Crain's Detroit Business, July 24, 2017 issue by Crain's Detroit Business

JULY 24 - 30, 2017

Pontiac misses out on game changer.

Golf course bet pays off

Page 3

Meadowbrook Country Club membership surges.

Health Care

Opioids in the workplace: A bitter pill for business The effect of opioids on the workforce In the nation

National abuse rate by income: >$84K

12.8% $60K-$84K

14.8%

In Michigan

By Dustin Walsh

In 2016, over 11 million opioid prescriptions were dispensed in Michigan, a state with a population of 9.9 million. That’s more than 1.1 prescriptions for every man, woman and child in the state. Put another way, that’s roughly 68 opioid pills per person:

dwalsh@crain.com

Hussein Nasser spent hours every day working on his knees. The Dearborn native and carpet installer for Belleville-based Empire Flooring went home every day in pain. His knees ached, but the paycheck was worth the discomfort. Until over-the-counter remedies no longer worked. For relief, Nasser, 28, turned to prescription opioids — first Percocet, then OxyContin — that he bought from street-level dealers. Addiction took hold. Nasser’s habit peaked to 300 milligrams of OxyContin per day, far higher than the average prescription of 20 mg a day. As you might expect, Nasser lost his job and Empire lost customers. The use and misuse of opioid prescriptions and street-level heroin is rising throughout the U.S. While the figures remain low enough to barely impact the overall national labor force picture, overdose deaths and dependency linked to opioids is toxic and spreading among the ranks of labor at a rate that should alarm the health care industry and employers as a whole.

<$60K annually

72.4% Nearly 1 out of 3

Number of opioid prescriptions abused

4 times more likely

Ratio that baby boomers (50-65+) are more likely to abuse opioids compared to millennials (20-34) Most common ailments where opioids are abused (in order): Joint, neck, abdominal and back pain Cost to employers:

Prescriptions per person (2015):

$10 billion

Wayne County (except Detroit): 1.3

Absenteeism and productivity loss linked to opioid abuse

Macomb County:

1.2

Oakland County:

0.9

Health care costs: Opioid abusers cost nearly twice as much ($19,450) in health care expenses annually than other employees ($10,853).

Livingston County:

Washtenaw County:

0.7

Bay County (worst in state):

1.9

SOURCES: Castlight Health study “The opioid crisis in America’s workforce,” U.S. Centers for Disease Control and Prevention, American Society of Addiction Medicine, Pharmacy Quality Alliance, Michigan Dept. of Health and Human Services Crain’s graphic by David Kordalski; research by Dustin Walsh; photo illustration by David Kordalski using iStock images

Inside

SEE OPIOIDS, PAGE 18

Energy

Renewable energy contract case in Michigan could set precedent

Future shock? Automakers need to be ready when licensors come knocking.

Michigan Public Service Commission expected to rule on July 31 By Jay Greene jgreene@crain.com

crainsdetroit.com Vol. 33 No 30

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Vic Leabu, owner of White’s Bridge Hydro Co. in Lowell, only wants a fair contract from Consumers Energy Corp. Leabu produces about 750 kilowatts of clean, renewable energy for 400 of his home and business owner customers in Ionia County, just east of Grand Rapids. For the past 32 years, Consumers has been paying him a variable rate of 6.8 cents to 7.6 cents per kilowatt hour. Last year,

Consumers offered him a five-year contract at 4.5 cents per kilowatt hour, which Leabu described as financially unsustainable. Leabu’s contract expired in December 2015. He’s operated under a contract extension with Consumers since then. But because of the low rate Consumers wanted to pay, Leabu and several other mostly small renewable energy producers — under the newly formed Independent Power Producers Coalition of Michigan —

filed a complaint last year against Jackson-based Consumers with the Michigan Public Service Commission. They want the commission to require the utility to pay them fair rates under long-term contracts that will keep them in business. On July 31, the Michigan Public Service Commission is expected to rule on the contested case IPPC filed against Consumers that would set long-term contract prices for 20 years. SEE ENERGY, PAGE 16

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MICHIGAN BRIEFS

INSIDE

Michigan health plan profits drop Michigan’s 17 health plans in 2016 posted 8 percent lower overall net income of $304.3 million for a 1.7 percent total margin, down from $330.7 million and a 2 percent average margin, according to the 2017 Michigan Health Market Review. But total enrollment for the health plans increased 5 percent to 3.4 million. HMO enrollment has grown 31 percent since 2009, reflecting an acceptance by the public of more tightly controlled managed care and lower relative premiums. Underwriting revenue increased 7 percent to $17.6 billion in 2016 from $16.4 billion in 2015. “The broad picture is that it was a good year, not as good as the previous year, but (health plans) were above $300 million” in net income, said Allan Baumgarten, the Minneapolis-based consultant who publishes the annual report. “It depended on the line of business. Commercial is challenging for some, Medicaid continues to be very profitable and there were good results with Medicare, a growing line of business for them.” Despite an 8 percent increase in individual health insurance market business to 425,000 in HMOs and

The number of unemployed workers fell by 20,000 and total employment declined by 9,000. The June decline in the unemployment rate reflected a second consecutive month of a reduced labor force after several months of steady workforce growth in 2016 and early 2017, said Jason Palmer, director of the Bureau of Labor Market Information and Strategic Initiatives.

ISTOCK

PPOs, health insurers posted $111 million losses in the individual market in 2016, reflecting higher utilization and drug costs, Baumgarten said. “Medical expenses grew faster than premium increases,” Baumgarten said in an interview with Crain’s. Insurers “expected utilization increases in the early years, part of pent up demand. It didn’t happen and (in 2014) premium increases were close to what they should be.” Because of the losses and uncertainty at the federal level related to the Affordable Care Act, Baumgarten said 2018 proposed premium increases for the individual market in Michigan are expected to be the highest in years.

Unemployment rate drops to 3.8 percent Michigan’s unemployment rate fell to 3.8 percent during June while the number of people in the workforce continued to decline, The Associated Press reported. It was the lowest rate recorded since August 2000, the state said. The June rate compared to a rate of 4.2 percent during May and was a full percentage point lower than the June 2016 rate of 4.8 percent, the Michigan Department of Technology, Management & Budget announced last week. The national rate in June was 4.4 percent. Michigan’s workforce shrunk by 29,000 during June, the agency said.

Task force: Prefund retiree care costs A task force created by Gov. Rick Snyder said municipalities should prefund the cost to provide health insurance to newly hired employees in retirement, The Associated Press reported. It’s one of four recommendations issued last week by the Responsible Retirement Reform for Local Government Task Force, which studied $17 billion in unfunded health care and pension liabilities. The proposals address the state’s mounting local pension and health care costs, ensuring retiree support and providing more financial stability and effective delivery of local government services, a news release said. The task force’s 20 voting members and four ex-of-

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RUMBLINGS

WEEK ON THE WEB

COMPANY INDEX: SEE PAGE 18 ficio members failed to find consensus on benefit changes such as capping employers’ health costs and moving new hires into 401(k)-only plans. “Municipalities across Michigan and the nation are facing growing, unfunded long-term liabilities that jeopardize the quality of life in our communities, along with the retirees and employees who depend on these benefits,” Snyder said in a statement. “This is why I asked legislators, state and local government officials, employee representatives, and pension managers and insurance professionals to work together to determine how we can best reform local government pension and health care in Michigan.”

Crain’s signature healthfocused event continues to serve as catalyst for networking among industry professionals and a means to discover ways to manage healthcare in a time of continued uncertainty. This year’s event includes a keynote address from Rep. Joe Kennedy III.

COMING FALL 2017

Stay tuned at crainsdetroit.com/events to learn more about combined ticket pricing and event features. Registration opens soon!

After a hiatus of nearly a decade, Crain’s Health Care Heroes returns as its own event! This celebratory breakfast will recognize honorees of the Crain’s Health Care Heroes nomination program. Attendees will also hear from individuals that have received or provided life-changing care.

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Sports Business

Meadowbrook Country Club golf risk pays off with membership surge By Bill Shea bshea@crain.com

When Meadowbrook Country Club opted to close its golf course for an 18-month reconstruction, it took a significant financial risk. When the historic golf course celebrated its centennial last year, it was unavailable to its members who paid tens of thousands of dollars to join. When the $5.2 million project

began, the club had 86 of 325 members on a waiting list to cash out their equity and exit, said Meadowbrook General Manager Joe Marini. But the risk paid off for the Northville Township club. Since the golf course re-opened on May 19, those who wanted to leave have gone, opted to stay, or been replaced, and there’s a waiting list of nearly a dozen people who want to join, Marini said. Golfers are

eager to play the new course, with its improved environmental sustainability and playability. “There’s a case to be made that what we did really built our brand,” said Marini, 51, who’s worked at the country club for 20 years. “It was excellent to see the growth with just the promise of something.” Whether Meadowbrook’s success fuels a wave of similar

projects across Michigan, such as the stalled renovation project proposed at Oakland Hills, remains to be seen. But in a time of downturn for golf, other clubs have asked what Meadowbrook did, and how it pulled it off, Marini said. SEE GOLF, PAGE 17

A view of the renovated Meadowbrook Country Club ninth hole looking from the eighth hole green.

MUST READS OF THE WEEK

Ron Fournier What keeps Life Remodeled CEO Chris Lambert up at night? A sense of something missing. Page 6

Amazon again Online retailer eyes the site of a former Visteon Corp. auto parts plant in Shelby Township for a third regional distribution center in metro Detroit. Page 5

PHOTO BY BRIAN WALTERS

Development

Missed opportunity for downtown Pontiac By Kirk Pinho kpinho@crain.com

United Shore Financial Services LLC’s pending relocation from Troy could have ended up much differently had a deal to move the company to downtown Pontiac, rather than the outskirts of the city, not collapsed. At one point last year, the Troybased wholesale mortgage lender was “very close” to buying a two-building, 425,000-square-foot former General Motors Co. office complex downtown, plus the cityowned Phoenix Center parking deck, said Mat Ishbia, the company’s CEO. Had the deal happened, United Shore and its 2,000-plus office workers would have had a catalytic effect on still-struggling downtown Pontiac, which is rife with office and retail vacancy. Case in point: Dan Gilbert’s relocation of thousands of his Quicken Loans Inc. employees to downtown Detroit was one of the key tipping points for much of the positive momentum seen today in the central business district. Today, there are 17,000 Quicken, Rock Ventures LLC, JACK Entertainment and other Gilbert employees in the downtown core, said Whitney Eichinger, vice president of communications for Gilbert’s Bedrock LLC real estate development, ownership and management company. And Gilbert has invested more than $2

COURTESY INTEGRATED DESIGN SOLUTIONS

A rendering of the planned United Shore Financial Services LLC headquarters on South Boulevard in Pontiac. billion in and around the downtown, fueled in part by need for space for his thousands of workers. Yet ultimately United Shore’s deal for the Ottawa Towers and the deck fell through, and the company is now headed to South Boulevard less than a mile from Auburn Hills. It was not a matter of money, Ishbia said. Instead, the deal collapsed when it became obvious that the property was not laid out in a way

that suited his company’s culture, and that the parking deck capacity would have been a constraint on future growth. “It was a much less expensive project, not even in the same world,” Ishbia said. “The floorplates at our buildings are three floors. At Ottawa Towers, one had eight floors, one had nine floors. It would make the company much more fragmented. We wanted

a very open and collaborative environment, and they (the towers) weren’t really a cultural fit for our company.” “These types of things are incredibly complex,” said Michael Stephens, part of the Ottawa Towers ownership group. “It just didn’t work out. We wish them all the best with their new location, and it’s all good news for Pontiac.” SEE PONTIAC, PAGE 15

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Detroit, Southwest Solutions team up on affordable housing By Sherri Welch swelch@crain.com

The city of Detroit has tapped Southwest Solutions to help develop a plan for people illegally living in tax-foreclosed properties in the Fitzgerald neighborhood. It’s also asked Southwest to assist with a plan for residents of 110 affordable rental houses built around 2001 in the Brightmoor and Chadsey-Condon neighborhoods, and the units themselves, following the expiration of tax credits on the houses which came with the requirement that they be affordable. The pilots are expected to serve as a guide for city-led revitalization in other neighborhoods. To handle both projects, Southwest will provide an array of services, including rapid rehousing services, financial and home buyer counselors and mortgage lending services. Through its housing subsidiary, it will also offer rehabilitation specialists to renovate housing to get it ready to go back on the market. As the city evaluated the revitalization work planned, “it really became clear that in order to engage the whole neighborhood ... we needed to try this particular service-enriched approach that Southwest has more experience doing than just about anybody else in the area,” said Arthur Jemison, director of housing and revitalization for the city of Detroit. The goal is to keep people in the houses they’ve been living in, and in the case of the foreclosed homes, get them to good standing, Jemison said. Whether the residents of the houses in both pilot projects will be renters or homeowners going forward remains to be seen. “With interest rates as low as they are, a mortgage is cheaper than rent,” said Timothy Thorland, executive director of Southwest Housing Solutions. But when you look at the total cost of ownership versus the total cost of rental, he said, that’s not always the case. Things like property taxes, insurance and maintenance costs may make the American dream of home ownership unrealistic for homeowners in blighted Detroit neighborhoods.

Addressing deeper issues The Fitzgerald pilot dealing with illegally occupied homes is part of the city’s larger push to revitalize the quarter-square-mile neighborhood in northwest Detroit. Through Fitz Forward LLC, The Platform LLC and Century Partners are rehabilitating 115 vacant homes into affordable and market-rate housing for sale and rent and landscaping 192 vacant lots. Southwest Housing, Develop Detroit and a few others lost their joint bid on that project. But the city asked Southwest to provide

Neighborhood pilot projects The city of Detroit is partnering with Southwest Solutions on pilot projects for affordable housing and keeping tenants in their homes in three neighborhoods: Fitzgerald, Brightmoor and Chadsey-Condon.

A D Lake St. Clair

Detroit C

A: Fitzgerald B: Condon C: Chadsey D: Brightmoor

multi-layered services to the people living in the homes in Fitzgerald, as well as Brightmoor and Chadsey-Condon, given its experience in rapidly rehousing homeless populations in the city, Jemison said. The Southwest-led work in Fitzgerald will go beyond giving people living in the homes legal occupancy. It will also help them to resolve deeper issues through customized interventions, while ensuring the integrity of the house and major installations such as the furnace, Thorland said. “If we don’t go in there and actually analyze what the financial capacity of the household is and the quality of the physical structure, they’re likely to end up back in the same place they were,” he said. “Each one of those situations is potentially unique, and we want to ... make sure the occupants, the household get a housing solution that is ... best for them, whether it’s in or out of that (house),” Thorland said. The people living in the foreclosed homes will be encouraged to buy back the houses they are living in from the Detroit Land Bank Authority, Jemison said. If that isn’t appropriate, options could include renting from Southwest, Jemison said, after the houses have been moderately rehabilitated. Or rental assistance could be provided to elderly residents and others in need of supportive housing.

Preserving affordable housing Southwest is bringing the same services to bear to determine a plan for 50 affordable houses in the city’s Brightmoor neighborhood developed 16 years ago by Northwest Detroit Neighborhood Development, plus another 60 houses in the Chadsey-Condon

“It really became clear that in order to engage the whole neighborhood ... we needed to try this particular serviceenriched approach that Southwest has more experience doing than just about anybody else in the area.” Arthur Jemison, director of housing and revitalization for the city of Detroit

area. Southwest Housing has acquired all but 1 percent of the 60 affected homes in the Chadsey-Condon area from equity provider Cinnaire. Over the last month, Southwest has started to assess the occupants’ financial condition and

their interest in buying the houses they’ve been living in. It’s also working to develop a formula for establishing a sales price for the homes, the ability of the occupants to secure a mortgage and options for those who can’t, and assessing the current condition of the home to ensure any major re-

“If we don’t go in there and actually analyze what the financial capacity of the household is and the quality of the physical structure, they’re likely to end up back in the same place they were. Each one of those situations is potentially unique, and we want to ... make sure the occupants, the household get a housing solution that is ... best for them, whether it’s in or out of that (house).” Timothy Thorland, executive director of Southwest Housing Solutions

pairs are completed up front. Those costs would be rolled into the costs of the homes, whether they are sold as rental units or individually to residents. Some residents of the Brightmoor homes had heard over the years that they might be given the option to buy the homes after 15 years and have been asking about it, Thorland said. But others in Chadsey-Condon have been caught off guard by the impending change. “There’s a lot of tension,” Jemison said. “Someone wants to buy, they get a chance to, but they don’t want to pay what’s needed to satisfy regulatory layers of funding and oversight. “It’s an important piece of work Southwest is doing because this is a knotty issue ... with a lot of different stakeholders who all need to have their position appreciated,” he said. The Southwest-led pilots in Brightmoor and Chadsey-Condon are expected to set the tone for dealing with the remainder of roughly 1,300 single-family affordable homes built in a scattered-site approach in different neighborhoods in the late 1990s and early 2000s to spur development in areas that were struggling to come back, Jemison said. The projects have complex, multi-layered financing, including the tax credits and federal HOME funds. “It was a strategy of a different time,” Jemison said. “This is definitely a unique issue for Midwestern cities because this was a way to get money into neighborhoods a long time ago.” If the property stops being affordable and the transition to other types of housing isn’t handled properly, the city would have to repay money to the U.S. Department of Housing and Urban Development, Jemison said. Now that the tax credit requirements to operate those houses as affordable housing have expired, Southwest is helping identify ways to preserve that affordable housing, he said. That could mean it continues as a rental property or that occupants who are interested and capable of purchasing the properties buy them, Jemison said. Working directly with residents to ensure they are in a stable living situation, while also coming up with a plan for the property, is a new specialty for Southwest and an extension of its programs serving the homeless and people with disabilities, Thorland said. “The nuance for us in this program is making sure if there’s an ongoing relationship between the (residents) and structure they are in right now ... either as a renter or an owner, we need to leave them in a situation that the house … is stable.” Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

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Amazon.com is eyeing the site of a former Visteon Corp. auto parts plant in Shelby Township for a third large-scale regional distribution center in metro Detroit.

BLOOMBERG

Amazon plans distribution center in Shelby Township By Chad Livengood clivengood@crain.com

and Kirk Pinho kpinho@crain.com

Amazon.com is eyeing the site of a former Visteon Corp. auto parts plant in Shelby Township for a third large-scale regional distribution center in metro Detroit, Crain's has learned. A government source with direct knowledge of Amazon’s plans says the online retail giant intends to create 1,000 jobs at a distribution warehouse at 23 Mile and Mound roads, the site of a polluted former Visteon plant that closed in 2009 and has since been demolished. The Macomb County Brownfield Redevelopment Authority board on Tuesday approved a redevelopment plan for the former Visteon site for construction of a 1 million-squarefoot “logistics optimization center that will create up to 1,000 jobs,” according to the plan. The county’s brownfield plan does not name the company that will occupy the facility. John Paul Rea, director of economic development for Macomb County, said he could not identify the company because of a nondisclosure agreement.

“I cannot speak to the client on this project,” Rea said Tuesday. But the government source, speaking on condition of anonymity, told Crain’s that the Visteon site is being redeveloped for Amazon as the retailer builds similar-size regional fulfillment centers in Livonia and Romulus. A separate government source told Crain’s that the Michigan Economic Development Corp. is working with Amazon on development of a third fulfillment center project following state financial support of the two fulfillment centers in Wayne County. Macomb County records list Rosemont, Ill.-based Hillwood Enterprises LP as the developer of the $90 million project, which is dubbed “Project Millennium.” Gregory Scovitch, vice president of development for Texas-based Hillwood Enterprises, said the new building is expected to be about 1 million square feet, sitting on about 80 acres of the 207-acre plant site. Scovitch declined to say which company would occupy the building, but did say last week that a lease deal had not been finalized. The development is being done in

a joint venture between Hillwood and Detroit-based Sterling Group, Scovitch said. Scovitch declined to reveal details of the joint venture. Sterling Group is run by real estate developer Gary Torgow. A spokeswoman for Amazon declined comment Tuesday on the retailer’s future expansion plans in Michigan. “Amazon is not yet commenting on any specific plans in Michigan,” Amazon spokeswoman Shevaun Brown said in an email to Crain’s. Hillwood Enterprises is seeking $9.1 million in incentives from the county to redevelop the polluted site where Visteon and Ford had an auto parts plant operating from 1951 to 2009, according to the county document. “In order for the development to occur, Hillwood Enterprises will incur the cost to demolish existing structures at grade, clean up contaminated soils, manage and prevent further exacerbation of contaminated soils, and ultimately return a highly unproductive property back to community as an economic and environmental asset,” the document says. The former Visteon plant was also

previously known as Ford Utica Trim. Scovitch said construction on the building is expected to commence later this summer and be complete by September 2018. The county redevelopment plan says construction could begin as soon as next month. The Shelby Township Board of Trustees voted 7-0 to approve the brownfield redevelopment plan at a meeting Tuesday night. The township planning commission approved the plan last week, Rea said. Shelby Township Supervisor Rick Stathakis said Tuesday that he wasn’t at liberty to comment on the company that would occupy the building Hillwood Enterprises and the Sterling Group plan to build. “We can’t say with absolute certainty who the tenant is,” he said. The Macomb County Board of Commissioners is scheduled to consider the plan at its Aug. 17 meeting, Rea said. Scovitch said Hillwood has been looking at real estate development opportunities in the Macomb County market in recent years, including Shelby Township and Sterling Heights. Hillwood Enterprises is Ross Perot Jr.’s real estate company. His fa-

ther, H. Ross Perot Sr., is a billionaire worth $3.9 billion, according to Forbes, who unsuccessfully ran for president in 1992 and 1996. Amazon announced plans last month to build a 850,000-squarefoot regional customer fulfillment center that will employ 1,600 people. The Michigan Strategic Fund board approved a $5 million state grant for the $140 million Romulus distribution center planned for 84 acres of undeveloped land north of Detroit Metropolitan Airport. In December, the state economic development board approved a separate $7.5 million performance-based grant for Amazon to construct a warehouse at 13000 Eckles Road, between Plymouth and Schoolcraft roads, on the site of a former General Motors Delco Chassis plant. Wayne County Executive Warren Evans has previously said the Livonia distribution center would total nearly 1 million square feet in space. Earlier this month, the city of Troy issued a building permit to Amazon to convert a 26,000-squarefoot building at 999 Chicago Road into a smaller warehouse for the storage of about 20,000 items.

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OPINION

Where Life Remodeled started

ext week, Chris Lambert and his Life Remodeled team of 12,000 volunteers will flood a community ravaged by riots 50 years ago to remove blight, board up vacant homes and perform critical home repairs. In the next two years, in the same Central High School neighborhood, Lambert and his corporate partners will transform an abandoned school building into a community center. You’ll hear a lot about Life Remodeled, rightly so. But you might not hear how it started. Or where it started — in Milford, Indiana, Lambert’s small hometown. “When I say small, we didn’t have a stoplight until I was in middle school,” Lambert told me. “And it was a blinking-red light.” I had invited Lambert to lunch at Central Kitchen in downtown Detroit to learn about his nonprofit work that has brought new money and sweat equity to Cody High School (2014), Osborn High School (2015), and Denby High School (2016) — and to each of the surrounding neighborhoods. I found myself drawn to questions about Lambert himself, and how his life’s story informs his life’s work. “For me, as far back as I can remember, I was really, really spiritual,” he said. “I was always in love with God, always in love with Jesus Christ.” In middle school, Lambert was called a Jesus freak. “I wore it on my sleeve,” he chuckled, “proudly.” With a tailored jacket and a dyetipped spiked haircut, the man sitting across from me looked young and cocky, more like a venture capitalist than community activist. My first impression of Lambert, 37, was not a positive one: This guy’s slick. Then he started sharing his story: This guy’s serious. “When I turned 16, I grew an inch” and started to excel at sports, Lambert said. His new friends were athletes, and they were the center of attention. “Being a big fish in a small town can be a lot of fun, or at least that’s what I noticed by watching my

RON FOURNIER Publisher and Editor

Ron Fournier is publisher and editor of Crain’s Detroit Business. Catch his take on business news at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760.

friends,” he said. “They were having more fun than me.” Jocks or Jesus? Lambert decided to play down his faith and reinvent his public self. One day, while driving his Jeep Wagoner on a country road, Lambert tilted down the rearview mirror so he could watch his own face. “Shit,” he said out loud. Then he said it again. He’d never sworn before, and he wanted to see how it looked. It looked cool. “I’m an all-or-nothing guy. The next day in school, I’m dropping the F-bomb in every sentence,” Lambert told me. From there, it was a slippery slope to sex, alcohol and drugs — all habits he carried with him to Indiana University’s business school, where he started wondering about the abrupt turn he’d taken in high school. One night, he kept himself awake with this thought: “I must be missing something. I don’t think I’m getting out of life everything life has to offer. I’m missing something.” The epiphany came while studying in Australia, where two pals dragged him to a church with a visiting pastor. The pastor’s sermon spoke of a young man who had turned away from God to pursue pleasure. “That’s when I began to see that between ages 16 and 22, God was letting me do everything I wanted to do and I pretty much got everything I wanted,” Lambert said. “I was never as happy during my six

JACOB LEWKOW

Chris Lambert, CEO of Life Remodeled, greets a volunteer at the former Durfee Elementary-Middle School building where a new innovation center will be located, converting the expansive school into a community hub.

“I regularly wrestle with the question of ‘what am I missing’ as it relates to community development, because the work is very, very tricky.” Chris Lambert

years of messing around as I was as a Jesus freak.” He stopped chasing women, using drugs and abusing alcohol “and started caring about other people.” He got married to a woman from Michigan, became a pastor, and

moved to Westland, where he started a church. In 2011, the church rallied 500 volunteers and built a home for a single mother. Lambert got the idea from watching ABC’s “Extreme Makeover: Home Edition.” In 2012, Lambert and his team built four new homes in four metro Detroit neighborhoods. In 2013, Lambert launched his first large-scale neighborhood project with one new home and garage constructed, 36 homes remodeled, 253 homes boarded up, and beautification of 65 blocks on Detroit’s North End. Then he decided to focus on schools and their surrounding neighborhoods: Cody, then Osborn, then Denby and now Central. Remarkably, he fought a debilitating case of anxiety throughout the program’s growth, a battle won only

after he was diagnosed and properly prescribed. And yet, something is still missing. After our lunch, via email, I asked him about it. “I wrestled with the ‘what else am I missing’ question on a deep level multiple times during those six years of intense battle with anxiety,” Lambert said. Now that he’s healthy, Lambert no longer associates that question with how he’s doing or who he needs to become. Personally, he’s missing nothing. “However, I regularly wrestle with the question of ‘what am I missing’ as it relates to community development, because the work is very, very tricky,” Lambert said. “I'm constantly trying to figure out how to crack the code.” If you want to help him, sign up here: liferemodeled.com/2017-project

There are other issues that matter. It seems the politicians in D.C. are focused on raising money for re-election rather than working in the interests of the people who elected them. I can’t help but look at the local mayoral election in Detroit. It’s a nonpartisan race; the primary is Aug. 8. My guess is we’ll hear more about how to fix Detroit and issues that matter to Detroit residents and to business operating in the city than we will about side issues. Now I may be wrong. But it seems people I talk to care more about

business and the economy than the latest obsession in Washington. But we do have folks on the extremes on both sides, left and right, who are so intense about Washington issues that they are disrespectful of those they oppose. Some politicians don’t even listen these days. Somehow, we have to get back to the middle. Otherwise we will end up with another civil war — at least a war of words — and we won’t have a good reason for it. We used to practice something called civility. I am afraid it has disappeared.

The daily paper got it right Last week, I was surprised to see a headline on the front page of one of Detroit’s daily newspapers that said Democrats are fed up with their elected officials. I have the distinct feeling that just about everybody is fed up with our elected officials, regardless of their party. It does not matter who you voted for, unless you are a die-hard follower of your candidate. We’re all pretty unhappy with what’s going on in Washington. For some reason our president and vice president seem to be immune from all this unhappiness. I

KEITH CRAIN Editor-in-chief

think that there is probably a big shift between the East and West Coast and the rest of the nation. In our Midwest, folks seem more interested in the economy and get-

ting a new health care system in place than who talked to the Russians yesterday. Yet the last time I looked, maybe six or seven congressional committees were investigating who and why specific people were talking to Russians. Too many people chasing the same subject. Let the special prosecutor do his job and, if warranted, hearings can follow his report. Maybe people in San Francisco or New York are obsessed with the Russian story line. But somehow, we need to get everyone on the same page and get rid of this obsession.

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In ’67, I was just trying to get to work at the post office The summer of 1967, I was a 19-year-old co-ed at Highland Park Community College. I worked at the United States Post Office on Fort Street. That’s the main post office. There used to be a saying: there’s always work at the post office. There was for me in July 1967. My job was to unload mail from trains and trucks. Most people think about working at the post office for extra money at Christmas. It was also an excellent place to earn money for college. I took the bus to work. It meant I left the house at 6 a.m. That early in the morning, I could tell what the day was going to be like. Most days, the morning was fresh, still dewy and clean because the sun had not yet been up two hours. The week of the riot, it was humid, like Miami. Temperatures in the high 80s, but with no breeze the air felt like a hot wet blanket. It felt that way in the morning as well. We weren’t getting much of a break overnight. Still, I was glad to be out early in the morning. I didn’t have a car yet. Of course, the bus system was reliable then. There were a lot of things wrong with the city 50 years ago. OK, I get that, but there was a lot right as well. Buses ran on time. I lived on the west side with my family, my parents and sisters and brothers. That Monday, July 24, the second day of the riot, I walked up Tireman Avenue to Livernois Avenue to catch the bus to work. I didn’t think about whether or not I should go to work. My father had gone to work the day before, on Sunday, the first day of the riot, when

OTHER VOICES

Marcia Humphries Evans Humphries Evans is a resident of Detroit and an AmeriCorps volunteer at an agency in Detroit helping homeless people.

he was scheduled to be off-duty. He was a Detroit police officer. If my father could go to work at the riot, I could go to work at the post office. The riot was not near us. It erupted on 12th and Clairmount, miles away. At least that’s what I thought. Was I ever surprised at what I saw when I got to Livernois. There was an army tank. And soldiers. With guns. That was very strange. It was not scary, just strange. I had seen that scene before. On television. It looked like what I had seen in the World War II movies shown on

the television show, Bill Kennedy’s “Showtime.” Those movies showed empty streets with tanks and armed soldiers patrolling. In those movies the U.S. soldiers were the movie heroes. Now I was in that scene with soldiers guarding the intersection of Livernois and Tireman. Who was the enemy in 1967? Detroit was not, and still isn’t, Germany or France or England or Pearl Harbor. It was just the great city of Detroit, where I lived with my family; I called it my home. I don’t remember if I needed a

pass to be out so early. I don’t remember if the invading soldiers challenged me. Or if my post office supervisor gave me a special permit to be out on the street. I still needed to go to work. Most black Detroiters had jobs in 1967. What I knew in 1967 was that I had a job I needed to get to in order to get paid. People have tried in the last 50 years to do just what I was doing the week of the riot: go to work. But every year since then it has gotten more and more difficult for Detroiters. Every year.

TALK ON THE WEB Re: Belle Isle Conservancy 1967 commemoration Mmmmmm ... should be something about how thousands were held for days on Belle Isle with friends and families not knowing their whereabouts ... I don’t think wind chimes accurately depict that ... imara hyman Where’s the federal government’s contribution? I’d like it to include a list of grievances from the African American community at the time. Far too many outside observers (even those alive and in Detroit at the time) viewed it as the behaviors of a wild and unrestrained population out to loot and plunder. A list of grievances demonstrates that this was a boiling over of issues and feelings. Certainly they can even include efforts made to address grievances, but they were obviously wholly insufficient. There is a racial ignorance that must be addressed in this work. E M Parmelee

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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 ly 2 4 , 2 0 1 7

SPECIAL REPORT: LAW

GETTY IMAGES/ISTOCKPHOTO

Automakers need to be ready when licensors come knocking By Dustin Walsh dwalsh@crain.com

As the telecommunications and automotive industries begin to overlap with the surge of connected vehicles, a costly intellectual property issue is on the horizon. During the creation of connected technologies, such as LTE, WiFi and Bluetooth, standards were developed for the software and hardware to bolster advancements. These inventions are protected through the creation of standard essential patents, which encourage widespread adoption of the standards. The users of these technologies are required to pay licensing fees. As connectivity brings value to the automotive sector, it also opens the door to claims of patent infringement by the holders of the years-old standard essential patents, such as those used in overthe-air updates or even computer chips in connected devices built into the vehicles. Each microchip and connected offering holds upwards of 15,000 patents. For automakers and their suppliers, that means the threat of thousands of patent holders seeking costly licenses for each vehicle or part sold. Legal experts say the practice of standard patents and licensing fees are on the verge of plaguing the auto industry and

are predicting millions of dollars in unexpected fees to be extracted in coming years. “This is a huge issue that’s coming to a head in short order,” said Vishnu Ramaswamy, partner and IP attorney for Detroit-based Wright PLLC. “Automotive, in the last three or four years, has had an increasing desire to embrace the internet of things, connectivity and autonomous driving. It’s becoming an extension of the telecommunications network. Now these holders of standard essential patents are aggressively going after various stakeholders to buy a license.” The issue of standard patent licensing has been litigated heavily in other sectors, with the most notorious case stemming from Microsoft’s use of a Motorola-owned WiFi standard for use in the Xbox 360 gaming console. Motorola demanded Microsoft pay them 2.25 percent of the $399 retail price of the system, which translated to between $8 and $9 per console sold. When the parties couldn’t reach an agreement, Microsoft sued Motorola in 2010 for breach of contract tied to the patent under requirement that standard patent holders must negotiate with a fair, reasonable and non-discriminatory pricing for the license. Three years later, a federal judge ruled that Motorola violated the pricing require-

ment and determined Microsoft pay Motorola 3.471 cents per unit sold. Microsoft sold 84 million Xbox 360s, paying Motorola roughly $2.9 million for the WiFi license, as opposed to the nearly $700 million they would have owed under Motorola’s initial demand. However, the litigation became so nasty, and international, that Microsoft ended up paying $400 million to move a manufacturing facility out of Germany. Michael Huget, partner and leader of the IP litigation practice at Detroit-based Honigman Miller Schwartz and Cohn LLP, said the licensing of standard patents is completely new territory for the auto industry, which has traditionally relied on its own supply base to provide parts and technology for a pre-determined price laid out in a contract. Licensing fees have never been part of the equation. “The way the industry is structured, it’s never dealt with this before,” Huget said. “That model isn’t going to work as more and more connectivity enters the vehicle. (Automakers) will be dealing with tons of different players they didn’t even know they were in business with and it’s coming faster than any of them realize.” SEE LICENSE, PAGE 9

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 2 4 , 2 0 1 7

LICENSE

DTE opens Beacon Park with spotlight on renewal

John LeRoy, partner and chair of the open source compliance practice at Brooks Kushman PC in Southfield, warns that in most cases automakers won’t even understand they are using a standard essential patent requiring a license until a patent holder contacts them. “These patents are not written in a way that a mere mortal can determine its use,” LeRoy said. “The major challenge, in some cases, is that there is no analysis provided to the automaker; they didn’t develop the chip, they didn’t manufacture it. The chips come into the auto supply chain somewhere in the fourth tier. Yet the automaker is expected to pay the license for something they likely didn’t even know they were using.” Standard essential patent licensing has become big business for early developers of wireless technologies. San Diego-based Qualcomm Inc., for instance, reported $6.5 billion of its pretax profit in 2016 from patent licensing, compared to just $1.8 billion from its chip-making business, Fortune reported in June. However, Qualcomm’s licensing practices have landed it as the defendant in several cases, including an antitrust case brought forth by the U.S. Federal Trade Commission, who alleges Qualcomm’s license fees violate fair and reasonable negotiating to a point that it drives out competition. Apple also sued the company over patent-licensing terms, and the Korea Fair Trade Commission fined Qualcomm $853 million for antitrust violations in the South Korean market. But Qualcomm is just one of the major players. Standard patent licensing will continue, and the automotive industry has little to defend itself with, Ramaswamy said. “There’s very few proactive measures a company can take; they mostly have to sit and wait for a licensor to come knocking,” Ramaswamy said. “With as many as 15,000 patents for each standard and thousands of standards, it’s impossible for any single party to find its liability.” LeRoy said the first step toward tackling the issue is for the auto industry to begin to take it seriously and develop a strategy for negotiating with patent holders. “The strategy is to understand your own data and how you may negotiate,” LeRoy said. “When a licensor comes to your door, figure out where they fit in the portfolio of that standard and what you’re willing to pay if everyone with a patent in that standard comes to you. Then divide it up among who has what share of the pie. But you really never know how much they are going to demand and how it may end in litigation.” Huget said as the practice takes hold of the auto industry, the industry will rely more and more on its own internal engineering to find ways around the standards. “You’re going to see more patents coming out of the automakers,” he said. “The costliness of these licenses will force them to start writing more patents themselves as this is hitting the radar.”

By Annalise Frank

FROM PAGE 8

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

Members of the Cody High School football team and about 50 children, including children of DTE Energy Co. employees, break a ribbon held by Detroit Mayor Mike Duggan (left) and DTE Energy Co. Chairman and CEO Gerry Anderson to celebrate the opening of Beacon Park on Thursday.

afrank@crain.com

For years, DTE Energy Co. CEO Gerry Anderson stared down from his office building onto the lot that on Thursday officially became Beacon Park. “I always felt, looking down, that that area held great promise,” he said at a ribbon-cutting ceremony for the park at Cass and Grand River avenues in downtown Detroit. After purchasing the 1.5-acre gravel-filled lot and reshaping plans over the course of three years, DTE has created a green space and event venue. Park operator Downtown Detroit Partnership hosted around 50 free events for Beacon Park’s four-day opening weekend celebration and is planning another 550 or so for the rest of the year. Highlights of the weekend included night markets and a Friday night performance by indie rock band Lord Huron. DTE financed the building of the park; the DTE Foundation gave DDP $1.5 million to fund its operation through the end of 2017. Anderson and Detroit Mayor Mike Duggan spoke at the ribbon-cutting, reminding members of the public who packed a circular lawn that the park’s purpose is to act as a “beacon,” drawing downtown’s renewal northwest along Grand River Avenue. “DTE has been quietly playing a

ANNALISE FRANK/CRAIN’S DETROIT BUSINESS

role in this city that’s dramatic,” Duggan said, referencing DTE’s work with the city installing streetlights and its efforts to tackle the talent gap through summer internship and jobs programs. “A lot of times DTE doesn’t get a lot of the visibility the other (companies) do,” the mayor added. But Beacon Park is going to change that, Duggan said. He and Anderson emphasized the importance of business participation in public works to

accelerate the revitalization process. Anderson said some of the nearby development will be shaped by the Ilitch family, which is leading the 50-block District Detroit redevelopment endeavor north of the park. For the much-anticipated opening, DTE brought the festive atmosphere into its headquarters. The company declared Thursday a bringyour-child-to-work day, said Shannon Brodie, a business technician for corporate strategy. She brought

her 5-year-old daughter Alexis to Beacon Park to join the swarm of 50 children who helped break the grand opening ribbon by running through it. “We needed something here,” Brodie said. She added that she thinks the park will improve “worklife integration” at the company. “During work hours I’m foreseeing that since it’s so walkable ... we can grab our laptop and do work, or use the space on our own,” she said.

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CRAIN'S LIST: INTELLECTUAL PROPERTY LAW FIRMS

Ranked by number of IP lawyers Rank

Firm Address Phone; website

Top local executive(s)

Local intellectual property Total number of lawyers local lawyers June 2017/2016 June 2017/2016 Practice areas

Brooks Kushman PC 1000 Town Center, 22nd Floor, Southfield 48075 (248) 358-4400; www.BrooksKushman.com

Mark Cantor president

79 79

Harness, Dickey & Pierce PLC 5445 Corporate Drive, Suite 200, Troy 48098 (248) 641-1600; www.hdp.com

Executive committee

61 58

Patent prosecution, trademarks, intellectual property litigation, post-grant proceedings, open source compliance, IP due diligence, trade secrets, licensing, copyrights, legal IT consulting, compliance and technical design consulting Patents, trademarks, copyrights, litigation, transactions/due diligence, anticounterfeiting, foreign rights, appellate litigation

Dickinson Wright PLLC 500 Woodward Ave., Suite 4000, Detroit 48226 (313) 223-3500; www.dickinsonwright.com

William Burgess CEO

42 41

174 183

Intellectual property, business technology, copyrights, patents, trademarks, intellectual property and trade secrets litigation

Honigman Miller Schwartz and Cohn LLP 2290 First National Building, 660 Woodward Ave., Detroit 48226-3506 (313) 465-7000; www.honigman.com

David Foltyn chairman and CEO

34 34

219 209

Trademark and copyright, patent and intellectual property litigation practice groups

Howard & Howard Attorneys PLLC 450 W. Fourth St., Royal Oak 48067 (248) 645-1483; www.howardandhoward.com

Mark Davis president and CEO

32 31

74 69

Young Basile Hanlon & MacFarlane PC 3001 W. Big Beaver Road, Suite 624, Troy 48084 (248) 649-3333; www.youngbasile.com

Andrew Basile Jr. president

26 30

28 32

Carlson, Gaskey & Olds PC 400 W. Maple Road, Suite 350, Birmingham 48009 (248) 988-8360; www.cgolaw.com

Theodore Olds III president and CEO

22 21

Bankruptcy and creditorsĂ&#x2022; rights, business and corporate, commercial litigation, employee benefits, environmental, estate planning, franchising, intellectual property, labor, employment, immigration, mergers and acquisitions, real estate, securities and tax Patent and trademark litigation, prosecution and counseling; technologyrelated transactions, including licensing, acquisitions and divestitures; representation of emerging growth companies; and commercial and employment litigation Patents, trademarks, copyrights and trade secrets worldwide; intellectual property and commercial litigation

Reising Ethington PC 755 W. Big Beaver Road, Suite 1850, Troy 48084 (248) 689-3500; www.reising.com

William Francis chairperson and president

21 20

Patents, trademarks, copyrights, trade secrets, counseling, opinions, portfolio management, litigation

Price Heneveld LLP 695 Kenmoor, S.E., Grand Rapids 49546 (616) 949-9610; www.priceheneveld.com

Brian Cheslek managing partner

20 16

0 0

Patents, trademarks, litigation, copyrights, trade secrets and non-compete covenants, information technology and cyber law, antitrust, entertainment law, licensing agreements, interference, international law

Quinn IP Law (Quinn Law Group PLLC) 21500 Haggerty Road, Suite 300, Northville 48167 (248) 380-9300; www.quinniplaw.com

Christopher Quinn president

18 19

Bodman PLC Sixth Floor at Ford Field, 1901 St. Antoine St., Detroit 48226 (313) 259-7777; www.bodmanlaw.com

Ralph McDowell chairman

18 16

134 133

Patent, trademark, copyright and trade secret procurement and enforcement; licensing, IP due diligence and technology-related agreements and transactions; IP technology consulting; IP asset and portfolio management and strategic consulting Technology transfer, IP litigation, digital publishing, trademark selection, registration and licensing, economic espionage, entertainment, IP brand protection

Miller, Canfield, Paddock and Stone PLC 150 W. Jefferson Ave., Suite 2500, Detroit 48226-4415 (313) 963-6420; www.millercanfield.com

Michael McGee CEO

17 16

136 129

Patents, trademark, copyright and trade secret prosecution, counseling and litigation

Brinks Gilson & Lione 524 S. Main St., Suite 200, Ann Arbor 48104-2921 (734) 302-6000; www.brinksgilson.com

Steven Oberholtzer managing partner Ann Arbor office

15 16

Patent prosecution, intellectual asset management, trademark litigation, green tech licensing, biotech/pharma, nanotechnology

Fishman Stewart PLLC 39533 Woodward Ave., Suite 140, Bloomfield Hills 48034 (248) 594-0600; www.fishstewip.com

Michael Stewart and Michael Fishman, founding partners

14 14

Trademark, copyright, patent, patent prosecution, trade secrets, social media, due diligence, litigation and dispute resolution, IP consulting, transactional and e-commerce services

Bejin Bieneman PLC 300 River Place, Suite 1650, Detroit 48207 (313) 528-4882; b2iplaw.com

Thomas Bejin, Charles Bieneman, Stephen Kontos, Christopher Francis, members Linda Paullin-Hebden executive partner

13 11

Patent prosecution, IP litigation, trademarks, licensing, due diligence

12 12

39 39

Copyright law, intellectual property, IP enforcement and litigation, patent prosecution and portfolio management, technology and IP licensing, purchase and sale, trademark portfolio and brand management

15 16

Warner Norcross & Judd LLP 2000 Town Center, Suite 2700, Southfield 48075-1318 (248) 784-5000; www.wnj.com

Darrow Mustafa PC 410 N. Center St., Suite 200, Northville 48167 (248) 864-5959; www.darrowmustafa.com

Christopher Darrow president

11 11

Procurement and litigation of intellectual property rights

The Dobrusin Law Firm PC 29 W. Lawrence St., Pontiac 48342-2813 (248) 292-2920; www.patentco.com

Eric Dobrusin president and shareholder

11 10

Patent practice, trademark practice, IP strategy and counseling, patent opinions, IP due diligence, technology transfer, government contracts, customs enforcement

Dinsmore & Shohl LLP 900 Wilshire Drive, Suite 300, Troy 48084 (248) 647-6000; www.dinsmore.com

Mark Schneider office managing partner

9 15

12 10

Patent, trademark and copyrights

Cantor Colburn LLP 201 W. Big Beaver Road, Suite 1101, Troy 48084 (248) 524-2300; www.cantorcolburn.com

Scott McBain partner

8 9

Litigation, patents, trademarks and copyrights, licensing, opinions, IPRs

Jaffe Raitt Heuer & Weiss PC 27777 Franklin Road, Suite 2500, Southfield 48034-8214 (248) 351-3000; www.jaffelaw.com

Bill Sider CEO and managing partner

8 5

108 108

IP rights, trademark and copyright registration, IP licensing, transactions involving technology and e-commerce, IP litigation, arbitration and appeals, employment and executive contracts, technology transfers

Garan Lucow Miller PC 1155 Brewery Park Blvd., Suite 200, Detroit 48207 (313) 446-1530; www.garanlucow.com

Robert Goldstein chairman of executive committee

7 8

63 60

Butzel Long PC 150 W. Jefferson Ave., Suite 100, Detroit 48226 (313) 225-7000; www.butzel.com

Justin Klimko president and managing shareholder

6 6

126 125

Insurance defense and coverage analysis, appellate law, commercial banking and real estate, commercial transportation and logistics, ERISA and employee benefits law, municipal law, intellectual property, no-fault and auto negligence and workers' compensation Copyright, IP litigation, licensing and technology, patent law, trade secret and non-compete, trademark law

Carrier, Blackman & Associates PC 43440 W. 10 Mile Road, Novi 48375 (248) 344-4422; www.carrier-blackman.com

Joseph Carrier senior partner

6 6

Patent for mechanical, chemical, electrical, computer; trademark; copyright; trade secret

Foley & Lardner LLP 500 Woodward Ave., Suite 2700, Detroit 48226-3489 (313) 234-7100; www.foley.com

Philip Phillips office managing partner

6 5

37 32

Patent prosecution, strategic IP management/portfolio development, IP clearance, freedom to operate, due diligence, IP licensing and transactions, IP litigation and enforcement

This list is an approximate compilation of intellectual property firms in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the firms. Firms with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. NA = not available. LIST RESEARCHED BY SONYA D. HILL

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Michigan | California | Washington, D.C. www.BrooksKushman.com

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 2 4 , 2 0 1 7

Church of Scientology to spend $8 million to renovate its vacant downtown Detroit building By Kirk Pinho kpinho@crain.com

The Church of Scientology has owned the former Standard Savings & Loan building in downtown Detroit for a decade but has done nothing with it. That’s about to change. The Los Angeles-based church has been issued a building permit for $8 million worth of work to the 50,000-square-foot building at the corner of Griswold Street and Jefferson Avenue. The permit was issued July 17 and calls for interior and exterior renovations, according to online city records. The contractor is Sterling Heights-based Roncelli Inc. “The building will house the Church of Scientology of Detroit and is part of the church’s international program to service its parishioners in ‘ideal’ churches,” Karin Pouw, international spokeswoman for the church, said in an email to Crain’s on Wednesday. “The church will have a chapel, rooms for parishioners to study the religion and public areas for community meetings and activities.” Construction work will start “soon,” Pouw said. She added that the church has expanded more in the last decade than it had in the previous 50 years combined.

“In the last year alone, we have opened new churches in Copenhagen, Miami, San Fernando Valley, Auckland, Budapest, Sydney, San Diego and Harlem, adding to the more than 50 new churches opened in recent years.” The Southfield office of Los Angeles-based CBRE Inc. is listing the church’s 15,100-square-foot Farmington Hills building at 28000 Middlebelt Rd. for sale for $1.5 million. It is too soon to say whether staff in the Farmington Hills building will be relocated to downtown, Pouw said. “It will be determined when the building downtown is completed.” The 50,000-square-foot downtown building was built in 1930 and was home to Standard Savings & Loan bank. Its most recent tenant was Raymond James, whose sign still adorns the nine-story building’s roof. The church proposed removing that sign and replacing it with a Church of Scientology sign, but that proposal was scuttled by Detroit City Council. The church paid $3.5 million for the building in October 2007, a rate of $70.07 per square foot, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. It sits just east of the 150 West Jefferson skyscraper, owned by Southfield-based Redico LLC, and across Jefferson from Hart Plaza.

The Church of Scientology plans to spend $8 million on interior and exterior renovations to this downtown building after it has sat virtually untouched for almost a decade under its ownership.

COSTAR GROUP INC.

Augmented reality firm Daqri to open development center in Oakland County By Dustin Walsh dwalsh@crain.com

Trusted Intellectual Property Law ƩŽƌŶĞǇƐ ƐƐŝƐƟŶŐ /ŶŶŽǀĂƚŽƌƐ Since 1865

Troy, Michigan 248-689-3500 reising.com

Los Angeles-based augmented reality company Daqri LLC plans to open an automotive product development center in Oakland County. The company is evaluating locations and expected to announce the specific site in coming weeks, the Michigan Economic Development Corp. said in a new release. The $768,000 investment is expected to create 12 engineering and project management jobs to support its expansion of augmented reality heads-up displays and other technology linking the driver to the car. The Michigan Strategic Fund is supporting the investment with a $100,000 performance-based grant and Oakland County plans to offer placement assistance for the new jobs, the MEDC said. Daqri produces wearable augmented reality hardware and software, such as glasses and helmets, that are used for manufacturing, training and safety in the aerospace, oil and gas, manufacturing and construction industries.

“Michigan is the epicenter of transportation mobility, and we want to be at the heart of it as we bring (augmented reality) to the car.” Brian Mullins, Daqri

“Michigan is the epicenter of transportation mobility, and we want to be at the heart of it as we bring (augmented reality) to the car,” Daqri CEO Brian Mullins said in the release. “Our new office in Oakland County represents a commitment to our Smart HUD partners and customers in the automotive industry, and will enable us to collaborate on solutions even more closely.” Founded in 2010, the California startup has raised about $132 million in venture capital and early stage funding and has offices in Sunnyvale, Calif. and Los Angeles.

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 2 4 , 2 0 1 7

Detroit still has challenges 4 years after declaring bankruptcy The declaration Kevyn Orr filed in U.S. Bankruptcy Court four years ago July 18 about the state of Detroit city government and its finances reads like a distant municipal autopsy: J Detroit was spending 38 cents on every dollar of taxes collected from residents and businesses on legacy costs and operating debt payments totaling $18 billion. This was diverting scarce tax dollars away from neglected essential services like street lights, emergency first responders and basic maintenance of the city’s crumbling infrastructure. J Police response times were averaging 58 minutes across the city (115 minutes if you lived or operated a business in the 8th Precinct in the northwest corner of the city). J As few as 10 of the city’s 36 ambulances were in service in the first quarter of 2013, driving up emergency medical response times to twice the national average. J About 40 percent of the city’s 88,000 streetlights were not working, “primarily due to disrepair and neglect.” J “The city is infested with urban blight, which depresses property values, provides a fertile breeding ground for crime and tinder for fires ... and compels the city to devote precious resources to demolition.” J The official unemployment rate was nearly 21 percent. J Detroit’s balance sheet showed a $36 million fund balance on June 30, 2013 — but only because the city hadn’t paid $108 million in pension payments that had been piling up since the previous fiscal year. J A month before the bankruptcy filing, Orr halted a $39.7 million payment on $1.4 billion in pension debt issued by former Mayor Kwame Kilpatrick’s administration to make the city pension funds look better funded than they really were. J Orr defaulted on the pension debt to avoid running out of money that summer. Still, the city’s accounts were projecting a negative $11.3 million cash position by December, followed by deficits of $143.3 million by July 2014 and $404.5 million by July 2015. Detroit’s need for debt relief following six decades of population decline, businesses disinvesting and uprooting for the suburbs and mismanagement at City Hall was spelled out in Orr’s 88-page declaration seeking what was at the time the largest municipal bankruptcy in U.S. history (Puerto Rico has since passed Detroit in this dubious distinction). “Without this, the city’s death spiral I describe herein will continue,” Orr warned. Four years after Gov. Rick Snyder authorized Orr to file bankruptcy, the purpose of Detroit’s painful financial reckoning to shed $7 billion in debt owed to creditors and retirees is increasingly evident: J 65,000 new streetlights have been installed. J Police response times have been reduced four-fold to an average of 13.8 minutes. J 11,847 blighted buildings have been torn down since January 2014.

Graffiti artists Melo and Ayem created this multicolored bankruptcy mural along Van Dyke Avenue in Detroit as a way to represent the many layers they see in the subject.

CRAIN’S DETROIT BUSINESS

CHAD LIVENGOOD clivengood@crain.com

J Ambulance response times are half as long as they were when the city went bankrupt, dipping below the national average of eight minutes in April. Detroit has 37 ambulance rigs running during peak afternoon and night-time hours and 34 percent more medical technicians. J Detroit’s unrestricted general fund finished the 2016 fiscal year with a $143 million surplus — double the city’s surplus from 2015. That’s in addition to $62 million the city had to keep in a budget reserve, as required by the city’s court-approved bankruptcy exit plan. J The bankruptcy freed up $1.7 billion over 10 years for reinvestment in updating archaic IT systems, buying new police cars, fire trucks and ambulances. J As of March 31, the city had a general fund surplus of $51 million, with $52.8 million more cash on hand than March 2016, according to a May 30 report from the Detroit Financial Review Commission to Snyder. The surplus has allowed Detroit to squirrel away an extra $20 million into a trust fund for a pension “funding cliff” expected to materialize in 2024, according to the report authored by the commission’s executive director, Ronald Rose. “The surplus is primarily being driven by (700) unfilled vacancies within the city,” Rose wrote. “A portion of the projected surplus may be utilized for recommend fleet re-

placements during FY 2017.” Rose’s biannual report went mostly unnoticed the week of Memorial Day while Snyder, Mayor Mike Duggan, members of City Council and Detroit’s business community were gathered on Mackinac Island for the Detroit Regional Chamber’s annual policy conference. That’s because unlike past confabs at the Grand Hotel, the governor and business leaders weren’t sounding alarm bells about an impending financial meltdown at the Coleman A. Young Municipal Center. The bankruptcy laid bare the facts about Detroit’s finances that state and city leaders, as well as labor unions, had been largely ignoring for years. With the city’s finances mostly straightened out, private investment confidence in Detroit and its government is evident with every new real estate development or housing project that’s announced. It’s a confidence that was largely lacking on July 18, 2013, when Detroit’s bankruptcy filing triggered international headlines declaring the Motor City dead. As Detroit’s post-bankruptcy unemployment rate has dwindled to a 17-year low and city tax revenues exceed expectations, the focus has turned to addressing more deep-seated problems of rebuilding a middle class in Detroit, fixing the public schools and spreading the “comeback” of downtown and Midtown to long-neglected neighborhoods. Those are arguably more complicated issues than getting a willing bankruptcy judge to erase decades of unsustainable promises to retirees and poor financial decisions by past city leaders. New streetlights aren’t a cure-all for sparsely-populated streets. Neighborhoods with chronically failing schools — or no school at all —

aren’t going to attract families back to Detroit. Poverty, blight and abandonment outside of the vibrant 7.2 square

miles of greater downtown serves as a visible daily reminder of what Detroit’s historic trip to bankruptcy court couldn’t immediately fix.

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 2 4 , 2 0 1 7

SPOTLIGHT

CALENDAR TUESDAY, JULY 25

Mapping the Legacy of Your Family Business. 8:30-10:30 a.m. July 25. Bodman, Charter Capital Partners, and Rehmann. Seminar will focus on how to transition a family-owned business from one generation to the next. Takeaways will include common misconceptions about gifting a family business, questions to ask when developing a succession plan, opportunities for families to find their own succession solutions, and strategies for protecting wealth. Speaker is Tom Deans, author of Every Family’s Business, followed by a panel of professional experts from Bodman, Charter Capital Partners, and Rehmann. Detroit Athletic Club. $50. Contact: Tyler Deur, phone: (616) 258-5775; email: tdeur@lambert-edwards.com; website: creatingalegacy-detroit.eventbrite.com

UPCOMING EVENTS

Asian Pacific American Chamber of Commerce Symposium. 7:30-9:30 a.m. Aug. 17. APACC. Peter Sorrentino, Comerica’s chief investment officer, talks about current economic trends with a focus on the changing

nature of the U.S. global trade and its impact on currencies, commodities and productivity. Comerica Bank, Livonia. $10 members; $20 nonmembers. Contact: Leonie Teichman, phone: (248) 430-5855; email: leonie@ apacc.net; website: apacc.net American Society of Employers Employment Law Workshop. 7:30 a.m. - 3:30 p.m. Aug. 17. ASE. Workshop will address employee relations. Attorney-led panels and specialized breakouts will review a number of everyday laws and regulations that impact the employer-employee relationship. Schoolcraft College VisTaTech Center. $159 members; $179 nonmembers. Contact: Wendy LoCicero, email: wlocicero@aseonline.org Filling the Supervisory Gap. 8:30-10:30 a.m. Aug. 22. Michigan Manufacturing Technology Center. Event discusses effective leadership and bridging the gap between newer and seasoned workforces, senior and junior staff, and front office and plant floor associates. Free, but registration required. Michigan Manufacturing Technology Center,

Plymouth. Contact: Gary Marley, gmarley@the-center.org

email:

Trends Impacting Automation Companies. 8:30-10:30 a.m. Aug. 23. Automation Alley. Info session to discuss Industry 4.0 trends, address systems integration challenges and offer solutions to issues impacting the current business climate. Speakers include: Tim Finerty and Sarah Russell, CPA shareholders, Clayton & McKervey. Automation Alley, Troy. Members free; nonmembers $20. Phone: (800) 427-5100; email: events@automationalley.com

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

JJH.W. Kaufman Financial Group, Farmington Hills, an insurance company, has acquired Chlystek & White Services Inc., Grand Rapids, a regional insurance premium audit services company. Website: kaufmanfinancialgroup. com. JJStatewide Management Group, New Haven, a real estate management and development company, has acquired the Richmond Plaza, Richmond, a retail plaza. Website: statewide-mgt.com. JJJenCap

Holdings LLC, New York, N.Y., has acquires privately held Special Risks Facilities Inc., Sterling Heights, a managing general agent/contract binding authority and wholesale insurance brokerage firm. Website: jencapholdings.com.

CONTRACTS JJFaurecia,

Auburn Hills, an automotive equipment supplier, has a contract with ILJIN, Novi, and CleanEarth, Hatboro, Pa., who have both contracted with the Ministry of Environment in South Korea, to retrofit 20,000 Seoul buses and commercial vehicles. Website: Faurecia.com.

and services. Under the terms of the three-year agreement, REV will equip its bus, fire and specialty vehicles with Meritor’s axle assemblies. Websites: revgroup.com, meritor.com.

Oxford, a sandwich retailer, has opened at 172 W. Nine Mile Road, Ferndale. Telephone: (248) 431-9424. Website: mcwiches.com.

JJLlamasoft, Ann Arbor, a global supply chain optimization software and solutions company, announced a partnership with LynnCO Supply Chain Solutions, Tulsa, Okla., a provider of services to executives who need to enhance performance of complex supply chains. Websites: llamasoft.com, lynnco-scs.com.

JJGRIT Technologies, Clinton Township, an IT services firm, opened a firm in Grand Rapids led by Paul Bischer, new director of business development. Website: grittechs.com.

JJStockX, Detroit, an online stock market of consumer products, is collaborating with IBM, North Castle, N.Y., to design, build and deploy a new app on the IBM Cloud to help scale operations and meet needs of expanding user base. Websites: stockx.com, ibm.com.

Star Driver Education, Ann Arbor, a driving school franchise, has an agreement with Autobrain, Boca Raton, Fla., a connected car platform, to provide services to All Star. Websites: allstardrivereducation.com, autobrain. com.

JJWiches,

JJBusch’s Fresh Food Market, Ann Arbor, opened at 9870 E. Grand River Ave., Brighton. Telephone: (810) 229-0317. Website: buschs. com. JJMotor City Co-op Credit Union, Clinton Township, opened at 27454 Gratiot Ave., Roseville. Telephone: (586) 228-8484. Website: motorcitycoopcu.com.

MOVES

JJQualitech, Bingham Farms, a technology integrator and software reseller, has installed its hosted phone system at Robertson and Morrison Inc., an Ann Arbor heating and cooling firm, and Rosko and Associates, Bingham Farms, a vocational rehabilitation services provider. Website: qualitech.net.

BMW, Bloomfield Hills, has moved from 4065 W. Maple Road, Bloomfield Hills, to 1845 S. Telegraph Road, Bloomfield Hills. Telephone: (248) 642-6565. Website: erhardbmw. com.

EXPANSIONS

JJArt

JJDuo

JJAll

Security Inc., Ann Arbor, a cloud-based access provider, has opened a 14,000-squarefoot office in Austin, Texas. Website: duo.com.

JJMeritor Inc., Troy, a global supplier for com-

International Corp., Troy, an automotive franchise of vehicle protection and appearance services, has opened at 5923 E. 14 Mile Road, Sterling Heights. Telephone: (586) 553-9564.

mercial vehicles and the industrial markets, announced a new standard supplier agreement with REV Group, Milwaukee, Wis., a designer, manufacturer and distributor of specialty vehicles and related aftermarket parts

JJAthletico Physical Therapy, Oak Brook, Ill., a physical therapy franchise, has opened at 2570 Jackson Ave., Suite C, Ann Arbor. Telephone: (734) 823-7820. Website: athletico.com.

JJErhard

NEW PRODUCTS

Van Furniture, Warren, introduced the Magnolia Home furnishings line. The collection features furnishings and accessories by Joanna Gaines, Waco, Texas. Website: artvan. com

JJZiebart

YOU MADE NEWS IN CRAIN’S

The Detroit Land Bank Authority’s board has a hired a native Detroiter with nearly two decades of experience in municipal government to lead the city agency charged with clearing out blighted properties and selling salvageable homes. Saskia Thompson, 47, will be the land bank authority’s new executive director starting in September. The land bank’s board had held interviews to replace Carrie Lewand-Monroe, who left the agency in mid-May to return to private sector development and consulting work. Thompson is returning to Detroit after six years as the deputy finance director for the city of Philadelphia. She previously spent nine years in Charlotte, N.C., as executive director of the city manager’s office, according to a news release. The land bank board set Thompson’s annual salary at $150,000.

DMC, United Way execs swap roles

DEALS & DETAILS ACQUISITIONS & MERGERS

Detroit Land Bank names new leader

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A top Detroit Medical Center executive and United Way executive have switched spots. Gloria Larkins, who was most recently CFO of Detroit Receiving Hospital, is now CFO at United Way. And Bridgett Feagin, who had served as CFO at United Way for the past year and a half, has returned to DMC Gloria Larkins as CFO for Detroit Receiving Hospital, as well as Harper University and Hutzel Women’s hospitals. Larkins will oversee United Way’s general accounting, budget, financial analysis and financial reporting functions. Before coming to Bridgett Feagin United Way, Feagin served as vice president, financial planning and budget for Detroit Medical Center.

Chuck Gaidica to leave WDIV Two years after returning to Detroit NBC affiliate WDIV-Channel 4 to co-host “Live in the D,” Chuck Gaidica announced that he plans to leave again to join Hilltop Church in Northville as executive director. Gaidica’s last day is Aug. 2, according to a WDIV report announcing the decision. Chuck Gaidica The popular former weatherman joined the entertainment and lifestyle show in September 2015. He had left his longtime post at the weather desk in 2014 to become a pastor at Oak Pointe Church in Novi. He returned to the TV station after a year away.

July 24, 2017

Detroit Unspun organization to get new ownership on Aug. 1 The organization that has acted as fixers for outside news media and been a platform to push positive coverage of Detroit will get new ownership Aug. 1. What launched as the Detroit Regional News Hub in 2008 and is known today as Detroit Unspun has been handed over in a nonmonetary deal to a pair of local public relations veterans, Vanessa Denha Garmo and Daniel Cherrin, by current owners and co-founders Marge Sorge and Maura Campbell. Denha Garmo owns Livonia-based Denha Media Group and is co-founder and editor of the monthly Chaldean News. Cherrin owns Royal Oak-based North Coast Strategies. When the outside news media concierge service launched, both were political press secretaries: Denha Garmo for then-Wayne County Executive Bob Ficano and Cherrin for then-Detroit Mayor Ken Cockrel, Jr. Denha Garmo, who did video work for the news hub after leaving the Ficano post, said she and Cherrin are equal partners under the deal, and their plan to is find money to pay for a new direction for Detroit Unspun, which for years has distributed by weekly email, called The Bulldog, an aggregated collection of news and stories about Detroit. The newsletter, which has

PONTIAC FROM PAGE 3

Mayor Deirdre Waterman agreed, calling United Shore’s pending move to Pontiac’s outskirts next summer something that is “uplifting for the city that a company of this caliber is bringing this much economic potential to the city, and that we attracted them from another community.” But the what-if remains. “Any company of that ilk that comes to the downtown area would have a big impact and imprint where they went,” Waterman said.

Pontiac has wins It’s not like downtown hasn’t had wins recently, particularly with Peter Karmanos Jr.’s Birmingham-based Mad Dog Technology LLC bringing three of its companies and hundreds of workers to the Riker Building on West Huron Street. And the Flagstar Strand Theatre for the Performing Arts and Slows Bar BQ both opened earlier this year on Saginaw Street, representing more than $20 million in investment. But United Shore would have been a game-changer. Robert Gibbs, an urban planning and retail expert and managing partner of Birmingham-based Gibbs Planning Group, said 2,000 or so United Shore employees

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 2 4 , 2 0 1 7 CRAIN’S DETROIT BUSINESS

expand its role by working with companies on initiatives such as how different generations work together. Detroit Unspun will continue to act as fixers for outside news media if requested — connecting with more than 2,000 a year in the early years — but the organization moved away from that as a primary Vanessa Denha Daniel Cherrin: Garmo: Owns Owns North Coast role a few years ago as visiting journalists became familiar with the Denha Media Strategies. city and sources needed to tell more Group. accurate stories, Denha Garmo 2,000 recipients, also has used free- said. lanced blog content paid for by De“If it’s needed, we’ll still do it,” troit Unspun. The news hub web- she said. site served a similar role as a The organization was created in clearinghouse for news, informa- 2007 and launched in 2008 with tion and sources for journalists. $600,000 in seed funding provided The organization’s overall intent by members of the Road to Renaishas always been to ensure visiting sance consortium that formed media tells Detroit’s full story and during a Mackinac Policy Confernot just the “ruin porn” brand of re- ence event as an effort to revive and porting that became a fixture of na- promote Detroit. The Downtown tional reporting by 2008. Its out- Detroit Partnership assumed a reach over the years included funding role, as did Detroit-based providing fact sheets about the city Strategic Staffing Solutions and during major events and conduct- Henry Ford Health System. ing media bus tours. Among those who help organize One new initiative will be to cre- and launch the news hub was ate sponsored events, Denha Gar- Crain’s Detroit Business Publisher mo said, as a source of revenue. The Mary Kramer, who is now a group organization will also continue to publisher within Crain Communiprovide the aggregated and original cations Inc. Business and civic stories about Detroit and the region leaders and journalists were invia emailed newsletter and social volved in the creation and launch of media, she added, but will seek to the news hub.

“It would have been a huge impact to go to downtown Pontiac, but it’s still a huge impact to go to Pontiac either way. Pontiac is doing a great job and it’s on the way back.” Mat Ishbia

downtown “would have translated to directly supporting 50,000 square feet of additional retail and restaurants or approximately 25 new stores and restaurants, per Urban Land Institute research.” The industry rule of thumb is that each new office worker creates two to four new supporting jobs, Gibbs said. That means a United Shore move downtown could have brought not just 2,000-plus workers, but created another 4,000 to 8,000 new jobs. “It would have also increased foot traffic downtown, reduced crime or perceived crime and would have allowed USFS to attract more talent easier as many 20-yearolds prefer working in urban centers,” he said. “A considerable missed opportunity for all parties. Pontiac should be able to attract major employers given its urbanism and central location.” Mark Nikita, an urban planner and architect and president and co-founder of the Detroit-based

Archive DS architecture firm, said given the somewhat isolated location United Shore chose, the move will have less of an impact than a downtown move. “I can't really say it would be a missed opportunity, but there is no question for this to have a bigger impact on the city of Pontiac overall, helping to create more of an awareness of the rise of Pontiac ... for other businesses to then come would be bigger if they were in the center,” said Nikita, who is also the mayor of Birmingham. Ishbia knows that moving downtown would have been a shot in the arm for the area, but said ultimately that his $80 million decision to move to South Boulevard was the right one. “It would have been a huge impact to go to downtown Pontiac, but it’s still a huge impact to go to Pontiac either way. Pontiac is doing a great job and it’s on the way back,” he said. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

Page 15

MARKET PLACE

JOB FRONT

REQUEST FOR PROPOSALS

MISCELLANEOUS

Request for Proposals For Professional Services For the General Retirement Systems of the City of Detroit

SURVEY ANALYZE

The Trustees of the General Retirement System of the City of Detroit are seeking proposals from qualified firms to provide media relations and communications consulting services. Interested firms are invited to submit a proposal. The Request for Proposal (RFP) will be available on July 14, 2017. Responses are due by August 31, 2017 at 4:00 P.M. EST. The RFP will be posted on the Retirement Systems of the City of Detroit’s website at www.rscd.org. The RFP can be found on the GRS Home Page. All correspondence and inquiries concerning this RFP should be directed solely to Lamonica Cabean, at lcabean@rscd.org. Responses are due by August 31, 2017 at 4:00 P.M. EST.

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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 LY 2 4 , 2 0 1 7

ENERGY FROM PAGE 1

At stake is whether small, independent producers of power from renewable sources such as hydroelectric, biomass, waste-to-energy and landfill gas will be able to remain part of the renewable energy mix now dominated by big wind and solar — which are increasingly owned by utilities. But Consumers argues that their ability to offer affordable rates to their customers also hangs in the balance. The case, and others like it, could set a national precedent.

Downward pricing In Michigan, there are more than 30 renewable energy providers — generating up to 500 megawatts of power for 500,000 homes — some of which are IPPC members and many of which have contracts set to expire from 2017 to 2039. There are six other regulated utilities in Michigan, including DTE Energy Co., that also have similar cases before the MPSC. Consumers Energy by far has the largest number of renewable energy contracts of this kind. Leabu and other IPPC members have become increasingly glum about their chances for a favorable outcome. MPSC staff has changed its recommendations on pricing downward twice in the past month. Last fall, MPSC staff recommended a proxy pricing formula that IPPC signed off on, but Consumers didn’t like it and objected. “We are getting really frustrated with the staff because they seem to be headed more in Consumers’ direction,” said Leabu. “We are very frustrated now after we had initial thoughts of them being fair and reasonable.” In an email, a Consumers Energy official said the utility is “committed to working with all stakeholders during this process ... and will continue to advocate for competitive, affordable energy for our customers.” Leabu, who lives in Brighton, has operated the White’s Bridge hydro plant with four employees in West Michigan on the Flat River since 1984. It was built by the city of Lowell in 1896. He told Crain’s that the rates Consumers has offered and what the commission’s staff is recommending would financially cripple or put out of business several dozen renewable power operators. “Most of us hydro (operators) are looking at something under 7 cents” and potentially as low as 6 cents per kilowatt hour, Leabu said. “At 8 cents, which they were offering, we can exist. ... I am a little pioneer guy who could fall by the wayside.” IPPC officials said they supported rates in the range of 7 cents to 9 cents per kilowatt hour, which would fund required capital improvements, employee salaries and benefits, according to IPPC filings. However, MPSC staff’s latest recommendation, issued June 19, suggests that rates could fall under 7 cents per kilowatt hour, ranging from as low as 5 cents to 7 cents per kilowatt hour. MPSC declined comment on the

Vic Leabu operates White’s Bridge Hydro Co. on the Flat River in Lowell with four employees. It was built by the city of Lowell in 1896. case because it is pending before MPSC Administrative Law Judge Mark Cummins. Katie Carey, Consumers director of media relations for governmental, regulatory and public affairs, said Consumers wants to take a “balanced approach to ensure our customers have the energy they need to power their homes and businesses, at prices they can afford.” Carey said the balanced approach means using natural gas, but also prioritizing such renewable energy sources as wind and solar. Consumers also wants to manage energy through efficiency and demand response programs. She said biomass and hydro continue to be part of supply mix, just not part of Consumers’ priority focus.

PURPA problems The MPSC bases its authority to set rates for Consumers, DTE and other utilities on a 1978 federal law, the Public Utility Regulatory Power Act, which requires regulated utilities to purchase power from renewable power generators under 20 megawatts. Under PURPA, utilities must pay the price based on the “avoided costs” to generate the same amount of power used in the current standard power-generation source, which used to be coal. Since the MPSC’s May 31 order, the state’s approved avoided cost methodology is now based on natural gas generation with several energy and capacity factor adjustments. The last time Consumers agreed to contract prices with independent, qualified facility renewable power owners was in 1982. The three-member MPSC now must decide whether to support rates based on a modified avoided cost methodology that the IPPC contends is 20 percent to 30 percent lower than the previous two staff recommendations and lower than current contracts. The rates also “do not reflect similar costs that Consumers receives to run its own similarly-situated facilities,” the IPPC said. On the utility side, Consumers and other utilities say they want to

pay the lowest price possible to keep electricity rates down for customers. But renewable energy operators say they need fair prices that also comport with federal law to continue operations and build for the future. Margrethe Kearney, a staff attorney in Grand Rapids with Environmental Law and Policy Center, said ELPC believes the MPSC staff’s third recommendation on June 19 is in error and has objected in a response to the commission. She said ELPC supported the commission staff’s first recommendation and felt the rates complied with federal law and would sustain the small renewable operators. Kearney said the third set of numbers lowered prices by at least 20 percent. “One of the goals of PURPA is by

Darwin Baas, director of the Kent County Department of Public Works, said preliminary rate projections Consumers would pay for the county’s 15-megawatt waste-to-energy facility range from 6 cents to 6.5 cents per kilowatt hour, down from its current 8.5 cent rate. Kent County stands to lose $2.5 million in annual electrical revenue if the MPSC recommendation stands, Baas said. Kent County’s contract with consumers expires in early 2022. The county recently made a $2 million refurbishment investment on its plant that employs 40 workers, Baas said. “We continue to push back and do not think the (MPSC) staff-proposed proxy figures are anywhere near reality nor accurately represent Consumers Energy actual avoided cost calcula“One of the goals of PURPA is by tions for electrical generareaching the right avoided cost tion,” Baas you are properly incentivizing said. “We’re small independent power worried to say the least.” producers, like hydro, to help J a m e s meet renewable goals. It Charles is direcstrengthens the grid and you tor of operahave a national security tions with Sacramento, benefit.” Calif.-based Margrethe Kearney, a staff attorney in Grand Rapids Fortistar Biowith Environmental Law and Policy Center, mass Group, which owns reaching the right avoided cost you Hillman, a 20 megawatt biomass plant are properly incentivizing small in- that powers about 14,000 homes. dependent power producers, like Charles said the MPSC staff has hydro, to help meet renewable been recommending declining rates goals. It strengthens the grid and the past month. He said the impact you have a national security bene- to Hillman won’t be known until the fit,” Kearney said. “If avoided costs commission’s decision. are too low, like double counting in“We are concerned. We have flation, customers get hurt because been providing renewable energy at you have falsely low avoided costs.” Hillman’s for 30 years. We want to Gary Melow, director of Michigan continue to generate renewable enBiomass, said the PURPA avoided ergy as long as the commission cost formula must fairly price pro- comes up with a fair rate,” Charles jected electric capacity and energy said. production provided by the indeIPPC’s other members include pendent power producers. Lansing-based Granger Energy SerMelow said Michigan Biomass, vices (landfill gas) and about 22 othwhich is not a part of the case before er hydroelectric facilities, among the commission, has three members them Boyce Hydro; Michiana Hydro in IPPC — the Hillman Power Co., Electric Co.; Tower Kleber LP/Black Viking Energy of Lincoln, and Viking River LP; the city of Beaverton; and Energy of McBain. Elk Rapids Electric Power.

State, national precedent? Kearney said the Michigan PURPA cases have national implications for renewable energy operators and regulated utilities, especially in Midwestern states. “If Michigan can show that PURPA competitively prices clean renewables and doesn’t impact prices customers are paying, it can send a very strong message that PURPA works,” Kearney said. Melow said and Kearney also agreed that a favorable ruling for renewable operators from MPSC could lead to further growth in the renewable market, including distributed and community solar projects. “As states are capping out (reaching maximum state-mandated renewable portfolio standard), you have solar developers looking for ways to develop projects,” Melow said. “People are realizing they can use PURPA and utilities have to buy their solar. This is the national dialogue that is affecting Michigan, and what’s happening in Michigan is being watched closely around the country.” Kearney said many cities and community solar operators are looking to expand their renewable energy portfolios. A favorable PURPA decision could encourage more solar and other renewable plants. “It gives them another tool and more flexibility to put together projects,” Kearney said. “Cities are pledging to make energy use 100 percent renewable. It gives them flexibility how to do it.” Moreover, Michigan’s new energy law requires utilities to produce 15 percent of energy from renewable sources by 2021. A previous 10 percent renewable energy goal was reached in 2015. Consumers Energy provides natural gas and electricity to 6.6 million of the Michigan’s 10 million residents. DTE Energy, the state’s other major power producer, sells electricity to 2.2 million customers in Southeast Michigan and another 1.2 million gas customers in Michigan. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 2 4 , 2 0 1 7

CRAIN’S DETROIT BUSINESS

The greens at Meadowbrook Country Club in Northville were reseeded as part of a renovation project.

GOLF FROM PAGE 3

Sparking demand Meadowbrook’s course was designed by noted Scottish golf architect Willie Park, Jr., who gave the course a British feel when it opened in 1916. It hosted the 1955 PGA Championship and The PGA Tour’s former Motor City Open four times. The renovation, which began in October 2015 and was led by Scottsdale, Ariz.-based Staples Golf Design, included reconstruction of putting greens and approaches, tee boxes, bunkers, improved drainage and turned 25 acres of rough into nomow areas. About 70 acres of fairways, greens and rough were replaced with droughtand disease-resistant turf. The work earned the country club an honorable mention from Golf Inc. this year in the magazine’s annual Renovation of the Year awards. The Meadowbrook membership, which is paying off the project via monthly assessments, has responded enthusiastically to what’s functionally a new course for them. Nearly 50 percent more golf is being played on the renovated course, Marini said, which is more of an increase than they expected. It’s not cheap to play the club as a member: Meadowbrook’s fee to join as a Class A golfing member peaked at $56,000 in 2009, but the recession drove that down to $20,000 at one point. It’s now up to $46,000, and the club will consider another increase at the end of the year. The fee includes an equity stake in the club,

and the number of Class A golfing memberships is capped at 325. There’s also a shorter waiting list to join the club as a non-golfing social member, Marini said. “Across the board, the club is very healthy,” he said. “Our ZIP code is very strong.” The club draws largely from Novi, Farmington Hills and growing South Lyon. Meadowbrook’s success also has had at least an anecdotal effect on the wider business community. While there’s no way to track how much business is done on the golf course — deals, networking, etc. — Marini said there’s evidence of a post-renovation uptick. “Members have been telling me that they have clients who want to play Meadowbrook,” he said.

Inspiring others? Meadowbrook’s successful renovation has generated interest from the state’s most elite country club. A year ago, the members at Oakland Hills Country Club in Bloomfield Township — arguably Michigan’s most august golf club — rejected an $11 million plan to close the famed South Course for a 14-month reconstruction aimed at improving playability for members and returning it to its original 1918 layout. It’s unclear if club management will seek another sweeping renovation plan. “There really isn’t anything new to report at this time,” Oakland Hills General Manager Chris Berlin said via email. Marini said he took a group of Oakland Hills leaders through the

Meadowbrook project, but he doesn’t know what their plans may be. In the meantime, course owners, golfers, and analysts continue to crunch the industry’s numbers on the state and national post-recession golf economy in an attempt to divine the future of the business.

Golf by the numbers The first vital sign for golf is how many people are playing, because that can drive the fate of golf courses. When it comes to understanding golf participation data, Tom Stine is the guru atop the mountain. And his sage wisdom on interpreting the numbers is simple. “It’s always weather. It’s not the economy or golf business or Tiger Woods or anything else,” said Stine, partner at St. Cloud, Fla.-based Golf Datatech LLC, which tracks rounds played. Michigan, which has more golf courses than most states, is susceptible to rain and snow and temperature swings that can depress or boost the number of rounds played compared to Southern states, Stine said. Metro Detroit reported a 2.9 percent decline in the number of

“It’s always weather. It’s not the economy or golf business or Tiger Woods or anything else.” Tom Stine

rounds played in 2016 versus the year prior, according to Datatech, but that came after a 14 percent increase in 2015 in rounds played over 2014. What the local and national rounds-played numbers show over time is relative consistency, Stine said, but the year-to-year swings are often misinterpreted. “Golf is not going out of business. You just can’t overreact to single data points,” he said. About 25 million Americans play golf and that number has remained consistent, he said. Outside of weather, the only major factor driving rounds played, he said, was the golf real estate boom that was deflated by the recent recession, and that has subsequently adjusted to pre-recession levels locally and nationally. “Michigan has always been a hotbed for golf, golf courses, and golfers. Part of that is the topography. It’s easy to grow grass in Michigan,” said Stine, who is in Michigan to golf this summer. While the same number of golfers are playing about the same number of rounds, they’re doing it at fewer golf courses. Data from the Jupiter, Fla.-based National Golf Foundation shows that 211 18-hole courses closed in 2016 while just 15 opened, leaving 14,117 golf courses in the U.S. That closure trend has been ongoing since 2006, and the foundation calls it a market correction in response to the construction of nearly 5,000 courses between 1986 and 2005. “This gradual reduction is indicative of the market’s healthy self-bal-

ancing of supply and demand, and a trend we expect to continue for several more years,” NGF’s Chief Business Officer Greg Nathan said in a report earlier this year. The foundation’s data also shows a trend of major investment in course renovations. Meadowbrook is among nearly 1,000 clubs since 2006 that have closed for at least three months for reconstruction, and the combined investment has been $3 billion, the foundation reported. Michigan hasn’t been exempt from the trend of golf course closures outpacing construction of new clubs: 12 courses permanently closed across the state in 2016, the data shows. Michigan in 2016 had 726 golf courses, of which 617 were public and 109 were private, according to data from the NGF. Kevin Frisch, CEO of Gaylord-based golf and travel marketing firm Fusion Media Strategies, said four new golf courses have opened or are under construction since 2016 — a healthy sign for Michigan’s golf economy. Last year, the Loop at Forest Dunes opened near Roscommon, and this year Stoatin Brae Golf Club near Battle Creek opened, he said. Next year, Sage Run at the Island Resort Casino in Escanaba is scheduled to open, followed by a new 18-hole course at Arcadia Bluffs Golf Club in either 2018 or 2019, Frisch said. “That is four golf courses in four years, which tells us that the golf economy is rebounding,” he said. Bill Shea: 313 (446-1626) Twitter: @Bill_Shea19

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 2 4 , 2 0 1 7

OPIOIDS

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higher for baby boomers, with an av- Employers can help erage abuse rate of 7.4 percent, than FROM PAGE 1 Coupled with heroin, a natural or millennials, with an average abuse Last year roughly 11 million opisemisynthetic opioid when mixed rate of 2 percent. oid prescriptions were written in Income also plays a critical role in with fentanyl, opioid overdose Michigan — a state with only 9.9 milwhether an individual abuses opi- deaths in Michigan surpassed traffic lion residents, according to Michioids. Those with an opioid prescrip- fatalities in 2014 and gun deaths in gan Health and Human Services tion earning less than $40,000 are 2015, according to data from the data. The prevalence of these highmore than twice as likely to abuse Michigan Department of Health and ly-addictive drugs — such as oxycotheir prescription than those earn- Human Services. In 2015, nine out done (OxyContin), hydrocodone ing more than $84,000 annually, ac- of every 100,000 residents in Macomb County and 7.3 in every (Vicodin), methadone and fentanyl cording to the Castlight study. — has left a large population of the But Darlene Owens, director of 100,000 residents in Wayne County workforce strung out and created a substance use disorder initiatives at died from an opioid, including herocostly epidemic for employers. the Detroit Wayne County in, overdose. “We’re begging people; we have New policy measures in Mental Health Authority, said Michigan are targeting the her centers are seeing a rise in services available to you,” Owens over-prescribing of opioids, professionals or former pro- said. “We’re changing lives, but right such as the Michigan Automatfessionals addicted to opioids. now it’s a losing battle. We’ve got a ed Prescription System, which “It’s impacting everyone all long way to go.” allows prescribers access to paCastlight’s study recommends across the board,” Owens said. tient records for certain drug “We’ve had doctors, nurses employers work with the company’s classes and Medicaid coverage and lawyers come in that have benefits director to identify the expansion for treatment prorecently lost their jobs. More medical conditions most tied to opigrams. But experts are urging and more people are using. oid abuse, such as joint pain and deemployers to help abate the We’ve never seen this much pression, among its workforce. Then crisis, too. abuse of prescription drugs take a critical look at that population and access their benefits programs Opioid abuse cost employbefore.” ers nationally $16.3 billion in For Nasser, his addiction to lead employees to better deciISTOCK led him to steal painkillers sions around opioid use. 2013 due to reduced productiv“Whether it’s guiding an employity and increased disability. Wayne County, excluding from the medicine cabinets of Another $14 billion is absorbed Empire’s middle- and up- ee away from an unnecessary back by private health insurers, ac- Detroit, has seen the per-class customers — a move surgery (and the resulting opioid cording to a 2016 Centers for largest increase in opioid that landed him a misde- prescriptions) or offering programs Disease Control and Preven- prescriptions in Southeast meanor charge and the loss of that provide access to opioid abuse tion study. his job. Desperation led him treatment, Castlight believes that Michigan between 2009 In Michigan, health care heroin use and burglary, data and analytics are part of the and 2015, rising 51 percent. to costs associated with opioid which led to a stint in Wayne solution,” the study said. “A solution abuse totaled $830 million in However, they are on the County jail. He lost custody of that will enable employers to effectively address opioid abuse head on, 2013, a number that has likely rise everywhere — opioid his two children as well. risen in recent years. “Everyone’s medicine cabi- and confront significant health, cost prescriptions rose 38 Opioid abusers, while only percent in Macomb County, net had (opioids),” Nasser and productivity and personal consaid, who has been clean for sequences linked to the crisis.” representing 4.5 percent of opiKohn-Parrott is asking employers oid users in the U.S., account 35 percent in Livingston nearly 10 months and is finfor 40 percent of opioid pre- County, 34 percent in ishing a term in rehabilitation to step up and help generate soluscription spending, according Oakland County and 22 at Detroit Rescue Mission tions as more and more lives are lost to a 2016 study by San Francis- percent in Washtenaw Ministries. “I’m not surprised each day. “We need help,” Kohn-Parrott co-based health care informa(opioids) are getting worse. It’s County. tion firm Castlight Health Inc. now the norm. These drugs said. “Everyone is feeling pressured Employers are worried, and take over your life and it and stressed by the issue and there’s should be, according to a 2016 sur- of creating an employer task force to doesn’t discriminate on who you are a way employers can help, but I don’t know the answer to that right vey by the International Foundation engage the business community to or how much money you make.” of Employee Benefit Plans. And it’s not just abusers and their now. We’re trying to find out.” develop its role in damming the Nasser, who plans to work as a A third of employers in the survey flood of opioid abuse. employers feeling the pain, siding installer for his uncle’s comreported that prescription drug ad“We need to get employers to start Kohn-Parrott said. diction is at least somewhat preva- recognizing a role in the social fabric “Not only are we seeing those ad- pany Michigan Lake Builders when lent among their workforce and that of their community,” Kohn-Parrott dicted to opioids losing their jobs, he leaves rehab in August, said he more than two-thirds believe that said. “A healthy community is a we’re seeing family members losing bears responsibility for his addicsubstance abuse challenges are healthy workforce and that leads to jobs too,” Kohn-Parrott said. “They tion, but believes educated employare missing work to take care of their ers can play a role in stemming the greater now than five years ago. reduced costs for employers.” Action is needed because abusers Wayne County, excluding Detroit, family that is addicted. It’s heart- opioid crisis. “The pills are way worse than herof the prescriptions largely leave em- has seen the largest increase in opi- breaking and only leading to more oin. I definitely would have been ployers holding the bag. The average oid prescriptions in Southeast Mich- dire situations and poverty.” open to a (employer-sponsored) reTragically, the death toll is rising. employer medical costs were nearly igan between 2009 and 2015, rising In 2015, 52,404 people in the U.S. hab program, to anything they oftwice as much for opioid abusers, 51 percent. However, they are on the $19,450, than non-abusers, $10,583, rise everywhere — opioid prescrip- died from drug overdoses, nearly fered really; I was out of control and in 2015, according to the Castlight tions rose 38 percent in Macomb half of which were caused by natural looking for a way out,” he said. “Getreport. County, 35 percent in Livingston and synthetic opioids, according to ting locked up was a blessing. I nevBy contrast, healthcare costs for County, 34 percent in Oakland the Centers for Disease Control and er wanted to live like this. I’m a hard employed smokers, who have higher County and 22 percent in Washten- Prevention. In Michigan, 1,981 peo- worker and I’ve changed the way I ple died from drug overdoses in think about life. I hope that’s rates of lung disease, heart disease, aw County. 2015, up 13.5 percent from 2014, ac- enough.” cancers and other smoking-related Dustin Walsh: (313) 446-6042 cording to the latest available state illnesses cost employers $2,055.77 Risk factors Twitter: @dustinpwalsh data. more than nonsmokers, according The average opioid abuser is oldto a 2013 study by peer-reviewed journal Tobacco Control. Add in pro- er, lower-income and in pain, acduction loss from smoke breaks and cording to the Castlight study. Opioid prescribing peaks in the the total cost to employers is $5,816, well below the $8,800 in associated 45-64 age group, due in part to in- These companies have significant mention in this week’s Crain’s Detroit Business: health care-only costs of opioid creasing prevalence of chronic pain 5 General Motors Co. 19 with age, according to a recent CDC Amazon abusers, according to the study. Castlight Health Inc. 18 Honigman Miller Schwartz and Cohn LLP 8 Yet employers are unprepared for report. Opioid abusers most commonly Consumers Energy the swelling costs. Currently only a 1 Meadowbrook Country Club 3 quarter of employers have conduct- see doctors for issues relating to Daqri 12 Michigan Biomass 16 ed a prescription drug claims analy- joint, neck, abdominal and back Dickinson Wright PLLC 8 Southwest Solutions 4 sis to identify possible abuse, ac- pain, according to the study. Age 9 United Shore Financial Services LLC 3 also appears to play a role. The opi- DTE Energy Co. cording to the IFEBP survey. Kate Kohn-Parrott, president and oid abuse rate is nearly four times Environmental Law and Policy Center 16 White’s Bridge Hydro Co. 1 CEO of the Greater Detroit Area Health Council, said employers must start realizing the threat to their business that they are, unfortunately, perpetuating. “At one level, employers are paying for the drugs and when people get addicted, they don’t come to work,” she said. “Most (employers) don’t realize they are actually paying for their employees’ decline in productivity. We have to get education into the employer network.” The GDAHC is in the early stages

INDEX TO COMPANIES

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 2 4 , 2 0 1 7

THE WEEK ON THE WEB

RUMBLINGS

GM scraps portions of RenCen project

GOP strategist buys talk radio stations

JULY 14 - 20 | For more, visit crainsdetroit.com

eneral Motors Co. is not moving forward with one of the more eye-catching portions of its 120,000-square-foot addition and renovation of its world headquarters, the Renaissance Center in downtown Detroit. The canceled plans for the automaker’s property include the 70-foot by 80-foot LED wall that was to encase the Detroit People Mover station at the RenCen, which is 5.5 million square feet. “We are expecting to complete the current renovations underway in the Renaissance Center, on the central space known as GM World, by the end of 2017,” Afaf Farah, Chevrolet executive and marketing communications manager, said in an email. “We have put the exterior updates and previously planned interactive experiences on hold. We will continue to evaluate the need for additional updates to the building and make the appropriate changes to support business needs.” She declined to elaborate on why part of the project is being scrapped. “All I can say is that we have decided to focus our efforts on successfully completing the renovation project that is currently underway, by the end of 2017. And that we evaluate large investments on a regular basis and have decided not to move forward with the interactive experience and exterior update at this time.” The renovation and addition were announced in January 2016. Turner Construction, which has an office in Detroit, is the general contractor on the project, while the local office of Los Angeles-based CBRE Inc. is the property manager for the RenCen. The architecture firms on the project are Neumann Smith Architecture, with offices in Detroit and Southfield, and EWI Worldwide, which has an office in Farmington Hills.

BUSINESS NEWS Farmington Hills-based wholesale insurance broker and underwriting manager Burns & Wilcox has extended its sponsorship deal with 2012 U.S. Open winner Webb Simpson. J Detroit’s startup community has grown 50 percent in the past three years, the 2017 Detroit Entrepreneurial Study found. J About 30 vehicles were destroyed in a blaze last Tuesday that damaged much of the service area at the Buff Whelan Chevrolet dealership in Sterling Heights. J Comerica Bank is putting its branding on a new club and set of suites inside Ford Field. J The Lions and Chicago-based beer giant MillerCoors inked a multiyear naming rights deal for a 200-person private lounge space in Ford Field. J

GENERAL MOTORS CO., NEUMANN/SMITH ARCHITECTURE, EWI WORLDWIDE

GM has put plans on hold for a 70-foot by 80-foot LED wall encasing the Rennaisance Center’s Detroit People Mover station.

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

5,100 square feet

The size of the “largest seamless centerhung system in the world,” which Daktronics Inc. is installing in Little Caesars Arena.

$5.4 billion

The total cost of real estate development and redevelopment projects underway or proposed in and around downtown Detroit over the next three years.

The number of years since Detroit declared bankruptcy to shed $7 billion in debt owed to creditors and retirees. Huron Capital Inc.’s fire detection and security services company, Sciens Building Solutions, has acquired a majority share of California-based Sabah International Inc. J Layoffs and management changes at Detroit Medical Center continue this year as 14 nurse practitioners and physician assistants were laid off and another eight open positions will be unfilled. J Comcast Corp. is launching its new internet of things service in Detroit over the next few months as part of a larger rollout of the technology to 12 major markets in the country. J Global autonomous vehicle manufacturer Navya Inc. is establishing an assembly plant in Saline — its first in North America. J Auburn Hills-based turbocharger and emissions system supplier BorgWarner Inc. has agreed to buy Sevcon Inc. for about $200 million. J New Order Coffee opened its flagship café last Wednesday in Detroit’s Midtown at 3100 Woodward Ave. J The Detroit Lions will wear four different uniforms this coming season: The new home and away uniforms the team unveiled in April, as well as throwback and new color J

rush uniforms. More than 135 Detroit-area businesses have been chosen as finalists to compete for a share of $400,000 in grants in the fourth NEIdeas small business challenge. J The metro Detroit housing market continues to favor sellers as low inventory drives up prices, according to data from Farmington Hills-based Realcomp Ltd. II. J Ford Field is on schedule to finalize $100 million in renovations by Aug. 1, in plenty of time for the Detroit Lions’ first preseason home game Aug. 19. J Tony Hawk is helping design a skate park, Wayfinding, which will be temporarily installed at Bedrock LLC’s future Monroe Blocks development. It will open Aug. 16. J Comerica Park transformed into a soccer pitch for an ICC match that could help Detroit’s case as Major League Soccer gauges the market’s thirst for soccer. J Downtown Detroit’s most prominent buildings are only 7.5 percent vacant, according to the annual Skyline report by Chicago-based JLL. J The state of Michigan is dropping charges against 186 people accused of illegally collecting unemployment benefits while it conducts a comprehensive review. J

OTHER NEWS Dlectricity is ready to light up Detroit again, with the nighttime Woodward corridor event set for two days in September after a two-year hiatus. J The Belle Isle Conservancy is seeking design ideas for an installation on the island park commemorating Detroit’s 1967 civil unrest. J Detroit businessman John E. James is pressing forward with a campaign for the Republican nomination for the U.S. Senate in 2018, highlighting his experience in the supply chain industry. J A splash pad will replace the longclosed water slide on Belle Isle under plans being developed by the Belle Isle Conservancy and Michigan Department of Natural Resources. J Detroit’s three casinos have paid approximately $4.5 billion in taxes to the state of Michigan and city of Detroit since the launch of commercial gambling in the city. J

ichigan Republican strategist John Yob has quietly expanded his lucrative political consulting and campaign services business into radio and advertising. Earlier this year, Yob paid $700,000 for three small northern Michigan radio stations that are geared toward conservative talk radio. Yob’s Mitten News LLC bought WJNL on 1210 AM in Kingsley and 101.1 FM in Traverse City as well WJML, which broadcasts from Petoskey at 1110 AM on the radio dial. “Conservative consumers are fed up with the biased news coming out of much of the mainstream media and therefore conservative talk radio is a good investment at this time,” Yob said in an email to Crain's. Yob is CEO of Strategic National Campaign Management, which is headquartered in a downtown Grand Rapids building on Monroe Street that shares the same address as Mitten News LLC. One of his businesses made headlines late last year for the big bucks it raked in during the 2016 election cycle selling and renting voter lists to Republican candidates and campaign committees. Conservative Connector was paid $38 million from 20 different GOP candidates and conservative political action committees that used the firm’s lists for online fundraising, according to Federal Election Commission data compiled by the Center for Responsive Politics. More than $31.4 million — or 82

FACEBOOK

Earlier this year, GOP strategist John Yob paid $700,000 for three small northern Michigan conservative talk radio stations.

percent — of Conservative Connector’s revenue came from the Trump Make American Great Again Committee, a joint fundraising account for Donald Trump’s presidential campaign and the Republican National Committee. The RNC paid Conservative Connector another $3.3 million, FEC records show. Mostly recently, Yob has been spearheading Lt. Gov. Brian Calley’s ballot campaign for a parttime Legislature and running Vesco Oil Corp. executive Lena Epstein’s campaign for the Republican nomination for the U.S. Senate. But in comments to Crain's, Yob talked up his new radio stations and general manager David Barr, who has added Chicago Cubs baseball broadcasts, NASCAR races and conservative firebrand Laura Ingraham since the purchase from Stone Communications. “Programming decisions are made locally by David Barr, an experienced radio industry veteran who I have known for a long time and is doing an excellent job improving the stations,” Yob said.

Motown Museum closer to $50 million goal

he Motown Museum has raised nearly a fifth of its $50 million goal to expand upon the famed Detroit site. The total includes $750,000 from Lear Corp., with $250,000 committed by President and CEO Matt Simoncini last month during the Motown Summer Night’s Dream gala at Lear Innovation Center in Detroit’s Capitol Park. The event raised another $400,000 from attendees. Other contributions to date include a $2 million grant made to the project by the William Davidson Foundation late last month and $6 million from Ford Motor Co. and UAW-Ford announced in mid-November. Unveiled last fall, the 40,000-square-foot expansion will house interactive exhibits, The Ford Motor Company Theater, recording studios, meeting spaces, a cafe and expanded retail.

Motown Records founder Berry Gordy launched his cultural and commercial music empire in 1959 at the site of the museum, which includes Motown studio and Hitsville USA on West Grand Boulevard. Motown hits and stars were created there before it moved to California in 1972. The museum said it expects the expanded campus to have “a transformative impact” on the surrounding Detroit neighborhoods, providing employment, sustainability and community pride, spurring new investment and tourism around it. “Motown music, one of the world’s great brands and such a rich part of Detroit’s heritage,” Simoncini said in a release. “It is important that we preserve the history of Motown in a worldclass setting and keep this important part of the spirit of Detroit alive.”

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