Crain's Detroit Business, June 26, 2017 issue by Crain's Detroit Business

JUNE 26 - JULY 2, 2017

Bill Shea: A hard look at subsidies for team owners.

Foxconn said to focus on Romulus site in plant search. Michigan still in running, Page 3

Page 3

Trade

SPECIAL REPORT DETROIT 1917 / 1967 / 2017

Still rebuilding

Gateway shows path to China’s potential

By Dustin Walsh dwalsh@crain.com

JACOB LEWKOW FOR CRAIN’S

Eric Vaughn stands in front of what remains of his father’s former book store on Dexter Avenue. Ed Vaughn’s shop was one of the 2,509 businesses destroyed during the violence of 1967. Eric is now a small business owner, as is his son Wynton.

Part 2, pages 10-13

By the numbers: The economic causes and impact of a riot that tore through Detroit’s commercial districts. First hand: Then-surgical resident John Crissman worked in post-op at Detroit General Hospital in the summer of 1967.

More online

Focus HOPE and New Detroit: Fifty years later, nonprofits founded to address root causes of rebellion retool their strategies. Read it online at crainsdetroit.com/Detroit1967

Detroit’s nascent comeback hinges on rebuilding a vast network of small businesses that were lost in the aftermath of 1967

By Chad Livengood | clivengood@crain.com

d Vaughn was attending a meeting of black nationalists in Newark, N.J., when violence erupted near his bookstore on Detroit’s west side in the early morning hours of July 23, 1967. ¶ Vaughn, then 32, owned an African American bookstore on Dexter Avenue that had become a gathering place for a growing social and political movement. He drove back to Detroit that Sunday night after hearing the first radio reports of looting and fires engulfing the west side. ¶ After running into a temporary police blockade near the Michigan-Ohio border in Toledo, Vaughn and his friends were able to get back into the city, SEE VAUGHN, PAGE 10 about 24 hours after the rebellion began.

SEE CHINA, PAGE 15

Education

Inside

City officials, business execs work to breathe life into Randolph High

Special report: Fashion business Everyone wants “made in Detroit” goods. Page 8

By Chad Livengood

Q&A with Rufus Bartell, owner of Simply Casual. Page 9

clivengood@crain.com

crainsdetroit.com Vol. 33 No 26

NEWSPAPER

Andrew Chmielewski, founder and CEO of Harrison Township-based Dave’s Sweet Tooth, didn’t think about China as a market. His handmade toffee is a hit in the states. The seven-year-old company is set to surpass $1.2 million in sales this year thanks to tireless efforts to get its product into 5,000 grocery stores like Whole Foods Market, Busch’s Fresh Food Market, Fresh Thyme Market and Kroger Co. But Alibaba Group Holding Ltd.’s Gateway ’17 event last week at Cobo Center opened Chmielewski’s eyes to China’s desire for U.S.-crafted candies and the potential from the e-commerce platform’s more than 500 million online shoppers. “Candy is trending really high in China; something I was only vaguely aware of before this event,” Chmielewski said. “Even getting a small piece of that market would be a huge win for us.” It’s hard to argue the facts. China’s middle class is about 300 million people, with expectations to reach 600 million in the next five years, according to a 2016 McKinsey & Co. report. Even as China’s economic growth has slowed in recent years, its middle class continues to flourish — 76 percent of China’s urban

$2 a copy. $59 a year.

The basic construction skills Tony McLean learned at Detroit’s Randolph Technical High School in the mid-1980s set in motion a career that included working on building Ford Field, Detroit Metro’s airport terminals and homes in New Orleans after Hurricane Katrina. When McLean attended Randolph, the vocational school on the city’s northwest side was filled to capacity with 700 students interested in pursuing careers in the skilled trades.

Today, McLean is a carpentry teacher at Randolph, which now has fewer than 150 students amid a growing shortage of carpenters, electricians, plumbers and masons in Southeast Michigan. “The reason I’m here is because of this school,” he said. The undercapacity of Randolph and the building’s outdated equipment has caught the attention of Mayor Mike Duggan’s administration and his Workforce Development Board, a panel comprised primarily of Detroit’s top C-suite executives.

Now they’re trying to breathe new life into the school, raising more than half of a $6 million goal toward buying new equipment for classrooms and making capital improvements to the building that the cashstrapped Detroit Public Schools Community District cannot afford. It’s part of a larger effort the reconstituted Workforce Development Board has been quietly pursuing for the past two years to tackle systemic problems in Detroit’s education and talent-development pipeline. SEE RANDOLPH, PAGE 16

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MICHIGAN BRIEFS Hospitals benefit from Medicaid expansion Michigan’s more than 170 hospitals cut bad debt and unpaid costs of care by more than $400 million in 2015, the first full year of Healthy Michigan Medicaid expansion and individual private insurance market assistance that added nearly 1 million people to insurance rolls, according to a new report by the Michigan Health and Hospital Association. “We’re encouraged to see that the Healthy Michigan Plan is making a dent in uncompensated care in Michigan and doing exactly what it was designed to do when Republicans and Democrats worked together to approve the plan — reducing uncompensated care costs and improving the health status of men and women who couldn’t afford health insurance in the past,” Brian Peters, CEO of the state hospital association, said in a statement. “In some cases, our hospitals have seen a 50 percent reduction in the number of people coming through the doors without insurance — that’s significant when it comes to health care coverage and access to care for Michigan residents.” Last Wednesday, the MHA released its annual community benefit

report, Michigan Hospitals: Leading the Way to Healthy Communities, showing that Michigan hospitals in 2015 accounted for $2.6 billion in community benefits and other programs designed to improve population health. While the community benefit total dollars were 10 percent lower than the $2.9 billion provided in 2014, Michigan hospitals also incurred nearly $1 billion in Medicare and Medicaid payment shortfalls in 2015. Note: MHA received survey data from 126 hospitals in 2014 and 128 hospitals in 2015.

House adjourns without approving job bill The Michigan House has adjourned for at least three weeks without voting to approve tax incentives for companies that add jobs in the state, after a top Republican said he learned that Gov. Rick Snyder had won Democratic support for the bills in a deal that would undermine House GOP priorities, the Associated Press reported. House Speaker Tom Leonard said he would wait for Snyder to return from a European trade trip to address House Republicans’ concerns. “We agreed to put the pause button on the ‘Good Jobs for Michigan’

DETROIT

INSIDE

A company hired to analyze the worst-case scenario of an oil pipeline failure in the Straits of Mackinac has been fired because of a conflict of interest with Enbridge Energy LP. legislation until the governor gets back from Europe, can look me in the eyes and can look the caucus in the eyes and explain to them the answers to the questions that we have at this point,” the DeWitt Republican told reporters. Snyder spokesman Ari Adler said the governor and his team had talked to Republicans and Democrats to finalize the legislation. “There are a lot of stories floating around and the best thing right now is for everyone to get some rest,” he said. “The governor looks forward to meeting with all the legislative leaders next week to address any concerns they have or additional information they need to complete this package of bills.

Michigan fires oil spill analysis contractor A company hired to analyze the worst-case scenario of an oil pipeline failure in the Straits of Mackinac has been fired because of a conflict of interest with Enbridge Energy LP, the state of Michigan announced last week, according to the Associated Press. An employee on the project subsequently worked on another project for Enbridge, which owns Line 5 in northern Michigan. Norway-based Det Norske Veritas, also known as DNV GL, is the contractor. The deal was terminated before the draft report had been delivered to the state.

CALENDAR

CLASSIFIED ADS

DEALS & DETAILS

KEITH CRAIN

OPINION

OTHER VOICES

PEOPLE

RUMBLINGS

WEEK ON THE WEB

COMPANY INDEX: SEE PAGE 18 “Our trust was violated and we now find ourselves without a key piece needed to fully evaluate the financial risks associated with the pipeline that runs through our Great Lakes. This is unacceptable,” Attorney General Bill Schuette said in a news release.

Correction JJA story on Page 3 of the June 19 issue misstated Hudson-Webber President and CEO Melanca Clark’s previous role at the NAACP Legal Defense and Education Fund. Clark led public policy and civil rights initiatives at the fund; she did not lead the fund as a whole.

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Analysis

Why does Gores need $34.5M to bring Pistons downtown? Detroit Pistons owner Tom Gores, the immigrant success story who bootstrapped himself from modest roots in Flint to become a California private equity billionaire, is no stranger to writing hefty checks. For example, he will pay Pistons center Andre Drummond $23.7 million next season. Last October, he paid $100 million for a 30,000-squarefoot mansion in Los Angeles’ tony Holmby Hills neighborhood. Six years ago, he cut a deal to buy the Pistons and the Palace of Auburn Hills for $325 million. Then he spent $40 million to modernize the Palace. So why is the public footing the $34.5 million bill to reconfigure the

BILL SHEA

bshea@crain.com

new Little Caesars Arena to accommodate Gores’ Pistons as part of their relocation from the Palace of Auburn Hills? That’s been the lurking question amid recent legal wrangling over the money. Last Monday, U.S. District

Judge Mark Goldsmith blocked a request to block the Detroit City Council from voting on the arena subsidy on Tuesday — effectively halting what little resistance there has been to any aspect of the arena deal. The council OK’d the additional subsidy on a 7-2 vote on Tuesday. David Fink, an attorney representing the Downtown Development Authority, which owns the arena, argued in court that delaying or stopping the $34.5 million would prevent the Pistons from moving downtown: “If the Pistons decide they’re going back to Auburn Hills, the last time it took them 40 years to SEE PISTONS, PAGE 18

BILL SHEA/CRAIN’S DETROIT BUSINESS

The public is footing the $34.5 million bill to reconfigure the new Little Caesars Arena to accommodate part of the Pistons relocation from the Palace.

Health Care

Manufacturing

DMC program reduces ER visits, admissions

Sources say Foxconn considering Romulus site

By Jay Greene jgreene@crain.com

An innovative program to reduce costs, improve care continuity and connect high users of emergency departments at four Detroit Medical Center hospitals with a primary care team has led to significant reductions in unnecessary ER visits, hospitalizations and readmissions, said a top DMC physician executive. DMC’s Gateway to Health program — funded by a three-year, $10 million grant through the Patient Protection and Affordable Care Act of 2010 — has enrolled more than 6,500 people and enabled those patients to visit DMC Gateway outpatient clinics a total of 16,000 times over nearly three years, said Suzanne White, M.D., DMC's chief medical officer. While financial savings and complete patient outcome data isn’t expected until later this year, White said the federal government is happy enough with the initial results of DMC’s Gateway program to extend the funding to a fourth year. Any reduction in unnecessary emergency room visits is good news for hospitals and health care costs. They have been an intractable problem that comes with high costs and a high level of uncompensated care for hospitals. “We are very proud of what the Gateway team has done,” said White, an emergency medicine physician and principal investigator of the study. “Patients have improved outcomes and we have a 95 percent satisfaction rate.” SEE DMC, PAGE 17

By Chad Livengood clivengood@crain.com

Suzanne White, M.D., DMC’s chief medical officer, meets with a patient in the Gateway Health Center.

MUST READS OF THE WEEK A reunion

A chance encounter with Jack Ma in China and — years later in Detroit — a reunion. Page 19

AudioNet’s success Company grows despite controversy with hearing aid professionals. Page 4

In the market Nino Salvaggio International Marketplace plans a spring opening in Bloomfield Township. Page 5

JACOB LEWKOW

Electronics giant Foxconn Technology Group is now eyeing a site in Romulus for a potential manufacturing facility that would give the Taiwanese company proximity to Detroit Metro’s direct flights to Chinese cities, Crain’s has learned. Foxconn has narrowed its search in Southeast Michigan to a Romulus site as Wisconsin and Ohio also vie for its business in what could be an interstate competition for multiple facilities, according to sources familiar with the company’s search who declined to identify the specific Romulus location. State and local economic development officials have been actively working for weeks to woo Foxconn — the world’s largest contract electronics manufacturer — and its promise of a multibillion-dollar manufacturing investment in Michigan. The aggressive courtship of Foxconn has been quickly developing in recent weeks, even as a tax incentive package Gov. Rick Snyder has said is needed to win over Foxconn and other companies has slowed in the Legislature controlled by Snyder’s Republican Party. SEE FOXCONN, PAGE 17

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AudioNet grows, despite controversy with hearing aid professionals By Jay Greene jgreene@crain.com

AudioNet America is riding a changing hearing-aid industry to rapid growth as employers and other payers aim to lower costs. Managed care group purchasing has caught on in the multibillion-dollar industry. That has helped the Clinton Township-based AudioNet to expand the number of people its services cover by 660 percent to 800,000 during the past year by adding a number of state and national contracts, said Colleen Shefferly, its president. Earlier this year, AudioNet, a third-party network administrator founded in 2007 by Shefferly, was awarded a $12 million contract for hearing aids by the state of Michigan’s Rehabilitation Services program, which helps people with disabilities get back to work. “We have been growing very rapidly the past year as patient satisfaction improves because of better (hearing aid) technology,” said Shefferly, who was a 2013 Crain’s Health Care Hero in the corporate achievement category. Shefferly, a longtime consultant with the United Auto Workers, said she founded AudioNet because automakers, unions and health plans were looking for ways to reduce costs, improve hearing care and increase options for workers and retirees. AudioNet’s national provider net-

“We have been growing very rapidly the past year as patient satisfaction improves because of better (hearing aid) technology.” Colleen Shefferly, AudioNet America

work offers annual hearing assessments by more than 5,000 audiologists under contract for a flat fee. Two hearing aids are offered every three years. Before flat fees were negotiated, Shefferly said the benefits structure for the UAW often resulted in patients being balance-billed $3,000 to $8,000 for a pair of hearing aids. Now, AudioNet saves companies up to 51 percent over their previous bills. “We are totally medically focused. People who have hearing loss also sometimes have high blood pressure, diabetes and other conditions like general depression,” she said. “We encourage people to use hearing aids so their quality of life is better.” The high cost of hearing aids has prompted Congress to act. Pending federal legislation would allow for the sale of hearing aids, which average about $5,000 for a pair, over the counter for people with mild to moderate hearing loss. Proposed by Sens. Elizabeth Warren, D-Mass., and Charles Grassley,

R-Iowa, in the Senate and Reps. Joe Kennedy III, D-Mass, and Marsha Blackburn, R-Tenn., in the House, the “Over the Counter Hearing Aids Act” would order the Food and Drug Administration to open the market. Shefferly said AudioNet is neutral on the legislation, but she said the bill’s purpose is similar in intent as the company — to lower costs and improve outcomes for people with hearing loss. AudioNet also contracts with the UAW Retiree Medical Benefits Trust, also known as the UAW Trust, and active union employees with General Motors Corp. and Chrysler Corp., Shefferly said. The company also is expected to soon finalize a preferred vendor arrangement with Blue Cross Blue Shield of Michigan. Shefferly declined to name other customers, citing confidentiality. But by 2018, Shefferly projects her company will double to more than 2 million clients as the company signs additional commercial health plan

contracts and enters into deals with unions outside of the auto industry. People also are losing their hearing at an earlier age, in their early 70s, she said. Ron Berry, chief administrative officer with the UAW VEBA, declined to comment on vendor contracts such as AudioNet’s. However, UAW VEBA spokesmen in the past have said generally that their vendor contracts are saving the trust millions of dollars. AudioNet employs 12 workers and expects to grow to about 30 by the end of 2018, Shefferly said. The company outsources information technology, member services and third-party administration to Michigan companies, Shefferly said.

Some providers unhappy Not everyone is supportive of AudioNet, however. Officials and members of the Michigan Alliance of Hearing Care Professionals, which represents audiologists and the retail hearing aid dispensers, say AudioNet has unfairly interfered with its members’ business models and reduced access to care for the hard of hearing. Laura Szot, president of the Michigan Alliance, said AudioNet’s managed care network has excluded some audiologists and hearing instrument specialists. Before AudioNet, most UAW union workers had open access through Blue Cross Blue

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Shield of Michigan’s network. Szot said some customers who received hearing tests and hearing aids at businesses owned by hearing instrument specialists were forced to find other companies when AudioNet began restricting services. “This meant many consumers who were happy with their providers had to seek out new providers and many practices who had a lot of UAW consumers lost a great many of their clients,” Szot said. “This had a very negative effect on these businesses as well as it reduced access to provider options and hours of service availability for UAW members.” Szot said many businesses owned by dispensers had to close because they did not employ an audiologist or only had one part-time. Shefferly said this happened because AudioNet does not allow hearing aid dispensers to bill for services unless they are directly employed by an audiologist. She said this rule is intended to combat fraud. “Sometimes dispensers owned the (business) and say there is an audiologist there,” she said. “We would get improper claims because a dispenser would employ the audiologist who would sign off on claims. We don’t allow that.” Shefferly said a hearing aid dispenser can be employed and credentialed by AudioNet, but only through an audiologist who is required to perform the exam and evaluation. AudioNet also doesn’t allow dispensers to file claims if they are employed by a hearing aid manufacturer. Another reason AudioNet only credentials audiologists — along with ear, nose and throat physicians — is because Medicare is moving to require professional accreditation for reimbursement, Shefferly said. “Holding the audiologist and ENT responsible for the claim ensures quality and eliminates fraud,” Shefferly said. Szot also said that AudioNet’s subcontracted provider networks have cut fees paid to audiologists. Under the Blue Cross program, Szot said dispensing companies were paid $1,500 for a single hearing aid plus $200 in testing services. But AudioNet’s reimbursement rate dropped to $700 for a pair of midlevel digital hearing aids, she said. “Our membership has shared that (provider reimbursement) is significantly reduced from the previous model,” Szot said. “It is unclear currently if the UAW Trust is saving money or if manufacturers reimbursements have been reduced, but for providers there was a significant reduction.” In a Sept. 27, 2016, letter obtained by Crain’s, however, the UAW said AudioNet has saved the union 50 percent of costs that has allowed members to receive up to two hearing aids per year instead of one. Shefferly said she hears complaints sometimes that claims paid are slow. “By contract, 95 percent are paid in less than 10 days,” she said. “(Networks) may pay their providers late. I am trying to alleviate that.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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WE’RE LOOKING AT CRAIN’S DETROIT BUSINESS

WITH FRESH EYES…

NINO SALVAGGIO INTERNATIONAL MARKETPLACE

YOUR EYES.

Nino Salvaggio International Marketplace plans to invest $5 million in a new location in Bloomfield Township. It currently operates in Clinton Township (above), St. Clair Shores and Troy.

Nino Salvaggio Market to open in Bloomfield Township next spring By Tyler Clifford tclifford@crain.com

Nino Salvaggio International Marketplace is set to open a new Bloomfield Township location next spring — the chain’s fourth store in metro Detroit. The family-owned company signed a seven-year lease, at an undisclosed cost, with options in a 42,000-square-foot space formerly occupied by Kroger at the Bloomfield Plaza Shopping Center at the southwest corner of Telegraph and Maple roads. While it will be a smaller store than its other locations, which are more than 50,000 square feet, President Kirk Taylor said the company is investing $5 million into the store. He expects to hire more than 200.

“Our new store will be a wonderful complement to the current offerings in Bloomfield Plaza and the surrounding area, as well as meet customer demand for our specialty products and services,” Taylor said in a statement. The new marketplace will be designed by Birmingham-based Ron & Roman LLC with assistance from Bingham Farms-based Rogvoy Architects PC. Construction is expected to begin this summer. Taylor said his team is working on a timeline and expects to open contractor bids by the end of July. Nino Salvaggio also operates stores in Clinton Township, St. Clair Shores and Troy.

Michigan Black Chamber acquires National Business Leagues By Kurt Nagl knagl@crain.com

The Michigan Black Chamber of Commerce has acquired the National Business League Inc., founded in 1900 by Booker T. Washington. The national organization will relocate from Washington, D.C., to Detroit at 1001 Woodward Ave. building, the MBCC announced last week. “We are now the National Business League,” Ken Harris, the CEO and co-founder of the Michigan Black Chamber, said in an announcement at Campus Martius Park. “This gives black businesses a national platform with a 117-year history.” Aimed at promoting the commercial and financial development of African Americans, the National Business League is made up of 365 chapters serving 15,000 members,

with regional offices in Detroit, Atlanta, Georgia, Washington, D.C., and Los Angeles. The nonprofit MBCC has a similar goal of economically empowering and sustaining African American businesses by advocating for “economic development through entrepreneurship, procurement, community reinvestment, programmatic and professional development, and capitalistic activity,” the group said in a statement. The acquisition makes sense because Detroit is considered the center for black business development in the U.S., the advisory said, and the location will enhance the National Business League’s access to 2.5 million black businesses in the country. National Business League members employ almost 1 million people, the organization said.

See how: crainsdetroit.com/innercircle

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OPINION EDITORIAL

Detroit should have response to ’67 hype “Here in Detroit, a city of war,” a newsman intones with his baritone voice of authority, “violence continues.” And so goes the trailer for “Detroit,” a movie based on the 1967 riots, produced by Academy Award-winning writer and director Kathryn Bigelow. It gets worse with the words that frame scenes of police brutality, burning streets and looting. “The rebellion in the streets of Detroit was only the beginning,” one graphic reads, followed by: “Discover the truth behind one of the most terrifying events in American history.” The movie premieres Aug. 4, shortly after the 50th anniversary of the events that Crain’s Detroit Business documents in this issue. As the “Detroit” trailer suggests, national and international media, as well as Hollywood, are likely to use hype and hyperbole rather than measured context to mark 1967. Detroit is an easy mark. After several years of writing a relatively positive media narrative for post-bankruptcy Detroit, journalists will be looking for a new story, a “hot take,” and the summer of 1967 gives them a fresh hook. As evidenced by our two-part series, Crain’s isn’t interested in painting over the past. But we don’t want to see the city’s future — and, for lack of a better word, its brand — spoiled by irresponsible and inflammatory storytelling. Which is why we are urging Mayor Mike Duggan, Sandy Baruah of the Detroit Regional Chamber and other civic leaders to join together and prepare an antidote to public relations

poison. That would be the authentic case for today’s Detroit, a city that is learning from its past and working, together, to build a better future. Community policing. Neighborhood investment. Economic development. What has metro Detroit accomplished in these areas, and what else are its leaders committed to doing? Those answers should be fleshed out and at the fingertips of every civic and community leader who might be contacted this summer by a journalist. Some of the threads of that counternarrative might include: J The push to link Detroit’s RiverWalk, a jewel of industrial reclamation, to the neighborhoods through a series of greenways. J Private-public partnership aimed at rehabilitating the Fitzgerald in northwest Detroit without displacing longtime residents, a pilot project that, if successful, would be a national model. J Efforts by employees of Quicken Loans and other companies to fight blight and help the school system. Do you have other civic talking points? Send them in the form of a letter to the editor or op-ed and we’ll publish them all summer (rfournier@crain.com). One CEO asked us to float this idea: Why not produce a pro-Detroit ad and have it played before every showing of “Detroit”? Worth a thought. We can’t escape our past, but our past isn’t all that defines our future. We can’t ignore the anniversary and hope everybody else does, too. They won’t. The question is, what is our answer to their hype and hyperbole?

“Detroit,” a movie based on the 1967 riots, premieres on Aug. 4

LETTERS Memories of 1967 To the Editor: Back in 1967, I was a neophyte in the auditing department of Detroit Bank and Trust (now Comerica). At the time of the riot we determined that several banking offices had burned and had been looted for furniture. In addition, in putting out the fires, the offices were flooded starting with the basements. It was under this situation that I was assigned to travel to the affected offices and remove the cash from the vaults. I then traveled to the Twelfth-Clairmount, Oakland-Woodland, Linwood-Joy and Kercheval-Van Dyke branch offices in an armored truck with guards brandishing rifles. It was an unsettling ride as we observed the results of the fires in the neighborhoods.

Once we arrived at an office, we were greeted by numerous members of the Michigan National Guard, who were standing guard outside the offices. Removing the cash from the vaults while standing in water was quite a task. We then loaded all the currency into the truck and returned to the main office in downtown Detroit. In some instances the flood waters had seeped into the area with safe deposit boxes, and we wondered if the contents had been ruined. The broken windows and the burned-out homes in some of the areas were a sight one does not quickly forget. Most of the branch offices reopened again, but I think the Twelfth-Clairmount office remained closed. As an aside, we learned weeks later that during the riot some people in the neighborhoods used the op-

portunity to use the phones in the branch offices to make long-distance calls. Back in those days there was no special rate for long-distance calls and thus I suspect that some seized upon the commotion to call friends in other states. So all in all, it was an interesting yet disconcerting day for me — something that hopefully will never be repeated. Bill Kalmar Lake Orion

well get sick of them by the time the election rolls around, but the broadcasters are going to be driving around in Lincolns and Cadillacs next year, probably with chauffeurs. Just start counting the contests that will be up for grabs, starting with the governor and senator and working your way down the list. Whatever Sen. Debbie Stabenow raised last time won’t even get her started. The good news for her is that all the Hollywood types are

more than willing to donate millions for their Democratic cause. It does not matter whether she can win or even if she deserves to win: She'’ll get the money by the bucketful from Hollywood, helping our gross state product increase dramatically. To be honest, television and radio will get the lion’s share of the money, but newspapers will get pennies, as well as direct mail and outdoor. They will all share in this bonanza.

If car sales slow somewhat, which I doubt, this will pick up the slack. And nothing better than lots of money from outside the state to perk up the economy. Sort of like tourism in overdrive. Sadly, most of these riches will go to broadcasters, but hopefully they will add to their payroll and share their temporary wealth. It won’t last forever, but we are talking about hundreds of millions in political spending. Too bad it’s only every two years.

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

So you want to get rich The fun has already begun with next year’s state elections. But everyone is probably trying to figure out how to make their fortune from the politicians. I just heard that one little congressional seat in Georgia hotly contested by both the Republicans and the Democrats generated over $50 million from both candidates. Well, we in Michigan have all sorts of hotly contested political contests starting right about now. Broadcasters, who get most of the

KEITH CRAIN Editor-in-chief

money, will be raking in the dough for the next 18 months from all the political ads. You and I might very

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Treasurer’s office works hard to reduce foreclosures Since my election as Wayne County treasurer nearly one year ago, we have taken aggressive steps to prevent foreclosures in Wayne County. Contrary to some recent media reports (“Foreclosures lucrative for Wayne County,” Page 3, June 12) reflecting special interests, there’s simply no incentive to foreclose on homeowners anywhere in Wayne County. The assertion we are counting on foreclosures to balance the county budget is absurd. We are doing everything we can to reduce foreclosures, help people get into payment plans and obtain the financial aid and advice they need to be productive homeowners in our greater community. Without question, the foreclosure issue is a major one in Wayne County and may well be unprecedented anywhere in the nation. Wayne County and its largest city, Detroit, were impacted by the Great Recession and subsequent largest municipal bankruptcy in U.S. history — all following decades of decline in population due to evaporating jobs in automotive and related industries and globalization. No other region has been affected by similar economic shock waves. I cite these issues to provide context to the challenging dilemma of the continuing foreclosure problem. From my perspective, we have a firm grasp on the challenge and can demonstrate great progress in foreclosure reductions. We are optimistic that the worst is behind us. Let’s

OTHER VOICES Eric Sabree

Sabree is Wayne County treasurer. look at just the past few years: J In 2015, some 28,000 properties were auctioned due to foreclosures. J In 2016, we were able to reduce

the number of foreclosures to 13,900. J We are working to reduce the number of properties in the auction in the fall of 2017. The office of the Wayne County treasurer has fewer than 10,000 properties scheduled to be auctioned. J Conducted an unprecedented outreach campaign using paid and earned media to educate people on options to prevent foreclosures. J Supported and attained new legislation for the Interest Rate Reduction program allowing homeowners to reduce their interest rates on delinquent taxes from 18 percent to 6

percent. J Enrolled thousands of homeowners in monthly payment plans. J Joined a kiosk network to allow people to make payments in their neighborhoods in a safe, convenient manner with no “convenience fees.” (This has increased collections, reduced overhead and stabilized payment programs.) J Engaged homeowners in Taxpayer Saturdays and Talk with the Treasurer sessions throughout Wayne County to educate residents on all of the options and resources available to help them stay in their homes. J Cooperated with the state of Mich-

TALK ON THE WEB Re: Olympia confirms plans to demolish hotel, apartments on Cass Yes, preserve the buildings in their current state as a reminder of what goes on. Maybe use them as some sort of slum museum, like an ode to futility. GaryRodda

This is really ridiculous and should be blocked. These are great, historic, mixed-use structures that are irreplaceable. Katherine Leigh Yep, sadly, most surburbanites are going to eat up the brand new stucco “mixed-use development” buildings instead of seeing any old buildings and maybe feeling like they’re in an actual unique city instead of a sterile, cookie-cut sporting district meticulously designed to extract their money. Llewellyn23 “Preservation Detroit, a local historic preservation advocacy group, started a petition drive to spare the Hotel Ansonia and Atlanta Apartments from demolition.” Petitions are all fine, but nobody wants to cough up the MONEY, and those who are paying the bills don’t care what petitions people sign... wolftimber

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igan and federal government in the Step Forward program to bring additional resources to help. J Commissioned a door knocking campaign for over 6,200 properties in Detroit. Securing and boarding up unoccupied structures that are open to trespass and pose a safety hazard. One of the root causes of property tax foreclosure is poverty, which is compounded by a lack of education, job training and employment opportunities. Our office will continue to fulfill our statutory duties and collect taxes and enforce the law while doing everything possible to help people stay in their homes.

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SPECIAL REPORT: FASHION BUSINESS

PHOTO BY JACOB LEWKOW

Karen Buscemi founded the Detroit Garment Group (DGG), an organization that supports Detroit’s fashion industry in a variety of ways.

Can Detroit become America’s next fashion hub? By Aaron Mondry

Special to Crain's Detroit Business

When he was little, Nelson Sanders remembers his parents dressing up almost every time they went out. And his parents weren’t the only adults in Detroit who cared about their appearance after they took off the work clothes. “There was crazy style here,” Sanders said. “My parents didn’t have much, but they’d always make sure they were decked out. On Friday nights in Detroit, you had to come with it.” While dressing up in a suit and tie or your nicest dress is no longer the norm for a night out,

that doesn’t mean fashion is no longer important here. That’s why Sanders started The Seen, which started off as a collective of fashion-conscious individuals highlighting neighborhoods and businesses, and has recently morphed into a creative marketing and talent agency. “When people think fashion, they think of Paris, New York, London,” Sanders said. “Most wouldn’t say Detroit. I wanted to show people around here and the world what Detroit style looks like. There are a lot of genuinely stylish people here, but they just don't have the platform to showcase it.”

Sanders isn’t the only one working to raise Detroit’s profile as an important fashion city, and not just in the way it dresses. In design, manufacturing and distribution for the fashion industry, Detroit is growing its local talent and businesses to become a fashion hub.

Keeping talent local Like Sanders, Karen Buscemi was frustrated with Detroit’s inability to realize its potential in the fashion industry. While the editor of fashion magazine StyleLine, she kept noticing in-

dustry talent leaving the state, almost always for New York City or Los Angeles. “They felt they couldn’t make it here,” Buscemi said. To remedy the problem, Buscemi founded the Detroit Garment Group (DGG), an organization that supports Detroit’s fashion industry in a variety of ways. For starters, DGG runs a business incubator program out of TechTown, which has mentors and services for the various aspects of running a fashion business, as well as access to industrial sewing machines and design studios. SEE HUB, PAGE 9

Detroit’s independent fashion retailers focus on customer experience, not price By Aaron Mondry

Special to Crain’s Detroit Business

JACOB LEWKOW

Rachel Lutz is owner of The Peacock Room and Frida, with a third, Yama, on the way this fall.

Rachel Lutz hates shopping. As a self-described plus-sized woman, she often had trouble finding clothes that fit her correctly and staff to help her through the process. “It’s pretty ironic that I now own two apparel retail stores,” said Lutz, owner of The Peacock Room and Frida, with a third, Yama, on the way this fall. Lutz opened her stores as a response to the deficiencies of the department store shopping experience. “It used to be that you’d have someone serve and help you,” Lutz said. “Nowadays, you dress under fluorescent lighting, which makes everyone look terrible. There’s no sales staff to assist, no one to interact with.” Each of Lutz’s stores has different theme —

vintage-inspired, casual, modern — but each is underpinned by the same principles. Fashion retail is on the rise in Detroit. National and international brands — John Varvatos, Nike, Under Armor, Warby Parker, Bonobos — have opened stores in downtown Detroit. But local, independent fashion retailers are carving out space for themselves as well. And they’re doing so by creating a special experience for the customer. Nationally, retail is changing at an astonishing rate. Online shopping has granted the consumer unprecedented convenience, which has resulted in shrinking market share and scores of store closures for big box retailers like Macy’s and J.C. Penney. While it’s impossible for even the most affordable department stores to compete on price and convenience with online retailers, traditional stores still

“People don’t buy a product, they buy an experience.” Sarah Donnelly, TechTown

have something valuable to offer. “People don’t buy a product, they buy an experience,” said Sarah Donnelly, retail services director at TechTown. “I firmly believe that the only thing left anyone has to sell is the service they provide. Brick and mortar can’t offer the same assortment of choices as Amazon. But nothing beats that in-person conversation about a product they make themselves or travel across the world to find just for you and your community.” SEE FOCUS, PAGE 9

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SPECIAL REPORT: FASHION BUSINESS

Q&A: Rufus Bartell, owner of Simply Casual in Detroit

For more than two decades, Simply Casual has been a staple of the Avenue of Fashion, a district on Livernois Avenue once known for its apparel-reRufus Bartell: lated business. Owner, Simply Over that time, Casual on the owner Rufus Avenue of Fashion. Bartell has seen plenty of changes in Detroit, along the way gaining insights into the city’s fashion industry.

HUB FROM PAGE 8

“Michigan has a lot of colleges that have really good fashion programs,” Buscemi said, “but not one offers a business program — they just teach the craft. Students graduate, and don’t know what to do with the skills.” Another issue in the state is the scarcity of skilled industrial sewers. So DGG helped found an industrial sewing certificate program through Henry Ford College with support from Michigan Works. The program has graduated 14 classes so far, and will be adding a fabric cutting program in the fall. The certificate program has become a pipeline to Buscemi’s business, Detroit Sewn, a full-service sewing factory she started in 2015 because of the lack of garment manufacturing in the state. “I was getting daily inquiries about where you could produce garments locally,” she said. Customers have flocked to Detroit Sewn. Buscemi said the company services 130 clients and has 12 employees. And all the industrial sewers have come from the certificate program.

Detroit’s innovative Buscemi’s most ambitious project is the creation of a garment district in Detroit. Renowned garment districts

FOCUS FROM PAGE 8

1701 Bespoke, a custom suit boutique that opened in 2015, is one of those retailers selling an experience. The store is located in an intimate third-floor loft space in Midtown. A service representative takes 20 different measurements for the customer to get the perfect fit, then goes over fabrics, designs, and color schemes to get the perfect look. Fabrics are purchased from some of the finest mills in Italy. Four to six weeks and two fittings later, the customer has the ideal suit. “It’s all about having a really high quality product,” co-owner Max Schmidt said. “We’re not the type of company that can compete on price or turnaround. But what we can really do

Avenue of Fashion should be defined by its historical ties to apparel? The Avenue of Fashion has a historic significance that should always be kept. And we’re working on getting historic markers for where it was. That said, it takes a lot of courage and vision to recognize when a name no longer fits the trend and where a neighborhood is going. We need new branding that represents this whole stretch of Livernois. We’re talking about three miles instead of three blocks. But the Avenue of Fashion can still be relevant. You have subdistricts here, and there’s still room for the Av-

enue of Fashion to be included in that. People buy into it and feel a sense of place when they’re here. So we can have a plan that’s forward thinking and also embraces history.

in New York City and Los Angeles contain concentrations of designers, cut and sew operations, bigger manufacturers, showrooms, distributors and wholesalers. The districts are a catalyst for the industry, which benefits from the vertical integration created by close proximity. But due to rising property values, the garment district in Manhattan is no longer a practical place to locate for smaller manufacturers or warehouses, which are essential to the industry. That’s where Detroit has an advantage. Buscemi’s initial plan calls for the aggregation of 40,000 square feet of space with room to grow. Detroit Denim is an example of a small manufacturer that might benefit from locating in a local garment district. The company makes men’s jeans. Each pair is hand-sewn and made from high-quality selvedge denim sourced in the United States. Because of the smaller production scale — Detroit Denim makes about 40 pairs of jeans per week — the company does limited runs, special orders, and unique cuts that other jean producers don’t offer. The result of this process is considerably less waste. “Our country promotes a culture of disposable clothing,” said Brenna Lane, production and operations manager. “Most clothes have a lifespan of months and then get thrown out. … I tell customers that they’re

investing in a piece of clothing, rather than something disposable.” Detroit Denim recently moved to a new retail and manufacturing space in Harbortown and currently employs eight people. Another Detroit clothing manufacturer, Lazlo, makes plain white T-shirts out of the Corktown makerspace Ponyride. Once again, it’s not your standard T-shirt. Lazlo’s shirts are made of supima cotton, an extra-long staple variety that results in

“We said, ‘Let’s try to make white the best possible white T-shirt’ and see what was possible,” Birky said. “But also know who it’s made by, where it’s made, and what it’s made out of.” The shirts are sold out of several Michigan stores as well as online. The company also worked with the Michigan Department of Corrections to train inmates in cutting and sewing and recently hired its first returning citizen, who earns $15 an hour. The biggest obstacle Detroit Denim and Lazlo have to overcome is consumer conventions around the cost of clothing. Higher-quality materials and fairly-compensated labor results in much higher prices — $250 for a pair of jeans and $110 for a T-shirt. “Even though these are not traditionally luxury products, because of the quality and craftsmanship, they’re priced as a luxury product,” said Erin Patton, director of Retail and Marketing at Ponyride. “Fashion has struggled for many years to have proven models that are sustainable. If someone doesn’t try to do it, it’ll never be done. … It’s a lot they’re asking to shift customer behavior.”

is focus on the customer experience and take care of them and give them highest quality product they can get.” Suits at 1701 Bespoke cost anywhere from $1,250 to $3,500. A block away at Thrift on the Ave, an upscale resale shop, the average item costs about $25. And yet, the two shops have a lot in common. “When we look at the fabric and construction of garments, quality is all we value,” co-owner Chris Prater said. “Today, because trends change so fast, the attention to detail is not what it used to be. So much is mass produced in China and the quality is just not there.” So Chris and his wife Tanisha curate the store with timeless pieces. “We sell things that don’t need to keep up with the times,” Prater said. “You

can buy something from us and, months from now, it will still be in style.” In fact, few of Detroit’s independent retailers pay much attention to trends. Because they don’t have the capital to drastically overturn their collection, they instead commit doggedly to an aesthetic, one that isn’t tethered to popular culture. Lutz has pretty strong opinions on the subject. “I’m an anti-consumerism shop owner,” she said. “When you buy something, you should wear it as long as you can and look relevant as long as you can. I think people should buy fewer things, but be more satisfied with the things they have and get more use out of them.” That message has clearly resonated with her customers.

What are your thoughts on the growing fashion retail scene in midtown and downtown? Well, there’s always been great retail shopping in the neighborhoods. But if you were only going to Midtown, you wouldn’t know that. If you went only to downtown Los Angeles, for example, you wouldn't know about Melrose. There hasn’t been a high concentration of retail downtown for some time. However, I’m certainly glad there are additional retail options. For a rebuilding city to have a wide variety of retail is a good thing. Do you think the future of the

“I tell customers that they’re investing in a piece of clothing, rather than something disposable.” Brenna Lane, Detroit Denim

softer and more durable fabric, and which accounts for about 3 percent of United States cotton production. Of this, Lazlo sources organic, which is only 1 percent of supima growers produce. Sustainability is important to Lazlo’s business model. Co-founder Christian Birky said he was appalled at the waste and poor labor practices in the fashion industry, where the norm is to manufacture clothes from cheap materials using cheap labor.

What do you think the future of the fashion industry is in Detroit? There’s talk about creating a garment district. Do you think that’s a viable plan? Regarding manufacturing and intellectual capital, Detroit is too far behind. The Chinese market has a labor force and market that’s at the right price. We’re too far behind them, Turkey, Korea. These places can push out thousands of garments

The time is now Buscemi’s been working on bringing the garment district to fruition for several years now. She said she has

by the hour. But here’s where Detroit can win: distribution and warehousing. Pick, pack and ship. We have lots of cheap warehouse space — it’s much cheaper here than in New York. And within a six hour radius, we have access to all the Midwest. And that’s where the garment industry really is. After something is manufactured, it’s boated over into a warehouse. That’s the nerve center. Detroit could be a hub, if you can get the city to sit down and get them to understand the opportunity. This is low-hanging fruit — we can put people to work. Cheap warehouse space gives this city an advantage. an important institutional partner, which she declined to disclose, and hopes to make an announcement by the end of the summer. “This is the perfect time,” Buscemi said. “Detroit is so damn sexy right now. Everyone wants to manufacture in Detroit, wants to say this is from Detroit, made in Detroit — it’s ridiculous.” Shinola, founded just six years ago, is possibly the most prominent example of the popularity of Detroit as a brand. The company displays “Detroit” on all its products, which they sell from over 20 stores in every corner of the United States. Other fashion companies have capitalized on the Detroit brand, such as Detroit Is The New Black, Detroit Versus Everybody, and Detroit Hustles Harder. While Detroit Denim and Lazlo may not be large-scale manufacturers, their impact could be significant. Birky thinks there’s an opportunity to define Detroit as a center for ethical clothing manufacturing. “There’s a number of people working to bring advanced knitting facilities to Detroit,” Birky said. “No city in the country owns that yet. This is new technology and a new approach that New York or L.A. doesn’t have a monopoly on. Detroit can say, ‘Here's what we do.’ That’s a movement that some city is going to seize sooner rather than later, and I hope it will happen here.”

PHOTO BY MICHELLE AND CHRIS GERARD

1701 Bespoke’s flagship location at 4160 Woodward Avenue, which opened in January 2016.

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DETROIT 1917 / 1967 / 2017 PART 2: STILL REBUILDING

Editor’s note: This is the second in our two-part series about the 1967 uprising — an exploration of economics and business in Detroit in the 50 years before the summer of ’67 and the 50 years since. Last week, we chronicled the decades of social and economic racial tension that contributed to the violent summer.

VAUGHN FROM PAGE 1

Early that morning of Monday, July 24, Vaughn arrived at his bookstore and found that it been spared from the fires that had been set to mostly white-owned businesses along Dexter, Linwood, Grand River and 12th Street, the epicenter of the riots. But Vaughn found a five-word sign of trouble spray-painted on the front of his store: “Long live the black revolution.” “I said, ‘Uh, oh, I know I’m in trouble now,’” Vaughn recalled. Two nights later, during a citywide curfew, according to residents in a nearby apartment building who told Vaughn they watched it happen, Detroit police officers arrived in three cruisers around 4 a.m., knocked down the store’s door, broke windows with the butt of their rifles and set the place on fire. No books had been stolen, but the bathroom sink was intentionally clogged to flood the store and ruin the books that didn’t burn, Vaughn said. “I know that Negroes did not do this,” Vaughn told a Michigan Chronicle reporter while surveying the damage the morning of July 27, 1967. “Why should they? In the first place, no Negro was out on the street at that time of morning — he would have been shot down. ... And what Negro would chance his life just to steal a few books?” Vaughn’s long-standing claim that his bookstore was intentionally set fire and flooded by the Detroit police was never substantiated in official investigations of Detroit’s bloody and destructive uprising, which led to 43 deaths, hundreds of charred buildings and millions of dollars in damage. Witnesses recanted their story to FBI agents, and only one woman was ever willing to testify at a public tribunal black community leaders held at the Shrine of the Black Madonna on Linwood. Fifty years after those five riotous

days in late July, city leaders know Detroit’s nascent comeback hinges on rebuilding a vast network of small businesses that were lost in the aftermath of 1967. Unlike most businesses that were destroyed by the riots, Vaughn was able to rebuild his retail enterprise, hang on for two more decades of slow decline and then watch his children carry on the spirit of entrepreneurship that propelled him to Detroit in search of a better life. In examining how Detroit can rebuild thriving neighborhoods of the future, the burning of Vaughn’s Bookstore serves as a focal point of the decades-long decline of the Dexter and Linwood neighborhood that was once a mixed-race enclave of blacks, Jews and Muslims with a thriving commercial corridor. Before the riots, Dexter Avenue had restaurants, a Jewish delicatessen, a Muslim-owned fish market, record stores, a tuxedo rental shop, the Dexter Theater, the Minor Key jazz club and Bowl-O-Drome, a bowling alley and jazz club, according to lifelong residents and newspaper accounts. In 1963, one-time auto worker Ed Davis opened the nation’s first black-owned Chrysler-Plymouth car dealership on Dexter Avenue — two blocks from Vaughn’s book store. Today, all that remains of Vaughn’s original bookstore is a boarded-up one-story commercial building with a collapsed roof along a mostly deserted corridor that emptied out in the years following the 1967 riots. Most of the nearby commercial buildings along Dexter Avenue are boarded up, with some slated to be razed through the city’s on-going blight removal efforts. “Dexter used to be a heck of a street ... no vacancies along here,” said Bill Redden, an 86-year-old concrete construction company owner who has lived in the neighborhood his whole life. “Dexter back then was almost like Woodward downtown.” CONTINUES ON PAGE 12

Surgical resident John Crissman was called into work at Detroit General Hospital on July 23, 1967. He worked in the post-op ward for the next five days. Here, he remembers what he saw.

Five days at Detroit General Hospital Unrest across the country during the summer of 1967 changed many procedures at hospitals, including security, visiting hours and

By Jay Greene | jgreene@crain.com

Read more on crainsdetroit.com

What 1967 means for 2017, and beyond Refocusing: Focus:HOPE and New Detroit were both formed to address the root causes of the uprising in 1967. Fifty years later, both organizations are shifting strategy and sharpening their focus on racial equity. Deeper data: What today’s economic indicators tell us the future might hold for Detroit in the next 50 years.

Catch up on last week’s report Part 1: How urban renewal routed a thriving black business district — and foreshadowed the destruction of 1967. Fournier: The words we use to talk about what happened in 1967.

ohn Crissman had an omen of the violence that erupted in Detroit in the summer of 1967. ¶ He was a second-year surgical resident at the former Detroit General Hospital, now called DMC Detroit Receiving. He remembers vividly an elderly black woman he treated who gave him a warning of unrest on the horizon. ¶ “She said, ‘Doctor, be careful out there. Things are not good in the city. There will likely be some fracas.’ Then, she tipped over her pocketbook and a .38 revolver fell out,” said Crissman, shaking his head in remembrance. ¶ A few days later, violence erupted on 12th Street after police raided an unlicensed bar on the city’s near west side.

Crissman, now 78, is the former dean of Wayne State University School of Medicine, a role he held from 1999 to 2004. He was also a member of the medical school faculty until his retirement in 2014. But on a Sunday afternoon in 1967, Crissman was 28 and enjoying a rare day off with friends at a Tigers doubleheader against the New York Yankees. “We were driving home and I saw

the smoke coming out from the horizon. I said, ‘Oh, something is going on,” said Crissman. “We got back to my house on Dickerson, across from Chandler Park, and the TV announced: ‘Would the Pontiac National Guard please report to your armory.’ ” An hour later, Crissman was called in to Detroit General. Injured citizens were starting to arrive via

ambulance and police escort. Over the next five days, Crissman saw first-hand more than 900 injured people come through the city’s main trauma hospital. In total, 43 people died during the unrest, 33 black and 10 white. At least 26 of them died at Detroit General Hospital. “We had no word or alerts from staff, no official preparation for any

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JACOB LEWKOW FOR CRAIN’S

Crissman was a second-year surgical resident at Detroit General Hospital, now DMC Detroit Receiving, in 1967. He oversaw the post-op ward during the five-day uprising.

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emergency crisis preparations. But at Detroit General, “we were ready for it,” said Dr. John Crissman. emergency,” he said. “We were just always ready. You could have had World War Three and you would have been taken care of.” When Crissman arrived at Detroit General, ambulances were transporting patients to other hospitals to make room for the traumatic injury patients everyone expected: people who had been shot, stabbed, tear gassed, beaten or cut by broken glass. The hospital’s disaster plan had been put into effect.

What he saw By Monday morning, Crissman said the rebellion turned into a riot. “People were destroying, burning,” he said, and “we became very busy.” Crissman was assigned to handle

all post-operative activities. He oversaw a 120-bed post-op ward. “I never went to the OR. It was reserved for attendings and senior residents. They loved to operate and they stuck me with the dirty work. But I was all around the hospital and saw everything. I wasn’t isolated in the OR.” Most of the people who came to the ER over the next five days were brought in by police — many of them in handcuffs. “General hospitals had prisoners all the time. There were always two policemen at the start of every triage. We had a lot of police supervising the patients” along with doctors and nurses. “This was not a change from normal activity.” But regardless of how angry or violent people were during the riots,

the injured prisoners were calm and well-behaved in the hospital. “We had a very polarized community. But once a black person is injured, your relationship changes drastically. They know you are there to help them. I never had a problem,” he said. On Tuesday — the third day of the riots — Crissman was in the fourthfloor post-op ward. It was quiet, as usual. “We had the lights on. They were shining through frosted glass windows. I heard a ‘ping’ sound. Nobody really paid attention. Then another ‘ping,’ and another ‘ping.’ We recognized somebody was shooting at us. We turned off the lights and moved the patients out.” Crissman said police went out to the parking deck across the street

looking for the shooter. “They went up and killed him. The riots had been going on long enough. People who were displaying bizarre, anti-social behavior were not treated kindly,” he said. Another incident Crissman recalls involved a young white teenager, maybe 16 years old, who the police brought in to the hospital. Crissman said the teenager’s older brother, in his early 20s, had told him they had come to Detroit from Ohio “to shoot some cops. They got into an abandoned building and started sniping.” At this point, the military had jeeps and soldiers patroling the riot area with 50-caliber machine guns. “They would just aim where the gunfire was coming from and blow out the walls. The young kid panicked and ran out the front door and tripped, knocking himself out. That probably saved him. His brother was obviously killed.” One of the saddest moments for Crissman was when he was helping to treat a fireman who had been electrocuted putting out a fire when a high-voltage wire fell on him. “His wife was there. He was badly hurt, burned frontal lobes, was blinded. The electricity came out his left arm and (his arm) was almost totally destroyed. It was awful. He died a few days later.” Over the next two months after the riot, residency work at Detroit General settled down to more routine duties for Crissman. But he said he noticed a large number of people coming in for alcoholism and pancreatitis. “They reported (to me) stealing large amounts of booze from liquor stores,” which they drank over the next five to six weeks.

Crisis response The unrest across the country during the summer of 1967 changed many procedures at hospitals: security, visiting hours and emergency crisis preparations. Edwin Crosby, M.D., president of the American Hospital Association, gave advice to hospitals to prepare for riots, in a paper published by the New England Journal of Medicine.

He advised hospitals to lock all doors except for the ER and discontinue visiting hours. Other advice is to have adequate security, safe transport for staff and patients, create flexible schedules, ensure adequate medical supplies and blood. But at Detroit General, Crissman said “the riots didn’t change the hospital one iota. We were ready for it and always maintained tight security. Before, we always checked visitors. But during (the riots) we had no visitors whatsoever.” The hospital was “like a MASH unit,” Crissman said. You were hurt and you were taken care of. No questions asked. But it’s true, Crissman said, that the team at Detroit General pulled together. Alfred Plotkin, administrator of Detroit General at the time of the unrest, said it was one of the most amazing displays of camaraderie he’d seen in two decades of work at the institution. “In the 20 years I’ve been here, I’ve never seen such spirit. It was completely amazing,” he said to Hospitals magazine. “Some of our people worked 36 to 40 hours with only an hour or two of sleep when they could.” Crissman said he believes the riots could have either been prevented or ended much earlier if Detroit Police had better tactics and exhibited greater understanding of the black community. He said he believes Detroit Police learned their lessons and are much better trained today. After five days on duty, “I finally went home Thursday for the first time,” he said. “They worked my ass off there the whole time.” After his second year of residency, Crissman said he was drafted into the Air Force. “Every male doctor of that era went into the service, either after internship or go into the lottery. I got a two-year exemption and then I went” to San Antonio. “Don’t ask me why. I should have gone to Vietnam.” After four years of surgery, he changed his residency to pathology and finished up at hospitals in Cleveland and Cincinati. “I went to Detroit General for excitement,” he said. “And I got it.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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DETROIT 1917 / 1967 / 2017 PART 2: STILL REBUILDING FROM PAGE 10

Seeking opportunity Like tens of thousands of young black men in his generation, Ed Vaughn came to Detroit in 1956 from the South in search of work and opportunity after earning a bachelor’s degree at Fisk University in Nashville. He grew up in Dothan, Ala., the same hometown of Dr. Charles H. Wright, the physician who founded the Museum of African American History in Detroit that bears his name. “When I got to Detroit, blacks couldn’t get jobs anywhere, except in the automobile industry, and they stuck you in the worst place in the plant,” Vaughn said. After busing tables at a downtown resturant, Vaughn worked at the Post Office until he was drafted in 1957 for two years of service in the Army. When he was discharged, Vaughn headed back to Detroit and resumed working at the Post Office until he took up selling African American books on the side out of his car trunk. At the time, Vaughn said the Civil Rights movement was fueling a renaissance for African history, black literature and political writing in response to systemic post-Civil War racism. In 1964, Vaughn and his business partner, Polly Ross, opened up a bookstore primarily selling black literature at 12123 Dexter Ave., in the heart of what had been a predominately Jewish neighborhood for the first half of the 20th Century. “Everybody thought I was crazy, but I knew something was happening, something was about to go down … something was on the horizon,” Vaughn said. “The movement began to take shape and people were looking for black books.” The store quickly became a gathering spot on Thursday nights for the black community to discuss the pressing issues of the day. Vaughn dubbed the gatherings Forum ’65, Forum ’66 and Forum ’67. Vaughn had carved out a niche business, but was mindful that outsiders considered him a “subversive” at an increasingly tense time of social upheaval in the country. Edward Hancock, a 66-year-old black Detroiter who has lived in the neighborhood on Webb Street since 1956, said he recalls browsing books in Vaughn’s store as a teenager.

JACOB LEWKOW FOR CRAIN’S

The Detroit Land Bank Authority has been demolishing blighted properties near Dexter Avenue. “It’s a beautiful thing what they’re doing across the street,” said one neighborhood resident. “That was a black consciousness movement, which some maybe would mischaracterize as a black power movement," Hancock said. “There was an awakening of black people.”

Legacy burned Vaughn, who is now 82, believes his store was targeted by police because it was rumored to be a gathering spot for the Black Panther Party

and other groups advocating violence against the government — accusations Vaughn denies to this day. Inside the bookstore after the fire and flood, framed-glass posters of Malcolm X, Martin Luther King Jr. and southern black heroes were smashed, Vaughn said. Book cases were overturned, painting canvasses were slashed and the phones were ripped from the wall, the Michigan Chronicle report-

ed in its July 29, 1967, edition documenting the five-day riot. “Every book that I had left that did not burn was floating in water,” Vaughn recalled. For Vaughn, the destruction of his store actually served as short-term boost for his entrepreneurship as word spread internationally about books being burned in Detroit. As Vaughn rebuilt the store, book donations to replenish the shelves

“Everybody thought I was crazy, but I knew something was happening … something was on the horizon. The movement began to take shape and people were looking for black books.” Ed Vaughn, pictured in 1967 and now

poured in from publishers and multiple countries. “The Chinese government sent me tons of books,” Vaughn said. “Business really took off after the cops burned my store.” Vaughn used his late 1960s and early 1970s profits to invest in commercial real estate in the city. But the book business began to decline along with Dexter Avenue, where several businesses never reopened after the riots, Vaughn said. Like many parts of Detroit, white and middle class black flight sped up in the years following the rebellion. Many of the black-owned businesses along Dexter Avenue and surrounding corridors disappeared. After selling 1,000 Chrysler, Plymouth and Imperial cars annually in the mid-1960s, Ed Davis’ dealership closed in 1971, according to the Detroit Historical Society. “The legacy of black entrepreneurship was burned, destroyed, decimated during the riots,” said Harold Ellis, a retired Detroit educator who taught one of Vaughn’s daughters in school. Ellis, 71, grew up in the Dexter and Linwood area and lives in the historic Russell Woods neighborhood to the northwest of the riot zone. “We did have black businesses,” said Ellis, who was in college at the time of the riots. “But when they burned down, many of them did not come back to life.”

‘Die-hard Detroiter’ In the late 1970s, Vaughn moved his bookstore two doors down on Dexter for a few years while he tried his hand at politics, serving one term in the Michigan House and then working in the administration of Mayor Coleman A. Young. The independent book-selling business was in decline, and Vaughn eventually moved the store around to a downtown store on Griswold, followed by a stint on 7 Mile near Outer Drive before buying a building at 16527 Livernois Ave. across the street from the University of Detroit Mercy. Vaughn’s book store faded away in the early 1990s as sales declined and Vaughn pursued a second stint in politics, winning a seat in the state House in 1994. But small business ownership has lived on in the Vaughn family.

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Detroit 1967 timeline: 1967 to 2017 >> July 23-29, 1967: On Sunday, July 23, at 3:30 a.m., Detroit police raid an illegal after

April 4–5, 1968: Violence again erupts in the 12th Street area of Detroit after the assassination of Martin Luther King Jr., amid more than 100 instances of rioting across the country. The Michigan Army National Guard quells the riot. One person is killed, and the number of buildings damaged is much smaller than 1967.

hours bar in the building that housed the former Economy Printing Co. at 12th Street and Clairmount. Police find 83 people inside, celebrating the return of two soldiers from Vietnam. Additional paddy wagons are called from neighboring precincts as a crowd grows agitated in the hot summer night. Bricks and bottles are tossed at police. At 6:30 a.m., Hardy Drugs is the first building set ablaze. There would be 1,300 more fires by the riot’s end, requiring assistance from 43 other fire departments. By the end of the day on Sunday, the crowd on 12th Street has grown to about 10,000 people and violence and looting begins to spill into other areas of the city. Detroit Police Commissioner Ray Giradin seeks help from the Michigan State Police, Wayne County Sheriff Department and the Michigan National Guard. Mayor Jerome Cavanagh orders all bars, theaters and gas stations closed. A 9 p.m. curfew is mostly ignored. It takes five days and more than 8,000 Michigan Army National Guardsmen and 5,500 veteran paratroopers from the Army’s 82nd and 101st Airborne divisions to quell the violence. In the end, 2,509 businesses have been destroyed. The human toll is 43 dead (including 33 black residents, killed mostly by police and troops), 1,189 injured, and 7,231 arrested. Ironically, the Economy Printing Co. survives the riot without much damage.

>> Oct. 10, 1968: The Tigers beat the

DETROIT HISTORICAL SOCIETY

St. Louis Cardinals to win the World Series. Thousands celebrate peacefully in the streets, and the team plane is diverted to Willow Run Airport because an estimated 30,000 jubilant fans had gathered at Detroit Metro, prompting authorities to halt all air traffic.

>> Jan. 1, 1974: Former state Sen. Coleman Young takes office as Detroit’s first black mayor. He’s re-elected four times before retiring in 1993. 1976: 12th Street is renamed Rosa Parks Boulevard. July 1, 1976: The first phase of the Renaissance Center complex opens along the Detroit River at a cost of $337 million.

DETROIT HISTORICAL SOCIETY

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Factors leading to the 1967 riots

The events of ’67 were about more than the economy, but the numbers show that job loss and labor discrimination were part of the equation. How do these factors look today?

Employment

The economic boom of WWII drastically reduced unemployed Detroiters from 135,000 in 1940 to 6,000 in 1943

1940: 135,000 1943: 6,000 Black workers accounted for 4 percent of auto workers at the start of WWII but grew to 15 percent by 1945.

1940: 4% 1945: 15% By the 1950s, black Detroiters earned 81 percent of what their white male counterparts earned — one of the smallest wage gaps in the country. 81%

De-industrialization

Between 1947 and 1963, production shifts, consolidation and automation led to 143,000 job losses in Detroit. Job losses were exacerbated by the closures of major auto employers, including Packard Motor Car Co., Hudson Motor Car Co. and Studebaker Co.

Michgan’s % of U.S. auto jobs 1950: 56% 1960: 40%

Labor discrimination

Despite a labor shortage in post-WWII Detroit, most job listings with the state’s jobs agencies specifically excluded minorities. Job listings that were closed to nonwhites by written specifications, by year: 35.1% 44.7% 55.5%

1946

1947

1955

2,509 Detroit businesses were burned, looted or otherwise destroyed — the equivalent of losing every business in the city of Ferndale, Garden City, or Allen Park. $43 to $49 million in estimated property loss in 1967 dollars, or $315 to $359 million in today’s dollars. Missing from that equation are untabulated losses from businesses that were under-insured or had no insurance at all.

Current-day vs. 1967 economic indicators

Black unemployment in Detroit 1960: 18.2%

2014: 14.4%

White unemployment in Detroit 1960: 5.8%

In 1994, Vaughn’s son, Eric, bought the 91-year-old building and turned his passion for framing photographs and paintings into a small business, Eric’s I've Been Framed. “When I decided to come into here, my wife thought I was crazy because the building was in disrepair,” Eric Vaughn said. “It needed a new roof, windows, doors — the whole nine yards. But I had the vision. I could see this place being a good place.” Eric Vaughn said he had to take out a second mortgage on his home in the Boston-Edison neighborhood to get his gallery and framing shop open. “I didn’t get any bank loans, no grant programs like they have now, no Motor City Match — none of that was around at the time,” Vaughn said, referencing a Detroit Economic Growth Corp. grant program for small businesses. Like many middle class blacks of his generation, Eric Vaughn is the only one of his four siblings who stayed in Detroit. His brother and two sisters moved to Atlanta, where they have made a life as small business owners. Randall Vaughn owns a barbershop and sisters Sybil and Attallah own and operate a beauty salon. “My wife's been saying for years she wanted to move, but I’m a steadfast and die-hard Detroiter,” Eric Vaughn said. Eric’s 22-year-old son, Wynton, has started making sports T-shirts and selling them in pop-up shops in Virginia while attending college at Hampton University. “He’s got the bug,” Eric Vaughn said of his son. “I think he’s going to be an entrepreneur too because he’s got that mind and that drive. He gets it from his father and his grandfather.”

Hou JACOB LEWKOW FOR CRAIN’S

Above and left: A community carnival Eleos Ministry hosted in the lot behind the former Vaughn’s bookstore attracted about 600 people on a June evening.

Sign of life

Riot damage

2014: 4.9%

first

On Dexter Avenue, the only remnant of Vaughn’s book store is a portion of the original glass window above the entrance that bears the last two digits of the 12123 Dexter Ave. street address. The last business to occupy the building was O.M School Resale & Boutique. A hand-painted sign on building’s facade said the store sold a “little bit of this, little bit of that.” It’s unclear when the store shuttered for good, but the building is one of thousands of properties transferred in foreclosure to the Wayne

County Treasurer’s Office over the past decade for unpaid property taxes, city records show. But in the midst of desperation, there’s a sign of life on the next block to the south at the corner of Dexter and Duane St. Inside a former Monster Burger restaurant, a Kansas City-based Christian ministry has set up a coffee shop that has become a popular gathering place for longtime residents like Ellis and Hancock. Eleos Coffee House opened in October of last year, selling coffee, pas-

Oct. 14, 1984: The Tigers beat the San Diego Padres in Game 5 at Tiger Stadium to clinch the World Series championship. Fans riot, overturning vehicles and setting them ablaze. National and international press coverage is negative. No one is killed.

April 29-May 4, 1992: Violence erupts in Los Angeles after a jury acquits four police officers in the beating of motorist Rodney King. 58 are killed and the damage is estimated at more than $1 billion — making it the first U.S. riot more costly and deadly than Detroit’s 1967 violence.

1989: Mike and Marian Ilitch move their Little Caesars pizza chain headquarters from Farmington Hills to Detroit after renovating the ornate Fox Theatre and its 186,000-square-foot office space.

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C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7

DETROIT HISTORICAL SOCIETY

June 15, 1990: Eight people are killed in Detroit, from accidents, gunfire, and a hit-and-run, during a citywide celebration of the Detroit Pistons’ NBA championship.

Jan. 1, 2002: Kwame Kilpatrick takes office as mayor at age 31, the city’s youngest-ever chief executive 2002-2003: Compuware Corp. founder Peter Karmanos Jr. spends $350 million to build a 15-story company headquarters in Campus Martius and brings more than 4,000 employees to Detroit from the suburbs. Sept. 18, 2008: Felony convictions force Kwame Kilpatrick to resign as mayor.

tries, sandwiches and hosting daily Bible study sessions and monthly community meetings with Detroit police officers from the 10th Precinct. The coffee shop ministry is managed by two couples from Missouri: Sean and Joni Adams and Nicole and Jacob Cumberford. “Everything about this place is exactly what we thought the Lord was leading us to do,” said Sean Adams, a pastor from the St. Louis area who moved his family of five to Detroit to run the ministry. The coffee shop’s vibrancy has given longtime residents like Harold Ellis hope that a turnaround for Dexter is just around the corner. Across the street, demolition contractors for the Detroit Land Bank Authority recently knocked down an abandoned commercial property that was most recently a liquor store. Burntout and stripped houses near Dexter Avenue are next in line for demolition, according to the land bank. “It’s beautiful what they’re doing across the street,” Ellis said as a bulldozer cleared the lot across Dexter from the coffee shop where he sat on a recent day in May. “One day that’s going to be a business again.”

Before the coffee shop opened last fall, the Eleos Ministry launched its mission in the neighborhood with a carnival in a vacant grassy field behind Vaughn’s original bookstore where houses once stood. Eleos held its second annual carnival on June 8, attracting about 600 people from around the neighborhood. Children played carnival games and bounced around in inflatable bounce houses as Eleos’ volunteers grilled and served up hot dogs and chips. “This is the best thing that’s happened to this community in a long time,” Hancock said as he pushed his grandson around in a stroller. In the middle of the evening carnival, Eric Vaughn showed up to pose for a photo for Crain’s in front of his father's original store. He hadn’t driven down Dexter in a long time and didn’t know about the coffee shop, much less the community carnival taking place in the lot behind his father’s first book store. “This is really amazing,” Eric Vaughn said. “Who is brave enough to come over to this area and start a coffee shop?”

2010: Quicken Loans Inc. founder Dan Gilbert relocates the company’s headquarters and 1,700 employees from Livonia to the Compuware building.

July 18, 2013: Detroit files for Chapter 9 bankruptcy protection. Long-term debt obligations are estimated at up to $20 billion.

Dec. 27, 2011: Gov. Rick Snyder creates a review board for Detroit’s finances. Within a few months, the board determines the city is in jeopardy. April 4, 2012: Detroit City Council agrees to a consent agreement with the state to shore up the city’s finances in a bid to avoid bankruptcy. March 14, 2013: Michigan Gov. Rick Snyder appoints Kevyn Orr as emergency manager for Detroit. By May, Orr reports that the city is insolvent and cannot meet payments to creditors, unions and pension funds.

Sources: detroithistorical.org, detroit1701.org, U.S. Census, thewright.org, Chicago Tribune, New York Times, detroitjournalism.org, mtu.edu/mhugl, hourdetroit.com, Crain’s archival and research. Compiled by Bill Shea.

Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

Nov. 5, 2013: Mike Duggan is elected as the city’s first white mayor since Roman Gribbs in 1973. However, his power is curtailed before taking office because of the state takeover of the city. Dec. 10, 2014: The city exits bankruptcy. Orr resigns as emergency manager and government control of Detroit returns to the elected city council and mayor. May 12, 2017: The $187 million QLine streetcar launches passenger service along a 6.6-mile loop of Woodward Avenue in downtown Detroit.

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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 // J U N E 2 6 , 2 0 1 7

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SPOTLIGHT Art Van Elslander names son firm’s president Art Van Elslander has named his son Gary Van Elslander president of his new company, Van Elslander Capital LLC, effective July 1. The company, formed last fall, invests in industries with high growth potential. It said early on that while it Gary Van plans to focus inElslander: vestments on loPresident of new cal and Michicompany. gan-based companies, it could expand that regionally or nationally. Gary Van Elslander, 66, was president of Warren-based Art Van Furniture Inc., the company his father sold to Boston-based private equity firm Thomas H. Lee Partners LP in a deal announced in late January and closed a month later. He left the company effective June 1.

Detroit Zoological Society names new CFO The Detroit Zoological Society appointed Jeffrey Evans as its new CFO. Evans, 54, comes to the zoological society from a position as CFO of Stout Risius Ross Inc., which has an office in Southfield. Evans started Jeffrey Evans: in his new role Formerly at Stout last week, leadRisius Ross ing the zoological society’s information technology arm and overseeing accounting, budgeting, financial reporting and investing. Evans, a certified public accountant, has about 30 years of financial leadership experience. He received his master’s degree in business administration from Wayne State University.

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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 // J U N E 2 6 , 2 0 1 7

CHINA FROM PAGE 1

population will be considered middle class by 2022, according to the report. In 2000, that figure was just 4 percent. China’s retail market totaled $5 trillion in 2016 and is expected to be 11 percent larger than that of the U.S., the current world leader, by 2020. Much of that will be growth in online sales — where 60 cents of every dollar spent online worldwide will be by Chinese consumers by 2020, according to Alibaba. “There’s quality here (in the U.S.),” Joseph Tsai, Alibaba’s vice chairman and co-founder, said in an interview with Crain’s. “Consumers in China, what they care about is anything they eat, they put on their face (cosmetics) and baby products. They want safety and quality. That search for quality is only going to increase with the growing middle class in China.” Alibaba held Gateway ’17, its first non-investor event in the U.S., to find small businesses like Dave’s Sweet Tooth and sign them up to sell on its platforms like its business-to-consumer portal Tmall and consumer-to-consumer portal Taobao. More than 3,000 attended the June 26, 2017 conference, with roughly 700 businesses from Michigan. Anthony Montalbano, managing director and partner at Detroit-based website and mobile app development company Ambr Detroit LLC, attended Gateway to learn more about opportunities for his clients. “This is unknown territory for me,” said Montalbano, who was invited by Goldman Sachs 10,000 Small Businesses program, a sponsor of the event. “I came for info gathering, to find awareness of what (Alibaba) is trying to do. What I’m realizing is there’s a hell of a lot of opportunity outside the U.S.” For Dave’s Sweet Tooth, that’s toffee that could retail for $10 or $12 in China, compared with just $5.99 in the U.S., Chmielewski said. This is in line with the spending habits of the Chinese consumer, according to a recent Boston Consulting Group study, which said 61 percent of Chinese consumers indicated they’d pay more for products made in the U.S. That extra margin would be needed to export to the Chinese market due to extra expenses for warehousing, chilled shipping containers, marketing and packaging in the Mandarin language, among other considerations. Chmielewski said he discussed those options with half a dozen service providers at the Gateway ’17 event. “Shipping chocolate around the world is a scary thing for us,” Chmielewski said. “Logistics are a concern; warehousing, fulfillment, etc. It has to be the right fit, but I think we’ve made some really important connections here (at the event).” But using Alibaba’s services and selling into the China market are not without risk. Many of the small companies that sign on to Alibaba’s services will be exporting for the first time, many

without fully understanding the Chinese culture, Tsai warns. The companpies that perform the proper due diligence to understand shoppers in China will have the most success, versus those that are looking to just dump product as-is into the market, he said. “Selling in China is not for everybody,” Tsai said. “(The U.S. business) has to have an open mind about taking their offering to a consumer population that’s very, very different than the U.S.” Tsai said the exporter must understand that packaging in China is different and fashion styles are different. So while people are eager to spend money on U.S. products, there are cultural norms Chinese shoppers expect. Legal hurdles are also important

“I don’t think it’s any more risky doing business in China than it is here. You’ve got to protect your intellectual property to get maximum value ... but the market opportunity in China is just too big to ignore.”

“Using Alibaba may alleviate some legal concerns, but you better have lawyers on the ground in China, so if something does go wrong, you have the proper help in navigating that system.” Alibaba has also struggled for years in preventing counterfeit products John Nemazi, partner and co-chair from showing up of patent protection for Brooks on its sites. In Kushman PC December, the Office of the U.S. Trade Represento consider for any business, but par- tative put Alibaba’s Taobao marketticularly small businesses that lack place on its “Notorious Markets legal and cultural sophistication, List.” The list is meant to steer U.S. said Steve Richman, partner and at- shoppers away from marketplaces torney focused on international that reportedly engage in and facilicommercial law for Detroit-based tate counterfeiting and violating of Clark Hill PLC. U.S. intellectual property laws. The “The main concern with China is U.S. removed Taobao from the same always enforcement; it’s a very dif- list in 2012 after it began a new stratferent legal system in China that is egy in combating counterfeit prodpoliticized, heavily influenced by the ucts. Communist party,” Richman said. Michael Evans, Alibaba’s presiCRAIN’S DETROIT BUSINESS

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dent, questioned publicly whether the move was politically motivated against the Chinese company, noting Alibaba had taken significant steps in battling piracy, including blurring trademarks in product images and technology that prevents counterfeit sellers from returning to the sites. But the opportunity is worth the risk, said John Nemazi, partner and co-chair of patent protection for Brooks Kushman PC in Southfield. “There are issues with counterfeiting on everywhere, even Ebay,” Nemazi said. “It’s hard to police those things, but I don’t think it’s any more risky doing business in China than it is here. You’ve got to protect your intellectual property to get maximum value ... but the market opportunity in China is just too big to ignore.” For Chmielewski, the risks aren’t great enough to sway his desire to expand. “They can replicate our packaging, I suppose, but I don’t think they could replicate our quality,” he said. “Why worry about a threat I can’t change? The opportunity outweighs that risk, in my opinion.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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JOB FRONT POSITIONS AVAILABLE

PRINCIPAL ARCHITECT û

Work with cros-func Cust & dev team in anal requi & desi Android Apps/Serv for Autom Infot proj with on-time & high qual deli to mult cust Work with global SW dev team to dev new feat, debug issues & wri test case for unit test. Lead & or parti in meet bw the cust & inter team (onsite & offsite res) for des rev & clarif in the specs doc. Lead coms on Perf issu bw cust & Harman, incl repo & investi the issue, identify priorities, updat track & root cause doc etc. Dev & track KPIs for each SW rel to insure it meet the accep criteria. Inter with Test team & peer team to share k’ledge in order to per dev & debug acti Sup & mentor less exp peer by shar k’ledge in Android, Linux, Perf analy & related tools to carry-out the activ. Cond code & des rev, appr chan. Keep abreast of new tech & meth for the pur of reco chan that will bene curr & fut cust progr. Appl intens & diver k’ledge of engi princi & prac in broad areas of assig & related fields. Work with prog mngr to dev proj plan to manage proj risk & to sec dom deliver. Lead activ of Sys domain to ramp up new proj with prog mngr & other teams. Req: Bach’s deg or for Equi in Comp Sci Eng/Electr, Elec, Comm or Tele Eng & 8 yrs of progr work exp in SW desi & dev on Mob Smartphone p’form and/or In-Vehicle Infot plat in lang of C/C++ and Java as SW Eng/ Sr SW Eng, Lead or Arch, spec to Android Apps Framework & apps dev. Alt: Mast deg or for Equi in Comp Sci Eng/Electonics, Electrical, Comm or Telecom Eng & 4 yrs prog work exp in SW design & dev on Mob Smartphone plat & or In-Vehicle Infot plat in lang of C/C++ & Java as SW Eng / Sr SW Eng Lead or Arch spec to Android Apps Framework & apps dev. 8 yrs of extensive exp in SW des & dev on Mob Smartphone and/or In-Vehicle Infot plat in lang of C/C++ & Java. Excel skil in Obj Orien Program & Obj Orien Des. Min 8 yrs of exp of UI Frameworks dev from In-Vehicle Infot or smart phone. Min 5 yrs of exp in Android Framework dev. Expert in Android compa test & issu anal , Android Proj prot test, GIT & GERRIT Exp in UML Exp in des & build large complex SW in a real-time, embed, multi-inter env Shld be well ver with OS con, OOP, Des Pattern & o’view of the sys compo of Linux, Android. Excel prob sol ski with exp of using sys anal & profi tool for debug & perf opti.

Please send CV’s to Harman, Attn: Gokul Job Code PA-02, 2002 156th Ave NE #200 Bellevue, WA 98007.

Work location: Novi, MI. May have long term assignment in other location in U.S. including Livonia, MI area.

SENIOR ENGINEER

Perf root-caus eff & gener tech solution for prob reso to component level. Prov f’back & docu on issue. Supp pre-prod & prod build activ & vehicle ride tri as req. Revi Captur Test Fleet data for tren & leads/aids in iss investi as need. Plan & impl updat to test prop. Coordinate & perf Cap Test Fleet SW updat as neces. Comm, coordin & cons with engin depart. Particip in PDT meet. Respon for eval design & component & sys perf, perfor analysis, dev & test of major eng proj & maintain test prop. Req: Bach’s degree or for equi in Eng in one of the foll dis: Mech Eng, Elec Eng, Indus Eng, Manu Eng, Comp Sci, Aeron Engi with 2 Yrs of rel work exp in autom infotain sys. Exp must incl:- 2 yrs of exp in Automotive elec/elec/SW engi exp, K’ledge of vehicle serial data comm (CAN, MOST, ETHERNET) K’ledge of verif & valid proc (component- bench, vehicle-level) U’standing of HW des & fail mode Res dri indi with high levels of initi & ptivity High level of oral & wri comm skill - 2 yrs exp work with curr a’motive infotain sys incl Navig, GPS, B’tooth, USB, Speech Recog, Microphone, Hands-free Proce & Audio Mana, Disp & HMI, Cam & Vid Mgmt, AM/FM/XM Rece/Tun Internet Apps incl. Internet Rad, Med Play, Text to Spe Sys & Phone, Data Carr 7 Data Dw’loads.

Please send CV’s to: Harman Attn: Gokul - Job Code SE-01, 2002 156th Ave NE #200, Bellevue, WA 98007. Work location: Novi, MI.

RANDOLPH FROM PAGE 1

Those efforts include the new Detroit at Work initiative connecting job seekers and employers, the creation of new training programs for jobs in information technology and patient attendant care at city hospitals and a focus on training imprisoned Detroiters for jobs in culinary arts and heavy equipment operating before they re-enter society. At Randolph, “the building is dated, the equipment is old and they don’t even have the dollars they need for supplies,” said David Meador, vice chairman and chief administrative officer of DTE Energy Co., who has taken a keen interest in rescuing the school. “In the construction management class, they can’t get new wood, so they build things and they have to take them apart and straighten the nails out and do it again.” City officials and business leaders are trying to convert Randolph school into a dual training facility for Detroit high school students during the day and adults at night through federally funded job-training programs. The city’s labor statistics paint a sobering picture of the board’s complex challenge: Detroiters held just 26 percent of the city’s 258,807 jobs in 2014 — a figure that’s lopsided compared to most major American cities. Total employment among Detroit residents ages 16-64 was 49 percent, a share of the population that trails

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peer cities and lagged far behind the 67 percent of all Michigan workers in that age bracket who were employed in 2015, according to federal Bureau of Labor Statistics data. “This is a Detroit focus, and our sense is if we don’t intervene, we’ll have a generation of adults that never work ... (and) we’re not going to re-establish the middle class in Detroit,” said Meador, who co-chairs the mayor’s Workforce Development Board with Strategic Staffing Solutions Inc. CEO Cindy Pasky.

Another route In the case of Randolph, the business and city leaders are bypassing the normal political routes of turning around a public school that is seen as a critical training ground for skilled trades apprenticeship programs. Instead of beating the drum for a career technical education millage to pay for the improvements, the CEOs are passing the hat for the capital expenses and an on-going $100,000 annual operating subsidy. “$6 million isn’t a small number,” Pasky said. “But so much of it is a one-time expense to have the right equipment, the right teachers.” And rather than putting public pressure on Detroit’s school leaders to focus on reversing the school’s downward decline, the Workforce Development Board and the mayor’s staff are attempting to do it themselves. “We have the facilities that are giv-

PHOTOS BY LARRY A. PEPLIN FOR CRAIN’S

Damarcus Holton (left) marking railing piece, and carpentry teacher Tony McLean (third from left) works with students on railing installation. en to us, and we just have to put the right structure in place,” said Jeff Donofrio, executive director of workforce development for Duggan. The Workforce Development Board entered into a 10-year agreement with Detroit schools last year to make improvements to the school, make changes to the curriculum and promote its programs for juniors and seniors to underclassmen in high schools across the city. “There hasn’t been a strong message about the value of the school,” said Nicole Stallings, deputy director of workforce development for Duggan’s office. “We want to get to a place where we’re driving interest in the trades and how lucrative of a career that can be.” Detroit Employment Solutions Corp., the city’s workforce agency, is in the process of hiring a firm to run night classes for adults at the school to train them for a variety of industry certificates, Donofrio said. City officials also are coordinating improvements to the school facilities this summer, including interior painting and modernizing the building’s entrance. “It hadn’t fallen into disrepair, but there isn’t the feeling of a modern, clean construction site,” Stallings said during a recent tour of the building. The mayor’s 37-member Workforce Development Board includes six members from the leadership ranks of labor unions who also are involved in resuscitating Randolph. The International Brotherhood of Electrical Workers is working with workforce development officials to restart an electrical program that was axed a few years ago. “That one we weren’t able to keep because we just couldn’t find a teacher for the program,” said Brenda Belcher, a school district administrator who oversees 29 city schools, including Randolph. City officials are working with the

Bricks at Randolph Technical High School in Detroit. school district and teachers union on a plan to pay instructors at the school more than the district’s collective bargaining agreement requires in an effort to attract quality educators, Donofrio said.

Barebones budget As a career and technical education school, Randolph serves students from four traditional high schools in the city. The school is split in two: a 94-student traditional high school and 140 students in career and technical education, Belcher said. Randolph’s student population took a hit in 2013 after the Education Achievement Authority took over six DPS high schools in a school reform effort that has since fizzled out. The EAA would have lost state funding if its high school students had attended Randolph for half of the day. “When they split DPS up, (Randolph’s enrollment) declined, and the EAA wouldn’t send us any students,” said McLean, the school’s carpentry teacher. “That’s crazy.”

The EAA high schools are rejoining the Detroit school district in July and Randolph school's boosters are hoping to see an enrollment increase this fall. McLean said the school’s barebones budget has limited learning opportunities in his class. His students learn the basics of framing by building a house inside a classroom workshop — and then tear it apart. “We could take them to a different level, but they need to give us more resources,” McLean said. The juniors in McLean’s class ended this school year by building a tiny house in the front lawn of the school at West McNichols Road and Hubbell Avenue. “The girls are starting to excel beyond the boys,” McLean said of his 28 students this year. Jamea Delaine, 16, said she likes framing walls more than anything else she’s learned this year in McLean’s construction class. “That's more my territory,” Delaine said. “Don’t knock it until you try it.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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DMC FROM PAGE 3

Using DMC's electronic medical record system, ER staff have identified the patients who either have one of seven chronic conditions or are frequent flyers in the ER — five or more visits per year, White said. “Our multidisciplinary teams are providing expanded services with behavioral health, social work, pharmacy and dietary,” White said. When patients seek ER care for non-life threatening conditions, ER staff explains the Gateway program and recommends they enroll. DMC offers Gateway outpatient clinics adjacent to the hospital ERs with hours that range from 8 a.m. to 11 p.m. About 75 percent of enrolled patients schedule direct appointments with the Gateway clinic. “Patients who enroll are sticking with the program, which is what we hoped to see,” she said. “These are very high-cost patients. We assess their physical and mental health. Their own self-assessments shows they are lower than baseline for health.” White said ER visits, hospitalizations and readmissions have gone down significantly for the patients enrolled in the program. “We found up to 70 percent reductions (in ER visits) for the super utilizers” (more than five per year), she said.

Frequent ER users Several metro Detroit hospitals try to identify high ER users and expand primary care access for those patients when they can. Some hospitals like DMC and Henry Ford Hospital in Detroit have added same-day clinics for primary care services. They use social workers for patient education and work closely with mental health providers for outpatient care. Hospitals affiliated with Ann Arbor-based St. Joseph Mercy Health System use a program called Complex Care that helps identify high-risk users of hospital services, including emer-

FOXCONN FROM PAGE 3

“Michigan remains very much in the hunt for a large manufacturing facility that would create thousands of jobs,” Snyder strategy director John Walsh told Crain’s. “The company continues to expend time and resources evaluating locations in our state and remains actively engaged with the administration.” Wayne County’s economic development department declined to comment through a spokesman about Foxconn’s interest in Romulus, which would fall into the county’s “aerotropolis” district between the Detroit Metro and Willow Run airports that has struggled to take off. Michigan officials have been in hot pursuit of Foxconn since Snyder and Detroit Mayor Mike Duggan flew to Japan the weekend of June 2 to meet with representatives of the company after the Mackinac Policy Conference. Duggan confirmed for the first time Thursday that he tried to sell

“These are very high-cost patients. We assess their physical and mental health. Their own self-assessments shows they are lower than baseline for health.” made in the study years of 2013 and 2014. Some 77 percent of adults under age 65 said they used the ER because they believed their medical problem was serious. Another 12 percent of adults said they used the ER because their physician's office was closed when they needed treatment. Still, hospital ER officials say one solvable problem is to reduce the number of people who use the ER five to 10 to 20 or more times each year. These high ER users with multiple chronic conditions are what many experts are trying to address with programs like Gateway and the Community Resources for Emergency Department Overuse, or CREDO.

ers and administrators. “We create a CREDO brief, a synyopsis of their medical problems,” Stokes-Buzzelli said. “They are guidelines that summarize” the medical record of each patient. When a patient enrolled in CREDO presents in a Henry Ford ER, Stokes-Buzzelli said, he or she is evaluated and treated like any other patient for an emergency condition. But CREDO patients are flagged for extra attention. “An alert appears (on their electronic chart). If there is alignment with a previous complaint, we treat them, but maybe we don’t do another MRI” if they had one recently enough, Stokes-Buzzelli said. “Some patients require extra social services, a primary care visit or a meeting with a community mental health partner” such as Central City Integrated Health or New Center Community Services. The ultimate goal, said Stokes-Buzzelli, is to “channel them back to a primary care provider, avoid duplication of services because ER care is so fragmented.”

Henry Ford ER use

Results of Gateway

Over the past decade, Henry Ford Hospital has used the CREDO program to identify high users of emergency services and either offer them additional services or track their use to reduce misuse of tests or procedures. About 275 people are enrolled in Henry Ford’s CREDO program at any one time, said Stephanie Stokes-Buzzelli, Stephanie M.D., a Henry Stokes-Buzzelli: Goal to send back Ford emergency physician. Pato primary care tients are chosen provider. for CREDO by a multi-disciplinary committee of nurses, doctors, psychologists, social work-

Under Gateway, patients who don’t have primary care physicians and have multiple chronic conditions are identified and offered coordinated care services. The four participating DMC hospitals are DMC Harper University Hospital, DMC Detroit Receiving Hospital, DMC Sinai-Grace Hospital and DMC Children’s Hospital of Michigan. Patients have a variety of conditions, including diabetes, asthma, hypertension, heart failure, chronic lung disease, depression and HIV. About 51 percent have Medicaid coverage, 25 percent are uninsured, 14 percent have Medicare and 10 percent have commercial insurance, White said. Here is some preliminary data from the Gateway to Health program during January 2015 to May 2017: J 6,500 enrolled patients had 16,000 total outpatient visits. The visits in-

Michigan mentioned

ence at Foxconn’s shareholder meeting. Expansion into the United States would reduce Foxconn’s reliance on China, where it has the bulk of its operations and employs about 1 million people.

Suzanne White, M.D., DMC

gency departments. The goal is to minimize unnecessary use of services and improve patient safety. Others like St. John Hospital in Detroit and Providence Hospital in Southfield refer ER patients without primary care doctors to their physician referral lines. Most all try to sign up the uninsured to Medicaid or direct patients to free outpatient clinics or federally qualified health centers for followup care. But White said many of these programs that refer patients to outside providers don’t address the root cause of inappropriate ER use. “Historically that model (of referral) has not worked. If you have the patient in front of you, you have an opportunity for patients to have teachable moments in the ER,” White said. “When you refer them to a clinic a block away, typically that model fails with that patient because it requires a lot of navigation up front.” Data from a recent report of Michigan hospital ERs showed that 10 percent of the uninsured use the hospital emergency department for routine primary care, compared with 3 percent for those with insurance, said Ann Arbor-based Center for Healthcare Research and Transformation. Nationally, total ER visits have remained somewhat stable at about 410 per 1,000 people, or about 130 million per year, the past decade. Michigan annually has about 5 million hospital ER patient visits. While reducing unnecessary ER use was one of the goals of the Affordable Care Act, a 2016 report by the Centers for Disease Control and Prevention said little improvement was Foxconn officials on a site in Detroit, but said it wasn’t the underutilized Coleman A. Young International Airport that his administration is studying for uses Mike Duggan: other than genGoing to be more eral aviation. opportunities. “I didn’t fly to Asia because I didn’t have anything to offer,” Duggan told reporters after a midday news conference. “... We didn’t talk to Foxconn about City Airport. We had a much better site.” Duggan said Thursday he and Snyder “learned a lot in Asia and there are going to be a lot more opportunities” to attract manufacturing back to southeast Michigan as Mexico’s wage rates rise, closing the gap between U.S. and Mexican workers. “I don’t know what’s going to happen with Foxconn, but there are going to be a lot more opportunities, and we’re prepared for it,” Duggan said.

Foxconn chairman Terry Gou said Thursday the manufacturer of Apple’s iPhone and other electronic devices may spend up to $10 billion in the U.S. over five years and will announce the first three states for its investments by early August. That timeframe matches what state economic development officials have been told in discussions with the company, a state source said. At a Foxconn shareholders meeting Thursday in Taipei, Taiwan, Gou mentioned Michigan as one of six states under consideration for its expansion into manufacturing liquid crystal display screens in the U.S., according to the Associated Press. Gou said Foxconn plans to develop operations in the U.S. that combine hardware manufacturing and software development in technologies including artificial intelligence and automation. Details for each state were not settled, but overall, “we will provide at least tens of thousands of job opportunities,” said Gou at a news confer-

Setback for Snyder As Foxconn studies its options, the Snyder administration was dealt a setback this week in its pursuit of a new tax incentives program that would allow new companies that create more than 500 new jobs in Michigan to capture up to 50 percent of their employees’ state income taxes. House Speaker Tom Leonard, R-DeWitt, called off a vote on the legislation late Tuesday, publicly questioning whether Snyder cut a side deal with Democrats to get votes that would undermine Republican caucus priorities. Snyder has been in Europe this week on a trade mission and will meet with legislative leaders next week, spokesman Ari Adler said. “The governor is looking forward to meeting with legislative leaders to get

17 clude access to a multi-disciplinary primary care team. Patient satisfaction scores averaged 95 percent approval. J Of the 112 diabetic patients who came in for more than one visit, 78 experienced improved HbA1c (blood sugar levels), or 70 percent, compared with their initial visit. More than 285 total diabetic patient have been seen at least once. J Of 232 patients with high blood pressure who came in for multiple visits, 118 showed improved cholesterol levels, or 51 percent, compared with their initial visit. Some 771 total patients have been seen at least once for hypertension. J Data shows the number of multiple emergency department visits by Gateway enrolled patients decreased by about 70 percent. Some 2,075 patients showed a decrease in ER use after their first Gateway appointment. Another 1,153 patients have had zero ER visits since their initial visit. White said diabetes and hypertension were chosen for closer reviews because those patients visited hospital ERs more frequently. Federal funding for the Gateway grant was provided by various taxes collected under Obamacare and are part of the act’s quality-improvement and cost-reduction provisions. DMC’s grant is funded through Sept. 1, 2018. After federal funding ends, White said she hopes to work with federal and private payers to continue the program well into the future by developing payment codes for various primary care services rendered in the ER. “We are hoping to sustain the program by working with payers to develop reimbursement models,” White said. “This is an innovative model, the first step in the direction for direct access to primary care.” DMC covered about 85 percent of the costs of the program from the $10 million federal grant. Additional funding came from insurance coverage with the rest was funded by DMC, White said. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

everyone back on the same page and get this package done so we can bring thousands of new jobs to Michigan,” Adler said Thursday. Republican House members suspected the governor made promises to Democrats to curb legislation labor unions don’t want passed, said Rep. Jim Tedder, R-Clarkston. “We’re just waiting to get clarity. It’s rather difficult — the governor is doing his trade mission.” Tedder chairs the House Tax Policy Committee, which sent the full House the so-called “Good Jobs” bills on Tuesday — a sign that there were enough votes from Republicans and Democrats to pass the legislation. But Leonard abruptly adjourned the House until the representatives return to Lansing next month for a one-day session on July 12. “Until we get more clarity as to whether or not there were deals to undermine House Republican priorities, I would say my vote is on hold,” Tedder told Crain’s. “That sentiment is likely shared by others.” The Associated Press contributed to this report.

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PISTONS 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 Creative Director David Kordalski, (216) 771-5169 or dkordalski@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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FROM PAGE 3

come back (to Detroit),” Fink told the judge. “... This would kill the project. And not just this project — many others as well.” Representatives for the Pistons and Red Wings would not comment for this story, but Pistons CFO Greg Campbell, in an affidavit filed in the case and first reported by the Detroit Free Press, wrote that the public dollars are a condition of moving downtown. The implication is that the National Basketball Association’s other owners, who are scheduled to vote on the Pistons’ move on July 11, could balk at the relocation if the public money isn’t squarely in place. But why? Why do billionaire team owners need tax dollars at all? The question takes on additional importance if Gores and partner Dan Gilbert get the Major League Soccer expansion team they’re seeking. They’ve pitched a $1 billion mixed-use stadium development downtown and they’re expected to seek some type of tax subsidy or discount. Why team owners seek subsidies is easy Tom Gores: Is to answer: worth $3.3 billion, Elected officials according to are willing to Forbes. hand them over. In the case of the Little Caesars Arena project, it’s $324.1 million in public funding, or about 38 percent of the total current cost. Public backing for private sports venues is a trend that’s been under way now for decades across the country. Effective resistance is rare, even amid examples of gross failure of such subsidies to deliver the litany of promises about new jobs, spending and spinoff development. Certainly, today’s sports team

DISTRICT DETROIT

A conceptual image of the Little Caesars Arena retrofitted to accommodate the Detroit Pistons. owners can afford to build their own venues. Detroit native Steve Ballmer, the former Microsoft Inc. CEO, pledged this month to pay for a new arena for his L.A. Clippers to open in 2024. William Davidson spent $90 million to build the Palace in 1988. Tom Gores can afford to cover the Little Caesars retrofit. Forbes says Gores is worth $3.3 billion, and his Platinum Equity business is an enormous player in the private equity universe. In 2015, it ranked as the 22nd-largest private U.S. company by revenue at $12.5 billion. In March, it hailed its new $6.5 billion Platinum Equity Capital Partners IV global buyout fund, and last year it spent $4 billion to buy a division of St. Louis-based Emerson Electric Co. But as a businessman, sterile logic says the efficient play is to ask for free money to pay the costs, because it is usually available. Gores and the billionaire Ilitch family, who own the Red Wings and are financing much of the new arena development, both have easy access to low-interest loans and other

financial tools. Banks are happy to lend cheap cash to major league owners because their leagues rake in billions from enormous broadcast rights contracts. Hence, Comerica Bank and Merrill Lynch bought all the arena bonds. Leagues themselves often make credit available to teams, too. The NBA has a $1 billion-plus revolving credit facility that teams can cheaply tap for arena projects. Oh, and Gores and the Pistons are also getting a $20 million brownfield tax abatement as part of a stand-alone deal to build a privately financed team headquarters, training and rehab facility for $65 million. Cities and team owners argue that taxpayer-backed subsidies for stadiums fuel increased nearby spending and create new tax revenue for the municipalities — spurious logic with little evidence of support, many economists argue. A Brookings Institution report in September deconstructed the pro-stadium subsidy arguments and calculated the federal revenue lost via

tax-exempt bonds spent on stadiums and arenas. There’s even a bipartisan bill in Congress to halt the use of municipal bonds, which are exempt from federal taxes, for stadium construction. In the case of Little Caesars Arena, the pitch was an estimated $1.8 billion economic impact, creation of 8,300 construction and related jobs, and another 1,100 permanent jobs. City Council President Pro Tem George Cushingberry, Jr., who chairs the council’s budget and finance committee, said the Little Caesars Arena project is spurring development in Midtown and downtown, helping boost surrounding taxable property values and generating more city income taxes from new workers. “We have to continue to march for development in the city if we intend to be able to grow our way into success on our plans to exit state (oversight),” Cushingberry said. Mayor Mike Duggan downplayed the significance of the Davis lawsuit. He told Crain’s on Tuesday that city attorneys warned of the Pistons staying in Auburn Hills to make “an irreparable injury” legal argument to U.S. District Court Judge Mark Goldsmith. “That was a frivolous lawsuit that has played out more drama than it needed … the judge handled it appropriately,” Duggan said after speaking at a Downtown Detroit Partnership meeting. It’s too soon to really know if the Pistons coming downtown as the Red Wings’ new roommate will be a windfall for Detroit beyond civic pride. It certainly won’t help Auburn Hills, which is losing the basketball team and all the entertainment events at the Palace. Whatever the value the teams and arena may bring, it strains credulity to suggest that Gores and the Ilitches cannot afford to cover the $34.5 million. But no one is really suggesting that, are they? Crain’s senior reporter Chad Livengood contributed to this story.

EY names Michigan Entrepreneur of the Year honorees By Tyler Clifford tclifford@crain.com

More than a dozen Michigan entrepreneurs received EY Entrepreneur of the Year awards in 10 categories for the Michigan and northwest Ohio region. More than two dozen were selected as finalists in April. The award, in its 31st year, honors entrepreneurs who excel in innovation, financial performance and personal commitment to their businesses and communities, among others. Award categories include health, visionary, education and training and family business, among others: J Jan Akervall, president and founder, Saline-based Akervall Technologies Inc., Health J Sassa Akervall, CEO, Akervall Technologies Inc., Health J David Dauch, chairman and CEO, Detroit-based American Axle &

Manufacturing Holdings Inc., Visionary J Chris McCuiston, co-founder and CEO, Troy-based Goldfish Swim School Franchising LLC, Education & Training J Jenny McCuiston, co-founder, Goldfish Swim School Franchising LLC Education & Training J Lon Offenbacher, CEO and president, Troy-based Inteva Products LLC, Automotive & Technology Solutions J Brent Parent, founder and CEO, Ohio-based Material Handling Services LLC, Industrial Products & Services J Doug Armstrong, founder and CEO, Ann Arbor-based North Star Reach, Experiential Services J Charles Stocking, co-CEO, Ohiobased Principle Business Enterprises Inc., Family Business J Carol Stocking, co-CEO, Principle Business Enterprises Inc., Family

Business Chris Rizik, CEO, Ann Arbor-based Renaissance Venture Capital Fund, Financial Services J Barry Spilman, CEO and managing member, Royal Oak-based RPM Freight Systems, Emerging J Peter Osten, executive and managing member, RPM Freight Systems, Emerging J

J Carla Walker-Miller, president and CEO, Detroit-based Walker-Miller Energy Services LLC, Business and Consulting Services Next, the honorees will be considered for the Entrepreneur of the Year National competition, which will be announced at the national awards gala in Palm Springs, Calif., on Nov. 18.

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

Frida

AudioNet

Henry Ford Health System

1701 Bespoke

Lazlo

Dave’s Sweet Tooth

Nino Salvaggio International Marketplace 5

Detroit Denim

Peacock Room

Detroit Garment Group

Shinola

Detroit Medical Center

Simply Casual

Detroit Pistons

Thrift on the Ave

C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7

THE WEEK ON THE WEB

RUMBLINGS

JUNE 16 - 22 | For more, visit crainsdetroit.com

QLine free rides extended through Labor Day

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

ith funding from the Kresge Foundation, the QLine is again extending free rides, this time through the summer, as M-1 Rail and its service provider, Paris-based Transdev, work to improve waits and travel times. The Kresge-sponsored fare-free ride period will run July 1 through Labor Day. Rides were free the opening weekend, but that was almost immediately extended a week as demand exceeded expectations, resulting in long waits and some frustrated passengers. It was then extended through July 1. Kresge contributed $50 million to the $187 million it took to build the streetcar project, which opened to the public May 12. “The funding will be a grant and is open-ended, depending on ridership through Labor Day,” Jennifer Kulczycki, director of external affairs and communications for Kresge, told Crain's in an email. “Kresge offered the funding to maintain and grow ridership while the QLine ops team works out some operational kinks this summer.” The 6.6-mile QLine loop recorded more than 100,000 rides in its first month, according to the release. That works out to about 3,300 a day. The goal under the system’s financial model is 5,000-8,000 daily. That goal was not expected to be reached in its early stages, M-1 Rail spokesman Dan Lijana told Crain’s. In the last couple of weeks, the QLine has seen about 3,5004,000 riders per day and officials expect that number to remain stable or see a slight uptick, Lijana said.

BUSINESS NEWS The Siren Hotel in downtown Detroit’s historic Wurlitzer Building will be ready for guests in November, following a $22 million buildout of the 55,000-square-foot space at 1509 Broadway St. J Kensington Church, a nondenominational church based in Troy, planned to break ground last week on 33.1 acres in Clinton Township for about $14 million. J The Michigan Black Chamber of Commerce has acquired the National Business League Inc., founded in 1900 by Booker T. Washington. J Erin Vermeulen, who most recently served on the “Bill Handel Morning Show” team on KFI-AM 640 in Los Angeles, will join the 94.7 WCSX-FM morning team starting July 10. J Avalon International Breads plans to open a new cafe and biscuit bar in the New Center area, the breadmaker announced about two months after its downtown Detroit location opened. J

$300 million

The amount Williams International Co. LLC may invest in two sites in Oakland County, potentially bringing in around 900 jobs, according to the Associated Press.

600

The number of events the Downtown Detroit Partnership plans to host at DTE Energy Co.’s Beacon Park before the end of 2017.

Buildings owned by Olympia Development of Michigan that are slated to be demolished, despite pushback from conservationists.

The Detroit Red Wings announced they will open their first regular season at Little Caesars Arena on Oct. 5 with a match against the Minnesota Wild. J Meijer Inc. is expanding its appbased grocery delivery service through Shipt Inc. to more metro Detroit households, including in Ann Arbor, Allen Park and Belleville. J Urbanrest, a beer production facility and taproom, plans to open June 30 in Ferndale at 2615 Wolcott St. J Stryker Corp. has agreed to buy Canadian fluorescence imaging technology manufacturer Novadaq Technologies Inc. for $701 million. J Delta Air Lines Inc. will debut its new Airbus A350 this fall and Detroit Metropolitan Airport will host its first voyage. J

Tapas restaurant La Dulce closed its doors in Royal Oak on Monday after almost two years as it prepares to reopen in Detroit at 2 Washington Blvd. next month. J Detroit Lions Training Camp kicks off July 31, giving fans a free chance to interact with favorite players at the team's Allen Park headquarters. J A new 150,000-square-foot office building is coming to Grace Lake Corporate Center at One Village Center Drive in Van Buren Township. J

OTHER NEWS The city of Detroit is seeking designers to create a community park in the east side’s Morningside neighborhood using city funding and a grant received through the Knight Foundation’s Cities Challenge. J The Detroit City Council voted 7-2 in favor of $34.5 million in bonds to modify the new Little Caesars Arena to accommodate the Detroit Pistons’ move back downtown after a 40-year suburban hiatus. J The Detroit Home Mortgage program gained a $5 million investment from Comerica Bank to beef up its effort to address the city’s appraisal gap conundrum. J Gov. Rick Snyder, along with a delegation of Michigan executives and aerospace business leaders, had their first meetings in Paris, kicking off last week’s economic development mission in Europe. J A Michigan State University alumnus is gifting the school $3 million to create the Gaynor Entrepreneurship Lab in the school’s Broad College of Business. The gift is from from Larry Gaynor, president and CEO of Farmington Hills-based TNG Worldwide Inc., and his wife and company vice president Teresa. J Despite earlier budget concerns, the annual Accelerate Michigan Innovation Competition will return for an eighth round this year on Nov. 16 at the Masonic Temple. J

COURTESY ALIBABA HOLDINGS

Veteran attorney Bruce Thelen was able to meet up with Alibaba founder Jack Ma, his one-time tour guide, at last week’s Gateway ‘17 event.

A chance encounter with Jack Ma — and a reunion

illionaire Jack Ma and his Alibaba Group Holdings Ltd. were in Detroit for the first time last week, and made something of an impression. But Ma also left an impression on veteran attorney Bruce Thelen nearly four decades ago — when Ma was only a teenager, long before he founded Alibaba. In 1980, Thelen left his post as a Wall Street attorney for a trip around the world — with plans to return to his native Michigan and practice law by the end. Part of it was a rare trip for a Westerner to China’s mainland. Thelen says it was there, out front of the only hotel opened to westerners in Hangzhou, known then as Hangchow, that he was greeted by a young Jack Ma. “He told me his name ... and asked me if he could give me a tour of his city,” said Thelen, now a partner at Dickinson Wright PLLC and appointee to the U.S. Department of Commerce’s East Michigan District Export Council. “He said he wanted to practice his English.” Ma escorted Thelen through

Emagine looks at sites in Detroit for megaplex E

KURT NAGL/CRAIN’S DETROIT BUSINESS

Bedrock Detroit is settling into its new downtown Detroit digs at 630 Woodward, a historic four-floor building once home to retailer Christopher Mabley. At four stories and 39,000 square feet, it is attached to the First National Building. Nearly 180 employees are stationed at the 39,000-square-foot headquarters, including its executives. The real estate development firm, part of the Detroit-based Quicken Loans Inc. family of companies, moved from One Campus Martius to its new headquarters in February to consolidate operations.

the city, highlighting landmarks and introducing him to his father. “He didn’t ask for money. ... He seemed quite intent and focused on wanting to take any opportunity to meet people outside of China and find out what was really going on in the world,” Thelen said. “I remember being so impressed with his ambition and drive.” In a 2008 profile in Inc. magazine, Ma said he spent eight years offering tours to foreign tourists. Thelen spent half the day with Ma, enjoying the boy’s rap on his hometown in a changing Communist China — one that Ma, now worth more than $30 billion, would play a major role in reshaping. “I must have told the story about this young man at least a hundred times after I returned to the U.S.,” Thelen said. “I told everyone that if there were more young people like this very impressive young guy in China, the country’s economy was really going to take off.” (Postscript: Thelen was able during last week’s Gateway ’17 event to meet up with Ma.)

magine Entertainment Inc. is looking to bring a megaplex theater to downtown Detroit. Co-founder and Chairman Paul Glantz said the company is evaluating two undisclosed sites, one that would be new construction and one that would entail renovating an existing building. He estimates the investment will be around $15 million and said he’s inclined to locate the new theater near residential development as opposed to commercial development. “If you look at all the housing units that are being developed downtown and in Midtown, I think you’re going to see an enormous amount of housing come online in next couple years,” Glantz said.

The population base is a little light right now, but Glantz said Emagine believes it will be there in the nottoo-distant future. A new theater would be the first megaplex downtown but second in the city, joining the Bel Air Luxury Cinema on Eight Mile between Van Dyke and Hoover Road. Emagine is working on two other new theaters locally. The Livingston County Board of Commissioners last week turned down Emagine’s request for incentives for a new theater in Hartland Township near U.S. 23 and M-59, Glantz said, noting he’s still pursuing that location. Emagine is also looking to put another location in Oakland County in an undisclosed area, he said.

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