JULY 31 - AUGUST 6, 2017
A sweet remodel for candy company Sanders.
QLine prepares to charge fares.
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Economic Development
‘Good Jobs’ law may hinge on definition of good
By Lindsay VanHulle
Crain's Detroit Business/Bridge Magazine
LANSING — The success of the “good jobs” tax incentive Gov. Rick Snyder signed into law last week will be measured, in large part, by how much a company ends up paying its employees. The incentive is designed to reward businesses willing to pay above-average wages as they hire hundreds or thousands of workers. Yet it’s possible that many new workers might be left out of the higher pay. What companies will have to pay workers hinges on the definition of “prosperity region average wage.” Snyder administration officials confirmed to Crain’s and Bridge that it’s possible for workers at a company receiving incentives to get paychecks far below the regional level if the company’s overall workforce reaches that average. So, for instance, in a region where average hourly pay is $25 an hour, a company could be eligible for the incentive by paying its factory workers under $20 an hour, but could still show that its average pay is above the regional threshold by hiring higher-paid executives. Michigan has 10 so-called prosperity regions carved up across the state, with some having higher-paying jobs than others. To qualify for the tax incentive, a company would have to pay at least the average wage of that region, if not more. As an example, Metro Detroit — Wayne, Oakland and Macomb counties — has the highest average regional wage at $1,117 per week, or $27.93 per hour, according to the Quarterly Census of Employment and Wages, provided to Bridge and Crain’s by the Michigan Economic Development Corp. The data is current as of the third quarter of 2016.
Q&A with Jeff Mason
New MEDC chief offers blueprint for Michigan’s economy By Lindsay VanHulle
LANSING — Jeff Mason’s path back to the Michigan Economic Development Corp. began this past spring with a chance run-in with Doug Rothwell, who heads Business Leaders for Michigan, the state’s business roundtable. Mason was nearly eight years into his role as executive director of the University Research Corridor, leading collaboration among the state’s major research universities — Michigan State University, the University of Michigan and Wayne State University — when Rothwell asked if he was interested in coming back to the MEDC as its CEO.
SEE GOOD JOBS, PAGE 16
SEE MASON, PAGE 16
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Real Estate
Crain's Detroit Business/Bridge Magazine
The rent’s not too damn high
Adjusted for inflation, downtown Detroit lease rates less than they were 22 years ago By Kirk Pinho kpinho@crain.com
The rent is not too damn high — at least from a historical perspective. While downtown office rates have been creeping upward in recent years amid a constriction of available space and more demand in the central business district, tenants are actually paying less per square foot than for most of the last two-plus decades.
The relative bargains are a reminder that the downtown rebound is a somewhat recent and sudden development and suggest that rents still have room to rise. Crain’s analyzed downtown Detroit office rates provided by the Southfield office of Newmark Knight Frank (formerly Newmark Grubb Knight Frank) for each quarter for the last 22 years. Those rates — overall average asking
rate, and the average asking rates for Class A and Class B space — were then adjusted to today’s dollars. Adjusted for inflation, the average office tenant paid a peak price of $34.34 per square foot during the fourth quarter of 2000, 65.5 percent more than the current average rate of $20.76, according to Newmark Knight Frank data. SEE RENT, PAGE 15
Crain’s Fast 50
The fifty fastest growing companies in Southeast Michigan. Pages 8-11
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MICHIGAN BRIEFS Report: Uncompensated care declined by 56% Michigan hospitals are financially stronger under the Affordable Care Act, as measured by a dramatic 56 percent drop in uncompensated care costs from 2013 to 2015 and a commensurate rise in hospital profit margins, according to a new report from the Center for Health Care Research and Transformation in Ann Arbor. The stunning turnaround for hospitals in Michigan and nationally has allowed many to expand their community benefit programs to the public, extend charity care policies to disadvantaged neighborhoods and build up and modernize infrastructure. Much of the gains are attributable to the decisions made in 2013 by the Michigan Legislature and Gov. Rick Snyder to expand Medicaid with the state’s Healthy Michigan Medicaid program. More than 650,000 additional people have joined the Medicaid program since April 2014. An additional 330,000 people have purchased individual health insurance policies on the state Obamacare exchange, with more than 80 percent receiving some form of a federal subsidy to help pay their premiums. “As policymakers debate changes
to the Affordable Care Act and Medicaid, it is important to assess the financial gains that Michigan hospitals have received in the first two years of ACA implementation and the potential losses they could incur with a repeal of the ACA,” the report said. In Michigan, uncompensated care costs dropped from $903 million in 2013 for 104 hospitals to $677 million in 2014 and down to $394 million in 2015, CHRT said. Medicare cost report data was analyzed. Nationally, uncompensated care costs for hospitals decreased by 23 percent from 2013 to 2015. Hospitals in Medicaid expansion states like Michigan enjoyed much sharper deceases, 39 percent, than those in nonexpansion states, which saw only a 4 percent decline. Michigan’s drop in uncompensated care costs was the biggest decline in the nation going back to 2011, CHRT said.
How much is Pure Michigan worth? The state’s tourism arm is looking to hire a company to study the effectiveness of the Pure Michigan ad campaign. The Michigan Strategic Fund last week approved a request from Travel Michigan to seek proposals to study
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the return on investment from the Pure Michigan campaign, as well as the economic effects it drives, from jobs to sales. Travel Michigan, housed within the Michigan Economic Development Corp., previously has had a contract with Toronto-based research firm The Longwoods Group Inc. dba Longwoods International. Its most recent contract with Longwoods ran Dec. 1, 2015, through Nov. 30, 2016, and was worth $229,000, said Michelle Grinnell, a spokeswoman for Travel Michigan. That includes the return-on-investment analysis, as well as a competitive analysis worth $15,000 and an economic impact review worth $65,000 and subcontracted to Wayne,
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Pa.-based Tourism Economics Inc., Grinnell said. That one-year contract is being rebid as a three-year contract with two one-year extension options, she said. It will be bid regularly as it expires. The MEDC said it has had an analysis of the Pure Michigan campaign done since 2006 and last year added the competitor and economic impact analyses, which saved $21,000 and cut down on time spent on the work because two contracts were
combined. The three-year contract is expected to be worth $165,000 per year for three years, ending in the 2020 fiscal year, according to the MEDC, or $495,000 over its duration. The $34 million Pure Michigan program has been a target of critics, including the Midland-based Mackinac Center for Public Policy, which has questioned the methodology Longwoods uses to calculate the campaign’s estimated return on investment.
Correction A story on Page 8 of the July 24 edition under the headline “Automakers need to be ready when licensors come knocking” inadvertently omitted the full name of Detroit-based law firm Dickinson Wright PLLC.
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Retail
Sanders innovates, grows for sweet success By Laura Cassar
After 142 years in business, Detroit-born and Clinton Township-based Sanders is baking up a new growth plan. On tap is remodeling its 70,000-square-foot headquarters and retail store, taking the brand out nationally and tweaking its product line to match tastes and lifestyles that have changed drastically since its soda-fountain heyday. Groundbreaking for the $1 mil-
lion remodeling of its 70,000-squarefoot home base took place in early June and the project is expected to be complete by mid-September, according to company President Ron Rapson. The new retail store will be 30 percent bigger with seating increasing from 10 to 125, and a few workers may be added at the expanded location. “Tours end at the retail store, and it gets hectic,” Rapson said. “The increased seating allows people a
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place to relax and enjoy ice cream, coffee or other treats after the tour.” Sanders, which has been at its present location on Hall Road for 30 years, remodeled the tour facility area of the building last year. The Clinton Township store is open during the work, but tours are being suspended until the project is complete.
The remodeled store will include a fireplace and chocolate waterfalls being created just for Sanders. Customers can also sit and watch chocolate being made at an on-site bakery. SEE SANDERS, PAGE 17
A rendering of a $1 million remodel of the Clinton Township flagship store expected to be completed this fall.
Preparing for fares
Local software firm files suit, says it was double-crossed By Dustin Walsh dwalsh@crain.com
A legal dispute is unfolding in Oakland County Circuit Court between two government software providers, with a local company claiming it was double-crossed by an out-of-state firm. Auburn Hills-based Munetrix LLC filed a lawsuit on July 19, alleging Seattle-based Socrata Inc. purposefully worked with the firm to create a joint bid for a state of Michigan contract only to gather valuable information to submit its own separate bid. Socrata won the contract on its own, bidding significantly less than the joint Munetrix-Socrata bid. Munetrix is suing Socrata for various charges, including breach of contract and fraud. Representatives from Munetrix and Socrata both declined to comment on the ongoing case. The relationship between Munetrix and Socrata began in late 2014 when the two competing companies discussed partnering on a number of government proposals — mainly a proposal to create a financial reporting website for the Colorado Department of Education and another to create a financial accounting reporting website for the Michigan Department of Technology, Management & Budget, Procurement, according to the lawsuit. SEE LAWSUIT, PAGE 15
Detroit’s QLine streetcar will begin charging passengers for rides in 40 days. KURT NAGL/CRAIN’S DETROIT BUSINESS
QLine ridership edges higher as system tries to improve service By Bill Shea bshea@crain.com
Detroit’s QLine streetcar will begin charging passengers for rides in 40 days, and the transit system’s organizers are racing to improve service and ease an expected ridership decline once people have to pay. The streetcar has slowly added riders, and a potentially confusing fare payment system could jeopardize that growth. Excluding its enormous opening
weekend beginning May 12, the $187 million, 6.6-mile Woodward Avenue streetcar line has subsequently averaged 4,800 riders a day — up from initial estimates of 3,300 to 4,000 passengers a day for its first month. Since June 12, the system has averaged 5,150 riders a day, QLine spokesman Dan Lijana said. A report issued by the QLine on Friday says it averaged 6,300 passengers a day during the week of July 12. Those are the most recent
numbers available as gathered by the line’s measuring equipment, which began taking more calibrated measurements after the system’s first month. Rides have been free since service began May 12, and gratis service has been extended twice as organizers worked out kinks such as slow wait times between stations that have fueled user outcry. The subsequent ridership growth is due to Detroit Tigers game crowds
and other downtown events, improved service and regularly running five streetcars instead of four, Lijana said. However, QLine officials expect a drop in ridership when paid fare service begins Sept. 4, but they expect it to recover and reach their budgetary goal of a 5,000-per-day average by the end of 12 months. After five years, the budget calls for an 8,000 rider per day average.
MUST READS OF THE WEEK Education enrichment
Online shopping
DIA, DSO, MOT look at ways to boost arts education in the Detroit schools. Page 4
Amazon’s fulfillment center in Livonia expected to open in time for the holiday rush. Page 5
SEE QLINE, PAGE 18
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Leaders of the Detroit Institute of Arts, Detroit Symphony Orchestra and Michigan Opera Theatre met in June to begin exploring development of interdisciplinary art programs for students in the Detroit public schools.
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DIA, DSO, MOT look at ways to boost arts education in Detroit schools By Sherri Welch
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Three of Detroit’s top cultural institutions are talking about how they can collaborate to strengthen arts education in Detroit public schools. The collaboration, still in its early stages, could add resources to a district that has seen steep cuts in arts programs and only offers them in some schools. Spurred by an unnamed art collector and education supporter, the leaders of the Detroit Institute of Arts, Detroit Symphony Orchestra and Michigan Opera Theatre met in June to begin exploring development of interdisciplinary art programs for students in the district. The three declined to comment on the developing collaboration, citing the early stage of conversations, but DIA Director Salvador Salort-Pons wrote about it in a recent newsletter. The DIA currently provides art activities for about 70,000 students in Wayne, Oakland and Macomb counties each year and hosts field trips to expose the younger generations to its collection, he said. “Now imagine the impact if we combined our work with that of the MOT and DSO into a purposeful strategy with specific goals and measurements to evaluate the progress and effect of such programs on the life of our students.� During their first meeting last month, the three institutions talked about collaborating on programs where music, performing and visual arts would intersect, Salort-Pons said. DPSCD offers arts programs only in select schools, Superintendent Nikolai Vitti said in an emailed statement. “The opportunity moving forward is to develop a comprehensive and districtwide art and music vision to ensure all of our schools and students have access to art and music programming,� he said. Arts education funding is set to decrease by $300,000 in the coming academic year. “The decision to reduce arts funding ... by the previous administration is unfortunate, but we will revisit this decision to ensure all committed art
and music programming is continued and offered next year,� Vitti said. As arts have been cut out of public school budgets over the past 20 years, arts organizations have tried to fill the breach, said Michael Kaiser, chairman of the DeVos Institute of Arts Management at the University of Maryland and the former head of the John F. Kennedy Center for the Performing Arts in Washington, D.C. “The problem is that the experiences of a given child are episodic and not coordinated. So consortia efforts make a lot of sense.� Interdisciplinary arts education programs spurred by the discussions would build on both the DIA activities for youth and programs offered by MOT and DSO. MOT’s current programming includes summer performance camps and school opera workshops. This fall, it’s scheduled to bring touring productions of children’s operas “Rumpelstiltskin� and “La Pizza Con Funghi� to area schools, libraries and community centers. The DSO provides an educational concert series for students, with concerts thematically designed to accompany teacher resources. This fall, it plans to launch the free, entry-level instrument program, the Dresner Foundation Allegro Ensemble, in a Detroit school. And it is planning residencies at Detroit schools where students will create their own operatic piece that relates to the history of Detroit’s Negro League baseball team, the Detroit Stars, with modern-day themes of equity and inclusion as part of the “Take Me Out to the Opera� initiative, MOT’s communications manager Erica Hobbs said in an email. Arts organizations in other parts of the country have had success in bolstering arts education through efforts such as the “Ensuring the Arts for Any Given Child,� a program Kaiser launched in 2009 while at the Kennedy Center. The program brings together arts, education, philanthropic, government and business organizations within a city to develop a plan that ensures access and equity to arts education for K-8 students. “This is larger than focusing on
the curriculum,� said Jordan LaSalle, director of education operations for the Kennedy Center. “It’s really about ... ensuring students have access to arts education across the board and building a strategy around that.� Communities apply to the Kennedy Center for consulting assistance and about $125,000 in funding to support convening a team of about 30 local stakeholders to develop a plan for providing equitable, consistent arts education in a local district. Typically, one or more arts organizations initiate the effort in their community, but the model can also be spurred by schools, a local bank or another organization in the community, LaSalle said. Each community is required to provide a $25,000 match over four years to help support the program. None of the work is meant to replace or supplant arts education provided by certified arts educators in the schools, she said. “The teachers and schools are still considered the anchors of that. It’s looking at strategic partnerships to enhance what the schools are already doing.� To date, the program has helped spur collaborations in 23 cities across 19 states and the Puerto Rico, from large urban districts to small, rural districts. Arts education requirements, especially at the K-8 level, are different across the board in states, cities and even within school districts, LaSalle said. Some districts might not have arts education programmed in a consistent way every year, she said. Others might have a strong focus on music and visual art such as painting, but not offer students access to other performing arts such as theater and dance. Arts education helps student engagement, which in turn improves school attendance, LaSalle said. And research has shown that better attendance leads to higher student achievement and fewer discipline issues, she said. “We make the case that the arts are a civil right and influence children in positive ways.� Sherri Welch: (313) 446-1694 Twitter: @SherriWelch
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Sowerby to join Ancora Advisers, build expansion By Dustin Walsh dwalsh@crain.com
After 19 years at Loomis, Sayles & Co., longtime portfolio manager David Sowerby will join Ancora Advisers LLC to build the Ohio investment advisory firm’s Michigan expansion. Sowerby, 56, will serve as a managing director and portfolio manager at Ancora’s Bloomfield Hills office. Sowerby said his primary objective will be to use his extensive contacts to exDavid Sowerby: pand Ancora’s Ancora has strong services in the Midwest roots. state. “They have a long-term growth strategy in Michigan, and I’m excited to be part of that,” Sowerby told Crain’s. “I’ve had plenty of opportunities over the years for jobs outside of Michigan. But this is my home and Ancora has strong Midwest roots and that’s very important to me.” He said he will also receive an equity stake in Ancora, an employee-owned firm. Ancora is a Cleveland-based family wealth advisory, institutional equity advisory and retirement plan services firm with $5.2 billion in as-
sets under management and roughly 60 employees. “It’s big enough, but still very entrepreneurial,” he said. “Having the chance to offer investment services in my own backyard as an owner of the company; I couldn’t think of anything better.” Sowerby’s long tenure at Loomis Sayles placed him in a variety of senior positions, including his latest role as portfolio manager. Before Loomis Sayles, he served as a senior portfolio manager for Beacon Investment Management Co. in Ann Arbor. Sowerby started his career as an economist for Comerica Bank in 1986. Sowerby has served in several public and institutional roles as well, including 10 years as chairman on the investment advisory committee for the state of Michigan’s $60 billion pension fund. Gov. Rick Snyder appointed Sowerby in 2012 to serve on the executive committee for the Michigan Economic Development Corp. He also serves on the investment committee for Beaumont Hospitals and is the current chairman of the investment committee for Detroit’s general retirement system. Sowerby received the distinguished corporate citizen award in 2002 from Wayne State University and was a Crain’s 40 under 40 award recipient in 1991.
Amazon’s 1-millionsquare-foot Livonia facility, its first fulfillment center in Michigan, will employ about 1,100 and specialize in packing and shipping large items when it opens ahead of the 2017 holiday season.
Amazon’s center in Livonia to open in time for holidays By Annalise Frank afrank@crain.com
Amazon.com Inc.’s first fulfillment center in Michigan is on track to open in time for the winter holiday shopping season, likely around November. The 1-million-square-foot facility in Livonia will specialize in large products, such as mattresses and kayaks. Amazon is hiring about 1,000 employees for packing and shipping and another 100 or so for managerial and supportive positions, said Fred Holwey, a senior operations manager for Amazon who will work out of the new fulfillment center. Holwey led a tour last week of the site under construction at 39000 Amrhein Road, near I-275. Holwey declined to comment on plans for other Amazon fulfillment centers in Romulus and Shelby Township. The Livonia fulfillment center’s impact on Southeast Michigan is better measured in job creation than as an indicator of Amazon’s strategy for de-
livery in the region, Holwey said. Because Amazon orders can be shipped from any of its fulfillment centers — depending on stock and availability — the Livonia facility’s presence won’t necessarily improve shipping times for metro Detroit customers, he said. The facility will ship regionally, but also nationally. However, nearby customers did play a role in the site’s selection. The Livonia site was chosen based on data on shipping costs and customer demand in the area for larger-size items, he said. The building sits on former General Motors Co. property between Schoolcraft Road and Plymouth Road, just southeast of the intersection of I-275 and I-96. Between 30 and 35 companies have been hired and about 500 construction jobs created for the center’s construction, which is being led by Novi-based general contractor Oliver/Hatcher Construction and Development Inc.
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OPINION
The hospital was ‘an island of Policy should support sanity’ during violence of ’67 small renewable firms Editorial
S
ince 1978, federal law has ment. Some generators are required regulated utilities privately owned. Others, such as across the country to buy the waste-to-energy facility in the energy from small renewable pow- Grand Rapids area, are governer generators — hydro plants, bio- ment-owned and depend on paymass, wind generation or other ments for power generation. Pullsources. But it leaves to state regu- ing the plug, so to speak, on those lators — in Michigan, the Public investments could cause real fiService Commission — just how nancial harm. At the very least, the much they’ll have to pay. existing providers might be proAs Crain’s Jay Greene reported tected with higher rates grandfalast week, there’s been an un- thered into a new rate structure. der-the-radar battle over the pricNo one can fault utilities for puring structure. suing business models they believe This week, perhaps today, the work for them. But if Michigan valPSC is expected to unveil a new ues renewable energy sources, it’s rate structure, based on a compli- up to regulators to incentivize becated formula that includes the havior that supports renewables at costs a big utility would avoid by a time when demand for renewpurchasing power generated by able energy is growing. Companies another source. large and small are adopting susSmall producers tainability policies fear the PSC has been Even in a that embrace renewswinging more in the small way, it able sources of powdirection urged by er. A hefty supply of increases Consumers Energy renewable energy Co. — and the new competition, can even be an ecopricing will be so low nomic development which is a that it will effectively tool in attracting put them out of busi- key to new businesses with ness. core sustainability lowering The Michigan rate principles to Michicase is being watched overall costs. gan. across the country This is also an opbecause other energy companies portunity for the big energy comhave the same federal requirement panies that have already embraced and, as in Michigan, many existing a “buy local” philosophy through contracts are expiring. the state-created Pure Michigan So why bother with the small-fry Business Connect program. PMBC producers in the first place if Con- matches big purchasers with sumers, DTE Energy Co. and other smaller sellers of goods and serutilities across the country are pro- vices. Even fast-food giant Mcducing their own renewable ener- Donald’s promotes its “buy local” gy? prowess on highway billboards For starters, even in a small way, that tout their breakfast sandwich it increases competition, which is a eggs come from farms in Michikey to lowering overall costs. Also, gan. money in the existing power sourcWe suspect big energy compaes has already been invested across nies can afford to pay reasonable the state, mostly in smaller com- rates to small renewable power opmunities. In a sense, utility cus- erators and have a marketing strattomers have paid for that invest- egy that makes everyone happy.
The summer of 1967 changed my professional life. I was starting my second year as a nursing student at Henry Ford Hospital School of Nursing when the riots started. That Sunday, my boyfriend Bill and I are at a party in Birmingham. A Lions football game is on TV when the news breaks in: the police raid of a blind pig had sparked violence and widespread looting in areas around the Woodward corridor in Detroit. “That’s near the hospital,” I say to my boyfriend. “I have to get back to the hospital now! They are going to need all the help they can get. Can you drive me back to the student nurses’ dorm?” Driving down Woodward Avenue from the North Woodward suburbs, one of the richest regions in America, to Central Detroit, one of the poorest, is disconcerting on a good day. Today is a nightmare, only real. People are milling everywhere, walking in the street and in and out of stores with broken windows. Folks in the streets seem more intent on looting than paying any attention to us as Bill slowly and carefully drives down the avenue. The Henry Ford Hospital campus takes up an entire square block, with several buildings connected underground by a series of tunnels. Sunday night some of my schoolmates and I cautiously sneak through the tunnel to the clinic building.We find our way to the elevator, take it to the 17th floor and enter the inner sanctum of the doctors’ dining room. This is the first time I had ever been in the infamous doctor’s dining room as a student nurse. Lowly student nurses are never allowed in this hallowed chamber. The Women’s Liberation movement had certainly not penetrated the patriarchal halls of hospitals, still a mixture of military and monastery in 1967. All nurses are expected to stand for attending physicians when they
walk into a room. For a few seconds, we marvel at this posh open space and speak in hushed tones as if we are in church. Then the horror of what’s outside yanks us to the windows like magnets. The view is agonizing to behold. The city I love, the place where I was born and have lived my whole life, looks like it has been bombed, consumed in flames. So much anger exploding. My heart hurts. My soul silently weeps. The National Guard is called into the city within 48 hours and stationed in the hospital parking garage. Tanks patrol the campus perimeter. Snipers shoot at the exterior of the Clara Ford Pavilion. We student nurses must crawl along the floor below the window whenever we approach an outside window. We work 18-hour shifts with six hours rest the entire week. I am assigned to the afternoon and midnight shifts on the cancer floor. I am making my rounds after midnight one night checking on every patient in my care when a gnarled hand snatches my arm. A gaunt, hospital-gowned apparition emerges in the dim light whispering, “I am confused.” The exhaustion and tension of the last week dulls my thinking. This is not a ghost — just poor Mr. Daly who is close to the end and needs comforting. “I know, Mr. Daly,” I say gently, my heart in my throat. “This has been a
confusing time. I am here to protect you. Let me help you get back to bed. I will sit with you until you fall asleep.” I help Mr. Daly back to bed and stroke his head until he sighs, closes his sunken eyes and softly starts to snore. Sitting quietly for a few moments at Mr. Daly’s bedside, I attempt to make sense out of what is happening around me. I ponder the issues of racism and discrimination for the first time in my young life. I certainly know what oppression is as a fledgling professional woman. I instinctively empathize with the expressed anger and despair I witness in the streets. I imagine adding the burden of being black and poor to my existence. I have it easy by comparison. Juxtaposed to the madness in the streets, the hospital is an island of sanity within that sea of erupted anger and despair. We are all shades of skin color, ethnic origin and religion, working together to care for the sick. African American hospital staff risk their lives to get to work to take care of their patients. We all focus on what we have in common and not our differences — which in the end are really not all that important. For a young, impressionable student nurse, this is a vision of what could be and the best that humanity has to offer. We share a commitment to a higher good: the healing of the sick, the protection of the vulnerable. Love’s truest expression for others shines like a beacon in the chaos. I dedicate myself then and there in a private talk with God to healing not just bodies but souls. I make a pact with God that I will do my part to bridge the gap between people using “Love for All” as my building material, not judgment or skewed rules based on maintaining the status quo. The experience of the riot infused a new strength of purpose in my internal fabric. This was my first step to self-liberation that took many years to achieve.
clear the NTC books were audited by any outside firm. If so, shame on Chrysler. This clearly is why an FCA finance employee, also the controller for the NTC, was also indicted. Michigan lawmakers voted in December 2012 to make Michigan a rightto-work state, which means no one can be forced to join a union to work somewhere if they choose not to. Did that have an effect? I'd be the first to admit I don't know. Whether it changed anyone’s mind about locating in Michigan or any had other impacts on existing employers' bottom lines, it's not clear. And the unions aren't saying if their
dues-paying membership has dropped, either. But with these indictments, the UAW will have to work even harder to convince employers and potential members that the UAW is a good thing. After decades of working closely with auto companies and other employers for positive impacts, it's a shame to see the union's reputation being smeared by one of its own executives, even though he died before the alleged scheme was publicized. So far, it’s only an accusation, but it’s a pretty amazing one. I can only imagine that seats for this trial are going fast.
OTHER VOICES Dottie Deremo
Deremo is principal partner and CEO of The Deremo Group and former CEO of Hospice of Michigan.
A way to erode trust There has always been a bit of distrust between the UAW and car companies. “Distrust” is an improvement since the early days of the industry when union attempts to organize the auto companies met with violence. Now, the union and companies sometimes even win praise for cooperation. But last week’s criminal charges involving a UAW executive, his widow and an executive from Chrysler has to increase the resolve of every company that they don’t want anything to do with the United Auto Workers. Unfortunately for the UAW, it is in the midst of an organizing drive in a
KEITH CRAIN Editor-in-chief
plant in Mississippi, and this can only cloud the outcome of that election. The scenario is remarkable. Prosecutors allege two archenemies conspired together with the wife of the
UAW official to misuse hundreds of thousands of dollars earmarked for union members' training and education. The scheme allegedly was accomplished by using the joint UAW-FCA training nonprofit organization, NTC. I don’t know who is doing the auditing of Chrysler these days, but if I were the chief financial officer, I would be demanding a refund for any company dollars that went into NTC for the years this scheme went on. After all, this is one of the most important results of any audit: Check and make sure that no one is “cooking the books” or stealing from the company. But it's not even
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In carrying on family legacy, Frank Couzens Jr. was inspiration Baby boomers are supposedly reinventing retirement — working longer to grow the nest egg or taking on “encore” careers to pursue a passion. Articles and seminars on these themes abound. Example: Inforum, the leading women’s organization in Southeast Michigan, has a program in September titled “Reinventing ... Not Retiring.” A new trend? That idea might have amused Frank Couzens Jr., who died last week at 93. Couzens, who hailed from an iconic Detroit family that has two Detroit Frank Couzens mayors in its lineage, officially retired from Manufacturers Bank in 1989, before its merger with Comerica Bank. But his career was far from over. It really took a stroke late in life to begin to slow him down. A longtime board member of many nonprofits, his retirement from his “day job” afforded him the opportunity to step in to lead some of those nonprofits on an interim basis. Four years after he retired from the bank, he served as interim president of the College for Creative Studies, giving the school breathing room until it landed Rick Rogers as its president in 1994. (Keith Crain, chairman of Crain Communications, chaired the CCS board then — and now.) Later, he filled a key interim role at a hospital foundation board. And he was a longtime director of Jacobson’s, the Jackson-based retailer. Edward “Chip” Miller, a close friend who worked with Couzens at Manufacturers Bank, recalls that Couzens filled multiple roles at the bank, building its trust department to be one of the largest in the country among regional banks before moving into marketing. “Under his watch, we standardized all the marketing materials and they came up with the trapezoid” — the same logo Comerica used for years. Miller recalls his first meeting with Couzens was a telephone call as a young trainee at a branch in Grosse Pointe. One morning, he answered the phone before the bank had opened for business. “Are you in distress?” the caller asked. “Excuse me?” Miller answered. “Are you in distress?” the male voice repeated. “Your flag is flying upside down.” “Frank was a stickler for doing things right. And he was a naval officer. Whoever put the flag up that morning, flew it upside down.” In retirement, he continued to support two nonprofits with long relationships with the Couzens family: Children’s Hospital of Michigan in Detroit and Oakland Housing Inc., founded in 1935 by his grandfather, James Couzens, by then a U.S. senator. The patriarch had also been an early part of Ford Motor Co., and the idea behind the housing nonprofit
A longtime board member of many nonprofits, his retirement from his “day job” afforded him the opportunity to step in to lead some of those nonprofits on an interim basis. MARY KRAMER Group Publisher
was to build affordable homes for auto workers, recalls Miller. “They’d build the homes and sell them to auto workers on a land contract,” Miller said. “They made it affordable, and they made sure the
neighborhoods they invested in were well-maintained. For probably 50 years, Frank was the driving force behind this; he was carrying on the legacy of the family.” Like Oakland Housing, James Couzens had a similar and lasting impact on Children’s Hospital,
whose CEO Luanne Thomas Ewald noted this week that it was James Couzens’ $1 million gift in 1922 that transformed a predecessor, Children’s Free Hospital, into Children’s Hospital of Michigan. Later and larger gifts created a research fund to improve the “health and welfare
of children.” Again, it was the family legacy that in part inspired Frank Jr., who became a trustee in 1972. His daughter, Carol Marantette, is a trustee today. Couzens was a class act whose example can inspire — whether you’re wealthy or not. Mary Kramer is publisher of Crain’s Detroit Business. Catch her take on business news at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760 and in her blog at www.crainsdetroit.com.
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MAKE SMART DECISIONS.
Investing in your company’s talent is one of the smartest decisions you can make. Crain’s Leadership Academy aims to aid in this mission by helping rising leaders identify and build on their leadership strengths.
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SPECIAL REPORT: FAST 50
On the grow Crain’s Fast 50 showcases today’s economic trends
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ing, team allel The with 2016 2013 base od. Welcome to Crain’s Fast 50, our annual look at companies that are showing the world how to grow. In the ranks of this year’s list, based on results for the past three years, you’ll find evidence everywhere of some of the biggest business and economic trends of the day: a rebound in construction as real estate prices rise and downtown Detroit sees a resurgence; rising automotive sales that spur the local economy; and bold acquisitions that offer overnight growth. We don’t pick the companies by a pure percentage growth rate alone. Instead, we rank companies by percentage revenue growth between 2013 and 2016, and also by the dollar amount of revenue growth. The two rankings are then added together to create the list. The lower the number, the higher the final ranking. And because revenue growth isn’t everything in business, we also ask companies to certify that they are profitable. What follows are profiles of the 50 highest-ranking companies. The data that backs the rankings is on the list on Pages 8-11.
iStock By Rachelle D’Amico
Special to Crain’s Detroit Business
1|Meridian Health Plan Detroit David Cotton, CEO
Revenue 2016/2013:
$3,732,006,583/$1,168,214,250 Revenue percent change: 219 What it does: Government health insurance programs. Reason for increase: Growth has been driven by Medicaid health plans in Michigan and Illinois, expanding into more counties through their marketplace product, MeridianChoice, as well as gaining Medicare members in Michigan, Illinois and Ohio through MeridianCare. Meridi-
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2|Diplomat Pharmacy Inc. Flint Phil Hagerman, chairman and CEO Revenue 2016/2013:
$4,410,388,000/$1,515,139,000 Revenue percent change: 191 What it does: A nationwide specialty pharmacy. Reason for increase: Grew organically from existing drugs, won access to specialty drug approvals and grew through acquisitions. In October 2014, the company began trading on the New York Stock Exchange under
the symbol DPLO.
3|Barton Malow Co.
Southfield Ryan Maibach, president and CEO Revenue 2016/2013:
$2,425,535,750/$1,145,506,398
Revenue percent change: 112 What it does: General contracting,
construction management, design/ build, engineer-procure-construct, integrated project delivery, self-perform services: civil, concrete, rigging and interiors. Reason for increase: Benefited from the uptick in the economy and the rebound of manufacturing nationwide, which includes building proj-
ects with General Motors, Chrysler and Ford. Notable projects include building the $400 million redevelopment of Dayton International Speedway, Michigan State University’s $680 million Facility for Rare Isotope Beams, $150 million DMC Children’s Hospital of Michigan patient tower, building several windfarms and serving as a managing partner of the construction team that is developing Little Caesars Arena, an estimated $863 million project.
$1,581,932,000/$683,977,677 Revenue percent change: 131 What it does: Automotive supplier. Reason for increase: Organic revenue growth, as well as a $175 million acquisition of Takata Corp. subsidiary Irvin Automotive Inc. Footnote: Piston Group includes Piston Automotive, Detroit Thermal systems, Airea and the acquisition of Irvin Automotive.
5|Sun Communities Inc.
4|Piston Group
Southfield Gary Shiffman, chairman and CEO
Revenue 2016/2013:
Revenue 2016/2013: $833,778,000/$415,222,000 Revenue percent change: 101
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SPECIAL REPORT: FAST 50 What it does: Real estate operations. Reason for increase: Growth from more than $4 billion in acquisitions, including a $1.7 billion acquisition of Carefree Communities in 2016. The company also acquired the Green Courte Partners LLC portfolio of 59 properties in 11 states, including Michigan, for $1.32 billion in 2014.
Revenue 2016/2013:
$402,800,000/$221,000,000 Revenue percent change: 82 What it does: General contractor and construction manager. Reason for increase: Strong growth bolstered by an active manufacturing market and increased capacity in the energy and petrochemical sectors.
6|General RV Center Inc.
12|H.W. Kaufman Financial Group Inc./ Burns & Wilcox Ltd.
Wixom Robert Baidas, CEO; Loren Baidas, president
Farmington Hills Alan Jay Kaufman, chairman, president and CEO
Revenue 2016/2013:
$707,000,000/$355,000,000 Revenue percent change: 99 What it does: Recreational vehicle dealership. Reason for increase: Growth stems from increased market share, store expansions and increased demand in the RV marketplace overall, Baidas said.
7|United Shore Financial Services LLC Troy Mat Ishbia, president and CEO Revenue 2016/2013:
$857,000,000/$449,137,000
Revenue percent change: 91 What it does: Mortgage banking. Reason for increase: Invested in hir-
ing, with a goal of adding 20-50 new team members each month, has paralleled growth in loan production. The lender set a company record with $23 billion in loan volume in 2016 (a 125 percent increase from 2013), while growing its employee base by 110 percent in the same period.
Sun’s communities include the Lost Dutchman in Arizona. Business (in partnership with Brinker Group), General Services Administration Levin Federal Courthouse alteration and Detroit Medical Center Sports Medicine Institute.
10|Loc Performance Products Inc. Plymouth Louis Burr, president Revenue 2016/2013:
$120,300,000/$42,000,000 Revenue percent change: 186 What it does: Final drive, suspension and track systems for Army combat vehicles. Reason for increase: In 2014, Loc was
SUN COMMUNITIES INC.
awarded a contract worth up to $161.6 million from the U.S. Army TACOM Life Cycle Management Command in Warren to provide new shock absorber kits, track kits and suspension support system components for as many as 1,080 Bradley Fighting Vehicles. Also diversified into new commercial markets and developed several new customers including Caterpillar Inc., General Electric Co. and Continental AG, Burr said.
11|Aristeo Construction Co.
Revenue 2016/2013:
$2,050,000,000/$1,425,000,000 Revenue percent change: 44 What it does: Provides insurance services including distribution, brokerage, underwriting, reinsurance, real estate, premium financing, inspections, audits, risk management and third-party claims administration. Reason for increase: Strategic acquisitions, organic growth and recruiting and retaining talent.
13|PrizeLogic LLC Southfield Keith Simmons, CEO Revenue 2016/2013:
Livonia Joseph Aristeo, president
$69,000,000/$18,248,000
Revenue percent change: 278
What it does: Online promotion execution for Fortune 100 brands. Reason for increase: Growth from brand promotional work for Fortune 100 companies, including Facebook Live events, loyalty mobile apps and promotional work for the Super Bowl, Simmons said. Footnote: The Charlotte, N.C.based private equity firm Pamlico Capital took majority ownership stake in the company on June 30, 2016.
14|Harvest-Sherwood Food Distributors Detroit Earl Ishbia, co-CEO; Jay Leavy, co-CEO Revenue 2016/2013:
$2,154,829,725|$1,539,881,285 Revenue percent change: 40 What it does: Wholesale food distributor. Reason for increase: Growth from acquisitions. The company has also seen growth from servicing independent and regional chain grocery stores, and expanding product lines, Ishbia said. Also saw growth in the food service business. Footnote: Formerly Sherwood Food Distributors LLC. Merged with San Diego-based Harvest Food Distributors in a deal that closed April 3. They are now both owned and operated by Sand Dollar Holdings Inc. SEE FAST 50, PAGE 10
Immigration Experience
8|U.S. Farathane
In Your Corner.
Auburn Hills Andrew Greenlee, president and CEO
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Revenue 2016/2013:
$750,000,000/$402,000,000 Revenue percent change: 87 What it does: Plastic injection molder, extruder, thermal compression molder. Reason for increase: Acquired operations in Mexico and China, grew and expanded product lines, and a strong automotive sector have all contributed to growth. The company has also seen strong organic growth, Greenlee said.
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9|The Christman Co.
Detroit Ronald Staley, senior vice president, Southeast Michigan operations Revenue 2016/2013:
$100,047,000/$15,583,000
Revenue percent change: 542 What it does: Construction manage-
ment, general contracting, design/ build, facilities planning and analysis, program management, real estate development, self-perform skilled construction trades. Reason for increase: Continuing to benefit from the uptick in the economy during Detroit’s rebirth. The company has been awarded projects that include Little Caesars World Headquarters Campus Expansion, Wayne State Mike Ilitch School of
First Tier Ranking in Labor Law – Management
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SPECIAL REPORT: FAST 50
FAST 50
Revenue 2016/2013:
Livonia Steven Greenawalt, CEO
$969,200,000/$682,100,000 Revenue percent change: 42 What it does: Financial institution. Reason for increase: Growth in consumer loan originations.
Revenue 2016/2013:
19|Agree Realty Corp.
FROM PAGE 9
15|Alta Equipment Co.
$330,000,000/$208,000,000
Revenue percent change: 59 What it does: Heavy construction
equipment, material handling equipment, industrial equipment, cranes. Reason for increase: Organic growth from opening new facilities in Michigan, Illinois and Indiana. Also saw growth from acquisitions and increased customers.
16|The Colasanti Cos. Macomb Township Angelo Colasanti, CEO; Carey Colasanti, president Revenue 2016/2013:
$135,000,000/$69,700,000
Revenue percent change: 94 What it does: General contracting
and construction management and design/build; self-perform concrete services. Reason for increase: Strong growth in Detroit and Florida. Invested in marketing efforts and diversified into different markets. Major projects include the Z Lot parking deck in Detroit, a $40 million project, as well as the Star Wars-themed land for the Walt Disney Co. theme park in Orlando, Fla.
17|Domino’s Pizza Inc.
Ann Arbor Patrick Doyle, president and CEO Revenue 2016/2013:
$2,472,628,000/$1,802,223,000 Revenue percent change: 37 What it does: Restaurant franchisor. Reason for increase: Store counts have increased by more than 3,900 over the past five years, with the company posting global retail sales of $10.9 billion in 2016, with $5.9 billion in digital sales. This has helped to drive a stock price increase of over 2,000 percent since 2010.
18|Credit Acceptance Corp. Southfield Brett Roberts, CEO
Farmington Hills Joey Agree, CEO
Revenue 2016/2013:
$91,527,000/$43,517,664 Revenue percent change: 110 What it does: Real estate investment trust. Reason for increase: Invested more than $600 million in development and acquisitions of net lease retail, which includes more than 408 properties in more than 43 states, Agree said.
19|Acro Service Corp.
Livonia Ron Shahani, president and CEO Revenue 2016/2013:
$331,767,443/$216,800,000 Revenue percent change: 53 What it does: Staff augmentation, outsourcing and IT and engineering consulting, application development and enablement, relational database design and development, Web design and development. Reason for increase: Organic growth from its staffing services. The company has also seen significant growth from its software services, including its time keeping software that helps manufacturing plant managers manage staff by providing real-time information about where workers are and how many are needed on a manufacturing line.
21|Kirco Manix
Troy Douglas Manix, president Revenue 2016/2013:
$96,000,000/$47,000,000 Revenue percent change: 104 What it does: Design and build, construction management. Reason for increase: Significant increase in the corporate construction market, as well as growth from diversifying into the senior living market, Manix said. Significant projects include Dow Chemical Company headquarters in Midland.
22|Jim Riehl’s Friendly Automotive Group Inc.
Warren James Riehl Jr., president and CEO Revenue 2016/2013:
$283,651,939/$184,504,880 Revenue percent change: 54 What it does: Automobile dealership. Reason for increase: Increased vehicle sales.
23|LaFontaine Automotive Group
Highland Township Michael LaFontaine, chairman/owner; Maureen LaFontaine, president/owner Revenue 2016/2013:
$816,787,399/$577,124,039
Revenue percent change: 42 What it does: Automobile dealer-
ships.
Reason for increase: Acquired eight new dealership locations and increased vehicle sales each year.
24|Ramco-Gershenson Properties Trust
Farmington Hills Dennis Gershenson, president, CEO Revenue 2016/2013:
$260,930,000/$170,068,000
Revenue percent change: 53 What it does: Real estate investment
trust.
Reason for increase: Acquired more
than $600 million in regional, dominant, and in-fill shopping centers throughout key growth markets in the top 40 metropolitan statistical area.
24|Advantage Management Group Inc-Advantage Living Centers Southfield Reginald Hartsfield, owner; Kelsey Hastings, owner Revenue 2016/2013:
$103,263,000/$53,000,000 Revenue percent change: 95 What it does: Skilled-nursing homes, assisted living. Reason for increase: Growth from acquisitions, including the purchase of two nursing facilities from Henry Ford Health System for $12.8 million in 2015, which almost doubled revenue during that year.
26|The Suburban Collection
Troy David T. Fischer, chairman and CEO Revenue 2016/2013:
$2,130,409,963/$1,599,322,268 Revenue percent change: 33 What it does: Automobile dealerships. Reason for increase: Increase in new and pre-owned vehicle sales. Also saw growth from adding seven dealerships.
26|National Food Group Inc. DOMINO’S PIZZA
Domino’s Pizza Inc. store counts have increased by more than 3,900 over the past five years.
Novi Sean Zecman, president and CEO Revenue 2016/2013:
The Deshler Group completed a renovation of its Livonia headquarters last year. It also closed in 2016 o fellow Livonia company MSD Stamping Co. $113,393,000/$60,493,000 Revenue percent change: 87 What it does: Wholesale and retail food manufacturing and distribution, commodity processing. Reason for increase: Continuing to expand in key markets that include: correctional facilities, K-12 schools, health care, universities, nonprofits and entertainment. In 2016, K-12 school sales were up more than 40 percent due to the rebranding of its Zee Zee food product line.
28|Gentherm Inc.
Northville Daniel Coker, president and CEO Revenue 2016/2013:
$917,600,000/$662,082,000 Revenue percent change: 39 What it does: Global developer and marketer of thermal management technologies for a broad range of heating and cooling and temperature control applications. Reason for increase: Growth from acquiring health care and industrial warming and cooling product maker Cincinnati Sub-Zero Products Inc. in 2016. Growth has also been driven by an increase in product demand, including automotive seat heaters and steering wheel heaters.
29|Deshler Group Inc.
Livonia Robert Gruschow, president, CEO Revenue 2016/2013:
$135,334,000/$76,634,608
Revenue percent change: 77 What it does: Industrial manufactur-
ing group, incorporating fabrication, design, assembly, logistics, transport and information technology. Reason for increase: Growth from its logistics, assembly and manufacturing operations, and from expanding into new programs and diversifying its client base within the automotive sector, as well as re-shoring business
from overseas. Also saw growth from the 2016 acquisition of Livonia-based MSD Stamping, which added about $15 million in annual sales.
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30|Multi-Bank Securities Inc.
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Southfield David Maccagnone, CEO Revenue 2016/2013:
$75,505,258/$38,114,000
Revenue percent change: 98 What it does: Independent invest-
ment firm that specializes in the sales, trading and underwriting of institutional, fixed-income securities. Reason for increase: Growth from its proprietary online investment platform, introduced in 2014. The firm has also expanded from four offices in 2012 to 12 offices today.
31|Shaw Electric Co.
Southfield Robert Minielly, president and CEO Revenue 2016/2013:
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$76,000,000/$39,000,000 Revenue percent change: 95 What it does: Electrical and teledata contractor. Reason for increase: Increased annual revenue by expanding services, including structured cabling. Also expanded business in the health care, research and development and higher education markets.
32|The Macomb Group Inc. Sterling Heights William McGivern Jr., CEO; Keith Schatko, vice president Revenue 2016/2013:
$200,000,000/$131,900,000 Revenue percent change: 52 What it does: Distributor of pipe,
Part inclu
SPECIAL REPORT: FAST 50 34|BorgWarner Inc.
Auburn Hills James Verrier, president and CEO Revenue 2016/2013:
$9,071,000,000/$7,436,600,000 Revenue percent change: 22 What it does: Engineered components and systems for powertrain applications; develops products to improve fuel economy, reduce emissions and enhance performance. Reason for increase: Strong global demand for clean and efficient propulsion technologies for combustion, hybrid and electric vehicles.
35|Inteva Products LLC
Troy Lon Offenbacher, president, CEO and founder Revenue 2016/2013:
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valves, fittings, heating and cooling, control and instrumentation, boilers, pumps repair, steam products, sanitary piping products, fire protection and more. Reason for increase: Acquisitions, including the 2016 purchase of Mechanical Supply Co., a North Carolina-based distributor of pipe, valves and fittings to commercial and industrial customers.
33|SmithGroupJJR Inc.
Detroit Jeffrey Hausman, Detroit office director; Michael Medici, president and managing partner Revenue 2016/2013:
$235,940,230/$162,972,640 Revenue percent change: 45 What it does: Architecture, engineering and planning. Reason for increase: Awarded largescale projects that include the renovation of General Motors Co. Design Dome, based in Warren, Wayne State University’s Mike Ilitch School of Business and the Little Caesars Arena project.
$2,800,000,000/$2,200,000,000 Revenue percent change: 27 What it does: Global tier-one automotive supplier of interior systems, closure systems, roof systems and motors and electronics. Reason for increase: Organic growth from increasing its customer base globally. Also saw growth from adding new sites and upgrading existing sites.
Revenue percent change: 23 What it does: Automotive supplier. Reason for increase: Growth is fueled
by strong production volumes in the North American and Asian markets. Business diversification, fueled by growth in key global vehicle segments, such as crossover vehicles, have also contributed.
38|Amerisure Mutual Insurance Co.
Farmington Hills Gregory Crabb, president and CEO BORGWARNER INC.
Revenue 2016/2013:
$835,900,000/$639,576,568 Revenue percent change: 31 What it does: Property and casualty insurance company. Reason for increase: Growth from the construction industry market, particularly in workers compensation. Also saw growth from independent insurance agency distribution partners.
39|Amerilodge Group LLC Bloomfield Hills Asad Malik, president and CEO Revenue 2016/2013:
Detroit Cynthia Pasky, president and CEO
$49,605,282/$24,300,000 Revenue percent change: 104 What it does: Hospitality. Reason for increase: Aggressive development of new hotels, as well as active sales of existing hotels, Malik said.
Revenue 2016/2013:
40|Kasco Inc.
36|Strategic Staffing Solutions Inc.
$330,000,000/$238,000,000 Revenue percent change: 39 What it does: Consulting and staff augmentation services, vendor management programs, executive search services, call center technology and a domestic IT development center. Reason for increase: Company would not comment on specifics, but the company has grown in the past through acquisitions, opening new offices, and servicing Fortune 500 companies.
37|American Axle & Manufacturing Holdings Inc. Detroit David Dauch, chairman and CEO Revenue 2016/2013:
$3,948,000,000/$3,207,300,000
Royal Oak Michael Engle, vice president Revenue 2016/2013:
$80,600,000/$45,175,000 Revenue percent change: 78 What it does: Construction management, design/build, construction program administration. Reason for increase: Growth has stemmed from the demand for construction, mainly in the institutional and health care industries, as well as multi-residential apartment buildings. Major projects include Beaumount Health System’s Beaumont Proton Therapy Center in Royal Oak and Starkweather Luxry Lofts in Plymouth.
41|National Business Supply Inc.
Troy Richard Schwabauer president
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$138,000,000/$91,300,000 Revenue percent change: 51 What it does: Commercial furnishing, audiovisual distributor. Reason for increase: Expanded into new product and service offerings, including audio visual solutions and interior construction services.
42|Bob Jeannotte Buick GMC Inc. Plymouth Robert Jeannotte, CEO Revenue 2016/2013: GENTHERM
Part of Gentherm’s growth has been driven by an increase in product demand, including automotive seat heaters and steering wheel heaters.
$69,000,000/$41,000,000 Revenue percent change: 68 What it does: Automobile dealership.
BorgWarner saw strong global demand for clean and efficient propulsion technologies for combustion, hybrid and electric vehicles. Reason for increase: Company did not comment, but sales in the automotive sector have grown with the economy.
42|Contract Direct
Southfield Elizabeth Hammond, president Revenue 2016/2013:
$38,550,539/$18,649,169 Revenue percent change: 107 What it does: Facility maintenance services company. Reason for increase: Strong growth from the company’s food division. New services, such as silo and oven cleaning for food manufacturing plants, have also contributed to growth.
44|The Ideal Group Inc.
Detroit Frank Venegas Jr., chairman, CEO Revenue 2016/2013:
$307,027,000/$231,000,000
Revenue percent change: 33 What it does: General contracting,
specialized miscellaneous steel manufacturing and distribution of protective barrier products, global supply chain management, other. Reason for increase: Growth from the demand in the construction and automotive industry. Ideal shield products have also seen significant growth from product expansion with major corporations, including Target, throughout North America.
45|Hatch Stamping Co.
Chelsea Daniel Craig, COO and president Revenue 2016/2013:
$186,583,000/$133,000,000
Revenue percent change: 40 What it does: Manufacturing. Reason for increase: Expanding into
new market segments, including roofing and structural components. The company also opened a plant in Tennessee, and acquired two Tennessee-based companies, which increased its customer base and helped fuel growth in existing markets. Additionally, the company expanded operations in Mexico and opened a China location in 2016.
46|Buff Whelan Chevrolet Sterling Heights Kerry Whelan, president Revenue 2016/2013:
$224,834,634/$162,758,136
Revenue percent change: 38 What it does: Automotive dealership
sales and service.
Reason for increase: Increased vehi-
cle sales.
47|Reliable Software Resources Inc.
Northville Ravi Vallem, CEO; Sridhar Kodati, CFO; Venkat Gone, president Revenue 2016/2013:
$63,180,078/$38,000,000 Revenue percent change: 66 What it does: Data and application services including big data, advanced analytics, business intelligence. Reason for increase: Growth is fueled by the strong market demand for cloud computing, DevOps, big data and analytics services. The company also invested in IT resource certification and training.
48|Lear Corp.
Southfield Matthew Simoncini, president, CEO Revenue 2016/2013:
$18,557,600,000/$16,234,000,000 Revenue percent change: 14 What it does: Automotive supplier. Reason for increase: Continued growth from the acquisition of automotive leather supplier Eagle Ottawa LLC for $850 million.
49|Neapco Holdings LLC
Belleville Kenneth Hopkins, president and CEO Revenue 2016/2013:
$702,000,000/$570,000,000 Revenue percent change: 23 What it does: Designs, manufactures and distributes driveline systems and service parts. Reason for increase: Sales rose by 25 percent between 2013-2016, during that time period, the company launched business in China.
50|Belfor Holdings Inc. Birmingham Sheldon Yellen, CEO Revenue 2016/2013:
$1,590,211,000/$1,313,810,000 Revenue percent change: 21 What it does: Property restoration. Reason for increase: Organic growth, new office locations and several acquisitions in North America, Europe and Asia have contributed to growth.
12
C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 3 1 , 2 0 1 7
CRAIN'S LIST: THE FAST 50
CRAIN'S LIST: THE FAST 50
Ranked by combined revenue growth rankings, 2013-2016 Company Address Rank Phone; website
1 2 3 4 5 6 7 8 9 10
13 14 15 16 17 18
10
$3,732.0 $1,168.2
219%
3
$2,563.8
7
Diplomat Pharmacy Inc., Flint
12
4,410.4 1,515.1
191
6
2,895.2
6
Barton Malow Co., Southfield
19
2,425.5 1,145.5
112
9
1,280.0
10
Piston Group, Redford Twp.
20
1,581.9 684.0
131
8
898.0
12
Sun Communities Inc., Southfield
37
833.8 415.2
101
14
418.6
23
General RV Center Inc., Wixom
42
707.0 355.0
99
15
352.0
27
United Shore Financial Services LLC, Troy
44
857.0 449.1
91
20
407.9
24
U.S. Farathane, Auburn Hills
51
750.0 402.0
87
23
348.0
28
The Christman Co., Detroit
54
100.0 15.6
542
1
84.5
53
Loc Performance Products Inc., Plymouth
62
120.3 42.0
186
7
78.3
55
Aristeo Construction Co.,
63
402.8 221.0
82
25
181.8
38
H.W. Kaufman Financial Group Inc./Burns & Wilcox Ltd., Farmington Hills
76
2,050.0 1,425.0
44
58
625.0
18
PrizeLogic LLC, Southfield
80
69.0 18.2
278
2
50.8
78
Harvest-Sherwood Food Distributors, Detroit
83
2,154.8 1,539.9
40
64
614.9
19
Alta Equipment Co., Livonia
84
330.0 208.0
59
40
122.0
44
The Colasanti Cos., Macomb Twp.
87
135.0 69.7
94
19
65.3
68
Domino's Pizza Inc., Ann Arbor
88
2,472.6 1,802.2
37
72
670.4
16
Credit Acceptance Corp., Southfield
90
969.2 682.1
42
59
287.1
31
Agree Realty Corp., Farmington
91
91.5 43.5
110
10
48.0
81
Acro Service Corp., Livonia
91
331.8 216.8
53
46
115.0
45
Kirco Manix , Troy
92
96.0 47.0
104
12
49.0
80
Jim Riehl's Friendly Automotive Group Inc., Warren
94
283.7 184.5
54
44
99.1
50
LaFontaine Automotive Group,
95
816.8 577.1
42
61
239.7
34
Ramco-Gershenson Properties Trust , Farmington Hills
97
260.9 170.1
53
45
90.9
52
Advantage Management Group
97
103.3 53.0
95
18
50.3
79
19 Hills 19 21 22
23 Highland Township 24
Combined 3-year revenue Revenue Revenue % Revenue Revenue growth ($000,000) % change change growth growth rankings 2016/2015 2016-2013 ranking 2016-2013 ranking
Meridian Health Plan, Detroit
11 Livonia 12
Ranked by combined revenue growth rankings, 2013-2016
Living Centers, 24 Inc-Advantage Southfield
Company Address Rank Phone; website
26 26 28 29
The Suburban Collection, Troy
99
$2,130.4 $1,599.3
33%
78
$531.1
21
National Food Group Inc., Novi
99
113.4 60.5
87
22
52.9
77
Gentherm Inc., Northville
101
917.6 662.1
39
68
255.5
33
Deshler Group Inc., Livonia
103
135.3 76.6
77
29
58.7
74
Multi-Bank Securities Inc.,
109
75.5 38.1
98
16
37.4
93
Shaw Electric Co., Southfield
111
76.0 39.0
95
17
37.0
94
The Macomb Group Inc.,
113
200.0 131.9
52
48
68.1
65
SmithGroupJJR Inc., Detroit
115
235.9 163.0
45
54
73.0
61
BorgWarner Inc., Auburn Hills
116
9,071.0 7,436.6
22
107
1,634.4
9
Inteva Products LLC, Troy
117
2,800.0 2,200.0
27
97
600.0
20
Strategic Staffing Solutions
118
330.0 238.0
39
67
92.0
51
American Axle & Manufacturing Holdings Inc., Detroit
119
3,948.0 3,207.3
23
105
740.7
14
Amerisure Mutual Insurance
121
835.9 639.6
31
84
196.3
37
Amerilodge Group LLC, Bloomfield Hills
122
49.6 24.3
104
13
25.3
109
Kasco Inc., Royal Oak
124
80.6 45.2
78
28
35.4
96
National Business Supply Inc., Troy
131
138.0 91.3
51
49
46.7
82
Bob Jeannotte Buick GMC Inc.,
135
69.0 41.0
68
33
28.0
102
Contract Direct, Southfield
135
38.6 18.6
107
11
19.9
124
The Ideal Group Inc., Detroit
137
307.0 231.0
33
79
76.0
58
Hatch Stamping Co., Chelsea
139
186.6 133.0
40
63
53.6
76
Buff Whelan Chevrolet, Sterling
140
224.8 162.8
38
71
62.1
69
Reliable Software Resources Inc., Northville
144
63.2 38.0
66
34
25.2
110
Lear Corp., Southfield
145
18,557.6 16,234.0
14
137
2,323.6
8
Neapco Holdings LLC, Belleville
146
702.0 570.0
23
104
132.0
42
Belfor Holdings Inc.,
147
1,590.2 1,313.8
21
115
276.4
32
30 Southfield 31
32 Sterling Heights 33 34 35
36 Inc., Detroit 37
38 Co., Farmington Hills 39 40 41
42 Plymouth 42 44 45
46 Heights 47 48 49
Combined 3-year revenue Revenue Revenue % Revenue Revenue growth ($000,000) % change change growth growth rankings 2016/2015 2016-2013 ranking 2016-2013 ranking
50 Birmingham
This list is an approximate compilation of the fastest-growing companies in Wayne, Oakland, This list is an approximate compilation of the fastest-growing companies in Wayne, Oakland, This list isWashtenaw an approximate compilation of theFastest fastest-growing in Wayne, Oakland, Macomb, Washtenaw andand Livingston counties. Fastest growing is aismeasurement Macomb, Washtenaw Livingston counties. Fastest growing a measurementofofrevenue revenuegrowth Macomb, and Livingston counties. growing iscompanies a measurement of revenue and doesand not does denote a company is profitable. It is notItaiscomplete listinglisting but the most available. growth and does not denote whether a company is profitable. It is not a complete listing but the growth notwhether denote whether a company is profitable. not a complete but the comprehensive most comprehensive available. most available. LISTcomprehensive RESEARCHED BY SONYA D. HILL LIST RESEARCHED BY SONYA D. HILL
LIST RESEARCHED BY SONYA D. HILL
13
C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 3 1 , 2 0 1 7
CALENDAR THURSDAY, AUG. 3
National Association of Women Business Owners Greater Detroit Chapter Fifth Annual Women on Board. 6-9:30 p.m. Cruise the De-
troit River with high-ranking women who are influencing politics. Ovation Yacht, New Detroit Port Authority Dock. $150 VIP reception and cruise, $175 non-member VIP reception & cruise. Contact: RoseAnn Nicolai, phone: (313) 961-4748; email: admin@nawbogdc.org; website: nawbogdc.org
UPCOMING EVENTS
Paul Singh Fireside Chat. 5-7 p.m.
Aug. 8. Ann Arbor Spark. Paul Singh is an entrepreneur, speaker, investor, and Airstreamer. Two years ago, Singh decided to buy a custom Airstream trailer and travel the United States in search for entrepreneurs and startups where the coastal VC’s were not looking. Singh will present his lessons learned on traveling tens of thousands of miles to more than 65 cities and meeting with thousands of entrepreneurs, startups, incubators, and investors. Ann Arbor Spark. Free. Email: techtour@ thirdrail.co; website: https://nvite. com/rjtechtour/4o9l1o Asian Pacific American Chamber of Commerce Symposium. 7:30-9:30
a.m. Aug. 17. APACC. Peter Sor-
rentino, 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, the-center.org
email: gmarley@
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 Navigating Security and Privacy in Next-Gen Mobility. 8:30-10:30 a.m.
Aug. 30. University of Michigan-Dearborn. A panel of academic researchers at University of Michigan-Dearborn and industry leaders from Ford Motor Co. will discuss security and privacy challenges, solutions and recommendations in the next generation of mobility. Topics will include: an overview of the smart mobility trend, security risks and privacy implications in the next generation of mobility era and recent research advances in security and privacy protection. Speakers: Di Ma, associate professor of Computer and Information Science and founder of the Cybersecurity
Detroit Athletic Club to host inaugural Detroit Cycling Championship event By Tyler Clifford tclifford@crain.com
More than 300 amateur and professional bicyclists are expected to compete for $45,000 in cash prizes in the inaugural Detroit Cycling Championship on Sept. 9, hosted by the Detroit Athletic Club. Cyclists will race in a dozen categorized races, including youth and military veterans. Participants will compete for what is billed as one of the top purses in the country: $45,000 in cash prizes and prime for the professional men’s and women’s races. Nine-time Tour de France finisher and two-time Olympian Frankie Andreau, a Dearborn native, will be the announcer for the USA Cycling-sanctioned race, which will feature nationally recognized cyclists. Lead sponsors of the race include Dearborn-based Ford Motor Co., The Suburban Collection and Cooper Standard. DAC officials declined to disclose how much it cost to organize the event, but said it expects it to cost $100,000-$200,000 in later years. “We are pleased to be taking the DAC’s history of sports leadership and traditions to a new level with this event,” President Pat O’Keefe said in a statement. “The Detroit Cycling Championship will bring world-class cycling to our local community and offer fun for everyone. It will be an action-packed sports weekend in
TYLER CLIFFORD/CRAIN’S DETROIT BUSINESS
Detroit Athletic Club President Pat O’Keefe announced Wednesday that it will host the inaugural Detroity Cycling Championship Sept. 9 downtown. Detroit.” Athletic Director Rob Barr expects more than 300 riders to participate in the races: 75 in the men’s pro race, 40 in the women’s pro race and more than 125 in the kids race. The contests will begin with a free DAC Cycling Club Race at 7:30 a.m. and end with the Men’s Pro Category 1 & 2 race at 5:40 p.m. Race fees vary from $25 to $65. The track, just less than a mile, starts at Witherell Street and goes around Comerica Park and past the DAC. “We believe in the next couple years we’ll be able to get the word out enough that this will be an exciting event to come to,” Barr said. “At that point in time we’re expecting anywhere from 500 to 600 riders to
participate.” The Detroit Police Athletic League will work with the DAC Foundation and Detroit Cycling Championship to collect and distribute 130 new and used bicycles to children in the city. Starting Aug. 18 through Sept. 5, individuals and companies can donate bikes to the DAC Kids in Detroit program. A Healthy Living Expo will also take place in Grand Circus Park, which will offer bike safety sessions, health coaches and vendors. Detroit-based Atwater Brewery will sponsor the Food Truck Alley and Beer Garden, which will include National Coney Island, Hot Taco and Tim Hortons along Adams Avenue. For more information and to register, visit detroitcycling.com.
Center for Research, Education and Outreach, University of Michigan-Dearborn; Pramita Mitra, mobility research engineer, Ford Research and Innovation Center; Brahim Medjihed, associate professor of Computer and Information Science, University of Michigan-Dearborn. Automation Alley, Troy. Free members; $20 nonmembers. Phone: (800) 427-5100; email: events@automationalley. com CEO Breakfast: Tony Michaels, President and CEO, The Parade Company.
8-9:30 a.m. Sept. 19. Troy Chamber of Commerce. A behind-thescenes look at America’s Thanksgiving Parade. Hilton Garden Inn, Troy. $24 Troy chamber members; $34 nonmembers. Website: troychamber.com/events/ceo-breakfast-tony-michaels/
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.
DEALS & DETAILS CONTRACTS
J Signature Associates, Southfield, has been appointed as the managing firm for Birmingham Place, Birmingham and Unified Smiles Centre, Bloomfield Hills. Website: signatureassociates.com. J Aqaba Technologies Inc., Sterling Heights, an internet marketing agency, has been retained by SLM Solutions Group, Wixom, to provide digital marketing services and design a new online presence for its North American brand. Websites: aqabatech.com, slm-solutions.com.
NEW SERVICES
J NITS Solutions Inc., Novi, a data analytics services and solutions provider, has launched Aftersales IQ, a web-based reporting platform designed to give dealerships greater insight into fixed operations key performance indicators. Website: nitssolutions.com.
Deals & Details guidelines. Email cdbdepartments@crain.com. Use any Deals & Details item as a model for your release, and look for the appropriate category. Without complete information, your item will not run. Photos are welcome, but we cannot guarantee they will be used.
14
C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 3 1 , 2 0 1 7
ADVERTISEMENT SECTION
CONSULTING
SPOTLIGHT Ilitch Holdings names group president
FINANCIAL SERVICES
Ryan Pischke Corporate Risk and Broking Leader
Jerry Konal Senior Consultant, Health & Benefits
Willis Towers Watson Ryan Pischke has been appointed Corporate Risk and Broking (CRB) market lead for the Michigan market at Willis Towers Watson. Pischke will oversee a team of Michigan-based client advocates, risk consultants and brokers who provide a range of services including identifying and quantifying clients’ risks, developing strategies to mitigate and manage those risks and more. Pischke had previoulsy served as the Risk Control and Claim Advocacy practice leader in the Midwest for Willis Towers Watson.
Gary N. Lewis Managing Director Cascade Partners LLC As the son of a serial entrepreneur, Gary grew up understanding the balance between risk and opportunity. Over the course of his 20 year career, he has been an operator, an investor and a transaction advisor. Consequently, he fully understands what really matters and how to best position a company’s story and mitigate the potential risks for prospective buyers, investors and lenders. This knowledge and experience is what makes Gary and the team at Cascade Partners different.
AUTOMOTIVE Ray Telang U.S. Automotive Leader
Willis Towers Watson has hired Jerry Konal to serve as senior consultant in its Health and Benefits business in the company’s Southfield (Detroit) office. In this role, Konal will work with clients to help manage and consult on all facets of health care service delivery across Michigan and northern Ohio. Prior to joining Willis Towers Watson, Konal was the Michigan Health and Benefits practice leader at Mercer, providing strategic consultation and support to a cross section of industry clients.
ENGINEERING & CONSULTING OHM Advisors
For more information or questions regarding advertising in this section, please call Lynn Calcaterra at (313) 446-6086 or email: lcalcaterra@crain.com
David Zimmerman
Chairman of the Board
Board Member
James Houk, Vice President and Managing Director of the Ohio offices of OHM Advisors, has been named Chairman of the OHM Advisors Board of Directors. A 38-year planning and architecture industry veteran, Houk has been a member of the firm’s Board and Executive Team since 2010. In his new role as chairperson, he will provide insight and oversight on matters of policy, finance, strategy, and operations.
PwC
PwC has appointed Ray Telang as their new U.S. Automotive Leader in the Detroit market. Ray, who has been with the firm since 1988, also serves as the Market Managing Partner for Greater Michigan. Innovation in the form of mobility, autonomous driving, electrification and connectivity is reshaping traditional auto industry structures and relationships, and Ray is helping PwC clients navigate the road ahead.
James M. Houk
Eric Sieczka
David Zimmerman, Managing Principal of Dr. Zimmerman Consulting, joins the OHM Advisors Board of Directors. His four-decade career in the design industry includes positions as CFO and Director of Finance at Perkins + Will and Partner and COO at NBBJ Design. At Perkins + Will, Zimmerman led the company to 203% financial growth and significant North American and overseas expansion. While at NBBJ, he helped establish a global footprint and saw the firm’s revenue increase from 40 to 130 million.
Board Member
Kent Early Eric Sieczka joins the OHM Advisors Board of Directors. He is Chairman, President, and CEO of Epsilon Imaging and co-founder and a board member of Pixel Velocity Incorporated. He has been building and selling technology enterprises for two decades. Before starting Epsilon Imaging and Pixel Velocity, Sieczka co-founded EOTech Inc, where as Vice President of Operations he built a worldclass global manufacturing facility. He later helped orchestrate the sale of EOTech to L-3 Communications.
YOU MADE NEWS IN CRAIN’S
Board Member
Kent Early joins the OHM Advisors Board of Directors. Director of Municipal Engineering at OHM Advisors, Early is a professional engineer and a member of the firm’s shareholder team. Since joining the company in 1999, he has helped to expand OHM Advisors’ Municipal Services Group to multiple offices, mentor young talent into leaders, and deepen the firm’s holistic service capabilities.
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Reprints, E-prints and more! Contact Laura Picariello at lpicariello@crain.com • 732-723-0569
Detroit’s Ilitch family has hired the basketball executive widely credited with stabilizing the NBA’s Sacramento Kings’ business operations to oversee their sports and entertainment holdings. Chris Granger is now group president, sports and entertainment for Ilitch Holdings Inc., which oversees the LitChris Granger tle Caesars pizza chain, Detroit Tigers, Red Wings and the $2.1 billion District Detroit that includes Little Caesars Arena. The newly created job will require Granger to “optimize the fan and partner experience at all Ilitch-related venues; to grow, recruit and retain the significant talent in the business side of the company’s sports and entertainment organizations...” the family said in a statement. Granger will report directly to Ilitch Holdings President and CEO Chris Ilitch.
Duggan appoints medical director Detroit Mayor Mike Duggan has appointed DMC executive Suzanne White, M.D., as the Detroit Health Department’s new medical director. White, executive vice president and chief medical officer at DMC, will start her city position Aug. 21, according to a news release. She will report to the department’s execSuzanne White utive director and health officer, Joneigh Khaldun, M.D. Khaldun was promoted in February from city medical director to run the Detroit Health Department after former city public health chief Abdul El-Sayed resigned to launch a campaign for governor. White will oversee work on communicable diseases, emergency preparedness, health system engagement and support for EMS, the city said in the release. She has previously served under Duggan, who led DMC as CEO for nine years before stepping down in December 2012 to run for mayor.
UM art museum to get new director The University of Michigan Museum of Art has named Christina Olsen, head of Williams College Museum of Art, as its next director. She will join UMMA effective Oct. 30 for a five-year appointment, the museum said in a release. Olsen will succeed interim director Kathryn Huss, deputy direcChristina Olsen tor and chief administrative officer of UMMA. Huss was named to the interim position following the departure of Joseph Rosa who left UMMA in September to join the Frye Art Museum in Seattle.
LAWSUIT FROM PAGE 3
The two companies signed a partnering agreement to submit a joint bid for the Colorado proposal with Socrata taking the lead, followed by a joint bid for the Michigan proposal with Munetrix leading, both in July 2015. However, Munetrix and Socrata failed to sign a partnering agreement for the Michigan proposal — which isn’t required under Michigan law if both parties operated as a partnership. Munetrix, in the complaint filing, stated representatives from Socrata maintained a working relationship on the bid and ensured Munetrix executives they would continue to work exclusively on the joint Michigan bid. “Munetrix relied on those affirmations in preparing to submit a joint response to the Michigan (request for proposals),” the complaint reads. “During that process, Socrata was exposed to Munetrix’s sensitive commercial information and platform capabilities.” The lawsuit alleges executives from both companies were in daily contact as the proposal was prepared. The companies continued to explore more opportunities to partner after both the Colorado and Michigan bids were submitted, including dis-
RENT FROM PAGE 1
It’s almost as deeply pronounced for Class A space — which has the best amenities and finishes. Today’s Class A rental rate is $24.36 per square foot, but in the third quarter of 2001, tenants paid inflation-adjusted rent of $38.12 per square foot, 56.5 percent more than now. And Class B office space reached an inflation-adjusted high in $36.88 per foot in the first quarter of 2001, 84.5 percent more than the current rate of $20.21 per square foot. While tenants are paying higher rates generally as buildings are rehabbed and quality office space availability declines, rents have primarily stayed in the $20 to $26 range, depending on the year. “I can’t think of too many things that cost what they did in 1998,” said Peter McGrath, an associate broker in the Southfield office of Colliers International Inc. So if you’re a downtown office tenant, you actually are paying less per square foot than was the case for most of the last two-plus decades. Steve Morris, managing principal of Farmington Hills-based brokerage firm Axis Advisors Inc., said downtown’s vacancy rate was in the mid 20s from 1995 until Dan Gilbert, the founder and chairman of Quicken Loans Inc. and Rock Ventures LLC, started bringing thousands of his employees there early this decade. “The rental rates remained flat from 1995-2011 as a result of lack of demand from suburban-based firms and new firms opening in Detroit,” Morris said. “Detroit’s Class A office buildings — the Renaissance Center, One Detroit Center and 150 West Jefferson — all held their rent around $20 to $22 (per square foot) until 2016, with modest annual increases.” Some smaller tenants like non-
July 31, 2017 15
CRAIN CRAIN’S DETRO I T ’SBDUETROIT S I NBEUSINESS S S // J U LY 3 1 , 2 0 1 7
Page 2
cussions on bidding for a Michigan Department of Education proposal. “...throughout the summer and fall of 2015, Socrata continued to pump Munetrix for intelligence, relying on Munetrix’s local relationships,” the complaint said. “Munetrix provided this information — for example, the effect of local politics on the speed of the state of Michigan’s selection process — in the context of, and in reliance, on the partnership.” The companies did not secure the Colorado contract, but were informed the joint bid in Michigan was selected as a finalist with two other bids. However, Socrata executives eventually informed Munetrix that another finalist for the contract was an independent bid Socrata filed on its own. Socrata won the contract, bidding roughly $2.4 million to create the transparency site, according to its contract. That is less than the roughly $3.5 million from the joint Munetrix-Socrata bid, Roger Meyers, partner at Troy-based Bush Seyferth & Paige PLLC and lead attorney representing Munetrix, told Crain’s. Pouring salt on the wounds, a Socrata representative also allegedly bragged to others in the industry that Socrata “screwed” Munetrix out of the contract, the suit said. “Socrata is a big company that
could have competed openly for this bid,” Meyers said. “Instead, it intentionally pretended to partner so it could take Munetrix out of the equation. That betrayal, and Socrata’s apparent belief that such deception is boastworthy, is unacceptable.” Socrata employs roughly 155, according to a 2016 report by Geekwire. Munetrix employed nine with revenue of just under $1 million in 2015, Crain’s reported in April 2016. Munetrix, in the suit, also said the joint response from Munetrix and Socrata had been the runner-up to Socrata’s independent bid. Caleb Cohen, director of communications for the DTMB, declined to comment on the case, but provided data showing that the original Munetrix-Socrata joint bid actually scored the worst among the four bids for the DTMB contract. Meyers stressed the state did nothing wrong in its bid selection. “We are not criticizing the state’s process; this is about Socrata going through an underhanded approach to unfairly compete for Michigan’s business,” he said. “It’s important that the state is doing business with honest vendors and players on the other side of its contracts. This case will show they are not.” Jordan Bolton, partner at De-
Office rents, de-inflated
Although downtown Detroit’s office rental rates have been rising recently the last few years as buildings are renovated and good available space becomes scarcer, inflation-adjusted rates have historically been much higher dating back to 1996. $40
Overall average rent, adjusted for inflation
$25
REQUEST FOR QUALIFICATIONS - PROFESSIONAL SERVICES The Detroit-Wayne Joint Building Authority (D-WJBA) owns and operates the 745,000 square foot Coleman A. Young Municipal Center (CAYMC). They are considering investing $120 million in capital improvements and are exploring funding by issuing bonds. The D-WJBA is seeking the following professional services to assist in this initiative: ∂ Legal Service - Bond Counsel ∂ Bond Underwriting Services ∂ Municipal Advisory Services Interested parties who desire to provide one (1) of the services referenced above should provide the DWJBA with the following information: 1. Brief history of your firm. 2. A summary of your firm’s transactional experience including projects in Detroit, Wayne County and Michigan. 3. Names and titles of the firm’s staff that will be assigned to this engagement. 4. Any additional information that you believe is relevant to this assignment.
Please transmit, in PDF form, a copy of your completed document to commissioners@dwjba.com. We request that you not use the e-mail address for any other purpose than to send the requested document. Deadline: Friday, August 11, 2017 at Noon. The Detroit-Wayne Joint Building Authority reserves the right to request additional information, require an interview of the team members indentified in the submission and can withdraw this RFQ without advance notice or explanation and at no cost to the D-WJBA.
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C.W. JENNINGS INDUSTRIAL EXCHANGE 2Q 1Q 96 97
1Q 1Q 1Q 1Q 98 99 00 01
1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 02 03 04 05 06 07 08 09
1Q 10
1Q 11
1Q 12
1Q 13
1Q 14
1Q 1Q 15 16
1Q 17
SOURCE: Southfield office of Newmark Knight Frank
profits and law firms have felt the squeeze as rents have slowly risen in some of their buildings, Morris said. “Tenants don’t realize that they really are getting a pretty good deal,” he said. The fact that rents have remained largely static for so long has made it difficult to financially justify building new office buildings downtown, said Andy Farbman, CEO of Southfield-based Farbman Group. “Wages and materials today cost more than they did back then, so the yield on cost is still kind of behind what it should cost to build new buildings,” he said. “If you’re in other CBDs that are building brand new, whether it’s Milwaukee or elsewhere, those rents are materially higher than the rents that are being achieved in downtown Detroit today. That’s just math.” He also said that companies are using their space differently, putting workers into smaller spaces. For years, the rule of thumb was that the average office tenant needs about 250 to 300 square feet per worker. But Farbman and others have said that figure is shrinking, with some tenants needing perhaps just as little
as 110 square feet per worker. But brokers agreed that even though rents have ticked upward, the central business district still is less expensive than other downtown markets around the country. “When compared to other markets, the Detroit central business district is still a great value, even in light of the fact that rates are increasing $3, $4 or $5 a foot from building to building,” said Sam Munaco, president of Advocate Commercial Real Estate Advisors of Michigan LLC, which is based in Southfield and has an office in Chicago. “Some of these clients are sticker shocked that they’ll have to pay more, but supply is very low and demand is through the roof.” David Friedman, CEO of Farmington Hills-based Friedman Integrated Real Estate Solutions LLC, pointed to the First National Building, now owned by Gilbert. “We managed that 10 years ago,” he said. “That building had so much deferred maintenance. Today it’s new everything, and you’re talking night and day.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB
Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh
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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 3 1 , 2 0 1 7
Q&A with Jeff Mason, Michigan Economic Development Corp.
MASON FROM PAGE 1
Rothwell told him that then-head of the MEDC, Steve Arwood, was thinking of leaving (Arwood would step down in June). “That kind of led to a number of conversations with (Gov. Rick Snyder) and others,” Mason said, “and ultimately the governor then recommending my name to the board.” Mason, 58, was confirmed this month as MEDC CEO by the agency’s executive committee, led by Rothwell, who also once held the position. Mason worked for the MEDC under two governors from 1999 to 2009, including as senior vice president for business development. Reporter Lindsay VanHulle recently spoke with Mason about his vision for the agency, which he said includes opportunities in vehicle mobility, defense, information technology and agriculture. A condensed version of the interview appears below. What will be your approach to economic development as CEO? I’m really going to get out across the state ... and really listen to (community leaders) and understand kind of where they’re at. ... We’re
GOOD JOBS FROM PAGE 1
By contrast, the region covering Northeast Michigan pays its workers far less, an average of $666 a week. (Worker benefits would not be included in calculating a company’s wages for incentive purposes, Snyder spokeswoman Anna Heaton said via email. That means an employer couldn’t earn the incentive by counting total compensation packages as wages.) As state officials interpret the “Good Jobs” law, much of the workforce could make below the average. “So yes, you could have someone making $18 (per hour) and someone making $30 (per hour) and get above the threshold,” Heaton said. “Even in the aggregate, this drives the regional average wage up and thereby provides better overall opportunities for the residents in the area.” When asked whether that could distort the legislation’s intent of creating high-paying jobs, Heaton said: “If it is a plant, there would be far more manufacturing jobs than engineers or executives, which would weight the average.” A spokesman for the MEDC, which is crafting guidelines to manage the incentive program, said the agency will not comment on how wages will be determined until after the guidelines are adopted by the Michigan Strategic Fund board.
Aim is to lure businesses The three-bill package, dubbed “Good Jobs for Michigan” after a namesake coalition of economic developers and municipal leaders that support it, does not spell out how
more effective working together. The governor made a point in my conversation with him about, this is not a time to coast or slow down. This is a time to step on the gas and kind of see if we can’t really amplify some of the things we’re doing in terms of job growth, community development, some of the activities that we already have underway. What are your thoughts on the Good Jobs for Michigan and transformational brownfield incentives recently passed by the Legislature? We are very appreciative of the Legislature and the governor in terms of supporting that, and the local organizations around the state were very supportive of helping to get that legislation through. I think they’re both tools that are measured responses to what is taking place in the marketplace and will give us additional tools to really help, not only for the community development projects but also to go after some of those large attraction activities and not just compete, but hopefully win. Do you think Michigan has been competitive with other states for
the wage standard is met. Nor does it specify whether a company seeking incentives under the program would be required to pay every new hire at least the average wage in the region, or whether a company could meet the requirement by average workforce wages — which conceivably could include higher-paid corporate executives to offset lower-paid line workers. The answer will be interpreted as the incentive is rolled out. But it’s an important distinction to make, both for a company’s bottom line and for the workers hired. To qualify for the so-called “good jobs” incentive, the law says a company must: JJPay at least 125 percent of the regional average wage and create at least 250 jobs to capture up to 100 percent of their income tax withholdings for 10 years; JJPay at least the regional average wage and create at least 500 jobs to capture up to half of their income tax withholdings for five years; or JJPay at least the regional average wage and create at least 3,000 jobs to capture up to 100 percent of their income tax withholdings for 10 years. Snyder and state economic development leaders are still trying to woo Taiwanese electronics manufacturer Foxconn Technology Group, which last week said it plans to invest $10 billion to open a factory in southeastern Wisconsin, with plans for at least 3,000 employees and as many as 13,000. Foxconn reportedly is still considering Southeast Michigan, possibly Romulus or Lyon Township, for a reported $4.2 billion investment and as many as 5,000 jobs. The “good jobs” incentive is intended to strengthen Michigan’s hand.
“The value we provide in terms of the talent, in terms of the workforce, the infrastructure in terms of the roads and transportation, the education system — we provide, I think, a competitive product at a reasonable cost.” those larger projects? We were competitive to a degree. The efforts that have taken place over the last six years in terms of the changes to the tax structure and some of the business climate issues in terms of regulatory or energy costs — I mean, I think we have a solid foundation that has allowed us to compete and be successful, to a degree. I think the Good Jobs for
“You could have someone making $18 (per hour) and someone making $30 (per hour) and get above the threshold. Even in the aggregate, this drives the regional average wage up and thereby provides better overall opportunities for the residents in the area.” Anna Heaton, spokeswoman for Gov. Snyder
Lawmakers in the state House created the 3,000-job threshold after the bills cleared the Senate in March. State Rep. Jim Tedder, R-Clarkston and chairman of the House tax policy committee, said the tier was added at Snyder’s request. “The governor thought it made sense to offer a ‘better’ incentive to attract companies that are willing to invest the capital and resources it would require to bring thousands of well-paying jobs to our state,” Heaton said via email.
Reeling in a big fish Let’s assume, for a moment, that Foxconn decides to open another U.S. facility in Michigan.
Michigan package (of) legislation hopefully will allow us to compete and win some of the larger projects. And the landscape, as you well know, in terms of what other states are doing to compete for those projects is very competitive, whether it’s free land or sites or closing funds. Are there other gaps in the incentives toolbox? I don’t see any right now. If you look at kind of the competitive landscape, we are not going to compete on a lowest-cost basis, because I don’t think we should. The value we provide in terms of the talent, in terms of the workforce, the infrastructure in terms of the roads and transportation, the education system — we provide, I think, a competitive product at a reasonable cost. … That Good Jobs for Michigan package kind of is the icing on the cake, if you will. How involved have you been with efforts to lure Taiwanese electronics manufacturer Foxconn Technology Group to Michigan? I have tried to not engage or really get into the specifics on the deal flow for any particular project, really, until I was on board. … I really
And let’s say Foxconn, which makes liquid-crystal-display screens, decides to employ 3,000 people in Southeast Michigan — which is one way for a company to qualify for “good jobs” tax incentive. And Foxconn decides to pay its employees at least $1,117 per week, or $58,084 per year, which is the current regional average wage in Metro Detroit and the highest in the state. (Foxconn’s Wisconsin deal lends some credibility to the figure. A fact sheet released by the Wisconsin Economic Development Corp. says the jobs there will pay an average of $53,875. That’s about $25.90 per hour.) If that’s the case, Foxconn would pay its employees in the Detroit region nearly $28 an hour. That’s about what senior auto workers earned under the Detroit 3’s two-tier pay structure with the United Auto Workers union. Newer hires earned an hourly rate closer to $16. The median hourly wage for all production occupations in the Detroit metropolitan area was $17.60 as of May 2016, according to federal Bureau of Labor Statistics data. Snyder and economic development agencies from across the state now agree that Michigan needs more such incentive tools to be able to compete against other states that can offer sweeter deals. Wisconsin is offering $3 billion in state incentives to the Foxconn project. Some back-of-the-napkin math at Michigan’s 4.25-percent income tax rate suggests Foxconn could receive roughly $74.1 million over 10 years if it created and
wanted to have that firewall. Why, do you think, is the MEDC often in the legislative budget crosshairs? It’s a healthy debate that occurs within our state and within democracy. I think, first and foremost, what this state has done over the last six years is really get its house in order in terms of fiscal management. … I think we’ve created that solid foundation. Then it’s a question of what other policies or programs do we put in place that help us to be competitive. … Incentives probably get a lot of focus and attention, and that’s fair. But I think there’s other things that are going on within the economic development organization here at the MEDC — things like the Pure Michigan Business Connect program, which is all about connecting large Michigan companies to smaller companies. … That’s not about incentives. That’s about creating the right opportunities to help our existing Michigan companies be more successful. What are your thoughts on the MEDC’s community development side? I think about creating the right en-
sustained 3,000 employees for a decade — likely an unrealistic scenario given that production likely would be scaled up over time. Michigan’s entire “good jobs” incentive program maxes out at $200 million by 2019. Snyder eliminated most tax incentive programs early in his first term in favor of lower business taxes, but recently has reversed course and supported some incentive programs that come with sunset provisions and limits to how much state money can be given away to companies. He said he is optimistic that the incentive will produce tangible results that will convince future legislators to revisit a sunset of the “Good Jobs” law in 2019 and possibly raise the program’s cap. “This is a pilot — a very large pilot when you’re talking $200 million. But our economy’s in a goodenough position where we could go through that fairly quickly,” Snyder told reporters after signing the bills.
Long-term future murky Future legislators will have to vote to continue the program after 2019 — one of the key selling points to lawmakers concerned about past incentive programs that ballooned to billions of dollars. State Rep. Martin Howrylak, R-Troy, noted on the House floor before the House vote this month that Seattle-based online retail giant Amazon won more than $12 million in state grants for two fulfillment centers in Livonia and Romulus with existing state incentives. The company plans to create an estimated 2,600 jobs between
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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 3 1 , 2 0 1 7
SANDERS
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“This is not a time to coast or slow down. This is a time to step on the gas and kind of see if we can’t really amplify some of the things we’re doing in terms of job growth, community development, some of the activities that we already have underway.” vironment within our communities so that people want to live in these communities and then go to work for some of these great companies. … There’s a lot more going on, I think, that has as much or maybe more impact than kind of the big Strategic Fund meetings and the deals. the two sites. The state has a cash incentives pool that funded Amazon; supporters of the new withholding credit say the state’s cash doesn’t go far enough to attract the largest projects. “This bill will handcuff the state of Michigan,” Howrylak said in his floor speech. Charles Ballard, a Michigan State University economist, said it’s unusual for a company to ramp up from zero to thousands of jobs overnight, though he added that he does not know the particular details of how Foxconn might operate if it brought its business to Michigan. Even if it does hire 3,000 people in Michigan, Ballard said, with state unemployment low, it’s likely that most of the company’s workers would be moving from another job. In that case, “you didn’t actually increase employment by 3,000,” Ballard said. “You shuffled employment around.” Deputy Oakland County Executive Matt Gibb said he envisions the sweet spot for jobs at 1,200 to 1,800 at one clip, projects he said Michigan currently loses to other places. Gibb said he would consider the incentive a success if Michigan were able to land one to two such projects a year. If that were to happen by the time the incentive sunsets in 2019, “you’ll have economic developers like myself back in Lansing saying, this is exactly what was planned,” Gibb said, adding: “We’re not talking about a floodgate with these companies.” Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle
FROM PAGE 3
“The store was quaint,” Rapson said. “But our company has grown and our brand has grown. We wanted to open up the space and make the store more interactive and fun for our clients.” The remodel will use the same 70,000 square feet, repurposing the existing space. Patrick Thompson Design of Detroit and Royal Oak’s Solomon Consulting are the project’s designer and contractor. There are approximately 150 workers at headquarters and the company also employs 50 throughout the nine Sanders Chocolate & Ice Cream Shoppes in Michigan, two of which are on Mackinac Island.
Growing location, sales Last year the confectioner saw $35 million in sales — a consistent increase after $25 million in 2014 and $30 million in 2015 — with most of the growth coming from national expansion. Sanders’ fourth quarter included a production of tubs of sea salt caramels exclusively for Costco, as well as holiday products in Kohl’s and Macy’s. Sanders is now in more than 10,000 stores throughout the country, including Bed Bath & Beyond, Target and Meijer, Rapson said. Dessert toppings are being tested in 70 local Wal-Mart stores and chocolate-covered gummy bears are in Midwest 7-Eleven test markets. “Our growth is driven by taking our brand out nationally,” Rapson said, noting that former Michigan residents are always excited to find Sanders’ products in their new states.
‘Craveable’ food trend Sanders is also to looking to grow with new products, with many ideas coming from customer feedback. “Consumers are eating chocolate differently, often in smaller portions but with more decadent choices or exotic fillings. Our products and packaging reflect those changes,” Rapson said. One example is Sanders’ popular chocolate fudge Bumpy Cake. In addition to the layer cake and sheet cake, there is now a mini version. “We launched the mini Bumpy Cake in 2016 based on customer request,” Rapson said. “We kept hearing, ‘Love the cake but it’s too much for one or two,’ so our response to that: A cake just for two, or more for you!” Sanders is working with the bakery to possibly add all flavors — vanilla, caramel and carrot — in mini size for 2018. It also added a mini line of bitesize sea salt caramels, mint patties and gummy bears in grab-and-go resealable packaging. Rapson said the small portions are geared to people on the go. The sweets maker is smart for following an important “craveable” food trend, according to Darren Tristano, executive vice president of
SANDERS
There are approximately 150 workers at headquarters and the company also employs 50 throughout the nine Sanders Chocolate & Ice Cream Shoppes in Michigan, two of which are on Mackinac Island.
oils, high fructose corn syrup or trans fats. Sanders is dedicated to “keeping the artificial out” while staying competitive in pricing, Rapson said.
Old company, new technology
Sanders facts
n Fred Sanders opened the first
Sanders store on June 17, 1875, on Woodward Avenue near State Street in Detroit. n Sanders started with single-hand lines making a couple of hundred pounds of chocolate per week to multiple lines preparing hundreds of thousands of chocolates each day. n After about a decade of manufacturing some of the products,
Technomic, a Chicago-based food research and consulting firm. “Chocolate is an indulgence, a craveable product. People, even those focused on health, will still indulge but they are looking for purity of product and smaller portions.” A second food trend Tristano is seeing is specialty foods “toward better, toward gourmet.” New for 2017, Sanders launched wine pairing boxes of chocolate with a dark mixture for red wines and a milk chocolate selection for whites. Rapson said the pairing boxes were very well received at San Francisco’s Fancy Food Show in January. Tristano loved the duality of the new product. “The wine pairing chocolates are not only a great op-
Morley Candy Makers purchased the Sanders brand and original recipes in 2002, starting its revival. n There are nine Sanders Chocolate & Ice Cream Shoppes in Michigan. n The company employs more than 200 people and operates on a global scale. n Most popular products: Bumpy Cake, Gourmet Dessert Topping, Hot Fudge Cream Puffs and Sea Salt Caramels.
portunity to sell product, but for recipients to learn about Sanders and for Sanders to grow by reaching that wine-aficionado audience,” he said. Also for this year, Sanders refurbished its candy bar line with smaller portions and different flavors including potato chip milk chocolate, coconut almond and dark chocolate cherry granola. Noting it has a history of success with peanut butter products, the company added new dipping cup flavors in peanut butter chocolate and peanut butter caramel. What is not changing is Sanders’ commitment to using “clean” ingredients, like the 10,000 gallons of cream used each day for caramel production. Products are made without partially hydrogenated
“We want to take on more opportunities, including bringing back in-house some product lines that have been outsourced.” Ron Rapson, Sanders
Sanders is a nearly 150-year-old midsize company — owned since 2002 by privately held Morley Candy Makers Inc. — but it continues to invest in new technology to keep up with the industry while keeping it local. Using Michigan companies and suppliers is a priority. Sanders recently partnered with Imperial Design Cos. in Grand Rapids to make two new 180-foot production lines that tripled output. By investing $12 million back into its manufacturing over the last five years, Sanders is not only increasing production, but easing the responsibilities of its staff, Rapson said. Other tech advancements include working with Troy-based Plex Systems to bring the company into the cloud. The Plex ERP System has improved business in all facets — better inventory management, order fulfillment and improved forecasting to make every aspect of the company more efficient, Rapson said. Sanders also partnered with Logic Solutions, based in Ann Arbor, to launch a new website. The revamped sanderscandy.com makes navigation easier for consumers, Rapson said. By following trends in chocolate, Tristan said Sanders will continue to have success. This year Rapson expects another 10 percent increase in sales. “Our ownership group believes we have a great team in place to double sales in the next five to seven years,” he said. “We want to take on more opportunities, including bringing back in-house some product lines that have been outsourced. We want to grow and grow our employee base and have fun doing it.”
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Riders wait for the QLine on West Grand Boulevard in downtown Detroit last week. Ridership is expected to increase over time not only with improved service, but also because the new Little Caesars Arena will open alongside the streetcar line in September and it will have 150 to 200 events a year that include Detroit Red Wings and Pistons games.
QLINE FROM PAGE 3
“Every system across the country sees some decline when they make a transition (to paid fares),” Lijana said, adding that the system’s backers still have to gather data on how ridership will be affected by bad weather. To combat the expected decline, the QLine plans more passenger education, additional ticketing locations aside from its on-platform kiosks, and continued work on improving streetcar travel-time efficiency. “We are well positioned to begin revenue operations in September,” Matt Cullen, CEO of the nonprofit M-1 Rail, which oversees the QLine, said in a statement. “Our service continues to improve and our customers are becoming more familiar with engaging with this new mode of transit.” Ridership is expected to increase over time not only with improved service, but also because the new Little Caesars Arena will open alongside the streetcar line in September and it will have 150 to 200 events a year that include Detroit Red Wings and Pistons games. Other forthcoming downtown and Midtown residential, office and retail projects are also expected by QLine officials to add to the streetcar’s potential ridership. Officials said they continue to improve the accuracy of expected streetcar arrival times displayed at each station, which are equipped with digital information screens. A common passenger complaint on social media has been long wait times between trains, and inaccurate arrival estimates at the station kiosks, and QLine officials said the system will be further improve accuracy. The Detroit Free Press went as far on July 6 to publish a story in which staffers attempted to reach destinations faster than the streetcar by
driving, biking, taking a bus, an Uber and walking. “We’ve worked with our operational partner Transdev to implement policies that will ensure streetcars arrive at consistent 15-minute intervals during peak service,” M-1 Rail COO Paul Childs said in a statement. “We’re pleased to see that wait times have decreased by 20 percent since the start of operations and 12 percent over the past month. We expect to see continuous improvements between now and Labor Day.” Lombard, Ill.-based transportation management firm Transdev Services Inc. is the QLine’s third-party operator under a five-year, $15.5 million contract signed in January 2016. The basic QLine passenger fare is $1.50, and QLine officials said they expect to build a base of monthly and yearly fare card users who will provide steady revenue and ridership numbers. Additionally, the plan of using credit card-only fare kiosks at the 20 QLine stations, and cash-only kiosks aboard the streetcars, will be bolstered by a still-developing plan to have fare kiosks at high-traffic locations near the line — including possibly One Campus Martius (formerly the Compuware Building) and Wayne State University. Passengers also will be encouraged to use the QLine mobile app to avoid lines at the kiosks, officials said. QLine “street teams” will be deployed at stations and on the streetcars once fare service begins to help passengers understand how the system works, Lijana said. A number of efforts have already been in the works to improve train times, officials said. The QLine worked with the city and Michigan Department of Transportation to “optimize traffic signal timing at the intersections of Burroughs, Montcalm and Campus Martius.” Additionally, a streetcar approaching Congress Street at the 3.3-mile route’s southern terminus
triggers a signal change. Another time-saving measure is an operational policy change: The streetcars no longer stop at every station unless passengers are waiting to board or exit. Passengers push a button to initiate a stop. Also saving time is improved battery service by the electric-powered streetcars. The streetcar system is now running 80 percent on battery power rather than on the aerial power lines, according to the report. The improved battery efficiency reduces the time the cars are stopped for charging, QLine officials said. As part of the effort to keep the streetcars moving on schedule, city transit police have towed seven cars
“Our service continues to improve and our customers are becoming more familiar with engaging with this new mode of transit.” Matt Cullen, M-1 Rail
and issued 30 tickets for vehicles blocking QLine tracks, according to Thursday’s report. On the personnel front, Transdev has hired four more drivers, bringing the total to 21 for the fleet of six streetcars. The line uses five cars from 10 a.m. to 7 p.m. Monday through Saturday. Six more drivers will be added by the start of fare service, the QLine said. “Over the past month, we’ve increased QLine service, putting more streetcars on the road, reducing wait times between vehicles and integrated rider feedback into our operational improvement plan,” Cullen said. “The extended free ride period has enabled many more people to experience the QLine for the first
time and helped Detroiters integrate the streetcar system into their daily travel.” The Troy-based Kresge Foundation, which contributed $50 million to the $187 million it took to build the streetcar line over three years, covered the fare costs beginning July 1 through Labor Day. The foundation said it was covering the fares, estimated at a cost of a few hundred thousand dollars, to allow the system’s backers time to solve the streetcar’s teething problems and build ridership. “We believe this decision will support the QLine’s long-term success and position the streetcar as a successful demonstration project for transit in the region,” said Kresge President and CEO Rip Rapson in a statement. QLine officials said paid passenger service will begin Sept. 4 barring a major disruption. The system, which took 10 years of planning, financing and construction, has run largely without incident. One streetcar suffered minor cosmetic damage on July 24 when it was struck by a car making an illegal turn. No one was injured, but the streetcar was briefly taken out of service for repairs. Fares are part of the revenue mix, along with the sale of the line’s naming rights and corporate advertising at the stations, that fund the line’s estimated $6 million-plus annual operational costs. M-1 Rail officials have always intended to turn the system over to a public regional transit agency to operate and fund, but a dedicated funding source has yet to be established. Until a tax is approved to sustain the line long term, Cullen has said other operational funding options included seeking more corporate donations, selling more advertising and reselling the naming rights. The QLine’s construction costs and several years of operational money were funded by a mix of public and private sources.
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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 3 1 , 2 0 1 7
THE WEEK ON THE WEB
RUMBLINGS
JULY 21 - 27 | For more, visit crainsdetroit.com
Michigan still in talks for Foxconn plant
Detroit Digits A numbers-focused look at last week’s headlines:
E
conomic development officials from the state of Michigan are still negotiating with Taiwanese electronics conglomerate Foxconn Technology Group, even as it unveiled a plan last week for a $10 billion investment in Wisconsin. Eventually, Foxconn is planning to name multiple investments in multiple locations, likely in two or more states, three officials close to the negotiations confirmed to Crain’s. One of them could be Michigan. Last Wednesday, President Donald Trump, Wisconsin Gov. Scott Walker and Foxconn Chairman Terry Gou unveiled the company’s plans to invest $10 billion and create 3,000 jobs in Wisconsin in an event at the White House. Foxconn intends to build a manufacturing plant in southeastern Wisconsin that will make liquid-crystal-display screens, the type used in everything from computers to vehicle dash panels. Trump touted his “Buy American” philosophy as the reason Gou chose to make such a large investment in the U.S. Trump campaigned on a promise to bring back manufacturing jobs that American companies sent offshore. “This is will be the very first public project among our investment plans in several U.S. states,” Gou said at the White House event, Shanghai Media Group reported. News of the Wisconsin deal came the same day Michigan Gov. Rick Snyder signed a $200 million tax incentive package geared toward companies that add hundreds or thousands of jobs. Snyder would not confirm the state’s ongoing negotiations with Foxconn, instead citing media reports suggesting Michigan is a leading contender. “What you read short-term about one project or another project, you shouldn’t conclude Michigan’s not viewed very favorably,” Snyder said. “You can read between the leaves on this one.”
BUSINESS NEWS Dan Gilbert apologized on Facebook for his real estate company’s highly criticized display in a downtown Detroit window — it showed a large gathering of mostly white people with the words, “See Detroit like we do.” J Comerica Park, home of the Detroit Tigers, introduced a quicker way to get through Gate A: biometric fingerprint scanning. The service is provided by New York-based CLEAR. J Fiat Chrysler’s former labor-relations chief, Alphons Iacobelli, used $1 million intended to train UAW members to buy himself a Ferrari, two solid-gold pens costing $37,500 each, a swimming pool and other luxuries, according to an indictment from a federal grand jury last Wednesday, Automotive News reported.
$45,000
The amount for which more than 300 amateur and professional bicyclists are expected to compete in the inaugural Detroit Cycling Championship Sept. 9. It is being billed as one of the top purses in the country.
8
The number of organizations that have committed to teach Detroit students at Life Remodeled’s Community Innovation Center.
$4.375 million
A loan the planned redevelopment of the former Tiger Stadium site in Corktown received from the Michigan Strategic Fund.
Leaders from 10 companies in Michigan, including Sterling Heights-based ATCO Industries and Plymouth-based Chrysan Industries, are embarking on a trade mission to China from July 29 to Aug. 8. J Short’s Brewing Co. plans to sell a 20 percent stake of its company to Lagunitas Brewing Co. of Petaluma, Calif. J Detroit developers Zaid Elia and Matthew Shiffman have purchased the 100-year-old Ford Building on Griswold Street downtown, less than six months after the previous owner, Sterling Group, acquired it. J Canadian software company OpenText has completed its purchase of Southfield-based information technology company Covisint Corp. for about $103 million. J Organizers for the sixth annual Michigan Sports Business Conference Oct. 6 at the University of Michigan have added a sports startup competition for student entrepreneurs and tech showcase. J Seven advanced transportation technology projects have secured a J
share of $600,000 in grants that intend to help developers and researchers commercialize their product. Examples include multi-material 3-D printing and sensor fusion for autonomous driving. J The Bayview Mackinac Race will be running on Bell’s Beer for another two years following the Comstock-based brewery's decision to extend its sponsorship. J Construction on a $19 million redevelopment of a blighted cityowned building in Eastern Market is expected to begin next year now that the Detroit City Council has approved the sale of property at 3500 Riopelle St. to George Jackson’s real estate company. J A new sports publication called “The Athletic” is getting into the sports media game in Detroit, with hopes that its audience will pay for its product. J The Cass Tech Alumni Association and representatives of the Ilitch family are discussing selling the Detroit high school’s football field to Olympia Entertainment. Any sale would have to be approved by the Detroit Public Schools Community District. J Thirty-four-year-old apparel and music seller Spectacles will remain in its downtown Detroit location in the historic Hemmeter Building under Lear Corp., which in 2015 purchased the building. J Eatori Market, a bar/restaurant/ market hybrid, is expected to open in Capitol Park in downtown Detroit in August.
OTHER NEWS The Detroit City Council unanimously approved Mayor Mike Duggan’s plan to use $23.6 million from the sale of city-owned land and streets in the pathway of the new Gordie Howe International Bridge to relocate up to 240 Delray homeowners. J Wayne County Executive Warren Evans’ proposed total spending plan for the upcoming fiscal year comes in at $1.459 billion, a reduction from the current fiscal year’s $1.494 billion. J A federal judge dismissed parts of a lawsuit aimed at requiring voters to approve $56.5 million in public funding that is helping to pay for the Detroit Pistons’ move to downtown Detroit. J
J
MOTOWN MUSEUM
A rendering of the planned expansion of the Motown Museum. It will begin restoring three historic homes adjacent to the Hitsville USA house in Detroit’s New Center this fall. The home restoration is phase one of a $50 million expansion project.
Jim McTevia, the managing member of Bingham Farms-based McTevia & Associates is placing his 20-acre estate, complete with a 6,700-square-foot home, 10,000-square-foot horse riding arena, guest cabin, farm and trout pond up for auction on Sept. 2.
No minimum bid set for McTevia’s estate
L
ongtime turnaround professional Jim McTevia has spent more than 54 years diminishing financial risk for stressed companies. But, at 80 years old, McTevia is taking a big risk for his sprawling Harbor Springs home. The managing member of Bingham Farms-based McTevia & Associates is placing his 20-acre estate, complete with a 6,700-square-foot home, 10,000-square-foot horse riding arena, guest cabin, farm and trout pond up for auction on Sept. 2. No minimum bid. No reserve price. “I spent money I know I’ll never get back,” McTevia said of the $2.3 million investment into the estate. “But that wasn’t the measure for me. I invested in my family.” The estate was appraised at $1.3 million in 2015. As his children and grandchildren began moving away and living their own lives, owning the estate became less desirable for the aging professional, he said.
“My wife always wanted to be a farmer, so we built the place and bought horses, alpaca, sheep, donkeys, chickens, you name it; that’s where we thought we’d end up full time,” he said. “But I’m still busy and I’m not interested in retiring early. We’ve decided we’re not going through another winter up there.” McTevia said he had no interest in putting the estate on the market through traditional real estate channels and opted for a no minimum auction because it’s more interesting and quicker. “Do I want as much as I can get? Absolutely,” he said. “Setting a minimum sets the stage for bidding. How am I going to know how much I could get if I set a price?” McTevia’s own McTevia Real Estate LLC is brokering the property. Bidding is open to the public and can be done in person or by simulcast. Interested parties can inquire at mcteviaauctions@gmail.com.
Honigman’s new Chicago office leaves room to grow D
etroit-based law firm Honigman Miller Schwartz & Cohn LLP is making room for growth in Chicago. The firm is moving its Chicago office to a Wacker Drive office tower, a deal that will allow it eventually to nearly double its roster of lawyers there. Honigman has leased the entire 31st floor at 155 N. Wacker Drive, where it plans to move from 1 S. Wacker at the end of the year, Crain’s sister publication Crain’s Chicago Business reports. The new lease covers 28,077 square feet, slightly more than the 27,378 square feet Honigman currently occupies, but the layout at 155 N. Wacker is so much more efficient that the firm will be able to pack in twice as many lawyers than it can in its existing space, said Jason Rosenthal, Honigman’s Chicago office managing partner.
It’s “great space that will accommodate our ongoing and future growth,” he said. Honigman entered the Chicago market in 2015, when it absorbed Chicago litigation law firm Schopf & Weiss as part of its Midwest growth strategy. Schopf & Weiss employed 14 lawyers at 1 S. Wacker. The firm employs 25 lawyers in Chicago today. Honigman has no immediate plan to hire more lawyers but expects its growth to continue, Rosenthal said. Over the last couple years, it has expanded its private-equity, tax, life sciences and litigation practices in Chicago. The deal underscores the continued push by law firms to pack more bodies into less office space. Many firms have been able to save on rent by shrinking their lawyers’ offices, law libraries and storage space.
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