Crain's Detroit Business, Sept. 4, 2017 issue by Crain's Detroit Business

SEPTEMBER 4 - 10, 2017

Verlander deal: More than dollars and cents

Events aim to highlight auto technology, mobility Gilbert, Simoncini to speak at expo. Page 3

Page 3

Services

New model bolsters minorityowned firms By Dustin Walsh dwalsh@crain.com

MPS Group Inc. spent 15 years operating as a minority-owned passthrough, winning valuable automotive contracts then subcontracting the work out, often to companies that weren’t minority-owned. MPS chased contracts, expanding from waste management and industrial cleaning to warehouse management and even carpet installation.

Economic Development

Michigan scores winning streak in big deals to attract businesses, far outpacing 2016

By Lindsay VanHulle

Economic progress: By the numbers

LANSING — Michigan is scoring some big economic development wins this year, a streak that has brought more jobs and investment with a new incentives program in the wings. The state is outpacing the first eight months of 2016 when it comes to proposed job numbers and corporate spending for projects that won business growth incentives. The list

The economic development additions so far this year in Michigan, based on projects that have been approved by the Michigan Strategic Fund:

Crain’s Detroit Business/Bridge Magazine

$4.3 billion Total investment

$253.5 million Total tax incentives awarded to lure that investment

of companies that said this year they plan to expand in Michigan includes a handful of Fortune 500 companies

5,970

Total jobs created or preserved by the investments

(Amazon, Lear, Kroger, Stryker) and household names (Penske, LG). Crain’s analyzed the largest deals

awarded business attraction incentives by the Michigan Strategic Fund board. The projects were included on strategic fund board meeting agendas, generally reserved for the largest projects. Through August, Michigan has drawn at least $4.3 billion in investment and 6,700 jobs from roughly two dozen projects that received such incentives as performance-based grants or loans, brownfield financing, state SEE ECONOMY, PAGE 21

Workforce

Pre-apprenticeship program works to open doors to skilled trades union jobs By Chad Livengood clivengood@crain.com

Charlie Williams: Chairman of MPS Group

Edward Schwartz: President and CEO of MPS Group

The result was MPS operated seven divisions, was expert in only a few, and struggled to turn a profit. But in 2010, it hired a new CEO, cut product lines and reorganized under a new model — bringing more work in-house and diversifying its customer base — that helped the Farmington Hills-based company triple annual revenue in the past three years to $101 million, with $50 million in contracts waiting to be signed. MPS represents a shift in how minority-owned companies are doing business — a new model supported by local automakers, suppliers and trade groups to build a more sustainable, profitable minority-owned “ecosystem.” “All that time, MPS were leveraging that minority status to its own demise,” said Edward Schwartz, president and CEO hired by majority owner Charlie Williams in 2010 from TriMas Corp. “We’re proud of the certification, but we didn’t want it to be the sole reason a customer chose us. Now we get the business because SEE FIRMS, PAGE 17

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Marquez Goins returned to Detroit a year ago this week after a nine-year prison sentence for armed robbery when he was 18, not sure how he was going to find a job to support his three children. “That was probably the hardest step — application after application, no callbacks,” said Goins, 27. “I’m doing follow-ups, still not getting anything.” After two months of a fruitless job search, Goins’ parole agent put him touch with Dino Vann, a 34-year-old union ironworker from the city’s west side who also spent time in prison. Vann runs a pre-apprenticeship program that seeks to solve one of the most vexing challenges of Detroit’s turnaround after decades of economic decline: putting Detroiters to work in the well-paying skilled trades construction jobs rebuilding their city. He’s also trying to open doors for African American Detroiters to get a foothold into skilled trades unions that have traditionally relied on a friends-and-family recruitment model. SEE APPRENTICE, PAGE 18

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Michigan companies take steps to reduce energy used in industrial, office facilities 10 percent, he said. In Wyandotte, a new steam operation, used to heat buildings and powGreg Pflum was hoping to lure a to he er manufacturing, is estimated new plant to the BASF facility save about $1 million a year, Pflum oversees in Wyandotte four years ago said. when he got an unwelcome remind“It doesn’t take long to justify the energy of er about the importance investment,” he said. costs. furniture office state, the Across High Michigan energy prices made maker Steelcase Inc. also has an eye the site uncompetitive, said Pflum, on energy savings. the vice president and general man“In the office furniture industry, ager of BASF Corp.’s Midwest Regionwe compete on sustainability,” said al Hub. “I want to grow our business, John DeAngelis, energy and special (so) we have to be competitive.” project manager for the Grand RapThe plant would have brought 100 ids company. “It’s important to our jobs to Wyandotte. Instead, BASF decustomers.” United the of cided to build it outside In early 2016, Steelcase gained sigStates.

By Doug Henze

Special to Crain’s Detroit Business

“This was just a metal building with holes in it. We did a complete renovation and basically turned it into a new building.” Steve Swan, HyCAL general manager

It’s one dramatic example of the role energy costs play in business decisions, and why they are leading companies across Michigan are taking steps to reduce the amount of enfaergy used in industrial and office cilities. s, re-

nificant energy savings by relighting a 1-million-square-foot distribution center in Kentwood. That one project reduced the 2 company’s global energy bill by percent, DeAngelis said. “For a company with operations all over the world, that’s a huge im-

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From staff and wire reports. Find the full stories at crainsdetroit.com

Enbridge finds gaps in Mackinac pipeline coating

Enbridge Inc., the company that operates twin oil pipelines in the waterway linking Lake Huron and Lake Michigan, said last week it has found a number of gaps in a protective layer of enamel coating on the pipes, the Associated Press reported. Enbridge’s disclosure prompted criticism from Gov. Rick Snyder and other officials about the condition of the pipelines, which traverse the bottomlands of the Straits of Mackinac. They are part of Enbridge's Line 5, which carries about 23 million gallons of crude oil and liquid natural gas daily. Enbridge has been conducting studies, maintenance projects and inspections in response to questions from state agencies about Line 5. During a recent examination, divers spotted a gap in the coating a few inches long on one pipeline and four smaller gaps close together on the other, company spokesman Ryan Duffy said. A third spot also may have bare metal and is being evaluated, he said. “There’s no safety or integrity issue with the steel pipe itself, no corrosion,” Duffy said. But environmental groups said the discovery underscores the need to

decommission the 64-year-old pipeline, which they contend presents a growing risk of rupturing and doing catastrophic damage to the straits area’s environment, wildlife and tourism industry. Even Snyder, who has stopped short of endorsing a shutdown, said he was “greatly concerned.” “I have directed our departments to accelerate an aggressive review of Enbridge operations and maintenance procedures throughout the state,” Snyder said. The state Department of Environmental Quality demanded more information from the inspections and an immediate check of areas around all Line 5 anchors. Enbridge insists Line 5 is in good shape and is inspected regularly. A consulting firm retained by the state issued a report in June that said the pipelines could operate indefinitely but listed several alternatives, including shutting it down and installing a new straits pipeline that would run through a trench or tunnel.

Lexington’s Cadillac House to be restored

Detroit-based real estate developer the Roxbury Group started construction last week on its $3 million restoration of the 157-year-old Cadillac House Inn and Tavern in Lexington.

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The Detroit-based Roxbury Group broke ground Wednesday on restoration of the 157-year-old Cadillac House Inn and Tavern in Lexington.

The building in the center of the lakeside Sanilac County town has languished in recent years, but it will reopen by Memorial Day 2018 with both a hotel and restaurant, according to a news release. A $1 million Community Development Block Grant from the Michigan Economic Development Corp. will support the project. It’s the largest such grant ever given in Lexington, the news release stated. The exterior of the Cadillac House — not known for its beauty after a 1970s modernization effort — will be restored to resemble the original 1860 construction, according to the release. It will still have a tavern on its first floor.

The hotel on the building's second and third floors will have 12 rooms. Stacy Fox, principal of the Roxbury Group, bought the Cadillac House last summer, the release said. The main contractors on the project are Detroit-based Artisan Contracting and St. Clair-based Infuz Architects.

KL Outdoor to invest in Muskegon

KL Outdoor is planning to invest $9.2 million and add 153 jobs in Muskegon, following an acquisition in April that makes it the world’s largest kayak manufacturer. The company, which manufactures Sun Dolphin Kayaks, merged with

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WEEK ON THE WEB

Quebec-based GSC Technologies earlier this year and has chosen Muskegon over the competing Canadian city, according to a news release from the governor’s office. In addition to establishing its global headquarters in Muskegon, the company is planning to expand its facility there.

CORRECTIONS J A Deals & Details item in the Aug. 28 issue about Near Perfect Media should not have included Oakland University as a new contract and had an incorrect location for the company, which is in Bloomfield Hills. J The story “Blind vendor law complicates leasing puzzle” in the Aug. 28 edition of Crain’s Detroit Business misstated the name of the organization providing data on employment of blind people. It is the National Federation of the Blind, not the National Federation for the Blind.

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Sports Business

Technology

Verlander, Upton trades mark shift in strategy for Tigers

By Bill Shea bshea@crain.com

If the four prospects the Detroit Tigers got in trades for Justin Verlander and Justin Upton don’t pan out, it could become known as Black Thursday. And if the young players do develop into talented Major Leaguers in the future, the day will mark the launch of a happy new era as Christopher Ilitch shifts strategies after assuming ownership from his late father. In the meantime, smaller crowds are likely at Comerica Park, and the team’s

season ticket base may further shrink. That’s the short-term price for what Tigers’ ownership and front office executives believe is the path to long-term success that’s financially more sustainable. The Tigers dealt the two Justins on Thursday as part of a bid to shed expensive talent and to realign the club’s baseball strategy to build a contender via cheaper, younger players developed in their own farm system — and with a greater emphasis on advanced analytics.

A fan on Wednesday tweeted a photo of a letter he received from the team sent to season ticket holders that acknowledged that the Tigers are rebuilding and that 2017 is a “difficult season.” It also outlined the team’s strategies. “As you know, the franchise is transitioning to a new era, and that transition is well under way,” Tigers General Manager Al Avila and Vice President for Business Operations Duane McLean wrote in the letter. SEE TRADES, PAGE 21

Events to showcase technology, mobility By Dustin Walsh dwalsh@crain.com

Justin Verlander

MAJOR LEAGUE BASEBALL

Development

A three-day summit this week will tout Southeast Michigan as a center of advanced automotive technology. The Technology in Motion event, Sept. 6-8 at Cobo Center in Detroit, is intended to showcase the region’s and the industry’s role in shaping connected cars, autonomous driving, new forms of mobility and powertrains of the future. It will link startups with the Detroit area’s traditional strengths in automotive higher education and research and development. The event — which will feature keynotes from automotive and technology executives, STEM education and mobility panels and a technology showcase — aims to be the Motor

Technology in Motion When: Sept 6-8 Where: Cobo Center, Detroit What: Keynotes from executives from Volkwagen, Nissan, Lear, Magna; automotive and mobility exhibition; startup competition; Matt Simoncini: educational tracts, Lear CEO to speak etc. at event. Tickets: $10 for one-day exhibition pass to $150 for all access. A rendering shows the $100 million-plus public-private development that has been proposed in downtown Royal Oak.

KRIEGER KLATT ARCHITECTS

be built on a surface parking lot west of city hall to be owned by the development group. “There is a specific state law as to how and what municipalities can invest their money in,” said Ethan Holtz, a partner at the Southfield office of Jaffe Raitt Heuer & Weiss PC, which is representing the plaintiffs (see box). “You can’t put them in private real estate deals. (You can put them in) bonds, mutual funds, CDs, things like that. There are good reasons for that; this is public money and this is a public trust.” The term sheet for the development calls for Central Park Development Group to pay back $12.8 million over 20 years in property taxes, regardless of what it is assessed at.

City’s answer to Las Vegas’ Consumer Electronics Show. CES has become inundated with automotive technologies in recent years, said David Graff, a co-founder of Technology in Motion and vice president of retail network solutions sales at MSX International Inc. MSX provides automotive dealer training and services and oversees contract staffing contracts for clients through its Geometrics Results unit. Crain Communications Inc., publisher of Automotive News and Crain’s Detroit Business, is the co-presenter of the event. “Why do we have to go to CES to launch the latest and greatest technology?” Graff asked. “I’ve been going to CES for 10 years and it’s getting so big and it butts up against the auto show (in January). It’s a logistical nightmare and automotive gets lost in the fray of iPad holders, connected washers and dryers and everything that CES encompasses.”

SEE LAWSUIT, PAGE 22

SEE EVENTS, PAGE 22

Royal Oak City Center project faces lawsuit By Kirk Pinho

Plaintiffs

A proposed $100 million-plus public-private development in downtown Royal Oak is the subject of a lawsuit in Oakland County Circuit Court saying the city is violating state law and its charter and ordinances. The battle threatens the construction of the Royal Oak City Center project, which would transform the city’s hip downtown. But the plaintiffs argue it would worsen the city’s parking problems and harm existing businesses, and also the city is planning to finance it in ways that are not allowed. Multiple alleged missteps are at issue pertaining to the planned Royal Oak City Center project being led by Central Park Development Group, a joint-venture between Lansing-based

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The Boji Group LLC and Birmingham-based Surnow Co. The complaint alleges that the city essentially gave the developers $5.5

million from its general fund as equity — a rare move — to secure financing from Flagstar Bank for a 128,000-square-foot office building to

What keeps you up at night? Ron Fournier talks to Bank of America’s Matt Elliott. Page 8

Rocket Fiber vs. Comcast in Detroit

Helping out in hard-hit Houston

Rocket Fiber looks to offer TV service, increasing competition against Comcast in the city of Detroit. Page 5

Birmingham-based company puts resources into helping flooding victims after Hurricane Harvey. Page 4

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“Resolving Your Money Matters”

REVENUE CYCLE MANAGEMENT CALL CENTER BILL PAY SERVICES

A single housing unit offered by Vesta Modular and Housing Solutions Inc.

VESTA MODULAR AND HOUSING SOLUTIONS INC.

Birmingham-based Vesta looks to help flooded-out Houston By Sherri Welch swelch@crain.com

517.544.9100 www.ljross.com

Not even three years into operating, Birmingham-based Vesta Modular and Housing Solutions Inc. was projecting to hit $10 million in revenue this year and $20 million next year. That was before Hurricane Harvey hit — and the company may sacrifice some of that growth to help, its executives said. The first Category 4 hurricane to make landfall since Charley in 2004, the nearly weeklong Harvey left unprecedented flooding in its wake for as much as a third of Houston, the fourth-largest city in the U.S. Late last week, the U.S. Department of Homeland Security said 100,000 homes had been affected by the storm. Vesta’s projected growth before the storm hinged on high demand for the factory-built, modular offices, classrooms and homes it sells and installs, demand spurred by shortages of carpenters and other skilled labor across the country. But the expansive need in Houston now trumps other demand, Vesta CEO Dan McMurtrie said. There’s no telling what impact Vesta’s response to the historic flooding in Houston — its first deployment to a disaster area — will have on its bottom line. “We could end up with some reduced growth responding to this hurricane because we’re dedicating so many resources to it,” McMurtrie said. Simon Group Holdings’ Soaring Pine Capital LLC is the investment company backing Vesta. Led by Sam Simon, founder of Atlas Oil Co. and CEO of Simon Group, the investors in Soaring Pine are more concerned right now with providing shelter and buildings to people in need than the company’s profit margins. “They are philanthropists at heart. ... They want us to make money, but it won’t be the main driving force” as Vesta heads to Houston this week, McMurtrie said. Simon said he’s not at all worried about the business.

Dan McMurtie: Devoting resources to Texas.

Sam Simon: Time to worry about people.

Vesta could sell or lease the units it has in storage, but this is not the time for that, he said. The company will subsidize the costs of transporting the homes, which can be high, and charge only the minimum needed, he said. “This is the time we have to worry about the people,” Simon said. “We have these modular homes, so we need to lend a hand.” Whether to give back now or grow in the future as Houston rebuilds, Vesta is well-positioned to play a significant role in providing both temporary housing and commercial space in the flooded city, along with new, permanent structures in the years ahead as the region rebuilds. Following its February acquisition of Salt Lake City-based M Space Holdings LLC out of bankruptcy, Vesta has a fleet of more than 2,000 modules for commercial use at sites around the country, over 100 fully furnished, single-box homes stored in North Dakota and a 40-classroom complex in storage in Indiana that can be moved to Houston for use by displaced families, first responders, companies or other entities in the region that need to house their workers. If you need to get a temporary classroom right now in Texas, there will be a backlog given the high demand on modular unit manufacturers over the past year and increased need from Harvey, McMurtrie said. “We have a lot of available inventory to help satisfy the growing market, and with things like Hurricane Harvey, that gives us the ability to provide property to people who need it.” Vesta has operated in Texas since it

began and is licensed as an industrialized builder in the state. Last year it won a contract to supply a national buyers co-op, enabling municipalities and government agencies to buy directly from it, McMurtrie said. Before launching Vesta in 2014, he and co-founder Bill Hall worked together at Troy-based Champion Home Builders Inc. Vesta has about 200 temporary modular units shrink-wrapped and waiting at three storage sites in the Texas and Louisiana area to immediately deploy, McMurtrie said, and three more storage sites in Alabama, Mississippi and Georgia which will be used to send units into the flooded region. It counts the Houston Independent School District — the largest public school system in Texas and one of the largest in the country — among its clients, along with several Texas companies and expects those relationships to translate to new contracts in the storm’s aftermath, he said. McMurtrie connected with longtime contacts at FEMA from his days working at Troy-based Champion Home Builders Inc. to let them know it was ready to move units as needed, once the federal agency exhausts its own stores. Vesta will likely donate the use of some of the units, and provide others to Atlas drivers, given the two companies’ common ownership, McMurtrie said. Late last week, he and Hall were out shopping for an RV to serve as a home away from home for them and four or five other Vesta employees headed to Houston this week. Eventually, the company plans to use one of its units, but installation will rely on FEMA’s designation of areas for installation and restored power, water and sewer, McMurtrie said. He projects it will be 30 to 60 days before the first wave of temporary housing comes online in Houston. “We’re going to do everything we can to help out in that market,” he said. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

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Rocket Fiber to offer TV service as Comcast feels competition

Resources, Energy & Environment Group

By Chad Livengood clivengood@crain.com

As downtown Detroit office space fills up and new high-rise construction begins, there’s an emerging rivalry for internet services between cable giant Comcast Corp. and Rocket Fiber LLC, the homegrown fiber optics internet service in businessman Dan Gilbert’s family of companies. Rocket Fiber CEO Marc Hudson says the company is months away from rolling out a “fully featured cable TV product” that will compete directly with Comcast and other media carriers for television service over its gigabit-per-second internet connection. As Rocket Fiber expands beyond regular internet service, executives at both companies are starting to throw a few elbows when asked about the competition for customers. In a recent interview with Crain’s, Comcast Senior Executive Vice President David Cohen said he doesn’t see Rocket Fiber as playing on the same field as Comcast does, reaching into every home and business through cable television lines. “Rocket Fiber so far has had more of an impact, maybe its only impact, in the business services sector and in MDUs (multiple dwelling units),” Cohen said. “And I’m not saying this to be judgmental, it’s just a factual statement. Like many competitors in other cities, they’re sort of going after the easy cream of the crop.” Over the past two years, Rocket Fiber has laid fiber optic cable throughout downtown, Corktown, most of Midtown and recently crossed the Lodge Freeway to start delivering internet service to the Woodbridge neighborhood. Cohen seemed well aware of where Rocket Fiber is wooing Comcast customers in Detroit. “We don’t build out only to wealthy areas,” Cohen told Crain’s. “We don’t build out only to commercial business districts.” Marc Hudson, co-founder and CEO of Rocket Fiber, takes exception with how the name-brand competitor views his company’s strategy. “That’s the opposite of what we’re trying to do,” Hudson said. Rocket Fiber’s expansion isn’t stopping at the edges of downtown and Midtown, Hudson said. “Our mission is all of Detroit,” he said. But there are challenges. Fiber optic cable is expensive and many of Detroit’s neighborhoods are sparsely populated, giving Comcast and AT&T an advantage to deliver internet and TV over existing cable and phone lines, respectively. “The rest of the city, obviously, is massive, geographically,” Hudson said. While not providing exact figures, Hudson said 80 percent of Rocket Fiber’s customers are outside of Gilbert’s family of 100-plus companies. That customer base was built by a $30 million investment in 2015 by Gilbert’s Rock Ventures LLC to lay 5.5 miles of fiber-optic cable network in the central business district to provide gigabit-per-second internet service. Hudson said Rocket Fiber is still working off that initial capital investment. Large commercial customers are providing the “game-changing” growth

Marc Hudson: Mission is all of Detroit.

David Cohen: Comcast is competing.

Rocket Fiber needs to expand into Detroit’s neighborhoods, Hudson said. Rocket Fiber is developing a wireless service to beam internet signals from a downtown building to the Cody Rouge neighborhood on Detroit’s far west side. Other expansions into Detroit’s neighborhoods will be through a mixture of “both wired and wireless strategies,” Hudson said. Cohen acknowledged Comcast has “felt the competition” in Detroit. “But we’re competing,” he said. “We’re not surrendering.” Rocket Fiber, while priding itself on “white glove” customer service, also is fine-tuning its messaging that its technology is superior to the “legacy” coaxial cable (the kind Comcast uses to deliver internet and TV service). “Enterprise clients, in particular, usually require fiber optic infrastructure and don’t consider older, slower technologies like coax cable networks to meet their current, let alone future needs,” Hudson told Crain’s. “Many of our clients cite the inconsistent speeds and frequent outages of their legacy copper service as reasons for switching to Rocket Fiber.” Rocket Fiber is testing its TV service with a limited number of customers and could have it available for all customers by the end of the year, Hudson said. Cohen predicted Rocket Fiber would struggle to break into the single family home residential TV and internet market, which Comcast has spent years battling for market share of with AT&T and satellite services like DirecTV and Dish Network. “I think that Rocket Fiber, like everyone else, will find that it’s very difficult, very expensive, with much more questionable returns, to build out their plant, to be able to reach every household in the city of Detroit and compete household-to-household for residential broadband services,” Cohen said. LightSpeed Communications LLC also is offering fiber-optic internet service in select downtown Detroit buildings. But a co-founder of the East Lansing-based startup said its focus is on expanding an existing service in Southfield into other suburbs. “That’s where we think we’re going to make a big dent,” said Tim Lebel, vice president and co-founder of LightSpeed. “The big carriers have been ignoring the suburbs.” In the Comcast vs. Rocket Fiber battle, the LightSpeed executive is sort of rooting for the other new game in town. “They’re cut from the same cloth we’re cut from — they’re disrupting the market,” Lebel said of Rocket Fiber. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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Detroit Wayne Mental Health Authority’s future could be on the integration bandwagon By Jay Greene jgreene@crain.com

The Detroit Wayne Mental Health Authority is considering a proposal by former CEO Tom Watkins to work with Medicaid health plans in Wayne County in 2018 to integrate physical and behavioral health services and prepare for 2019 when Michigan government will decide whether to overhaul the current quasi public mental health system. Earlier this year, the state Legislature authorized the creation of four pilot projects to test ways to combine Michigan’s separate $2.6 billion Medicaid behavioral health and $9 billion Medicaid physical health delivery systems. The pilots are being designed by the state Department of Health and Human Services and will be presented to the Legislature in the early spring. Sometime next year, the four Medicaid pilot projects — expected to be located in Southeast Michigan, western Michigan, the Thumb area and a northern Michigan rural area — will begin a two-year experiment to study the effectiveness of integrating behavioral and physical health. “Health care integration makes all the sense in the world and its time has come,” said Watkins, who announced his resignation earlier this year and whose last day was Aug. 31. “It is not a matter of if, but rather how and when. ... The question is how do we work with the health plans?" The DWMHA board is in the process of interviewing five potential replacements for Watkins after reviewing more than 50 candidates submitted by a national search firm. The board is expected to make a decision on its next CEO in September. Dana Lasenby, who currently is acting COO, will become acting CEO Sept. 1. But looking ahead after his four years at the authority, Watkins said in a recent interview in his New Center office that DWMHA must restructure to be relevant under what is likely to be a reformed Medicaid system. “If we do nothing, our services will

Tom Watkins: Integration makes all the sense in the world.

Marianne Udow-Phillips: Based on core principles.

be absorbed into the health plans,” Watkins said. “We want to preserve DWMHA services and values for our 80,000 (clients).” In a report expected to be discussed by the DWMHA at a Sept. 20 meeting, the board is expected to approve one of two models to integrate physical and behavioral health services. To assist in looking toward the future, Watkins hired Marianne Udow-Phillips, director of the Center for Healthcare Research and Transformation in Ann Arbor, and Jay Rosen, principal at Health Management Associates in Ann Arbor. Under the first model, DWMHA would develop a request for proposal to take full or shared risk with Medicaid HMOs to integrate physical and behavioral health care. The second model would develop an RFP to contract with one or more Medical HMOs as a partner to administer behavioral health services in Wayne County with no financial risk. DWMHA Chairman Herbert Smitherman Jr., M.D., was unavailable for an interview. But Udow-Phillips, who was authorized by Smitherman to discuss the proposals, said she and Rosen looked at dozens of integrated models that are operating in many states. “The board is being very prudent and they are exploring alternatives,” she said. Both models call for a closer working relationship with Medicaid HMOs to save money but also improve quality and expand services, Watkins said. “If you want to move down the path and be ready, here are the steps

that have to happen,” said Udow-Phillips, adding: “It is all based on core principles” created by a statewide workgroup to best serve clients. Since 1998, Michigan has operated under a federal waiver that carved out serious mental health patients and those intellectually or developmentally disabled or those with substance abuse problems from Medicaid HMO contracts. Those patients are currently managed by 10 regional prepaid inpatient health plans, which DWMHA is the state’s largest. DWMHA takes care of about 80,000, or 25 percent of the approximate 300,000 behavioral health Medicaid population, employs 200 with a $700 million annual budget. Watkins suggested that if the pilot model works in Wayne County, the state could alter its traditional Medicaid HMO bidding process that is conducted every four years. Health plans will submit proposals in the state rebid the fall of 2019. “Either DWMHA lays out a better mousetrap or the waters of health care integration goes to the health plans,” Watkins said, adding: “We need to change” or be irrelevant. For example, Watkins said the state could reduce administrative funds by 5 percent to DWMHA and the health plans in Wayne County and use the savings for client services. “We can get creative and get funds from the state to do our services and it could be a reduction in (costs) for the state,” he said.

Children wraparound services project Another project recommended by Watkins and approved by the board is a $5 million, three-year investment in supporting children’s services for preschool through age 12 in the city of Detroit. “A child without a decent education today ends up as an adult without decent job in the future,” Watkins said. “There are so many challenges facing kids before they go to school.” But Watkins said this is not just another stand-alone program. The plan

would entail working with neighborhood nonprofit agencies, foundations, labor, faith-based organizations, government and businesses to coordinate resources for the programs. “We need to be a catalyst to bring other companies to the table,” he said. Watkins said funding for the program will come from authority general funds, Medicaid, grants and other local funding sources. “These funds should only be invested as part of a comprehensive citywide initiative to combat social determinants that impede academic success for our most vulnerable children and families,” Watkins said.

DWMHA growth Over the past four years under Watkins, the DWMHA has evolved tremendously, going from a county agency to an independent authority in 2013 and retiring $30 million in debt. “We have accomplished a lot since we became an independent authority,” said Watkins, a former state school superintendent from 2001 to 2005. “My hope is with the new CEO and board (DWMHA) can reach new heights.”

“Either DWMHA lays out a better mousetrap or the waters of health care integration goes to the health plans. ” Tom Watkins

During Watkins’ tenure he was able to secure $30 million more in new Medicaid revenue and used some of the funds to increase direct care staff wages by more than $2 per hour. He also reduced administrative costs and standardized provider rates. On the clinical side, the authority helped to establish 23 crisis mobilization teams, trained thousands of first responders and others in mental

health first aid training, which saved more than 30 lives with Naloxone First Responder training. In the fall of 2014, the DWMHA paid $2.7 million for a vacant 72,000-square-foot office building in Detroit’s New Center Area. The authority, which had leased 50,000 square feet in a Wayne County building for about $1 million per year, spent about $6.5 million to renovate the office into its new headquarters. All the moves were timely. In April 2014 the state of Michigan began to add 650,000 people to Medicaid under the Affordable Care Act and the state changed the formula for its payment rates to DWMHA and the other nine regional prepaid inpatient health plans in the state. But Watkins has striven to improve management efficiencies of the four managed care provider networks it contracts with that serves the more than 80,000 people with mental health and other developmental disabilities. For example, the authority voted unanimously last year to terminate the three-year contract of Gateway Community health, a Detroit-based mental health provider network, and transferred its $120 million contract for about 50,000 clients to CareLink Network Inc., another Detroit-based manager of a comprehensive provider network. Before joining DWMHA, Watkins was founding CEO of TDW and Associates, a Detroit-based global consulting and education business. He told Crain’s he will continue consulting and look at other job offers. “I have lots of opportunities out there,” said Watkins. “Most people have one track. I’ve got options in education, health care and business.” Watkins has held a number of public management positions, including state school superintendent of public instruction from 2001 to 2005 under Gov. John Engler; CEO of the economic council of Palm Beach County, Fla., from 1996 to 2001; and special assistant to the president of Wayne State University from 1990 to 1996.

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Duggan builds support for auto insurance reform push By Chad Livengood clivengood@crain.com

Detroit Mayor Mike Duggan is building a bipartisan statewide coalition to make a major push in Lansing this fall for reforming Michigan’s highest-in-the-nation auto insurance rates that focuses on taking medical costs out of the system and imposing a mandatory rollback in rates. One of the first companies to publicly get in the mayor’s corner is DTE Energy Co. Gerry Anderson, chairman and CEO of the Detroit-based energy company, said Michigan’s unique no-fault auto insurance system has become an economic burden, especially in Detroit where motorists often pay three times what suburban drivers do for the same coverage. “You’ve got situations where people just don’t own cars because they can’t afford the insurance, which becomes an employment issue, or they drive uninsured, which is an issue for all of us,” Anderson said in an interview. “It’s not a healthy situation and it really just begs to be addressed.” Michigan’s average auto insurance premium of $2,394 was 82 percent higher than the national average and 25 percent higher than the next closest state — Louisiana — in Insure.com’s annual state-bystate comparison of rates. “The gap between Michigan and the rest of the country is expanding,” Duggan said in an interview.

Mike Duggan: Working for no-fault reform.

Duggan told Crain’s he been working “every single day” on a nofault reform package that could win bipartisan support in the Legislature and not suffer the same failed fate of previous attempts to change the 44-year-old system. In Lansing, the medical providers who serve patients with uncapped coverage for auto accidents have been in a years-long battle with auto insurers, who are constantly trying to find new ways to contain costs that eat into their bottom line. Sources close to the negotiations say Duggan and House Speaker Tom Leonard are pursuing a reform package that focuses on getting auto insurers to agree to mandatory rollbacks in rates to the tune of 25 to 30 percent by creating mechanisms to lower their exposure to the unlimited medical bills and take costs out of the system. One proposal being discussed would allow drivers to opt out of unlimited personal injury protec-

Blighted Riverview facility to be cleaned up

“(House Speaker) Tom Leonard really convinced me that we should not just be looking at Detroit, that the auto insurance rates are so high for the entire state that we should be looking for a statewide solution.” Mike Duggan

re-election in November against state Sen. Coleman Young II, is working on auto insurance reform directly with House Speaker Tom Leonard, a Republican who is eying a bid for attorney general next year. This time around, Duggan and the Republican House speaker have agreed up front to a strategy for selling the final product. “Tom Leonard really convinced me that we should not just be looking at Detroit, that the auto insurance rates are so high for the entire state that we should be looking for a statewide solution,” Duggan told Crain’s. “What we’re trying to do now is build a statewide coalition.” Other CEOs are expected to join DTE’s Anderson in backing Duggan and Leonard's plan under the broad argument that the high cost

of auto insurance is a deterrent to Michigan’s economic recovery. But as past failed attempts have shown, Michigan’s auto insurance industry is fraught with varying interests straddling the very different fault lines of consumer protection, patient needs and making money for medical providers, attorneys and insurance carriers. Leonard’s “priority is to lower the cost of out of control auto insurance rates,” spokesman Gideon D’Assandro said. “That will take a lot of negotiation.” One major player in the debate will be hospitals that have built out state-of-the-art trauma centers. “We’ve got to make sure that the policy prescription treats them fairly and ensures that they can make a transition to a new regime with their finances intact and so forth,” said Anderson, who leads an informal group of Detroit CEOs. “I’ve heard that’s doable.” In Detroit, business leaders have become more in tune in recent years to the effects high auto insurance rates are having on their efforts to recruit and retain talent — and get them to repopulate Detroit, a 2013 campaign promise Duggan has struggled to fulfill. “I do see it as an issue for the health of our city,” Anderson said. “But this should not be isolated as an issue for Detroit. It’s really an issue for everybody in Michigan.”

Approved content by Brendan 2 Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

Restructuring Experience

In Your Corner.

A local brownfield authority southwest of Detroit will get a $500,000 grant and $500,000 loan to clean up a blighted industrial facility. The Michigan Department of Environmental Quality said the funding will address environmental contamination and deteriorating structures at the Materials Processing Inc. site on Jefferson Avenue in Riverview. A brownfield plan and industrial tax abatement have been approved by the city of Riverview. The W.F. Whelan Co. is expected to expand storage and distribution business at the site once redevelopment is completed. Upward of 50 new jobs are expected to be created. Materials Processing Inc. will continue to operate as a tenant in part of the facility. The state’s Brownfield Redevelopment Program provides grants and loans to local governments for environmental activities on brownfield properties where redevelopment is proposed. — The Associated Press

A brownfield plan and industrial tax abatement have been approved by the city of Riverview.

Gerry Anderson: Issue begs to be addressed.

tion through “PIP choice” and accept a lower coverage threshold. That would effectively create a cost shift to the driver’s health insurance plans, be it a private carrier or a taxpayer-funded plan such as Medicaid or Medicare. Duggan has previously spoken publicly about how Michigan is the only state in the country that bars senior citizens from using their Medicare health insurance benefits to pay for treatment of injuries sustained in a car accident. Other proposals center on reining in attendant care where family and friends get paid for tending the needs of an injured loved one. Auto insurers have complained for years that they believe attendant care is rife with the potential fraud. Duggan declined to delve into specifics during a phone interview Thursday while he was en route to Lansing for meetings on auto insurance reform. “I’m not going to negotiate in the newspaper,” the mayor said. “We’re sitting in a room resolving things.” Two years ago, Duggan tried to get the Legislature to consider a Detroit-only reform proposal dubbed “D Insurance” that would have provided $25,000 for medical care and capped catastrophic coverage at $250,000. The plan would have effectively created two systems for insurance in Michigan — one for Detroit and the other for everybody else — and was scuttled by lawmakers. Duggan, a Democrat up for

■ Co-Chair of the Restructuring Practice Group. ■ National restructuring and insolvency practice, representing lenders, investors, owners, customers, and suppliers in distressed situations both in and out of court.

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Detroit

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Novi

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Grand Rapids

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Kalamazoo ■ Grand Haven

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Lansing

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Ann Arbor

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Hastings

Contact Brendan Best at bgbest@varnumlaw.com

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

OPINION

WHAT KEEPS YOU UP AT NIGHT?

A banker’s worries, outside bankers’ hours

n a weekend trip to Chicago this summer, a Michigan woman named Anne lost her wallet. She called the bank in a panic, hoping to cancel her credit cards. Anne talked to several people at the bank, who coordinated their efforts and quickly shielded her accounts. “Everything was handled in an hour,” bragged the bank’s Michigan market president, Matt Elliott. Elliott told me about Anne’s experience to illustrate Bank of America’s focus on customer and community service. I RON thought it was a perfect anecdote for this column, except for FOURNIER one little fact: Anne is your wife, I said. “Are you really confident that would have happened for the wife of anybody?” “Oh, yes,” Elliott chuckled. “There was no special flag that this person is related to the market president. And yet it was handled with one phone call — and when I think back five years ago when I joined (the bank), would that have been one call? Probably not.” What keeps Elliott up at night is worrying about whether Bank of America is moving fast enough to improve the financial lives of its customers and the financial straits of its community. The answer is as elusive as a lost wallet and bigger, even, than his bank’s bottom line. During an interview in his Farmington Hills office, the latest in a series of conversations I’m conducting with business leaders about their biggest worries, Elliott said his focus comes from the top, where CEO Brian Moynihan charted a new course after the 2008 financial crisis. A decades-long strategy to grow at all costs gave way to something called responsible growth. (I edited our chat for length and context.) What keeps you awake at night?

The easiest way to think of that is probably in the context of the framework that we use to run our company … We have to be sustainable, so part of being sustainable is being responsive to all your stakeholders, so the lens we think through for that is “ESG.” You’ve probably heard of that. Yes, but please explain.

It’s the new version of … corporate responsibility. So the “E” stands for environment. Are we good stewards of the resources that we use, and do we help enable the green economy grow through our commitments? The “S” stands for society and how you respond to society or the community that you serve — and for us that starts at home, making sure that we are the employer that we want to be. So we added, for example, another four weeks of leave to our parental leave program, so that now it is 16 weeks. For a mother or a father?

Mother, father or adoptive parents (get) leave. It's not paid leave, obviously.

It’s paid.

Oh, it’s paid?

All 16 weeks are paid. Minimum wage for the company is $15 an hour. We are supportive of the community. We can only be as successful as the communities that we support, so that means: Are you engaging your community not only through philanthropy but volunteerism? Are you sharing your knowledge to help people? We do a lot of financial education, for example. Everyone has a need to have more tools around money and finances. The “G” of ESG is governance: Does all this stuff have teeth and do you have a framework to use these concepts to run the company? We do. Let's pause a second on the “S” part and poke a little bit at that and the parental leave. How much does that cost you?

On the P&L, I really don’t know, but from an employee standpoint it pays for itself pretty quickly. How so?

Because it attracts and retains the kind of people that we want. What kind of people do you want?

We want people that believe in the company, but we also want (them to be) the best that they can be in each of those

The Elliott File Age: 50 Education: B.A., Michigan State University; MBA, University of Chicago. Mentor: My godfather, Jim Daniel. Biggest achievement: TBD. First job ever: Drive-thru operator, Taco Bell. First job post-college: Credit Analyst, NBD Bank. Life goal: To leave it better than I found it.

segments. The world is more complex than it used to be. … The world is more diverse than ever, not only from a racial point of view, but (from a) family construct: LGBT, and all of those things. It’s family leave. It’s parental adoption. It’s maternal. It’s paternal. But this isn’t a social experiment you’re running. It’s business.

Right. But there’s the … question you’re going to ask a lot of people in my chair. (The question) that keeps them awake at night. They’re going to talk about how they’re trying to attract and retain their people. What happens when those values come into conflict? There has got to be times when they do — when the ability to improve someone’s life comes into conflict with the bottom line.

That’s right.

How often does that happen, and how does a leader handle that?

It happens frequently (like when) you want to improve someone’s financial life — let’s say by making a particular loan — but that may not work for the risk framework. … If you run the company sustainably, you realize that the money that we would be lending out is yours: If you are a customer of ours, do you want me to make that loan? No, I would not think that you would

want me to make that loan with your money. Sometimes, there is not a clear black-and-white answer, but by identifying it, debating that conversation, debating that particular point and making a conversation using the framework as a guide, there is the best answer we can get to. New topic. If I am a business owner who is constantly complaining about my lack of access to capital, what’s your advice for me?

Let’s find out what your needs are and let’s get you in the right home. I talked to business owners about this all the time: If you are looking for startup capital, a commercial bank is probably not the right place to be, but there are places … that are there fully equipped to help through that phase, so as you grow and develop then we can hopefully make you a loan when you have cash flow that we can lend against.

what-keeps-me-up-at-night things. [I]f I thought about responsible growth for the state of Michigan and I was going to go through those four pillars and the last one was sustainability, right? So I am asking myself, am I making investments or are we doing things that are sustainable long term? Educational attainment and per capita income are bottom quartile, investments in infrastructure are bottom quartile. Compared to other states, you mean?

Yes, compared to other states, those are bottom quartile, and when I look at municipal and state-level finances (I wonder) how are we going to be able to fund all these liabilities that are sitting at the state and county level? I don’t know. Each one of those issues is important not only to your community and to your family, but to your business?

Yes. I think what’s behind some of the resentment of big organizations … is a lot of people believe the economy is a zero-sum game, and it’s not. They have been given good reason to think your industry is zero-sum game.

I think too many people have had (bad) experiences, but in the real life of our business … we can only be as successful as our clients. It’s a true definition of a win-win. What is the most important part of your job?

Communicating the “why.” Owning that and understanding it and communicating it and making sure that the leaders that work on my team feel like they can communicate it too. Communicating it a lot and demonstrating it and living it. It’s one thing to say it, but they also have to see it. How do you live it?

So your first priority is finding them the right solution, even if it’s not your bank?

Number one by doing the things that I know my boss wants us to do, but also doing it authentically.

Related question: Do you think this state’s economy is diverse enough?

What are large and small ways you can manifest or authentically do what your mission is?

Yes, let’s get you in the right home.

It’s more diverse (than it has been) and I think time will tell, but I do feel like we are running towards more diversity and not away from it. This is one of those

Probably one of the best examples: My mom was in the hospital last fall (and) the people at the hospital …

records, but I’d bet Detroit leads the nation in charitable giving. I think we raise more money in golf days than anywhere else in the country. We do not have a lot of time in our summer season, but I am sure that every week in the summer we have a couple, or more, golf outings raising money for a worthy cause. Or maybe it’s an auction. Or both. Detroiters are a competitive lot. Whenever they start a new fundraiser, they always want it to be the biggest and richest in the land. And

we have many competing to hit that goal. I have no doubt that Detroit companies are once again going to step up and support the efforts to help Houston and its flood victims. It is part of our nature. Sometimes all it takes is a single voice, with some friends, and you are off to the races, so to speak. So go play golf, bid during an auction and remember Robbie Buhl. He had an idea, and he started something great. We all can, too.

SEE ELLIOTT, PAGE 9

What one person can do

f you want to be successful, you also need a lot of friends. My friend Robbie Buhl held the 11th Racing for Kids fundraiser on the main street of Grosse Pointe last week and raised even more money for his charity that has been going on forever. If you race cars, then chances are that you have participated in his charitable activity sometime in the past couple of decades. Quite a while ago, I was taking part in a Toyota celebrity race in

KEITH CRAIN Editor-in-chief

Long Beach, Calif., and they made sure we all would visit the local

children’s hospital, which was a moving experience. Robbie and his friends have raised over $7 million for children’s hospitals over the years, and last week added to that tally. I have always been amazed at how much can be done by one person, with the help of his friends, when they decide it is time to get involved. Often, I am glad to notice, people get whole companies involved in the fundraising. I don’t know that anybody keeps

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

Professionalism will be on display at Marine Week T he Marines are coming to town and Detroit’s business community would be wise to stand at attention. We have the unique opportunity to interface with more than 700 members of the United States Marine Corps when they descend upon the Motor City Wednesday through Sunday. They’ll participate in more than 80 community outreach activities and free public events across Detroit that will showcase the Marines’ history, capabilities, pride and professionalism. Emphasis on the word “professionalism.” As a former Marine, the lessons in leadership and determination ingrained in me as a young recruit and on active duty have served me well throughout my career. They’ve driven my achievements and trained me to pinpoint talent in others. The Marines teach obedience and rallying behind decisions as a team member. They teach that intelligent, informed and fair exchanges are more effective than shouting and intimidation. They emphasize integrity and unfailing manners. They effectively create a unique sense of belonging among a tightly knit band of brothers and sisters that inspires everyone to do their best in upholding the organization’s reputation of excellence. Who wouldn’t want employees with these character traits, which are not necessarily taught in business school? “Semper Fidelis” is not just a slogan; it’s a commitment to be faithful to the end, no matter how perilous the mission. Courage is mission-critical for the Marines, who have been at the forefront of every American conflict since they were established in 1775. That same military grit translates into the workplace as an executive who is not afraid to speak out and shake up the status quo. As a newcomer to General Motors in the 1960s, I had strong ideas about the design of

ELLIOTT FROM PAGE 8

found out I was a banker, so once in a while someone would pick up a conversation around a financial issue and I was more than happy to help somebody out with that, even though no one was watching. But from my point of view, it was important to do that. Those are the little things. The big things are the moments that matter when you have to make a hard decision and you actually use the principles or someone has made the hard decision and they use the principles and you back them up so you reinforce them. Those are the big ones. How important is humility in leading an organization like this?

OTHER VOICES Bob Lutz

certain products — in one instance, the front end styling of the Opel. While my suggestion didn’t increase costs, my superiors claimed it was too late to make a change and encouraged me to let it go. Finding my-

self face to face with the big boss, who was the equivalent of a three-star general, I summoned the nerve to share my suggestion, which he put into production to great results. Trace any number of commercial successes back to their origins, and you’ll find someone who had the guts to speak up. Look further, and it’s likely a Marine. Marines value communication. They master the ability to speak in a cohesive, concise and logical manner and can artfully persuade without being pushy and arrogant. As a young recruit and later as an officer, I found the most effective drill instructors blended humor with extreme firm-

No. You are our guest and we are happy to have you here. It’s my job to reflect that. Ron Fournier is publisher and editor of Crain’s Detroit Business. Catch his take on business at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760.

long it has been since they served. For those who hire a military veteran, the chance of being disappointed is greatly reduced. But I firmly believe the chance of being disappointed is close to zero in hiring a former Marine. Bob Lutz is former General Motors vice chairman and held top leadership positions with Chrysler, Ford Motor Co. and BMW. He is now president of Ann Arbor-based Lutz Communications and an author, business consultant and public speaker. He enlisted in the United States Marine Corps in 1954, became a fighter pilot and rose to the rank of captain. He served 11 combined years of active and reserve duty.

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Humility is important in any organization. I think it is important to listen first and talk second. I was struck by a small thing when I arrived at your offices: You met me at the door. I’m assuming that wasn’t by accident?

ness in putting us through grueling paces. For me, that humor took the edge off the intensity of our training. I’ve used that technique many times in trying to get people to rally around something they initially refuse. Once the room gets laughing, it’s easier to build consensus. Marines are also conditioned to have a tremendous work ethic. Given a mission, they’ll go at it with hammer and tongs and won’t rest until the job is done. Again, who wouldn’t want employees with these character traits? The Detroit business community would do well in hiring Marine Corps veterans, no matter their rank or how

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QLine cost $7 million higher than previous estimate By Bill Shea bshea@crain.com

Organizers of the QLine streetcar project in Detroit say the final estimated construction cost for the 6.6mile loop on Woodward Avenue is expected to top out at $144 million. That’s up from earlier estimates of about $137 million. The project has spent the summer finalizing contracts for the streetcar, which began operations May 12. The additional $7 million in spending comes from increased costs for the line’s six streetcars and for technical infrastructure to allow the electrical-powered rail cars to operate longer on batteries instead of the system’s aerial power lines, QLine officials said. The project, run by a private nonprofit called M-1 Rail, assembled $187.3 million over the past decade in private donations from corporations, universities and hospitals along the line, and grants from government and foundation sources. The rest of what’s been raised or pledged after the $144 million capital costs is meant to cover operations for a decade, after which time M-1 has pledged to turn the system over to a public regional transit authority to own, operate and fund. Operating the QLine is expected to cost $5.5 million to $6 million annually, leaving M-1 Rail about $13 million to $20 million short of the roughly $60 million-plus it needs to operate the line for 10 years. “A specific fundraising target will depend on how our revenue model evolves over time. The amount of revenue from farebox, advertising and pass programs will become clearer once the QLine has been in revenue

KURT NAGL/CRAIN’S DETROIT BUSINESS

Operating the QLine is expected to cost $5.5 million to $6 million annually, leaving M-1 Rail about $13 million to $20 million short of the roughly $60 million-plus it needs to operate the line for 10 years.

service for a full year,” said QLine spokesman Dan Lijana said via email. M-1 Rail CEO Matt Cullen has said in the past that the system will continue to seek money from corporate donors and government aid, work to sell more advertising, or it could resell the naming rights. Dan Gilbert, who is co-chairman of M-1 Rail and Cullen’s boss, had his Quicken Loans Inc. buy the line’s naming rights for $5 million over 10 years.

The system also relies on passenger fares, which are scheduled to begin, after several delays, on Tuesday. The QLine was averaging about 4,800 riders a day through mid-July, and expects that to drop temporarily once paid service begins. It expects to hit its 5,000-per-day budgetary goal within 12 months, and reach 8,000 riders daily within five years. The streetcar system also has been in talks for a year with an undisclosed

donor for a $5 million pledge. “M-1 Rail always expected to do additional fundraising for operational funding. Conversations are underway and encouraging but final paperwork has not yet been signed,” Lijana said. “Conversations have been ongoing with potential funders throughout construction of the QLine, while we prepared for passenger service and as we begin revenue operations. Those discussions continue in a positive di-

rection and the early success of the QLine indicates we will raise the necessary funds.” Another source of money to run the trains could come in the form of a dedicated transit tax. Voters in November rejected just such a tax when the Regional Transit Authority of Southeast Michigan put an issue on the ballot in Wayne, Oakland, Macomb and Washtenaw counties that would have raised $3 billion over 20 years to pay for improved mass transit, including the QLine’s operations. The RTA, which is reorganizing and operating under an interim CEO, under state law cannot put another tax on the ballot until 2018, but the likelihood is that it would try again in 2020. Even then, there’s no guarantee it will be approved, and it’s too soon to be certain if the QLine will be included in any proposed funding issue. The original plan was for the RTA to take over the QLine as early as 2024. RTA Chairman Paul Hillegonds said there is discussion of seeking a tax using federal urban area boundaries rather than the county borders — a strategy that would eliminate the northern areas of Oakland and Macomb counties that overwhelmingly rejected the ballot issue. The political leadership from the counties and Detroit will make that decision, Hillegonds said. The QLine is a mostly curbside fixed-rail streetcar system, which mixes with street traffic. It has 20 stations at 12 stops between Grand Boulevard and Congress Street. Bill Shea: (313) 446-1626 Twitter: @bill_shea19

QLine touts reduced waits as it prepares to charge for service By Tyler Clifford

tclifford@crain.com

The operator of the QLine said last week that it has trains arriving more often as it prepares to launch paid service beginning Tuesday. A frequent complaint about the line since it launched May 12 has been gaps between car arrivals that can hit 20-25 minutes. Matt Cullen, president and CEO of M-1 Rail, the organization that runs the Detroit streetcar line, said last Tuesday that wait times have been cut to 15 minutes during peak times on weekdays — a 15 percent reduction — and he hopes to get it down to 12 minutes or less. Officials will post ridership, headway and schedule times to continue to improve wait times. Over the past month, average daily ridership has been 5,500 passengers, M-1 Rail said in a news release. That’s higher than the 3,300-4,000 per day the line has previously said it averaged in its first month. From June 12 through late July, ridership averaged 5,150 per day. “We thought that we would be busiest in the rush hours, but we’ve been busier during the course of the day,” Cullen said. “That might be because of school being out and we had a ton of people that were just coming down here to experience the city in that way. But we’ve had good progress in every regard.” The streetcar line went through teething pains in its first months, including lower-than-expected rider

KURT NAGL/CRAIN’S DETROIT BUSINESS

A frequent complaint about the QLine since it launched May 12 has been gaps between car arrivals that can hit 20-25 minutes.

numbers, which prompted the Kresge Foundation to donate $650,000 to keep rides free until Labor Day, Kresge President and CEO Rip Rapson said. M-1 Rail also said accuracy of the system that predicts train arrivals has improved and trains are arriving within 2 minutes of their expected arrival on 65 percent of the trips in August. The line said it expects to continue to improve that figure. “The feedback has been terrific. The business community, I think, is very excited of the fact that we are not under construction any more,” Cullen said. “They’ve been very patient with us. But now not only are we not under construction, but we’re really starting to bring thousands of people a day up and down the corridor, which has been very significant in that regard.”

Lombard, Ill.-based transportation management firm Transdev Services Inc. is the QLine’s the system’s third-party operator under a fiveyear, $15.5 million contract signed in January 2016. Cullen said the company has hired all local staff, with the exception of one person. QLine ridership is expected to decline once it starts charging a fare. 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. “Some people have noted the challenges in that the setup is not really for the kind of system that we have, so we’ve been tweaking that to make sure it works better,” Cullen said. “We want people to have a good sense of when [the streetcar] is coming, but

it’s difficult to say exactly when it’s coming. You have a system that says the car is a minute away, but if it happens to be at a traffic light, it could be here in a minute thirty (seconds). If it’s not, then it could be quicker.” The line plans to have additional personnel in highly trafficked stations through Sept. 17 to assist passengers. It is also adding a more detailed route map in stations and aboard the cars, along with directions to help people in buying tickets. Cullen said he would grade the QLine’s launch an A, but said its operation is at a C+, which he expects to improve over time with more education about the service. This week and next, QLine “ambassadors” will staff every streetcar and most stations to help riders with any immediate questions they have, especially about fares.

“This is just the stage where we’re at," he said. "We're educating people that you can’t park on the line, we’re educating people that you can’t even park on the line for just a second to run in to get a coffee." The basic QLine passenger fare is $1.50. Officials said they expect to build a base of monthly and yearly fare card users who will provide steady revenue and ridership numbers. 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 host 150-200 events a year that include Detroit Red Wings and Pistons games and concerts. Other forthcoming downtown and Midtown residential, office and retail projects are also expected by QLine officials to add the streetcar line’s potential ridership. Officials expect ridership numbers to dip after $1.50 fares kick in next week. Cullen cited that cities such as Cleveland took about four months to see its ridership reach projected numbers, but he said he expects a quicker rebound. “The development that has taken place has been incredible: $7 billion worth of development since 2013,”he said. “All of our friends are building these great projects. Paul [Childs, COO of M-1 Rail] and his team has had to coordinate all of the construction taking place at the same time.”

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FOCUS SPECIAL REPORT: ENERGY

INDUSTRIAL-STRENGTH SAVINGS

BASF

BASF’s steam plant, which began operating end of December 2016, generates steam more efficiently using high-efficiency natural gas burners and with much lower emissions than the previously used coal-powered plant.

Michigan companies take steps to reduce energy used in industrial, office facilities By Doug Henze

Special to Crain’s Detroit Business

HyCAL Corp. in Gibraltar uses heat exchange units that mostly eliminate the need for a significant heating system.

LARRY PEPLIN

Greg Pflum was hoping to lure a new plant to the BASF facility he oversees in Wyandotte four years ago when he got an unwelcome reminder about the importance of energy costs. High Michigan energy prices made the site uncompetitive, said Pflum, the vice president and general manager of BASF Corp.’s Midwest Regional Hub. “I want to grow our business, (so) we have to be competitive.” The plant would have brought 100 jobs to Wyandotte. Instead, BASF decided to build it outside of the United States. It’s one dramatic example of the role energy costs play in business decisions, and why they are leading companies across Michigan are taking steps to reduce the amount of energy used in industrial and office facilities. At the BASF facility Pflum runs, recent energy-saving measures have played a part in the addition of about 100 new jobs a year, he said, estimating energy accounts for about 5 percent of overall operating costs. Pflum’s team is keeping costs down by: J Shortening production cycle times wherever possible. J Using energy-efficient lighting. J Devising ways to divert energy from cooling processes to those that are heating. J Using programmable controls to reduce heating or lighting when buildings aren’t being used. Last year, when a BASF facility in Southfield Pflum oversees needed a new roof, crews installed a polyurethane material that has reduced building energy use by 5 percent to 10 percent, he said. In Wyandotte, a new steam operation, used to heat buildings and power manufacturing, is estimated to save about $1 million a year, Pflum said. “It doesn’t take long to justify the investment,” he said. Across the state, office furniture maker Steelcase Inc. also has an eye

on energy savings. “In the office furniture industry, we compete on sustainability,” said John DeAngelis, energy and special project manager for the Grand Rapids company. “It’s important to our customers.” In early 2016, Steelcase gained significant energy savings by relighting a 1-million-square-foot distribution center in Kentwood. That one project reduced the company’s global energy bill by 2 percent, DeAngelis said. “For a company with operations all over the world, that’s a huge impact,” he said. “We saved hundreds of thousands (of dollars). It paid itself back in less than two years.”

“We constantly change the layout of our plants. You can control those lights without having to make any physical changes (to the way they’re configured).” John DeAngelis, Steelcase

The relighting allowed Steelcase to zone areas of the facility — meaning it can light some areas and shut down or reduce lighting in areas where it isn’t needed. Steelcase did a similar project at its Caledonia wood plant, where desktops and cabinets are produced. A wireless control system allows Steelcase to turn lights down or off — even from offsite. “We constantly change the layout of our plants,” DeAngelis added. “You can control those lights without having to make any physical changes (to the way they’re configured).” Steelcase also uses energy-efficient LED lighting and controls in its office buildings and asks security staff on night rounds to double as energy auditors — making sure fans and TVs are off. SEE ENERGY, PAGE 12

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

SPECIAL REPORT: ENERGY ENERGY “This was just a metal FROM PAGE 11

Another Michigan company leading the way in energy-use reduction is Gibraltar’s HyCAL Corp. The company won a Governor’s Energy Excellence Award for its 18-month conversion of a 1950s-era portion of the former McLouth Steel site to a modern, energy-efficient factory. “This was just a metal building with holes in it,” said HyCAL General Manager Steve Swan, whose company will produce high-strength steel for auto industry. “We did a complete renovation and basically turned it into a new building.” The $15 million renovation on the 550,000-square-foot factory included new siding, roofs and insulation, as well as installation of energy-efficient doors and 650 LED lights. By making the building airtight, HyCAL eliminated the need for heating units. “We are using the heat from our process to heat the building,” Swan said. “Before, it was all going outside.” Swan, who estimated that 30 percent of HyCAL’s operating costs go to energy, said those costs would have been 10 percent higher without the renovations. “By spending money now, we’re (reducing) cost later,” he said. That mindset is in place across the state, as businesses look to shift available dollars from energy bills to other parts of their operations, said Dan Scripps. Scripps is president of the Institute for Energy Innovation, a nonprofit that aims to makes a business case for energy savings, and vice president of the Michigan Energy Innovation Business Council, a trade group that includes including wind, solar and other companies. “We see significant savings in energy efficiency,” Scripps said. “It means businesses are more competitive at the end of the day.” Companies are finding savings in everything from using better HVAC systems and energy-efficient lighting to using increasingly affordable renewable energy. Solar panels, for example, cost 1 percent of what they did 25 years ago, he said. Some companies are forging deals with utilities to reduce their power use during peak times. “If you’ve got some flexibility in when you use energy, that can be a huge savings,” Scripps said. Businesses may take their industrial operation offline for 15 minutes or shut down office air conditioning for a short time — or temporarily allow utilities to reduce their power supply. Not only do companies realize savings when not using power, but utilities also provide them a lower rate throughout the year for cooperating. Utilities benefit because reduced power load demand means they don’t have to fire up another generation station, Scripps said. They also benefit because of a 2008 law that requires them to hit energy-use reduction targets, said Dave Walker, a public utilities engineer for Michigan Public Service Commission, which regulates utilities. Adds Patricia Poli, manager of MPSC’s Energy Waste Reduction Section, “They entice customers with rebates. The customer gets a discount, and the utility gets to claim the savings. If it delays the need to build a power plant, because you’re offsetting increases in demand, everyone benefits.”

building with holes in it. We did a complete renovation and basically turned it into a new building.” Steve Swan, HyCAL general manager

LARRY PEPLIN

The renovation of HyCAL Corp. in Gibraltar includes all-LED lighting and insulated walls and ceilings. Some 30 percent of HyCAL’s operating costs go to energy, and those costs would have been 10 percent higher without the renovations.

Steelcase also uses energy-efficient LED lighting and controls in its office buildings, including at the Grand Rapids campus, and asks security staff on night rounds to double as energy auditors — making sure fans and TVs are off.

STEELCASE

“We see significant savings in energy efficiency. It means businesses are more competitive at the end of the day.”

“We’ve had every kind of energy efficiency (upgrade) — windows, bay doors, wall insulation, roof insulation. Almost everyone includes lighting — LED lighting.”

Dan Scripps, Institute for Energy Innovation

Andy Levin, Lean and Green Michigan

To assist businesses seeking to improve their energy-inefficient buildings, the State of Michigan passed the Property Assessment Clean Energy act in 2010, also known as PACE. However, few companies have taken advantage of it so far. “It’s been slower than I hoped,” said Andy Levin, president of Detroit-based Lean and Green Michigan, which administrates the program for 32 local governments and 22 counties. “It’s just getting started.” Businesses that do an energy audit on a building may opt not to fix leaks, because of the cost and a long payback time, he said. Through the PACE program, a busi-

ness can get a loan for up to 20 years that is secured by a special tax assessment on the building. Lenders feel more secure, because failure to pay the assessment can lead to foreclosure. “If you don’t pay them, the county sheriff is going to come take your hotel,” Levin said. If the project cost is $250,000 or more, a contractor has to guarantee energy savings will be greater than cost, Levin said. If the savings fall short, that contractor has to write a check or fix the problem, he said. While businesses have completed only a handful of PACE projects — about $3 million to $4 million worth

— they’ve run the gamut from a manufacturing facility to a beer distribution operation to apartment buildings. “We’ve had every kind of energy efficiency (upgrade) — windows, bay doors, wall insulation, roof insulation,” Levin said. “Almost everyone includes lighting — LED lighting.” Levin said he expects the program to include more than $100 million in projects annually once it catches on. “It’s going to be very big,” he said. Two recent projects are an overhaul of The Whitney restaurant in Detroit, housed in a 19th century mansion, and an office building in Clinton Township. They are the first PACE

projects to be financed in Wayne and Macomb counties. Pension funds and private equity funds are supplying the money for PACE projects, said Bob Mattler, who recently started Green Portfolio Solutions LLC of Bloomfield Hills to arrange the deals. “It provides an owner the ability to upgrade his building with nothing out of his pocket,” he said. “If you can save 25 to 30 percent or more on your electric or gas bill, you can pay off the loan with those savings.” Building owners can get an interest rate of 5 percent to 7 percent and are not prohibited from selling the building, he said. The assessment is assumed by the next owner. “Here in Michigan, we have so many old buildings, and we always need capital to improve them,” Mattler said.

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CALENDAR FRIDAY, SEPT. 8 Doing Business in India. 9-11 a.m. Sept. 8. Automation Alley. Jagat Shah, vice chairman of the United States India Importers Council, discusses business opportunities in India. Automation Alley, Troy. $20 member; $40 nonmember; $30 walk-in member; $50 walk-in nonmember. Contact: Lisa Lasser, email: lasserl@automationalley.com; website: http:// automationalley.com

UPCOMING EVENTS September Economic Development Forum. 8-9:30 a.m. Sept. 13. Troy Chamber of Commerce. Speaker: David Johnson, vice president of Customer Service and Economic Development, DTE Energy, DTE Energy, on economic development initiatives.Rehmann, Troy. Free, Troy chamber members; $10 nonmembers. Contact: Jessica Hruska, phone: (248) 641-1606; email: jessica@troychamber.com; website: troychamber.com/events/septemb e r- 2 0 1 7 - e c o n o m i c - d e v e l o p ment-forum/ Dealing with Difficult People. 8-9 a.m. Sept. 14. SE Troy Affinity Group. Social media and millennials within the GenX/Y/Z work environments are compounding and complicating an already-delicate, and age-old, yet-unsolved issue: dealing with difficult people. Three techniques are provided which can give a new per-

spective and help to navigate the circumstances difficult people place in the workplace. Speaker: Ruth Davis. Walsh College Troy Campus. Free. Contact: Brenda Meller, email: bmeller@walshcollege.edu Washtenaw Economic Club Luncheon. 11:30 a.m.-1:30 p.m. Sept. 14. Washtenaw Economic Club. What will the world look like in five years? Journalist and innovation speaker Leah Hunter draws on her research and background as a corporate innovation consultant for companies like Apple, Pepsi and Cisco. 4800 E. Huron River Drive, Ann Arbor $77.50 nonmember. Phone: (765) 677-5060; email: washtenaweconclub@ wccnet.edu; website: washtenaweconclub.org Ford Motor Company Day. 11:15 a.m.-1 p.m. Sept. 18. Adcraft Detroit. Featuring CNN’s Anderson Cooper. $50 Adcraft members; $75 nonmembers. Ford Conference & Event Center, Dearborn. Website: adcraftdeAnderson troit.com/events Cooper CEO Breakfast: Tony Michaels, President and CEO, The Parade Company. 8-9:30 a.m. Sept. 19. Troy Chamber of Commerce. A behindthe-scenes look at America’s Thanks-

giving Parade. Hilton Garden Inn, Troy. $24 Troy chamber members; $34 nonmembers. Website: troychamber.com/events/ceo-breakfast-tony-michaels/

Les Gold

Seth Gold

Inside the CEO Mind. 8 a.m. Sept. 19. Detroit Regional Chamber. American Jewelry and Loan’s Leslie “Les” Gold and Seth Gold will share their perspectives as business owners and reality television stars. The Golds will discuss how their company separates itself from competitors. American Jewelry and Loan, Detroit. $30 members; $50 nonmembers. Contact: Marianne Alabastro, phone: (313) 596-0479; e-mail: malabast@detroitchamber.com; website: detroitchamber.com/events/ 2017 Entrepreneur and Small Business Conference: Pathways to Success. 8:30 a.m.-4:30 p.m. Sept. 22. South East Michigan Entrepreneurs Association. Speakers include: Ryan Mack, CNN Commentator, Irene Spanos, director of Economic

Development and Community Affairs Oakland County, and Edward Foxworth, Foxworth Marketing Group. Event also includes panel discussions, breakout sessions, breakfast, lunch and networking opportunities. University of Phoenix Southfield Campus. $49 until Sept. 8; $59 after Sept. 8 until Sept. 20; $79 late/onsite registration. Email: administrator@semea.info; website: semea.org/ Reinventing...not Retiring. 5:307:30 p.m. Sept. 27. Inforum. Many people spend years anticipating retirement. But as that time approaches, this question arises: What now? A panel of retired high-level executives who have charted very different paths includes: Patti Griswold, who retired in March from Comerica Bank, where she held several senior leadership roles; Nancy Hickey, who retired in 2014 as senior vice president and chief administrative officer of Steelcase Inc.; Maria Leonhauser, who was a journalist for several publications, including Time and People and later worked in public relations, retiring as an equity partner and president of Franco in Detroit; Lisa Payne, who retired vice chairman and CFO of Taubman Centers Inc. and now serves as a director of three NYSE companies. Moderator: Julie Green Topping, who had a 38-year career supervising and working with reporters, editors and production staff at the Detroit Free Press. $80. Townsend

Hotel, Birmingham. Website: inforummichigan.org Top of Troy: Women of Influence. 8-9:30 a.m. Sept. 28. Troy Chamber of Commerce. Panel discussion with Joan Budden, president and CEO, Priority Health; Kendra Corman, managing director, Joan Budden H2H Consulting; Ruthanne Largent, chief information officer, Horizon Global; Nancy Susick, president, Beaumont Hospital, Troy. Learn about the challenges they faced on their paths to success, the key tools they have used to remain focused along the way, the hard decisions they are faced with on a daily basis and how being a woman has affected the choices they made. MSU Management Education Center, Troy. $20 Troy chamber members, $35 nonmembers. Contact: Jessica Hruska, phone: (248) 641-1606; email: jessica@troychamber.com; website: troychamber.com/events/ top-troy-2017/ To submit calendar items 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.

Best Managed Nonprofit nominations due Sept. 8 Crain’s Best Managed Nonprofit contest this year will focus on how nonprofits are responding to shifting government and foundation funding priorities and the threat of government cuts. Examples could include, but are not limited to, moves made to diversify your organization’s revenue base or advocacy efforts. Applications are due Sept. 8. Finalists will be interviewed by judges the morning of Nov. 1. Applicants for the award must be a 501(c)(3) with headquarters in Wayne, Washtenaw, Oakland, Macomb or Livingston counties. Applications must include an entry form, a copy of the organization’s code of ethics, a copy of its most recent audited financial statement and a copy of its most recent IRS 990 form. First-place winners within the past 10 years are not eligible; neither are hospitals, HMOs, medical clinics, business and professional organizations, schools, churches or foundations. The winners will be profiled in the Dec. 4 issue, receive a “best-managed” logo from Crain’s for use in promotional material and will be recognized at Crain’s Newsmaker of the Year luncheon early next year. To submit a nomination, go to CrainsDetroit.com/nominate. For information about the contest, email Senior Reporter Sherri Welch at swelch@crain.com or call (313) 4461694.

Leaders in Complex Business Lawsuits and Class Action Litigation www.millerlawpc.com (248) 841-2200/ www.millerlawpc.com 950 West University Drive / Suite 300 / Rochester / Michigan / 48307 / (248) 841-2200

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CRAIN'S LIST: MACOMB COUNTY'S LARGEST EMPLOYERS

Ranked by full-time employees July 2017 Rank

Company Address Phone; website

Top local executive(s)

Full-time employees in Macomb County July 2017

Full-time employees in Macomb County July 2016

Full-time employees in Michigan July 2017

Worldwide employees July 2017

Type of business

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

Mary Barra chairman and CEO

19,777

18,407

52,427

221,083

Automobile manufacturer

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

Sergio Marchionne chairman and CEO

11,314

12,063

34,000

86,900

Automobile manufacturer

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

6,616

6,472

29,027

2,086,347

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

Jim Hackett CEO

4,560

4,175

48,000 B

McLaren Health Care Corp. 3235G Beecher Road, Flint 48532 (810) 342-1100; www.mclaren.org

Philip Incarnati president and CEO

2,776

2,714

22,500

Health care system

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

Gwen MacKenzie, senior VP, Ascension Healthcare

2,650

3,061

26,222

Health care system

Utica Community Schools 11303 Greendale, Sterling Heights 48312 (586) 797-1000; www.uticak12.org

Christine Johns superintendent

2,642 C

2,654 C

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

Wright Lassiter III president and CEO

2,448

2,766

18,520

Health care system

Macomb County 1 S. Main, Eighth Floor, Mt. Clemens 48043 (586) 469-7001; www.macombgov.org

Mark Hackel county executive

2,318

2,325

2,318

County government

Chippewa Valley Schools 19120 Cass Ave., Clinton Township 48038 (586) 723-2000; www.chippewavalleyschools.org

Ronald Roberts superintendent

1,586

Public school district

General Dynamics Land Systems 38500 Mound Road, Sterling Heights 48310 (586) 825-4000; www.gdls.com

Gary Whited president

1,491

1,658

1,491

Tracked combat vehicles, Stryker and specialty wheeled vehicles, light armored vehicles

Rick Snyder governor

1,283

1,298

State government

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

Art Van Furniture Inc. D 6500 14 Mile Road, Warren 48092 (586) 939-0800; www.artvan.com

Archie Van Elslander, chairman; Kim Yost, CEO

1,159

1,166

2,490

Retail home furnishings

L'Anse Creuse Public Schools 24076 F.V. Pankow Blvd., Clinton Township 48036-1304 (586) 783-6300; www.lc-ps.org

Erik Edoff superintendent

1,145 C

1,215 C

Public school district

Macomb Intermediate School District 44001 Garfield Road, Clinton Township 48038-1100 (586) 228-3300; www.misd.net

Michael DeVault superintendent

1,035 C

994 C

Intermediate school district

Adient plc E 49200 Halyard Dr., Plymouth 48170 (734) 254-5000; www.adient.com

R. Bruce McDonald chairman and CEO

970

8,815

80,569

Automotive seating

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

Lee Thompson district manager

835

18,577

508,908

Postal service

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

Don Walker CEO

747

668

10,235

159,000

Automotive parts supplier

Macomb Community College 14500 E. 12 Mile Road, Warren 48088 (586) 445-7999; www.macomb.edu

James O. Sawyer IV president

675

699

675

ZF 12001 Tech Center Drive, Livonia 48150 (734) 855-2600; www.zf.com

Franz Kleiner CEO

657

597

3,075

65,362

Tier-one automotive supplier in driveline and chassis technology as well as active and passive safety technology

Lipari Foods LLC 26661 Bunert Road, Warren 48089 (586) 447-3500; www.liparifoods.com

Thom Lipari president and CEO

647

655

802

1,157

Wholesale food distribution. Lipari Foods' truck fleet delivers to 12 states

U.S. Farathane 2700 High Meadow Circle, Auburn Hills 48326 (248) 754-7000; www.usfarathane.com

Andrew Greenlee president and CEO

539

558

4,572

Plastic injection molder, extruder, thermal compression molder

Faurecia North America 2800 High Meadow Circle, Auburn Hills 48326 (248) 724-5100; na.faurecia.com

Kevin Lammers U.S. president

491

1,391

3,392

100,000

Tier-one automotive supplier

BAE Systems Inc. 34201 Van Dyke Ave., Sterling Heights 48312 (586) 795-2220; www.baesystems.com

Mark Signorelli, Deputy & VP Business Development & Strategic Planning James Gouin CEO

414

83,100

A global defense, security and aerospace company that provides support and service solutions for defense, intelligence, and civilian systems

348

409

1,402

6,664

Automotive parts supplier

24 25

Tower International Inc. 17672 N. Laurel Park Drive, Suite 400E, Livonia 48152 (248) 675-6000; www.towerinternational.com

Federal government

Automobile manufacturer

Public school system

Community college

This list of Macomb County employers encompasses companies headquartered in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. Number of full-time employees may include fulltime equivalents. Companies with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. It is not a complete listing but the most comprehensive available. Crain's estimates are based on industry analysis and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies. Actual figures may vary. NA = not available.

B Company estimate. C Figures are FTE counts from the Center for Educational Performance and Information. D Art Van Elslander, chairman and founder sold the company to Boston-based private equity firm Thomas H. Lee Partners in February. E Adient spun off from Johnson Controls on Oct. 31, 2016, to become an independent company.

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CRAIN'S LIST: OAKLAND COUNTY'S LARGEST EMPLOYERS Ranked by full-time employees July 2017

Company Address Rank Phone; website

Top local executive

Full-time employees in Oakland County July 2017

Full-time employees in Oakland County July 2016

Full-time employees in Michigan July 2017

Worldwide employees July 2017

Type of business

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

John Fox president and CEO

18,301

17,696

28,061

28,071

Health care system

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

Sergio Marchionne chairman and CEO

13,099

12,564

34,000

86,900

Automobile manufacturer

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

Mary Barra chairman and CEO

9,687

9,242

52,427

221,083

Automobile manufacturer

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

Gwen MacKenzie, senior VP, Ascension Healthcare

5,474

4,408

26,222

Health care system

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

Lee Thompson district manager

4,195

18,577

508,908

Postal service

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

Wright Lassiter III president and CEO

4,085

3,405

18,520

Health care system

Oakland County 1200 N. Telegraph Road, Pontiac 48328 (248) 858-1000; www.oakgov.com

L. Brooks Patterson county executive

3,451

3,432

3,451

County government

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

Richard Gilfillan president and CEO

2,466

3,098

22,211

Health care system

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

Don Walker CEO

2,441

2,199

10,235

159,000

Comerica Bank 411 W. Lafayette, Detroit 48226 (248) 371-5000; www.comerica.com

Michael Ritchie Michigan market president

2,003

2,163

4,803

7,989

Financial institution

Flagstar Bancorp Inc. 5151 Corporate Drive, Troy 48098-2639 (248) 312-2000; www.flagstar.com

Alessandro DiNello president and CEO

1,979

1,915

2,610

3,489

Financial institution

Lear Corp. 21557 Telegraph Road, Southfield 48033 (248) 447-1500; www.lear.com

Matthew Simoncini president and CEO

1,932

1,834

3,864

155,927

Automotive supplier

Rochester Community Schools 501 W. University, Rochester 48307 (248) 726-3000; www.rochester.k12.mi.us

Robert Shaner superintendent

1,833 B

1,785 B

Public school district

McLaren Health Care Corp. 3235G Beecher Road, Flint 48532 (810) 342-1100; www.mclaren.org

Philip Incarnati president and CEO

1,831

1,802

22,500

Health care system

Oakland University 2200 Squirrel Road, Rochester Hills 48309 (248) 370-2100; www.oakland.edu

Ora Hirsch Pescovitz C president

1,764

1,815

1,778

Public university

Blue Cross Blue Shield of Michigan/Blue Care Network 600 E. Lafayette Blvd., Detroit 48226 (313) 225-9000; www.bcbsm.com

Daniel Loepp president and CEO

1,496

1,161

8,948

10,213

Health care insurer

Walled Lake Consolidated Schools 850 Ladd Road, Walled Lake 48390 (248) 956-2000; www.wlcsd.org

Kenneth Gutman superintendent

1,410 B

1,461 B

Public school district

Huron Valley Schools 2390 S. Milford Road, Highland 48357 (248) 684-8000; www.hvs.org

Nancy Coratti superintendent

1,362 B

1,287 B

Public school district

Delphi Automotive plc 5725 Delphi Drive, Troy 48098 (248) 813-2000; www.delphi.com

Kevin Clark president and CEO

1,316

1,295

Automotive supplier

Comau LLC 21000 Telegraph Road, Southfield 48033 (248) 353-8888; www.comau.com

Charles Dudek CEO

1,300

Manufacturing

U.S. Farathane 2700 High Meadow Circle, Auburn Hills 48326 (248) 754-7000; www.usfarathane.com

Andrew Greenlee president and CEO

1,269

1,040

4,572

Plastic injection molder, extruder, thermal compression molder

The Suburban Collection 1795 Maplelawn Drive, Troy 48084 (877) 471-7100; www.SuburbanCollection.com

David Fischer chairman and CEO

1,251

1,210

2,027

2,093

Automobile dealerships

Kelly Services Inc. 999 W. Big Beaver Road, Troy 48084 (248) 362-4444; www.kellyservices.com

George Corona D president and CEO

1,235

1,312

1,357

8,000

Workforce solutions

Nissan North America Inc. 39001 Sunrise Drive, Farmington Hills 48331-3404 (248) 488-4123; www.nissanusa.com

Kunio Nakaguro, corporate VP, Nissan product development

1,213

1,158

Automobile manufacturer

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

Rick Snyder governor

1,150

1,160

State government

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

Tony Tedeschi CEO

1,150

1,255

10,282

Health care system

Automotive parts supplier

This list of Oakland County employers encompasses companies with headquarters in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. Number of full-time employees may include fulltime equivalents. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. Actual figures may vary. NA = not available.

B Figure is FTE count from the Center for Educational Performance and Information. C Succeeded George Hynd as president in July. D Succeeded Carl Camden as president and CEO on May 10, 2017. LIST RESEARCHED BY SONYA D. HILL

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

SPOTLIGHT

The Women’s City Club building is 75,000 square feet at 2110 Park Avenue downtown.

A123 Systems under new leadership

Livonia-based automotive lithium-ion battery maker A123 Systems LLC named Peter Cirino, former president of its European operations in Germany, as the company’s CEO, it said in a press release. F o r m e r CEO Jason Forcier left the Peter Cirino company, effective last Monday, after four years as its top executive. Before joining A123 in May 2016, Cirino served in various leadership positions at Pennsylvania-based sensor manufacturer TE Connectivity and AMP Inc. Cirino takes over after a long road from startup to bankruptcy to buyout at A123. He earned a bachelor’s from Cornell University and an MBA from Duke University.

Free Press announces new executive editor

COSTAR GROUP INC.

Ilitches buy Women’s City Club building on Park Avenue downtown for $5.85M By Kirk Pinho kpinho@crain.com

An entity tied to the Ilitch family’s Olympia Development of Michigan quietly purchased the Women’s City Club building on Park Avenue downtown for $5.85 million in January. According to Wayne County records, an entity called DETWCC LLC sold the building to 2110 Park Avenue LLC. The former is registered to Eric Larson, CEO of the Downtown Detroit Partnership and president and

CEO of Bloomfield Hills-based Larson Realty Group. The latter does not expressly disclose who is behind it, but city records list the taxpayer address as 2211 Woodward Ave., the headquarters of Olympia Development and Little Caesars. An Olympia spokesman did not respond to multiple messages sent last week seeking comment on future plans for the building, which is 75,000 square feet. Larson would not comment on the sale. The price amounts to $78 per square foot.

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City records show Larson paid $4.6 million ($61.33 per square foot) for the William Buck Stratton-designed building at 2110 Park Ave. in December 2015. It was previously owned by developer Charles Forbes. Olympia is nearing completion of Little Caesars Arena on Woodward, where the Detroit Red Wings and Detroit Pistons will open their respective 2017-18 NHL and NBA seasons this year. It's the anchor for the District Detroit project, a planned multibillion-dollar effort to transform more than 45 blocks of greater

downtown around the arena. The building once housed the Women’s City Club, which was founded in 1919 and grew to a membership of over 8,000 in the 1950s, making it one of the largest in the world. The club left the building in 1975. Buck Stratton, husband of Pewabic Pottery founder Mary Chase Stratton, also designed the R. Thornton Brodhead Naval Armory along the Detroit River next to Gabriel Richard Park and near the Douglas MacArthur Bridge to Belle Isle.

DEALS & DETAILS ACQUISTIONS & MERGERS The Jenoptik Group, Rochester Hills, a German-based technology company that specializes in metrology and laser machines for the auto industry, acquired Five Lakes Automation, Novi, a provider of complex automated manufacturing solutions. Website: jenoptik.com. J

CONTRACTS J AEL Span, Van Buren Township, a global supply chain services company, is partnering with Cummins Inc., Columbus, Ohio, to provide warehousing operations for the Rocky Mount Engine Plant in North Carolina. Websites: aelspan.com, cummins.com.

EXPANSIONS J John D. Dingell VA Medical Center, Detroit, has added a patient and staff fitness center. Website: Detroit.va. gov. J Michael Baker International, Pittsburgh, Pa. an engineering, planning and consulting services firm, opened an office at 400 Renaissance Center, Suite 2601, Detroit. Phone: (313) 309-7179. Website: mbakerintl.com.

MOVES J Kensington Church, Troy, has moved its Clarkston campus to Clarkston Junior High, 6595 Waldon Road, Clarkston. Website: kensingtonchurch.org.

Veteran editor Peter Bhatia was named new executive editor of the Detroit Free Press, the newspaper reported last Thursday. The Pullman, Wash., native replaces Robert Huschka, who resigned in July after less than two years on the job. Peter Bhatia Bhatia, 64, was previously top editor at the Cincinnati Enquirer for more than two years, where he focused on advancing its digital presence and expanded its watchdog reporting, and doubled as regional editor for the USA Today Network’s Ohio Region, the paper said. At the Free Press, Bhatia will be tasked with reversing its audience decline while dealing with a shrinking newsroom that has lost much of its veteran leadership. He will be asked to boost its online audience and make the paper a major contributor to the USA Today Network.

United Shore names chief marketing officer United Shore Financial Services LLC named Sarah DeCiantis chief marketing officer, replacing Barbara Yolles, who left to become CMO at The Money Source Inc. in New York. DeCiantis, 35, previously served as vice president of marketing since 2014, a role that has not yet been filled. In her new position, she will lead marketing and strategy for United Shore and United Wholesale Mortgage, according to a news release. DeCiantis will also head public relations, advertising, social media and creative.

’SIDNETROIT C R A I N ’ S D E T R O I T CBRAIN US E S SBUSINESS // S E P T E M B E R 4 , 2 0 1 7

Page 2

FIRMS FROM PAGE 1

we’re the most competitive bidder, and oh, we happen to be have the bonus of being minority-owned.” Michelle Sourie Robinson, CEO of the Detroit-based Michigan Minority Supplier Development Council, which certifies minority-owned enterprises, said the organization has been working for the past several years to end pass-through organizations and is recently focusing on building larger minority companies in the supply chain. “Years ago, it was unheard of to see a $1 billion (minority-owned) business and the (automakers) tried a lot of different ways, to their credit, to move the needle for these business owners, but a symptom of slowgrowth were these pass-throughs,” she said. “We’ve gone in and audited our members and threatened to take away certification. It’s gone away, and we’re seeing many of them becoming more sophisticated and create the wealth that it takes to kill many ills in the minority community.” MMSDC launched in 2015 what it calls its Transformation Project to help automakers and large suppliers identify well-positioned minority-owned enterprises capable of sustainable growth in hopes they become major players in the industry. “Buyers are using fewer suppliers, that’s a reality, so we’ve got to focus on the minority businesses that are scalable,” Robinson said. “We’re working with the major automakers in the region to identify, grow and groom these companies now to create an ecosystem where MBEs are using other MBEs throughout the supply chain.” Robinson predicts in the next two

LARRY A. PEPLIN FOR CRAIN’S

Edward Schwartz, President and CEO, of MPS Group, and Charlie Williams, chairman and majority owner of MPS Group..

years a group of up to 15 suppliers will be part of the program, building the minority-supply base below them. “They will have their own leverage to build this community,” she said. “No one will be buying products from them because they are minority status, but because they are a great company that happens to be a minority-owned.” Redford Township-based supplier Piston Group, owned by former Detroit Pistons guard Vinnie Johnson, is a recent example of a minority-owned supplier transitioning from a commodity enterprise into a fullfledged manufacturer. With the help of Ford Motor Co., Piston closed on a $175 million acquisition of Takata Corp. subsidiary Irvin Automotive Inc. in September 2016. The deal made Piston the largest minority-owned supplier in the region with expectations to reach revenue of $2.8 billion by 2018, near-

ly five times the size of the business in 2012 at $570 million. Piston has been growing with contracts from Ford and others in recent years. In 2012, Johnson’s other entity, V. Johnson Enterprises LLC, announced the formation of a new joint venture with Valeo SA called Detroit Thermal Systems LLC. Expansion with Ford is expected to continue this year with the addition of lithium-ion battery pack assembly. Piston will assemble packs from LG Chem and Panasonic for use in Ford’s plug-in-electric vehicle lineup before extending to its battery-electric vehicles, Johnson told Crain’s. The supplier also planned to open two new plants in the next 12 months, supporting FCA US LLC and Toyota Motor Corp. Dave Andrea, executive vice president of research for Ann Arbor-based nonprofit Center for Automotive Re-

search, said more and more minority-owned suppliers are beginning to move toward true manufacturing capabilities, opposed to assembly operations, like Piston once focused on, which are more susceptible to cuts in a car sales downturn. “For many years, automakers didn’t focus on the customer-supplier relationship; the focus was on securing a prescribed number of what the minority spend should be for the purchasing group,” Andrea said. “This overwhelmed a lot of minority suppliers and overextended them, dangerously. Now there’s less focus on the service side of the minority spend and more concentration on the true value-added manufacturing companies. Any large supplier or automaker will be under pressure to consolidate the supply base with the ups and downs of the cycle. These minority suppliers are now beginning to hold themselves up with core qualities, and that’s how you keep yourself in the supply chain

Automotive News

The auto industry’s rush to develop self-driving vehicles, connected cars and electric vehicles has goaded suppliers into a feeding frenzy of acquisitions. This year, suppliers are expected to complete a record $57 billion worth of acquisitions, nearly double the value of deals in 2016, according to a study by London-based PricewaterhouseCoopers. The consulting firm added up 203 acquisitions that either closed or are expected to close this year, up from 166 in 2016. Deal makers were motivated by self-driving vehicles, connected cars and fuel economy, Dietmar Ostermann said, leader of PwC's automotive advisory team and co-author of the report. Those three areas “are driving a lot of this,” he said. “Suppliers are trying to find out what it really means for them and to what degree they need to change.” The study included all acquisitions completed for the year to date as well as deals expected to be finalized in 2017. Several trends emerged: J Chinese buyers initiated 17 percent of the deals, a sign they are globalizing their operations. J The big money is in electronics, which generated 36 percent of aggregate deal value. J Consumer electronics giants such as Intel Corp. and Samsung are making major acquisitions in a bid to es-

tablish an automotive presence. North American suppliers were the likeliest buyers — and also financially strongest, followed by Chinese vendors. Brazilian suppliers were the most distressed, and European vendors were the most likely acquisition targets. The report also measured the top 100 suppliers by their deep pockets and willingness to make acquisitions. Top deal-makers included Germany-based Robert Bosch GmbH, Germany-based Continental AG, Livonia-based ZF TRW, Sweden-based Autoliv Inc. and Tokyo-based Bridgestone Corp. While the fundamental technology trends — connected cars, self-driving vehicles and improved fuel economy — are clear, the timing of acquisition activity can be tricky. A number of automakers have announced plans to introduce electric cars and plug-in hybrids, but sales forecasts are a crapshoot. “Nobody is getting rich right now by focusing on electric vehicles, but some suppliers see the handwriting on the wall,” Ostermann said. “If you manufacture engine blocks, it doesn’t take a brain surgeon to figure out that 50 years from now, we're not going to have as many engine blocks.” While the timing of these trends is imprecise, traditional suppliers are feeling the heat. Now that automakers are designing “smart” cars — that is, connected cars that can drive themselves — the consumer electronics industry is buying seats at the poker J

table. South Korea-based Samsung Electronics Co. Ltd. this year completed its $8 billion acquisition of Stamford, Conn.-based Harman International Industires Inc., while Mountain View, Calif.-baesd Intel Corp. closed its $15 billion purchase of Jerusalem-based Mobileye this month. But the biggest of all was San Diego-based Qualcomm Inc.'s $47 billion acquisition of Netherlands-based NXP Semiconductors N.V. To gauge which supplier segments are generating the biggest profits, Ostermann's group calculated EBITDA — earnings before interest, taxes, depreciation and amortization — for each industry segment. Last year, the most profitable segment for suppliers was raw materials, with an aggregate EBITDA of 15 percent. The least profitable segment was interior trim, with an EBITDA of 7.7 percent. This comes as no surprise, since Ireland-based Johnson Controls International Plc, Southfield-based Lear Corp., Ontario-based Magna International Inc. and Van Buren Township-based Visteon Corp. all have sold off their interior operations. While that segment's survivors figure out how to make a profit, deal-makers will pay big premiums for electronics suppliers. “The electronics suppliers are getting very serious,” Ostermann said. Automotive News is a sister publication of Crain’s Detroit Business.

with the customers.” Reducing its offerings from seven business lines to only two — total waste management and industrial cleaning — did just that for MPS Group. It also centralized its purchasing department, saving the company $1.4 million in 18 months. “Our strategy became protect what we’re good at and improve performance,” Schwartz said. “Now we’re established in automotive and now we can do more to diversify into other industries.” MPS Group is currently bidding on contracts for companies in the pharmaceutical, natural gas and oil refinery industries. “When we started this process, we walked away from revenue,” Schwartz said. “That isn’t happening anymore because we’re in the right businesses with the right customers.” 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 // S E P T E M B E R 4 , 2 0 1 7

APPRENTICE

coordinator for Local 25’s apprenticeship program. Vann’s STEAP graduates are more prepared for the test than others, McDonell said. “He has prepped a lot of his guys so they have the confidence to take the test,” McDonell said. “They’re scoring real well. They usually score in the top 25 or even top 10.” As the region has experienced an increase in new construction, the ironworkers’ four-year apprenticeship program has grown from 93 apprentices in 2012 to 314 today, McDonell said.

FROM PAGE 1

The free apprenticeship test preparation course Vann teaches is largely a response to complaints from contractors working on construction of the new Little Caesars Arena that they couldn’t find qualified city residents to fulfill a requirement that Detroiters perform 51 percent of the work hours. Through April, the city had fined contractors $2.9 million for not meeting the minimum local labor requirement. Of the 1.8 million hours worked on the project, Detroiters were working just 27 percent of time, according to a city report. Goins completed Vann’s program at the end of December and by March he was working as an apprentice for B&A Structural Steel LLC, while attending the Ironworkers Local 25’s training school in Wixom. After two months of working on steel construction and reinforcement at schools, a hotel in Livonia and the downtown Detroit arena project, Goins was making $18-an-hour plus benefits. Earning double the state minimum wage is not what Goins predicted for his employment prospects when he was released from prison two days after Labor Day last year, after spending most of his adult years behind bars. “It was a huge break for me,” Goins said. In the past 15 months, Vann’s Skilled Trades Enrollment Assistant Program (STEAP) has had 18 graduates pass the ironworkers apprenticeship exam and five graduates accepted into an electricians apprenticeship program. “We build them into an all-around, qualified, employable worker so (contractors) can’t have any excuses for not hiring our guys,” said Vann, who has spent the past two years working on the arena project for Midwest Steel.

Finding workers As Detroit and the region experience a resurgence in new construction and rehabilitation, skilled trades labor unions and unionized construction companies have scrambled in recent years to find qualified workers. That has led to a renewed emphasis on skilled trades as a career path. But in Detroit, the traditional pipelines for skilled trades have been effectively broken for years, as evidenced by the near-death of Randolph Technical High School on the city’s west side. With a capacity of 700 students, Randolph’s enrollment had fallen below 100 students in recent years. Mayor Mike Duggan’s administration and several Detroit business leaders have recently stepped in to revitalize the program with a $10 million investment in the school’s facilities and programming, which will be expanded to adult classes at night. “There’s a business case to do it,” said Frank Woods, president of the Detroit Chapter of the Coalition of Black Trade Unionists. “Now that the city is really taking off, they see that in order for them to continue to sustain what they have here, they need to make sure they have the workforce.” Vann is trying to create a pipeline into predominantly white skilled trades unions that African American men like himself have not always had. “A lot of people have no clue about the skilled trades unions,” he said. “They don’t know about the money in it, the opportunity in it — they

Life after prison

PHOTOGRAPHS BY NICK HAGEN FOR CRAIN’S

Marquez Goins, 27, got out of prison a year ago and is now working as an ironworker apprentice at B&A Structural Steel LLC.

tending to be insular organizations. “It’s always been family and friends who know what we do and we’ve always relied on that,” Aguirre said. “We need more than just the sons of ironworkers, the cousins of ironworkers. We need more guys. We need people.”

Prepared for test

Lionel Williams is a 49-year-old Detroiter and ironworker who graduated from the Skilled Trades Enrollment Assistant Program (STEAP) in June 2016.

don’t know nothing.” Though small in numbers, Vann’s program does what the labor union often struggles to do, said Dennis Aguirre, president of Iron Workers Local 25. “We’ve done a poor job marketing ourselves to the public,” Aguirre said. “That’s where these programs like Dino’s helps us out in marketing the skilled trades and getting our word out there.”

Before ground was broken in September 2014 on Little Caesars Arena, just 61 of the 1,500 members of Iron Workers Local 25 were from Detroit. As the massive project comes to an end, Local 25’s ranks have increased to 1,700 and the number of Detroiters has inched up to 85, Aguirre said. Aguirre, a third-generation ironworker, acknowledges the reality that today’s growing labor shortage is partly a result of skilled trades unions

Dino Vann is a 34-year-old ironworker who teaches the apprenticeship preparation classes.

During his weekly classes inside a classroom in the former St. Cecilia Catholic school on the city’s west side, Vann toggles between a tutorial on workplace soft skills to using a chalkboard to make the recruits work through the type of math problems they’ll face on a job site. “You’ve got to understand fractions,” Vann told a group of 20 students on a recent Friday night. “... That’s the core of iron work — it’s fractions.” Scoring high on the apprenticeship entrance exam is more important than simply passing. The Iron Workers Local 25 Training Center in Wixom starts a new class of apprentices starts every six to eight weeks, choosing from a pool of applicants with the 25 highest test scores, said Kevin McDonell, training

Vann recruits most of the prospects for his pre-apprenticeship program through Better Man Outreach, a mentoring organization for adult men in Detroit, many of whom who have had run-ins with the law in their youth. Vann himself served two stints in prison. In February 2015, he got out of prison after a two-year sentence for resisting arrest of a police officer. He served a prior sentence for dealing drugs in his early 20s. Before the second stint in prison, Vann had passed the ironworkers apprenticeship exam. When he got out, a spot in the union was still there for him. He immediately went back to work, spending most of his time at the Little Caesars Arena project. Vann now leads a busy life, working overtime most weeks, raising five children at home and teaching his pre-apprenticeship class three nights a week. “There’s no way you could work my hours and still be out on the streets,” Vann said. “I know if there’s one of me, there’s got to be thousands.” In June 2016, the first graduate of Vann’s program was 49-year-old Lionel Williams, who spent 16 years in prison for committing armed robbery as a teenager. After getting out of prison, Williams put himself through college and eventually graduated with a engineering degree from Michigan Technological University in 2012. But a college education didn’t erase the criminal background record on job applications, Williams said. “Tons of rejections,” he said. Two years ago, Williams moved back to Detroit and decided to use his math skills to get a skilled trades job. Williams said he scored well on an electrician apprenticeship test, but not well enough to get accepted into that program. Then he tried to carpenters union. After passing that test and getting a union card, Williams said he found it difficult to find work through contractors. “When I tried to get into the trades on my own, I would hit a brick wall,” he said. Last year, Williams got connected with Vann through Better Man Outreach. After passing the entrance exam and drug test, Williams said he found the Iron Workers union cared less about a crime he committed in the late 1980s and more about his work ethic and ability to solve problems from a steel beam in the air. “There’s no background checks. There’s no human resources. There’s the union,” Williams said. “When I could just get in and prove to them the type of person I am, I was fine.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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TRADES FROM PAGE 3

“For starters, the construction of our Major League roster is taking on a more ‘home-grown’ approach. We have committed to spending and investing significant resources in player development — including the addition of domestic and international scouts, minor league instructors, support programs for players, world-class facilities in Lakeland and renovations to our Dominican Academy. Further investment has been made in the aggressive buildout of our analytics department, and the introduction of Caesar, a decision-making support program that houses reports from our talent evaluators, as well as our baseball analytics.” To that end, Thursday’s trades strip a potential $166.5 million in future salary off the books. That helps ensure they aren’t subject to Major League Baseball’s luxury tax, which cost the Tigers $4 million last season. The tax threshold for 2018 is $197 million. The Tigers began the season with a $200 million-plus player payroll — a legacy of late billionaire owner Mike Ilitch’s free-spending ways. With Verlander and Upton gone, the active payroll for 2018 now stands at $106 million, according to salary tracker Spotrac.com.

ECONOMY FROM PAGE 1

equity investments and private bond financing intended to help with facility expansions, retooling and recruiting. That’s more than double the number of jobs from similar projects at this point last year, and nearly a quarter more private capital. Crain’s did not include amendments to previous state incentive awards in its analysis, with the exception of outstanding Michigan Economic Growth Authority, or MEGA, tax credits when the remaining value was capped. And those figures don’t count the possibility that Michigan will land an automotive research operation from Taiwanese electronics manufacturer Foxconn Technology Group, or any number of projects in the pipeline, that are expected to rely on a new income tax incentive now coming on line. Michigan’s new “good jobs” incentive, which allows companies that add hundreds or thousands of jobs to keep some or all of their income tax withholdings for new hires, took effect Aug. 25. It is seen as a tool that could help Michigan in its ongoing negotiations with Foxconn, which reportedly is considering thousands of jobs. National trade publications geared toward site selectors have taken note: Michigan has ranked among the states with the most announced projects in the country for several consecutive years. “We’ve had a very good year,” said Josh Hundt, interim chief business development officer for the Michigan Economic Development Corp. “We have seen more of the larger projects ... in the 300 to 500 (job) range.”

Many local projects Oakland, Wayne and Macomb counties won nearly two-thirds of the surveyed projects, and 84 percent of the proposed jobs. Most of the projects that won incentives so far this year were pitched by automotive suppliers or OEMs, including Southfield-based Lear Corp. for a new manufacturing plant

That would rank 12th in MLB this season, which the Tigers began with the fourth-highest payroll. The Tigers overnight became a mid-market team for payroll after years of spending Christopher like a New York or Ilitch: A new Los Angeles. strategy. Mike Ilitch, who died at age 87 in February, spent $1.6 billion on players between 2006 — the start of the Tigers’ most recent successful era — and this season. His son, Christopher Ilitch, is now in the owner’s role and is committed to the new business strategy. His father developed a reputation for a willingness to write gargantuan checks for star free-agents or to authorize blockbuster trades for expensive talent. The younger Ilitch, if he doesn’t sell the team as some suggest he might, could buy high-priced talent in the future if it’s seen as the missing piece of a contending team. But for now, the rebuild is fully underway with a salary dump as the farm system is restocked. Verlander, who is on a six-year, $162 million deal, is due $28 million each of the next two seasons and has a $22 mil-

lion option for 2021. The Tigers signed Upton before last season to a six-year, $132.75 million free-agent contract that has $88.5 million remaining — if he doesn’t exercise an opt-out option after this season. The Verlander deal wasn’t a complete salary clear-out. Bob Nightengale, USA Today’s baseball columnist, reported on Twitter that the Tigers will pay the Astros $8 million in both 2018 and 2019 to offset Verlander’s salary the next two seasons. In other moves that will save the Tigers money, Detroit before the season released pitchers Mike Pelfrey ($8 million) and Mark Lowe ($5.5 million) — who both got their full salaries this season but are off the books after 2017 — and in June they released closer Francisco Rodriguez, eating his $6 million salary for 2017. Those moves didn’t generate the dramatics that Thursday saw. The Verlander deal unfolded in a wild hour, where baseball insiders reported on Twitter that no deal was in the works, then one was underway. Then it was off again, sparking a burst of relief from Detroit fans and spite from Astros fans. Then, the trade was back on, and Verlander was gone. The deal was reached at 11:59 p.m., one minute before the trade deadline. MLB Network reporter Jon Morosi

tweeted that Tigers executives were at Verlander’s home late into the night. This summer’s moves could mean the Tigers will have a harder time selling season tickets for 2018. They sold a bit more than 16,000 this season for 41,299-seat Comerica Park. The franchise record for was about 27,000 in 2008, sparked by the trade that netted slugger Miguel Cabrera. Season tickets are a revenue lifeblood of pro sports teams because they’re guaranteed income not subject to in-season fluctuations of fan interest. The front office annually deploys an ever-more-sophisticated promotions campaign, but bobbleheads and fireworks can do only so much when a ballclub is losing games. While ticket sales account for some revenue, the Tigers and Major League Baseball’s 29 other clubs get most of their money from local and national broadcast rights deals. In the Tigers case, they receive $50 million alone annually from their contract with Southfield-based Fox Sports Detroit. Through 63 home games this season, the Tigers have averaged 29,622 fans per game., down 8,444 since 2013, when Detroit last made the American League Championship Series.

at General Motors’ old Buick City complex in Flint, and Ford Motor Co. for expansion and retooling at plants in Flat Rock, Wayne and Romeo. Matt Gibb, deputy Oakland County executive, said the county has been running above-average in the number of its projects winning Michigan Strategic Fund approval so far this year. It has made an effort to increase the types of sectors that operate in the county. As an example, Williams International Co. LLC plans to move its headquarters from Commerce Township to a former film studio in Pontiac, a $344.5 million project expected to create 400 jobs by 2022. Williams International builds small gas turbine engines for aviation and military uses. Among the project highlights: J Lear will build a $30 million, 156,000-square-foot automotive seating factory in Flint, creating 435 jobs to work on seats for full-size trucks. The Michigan Strategic Fund gave Lear a $4.4 million grant. J Korean electronics giant LG Electronics Inc.’s North American division plans to spend $25 million to build a 250,000-square-foot assembly plant in Hazel Park, expand its engineering and design facility in Troy and hire nearly 300 people to focus on electric vehicles. LG won a $2.9 million grant. “We were able to piece together a package because of the talent and because of the market,” Gibb said. “It still takes the ability to incentivize a company like that so their business case in comparison to where they might go somewhere else is really rounded out.” J Kalamazoo-based Stryker Corp. plans to build a $130 million corporate campus for its medical instruments division in Portage, which will include a customer experience center and showroom along with research and development space. The project should be finished in late 2019, according to the company. Stryker won a $1 million state grant in December 2016 and approval of a brownfield tax capture in February. J Penske Logistics LLC, a subsidiary of Pennsylvania-based Penske Truck

Leasing Co., will spend $98.6 million to open a 606,000-square-foot distribution center for refrigerated and frozen foods in Romulus. The company plans to create 403 jobs. The strategic fund approved a $2.5 million grant in August. J Cincinnati-based grocer The Kroger Co., which operates its Michigan division out of Novi, plans to open a nearly $25 million distribution center in Chesterfield Township, with plans for 377 jobs. The state awarded Kroger a $2.1 million grant. J Seattle e-commerce giant Amazon. com will open two fulfillment centers in Livonia and Romulus — the Livonia facility was announced in December 2016 — worth a combined $229.9 million in investment and bringing at least 2,600 jobs. Amazon won $12.5 million in grants for both projects. Amazon’s decision to enter the Detroit market gets the company closer to more domestic customers, but also to the Canadian market, said Ben Conwell, senior managing director and e-commerce practice lead for real estate services firm Cushman & Wakefield, who works out of Seattle. The e-retailer prioritizes proximity of inventory to customers, speed and delivery of transportation, proximity to transportation and major freeway exits, availability of large buildings and proximity to national parcel carriers when it makes location decisions, Conwell said. Southeast Michigan has an advantage that it has old manufacturing sites that could be converted into warehouses close to rail and freeway access, he added. He should know: Before joining Cushman & Wakefield, Conwell worked as director of North America logistics real estate for Amazon Fulfillment Services, the logistics and operations subsidiary of Amazon.com. “Amazon has very, very particular algorithms that they use to determine when to invest in which markets, so it was only a matter of time before getting to Michigan,” he said. “Obviously, a key piece that got cleared up awhile ago was the sales tax issue, the sales tax hurdle, which kept Amazon out of a lot of states.” Michigan began requiring the state’s 6 percent sales tax to be paid on

internet sales in October 2015. Amazon has made multiple investments in the region, which Conwell said has been part of the company’s recent strategy — returning to the same market for multiple investments, both large and smaller.

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

Michigan’s reputation Conwell’s colleague, Andy Mace, says Michigan has a good national reputation and is generally cost-effective from a labor standpoint compared with other Midwestern states. The state’s incentives are not industry-leading, he said — until the “good jobs” incentive was adopted, Michigan had a cash incentives program that economic development leaders in the state said was less effective for the largest projects — but the state has a strong workforce and a well-developed industrial base. “I get a box from Michigan every month with products made in Michigan and industries that are locating in Michigan,” said Mace, managing director in strategic consulting for Cushman & Wakefield, based in York, Pa. “Michigan is overcoming stereotypes of higher unionization, dominated by the auto industry.” It’s difficult to quantify how Michigan stacks up against other states when it comes to landing deals. For one, states offer different types of incentives programs, so comparing state spending often yields apples-to-oranges data. Critics of state incentive programs point to a lack of transparency that makes it challenging to get a complete picture on a state’s risk exposure and whether companies follow through with their promised plans. Good Jobs First, a nonprofit policy resource center that promotes transparency in economic development incentives, reported in 2013 that Michigan led the nation in what it calls “megadeals” — those totaling at least $50 million — and trailed only New York in terms of the overall value of so-called deals. Michigan also ranks high when it comes to general business subsidies, the group found. A number of companies receiving Michigan incentives this year — in-

Tigers trades AUG. 31 Justin Verlander Detroit sends the former Cy Young winner and American League MVP to the Houston Astros for three minor-leaguers: Franklin Perez, outfielder Daz Cameron and catcher Jake Rogers, as well as a player to be named later or cash. Justin Upton The outfielder is sent to the Los Angeles Angels of Anaheim for pitching prospect Grayson Long and a player to be named later or cash. Upton is batting .279 with 28 home runs and a team-leading 94 RBI. His wins above replacement, or WAR, of 5.0 is the highest on the Tigers, according to Baseball Reference. JULY 31 Detroit trades catcher Alex Avila and closer Justin Wilson to the Chicago Cubs for young infield projects Jeimer Candelario (third base) and Isaac Paredes (shortstop). The deal also calls for a player to be named later or cash. JULY 18 The Tigers dealt outfielder J.D. Martinez to the Arizona Diamondbacks for prospect infielders Dawel Lugo, Sergio Alcantara, and Jose King.

— Bill Shea cluding Ford, FCA, Amazon and LG — are on the group’s list of the top 100 parent companies receiving business subsidies. Experts who track incentives, including Good Jobs First Executive Director Greg LeRoy and Timothy Bartik, a senior economist with the W.E. Upjohn Institute for Employment Research in Kalamazoo, have attributed incentive awards to politicians who run campaigns on the promise of creating jobs. Michigan seems to be doing well on the jobs front. Site Selection magazine, a trade publication focused on business expansion, ranked Michigan among the top 10 states by number of announced projects for at least four straight years. In its May 2017 issue, the magazine also ranked Michigan as the top state for business competitiveness in what it defined as the East North Central region — including Ohio, Illinois, Indiana and Wisconsin. It ranked fifth overall when accounting for such things as total capital investment, total jobs created and tax climate. Hundt, of the MEDC, attributes rising business interest to multiple factors: Michigan’s regulatory and business tax changes under Gov. Rick Snyder, Detroit’s post-bankruptcy resurgence, a talented workforce, proximity to supply chain and logistics infrastructure, a growing and diversifying automotive industry. Automakers and suppliers are transitioning away from simply building cars and SUVs in order to grab a growing piece of the burgeoning mobility industry. Ford and GM are investing heavily in startups and technology that support connected and self-driving vehicles. Michigan reportedly is in contention for an automotive research operation from Foxconn, a project its chairman, Terry Gou, teased to Chinese reporters on Snyder’s recent trade visit to the country. “We absolutely want to continue to build on and promote our strong automotive heritage and continue to be the epicenter of the North American automotive marketplace,” Hundt said. “At the same time, we understand the need to continue to evolve as an economy.”

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

EVENTS FROM PAGE 3

www.crainsdetroit.com Editor-in-Chief Keith E. Crain President KC Crain Publisher/Editor Ron Fournier, (313) 446-1674 or rfournier@crain.com Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Product Manager/Marketing and Events Kim Winkler, (313) 446-6764 or kwinkler@crain.com Digital Product Manager Carlos Portocarrero, (313) 446-6056 or cportocarrero@crain.com Creative Director David Kordalski, (216) 771-5169 or dkordalski@crain.com News Editor Beth Reeber Valone, (313) 446-5875 or bvalone@crain.com Special Projects Editor Amy Elliott Bragg, (313) 446-1646 or abragg@crain.com Design and Copy Editor Beth Jachman, (313) 446-0356 or bjachman@crain.com Research and Data Editor Sonya Hill, (313) 446-0402 or shill@crain.com Newsroom (313) 446-0329, FAX (313) 446-1687, TIP LINE (313) 446-6766

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Keynote speakers for Technology in Motion include: Dan Gilbert, chairman of Quicken Loans Inc.; Detroit Mayor Mike Duggan; Lear CEO Matt Simoncini; Burkhard Huhnke, seDan Gilbert: To nior vice president give keynote of e-mobility and speech. product innovation at Volkswagen of America Inc.; Rod Davenport, CTO for the state of Michigan; Paul Roger, director of the United States Army Tank Automotive Research, Development and Engineering Center in Warren; and Kathy Winter, vice president and general manager of automated driving solutions at Intel Corp.; among others. The event will also feature education panels of experts on the topics of

STEM education, mobility solutions, autonomous vehicles, connectivity and more. A startup pitch competition and hackathon are also part of the festivities. Nissan is also bringing its 2018 Leaf electric car, which is equipped with several autonomous technologies, to the show. It’ll be one of the first public appearances for the car following its global debut. Quicken Loans is presenting a sister event to Technology in Motion, which runs Sept. 7-9, called Detroit Moves. Demonstrations of advanced mobility technologies will be held at Campus Martius, Spirit Plaza and around Cobo. Demonstrators include IAV Engineering, GenZe, Magna, and more. KC Crain, president and COO of Crain Communications and co-founder of the event with Graff, said the Detroit Moves portion will serve as a conduit for attendees and city visitors to connect what’s happening inside Cobo with how that technology is implemented in the streets. “If obviously gives people some-

thing to do when they walk out of Cobo, but it also serves to get people more engaged with the city itself what’s happening dowtown,” Crain said. Graff said Gilbert pushed for the event, which Graff and partner Crain Communications, the parent company of Crain’s Detroit Business, held on a much smaller scale at the College for Creative Studies in past years. Gilbert wanted a true automotive technology event in the summer in Detroit, as opposed to the North American International Auto Show which takes place in January every year. “He loves the concept so much, he told us to make this bigger, to do it at a time of year when you can really highlight the city and the technology not in the dead of winter,” Graff said. “The question became: Can we have one seminal event in Detroit that shows off all the new technology that’s driving Detroit? We want this to become a SXSW (Texas music, consumer tech and culture show), and I think we can do it.”

Detroit Moves When: Sept. 7-9. Where: Campus Martius, Spirit Plaza What: Technology demonstrations for IAV Engineering, Flying Car, Magna and more Free and open to the public

Crain hopes the event will spark ancillary events throughout the city in future years. “We don’t want this to be just one insulated event at Cobo,” Crain said. “We’re urging others to hold their own event the same week in the future. That’s what really helps Detroit and the technologies we’re developing here.” Graff expects 2,500 to attend the event, which is open to the public, unlike CES. Tickets range from $10 to $150 and can be purchased at timdetroit.com. Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

LAWSUIT FROM PAGE 3

But David Gillam, the city’s attorney, contends that because the city commission deemed the private office building a “public benefit” as it attempts to add more Class A office space downtown, such an investment is well within its legal right. “Any lawyer I’ve spoken to, any real estate professional I have spoken to, nobody has heard of anything like that,” Holtz said. The complaint also says that the city’s portion of the project — a new city hall, police department headquarters, parking deck and public park — would have to be paid for illegally by issuing tens of millions of dollars in bonds when the city is already above its debt limit, which the charter stipulates can be no more than 5 percent of its state-equalized value of about $2.8 billion, or $169 million. But according to Gillam, state law, which trumps the city charter, allows Royal Oak to have bond debt of 10 percent of its SEV, or about $280 million. And the suit also contends the development would eliminate hundreds of parking spaces in a downtown where parking is at a premium. The elimination of those spaces would harm the businesses and landlords, whose property abuts the planned development at Main Street and 11 Mile Road in the trendy downtown nestled between Ferndale and Birmingham, the lawsuit says. Ron Boji, head of The Boji Group, says the parking situation will actually improve once the project is complete, but acknowledges that temporary headaches would be caused. “It’s going to be better than it is today, along with bringing 700 new employees” to the planned privately owned office tower. Boji said a parking study on the project will be presented Sept. 12 before the planning commission which will show that his and Surnow’s development will actually have a net positive effect on parking in the area, which sees the greatest level of activity as people head there for its lively nightlife on the weekends. “Is there going to be 6 to 8 months of interference, of disturbance of people parking while all four developments are going up? Yes. But that’s progress.”

A rendering shows the Main Street view of a planned downtown Royal Oak project.

He also said the $5.5 million in city equity is an “economic incentive.” “It is done all across the state. The MEDC (Michigan Economic Development Corp.) does it every day. Municipalities do it all the time.” The city commission unanimously approved the development agreement, and resolutions authorizing up to $18 million in revenue bonds and $40 million in capital improvement bonds, last week.

Plans shift The complaint is the latest twist in the ongoing effort to get Royal Oak a new city hall, plus add more office space and parking. The project was originally conceived to alleviate a handful of concerns: an aging city hall building for municipal employees and a parking shortage that drives businesses and patrons alike nuts. In 2016, when details of the project were first revealed, Central Park Development Group was to build a 190,000-square-foot office building that would include 30,000 square feet for city government operations and about 130,000 square feet of leasable office space with 20,000-square-foot floor plates. The rest of the building was to be retail /restaurant space. It was expected to be financed with about $50 million from the city raised from the sale of bonds and another $50 million from Central Park Development Group, including a construction loan secured by the development entity. But plans shifted. As it currently stands, the city would occupy its own new building, having opted out of taking space in the pri-

vately owned building. Boji said that “if everything goes right,” construction on the six-story office building would begin in December and be complete by the first-quarter 2019. Construction on a 565-space parking deck would begin in the first quarter next year and be complete by the end of 2018. The city hall and police headquarters would start construction in the middle of 2019, and then the park and new civic buildings would be completed by spring 2020. “You can sue over just about anything,” Boji said. “I respect the court system. We will continue to make progress on a transformational project for Royal Oak.” The city has filed for summary disposition of the lawsuit; a decision by Judge Cheryl Matthews isn’t expected until at least October.

Other lawsuits The Royal Oak City Center isn’t the first large development in the region to face legal challenges. For example, activist Robert Davis filed lawsuits against the Detroit Downtown Development Authority and Brownfield Redevelopment Authority, as well as the Detroit Public Schools Community District, this year over public financing for the new Little Caesars Arena downtown, which is slated to open next week with concerts by Kid Rock. And Oakland Township ended up in federal court two years ago facing a pair of housing discrimination lawsuits centered on a proposed $93 million senior and disabled living community proposed by Auburn Hills-based Moceri Cos. The developer sued the township in

KRIEGER KLATT ARCHITECTS

a zoning dispute over the Blossom Ridge project proposed in 2011 at Adams and Dutton roads with 134 congregate care living units, 60 four-plex ranch units and 44 duplexes, all designed for the elderly and disabled. A 2016 settlement allows Moceri to build 329 residences: 100 congregate care; 21 two- and three-bedroom cottages; 20 duplexes; 48 four-plex ranchstyle residences; 56 assisted living health and wellness suites; and 84 townhouses.

New buildings There are a pair of other new office buildings going up in Royal Oak that have not received similar equity contributions from the city. The first is the $25 million planned mixed-use building at 600 S. Main St. at Sixth Street by Downtown Royal Oak LLC, the ownership team of which includes executives from Bingham Farms-based Burton-Katzman LLC and other investors. It’s expected to include 80,000 square feet of Class A office space and another 20,000 square feet of retail space, plus another 428-space parking deck with a planned completion by summer 2019. The other is the 74,000-square-foot building under construction at 150 West Second at 11 Mile Road by Southfield-based developer Etkin LLC. The total project cost is about $20 million and it's expected to open next year. Josh Suardini, vice president of Etkin, said the 150 West Second project is 100 percent leased and that “steel is up in the air.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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

THE WEEK ON THE WEB

RUMBLINGS

AUGUST 25 - 31 | For more, visit crainsdetroit.com

Midtown Detroit unveils Selden Corridor plan

planned $20 million redevelopment of Selden Corridor in Midtown will include a bar arcade, brewing school, meat-centric restaurant, eco-homes and public outdoor workspace for entrepreneurs. Midtown Detroit Inc. announced the updated plans for the mixed-use projects, known as the Selden Corridor Initiative, on Selden Street between Second Avenue and Fourth Street last week. The community development agency started the initiative earlier this year and development is expected to be complete by late fall next year. “Once complete, this will be a place for all people — entrepreneurs, women, people of color — to build skills,” Marcia Ventura, senior VP of Invest Detroit, said of the developing tech corridor during a media event. The project is being rolled out as a catalyst for future development in the neighborhood as it taps into momentum of projects that have sprouted up before it, like Selden Green Alley, Selden Standard and The Selden condominiums. “The Selden Corridor Initiative will begin to create linkage to other developments underway,” said Susan Mosey, executive director of Midtown Detroit Inc., the nonprofit development organization leading the efforts. Barcade, a national chain that couples craft beer with classic video games, will open its first Michigan location at 666 Selden St. The building will also house a brewing school that will offer a bachelor’s degree in fermentation science in partnership with Eastern Michigan University. The school is being funded by Midtown Detroit and 3Mission Design and Develop-

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

700

The number of lawsuits the city of Detroit was in the process of filing last week against landlords and housing investors in a new effort to collect unpaid property taxes on abandoned homes.

$135 million The five-year deal the Detroit Lions gave quarterback Matthew Stafford. It's the most lucrative contract in NFL history.

5,000

The number of Detroiters' voices that can be heard on songwriter and Detroit native Allee Willis' song "The D," to debut at the Detroit Institute of Arts.

ers, which owns Jolly Pumpkin Pizzeria and Brewery on Canfield in Midtown, according to a news release.

BUSINESS NEWS J Demolition started last week on a 136-year-old house owned by Olympia Development of Michigan near Little Caesars Arena. J Comcast Corp. is providing a fiber-based Wi-Fi network for Little Caesars Arena and The District Detroit, making it the “largest, most technologically advanced mixeduse development in the U.S.,” Olympia Entertainment and the internet provider say. J A restaurant created in collaboration with Macomb County-born musician Kid Rock called Kid Rock’s Made in Detroit will join the lineup of restaurants and bars at Little Caesars Arena.

J Belfor Property Restoration agreed to a deal as a Landmark-level partner at Little Caesars Arena and financial services company Rehmann is a Cornerstone-level partner. J Rochester College is offering discounted tuition to students impacted by Marygrove College’s abrupt decision to close its undergraduate program after the fall semester. J A renovated Victorian mansion in Brush Park that once housed a Detroit lumber titan has sold to a new owner, Jeffrey Rohr, a Grand Blanc-area optometrist, for $2.65 million. J Nexteer Automotive Corp., an Auburn Hills-based supplier of driveline and steering systems, has entered a long-term agreement with WABCO Holdings Inc., a Brussels based-supplier of automotive technology and safety solutions. J Detroit Venture Partners assisted NCT Ventures in leading an investment funding round for Columbus, Ohio-based PriorAuthNow, which closed on $3.6 million in investments. J The Hagerty Group has purchased car-rental site Classics & Exotics, a graduate of the Techstars Mobility program in Detroit. J Detroit Free Press columnist Rochelle Riley is hosting a new daily talk show on 910AM Superstation starting Sept. 5. J Michael Baker International has set up its first Michigan office in the Renaissance Center in downtown Detroit. J Petzold Enterprises’ rejuvenation project at the Warren Tech Plaza across from the General Motors Tech Center is starting to reap benefits, as retail space has become 90 percent full there after Old Navy signed a lease recently. J Chicago deep-dish pizza purveyor Giordano’s Pizza is opening a location in the former Bagger Dave’s Burger Tavern spot in downtown Detroit. J Detroit-based Atwater Brewery signed a contract with M1 Distribution Inc., a deal that will help the company reach more retailers in Michigan.

Vernors cans receive a Pure Michigan look

imited edition Vernors Ginger Ale cans emblazoned with well-known Michigan lighthouses are rolling into stores as part of a partnership between Vernors maker Dr. Pepper Snapple Group and tourism campaign Pure Michigan. The Texas-based drink company has the right to use Pure Michigan's logo on all its packaging and is doing so for the rest of the year, said Beth Hensen, DPSG's market development manager for the Great Lakes region. But the cans feature more than just a logo — images of Big Sable Point, Crisp Point, Eagle Harbor, Grand Haven and Tawas Point lighthouses — will be available only from August to mid-October, and only as 12-packs, Hensen said. "We all felt as a company that it would be a great tie," she said. "For us, it gives us that extra thing to talk to a retailer about. It's something nice to talk about that represents the

state." The photos on the cans were taken by Michigan nature photographer Neil Weaver, according to his Facebook page. The lighthouses vary by 12-pack, with each can in a pack having the same lighthouse on it, she said. They'll be available soon from retailers across the state. Vernors was born at a pharmacy on Woodward Avenue in downtown Detroit more than a century ago. It has since become a local treasure — the ginger soda is distributed nationally (though can be hard to find in some regions), but the largest percentage of sales comes from the Great Lakes region, said DPSG spokesman Chris Barnes. And if you're buying a can of Vernors around here and wondering where it was made? Barnes says Holland, Mich. The company has a production facility there that services the entire state's Vernors supply, he said.

OTHER NEWS

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

Allied Signs Inc. workers on Wednesday install a sign for Giordano’s Pizza, a Chicago deep-dish pizza chain that is opening a location in downtown Detroit at 1224 Randolph St. It is opening in the former Bagger Dave’s Burger Tavern spot. An opening date has not yet been set, a Giordano’s representative said.

J Michigan companies and nonprofits such as the Detroit-based American Red Cross of Michigan are bringing food and water, fuel, restoration equipment and more to those in areas of Texas flooded by Hurricane Harvey. J A Michigan Court of Claims judge tossed out a lawsuit filed by six companies owned by Ambassador Bridge owner Manuel “Matty” Moroun that sought to challenge construction of a new Detroit River bridge to Canada. J Hillary Clinton is stopping at Hill Auditorium in Ann Arbor on Oct. 24 as she tours the country this fall to promote her memoir "What Happened." J The state is soliciting proposals due Oct. 25 to redevelop the former Detroit House of Corrections property in Plymouth Township with the goal of it becoming part of the Michigan International Technology Center in the growing Five Mile Road corridor.

CITY OF DETROIT

Hands-On Preservation Experience of the National Trust for Historic Preservation will hold a HOPE Crew Community Day to help rehabilitate Historic Fort Wayne on Sept. 10.

Historic Fort Wayne to get preservation work Sept. 10

ands-On Preservation Experience of the National Trust for Historic Preservation will hold a community day to help rehabilitate Historic Fort Wayne on Sept. 10. In collaboration with the City of Detroit Recreation Department, the Historic Fort Wayne Coalition, the Michigan Historic Preservation Network, the Preservation Trades Network and the National Park Service’s National Center for Preservation Technology and Training, the effort seeks to help preserve and catalyze plans for the site, a news release said.

Called HOPE Crew Community Day, volunteers will learn basic preservation carpentry, masonry, painting, and window repair skills. The event will also include a block party. Historic Fort Wayne, in Detroit’s Delray neighborhood, contains the original 1848 limestone barracks building, 1845 star fort, commanding officers house, Spanish-American War guard house and the Tuskegee Airmen Museum, which are open to the public. Volunteers can register to help with the preservation efforts at tinyurl.com/yacjgoeg.