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

DECEMBER 4 - 10, 2017

What keeps Jim Sawyer up at night?

Tax reform bill could hit credits key to Detroit redevelopment

Page 4

New Markets, Historic tax credits on block. Page 3

Autos and mobility

Changing auto industry will require a new toolbox

Real Estate

Nonprofits

Foundation, TechTown to collaborate on innovation center

By Dustin Walsh dwalsh@crain.com

For more than a century, Southeast Michigan’s cultural identity was defined by calloused hands and brute force shaping steel. But as its primary industry perches on the edge of a drastic technological disruption, metro Detroit’s long-touted mechanical engineering prowess is no longer enough, experts say. The autonomous and connected future is going to require a new set of tools. The open job postings for local manufacturers look more like a uni-

MichAuto Summit 2017 Dates: Dec. 5: 5 p.m. reception at the Ford Piquette Avenue plant in Detroit. Dec. 6: Main programming starts at 9:30 a.m. at the College for Creative Studies Topics: Workforce of the future; Innovation; Diversity and inclusion; Human capital Cost: $150 for Detroit Regional Chamber members; $200 for non-members Register: detroitchamber.com

versity course catalog than the factory and engineering careers of generations past. Toyota hires anthropologists at its North American Technical Center near Ann Arbor. Ford Motor hires brainy graduates of artificial intelligence programs at its Dearborn headquarters. The industry is changing and so must its culture — and fast. “We have to raise the stakes and kick this into an accelerated drive,” said Glenn Stevens, executive director of MichAuto and vice president of automotive and mobility initiatives at the Detroit Regional Chamber. “As the shop floor continues to change, as the convergence of auto and tech coalesces, we have to ask ourselves what are we doing to make sure we’re attracting, retaining and creating talent. Our economic future depends on it.” SEE AUTOS, PAGE 20

crainsdetroit.com

By Sherri Welch swelch@crain.com

The Ralph C. Wilson Jr. Foundation is looking to fill a gaping hole in metro Detroit’s support system for nonprofits — and it’s turning to some experts in entrepreneurial cross-pollination to help. The foundation is putting more than $5 million in grants over the next few years behind what could be a first-of-its-kind nonprofit support

WHEN GIANTS CLIMBED THE SKYLINE

 Wilson Foundation investing over $5 million to develop nonprofit support and innovation center  Center is set to open next year with walk-in services and more advanced services piloted with foundation’s grantees  Center to be operated by TechTown

new office tenants. Others haven’t seen as much investment, but remain key players in the market. Bigger hasn’t always meant better from a business standpoint. Some of them have gone through serious challenges over the years — generally long after they were no longer the city’s tallest building — including foreclosures, legal battles and even demolition threats.

and innovation center. To run it, the foundation has tapped the TechTown business incubator in Detroit to transfer the supportive approach and collaborative, innovative environment it’s created for entrepreneurs to the region’s nonprofits. That funding is just the tip of the $1 billion foundation’s planned commitment to nonprofit support and innovation. While there are many consultants and organizations offering various capacity-building and operating supports for nonprofits, there’s no coordinated system of them in the region, the foundation found after a yearlong study. Just as importantly, there’s no local, dedicated space for nonprofits to innovate together. “It’s not an uncommon notion that nonprofits don’t have the greatest support mechanisms in the world,” said Dave Egner, president and CEO of the Wilson foundation.

SEE BUILDINGS, PAGE 20

SEE INNOVATION, PAGE 17

BURTON HISTORICAL COLLECTION, DETROIT PUBLIC LIBRARY

View of the Book Building on Washington Boulevard. The 1926 office building was designed by Louis Kamper.

Building tall doesn’t come without business bumps By Kirk Pinho kpinho@crain.com

Inside

In the skyscraper era, seven Detroit buildings have laid claim to the title of being the city’s tallest, some briefly, others for decades. The city is now inching toward adding an eighth building to that list as Dan Gilbert nears a planned Dec. 14 groundbreaking ceremony for the 800-foot residential tower on the site of the former J.L. Hudson’s depart-

ment store on Woodward Avenue. As the city’s downtown office and residential market continues to see progress marked by declining vacancy rates and increasing rents, some of those buildings have been renovated in the last 10 years and filled with

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 A graphic look at Detroit’s tallest buildings through the years. Page 20

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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 // D E C E M B E R 4 , 2 0 1 7

MICHIGAN BRIEFS

INSIDE

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

Michigan, Enbridge reach pipeline deal

Gov. Rick Snyder and Canadian oil transport company Enbridge Inc. announced a deal last Monday intended to boost the safety of twin oil pipelines beneath the Straits of Mackinac while they gather information needed to make a decision on the pipelines’ future by mid-August. The agreement does not call for the decommissioning of Line 5 as environmental groups have demanded, but it does include a procedure for temporarily halting the flow of oil through the 5-mile-long underwater segment in the straits when storms cause sustained bad weather. “It’s been a challenging and troubling situation for some time,” Snyder told reporters. He said the goal of the agreement with Enbridge is to be transparent and proactive while setting milestones that can measure progress. “The Great Lakes are one of the great treasures of the world, not just for Michigan,” Snyder said. “... I believe we have Enbridge’s attention and their commitment to move forward in a constructive way to address this issue.” State personnel will work with Enbridge as it implements technology to help detect leaks and speed up re-

sponses to spills, according to the deal. It requires studies of new technology and safer alternatives to the current pipeline setup. Enbridge and the state will examine the possibility of digging a tunnel beneath the Straits of Mackinac through which the existing pipelines — or a new one — could be routed. The agreement isn’t a final decision on whether the state will seek to completely shut down the pipeline, but that option is “still on the table,” Michigan Association for Energy Executive Director Valerie Brader said on a media conference call. “The state believes we have a lot of information to get to understand the risk” the pipelines pose and which alternatives are feasible, Brader said.

Calley announces run for governor

Lt. Gov. Brian Calley will seek a promotion to governor next year, launching his long-expected candidacy last Tuesday and vowing to continue an economic rebound that has resulted in the addition of more than a half million jobs in Michigan, the Associated Press reported. Calley has been rumored to be mulling a gubernatorial bid for months, since he unveiled a ballot initiative to create a part-time Legislature, among other things, at the Detroit Regional Chamber’s Mackinac Policy Conference in the spring,

MICHIGAN CHRISTMAS TREE ASSOCIATION

Despite a national shortage of Christmas trees, as the third largest producer in the country, Michigan still has plenty of inventory and effects should be minimal.

Crain’s reported. Calley also has held town hall meetings with Michigan residents around the state in recent months, further fueling speculation about a campaign. Snyder and Calley had assembled reporters last Monday in Detroit to talk about Michigan’s comeback. They both cited Michigan’s improving job climate, lower unemployment rate and tax reform among their administration’s accomplishments. Attorney General Bill Schuette is considered the front-runner for the Republican nomination for governor. Schuette is running on a platform

that he will be Michigan’s “jobs governor.” “Michigan's already winning,” Snyder told reporters, in response to a question about Schuette’s candidacy. The question is how to build on the foundation without becoming complacent, he added, so “it’s important that we look to great leadership, people that have experience and success in doing that.”

Christmas tree shortage to be felt slightly in Michigan

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so-merry Great Recession 10 years ago, growers were left with a shortage of trees this season that could drive up prices of the holiday essential. In 2008, there was a surplus of trees but a lot fewer people buying them due to the depressed economy, said Amy Start, 49, executive director of the Michigan Christmas Tree Association. As a result, growers planted fewer trees. As a tree’s cycle from seedling to living room is about 10 years, fallout from fewer trees has not been felt until now. The good news is that as the third-largest Christmas tree producer in the country, Michigan still has plenty of inventory and effects will be minimal, Start said. Prices in the state might rise, but only by a couple of dollars, Start said. The shortage will have more of an impact on southern states that rely on Christmas tree shipments from Michigan, Oregon, Pennsylvania and elsewhere.

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

Transportation

MDOT I-375 study backs boulevard plans By Annalise Frank afrank@crain.com

The Michigan Department of Transportation’s study of I-375 reimagines the freeway as a boulevard connecting I-75 with Detroit’s central business district and waterfront. The department chose to move forward with two “practical alternatives” to the current highway setup, which has degraded and no longer meets the needs of a city with a newly bustling downtown area, said Jonathan Loree, a senior project manager for MDOT. MDOT and city of Detroit planning

Need to know

MDOT study backs boulevard ideas to replace I-375 J

J To release environmental assessment for comment in spring J

Construction could start in 2022

officials will present the two leading ideas to the public Tuesday at the Michigan Department of Natural Resources Outdoor Adventure Center. They are seeking feedback for an environmental assessment that is underway and expected to be released this

spring with assistance from the Federal Highway Administration, Loree said. The two alternatives call for transitioning the four-lane freeway, which is about 20 feet deep, into a surface-level boulevard from south of Gratiot Avenue to Atwater Street near the riverfront. The city became involved as it looked for ways to fulfill a major goal: connecting nearby neighborhoods to the riverfront, said Steve Lewis, urban design director for the central region in the city’s Planning and Development Department. SEE I-375, PAGE 19

CRAIN’S DETROIT BUSINESS

The Michigan Department of Transportation’s study of I-375 in Detroit reimagines the freeway as a boulevard.

Nonprofits

Legislation

Children’s Hospital foundation shifts strategy By Sherri Welch swelch@crain.com

The various tax credits have been credited with helping fuel revitalization in Detroit in recent years, serving as financing tools in the renovation of several historic buildings. “The current tax bill would be a complete disaster for community development finance, particularly in cities like Detroit,” said Aaron Seybert, social investment officer at The Kresge Foundation and a former JPMorgan Chase Bank community development investment banker.

Six years after taking control of $90 million in charitable assets from its namesake hospital, Children’s Hospital of Michigan Foundation has figured out what it wants to be: the state’s top advocate for children. The foundation is expanding its grants to nonprofits operating children’s programs, and it is extend- Need ing its pediatric to know research grants JJChildren’s well beyond re- Hospital of search at its Michigan namesake hos- Foundation aims pital and Wayne to become state’s State University leading children’s in Detroit to advocacy organizaprojects at other tion u n i v e r s i t i e s JJExpanding around the state grants to operating and even out- nonprofits, more side Michigan research where it aligns universities and with the founda- groups tion’s focus arJJMoves aimed at eas. It’s moving increasing the $119 into a statewide million foundaadvocacy role tion’s impact and expanding to become a community foundation for children, administering funds for donors and other nonprofits, rather than just making grants from its own assets. The new strategies are a big shift for the foundation that began as the fundraising arm of DMC Children’s Hospital of Michigan when it operated as part of the nonprofit Detroit Medical Center.

SEE TAXES, PAGE 21

SEE STRATEGY, PAGE 18

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

The former Colony Arms Apartments on East Jefferson Avenue underwent $25 million in renovations in recent years, $10 million of which was subsidized by the federal low-income and historic preservation tax credits. The 161-unit historic apartment building is now called River Crest Apartments.

Tax reform could hit Detroit redevelopment By Chad Livengood

Need to know

In November 2013, just four months into Detroit’s bankruptcy, law enforcement agencies raided the long-troubled Colony Arms Apartment on Jefferson Avenue, arresting 33 tenants who were wanted for a litany of crimes. The headline-grabbing raid came as city officials were pushing for redevelopment of the 161-unit apartment complex that Detroit Police Chief James Craig said had become a hot bed for drug and criminal activity. Cinnaire Corp., a Lansing-based housing development firm, bought the property and spent $25 million on renovations that were completed in January of this year. Cinnaire renamed the 93-year-old complex River Crest Apartments. About $10 million of the renovation cost was subsidized by historic reha-

Detroit will be cut

clivengood@crain.com

“The current tax bill would be a complete disaster for community development finance, particularly in cities like Detroit.”

JJTax credits that fueled revitalization in

JJWiping out low-income housing, historic tax credits will leave fewer financing options

Aaron Seybert

JJFinanciers, housing developers say pace of development will slow

bilitation and low-income housing tax credits — federal incentives Congress may chop as lawmakers debate a massive overhaul of the U.S. tax code with the goal of lowering rates on corporations and individuals. If the current versions of tax reform circulating in Congress make it to President Donald Trump’s desk, the pace of redevelopment in Detroit is likely to slow. And financiers and housing developers in Detroit who specialize in taxpayer-subsidized housing and leveraging real estate in-

vestment with federal tax credits are bracing for the impact to their businesses. The House and Senate’s competing bills both would wipe out the New Markets tax credits, and while the House bill would eliminate the historic tax credits entirely, the Senate’s bill would cut them in half, from 20 percent to 10 percent. The House also favors ending one of the two tax credit programs available for subsidizing the construction cost of low-rent housing for people living in poverty.

MUST READS OF THE WEEK Detroit Rising

Boardroom inroads

Chad Livengood: Detroit’s restaurants struggle with worker retention. Page 6

Deloitte program aims to help women executives ready to serve on boards. Page 22

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

WHAT KEEPS YOU UP AT NIGHT?

One man’s ‘failure’ is this college’s success

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Jim Sawyer says he’s a failure. Sawyer is president of Macomb Community College, a mechanical engineer who held leadership positions at several Michigan companies before joining the school 17 years ago, a former dean of engineering and advanced technology and provost who took over at MCC in July. He’s a huge success, thanks in part to professional development coursework Sawyer took at Macomb Community College during two different stages of his private-secRON tor career. But there’s a hitch. FOURNIER “By the traditional college definition,” he said, “I was a failure twice.” How could that be? “Because I came, I took a class and I disappeared. That is a failure,” he told me during an interview at the college’s campus in Warren. “We get measured by how many students come to the college for the first time, attend full-time, and earn a degree in three years. That is about 3 percent of our population.” Sawyer said the antiquated way community colleges are measured conflicts with their missions, which is to prepare students for the 21st century workforce and help employers fill the 21st century talent gap. He’s working on a new metrics for MCC, one that aligns with the students’ needs and adapts as their goals change. That’s not all that’s on his mind. (Our conversation was edited for length and context.) What keeps you up at night as the leader of this institution?

I think for me there’s two things. One is the challenge of really trying to help our students be successful, given the wide array of needs that they have and their expectations when they come here. [T]he other thing that keeps me up at night is safety. In today’s society, it is something to worry about. We have large, open campuses. We have an outstanding police force. We have very safe campuses, but you just don’t know in today’s society. So let’s go back to the first part: Is the challenge of serving a wide array of students particular to a president of a community college?

Yes, I think it is particularly unique to community colleges because of our open-access mission. Higher education is a challenge on all fronts and I get that, but the students of the University of Michigan are pretty darn well prepared, and they are high achievers before they walk in the door, so they are just a different type of student. The level of academic preparedness and the variety is the biggest challenge here, because we have valedictorians from local schools coming in, and they are sitting in classes with students who have much greater academic challenges, but you have to engage all those students in your classes. That’s a pretty challenging task for our faculty. I give our faculty a lot of credit for being able to do that effectively and making sure everyone gets a rich learning experience because you can’t … water down the curriculum. What do you want Crain’s readers to know about this institution?

The big thing for us is our workforce development effort. Tell me about that.

Hear from the biggest names in news who made waves and headlines in 2017. Stay up to date on Crain’s events, visit crainsdetroit.com/events

It is something we are very proud of at Macomb and we really are a national leader when it comes to workforce education. Can I stop you right there? What do you mean you’re nationally known?

The Sawyer File Age: 54 Education: Bachelor’s in mechanical engineering, Lawrence Technological University; master’s in administration and doctorate of educational leadership from Central Michigan University. Mentor: Dr. Don Ritzenhein, retired professor at Eastern Michigan University, former provost at Macomb Community College. Biggest achievement: Finding a career that brings personal satisfaction by transforming lives. First job: Cook at The Gathering Place in Troy. Life goal: To love and support those closest to me while helping others live fulfilling lives.

How do you back that up?

We are very involved in presenting at national conferences, people look to us as a leader and (want to know) what we are doing. They follow what we do, and we have had other colleges come and visit us specifically to talk about workforce development. Why?

I think it is our ability to prepare people for jobs right away, but also more importantly, to try and prepare them for the future. We don’t look at workforce education as a task. It is part of our continuum. We want to train people to get a job right away, but we want to see them back here and we want to see them pursue a certificate or maybe pursue an associate’s degree. Hopefully, they ultimately pursue a bachelor’s degree — and we carve out those partnerships. We are working with our university partners. That is our responsibility: to try and create those pathways for students. They have to do the work, but our perfect scenario is a student may come here and take a 12-week welding class or training class 40 hours a week for 12 weeks and they get prepared and they go out and get a job, so that’s great. This person who was unemployed or underemployed has now got a job and they are supporting themselves, their families, they’re adding to that economic vitality of the community. That is all well and good, but we want to see that person come back and take an (advanced) welding class. Finish off the perfect scenario, he or she comes here and does their 12-week class and gets a job, comes back and takes other classes and does that until ...

They get a degree.

How are you filling the “talent gap,” a problem mentioned by almost every employer who reads Crain’s?

We are very closely aligned with our employers. We have always had a relationship with employers at Macomb through our occupational programs, but over the last 10 years we have really done a much better job of connecting employers with employee training.

Where do you hope this institution will be five years from now? Everything is changing so much in the economy and in academia.

It’s hard to predict, but I see us being an indispensable part of educating society. You told me about how you “failed” twice here as a student, even as you got exactly what you needed from the school. That raises a question about how success should be measured for a community college.

It’s very complex and it’s not an easy thing to do, but we have to get there. We need to measure our success based on how we help a student meet his or her educational goal, whatever that goal might be. If it’s earning a bachelor’s degree, our success should be earning your bachelor’s degree. If it’s to get them an associate’s degree, then that’s fine. If it’s to get a job, that’s fine. If it’s just a couple of professional development courses like you took here …?

If that is what you are after, then we will help you do that. To summarize: Macomb Community College has failed you twice and you got everything out of the school that you wanted, and now you are the president.

Yes. And I couldn’t be happier.

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

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Scott Lowell, owner of Traffic Jam & Snug (from left), and Detroit Restaurant Association Director Herasanna Richards talk to Crain’s Senior Reporter Chad Livengood about issues facing the city’s dining and hospitality industry on the “Detroit Rising” podcast at Narrow Way Cafe in Detroit.

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City’s restaurants struggle with worker retention The steady of stream of new restaurants and bars that have opened in greater downtown Detroit in recent years has created a strain on the worker pool for some longtime dining establishments. Scott Lowell, owner of Traffic Jam & Snug, a 52-year-old institution in Midtown, said retaining talented cooks and dependable wait staff is his No. 1 challenge these days at his restaurant at West Canfield Street and Second Avenue. “Certainly the new (Little Caesars) arena opening has created a big vacuum for labor, restaurant labor, and it’s noticed,” Lowell said in an interview on the Crain’s “Detroit Rising” podcast. “Getting talented people and keeping them is certainly a challenge.” The recently reconstituted Detroit Restaurant Association is focusing its early advocacy efforts for members on addressing the talent shortage, which is not unique to the hospitality industry. Herasanna Richards, director of the restaurant group, said they’re working with community-based job training organizations to “create a stronger pipeline” for talent to fill jobs in restaurants. “We’re trying to work really hard to find pathways for members to find that good talent that hopefully will stay with them and grow with them,” Richards said on the podcast, which was recorded at Narrow Way Cafe at 19331 Livernois Ave. One of the biggest challenges for filling restaurant jobs in Detroit is reliable transportation for workers, Lowell said.

CHAD LIVENGOOD clivengood@crain.com

‘Detroit Rising’ “Detroit Rising” is a weekly Crain’s podcast on businesses, entrepreneurship and economic and workforce development in Detroit that is broadcast each Monday at approximately 12:42 p.m. on “Business Rap” on 92.1 FM (WQTX) in Lansing and is published at crainsdetroit.com/ DetroitRising on Tuesdays. You can also listen to all our podcasts by subscribing on iTunes, Apple Podcasts or anywhere else you get your podcasts.

Detroit’s patchwork of public transportation is often unreliable late at night after restaurants and bars close. “Certainly we’d like to see public transit a little more conducive for people’s schedules,” Lowell said. “I can’t tell you how many times either myself or my wife have taken someone up to a bus stop or driven them home because it’s in the crappy, poorly lit section and there’s no reason a single woman should be sitting there at 10:30 at night." If you’ve got a story idea to feature on the podcast, email clivengood@crain. com or call (313) 446-1654.

American Axle co-founder commits $10M to WSU program Mort Harris, co-founder of auto industry supplier American Axle & Manufacturing Inc., has committed $10 million toward a program that offers high school Mort Harris: students full Commits $10M to scholarships to WSU Wayne State University and its School of Medicine. The Wayne Med-Direct program,

which was announced in October 2015, recruits students with a passion for addressing health disparities, simultaneously admitting them into an undergraduate program and the medical school. Harris’ gift creates a fund that will provide permanent support for Wayne Med-Direct students, who will be known as Mort Harris Med-Direct Scholars. The entrepreneur and philanthropist’s gifts to Wayne State now total more than $17 million. — Associated Press

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Host Larry Burns, President and CEO, Children’s Hospital of Michigan Foundation About this report: On his monthly radio program, Children’s Hospital of Michigan Foundation President and CEO Larry Burns talks to community, government and business leaders about issues related to children’s health and wellness in Michigan. The hourlong show airs at 7 p.m. the fourth Tuesday of each month on WJR 760AM. Here’s a summary of the Nov. 28 show; listen to the entire episode, and archived episodes, at chmfoundation.org/caringforkids

CARING FOR KIDS

How neighborhood development, NAIAS and zebrafish are helping children Peter Cummings, Principal, The Platform, a Detroit-based venture focused on new housing and retail developments. The Platform owns the Fisher Building, home of Children’s Hospital of Michigan Foundation.

Ryan LaFontaine of LaFontaine Automotive Group is Chairman of the 2018 North American International Auto Show. After battling Hodgkin Lymphoma in 2008, he created his own nonprofit, U Can-Cer Vive Foundation.

Nick Consiglio is President of Kids Without Cancer, launched about 35 years ago when his best friend’s son died of cancer. It is the largest funder of pediatric cancer research at Children’s Hospital of Michigan.

Larry Burns: There are so many projects The Platform is involved in. We looked across Third Street (from our view at the Fisher Building) and saw your development that is going there. Can you talk about that? Peter Cummings: It has been known as Third and Grand. It consists of 231 apartments over 17,000 square feet of retail. The residential and the retail embrace a 330-car parking structure. So, when we think of the number of people who work within a three-block radius of this location, we are going to be able to give a lot of people an opportunity to live and work in this neighborhood and reduce the dependency on the automobile.

Larry Burns: Tell us about the role you have with the Detroit Auto Dealers Association. Ryan LaFontaine: I have the honor of being the chairman of the North American International Auto Show and the past president of the DADA, and it’s been a fun ride. We’ll take the stage the night of the Charity Preview and hopefully announce that we’ve raised over $5 million for children’s charities. Children’s Hospital of Michigan Foundation is one of the benefitting charities.

Larry Burns: Kids Without Cancer has raised more than $4.5 million for cancer research at Children’s Hospital. The work of your organization is amazing. Tell us about the mission and what you’re accomplishing with the funds that you raise. Nick Consiglio: Our mission is singular: We are attempting to find a cure, and the only way to find a cure is through research. Our mission is to fund cutting-edge research here at Children’s Hospital of Michigan and Wayne State University.

much as we can of the other 95 percent. We are in a lot of different neighborhoods and we are focused on affordable housing. Our belief is that this recovery is only sustainable to the extent that it is inclusive, and to be inclusive we need to go out to neighborhoods that haven’t had a Burns: I know many of the projects you are involved with lot of attention. are mixed communities with Burns: What is your vision individuals of different backof where you see The Platgrounds. Is that part of what form and Detroit in 10 years? The Platform is trying to do, Cummings: In 10 years I see to take the great diversity of Detroit and create communi- Detroit still in the early stages ties and environments where of a remarkable renaissance. What it ultimately tracks we can all live together? Cummings: Yes, that is very back to is intellectual capital. Communities are only as much part of our mission. We believe that great work is powerful as the intellectual capital that resides in that being done by Dan Gilbert and the Ilitches in the central community — either talent that we create ourselves or business district and in the organically generate within sports and entertainment the community. district. We wouldn’t be Ten years out Detroit where we are without those should be a healthy, thriving two forces in the city. city where design has had a But more than 95 percent powerful impact. Also, Deof the reinvestment money troit should be a place where that has been put into the we’re slowly narrowing the resurgence of Detroit has gap of income and equality, found its way to less than 5 which is probably the greatest percent of its footprint. The problem our country faces. Platform exists to address as SPONSORED BY:

CaringForKidsNOVEMBER.indd 1

Burns: We are extremely grateful for that. Is the purpose of the Charity Preview to support children’s events and activities? LaFontaine: We try to give back as much as we can and focus on the children. Recently the DADA Charitable Foundation awarded $534,000 to diverse groups and a lot of them focus on the children’s charities; that is kind of the sweet spot for our giving. It has been our focus and passion for many years. Burns: The Charity Preview is a highlight of many people’s social calendar. Is there anything special you want to mention about the 2018 Charity Preview? LaFontaine: It is such a great night and it raises so much money for our community. For those who haven’t been there it is an action-packed night full of glitz, glamour and giving. People come from all around Michigan and other states and support it, and I think

it’s because it’s going right back into these charities. Amidst all the shiny cars, gowns, tuxedos and everyone having a great time, the focus is really the charity part of it and giving back to so many local children in need. Burns: You mentioned the black tie, and this year, the Children’s Hospital of Michigan Foundation is launching a new bow tie for people to purchase, and the proceeds of that bow tie go toward pediatric cancer research at Children’s Hospital. How is your charity, U Can-CerVive, doing? LaFontaine: We’ve been very blessed. We’ve had two main events this year and net raised over $500,000, giving back to all the local hospitals and researchers right here. I’m nine years now a cancer survivor and just want to pay it forward as much as I can. Our goal is to net raise a million a year and keep it local at great hospitals like yours and try to find a cure for all forms of cancer.

Burns: Kids without cancer was founded in 1981 when survival rates for children with cancer was probably 50 percent. Today the average survival rate is near 80 percent. What do these types of statistics mean to you? Consiglio: It is exciting that we know we are making a difference and that all the fundraising efforts we made are paying off. We need to continue this if we are going to reach 100 percent survival rate. Burns: Not too long ago I had the privilege of standing next to you and we cut a ribbon for a new research lab at Wayne State University. This is a unique lab. Consiglio: This is our very first endeavor to fund our own lab after 36 years of fundraising. We call the lab the Kids Without Cancer Research Initiative. The lab uses zebra fish as specimens. The lab can run six research projects

at the same time. We have one project going. We are encouraging others to come forward and start their own projects. Burns: The physicians and the researchers are relatively young, and it is nice to see the future of research here in Detroit so stable and that it is going to be with us a long time. Consiglio: We are excited to have these researchers here in town. They were recruited to do a job that we think is essential; that’s why we committed more than $400,000 for research over the next 10 years. Burns: What’s coming up for Kids Without Cancer? Consiglio: We’re preparing for our 36th annual Evening of Hope dance March 10, 2018 at the new Little Caesars Arena. Also, we’re excited to be partners with Children’s Hospital of Michigan Foundation; it’s been a great conduit to get our funds to the researchers.

11/29/17 11:43 AM

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OPINION

COMMENTARY

And it’s only just begun L ast week, in an announcement that did not surprise anyone, our lieutenant governor announced that he was joining the fray to become our next governor. I haven’t been keeping score, but like the Kentucky Derby, the field is slowly filling up, and it is still a year away. I have no doubt that in the coming months, we will see several more additions to the field, so that whatever your politics may be, there will be a candidate for you. I make no bones that I, along with thousands of others, am wishing for Candice Miller to enter the race after she cleans up the mess in Macomb County. And we always wonder if attorney Geoffrey Fieger will run again. That entry would certainly entertain some voters. At some point soon, we at Crain's will sort through the candidates, their positions on the business of governing and how they see their role if elected. I have to admit, our present governor was crystal-clear in his ideas about business and how state government should act regarding business in Michigan. He told us in no uncertain terms what the role of the governor should be, and he kept to it. He has worked hard to improve the business climate of

KEITH CRAIN Editor-in-chief

our state. With a year to go, he has kept his word. And in spite of the occasional misstep from our Legislature, we have generally seen state government work hard to improve the business climate. There are plenty of government bodies that impact business, starting at the most local and going up to the federal government; each one has an impact on our business in varying degrees. State government might have the biggest impact. It is going to be a crowded field, and I am sure we will see some more notable entries — and some less notable ones, just to keep the games interesting. It is going to be an expensive proposition to run. Chances are that it will be pretty messy as well. It always seems to end up that way. Still, we never lack for candidates.

TALK ON THE WEB

Re: Wayne County won’t finish jail

The City and County should be so thankful to Mr. (Dan) Gilbert, it appears that he will be bailing taxpayers out of a financial disaster.

It is a shame that the politicians and other folks who are responsible for this debacle will not be held accountable for exposing the citizens of Wayne County and the City of Detroit to potential financial ruin. Bill Martin

Time to be honest on challenges of unfunded pension liabilities A s the chief administrative officer and manager of the city of Port Huron, I oversee 52 police and 33 firefighters, as well as 220 full-time public employees and 369 pension beneficiaries. That’s why I’m concerned about Michigan’s unfunded pension liabilities. In Port Huron, our unfunded pension liability is $71 million and our unfunded liability for other post-employment benefits is $48 million. However, we have worked with our local partners and collective bargaining units to reform our system and have made significant progress. Our unions are our partners and are working with us. But when I think of Michigan’s unfunded liabilities, I don’t merely think of this problem in terms of abstract actuarial or mathematical terms, I think of faces and names and families, good-hearted citizens whom I see at our city’s coffee shops, restaurants and community gathering places each day. And supporting reforms is supporting public workers and police and fire. Should we just stand idly by and allow these pension and healthcare systems across the state go bankrupt? Should we stand by and do nothing and put at risk the benefits so many families rely on? Indeed, no. We must support our public employees. We must also work to ensure we keep the promises made to those who have served our citizens with honor and integrity, often in the most difficult of circumstances. They put their lives on the line to protect us, and that’s why we must keep our word to them. To do this, we must be honest

and true to the challenges we face. Hiding, masking or downplaying the challenge of unfunded liabilities is a slap in the face to those public servants and their families who rely on those benefits to survive. Communities such as Hamtramck did that for years. Then one day those public servants and retirees woke up to learn that their health care benefits were slashed. In Detroit, men and women who worked their entire lives awoke one day to slashed pension and health care benefits. That’s immoral and unethical. These types of stories can be found across our state, and it’s a black eye on all Michiganders. Inaction and indecision will

ergy solutions, without arbitrary technology mandates, will support affordability for our customers. Solar generation will play an increasing role over time as it becomes more economically viable. DTE has 13 wind parks and 31 solar arrays in our renewable energy portfolio, including the Lapeer solar park, which came online in May and is the largest in the state with 200,000 panels spread over 250 acres, generating enough clean energy to power 11,000 homes. And DTE has more wind and solar projects in the works. Stanfield’s claim that DTE plans to “delay more renewable energy for Michigan until after 2025” is simply untrue. Next year, DTE will break ground on our largest wind park to date and celebrate the commissioning of one of the largest urban solar arrays in the country, Detroit’s O’Shea Park. We also are finalizing plans for another

even larger and less expensive wind project in 2019. Milestones such as these will help DTE achieve our stated goal of reducing carbon emissions by 80 percent by 2050. Additionally, DTE recently began offering a voluntary renewable energy program for all customers. Called MIGreenPower, the average residential customer can elect to increase the amount of renewable energy they use from wind and solar farms in 5 percent increments, up to 100 percent. An average residential customer can achieve 100 percent renewable energy for less than $25 a month. In just a few short months, more than 1,000 customers have enrolled in MIGreenPower. This is evidence that a voluntary, unsubsidized renewable program can deliver significant value to customers without the subsidies and mandates advocated by Stanfield.

OTHER VOICES James Freed

Should we just stand idly by and allow these pension and healthcare systems across the state go bankrupt? Should we stand by and do nothing and put at risk the benefits so many families rely on?

have devastating effects on current public servants and retirees. But the next generation of Michiganders will pay a significant toll as well. Instead of our children and grandchildren using their talents and treasures to build a more hopeful and brighter future, they will pay off the unsettled debts and unkept promises made by the last generation. We must come together today to put mechanisms in place to identify troubled communities early on. We must develop standardized assumptions and realistic expectations in pension and OPEB valuations that communities use to budget and plan for the future. And when we identify troubled communities, we should give local leaders and local bargaining groups the resources and time to develop a plan of action to ensure their obligations are solvent and the promises being made can be kept. That’s what the current package of reform bills in the House and Senate are attempting to do. For those rare circumstances where the troubled communities fail to protect and fund the promises being made, the state should have the ability to intervene, before more workers, retirees and their families sustain more harm. We as a state and Michiganders must act, to keep our promises and to protect the next generation. Supporting reform isn’t anti-worker or anti-police and fire. It’s not disrespectful; doing nothing to secure their future is. James Freed is city manager and chief administrative officer of Port Huron.

LETTERS

Column not accurate on Michigan energy While Becky Stanfield’s Nov. 26 guest blog “Put Michigan’s grid on a solar pathway” shares DTE Energy’s enthusiasm for increasing in-state renewable energy generation, it falls far short of providing readers with an accurate assessment of Michigan’s renewables industry. Michigan is not falling behind other states in its efforts to produce more energy from renewable resources. Our customers want cleaner energy sources, and we are delivering. Since 2009, DTE alone has driven investments of $2.3 billion in renewable energy in our state, building 1,000 megawatts of wind and solar capacity — enough to power 450,000 homes — with plans to add another 4,000 megawatts in the years ahead as we reduce car-

bon emissions by 80 percent by 2050. But while our customers want cleaner generation sources, they also want reliable power and affordable bills. To achieve all three of these priorities, a balanced energy mix is important and electricity generation planning must be done in a responsible and deliberate way. Most of DTE’s renewable energy generation today is wind, because it is a more cost-effective and efficient renewable source for our 2.2 million electric customers — a result of Michigan’s geography as a peninsula and lower-cost wind turbine technology. While the price of solar generation has come down, it is still not yet as cost-competitive as other cleaner sources. With Michigan undertaking the most significant generation transformation since World War II, flexibility to choose the most affordable, cost-effective clean en-

While DTE is committed to providing our customers with cleaner energy, we must keep energy affordable and reliable for our customers. DTE Energy customers’ bills are lower than the national average, and in 2016 DTE’s energy efficiency programs saved business and residential customers $600 million during the lifetime of the measures implemented. Irene Dimitry Vice president, Business Development and Planning DTE Energy Detroit Send your letters: Crain’s Detroit Business will consider for publication all signed letters to the editor that do not defame individuals or organizations. Letters may be edited for length and clarity. Email: rfournier@crain.com

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Amazon bid highlights gap in region’s talent strategy W hile there are many factors (regional transit, tax incentives, available commercial space) that will be considered by Amazon in deciding to locate what is being dubbed its second headquarters (HQ2), there can be no doubt the real driver is talent. While long term, Amazon may be able to attract talent to fill the projected 50,000 jobs — mostly engineering, IT, and technical positions — it will need to rely on the available talent within a metro region in the short term. Detroit’s proposal no doubt mentioned our unique strategic global location as a Canadian border city and our great research universities. As the executive director of Global Detroit — a nonprofit economic development initiative created with backing from the New Economy Initiative and Detroit Regional Chamber that focuses on connecting international talent with regional businesses’ unmet talent needs — I was flattered to have been called twice from someone at the Boston Consulting Group about Global Detroit’s near-shoring research and our first-in-the-nation international student retention program. But I was never brought in for a full consultation. I didn’t see many of our key partners included in the 60-member bid committee. Nor did I hear any mention of international talent outside of the undeveloped near-shoring concept. The reality is that metro Detroit, like the vast majority of regions submitting bids in America, would have a nearly impossible time filling tens of thousands of STEM jobs without transforming its talent strategy to be more inclusive of international talent. For quite some time, international students have comprised approximately half of all the masters and Ph.D. candidates in STEM — including over 70 percent of the graduate students in electrical engineering and over 60 percent of the graduate students in computer science. And while our region has the nation’s first program to retain these students — the Global Talent Retention Initiative of Michigan operated at Global Detroit — the program runs on a shoestring budget with one full-time staff person to serve the 20,000-plus international students at participating universities (University of Michigan, Michigan State University, Wayne State University, Eastern Michigan University, UM Dearborn, and Oakland University) and the 200 employers who have attended GTRI events over the past three years. In August, I spoke on a panel at the annual meeting of the Michigan Economic Developers Association to over 100 local economic development agency staff. I asked the room how many considered talent to be a top strategic objective. Nearly every hand went up in the air. I asked how many have an international talent strategy. Not one hand was raised. October research released by New American Economy and the Great Lakes Metro Chambers Council highlights the critical importance of international talent to the economic well-being of U.S.-born workers in the Great Lakes region. Detroit, the metro region, and the state of Michigan have all been losing U.S.-born population, but each has been the

OTHER VOICES Steve Tobocman

beneficiary of rapid immigration, outpacing national immigrant growth rates. And while most Americans are shocked to learn that half of the adult immigrants to the U.S. since 2010 have a four-year college degree

or its equivalent, Michigan’s immigrants over the past five years are 63 percent college-educated — almost three times the state’s average. NAE’s research notes that while immigrants are 7 percent of the state’s population, they comprise 30 percent of the doctors and surgeons, 28 percent of the software developers, 25 percent of the computer systems design workers, and 22 percent of the mechanical engineers. Immigrants have helped lead the region’s manufacturing rebound and growth in health care by occupying critical STEM and other hard-to-fill positions, allowing companies to grow and hire more U.S.-born workers in

For quite some time, international students have comprised approximately half of all the masters and Ph.D. candidates in STEM.

good-paying jobs. The Amazon bid highlights the gap between merely endorsing an international talent strategy and funding a few positions and truly investing in regional change to enable metro De-

troit to draw from the contributions that international talent offers. If we want to become a highgrowth, high-prosperity region like Seattle, San Francisco, Toronto, or Boston (all cold-weather, formerly industrial places), we have a lot more to do, but investing in our international talent strategy is a high-reward, high-return opportunity. Steve Tobocman, a former state representative, is director of Global Detroit, a nonprofit that aims to revitalize Michigan's economy by making the region more welcoming to immigrants, trade and foreign investment.

‘They saw the vision I had’ Flagstar Bank crafts a custom solution to refinance Royal Park Hotel When Frank Rewold, CEO of Rochester-based Frank Rewold and Sons, was looking to refinance the Royal Park Hotel in 2013, the economy was bleak. Rewold’s construction business had weathered down cycles previously, but this was a tough one. Rewold approached 23 lenders looking to refinance the loan on his downtown Rochester hotel. He had no success until he approached Troy-based Flagstar Bank. “They listened to my story,” Rewold recalled. “They saw the vision that I had.” Mike Wentrack, a first vice president and relationship manager at Flagstar, visited Rewold’s hotel and studied the financial details, where he spied an upswing in the making. “You had to look not just at the last five or six years, but specifically the last eight to 12 months,” Wentrack said. “The numbers were improving on an ongoing basis.” Flagstar got to work. “We were able to fix part of his debt with a fixed rate and let some of it stay variable,” Wentrack said.

“We protected him against rising interest rates but also let him take advantage of the historically low variable rate of interest.” This tailored refinancing solution helped Rewold implement his vision, and the hotel has flourished, earning multiple accolades, including the coveted Four Diamond award from Worldhotels. “The economy changed—there were a lot of factors there,” Rewold acknowledged. “But one of those factors was getting the bank to give me capital, give me an interest rate that I could tolerate. Flagstar helped me when no other lending institution would talk to me.” The appreciation goes both ways. “Frank is a relationship guy,” Wentrack said. “That’s how Flagstar likes to operate as well.”

Let’s discuss your business vision. Visit flagstar.com/commercial

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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 // D E C E M B E R 4 , 2 0 1 7

FOCUS

SPECIAL REPORT: BEST-MANAGED NONPROFITS Winner: Alternatives for Girls

JACOB LEWKOW FOR CRAIN’S

Alternatives for Girls is debt free and on stable financial footing after being on the brink of bankruptcy. Left to right: Amy Good, CEO; Carolyn Rayford, director, Shelter/TIL program; Anna Weaver, director of fund development and Celia Thomas, COO.

Alternatives for Girls doubles budget, increases services About this report Crain’s Detroit Business has recognized some of Southeast Michigan’s best-managed nonprofits for the past 28 years. The contest serves as not only a way to lift up the accomplishments of those organizations, but to share their best practices. Plante Moran PLLC reviews contest applicants for financial strength, and those showing a stable financial picture move forward into judging with Crain’s panel of independent judges representing expertise in different areas of nonprofit operations. Judges look for the tenets of good management, such as diverse revenue streams, board governance and involvement in fundraising and above all, how applicants stayed on mission. The judges then choose a winner from among the finalists based on how well that organization met a specific theme for that year. This year, the contest focused on how nonprofits are responding to shifting government and foundation funding priorities and the threat of government cuts. The nonprofit practice group at Plante Moran PLLC, led by partner John Bebes, reviewed

By Sherri Welch swelch@crain.com

the financial reports of all applicants. Winner Alternatives for Girls, this page Finalists Care of Southeast Michigan, Page 11 Furniture Bank of SE Michigan, Page 11 Midnight Golf Program, Page 12 Ronald McDonald House, Page 14 Judges JJGary Dembs, president and CEO of the Nonprofit Personnel Network JJKelley Kuhn, vice president, Michigan Nonprofit Association JJWilliam Liebold II, president, The Liebold Group LLC, a nonprofit and higher education consultancy, and former president of the Michigan Colleges Foundation JJGerald Lindman, assistant professor, Michigan State University and former head of the Center for Nonprofit Management at Lawrence Technological University JJRichard Martin, principal, Caleb LLC, a philanthropy consultant

Alternatives for Girls was in a slow spiral, pushing to raise more each year to close the gap between its operational costs and the government and foundation grants it had long relied on. It lacked a steady stream of funding for its programs serving homeless and high-risk girls and young women, and the multi-year grants it survived on did not provide for the rising costs of its programs each year. Its vulnerabilities became even more obvious when the government was slow to reimburse for its programs. The Detroit-based nonprofit was living check to check for much of its first 20 years, with no ability to save for a rainy day and operating, at times, on the brink of bankruptcy. “As we grew, it became more and more scary that we didn’t have any reserves,” CEO Amy Good said. Fast-forward a decade and AFG is debt free and on stable financial footing with $1.6 million in endowment and reserves that it pays back if used. Its budget this year, $4.2 million, is nearly double its budget from a decade ago, and it’s lessened its reliance on grant funding, with individual donors

Need to know

JJA decade ago, Alternatives for Girls was

operating on verge of bankruptcy

JJA new business plan, campaign and fundraised reserves help put it on stable ground JJReserves enable it to weather slow pay and funding changes and to pilot new programs to meet rising demand

contributing nearly a quarter of its revenue. The number of women and girls it provides with intensive, ongoing services increased to 435 last year from 296 in 2007. It’s launched a new financial literacy and college-savings program for middle school girls in Detroit piloted with reserved dollars and a self-funded social enterprise program providing the girls and women the nonprofit serves with cut-and-sew training. “Our services are more important now than ever, with the rising incidence of sex trafficking in Detroit,” CEO Amy Good said. AFG is the only agency doing outreach on Detroit’s streets in an attempt to reach and help victims of sex traffick-

ing, and it operates the only runaway shelter in town, she said. “We might not be too big to fail, but we are too important to fail.”

Finding stable ground While many nonprofits focused solely on funding their immediate operations during the economic slowdown, AFG was thinking about its future sustainability. Its services — shelter, street outreach and education, vocational guidance, mentoring, prevention and counseling — are important in helping its clients become healthy, functioning members of society, Good said. AFG had to figure out a way to strengthen its ability to provide them. Operating and planning support from Hudson-Webber, Kresge Foundation and McGregor Fund enabled the nonprofit to spend the years during the recession redoing its business plan, working with experts to develop a campaign and pulling together volunteer leadership. It secured a grant from the Community Foundation for Southeast Michigan to help hire a campaign SEE GIRLS, PAGE 12

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SPECIAL REPORT: BEST-MANAGED NONPROFITS Finalist: Care of Southeast Michigan

Care finds new ways to get people into recovery Need to know

By Sherri Welch

JJCare of Southeastern Michigan lost core program with state programmatic shift

swelch@crain.com

As the region’s opioid crisis escalated, Care of Southeastern Michigan lost one of its core programs. Two years ago, the state began requiring counties to provide the referral and coordination of addiction recovery services themselves, rather than outsourcing them. For Care, that meant losing a core program it had been founded on 40 years earlier and translated to a 12 percent drop in revenue. It led the agency, which provides services in Macomb and Wayne counties, to take a fresh look at how to meet growing demand for addiction services in Southeastern Michigan. It spent some time developing a new strategic plan and hired a new development director to start diversifying its revenue beyond government funding through efforts including a tasting event with local restaurants at the GM Heritage Center. This year, about 10 percent of its $4.7 million budget will come from individuals and employee assistance programs offered by local employers.

JJThe loss translated to 12 percent of its budget at a time of rising demand for addiction recovery services JJExpanding existing peer coach program is providing enhanced services and revenue

JACOB LEWKOW FOR CRAIN’S

From left to right: Monique Stanton, president and CEO; Susan Styf, chief program officer; Paul Sarris, director of Peer Recovery Services and Liz Arndt, CFO.

To meet rising demand for addiction services, Care began expanding its existing peer recovery coach program in May. The program, first launched in 2012, provides a coach — a recovering addict with first-hand experience of the issues addicts struggle with — to work with clients. Coaches typically have four or more years of recovery and are educated and trained in support services to help initiate, achieve and sustain recovery. “They’re serving as ... a person that provides a continuous care for individuals coming into the system,” Care’s President and CEO Monique Stanton said. SEE CARE, PAGE 14

Finalist: Furniture Bank of Southeastern Michigan

How the Furniture Bank came back from the brink Need to know

By Sherri Welch

swelch@crain.com

Long reliant solely on donations of furniture and cash to help furnish the homes of families in need, the Furniture Bank of Southeastern Michigan found itself in a conundrum when the recession hit. Demand spiked. Donations plummeted. And other support — including a $40,000 annual contribution from a dealership that closed — declined and evaporated. The nonprofit had just taken on added costs. Building on its Oakland County service area, the Furniture Bank opened a second facility in Macomb County in 2007. At the same time, fuel prices skyrocketed, making pickups of even sparse donations more expensive. The Furniture Bank’s clients were forced to wait months to receive deliveries of the free furnishings and obtained not even half of what they requested. The nonprofit found itself on the brink of insolvency. Under new management with the fall 2009 hiring of Robert Boyle as its new executive director, the nonprofit closed its Macomb County facility, sold one of its two trucks, laid off three of its nine employees, implemented a fourday work week and launched a fundraising push to keep staff and bills paid. Boyle also transitioned the board of directors. Many retired, and new directors were seated. Two of the new directors organized new fundraisers, including a wine tasting and a comedy event to bring in revenue. The Furniture Bank began benchmarking its successful peers around the country and soon replicated their practice of charging modest fees for provid-

JJFurniture Bank of Southeastern Michigan saw demand spike as donations plummeted JJIt cut costs, instituted modest fees and began working with nonprofits with federal dollars to furnish homes JJIt’s now filling 97 percent of requests and making plans to open a second, Detroit site

JACOB LEWKOW FOR CRAIN’S

From left to right, Victor Arbulu, board treasurer; Wayne County Circuit Court Judge Kathleen McCarthy, board member; Robert Boyle, executive director and Bruce Gleba, board president.

ing furniture to families rather than providing it for free. The shift has provided an additional revenue stream. As the Furniture Bank became more viable, it also began working with nonprofits that had federal grant funding to obtain furniture for their clients. The organizations had been obtaining furniture from retailers. By working with the Furniture Bank, they were able to stretch these dollars twice as far. And the Furniture Bank secured yet another source of funding to help underwrite its costs. Program service revenue accounts for about half of its cash budget, and it’s back to operating in the black. The nonprofit is operating on a cash budget of $591,632 this year. It’s decreased the wait time for new furniture from three to four months to 10 days, fulfilling 97 percent of the requests it gets. And it’s expanding its services across the region again. In late 2015, with support from United Way for Southeastern Michigan and the Community Foundation for Southeast Michigan, the Furniture Bank began providing services in Detroit and Wayne County for the first time in its then-48-year history. Since then, it’s provided furniture to more than 200 Wayne County families. It now plans to open a second facility in Detroit.

C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // D E C E M B E R 4 , 2 0 1 7

SPECIAL REPORT: BEST-MANAGED NON Finalist: Midnight Golf Program

Your trust. Your triumphs. We care about both. Weâ&#x20AC;&#x2122;re here to help. If you are in VHDUFK RI ĂąH[LEOH Ă°QDQFLQJ VROXWLRQV IRU \RXU EXVLQHVV WDON WR XV DERXW DVVHW EDVHG OHQGLQJ JACOB LEWKOW FOR CRAINâ&#x20AC;&#x2122;S

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From left to right: Clover McFadden, communication director; Renee Fluker, founder-president; David Gamlin, vice president and program director; Alandra Chuney, director of student support and Gabe Neistein, fund development director.

Midnight Golf Program flourishes after shifting focus By Sherri Welch swelch@crain.com

When the Detroit Employment Solutions Corp. narrowed the focus of a workforce development contract to two Detroit high schools in 2014, Midnight Golf Program faced a turning point. Should it narrow its focus in order to follow the dollars? The Bingham Farms-based nonprofit had served as a workforce program provider to the DESC for seven years, providing underserved high school students from Detroit schools with a broad array of programs including tutoring, SAT and ACT training and workforce readiness training such as interview skills building. It also managed a summer work experi-

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director, develop print campaign materials and incent endowment donations. And it began working with the foundation to learn how to structure planned gifts. AFG cultivated relationships that would lead to early gifts in the campaign following its 2011 launch. PVS Chemicals CEO James Nicholson Sr. and his wife Ann co-chaired the campaign with former General Motors President and CEO Frederick Arthur â&#x20AC;&#x153;Fritzâ&#x20AC;? Henderson and his wife Karen. After a $200,000 gift from the Nicholsons helped the nonprofit pay off the mortgage on its southwest Detroit building, AFG continued to make mortgage payments to itself to build its building and equipment reserve. â&#x20AC;&#x153;We did a lot of work with major donors during (that) time,â&#x20AC;? Good said. â&#x20AC;&#x153;It put us on a different plane in terms of our capacity to manage estate gifts. And weâ&#x20AC;&#x2122;ve received a number of them since that time.â&#x20AC;? By 2015, the nonprofit had raised

Need to know

JJChose not to rebid for a contract that

would have narrowed its impact

JJContract was a third of annual budget JJEngaging board, staff and mentors in fundraising has doubled its annual budget and the number of students it serves

ence for the youth in its program, identifying employers for youth placements, checking in weekly with employers and student employees and managing the payroll process for the program. It had seen funding reduction the two years prior to the contractâ&#x20AC;&#x2122;s expiration and in 2014 saw the scope of what the DESC was bidding out narrowed both programmatically and nearly $6.19 million to cover three years of operations during the recession and $1.6 million in endowment and reserves. With donors wanting to support immediate needs, AFG dialed back its endowment goal in 2013, about halfway through the campaign. It established both a board-designated endowment and a permanent endowment at the Community Foundation. â&#x20AC;&#x153;Our thinking was both kinds of endowments have important advantages. We wanted to achieve both of them,â&#x20AC;? Good said. The endowment at the Community Foundation provides the highest return possible and comes with technical assistance in planned giving. And with the board-designated endowment, â&#x20AC;&#x153;If we should ever face dire straits and are about to go into bankruptcy, the board can undesignate those funds, and we can survive,â&#x20AC;? she said. AFG kept its campaign director on after closing out the campaign, and she now serves as director of fund development. Planned giving is part of the non-

demographically to a workforce-driven after-school program, provided only at Cody and Osborn high schools. Its board decided to walk away from the DESC contract, which represented about a third of its roughly $1 million budget at the time, Founder and President Renee Fluker said. To continue to meet its mission, it needed to identify new revenue, and a grant from a family foundation gave it the ability to restructure its fundraising strategy. Midnight Golf began focusing its entire organization on developing new sources of funding with a goal of diversifying its revenue sources. Every staff member, board member and mentor participated in fund development training. profitâ&#x20AC;&#x2122;s culture now, she said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re shifting focus to soliciting more planned gifts (on an ongoing basis) so we can continue to build endowment.â&#x20AC;?

New programs AFGâ&#x20AC;&#x2122;s program sustainability reserves enabled it to shore up core programs when federal funding was reduced and a local foundation that had supported its prevention program for 25 years changed its priorities and stopped funding the agency. The reserve has also provided funding to pilot new programs that have the potential to attract sustainable funding. In the midst of the campaign in 2013, AFG launched a social enterprise program called Sew Great Detroit to train at-risk girls and women how to do cutand-sew work and position them for jobs in industrial sewing. The three-month-long program has trained 16 people, selling the aprons, tote bags, cell phone bags, scarves and other items they make at local boutiques to support the costs of the pro-

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C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // D E C E M B E R 4 , 2 0 1 7

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It transitioned from a working board that had traditionally helped with programs to one focused strictly on governance and fundraising. Directors began hosting personal fundraisers centered around events like Painting With a Twist and organizing the nonprofitâ&#x20AC;&#x2122;s annual bowl-a-thon fundraiser. At the same time, Midnight Golf invested in new software to manage gifts and donors. It hired a new fund development director position to help lead those efforts, along with a program director, student support director and college liaison. It now operates with five full-time and four part-time employees. The nonprofit also created a new 40-member advisory board of business, civic, foundation and education leaders to help promote the program and connect its students to opportunities. Like the nonprofitâ&#x20AC;&#x2122;s board, employees and mentors, the advisory board also received fund development training. Those efforts have helped more than double Midnight Golfâ&#x20AC;&#x2122;s annual budget, enabling it to double the number of high school students itâ&#x20AC;&#x2122;s exposing to the game of golf and personal development programs each year. With increased individual support and grants from new family and corporate foundation funders, the nonprofit is now operating on a $2.3 million budget for fiscal 2018, up from $1.6 million last year and about $1 million two years ago. This year, itâ&#x20AC;&#x2122;s working with 265 Detroit high school students, up from about 125 in 2015, providing them with a range of programs, from life skills building and golf instruction to mentoring, a college road trip, college fair and scholarship opportunities. Itâ&#x20AC;&#x2122;s also providing a variety of supports â&#x20AC;&#x201D; including mentoring, care packages, scholarships, tuition assistance for study abroad and financial assistance to out-of-state students needing financial help to get home or to summer intern sites â&#x20AC;&#x201D; to about 700 college students who completed the Midnight Golf Program in high school.

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Sherri Welch: 313 (446-1694) Twitter: @SherriWelch gram, which operates with assistance from volunteers. The program recently moved into a space in the Ponyride business center in Southwest Detroit. â&#x20AC;&#x153;We are planning to have it become structurally independent of AFG and for it to create revenue to support AFGâ&#x20AC;&#x2122;s other operations,â&#x20AC;? Good said. Two years ago, Alternatives for Girls used the reserves to launch another program, this one working with middle-school girls in Detroit and their families to open 529 college savings accounts with matching funds. Itâ&#x20AC;&#x2122;s grown to serve 38 girls and will add another six to eight soon, supported by an $80,000, two-year operating grant provided by a local family. â&#x20AC;&#x153;It is only because of the program sustainability fund â&#x20AC;&#x201D; and modest withdrawals from it â&#x20AC;&#x201D; and the confidence that new donors and partners have in AFGâ&#x20AC;&#x2122;s fiscal stability â&#x20AC;&#x201D; that our social enterprise has been made possible,â&#x20AC;? Good said. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

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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 // D E C E M B E R 4 , 2 0 1 7

SPECIAL REPORT: BEST-MANAGED NONPROFITS Finalist: Ronald McDonald House of Detroit

Ronald McDonald House of Detroit settles into new home Need to know

By Sherri Welch

 Ronald McDonald House of Detroit diversifies funding base to help fund new home, new programs

swelch@crain.com

In the fall of 2013, Ronald McDonald House of Detroit learned it would have to move from the Midtown Detroit site DMC Children’s Hospital of Michigan had conditionally leased to it to make room for the hospital’s new patient tower. The Detroit Medical Center’s parent company, Tenet Healthcare Corp., contributed the bulk of the $4.3 million cost to move the charity a mile north to the Hutzel Professional Building. But it left Ronald McDonald House — which operated on a budget of just over $1 million in 2014 — to raise $850,000 for the move and additional funds to serve as an operating cushion while it settled into its new home and made needed changes to ensure the parents of children undergoing treatment at the hospital could find the house and use its services. The charity launched a $3 million campaign late that year, an ambitious effort given its longtime challenge of securing foundation grants given the specialized population it serves and the lack of specific programs needing funding, Executive Director Jen Litomisky said. By diversifying its revenue and fundraising approaches, it exceeded its goal, raising nearly $3.2 million in three years. It paid its part of the capital costs to create the new

 The campaign created reserves the charity is using to launch new programs  Among the programs will be a free, mobile health clinic in Detroit

JACOB LEWKOW FOR CRAIN’S

Left to right: Nicky Bates, development and marketing associate; Joel McCormick, board president; Chrissy Cooper, director of development and marketing and Jennifer J. Litomisky, executive director.

house and designated $500,000 for operations. The remaining $1.8 million is creating a reserve as multi-year pledges are paid.

Those reserves, plus an additional $1 million the charity hopes to raise in phase two of its campaign next year, are enabling the charity

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CARE

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to launch new programs, including a free, mobile health care clinic that it’s developing with Wayne State University and Children’s Hospital of Michigan Foundation for a planned launch in 2019. Ronald McDonald House began focusing on online fundraising and email campaigns and did a new telethon with WDIV-Channel 4 to attract donors. It also submitted grant proposals to new foundations and corporations, broadening its circle of funders. Prior to the campaign, Ronald McDonald House relied heavily on individual donations made through events, Litomisky said. Less than 5 percent of its revenue came from businesses and grants were only 6 percent of its total revenue. Today,

presented by:

“Research definitely shows the fewer times you have changes in care, the better. Having one person you’re able to develop a strong relationship with helps.” To expand the program, Care designated one of its knowledgeable staff members to train and credential peer coaches and created two supervisor positions. It doubled its number of employees to 86 from 30 last year. As part of that, it added eight peer coaches. There are now 23 peer coaches total in the program. Care also had to get creative to find new ways to connect with people in need of their services, since they lost their ability to secure referrals when they ceded their coordination role to the county. Care established relationships with local hospitals including St.

only half of its $1 million annual budget comes from individuals. Corporate donors make up a third of total revenue, and grants have risen to about 15 percent of its total budget. And it’s working to cultivate bigger, longer-term donors, Litomisky said, with a foray into planned giving. The increased revenue enabled the charity two years ago to begin providing a van shuttle service to transport the families of children undergoing treatment at the hospital back and forth to the house. It’s working with Children’s Hospital of Michigan to open a family room for parents to rest. As part of that, Ronald McDonald House has built a “Happy Wheels Cart” to take food, drinks, toys and other essentials to children undergoing treatment at the hospital, their parents and the doctors and nurses. The Care Mobile has been on the radar for the Detroit chapter for nearly 20 years, Litomisky said, noting it’s a service affiliates around the country offer, as is the family room, which is scheduled to open during the first quarter of next year. “We’ve never had a partner for the Care Mobile ... now, finally, the Wayne State University School of Medicine and Children’s Hospital of Michigan Foundation are stepping up to be part of that,” Litomisky said. The WSU Physician Group will provide the health care for the new mobile health clinic, and the foundation will join Ronald McDonald House in funding its annual operating costs, she said. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch John Macomb and Henry Ford Macomb, area drug and sobriety courts and correctional facilities to serve as a resource for addicts. Since May, it’s provided services to nearly 500 people in the hospitals, many of whom would not have otherwise sought treatment. And Care is helping increase the self-sufficiency of people coming out of incarceration in Macomb County. Care’s budget has increased to $4.7 million for fiscal 2018, up from $2.8 million in 2016 on the strength of fundraising and funding from the Macomb County Office of Substance Abuse & Detroit Wayne Mental Health Authority. “There weren’t other providers in Macomb doing that service, we had that unique expertise, and it really has shown good outcomes,” Stanton said. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // D E C E M B E R 4 , 2 0 1 7

CRAIN'S LIST: MICHIGAN BANKS

Ranked by 2017 Michigan deposits inside market Rank

Company Address Phone; website

Top executive(s)

Michigan deposits inside market ($000,000) June 2017/2016

Number of Michigan offices inside market 2017

Michigan deposits outside market ($000,000) 2017

Number of Michigan offices outside market 2017

J.P. Morgan Chase & Co. 611 Woodward Ave., Detroit 48226 (313) 256-8500; www.jpmorganchase.com

John Carter market president

$43,944.7 $42,006.2

240

$1,226,172.3

5,044

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

Michael Ritchie Michigan market president

29,480.7 26,963.1

196

27,861.6

242

Bank of America 2600 W. Big Beaver Road, Troy 48084 (800) 643-9600; www.bankofamerica.com

Matthew Elliott Michigan market president

17,841.0 16,564.0

119

1,252,309.7

4,484

PNC Bank

Ric DeVore president for Detroit and Southeast Michigan

17,425.1 17,325.6

190

240,250.6

2,371

755 W. Big Beaver Road, Troy 48084 (800) 243-7274; www.pnc.com Fifth Third Bank Eastern Michigan One Woodward, Detroit 48226 (313) 230-9001; www.53.com

David Girodat president and CEO, Eastern Michigan

16,954.5 16,072.6

208

87,854.6

966

Huntington National Bank

David Lochner president of Eastern Michigan

15,199.5 B 9,969.2

336

62,737.2

720

Chemical Financial Corp. (Chemical Bank) 235 E. Main St., Midland 48640-0569 (989) 839-5350; www.chemicalbankmi.com

Thomas Shafer C president and CEO

11,777.5 D 7,474.6

218

1,450.1

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

Alessandro DiNello president and CEO

9,023.8 8,772.8

0.0

Citizens Bank E 27777 Franklin Road, Southfield 48034 (248) 226-7998; www.charterone.com

Richard Hampson Michigan market president

5,537.9 5,138.5

82,377.1

730

TCF Bank 17440 College Parkway, Livonia 48152 NA; www.tcfbank.com

Camilla Stensen director retail banking, Michigan

3,010.3 2,907.9

14,645.5

287

Wells Fargo & Co. 101 W. Washington St., Marquette 49855 (906) 228-1203; www.wellsfargo.com

David Szabo regional president

2,817.2 2,812.1

1,234,973.8

6,069

Mercantile Bank Corp. 310 Leonard St. NW, Grand Rapids 49504 (616) 406-3000; www.mercbank.com

Robert Kaminski president and CEO

2,378.8 2,281.6

0.0

Independent Bank Corp.

William Kessel president and CEO

2,278.0 2,152.2

0.0

Macatawa Bank Corp. 10753 Macatawa Drive, Holland 49424 (616) 820-1444; www.macatawabank.com

Ronald Haan president and CEO

1,465.6 1,360.2

0.0

KeyBank N.A.

Ted Willett president, Michigan

1,415.7 1,334.1

103,928.6

1,212

4 5 6

13 14 15

801 W. Big Beaver Road, Suite 500, Troy 48084-4724 (248) 244-3541; www.huntington.com

230 W. Main St., Ionia 48846 (800) 355-0641; www.ibcp.com

100 S. Main, P.O. Box 8612, Ann Arbor 48107 (800) 539-2968; www.keybank.com

Arbor Bancorp Inc. (Bank of Ann Arbor) 125 S. Fifth Ave., Ann Arbor 48104 (734) 662-1600; www.bankofannarbor.com

Timothy Marshall president and CEO

1,331.6 1,019.6

0.0

Old National Bank 2723 S. State St., Ann Arbor 48104 (734) 887-2600; www.oldnational.com

Alex Strati Michigan region CEO

1,317.4 1,310.8

9,480.1

163

The Private Bank 38505 Woodward Ave., Suite 1300, Bloomfield Hills 48304 (248) 644-2301; www.theprivatebank.com

Dan Pehrson CEO, Michigan

1,269.4 1,113.4

17,986.3

Isabella Bank Corp. 401 N. Main, Mt. Pleasant 48858 (989) 772-9471; www.isabellabank.com

Jae Evans CEO

1,211.7 1,159.7

0.0

MBT Financial Corp. (Monroe Bank & Trust) 102 E. Front St., Monroe 48160 (734) 241-3431; www.mbandt.com

H. Douglas Chaffin president and CEO

1,179.0 1,163.6

0.0

Level One Bancorp Inc. 32991 Hamilton Court, Farmington Hills 48334 (248) 737-0300; www.levelonebank.com

Patrick Fehring chairman, president and CEO

997.7 917.8

0.0

First National Bancshares Inc. (First National Bank of America) 241 E. Saginaw, East Lansing 48823 (800) 968-3626; www.fnba.com

Ken Foote CEO

960.5 756.0

0.0

Crestmark Bancorp Inc. 5480 Corporate Drive, Suite 350, Troy 48098 (248) 641-5100; www.crestmark.com

W. David Tull, chairman and CEO; Michael Goik, president and COO

838.5 679.0

0.0

Mackinac Financial Corp. (mBank) 130 S. Cedar, Manistique 49854 (906) 341-8401; www.bankmbank.com

Kelly George, president of Mackinac Financial Corp., president and CEO of mBank; Paul Tobias, chairman and CEO Mackinac Financial Corp., chairman of mBank Ronald Justice president and CEO

705.5 641.9

0.1

615.2 394.3

0.0

24 25

Fentura Financial Inc. (The State Bank) 175 N. Leroy, Fenton 48430 (810) 750-8725; www.fentura.com

This list ranks banks and bank holding companies with a presence in Michigan. Figures are from the FDIC's deposit market reports, which are based on the branch/office deposits for all FDIC-insured institutions as of June 30. It is not a complete listing but the most comprehensive available. Companies are listed with the address and top executive of their main metro Detroit office. Actual figures may vary. NA = not available.

B Acquisition of FirstMerit Corp. closed in August 2016. C Succeeded David Ramaker as president and CEO in June. D Acquired Talmer Bancorp Inc. in August 2016. E Charter One branches in Michigan and Ohio were rebranded as Citizens Bank in April 2016. LIST RESEARCHED BY FDIC

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

CALENDAR WEDNESDAY, DEC. 6 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

THURSDAY, DEC. 7 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 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-

SPOTLIGHT 8033; email: pmiacobelli@gmail. com; website: bodmanlaw.com

UPCOMING EVENTS 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 UniSchlissel versity of Michigan marks 200 years. Westin Book Cadillac. $45 members, $55 guest of members, $75 nonmembers. Website: econclub.org Cyber Security: Protecting Your Business from Preventable Cyber Threats. 7:30-9:00 a.m. Dec. 15. Huntington Technology. Discussion topics will include ransomware, email viruses and internet scams, and the tools and business processes to avoid downtime, loss of productivity and loss of business. A representative from the Detroit Field Office of the FBI will be joining IT experts to

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

ADVERTISING & MARKETING

MANUFACTURING Colleen Hau Director of Consumer Experience and Co-Creation

Carhartt, Inc.

Josh Perry

Carhartt has named Colleen Hau as its director of consumer experience and co-creation. In this role, Colleen will further expand and champion Carhartt’s co-creation process to innovate and improve the customer and consumer experience.

Josh Perry has been named Senior Vice President, Client & Strategic Development Officer of the JRT Agency. In his expanded role, Perry will lead direction on driving, tracking and inspiring overall growth including organic expansion and new business. In addition, Perry will continue to supervise agency account teams and client management of several pivotal clients including: Mopar, AmTrade and Dana Corporation. Perry joined the agency in 2005 and holds a MBA from Michigan State University.

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 on the world economy; the bid to renegotiate free-trade agreements; deregulation; tax reform; health care; potential stock market corrections; geopolitical risks in China, Iran, North Korea and Russia and how these and other factors will affect Michigan’s business and industry climate, especially the automotive and other advanced manufacturing industries. Automation Alley. $99 members; $125 nonmembers. Contact: Lisa Lasser, email: lasserl@automationalley.com

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

Duggan

Evans

Patterson

Hackel

cuss regional successes, issues and their plans to drive the Southeast Michigan region forward. The meeting will take place during the 2018 North American International Auto Show. Cobo Center. $45 members, $55 guest of members, $75 nonmembers. Website: econclub.org 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.

DEALS & DETAILS ACQUISITIONS & MERGERS J Federal-Mogul Powertrain, Southfield, a division of Federal-Mogul Holdings LLC, has acquired cleantech development company Controlled Power Technologies Ltd., Laindon, Essex, U.K. The acquisition adds electrification technologies to Federal-Mogul’s powertrain development. The new unit will operate under the name Federal-Mogul Controlled Power Ltd. Websites: federalmogul.com, cpowert.com.

CONTRACTS

Senior Vice President, Client and Strategic Development Officer

The JRT Agency

address the topic of cybersecurity from the FBI’s perspective. Bacco Ristorante, Southfield. Free. Contact: Jodie Krasnick, phone: (248) 3577200, ext. 210; email: jkrasnick@huntingtontechnology.com; website: HuntingtonTechnology.com

The Big Four. 11:30 a.m.-1:30 p.m. Jan. 23. Detroit Mayor Mike Duggan, Wayne County Executive Warren Evans, Oakland County Executive L. Brooks Patterson and Macomb County Executive Mark Hackel dis-

ADVERTISING SECTION

New Detroit corporation counsel to be nominated

J Fourmidable Group Inc., Bingham Farms, has been appointed as management agent for five multi-family Section 8, tax credit and public housing communities in Ohio consisting of 395 apartments, expanding the firm’s national portfolio to 13 states. The new communities are: Fairborn Apartments, 177 units in Fairborn; Pendleton Apartments, 78 units in Cincinnati; Oakwood Apartments, 65 units in Milford; Arlington Heights I, 46 units in Youngstown; and Arlington Heights II, 29 units in Youngstown. Website: fourmidable. com. J Jaffe Raitt Heuer & Weiss PC, Detroit, a business law firm, has selected Bianchi Public Relations Inc., Troy, as its PR agency of record. Bianchi PR will help Jaffe with media relations around its key growth areas, as well as promote the law firm’s upcoming 50th anniversary and related future-focused activities. Websites:

jaffelaw.com, bianchipr.com. J Oxford Companies LLC, Ann Arbor, a real estate company, has been named as the property managers of downtown Ann Arbor’s One North Main by GEM Realty Capital, owner of the property’s office condos. The building’s 11 commercial tenants include Comerica Bank, the University of Michigan and the law firm of Miller Canfield. Websites: oxfordcompanies.com, gemrc.com.

NEW PRODUCTS J Westborn Market Group, Berkley, is now selling ReTea (loose leaf teas made in Detroit) and Poplettes (a gluten-free popcorn alternative product of Bleaf Natural Foods, Troy) in its four metro Detroit stores after the two locally made products won its “The Next SKU could be you!” competition for guaranteed shelf space for one year. Websites: westbornmarket.com, getretea.com, bleafnatural.com.

NEW SERVICES J Olympia Nursing & Rehabilitation Network, Dearborn, announced a new COPD Rehab Program at Olympia’s Westland facility (36137 West Warren Road). Patients with chronic obstructive pulmonary disease are currently being accepted into the program, which offers a multi-disciplinary approach to personalized patient care. Website: olympiagroupllc.com.

Submit Deals & Details items to cdbdepartments.com.

Detroit Mayor Mike Duggan is set to nominate local attorney Lawrence Garcia to be the city’s next corporation counsel. Garcia, 47, would replace Melvin “Butch” Hollowell, who is leaving the position Dec. 31 to head up the Miller Law Firm’s new Detroit office. Duggan will submit GarGarcia cia’s nomination and request for approval to City Council by the end of the year, according to a city news release. “In a city that faces an average of more than 700 lawsuits every year with claims of approximately $300 million, bringing in a corporation counsel with such extensive courtroom experience is a tremendous asset,” Duggan said in the release. Garcia, two-time president of the Hispanic Bar Association of Michigan and member of the American Board of Trial Advocates, has 20 years of courtroom experience. In 2011, he started the Detroit-based Garcia Law Group PLLC. He has represented the city of Detroit, Detroit Public Schools, Wayne County and the Detroit Police Department. Many of Garcia’s cases have centered on civil rights, immigration and environmental issues. In 2005, he assisted the Detroit Branch of the NAACP challenge of the 2005 redistricting of Michigan. He also represented the LA SED, a nonprofit that serves area Hispanics and residents of southwest Detroit, during litigation related to the Gordie Howe International Bridge. City Council will have 30 days from the date of submission to confirm the appointment.

PEOPLE NONPROFITS J Donna Doleman Dickerson to chief marketing officer, GreenPath Financial Wellness, Farmington Hills, from senior vice president, marketing and communications, Ann Arbor SPARK, Ann Arbor.

Blythe Moran to executive director, American Cancer Society, Southfield, from head of advancement, Eton Academy, Birmingham.

REAL ESTATE J Katie Meister to assistant vice president of sales and marketing, City Club Apartments, Farmington Hills, from regional director of sales and marketing, White Lodging Services, Southfield.

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

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INNOVATION FROM PAGE 1

The center will be on the ground floor of the foundation’s offices in Detroit’s New Center neighborhood and open in mid- to late 2018 with services and events aimed at nonprofit operations and creating connections with other sectors. The next step will be to bring innovation-focused services and meetings aimed at solving community problems the sector isn’t looking at in 2019-20. The foundation’s in-depth look at the local support and innovation programs for nonprofits here and in western New York, its grant-making regions, showed services were “cookie-cutter,” he said, with little, if any, customization. Local nonprofit support programs are not well-coordinated, and there is virtually nothing in place to promote innovation, Egner said. “Nonprofits here, like the rest of the country, are very focused on survival and running programs but are very seldom focused on innovation.” It’s partly a matter of trust. Nonprofits compete for funds and look for ways to outshine the organization next door in order to do that. They have not been set up to jointly solve problems, Egner said. “If we can get them in that space together, learning together, trusting each other, you’ve solved 90 percent of the problems.” Initially, the center will offer some yet-to-be-determined services on a walk-in basis and pilot other services in development with Wilson foundation grantees. Exactly how it will operate, including the services offered, who will offer them and whether there will be fees attached has yet to be decided. “We’re going to learn as we grow and change as we go,” Egner said. “But we think TechTown’s experience in the entrepreneurial space translates directly.” Founded in 2000 by Wayne State University, Henry Ford Health System and General Motors, TechTown became an independent nonprofit a few years later. Originally founded to support tech-based spinoffs from the university, it has evolved into a co-working, meeting and event space supporting entrepreneurs and small businesses. Its model has centered on providing those organizations with the services they need through referrals and holding their hands as they connect with that expertise, said Ned Staebler, president and CEO of TechTown and vice president for economic development at Wayne State University. With its focus on project management and learning from entrepreneurial peers, TechTown’s model translates just as well to nonprofits, he said. On the innovation front, organizations sharing the same space have what Staebler calls “serendipitous collisions.” “Sometimes you don’t even know what you need until you run into it,” he said. TechTown will take the lead in developing the new support center, working with the Michigan Nonprofit Association and Washington, D.C.based Community Wealth Partners, a national expert in capacity and network building, and others. “We will be very collaborative ... to figure out the best path to provide services to Detroit’s nonprofit community,” said Graig Donnelly, chief strategy officer for TechTown.

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

December 4, 2017 17

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JOB FRONT POSITIONS AVAILABLE

RETIREMENT SYSTEMS OF THE CITY OF DETROIT 500 Woodward Ave, Suite 3000 Detroit, Michigan 48226 Job Title: Investment Officer (Salary dependent on experience) The Retirement Systems of the City of Detroit (RSCD) is seeking experienced candidates to fill one or more professional investment position(s) that will assist in the management of RSCD’s $5 billion externally managed investment portfolio. This position reports directly to the CIO and requires an advanced understanding of Capital Markets and Institutional Pension Investing across various asset classes (Public & Private Equity and Debt Investments, Real Assets, Hedge Funds, etc.) The Investment Officer will be responsible for supporting the CIO in managing and evaluating the Plans’ investments in accordance with the Investment Policy Statements as well as applicable state and federal laws and regulations. The full job description and qualifications are available on the RSCD website at:

With a three-year, $4.75 million grant from the Wilson foundation, TechTown will manage the center’s day-to-day operations, hiring operating, event planning, communications and marketing staff. It’s currently in the midst of a search for someone to lead the new center and plans to hire three others soon after. “Identifying the problem is one of the things we’re really good at. (And) we think with our partners at MNA and CWP, we’ll be able to do a really good job of helping to identify and diagnose problems.” The Lansing-based Michigan Nonprofit Association, which also has a Detroit office, brings relationships with more than 4,000 nonprofits across the state and a software assessment it has honed over the past 20 years to help identify a nonprofit’s operating strengths and weaknesses in areas such as human resources, governance, fundraising and volunteer management. It will help shape the services offered through the new center and provide initial operating assessments, referrals to expert providers in its network and case management with a $315,000 grant from the Wilson foundation. The center will be a collaborative space where support is coordinated to help nonprofits navigate the system and get the support they need, “and that’s not something that’s been done before to this extent,” said MNA President and CEO Donna Murray-Brown. “Coordinating the support is really the big takeaway, in my opinion.” Wilson benchmarked a number of national models in developing its placed-based concept. By and large, they were centered on social innovation and entrepreneurs rather than on nonprofits, said Jim Boyle, vice president of programs and communications for the foundations. A number of local nonprofits and support organizations participated in the benchmarking trips, including: Michigan Community Resources, Data Driven Detroit, Detroit Creative Corridor Center, Southwest Solutions and the Johnson Center for Philanthropy at Grand Valley State

University. The nonprofit support and innovation center is something that’s badly needed in the region, nonprofit operations consultants said. “From a service provider standpoint ... we see everywhere we look, whether it’s tax reform or overall public policy, that the public sector isn’t able to keep up with the human services demand,” said Bill Liebold, principal of The Liebold Group LLC, which assists nonprofits with board and senior leader development and fund development. “The more efficient nonprofits can be in terms of delivering services, be they social services, health or education, the better able they’ll be to meet the demand the government is simply withdrawing from,” he said. To the extent the center can step up and help nonprofits sharpen their game, that will help them do more with limited resources, he said. The local nonprofit sector is also facing a wave of executive retirements in the coming years, Liebold said. “There would be a role for the center to help develop that next generation of nonprofit leaders to make sure the sector has the talent it needs to continue to deliver on its mission.” If the center’s services include a look at staffing needs, allowing nonprofits to hire more strategically and less reactively, that would be a great thing, said Gary Dembs, president of the Non-Profit Personnel Network, a local consultancy that helps nonprofits fill key positions. A key question is whether the Wilson foundation plans to provide grants to nonprofits to use the center, he said. “That’s the stretch the nonprofits need in order to be less hand to mouth,” Dembs said. The Wilson foundation does plan to make grants to nonprofits to help them tap the services at the new center, said Communications Officer Carly Strachan. But exactly how that would work hasn’t been decided, she said. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

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STRATEGY

19 67

FROM PAGE 3

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After the 2010 sale of DMC to the for-profit Vanguard Health Systems and then to Tenet Healthcare Corp., donations made over more than 100 years to benefit Children’s Hospital no longer could benefit the hospital directly since it was no longer charitable. The bulk of the assets, about $90 million, were transferred to Children’s Hospital of Michigan Foundation in 2011, and it continued to fund pediatric research by physicians at Children’s Hospital and others at WSU, while also supporting community benefit and medical education programs. The foundation’s board has been intent on broadening the foundation’s impact ever since. Six years and three CEOs later, it’s got a plan to do just that. “We still consider Children’s a major partner Lawrence Burns: and always will,” Still consider said President Children’s partner. and CEO Lawrence Burns, who joined the foundation a year ago. However, “since we are no longer a hospital foundation, we won’t be as disease-focused.” Instead, the foundation will largely focus on prevention and wellness “trying to keep children healthy and out of the hospital vs. a hospital-based foundation that is primarily dealing with kids in the hospital,” Burns said.

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Children’s Hospital of Michigan Foundation was asked to move from the hospital two years ago for renovations of its space, Burns said. Three staff members continued to occupy a single office at Children’s Hospital, but 14 others moved to the fifth floor of the Hutzel Professional Building in 2015. That location was not easily accessible, Burns said, noting most visitors never came to the office at the Hutzel site. Early in November, the foundation moved all 17 of its employees to 5,600 square feet in the Fisher Building. In addition to its new digs, the foundation developed a new brand platform and logo to establish its own identity. Over time, it might be a natural evolution to change the name, Burns said, but it’s not in the plan for 2018. “We really have not had any formal discussions about the name change. People have suggested ... just drop the word ‘hospital,’ but there’s been no discussion with the board on that,” he said. Within its three main areas of grantmaking, research, education and community benefit, the foundation this year picked five areas of specific focus: injury prevention, cancer and heart research, abuse and neglect, mental health and nutritional wellness. Its board recently approved $3.3 million in grants for pediatric health and wellness in its first round of funding for the 2018 cycle. Grantees include community-based nonprofits like Matrix Human Services for medical screening of children in its HeadStart program, Henry Ford Health System to help children with can-

cer-stricken family members work through their fear and anxiety, and Starfish Family Services to screen children up to age 6 for developmental delays so they can be addressed early. However, funding for research projects led by teams at Children’s Hospital and WSU still made up the majority of the new grants, Burns said. Half of the roughly $6 million in grants the foundation has made in recent years have supported pediatric research at those two sites, he said. The foundation won’t pull back on research grants to Children’s Hospital and WSU, Burns said. “We believe wholeheartedly the research we’ve been investing in over the years is world-class research and don’t see any reason to change that,” he said. But the foundation has begun to make grants to other universities. In October, it made a $90,000 grant to the University of Michigan for pediatric transplant research, marking the foundation’s first grant to a university other than WSU. The grant was made from a donor-designated gift to support this research at C.S. Mott Children’s Hospital, Burns said. The foundation also made a $15,000 grant to the Jed Foundation in New York to support a three-year research study on suicide prevention in Michigan college students. It recently made a grant to Michigan State University to fund music therapy at Children’s Hospital and is in discussions with Central Michigan University’s new College of Medicine about funding research. The statewide support is all part of the foundation’s aim to be a voice for children, Burns said. “Kids can’t vote, so an organization like ours also needs to be an advocate in Lansing.” The foundation has been meeting with state legislators to educate them about the foundation and what it supports. “Most of them think we are part of the hospital,” Burns said. “When we tell them we no longer are and are trying to be more community-based and to help kids, they begin to think we may be able to help the community they represent.” The foundation has set its eye on adding to its assets — nearly $119.6 million as of Oct. 31 — to support the expansion of its mission. In October, the foundation hired Chris Kelly, who has more than 28 years of experience in trust, estate and philanthropic planning, as its new vice president of development. Kelly most recently served as vice president and planned giving product specialist with PNC Institutional Asset Management. He also served as president of the Comerica Charitable Trust and Comerica Legacy Foundation. “As we emerge as a community foundation for children, we are going to play a major role in planned giving, estate planning for individuals who want to help children beyond Children’s Hospital (and) have the ability to designate their gift to any nonprofit that helps children,” in the foundation’s focus areas of community benefit, research and education, Burns said. The foundation will hold endowed funds individuals designate for local nonprofits, steward them and administer them annually. “I believe wholeheartedly that is what will make us unique and be our future,” Burns said. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

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

MICHIGAN DEPARTMENT OF TRANSPORTATION

The top photo shows I-375 recreated as a boulevard on the east edge, with four lanes in each direction. The bottom photo aligns the boulevard with the west edge, closer to Detroit’s central business district. The northbound service drive would remain as a two-way local roadway.

I-375

FROM PAGE 3

When released in spring for further public comment, the environmental assessment will ideally propose one preferred I-375 replacement, Loree said. But the options may still need refining afterward. In one of the two central options, the boulevard is aligned on the east edge of I-375, closer to residential areas; in the other it is aligned west, hugging the central business district. The plan will also likely reform the interchange with I-75, removing access to Gratiot from the east leg of the interchange and moving it to the west where I-375 and Gratiot intersect. It also adds ramps from Brush Street to assist with special-event traffic, brings several sharp curves up to standard and transfers the Madison Avenue exit from the left side to the right. The study also includes the option to simply rebuild I-375 as it is. That option is being used mostly as a tool for comparison, Loree said, and is unlikely to be chosen. MDOT is assessing how the new boulevards would affect everything from the character of surrounding communities to natural resources, traffic and public transportation, according to a project presentation. The boulevard plans stem from a 2014 study; they were chosen from a list of six alternatives, based on how they fit with the interchange, the fact that they opened up new space for development, and the east-west and riverfront connections they created. Redeveloping I-375 into a grade-level boulevard at a cost of up to $80 million was first floated as an idea in April 2013. Other ideas ranged from less redevelopment to simply maintaining the highway as it is currently. In January

I-375 project timeline Dec. 5: Public meeting to review plans, take input December-January: Review preliminary draft of environmental assessment Spring 2018: Environmental assessment to be made public, along with either the preferred I-375 alternative or two refined alternatives Spring 2018: A 30-day review period for the assessment, along with a hearing for public comment 2019: Estimated year in which design of roadway would start 2022: Estimated start of construction Source: Jonathan Loree, a senior project manager for MDOT

2016, officials delayed indefinitely a decision, citing a need for more study.

Path forward As MDOT, the city and the Federal Highway Administration modify the environmental assessment between now and spring, they are consulting with residential co-ops on the east side, apartment complexes, General Motors Co., Blue Cross Blue Shield of Michigan, Eastern Market Corp. and other downtown stakeholders. Challenges to be addressed include how future developments at the riverfront, jail site and former Brewster-Douglass site could impact the plan; congestion; and how a new roadway would impact surrounding communities. The changes would also open development opportunities on newly vacant land on either the east or west side of the boulevard, said Lewis of the city’s planning department. The state would likely sell or give

that vacant land to the city, he said. City officials “would prefer” to focus on east riverfront development plans nearby, so they probably wouldn’t aim for development on the former I-375 land in the short-term, other than landscaping, he said. That landscaping could be replaced with new construction later on. If the boulevard is oriented east toward residential areas, it would open up land for commercial use alongside the central business district, Lewis said. If the boulevard is oriented west, it would create space on the east side of the roadway that would allow the city to “create a wall of development, if you will, that completes that residential district ... provides an ending, a formalized cap, to the neighborhoods.” The I-375 project has $2.2 million budgeted for its preliminary engineering phase; $15 million for the design phase; and $150 million for construction, which would likely start in 2022, Loree said. About 82 percent of the funding is federal and 18 percent is coming from the state. The figures don’t yet reflect the two “practical alternatives” and are very likely to change, he said. Crain’s previously reported that the reconstruction south of Gratiot would cost $80 million. The $150 million estimate takes into account the I-75 interchange, as well. About 80,000 vehicles use I-375 daily, according to the state. The mile-long stretch is a main east-side link to I-96, the Lodge Freeway and the Detroit-Windsor Tunnel. It was built more than 50 years ago. Construction led to the razing of Detroit’s noted Black Bottom and Paradise Valley neighborhoods on the city’s lower east side. Annalise Frank: (313) 446-0416 Twitter: @annalise_frank

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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 700 // D E C E M B E R 4 , 2 0 1 7

700

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A chronology of Detroit’s tallest buildings

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buhl 366 ft

Penobscot 568 ft

ford bulding 275 ft

dime chysler house 325 ft

Penobscot 568 ft

book cadillac buhl 325 ft 366 ft

ford bulding book tower 275 ft dime chysler house 475 ft 325 ft

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book cadillac book tower325 ft 475 ft ren cen 727 ft

Penobscot 568 ft

buhl 366 ft

dime chysler house 325 ft

100 ford bulding Penobscot 275 ft 568 ft

dime chysler house 325 ft book cadillac ford bulding book tower 325ftft 275 475 ft

Penobscot 568 ft

book cadillac

book tower 475 ft

dime chysler house 325 ft

buhl

ford bulding book tower 275 ft 475 ft

ftren cen Detroit366Marriott at the 727 ft Renaissance Center 400 Renaissance Dr.

Book Tower 1265 Washington Blvd.

325 ft Penobscot ren cen 727 ft Building 645 Griswold St.

Owner: Heico Cos., Chicago.

Owner: Bedrock LLC, Detroit.

Owner: Triple Properties Inc., Toronto, Canada.

Owner: General Motors Co., Detroit.

Height: 349 feet.

Height: 366 feet.

Height: 475 feet.

Height: 568 feet.

Height: 727 feet.

Year completed: 1913.

Year completed: 1924.

Year completed: 1925.

Year completed: 1926.

Year completed: 1928.

Year completed: 1977.

Occupancy: 75%

Occupancy: 96.5%

Occupancy: NA

Occupancy: About 70%

Occupancy: Vacant

Occupancy: 57.5%

Occupancy: NA

Built by: Edward Ford Plate Glass Co.

Built by: Dime Savings Bank of Detroit

Built by: Book brothers

Built by: Buhl family

Built by: Book brothers

Built by: Simon J. Murphy

Built by: Ford Motor Co.

Builder status: Merged with Libbey-Owens Sheet Glass Co., creating Libbey-Owens-Ford Co.

Builder status: Merged with Merchants National Bank, creating the Bank of Michigan

Builder status: Lost buildings during the Great Depression

Builder status: Family still active in Detroit business community

Builder status: Lost buildings during the Great Depression

Builder status: Died a month after it opened

Builder status: Sold to General Motors in 1998

Buhl ren cen 727 ft Building 535 Griswold St.

Chrysler House 719 Griswold St.

Westin Book Cadillac Hotel 1114 Washington Blvd.

Owner: Zaid Elia & Matthew Shiffman, Birmingham.

Owner: Bedrock LLC, Detroit.

Owner: The Ferchill Group, Cleveland.

Height: 275 feet.

Height: 325 feet.

Year completed: 1908.

The ren cenFord 727 ft Building 615 Griswold St.

BUILDINGS FROM PAGE 1

No one knows how the Hudson’s building will fare, as its financial success depends on a complex web of factors including demand for residential space, cost of running the property, leasing other spaces to tenants, and a host of other factors. Also key factors: Local and national economic conditions, as well as the ownership group itself. Here’s a look at how the two hotels and five office towers that once held the title of “City's Tallest” have fared.

Detroit Marriott at the Renaissance Center, 400 Renaissance Drive

This building overlooking the Detroit riverfront has reigned supreme since it was built in 1977. With 1.16 million square feet, it is the largest of the Renaissance Center towers along the Detroit riverfront. The complex generally weathered Detroit’s downturn well, although The New York Times reported at the time of its sale to General Motors Co. that while it cost $350 million to build in the 1970s, the asking price was just $125 million by the 1990s. GM has poured more than $500 million in renovations into the entire complex, and bought it outright for $626 million in 2008.

AUTOS FROM PAGE 1

Stevens’ organization will attempt to tackle the subject of new talent at its annual MichAuto Summit on Dec. 5-6, engaging the region’s top leaders to discuss mobility culture, innovation and perspectives. Speakers include: John Karren, partner and leader of U.S. digital workforce transformation for PwC; Chris Thomas, founder and partner of Detroit venture capital firm Fontinalis Partners LLC; Elizabeth Griffith, director of engineering at Faurecia Interior Systems; Musa Tariq, vice president and chief brand officer at Ford; Michael Brosseau, president of Auburn Hills-based Brose North America; and Kristen Tabar, vice president of the technical strategy planning office at Toyota Motor North America; among others. Toyota has expanded its scope for

Penobscot Building, 645 Griswold St.

This building dominated the Detroit skyline for nearly a half century with its red orb on top. Its current owner, Triple Properties, paid just $5 million for its 1.2 million square feet in 2012 after it was repossessed by the lender, Capmark Financial Group, during a long foreclosure process with the New York-based Northern Group investors. When Triple bought it, the Penobscot was only around 50 percent occupied and that fell to as low as 18 percent. There have been improvements to things like HVAC, windows and elevators in the past several years, and it is now about 40 percent leased, one of the lower occupancy rates in downtown office buildings.

buhl 366 ft

Crain’s graphic by Lisa Sawyer; research by Kirk Pinho

Connected to the 13-story Book Building, the two buildings are expected to undergo a renovation into about 29,000 square feet of retail space; 50,000 square feet of conference and event space; 106,000 square feet of office space; 200 hotel rooms spread out over 106,000 square feet; and 95 residential units. A 400-space parking deck is also planned, according to a plan for so-called “transformational brownfield” financing submitted to the state by Gilbert’s team. Although some work has already taken place, the redevelopment is expected to begin in earnest in the winter of 2019.

Buhl Building, 535 Griswold St.

This haunting Washington Boulevard building, vacant for years, has had its share of challenges. According to Historic Detroit, which tracks Detroit buildings and architecture, amid all of its unique design history, it has also been the subject of legal battles, including a 1989 seizure by the senior lender and, in the mid1990s, an unpaid electricity bill leading to a threat to turn off the lights. It’s gone through a handful of ownership groups, and is today owned by Gilbert, who is planning a $311 million redevelopment.

The Detroit Historical Society says this building “has remained a hub of finance as well as the home of leading legal, accounting, and construction firms” for nearly a century since it opened. In recent years, the Griswold Street skyscraper has attracted investor attention after it was put up for sale and then placed under contract. First, a Canadian investor planned to purchase it, along with its 652-space parking deck, for $43 million and then spend another $18 million renovating it. But in the last several months, Gilbert put it under contract, sources told Crain’s in September. A deal for the building and parking deck still has not closed, a source

talent in recent years, Tabar said, seeking new educational backgrounds, from environmental and biomedical engineering to physics, physiology and anthropology. “As the industry changes from pure automotive to mobility, the type of technical people we need are limitless,” Tabar said. “When we attend career fairs, we’re encouraging students of all backgrounds to look at the broader mobility perspective because whatever they’re studying, there’s a chance that’s got a role in the future of automotive.” The region’s automotive sector hiring is now more in line with other large industries. Applied liberal arts, or human sciences, are now as essential as technical know-how for creating future products of all kinds. Google, Apple and Microsoft, for example, are some of the largest employers of anthropologists in the world. Adidas, Nike, Coca-Cola all engage in the human sciences.

Christian Madsbjerg and Mikkel Rasmussen, co-founders of New York management consulting firm Red Associates, noted in their 2014 book The Moment of Clarity: Using the Human Sciences to Solve Your Toughest Business Problems that the human sciences are changing companies’ business models. “The human sciences address the reality of people’s lives at their most complex and, quite frankly, most interesting,” the book reads. “Once you truly understand people’s behavior, you will begin to see your business landscape with a new clarity. You will recognize new opportunities and identify the sources of older, seemingly intractable challenges.” Mobility is fundamentally changing the automotive business model, where car culture is less about horsepower and sleek exterior design and more focused on the car’s ability to engage, entertain and educate its riders, said Ray Telang, managing part-

Book Tower, 1265 Washington Blvd.

said last week. The anticipated purchase price is not known.

Westin Book Cadillac Hotel, 1114 Washington Blvd.

This building has survived demolition efforts by two separate mayoral administrations but today is one of the more popular hotels in the city. In 2008, a $200 million renovation was completed of what was at the time the abandoned building. Today, it has more than 450 hotel rooms, 35 suites, four restaurants, three ballrooms and 16 meeting rooms, plus condominiums. Another $20 million rehab is expected next year. But there have been legal battles surrounding the project, including a $22 million payment settlement with the city of Detroit and its police and fire pension funds, which contributed $42 million to the 2008 renovation, Crain’s reported at the time of the settlement last year. It was one of the large-scale projects that kicked off a historic redevelopment push in the city, following a quarter-century of vacancy and neglect. Several hotel operators over the decades had run it before it closed in 1984.

Chrysler House, 719 Griswold St.

While the building flourished during Detroit’s heyday, even a $40 million renovation in 2002 couldn’t spare it from downtown’s problems, ner of PwC’s Detroit office. “Historically, the fit and finish, quality, design and the emotional experience were the deciding factors of car buying,” Telang said. “Fast forward 15 years, there’s data out there that suggests design becomes a lesser part of the buying experience. Now, when you get into the vehicle you want to know what it can do besides drive.” This new way of thinking about cars and talent isn’t restricted to the product. It’s also changing the shop floor. German manufacturing robotics manufacturer Kuka AG, whose North American headquarters is in Shelby Township, is hiring nearly as many software engineers as mechanical engineers. The robot supplier opened offices in Freemont, Calif., and Austin, Texas, to find requisite talent as robots become, well, smarter. “We have mobile robots now; robots that move and work alongside

according to Historic Detroit. Vacancy rose to as high as 40 percent and Wells Fargo NA foreclosed upon it two years before Gilbert purchased it. He paid $15.4 million for the property, the former Dime Building, in 2011, according to city property records and then got Chrysler Group to lease 33,000 square feet — the company’s first-ever office space in the city — in it in 2012. The 11th building Gilbert purchased on his buying spree downtown, it is essentially fully leased to Chrysler and Quicken Loans Inc.

The Ford Building, 615 Griswold St.

When it was built, the Ford Building leased up quickly, according to Historic Detroit. And decades after it was built, its occupancy rates were high, the website says, although tenants started fleeing following the Detroit uprising of 1967, punching the vacancy rate to as high as 50 percent at times. But the skyscraper has seen considerable activity lately as it has traded hands twice in the last 12 months after a quarter-century of ownership by the Paglia family, which sold it to Detroit-based Sterling Group in February following a protracted court battle. It was then purchased for $16.5 million in July and the new owners plan millions in renovations over the next several years. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB factory technicians,” said Jerry Osborn, president of Kuka Robotics. “To make this happen we’re hiring people to figure out how the data our robots need and create is valuable. We’re hiring people with Java skills at a robotics company. That never would have happened 10 years ago.” Finding that technological talent remains the region’s biggest challenge, and threat, Stevens said. “That’s why we’re focusing so much on the venture capital and startup scene in Detroit; we all collectively realize we have to build that up to incubate the right talent and the right innovation,” he said. Tabar said changing perception of the industry is the first step. “There’s a lot of up-and-coming talent out there that has an impression about automotive and hasn’t fully understood the transition to mobility,” she said. “This isn’t rundown, old manufacturing any more. It’s something much, much bigger.”

buhl book 366 ft 325 f

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

TAXES FROM PAGE 3

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For the Colony Arms project, the financing relied heavily on a $5 million tax credit for the historic building and $5 million from a 9 percent low-income housing tax credit that banks and corporations invest in to lower their tax bills, said Jim Logue, chief strategy officer for Cinnaire. The House and Senate’s plans to slash the 35 percent corporate income tax rate to 20 percent will “lower the value” of low-income tax credits for investors, likely leaving developers with less cash for construction costs, Logue said. “It’s pretty safe to say without the historic (tax credit) and a lower value for the 9 percent credit, that project probably would not have gotten done,” Logue said of the Colony Arms rehabilitation. The House plan, which passed Nov. 16, would eliminate the 4 percent Low Income Housing Tax Credit that developers get if they qualify for tax-exempt bonds, which also could be pared back. “If we lose tax exempt private activity bonds, we lose about 40 percent of the financing available for low-income housing,” Logue said. Senate Republican leaders were trying to scrape together votes late last week as they made a final push to deliver on the GOP and Trump’s 2016 tax reform campaign pledge. U.S. Sen. Gary Peters, D-Bloomfield Township, said the Senate’s potential elimination of the New Markets and historic preservation tax credits can’t be labeled “tax reform.” “It’s not reform because it’s dropping credits that don’t need to be reformed. If anything, they need to be extended permanently,” Peters told Crain’s. “It just shows that the bill is being drafted in a way that’s not thinking about the long-term consequences for investment in this country.”

Less low-income housing The Low Income Housing Tax Credit, which has been in the federal tax code since the early 1990s, is used for both construction of new housing units and the rehabilitation of existing low-income housing complexes. The Michigan State Housing Development Agency administers the low-income housing tax credit program in communities across the state. Both the Senate and House plans preserve a 9 percent tax credit for low-income housing. But that credit restricts how much MSHDA can award each year based on the state’s population. The state awards about $23 million in 9 percent low-income house credits annually and another $5 million in new 4 percent credits, said Andy Martin, director of rental development at MSHDA. Since the credits are good for 10 years, the two low-income housing tax credits amount to $280 million annually in subsidies for housing projects, Martin said. Investors buy the credits for about 90 to 92 cents on the dollar, generating construction cash for developers, Martin said. If corporate tax rates are lowered, banks and corporations would have less need for buying low-income housing tax credits. “There would be ultimately some

impact on the pricing,” Martin said. “We would see that number go down, which would ultimately impact the production that comes from the credit.” Housing industry groups predict the production of low-income housing could decline by 40 percent annually based on the proposed changes, said Ethan Handelman, acting CEO of the National Housing Conference, a Washington, D.C.-based affordable housing advocacy group. “Detroit’s one of the places where you would expect 4 percent credits and bond financing to really go far,” said Handelman, a native of Southfield. “This is a place where land costs are still pretty reasonable, where construction costs are not through the roof.” The House’s proposed elimination of the 4 percent credit could leave the owners of aging housing complexes with fewer options for rehabilitating units and keeping rents low, Seybert said. “If that tool is cut, we are going to preserve less affordable housing year after year,” Seybert said. “That will impact Detroit. That will impact Alpena [and] ... every city in the country.” Without new credits to preserve the subsidized rate structures for low-income individuals and families, those apartment complexes could go back to leasing units at market rate, displacing residents, Handelman said. If the Senate accepts the House’s elimination of 4 percent low-income tax credits, Handelman predicted the 9 percent tax credit would be used less efficiently. “It would compound the situation,” Handelman said. “The demand for 9 percent credits would increase, the supply of them wouldn’t and they wouldn’t be going as far.”

“It’s not reform because it’s dropping credits that don’t need to be reformed. If anything, they need to be extended permanently.” U.S. Sen. Gary Peters

Fewer financing options The New Markets Tax Credit is typically used for mixed-use development in cities like Detroit with high rates of poverty and low rates of private business investment. Eliminating them will leave developers with fewer options for financing economic development projects in Detroit, proponents say. Developers can claim a tax credit over seven years of up to 39 percent of their original investment. In Detroit, the federal subsidy is being used to leverage a variety of different kinds of investments. Cinnaire allocated $8 million in New Markets credits to finance equipment for the QLine street car’s Penske Tech Center on Woodward Avenue, Logue said. New Markets tax credits are part of the financing to turn the long-vacant Metropolitan Building near Grand Circus Park into an extended-stay hotel in downtown Detroit. Developers are expected to use New Markets tax credits for construction of a new 42,300-squarefoot Meijer Inc. store on East Jefferson Avenue in Detroit that is slated to open in 2019. One project in the works seeks to use New Markets tax credits to renovate or build new single family homes in Detroit, starting next year. Develop Detroit, a neighborhood-focused housing development company, plans to close in the first quarter of 2018 on a deal to

secure New Markets tax credits totaling up to 25 percent on a $5 million investment in 20 to 25 homes, said Ben Phillips, vice president of real estate for Develop Detroit. The new or renovated homes will be selected from stable neighborhoods across the city where a handful of blighted homes or abandoned lots can be a drag on the values of other homes, Phillips said. “It’s not going to be a solution to the single-family housing stock and the condition of the neighborhoods by any stretch,” Phillips said. “But it can be used to prime the pump so to speak.” Develop Detroit is trying to pilot the concept of using the New Markets credit to buy and build housing stock in the same way a manufacturer would use the credit to acquire inventory of a product to be sold, Phillips said. The Housing Partnership Network, a nonprofit that set up Develop Detroit, has already allocated New Markets tax credits for the project, so the housing investment won’t be jeopardized by congressional action this month, Phillips said. “Regardless of what happens with the tax bills, this pilot will proceed,” Phillips said. “But if we’re going to grow it and expand it year after year, we would need the New Markets Tax Credit to proceed.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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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 // D E C E M B E R 4 , 2 0 1 7

THE WEEK ON THE WEB

RUMBLINGS

BrewsterDouglass site to sell to Bedrock

Biz titans donate $100K each to Snyder fund

NOVEMBER 22-30 | For more, visit crainsdetroit.com

he Detroit Housing Commission has approved moving forward with a plan to sell the vacant property best known as the former site of the Brewster-Douglass housing projects for $23 million to an affiliate of Dan Gilbert’s Bedrock LLC for development of 700-plus new residential units for sale and lease. At 18 acres south of Mack Avenue and west of I-75, the property would be the largest currently under control of the billionaire founder of Quicken Loans Inc. and Rock Ventures LLC who has been buying and redeveloping dozens of greater downtown properties in the past several years, both buildings and vacant land. The sale, which needs to be approved by the U.S. Department of Housing and Urban Development, marks a departure from the city’s previous plan to apply again for a HUD Choice Neighborhoods grant of up to $30 million to redevelop the site along with three others in Eastern Market and Brush Park. The deal is expected to close next year. Arthur Jemison, Detroit’s director of housing and revitalization, said the city saw only a “very narrow avenue” to winning one of five implementation grants available and decided not to apply for the second time this year. “We are calling it Choice (Neighborhoods) by another means,” Jemison said of the city’s new approach. “That acquisition would enable the execution of a project that had a lot of similarity to the Choice proposal we made before.” The last time the city applied for the grant, more than 800 residential units were planned for the site. “Bedrock is excited about this opportunity and looking forward to working closely with the Detroit Housing Commission and the City of Detroit to transform this vacant site into a mixed-use neighborhood for all Detroiters,” Jim Ketai, CEO of Bedrock, said in an emailed statement. This new development would have more than 20 percent of its units for residents making 80 percent or less of the area median income, including some for residents making as low as 30 percent of AMI, or $14,500, according to a housing commission news release sent last Tuesday, the day after the commission board approved moving forward with the sale.

BUSINESS NEWS J Detroit has been named one of four finalist cities for two Major League Soccer expansion teams. The team behind the bid, Dan Gilbert and Tom Gores, is scheduled to make formal presentations to MLS Commissioner Don Garber on Wednesday in New York. J The Canadian port of entry at the base of the future Gordie Howe International Bridge has undergone $200 million in preparation work in anticipation of ground breaking next summer on the long-sought second bridge. On the Detroit side, the Delray neighborhood is less shovel ready.

G WAYNE STATE UNIVERSITY

Wayne State University finalized Thursday a 40-year, $1.4 billion partnership with Corvias to develop, finance and operate the school’s student housing. Under the agreement, the Rhode Island-based property management firm will create 841 new beds and renovate 368 beds in addition to managing the existing 2,950 beds on campus. A rendering shows the Anthony Wayne Drive Apartments project which began construction in September.

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

The number of stores Art Van Furniture Inc. added to its portfolio with its acquisition of Levin Furniture and Wolf Furniture Co.

$330,000 The amount the Motor City Re-Store program awarded to 44 businesses for facade improvements.

345

The number of people Yanfeng US Automotive Interiors plans to lay off at its Highland Park plant early next year.

J The groundbreaking for the $909 million redevelopment of the old Hudson’s site in downtown Detroit by Dan Gilbert's Bedrock LLC has been delayed by two weeks to Dec. 14. J Slows Bar BQ was expected to stop daily operations at its downtown Pontiac location on Sunday, with plans to reopen next year in late winter or early spring with a stronger concept. J The Michigan Workforce Development Agency awarded $5.85 million in skills training grants through its Skilled Trades Training Fund to Southeast Michigan businesses. J Atlanta-based Cumulus Media Inc., the parent company of WJR 760 AM, WDVD 96.3 FM and 25 other radio stations in Michigan, filed for bankruptcy last week. Also, WJR 760 AM is continuing its stay in the Fisher Building after parent company Cumulus Media signed a 10-year lease with the new owners of the historic Detroit skyscraper. J Ann Arbor-based Midwestern Consulting LLC planned to open a downtown Detroit office at Bamboo Detroit on Washington Boulevard last week. J Brighton-based Lake Trust Credit Union scored naming rights to Cleary University’s forthcoming athletic facility. Financial terms of the contract, which runs through 2028, were not disclosed. J Clement Brown Jr. aims to open his Three Thirteen clothing brand’s second store in February on Detroit’s

Avenue of Fashion after an extensive renovation of the building, which is owned by Bucharest Grill owner Bogdan Tarasov. J After nearly three years of planning, fundraising and bouncing around basements in the city, Pingree Detroit started settling into its New Center area home and selling its first line of leather goods last in October. J The American Center for Mobility signed a deal for Intertek Group PLC to operate and maintain the autonomous vehicle testing site in Ypsilanti Township. J Founders Brewing Co. plans to open its $4 million Midtown Detroit taproom Monday, after buildout began this summer. J Qualcomm Inc. opened its new Thinkabit Lab in the Michigan Engineering Zone in Detroit at a private event last Thursday. The program’s goal is to help close the science, technology, engineering and mathematics (STEM) skills gap. J A planned $8.1 million mixed-use redevelopment of the former B. Siegel Co. department store building at Livernois Avenue and Seven Mile Road in Detroit secured approval for nearly $1 million in brownfield financing plus a $1.3 million performance-based grant. J Brose North America Inc. plans to invest $105 million over five years at its U.S. headquarters in Auburn Hills and its New Boston manufacturing plant, adding 300 jobs. J The Detroit News is offering buyouts to its staff as the daily newspaper said it plans to “realign our coverage and our resources” to prepare for “a tight budget in the year ahead,” according to an email sent to employees obtained by Crain’s. J Dressing the Spirit of Detroit statue in a jersey now costs $25,000 instead of $6,500, and is reserved for those who win national championships.

OTHER NEWS J The Coalition on Temporary Shelter launched a $5.5 million renovation project to convert its building in Detroit’s Fitzgerald neighborhood into a permanent emergency shelter for families called Peggy’s Place. J Now that the QLine streetcar system is open, the annual Detroit holiday event Noel Night is moving its center from Woodward Avenue, which the city doesn’t plan to shut down, to Wayne State University’s campus.

ov. Rick Snyder’s annual fundraiser for an organization that is actively promoting his “Michigan comeback” legacy drew attention last week for collecting $100,000 checks from top Detroit business leaders just two days after Lt. Gov. Brian Calley launched his campaign to succeed Snyder. Snyder’s Making Government Accountable fund, a 501(c)4 educational organization, held its annual fundraiser Nov. 30 at an undisclosed downtown Detroit location. The host committee included Ford Motor Co. Executive Chairman Bill Ford Jr., Ilitch Holdings Inc. CEO Chris Ilitch, Penske Corp. Chairman Roger Penske and William Parfet, the former chairman and CEO of MPI Research, a Mattawan-based drug and chemical testing laboratory. The cost to get into the “main event” with Snyder was $100,000. A separate $10,000 “briefing” with the term-limited governor was held before the main event, according to a

copy of an invitation obtained by The Associated Press. Snyder used the Making Government Accountable fund in the 2016 election cycle for educating the public on preferred state House candidates that his Relentless Positive Action PAC made political donations to. The governor has not ruled out using the fund to promote Calley’s candidacy to succeed him while boasting about his own record of economic progress and governing. Calley held two campaign-organized events last week with Snyder that were centered on promoting their economic “comeback” legacy, including one stop Nov. 27 at Lightweight Innovations for Tomorrow (LIFT) and IACMI-The Composites Institute in Detroit. Snyder later attended a fundraiser for Calley’s gubernatorial campaign at the Orchard Lake home of Mark Mitchell, co-founder and managing director of the Birmingham private equity Lorient Capital LLC.

DELOITTE LLP

Deloitte LLP’s Michigan Board Ready Women program’s steering committee members (from left): Leslie Murphy, president and CEO of Murphy Consulting Inc.; Nancy Schlichting, former CEO of Henry Ford Health System; Faye Nelson, vice president of DTE Energy Co. and board chair and president of the DTE Energy Foundation; and Lisa Payne, former vice chairman and CFO for Taubman Centers Inc.

Program to help women make boardroom inroads

eloitte LLP brought Michigan women business leaders together this year to help them get into boardrooms. The Board Ready Women Program caps off its first Michigan run on Thursday. The series of four quarterly sessions began this past winter in Detroit with curriculum assistance from Jones Day and Korn Ferry. With the sessions, New York Citybased Deloitte aims to prepare women in senior roles for corporate boardrooms. Women occupy just 15 percent of board seats at Michigan’s top 100 companies by market capitalization, according to a study conducted by Wayne State University for the Inforum Center for Leadership. “Once you’ve decided that service on a public company board is something you aspire to, part of the purpose of this class is to develop your own game plan for being positioned,” said Mark Davidoff, Deloitte’s Michigan managing partner.

Topics ranged from governance structure to fiduciary responsibilities and cybersecurity. The last Michigan session this year will review participants’ “board bios,” short documents meant to pitch them as board candidates, Davidoff said. The program previously took place in Seattle and Pittsburgh, and is expected to expand to 10 Deloitte markets by the end of 2018, Davidoff said. There have been discussions on a second Michigan class, but he said it probably wouldn’t start until 2019. Susan Smyth, chief scientist for global manufacturing at General Motors Co., said earlier this year that a strength of the class was diving deep into board duties an executive may not deal with regularly, such as regulatory, cybersecurity and liability issues. It also provided “a very interactive, nonthreatening environment where … anecdotes and discussions specific to challenges women have experienced can be expressed,” Smyth said.

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