Crain's Detroit Business, Jan. 22, 2018 issue by Crain's Detroit Business

How Ford plans to use its Corktown site Page 3

Editorial: Simon, MSU board members need to go Page 8

JANUARY 22 - 28, 2018 | crainsdetroit.com HEALTH CARE

REAL ESTATE

Amazon loss doesn’t mean vision’s end

DMC Children’s plans own unit for sterile processing By Jay Greene jgreene@crain.com

Kirk Pinho

kpinho@crain.com

Last month, a mammoth vision for a joint Detroit-Windsor second Amazon.com Inc. headquarters campus was unveiled. Dozens of flashy new buildings, complete with rooftop green space and topiary dogs, were conceived over the course of several weeks.

It was a proposal that would have changed the shape of vast swaths of downtown Detroit. Now that Amazon has decided Detroit isn’t among the 20 finalist cities, will it join a litany of other grand visions for Detroit that failed to become reality? In Detroit, two of the projects — by far the largest in terms of acreage and scale — have actually

been in the works for years and will probably come to fruition in some form or another. Others seem likely to exist only in the pages of the Amazon bid. What follows is a Crain’s analysis of what happens with a monumental plan for building construction since its primary target, Amazon, thwarted the city after a 4 1/2-month courtship.

Wayne County Consolidated Jail site This property, plus a few others on Gratiot Avenue, had been pitched to Jeff Bezos’ team as a key part of an Amazon HQ2 with two renovated buildings and 15 new ones. The property, which has sat SEE PROJECTS, PAGE 20

Detroit’s East Riverfront area.

LARRY PEPLIN FOR CRAIN’S

RESTAURANTS

New restaurant planned for top of RenCen Need to know

By Kurt Nagl

Opening planned for late fall

knagl@crain.com



General Motors Co. has signed a new tenant for the 71st and 72nd floors of the Renaissance Center, formerly home to the Coach Insignia restaurant. James Beard Award-winning chef Shawn McClain is planning to open a new restaurant and bar in the iconic downtown Detroit skyscraper to create a “culinary destination” appealing to both fine and casual diners. “It’ll be very unlike what it has been before,” McClain said. “The reinvention aspect is hugely important. We definitely don’t want to be a onetrick pony.” The restaurant will encompass

 To feature “much larger” bar, more flexible space

crainsdetroit.com



To appeal to casual and fine diners

about 23,000 square feet and include a “much larger” bar than before, as well as flexible space for a range of events, said Claudia Killeen, manager of Renaissance Development for General Motors. Killeen said a search for a new tenant began shortly after Coach Insignia closed last January. It opened in 2004, replacing The Summit, the original restaurant that featured a revolving floor. Vol. 34 No. 3

$5 a copy. $169 a year.

Killeen and her team narrowed a list of 25 potential restaurateurs across the nation before a meeting with McClain at one of his restaurants in Las Vegas all but sealed their decision. “It was so beautiful and comfortable that we didn’t want to leave,” she said. Build-out of the new restaurant is expected to start in March, with a late fall opening, McClain said. While details are still being hashed out, the “DNA will be the same” as his other restaurants but the “execution will be brand new,” the chef said. It will include “great food and a great wine and mixology program.” SEE RESTAURANT, PAGE 18

James Beard Award-winning chef Shawn McClain is planning to open a new restaurant and bar in top floors of the Renaissance Center.

FOCUS

ESTATE

Special Report: Women in Real Estate

NEWSPAPER

WOMEN IN REAL

SEE STERILE, PAGE 17

INSIDE

, 2018 // J A N U A R Y 2 2 OIT BUSINESS CRAIN’S DETR

DMC Children’s Hospital of Michigan is building its own sterile processing department for surgical instrument cleaning, separating it from Detroit Medical Center’s downtown centralized department that in 2016 was found in violation of multiple federal infection control regulations. Those findings came amid a series of reports of dirty surgical instruments in DMC’s operating rooms that went on for years. CEO Luanne Ewald of Chil- Need dren’s Hospital to know told Crain’s that  DMC Children’s the main reason Hospital to separate pedi- separating sterile atrics from adult processing surgical instru- department ment cleaning is  DMC’s to improve effi- centralized ciency, patient department was outcomes and to found in violation use the best ster- in 2016 ile processing  Children’s has a practices. “It has nothing temporary to do with the department in ability to clean mobile unit i n s t r u m e n t s ,” Ewald said. “Cleaning and sterilizing will be done as one process.” After a series of improvements and inspections over a nine-month period, DMC last May was informed by the Centers for Medicare and Medicaid Services that DMC’s central sterile processing department was in full compliance with federal regulations. DMC hospitals cited were Children’s, Detroit Receiving, Harper-Hutzel, and Barbara Ann Karmanos Cancer Center, which is owned by McLaren Healthcare Corp. in Grand Blanc. The four hospitals all used the central sterile processing department in the lower level of Receiving Hospital. DMC’s other two hospitals, Huron Valley-Sinai Hospital in Commerce Township and Sinai-Grace Hospital

<< Men dominate real estate development, but women make inroads. Page 10 HOTO

GETTY IMAGES/ISTOCKP

ence inroads persist Real real women make estate development, but Men dominate

INSIDE THIS SECTION JENIFER ACOSTA

11 N

SAUDA SHAKOOR AHMAD-GREE STACY FOX SUSAN HARVEY

11 12 12

12 said. “If LISA JOHANON ing to be a factor,” Harvey graduate, 12 you’re a young college MAYS or famine ... SONYA Need to know 14 (real estate can be) feast Kirk Pinho 32 percent of real or kids and SHANNON MORGAN J Women make up just If you have a family kpinho@crain.com 14 stable pay to was estate development jobs SUSAN MOSEY you’re trying to have Years after Susan Harvey the tough career 14 to lead job stability pay the mortgage, it’s a J Barriers include training, hired in the mid-1990s KELSEY CG VON WORMER into and be successful.” of Ashley break office to opportunity of 15 Township Canton few real es- AMELIA PATT ZAMIR in- and awareness In addition, there are real estate Capital, a New York City-based college programs, so space pow- J We interviewed 10 women tate-specific warehouse and and dustrial a career opt sechad brought developers about challenges many don’t think of it as It’s not just the developmen erhouse, the man who Heather Greene: industry Harvey: con- opportunities would, say, accounting Susan estate one they real the as tion broad confided the of tor her on board Industry needs the study Tough career That she was or biology, for example. that’s dominated by men, broader conversation cern he had at the time: to change. is, for most people, of property/ in the should be a to break into. estate percent into “Real successful be women Forty-four to “too nice” bringing more up doing,” says. while estate devel- about something that you end asset managers are women, pomale-dominated real the industry. developers” are needed. of the brokerage of us, point of female ng Harvey said. opment industry. me about only 29 percent by women. Real es“There aren’t enough “No one is really acknowledgi a “No one ever really told Jenifer Acosta, said. “I beShe’s proven him wrong. that it sitions are held there is a problem,” she how was blank,” said estate development or positions are also over“His only reservation was tough 34-year-old developer focused on a strong num- real Acosta. “It is tate finance held by men, with just lieve there is probably big was an option,” said Bay City. I going to stand up to these if people whelmingly that would be interall, 35 vice presi- projects in ago, it was ber of women know how to get perceived as an option courses on 34 percent held by women. In men,” said Harvey, senior “Seven or eight years don’t positions are portfolio of have the chance to take the only fe- ested but percent of real estate dent of the office, the the norm for me to be find it earlier on.” men,” said there.” y women in the U.S. ne from 3 million to 20 rs it, and they would

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 2 2 , 2 0 1 8

MICHIGAN BRIEFS

INSIDE

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

State Legislature overrides Snyder veto, OKs tax bill

The Republican-led Michigan Legislature voted last Wednesday to override Gov. Rick Snyder’s veto of a speedier tax cut for those who trade in their car for a new one, the first override in his tenure and just the fourth in the last 67 years, the Associated Press reported. Senate Majority Leader Arlan Meekhof said the “timing was right” — the same day the chamber approved a bill to keep intact and boost Michigan’s personal tax exemption, which is at risk of being eliminated under the recent federal tax overhaul due to the way the state tax code is linked to the U.S. code. He and House Speaker Tom Leonard downplayed any concerns that the override will cause a rift in their relationship with the Republican governor. “I’m more focused on the money that the taxpayers send us — how much more of it should be put back in their pocket,” said Meekhof. Senate Democratic Leader Jim Ananich said the override vote was “long overdue.” The Senate voted unanimously to override Snyder. The House voted 8523 — more than the two-thirds support needed. Lawmakers had been seriously

considering an override since July, when Snyder turned down legislation to accelerate the sales tax break for car buyers. He cited “additional financial strain” for the state and said the bills conflicted with a previous compromise to phase in tax relief for those looking to offset the cost of an automobile or RV with a trade-in. In response to the override and senators’ separate passage of a larger tax cut proposal, Snyder said economic growth under his watch has allowed the state to phase out taxes on business equipment, increase a tax exemption for homeowners and boost spending to improve roads. But those laws had a “payment plan,” he said in a statement. “Changing the tax code without a plan to pay for it challenges the conservative fiscal responsibility of the past seven years,” Snyder said. Overrides are rare, having only occurred previously in 2002, 1977 and 1951.

Jobless insurance tax rates to drop

Unemployment insurance tax rates paid by Michigan employers in 2018 are projected to drop 4.5 percent from last year as the state’s economy rebounds. Businesses are expected to pay an estimated $403.20 per employee this year, compared to $422.10 last year, according to the Talent Investment

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KEITH CRAIN

OPINION

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MICHIGAN LOTTERY

A screenshot shows Michigan Lottery’s new website, which is more simple and emphasizes mobile use over traditional computer use. It went live Wednesday morning but was then taken down and is expected to relaunch in the future.

Agency, which oversees the state’s unemployment insurance and workforce development offices. The decrease is being attributed to the cut in individual employers’ tax rates, higher wages and the healthy balance of the unemployment trust fund, said Michelle Beebe, senior deputy director of the Talent Investment Agency. A lower unemployment rate means that the state is paying out less money from the fund, Beebe said. Michigan’s unemployment rate was 4.6 percent as of November, ranking 35th in the nation, according to government statistics. As of June, the average individual

collected 12.2 weeks of unemployment benefits before returning to work, compared to 14.7 weeks 10 years ago, according to the Talent Investment Agency.

Lottery’s new website a no-go on first try

Michigan Lottery launched a refreshed website last Wednesday morning, but it didn’t go as planned. Users of the new MichiganLottery.com experienced slowdowns after the change-over from the old site, lottery spokesman Jeff Holyfield said. “We were getting calls, emails ... from players saying the website

16 8

RUMBLINGS

WEEK ON THE WEB

wasn’t responding well,” he said. The project team took down the site for a couple minutes and tried to fix the issue, but it didn’t immediately work. It then reverted to the old site so players could log on as usual. “As near as we can tell, we’ve caused minimal disruption and inconvenience to our players,” Holyfield said. Michigan Lottery is shifting from the contractor that previously ran its site, Southfield-based HelloWorld (which Dentsu Aegis Network purchased in December), to Ann Arbor-based Interaction Gaming LLC for its new site. The updated site concept is mobile-first, because Michigan Lottery is seeing a growing number of users logging on from their smartphones and other mobile devices, Holyfield said. There isn’t an estimate available yet for when the new website will go live again.

Cool Places to Work in Michigan returns in 2018.

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

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

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

MANUFACTURING

SPORTS BUSINESS

How Ford plans to use its new Corktown digs

“From a mindset standpoint, it was a really nice fit with how we’re thinking … about the future of battery electrics and autonomy.” Sherif Marakby, vice president of autonomous vehicles and electrification for Ford

Ford is taking over a former hosiery factory in Detroit’s Corktown neighborhood. By Chad Livengood clivengood@crain.com

The business strategy of Ford Motor Co.’s big bet on a future of selling electric and autonomous vehicles will be devised inside a former hosiery factory in Detroit’s Corktown neighborhood — a move that was driven both by the automaker’s ambitions to transform urban mobility and its employees’ desire to work in an urban setting.

Need to know

Ford plans to embed its “Team Edison” at The Factory building in Corktown 

 Team to develop business case for electric, autonomous vehicles 

Corktown seen as a big advantage

Inside the multi-section building at 1907 and 1927 Michigan Ave. called The Factory, Ford plans to embed its

“Team Edison” group of employees who are charged with developing the business and strategy for rolling out 16 fully electric vehicles by 2022, said Sherif Marakby, vice president of autonomous vehicles and electrification for Ford. “From a mindset standpoint, it was a really nice fit with how we’re thinking … about the future of battery electrics and autonomy,” Marakby said in an in-

terview last week with Crain’s at the North American International Auto Show. The Dearborn-based automaker’s purchase of The Factory building marks the biggest re-engagement with the city where Henry Ford invented the assembly line a century ago since the last Ford workers left the Renaissance Center nearly 20 years ago. SEE CORKTOWN, PAGE 21

OBITUARY

Skidmore Studio owner Tim Smith remembered for inventive spirit By Bill Shea

bshea@crain.com

Tim Smith, who bought the advertising and design firm Skidmore Studio and kept its doors open during the recession by moving it to downtown Detroit in 2011, died Tuesday, the company said. He was 54. Smith, who also was the firm’s CEO, died from “a cardiac arrest incident,” Skidmore President Drew Patrick said. “It’s a shock to all of us,” Patrick said last week. In addition to running the boutique

design firm, Smith in 2016 published the book Dare Mighty Things: A Field Guide for Millennial Entrepreneurs. His agency in recent years specialized in marketing to the millennial generation. Smith bought the agency outright from Mae Skidmore, daughter of late owner and founder Leo Skidmore, in 2009. He had been hired to oversee the agency’s client diversification in 2001, then acquired a 10 percent equity stake in 2005 and became president in 2007. SEE SMITH, PAGE 21

Tim Smith was CEO of Skidmore Studio based in Detroit.

JACOB LEWKOW FOR CRAIN’S

Super Bowl, Olympics will rake in revenue for WDIV By Bill Shea bshea@crain.com

February will be a lucrative month for Detroit NBC affiliate WDIV-Channel 4. For the first time in the same year, the network will be home to both the Super Bowl and the Olympic Winter Games. The events command enormous audiences — and commensurate advertising rates. The Super Bowl is Feb. 4 in Minneapolis. The Olympics begin five days later in Pyeongchang, South Korea. The opening ceremony, which traditionally draws an especially large audience, is Feb. 9, and the games end Feb. 25. WDIV General Need Manager Marla to know Drutz declined to  Network gets discuss specifics both events for of advertising first time sales revenue from the Olym-  Massive pics and Super audiences means Bowl, but pre- revenue boost dicted they’d be  WDIV will have about as lucrative 15 hours of live as the month Olympics coverage ahead of a tight presidential race that floods local TV with political ads. The NFL title game and two weeks of the Olympics give WDIV a big audience that advertisers covet, and ongoing water cooler talk that brings viewers back each night, she said. “We’re able to take advantage of that from a monetary perspective,” she said. “This should make February a fantastic month for us.” WDIV began selling Olympic packages nearly a year ago, Drutz said, and the Super Bowl later in 2017. Some inventory for both is held back for clients who want in last-minute and are willing to pay a premium for it, she added. “We know someone will want them. Those spots always will be well used,” she said. The primary ad categories during the events include automotive, retail, entertainment, healthcare, banking and home improvement. Southfield attorney Mike Morse bought a 60-second Super Bowl spot, Drutz said, and Democratic gubernatorial candidate Shri Thanedar of Ann Arbor has also purchased airtime. Comcast, which owns NBC, has bought airtime locally for its products during the Olympics. WDIV has an inventory of a dozen 30-second in-game Super Bowl ads, with more in the pre- and post-game shows. It has hundreds of spots during the two weeks-plus of the Olympics. SEE WDIV, PAGE 18

MUST READS OF THE WEEK A roadmap for the next industrial revolution

Fournier: Membership has its questions

Cobo Center still negotiating new name

Automation Alley works to prepare for the ways the internet and ‘Big Data’ will irrevocably change manufacturing. Page 4

Crain’s publisher answers your questions about our new Membership program. Page 8

Convention center’s chief says it is in negotiations to sell naming rights. Page 22

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 2 2 , 2 0 1 8

GET A HEALTHIER OUTLOOK ON CHILDHOOD Tune in to WJR 760 AM for Caring for Kids, a monthly radio program focused on highlighting individuals and organizations addressing issues and efforts locally, regionally and nationally, that are having a significant effect on the health of the children in our area.

LISTEN TO WJR 760 AM LIVE ON: Saturday, January 27, 2018, 6 p.m. – 7 p.m. Sunday, January 28, 2018, 5 p.m. – 6 p.m. For more information and to listen to past shows visit:

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FORTY

Automation Alley also revealed a report last year at an event at the Detroit Institute of Arts.

AUTOMATION ALLEY

Automation Alley creates roadmap for manufacturing technologies By Dustin Walsh dwalsh@crain.com

Automation Alley is creating a roadmap for where the automotive industry’s largest players are headed and how the entire supply chain can adopt tomorrow’s manufacturing technologies. The Troy-based business association plans to release a study on Industry 4.0, the idea that we are in a fourth industrial revolution in which the internet and automation transforms manufacturing, on April 30 at an event at the Detroit Institute of Arts. The Automation Alley study is being conducted by several education institutions across the state in partnership with industry leaders. The participants include: University of Detroit Mercy, Lawrence Technological University, Central Michigan University, Oakland University, Baker College, Macomb Community College and Oakland Community College, along with Ford Motor Co., Comau, Siemens PLM, Eaton and Trumpf, among others. “We need to create a roadmap of where the bigs (automakers and large tier suppliers) are going and use that information to create actionable items so the entire ecosystem can adjust and know where to focus their efforts,” said Tom Kelly, executive director of Automation Alley. “This report will hopefully get everyone on the same page, which is incredibly important, because Industry 4.0 is the antithesis to the siloed thinking this region is used to.” The research will focus on eight core technologies defined in Industry 4.0: J The industrial Internet of Things J Robotics J Artificial intelligence J Big data J The cloud J Cybersecurity J Advanced materials and additive manufacturing J Modeling, simulation, visualiza-

Need to know

Automation Alley to create Industry 4.0 roadmap J

J Research to be carried out by local colleges and industry J

Report will be released in April

tion and immersion The challenge for the industry is that as the Fords and Lears and BorgWarners of the world continue to become more technologiTom Kelly: cally advanced Manufacturing is on the factory changing fast. floor, their supply base won’t be able to function within that framework. “The world (of manufacturing) is changing so fast, we can’t assume any company really knows where it’s headed,” Kelly said. “But based on what’s possible, we hope to help them turn this into action instead of stagnation.” Industry 4.0, otherwise called the fourth industrial revolution after mechanization, the assembly line and robotics, is a megatrend in manufacturing centered on the “smart factory” — using the internet and cloud computing to make decentralized decisions and create communication among machines, workers and the factory systems. This connectivity is designed to improve efficiency, quality and profits. According to a 2015 survey on Industry 4.0 by PricewaterhouseCoopers LLP, 72 percent of industrial companies surveyed expect to achieve a high level of digitization by 2020, compared to the 33 percent that said they already accomplished that level of digitization. Manufacturers expect to reduce operational costs by 3.6 percent while increasing efficiency by 4.1 percent annually through 2020 by using Industry 4.0

technologies and methodologies, according to the survey. The report is also designed to elevate Automation Alley’s reputation among the industry. When Kelly was promoted to lead the organization in August 2016, he tasked Automation Alley with growing from a local networking facilitator to global think tank for the industry. Automation Alley was created by Oakland County Executive L. Brooks Patterson in 1999, led by deputy county executive of Oakland County Ken Rogers at the time, who left his job at the end of 2014 to run the organization full time. Kelly joined Automation Alley in April 2014 as its director of entrepreneurship before becoming its COO in 2015. “When we built Automation Alley, we were more passive. ... Our strong membership viewed us as a place to meet and collaborate with other members. We want to be a place that helps them run their business,” Kelly told Crain’s in 2016. “Now that we have depth and scale, we think we’re mature enough to drive what the industry should be focused on. We can put our flag in the ground and say we should focus on new automation because change is coming ... rapidly.” Kelly said the new report will serve as Automation Alley’s first benchmark on whether it can achieve that goal. “Most of what we do, organizations like ours, is create a lot of information that we never turn into actual plans for the ecosystem,” he said. “It’s a heavy lift, and it will arc for many years, but we’re going to try this. We need to be judged on whether we can create actionable intelligence. We need a center, particularly one based in Michigan, that is an agitator for all that is possible in manufacturing and we want to be that place where these companies go to get that knowledge and shift into action.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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 2 2 , 2 0 1 8

Tax cut push ignites worries about education funding Gov. Rick Snyder used his first budget presentation to lawmakers seven years ago to lay out an ambitious plan to slash state spending by $1.2 billion and get rid of a slew of tax deductions and credits for individuals to help pay for a $1.8 billion tax cut to businesses. “Our tax system and budget system are both broken. They don’t work well. They don’t work right,” Snyder told legislators during his 48th day in office. “... I hope we all look back and say: ‘This was a defining moment.’” The resulting tax reform from Snyder’s first year in office is largely credited with improving the climate for doing business in Michigan — and bringing budgetary certainty to Lansing after years of financial and political turmoil. But eliminating tax breaks for pensioners and putting the kibosh on lowering the state’s 4.25 percent individual income tax rate back to its pre-Great Recession level of 3.9 percent has created financial pressures at the same time business leaders worry that the state’s education system is leaving its workforce unprepared for the current reality. And that political argument is boiling over once again on the eve of Snyder’s final State of the State address Tuesday as the governor tries to wrestle with lawmakers itching to deliver election-year tax cuts, business leaders sounding alarm bells about an unprepared workforce and signs of trouble brewing again in the state’s finances. Last week, the tensions over taxes and the lasting effect of Snyder’s 2011 reforms surfaced as the Republican-controlled Legislature overrode the GOP governor’s veto of legislation that will accelerate a sales tax break for vehicle trade-ins. The Senate also voted unanimously to increase the personal exemption from state income taxes from $4,000 to $5,000, a move that will lower the tax burden for small business owners that file through the individual income tax system for their limited liability corporations, partnerships and s-corporations. Lawmakers pursued the increased personal exemption to fix a flaw in the federal tax reform that would have wiped out the state-level tax break. But instead of following Snyder’s recommended $4,500 personal exemption, GOP senators pushed it higher, resulting in a $210 million tax cut that will save the average taxpayer about $30 a year. And then there’s Attorney General Bill Schuette, who is beating his Republican gubernatorial campaign drum for the GOP-controlled Legislature to use this opportunity to pare back the income tax to 3.9 percent. That’s the tax rate that was levied before former Democratic Gov. Jennifer Granholm and a split Legislature raised taxes in 2007 to shore up a deficit-ridden state budget. “This is the time” to cut taxes, Schuette said last week, contending Michigan’s pathway to prosperity is through lower income taxes. “It’s part of what we need to do to have Michigan grow,” Schuette said in an interview at the North American International Auto Show. But Snyder and Lt. Gov. Brian Calley — Schuette’s top opponent for the Republican gubernatorial nomination — are trying to put the brakes on the Schuette-led march to cut tax-

CHAD LIVENGOOD clivengood@crain.com

Need to know

JJSnyder faces pressure from fellow Republicans to cut taxes as he tries to cement a fiscal responsibility legacy JJState’s general fund faces increased strain from road funding and tax relief commitments JJBusiness leaders worried about education funding amid workforce preparation woes

es without corresponding reductions in spending — like they did in 2011. “Any changes we make in tax policy, we have to reduce the budget,” Calley said in a separate interview at the Detroit auto show. The state’s $10 billion general fund, the growth of which since Snyder took office is $2 billion below inflation, “continues to be under some pressure,” said Al Pscholka, the outgoing state budget director. And the general fund is about to start feeling a drain to pay for past commitments. Starting this calendar year, a $200 million tax break for homestead property tax credits gets restored —

“We’re in the bottom 10 percent (of educational achievement). That’s a fact. Are we going to accept that fact?”

after being eliminated in 2011 — and the Legislature’s gradual commitment of $600 million in general fund revenue for roads starts in October. In the next fiscal year, lawmakers have committed $150 million of general fund revenue toward roads, instead of the traditional method of paying for infrastructure strictly with fuel taxes and user fees. The general fund drain for filling potholes increases to $325 million in the 2020 fiscal year and rises to $600 million in 2021, when the Legislature’s $1.2 billion road funding commitment from 2015 will be fully funded. Add in the homestead property tax break and the new income tax exemption the Senate just passed, and there’s more than $1 billion in general fund reductions on the horizon. “It’s a good bite,” Pscholka said. The tax cut Schuette and House Republicans are advocating would reduce general fund revenue by another $1 billion — and likely leave the next governor with the same hole Snyder dug out of seven years ago. The general fund budget pressure leaves the state’s public universities and community colleges susceptible to further state disinvestment. About 78 percent of the state’s $1.5 billion funding for higher education comes from the general fund. “There’s only so many ways you can cut the general fund,” said Doug Rothwell, president and CEO of Business Leaders for Michigan, which has long called for more funding for higher education after sharp reduc-

Doug Maibach, executive vice president of Barton Malow Co.

tions under Granholm and in Snyder’s first year. All of this financial pressure on state resources is coming at a time of heightened concern that Michigan’s education system is falling behind other states with more educated workforces. A new education funding study came out last week that concluded the minimum annual cost to educate a child in Michigan is $9,590 — about $1,300 to $2,000 more than the state’s base funding. And that doesn’t include the higher cost of preschool, special education services, transportation, food service or capital repairs. The W.K. Kellogg, Charles Stewart Mott and Skillman foundations and nearly two dozen county intermediate school districts paid for the study, with hopes of pushing the next governor and Legislature to tackle the state’s education achievement crisis. Doug Maibach, executive vice president of Barton Malow Co., the Southfield-based construction firm, worked on the school finance project. Maibach’s focus was on improv-

ing the long-neglected skilled trades training in high school. Half of his family company’s 2,200 employees are skilled trades workers. Maibach is concerned the state’s education system is not well positioned to help Michigan compete for the tech jobs big internet giants like Amazon and Apple are planning to create in the coming years. “Honestly, we’ve got a ways to go,” Maibach told Crain’s. “We’re in the bottom 10 percent (of educational achievement). That’s a fact. Are we going to accept that fact? Or are we going to do something about it?” Gretchen Whitmer, the Democratic frontrunner for governor, said lawmakers eager to cut taxes are not paying attention to the state’s long-term needs to attract jobs of the future. She pointed to Detroit’s nowfailed bid for Amazon’s second North American headquarters and the 50,000 jobs the online retailer is promising to a state that meets its needs for infrastructure, mass transit, a highly skilled workforce and quality of life measures, like good schools for the children of the company’s employees. “Unfortunately, the debate going on in Lansing right now doesn’t move Michigan forward on any of those fronts,” Whitmer said in an interview. “In fact, it will be a setback. And it’s extremely short-sighted in the short term. But in the long term, it’s really foolish.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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DISCOVER THE BLUE WATER BRAND Crain’s NEXT is a new series of thought-leadership events aimed at discovering “What’s NEXT?” within key areas of the state.

Feb. 15, 2018 9:30 A.M. – 12 P.M.

Blue Water Convention Center, 800 Harker Street, Port Huron Tickets: $40

PANEL: THE SKILLED TRADES GAP A focus by the state of Michigan on four-year degrees has left an enormous shortage in the skilled trades. What’s the right mix and how do we get there? PANELISTS:

Jennifer Montgomery, President, McLaren Port Huron Hospital Donna Russell-Kuhr, Owner, PTM Corp.; Board Chair, Economic Development Alliance Dr. Deb Snyder, President, St. Clair County Community College

PANEL: THE BLUE WATER BRAND Branding is important, and the Blue Water region of St. Clair County has a strong one. But what’s the best way to leverage strengths when cities, regions and the state as a whole each have their own branding strategies? How can we all work together? PANELISTS:

Jeff Bohm, Commissioner and Board Chairman, St. Clair County Kathy Vertin, Co-owner, Riverbank and Snug Theatres and Inn on Water Street Mark Walker, Organizer, House committee for the National Antique and Classic Boat Show; Co-founder, Michigan Mutual Insurance Kelly Wolgamott, Director of Travel Marketing, Pure Michigan

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 2 2 , 2 0 1 8

Saudi oil company stakes its claim at Detroit auto show By Dustin Walsh

Need to know

dwalsh@crain.com

Amid the flurry to showcase future electric vehicle offerings at the North American International Auto Show in Detroit, one booth stands alone. Saudi Arabian Oil Co., otherwise known as Aramco, occupies more than 3,000 square feet on the main show floor at Cobo Center. The world’s largest oil company — Aramco generates more than 12.5 million gallons of oil and $1 billion in revenue every day — is at the Detroit auto show to remind people that oil is still very much part of the auto industry. “The internal combustion engine is here to stay,” said Mike Traver, commercial transport fuels team lead for Aramco’s North American research center in Novi. “Our research teams exist to make sure the combustion engine provides a sustainable future, cutting carbon emissions, etc.” Aramco’s Novi location opened in 2015 and employs 35, mostly engineers, to research advanced combustion engine technologies, Traver said. Its other research centers are in Paris and at its global headquarters in Dhahran, Saudi Arabia. Aramco dedicated its own engineering teams about 10 years ago to research fuel efficiency in support of the continued use of the combustion engine, but the public display highlights the threat posed by the increasing electrification of the automotive industry. Electric vehicle adoption has been relatively stagnant in the U.S. over the past dozen years, but is rising thanks to global efforts driven by federal initiatives to drop the internal combustion engine. In September, China announced it would ban gasoline and diesel engines in the future — joining the U.K. and France, which have pledged to ban those engines by 2040. By default, domestic automakers, who have been aligning global platforms for years, are pivoting toward electrification. Electric vehicle sales topped 1 million globally for the first time in 2017, according to Bloomberg. Detroit-based General Motors Co. expects to sell 1 million of its own electric vehicles by 2026 and Toyota Motor Corp. by 2030. However, Traver said internal combustion engines will make up 70 percent to 80 percent of the automotive market in 30 years, down from 99 percent today. Experts are slightly more skeptical. Researchers at the Massachusetts Institute of Technology predict combustion engines will be on 60 percent of light-duty vehicles, including hybrids, by 2050. Those figures still represent a major dent in Aramco’s future revenues. In response, Mohammad bin Salman bin Abdulaziz Al Saud, the deputy crown prince of Saudi Arabia, which owns Aramco, unveiled a plan to diversify Saudi Arabia’s economy away from oil. The plan, Vi-

JJSaudi Arabian Oil Co. is the largest oil company in the world JJKnown as Aramco, it occupies more than 3,000 square feet at Detroit auto show JJDisplay meant to remind oil still big part of auto industry

“The internal combustion engine is here to stay. Our research teams exist to make sure the combustion engine provides a sustainable future, cutting carbon emissions, etc.” Mike Traver

DUSTIN WALSH/CRAIN’S DETROIT BUSINESS

Saudi Arabian Oil Co., known as Aramco, occupies more than 3,000 square feet on the main floor at the Detroit auto show at Cobo Center.

sion2030, unveiled last year calls for an initial public offering of 5 percent of Aramco shares in 2018. It’s expected to be the largest IPO in history, valuing the oil company as high as $2 trillion — making it by far the world’s most valuable company. The Saudi government plans to invest the pro-

ceeds of the IPO into its public investment fund, which already owns stakes in Japan’s SoftBank, South Korea’s Posco Engineering & Construction Co. and Uber. The fund more recently announced business agreements with General Electric Co., Lockheed Mar-

tin and The Blackstone Group and plans to invest $40 billion into infrastructure projects, mostly in the U.S. While it’s somewhat ironic for Aramco to show a presence at the Detroit auto show, the oil company is not foreign to the U.S. Aramco was founded by Standard Oil of Califor-

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nia, now Chevron Corp., as the California Arabian Oil Standard Co. in 1933. The Saudi government purchased the company, after acquiring a majority of its shares, in 1980, moving the company to Saudi Arabia in 1988 and renaming it Aramco. Aramco pays royalties and an 85 percent tax rate to the Saudi government, which is why the country has become so wealthy in recent decades. So while Aramco sticks out amid the auto industry’s newest achievements, it’s still right at home in Detroit — for now.

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OPINION EDITORIAL

COMMENTARY

MSU board fails in its most vital duties

oards of directors at public universities — and publicly traded companies — have one primary obligation: to hire and fire the chief executive officer. They have another duty, too: To ensure that risks to the institution are minimized. In the Larry Nassar case, the board of trustees at Michigan State University has failed at both. MSU President Lou Anna Simon should have resigned by now — or been fired. At this stage of the game, the board chair, former retail executive Brian Breslin, and vice chair Joel Ferguson, should exit, too. On Friday, the board called for Attorney General Bill Schuette to lead an inquiry. That’s yet another mistake. Schuette is running for governor and any investigation could become a politicized process. So where does that leave MSU? The board should appoint an interim president whose reputation for integrity is stellar. A couple of names come to mind: former Gov. James Blanchard or former Grand Valley State University President Mark Murray. A new president can launch the much-needed investigation and begin the process of healing the university’s reputation. The Michigan Legislature and governor should consider this debacle a call for a constitutional change to appoint rather than elect the boards at the state’s three largest universities. (The Constitution also makes trustees members of the executive branch, so the governor could conceivably remove elected trustees.) Take a look at the MSU board. It has two trustees who are over 80 years old, Ferguson and former MSU football coach George Perles. Two others are former MSU football players. Could it be that athletics is at the heart of trustee interest? Or maybe voters just pick familiar names. Regardless, this board clearly was unprepared — or unwilling — to deal with the Nassar saga. Its failure to insist on a vigorous inquiry early on has increased the university’s potential liability in more than 150 lawsuits filed by Nassar’s victims against the university. (Penn State’s tab in the Jerry Sandusky case, with fewer victims: More than $100 million, paid primarily by insurance.) And in the midst of this scandal, what did the brain trust on the board do last month? They voted to give Simon a raise. At least 14 officials at MSU knew of accusations against Nassar that spanned two decades, according to a report last week by The Detroit News. At every turn, concerns of the victims were dismissed. Simon has had a long tenure at MSU, serving as provost before being named president. Long enough to shape the culture, a culture of inertia, inaction and indifference, a bureaucratic, CYA culture, on display for the world to see. The student newspaper at MSU called for her to resign last week. The students in this case know more than the adults on the board. It’s time.

Membership has its questions

wo weeks ago, we launched the Crain’s Detroit Membership program in this space, promising you more value from our journalism and our business services: “You’ve long trusted Crain’s to be a fair and credible source of business news, and now, with the new access and transparency that comes with Membership, we will be directly accountable to you.” The transparency and accountability part started within hours, when the first emails arrived from subscribers who were automatically enrolled into Membership — and from non-subscribers who had questions about the new program. Here’s a sampling from my inbox: “Will the opinion of readers, like myself, change or effect the structure of the Membership Plan?” (John Golembiewski of South Rockwood.)

Absolutely, John. Readers’ opinions shaped the structure of the Membership program that we just announced, and readers’ opinion will reshape it. Our Membership offerings will adapt as we learn from our mistakes, and as our readers’ needs evolve. Remember, this all began in March 2017 when we created the Inner Circle, a community of readers who valued Crain’s enough to advise us on how to make it better. More than 600 of you joined, three times more than we had hoped. In polls and focus groups, readers told us they want a deeper relationship with Crain’s and shared with us the programs and products that would bring them more value. Those opinions infused Membership. We’ll keep listening and adapting. “I am interested and would like to learn more about Premier Membership access.” (C.K.)

Thanks for writing. Here’s the deal: Our Membership team stands ready to answer your questions and (hopefully) sign you up for Premier Membership. You can reach them at customerservice@crainsdetroit.com or (877) 8249374. To me, the best things about this tier are regular access to Crain’s reporters and editors, and VIP treatment at events (preferred seating and access to our attendee lists for lead generation). Premier members get those two services atop of everything available in the

RON FOURNIER Publisher and Editor

other two tiers: J Classic Membership is the lowest price and still gives you more value: access to all print and digital editions, Member-only webinars, and discounts on events. J Enhanced Membership is our best deal. For a few more dollars, you get everything in the “Classic” tier plus full access to our lists and data, discounts on other Crain’s publications, and a growing roster of exclusive “Insider” newsletters written by our top reporters. Think of these new “Insider” emails as exclusive tip sheets: behindthe-scenes color and actionable information you can get only from the likes of Kirk Pinho, Chad Livengood and Sherri Welch. “This seems like a way to increase revenue by committing journalism. I truly hope it succeeds. For the record, I told (Crain’s) several years ago to raise the price to $100 per year and I would pay it.” (Mark Maisonneuve, Berkley)

One thing that we kept hearing from our surveys and focus groups was “You’re not charging enough.” Our rates have been flat for most of this century, which means our revenue has not kept pace with inflation at a time when the internet is already a threat to the media business model. So we determined what value people found in Crain’s, added more value via Membership, and decided to slowly raise rates to a competitive level over the next three to five years. We want to avoid sticker shock and to make sure you all actually find value in what we’re doing. I think you will. “With Premier Membership, I assume ‘exclusive access to Crain’s reporters and editors’ means you can call and chat with them?” (Mark Maisonneuve)

Crain’s reporters. Readers call us all the time, often to pitch stories. Our new plans are twofold. First, to schedule an annual open house so you can come to our office and mingle informally with reporters and editors. Second, to host a more formal annual session in which reporters and editors will meet readers in small groups to hear what’s on their minds. “Access for sale?”

That was the headline on a blog post by public relations executive Maryann Sabo, who read emails about our new business model and assumed we were undermining the independence of the Crain’s newsroom. “Ron,” she wrote, “say it isn’t so.” It isn’t so. The fact is that reporters and editors are already accessible to the public, including public relations professionals like Sabo who pitch stories for clients. You can call us, email us or even corner us in public and try to influence our coverage. There’s nothing wrong with that access. It’s healthy. It makes us smarter and more accountable. But, when the journalist’s work is at hand, reporters and editors choose what to cover and how to cover it, no fear or favor. What we’re doing via Membership for our most loyal readers is to organize and normalize access. You might legitimately question whether reporters and editors would be more inclined to listen to somebody paying more than $1,000 a year for the top-level Membership. This isn’t a new question. Media supported by advertising has always had to deal with this kind of conflict. The best newsrooms, and Crain’s is no exception, do not shy from writing negative stories about their advertisers if events demand it. Our Membership program is no different. The old rules apply: Our reporters and editors will remain ruthlessly independent. No fear, no favor. No doubt: Crain’s greatest asset is its journalistic integrity.

No. That wouldn’t be more value because you can already call and chat with

Ron Fournier is publisher and editor of Crain’s Detroit Business. Catch his take on business at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760.

state with incentives that would have taken decades to pay off. Time will tell on what sort of financial shape the winning city will be in after making those big commitments. It reminds me of a city vying for the Olympics: Say a prayer that you lose, because you will never be able to afford it if you win. Incentives are sometimes a little bit wacko. When you look at the more than $700 million in incentives that Alabama offered Toyota and Mazda to build a new assembly plant that will bring

4,000 jobs — a fraction of what Amazon promises — you get the idea of the cost of doing this kind of business. Here in Detroit, I was unbelievably impressed with the team Dan Gilbert and our mayor put together to compete for the Amazon site. Sure, we all wanted to win, because we are by nature competitive people. But I think we all won anyway, because we found our dream team for economic development. I can hardly wait for the next challenge.

Maybe we were a winner after all L

ate last week, the word went out that we did not make the cut for the next round of Amazon’s site selection process. Some surprising cities were on the list, including Columbus, Ohio, and Nashville. Interestingly, Amazon seemed to ignore Northern California, the country’s premier tech hub but a very expensive one. I’m here to say we might be a big winner in this sweepstakes, rather than a loser. We assembled an all-star team to seek Amazon’s HQ2, and it delivered

KEITH CRAIN Editor-in-chief

even if we lost. I can’t think of a project since the conversion of the auto busi-

ness to a war footing during World War II where so many folks in Detroit got together for the common good. I certainly hope that the powers that be are able to keep this group together for the next project. I have no idea what that will be, but I am sure there will be one, and sooner rather than later. For many of the competing cities, the incentives they have offered may well break the bank. I do not have any idea whether our offer was affordable, but maybe we are a bit lucky that we missed the boat and won’t saddle our city and

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LETTERS

Story caused confusion To the editor: The front page story about the Boys & Girls Clubs of Southeastern Michigan, headlined “Boys & Girls Clubs recruits CEO to help fix problems,” which appeared in the Jan. 15 edition of Crain’s, failed to mention that there are three separate Boys & Girls Club organizations in the Detroit metropolitan area. This has caused significant confusion among the stakeholders and supporters of the Boys & Girls Clubs of Oakland & Macomb Counties. The Boys & Girls Clubs of Oakland & Macomb Counties was named one of the top 10 clubs nationally by Boys & Girls Clubs of America in 2017. They serve more than 2,100 young people ages 6 to 18 with 400,000 hours of programming annually, in four locations in Royal Oak, Ferndale, Southfield and Washington Township. These programs have taken club members from the clubhouse to the White House, most recently when the clubs’ Youth of the Year, Alora Allen, visited President Barack Obama in the Oval Office. Among the clubs’ most significant accomplishments is that for the past 10 years, 99 percent of teen club members have graduated from high school, and none were involved in a teen pregnancy or a felony. Later this year, the Boys & Girls Clubs of Oakland & Macomb Counties will celebrate 60 years of service to children and teens of our communities. Jeanne Towar Lifetime Trustee Boys & Girls Clubs of Oakland & Macomb Counties

Other Boys & Girls Clubs thriving To the editor: After reading the article detailing the concerns about the Boys & Girls Clubs of Southeastern Michigan in the Jan. 15, 2018, edition of Crain’s Detroit Business, it is important to our organizations, donors, club members and their families, and the greater community to understand that there are three separate organizations in Metro Detroit. The Boys & Girls Club of Troy and the Boys & Girls Clubs of Oakland & Macomb Counties are thriving organizations focused on delivering important programs and services to youth. We positively support the vision that is emerging for the Boys & Girls Clubs of Southeastern Michigan and support their efforts to focus on the needs of the youth they are charged with serving. Maureen Finnigan President, Board of Directors Boys & Girls Club of Troy Bart Tinsley Chairperson, Board of Trustees Boys & Girls Clubs of Oakland & Macomb Counties Send your letters: Crain’s Detroit Business will consider for publication all signed letters to the editor that do not defame individuals or organizations. Letters may be edited for length and clarity. Email: rfournier@crain.com

Connectivity can be an economic driver in the U.P.

hy is it that I can get better internet and cell phone connections in rural China than I can in some spots in rural Michigan — especially the UP? This thought hit me as I recently traveled through rural China, where I was as isolated from civilization as a person can be. Large sections of Michigan’s Upper Peninsula currently have no access to broadband internet. This is simply unacceptable. Lack of high-speed internet and cell coverage are still an anchor on parts of our state. Access to broadband internet is increasingly necessary to succeed in today’s world.

OTHER VOICES Tom Watkins

While Michigan used to be at the forefront of internet access and use compared to the U.S. average, internet use has stagnated since 2009, putting Michigan at average in 2016, according to a report by the Institute for Pub-

lic Policy and Social Research at Michigan State University. We need the equivalent of The Rural Electrification Act of 1936, which provided federal loans for the installation of electrical distribution systems to serve isolated rural areas of the United States. Given the rural nature and spotty population of rural Michigan, there is little free market rationale for private investors to lay the infrastructure necessary. Connect Michigan, in partnership with the Michigan Public Service Commission, is working to ensure that all can experience the benefits of broadband.

This past March, Northern Michigan University received a $6.5 million state grant by the Michigan Strategic Fund Board to expand its Educational Access Network. The funds were matched by $3.2 million from Northern Michigan University to equip 64 cities and townships in the Upper Peninsula over a two-year period. These creative funding mechanisms are good starts to connect the UP to the 21st century knowledge economy — but more needs to be done. Tom Watkins is former Michigan state superintendent of schools and is now a US/China consultant.

Trust goes both ways When Pomeroy looks to build senior living center, Flagstar forges ahead As a Detroit-area real estate developer for more than 40 years, Keith Pomeroy has worked with many different banks as he earned a reputation for expertise in health care related real estate. So when Ray Maffezzoli, senior vice president in commercial real estate at Flagstar Bank, heard that Pomeroy was looking for financing to develop Beacon Square, a senior living facility in Orion Township, he was intrigued. Creating senior living is a complex process, with concerns about security, operations and standard of living. Maffezzoli and Pomeroy began discussing the project in 2014. When many banks shied away from this sort of business Flagstar forged ahead. “We made a conscious decisionto develop a specialty in this area,” Maffezzoli said. For Pomeroy, Flagstar made a lot of sense. “They were the most supportive lender, understanding the vision for a project that has three distinct housing options for seniors: independent living, assisted living and memory

care,” said Keith Pomeroy, chairman of Pomeroy Living LLC. “They grasped the need and were aggressive in supporting the use. And their servicing was great.” Maffezzoli appreciates the trust that Pomeroy has put in Flagstar. “If you’re doing a multimillion-dollar construction deal, you can not afford to have a bank that doesn’t know what they’re doing or has a hard time with process draws. “You need a bank that can execute that construction loan flawlessly. We process those draws in a timely manner— his comfort in our ability to execute was key.” Flagstar also appreciated working with Pomeroy. “People like Keith show tremendous integrity,” Maffezzoli noted. “To be able to provide solutions for them is extra gratifying.” Pomeroy appreciates it. “Flagstar were great communicators. They were timely in their processing of all draws,” he said. “We would be happy to work with them on our next project.”

Beacon Square opened this fall in Orion Township.

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

MEMBER FDIC

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INSIDE THIS SECTION

Men dominate real estate development, but women make inroads Kirk Pinho

kpinho@crain.com

Years after Susan Harvey was hired in the mid-1990s to lead the Canton Township office of Ashley Capital, a New York City-based industrial and warehouse space powerhouse, the man who had brought her on board confided the one concern he had at the time: That she was “too nice” to be successful in the male-dominated real estate development industry. She’s proven him wrong. “His only reservation was how was I going to stand up to these big tough men,” said Harvey, senior vice president of the office, the portfolio of which has gone from 3 million to 20 million square feet under her leadership. Men still dominate the field of real estate development. It’s estimated that 68 percent of its positions are occupied by men. Yet women in Detroit, its suburbs and across the state have been making some inroads. Ten of them are featured in this section. Most of them agree that there

Need to know

JJWomen make up just 32 percent of real

estate development jobs

JJBarriers include training, job stability

and awareness of opportunity

JJWe interviewed 10 women real estate developers about challenges and opportunities

should be a broader conversation about bringing more women into the industry. “There aren’t enough of us, point blank,” said Jenifer Acosta, a 34-year-old developer focused on projects in Bay City. “Seven or eight years ago, it was the norm for me to be the only female in a room of 30 men,” said Heather Greene, president of the board of CREW Detroit, a regional women’s real estate trade organization. “It was fairly common to be the only woman at the table. It does need to change.” Greene, a senior associate in the Berkley office of Chicago-based architecture firm Stantec Inc., said more “mentors or male champions

Susan Harvey: Tough career to break into.

Heather Greene: Industry needs to change.

of female developers” are needed. “No one is really acknowledging there is a problem,” she said. “I believe there is probably a strong number of women that would be interested but don’t know how to get there.” Acosta and others say the barriers to entry for women in development range from the how many fields the industry touches — finance, construction, politics, real estate, architecture, to name just a few — to the inherently risky nature of the profession. “Real estate, in and of itself, as a career is volatile. I do think that’s go-

ing to be a factor,” Harvey said. “If you’re a young college graduate, (real estate can be) feast or famine ... If you have a family or kids and you’re trying to have stable pay to pay the mortgage, it’s a tough career to break into and be successful.” In addition, there are few real estate-specific college programs, so many don’t think of it as a career option as they would, say, accounting or biology, for example. “Real estate is, for most people, something that you end up doing,” Harvey said. “No one ever really told me about real estate development or that it was an option,” said Acosta. “It is perceived as an option if people have the chance to take courses on it, and they would find it earlier on.” One study by the CREW Network, the national umbrella for CREW Detroit, estimated in 2015 that just 32 percent of the American positions in the field are held by women, compared to 41 percent in Canada. However, that figure has been improving. It was just 20 percent in 2000 and rose to 30 percent by 2010.

JENIFER ACOSTA

SAUDA SHAKOOR AHMAD-GREEN

STACY FOX

SUSAN HARVEY

LISA JOHANON

SONYA MAYS

SHANNON MORGAN

SUSAN MOSEY

KELSEY CG VON WORMER

AMELIA PATT ZAMIR

It’s not just the development sector of the broad real estate industry that’s dominated by men, the study says. Forty-four percent of property/ asset managers are women, while only 29 percent of the brokerage positions are held by women. Real estate finance positions are also overwhelmingly held by men, with just 34 percent held by women. In all, 35 percent of real estate positions are held by women in the U.S. “A lot of us women in real estate see that we need more,” Acosta said. “Women see real estate differently in how they invest in it, how they hold on to it.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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SPECIAL REPORT: WOMEN IN REAL ESTATE “The advice I would give to anyone working to break into real estate development would be to pick a specific neighborhood and serve it.” Jenifer Acosta

Sauda Shakoor Ahmad-Green Company: S&S Development Group LLC Title: Owner Age: 39 Years in development/real estate: 13 Education: Pershing High School, University of Michigan undergraduate and Western Michigan University law degrees. Developments completed: JJFirst phase of Merrill Place, a 6-unit townhouse project at 8243 Merrill St. west of the Lodge Freeway and north of Grand Boulevard.

Developments in the works: JJThe $9.2 million second and third phases of Merrill Place, which are expected to begin in the spring. The project is anticipated to include 54 oneand two-bedroom units marketed to Henry Ford Health System staff, residents and medical students.

What led you to get into real estate development in the first place?

Jenifer Acosta Company: Jenifer Acosta Development Title: Real estate developer Age: 34

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Years in development/real estate: Two Education: Southern Illinois University, undergraduate; University of Miami, master’s; New York University, graduate certificate in real estate development. Developments completed: JJThe Times Lofts in Bay City, a $7.9 million redevelopment of a 115-year-old former newspaper building into 31 residential units at 311 5th St.

Developments in the works: JJThe Legacy, a $12 million project slated for completion in the fall that is turning the five-story Crapo Building in Bay City into 26 apartments, office space and a restaurant on Center Avenue. JJRedevelopment of the Bearinger

Building at 126 N. Franklin St. in Saginaw into a 76-room boutique hotel with 4,000 square feet of commercial and restaurant space, a $17.9 million project. JJAn $850,000 new-construction project turning a former gas station property in Bay City on Center Avenue into six residential units.

What led you to get into real estate development in the first place?

The focus on sustainability and community revitalization. After graduate school, I worked for an affordable housing development firm in Miami. Immediately, this sparked an interest in me that ended up turning into a Profiles by Kirk Pinho

passion. I enjoyed the multifaceted nature of the work. After I’d gone on to work for my family’s company, I was missing the satisfaction development offered. To make the leap, I began volunteering on community development boards, enrolled in a graduate program in real estate development and filed papers to start my own company. The diversity of my educational background offers a unique perspective on development.

Truly a by-chance situation, since I don’t come from a family of real estate developers and never had any formal training. While in law school I took a course on modern real estate transactions and during it the professor lectured on real estate title and title clearing. I found the subject very interesting, and during my last year of law school, while externing in the Illinois attorney general’s office in

Chicago, I decided to put that information to practical use. What sort of challenges, if any, have presented themselves as a woman developer?

“Being a minority female anything is bound to present challenges, but I’ve found development to be an extremely challenging area to navigate.” Sauda Shakoor Ahmad-Green

Being a minority female anything is bound to present challenges, but I’ve found development to be an extremely challenging area to navigate. Real estate development and construction is a heavily male-dominated business, and if I’m speaking honestly, an area of business not without its fair share of chauvinism. In 2005 when starting on my road to development and in my mid-20s, doors leading to information that would have potentially made the process easier for me were often closed as I was not taken seriously and disregarded by those with the power or resources to help. However, the lack of that early assistance inevitably made the results of my journey much more gratifying in the end. What advice do you have for women looking to get into the development industry in Detroit and/or the suburbs?

I would simply say that you must be dedicated to real estate development. It is not something you can take on with half commitment, and it is of the utmost importance to surround yourself with a trusted support system. A support system is what has made everything possible for me.

Real estate development is not a career path that you can take alone. And because the work and effort involved with preparing for and completing a project consumes a large part of your life and attention, the team you build to accomplish that end must be trusted.

The Miller Law Firm is pleased to announce the opening of our Detroit office.

What sorts of challenges, if any, have presented themselves as a woman developer?

The profession doesn’t have a great reputation. The challenge of real estate development, regardless of gender, is to build and maintain a credible reputation. It’s one thing to have integrity, but another for the community to trust your character. That’s only achieved through hard work and executing quality projects.

1001 Woodward, Suite 850

Melvin “Butch” Hollowell, Managing Partner, Detroit Office

What advice do you have for women looking to get into the development industry in Detroit and/or the suburbs?

The advice I would give to anyone working to break into real estate development would be to pick a specific neighborhood and serve it. Being dedicated to a community will foster greater cumulative impact. Projects in proximity to one another will increase the value of your portfolio. Make sure you’re passionate about the projects you choose to go after and tie into some of the collaborative networks of development professionals across the country.

Leaders in Complex Business Lawsuits and Class Action Litigation 950 West University Drive / Suite 300 / Rochester / Michigan / 48307

(248) 841-2200

www.miller.law

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 2 2 , 2 0 1 8

SPECIAL REPORT: WOMEN IN REAL ESTATE

Stacy Fox Company: The Roxbury Group

Soave Enterprises.

Title: Principal

JJRenovations to the adjacent Louis Kamper and Stevens low-income housing buildings downtown. They have a combined 165 residential units and plans are to include 9,000 square feet of retail space in an $18 million project.

Age: 64 Years in development/real estate: 12 Education: University of Michigan, both undergraduate and law degrees. Developments completed: JJThe David Whitney Building in

downtown Detroit, a $94 million redevelopment with 136 hotel rooms, 105 apartments and 14,000 square feet of retail and meeting space in a long-abandoned high-rise. JJThe Griswold, a $24-million residential addition with 80 apartments atop an existing 10-story parking deck at Michigan Avenue and Griswold Street downtown. JJThe Plaza, which turned a long-vacant Midtown high-rise into 72 apartments with 2,000 square feet of retail space in a $24 million project on Woodward Avenue that opened last year.

Developments in the works: JJThe Metropolitan Building, turning another long-vacant building on John R Street into the $34 million, 110-room Element Hotel with 5,000 square feet of retail space and a rooftop bar. A joint venture with Eric Means. JJElton Park, a $40 million first-phase

project in Corktown that is turning several blocks in the west downtown neighborhood into residential and retail space with more than 400 residential units and tens of thousands of square feet of retail space. In conjunction with Detroit-based

Title: Senior vice president Age: 57 Years in development/real estate: 35 Education: Michigan State University, Wayne State University Developments completed: JJWarren Business Center East, a

260,000-square-foot build-to-suit freezer building for Lipari Foods built on 18 acres on Bunert Road with 27 truck docks. JJLivonia West Commerce Center, a 1

million-square-foot distribution center for Amazon.com Inc. on a 49-acre site. JJTri-County Commerce Center in Hazel

Park that includes a spec-build 575,000-square-foot building on a 36-acre former horse racetrack site. The project is 80 percent leased on completion. Developments in the works: JJLivonia Corporate Center 1, a spec-build

170,000-square-foot industrial/distribution building that is under a 15-year lease on Schoolcraft Road. JJLivonia Corporate Center 2, a 740,000-square-foot industrial/distribution building on Schoolcraft. JJLiberty Park Commerce Center in Sterling

Heights, a 570,000-square-foot spec-build industrial/distribution project.

What led you to get into real estate

Years in development/real estate: 4 Education: Detroit Renaissance High School; University of Michigan (bachelor’s and law degrees).

What led you to get into real estate development in the first place?

JJSugar Hill Arts District project in Midtown, a $32 million mixed-use new construction with 84 residential units, 9,000 square feet of commercial space and a 235-space parking structure. JJEastern Market Gateway, a $106 million two-phase project with 400 residential units (20-25 percent affordable) and 25,000 square feet of retail space.

alize that vision. What advice do you have for women looking to get into the development industry in Detroit and/or the suburbs?

Don’t be afraid to think big, and don’t look for or expect special con-

“Find an organization that values your abilities and will help you enhance your skills.” Susan Harvey

sideration on account of your gender. Detroit desperately needs more capable, talented and hard-working entrepreneurs, and if there is any industry in any town that doesn’t care whether you’re a man or woman it’s real estate in this city.

What led you to get into real estate development in the first place?

My finance background, interest in the built environment and my passion for Detroit all led me to real estate development. Earlier in my career as a Wall Street investment

ban con — th hote As a mov wor ing f

Lisa Johanon

Company: Central Detroit Christian Community Development Corp.

Title: Executive director/housing director Age: 58 Years in development/real estate: 15 Education: Wheaton College, John Marshall Law School. Developments completed: JJA $1.55 million project to build 10 new homes in Detroit’s Piety Hill neighborhood. JJA $2.5 million project creating 38 homes in Detroit. JJForty-three single-family homes costing $500,000

What sort of challenges, if any, have presented themselves as a woman developer?

While the business climate has improved, sexism is alive and well for women in all careers. I find myself as the only female in business meetings 95 percent of the time and it is clear that women are meaningfully under-represented in the commercial (especially industrial) real estate industry. The most common challenge I face is overcoming the presumption in meetings that I am not a decision maker. Comments and questions are generally directed to the other men in my office in the first meeting of a new business relationship. Ultimately, this is easily overcome and does not generally represent an ongoing problem for me once relationships have been established.

Son

JJUniversity Meadows, 4500 Trumbull, Detroit, a $30 million, two-phase rehab and mixed-use new construction with senior affordable housing. A total of 53 renovated affordable-housing units and 88 new units are planned. The project also includes 7,500 square feet of commercial space.

What sort of challenges, if any, have presented themselves as a woman developer?

While I wish I could say that my career in real estate was initiated by design, it was actually a matter of circumstances at the time. Having recently graduated from MSU, at a time when the economy was struggling, I accepted a position more because I needed a job than because I had specifically sought out this exact opportunity. Within the first six months I recognized that the diversity of disciplines required to be successful in real estate suited my interests and abilities perfectly. I have worked in various areas of real estate ever since.

“R fin rel so na bu rel of ch wo ne

Developments in the works:

From my earliest positions both within government and the corporate sectors, I always had an interest in and responsibility for real estate acquisition and development. My business partner and I founded The Roxbury Group in 2005 in order to bring that experience to bear specifically on transformational projects in Detroit. In this sense, what really drew me into real estate development as a full-time profession was the opportunity we saw to play a meaningful role in Detroit’s revival.

development in the first place?

Company: Develop Detroit Inc. Age: 41

Cadillac House in Lexington with a 12-room inn and an 80-seat tavern.

I really don’t see gender distinctions in my day-to-day work, or feel that the challenges that this work has presented are unique to the fact that I am a woman. The challenges I experienced on the way to success in this work are common to all urban developers: namely finding lenders, investors and partners who believe in your vision and your ability to re-

Sonya Mays Title: President and CEO

Stacy Fox

JJA $3.5 million renovation of The

Susan Harvey

Company: Ashley Capital

“Detroit desperately needs more capable, talented and hard-working entrepreneurs, and if there is any industry in any town that doesn’t care whether you’re a man or woman it’s real estate in this city.”

JJA $5.5 million Piety Hill project doing gut-rehabs on 23 homes. JJHistoric renovations to seven Boston Edison neighborhood homes costing a total of $950,000.

What advice do you have for women looking to get into the development industry in Detroit and/or the suburbs?

Women who have any interest at all in real estate development should seek out opportunities with firms that will facilitate gaining experience in all phases of development from property acquisition through the completion of the project. Find an organization that values your abilities and will help you enhance your skills. If at any time you believe your opportunities are limited by your gender, move on.

JJRedevelopment/rehab of an 11-unit apartment building at 8840 Second Ave. costing $1.6 million. JJRehabbing a four-unit apartment building at 1202 Webb St. for $75,000. JJA rehab of a four-unit apartment

building at 708 W. Philadelphia St. costing $625,000. JJTurning 8902 Second Ave. into a

restaurant costing $175,000.

JJA $200,000 laundromat at 8735 Second

Ave.

“Be ready to take risks and ride out the delays.” Lisa Johanon

JJA $290,000 redevelopment at 8838 Third Ave. into Peaches & Greens Produce Market and commercial kitchen. JJTurning a former liquor store into the CDC’s farm and fishery for $125,000.

Developments in the works: JJRehabbing a 44-unit apartment building at 680 Delaware St. for $10.4 million. JJA $2.2 million project turning 1550 Taylor St. into a community center and offices for CDC.

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However, I think that is somewhat offset by the fact that getting started in real estate development does not require a huge baseline of structured knowledge. Grit, a healthy appetite for risk and a laser focus on execution are the basic ingredients for real estate success and women are just as likely to have those qualities as men. I absolutely wish there were more women in real estate, but long ago, I had to get over the whole “only woman in the room” thing and learn to reframe the issue as an opportunity. I have found ways to make gender inclusion a core part of Develop Detroit’s work and mission. My firm has clearly established performance metrics around awarding a meaningful portion of our corporate and development spending on women-owned and women-led businesses. We hire staff and recruit board members with an eye toward cultivating gender balance. Our culture strives to be one that is supportive of women entrepreneurs and community leaders.

“Real estate, like finance, can be very relationship-driven, so establishing and navigating key business relationships is one of the classic challenges that women developers need to overcome.” Sonya Mays

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What advice do you have for women looking to get into the development industry in Detroit and/or the suburbs?

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banker, I raised capital for a range of construction and engineering firms — the types of companies that build hotels, casinos, bridges and tunnels. As a financier, I was many steps removed from the actual development work, but I cultivated an understanding for how real estate and infrastruc-

aylor s for

ture development could be transformative and anchor communities for decades. Separately, I moved back home to Detroit specifically to play a role in the revitalization effort. Having lived in Brooklyn, I had seen how quickly development can change neighbor-

hoods and understood it to be a vital community-building tool. What sort of challenges, if any, have presented themselves as a woman developer?

I have spent the bulk of my career in male-dominated industries, so I am

somewhat personally desensitized to gender in the workplace. Real estate, like finance, can be very relationship-driven, so establishing and navigating key business relationships is one of the classic challenges that women developers need to overcome.

I think that depends on what part of development interests a person. An entrepreneurial woman can start small and progressively work toward larger real estate or housing developments, building up the expertise along the way. This approach can even be done part time, so that it isn’t a complete financial leap of faith. Asset management is another great entry point into real estate and one with a great number of potential local opportunities.

The Miller Law Firm is pleased to announce that Melvin “Butch” Hollowell has joined the firm as the Managing Partner of our Detroit office.

LARRY PEPLIN FOR CRAIN’S JJA $1.2 million project with moderate to full-blown rehabs creating single-family homes and duplexes totaling 23 units.

ding

What led you to get into real estate development in the first place?

The need for quality affordable housing for the families we work with in our community. What sort of challenges, if any, have presented themselves as a woman

developer?

It is certainly a man’s world, and it is a tough world at that. I don’t know if it is tough because I am a woman, though. What advice do you have for women looking to get into the development industry in Detroit and/or the suburbs?

Be ready to take risks and ride out the delays. Count the costs. Business head not social worker head.

Melvin “Butch” Hollowell Managing Partner, Detroit Office

Leaders in Complex Business Lawsuits and Class Action Litigation 950 West University Drive / Suite 300 / Rochester / Michigan / 48307

(248) 841-2200

www.miller.law

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 2 2 , 2 0 1 8

SPECIAL REPORT: WOMEN IN REAL ESTATE

Kelsey CG von Wormer

Title: Landlord, business owner

Title

Company: Kelsey The Landlord LLC Age: 26

Years in development/real estate: Six Education: Detroit Country Day School, College For Creative Studies, Walsh College of Business Developments completed: JJA $300,000 residential redevelopment

on West Forest Avenue in Midtown.

JJA $44,000 residential rehabilitation on Virginia Park Street in Detroit. JJA $157,000 residential redevelopment on Lothrop Street in Detroit. JJA $79,000 residential redevelopment on Leicester Court in Detroit. JJA $50,000 residential redevelopment

on Blaine Street in Detroit.

Developments in the works: JJA commercial redevelopment on

Linwood Street costing $169,000-plus. JJGround-up construction of “tiny houses” on Leicester Court. Project costs are to be determined.

What led you to get into real estate development in the first place?

I was studying at College For Creative Studies in 2012 and hated my landlord. I decided to buy my own house before my lease ended that summer. When looking around, I wanted to make sure I purchased something big enough to split into at least two apartments so it would become an

“I realize the importance of the connections I’ve made through various state and national organizations including women’s councils.” Shannon Morgan

Com

income-generating investment property and still have the initial intended benefit of putting a roof over my head. The house I ended up buying was a 4,000-square-foot 1890 Victorian mansion in Midtown next to Wayne State University Old Main. I converted the building into five apartments over the next three years while living there through the construction. I loved working on this old Detroit house so much that I walked over to the CCS scheduling department that semester and changed my major from advertising and photography to interdisciplinary furniture design and interiors. I wanted to make Detroit and its housing challenges my main life focus. This project was completed just before I graduated college in 2015. What sort of challenges, if any, have presented themselves as a woman developer?

I’ve had tons of challenges, but most have not been gender-related and, looking back, those that have been are funny. I’ve had clients ask me when my father or male boss was going to arrive on site so a decision could be made regarding proposed work. I’ve had general contractors ask me where my husband is and when he can write a check. I’ve had general labor types ask me, “Where are your construction heels and dress?” I find that I’m only limited by my body size. Heavy lifting has been hard for me. What advice do you have for women looking to get into the development

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industry in Detroit and/or the suburbs?

The advice I’d give is the same regardless of gender. First, do a lot of research on the house before you buy a property. Call the water department, check that the property title is clear, or require that it be clear before closing, and, most important, con-

firm whether or not it’s occupied. I went into my first house pretty blind and spent a lot of time after purchase figuring out a game plan for the renovation and carefully helping the homeless move on from Forest since they had hung out there on and off inside the property for years. Second, make sure you have a large

Shannon Morgan Company: HRS Communities/Home Renewal Systems LLC. Title: Senior vice president Age: 43 Years in development/real estate: 23 Education: Redford Union High School, Michigan State University Developments completed: JJThe Gateway, a $13 million adaptive

reuse project in Fremont. Includes 36 affordable senior housing units in the former Fremont High School downtown at 204 E. Main St. JJEton Street Station, a $38 million development in downtown Birmingham. The project includes 164 townhouse units with up to three bedrooms and attached garages. Roughly one-third of the units are residential/commercial and artisan commercial/residential. JJ600 Altamont in Marquette just outside of downtown, a $16 million adaptive reuse that includes 56 affordable rental units of workforce housing at the former Holy Family Orphanage. Fourteen of the units are reserved for formerly homeless people and their families.

Developments in the works: JJClyde Smith Farms in Westland on

Chestnut Drive, a $36 million infill development with 146 single-family homes. JJThe $30 million Hotel Hayes project in

Jackson, turning the historic property into a hotel and residences for Consumers Energy Co. employees and others on West Michigan Avenue. JJKing Street School in Eaton Rapids, an

$8.5 million redevelopment into 32 units of affordable senior housing. What led you to get into real estate development in the first place?

I followed my family (her father is Bernie Glieberman) selling residential real estate, in which I was recruited by a local developer to sell and market new construction. I have always been passionate and drawn to places and felt a passion to connect people to them, so they can call it their home. Transforming the built environment is exhilarating, and I feel that it was a special calling. As a single mother, I realize that home is the foundation of my family and life. What sort of challenges, if any, have presented themselves as a woman developer?

Overcoming fear of showing weakness and being self-conscious (of being the only woman in the room), this is a barrier I continue to work on. Most of my colleagues are male. I literally get asked on a weekly basis how I’ve gotten my job or if I’m related to the owner. My response is that I have many years of experience

working from the trenches up. I’ve always had to address the income disparity, fighting for pay equal to my male counterparts. Working in the real estate development business since the age of 20, I’ve had to fight the power struggle to be taken seriously with a chance to be heard. Also, as a single mother of two boys, one with special needs, the work-life balance is always challenging. What advice do you have for women looking to get into the development industry in Detroit and/or the suburbs?

Recognizing many changes that have taken place, I realize the importance of the connections I’ve made through various state and national organizations including women’s councils. I’m now seeing an increased number of women in the industry that provide support in each other (power in numbers). Together, we are connecting with each other, enabling us to transform, build and develop. Pick your battles wisely, know when the fight is worth the energy needed but never back down on something you believe in. Always stand up and speak for what is true. Have confidence, believe in yourself, trust your intuition — it will drive you. Persevere (on) the emotional roller coaster; strength is key in this business.

enough renovation budget to finish on time. I’ve stopped projects for months to go back to work in the field to build back up more cash or to borrow from investors so that I can finish a restoration and get it rented. Third, find good contractors. They are an invaluable asset to your success.

“Invest in market research, do research on the district you plan to invest in, and get to know the other stakeholders active in the area.” Susan Mosey

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Amelia Patt Zamir Company: Method Development Title: Principal Age: 34 Years in development/real estate: 10 Education: Lahser High School; University of Michigan; Columbia University Developments completed: JJThe $350 million Viola Back Bay project in Boston, which includes a 156-room hotel, 88 condominiums, 85 apartments and 20,000 square feet of retail space. JJA $130 million mixed-use project in Washington, D.C., that includes 303 luxury apartments and more than 90,000 square feet of retail space, including a Walmart Inc. store. JJFD Lofts, a $3.5 million project that turned a former Detroit Fire Department building into 31 condominiums at 3434 Russell St. in Eastern Market.

Developments in the works: JJA $1.25 million project at 304 Erskine St.

in Detroit that would convert an old 4,000-square-foot mansion into multiple multifamily units.

What led you to get into real estate development in the first place?

Growing up the suburbs, I often visited downtown Detroit to attend Tigers games and shows at the Fox and Fisher theaters. However, my most memorable visit was when my father drove the family around Detroit to show us his childhood home in the University District and my grandfa-

Susan Mosey Company: Midtown Detroit Inc. Title: Executive director

ther’s former factory on Glendale Street in Rosedale Park. I learned that my family had a long history as innovators, manufacturers and supporters of Detroit’s cultural realm. During my lifetime Detroit became the poster child of the post-industrial devastation that blighted American cities. I could not fathom how Detroit, once dubbed the “Paris of the Midwest” and later the “Arsenal of Democracy,” could have experienced such utter decline. As a college student in Ann Arbor, I joined Cityscape Detroit, a nonprofit organization dedicated to urban renewal and architectural preservation. After graduation, I moved to New York to study architecture and real estate development with the aim of returning home with the skill set needed to make an impact. It was this passion to partake in Detroit’s revitalization that ultimately led me to become a developer.

What sort of challenges, if any, have presented themselves to you as a woman developer?

We all saw how important 2017 was for women in that recent high-profile events shed light on discrimination that is unfortunately still commonplace today. We are living in the #MeToo movement, so I imagine the challenges I’ve faced in the workplace aren’t any different from those other women face in male-dominated fields — whether that be finance, medicine, politics or law. Now, as a female entrepreneur, I’ve experienced distinct challenges than as an employee. When you have ma-

jor corporation backing, I’ve found people are more receptive to taking direction from a woman. Since going out on my own, I’ve faced sexism and doubt along the way from surprising sources. It’s ironic because I have more decision-making power than before, and yet, I’ve experienced more pushback from external sources. I’ve had to work hard to find new ways to establish my authority. It’s a constant balance of humility and confidence to make sure I’m motivating others while garnering respect.

What advice do you have for women looking to get into the development industry in Detroit and/or the suburbs?

A developer is ultimately a visionary who sees opportunities where others might see only challenges. Believe in yourself, your vision and commit your resources to projects you are passionate about. Secondly, identify a role model who inspires you. At each milestone in my career, female mentors have helped me learn and grow. In a male-dominated industry, it can be challenging to find a mentor with whom you can identify and share similar experiences. I’ve been fortunate to have several throughout my career, and I’ve always made it a priority to nurture these relationships. Although less prevalent than their male counterparts, women in high-powered positions I’ve found derive joy in giving back to the upand-coming generation of female real estate professionals and developers. Even if you feel you are “bug-

“A developer is ultimately a visionary who sees opportunities where others might see only challenges.” Amelia Patt Zamir

ging” busy people (as women have the tendency to feel), believe in yourself and reach out to those who inspire you because it’s likely she will be flattered and take pride in

knowing her efforts are blazing a trail for more women in the industry. I would love to hear from aspiring real estate professionals, both men and women in the Detroit area.

accelerator space for creative companies and eight residential units. Also includes ground-up construction. JJA $6 million project with Invest Detroit creating 15 high-efficiency single-family homes on Fourth Street. JJPart of a four-team partnership turning a building into a brewing school and bar/arcade with an attached courtyard for $4.8 million.

Age: 63 Years in development/real estate: 20 Education: Immaculata High School, Wayne State University Developments completed: JJThe Inn on Ferry Street project with the Detroit Institute of Arts, which renovated six historic mansions for $8 million into a 40-room boutique hotel. JJThe Strathmore Apartments project with St. Louis-based McCormack Baron Salazar, a $28 million effort that turned an historic hotel into mixed-income housing with 129 apartments and commercial space at 70 W. Alexandrine St. JJA $7 million redevelopment of

property at 6568 Woodward Ave. into a new headquarters for the Ralph C. Wilson Foundation, 10 mixed-income apartments and a ground-floor restaurant. Developments in the works: JJPart of a four-team partnership spending $7.1 million turning a building at 644 Selden St. into a new restaurant,

What led you to get into real estate development in the first place?

Twenty years ago the (Midtown) neighborhood faced huge challenges due to the number of vacant historic structures. Therefore, in order to address the issue, the (Midtown Detroit Inc.) organization became very involved in historic preservation. What sort of challenges, if any, have presented themselves as a woman developer?

There has always been strong support for the real estate work of the organization, thereby limiting a lot of challenges that typically occur in real estate projects. What advice do you have for women looking to get into the development industry in Detroit and/or the suburbs?

Invest in market research, do research on the district you plan to invest in, and get to know the other stakeholders active in the area. In addition, strong relationships with the public sector are critical.

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

CRAIN’S IN THEIR

TWENTIES

Submit your nomination at crainsdetroit.com/nominate

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CALENDAR TUESDAY, JAN. 23 The Big Four. 11:30 a.m.-1:30 p.m. Detroit Mayor Mike Duggan, Wayne County Executive Warren Evans, Oakland County Executive L. Brooks Patterson and Macomb County Executive Mark Hackel discuss regional successes, issues and their plans to drive the Southeast Michigan region forward. The meeting will take place during the 2018 North American International Auto Show. Cobo Center. $45 members, $55 guest of members, $75 nonmembers. Website: econclub.org

UPCOMING EVENTS Positive Links Speaker Series: Raj Sisodia — The Healing Organization. 4-5 p.m. Jan. 29. Center for Positive Organizations. Speaker Raj Sisodia, FW Olin Distinguished Professor of Global Business at Babson College, and the Co-Founder and Chairman Emeritus of Conscious Capitalism Inc., discusses how business can become the primary agent for healing society. University of Michigan Ross Campus. Free. Contact: Jacob Feinberg, phone: (734) 764-0544; email: jafeinb@umich. edu; website: positiveorgs.bus.umich. edu/events/the-healing-organization The Economy & Workforce: The Reentry Opportunity. 11:30 a.m.-1:30 p.m. Feb. 13. Jeff Korzenik, chief investment strategist/senior vice president, Fifth Third Investment Manage-

PEOPLE ment Group, on the opioid epidemic as a workforce challenge. Townsend Hotel. $45 members, $55 guest of members, $75 nonmembers. Website: econclub.org Tech Takeover: Executive’s Guide to Protecting Client Data and Your Business. 8:30-10:30 a.m. Feb. 14. Automation Alley. What happens if a company loses a client’s data? What if the company was the entry point for such a breach? Learn how to protect data and a client’s identity by leveraging data security as a business advantage. Automation Alley. $10 members; $20 nonmembers. Phone: (800) 427-5100; email: info@automationalley.com Embracing Emerging Technologies to Diversity Business. 9:30 a.m.-3:30 p.m. March 8. Asian Pacific American Chamber of Commerce. APACC 15th Annual East-West Business Connection. Edward Village, Dearborn. $75 member; $100 nonmember. Contact: Leonie Teichman, email: leonie@ apacc.net Website: apacc.net To submit calendar items visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” from the drop-down menu that will appear. Fill out the submission form, then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events.

FINANCE JJKeith

R. Hachey to national accounts development director, Americorp Financial LLC, Birmingham, from vice president and business development officer, Lease Corporation of America, Troy.

LAW JJHerschel Fink to of counsel, Jaffe Raitt Heuer & Weiss PC, Southfield, from senior partner, Honigman Miller Schwartz and Cohn LLP, Detroit. Also, Daniel Soleimani to partner from associate and Samuel A. Schiffer to partner from associate. JJMelissa M. Card to of counsel, Plunkett Cooney PC, Bloomfield Hills, from attorney, Clark Hill PLC, Detroit.

MEDIA JJOllette Boyd to CFO, Detroit Public

Television, Wixom, from CFO, Focus: Hope, Detroit.

SPOTLIGHT Brooks takes Mental Health Authority job

NONPROFITS/TRADE GROUPS JJBlanca Fauble to director of development, Haven Inc., Pontiac, from principal, Campaign Works LLC, Bloomfield Hills. JJMark Horne to chairman, Michigan Venture Capital Association, Ann Arbor, from board member. JJErin Shankie to development coordinator, MIU Men’s Health Foundation, St. Clair Shores, from CEO, ER Sports and Leadership, Grand Blanc.

TECHNOLOGY JJMichael McGrath to director, glob-

al automotive sector, SAS Institute Inc., Southfield, from global account manager, automotive. To submit news of your new hires or promotions to People, go to crainsdetroit.com/peoplesubmit and fill out the online form.

DEALS & DETAILS CONTRACTS American Pet Nutrition, Ogden, Utah, a pet food company, has selected The Mars Agency, Southfield, as its shopper marketing agency of record. Websites: anibrands.com, themarsagency.com. J Bankable Marketing Strategies LLC, Detroit, an integrated marketing communications and branding agency, has added two new clients. BMS will provide hospitality management services for the 2018 Detroit Jazz Festival and will produce a corporate video for Diversified Chemical Technologies Inc. Websites: bankablemarketingstrategies. com, detroitjazzfest.org, dchem. com. J Chassis Brakes International, Eindhoven, Netherlands, a manufacturer of automotive braking solutions, has selected AutoCom Associates, Bloomfield Hills, as its North American public relations agency of record. Websites: chassisbrakes.com, usautocom.com. J GroupClique, Detroit, a tech company offering networking solutions to educational and private organizations, has partnered with St. Frances Cabrini Parish, Allen Park, to provide the community with a digital platform to boost communication within the parish and school for the purpose of connectivity, commerce, mentorship and fundraising. GroupClique has also contracted with the Catholic Diocese of Dallas, Texas, to provide its desktop and mobile app, and initial projects are up and running at three area high schools. Websites: groupclique.com, cabriniparish.org, cathdal.org. J Near Perfect Media LLC, Bloomfield Hills, a public relations firm, has been named the agency of record for D.L. Tocco & Associates Inc., Troy; Mobiliti LLC, Rochester Hills; Vertical Drop Ski Shop, Clarkston; Detroit Arena Ventures LLC, Detroit; The Harrison, Royal Oak; Michigan Professional Fire J

Fighters Union, Trenton; Mike’s Pizza Bar, Detroit; and Sports & Social Detroit, Detroit. Website: nearperfectmedia.com.

EXPANSIONS J Athletico Physical Therapy, Oak Brook, Ill., a physical therapy franchise, has opened new locations in Plymouth and Redford Township, at 41576 Ann Arbor Road E, Plymouth, and 14615 Telegraph Road, #1, Redford Township. Plymouth phone: (734) 259-2446. Redford phone: (313) 334-4298. Website: athletico.com. J Pinkerton Consulting & Investigations Inc., Ann Arbor, a risk management agency, has opened an office in New Mexico, at 2201 San Pedro Dr. NE, Albuquerque. Website: pinkerton.com.

MOVES J RB Construction Company, Mount Clemens, has relocated its corporate headquarters from 6489 Metropolitan Parkway, Sterling Heights, to 249 Cass Ave., Mount Clemens. The company developed the site and built the new 3,915-square-foot building. Phone: (586) 264-9478. Website: rb-construction.com.

NEW PRODUCTS Skinnywear LLC (dba skinnytees), Birmingham, an online fashion retailer, has launched a limited-edition clothing line called “Detroit Has Legs,” custom-made women’s leggings that showcase 32 Detroit buildings, sculptures and sites. All profits will benefit the nonprofit Cass Community Social Services, Detroit. Phone: (248) 752-3090. Website: skinnytees. com.

Submit Deals & Details items to cdbdepartments.com.

Willie Brooks was unanimously approved last week as CEO by the board of the Detroit Wayne Mental Health Authority, for the second time, after he turned down the job in October over issues in contract negotiations. Brooks, 56, said he will start his new position the Brooks first week of March. The deal ends a long and tumultuous process to find a replacement for former CEO Tom Watkins, who left the authority last August. The agency’s board previously announced it had hired Brooks, then he backed out. Then it announced it would hire local mental health executive Joy Calloway, who backed out in December after Wayne County Executive Warren Evans publicly criticized the pick as a potential conflict of interest. “I am leaving Oakland (Community Health Network) in a good place,” said Brooks, who has been CEO there since 2014 and was CFO for two years before that.

Emagine appoints first COO

Emagine Entertainment Inc. has named Tripp Adams its first chief operating officer. Adams, 41, began his position immediately at the Troy-based luxury theater chain, which named a new CEO in December. He will oversee, directly and indirectly, more than Adams 1,000 employees across the Midwest.

MSU Foundation group leader named

Michigan State University Foundation has named Jeff Wesley, former CEO of Two Men and a Truck, to lead Red Cedar Ventures, a venture investm e n t subsidiary. Wesley, 54, is its first executive director, effective last week. He will be tasked with managing and Wesley growing its venture investment portfolio of companies commercializing intellectual property designed at Michigan State University, the news release said. That includes helping raise outside funding. Wesley was an executive with Lansing-based Two Men and a Truck/International Inc., serving first as CFO and later CEO between 2008 and 2017. His experience includes time as president of Williamston-based Accu-Bite Dental Supply from 1991 to 2006.

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Page 2

17 January 22, 2018

STERILE FROM PAGE 1

in Detroit, always maintained separate departments. Since last May, DMC officials say they have continued to improve surgical instrument cleaning, increased staff training and hiring and purchased additional surgical instruments to replace lost or aging equipment. Ewald also confirmed that Children’s Hospital has been using a temporary sterile processing department in a mobile unit attached to the hospital since mid-November. The ultimate plan is to build a new instrument cleaning department in the six-story pediatric critical care tower under construction, she said. “We are going to pull (central sterile processing) into the new tower. We didn’t want to wait until that construction was done. We put up the mobile unit very quickly, so we could study the process,” Ewald said. The new pediatric SPD will be staffed initially by eight employees, she said. DMC would not reveal the cost of the mobile sterile processing unit or adding a new department to the tower that is nearly completed. Expected to open this summer, the $155 million, 248,000-squarefoot Children’s Hospital of Michigan pediatric critical care patient tower is the largest of DMC’s 15 specified capital projects. More than $850 million of construction and maintenance projects have been undertaken since DMC was sold in 2011 to Vanguard Health Systems. DMC is now owned by Dallas-based Tenet Healthcare Corp., which acquired Vanguard in 2013. “As we build the new patient tower downtown, the timing was perfect for us to use lean facility design in the new (operating room) construction strategy and pull central sterile processing into that,” Ewald said. Ewald said the new sterile processing unit will be right outside the four pediatric ORs. “When the OR case is scheduled, the instruments are right outside the room,” she said. “This is using best practices.” Having a dedicated SPD unit will help improve on-time surgery starts, reduce time for OR turnover for the next case and help with physician satisfaction, Ewald said. Nurses, doctors and union officials have told Crain’s they have been asking DMC for years to separate the pediatric sterile processing from the adult services. Former CEO Mike Duggan, in a cost-cutting and standardization move, centralized sterile processing departments in 2010. Ewald said she wasn’t around when Duggan made that decision and could not comment on whether it was a mistake to combine pediatrics with adult services. Jay Jagannathan, a Detroit-based neurosurgeon, said it was a good idea for DMC to separate pediatrics from adult surgical instrument cleaning. However, he said wellrun departments like one at the University of Virginia Health System and at several other major academic medical centers can do both. “Infections in kids are different than in adults, and you have to have a good system in place for surgical cleaning,” he said. “There is a sensi-

The Children’s Hospital’s new pediatric patient tower is under construction. JAY GREENE/CRAIN’S DETROIT BUSINESS

“As we build the new patient tower downtown, the timing was perfect for us to use lean facility design in the new (operating room) construction strategy and pull central sterile processing into that.” Luanne Ewald

tivity in the general public for kids. The risks are a lot higher. Infections are much more severe with children because their immune systems are not as developed.” Jagannathan practiced at DMC from 2009 to 2012 and now is in private practice with two partners in an office in Troy. His practice serves four hospitals in Southeast Michigan, northern Michigan and the Upper Peninsula. One of the challenges DMC’s central sterile processing department faced was surgical kits for children are much smaller and more complex than adult surgical trays. In addition, the cleaning processes used for adult trays are somewhat different than for the pediatric kits. Ewald said there is an advantage to having one dedicated team to clean children’s surgical instruments as they would be most familiar with the different types of surgical trays and the specialized instruments. “We can improve turnaround time for surgeries, and that will help with physician satisfaction,” Ewald said. Jagannathan said DMC always has had a turnaround time problem in the surgery department, and sterile processing was one of the reasons. “The turnaround issue is a major problem at DMC and separating pediatrics from adult makes a lot of sense for them,” he said. “A child comes in with an acute problem

and you want to be ready with the OR and instruments. If you have a well-oiled system, it really is unnecessary to separate” the units. “Separating the departments really is a little bit of covering their bases and speaks to the larger issue of their confidence in their centralized system and their ability to get things done,” he said. Now in its final phase of construction, the four pediatric ORs are under construction in the tower’s second floor with the adjacent sterile processing department. The emergency department and new lobby with an 8,842 square-foot feature wall made of brightly colored glass are also being built. Ewald said the decision to create a dedicated sterile processing department was made after May 2017, when DMC received notice it had passed all inspections. “We had surveyors (CMS inspectors) in the hospital and we learned from them about best practices and talked with experts around the nation and the state. We used all this information” to make the final decision to build a new department in the pediatric patient tower, Ewald said.

DMC's violations In late summer 2016, The Detroit News published a story that outlined more than a decade of complaints from doctors and nurses about dirty surgical instruments, inadequate sanitation and insufficient staffing in DMC’s centralized sterile processing department. Michigan’s Department of Licensing and Regulatory Affairs investigated in the fall of 2016 and found multiple violations of infection control and other regulatory violations for Children’s, Detroit Receiving and Harper-Hutzel hospitals. But in December of 2016, a follow-up inspection found DMC to be in compliance. However, in January 2017, new complaints were lodged, and Children’s Hospital and the other three hospitals failed the CMS quality inspection. The hospitals were cited for numerous violations of infection control and surgical services

standards. They were cleared by CMS last May. It might never be known whether patients were negatively affected by the inadequate surgical cleaning, but dozens of planned surgeries had to be canceled, postponed or halted over the years when teams discovered problems with the instruments. DMC officials and doctors have denied any patients were injured. But DMC officials have acknowledged that the volume of surgeries declined after the problems in sterile processing were made public in articles by the News and Crain’s. As part of its improvement plan, DMC hired an outside sterile processing company, Steris Corp., which took over management of its central sterile processing unit that conducts instrument cleaning operations. Steris has a full-time manager on site. But unlike DMC, Children’s Hospital will manage its own SPD, Ewald said, noting that Steris assisted Children’s on planning the mobile unit and helped design the new department. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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WDIV FROM PAGE 3

For a recent pricing comparison, Crain’s was told that CBS Television Stations-owned WWJ-Channel 62 charged $140,000 for in-game local ads such as Super Bowl XL in 2016. Stations can sell increasingly complex ad packages that include digital and mobile audiences instead of just the TV broadcast. WDIV and NBC Sports have been selling the Olympic advertising that way.

A big year One local TV industry observer predicts that the two marquee sporting events will launch a lucrative year for WDIV. “From a revenue standpoint, the Super Bowl and the Olympics are rare chances for local TV stations to become mass media, as they once consistently were,” said Matt Friedman, a former news producer at WDIV and co-founder of public relations firm Tanner Friedman in Farmington Hills, via email. “The audience shares will be, by 2018 standards, huge. Big advertisers especially will pay a premium for more eyeballs on their spots and more attention for their brands. “These are two programs that should be DVR-proof, meaning consumers will actually see the commercials and not just zip through them, as they might with time-shifted viewing on highly rated ‘This Is Us,’ for example.” Revenue momentum should continue at WDIV this fall because of the midterm elections. “February should be a banner month for business at NBC affiliates, setting up what could be a big year with election ads filling the airwaves in third and fourth quarter,” Friedman said. The station generated $70 million in revenue in 2015 and $77.9 million in 2016, according to the most recent

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 2 2 , 2 0 1 8

“We like to watch television in Detroit. Olympics captivate audiences, and in winter (Detroit) tends to be one of the top performing markets in the country. ” Marla Drutz

data available from Chantilly, Va.based broadcast media analysts BIA/ Kelsey. The sports two-fer will be a windfall for the parent network: Executives from Comcast Corp.-owned NBCUniversal have publicly said they expect the network to collect $1.4 billion from Super Bowl and Olympics advertising, with $900 million of that coming from the Winter Games. Super Bowl ads are selling for $5 million-plus for 30 seconds. NBC hasn’t disclosed its Olympics ad rates, which will vary in price because of the range of events over hundreds of hours of coverage. Events will run live across all U.S. time zones, not on a tape-delay. The 2014 Sochi Olympics averaged 21.4 million viewers for NBC. Last year’s Super Bowl LI in Houston had 111.3 million viewers for the Fox network. Both events dominate national and local ratings. WDIV isn’t owned by NBC. Instead, the affiliate has been owned since 1978 by Chicago-based broadcaster Graham Media Group (known as Post-Newsweek Stations Inc. until 2014). NBC last carried the NFL title game with Super Bowl XLIX in February 2015. The network has had the Winter Olympics broadcast rights since 2002. They’re staged every four years.

Audience explained The local Olympic audience is expected to be big. “We like to watch television in De-

troit. Olympics captivate audiences, and in winter (Detroit) tends to be one of the top performing markets in the country. And we have a lot of local connections,” Drutz said. Local connections on Team USA include figure skaters Madison Chock (Novi), Madison Hubbell (Lansing), Evan Bates and siblings Maia and Alex Shibutani (Ann Arbor); hockey players Megan Keller (Farmington), Chad Billins (Port Huron), Jim Slater (Lapeer) and James Wisniewski (Canton); and short track speedskaters Jessica Kooreman (Melvindale) and Ryan Pivirotto (Ann Arbor). The Detroit market’s Winter Games viewership also trends higher than other markets because of Michigan’s affinity for winter sports, such as skiing, figure and speed skating, and perhaps most of all, hockey, Drutz said. “There’s that natural kind of connection,” she said.

Ratings WDIV expects to gain three to four times its typical prime-time ratings, and during the day to be at least 50 percent higher than normal, Drutz said. “These are giant audiences. Next to the Super Bowl, it’s the number one consistent programming that is top-rated,” she said, topped only for affiliates when they have a local team in the World Series. The station also sees the Olympics as a chance to capture an audience that doesn’t normally watch the station’s regular programming — which

it will tease during the games. “The Olympics provides stations the opportunity to expand their footprint among those audiences,” Drutz said. “It’s a great opportunity for less regular viewers to experience traditional broadcast TV. We’re able to use the Olympics as a platform to also promote and market initiatives from both the network and the local station.” Friedman said that’s a sound business strategy for any station. “This is not only, by current standards, a blockbuster opportunity for NBC affiliates for revenue, it’s also a platform for promotion,” he said. “If I was consulting an NBC-affiliated station, I would remind them of the appetite for nonpartisan, credible news that can be fed. It’s a chance to reintroduce an audience, maybe a younger or broader audience, to their news product. It’s a way to reinforce their anchors and their standards. “In the latest Pew research study, 37 percent of adults say they watch local TV news often. Here’s a chance to get a bigger piece of the other 63 percent,” Friedman said. WDIV, which dominates several local ratings categories for news, also is hopeful that it could see a viewership uptick from NBC’s lead Olympic broadcast talent. Mike Tirico, who has lived in Ann Arbor since 1999, is replacing Bob Costas, who hosted the games since 1992 and had planned for some time to give up Olympic duties. Tirico spent many years at ESPN before joining NBC in 2016. “The secret weapon is Mike Tirico. He’s our guy, he knows Michigan. He’s an extraordinary, popular anchor,” Drutz said. Detroit is the 14th largest U.S. media market, with 1.7 million television homes, according to the newest Nielson Co. data.

Local coverage

pics show called the “O-Zone” hosted by news co-anchors Devin Scillian and Kimberly Gill, sports anchor Bernie Smilovitz, and Olympic gold medalist Meryl Davis, a Royal Oak native, as analyst. Overall, the station plans 15 hours of live coverage. That doesn’t include live cut-ins during the news. NBC’s daily live coverage begins at 3 p.m. for two hours, then continues from 8 p.m. to midnight, pushing back WDIV’s late news before NBC’s pre-recorded overnight coverage begins at midnight. Because of the nature of the games, limited access available to local stations, and the 14-hour time difference between Michigan and South Korea, it’s easier for WDIV to have pre-recorded coverage available for use during the games to supplement both the network and the affiliate’s live coverage, Drutz said. “What we prefer to do is send a crew in advance,” she said. Led by anchor Devin Scillian, the WDIV team in South Korea recorded a series of stories about Olympians with Michigan connections, and vignettes about preparations to stage the games. The station’s coverage begins on Feb. 2 with a prime time program called “Korea Rising” hosted by Scillian that previews the Olympics. The pre-recorded coverage will air through the games, and WDIV will also produce spot coverage when appropriate for events as they develop, Drutz said. “We have special arrangements with NBC and CNN to provide (live coverage) such as interviews,” she said. NBC Sports plans 176 hours of live programming and thousands more via its online and mobile coverage. WDIV’s digital and online audiences will be routed to the network’s coverage.

Each night beginning at 7:30 p.m., WDIV will air a live half-hour Olym-

Bill Shea: 313 (446-1626) Twitter: @Bill_Shea19

RESTAURANT FROM PAGE 1

McClain, the 50-year-old founder and principal of McClain Camarota Hospitality, owns and operates three restaurants in Las Vegas: Libertine Social at the Mandalay Bay Resort & Casino, as well as Sage and Five50 Pizza Bar, both at Aria Resort & Casino. He previously owned restaurants in Chicago but pulled out of the market completely in December to focus on the project in Detroit. The Ohio native graduated in 1990 from the School of Culinary Arts at Kendall College in Chicago. In 2006, he was honored with the prestigious Best Chef: Midwest award from the James Beard Foundation. He was named Esquire magazine’s “Chef of the Year” in 2001 and the next year was included in Crain’s Chicago Business’ “40 Under 40.” In 2011, McClain moved to Grosse Ile with his two children and his wife, Holly, a metro Detroit native and the managing partner and hospitality director of the restaurant company. “I want (the restaurant in Detroit) to be an anchor and flagship to my brand,” McClain said. “I’m excited to be in the culinary scene, being here in Detroit and finally being able to put a stake in the ground because Detroit is home.” Killeen said the selling point of Mc-

GM RENAISSANCE CENTER

Coach Insignia will closed its doors in Detroit’s Renaissance Center after 13 years offering classic American cuisine and a wide-spanning view of the city and Windsor.

CHRISTOPHER HOLLIS

A new restaurant is planned for the 71st and 72nd floors of Detroit’s Renaissance Center.

Clain’s design pitch was its creativity, flexibility and multiple components. “Making it a space that’s not a place

you go to just once a year was important,” she said. “We want people to come to the RenCen and stay.”

McClain’s yet-to-be-named restaurant joins Andiamo Detroit Riverfront, Granite City Food & Brewery, Joe Muer Seafood and two dozen other places to eat in the RenCen. Atop the tower, it boasts the best view in town but faces unique challenges with shuttling supplies up for build-out and day-to-day operations, as well as being a challenge for customers to get to. Killeen said GM was looking for a long-term client to fill the space. While she declined to disclose terms of the lease agreement, she said she thinks McClain is the right fit. “I think restaurant concepts come and go naturally,” she said. “We want-

ed a restaurant that would be timeless, with a creative, evolving menu.” McClain declined to say how much he is investing in the space. New York-based Rockwell Group is leading design and Los Angeles-based CBRE Group Inc., property manager of the RenCen, is overseeing the project. McClain said some demo and prep work has started. He expects to announce the name of the restaurant in a month with more details to follow. “We really want to give GM a crown jewel,” he said. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

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

On Amazon, doubters were right, but so were backers When East Lansing economist Patrick Anderson’s firm released in early October a rankings index of how U.S. cities stacked up in the key metrics for Amazon’s second headquarters, it drew the ire of Detroit businessman Dan Gilbert. Anderson Economic Group’s AEG HQ2 Index ranked Detroit 32nd among major U.S. cities — well outside of the top 20 short list Gilbert was hoping his team would land in Detroit’s forthcoming bid. Irked that Crain’s published the rankings, Gilbert questioned Anderson’s credentials, called the analysis “flawed trash” and an “incompetent silly report.” Gilbert, the billionaire founder of Quicken Loans Inc., said Anderson’s index failed to take into account Detroit’s ability to attract highly educated workers from up to five hours away, which became a key selling point to address the online retail and tech giant’s black hole-creating suck on tech talent. Detroit’s elimination Thursday from Amazon’s continental sweepstakes for a second corporate campus with 50,000 high-paid workers revealed a lot about the shortcomings in the region’s competitiveness — our disjointed mass transit systems, our fractured system of public education and our struggle to retain college graduates who have been leaving the state in droves for more than a decade. And, as it turns out, the Anderson firm’s index had a better feel of Amazon’s pulse than perhaps Gilbert was willing to acknowledge in the

CHAD LIVENGOOD clivengood@crain.com

heat of a six-week race chasing the biggest economic development prize in recent memory. “Detroit looked good on cost of doing business. Detroit looked decent on the size of workforce. They looked excellent on universities,” Anderson said in an interview Thursday. But, here’s the rub: “And they looked terrible on transit,” Anderson said. “And you add that up and it’s not good enough to make the cut — on a strictly numeric basis.” Fifteen of Amazon’s top 20 cities were in Anderson’s top 20. Anderson’s top six cities — New York, Chicago, Los Angeles, Boston, Atlanta and Washington, D.C. — all advanced to the second phase of Amazon’s HQ2 evaluation process. For as much energy and excitement surround the revival of downtown Detroit, the reality of the conditions of our roads, quality of our education system and readiness of our workforce is hard to ignore or paper over with glossy-colored books and riveting videos. That’s why it’s not too surprising that Amazon passed over Detroit for

cities and regions that have long been magnets for young workers with more robust mass transportation options and better K-12 education systems. Khalil Rahal, economic development director for Wayne County, got the first call Thursday morning that Detroit had not made the cut from an Amazon economic development department official, Holly Sullivan. Rahal had been regularly in contact with Sullivan since the company put out its public request for proposals. He had previously worked with her on Amazon’s development of two retail distribution centers in Livonia and Romulus, which remains under construction. The takeaway from Seattle was that Detroit’s not quite fully equipped for Amazon’s need of a large pipeline of talent flowing through a seamless mass transit system. “She made it very clear that if this was five years from now, they think it would have been a different decision, they think we would have been included,” Rahal said Thursday in an interview. “... They looked and asked, ‘What are the places that are likely to attract 25- to 30-year-olds?’” To his credit, Gilbert has been successful in attracting younger workers who sell and service mortgages at his Quicken Loans Inc. to come live and work in Detroit. But the challenge in snagging the Amazons of the business world remains making that millennial worker pool more organic. “It’s obviously very disappointing

for us not to have made the list,” Rahal said. “But I don’t look at this as a failure. We did learn a lot through this process.” Amazon’s dangling of billions in investment and 50,000 new jobs made everyone in the halls of power in this state and others stand up and take notice. And then they had to take stock of our strengths — like the little-known fact that the University of Michigan exports more MBA graduates to Amazon’s Seattle headquarters than any other university — and our weaknesses that go beyond potholes and a region long divided by class and race, urban disinvestment and suburban isolation. “Mass transit, that’s just a failure of our governance,” Anderson said. “That’s not the weather.” Wayne County Executive Warren Evans is working with Detroit Mayor Mike Duggan and his counterparts in Oakland, Macomb and Washtenaw counties on a new regional transit system tax proposal that could go before voters this November. And on the talent front, Gov. Rick Snyder is making a final-year-in-office stab at addressing the existing shortages in computer science-educated workers that existing Michigan companies are facing. Snyder’s “Marshall Plan for talent,” which he’s expected to pitch to lawmakers for funding on Feb. 7, was an outgrowth of the Amazon project. State officials are planning to move forward with a Pure Michigan-like talent attraction marketing

campaign that before the Amazon bid had been “on the drawing board,” said Roger Curtis, director of the Michigan Department of Talent and Economic Development. In spending the week wooing companies at the North American International Auto Show in Detroit, Curtis said the unsuccessful Amazon bid can serve as “a wonderful blueprint” for winning the next big employer that comes along. “This was a great opportunity to get a lot of stakeholders — some of them may not always talk to each other — together and start to have those conversations,” Curtis said. That Detroit’s leaders felt confident enough to even pursue the world’s largest online retail company says something about how far we’ve come since the depths of recession and political turmoil of a not-so-distant past. Just five years ago this month, Snyder was preparing to take control of City Hall and install an emergency manager who later filed what was then the largest municipal bankruptcy in U.S. history. “Five years ago, you wouldn’t have seen a climate where different levels and different areas of government are willing to come together, put egos aside, and go after this thing,” said Rahal, Wayne County’s economic development director. “The lesson here is what we have been doing is the right thing — we just need to be doing more of it.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

FROM PAGE 1

Rivereast site Another project that has been moving forward is Gilbert’s plans for the Detroit riverfront east of the Renaissance Center, where his lieutenants have been in discussions with General Motors Co. to redevelop no fewer than 10 acres into a mixed-use project with office and residential. GM confirmed the talks more than two years ago, although precious few details on what the redevelopment would entail have been revealed. Gil-

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PROJECTS languishing half-built since 2013 following cost overruns, has long had billionaire Detroit real estate and mortgage mogul Dan Gilbert’s attention as it sits at the doorstep to downtown and his gambling interests in Greektown. In the last several months, he has been inching closer to redeveloping the site, and Wayne County Executive Warren Evans said it won’t be completed as a jail, although he stopped short of saying Gilbert would be the one to redevelop it since a development agreement has not yet been reached with his Detroit-based Rock Ventures LLC. First he was going to put a Major League Soccer stadium and three high-rises there, but those plans were scrapped last year. Most Detroit real estate observers believe Gilbert, the founder and chairman of Quicken Loans Inc. and Rock Ventures, will end up redeveloping it as a high-density mixed-use project. Although Amazon won’t be the key tenant, some large-scale project there is likely to become a reality.

CRAIN’S DETROIT BUSINESS

A development agreement has not yet been reached for the site of the incomplete Wayne County jail.

bert said during a September event that his team was in discussions with “one of those big car companies down there” on the riverfront, although never named GM. Detroit’s Amazon bid revealed one vision. In the bid, the site south of Jefferson would have been transformed with mid- and high-rise office buildings, 1,200 residential units, 166,000 square feet of retail and other uses. All told, 28 acres (much of it owned by GM) would have been transformed with 20 new buildings. There have been years of discussions related to this property between

GM and Gilbert’s team and, if the two sides can strike a deal, a large development will go on those properties, many of which are currently vacant or occupied by surface parking lots. “The transformation of the riverfront is an example of what the community can do when we work together,” Mark Wallace, president and CEO of the Detroit RiverFront Conservancy, said in an interview last week. “It’s a great place for people to interact with nature and each other. We always believed the riverfront would be a strong engine for economic develop and we expect the transformation of the east riverfront will continue over

the next few years.”

Others

Ford Auditorium site

And for now, Gilbert’s companies will remain put. The proposal offered to move them out of existing buildings they occupy on Campus Martius Park and elsewhere downtown to accommodate a sweeping first phase of Amazon's HQ2 project, plus the Hudson’s site and Monroe Blocks developments that are slated to be built in the next several years. As it turns out, just not for Amazon.

The smallest of the sites floated to Amazon, the Ford Auditorium site just east of Hart Plaza, was proposed to get a 275,000-square-foot office building plus 60,000 square feet of retail space as part of a second Amazon headquarters. However, now that Amazon has ruled Detroit out of the running, Jed Howbert, executive director of Mayor Mike Duggan’s Jobs and Economy Team for Detroit Mayor Mike Duggan, said there are no immediate plans for it.

Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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

SMITH FROM PAGE 3

Smith moved the firm in 2011 from a loft space in Royal Oak to nearly 10,000 square feet on the entire fourth floor of the Dan Gilbert-owned Madison Building at 1555 Broadway St. — from which Smith’s corner office overlooked nearby Comerica Park. “I am deeply saddened by the sudden loss of Tim Smith, CEO @SkidmoreStudio,” Gilbert said Wednesday in a tweet. “Tim’s vision/belief/passion for Detroit was unparalleled. In 2011, Tim led Skidmore’s move downtown. In fact, they were @BedrockDetroit’s first lease. Forever grateful.” When Skidmore originally opened downtown as a design agency in 1959 inside the Fisher Building, it primarily worked with the large ad houses to provide images of cars and trucks. It moved to Troy in 1977, and later to Royal Oak. Under Smith, Skidmore’s business model shifted to working directly for clients, a change in strategy that kept the agency afloat when the recession was claiming small ad firms. “It was the direct work that allowed us to keep the doors open,” Smith said in a 2014 interview with Crain’s. Among Skidmore’s clients in recent years were Dave & Buster’s, Halo Burger, the Detroit Tigers, Expedia, Regal Cinemas, DTE Energy, Quicken Loans/Rock Ventures, Weingartz, Chrysler, The Sam Bernstein Law Firm, Crain Communications Inc., Level One Bank, Detroit Regional Chamber, Detroit Jazz Festival and

TechTown. It has done pro bono work for Detroit Public Schools. On the agency side, Skidmore has done work for Doner, Campbell Ewald, Team Detroit, The Mars Agency, McCann and Leo Burnett. The full-service creative agency does graphics, storyboard animation, interactive, website design, copy writing, branding and marketing. It added television production capabilities for Dave & Buster’s TV commercials. Smith was praised by his peers in the advertising and marketing industry. Don Tanner, co-owner of Farmington Hills-based communications firm Tanner Friedman, said Smith designed his agency’s first logo and website. “I have never met a more humble yet competent, caring person. A consummate family man, husband and father. A visionary leader and businessman and a dear, dear friend for more than 20 years. I am without words. Devastating. A terrible loss,” he said. Marcie Brogan, staple of the region’s creative community as founder of Birmingham-based Brogan & Partners Convergence Marketing Agency, admired how Smith adapted to the industry’s changes. “Skidmore has been a synonym for creativity for decades,” she said. “I most admire its resiliency: When computer graphics and design challenged traditional automotive-oriented studios, Skidmore successfully reinvented itself under Tim Smith’s leadership. His decision to move the company back to its origins — the

city of Detroit — was another sign of his inventive spirit.” Peter Van Dyke, CEO of Van Dyke Horn Public Relations, credits Smith for his assistance in buying Detroit-based Berg Muirhead and Associates in 2016. “At some of the most challenging times in the acquisition negotiation process, he was an incredible mentor, counseling me on strategies and best practices that helped him successfully acquire Skidmore and position the company for success,” Van Dyke said in an email to Crain’s. “We only met a couple of times, but I have great respect for what he built,” said Toby Barlow, chief creative officer of Dearborn-based GTB, Ford’s dedicated ad agency. Smith, a New Baltimore native, was hired at Skidmore in 2001. Before that, he’d led the marketing and advertising departments at Grant Thornton, Plante & Moran, and Village Green Cos., according to his official biography. He served on the Detroit Creative Corridor Center’s advisory board as well as the boards of the Detroit Regional Chamber and educational nonprofits Reading Works and Winning Futures. Smith was a 2014 inductee into the Journalism Hall of Fame at his alma mater, Central Michigan University. He began his career as a journalist with a story published in the Anchor Bay Beacon at age 15. He was later editor of the Plymouth-Canton Community Crier newspaper. He graduated from Anchor Bay High School in 1981 and CMU in 1986.

CORKTOWN FROM PAGE 3

Marakby, who will be based at the new Corktown office, was a college trainee in the early 1990s when Ford still occupied office space in the RenCen. The 111-year-old Factory building, once the home to the Chicago Hosiery and Detroit-Alaska Knitting Mills factories, sits in the middle of a section of Michigan Avenue in Corktown that seems poised for more development spreading west from downtown and the redevelopment of the former Tiger Stadium site a block away. “The reason I fell in love with the place as soon as I saw it is it really gives you that vibe of the heritage and the new coming together — and it really brings it to life,” Marakby said of the building along Michigan Avenue, where early 20th-century streetcar rail still peeks out from between cobblestone and asphalt. In building Team Edison, which Marakby describes as “a tech company within the company,” Ford executives wanted to be in a location where employees developing the business case for electric and autonomous vehicles could contemplate and experience the real-world application. “We see being in Corktown as a big advantage,” Marakby said. “And it has actually, in many ways, increased the interest in working on the team — internally and externally.” Ford plans to start moving employees into the building in the second quarter. In the Southeast Michigan-based auto industry’s race with Silicon Valley to put autonomous vehicles on the road, workspaces matter, said Glenn Stevens, executive director of MICHauto, the Detroit Regional Chamber’s automotive mobility accelerator

Sherif Marakby is vice president of autonomous vehicles and electrification for Ford.

programs. “For Ford, Detroit and Michigan, it all boils down to culture and talent,” Stevens said. “And that enables you to build the F-150s of the day today. And it enables you to have the vision of what the city of tomorrow will be with operating systems and data analytics and software systems and the connected car.” In addition to Team Edison, Ford also will have employees working on the business and strategy of autonomous vehicles based in Corktown, including software developers writing the programs that business clients will use to connect their applications to future autonomous vehicles, Marakby said. “We’re going to fill the building,” he said. “It’s going to be exciting.” The office in Corktown gives the EV and autonomous vehicle employees the ability to work in an urban setting, while not too far from home base, Marakby said. The Factory, a 45,000-square-foot

recently renovated space, is a 20-minute drive from Ford’s headquarters, engineering labs and manufacturing facilities in Dearborn. The building is about a mile from the central business district of Detroit — and within walking distance of new housing that’s being built or redeveloped in and around Corktown. “Our young people love ... living and working in urban areas,” said Bill Ford Jr., executive chairman of the company and great-grandson of founder Henry Ford. “For me, it was a no-brainer. And also, it’s still a pretty good deal to be in downtown Detroit.” Ford Land Development Co., the real estate arm of the automaker, purchased The Factory at Corktown building from former IndyCar driver Robbie Buhl and his brother, Tom, for an undisclosed price. The company has secured parking for employees in a vacant lot across Michigan Avenue that will accommodate the 200-plus employees, Marakby said.

Skidmore’s Patrick, who declined to discuss any agency succession planning, reminisced about his boss. He said he’s known Smith for 13 years and worked for him at the firm for the past 8 1/2, including the past 12 months as president. He spoke of Smith’s larger-than-life personality, noting his boss’ love of the Detroit Tigers, Disney, bourbon, coney dogs, the musician Prince and Detroit. “He always was doing Bill Murray quotes,” he said, chuckling. “He wore a Disney shirt.” Patrick also admired Smith’s fearless life and business philosophy, which fueled the pink-hued book about millennials, a colorful nod to Smith owning a bold pink bicycle in his youth. “He’s the guy who was gonna do it his way, right or wrong, successful or not. That was an endearing quality he had. He’s like a brother to me,” Patrick said. Smith was a father figure and mentor to the 15 staffers at Skidmore, he added. “We feel like we lost a family member and Detroit lost a champion of the city, and the industry lost an advocate for doing things in an extraordinary way. It’s a tragedy,” Patrick said. Smith is survived by his wife Colleen; sons Hayden and Harrison; sisters Kim Jeroue and Terri Dedischew, and parents Jean and Bob Smith. Visitations and a funeral service for Smith were Friday and Saturday. Bill Shea: (313) 446-1626 Twitter: @bill_shea19

Marakby said “a good portion” of the employees who will work in Corktown already live in the greater downtown area. The owner of a wine bar next door to The Factory is hoping that’s the case. “My only hope is that they’re not the type of people who get in their car and go right back home to the suburbs,” said David Armin-Parcells, owner of MotorCity Wine, which has operated a wine bar and shop at 1949 Michigan Ave. since 2013. The Buhl brothers’ race team and motorsports marketing company, Buhl Sport Detroit, will remain headquartered in a smaller two-story annex building at the corner of Michigan Avenue and Rosa Parks Boulevard. “Obviously, we’re excited that Ford’s coming back to Detroit and Corktown,” Robbie Buhl said in an interview. “It just made more sense, with what their interest was, to sell them the building.” The Buhls, who bought the building in 2015 for $1.8 million through an entity called Riverfront Partnership I LLC, also will continue to share rented space with Brothers Tuning Detroit, which produces after-market gear shift knobs for the Ford Focus and Fiesta cars. The Buhls rehabilitated the building over the past three years and were using the third floor for special events (the Crain’s-produced Detroit Homecoming was held there last September) until Ford executives expressed interest in the building a few months ago. “Everything just came together, and it happened very fast — it happened in weeks,” Marakby said. Ford announced its acquisition in mid-December. “Three years ago, would I ever have thought this was something that would have transpired?” Robbie Buhl said. “No way.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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

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

THE WEEK ON THE WEB

RUMBLINGS

Restaurant, development planned in McNicholsLivernois area

Cobo Center naming rights talks under way

JANUARY 12-18 | For more, visit crainsdetroit.com

hen Joe Marra first drove down McNichols Road just west of Livernois Avenue in Detroit, he was baffled to see abandoned storefronts lining the commercial corridor. The Livernois-McNichols area has long been troubled by population decline and lack of investment, but with the anchoring University of Detroit Mercy and Marygrove College, and the burgeoning Fitzgerald neighborhood and nearby Avenue of Fashion, 53-year-old Marra saw opportunity in the forlorn facades. “I saw the buildings and thought, ‘This is insanity,’” he said. So in 2015, when he saw a “for sale” sign posted, he decided to buy almost an entire block of McNichols — six vacant storefronts comprising 22,000 square feet. He closed on the $175,000 purchase just a couple months after buying a house on Ohio Street, a few blocks away. When Ken Brown, 51, first traveled the corridor, he saw it through the eyes of his wife, who grew up in the neighborhood and remembers it thriving. "My wife would always point things out to me passing by, like, ‘That’s where we used to do that’ and ‘That’s where the old restaurant was.’” So, Brown got the idea to open a restaurant. Marra and Brown met last spring through Detroit’s Motor City Match program. They connected right away and cooked up an ambitious plan: a $1.25 million development aimed at providing jobs for residents and boosting community morale. Brown won a $50,000 grant from Motor City Match to help push the vision forward. He plans to invest $200,000 to open and operate Simply Breakfast restaurant in 3,100 square feet at 7526 W. McNichols Road, part of Marra’s bundle of storefronts and formerly home to a Sanders shop and Winkelman’s store. Brown also purchased a 20 percent equity share in the other space. The neighborhood has been garnering more attention as the city and its partners target it for redevelopment with a vision from the playbook of Midtown Detroit Inc., which seems to have found an effective formula in the Midtown neighborhood. After opening Simply Breakfast, the partners plan to have the rest of the store white-boxed. Brown said Toarmina’s Pizza has signed a letter of intent to open a store on the corner of San Juan Drive and he is in talks with a credit union interested in space. The partners hope to fill in the rest with a low-rent entrepreneurial club and possibly a fitness center and doctor’s office.

BUSINESS NEWS J A national nonprofit run by Kimbal Musk, the brother of serial entrepreneur Elon Musk, aims to bring food education and outdoor

Longtime specialty toy store the Doll Hospital & Toy Soldier Shop in Berkley is closing its doors after 70 years in business. The family that owns the store cited pressures of online retail for its closing. The doors will shut permanently after a liquidation sale that is expected to run until around the end of March. The store’s hallmark was its doll repair services. It claims to have restored approximately 250,000 dolls since Kay Parish started her business in 1948 by purchasing a doll hospital.

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

$2 million

The amount Subaru invested in the American Center for Mobility, joining Toyota, Ford and others.

83rd

Little Caesars Arena’s ranking for 2017 arena concert ticket sales, despite being open for less than four months of the year.

The number of years the Doll Hospital & Toy Soldier Shop in Berkley was open before it decided to shut its doors due to the pressures of online retail.

“learning garden” classrooms to more than 100 metro Detroit schools as part of a $5 million plan to connect the city’s youth to real food. J During the North American International Auto Show’s opening at Cobo Center, U.S. Transportation Secretary Elaine Chao told attendees the federal government would introduce new federal autonomous guidelines this summer in an effort to modernize regulations for autonomous cars. She also pleaded with auto executives and media to educate the public on the future of driving, or lack thereof. J Auburn Hills-based BorgWarner Inc. is gaining traction in expanding its product portfolio in hybrid and electric vehicles. By 2020, the supplier will have more content on electric vehicles and hybrids than gasoline-powered cars. J Arbor Brewing Co. has ditched bottling its beer for canning as it undergoes its biggest facelift and investment in the past decade. J Long-running Ferndale dance club Boogie Fever was expected to return and host a grand reopening Saturday after closing down in 2014

and reinventing itself as Twisted Tavern and Red Door Night Club. J Adient plc is tapping into the commercial aircraft industry under a new joint venture with Boeing Co. called Adient Aerospace, which will manufacture seats for airplanes. J Ten Detroit groups received a total of $97,500 in grants to carry out a third round of lot revitalization projects across the city through Detroit Future City’s Field Guide to Working with Lots program. J The Kresge Foundation committed an additional $6 million over the next three years to support neighborhood revitalization in Detroit. J A Manhattan-based boutique fitness center that specializes in rowing called Cityrow plans to open a location in Ann Arbor, its first outside New York City. J A massive gas line fire that erupted in Orion Township near Auburn Hills in November was caused by the weight of fill material dumped on the site of the break, Consumers Energy Co. said in a statement. J The state of Michigan ordered Barksdale Funeral Home Inc. in Detroit to shut down operations after inspectors determined it to have “deplorable, unsanitary conditions.” J China’s Anhui Zhongding Holding (Group) Co. Ltd. plans invest $6.9 million in a 30,000-squarefoot technology center in Northville Township. J Infectious disease specialist Nicholas Gilpin, D.O. has been appointed chief medical officer for Beaumont Hospital, Grosse Pointe. J Henry William Saad, who retired from the Michigan Court of Appeals in November, joined Young & Associates in Farmington Hills. J Henry Ford Health System and Beaumont Health said they were temporarily restricting access to visitors to protect patients from an intensifying flu season. J Metro Detroit median home sales were up 6.3 percent in December from a year ago, according to data released by Farmington Hills-based Realcomp Ltd. II.

t next year’s North American International Auto Show, Detroit’s convention center could be sporting a new name. Maybe. The Detroit Regional Convention Facility Authority is actively talking to interested parties about buying the naming rights of Cobo Center, said Claude Molinari, general manager of Cobo Center. “The process is ongoing, and we are still meeting with candidates, and we probably will be announcing something in the not-so-distant future,” Molinari told Crain’s last week during the annual auto show’s industry days. Cobo Center’s regional governing authority has been shopping around the naming rights because the convention hall's annual $5 million state subsidy from taxes on hotels, liquor and cigarettes is set to dwindle to nothing by 2023. Last summer, Detroit Mayor Mike Duggan began publicly pushing for sale of the naming rights because the convention hall is named for former Mayor Albert Cobo, whose tenure as mayor in the 1950s was marked by a

racially charged agenda to restrict where African Americans could live in the city. But convention authority officials have been focused on the bottom line. And that’s made the naming rights proposition a little tricky, Molinari said. They don’t want to sell the rights to an existing corporate customer because it may anger a rival company, he said. “As an example, we couldn’t have the Ford convention center and expect General Motors to do business with us,” Molinari said. Neither of the rival automakers is vying for the naming rights, Molinari said. “It’s important that we don’t create that sort of conflict in the naming rights,” he said. “You have to find a naming rights partner that doesn’t conflict with all of our other business.” The Cobo Center general manager left the door open on just how soon there may be a naming rights deal to announce. “You can define near future any way that you think is appropriate,” Molinari said.

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

Ford Motor Co. custom-wrapped a Transit Connect cargo van last fall for Detroit Denim Co. to present its jeans at the Denim Days trade festival in New York City.

Detroit Denim sews up exposure at auto show

etroit Denim Co.’s partnership with Ford Motor Co. to promote its blue jeans using a Ford Transit Connect cargo van at a trade show in New York last fall resulted in some unexpected exposure at the Detroit auto show this week. At the North American International Auto Show, Ford has a Transit Connect van wrapped in denim print with Detroit Denim’s logo. Ford customized the van for Detroit Denim last fall when the 7-year-old garment company needed help promoting its line of jeans and women’s handbags at the Denim Days trade show in New York City, said Eric Yelsma, owner of Detroit Denim. “It kind of helped make the whole thing happen,” Yelsma said. After the October trade show, Yelsma said employees at Ford asked if they could show the van at the North

American International Auto Show, which runs this week at Cobo Center. The Dearborn-based automaker’s Transit Connect display at the auto show includes a sign explaining the history of how Yelsma turned his love for sewing into making hand-stitched men’s jeans. “They wanted to know if they could tell that story at the auto show,” Yelsma said. “And I was like, ‘Of course, I would be delighted.’” Detroit Denim manufactures and sells its various lines of men’s and women’s denim jeans at its facility in the city’s Rivertown warehouse district. The men’s jeans sell for $250 apiece on Detroit Denim’s website. The company gained some national exposure last year when Yelsma and his business partner Brenna Lane were featured on the CNBC business turnaround show “The Profit.”

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