Crain's Detroit Business, Jan. 15, 2018 issue by Crain's Detroit Business

Domino’s CEO on next steps and autonomous delivery Page 3 Patrick Doyle

Women in leadership: A few questions for Lisa Lunsford Page 14

JANUARY 15 - 21, 2018 | crainsdetroit.com

“...note how (Chicago Mayor) Rahm (Emanuel) is defining Chicago’s talent pipeline — claiming a 4-5 hour radius as well, including Ann Arbor.” Aaron Turk, Detroit Economic Growth Corp.

DEVELOPMENT

The bid for Amazon HQ2 Email chain shows 6-week sprint behind Detroit’s pitch By Chad Livengood

leagues at Dan Gilbert’s Bedrock LLC, where she is vice president of architecture and design, and a city economic development official, Jed Howbert. “If not, great! We are done.” Dittmer’s seemingly tongue-incheek email — “All of that was said in super tired robot voice,” she wrote — was just one in more than 1,800 pages of documents Crain’s obtained through a Freedom of Information Act request that shed new light on the frenetic 40-plus days spent putting together Detroit

clivengood@crain.com

and Kirk Pinho

“I also vote on the talent that we broaden to include Canadian schools in a five hour drive. We should take credit for the entire area around Detroit and Windsor.” Jed Howbert, Detroit mayor’s office

kpinho@crain.com

At 6:11 p.m. on Oct. 17, Melissa Dittmer was bone-tired after a six-week sprint working on Detroit’s bid to land Amazon’s second corporate campus. It was two days before a proposal for the most prized economic development project in recent memory had to be submitted to the Seattle-based retail, entertainment and tech juggernaut. “Do you see any errors that will get any of us fired?” she asked several col-

and Windsor’s bid to lure the anticipated $5 billion investment and 50,000 high-paid workers. Emails and interviews with principals on the project offer a rare look inside how the levers of power are wielded in Detroit, a process riven with tension, nerves, competing interests and egos, culminating in a coincidental encounter between Jeff Bezos and Dan Gilbert a little over two weeks after the bid was submitted. Within 19 minutes of Dittmer’s email, the 242-page SEE HQ2, PAGE 20

“Governor Snyder has asked me to convene an update/ issues call every other day with the ‘Field Commanders’ … for the Amazon Project.” Rich Baird, transformation manager for Gov. Rick Snyder

“Do you see any errors that will get any of us fired?... We will stay at the printers until the documents are complete... Will then bring them back to the office... All of that was said in super tired robot voice.” Melissa Dittmer, Bedrock

The Detroit Amazon bid book showcases the downtown Detroit and Windsor skylines.

NONPROFITS

Boys & Girls Clubs recruits CEO to help fix problems By Sherri Welch swelch@crain.com

Boys & Girls Clubs of Southeastern Michigan has recruited a career CEO known as a change agent in the charity’s national network to help it fix problems including financial losses in recent years and a culture that led to high employee turnover. The hiring of Brad Baumgardner as crainsdetroit.com

interim CEO follows several years of operating at a loss, with expenses outpacing revenue most years and a longtime reliance on annual fundraising events, including the North American International Auto Show Charity Preview and Automotive Golf Classic, for roughly a third of its annual revenue. That model contributed to its loss last year when proceeds Vol. 34 No. 2

$5 a copy. $169 a year.

Centers are expected to offer such as GED and financial literacy training aimed at adults, new service areas for the local affiliate. The nonprofit’s longtime CEO, Len Krichko, retired after 20 years at the end of December. During his tenure, Boys & Girls Clubs grew from eight clubs to 10 and

from the events fell short of projections. The reshuffling comes after the prominent local nonprofit was chosen in December to host the first of 10 pilot centers planned by the U.S. Department of Housing and Urban Development to give those receiving federal housing assistance tools to improve their lives. The Envision

SEE CEO, PAGE 17

FOCUS

N BUSINESS: JACK

NEWSPAPER

CRAIN’S MICHIGA

 Boys & Girls Clubs of Southeastern Michigan recruits ‘change agent’ from national system as interim CEO  Will work with board to turn around financial losses, develop new operating strategies for the nonprofit  Moves come as the nonprofit is tapped by HUD to pilot one of 10 U.S. centers

INSIDE

, 2018 // J A N U A R Y 1 5 OIT BUSINESS CRAIN’S DETR

Need to know

SON

Crain’s Michigan Business: Jackson << Storied engineering firm continues to make history in Jackson. Page 8

IN THIS PACKAGE

Peak performance. Page 9 HOTO

GETTY IMAGES/ISTOCKP

Storied engineering firm By Tom Henderson thenderson@crain.com

in One of the oldest businessesfirm Jackson County, the engineering Inc., is Commonwealth Associates chapter to its about to add another company will storied history. The to house build a new headquarters and has choits 215 local employees in the city sen the revived downtown it wants to be. of Jackson as the place consulting, The company provides managedesign services and project generament for high-voltage power around tion and distribution projects Seattle and the U.S., with offices in Ohio; Spokane, Wash.; Columbus,which it Pa., Atlanta; and Lancaster, to support a opened last February Pennsylvania large contract with Power & Light. replaced Richard Collins, who and Dennis DeCosta as president the $26-milCEO in July, soon after

Need to know

Inc. Commonwealth Associates in downtown building new headquarters Jackson will bring 215 J $26M HQ development employees under one roof

has rich Company founded in 1888 who ran for history, including a president president

group. firm’s power-generation to ComThe move will be a return roots. In monwealth’s downtown current head1998, it moved into its Township, quarters in Blackman near the west of the city of Jackson buying an Jackson County Airport, Corp. Eaton from building office that Commonwealth has outgrown in a building building, renting space and in downnext to its headquarters original its of site the at town Jackson headquarters. roof,” prefer to be under one

ory continues to make hist

a seRailway and Light Co. Following s in ries of public utility consolidation involving the Midwest and South, lth, Alaamong others Commonwea Power, Gulf bama Power, Georgia Power, a bilPower and Mississippi The lion-dollar holding company,Corp. Commonwealth & Southern in was established with headquarters New York. utility It was the nation’s largest 165 holding company, controlling from states, utility companies in 10 Michigan to Florida. & SouthIn 1929, Commonwealth lawyer, Wenern appointed a young counsel. dell Willkie, as corporation ranks to the Willkie quickly climbed C&S in 1933. become the president of Worried about the monopolistic large regionpower of C&S and other President al utility companies, the Roosevelt pushed for Franklin BUSINESS DETROIT Company Act TOM HENDERSON/CRAIN’S Public Utility Holding breakup of th in July. of 1935, which led to the president and CEO of Commonweal Richard Collins became lth & Southern, creatin the Commonwea d companies, the largest power generators built a ing two Jackson-base b. The experiment of

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

MICHIGAN BRIEFS

INSIDE

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

Michigan sues Wolverine World Wide

Michigan environmental regulators have sued footwear company Wolverine World Wide Inc. over widely used industrial chemical contaminants that were dumped into the ground decades ago and have seeped into drinking water, saying the lawsuit is necessary to lock into place response efforts and to reimburse the government for past and future costs. The complaint, filed in federal court, seeks an order declaring that the Rockford-based business’ past disposal of hazardous waste poses or may pose an imminent and substantial endangerment to human health. Of nearly 1,200 private residential wells tested in an area north of Grand Rapids, 78 have levels of per- and polyfluoroalkyl substances, or PFAS, above the lifetime federal advisory level of 70 parts per trillion. PFAS were commonplace in industrial applications, including Scotchgard, which Wolverine used in its operations. Scientists are uncertain about how they affect human health at exposure levels typically found in food and water, but some studies suggest the chemicals might affect fetal development, disrupt hormonal functions, damage fertility and immune systems, and boost the risk of cancer.

State officials said while Wolverine has been responsive, the suit is the next step in formalizing timelines and expectations for cleanup, sampling and other actions. “The state of Michigan is committed to holding responsible parties responsible. We have filed this action today because we want to ensure that immediate and long-term solutions are confirmed by the courts,” state Department of Environmental Quality Director Heidi Grether said in a statement.

Brader resigns from Michigan energy agency

On the heels of the planned resignation of Valerie Brader as executive director of the 3-year-old Michigan Agency for Energy, Gov. Rick Snyder announced last week that he is reorganizing the agency and merging some functions into the Michigan Public Service Commission. Brader, who was appointed to the MAE in March 2015, plans to join Troy-based Rivenoak Law Group PC in March to expand the firm’s offering from its focus on intellectual property. She also will be heading a new consulting company that will focus on energy, the environment, municipal and public financing and economic development, Brader said in an interview with Crain’s. Brader, whose last day at MAE will be Feb. 10, joined the Snyder adminis-

CLASSIFIEDS

DEALS & DETAILS

KEITH CRAIN

OPINION

OTHER VOICES PEOPLE RON FOURNIER

SAMANTHA VANDERLIST OF SHUTTERSAM PHOTOGRAPHY

Michigan House is a Michigan-focused pop-up space that has run for the past three years at the South by Southwest festival, known as SXSW, in Austin, Texas.

tration in 2011 as deputy legal counsel and senior policy adviser to the governor. “The No. 1 thing is that I am leaving (the MAE) in very good hands,” Brader said, adding that the time is right to step down after many accomplishments that include a long-term water deal for the city of Flint, a landmark energy law and an interim agreement with Enbridge on the Line 5 Pipeline that carries oil and liquid natural gas through the Straits of Mackinac. “I am really blessed. I had an ambitious list of things I wanted to get done,” she said. “Together, we passed energy legislation that will be a national model, were recognized nationally for our leadership in energy infrastructure and security issues, ensured that the Upper Peninsula could have a bright

energy future that they could control, re-invented our grant-making programs in response to feedback from stakeholders, and helped thousands of customers with their utility issues,” Brader said in a statement. MAE Deputy Director Madhu Anderson will serve as the agency’s acting executive director upon Brader’s departure.

Michigan House boosts programming at SXSW

Michigan House, an exhibit at South by Southwest (SXSW), is growing its relationship with the Austin, Texas, festival this year as it promotes Michigan’s creativity and products to the outside world. South by Southwest is an annual media, music, film and tech conference conglomerate taking place

WEEK ON THE WEB

March 9-18 this year. Detroit-based Creative Many and Middle West, which has offices in Detroit and Grand Rapids, have led an effort for the past three years to “change the national narrative about what’s going on in Michigan” through a pop-up space and event venue during the festival, said Ted Velie, co-founder of Middle West. “In our first year, we were pretty guerrilla,” Velie said. Now Michigan House has grown to be part of the official programming. This year its panels and discussions on March 10 will take place as part of the festival. Its financial sponsorship has also grown from 12-14 sponsors the first year to about 30 for 2018, he said. New sponsors this year include Spectrum Health, PlanetM, the Detroit Regional Chamber, Ann Arbor Spark and StockX. This year’s budget hasn’t yet been finalized, Velie said, but the group is planning for $200,000, up from approximately $50,000 the first year.

Future

Energy is essential to the way we live, work and play. ITC operates, builds and maintains the region’s electric transmission infrastructure. We’re a Michigan-based company working hard to improve electric reliability, increase electric transmission capacity, and keep efficient, reliable energy flowing to homes and businesses across the state.

Building the electric transmission infrastructure that will power the future. @ITCGrid

RUMBLINGS

ENERGIZING MICHIGAN’S

ITCHoldingsCorp

7 15, 16

ITCHoldings

www.itc-holdings.com

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

MANUFACTURING

Giving lightweight a LIFT

SPORTS BUSINESS

By Chad Livengood clivengood@crain.com

As the global auto industry comes to town this week for the North American International Auto Show, a new facility for testing and commercializing lightweight metals and composite materials is being showcased in Detroit’s Corktown neighborhood. Lightweight Innovations For Tomorrow (LIFT) and the Institute for Advanced Composites Manufacturing Innovation (IACMI) is a combined federally designated testing and training facility on Rosa Parks Boulevard that opened in October after years of development. The 100,000-square-foot building in a former Mexican Industries Inc. auto parts plant is billed as neutral site where automakers, aerospace companies, shipbuilders, tier-one suppliers and academic researchers can test metals and composite materials in a pre-competitive Need or proprietary setto know ting. JJFacility Detroit’s The research Corktown focused center is located on development of less than two lightweight metals miles from the and composite Cobo Center materials showroom floor, JJVolkswagen where Detroit’s annual auto show Group’s Audi bring will attract thouR&D work from sands of journalGermany to ists, auto suppliDetroit ers and OEMs to JJIACMI and LIFT town this week. giving tours during There are 14 auto show industry federally desigpreview days nated manufacturing institutes in the country that were set up under the Obama administration, but the Detroit facility is the only place where there’s testing of both lighter-weight metals and composite materials, said Larry Brown, executive director of LIFT. “There’s no other place in the country with this type of capability, looking at lightweight applied R&D on a fullscale basis,” Brown said. LIFT and IACMI share the building, with different types of machines spread across a shop floor that serve member companies from different industries and materials being tested and developed through both pre-competitive R&D and proprietary projects. “It’s really to prove out the technology so they have the validation of the technology and they have the requisite business case — now they can make the investments for a production facility,” said Ray Boeman, a composite materials professor at Michigan State University, which manages the IACMI scale-up portion of the facility.

A rendering shows an indoor soccer hub at the site of a former indoor ice rink where the Detroit Red Wings once practiced.

DETROIT CITY FOOTBALL CLUB

Detroit City FC converting rink into fieldhouse By Bill Shea bshea@crain.com

Detroit City FC can’t turn pro until the American soccer system sorts out a court battle, but it’s not spending its offseason idle. Instead, the semi-pro club is turning an indoor ice rink where the Detroit Red Wings once practiced into an indoor soccer hub, investing an undisclosed, privately financed sum to renovate the old City Sports Center indoor ice rink on Detroit’s near east side into a 75,000 square-foot youth and adult recreation soccer facility called the Detroit City Fieldhouse. It’s scheduled to open in Septem-

Need to know

JJTeam is converting the City Sports Center into an indoor soccer venue JJFieldhouse expected to open in September JJClub plans to seek a liquor license

ber. DCFC, which plays to 5,000-plus fans per match at Hamtramck’s Keyworth Stadium, is replacing the building’s two rinks with a pair of artificial turf soccer fields, one of which will retain the dasher boards from the hockey configuration.

In addition to turf to replace the ice, the team said it’s installing energy-efficient lighting and making cosmetic upgrades. It also said it intends to build a clubhouse for fans and parents to watch games. DCFC co-owner Todd Kropp said the team plans to seek a liquor license for the facility. “As part of the plans for the facility, a clubhouse will eventually be built between the two playing fields that will serve as a hub of activity for DCFC supporters, as well as a place for athletes and parents to grab a drink and meal. The eventual space will overlook both fields and offer a full bar and kitchen to serve visitors

and the region’s soccer enthusiasts looking to watch a match with friends,” the team said in a statement. Kropp said the team has signed a five-year lease with the building’s owner, Anthony Soave’s Detroit-based Soave Enterprises LLC, and the deal includes options for up to 15 years. The fieldhouse closed in 2014. Soave bought the former Renaissance Racquet Club at 3401 E. Lafayette St. near the Elmwood and Mt. Elliott cemeteries for $2 million in 1993 and converted it into an indoor ice rink. SEE FIELDHOUSE, PAGE 19

Q&A

Domino’s Pizza CEO Patrick Doyle on stepping down

Domino’s Pizza Inc. CEO and President Patrick Doyle SCOTT EELLS/BLOOMBERG

SEE LIFT, PAGE 18

Domino’s Pizza Inc. CEO and President Patrick Doyle is stepping down this summer, as the rebounding pizza chain works to advance its decade of sales growth and bake a hefty dollop of mobility into its business recipe. Ann Arbor-based Domino’s (NYSE: DPZ) announced Tuesday Doyle would end his eight-year term June 30. Domino’s International President Richard Allison will take over the role starting July 1, the company said in a news release. Doyle, 54, is also former chairman of the board of directors for Business Leaders for Michigan. He said he’s accomplished the three goals he set when he became CEO in 2010: becoming the No. 1 pizza company in the world, bettering return on investment for franchisees and putting

a leadership team in place. The pizza brand has rallied since Doyle and his predecessor, now-Toys R Us CEO David Brandon, worked with the company’s marketing and chef teams to create a new recipe and radically honest ad campaign — in which Doyle himself starred. The company also has boosted investments in digital ordering and other technology under Doyle. Crain’s reporter Annalise Frank spoke with Doyle Wednesday about Domino’s direction, what's next for him and what Michigan’s economy needs. You said you’ve accomplished your three big goals for Domino’s over the past eight years. What do you think were the biggest SEE DOYLE, PAGE 19

MUST READS OF THE WEEK We’re giving you a choice

Detroit-inspired paint

Ron Fournier: How to vote for your Newsmaker of the Year. Page 6

Motor City Paint seeks names for 25 new hues inspired by local venues. Page 22

Beer names reflect wide landscape of brews Axle Brewing Co.’s Very Stable Genius joins list of beer names inspired by everything from music to inside jokes. Page 5

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

Meta Financial acquires Troy-based Crestmark By Tom Henderson thenderson@crain.com

YOU MADE NEWS IN CRAIN’S

Share your success with custom Reprints, E-prints and more! Contact Laura Picariello at lpicariello@crain.com

A F e e - O n l y We a l t h M a n a g e m e n t G r o u p

Michigan’s #1 Financial Advisor* Charles C. Zhang CFP®, MBA, MSFS, ChFC, CLU Managing Partner

Charles has been ranked in the top 10 on Barron’s list of Top 100 Independent Financial Advisors for 2015, 2016, and 2017 and is currently the highest ranked fee-only NAPFA-Registered Financial Advisor on the list.**

We Uphold a Fiduciary Standard 101 West Big Beaver Road 14th Floor Troy, MI 48084 (248) 687-1258 or (888) 777-0126

www.zhangfinancial.com Assets under custody of LPL Financial and TD Ameritrade. *As reported in Barron’s March 4, 2017. Rankings based on assets under management, revenue generated for the advisors’ firms, quality of practices and other factors. **As reported in Barron’s August 22, 2015, August 27, 2016, and September 15, 2017. Based on assets under management, quality of practices, revenue that advisors generate for their firms, and other factors. For fee-only status see NAPFA.org. Minimum Investment Requirement: $500,000 in Michigan/$1,000,000 outside of Michigan.

“This is a win for everybody,” said W. David Tull, referring to the acquisition of Troy-based Crestmark Bancorp Inc. by Sioux Falls, S.D.-based Meta Financial Group Inc. (Nasdaq: CASH), a $320.6 million, all-stock deal announced last Tuesday that is expected to close in the second quarter. It was a win for Crestmark shareholders. Meta had assets of about $5.2 billion as of September, and Crestmark has assets of about $1.2 billion. Its shareholders will own about 25 percent of the combined company, though as of September, Crestmark has less than 19 percent of the combined assets. Crestmark will continue to operate in Troy as a division of Meta under that name. “They think the Crestmark name is a well-known brand nationally, and I agree with them,” said Tull, who in 1996 founded Crestmark as an asset-based lender for companies that can’t get traditional bank financing. It now also offers lines of credit, equipment leasing and equipment financing, with regional offices in six states across the country. Tull, the company’s chairman, said Crestmark may open other regional offices but that for now it is not a priority. It will be able to expand its geographical reach through Meta customers. “The deal makes a lot of sense,” said Scott Eisenberg, co-founder and managing partner of the Birmingham-based investment banking firm Amherst Partners LLC. “This gives Crestmark a cheaper cost of capital. If they can save 50 basis points, that drops straight to the bottom line.” He said the deal is good for Meta because of Crestmark’s reputation and reach in the asset-based lending market. “They’re aggressive in the marketplace, and they’re good at it,” he said. Eisenberg said the deal is part of an ongoing trend in finance for consolidation, reflected by a deal Amherst just brokered. He said he can’t name the company because the deal hasn’t been announced officially yet, but said it was a consumer-lending company in Illinois that Amherst represented in the sale to another consumer-lending firm owned by private equity. “The common theme is access to lower-cost capital,” he said. “Consolidation has been going on for a long time,” said Rajesh Kothari, managing director of the Southfield-based investment banking firm of Cascade Partners LLC. “It started before the recession, then took a pause and has ticked back up. There’s increased regulation and more compliance, and at bigger scales that’s easier to manage.

Need to know J

Meta has assets of about $5.2 billion

Crestmark has assets of about $1.2 billion J

J Dealexpected to close in second quarter

“This also gets Crestmark a much bigger and much cheaper pool of capital, and gives it scale to grow. Crestmark’s business model is focused on lending, and Meta’s wasn't, so this expands Meta’s business model and offers its customers a wider range of products,” said Kothari. “And the two companies have big gaps in their geographies, so this gives Crestmark an opportunity to be more of a national player.” Of Crestmark’s $1.2 billion in assets, about almost $1 billion are in loans. Of Meta’s $5.2 billion, just $1.3 billion are in loans. One direct local competitor agrees with Tull’s win-win assessment. “This allows Crestmark to partner with an institution with a large balance sheet and grow to a whole new level. It’s very exciting for them. It’s good to see Detroit-based asset lenders making news,” said Mike Semanco, president and COO of Rochester-based Hitachi Business Finance, which also does asset-based lending to companies without traditional bank lending. A day after the Crestmark deal was announced, Semanco’s company reported that it had a record year in 2017, providing $139 million in capital to companies across the U.S. That record buttresses the upside of finding a larger partner to help provide cheaper capital. Hitachi Business Finance was founded in Huntington Woods in 2002 by Frank Hennessey as Hennessey Capital LLC. In November 2012, it was bought by Connecticut-based Hitachi Capital America Corp., a division of Hitachi Capital Corp. of Japan., a deal Hennessey engineered to give it more access to cheaper capital. At the time, Hennessey was doing about $30 million a year in new lending. “Leveraging Hitachi’s capital has really escalated the last two or three years. The backing of Hitachi has opened more doors for us,” said Semanco, who said that with more capital, his company has opened a new line of business, joining in larger deals than it would have in the past by syndicating them with other lenders. Tull said the search for a buyer for Crestmark began last August when his investment bankers, New York-based Sandler O’Neill & Partners LP, did an analysis of banks around the country to see who would be a suitable partner. “We got it down to eight banks and

W. David Tull: Chairman of Crestmark.

Michael Goik: Crestmark’s COO and president.

then prepared a book on Crestmark and went out to see who had an interest,” said Tull. He said the marriage of Crestmark and Meta is one made in financial heaven. He confirmed that it provides Crestmark with extremely cheap capital and gives Meta a venue for making a higher return on investment than it has traditionally. Dickinson Wright PLLC was Crestmark’s legal counsel. “Both of these institutions have very unique franchises,” he said. “We’re a heavy asset-based lender at high rates, and their model creates very low-rate deposits faster than they can create assets by lending them out.” Meta is the largest provider of prepaid credit cards in the country. Meta pays no interest rates on the up-front money it charges for cards. Tull says it pays zero interest rate on 90 percent of its deposits, with a conservative investment strategy that generates an average yield of 2.5 percent. “We’ll be able to put their money out at 9 to 10 percent interest,” said Tull. Tull, 68, will be on the boards of both the holding company and MetaBank but will be retiring from day to day activities. “I’ll be able to give my two cents worth, but as for coming in every day, no,” he said. Michael (Mick) Goik, Crestmark’s president and COO, will become an executive vice president at MetaBank and president of its Crestmark division. “They very much wanted to keep him on,” said Tull. Goik was a member of the 2009 class of Crain’s 40 under 40. Under the terms of the acquisition, Crestmark shareholders will receive 2.65 shares of Meta common stock for each share of Crestmark common stock. Based on the closing price of Meta shares on Jan. 8 of $91.35, each share of Crestmark stock will be worth $242.08. Meta anticipates issuing approximately 3.3 million shares to Crestmark shareholders. MetaBank also has a traditional retail banking operation; an electronic payments division; and an insurance-premium financing division. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

Robertson Brothers to build 100 homes on Ferndale sites A Bloomfield Hills-based developer is giving new life to former school properties in Ferndale with plans to build 100 houses and townhouses on two sites. Robertson Brothers Co officially bought the sites, formerly home to Wilson University High School and the Taft Digital Learning Center, in September through a request for proposals process that started about three years ago, said James Clarke, the developer’s president

and co-owner, and Jordan Twardy, the city of Ferndale’s community and economic development director. Ferndale Public Schools sold the two properties for a total of about $1 million, Twardy said in an email. The 72-unit, $15 million Parkdale Townes townhouse development is bounded by Fielding Street, Allen Road, Garbutt Park and Gardendale Street just north of Eight Mile Road. At the Wilson school site, the 28-unit,

$10.5 million Wilson Park Village will be built about a mile northeast of Parkdale, on the other side of Woodward Avenue at Paxton and University streets. Alexander V. Bogaerts and Associates and Brian Neeper Architecture PC, both of Bloomfield Hills, handled architecture for the two projects. Craig Steinhaus & Associates of Birmingham decorated the house models. — Annalise Frank

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

THE FASTEST WAY TO THE MACKINAC POLICY CONFERENCE. Save time, eliminate the hassle and get there direct in under an hour. SHORT’S BREWING CO.

The name for the Short’s Brewing Co. beer Space Rock came about, founder and CEO Joe Short said, because the brew “is so good it’s like crack, it’s like rock,” and “then we have this infatuation with outer space.”

Axle Brewing Co.’s Very Stable Genius beer part of wide naming landscape By Annalise Frank

Need to know

afrank@crain.com

Naming a beer is like making a joke: There’s no proven methodology. Inspiration comes chiefly from the minds of the makers, their influences and their interplay as they go about their daily routines. Royal Oak-based Axle Brewing Co. went the political route last week, gaining some media mileage from plans to debut a limited-edition beer with a gimmicky name based on a tweet by President Donald Trump. The “Very Stable Genius” palestyle beer is a riff on Trump’s Saturday reaction to the publication of “Fire and Fury,” a controversial account of his presidency by Michael Wolff. In the tweet, Trump called himself a “genius .... and a very stable genius at that!” It’s one of a series of politically themed brews rolled out by the state’s many microbreweries and brewpubs. It’s part and parcel of a brewing landscape that has more than 5,300 breweries nationwide, meaning tens of thousands of beers a year need to be named. Short’s Brewing Co. founder and CEO Joe Short said he generally likes creativity to come from within the Bellaire brewery’s bubble, without influence from industry trends. But as brewing has ballooned in recent years, he said they’ve started “name checking now, because there’s a lot of, funnily enough, similar concepts out there. We’ll do a quick search. Sometimes we’re not alone.” These seemingly endless beer names come from music, movies, inside jokes, geographic regions, efforts to highlight specific ingredients and general wordplay — “There are only so many hops puns that are gonna make a consumer excited to pick the beer up,” Batch Brewing Co. Co-founder Stephen Roginson said. Some tell a story, like Batch’s Second to Last Word sour ale, which is inspired by the Last Word, a prohibition-era cocktail that originated at the Detroit Athletic Club. Names can also come from a desire to broadcast the brand’s image — like showcasing local ingredients — but others make less direct sense and come about organically through “verbal volleyball,” Roginson said. “The best beer-naming process is what happens when you’re sitting around with your buddies ... and you’re telling jokes to each other to

Axle Brewing Co. to debut limited-release Very Stable Genius beer 

Based on President Donald Trump tweet 

Stay in the know with Crain’s Email Newsletters

Subscribe for FREE by visiting crainsdetroit.com/crainsemails

 Part of a brewing landscape with tens of thousands of beers a year to be named

BATCH BREWING CO.

Names of Batch Brewing Co. beers include Dicksmasher in the Rye and Black Knight Satellite. Weird beer names are common in the industry, and they’re inspired by everything from music to daily routine and inside jokes.

crack each other up,” he said. The name for the Short’s Brewing Co. beer Space Rock came about, Short said, because the brew “is so good it’s like crack, it’s like rock,” and “then we have this infatuation with outer space.” Short also gave a recent example of how he keeps his ear open for names: “I just got a Gchat (message) from one of my brewers, (Tony Hansen), who must have been cruising around online and found this picture of Chuck Norris advertising ‘Action Pants,’” he said. “And I was like, yeah, that would be fun.” Action Pants beer doesn’t exist yet, but maybe someday.

The political side Axle Brewing has huge expectations for its Very Stable Genius beer, which will be available for a limited time starting in February in Axle’s Livernois Tap taproom and restaurant, which opened in June in Ferndale.

“It’s definitely gonna be, you know, huge and, like, really delicious and very powerful, but also limited and fragile and delicate,” Axle Brewing President Dan Riley said of the new brew. “Do you want me to stay in character?” he asked. All joking aside, Riley said he isn’t sure how the beer will do. But there’s little risk for Axle, whose scale means it can try out new brews in small batches to experiment and judge customers’ tastes. The company may also donate some of the sales from Very Stable Genius to a charitable organization, he said. This isn’t the brewery’s first beer with a political reference in its name, either. The “14th Amendment” is a popular Kölsch-style beer named after the change to the constitution that promised all citizens equal protection under the law, and “AlternaFacts” was a black India pale ale that had a limited run. And Axle Brewing isn’t the only microbrewery referencing politicians with its beer brewed in Michigan. The Lansing Brewing Co. opened its doors just over two years ago with a crowd-pleasing beer that reflected the capital city’s bombastic mayor, Virg Bernero, called “Angry Mayor IPA.” On Tuesday, the Lansing brewery owned by real estate developer Pat Gillespie unveiled a new cream ale called “Schor Style” in honor of the city’s new mayor, Andy Schor. The Grand Rapids Brewing Co. appears to have been one of the first brewers in the state to name a beer after a politician. For at least five years, the brewery has had a beer on tap called the Rosalynn Bliss Blonde, named after the mayor of what’s sometimes called “Beer City USA” when she was still a city commissioner. — Crain's Senior Reporter Chad Livengood contributed to this report.

Progress. At the heart of West Michigan’s economic development, Lakers are a vital force. Throughout the region and state, Lakers live, work, and lead, helping create solutions that drive growth forward. As a major university, Grand Valley’s economic impact is substantial. As a talent resource, Lakers are uniquely prepared to meet the challenges of a changing world. That’s the Laker Effect.

gvsu.edu

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

OPINION COMMENTARY

How to vote for your Newsmaker of the Year

our opinion matters as much to me as ours. So, who do you think should be the 2017 Newsmaker of the Year? Making our annual selection didn’t come easy to the Crain’s team. Managing Editor Mike Lee started the process by requesting nominees from the reporting and editing staffs, with each list ranked in order of preference. Mike then came to a newsroom meeting with a spreadsheet listing the nominees: three dozen or so names in the news from various walks of life in metro Detroit. CEOs. Philanthropists. Technologists. Sports figures. Educators. Manufacturers. Politicians. Developers. Then we debated the list, knowing we had to winnow it to 10. Who made the most news in 2017? Who had the greatest impact? Do bad actions that make news qualify for the list? Do we generously interpret the term “newsmaker” to include people who didn’t generate an inordinate amount of headlines but are otherwise deserving of recognition? Working with Crain’s corporate leadership, this is the list we revealed in last week’s issue: J Mayor Mike Duggan, who won re-election in a landslide and has insisted on public-private cooperation in Detroit’s long climb back to health. J Martha Firestone Ford, the

RON FOURNIER Publisher and Editor

92-year-old owner of the Detroit Lions credited with breathing life back into the mediocre franchise. J Dan Gilbert, the billionaire founder and chairman of Quicken Loans Inc. and Rock Ventures LLC who has his finger in almost every downtown pot. J Vinnie Johnson, majority owner and chairman of Piston Group, which closed on the $175 million acquisition of a Takata Corp. unit. J Wright Lassiter III, president and CEO of Henry Ford Health System who oversaw groundbreaking on a major outpatient cancer center and won the right to be the Pistons’ official medical provider and medical manager of a 175,000-squarefoot sports performance center. J Rip Rapson and La June Montgomery Tabron, who overcame institutional rivalries to commit $50 million toward tackling one of the greatest challenges to Detroit’s future: improving early child education. Rapson runs the Kresge Foundation, Tabron runs the Kellogg Foundation.

J Matt Simoncini, who announced his retirement as Lear Corp. president and CEO after 11 years in the Southfield auto supplier’s C-suite, a turnaround artist and charismatic champion of Detroit. His second act is eagerly awaited. J Dug Song, CEO of Duo Security Inc., who grew his cybersecurity firm’s customer base from 8,000 to more than 10,000 in 100 countries and raised a venture capital round of $70 million, the largest ever Michigan. J Art Van Elslander, the founder of Art Van Furniture who sold his Warren-based company and launched a new firm to make targeted investment and acquisitions. He donated $20 million to the Solanus Casey Center. J Deirdre Waterman, the mayor of Pontiac who has led the city out from under the thumb of an emergency manager system to lure prominent companies to the Oakland County seat. While we didn’t set out to do so, we had created a list that reflects one of the themes driving progress in recent years: the willingness of powerful men and women to set aside ego and work together. Gilbert and Duggan are teammates on the Amazon bid. Rapson and Tabron joined forces to improve schools. Each person on the list is a selfless force for change. After settling on our top 10, Crain’s named Simoncini its top

Duggan

Ford

Gilbert

Johnson

Lassiter

Rapson

Montgomery Tabron

Song

Van Elslander

Waterman

Simoncini

newsmaker of 2017 and invited him to speak Feb. 8 at the annual Newsmaker of the Year luncheon title-sponsored by Deloitte, one of the biggest events and biggest honors in the Detroit business community. So what do you think? Was that the right pick? Would you choose somebody else? Again, our choice is no more important to me than yours: For the first time, Crain’s is conducting a “Read-

ers’ Choice” poll. To vote, visit crainsdetroit.com/readerschoice. We’re keeping the winner secret until the luncheon at Motor City Casino, when we’ll reveal and honor the readers’ choice. Who’s it going to be? Ron Fournier is publisher and editor of Crain’s Detroit Business. Vote for your choice for Newsmaker of the Year at crainsdetroit.com/ readerschoice.

We are testing the system

long with what seems to be everyone else in the nation, I am suffering from either a mild flu or a nasty cold. So far, the major beneficiary of my malady has been my local drugstore, where I have been relying on the pharmacist to advise me on which secret remedies might make this illness go away or at least be minimized so I can function. It is of little solace to know that millions of other Americans will wind up suffering from the same illness. It is so bad, I understand, that in certain parts of the country, people are being sent away by hospitals unable to cope with the sheer volume of sick patients. This is not the best way to test our health care delivery system, but it seems from reports that we have too many sick people for the facilities available. Not enough beds, doctors, nurses and facilities to take care of citizens who have contracted this virus. Like all good folks, I was diligent in getting my flu shot. Actually, I was told that I get two shots covering many potential strains of this virus. But they can’t protect against every possible strain. Once we have gotten our annual shot, it is said that even if we do get sick, it will be a much milder version

KEITH CRAIN Editor-in-chief

of the flu. I confess that I’ve never figured out quite how to ascertain that. I guess that is a bit of information you accept on faith. But if any hospital wants a real-world test of its capacities, it seems we have one. In spite of all efforts otherwise, I am sure we all overuse emergency rooms. Regardless of whether we have insurance, when we get sick, really sick, we head for the emergency room, not the doctor’s office. My guess is nothing will change that. I don’t have the slightest idea of how much money this is costing. For all the lost money and productivity at businesses, we are certainly seeing a spike in hospital income, but hardly enough to offset one another. It would be nice if we could test the system without millions of people getting the flu, but it seems to happen every year.

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

Michigan’s prevailing wage law hinders job growth

here’s little doubt that Michigan’s economy is back on solid footing — but that doesn’t mean there isn’t more work to do to continue bringing jobs to the state. We need to keep rethinking outdated practices that are hindering job growth. An effort is gaining momentum to take a huge, positive step in that direction by eliminating Michigan’s outdated and expensive prevailing wage law. In place for half a century, the law inflates the price tag on taxpayer-funded building projects — think school buildings, sewers and township halls — by forcing construction companies to pay artificially high wage rates based on union agreements, rather than what the free market dictates. Not only does it hinder job growth and create inefficient use of taxpayer dollars, but the name of the law itself is misleading. With more than 80 percent of the construction workforce choosing not to belong to a union,

TALK ON THE WEB Re: Duggan on regional transit, car insurance 'scams' Glad to hear they are working on something regarding transit by November. I believe November is several years too late but at least something that stands a chance within this year would be helpful. E M Parmelee

Re: Michigan moves to boost personal state tax exemption I am not a “lower taxes at all costs” type of guy. But the idea that we are still in the business of paying pensions and most of the health care costs for state and municipal employees is mind boggling. Take a look at the average working American and you will see that they are responsible for their retirement (via a 401k and other investment options) and they pay a decent percentage of their health care premiums. This is necessary for business solvency. Pay teachers, administrators and other state and municipal employees more up front and then have them handle their own retirement planning.. Jake Wood Showboating. An extra $200 exemption (not credit) at 4.25 percent is less than $10 a year to an individual, spend the money on statewide infrastructure improvements. The same goes for the tax cut, the saving is so small to the average individual that it's better spent on fixing the state. MarkYTH Fix roads and our aging sewer infrastructure? Address pension shortfalls? Hire back more police and firefighters (we have two of the most dangerous cities in the nation, the FBI says, in Michigan). Support college kids? Provide more money to hire substitute teachers? NOPE....cut taxes. No wonder we are a poor state today...and apparently, for the future. Michigan guy

OTHER VOICES Rob Fowler

there is nothing “prevailing” about the wages the government requires private employers to pay workers under the law. That’s right — Michigan’s prevailing wage law allows labor unions to

dictate wages and fringe benefits, although they represent less than 20 percent of the workforce. Worse yet, the public and our elected representatives are not allowed a seat at the bargaining table. The unrealistically steep construction wage rates mandated by the law are often double or more the national average. The average free-market construction wage is already a healthy $23 per hour or more, according to the U.S. Department of Labor. Prevailing wage typically inflates wages up 60 percent or more for most construction trades. Despite already paying higher wages than most industries in Michigan,

construction is the only sector subjected to prevailing wage rules and the only industry in which wages are arbitrarily set by an elite group and imposed on the rest of the industry. There’s no logical reason for the construction industry to be treated differently from every other industry and denied a competitive ability that every other small business enjoys — paying competitive wages. The current law has a chilling effect on job creation. Artificially imposed higher wages mean contractors hire fewer workers. When Michigan’s prevailing wage law was suspended for 30 months — from December 1994 to June 1997 — following a federal dis-

trict court ruling, approximately 11,000 more construction jobs were created. (Source: U.S. Department of Labor) Permanent repeal of the law is long overdue. Michigan taxpayers are standing up for free-market principles as signers of petitions this year asking for fiscal responsibility in government spending and another boost for our state’s economic resurgence. Rob Fowler is president and CEO of the Small Business Association of Michigan. SBAM represents over 26,000 small businesses throughout Michigan, including many in the construction industry.

Mike Duggan Mayor City of Detroit

Art Van Elslander

Founder Van Elslander Capital LLC

IT’S TIME

Martha Ford

YOU CALL

Owner Detroit Lions

Dan Gilbert

THE SHOTS.

Founder & Chairman Quicken Loans / Rock Ventures

Vinnie Johnson

Founder, Chairman & CEO Piston Group

VOTE FOR THE

READERS’ CHOICE

Wright Lassiter III

President & CEO Henry Ford Health System

NEWSMAKER OF THE YEAR!

✓Visit crainsdetroit.com/readerschoice

Rip Rapson

President & CEO The Kresge Foundation AND

La June Montgomery Tabron

We picked our Newsmaker of the Year, now it’s time for you to choose yours.

President & CEO, W.K. Kellogg Foundation

Why? Because we value your opinion, and because we want you to be part of our news-making process. This is your chance to make your voice heard (and to tell us if you don’t agree with our pick!).

Matt Simoncini CEO Lear Corp.

HURRY!

Dug Song

Co-Founder & CEO Duo Security

Voting closes at midnight on Jan. 19.

Deirdre Waterman

Find out if your pick takes home the honor as Readers’ Choice Newsmaker of the Year by attending the annual Newsmaker luncheon.

THURSDAY, FEB. 8, 2018 | 11 A.M. – 1 P.M. MOTORCITY CASINO HOTEL, DETROIT Register at crainsdetroit.com/events.

Mayor City of Pontiac

Submit a write-in candidate

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

FOCUS

CRAIN’S MICHIGAN BUSINESS: JACKSON

IN THIS PACKAGE

Storied engineering firm continues to make history, this page 



Peak performance, Page 9

Nonprofit agency helps businesses grow, Page 10 

Local Logic helps small business thrive on the web, Page 10 

Entrepreneurial plunge pays off for former Pfizer employees, Page 12 

GETTY IMAGES/ISTOCKPHOTO

Storied engineering firm continues to make history By Tom Henderson thenderson@crain.com

One of the oldest businesses in Jackson County, the engineering firm Commonwealth Associates Inc., is about to add another chapter to its storied history. The company will build a new headquarters to house its 215 local employees and has chosen the revived downtown in the city of Jackson as the place it wants to be. The company provides consulting, design services and project management for high-voltage power generation and distribution projects around the U.S., with offices in Seattle and Spokane, Wash.; Columbus, Ohio; Atlanta; and Lancaster, Pa., which it opened last February to support a large contract with Pennsylvania Power & Light. Richard Collins, who replaced Dennis DeCosta as president and CEO in July, soon after the $26-million, 90,000-square-foot building was announced, says the company has hired an architect and hopes to break ground in 2019 in a neighborhood just north of the main street of Michigan Avenue, on the same block as a new, upscale four-story apartment building called Lofts on Louis. “We’re lining up financing and tax abatements,” said Collins. Previously, Collins was in the

Need to know

Commonwealth Associates Inc. building new headquarters in downtown Jackson 

 $26M HQ development will bring 215 employees under one roof  Company founded in 1888 has rich history, including a president who ran for president

firm’s power-generation group. The move will be a return to Commonwealth’s downtown roots. In 1998, it moved into its current headquarters in Blackman Township, west of the city of Jackson near the Jackson County Airport, buying an office building from Eaton Corp. Commonwealth has outgrown that building, renting space in a building next to its headquarters and in downtown Jackson at the site of its original headquarters. “We prefer to be under one roof,” said Collins.

A rich history The first chapter of the company’s story began in 1886, when two Jackson brothers named W.A. and J.B. Foote experimented with an arc light generator at a mill in Adrian, seven years after Thomas Edison filed a pat-

TOM HENDERSON/CRAIN’S DETROIT BUSINESS

Richard Collins became president and CEO of Commonwealth in July.

ent for the light bulb. The experiment turned into a for-profit business in 1888 when the brothers founded the Jackson Electric Light Works Inc., which became a pioneer in hydroelectric power generation. In 1897, the company built a 1.5 megawatt generator and 22-kilovolt transmission line at the new Trowbridge Dam in Kalamazoo, then one

of the largest power generators in the world. In 1908, it designed and built a 110-kilovolt transmission line at the new Croton Dam on the Muskegon River, an engineering marvel that drew engineers from Russia, France, England, Japan, Italy and elsewhere to see how it was done. In 1910, the business was rechristened as the Commonwealth Power

Railway and Light Co. Following a series of public utility consolidations in the Midwest and South, involving among others Commonwealth, Alabama Power, Georgia Power, Gulf Power and Mississippi Power, a billion-dollar holding company, The Commonwealth & Southern Corp. was established with headquarters in New York. It was the nation’s largest utility holding company, controlling 165 utility companies in 10 states, from Michigan to Florida. In 1929, Commonwealth & Southern appointed a young lawyer, Wendell Willkie, as corporation counsel. Willkie quickly climbed the ranks to become the president of C&S in 1933. Worried about the monopolistic power of C&S and other large regional utility companies, President Franklin Roosevelt pushed for the Public Utility Holding Company Act of 1935, which led to the breakup of Commonwealth & Southern, creating two Jackson-based companies, Commonwealth Associates and Consumers Power. Willkie then became the most visible critic of Roosevelt’s New Deal legislation, enabling him to win the Republican nomination in the 1940 presidential race. SEE HISTORY, PAGE 12

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

CRAIN’S MICHIGAN BUSINESS: JACKSON

Peak performance Young college grad works her way up to plant manager By Tom Henderson thenderson@crain.com

There was nothing at their first meeting that suggested to Chris Salow that Amanda Hutchings would one day run his Peak Manufacturing Corp. and take it to record revenue. It was 2007 and she was applying for a job as marketing manager at his Shop Rat Foundation, a Jackson area-based nonprofit that teaches area high school kids how to operate factory machinery and prepare for skilled, well-paying jobs upon graduation. She was 22, and although she had graduated from Baker College with a degree in business administration with honors, she was so nervous about the interview that she had broken out in hives. She was youthful and a self-described “girly-girl” — though she says there is a Jeep-owning, off-road-vehicle-riding tomboy under the surface — and Salow’s first impression was not of an assertive and confident leader with the potential to run an operation making components for wheel assemblies for heavy-duty trucks, supervising veteran shopfloor workers who were old enough to be her father. But something about Hutchings impressed him. She got the job. “The first month or two of working for me, she told me that at her previous job she’d been told to lie to customers and that she couldn’t do it. She said she wanted out of there as fast as possible, that being honest was paramount to her,” said Salow. “That was the first indicator I had that she was trustworthy.” Shop Rat shared space with Peak in a large manufacturing plant in Pleasant Lake, a community in Jackson County, just north of the famous state prison, and Salow had her answer phones at Peak as needed. It was a foot in the door for her. She was promoted to manage the small front office, then to her surprise was asked to be plant manager when the previous manager quit. The key promotion came when Salow put her in charge of Peak’s quality control and accreditations, even though she had no experience in what is a crucial position for companies looking to win contracts from other manufacturers. “She didn’t have any background in quality control but she took us through our annual audits with no problems whatsoever. She would nail them year after year, which was unheard of. That proved it to me that she could run the company,” said Salow, who has just returned from Malawi, where he has set up another nonprofit, EcoAfrica, a Christian-based charity providing a range of services to Malawians. “Because of Amanda and her work at Peak, I’m able to do this,” said Salow of his work in Africa. Salow has owned a variety of manufacturing businesses over the last 35 years. He incorporated Peak in 2007, splitting it off from another company he co-owned, Belleville-based SMW Manufacturing Inc., and turned over

Need to know

 Woman-led manufacturing company makes components for heavy truck wheel assemblies  Peak Manufacturing making dramatic inroads in Chinese market  Sales up 60 percent since Amanda Hutchings took the helm

management of Peak to Hutchings in December 2013, when she was only 28. His father had just died and his mother had dementia, and he decided he needed to be her full-time caregiver. “He told me, ‘You’re going to run the company. I’m going home,’” said Hutchings. “Chris had an unreasonable amount of faith and trust in me,” she said. “He just said, ‘You can do it.’ It strengthened our team because it forced people to learn how to do things. Before it was always, ‘Chris can do it.’” Salow said Hutchings has taken on the role with ease. “It’s been amazing to see her become so assertive. She’s that rare combination of a strong leader who does things in a loving, caring way,” said Salow. “The great thing about Amanda is she has no pretense, no phoniness. She loves people.” Peak uses old 1950s-era Brown & Sharpe tooling machines, but Salow brought them into the modern age by figuring out a way to fit them with modern automation equipment. Salow says doing so gave Peak a big advantage over more modern CNC (computer numerical control) machining equipment. He said the Brown & Sharpe machines have more horsepower than their modern brethren and can do their cutting and grinding without being liquid cooled. Salow said that while liquid cooling extends tool life, it both slows the cutting and grinding processes and causes shock to the steel being machined, leading to higher rates of substandard parts. Hutchings says the increased speed and quality of her machines gives Peak a big cost advantage over competitors using new equipment, and that cost advantage has driven its dramatic inroads into China and the burgeoning heavy-truck market there. Sales are up 60 percent since she took the helm, with projections this year, thanks to the exploding Chinese market, of an increase of 80 percent to what she describes as “the high teens” of millions. In the last five years, she said the Chinese market has grown to about 50 percent of Peak’s business. She said domestic revenue should be up about 10 percent this year. On a recent visit by a reporter, Peak was doing a run for MNP Corp. of Utica, cutting a single groove into small lengths of steel. It is cheaper for MNP, an auto supplier, to hire Peak and pay for shipping than to mill the parts itself. Employment has risen from 20 people to 46 since Hutchings took over, with another handful expected to be hired this year. She said 95 percent of Peak’s revenue comes from making what are called bearing spacers, strong steel cylinders that sit between bearings in wheel assemblies. And the bulk of that 95 percent comes from a single customer, Consolidated Metco Inc.

TOM HENDERSON/CRAIN’S DETROIT BUSINESS

Amanda Hutchings is plant manager at Peak Manufacturing.

of Vancouver, Wash., which has several U.S. plants, including one locally in Canton Township, as well as plants in Mexico and China. Does such a reliance on one customer cause Hutchings distress? Yes. “Absolutely,” said Hutchings. And no: “We have a great relationship. We helped them develop that business. We have 10-year contracts with them, which is unheard of.

We’re committed to them and will grow with them.” Hutchings runs another business on the side, a photography business from her home, shooting children and newborn babies. But it is another photo she is most proud of, and it’s posted on her Facebook page. It’s of her and her fellow female employees at Peak holding a sign that reads: “We are proud to be

women in manufacturing.” About a fifth of Peak’s employees are women, and the company pays for their membership in Women in Manufacturing, an organization based in Independence, Ohio, that provides education, networking and mentoring. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

WHERE WILL YOUR

TRUE NORTH LEAD YOU?

Northwood prepares future leaders through business-focused bachelor’s and master’s degree programs. Real-world scenarios and hands-on experiences position students for dynamic networking opportunities and successful careers. Where will your TRUE NORTH lead you? Start by visiting our booth (UA03) at the NAIAS.

northwood.edu • 800.622.9000

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

CRAIN’S MICHIGAN BUSINESS: JACKSON

Nonprofit agency helps businesses grow Need to know

By Tom Henderson

The Enterprise Group helps businesses navigate land assembly, permitting, zoning and brownfield redevelopment

thenderson@crain.com

The Enterprise Group of Jackson Inc. is a nonprofit agency founded in 1997 that focuses on job retention and attraction for all the municipalities in Jackson County, coordinating land assembly, permitting and zoning and helping companies navigate the complicated federal and state rules for brownfield redevelopment and grants. According to Debbie Kelly, director of marketing, the agency has been directly responsible for the creation of 916 new jobs since 2016, including 213 involving brownfield sites brought back on the tax rolls. Projects creating those jobs have resulted in $155.6 million in investment, including $49.5 million in brownfield projects. Tim Rogers, the Enterprise Group’s president and CEO, said his agency’s mission includes both large projects and small, and points, for example, to work it has done on behalf of Commonwealth Associates Inc., an engineering firm with 280 U.S. employees and 215 in Jackson (see related story, Page 8), and J.D. Auto Service and Repair LLC, a new shop in the city of Jackson with three employees. The Enterprise Group helped Commonwealth choose a site downtown for its new $26 million, 90,000-squarefoot headquarters, which is still in the design stage, with groundbreaking planned for 2019. Currently, it is based west of the city of Jackson in Blackman Township, near the Jackson County Airport. And the agency guided J.D. Auto through the complicated process of getting permits and a $47,000 grant from the U.S. Environmental Protection Agency to clean up a brownfield site and remove underground storage tanks at a long-closed former Standard Oil gas station that most recently was a



 Agency has helped created 916 new jobs and $155.6M in investment since 2016  Group helped immigrant entrepreneur remediate former gas station site and open an auto repair shop

TOM HENDERSON/CRAIN’S DETROIT BUSINESS

Jose Duran, owner of J.D. Auto, was guided by the Enterprise Group in opening his business.

tire store. “It can take just as much work to help a small company as a large one. You have the same hoops to go through, but we’re happy to do it. Small businesses are important for a healthy community,” said Rogers. His agency’s work on behalf of J.D. Auto had an unintended benefit. Site preparation at its location on the southwest corner of S. West Avenue and Jackson Street included extensive remodeling of the old gas station and removal of two underground gas-storage tanks. Seeing work being done on that corner, the owner of a property on the northwest corner began marketing his lot. Today, a nearly finished Happy’s Pizza is about ready to open there. Rogers said a bonus to eventually seeing two new businesses generate jobs and tax revenue was helping J.D.’s owner, Jose Duran, achieve his American dream.

Duran came to the U.S. from Mexico 18 years ago and lived briefly in Texas. At the urging of compatriots who had moved to Michigan, he moved to Jackson. There were, his friends had told him, lots of high-paying manufacturing jobs there — jobs that, as it turned out, were quickly disappearing. “I got here, but there were no jobs,” said Duran. He took a succession of jobs at farms and restaurants and then, thanks to training back in Mexico, started working in auto repair shops. “All my life, it’s my dream to have my own business,” he told Crain’s. Two years ago, he heard about the former Standard Oil and then Amoco station. The building and lot were owned by Richard Neuenfeldt, and Duran approached him about possibly renting the building and eventually buying it. Neuenfeldt’s point person, Stephen

Artz, assumed there would be environmental hurdles to jump and turned to the Enterprise Group for help. Its staff arranged an environmental assessment, then guided Neuenfeldt and Duran through all the hoops and site remediation required by the EPA and the state’s Department of Environmental Quality. “The Enterprise Group was a tremendous help. We got an estimate of north of $40,000 to clean up the site and we couldn’t afford that. We were just going to let the project go,” said Artz. The EPA grant of $47,000 kept Duran’s dream alive. With the cleanup and permitting process underway, Duran signed a land contact in September 2015 and on Sept. 23 of this year, he opened his doors following a $200,000 remodeling. “We’ve been busy. It’s a good location,” said Duran. If he stays busy, Duran says he hopes to add another shop or two. “I have more dreams. I want to grow this business. I want to provide good service for customers at a good price,” he said. “He was so happy when he opened,” said Kelly. “He put all his savings into it, and now it’s thriving and the parking lot is filled.” Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

Tim Rogers, he Enterprise Group’s president and CEO, and Debbie Kelly, director of marketing. TOM HENDERSON/ CRAIN’S DETROIT BUSINESS

Local Logic helps small businesses thrive on the web Need to know

Tom Henderson

 Local Logic builds websites and manages email marketing, loyalty programs for business customers

thenderson@crain.com

In 2012, Local Logic Media LLC, which builds websites and manages social media, email programs and loyalty programs for its customers, became the first tenant of the Jackson SmartZone incubator at the Baker College Business Technology Center. Company founder Ken Seneff proved to be an apt first tenant, showing how the incubator model could help get startup companies off the ground by providing free office space and support services while they build up a client base, generate revenue and fine-tune their business model. Just a year later, Local Logic moved out of the incubator and into space in downtown Jackson. In 2013, Seneff created a software product called Restaurant Logic for the restaurant industry. In February 2016, he spun it out as a separate company, Restaurant Logic LLC, and in May 2017, he opened an office in Southfield for Restaurant Logic to target the growing Detroit-area market. Today, Seneff employs 16. Restaurant Logic generates the bulk of the revenue, about $700,000 in 2017, with projections of $1.5 million this year. Not bad for a failed pharmacist.

 Spin off Restaurant Logic will do $1.5 million in revenue in 2018  Jackson-based company was the first tenant of the Jackson SmartZone incubator

LOCAL LOGIC MEDIA LLC

Local Logic Media LLC builds websites and manages social media, email programs and loyalty programs for its customers.

Seneff graduated with a degree in pharmacy from Idaho State in 2005. “I started working in the field and hated it,” he said. He was living in his home state of Utah at the time. “My wife hated Utah,” he said. She was from Michigan and in 2006, they moved to Lansing, just as the first signs of the Great Recession were appearing and jobs in the state were disappearing. “It was the worst time to move to Michigan. All my friends and family were (asking) ‘What are you doing?’” said Seneff. Soon after moving to Michigan, Seneff took his car into Capitol Cadillac in Lansing for service, got to talking to the dealership manager and was offered a job as a new-car salesman. “The internet was just starting to disrupt the way auto dealers did business. I thought that was intriguing and started learning ev-

Ken tena incu

selle tion In to h Jack sell sup skyr “we qua B fact line max In as a his ness was Gro econ ing like new “I som

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

lly,

ON/ ESS

rst

e in 005. and n his

She hey first apwere

e to mily ng?’”

gan, adilt to ager -car just ealwas ev-

erything I could about internet marketing,” said Seneff. Soon he was managing the dealership’s web business. “We sold a ton of cars on the web,” he Ken Seneff: First said. “At one tenant of new point we were incubator. the No. 2 online seller for Cadillac dealerships nationwide.” In 2010, a family friend asked him to help him create a web portal for a Jackson company named Firemax to sell large outdoor wood burners that supply heat to houses. It was a time of skyrocketing propane prices, and “we sold $2 million worth in the first quarter,” said Seneff. But propane prices fell, the manufacturer of the burners missed deadlines for delivering product to Firemax’s customers and sales collapsed. In 2012, Seneff formed Local Logic as a consulting firm, working out of his house to help Jackson-area businesses develop websites. Soon, he was approached by The Enterprise Group of Jackson Inc., a nonprofit economic development agency serving Jackson County, and asked if he’d like to become the first tenant of a new incubator. “I told them, ‘Heck, yes, we’ll take some incubator space.’ We had four

people in a tiny space there, but it allowed us to take on more projects and grow the client base,” he said. Some of his early customers were area restaurants, including his first, Jackson-based Klavon’s Pizzeria and Pub. In 2015, Seneff raised a funding round of $500,000. A few months after that he formed Restaurant Logic and a third Jackson-based company, Codify LLC, a software development company. “Ken has been a great resource throughout the years for idea generation and innovativeness that helps make our restaurants more efficient. The ability to send email blasts to our 18,000 fans, send gift cards to customers and redeem coupon promotions using the online dashboard has been a huge asset to us over the years,” said Andrea LeFever, Klavon’s director of operations. “Ken himself has been there for us whenever we have needed it, even if it is after hours or on the weekends. He is a problem-solver and a great person to collaborate with.”

“It was the worst time to move to Michigan. All my friends and family were (asking) ‘What are you doing?’” Ken Seneff

Seneff eventually wants to open offices in Chicago, Milwaukee, Indianapolis and Cleveland. He said Restaurant Logic has 200 customers, about 20 in Detroit and 20 in Chicago. The company is an endorsed partner of the Detroit Restaurant Association and the Michigan Restaurant Association. Joe Mackle, the owner of Mackle’s Table and Tap, a 120-seat pub and restaurant in Hartland in Livingston County, has been a happy Restaurant Logic customer since he opened the business a year and a half ago, having heard about Seneff from his Gordon Food Service provider. Restaurant Logic designed his website and manages his web marketing and loyalty program. “Ken’s got a great platform, and he’s got good people working for him. He grew my loyalty program to 1,500 people in a year and a half,” said Mackle. “What I like is customers can sign up online, and I can track which emails work and which don’t. My last offer went out to 3,300 customers and 1,600 of them opened the email. The offer before that had an open rate of 64 percent, and that’s huge. “It’s all very user friendly, which is important for a guy like me who is an owner/operator who doesn’t have a lot of time.” Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

CONNECTION TO

COM M U N IT Y We travel your roads and live on your streets so we know well what is important to your community. Local knowledge and personal understanding – it’s all connected.

FISHBECK , THOMPSON, CARR & HUBER engineers | scientists | architects | constructors

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

CRAIN’S MICHIGAN BUSINESS: JACKSON

Entrepreneurial plunge pays off for former Pfizer employees By Tom Henderson thenderson@crain.com

Dan and Samantha Ross had just built a 4,000-square-foot log cabin for themselves in Jackson County when their employer, the drug giant Pfizer Inc., announced it was closing its sprawling campus in Ann Arbor. They could have taken another position with Pfizer in Connecticut, but they had no intention of leaving. “I knew what I wasn’t going to do, and that was move,” said Dan Ross. So the couple took an entrepreneurial plunge. Together, they founded TransPharm Preclinical Solutions LLC, a fast-growing biotech company based in Napoleon Township, a small community in southern Jackson County. Dan is TransPharm’s president and CEO. Samantha, better known as Sam, is COO, in charge of accounting, payroll and human services at the 11-employee company. He was an infectious disease scientist at Pfizer, and she was an executive assistant for a veterinarian pathologist. TransPharm does clinical testing for pharmaceutical companies on proposed new drugs. It infects white mice or rats with fungi, bacteria or parasites as the trial calls for, then tests for efficacy. How well do the infected animals respond to the drugs? (One interesting note: A special strain of mice that can’t fight infection cost TransPharm $538 each.) The testing is done at an 8,000-square-foot laboratory and headquarters called the Terry Wellhoff Center, in honor of the person they bought it from. As part of its departure from Ann Arbor, Pfizer donated equipment to employees who wanted to start their own contract research organizations, but the offer was contingent on having a place to ship equipment to. Wellhoff owned a company that made concrete building materials. Dan Ross asked him if could have Pfizer materials shipped there and got a quick OK. “I tried to give him a check. He said, ‘Don’t worry about it.’” Dan’s last day at Pfizer was July 18, 2007. Wellhoff died of testicular cancer on Aug. 25. The Rosses formally leased the building in September and bought it in 2010 in deals agreed

HISTORY FROM PAGE 8

Commonwealth nearly went out of business in 1988. In 1973 it had been bought by Pennsylvania-based Gilbert Associates Inc. and rechristened Gilbert/Commonwealth. Fifteen 15 years later, Gilbert decided to close its Jackson operations. Instead of taking up the offer to transfer to Pennsylvania, employees in Jackson formed a new company, reviving the Commonwealth Associates Inc. brand. “Twenty founders kicked in $10,000 to start the company,” said Collins. His predecessor, DeCosta, was one of them. The company remains employee-owned today. Customers include the Argonne National Lab in Lemont, Ill.; Chicago-based MillerCoors; Calgary, Alberta-based TransCanada Corp.; the University of Michigan and Char-

TRANSPHARM PRECLINICAL SOLUTIONS LLC

Dan and Samantha Ross, founders of TransPharm, with their finalist award from Ernst and Young.

TOM HENDERSON/CRAIN’S DETROIT BUSINESS

Transpharm plans a $10 million renovation of a former Ford Motor Co. factory on the National Register of Historic Places in the village of Brooklyn.

to by Wellhoff before his death. “He had an emotional reason to sell the building to us,” said Ross. Ross used his severance pay from Pfizer of a year’s salary and got a state loan of $300,000 from Michigan’s Pfizer Asset Retention program to launch TransPharm. Ross credits the Enterprise Group of Jackson Inc., a nonprofit economic development agency serving Jackson County, with lotte, N.C.-based Duke Energy. Collins said Commonwealth’s marketing plan calls for the company to open a brick and mortar operation in Canada by 2020. Shorter term, the plan is to grow revenue in 2018 by 14 percent to about $45 million. He said the company is working with UM to plan business strategies for the rapidly evolving energy sector, and Commonwealth recently bought a drone for use in grid infrastructure inspection and has been using it at a solar farm that went on line in Watervliet in November 2016, owned by Indiana Michigan Power, an operating unit of American Electric Power. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2 COMMONWEATLH ASSOCIATES

An artist rendering (right) of the new headquarters of Commonwealth Associates Inc. in downtown Jackson.

being crucial to securing the loan. TransPharm opened its doors on Jan. 2, 2008. Then it had to build up a customer base. “We had some scary moments getting this off the ground,” said Ross. In the early days, it was a two-person company. Sam quickly learned how to do the full range of lab work with the mice and rats. When work required animals to be dosed around

the clock, they’d park a trailer in the parking lot and get up throughout the night. Until two years ago, the company had just four employees but has hired seven since as revenue has proved more consistent. The company had $147,000 in revenue the first year, $412,000 the second and $1.3 million the third. Revenue has exceeded $2 million for the last three years. Brian Drozdowski is a scientist at Morphotek Inc., a pharmaceutical company in Exton, Pa. that hired TransPharm to conduct tests on an anti-infective therapy. “Their insight in the subject has been indispensable to us since this is a new focus for our therapies, which are usually against cancer,” he said. “They have been extremely helpful in designing studies and helping to further our understanding of our molecule’s activity within a mouse model.” “We were very pleased with the professionalism, quality and value of the work we did with TransPharm Preclinical Solutions. Dan and his team knew exactly what we were looking for, and the program was completed flawlessly and on time,” said Chris Painchaud, the lead scientist at Farmington Hills-based Micro-Dose Life Sciences LLC. Antabio SAS is a startup drug company in Toulouse, France, which hired TransPharm to do studies of its new antibacterial therapeutics. “Our expectations have been met so far by this excellent and experienced ex-Pfizer team,” said Marc Lemonnier, the company’s founder and CEO. “We believe that the very encouraging results that we are obtaining through our interaction with TransPharm will set the foundations for a long and fruitful collaboration.” In 2011, TransPharm was honored as one of 50 companies to watch at the Michigan Celebrates Small Business event at the Lansing Center. In 2016, Ernst & Young LLP named the company as one of 34 finalists for the 30th annual EY Entrepreneur of the Year awards in its Michigan and northwest Ohio regions. “Dan and Sam have created a gem,” said Debbie Kelly, marketing director of the Enterprise Group of Jackson. Ross said about 35 percent the

company’s 2017 revenue of about $2 million came from overseas. Currently, it has 30 active customers. A map of the world with pins where the company does business shows customers in, among other places, France, the U.K., Germany and Brazil, and all across the U.S. These days the Rosses are most excited about their planned $10 million renovation of a former Ford Motor Co. factory on the National Register of Historic Places in the nearby village of Brooklyn. They bought the property in 2014. They plan to call what they envision as a multi-use facility the Old Irish Mill, in honor of the surrounding Irish Hills. They have grand plans for the plant and site, including a restaurant called Henry’s Irish Grill; a microbrewery and bar called Danny Boy’s Irish Pub; a healthy-food option called Sam’s Dam Cafe; an indoor farmers market; the Blarney Bakery; an Irish import store; what they are calling the Raisin Hell Action Park, which will include canoes, kayaks and paddleboats for rental; an ice-skating rink; and a year-round schedule of events, including antique car shows, running races, biking races and triathlons. They are in the process of lining up funding. Ford Motor began construction on the factory in 1938 and opened it in 1939, using the River Raisin that runs past it as a source of hydroelectric power. It had previously been the site of a mill that burned to the ground in 1902. The Ford plant originally made buttons for car horns, distributors and starter switches, switching to wartime production during World War II, making parts for B24 bombers and impellers for aircraft engine superchargers. Ford ceased production at the plant in 1967. It was then bought by Industrial Automotive Products Inc., which operated it until 1988. “There was an addition to the plant we might have to take down to make the financing work. But one way or another we’re going to get it done. It’s going to be really cool,” said Dan Ross. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

WHO WILL MAKE BUSINESS HAPPEN?

SPARTANS WILL! Michigan State University Executive MBA graduate Stephanie Eckley took advantage of the program’s no-hassle hassle format to balance work and family on the way to a new leadership p position. • All-inclusive, executive-class education tion • 20-month in-person program • Classes Friday evenings and Saturday every other weekend • Cohort of experienced professionalss

Schedule Your Personal Interview Today

(248) 289-5429

“

A SIZEABLE SALARY INCREASE was just part of my return on investment. STEPHANIE ECKLEY, EMBA ‘16

”

INFORMATION SERVICES DIRECTOR, TRINITY HEALTH

E. LANSING | TROY | DETROIT

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

WOMEN IN LEADERSHIP

Lisa Lunsford is the CEO, co-founder and majority owner of Livonia-based Global Strategic Supply Solutions LLC. ALI LAPETINA FOR CRAIN’S

A few questions for: Lisa Lunsford By Rachelle Damico

Women in Leadership

line was really exciting.

Lisa Lunsford is the CEO, co-founder and majority owner of Livonia-based Global Strategic Supply Solutions LLC (GS3), a tier-one supplier to major OEMs, which also specializes in engineering, assembly and supply chain management. Lunsford is also the vice president of sales and marketing for Deshler Group Inc., a holding company composed of seven sister companies, including GS3, which provides manufacturing, assembly, transportation, packaging and IT. Lunsford received her bachelor’s degree in chemistry from Bennett College in Greensboro, N.C. She began her career at Ford Motor Co., working in R&D in Ford’s plastic division. She has been in the automotive industry for 30 years, and has spent 18 years as a business owner. This interview has been edited for clarity and brevity.

This is the first of a new monthly series we’re launching for 2018 — insightful conversations with women leaders about their triumphs and trials in business and what they’ve learned along the way. Know a dynamic woman leader we should profile? Drop us a note: abragg@crain. com.

What made you decide to start your own company?

Special to Crain’s Detroit Business

You graduated with a degree in chemistry. What drew you to the automotive industry?

From a young age, I’ve always loved cars and the purr of an engine. I didn’t think I was going to work in the automotive industry. I was recruited by Ford Motor Company and I thought, let’s take a chance and see what happens. I got there and saw all the different facets of automotive and what it takes to build a car. The picking of the colors, the fabrics, the style, the lines ... seeing a manufacturing

From an early age, I knew I wanted to be my own boss. My family, we’re tobacco farmers, and we owned the land ever since I can remember. My grandparents always provided jobs for other people, so I always knew that was something that I wanted to do too. My brother and I had been talking about partnering and developing software. I told my boss I wanted to leave and start my own company. He said, “If it doesn’t work out, you can always come back.” That gave me that confidence to know I was valued. What were some challenges early on with your first company?

It’s the fear of stepping out on your own and knowing that you’re giving up a steady paycheck. Some early

challenges include seeking early capital. You have to ask yourself, what is the worst that can happen? (The bank) will say no? Well, I’m already living that. What do I have to lose? That motivated me to put together a great plan. We got a small business loan, we started developing the product, and that fear kept us moving to seek customers and we kept going at it. There’s a leadership gap with women in technology and automotive companies. What did that mean for you, in your career?

I didn’t see that many women business leaders. All of my bosses were men. I asked them if there were women in the field, and they said, “They’re few and far between, but that doesn’t mean you can’t do it.” They mentored me, encouraged me, and put me in situations that were challenging. They would tell me

when I was wrong and what I needed to do to improve. Do you have any advice for women who are entering the field?

I mentor young ladies. DAPCEP (Detroit Area Pre-College Engineering Program) is one of the programs I’m involved with. Around eighth grade, a lot of girls will say, “I don’t like math.” I tell them, “when you say you hate something, you’re already putting up a block. You know you’re good at it, but you choose not to pursue it. If it’s in your heart, technology, engineering … just try it out. You never know until you give it a shot.” With women in leadership, it’s the same thing. Give it a shot. If that’s something that you want to do, go after it. We have to reach back and continually coach and talk to the next generation, and women who are in the field right now.

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

SPOTLIGHT PEOPLE

Former Free Press editor takes role at automation group

The Association for Advancing Automation has hired former Detroit Free Press Executive Editor Robert Huschka as its new director of education strategies. Huschka, 45, is tasked with identifying and integrating technology trends and developing a network of industry experts for the Ann Arbor-based automation advocacy firm. Huschka took up the newly created position last month. He resigned from the Free Press in July after less than two years at the helm of the newsroom. He had spent 18 years in a variety of leadership roles at the paper.

Wayne County names new CFO

Wayne County Executive Warren Evans has named a former municipal treasurer as the county’s new CFO. He begins Jan. 16. Henry Dachowitz, 61, has more than 40 years of experience in the public and private sectors. The Brooklyn native was treasurer of Nassau County, a suburb of New York City, from 20022006 where he is credited with creating its Dachowitz compliance department, four budget surpluses and 11 bond-rating increases, a news release said. After leaving the treasurer’s office, Dachowitz went into finance consulting by founding Expert CFO Advisor. Dachowitz replaces Tony Saunders, who left last April to launch a turnaround firm after his budget-cutting efforts helped to keep the county out of bankruptcy. The new CFO is a certified public account with an accounting degree from City University of New York-Brooklyn College and an MBA from Harvard Business School.

ADVERTISING/ MARKETING/PR Joe Ranck to chief operating officer, Douglas Marketing Group LLC, Detroit/Windsor, from executive vice president and director of digital, The Berline Group Inc., Royal Oak. J Michael Kraft to vice president, strategic partnerships (greater Detroit area), Intersport, Chicago, Ill., from director (greater Detroit area), Stadium, Chicago, Ill. J Katie Pusz to founder and sole public relations practitioner, KPR Communications LLC, Greater Detroit, from marketing coordinator, The Darren Findling Law Firm PLC, Royal Oak. J Cindy Walker to senior vice president, human resources, Valassis Communications Inc., Livonia, from vice president, human resources. J

BANKING/FINANCE

and recreation department, City of Westland, from director, municipal services.

J Melanie (Lani) Barrett to executive vice president and chief human resources officer, Level One Bank, Farmington Hills, from senior vice president and director of HR business partners, Flagstar Bank, Troy. J Mariesa Cosens to senior accountant, Cole, Newton & Duran CPAs, Livonia, from associate, TaxCo Solutions LLC, Plymouth.

HEALTH CARE J Steven Greenbaum to CEO, ComForCare Health Care Holdings LLC, Detroit, from founder and former CEO, PostNet, Denver, Colo.

LAW

FOOD

J Kiyoshi Kozu to principal, Harness Dickey & Pierce PLC, Troy, from of counsel; Timothy Martin to principal from associate; and Steven Wangerow to principal from associate. J Ingrid Szura to partner and deputy real estate practice group leader, Jaffe Raitt Heuer & Weiss PC, Southfield, from partner. J Joseph Vernon to principal and Detroit resident director, Miller Can-

J Jennifer Dahlgren to purchasing team leader, National Food Group Inc., Novi, from business development director, Shiloh Industries Inc., Plymouth.

GOVERNMENT J

Brian Harnos to director, parks

SERVICES J Jeffrey Jamerino to president and CEO, Superior Electric Great Lakes Co., Troy, from vice president and CFO. Also, Al Austin to vice president of estimating from chief estimator; Frank Alcini to chief accounting officer from controller; and Krystal Kozuh to controller from assistant controller.

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

DEALS & DETAILS EXPANSIONS J Beaumont Hospital, Dearborn, completed a $4 million renovation of its 30-bed neonatal intensive care unit, which provides a more spacious patient and family-centered environment and new equipment to improve care for patients. The NICU make-

over was funded by a $2 million grant from The Carls Foundation, matched by an additional $2 million from the Beaumont Health Foundation. Website: Beaumont.org/NICU.

14th floor of Columbia Center II at 101 West Big Beaver Road, Troy. The new location will allow Datix to expand its automotive services. Website: datixinc.com.

J Datix, St. Louis, Mo., an enterprise software consulting firm, opened its first Michigan office, located on the

J Haven Inc., Pontiac, has opened the Farber Family Pet Center, a 930-square-foot facility designed to

shelter pets of domestic and sexual violence survivors who are living temporarily at Haven’s residential shelter at 801 Vanguard Drive, Pontiac. Phone: (248) 334-1284. Website: haven-oakland.org. Submit Deals & Details items to cdbdepartments.com

Estate Tax Experience

In Your Corner.

Lisa Howze to leave city for higher education role

Top Mayor Mike Duggan aide Lisa Howze is leaving her post as chief governmental affairs officer for a new role in higher education, the mayor’s office announced. Howze, 44, has been with the mayor’s office since co-chairing Duggan’s transition team in 2013. She would be his first chief of staff before transitioning into her current role in 2014. A city spokesman said her new job will be announced at a later date. Howze was credited for her leadership in building coalitions to support policies that helped in Detroit’s recovery efforts. The city has not named a replacement for the Detroit native, whose last day is Feb. 2. Howze is a certified public accountant whose career includes private sector experience as a senior auditor for Chicago-based Arthur Andersen LLP and financial analyst for DTE Energy Co. She represented the 2nd District in Detroit in the Michigan House of Representatives from 20112012.

field Paddock and Stone PLC, Detroit, from principal. Also, Donald P. Moore to senior counsel from partner, Reed Smith LLP, New York and Abu Dhabi. J Michael Temple to partner, Pepper Hamilton LLP, Detroit, from of counsel.

Ŷ Estate planning, trust administration,

and estate taxation. Ŷ Reviewing and critiquing appraisals of businesses and real estate, Previously worked for the Internal Revenue Service.

First Tier Ranking Trusts & Estates

Contact Michael J. Mulcahy at mjmulcahy@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 // J A N U A R Y 1 5 , 2 0 1 8

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

REAL ESTATE

LAW

ACCOUNTING

Brad Atkin

Stephen Skok

Robert S. Anderson

Kenneth R. Lombardo

Mike Secord

Shareholder

Member (Partner)

Corporate Vice President of Sales

Doeren Mayhew

Kerr Russell

Arterra Realty

Brad Atkin, CPA, MBA, CISA joined Doeren Mayhew in 2005. During his tenure at the firm, he has focused his efforts on providing audit and assurance services for clients in the financial institutions, service organization, technology, construction, manufacturing, leasing and retail industries. Today, Atkin helps lead the firm’s Information Technology Assurance and Security Group, where he assists clients in evaluating and designing internal control and system management processes.

Anderson has significant experience in areas of employment-based immigration counseling and representing clients in the full spectrum of immigration legal issues as applied to workforces and staff, including all aspects of the international personnel movement, formulating/implementing short- and/or long-term employment plans, obtaining appropriate immigrant/non-immigrant employment classifications/visas, PERM, and immigration compliance.

Arterra Realty, Michigan’s fastest growing real estate company announced the appointment of Mike Secord as Corporate Vice President of Sales. “Mike will play a key role in providing the tools, services and solutions for Arterra to lead the market said Vito Terracciano, CEO of Arterra Realty. Mr. Secord brings over 20 years of experience in senior level sales and management positions to Arterra. Most recently, he recruited over 300 agents for an international real estate franchise.

Stephen Skok, CPA, MST has more than 10 years of experience working with the firm. Skok is a leader within the Health Care Group and Dental Division, where he works alongside general practitioners and dentists providing strategical and operational advice for their practices. Leveraging many years worked in the firm’s Tax Group, he also focuses on minimizing client’s tax liabilities and discovering incentives for corporate, partnership, individual, and state and local tax reporting.

ENGINEERING & CONSULTING

Lombardo focuses on mergers and acquisitions, business law, federal/state securities law, taxation and estate planning. His corporate and business law practice includes choice of entity and business formation, shareholder voting and buy-sell agreements, asset and stock sales, mergers, recapitalizations, joint venture agreements, joint development agreements, license agreements, corporate governance, regulatory compliance, and public and private equity and debt capital raising transactions.

PROFESSIONAL SERVICES Mike Thomas Business Development Manager

GEM Energy, Rudolph Libbe Group Mike Thomas, of Rochester Hills, MI, is Business Development Manager for the Rudolph Libbe Group’s Michigan office specializing in commercial HVAC preventive maintenance and facility management contracts. Thomas has 25 years of industrial experience with a focus on facility equipment and upgrades. He holds a BS in Business Administration from Lawrence Technological University and is a member of the Construction Association of MI, Ann Arbor Spark and the International Facility Managers Assoc.

Cheryl Gregory, PE Lawrence Technological University College of Engineering Hall of Fame

Catherine DeDecker, PS CREW Detroit Woman of Impact Resources Officer

Spalding DeDecker Spalding DeDecker’s VP and Transportation Manager, Cheryl Gregory, PE was inducted into the Lawrence Technological University College of Engineering Hall of Fame. Cheryl was among five alumni honored during the university’s recent Homecoming festivities. This honor was established to recognize alumni who have distinguished themselves in the engineering profession through outstanding leadership, successful entrepreneurship, innovation, and contributions to engineering education. Spalding DeDecker’s VP and Marketing Manager, Catherine DeDecker was presented with the Commercial Real Estate Women (CREW) Woman of Impact Award. This award is presented to only one CREW member and is one of the organization’s highest honors. The CREW Detroit Woman of Impact is someone who demonstrates a sincere commitment to the commercial real estate industry, has been an advocate for women in the industry, and is an organization member of long-standing tenure.

MANUFACTURING Michael Kaminskas Supply Chain Coordinator

Lucerne International Lucerne International is pleased to welcome Michael Kaminskas as the newly-appointed Supply Chain Coordinator. As a Wayne State University graduate with over 15 years of experience in logistics, Michael is responsible for coordinating all international and domestic shipments at Lucerne International. Michael’s dynamic approach and passion for success is what drives his responsive approach to the supply chain.

ORDER THE

PERFECT

OFFICE DECORATION and a small (humble) brag!

Increase the life span of your announcement with a keepsake plaque. YOUR LOGO HERE

To order, contact Laura Picariello at lpicariello@crain.com (732) 723-0569

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

Page 2

CEO

FROM PAGE 1

more than doubled the number of children it serves each year to 15,000 with more then 200 employees. It’s operating on a budget of $6 million-$6.5 million this year, with clubs in four elementary schools and six buildings it owns in Detroit, outWayne, Oakland, Macomb and Washtenaw counties. But growth came, inside sources said, through a highly secretive, tightly controlled workplace that turned hostile when operating protocols were questioned. Crain’s spoke with four people who experienced the workplace environment but requested their names not be disclosed. Employees in key management, fundraising and programmatic positions were required to report directly to Krichko or his designate and not permitted to talk between operations areas to collaborate, innovate or determine how program money was spent and what results it was producing, according to those sources. High employee turnover followed, they said. “During my tenure, I felt that I had a very positive, open, collaborative relationship with the employees of the organization,” Krichko said in a statement emailed by his attorney, Deborah Gordon. “I made it clear that I was available any time, day or night, to discuss issues and concerns. I have a track record of promoting staff, offering professional development opportunities and collaborative opportunities to success personally and professionally.” Boys & Girls Clubs Chairman Hiram Jackson, who is CEO of Real Times Media LLC and pubHiram Jackson: lisher of the Came in as chair Michigan Chronlast year. icle, did not comment directly on the workplace culture matters but said an organizational assessment of the nonprofit was recently completed by an undisclosed person or company. He declined to discuss specifics, saying the results haven’t yet been shared with the full board. The report is “the first step in us identifying some of the things we need to do to address some of the financial and organizational challenges the organization has had,” Jackson said. As part of a full review of the nonprofit’s operations, the board is also considering who it should serve, where it should provide programs and what services it should offer, he said, as it gets ready for its next 91 years of operation. The Farmington Hills-based nonprofit provides programs in areas like art, education, character development and recreation to thousands of youth each year, “but there have been some challenges in terms of making sure the organization stays fresh, stays contemporary and really stays true to the mission,” Jackson said. “We are in the middle of looking at all of this — should we own buildings, lease? Focus on Detroit or statewide? We specifically went out and got a Brad Baumgardner to help with that.” Baumgardner joined the Farm-

C R A I N ’ S D E T R O I TCRAIN B U’SSDIETROIT N E SBSUSINESS // J A N U A R Y 1 5 , 2 0 1 8 ington Hills-based nonprofit last week as its interim CEO. He retired from Boys & Girls Clubs of Tampa Bay at the end of 2015, capping a 40-year career during which he also led affiliates in Memphis, Tenn.; Lakeland, Fla.; and Lafayette, Ind. He has served as a nonprofit management consultant for the past two years. With him on board, the local affiliate is now developing a plan to cut costs, identify new revenue and improve and freshen its operations and workplace culture, following high turnover among employees for years and the departure of its longtime CEO at the end of last year. “I think me coming in as chair (last year) was a clear signal that things had to change,” Jackson said. He succeeded Tom Hoeg as chairman in January 2017. Hoeg, president and CEO of Amerisure Mutual Holdings Inc. subsidiary Agency Business Solutions, had served as chair for 12 years. “Any time you have a leader who’s been someplace 20 years, you need to take a deep look at where you are and where you are going,” Jackson said. The charity has a wonderful mission and wonderful alumni, said Jackson, who benefited from the organization himself as a child. But it quickly became clear strategic changes were needed, he said. Baumgardner will work with the board to begin developing the organization’s new strategies and help identify the programmatic, financial, personnel and legal resources available through the national organization, Jackson said. And the new CEO identified through a Korn Ferry search that’s underway will continue that work. “This is a big time for city of Detroit,” Jackson said. “We really needed to take a step back and say, ‘Who do we want to be and who do we want to impact the most?’” According to Form 990 filings, Boys & Girls reported losses every year between 2013 and 2016, except for 2015 when it received a $602,000 insurance reimbursement for building repair/restoration work. It will report another loss for 2017, Jackson said. It spent more than it brought in every year during that period except 2015 when it got the insurance payment and drew down on its board-designated endowment every year between 2010 — the earliest year for which reported numbers are currently available — and 2015. The nonprofit also has a permanent endowment that can never be spent down, per donor restrictions, but generates interest revenue to help support the organization. Its value remained at $1.03 million between 2013 and 2016. The pot of savings known as a board-designated endowment is set aside by the board to be held as an endowment but can be undesignated by the board at any point for other use by the organization. Annual distributions from it for six years running indicated it was needed to cover expenses most years. Nonprofits can become complacent with consistent revenue sources like fundraisers, said John Bebes, partner and industry group leaders for the nonprofit practice group at Plante Moran PLLC. “Best practice would say that the more diverse the organization’s revenues are and the less reliant you are on a single source, the better chance you have for long-term sur-

vival,” he said. “The organization is able to adjust or change direction if it loses a revenue or revenue sources as it still has other revenues with which to operate.” A tax-exempt organization needs to be run like a business so that it is able to sustain itself over time and continue to fulfill its mission, Bebes said. “By that I mean it needs to be ‘profitable.’ It would be a concern if the organization were continually operating where expenses were greater than revenues on a consistent basis.” Boys & Girls also took out two lines of credit from Comerica Bank, a $1 million line secured by its endowment accounts held at the bank and a $300,000 line taken out two years ago that was secured by its real estate holdings, some part of the six buildings it owns. Jackson said last week that only the second, $300,000 line of credit, which had since been increased by an undisclosed amount, remains active, and the nonprofit is in compliance on its debt covenants. The charity cut about $130,000 in expenses by the end of 2016, closing out the year with a loss of $45,380 on $4.17 million in revenue, down from $5.04 million in total revenue the year before. It didn’t tap the endowment that year, and instead contributed $251,700 of revenue to it. But last year it saw lower revenue than expected from the charity preview and golf outing, Jackson said. And a couple of large gifts expected to come through were held over until this year, leading to a revenue shortfall and a loss. He could not provide specifics, as financials for 2017 are still being completed. Krichko pointed to financial surpluses in 2015 and 2016 and said the charity’s fundraising strategy included a diversified mix of financial support, but donations decreased in 2017, resulting in the operating loss. “Because 95 percent of the budget has to be raised through philanthropy each year, (Boys & Girls Clubs) operates on a very thin margin and has been successful in the majority of years over the past 91 years,” he said. During the recession of 2008, Krichko said he moved club locations into four schools, helping the organization reduce expenses from $6.5 million to $4 million. He also oversaw the merger of four Boys & Girls Clubs organizations and raised over $100 million to support the nonprofit’s programs, among other accomplishments, during his tenure, he said. Boys & Girls Clubs’ board chair and executive committee reviewed his salary each year, Krichko said. “I’m proud to have received positive performance reviews each year.” In looking to bring costs in line with revenue going forward, nothing is off the table, Jackson said. “I am fully committed to making the hard decisions to make sure we deliver a high level of services.” Boys & Girls Clubs also plans to seek new sources of revenue to support its programs, he said. “Corporate giving and individual giving are two areas we’re definitely going to be focusing on, as well as ... services can we provide that also produce earned-income through fees.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

January 15, 2018 17

MARKET PLACE SPECIALTY ITEMS

Gift of Gourmet All Year Long!

$10 OFF CDB18 Use code

Dip of the Month 1 Year Subscription on n One discount per customer. See website for more information..

Country Home e Creations Creattions

ǁǁǁ͘ĐŽƵŶƚƌǇŚŽŵĞĐƌĞĂƟŽŶƐ͘ĐŽŵ Žƌ ĐĂůů ϴϬϬ͘ϰϱϳ͘ϯϰϳϳ

REAL ESTATE

JOB FRONT

WATERFRONT PROPERTY

POSITIONS AVAILABLE

FAMILY HOME ON A LAKE!!

Truly enjoy Family and Friends like nowhere else on your own Waterfront Property in Northern Michigan! • • • •

Prices still LOW... from $400,000 to $10 Million! Casual to Formal settings! Joe Blachy will serve YOUR Buyer Broker! Call at any time between 7 AM and 10 PM... 7 days a week!

Joe Blachy

(231) 409-9119 Call anytime between 7am & 10pm

Email: joe@joeblachy.com Website: joeblachy.com 420 Howard St., Petoskey, MI 49770

Call or email today for information on a custom advertising plan!

cdbclassified@crain.com 313.446.6086

ENGINEERING Hitachi Automotive Systems Americas, Inc. has a Lead Engineer [job code: HR2017-11] job opportunity in Farmington Hills, MI: Exp must include ANSI-C compiler, assembler, linker, loader, lister, parsers, & SW dev’t tool chain components. Supervise 10 direct reports. Mail resume attn: T. Menning 34500 Grand River Ave. Farmington Hills, MI 48335. Must ref job code to be considered.

POSITIONS AVAILABLE VP of Regulatory & Quality Services The Health Care Association of Michigan (HCAM) has an opening for a VP of Regulatory and Quality Services. The position allows for engagement with long-term care providers and other stakeholders on regulatory and quality issues impacting members. The candidate would assist members with survey and enforcement situations, influence change in federal and state regulatory policy, and serve on various workgroups formed by state government and other interested organizations.

For complete job posting go to: www.hcam.org

POSITIONS AVAILABLE

WORKERS COMPENSATION BUSINESS DEVELOPMENT MANAGER Team Rehabilitation, a network of outpatient PT clinics has a great opportunity for a Workers Compensation Business Development Manager. Position is to generate Workers’ Comp physical therapy referrals by calling on physicians with a heavy concentration of patients covered by workers’ comp or auto insurances. Sell the advantages of partnering with Team Rehab to case managers, adjusters, insurance companies, corporate and municipal employers. We offer an excellent benefits package, competitive salary, and performance bonuses. It’s an exciting time to join the company that was voted the #1 Workplace in 2017 by the Detroit Free Press.

For more information, please contact: Catina Kristofik at 586-299-1088 or catina.kristofik@team-rehab.com

HARMAN CONNECTED SERVICES INC.

1 Position: Principal Software Engineer, Job Code PSE-M01 Work under min supervision on complex proj & may assist less exp peers. Participate in SW design meet & anal user need to determine tech req. Dev & maintain sys or apps involving wide variety of program & lang. Modify, repair or expand exis prog to correct errors, incr effic, upgrade interfaces improve performance. Perform trial runs for test & analysis on SW & sys to identify prob. Contribute to training manuals or instr for end users. Eval the effect of imple SW. Research & remain informed of new tech & dev tools. Drive team task compl & attainment of departmental goals. Evalu & assess new SW dev proj based upon size, compl & time frame. Serve as escal point for issues beyond proj team autho; resolv conflicts involving sched resources, or tech issues. Req: Bachelor’s deg (or foreign equi) in Comp sci, Eng or related with 6 yrs of exp in Embedded SW dev. Alternative: Master’s deg (or foreign equi) in Comp sci, Eng or related with 4 yrs of exp in Embedded SW dev. Prog Lang: Strong JAVA, C/C++ & basic shell scrip. Exp in dev of SW for embed sys espec on the Android/Linux platform. Android sys lev (non-UI) components dev & integration, sys program using IPC, sync primitives. Analysis & debug of sys, app & core p’form related issues in embedded, multiprocessor, multi-interface envir. Exp in code & SW doc reviews. Issues analysis, prioritiz & fixing. Deep u’standing of archit of Mobile Linux based SW platforms (esp Android & Android Framework). K’ledge of config mgmt sys (esp GIT or any other like SVN /Subversion) defect mgmt & change rev tools (incl JIRA, DDTS, Gerrit, GitLab).

Please send resumes to: Harman Connected Services Inc. Attn: Gokul /Job Code PSE-M01, 2002 156th Ave NE #200, Bellevue, WA 98007. Work location: Novi, MI may have long term assign in other locations in U.S. inclucing Livonia, MI areas.

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

LIFT

FROM PAGE 3

The $50 million spent renovating and outfitting the facility — $15 million of which came from the Michigan Economic Development Corp. — with testing and production machines, some of which are on loan from equipment manufacturers to serve as a showcase of their products to OEMs and parts suppliers. Comau LLC, an Italian automation subsidiary of Fiat Chrysler Automobiles, has placed a robotic-welding lab inside the LIFT side of the building that can be used for testing flexible welds. “We really see it as an important part of our development moving forward,” said Martin Kinsella, a director at Comau, which has an innovation center in Southfield. Kinsella, a LIFT board member, said the location of the manufacturing institute in Detroit “was strategically very important” to bring multiple industries under one roof. “It covers all sectors — aerospace, automotive, rail, navy, military,” Kinsella said. “We actually kind of intentionally reinforced it’s not just an automotive institute.” Manufacturers and suppliers also can use the facility to train workers on using a compression molding press or an injection-molding machine. “They just don’t have the resources to have that kind of press for development purposes — they have it production, but they don’t want to break into production,” said

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

Larry Brown, executive director of Lightweight Innovations for Tomorrow, stands inside a Comau LLC robotic-welding cell inside the lightweight metals research and testing facility in Detroit’s Corktown neighborhood. LIFT shares the 100,000-square-foot facility with the Institute for Advanced Composites Manufacturing Innovation (IACMI), a federally-designated manufacturing institute focused on the development of lightweight composite materials for the automotive industry and other manufacturers.

Boeman, who also is associate director of vehicle technology for IACMI. “So they come here to do that.”

With a focus on lightweighting composite materials to shed pounds from cars, IACMI’s members include FCA, Volkswagen

ATTRACT. RETAIN. DEVELOP.

Group of America, Inc., Ford Motor Co., Toyota Motor North America Inc. and General Motors Co. Last week, Volkswagen became

the first OEM to officially join the metals-focused LIFT institute, creating the potential for using both sides of the testing facility. VW’s Audi unit is partnering with Lockheed Martin and Carpenter Technologies on developing lighter gears and gear components, said Roman Landes, lead engineer for materials for steel and specialty alloys at Audi. The Ingolstadt, Germany-based luxury automaker chose to partner with the American companies on the project because of the engineering expertise in metro Detroit’s auto sector, Landes said. “This for us is a very unique opportunity because we have not been involved in such a manner in the U.S. with developing R&D stuff,” Landes told Crain’s in a phone interview from Germany. “This is fairly new, and we’re looking forward to this experience now.” “And we want to continue on developing partnerships with the U.S. by using this platform of LIFT in the future,” Landes added. IACMI is planning to host its bi-annual meeting with members Tuesday through Thursday this week, coinciding with the auto show's industry preview days. LIFT and IACMI officials will give public tours of the facility and research machines Thursday, with shuttles running from Cobo Center and the DoubleTree Dearborn hotel. Tickets can be reserved online on Eventbrite.com. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

Finding and keeping top talent is one of the biggest challenges facing businesses’ today. What better way to attract, retain and develop your company’s rising leaders than by investing in their personal development?

Crain’s Leadership Academy is a unique five-session program offering the best of personal development, professional growth, leadership exposure and civic discovery. 100% of graduates believe the program provided a worthwhile ROI 100% of graduates agreed the Academy provided the skills and tools to help them grow as a leader Source: C2 Leadership Academy Graduate Satisfaction Survey

SAVE $1,000 OFF THE TUITION FEE BY SUBMITTING A NOMINATION BY JAN. 19! Visit crainsdetroit.com/leadershipacademy

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

FIELDHOUSE FROM PAGE 3

A spokesman for Soave said the building was closed because hockey use declined. In its heyday, the City Sports Center was a practice facility for the Detroit Red Wings and was home to Grosse Pointe South and University of Detroit Jesuit hockey teams, the Wayne State University women’s hockey program, and adult recreational hockey leagues. Kropp declined to discuss DCFC’s financing for the fieldhouse project other than to say it’s entirely private. The team had a $1 million operating budget for its most recent season, and relies on a mix of game-day revenue along with corporate sponsorships and merchandise sales. The fieldhouse, if it catches on, will be another source of income. The lease allows the team to sell corporate sponsorships for the building. “We do have the option to advertise sponsors at the building, and it’s a part of the business plan,” Kropp said. Detroit City said that in addition to renting field time to local adult soccer leagues — the team’s co-owner and CEO Sean Mann launched the co-ed rec Detroit City Futbol League in 2010 — it also plans to create formal partnerships with youth soccer programs to use the fieldhouse as a home pitch. The building is part of Detroit City’s effort to build a year-round talent pipeline for local soccer — and theoretically could produce DCFC players — while also generating revenue to operate the club. The building also expands the team’s footprint and

DOYLE FROM PAGE 3

changes you’ve led in the last year or so?

In the last year, two years, it's been primarily about continuing to kind of extend our lead in technology and our use in technology around ordering. And the other thing is, really, the majority of our stores now around the world have been re-imaged, and making them friendlier for carryout and our customers who choose to (dine in). The last thing is starting to really work on delivery of the future, and working with Ford (Motor Co.) and (Livonia-based automotive supplier) Roush on autonomous vehicles. Really starting to think about how as transportation changes, what is Domino’s place going to be in the new world? Where do you see Domino’s headed next, as you step out of the spotlight? Mobility and otherwise.

That’s all still going to take a little bit of time. It’s still a few years out before the (autonomous) vehicles are going to be where they need to be and get produced in quantity. Our job is ... to figure out how customers are going to interact with them. And that’s really what we’ve been doing with Ford. Testing that interaction and developing the right interface and understanding what we need to do to change expectations for the customers — they might need to come out of their homes to get the pizzas. And that’s where we’re doing most of our work. I think, you know, the people who are

DETROIT CITY FOOTBALL CLUB

In its heyday, the City Sports Center was a practice facility for the Detroit Red Wings and was home to Grosse Pointe South and University of Detroit Jesuit hockey teams, the Wayne State University women’s hockey program, and adult recreational hockey leagues.

brand — an ongoing effort in the shadow of Detroit’s effort to land a Major League Soccer expansion team to play at Ford Field. “The goal is to develop a premier facility that serves as a hub for all levels of soccer in Detroit,” Kropp said. “We want to do what we can to expand our footprint in Detroit. The indoor facility fits into that. Getting involved with youth soccer a bit more, that’s another part of our growth strategy.” The 50-plus Detroit City Futbol League teams, made up of 1,200 residents from different neighborhoods, often have to find suburban locations to play in the winter, and the Detroit City Fieldhouse will be available as a home pitch for them. “This would give them an option to play in the city,” Kropp said. Other potential uses for the fieldhouse include indoor sports such as flag football and lacrosse, he added.

The fieldhouse project is occupying DCFC’s time while it awaits the outcome of a New York court battle before it can turn pro, which has been the team’s plan for some time. It currently plays in the semi-professional National Premier Soccer League, but is seeking to move to a higher, professional level of soccer with more full-time staff and paid players. The hitch has been an ongoing federal antitrust lawsuit by DCFC’s possible landing spot, the New York City-based North American Soccer League, against the Chicago-based U.S. Soccer Federation, which sanctions American soccer leagues. USSF provisionally approved NASL and the Tampa-based rival United Soccer League a year ago as Division II leagues, a step below Major League Soccer atop the American soccer organizational pyramid. Then last fall, USSF rejected NASL’s appli-

getting into it early and figuring it out and have scale and are investing are going to win. But it’s going to be a big change, but that’s why were going to get ahead of it early. Right now it’s just about understanding the consumer experience and how we’re going to interact with the customers.

Looking at the future for Michigan — what do you think the state’s economy needs right now?

So why are you stepping down?

There are a couple things I wanted to accomplish and those are done, but the most important of them is, do we have the right leaders and leadership team to take the business forward? I think there’s a certain rhythm to succession planning, and when it’s that right moment, you do it. (Richard Allison) is going to be a spectacular CEO, and I’m just really excited about where Domino’s is going to be going. What’s next for you?

I’m going to take time to figure that out. ... I’ll take a little bit of time and figure out what’s next, but no immediate plans. Any chance you’re talking with David Brandon about working with him at Toys R Us?

No. [Laughs.] But I talk to him all the time, he’s my chairman (at Domino’s). Any aspirations outside of business — like in politics? There’s the governor’s race, and others.

No. I’m going to finish up strong at Domino’s, and then I’m going to figure things out. ... Governor — that’s in 10 months. That’d be more than a little too late. ... The good news is I can take the back half of the year to figure out what’s next, and that’s the way I'm going to approach it.

cation to remain a Division II league, meaning it could drop to the less attractive Division III, the lowest level of U.S. pro soccer above amateur status. The next level below that, the fourth tier of the soccer pyramid, is where Detroit City FC plays now, with unpaid players. Division II leagues have to meet criteria such as having 12 teams. NASL doesn’t have enough teams, but has said it’s in talks with teams that may join it, including DCFC. The 30-team USL, which is closely tied to Major League Soccer and is considered the more financially stable league, is expected to retain its Division II status and has plans for its own Division II league. DCFC has said it’s not in talks to move to the USL. The NASL on Sept. 19 filed a federal antitrust lawsuit in U.S. District Court for the Eastern District of New York against the soccer federation that alleges it conspired with MLS

and its marketing arm, Soccer United Marketing, along with the USL, to limit competition and drive the NASL out of business. A federal judge in November denied the NASL’s injunction request to preserve its Division II status, and the league subsequently filed an appeal that’s ongoing. The other option for Detroit City FC is the new National Independent Soccer Association, a Division III league that’s being formed by investors Peter Wilt, a longtime soccer executive, and attorney and consultant Jack Cummins. It said in December it has three confirmed markets (Chattanooga, Connecticut and Miami) and is in talks with others, including DCFC. When DCFC turns pro hinges on what happens in the courtroom. NASL plays a spring-summer schedule, and NASL is moving to an August-June format, similar to what many international leagues do. “I think it depends on when that ruling comes down,” Kropp said. Wherever DCFC ends up — and it may stay in the NPSL in 2018 — it will need a deep-pocket principal owner as part of any move to turn pro. USSF requires a Division II team to have a controlling owner with a $20 million minimum net worth and Division III teams to have a principal owner with a $10 million net worth. None of Detroit City’s owners meet that requirement, and Mann said they have had talks with a number of undisclosed potential investors to satisfy ownership requirements to turn pro. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

The economy is in awfully good shape in Michigan, and we’ve made enormous progress. The state government is in a much better place fiscally than it has been. ... I think probably the single biggest thing on the to-do list in the state is: How do we raise the overall level of educational attainment in the state? (Jobs) are going to require more technical training, more higher education, two-year degrees, whatever it may be. ... Having our workforce be even more prepared than we are today is going to help economic growth. How can business leaders help with this?

You start with metrics and goals and what you’re trying to accomplish. What do we need to do to generate those outcomes? I think that’s where you start. Setting specific goals for attainment and where you need to drive change. It can’t just end at “we think we need to do better.” We need to have very specific things we’re trying to accomplish. You told Crain’s a few months ago you were surprised more companies haven’t used radical honesty in advertising like Domino’s did. What’s your advice on how to use it?

It fundamentally starts from the top. You’ve got to have organizational leadership that’s committed to it. What’s gotten the most attention in terms of the Domino’s conversation is how that’s played out with our customers. But maybe every bit as important is how that plays out inside the company. We talk about the things we’re not good at bluntly. ... If you go after things directly instead of dancing around those issues, you’re going to accelerate fixing those things.

Advancing Trust for Over 100 Years bbb.org/detroit or call 248.223.9400

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

HQ2

Amazon proposal selling points

FROM PAGE 1

bid book envisioning an Amazon-fueled downtown office building construction spree was given to Inland Press on West Lafayette Boulevard to effectively be printed for an audience of one — Jeff Bezos, the billionaire majority owner of Amazon.com Inc. “So close everyone! So close!” Dittmer wrote to the team, which had just endured a grueling race to meet Amazon’s demands and churn out the book and supporting materials for Bezos. Just 10 copies of Detroit's closely guarded Amazon bid book were initially printed. Cory Tincher, a young Grand Valley State University graduate and director of special projects for Gilbert’s Rock Ventures LLC, was charged with “full responsibility for their care” after they came off the printing press, Dittmer wrote. Copies of the bid book were disseminated as follows: One to Gilbert, the billionaire founder and chairman of Quicken Loans Inc.; one to Mayor Mike Duggan; one to Gov. Rick Snyder; one to Drew Dilkens, the mayor of Windsor; and one to Bedrock’s architecture team. Five were sent overnight to Seattle via FedEx to Amazon, some 2,350 miles away. None was made publicly available until two months later — when Crain’s first obtained a copy of the sales pitch and the Gilbert-driven downtown vision plan.

‘I already put guys in a room’ F. Thomas Lewand had a lot on his mind Sept. 7. First and foremost, Hurricane Irma had just a day earlier barreled through St. John, the U.S. Virgin Island where he and his wife, Kathy, have a home. And then another storm arrived in the inbox of Detroit’s group executive for jobs and economic growth: A flurry of emails inquiring about whether Detroit would submit a bid for Amazon’s second corporate campus. The emails came from attorneys and others in and outside of the city, reflecting the palpable interest in fueling Detroit’s continued rebound. It was just before 7 p.m., and Lewand sent three responses over the course of nine minutes saying the city is “actively pursuing” or “very actively pursuing” an Amazon bid. He sent two more the following morning, both using that same language. The city itself had still had not officially acknowledged its intentions. “We will be evaluating it carefully,” the mayor’s press secretary, John Roach, said at midday Sept. 7. But behind the scenes, the planning was well underway. Gilbert called Duggan shortly after Amazon’s request for proposals became public in news stories, around 7:30 a.m. Eastern Standard Time on Sept. 7. “I know Bezos. I know how he thinks,” Gilbert told the mayor. “I think we can win this thing and I think we need to go all in.” Gilbert told Duggan he had already started assembling a team of employees to dissect Amazon’s RFP inside an unfinished sales office at Bedrock’s swanky Woodward Avenue headquarters, which features its own bar with bourbon and whiskey. “Look, I already put guys in a room,” Gilbert told Duggan. Forty people were working “full time coordinating every detail of the

The Detroit-Windsor proposal for Amazon rested on five main selling points listed at the top of an Oct. 18 nine-page response to the online retail and tech company’s Sept. 7 request for proposals: Mike Duggan: Asked Gilbert to lead Detroit bid.

Dan Gilbert: Convened team to work on bid.

proposal.” “30 are on Gilbert’s team, and the rest are from the city, DEGC or State,” he wrote in an Oct. 2 email. And that’s not including more than 60 on a bid committee of business, political, philanthropic, education and other leaders. At Bedrock’s office, on the fourth floor of a 137-year-old one-time department store, the nondescript room would quickly be dubbed “the war room.” It was lined with six whiteboards that covered up the unpainted walls and surrounded a 14-seat table. Dryerase markers would in the next several weeks turn the boards into something resembling a piece of abstract art with data and brainstorming. With his city’s largest single employer on the phone, Duggan decided Gilbert had the small army needed to chase Amazon. “Alright, I want to treat this like I would treat an Olympic bid committee,” Duggan told Gilbert. “Do you want to chair it?” “Absolutely,” Detroit’s most powerful landlord and developer replied. Five minutes after hanging up with Gilbert, Duggan received an unexpected call from Gov. Rick Snyder. Duggan was shocked to be hearing from the governor, who was in Japan’s Shiga Prefecture in the middle of a sixday trade mission to meet with Japanese auto company executives. It was morning in Detroit and there was a 6,500-mile and 13-hour time difference between the two men. Duggan thought someone must have died. “Mike, I just read this Amazon RFP,” Snyder told Duggan while calling from a bus. “We’ve got to get in on this. What can I do to help?”

Rowing together Snyder wanted to get the entire region involved in presenting a united front. But in the days following Amazon’s release of the RFP, there were early signs of competing interests and ideas colliding behind the scenes and in public. Gilbert’s team was already working on a downtown Detroit strategy, centered largely on their real estate portfolio. Others had different ideas. Suburban leaders in Southfield and Pontiac were eager to put forward their biggest tracts of unoccupied land — the abandoned Northland Mall and the Pontiac Silverdome, respectively — as possible sites for a sprawling office park. Sandy Baruah, president and CEO of the Detroit Regional Chamber, publicly floated a “multiple footprint” approach for Amazon to spread 50,000 new employees across several campuses around metro Detroit. Flint business leaders wanted to put forward a long-shot bid. A representative of a Lucas County, Ohio, commissioner had floated Toledo as a possible bid partner. And officials in Windsor were reaching out to Gilbert and Duggan’s

Rick Snyder: Called from Asia to talk about bid.

Sandy Baruah: Floated “multiple footprint” idea.

office proposing a joint bid to leverage Canada’s access to international workers and strategic tax advantages. “The City of Windsor would certainly be amenable to providing information and support as part of a joint proposal,” Windsor economic development officer Matt Johnson wrote in an 11:47 a.m. Sept. 8 email to Matt Walters, executive manager of development in Duggan’s office. “Great suggestion for Windsor and Detroit to collaborate,” Walters replied before forwarding the message to Basil Cherian, a senior policy adviser to Duggan. Duggan had already started making the rounds, reaching out to Wayne County Executive Warren Evans and Baruah and having lunch with Oakland County Executive L. Brooks Patterson on Sept. 13. Duggan lobbied the longtime suburban GOP stalwart, one with a well-documented, complicated history with past Detroit mayors, pitching it as a regional project. Everyone would benefit from 50,000 more jobs, occupied houses, tax revenue and demand at local retailers. “Absolutely,” Patterson told the mayor, agreeing to join the regional group. The morning after clearing the Patterson hurdle, Duggan publicly announced he had tapped Gilbert to lead the Super Bowl-like bid committee during an appearance before a crowd of influential former Detroiters. “We’re going to flesh out a bid committee,” Duggan said at the Detroit Homecoming event, produced by Crain’s, in The Factory at Corktown’s event space on Michigan Avenue. Behind the scenes at Detroit Homecoming that morning, Snyder’s righthand man, Rich Baird, was seen huddling with Duggan in the green room for about 30 minutes after the mayor spoke about the Amazon bid. There were just five short weeks to go to pull together a multi-faceted economic development proposal for a project bigger than anyone in this town had previously pursued. Organizationally, Detroit’s Amazon bid was about to kick into high gear.

Keeping the ship tight In causes involving Detroit and bringing together public and private sector leaders, Rich Baird is almost always the governor’s emissary. A retired former PricewaterhouseCoopers LLP executive and close confidant to Snyder, Baird was quickly involved in organizing the Amazon bid committee’s infrastructure — and installing some business-like guardrails. On Sept. 18, the Monday after Duggan announced Gilbert would lead a bid committee, officials from the city, state and Gilbert’s team held their first organizational call. Early that afternoon, Windsor Mayor Drew Dilkens announced to The Windsor Star that the Canadian city would join Detroit in a binational bid for Amazon’s second headquarters. The next morning at 9:35 a.m., Baird fired off an email to Duggan’s

JJ“A seamless path to a walkable campus of 8 million+ square feet in the heart of downtown Detroit.” JJ“One campus in two countries on a busy international border.” JJ“50 million people and many of the world’s leading education institutions within a five-hour drive.” JJ“Significantly lower operating costs across labor, taxes and real estate.” JJ“An incentive package ... that doesn’t require any new legislative action.” (The total value of the local and state tax incentives was redacted from all records released by the city)

chief operating officer, Dave Massaron, and Quicken Loans lobbyist Jared Fleisher — a top lieutenant in Gilbert’s business regime — as well as Jeff Mason, CEO of the Michigan Economic Development Corp. The subject line was direct: “Every other Day Calls for Amazon Field Generals.” “Governor Snyder has asked me to convene an update/issues call every other day with the ‘Field Commanders’ (Mason, Fleisher, Massaron and Baird) for the Amazon Project,” Baird wrote, advising the group there would be 30- to 60-minute calls every other day for the next month. Throughout the process, they were scheduled at 8 a.m. No fewer than a dozen were held. Baird also sought to tighten up the ship, warning the others that “the potential for well-intentioned but ill-advised unilateral activity from stakeholders is high, which underscores the importance of this group being aligned and seamless.” “That is particularly important given the media focus on this project,” Baird added. The Windsor mayor went public with his city’s involvement before Michigan officials had a chance to discuss a partnership with Ontario’s provincial leaders. “While we all agreed yesterday it was a good idea, we should have checked that box before letting the plans go public,” Baird wrote in a 12:13 p.m. email. “Let’s move forward urgently, but smartly given all the moving parts in front of us.” “You are clearly correct on Windsor,” Fleisher replied eight minutes later. “I know I was disappointed to see that leak out, as was Dan.”

Gathering intel As the “Amazon field generals” were getting organized, a disparate band of consultants were being brought into the project — some paid, others volunteering for the cause. Officials at the Detroit Economic Growth Corp. recommended Gilbert’s Rock Ventures hire economic development consultant Jeff Marcell’s TIP Strategies. Marcell’s résumé came with built-in Amazon knowledge; he’s a former CEO of the Seattle region’s economic development council. Tom Whatman, an Ohio-based Republican political strategist who had done public affairs work for Rock Ventures before, was brought into the communications team. And the Troy office of Boston Consulting Group had offered to lend the

Detroit task force up to eight of its employees to run a project management office, or PMO, on a pro bono basis. The firm, referred to as BCG in emails, served as an organizational clearinghouse for the large volume of regional information being accumulated for the narrative and visual presentations to Amazon. “From our call this morning, they are highly professional and all business,” Fleisher wrote in a Sept. 19 email to the “commanders.” “Excellent choice for PMO/Process Management,” Baird replied. “Former chairman of BCG back in the day was a good friend of mine.” Baird, who was previously a global managing partner of PwC focused on talent recuritment, wanted to accumulate as many corporate contacts as he and others could leverage to make inroads with Amazon and Bezos’ inner circle. He mentioned a connection former Detroit Emergency Manager Kevyn Orr had to the publisher of The Washington Post, which Bezos owns. Later that day, another connection emerged. Sarah Hubbard, the Detroit Regional Chamber’s contract lobbyist, met with Baruah in Lansing. Through her firm, Acuitas LLC, Hubbard also has been Amazon’s instate lobbyist for state subsidies the online retailer secured for a distribution center in Livonia and another package-fulfillment facility that’s under construction in Romulus. Amazon wants to be in a state where computer science education is part of the standard public school curriculum, Hubbard told Baruah, according to an email. She said the tech giant is a “big time supporter” of the FIRST Robotics program for high school students to learn how to build and program robots, according to Baruah. And, according to Hubbard, Amazon needed space for development of its ambitious plans to someday deliver packages from the sky. “Drones are a real thing,” Baruah wrote in an 8:29 p.m. email to Lewand, one of Duggan’s top deputies. Illustrating the round-the-clock work going into the Amazon bid, Lewand replied nearly five hours later — at 1:12 a.m. the next day. “Very helpful intel,” Lewand wrote. “Look forward to talking this afternoon.” A week after the Amazon bid was

A bo inclu

subm talke com und

star

Rea

D thon lobb day ing men In Hub if th any nom the R “E are the wro Th Ama an o que com and “I them app Ju idea “H “Ha A own peo were Jeff B

emment s. G in onal me of mupre-

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8 sprawling and crowded campus in the city’s South Lake Union neighborhood. It was a 24-hour mission. “We walked the streets, got a flavor for the campus, which is not easy to pick out in their dense urban environment,” Tincher recalled. A second team followed right behind the first squad that week, talking with real estate developers, architects and others close to Amazon’s operations to study the company’s decision-making. As Gilbert flatly stated in a letter to Amazon company leaders, his team was “obsessed” with them — stealing a phrase straight out of Amazon’s customer-focused playbook.

‘Sounds like a dream!’

DETROIT AMAZON BID BOOK

A book published as part of Detroit’s bid for the second Amazon headquarters includes sections on transportation (above) and downtown living (below).

they usi. 19

cess mer was

obal d on ccuts as make ’ innecManer of ezos

tion

ionmet

LLC, s inthe ibuther un-

tate on is curac-

ime proearn , ac-

mant of eliv-

uah and,

lock Leater

rote. fter-

was

submitted in mid-October, Snyder talked publicly about the need to make computer coding a foreign language under the state’s K-12 curriculum. Michigan’s nerdy governor was starting to speak Amazon’s language.

Reaching out to Amazon During the third week of the marathon, Hubbard, the in-state Amazon lobbyist, passed along another tip a day after returning from a Seattle meeting with Amazon economic department staff. In a Sept. 26 email sent at 10:16 a.m., Hubbard asked the chamber’s Baruah if the Detroit bid committee had made any direct contact with Amazon’s economic development office to discuss the RFP. “Evidently key leaders in some areas are doing this and getting a call with the lead on the project,” Hubbard wrote. The second-to-last paragraph of Amazon’s eight-page RFP contained an open invite for cities to call with questions and work directly with the company on a tax incentives package and real estate options. “It appears to be a bit of a filter for them regarding gauging the interest of applicants,” Hubbard wrote. Just before noon, Baruah ran the idea up to Lewand. “Have we done this?” Baruah wrote. “Happy to facilitate next step.” At this point, with one of Amazon’s own lobbyists dropping hints, some people working on the project felt they were falling short on direct outreach to Jeff Bezos and his lieutenants.

“Need to remedy that asap,” Aaron Turk, senior executive of strategy and business development at the DEGC, wrote in a Sept. 27 email. “Adding Mullen as he is going to try and help get Dan to move on reaching out to Amazon ...,” Julia Wachler, director of project management at Bedrock, responded, referring to Dan Mullen, president of Gilbert’s real estate company. Within eight hours, Gilbert had written a lengthy missive to Amazon’s public HQ2 inquiries account, amazonhq2@amazon.com, trumpeting Detroit and also wondering, perhaps, if there was something more to be received. Gilbert’s team believed it had figured out who was “on the other end” of that email address, an Amazon economic development specialist named Holly Sullivan, knowing that would be a key advantage that other communities might not have. Tincher said Sullivan “will meet” with Detroit’s team during the process. “We have also heard that there may be a second, more detailed or supplementary RFP available,” Gilbert wrote to Amazon. “Do you have any additional materials you would be willing to share with us that will help us better understand what you are aiming for with HQ2?” It was 6:57 p.m. on a Wednesday, 20 days and 11 1/2 hours after news of the RFP began coming out in the media. The outreach had begun. During the same last week in September, Gilbert’s companies sent a small tactical group to Seattle to get a street-view assessment of Amazon’s

All the while, other real estate developers sought a piece of the Amazon pie. No fewer than four non-Bedrock property owners in the city were in touch with Howbert about getting their sites considered for Amazon buildings. The Platform LLC, which is active in several Detroit neighborhoods, put together a plan to get Amazon 9.2 million square feet in the New Center area in a series of existing and to-be-built buildings in the area, including the Fisher and Albert Kahn buildings, owned by the Detroit-based company; and Cadillac Place and the Michigan Department of Transportation Amtrak site. The Ilitch family’s Olympia Development of Michigan was also involved in the conversations. Ultimately, Olympia property and The Platform ended up being specifically discussed as possibilities for Amazon in the final bid submission. However, the Herman Kiefer hospital complex site west of the Lodge Freeway and the Joe Louis Arena site were not included in the submission, even though Ron Castellano and Financial Guaranty Insurance Corp., or FGIC, which control the two sites, respectively, hit up Howbert about offering their properties to Amazon. “Remember we need to get them to 8M square feet in a fairly walkable area,” Howbert responded to Castellano on Sept. 18. “We also need to have a very good mass transit access story. I would assume both are difficult for HK site, but no doubt you’ll have some creative response.” And Ian Glastein, a representative for FGIC working on the property with Monarch Alternative Capital LP, said he “wanted to offer the JLA as a potential location.” “8.3 acres on the Detroit waterfront with ~2,000 parking spaces in the heart of the CBD — sounds like a dream!” A Glastein dream that wouldn’t come true. Neither the Herman Kiefer or Joe Louis Arena sites were offered as part of the Amazon bid. Instead: Five key players involved in the process — Gilbert, the Ilitches, the city, Windsor and Wayne County — were cited in the bid as owning more than enough property to satisfy Amazon’s needs.

The Chicago playbook In the curation of a Detroit sales pitch to the world’s largest online retailer, no piece of intel seemed to be dismissed. Especially if it could be used to needle a competitor. One of Gilbert’s contentions has been that Amazon is considering cities based not on their metropolitan statistical area, but instead what is in the five-hour radius that surrounds them. That may have been a notion at least inspired by Chicago Mayor Rahm

Emanuel, according to emails. A Sept. 26 Business Insider story quoted the former Barack Obama chief of staff as touting Chicago’s pull from universities outside its MSA, such as the University of Michigan (Ann Arbor), University of Notre Dame (South Bend, Ind.), the University of Wisconsin (Madison), Purdue University (West Lafayette, Ind.) and the University of Iowa (Iowa City). “See below for article from Rahm Emanuel,” the DEGC’s Aaron Turk wrote in an email. “Tipping his hand a bit in terms of Chicago’s strategy and messaging ... Mike (Quinn of Boston Consulting Group) and Jed/Basil, note how Rahm is defining Chicago’s talent pipeline — claiming a 4-5 hour radius as well, including Ann Arbor.” “I also vote on the talent that we broaden to include Canadian schools in a five hour drive,” Jed Howbert, executive director of Duggan’s Jobs and Economy Team, wrote Sept. 27. “We should take credit for the entire area around Detroit and Windsor.” Gilbert soon began talking about how Detroit and Windsor could geographically draw college-educated talent from Chicago universities, Ontario’s University of Waterloo and even Pittsburgh’s Carnegie Mellon University, which is just a few minutes under a five-hour drive from Detroit.

Crossing paths with Bezos Nearly three months after Detroit’s proposal was sent to Amazon, the marketing project is still being refined as Gilbert’s team and business and government leaders await word from Seattle on whether Detroit has made it past the first round of cuts. On Saturday, Nov. 4, Gilbert and Bezos crossed paths at the star-studded Summit LA17 conference in Los Angeles. Athletes. CEOs. Politicians. All came to the City of Angels to participate. Gilbert, owner of the Cleveland Cavaliers, was on stage with Dhani Jones, a University of Michigan graduate who founded and is partner of Cincinnati-based Qey Capital. On the same stage later, Bezos had a conversation with his brother, Mark, a marketing executive. During the conference, Gilbert got a chance to sit down with Jeff Bezos — 16 days after Amazon’s economic development office was flooded with more than 200 HQ2 submissions. Gilbert and Bezos had met a few times before in the summers for the last decade or so at the Allen & Co. Sun Valley Conference in Idaho that draws millionaires and billionaires in media, tech and other industries. To Gilbert, the previous conversations with Bezos had been pleasant exchanges of “‘Hey, how ya doin’, ‘what’s going on.’” But they had never truly had an indepth discussion. This was Gilbert’s first chance to make his elevator pitch for Detroit to the world’s second-richest man. To the guy he and his team had become obsessed with. Instead, Gilbert asked Jeff Bezos about Amazon’s culture, a common line of questioning for the Quicken Loans founder and chairman during untold numbers of fireside chats and other conversations over the years since moving downtown. Bezos brought up Detroit. “What you’re doing is really good." Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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

REPORTERS Tyler Clifford, breaking news. (313) 446-1612 or tclifford@crain.com Annalise Frank, breaking news. (313) 446-0416 or afrank@crain.com Jay Greene, senior reporter Covers health care. (313) 446-0325 or jgreene@crain.com Chad Livengood Covers Detroit rising. (313) 446-1654 or clivengood@crain.com Kurt Nagl Breaking news. (313) 446-0337 or knagl@crain.com Kirk Pinho Covers real estate. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor Covers the business of sports. (313) 446-1626 or bshea@crain.com Lindsay VanHulle Lansing reporter. (517) 657-2204 or lvanhulle@crain.com Dustin Walsh, senior reporter Covers economic issues. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits and philanthropy. (313) 446-1694 or swelch@crain.com ADVERTISING Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Director of Sales Lisa Rudy Director, Crain Custom Content Kristin Bull, (313) 446-1608 or kbull@crain.com Senior Account Manager/Political Specialist Maria Marcantonio Advertising Sales Gerry Golinske, Heidi Martin, Sharon Mulroy, Diane Owen Classified Sales Manager Angela Schutte, (313) 446-6051 Classified Sales Lynn Calcaterra, (313) 446-6086 Events Manager Kacey Anderson Marketing and Sales Promotions Manager Christina Fabugais-Dimovska Senior Art Director Sylvia Kolaski Special Projects Coordinator Keenan Covington Sales Support Suzanne Janik Media Services Director Hussein Abdallah CUSTOMER SERVICE Main Number: Call (877) 824-9374 or customerservice@crainsdetroit.com Subscriptions $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or (877) 824-9374. Single Copies (877) 824-9374 Reprints Laura Picariello (732) 723-0569 or lpicariello@crain.com To find a date a story was published (313) 446-0406 or e-mail infocenter@crain.com Crain’s Detroit Business is published by Crain Communications Inc Chairman Keith E. Crain Vice Chairman Mary Kay Crain President KC Crain Senior Executive Vice President Chris Crain Secretary Lexie Crain Armstrong Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000

Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Contents copyright 2018 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is prohibited.

C R A I N ’ S D E T R O I T B U S I N E S S // J A N U A R Y 1 5 , 2 0 1 8

THE WEEK ON THE WEB

RUMBLINGS

Turning pro could mean Detroit City FC games in winter weather

Charity preview afterglow shifts to free format

JANUARY 5-11 | For more, visit crainsdetroit.com

ast Monday's decision by the North American Soccer League to switch to an August-June schedule potentially complicates semi-pro Detroit City FC’s plan to transition to a professional league. NASL said in a statement that because of its ongoing legal battle over its status with American soccer's governing body, it will move to a season that begins in August and finishes the following June — matching the international soccer community's season. The means if DCFC moves to NASL, it could play games in cold weather. Detroit City, which has acknowledged talks with NASL as a possible landing site this year, has played six seasons on a spring-summer schedule in the National Premier Soccer League. Any factors that could depress attendance is a worry for teams because they rely primarily on ticket sales and game-day revenue in absence of the mega-dollar TV contracts enjoyed by major pro sports leagues. Detroit City's 2017 schedule of exhibition and league matches through the playoffs lasted from April through August. It averaged 5,398 fans per match, its best gate ever, at its home pitch, Keyworth Stadium in Hamtramck. The proposed NASL season would run Aug. 11 through June 1, 2019. That more closely aligns with many leagues in Europe that soccer insiders say American leagues should match to allow better player movement among leagues. The NASL announcement made no mention of a winter break, which is common practice in leagues with a similar schedule format. DCFC CEO Sean Mann noted in an emailed statement to Crain’s that the team isn’t an NASL member and he’s not yet familiar with the details of the league’s schedule switch. He did offer some speculation of how it could play out. “I would suspect considerations are given to teams north of a certain latitude,” he said. “And in reality right now, the Major League Soccer schedule runs from first of March with playoffs ending in mid-December. I suspect this wouldn’t be far off from that but with an extended break in the middle of the season.” NASL has five teams — Miami, Indianapolis, New York Cosmos, Puerto Rico and Jacksonville, Fla. — and will add two California teams (San Diego and Fullerton) this year. The league lost its North Carolina club to the rival USL and its San Francisco team folded, raising questions about NASL’s future. NASL said it’s making the schedule switch because of its ongoing legal feud with the governing body of American soccer, the same situation that has delayed DCFC’s move to the pro ranks. “Due to the decision of the United States Soccer Federation to revoke the NASL’s Division II sanctioning, the NASL will be unable to operate the 2018 Spring Season,” the league said.

BKV GROUP

A new 288-unit apartment development on a vacant Grand Circus Park site downtown is expected to be ready for partial occupancy late this year. The City Club Apartments-Central Business District Detroit apartments on the site of the former Statler Hotel is being developed by Farmington Hills-based City Club Apartments.

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

500

The approximate number of watches a former Shinola/Detroit LLC employee stole, according to a plea agreement. Judith Walker pleaded guilty to federal wire fraud charges.

The number of locations Planet Fitness plans to open in metro Detroit under its aggressive expansion plan. One will be in downtown Detroit near the riverfront.

$320.6M

The worth of an all-stock deal Troy-based Crestmark Bank has struck to be acquired by South Dakota-based bank Meta Financial Group Inc.

BUSINESS NEWS J The Detroit Lions introduced a mobile app for food and beverages designed to help fans avoid lines at the concession stand. J The Detroit Police Leadership Academy, a new executive development program in Wayne State University’s Mike Ilitch School of Business, launched with the goal of helping the city’s police department run more like a business. J Topgolf International Inc. broke ground on a 65,000-square-foot, $12.5 million entertainment complex on 16 acres of property in Auburn Hills, with completion expected next winter. J Masco Corp. acquired Cleveland-based Kichler Lighting in a move to expand its reach into residential lighting. The Livonia-based company had moved its headquarters in July from Taylor to a 91,220-square-foot complex in Livonia. J Griffin Claw Brewing Co. is about a month away from finishing its new brewing facility in Rochester Hills. Space constraints and construction at its Birmingham headquarters last year forced the company to scale back production and plan to expand. J Ann Arbor-based May Mobility plans to double its workforce to 40 employees and expand operations this

year after the startup licensed technology it hopes will help steer its autonomous fleet to market. J Robert Bosch GmbH completed the sale of its starter and motor generator division to China’s Zhengzhou Coal Mining Machinery Group and China Renaissance Capital Investment. J A new executive team was named to lead the newly unified system composed of Trinity Health’s two regional systems, Mercy Health and Saint Joseph Mercy Health System. The new statewide health system, which hasn’t been named, includes eight hospitals and employs more than 22,500 with a medical staff of nearly 4,000 physicians. J Southfield-based Fox Sports Detroit will broadcast seven Detroit Tigers games on the spring training schedule and WXYT 97.1 FM will air 20 on radio. The exhibition schedule opens Feb. 22 against Florida Southern College in Lakeland, Fla. J Uber agreed to be the official rideshare partner of Little Caesars Arena. A designated pickup area and drop-off zone is being established on the West Fisher Service Drive, between Woodward and Park avenues. J Ann Arbor-based SkySpecs Inc., whose software allows for the automated inspection by drones of a variety of infrastructure, including bridges and wind-turbine blades, announced last week that it has closed on a Series B funding round of $8 million and plans to expand international operations. J Businesses are being advised to fortify their cybersecurity in the face of Spectre and Meltdown bugs that affect processing systems for personal computers and smartphones. IT professionals at Wayne State University and Novi-based Red Level Networks LLC said they have begun to beef up their security with updates provided by Microsoft to patch up one of the exposed vulnerabilities on its devices. J The three casinos in Detroit reported $1.4 billion in aggregate revenue last year, a 1.1 percent increase over 2016 revenue totals. J The 23rd annual TigerFest is scheduled for Jan. 27 at Comerica Park, featuring activities and a roster of current and former Tigers, including incoming manager Ron Gardenhire, former skipper Jim Leyland and favorites Miguel Cabrera, Nicholas Castellanos and more than 30 other former or current players. J Economist Diane Swonk, a Livonia native, has joined Chicago-based Grant Thornton LLP, where she will be adding her brand of economic forecasting to their services.

ttendees of the North American International Auto Show Charity Preview next week will have a new perk this year: Their ticket will also get them into an afterglow at Cobo Center. The Detroit Auto Dealers Association has shifted its Studio 25 afterglow, which came at an additional $150 per person last year with drinks, food, multiple stages of entertainment, cabanas and aerial performers, to a more casual event open to all charity preview attendees for no additional charge. The new afterglow, called After 9, will offer a scaled-back party with tables and lounges, cash bars and food and performances by The Four Tops and Your Generation In Concert. It won’t be as “over the top” as Studio 25 was, said Max Muncey, public relations director of the auto show. Studio 25 had a good run for five years, Muncey said, “but we thought the scaling back was a good value-add” for charity preview ticket holders. Between the afterglows hosted by local nonprofits and the corporate events around the city, there are plenty of parties, Muncey said. “As opposed to ... competing with them, we thought let’s try something

new this year,” he said. Studio 25 broke even last year, Muncey said, after selling out every cabana and sponsorships. But shifting to a more casual format at no added fee wasn’t based on the financials, he said. Muncey said he doesn’t see the free afterglow as competition for the charity afterglows hosted by nonprofits including The Children’s Center; those events will come with dinner and other amenities After 9 won’t offer at high price tags that benefit the charities. “If you’re a follower of a charity, you’re going to go to (that) afterglow,” Muncey said. Muncey declined to say how many charity preview tickets have been sold so far, only that ticket sales are up. Tickets for the Jan. 19 preview are $400, the same as last year. Of that, $390 is tax-deductible. Attendees can designate one of eight children’s charities to benefit from the proceeds of their ticket. The black-tie event has raised more than $112 million for charity since 1976, the DADA said. Last year, nearly 13,000 tickets were sold to the event, which grossed $5.18 million and netted $4.59 million.

MOTOR CITY PAINT LLC

Motor City Paint LLC’s new exhibit at the Detroit Historical Museum offers guests a chance to win prizes in exchange for naming paint colors.

Names sought for 25 new Detroit-inspired paint colors M

otor City Paint LLC’s new exhibit at the Detroit Historical Museum offers guests a chance to win prizes in exchange for their creative minds. Showing off 25 new paint colors inspired by Detroit’s architectural history, spread across a 40-foot wall, the exhibit and contest seeks viewers to suggest Detroit-themed names that guests will be allowed to vote on. Motor City Paint will choose the top vote getter to market the colors as part of its Authentic Detroit Historical Paint Colors line set to launch later this year. CEO Brian Eisbrenner hopes the exhibit will foster a connection with the city’s history. “We wanted to preserve these colors and bring them forward into the next age of innovation and industry in Detroit,” he said. “Having them named by local people is our opportunity to bring that important perspective to life.” Winners will win a $50 gift card,

while all entries will be included in a drawing for the grand prize that includes a $1,000 paint job for a business or home. The grand prize can cover paint and labor costs, Eisbrenner said. Eisbrenner hopes to get 1,000 entries but says he does not know what to expect. The Detroit Historical Society, which owns the museum, will run the exhibit through Feb. 28. “History walks with us and often informs the steps we take,” Director of Exhibitions and Collections Tracy Irwin said in a statement. “Understanding where we came from helps us make more informed decisions as we move forward.” The colors, inspired by a tour of city buildings using a spectrometer, will be a part of a new line of 75 paint colors sold at Motor City Paint stores in Shelby Township, Rochester and Grosse Pointe Woods. The 50 other colors will be named by Motor City Paint’s 21-person staff, Eisbrenner said.

LET YOUR MIND WANDER. Industry Preview allows you to connect and share insights with nearly 40,000 automotive professionals and analysts representing over 2,200 companies from around the world. This unique competitive benchmarking and professional development opportunity brings together the key individuals responsible for the cutting-edge vehicles, technologies and services on display at the North American International Auto Show. With the addition of AutoMobili-D, attendees to Industry Preview are able to experience the latest mobility-focused technologies and innovative platforms from global automakers, suppliers and startups, addressing autonomous driving, connected car, e-mobility, mobility services and smart cities. FOR MORE INFORMATION AND TO PURCHASE INDIVIDUAL TICKETS TO THIS EXCLUSIVE COLLECTION OF TECHNOLOGY & AUTOMOTIVE COMPANIES, VISIT NAIAS.COM Have a larger group? VIP Packages are available for groups of 20 or more. For further information contact Blake Govan at The Fulkerson Group at 248.388.9398, Blake@fulkersongroup.com. Cobo Center â&#x20AC;&#x201C; Detroit, Michigan January 17 â&#x20AC;&#x201C; 18, 2018