Crain's Detroit Business, Nov. 20, 2017 issue by Crain's Detroit Business

NOVEMBER 20 - 26, 2017

Village Green’s Batayeh looks for growth

Other than a parade, what makes Tony Michaels smile?

Page 3

Ron Fournier. Page 8

Manufacturing

Next for Lear’s Simoncini? Rolling up his sleeves By Dustin Walsh dwalsh@crain.com

Matt Simoncini entered the corporate boardroom at Lear Corp. on Wednesday evening to tender his resignation. It isn’t the last time he’ll enter that room, but it was the best time. Simoncini, 56, wants to hang up his traditional Italian suits after 11 years in the C-suite at the Southfield-based auto supplier — five as its CFO Matt Simoncini: and six as its CEO Announced — and trade resignation. them in for overalls. Preferably grease-stained. “Eleven years is a long time in the C-suite of a major corporation; I’m tired, man,” Simoncini told me last Friday, only two days after he made the decision. “I’m only 56, but there are things in life I probably want to do more ... like the freedom not to be on the job 24/7. I want to spend time with my wife and kids. I want to find the best blues lead on my guitar. I’ve got a warehouse full of classic cars. I want to learn how to dissemble and re-assemble an engine. I want to wheel out the wagons and get dirty. I love that shit.” The unapologetically salty executive was, and remains, a titan in the automotive industry. He’s well known for his crass leadership style, his tumblers of whiskey and water and his relentless commitment to his hometown. Simoncini was born on Detroit’s east side, attended Clark Elementary between Mack Avenue and Outer Drive, graduated from Wayne State University and remains one of the top fundraisers for the United Way for Southeast Michigan. He also serves on the boards of Wayne State University Foundation, Detroit Economic Club, Business Leaders of Michigan, the Michigan Opera Theatre and The Parade Co. SEE SIMONCINI, PAGE 20

crainsdetroit.com

Economics

Michigan’s changing economy

Real Estate

Why is this man eyeing Taubman Centers?

Experts say bestprepared companies have invested

By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

him. He doesn’t care if you hang him in effigy,” said Erik Gordon, clinical assistant professor at the University of Michigan Stephen M. Ross School of Business. “His goal is to push companies, and even countries, into making changes that create wealth. That’s it. That’s all he cares about.” Elliott, which launched a bitter takeover attempt of Compuware Corp. from 2012-14, is believed to be seeking changes that could include taking Taubman private or a sale, according to Bloomberg, which first reported Elliott Management’s stake in Taubman last week.

In 2006, Gudel Inc., based in Ann Arbor, sold more than 90 percent of its robots and automation equipment to the automotive industry. Today, it’s closer to between 65 percent and 75 percent, according to Joe Campbell, its vice president of sales and marketing. Gudel has made inroads into the aerospace and warehouse and logisInside tics industries. It’s not that au-  Is Michigan tomotive has be- ready for the next come less im- recession? portant. But after Page 18 being “battered pretty badly in the downturn” a decade ago, Campbell said Gudel has made it a priority to diversify its customer base. Here’s the truth about recessions: No one knows when they’re coming. They don’t come along simply because it has been awhile since the last one. And since the data used to track the economy is based on events in the past, Michigan could slip into a downturn before anyone realizes it. Employer groups say the best-prepared companies will be the ones that have used the economic recovery of the past eight years to invest — in people, technology and equipment — before a weakening economy causes companies to pull back. “Knock on wood, right now we’re certainly not panicked,” Campbell said. “We’re aware it’s going to cycle. I would say we’re prepared as anyone can be.” Recessions typically are triggered by one of two things — a policy choice, like the Federal Reserve’s decision in the late 1970s to raise interest rates to control inflation; or some external shock to the system, like the dotcom bubble in the late 1990s or the financial crisis in 2007.

SEE TAUBMAN, PAGE 21

SEE RECESSION, PAGE 18

JACOB KEPLER/BLOOMBERG

Bloomfield Hills luxury mall giant braces for a fight with head of activist hedge fund Elliott Management Corp. By Kirk Pinho and Dustin Walsh kpinho@crain.com

dwalsh@crain.com

They’ve seized an Argentinian warship and picked a fight with Warren Buffett. But no one outside the two companies knows exactly what Paul Singer’s Elliott Management Corp. is seeking from Bloomfield Hills-based Taubman Centers Inc. now that the activist hedge fund has bought a 3.8 percent stake in the luxury mall giant. Yet one thing is certain: It’s likely to be a warpath Elliott marches as TaubVol. 33 No 47

$2 a copy. $59 a year.

Need to know  Taubman will face a formidable foe in Elliott  Activist hedge fund has bought a 3.8 percent stake in the luxury mall giant  Taubman has been controlled by its founding family for almost 70 years

man (NYSE: TCO), which has been controlled by its founding family for almost 70 years, battles the New York City-based fund at the same time it faces arrows from another activist investor, Jonathan Litt of Connecticut. “Singer doesn’t care if you hate

INSIDE

NEWSPAPER

Focus: Health Care << Nurses want a limit to mandatory overtime, but hospitals cite nursing shortage. Page 10 Bi-partisan, three-bill legislative package on safe nursing staffing introduced in Michigan Legislature. Page 11

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MICHIGAN BRIEFS

INSIDE

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

More than 1.6M from Michigan plan travel for Thanksgiving Dearborn-based AAA projects that more than 1.6 million people from Michigan will travel this month for the Thanksgiving holiday. The auto club released its annual forecast last week for people traveling 50 miles or more, saying that’s up 3.5 percent from last year. AAA said it would be the eighth consecutive year of growth for Thanksgiving travel in Michigan. Nearly 90 percent of travelers plan to go by personal vehicle. Those motorists are expected to see higher gas prices than last year, since Michigan’s current average of $2.70 is 67 cents higher than last year’s average. Most others will travel by air or train. With over 128,000 Michigan residents flying to their holiday destinations, air travel is expected to increase about 6 percent. AAA’s projections are based on economic forecasting by research firm IHS Markit. The Thanksgiving holiday travel period is defined as Nov. 22 through Nov. 26.

Deer hunting brings promise of new spending

Opening day for Michigan deer

STATE OF MICHIGAN

About 500,000 hunters in Michigan are expected to participate in this year’s firearm season for deer, according to the Michigan Department of Natural Resources.

hunters Wednesday means thousands of people began setting out into the wilderness, but the season’s start also brings with it new spending. Last year, spending on leisure travel for hunting and fishing rose 7.2 percent to $364.5 million, according to data from D.K. Shifflet in a news release from the Michigan Economic Development Corp. Hunters' spending on leisure travel rose by $500,000 to $124.3 million in 2016. Around 500,000 (more than 90 percent) of hunters in the state are expected to participate in firearm hunting for deer this season. This segment of hunters by far generates

the most spending, the release said. Hunting generates a $2.3 billion economic impact in Michigan, according to the U.S. Fish and Wildlife Service. That figure includes food and lodging expenses and equipment purchases totaling $1.3 billion. The average individual hunter spends around $2,237, the service found. The state had around 81,000 new customers for hunting licenses in 2016, the release said. And those hunters are using new products and technology and spending more in recent years, Crain's reported. “Throughout the year, but especially over the next few weeks, hunting drives travel within Michigan and

CALENDAR

CLASSIFIEDS

DEALS & DETAILS

attracts sportsmen and women to this great state, generating economic impact for our communities and businesses,” MEDC CEO Jeff Mason said in the release.

KEITH CRAIN

OPINION

OTHER VOICES

Michigan jobless rate rises to 4.5 percent

RON FOURNIER

LANSING — Michigan’s unemployment rate rose by two-tenths of a percentage point to 4.5 percent in October as the number of people in the state’s workforce saw a slight decline of about 2,000. Figures released last week by the Michigan Department of Technology, Management & Budget show Michigan’s October unemployment rate was four-tenths of a percentage point above the national rate but a half percentage point below the state’s October 2016 rate of 5 percent. Bureau of Labor Market Information and Strategic Initiatives Director Jason Palmer said that 10 months into 2017 the state’s jobless rate has declined moderately from 2016, while payroll job gains remain steady. The department said October’s jobless rate increase was the third consecutive monthly rate gain since Michigan’s unemployment rate fell to 3.7 percent in July.

Cornerstone University president to step down

GRAND RAPIDS — Cornerstone

PEOPLE

16-17 8

RUMBLINGS

WEEK ON THE WEB

University’s longtime president Joseph Stowell will step down from the Christian university in 2019. School officials announced Wednesday that Stowell, who’s led the Grand Rapids school since 2008, informed its trustees of his plans earlier this fall. He’ll step down when his contract expires in May 2019. The Grand Rapids Press reports that after failing to persuade Stowell to remain as president, the trustees voted unanimously for him to serve in the role of chancellor once his successor is chosen. Stowell said that role will allow him to serve the school’s next president by representing the university in various venues and helping with fundraising activities. The university has about 1,200 undergraduates and a total population of about 2,500 students that includes graduate and seminary students.

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Trade

Real Estate

Accelerator seeks to grow Michigan- Israel investment By Dustin Walsh dwalsh@crain.com

A local business nonprofit is expanding to further Michigan’s reach into the growing tech sector in Israel. After several successful leadership missions since 2015, the Michigan Israel Business Bridge is seeking public and private financing to become the Michigan Israel Business Accelerator to spur more investment between the two nations in manufacturing, mobility, defense and life sciences, among other sectors. The rebranded organization will begin operation on Dec. 1, with plans to add staff and open an office in downtown Detroit in the first quarter of next year, said Mark Davidoff, the Michigan managing partner for Deloitte and board member of the organization. “We’re aiming Mark Davidoff: to foster the enOpportunity to ergy from the scale up. hard work done by the MIBB in Need recent years and to know take it to another JJMichigan Israel level,” Davidoff Business Bridge said. “With the seeking financing current coordito become nation of tech Michigan Israel and industry alBusiness ready happenAccelerator ing, there apJJOrganization will pears to be a spur more great opportuniconnection ty to scale up our between Michigan bandwidth.” and Israel’s The organizagrowing tech tion will seek a sectors roughly $1 million operating JJIsrael has a hot budget, add staff innovation in Israel and deeconomy but few velop new proexport channels; grams to connect Michigan could be Israel’s startups a link with Michigan’s existing corporate infrastructure. Funding is expected to come from various sources, including the Michigan Economic Development Corp. However, the public funding details have yet to be determined, MEDC CEO Jeff Mason said. Michigan has several ties to Israel, including Southeast Michigan’s large Jewish population as well as investments through various organizations like Birmingham-based William Davidson Foundation, which is committed to the cultural and economic vitality of the Middle East nation. SEE ISRAEL, PAGE 19

LARRY PEPLIN FOR CRAIN’S

Diane Batayeh is the new chief executive of Southfield-based Village Green Cos., one of the largest owners/managers of multifamily apartment complexes in the country.

Village Green CEO has her eye on growth By Kirk Pinho kpinho@crain.com

Diane Batayeh remembers the phone interview nearly 40 years ago. “It was 20 minutes,” said Batayeh of the time she answered a newspaper ad while attending the University of Michigan, with the goal of going to the University of California-Davis for law school. The daughter of a longtime Ford Motor Co. worker with what she described as an “underprivileged background,” Batayeh responded to the ad thinking it would be just a temporary gig to help get her through school in Ann Arbor. She never made it to law school.

Need to know

Batayeh is the new chief executive of Southfield-based Village Green Cos. J

J She’s a commercial real estate rarity: The female CEO of a large company J

Now she aims to grow Village Green

Instead, that job as an apartment leasing agent was her stepping stone to becoming a commercial real estate rarity: The female CEO of a large company. Batayeh is the new chief executive of Southfield-based Village Green Cos., one of the largest owners/managers of apartment complexes in the country, where she has spent her entire

professional career. When she first started as a leasing agent in Ann Arbor, she recalled meetings in which she was the only woman in the room. Although times have changed since 1980, the commercial real estate industry is still overwhelmingly dominated by men. “Part of the legacy model of the real estate industry in general is older, white males,” she said. “I’ve seen that as I came up in the business. But 37 years later, looking back, we’ve come a long way.” According to a 2013 report from the Commercial Real Estate Development Association, a national organization that has more than 18,000

members, fewer than one in seven senior executives in the industry are women. In her nearly four decades in the business, Batayeh, a Fenton resident who grew up in Detroit as one of seven siblings in a 1,200-square-foot home, has commanded the respect of her peers. “She is very well thought of in the industry,” said Matt Lester, founder and CEO of Bloomfield Township-based Princeton Enterprises LLC, which owns apartment complexes in 13 states, primarily Michigan. “She is widely respected and has a no-nonsense reputation.” SEE BATAYEH, PAGE 19

Nonprofits

Goodwill looks to buy companies for programs “Folks in our community who are making a low wage, a minimum wage, one way to tackle that is to give those folks a share of the business.”

By Sherri Welch swelch@crain.com

A prominent Detroit nonprofit is going into acquisition mode. In an effort to expand capacity for its workforce development programs, Goodwill Industries of Greater Detroit plans to hunt for businesses to add to its stable early in 2018. In some cases, the plan’s ultimate aim is to give the workers it trains a share of ownership in companies it acquires. It hopes to close its first deal by the end of next year, targeting healthy companies that align with the new areas of occupational training it plans to launch. It will also seek other companies with owners looking to retire and open

Dan Varner

to selling their company to Goodwill while it trains their employees to take over ownership. “Folks in our community who are making a low wage, a minimum wage, one way to tackle that is to give those folks a share of the business,” Goodwill CEO Dan Varner said. “There are plenty of opportunities for low-wage work-

MUST READS OF THE WEEK The going rate is going up

Steep competition?

Some seats may be empty, but Red Wings, Pistons tickets see increase on the resale market. Page 4

Detroit’s facing challenges from other cities in its bid for a Major League Soccer expansion team. Page 6

ers to actually earn a share of the profit as well as their wage and to have an asset on their personal balance sheet that they can take loans against to buy a house or buy a car.” With assets totaling about $22 million at the end of last year, Goodwill is in a strong financial and operational position, so it has an opportunity to in-

Need to know

JJGoodwill to look for companies to buy in the new year JJThe acquisitions will give it new training grounds as it develops new programs JJThe moves are part of a larger strategic plan aimed at reducing unemployment and supporting those in jobs

novate, he said. The nonprofit, whose board is led by retired JP Morgan Chase executive Jane Bowman, could finance some acquisitions itself or take on debt for the right opportunity, Varner said. It’s also a model that could be ripe for social investment. SEE GOODWILL, PAGE 20

A Crain’s celebration For the first time Crain’s honored Twenty in their 20s and Forty in their 40s at the same event. Page 5

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The average list prices of Detroit Pistons and Red Wings tickets on the resale market have increased by double-digits since the teams moved into new Little Caesars Arena this season.

Red Wings, Pistons tickets see increases on resale market By Bill Shea bshea@crain.com

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Despite images of unfilled seats making the news, the average list prices of Detroit Pistons and Red Wings tickets on the resale market have increased by double-digits since the teams moved into new Little Caesars Arena this season. The average ticket price for a Red Wings home game on the secondary market in 2017 has been $166, good for 10th-priciest among the 30 National Hockey League teams, according to data provided by New York City-based TicketIQ, which aggregates ticket resale prices via StubHub, TicketNetNeed w o r k , to know TicketsNow, J Red Wings, eBay and hunPistons games dreds of secondmeeting ticket ary-market broresale expectakers. tions The Red Wings last season averJ Pistons seeing aged $145 for greater secondary secondary tickmarket sales ets, meaning growth than Red they’re up 14 Wings percent this seaJ Resale market son over 2016prices are a 17. measure of team The Pistons, popularity who have especially come under scrutiny for vast swaths of empty seats at the 20,000-seat arena, rank 27th in the 30-team National Basketball Association with a $101 average secondary market ticket price, according to TicketIQ. They’re up 19 percent over last year’s $85 resale average. “The Pistons are definitely a result of the new arena and pricing moving up in general,” said Ralph Garcia, TicketIQ’s director of publisher relations, via email. Despite the action on the resale market, the story of the Pistons’ sparse home crowds at the glittering new arena now is drawing national attention from media such as The New York Times. Overall, the teams are doing as expected for fan-to-fan ticket sales.

Secondary market pricing 2013-18

These are the average resale ticket prices for the Detroit Red Wings and Pistons over the past five seasons as measured by New York City-based TicketIQ, which aggregates ticket resale prices across hundreds of sites: JJRed Wings 2013-2014: $82 JJRed Wings 2014-2015: $94 JJRed Wings 2015-2016: $86 JJRed Wings 2016-2017: $145 JJRed Wings 2017-2018: $166 JJPistons 2013-2014: $62 JJPistons 2014-2015: $67 JJPistons 2015-2016: $77 JJPistons 2016-2017: $85 JJPistons 2017-2018: $101

Source: TicketIQ

“Both teams are pacing accordingly. The Red Wings are typically in the middle of the pack, while the Pistons are usually towards the cheapest tickets in the league,” Garcia said. The price of tickets in online fanto-fan sales is one metric for a team’s genuine popularity, because it represents public interest after the initial face-value ticket sale by the team, often of season tickets that were sold before the season began. The secondary averages include regular tickets along with premium seating such as club seats and suites, which can serve to inflate the overall average. Resale ticket averages also are driven by the increase in the original face value of a ticket, and both the Red Wings and Pistons increased ticket prices to coincide with the new arena opening this fall. The Pistons average resale ticket price has increased 63 percent since 2013. The Red Wings have increased 102 percent in that same time. Both teams significantly lag be-

hind the teams atop their respective leagues in average resale ticket price, the NBA’s Golden State Warriors ($351) and the NHL’s Toronto Maple Leafs ($317). The Pistons, who’ve made the playoffs once in the past eight seasons, could see an uptick in crowd size and resale pricing if they continue their torrid winning pace. They’re 10-3, including 7-1 at home, headed into a three-game road trip. After eight home games, they’re averaging 16,276 fans at Little Caesars, which ranks 25th in NBA attendance. That’s up a bit from last year’s 15,979 per-game average, but the only sellout this season was the opener. LCA’s Pistons sellout threshold is 20,491. The Red Wings are an NHL attendance juggernaut, at least on paper, and have a sellout streak that dates to December 2010. They rank third in NHL attendance this season and their 19,515 fans per game average is their official sellout capacity. On the season, the Red Wings are 3-2-2 at LCA and 9-8-2 overall headed into home games Friday night and on Sunday. Like the Pistons, there are images of Red Wings games with lots of empty seats. Executives from both teams have cited fan interest in exploring the new arena, and its bevy of clubs, eateries, and shops luring fans away from the game, as reasons for the empty seats. Both teams play 41 regular-season home games. Their attendance data is tickets sold and distributed, not actual through-the-turnstiles attendance, which is why sellouts can have seas of empty seats. It’s unclear how much revenue either team may recapture from resold tickets. The NBA and NHL both have deals with Ticketmaster’s sports ticket exchange service, and sports teams often have individual relationships with secondary ticket market sites and apps such as StubHub and Flash Seats. Bill Shea: 313 (446-1626) Twitter: @Bill_Shea19

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PHOTOS BY AARON ECKELS FOR CRAINâ&#x20AC;&#x2122;S

2017 Forty Under 40. Back row, L-R: Brian Connors; Brandon Tucker; Emily Linn; Rebecca Oâ&#x20AC;&#x2122;Reilly; Syed Ahmed Hussain; Libby Palackdharry; Yolanda Williams; Rick Williams; Philipp Schramm; Chris Lambert; Jacob Bishop; Neal Gram; Awenate Cobbina; Dannis Mitchell; Eric Morris; Marc Nassif; Peter Van Dyke; Mariam Bazzi; John Paul Rea; Juliana Bernalostos-Boy; Quinn Kiriluk; Asha Shajahan; Harmony Faust; Kimberly Hoyle; Rachel Lutz. Seated, L-R: Clarinda Harrison; Angela Rogensues; Adam Bishop; Nicole Farmer; Jeena Patel.

Crainâ&#x20AC;&#x2122;s celebrates Twenty in their 20s and Forty Under 40 honorees

The program featured a discussion about bridging generational gaps in the workplace with moderator Amy Elliott Bragg (left), 20s honorees David Alade and Sara Mahmood, and 40s honorees Asha Shajahan, M.D. and Jocelyn Benson.

Forty under 40 honoree Mariam Bazzi (left), judge of the 3rd Circuit Court chats with Tyrell Ross at the Twenty in their 20s and Forty Under 40 event last week.

For the first time, Crainâ&#x20AC;&#x2122;s Detroit Business brought together the two groups for a joint celebration at the iconic Roostertail on Thursday. For the first time, Crainâ&#x20AC;&#x2122;s Detroit Business brought together our 2017 Twenty in their 20s and Forty Under 40 honorees for a joint celebration at the iconic Roostertail on Thursday. The event celebrated and recognized the remarkable achievements of these rising leaders. It also created an opportunity for our 20s and 40s honorees, and their peers and friends, to mingle with each other, learn from one another and start a conversation about bridging generational gaps in their workplaces and in the region to move metro Detroit forward. The event included awards ceremonies for the two groups as well as a panel discussion between two 20s honorees, David Alade, co-founder and managing partner, Century Partners; and Sara Mahmood, senior analyst, GTB; and two 40s honorees, Jocelyn Benson, CEO, Ross Initiative in Sports for Equality; and Asha Shajahan, M.D., medical director of community medicine, Beaumont-Grosse Pointe. The panelists talked about how they have promoted understanding between generations in their careers and communities and shared ideas for how we can all lead through the changes unfolding rapidly in our workplaces and in society. Nominations are open for our 2018 Twenty in their 20s awards and will open for Forty Under 40 later this month.

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As MLS expansion decision nears, Detroit faces challenges from other cities seeking teams Need to know

By Bill Shea bshea@crain.com

Detroit will learn the fate of its first shot at a Major League Soccer expansion team in the days before Christmas. The MLS Board of Governors meets Dec. 14 and a decision on two of the four expansion markets will be announced between Dec. 18-20, according to the league. There’s still no timeline for when the final two expansion cities will be announced. Twelve markets submitted expansion bids in January, and ESPN reported on Wednesday that Sacramento, Nashville and Cincinnati are the cities with the insider track for the first two expansion slots. They’ll begin play in 2020. Detroit isn’t much mentioned by soccer insiders these days as a likely contender for the December decision, especially after bid organizers Dan Gilbert and Tom Gores opted earlier this month to abandon plans to build a soccer-specific stadium at the unfinished downtown jail site and instead intend to use Ford Field. MLS prefers its new teams to play in soccer-specific stadiums of about 20,000 seats, although the expansion Atlanta United FC averaged a league-record 48,200 fans per game this season at 72,000-seat Mercedes-Benz Stadium. However, if Detroit isn’t awarded a team in December, the city could still be granted a team in the second round of expansion that’s expected to be announced sometime next year. MLS executives have said their criteria for expansion are the ownership, stadium plan, and the market’s financial capacity (i.e. corporate ability and willingness) to support a team. A market’s historic support for soccer also is a factor. Here’s a quick update on the leading competition for the first round of MLS expansion:

Sacramento Sacramento may be the most MLS-ready city, and its bid backs up its confidence with cash. Backers already have begun site preparation work for a privately-financed $245 million soccer stadium that would be home to the Sacramento Republic FC, the name of the city’s proposed expansion team. The effort is led by Sac Soccer & Entertainment Holdings President and CEO Kevin Nagle, who sold his Envision Pharmaceutical Services to Rite Aid Corp. for $2 billion in 2015. Also part of the ownership group are San Francisco 49ers majority owner Jed York and Hewlett Packard Enterprise Co. President and CEO Meg Whitman. The 19,621-seat stadium will sit on 14 acres of a former rail yard that also will include a large medical center and new homes. A wild card factor: California already is home to two MLS teams: the San Jose Earthquakes and, starting next season, the new Los Angeles FC. Does it want a third so soon?

Nashville Nashville’s chances got a boost when the 40-member Nashville Metro Council, the legislative body

JJFirst two cities will be unveiled in mid-December JJDetroit not among top markets mentioned by insiders JJLocal bid has 3 billionaires involved

This rendering shows Ford Field retrofitted as home of an proposed expansion Major League Soccer team. The 64,500-seat NFL stadium, home to the Detroit Lions since 2002, became the preferred home field option for the city’s MLS expansion bid.

for the city of Nashville and Davidson County, on Nov. 7 approved $225 million in public funding for a $275 million soccer-specific stadium on eight acres of the city’s fairgrounds, The Tennessean newspaper reported. Sales tax collected at the 27,500-seat stadium, a separate ticket tax, and $9 million annually from the team’s owners will retire the debt. The ownership group will pay $25 million in capital costs up front, atop the $225 million in public funds. Nashville’s effort is led by John Ingram, the local billionaire owner of Ingram Industries. He and other investors say they plan a further 10 acres’ worth of mixed-use development of housing, retail, restaurants, a hotel and office space adjacent to the stadium. Some of those junior partners in the bid include the Wilf family that owns the Minnesota Vikings. After Sacramento, Nashville is widely considered the most MLSready market. However, it’s only the 29th-largest media market. That may be offset by a strong corporate presence.

Cincinnati Questions have arisen about soccer-mad Cincinnati’s bid in recent days because of uncertainty about where a team would play — a soccer-specific venue or Paul Brown Stadium, home of the NFL’s Cincinnati Bengals. Questions also remain about stadium financing: The ownership group on Nov. 15 pledged to privately finance a $200 million stadium on a former Milacron plant site, but wants $75 million from the city and Hamilton County for infrastructure work. No public subsidy has yet been approved for the proposed 21,000-seat pitch. County officials have said they prefer an MLS team use the open-air, 65,515-seat

NFL stadium. The proposed Cincinnati team already has a corporate jersey sponsorship deal that would pay it $5 million annually. The city’s effort is led by the billionaire Linder family whose fortune stems from insurance and a dairy store chain. They own minor league FC Cincinnati that averaged more than 21,000 fans a game last season — MLS’ 22 clubs averaged a combined 22,106 per game this year. That attendance makes the Queen City a strong contender, if it can get its stadium finalized.

Phoenix Perhaps the most unusual bid quickly emerged as a strong contender. The Phoenix Rising FC minor league soccer club is seeking to become an MLS expansion team in a bid led by Turkish-born Berke Bakay, the CEO and president of the Kona Grill chain since 2012. His BBS Capital Fund is the restaurant’s largest shareholder. Bakay bought Phoenix Rising FC two years ago, and the team averaged more than 6,000 a game in 2017. Bakay has a deal to privately finance and build a 45-acre MLS soccer stadium and complex with the Salt River Pima–Maricopa Indian Community on tribal land not far from Arizona State University, Sports Illustrated reported. Goldman Sachs has been hired to structure the stadium financing. The 23,000-seat venue would be climate controlled in the dry desert heat. The ownership group includes iconic international soccer star Didier Drogba along with music industry personalities Diplo and Pete Wentz, and L.A. Dodgers pitcher Brandon McCarthy. After Tampa/St. Petersburg (which also is seeking an team to replace the MLS club that folded in

PS&E

2002), Phoenix is the largest U.S. media market without an MLS team. However, there are questions about the availability of corporate advertising dollars in the market.

Detroit Detroit’s bid does include several helpful factors: MLS has acknowledged that it isn’t profitable, and Detroit’s chances could get a nod because not one but three billionaires are behind it — Gilbert, Gores, and now Martha Firestone Ford, who is involved because of the switch in stadium sites from a proposed pitch at the unfinished Wayne County jail downtown to Ford Field. No other bid has three veteran major league sports owners behind it. When that group unveiled the decision to switch to the NFL stadium on Nov. 2, MLS issued a statement saying it hadn’t had a chance to review the revised bid, but it doubled down on its preference for soccer-specific stadiums. “MLS continues to prioritize soccer-specific stadiums as a criteria for the selection of MLS expansion markets,” the league’s statement read. When asked if the league has expressed any opinion on the stadium plan changes, a spokesman for the Detroit bid emailed a generic statement. “We have been in regular communication with MLS officials and they have not made any decisions regarding expansion yet. We expect talks to continue throughout the upcoming weeks,” it read. The Gores-Gilbert bid pointed to the attendance success of Atlanta United FC in an NFL stadium, but that venue, home to the Atlanta Falcons owned by Atlanta United FC owner Arthur Blank, has a retractable roof. Ford Field does not.

Gilbert and Gores unveiled a $1 billion plan in April 2016 to build a 22,000- to 25,000-seat soccer-specific stadium on the stalled county jail site, and the project would include towers for residential, retail and office use. Gilbert still wants the site for commercial development, but the soccer effort is now focused on Ford Field. The entire Detroit bid has been predicated on the expansion team being able to play in 2020. Using Ford Field, which would need some level of retrofitting to accommodate a soccer team, makes that timing goal feasible. The teams awarded in January are intended to play in 2020. “Our hope is to be prepared so that when MLS makes its decision, we’re one of the finalists,” Arn Tellem, who’s handling the MLS bid for Tom Gores, told Crain’s in September. Detroit appears to meet the league’s criteria for soccer support. MLS has told Crain’s that it has monitored the success of high-profile soccer events in the Detroit market, including the International Champions Cup match that drew 36,000 fans in July at Comerica Park, crowds of more than 100,000 at Michigan Stadium for past ICC matches and the crowds of 5,000-plus for semipro Detroit City FC in Hamtramck. Detroit certainly has the corporate presence to support a fifth major league sports team, being home to the automakers and suppliers, Quicken Loans, and larger medical, manufacturing, energy and education systems. The other cities with formal expansion bids, which had to be submitted by Jan. 31, are St. Louis; Tampa Bay/St. Petersburg, Fla.; San Antonio; Raleigh, N.C.; Charlotte, N.C.; Indianapolis; Phoenix, Ariz.; and San Diego. Ultimately, MLS plans to have 28 teams. Los Angeles FC begins play next year as the 23rd club and the unnamed Miami team launches for the 2019 season. The expansion teams awarded in December will pay $150 million each to join the league. A fee for the final two clubs hasn’t been formally announced. New MLS owners aren’t buying franchises. Instead, MLS is a single-entity business, meaning all teams are owned by the league and all players are its employees rather than employed by the club. MLS pays the players. Team “owners” pay an investment fee to MLS for the right to operate a team in a geographic area. They become league shareholders rather than franchise owners in a league that has publicly acknowledged it remains unprofitable. Teams keep their own books and budgets. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

THE

OUNTDOWN

ON crainsdetroit.com/countdown

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OPINION

COMMENTARY

Other than a parade, what makes Tony Michaels smile?

didn’t know a parade could be good for business. Or that a parade company could be a good business. Until I met Tony Michaels. In 2009, the Detroit businessman became the president and CEO of The Parade Company, breathing new entrepreneurism and enthusiasm into a brand that had become as creaky as its warehouse headquarters. A few days before the nonprofit’s signature event, America’s Thanksgiving Parade presented by Art Van, Michaels invited me to lunch at the warehouse in an out-of-theway industrial east side neighborhood. Once there, I walked past 130foot floats and ginormous celebrity heads, beneath a leaky roof and around water puddles, to his small office, where two boxed lunches and two bottles of water sat on his rough, wooden desk. Michaels greeted me with a smile. “We are getting slammed,” he said. “I’ve never had to say no to so many people in my life.” The Parade Company’s annual pre-Thanksgiving carnival fundraiser, Hob Nobble Gobble, had sold out, and Michaels said he needed to turn people away. That made him smile. Michaels smiles when he talks about the parade. He smiles when he talks about Hob Nobble Gobble. He smiles when he talks about the Turkey Trot. He smiles when he talks about the Ford Fireworks. He smiles when he talks about his sponsors, especially Art Van (the parade), Ford Motor Co. (Hob Nobble Gobble and the fireworks), and Strategic Staffing Solutions (Turkey Trot). He smiles when he talks about his board and its chairman, Blue Cross Blue Shield CEO Dan Loepp. Dude probably smiles in his sleep. I couldn’t dim the joy in Michaels’ face, not even when I challenged the business imperative of his parade: For all the nostalgia and fuzzy sentiments, does the Thanksgiving tradition help the Detroit business community? “Absolutely,” he smiled. Michaels took a bite from his turkey sandwich and motioned to a wall

RON FOURNIER Publisher and Editor

“How can you have a successful city without great things? You look at any great city and they have great events to lure people to the city. This is a great event.” Tony Michaels

strewn with sketches of floats, each more colorful and complicated than years past. “Look, the business community is beyond interested in creating a vibrant, successful Detroit. The parade is a specific answer to bringing people together in a way that nothing else does.” The parade is more than a threemile path for clowns and corporate-sponsored floats. It’s a cultural event that binds people to common experience, that “brings the heart and soul together,” Michaels said. “How can you have a successful city without great things? You look at any great city and they have great events to lure people to the city. This is a great event.” It’s also a successful nonprofit business. When he took over eight years ago, Michaels challenged his team to raise its ambitions. “Take every aspect of this event,” he remembers telling them, “and make it bigger.” Floats grew larger — from 40 feet to 90 feet to 130 feet and more. Sponsorship deals grew longer — from one to three years. Michaels courted and catered to corporate sponsors. “We are lunatic about sponsor fulfillment,” Mi-

RON FOURNIER/CRAIN’S DETROIT BUSINESS

In 2009, Tony Michaels became the president and CEO of The Parade Company, breathing new entrepreneurism and enthusiasm into the nonprofit.

chaels said. Year after year, sponsors got more media attention, more creative signage, and more white-glove treatment from Michaels and his team. The results are impressive. The Parade Company now has more than $4 million in annual sponsorships.

Its gross revenue is $7.3 million, up from $3.66 million eight years ago. Hob Nobble Gobble has grown from 1,400 paid participants to 2,000. The Ford Fireworks display lasts longer than ever and its fund-raising party has grown from 1,300

participants to 2,000. In addition, Michaels has built a substantial rainy-day fund to make sure The Parade Company can weather the next economic downturn. None of this is to say The Parade Company doesn’t need your support — your attendance at the fund-raising events and donations from your company. “We can’t get that corporate support without getting bigger and better across the board,” Michaels said. “So we’ll keep getting bigger and better.” I asked Michaels how that happens; how he inspires his team to constantly reach for a higher bar. He said the most important attributes to leading any organization are consistency and passion — and he demonstrates both by asking his team to approach every major decision as if kicking a field goal. In his mind’s eye, everything between the goal posts is greatness. Anything outside the goal posts is mediocre or worse. If what you’re doing is not in the line of greatness, Michaels tells his team, it’s probably not worth doing. I wanted to know whether this allegory had actually seeped into his culture, so I asked Michaels to call Jessica Kaminskas into his office. A former intern at The Parade Company, she is now the chief operating officer. I asked her, “What’s the question you ask yourself before pursuing a new idea?” “Is it in the line of greatness?” she replied. What if it’s not? “We figure out how to make it great.” What if you can’t? “We don’t do it,” Kaminskas replied. I thanked her and told her she had passed my little test. We chatted about her rise through the company and her dreams for a bigger and better parade — 91 more years or so of greatness. Michaels smiled. Ron Fournier is publisher and editor of Crain’s Detroit Business. Catch his take on business at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760.

And it is not even Thanksgiving

he economy of Detroit is getting better by the minute. If you listen, you can hear the hammering. It is not even Thanksgiving, and they have started to build all the exhibits for next year’s North American International Auto Show at Cobo Center. There is probably nothing that adds to our economy year in and year out more than this international motor show. The benefits go on and on: We Detroiters get to attend a truly world-

KEITH CRAIN Editor-in-chief

class show, the likes of which is not seen anywhere else on this conti-

nent. Thousands of journalists come to town and enjoy the hospitality of the car companies, and they will be looking for stories about all the new cars, trucks and SUVs, not to mention all the electric vehicles. There may even be some sneak peeks at the autonomous vehicles that will be part of our not-too-distant future. (Whether we will want them or not is another story.). With all that and the adjoining hoopla, it’s like having a Super Bowl

every year. And like the Super Bowl, preparation for the auto show is a year-round effort — the construction of the glitzy displays is just the final stage of the planning. The auto show’s impact makes the best case possible for promoting our city to as many major conventions and shows as possible. That kind of investment, like the millions of dollars poured into Cobo expansions and renovations over the years, pays huge dividends. Sure, big events help fill up hotels

and restaurants. But we are also employing hundreds of workers who build these displays. Someone has to drive the trucks and unload the supplies to make it all work. And the taxis, limos, buses and now the QLine have to help all the attendees get around. Other cities would love to have our international auto show. But we have had it for the last three decades, and it belongs in the Motor Capitol of the World. Let’s make sure it stays here forever.

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Failing infrastructure Increasing competition in Michigan’s health care must be team effort buried no longer T I t took driving on potholed roads for years to awaken Michigan residents to the need for infrastructure investment that was visible to the eye. The same message about infrastructure we can’t see has gone unheeded for years, despite Flint and Fraser. Perhaps with the latest failure in Farmington Hills, the message will get through about water mains, pipes and valves that have been quietly aging and deteriorating. Several years ago, American Water Works Association launched a campaign called “Buried No Longer,” to emphasize the urgent need for reinvestment in outdated community water systems, many of which have outlived their lifespan of 50 to 100 years. Like roads and bridges, water systems need regular maintenance, upgrades and, sometimes, rebuilds in order to keep them in good working condition. As local municipalities struggle to fund so many pressing needs, the ones that are buried may be easiest to set aside for another year. Forgoing infrastructure maintenance in favor of more politically popular budget items is a dangerous practice that is bound to eventually have consequences. With more than a thousand water systems across Michigan, the same scenario plays out over and over in communities large and small. Water professionals inform public officials that upgrades are needed. Public officials shy away from unpopular rate hikes that could cost them in the next election. Without adequate budgets to replace and repair breaking and corroding systems, water professionals cross their fingers and hope for the best. In every water system, the challenge is the same — ensure that the rates water customers pay are adequate to cover the cost of annual operation, maintenance and repairs as well as necessary long-term capital replacement. In communities where populations are declining or where people responsibly conserve water, there is less revenue for utilities to sustain systems. Rates that don’t keep up with maintenance and capital replacement costs can’t keep a water system functioning and providing safe drinking water. Essentially, without investing in our aging water infrastructure, Michigan water customers will not be able to rely on the service level they have come to expect. Service outages such as those in Farmington Hills recently will become increasingly common. Utilities need to adjust their investment strategies. Public officials need to understand and support the need for appropriate rate hikes. Customers need to expect to pay more to have drinking water delivered to their taps 24 hours a day, seven days a week. Michigan residents currently pay less than $1 a day to have water delivered to their homes, schools and businesses. Failing more appropriate investment — and we estimate we are currently falling short about $1 billion a year in Michigan for water and sewer systems — we can all expect to experience more undrinkable water days, more untreated sewage flowing into Michigan waterways and more head-

OTHER VOICES Brian Steglitz

Forgoing infrastructure maintenance in favor of more politically popular budget items is a dangerous practice that is bound to eventually have consequences. lines about water system failures. Flint, Fraser and now Farmington Hills — our failing infrastructure is buried no longer. Brian Steglitz chairs the Communication Council of the Michigan Section of American Water Works Association, an association of nearly 1,700 water professionals in Michigan.

he American Medical Association released its annual review of health insurance competition and, again, Michigan ranks among the 10 least-competitive states in the nation for health insurance. The HHI Index, utilized by the Department of Justice to review mergers for prevention of monopolies, ranks any state with a score above 2500 as “uncompetitive.” Michigan’s score was 4562 this year. The HHI Index is a calculation that measures percentage of market share. Our dominant carrier in Michigan maintains a 66 percent overall market share and a 78 percent market share in the PPO market, which is most utilized by employers, even after state regulatory, tax, and structural changes intended to improve competition. Michigan historically has thrived on competition. Competition in Michigan has helped our auto industry become more efficient and innovative. In recent years, Michigan has made policy changes to encourage competition in the trucking, natural gas and telecommunications industries, benefiting consumers. The statewide focus on competition needs to reach our health insurance area. What do we do when such dominance exists by one carrier in a market that needs competition to innovate in uncertain times? It is

OTHER VOICES Dominick Pallone

time to shop and shop smart. Michigan’s Health Insurance Exchange opened on Nov. 1 and closes Dec. 15. There are nine health plans participating on the exchange to deliver high-quality, affordable health care. Shop them all with an eye on customer satisfaction and quality. The National Council for Quality Assurance delivers neutral health plan rankings to help. As an employer or employee, ask your agent partner to bid out and shop your benefits. See the innovative approaches and network strengths of all plans in the state. Bring plan representatives in and listen closely to how they may best serve your employees. A few minutes of your time could mean lower costs or a better fit for your needs — or both. In a state that historically thrives on competition, consumers’ and employers’ focus needs to shift to the health insurance market. The “easy button” solution is to select

In a state that historically thrives on competition, consumers’ and employers’ focus needs to shift to the health insurance market. The “easy button” solution is to select the same PPO over and over. We ask you hit the “smart button” and shop value.

the same PPO over and over. We ask you hit the “smart button” and shop value. Without your help, we cannot fix the health insurance quagmire in this state. Choices exist. Partner with your broker to shop for high quality, affordable health care that meets your needs this, and every, year and help make our market competitive. As Michiganders who compete worldwide in markets, increasing competition in health care must be a team effort from the consumer, agent, and employer. Dominick Pallone is executive director of the Michigan Association of Health Plans.

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FOCUS

SPECIAL REPORT: HEALTH CARE

What do nurses want? Nurses ask hospitals to hire more, restrict mandatory overtime; hospitals cite nursing shortage

GETTY IMAGES/ISTOCKPHOTO

By Jay Greene jgreene@crain.com

Michigan has had more than its share of labor disputes between hospitals and nurses. A high-profile walkout among nurses in Marquette, a public dispute at Huron Valley-Sinai Hospital in Commerce Township, and the formation of unions at two hospitals in 18 months are just part of the story. The conflicts have several causes, and are critical in an industry that’s being graded on dollars and cents but also on quality — and one where lives are at stake. Higher pay isn’t at the top of the list of what nurses want, although that wish is in their top five. What they most ask hospitals for is a safer workplace, for themselves and their patients, where nursing shifts are limited to 12 hours or less, patients can count on sufficient numbers of nurses per shift and hospitals don’t regularly rely on nurses to perform housekeeping or patient transportation duties in addition to patient care. Crain’s interviewed nurses at seven hospitals, most of whom are in unions and involved in contract negotiations. Three hospital nursing executives also were interviewed. Scott Balko, an operating room nurse at UP Health System-Marquette, said the No. 1 issue for nurses at the 300-bed hospital is mandatory overtime driven by poor working conditions because of understaffing that he said discourages

Need to know

JJNurses are asking hospitals to hire

more nurses, restrict mandatory overtime and improve overall working conditions JJHospital executives say the nursing shortage and aging workforce prevents them from hiring sufficient nurses JJNurses say hospitals are short-sighted because lack of nurses at the bedside drives medical errors and higher costs

nurses from applying for jobs and causes unnecessary turnover. “We don’t have the number of nurses to do the job. They are working longer shifts and putting patients in unsafe conditions,” Balko said. “There are no regulations on hours for nurses like there are for truck drivers.” Stephanie DePetro, an emergency room nurse also at UP Health, the former Marquette General Hospital, said nurses want specific nurse-patient ratios for each department. “There are work standards for many professions, but there is no law for how many patients we are asked to care for,” she said. Last month, 400 nurses went on a two-day strike in Marquette to protest working conditions and lack of solutions from management over a union contract under negotiation for five months. UP Health is a for-profit hospital purchased in 2012 by Nashville-based Duke LifePoint. Tom Casperson, R-Escanaba, said he believes nurses when they tell

LARRY PEPLIN FOR CRAIN’S

Judy Moore and Kathleen Lehman are nurses at DMC Huron Valley-Sinai Hospital in Commerce Township.

him how they are often left no choice but to work overtime when hospitals fail to properly staff shifts. He said hospitals tell him the nursing shortage prevents them from hiring more nurses, a contention nurses dispute. The U.S. Bureau of Labor Statistics reports more than 100,000 registered nurse jobs will be available annually until 2022. But nurses such as Judy Moore, an intensive-care and step-down unit nurse also at DMC Huron Valley-Sinai Hospital in Commerce Charter Township, question whether nurse staffing problems are caused by a

nursing shortage or simply because nurses don’t want to work at hospitals when they have few rights. A growing number of nurses have retired, changed occupations or become administrators in recent years, experts say. “(Hospitals) tell us they can’t hire more staff because of a nursing shortage,” Moore said. “There is not a nursing shortage. There are plenty going into colleges now. (Hospitals) are just not hiring.” In March 2016, Huron Valley Sinai nurses voted in a union that is affiliated with the Michigan Nurses Asso-

ciation. But after 16 months of negotiations, the nurses are still without a contract. Earlier this month, the Huron Valley nurses union released a scathing 38-page report that documented 240 incidents of poor patient care they say were directly related to insufficient numbers of nurses per unit. They asked for an investigation by the state Department of Licensing and Regulatory Affairs. They also filed a lawsuit in Oakland County Circuit Court over alleged public health code violations. Moore said DMC has frozen nurse hiring, which has resulted in fewer floor nurses because turnover continues at high rates. Shawn Levitt, DMC’s chief nursing officer, declined to address difficult contract issues. “We don’t negotiate contracts in the media,” she said. Lori Stallings, Huron Valley chief nursing officer, said hospital management is making good progress in the talks, but wasn’t sure when a contract might be signed. Casperson, who joined to support hundreds of nurses from all over Michigan in Marquette for the strike, is one of six legislators who are co-sponsoring the Safe Patient Care Act that is part of a three-bill, bi-partisan package (See story, Page 11). “I am supporting the nurses because when nurses work to exhaustion, it is a patient safety issue,” Casperson said. SEE NURSES, PAGE 12

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SPECIAL REPORT: HEALTH CARE

Safe nursing staffing bills face uphill battle to get hearing By Jay Greene jgreene@crain.com

For the third consecutive year, a bipartisan legislative package on nurse staffing has been introduced in the Michigan Legislature that would improve patient safety and quality, save lives, and could potentially help ease the nursing shortage at hospitals, according to its sponsors. The Michigan Health and Hospital Association hasn’t taken an official position for or against the bills this year but has told individual legislators that they are unnecessary, lawmakers say. MHA officials declined interview requests with Crain’s. State Sen. Mike Shirkey, R-Clarklake, who is chair of the Senate health policy committee, told Crain’s he will not hold a hearing on the bills. House health policy chair Hank Vaupel, R-Handy Township, also said the safe staffing bill package hasn’t been scheduled for a hearing, and it is unlikely it will be with few committee days left. The so-called “safe staffing” bill package has three parts: it limits the number of patients who can be assigned to nurses based on individual clinical departments and severity of patients’ illnesses; restricts the use of mandatory overtime; and requires basic transparency, mandating that hospitals disclose on their websites department nurse-patient ratios to the public. In early 2016, the MHA opposed a similar bipartisan bill during a house regulatory reform committee hearing held by Rep. Ray Franz, R-Onekama, when he was committee chair. However, there have been no hearings yet this year in the Michigan House or Senate on the proposed Safe Patient Care Act. With nine days remaining in the session, time is running out. Shirkey, who has served many years on a hospital board of trustees, said he is opposed to the nursing bill. “Hospitals and other providers are keenly sensitive to quality and safety,” Shirkey said. “With growing competition in this field, coupled with much demanded increases in transparency by patients and payers, it’s simply not necessary for government to get this deep into operations.” Crain’s interviewed nursing executives at three hospitals and they all expressed concerns and oppositions to the bills. One nursing executive at the University of Michigan, however, said the nurse-patient staffing ratio transparency bill is a good idea. While the MHA refused to do an interview with Crain’s on the bills, Rebekah Warren, D-Ann Arbor, said talks she has had with MHA representatives make it clear to her that hospitals are opposed to the nursing bills. “They tell me they already do this at hospital level,” Warren said. “They set internal goals about safe nurse staffing. They also talk about costs associated with hiring more nurses and putting more on shifts when volumes are down.” Sen. Tom Casperson, R-Escanaba, said he understands the nurses’

Mike Shirkey: Opposes nursing bill.

Tom Casperson: Co-sponsor of the nursing bill.

Need to know

JJBi-partisan, three-bill legislative

package on safe nursing staffing introduced in Michigan Legislature

JJSenate and House health policy leaders say no hearings will be held JJSupporters say research shows quality and patient safety improved and costs reduced with sufficient nurse staffing

concerns because he knows how working long hours can affect job quality and sometimes can be dangerous. His family owns Casperson & Son Trucking, a log trucking business, a company in which he was owner and operator for 12 years. “My background in trucking for 27 years with the industry becoming more regulated got me thinking if regulations like limiting hours of service can make trucking safer, it can make hospitals safer by limiting hours nurses have to work,” said Casperson.

Casperson and Warren are co-sponsors of the bills and spoke with Crain’s about why they support the bills. The other four co-sponsors include Reps. Aaron Miller, R-Sturgis; Joe Hune, R-Fowlerville; Jon Hoadley, D-Kalamazoo; and Stephanie Chang, D-Detroit. “I listened to nurses and how often they are asked to work is quite alarming,” Casperson said. “They never once made an argument they aren’t paid enough. It is always hours of service. They came across as sincere. Something is wrong here.” Warren said her background and understanding of nurses led her to a greater understanding and support of the bills. “I come from a family of nurses, my mother and sister are nurses and the concerns of nurses are not new to me,” said Warren. “We have a shortage of nurses, and I believe one reason is the working conditions at hospitals. States like California shows us the quality of life for nurses goes up so much when we make sure we are not doing mandatory overtime. There is not as much turnover; nurses are not burned out.” Warren said when nurses are not tired and they have time to spend with patients, “there are fewer medical errors, less secondary infections, time to treat and prevent bedsores.”

executive SPEAKER SERIES

In the Capitol Several active bills in Michigan’s Legislature would address nurse staffing at hospitals: Senate Bill 387/House Bill 4629 — Creates mandated nurse staffing ratios based on each department and the acuity, or sickness level, of patients under care. SB 388/HB 4630 — Allows nurse to refuse to work more than a 12-hour shift without threat of termination or job action. Exempts such situations as unforeseen emergencies like a mass shooting or casualty incident. SB 389/HB 4631 — Mandates hospitals to publicly disclose nurse-to-patient ratios. Source: Michigan Legislature

A 2015 report by the MHA said that in 2014 there were at least 52,000 incidents, unsafe conditions, or near-misses at hospitals, or 1,000 per day. The MHA said the documented numbers were due to an increase in electronic reporting and improved safety culture. Adverse events can mean anything, ranging from missed medication to injurious falls to preventable fatal infections.

“Hospitals are saying themselves they know it is an issue,” Warren said. “I believe they want to do everything they can to promote safe care.” But Warren said nurses tell her that hospitals are paying lip service to safe staffing, and some hospitals are not serious about putting financial resources into nursing. In a survey last year, 20 percent of nurses in Michigan said they were aware of an incident in which understaffing caused the death of a patient, said the report by Anderson Robinson Research, which was commissioned by the Michigan Nurses Association. The survey also found that 86 percent of nurses said patient care is suffering because they are assigned too many patients, 45 percent said patients had longer lengths of stay, 49 percent said harm was caused, 53 percent said patients were readmitted and 57 percent said infections and complications resulted from understaffing. Numerous reports conclude that medical errors in hospitals cause unnecessary patient deaths. For example, a 2013 study in the Journal of Patient Safety said each year in the U.S. some 400,000 patients die because of medical errors. Michigan state health agencies don’t track medical errors. SEE BILLS, PAGE 12

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SPECIAL REPORT: HEALTH CARE are more likely to offer more flexible NURSES Nurse staffing hours, lower caseloads and pay for FROM PAGE 10

Nurse strikes rare in Michigan A nursing strike is an extreme event that doesn’t happen often in Michigan. But nurses say it illustrates the growing rift between nurses and management over key issues that involve patient and nurse safety, staffing, pay and respect. Two top hospital executives told Crain’s they believed staffing and patient care issues are exaggerated by nurses and what they really want is higher pay. But nurses pushed back and said that may have been true in the past, but now the primary issue is too few nurses per shift and mandatory overtime that pushes many nurses to work 16-hour days. Crain’s research has found six strikes since 1979 at hospitals in Michigan, a 1994 strike at Marquette General, the one this year and two at the University of Michigan Hospital in the 1980s. The longest strike and dispute went on for nearly three years starting in November 2002 at the former Northern Michigan Hospital in Petoskey, now McLaren Northern Michigan. In 1979, nurses at St. Francis Hospital in Escanaba struck for 120 days before it was settled with help from a federal mediator. Nurses nearly struck four times since 2000 at Genesys Regional Medical Center in Grand Blanc Township before settling on contracts. In the past 18 months, nurses have formed unions at Huron Valley-Sinai and Munson Medical Center in Traverse City.

Share same goal Nurses interviewed by Crain’s said they believe more hospitals in Michigan are voting for unions or considering ones to help argue their case for better patient care to management. Nursing councils or committees are not strong enough voices, they say. Hospitals have waged intense bidding wars to fill nursing vacancies. They have offered nurses huge signing bonuses and even sport-utility vehicles and vacations to the Bahamas. However, those efforts often only served to exacerbate turnover, spurring nurses to remain in jobs just long enough to claim the prizes before moving to other hospitals with better incentives, several nurses told Crain’s. At the same time, hospitals also have engaged in various methods to hold down nursing salaries. In settlements from 2009 to 2015, eight health systems in metro Detroit paid about $90 million to settle a class action

BILLS FROM PAGE 11

Michigan hospitals have an up and down record of patient safety, according to The Leapfrog Group. For example, Michigan ranked 21st nationally for percentage of hospitals with “A” patient safety grades in 2015, but dropped to 36th in 2017. Michigan has 19 hospitals with A grades in 2017, compared with 29 in 2016. But Warren said people are admitted to hospitals every day and they

Research on safe staffing over the past decade shows the following: Each additional patient per nurse on medical-surgical units was associated with a 5 percent lower likelihood of surviving an in-hospital cardiac arrest (Medical Care, 2016).

The risk of death in the intensive care unit was increased by a factor of 3.5 when the patient-to-nurse ratio was greater than 2.5 to 1 (Critical Care Medicine, 2015). Higher numbers of nurses per bed are associated with better survival rates among patients in intensive care, and the benefits are greatest among the very seriously ill. A study determined that seven additional lives would be saved for every 100 patients if nurse numbers increased from four to six per bed (Nursing Standard, 2014). An increase in a nurse’s workload by one surgical patient increased the likelihood of an inpatient dying within 30 days of admission by 7 percent. The difference between death rates in hospitals with lighter nurse workloads can be up to 30 percent (The Lancet, 2014). Cutting nurse to patient ratios to 1-to-4 nationally could save as many as 72,000 lives annually (Medical Care, 2005).

lawsuit over nurse wages that spanned 2002 to 2006 and involved more than 20,000 nurses, Crain’s reported in a story in September 2015. Some systems that settled included Detroit Medical Center, Beaumont Health, Henry Ford Health System, Trinity Health and St. John Providence Health System. On the flip side, many hospitals have taken steps to improve relations with nurses. Some have been certified as “magnet” hospitals from the American Nurses Association and the Institute of Healthcare Improvement. So far, more than 300 hospitals nationwide, including Beaumont Health, the University of Michigan and 12 other hospitals in Michigan, have been credentialed as magnet hospitals. A 2013 study by the University of Pennsylvania found that magnet hospitals have 14 percent lower mortality risk and 12 percent lower failure to rescue rates. Magnet hospitals

advanced training and give nurses more authority. Nurses tell Crain’s they want to be fairly paid, but they really want better working conditions that would allow them to offer better patient care, said John Armelagos, president of the MNA and nurse for 30 years at the University of Michigan Hospitals. Armelagos said nurses are at the front lines in patient care and act as advocates for patients and their families. “We need to ensure there are enough nurses to take care of patients on every unit and every shift so we can respond and monitor our patients,” said Armelagos, who works in inpatient psychiatric adult and adolescent units. “When there are not enough nurses to take care of patients, peer review research shows that patients suffer, outcomes are more negative and mortality increases per patient.” In the 1980s, Armelagos said UM nurses twice struck for safer staffing and higher wages. Since then, nurses and management have worked much more closely together to resolve differences, he said. Marge Calarco, chief nursing officer at the University of Michigan, said UM and its nurses agree that safe staffing enables nurses to care for patients in a cost-effective way that produces the best outcomes. But she said nurses also want to be treated with respect by management and valued for the service they provide to society. “Gallup (polls have shown consistently that) nursing is the most trusted by the population,” said Calarco, who has been a nurse more than 30 years, the last 15 years as UM’s chief nurse. “Every year except for 9-11 when firefighters were recognized, we are the most trusted profession. We are closest to families and patients, 24 hours, seven days per week. We provide exquisite care and are the heart of health care in many ways.” Calarco said more than 15 years of research shows that hospitals that have adequate nurse staffing have lower mortality and morbidity. UM works closely with its nursing union to ensure each department has sufficient number of nurses for each shift, she said. “Nurses want to practice in an environment where they are required to take care of sicker and sicker populations,” Calarco said. “Populations in hospitals today, 30 years ago would not have survived. Acuity is growing, and expertise is critical. If you don’t have safe staffing, you can’t do it.” But Calarco said she is not a proponent of mandated nurse-patient ratios because they don’t allow hospitals sufficient flexibility to take into account patient acuity levels that

“You take loved ones to a hospital to get quality care and you can’t get it because nurses are working too many hours.” Rebekah Warren

are many times put at risk because of low staffing and tired health care workers. “You take loved ones to a hospital to get quality care and you can’t get it because nurses are working too

many hours,” Warren said. “We are talking about medical errors that lead to decreased quality of health for people and loss of life. If I were at a hospital, I wouldn’t want to talk about it if my own policies are caus-

vary from day to day. “We at UM take staffing very seriously and do it very well,” said Calarco, adding that “there are many places in Michigan and across the county that do not to have the resources for safe staffing.” Calarco acknowledged that some hospitals look first to reduce costs by cutting nursing staff, which is the largest workforce at hospitals. She said she understands these hospitals set the stage for nurse unions to form and for calls for mandated nurse-patient ratios. “Some hospitals, faced with economic challenges, cut nurse staffing,” Calarco said. “We know, the data is clear, that once nurse staffing is cut to unsafe levels, you see decreases in patient outcomes and increases in mortality. I have always seen it is shortsighted, and I have advocated for strong staffing here.” Echoing what floor nurses tell Crain’s, Calarco said hospitals actually lower costs when they have safe staffing. “Hospitals don’t always understand that. (When hospitals have fewer nurses) they have more overtime, need more premium labor, more agency nurses, just to get the work done,” she said, adding that quality also diminishes when regular nurses aren't available. “It is a shortterm fix that isn’t good for the long run.”

Nurses’ main issues Cindy Rydahl, a surgical services nurse at Munson Medical Center in Traverse City, said nurses need a larger voice in decisions hospitals make on staffing and patient care. “We want safe staffing because the acuity of our patients is sicker than they used to be,” Rydahl said. “Our nurse patient ratios need to be improved. We are seeing more emergency patients and they need more care. Acuity is the biggest problem.” In August, Munson nurses approved a union for its 1,200 nurses through the Michigan Nurses Association. Negotiations are expected to start soon on a contract. “We want a voice. We want to be listened to and heard,” said Rydahl, who has been a nurse for 33 years. “We are at the bedside and know what patients need because we care for them and listen to the families.” She said the hospital and nurses have a shared governance committee, but nurses decided to form a union because the committee has been ineffective in resolving issues. Loraine Frank-Lightfoot, Munson’s vice president of patient care services and chief nursing officer, said Munson has been taking steps the past 16 months since she has been at the hospital to address staffing ratios in various departments. “I agree that the old shared gov-

ernance structure was not as effective as could have been. When I went to meetings, there were not a lot of front-line nurses there,” said Frank-Lightfoot, who has been a nurse for 32 years. “I am very participatory, and we now have 150 front-line staff involved with committees.” Frank-Lightfoot said she understands how difficult it is for nurses to work with insufficient staffing. She said many nurses have been hired in the past year and the vacancy rate has been cut to 3.3 percent, far below than the national average of 8.8 percent, she said. “There have been key areas that have been harder for us to recruit — OR, ER and critical care,” she said. “We lost a lot of (nurses who worked) in the OR, and it is a steep learning curve” for new nurses. But Frank-Lightfoot said she believes the major issue at Munson for the nurses is pay. “Mandatory overtime and safe staffing are not the real issues,” she said. “I believe the issues are around compensation. That is the key.” Frank-Lightfoot acknowledged that Munson fell behind market wages for nurses in the past. “We have put $18 million in staff wages, and we are catching up,” she said.

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ing that.” Despite what hospital administrators say, Casperson said nurses’ concern for patient safety is not an exaggeration. “I have lived it. When you put in those many hours, you are not at your best. They want to be on their ‘A’ game,” he said. “They are consistently asked to do this. They know after 16 hours, they are tired and have to go home and rest. If we can regulate other professions for safety, we can do this for patients.” Casperson said he knows as an

employer that companies are usually in the best position to set work hours. “There is a moral code you have to follow,” he said. “When forcing these kinds of conditions on these people, there is a respect level that is missing. Government can play a role here.” Moreover, when he talks with patients, they agree with him and nurses. “But I don’t believe they know what exactly is happening. They wouldn’t care for it if they went to a hospital and it was understaffed.” If the three-bill package is approved, John Armelagos, president of

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Nurses speak out Kathy Lehman, an emergency nurse at DMC Huron Valley-Sinai, said a reduction in nurses and support staff has been plaguing the for-profit hospital and many others across Michigan. “We have seen a reduction in staff in ancillary care, patient care technicians, sitters, environmental services and patient transporters,” said Lehman, a nurse for 17 years, the last 11 at Huron Valley. Moore said hospital consolidation and for-profit ownership has led to bigger lobbies but fewer caregivers at the bedside. A nonprofit hospital until 2011, Huron Valley-Sinai is part of DMC, which is owned by for-profit Tenet Healthcare Corp. of Dallas. Levitt said Huron Valley staffs nurses and others based on daily patient counts and industry standards. Stallings cited “A” grades since 2012 that Huron Valley has received from the Leapfrog Group for patient safety. Moore said Huron Valley nurses “have lost our voice at the hospital, as far as what we feel is best for the patient.” But Levitt said Huron Valley is also a magnet hospital certified by the American Nurses Association that has a shared governance model

where nursing practice issues are brought forward and worked out. Lehman confirmed that Huron Valley has a professional nurse council, but suggestions have been put on hold. “We are a magnet hospital and should be sitting in on decision-making, but it isn’t happening,” she said. Moore said nurses have committees for pharmacy, finances and quality. “But they have taken nurses’ voices away from hospitals and are making decisions based on profit,” she said, adding: “Patients were never at risk when we were nonprofit. Decisions aren’t local anymore. They are always made at the corporate level.” On the other hand, nurses like Moore and others interviewed by Crain’s insisted they would do their job and go beyond normal staffing to take care of patients. “I am here at Huron Valley because I love taking care of the community. No matter what is going on, the nurses work really hard so patients are not compromised,” Moore said. Tom Hall, a multi-department float nurse at McLaren Lapeer Hospital, said the MNA-sponsored union has been negotiating a new contract with the hospital since May. The Lapeer nurses signed their first union contract in the mid-1990s and have a

the MNA and nurse for 30 years at the University of Michigan, said patient care and outcomes will be improved. “Depending on the unit, research has borne out that one nurse cannot take care of more than four patients at one time. That is the safe limit. If those patients are very sick, it could be two to one,” Armelagos said. “Lives would be saved. There would be less urinary tract infections, less falls, and less recidivism with patients. Patient care outcomes improved.” In California and Massachusetts,

which have approved nurse staffing legislation, patient care has improved, experts say. California’s nurse-patient staffing ratio law was approved in 1999 and over time led to an additional halfhour of nursing per adjusted patient day beyond what would have been expected without the law. Hospital operating costs have risen somewhat, but nursing turnover has slowed and burnout reduced. Massachusetts became the second state in the nation in 2015 to limit the number of patients who can be as-

range of issues to iron out with the McLaren hospital, including sufficient number of employed nurses. Hall said Lapeer nurses want lower staffing ratios, which have been increasing the past five years as the Affordable Care Act has cut Medicare reimbursement rates. “How would you feel to be the sixth, seventh or eighth patient for a nurse working 16 hours?” said Hall. Sheila Kahn-Monroe, vice president of labor relations with McLaren, said the 12-hospital system allows local hospitals to set nurse staffing policies, although corporate policy is focused on ensuring safe staffing and that the nursing workforce has the right skill mix. Kahn-Monroe said the McLaren Lapeer contract talks are fairly typical and she expects a signed deal by the end of the year. “We are using a collaborative, interest-based approach and working through discussions,” she said. “Nurses want lower nursestaff ratios.” Kahn-Monroe said 10 of McLaren’s 12 hospitals have nursing unions. Three are engaged in contract talks, including Lapeer, Bay and Macomb hospitals, she said. “Each facility looks at census and whether they need to move resources” into clinical departments based on volume and acuity changes, Kahn-Monroe said. When volume or acuity levels rise, hospitals bring in additional nurses to maintain good patient care, she said. However, Kahn-Monroe said hospitals review patient activity every four hours and if volume dips, nurses could be sent home. “We balance that to make sure they get the hours they need,” she said.

“Populations in hospitals today, 30 years ago would not have survived. Acuity is growing, and expertise is critical. If you don’t have safe staffing, you can’t do it.” Marge Calarco

One of the biggest problems nurses some hospitals have faced under Obamacare is how executives react when their hospital Medicare quality scores dip and they don’t qualify for higher federal reimbursements under value-based payment formulas. “If the hospital doesn’t get all 9s or 10s, we don’t qualify for reimbursement, and the nurses are belittled and given more work to get the scores up,” Hall said. “It sometimes adds two to three hours of different work every day just to get the reimbursement. We don’t get extra help.” Hall said one bad patient experience can lower Medicare patient satisfaction scores. “If they provided enough nurses to do the extra work, we could more easily get the scores,” he said. “If you are that eighth patient you will write the bad score. If we had enough nurses where you are the fourth patient, we have more time to do a good point.” Kahn-Monroe said she does not

believe that McLaren Lapeer blamed nurses for lower than expected patient satisfaction scores. “Lapeer does need some work, but it isn’t just nurses. I take exception that nurses are being singled out,” said Kahn-Monroe, adding that when patient satisfaction scores dip the entire patient care team is asked to improve. “We go back to staff and ask how we can improve,” she said. Rydahl said Munson nurses often agree to overtime because paperwork requires an extra 30 minutes to an hour to complete after a 12-hour shift. “We have too many patients who needed nursing care,” she said. “I would be abandoning my patients if I left. It is a scheduling problem as well as higher acuity.” Munson often schedules too few nurses in hospital departments, said Rydahl, and that often requires nurses to do many non-nursing duties. They include patient transportation, housekeeping and patient sitting, she said. Moore said DMC Huron Valley-Sinai also has cut staff in patient transportation, environmental services and housekeeping. “We are leaving the floor to transport patients, to take out the garbage and sweep the floors,” Moore said. “Patients are asking where the help is. We want to care for patients, and we are not getting support.” Armelagos said UM nurses addressed the issue on non-nursing duties years ago in their contracts. “Hospitals are foolish when they have nurses doing non-nursing tasks,” he said. “The work is comprehensive enough not doing the work as a clerk. But when something needs to be done in the hospital and there is nobody else do it, nurses do it. Hospitals know this and cut support staff on purpose.” Lehman said nurses have several complaints about how Huron Valley-Sinai schedules nurses. When patient volume drops during the day, the hospital sends nurses home. “It is called ‘K’ time. You go home without pay or you can use vacation hours,” said Lehman, adding that except for the operating room and cardiac catheter laboratory there is no on-call schedule. “We work three 12-hour days, and sometimes much longer,” Lehman said. “What every nurse wants is some kind of a floor. We want to know how many nurses are on call

during a day and keep to a safe staff ratio. You have to take into consideration emergencies because we need to be able to see patients safely.” For example, Lehman said often in the emergency department nurses face short-staffing when trauma cases mount up, increasing typical 4-1 patient to nurse ratio up to 7-1 or more. While Hall said mandatory overtime is limited in the Lapeer nurses’ current contract, the hospital does not always abide by staffing guidelines for every department. “We do have some nurses who will stay voluntarily. It is not considered mandated hours because a nurse has volunteered,” Hall said. “If no one will stay, that is when they go to mandatory.” The last two years, however, McLaren Lapeer has been unable to hire enough nurses, Hall said. “They like to say it is because of the nursing shortage. But we have several schools that produce 40 to 60 nurses per semester,” said Hall, noting that there are three hospitals in Flint that also hire nurses. “We deal with issues of competitive pay. If you pay lower wages than other hospitals, you won’t get as many nurses.” Hall said he knows several nurses at Lapeer who have graduated from nursing school and decided to go into home health or health insurance because of pay and working conditions at hospitals. Kahn-Monroe said McLaren Lapeer recently hired a number of nurses to fill vacancies. “We had some turnover there, but we were able to hire people in,” she said. Calarco said nursing shortages are cyclical and often based on geography, with rural hospitals sometimes having more trouble attracting nurses than suburban hospitals because of pay and other factors. But Calarco said hospital vacancies are sometimes created when there is low nursing staff and nurses become overworked and dissatisfied. She said there is no shortage of nurses in Ann Arbor, partially because nurses want to work at UM. “You have a downward spiral when you create more vacancies to fill,” she said. “Nurse recruiting and retention is impacted by practice environment of hospitals.”

signed to a nurse. For example, no more than two patients can be assigned to a single nurse in all intensive care and burn units. The state also requires hospitals to post staff ratios on websites. Floor nurses Judy Moore and Kathy Lehman at Huron Valley said if the state Legislature wants patient care at hospitals to improve, legislators should vote for the bills. They say patient care and quality has improved in Massachusetts and California where safe staffing statutes have been approved.

“Nurses and patients would know exactly what you are getting when you walk into a hospital. We would know how many patients we have to take care of and patients would know, too,” said Moore, an intensive care nurse. Marge Calarco, chief nursing officer at the University of Michigan Health System, said she is not a proponent of mandated nurse-patient ratios because they don’t allow hospitals flexibility to take into account patient acuity levels that vary from day to day.

“We at UM take staffing very seriously and do it very well,” Calarco, adding that “there are many places in Michigan and across the county that do not to have the resources for safe staffing.” But Calarco said hospitals that cut nursing costs for financial reasons often end up paying more in the long run for agency or travel nurses. Short staffing also can reduce quality care, she said.

Obamacare impact?

Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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CALENDAR MONDAY, NOV. 20 The Role of Innovation in Meeting 21st Century Housing Challenges. 11:30 a.m.-1:30 p.m. Nov. 20. Timothy J. Mayopoulos, Fannie Mae president and CEO, Timothy will talk about the Mayopoulos role of innovation in meeting 21st century housing challenges. Westin Book Cadillac. $45 members, $55 guest of members, $75 nonmembers. Website: econclub.org

UPCOMING EVENTS JVS Business Connections: Why You Should Take Artificial Intelligence Personally. 7:30-8:45 a.m. Nov. 29. Stephen Couchman, president and CEO of LivePicture, will talk about machine learning, natural language processing, computer vision and machine reasoning. He will also speak about emerging business opportunities and market trends and how to respond to the technology. Jewish Community Center, West Bloomfield. Free, but registration required. Contact: Angela Bevak, phone: (248) 233-4482; email: abevak@jvsdet.org CREW Detroit Presents Carla Har-

ris. 11 a.m.-2 p.m. Nov. 29. Commercial Real Estate Women Detroit. Carla Harris, Morgan Stanley’s vice chairman, managing director and senior client adviser, shares her “Tools for Maximizing Your Success.” The Reserve, Birmingham. $75 member; $125 nonmember. Contact: Kelly Sternberg, phone: (248) 436-5520; email: kelly.sternberg@bartonmalow.com; website: crewdetroit.org

services to EU residents. Charles Russman, Bodman’s Data Privacy and Security Practice Group leader, will discuss how GDPR applies to business; the legal implications if a company is not compliant and how to prepare for the requirements. Bodman PLC at Ford Field. Free. Contact: Pamela Iacobelli, phone: (313) 530-8033; email: pmiacobelli@gmail.com; website: bodmanlaw.com

The Voice of Business in America — Regaining Trust in Our Institutions. 11:30 a.m.-1:30 p.m. Nov 30. George Barrett, chairman and CEO of Cardinal Health, is the speaker. Westin Book Cadillac. $45 members, $55 guest of members, $75 nonmembers. Website: econclub.org

A Third Century of Public Impact. 11:30 a.m.1:30 p.m. Dec. 11. University of Michigan President Mark Schlissel looks at what’s ahead for public research universities as the UniMark Schlissel versity of Michigan marks 200 years. Westin Book Cadillac. $45 members, $55 guest of members, $75 nonmembers. Website: econclub.org

Michauto Summit: A Conversation on Culture & Careers. 9:30 a.m.-4:15 p.m. Dec. 6. Detroit Regional Chamber. College students and emerging industry leaders meet with Michigan’s automotive and mobility companies around career opportunities and the culture of the business. College for Creative Studies. $150 members; $200 nonmembers. Contact: Jordan Yagiela, phone: (313) 596-0384; email: jyagiela@detroitchamber.com What is GDPR? The New Privacy. 8-9 a.m. Dec. 7. Bodman PLC. In May 2018, the European Union’s General Data Protection Regulation becomes effective and will apply to many U.S. organizations providing products and

Global Business Outlook for 2018 and Beyond. 8-11 a.m. Jan. 11. Automation Alley. Keynote presentation from Paul Traub, senior business economist, Federal Reserve Bank of Chicago, Detroit Branch, on the shifting dynamics of the global economy and how companies can best position themselves to do business in the U.S. and overseas. Topics to include: the impact of interest rate hikes; deregulation; tax reform; health care; potential stock market corrections; geopolitical risks and how these will affect Michigan’s business and industry climate. Automation Alley. $99 members; $125 nonmembers. Contact: Lisa Lasser, email: lasserl@automationalley.com 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.

Ann Arbor startup gets $2.2M in funding By Tom Henderson thenderson@crain.com

Ann Arbor-based Give and Take Inc., a tech startup that allows employees at companies to better collaborate and share knowledge, has raised a seed funding round of $2.2 million and launched the beta version of its software platform, called Givitas. The company said last Thursday that it raised the money from Ann Arbor-based RPM Ventures, Grand Rapids-based Grand Ventures, Detroit-based Invest Michigan, angel investors and Larry Freed, who Larry Freed: has become the Companies lose CEO. when employees The funding aren’t engaged. will be used to continue development of the Givitas platform, marketing and staffing. Give and Take is based on research at the University of Michigan and the Wharton School at the University of Pennsylvania. Its founders are Wayne Baker, a professor at the Ross School of Business at UM; Cheryl Baker, Wayne Baker’s wife and co-creator of the Reciprocity Ring, an organizational exercise that has been sold to Fortune 500 companies and top business schools; and Adam Grant, a professor at Wharton. Freed was the founder of ForeSee Results Inc., an Ann Arbor-based Web analytics company founded in 2001 as a joint venture of UM and Detroit-based Compuware Corp. It was sold in 2013 for 22 times its original investment. The next year, Freed and former members of his management team at ForeSee founded 2nd Stage Partners in Ann Arbor to help growing companies go from early stage to business maturity. According to Crain’s estimates, ForeSee had revenue of about $42 million in 2013. “Fortune 500 companies lose more than $31.5 billion a year when employees fail to share knowledge effectively, and two-thirds of Americans

Need to know

J Give and Take Inc. allows employees to better collaborate J ForeSee founder Larry Freed becomes CEO at tech startup J Company launches beta version of its software platform Givitas

“Michigan has an incredibly rich startup environment, and Larry and his team have proven they know how to build and deliver best-inclass technology solutions.” Tony Grover

are not engaged at work, costing up to $600 billion each year,” Freed said in a news release. “These are issues that hit close to home for every business leader. Smart companies understand that empowering and enabling employees to share knowledge and information easily, efficiently, and effectively not only fosters a giving culture, but also speeds up response times, drives employee engagement and improves business outcomes.” “We’ve been helping companies leverage the concepts of generalized reciprocity and social capital to improve business outcomes since 1999,” Wayne Baker said. “It’s exciting that we can now use technology to scale these concepts and bring them to a much wider audience.” “Michigan has an incredibly rich startup environment, and Larry and his team have proven they know how to build and deliver best-in-class technology solutions,” said Tony Grover, a managing partner at RPM Ventures, the lead investor. “Give and Take is poised to bridge the gap between existing knowledge management platform and collaboration software, making it easy and natural to ask for or give help in less than five minutes a day.”

DEALS & DETAILS ACQUISITIONS & MERGERS

MOVES

Flagstar Bancorp Inc., Troy, announced that Flagstar Bank has signed an agreement to acquire eight Desert Community Bank (Victorville, Calif.) branches in San Bernardino County, Calif., from parent company East West Bank, Pasadena, Calif., along with certain related assets. Websites: flagstar.com, dcbk. org, eastwestbank.com.

J Humanetics Innovative Solutions Inc., Farmington Hills, has moved its corporate headquarters from 47460 Galleon Drive, Plymouth, to 23300 Haggerty Road, Farmington Hills. The new 100,000-square-foot building consolidates all Michigan operations into one single facility. Phone: (248) 778-2000. Website: humaneticsatd.com.

EXPANSIONS

NEW SERVICES

J Ghafari Associates LLC, Dearborn, an engineering, architecture, process design, consulting and construction services firm, has opened its first office in the Southwest, at 300 Throckmorton St., Suite 600 Fort Worth, Texas. Website: ghafari.com.

J Consumers Energy Co., Jackson, launched the Michigan Talent Pipeline Management Academy, to help state businesses hire better skilled workers to meet employment needs. The academy was developed in collaboration with the U.S. Chamber of Commerce Founda-

tion. Website: ConsumersEnergy. com/mitalentarchitecture. J Pinkerton Consulting & Investigations Inc., Ann Arbor, a risk management agency, has added litigation support services to its security and risk management client offerings. Website: pinkerton.com.

STARTUPS J Skinny Pete’s Catnip LLC, Rochester Hills, a high-end, gourmet catnip company founded by husband and wife team Rich and Lisa Jackson, is now open for online business. Their flagship product is the “Three Piece Gourmet Catnip Gift Set.” Website: skinnypetescatnip. com.

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FINANCIAL SERVICES

ACCOUNTING

LAW

FINANCIAL SERVICES Chad M. Duschinsky

Tamara Todorovic

Associate

Gallagher Sharp LLP

Manuel Amezcua

Alan C. Young

Brian L. Davis

President, CEO

Chairman MICPA Board of Directors

Managing Director of Advisory & Private Equity Coverage

MassMutual Great Lakes Manuel Amezcua was appointed firm President, CEO of MassMutual Great Lakes, a General Agency of Massachusetts Mutual Life Insurance Company. Amezcua brings 14 years of experience building successful financial services teams. With the agency positioned as a leading provider of insurance & wealth management, Amezcua will focus on increasing brand awareness serving business owners & corporations. Amezcua is committed to setting a new standard as the most advisor-centric firm in the region.

EDUCATION

Alan C. Young Associates PC

The law firm of Gallagher Sharp announces that Chad M. Duschinsky has joined the firm’s Detroit Office as an Associate. Mr. Duschinsky received his law degree, cum laude, from Michigan State University College of Law in 2017. He received his undergraduate degree from Michigan State University James Madison College in 2013. He is a member of the State Bar of Michigan. Visit www.gallaghersharp.com for more information.

Ducker Worldwide

Gallagher Sharp announces that Tamara Todorovic has joined the firm as an Associate. Tamara received her law degree, cum laude, from Michigan State University College of Law in 2017, where she served as Associate Editor of Michigan State Law Review. She received her undergraduate degree, With Distinction, from the University of Windsor in 2014, where she received the Board of Governors Medal. She is a member of the State Bar of Michigan. Visit www.gallaghersharp.com for more information.

The Michigan Association of Certified Public Accountants has elected Alan C. Young as Chairman of its board of directors for 2017-2018. Mr. Young founded Alan C. Young and Associates PC in Detroit in 1983 and brings 40 years of experience as a CPA to his new role. Mr. Young is a member of the Cass Technical High School Alumni Board, the Detroit Regional Chamber of Commerce and board of directors for First Independence Bank. He has also been appointed to the Michigan State Board of Accountancy.

Ducker Worldwide (Ducker) formally announced that Brian Davis has joined the firm as Managing Director of Advisory & Private Equity Coverage. Davis will represent Ducker’s key service offerings, including proactive transaction and target identification, due diligence, transaction management, post-merger/acquisition integration and value creation. Davis joins Ducker with more than 15 years in senior positions from companies such as TPG Growth, Sentinel Capital Partners, and McColl Partners.

ACCOUNTING

FINANCIAL SERVICES

INSURANCE Scott Crane Vice President, Client Executiver

Hylant Hylant, one of the nation’s largest family-owned insurance brokerages, has named Scott Crane Vice President, Client Executive. In this position, Scott will continue developing relationships primarily within the automotive, alternative risk and private equity sectors. He will also mentor Hylant’s newest client executives: A role, says Detroit President Patrick McDaniel, that exemplifies Scott’s commitment to “our core values of family, hard work, honesty, respect and empathy.”

Ron Stefanski

Kurt Siebenaller

Jay Howard

Managing Director for Corporate Education

Partner

Senior Vice President, Wealth Management Advisor

Penn Foster Group Penn Foster, a leading skills solutions organization focused on building a talent pipeline for individuals and corporations, today announced it has named Ronald Stefanski as Managing Director for Corporate Education. This move will be instrumental in helping employers and other partners upskill their workforce to fill talent gaps through Penn Foster’s network. Stefanski brings a wealth of directly relevant experience, most recently as former executive director of ed2go.

Baker Tilly Nationally recognized accounting and advisory firm Baker Tilly Virchow Krause, LLP (Baker Tilly) is pleased to announce the addition of Partner Kurt Siebenaller to the Michigan office. Siebenaller brings more than 25 years of experience in public accounting. His extensive knowledge of tax planning, tax minimization, business planning and compliance matters allows him to offer value-added services to clients in the manufacturing, construction and real estate industries.

Fifth Third Bank Howard will work closely with individual, business and institutional investors within Fifth Third Private Bank to help them build their wealth and achieve their financial goals. Howard brings more than 20 years of financial services experience to Fifth Third Bank. Most recently, he was an executive director and market team lead for JP Morgan Private Bank in Birmingham. He began his career in public accounting and has held numerous roles including advising, accounting, and investment management.

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

Page 2

JOB FRONT

PEOPLE BANKING/ FINANCE J Molly McLaughlin to human resources manager, Cole, Newton & Duran CPAs, Livonia, from human resource generalist, CrossFire Group LLC, Auburn Hills.

EDUCATION Bart Bronk to head of school from interim head of school, University Liggett School, Grosse Pointe Woods. J

LAW J Nicole Meisner to electronic payments associate, Jaffe Raitt Heuer & Weiss PC, Southfield, from attorney, Fuerst Ittleman David & Joseph PL, Miami, Fla.

Snyder names Tukel to Michigan appeals court

Gov. Rick Snyder last week announced the appointment of Jonathan Tukel to the Michigan Court of Appeals. Tukel succeeds longtime Judge Henry Saad, who notified appeals court employees in May that he would retire Jonathan Tukel from the bench effective Nov. 30. Tukel, 56, will serve in the Court of Appeals’ 2nd District, which covers Oakland, Macomb and Genesee counties. He will need to seek election in November 2018 for a twoyear term, according to the release. Tukel has been an assistant U.S. attorney with the Department of Justice since 1990, most recently serving as chief of the national security unit supervising investigations and prosecutions with national security implications. “Jonathan Tukel has a long and distinguished career as a thought leader in the law,” Snyder said in a news release. Tukel also lectures at the University of Michigan Law School, from which he received his degree in 1988, according to the release. He also earned his bachelor’s degree from UM. Previously, Tukel was an associate for Honigman Miller Schwartz & Cohn LLP, chiefly in antitrust law, labor and white collar criminal defense, the release said.

Carhartt names its first chief brand officer

Carhartt has named its first chief brand officer, promoting its senior vice president of marketing, Tony Ambroza, to the post. Effective immediately, Ambroza, 46, will head brand engagement strategies to build identity with its Tony Ambroza customers through TV commercials, social media, events, retail marketing and other mediums. The goal will be to

November 20, 2017 17

MANUFACTURING Jay Goldbaum to general counsel from legal director, Horizon Global Corp., Troy. J

NONPROFIT J Jacqulyn Hippe to counselor and community advocate, LGBT Detroit, Detroit, from volunteer coordinator, Turning Point, Mt. Clemens. J Sean O’Neill to associate program officer, American Cities Practice, The Kresge Foundation, Troy, from senior manager, strategic retention and analysis, HR Talent Management Team, Denver Public Schools, Denver, Colo.

To submit news of your new hires or promotions to People, go to crainsdetroit.com/peoplesubmit and fill out the online form.

POSITIONS AVAILABLE

Ann Arbor fest names new executive director

The Ann Arbor Summer Festival board of trustees has named a new executive director for the nonprofit. Mike Michelon, 29, was promoted from general manager of the festival to the executive position effective immediately, the Mike Michelon board announced Thursday. He replaces Amy Nesbitt, who left the group Aug. 1. Ann Arbor Summer Festival is a three-and-a-half-week display of performing arts and outdoor entertainment in Ann Arbor. Michelon, a University of Michigan graduate, joined the nonprofit in 2014 as general manager. He will work to fill that position in the coming months.

AccessPoint names president and COO

Farmington Hills-based AccessPoint LLC has promoted Luis Perez to president and its first COO, the recruiting company announced Wednesday. Perez, 53, joined AccessPoint in December 2016 as a consultant, the company said in a news release. He assumed his post leading the company’s growth and acquisitions strategies on Aug. 1. Perez replaces owner and CEO Greg Packer as president.

BUSINESSES FOR SALE

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SOFTWARE PROJECT LEAD advance Dearborn-based Carhartt’s identity as a brand for hardworking people, it said in a new release. Ambroza joined Carhartt in 2010 and his marketing work has helped the 128-year-old retailer “succeed in a new age of selling,” President and COO Linda Hubbard said. Ambroza previously was director of marketing at Baltimore-based Under Armour Inc. and brand marketing at Beaverton, Ore.-based Nike Inc. He holds economics and political science degrees from Columbia University, and a sports management and marketing master’s degree from Indiana University. Carhartt has yet to replace the vice president of marketing.

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Job Duties: Lead all dom involved in Infot Sys in tracking the dev activities, activ participant in plan Pre-Integr test & Unit Test activities dev track of all module in infota sys. Set target & deadline for all dev module. Defect mgmt & handle escal from cust. Co-ord with Func owner & Domain leads track dev & defec. Pre-integr test plan & sched accor to Integr Plan Unit Test track of all module in Infotai sys. Perfor & creat protocols for the dev team to adhere Agile Metho. Popul rep & metrics regar SW dev activ carried out by dev teams. Closely interact with req team, Dev team & validation team attain good level of maturity of the SW. Requirements: Bach’s deg (foreign equiv) in Comp Sci, Eng, Info Tech or rel with 5 yrs of exp in Automotive Dom. Good k’ledge of Autom produ mgmt. Good k’ledge on tech like QNX p’form which is used in almost all Automotive Prog. Tools & Tech: C++, C, Doors, Vector CANoe, Value CAN, Linux, QNX, Windows, Defect mgmt Tools, MS Office, Test case mgmt. tools. . Apply:

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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 // N O V E M B E R 2 0 , 2 0 1 7

Is Michigan ready for the next recession? By Lindsay VanHulle

Crain's Detroit Business/Bridge Magazine

Until the last one, Paul Robertson Jr. hadn’t really minded a recession. Sure, his family’s Bloomfield Hillsbased home building company, Robertson Bros. Co., would build fewer homes, but he’d lay off a few employees and ride it out until the market recovered and he could bring them back. Robertson inevitably would have fewer competitors for his business afterward, since a downturn forced some builders to go under. Then came 2007. Robertson’s company’s sales volume went into freefall — from $60 million to $3.5 million over two to three years — and he slashed his workforce from 68 to just six. “We went down so far, so fast with everything that happened that this recovery is just getting us back to where we were before,” said Robertson, who thinks he could hit his pre-recession sales level by 2018. “I don’t feel any overheating. I don’t feel any overreach in what’s going on.” That Robertson, a home builder, maintains confidence in an economy that a decade ago devastated homeowners is partly because his company no longer does business the way it

RECESSION FROM PAGE 1

Economists point to any number of events that could cause economic shock, including overheating in Chinese real estate, Brexit, the rising threat posed by North Korea or President Donald Trump’s desire to renegotiate international trade deals. But experts told Bridge the next recession is at least a few years away, with no imminent bubble about to pop in the U.S. economy. “What we’ve been forecasting is for a slowdown in job growth in Michigan this year, especially relative to the last few years. But that’s different than a recession,” said Gabriel Ehrlich, an assistant research scientist in economics at the University of Michigan and director of U-M’s Research Seminar in Quantitative Economics. “What we’re seeing now is the new normal, which is going to be slowand-steady growth,” Ehrlich said. Other factors, such as Michigan’s aging workforce, are more related to demographics than the length of the business cycle, he said. Those trends, plus a skills gap between what employers need and what job candidates know how to do, have put pressure on employers that will only intensify in a recession. On the plus side, the state has diversified its economy since 2006. Excluding government, manufacturing was the second-largest industry by number of employees that year after trade, transportation and utilities, according to data from the Michigan Bureau of Labor Market Information and Strategic Initiatives. By 2016, education and health services and professional and business services sectors had surpassed manufacturing, according to the state. Even so, manufacturing is “still paramount to the importance of this state,” said Jeff Guilfoyle, an economist and a vice president at Public Sector Consultants. The auto industry has transitioned toward more research and development on mobility and vehicle technology, Guilfoyle noted, but

not be so lucky, making the economic strategy of Snyder’s successor an issue in the 2018 campaign. The Snyder administration has taken numerous steps to shore up the state’s finances, from balancing budgets to boosting Michigan’s rainy-day fund, which Guilfoyle said should make it a smoother transition for Snyder’s successor than it was when the former venture capitalist and businessman became governor in 2011. And yet, Michigan remains vulnerable to a downturn in a few ways: J The state’s economy has yet to recover all the jobs lost over the first decade of the 2000s. And despite expanding other sectors since the economy hit bottom, Michigan still relies heavily on manufacturing, which was among the hardest-hit industries a decade ago. J Michiganders increasingly are giving up looking for work. That makes the state’s jobs picture look rosier than it really is, since those who are not actively seeking work are not counted in the unemployment rate. J Michigan’s general fund will be further squeezed in coming years, the result of diverting tax dollars to fund road repairs starting in 2019, expand-

used to. He waits to hire new employees until it’s necessary. He restrains annual wage increases. And, most importantly to him, he has lessened his exposure to risk by building smaller projects and borrowing less money. Those changes, necessary when his company was hanging on, may now be the foundation that Robertson says will protect his business from the next recession. His cautious approach is being adopted by other businesses, which have been slow to raise wages during the economic recovery; that may be prudent should economic winds shift, even as some workers feel the expansion has left them behind. Several Michigan-based economists say that while the economy doesn’t show imminent signs of crashing, it’s unlikely the state’s extended recovery can continue for several more years, based on past experience. That educated guess — and it is a guess, since recessions can’t be predicted with certainty — is rooted in a national expansion that is now over eight years old, the third longest on record. In less than two years, this recovery cycle, if it lasts, will become the longest recovery since the 1850s. Warning signs are starting to ap-

pear. Domestic auto sales, which have an outsized influence on Michigan’s car-heavy economy, are beginning to plateau. Automakers also are nearing the end of a several-year cycle of updating their cars and SUVs, which will have effects up and down the supply chain as the need for retooling slows. Forecasters expect state revenue won’t grow as fast over the next few years. And since unemployment remains low in Michigan — the state’s seasonally unadjusted jobless rate for September was 4.5 percent — the state is unlikely to experience significant job growth that would yield more income tax revenue. “I certainly don’t see anything at the moment where I feel like the economy is in significant trouble,” said Jeff Guilfoyle, an economist and a vice president at Lansing-based Public Sector Consultants. “Often, that’s a risk in and of itself, is that you start thinking everything’s OK.” (PSC performs consulting for The Center for Michigan, which includes Bridge Magazine). Guilfoyle and other economists say they believe Gov. Rick Snyder will be able to escape office at the end of next year without having to face a recession. But the state’s next governor may

“assembly plants still employ a lot of people.” Tier one auto suppliers — companies that generally supply directly to automakers — likely will be able to weather any change in the automotive business model because many have shifted into new vehicle technologies, said Laurie Harbour, president and CEO of Southfield-based Harbour Results Inc., a consultant to the auto supply chain. It’s the smaller firms that make parts for larger suppliers, such as tooling companies, she worries about. That group often is made up of family-owned companies with aging owners, often in their late 50s, who more likely would retire than go through another recession. Manufacturers too reliant on any one product or business sector are “without a doubt” the most vulnerable to fluctuations in the economy, said Chuck Hadden, president and CEO of the Michigan Manufacturers Association, a Lansing-based trade group. Many now seek new markets for their products, Hadden said. A company that makes a fuel pump might also look at building water or other pumps, for instance. Gudel, the U.S. subsidiary of Swissbased Gudel Group, has entered more geographic markets to increase productivity at its Ann Arbor factory, mainly in Mexico and South America, Campbell said. Company leaders also prepare more detailed business forecasts than they used to, looking at all projects in the pipeline, to get a better picture of the market. Gudel’s 88-person workforce is at least 30 percent bigger than it was at the worst of the recession, he said. Gudel’s U.S. operation makes $40 million in revenue annually, he said, while its Swiss parent has sales between $300 million and $350 million annually.

The Changing Economy

Wages remain stagnant Business leaders’ confidence in the economy, however, depends on who you ask. Business Leaders for Michigan, the

Michigan has almost exactly as many people working as a decade ago, but the shape of that workforce has changed. Industry

People employed in Michigan 2006 2016 % change

Health care and social assistance

507,200

591,000

16.5%

Professional and technical services

257,900

295,700

14.7%

State government

170,600

188,200

10.3%

Transportation and warehousing

128,400

137,400

7.0%

Administrative and waste services

275,100

293,200

6.6%

Accommodation and food services

352,300

374,400

6.3%

Nondurable goods

143,600

148,300

3.3%

Wholesale trade

170,600

172,000

0.8%

Finance and insurance

158,900

160,000

0.7%

Utilities

20,500

20,100

-2.0%

76,100

73,900

-2.9%

Real estate and rental and leasing

54,900

52,900

-3.6%

Federal

54,100

52,100

-3.7%

Educational services

Management of companies and enterprises Retail trade

63,900

61,100

-4.4%

496,000

472,200

-4.8%

Arts, entertainment, and recreation

54,600

51,300

-6.0%

Durable goods (manufacturing)

494,100

451,900

-8.5%

Mining Local government Total nonfarm

6,500

5,500

-15.4%

440,600

360,400

-18.2%

4,326,800

4,325,600

<0.1%

Source: Bureau of Labor Statistics

state’s business roundtable made up of executives from the state’s largest companies, found in a recent survey 58 percent of employers were optimistic about the state’s economic growth over the next six months. Yet employers in a new survey by the American Society of Employers were less optimistic, with just 29 percent saying they expect better business conditions over the next six months. Still, 89 percent of companies said they believe hiring will stay the same or increase compared to the past six months. That disparity shows why “business confidence can be a terrible leading indicator,” said Mary Corrado, president and CEO of the American Society of Employers, a Livonia-based membership organization representing

nearly 800 companies in Michigan. “How do you feel today? Next week you might land that huge contract, and all of a sudden your optimism changes a bit.” Any optimism hasn’t translated into higher wages, however. Corrado’s group released September survey results that showed employers expected to pay 3 percent average wage increases this year and next, a figure that hasn’t changed since 2009. The findings illustrate a trend that has puzzled economists: Low unemployment should be triggering employers to raise wages significantly to attract talent. That hasn’t happened. One explanation could be that employers are choosing other ways to invest, such as training and develop-

ing a homestead property tax incentive and phasing out a personal property tax on industrial equipment, to name a few. J Employers have complained of a talent shortage for years, in part because not enough Michigan workers have the skills companies say they need. J Roughly 40 percent of Michigan’s households can’t afford to cover basic expenses, according to a 2017 study of the state’s working poor from the Michigan Association of United Ways. Combined with strict limits on welfare benefits and Michigan’s status as a low-education state, many residents remain vulnerable in another downturn. “All the things that make it difficult to sustain an expansion in previous expansions, all of those are present now,” said Charles Ballard, an economist at Michigan State University. “In 2012, of course the expansion was going to continue because there was low-hanging fruit,” said Ballard, referring to the ability of employers to find workers left jobless after the 2007 financial crisis; Michigan now is close to full employment, meaning nearly “all the low-hanging fruit has been picked.” ment or benefits designed to recruit “the best and brightest,” Corrado said. A company may not offer 5 percent raises each year, but instead offer a more family-friendly workplace or pay for workers’ health care. Some employers remain cautious, the pain still fresh from the last recession. “I do think companies are kind of keeping as much cash as they can in anticipation” of the next downturn, Corrado said. “The time is right for us to have another dip in the economy, so we’re all kind of holding our breath wondering when it’s going to be.” Nationally, U.S. companies reportedly are sitting on more than $1 trillion in cash; public firms are choosing to spend money on shareholder dividends, buying back shares to boost their stock prices and acquiring other companies, noted Charles Ballard, an economist at Michigan State University. “None of those does anything to improve the productive capacity of the economy, and none of them does anything for wages,” he added. “This is all part of what I call, and others call, the ‘financialization’ of the U.S. economy.” Ballard added that Michigan businesses didn’t need to pay more to attract talent during the recession because so many people were unemployed. “Employers got very accustomed to modest wage increases, and I don’t know how long that will take to change,” Ballard said. “There’s almost been a culture shift.” Guilfoyle said one possible advantage to a long, slow expansion is that some places that have not felt the effects of the recovery so far still might before the next down cycle comes. As the labor pool continues to tighten, he said, employers will have more of an incentive to help draw people back to work, including by making more of an effort to find workers who faced job barriers in the past, such as parolees. Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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

ISRAEL FROM PAGE 3

Israel is only the 19th largest importer to Michigan, representing only 0.3 percent of total imports, but its knowledge-based economy presents unique opportunities, Davidoff said. Israel produces an impressive number of successful startups for a country of just 9 million people — roughly the same as the state of Michigan. It’s often referred to as “Startup Nation,” thanks to a growing list of entrepreneurial activity in its major cities like Tel Aviv. Israel kickstarted its tech boom with tax cuts in the mid1980s. A government initiative started in 1993 called Yozma offered tax incentives to foreign venture-capital Beth Gotthelf: investments in Culture of innovation in Israel. Israel as well as matching funds from government coffers. The move exploded VC-backed investments in the country — from $58 million in 1991 to $4.43 billion in 2015. IBM, Google, Apple, Microsoft and Facebook have all opened research and development hubs in the nation. Its mobility and defense sector, with ties to Michigan companies, have also drawn huge price tags. In March, Intel Corp. acquired Jerusalem-based autonomous driving hardware and software supplier Mobileye for $15.3 billion. Several local suppliers and automakers use Mobileye’s products. TowerSec, a cybersecurity startup based in Ann Arbor and Tel Aviv, was acquired last year by Harman International’s automotive division in Novi. In September, Henry Ford Health System started a $75,000 development contest for Israel-based startups to boost patient care by using artificial intelligence. Israeli Prime Minister Benjamin Netanyahu has also expressed to Gov. Rick Snyder in recent mission trips that the American Center for Mobility, a federally-designated, connected- and autonomous-vehicle test hub at Willow Run in Ypsilanti, could serve as a magnet for Israeli startups. “There are 5,000 startups in Israel today; it’s a culture of innovation,” said Beth Gotthelf, president of MIBB and partner at law firm Butzel Long PC in Bloomfield Hills. “A lot of those innovations are touching areas close to us, such as manufacturing and defense. It’s a small country that can’t sell to its neighbors (in the Middle East). They need export channels and we can link them with Michigan, which has a heritage in these industries.”

“A lot of those innovations are touching areas close to us, such as manufacturing and defense. It’s a small country that can’t sell to its neighbors (in the Middle East).” Beth Gotthelf

Mary Kramer named group publisher for Crain’s New York, Crain's Chicago Business

Mary Kramer

Crain Communications Inc., the parent company of Crain’s Detroit Business, continues to expand its national media footprint. Longtime company executive Mary Kramer has been named group publisher of Crain’s New York Business and Crain’s Chicago Business, adding to her roles at Crain’s De-

troit Business and Crain’s Cleveland Business. Kramer joined the Detroit-based company in 1989 as the editor of Crain’s Detroit Business and in 2012 became group publisher for the Detroit and Cleveland publications. She is a member of the International Women’s Forum and the

Michigan Journalism Hall of Fame. As other prominent news organizations scale back their local coverage, Crain’s Detroit Business continues to serve as the leading source of information on the Detroit economy and the companies, industries, institutions and innovators

BATAYEH FROM PAGE 3

And now she aims to grow Village Green, which traces its roots to 1919, when former CEO Jonathan Holtzman’s grandfather, Joseph, started one of the first licensed single-family homebuilding companies in Michigan. Jonathan Holtzman accepted a buyout in June 2016 and began City Club Apartments, which is developing new multifamily buildings in Detroit and other cities. Batayeh, who had been president and COO, began running the company at that time and was named CEO in March. In the next several years, she plans to get Village Green to an ownership/ management portfolio of between 50,000 and 60,000 units, which she said is the company’s “sweet spot.” “Over the next couple years, we are absolutely pushing our brand more in markets that we aren't currently in,” she said. “Today we are as far

VILLAGE GREEN HOLDINGS LLC

Village Green Holdings moved its headquarters from Farmington Hills to a 35,000-square-foot office in the One Northwestern Plaza building in Southfield.

northeast as Rhode Island and as far southwest as Scottsdale, Arizona.” Look for the company to turn its eyes westward and elsewhere into markets like California and the Northwest, she said.

The University of Michigan graduate — who has a photo of legendary UM football coach Bo Schembechler (“I don’t think there is any better leader that ever lived,” she said) hanging on one of her office walls —

driving the city’s growth. Crain’s remains committed to the highest standards of journalism, connecting businesses and delivering top-notch services that enable our advertisers, sponsors and partners to reach influential audiences in Southeast Michigan and other top markets across the country.

has already left her mark. She took the company from its longtime home in Farmington Hills to a new, larger 32,000-square-foot office in Southfield off Northwestern Highway. Part of that was because the old office was too small; the other part is that one of Village Green’s divisions, its corporate housing arm, was in a different location. Now the whole company is under one roof. Village Green is the 28th largest owner/operator in the country with nearly 43,000 units last year, according to the most recent rankings from the National Multifamily Housing Council. Batayeh says it has about 40,000 units currently. (Bloomfield Hills-based Edward Rose & Sons is 12th largest, with approximately 60,500.) “I definitely see our trajectory continuing upward,” she said. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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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 // N O V E M B E R 2 0 , 2 0 1 7

GOODWILL FROM PAGE 3

“We think our model can provide a little bit of a social return for those folks and at the same time accomplish the social mission that’s important to Goodwill.” The planned acquisitions are just one of the strategies Goodwill is rolling out with its new strategic plan aimed at workforce and personal development. Among other things, it’s looking to expand its current business lines of manufacturing, industrial recovery and upscale thrift stores; develop an employee retention program; and increase its service sites in the suburbs.

New strategies Goodwill has been really good, Varner said, at the basic training that sets people up for jobs, including resume building, interview skills, professionalism and communication. It’s done some occupational training but wants to do more. It serves 10,000 people each year and 900 companies. Currently, Goodwill operates three businesses that provide job training opportunities and revenue to support its mission: its familiar thrift stores; Green Works Inc. industrial recycling; and light assembly and kitting as a tier-one automotive supplier. In line with its goal to reduce unemployment, Goodwill has begun efforts to expand its business in each of those lines. This summer, it moved into e-commerce, selling select items from its thrift shops in the region on shopgoodwill. com, a national website offering items from around the country. So far, the early returns have been good, Varner said, but it’s a tricky business model. “You don’t want to do too much online, because then you destroy the treasure hunt in the stores.” But the e-commerce and retail businesses could provide an opportunity to help fill the jobs Amazon will be bringing to town with its new warehouse and fulfillment sites, Varner said. “We’re doing e-commerce — not Amazon style e-commerce, but it’s e-commerce,” Varner said. “We can train people to actually go work with Amazon.” Goodwill is continuing to seek new customers in its industrial asset recovery business which has long served DTE Energy Co. but expanded to serve about 20 Midwest companies in recent years. And it’s looking for opportunities to move into other manufacturing seg-

SIMONCINI FROM PAGE 1

At Lear, he led the company to open its $10 million Detroit Innovation Center last year, an idea to boost technological transformation for the company and a return to the city in which it was founded as American Metal Products in 1917. Simoncini joined Lear in 1999 after the supplier acquired competitor United Technologies Automotive, where he served in senior financial roles. During the 2008 economic downturn, Lear’s value fell by as much as 90 percent due to collapsing pickup and SUV sales. Its stock price fell to $3 per share and the company filed for Chapter 11 bankruptcy in July 2009. Simoncini, under Lear’s former CEO, the late Bob Rossiter, worked tirelessly to create a prepackaged plan that was approved by Lear’s custom-

ments, Varner said. “Nobody knows where automotive is headed exactly. ... We just think it makes sense to explore other manufacturing training opportunities for the folks we are serving,” he said.

The acquisition game Even as it looks to expand its current business lines, Goodwill is looking to acquire new ones. “We’re not prepared to double down on any one right now, but we are interested in expanding and touching on many going forward,” Varner said. Focus areas include health care, manufacturing, construction, information technology, retail, hospitality and entertainment, as well as are other areas, Varner said. The businesses it buys in those training areas would provide both shortterm training opportunities for people like those returning from prison who need to show a recent work history and long-term training and jobs for people who need them, Varner said. “We serve populations living with developmental (and physical) disabili-

“You don’t want to do too much online, because then you destroy the treasure hunt in the stores.” Dan Varner

ties and mental illness who are not transitioning into work quickly but do eventually want to transition into (permanent) work,” he said. That could mean looking for a business that allows Goodwill to employ those people for two or three years so that those clients can have the necessary transition period to move into competitive employment. Goodwill also plans to look for businesses it can own for three to five years while it trains employees to be owner-operators and then sell the business to them. Deborah Groban Olson, executive director of the Center for Community-Based Enterprise, said in an October column published in Crain’s Detroit Business that 400,000 jobs are at risk as Metro Detroit business owners without a succession plan look to retire. “Many owners are interested in ... sell(ing) to their employees but choose not to, ultimately, because the process can be long and complicated,” Varner said. Goodwill can serve as an intermediers, union and bondholders hours before a major bond payment was due. “We worked around the clock,” Simoncini told Crain’s in 2011. “At 1 a.m., we received the last commitment from our bondholders, putting us over 51 percent (approval). We knew with very little uncertainty that this was the watershed moment for our plan.” At the time of the deal, Lear’s stock was trading at around 40 cents. The prepackaged reorganization converted $3 billion of debt into a combination of new debt, convertible stock and equity warrants. Shareholders were totally wiped out during the process, but Lear stock has since skyrocketed, trading a little above $173.72 per share in early morning trading Friday. “Leaving the company at a time when it has a great path, it’s going to be better next year than we did this year, is the right time to leave,” Simoncini said. “The team is stable and experienced. A CEO really should have

ary owner of the business until employees are trained to be owner operators, he said.

Expanded mission The Detroit-based agency’s mission has long been to put people with employment challenges to work. It’s tweaked that, now, to focus on co-creating independence and dignity through the power of personal and workforce development. “Our assumption when somebody gets a job is that they are headed down the path toward independence, dignity, financial security, self esteem and those kinds of things,” Varner said. “But it’s not a given, and sometimes you’ve got provide some additional support in order to make that happen.” Goodwill is developing an employee-retention program modeled after The Source in Grand Rapids, a nonprofit employee support organization. Supported largely through employer contributions, Goodwill’s retention service would help entry-level, low-wage employees overcome barriers they face to keep their jobs. Employers could expect to see a return of more than 200 percent on their investment in the program through reduced employee turnover costs, Varner said. Goodwill is recruiting employers now and plans a formal launch of the program sometime in the first quarter. As it develops new personal and workforce development programs, Goodwill plans to take its programs even further into the suburbs. The nonprofit does a lot of work in Detroit and Oakland County but not as much in Macomb, Livingston and Washtenaw counties. “We’re cognizant of that shift taking place … and we want to be responsive to it,” he said. “We’ve got an obligation to serve those areas just like foundations do.” As it looks to expand its programs, Goodwill is also looking to build a culture of philanthropy, something new for a nonprofit that has long relied on social enterprise to produce revenue in support of its mission. “Goodwills are … really good at soliciting clothing donations. But we’re not great at fundraising; never have been,” Varner said. “We don’t want that to eclipse our core DNA which is that of a social enterprise, but we want to get better at fundraising.”

Agencies form alliance to coordinate workforce development programs By Sherri Welch swelch@crain.com

Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

A group of local workforce development agencies are meeting informally to look for ways to better coordinate the region’s workforce development system. That starts with getting to better know one another and to learn from one another, said Paul Blatt, executive vice president and COO at JVS, one of seven agencies making up the group. The others groups meeting as part of the Workforce Alliance are: ACCESS, Focus: Hope, Goodwill Industries of Greater Detroit, SER-Metro, Southwest Solutions and United Way of Southeastern Michigan. United Way is not a workforce agency, but as a community convener, it brings perspective in terms of where the needs are and where resources are flowing in the community, Blatt said. “We have all respected each other but not looked at how we do (our work) collectively.” Paul Blatt: When you’re Learning from one talking to foundaanother. tions looking to make that large impact on the community, “they want to know the organizations are all working towards the same thing,” he said. Coming together marks a shift for organizations that traditionally have worked independently of one another, despite their common mission of trying to get more people ready for jobs and into stable employment. The Workforce Alliance, as the nonprofits are now calling themselves, gathered for the first time during the Detroit Regional Chamber Policy Conference on Mackinac Island this past summer at the behest of Jeff Donofrio, director of workforce development for the city of Detroit. They decided to continue to meet after that and have convened three times this fall after tight summer schedules loosened up. “We decided to start getting together on our own to start to build our collec-

an opportunity to manage in that environment.” Ray Scott, 52, will replace Simoncini as Lear’s CEO and board member when he formally steps down on Feb. 28. Scott currently serves as an executive vice president and president of Lear’s seating business unit. Scott has served in management roles at Lear since 1988 and is a local, with degrees from University of Michigan and Michigan State University. “The hardest part is leaving this team and this corporation right here in my hometown, but Ray’s the real deal,” Simoncini said. “He’s a product guy, he grew up in operations and worked all around the world. Ray is equipped to run this company in the direction it’s going.” That direction is digital. In 2015, Lear bought the intellectual property and technology of Santa Rosa, Calif.-based Autonet Mobile Inc., an Internet-based telematics and app service provider for the automo-

tive market, and acquired Troy-based automotive connectivity supplier Arada Systems Inc., which supplies vehicle-to-infrastructure technology on roadways, including in the city of Detroit. Lear is also building a plant on part of a massive former manufacturing site in Flint, the first major auto supplier plant built in Flint in three decades. The roughly 33-acre, $29.3 million investment development, on the former home of Buick City, is expected to start production in April and employ about 600 workers when it reaches full production. The Flint plant is Scott’s passion. He’s from Flint, Simoncini said. Simoncini will remain an adviser to Scott following his retirement through the end of the year. The thorn in Simoncini’s side may be that he was never able to open a new plant in the city of Detroit, an idea Lear has kicked around for years. But he’s not pining over it.

Need to know

J Local workforce agencies meeting to improve regional system J Meetings mark shift for nonprofits that have traditionally worked solo J Effort will also build collective voice of workforce agencies

tive voice, a collective plan, to the extent that one can be developed, and to help inform the workforce development efforts of the region,” said Goodwill CEO Dan Varner. There are about 400 organizations in Detroit providing workforce development-services ranging from youth development, work readiness and mental health to literacy and financial literacy services — in a scattershot approach that doesn’t always produce needed results, David Meador, vice chairman and chief administrative officer at DTE Energy Co. and member of the Detroit Workforce Development Board, told Crain’s last year. The workforce development board is a broad coalition of executives and others from the private, nonprofit, education and other sectors. There’s been frustration that there’s no coordination among all of those agencies, Varner said. “Of course we can coordinate them more effectively. It’s not impossible. ... We certainly have the will, and I would argue we have the resources as a community,” he said. The conversations are in an early stage, but one of the things the group is discussing is how to include other workforce agencies in the conversation, Varner said. Discussions about which agency plans to take on or retain which type or types of job training is one thing that could easily emerge from the conversations, he said. But it could also go the other way, with agencies deciding to all go into welding, health care and IT, to spread investment and business exposure risk and share best practices, Varner said. “That’s the kind of thing we’re talking about and evaluating both possibilities to figure out how ... we can collectively be way more effective going forward,” Varner said. “I’m at peace,” he said. “For the first time in my life, I don’t have a plan.” Speculation over Simoncini’s next move has run amok on social media. The popular theory is that he is entertaining a gubernatorial run, a rumor that has been churning for years. Several business and political leaders have urged him to do so, but he’s not taking the bait. “I’m not running for governor. ... I doubt I’ll ever work a ‘job’ again,” he said. “I want to focus on myself, to get back in shape, which is impossible when you’re on the road like I am, and really I look forward to spending time with my wife.” In Simoncini’s Warren warehouse waits the 1979 Lincoln Town Car he drove on his first date with his wife, Mona. He said the car is ugly, but to him it represents something Lear could never offer: Freedom. Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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TAUBMAN FROM PAGE 1

That could even include the eviction of the pioneering mall company’s founding family from their namesake company. For Michael Mazzeo, dean of the School of Business Administration at Oakland University, just the fact that Elliott Management even disclosed its 3.8 percent stake at all when it wasn’t legally obligated to — that’s not required until a 5 percent stake is achieved — is telling. “They are signaling that they are in play,” said Mazzeo, who specializes in mergers and acquisitions. “While it’s not really clear what they are seeking at Taubman, since there are two competing aggressors in this case, that would suggest that this company is undervalued. They may be taken over and then split apart, or they may keep what’s good and sell what’s bad.” Part of the concern about Taubman, which declined comment for this story, has been that its stock prices haven’t reflected its asset performance. The company’s stock has fallen by 21.48 percent in the last 13 months, from $71.17 the day Litt’s takeover bid was revealed in October 2016 to $55.88 on Nov. 15, the day after Elliott Management’s bid was. To be sure, stock prices for other major mall real estate investment trusts have fallen, substantially underperforming the S&P 500, but not as much as Taubman’s, Bloomberg reported. That’s even as the company handily dominates its peers in key performance measurements like sales per square foot; Taubman’s malls have $802, while its nearest competitor, Macerich Co., is $659, according to Bloomberg. “When a company comes in the crosshairs of Elliott and Paul Singer, that company most likely will succumb to Elliott,” Sudip Datta, T. Norris Hitchman endowed chair and professor of finance in the Mike Ilitch School of Business at Wayne State University, said in an email. “He will eventually most likely succeed in this battle, substantially restructure the board and change management. … Taubman may be forced to go private to restructure and then go public again when it gets its act together. There is substantial board and management changes in the cards for Taubman.” Alex Calderone, managing director of Birmingham-based corporate advisory firm Calderone Advisory Group, said Elliott thinks it can do better. “(Elliott has) formulated an investment thesis that assumes shareholder value will increase by shifting control away from the incumbent leadership team … but we don’t yet know what they want,” Calderone said. “Is it something short of (CEO, president and board chairman Robert) Taubman stepping down? Do they want the company sold? It’s too early to tell.”

Beating back outsiders For the last year, Taubman has also been fighting off investor Litt, who has argued that the company’s stock is undervalued compared with the value of its luxury mall assets across the world, as well as its REIT competitors. His recommendations included halting any major external growth initiatives such as new development; exploration of “management-led pri-

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Great Lakes Crossing Outlets in Auburn Hills is among the properties Taubman owns in Michigan.

Robert Taubman: CEO, president, board chairman.

Peter Karmanos: Has resigned from Taubman board.

vatization or a sale of the company to a third party;” selling assets and buying back Taubman stock; monetizing its Asia business in a joint venture, spin-off company or outright sale; and a sale of the Beverly Center in Los Angeles. Gordon said Taubman’s inability to shake Litt has made the ground fertile for Elliott Management. “By not taking the heat off that kettle, by letting Litt keep that kettle boiling, Litt has now attracted Elliott, and that’s a game changer,” Gordon said, adding that he anticipates within a year or two that Elliott will have radically altered Taubman’s board and forced the family to sell off a substantial portion of its ownership stake.” Litt, who was not made available for an interview last week, has also argued that the board is too entrenched and lacks diversity. Since then, Taubman has seated a new board member, Cia Buckley Marakovits, and accepted the resignations of Peter Karmanos Jr. and Graham Allison, who will be replaced by Mayree Clark and Michael Embler. Karmanos did not return a mes-

“This is everyday business for Elliott, and while I think it’s too early to know what this might mean for the Taubman family, the one thing I know for sure is there is going to be one hell of a fight.” — Alex Calderone, managing director of Calderone Advisory Group

Michael Mazzeo: Elliott signaling they are in play.

Jonathan Litt: Attempted takeover bid.

sage last week seeking comment. Litt’s attempt earlier this year to get himself and Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, on the board failed this summer. But where Litt fell short, Gordon says Elliott Management will prevail. “Out of Taubman’s top 10 institutional investors, Elliott’s going to have worked with 10 of them,” he said. “He has the power, the guts and he also has the reputation with them. They listen very carefully when Singer talks.” Taubman, under family control since A. Alfred Taubman started the company in 1950, has withstood outsiders before — in one case, with an assist from Lansing. In 2003, Taubman thwarted a hostile takeover attempt by Simon Property Group, the largest U.S. shopping mall owner, and Westfield America Inc. to buy Taubman for $4.25 billion, or $20 a share. The Taubman family resisted the Simon Property Group/Westfield buyout, a move which was aided by an amendment to Michigan law signed by Gov. Jennifer Granholm on Oct. 7, 2003, that prompted the companies to withdraw their offer the following day. The family maintains control of the company through about 25 million shares of Series B Preferred Stock, which gives it about 30 percent of the shareholder vote. But that control is the subject of Litt’s federal lawsuit, which alleges the family owns 29.3 percent of voting shares, while the charter restricts ownership at 8.23 percent. It’s unclear how many shares each individual family member owns. “I believe that even with Taubman family’s 30 percent ownership, Paul Singer will have a very good chance

Sudip Datta: Singer will most likely succeed.

TAUBMAN CENTERS

Erik Gordon: Singer’s goal is to push companies.

to make the changes to turn around this poorly performing real estate company. My money is on Elliott,” Datta said.

The warship repossession Elliott has a history of high-profile scuffles, some of international magnitude. Elliott spent 15 years trying to wrangle billions from the South American country of Argentina for lapsed debt payments. The tactics Elliott employed included attempts to overtake contracts between the government and Elon Musk’s SpaceX program and the seizure of an Argentine Navy ship pulled into port in Ghana in 2012. The hedge fund convinced a Ghanaian court to seize the three-mast vessel as an avenue to collect on its debt. The maritime court eventually released the ship after two months of court battles. The Argentine government eventually agreed last year to a settlement to pay Elliott $2.4 billion for its bond obligations, The Washington Post reported in March 2016. Elliott had acquired the bonds more than a decade earlier for $117 million. Calderone said right or wrong, Elliott usually gets what it wants. “This situation (at Taubman) is likely to become highly contentious, but Elliott is no stranger to operating in that type of an environment,” Calderone said. “This is everyday business for Elliott, and while I think it’s too early to know what this might mean for the Taubman family, the one thing I know for sure is there is going to be one hell of a fight.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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Businessman Pensler to enter Senate race

Interim RTA CEO leaving for new position

The Regional Transit Authority of Southeast Michigan held off on hiring Tiffany Gunter as full-time CEO for the past eight months, and on Thursday she opted to quit for another job. Her last day will be Jan. 2. She declined to say what her next job will be other than it’s a government position in the area. Gunter, 38, has been interim CEO since Michael Ford was fired in March over questions about his expenses. Her departure comes amid the RTA’s ongoing quest to craft a regional transit plan agreeable to the region’s often-at-loggerheads elected leaders, and then get a tax approved by voters in 2018 or 2020. How her departure will affect those efforts isn’t immediately clear. Deputies for the elected leaders have been holding meetings to work out plans themselves rather than relying on the RTA staff to assemble a master plan. “The direction of RTA is still in negotiations by the regional leaders. Our board really cannot move forward without support of the regional leaders. So, here we are in continued uncertainty. In the meantime, Tiffany got an offer she couldn’t refuse,” RTA Board Chairman Paul Hillegonds said last week. “I’m really sorry we’re losing her.” Carmine Palombo, deputy director at the Southeast Michigan Council of Governments regional planning agency, will act as interim CEO until a replacement is hired, the RTA said. SEMCOG provides the RTA will office space and support.

BUSINESS NEWS J Detroit native and Motor City Match winner Dana White expanded her Paralee Boyd Salon to Detroit on Thursday with the launch of its second salon. The Midtown location at 3939 Woodward Ave. will serve as the beauty parlor’s flagship store as White prepares to take the brand national. J Duo Security Inc. and Llamasoft Inc. were recognized by the Michigan Venture Capital Association for their achievements in Michigan’s entrepreneurial and investment community. Dug Song and Jon Oberheide, founders of Ann Arbor-based Duo Security, were named Entrepreneurs of the Year during the 2017 MVCA Annual Awards Dinner at Little Caesars Arena in Detroit. J JPMorgan Chase & Co. announced that it is giving $900,000 in grants aimed at sustainable infrastructure, as part of the global banking firm’s $150 million committed investment in Detroit. J Pot + Box owner Lisa Waud plans to open her botanical design shop’s first permanent Detroit location in the Fisher Building in New Center next month. Waud has been participating in the building’s Fridays at the Fisher food truck series with the Pot + Box flower truck as she searched for a brick-and-mortar spot. J Plum Market will be the official food service provider for the Detroit Pistons and open a cafe and market featuring Zingerman’s products in its

He po

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

G COBO CENTER

An observation area is planned to allow visitors to Cobo Center in downtown Detroit to view the facility’s living green roof. Officials said installation of the observation area is scheduled sometime next year. The 10,000-square-foot green roof was installed as part of a $279 million renovation of the convention center. It creates a natural habitat for birds and insects. The roof also provides insulation to cool and heat the building.

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

$8.89 million High bid during a three-day online auction that ended and didn’t meet the undisclosed minimum price the owner wanted for the Film Exchange Building in downtown Detroit.

The number of banks Troy-based Flagstar Bancorp Inc. agreed to buy from Pasadena, Calif.-based East West Bancorp Inc.

$1.2 million The bequest Ronald McDonald House Charities-Southeastern Michigan recently found that it had been named the beneficiary of — an amount exceeding the charity’s $1 million budget this year.

new Henry Ford Detroit Pistons Performance Center in the New Center area. The Farmington Hills-based grocer is the first retailer announced for the $65 million facility that is expected to open in 2019. J Livonia-based Trinity Health is combining its St. Joseph Mercy Health System and Mercy Health into one statewide system. The new entity will join the two systems based in the southeast and west parts of Michigan made up of 10 hospitals and about 22,500 employees. J The former University Motel on Second Avenue in Midtown is slated to be turned into micro apartments, a hotel and first-floor retail space. J Troy-based Kirco has created a new commercial real estate business with West Palm Beach, Fla.-based Hedrick Brothers Construction. J Duluth Trading Co. is expanding its Michigan presence with a location opening near Grand Rapids last week and a Wixom store scheduled to open Nov. 30. J Detroit’s three casinos reported higher aggregate revenue in October, down 0.9 percent from September but up 1.7 percent from a year ago, the Michigan Gaming Control Board announced Tuesday. MGM Grand Detroit, MotorCity Casino Hotel and Greektown Casino-Hotel reported aggregate revenue of $112.7 million in October.

J Wayne State University’s new innovation and entrepreneurship hub launched Wednesday. The Wayne Innovation Hub will include expanded programming and certification opportunities. J Plans are moving ahead for a new visitor center and administration building at the Edsel & Eleanor Ford House in Grosse Pointe Shores. The nonprofit-run historic estate broke ground Tuesday on the project. J Under new ownership following a $55 million purchase this summer, the former Troy Officentre has a new name and, soon, new upgrades. It is now named the PentaCentre after its five interconnected buildings. J The Empowerment Plan has found a new home at 7640 Kercheval Ave. between Van Dyke and East Grand Boulevard will provide The Empowerment Plan with space to double its employees.

rosse Pointe Park businessman Sandy Pensler plans to formally enter the U.S. Senate race on Monday. His experience running and advising small and large businesses will be a hallmark of his campaign for the Republican nomination. Pensler, 61, joins Detroit businessman John E. James and former Michigan Supreme Court Chief Justice Robert Young Jr. in seeking the GOP nomination to take on incumbent Democratic Sen. Debbie Stabenow in the November 2018 general election. He is founder and president of Pensler Capital Corp., which operates four manufacturing plants that make dishwasher detergent and household cleaning supplies for major brand name sellers, including the Korex Companies plant in Wixom. Pensler told Crain’s he plans to self-finance his campaign and praised President Donald Trump’s efforts to overhaul the tax code for busineses and renegotiate the North

American Free Trade Agreement. Pensler has been exploring a campaign for the Senate seat since September. Pensler didn’t say how much of his own wealth he Sandy Pensler would spend seeking the Senate seat. But he emphasized self-financing the campaign could be an advantage in competing with Stabenow, who had $6.9 million in cash on hand in her re-election account at the end of September, according to a campaign finance report. “Republicans have been at a disadvantage against Stabenow because they couldn’t effectively finance their message,” Pensler said. “I certainly intend to make sure that we have enough funds available to get our message out to the general public.”

OTHER NEWS J The Detroit Wayne Mental Health Authority board of directors has selected a new president and CEO, after previously picking one who wound up rejecting the job. Joy Calloway was approved for the executive position at the Detroit Wayne prepaid inpatient health plan. J Wayne State University President M. Roy Wilson will serve as board chair of the Association of American Medical Colleges. His one-year term began Nov. 7. J The state’s new Flex Route system on U.S. 23 near Ann Arbor began operations this morning. The Michigan Department of Transportation opened the special lanes for the first time in an attempt to ease traffic congestion caused by rush hour or crashes. J Shri Thanedar, a Democratic candidate for governor and Ann Arbor businessman, has been sued by the buyer of his former company, alleging he misrepresented the business’ finances leading up to the sale. J Detroit City Council postponed a vote on the land swap agreement that would put Wayne County in better position to forge a deal with Dan Gilbert for the Wayne County Consolidated Jail site on Gratiot Avenue. Citing the need for more review and details, City Council tabled the vote until this week.

OBITUARY J Prominent metro Detroit architect Irving Tobocman was killed in a car accident Friday in Bloomfield Township, police said. He was 84.

KURT NAGL/CRAIN’S DETROIT BUSINESS

Cadillac Square is set to host some of the more than 30 vendors operating in Downtown Detroit Markets this season.

Markets transform Detroit into holiday hub

ore than 30 small businesses are popping up in downtown Detroit for winter holiday markets in an initiative that decorates the city center and brings in a variety of retailers to boost the city’s core. The Quicken Loans family of companies doubled its investment in this year’s Downtown Detroit Market to create a holiday hub. “The goal was to make sure this was the longest season possible for people to enjoy,” said Helen Davis Johnson, vice president of strategic investments for Rock Ventures LLC, one of the Dan Gilbert-owned companies. Johnson said planning for the project began in July and set up started last Friday. She said the markets and garnishments — at Spirit Plaza, Capitol Park, Cadillac Square, 1001 Woodward Ave. and along Woodward Avenue — will be finished just in time for Detroit’s tree lighting ceremony Friday evening. The markets run through Jan. 7. She did not disclose how much money Quicken Loans invested in the markets.

More than 30 entrepreneurs, 20 of which are based in Detroit, have popups at the market. Tee Capel, 33, who runs an online fashion business called Fly Behavior, said presence at the market will increase her brand’s exposure. “The market is allowing me to tap into the new, vibrant energy of downtown and giving me the opportunity to connect person-to-person with my customers,” she said. The market includes retailers selling everything from clothing and accessories to ornaments and real Christmas trees: Greystone Gardens is selling Michigan-grown firs in Capitol Park for $20-$100. For $1,000, the vendors get a 130-square-foot glass booth with electrical, some lighting, heaters and security, the application details said. Indoor market booths ran $500$1,000. Market hours are 11 a.m.-7 p.m. Monday-Thursday; 11 a.m.-8 p.m. Friday and Saturday and noon-5 p.m. Sunday. It will be closed Thanksgiving and Christmas days.

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AUTO SHOW GUIDE

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STOP GIVING

REACH UP TO 674,615 LOCAL AND INTERNATIONAL BUSINESS LEADERS AND INDUSTRY INSIDERS AD CLOSE: NOV. 27 Distributed to Auto Show attendees the week of Jan. 14

Showcase your brand or services in these guides by contacting Lisa Rudy at lrudy@crain.com or (313) 446-6032.

Crain’s 20 in their Twenties celebrates young professionals who are making waves within their company, have shown success or originality as an entrepreneur or have made a positive and noteworthy impact in their community.

Think you have what it takes to join this elite group?

Nominations are NOW OPEN for Crain’s 2018 20 in their Twenties.

Stay tuned for 40 under Forty nominations opening by Dec. 1.

CRAIN’S

For more information and to submit a nomination visit, crainsdetroit.com/nominate

IN THEIR

TWENTIES

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