Crain's Detroit Business, Oct. 16, 2017 issue by Crain's Detroit Business

OCTOBER 16 - 22, 2017

Rossetti design bucks stadium traditions

Google takes aim at District Detroit for new office Firm plans move of Birmingham office. Page 4

Page 14

Health Care

Tourism

Into 2nd decade, ‘Pure Michigan’ campaign rolls on

State tourism officials say campaign brings in more than $1 billion. That’s tough to prove, but it’s definitely made a mark.

By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

The first time the words “Pure Michigan” are believed to have been used in connection with Michigan tourism was at the top of a sheet of lined notebook paper. It was 2006. The worst recession in a generation was a year away, but Michigan’s economy had been struggling for years. State travel leaders were looking for a new strategy to get visitors to come to a place that needed a boost. Mark Lantz scrawled the now-ubiquitous phrase at the top

of a page during a meeting with the state’s tourism agency, Travel Michigan. The advertising agency where he worked, McCann Detroit, based in Birmingham, had just been hired to design a new tourism campaign. The state was left cold by McCann’s first pitched slogan — “Find Your True North.” Travel Michigan leaders thought it too heavily favored destinations in the northern part of the state. The group began talking about water, about purity. That’s when Lantz said the words he’d written in his notebook out

loud. Bingo. Back at his desk, Lantz searched Google for “Pure Michigan.” Google returned fewer than 100 hits, Lantz recalls, “mostly for people selling things like ‘100 percent pure Michigan honey.’” Google “Pure Michigan” today and you’ll get more than 1.5 million results. The brand and commercials show no signs of wearing out, their creators say, which is unusual for an ad campaign that is more than a decade old. Going forward, Pure Michigan is not going anywhere, state tourism

leaders confirmed to Crain’s and Bridge Magazine. The brand will live on even as tourism officials face questions about the amount of taxpayer money devoted to the campaign. The slogan is now as synonymous with Michigan as Vernors and Kellogg’s. It’s on license plates, freeway signs, billboards, the dugouts at Detroit’s Comerica Park. There’s a YouTube channel, Twitter, Instagram and Flickr accounts, a sponsored NASCAR race. There’s even a parody website. SEE CAMPAIGN, PAGE 18

PURE MICHIGAN BY THE NUMBERS:

Number of original TV ads produced for the campaign

$35 million

Total employees with Travel Michigan, the state’s tourism division

Current budget

2006

Year the Pure Michigan campaign started, during then-Gov. Jennifer Granholm’s administration

Pure Michigan contributions from partner agencies (2017) Winter campaign: $244,457 National campaign: $2.5 million (Ann Arbor, Grand Rapids, Traverse City, Great Lakes Bay Region, The Henry Ford each gave $500,000) Fall campaign: $1.02 million

Pure Michigan regional markets in FY 2016: In-state

Midwest

Detroit Flint Grand Rapids Lansing

Chicago Cincinnati Cleveland Columbus, Ohio Dayton, Ohio Toledo, Ohio

Canada Indianapolis Fort Wayne, Ind. South Bend, Ind. Milwaukee Green Bay, Wis. St. Louis

Southern Ontario Toronto, Ontario

MICHIGAN DEPARTMENT OF TOURISM PHOTO

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UM talks with pediatrics group could have broad impact By Jay Greene jgreene@crain.com

The entrant of a big new player into a long-running dispute between Wayne State University and a large pediatrics practice affiliated with the university could have far-reaching ramifications in the Southeast Michigan health care market. The University of Michigan is now negotiating with University Pediat-

Need to know  University of Michigan enters talks with University Pediatricians as Wayne State makes alternative plans  Dispute began when UP signed direct agreement with DMC and left WSU out  UM has long wanted a beachhead in Detroit and affiliation with Children’s Hospital could reap rich dividends for the Ann Arbor academic institution

rics, a 220-physician group affiliated with Wayne State that handles care at the Detroit Medical Center’s Children’s Hospital of Michigan. If an affiliation deal is reached, it would give UM a long-sought foothold in the Detroit market that could potentially grow well beyond pediatrics. For the Detroit Medical Center, it would add prestige by adding one of the top medical schools in the nation as an academic partner. DMC, a seven-hospital for-profit system owned by Tenet Healthcare Corp., already has clinical, teaching and research relationships for adult services with Wayne State and Michigan State University. And for Wayne State, it could mean that a negotiation with UP that turned into a game of chicken could cost it much-needed revenue at its financially ailing medical school that is at least two years away from breaking even. SEE HOSPITAL, PAGE 20

INSIDE

The doctor will see you at your office << Workplace clinics seen as a way to offer convenience, save on costs. Page 8 DTE adds Henry Ford clinic. Page 9

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MICHIGAN BRIEFS

INSIDE

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

Driver fee amnesty bills speed out of Senate committee

A legislative plan to grant 300,000 Michigan drivers amnesty for more than $630 million in fees for old driving infractions sped out of a Senate committee Wednesday. The House and Senate’s Michigan Competitiveness Committees held concurrent hearings Wednesday morning on competing bipartisan packages of bills that would wipe out Driver Responsibility Fees by Oct. 1, 2018. The Senate panel voted to advance the legislation to the Senate floor, while the House committee took more than an hour of testimony before adjourning. “It’s the right thing to do,” state Sen. Ken Horn, R-Frankenmuth, said of eliminating the unpaid fees that have saddled drivers for years. The legislation would end the collection of Driver Responsibility Fees next October, speeding up a phasedout repeal of the fines by one year. Horn is sponsoring a Senate bill that would allow for the unpaid fees to be waived earlier for workers participating in a job-training program — a measure Detroit Mayor Mike Duggan’s workforce development officials have been advocating for in Lansing.

Unpaid driver fee debt is “probably the biggest barrier to connect more Detroiters to employment, outside of the skills gap we’re trying to close,” said Jeff Donofrio, executive director of workforce development for Duggan. The bills also would create a community service option for drivers who want to get their fees forgiven before next October. Half of the $634 million in outstanding fees tacked onto traffic tickets since 2003 have gone unpaid for more than six years, said Rep. Lee Chatfield, sponsor of the House’s main amnesty bill. “We believe this was nothing more than a money grab scheme,” said Chatfield, a Republican from Emmet County.

DNR seeks contract bids for state parks

The Michigan Department of Natural Resources is inviting local businesses to bid on contracts for recreation and concession opportunities at Belle Isle and other state parks. Belle Isle is seeking operators for bagged ice sales and the park’s giant slide, according to a news release from the DNR. Copper Harbor State Harbor is seeking operators for lighthouse tours and store concessions and Island Lake Recreation Area needs someone to manage kayak and

MICHIGAN DEPARTMENT OF NATURAL RESOURCES

Belle Isle is seeking operators for bagged ice sales and the park’s giant slide.

stand-up paddleboard rentals. There are a variety of other opportunities at other parks across the state, from watercraft rentals to operating campground stores. Concessionaires can enter a contract for up to seven years. Those interested can make arrangements with the DNR to visit the concession sites.

Venture capital activity in Michigan dives

Venture capital activity in Michigan dipped sharply in the third quarter, according to data released

last week by the National Venture Capital Association and PitchBook Data Inc. A total of $46.6 million was invested in 22 deals in the quarter, ranking the state 25th nationally, down from the $98.9 million invested in 20 deals in the second quarter, when Michigan ranked 20th by dollar volume, and down from $118.8 million invested in 18 deals in the third quarter last year, when it ranked 17th. In the first quarter, VC firms invested $89.2 million in 20 deals, good for a ranking of 21st. In the fourth quarter last year, the state ranked

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26th, when $41.8 million was invested in 14 deals. As usual, California easily ranked No. 1, with $8.7 billion invested in 580 deals. New York was second, with $5.1 billion invested in 188 deals and Massachusetts third with $2.6 billion invested in 121 deals. Among Midwest states, Ohio was fifth, with $299.7 million invested in 27 deals; Minnesota 19th, with $93.6 million invested in 20 deals; Wisconsin 24th, with $47.3 million invested in 11 deals; and Indiana 27th, with $41.2 million invested in 18 deals. Nationally, VC investing is on track for the highest amount of money invested in a decade. A total of 1,699 companies got a total of $21.5 billion in the third quarter, bringing the yearly totals to $61.4 billion invested in 5,948 deals. New York-based WeWork, which provides shared work space for entrepreneurs, freelancers, startups and small businesses, got the largest single infusion of capital in a $3 billion deal.

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Analysis

Insurance reform bid hits snag: Lack of votes Mayor Mike Duggan’s messaging mavens must have been smiling ear-to-ear last weekend when Washington Post columnist George Will declared a CHAD month before elecLIVENGOOD tion day that the Democratic mayor of Detroit “might Need be America’s most to know accomplishing polJJDuggan and his itician.” Republican The conservapartners don’t tive pundit’s colhave the votes umn was accomJJLawmakers panied by a concerned plan celebratory-lookwill dump costs ing photo of Dugonto the Medicaid gan at a news conference, flanked JJDeep by a clapping Reopposition to the Medicare-level fee publican House Speaker Tom schedule Leonard and Rep. Lana Theis, the GOP chair of the House Insurance Committee. The irony is the photo captured Leonard and Theis cheering Duggan for something the mayor has not yet accomplished before he stands for re-election — wholesale reform of Michigan’s no-fault auto insurance system. In the days after Will’s syndicated column was published across the country, Duggan’s sweeping reforms to drive down Detroit’s highest-inthe-nation auto insurance rates ran into an age-old political hurdle: math. It takes 56 votes in the House, 20 in the Senate and one governor to make law in Michigan. And according to multiple lawmakers on both sides of the aisle, Duggan and his Republican partners don’t have the votes to get their reforms out of committee without substantial changes, much less out of the House and onto a more treacherous political landscape in the Michigan Senate. “They don’t (have the votes) because it’s too drastic what they’re doing,” said Oakland County Executive L. Brooks Patterson, who is leading the opposition to dismantling the state’s catastrophic injuries fund. “... The Detroit caucus is our best ally.” Leonard, who is seeking the Republican nomination for attorney general next year, has leaned on Duggan to deliver as many as 15 Democratic votes and the mayor is reportedly well short of that high mark with general opposition coming from most of his fellow Democrats. SEE ANALYSIS, PAGE 21

Small Business

Hotels and lodging

Airbnb battle brews in Lansing

By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

The turnaround guru will dispense his knowledge in show on WJR AM 760. Page 22

A resident of the Detroit area for many years, Gouvia made the decision to open a restaurant on Detroit’s east side. It will be the first sit-down restaurant to open in the Jefferson-Chalmers neighborhood in decades. Jefferson East Inc. (JEI), which had its offices in the former bank building that will become Norma G’s, is planning to open new offices in the former Kresge building just up East Jefferson. Norma G’s also will serve as home base for Gouvia's food truck. Named after his mother, Norma G’s plans to offer entrees that hail from Trinidad, where Gouvia was born.

The last time the fire suppression system was updated at the historic hotel Bob Pierce manages not far from The Henry Ford in Dearborn, it cost the owner close to $750,000. Pierce, general manager of the Dearborn Inn, has employees who monitor the property around the clock. Yet he doesn’t expect homeowners to install Need fire sprinklers or to know employ a 24J Bills would hour surveilprevent cities from lance crew if they using zoning laws decide to rent to determine their houses to where short-term travelers. rentals operate That’s what bothers Pierce J Debate has a b o u t hotels and local home-sharing governments companies like squaring off Airbnb and Hoagainst real estate meAway, which agents use digital platJ Airbnb, home forms to connect sharing has travelers with indisrupted dividual hometraditional hotel owners who rent business model out their houses for short stints: They don’t play by the same rules. An effort brewing in Lansing to prevent cities and townships from using their zoning laws to decide how and where homeowners can rent out their homes has hotel operators squaring off against real estate agents in a debate over the definition of a hotel. Pierce, and the lodging industry at large, insists he welcomes the competition. But hoteliers think short-term rentals — particularly those with frequent guest turnover — are essentially commercial properties, not homes, and should be treated as such. The hotel industry has company from city and township leaders, who say they know better than Lansing about how to govern their specific communities, and from neighbors who say short-term rentals have created a host of problems, from parking to noise. They claim that home-sharing as originally intended — people renting a room in a house occupied by the owner — has been superseded by an increasing and, they say, disturbing trend of people snatching up multiple housing units solely to lease them for short vacation stays. Though a national hotel group commissioned a study on the subject, evidence of that happening in Michigan is mostly anecdotal.

SEE OPENINGS, PAGE 20

SEE AIRBNB, PAGE 17

MARTI BENEDETTI FOR CRAIN’S

The exterior of what will be Norma G’s Caribbean Cuisine had new windows installed in recent weeks as construction proceeds.

Business startups navigate the bumps in the road By Marti Benedetti

Special to Crain's Detroit Business

You can’t judge the status of a new business by its exterior. Take Norma G’s Caribbean Cuisine on East Jefferson Avenue on Detroit’s far east side. From the street, the planned Caribbean restaurant in a former bank building has been looking vacant and forlorn — not that different from a year ago. “What you can’t see is all the work we are doing inside,” said Lester Gouvia, owner of Demitart Gourmet aka Norma G’s. “All the HVAC is done. The rough plumbing is done. The framing is done.” In the original timeline, construction was scheduled to begin last fall. The restaurant was supposed to open last spring. The new opening date is November or December, he said. In fact, last week new windows were being installed and other improvements were visible. The restaurant is taking shape. Gouvia is one of several business owners who planned to open in 2016 or in the spring of this year but still haven’t gotten over the finish line. He, like dozens of other small-business owners, was a recipient of funding from the Motor City Match program and other funding. But financing, city licensing and regulations slowed the opening process, he said, showing that the path to opening a new business is never simple, and the best-laid plans can’t predict everything. Anthony Askew, Motor City Match program manager, said the largest hur-

Need to know JJSmall businesses surmount snags and aim to open doors JJChallenges in Detroit include access to capital and shortage of contractors JJExperiences highlight that road to opening is never a smooth ride

to go around than contractors to do it.” He added that across the city, there are now more community financial institutions to help fund new businesses than two years ago. “Motor City Match has helped develop that market.” CFIs have been godsend for many starting small businesses. Askew said there is not a set timeline from business planning to opening the doors. “But now that we have funded almost 90 buildings in two years with the program, we are crunching the numbers to tell a better story.” Crain’s Detroit Business checked in with a number of businesses we covered in 2016 that still have planned openings but are running behind schedule, have changed their location or format or both.

Norma G’s

“What you can’t see is all the work we are doing inside.” Lester Gouvia, owner of Demitart Gourmet aka Norma G’s

dles for Motor City Match recipients remain access to capital and a shortage of skilled contractors to work on remodeling, repairing and renovating the building space. “There’s more work

MUST READS OF THE WEEK Van Conway takes to the airwaves

Fixing cars remotely

Surviving a rebound

Delphi’s Aptiv looks to get a cut of warranty work by delivering software patches through the air. Page 4

Other Voices: For longtime downtown clothier Hot Sam’s, good times downtown present new challenges. Page 6

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Google close to deal for new building near Little Caesars Arena By Kirk Pinho kpinho@crain.com

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Internet giant Google is nearing a deal for at least 35,000 square feet of new office space next to Little Caesars Arena in downtown Detroit. According to CoStar Group Inc., a Washington, D.C.-based real estate information service, Google is moving from Birmingham to 2645 Woodward Ave., which is the arena’s address. However, there is a recently completed building on Henry Street where the company is expected to go, a source familiar with the deal confirmed to Crain’s on Friday. That building is four floors with 16,760 square feet of ground-level restaurant and retail space and 46,970 square feet of office space above, according to CoStar. If the deal comes to fruition, it would be one of the biggest wins so far for the Ilitch family in its quest to build out the 50-block District Detroit project that’s anchored by the new arena for the Detroit Red Wings and Detroit Pistons. While some new retail tenants, such as restaurants in and around the new arena, have been announced, Google would be the first large user not affiliated with the Ilitches to take space in the district. Wayne State University is building the new Mike Ilitch School of Business next to the arena following a $40

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Delphi Automotive’s newly-named electronics business — Aptiv — has its eye on a completely new kind of supplier prize: service work. Delphi executives told analysts last month that a big new wave of electronically implemented updates and bug fixes is coming to automotive service, and Aptiv expects to be in the middle of it. “Right now, the industry has a very antiquated way of dealing with software fixes, right?” Delphi CEO Kevin Clark told an audience of investors and analysts late last month in Boston. “It goes to a dealer, it gets reflashed, the dealer gets money.” But in the near future, he said, software updates will be sent remotely to fix warranty problems or make model-year product changes and other updates. That’s an emerging market that Troy-based Delphi Automotive, with $16.66 billion in 2016 sales to automakers, began positioning for this year when it moved to split in two. Delphi’s traditional powertrain systems business will be known as Delphi Technologies, while its electronics operation, now called Aptiv, plans to charge deeper into advanced electronics and autonomous-drive technologies.

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J Google eyes building next to Little Caesars Arena for new office J Deal would bring first big user not tied to Ilitch family J Google moving from Birmingham, wants at least 35,000 square feet downtown

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CoStar says Google is taking space in 2645 Woodward, the arena address.

million donation from the Ilitch family patriarch in October 2015. Ilitch died in February. The Ilitch-owned Little Caesars Enterprises Inc. pizza

chain is also building its new $150 million Global Resource Center south of the arena. Doug Kuiper, vice president of corporate communications for Detroit-based Ilitch Holdings Inc., said it’s the company’s “policy not to comment on rumors or speculation.” An email was also sent Friday morning to Google seeking comment. The company has about 17,000 square feet in downtown Birmingham at Willits Street and North Old Woodward Avenue. It employs more than 100 sales people in its Birmingham office that is owned by Boston-based International Real Estate Corp. Google announced Tuesday that it plans to move to Detroit’s burgeoning central business district but that a location and timeframe had not been finalized. According to CoStar, Google’s Birmingham space rents for $36 per square foot per year, which amounts to $48,618 per month. International Real Estate Corp. paid $38.2 million for the building in December 2007, according to CoStar. The company also has about 450 employees in Ann Arbor, where it recently unveiled a larger campus, plus Farmington Hills. It has also expanded its offices recently in Chicago; Miami; Austin, Texas; and Boulder, Colo.

Delphi sees gold in over-air service Automotive News

hap.org

Need to know

A key technology will deliver software updates over the air, without the need for a dealership visit. For products that launch in 2020 and later, Delphi is equipping its electronic control units with the capability, Clark said.

Need to know

Software fixes now are typically done at the dealership J

J Delphi's Aptiv spinoff is eyeing delivering them remotely J That offers new business in warranty work

Kevin Clark: Bring fixes into the future

Joseph Massaro: Less dependence on production

The potential is big and getting bigger if Aptiv can help original-equipment customers bring down their warranty expenses, according to Clark. Around the world, automakers “today spend $40 billion to $50 billion a year on warranty costs, and more and more of that is software-related,” Clark said.

Cheaper to fix Last year, for the first time, at least half of total industry warranty costs were for software fixes, not hardware, he reported. It’s far cheaper to fix software over the air, he said. The portion of Aptiv that includes the remote software fix capability is a company Delphi acquired in January 2017, Movimento of Plymouth. The ability to make over-the-air

product changes also will be necessary for next-generation active safety features, automated driving and automated mobility on demand. Meanwhile, Aptiv and Delphi Technologies are working to diversify their customer base, including industries that are adjacent to the automotive OEMs, such as mobility-on-demand providers, according to Delphi CFO Joseph Massaro. Massaro said Aptiv presently gets just under 10 percent of its revenues from activities “not tied to vehicle production.” He said that could increase to as much as 20 to 25 percent. “That is a goal of ours,” Massaro told the Boston audience. “To diversify away from ‘how many cars were made last month’ type revenue.” Delphi announced in May its strategy of spinning its powertrain systems off into a separate, publicly traded company. That company’s business areas include components for internal combustion engines; electrification, from “mild” hybrids to full battery powered vehicles; plus software and controls for both. Liam Butterworth, currently president of powertrain systems, will serve as CEO of that new company, Delphi Technologies. Delphi expects the separation to be complete by the end of March 2018. Clark will remain as CEO of Aptiv, which comprises the present Delphi electronics and safety and electrical/electronic architecture businesses. Aptiv’s focus will be active safety, autonomous driving, enhanced user experience and connected services.

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OPINION

OTHER VOICES

Challenge for Detroit’s oldest men’s clothier: the city’s renaissance By Pamela S. Taylor mall-business owners in Detroit face a question: what does Detroit’s renaissance mean for my business? As the city’s renaissance draws in new residents, visitors, restaurants and stores, the existing businesses must adapt. To be the oldest men’s clothing store in downtown Detroit is both an honor and a challenge, said Lauren Stovall, sales and marketing director at Hot Sam’s Clothier. The downtown store, which opened in 1921, has endured thanks to its commitment to quality and customer service. Hot Sam’s has surmounted many challenges as other long-standing downtown businesses, like Henry the Hatter, have been pushed out due to rising rents. Still, the pressure is real. Hot Sam’s business model is not simply a function of downtown rents, though. Since the early 20th century the store has thrived by providing instore service and high-quality formal wear. Online shopping and casual wear’s dominance of the millennial marketplace mean Hot Sam’s must adapt. The store owners, Tony Stovall and Cliff Green, are not ignorant to the changing tastes of younger generations. Their balancing act? Attracting millennials without alienating other customers. “We want to get the new guys,” said Tony Stovall. “But in marketing to the new guy, we might lose the older, trusted customer that we already had.” As the store competes with flashier downtown storefronts and brand names, though, Hot Sam’s will need to brush dust off its brand in order to get new customers in the door. Donald Webster, 31, heard that Hot Sam’s was an old man’s store. As a friend of Lauren Stovall, he decided to give the store a chance. He was pleasantly surprised with the selection of items and ended up purchasing a linen suit that was tailored in-

About this column This story is part of a collaborative series of stories written by Detroit newcomers about longtime Detroit businesses, an initiative by Native <> Newcomer and Thank You Detroit to uncover Detroiters' unique stories, their businesses, their values and their commitment to the city.

“We want to get the new guys. But in marketing to the new guy, we might lose the older, trusted customer that we already had.” Tony Stovall

store into shorts. “The owners of Hot Sam’s catered to my more modern style,” said Webster. But will new customers who aren’t familiar with the Stovall or Green families come to realize Hot Sam’s modernity? Revenue for the store has been relatively steady over the past three years. It’s been helped by increased foot traffic in an increasingly popular downtown area. But that’s been offset by lower average revenue per sale. Most of the new customers are young men spending $75-$100 on khakis or button-down shirts, as opposed to $300$350 on suits. At the same time, Hot Sam’s older, lifelong clientele are retiring and have less of a need for a closet full of suits. “It’s like a wash,” explains Green of their increasingly diverse revenue stream. As the owners grow older and changes in Detroit accelerate, Tony Stovall and Green have become

Hot Sam’s owners, CEO Tony Stovall (left) and Cliff Green, at the downtown Detroit fixture.

modest with setting goals. When they purchased the store from the Friedman family in 1994, they set 10- to 20-year goals. Now, their goal is to increase sales by 10 percent through the store’s 100th anniversary, which is four years away. They would love to pass their store onto their children, Lauren Stovall and Chaste Green, but acknowledge the uncertainty of the future.

Previous moves Hot Sam’s is no stranger to storefront relocation. In 2005, it was forced out of its original location at 1317 Brush St. because of increasing rent. Tony Stovall and Green moved around the corner to the current location while the original store was bulldozed into a parking lot. Since then, the store’s bottom line has taken a blow: Hot Sam’s brought in over $1 million annually at the old location, which fell by more than half after moving. A factor in the decreased sales was that the old location had a dedicated

HOT SAM’S

parking lot, while their current location offered only paid street parking. Hot Sam’s landlord, Bedrock LLC, has begun providing free parking to customers, but sales have not recovered. Tony Stovall and Cliff Green applaud efforts by Dan Gilbert and the city of Detroit to encourage exploration of downtown retailers through pedestrian-only spaces and improved public transit. Their sales projections largely depend on an influx of newcomers walking through their door. The owners value their relationship with Bedrock, but emphasize the importance of staying engaged. Stovall outlines that in negotiation, “we strongly believe that with all the new stores coming downtown, we should receive special consideration for sticking it out.” For example, should the Quicken Loans Family of Companies need an order of uniforms, the owners of Hot Sam’s would like to be considered as the first-choice vendor. “You can’t just open your doors and expect people to come in. You must be involved [in decision-making],” Stovall says.

As a member of the board of the Detroit Economic Growth Corp., Tony Stovall is deeply familiar with incentives like NEIdeas and Motor City Match, which encourage business creation and expansion. Hot Sam’s welcomes businesses that move into neighboring storefronts, which have otherwise stood vacant for decades. However, Lauren Stovall notes the resources and attention these new businesses receive, and the need for similar celebration and support for those older businesses that have “stuck it out and weathered the stones.” Stovall explains that Hot Sam’s could have moved to the suburbs at any point, but one of its mottos is, “Hot Sam’s never left downtown Detroit, and we never will.”

sive repair. If anyone has been trained to run for the governor’s office, it is Candice Miller. I really don’t know if she has any interest in running, but I hope whoever has her ear can talk her into it. She has done a remarkable job now at the county, state and federal levels of government. If we could convince her to run, she might be a reluctant nominee, but would be a heck of a governor. When you look at the ever-growing list of candidates for the gover-

nor’s race next year, you cannot help but agree that Candice Miller would more than measure up. I expect all the other candidates hope she stays home in Macomb. Mike Duggan ran against huge odds and not only was successful in his campaign for mayor but has done a remarkable job and hopefully will be re-elected shortly. Miller deserves to be on the ballot for governor of Michigan. We need her experience, ethics and skills. Let us hope we can talk her into running.

Pamela Taylor, a 2016-17 Venture for America fellow in Detroit, wrote this piece as part of an initiative by Native <> Newcomer and Thank You Detroit. She recently became a mobility project manager on Bedrock LLC’s parking team.

Let’s get Candice Miller on the ballot

first became partial to Candice Miller when she was secretary of state during the automotive centennial, when we all got a chance to display a commemorative license plate that read “World’s Motor Capital.” She did a great job in that office before she headed off to Washington to represent Macomb County in Congress for many years doing what a representative is supposed to do: represent her district. And she did it well. But about the time when most

KEITH CRAIN Editor-in-chief

public servants are ready to wrap it up and retire, she took on perhaps her toughest assignment.

Running for a low-level position in Macomb County, she was ready to help root out the corruption that seems to have become synonymous with Macomb. She was elected in a cakewalk and went about the job of ridding the county’s public works office of what appeared to be a long period of cronyism and possible corruption. Just to add to the fun, the county developed a huge sinkhole a week before she took office that became her problem and required a mas-

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Hereâ&#x20AC;&#x2122;s a tip for Tomlin and Fonda: Donâ&#x20AC;&#x2122;t mess with tipping

ily Tomlin and Jane Fonda recently came to Michigan not to promote their Netflix show â&#x20AC;&#x153;Grace and Frankieâ&#x20AC;? but to promote the far-left activist group Restaurant Opportunities Centers United and its plan to upend Michiganâ&#x20AC;&#x2122;s tipped minimum wage. Michiganâ&#x20AC;&#x2122;s minimum wage for tipped employees is $3.38 an hour, which Tomlin and Fonda suggest should be cause for pity. But Tomlin, Fonda and ROC overlook the most important aspect of the tipped minimum wage: Tips. Like Tomlin and Fonda, I too am an actress who spent her early years in the Midwest. Unlike them, I never got my break to live a life of fame and fortune. To support my time in theater, I wait tables. Iâ&#x20AC;&#x2122;ve made $2.13 an hour, the federal tipped minimum wage, plus tips. Yet my income has still allowed me a car, an apartment, all the necessities of life and the time to follow my passion of acting. How? Because with tips my hourly wage has consistently been $20 to $25. And while wages stagnate in other sectors of the economy, they continue to rise among tipped workers. Being a tipped employee like a server has always been a good option to make a good living. For myself and many others, it has also been a job that provides the flexibility to pursue other priorities like acting, entertaining, parenting or schooling. While the reasons why employees choose tipped jobs differ, their financial outcome is the same: They earn far more than the standard minimum wage. Now I hear these privileged ladies siding with ROC in its attempts to raise the tipped minimum wage to $12, and eliminate tips, parroting ROCâ&#x20AC;&#x2122;s bizarre contention that tips are a form of discrimination. Why do they get to have an opinion about my job, but I donâ&#x20AC;&#x2122;t? Like most tipped employees, I would rather have the tipping status quo that allows me to maximize my income by doing what I do best: providing my guests with prompt and gracious service. I now live in Seattle, which has passed a $15 minimum wage and serves as a cautionary tale for other

TALK ON THE WEB

Re: Google to move from Birmingham to downtown Detroit Solid move for Google â&#x20AC;&#x201D; great fit for that area in terms of the work they do. Detroit quietly has a really strong analytics-based community growing. Michael Bedard I am an IT professional and currently live just north of the city in a lovely historic neighborhood. I work in Livonia, but would LOVE to work in the city. I am able to bike/walk to multiple destination restaurants and events within the city (including the RiverWalk), all within 30 minutes or less. Peter Mays

OTHER VOICES Simone Barron

cities and states considering following suit. The wage hike has reduced tipping because it has caused customer confusion and business burdens. Many restaurants, including my own, have been forced to eliminate tips, re-

placing them with service charges that can be used to absorb the labor costs of the dramatic wage hike. Waiting tables for flat rates changes the service dynamic. I no longer sell my services, hospitality and graciousness. I am not there to make sure the customer has a great dining experience. I have become the very thing that ROC says they hate about tipped employees: I have become a servant. According to a study commissioned by the Seattle mayorâ&#x20AC;&#x2122;s office, the minimum wage increase has caused reduced employee hours and wages. I have had to take a second job that has tips just to make up for the loss from

Waiting tables for flat rates changes the service dynamic. I no longer sell my services, hospitality and graciousness. my main job that no longer does. I now work twice as much for about the same money as I was previously making. And have less time for acting. Without tips, I would have never been able to pursue my passions in life. I would have never made it on $12

an hour back then, let alone now. I would have never been able to be an actress â&#x20AC;&#x201D; even if it is of the semi-professional variety. After their visit, Tomlin and Fonda left to go back to filming their sitcom, making millions of dollars, while Michiganâ&#x20AC;&#x2122;s tipped employees now have to worry that their wages are going to be cut because of ROCâ&#x20AC;&#x2122;s agenda to kill tipping. Michigan employees should be insulted. I know I am. Simone Barron is a server in Seattle. She co-founded the Full Service Workers Alliance of Seattle, which advocates for restaurant workersâ&#x20AC;&#x2122; rights.

See, thatâ&#x20AC;&#x2122;s what Iâ&#x20AC;&#x2122;m talking about, Amazon and now Google ... make it happen D. Meghel Alvin Donâ&#x20AC;&#x2122;t worry L. Brooks, weâ&#x20AC;&#x2122;ll throw you some blankets and corn. specom3

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FOCUS

SPECIAL REPORT: HEALTH CARE

The doctor will see you at work now LARRY PEPLIN FOR CRAIN’S

Audley Williams, M.D. (left), and patient William Briggs of Wixom at the Plumbers Union Local 98 clinic operated by Activate Healthcare.

Workplace primary care clinics grow in metro Detroit By Jay Greene jgreene@crain.com

Workplace primary care and wellness centers are catching on in Southeast Michigan as one way for self-funded employers or unions to save money on their health insurance costs and keep their employees healthy and proInside ductive. Three years JJDTE adds Henry ago, Plumbers Ford clinic at Union Local 98 in corporate office. Madison Heights Page 9. contracted with Activate Healthcare of Indianapolis to open a primary care clinic at the union headquarters. So far, union plumbers are saving 30 percent of their health care costs and receiving much quicker access to medical care for themselves and their family, said Danny Nixon, the union’s business manager. Schoolcraft College in Livonia has opened a new 6,000-square-foot urgent care center for students and employees that is managed by St. Joseph Mercy Health System. The site is located on the first floor of the Jeffress Center. Hours are 10 a.m.-10 p.m. Monday through Saturday, and 10 a.m.-6 p.m. Sundays and holidays. Over the past 18 months, Henry

Need to know

JJEmployers use workplace clinics to

lower health care costs

JJHospitals and startup companies are competing for contracts JJReturn on investment can range from

$2 to $6 per dollar spent

Ford Health System in Detroit has contracted with three Southeast Michigan companies — DTE Energy Co., E & E Manufacturing and Eastman Chemical — to offer primary care and wellness services to about 20,000 people at their worksites, said Susan Greene, the system’s director of occupational health. A fourth contract is expected in early 2018, she said. Dave Spivey, CEO of St. Mary Mercy Livonia, said the Schoolcraft urgent care clinic also is open to the public and is being staffed by doctors with St. Joe’s Medical Group. “This facility will increase access to health care and encourage students, employees and others to live healthier lives,” he said. Schoolcraft’s urgent care center offers non-emergency medical care on a walk-in basis. Services include health and wellness, including physicals, pregnancy testing and vaccinations.

Since the Affordable Care Act, or Obamacare, was approved in 2010, urgent care and other similarly staffed outpatient centers have exploded in Southeast Michigan and nationally. Data show there are more than 350 urgent care, medical or walk-in clinics in Michigan, including about 110 within 30 miles of Detroit, according to Urgent Care Locations LLC. Besides hospital-based systems and physicians that operate urgent-care clinics or patient-centered medical homes, a number of corporate-owned companies like Concentra and the more retail-oriented CVS Minute Clinics also provide primary care. Most health insurers in Southeast Michigan contract with urgent-care centers because of their lower cost relative to emergency rooms, which has further expanded their numbers. Greene said she saw a number of for-profit worksite clinic companies popping up in Michigan and nationally and thought Henry Ford had the resources to offer the service to employers. Henry Ford’s on-site clinic program was born. “We are Henry Ford, and our business community expects us to be in the mix,” said Greene. “Employers are tired of waiting for health care to right-

size itself and having an on-site clinic is a way to control expenses and keep employees productive and healthy.” One of Henry Ford’s clients, who asked not to be named, has been able to reduce the average costs of visits from about $150 to $78 through improved patient volume. Henry Ford Health said published studies have indicated that return on investment in such clinics can be as large as $2 to $6 per dollar invested.

Local 98’s clinic Debra Geihsler, Activate’s principal and co-founder, said the growth of workplace clinics like the one at Local 98 has been strong as employers understand there is a limit to redesigning health plans and shifting costs to employees. Founded in 2010, Activate operates 34 clinics in five states, including one in Southeast Michigan and several others pending, the company said. “Health care is fragmented and patients get less care than they deserve,” said Geihsler, who started her career years ago with Trinity Health and is the former CEO of Harvard Vanguard Medical Group. “If we have a primary care provider managing the whole person, we can avoid catastrophic (medical) events” and lower costs. Activate averages health care cost reductions of 25 percent and has a re-

“Health care is fragmented and patients get less care than they deserve.” Debra Geihsler

turn of $1.50 for every $1 invested, Geihsler said. Nixon said the plumbers union, which has 1,600 active and retired members and 1,900 dependents, decided to add a workplace clinic in June 2014 because medical costs have been rising at double-digit rates the past few years. For example, plumbers paid $12.50 per hour in 2014 to fund the union’s insurance fund. This year, the cost declined to $8.50 per hour, about 45 percent less. Each year, the union workers log about 1.1 million hours, Nixon said. The union contracts out with Benesys Inc., a Troy-based third party administrator. “We are seeing multiemployer trust funds, what Local 98 is, look to create benefits to members,” said Steve Gillie, a consultant who worked with Local 98 to develop the program with Activate. “It helps them control local health care costs and creates a medical home that promotes primary care for wellness.” SEE CLINICS, PAGE 12

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SPECIAL REPORT: HEALTH CARE

DTE adds Henry Ford clinic at corporate office By Jay Greene jgreene@crain.com

Family medicine doctor David Hazel has seen just about every kind of primary care health condition and some emergencies such as stroke and heart attack the past year at DTE Energy Co.’s new worksite health center at its corporate headquarters in downtown Detroit. The clinic has saved DTE money, but also increased patient convenience and given employees a new primary care and prescription refill alternative. “I am the company doctor,” said Hazel, who has worked as an occupational health physician for 30 years. Opened in January 2016, DTE’s clinic is on the same floor as its health and fitness center, known collectively as the company’s Performance Center. The five-day-aweek clinic, open 7:30 a.m.-4 p.m., is staffed by Hazel, a paramedic, nurse, medical assistant and a part-time physical therapist. “It is like a doctor’s office,” said Michael Cooper, DTE’s director of compensation benefits and wellness. “This is all about our concern for the health and safety of our employees. We want a highly engaged workforce, and (having this) helps our customers.” Planning for the health clinic began three years ago, but has its roots many years earlier. Cost savings were important, but not the primary mission. In 2014, DTE executives began discussing how to further its corporate mission and engage employees in health and well-being. The energy company had operated a small health club, first opened in 1938, and once even had a small clinic for worksite injuries and for new-hire physical exams. The onsite clinic closed in 2001 after DTE began to contract with Henry Ford Health System for employee health services at their medical centers. But DTE wanted to make health care more convenient for employees, Cooper said. Because of its ongoing relationship with Henry Ford in providing medical services, DTE hired Henry Ford to manage its worksite clinic. During 2015, DTE spent an unspecified amount to build out the top floor of its services building, which connects with MGM Grand Detroit Casino by a overhead tunnel across Third Avenue. The “health zone” clinic is 4,000 square feet and the “fitness zone,” which includes a lobby, eating area, basketball gym, fitness area, group exercise studio and locker rooms, is 20,100 square feet. The clinic also features a quiet room to rest and reduce stress and a small laboratory. In 2016, the first year of operation, DTE started out slowly, with 3,000 clinic visits in its three patient exam rooms and physical therapy room. “When we first started, we did a publicity campaign to get the word out and people in,” said Hazel, who joined Henry Ford in early 2016 as an occupational health physician. “They had a positive impression and

Need to know

JJDTE joined worksite health center movement by opening clinic last year JJStaffed by primary care doctor, nurse and physical therapist JJEmployees save time, DTE gets increased productivity

“We want a highly engaged workforce, and (having this) helps our customers.” Michael Cooper

started telling people about it.” As word-of-mouth spread and DTE’s communications department regularly promoted it, Hazel said more workers starting coming in. The clinic is open only to DTE’s 10,000 employees and contractors. But through August, the health clinic so far has about 4,000 visits. The vast majority of patient visits, 75 percent, are for primary care, but employment- or insurance-related visits account for 24 percent with emergencies accounting for about 1 percent.

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SEE DTE, PAGE 12

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SPECIAL REPORT: HEALTH CARE CLINICS FROM PAGE 8

Nixon said Local 98 is working with Local 636 Pipefitters Union to allow their 2,400 members access to the Activate clinic. Effective Nov. 1, all pipefitter members covered under their health and welfare will be able to use the clinic, he said. “Activate was great for us. It was a difficult decision because we wanted to make sure it was the right fit and that our members were going to use it,” Nixon said. “Generally, men don’t go to the doctor unless they are having a heart attack or bleeding out. There is huge benefit of going to the doctor to have preventive medicine available and catch up on these things.” Nixon said member visits were slow, as expected in the beginning, but the clinic continues to experience increased utilization. “(About 58 percent of members) have gone and they are returning for visits, and their family members are going,” he said. The clinic is open variable hours starting as early as 6 a.m. and stays open as late as 7 p.m., depending on the days, for a total of 51 hours per week. It does not charge co-payments and has about 60 prescription medications in stock, he said. “In addition to full primary care, they are able to receive generic medications and get their lab work done,” said Gillie, adding that preventive visits, physical examinations, lab tests and drug testing are available. Common reasons for visits include common cold, aches and pains. “But we have been able to catch a lot of serious cases — tumors and cancers” — before they became serious, Nixon said. Gillie said clinic staff, who include a licensed physician, a physician assistant and two medical assistants, routinely coordinate care with members’ primary care doctors, hospitals, dentists, imaging centers and other health care providers. “There is a great working relationship with referrals and specialists,” Gillie said. “Now they have a quarterback to do referrals and follow-ups.” Activate union clinic physician Audley Williams, M.D., said he sees a wide range of medical conditions and symptoms, some of which “left unchecked would be devastating for patients.” Chronic diseases and conditions include diabetes, high blood pressure, arthritis, lupus and cancer, he said.

“Activate was great for us. It was a difficult decision because we wanted to make sure it was the right fit and that our members were going to use it.” Dan Nixon

“The numbers of patients we see increases every day,” said Williams, who has been with the clinic since it opened. “Men see the value in our services. They don’t feel ostracized when we have to tell them they need to lose weight.” Recently, the wife of a member came in for a visit and she was diagnosed with a chronic disease. “She came in for a second look. She had been to this person or that person. In one visit, we found out what was going on,” said Williams, who said the clinic model allows for up to an hour with medical professionals. “She was diagnosed with a chronic condition. The workup is not complete, but it can be fatal or cause significant morbidity.” Williams said about one-third of patients do not have a primary care provider, one-third have their own doctor, but another one-third who come in are looking for a change. “We allow for every member to use us as their primary care clinic, but we want to be respectful with other providers,” he said. If patients request or allow, Williams said he will share notes with a primary care provider or refer the member for specialist care. “We ask the patient if there is someplace they want to go or see,” he said. “Depending on insurance, we send the referral. If it is imaging, we are looking for the lowest cost.” Geihsler estimated that 40 percent to 50 percent of employees don’t have a personal relationship with a health care provider or hospital. Workplace clinics increase convenience and access for employees, she said. “We try and reach out to the medically homeless people who don’t get their blood pressure checked or annual physical exam,” she said. “Organizations tell us their workers increase productivity and have reduced absenteeism. Retention and recruitment of employees have improved.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

LARRY PEPLIN FOR CRAIN’S

Audley Williams, M.D., (left,) with Dan Nixon, business manager of Plumbers Union Local 98.

DTE ENERGY CORPORATE COMMUNICATIONS

David Hazel, M.D., is a family medicine doctor DTE Energy Co.’s new worksite health center at its corporate headquarters in downtown Detroit.

DTE

FROM PAGE 9

“They first came in for simple prescriptions, aches and pains,” he said. “We’ve seen everything from sniffles to major emergencies” such as heart attack, stroke, severe asthma and loss of consciousness. Patients also have come in with back and neck injuries, and for such medical conditions as acute appendicitis, Hazel said. “They come here to save time, sometimes instead of seeing their doctor,” he said. “Or they choose not to blow off a concern about their health. They might not have seen their doctor” until it was too late. Hazel said he has become the primary care doctor for many employees. “We have seen real improvement from preventive care and chronic disease reduction,” he said. If an employee needs a prescription filled, Cooper said, they come in to the clinic and Henry Ford sends it over by the end of the day.

“We can actually detect a broad range of chronic diseases. Things they might not know they have.” David Hazel, M.D.

Cooper said DTE believes the clinic has enabled employees to be more productive and absent less from work. “You consider how many hours it takes to go to a doctor’s office. That takes time away from the office,” he said. “Creating a clinic gave employees ability to get care when they are at work.” While no hard data is yet available, Cooper estimates a 2-1 return on investment for DTE. He said having a clinic also helps with retention and recruitment efforts, he said. Susan Greene, Henry Ford’s director of occupational health, said the system has been able to reduce DTE’s average cost per visit primarily because of volume increases.

Copper said DTE estimates it is saving at least $100 on each employee visit and expects ROI to increase as more employees visit the clinic. But DTE is somewhat limited because only 3,000 of DTE’s employees work at the corporate office. Hazel said other services at the clinic include annual health screenings for high cholesterol and diabetes. “We can actually detect a broad range of chronic diseases,” he said. “Things they might not know they have.” If an employee needs further testing or a specialist, Hazel said they can be referred to a Henry Ford clinic or imaging center. “We don’t steal from other doctors,” said Hazel. “If an employee has a Beaumont doctor, we can send them there if they want.” Specialty physician referrals are handled, he said, “by me picking up a phone,” adding: “We are trying to do right for each employee.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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PHOTOS BY DETROIT CLUB

The Detroit Club is a 1892 Romanesque Revival building on Cass Avenue at Fort Street.

The 40,000-square-foot historic Detroit Club at Cass Avenue and Fort Street is about 95 percent of the way through a multimillion-dollar overhaul by its owners, husband and wife Emre and Lynn Uralli.

Historic Detroit Club eyes January reopening after renovation By Kurt Nagl

Need to know

The Detroit Club in downtown Detroit is poised for a comeback three years after a flood destroyed its interior. The historic 40,000-square-foot building at 712 Cass Ave. at Fort Street is about 95 percent of the way through a multimillion-dollar overhaul by its owners, husband and wife Emre and Lynn Uralli. The four-story club will be semi-private, with each floor and a basement fully renovated, said Regina Peter, director of sales and marketing for the Detroit Club. The club hopes to open in time for the North American International Auto

damaged in flood

lnagl@crain.com

JJ1892 Romanesque Revival building

JJRestaurant and event space to be open to public JJLuxury suites and spa to be private

Show at nearby Cobo Center in January. “We really wanted to bring elements to the city that are missing,” she said. “It was very important to the owner to allow Detroiters to experience the building.” The exact investment in the project was not disclosed. Uralli’s Citi Investment Group Corp. is the general contractor and Lynn Uralli took

Sahi Cosmetics wins Rise of the Rest pitch competition By Tyler Clifford tclifford@crain.com

Sahi Cosmetics LLC won the $100,000 grand prize at the Rise of the Rest Road Tour pitch competition at the Michigan Theater in Ann Arbor last week. Owner Shelly Sahi created the product line for women of ethnic medium skin tones. The Ann Arbor-based company markets the makeup to women with olive and yellow undertones who may be of Arab, Indian, Pakistani, Mediterranean or Hispanic descent. The Ann Arbor-based startup has received a lot of attention this year, including a $100,000 investment from the Zell Lurie Founders Fund at the University of Michigan in August. The company was founded in 2016. Sahi, a former materials engineer at Ford Motor Co., had problems finding makeup that worked for herself and saw an opportunity to use her science background to produce custom blends. The Rise of the Rest competition is led by Steve Case, the chairman of Washington, D.C.-based investment firm Revolution LLC and co-founder and former chairman of AOL Inc. The judge panel included Case, Hillbilly Elegy author J.D. Vance, Revolution partner David Hall, Revolution Vice President Ashley Larson, University of Michigan Ross School of Business professor Scott De Rue and Kresge Foundation Vice President Robert Manilla.

Need to know

JJShelly Sahi created product line for women of ethnic medium skin tones JJCompany gets second $100,000 investment this year JJ8 startups competed in the competition in Ann Arbor

The pitch competition finalists included the following startups: J SkySpecs LLC, Ann Arbor - Danny Ellis, CEO: Company automates predictive maintenance of energy infrastructure with drones. J Pitstop, Ontario - Shiva Bhardwaj, CEO: Pitstop predicts vehicle failures before they happen. J Genomenon Inc., Ann Arbor - Mike Klein, CEO: Genomenon creates interpretation software for diagnosing and treating cancer. J Inmatech Inc., Ann Arbor - Les Alexander, CEO: The company commercializes novel high-performance supercapacitors for energy storage systems. J Warmilu LLC, Ann Arbor - Grace Hsia, CEO: Warmilu provides nonelectric warmth to those who need it most. J SurClean Inc., Wixom - Susan Sprentall, founder, president and CEO: The company’s laser surface prep removes paint, replacing traditional methods. J Civionics Inc., Ann Arbor - Gerry Roston, CEO: Civionics improves manufacturers' profitability by reducing downtime.

the lead on the building’s design. The first floor of the building will have a 64-seat restaurant open to the public and a separate member’s lounge. The second floor will have a ballroom accommodating 120 guests, while the third floor will house a 150-person dining room. Peter said the club is still searching for an executive chef to run the restaurant and banquet operations. Event space may be rented by the public. The top floor and basement will be for members only. The basement will include a 15-person jacuzzi, a fitness center with private lockers and a full-service spa. The

fourth floor will be composed of 10 luxury estate suites, ranging in size from 400 to 800 square feet, with some including walkout balconies and skylights. The rooms will be available for members to rent. Membership pricing and structure have not been finalized, Peter said, but the club is considering an initial payment of $5,000 and a $200-$300 monthly fee. It might also offer different memberships based on levels of access. The Urallis are principals of Detroit Club Holdings LLC, under the umbrella of Luke Investments Inc. Emre Uralli began his real estate career in Fort Lauderdale, where he still has offices and owns prop-

erty. He entered the Detroit market about eight years ago, aiming to capitalize on the low cost of entry. Uralli purchased the 1892 Romanesque Revival Detroit Club building from Nick and Lorna Abraham, co-owners of Woodward Parking Co. Inc., in December 2013 for $1 million, Crain's reported. He also purchased the parking lot behind the club in 2008, which can accommodate more than 90 vehicles, said Ryan Snoek, real estate consultant for Luke Investments. The investor has sold off most of his commercial property in the city — including the David Stott Building and former Detroit Free Press building.

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Rossetti unveils new arena seating concept that bucks centuries of design By Bill Shea

Need to know

bshea@crain.com

Rome’s coliseum — the Flavian Amphitheatre, to be formal — has been the template for arena design for nearly 2,000 years. Matt Rossetti, president of Detroit-based architects Rossetti Inc., aims to change that. The design firm on Tuesday unveiled its newest design concept for arenas called The Inverted Bowl. Basically, instead of a traditional arena’s upper tiers that incline away from the floor or stage, they’ll instead be suspended closer to the action, akin to opera boxes or balcony seating in a theater. Little Caesars Arena and Madison Square Garden have suspended “gondola” seating that’s what Rossetti called “a first hint” of what his new concept does. “Ours are lower and closer and they

Rossetti Inc. on Tuesday unveiled its newest design concept for arenas called The Inverted Bowl.

JJUpper seats nearer action in ‘The

Inverted Bowl’

JJ3 cities/teams have signed onto concept JJRossetti is among notable sports venue architects

go all the way around rather than just on the sides,” he said. The upper tiers will be in four balconies, each seating about 2,000 people. Three future arenas, two in Canada and one on the U.S. West Coast, will be built using the new seating concept, Rossetti said. He declined to name the projects because of nondisclosure agreements and because the cities or teams involved have not announced their design plans. One city likely to use the design is Calgary, where the NHL’s Flames are

YO U

seeking a new home to replace the Scotiabank Saddledome that was built in 1983. Rossetti has been doing work for the Flames while a debate on funding a new arena is an ongoing issue in the city. The impetus behind the new arena design stems from Rossetti’s need to find less costly, more efficient designs in the face of public stadium subsidies drying up and project costs skyrocketing, he said. At the same time, there’s a need to appeal to new generations of fans, he added. The Inverted Bowl is intended to handle both concerns. Rossetti said he and his company have spent the past seven years researching and testing their new arena design. “It’s a much more immersive experience and it’s a lot cheaper to build,” he said. SEE CONCEPT, PAGE 15

Matt Rossetti, president of Detroit-based architects Rossetti Inc.

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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 // O C T O B E R 1 6 , 2 0 1 7

The upper tiers will be in four balconies, each seating about 2,000 people.

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The belief is that bringing fans closer to the action, and providing an interactive experience via full-wall digital media screens, will appeal to millennials who consume events with their eyes and mobile devices. “They have a different way of watching events. It has very little to do with being in a seat and captured watching an event,” he said. The new design theoretically allows teams and venues to charge more for what has been the traditional “nose bleed” seats. Upper tiers of seating have always been more expensive to build but generate less revenue. And by making them more of a premium space, that allows additional revenue creation via food and beverage sales, too, he added. Figures provided by Rossetti show that the design allows for a shorter and less expensive construction period because the facility uses an 18 percent smaller building footprint and 22 percent less steel tonnage. Long-term, it gooses revenue by 20 percent to 30 percent versus traditional arenas, according to Rossetti, and is less expensive to maintain because the building will have 36 percent less volume to

Detroit-based Rossetti Inc.’s new Inverted Bowl arena design differs from traditional arenas in that upper tiers are suspended closer to the action, akin to opera boxes or balcony seating in a theater.

heat and cool. The smaller footprint is intended to aid teams or cities that want an arena in a tighter urban environment, Rossetti said. The buildings will seat between 16,500 and 19,000 people. Rossetti said the inverted seating concept was vetted by Canadian structural engineering firm Entuitive

and several construction firms that he didn’t name.

Rossetti’s deep portfolio The Inverted Bowl arenas will be the next additions to a deep Rossetti portfolio. Rossetti said his firm typically has 40-50 sports projects under-

way at any one time. Locally, the firm designed the $500 million Ford Field in downtown Detroit, which opened in 2002 as home of the Detroit Lions, and handled the team’s $100 million stadium upgrade earlier this year. Before that, it designed the Palace of Auburn Hills that opened for $90 million in 1988

and was hired to do design work on suite upgrades in recent years. Its current local sports facility work includes design of the Detroit Pistons’ $65 million headquarters and practice facility in Detroit’s New Center and the proposed $1 billion soccer stadium and mixed-use development for the Dan Gilbert-Tom Gores Major League Soccer expansion bid. On a national scale, recent major design work includes the $400 million redevelopment of Daytona International Speedway that wrapped up in 2016 and the new Los Angeles Lakers’ $80 million corporate headquarters and practice facility. Other significant sports projects include the United States Tennis Association’s National Tennis Center in Flushing, N.Y.; and renovations at CenturyLink Field for the Seattle Seahawks, TD Garden for the Boston Celtics and Breslin Center at Michigan State University. It’s designing the $130 million Titletown District mixed-use development for the Green Bay Packers near Lambeau Field. Rossetti, founded in 1969 by Matt Rossetti’s father Gino, specializes in sports and entertainment projects globally. Rossetti said he expects the firm to hit about $25 million revenue this year.

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

PEOPLE BANKING/FINANCE J Noel Villajuan to financial adviser, LJPR Financial Advisors, Troy, from financial consultant, Fidelity Investments, Birmingham.

HEALTH CARE Carolyn Rada, RN, MSN, to vice president, operations, The Physician Alliance, St. Clair Shores, from director, practice transformation; Katrina Mackrain to executive director, busiJ

CALENDAR ness analytics and project management, from executive project manager; and Jennie Lekich to director, clinical applications, from senior application systems analyst.

LAW Adam S. Berman to supervising bankruptcy attorney, Potestivo & Associates, P.C., Rochester Hills, from attorney, The Cronin Law Firm, PLLC, Bloomfield Hills; Lara B. Gartner to controller from staff accounJ

tant, Lease Corporation of America, Troy; Bela A. Dalal to associate attorney from document review attorney, Kelly Services Inc., Troy; and Katie R. Jory to associate attorney from associate attorney, Law Office of Doerr & Jory, P.C., Mt. Morris.

MANUFACTURING J Robert Rich to president, Century Tool & Gage, CTG Bel-Kur, Fenton, from president, BCN Technical Services, Hastings.

NONPROFIT

THURSDAY, OCT. 19

J Sandy Schuster to chief development officer, JVS, Southfield, from director of development, Pewabic Pottery, Detroit.

Crain’s 2017 Health Care Leadership Summit. 8 a.m.-1 p.m. Crain’s Detroit Business. The summit will focus on managing health care in a time of uncertainty. Attendees will hear from industry experts on how their companies are managing today and making long-term decisions, despite uncertainty in the areas of policy and decision making, talent acquisition and retention, and technology. Keynote address from Rep. Joe Kennedy III, who will discuss the future of health care reform and an eye-opening panel discussion on Michigan’s opioid crisis, moderated by Lt. Governor Brian Calley. Marriott Renaissance Center. Individual ticket: $185; reserved table of 10: $1,900; young professional ticket for ages 21-35: $140. Contact: Kacey Anderson, phone: (313) 446-0300; email: cdbevents@crain.com.

To submit news of your new hires or promotions to People, go to crainsdetroit.com/peoplesubmit and fill out the online form. Please limit submissions to management- or partner-level positions.

DEALS & DETAILS CONTRACTS J Dimension Systems Inc., Farmington Hills, a provider of PeopleSoft ERP support services, will collaborate with Canon Information and Imaging Solutions Inc. (CIIS), a wholly owned subsidiary of Canon U.S.A. Inc., Melville, N.Y., in the rollout of its Accounts Payable Automation Solutions for PeopleSoft, based on the Enterprise Imaging Platform (EIP) by Canon. Websites: dsisys. com, ciis.canon.com. J Renkim Corp., Southgate, a document company in the credit, collections, healthcare and automotive

industries, has purchased two AcceleJet printing and finishing systems from Pitney Bowes, Stamford, Conn., to streamline workflow and increase color options to their clients. Renkim performs mail processing in services such as collection agency letters, automotive recall notices and utility bills. Websites: renkim.com, pitneybowes. com/us. J Samaritas (formerly Lutheran Social Services of Michigan), Detroit, a human service agency, was awarded contracts by the Michigan Department of Health and Human Services to conduct trauma assessments for

children in foster care across the state in four markets: Saginaw, Grand Rapids, Jackson and Lansing. Website: Samaritas.org.

ed States. Websites: sisuguard.com, triple8.com.

J SISU Mouthguard, manufactured by Akervall Technologies Inc., Saline, has a partnership with Triple Eight, New York, N.Y., as the distributor for roller derby and action sports, focusing specifically on wheeled and board sports. SISU Mouthguards are thin protective dental guards made from a non-compressible, perforated, remoldable material. The partnership will expand the reach of SISU Mouthguards throughout the Unit-

J Liquid Web Inc., Lansing, which provides managed hosting services to small and medium-sized businesses and web professionals, launched the Liquid Web Premium Business Email product, providing storage, spam and virus protection and the ability to create a custom domain for professional branding. Website: liquidweb.com.

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ADVERTISING SECTION To place your listing or for more information, please call Lynn Calcaterra at (313) 446-6086 or email lcalcaterra@crain.com

www.crainsdetroit.com/onthemove

ACCOUNTING

NONPROFITS

HEALTHCARE Vicki Watkins, MSN, RN Vice President of Homecare

McLaren Homecare Group

Chad Anschuetz, CPA

Chris Uhl

Kirby Burkholder

Managing Shareholder and Board Chairman

Executive Director, Eastern Region

President, Social Impact Accelerator

Doeren Mayhew Doeren Mayhew, a top 60 CPA firm, has announced the appointment of Chad Anschuetz as its new managing shareholder and board chairman effective Oct. 1, 2017. As leader of the firm, he will guide its client service, growth, cultural and strategic direction. Anschuetz joined the firm 26 years ago after graduating from Adrian College. A shareholder for 16 years and member of the firm’s management committee, he has been instrumental in developing the firm’s infrastructure and growth strategies.

IFF Chris Uhl will provide executive oversight, leadership, and management for IFF lending, real estate consulting, investment, and advocacy work in Michigan and Ohio. Mr. Uhl previously served in leadership roles at Rock Ventures LLC, The Skillman Foundation, and Detroit Children’s Fund, as well as working several years as a banker at major financial institutions. He is a native Michigander with an M.B.A. from Wayne State University and a B.S. from Central Michigan University. Long-time IFF leader Kirby Burkholder has been promoted to lead the organization’s newly formed Social Impact Accelerator, tasked with special initiatives to transform vital sectors such as early childhood education, schools, and housing for people with disabilities. The new group will also house IFF’s research and evaluation practice, talent management, and real estate development. Mr. Burkholder joined IFF in 2001 and has served in Executive Director capacities in both Detroit and St. Louis.

As VP of Homecare, Vicki Watkins, MSN, RN, will oversee all statewide home health care operations for the McLaren Health Care system. Previously, Watkins worked for B.E. Smith as a member of their Interim Leadership team, most recently as interim service director at Kaiser Permanente Santa Clara Medical Center Home Health and Hospice. Watkins began her career at Memorial Healthcare in Owosso, Mich., where she worked for more than 30 years, most recently as director of inpatient services.

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For more information or questions regarding advertising in this section, please call Lynn Calcaterra at (313) 446-6086 or email: lcalcaterra@crain.com

UPCOMING EVENTS Launching a Local Sports Organization to Drive Economic Impact. 11:30 a.m.-1:30 p.m. Oct. 25. Detroit Economic Club. Leadership from Detroit’s sports teams, the Detroit Sports Commission, Detroit Metro Convention & Visitors Bureau, media and the business community have joined forces to form the Detroit Sports Organizing Corp. with a mission to win the large Super Bowlsized sporting events for Detroit. Panel includes: Arn Tellem, vice chairman, Palace Sports & Entertainment; Tom Wilson, president and CEO, Olympia Entertainment; Rod Wood, team president, Detroit Lions. Ford Field. $45 members, $55 guest of members, $75 nonmembers. Website: econclub.org Things That Go Bump in the Workplace — A Survivor’s Guide to Employment Nightmares. 8:00 a.m.noon Oct. 27. Plunkett Cooney. Topics to include: compliance with civil rights law, recent case law developments, investigation strategies and practical recommendations for managing employment risk. Detroit Athletic Club. Free. Contact: Stephanie Pegg, phone: (248) 901-4028; email: spegg@plunkettcooney.com; website: plunkettcooney.com The Talent Journey Conference. 8 a.m.-2 p.m. Oct. 27. Auburn Hills Chamber of Commerce. Conference tackles attraction and retention issues and brings together executives, higher education and resources for different industry sectors including: advanced manufacturing and skilled trade, technology, healthcare, automotive and engineering and professional services. Marriott Auburn Hills Pontiac. $99 members; $149 nonmembers. Contact: Courtney Woods, phone: (248) 853-7862; email: cwoods@auburnhillschamber.com; website: business.auburnhillschamber.com/events 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.

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

AIRBNB FROM PAGE 3

Real estate agents in Michigan, who are rallying behind a set of bills waiting in the Capitol, say it doesn’t matter why someone buys a house. The practice of renting out second homes to vacationers, notably in tourist or lakefront destinations, is longstanding in the state — even before Airbnb. “Their definition of an illegal hotel is a vacation rental — again, an industry that has existed and thrived in Michigan for decades,” said Ben Breit, a Midwest spokesman for San Francisco-based Airbnb. “Someone’s home is not a hotel.” Home sharing evolved to capitalize on traveler preferences for authentic, unique visitor experiences. Millennials in particular want to experience a new place by immersing in its neighborhoods, Breit said, while empty-nesters — especially women — are the fastest-growing host demographic on Airbnb’s platform. Airbnb has become a disruptive force to hotel chains’ business models, forcing them to evolve if they want to compete for visitor dollars. The hotel industry views the Michigan legislation as part of a national effort “to protect the business model of Airbnb and its counterparts,” said Troy Flanagan, vice president of state and local government affairs for the Washington, D.C.-based American Hotel & Lodging Association. Breit disagrees. Airbnb spreads the benefits of the tourism industry to people who “maybe can’t afford a hotel or maybe they specifically do not want to stay in a downtown hotel district, they want to blend in the background, they want to live like a local,” Breit said, noting that hotel occupancy in Michigan is still rising. “We’ve always said for Airbnb to win, nobody has to lose.”

Legislative effort Republican state legislators have introduced identical bills in the Michigan House and Senate that would define a short-term rental as a single-family home, a multi-family unit that houses up to four families or any number of units in a condominium complex that is rented for less than 28 days at a time. The bills — sponsored by state Rep. Jason Sheppard, R-Temperance, and Sen. Joe Hune, R-Fowlerville — were introduced in April but have not yet been given a committee hearing. Senate Majority Leader Arlan Meekhof, of West Olive, considers the legislation significant because of the impact of short-term rentals on his Ottawa County district, spokeswoman Amber McCann said. The legislation would define shortterm rentals as residential activity allowed in all residential zones, so municipalities couldn’t use zoning ordinances to restrict them from particular districts or neighborhoods. Cities and townships would be allowed to enforce noise and nuisance ordinances. Bills addressing regulation or taxation of short-term rentals have been introduced this year in 28 states and the District of Columbia, according to data compiled by Alexandria, Va.based lobbying firm MultiState Associates and shared with the National Council of State Legislatures. Four states — Idaho, Nevada, Utah and Virginia — have approved legislation, according to the group.

Supporters paint the issue as protecting private property rights. Restricting or banning short-term rentals tramples on a homeowner’s ability to decide how to use his or her home, said Brian Westrin, public policy and legal affairs director for Michigan Realtors, an industry trade association. Buyers of second homes consider whether they might be able to rent out the property when they’re not using it before deciding to purchase, especially if it’s used part time, he said. Uncertainty could lead them not to buy. The Michigan Realtors’ group has created a couple of radio advertisements meant to drum up support for the legislation. Westrin would not disclose how much the group planned to spend. But Michigan Realtors is one of the most prolific campaign spenders among Lansing interest groups; it had more than $650,000 in its political action committee as of July, according to state records. The Michigan Campaign Finance Network ranked the Realtors’ political action committee the seventh-largest PAC in the state for fundraising from January to July 20, based on state disclosures. Sheppard, who works as a commercial real estate agent, received $2,650 between May and June, records show. He said the group supports real estate agents and the contributions are not directly tied to his support of the legislation. Hune received $250 from the Realtors’ group on April 25, the day his bill was introduced in the Senate. Hune did not respond to messages seeking comment. Nationally, the hotel industry is fighting back. The New York Times reported in April that the American Hotel & Lodging Association has $5.6 million budgeted for regulatory work and plans to invest in research to fight Airbnb’s growth. “We’re not threatened by anybody who’s competing with us under the same set of rules and taxes that have been foisted upon us,” Flanagan said. “We’re not even competing by the same rules, so it’s hard to say they’re even competition.”

‘The party house’ Pauline Smith’s family has owned lakefront property in Oakland County’s White Lake Township since 1925. She now lives down the street from a house she says changed ownership a few years back and is now a shortterm rental. “It becomes the party house,” she said. The home has hosted weddings, bachelor and bachelorette parties and graduation parties, Smith said. She said she has doused tenants’ campfires when they were left to burn all night, and had to ask someone to move a car parked across her driveway. “If people want to run a hotel,” she said, “they should go buy a hotel.” Data provided by Airbnb, however, suggest homes listed on its site aren’t churning through guests: 48 percent of the company’s listings in Michigan are rented for 30 or fewer days out of the year, according to the company. That figure is 70 percent when expanded to 60 or fewer days. Hotels have their own data — a March report from CBRE Hotels’ Americas Research, a division of real estate firm CBRE Inc., paid for by the American Hotel & Lodging Association’s nonprofit foundation — that found that homeowners who list two or more homes made up nearly 40

percent of Airbnb revenue in the U.S. City of Detroit lawyers are reviewing proposed ordinance changes that would clarify that short-term rentals are not an allowed home occupation in city residential districts. Marcell Todd, director of Detroit’s planning commission, said planning staff believed short-term rentals already were illegal under city zoning law. But after the proposed changes were presented to City Council, he said, questions came up about the city’s current practice for short-term rentals. A public hearing is set for Nov. 2. Asia Hamilton has rented her apartment in Detroit’s New Center neighborhood since 2015 to make some extra money. A freelance photographer, Hamilton said she charges $105 per night on Fridays and Saturdays when she’s gone to help take care of her mother, who is disabled. Staying in someone’s home is a completely different experience than staying in a hotel, she said. And she tries hard to be a good neighbor. “Trust me, you don’t want any crazies at your house,” she said, adding that positive guest reviews are critical to landing future business. Airbnb has reached more than 350 partnerships with states and cities across the country on regulations ranging from short-term rental registries to remitting taxes, Breit said. Airbnb also has a tool on its website for neighbors to report problems with tenants at its listed homes. The company says it has removed hosts from its website as a result of neighbor complaints. In June, Airbnb signed a voluntary agreement with the Michigan Department of Treasury to submit 6 percent use tax on bookings in the state starting July 1. A Treasury spokesman would not confirm the amount of tax revenue received so far, citing state law. “The way we’re approaching this is: Take the bans off the table, wherever they may be, and then we can have a detailed and productive discussion about what fair rules and regulations look like,” Breit said. Pierce, of the Dearborn Inn, said the tax agreement doesn’t go far enough. Not only is he required to pay use tax on his room bookings, he said, but he also charges 8 percent more than a homeowner would, partly to account for a tax he is required to collect for tourism promotion on behalf of the regional visitors’ bureau. Airbnb does not collect that hotel tax in Michigan.

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Hotels up their game

The Crain’s reader:

Home-sharing companies do compete with hotels, particularly in the extended-stay segment, though it’s difficult to determine the extent because Airbnb and other sites don’t track data the same way hotels do, said Jeff Beck, interim associate director and an associate professor in the School of Hospitality Business at Michigan State University. Hotels have faced pressure on prices from short-term rentals, he said, though they still have a responsibility to generate revenue for the hotel owners and management companies. They also have to consider the types of amenities they offer as home sharing grows. “It’s kind of like silent competition, if you will. You know it’s there, but you don’t know all the ramifications of it,” Beck said. “It makes hoteliers get to the top of their game.”

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CAMPAIGN FROM PAGE 1

Still, the tourism industry — like many other industries — says it is trying to adapt to technology-driven changes disrupting everything from where vacationers stay to how they plan their trips. That means Pure Michigan has to change, too, said Dave Lorenz, vice president of Travel Michigan, a division of the Michigan Economic Development Corp. That includes efforts to better understand millennial travel preferences and the rise of the sharing economy, as home-sharing service Airbnb disrupts hotels’ business model. There’s also more reliance on digital and social media marketing. This fall, Travel Michigan recruited three people to travel scenic routes across the state, with their destinations chosen by visitors to the campaign’s Facebook and Instagram pages. Lorenz, a self-described fiscal conservative, said he wants to ensure the money spent on the Pure Michigan program is used wisely. Pure Michigan’s $35 million budget (only part of which goes to the Tim Allen ads) is a sliver of the state’s $10 billion general fund. But whether taxpayers are getting a solid return on investment has been called into question because the MEDC and the company it hired to calculate ROI refused to show how it calculated ROI. The Pure Michigan brand has grown beyond tourism. MEDC staff has adopted it for use in its business attraction marketing. It’s also a brand emblazoned on everything from T-shirts to coffee mugs. Lorenz said he thinks Pure Michigan could last for awhile, provided it doesn’t become associated with negative imagery. Concerns about the brand’s viability surfaced during the disastrous drinking water crisis in Flint, as lead-contaminated tap water threatened to tarnish Michigan’s image as home to pristine rivers and lakes. “Our role when it comes to the brand is to adjust to the times to make sure it always tells the truth, because the essence of successful marketing is telling the truth,” Lorenz said.

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Before Pure Michigan, the state’s tourism campaign centered on the slogan “Great Lakes, Great Times,” adopted in the late 1990s under thenGov. John Engler. Prior messaging focused on showing a visitor all the activities Michigan had to offer, Lantz said, but lacked a sense of what it felt like to be in Michigan. Why should Ohioans come to Michigan when there are plenty of places to fish near home? In preparing their pitch, McCann staffers surveyed people from other Midwestern states for their perspectives of Michigan. One response stuck out: “Like Alaska, only closer.” Like Alaska. A place surrounded by water. A place undisturbed by the steamroller of “sameness” because it’s not a passthrough state; because it generally requires intention to get here. A place where people can refresh and return to life the way it was meant to be. The formula McCann developed for its TV and radio ads — the theme from the 1999 film “The Cider House Rules,” panoramic landscapes of lakes and trees, the voice of Detroit-raised actor Tim Allen — capitalized on those ideas and made them a darling of the industry.

Mark Canavan, McCann Detroit’s executive vice president, first realized Pure Michigan’s power when emails began to pour in by the hundreds, from residents and expats alike. “That’s when I knew that we had really tapped into something,” he said. “We knew we had a little bit of a lightning in a bottle.” Forbes named it one of the 10 best state tourism campaigns in 2009. Travel Michigan and McCann have won numerous awards for the work. Allen has channeled his voiceover gig into serving as an unofficial state champion, extolling Michigan’s Great Lakes beaches as rivals to any East Coast oceanfront. Those close to the campaign in state government, advertising, regional visitors’ bureaus and industry research all say Pure Michigan took off because it tapped into nostalgia at a time when Michiganders were desperate for hope. “This campaign not only enhances the state’s image as a place to come and see and enjoy all of the attractions, but also to invest, start a business, to live in, to buy a vacation home, to retire — all of these rather key economic development measures,” said Bill Siegel, founder and CEO of Toronto-based Longwoods International, which Travel Michigan hired to evaluate the Pure Michigan campaign for marketing insights and return on investment for its first decade.

State: ‘Trust our numbers’ Travel Michigan contends that the spots prompted millions of trips and more than $1 billion in spending last year, citing Longwoods’ research. Yet it’s impossible to independently assess the credibility of Longwoods’ numbers, because neither the company nor the state will provide the public access to how it calculates returns. Siegel would not disclose the methodology the company developed to calculate the campaign’s ROI, saying it’s proprietary. Nor would taxpayer-supported Travel Michigan provide direct access to how Longwoods calculated return on investment. The agency said in an email that Longwoods researchers asked visitors if they saw a Pure Michigan spot and whether it prompted their trip, and asked them to rate the state versus other states. The state said Longwoods controlled for “internal and external factors,” but would not say what those were. By Longwoods’ analysis, the $12.9 million invested in Pure Michigan advertising in 2016 yielded $107.3 million in new state tax revenue — a return of $8.33 for every dollar spent. The Mackinac Center for Public Policy, a Midland-based, free-market think tank, has been an outspoken critic of Travel Michigan, and specifically Longwoods, for its ROI findings. The state last month parted ways with Longwoods, a decision Lorenz said was more about gaining new insights on how to direct the campaign in the future and less because of the ROI criticism. Travel Michigan plans to sign a three-year deal worth $92,500 per year, or $277,500, with Indianapolis-based Strategic Marketing and Research Insights. The Mackinac Center contends the figures are too high to be believed, but it says it can’t know by how much because the company doesn’t disclose its methodology. Mackinac also claims the MEDC has a conflict of interest because it manages the program being studied and would have a reason to seek positive numbers.

Rocky start for Allen, campaign It’s hard to picture the Pure Michigan tourism campaign ads without the narrative voice of actor Tim Allen, who grew up near Detroit. But the 2006 pairing almost exploded in acrimony before it had a chance to take off. Allen was the advertising firm’s first choice, said Mark Canavan, an executive vice president and executive creative director at McCann Detroit, who has been involved with Pure Michigan since the start. At the time, Allen — who has said he aspired to voiceover work — had been the voice of Buzz Lightyear in the first two “Toy Story” franchise films. He was, as they say, kind of a big deal. “I call it a lucky strike,” Canavan recalls of the casting. But that lucky strike got off to a rocky start. During the first recording session, which took place by phone, the agency asked him to try reading the lines again. That didn’t sit well

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“All I’ve seen so far is a highly secretive consultant tell the MEDC that the program is effective and has a high return on investment,” said Michael LaFaive, fiscal policy director at the Mackinac Center. “Both the consultant and the MEDC have a reason to puff up the success of this program.” The Mackinac Center released a report in 2016 using its own statistical tool to calculate Pure Michigan’s ROI, looking at the impact of tourist spending on hotels and accommodations, arts and entertainment and amusement and recreation. Results showed little impact on the individual industry sectors and a negative net return on investment. Lorenz characterized the Mackinac Center’s criticism as political, noting that it had opposed MEDC tax incentive programs in the past. “People always focus on the (ROI) numbers. I never have,” he said, adding that he finds the insights gleaned from the research more important, such as learning that Michigan is highly regarded for its nature and ur-

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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 // O C T O B E R 1 6 , 2 0 1 7

As economy improves, so does Michigan tourism By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

PURE MICHIGAN VIA YOUTUBE

State tourism officials say Pure Michigan is leading to more brand awareness and more visits to the state.

The Mackinac Center argues that if lawmakers will not stop funding Pure Michigan, they should at least have an independent state agency conduct an independent audit of the campaign’s performance and account for the opportunity costs, or tradeoffs, that come with diverting tax dollars to tourism promotion.

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A bet on success

with the actor, at least initially. “I was filming ‘Wild Hogs’ when I started doing them, and this director was directing me (over the phone) like I had never done it, and I took offense to that,” Allen told Crain’s sister publication, Ad Age, in 2009. (A rep for Allen said he was not available for an interview.) “We were doing this phone patch, and I was in a hurry and telling him I got it, and he said, ‘No you don’t, Mr. Allen.” Recalls Canavan: “He had a rough first hour, and I think he was going to kill me over the phone. ban experiences but not so much for arts and culture. “People also assume that we’ve been out looking for research that only helps us make us look good,” Lorenz added. The return-on-investment calculations are “something we have to do because it’s expected, and it does give us an idea of what’s happening.” He said the numbers are estimates, because there is no accurate way to track every visitor, what brought them to Michigan or their spending in the state. But Lorenz said the size of Longwoods’ sampling — of 4,000 travelers from the Midwest and nationally — offers a “scorecard” to measure how the brand is recognized outside of Michigan. Ninety-eight percent “of people who look at things in a fair manner will look at what we do and say it’s really making an impact,” he said in response to the Mackinac Center’s criticism. Siegel said Longwoods’ data are conservative on purpose. “When you’re there talking about public funds being used for advertis-

On reflection, Allen later told Dave Lorenz, vice president of Travel Michigan, the Pure Michigan ads challenged his comfort zone and, as a result, he’s a different performer today. “He knew what he was doing and brought my voice to a place that I wish some directors would do with me as an actor,” Allen told Ad Age. “He kept pushing it and pulling it back, saying it sounds too phony and too disc jockey. I have done voiceovers, but never like this, where I clearly just used the best parts of my pipes. I’m proudest of some of that work more than anything else.” ing and marketing, it’s very contentious,” he said, “so we’ve seen more scrutiny in this area than anything else we’ve ever done.” The purest way to measure the impact of tourism marketing would be to run the campaign in one market and not in another to control for exposure and to see if tourist activity increases, said marketing professor David Reibstein of The Wharton School at the University of Pennsylvania. Another way is to track tourism activity as a campaign is rolled out nationally to new markets, said Reibstein, who is not familiar with the Pure Michigan campaign. Still, he said, organizations would be “irresponsible” if they didn’t attempt to quantify ROI on public spending programs. “They are estimates, but you need these estimates. What are you going to do in the absence of them?” Reibstein said. “Let’s say we spend and the study shows we have a negative ROI. Would we want to know that? And the answer is absolutely.”

The state intends to continue working with its available funding in the most fiscally responsible way, Lorenz said, while building a Pure Michigan brand that can outlast whatever format the ads take. Already, Travel Michigan has begun to experiment with the structure that made it famous. Its Detroit ad, for instance, is faster-paced and uses slightly different theme music. McCann also has shifted to make Pure Michigan ads focused on passion travel, highlighting Michigan’s foodie culture and craft beer scene, rather than sticking to a certain geography. Canavan, McCann Detroit’s executive creative director, said the group wants to update its winter advertising at some point. He said marketing for passions and interests, rather than places — similar to the food and craft beer ads produced last year — will be more important in the future. So will the role of social and digital media. “We know we’ve got to be relevant. We have to find where people are going,” he said. “The goal for us is to make sure we’re not trying to be everything to everyone. … If you’re everything to everyone, you’re kind of nothing to no one.” At some point, he said, the state will have to make a run at something new — especially if TV declines as a medium compared with other digital tools. “It is really weird in the ad business to say, ‘We’re going to try to create a campaign that will last for a generation or more,’ but I can tell you honestly when we were working on this — before we shared it with anyone — that was very much on our mind,” Lantz said. “One of the hardest things in the world … of advertising to do,” he said, “is to come up with the campaign that follows the great campaign.”

An improving economy is contributing to a strong tourism season in Michigan. From state park campsite reservations to national park visits, from Mackinac Bridge crossings to hotel stays, tourists are driving a solid Michigan summer for the tourism industry, data show. People in the industry, including visitors’ bureau directors and hotel operators, are optimistic the pace will continue as visitors flock to see Michigan’s fall colors. Travel in Michigan, in general, has been rising steadily since the bottom of the recession in 2008 and 2009, leaders of local, regional and state agencies say. The economy now is in its eighth year of expansion. State tourism officials also point to evidence that the state’s Pure Michigan tourism campaign is leading to more brand awareness and more visits to the state. But the data they rely on are estimates based on calculations that the state won’t make publicly available. Anecdotally, industry members say they believe their investment in Pure Michigan advertising — a number of regional travel bureaus help pay for the commercials — is worth it when they see more people booking hotel rooms and visiting events. “I don’t think there’s ever a time when you can say one particular thing does the trick,” said Michael O’Callaghan, executive vice president and chief operating officer for the Detroit Metro Convention and Visitors Bureau. “You can have a great advertising campaign for a candy bar and people will buy it once, and if the candy bar stinks, they’re not coming back. We’ve got a pretty good-tasting candy bar.” Detroit’s post-bankruptcy recovery has spurred new development and interest in the city, especially downtown, O’Callaghan said. He added that he has seen more foot traffic in the city center, especially on weekends. In addition, changing tourism trends look as though they will have a positive effect on the statewide travel industry, as millennials increasingly look to spend money on experiences, rather than possessions, said Dave Lorenz, vice president of Travel Michigan, the state’s tourism division. Gov. Rick Snyder has promoted Michigan as a tourism destination on his overseas trade trips, most notably in China; the state saw some softness in international visitors in 2016, Lorenz said, which he said could be attributed to a stronger U.S. dollar and uncertainty surrounding the presidential election. But Lorenz contends Michigan will benefit from travelers who spend more of their discretionary money on vacations, in part because Pure Michigan advertising has stayed active in regional and national markets as the economy improved. It’s difficult to quantify the Pure Michigan campaign’s impact on tourism activity. The state hires an outside company to research brand awareness through surveys and gauge return on investment. But those figures

are estimates, and since travelers aren’t polled at the state line there’s no definitive way to determine what prompted someone to take a trip. Tourism highlights from across the state so far this year include: J Hotel occupancy in Grand Rapids was close to 69 percent through August, said Doug Small, president and CEO of Experience Grand Rapids. That’s up from a low of 48 percent in 2008, he said. Likewise, hotel average daily rates are running at about $117 through August, Small said, up $3 from the same time last year. J In Traverse City, hotel visits were trending upward by about 3 percent from May through September year over year at three hotels owned by

“You can have a great advertising campaign for a candy bar and people will buy it once, and if the candy bar stinks, they’re not coming back. We’ve got a pretty good-tasting candy bar.” Michael O’Callaghan, Detroit Metro Convention and Visitors Bureau

Alex Mowczan’s Summerside Properties LLC. July was slightly down, though the weather was cooler and wetter this year, he said. J Hotel occupancy is 68.1 percent through August in metro Detroit, compared to 67.3 percent a year ago, said O’Callaghan, of the metro Detroit visitors’ bureau. Average daily rates are now at close to $103 through August, up from nearly $99 last year. Occupancy crashed to nearly 47 percent during the worst of the recession, he said. J Meetings and convention business is growing in Grand Rapids, but leisure travel has seen “tremendous growth” in part due to the region’s craft beer scene and the city’s arts and culture, Small said. J Total lodging reservations at state park campsites were up close to 14 percent in July from the same month in 2016 — 997,381 compared to 875,919, according to data from the Michigan Department of Natural Resources. “This is probably as good as it’s been, I would say, in 10 years,” said Ron Olson, the DNR’s chief of parks and recreation. J Mackinac Bridge crossings have increased every month of the year through July, at roughly 2.2 million for the first seven months of 2017, based on data from the Mackinac Bridge Authority. J Visits to Pictured Rocks National Lakeshore in Munising were up about 6 percent year over year for January and February, acting park Superintendent Nancy Finley said. Summer was more mixed — down 5 percent in June, up 3 percent in July. Weather, she said, is a big determining factor in whether people travel: “It’s been a little colder this year,” she said. “We’re having a warmer fall.”

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A UM-UP affiliation also could push Detroit-based Wayne State into clinical partnerships with Henry Ford Health System in Detroit or Flint-based McLaren Healthcare, which already owns Karmanos Cancer Institute on the DMC campus and has expressed interest in acquiring at least two of DMC’s hospitals. Crain’s first reported last week that University Pediatricians has been talking about affiliating with UM in an effort to replace its longtime academic partner Wayne State. The dispute between UP and WSU is part of a yearlong running battle that began last fall when UP signed a teaching agreement directly with DMC. WSU said the agreement violated a 2003 implementation agreement because WSU wasn’t a party to the agreement. M. Roy Wilson, M.D., WSU’s president, in August called the contract with DMC an “existential threat” to the university. None of the principals at UM, Wayne State, UP or DMC would comment on the negotiations. Eight people familiar with the matter who requested anonymity confirmed the talks. While the primary disagreement now is between UP and Wayne State, a larger issue is the future relationship between Wayne State and DMC. Last year, the two longtime academic partners tried to negotiate a long-term “transformational” teaching, clinical services and administrative contract. They settled for an 18-month agreement for clinical services and administration that left both sides unhappy. Wayne State of-

OPENINGS FROM PAGE 3

Joshua Elling, executive director of JEI, announced that exterior improvements to Norma G’s, which JEI is responsible for, are starting now. The organization recently installed new glass windows and is working on other aspects of the facade. It also plans to install an outdoor patio and a “green” parking lot, which will absorb storm water runoff and filter it before it returns to the water system. (Elling did not return follow-up phone calls regarding an update on JEI’s new headquarters.)

Slow progress Jesse Bandfield, general manager of The Commons on Mack Avenue on Detroit’s east side, said where there have been boards, glass panes are being installed on the building that will serve as a neighborhood coffee shop and coin laundry. “We are in the final pushes of construction. The (coffee) bar area is being built out. The opening date is November or December,” Bandfield said. The Commons originally was scheduled to open in the fall of 2016. “The delay was caused by a lack of funding and getting everyone from contractors to designers lined up,” he added. The coffee shop and laundry facilities will be on the main floor. Upstairs, where new windows have been installed, will be used for community space, including a conference room and offices for the Mack Avenue Community Church, which started the business. “Hopefully, I can make a space that reflects the community here,” said Bandfield, who took the position in June. “We’ve hired five

ficials have said they are trying to negotiate a new affiliation deal with other health systems. Attending staff at DMC Children’s Hospital and UM’s C.S. Mott Children’s Hospital in Ann Arbor already regularly consult with each other over the phone, in videoconferencing and also refer patients to one another and conduct specialty consultations. At a WSU management meeting Oct. 6, UP President Mary Lu Angellili told WSU pediatricians that UM had agreed to the talks and that they were free to discuss it with fellow physicians, according to a UP pediatrician who attended the meeting and requested anonymity. Pediatricians at the meeting asked many questions that Angellili said she couldn’t answer, the pediatrician said. They included: Who would chair the departments, UM doctors or UP doctors?; what would the salaries be, the same as UM or less?; and would UP doctors retain the same rank as professors, or would some lose seniority and become associate professors? Angellili told the pediatricians UM would create a UM-Detroit affiliate, the pediatrician said.

UM’s upsides with UP and Children’s in Detroit For at least five years, UM has wanted to enter the eastern Wayne County market, sources said. UM already operates many clinics and outpatient centers in western Wayne and Oakland County, but in smaller markets and not in downtown Detroit. Outside of the Ann Arbor market in Southeast Michigan, UM operates the Brighton Health Center and the people.” Word on the business will get out via its web site and social media. The Commons is expected to be self-sufficient once it gets rolling.

A problem of scale Some businesses grew while they were planning. The beauty products business Twisted Roots LLC was originally scheduled to open last fall or this past spring, but it was conceived as a smaller endeavor. Now it has become a larger project that includes a more extensive store along with five upscale apartment units. The change caused it to hit obstacles, such as reconfiguration of the building and gaining approvals from city government. Owner Teresa Norman said the building is being rezoned to be a storefront facing Gratiot Avenue. The rest of the building was already zoned for the apartments. “We will rent them out for additional income,” she said. “The whole plan is better now, but it took longer to finish.” The company won a $75,000 Motor City Match grant to be used for interior and exterior renovations, masonry repair, equipment and fixtures. But it also required Norman and her husband’s personal funds. “It has been a big undertaking,” she added.

Permits and real estate The familiar problem of securing needed construction permits or licenses has also presented impediments. Midtown-based brewery and restaurant Motor City Brewing Works co-owners John Linardos and Dan Scarsella still plan to open a second location in part of the Hunter’s Supper Club building in the Livernois

Kellogg Eye Center in Brighton; the Livonia Health Center and the Livonia Center for Specialty Care; the Northville Health Center; and the Assarian Cancer Center radiation oncology clinic in Novi. Last year, UM invested in St. Joseph Mercy Chelsea Hospital with St. Joseph Mercy Health System to create the UM Care at St. Joseph Mercy Chelsea Hospital.

UM in Detroit? Why would UM be interested in the Detroit market? First, UM would benefit from more acutely ill patients and large numbers of Medicaid recipients at Children’s Hospital, a far larger number than UM doctors see in Ann Arbor. A downtown Detroit location would also offer UM expanded research opportunities and qualify it for more research grants, many of which target underserved or low-income populations. Clinical referrals and consultations would multiply, as well as residency and fellow experiences. The additional research and clinical cases would most likely propel UM into the top five nationally in the U.S. News and World Report Best Hospitals honor roll, according to national health care experts. UM Hospitals and Health Centers currently is No. 6, vaulting from No. 18 in 2016. Revenue also would increase to UM as it absorbed a teaching and clinical services contract from DMC and possibly additional insurance medical billing from its employed physicians. In addition, UM would receive additional indirect revenue from research and clinical services from the National Institutes of Health. Avenue of Fashion district. The opening will happen roughly eight months later than the original plan. Instead of renting the property and its courtyard, the partners have bought half the building from owner Chad Dickinson and his partner, Linardos said. “We closed on the real estate a few weeks ago. It took longer than we thought. Issues came up when we ran it by the city.” He added that opening a brewery requires extensive applications and licensing. Linardos does not know the fate of the other section of the building. The business partners’ schedule now is cleaning out the building this month, completing financing by the end of year and starting construction the first quarter of 2018. Dickinson did not return telephone calls regarding the former supper club building. He originally was renovating the building to house Slyde, a gourmet slider restaurant, and Motor City Brewing Works. Slyde owner LJ Nelson had no comment on the status of his business. Last year, Nelson was planning to open his restaurant in the same building as Motor City Brewing Works.

Orchard growth stalls The Grosse Pointe Park-based nonprofit Wolverine Human Services announced in August 2016 its plans to plant 3,500 apple trees on 11 acres of vacant land at Charlevoix and Lenox streets on Detroit’s east side, a project known as Core Orchards. Matthew Wollack, Wolverine director of development and marketing, expected to break ground on the project last September. Flash forward to this fall. He said because of zoning require-

But some experts and physicians say UM might not want to upset its academic relationship with Wayne State by interfering with a clinical affiliate. Some also question whether UM would want to do business with a for-profit hospital like DMC, whose owner is undergoing massive cost-cutting and management restructuring.

Wayne State’s next steps? Under the current agreement between UP and Wayne State, either party must give six months’ notice to end the relationship. Last month, UP gave WSU notice it would be talking with other universities, according to a Wayne State official who requested anonymity. If Wayne State’s clinical affiliation with UP ends, the university has already said it would try to form its own pediatric group. Some UP pediatricians privately say they prefer Wayne State and UP to work out their differences, and if that doesn’t happen, they could form the core of a new pediatric group. But creating one would still be a large task. Wayne State would also likely be forced to strike clinical and teaching deals with either Henry Ford or McLaren, or both, depending on the service line. Henry Ford officials have confirmed it is talking with Wayne State on a variety of clinical and teaching issues. Henry Ford also said it has considered reopening its shuttered inpatient pediatric unit if economic conditions are right. McLaren, which has a close relationship with MSU, has declined comment on the UM-UP and Wayne State issue. ments for an urban orchard, they had to change the orchard’s time line and size. Now Wolverine has permission to plant 350 honey-crisp apple trees on a half-acre as a “demo orchard.” “We did this because our goal is still to plant a larger orchard. We will be the first city-approved orchard,” Wollack said. Planting will begin in November. Meanwhile, the orchard land has been cleared and mulched.

Next for Motor City Match Motor City Match offers four categories of awards to business owners: cash awards, design awards, business planning awards and space match-making awards. The program tracks progress in each of the four categories. Fifty-seven of the 60 design award winners have completed the process, Askew said, and one of the 87 cash awardees withdrew their award. In the business planning category, seventy-five percent of the winners have completed all the classes. Half of the businesses that won the match-making award have completed the process; the rest are still in process. So far, 28 of the 87 awardees have opened their businesses. The program is attracting interest from other U.S. cities, whose leaders are talking to Askew and his team to explore starting a similar program. Those cities include Memphis, which is the most serious about the program, Philadelphia, New York, Baltimore and Milwaukee. Round nine program winners will be announced at the end of October. Askew said Mayor Mike Duggan hopes the program will continue for three to five years. It has obtained funding for the program through the end of 2018.

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Monday, October 30, 2017

COBO CENTER | DETROIT, MI DALE G YOUNG/THE DETROIT NEWS VIA ASSOCIATED PRESS

House Speaker Tom Leonard, R-Dewitt (from left), Detroit Mayor Mike Duggan and Rep. Lana Theis, R-Brighton Township, chair of the House Insurance Committee, announce bipartisan legislation designed to reduce Michigan drivers’ insurance payments on Sept. 26 at the state Capitol in Lansing. The legislation has run into bipartisan opposition in the House since being introduced.

ANALYSIS “The bill doesn’t meet the criteria that’s been outlined in the caucuses’ current and past positions,” said Rep. Sherry Gay-Dagnogo, D-Detroit. House Democrats have long wanted auto insurance reform that removes non-driving factors like credit scores and education level from how car insurance is priced in Michigan, as well as guaranteed — and lasting — premium reductions. Duggan has said axing credit scores from auto insurance rating factors is “not politically possible.” The biggest criticism of the Duggan-Leonard-Theis plan centers on the three-tier system of medical coverage allowing drivers to opt to purchase as little as $25,000 in post-hospitalization care in lieu of the current unlimited medical coverage. That plan promises an average 20 percent reduction in premiums for a period of five years. Theis said giving drivers the choice to opt out of the unlimited medical coverage and utilize their health insurance for costs beyond the $25,000 cap is a response from drivers “crying” for lower auto insurance rates. “If the people will listen outside of the Lansing bubble, this is not a hard decision to make,” said Theis, R-Brighton Township. But lawmakers in both parties are concerned this plan will dump tens of millions of dollars in costs onto the Medicaid system and leave the most badly injured drivers with insufficient long-term care options, bankrupt or both. “I’ve got strong concerns in regards to the impact it would have for people who ended up in that catastrophic accident,” said House Minority Leader Sam Singh, D-East Lansing. “I just

want to make sure that we’re protecting those individuals going forward.” There’s also deep opposition from members of both parties to the Medicare-level fee schedule for auto accident procedures that is proposed under Theis’ House Bill 5013. A lobbyist for the Michigan Health & Hospital Association has called those payment rates “draconian” compared to today’s uncapped charges — and lawmakers on both sides of the aisle appear to be listening. A bipartisan coalition of House members sought to capitalize Thursday on the apparent stalemate by putting forward a new 15-bill package that contains a host of provisions geared toward reining in medical costs for car accidents, but not placing any kind of cap on benefits. “We wanted to get a plan out there that could be a counter to the Duggan proposal and show there’s another path,” said Rep. Michael Webber, a Rochester Hills Republican. “The (Duggan) proposal seems weighted more toward the insurance companies.” The alternative plan calls for a medical payment schedule at 185 percent of the workers compensation system — the payment level endorsed by the Coalition Protecting Auto No-Fault, a group of doctors, medical clinics and trial attorneys who treat and represent injured drivers. That payment rate would, for instance, lower the cost of an injured driver’s shoulder surgery in the metro Detroit hospital market from $2,800 to $1,740, instead of the $730 that Medicare would pay under Duggan’s plan, according to medical billing data compiled by Mitchell International Inc. The $25,000 personal injury protection benefits Duggan and company propose is aimed at cutting off what

has become a lucrative pot of money targeted by trial attorneys whose firms handle an injured driver’s medical bills and pocket a third of the claims paid by insurers. Crain’s reported last week that the number of first-party lawsuits over personal injury benefits skyrocketed by 130 percent statewide over the past decade, with the largest concentration of increases being in Detroit, Wayne County and the suburbs of Macomb County. The alternative reform proposal contains a lot of the same provisions in the Duggan-Leonard-Theis plan. Lawmakers from both parties and both chambers have agreed in principle for years on the need for a state authority to combat medical care fraud in the system. “We think if a lot of this stuff happens, you’re going to see a reduction in rates,” Webber said. “If you can get the fraud out of the system, get the lawsuits out of the system, those costs are just passed along to the customers.” But the fraud authority reform has died in multiple legislative sessions as lawmakers have been unable to agree to a grander auto insurance plan. Rep. Mike McCready, a Bloomfield Hills Republican who is a firm “no” vote on the Duggan-Leonard-Theis plan, said lawmakers should start with voting on the fraud authority and reining in seven-day insurance plans that allow half of the motorists in Detroit to drive without insurance 51 weeks a year. McCready is advocating for smaller steps, instead of the big win Duggan and Leonard are looking for. “Right now, it seems like ... they want to run the ball back and spike it in the end zone,” McCready said. “Let’s just take the ball and run it three or four yards at a time.”

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FROM PAGE 3

Hosted by Governor Rick Snyder The Summit will feature: • Internationally recognized speakers • Experts from across the country • Presentations addressing cybersecurity issues impacting the world • Breakout sessions on emerging trends, ct ces technology and best p practices

Fo o m ore information nfforma ion orr to o register eg giistte visit viss t For more w ww m ch gan gov/ ov/cyberrsummitt www.michigan.gov/cybersummit

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THE WEEK ON THE WEB

RUMBLINGS

Judge deals Morouns another blow in battle over bridge to Canada

Sister Pie in talks to buy West Village building

OCT. 6-12 | For more, visit crainsdetroit.com

Wayne County judge dealt the owners of the Ambassador Bridge another legal blow last week, ruling that Gov. Rick Snyder’s 2012 agreement with the Canadian government to build a new publicly-owned span over the Detroit River was legal. Wayne County Circuit Court Chief Judge Robert Colombo Jr. ruled in the Michigan Department of Transportation’s favor that the governor had the authority to enter into an interlocal governmental agreement with Canada and Ontario to build the Gordie Howe International Bridge. Colombo’s ruling, made from the bench last Wednesday afternoon, is the latest legal setback for Ambassador Bridge owner and billionaire trucking mogul Manuel “Matty” Moroun’s Detroit International Bridge Co. and related companies that own land in Detroit’s Delray neighborhood. The Moroun companies have been fighting MDOT’s attempt to take about 20 parcels they own in Delray that lies in the pathway of the planned $4.5 billion bridge project. Mike Cox, attorney for the DIBC and other Moroun companies, confirmed that Colombo ruled in MDOT’s favor in a ruling issued from the bench. The ruling does not end Moroun’s challenge of the condemnation proceedings on grounds that a second Detroit River bridge is unnecessary and that MDOT has violated state law and the constitution while buying up land on behalf of the Canadian government, Cox said. “It’s simply our position that international bridges should be built subject to legislative approval and that didn’t happen here,” Cox told Crain’s. “I think everyone agrees this was the first international bridge that was specifically not authorized by the Legislature.” After failing to get legislative approval for the bridge, Snyder inked a deal in June 2012 with then-Canadian Prime Minister Stephen Harper to have Canada finance Michigan’s portion of the cost through a public-private partnership.

BUSINESS NEWS The promised joint venture between metro Detroit’s largest entertainment management companies now has a name: 313 Presents LLC. J Auto parts supplier Sakthi Automotive Group has broken ground on a $7 million building at its manufacturing and distribution campus in southwest Detroit that the company says will create 200 new jobs. J Steve Case, the former chairman and CEO of AOL, said last week in Ann Arbor at the Rise of the Rest bus tour that the Midwest should be home to the next wave of tech startups. J O2 Investment Partners LLC, a private equity firm based in Bloomfield Hills, has finished raising its first limited partner fund, the Oxygen Fund, which exceeded its target of $100 million by getting to $110 million. J Home goods and design company J

An artist’s conception of the Gordie Howe International Bridge that will span the Detroit River, linking Detroit and Windsor. The effort to build the bridge has experienced delays.

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

71%

The ratio of women of color in Detroit who feel left out of the city's economic development plans, according to a new study by the Institute for Policy Studies' Black Worker Initiative.

11,000

The number of homes DTE Energy Co.'s 250-acre solar park in Lapeer is now powering after it recently started operations.

The number of metro Detroit venues 313 Presents LLC, the joint venture between Olympia Entertainment and Palace Sports & Entertainment, will manage. The sites include Little Caesars Arena and DTE Energy Music Theatre.

June and December has relocated from Troy to a bigger space in Berkley and plans to open a flagship retail store there Oct. 21. J Chicago-based Hub International Limited acquired the assets of Farmington Hills-based Marwil and Associates LLC. J More than two dozen workers on strike at Advanced Disposal Services Inc.’s landfill in Salem Township were on strike last week, seeking higher wages and better benefits. J The U.S. Patent and Trademark Office rejected Palace Sports & Entertainment LLC’s application to trademark “Detroit City Soccer Club,” as it was too similar to Detroit City Football Club. J Beaumont Health completed its new $2.5 million Autism Center in its Center for Exceptional Families in Dearborn. J Detroit-based design firm Mutual Adoration opened a flagship store in the Jefferson-Chalmers neighborhood.

J Akervall Technologies Inc., the Saline-based maker of SISU mouth guards, is working with New Yorkbased Triple Eight to be its main distributor for roller derby and action sports in the U.S. J Applications are now open for entrepreneurs, artisans, artists and small businesses to take part in this winter season’s Downtown Detroit Markets, hosted by real estate mogul Dan Gilbert's Bedrock and the Quicken Loans Family of Companies. J Event planning and floral design company Blumz by JRDesigns, which has locations in Detroit and Ferndale, is opening a third shop in Holly. J Detroit-based University Pediatricians physicians group has begun affiliation talks with the University of Michigan amid a dispute with its longtime academic partner Wayne State University. J The new Whole Foods Market Inc. store in Birmingham is set to open Oct. 25 with spirits at its Maple Road Bar and outdoor seating. J McClure’s Pickles Inc. has purchased its food processing plant along the Detroit-Hamtramck border and the growing pickle and relish producer is adding a robot to automate the end of its packaging process.

OTHER NEWS J Detroit-based McGregor Fund has awarded $500,000 to the United Community Housing Coalition to help shield 1,000 homeowners from losing their homes to tax foreclosure. J A $90 million construction project will close a 10-mile section of westbound I-696 between I-75 and I-94 starting in the spring. J The long-vacant Summit Place Mall in Waterford Township could be gone as early as in the spring after the township Board of Trustees voted unanimously for demolition. J Gov. Rick Snyder has appointed Aliyah Sabree to 36th District Court in Detroit. She replaces Judge Prentis Edwards Jr., who joined the Wayne County 3rd Circuit Court in July. J The Michigan Women’s Foundation is merging the Michigan Women’s Historical Center and Hall of Fame into its operations.

ister Pie LLC is cooking up a deal to buy its building and expand the bakery. Lisa Ludwinski, founder and owner of the Detroit-based bakeshop, said she is in talks with the property owner Bill Haska Jr., to purchase the plot of land that includes two buildings totaling 2,070 square feet in Historic West Village. Ludwinski is being represented by Detroit-based O’Connor Realty Inc. and Haska by Detroit-based Hawkins Realty Group LLC. Gordon Hawkins, Haska’s broker, said the landlord has several properties and is “slowly but surely selling off a lot of his stuff.” Haska is in his 80s and has been dealing with health issues this year, which triggered the owner to sell some of his properties across the city. Haska is asking for $420,000 for the two buildings on a land contract with $200,000 down and a five-year term. Everything else is negotiable, Hawkins said. He purchased the buildings at the corner of Kercheval Avenue and Parker Street, built in 1925, nearly 30 years ago. It was an appli-

ance shop at the time. “We are giving Lisa time to put an offer in. We are waiting on her,” Hawkins said. Ludwinski said she was contacted by Hawkins about two weeks ago to discuss the opportunity. Since the lease ended in May, she has been on a holdover lease. Sister Pie won the $50,000 Hatch Detroit prize in August 2014, which helped her open the bakery in 2015. Acquiring the buildings would allow the baker to expand. “Our ultimate plan is to break down the wall between the two spaces and operate as one big Sister Pie,” Ludwinski's email read. “We will plan for a walk-in fridge and freezer in the basement in addition to a better staff break room and more dry storage. Upstairs, we want to extend our kitchen and seating area, as well as build out a comfortable office for our administrative staff.” Ludwinski is currently working to secure funds to make an offer. She did not say what she plans to offer. Neither party commented on when a deal could be made.

Van Conway plans to use his rapid-fire dialogue and businessman bravado to discuss issues impacting small- and medium-sized businesses.

Van Conway to launch radio show on WJR AM 760 Anyone who knows Van Conway knows he likes to talk. The veteran business advisory executive is buying airtime on WJR AM 760 to preach from his more than 40 years of business experience. Conway plans to use his rapid-fire dialogue and businessman bravado to discuss issues impacting smalland medium-sized businesses. He said he will channel his experiences as a distressed business adviser to help keep businesses out of bankruptcy — and help them win. “When I get involved in companies, the creditors forced our arrival,” Conway said. “The entrepreneur can be their own worst enemy, and I want to help them avoid the snowball coming down the hill, to make sure they are making the right decisions to succeed.” ‘Van Conway’s Talking Biz’ will debut 7 p.m.-8 p.m. Wednesday. The program will feature a weekly guest with Brian Elias, CEO of Hansons’ Windows & Siding Inc., being the inaugural guest. Longtime De-

troit sportscaster Eli Zaret will serve as Conway’s co-host. The program’s website, talkingbiznetwork.com, will serve as a meeting point for listeners and business owners to communicate with Conway and ask questions. The show currently is scheduled to air monthly, with the second episode to air on Nov. 15. Conway said he hopes to nationally syndicate the show. The radio program is Conway’s first foray into media as a host. He served as co-founder and CEO of Birmingham-based turnaround Conway MacKenzie Inc. for decades before he was forced out by its board in early 2016. The dispute resulted in a legal battle between Conway and his former firm before settling out of court earlier this year. Following his departure, Conway started a new firm, Van Conway and Partners LLC, and leased space on the floor above Conway MacKenzie on Old Woodward Avenue in Birmingham.

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