Crain's Detroit Business, April 10, 2017 issue by Crain's Detroit Business

APRIL 10 - 16, 2017

Detroit City FC looks to turn pro

Asia Newson: Of candles, family and a burning flame

Semi-pro club talks with investors on moving up in the soccer world.

Ron Fournier column. Page 6

Page 3

Insurance

The 7-day insurance solution could be difficult

Medical marijuana in Michigan

Growing demand

Budding industry boosts cost of space for cultivation

By Kirk Pinho kpinho@crain.com

Ron Boji knows a few things about real estate and making green, but less about growing it. Yet that wouldn’t preclude the Lansing-based developer and Orchard Lake resident from turning a hefty profit by leasing space in up to seven of his roughly 25,000-squarefoot industrial buildings across the state to medical marijuana growers, capitalizing on the shortage of space available to those working in the state's budding pot industry. It's not just Boji, president of The Boji Group, who sees the chance to make cash as growers look far and wide for suitable buildings to set up shop. Real estate brokers say small, nondescript buildings in industrial areas are changing hands at higher prices because the areas where growers can operate are restricted due to local ordinances, which often require them to be at least 500 feet — although more commonly, 1,000 feet — away from things like schools, churches and residences and must be in specific industrial areas. Therefore, owners can mark up prices significantly beyond what a similar building just down the street might demand. Brokers and legal experts pointed to communities like Warren, Troy, Commerce and Shelby townships, Livonia, Detroit and others as being prime targets for growers. Michael Komorn, a Farmington Hills-based attorney and medical marijuana advocate, said his law office is representing several growers and others involved in the medical marijuana industry. They have seen real estate purchase prices double and rents tri-

By Chad Livengood clivengood@crain.com

Inside Local patients: The number of medical marijuana patients in Metro Detroit compared to the state. Page 19

ple, he said in a statement. “It would not surprise me if this trend continues as this new industry evolves,” he said.

High demand Boji knows there is money to be made. He has 10 industrial buildings that he says are underutilized around the state — seven of which are in Southeast Michigan — totaling about 250,000 square feet. SEE MARIJUANA, PAGE 19

ILLUSTRATION BY DAVID KORDALSKI

Tamika Fizer entered an L.A. Insurance office on Detroit’s northwest side last Wednesday afternoon with one objective: obtain insurance to get her 2012 Chevrolet Impala registered to drive. By this Wednesday, the 33-yearold Oak Park woman’s car will be uninsured — again. Fizer purchased a $221 seven-day “Jump Start” auto insurance plan from L.A. Insurance and acknowledged she won’t be driving with legally required liability coverage for the remaining 51 weeks of her vehicle’s registration. “To be honest, I usually only do it when it’s time to renew my tabs because it’s too expensive to pay monthly,” Fizer said of buying a seven-day insurance plan. The policies, a legal workaround for people who won’t or can’t pay for continuous coverage, are now facing a potential ban, highlighting crushing insurance costs in Detroit and neighboring cities and prompting the policies’ sellers and buyers to say they’ll just find other workarounds. In Detroit and some of the city’s neighboring communities, weeklong insurance plans are a cure for year-round coverage that’s routinely ranked the most costly in the country — and double or triple the cost for a similar vehicle in Detroit’s farflung affluent suburbs. “They make it impossible for working-class and poor people so that you almost have to break the law,” said Derrick Cowser, a 45-yearold commercial truck driver from northwest Detroit. SEE INSURE, PAGE 20

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MICHIGAN BRIEFS Michigan makes little progress on poverty To make ends meet as a four-person family in Michigan, with a child in preschool and a baby at home, it’s practically mandatory that both parents work full time and make at least $14 per hour each. A single breadwinner in that same family would have to make at least $28 per hour. And that’s just to afford basic living needs, like housing, child care, transportation and medical bills. Yet Michigan’s job market is disproportionately made up of lowwage jobs — 62 percent of the state’s jobs in 2015 paid less than $20 per hour, according to new research on the state’s working poor to be released Tuesday by the Michigan Association of United Ways. Despite declining unemployment and rising wages over the early part of this decade, the share of Michigan residents in poverty or considered working poor has remained stubbornly persistent. Forty percent of Michigan’s 3.8 million households, or more than 1.5 million, either had incomes below the federal poverty level or didn’t earn enough to make ends meet in 2012 and 2015, the most recent data available, according to the report,

which focuses on a population United Ways researchers coined ALICE, for asset-limited, income-constrained but employed. A quarter of all Michigan households can be considered ALICE. That fraction remains the same since the United Way’s first ALICE report, issued in September 2014, even as households in poverty dipped slightly while the size of Michigan’s ALICE population grew slightly. The group known as ALICE earns too much to meet the federal definition of poverty, but not enough to afford necessities. An unexpected car breakdown or doctor’s visit can lead to financial stress in an ALICE household and create barriers to employment that ultimately can prevent someone from moving up the income ladder. While the updated data signal progress in moving people out of poverty, “we’re just getting started” on lifting the working poor into stability, said Nancy Lindman, interim CEO of the Michigan Association of United Ways.

Snyder, MDOT to start infrastructure data collection pilot Gov. Rick Snyder signed an executive order creating a pilot program

INSIDE BANKRUPTCIES

and more efficiency on infrastructure projects, Snyder said at a press conference Monday at the Michigan Department of Transportation Operations Center in Detroit. The pilot will take place over the next year, after which the state will look to roll it out across Michigan. Snyder already spoke about this plan in his State of the State address in January. The asset management system would save money in the long run, Snyder said, as the state looks to close an infrastructure spending gap of $4 billion per year.

State gets $3.8 million for emergency preparedness

CRAIN’S DETROIT BUSINESS

Crumbling bridges are among the many infrastructure needs in Michigan waiting to be addressed.

that aims to connect various infrastructure data across Southeast Michigan and the Grand Rapids area — and later, statewide. The central database would identify and connect data belonging to municipalities, governments and utilities, allowing for collaboration

Michigan has received $3.8 million from the federal government to help improve the state’s emergency preparedness in health care, The Associated Press reported. The state says the funding will be distributed to hospitals identified in Michigan’s Special Pathogen Re-

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DEALS & DETAILS

KEITH CRAIN

OPINION

PEOPLE

RON FOURNIER

RUMBLINGS

WEEK ON THE WEB

COMPANY INDEX: SEE PAGE 22 sponse Network. The network was established in 2014 to strengthen emergency responses to any new or emerging threats to public health. Michigan Health and Human Services Chief Medical Executive Eden Wells, M.D., said that “with new infectious diseases being identified around the world, this serves as a reminder of the importance of having prepared health care facilities and partners for quickly responding to these threats.”

Correction J A graphic on Page 3 of the April 3 issue should have said that Nestle is seeking to increase its water withdrawals by 1 1/2 times, not 2 1/2 times. A previous increase has already been approved.

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Building the electric transmission infrastructure that will power the future. www.itc-holdings.com

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Workforce

Experts expect uptick in tense H-1B season

By Dustin Walsh dwalsh@crain.com

Local experts are predicting a record amount of H-1B visa applications this year and employers are upping their commitment to new foreign workers as the White House threatens to ratchet down on immigration policy. The five-day application season commenced last week for skilled

worker visas, known as H-1B visas, that allow employers to bring in foreign workers for three years to fill jobs they can’t fill with qualified U.S. workers. The government-sanctioned lottery process has always been a topic of political debate — proponents find it necessary for innovation and development, while opponents view it as a scheme to unseat

American workers with cheap foreign labor. But tension over the process has been amped up by President Donald Trump’s tough talk on immigration and press releases from both the Department of Justice and U.S. Citizenship and Immigration Services warning companies of increased investigations. Ann Arbor-based software firm

Llamasoft submitted 12 H-1B visa applications for the 2018 calendar year, up from other years to get ahead of any changes to the program under the current administration, said Donald Hicks, president and CEO. “Our employees, those not born in the U.S., are pretty much terrified,” Hicks said. SEE VISAS, PAGE 21

“We’ve made the decision to expedite the process by immediately filing for an H-1B instead of waiting like we normally do.” Donald Hicks, Llamasoft

Sports business

Health care

Regulations, costs among issues small biz has with ACA By Jay Greene jgreene@crain.com

COURTESY OF DETROIT CITY FC

The semi-pro Detroit City FC soccer club plays at Keyworth Stadium in Hamtramck.

Detroit City FC bid to turn pro hinges on outside capital By Bill Shea bshea@crain.com

The owners of the cultishly popular semi-pro Detroit City FC soccer club want to move their team into a professional league as soon as 2018, but they say they need an infusion of capital first. That’s because they’ll need millions of dollars to cover an expansion fee to buy into a pro league, and to cover an expense they’ve not had since launching the club in 2012:

player salaries. As a semi-pro team in the National Premier Soccer League, a fourth-tier organization in American soccer’s organizational pyramid, Detroit City doesn’t pay it players. The amateur club, which begins its 2017 exhibition matches this weekend, has an operating budget of more than $1 million this season, DCFC co-owner and COO Todd Kropp said. It played last season to sold-out crowds of 5,255 a game at Ham-

tramck’s Keyworth Stadium, which the club is spending more than $1 million to improve and expand. It will seat around 7,000 this season. Talks are ongoing to find an investor, or investors, who can provide the team the cash it would need to become a professional soccer club. “We recognize, if our intent is to take to it to a higher level, we’ve got to be able to bring in the revenues to support a professional club,” Kropp said. Turning pro would mean more

MUST READS OF THE WEEK Settlement for Campbell

From potlucks to Comerica Park

Bankruptcy deal to pay back creditors brings coda to the saga of Republic Bank architect Jerry Campbell. Page 4

Bekka Valley’s food makes a growth journey. Page 17

home games, which is an increase in both expenses and revenue. Detroit City also has opened conversations with the two leagues that are one level below Major League Soccer — the premier U.S. pro league that’s considering expansion to Detroit. Kropp said DCFC is talking to the New York City-based North American Soccer League and the Tampa, Fla.-based United Soccer League. SEE DCFC, PAGE 21

Small businesses in Michigan and insurance experts have ideas how Congress can fix the Affordable Care Act to lower premiums, reduce costly regulations and make the system work better for businesses under 100 employees. The chief complaint is not new: rising health care costs and premiums. But small businesses also want to see a relaxing of Obamacare regulations that require inordinate amounts of time and money for reporting and compliance. It’s an important issue for small employers, who say they want to offer insurance to employees so they can compete for talent with bigger companies that almost always offer health insurance, but too often find it impossible because of costs and administra- Scott Lyon: Number one thing tive burdens. “The number is cost increases. one thing we hear when talking with small businesses about health care, regardless if they are in the individual market or small group, is cost increases and purchasing health insurance,” said Scott Lyon, senior vice president with the Small Business Association of Michigan. “It always comes down to dollars and cents, and that probably won’t change in our lifetimes because when it comes right down to it, it is expensive.” “They are caught (between a) rock and hard place, because they feel they can’t do a lot themselves. They don’t have much of an impact on costs. It is tough,” Lyon said. Some 60 percent of small-business owners want the Affordable Care Act repealed, according to two recent surveys by Manta and BizBuySell. SEE ACA, PAGE 22

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Judge OKs plan for Republic Bancorp founder to repay debts from failed track By Tom Henderson thenderson@crain.com

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CALLING LOCAL TRAILBLAZERS! Crain’s Detroit Business is seeking nominations for its 2017 class of 40 under 40. We’re looking for today’s brightest under 40 who continue to make their mark within their company, their industry and their community.

A U.S. bankruptcy judge has approved a plan for Jerry Campbell, the former chairman and founder of Ann Arbor-based Republic Bancorp Inc., to pay back the $5.7 million he owes to Jack Krasula, his former partner in the failed Pinnacle Race Course in Huron Township. The settlement brings to a close a long-running dispute for an executive who built two banks but found the horse-racing business a tougher track to negotiate. Crain's first reported in January 2016 that Campbell, now Jerry Campbell: the CEO of TamPlan approved to pa, Fla.-based pay back $5.7M. HomeBancorp Inc., had filed a voluntary chapter 11 petition, claiming debts of about $9 million, the largest of which, the result of the failed track, was to Post Note LLC, a company owned by Krasula. Krasula is president of Southfield-based Trustinus LLC, an executive search firm, and host of a show on WJR AM 760. On April 4, Judge K. Rodney May of the Middle District federal bankruptcy court of Florida, approved the repayment plan, following a hearing with creditors on March 2829. According to the settlement, $1.4 million of the money to be repaid by Campbell to Krasula is in the form of a secured note, based on Campbell's salary, future bonuses and any payments he would receive from the future sale of HomeBancorp. That secured note bears an interest rate of 5 percent on the outstanding balance until paid in full. According to terms of the settlement plan, on April 15, Campbell will make an initial payment of $410,000 to creditors, including $272,223 for Post Note; $13,500 to Felicia Campbell for reimbursement of her attorney’s fees for her divorce from Campbell; $57,223 in other legal fees; $66,500 in mediation fees; and $6,825 in U.S. Trustee fees. That will leave unsecured debt of $4.3 million to Post Note and other unsecured debt of about $1.1 million, most of that, about $980,000 to Comerica Bank. In May, the settlement plan calls for Campbell to start paying Post Note 29 percent of his monthly wag-

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“Reaching a consensual finality in a complex Chapter 11 case like this one was not easy, but well worth everyone’s dedicated efforts.”

Daniel Weiner, Jack Krasula’s attorney and a principal in the Bloomfield Hills law firm of Shafer & Weiner PLLC.

es of $40,862, or $11,849. In addition, he will pay Post Note 29 percent of his annual bonus of about $200,000, starting next February. Starting about April 2020, Krasula will get 25 percent of Campbell’s pay and bonuses to pay off the rest of the secured note as well as the unsecured debt of $4.3 million. At the same time, according to court filings, other unsecured creditors will start to get paid, splitting 4 percent of Campbell’s pay, about $1,634 a month, plus 4 percent of his bonuses, estimated at about $8,000 a year. “Reaching a consensual finality in a complex Chapter 11 case like this one was not easy, but well worth everyone’s dedicated efforts,” said Daniel Weiner, Krasula’s attorney and a principal in the Bloomfield Hills law firm of Shafer & Weiner PLLC. “That said, the court, the mediator and the parties all worked tirelessly to get a deal done and maximize the return to investors. Chapter 11 is, after all, the ultimate form of resolution.”

A boy wonder In 1969, at the beginning of a long career in banking, Jerry Campbell was already something of a boy wonder. At 29, he was president of the Owosso Savings Bank, a small community bank that he and his partners had bought. Campbell grew it into a bank-holding company with $1.2 billion in assets before selling it to Grand Rapids-based Old Kent Bank in 1983. In 1986, after raising $3 million from investors, Campbell launched another small community bank in Owosso called Republic Bancorp Inc., which was based in Ann Arbor by the time it was sold in 2006 to Citizens Banking Corp. in Flint. It would take a year from that sale to show that Republic, which fo-

cused on home mortgages, had been sold at the top of the market. At the time of the deal, the Great Recession was a tsunami that only a few saw coming. In June 2007, a year after the acquisition of Republic was announced, Citizens announced it had reviewed $750 million of Republic’s loans, would take a charge for loan losses of $30 million to $35 million and had downgraded the rating of 180 loans worth $145 million. At the time the Republic sale was announced, Citizens traded at $27.03 a share, and the deal valued Republic shares at $13.86. By May 2011, Citizens Republic’s market cap had fallen from $2 billion to $340 million, and its share price had fallen below $1. In April 2007, just as Citizens was delving into the Republic loans, the first branch of the Community National Bank of the South opened in Orlando, Fla. That was soon after Campbell and his partners, including Krasula, raised $49 million to launch a Tampa, Fla.-based bank-holding company, CNBS Financial Group Inc., later renamed HomeBancorp Inc. In September of that year, Crain’s broke the news that Campbell, a longtime owner of thoroughbred race horses, was in talks with Wayne County to buy or lease land for a racetrack near Metropolitan Airport that would be called Pinnacle Race Course. Campbell’s wife was president and Jerry was chairman and CEO of a company called Post It Stables Inc. that would build and operate the project, which was to include 200,000 square feet of retail and a 60,000-square-foot clubhouse with 20 private suites and boxes. In April 2008, the Wayne County Commission approved the sale of the land to Post It Stables for $1. The deal required the creation of at least 1,100 jobs by 2014; failing that, Campbell would have to pay the county $50,000 an acre. In July 2008, the racetrack, minus many of the planned amenities, opened, attracting a crowd of about 9,500. In some ways, that day was the pinnacle for the Campbells’ dream of reviving thoroughbred horse racing in Michigan. On May 5, 2011, having searched in vain for investors, the Campbells announced that despite being approved for 84 days of live racing for the upcoming season, they had surrendered the racing license to the state. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

BANKRUPTCIES The following businesses filed for bankruptcy protection in U.S. Bankruptcy Court in Detroit March 31-April 6. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. J Care Home RX Corp., 4603 S. Wayne Road, Wayne, voluntary

Chapter 7. Assets and liabilities are not available. J Seven Buffalo LLC, 5510 E. Seven Mile Road, Detroit, voluntary Chapter 7. Assets and liabilities are not available. J Infiniti Homes International Inc., 29193 Northwestern Highway #721,

Southfield, voluntary Chapter 11. Assets and liabilities are not available. J 5310 Bayham LLC, 5310 Bayham St., Dearborn Heights, voluntary Chapter 11. Assets and liabilities are not available. Crain’s Detroit Business

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Bill would legalize internet gambling in Michigan, but only in casinos By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

LANSING — The push to legalize internet gambling has states betting on potential tax revenue, but a bill in Lansing would go about it in a curious way — allowing it only within casino walls. That’s a quirk of Michigan’s constitutional amendment that requires most gambling expansions to go before voters, and some analysts say the proposal on the table could drastically limit the potential payoff to the state and siphon tax dollars away from the city of Detroit. Backers of a plan to allow gamblers at Detroit’s three commercial casinos and casinos owned by American Indian tribes to legally play online poker and card games within casino walls say Michigan could net millions of dollars in new tax revenue. Today, companies that run gambling websites are unregulated in Michigan and pay no state or city taxes. The legislation pending in the Senate would make Michigan the fourth state to legalize some form of internet gambling, after New Jersey, Nevada and Delaware, with more states considering following suit. Unlike the other three states, which allow people to legally play online games from their couch, Michigan would be the only one that requires players to visit a casino. That could be a way around a state constitutional amendment adopted in 2004, which requires a majority of voters statewide to approve any expansion of gambling in Michigan — unless it’s to be offered at Detroit’s three casinos or at casinos run by tribes. While it’s possible supporters of the idea could finance a ballot drive to permit internet gambling anywhere in Michigan, it’s not certain they’d win, partly given opposition from a coalition that has support from casino mogul Sheldon Adelson. The bill also could set up a fight between Detroit’s casinos and those run by tribes, because tribes contend the rules stack the deck against them by requiring them to give up their sovereign immunity to get licensed. Sen. Mike Kowall, of White Lake Township, said the brick-and-mortar requirement would bring stability and uniformity to a black-market system that offers little protection to users. He said he also sees the legislation he sponsored as “a revenue source for a state that sorely needs it.” Kowall is basing his forecast in part on estimates shared by Amaya Inc., a Quebec-based company that owns online gambling brands PokerStars and Full Tilt. Amaya contends internet games at Detroit’s casinos alone could generate between $45 million and $59.4 million in revenue based on figures from New Jersey, according to testimony provided by former Michigan Attorney General Mike Cox. His Livonia-based Mike Cox Law Firm represented Amaya in Lansing. An analysis conducted for Amaya by The Innovation Group, a consultant for the gaming and hospitality industry with offices in Colorado,

Florida and Louisiana, estimated that the state could take in $32 million in tax revenue, given an average online gaming market that could top $319 million by 2019. All figures used New Jersey as a model — except what’s proposed in Michigan isn’t comparable, because New Jersey allows internet gambling everywhere. Any advantage to Michigan casinos may be small at best, since people already can gamble there and internet games are still a small component of the overall gambling market, said David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas. “You’re definitely constraining the market by making people go to a casino to play online,” Schwartz said. “Would you drive to Home Depot to use Amazon to buy something? I probably wouldn’t, as nice as Home Depot is. I want the convenience of getting something at home.” Senate fiscal analysts say Detroit wouldn’t benefit financially from any new tax on online games. And they’re far less convinced the state would see a windfall. MGM Grand Detroit, MotorCity Casino Hotel and Greektown Casino-Hotel paid a combined $112.2 million in state tax revenue in 2016, and another $175.5 million to Detroit, according to data from the Michigan Gaming Control Board, which regu-

Last year, New Jersey’s legal internet gambling revenue topped $196 million. Kowall said his legislation would allow Michigan to network with other states that also have authorized internet gambling to increase revenue. The legality of internet gambling has been an open question after former President Barack Obama’s Justice Department in 2011 ruled that the federal Wire Act of 1961, which banned online gambling, only applied to sports betting. There is some uncertainty over the future, however. New Attorney General Jeff Sessions has said he could revisit the Obama-era decision. And competition for gamblers pits privately owned casinos against tribal casinos in their own states, other casinos in nearby markets — for instance, Toledo — and expanding state lotteries. Online gambling made up much of the growth in U.S. gambling markets in 2015 and could offset losses that can happen as brick-and-mortar gambling operations steal customers from one another, the National Conference of State Legislatures wrote in December. MGM Grand Detroit, MotorCity and Greektown have not publicly taken sides on the three-bill package, though it’s not a stretch to say they like the concept. “We believe that internet gaming

lates casino gambling. The casinos’ net win, or revenue left over after winners are paid, is taxed at 19 percent and earmarked for the state School Aid Fund and the city. Under the bills, internet gambling revenue would be taxed at 10 percent, all of which would go to the state. Because online gambling would not generate tax revenue for the city, Detroit could lose between $1.5 million to $4.5 million if online players siphon off the casinos’ traditional gambling revenue, analysts with the nonpartisan Senate Fiscal Agency estimated. Kowall said he disagrees with Senate analysts’ projections and believes internet games would enhance casinos by attracting more gamblers.

Other states The issue is another example of the clash between technology and government, which often don’t move at the same pace. Nevada offers online poker, while Delaware — a much smaller market — allows its three casinos to manage online poker and casino games. Nevada and Delaware also have created an online poker network for players from both states. New Jersey has the most robust system, with casino and card games run through its casinos. In the first year, the number of accounts rose from about 32,000 to more than 506,000.

could offer a new and exciting product for Detroit casinos,” Gayle Joseph, vice president of communications for Jack Entertainment LLC, the Dan Gilbert-affiliated entity that owns Greektown, said via email. Representatives for MGM Grand and the Marian Ilitch-owned MotorCity Casino declined to comment.

Tribes opposed Although tribes would be allowed to apply for internet gambling licenses, they remain opposed to the bills in part because they first would need to waive their sovereign immunity — which means agreeing to be regulated by the Michigan Gaming Control Board and pay taxes, as Detroit’s commercial casinos do. Tribes also could choose to negotiate internet gambling provisions in their state compacts, a process tribes say would take longer than it would take a Detroit casino to be licensed. Leaders of the Saginaw Chippewa Indian Tribe, which runs Soaring Eagle Casino & Resort in Mount Pleasant, and Nottawaseppi Huron Band of the Potawatomi, which runs Firekeepers Casino Hotel in Battle Creek, argued in a letter opposing the bills that the current language “creates a licensing system that is inherently unfair to Indian tribes.” Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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OPINION

Pact on jail site could be win-win for Detroit

an Gilbert and Warren Evans are engaged in a multimillion-dollar game of chicken that will long shape the future of Detroit’s downtown landscape and the Wayne County budget. We hope they wrestle their way to a draw — a win-win for this community. At issue is the half-built Wayne County Consolidated Jail site, the gouge on Gratiot, which Gilbert’s Rock Ventures LLC wants to convert into a Major League Soccer stadium and three high-rise buildings for residential, office and hotel use. The redevelopment would cost $1.462 billion. A new criminal justice complex, which Gilbert wants to build for the county at I-75 and East Forest Avenue, would cost $420 million. Rock says it would build that complex for $300 million “in exchange for the transfer of the Gratiot Avenue property and a credit for the savings a new consolidated justice complex would provide.” This is where the details get devilish. A University of Michigan study says the two projects would generate $2.39 billion for Southeast Michigan. But the study was com-

missioned for Gilbert as leverage in his negotiations with Evans, the Wayne County executive who is using time and public pressure to defang Gilbert. “This study does nothing to sway my thinking,” Evans said in a statement. “My standard for Rock’s proposal has been absolutely clear: Is Rock prepared to build the county a criminal justice complex in a timely fashion, with buildings that meet our needs, at a price Wayne County can afford? If they can’t meet that standard, everything else is irrelevant.” Gilbert wants Evans to think he can’t reject his terms. Evans wants Gilbert to think he might. The truth is metro Detroit would be better off if the Gratiot site was redeveloped and a criminal justice complex was built in a neighborhood to the north. But Evans has the right and responsibility to drive a hard bargain; after a brush with bankruptcy, Wayne County can’t afford a lousy deal. We applaud both men for their negotiating prowess, even as we encourage them to eventually come to terms.

CRAIN’S DETROIT BUSINESS

The Wayne County Consolidated Jail sits half-built in Detroit after cost overruns halted the project.

Time to get off drugs A little over a decade ago, while John Dingell was still in Congress and a champion of the automotive industry, he helped create the MotorCities National Heritage Area. KEITH There are nearly 50 CRAIN heritage areas across the Editor-in-chief country, but Michigan’s is focused on historic and important sites important to the American automobile history. There are hundreds of places in the corridor, and more than 20 large institutions, many of whom receive federal grant dollars. I am on the boards of trustees of a couple, including the Automotive Hall of Fame and the Gilmore Museum. It seems our newly elected president noticed the federal deficit is quite substantial; he supports a budget that would eliminate many of these grants.

The institutions have gotten used to doles from Washington. It’s not hard to become accustomed to these easy dollars. For all the folks who are connected to the National Heritage Area, it’s time to realize that the national debt is more important. We’ll have to hitch up our pants and raise these funds on our own without government help. We have to kick the narcotic habit of federal money. We don’t have a choice. We should be thankful for the money the institutions received over the years. In some cases, it was a stretch to get federal tax dollars in the first place. Once you get a government grant, it’s hard to kick that habit. The magnitude of the federal deficit should give nonprofits pause before they complain too loud and long. It’s time for many institutions — in the Heritage Corridor and outside of it — to start being responsible for their own budgets without government assistance. It’s time to get off the habit-forming drug of government grants.

LARRY PEPLIN

Detroit teenager Asia Newson, who has been selling candles on city streets since she was 3, calls herself “Super Business Girl.”

Candles — and a burning flame Y

ou may have heard of Asia Newson, the pixyish Detroit teenager featured on “The Ellen DeGeneres Show,” ABC’s “20/20” and scores of local newscasts for her precocious entrepreneurRON ship. She calls herself FOURNIER “Super Business Girl,” bePublisher cause her candle-selling and Editor pitch is, well, pretty super. “Hello! How are you doing?” Asia tells every businessperson and shopper she corners on downtown streets with her dimpled smile and polished delivery. “Now today, I’m seeking a $20 investment. I’m going to purchase the necessary tools I need to expand and grow my business.” Customers melt like hot wax. Asia is 14. She’s been selling candles on city streets since she was 3, with the business becoming a national sensation about when journalists began framing Detroit as a comeback story and needed a fresh face to fit their narrative. You may already know that part of her story. But I bet you didn’t know this about Asia’s business: It’s a family enterprise that takes a village of mentors and benefactors to make work; that must diversify its revenue streams; and that might need a succession plan if its charismatic and restless founder decides to pursue other interests. If those are familiar challenges, you might find some comfort in her story. It started years ago in Owosso, when a door-to-door salesman named Michael Newson brought an armful of candles to the home of Latasha Thomas. He made the sale and found a girlfriend — and the couple was soon parents to a girl they named Asia. She kept her father’s surname, though Michael does not live with the mother and daughter. The unconventional family moved separately to Detroit. Latasha worked. Michael babysat Asia, and started taking his 3-yearold daughter with him while selling candles on the street. “It was a way for him to connect with her and also for her to make money,” Latasha told me. “He was not a very rich man and didn’t have any stock or bonds to share with her, so he taught her how to make money for stocks and bonds.” Latasha grew up without a father, so she appreciated the benefits of Asia spending time with Michael. “I encouraged it,” she said of the candle selling. “I egged them on.” Asia laughed at those early memories with her dad. “He was fun and funny. We had a lot of junk food.” Their favorite stop was Slices on Woodward Avenue, where Asia would insist that her father allow her to sell the candles outside without his hovering presence. Michael kept an eye on his daughter from his regular table inside Slices, his

seat facing a massive storefront window. For several years, Latasha considered the father-daughter partnership to be a mere hobby. “I was just happy to have him babysitting,” she chuckled. That changed when Asia was about 6 and the mother joined the daughter on a sales trip along the Detroit RiverWalk. Asia made $60 that day. “I said, ‘What’s going on here? Is that what you and your dad have been doing?’” That’s when things got serious. Latasha is now president of Super Business Girl. Michael is director of sales. They both get paid, as do about four other adult employees who help Asia run sales events and workshops. In separate interviews, Latasha and Michael said the business makes enough revenue that, after salaries and others costs, Asia nets about $20,000 a year. The money goes to a trust fund she can’t access until age 18. “This hasn’t just been me and the family,” Michael told me. “A lot of people in our neighborhood saw what she was doing and had her back. Detroit had her back.” Borrowing a line from Hillary Clinton, he added, “It took a village.” That village included Bamboo Detroit, a co-working space and business incubator. After watching Asia pitch her candles for a local TV station, co-founder Dave Anderson offered Asia working space for the life of her company. He remains a mentor and adviser. Most of the company’s revenue now comes from events — Asia selling candles at award ceremonies and markets. The team also travels the country teaching school children how to sell her candles. Online sales spike around media appearances. And the teenager still makes curbside cold calls. She sells one line of candles for charity, Asia said, raising $11,000 for coats and boots for the homeless this winter. Like most 14-year-olds, Asia is diversifying her interests. She is playing Dorothy in her school’s production of “The Wiz” (she was singing “Home” while skipping between customers on Woodward last week), and has big non-candle plans for her future. “I want to go to college and travel the world and I want to perform and I want to make a lot of money and I want to help a lot of people and have a lot of fun,” Asia told me, her thoughts running together like flames in a fire. Latasha, who recently took a job at an airport gift shop in hopes of getting Asia’s candles sold there, said she has one simple hope for her daughter. “I just want her happy.” For now, selling candles makes Asia happy. Ron Fournier is editor and publisher of Crain’s Detroit Business. Catch his take on business news at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760.

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SPECIAL REPORT: FLINT

The Capitol Theatre in downtown Flint opened in 1928 as a vaudeville house and was listed on the National Register of Historic Places in 1985. It showed its last movie in 1976 and stopped holding concerts in 1996. But if things go according to plan, it will be back up and running this fall in all its original glory. See Page 14

TOM HENDERSON/CRAIN’S DETROIT BUSINESS

More Flint coverage inside n The majority of the Hagerman Foundation’s grants are targeted to benefit Flint, Genesee County. Page 8 n New York-based boutique investment firm finds opportunity in Flint. Page 9 n Made by Italian artisans,

Article One’s eyewear has a social purpose. Page 12

n Flint River Restoration Project will remove dams, boost recreation by 2018. Page 13 n Restoration of historic

downtown theater could spark a revival in Flint. Page 14

Wheels up New incubator aims to transform Flint By Tom Henderson thenderson@crain.com

Phil Hagerman helped transform a corner drug store into a $4.4 billion company. To create a headquarters for the company, he transformed one of automotive history's most significant sites. Now, inspired by the change he has seen in downtown Detroit, he wants to transform downtown Flint. Hagerman and his father Dale founded Diplomat Pharmacy (NYSE: DPLO) in 1975. Today, the company supplies rare and expensive drugs and support services to patients with cancer and immunological disorders in every state in the country and employs about 3,000 in 17 facilities in 14 states, including 1,200 at its Genesee County headquarters a few miles south of downtown Flint. Diplomat, which went public in 2014, has grown both organically and through acquisitions. In 2005, it had revenue of just $30 million, and by 2015 it had grown revenue to $2.2 billion. In 2016, it doubled that at $4.4 billion. In 2009, Diplomat bought a

sprawling, 583,000-square-foot former General Motors Technology Centre at auction and moved 200 employees in the next year, with plans to grow headcount quickly. The move brought back to life one of the most famous sites in automotive history: At 8 p.m. on Dec. 30, 1936, autoworkers began a sit-down strike there at GM’s Fisher Body Plant Number One, which after 44 days led to the recognition of the United Auto Workers. Hagerman wants to bring the same approach to downtown Flint — to fix up buildings abandoned by failing companies, invest in early-stage companies that want to call Genesee County home and establish a business incubator whose tenants can capitalize on creative partnerships with for-profit companies, nonprofits and area universities.

Ferris Wheel For the last 30 years, the only tenants of the historic Ferris Building have been pigeons. A seven-story art deco icon built in 1930, the Ferris

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The renovation of the historic Dryden Building (left) was completed in 2016 for $6.8 million. Now, the Ferris Building (center) will undergo a $7.5 million renovation to create a business incubator and tech center. Building originally housed the Gainey Furniture Co. and got its current name when the Ferris Brothers Fur Co. moved in a few years later. Today, the building is undergoing a $7.5 million renovation and will be home to a business incubator called the Ferris Wheel Innovation Center. Anyone will be welcome to walk in off the street with an idea for a business and get the idea vetted, in part by a team of part-time students in a wide range of disciplines from the University of Michigan, the University of Michigan-Flint, Oakland University, Kettering University and the

College for Creative Studies in Detroit. If the idea warrants further development, the incubator will help create a business plan, offer marketing, design, prototyping and small-batch runs and low-cost ancillary services such as legal and accounting. As businesses evolve, the center will help raise seed funding and later rounds of equity capital. The incubator will also host regular business-plan competitions, boot camps and demo days for startups to strut their stuff. SEE INCUBATOR, PAGE 10

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CRAIN’S MICHIGAN BUSINESS: FLINT

Most Hagerman grants targeted to benefit Flint, Genesee County By Tom Henderson thenderson@crain.com

The Hagerman Foundation was founded by Phil Hagerman, the chairman and CEO of Flint-based Diplomat Pharmacy Inc. (NYSE: DPLO), and his wife, Jocelyn, in the summer of 2014. “It was a vehicle for us to be more strategic in our giving,” said Jocelyn, the foundation’s CEO, who in June was named by Crain’s as one of the 100 most influential women in Michigan. It has had an impact in Flint and Genesee County from the start. Through 2016, the foundation, which is funded solely by the Hagermans and has no endowment, made 48 grants totaling almost $15.2 million. All but two were for projects in either Flint or Genesee County. “We hit the ground running,” said Jocelyn. “The water crisis solidified our giving plans. We want to be part of the transformation here, and giving hope to people who either feel hopeless or need a helping hand up.” Much of the grant efforts are aimed at the impoverished north side of Flint. “We do a lot of work with at-risk teens. Most of that money is going for early childhood development, after-school programs geared at health and wellness of children, family litera-

cy, and nutrition,” she said. “It’s not just checkbook philanthropy, it’s how can we make the most impact.” In January 2015, the Hagermans hired Becky Foerster, a former teacher whose focus is on early childhood development, as the foundation’s executive director. A $200,000 grant to the Flint Watershed Coalition in 2015 to fund a feasibility study for the removal of the Becky Foerster: crumbling and Hired as executive dangerous Hamdirector in 2015. ilton Dam on the Flint River had a huge impact, according to Amy McMillan, director of the Genesee County Parks and Recreation Commission. (See related story, Page 13.) That grant jump-started long-dormant talks about removing the dam and sparked a flurry of donations and grants. The Flint River Restoration Project is now a $37 million effort that will result in the dam coming out this fall and, by the end of next year, the development of 80 acres of parks and three miles of trails along a one-and-a-

half mile stretch of river. The dam was designated as extremely hazardous by the state of Michigan in 2008, but talk of removing it had languished for a lack of funding. The Flint water crisis created the impetus finally do something about the dam. In addition to creating the foundation, in 2014 the Hagermans co-founded Flint-based SkyPoint Ventures LLC, a venture capital and real estate development firm. Jocelyn also founded #FlintFwd, a grassroots movement that grew out of the water crisis. At its website, flintforward.org, visitors can find out about volunteer opportunities and needs. SkyPoint funded the recent $6.8 million renovation of the Dryden Building in downtown Flint, a historic office building built in 1902, and is funding the $7.5 million renovation of the Ferris Building next door, which will be the home of the Ferris Wheel, a business incubator and co-working space. (See related story, Page 7.) Last May, the foundation donated $120,000 toward a joint project called DEVELOP(her) with Grand Circus, a Detroit-based company that runs intensive courses and training programs for software developers.

HAGERMAN FOUNDATION

Jocelyn and Phil Hagerman founded the Hagerman Foundation in 2014. The program runs coding bootcamps in Detroit and in Flint for women who want to become coders. Here are some of the foundation's other grants. J $2 million to found the Hagerman Center for Entrepreneurship and Innovation at the University of Michigan-Flint. J $30,000 for the Diaper Bank of Flint. J $750,000 for the St. Luke N.E.W. Life Center in Flint to provide life skills, education and workplace training. J $100,000 for Ele's Place in Flint, a grieving center for children and parents. J $100,000 for the Hurley Center capital campaign. J $50,000 for the Ennis Children’s

Center in Flint. J $50,000 for Communities First Inc. of Flint, which helps residents with affordable housing and economic development. J $45,000 for the Boys & Girls Clubs of Greater Flint. J $50,000 for the Catholic Charities Center for Hope. J $75,000 for the YMCA of Greater Flint. J $25,000 for Motherly Intercession of Flint, which provides services for the formerly imprisoned or the children of those in prison. J $50,000 for the medical services program of the Whaley Children’s Center. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

Not all heroes wear capes. Crain’s Health Care Heroes recognizes today’s industry professionals who are dedicated to helping save lives and improving access to care.

NOMINATE A HERO IN ONE OF THESE FIVE CATEGORIES: • Corporate achievement in health care • Advancements in health care • Physician • Allied health • Trustee

THE DEADLINE TO NOMINATE IS MONDAY, MAY 22. For more information and to submit a nomination visit: crainsdetroit.com/nominate

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CRAIN’S MICHIGAN BUSINESS: FLINT

A New York-based investment firm finds opportunity in Flint By Tom Henderson thenderson@crain.com

Project I, a boutique New Yorkbased venture capital firm that invests in early-stage fashion-apparel companies, hopes to have an impact in Flint beyond the $5 million size of its investment fund. At the very least, the firm will serve as a prototype service provider for the business incubator and technology hub Phil and Jocelyn Hagerman are creating in downtown Flint. Project I has become a tenant in the newly renovated Dryden Building, a historic building in downtown Flint that the Hagermans recently renovated through SkyPoint Ventures LLC, their real estate and venture capital investment arm. Project I invests in fashion-apparel companies focusing on e-commerce. It sees Michigan as a place it can find those companies — and it sees Flint as a place it can create jobs providing back-office support to other portfolio companies for far cheaper than can be done in New York. It will also be a tenant in the historic Ferris Building, adjacent to the Dryden Building on Saginaw Avenue. That building will house the Ferris Wheel, a full-service technology incubator and co-working space. It’s fitting Project I will have an office there, since the “I” in Project I stands for incubator. Project I founders want to advise would-be entrepreneurs, introduce them to their network of business and fashion experts and, not so coincidentally, get first crack at investing in early-stage apparel companies. Jon Lewis, chairman and co-founder of Project I, opened an office in the Dryden Building in June and is in the final stages of negotiating terms to join in a $2 million funding round for another of the Dryden tenants, Article One LLC. His fund typically invests between $250,000 and $1 million in a portfolio company. Lewis is a native of the Flint area; he grew up in Grand Blanc and graduated from the University of Michigan. He and his co-founder, John Elmuccio, have more than 60 years between them in the apparel business, both wholesale and retail, and have been involved in a variJohn Elmuccio: ety of product Many years in the launches, inapparel business. cluding those for Valentino and Oscar de la Renta. “We can connect Michigan-based brands with the New York fashion community and be a conduit for companies in Flint, Detroit, Lansing and Grand Rapids,” said Lewis, using Detroit-based Shinola as an example of a Michigan startup that has attracted a national following. “It’s now cool for brands to be in

“It’s now cool for brands to be in Michigan, and Article One will be the cornerstone for our efforts in Flint.” Jon Lewis, Project I

Michigan, and Article One will be the cornerstone for our efforts in Flint,” he said. “Although John is not from Michigan, he has been a champion of our efforts and a be-

liever in the state. As we work on our manufacturing initiatives here, we may seriously end up moving to the state, that’s how much he believes in the potential.”

Though Project I is based in New York, Lewis moved back to Grand Blanc last May, in part to be closer to two daughters, who attend the University of Michigan. At first the Project I plan was to provide back-office jobs in Flint for companies on the east coast. But Lewis said he quickly realized there were opportunities to invest in companies here, too, including the Dryden Building’s first tenant, Article One, which supplies optometrists with fashionable frames for prescription eyeglasses that are

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made in a small village in Italy. (See related story on Page 12.) Article One was in Project I’s sweet spot, said Lewis. It was past the startup stage, had revenue and was growing, though it needed help with marketing and global sourcing. One of Project I’s partners in New York, a company called ArtiFect, provides some of that support. ArtiFect helps small companies find creative talent and provides resources for business development. SEE PROJECT I, PAGE 15

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CRAIN’S MICHIGAN BUSINESS: FLINT

INCUBATOR FROM PAGE 7

The state of Michigan is on board, too. On March 28, the Michigan Strategic Fund approved grants totaling $2.5 million for Hagerman’s projects, including $1.5 million for the Ferris Wheel. “This is a creative, ambitious swing for the fences that is one of the most interesting ideas for startup companies that we’ve seen in Michigan. If you think about all the elements that make for a successful startup, it’s tough, particularly tough outside a university setting,” said Chris Rizik, CEO and fund manager

of Ann Arbor-based Renaissance Venture Capital Fund, which is affiliated with Business Leaders for Michigan. “The thought of bringing all that together in a single place? We haven’t seen it done anywhere else. It’s exciting. In my opinion, it’s doing God’s work.”

Inspired by Detroit Hagerman credits Dan Gilbert and his efforts in Detroit for inspiring him to invest in Flint’s transformation. Gilbert has bought and rehabbed long-empty office buildings, made the Madison Building a home

CR and showcase for early-stage tech companies and co-founded Detroit Venture Partners, a venture capital firm. “I’ve been incredibly inspired by what Dan has done. His taking Quicken downtown when everyone else was going in the other direction was inspiring,” said Hagerman. Members of his SkyPoint team have made several trips to downtown Detroit to meet with various members of Gilbert’s team. “When we started buying buildings in Flint, Gilbert had already gotten traction in Detroit. We wanted to bring credibility to downtown Flint. We knew we had to make a splash,

that we had to put significant money in to make a difference,” said Hagerman, who spent $6.8 million to buy and renovate the historic Dryden Building next door to the Ferris Building. The Dryden Building had been vacant for 20 years; Hagerman’s wife Jocelyn managed the renovation, which was finished in 2015. Dryden is home to the Hagerman Foundation; SkyPoint Ventures LLC; and Flint Ferris Building LLC. Located at the corner of Second Street and Saginaw, it was built in 1902 and at one time housed offices for the Durant-Dort Carriage Co., one of the Flint companies that at the turn of the 20th century morphed into the

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General Motors Corp. It also was home to one of the earliest J.C. Penney stores in the country. Hagerman’s team didn’t just look to Detroit for inspiration. It also flew to, among other places, Chicago, Cincinnati and Pittsburgh to visit incubators and tech centers there. The vision that evolved for Hagerman was to form a for-profit venture-capital arm to buy real estate and invest in early-stage companies, to form a nonprofit foundation and to create a full-service incubator and co-working space.

Community investments SkyPoint Ventures LLC was formed in 2014 to serve as the Hagermans’ for-profit investment arm. It has no dedicated fund, getting funds as needed from the Hagermans to do its deals. It has no limited partners, which means that while it is a for-profit entity, it has the luxury of being able to invest in social-benefit projects that can limit profits. “We can do community development. Where’s the need? Where’s the opportunity? Where’s the fit?" said Phil Hagerman. SkyPoint has committed to projects as large as the $6.8 million acquisition and renovation of the Dryden Building and $7.5 million for the Ferris Building, and as small as $100,000. Bryce Moe, a CPA by trade, is SkyPoint’s CEO. David Ollila, a serial entrepreneur, was recruited from Marquette to be president and chief innovation officer. Before joining SkyPoint, Moe bought, turned around and sold Kremin Inc., a struggling tool-anddie shop business in Saginaw. Three years ago, Jim Ananich, Senate Democrat in Lansing from Flint, introduced him to Hagerman. Hagerman told him his plans for a tech hub, incubator and investment arm in downtown Flint. “Phil said, ‘I want to move the needle,’” said Moe, who became employee No. 1, working out of an office at Hagerman’s home before the Dryden Building was renovated. SkyPoint generally invests in early-stage companies. Portfolio companies that have become Dryden tenants include: J Article One, a company founded in Chicago that makes fashionable frames for prescription glasses (see related story, Page 12). J iSource Worldwide LLC, a company founded in Fenton that has created a cloud-based web-to-print technology known as PrintSites, which is used by 4,000 UPS stores nationwide. Last year, the company got a $500,000 Michigan Business Development program grant and a $2.5 million loan from the Michigan Economic Development Corp. J Divide by Design LLC, a company founded by David Ollila, SkyPoint’s president and chief innovation officer. He has applied for patents on an idea to create flexible office space for small companies that will be based in larger work environments, such as the Ferris Wheel.

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David Ollila, president and chief innovation officer, and Bryce Moe, CEO of SkyPoint Ventures, at their offices in the Dryden Building. An example of an investment done for community good was the acquisition of an historic building in downtown Fenton, a granary built in 1865 and later christened the Fenton Bean Co. that had sat empty and deteriorating for years. In 2015, “Phil called me and said, ‘Hey, I bought this building. Now you have to figure out what we are going to do with it,’” Moe said. SkyPoint spent $2.7 million rehabbing the building, put in a new glass front and found a tenant, Red Fox Outfitters. “It was for the community, but we wanted to put a sustainable business in there,” said Moe. Next for SkyPoint? Building a fine-dining restaurant in the vacant ground floor and mezzanine of the Dryden Building to coincide with the reopening of the historic Capitol Theater around the corner this fall.

“Breeding reindeers” Included in the $2.5 million the Michigan Strategic Fund approved for Hagerman projects on March 28 was a $1.5 million grant to 100K Ideas, a nonprofit that will be housed at Ferris Wheel to help would-be entrepreneurs turn ideas into companies. 100K Ideas is modeled after a successful program Ollila created in 2014

at Northern Michigan University in Marquette called Invent@NMU, which used students to help vet would-be entrepreneurs and provide them with business-development help. Rick Snyder toured Invent@NMU in 2015. In the last two minutes of his State of the State speech in 2015 — a speech otherwise dominated by the Flint water crisis — Snyder used Invent@NMU as an example of how innovation can happen anywhere. In May 2016, when Hagerman told the governor about his plan to invest in startup companies and create an incubator to help grow them, Snyder told him he ought to check out Invent@NMU. Hagerman flew up to Marquette a week later, met Ollila and later offered him a job. A native Yooper, Ollila never imagined leaving the UP to live and work in Southeast Michigan, never mind a place with a reputation like Flint’s. “I was pretty blown away by what he’d created,” said Hagerman. “We had a vision of what we wanted to do, but we didn’t have it buttoned down. He helped us button it down.” And Ollila says he was blown away by what Hagerman wanted to create and how it would dovetail with what he’d learned at NMU.

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The Hagermans renovated the Dryden Building for $6.8 million. Now it’s the offices of SkyPoint Ventures LLC, the Hagermans’ venture capital and real estate development firm.

“The idea is every three days an idea walks in the door. Half are killed in the first 20 minutes. The other half, you put in $150 to do a validation study. Five percent of the ideas make it to pilot production,” said Ollila. “We want to remove the entrepreneurial burdens and get them to a point where we can hand them off to banks or venture capital.” Ollila is an entrepreneur himself. In 1995 he launched a magazine called UP Mountain Biking and later invented a helmet-mounted camera system that predated GoPro. That system morphed into Viosport, a company in Marquette that sold $20 million worth of helmet cams from 2000-2009 and created 25 tech jobs. Ollila says he learned the vagaries of entrepreneurship when investors forced him out of the company, which was struggling to grow, in 2010. He then started Marquette Back Country Skis, a small but profitable business that sells 200 pairs a year of wide, plastic skis that he bills as “30 percent snowshoes, 70 percent skis and 100 percent fun” and which retail on Amazon.com for $189 a pair. Made in Coldwater, Mich., by a company that supplies running boards for the Jeep Wrangler, the skis are an example of what Ollila wants to help bring to Flint: practical ideas turned into profitable businesses that aren’t necessarily looking for huge growth, big exits or an IPO. “While everyone else is out chasing unicorns, we can be breeding reindeers,” said Ollila. “We’re very happy creating 500 companies of mixed size rather than two companies with thousands of employees. I’ll be very happy to have a company that employs five people that has sales.” At the heart of the 100K Ideas project, students from 16 different disciplines, including electrical and mechanical engineering, finance, data analytics, software development, accounting, public relations and industrial design, will be paid between $10 and $15 an hour to vet ideas and, for ones deemed worthy, help them evolve into businesses.

UM-Flint will be a tenant in the Ferris Wheel and provide students, according to Paula Nas, executive director of the University Center for Community and Economic Development in the school’s Office of University Outreach. She said Ferris Wheel dovetails nicely with the school’s plans to spark company formation and job creation, having funded a feasibility study into an innovation hub in 2015. “Phil and David have been very generous about involving us and figuring out how UM-Flint can fit into what they are doing,” she said. The first three floors of the Ferris Wheel are scheduled to open in June or July. Project I, a boutique venture capital firm in New York that invests in fashion apparel, will move into the Ferris Wheel later this year. The firm has opened an office in the Dryden Building and is about to invest $2 million in Article One. The “I” in Project I stands for incubator. In addition to providing capital, its principals offer mentoring and networking for entrepreneurs. Menlo Innovations LLC, a soft-

ware development company in Ann Arbor, has agreed to be a technology partner for the Ferris Wheel and is planning to have a presence in the building. Jeremy Piper, the principal of Piper Legal, a tenant of the Dryden Building, and chairman of the Cultural Center Corp., the landlord for Flint’s Cultural Center, has created what he calls a menu of legal steps would-be entrepreneurs need to take as they try to grow a business, including forming an LLC. He has agreed with Ferris Wheel organizers to provide “low-cost or free access to my office,” Piper said. “As their legal needs get bigger, if they need patents or trademarks, I can refer them to other attorneys.” “Not only will this project redevelop a seven-story vacant building in downtown Flint, but the business climate and entrepreneurial hub will add vibrancy, people on the street, and a viable way forward for many Flint residents well into the future,” said Steve Arwood, CEO of MEDC, when the MSF made its grants. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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INSPIRING DESIGN

ARTICLE ONE

Wes Stoody, CEO, and the Article One team. Article One provides prescription eyeglass frames to optometrists around the country that are made by artisans in a small village in northern Italy.

Fishbeck, Thompson, Carr & Huber, Inc.

Made by Italian artisans, Article One’s eyewear has a social purpose By Tom Henderson thenderson@crain.com

SkyPoint Ventures LLC, a private equity and real estate firm in Flint, points to Article One as exactly the kind of company it wants in its young and growing portfolio. The company’s founder and CEO, Wes Stoody, is a Flint native who wanted to come home. He moved back from Chicago in 2014. Since then, SkyPoint has provided seed and follow-on funding totaling $1 million and is part of a round of $2 million that is in the final stages of negotiations. Article One provides prescription eyeglass frames to optometrists around the country that are made by artisans in a small village in northern Italy. The newest round of funding is particularly strategic, according to SkyPoint CEO Bryce Moe, because it involves a partnership with another Dryden Building tenant, Project I, a boutique venture capital firm based in New York that has opened an office in Flint to source investments in early-stage fashion-apparel companies that focus on e-commerce. The “I” in Project I stands for incubation, and the firm, which has a $5 million fund and invests between $250,000 and $1 million in its portfolio companies. It looks for companies it can provide networking and mentoring support to in addition to equity. “We look for companies that want a consultative approach,” said Jon Lewis, Project I's co-founder and chairman. “Article One was a classic

example of what we’re looking for. It had already done a lot of great work, had an excellent founder and had identified a space in the market that is scalable. We can come in and provide mentoring and global expertise.” Stoody was a graduate of Flint Power Catholic High School and a 2011 graduate of Eastern Michigan University. Before graduating, he decided he wanted to start a socially responsible business. He’d read that vitamin A deficiencies cause 500,000 children a year worldwide to lose their eyesight. Half of those children eventually die from the deficiency. “It only costs $1 a year to supplement a child with vitamin A. ... I couldn’t believe how cheap the solution was,” he said. In 2012, while living in Chicago, he launched Article One, raising $60,000 from family and friends, through both investments and loans, with the idea of selling designer frames and donating $2 from each sale to Helen Keller International. He bussed tables at restaurants in Chicago by night, and by day started reaching out to area optometrists. When his schedule permitted, he’d borrow his mother’s car and head out across the country to call on eye doctors. “I had no idea what I was doing. I just hustled around to meetings with optometrists,” he said. “The first couple of years it was basically hustling and me being broke.” At first, he had frames made in

China, then Turkey, then through networking and Internet searches found a group of 12 artisans at a family-owned factory in a small village in Italy at the base of the Dolomite mountains. A visit there convinced him to give them his business. They make their frames either from a cotton-based plastic called acetate or stainless steel. In 2014, Stoody moved back to Flint and began meeting with potential investors, including Phil Hagerman, who, through SkyPoint Ventures, decided to invest. “The movement back to Detroit was getting going and I could see some momentum in Flint,” said Stoody. In the spring of 2014, Stoody moved into the Dryden Building, where renovation had just begun. For a while, he and SkyPoint were the only tenants, and he shared an office with Moe. Jennifer Wendlick, a UM-Flint student, joined him as an unpaid intern. Today, she is a full-time employee and is the company’s account manager. The company employs four full-time employees and three part-time UM-Flint students. Stoody says he sold almost 6,000 pairs of glasses in 2016 and expects to sell 15,000 this year at about $250 a pair. He said he hopes to bring at least some manufacturing to Flint in two years as sales ramp up. “It’s something we’ve always had as a goal,” he said. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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 1 0 , 2 0 1 7

CRAIN’S MICHIGAN BUSINESS: FLINT

The Flint Riverfront Restoration Project is a $37 million effort to replace a crumbling dam and surround it with 80 acres of parks, access to the water and hiking and biking trails.

TOM HENDERSON/CRAIN’S DETROIT BUSINESS

Flint River Restoration Project will remove dams, boost recreation By Tom Henderson thenderson@crain.com

It’s been a cliché of journalism teachers for years: dog bites man isn’t news. Man bites dog is. The end of the Hamilton Dam is the ultimate man bites dog story — a story about the Flint River that is all good news. It isn’t the dog-bitesman story long associated with the river of the leaching of lead, of corrosive water, of scandal, of indictments and of state control gone horribly wrong. It will be the man-bites-dog Flint River story of kayakers and tubers floating downstream as what is actually a relatively clean body of water meanders to the Saginaw Bay, of fishermen and women casting their lines for fish, of students at the nearby University of Michigan-Flint catching some sun on the grassy banks on a spring day as they kill time between classes. The Flint Riverfront Restoration Project is a $37 million effort to replace a crumbling, long-dangerous dam and surround it with 80 acres of parks, people-friendly access to the water and three miles of hiking and biking trails along a 1.5-mile stretch of river. The latest funding approval for the project occurred on March 10, when the Department of Natural Resources’ Grant Management Program approved a $3 million grant. The project has had broad support from other nonprofit and government funding sources, including $7.6 million from the Michigan Natural Resources Trust Fund; $5 million from the Flint-based C.S. Mott Foundation; $5 million from the U.S. Department of Transportation; $4.3 million from the Michi-

gan Department of Natural Resources; $3.5 million from the state’s Department of Environmental Quality; and $1.4 million from the U.S. Environmental Protection Agency. Consumers Energy is also doing some remediation on land it used to own along the river that is now part of the UM-Flint campus. The 200-foot-wide Hamilton Dam is in the middle of UM-Flint’s campus, on the north edge of downtown. Built in 1920, it once also served as a pedestrian bridge, but pedestrians have been blocked by a locked gate for years because of the bridge’s deterioration.

Plans are to have the dam removed by November and for the entire project to be done by the end of 2018. The dam has long been rated as unsatisfactory by state inspectors, the lowest ranking given. It is also classified as a high-hazard dam, meaning there’s a chance of fatalities and significant impact on infrastructure downriver, including destruction to buildings downtown and widespread flooding in the city, if the dam were to fail. In 2008, the state ordered that the river be lowered to reduce the stress on the dam. According to Amy McMillan, director of the Genesee County Parks and Recreation Commission, talk of demolishing the dam had gone on for years but languished for lack of funding.

“One of the most important parts of the story of how the project was essentially revived by the Flint River Corridor Alliance and the Flint River Watershed Coalition in 2015 was when they were awarded the grant from the Hagerman Foundation to initiate the preliminary engineering and design for the project,” she said. Momentum gathered quickly after that $200,000 grant. The restoration project will also take down a small dam called the Fabri Dam just downriver from the Hamilton that was built in 1979, remove walls along the river bank near the Hamilton and, to make the river more kayakable, lower some falls upriver that were exposed when the river was lowered to reduce pressure on the Hamilton Dam. The two dams are the last on the way to Saginaw Bay. McMillan said the project is in the final stages of design and the permitting process to get the dam removed is underway. She said plans are to have the dam removed by November and for the entire project to be done by the end of 2018. The dams’ removal is expected to have a significant beneficial effect on fish populations, according to DNR fisheries managers, particularly on fish that live in lakes but swim upriver to spawn, including walleye but also lake sturgeon and white suckers. Their removal will also benefit fish that live exclusively in the river, including smallmouth bass and rock bass. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

A F e e - O n l y We a l t h M a n a g e m e n t G r o u p

Michigan’s #1 Financial Advisor* Charles C. Zhang CFP®, MBA, MSFS, ChFC, CLU Managing Partner

Charles has been ranked in the top 10 on Barron’s list of Top 100 Independent Financial Advisors for 2015 and 2016, and is currently the highest ranking fee-only NAPFA-Registered Financial Advisor on the list.**

We Uphold a Fiduciary Standard 101 West Big Beaver Road 14th Floor Troy, MI 48084 (248) 687-1258 or (888) 777-0126

www.zhangfinancial.com Assets under custody of LPL Financial and TD Ameritrade. *As reported in Barron’s March 5, 2016. Rankings based on assets under management, revenue generated for the advisors’ firms, quality of practices and other factors. **As reported in Barron’s August 22, 2015 and August 27, 2016. Based on assets under management, quality of practices, revenue that advisors generate for their firms, and other factors. For fee-only status see NAPFA.org. Minimum Investment Requirement: $500,000 in Michigan/$1,000,000 outside of Michigan.

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 1 0 , 2 0 1 7

CRAIN’S MICHIGAN BUSINESS: FLINT

Capitol

investment

Restoration of a historic theater could spark revival By Tom Henderson thenderson@crain.com

Inside the Capitol Theatre in Flint, which is undergoing a $37 million restoration.

The stage of the Capitol Theatre in downtown Flint. The theater is undergoing a $37 million restoration that should be complete this fall.

PHOTOS BY AVRAM GOLDEN

A detail from a ceiling inside of the Capitol Theatre. The historic movie house in downtown Flint was built in 1928.

If things go according to plan, one of Flint’s downtown jewels, the historic Capitol Theatre at east Second Street, will be back up and running this fall in all its original glory. The Capitol Theatre opened in 1928 as a vaudeville house and was listed on the National Register of Historic Places in 1985. It showed its last movie in 1976 and stopped holding concerts in 1996. Now, what Flint residents once thought might be destined to become yet another surface parking lot is undergoing a $37 million renovation that will result in a 1,600-seat movie palace and performance venue and 28,000 square feet of “It was ground-floor probably retail and secgoing to ond-floor office space. An be a additional per- parking formance space will be lot, and it created in the was basement for s m a l l - s c a l e saved.” workshops, ex- Jeremy Piper, p e r i m e n t a l chairman of the theater and Cultural Center other perfor- Corp. mances. “It was probably going to be a parking lot, and it was saved,” said Jeremy Piper, a Flint lawyer who is chairman of the Cultural Center Corp., the parent organization for the Flint Cultural Center. The Whiting, a performing arts venue in the cultural center, will manage the Capitol’s operations, programming and marketing. Piper is also co-chair of a committee that is raising the last $4 million of the $37 million needed to bring the theater back to life. In 2016, the Capitol was bought by the Uptown Reinvestment Corp., which is handling the restoration. Work began last summer. According to Jarret Haynes, executive director of The Whiting, the theater will have a soft opening in September, with movies and perhaps some performances by local groups to work out the bugs. An official grand opening later in the year will feature “big names we’re still looking at.” The Capitol was designed by John Eberson, who designed what were called atmospheric theaters around the world, including the Grand Rex in Paris and the State Theatre in Sydney, Australia. Eberson designed The Capitol to look like a Roman courtyard and garden. SEE CAPITOL, PAGE 15

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 1 0 , 2 0 1 7

CALENDAR WEDNESDAY APRIL 12

Attracting and Engaging Millennials.

8-11 a.m. Detroit Regional Chamber. Discover how to engage and maintain the most qualified employees, maximizing on Michigan’s talent pool. Attendees will hear how to create an employee-focused environment and improve ROI, productivity and employee satisfaction. Greektown Casino Hotel. $55 members; $95 nonmembers. Contact: Marianne Alabastro, phone: (313) 5960479; email: malabast@detroitchamber.com; website: http://www. d e t r o i t c h a m b e r. c o m / a t t r a c ting-and-engaging-millennials/ J

Breakfast with Bob Pittman. 8-10

a.m. Adcraft. Features Pittman, chairman and CEO of iHeartMedia Inc., a media, digital and entertainment company; and Clear Channel Outdoor. San Marino Club, Troy. $50 members; $75 nonmembers. Website: https://adcraftdetroit.com/ events/ J Luncheon Hosted by GM Women in Finance. 11:30-a.m.-12:30 p.m. Info-

rum. Speaker is Diana Tremblay, vice president of Global Business Services, General Motors. Renaissance Center, Detroit. Free. Website: inforummichigan.org.

UPCOMING EVENTS

BLM Leadership Summit on Fiscal Stability. Noon-5 p.m. April 17. BusiJ

ness 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: jenni-

PROJECT I FROM PAGE 9

Lewis said he is in the final stages of negotiating a lease with a company in the Lansing area that makes smart clothes for the military and police. For example, sensors can detect body heat and cause the clothing to cool off or heat up as needed. “There’s deal flow in Michigan,” said Lewis, who is also looking into a

ferh@businessleadersformichigan. com.

J Who Do You Trust? Leading in an Era of Populism. 11:30 a.m.-1:30 p.m.

April 19. Detroit Economic 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. J CyberSecurity: Are You Keeping Your Customers as Safe as You Think?

8-10:30 a.m. April 21. Marketing and Sales Executives of Detroit. Jamie Tomasello, manager of trust and compliance, Duo Security, will present a workshop on cyber security awareness which includes best practices on how to improve security hygiene, reduce risks, and build trust with customers through security practices. Original Equipment Suppiers Association, Southfield. $40 member; $55 nonmember. Website: www.msedetroit.org J Positive organization development: A new change equation that’s changing everything. 4-5:30 p.m. April 24.

Center for Positive Organizations. Speaker: David Cooperrider, university distinguished professor and Fairmount Santrol Professorship, Weatherhead School of Management, Case Western Reserve University. Ross School of Business, University of Michigan. Free. Website: positiveorgs.bus.umich.edu

shoe company he heard about that was founded by a recent graduate of the Ross School of Business at the University of Michigan. “There's a seismic shift in the retail landscape. Macy’s just laid off 10,000 employees. Amazon just hired 100,000. Project I wants to find companies that have disruptive business models that understand the customer,” he said. As for the Ferris Wheel incubator, “we want to be the VC in residence,”

J Starting Up: An Introduction to Michigan’s Entrepreneurial Ecosystem. 9:30-11 a.m. April 25. Ma-

comb-Oakland University Incubator. John Eaton, client strategist for the Macomb-Oakland University Incubator, will discuss resources the state of Michigan offers including: business incubators, SmartZones, various support services, university technology acceleration and commercialization, and funding programs. Velocity Center, Sterling Heights. Free. Contact: Joan Carleton, phone: (586) 884-9324; email: macinc@oakland.edu. J 13th Annual MHCC Public Policy & Economic Forum Breakfast. 7:30-10

a.m. April 28. Michigan Hispanic Chamber of Commerce. Topic: “Growing Hispanic Influence in America: From the Ballot Box to the Grocery Store.” Speakers include Stacie de Armas, vice president of Strategic Initiatives & Consumer Engagement at Nielsen; and producer and media strategist Jenny Alonzo, who serves as the co-chair of the Nielsen Hispanic Latino Advisory Council. Also featured will be HBE owner and CEO Anita-Maria Quillen from Diversified Engineering & Plastics. MGM Grand, Detroit. $100. Contact: Laura Bates, email: policy@mhcc.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.

DEALS & DETAILS CONTRACTS

rehmann.com, us.intacct.com.

Franco, Detroit, a public relations firm, has been named agency of record for automotiveMastermind, an analytics and marketing automation technology provider in New York, N.Y.; and Avalon International Breads, Detroit. Website: franco.com.

J Know Advertising, Royal Oak, has been named agency of record for sausage manufacturer Dearborn Brand, Dearborn, and health care consultant HealthRise, Southfield. Website: knowadvertising. com.

J ProQuest LLC, Ann Arbor, a content curator, has a two-year agreement with University of Manchester, Manchester, UK, to preserve and promote its research with ProQuest’s Digital Archiving and Access Program. Websites: proquest. com, Manchester.ac.uk.

Acromag Inc., Wixom, a designer and manufacturer of industrial electronics, measurement and control products, announced the AcroExpress VPX6600 3U OpenVPX single board computer. Website: acromag.com.

J U.S. Tank Automotive Research Development and Engineering Center, Warren, has a partnership with AM General, South Bend, Ind., a global designer, engineer, manufacturer, supplier and supporter of specialized vehicles for military and commercial customers, to develop and demonstrate an autonomous driving vehicle for the military. Websites: army.mil/tardec, amgeneral.com. J Rehmann, Troy, a financial services firm, has partnered with Intacct, San Jose, Calif., an accounting software firm, to expand Rehmann’s outsourced accounting and advisory practice. Websites:

NEW PRODUCTS

STARTUPS

MBD Consulting LLC, Southfield, a consulting firm specializing in accreditation and regulatory survey preparedness and disaster management, has opened at 27389 Shagbark Drive. Phone: (313) 7153108. Website: mbdconsulting.org. J

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.

One Of The World’s Top Sandler Training Companies

More Calendar items can be found at crainsdetroit.com/events.

said Lewis. “We’ll have an office on one of the top floors when the building is finished. We want to be there to offer what resources we have. And as companies get to the point they need capital, we’ll help them out if there’s a fit. “On the one hand, it’s altruistic. On the other, if you can find that diamond in the rough that makes sense for us, we’ll do that, too.” Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

Learn how to create an ELITE team to take your company to the next level! Murray Feldman

WWJ Business Editor

Featuring Gerry Weinberg

Alana Nicol

CEO of President of Gerry Weinberg & Associates, Inc.

If you’re a CEO, President or Business Owner, who is: • frustrated with unpaid consulting and how long it takes to close business?

CAPITOL FROM PAGE 14

The Capitol was the 74th theater in the Butterfield Theatre chain. Eberson, born in what is now Ukraine in 1875, came to the United States in 1901 and rose to prominence as an architect after he opened a practice in Chicago in 1910. Haynes said new or renovated theaters like the Capitol have helped spark revivals in once struggling urban areas. “Economic development in any community starts with the arts. The Lincoln Center for the Performing Arts began as an urban renewal project,” he said.

“Look at what the Disney Theater has done for Los Angeles, or what the Opera House has done for Traverse City. This theater will become the focal point of 12,000, 13,000 or 14,000 people coming into town for a performance and then going out for dinner or drinks nearby. It’s going to be a real boon for the local economy,” he said. In fact, SkyPoint Ventures LLC, a venture capital and real estate development firm based in the Dryden Building, half a block away at the corner of Second Street and Saginaw Ave., is planning to open a large fine-dining restaurant on the ground floor and mezzanine of the Dryden

timed to the Capitol’s reopening. SkyPoint Ventures was co-founded by Phil Hagerman, the CEO of Flint-based Diplomat Pharmacy Inc. (NYSE: DPLO), and his wife, Jocelyn, whose Hagerman Foundation donated $4 million toward the Capitol’s renovation. In 2016, the Flint-based C.S. Mott Foundation announced a grant of $15 million for the Capitol Theatre project as part of $100 million it pledged to the city in the wake of the water crisis. The project also received $5.5 million from the Michigan Strategic Fund. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

• unsure your existing salespeople have what it takes to grow your company? • disappointed that your vision isn’t met?

Wednesday, May 17th 11:30 AM – 2:00 PM Andiamo Bloomfield Twp. Investment: Sponsored by Gerry Weinberg & Associates and WWJ Newsradio

To Register or For More Information, Visit: www.gerryweinberg.sandler.com or Call (248) 353-4030 | RSVP Required Registration must be confirmed by a team member from Gerry Weinberg & Associates, Inc.

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 1 0 , 2 0 1 7

CRAIN'S LIST: MICHIGAN'S LARGEST EMPLOYERS

Ranked by full-time employees January 2017 Rank

Company Address Phone; website

Top executive

Michigan employees 2017/2016

Worldwide employees 2017/2016

Type of business

General Motors Co. 300 Renaissance Center; Detroit 48265 (313) 556-5000; www.gm.com

Mary Barra chairman and CEO

52,811 48,594

225,000 215,081

Automobile manufacturer

Ford Motor Co. 1 American Road; Dearborn 48126 (313) 322-3000; www.ford.com

Mark Fields president and CEO

48,000 NA

201,000 199,000

Automobile manufacturer

State of Michigan 3042 W. Grand Blvd., Cadillac Place, Suite 4-400; Detroit 48202 (313) 456-4400; www.michigan.gov

Rick Snyder governor

44,540 44,665

NA NA

FCA US LLC 1000 Chrysler Drive; Auburn Hills 48326-2766 (248) 576-5741; www.fcanorthamerica.com

Sergio Marchionne chairman and CEO

34,300 34,040

83,800 81,865

Automobile manufacturer

University of Michigan Ann Arbor 48109 (734) 764-1817; http://umich.edu/

Mark Schlissel president

33,591 32,474

48,000 46,420

Public university and health system

U.S. government 477 Michigan Ave.; Detroit 48226 (313) 226-4910; www.usa.gov

28,813 28,494

NA 1,937,614

Federal government

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

John Fox president and CEO

27,318 26,190

Health care system

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

Gwen MacKenzie senior VP, Ascension Health, Michigan

23,103 20,252

23,103 11,286

Health care system

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

Richard Gilfillan president and CEO

21,944 22,989

NA 97,170

Health care system

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

Philip Incarnati president and CEO

21,688 B 21,688

Health care system

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

Richard Breon president and CEO

20,707 19,757

NA NA

Health care system

U.S. Postal Service 1401 W. Fort St.; Detroit 48233-9998 (313) 226-8678; www.usps.com

Lee Thompson district manager

18,568 17,450

508,908 493,381

Postal service

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

Wright Lassiter III president and CEO

18,479 15,374

18,520 NA

Health care system

Rock Ventures 1050 Woodward Ave.; Detroit 48226 (800) 251-9080

Dan Gilbert chairman and founder

16,617 C 14,237

28,742 C 26,114

Michigan State University East Lansing 48824 (517) 355-1855; www.msu.edu

Lou Anna Simon president

11,840 NA

NA NA

St. John Providence 28000 Dequindre ; Warren 48092 (586) 753-753-0500; www.stjohnprovidence.org

Jean Meyer president & CEO

10,687 NA

St. John Providence is a member of Ascension, the largest nonprofit health system in the U.S. and the worldâ&#x20AC;&#x2122;s largest Catholic health system.

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

Tony Tedeschi CEO

10,431 11,418

10,431 12,497

Health care system

Magna International of America Inc. 750 Tower Drive; Troy 48098 (248) 631-1100; www.magna.com

Don Walker CEO

10,133 9,609

NA 139,000

Automotive parts supplier

DTE Energy Co. 1 Energy Plaza; Detroit 48226 (800) 235-8000; www.dteenergy.com

Gerard Anderson chairman and CEO

9,780 9,373

NA 9,854

City of Detroit 2 Woodward Ave. Coleman A. Young Municipal Center; Detroit 48226 (313) 224-3700; www.detroitmi.gov

Mike Duggan mayor

9,221 NA

NA NA

Blue Cross Blue Shield of Michigan/ Blue Care Network

Daniel Loepp president and CEO

8,004 8,077

Health care insurer

State government

Umbrella organization managing a portfolio of companies, investments and real estate Public university

Energy and energy-technology company

City government

600 E. Lafayette Blvd.; Detroit 48226 (313) 225-9000; www.bcbsm.com

CMS Energy Corp. 1 Energy Plaza; Jackson 49201 (800) 477-5050; www.cmsenergy.com

Patti Poppe president and CEO

7,366 7,394

NA 7,800

Energy provider

Dow Chemical Co. D 2030 Dow Center; Midland 48674 (989) 636-1000; www.dow.com

Andrew Liveris chairman and CEO

7,203 5,974

56,000 49,500

Specialty chemicals, advanced materials, agrosciences and plastics

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

Dennis Swan president and CEO

6,968 6,616

NA NA

Health care system

Detroit Public Schools Community District 3011 W. Grand Blvd., Fisher Building; Detroit 48202 (313) 873-3111; www.detroitk12.org

Steven Rhodes, transition manager; Alycia Meriweather, interim superintendent

6,200 6,300 E

NA NA

Public school system

Ilitch companies 2211 Woodward Ave.; Detroit 48201 (313) 471-6600; www.ilitchcompanies.com

Christopher Ilitch president and CEO, Ilitch Holdings Inc.

6,200 5,900

22,494 22,446

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

This list of Michigan employers encompasses companies with headquarters in the state. Number of full-time employees may include full-time equivalents. It is not a complete listing but the most comprehensive available. Crain's estimates are based on industry analysis and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies. NA = not available.

B Crain's estimate. C Includes Greektown Casino. D Dow Chemical Co. is expected to merge with DuPont Co. in August. E Detroit Public School estimate.

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 1 0 , 2 0 1 7

SPECIAL REPORT: SMALL BUSINESS

Lauren Yacteen, who started Bekka Valley Mediterranean Foods nearly three years ago, stirs hummus in an industrial blender that makes about 30 pounds of the dip at a time. PHOTOS BY ANNALISE FRANK/CRAIN’S DETROIT BUSINESS

Upping their game

Bekka Valley grows from potlucks to Comerica Park By Annalise Frank afrank@crain.com

Lauren Yacteen never had trouble sleeping before she left her stable full-time job as a labor and delivery nurse and dove into entrepreneurship. But now her eyes flick open often throughout the night, worries about Bekka Valley Mediterranean Foods, the prepared foods company she started 2 1/2 years ago, passing through her mind. “The worry and the stress of it; the food business is not an easy business,” Yacteen said. The trials of starting a business with high startup costs mean Yacteen, 50, hasn’t been paid yet. She invests money earned back into the company instead. But that could change this year. Bekka Valley’s sales for the first quarter of 2017 were double its sales for all of 2016, Yacteen said. She didn’t divulge sales or revenue fig-

“It’s got that taste, you know, that homemade small batch taste. The chips are not fried, they’re baked, and there are a few other big baked chips … but once you try mine you see the difference.” Lauren Yacteen

ures, but said she expects revenue to at least quadruple this year. The battle for traction in the food space is hard fought, but Yacteen’s and her friend and kitchen guru

Karen Romolino’s long hours standing in the kitchen whipping hummus, cutting vegetables for tabbouleh and concocting Mediterranean dressings and marinades have produced results. It’s paying off. Bekka Valley’s hummus, pita chips and marinades will be featured at Comerica Park this season. Yacteen recently signed a contract to sell the food products to New York-based Delaware North, which operates food, beverage and retail services for the Detroit Tigers’ ballpark. It plans to sell shawarma sandwiches with shawarma nachos as a possibility, Yacteen said. Yacteen, Romolino and recent hire Megan Alter made 100 pounds of pita chips March 28, after the company requested an arsenal for a sampling event March 30 at Comerica Park in advance of the Detroit Tigers’ opening day April 7.

Lauren Yacteen derived the name for her company Bekka Valley Mediterranean Foods, from the Bekaa Valley in Lebanon. Bekka Valley is cracking the grocery store market, too. Busch’s Fresh Food Market in Rochester Hills started selling Bekka Valley products in January. Bekka Valley also sells pita chips, marinades and varieties of hummus at The Cheese Lady in Rochester, Holiday Market in Royal Oak, Market Square in Birmingham and Market Fresh in Beverly Hills. A little less

than half of the company’s revenue comes from these gourmet grocers, the first of which Yacteen and Romolino met at farmers markets. Representatives from The Cheese Lady and Market Square approached Bekka Valley, asking if they could sell the products — a feat in an increasingly competitive prepared food space. SEE BEKKA, PAGE 18

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 1 0 , 2 0 1 7

BEKKA FROM PAGE 17

“I thought, ‘Wow, it’s gonna be that easy to do?’” Yacteen said. Bekka Valley has gone from making hummus in two-pound batches to 30-pound batches. Yacteen, Romolino and their staff can make upward of 180 pounds of pita chips in a day, selling about 250 9-ounce bags of chips each week. They also sell 400-450 containers of hummus each week and 100 of garlic dip. Then there’s the salads, marinades

and other products. The majority of Bekka Valley’s sales have come from its place of origin, Beaumont Health. The health system now sells fattoush salads, hummus and pita snack packs and more at the Beaumont Hospital Garden Café & Java West at Beaumont Hospital’s Troy campus, Beaumont Hospital Mackinac Room in Royal Oak, Sola Life and Fitness in a Beaumont building in Rochester Hills and Beaumont’s Sterling Pizza Café. When Yacteen worked as a nurse full time at Beaumont Health Troy, she would bring in

hummus, shawarma and other dishes for potlucks. As more co-workers egged her on, Yacteen started to sell her products informally and then tested her hummus at farmers markets. When strangers responded well to the product, she leapt in. What Yacteen lacked in business knowhow she made up for in long hours, solid recipes and contacts who helped her along the way, including her husband, an engineer who used to own his own business; and the Michigan State University Product Center, which offers entrepreneurs advice on getting

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into the food industry. After a space at Beaumont Troy didn’t work out — it would have cost $850,000 to $1 million to build out — Yacteen leased a 1,100-square-foot empty space in a strip mall at 47054 Dequindre Road in Shelby Township. She built a kitchen there for about $78,000, including equipment, using money from her savings account. Work was already underway supplying hospital cafeterias. With new hires, Yacteen is up to six fulland part-time staff members at the Shelby Township kitchen. She anticipates Bekka Valley will be on shelves at the Busch’s in West Bloomfield Township in the next month and its Farmington location this summer. The company has also catered, but that aspect of the business has gone to the wayside as it ramps up retail production, which is still done by hand — bottling and all — in the Shelby Township kitchen. The farmers market stands where Yacteen and Romolino like to network and spread the brand by word of mouth are still lucrative and allow for interaction with customers, but they take up precious production time, Romolino said. Bekka Valley plans to offer products every other week at farmers markets in Farmington, Birmingham, Rochester and Sterling Heights.

Competitive industry

Jeanine Raquet

Thomas White

Gene Boehm

Executive Vice President, Insurance

Senior Vice President, Financial Services

Vice President, Strategy and Direct

- Banking and Life Insurance

Insurance and Sales Operations

AAA - The Auto Club Group (ACG) Joseph J Richardson Jr., CEO of AAA - The Auto Club Group announced that three new senior executives have joined the existing leadership team. Jeanine Raquet joins the organization as Executive Vice President, Insurance Operations and Distribution. Raquet has 32 years of experience as an accomplished leader within all areas of the insurance business including financial services, sales, agency operations, product and distribution functions. She was most recently with Allstate Insurance Company. Thomas White joins the organization as Senior Vice President, Financial Services - Banking and Life Insurance. White previously held senior leadership roles in the US and abroad for Zurich Insurance Group and was CEO of Zurich’s Farmers Life managing more than 1,000 employees and $1 billion in revenues. Gene Boehm joins the organization as Vice President, Strategy and Direct Insurance and Sales Operations. Boehm was previously with PriceWaterhouseCoopers where he led teams engaged in customer segmentation and multi-product direct and retail distribution strategy.

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Plante Moran, one of the nation’s largest public accounting and business advisory firms, is pleased to announce that Sharon Ulep has joined the firm as a principal in its healthcare consulting strategy and operations practice. Ulep, who will work out of the firm’s Southfield office, specializes in healthcare consulting and process improvement program deployment with a focus on quality, patient safety and process efficiencies using Lean and Six Sigma methodologies.

President/CEO Companies

Mark Lockwood has been promoted to President/CEO of the Lockwood Companies. Mark is third generation in the Southfield-based developer, builder and manager of multi-family and senior housing, succeeding his father Rodney Lockwood, Jr., who remains as Chairman. Lockwood Companies operates in Michigan, Georgia and South Carolina.

Bekka Valley isn’t the only brand in the increasingly crowded hummus section. “We’re comparable to a lot of the better Mediterranean restaurants,” Yacteen said. “It’s made fresh there and it’s eaten. But as far as container hummus goes, (ours) is made without preservatives. ... It’s got that taste, you know, that homemade small batch taste. The chips are not fried, they’re baked, and there are a few other big baked chips … but once you try mine you see the difference.” Metro Detroit’s packaged food market has become highly competitive in the last five years, said Brenda Reau, senior associate director for MSU Product Center. A burgeoning entrepreneur can spend a fortune launching a product by the time they get through the initial investments and regulatory components, she said — especially with food, which has a small profit margin and greater cost per unit with small-scale production. “We would want to see them think through that before they just create the product and try to sell it,” Reau said. “They should do some of their own market research … see how many similar products are there like that on the shelves.” Yacteen and her team haven’t done any paid advertising. “I don’t have the money to do that,” she said, standing in her kitchen after whipping up 30 pounds of hummus and as employees packaged salads to be delivered to Beaumont cafeterias. Even advertising customers often take for granted, like installing a sign above their storefront, would cost $3,000 they don’t have. Yacteen has three main goals. One is figuring out a way to use high-pressure pasteurization so the hummus lasts longer than its current two weeks. She also wants to move to a kitchen five times bigger when her lease is up in April 2018. The third is bursting out of what she called the company’s “bubble”: Birmingham, Royal Oak, Rochester and Shelby Township. “We need to go whoop—” she said, expanding an imaginary area framed by her hands as she demonstrated growing out into more metro Detroit neighborhoods. “We need to go a little bit bigger now.” But first, there’s more hummus to be made.

Page 1919

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

April 10, 2017

MARIJUANA

JOB FRONT

Boji says he plans to lease up to seven of them to large-scale growers with up to 1,500 plants in communities like Dearborn Heights, Redford Township, Warren, Inkster and others. He said he currently makes no money on them from rent because they are used for storage and only house a small number of employees from another company he owns. However, with high demand for growing space, Boji says he expects to charge $8 to $12 per square foot, well above the typical $4 to $5 for what that space could command for other uses. “I’m barely collecting any rent because they are my own people in there and I can move them to another place,” he said. “That’s $250,000 or $300,000 per year vs. zero.”

POSITIONS AVAILABLE

FROM PAGE 1

Difficult to come by Michael Davidson, senior managing director and an industrial broker focusing on Macomb County for the local office of Newmark Grubb Knight Frank, says medical marijuana clients in Warren he worked with paid hefty prices for their properties. “There are only a few left, and they are in the $70 to $80 per square foot range, more than twice what they would normally be going for,” he said. “I’ve done four sales, all on buildings that were probably worth $30 to $35 per square foot and sold for substantially more than that because they fit the requirements to be a medical grow house.” That doesn’t fluster the buyers, who generally pay in cash because they typically can’t get traditional bank financing, he said. “They’ve got to be making good money on it; the prices go up, and the buyers don’t blink.” Kris Pawlowski, principal for Southfield-based brokerage firm Signature Associates Inc., has been involved in three medical marijuana deals in Troy: two growing operations leasing space, and one that bought a building, all in the area of Maple Road and Stephenson Highway. “They qualify for a very small percentage of the market,” he said. Ben Wilkiemeyer, an agent/broker also at Signature Associates, has clients in Warren who are looking for smaller, standalone buildings between 5,000 and 10,000 square feet. “That type of building is very difficult to come by,” Wilkiemeyer said. “Drive up and down Nine Mile Road and there are a hundred different buildings in that size range, but there are houses behind them.”

Very secretive It’s all a function of a medical marijuana industry subsection that prefers to operate in the dark as much as possible for various reasons ranging from fear of local stigma to theft of a valuable product. And brokers know it, too; none of the half-dozen who spoke with Crain’s disclosed specifics on what buildings they sold to medical marijuana operations, their purchasers or where they helped such businesses lease space.

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Ron Boji plans to lease buildings to large-scale growers.

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.

Local patients

Please refer to the website for the full job description and benefits. Submit information for this job posting to: jobs@rscd.org

Here’s how counties in Metro Detroit compare to the number of medical marijuana patients statewide. County

Livingston

3,955

Macomb

22,779

Oakland

28,329

Washtenaw

9,876

Wayne

40,141

State total

Michigan

245,931

Source: State of Michigan

“A growing operation is very secretive and quiet, and they want to keep it that way,” said David Greene, an independent real estate broker and medical marijuana advocate who has represented a handful of clients in that industry.

Rules vary In Troy, city attorney Lori Grigg Bluhm said the city estimates there are 33 buildings housing 59 growing operations. Some of them are on Rankin Drive and Park Street. Jay James, a Commerce Township building official, said there are about 40 in the west Oakland County community. Mike Fisher, chief assistant city attorney for Livonia, said there are “fewer than 10” there. Warren Mayor Jim Fouts said two growers have been approved to operate in the city and 29 have applied, with the majority of them located in the southern portion. “We are pretty strict” in our ordinance, Fouts said. And in Detroit, 24 have applied to grow marijuana; of those, seven are currently operating while awaiting city approval, according to David Bell, director of the city’s Buildings, Safety Engineering and Environmental Department. Rob Huth, Shelby Township’s attorney and a partner with Clinton Township-based Kirk Huth PLC, said Shelby has two growers operating in its borders. Those are among the communities seeing the highest interest level among medical marijuana growers, brokers said. The rules in those communities vary. In Warren, for example, marijua-

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Ben Wilkiemeyer: Mike Davidson: Buildings hard to Clients paid hefty come by. prices in Warren.

na facilities cannot be within 500 feet of a school, residence or church (an original version of the ordinance required that distance to be 1,000 feet). It also requires facilities be located in industrial areas. In Ypsilanti, they are prohibited from being within 1,000 feet of a school.

Voters approved The groundwork for the Michigan Medical Marijuana Act was laid in 2008, when voters approved a ballot measure allowing the use of medical marijuana. Lawmakers then adopted a law a month later that at times has been criticized for being too ambiguous about key issues, such as the legality of dispensaries. The law was amended last year to clarify that dispensaries and edible forms of medical marijuana are legal. The revisions also create different license classes for growers: Class A, up to 500 plants; Class B, up to 1,000 plants; and Class C, up to 1,500 plants. It also establishes a 3 percent tax, in addition to the 6 percent sales tax, on purchases at dispensaries. A fiscal analysis of the legislation last year estimated $24 million a year in revenue from the 3 percent tax and $50 million a year from the 6 percent tax.

Less taboo Brokers say the interest from pot growers is keeping them busy. Signature Associates’ Wilkiemeyer says he fields three or four calls a week from them looking for space. Davidson, the NGKF broker, gets up to seven inquiries on buildings he has listed. And it’s apparently becoming less taboo. “A year ago they were very coy” about what they wanted to use the space for, Davidson said. “Now they just say they want to grow.” 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 1 0 , 2 0 1 7

INSURE FROM PAGE 1

Cowser said he uses a seven-day plan to get his 1998 Dodge Ram pickup truck registered — and then drives without insurance for the rest of the year. The reason? An insurance agent quoted him $1,000 down and $500 per month to insure a truck he described as a “rust bucket piece of crap.” “At the end of the day, $500 a month for no-fault coverage is ridiculous,” he said. “Those rates only happen to people who live in Detroit.” The Michigan Department of Insurance and Financial Services is considering ending North Carolina-based Integon Insurance Co.’s license to write seven-day plans for L.A. Insurance, which operates 30 storefronts in Detroit alone. After years of allowing seven-day plans, state insurance regulators now contend the plans are “designed” to skirt Michigan’s unique “no fault” auto insurance law and violate multiple provisions of the code. Insurance industry officials contend a prohibition on seven-day plans will just lead to new ways to get around the requirement as long as premiums remain unaffordable for the working poor. “If you ban seven-day policies, I could simply go get a six-month policy, register my vehicle and cancel that policy the next day,” said Pete Kuhnmuench, an insurance industry lobbyist and executive director of the Insurance Alliance of Michigan. The state of Michigan doesn’t track continuous insurance coverage on a vehicle, and seven-day plans aren’t the only ways motorists are legally evading paying monthly auto insurance premiums. “Any policy can be a seven-day policy because there’s no prohibition from canceling it after a week,” said Terri Miller, general manager of the Michigan Auto Insurance Placement Facility, which sells coverage to higher-risk drivers. Some auto dealers have joined insurance companies in opposing regulatory or legislative attempts to prohibit sale of seven-day plans. “If you do away with that, it will probably end up costing the economy money in car sales — sales and use tax dollars,” said Mark Snethkamp, president and owner of the Snethkamp Automotive Group. “We really need to fix the real problem (of cost), rather than attack the other parts of it.” Snethkamp’s Chrysler, Dodge, Jeep and Ram dealership on Woodward Avenue in Highland Park sells new and used vehicles to drivers who often pull out of his lot and head straight to an insurance agency that sells seven-day plans. “A lot of them are doing it to have some time to shop the market and get the best policy for them,” Snethkamp said. “It serves a good purpose for the car dealers.”

Studying the problem The use of seven-day plans to bypass Michigan’s continuous coverage law has caught the attention of Secretary of State Ruth Johnson’s office. Most insurance coverage for

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

L.A. Insurance agent Takara Thompkins, right, explains the terms of a seven-day insurance policy to Tamika Fizer of Oak Park.

cles were legally registered. David Richmond, legislative liaison for the Secretary of State, said the department is legally authorized to verify auto insurance only “one day a year when you come in and attempt to buy your plate.” “So if an individual decides to cancel and they don’t happen to have their plate run (by police) for 11 months until they come back to the branch (office), they’ve beaten the system,” Richmond said during Feb. 9 testimony before the House Insurance Committee. The remaining 43 percent of the policies were deemed fraudulent and the license plate registrations were canceled by the Secretary of State’s office. Johnson’s office is working with auto insurers and law enforcement agencies to create a daily electronic insurance-reporting system — as opposed to the current reporting every 14 days — so that coverage can be verified in real time. “The department is not advocating for the elimination of the seven-day product in the marketplace,” Richmond said. “But the question should be asked: Is that appropriate for registration purposes?”

An industry debate

Michigan’s 7 million registered vehicles is transmitted electronically every 14 days to the Secretary of State. Johnson’s office recently audited 719,819 paper insurance forms submitted between July 2015 and June 2016 and found 239,442 — or 33 per-

cent — were either uninsured, no longer valid or fraudulent, according to a report submitted to state lawmakers. Of that group, 90,701 seven-day policies were submitted to register vehicles and 40,972 policies were canceled sometime after the vehi-

Anthony Yousif, founder and CEO of L.A. Insurance, said his company only sells seven-day plans in Michigan because drivers in Detroit and other urban areas can’t afford costly unlimited medical coverage. “Let the seven-day go away — but make it go away on its own merit,” Yousif told Crain’s. “If you make the rates go down, nobody’s going to buy it, because nobody’s going to need it.” Yousif contends seven-day plans are a legitimate product to give drivers a week to shop around for a traditional six-month plan. It’s an argument one insurance industry official doesn’t buy. “They will tell you it’s designed for people to decide what coverages they really need. They take a week to think about. That’s ridiculous,” said

Miller, of the Michigan Auto Insurance Placement Facility. Miller runs an entity set up by the Legislature to be Michigan’s auto insurer of last resort for drivers who can’t get standard insurance from carriers because of bad driving records, poor credit scores or lack of previous insurance coverage in the previous six months. The only catch is the MAIPF demands 40 percent down on a sixmonth plan. It writes personal vehicle plans for State Farm, Citizens, Auto Owners and AAA. “We need that 40 percent to cover the time to underwrite a policy so we have enough premium to pay for the coverage they’re taking,” Miller said. For Fizer, her other option at L.A. Insurance was a $1,395 six-month plan through the MAIPF. But she said the 40 percent down payment of $558 would have drained her bank account last week. “Most of my family no longer really has insurance nowadays,” the Oak Park woman said. “They just ride without it.” Takara Thompkins, the primary agent at an L.A. Insurance store at Eight Mile and Lahser roads, gave Fizer a quote for a six-month plan. On a monthly basis, Fizer would have had to pay $238 per month — $17 more than what she paid for a week of coverage. But the $558 down payment was financially daunting. “We have quite a few customers who come in and consistently renew the seven-day insurance plan because that works with them financially,” Thompkins said. “When they see those down payments (for sixmonth plans), they’re discouraged.” MAIPF’s down payment also accounts for drivers who end up using the insurance to get registered and then drop the plan to avoid another payment, Miller said. About 48 percent of the MAIPF’s 12,000 plans were written for drivers in Detroit and adjacent cities in Wayne County, Miller said. Of those Detroit-area drivers, 43 percent canceled their plans before the end of the six-month term, she said. “That means that they basically put in a deposit and get their certification and their tabs and then they don’t pay us again,” Miller said. “They never pay another dime.”

The big question: cost Kuhnmuench’s group and insurance companies want the Legislature to rein in medical costs by capping the amount of money hospitals, physicians and rehabilitation specialists can charge for injuries sustained in an automobile accident. But that’s a debate between the politically powerful medical and insurance lobbies that has been raging in Lansing for years — a stalemate that has shown no clear signs of subsiding. Meanwhile, Detroiters find ways to navigate the no-fault system in order to have a vehicle that gets them to work — and their children to school. “Until the Legislature sees fit to put forward a meaningful reform package, this is going to continue,” Miller said. “It’s the death spiral.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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VISAS FROM PAGE 3

“It’s not from any actual policy change, because there’s been very little, but from the threatening environment and language from the White House. So we’re aggressively protecting our people. We’ve made the decision to expedite the process by immediately filing for an H-1B instead of waiting like we normally do,” he said. Each year, the federal government makes 65,000 H-1B visas available to workers with bachelor’s degrees and an additional 20,000 for foreigners with master’s degrees or higher. However, the demand — applications are sponsored and submitted by employers — has far outweighed supply since the Great Recession. More than 236,000 applications were submitted last year for use in 2017. A computer program randomly chooses which applications can proceed for approval. In 2015, 113,603 H-1B applications were approved — nonprofit and government research workers as well as workers in higher education are exempt from the cap. This year, that number is expected to climb thanks to the White House’s tough talk on visas and free trade. “I do think the number (of applications) will be higher this year because of President Trump’s threats on immigration and because H-1Bs are generally a more secure visa than others,”

said Michael Nowlan, partner and co-leader of the immigration practice group at Clark Hill PLC in Detroit. “While we haven’t seen any discussions about visas tied to the North American Free Trade Agreement, they could be on the table.” The non-immigrant NAFTA Professional visa, known as the TN visa, allows citizens of Canada and Mexico to work in the U.S. for U.S. or foreign employers. TN visa holders may live in the U.S. for their authorization period or in Canada or Mexico and commute across the border for work. Canadians with a TN visa cross the border into the U.S. roughly 790,000 times each year. Many come to Southeast Michigan to work in the auto sector. Mexicans use it to a lesser extent, with only 79,000 TN visa entries annually, according to data provided by Detroit-based law firm Miller Canfield Paddock and Stone PLC. Nowlan said many employers are looking to switch their TN visa-holder employees to an H-1B because TN visas can be revoked at the border, don’t qualify for holders seeking permanent green card status like H-1Bs and can be undone by a pullout of NAFTA initiated by the president where H-1B changes need congressional approval. Hicks said when Llamasoft hires a foreign employee he or she tends to hold another more temporary visa and generally wait for that visa to near expiration before applying for an

H-1B because it is expensive — costing up to $10,000 for the application fee alone. “Most of our (foreign-born) employees, especially those out of college, come to us on a two-year work visa,” Hicks said. “So that gives them two years to prove themselves, and the (H-1B) process is time-consuming and expensive. Now we’re looking to sponsor them right away, get the H-1B application out the door as soon as we can and sponsor a green card.” While Hicks says the program is vital for his company to remain competitive and hire — Llamasoft has had jobs remain open for more than a year due to lack of available talent — it has been used for unsavory, yet not illegal means, by major companies, sparking harsh criticism from Trump. At campaign rallies in 2015 and 2016, Trump introduced laid-off Americans who were asked to train foreign replacements including at The Walt Disney Co., calling the practice “outrageous” and “demeaning,” The New York Times reported. Disney and others reportedly were issued H-1Bs, only to train those employees in the U.S. before shipping those jobs to countries like India. It’s not against the rules because the U.S. jobs were eliminated, therefore not displacing them with a foreigner working in the U.S. Under Trump, ISCIS and DOJ have said they will focus on companies con-

DCFC FROM PAGE 3

The NASL and USL have provisional Division II status this year that was granted by the United States Soccer Federation, the Chicago-based governing body known as U.S. Soccer. There currently is no Division III league, the lowest level of professional soccer, but USL announced plans earlier this year to launch a D-3 league in 2019. Both NASL and USL still have to meet undisclosed U.S. Soccer criteria to remain D-2 leagues beyond this season, and that uncertainty clouds Detroit City’s plan. “The soccer landscape in the U.S. continues to evolve every day. There are still a lot of details that need to be clarified regarding the D-2 and D-3 leagues so we can’t really say right now that there’s any particular preference,” Kropp said. Kropp did say Detroit City has “talked extensively” with the North American Soccer League. The NASL, which began play in 2011, currently has eight teams and players reportedly earn between $15,000 to $100,000 a season. It has deals for games to air on beIN Sports and ESPN3, and clubs have local TV deals a league spokesman said. NASL is averaging nearly 6,000 fans per game, and its split-season format is 16 spring and 16 fall games. Rosters are 30 players. NASL interim Commissioner Rishi Sehgal said the league will add four teams going into 2018, and intends to eventually be at 18 to 20 clubs. The NASL said its expansion fee is more than $1 million, but less than $10 million, but would not be more specific. Sehgal said he’s attended a Detroit

COURTESY DETROIT CITY FC

The Detroit City FC inked a deal in 2015 to begin play at the old Keyworth Stadium in Hamtramck. City game, and is impressed by what the owners have created. “What they’re doing is an exciting project. They started the club for the right reasons,” he said, adding that Detroit is a market that NASL would like to be in. The other option for Detroit City is the USL, which also launched in 2011, but has 30 teams and a developmental relationship with MLS, which owns and operates 10 USL clubs. The USL said its franchise fee is $5 million. Its clubs play 32 matches a season. Last season, they averaged 3,439 fans per game — noticeably lower than Detroit City’s average. USL games air on ESPN3 and ESPNU, and on SiriusXM satellite radio. An above-average USL player is estimated to earn $2,000 a month, with some making $3,000 and more, according to The Washington Post. The league is adding a Nashville team in 2018. It said it will announce later this year its expansion plans

through 2020. In the meantime, Kropp and his four co-owners need to find a wealthy benefactor. In the past, the owners have had what Kropp termed a “couple of serious offers” but they were not a proper fit. “It’s difficult to find the right partner,” he said. The team isn’t disclosing names of who it’s talking to. U.S. Soccer’s criteria for a club to qualify as a D-2 team is that the lead owner have at least a 35 percent stake and be worth at least $20 million, Sports Illustrated reported on March 30. To be a D-3 team, the lead owner must have a $10 million net worth. Kropp is a project manager at Henry Ford Health System, and his co-owners aren’t that rich. DCFC, whose nickname is Le Rouge, doesn’t have a timeline for turning professional. “There are active conversations under way,” Kropp said. “We’re ready to take this to the next level, as soon as

sidered “H-1B dependent,” meaning 15 percent or more of their workers are on H-1B visas. The government is particularly interested in technology-outsourcing companies such as Infosys and Tata Consultancy Services, among others. Tata operates offices in Midland and Troy. These companies offer outsourcing services and employ large numbers of workers from India. And as long as they pay their workers at least $60,000 a year, they are not required to prove they could not find an American worker. That figure was established by Congress more than 20 years ago and is significantly lower than most technology worker salaries today. In Michigan, the average salary for an H-1B visa application, including extensions, in 2015 was $72,687.53, according to the U.S. Department of Labor’s Office of Foreign Labor Certification. The most common jobs were computer systems analysts, software developers and computer programmers. Most Southeast Michigan companies, like Llamasoft, are not considered H-1B dependent. Only 13 of Llamasoft’s roughly 250 U.S.-based employees hold an H-1B visa. Aimee Guthat, a senior attorney at immigration-focused law firm Fragomen, Del Rey, Bernsen & Loewy PLLC in Troy, said her office has fielded more calls since the Novem-

ber election about immigration issues, including H-1Bs. “It’s been insane. There’s been extra meetings, more emails, more conference calls,” Guthat said. “There’s just heightened anxiety over immigration in general from the (administration’s) posturing. I’m not expecting warm and fuzzy moving forward. This is a very different climate than I’ve seen in the 17 years I’ve been practicing.” Guthat, however, thinks the anxiety may lead to fewer H-1B applications this year, due to immigrants abandoning staying in the U.S. for more friendly countries. “While there hasn’t been much in policy, at least nothing with teeth, the perception on immigration has a lot of people afraid for what the future holds and I’ve had discussions with people maybe looking to leave and seek employment outside the U.S.,” Guthat said. “So I think the application totals could go either way.” For Hicks, this further constricts the talent bottleneck. “We always have trouble attracting the very best workers. We’re in a global talent war, and this posturing is not victimless,” Hicks said. “It’s suicidal for the American economy. We develop supply chain analysis software for the U.S. military, for God’s sake. It really feels like they are out to hurt and destroy my company.”

we find the right partner. It would be a big change, but we’re ready for it. We’ve laid the groundwork over the past few years.” Detroit City started playing in 2012 at Cass Tech, and the owners hoped to draw a couple of hundred fans. Instead, they started with 1,000. The team’s popularity soared, and its fans — the fiercest cadre of which are known as the Northern Guard, with a reputation for European-style loudness, smoke bombs and profanity — have grown so much in number that the club inked a deal in 2015 to begin play at the old Keyworth Stadium in Hamtramck. A crowd-funding investment campaign raised more than $700,000 to make improvements and expand seating at the venue. Even with its capital projects — a replacement artificial turf field is next at a cost $300,000 to $700,000 — the team is profitable, Kropp said. The team has sustained 40 to 45 percent growth annually in gross revenue, he said. Its operating budget for this season will top $1 million for the first time. Here’s how the team’s revenue matrix works: A quarter comes from merchandise sales while 45 percent is from season and single-game ticket sales. Another quarter is from corporate sponsorships, and the final five percent is from concession sales. When the club turns professional, it will need a full-time paid coaching staff, too. Currently, DCFC Head Coach Ben Pirmann is a paid part-timer whose full-time job is an assistant coach with Michigan State University’s men’s soccer team. The team now has five full-time paid front office staffers: A general manager, media director, sales executive, operations coordinator and a community liaison.

Turning professional would require more full-time staff, Kropp said. The team’s basic business strategy for now is to stay focused on fan experience and increase DCFC’s visibility, Kropp said. “When people come to a game they get hooked because of the atmosphere there,” he said. Like any other sports team, DCFC also is working to increase corporate sponsorship dollars and season ticket revenue. A year ago, the team sold about 2,000 season tickets. Kropp said it expects to sell more in 2017. DCFC’s success can be measured in its increasingly sophisticated ticket pricing: A season ticket was $35 in 2012. This season, the top-level season ticket is $150 and includes perks such as priority midfield seating, priority entry into the stadium, parking, and access to the team’s international friendly against Ireland’s Glentoran FC on May 27. The $150 “Gold Card” was launched because fan feedback indicated that there was demand for a premium option, Kropp said. There also is a basic $70 season ticket, and an $85 pass that includes a team scarf. Those don’t include the Glentoran game. Single game tickets have been $10 a game for a few seasons. They began at $5 a game in 2012. DCFC opens its 2017 season with friendlies — soccer terminology for exhibition matches — on the road against Saginaw Valley State University on April 15 and at Lawrence Tech on April 30. After a May 6 home friendly against the Dayton Dynamo, DCFC begins league play on May 12 at Keyworth Stadium against the Milwaukee Torrent.

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

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

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 1 0 , 2 0 1 7

ACA

FROM PAGE 3 www.crainsdetroit.com Editor-in-Chief Keith E. Crain Executive Vice President KC Crain Publisher/Editor Ron Fournier, (313) 446-1674 or rfournier@crain.com Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Director, Crain Custom Content Kristin Bull, (313) 446-1608 or kbull@crain.com Product Manager/Marketing and Events Kim Winkler, (313) 446-6764 or kwinkler@crain.com Digital Product Manager Carlos Portocarrero (313) 446-6056 or cportocarrero@crain.com Membership Director Nancy Hanus, (313) 446-1621 or nhanus@crain.com News Editor Beth Reeber Valone, (313) 446-5875 or bvalone@crain.com Special Projects Editor Amy Elliott Bragg, (313) 446-1646 or abragg@crain.com Design and Copy Editor Beth Jachman, (313) 446-0356 or bjachman@crain.com Research and Data Editor Sonya Hill, (313) 446-0402 or shill@crain.com Newsroom (313) 446-0329, FAX (313) 446-1687, TIP LINE (313) 446-6766

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Despite anecdotal stories of some small businesses paying increases of 30 percent or more, the average annual premium increase for groups under 50 employees in Michigan has ranged from 1 percent to 9 percent since 2010, according to the state Department of Insurance and Financial Services. Average increases in Michigan have dropped from 8 percent in 2014 to 6 percent in 2015 to 1 percent last year, DIFS said. A 2014 report by the Center for Healthcare Research and Transformation in Ann Arbor found premium increases for small groups averaged 2.8 percent annually from 2009 to 2014. About 33 percent of small firms under 50 employees in Michigan offer health insurance to employees, which is about the same percentage as before 2010 and comparable to national averages. The premium increases are spread unevenly among small businesses because their employee pools can vary greatly. Some small businesses, especially those with older workers or employees and family members with high-cost chronic diseases, have incurred much higher premiums under Obamacare, Lyon said. Last month, Republicans in the House, led by Speaker Paul Ryan, tried unsuccessfully to repeal and replace Obamacare with the American Health Care Act. Despite arm-twisting by President Donald Trump, conservative Republicans in the Freedom Caucus opposed the bill, which many said still contained too many government subsidies. Trump and Ryan have since argued that health reform is not dead this year and are open to trying again. But Patrick Anderson, president of the East Lansing-based Anderson Economic Group LLC, said small businesses are not in a hurry. “Small and medium-sized business felt the brunt of it when the ACA was implemented,” said Anderson, who has always provided health insurance for his 10 employees. “They don’t like an uncertainty about costs. There were wrenching cost increases for a lot of businesses.” Unless targeted at Obamacare’s problems, Anderson said replacing the Affordable Care Act with something unknown could lead to higher premium increases. “Take it slow. Small businesses would rather have 100, 200 or 300 days to get it right,” Anderson said. After receiving double-digit rate increase proposals from Blue Cross in 2011 and 2012, Anderson said his company tweaked its policies and lowered its projected costs. After plan changes, premiums for the company have increased between 1 percent and 3 percent the last three years.

Potential solutions While Naomi Lopez-Bauman, director of healthcare policy with the Goldwater Institute, was disappointed the American Health Care Act wasn’t approved, she supports legislative action aimed at reducing regulatory burdens for small businesses and repealing the employer mandate.

Fixing health care for small businesses As Congress and President Donald Trump continue to talk about changing or replacing Obamacare, there is no shortage of ideas on how to help small businesses. Allow small businesses and self-employed individuals to buy into the Medicare or Medicaid programs, which is the so-called public option. Offered to all employees or those ages 50-65. Plans could be purchased on insurance exchanges or directly through Medicare or private Medicaid HMOs. Offer additional subsidies or tax credits to small businesses to help them pay for employee health insurance. ACA allows tax credits of up to 35 percent of health costs for small businesses under 25 employees. Allow small businesses to use Obamacare tax credits for employees to purchase any health plan outside of the Obamacare exchange if counties are without insurer competition or plan choices. Expand the use of pretax money companies can use to reimburse employees for coverage they bought on their own. Last December, 21st Century Cures Act eased some restrictions on employers with fewer than 50 workers. Relax some of the 10 minimum essential health benefits standard which would allow small businesses to save money by offering less comprehensive health plans. Medical malpractice reform by using health courts to settle disputes. Encourage companies to invest in wellness programs by lowering premium rates. Allow younger workers to purchase health insurance on the exchanges and use premium paid as a deduction to college loan debt. Relax the employer mandate. Repeal or allow companies to have 60 or 70 employees without imposing $2,000 per employee penalties for failing to offer health insurance. Current law is set at 50 full-time equivalent employees. Also increase minimum work hours for FTEs up from 30 now to 35 or 40 hours. Return to the traditional composite-level rate setting approach where employees are charged based on single, couple and family rates without age consideration. Unless state waivers are requested, Obamacare requires member-level rating, which requires employers to pay premiums based on individual ages of employees, tobacco use and number of dependents, up to three. However, employers can bill employees either individual rates or average premium for the group. Allow association health plans, which would allow small businesses to pool together through national associations to purchase health insurance that would not be subject to individual state regulations. Source: Interviews with small business owners, associations and consultants, Crain’s Detroit Business

“Small businesses have limited resources to comply with the law. For every dollar they spend on administration, they don’t spend on company and labor pool,” said Lopez-Bauman, who appeared at last fall’s Crain’s Health Care Leadership Summit. “You look at the ACA business costs, and it is far more burdensome for small businesses because the cost per employee is higher.” For example, Lopez-Bauman said just calculating the full-time equivalent employees requires employers to purchase computer software. Lopez-Bauman advocates for Congress to allow states to opt out of Obamacare’s employer mandate. She said the $2,000 per employee penalty for not offering health insurance once a company is larger than 50 full-time equivalent workers is a tremendous burden. “These rules impact hiring,” she said. Lyon agreed, saying that knows some small-business owners, including restaurants and retail shops, who have opted to keep their company under 50 to avoid having to purchase health insurance.

Anderson said small businesses don’t have large human resources departments like larger employers to help them sort through Obamacare regulations. “Our HR manager spent countless hours trying to figure out what we could do, how much it would cost. We wanted to maintain coverage for our employees,” he said. SBAM has a list of 10 changes it would like to see to Obamacare. They include creating a high-risk health insurance pools for employees with chronic diseases, mandating transparency for data on quality and value for

health care elective procedures, eliminating some of the 10 minimum benefits, expanding health savings accounts to allow all policies to qualify and increasing penalties for people who leave the insurance market. “We need the market to be stable. If you jump out of a plan for more than 60 days, you have to pay 30 percent more to get back in,” Lyon said. “Nobody is forcing you in, but if you opt in and leave, have a break in coverage, you pay more. This will stabilize the market.” Another major small business group with members in Michigan is the Main Street Alliance, a left-leaning business association. Main Street Alliance board member Kelly Conklin, managing partner and co-founder of Foley Waite LLC, an architectural woodworking firm based in Kenilworth, N.J., supports several fixes to Obamacare. He said his small company has had four years of low single-digit insurance rate increases. Conklin said Congress could reduce small business reporting and compliance costs. “It takes us about 2.5 hours to fill out forms for our 15-member company, but we do it every year,” he said. “Why not fill out a form that simply says, ‘Nothing has changed?’” Conklin also supports additions to Obamacare. One includes adding a public option — where individuals or small businesses could purchase Medicare or Medicaid coverage — to insurance exchanges or directly through private payers that offer Medicare Advantage of Medicaid managed care plans. “The public option might be the most affordable for us and could increase participation for those with modest needs who are healthy and also for those with chronic diseases,” said Conklin. Anderson also said the public option would be good for small businesses. “Anything that increases competition and lowers premiums is worth exploring.” Wendell Potter, an insurance expert with the The Center for Media and Democracy in Madison, Wis., said a public option for people ages 50 to 65, including small business employees, would be worthwhile to study. But Potter said Obamacare was never designed to help lower costs for midsized and small employers. At best, it was designed to have minimal disruption for large companies. “It is a myth that health insurers can control costs,” said Potter, a former executive with Cigna. “They just pass along costs to employers. Most small businesses are at the mercy of that.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: Anderson Economic Group LLC

Hagerman Foundation

Article One

L.A. Insurance

Bekka Valley Mediterranean Foods

Llamasoft

Capitol Theatre

Project I

Clark Hill PLC

SkyPoint Ventures LLC

Detroit City FC

The Boji Group

Diplomat Pharmacy

Uptown Reinvestment Corp.

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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 1 0 , 2 0 1 7

THE WEEK ON THE WEB

RUMBLINGS

APRIL 1-7 | For more, visit crainsdetroit.com

Study points to economic impact of MLS stadium, justice complex

report released last week by Dan Gilbert’s Rock Ventures LLC said the economic impact of its planned redevelopment of the half-built Wayne County Consolidated Jail site and building the county a new criminal justice complex a few miles north totals $2.39 billion for Southeast Michigan. The 14-page report, completed by the University of Michigan Center for Sport & Policy and commissioned by Detroit-based Rock Ventures, said the redevelopment of 15-acre Gratiot Avenue property into a Major League Soccer stadium and three high-rise buildings for residential, office and hotel use is expected to cost $1.462 billion while Gilbert’s plan to build a new criminal justice complex for the county at I-75 and East Forest Avenue would cost $420 million, bringing that expected investment to $1.882 billion. The analysis projects one-third of the costs to be labor and two-thirds to be materials. “This study does nothing to sway my thinking,” Wayne County Executive Warren Evans said in a statement. “My standard for Rock’s proposal has been absolutely clear: Is Rock prepared to build the county a criminal justice complex in a timely fashion, with buildings that meet our needs, at a price Wayne County can afford?”

BUSINESS NEWS: American Axle & Manufacturing Holdings Inc. completed its $3.3 billion acquisition of Southfield-based Metaldyne Performance Group Inc. from private equity firm American Securities LLC. The deal is expected to add about $7 billion in revenue. J After costly delays, ownership changes and the creation of a new menu, the metro Detroit area’s second Atomic Chicken restaurant will open April 12 in the New Center neighborhood at 6500 Woodward Ave. J San Francisco-based Uber signed a deal with the Detroit Tigers to become the team’s official ride-sharing partner. As of Opening Day, Uber has a designated pickup and drop-off zone near Comerica Park. J Also on Opening Day, Dearborn-based Carhartt Inc. and Boston-based sporting brand ’47 debuted exclusive Detroit Tigers and Red Sox apparel at Comerica Park, after they signed a three-year deal. J Ford Land Development Corp. is leasing buildings in Taylor as transitional space for nearly 1,000 Ford employees as the automaker transforms its Dearborn headquarters. Ford made a deal with Masco Corp. to take over the space when Masco moves its headquarters to Livonia. J A $4 million redevelopment project in northwest Detroit’s Fitzgerald neighborhood is being spearheaded by The Platform LLC and Century Partners LLC, with funding coming J

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

365

The number of ads the Detroit Institute of Arts will launch over the next year for its new “DIA Every Day” marketing campaign, which will spotlight art pieces in the museum.

$89.2 million

The amount Michigan venture capital firms invested in 20 deals in the first quarter of 2017, ranking the state 21st in the country.

5.1 percent

The ratio by which Michigan technology employment grew in 2016, largely buoyed by Southeast Michigan’s automotive industry.

from federal Community Development Block Grants, the Kresge Foundation and others. J St. Joseph Mercy Brighton Health Center is completing work on its new 18-bed short-stay unit, part of a $41 million investment Saint Joseph Mercy Health System has been making in Livingston County the past three years. It will officially open April 17. J Kar Nut Products Co. has sold a majority stake of the Madison Heights-based company to an affiliated private equity fund of Palladium Equity Partners LLC. J Auburn Hills-based CEVA Logistics U.S. Inc. will terminate 188 jobs at its Redford Township facility at 24450 Glendale Ave. on June 30, after its client FCA US LLC signed a new contract with industrial logistics and supply-chain management company Syncreon. J Dollar Express LLC will liquidate and close all 323 of its stores in 36 states, including two dozen in Michigan, by June 30 as part of an acquisition deal with Dollar General Corp. J Payless Inc., the bargain shoe store, filed for bankruptcy to slash debt as the retail spiral persists. It

plans to close 400 stores, including 10 in Michigan. J Ann Arbor-based Essen BioScience Inc. was acquired by Germany-based Sartorius Group in a $320 million deal with SW Capital Partners. J As M-1 Rail gears up for the QLine’s official 6.6-mile Woodward Avenue circuit debut on May 12, officials are asking businesses along the streetcar route to host events or offer special deals during opening weekend May 12-14. J Michigan Farm to Freezer, a Traverse City-based processor of fresh produce, is expanding to Detroit’s Eastern Market, leasing the long-vacant former Cattleman’s Meat building at 1820 Mack Ave. and investing $1 million in the space. J The two longtime executives credited for saving Auburn Hills-based Continental Structural Plastics Inc. from insolvency — CEO Frank Macher and CFO Jon Smith — have retired. J Henry Ford Health System will establish a tech development program with Israeli entrepreneurs and companies and advance its innovations unit with the help of nearly $2 million from Troy-based William Davidson Foundation. J A123 Systems LLC plans to build a $40 million headquarters in Novi, as it prepares to close its plant in Romulus and cut 200 manufacturing jobs.

OTHER NEWS: The city of Detroit has been working on a new pedestrian plaza on Randolph Street near the Gratiot Avenue intersection, which opened to the public April 7, in time for the Tigers’ Opening Day. J Detroit Metropolitan Airport is getting daily, year-round service to Portland, Ore., the largest market that still lacks such service from Detroit, in August from Alaska Airlines. J Aaron Dworkin announced he will step down Aug. 15 as dean of University of Michigan’s School of Music, Theatre & Dance, a post the Detroit-based Sphinx Organization founder took on in July 2015. J Wayne County CFO Tony Saunders, one of the architects of the county’s financial turnaround, is leaving Warren Evans’ administration to start his own Detroit-based turnaround firm. J

DETROIT INSTITUTE OF ARTS

The DIA is launching a new ad every day for 365 days that features visitors observing the many artifacts at 658,000-square-foot museum in Midtown.

COURTESEY OF DETROIT PUBLIC SCHOOLS

Alycia Meriweather has been serving as interim superintendent for Detroit schools since March 2016.

Gilbert joins chorus on Meriweather at DPS

usinessman Dan Gilbert has sided with the Detroit Federation of Teachers in criticizing the Detroit School Board’s decision not to consider Interim Superintendent Alycia Meriweather to continue leading the district on a permanent basis. “How’s it possible DPS interim superindendent (sic) Alycia Meriweather isn’t a finalist in school board’s search for a permanent superindendent (sic)?" the Quicken Loans founder wrote Friday on Twitter, misspelling superintendent. Gilbert added “SMH” to his tweet — the social media abbreviation for “shaking my head.” The Detroit School Board’s national search for a permanent leader of the state’s largest school system could come to a resolution as early as Monday. The school board has scheduled a 5:30 p.m. special meeting Monday for a “superintendent search update,” according to a public notice. Detroit school board members have come under criticism in recent weeks from the teachers union, media pundits and other community leaders for excluding Meriweather from a group of three finalists. The Detroit Regional Chamber

also has waded into the superintendent search controversy. “The Detroit Regional Chamber thinks Alycia Meriweather should have been included in the list of final candidates, but the person who can bring the most fundamental change for student performance should be the one selected,” chamber spokeswoman Tiffany Jones said Friday. The school board has been considering two finalists: River Rouge School District Superintendent Derrick Coleman and Nikolai Vitti, superintendent of Duval County (Fla.) Public Schools in Jacksonville, Fla. In March 2016, former DPS Emergency Manager Steven Rhodes appointed Meriweather interim superintendent as DPS was teetering on the brink of financial insolvency. As part of a $617 million financial rescue of DPS, the Legislature set election of a new school board that took office Jan. 1 and has been charged with hiring a permanent superintendent. Meriweather, a longtime DPS teacher and administrator, has been credited with bringing stable leadership to a school system that has been hamstrung by years of financial and academic troubles.

Grandin: Get autistic kids to think about work earlier T emple Grandin, a professor of animal science at Colorado State University, consultant to the livestock industry on animal behavior and one of the world’s most prominent autism awareness advocates, says parents and educators are handicapping career prospects for children on the autism spectrum. “We’re ... not getting these kids to think about work early enough. They have to learn to work,” Grandin told Crain’s last week. “I’m seeing all these teenagers getting addicted to video games. They go to school, then graduate college and they’ve never had a job. I had tons of jobs. I learned how to show up to work on time. When these kids age out of (social) services, they are done. If they can

learn to work at an early age, they can continue with those lessons into a real career.” Grandin, the focus of the 2010 HBO movie titled after her name, was named one of Time’s 100 most influential people for exposing her experiences with autism, spoke to parents, educators and service providers last week at the 10th annual Living with Autism Summit in Troy. She’s spent the past decade educating anyone who will listen about the importance of understanding how the autistic mind works and steps adults can take to improve the lives of diagnosed children, particularly in employment, as an estimated 75 percent to 90 percent of adults with an autism spectrum disorder are unemployed.