Crain's Detroit Business, Dec. 18, 2017 issue by Crain's Detroit Business

DECEMBER 18 - 24, 2017

United Physicians at odds with Beaumont group

Ex-Ford Field chef dips into chocolate business

Possible split among huge practices. Page 3

Page 4

Nonprofits

Transportation

A bridge too many?

$20M gift to expand Solanus Casey Center By Sherri Welch swelch@crain.com

LARRY PEPLIN FOR CRAIN’S

A truck makes its way across the Ambassador Bridge between Detroit and Windsor.

Falling border crossings raise questions about need for new span By Chad Livengood clivengood@crain.com

A consultant told Michigan and Canadian officials in 2010 that traffic at the Detroit and Port Huron international border crossings would top 20.8 million trips in 2016 — data that was used as one of the central economic arguments for a second Detroit River bridge.

But the traffic never materialized as total passenger and commercial truck trips across the Ambassador Bridge, Detroit-Windsor Tunnel and Port Huron’s Blue Water Bridge fell to 15.8 million last year — the lowest level since 2010 and three-quarters of the trips that were projected with four crossings. The construction of a long-planned

and intensely litigated second span in Detroit — dubbed the Gordie Howe International Bridge — is entering a critical phase as planners promise ground will be broken by next summer amid looming questions of how it will ultimately be financed in the face of toll-reliant traffic not keeping pace with past SEE BRIDGES, PAGE 21

Need to know

 Border crossing traffic in 2016 in Detroit and Port Huron was at its lowest point since 2010  Mexico surpassed Canada in 2015 in the value of goods imported into the U.S.  Renegotiations of NAFTA seen as critical to future traffic growth for new Detroit River bridge

People

A power couple puts down roots in Detroit Need to know

Kirk Pinho

kpinho@crain.com

In the spring of 2016, Moddie Turay was touring a 5,500-squarefoot home in the Indian Village neighborhood. His wife, Melanca Clark, was also there — in a modern way. It wouldn’t be long before one of Detroit’s most influential couples would make their presence felt in a city bubbling with real estate and crainsdetroit.com

 Moddie Turay, Melanca Clark among key city power brokers  Turay left the DEGC last month to start his own real estate development company  Clark runs the Hudson-Webber Foundation

nonprofit activity following a brutal Chapter 9 bankruptcy. SEE COUPLE, PAGE 20

Vol. 33 No XX

$2 a copy. $59 a year.

Moddie Turay and Melanca Clark at their Detroit home. 8, 2017 // D E C E M B E R 1 OIT BUSINESS CRAIN’S DETR

FOCUS

T: OUTLOOK 2018

NEWSPAPER

SPECIAL REPOR

ters in 2018 Charting uncertain wa

as nly one thing is certain we head into 2018: Nothing is certain. Midterm care. Health reform. Tax an outsized elections. All could have

On a new approach to planning in the neighborhoods

, City of Detroit Maurice Cox, Planning Director Jef-

derway next year in Banglatown, he city’s planning director, ferson-Chalmers and Russell Woods/ inMaurice Cox, has been devel- Nardin Park. strumental in Detroit’s and neighof planopment, redevelopment “We’ll start the process efforts since a framework borhood revitalization ning with residents for to him named t in those arMayor Mike Duggan to guide developmen 2015. is that you have the position in February at the eas. ... The takeaway Cox, who has held positions a framework for developof Architec- to create in an orderly and Tulane University School happen to ment Syrand ture, the University of Virgina hands- predictable fashion so that people as a acuse University, is known reacting to ad hoc developafraid to get are not frameon director who’s not ment efforts. The planning there involved in the design process. rk allows us to say, ‘Okay,

across the region the coming viewed leaders impact on Michigan in — and from markets and de- and the state year. And many businesse a law — to see what es in a ing to marijuan cision-makers find themselv is in store. We hope their they wait to they think holding pattern while you see the course help will insights see what happens next. a little more clearly. we inter- ahead For this special report, PHOTO GETTY IMAGES/ISTOCK

focused A planning vision ’s on “expanding people housing choices in ially neighborhoods, essent can planning for how you are who retain those folks them for there and provide they have the services that long since had to go elsewhere to find.”

LARRY PEPLIN FOR CRAIN’S

Art Van Furniture Founder Art Van Elslander is donating an estimated $20 million to expand the Solanus Casey Center and its campus to enhance the Catholic pilgrimage site and revitalize the lower eastside Detroit neighborhood around it. Since mid-November when the late Father Solanus Casey was beatified, putting him on a path to sainthood, the number of people coming to the center from around the re- Need gion, other states to know and Canada has  Art Van Elslander to make doubled. Casey, an gift estimated at American-born $20 million to Capuchin priest expand Solanus who died in 1957, Casey Center was beatified at a  The plan will Nov. 18 Mass in create a larger, Detroit. Known more welcoming for his great faith, campus for the attention to the thousands of new sick and ability as visitors coming to a spiritual coun- the site selor, he is the second Ameri-  It will also seek can-born male to to revitalize the be beatified, ac- surrounding cording to the neighborhood Catholic News Agency. Finding parking near the Solanus Casey Center and affiliated Capuchin Soup Kitchen was already an issue, said Father David Preuss, director of the Solanus Casey Center and one of 17 Capuchin friars who call the adjacent St. Bonaventure Monastery home. That’s an immediate need the gift will help fill. But beyond that, Art Van Elslander’s gift will allow the center to accomplish “some of the things we could only dream about in the past,” Preuss said. The center had been working to acquire city-owned properties to create more parking for the past three years, he said. But it had made little progress. SEE CENTER, PAGE 20

INSIDE

Through the crystal ball on 2018 << We asked an array of experts what will matter next year. Here’s what they told us. Page 10

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 1 8 , 2 0 1 7

MICHIGAN BRIEFS

INSIDE

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

Survey ranks Michigan 35th in overall health

Michigan slipped one spot from last year to 35th in the nation for overall health in 2017, according to an annual ranking from United Health Foundation. It also fell from a ranking of 31 in drug deaths last year to 35 this year. In addition, poor rankings in smoking, violent crime, public health funding, air pollution and excessive drinking landed the state in the bottom half for health in the nation. Michigan’s score has fluctuated only slightly in the past few years, ranking 35th overall in 2015 and 37th in 2012. But the state scored well in a handful of categories, including sixth in the number of primary care physicians, eighth in adolescent immunizations, 11th in number of uninsured people and 12th in infectious diseases. The 28th annual America’s Health Rankings survey assesses each state based on 35 measures related to behavior, community and environment, policy, clinical care and outcomes data. The most recent report reveals the nation’s serious public health problems, such as increases in premature death and disproportionate concentration of health care pro-

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KEITH CRAIN

viders, according to the report’s executive summary. The increase in drug-related deaths in Michigan can be at least partially attributed to its opioid problem, which is part of a nationwide epidemic. Prescription pill abuse is rattling local businesses and has prompted insurance companies to cap the number of pills per patient. Wayne and Oakland counties, as well as the city of Detroit, are suing big pharmaceutical companies to stem the problem.

OPINION

House OKs bills to combat opioid abuse

Legislature cuts jobless fraud fines

Doctors would be required to check a prescription database before prescribing painkillers and other powerful drugs under legislation that won final approval last week, the latest attempt to combat Michigan’s deadly opioid epidemic, the Associated Press reported. Other bills passed last Wednesday would limit the amount of opioids that could be prescribed, require a “bona fide” physician-patient relationship to dispense drugs and require that those being treated for an overdose receive information on substance abuse services. The requirement for health providers to use the recently upgraded Michigan Automated Prescription System would take effect in June, with some exceptions. The electronic

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PEOPLE

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ress” is being made. Michael McDaniel, who is overseeing the program, said crews are finding some homes have copper service lines that don’t need to be replaced.

Doctors would be required to check a prescription database before prescribing painkillers and other powerful drugs under legislation that won final approval last week.

database tracks schedule 2-5 drugs. State officials say improvements to the system have put Michigan at the forefront of prescription drug monitoring technology. A bill sponsor, Republican Sen. Tonya Schuitmaker of Lawton, said physicians would be able to instantaneously check a patient’s prescription history — a process that she said would take two seconds instead of 10-15 minutes like before. “It will cut down on two problems we’re seeing — pill mills and doctor shopping,” she said. “I think this will be the strongest reporting system in the nation.”

The main bill passed 86-24 in the GOP-led House and 36-1 in the Republican-controlled Senate.

Pipes replaced in Flint

The mayor of Flint said more than 6,200 water pipes have been replaced as the result of the city’s lead crisis, the Associated Press reported. Mayor Karen Weaver gave an update last Tuesday. The city and the state of Michigan agreed earlier this year to replace at least 18,000 lead or galvanized-steel water lines by 2020. Weaver said “significant prog-

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The Michigan Legislature last Wednesday unanimously voted to cut what are believed to be the nation’s highest financial penalties for collecting excessive unemployment benefits, finalizing bills that were proposed after more than 40,000 people were wrongly accused of fraud in a two-year period, the Associated Press reported. The measures, which will be signed by Gov. Rick Snyder, also take aim at “impostors” who file fake claims. In many cases between 2013 and 2015, claimants did not commit fraud and — to compound being forced to pay restitution — were hit with interest along with penalties above the overpayment. About $21 million has been or is being refunded.

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Pensions

Sports Business

Is Major League Soccer a genuine major league?

Local officials say they can rein in retiree benefits costs

bshea@crain.com

By Lindsay VanHulle

By Bill Shea

Detroit has four pro sports teams from the four long-established U.S. professional leagues, and may get a fifth big-time team if Major League Soccer grants it a club in its current round of expansion. But is MLS truly a major league on par with the National Football League, Major League Baseball, National Basketball Association, and National Hockey League? Or is MLS akin to a second-tier league, in terms of revenue and audience, closer to the reach of the Women’s National Basketball Association or Arena Football League? A look at various criteria suggests that MLS is closer to the four older leagues, but it’s clearly the most junior of the bunch. MLS, which began play in 1996, trails the four legacy pro leagues in nearly every category, such as league revenue and the size of its broadcast rights deals. MLS has acknowledged it’s still not profitable, and its revenue numbers, based on estimates gathered by Forbes, are perhaps the most glaring difference between it and the other leagues: nNFL: $14 billion nMLB: $10 billion nNBA: $8 billion nNHL: $4.43 billion nMLS: $644 million Still, MLS is light years ahead of the sports underneath it, which don’t have the financial and audience reach of the soccer league. Adding Detroit would give one of the few media markets it lacks in the top 20 in the U.S. (Detroit is 13th). The league’s owners began debating four expansion bids on Thursday, and it was unclear at press time Friday

Crain’s Detroit Business/Bridge Magazine

With the state’s failure to win more control over how local governments fund their retirement systems, the focus turns to what exactly cities will do to fix the problem. Talk to officials in Saginaw, and they will tell you they’ve been working on this budget-sucking dilemma for at least seven years. Saginaw’s battle to get out from under unfunded legacy debts is familiar to cities across Michigan. Saginaw has $375 million in unfunded retiree health care and pension obligations, according to the findings of a state task force. Its pension system is about 54 percent funded, according to the report. As for health care benefits, City Manager Tim Morales tells Bridge, “We pay as we go.” But the city is making quiet, if hard-won, progress. Saginaw leaders and employee unions negotiated increased copays and contributions GETTY IMAGES

when a decision could come on adding two markets to play in 2020 (with two more following in 2018 to play in future years). MLS has shown steady growth and relative stability in its 21 seasons, and it shows growth in revenue, corporate sponsorship, attendance, TV audience, and social media reach. Demographics favor MLS, too: The league has the youngest live-game audience, with the average age being 40 for the 2016 season, according to Sports Business Daily. The MLB is the oldest average at age 57, followed by the NFL (age 50), NHL (age 49), and NBA (age 42).

Industry observers say MLS is certainly a major league, a young one with a bright future. “I think they’re there, but they’re at the bottom of the hierarchy,” said Andrew Zimbalist, a professor of economics at Smith College and author of several sports finance books. “They have most of the accoutrement and trappings of a major league sports. I think it will, in another five to 10 years, surpass the NHL.” However, within the soccer community, MLS isn’t a major league to many, Zimbalist added. SEE SOCCER, PAGE 17

The numbers Major League Soccer

National Football League

Major League Baseball

No. of teams: 22 (planned expansion to 28)

No. of teams: 32

No. of teams: 30

Year founded: 1920

Year founded: National League in 1876, American League in 1901; single legal entity since 2000.

Year founded: 1996 League revenue: $644 million Average team value: $223 million Average league-wide per-game attendance: 22,106

League revenue: $14 billion Average team value: $2.5 billion Average league-wide per-game attendance: 68,400

Regular-season schedule: 34 games

Regular-season schedule: 16 games

Average player salary: $326,129.23

Average player salary: $2.7 million

Most recent expansion fee: $150 million (two TBA teams)

Most recent expansion fee: $700 million (Houston Texans, 2002)

Most recent team sale: $68 million (Columbus Crew, 2013)*

Most recent team sale: $770 million (Jacksonville Jaguars, 2012)

TV contracts: Fox, ESPN, and Univision are paying a combined $720 million from 2015-22.

TV contracts: Fox, CBS, NBC, and ESPN are paying a combined $27 billion through 2022.

MUST READS OF THE WEEK

Arbor Drugs founder Eugene Applebaum, who made a name for himself as an entrepreneur and grew the Arbor Drugs chain from a single store, dies at age 81. Page 7

League revenue: $10 billion Average team value: $1.54 billion Average league-wide per-game attendance: 30,132 Regular-season schedule: 162 games Average player salary: $4.47 million Most recent expansion fee: $150 million (Arizona Diamondbacks, Tampa Bay Devil Rays, 1998) Most recent team sale: $1.3 billion (Miami Marlins, 2017) SEE NUMBERS, PAGE 17

Need to know

J Municipal retirees’ pensions across the state are underfunded by an estimated $7.5 billion J State fails to win more control over how local governments fund their retirement systems J Focus turns to what cities will do to fix the problem

for health care, including in retirement. Management of the city’s police and fire pension system was transferred to the Municipal Employees’ Retirement System, saving an estimated $200,000 a year in administrative costs. The city closed defined-benefit pensions in 2000 and negotiated a hybrid plan for new hires with capped city contributions. Retirement health benefits for new hires were eliminated after 2009 in favor of contributing to health savings plans for them, Morales said. SEE PENSIONS, PAGE 18

Health Care

United Physicians mulls departure from Beaumont Care Partners By Jay Greene jgreene@crain.com

In a major rift with hundreds of independent doctors, eight-hospital Beaumont Health appears to be on the verge of losing Bingham Farmsbased United Physicians, the largest physician organization in metro Detroit with 2,386 physicians that historically has been aligned closely with Beaumont’s Troy and Royal Oak hospitals. Part of the rift has to do with Beaumont Health signing a narrow provider network contract for the individual market in mid-September with Priority Health. Priority also has signed similar contracts in Southeast Michigan with St. Joseph Mercy Health System and St. John Providence Health System and participating doctors. Open enrollment for the individual market ended Dec. 15. Michael Williams, M.D., UP’s CEO, told Crain’s the Priority Health contract excludes hundreds of doctors on Beaumont’s medical staffs and those affiliated with UP. He said he and other UP doctors were not informed of the contract talks and heard about them secondhand. Williams said UP has notified Beaumont Care Partners’ interim

Need to know

JJBeaumont’s largest affiliated physician organization is taking steps to withdraw from participation in system’s clinically integrated network JJDispute over narrow network contract with Priority Health and organizational disputes JJBeaumont says independent doctors can request participation in network if they qualify

Executive Director Ryan Catignani that it is in the process of withdrawing from BCP, Beaumont’s clinically integrated network organization. BCP includes Beaumont’s eight hospitals and about 2,500 of Beaumont’s 5,000 physicians on its medical staffs. Catignani confirmed in a Dec. 1 letter to Beaumont doctors that UP had informed BCP on Oct. 23 that it planned to pursue an independent course. “Although the parties have been working cooperatively to formalize this change, the normal BCP approval processes for contracts, including the Priority Health contract, has been suspended as a result,” Catignani said. SEE BEAUMONT, PAGE 19

Chad Livengood

Breast cancer detection

A matter of priorities — and optics. Page 8

Delphinus’ system raises funding, enters clinical trials. Page 6

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PHOTOS BY GUILT CHOCOLATES

The partners in the new Guilt Chocolates bonbon makers that will launch next year are Joe Nader, Jennifer Gratz, and Scott Breazeale.

AMERICAN

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Former Ford Field chefs dip into chocolate business

By Bill Shea bshea@crain.com

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Joe Nader has spent the past dozen years feeding literally millions of Detroit Lions fans at Ford Field, along with all the players, officials, VIPs and Ford family that owns the team. He quit his job as the stadium’s executive chef for Lions concessionaire Levy Restaurants at the end of November to instead take on the life of an upscale chocolatier. He and Scott Breazeale, the No. 2 chef at Ford Field and Nader’s friend since their days at Plymouth Canton High School, are launching a bonbon manufacturer called Guilt Chocolates. “We’ve been hatching a plan in the back our head for a long time, as every chef wants to do,” Nader said. They quit the Ford Field operation, which has about a hundred culinary staff atop about 1,500 game-day concessions staff, because their financing for the new business came through in November, Nader said. They’re currently seeking a downtown retail space, either a stand-alone location or within a high-traffic building, he said. There’s no date yet for retail opening, but they’ll be producing bonbons by spring for commercial customers. They bought a 3,000-square-foot building in Redford Township for an undisclosed sum and are renovating it as a kitchen and for specific chocolate production needs, which they intend to have operational by March. On Monday, they’re headed to Buffalo to visit an importer of high-tech Italian-made chocolate tempering machines, which they intend to buy, Nader said. They described their intended product as “really high-end, glossy, hand-painted, colorful, ultra-shiny bonbons” and they want their retail location to be akin to a gallery or upscale jewelry store. “They really are works of art,” Breazeale said. The business strategy is to generate revenue by wholesale work, the retail location downtown, and via custom work for local restaurants. For example, they’re already crafting a bon bon for

Need to know

Ford Field’s top chefs are opening a bonbon company J

Production will be in Redford

Chocolate making begins by March, and retails sales in a downtown location later J

Guilt Chocolates products are described as “really high-end, glossy, hand-painted, colorful, ultra-shiny bonbons.”

Flowers of Vietnam in Corktown when it reopens in January after renovations, Nader said. The work with local restaurants would be proprietary creations, they said. “That would be their own thing and we wouldn’t use that in our own collection or with anyone else,” Breazeale said. The duo has a three-year plan, but declined to discuss details about financing and revenue expectations. Nader said they already have a distributor deal with Chef Source in Canton Township, which works with restaurants, hotels, country clubs, etc. In the local artisanal chocolate market, Guilt Chocolates will compete to some degree with Alexandra Clark’s Bon Bon Bon, which has locations in Detroit and Hamtramck after launching in 2014. “There are a few really nice chocolate companies making names for themselves. She was really on the front end of doing that stuff,” Breazeale said, adding that they intend to differentiate their style to stake out their own niche. “There’s nobody really doing this in the

Detroit area right now so we’re confident.” Guilt Chocolates will rely on its founders’ long experience. Nader, 47, was hired as executive chef for the Lions and Ford Field in 2005 after working as top chef for multiple restaurants and a country club in California, including the W Hotel in San Diego. He began his food career as a dishwasher and busboy at Pizza Hut. Breazeale, 48, earned notice by becoming a finalist on the Food Network’s “Halloween Baking Championship” in 2015. Before going to work at Ford Field four years ago, he was executive chef at John D Bistro in Ferndale, and he worked as sous and pastry chef at the Novi Chop House. A third partner in Guilt Chocolates is Jennifer Gratz, the senior sales manager at Detroit’s Westin Book Cadillac Hotel, Nader said. The trio will seek to capture a little local share of the U.S. chocolate market, which is the world’s largest and forecast by industry experts to reach $30 billion in sales by 2021. To generate revenue while the bon bon operation ramps up, the chefs run a nutrition catering business called Hardcore Meals for crossfit athletes. That will be run out of the Guilt Chocolates building in Redford alongside the bonbon company, Nader said. In the meantime, Nader and Breazeale no longer have to quarterback the complex, massive game-day concessions operation for Lions games, quitting because launching the new company was taking another 30 to 40 hours a week. “It got to the point we couldn’t work on development plus that job,” Nader said. “It wouldn’t have been fair to the Lions or Levy to stay there while basically working another job. It was bittersweet. I have a very strong bond not only with Levy but with the Lions and Ford Field. It wasn’t an easy decision, but it’s every chef’s dream. It was something Scott and I had been talking about since we were kids in high school.” Bill Shea: 313 (446-1626) Twitter: @Bill_Shea19

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preserved.” To help spread The Life Chest Adventures message, Randy Holloway of RHE Entertainment produced a short film that premiered Dec. 7 at the Palladium Emagine Theater in Birmingham. Michigan The film shares the magic of The Life Chest, where young April, the great-great-great granddaughter of Kim Yost, discovers that she has a special gift. April is able to travel through time when she focuses on a special keepsake from inside a Life Chest held tightly in her hand. Through this discov-

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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 1 8 , 2 0 1 7

Delphinus’ breast cancer system enters clinical trial By Kurt Nagl knagl@crain.com

DELPHINUS

Delphinus started this summer a large clinical trial of its signature product, the SoftVue System, in screening for breast cancer in women with dense breast tissue.

In the past few years, Delphinus Medical Technologies Inc. has doubled its employee count, escalated research efforts and raised $80 million in venture capital to develop its innovative ultrasound technology that it considers a game changer in breast cancer detection. Now, the Novi-based company is out to prove it. It started this summer a large clinical trial of its signature product, the SoftVue System, designed to detect breast cancer in women with dense breast tissue. It is being tested at eight locations across the country,

Need to know

J Novi-based Delphinus raised $80 million in total venture capital J

Began clinical trials this summer

J Plans to implement go-to-market strategy by late 2018

including the Breast Care Center at Beaumont’s Medical Park in Dearborn. Delphinus CEO Mark Forchette, 58, said he is confident the trial will be successful and result in approval from the U.S. Food and Drug Administration for primary screening of breast cancer, a much broader ap-

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proval than the FDA clearance it received in 2014 for diagnostic screening. Erik Gordon, 58, a professor at University of Michigan Ross School of BusiMark Forchette: ness and expert Confident trial will in technology be successful. commercialization, said Delphinus is on the classic path for breaking into the biomedical industry. “Diagnostic approval is the field goal; primary screening is the touchdown,” Gordon said. With diagnostic approval, the SoftVue System is used only in cases when a woman or doctor detects breast cancer. Primary screening approval allows the technology to be used in routine screenings that all women are advised to receive at a certain age. “The way that works commercially is that it’s a much larger market,” Gordon said. Given the glaring drawbacks of mammograms — uncomfortability, exposure to radiation and frequent false positives — new breast detection technology could be “a big step forward in women’s health,” Gordon said. If SoftVue clears the second FDA hurdle, commercializing the technology comes next. “We would have never launched this trial if we weren’t confident our system was going to do what we said it was going to do,” Forchette said. Delphinus’ technology was spun out from Detroit-based Karmanos Cancer Institute in 2009 after 10 years of research. The SoftVue System resembles a medical exam room table, with a hole near the top where a patient’s breasts are placed, immersed in water and surrounded by a ring containing thousands of ultrasound sensors that generate data to be converted to 3-D images. The exam lasts 2-4 minutes and there is no radiation. Forchette said the system is more effective than mammograms, considered the gold standard in breast cancer detection but often less successful in women with dense breasts. The company completed its final round of financing in the spring, bringing the total to $80 million. The clinical trial, which is costing the company $10 million to $15 million, is expected to be complete at the end of 2018 or beginning of 2019. Forchette did not disclose terms of the deal with Beaumont, but said Delphinus employees handle the installation and maintenance of the device. Three Beaumont technologists are trained to administer the exam and four Beaumont physicians are trained to analyze test results, said Melinda Begeman, a research nurse on the project. A clinical research associate and nurse from the hospital are also participating in the project. Begeman, 59, said the trial targets women with dense breasts who are doing their yearly mammogram tests. If they opt in, they are tested with the mammogram and SoftVue systems, and the results from each are studied side by side. The women return for another mammogram a year later to end the trial. SEE DELPHINUS, PAGE 7

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Arbor Drugs founder Eugene Applebaum dies at 81 By Sherri Welch

Did you know, 75% of people surveyed trusted doing business with a family-owned company versus with a big business?

swelch@crain.com

Arbor Drugs founder Eugene Applebaum, who sold his drugstore chain to CVS in 1998 and had a long record of philanthropy, died Friday at his Bloomfield Hills home. He was 81. Applebaum made a name for himself as an entrepreneur, growing the Arbor Drugs chain from a single store, Civic Drugs, opened in Dearborn in 1963, to 208 stores by 1998 when CVS bought the company. By then, the company was the c o u n t r y ’s eighth-largest drugstore chain. Applebaum and his wife had a decades-long legEugene acy of supporting Applebaum: health, education Grew Arbor Drugs. and arts and culture in metro Detroit with gifts to institutions including Wayne State University, the University of Michigan and its entrepreneurial programs, the Detroit Institute of Arts, Detroit Symphony Orchestra, Michigan Opera Theatre and Beaumont Health. Following the sale of Arbor, Applebaum made a $5 million gift to his alma mater, Wayne State University. The donation helped fund construction of the Eugene Applebaum College of Pharmacy and Health Sciences building. In 1999, Applebaum co-founded the Hermelin Brain Tumor Center for Henry Ford Health System in Detroit, and in 2006, Beaumont Hospital, Royal Oak opened the Marcia and Eugene Applebaum Surgical Learning Center, the first facility of its kind in the country. The same year, he and his wife, Marcia, announced the largest capital gift in the history of metro Detroit’s Jewish community, leading to the naming of the 195-acre Eugene and Marcia Applebaum Jewish Community Campus in West Bloomfield Township. Along with his wife, Applebaum is survived by his daughters Lisa and Pamela and four grandchildren.

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DELPHINUS FROM PAGE 6

A total of 10,000 women must be tested in the clinical trial nationally, Forchette said. He said the trials are still in the beginning stages and expects to hit that number in a year. In addition to making new strides with its SoftVue technology, the company also made a move last year from its Plymouth Township home in the Michigan Life Science and Innovation Center to a 21,000-square-foot space at 45525 Grand River in Novi, tripling its space. Forchette said there are no plans to seek more funding at this point and the objective is to implement a go-tomarket strategy by late 2018. “It’s critical for us to provide a compelling picture that makes (hospitals) want to adopt this,” Forchette said. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

Contact Jill Miller at jmmiller@varnumlaw.com

Detroit

Novi

Grand Rapids

Kalamazoo Ŷ Grand Haven

Lansing

Ann Arbor

Hastings

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 1 8 , 2 0 1 7

OPINION

COMMENTARY

A matter of priorities — and optics T hursday provided a striking contrast of priorities and optics in the Detroit “comeback” nar-

rative. Mortgage and real estate mogul Dan Gilbert broke ground Thursday on what will become Michigan’s tallest building. The $909 million skyscraper is part of Gilbert’s planned $2.1 billion downtown Detroit construction boom that’s expected to be underwritten by nearly $618 million in tax breaks and captures made possible by Gov. Rick Snyder’s signature earlier this year. The cost of Gilbert’s subsidies in lost future revenue to taxpayers noticeably mirrors the $634 million in unpaid driver responsibility fees that workforce development leaders say holds back more than 300,000 Michigan residents from getting to work every day. And while Gilbert and dignitaries celebrated a momentous start of construction of an 800-foot skyscraper on the footprint of the former J.L. Hudson's department store, the Legislature and Snyder were collectively punting on forgiving the driver fees before lawmakers adjourned for the year. This year revealed Snyder and lawmakers were effectively willing to fork over $600 million in tax breaks and incentives for a billionaire. But they couldn’t come to an agreement to abandon the collection of a similar amount of money from a state tax on traffic infractions that virtually everyone in Lansing agrees is uncollectable. This is the state of Michigan governance and planning these days — a disjointed approach to economic development where the policy prescriptions are focused on underwriting the capital — and capitalists — ahead of the talent. And talent is in short supply. Virtually every business owner is seemingly searching for workers — whether it’s a skilled computer programmer to run an automated assembly line or a server at a restaurant next door. As Gilbert’s Bedrock LLC embarks on construction of the Hudson’s project, a new office building on the Monroe blocks, expansion of the Quicken Loans headquarters at One Campus Martius and renovation of the Book Tower & Building, a question looms over this massive investment in Detroit’s future: Will Detroiters do the majority of the work building it? If the taxpayer-subsidized Little Caesars Arena project is any barometer, the answer is, no, probably not. Through April, Detroiters had been on the job at the arena project for just 27 percent of the hours worked — just half the city’s 51 percent work requirement for taxpayer-subsidized projects. That’s reflects a reality that Detroit’s workforce has been under-prepared for the volume of downtown and Midtown construction projects. It’s a reality even Gilbert himself acknowledges is a problem as his company begins a 4 1/2-year construction

CHAD LIVENGOOD clivengood@crain.com

Detroit Rising podcast “Detroit Rising” is a weekly Crain’s podcast hosted by Chad Livengood on businesses, entrepreneurship and economic and workforce development in Detroit that is broadcast each Monday at about 12:42 p.m. on “Business Rap” on WQTX 92.1 FM in Lansing and is published on 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.

schedule at the Hudson’s site. “We’re going to be short tradesmen — people who have skilled trades to build these beautiful buildings,” Gilbert said Thursday at the groundbreaking ceremony. “What a shame. What a shame anybody could be unemployed in Detroit when we have a need for skilled trades. That’s craziness.” From the revitalization of Randolph Technical and Career Center to labor unions redoubling their recruitment in Detroit, several efforts aim to get more Detroiters into the skilled trades. But barriers to getting into these programs persist. That’s why Mayor Mike Duggan and his workforce development board cochairs, DTE Energy Co. Vice Chairman Dave Meador and Strategic Staffing Solutions CEO Cindy Pasky, have been trying to convince Lansing to forgive the driver fees and forgo the lost revenue. The old fines, some dating back a decade, result in suspended drivers licenses — effectively removing 76,000 Detroiters from the pool of employees to participate in the city’s revitalization. The reality is, if you live in Detroit, you can’t get into the apprenticeship program to be a skyscraper-building steel worker if you don’t have a car and driver’s license to get to work or the union’s training center way out in Wixom. “We need this to pass this year. It’s a major barrier to employment because in most cases people do need transportation,” Meador said in an interview on the Crain’s “Detroit Rising” podcast. “And this is just one of the barriers.” As long as the barriers to employment, education and upward economic opportunity for Detroiters and others living in poverty persist, the not-sosubtle tension that the Detroit “comeback” is benefiting only the wealthy and powerful will persist. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

Maybe it is time to start over

think that our founding fathers are rolling over in their graves these days. To say that our federal government is dysfunctional is an understatement. Watching our elected officials, all of them, the way they are is disheartening at best. It would appear that we have 100 senators who think they are king along with 435 representatives who somehow think they too rule the country. It does not matter if you are a Republican, Democrat or independent, you have to be embarrassed and yes, outraged. Individually and collectively, our elected officials are doing a lousy job of running our government. The Republicans hate the Democrats, and the Democrats hate the Republicans. And the voters, frustrated with the inability to govern, hate the entire bunch. It may be time to just throw them all out of office and start over. Some bureaucrats in Washington live off the chaos in our government, thriving on what is or is not going on. Many in both parties seem to care

only about the continuation of discontent. I say with a certain amount of sarcasm that maybe we should not drain the swamp, but rather abandon the swamp. Maybe we should move

Washington to the middle of America so our elected officials are more in touch with the folks who elected them. Today, Washington is another world. The idea that congresspeople should represent their constituents has been lost among those more worried about getting re-elected and raising money for their next campaign. The Senate takes great pride in considering itself a deliberative body but worries more about the “club” than anything else. With six-year terms, senators can be so independent that they can ignore the will of the people. Am I fed up? Yes, along with millions of other voters. How do you fix it? I have no idea. The clubs put up nominees for each election and perpetuate the problem. Somehow we have to figure out how to get our government representing the voters. The only thing we all know for certain is that regardless of how bad it is, it is a heck of a lot better than any other form of government — and that’s one more indictment of how bad things are now.

four years, my youngest son was all over the map. I knew that, as silly as it sounds, dropping out after two years at a four-year institution would brand him as a loser, while getting a twoyear associate’s degree would signify diligent accomplishment. So Matt went to MCC, got the associate’s degree and then announced he was done with higher education. No problem, as he had done what his mother and I had asked.

Sure enough, raising his education level above high school graduate enabled him to move into an entry-level management role and ultimately to significant success. I would advise any parent in the same situation to use the associate’s degree as a way to enable parental wishes and keep the child’s options open. Mark Maisonneuve Berkley

KEITH CRAIN Editor-in-chief

Maybe we should move Washington to the middle of America so our elected officials are more in touch with the folks who elected them.

LETTERS

Associate’s degree a road to success To the Editor: Reading the interview with Macomb Community College President Jim Sawyer (Dec. 4), I wanted to share my success story with MCC. While college wasn’t ever a desire for my oldest son, and my daughter marched to her bachelor’s degree in

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 1 8 , 2 0 1 7

Mackinac pipeline leak could torpedo Michigan’s economy

y company, HopCat, employs approximately 800 people in Michigan. As a brewpub and beer bar, we rely on clean water to make and serve beer. Water that contains traces of oil would not make good beer. In fact, it would make terrible beer. If our largest sources of surface freshwater on the planet became contaminated with traces of oil, drinking water could be shut down for millions of people, and breweries like ours would be greatly impacted. At 65 years old and in poor condition, the Line 5 pipeline poses a severe threat of an oil spill in the Great Lakes. A spill would be devastating for Michigan business. Decommissioning Line 5 at the Straits of Mackinac is a way for scores of Michigan businesses to reduce their risk dramatically. Gov. Rick Snyder’s recent deal with Enbridge falls short of protecting the Great Lakes, and those who depend on them. By circumventing the public process, and pushing measures forward that greatly benefit Enbridge, Snyder is looking out only for the business interests of Enbridge and disregarding the basic needs of Michiganders, including Michigan businesses. He is assisting this foreign oil corporation in moving their product, as opposed to doing his job: fighting for Michiganders. We deserve better. In addition to depending on fresh beer, HopCat depends partially on Michigan tourism. Beer tourism is a real thing in the state of Michigan. We have more breweries per capita than almost any other state. These tourists come because of Michigan’s world-class brewery scene and natural attractions such as the Lake Michigan shoreline. Without these two things, tourism would virtually cease to exist in Michigan. In the time it takes for the technical studies and regulatory processes to be completed for a replacement tunnel, this pipeline may very well leak. If this pipeline leaks, we would see an absolute torpedoing of the Michigan tourism industry for years. In 2014, tourism generated $22.8 billion in direct spending, $2.4 billion in state and local taxes, and more than 214,000 jobs. A leak would cause the loss of tens or even hundreds of thousands of jobs. And guess what? Pipelines leak all the time. This is not some remote, one-in-a-million probability. A leak could happen at any time. The time to stand up is now, before that leak happens. As “The Great Lakes State,” we must protect these waters. They are our greatest assets. The onslaught of recent revelations about Enbridge should be eliciting a serious response from state officials. As a business owner I weigh risks every day. Looking at the risks of decommissioning versus allowing this company to continue moving oil through our Great Lakes, it is simple to deduce which side of this equation comes out ahead. Michiganders can handle a 2-cents-per-gallon cost increase of their gasoline, and there are creative solutions to mitigate the cost increase for propane. It is time to decommission this pipeline. I am proud that HopCat is a founding member of the Great Lakes Business Network, a network of more than 70 Michigan businesses standing up for the Great Lakes. The mem-

OTHER VOICES

Gov. Rick Snyder’s recent deal with Enbridge falls short of protecting the Great Lakes, and those who depend on them.

Mark Sellers

ber businesses collectively employ over 3,500 individuals, and all recognize that this pipeline represents a serious threat to our business and our state’s economy. We will continue to support sus-

taining a “Pure Michigan.” And we will continue to advocate for the decommissioning of the Line 5 pipeline in the Straits of Mackinac. Mark Sellers is CEO of HopCat/ BarFly Ventures.

The Line 5 pipeline runs under the Straits of Mackinac.

STATE OF MICHIGAN

COME TO

BUILD. LEARN TO

GROW. LEADER. LEAVE A

Crain’s Leadership Academy is a unique five-session program that gives participants the chance to focus on their strengths instead of tired cookie-cutter models. The program also pulls together promising leaders in an environment that encourages them to share their leadership journeys.

“By far the best leadership session I’ve attended. Would definitely recommend this session to any looking for leadership development.” – C2: Leadership Academy Graduate

Tell us about a leader you know or nominate yourself for participation by visiting: crainsdetroit.com/leadershipacademy. You can also contact Keenan Covington for more information at 313-446-0417 or kcovington@crain.com.

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 1 8 , 2 0 1 7

FOCUS

“ e o q e a t c fi a t m

SPECIAL REPORT: OUTLOOK 2018

Charting uncertain waters in 2018

impact on Michigan in the coming year. And many businesses and decision-makers find themselves in a holding pattern while they wait to Tax reform. Health care. Midterm see what happens next. elections. All could have an outsized For this special report, we internly one thing is certain as we head into 2018: Nothing is certain.

viewed leaders across the region and the state — and from marketing to marijuana law — to see what they think is in store. We hope their insights will help you see the course ahead a little more clearly. GETTY IMAGES/ISTOCKPHOTO

On a new approach to planning in the neighborhoods Maurice Cox, Planning Director, City of Detroit

he city’s planning director, Maurice Cox, has been instrumental in Detroit’s development, redevelopment and neighborhood revitalization efforts since Mayor Mike Duggan named him to the position in February 2015. Cox, who has held positions at the Tulane University School of Architecture, the University of Virgina and Syracuse University, is known as a handson director who’s not afraid to get involved in the design process. As the stream of real estate development and redevelopment activity continues at a steady clip in downtown and Midtown, he has also been a champion for the city’s “20-Minute Neighborhoods” initiative, the first phase of which was rolled out last year for the Livernois/McNichols, Southwest Detroit and Islandview/Villages areas. The effort is geared at creating neighborhoods where residents can get whatever they need from businesses within a 20-minute walk or bike trip. Planning for the next round of 20-minute neighborhoods gets un-

derway next year in Banglatown, Jefferson-Chalmers and Russell Woods/ Nardin Park. “We’ll start the process of planning with residents for a framework to guide development in those areas. ... The takeaway is that you have to create a framework for development to happen in an orderly and predictable fashion so that people are not reacting to ad hoc development efforts. The planning framework allows us to say, ‘Okay, there will be this flow of rehabs first.’ Eventually there will be smaller-scale new construction of the highest quality, all of it with an eye towards affordability — so deals with 20 percent affordable at a minimum — (and) at expanding people’s housing choices in neighborhoods, essentially planning for how you can retain those folks who are there and provide for them the services that they have long since had to go elsewhere to find.” — Kirk Pinho

A planning vision focused on “expanding people’s housing choices in neighborhoods, essentially planning for how you can retain those folks who are there and provide for them the services that they have long since had to go elsewhere to find.”

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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 1 8 , 2 0 1 7

SPECIAL REPORT: OUTLOOK 2018 “There’s an extreme shortage of trained, qualified workers, especially in the area of technicians who can diagnose and fix problems with advanced transportation modes.”

n t r e

On preparing skilled workers for ‘smart cities’ of tomorrow

“Long term ... we’re going to see more pressure for conslidations and mergers ... there’s no doubt about it.”

Rose Bellanca, President, Washtenaw Community College

hile automakers work to build cars that can drive themselves, Rose Bellanca is helping to train the next generation of auto technicians. These technicians won’t be fixing brake lines or transmissions. Instead, Bellanca, president of Washtenaw Community College, says people will be needed to diagnose and repair intelligent transportation systems, install and troubleshoot fiber optic lines and analyze all of the data that connected and autonomous vehicles will send about such things as speed, location, traffic hazards and weather conditions. Washtenaw Community College is about to launch four new, not-forcredit courses to teach people working in the emerging mobility industry the skills they’ll need to be ready for the day self-driving cars are built and running. The college recently opened an office near the American Center for Mobility driverless car test hub at Willow Run in Ypsilanti Township, which is under construction with financial investment from the industry. And the college has partnered with 14 other colleges and universities in Michigan in a consortium designed to jointly develop education and training programs for the industry, as well as collaborate on research and funding

opportunities. Bellanca says higher education institutions are going to be necessary to prepare a talent pipeline as the mobility industry grows. Washtenaw has focused in recent years on becoming a leader in education and training, including starting its Advanced Transportation Center, which offers programs related to intelligent transportation systems and cybersecurity, advanced auto service and repair, and lightweight materials and manufacturing. “Community colleges, in particular, need to be very, very flexible. And we also need to stay ahead of the curve. We need to be at the table when people are talking about it, because that’s when we need to learn it, as well, so by the time it’s implemented we can have people ready for the job. ... Cities are now becoming ‘smart cities.’ Mobility is just one portion of smart cities. (Information technology) is having an impact in smart cities. So people are going to need to be trained in those areas. ... There’s an extreme shortage of trained, qualified workers, especially in the area of technicians who can diagnose and fix problems with advanced transportation modes.” — Lindsay VanHulle

On legalizing marijuana in Michigan On how tax reform will Lance Boldrey, Attorney, Dykema Gossett impact nonprofits "There is just a

arijuana could be a hot topic in Michigan in 2018. That’s because the state is gearing up to start reviewing “hundreds, if not well in excess of 1,000” applications for licenses to operate under a new medical marijuana regulatory system adopted last year, said Lance Boldrey, an attorney at Dykema Gossett PLLC in Lansing, who leads the firm’s cannabis law practice. Gov. Rick Snyder last year signed into law a new regulatory system that will license medical marijuana growers, processors, transporters, dispensaries and testing facilities. The law also imposes a new state excise tax on dispensaries. The state worked over the last year — the legislation took effect in December 2016 — to come up with a set of temporary rules that would allow growers and medical marijuana businesses to start getting licenses while regulators work on writing permanent rules, Boldrey said. That process could take a year or 18 months. And activists are working on two separate ballot drives that would allow recreational marijuana use in Michigan. The first, and larger campaign, would regulate marijuana

like alcohol and follow a similar licensing structure to medical cannabis. The second, grassroots effort would end any state ban on marijuana use. Boldrey said the larger initiative has some potential political flaws, including a provision that would prohibit people from using marijuana while driving but not explicitly ban passengers from any consumption other than smoking.

“I do think there are flaws in there that could be exploited in an opposition campaign. On the other hand, there is just a ton of momentum nationally and within Michigan when it comes to public opinions on this industry. It’s going to be very interesting to see what happens with that initiative — whether there’s a legal challenge that goes after some legal flaws in the initiative, whether opponents are really able to gin up a significant fight against it or not. If it’s just the straight question of ‘Do you support adult use of marijuana?’ that polls very positively. The devil’s kind of in the details in terms of whether folks continue to perceive this one positively.” — Lindsay VanHulle

ton of momentum nationally and within Michigan when it comes to public opinions on this industry."

Rob Collier, President, Council of Michigan Foundations

he impact of federal tax reform is perplexing nonprofit leaders as the country heads into the new year. Regardless of the exact language in the final bill, the House and Senate are in agreement on doubling the standard deduction, which will diminish the number of people who itemize and claim a tax credit for charitable donations to just 5 percent of taxpayers, said Rob Collier, president of the Council of Michigan Foundations. The final legislative package will have ramifications for the nonprofits sector both in the near term and long term, with projected decreases in both the individual and government revenue that supports nonprofits. The future of the estate tax is uncertain, but any change to it would also impact giving. As things stand, the House version eliminates it, and the Senate version raises the ceiling so fewer people would pay it, Collier said. Eliminating the tax would lead to a projected loss of $4 billion over a

10-year period, he said. “The Joint Committee on Taxation is projecting a $19.8 billion reduction in charitable giving annually. What we don’t know ... is what that means for jobs in the charitable sector and the capacity and ability of nonprofits to deliver services and to employ people to deliver those services. That’s the short-term problem. The long-term problem is even worse. According to House and Senate versions, they’re going to add ($1 trillion to $1.5 trillion) to the federal deficit over the next 10 years ... In paying that money back, they’re going to have to look at discretionary pots in the federal budget. We can expect to see more pressure and reductions in government support. The government provides one-third of the revenue for the nonprofit sector nationally. Long term ... we’re going to see more pressure for conslidations and mergers ... there’s no doubt about it.” — Sherri Welch

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SPECIAL REPORT: OUTLOOK 2018 “You cannot put out there any marketing messages that aren’t authentic ... otherwise, you’ve eroded the faith the customer has in your brand. It’s all about content.”

“I’ve been telling everybody that I think infrastructure will be one of the marquee issues of the gubernatorial contest. ... We have to invest in the underground in water and sewer because of what happened in Flint, because of what happened in Fraser. If you’re a sewer pipe, you don’t know if you’re a Republican or Democrat.”

On marketing a team after a last-place season Ellen Hill Zeringue, Vice President of Marketing, Detroit Tigers

llen Hill Zeringue is headed into her 19th season with the Detroit Tigers, and has spent the last 10 as the team’s vice president of marketing. Her tenure began in the era of traditional marketing, built around broadcast and print advertising. Now, her job requires her to manage a complicated matrix of traditional, digital and social media assets. She’ll need all of those tools to sell the 2018 Detroit Tigers to fans and corporate clients as the team continues to rebuild after several veteran stars were traded last season. The key to convincing anyone in the modern age of marketing to buy into a team coming off a last-place season? Good, authentic content for younger fans. “Before, it would have been a radio campaign, a print ad. Now, the list of assets we have to develop is extensive. What is going to be on Facebook, on Twitter, in an email blast, on radio, on DetroitTigers.com? You’ve got to be able to create content to serve each of these different platforms. It’s social media, more and more, and the issue of creating content to connect to millennials and Generation Z. It’s incumbent on us to create ongoing content because

that’s what they’re used to. You cannot put out there any marketing messages that aren’t authentic ... otherwise, you’ve eroded the faith the customer has in your brand. It’s all about content. The word content came up almost every other word at our (MLB marketing) meetings. When you look at this particular audience, they need information. It’s incumbent on us to come up with it. How can we keep ideas fresh and ongoing? When you look at our overall campaign for 81 home games, we have to create independent pieces of content for things like theme nights, university days. We use technology and analytics to understand the customer and how they engage with baseball and how we can better serve them. I know in a very short time period how each of those campaigns are performing. That’s revolutionary. In real time I can shift ad dollars from platform to platform. There’s an incredible amount of cost savings. The most radical change (in marketing during her career) is the sense of immediacy, particularly when you’re in-season. You don’t have a week to respond to something that happened on the field. You have to respond quickly and get it out there. We’ve become rapid-fire marketers.” — Bill Shea

On the politics of infrastructure Candice Miller, Public Works Commissioner, Macomb County

he year 2017 may be remembered as the year suburban Detroit’s aging underground infrastructure burst open for a long-overdue public inspection. A football field-sized sinkhole that opened up on Christmas Eve 2016

and ruined three Fraser homes turned into a year-long, multi-million-dollar mess for businesses and residents along 15 Mile Road near Hayes Road. The sinkhole formed after the 11foot wide Macomb Interceptor Drain

pipe collapsed some 60 feet below the road, forcing the construction of a temporary above-ground pipe. Construction crews spent months building a new 4,000-foot pipe that carries the wastewater of nearly 500,000 Macomb County residents and businesses. After the 15 Mile pipe collapse, Macomb County Public Works Commissioner Candice Miller ordered 17 miles of the underground pipe to be inspected by machines. The tests found “a number of different issues” that need addressed to prevent another disaster, she said. Miller, a former member of Congress, is hopeful that the $70 million repair project will force candidates for governor in 2018 to put forward

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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 1 8 , 2 0 1 7

SPECIAL REPORT: OUTLOOK 2018 “For every 200 or 300 companies now claiming to be AI companies, probably one or two have something that is interesting and has a real impact and will survive.”

On the future of artificial intelligence Jason Mars, president and CEO, Clinc, and assistant professor of computer science and engineering at the University of Michigan

ason Mars, 34, is an assistant professor of computer science and engineering at the University of Michigan, where he and his wife, Lingjia Tang, also an assistant professor, run their own research group, the Clarity-Lab. Clarity is short for cross-layer architectures and runtimes in 10 years, which designs the scalable architecture needed to support future artificial intelligence applications. “How to scale to billions of queries a second,” he said. They also run a fast-growing startup in Ann Arbor called Clinc Inc., with Mars as president and CEO and Tang as COO.

Clinc was founded in 2015 and has raised $7.5 million in venture capital to support development of Finie, a Siri-like voice-controlled app that uses artificial intelligence to help customers of banks and credit unions manage their accounts, plan future spending and manage wealth. When Clinc raised its last funding in February, it employed 21 and had two customers. Mars says it has 20 customers in five countries, now, and will soon hit the 100 employee mark. Mars’ family is growing fast, too — they have a twoyear-old son and a daughter on the way.

On the need to evaluate our water system Sue McCormick, CEO, Great Lakes Water Authority

“proactive” plans for fixing the state’s crumbling underground infrastructure. The Harrison Township Republican is supporting Attorney General Bill Schuette for governor, who has not yet proposed a detail infrastructure spending plan. “I’ve been telling everybody that I think infrastructure will be one of the marquee issues of the gubernatorial contest. ... We have to invest in the underground in water and sewer because of what happened in Flint, because of what happened in Fraser. If you’re a sewer pipe, you don’t know if you’re a Republican or Democrat.” — Chad Livengood

he lack of a second water main line for a dozen communities serving some 300,000 Oakland County residents and businesses along the 14 Mile Road corridor came into full view this fall during a multi-day interruption of service that limited business and hospital operations and closed schools. Sue McCormick, CEO of the Detroit-based Great Lakes Water Authority, which provides water to 127 communities in southeast Michigan, said the 14 Mile Road water main break exposed a lack of redundancy in that part of its 3,400-mile system of water main pipelines. GLWA is pursuing plans to build a

second $54 million water pipeline from 14 Mile to 8 Mile Road to create a loop of connection for the Oakland County lake communities. The first-ever interruption of the 14 Mile pipe also has heightened the importance of an on-going assessment of the condition of the rest of the 48inch water main, McCormick said. “If you don’t understand the condition of all of your assets, then you really don’t know what your priorities are for maintenance and capital. … And condition assessment, particularly for underground infrastructure, is not as easy to inspect as assets we have in vertical structures.” — Chad Livengood

“Things are crazy good, super busy. I’m stressed and frayed and having fun on this incredible journey we’re on. Having a husband-andwife team working together on everything is a balance that helps. We have top national banks I can’t name, yet, but which we’ll be able to make public soon, and three of the largest banks in Canada. Two I can name are ISBank, the largest bank in Turkey, and USAA, a bank for military veterans with 12 million members. We’re opening an office in the U.K. to support a major customer we’ll be announcing in the first quarter. Reve-

nue grew well beyond 10X in the last year and I expect another 10X growth next year ... For every 200 or 300 companies now claiming to be AI companies, probably one or two have something that is interesting and has a real impact and will survive. There is a bubble, and when it pops, it will affect all the companies that use AI as a banner without having anything under the cover. They have an AI narrative but don’t have anything real, that you can touch, that you can play with to solve a problem in your life.” — Tom Henderson

“If you don’t understand the condition of all of your assets, then you really don’t know what your priorities are for maintenance and capital.”

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 1 8 , 2 0 1 7

SPECIAL REPORT: OUTLOOK 2018

On the future of solar energy in Michigan

“The state needs first and foremost to remove barriers to solar. ... There shouldn't be barriers to solar development.”

Margrethe Kearney, Staff Attorney, Environmental Law and Policy Center

argrethe Kearney, a staff attorney in Grand Rapids with the Environmental Law and Policy Center, predicts a boom of 2-megawatt solar projects or larger in 2018 after the Michigan Public Service Commission approved a standard contract and price point that utilities must offer renewable operators. Kearney said with the new MPSC order, solar developers don’t need to waste time negotiating contracts with utilities. The order mandates terms and prices for projects up to 20 megawatts. The decision came out of a recent Public Utility Regulatory Policies Act case.

On Michigan’s readiness for the next economic downturn

“We have really tackled the access issues with ACA, but we haven't talked about costs. We need to address costs of prescriptions, specialty drugs and the rising out-of-pocket costs of health care.”

Paul Traub, Senior Business Economist, Federal Reserve Bank of Chicago, Detroit branch

On the rising cost of health care in Michigan Terri Kline, CEO, Health Alliance Plan

erri Kline, CEO of Health Alliance Plan in Detroit, sees 2018 as a year of big uncertainty for the health insurance industry as Congress debates proposed changes in federal tax law that could do away with the individual mandate under the Affordable Care Act. Proposed federal tax cuts in Congress — which include repealing the individual health insurance mandate penalties under the Affordable Care Act — could also ultimately lead to $25 billion in cuts to provid-

Despite growth in solar the past five years, Michigan still lags behind many other states in supportive regulations, megawatts developed and incentives for homeowners and businesses, Kearney said. For example, a Michigan company with a 2-megawatt combined heat and power system that wants to replace or supplement utility-generated power with self-generated power could be required to pay standby fees ranging from $8,300 to more than $10,500 each month, according to an

ers under the Medicare program and drive up the cost of health care. “There will be a continued focus on the individual marketplace because of what is happening at the federal level with tax code changes ... and how we ensure the individual market stays healthy in Michigan. ... With the tax code changes, there is a big enough projected deficit over 10 years that will force (mandatory budget cuts) and forced reductions in other programs and a $25 billion cut (in

Medicare). This will have a big impact on Michigan.” If the individual mandate penalties are repealed, “This will create uncertainty in the market and people will drop out. Experts say this scenario could cause premiums to increase to unaffordable levels. We have really tackled the access issues with ACA, but we haven't talked about costs. We need to address costs of prescriptions, specialty drugs and the rising out-of-pocket costs of health care.” — Jay Greene

aul Traub doesn’t want to be pegged as a pessimist. But he is nervous about Michigan’s future as the eight-year economic recovery begins to slide. Michigan’s public and private sector leaders have been marketing the state’s better-than-national-average recovery on job creation and growth, and for good reason: As the state lost significant population during the Great Recession, it was important to tout the state to newcomers to replenish the growing labor force. But that veneer doesn’t hide the significant economic issues the state continues to face, Traub said. For instance, the gross state product in real terms has only now recovered to 2005 totals, far below the growth of other states. Employment is still down roughly 5 percent from 2000. The sole reason for the state’s recovery, even if it pales compared to other states’, is the return to car buying in North America, which reached record levels in 2015 and 2016. However, those figures are projected to slip for the first time since the recession. PricewaterhouseCoopers projected full-year U.S. sales of 17.1 million ve-

hicles, below last year’s 17.6 million. “I haven’t seen Michigan redefine itself, yet. We’re a manufacturing state and there’s nothing wrong with that, but we’re going to start to see the cyclical change soon. We will see the downturn impacting us before the rest of the U.S. economy. We’re already seeing layoffs and shift changes. Michigan is the canary in the coal mine. And if we look at what’s happening on the national front, things could be expedited. We can’t cut ourselves to prosperity and places like Michigan will feel that impact. The two ways to grow the economy are add more people or increase productivity. Companies haven’t done that yet while sitting on massive piles of cash. We should be investing in infrastructure and human capital. I don’t want to get political, but this (tax reform plan) isn’t a reasonable fiscal policy to do at this stage of the recovery. The (economic) expansion is 33 quarters long now. Without new spending on education and infrastructure, I don’t see that expansion continuing, especially in places like Michigan.” — Dustin Walsh

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The annual Newsmaker of the Year will be announced in the January 8 issue of Crain’s Detroit Business. analysis by 5 Lakes Energy. “(The potential boom in projects) is really exciting. There really hasn’t been solar development at that scale in Michigan before. ... Independent power producers can develop projects and sell electricity to the utility and the price paid is avoided costs (for the utility). “The state needs first and foremost to remove barriers to solar. The commission needs to take a hard look at existing rates and policies, net meter-

ing and standby rates. There shouldn'’t be barriers to solar development. “I hear a lot of frustration from people who are interested in doing their own residential solar and commercial solar. They are interested in getting more involved but there are barriers to that. The commission must establish a tariff on equitable costs of services to solar customers. There is a fear that if the commission does not include costs and benefits of service that will cripple the solar market in Michigan.” — Jay Greene

“The two ways to grow the economy are add more people or increase productivity. Companies haven’t done that yet while sitting on massive piles of cash.”

Stay tuned for information on the Newsmakerof the Year event taking place February 2018!

For more information on our upcoming events visit crainsdetroit.com/events

Aircraft hangar and office space available at Hantz Air's private facility. (734) 893-6611 HantzAir Aircraft Management and Charter YIP - Willow Run Airport

’S IDN ETROIT C R A I N ’ S D E T R O I T CBRAIN US E S SBUSINESS // D E C E M B E R 1 8 , 2 0 1 7

Page 16 2

PEOPLE ADVERTISING/ MARKETING/PR J Kathy Barks Hoffman to vice president from senior account executive, Martin Waymire, Lansing; Andie Poole to vice president from senior account executive; Andrea Kerbuski to senior account executive from account executive; and Natalie Kozma to account executive from assistant account executive. J Jason Jakubiak to VP group creative director, The Mars Agency, Southfield, from senior creative, Doner Partners LLC, Detroit; David Wysocki to VP group creative director from senior creative, Doner Partners LLC, Detroit; Jim Feltz to creative director from associate creative director, Campbell-Ewald Co., Detroit; and Jason Parzuchowski to creative director from creative director, J. Vaughn Creative, Detroit.

Jennifer Grasso to executive creative director, The Money Source Inc., Birmingham, from creative director, United Shore, Troy. Also, Jennifer Lawrence to media director from integrated media director, UniWorld Group, Dearborn; Vincent Monticello to marketing manager J

SPOTLIGHT from account supervisor, Chevrolet Global Content Studio, Commonwealth//McCann, Detroit; Eric Livingston to creative director from partner and creative director, Grit Design, Detroit; Lauren Hughes to marketing operations from account director, Lerner Advertising Inc., Beverly Hills; Brena Swanson to PR and community manager from digital reporter, HousingWire, Dallas, Texas; and Dave Spencer to vice president of marketing from Chevrolet Global Brand Strategy, Chevrolet, Detroit.

William Rosin to member, Dickinson Wright PLLC, Troy, from member, Dawda, Mann, Mulcahy & Sadler PLC, Bloomfield Hills.

BANKING/FINANCE

J Michael Fischer to branch manager, Ross Mortgage Corp., Troy, from branch manager, Hancock Mortgage Partners LLC, Novi.

J Sarah Pobocik to commercial market leader for Southeast Michigan from senior relationship manager, PNC Bank, Troy.

LAW J Jon Boguth to shareholder from attorney, Hall, Render, Killian, Heath & Lyman PC, Detroit. J Josephine DeLorenzo to shareholder from associate, Plunkett Cooney PC, Bloomfield Hills. Also, Courtney Nichols to shareholder from associate.

NONPROFITS Nicky Bates to marketing and development associate, Ronald McDonald House of Detroit, Detroit, from lead development associate, Christine Gavin & Co., Detroit. J

REAL ESTATE

TECHNOLOGY J Joel Gibson to vice president of automotive, Detroit office, Swift Navigation Inc., San Francisco, Calif., from vice president, business line management, Magna Electronics Inc., Auburn Hills.

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

ADVERTISING SECTION 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

ACCOUNTING

ADVERTISING & MARKETING

Nikki Jenaki

Carleen Gray

Tax Accountant

Executive Vice President of Sales & Marketing

REJ’s Accounting & Tax Service, Inc. Nikki is a University of Michigan graduate with over ten years of experience in tax and accounting work with local accounting and CPA firms. Nikki will be responsible for growing our accounting and tax business and transitioning our Tax Manager Richard Witkowski BA, MBA PHD into retirement, Richard has worked with the firm for over fifteen years. Nikki brings a wealth of new ideas to the firm and we are happy to welcome her.

HEALTH CARE Joseph Serra Board of Directors

McLaren Health Care McLaren Health Care announced that Joseph Serra, president of Serra Automotive, has been appointed to the McLaren Health Care Board of Directors. Serra brings decades of local leadership experience in privately-held companies, and in the automotive industry nationally. Serra began his career in the automotive industry in 1982 and has grown Serra Automotive into one of the largest privately-held automotive groups in the country.

December 18, 2017

STAHLS’ STAHLS’, a global leader in the garment decoration industry, has promoted Carleen Gray to executive vice president of sales and marketing. Gray will oversee all STAHLS’ brand sales and marketing efforts across North America, including the company’s regional sales centers, with the goal of reaching targeted market segments more quickly and effectively. Gray will retain her role as chief marketing officer. Since joining STAHLS’ in 2007, Gray has been instrumental in the company’s global expansion.

MANUFACTURING Scott Zimmerman Vice President of Merchandising

Carhartt, Inc. Carhartt has named Scott Zimmerman as its newly-appointed vice president of merchandising. In this role, he will bring to life Carhartt’s strategic product plans and set the course for growth with our existing and future consumers.

FINANCIAL SERVICES David Dannemiller Managing Director

Bank of the West David Dannemiller will lead the new Bank of the West Commercial Banking Center to deliver solutions that companies in this region need to continue to grow and thrive. His wealth of knowledge and expertise will help our clients be more agile, efficient and competitive. This new Center will bring our bankers closer to our clients in the Cleveland area, providing them with world-class banking execution and global capabilities with a local footprint.

United Way names interim CEO

United Way for Southeastern Michigan named Tanya Heidelberg-Yopp, the group’s COO, to the job of interim CEO after the resignation of Herman Gray, M.D., as president and CEO. The announcement was made last Wednesday in a written statement from United Way board Chairman Mark Petroff, president and CEO of Detroit-based Marketing Associates. Heidelberg-Yopp’s interim appointment took effect last Friday. Gray’s resignation was announced last Monday by the nonprofit. He resigned to take a job as chairman of pediatrics at Wayne State University School of Medicine. His new position is effective on a part-time basis immediately and full time as of Jan. 1. At WSU’s department of pediatrics, Gray succeeds Mary Lu Angelilli, who has served as interim chair since February. She remains on faculty as an associate professor of pediatrics.

Emagine appoints new CEO

Emagine Entertainment Inc. appointed a new CEO as the Troybased luxury theater chain looks to ramp up expansion. Anthony LaVerde, 38, officially started in his new role last week, succeeding Emagine co-founder Paul Glantz, who will remain chairman and oversee the compaLaVerde ny’s strategic growth initiatives. Glantz hired LaVerde seven months ago as chief of staff. As CEO, LaVerde will handle day-to-day operations.

Glantz hopes to build the company on a large scale, both within its footprint and beyond. It also has plans to open a megaplex theater in Detroit. LaVerde, who lives in Birmingham, previously worked as chief content officer for Detroit-based Benzinga.

Live6 Alliance to replace co-directors

The Live6 Alliance community development group is replacing its interim co-directors as the focus of the Detroit nonprofit shifts. Lauren Hood, who helped launch the organization, had served as interim co-director alongside Michael Forsyth, entrepreneur and co-owner of Detroit City Distillery. Their roles ended at Hood the end of November, University of Detroit Mercy President and Live6 Board Chairman Antoine Garibaldi said. Garibaldi said the board had been discussing the change for Forsyth the past six months. “We are making a transition,” Garibaldi told Crain’s. “As we’ve retained more staff and began to sharpen plans for future development, and now that we’ve got a little more funding, we’re now able to take on other initiatives.” Hood told Crain’s that she and the Live6 board disagreed on how to run the group. She was more people-oriented and the organization was more project-focused, she said.

CALENDAR UPCOMING EVENTS 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-

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

JOB FRONT 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

POSITIONS AVAILABLE

Harman Connected Services 1 Position: Senior Engineer, Job Code SE-V02 Job Duties: Design, develop & maintain SW modules & apps for In-Vehicle Infot sy Contri in decision making for solution strategy cons the features/limit/guidelines of Qt/QML. Create & prototype solu & proof of concepts to d’strate innov’ viability. Anal cust & internal req & specif & transl these into SW des Work with cust to further define req & resolve issues. Anal existing embedded SW to add feat, make modif and/or port diff p’forms. Test SW des & code at the unit & sys level to ensure that all req are met & the highest SW qlty is achieved. Coordinate SW dev activi with SW team leader. Identify product req or perform issues. Work with SW team lead nego reso Supp & mentor less exp’d peers by sharing k’ledge in Qt/Qml, QNX to carry-out activities. Cond code rev, approve changes. Create doc & ex that help educate other engineers. Communicate with peers inside Harman group to coordinate SW dev.

Apply: Pls send resumes to Harman Connected Services, Attn: Gokul; Job Code SE-V02 to 2002 156th Ave NE #200, Bellevue, WA 98007. Work loc: Livonia, MI, may have long term assign in other loc in U.S. incl Novi, MI areas.

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 1 8 , 2 0 1 7

SOCCER FROM PAGE 3

“MLS in the U.S. is not viewed as major league but as a minor league,” he said. That’s because soccer is the most popular league sport globally, and is dominated by Germany’s Bundesliga and Britain’s Premier League. MLS attendance among pro soccer leagues globally ranks sixth, below Italy’s Serie A and Bundesliga’s second division league. Domestically, MLS topped both the NBA and NHL in average pergame attendance last season, but the soccer league’s clubs play a 17-game home season compared to 41 games for both hockey and basketball. Atlanta United, a new team that plays its games at 71,874-seat Mer-

NUMBERS FROM PAGE 3

TV contracts: Fox, TBS, and ESPN are paying a combined $12.4 billion through 2021. National Basketball Association No. of teams: 30 Year founded: 1946 League revenue: $8 billion Average team value: $1.36 billion Average league-wide per-game attendance: 17,884 Regular-season schedule: 82 games

cedes-Benz Stadium built for the NFL’s Falcons, set the MLS attendance record this season by averaging 48,200 fans per game. Victor Chiasson, an assistant professor of sport management at Eastern Michigan University, sees Major League Soccer in college football terms. “MLS is similar to a mid-major college conference trying to break into the Power 5. They are a proven professional league but haven’t gotten the respect and attention they have earned from their efforts,” he said. Another difference between the MLS and other leagues is the audience numbers from Nielsen for each championship game. Last week’s MLS Cup between the host Toronto FC and Seattle Sounders averaged 1.1 million viewers across ESPN, Un-

iMas and Univision Deportes, and another 1.3 million Canadians on TSN. By contrast, Super Bowl LI between the Atlanta Falcons and New England Patriots in February was watched by 111.3 million on Fox. The World Series’ seven games with the Houston Astros and L.A. Dodgers were seen by 106 million viewers, while 20.4 million watched the five-game NBA Finals between the Golden State Warriors and Cleveland Cavaliers. Closest in audience size to the MLS Cup was last season’s Stanley Cup Finals between Nashville and Pittsburgh, which averaged 4.762 million viewers on NBC/ NBCSN. Metro Detroit also has one businessman with experience owning a professional soccer team in an established major league.

Rochester-based General Sports & Entertainment owner Andy Appleby, best known locally these days for launching a minor-league baseball league in 2016, is a former chairman and co-owner of the English pro soccer club Derby County. He led a group that in 2008 bought the team, then in the elite Premier League, for $100 million. Appleby, whose consortium sold Derby County in 2015 for an undisclosed sum, has praise for Major League Soccer but cautions that it’s not quite on par with the four legacy American pro leagues. “I think the MLS has done a fabulous job in marketing itself over the last 10 years or so. They have really taken advantage of the positive trend for soccer in this country,” he said via email. “And with franchise

values in the Big 4 sports at dizzying heights now, they have also found a good value proposition for prospective team owners. All of that said, it is a little too early to see the MLS challenging the Big 4 sports. That’s not a knock on MLS at all, but rather an acknowledgment that the other four sports have all been around forever and are fully ingrained in America.” If Detroit does end up as an MLS market, it will be the first major league team for the city in an established pro league since the Detroit Pistons move from Fort Wayne in 1957. The Tigers date to 1901, the Red Wings to 1926 and the Lions date to 1934. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19community,

Cool Places to Work in Michigan returns in 2018. This prestigious program recognizes employers that go the extra mile to make their employees feel appreciated – as judged, in part, by the employees themselves.

Average player salary: $7.1 million Most recent expansion fee: $300 million (Charlotte Bobcats, 2004) Most recent team sale: $730 million (Atlanta Hawks, 2015) TV contracts: ABC, ESPN, and TNT are paying a combined $24 billion that run through 2024-25.

NOMINATION

DEADLINE:

MARCH 9, 2018

National Hockey League No. of teams: 30 Year founded: 1917 League revenue: $4.43 billion Average team value: $594 million Average league-wide per-game attendance: 17,442 Regular-season schedule: 82 games Average player salary: $3.1 million Most recent expansion fee: $500 million (Las Vegas Golden Knights, 2017) Most recent team sale: $475 million (Arizona Coyotes, 2015)** TV contracts: NBC Sports Group is paying $2 billion from 2011-21 for U.S. broadcast rights, and Rogers Communications has a $5.2-billion, 12-year deal for the rights in Canada that runs through 2026. * This is the most recent known sale price and includes a stadium. The Houston Dynamo sold in 2015 for an undisclosed amount. ** 51 percent stake bought for $170 million in 2014, remainder of control bought for $305 million in 2015, via USA Today and Forbes. Sources: Forbes, Sports Business Daily, ESPNFC.com, USA Today, Business Insider, New York Times, MLB.com, baseball-reference.com

NOMINATE your Cool Place to Work today at crainsdetroit.com/nominate

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 1 8 , 2 0 1 7

PENSIONS FROM PAGE 3

Saginaw also was able to consolidate the number of retiree health plans it managed from 20 to four. Morales said that should reduce costs by $3 million annually, though it took years of court wrangling after the city was sued by a retiree group. “In my opinion,” he said of state efforts to expand emergency powers over struggling cities, “the things that we’ve done … (are) about all that you could do to help reduce the cost and move toward becoming funded … In my opinion, we didn’t need the legislation to tell us we had a problem.” Skeptical state lawmakers hope Morales is correct. Rep. James Lower, a Republican from Cedar Lake, fought for a more muscular state oversight role, an effort that failed earlier this month. State lawmakers, however, did get a provision that requires local governments to submit an annual report on their financial condition to the state. “If it doesn’t work out, it’s entirely on them,” Lower, chairman of the House local government committee, said of local and union officials who fought off a larger state role. “I, obviously, don’t think it will. “We literally gave them what they asked for,” he added. “Hopefully they’re right. I sincerely hope they’re right.”

Finding a balance As the legislative reforms giving local governments more leeway to rein in retiree health care and pension costs make their way to Gov. Rick Snyder’s desk, the measures are being praised for preserving local control and criticized for not going far enough to allow the state to intervene. Some city leaders facing large liabilities to retirees say they know they have a funding problem, but insist the steps they have taken will be enough to satisfy the Legislature’s concerns. “There’s certainly the possibility (that the state will have to get involved), and we don’t want that to happen,” said Ben Bakken, vice president of commercial banking for Mercantile Bank, and co-chair of an advisory group in Lansing working to ease that city’s budget strain. In 2017, Lansing will spend $44 million — more than a fifth of the city’s $197 million in revenue — on promised pension and health care benefits to its retirees, according to the advisory team, convened by outgoing Lansing Mayor Virg Bernero. It’s enough to fund pensions, but not health care, too. While the Lansing group says the city owes at least $680 million to its pension and retiree health care systems, the state task force appointed by Snyder put the city’s combined benefits debt closer to $737 million — landing it near the top of cities with the highest unfunded liabilities in Michigan. Lansing’s Financial Health Team insists it has a plan, one that will keep state government from having to step in. On Dec. 13, the advisory group sent Bernero and Mayor-elect Andy Schor, a Democratic state representative from Lansing, recommendations that include offering Medicare-eligible retirees a stipend for health coverage in a reimbursement account, and evaluating whether it’s

possible to sell off some city assets. The group also suggests ending subsidies for dental and vision coverage. “We want to be able to continue to make those difficult decisions with our bargaining partners,” Bakken said, “as opposed to having those decisions made for us.” The bills that made it out of the state House and Senate this month had bipartisan support, but only after lawmakers stripped a provision that would have allowed the state to send in a team under Michigan’s emergency manager law with the power to change local budgets, sell off public assets and even potentially change benefits plans if a community resisted developing its own plan to boost funding. Democratic lawmakers, employee unions and some municipal lobbying groups opposed the idea of expanding the controversial emergency manager law. Some drew comparisons to the lead-poisoning crisis in Flint’s drinking water after a state-appointed emergency manager switched water sources without properly controlling for corrosion to prevent lead leaching from old pipes. Others argued the expanded powers could erode benefits that had been bargained locally. The watered-down language in the approved legislation prevents the state from intervening in communities that find themselves in fiscal distress due to underfunding, said Lower, who ultimately voted against legislation he co-sponsored. Lower was one of just a handful of state representatives to oppose the final package of bills. He said the legislation as adopted doesn’t go far enough. Republican legislators and several state business groups, including Business Leaders for Michigan and the West Michigan Policy Forum, say addressing funding shortfalls with these benefits systems is a top policy priority to avert local fiscal stress and preserve promised benefits for retired government employees who have earned them. Without a mechanism like the expanded emergency manager law, there is no way to compel a municipality to develop or follow its own local corrective plan, Lower said. A plan that opponents initially said had too many teeth now, in his opinion, has too few.

A problem everywhere Municipal retirees’ pensions across the state are underfunded by an estimated $7.5 billion, according to Snyder’s task force report. An estimated $10.1 billion in promised health care benefits to local government retirees has not been funded. There are multiple reasons for this. People are living longer, so they’re drawing benefits later in life. In some cities, there are more retirees than active employees. Backers of a larger state role say some communities use overly rosy assumptions about investment returns and how long retirees will live. Health care costs are rising fast, too. Local leaders note that other factors come into play that are not within their control, such as state cuts to revenue sharing to local governments over the years. And many older, industrial cities have a diminished tax base, with few options to increase revenue. “While identifying the problem with accurate information is very important, our local government

workers, Michigan’s taxpayers and our future generations need a solution,” John Kennedy, chairman of the West Michigan Policy Forum and president and CEO of Kentwood-based Autocam Medical, said in a statement after the Legislature voted. “We cannot simply stop at this point and think everything has been resolved.” Bakken, of Lansing’s financial advisory team, doesn’t think efforts to restructure benefits are over. “We were moving forward on the assumption that regardless of what (the current legislation) reads, there’s a potential at some point for cities that don’t manage it and don’t deal with it to have that decision-making ability taken away,” he said. “We don’t want to see that happen.” Under the legislation, any community with a pension system less than 60 percent funded or a retirement health care system less than 40 percent funded would have to come up with a plan to increase funding. A municipality could negotiate those plans with their employee groups. The legislation aligns with a set of recommendations put forth in July by Snyder’s task force. The City of Warren has more than $550 million in combined unfunded pension and retiree health care liabilities, according to the governor’s task force report. Mayor Jim Fouts told Bridge his city has increased funding for retiree health care benefits from 12.8 percent in 2010 to more than 26 percent as of October. The city’s strategy has been to draw some money from its fund balance to boost funding for retirement obligations, he said, which it will continue to do. Warren’s 2018 general fund revenue includes 6.8 percent, or $7.7 million, from the fund balance to make annual payments into retiree health care systems for general employees and public safety officers, the budget document shows.

Local leaders’ complaints Municipal leaders for years have said they are starved for cash, in large part because state law limits how fast property values can grow, which restricts city revenue collections in better economic times. That has left many communities unable to fully recover from the housing crash a decade ago. The impact has been compounded by years of cuts to state revenue sharing. But a serious discussion about how Michigan can improve funding to local governments hasn’t gained steam in the Legislature, even as the state’s economy has improved under seven years of Republican control. “They all talk about being willing to talk about it, but I don’t know how much,” said Deena Bosworth, governmental affairs director for the Michigan Association of Counties, which represents the state’s 83 counties. “There are budget constraints coming up at the state level again,” she said, “so I don’t know if they’re necessarily thinking about the local units.” House Democratic Leader Sam Singh, of East Lansing, said he would be willing to ask his caucus to discuss some of the tougher remedies that Republicans proposed for financially crunched cities — but not without also looking at how state law restrains local revenue. “I’m willing to look at additional ideas, but it has to be done in a comprehensive way,” said Singh, who supported the softened legislation.

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BEAUMONT FROM PAGE 3

Catignani said in his letter that this meant that once the legal process is complete and BCP is restructured, “the Priority Health network will be available to all physicians in the BCP network, which includes essentially all physicians in the UP” physician organization. But Williams said the failure of BCP’s non-physician managers to involve or notify UP of the talks over a managed care contract issue is an example of why UP announced it would withdraw from BCP. Beaumont should have made time to include UP in the talks or inform it more quickly, he said. Independent Beaumont physicians have long complained that Beaumont CEO John Fox and his management team have moved in a direction that minimizes Beaumont’s strengths: its doctors. Fox has told Crain’s he is listening and trying to work closely with physicians, but that the system must change and adapt to meet competitive challenges. While UP has announced it plans to leave Beaumont Care Partners, late last week Williams said UP is still mulling a final decision and suggested a compromise might be reached. A Beaumont spokesman said UP’s decision to leave BCP is entirely up to them. But Williams is clearly miffed about the Priority contract. “There are no Beaumont legacy doctors in the Priority Health contract,” Williams said. “These are the

doctors who build the Beaumont brand. We weren’t included. Because we weren’t included, at this point, if a patient chooses that plan, you lose a patient.” Two longtime independent Beaumont doctors who asked for anonymity told Crain’s their names have not been included in the Priority health provider network list for the contract. They are concerned patients who might be a Priority individual health member might be confused or run into claim filing problems. Another problem, said Williams, is that Beaumont appears now to have placed itself in competition with its own independent physicians. “There was never a contract put before the (UP) board. This was totally separate.” Catignani declined an interview with Crain’s. But Colette Stimmell, vice president of corporate communications for Beaumont, said any physician with medical staff credentials on Beaumont’s eight hospitals can make a request to join the Priority narrow network. She characterized the problem with UP as a misunderstanding and that Beaumont highly values independent doctors. On why it didn’t inform UP, Stimmell said BCP managers didn’t have much time to finalize the contract with Priority in September. “They were trying to meet the deadline to offer the plan on this year’s (Affordable Care Act) exchange,” Stimmell said in an email to Crain’s. Open enrollment began Nov. 1. Michael Jasperson, Priority Health’s east region vice president in

Southfield, said Priority wasn’t involved in any possible discussions between Beaumont, BCP and UP. “We worked with Beaumont to set (Beaumont Health Network) up. We weren’t at the table between discussions with them and UP,” he said, adding: “Beaumont has been a great partner for us on group, Medicare Advantage and multiple HMOs and PPOs.” Jasperson said sales for the individual market narrow network with Beaumont, St. Joseph Mercy and St. John Providence have been strong, although overall slower than last year for a variety of reasons. He said narrow network individual plans are appealing because of their lower costs, up to 20 percent lower than other individual market products. But members must agree to stay within the provider network for most routine care. Because the Trump administration dislikes the Affordable Care Act, or Obamacare, federal officials shortened open enrollment in half to six weeks and drastically reduced funding to assist enrollment. Federal officials also eliminated cost-sharing subsidies to health insurers for low-income people to pay for out-ofpocket costs. All actions have caused the public to question whether Obamacare is viable. Individual enrollment in Obamacare in 2017 is expected to drop to under 7.5 million from about 11.4 million in 2016.

Managed care contracts In July 2016, Beaumont Care Partners was formed by founding mem-

bers UP, Beaumont Health and 1,045-member Oakwood ACO. BCP was designed to be a clinically integrated network to sign managed care contracts with payers and large employers. The goal of the partners was to contract directly with health insurers, employers, small businesses and unions in a narrow network-type contracting organization. The organizations planned to continue to operate independently and continue with separate projects. In Michigan, at least three clinically integrated networks have been formed similar to Beaumont Care Partners. They include Together Health Network, a partnership between the University of Michigan and the state’s two Catholic systems, Trinity Health Michigan and Ascension Health Michigan; and Affirmant Health Partners, which includes Henry Ford Health System and Sparrow Health System. Nationally, more than 500 clinically integrated networks exist. But Williams said UP doctors have been increasingly upset that Beaumont has not lived up to four founding principles. They include that BCP should be physician-led; should build upon quality programs already put into place by UP and Beaumont; it should pursue new contracts jointly and look for shared savings opportunities; and should use the infrastructure already built to handle multiple plans. “Over the last year, BCP has steered away from those founding principles,” Williams said. “Now,

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everything goes to the hospital, all the contracts, including the Priority Health one under BCP. These things are happening outside of the framework of BCP.” Stimmell said BCP remains physician-led with physicians comprising more than 75 percent of the 12-member board, including Williams. She said the quality program is also led by physicians. “The Priority contract was an amendment to an existing agreement, not a new contract,” Stimmell said. “The agreement does contain shared savings aspects and other value-based components that BCP would expect.” Stimmell said Beaumont expects 80 percent or more of the physicians in the Priority narrow network will be independent private practitioners. So far, about 1,700 physicians are participating in the network. She said Beaumont is working to move the Priority Health contract through the BCP review and approval process. But Williams said longstanding issues must be worked out with Beaumont before trust is restored. “We have talked about our concerns about participating,” Williams said. “It is a three-way partnership, not just one decided by Beaumont and letting doctors know afterward. We need to come up with a solution that fits all needs. This is a single-signature entity. You should feel comfortable when you are signing a contract.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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CENTER FROM PAGE 1

“When Mr. Van Elslander gets a project in his head, it moves faster than anything we could imagine ... in three weeks, we were able to tack some of them down because of (him.)” The project is still conceptual; negotiations to acquire about 75 cityowned and privately owned properties are still in the works. But as envisioned, the plan will increase the center’s square city block footprint by about 50 percent, Preuss said. That will give it space to expand its building space with a new, 9,100-square-foot building that will include a new cafe and outdoor seating, open green spaces to accommodate outdoor masses, large meetings and concerts, gardens with the stations of the cross for Catholics who’d like to come and pray, an outdoor votive chapel to light a candle in remembrance of loved ones and possibly, newly developed or rehabbed housing to keep neighbors in the area and provide a limited number of residences to visitors of the center. The property acquisitions will also give the center land to hold to accommodate future growth — an opportune thing, considering the Islandview neighborhood where the center is located sits between Detroit’s developing downtown and the neighborhoods known as the Villages, which are also coming back. Van Elslander’s gift pays homage to the relationship his father had many years ago with the late Father Solanus Casey. As his business grew, Van Elslander was often a donor to the Capuchin Soup Kitchen and always involved in the friars’ charity work, Pre-

COUPLE FROM PAGE 1

Still living in Washington, D.C. with their young daughter Nyla and son Amar, Clark, today the president and CEO of the heavy-hitting Detroit-based nonprofit Hudson-Webber Foundation, was using FaceTime with Turay as he walked through the seven-bedroom Iroquois Street house. “Buy it,” the former Obama administration official immediately told Turay, who on Nov. 30 left his post as executive vice president of real estate and financial services for the Detroit Economic Growth Corp. to start a yet-unnamed development company working on mixed-use projects. “Big Ugly.” “Little Red.” Those were just two of the playful nicknames they bestowed upon the homes they had considered. But with the century-old colonial, no nickname was needed. In the prized lower east side neighborhood, they knew they had found the right house for their young family. And thus, the power pair became homeowners in the city where Clark’s father, Ed, a New York City-based artist, has displayed his paintings for years in the N’Namdi Center for Contemporary Art and the Detroit Institute of Arts. “People will likely underestimate the capacity, the brilliance, the sophistication, the strategic nature of how Moddie and Melanca move as a unit,” said Rodrick Miller, the former president and CEO of the DEGC who has known Turay for more than 20 years. “Detroit is very fortunate to have both of them.”

Casey Center plans As envisioned, the project will include: J Expanding the Solanus Casey Center with construction of a 9,100-square-foot, two-story building on an adjacent property fronting Meldrum to house the center’s relocated offices and gift shop and a new cafe with outdoor seating.

A new east entrance to the main building and expanded confessionals and counseling space there. J

Expanded garden space with the stations of the cross, an outdoor votive chapel and open green space to accommodate outdoor mass, meetings and concerts on property adjacent to the center and abutting the developing Beltline Greenway. J

New parking areas to create over 250 parking spaces in the near term and additional parking in the future. J

J Newly constructed homes or renovations of some number of existing homes to keep residents in the neighborhood and to provide a limited number of housing units for visitors to the center. J Streetscape and landscape improvements and stormwater management systems to help reduce costs and also help take care of “Mother Earth,” Preuss said. J Expanded urban garden space for the Capuchin’s Earthworks garden, north of Kercheval, possibly in collaboration with Gleaners Community Food Bank of Southeastern Michigan.

uss said. He was also one of the major donors who supported the building of the Solanus Casey Center in 2002. “Growing up in Detroit, I remember my dad going to see Father Solanus when he needed help and guidance,”

Detroit’s appeal

Six years ago, Turay, then living in the nation’s capital and working as a senior adviser to the U.S. General Services Administration, visited Detroit for the first time. The Durham, N.C., native and Melanca were in town for a retrospective at the N’Namdi Center showcasing six decades of his father-in-law’s work. “From the time that I was here just in that (2011) or so time frame and then in October (2015, when he was hired by the DEGC) ... I just called Melanca and said, ‘Something. Is. Happening. In. This. City,’” Turay said, deliberate, brief pauses between each word. Clark, a 43-year-old Harvard-educated lawyer who did her undergraduate work at Brown University, would not be far behind. Still in the Obama administration as chief of staff in the Office of Community Oriented Policing Services, or COPS, for the Department of Justice, she wasn’t sure if she would follow Turay to the Motor City, or if instead she would move back to New York, where she was raised in the Chelsea neighborhood, and have Turay commute there on weekends. But on her first visit to Detroit with their children, now 5 and 3, in October 2015, she was convinced it was the right fit for the family. She didn’t know what type of work she wanted to do, though. In May 2016, she was named head of Hudson-Webber, where she is implementing a new strategic plan focusing on community and economic development, arts and culture, built environment, safe and just communities and other initiatives. Hudson-Webber grants $6 million-$7 million annually in the city.

Art Van Elslander: Donated $20 million to center.

Jaime Rae Turnbull: Hope to acquire property.

Van Elslander said in an emailed statement. “Father Solanus still offers that hope to so many through the work of the Center and the Capuchin Soup Kitchen, and I am privileged to honor his legacy in a way that will benefit the entire community.” Van Elslander initiated the gift, knowing the center’s need for additional space, Preuss said. “He caught on really quickly that we want to do this in ways that are sensitive to the needs of the neighborhood and the wider good of the city,” an approach rooted in the Franciscans’ call to be a good neighbor, a brother to those around you, Preuss said. It’s an approach he’s hoping will catch on as redevelopment moves into Detroit’s neighborhoods. “We hope to make this a model of what can be done so that (development) includes the rich and the poor, the black and the whites and ... is sustainable ecologically and socially,” said Preuss, who was on the board of the Islandview Village Development Corp. when it was building houses in another part of the neighborhood about 20 years ago.

Property acquisitions As part of the fast-paced project, the “It wasn’t until kind of seeing the city through his eyes, what he was doing,” she said.

Big projects And, as the top real estate official for the DEGC, he was doing a lot. Projects ranging from the Detroit Pistons move back to Detroit to the mammoth skyscraper planned for the former site of the J.L. Hudson’s department store crossed Turay’s desk, some of them in their infancy, said Miller, who launched Ascendant Global, an economic development consulting firm, in the fall. “Anything that was real estate-related, he and his team were the ones that led it,” said Miller, who first met Turay more than two decades ago when they were both freshmen living in Goold Hall off Oakwood Avenue at Saint Augustine’s University in Raleigh, N.C. At the DEGC, Miller and Turay had become the one-two punch behind the most significant developments in Detroit in recent memory. Now Turay, 41, is out on his own, lining up his first mixed-use Detroit projects in the private sector. “It’s the right time,” he said. “I’m not running away from the DEGC; I’m running toward something.”

A lucky reconnection Turay and Miller hadn’t spoken since graduating from Saint Augustine’s in 1999. They reconnected when Turay, working as a developer in 2015, was interested in buying a downtown New Orleans building for a new project. It just so happened that Miller was running the New Orleans Business Alliance — The Big Easy’s equivalent of the

A.A. Van Elslander Foundation is negotiating the purchase of roughly 64 properties owned by the city of Detroit, the Detroit Land Bank and the Detroit Water and Sewerage Department, along with 10 or more privately owned parcels. The negotiations are taking place on behalf of the Solanus Casey Center’s parent organization, the Capuchin Franciscan Province of St. Joseph, which is housed right next door to the center, said Jaime Rae Turnbull, the foundation’s representative on the land acquisition and project management. Many of the properties will be focused in a central square area bounded by Mt. Elliott Street on the west, Beaufait Street on the east, St. Paul Avenue to the south and Kercheval Avenue to the north, with some properties in outlying areas envisioned as additional parking and farming areas. The hope is to get in front of the Detroit City Council in January and complete the acquisitions needed for parking areas the same month, Turnbull said. That would enable the project to move forward immediately with blight removal and paving of selected areas to create much-needed parking. The response from the city has been very positive, Turnbull said. “We were very encouraged about how great the city has been to work with as we work through the details.” Vince Keenan, special projects manager in the City of Detroit’s Department of Neighborhoods, confirmed that they are working with the Capuchins on the project. “Through the city’s ongoing Islandview Greater Villages planning effort, we have been closely following Solanus Casey’s journey toward sainthood and recognize the profound impact it will have on Detroit and the neighborDEGC — at that time. By the end of the year, Miller was running the DEGC, and he needed a head of real estate. He already knew the person who could fill the job. “He is one of the best I have ever worked with,” Miller said. “He is consistently strategic, and understands markets, both in terms of what data tells him and also intuitively understands them.”

On Obama’s team Clark was chief of staff to the President’s Task Force on 21st Century Policing, convened by President Obama after the unrest in Ferguson, Mo., following the August 2014 shooting death of 18-year-old Michael Brown. It conducted listening sessions across the country, receiving testimony from over 100 people culled over a 90-day period. A 116-page report of best policing practices and recommendations on promoting effective crime reduction while building public trust was released in May 2015. A member of the task force, Tracey Meares, a Yale Law School professor, learned about the search for the Hudson-Webber Foundation’s new president and CEO to replace David Egner, who left to become president and CEO of The Ralph C. Wilson Jr. Foundation, from a managing director at Koya Leadership Partners who was running the search. Clark was a member of a policy team chosen by Laurence Tribe, a Harvard constitutional law professor who was the inaugural head of the Access to Justice Initiative at the DOJ. She said her work there helped improve access to legal services for those who couldn’t afford attorneys.

FATHER SOLANUS CASEY CENTER

The Rev. David Preuss stands next to the beatification picture of the late Fr. Solanus Casey.

hood surrounding the Capuchin center. We want to be thoughtful about how we use land and work with the Capuchins to best support increased traffic and interest and while balancing the tranquility of the space and the quality of life for nearby residents,” Keenan said in an email. Hamilton Anderson is the architect on the project. “Our real goal is to really connect these unique places through the greenspace, making it one lovely campus,” Turnbull said. “People come and pray for miracles at the center. This is an opportunity to expand on that … to pull everything together and provide more greenspace and a better experience for more people.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch Tribe, in an email to Crain’s, called her “a highly valued member of my Access to Justice Office in the Obama administration: invariably resourceful and energetic, extremely intelligent and knowledgeable, and deeply committed to the mission of the office.”

A partnership It’s been a decade since the couple first met at a birthday party through a mutual friend in Washington, D.C. Clark, at the time working for the Brennan Center for Justice in New York, was in the nation’s capital frequently for her job. Ten years later, in her 13th floor office last week in the Fort Washington Plaza building downtown, they sit at a small table; Turay eats a Gateway Deli salad with chicken on it. Talking about their first meeting in December 2008, he jokes that he “likes to think” he was “a little bit smoother than she gives me credit for.” “All the friends went out to dinner afterwards, so I just started chatting her up. Smooth talk,” he says with a smile. Dave Meador, vice chairman and chief administrative officer at DTE Energy Co., knows the smile well. He has worked extensively with both Turay and Clark as a member of the DEGC and Hudson-Webber boards. “They are both supportive of each other’s professional career. Moddie is Melanca’s biggest cheerleader, and vice versa,” Meador said. “They know everybody in Detroit and they know how to network and how to deal. You’d think they grew up here and lived here their whole lives.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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BRIDGES FROM PAGE 1

estimates and the Ambassador Bridge owner’s pursuit of a replacement bridge. Declining border traffic during a period of economic growth for both the U.S. and Canada runs counter to historical growth trends and adds to the undercurrent of tensions with Mexico in renegotiation of the 24-year-old North American Free Trade Agreement. “Right now, the biggest factor that would impact (traffic) is the NAFTA renegotiation,” said Bernard Swiecki, senior automotive analyst at the Ann Arbor-based Center for Automotive Research. “That will be a huge driver of future border traffic.” Since Gov. Rick Snyder forged an agreement with Canadian leaders in 2012 to build the Gordie Howe bridge, total traffic at Michigan and New York border crossings with Ontario has decreased by 11.3 percent and is less than 1 percent above 2009 levels during the depths of the Great Recession, a Crain’s analysis of traffic data shows. Commercial truck traffic, the lifeblood of most border-crossing operators, declined by 3.7 percent at the Michigan and New York border crossings between 2010 and 2016 — a reflection of the changing dynamics of justin-time manufacturing supply chains and a continued shift to Mexico in the assembly of vehicles and manufacturing of auto parts, analysts say. The Detroit-Windsor Tunnel was one of two international crossings with Ontario that saw an increase in traffic last year compared with 2012. The predominantly passenger traffic running through the tunnel under the Detroit River topped 4.6 million trips in 2016, still only half of the traffic the tunnel got annually at its peak in the late 1990s. “It’s a new normal,” said Neal Belitsky, president and CEO of Detroit Windsor Tunnel LLC. Overall traffic at the Blue Water Bridge is down 11 percent since 2012, while the Ambassador Bridge has seen a 7.7 percent drop in traffic in that time period and a 45 percent decrease compared with 2000. “Everybody involved in the international crossings between the U.S. and Canada has this elephant in the room, and it is the loss of traffic since 2000 and the projection of no growth for traffic for the next 20 years — and we all have to face up to that,” said Dan Stamper, president of the Detroit International Bridge Co., which runs trucking mogul Manuel “Matty” Moroun’s Ambassador Bridge. The traffic decline is a mirror image of increased trade at the southern border as Mexico surpassed Canada in 2015 in the value of goods being shipped into the U.S., according to U.S. Census Bureau trade data. Mexico in 2016 held the No. 2 spot for U.S. imports — well behind China — and is on pace to ship a higher dollar value of goods into the U.S. than Canada this year, federal data shows. Analysts attribute the declining value of Canada’s exports into the U.S. to both the lower cost of pipeline-transported petroleum from Canada and Mexico’s growing automotive sector. “Canada has been struggling to attract automotive investment,” Swiecki said. “It’s really been Mexico that’s gotten the lion’s share of (new) production.”

The NAFTA question Canada’s declining position as a trading partner of the U.S. raises questions of whether two new six-lane

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bridges in Detroit between the Ambassador and the Howe bridges are needed, said Laurie Trautman, director of the Border Policy Research Institute at Western Washington University. “If you’re just talking about the traffic, it doesn’t make sense,” Trautman said. “If there’s other reasons — security reasons, not wanting private ownership of a bridge, the (highway) approach — that’s different. But if you’re just talking about needs of traffic, it doesn’t add up.” Trautman added: “And then you throw NAFTA into the mix, and who knows what’s going to happen?” In talks over NAFTA, President Donald Trump’s administration has sought requirements that half of the value content of vehicles assembled in North America be produced in the U.S. Trump also wants 85 percent of parts to be sourced from within the continent — an increase from the current 62.5 percent requirement and one that could benefit U.S.-Canadian trade, said Bill Anderson, director of the Cross-Border Institute at the University of Windsor. “If Mexico and Canada move in the direction the (Trump) administration wants to go, it actually could expand the trade through this corridor,” Anderson said. “If NAFTA collapses, obviously it’s not good for anybody who’s collecting tolls on these bridges. The trade won’t collapse, but it certainly won’t help.” Traffic at the Detroit-Windsor border surged following the 1994 implementation of NAFTA, hitting a peak of 12.4 million crossings on the Ambassador Bridge in 1999 and 9.6 million crossings at the tunnel. The Blue Water Bridge’s traffic peaked at 5.9 million crossings in 2000; traffic at the St. Clair River crossing was 4.6

million in 2016, according to the Bridge and Tunnel Operators Association. “A failure of NAFTA is a direct harm to us,” Stamper said. “And a direct harm to every border crossing.”

The bridge argument Canadian leaders have long seen a second span to Detroit as vital to improving trade along the manufacturing corridors of Ontario’s Highway 401 and the interstate highways of Michigan and the Upper Midwest. “What I can tell you is if you don’t do this, the economic costs to this community, to our country, to our province, to the state of Michigan, would be enormous,” WDBA board Chairman Dwight Duncan told attendees at a public meeting in Windsor last month. Commercial trucking companies not owned by the Moroun family also have long favored a second bridge in Detroit to bypass Windsor. “It’s a bottleneck,” said Bob Sellers, vice president and chief operating officer of Canton-based Reliable Carriers Inc., which hauls vehicles across the border from Ford Motor Co. and Fiat Chrysler Automobiles plants in Ontario. “We spend hours just trying to get through and across that bridge.” Proponents have stressed the need for two bridges at the border for commercial traffic as both a safeguard for national and economic security. “With the exception of the tone of the current negotiations with NAFTA, as global trade becomes more borderless, more liberalized, you’re going to see this region connect to many more industrial centers and developing economies around the world,” said Mark Fisher, president and CEO of the Coun-

cil of the Great Lakes Region, a binational regional economic think tank. “We will need additional capacity in terms of the transportation infrastructure that enables economic growth.” The last comprehensive study of projected traffic at the Detroit and Port Huron crossings that’s been made public was conducted in 2010 for the Michigan Department of Transportation by the construction consulting firm Wilbur Smith Associates Inc. That study, presuming the new bridge would be built and operating by 2016, concluded that the new span would carry 5.9 million passenger and commercial vehicles in its first year, capturing 28 percent of total traffic in the Detroit-Port Huron corridor. That calculation assumed total traffic at the four crossings would top 20.8 million by 2016 — 5 million trips below actual traffic — and grow to 30.4 million in 2025. The Ambassador Bridge’s president said the 2010 projections of 4 percent annual growth in traffic were wildly optimistic. “The projections from our experts are we’d be lucky to get a 1 percent increase every year for the next 20-25 years,” Stamper said. Fisher said there are changing economic conditions in manufacturing and the resurgence of cities like Detroit that was not seen a decade ago during the planning for a second bridge. “Building capacity takes time,” Fisher said. “It may look odd to some, but in the not-too-distant future, I do see the region growing significantly enough where we’re going to need some additional capacity.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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Consumers Energy, DTE recognized with awards

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PMorgan Chase & Co.’s Entrepreneurs of Color Fund is tripling in available capital for loans to minority-owned small businesses in Detroit to more than $18 million after attracting new investments from philanthropic foundations and another bank. The Ralph C. Wilson Jr. Foundation, Fifth Third Bank and The Kresge Foundation joined JPMorgan Chase and the W.K. Kellogg Foundation in contributing to the loan fund for small business owners of color who have difficulty accessing traditional lines of credit. Forty-three small businesses in Detroit have borrowed $4.5 million from the Entrepreneurs of Color Fund since 2015 for capital improvements, expansions and hiring new employees, said Peter Scher, head of corporate responsibility for JPMorgan Chase. Another dozen businesses are in the process of borrowing $1.3 million from the fund, Scher said. “I think it just shows there’s a real market for these kind of resources,” Scher said in an interview with Crain’s. In 2015, JPMorgan Chase partnered with the W.K. Kellogg Foundation and the Detroit Development Fund to create the small business loan fund as part of the bank’s 2014 commitment of $100 million toward Detroit’s economic recovery through different levels of business investment, loans and grants. In May, JPMorgan Chase increased its Detroit commitment to $150 million. Jamie Dimon, chairman and CEO of the global banking giant, was expected to be in Detroit last Thursday for a late morning event at the Gem Theatre with Mayor Mike Duggan and new investors in the Entrepreneurs of Color Fund. JPMorgan Chase plans to create similar loan funds in San Francisco and New York next year, Scher said. “It’s a model that works,” he said. The fund started with $6.5 million — $3.5 million from JPMorgan Chase and $3 million from the Kellogg Foundation.

BUSINESS NEWS J Dan Gilbert and other Detroit and state leaders attended a groundbreaking ceremony last Thursday for a project on the former J.L. Hudson’s department store site that is planned to be the tallest building in Detroit and the state. J Marygrove College is in discussions on short-term rentals of space in its soon-to-be-vacant residence hall building, after the Detroit private school said in August that it would close its undergraduate program after the fall semester and offer graduate studies only starting winter semester 2018. J Da Edoardo Foxtown Grille is closing its doors at the end of the year after 16 years of serving up Italian food next door to the Fox Theatre, after it disagreed with landlord Olympia Development of Michigan on lease terms. J Denso International America Inc.

PLUM MARKET

Plum Market will become Oakland University’s newest dining partner and will be located in the newly renovated student center. Plum Market will team with the university’s food service vendor Chartwells Higher Education to help serve 23,000 meals per week to students and about 350,000 meals each semester.

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

$27 million The funding round Detroit-based venture capital firm Fontinalis Partners LLC joined to scale up California startup Ouster's autonomous driving technology.

250

The number of residences planned as the city of Detroit seeks developers to turn the vacant Lee Plaza and Woodland Apartments buildings into mixed-income housing.

$142.8 million The total corporate investment the University of Michigan's business engagement program has yielded in the fiscal year that ended June 30.

acquired Holland-based mobile phone software maker InfiniteKey Inc., which develops low energy Bluetooth technology that allows smartphones to act as advanced key fobs to unlock car doors. J The Detroit Tigers continued their strategy of shedding expensive talent in return for less costly prospects by dealing veteran second baseman Ian Kinsler to the Los Angeles Angels of Anaheim last Thursday. J The Detroit Pistons organization unveiled the name and logo for its team, the Pistons Gaming Team, which will compete in the NBA 2K League starting this spring. J Plum Market is set to open a location in Oakland University’s student center next fall after the school completes a $44 million renovation to the building. J Parisian-inspired cafe Le Petit Zinc is making its return to Detroit soon with in a new Midtown location, after closing in September in Corktown. J Grocery delivery company Doorganics expanded service from Grand Rapids to metro Detroit. J Amore Da Roma was expected to open Saturday in the former home of Roma Café in Eastern Market. J Rideshare app company Lyft Inc. is now offering education benefits for its drivers nationwide — including in metro Detroit — through Denver-based Guild Education. J San Francisco-based Lyft is also

putting its name behind an event lounge at MusicTown Detroit in Hockeytown Cafe with a one-year sponsorship. It did not disclose the dollar amount. J Datapak Services Corp. expects to lay off up to 61 employees as it closes its facility in Webberville and makes adjustments at its Howell headquarters. J Aggregate revenue for Detroit’s three casinos was up 0.4 percent in November from October and 1.4 percent year over year, the Michigan Gaming Control Board announced.

onsumers Energy Co. won recognition last week as one of America’s “greenest” companies by Newsweek magazine while competitor DTE Energy Co. won highest in the Midwest ranking in business customer service for a large utility by J.D. Power. Patti Poppe, CEO of Consumers Energy, in an interview with Crain’s, said the Jackson-based energy company’s decision to close seven coalfired power plants and expand renewable energy helped earn it recognition as Michigan’s greenest company and ninth in the nation in Newsweek’s annual “Green Rankings.” Poppe said Consumers has eliminated 950 megawatts of coal-fired electricity generation and replaced it with 500 megawatts of gas-fired plants, renewable energy and energy efficiency improvements. She said

Consumers now generates 22 percent of its power from coal, down from more than 50 percent a few years ago. Newsweek’s survey looks at such factors as support for clean energy, reduction of carbon emissions and efforts to reduce and divert waste. On the J.D. Power 2017 “electric utility business customer satisfaction survey,” DTE was ranked “highest in customer satisfaction with business electric service in the Midwest” based on six factors. They are customer service; power quality and reliability; corporate citizenship; billing and payment; pricing; and communication. DTE was highest in the Midwest for large companies. Since 2014, DTE has improved power quality and reliability, and in areas where upgrades have been completed, power reliability has improved by 70 percent.

OTHER NEWS J The state-led autonomous and connected vehicle testing site, the American Center for Mobility, in Ypsilanti Township officially opened last week. Van Buren Township-based Visteon Corp. and Ann Arbor-based Toyota Research Institute were the first companies to begin testing. J Wayne County Airport Authority CEO Joseph Nardone is leaving his post at the governmental agency to become president and CEO of the Columbus Regional Airport Authority. J Last week’s 6- to 9-inch snowstorm caused hundreds of schools to close and Detroit Metropolitan Airport to cancel about two dozen flights. J Author and Wall Street Journal columnist Peggy Noonan is scheduled to speak about trust in government, media and business at the 2018 Mackinac Policy Conference May 29June 1. J The Detroit Zoo plans to renovate and expand its habitat for the endangered red panda. The bulk of the $700,000 project is being funded with a $500,000 grant from the Holtzman Wildlife Foundation. J The Quicken Loans Community Investment Fund and DTE Energy Co. sponsored a Detroit Department of Transportation initiative to decorate some of the city’s buses for the holiday season. J Oakland University Credit Union plans to donate $1 million over five years for Oakland University’s study abroad and other international programs. J The Detroit Journalism Engagement Fund awarded a total of $322,000 to media organizations as it aims to bolster local engagement and coverage of the city’s recovery. The gift will go to six community-media partnership projects including those by the Michigan Chronicle, ARISE Detroit and WDET.

MARK CUNNINGHAM

Detroit picked up Ian Kinsler in November 2013 when it traded slugger Prince Fielder to the Texas Rangers.

Kinsler trade part of Tigers’ efforts to cut payroll costs

ast week’s deal by the Detroit Tigers to trade second baseman Ian Kinsler to the Los Angeles Angels means the Tigers will pay more next season to the player who they traded for Kinsler four years ago. Detroit picked up Kinsler in November 2013 when it traded slugger Prince Fielder to the Texas Rangers. In that deal, the Tigers agreed to pay $30 million of Fielder’s $168 million remaining salary in annual $6 million installments through 2020. Financially, the trade means that two of the current top five salaries paid by the Tigers in 2018 will be to players not on the roster: Detroit is paying $8 million of Justin Verlander’s contract each of the next two seasons as part of the July deal that sent him to the Houston Astros, and is paying $6 million annually to Fielder, who is out of baseball. Detroit’s top salaries next season will be $30 million for Miguel Cabrera, $24 million for Jordan Zimmermann, and $18 million for Victor Martinez. With Kinsler gone, the next highest salary is $6 million for the one-year

deal recently signed with ex-Astros pitcher Mike Fiers. They also are paying Anibal Sanchez $5 million to not play for them as part out of a buyout. Overall, the Tigers now have about $80 million in payroll, according to salary tracking site Spotrac.com. That total doesn’t reflect salaries that will be set in arbitration in January. That’s less than half the $200 million payroll at the start of 2017. Detroit over the summer launched a concerted effort to shift from a decade of large-market spending under owner Mike Ilitch, who died in February, to a strategy under new team President Chris Ilitch and General Manager Al Avila of peddling veterans for inexpensive prospects. The idea is to build a contender with talent developed within the Tigers’ own farm system, while also investing in advanced scouting and analytics — a plan some have questioned after old-school manager Ron Gardenhire was hired as manager after the season. Also dealt during the season were Verlander, Justin Upton, Alex Avila, Justin Wilson and J.D. Martinez.

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