of which, FCA US LLC (formerly Chrysler), owns just over 500 of them. Others include Johnson Controls Inc. and Delphi Automotive plc. Today, Auburn Hills is one of the bright spots in Oakland County development, regularly attracting new projects of the scope that have sprouted up in the past six years on the General Development/Friedman land. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 3 , 2 0 1 7

SPECIAL REPORT: DETROIT’S HIGHEST PAID ATHLETES

The Top Ten

Miguel Cabrera 1B/DH, Tigers. Age: 33 2017 base salary: $28 million

Tigers dominate the highest-paid list once again

1 23 Find the full list and team-by-team breakdowns on Page 14

Here’s the deal: The fireballer struggled in 2014, and surgery in 2015 limited him to 20 starts. He roared back in 2016 to lead the AL with 254 strikeouts, and lost out on a second Cy Young Award only because two voters left him off their ballots. He’s won 173 games in 12 seasons with 2,197 strikeouts — second in team history to Mickey Lolich’s 2,679. Since 2005, he has won the AL Rookie of the Year, been a six-time All Star, led the AL in strikeouts four times, and won the Cy Young Award and MVP in 2011. Detroit has rewarded him: His rookie contract was $4.5 million over five years, and he got a one-year, $3.675 million deal in 2009. That was followed by a five-year, $80 million contract supplanted by a deal that runs through 2019 (with a $22 million option in 2020). Verlander has been rumored to be trade bait, but he’s still here for now.

2017 base salary: $18 million

Contract: 4 years, $68 million (2015-18) Here’s the deal: Martinez is entering his 15th major league season, and age looms over his career. Last season saw a career-high 90 strikeouts that likely were the result of an undisclosed hernia that required off-season surgery. He’s relied upon for his bat — he hit .289 in 2017 with 27 home runs — and his leadership. Last year, he started at first base five times while appearing in the starting lineup as a DH in 138 games. Still, his 154 total games last season were the third-most of his career. He was an All Star as recently at 2014 (finishing second in MVP voting), when he led baseball with a .409 on-base percentage. Detroit signed him as a free agent in November 2010 to a four-year, $50 million contract that was followed by his current deal.

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2017 base salary: $28 million

Here’s the deal: The slugger commands a massive salary because he’s one of the greatest hitters in Major League Baseball history and is the fixture around which the Tigers are constructed. The 11-time All Star is a career .321 hitter with 446 home runs. He’s a two-time American League MVP, and in 2012 became baseball’s first Triple Crown winner since 1967. The Tigers picked him up in a December 2007 trade with the Florida Marlins. He initially signed an eight-year, $152.3 million contract that expired in 2015. He signed an eight-year extension in 2014 that takes the deal through 2023 and pays him another $248 million. That deal has option years for 2024-25 worth an additional $60 million. If he plays through 2025, he’ll have been paid $460.3 million. By contrast, Cabrera’s office, Comerica Park, cost $326 million to build. The worry: Age. He turns 34 this month.

Designated hitter, Tigers. Age: 38

rep in li The too W the if th Feb

Pitcher, Tigers. Age: 34

Contract: 7 years, $180 million (2013-19)

Victor Martinez

Justin Verlander

Contract: 8 years, $248 million (2016-23), plus 2024-25 options

7 Tobias Harris

Forward, Pistons. Age: 24 2017 base salary: $17.2 million Contract: 4 years, $64 million (2015-19) Here’s the deal: He was named a full-time starter on March 17 after a year of being alternated at forward with Jon Leuer. Detroit has been mediocre this season, but Harris has led the team in scoring average and shooting percentage while coming off the bench more often than starting. At one point this season, he was in the conversation as the NBA’s top sixth man. The Pistons acquired him in a February 2016 trade that sent Ersan Ilyasova and Brandon Jennings to the Orlando Magic. Harris could remain as a building block if the Pistons opt to retool their roster.

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C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 3 , 2 0 1 7

By Bill Shea bshea@crain.com

he Detroit Tigers again dominate the annual Crain’s list of the 25 toppaid professional athletes, including six in the top 10, but that could change in coming years. Tigers owner Mike Ilitch, who died in February, had established a reputation for doling out enormous contracts to star players, deals that were more in line with a large-market club rather than a middle-market team such as Detroit. The billionaire pizza baron did the same with his Detroit Red Wings over the years, too, before the National Hockey League established a salary cap. Will his heirs continue such spending? The conventional wisdom has been that the Tigers’ payroll will slim down over the next few years, perhaps even radically so if the team opts to shed stars via trades. Son Chris Ilitch now runs the team, and in February he told reporters at spring training there is no mandate on payroll. How-

ever, he signaled that the team will concentrate on drafting and developing talent more than seeking it via writing huge checks to free agents, as his father did. He did not specifically rule out a splashy signing if it fit a team need while in contention. For now, the team will pay more than $200 million this season — $153 million of that to eight players — in a bid to get back to the World Series. Contracts are influenced by many factors, but chief among them are a league’s salary cap and an owner’s spending tolerance. Major League Baseball has no such payroll limitation beyond a luxury tax that deep-pocket owners (including Mike Ilitch) have been willing to pay. The other three leagues ranges in their salary limits and rules: This year, the National Football League will cap payroll at $167 million, while the National Basketball Association is $94.1 million. The NHL has the lowest cap at $73 million. For context, in 2004, the year before the league’s work stoppage led to a salary cap, the Red Wings were spending nearly $80 million on players.

3 4 5 Justin Upton

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

Outfielder, Tigers. Age: 29

Jordan Zimmermann

2017 base salary: $22.125 million

Pitcher, Tigers. Age: 30

Contract: 6 years, $132.75 million (2016-21)

2017 base salary: $18 million

Contract: 5 years, $110 million (2016-20)

Here’s the deal: The Tigers signed him as a free-agent in January 2016 to replace Yoenis Cespedes as their everyday left fielder. After a slow start with just three home runs over his first 48 games, he hit 28 in his final 105 games. His ability to get on base in 2016 was lower than his career averages. Before signing with Detroit, Upton was coming off a six-year, $51.5 million deal signed with the Arizona Diamondbacks that accompanied him in trades to the Atlanta Braves and San Diego Padres. It paid him $14.5 million in 2015, and he cashed in with the Tigers with a contract that paid him $22.125 million last year and will again in 2017. He can opt out after this season, voiding the final four years of the deal.

Andre Drummond

Matthew Stafford

Anibal Sánchez

Quarterback, Lions. Age: 29

Pitcher, Tigers. Age: 33

2017 base salary: $16.5 million

2017 base salary: $16 million

Contract: 3 years, $53 million (2015-17)

Contract: 5 years, $80 million (2013-17)

Here’s the deal: He holds nearly every Lions passing record, and has led them to three playoff games. Yet, Detroit lost all of those — something Stafford’s critics are keen to remind everyone. In 2016, he orchestrated an NFL-record eight fourth-quarter comebacks en route to a 9-7 record and NFC wild card berth. His 25 career fourth-quarter rallies are 14th most in NFL history. He’s started 96 consecutive games and earned a reputation for toughness. The 2017 season is the final year of his current deal, and it’s expected that the Lions will try to sign him to a long-term extension. At 29, he’s entering the physical peak of his career, and likely will command well more than $20 million a season.

Here’s the deal: After coming over in a July 2012 trade with the Miami Marlins, Sánchez turned in an excellent 2013 that saw him lead the AL with a 2.57 ERA. Deteriorating fastball velocity has contributed to the sharp decline in his performance. Control and movement on his pitches are a problem, and he’s given up 59 home runs the past two seasons, including 30 in 2016. Recording a 6.67 ERA over his first 11 starts last season earned him a demotion to the bullpen, but injuries to other pitchers meant he was back among the starters by July. He ended with a career-worst 5.87 ERA for the season. He’s had an up and down spring training this year and will start the season in the bullpen. His contract has a $16 million club option or $5 million buyout for 2018.

Center, Pistons. Age: 23

2017 base salary: $22.1 million

Contract: 5 years, $127.1 million (2016-21)

Here’s the deal: In July, the Pistons made Drummond the highest-paid player in franchise history. Expectations were enormous. While still arguably the NBA’s best rebounder, he’s basically a flop in every other aspect. He’s been criticized as lacking energy. He’s largely an offensive liability and even worse free-throw shooter with a career .383 percentage from the line. That’s historically bad. So bad that teams were fouling him so often late in games that the NBA had to alter its rules. Coach Stan Van Gundy has benched him at times this season as he tries to tinker his way to a playoff spot. Yet, Drummond is just 23, and a favorite of team owner Tom Gores. Can and will he improve, or is the team stuck with a salary cap albatross?

Here’s the deal: Another splashy free-agent signing last year by Tigers owner Mike Ilitch served to excite fans, and Zimmerman bolstered expectations by allowing just two runs over 33 innings in April. At some point, neck pain began to affect him and sent him to the disabled list in July. Pain limited him to 18 starts, and his 4.87 ERA and 1.367 WHIP were off his career norms. With the Nats, he was a two-time All Star and tossed a no-hitter. Detroit will rely on him to anchor the middle of the rotation behind Verlander and 2016 AL Rookie of the Year Michael Fulmer. His health could go a long way to determine how Detroit’s 2017 plays out.

910 Reggie Jackson Guard, Pistons. Age: 26 2017 base salary: $14.9 million Contract: 5 years, $80 million (2015-20) Here’s the deal: Another expensive player the Pistons have benched and shopped. He lost his job to journeyman Ish Smith. This season, ESPN.com reported trade talks that would have sent Jackson to Minnesota or Orlando, but nothing panned out. The Pistons acquired him in a three-team deal with the Oklahoma City Thunder and the Utah Jazz in February 2015. They gave him his current contract in July 2015. He missed time at the end of last season and the beginning of this year with injuries. He’s young still, but his future with Detroit appears in grave doubt.

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 3 , 2 0 1 7

SPECIAL REPORT: DETROIT’S HIGHEST PAID ATHLETES

13 Photographs by Associated Press, Getty Images; some images were supplied by the teams.

Highest paid, all teams

Team-by-team breakdown

This list includes all athletes currently on team rosters as of March 31. Salary figures are base pay for the 2016-17 season. Bonuses, endorsement income, and other financial investments are not included. Tied salaries were ranked by overall contract size.

Here’s how the overall highest-paid athletes stack up within their own team.

Rank

Player

Team

Age

Position

2017 salary

Miguel Cabrera

Tigers

First baseman

$28,000,000

Justin Verlander

Tigers

Pitcher

Justin Upton

Tigers

Outfielder

Andre Drummond

Pistons

Center

Jordan Zimmermann Tigers

Victor Martinez

Tigers

Tobias Harris

Tigers Rank

Player

$28,000,000

Miguel Cabrera

$22,125,000

Justin Verlander

team/all

Age

Position

2017 salary

$28,000,000

$22,116,750

Justin Upton

$22,125,000

Relief pitcher

$18,000,000

Jordan Zimmermann

$18,000,000

Designated hitter

$18,000,000

Victor Martinez

$18,000,000

Pistons

Forward

$17,200,000

Anibal Sanchez

$16,000,000

J.D. Martinez

$11,750,000

Matthew Stafford

Lions

Quarterback

$16,500,000

Anibal Sanchez

Tigers

Pitcher

$16,000,000

Ian Kinsler

$11,000,000

Reggie Jackson

Pistons

Guard

$14,956,522

Francisco Rodriguez

RP/CL

$6,000,000

Ezekiel Ansah

Lions

Defensive end

$12,734,000

J.D. Martinez

Tigers

Outfielder

$11,750,000 $11,000,000

Ian Kinsler

Tigers

Second baseman

Jon Leuer

Pistons

Forward

$10,991,957

Henrik Zetterberg

Red Wings

Center

$7,750,000

Boban Marjanovic

Pistons

Center

$7,000,000

Marvin Jones

Lions

Wide receiver

$7,000,000

Aron Baynes

Pistons

Forward

Mike Green

Red Wings

Golden Tate

Lions

Ishmael Smith

Lions Rank

Player

team/all

Age

Position

2017 salary

Matthew Stafford

$16,500,000

Ezekiel Ansah

$12,734,000

Marvin Jones

$7,000,000

$6,500,000

Golden Tate

$6,000,000

Defenseman

$6,000,000

Haloti Ngata

$5,500,000

Wide receiver

$6,000,000

Pistons

Guard

$6,000,000

Francisco Rodriguez

Tigers

Relief pitcher

$6,000,000

Haloti Ngata

Lions

Defensive tackle

$5,500,000

Niklas Kronwall

Red Wings

Defenseman

$5,500,000

Jimmy Howard

Red Wings

Goalie

$5,500,000

Source: Spotrac.com, Crain’s reporting

Quick hits

Here are some takeaways from the list, which is based on base salary for 2017: J The top 10 remains unchanged from last year. J The Tigers have 12 players in the top 25 in 2016, but only nine this year. J The total combined salaries of all the players on the list is $316.1 million. J The average salary is $12.6 million, down slightly from last year’s $12.7 million. J The average age of the players in the top 25 is 30.3 years old. Victor Martinez is oldest at 38. Andre Drummond is youngest at 23. J Miguel Cabrera and Justin Verlander are tied with the fourth-highest MLB salaries this season at $28 million each.

List changes

Four players are gone from 2016’s top 25: J Tigers center fielder Cameron Maybin, 29, who made $8.1 million last season, was traded in November to the Los Angeles Angels of Anaheim. J Shortstop Erick Aybar, 33, now with the San Diego Padres, made part of his $8.75 million last season with the Tigers after coming over in an August trade with Atlanta. J The Lions let offensive tackle Riley Reiff, 29, leave in free agency. He made $8 million in 2016 as part of the four-year, $7.9 rookie deal after the 2012 NFL Draft. The Vikings signed him March 9. J The Tigers released Mike Pelfrey last week. They had been due to pay him $8 million this season on a twoyear, $16 million deal signed before the 2016 season.

Pistons Rank

Player

team/all

Age

Position

2017 salary

Andre Drummond

$22,116,750

Tobias Harris

$17,200,000

Reggie Jackson

$14,956,522

Jon Leuer

$10,991,957

Boban Marjanovic

$7,000,000

Aron Baynes

$6,500,000

Ishmael Smith

$6,000,000

Age

Position

Red Wings Rank

Player

Henrik Zetterberg

$7,750,000

Mike Green

$6,000,000

Niklas Kronwall

$5,500,000

Jimmy Howard

$5,500,000

team/all

2017 salary

Source: Spotrac.com, Crain’s reporting

Gone, but not forgotten financially There are five players who would have made the Top 25 in 2017 salaries, but are no longer on a Detroit roster. Player

Team

Age

DeAndre Levy

Lions

OLB

Josh Smith

Pistons

Prince Fielder

Tigers

1B/DH

$6,000,000 As part of the 2013 Ian Kinsler trade, Detroit agreed to pay $30 million of Fielder’s salary in $6 million annual installments from 2016-20. Of the $214 million total salary, the Tigers will end up paying $76 million of it.

Mark Lowe

Tigers

$5,500,000 Cut by the Tigers on March 26 after struggling out of the bullpen. Detroit still will pay him $5.5 million this year as part of the two-year, $11 million contract he signed in 2016.

Mike Pelfrey

Tigers

$8,000,000 Like Lowe, he was cut by the Tigers on March 30 after struggling in his relief role. The Tigers will pay him $8 million this season as part of his two-year, $16 million deal signed in 2016.

Source: Spotrac.com, Crain’s reporting

Position

2017 salary

Reason

$5,750,000 Lions announced Levy’s release on March 9, hip and knee injuries, will count $2.4 million against salary cap with June 1 cut $5,331,729 Waived Dec. 22, 2014; four-year, $54 million deal

C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // A P R I L 3 , 2 0 1 7

CRAIN'S LIST: LARGEST GENERAL CONTRACTORS

Ranked by 2016 revenue Rank

1 2 3

Company Address Phone; website

Top local executive(s)

Revenue ($000,000) 2016/2015

Value of new contracts ($000,000) 2016/2015

Local employees Jan. 2017

Total new projects 2016/2015

Southeast Michigan projects started 2016

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

Ryan Maibach president and CEO

$2,425.5 $1,780.3

$1,823.8 $1,882.2

1,100

283 236

191

Belfor Holdings Inc.

Sheldon Yellen CEO

1,590.2 1,400.2 B

1,524.9 1,424.6

1,950

102,000 NA

3,597

1,450.0 1,432.0

1,440.0 1,366.0

360

158 185

185 Oakland Ave., Suite 150, Birmingham 48009 (248) 594-1144; www.belfor.com

Walbridge Aldinger Co. 777 Woodward Ave., Suite 300, Detroit 48226 (313) 963-8000; www.walbridge.com

John Rakolta Jr. chairman and CEO

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

Joseph Aristeo president

402.8 410.0

354.0 367.9

385

390 456

Commercial Contracting Group Inc. 4260 N. Atlantic Blvd., Auburn Hills 48326 (248) 209-0500; www.cccnetwork.com

William Pettibone chairman

298.0 291.0

NA 195.0

NA 143

Ideal Contracting 2525 Clark St., Detroit 48209 (313) 843-8000; www.idealcontracting.com

Frank Venegas Jr. chairman and CEO

273.3 239.0

245.9 274.0

743 879

766

Walsh Construction Co. 3011 W. Grand Blvd., Suite 2300, Detroit 48202 (313) 873-6600; www.walshgroup.com

Sam Bahou business group leader

253.3 251.3

43.4 NA

118

128 115

Clark Construction Co. 3535 Moores River Drive, Lansing 48911 (517) 372-0940; www.clarkcc.com

Charles Clark CEO

238.3 245.0

218.0 234.0

22 25

Roncelli Inc. 6471 Metropolitan Parkway, Sterling Heights 48312 (586) 264-2060; www.roncelli-inc.com

Gary Roncelli chairman and CEO Thomas Wickersham president and COO Todd Sachse CEO and founder Steve Berlage president and COO Vincent DeLeonardis president and CEO

235.0 242.0

280.0 224.0

218

85 90

203.7 172.2

253.0 227.2

155

225 186

108

172.8 136.5

271.5 163.5

126 150

126

9 10

Sachse Construction and Development Co. LLC 1528 Woodward Ave., Suite 600, Detroit 48226 (313) 481-8200; www.sachseconstruction.com

George W. Auch Co. 735 S. Paddock St., Pontiac 48341 (248) 334-2000; www.auchconstruction.com

Dearborn Mid-West Co. 20334 Superior Road, Taylor 48180 (734) 288-4400; www.dmwcc.com

Jeff Homenik president and CEO

172.0 183.0

NA NA

Devon Industrial Group 535 Griswold St., Suite 2050, Detroit 48226 (313) 221-1550; www.devonindustrial.com

David Burnley president

160.0 62.9

103.0 120.8

8 5

135.0 102.0

173.4 NA

25 NA

124.1 144.2

86.3 100.0

145

44 51

DeMaria Building Co. 45500 Grand River Ave., Novi 48374-1305 (248) 348-8710; www.demariabuild.com

Angelo Colasanti CEO Carey Colasanti president Tony DeMaria president Joseph DeMaria Jr CEO David Kelly vice president and general manager

200

The Colasanti Cos. 24500 Wood Court, Macomb Twp. 48042 (586) 598-9700; www.colasantigroup.com

108.7 132.6

316.2 152.5

50 30

Turner Construction Co. 535 Griswold St., Suite 1525, Detroit 48226 (313) 596-0500; www.turnerconstruction.com

Alberici Constructors Inc. 26711 Northwestern Hwy. Suite 255, Southfield 48033 (734) 367-2500; www.alberici.com

Mark Okroy vice president and general manager

106.6 167.5

85.2 100.0

13 7

Ronald Staley senior vice president, Southeast Michigan operations

100.0 120.1

830.5 700.0

104 93

The Christman Co. The Fisher Building, 3011 W. Grand Blvd., Suite 2600, Detroit 48202-3030 (313) 908-6060; www.christmanco.com

Kirco Manix 101 W. Big Beaver, Suite 200, Troy 48084 (248) 354-5100; www.kircomanix.com

Douglas Manix president

96.0 61.0

90.0 125.0

25 20

Marsh Construction (T.H. Marsh) 100 W. Long Lake Road, Suite 200, Bloomfield Hills 48304 (248) 586-4130; www.thmarsh.com

Ryan Marsh president and CEO

90.0 83.0

NA NA

Oliver/Hatcher Construction and Development Inc. 27333 Meadowbrook Road, Suite 100, Novi 48377 (248) 374-1100; www.oliverhatcher.com

Paul Hatcher, president; Paul Oliver, principal

86.7 43.0

79.0 NA

NA NA

Kasco Inc. 226 E. Hudson St., Royal Oak 48067 (248) 547-1210; www.kascoinc.com

Michael Engle vice president

80.6 72.0

62.6 60.0

135 NA

115

C.E. Gleeson Constructors Inc. 984 Livernois, Troy 48083 (248) 647-5500; www.gleesonconstructors.com

Charles E. Gleeson II president and CEO

79.0 70.5

89.0 81.0

27 29

Frank Rewold and Son Inc. 333 E. Second St., Rochester 48307 (248) 651-7242; www.frankrewold.com

Frank Rewold president and CEO

69.5 91.9

211.7 166.0

29 25

Rudolph/Libbe Inc. 47461 Clipper St., Plymouth 48170 (734) 455-0600; www.rlgbuilds.com

Kenneth Swartz general manager, Southeast Michigan operations

44.3 36.2

NA NA

NA 370

395

This list of general contractors is a compilation of the largest such companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. It is not a complete listing but the most comprehensive available. Crain's estimates are based on industry analyses and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Southeast Michigan office. Actual revenue figures may vary. NA = not available. If you believe your company should be on this list, contact Sonya Hill at shill@crain.com.

B In 2015, 88.05 percent of revenue for Belfor, a disaster recovery firm, was from construction management. The figure was 92 percent in 2014. LIST RESEARCHED BY SONYA D. HILL

C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // A P R I L 3 , 2 0 1 7

Supreme Court case could bring patent cases back to Michigan

Ranked by square feet

By Dustin Walsh

Rank Building

dwalsh@crain.com

The result of a Supreme Court case between two food companies may benefit Southeast Michiganâ&#x20AC;&#x2122;s automotive industry and the attorneys that represent them. The patent case, TC Heartland LLC v. Kraft Foods Group Brands, that entered the nationâ&#x20AC;&#x2122;s highest court last week centers on where plaintiffs in an intellectual property or patent infringement dispute can file a lawsuit. Under current U.S. law, a plaintiff may file a patent infringement suit essentially in any district where the defendant does business. The result? The rise of the Eastern District of Texas federal court. The court is nicknamed the â&#x20AC;&#x153;Rocket Docketâ&#x20AC;? because itâ&#x20AC;&#x2122;s become home to a vast majority of patent infringement lawsuits, marketed by quick proceedings â&#x20AC;&#x201D; roughly 18 months compared with more than three years at other courts â&#x20AC;&#x201D; and plaintiff-friendly juries thanks to its smalltown sensibilities in rural Texas. However, the Supreme Court is expected to rule against venue shopping, forcing plaintiffs to try cases in the district of the defendantâ&#x20AC;&#x2122;s headquarters or major operations, said Joseph Barber, an IP attorney for Royal Oak-based Howard & Howard Attorneys PLLC. â&#x20AC;&#x153;The U.S. court system is set up to give the defendant an advantage of

being at home, except in these cases,â&#x20AC;? Barber said. Barber said if the Supreme Court rules in favor of changing jurisdiction, local automakers will immediately save on legal costs, because itâ&#x20AC;&#x2122;s expensive to try cases far from their home bases. Roughly 10 percent of all patent cases involved automotive companies, Barber said, and the number is expected rise to rise substantially. â&#x20AC;&#x153;Cars are becoming computers on wheels,â&#x20AC;? Barber said. The Eastern District of Michigan court could see as many as three dozen more patent cases if the high court changes the rule, Barber said. Marc Lorelli, partner and co-chair of the intellectual property litigation practice at Brooks Kushman PC in Southfield, said itâ&#x20AC;&#x2122;s unlikely to increase the number of patent attorneys locally, however. â&#x20AC;&#x153;Patent litigators practice all over the country,â&#x20AC;? Lorelli said. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t think itâ&#x20AC;&#x2122;s going to change things dramatically for attorneys.â&#x20AC;? The ruling could, though, have the opposite impact in east Texas. â&#x20AC;&#x153;Last time I was in Tyler, Texas, I walked into a CVS after court, suit on, of course,â&#x20AC;? Lorelli said. â&#x20AC;&#x153;The guy at the counter said, â&#x20AC;&#x2DC;Let me guess. Patent attorney?â&#x20AC;&#x2122; â&#x20AC;? Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

THERE IS NO SINGLE TRUTH IN WAR

CRAIN'S LIST: OFFICE LEASES 1 2

Tenant

Broker

Fairlane Town Center, Dearborn

Starwood Capital Partners, Greenwich, Conn.

Ford Motor Co.

Signature Associates, CBRE Inc.

240,858

Arboretum, Farmington Hills B

Friedman Integrated Real Estate Solutions LLC, Farmington Hills Bedrock LLC, Detroit

TRW Automotive US LLC

Friedman Integrated Real Estate Solutions LLC

171,332

1900 St. Antoine, Detroit

Twelve Oaks Professional Center, Novi

C&S Twelve Mile Center LLC, Bloomfield Hills

Yanfeng US Automotive Interior Systems

CBRE Inc.

93,194

1681 Harmon (built-

General Development Co.

Recaro Child Saftey

Signature Associates, Lee & Associates

90,000

General Motors LLC

Signature Associates, CBRE Inc.

88,779

Autoneum

Lee & Associates, Mohr Partners

85,000

Realty Development Co.

Signature Associates, CBRE Inc.

68,065

Dickinson Wright PLLC

CBRE Inc.

67,798

Jaffe Raitt Heuer & Weiss PC

Redico LLC

66,210

Dialog Direct

Friedman Integrated Real Estate Solutions LLC

64,484

BorgWarner Inc.

Advocate Advisors of Michigan, Etkin

63,456

5 to-suit), Auburn Hills LLC, Southfield 28405 Van Dyke Ave., Neiss Management, New York 6 Warren City Dembs Development Inc., Haggerty Corporate 7 Park, Novi Farmington Hills Stuart Frankel Development Victor Corporate 8 Park, Livonia Co., Troy Sovereign Partners LLC, New Bank of America 9 Building, Troy York City Redico LLC, Southfield American Center, 10 Southfield Osprey Management Co., Officentre, 11 Troy Troy Troy C

Etkin LLC, Southfield

Auburn Ridge Office

Auburn 12 Center, Hills

List is based on information from CoStar Group Inc., CPIX, Crain's research, from published information or as submitted by brokers, advisers or property owners. Crain's has tried to list all brokers involved in a transaction, but in some cases brokers may have been omitted. Some leases were omitted because of a lack of complete information.

B Lease. C Expansion. D Lease renewal. LIST RESEARCHED BY KIRK PINHO

CRAIN'S LIST: INDUSTRIAL LEASES Ranked by square feet

2 3

Michigan Theater, Ann Arbor

Owner, owner city

Tenant

Broker

Square feet

Insite Real Estate LLC, Oak Brook, Ill. Ashley Capital, New York City

General Motors LLC

CBRE Inc.

1,593,000

Ashley Capital, New York City

Ford Motor Co.

4 5 6 7 8

Metro International Trade Services, Allen Park

Topvalco Inc.

Angstrom Capital Holdings LLC, Taylor Ashley Capital, New York City

Howard Ternes Packaging Co. Roush Enterprises

2625 Tyler Road, Ypsilanti Livonia West Commerce Center, Livonia B Livonia Corporate Center, Livonia B

26090 23 Mile Road, Chesterfield Township 128 Spring Road, Ypsilanti C Plymouth Road Technical Center, Livonia D Livonia Distribution Center, Livonia 8650 Mt. Elliott, Detroit Plymouth Oaks Business Park, Plymouth C

Distribution Center, 10 Livonia Livonia Business Center East, 11 Warren Warren B

K`Zb\kj kf k_`j \m\ek Xi\ (' Xe[ Xi\ XmX`cXYc\ efn Xk michtheater.org% =fi dfi\ `e]fidXk`fe XYflk k_\ Ă&#x201C;cd# visit dptv.org/vietnam

Brownstown Business Center,

12 Brownstown Township

Amazon.com

Ashley Capital, KUKA Systems North New York City America LLC Metro International ArcelorMittal Trade Services, Allen Park Tailored Blanks Lexington Realty Trust, Tower Automotive New York City Operations USA I LLC Ashley Capital, Hollingsworth New York City Logistics Group

Ken Burns will visit the Michigan Theater kf gi\m`\n _`j cXk\jk Ă&#x201C;cd# The Vietnam War, airing on PBS stations nationwide in J\gk\dY\i )'(.% ?\ n`cc Xcjf [`jZljj jfd\ f] _`j lgZfd`e^ gifa\Zkj Xe[ _`j nfib Xj X Ă&#x201C;cddXb\i Xe[ _`jkfi`Xe%

95,804

WEDNESDAY, APRIL 19, 2O17 @ 7:30 PM

Rock Connections Bedrock Management Services LLC

Rank Building

Acclaimed filmaker, KEN BURNS, comes to Detroit

Square feet

Owner, owner city

Ashley Capital, New York City

Lipari Foods

Ashley Capital, New York City

ThyssenKrupp Industrial Services NA, Inc

Commerce Real Estate 1,009,292 Solutions; Signature Associates Newmark Grubb 754,744 Knight Frank; CBRE, Inc. Signature Associates, 711,547 JLL Signature Associates

600,000

Ashley Capital

467,700

CBRE Inc., Newmark 384,256 Grubb Knight Frank Signature Associates, 313,618 Scavone LLC Advocate Advisors of 290,133 Michigan Colliers International; 277,875 CBRE Inc. Ashley Capital

260,151

Colliers International 207,270 Inc.

B New lease. C Lease renewal. D Renewal plus expansion. E Lease renewal - Industrial. LIST RESEARCHED BY KIRK PINHO

Expanded versions of these lists are available with a Crainâ&#x20AC;&#x2122;s data membership at crainsdetroit.com/lists

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 3 , 2 0 1 7

CRAIN'S LIST: LOCAL SALES

Ranked by price Rank Building

150 West Jefferson, Detroit

Riverfront Towers, Detroit

Troy Marriott, Troy

Fairlane East, Dearborn

2860 Clark St., Detroit

39550 W. 13 Mile Road, Novi

Hilton Garden Inn, Detroit

Fairlane Green, Phase II, Allen Park

Fairlane Meadows, Dearborn

9 10 11

City Center, Troy

Livonia Plaza, Livonia

10725 Harrison,

12 Romulus

Johnson Controls

13 Building, Warren Marquette

14 Building, Detroit Clawson Center,

15 Clawson 16 17 18

Maynard Street

Ann 19 Apartments, Arbor 1717 Fort St.,

20 Trenton

801 & 803 W. Big

21 Beaver Road, Troy 2950 S. State St.,

22 Ann Arbor

43155-43157 Nine

23 Mile Road, Novi

Redico LLC, Southfield

909 N. Sheldon Road, Plymouth

Meijer Drive Industrial Park, Troy

Seller

Piedmont Office Realty Trust, Johns Creek, Ga. Image Capital Riverfront Tower LLC, New York Holding LLC, City Detroit Jake Porritt, Wheelock Street Samir Al-Hadidi, Capital LLC, Southfield Greenwich, Conn. Monarch Trilogy Real Estate Investment and Group, Chicago Management Group, Franktown, Colo. Lexington Realty General Trust, New York Development Co. City LLC, Southfield Ryder Integrated Northern Equities Systems, Miami Group, Farmington Hills GFI Capital CW Capital Asset Resources Group Management LLC, Inc., New York Bethesda, Md. City Lormax-Stern Sovereign Capital Development Management Co., Bloomfield Group, San Diego Hills Time Equities RamcoInc., New York Gershenson City Properties Trust, Farmington Hills Unicorp National LNR Property Inc., Developments Miami Beach, Fla. Inc., Orlando Phillips Edison & RamcoCo. LLC, Gershenson Cincinnati Properties Trust, Farmington Hills Founders Adar Realty Properties LLC, (Romulus) ADA Minneapolis Compliant LP STAG Industrial C-III Asset Inc., Boston Management LLC, Irving, Texas Adient US LLC, Carlos Slim Helu, Detroit Mexico City

Broker/advisers

None

Square Price feet Acres Units Rooms ($000,000)

500,000 NA

NA $81.5

Berkadia

557

NA $79.5

Hadidi Capital

350 $68.0

244

NA $31.3

Angelic Real Estate 210,000 NA LLC

NA $29.7

NA $27.5

198 $25.6

Mid-America Real 119,000 NA Estate Group

NA $21.1

Mid-America Real 157,225 NA Estate Group

NA $20.4

297,530 NA

NA $20.0

Mid-America Real 137,391 NA Estate Group

NA $19.8

CBRE Inc.

Newmark Grubb Knight Frank

CBRE Inc.

149,000 NA

Newmark Grubb Knight Frank

312,000 NA

NA $19.5

Farbman Group

268,000 NA

NA $18.7

CBRE Inc.

162,780 NA

NA $16.9

Kimco Realty, Mid-America Real 130,224 NA New Hyde Park, Estate Group N.Y. Sterling Group, Signature Associates NA 144 Detroit

NA $15.3

NA $14.9

Durr Systems, Signature Associates 187,197 NA BietigheimBissingen, Germany Sanders Group Michigan Friedman Integrated NA NA LLC, Southfield Condominium Real Estate Solutions Corp., St. Clair LLC Shores MJW Investments Garry Post, Robert Signature Associates 49,250 NA Inc., Santa Hill, Ann Arbor Monica, Calif.

NA $13.9

168

NA $13.7

NA $12.0

Huron Valley Signature Associates, 361,288 NA Steel Corp., Van Colliers Buren Township International Inc. 791,801& 803 W. Los Alisos 360, CBRE Inc. 127,000 NA Big Beaver Road, LLC, Laguna LLC Niguel, Calif. Wickfield MRE Investments, Collers International 39,792 NA Properties LLC, LLC, Ann Arbor Inc. Ann Arbor RosDev Group, Frank W. Kerr Co., Signature Associates 318,390 NA Montreal Novi

NA $11.0

NA $10.8

NA $10.2

NA $9.8

Grand Sakwa, Signature Associates, 526,540 NA Farmington Hills Asia America Realty

NA $9.5

Friedman Friedman Integrated 122,833 NA Integrated Real Real Estate Solutions Estate Solutions LLC LLC, Farmington Hills

NA $9.4

Viking Partners LLC, Cincinnati

Sunnybrook Golf & Mitchell Plastics, Ontario Bowling Inc. site, Sterling Heights Valiant 2469 Executive International Hills Blvd., Auburn Inc., Troy Hills Troy Place, Troy

Buyer

Kerkstra Precast Inc., Grandville

Fuyao Asset Management LLC, Moraine, Ohio MD Research Park LLC, Troy

List is based on information from CoStar Group Inc., Crain's research, from published information or submitted by brokers, advisers or property owners. Crain's has tried to list all brokers involved in a transaction, but in some cases brokers may have been omitted. LIST RESEARCHED BY KIRK PINHO

An expanded version of this list is available with a Crain’s data membership at crainsdetroit.com/lists

INAUGURAL 2017-18 SEASON

DON’T MISS YOUR OPPORTUNITY

BECOME A MEMBER TODAY For more information, call 248-377-0100 or visit www.pistons.com

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 3 , 2 0 1 7

DEALS & DETAILS ACQUISITIONS & MERGERS

Detroit Lighting Products Co., Warren, a subsidiary of Detroit Radiant Products Co., a manufacturer of energy-efficient heating systems, acquired Lumerica Inc., Madison Heights, a manufacturer, developer and distributor of energy-efficient LED lighting fixtures. Website: reverberray.com. 

 Futuris Group, Oak Park, an automotive seating and interiors supplier, has acquired the headrest and armrest business of Kongsberg Automotive North American, Novi. Website: futurisgroup. com.

CONTRACTS

ManagedWay, Southfield, a cloud services provider, has established a point-of-presence site at Canada151 Data Centers in Toronto, Canada, enabling service between the U.S. and Canada via an international connection. Websites: managedway.com, canada151datacenters.com. 

EXPANSIONS

SRG Global Inc., Troy, a subsidiary of Guardian Industries Corp., a manufacturer of coatings on plastic for the automotive, commercial truck and consumer goods industry, opened an Innovation Center at 12620 Delta, Taylor. The 6,460-squarefoot center will feature areas for prototyping, testing and scale-up experimentation. Telephone: (586) 757-7800. Website: srgglobal.com.

Aldi, Essen, Germany, a supermarket franchise, has opened at 10017 Belleville Road, Van Buren Township. Website: aldi.us.

TUESDAY

MOVES

Leadership Oakland. Joyce Jenereaux, former publisher and president of the Detroit Free Press and Michigan.com, on leadership and business lessons she learned along the way. MSU Management EducaJoyce Jenereaux tion Center, Troy. $32 members; $36 nonmembers. Website: leadershipoakland.com.



PublicCity PR LLC, Southfield, a public relations agency, has moved from 24300 Southfield Road, Suite 101, Southfield, to 26700 Lahser Road, Suite 405, Southfield. Telephone: (248) 663-6166. Website: publiccitypr.net. 

NEW PRODUCTS

Radley Corp., Southfield, a software supplier for the automotive supply chain, announced iSC, which will be used for executing electronic business transactions such as order acknowledgements, advanced ship notices and invoicing. Website: radley.com. 

STARTUPS

 Maison Birmingham, Birmingham, a luxury design and build firm, has opened at 1020 S. Old Woodward Ave. Telephone: (248) 203-6006. Website: maisonbirmingham.com.



Deals & Details guidelines. Email cdbdepartments@crain.com. Use any Deals & Details item as a model for your release, and look for the appropriate category. Without complete information, your item will not run. Photos are welcome, but we cannot guarantee they will be used.

ADVERTISEMENT SECTION

ACCOUNTING Abigail Ward, CPA Senior Associate

ARCHITECTURE Raymond Phillips

Senior Project Manager Krieger Klatt Architects Krieger Klatt Architects is pleased to announce the promotion of Raymond Phillips to Senior Project Manager. In this role, Phillips is responsible for leading the design and technical process for both commercial and residential developments. In addition to overseeing various projects he will continue to mentor and lead young staff members of Krieger Klatt. Phillips has been with the firm since July of 2011.

ACCOUNTING Arielle Weir

Senior Associate The Siegfried Group Arielle Weir joins Siegfried’s Detroit Market as a Senior Associate. Weir embraces new opportunities and brings people together by inspiring trust and leading with courage. Weir earned her Bachelor of Arts in accounting at Michigan State University and was most recently a Senior Associate at EY.

CALENDAR

The Siegfried Group Abigail Ward, CPA, joins Siegfried’s Detroit Market as a Senior Associate. She constantly seeks to provide value and tackles projects and challenges with a positive attitude. Ward attended the University of Michigan, where she earned both her Bachelor of Business Administration and her master’s degree in accounting. Her most recent position was at PwC as a Senior Associate.

ACCOUNTING Marina Shahinyan, CPA Senior Associate

The Siegfried Group Marina Shahinyan, CPA, joins Siegfried’s Detroit Market as a Senior Manager. She applies her comprehensive technical knowledge and individual leadership skills to provide strategic insights and effective, timely resolutions. She attended the University of Michigan, where she earned her Master of Accounting, and Yerevan State University of Economics in Armenia, where she earned her Bachelor of Business Administration. Most recently, Shahinyan was a Manager at PwC.

APRIL 4

Staying Relevant in a Noisy World. 7:30-9 a.m. 

FRIDAY APRIL 7

The New Face of Branding. 8 a.m. Ann Arbor Spark. Features a panel of experts who have suc

cess communicating with audiences ranging from millennials to corporate executives. Speakers include: Tim Smith, CEO, Skidmore Studio and creative director, Daily Fuel; Pete Baker, creative director, Duo; Sean Hickey, COO, PWB Marketing Communications. EMU Student Center, Ypsilanti. $5. Email: fpgibson@ gmail.com

UPCOMING EVENTS



SE Women in Politics: The Path to Public Office.

5-7:30 p.m. April 10. Inforum. Hear from elected women office-holders about their political journeys. What does it take to run for public office and what does it take to stay there? Speakers: Ruth Johnson, Michigan Secretary of State; Sherry Gay-Dagnogo, former Detroit City Council staff member and state representative of Michigan’s 8th District serving northwest Detroit; and Anne Mervenne, president of Mervenne & Co. Moderator is Kelly RossmanMcKinney , CEO and principal of Truscott Rossman. Great Lakes Culinary Center, Southfield. $50 member; $70 nonmember. Contact: inforummichigan.org Luncheon Hosted by GM Women in Finance. 11:30-a.m.-12:30 p.m. April 12. Inforum. Speaker is Diana Tremblay, vice president of Global Business Services, General Motors. Renaissance Center, Detroit. Free. Website: inforummichigan.org.



BLM Leadership Summit on Fiscal Stability. Noon-5 p.m. April 17. Business Leaders for Michigan. Discussion on how to work together toward the future for Michigan and local communities. Radisson Hotel, Lansing. $50. Contact: Jennifer Hayes, phone: (313) 259-5400; email: jenniferh@businessleadersformichigan. com.



 Who Do You Trust? Leading in an Era of Populism. 11:30 a.m.-1:30 p.m. April 19. Detroit Eco-

nomic Club. Richard Edelman, president and CEO of Edelman, will discuss the 2017 Edelman Trust Barometer and actions business leaders can take to climb back from a position of deteriorated trust, and ultimately restore belief in a system that too many believe has failed them. MotorCity Casino Hotel, Detroit. $45 members; $55 guests of members; $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

Clean Planet Foods names first president

Clean Planet Foods named Farmi n g t o n Hi l l s - nat i v e Shawn Spencer its first president. S p e n c e r, 45, will lead Shawn Spencer the company’s strategic plan to create scalable and sustainable growth in clean food. He will report to founder and CEO Jack Aronson.

Supplier Hella appoints senior management Hella KGaA Hueck & Co., a German automotive parts supplier, has appointed new senior management members for its U.S. headquarters in Plymouth. Jörg Weisgerber, 46, formerly president of IEE Sensing Inc. for North America, will step into the existing role of CEO of Hella Electronics for North and South America. Timo Krokowski, 37, is moving from his role as managing director of Hella Vietnam based in Ho Chi Minh City to vice president of program management-electronics in the Americas. Another Hella employee, Christoph Söhnchen, 37, is taking a new post as vice president for program management-components.

Duggan adds Detroit journalists to staff Mayor Mike Duggan has hired two Detroit journalists to help communicate the city’s policy initiatives and get information to residents about the “small triumphs” in their neighborhoods. Aaron Foley Aaron Foley, previously editor of BLAC Detroit magazine, has joined the mayor’s office in a newly created position of neighborhood storyMatt Helms teller. Foley will focus on creating a new platform to deliver neighborhood news and information online and via a print publication, said Peter Kadushin, Duggan’s communications director. Matt Helms, a longtime reporter at the Detroit Free Press, has been hired as director of special projects and research in the mayor’s office, Kadushin said.

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 3 , 2 0 1 7

AUTO

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FROM PAGE 3

department, wrote in the March 15 notice to Integon that seven-day policies “as a whole are designed to ensure that coverage will expire in just seven days, after which drivers are likely to experience periods of interrupted coverage without mandatory no-fault insurance.” Yousif said state prohibition of seven-day insurance plans could lead to the closure of the L.A. Insurance’s 30 stores in Detroit, which populate the city’s main corridors. “It’s going to really hurt the business. All the stores in Detroit are probably going to end up closing,” Yousif said in an interview. “The people who were buying the seven-day (plan) are going to end up buying more fake insurance because they can’t afford real insurance.” It’s unclear how many seven-day auto insurance policies are sold in Michigan annually, because state agencies don't track sales data. The 30 independently-owned L.A. Insurance franchises in Detroit each sell between 50 and 75 seven-day auto insurance plans every month, Yousif said. Secretary of State Ruth Johnson’s office found 90,701 drivers submitted paper seven-day policies between July 2015 and June 2016, according to a report submitted to state lawmakers last month. But that figure does not include week-long insurance plans that may have been submitted to the state electronically by insurers, said Fred Woodhams, spokesman for the Secretary of State’s office. Johnson wants a change in state law forbidding seven-day policies for purposes of vehicle registration and requiring a minimum of 90 days of coverage to get a license plate and tags, Woodhams said. There are, however, “legitimate” uses of week-long insurance policies, Woodhams said, like transporting a summer vehicle to a northern Michigan cottage.

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Contact kbora@crain.com • (212) 210- 0750

JOB FRONT RETIREMENT SYSTEMS OF THE CITY OF DETROIT Joint Personnel Committee 500 Woodward Ave, Suite 3000 Detroit, Michigan 48226

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L.A. Insurance has 30 stores in Detroit that sell seven-day auto insurance plans, including this one at 13002 Gratiot Ave. Yousif said L.A. Insurance’s customers buy seven-day coverage because they can’t afford six-month or 12-month plans, which top $5,000 per vehicle annually in some Detroit zip codes. Insurers blame Michigan’s unlimited personal injury medical benefits for the cost of auto insurance in Detroit and across the state, which is higher than most other major U.S. cities and states. “The only reason we offer it in Michigan is we can’t sell a plan that’s $800 down,” said Yousif, whose Royal Oak-based company sells insurance in nine states for national carriers that include Progressive, GMAC Insurance and Titan Insurance, a subsidiary of Nationwide Insurance Co. Integon, a division of Winston-Salem, N.C.-based National General Insurance Group, has been selling its week-long “Jump Start Policy” insurance plan in Michigan since at

least 2011, according to public records. Yousif said Integon is the only national carrier that still writes seven-day auto insurance plans in Michigan. Titan Insurance stopped writing seven-day plans in Michigan on March 1, according to Yousif. In the March 15 notice to Integon, the state insurance official said the seven-day plan violates multiple sections of Michigan’s auto insurance laws. “The seven-day policy term … cannot satisfy the 30, 20 or 10-day minimum statutory periods applicable to every insurer termination/ nonrenewal of an individual nofault insurance policy, because the policy’s term ends and coverage terminates before any of these required notices can be effected,” Fossitt wrote. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

New Harbor Health begins under new ownership By Jay Greene jgreene@crain.com

Five months after Harbor Health Plan in Detroit announced plans to sell its Medicaid and Medicare HMO to Trusted Healthcare of Washington, D.C., the $16 million deal has closed, effective Feb. 28, said company officials. Harbor's newly hired CEO, Jesse Thomas, told Crain's that the health plan will embark on an ambitious growth plan over the next three years to add five wellness center clinics in Jesse Thomas: Wayne, OakTo embark on land and Magrowth plan comb counties. “In an era of high tech, the missing ingredient in the patient experience is high

touch,” said Thomas, former CEO of Molina Healthcare of Michigan from 2008 to 2010. “I always put myself in the day of a life of a member. ... There are a number of social determinants to health care. The idea of a wellness center is to work closely with members on activities they have in daily living.” Over three years, Harbor Health plans to hire more than 70 employees, including nurses, case managers and educators, to staff the wellness centers, said Thomas Duncan, Trusted’s CEO and a Detroit native. Harbor's administrative office has about 30 employees. Harbor Health was formerly owned by Tenet Healthcare Corp., parent of Detroit Medical Center. As part of restructuring, Tenet decided last year to exit the health insurance business. Tenet inherited Harbor Health, which formerly was called ProCare Health Plan Inc., when it acquired Detroit Medical Center in 2013 from Vanguard

Health System. Last June, Harbor’s Medicaid membership totaled 7,973, up from 6,515 on Dec. 31, 2015, and 3,300 in 2014. Its Medicare Advantage plan membership was only 636 members, up from 126 in 2015. Duncan said Harbor’s Medicaid and Medicare membership has grown since last year and expects to increase over the years as it develops new plans and serves its current members. Thomas, who was hired March 22, said he is still in the evaluation process of Harbor Health and will take time to determine immediate needs of the Medicaid HMO. “I want to spend time with the team and see where the areas of opportunity are. There are always areas of opportunity,” he said. “We want to get the right care at the right time. We need to work with community partners in the three counties to have those wellness centers geographically dispersed.”

JOB TITLE: Executive Director - Retirement Systems SALARY: $150,000 - $200,000 (Starting salary is dependent upon qualifications and experience) The City of Detroit has two distinct and separate retirement systems: the General Retirement System; and the Police and Fire Retirement System. The legal and fiduciary responsibility for the general administration, management, and proper operation of the Retirement Systems, and for making effective their provisions, is vested in each Retirement System’s Board of Trustees. The Retirement Systems provide services and benefits to approximately 9000 active members and 12,000 retirees and beneficiaries. Currently, combined Retirement System assets are in excess of $4 billion. Each Retirement System is comprised of two distinct plans: a legacy traditional defined benefit plan and a new hybrid defined benefit plan. Information about each Retirement System is available on the RSCD website at www.RSCD.org. Please refer to the website for the full job description and benefits. Submit information for this job posting to: jobs@rscd.org

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GILBERT FROM PAGE 1

In our hourlong conversation, Gilbert never did connect the dots. He never did tell me (nor has he told any journalist, as far as I can tell) how his Russian grandfather warped his father, or how his father, the owner of a bar at Seven Mile Road and Woodward, treated Gilbert’s two half-siblings and brother. He did say he was determined to be closer to his own five children: “It’s almost like correcting course, and it’s like correcting nature — getting back to equilibrium.” Gilbert also suggested his upbringing played an indirect role in his business success. “When you talk to successful entrepreneurs,” he said, “95 percent of them come from a messed-up childhood.”

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 3 , 2 0 1 7

Gilbert still can’t get over his son’s composure. “I mean this, and I know I’m his father, but he is the single-most happy human being I know.”

Nick Gilbert

he oldest child of Dan and Jennifer Gilbert is 20-year-old Nick, who was born with neurofibromatosis, a nerve disorder that causes tumors to grow anywhere in the body. Nick’s tumors grow in his head. Diagnosed at 15 months, Nick has been on and off chemotherapy for 15 years or so. He had life-saving brain surgery at age 10. He is nearly blind. I visited Nick at Michigan State University, where he is a junior studying business. “He’s the best dad ever,” he said of his father, Dan. “He’s my best friend.” Such words seem trite unless you’ve spent time with Nick, a smart, witty, perpetually happy young man who found some measure of fame representing his father’s Cleveland Cavaliers at the 2011 and 2013 NBA drafts, where the team won the lottery to pick first. After the 2011 draft, a reporter asked Nick to explain why his father considered him a hero. “I mean,” the 14-year-old said, “what’s not to like?” Nick told me there’s nothing not to like about his father, who made it home for bedtime most nights and found time to coach his kids’ sports teams. “He had my back,” Nick told me. “He’d get crazy with the refs.” At MSU, Nick gets help navigating his course load from school disabilities specialist Angela Sebald. She told me Nick constantly texts and talks with his father about sports and school. Recently, Nick called Dan for advice on a sports management exam involving the salary cap system. After 45 minutes, Dan ended the conversation with a joke aimed at curbing his son’s high expectations by acknowledging them. “No pressure,” the father said, according to Angela and Nick, both of whom were on speaker phone with Dan. “But you better ace this.” “You represent the Cavs and Detroit and the Gilbert family,” Dan continued. Nick and Angela laughed. “You could almost hear Dan smile,” she said.

Dan Gilbert

hen Nick was diagnosed with the rare disease, Dan Gilbert’s first reaction was typical of most parents: “Why me? I mean, I feel blessed otherwise, but you go through that.”

DAVID DOW/NBAE VIA GETTY IMAGES

Cleveland Cavaliers owner Dan Gilbert enjoys a private moment with his son Nick after winning the number one overall pick in the 2011 NBA Draft. Then came the hard reality of the work ahead. “I talked to a lot of people whose kids have cancer, and you really focus on the process of how-to and the next steps,” he said. Gilbert interviewed doctors around the country, read everything he could about the condition, poured millions of dollars into research and support for those with the disease, and joined the Children’s Tumor Foundation board. In other words, he treated it like a business problem — throwing everything he had at it. “Yeah, maybe part of that is an escape because you don’t want to feel all the bad stuff,” he said. For Gilbert, a master of his universe, Nick’s condition was a reminder of life’s limits. “What does money really mean? All the money in the world can’t fix this thing he’s got. Maybe one day, but it can’t now.” Later, he told me Nick’s genetic disease “served as a gut check. I

Nick holds his head high. “This shit’s serious, but I’ve got the right people behind me. My family and my doctors are terrific.”

never understood when people were arrogant, because there is always an ultimate equalizer that everyone is going to die. Why are you better than him? You’re all going to be dirt, so when things like this happen, it reminds you to keep your head up — there are things you don’t control.”

Nick Gilbert

ick holds his head high. “This shit’s serious, but I’ve got the right people behind me,” he told me. “My family and my doctors are terrific.” His father calls him the most resilient and optimistic person he knows — and Nick takes pride in that impression. “My dad always says I look at chemo as being no big deal.” Even when he speaks in clichés, Nick is sincere and serious. “You live the life you’re given,” he shrugged. “That’s just the attitude I was born with. You gotta do what you gotta do. Gotta get shit done and move on.” Nick says he got his optimism from his father. “He says he fails every day, but he finds success in every failure.” At age 10, Nick underwent eight hours of life-saving surgery to remove a tumor from the base of his brain. His father told him about the need for emergency surgery on, of all days, his birthday. “When I had brain surgery, all I could think about was, ‘When I wake up, I’ll get whatever I want.’” Did you? He laughed. “Basically, yes.”

Dan Gilbert

ick’s father will never forget that day a decade ago. The watery growth was not easy to remove. “The surgeon told me it was like taking out the inside of a grapefruit with tweezers,” Gilbert said. A few minutes later, the father choked up telling me about his son’s reaction to the surgery. “Let me give you this crazy story, and I don’t want to start crying but ...” And then he told me about the flight home after the Washington, D.C., operation, and how Nick refused to feel sorry for himself. Unlike his father, the son never asked, “Why me?” Still, Dan wanted to help Nick make sense of his rare condition. So he told his son, “You drew a card, and it was just an unlucky card. You can’t really have a say in the cards you get. You just get a say in how you play them.” Nick didn’t need to hear that. At 10, he already knew life’s game is best played with a confident smile. “There is only one card I could draw where I have a Dad who owns an NBA team,” Nick joked to Dan. “So I’m pretty good overall.” Gilbert still can’t get over his son’s composure. “I mean this, and I know I’m his father, but he is the single-most happy human being I know.”

Nick Gilbert

asked the 20-year-old what he hopes to do with his MSU degree. “A lot,” he replied. I pressed the question until he narrowed it down: marketing, he said, ideally in the areas of sports, casinos, commercial real estate and music. “Maybe take

over everything my dad has built.” I raised a fatherly eyebrow. Nick quickly added, “(My dad) says I’m going to have to work for it. He’ll put me in the mailroom.” There is one thing Nick definitely inherited from his father: passion and persistence. “When I want something,” he said, “I annoy the shit out of people until I get it.”

Dan Gilbert

asked Dan what Nick wants to do when he grows up. He nodded to a sea of Quicken cubicles outside the glass walls of his office and said, “He just got into the MSU business school so I think he wants to be a part of this in some way, shape or form.” But the father said he won’t let his kids be treated special at home or at work, because he knows entitlement has ruined any number of rich children. Humility awaits Nick and his siblings should they choose to join the family company. “They have to start at the bottom,” Gilbert said. Which is not a scary thing at the Gilbert household, because the father preaches to his kids that success cannot be measured in dollars or promotions. “For a lot of people, when they do all these things — when they do this or that, when they say, ‘If I get to here or there, then I will be happy.’ That is just not true.” A truly happy person is blessed with the innocence to never fear failure and the resilience to never lose hope, according to Dan Gilbert. By those measures, Nick Gilbert is already an extraordinary success. “Oh man, he is truly my hero,” father said of son. “He is so fricking happy.”

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 3 , 2 0 1 7

PROJECT FROM PAGE 3

Initially the vision of a Central High principal, the new innovation center will be located in the Durfee Elementary-Middle School building next door to Central High School after grades K-8 move to the high school in June. The Durfee center will go well beyond previous Life Remodeled projects. The expansive school will be converted into a community hub with a gymnasium and auditorium for public use, on-the-job-training for high school students, entrepreneur education and new business investment through a developing social investment fund. Aside from those programs, early plans envision a maker space, new recreation center and a multipurpose auditorium with the potential to convert to a market space on Saturdays where residents can buy and sell things grown in the community.

Investment fund A group of Jewish alumni of Central High are pulling together like-minded investors to create a fund to spark new business creation in the community, said Romy Kochan, president and managing partner of the fund’s developer, Gingras Global Inc., which plans to open a location in the new center to both manage the fund and measure tenant engagements with students. The fund will provide high-risk, early-stage and second-stage funding, Kochan said, with a goal of raising $2 million to $5 million in the first round. The aim? To build on the job-training and entrepreneurial support offered at the new center. “It’s unusual (to put) private capital that’s not foundation money into a community like this that no longer has a commercial base,” she said. Businesses left the neighborhood long ago, but the locals believe it’s possible to bring business back, Kochan said. “These students who have been left behind ... will now have an idea of what’s possible for them,” she said.

Commitment to create jobs As it waits for the end of the school year when work can begin on Durfee, Life Remodeled has been recruiting tenants to bring hands-on educational programs that enhance career paths for students at Central and other Detroit high schools. Westland-based Toarmina’s Pizza Inc. is among the first to commit to space in the community innovation center. Founder and President Lou Toarmina said he has watched over the past few years as Detroit neighborhoods changed after Life Remodeled came into them. But he still didn’t see job opportunities. “It seemed like that was the missing part ... business had to come back, and there had to be some jobs for people,” he said.

“It seemed like that was the missing part ... business had to come back, and there had to be some jobs for people.”

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Lou Toarmina

Toarmina’s has made a commitment to open a locally owned location in every neighborhood where Life Remodeled works. The first opened in midMarch in the Denby neighborhood. The second franchise will open on the new center’s first floor. Toarmina is waiving license and royalty fees for those locations and asking family, friends and business acquaintances to serve as “donor investors,” covering startup costs for the new businesses in exchange for a 10 percent return. New licensees keep their profit, but the percentage that usually gets paid to Toarmina’s for royalties goes instead to pay investors. Once that debt is paid, Toarmina said he envisions the 4-percent royalties possibly funding subsequent locations in other Life Remodeled neighborhoods.

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More tenants to come Life Remodeled is also talking with several others about bringing programs to the center, according to Lambert, including Build Institute and Bamboo, Detroit Training Center, Junior Achievement of Southeastern Michigan, Cleary University and The Empowerment Plan. Typically, the nonprofit brings about $5 million of investment to a neighborhood with support from corporations, nonprofits and churches, foundations and individuals. This year Lambert estimates the investment will be at least $2.5 million cash and $5 million to $7 million in in-kind materials and volunteer labor donated by local companies. The list of organizations supporting Life Remodeled’s efforts is long, with names including: Bodman PLC, Barton Malow Co., Detroit Historical Society, BASF SE, Michigan Economic Development Corp. and Michigan Environmental Council, Taubman Centers Inc., Marathon Petroleum Corp., Wallside Windows, Ikea, Lowes, Michigan CAT, Weingartz Supply Co., Michigan Muslim Community Council, United Way for Southeast Michigan and Greening of Detroit. Though corporations have been the biggest supporters in previous years, several are considering larger cash contributions of $500,000 or more this year, Lambert said. The project is drawing high interest from corporate supporters “because they see it has strong potential to … make more impact in education and job creation than any project we’ve ever done,” he said.

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Adient to work with Boeing on airplane seating By Automotive News

Only a few months after spinning off from Johnson Controls Inc., automotive seating supplier Adient Ltd. is looking to lift its business to 30,000 feet by collaborating with The Boeing Co. The partnership with Boeing, announced Monday, marks Adient’s entry point into the commercial aircraft market, and is part of the company’s push to expand into adjacent mobility markets. Adient spokesman David Roznowski said the company expects to excel in aircraft interiors, but won’t neglect its automotive roots. “As we expand into adjacent

markets, we will share our knowledge internally and with our partners to improve the experience of passengers in the air and on the ground,” he said in an email. “Autonomous driving … case in point.” The company in late 2016 announced plans to put its headquarters in downtown Detroit's Marquette Building, spending $75 million to buy and renovate it to house about 500 employees. Roznowski said Adient plans to work with Boeing on an ongoing basis, drawing on its experience with vehicles in their goal of functional improvements for airplane seating. “The company has advanced

engineering, design and testing capabilities that allow us to explore ways to improve passenger comfort,” he wrote. Adient, citing estimates from Counterpoint Market Research, said the aircraft interiors could reach $21.7 billion by 2025 — an annual growth rate of 4.3 percent from 2016 to 2025. The industry is consolidated among a small number of providers, Adient said. Adient CEO Bruce McDonald said in a statement: "Through discussions with Boeing, we believe there's an opportunity for Adient to raise the bar on the aviation passenger experience, building on our leadership in the automobile seat market."

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Tigers strategy to stem gate slide: Win. But also hats, shawarma, and Jedi Miggy By Bill Shea bshea@crain.com

The Detroit Tigers’ strategy to reverse a four-year attendance slide begins with winning games, but also relies on a wild mix of specialty ballcaps, deep dish coney dog pizzas, shawarma, and a tiny Miguel Cabrera dressed as Jedi knight. While Detroit returns a roster largely the same as the one that won 86 games a year ago, and was knocked out of the playoff hunt on the season’s final weekend, the front office is keenly aware that nearly 7,000 fewer fans a game came to Comerica Park in 2016 compared with 2013. The Tigers averaged 31,173 fans per game last season — better than the Major League baseball average of 30,097 — but to stanch further declines the team is deploying a marketing strategy that extols the enjoyment of a day at the ballpark, its accessibility, and value. The marketing and promotional efforts are intended to bolster what is hoped to be a winning team. Wins, and a playoff run, are the chief drivers of attendance. Fans can be enticed to games with perks, however. Bobblehead giveaways can goose gate numbers by several thousand, and among this year’s bobblehead promotions will be superstar slugger Miguel Cabrera made to look like “Star Wars” Jedi character. The doll is still being designed, said Tigers Vice President of Marketing Ellen Zeringue. Detroit has found that ticket bundles, in which fans are guaranteed a hat or T-shirt or other perk with the price of a ticket (rather than a giveaway to the first X-number of fans through the gate), have been effective tools to maintain or increase attendance, Zeringue said. The team uses bundling mostly to aid lower-attended weekday games, she said. This season, which begins today at Chicago and opens at Comerica Park on Friday, the Tigers have expanded the number of college hat-ticket bundles to 11 games. The bundle, launched three seasons ago, includes a Tigers hat in the colors of a college with its logo on one side. Among the schools added are Madonna University and the University of Toledo, and the University of Michigan ticket/hat bundle will have two options: One with the block M or one that uses the university’s bicentennial logo. There are anywhere from 1,000 to 3,000 such bundles, each in a variety of prices, for each of the college games, said Dwain Lewis, the Tigers’ director of group sales. The bundles typically have a charitable donation for a cause built into the price. Other hat-ticket bundles this season are for Yoopers and Canadian fans. In addition to ticket deals, the team is increasingly using social media for in-game promotions, Ze-

Slide in Tigers attendance Detroit has seen its per-game attendance decline by nearly 7,000 fans per game over the past four years.  2016: 2,493,859

(31,173 per game average)  2015: 2,726,048

(33,654 per game average)  2014: 2,917,209

(36,014 per game average)  2013: 3,083,397

(38,066 per game average) BILL SHEA/CRAIN’S DETROIT BUSINESS

A giant Victor Martinez bobblehead welcomes guests to the Tiger Club at Comerica Park.

TYLER CLIFFORD/CRAIN’S DETROIT BUSINESS

Chicken shawarmas will be available at Detroit Tigers games at Comerica Park this season. ringue said. The advent of platforms like Twitter and Instagram are the biggest marketing development in her 17 seasons with Detroit, she said. The team also uses other ticket packages, like weekday family packages, and kid-focused efforts such as running the bases on Sundays, to keep up sales. “It’s about adding as much value as we can, and making sure that fans understand this is an accessible ballpark,” Zeringue said. “We can’t control wins and losses, but can make sure people feel like when they come here they’re getting an affordable ticket with an added value.” Perks, freebies, and merchandise cannot offset a wave of fans abandoning a losing team, however. The Tigers generate among the best local TV ratings in all of baseball, but the slow bleed at the gate hits the team

in the pocketbook at a time when it’s spending more than $200 million on players. The roster will rely on aging but still wildly talented stars such as Cabrera, ace Justin Verlander, and designated hitter Victor Martinez, but also younger players such as last year’s American League Rookie of

the Year, pitcher Michael Fulmer. The team suffered a setback when right fielder J.D. Martinez, 29, sprained a ligament in his right foot in March, and he’s isn’t scheduled to have his cast removed until today. He likely will be sidelined until late April or early May, depending on what the doctor’s find once the cast is off. As a team, the Tigers were thirdbest among MLB’s 30 clubs with a team .267 batting average and were fourth with a .772 OPS average, which is a combination of on-base plus slugging percentages. In other words, despite the perception of an anemic offense, Detroit could get on base in 2016. They didn’t score at that pace, however, recording 750 runs, 11th-best in baseball and sixth best in the American League. Still, they scored one or no runs in nearly 19 percent of their games. Of their games in which they scored a single run, they were 1-17. Perhaps the biggest obstacle in 2016 was the Cleveland Indians. Detroit lost 14 of 18 games against their division rival, and was out-scored 106-71 by Cleveland, which went on to the World Series. Beating Cleveland more often could help keep the stands filled. An analysis by Crain’s of the Tigers’ player spending compared with their record since 2011 revealed a growing financial inefficiency that’s exacerbated by the three years of attendance declines. With a $205.8 million payroll last season and 86 victories, the Tigers spent $2.39 million on players for each win, compared with $1.8 million on average for the rest of Major League Baseball. In contrast, three of the four teams in the American League and National League championship series won more cheaply than Detroit, too. The Indians, who won 14 of 18 against the Tigers last season, spent nearly $1.2 million per victory less than Detroit to win games in 2016. In the long-term, General Manager Al Avila is spending money and making hires to grow the team’s advanced analytics efforts as part of a strategy to develop talent rather than signing expensive free agents, which had been the business playbook under former owner Mike Ilitch, the billionaire pizza baron who died in February at age 87. His heirs now run the team. Bill Shea: 313 (446-1626) Twitter: @Bill_Shea19

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: Beztak Cos.

Marcus & Millichap Real Estate

Detroit Economic Club

Oakland Technology Park

Detroit Lions

Palace Sports & Entertainment

Detroit Pistons

SD Capital LLC

Detroit Red Wings

Trinity Health

Detroit Tigers

Triple Properties

Life Remodeled

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THE WEEK ON THE WEB MARCH 25-31 Ford to add $350 million to previous local investments

ord Motor Co. will add $350 million in new investments at two Michigan assembly plants on top of previously pledged spending. The automaker said Tuesday that it will invest $200 million in its Flat Rock Assembly Plant for an advanced data center. It will also spend $150 million at its Michigan Assembly Plant in Wayne, in addition to what was pledged two years ago as part of the automaker’s contract with the UAW. The latest planned outlay at Flat Rock follows a $700 million spending plan announced by CEO Mark Fields in January. Both of this year’s announcements at Flat Rock — which builds the Ford Mustang and Lincoln Continental — are separate from a $400 million pledge for the factory that was part of the 2015 UAW deal. The automaker also reaffirmed a $150 million investment in its Romeo Engine plant.

COMPANY NEWS: J Avalon International Breads will open the doors of its new Detroit café and bakery near Campus Martius on April 14. It will serve madefrom-scratch sandwiches, breads, pizza and baked goods along with coffee, beer and wine. J After 50 years in business, the Big Boy restaurant on Jefferson Avenue in Detroit near Belle Isle will be demolished, with developer The Platform LLC buying the 1-acre lot on East Jefferson Avenue and East Grand Boulevard from Curis Enterprises Inc. J Big-time Michigan craft brewing companies Bell's Brewery Inc. and Founders Brewing Co. have contracts to sell at the White Sox’s Guaranteed Rate Field this year, along with Goose Island Brewery of Chicago and Pabst Brewing Co., among others. J The 21,000 square feet of retail space on the first floor of the Park Shelton condominium building, which is 89 percent occupied, is up for sale in Midtown. J Detroit Surf Co. will move to a new space in Detroit’s Midtown in May after serving customers out of the Rust Belt Market in Ferndale for several years. Owner Dave Tuzinowski said it was “time for our own retail store.” J Five months after Harbor Health Plan in Detroit announced plans to sell its Medicaid and Medicare HMO to Trusted Healthcare of Washington, D.C., the $16 million deal has closed, effective Feb. 28. J The first round of this year’s Red Bull House of Art resident artists are

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

$7.5 million

The state loan an 8.4-acre development in Brush Park headed up by Dan Gilbert received to complete a portion of the City Modern project, which is expected to cost more than $100 million.

130

The number of employees HopCat plans to hire to staff its upcoming three-story Royal Oak restaurant and bar. The location is set to open May 20.

$350 million The amount Ford Motor Co. announced it will invest in two Michigan assembly plants, on top of previously allocated spending.

set to host a public exhibition next month at its basement gallery in Detroit’s Eastern Market. The art incubator provided three artists housing, tools and space for three months to create art for the exhibition. J An owner of Jolly Pumpkin Artisan Ales is expected to open a restaurant in a vacant Midtown building as part of a $1 million Michigan Strategic Fund loan. Other financing for the project includes a $4.54 million loan from Washington, D.C.-based Capital Impact Partners. J Under Armour Inc. said it will open its 17,000-square-foot downtown Detroit “Brand House” on April 13, offering apparel and footwear with its latest technology and designs. J A building in the Milwaukee Junction neighborhood best known for the colorful mural on its west side of a “bleeding rainbow” is under contract to Peter Cummings’ and Dietrich Knoer’s Detroit-based The Platform LLC development group. The Platform declined to comment on its plans for the building. J Weingartz Supply Co. and Ball

Equipment are consolidating their e-commerce marketing and fulfillment divisions in a new joint venture agreement. They will work in a 45,000-square-foot warehouse in Chesterfield Township, which the companies aim to make operational by mid-April. J Detroit Medical Center received federal approval for corrective action in response to a surprise inspection in January in which Medicare hospital inspectors found dirty instruments, lack of sanitation and insufficient staffing.

OTHER NEWS: J Applications for a share of $3 million in grants are open for the fifth annual Knight Arts Challenge Detroit from the John and James Knight Foundation. The program seeks out ideas that engage and enrich the city through the arts. J Michigan Supreme Court Justice Robert Young plans to retire effective April 30 and return to his former law firm, the Dickinson Wright firm. J The Michigan Urban Farming Initiative will turn the site of a razed home in Detroit’s North End neighborhood into a rain water harvesting cistern and recreational space, using $100,000 in corporate grants. J Dearborn-based ACCESS will honor renowned investor Mohamed El-Erian and retired surgeon Rashid Abdu, M.D., with its 2017 Arab American of the Year Awards at its 46th annual dinner next month.

OBITUARIES: J Detroit advertising icon Maurice “Bud” Lezell, known as Mr. Belvedere to millions of TV viewers and radio listeners, died of pneumonia at age of 95 in Sarasota, Fla. Lezell is known for his 1960s and ’70s commercial and ads that impressed viewers with its “Tyler 8-7100” phone number and catchphrase “We do good work.” J Longtime Detroit reporter and news anchor Rich Fisher died of cancer at 67. Fisher was an anchor and reporter at WXYZ-TV for 12 years before he moved to Detroit Fox affiliate WJBK-Channel 2.

If you have an idea to engage and enrich Detroit through the arts, applications for a share of $3 million in grants are open for the Knight Arts Challenge Detroit. Busk in the Cut, above, was a 2016 Knight Arts Challenge winner. To apply, candidates must submit a 150 word proposal about a compelling arts idea. The deadline to apply is April 28. Visit knightfoundation.org for more information.

RUMBLINGS

ISTOCK/GETTY IMAGES

Technology in Motion, Sept. 6-8 at Cobo Center in Detroit, will tout the innovative spirit of automakers, parts suppliers and tech companies.

Technology in Motion planned at Cobo Center A three-day, late-summer trade show will tout Southeast Michigan as a center of advanced automotive technology. The innovative spirit of automakers, parts suppliers and tech companies will be the focus of the first Technology in Motion event, Sept. 6-8 at Cobo Center in Detroit. The forum will showcase the region’s and the industry’s role in shaping connected cars, autonomous driving, new forms of mobility and powertrains of the future. It will link startups and ride-sharing companies with the Detroit area’s traditional strengths in automotive higher education and R&D. A spotlight will be put on automotive employers’ success in hiring young talent. “No matter where the technology is invented, it is refined, tested and deployed within 100 miles of Detroit,” said David Graff, a co-founder of Technology in Mo-

tion and a vice president at MSX International Inc. “It all happens right here, and no one knows it.” MSX will present the summit in partnership with Crain Communications Inc., publisher of Automotive News and Crain’s Detroit Business. The first day will feature media presentations from exhibitors, similar to an auto show press day. The second and third days will include a conference with four panel discussions. Speakers will include Matt Simoncini, CEO of Lear Corp., and Mike Ableson, vice president of strategy at General Motors. Both companies are Technology in Motion exhibitors and sponsors. Plans call for a “Shark Tank”like competition to wrap up the event. For information, contact Trisha Stephens at trisha@timdetroit. com or (248) 829-6042.

Detroit Big Boy near Belle Isle to be demolished After 50 years in businesses, the Big Boy restaurant on Jefferson Avenue in Detroit near Belle Isle will be no more after one last hurrah on Easter Sunday, traditionally one of the most popular for the Warren-based chain of family diners. Detroit-based developer The Platform LLC is buying the 1-acre lot on East Jefferson Avenue and East Grand Boulevard from Curis Enterprises Inc., a Detroit-based real estate firm, according to a news release from The Platform. Terms of the purchase were not released. The Platform plans to demolish the restaurant as part of a larger project in the Islandview neighborhood. The Platform, whose co-principals are Peter Cummings and Dietrich Knoer, is involved in several other development projects in the city, including in the Milwaukee Junction and TechTown areas and the Fisher Building. The Jefferson Avenue Big Boy location was founded by George Curis in 1967 right after the Detroit

uprising, according to an archived news release from the company. It is the only Big Boy in the city. The Platform has also entered an agreement with intention to acquire five parcels of land across the street from the Detroit Land Bank Authority. The development plan there includes renovation of a former nursing home designed by well-known architect Louis Kamper and built in 1898, as well as rehabilitation of three other historic properties and new construction, according to the release. The historic buildings across the street will be turned into residential and affordable housing, and the empty parcels will be developed for retail and possibly for more residential space. The architect for the project is Detroit-based Hamilton Anderson Associates. Plans for the land at the Big Boy site are not finalized, but in the interim after demolition of the building, The Platform is weighing everything from a food truck court to a farmers market, a company spokesman said.