Crain's Detroit Business, Feb. 12, 2018 issue by Crain's Detroit Business

1968 Tigers’ MVP mostly invisible in marketing Page 3

Denny McLain

A few questions for Ellis Island Tea’s CEO FEBRUARY 12 - 18, 2018 | crainsdetroit.com

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MANUFACTURING

Pot goes professional Marijuana business pulls in people who see a big opportunity By Dustin Walsh dwalsh@crain.com

LARRY PEPLIN FOR CRAIN’S

Marc Beginin and Nick Tennant founded Precision Extraction Corp. in Troy in 2015.

Precision Extraction Corp.’s Troy plant looks like another one of the many small manufacturing operations in the city. Inside the 18,000-square-foot building, workers fit hoses and nuts and gauges to stainless steel vats. Lab equipment and high-pressure vessels filled with solvents and other potions come together to form precise machinery with names like “The Judge,”

“The Predator,” and the “The Executioner.” Those names might be a hint that the machinery isn’t tooling used to stamp bumpers or gearshifts. Royal Oak-based Precision manufactures equipment to extract oils from one very specific product — marijuana. Once a seedy underbelly that has now morphed into a gray economy, Michigan’s marijuana industry is quickly professionalizing, thanks to new state regulations for medicinal use.

Michigan is now the second-largest medicinal marijuana state by registered card holders, behind California. The size of that market, and the potential that voters might legalize recreational use in November, are drawing experienced professionals and business savvy to the industry. That’s starting to create a robust supply chain typically reserved for more mature businesses. SEE MARIJUANA, PAGE 42

Blue horizons T

he tide is rolling in for St. Clair County, on the shores of the St. Clair River. After a decade of building on the region’s assets — its unmatched location at the gateway to Lake Huron, its inspiring nautical heritage, the hard work of local entrepreneurs and the willingness of regional leaders to set aside parochial interests and truly work together — momentum is building, and investors from beyond the region and state are starting to take notice. Read more on Page 11.

FRANK QUINLAN

HEALTH CARE

Mental health providers say they were shortchanged by state Medicaid By Jay Greene jgreene@crain.com

Michigan mental health provider organizations are alleging that the state Medicaid program has shortchanged the agencies by nearly $100 million over two years, leading some to consider cutbacks in services or other drastic measures later this year if their reserve funds drop to dangerous levels. crainsdetroit.com

State officials acknowledge that the 10 regional prepaid inpatient health plans, which manage state provider contracts, are getting less revenue for disabled, aged and blind program recipients, but they say that is because there are fewer Medicaid enrollees than expected. But executives and board members at three PIHPs — the Detroit Wayne Mental Health Authority, Vol. 34 No. 6

Oakland Community Health Network and Lakeshore Regional Entity in Norton Shores — say their analysis shows a steady increase in the Medicaid population, especially in the key demographics that are driving the reimbursement shortfalls — the disabled, aged and blind populations, known as DABs. At stake is whether the PIHPs have the resources to maintain sta-

SEE MEDICAID, PAGE 40

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S OF THE YEA

AARON ECKELS

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Walsh By Dustinom dwalsh@crain.c

 Michigan mental health authorities contend the state is shortchanging them by $100 million  Dispute is over disabled, aged and blind population and the correct reimbursement rate  Providers are concerned services to patients might be cut or limited starting later this year if issue not resolved

Newsmaker of the Year translate “I don’t think my qualities retiring Lear well to political office,” said Corp. CEO Matt Simoncini NewsmakCrain’s Thursday during the at MotorCity er of the Year program Detroit. Casino and Hotel in FOR CRAIN’S

ini weig Newsmaker Simonc

Need to know

INSIDE

018 RUARY 12, 2 N E S S // F E B TROIT BUSI CRAIN’S DE 6

NEWSMA KER

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ble funding to the 46 mental health agencies and providers in Michigan responsible for taking care of a growing number of covered patients. The alleged DABs reimbursement shortfall is on top of 5 percent cuts that started in 2013 and affected primarily the Wayne, Oakland and Macomb authorities.

CEO Matt SiOutgoing Lear Corp. to rest any pomoncini finally put al bid. tential gubernatori as the Simoncini, 57, speaking of the Year Crain’s 2017 Newsmaker the Motorat at an event Thursday Detroit, told the City Casino Hotel in 400 that he’s not than more of crowd leadership. cut out for political I don’t “Look, I’m outspoken. well to translate think my qualities said. political office,” he running for When asked about seat at the VIP Michigan’s governor the event, he said, reception ahead of ,” refer“Not unless it’s a dictatorship of cornature DETROIT BUSINESS KURT NAGL/CRAIN’S encing the autocratic CEO Wright porate leadership. Henry Ford Health System Simonpreclude the future of his doesn’t that But L. Lassiter III teases from Lear on Feb. at MotorCity cini, who is retiring company on Thursday g on politics. where he was 28, from commentin Casino Hotel in Detroit, CRAIN’S Anyone that Newsmaker of AARON ECKELS FOR “We do need RTA. recognized as a Crain’s 2017 has their head in Business, chats with thinks otherwise Detroit Year. the Crain’s truly of “Can we company ions Inc., the parent the sand ...,” he said. educate our and Hotel in Detroit. at MotorCity Casino can’t Crain, presiand COO of Crain Communicat interview with KC be a great city if we KC Crain, president of Lear Corp., on Thursday stage CEO Having TheCrain Simoncini, jobs? Opera to Matt of COO and kids or get people Newsmaker of the Year Michigan, the Michigan dent ted bus lines Co. Inc., the parent two uncoordina atre and The Parade Communications Transit Authorthe $50 million Detroit Business. (SMART and Detroit He’s also leading company of Crain’s is ridiculous. We ever negotiatMotown Museity) in Detroit ... don’t know if you’ve effort to expand the a train to Ann 40,000 square “I ... it’s the best should be able to take um, which will add ed with Dan’s team be able to get kids museum on West signed.” Arbor. We should feet to the existing worst deal I’ve ever to work at Newsmaker Crain’s Boulevard. other on a bus from Pontiac The Grand Mike further inare: Detroit Mayor Lear in Detroit.” Simoncini anticipates executive over philanthropic honorees Gilbert; Martha Firestone The Detroit-born volvement in Detroit Duggan; has turned the Detroit majority owner of the course of a decade a recesefforts as a retiree. company to Ford, chairman of around Lear following , moved a At Lear, he led the Lions; Vinnie Johnson, Detroit InnovaWright Lassiter sion-induced bankruptcy open its $10 million The Piston Group; of the compaof Henry an idea to boost cutting-edge outpost president and CEO Rapson, tion Center in 2015, ion for the III, Detroit and has Health System; Rip ny into downtown technological transformat in philanthropic to the city in Ford Foundation; been a major force company and a return as American president of the Kresge presiparticularly Tabron, region, y the founded for was circles which it La June Montgomer W.K. Kellogg 1917. Lear acthe Detroit. Metal Products in dent and CEO of on Detroit’s CEO of Duo from Detroit real Simoncini was born Elementaquired the building Foundation; Dug Song, Elslander, Clark Quicken Loans Van east side, attended estate kingpin and Security Inc.; Art Van and Outer Gilbert. Art Van Furniture, ry between Mack Avenue Inc. Chairman Dan n e State ut- founder of

<< Lear’s Matt Simoncini sounds off on his political aspirations, or lack thereof, and regional transit. Page 6 Art Van Elslander wins balloting for Crain’s Readers’ Choice Newsmaker of the Year. Page 7

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MICHIGAN BRIEFS

INSIDE

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

Herman Miller CEO to retire Herman Miller Inc.’s longtime President and CEO Brian Walker has decided to retire, the Zeeland-based firm announced last week. Of his nearly three decades at the company, Walker spent about half of his time at Herman Miller (Nasdaq: MLHR) as its leader. He will also step down from its board of directors. Walker, 56, said in a statement that it’s the right time for the next generation of leadership to takeover. Walker’s last day will be Aug. 31, but he will stay on to assist until a successor is identified, the company said in a news release. The board established a search committee composed of independent directors and retained an executive search firm to fill the CEO role. “During Brian’s tenure, Herman Miller has become a lean enterprise that keeps its promises and strives to improve each and every day,” Executive Chairman Michael Volkema said in the release. The office furniture manufacturer and provider of related technologies and services predicts it will yield $565 million to $585 million in net sales in 2018.

Engler asks Schuette to remove his name

John Engler, a former three-term Re-

publican governor of Michigan, is attempting to be all business in his new job as interim president of Michigan State University. Engler requested Attorney General Bill Schuette’s gubernatorial campaign stop using his name in campaign literature and websites touting an endorsement of Schuette for governor that he made in September — more than four months before he was thrust into job of leading his crisis-stricken alma matter. “Given that this new role is completely not political, he can’t be involved in any campaigns this cycle,” Engler spokesman John Truscott told Crain’s. Working on Engler’s behalf, Truscott said he relayed the request to Schuette’s campaign to remove the former governor’s name from its list of prominent supporters, which includes President Donald Trump and Vice President Mike Pence. “(Engler) will not be adding his name to anybody’s (endorsement) list,” Truscott said. A spokeswoman for Schuette’s campaign said they complied with Engler’s request last Wednesday morning. “Given the ongoing investigations by the Michigan Legislature, the Congress, the NCAA, the U.S. Department of Education and the independent prosecutor into Michigan State’s failure to deal with Larry Nassar’s sexual assaults over a 20-year period, the campaign has removed the name of the MSU president

CLASSIFIEDS

KEITH CRAIN

OPINION

PEOPLE

RON FOURNIER

HOUSE TV SCREENSHOT

Lt. Gov. Brian Calley (right) listens as Gov. Rick Snyder presents his final budget plan to the House and Senate appropriations committees on Wednesday at the state Capitol in Lansing.

from all materials,” Schuette spokeswoman Bridget Bush said in an email to Crain’s. On Jan. 31, the MSU board of trustees tapped Engler to lead the university through a crisis spawned by how campus leaders handled past complaints about Nassar, who has been convicted of sexually abusing girls and young women under the guise of medical treatment. Engler has attempted to quell concerns from faculty, students and his longtime critics in the Democratic Party that his support of Schuette would be a conflict as the attorney general investigates MSU. Schuette served as Engler’s agriculture department director 1991-94. “Bill Schuette’s investigating the uni-

versity, for crying out loud,” Engler said Jan. 31 during a news conference after his appointment. Presidents of public universities have to appear nonpolitical because they rely on support from legislators, donors and alumni from both political parties, said David Dulio, chairman of the political science department at Oakland University.

Snyder gives final budget presentation

Gov. Rick Snyder last Wednesday proposed boosting base funding for most of Michigan’s public schools by the largest amount in 17 years, spending more on road repairs than planned and ending the use of a company to feed state prisoners, the Associated

RUMBLINGS

WEEK ON THE WEB

Press reported. In his eighth and final budget presentation, Snyder asked lawmakers for a $240 per-pupil increase for school districts that get the minimum grant, which would amount to a 3.1 percent boost for more than 75 percent of traditional districts and all charter schools. Higher-funded districts receiving the basic grant would get $120 more per student in the 2018-19 budget, a 1.4 percent increase. “This is a significant increase and would close the equity gap between the high and low from the time we started (in office) by over 50 percent, which is very significant because we have many districts that are at the minimum,” Snyder said. The Republican governor also proposed shifting $325 million in general funds to road and bridge work, more than double the $150 million that is called for under a 2015 transportation-funding deal that is being phased in. And in a move that could spark opposition from at least some GOP legislators, he announced that a contract with Trinity Food Services set to expire July 31 will not be extended, by mutual agreement.

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Visit pmbc.connect.space/aero/details to register or for additional summit details.

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LEGISLATION

Auto insurance reformers: Get rid of no-fault Need to know

By Chad Livengood clivengood@crain.com

Michigan’s no-fault auto insurance law is seen as the nation’s gold standard of medical care for drivers critically injured in an accident. The 45-year-old law also is viewed as exemplifying waste and inefficiency because it lacks the kind of cost controls built into America’s modern health care system. Multiple attempts to rein in Michigan’s highest-in-the-nation auto insurance costs by imposing set payments for medical providers, capping total benefits per accident or creating tiered levels of coverage have all died on the legislative vine in recent years. That’s got lawmakers with constituents clamoring for lower insurance premiums kicking around a new idea after years of inaction in Lansing: Just get rid of the sys-

 Michigan’s no-fault auto insurance law is seen as the nation’s gold standard  Also is viewed as exemplifying waste and inefficiency  Plan floated last week to abolish the no-fault law

tem altogether. A group of Republican legislators floated a plan last week to abolish the no-fault law — where injured drivers theoretically get their medical bills paid regardless of who caused an accident, without protracted litigation — and replace it with a litigation-focused insurance law modeled after Ohio’s. But the proposed seismic change may just be a trial balloon — an attempt to get the various entrenched business interests of SEE NO-FAULT, PAGE 38

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SPORTS BUSINESS

HEALTH CARE

In ’68 marketing push, what to do with McLain?

Some hospitals feel impact of federal drug-discount cutbacks By Jay Greene jgreene@crain.com

By Bill Shea bshea@crain.com

Denny McLain is many things to Detroit Tigers fans: Baseball’s last 30-game winner — propelling them to the 1968 world championship and the league MVP that year. To others, he’s an arrogant jerk, a convicted criminal with ties to drugs and the mob, with two terms in federal prison on his rap sheet. A heartless businessman who stole employee retirement funds. A vulgar, glib self-promoter. He’s also looked on sympathetically by many as the broken-hearted father to a daughter killed by a drunken driver, and a sports radio fixture who’s the gregarious hero happy to tell stories at baseball card shows. The 73-year-old ex-Tigers pitcher is certainly a one-man Greek tragedy. A bull who carries around his own China shop. Although the Tigers won’t say it, that legacy is likely keeping him from being a focus of the upcoming season’s 50th anniversary celebration of the 1968 team, a centerpiece of this year’s Tigers marketing efforts. McLain has been invited to participate in a weekend commemoration of the 1968 team in September, but that appears to be the limit of the involvement the Tigers seek from him. There won’t be a Denny McLain bobblehead — in a year when the SEE MCLAIN, PAGE 39

DAVID DUROCHIK/AP

Detroit Tigers pitcher Denny McLain during a game from the 1968 season, during which he won 31 games and was the American League Most Valuable Player.

Three dozen hospitals in Michigan are adjusting to a new federal rule that slashed Medicare reimbursement rates on certain drugs from 6 percent above the sales price from pharmaceutical companies to 22.5 percent under the sales price, a move that is estimated to save drug companies $1.6 billion annually. It will also hit some safety-net hospitals hard. Some 37 Michigan hospitals will lose a total of $73 million in revenue, according to the Michigan Health and Hospital Association. Those hospitals in Detroit include Henry Ford Hospital and Barbara Ann Karmanos Cancer Hospital, MHA said. The federal ruling on the socalled 340B drug discount program from the Trump administration and the Centers for Medicare and Medicaid Services took effect Jan. 1. More than 2,500 nonprofit hospitals nationally participate in the program now, including 108 of Michigan’s 130 nonprofit hospitals, the MHA said. But not all hospitals are hurt by the 340B drug pricing program cuts. Michigan’s 36 critical access hospitals like Allegan General Hospital and Aspirus Iron River Hospi-

Need to know

 Michigan hospitals adjusting to cuts in a federal drug discount program that helped serve low-income patients  Some 37 hospitals will lose $73 million in revenue this year  The so-called 340B drug discount program forced drug companies to lower prices for covered drugs

tal and 17 “sole community hospitals” like Dickinson County Memorial Hospital are exempt. The MHA acknowledged that many other hospitals will break even when increases in Medicare’s drug reimbursement rates are factored in. An additional 80 hospitals in Michigan will come out ahead. Those hospitals will see a net gain of $32 million. Overall, Michigan’s hospitals will lose $41 million. “It’s important to remember that the intent of the 340B program was to help hospitals that serve the most vulnerable patients, and we’re troubled by the fact that the CMS rule is an arbitrary decision with no guarantee that this funding continues to stay in health care,” the MHA said in a statement to Crain’s. SEE CUTBACKS, PAGE 41

MUST READS OF THE WEEK Fournier: Patterson plays games instead of leading

Scenes from a stock market correction

Woodward I-75 overpass may be widened for retail

The Oakland County executive cracks open an old, tired playbook in his State of the County address. Page 8

Some of the region’s biggest companies took hits on the market’s wild ride last week. Page 43

Potential plan comes from proposal Olympia made to the state. Page 43

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WOMEN IN LEADERSHIP

A few questions for: Nailah Ellis-Brown By Rachelle Damico

Special to Crain’s Detroit Business

Nailah Ellis-Brown is the founder and CEO of Ellis Infinity LLC. The company, which does business as Ellis Island Tea, produces natural Jamaican hibiscus bottled tea. Ellis-Brown started selling tea out of the trunk of her car. Now manufactures her product out of a 4,000-square-foot plant near the Russell Industrial Center in Detroit. The recipe was invented by her great-grandfather, Cyril Byron, a Jamaican immigrant who came to America in the early 1900s. Byron was a master chef for the Black Star Line, a shipping and passenger line started by Marcus Garvey, a leader in the black nationalist movement. The tea was served on the ship. Ellis Island Tea is sold in more than 800 stores nationwide, including Whole Foods, Mejier, Kroger and Sam’s Club. The company has 20 employees. What drew you to entrepreneurship?

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I’ve always been drawn to the idea of entrepreneurship as a whole. The principal of my elementary school used to have entrepreneurs come to the school to speak, and I fell in love. I started selling candy and chips in elementary school, and later in high school. I landed my first job at 16 years old, but working for other people never worked out. I’ve always had to do my own thing, and it was more natural to work for myself. After high school you planned to obtain a business degree from Howard University, but you left the program. What led you to that decision?

During freshman year, my plan was to get a business degree, end up with a high-paying job on Wall Street, save the money I made and quit to pursue my dreams of entrepreneurship. Then I realized how student loans worked. I would have graduated with about $100,000 worth of debt.

It just didn’t sit well with me that I would start that deep in the hole. I thought, if I’m going to go after something so high-risk like entrepreneurship, why not go after it then? I left school, and the trial and error for the recipe began then. What inspired you to put your great-grandfather’s tea on the market?

Before my great-grandfather died, he passed the recipe down, and his instructions were for the recipe to be sold and not told — which means put it on the market. It stayed in the family generation after generation, but no one ever put it on the market. My family would make it for get-togethers like Thanksgiving and Christmas, and everybody loved and raved about it. I figured this could be my ticket to entrepreneurship, and I could carry on my family legacy at the same time. What were your early years like before you hit supermarket shelves, and you were selling tea from the trunk of your car?

It was just me — brewing the tea, bottling it up and filling up my cooler. The next morning, I would go out and sell. I mainly sold at a Home Depot parking lot in Detroit. I didn’t come home until I sold out.

How do you vet employees while trusting them with your family’s recipe and legacy?

We did have quite a few challenges in the beginning. We couldn’t pay people enough, and no one shared the vision I had. No one was as hungry as me or as invested as I was. But as cash flow increased, and you’re starting to pay more competitive salaries, that became less of a challenge. The team that I have now is inspired by the history. They’re drawn to the story and seeing how I built this from nothing — from selling tea out of my trunk to having a brand new state-of-the-art production operation. Last year, you won a reality TV show business competition called “Queen Boss,” competing against 17 other contestants for the Queen Boss title and a $25,000 cash prize. How did that opportunity come about, and what was the experience like?

They did a casting call for entrepreneurs who were looking for funding. I applied and did a Skype interview and they selected me to compete. For me, it wasn’t about the money at all. It was about competing and winning. I was turned on by the challenge of it all. All the women that competed were from New York, and New York is known for being a city of hustlers. I wanted to see if I could go there and out-do these New York hustlers. It was a pretty tough competition, and to come out on top being the only Detroiter felt really good.

“The principal of my elementary school used to have entrepreneurs come to the school to speak, and I fell in love.” Nailah Ellis-Brown, founder and CEO of Ellis Infinity LLC

Justin Milhouse

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NEWSMAKERS OF THE YEAR

“I don’t think my qualities translate well to political office,” retiring Lear Corp. CEO Matt Simoncini said Thursday during the Crain’s Newsmaker of the Year program at MotorCity Casino and Hotel in Detroit. AARON ECKELS FOR CRAIN’S

Newsmaker Simoncini weighs in on politics, transit, education

By Dustin Walsh dwalsh@crain.com

Outgoing Lear Corp. CEO Matt Simoncini finally put to rest any potential gubernatorial bid. Simoncini, 57, speaking as the Crain’s 2017 Newsmaker of the Year at an event Thursday at the MotorCity Casino Hotel in Detroit, told the crowd of more than 400 that he’s not cut out for political leadership. “Look, I’m outspoken. I don’t think my qualities translate well to political office,” he said. When asked about running for Michigan’s governor seat at the VIP reception ahead of the event, he said, “Not unless it’s a dictatorship,” referencing the autocratic nature of corporate leadership. But that doesn’t preclude Simoncini, who is retiring from Lear on Feb. 28, from commenting on politics. “We do need RTA. Anyone that thinks otherwise has their head in the sand ...,” he said. “Can we truly be a great city if we can’t educate our kids or get people to jobs? Having two uncoordinated bus lines (SMART and Detroit Transit Authority) in Detroit ... is ridiculous. We should be able to take a train to Ann Arbor. We should be able to get kids on a bus from Pontiac to work at Lear in Detroit.” The Detroit-born executive over the course of a decade has turned around Lear following a recession-induced bankruptcy, moved a cutting-edge outpost of the company into downtown Detroit and has been a major force in philanthropic circles for the region, particularly Detroit. Simoncini was born on Detroit’s east side, attended Clark Elementary between Mack Avenue and Outer Drive, graduated from Wayne State University and remains one of the top fundraisers for the United Way for Southeastern Michigan. He also serves on the boards of Wayne State University Foundation, Detroit Economic Club, Business Leaders of

KURT NAGL/CRAIN’S DETROIT BUSINESS

AARON ECKELS FOR CRAIN’S

KC Crain, president and COO of Crain Communications Inc., the parent company of Crain’s Detroit Business, chats with 2017 Newsmaker of the Year Matt Simoncini, CEO of Lear Corp., on Thursday at MotorCity Casino and Hotel in Detroit.

KURT NAGL/CRAIN’S DETROIT BUSINESS

Crain’s Detroit Business Publisher Ron Fournier introduces Pontiac Mayor Deirdre Waterman as a Newsmaker of the Year on Thursday at MotorCity Casino Hotel in Detroit.

Michigan, the Michigan Opera Theatre and The Parade Co. He’s also leading the $50 million effort to expand the Motown Museum, which will add 40,000 square feet to the existing museum on West Grand Boulevard. Simoncini anticipates further involvement in Detroit philanthropic efforts as a retiree. At Lear, he led the company to open its $10 million Detroit Innovation Center in 2015, an idea to boost technological transformation for the company and a return to the city in which it was founded as American Metal Products in 1917. Lear acquired the building from Detroit real estate kingpin and Quicken Loans Inc. Chairman Dan Gilbert. “Demographics. If you want outof-the-box thinking and creativity, you need to be in Detroit. It’s a recruiting tool,” he said during an on-

Henry Ford Health System CEO Wright L. Lassiter III teases the future of his company on Thursday at MotorCity Casino Hotel in Detroit, where he was recognized as a Crain’s Newsmaker of the Year.

stage interview with KC Crain, president and COO of Crain Communications Inc., the parent company of Crain’s Detroit Business. “I don’t know if you’ve ever negotiated with Dan’s team ... it’s the best worst deal I’ve ever signed.” The other Crain’s Newsmaker honorees are: Detroit Mayor Mike Duggan; Gilbert; Martha Firestone Ford, majority owner of the Detroit Lions; Vinnie Johnson, chairman of The Piston Group; Wright Lassiter III, president and CEO of Henry Ford Health System; Rip Rapson, president of the Kresge Foundation; La June Montgomery Tabron, president and CEO of the W.K. Kellogg Foundation; Dug Song, CEO of Duo Security Inc.; Art Van Elslander, founder of Art Van Furniture, Van Elslander Capital and the A.A. Van Elslander Foundation; and Deirdre Waterman, mayor of Pontiac.

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AARON ECKELS FOR CRAIN’S

Crain’s Editor and Publisher Ron Fournier (left) presents the Readers’ Choice award for Art Van Elslander as Newsmaker of the Year to his son, David, on Thursday at the Newsmakers event at MotorCity Casino Hotel in Detroit.

Readers’ Choice Newsmaker of Year is Art Van Elslander Need to know

By Dustin Walsh dwalsh@crain.com

Art Van Elslander, founder of Art Van Furniture, was honored Thursday as the Readers’ Choice for Crain’s Newsmaker of the Year at an event celebrating winners at the MotorCity Casino Hotel in Detroit. Van Elslander secured the most votes out of more than 1,000 cast in the inaugural balloting for the award. His son David accepted the award in his father’s honor at the event. In 2017, Van Elslander sold his Warren-based furniture chain to Boston-based private equity firm Thomas H. Lee Partners LP, putting it on a track for expanded growth. Terms of the deal were not released, but a Crain’s analysis of comparable deals put the value of the sale around $550 million. Van Elslander founded the chain 58 years earlier in a storefront on Detroit’s Gratiot Avenue as “a one-man show,” buying, selling, cleaning, dusting and putting all of the furniture together himself. By the time of the sale, the company had grown to more than 100 stores across five states, over 3,500 employees, a franchising program and nearly $1 billion in revenue.

J Art Van Elslander wins Crain’s Readers’ Choice award for Newsmaker of the Year J Selling his company and philanthropic efforts were highlighted J

More than 1,000 votes were cast

That was up from a reported $650 million in total revenue in 2015, which landed Art Van at No. 35 on Crain’s 2016 Private 200 list. He also launched a new, for-profit company, Van Elslander Capital LLC, in Birmingham to make targeted investments and acquisitions, breaking ground on a new 11,000-square-foot office building on Woodward Avenue at Oak Street in Birmingham, and founded a personal foundation, the A.A. Van Elslander Foundation. Van Elslander also committed $20 million to the Solanus Casey Center. The gift supports the expansion of the center and its campus to enhance the Catholic pilgrimage site and revitalize the lower eastside Detroit neighborhood around it. While Van Elslander secured the Readers’ Choice, retiring Lear Corp. CEO Matt Simoncini received the Crain’s Newsmaker of the Year award.

St. John Providence Foundations Congratulates

Crain’s 2017 Newsmaker of the Year: Matt Simoncini Lear Corporation and

Crain’s 2017 Reader’s Choice Newsmaker of the Year: Art Van Elslander Art Van Furniture Van Elslander Capital A.A. Van Elslander Foundation

CONGRATULATIONS, ART VAN ELSLANDER. Thank you for your incredible support of The Parade Company and making parade magic for generations in Detroit.

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OPINION COMMENTARY

Playing games instead of leading on mass transit T

here are two kinds of politicians. Those who lead. Those who follow. Oakland County Executive L. Brooks Patterson is a follower, nodding to his constituents’ baser instincts rather than leading them to higher ground. Given one more chance to unite metro Detroit behind a mass transit system that would fuel economic mobility and growth, the 79-year-old Republican is sticking with his tired old script. The one with racially tinged tropes propping up a politics of division and grievance. In his State of the County address on Wednesday, Patterson vowed to oppose any regional transit plan that “forces” nine affluent Oakland County communities into a new property-taxing district for metro Detroit. “I’ve been asked to force into the tax plan those nine communities … that have long ago opted out of the current transit tax — they don’t see a benefit,” Patterson said. “Some political leaders south of Eight Mile want me to do it anyway.” Eight Mile Road, of course, is a northern border for Detroit and Wayne County, which are led by regional mass transit boosters, Mayor Mike Duggan and Wayne County Executive Warren Evans. Let’s face it: For decades, Eight Mile also has been the symbolic dividing line between communities of white and color, of wealth and poverty, of the powerful and the powerless. Patterson knows what buttons he’s pushing. According to Crain’s reporter Chad Livengood, the Oakland County executive said he offered a deal to regional leaders on a new Regional Transit Authority that would raise $1.2 billion in taxes for an improved mass transit network. He would exclude from that taxing coalition Novi, Waterford Township, Lake Angelus, Rochester, Rochester Hills, Keego Harbor, Sylvan Lake, Orchard Lake and Bloomfield Hills. Patterson complained that elected leaders in Detroit, Wayne County and Washtenaw County want those nine communities — which opted out of the Suburban Mobility Authority for Regional Transportation in the mid-1990s — included in a proposed service area to raise nearly $1.7 billion in transit taxes over 20 years. “If someone doesn’t see the rub here, they must be playing ‘Candy Crush’ on their cell phone,” Patterson joked. That’s a great line — short as a tweet with a pop cultural reference. But it doesn’t address the challenge at hand: The economics of a regional transit system don’t work unless the entire region supports it. And the entire region needs it — the latest proof delivered by Amazon.

RON FOURNIER Publisher and Editor

com in rejecting metro Detroit as a possible home for its second headquarters. Want more evidence? When Duggan pitched for a Foxconn Technology Group plant last summer, executives of the Taiwanese electronics company worried that the region didn’t have enough skilled workers and those workers had no easy way to get to work. “They probably spent an hour with me on the bus routes,” Duggan recounted. In fairness to Patterson, the 2016 mass transit initiative was poorly conceptualized and communicated. That’s why voters narrowly rejected it. Patterson shouldn’t blindly follow Duggan, Evans and other pro-transit leaders down the path of their choosing. He should both represent his constituents’ interests — which, of course, don’t mirror the interests of Wayne County residents — and persuade them to support a sensible regional mass transit system that includes everybody in the burdens and benefits. It would require leadership to explain to Bloomfield Hills residents that the companies they own or run can’t thrive if the region’s talent isn’t hyper mobile; that their children won’t stay in Michigan if companies like Amazon and Foxconn continue to bypass the state for more mobile communities; that the people who work in the businesses around Bloomfield Hills, and who serve food and drinks to Oakland County residents, often come from south of Eight Mile. I don’t know enough about mass transit and metro Detroit politics to tell you exactly what a comprehensive, compromise plan would entail, but I’m reasonably confident we can’t get there with old talking points — and without a big, rich chunk of Oakland County. If Patterson doesn’t see the rub here, he must be playing Pac-Man on his flip phone. 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.

Does anyone care about the impact? T

he world -- and some automakers -- seem intent on rushing headlong into the adoption of electric vehicles. But I, for one, have concerns about potential and unanticipated consequences that may come from electrification. Can our power companies supply the planned increase in electric vehicles in our state? The two major companies, Consumers Energy and DTE Energy, are both working with automakers to expand consumer education — and the number of charging stations. (We have 14,000 electric vehicles and 1,000 charging stations now, the state tells us.) If more electric vehicles are sold without a big increase in charging stations, it might affect tourism when folks realize they may not drive up north easily without a stop to charge. Of course, any dire consequences I propose are based on the idea that

KEITH CRAIN Editor-in-chief

electric vehicles will be mandated, which some states, like California, are proposing. Let's say a mandate were imposed today. Would it affect the sale of vacation homes in Michigan? When people realize they can’t get to their second homes in Northern Michigan without a desperate search for a charging station, will they be as interested in buying vacation homes a four or five-hour drive away? Accessibility is important in real estate values.

Today’s electric vehicles do not have the range or the convenience of quick refueling for vacation or longdistance travel. Today’s electric vehicles do not have the range or the convenience of quick refueling for vacation and long-distance travel. Whether they develop fuel cells that give consumers quick refueling and long-range travel remains to be seen. I am sure that there are plenty of wiser, smarter folks out there who are well aware of these challenges, and I can only assume that they assume someone will come up with a solution in the next couple of decades. Let us hope the inventors are busy.

TALK ON THE WEB Highlights from our readers’ comments this week on our website, crainsdetroit.com.

No man, or county, is an island

I was born in, schooled in, and lived and worked in Detroit. I live now in Oakland County. When people (around here or around the world) ask me where I'm from, I tell them I'm from Detroit. To paraphrase President Kennedy, “Ich bin ein Detroiter” ... And to quote John Donne,

“No man is an island.” It’s too bad L. Broks Patterson doesn’t get that, and that he thinks he can erect a wall around Oakland County. Parochialism has stood in the way of regional solutions to regional problems, and most certainly impaired any possibility of an Amazon H2 here. Mr. Patterson, “Ich bin ein Oaklander” doesn’t ring true. jungoni

Patterson has it right

Patterson is correct. America is about choice, let’s choose to modernize, rather than go backward with

rail. Other cities are saddled with the old fashioned rail system, an expensive and outmoded type of transportation that taxpayers have to pay for. We can start fresh, and without the tax burden. An analogy might be some folk insisting we invest in old fashioned land lines, when smart phones is the new technology. Forget mass transit being paid for via taxes. Taxes should be lowered instead. We should be looking for ways to cut costs. diecuts

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

LETTERS

No-fault system delivers on promises To the editor: Many people can hardly imagine how life-changing a car accident can be. A serious car accident can cause a person to become paralyzed or put them into a coma. Due to the devastating and sometimes lifelong effects of car accidents, Michigan enacted the auto no-fault law to provide a self-funded system of paying for catastrophic medical treatment, claims that exceed $555,000 in allowable expenses over a lifetime. Under Michigan auto no-fault, drivers pay an assessment for every

car they insure. The current annual assessment is $170 per vehicle. The funds are held by the Michigan Catastrophic Claims Association (MCCA). The no-fault system delivers on its promises every day. Currently, more than 16,000 people in Michigan who have catastrophic injuries are being covered by the no-fault system. The system may not be perfect, but it has created a way to pay for injuries that would otherwise bankrupt most families. Rep. Lana Theis sponsored House Bill 5013 as way to reform auto no fault. The bill was flawed and was rejected by the Legislature. The bill would have significantly

limited coverage following auto accidents. Despite some people’s rhetoric, traditional health insurance policies, Medicare and Medicaid do not cover the long-term care needs that catastrophic injuries require. Rep. Theis claims that she is refusing to help wealthy special interest group’s “fatten their golden goose.” She failed to mention that the Michigan Insurance Coalition paid $80,000 into an administrative account run by Rep. Theis’ husband on Sept. 13, 2016 (Michigan Campaign Finance Network). The Michigan Insurance Coalition was formed to provide lobbying activities for insurance companies. In January 2017, Rep. Theis be-

came the House Insurance Committee chairperson. Since that time, she has made it her mission to dismantle our no-fault system. Rep. Theis claims that the no-fault system is crumbling and that a collapse in inevitable. Actually, the assets held by the MCCA have grown each year for the last three years, and the assessment was lowered in 2015. The assessments for 2016, 2017 and 2018 are all lower than the annual assessments for 2013, 2014 and 2015 (MCCA). People constantly compare Michigan auto insurance rates with other states to argue that Michigan drivers are being overcharged for auto insurance. According to the Insur-

ance Information Institute, Michigan drivers pay on average $1,231 per vehicle, or about $342 more than the national average. (Nearly $100 of that difference is due to the relatively high cost of collision coverage.) What do we get in return? Medical costs are covered for life to the extent they are reasonably necessary. People are not forced to litigate who is at fault. Families do not go bankrupt. While there are opportunities to improve the no-fault system, when you look at the cost versus the benefits of no-fault, it becomes clear that Michiganders have the best auto insurance in the country. Margaret L. Browning Attorney

No-fault system isn’t the problem To the editor: Once again Michigan’s no-fault insurance, for medical coverage that works, is being assaulted. If you are in an auto accident in Michigan and receive catastrophic injuries the cost of your care is immediately covered, for life. A group of legislators insist this no-fault coverage is the cause of Michigan’s outrageously high auto insurance rates. They want to end no-fault. Wrong! Insurance companies’ medical costs are capped at $555,000. Once this level is reached, the Michigan Catastrophic Claims Association (MCCA) takes over. This is a fund paid for by all insured in Michigan, not by the insurance companies. Claims that the fund is insolvent is unverifiable since the insurance executives managing the fund insist their activities are exempt from FOIA. Other states do have lower rates. Their insurance companies are not required to provide coverage for the cost of accident-related long-term medical care. In Michigan, you must purchase PIP, Personal Injury Protection, insurance. If you need lifelong medical care in other states, you are on your own, unless you were wealthy enough to buy optional PIP coverage. If you don’t, you must rely upon the slow grind of the legal system (tort law) to obtain compensation for your injuries. The defects in that system, bankrupting individuals, their families and condemning the injured to pain and suffering, is why “no-fault” was created. The problem is not no-fault! Our high cost is a symptom, not a cause. Cost contributors are the runaway cost of medical care, a dysfunctional rate setting system used by insurers, loophole-ridden insurance law and the failure of the Legislature to appropriate funds for fraud enforcement. Did I mention that the law allows medical providers to charge auto insurers whatever they want? That’s correct, the law allows charges three times as much, or higher, than what health insurers pay. Our Constitution says we organized government to promote the general welfare. Labeling symptoms as problems and relying on private companies for “solutions” is not promoting the general welfare. Legislators, why are you trying so hard to end a system that works and that the people support by accepting the bogus claim that “No Fault” is the problem? Chuck Fellows South Lyon

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FOCUS ST. CLAIR COUNTY

IT’S GOOD TO BE BLUE

ST. CLAIR COUNTY COMMUNITY COLLEGE

The campus of St. Clair County Community College, which is playing a major role in the region’s revival.

Inside JJA collaborative approach to economic

development pays off for St. Clair County. This Page JJHistoric inn in heart of St. Clair gets $35 million revival. Page 12

A collaborative approach to economic development pays off for St. Clair County

JJLive theater in Marine City: A “crazy” idea that totally worked. Page 14

By Tom Henderson

JJGrand Rapids-based developer sees

The dramatic recent economic resurgence in Port Huron and St. Clair County hasn’t come as a surprise to Dan Casey, the CEO of the region’s Economic Development Alliance, one of the oldest economic development agencies in the state, founded in 1952. The EDA has about 160 members, including many of the biggest employers in the county. Before taking the job in Port Huron seven years ago, Casey had been manager of economic development for the city of Rochester Hills for seven years, and for five years before that had managed business retention and attraction programs for the city of Southfield. “I came in just as the recession was winding down,” he said. “Before I took this job, I talked to a lot of people throughout metro Detroit, and everyone thought this area had great potential that had never been realized,” said Casey, ticking off a handful of crucial infrastructure strengths, including the heavily traveled Blue Water Bridge border crossing to Canada, a rail line under the St. Clair River to Canada, two interstate freeways,

Port Huron potential. Page 16

JJCarving out a niche in high-end guitars. Page 18 JJSt. Clair County Community College invests in Port Huron’s urban renewal. Page 20 JJMcLaren Hospital moves closer to finish

line on major development. Page 22

JJInternational boat show brings heritage home to Port Huron. Page 26

thenderson@crain.com

Need to know

JJCivic and business leaders in St. Clair County work together to push priority projects forward JJCurrently pushing for a coding school, a new main library and a theatre festival JJResidential development surging in the region

a deep water port, rail lines and a large rail yard just west of Port Huron. It’s an hour’s drive to the big market of Detroit and, last but certainly not least, it has all that blue water. “We had all these assets that hadn’t been realized. I thought when I took the job there was tremendous potential,” he said. “When I got here, what impressed me most was the core group of people who wanted to work together to make a difference.” That includes a coalition of civic and business leaders in the county that calls itself Blue Meets Green, which was created in 2009 at the height of the recession to buttress the work of the Economic Development Alliance. The “blue” is a reference to the region’s long use of “blue water” as a branding term, with “green” a reference to the color of money and

Bluewater View Condominiums, a mid-rise project, broke ground in November on the St. Clair River within view of Lake Huron.

economic development. The group’s mission statement is: “Develop the Blue Water Region into a prosperous, sustainable economic environment through the united effort and commitment of the private, nonprofit and public sectors.” Blue Meets Green isn’t officially a legal entity. About 40 members meet every other month to look at regional economic development projects and discuss which projects they want to use their resources and influence to help advance. Current projects the group is pushing, which were announced

last April following a half-day retreat in February by 90 stakeholders, include development of a coding school and training facility in the county, a new main library, the creation of a seed fund for startup companies and launching the Michigan Stage Festival, a project begun by Tom and Kathy Vertin, owners of two live-performance theaters in Marine City. Their goal is to create a summer-long theater venue in St. Clair to rival the Stratford Festival in Ontario. (See related story, Page 14.) SEE BLUE, PAGE 24

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Historic inn in heart of St. Clair gets a $35 million revival By Tom Henderson

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thenderson@crain.com

There may be no greater symbol of the renaissance going on in towns along the St. Clair River than the $35 million restoration of the iconic St. Clair Inn in the city of St. Clair, which is expected to reopen in March 2019. The inn was launched during the golden age of Michigan power boating, when the Chris-Craft, Hacker and Gar Wood boat companies, in plants along and near the St. Clair River, made the power boats that captured the countryâ&#x20AC;&#x2122;s fancy and brought manufacturing and wealth to the region. The St. Clair Rotary Club decided in 1925 that the city should have a Jeff Katofsky: grand hotel befitBought three ting the areaâ&#x20AC;&#x2122;s properties in status as the cenMichigan. ter of the boating world, and the St. Clair Hotel Corp. was formed. In July that year, a public offering raised $180,000 to build a 60room hotel. When it opened on Sept. 22, 1926, it was the first U.S. hotel with air conditioning. The inn was added to the National Register of Historic Places in 1995. In 2014, after a long decline under a series of ineffectual owners, the inn closed its doors. It was a gut punch to city and county residents. Generations of high school kids got their first jobs bussing tables or washing dishes there. For decades, members of Kiwanis and the Optimists and the Lions Club held their monthly meetings there. Couples got married there, their kids got married there, and their grandkids got married there. â&#x20AC;&#x153;It was an amazing place. People came from all over. It was bustling, full of energy, it brought people into town,â&#x20AC;? said Bill Cedar, who has been

Need to know

JJCalifornia-based developer Jeff

Katofsky renovating St. Clair Inn for $35M JJInn was built in 1926 and was part of generations of St. Clair history JJKatofsky also owns Sugar Loaf Resort in the Leelenau Peninsula

St. Clairâ&#x20AC;&#x2122;s mayor for 18 years and has lived there all his life. â&#x20AC;&#x153;My parents got married there. My daughter got married there. When it closed, it was gloomy here. Like this day,â&#x20AC;? said Cedar, the sky dark and threatening outside his window. â&#x20AC;&#x153;It was always the hub of town. It has so much history. If those walls could talk, they could tell you some stories. I could tell you some stories,â&#x20AC;? said Mike LaPorte, the cityâ&#x20AC;&#x2122;s mayor pro tem and a 27-year member of the city council who owns the Voyageur in St. Clair, a combination restaurant, bowling alley and sports bar. LaPorte worked at the St. Clair Inn for 30 years, more or less growing up there. He got a job tending the grounds when he was 14. Later, he was a busboy, waiter, bartender and, for 20 years, the manager, leaving in 1996 just as things started to go south. â&#x20AC;&#x153;The inn changed hands three times, and each time the new group ran it down more,â&#x20AC;? he said. In its heyday, the inn employed 97 and prided itself on unmatched service. At its nadir, it employed a fraction of that, and service was spotty, at best. Each owner came in with grand plans and big announcements, and what turned out to be empty promises. Late in 2015 came news of a new owner, a California developer named Jeff Katofsky, who also had big plans. The news was greeted with skepticism. â&#x20AC;&#x153;When I heard the numbers, I thought, â&#x20AC;&#x2DC;How are you going to do that?â&#x20AC;&#x2122;â&#x20AC;? said Cedar. Katofsky was floating a possible budget in the tens of

millions of dollars. The skepticism has vanished. Katofsky has financing in place, has hired a construction manager, St. Clair-based Westhaven Builders LLC, and an architect, Vincent Cataldo of the St. Clair firm of Infuz Ltd. The renovation that began in September is in full swing. Plans include: J Three new stand-alone cottages on the south side of the inn, part of an expansion from 94 rooms when the inn closed to 106 when it re-opens J An outdoor pool, sauna and swimup bar, also on the south side, with an amphitheater for outdoor weddings, fire pits and a bocce ball court J A man-made beach on the north side, along the seawall overlooking the river and Canada J Addition of a third floor on the north wing of the inn, which will house 14 suites J Across Riverside Drive from the inn, an existing building will be torn down and a 19,000-square-foot multi-use office and retail complex will be built, which will include a fitness center, bakery, florist, hair and nail salon, photography studio and art gallery. J And just south of the retail complex, a former gas station serving as the nerve center for the renovation will become a Starbucks. Now it houses material salvaged from the inn to be repurposed there, including bricks, wood floors and original art work that adorned the halls and rooms. â&#x20AC;&#x153;When I saw what he was doing, it was â&#x20AC;&#x2DC;Holy mackerel.â&#x20AC;&#x2122; A swim-up bar in Michigan? The cottages? It blew me away,â&#x20AC;? said Cedar.

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â&#x20AC;&#x153;Fell in loveâ&#x20AC;? Katofsky is president of Sherman Oaks, Calif.-based J.D. Market Acquisitions, a real estate brokerage, developer and property manager, which owns or operates a variety of retail

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and residential housing in California and Utah. He is also owner of the Orem Owlz in Utah, an affiliate of the Los Angeles Dodgers that plays in the Pioneer League, a rookie league where pro players begin their careers. Katofsky told Crain’s he had never heard of St. Clair or its inn. His only connection to Michigan was some relatives who had lived here, and he had no interest in owning or developing anything in the state. It was all, he says, a fortunate happenstance. Katofsky is also a lawyer, and he said he was brought in to help solve some legal problems the inn’s owner, Remo Polselli, was having with projects in Florida. Katofsky said he wasn’t able to clean up the mess in Florida, details of which he declined to talk about. “I’m done talking about Remo,” said. Polselli served a sentence for federal income-tax evasion in 2003, and in 2010, his Waterfront Hotel Ventures LLC, which owned the St. Clair Inn, filed for Chapter 11 bankruptcy protection. To settle a suit Katofsky later filed against Polselli involving Florida transactions, he said he was given the chance to buy Polselli’s three properties in Michigan, the Metropolitan Hotel in Romulus near Metropolitan Airport, the St. Clair Inn and the Sugar Loaf Resort, an iconic landmark in the Leelanau Peninsula northwest of Traverse City that had sat idle for years. In the summer of 2016, the Metropolitan Hotel, shuttered since 2012, reopened as the Radisson Hotel Detroit Metro Airport. When the St. Clair Inn reopens, it will be operated

For generations the St. Clair Inn hosted events ranging from Lions Club meetings to weddings. It closed in 2014 after a long decline under a series of ineffectual owners.

under the Tribute by Marriott brand, Marriott’s premier portfolio of highend and boutique hotels, and owned by Planet Clair LLC, a Las Vegas company owned by Katofsky. Katofsky said he first visited the St. Clair Inn in October 2015. He closed on the $4.1 million purchase early in January 2016. (The project later received a $200,000 grant and a $200,000 loan from the Michigan Department of Environmental Quality to help with environmental cleanup of the property, and it was granted a 12-year property tax break from the city of St. Clair.) “My first impression? I fell in love with it when I drove in. I broke the fourth law of real estate,” he said. “The first three laws are location, location, location. The fourth law is, don’t fall in love with your property. But I fell in love. It was just such a special place.”

Beating expectations Folks in northern Michigan have been as eager for someone to reopen Sugar Loaf as they were in St. Clair to have the inn back up and running. Katofsky said he is holding off on development there until he finishes the inn. “The St. Clair Inn is such a special piece of property, it needs to be done right. I can’t split my team. When the inn is done, we’ll do Sugar Loaf.” While J.D. Market Acquisitions has focused on retail and residential, Katofsky said his philosophy in those areas meshes with plans for the inn. “My niche is to find the least desirable piece of street retail in the most desirable area, and then exceed ev-

eryone’s expectations. People say I overbuild. The rest of the market starts to catch up, and I expect that to start happening in St. Clair. What we’re doing there will help everyone, including our competitors. This will be the premier hotel in the county and for some distance beyond.” Katofsky said he got an eager response from what he calls the “flags,” national hotel chains interested in adding the St. Clair Inn to their portfolio. “We narrowed it down to Marriott and Hilton, and Marriott made the best offer. And with Marriott, we get access to their 110 million loyalty followers,” he said. Paul Loehr, a vice president at Marriott International who came to St. Clair to see the inn, was so excited “he called me on the phone later and said he’d been singing in the car, that’s how excited he’d been,” Katofsky said. An advantage of owning a hotel at Metropolitan Airport is being able to put guests up there for weddings or events at the St. Clair Inn when that hotel is filled. “We’ll bus folks in,” he said. Katofsky said rooms at the inn will go for a minimum of $150 a night, with suites going for more than $400. He said the inn will employ 150 yearround and 250 during summer months. He said he hopes to employ as many students from Port Huron’s Culinary Institute of Michigan as he can. “We are trying to implement the farm-to-table concept,” Katofsky said. “Especially since there is so much agriculture in this area.” Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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CRAIN’S MICHIGAN BUSINESS: ST. CLAIR COUNTY

Live theater in Marine City: A ‘crazy’ idea that totally worked Need to know

By Tom Henderson thenderson@crain.com

Kathy Vertin had an idea. A crazy idea: To launch a theater in Marine City that would host an annual season of plays and musicals. Not community theater but professional theater, drawing professional performers from throughout the state. Said one critic about the idea: “She was crazy. Opening a theater in Marine City? Are you nuts?” After all, she wanted to bring people to the small, several-block downtown on Water Street — a place where, she said, “On any given Friday night at seven, you could have fired a cannon and not hit anyone.” The critic was her husband, Tom. Her former naysayer is now her business partner and set builder. She was crazy, all right. Crazy like a fox. Not only did she launch one theater, The Snug, in 2013, paying $130,000 for the building and $120,000 for renovation, she launched a second, larger theater called the Riverbank Theatre in a former bank building down the street, paying $300,000 for the building and

JJTwo live theater venues have sparked a comeback in downtown Marine City JJTheater owners also developing a new boutique hotel JJLong-term plans include launching a large live theater festival

$200,000 for renovation. On July 11, 2013, the Vertins sold out their first show, all 98 seats, for “Black Comedy,” a one-act play by Peter Shaffer. Things didn’t always go so smoothly. Soon after, they had sold just 50 seats for a comedy night. Kathy grabbed some fliers to take out on the street to try to drum up some business. “There wasn't a soul in sight,” she said. That September, they did the musical “Hello, Dolly!” “That proved we could do big things in a small space,” said Kathy. There are plenty of souls downtown on Friday and Saturday nights these days. Last year, they sold every one of the 17,000 seats available for the run of eight shows. While a play runs at one theater, rehearsals are underway at the other.

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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 // F E B R U A R Y 1 2 , 2 0 1 8

A catalyst

Tom and Kathy Vertin at The Snug in Marine City.

Opening their second theater in Marine City was happenstance. Kathy went into a branch of the Bank of America in what was built in 1921 as the Marine Savings Bank Building. It’s just down the street from The Snug. “I went in there to open an account and the teller said, ‘Don’t do it, we’re closing,’” recounted Kathy. “I told my husband, ‘I wish that been had been available when we built The Snug down the street.’” So they bought it, tore out the dropped ceilings — revealing ornate light fixtures and architectural features — and built a theater with seating for 179. The theaters, which hold shows on Thursday, Friday and Saturday nights, with Sunday matinees and periodic Wednesday matinees, have sparked an economic revival in the small town on the St. Clair River. Ticket prices were $26 a show last year, boosted to $28 a show this year, with $4 a ticket discounts for groups of 20 or more. “I was absolutely confident it would work. I knew this would be a catalyst, and it has been,” she said. The theaters are a nonprofit, operating as a 501(c)(3) under the formal name of Riverbank Youth Theatre and Performing Arts Academy. “We break even. We haven’t put a cent into operations in two years. We don’t get paid, but we pay performers and we pay two employees. Since we

INFUZ LTD. ARCHITECTS

Just south of The Snug, the Vertins are building a boutique hotel called the Inn on Water Street.

opened, 13 new businesses have opened in town and two others have expanded. Entrepreneurs took notice and said, ‘I’m going to open a business, too.’” One business that has expanded dramatically is the Marine City Fish Co., a fine-dining establishment that has added an outside section and doubled its space since the Snug opened. New businesses nearby include antique shops, a music store, other eateries, a candy shop and a coffee shop, the last two of which have their goods for sale inside the theaters. The last empty storefront on what used to be blocks of for-sale and forrent signs on Water Street is the old Miller’s clothing store, which recently sold. “I’ve been to quite a few of their

shows, and it’s amazing how different it is going to live theater than to a movie,” said Elaine Leven, Marine City’s city manager. “They’ve helped bring in a new group of people. When people come see a play, they want to go out to eat. It’s been a boon for restaurants. People walk around and shop before a show. Antique shops stay open on show nights. Other people have added special events. “When you went through town 10 years ago, there were only a handful of businesses. Now, virtually every storefront is occupied. The turnaround in this community has been amazing.”

Bigger vision Beyond the two theaters, the Vertins have grander dreams — specifi-

cally, to create a live theater festival that rivals the popular Stratford Festival across the St. Clair River in Ontario. They have an option to buy the former Riverview East High School building in St. Clair and in December engaged Beverly Hills-based Remington Group to help them pursue the $5 million they think they’d need to convert that space into a 500-seat venue. Vertin declined to comment on the purchase price until the option is exercised and said the $5 million includes $3.5 million to renovate the building and $1.5 million for firstyear expenses, including staffing, production costs and marketing. “Sixty-seven thousand Americans go to Canada for the Stratford Festival each summer. We’re eyeing 30,000 visitors per summer. We can fill up motels all over the area,” said Kathy of what she is billing as the Michigan Stage Festival and Performing Arts Academy. She’d like to have it up and running by 2020. “The Vertins opened their theater and no one thought they had a chance. But they proved themselves. We said let’s get behind them,” said Jeff Bohm, chair of the St. Clair County board of commissioners and a member of Blue Meets Green, a coalition of civic and business leaders pushing economic development and cooperation in St. Clair County. (See related story, Page 11.) The coalition has voted the theater festival as its top priority.

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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 // F E B R U A R Y 1 2 , 2 0 1 8

CRAIN’S MICHIGAN BUSINESS: ST. CLAIR COUNTY

Port Huron potential

Grand Rapids-based developer sees what long-vacant department store, former bank building could be By Tom Henderson thenderson@crain.com

According to economic development officials in St. Clair County, investors from outside the area have been more excited about opportunities there than local investors, who perhaps took the area and what it had to offer — including relatively cheap real estate, vacant retail space and close proximity to miles of beautiful, blue water — for granted. Chuck Reid, they say, is a prime example. A serial entrepreneur from the Holland/Grand Rapids area, he shocked naysayers by turning an iconic but long-empty former department store building in the heart of downtown Port Huron into a thriving boutique movie theater called the Sperry’s Moviehouse 12. Now, he’s converting an empty bank building down the street into a boutique hotel at a total cost of about $24 million. Sperry’s department store was built in 1893 and shuttered in 2006 after a series of tenants tried to make a go of the space, the last of which was House of Denmark. Sperry’s was to Port Huron what the

Need to know

 Grand Rapids-based entrepreneur Chuck Reid makes investments in Port Huron  Turns long-empty store building into movie theater  Converting empty bank building into boutique hotel

downtown Hudson’s had been to Detroit. It sponsored Thanksgiving Day parades. Generations of area kids came there to see Santa. When nylons went back on sale after World War II, crowds snaked around the block. The department store closed in 2000, and the building went dark six years later. As water leaked in through the roof, plaster fell off the walls, windows were broken and blight tickets were issued, it became a symbol of the dying downtown around it. And when the building reopened for business, the significance to area residents and merchants was hard to overestimate. “When we opened up, there were people coming up to me in tears, they were so happy to see the building open again,” said Reid of the theater’s

A 12-screen theater complex, which kept the Sperry’s name, has been a big draw in downtown Port Huron.

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

opening night on Dec. 15, 2016. “For decades, that building has served as a barometer of downtown Port Huron’s growth and prosperity. It is a large and imposing historic building that dominates the landscape,” said Randy Maiers, president of the Community Foundation of St. Clair County. “Thanks to Chuck Reid, the iconic building has been restored, reimagined and repurposed as one of the most unique movie theater venues anywhere in Michigan. The Sperry’s building is an unavoidable presence in downtown Port Huron and once again it is thriving.” A year after the theater opened, Reid began renovation of the huge former Michigan National Bank building a few blocks away on Military Street, along the banks of the Black River. It will be a CityFlats-branded hotel and ballroom, and he is converting the building behind it into what he is calling CitySide, with a restaurant and lounge on the first floor, office and retail on the second floor and a covered parking for hotel guests. Reid also owns CityFlats hotels in Holland and Grand Rapids. The 12-screen theater complex, which kept the Sperry’s name, has been a big draw. Its small venues, ranging from 27 to 41 seats, and food service — a range of snack, lunch and dinner items can be ordered in advance from the Dinner House, a restaurant Reid opened up on the second of the building’s three floors, and delivered to your seat in the the-

The bank was built in 1929 as the First National Trust and Savings Bank and became a Michigan National Bank in 1940 when Howard Stoddard consolidated banks in Grand Rapids, Port Huron, Lansing, Battle Creek, Saginaw and Marshall. It became a Bank of America branch in 2007, with BOA moving out in 2016 after Reid bought the building. The Michigan National Building in Grand Rapids, a 12-story art deco building built in 1926 and covered in terra cotta tile, became Reid’s second CityFlats hotel in 2010. The first was in Holland in 2007. Chuck Reid, a serial entrepreneur from the Holland/Grand Rapids area, cshocked naysayers by turning an iconic but long-empty former department store building in the heart of downtown Port Huron into a thriving boutique movie theater.

ater before the show begins — offer a sharp contrast to the cineplex offerings at nearby malls. Despite the small size of its theaters, Sperry’s often sells more tickets in a week than the much larger AMC and Goodrich theaters nearby. It sold 200,000 tickets in 2017, despite not even having a sign outside the building announcing the theater until August. At the end of last May, theater manager Scott Beedon said he got a call from Disney officials asking for the secret of their success, considering they weren’t part of a national chain, had small venues and were in a downtown, once considered a

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death knell for first-run theaters. The hotel, which Reid estimates will be a $12 million to $13 million project, is scheduled to open by the end of this year. A mezzanine added in the 1960s is being torn out to return what had been an ornate lobby into a ballroom space with a planned capacity of 389. “We tear it up with weddings in Grand Rapids,” said Reid. “Removing the mezzanine will bring back the full majesty of the bank grandeur for our ballroom events. Floor to ceiling windows overlooking the river and downtown will be spectacular.” The hotel will have 38 rooms, none of them the same.

It started with chairs How did Reid get into the boutique hotel and boutique movie theater businesses? It all started with seats. The parent company for those businesses is Holland-based Charter House Innovations LLC, which he bought in 2004. The company does interior design and manufacturing of partition walls, tables, upholstered furniture and chairs, with a focus on restaurants. “I got into the hotel business as a way to promote Charter House. The hotel was just a big showcase for us to show off our capabilities,” said Reid. When he bought the company, it had 38 employees and 72,000 square feet of space. Today, it has about 250 employees and 402,000 square feet in facilities in Holland and Zeeland. SEE POTENTIAL, PAGE 27

C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // F E B R U A R Y 1 2 , 2 0 1 8

CRAINâ&#x20AC;&#x2122;S MICHIGAN BUSINESS: ST. CLAIR COUNTY

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TOM HENDERSON/CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS

Robert and Sara Klingler at Rockford Carving Co., which relocated from Illinois to Michigan in 2009.

Carving out a niche in high-end guitars By Tom Henderson

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Growing St. Clair Countyâ&#x20AC;&#x2122;s local economy since 1952 through business, community and economic development.

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Whatâ&#x20AC;&#x2122;s a nuclear engineer to do when he wants to switch careers? He could always become one of the leading suppliers of highly engineered components for guitar makers around the world. Well, not always. Probably almost never. But thatâ&#x20AC;&#x2122;s exactly what Robert Klingler has done with the Rockford Carving Co. of Marine City, whose parts go on 450,000 guitars a year. The company makes more than a million finger-board inlays a year, just as one example. In the 1970s and 1980s, Klingler worked at four nuclear power plants for Commonwealth Edison of Illinois â&#x20AC;&#x201D; the Byron nuclear power plant in Byron, Ill., the Braidwood plant in Braiceville, Ill., the Quad Cities in Cordova, Ill., and Zion plant in Zion, Ill. For the last four of his eight years in the industry, he was a quality-control supervisor overseeing the work of more than 20 contractors. In 1988, he decided it was time for a career change, and he founded Rockford Carving in Rockford, Ill., some 15 years after he'd made his first guitar part while getting his undergraduate degree in electrical engineering at Purdue University before going on to get his masterâ&#x20AC;&#x2122;s degree in electrical and nuclear engineering. A guitar enthusiast, he had a Gibson guitar. His junior year, he broke its tail piece. Rather than buy a new one, he went over to the mechanical engineering department and used the tools there to make a replacement out of brass. It would turn out to be the first of millions of guitar components he or his employees would make over the years. â&#x20AC;&#x153;I love building things,â&#x20AC;? he said. â&#x20AC;&#x153;I love figuring out the puzzle of how to make things work.â&#x20AC;? Klingler founded the company with his now-wife Sara, whom heâ&#x20AC;&#x2122;d

Need to know

JJNuclear engineer switches careers to

become one of the leading suppliers of highly engineered components for guitar makers JJFounded Rockford Carving Co. of Marine City JJParts go on 450,000 guitars a year

met while working at the Byron plant and married in 1991. He is president and CEO. She is vice president, floor supervisor and procurement specialist in charge of sourcing the best materials in the world, including rosewood from India and only the best quality mother of pearl. It started with a single part. Someone at Gibson came across the name â&#x20AC;&#x153;Rockford Carvingâ&#x20AC;? in 1989 and called Klingler. â&#x20AC;&#x153;They wanted us to quote carving an ebony tuning knob for their ES775 guitar model with an inlaid mother-of-pearl dot.â&#x20AC;? Gibson liked the quote, gave them the job order and the rest is history. They got a foot in the door with Gibson, then quickly grew the business with a rapidly expanding parts list. â&#x20AC;&#x153;We worked a hundred hours a week for many years,â&#x20AC;? he said. One bit of serendipity that was a big boost for Rockford was the Berlin Wall coming down in November 1989. Klingler said that at the time, many guitar parts were sourced from German suppliers. The political upheaval and uncertainties over what the future held disrupted the supply chain for many months. â&#x20AC;&#x153;C.F. Martin had long back orders on components from European suppliers,â&#x20AC;? he said â&#x20AC;&#x201D; back orders he was happy to fill. Another boost for the business came in 1993, when Gibson launched its Historic Collection, bringing back models made from 1934-1969 that had become famous over the years. â&#x20AC;&#x153;There was a massive amount of tooling. These were for

guitars that cost anywhere from a lot of money to a ridiculous amount of money,â&#x20AC;? said Klingler. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;d get a call: â&#x20AC;&#x2DC;Can you get 1,500 veneers to us by Tuesday?â&#x20AC;&#x2122;â&#x20AC;? Today, Rockwood Carving makes more than 4,000 different parts for 23 guitar manufacturers, including Gibson, his main customer, whom he has supplied parts for 29 years, as well as Fender, Ovation, Heritage, C.F. Martin and Peavey. Their long parts list includes head veneers, fingerboards, bridges, bridge bases, tail pieces, picks, fingerguards, pick-up parts and back veneers. Each part comes in a variety of materials, depending on the price of the guitar. Head veneers, for example, can come in rosewood, American curly maple, mahogany or Bakelite. Fingerboards can come in ebony wood, graphite, rosewood, Bakelite or a colorless crystaline solid called phenolic. Tail pieces can come in brass, zinc or ebony. Thanks to Saraâ&#x20AC;&#x2122;s sourcing skills, Rockwood has become the sole supplier of some parts.

Coming home Klingler grew up in Birmingham, Mich., and spent summers and weekends at his parentsâ&#x20AC;&#x2122; place in Marine City. â&#x20AC;&#x153;I was a St. Clair River rat,â&#x20AC;? he said. In 2009, it was time for the rat to return to the river. The Klinglers moved the business to Marine City after purchasing an old Dana Corp. factory just west of downtown. â&#x20AC;&#x153;We bought it during what I call the Depression,â&#x20AC;? said Klingler, referring to the Great Recession that was well underway. But the economic downturn proved a blessing for the company. Word spread in the community that a new and large manufacturer was coming to town. SEE GUITARS, PAGE 27

Your Passion. Our Commitment.

Front Row (left to right): Linda Finnegan | Principal | CPA | MSPA – Austin, Niester, Schweihofer & Finnegan, P.C. • Patricia A. Manley | Partner | CPA – McBride-Manley & Co., P.C. Janal L. Mossett | Partner – Kelly Law Firm • Jacquelyn Hanton | Vice President – Community Foundation of St. Clair County • Gary A. Fletcher | Partner – Fletcher, Fealko, Shoudy & Francis, P.C. Back Row: Harold Burns | Partner – UHY, LLP • Douglas S. Touma | Partner – Touma, Watson, Whaling, Coury, Castello & Stremers, P.C.

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CRAIN’S MICHIGAN BUSINESS: ST. CLAIR COUNTY

St. Clair Community College invests in Port Huron’s renewal By Tom Henderson

thenderson@crain.com

Under President Deborah Snyder, St. Clair County Community College has embarked on several development projects and considers itself a major partner in Port Huron’s urban renewal. “St. Clair Community College has become a significant economic driver,” said James Freed, Need Port Huron's city to know manager. JJSt. Clair Snyder, a Port Community Huron native and College is a major school alum, was player in Port named interim Huron’s renewal president of the college in FebruJJSchool transformed an old ary 2016, replacing Kevin Polarena and ice rink lock, who left for into a new field another job. In house for $3M June that year, JJFormer motel the board of will be converted trustees removed to student housing “interim” from her title. Previously, she had been president of Cogswell College in San Jose, Calif. In April 2016, the school began renovation on McMorran Pavilion, an arena and ice rink it had bought from the city of Port Huron for $1, just west of the larger McMorran Place, a 4,500seat arena and convention center owned by the city. The school committed $320,000 to begin construction

ST. CLAIR COUNTY COMMUNITY COLLEGE

The St. Clair County Community College Fieldhouse includes a new basketball floor and a walking and running track.

and renovation and promised to spend $3 million on capital improvements over three years. The school took out the ice rink and converted the building into the SC4 Fieldhouse, putting in a basketball floor and a walking and running track. The fieldhouse, just across Erie Street from the college’s campus, opened in

October 2016. With a new fieldhouse in place, the school applied to host the National Junior College Athletic Association’s basketball and volleyball tournaments in 2019. “We’re on the short list,” said Snyder. Included in the pavilion deal was the McMorran Tower at the southeast

entrance to the field house, a 188-step tower and observation deck built in 1965. The school added LED lighting and turned the tower into a beacon. Last September, the college got into the housing act in Port Huron, announcing it had closed on the Main Street Lodge motel at 514 Huron Ave. and would convert it into student housing. The college bought the property for $550,000 from local lawyer Edward Marshal. Snyder said the school has committed $2 million for renovations to turn the 40-unit motel into housing for 80 students. She said there are 110 students on a waiting list for the housing, which is expected to be finished next summer, in time for fall classes. The project was jump-started with a $750,000 loan from the Community Foundation of St. Clair County to help fund the purchase and initial renovation work. “Having student housing downtown will bring a whole new level of energy,” said Freed. The renovation, which began in November, will include an addition of a common area with couches, TVs and other amenities and a common kitchen. In what could be a boost for local businesses, the school is considering offering students a meal plan in collaboration with downtown restaurants. The biggest development project for the school will be for a health-sciences

training center, the result of an upcoming $10 million renovation of the 42,000-square-foot A.J. Thiesen Science and Technology Center. The funding was approved by the state legislature and signed into law last July by Gov. Rick Snyder. Deborah Snyder said the renovation will allow the school to increase enrollment in nursing programs and grow paramedic, radiologic technology, medical assisting and health information technology programs. Currently the building is mostly devoted to computer science programs but has a nursing simulation lab and a simulated emergency room to replicate hospital settings. Construction will begin later this year and be completed in the fall of 2019. Snyder said naming rights for the health-science building are available if a donor is interested. Snyder credited Blue Meets Green, a coalition of civic and business leaders in St. Clair County, with helping get state approval for the grant. “I went to a meeting of Blue Meets Green and asked if anyone was interested in helping us, could they write us a letter or recommendation. I thought we’d get three or four, but when I went to the legislature, I had 35 letters in hand,” she said. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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CRAIN’S MICHIGAN BUSINESS: ST. CLAIR COUNTY

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Construction continues at a brisk pace at the new tower of McLaren Port Huron Hospital, one of the largest development projects in recent years in St. Clair County. “They’re going gung-ho, and we expect to be moving in the first week of October,” said hospital President and CEO Jennifer Montgomery. The first phase of the $161 million project, the two-story, 15,000-squarefoot Barbara Ann Karmanos Cancer Institute, opened in August 2016 with 12 private chemotherapy infusion bays, each with heated massage lounge chairs and a TV. By the time the center is fully functional at the end of this year, there will be a toJennifer tal of 22 infusion Montgomery: bays. Expects October The second move. phase is a 174,000-square-foot, four-story patient tower at the south end of the campus. It broke ground in July 2016 and will have 72 private rooms and an 18-patient intensive-care unit. When it is completed, the first floor will have an emergency center and observation unit; the second will have four operating room suites and 18 ICU beds; the third floor and fourth floors 36 private patient rooms each. Upon completion, the patient tower at the west end of the hospital complex will be torn down. “I’m told that if we move in on Oct. 1, we will begin demolition on Oct. 2,” said Montgomery. “The west tower is the oldest building on campus. At the end of the day, it’s 80 years old and it’s time to come down.” As part of the $161 million renovation and construction campaign, the other existing patient tower will be gutted to the walls, with all new wiring and plumbing and all patient rooms converted to private rooms. The hospital is currently licensed for 186 beds, a figure it will retain after construction and renovation. Montgomery said all the rooms in

Need to know

 First phase of $161M project completed in 2016  McLaren will move into new patient tower in October  Project financed through bonds, capital campaign

the new tower and the old will have an alcove for family, complete with a couch that converts to a bed, outlets and a TV separate from the patient’s. “What I’m excited about is we’re going to have a new hospital. We’ll have a new tower, and all new piping and wiring in the old tower and an upgrade to modern technology. While it will have the same brick and mortar exterior, everything else will be new,” she said. “Our employees and doctors are so excited about it.” McLaren went to the bond market to finance the construction phases, which were a design and build collaboration between Baltimore-based CallisonRTKL and Ann Arbor-based SmithGroupJJR. Montgomery said the hospital is doing a $5 million capital campaign, with its local hospital foundation raising money from local businesses and private donors, to fund additional services for patients. Half of that money will go to the cancer institute and fund such things as art and music therapy; caregiver support groups; patient gift bags; upgraded chemotherapy chairs with heat and massage; a rooftop garden; transportation assistance; and a community room. The other half will go to the new tower, funding a classroom accessible to the community and staff ; programs that will allow patients who previously had to be seen out of town to be treated locally; an Impella heart pump to treat some of the sickest cardiac patients; a prostrate MRI, which will allow local patients to be involved in clinical trials by Karmanos researchers and physicians; and a new device for Varian stereotactic radiosurgery, which delivers high doses of radiation to treat brain tumors with great precision. McLaren bought the hospital, which was founded in 1882, in 2014. Montgomery, who first worked there as a nurse in 1993, was named president and CEO in 2016.

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

CRAIN’S MICHIGAN BUSINESS: ST. CLAIR COUNTY had never seen a project involving so BLUE many different partners from all secFROM PAGE 11

“After the recession hit, we said, ‘We have to do it ourselves. Lansing won’t do it, and Washington won’t do it,’” said Randy Maiers, the CEO and president of the Community Foundation of St. Clair County, about the impetus to form Blue Meets Green. “Blue Meets Green is a passion of mine, and it’s been quite a ride,” said past co-chairman Don Fletcher, who was president of the Port Huron Hospital from 1988-2004. Jeff Bohm, the chair of St. Clair County’s board of commissioners, is the group’s chair.

Breaking down silos The group’s first major project began amid controversy in 2010, as they tried to figure out what to do with the shuttered Thomas Edison Inn near the Blue Water Bridge and how to tie that in with a new convention center. “A convention center didn’t make sense without a hotel, so we had to hold off on that until we could get a hotel in place,” said Maiers. “It was very controversial. People were upset that we were putting private and public money together. Our region

tors, and had a wide range of funding and financing. So a part of the controversy came simply from the fear of the unknown.” Hilton paid $4 million for the Thomas Edison Inn — or, rather, for most of it. Bohm said the county paid $1.8 million to acquire a banquet hall at the inn and some adjacent space that was later incorporated into what would become the adjacent Blue Water Convention Center. “Including construction costs for the convention center, the county was in for $9 million in public money,” said Bohm. “We got some criticism. Why are you helping Hilton? But it was a good deal for us. What we got for $1.8 million was well under the cost of new construction. And we got a convention center that has had a lot of benefit for area businesses and the community.” Blue Meets Green is not a funding agency and wasn’t involved in financing directly. The $11 million, 149-room DoubleTree by Hilton opened in August 2013. A third leg of the project was Baker College’s second Culinary Institute of Michigan, a $4 million, 23,000-square-foot facility that

You know. The Motor City has both fueled and felt the power of the Laker Effect. Many of our students not only hail from the Detroit area, but they also return there: as analysts and engineers, biochemists and health professionals, as leaders in business and leaders of communities. Support them. Support us. And see the power of what can be.

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Chuck Reid, the owner of the Sperry’s theater, is building a hotel down the street at the former Michigan National Bank Building.

opened next to the Hilton in October 2013. The 40,000 square-foot, $9 million convention center opened in 2015. Baker College built a $3.5 million, 40,000-square-foot dorm in 2015 to house 48 culinary students and a second, 30,000-square-foot dorm for 34 students in 2016. “Once we got that all done, our partners were comfortable with other projects. They became easier,” said Maiers. A subsequent project the group championed was the Inn on Water Street, a boutique hotel and restaurant the Vertins are building in Marine City. “They convinced us that a small boutique hotel in Marine City could have a big impact,” said Maiers. The hotel is a $4.3 million project on the site of a former auto dealership. Blue Meets Green helped the Vertins get more than $1.1 million from the state in grants and loans, including brownfield grants to remove underground tanks at the site, and helped coordinate tax abatements from the city. “That hotel was the poster child for Blue Meets Green,” said Maiers. “It shows that we aren’t just a Port Huron organization. Before, we used to have silos. Everyone did their own thing. Before, it would have been: ‘A boutique hotel? Don’t put it there. Put it in my city.’”

A cultural shift

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One thing Casey couldn’t have foreseen when he took the job in 2011, and that the leaders behind Blue Meets Green couldn’t have known in 2009, was that their goal of revitalizing county communities would become easier because of a huge cultural shift. People got tired of malls, big-box stores, chain restaurants and long drives to work. Led in part by millennials who liked the idea of walking or biking to work, places like Port Huron, Marine City, St. Clair and Marysville were about to undergo dramatic rebirths. When Birchwood Mall, an enclosed mall with more than 100 stores in Fort Gratiot Township, opened in 1991, it had a devastating impact on Port Huron and nearby communities. “Downtown stores either moved to the mall or they closed,” said Casey. “When Birchwood opened 10 minutes away, it began a 20-year disinvestment in downtown Port Huron. And then the recession hit, and that was a hammer that hit downtown, too. But what you are seeing now is

the polar opposite. When shopping malls came into being, shopping became convenience based. You went to the mall and parked there, shopped there, ate there and went to the movies there. But in recent years, the ability to shop online has become more convenient than the mall.” With convenience no longer driving out-of-the-house shopping, people started looking for unique experiences. “Unique restaurants, unique entertainment and unique shops ... those are being found downtown, again. The salvation of the Sperry’s store is a good example,” he said, referring to a former longtime shuttered department store in downtown Port Huron that has been converted into a thriving first-run movie theater, none of whose 12 screens seats more than 41. (See related story, Page 14.) Once a seeming ghost town, downtown Port Huron has seen six new businesses open in the last year, according to David Haynes, the city’s director of planning and community development, who says there are now more than 50 retail shops and about 25 restaurants and bars in a 12-block stretch of downtown. “We’ve seen a generational transformation downtown,” said James Freed, Port Huron’s city James Freed: manager. “MilGenerational lennials are comtransformation. ing downtown. Empty nesters are buying lofts and condos. And their interest is driving investment.”

Residential development Chuck Reid, the owner of the Sperry’s theater, is building a hotel down the street at the former Michigan National Bank Building, and the downtown is dotted with just-completed loft projects, lofts under construction and lofts or condos in the planning stage. According to Haynes, a 19-loft, $3.1 million project at 202, 204, 206 and 208 Huron Ave., buttressed with the support of a $644,330 grant from the Michigan Economic Development Corp., is being developed by Larry Jones, who last year opened the eight-unit J.J. Newberry Lofts at 230 Huron; the three-unit Mid-Town Lofts project for 411 Grand River is being finalized; the five-unit Boat

Yard Lofts and three or four commercial spaces are being built by developer Gerry Kramer at 308 Wall St.; and 10 other lofts projects have been proposed. In November, Horace Boddy of Boddy Construction Co. Inc. told the Marysville City Council he is buying adjoining parcels of land that he plans to turn into more than 200 new homes and condos in the city, with groundbreaking on the first phase of 80-100 houses to start by May. To some, the most exciting housing development in Port Huron is Bluewater View Condominiums, a mid-rise project that broke ground in November on the St. Clair River within view of Lake Huron. There are plenty of mid- and high-rise condos on the Sarnia, Ontario, side of the river but none in Port Huron. Allen Stevens, a former New York developer who has moved back to the area, says the first phase, an eight-story tower with 28 units, priced from $275,000 for one bedroom up to $600,000 for three, could be finished by the end of the year. He plans on a second tower of 10 stories and 50 units, the timing of which depends on how the first building sells. “I’m optimistic the first 28 will sell out this spring,” he said. “There seems to be a lot of demand. There’s not a lot of that kind of product out there. It’s a fantastic site.” He bought the property, the site of the former YMCA, for $1 million in 2016 after another buyer failed to secure financing, and estimates the total cost for both towers will be $28 million to $30 million. Units in the first building will range from about 1,200 square feet for one bedroom to about 1,800 for two bedrooms and about 3,000 square feet for a three-bedroom penthouse. Plans call for seven one-bedroom units, 19 with two bedrooms and two penthouses. A model is on display at 712 Huron Ave. downtown. Currently, support beams are being pounded 110 feet into bedrock. “That’s expensive, but they make it so the building will be there forever,” said Stevens. “It’ll take us two months to get the foundation done, but we’re able to get it done in winter because the ground isn’t frozen that far down. In the spring we’ll begin actual construction.” “The skyline is changing,” said Freed. “I’m looking out my window at the Bluewater site, and there are cranes and steel everywhere.” Tom Henderson: (231) 499-0191 Twitter: @TomHenderson2

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C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // F E B R U A R Y 1 2 , 2 0 1 8

THEATER FROM PAGE 15

â&#x20AC;&#x153;They were introduced to me when they were first talking about doing a theater and I said, â&#x20AC;&#x2DC;No, we canâ&#x20AC;&#x2122;t help you. You have no track record.â&#x20AC;&#x2122; We turned them down. A theater? That was crazy. Well, they proved us wrong,â&#x20AC;? said Randy Maiers, a member of Blue Meets Green and president and CEO of the Community Foundation of St. Clair County.

Theater schedule This year's schedule for plays and musicals at The Snug and Riverbank theaters in Marine City: J Feb. 16-March 18, Seussical the Muscial, Riverbank Theatre J April 6â&#x20AC;&#x201C;April 29, The Nerd, The Snug Theatre J May 4â&#x20AC;&#x201C;May 20, Titanic: The Musical, Riverbank Theatre J June 29â&#x20AC;&#x201C;July 22, 2018, Thoroughly Modern Millie, Riverbank Theatre

Boutique hotel

J Aug. 3â&#x20AC;&#x201C;Aug. 26, The Dixie Swim Club, The Snug Theatre

Just south of The Snug, the Vertins are building a boutique hotel called the Inn on Water Street, on the site of an old car dealership they bought in 2016. They broke ground in December on the $4.3 million project, and construction on the three-story building is in full swing. On the ground floor, there will be a large restaurant and bar called the Inn Kitchen, a small retail store for St. Clair-based Coughlin Jewelers and five hotel rooms. There will be 21 hotel rooms on the second floor and four condos on the top floor, all of which have been sold, at $350,000 to $375,000 each. Reclaimed wood from World War I-era ships built at the former nearby McLouth Shipyard are used as beams in the building, which was designed by architect Vincent Cataldo, owner of the St. Clair-based design firm Infuz Ltd. Infuz also did the designs for the St. Clair Inn a

J Sept. 7â&#x20AC;&#x201C;Sept. 30, Baskerville: A Sherlock Holmes Myster, Riverbank Theatre J Oct. 12â&#x20AC;&#x201C;Nov. 4, Escanaba in Da Moonlight, The Snug Theatre J Nov. 16â&#x20AC;&#x201C;Dec 22, A Christmas Story: The Musical, Riverbank Theatre

few miles to the north, which is undergoing a $35 million renovation. (See related story, Page 12.) The Inn on Water Street is scheduled to open in April. Blue Meets Green helped the Vertins get $500,000 in brownfield grants and loans from the Michigan Department of Environment Quality to clean up the underground storage tanks at the site before construction could begin, as well as a grant of $672,000 from the Michigan Economic Development Corp. The Vertinsâ&#x20AC;&#x2122; first foray into commercial redevelopment came after they bought the Snug building, which had a long-empty storefront

Tom and Kathy Vertin in front of the Riverbank Theatre.

on the ground floor and an apartment on the second floor. They got a grant of $75,000 from the Michigan State Housing Development Authority in 2013 to totally rehab the second floor, creating three apartments that have been rented since. â&#x20AC;&#x153;I was hedging my bets,â&#x20AC;? said Tom. Having sold a family business

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made any bets less risky than they might otherwise have been. In 2007, they sold Visioneering, an aerospace tooling shop in Fraser that Tomâ&#x20AC;&#x2122;s dad, Thomas, had founded in 1951. When his dad died in 1979, Tom took the business over. Kathy met Tom when she went to work there in 1995 after getting her MBA from Northwood University.

That year, he sent her to England to open up a company facility. Not-so-coincidentally, for her tenure there, she lived in Stratford-onAvon, Shakespeareâ&#x20AC;&#x2122;s old stomping grounds. In 1999, Kathy left Visioneering to serve as vice president for the Detroit Convention and Visitors Bureau. She returned to Visioneering in 2000. The Vertins got married in 2005. After the sale of the company, they lived on Harsenâ&#x20AC;&#x2122;s Island, did some boating, did some traveling and got bored. â&#x20AC;&#x153;We both got a little squirrelly. We werenâ&#x20AC;&#x2122;t good at retirement,â&#x20AC;? said Kathy. â&#x20AC;&#x153;I said, â&#x20AC;&#x2DC;Letâ&#x20AC;&#x2122;s do something.â&#x20AC;&#x2122;â&#x20AC;? â&#x20AC;&#x153;We decided to pursue Kathyâ&#x20AC;&#x2122;s passion for theater,â&#x20AC;? said her husband. She had been a performer in college, working her way through Northwood performing in cabaret and dinner theater in resorts in northern Michigan. She continued to perform occasionally after college, including a dinner theater stint at The Whitney restaurant in Detroit. Once in a while, Kathy performs in her own shows, from the starring role as Dolly in â&#x20AC;&#x153;Hello, Dolly!â&#x20AC;? to bit parts, including one as an old church lady. â&#x20AC;&#x153;I only take roles if Iâ&#x20AC;&#x2122;m absolutely right for them because itâ&#x20AC;&#x2122;s important to me to cast the best person for the part,â&#x20AC;? she said. For now, though, her favorite and best role is that of impresario. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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

CRAIN’S MICHIGAN BUSINESS: ST. CLAIR COUNTY CONNECTION TO

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

Dan Musser owns the Grand Hotel on Mackinac Island and has a 53-foot Chris-Craft Constellation Cruiser named the Marion Leigh, a sea-foam green wooden boat.

International boat show brings heritage home to Port Huron

By Tom Henderson

Boat show agenda:

Detroit put the world on wheels. Factories along or near the St. Clair River put it in power boats. From Sept. 9-15, the Antique and Classic Boat Show Society will hold its annual meeting and International Boat Show in Port Huron, an event that the Blue Water Area Convention & Visitor Bureau projects will generate between $600,000 and $800,000 for the local economy. Event promoter Mark Walker says the show will be a reminder of the area’s nautical heritage as boats bearing the Hacker, Gar Wood and Chris-Craft names come to town. Algonac was the home of both Gar Wood and Christopher Columbus Smith. Wood made his fortune with the Wood Hoist Co. in Detroit, having invented the hydraulic hoist for trucks, which made him rich and allowed him to pursue his passion for speed and building power boats through his Garwood Industries. In 1921, he raced one of his boats against a train for 1,250 miles up the Atlantic coast from Miami to New York City, beating it by 12 minutes. And he set numerous world speed records, including hitting 124.9 miles an hour on the St. Clair River in 1932. Smith created the most iconic boat name of them all, Chris-Craft. In 1922, he formed the Chris Smith & Sons Boat Co. in Algonac, specializing in highend powerboats. He changed the name to Chris-Craft in 1924. The company built more than 12,000 small boats for the U.S. military in World War II and in its peak years in the 1950s sold 159 different models. Over the decades, customers included Henry Ford, William Randolph Hearst, Dean Martin, Katharine Hepburn, Frank Sinatra and Elvis Presley. The Smith family sold the company in 1960 and it is now based in Sarasota, Fla. John Hacker invented the V hull design and built a floating biplane for the Wright brothers. His Hacker Boat Co. was legendary for its mahogany runabouts, first made in Detroit in 1908 — coincidentally on the same day his friend Henry Ford built his first Model T — and later on the Clinton River in Mt. Clemens, not far from the mouth of the St. Clair River. In honor of those boating pioneers and the boats they built that will be at the show, Walker’s theme for this year is “Bring your boat home.”

Sunday, Sept. 9: A welcome reception in the evening on the patio at the DoubleTree by Hilton in Port Huron, overlooking the St. Clair River and the Blue Water Bridge.

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

Monday, Sept. 10: A run by boaters down the St. Clair River, with lunch at the historic Old Club yacht club on Harsens Island. Tuesday, Sept. 11: A cruise down the St. Clair River from Port Huron to the city of St. Clair with dockage at the municipal marina and lunch at a local riverview restaurant while watching the freighters go by. Wednesday, Sept. 12: Registered boaters will be guests on a large cruiser for a run up into Lake Huron to the town of Lexington for a catered lunch at the marina. There will be another welcome reception later at the Fort Gratiot Lighthouse in Port Huron. Thursday, Sept. 13: The society’s annual meeting at The Doubletree by Hilton and a tour of Algonac, the home of Chris Smith and Gar Wood and a birthplace of power boating. The tour will include a stop at the Original Chris-Craft facility. Friday and Saturday, Sept. 14-15: The International Boat Show at the River Street Marina.

‘A real plum’ It will be the first time the show has been held in Port Huron, though it has been held twice at Bay Harbor in Petoskey and is going back to Bay Harbor in 2020. Walker and his brother, Hale, co-founded Port Huron-based Michigan Mutual Inc. in 1992. It has grown into a mortgage underwriter that does about $1.5 billion in loans a year and is licensed in 34 states. When asked his motivation for bringing the show to town, he joked: “We’re nautically disturbed.” He’d helped put on a local boat show in Port Huron each fall and “a couple of years ago, I made a play to get the international show here, and we got it,” he said. “We think it’s going to be one of the biggest shows they’ve ever had.” “The Michigan chapter expressed an interest in hosting the show and we did our due diligence. We visited the city and saw the marina, which is an excellent facility. We’re really excited about

it,” said Dan Gyoerkoe, the executive director of the antique boat show society, a nonprofit based in Clayton, N.Y. “The local members of the Michigan chapter have been great to work with, and they’ve gained the support of the city and local businesses.” The show will be at the River Street Marina on the Black River, just a short cruise from Lake Huron. Walker expects up to 200 boats. “They’ll be coming from all over Canada and the U.S.,” he said. “This show is a big deal to boat-restoration guys.” He’s one of them, having bought his first boat in 1975 and now piloting a restored 1941 Chris-Craft barrel back boat with a 350 horsepower Mercury engine. The boat is named the “Ya-bahdee!,” for the first word his grandson said. “I just got her out of the barn and have been revarnishing it. My grandkids come over and help me out and we have a ball.” Gyoerkoe said most boats will be trailered in from around the county, but one benefit of being on a river just off Lake Huron is that much larger boats that wouldn’t be trailered to a smaller inland lake will be able to make the trip to Port Huron via the Great Lakes Waterway. “On average, we get boats that are 18 to 24 feet. I suspect we’ll have a number of 40- and 50-footers this year,” he said. Dan Musser proves Gyoerkoe’s point. Musser owns the Grand Hotel on Mackinac Island and has a 53-foot Chris-Craft Constellation Cruiser named the Marion Leigh, a sea-foam green wooden boat. “You see her when she’s coming,” Musser said. And he plans on her, and him, coming to September’s show. Musser is the ship’s second owner. As a kid, he’d watch it slack-jawed as she docked in Mackinac during summer trips to Lake Superior and back. “I was young when I first had a chance to buy it, and I said, ‘No, I oughta buy a house first.’” Years later, about 19 years ago, he had another chance to buy it and did. He has taken the boat to a show in Hessel in the Upper Peninsula, but this will be his first time at international show. “This show is going to be a real plum for Michigan, not just Port Huron,” said Walker. “The whole community is behind it. When you come in your boat, the welcome mat will be out.” Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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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 // F E B R U A R Y 1 2 , 2 0 1 8

POTENTIAL FROM PAGE 16

He opened the first CityFlats hotel in 2007, built the second in 2010 and in 2013 got a call from Beedon, then a real estate agent and longtime St. Clair politician who was looking for a buyer for the Sperry’s building for a client. He thought the old department store was a natural fit for a hotel. Reid thought otherwise. “I drove over to take a look, but it was a decrepit building. There was water everywhere. It was a mess,” said Reid. “I didn't think it was the right building for a hotel. I couldn’t figure out where to put the ballroom.” But just down the street was the former Michigan National Bank building, designed by the same architect who

GUITARS FROM PAGE 18

“We had 400 resumes walk through the door in the summer of 2009 without a bit of advertising,” he said. “We were the new business in town, and everyone was out of work. We were able to pick the best people.” The name “Rockford Carving Co.” might conjure up an image of a few carvers using hand tools to make artisanal products. The products are indeed artisanal, but they are made on 43 computer-numerical-control machines in a sprawling, 87,000-squarefoot plant. When it came time to move to Marine City, it took more than 60 semitrailers filled with machinery and stacks of wood, various metals, mother of pearl and other materials. Today, the company employs 23. Klingler said revenue was about $3.5 million last year, with projections of $4.5 million this year. In 2013, Klingler founded Marine City-based Klingler Automatic Industries, a brokerage of oil and gas leases

“We had 400 resumes walk through the door in the summer of 2009 without a bit of advertising.”

designed the former Michigan National Bank building he had converted to a hotel in Grand Rapids. “I knew what the interior looked like, I knew what I could do with the ballroom.” He made an offer, closed on the property, eventually got the Bank of America to move out and began construction. Meanwhile, he had other plans for Sperry’s. In 2014, he bought a former Visteon parts supplier in Zeeland that had been spun out as Greystone Seating. The carseat business had morphed over the years into the theater-seat business, a market that got more lucrative with the fad for high-end seating and recliners in theaters. “Lounge chairs were becoming the rage,” he said. He thought he could buy the Sperry building relatively cheaply, put in small

boutique theaters and fill them with his top-of-the-line seats. “This building is our new testing ground,” he said. “I’ve got close to $12 million invested in the building. I try not to think about it. As Joe Walsh says, ‘I have accountants who pay for it all.’” The building passed the test. Reid plans to open another boutique theater under the Sperry brand in downtown Holland in the spring of 2019, and maybe expand from there. “Everyone asks me, ‘Why Port Huron?’ Why not? They’re not making buildings like this anymore. A big bank building on a river? Where can you get that? I love rehabbing old buildings and bringing them back to life,” said Reid. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

Sperry’s in Port Huron reopens on June 24, 1946, after a fire.

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focused on the Silurian Basin in southeast Michigan. It employs four. The same year, he founded Marine City-based USCGC Bramble LLC to serve as a floating museum for a 180foot Coast Guard cutter he had bought from the Port Huron Museum and restored to running order. Commissioned in 1943, the 180foot ship piece was stationed at the Bikini Atoll in the Marshall Islands during atomic bomb tests after World War II; in 1957 it was one of a group of three Coast Guard ships that became the first vessels to navigate the 4,400 nautical miles of the northwest passage in the Arctic. Later the ship did drug interdiction out of Miami before being decommissioned in Port Huron in 2003. In 2014, the ship was used in the filming of the movie “Batman vs. Superman: Dawn of Justice.” Moored at the Nicholson Dock in River Rouge, the Bramble portrayed a tramp steamer used to smuggle a large shipment of kryptonite into Gotham City. Klingler had a bit part, portraying a crane operator unloading the material from space that is deadly to Superman.

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E. LANSING | TROY | DETROIT

CELEBRATING A WOMAN WHO BUILDS DETROIT General Motors is proud to celebrate Alicia Boler Davis on being named one of Crainâ&#x20AC;&#x2122;s Detroit Businessâ&#x20AC;&#x2122;s 2018 Notable Women in Manufacturing. From all of us at GM, congratulations on this outstanding achievement and thank you for your dedication to our business.

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C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // F E B R U A R Y 1 2 , 2 0 1 8

Notable Women in Manufacturing secure patents, manage assembly plants and find production efficiencies. They are tireless advocates for STEM education in the schools and mentor other women in the field. This special report profiles women who work in various manufacturing companies in Michigan, from automotive to health sciences to food and beverages. The women were nominated by their peers at work and in the community. Crain Content Studio leaned on the expertise of advisors in the business community in developing the criteria for selecting those featured here. Share this report online at crainsdetroit.com/WomenManufacturing, and watch for more Notable Women reports in 2018.

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

SASSA AKERVALL

KATIE BALASH

JULIE BARTHOLOMEW

SANDRA BOUCKLEY

MARY BUCHZEIGER

CEO, Akervall Technologies Inc., Saline Industry: Health and life sciences Education: Lund University, Sweden: Bachelor of Arts degree in Communication

President, Vaughan Industries Inc., Detroit Industry: Industrial cleaning Education: DePaul University, Chicago: Bachelor of Fine Arts degree in Theatre The sudden death of her brother in 2014 forced Katie Balash to make a difficult decision: Take over leadership of the family business or have her aging father sell or close the company. Closing the company would mean letting down customers who relied on the patented products Vaughan Industries provided and letting go of longtime employees. So, Balash stepped up. She knew she was missing skills needed to run the manufacturer of car wash equipment and supplies, so she sought necessary training, including completing Goldman Sachs’ 10,000 Small Businesses program. Consequently, she made necessary changes, such as outsourcing human resources to focus more on sales and using the savings to fund a company 401K plan. She updated Vaughan’s computer systems and software, worked with an IP attorney on pending patents and secured 12 trademarks for developing product lines. In 2017, she received a $100,000 NEIdeas grant for implementing lean manufacturing principles in purchasing automated machinery. Balash also launched a charitable program within Vaughan called “Peace, Love and Laundry.”

Past President, International Board of Directors, SME, Dearborn Industry: Manufacturing Education: Kettering University, Flint: Master of Science in Manufacturing Management; Michigan State University: Master of Business Administration

CEO, Lucerne International Inc., Auburn Hills Industry: Automotive Education: Lawrence Technological University: Bachelor of Science in Industrial Operations

Senio Indus

Saline-based Akervall Technologies (dba SISU Guard) manufactures mouth guards and shoe inlays for sports and recreation, military training, dentistry and medicine. Though CEO Sassa Akervall’s background is in writing and television, she grew Akervall Tech from $5,000 in revenue in 2009 to about $4.5 million in 2017. The company, which partners with Reebok/CCM and Wilson Sporting Goods, successfully secured five patents in 2016 and 2017 for advanced polymer technologies in its products. Pending patents include a night grinding guard and a guard with an implanted chip that can report head impacts in sports for real-time awareness of possible concussions. Akervall’s work has earned her the STEP Ahead Award from the Manufacturing Institute and the FastTrack Award from Ann Arbor Spark. “She is a dynamic leader who leads by example, always seeking new collaborative partnerships and insights from trusted advisors such as the Women Presidents’ Organization,” said Blaire Miller, Michigan Chair of the Women Presidents’ Organization. Akervall serves on the board of directors for the Small Business Association of Michigan and the Saline Area Chamber of Commerce.

Founder, CEO and Global Innovations Officer, IMX Labs (dba IMX Cosmetics), Birmingham Industry: Health, wellness and beauty Education: Wayne State University School of Medicine: Doctor of Medicine

Congratulations! Adient congratulates Jennifer Marrocco, executive director of program excellence, on her selection as a Notable Woman in Manufacturing by Crain’s Detroit Business. Adient is the world’s largest, most comprehensive seating and components supplier.

adient.com

Julie Bartholomew may have trained in the halls of medicine, but she always considered herself an inventor. She is the primary inventor on 111 patent filings with 75 patents active. She founded IMX (pronounced “I mix”) in 2000 to create customized cosmetics manufacturing technology using automation and robotics. The technology allows users to customize virtually any color cosmetic, skincare product, cleanser or fragrance at retail venues, kiosks or on portable devices. “Dr. Julie Bartholomew’s IMX technology will deliver a progressive, state-of-the-art shopping culture and unique consumer immersion,” said Bruce Teitelbaum, CEO of New York-based retail design group RPG. “This is not an evolution; this is significant movement in the retail landscape.” Inventing isn’t Bartholomew’s only passion. She helps young girls and women explore opportunities in science, technology, engineering, art and math (STEAM) fields with internships and participated on the Michigan Science Center’s STEMinista Project. She also serves on the Michigan Council of Women in Technology and the Michigan Women’s Foundation.

Sandra Bouckley has held senior leadership roles at multiple manufacturing companies in addition to serving as president of the International Board of Directors at SME until December 2017. She is known for displaying tenacious focus on ensuring organizations and staff have the right priorities and continually improve processes. At Chrysler, Bouckley directed advanced manufacturing teams supporting $1 billion investments. At Eaton Corp., she implemented an electrical systems and services group manufacturing strategy while leading 65 sites in the United States. Bouckley also optimized the manufacturing footprint while at GKN Driveline. Automotive News named Bouckley one of the top 100 Women in the North American Automotive Industry in 2015. The Washington, D.C.-based Manufacturing Institute awarded her the STEP Award in 2014. “Sandi is incredibly capable. She has the perfect balance of tech and business savvy that enables her to successfully lead a hightech, fast-moving operation in the 21st century,” said Thomas Kurfess, professor of Fluid Power and Motion Control at Georgia Tech.

By the time Mary Buchzeiger was 16, she not only knew how to drive a Hi-Lo but she was also running her own shift operation at her father’s manufacturing business. She worked her way up to becoming CEO of Lucerne, a cast, stamped and forged components manufacturer, where she has led the company to continuous growth. Among her notable achievements: She helped FCA and customer Dura Automotive make the 2018 Jeep Wrangler more lightweight and efficient by working with engineers to redesign steel hinges into aluminum hinges. She challenged her team to reduce waste from supply chains and now they are redesigning packaging and creating freight consolidation points worldwide. In addition to running Lucerne, Buchzeiger also was CEO of Sure Solutions Corp. Last year, she merged the two companies to create a stronger brand identity. “As a business owner in the manufacturing arena, Mary Buchzeiger is a wealth of knowledge. Her life-long experienced focus on this industry has attributed to the incredible growth and success of Lucerne International,” said Jean Jernigan, executive director at Auburn Hills Chamber of Commerce.

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REBECCA BURDEAUX

JODY CLOTHIER

ALICIA BOLER DAVIS

ALECIA GABRIEL

LAUREN GIROUX

Senior Leader, Saline Lectronics Inc., Saline Industry: Electronics, PCB assembly

Corporate Controller, Sanders and Morley Candy Makers Inc., Clinton Township Industry: Food Education: Baker College: Bachelor of Arts in Accounting

Executive Vice President, Global Manufacturing, General Motors Co., Detroit Industry: Automotive Education: Rensselaer Polytechnic Institute, New York: Master of Science degree in Engineering Science; Indiana University: Master of Business Administration

Global FMEA Specialist, Roechling Automotive Inc., Troy (part of Röchling Global) Industry: Automotive Education: Louisiana State University, Baton Rouge: Doctor of Philosophy in Organic Chemistry

Director, Cloud Operations, Plex Systems, Inc., Troy Industry: Cloud, data, software Education: The University of Chicago: Bachelor of Science in Mathematics and Geophysical Sciences; The George Washington University: Master of Science in Computer Science

Rebecca Burdeaux leads 25 employees in the mechanical assembly and hand solder/repair of Saline Lectronics, which manufactures electronic assemblies for medical, aerospace, military and aftermarket automotive industries. “Beckie is a bulldog and extremely self-motivated. I like to call her a finisher; she always gets it done. I value that tremendously,” said Jason Sciberras, VP of Operations at Saline Lectronics. Known for being calm and consistent, Burdeaux has implemented lean manufacturing processes, efficiency verification systems and validation processes. She also gets great joy from empowering others. She once told a colleague, “The people that might not have that much confidence or they’re in a position in the shop that they don’t particularly like, you bring them in, build their confidence, tell them how good they are, teach them new skills and watch them take off. In return, they become solid employees and leaders within the company. When you’re done lifting those people up, they will perform for you, do anything you ask of them. They go above and beyond. These are the people that keep me showing up for work every day, after 17 years.”

In 2002, Morley Candy Makers, founded in 1919, purchased the brand and recipes of another iconic candy maker, Sanders, founded in 1875. When Jody Clothier was promoted from her role in general accounting to corporate controller, she made changes that improved operations at the $35 million candy empire. “Jody’s commitment to our organization and her ability to lead our team to ensure quality in everything we do is an inspiration to our leadership team,” said company President Ron Rapson. She works closely with the vice president of manufacturing, production manager and other key staff to ensure the company works resourcefully. Clothier moved Sanders and Morley from an antiquated system to cloudbased software that makes managing inventory, order processing and fulfillment and production processes more efficient, thereby increasing productivity. In addition to implementing cost-effective practices, Clothier, who takes the time to train her colleagues, is known for a positive and effective communication style.

Alicia Boler Davis leads GM’s global manufacturing operations, manufacturing engineering and labor relations organizations. She also leads 165,000 people at 159 sites in 20 countries. Being a strong team builder who fosters collaboration, Boler Davis has made workplace safety, productivity and quality improvements as well as cost reductions in her current role. In her previous role as senior vice president of Global Connected Customer Experience, she led all “connected customer” activities including infotainment, OnStar telematics and MAVEN. Boler Davis is to receive the 2018 Black Engineer of the Year Award from the Council of Engineering Deans of the country’s Historically Black Colleges and Universities. She will be the sixth woman to receive the award. “She is not only one of the top senior executives at GM, but is also the highest-ranking African-American woman in the entire automotive industry. She’s incredibly intelligent, highly motivated, a terrific engineer and an outstanding leader,” said Mark Reuss, executive vice president, Global Product Development, Purchasing and Supply Chain for GM.

Röchling, a $1.02 billion company that produces plastic, injection molded parts to reduce emissions, weight and fuel consumption, had no clear failure modes and effects analysis (FMEA) processes prior to hiring Alecia Gabriel as an FMEA specialist. In 2016, a year after her hire, she was promoted to Global FMEA specialist, and it’s no wonder why. Gabriel not only designed but also managed the implementation of the company’s FMEA management system portal and its global deployment. She worked with team members to develop the instructions, guidelines, standards, ranking tables and customer requirements and is ensuring that more than 100 team members at four engineering centers participate in training courses within one year. “Working with her has given me the ability to develop cohesive documents that are shared internally and externally. Alecia’s insight and direction have made it possible for me to problem solve and think critically in the early stages of product development. This has improved our relationships with our customers both internally and externally,” said Niccolo Colombo, product development engineer at Roechling.

Plex Cloud software is for the manufacturing shop floor, connecting suppliers, machines, people, systems and customers. And the work Lauren Giroux does — considering the potential effects of everything from malware attacks to natural disasters — keeps manufacturers’ operations running smoothly and safely. “As a remote manager, I need to have someone that I have trust and confidence in — that runs the team when I’m not there. Not only has she done that, I would not have been able to run an organization so efficiently and successfully without her. I’ve been in many large companies and organizations around the world and have never had someone working for me that I’ve been able to have such trust and confidence in,” said Todd Weeks, GVP of Cloud Operations and chief security officer at Plex Systems. Giroux not only has helped reduce unexpected downtime but also played an integral role in the 22 percent growth of the company’s customer base. Further, her well-rounded, informed approach and consistent attention to detail enables her team to respond more quickly to problems and improve the way leading manufacturers run their businesses.

Congratulations tobBeckie Burdeaux as a 2018bNotablebWoman inbManufacturing! And to allbwomen in this industry, web appreciate each of you for your hard work and dedication. Thank you! Congratulations to Debbie and Shaun for being selected for the Crain’s Notable Women in Manufacturing award! Ford is proud of your accomplishments and honored to have your leadership in our plants.

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KELLY MACVOY GUFFEY

AMBER HALL

JODY HALL

LAURIE HARBOUR

VICTORIA HICKS

Chief Revenue Officer, DWM Holdings Inc., Warren Industry: Steel Education: Michigan State University: Bachelor of Arts in Journalism

Senior Analyst, Global Innovation, Whirlpool Corporation, Benton Harbor Industry: Consumer goods Education: The University of Toledo: Bachelor of Science degrees in Bioengineering and Kinesiology and Exercise Science

Vice President, Automotive Market, The Steel Market Development Institute, Southfield Industry: Steel Education: University of Michigan: Doctor of Philosophy in Materials Science and Engineering (GM Fellowship)

President and CEO, Harbour Results, Inc., Southfield Industry: Consulting Education: University of Michigan, Dearborn: Bachelor of Science in Operations Management and Human Resources

Engineering Supervisor, Meritor, Inc., Troy Industry: Automotive Education: University of Michigan: Bachelor of Science in Mechanical Engineering

Vice P SME, Indus Educ Arts i

Amber Hall helps Whirlpool’s laundry marketing and engineering teams see the future, understand potential implications and implement a strategy that will “future-proof” the business. One of her biggest accomplishments at Whirlpool is providing essential thought leadership to the development of the first Global Trends and Foresight competency. Said Pam Klyn, vice president of engineering at Whirlpool: “Amber… led an amazing, comprehensive effort to pull together a Global Consumer Mega Trends book for Whirlpool Corporation. This book will serve as an invaluable tool for guiding the organization’s work around where we should focus our efforts in bringing great solutions for our consumers.” Prior to joining Whirlpool, Hall worked as a product development engineer at Ford Motor Co. where she was integral in the development of the Lincoln Continental seat, which in 2017 won its first award for seat comfort of the year. Mike Kolich, supervisor of Seat Comfort Engineering at Ford, said Hall advocated for the customer’s needs “and then built functional and technical excellence.” During her time at Ford, Hall secured eight auto-related patents for the company.

Jody Hall worked for 30 years at General Motors where she focused on implementing highstrength steel for weight reduction and enhanced occupant protection. In 2014, she joined SMDI, a unit of the American Iron and Steel Institute. Hall is the first woman vice president of the automotive market for the organization that represents major North American steel producers. The impact of her role at SMDI is clear: In the last year, about 60 steel-intensive vehicles debuted. The steel industry has communicated with the Environmental Protection Agency and conducted studies proving steel emissions are significantly lower than other materials. Hall also was co-lead on a project with the Department of Energy and others to develop an engineering model for third generation high-strength steel. Hall also actively works to recruit women into manufacturing-related fields. “Her technical background in material science and engineering, as well as her focus on light-weighting, gave her a cutting edge on the issues facing the North American steel industry,” said Deanna Lorincz, senior director of communications at SMDI.

Responsible for marketing and revenue-generating activities for several portfolio companies, Kelly MacVoy Guffey takes seemingly mundane ideas and makes them marketable and exciting. After working some years as an environmental reporter, MacVoy Guffey worked at consulting and interactive marketing firm Sapient before co-founding her own company, Double G Branding. Since 2014, she has helped transform DWM, an umbrella company for manufacturing brands, into a 21st century thought leader. DWM’s four brands manufacture steel and aluminum light poles for commercial and industrial markets. “As a service provider working with and for Kelly, I can attest to her drive, her passion and her foresight. She always grasps potential problems before they occur and is proactive at making her company better each and every day,” said Paul Mersino, an attorney at Butzel Long. MacVoy Guffey also is principal for VoyLét Capital, which invests in emerging technology companies and entrepreneurs, and a member of Endeavor, a nonprofit that works toward creating high-impact entrepreneurship in growth markets worldwide.

It’s the mission of Harbour Results to make North American manufacturing globally competitive. To do this, Laurie Harbour works to generate new products that help manufacturers improve business. Harbour recently spearheaded the creation and implementation of Harbour IQ, which provides real-time access to advisors, intelligence, expertise and data critical to developing successful, long-term manufacturing strategies and improve operational efficiencies. “Her commitment to advancing the industry and dedication to providing market insights — even though it is not always good news — has positioned her as one of the leading influencers of the manufacturing community,” said Jeff Schuster, senior vice president for Global Forecasting at Troy-based LMC Automotive U.S., Inc. Harbour worked with the Original Equipment Suppliers Association (OESA) to create the Automotive Tooling Council peer group to collaborate on key issues and interact with executives in tier 1 and OEM communities. “Her ability to identify and address the unique operational issues of the tooling community has resulted in a more informed and competitive industry,” said Julie Fream, president and CEO at OESA.

Victoria Hicks takes time to dive deep, research and understand a subject, making her an effective problem solver. “Victoria uses rigorous logic and methods to solve difficult problems with effective solutions. She effectively evaluates and analyzes options and selected the best option for implementation,” said Florin Patrascu, chief engineer at Meritor. In recent years, she worked on a high-profile challenge aimed at designing a leak-proof joint for one of Meritor’s product lines. By working with a complex supply chain, she balanced the separate needs of suppliers and created an effective design. She also engaged a cross-functional team to create control logic at the assembly line that automatically identified rejects and automated critical settings. When Hicks identified the need to enhance her engineering community’s knowledge of geometric tolerancing and dimensioning, she spearheaded a training program for engineers and designers that launched last year. “Victoria’s competencies and skills build an inclusive environment for all team members. We are fortunate to have her on the eteam,” said Carlos Pinotti, senior director of Engineering, Truck Axles at Meritor North America.

CONGRATULATIONS SARAH!

WWW.AURIASOLUTIONS.COM

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DEBBIE HOLTON

GRACE HSIA

Vice President of Events and Industry Strategy, SME, Dearborn Industry: Manufacturing Education: University of Michigan: Bachelor of Arts in Communication

CEO, Warmilu LLC, Scio Township Industry: Health, technology Education: University of Michigan: Master of Business Entrepreneurship

Promoted from director to vice president in 2016, Debbie Holton leads a team responsible for 20 manufacturing trade shows and conferences. She is known as a change agent who champions new projects and fosters an organizational climate that seeks and supports innovation. She collaborates with manufacturers, suppliers and industry organizations to identify key manufacturing challenges and develop potential solutions. “(Debbie) has developed a strong level of technical knowledge about the products/ services our industry needs, as well as cultivating close personal connections to many of the leaders of the companies, associations, universities and government agencies where her input is sought out and respected,” said Douglas Woods, president of the Association for Manufacturing Technology. Since 2009, Holton has doubled gross revenue at SME and has executed partnership agreements with organizations such as AMT. In 2012, she was named acting director of technology transition at the National Additive Manufacturing Innovation Institute, a public-private partnership created by the Obama administration, where she now serves on the executive committee.

Grace Hsia’s Warmilu is a small company, but it’s warming hearts and saving lives around the world. Founded in 2011 at the University of Michigan, Warmilu makes up to 80 nonelectric warming blankets, called IncuBlankets, for infants each week. The work began as a school project, when Hsia was a UM undergrad studying materials science and engineering, and has since grown to employ a full-time staff of seven women working in a 2,000-square-foot production facility. Her patented innovation — backed by WeWork, Hillman Accelerator and Procter & Gamble, among others — is approved for pediatric use in Kenya and received FDA approval in the United States. “We sell Warmilu IncuBlankets in the preterm size and have helped Warmilu become a channel to sell blankets primarily to midwives globally and in the U.S. to over 16,000 clinicians, midwives and thought leaders,” said Meg Wirth, CEO and co-founder of Rhode Island-based Maternova, Inc. Hsia, a 2016 Forbes 30 Under 30 honoree, is described as a “go-getter.” On the Board of Manufacturing at UM’s College of Engineering, she is also a mentor for Girl Scouts of Southeastern Michigan.

Congratulations Sue Kampe on being recognized for your many contributions to making Cooper Standard a world-class manufacturing company.

AMANDA HUTCHINGS

President, Peak Manufacturing Inc., Pleasant Lake Industry: Heavy trucks Education: Baker College: Bachelor of Arts in Business Administration When Amanda Hutchings started at Peak Manufacturing 10 years ago, she was answering phones. Now she leads 45 employees at Peak, which specializes in machining and cold forming for auto and mining industries. Her impact there includes implementing an employee appreciation program, providing profit-sharing and other improved benefits programs. Hutchings also launched a charity of the month donation program. “She takes innovative ideas and develops policies and procedures to implement them. If someone like her hadn’t come along, Peak never would have grown,” said Peak CEO Chris Salow. Hutchings is a member of the Women in Manufacturing association and on the board of The Enterprise Group of Jackson. However, her primary love is The Shop Rat Foundation, where she is chair. The organization seeks to fill the manufacturing talent pipeline and supports students with alternative ways to learn STEM curriculums. “Amanda advocates for the mission personally, donating her time and talents to the development of unique opportunities for youth to gain exposure to and prepare for careers within the manufacturing sector,” explained Kelly Burr, executive director at Shop Rat.

JENNY JAMES

SARAH JANOWICZ

Chief Operations Officer, Drought, Royal Oak Industry: Food Education: University of Michigan, Dearborn: Bachelor of Arts in Art History and Women’s Studies

Controller, Auria Solutions, Ltd., Southfield Industry: Automotive Education: Oakland University: Master of Accounting

As co-founder of Michigan’s first organic, coldpressed juice manufacturer with her three sisters, James oversees Drought’s sourcing, manufacturing and logistics. The company, which started in 2010 in a 700-square-foot kitchen space, now runs a 3,500-square-foot kitchen, a 15,000-square-foot production facility and six retail locations in Metro Detroit. An additional 40 retail outlets also sell Drought. With an uncanny ability to make things happen, James has worked closely with the Michigan Dept. of Agriculture, Michigan State University and the Food and Drug Administration to help create raw juice manufacturing guidelines. In 2016, under her leadership, the company attained USDA Organic Certification; and in 2017, the Michigan Food and Beverage Association named the company an industry leader. The company recently created a consulting arm, called Drought Solutions, to help other food and beverage manufacturers find success. Now, James is working with the City of Ferndale to establish a 35,000-squarefoot community kitchen. Said Drought CEO Caitlin James: “Jenny is supremely devoted to her job while maintaining high regard by all employees.”

Described as a force to be reckoned with, Sarah Janowicz leads Auria’s global accounting functions. The new tier 1 auto supplier provides automotive acoustical and textile solutions, and Janowicz was integral in combining business sectors of tier 1 suppliers IAC Group and Shanghai Shenda Co. Ltd. in 2017 to create Auria. She was responsible for the accounting data presented to various Chinese bureaucracies and obtained all the necessary Chinese regulatory approvals to make the deal come to fruition. “She has the rare and substantial challenge of having to navigate all compliance and reporting requirements of China, while maintaining our U.S. and European standards as a brand new organization,” said Auria CFO Scott Kehoe. One of Janowicz’s greatest strengths is in drilling down complicated scenarios and making them easy to understand for the executive team. She also mentors her staff. “Her vast understanding of the business and wealth of knowledge is an asset, which has earned her a seat at the table and the respect of her peers and our executive leadership,” said Udo Nwosu, treasurer at Auria. “I consider her … a source of inspiration to keep challenging myself and growing in my career.”

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SUSAN KAMPE

JENNIFER KILLINGBACK

JEANNINE KUNZ

PATRICIA LOPEZ

LISA LUNSFORD

Chief Information Officer and Vice President, Information Technology, Cooper Standard, Novi Industry: Automotive Education: Bowling Green State University: Master of Business Administration

Director, North America, Alexander Daniels Global, Detroit Industry: Additive

Vice President, Leaning & Development, Marketing, Tooling U-SME, Dearborn Industry: Manufacturing Education: Eastern Michigan University: Bachelor of Arts in Marketing

President, Rose-A-Lee Technologies, Sterling Heights Industry: Manufacturing Education: Lawrence Technological University: Master of Engineering in Manufacturing Systems, Manufacturing Engineering

Co-founder and CEO, Global Strategic Supply Solutions, Livonia Industry: Manufacturing; logistics Education: Bennett College for Women, Greensboro, N.C.: Bachelor of Science, Chemistry

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As CIO of Cooper Standard, Susan Kampe leads the company’s IT functions. She is working to fuel innovation and improvement and expand the scope of the company’s digital footprint, which includes providing real-time manufacturing and material handling process performance. A founding member of Cooper Standard’s Global Manufacturing Council, Kampe helps ensure IT assets are fully integrated in the company’s operating system. She also helped accelerate SAP (Systems, Applications & Products) implementation, launched an online indirect purchasing program that has saved $20 million annually and helped implement cyber-security safeguards. “From embracing the manufacturing process to innovating new systems to further leverage data, Sue brings enthusiasm to every aspect of her critical role in our manufacturing company,” said Keith Stephenson, executive vice president and COO at Cooper Standard. She also actively participates in the Cooper Standard Foundation and in the company’s Working Homes/Working Families project that refurbishes homes and has built a park.

Jennifer Killingback has only been with Alexander Daniels Global for a year. However, in that time, she has brought on several key accounts. She demonstrates a keen sense of what is needed beyond what her clients are requesting. As a result, she often improves the quality of hiring by providing talent that is necessary, logical, value added and sustainable. “As an inspirational and transformational human resources leader, Jennifer exemplifies core values and a proud history of putting the people she serves first. As a diplomatic leader, I have witnessed and admire Jennifer’s ability to challenge the status quo of an organization’s culture, collaboratively change it and sustain it,” said Kevin Buxton, manufacturing operations manager, at Change Management Enterprises. In the community, Killingback is a dedicated supporter of Mimi’s Mission. While working for EnvisionTEC, she coordinated a procurement of more than 100 backpacks and school supplies for the mission, a nonprofit serving families in Downriver communities.

Providing industry-relevant training for the manufacturing community is vital, and Jeannine Kunz is leading the charge. “Jeannine is unequivocally committed to the professional development and training of America’s workforce,” said Jeff Krause, executive director and CEO, SME. In her role, Kunz leads an 85-person team that works with manufacturers, educational institutions and governmental organizations to identify workforce challenges and provide solutions, such as certifications, apprenticeships and e-learning. She also led the formation of the first Lean-certification program and collaborated with The Manufacturing Institute on the development of the National Skills Certification System. An advocate for diversity in manufacturing, she is a mentor to women and volunteers her time at the annual Women in Manufacturing event. Kunz also serves on several industry boards and on the Workforce Development Committee for Automation Alley. “She brings vision and strategy necessary in advancing the additive manufacturing workforce and strategic partnerships for moving the United States forward,” said Rob Gorham, executive director, America Makes.

Patricia Lopez co-founded Rose-A-Lee Technologies with Jennifer Howard in 2013 to be a defense manufacturing arm to sister company Elmhirst Industries, an automotive manufacturing company based in Sterling Heights. Rose-A-Lee, which has grown nearly 400 percent in the past year, has since expanded its focus to provide engineering and manufacturing across multiple industries. It offers prototype and low-volume manufacturing of metal, plastic and carbon fiber components. “Patty’s vision and tenacity for growing her business is infectious,” said Kathryn Bigelow, president of Sterling Heights-based Mettle Ops. “Her community involvement inspires other women in nontraditional roles to achieve success while following her footsteps.” STEM director for the National Defense Industrial Association Michigan Chapter, Lopez is an advocate of women in manufacturing. She sponsors high school events ranging from Science Olympiad to Robofest and supports transportation costs for students to tour industry facilities. About 40 percent of her staff is female.

A 2015 national Minority Regional Supplier of the Year, Black Enterprise named Lisa Lunsford’s Global Strategic Supply Solutions to its BE 100s, a listing of the country’s largest African-American-owned businesses. Lunsford started GS3 in 2010 and developed it into a multi-million-dollar tier one supplier that designs, assembles and packages metal-formed components, products and assemblies and provides global freight management and merchandising services. “Lisa is authentic,” said Elizabeth Griffith, director of Engineering Interiors GM Global for Faurecia Interiors. “She leads by example, and her expectations of her team are mirrored by what she demands of herself.” She advocates for learning at all levels. Knowing that illiteracy rates are high worldwide, Lunsford works with her company’s production engineer to make sure staff are literate and directs those who aren’t to available literacy programs. In addition, Lunsford mentors young women, serves on the boards of the Detroit Regional Chamber of Commerce’s MICHAuto and Wayne State University’s Mike Ilitch School of Business Global Supply Chain Management Advisory group.

SME congratulates all the leaders recognized by Crain’s as 2018 Notable Women In Manufacturing in Michigan, especially the professional women of SME:

Sandra L. Bouckley

Debbie Holton

Jeannine Kunz

FSME, P.Eng. 2017 SME President

Vice President, SME Events & Industry Strategy

Vice President, Tooling U-SME

These three exemplify SME’s long history of achievement and commitment to promoting manufacturing technology, developing a skilled workforce, and attracting future generations for the advancement of manufacturing. Visit sme.org to learn more

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DEBORAH MANZANO

JD MARHEVKO

JENNIFER MARROCCO

CHERYL MERCHANT

SARAH OLSON

Plant Manager, Flat Rock Assembly Plant, Ford Motor Company, Flat Rock Industry: Automotive Education: University of Michigan, Dearborn: Master of Science in Science and Mathematics

Senior Vice President, Quality/Lean Management Systems & EHS, Accuride Corp., Livonia Industry: Automotive Education: Central Michigan University: Master of Science Administration in Manufacturing Plant Management

Executive Director, Program Excellence, Adient PLC, Plymouth Industry: Automotive Education: University of Michigan: Master of Business Administration, Finance; Master of Science in Industrial Engineering

President and CEO, Hope Global, Auburn Hills Industry: Manufacturing Education: Alma College: Bachelor of Business Administration

Director, Aftermarket Product Engineering, North America, Federal-Mogul Motorparts Corp., Southfield Industry: Automotive Education: University of Nebraska, Lincoln: Master of Engineering Management

Jd Marhevkoâ&#x20AC;&#x2122;s insight, passion and drive help Accuride employees â&#x20AC;&#x201D; from business unit leaders to factory-floor equipment operators â&#x20AC;&#x201D; achieve industry-leading process capabilities. She joined the company in January 2012. Four months later, she was promoted for launching common lean systems at each of the companyâ&#x20AC;&#x2122;s North American operations. In January 2018, the company promoted her to her current role. Said Accuride President and CEO Rick Dauch: â&#x20AC;&#x153;She has played an integral leadership role in Accurideâ&#x20AC;&#x2122;s achievement of worldclass operating performance by teaching and implementing the quality management processes and Lean Six Sigma tools applied by our associates. Her efforts were central to the record-setting four (Association for Manufacturing Excellence) recognitions Accuride received during 2014-16.â&#x20AC;? An ASQ Fellow, a Certified Manager of Quality/Organization Excellence (CMQ/OE), Quality Engineer (CQE) and Six Sigma Black Belt, she received The Manufacturing Instituteâ&#x20AC;&#x2122;s Women in Manufacturing STEP Ahead Award in 2016.

Analytical with a strong business acumen, Jennifer Marrocco is known for quickly aligning and driving teams to achieve common goals. She helped lead Adientâ&#x20AC;&#x2122;s $360 million acquisition of seating manufacturer Futuris Group before being promoted to her current position. In recent years, she has improved cost structure, served in Germany as global purchasing lead and now heads profit and loss for the company. She also plays an active role as a mentor for Womenâ&#x20AC;&#x2122;s Resource Network. â&#x20AC;&#x153;The acquisition of Futuris was essential to our company. It provided exposure to West Coast customers and allows us to further our new innovations and technologies. Jennifer played a big part in making that successful,â&#x20AC;? said Volker Krebs, vice president of Americas, seating, at Adient. Marrocco is active in the community. She serves on the board of the Detroit Area Pre-College Engineering Program (DAPCEP) and mentors students through Adientâ&#x20AC;&#x2122;s Detroit Cristo Rey student work program.

Ford Motor Co. named Deborah Manzano manager of the Flat Rock Assembly Plant in 2017 because she â&#x20AC;&#x153;consistently delivers the business priorities with a focus on quality, flawless execution and exhibiting exemplary leadership,â&#x20AC;? according to Ford. Her 3,500 employees produce the Ford Mustang and Lincoln Continental at the 2.9-million-square-foot plant and ship them to 160 countries. Passionate about strengthening the voice of women in manufacturing, she is also cochair of the Women in Manufacturing (WIM) Executive Committee. Manzano, who earned the Global Diversity & Inclusion Award in 2014, is a member of the Downriver Career Technical Consortium, which helps high school students gain training in skilled trades. â&#x20AC;&#x153;At first glance, you will notice Debâ&#x20AC;&#x2122;s high energy, positive attitude, diffusing warmth and friendliness. She is an ambitious leader that is technically savvy and stays connected to her team. She brings amazing energy and her heart and soul into her work,â&#x20AC;? said Liliana Ramirez-Jones, global director of Lean Manufacturing at Ford.

Cheryl Merchant has led Hope Globalâ&#x20AC;&#x2122;s expansion into Brazil, Czech Republic and China and tripled its revenue. In January 2017, the company, under her leadership, opened a customer technical resource center, focused on rapid prototype and development, in Auburn Hills. The center houses the companyâ&#x20AC;&#x2122;s North American advanced engineering, sales and project management teams. Prior to joining Hope, Merchant worked in several management positions for Ford Motor Co. and Lear Corp. Merchant also makes the success of women in manufacturing a priority. She provides one-on-one-mentoring, management and career training by involving women in high-level meetings and strategic planning sessions and by empowering them with decision-making authority in customer interactions. Explained Leslie Taito, senior vice president of Corporate Operations at Hope: â&#x20AC;&#x153;I have learned more about leadership in the past four years working with Cheryl than I have in my entire professional career. She sets the achievement bar high and will coach, push, teach and lead you out of your comfort zone to achieve a higher level of success than you thought possible.â&#x20AC;?

Known as a dynamic and well-organized leader, Sarah Olson develops new friction formulations for the Federal-Mogul Motorparts Braking Aftermarket and ensures those new products are manufacturing friendly for the companyâ&#x20AC;&#x2122;s operations sites. â&#x20AC;&#x153;Sarah is an excellent engineering director who brings the most out of her employees,â&#x20AC;? said Gregory Vyletel, vice president of Global IAM Manufacturing, Braking for Federal-Mogul. â&#x20AC;&#x153;She delivers on her commitments to the organization and is an integral part of why Federal-Mogul Motorparts is the market leader in Braking Technologies.â&#x20AC;? Brake friction materials are the core of the companyâ&#x20AC;&#x2122;s business unit, and Olson was integral in the design, development and launch of its Wagner OEx product line. She guided the product development team and was instrumental in generating the data set that assisted the marketing team with the launch of the line. In addition, sheâ&#x20AC;&#x2122;s been central to the companyâ&#x20AC;&#x2122;s latest release of copper-free aftermarket friction materials.

Congratulations Alecia! This recognition is well deserved, as your commitment and dedication are inspiring. Weâ&#x20AC;&#x2122;re honored to have you on our team.

Congratulations to Cheryl Merchant for being selected

To join Alecia and others like her pioneering the future of automotive plastics, visit jobs.roechling.com.

for Crainâ&#x20AC;&#x2122;s Notable Women in Manufacturing award! Hope Global is honored to have you leading our team as President and CEO for the past 18 years

Visit roechling.com

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

VIRGINIA PALINSKY

ANDRA RUSH

DONNA RUSSELL-KUHR

KELLY VICTOR-BURKE

SHAUN WHITEHEAD

Chief Financial Officer and Controller, Hausbeck Pickle Co., Saginaw Industry: Food Education: Baker College, Flint: Bachelor of Business Administration in Accounting

Chair and CEO, Rush Group, Wayne Industries: Logistics; automotive Education: University of Michigan: Master of Business Administration

President, CEO and Co-Owner, PTM Corp. and Modified Technologies Inc., Ira Township Industry: Metal stamping

Co-Owner and Managing Member, Burke Architectural Millwork LLC, Livonia Industry: Millwork Education: Eastern Michigan University: Masters in Historic Preservation

Plant manager, Ford Motor Co. Van Dyke Transmission Plant, Sterling Heights Industry: Automotive Education: Lawrence Technological University: Bachelor of Science in Electrical & Electronics Engineering

Hausbeck Pickle, which supplies pickles to fast food restaurants including Burger King, has experienced significant financial improvement as a result of Virginia Palinsky’s ability to organize her team, which includes the human resources manager, enterprise resource planning manager and accounting staff. “Most of the successful people I’ve known are the ones who do more listening than talking. Virginia doesn’t hear, but listens to what you have to say. … Her attention to detail and planning has helped this company meet goals that were once thought unattainable. I do not believe we would be where we are today without her,” said company plant manager Phillip Edward Hedden II. In recent years, she has negotiated and secured favorable financial terms with the banks for Hausbeck, which generates upwards of $45 million in annual revenue. She also has been executive sponsor for selection and implementation for Plex Manufacturing Systems and received high marks from financial auditors. Said to be at the forefront of hiring a talented leadership team, Palinsky inspires excellence among her staff. “She has been the best supervisor I have had in over 52 years of work, which includes many positions worldwide,” said Hausbeck ERP Manager Russ Edwards.

MARY PETROVICH Executive Chairman; Operating Executive, AxleTech International Inc., Troy; The Carlyle Group, Washington D.C. Industry: Automotive Education: Harvard Business School: Master of Business Administration Mary Petrovich is known for restoring order to chaotic situations. When she led AxleTech’s turnaround when it separated from Meritor in 2002, revenue grew to $600 million from $100 million. General Dynamics purchased the specialty drivetrain company in 2008, but it was struggling again when The Carlyle Group reacquired the company in 2015. Since then, Petrovich has led numerous improvements, including building a manufacturing plant in India and launching eight major programs from that. AxleTech also has embraced lean manufacturing and has transformed into an electric vehicle leader for heavy duty applications. “Mary’s intelligence, drive and conviction provided her with opportunities to be mentored by some of the finest leaders at General Motors, Chrysler and Allied Signal. And her storied career at AxleTech and The Carlyle Group speaks for itself,” said John Chalifoux, president and COO of MERA-The Remanufacturing Association. “She hires smart, humble, aggressive talent, with a passion to succeed. In her words, she hires business athletes — regardless of race or sex. As a result …Mary is recognized for her ability to make products, build companies and assemble — and nurture — diverse teams of people.” Petrovich serves on the University of Michigan College of Engineering Leadership Advisory Board and the Western Golf Association Evans Scholars Foundation board.

Andra Rush launched Rush Trucking Corp. in 1984 with a $5,000 loan. Now Rush Group, which comprises Rush Trucking Corp., Dakkota Integrated Systems and Detroit Manufacturing Systems, is the largest woman-owned business in Michigan and largest Native American-owned business in the U.S., based on revenue. The three companies, which together generate nearly $2 billion in revenue, employ nearly 4,000 people. “Two years ago, as the auto industry came roaring back, Andra Rush opened up a manufacturing firm in Detroit,” said former U.S. President Barack Obama during his State of the Union address in 2014 about job training. She knew that Ford needed parts, and she knew how to make those parts. “So, she dialed up what we call an American Job Center — places where folks can walk in to get the help or training they need to find a new job, or better job. She was flooded with new workers. And today, Detroit Manufacturing Systems has more than 700 employees.” The company builds more than 1 million auto instrument panels annually. Rush, who served on the U.S. Manufacturing Council from 2013-16, now serves on the boards of global manufacturing company Terex Corp., National Association of Manufacturers and Detroit Workforce. In 2017, she earned the Women in Trucking Association’s Distinguished Woman in Logistics Award. Passionate about recruiting and training women for careers in manufacturing, Rush also hosts 1,300 middle and high school students at her plants each year.

ABOUT THIS REPORT Notable Women in Manufacturing was produced by Crain Content Studio, the custom publishing division of Crain’s Detroit Business. The women featured here were selected based on their career accomplishments, their involvement in nonprofits and community organizations and evidence that they mentor others in their field, as outlined in an extensive nomination form that was written with the help of experts in the business community. The nominators pay a processing fee to nominate the women; those chosen do not pay to be part of the section. Notable Women in Manufacturing was managed by Leslie D. Green for Crain Content Studio. For questions about this report, contact Kristin Bull, Director of Crain Content Studio, at 313-446-1608 or kbull@crain.

Donna Russell-Kuhr, who co-owns metal stamping supplier PTM Corp. with her three sisters, knows all 300 of her employees by name. “She has thorough knowledge of the entire stamping and tooling processes and understands the business side as well,” said client Bob Evard, purchasing director for Fluid Carrying Systems at TI Automotive. Under Russell-Kuhr’s leadership, the company, which generates $50 million in sales annually, became a certified Women’s Business Enterprise in 2015. Two years later, it was named Michigan Women Business Enterprise of the Year. Added PTM cost analyst Michael J. Palazzolo: “She sets boundaries for how to accomplish the task or goal at hand, but then she also steps back and lets us decide the best way to complete that task or accomplish that goal.” She recognizes not everyone can afford a traditional college education and strives to ensure high school students are exposed to skilled trades in manufacturing. Russell-Kuhr, who recently was named president of the Economic Development Alliance of St. Clair County, financially backs high school and middle school robotic teams in the county and collaborates with nonprofits and educational institutions to develop opportunities.

Kelly Victor-Burke is a champion of disruptive thinking. Though responsible for front-end business operations, she can be found on the shop floor engaging employees and helping with the workload. After 30 years working in higher education, she started Burke Architectural Millwork with her master-craftsman husband, Barry Burke, in 2016. They designed the plant layout to maximize efficiency, and Victor-Burke hired a social media strategist to market the new manufacturing company. In 2017, the company generated $350,000 in revenue. To understand what kinds of skills were available, Victor-Burke toured colleges, trade schools, middle and high schools, and provided educational institutions with insight into improving their curriculums to include millwork. She also hired several young apprentices. Said Barb Gamber, economic development coordinator for the city of Livonia: “Within a short time of being open, Kelly and her team joined the Livonia Chamber of Commerce, activated an apprenticeship program ... She is an asset not only to the industry but to the community at large.”

In her 29-year career, Shaun Whitehead has led multiple leadership roles in Ford’s manufacturing skill team. In her current role, she oversees a 2 million-squarefoot plant that employs 1,500 and provides about 1.5 million front wheel drive transmissions for six plants in North America. Known for going out of her way to engage and excite her employees, she leverages her knowledge of engineering, operations and professional relationships to make significant contributions in both powertrain and corporate safety and conducts educational safety seminars. “Shaun … takes the time to actively engage employees at all levels, explores leading-edge health and safety business practices and truly understands how to integrate health and safety throughout the business,” said Jeff Pedlow, HS consultant for Workplace Safety & Prevention Services. “Her vision and leadership are not just for the importance of eliminating workplace injuries and illness but to strengthen the company culture so that it delivers a better experience for her employees, the business, right down to the customer.”

Crain Content Studio, the custom publishing division of Crain’s Detroit Business, will name the 2018 Notable Women in Finance in Michigan in a special section on April 23. In that report, we’ll profile the females in the financial industry – or those who work as Chief Financial Officers, Corporate Controllers or in other finance roles at their companies – who are considered leaders in their workplaces and in the community.

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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 // F E B R U A R Y 1 2 , 2 0 1 8

NO-FAULT

“I think on the House floor, it’s got a snowball’s chance in hell (of passing). I’m not unrealistic about its chances — I don’t think it has any chance.”

FROM PAGE 3

insurance companies, hospitals, rehab centers and personal injury attorneys to agree to changes in the system. “I think on the House floor, it’s got a snowball’s chance in hell (of passing),” said state Rep. Aaron Miller, a Sturgis Republican and one of the sponsors of the legislation to repeal the no-fault law. “I’m not unrealistic about its chances — I don’t thin k it has any chance.” The odds of Michigan flipping a switch in 2020 with a completely different auto insurance law may seem low. But experiences in other states could be instructive as to how Michigan policymakers proceed with addressing this vexing issue seen as a deterrent to talent attraction, particularly in Detroit where auto insurance premiums are often twice what drivers in the suburbs pay. In 38 states with tort laws, drivers injured in a car accident have to sue the other motorist to get their hospital and rehabilitation bills paid. Personal injury attorney Thomas Waun said drivers in tort states have much lower-cost auto insurance, but at a price. “It can take two years in litigation. It takes much longer where fault’s not an issue,” said Waun, managing partner in the Flint office of Johnson Law PLC. “You don't have any ability to recover your wages, you can’t pay

State Rep. Aaron Miller

your bills and it becomes a real economic problem, even if you have a viable claim down the road.” Unlike Michigan’s uncapped personal injury protection (PIP) benefits, most tort laws have limited medical coverage that the other driver can recover in litigation — and the dollar amounts can vary wildly by driver, said Paul Heaton, an adjunct economist at the Rand Corp. “It might be $50,000, it might be $1 million,” said Heaton, who has researched the nationwide decline of no-fault laws that were widely adopted in the 1970s. “And beyond that, the injured individual is kind of out of luck, at least through the auto insurance.” Under a tort system, when the limited liability coverage under the auto insurance is exhausted, drivers typically turn to their health insurance to cover hospital stays, surgeries and rehabilitation. “Everything would shift to health insurance, as a practical matter,” said Jim Lynch, vice president of research and education for the Insurance Information Institute, a Washington, D.C.-based industry group. “Whatev-

er health coverage you have, that’s the coverage you have.” Colorado abandoned its no-fault insurance law in 2002 in favor of a tort system and has seen a shift in who pays. In the subsequent four years, the percentage of drivers relying on Medicare or Medicaid government health insurance to pay for auto accident claims more than doubled to nearly 14 percent, according to a 2008 study commissioned by the Centennial State’s governor that year. The combined percentage of drivers classified as “self-pay” or charity care also doubled to nearly 29 percent of all claims, according to the study. The Colorado study found that between 2002 and 2006, auto insurers went from paying three-quarters of all hospital bills for injured drivers to about half. “Were Michigan to enact these laws, there’s going to be a shift to private health insurers and uncompensated charity care that’s borne by the medical providers,” Heaton said. The tort legislation introduced last week in the Michigan House

would establish a minimum bodily injury coverage of $20,000 for an individual and $40,000 for the entire accident. Drivers could choose to buy additional medical coverage to protect themselves in the event they hit and injure another motorist, Lynch said. Because Michigan’s auto insurance law provides medical treatment for drivers regardless of who caused the crash, it was envisioned to reduce the amount of personal injury litigation. But over time, through a series of court rulings, there’s been a skyrocketing number of lawsuits over the scope of medical care, lost wages and other benefits. A Crain’s analysis of state courts data found there was a 163 percent increase in the number of first-party lawsuits between drivers or their doctors and auto insurance companies between 2007 and 2016. In Macomb County, the number of no-fault cases shot up 165 percent during that decade-long period, while Oakland County’s number of lawsuits rose by 82 percent. The lawsuits have added an untold cost to the more than $3 billion in medical claims that Michigan drivers seek each year from auto insurers. “No-fault was designed with the mindset that we’re going to get rid of the litigation,” Heaton said. “As a practical matter, we’re not getting rid of the litigation.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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

www.crainsdetroit.com/onthemove

MANUFACTURING

LAW

TRANSPORTATION Michael Franklin

Amy Bryson

Director of Information Technology

Senior Vice President

Evans Distribution Systems

Stevens J. Sainte-Rose

Steven R. Cole

Chief HR & Transformation Officer

Member

Dawn Food Products, Inc.

Steven R. Cole has joined Bodman PLC as a Member in the firm’s Troy office. He represents a broad array of corporate and individual clients, serving all aspects of their diverse business and personal legal needs. His practice focuses on the acquisition and development of real estate, leasing, mortgage financing, entity formations, conversions and dissolutions, LLC and joint venture structuring, buy/sell and business succession planning, and sophisticated trusts and estate planning.

Stevens J. Sainte-Rose has joined bakery manufacturer and ingredients supplier Dawn Foods as the company’s Chief HR & Transformation Officer. As part of the global leadership team, he will play an integral role in driving business transformation strategies, while ensuring Dawn remains an industry leader by delivering bakery success every day. Previously holding global roles at Walgreens and The Coca-Cola Company, Sainte-Rose has demonstrated an ability to adapt and drive organizational change.

Bodman PLC

PUBLIC RELATIONS

Logistics and supply chain is seeing drastic changes and is projected to see more in 2018. Evans has brought on Michael Franklin, Ph.D, an IT guru with more than 25 years of experience in information technology, to stay ahead of the curve. Franklin holds a bachelor’s degree in Electrical Engineering and Ph.D. in Medical Physiology and Biochemistry, both from Wayne State University. Franklin has saved millions by improving the infrastructure of Fortune 500 companies and bringing innovative ideas.

Airfoil Airfoil Group, announced the promotion of Amy Bryson to senior vice president from vice president. Bryson is a marketing communications specialist with more than 20 years of experience working with clients across enterprise technology, SMB segments, security, and automotive sectors. Through sound strategy and execution, she has been able to help Airfoil’s clients achieve business goals ranging from breaking into new markets to redefining brand or product perceptions among critical audiences.

KNOW SOMEONE ON THE MOVE?

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

SPOTLIGHT KPMG names Meter new managing partner

KPMG LLP has named Betsy Meter as office managing partner for the audit, tax and advisory firm’s Detroit and Grand Rapids offices. Meter will r e p l a c e H e a t h e r Paquette on March 1. Paquette will depart for San Francisco to serve the company in an advisory role, spokesBetsy Meter woman Barbara Ketcham-Mednick told Crain’s. Meter will handle strategy and growth for the two offices, which employ nearly 400. She has been with the company since 1982 and joined the partnership in 1996, the company said in a news release. Meter is a CPA and has a bachelor’s degree in accounting from Michigan State University. She was a Crain’s Forty Under 40 class of 1998 honoree.

Historical Society CEO to step down

Bob Bury, longtime executive director and CEO of the Detroit Historical Society, will step down at the end of June. He said he doesn’t plan to retire, and he doesn’t yet have another job lined up. But the time is right, the 64-yearold said, to explore other ways he can be part of the positive momentum in the city and region. It’s a good time to step down, Bury said, noting the society, which is operating on a $4.5 Bob Bury million budget this year, has a solid foundation and staff and a strategic plan for the next three to five years. During his 16-year tenure, the society, which founded the museum in 1928 and operated it for 20 years before turning it over to the city of Detroit, took over full operation of the Detroit Historical Museum once again from the city and added Dossin Great Lakes Museum on Belle Isle and the Collections Resource Center under a long-term agreement with the city in 2006.

St. Vincent de PaulDetroit names CEO

Butzel Long PC attorney Daniel Malone is departing the for-profit sector to become CEO of the Society of St. Vincent De Paul-Detroit, effective March 1. Malone, 65, will succeed Roger Playwin, who has served as interim executive director since last fall when former Executive Director Christopher Stark, who had been in the role for a year, left to become outreach director for Guest House in Lake Orion.

C R A I N ’ S D E T R O I TCRAIN B U’SSDI ETROIT N E SB SUSINESS // F E B R U A R Y 1 2 , 2 0 1 8

February 12, 2018

MCLAIN FROM PAGE 3

Tigers will give away more bobbleheads of 1968 players than they will 2018 players. The team won’t say anything specifically about McLain, whom they’ve invited to events sporadically over the decades. His life speaks for itself, and sometimes loved ones are beyond redemption. “We are thrilled to honor the legacy of players from that ’68 ballclub, including many who played a vital role with heroic performances, including Al Kaline, Willie Horton, Bill Freehan, World Series MVP Mickey Lolich, and AL Cy Young winner and MVP DennyMcLain, to name a few,” the Tigers said in a statement to Crain’s. McLain is keenly aware that the Tigers aren’t making a bigger deal of his historic 1968 season. “I don’t quite understand it. There might be something going on I don’t know about,” he said. “Maybe there’s a good explanation for it. I’m not as hurt as much as my wife is. Maybe some things will change before it’s all over. It would be nice to be included in the exceptional moments. I was there in ’68 when we won it all.” The Tigers certainly will try to use McLain and his ’68 teammates in a bid to capitalize on Baby Boomer nostalgia to get butts in Comerica Park’s seats. The anniversary is an obvious one to be celebrated, but the milestone is particularly important for the Tigers because they’re deep into a rebuilding effort that likely means more losses than victories. Detroit lost 98 games last year, traded away much of its veteran talent, and saw attendance drop nearly 25 percent over the past five seasons. Season ticket sales in 2017 fell to about 15,000 from a peak of 27,000 in 2008.

Celebrating history While the Tigers have a full season of various promotions scheduled, the 50th anniversary plans are the most significant and so far include giveaways such as tote bags, jerseys, socks and pennants. When the St. Louis Cardinals, whom the Tigers beat to win that ’68 World Series, are in Detroit for the weekend of Sept. 7-9, the plan is to gather the remaining members of the championship team, including the tarnished McLain, to celebrate with fans. During the season, the Tigers also will give away 40,000 bobbleheads of still-living 1968 stars this season: Al Kaline, Bill Freehan, Willie Horton and Mickey Lolich. Bill Freehan instead of McLain? Freehan was an 11-time all-star catcher in 15 seasons with Detroit, but McLain is forever associated with ’68. But Freehan’s scowling face, under the script D of a Tigers cap, never appeared on the cover of Sports Illustrated next to the headline “Denny McLain and the Mob ... Baseball’s Big Scandal.” That’s exactly how McLain appeared to readers of the Feb. 23, 1970, edition of the magazine. He was suspended for half that season, the Tigers traded him, and his career quickly fell apart. He tried to resurrect his glory days with stops in Washington, Oakland and Atlanta, but his arm was spent from all those innings on the mound at Tiger Stadium. What followed was the well-worn

The boys of ’68 Here are the Detroit Tigers’ announced promotional plans to recognize the 50th anniversary of the 1968 World Series championship team, which will culminate with players from that team invited for the Sept. 7-9 weekend series against the Cardinals. May 12: 1968 tote bag (20,000) May 26: Al Kaline bobblehead (10,000) June 2: Bill Freehan bobblehead (10,000) July 7: Willie Horton bobblehead (10,000) Aug. 25: Mickey Lolich bobblehead (10,000) Sept. 7: “Sock it to ‘em” socks (10,000) Sept. 8: 1968 replica road jersey (20,000) Sept. 9: 1968 replica pennant

“It would be nice to be included in the exceptional moments. I was there in ’68 when we won it all.” Denny McLain

McLain saga: Bankruptcies, criminal convictions, autobiographies, personnel tragedies, eye-rolling headlines, but also an endless litany of funny speaking engagements, TV and radio appearances during the Tigers’ latest heyday, and baseball card show signings with lines of parents and grandparents taking little ones to meet the hero of 1968. It’s that mixed legacy that makes McLain a dicey commodity for the Tigers’ marketing department. He made history, and much of it no good.

McLain’s story The Tigers claimed the 19-year-old McLain off waivers from his hometown Chicago White Sox in 1963, and by 1968 the fast-baller had developed into one of baseball’s elite pitchers. His ’68 season is one of the great ones: In 41 starts, he threw 28 complete games, assembling a 31-6 record with a 1.96 ERA and 0.905 WHIP over 336 innings. He shut out opponents six times and struck out 280 batters, which propelled him to the American League’s MVP award, the Cy Young Award, and he was named Associated Press Male Athlete of the Year. All at age 24. McLain remains the last MLB pitcher to reach 30 or more wins (and it hadn’t been done before McLain since Dizzy Dean in 1934). That 1968 season still captivates: A book published in October called “The Year of the Pitcher” by New York Times columnist Sridhar Pappu recounts what McLain and the Cardinals’ equally dominant Bob Gibson did on the mound while the country was roiled by Vietnam, the Civil Rights Movement, assassinations and riots. McLain was paid $33,000 for that season, which wasn’t bad since the average MLB salary in 1968 was $10,000. The highest-paid player that season was San Francisco Giants outfielder Willie Mays at $125,000. Time magazine put McLain on its Sept. 13, 1968, cover for a story about him and the astounding success of pitchers that year. The profile, which labeled McLain as “angry” and “arro-

The Detroit Tigers’ 50th anniversary celebration of the 1968 World Series team will be a centerpiece of this year’s Tigers marketing efforts.

gant” and portrayed him as a bit of a flamboyant kook, included a quote from him that was revealing: “Money impresses me. Big business impresses me. Important people impress me. I’m a mercenary. I admit it. I want to be a billionaire,” he told the magazine. After McLain’s regular season, he was less effective in the World Series, losing a pair of games to the Cardinals’ Gibson, the National League’s MVP and Cy Young winner. McLain would win the critical Game 6, and teammate Mickey Lolich won Game 7 to give Detroit its championship. Those days in October 1968 proved to be the pinnacle of his career. Despite baseball coming to the aid of batters by lowering the pitcher’s mound 5 inches, McLain had another great year in 1969, winning the Cy Young again and commanding a raise to $65,000. A year after that, he was paid $90,000 — he was always public with his salary demands. But 1970 also was the year Sports Illustrated put his face on the cover for a story linking him to the mob, with allegations that local mobster Tony Giacolone broke two of his toes in 1967 over an unpaid debt. Baseball Commissioner Bowie Kuhn suspended him for half of 1970, and the Tigers traded him to the Washington Senators, where he struggled. There’d be pitching stops in Oakland and Atlanta, and in the minors, but by 1972 his arm was shot and his career was over before he was 30. There’d be a variety of business ventures over the years, some of which paid nicely and some of which put him in prison. McLain maintains his innocence despite his criminal convictions. His weight ballooned and his reputation suffered, rebounded and suffered again. Endorsements and jobs and radio gigs, which reportedly paid vastly more than baseball ever did, came and went.

The tiger in winter Today, he’s slimmed down and still does more than a hundred baseball card show events a year, mostly outside of Michigan because that industry has declined so much here. McLain still keeps in touch with some of his 1968 teammates, who often were targets of his barbs in 1968, but he said he spends much of his time caring for his wife of many years, Sharyn, who suffers from Parkinson’s disease. Her health dictates his schedule these days. “We’re going to do whatever she can do,” he said. She was too ill to make the trip to Florida earlier this

year for a ’68 anniversary celebration, McLain said. McLain said he plans to take up the Tigers’ invitation to participate in the September weekend commemorating their 1968 championship, just as he did 10 years ago for the team’s official celebration of 40 years. While he’s hurt there’s not more of a focus on his own historic accomplishments — a glove from ’68 is in Cooperstown, but he has zero chance of being enshrined himself — McLain said that won’t keep him from enjoying the anniversary celebrations. “Regardless of anything else, it’s going to be a great summer,” he said. “I just want to enjoy the year. My big-

Page39 39 gest thing is I want to be around for the fans and for my children and grandchildren.” He laments that time has left himself and so many of his ’68 teammates ailing, and a few are gone — such as Norm Cash, Dick McAuliffe, Ray Oyler, Jim Northrup, Gates Brown, Earl Wilson and Joe Sparma. “We’re older than dog dirt. It’s hard to believe it’s been 50 years,” he said. His ability to charm never left him. McLain, a talented organist who also once was good enough to make money hustling golf, does some paid speaking and work for local car dealerships. “It’s enough to keep my busy, keep me alive, and have some laughs,” he said. “If you don’t stay busy and have something to do, people don’t go looking for you.” His right arm, which pitched 1,886 hard-throwing major league innings, is in bad shape, McLain said. He relied on cortisone injections to keep pitching, and his rotator cuff wore out. His knees are bad, too, he says. “If I shake your hand, I have to use my left hand to raise my right hand,” he said. “I’ll live with what I have. That’s the byproduct of the careers we had. That’s what we did.” Still, he credits never smoking, drinking very little, and his mother’s genes for keeping him going despite his colorful life. “Who ever thought I would live to be 73 going on 74,” he said, chuckling. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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MEDICAID FROM PAGE 1

Over several years, the Medicaid program moved to a statewide payment rate. For example, Oakland endured a $29 million loss in 2014. In a study conducted by Rehmann for the Michigan Association of Community Mental Health Boards, which represents the 10 PIHPs, the number of DAB-eligible people the state Medicaid program paid at a lower, incorrect rate to the PIHPs has increased in fiscal 2016 and 2017, creating the revenue problem. The problem appears to be that the DAB population served by the PIHPs has been miscategorized as either improperly enrolled in Healthy Michigan or in the Temporary Assistance for

Needy Families population, said Bob Sheehan, CEO of the MACMHB. People enrolled in TANF and Healthy Michigan, which is the Obamacare Medicaid expansion, are reimbursed by the state at much lower rates. For example, PIHPs are paid an average of $262.39 per month for a DAB enrollee, compared with a $37.30 average for Healthy Michigan and $16.68 average for TANF. Therefore, the Rehmann report concluded, 41,775 DAB-eligible people were paid at a much lower rate than they should have been in 2016 and 2017, leading to underpayment to the 10 PIHPs of $97.6 million. Sheehan said the solution to the problem is for MDHHS to reimburse the PIHPs for the past two years of inadequate payments and correct the program for fiscal 2018 and beyond.

But Lynda Zeller, MDHHS’ deputy director for behavioral health and developmental disabilities, told Crain’s that she informed Sheehan, the PIHPs and several state legislators that no adjustment is planned. She said PIHPs, if they are suffering shortfalls, will have to use their state-authorized 5 percent reserve margins to cover the difference. Zeller said cutting services to the DAB population or any Medicaid recipients would not be appropriate. “We asked our actuaries (Milliman) to review this issue, to look at the full impact and to determine whether or not the DAB payments are actuarially sound or not,” Zeller said. “We came up with conclusions very different than the PIHPs,” Zeller said. “We are in agreement that the PIHPs are receiving less revenue for the DAB category, but we disagree on the rea-

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sons and the amount.” Zeller could not provide Crain’s or the PIHPs with the revenue difference the state has found, but she said it was far less than $100 million. Another potential reason for the difference is that Milliman had data for less than 18 months in fiscal years 2016 and 2017, while the PIHPs’ data from Rehmann was for the full two years. “We are not saying that people haven’t moved from DAB to TANF or Healthy Michigan, but it is also true that the numbers of people who moved from TANF and Healthy Michigan to DABs has more than offset it,” Zeller said. “The bigger issue is the number of people who dropped out of DABs.” Zeller could not explain why 77,859 people dropped out of the DABs program from October 2015 to February 2017, according to the Milliman study.

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Lynda Zeller: No adjustment is planned.

Bob Sheehan: Reimburse for past two years.

She said that is the primary reason the PIHPs experienced a revenue shortfall.

Regional impact Detroit Wayne Mental Health Authority Chairman Herbert Smitherman, M.D., said Detroit Wayne has lost $15 million in revenue the past two years. He said DWMHA has sufficient reserves now, but payment reductions over time could lead to an “enormous impact” on patients. Anya Eliassen, CFO at Oakland Community Health Network, said the revenue shortfall for Oakland’s DAB population is $9.5 million for fiscal 2016 and 2017. “It was higher in 2017 and as more and more people coming in, it is getting worse for 2018,” she said. Eliassen said another problem is that some DAB-eligible recipients who have been enrolled mistakenly through Healthy Michigan will be coming up to their 48-month maximum coverage this spring. Under Healthy Michigan, beneficiaries lose full coverage after four years and must contribute a percentage of coverage costs or buy insurance through the Obamacare exchange. “We are trying to send them back through (MDHHS) to get on the right Medicaid program, but it is difficult,” she said. Marianne Huff, a former mental health executive and longtime advocate, said the shortfall is hitting across the state, especially in West Michigan. Jeff Brown, CEO of Lakeshore Regional Entity in western Michigan, said Lakeshore has not only lost $10 million over two years, but it has nearly exhausted its reserves. Brown said two years ago, Lakeshore had 53,500 per month enrollment for region and was paid $257 per member per month DAB enrollee. This year, however, enrollment dropped by 1,392, leading to a $7 million decline in revenue in 2017, Rehmann said. “We are finishing our year-end finance report a month early so we can give to state legislators and others to show what our deficit is,” Brown said. “We are hoping for relief, but we have few options.” But if the PIHPs run out of reserve funds, Zeller said, the state must reimburse the PIHPs for any shortfalls. “Beyond the 5 percent reserve, the state must cover all costs beyond that,” Zeller said. Zeller said all the PIHPs need to do is notify the state. “They would alert us, and we would cover it by getting the appropriation,” she said. When told the state would cover the losses, Sheehan reacted with skepticism. “When has the state ever covered any losses?” he said. “For 20 years, the state never stepped in once.” Alan Bolter, associate director with the Michigan Association of Community Mental Health Boards, said the state should step in now with money to fix the shortfall. “They should fix it on the front end to avoid the administrative burden and headaches that are already happening on the west side.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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CALENDAR CUTBACKS FROM PAGE 3

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Officials for Detroit-based Henry Ford Health System said the reimbursement rule change is expected to cost the six-hospital system about $8 million annually. While Warren-based St. John Providence Health System is expected to be affected, executives declined comment. As an investor-owned hospital chain, six-hospital Detroit Medical Center is not affected by the cuts. “A significant number of Michigan’s 340B hospitals are not affected by the rule,” Laura Appel, MHA’s senior vice president and chief innovation officer, said in a statement to Crain’s. “However, our larger hospitals are anticipating significant reductions in payments.” Alexander Mansour, director of finance and contracts at Henry Ford Health, said the drop in revenue will be felt throughout the system. “Our fear is that the cuts to the program, the benefits to Henry Ford, will worsen over time,” said Mansour, who also is the 340B compliance officer. John Polanski, CEO of Henry Ford’s community care services, said the 340B cuts force the health system to accelerate the more than 30 efficiency and cost-savings programs already underway. “It will not put us out of business,” he said. “We deal with changes every day. I learned a long time ago that we need to move ex-

“A significant number of Michigan’s 340B hospitals are not affected by the rule. However, our larger hospitals are anticipating significant reductions in payments.”

Health Service Corps and teaching health centers, budget sequestration and continued Medicare cuts under the Affordable Care Act.

The 340B controversy

Laura Appel, MHA’s senior vice president and chief innovation officer

tremely fast to keep up with the changes.” Mansour said Henry Ford Health is helping more than 2,100 low-income patients in metro Detroit and in the Jackson area with Allegiance Health through the program. “The costs of these drugs are accelerating like we have never seen before,” Polanski said. “Some drugs cost $20,000 to $30,000 per month,” including drugs for hepatitis C, HIV, cancer and transplants. Polanski said Henry Ford will never close its doors to patients needing drug assistance and other programs. “We will figure it out. We have clearly built it into the budget,” he said. But hospitals are facing cuts in other federal payment programs for a variety of reasons. They include a loss of $2 billion later this year in disproportionate share funding that support safety net hospitals, a failure to reauthorize $370 million for the National

In 1992, Congress adopted the 340B drug pricing program that allows safety-net hospitals to purchase certain drugs at discounts for Medicare patients from pharmaceutical companies. The purpose is to provide assistance to low-income, rural and otherwise underserved patients. However, because those hospitals still receive full Medicare reimbursement for the drugs, the hospitals kept the difference between the discounted price and the Medicare reimbursement. Hospitals like Henry Ford used the excess revenue to develop programs to serve their most vulnerable patients. Over the years, the number of health facilities qualifying for the program has grown rapidly. Between 2001 and 2011, the number of 340B facilities roughly doubled to about 16,500 sites, according to a study published in Health Affairs in 2014. The Medicare Payment Advisory Commission said in its 2016 report to Congress that there were 2,170 340B hospitals, many of which have multiple 340B sites. Critics of 340B claim that hospitals are using the savings from the 340B program to line their own pockets or to create centers and programs that will increase hospital profit margins and that the underserved patients are not receiving the benefits the program was

intended to provide. Mansour denied that hospital providers are using 340B inappropriately. “Those of us who are on the front lines of care know a very different reality,” he said in a letter. Mansour said 340B offsets about 30 percent of the health system’s $400 million in uncompensated care costs. He said revenue generated from the 340B program is used to fund the following programs. J Embedding pharmacists in primary care and specialty clinics in Detroit to optimize treatment of chronic diseases. J Providing additional services for all patients including the “meds to beds” program, home delivery and courier services. J Helping to cover bad debt (uncollected patient payments) from patients who cannot afford to pay for the full cost of care. J Helping to fund the Community Health and Social Services (CHASS) Clinic, which provides free primary care services to about 1,300 uninsured and underinsured Detroit residents every month. J Operating school-based and community health programs in 11 child and adolescent health centers and two mobile medical units. J Providing services to Medicaid and Medicare beneficiaries at less than cost across the system (government health plan provider reimbursement does not cover the full cost of care). Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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MARIJUANA FROM PAGE 1

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Precision was founded in 2015 by Birmingham private practice attorney Marc Beginin and founder and president of Med Grow Cannabis College, a trade school for state-licensed medical marijuana growers and caregivers, Nick Tennant. Tennant was a 2010 Crain’s Twenty in their 20s honoree for creating the trade school. Beginin was introduced to Tennant, who had the idea of creating extraction machinery for the marijuana industry, in 2012 but was hesitant to get involved. “The big thing for me was the leaf. I wanted no part of it,” said Beginin, who remains a licensed attorney but hasn’t enter a court room in a few years. “But what Nick showed me: It was a chemistry set. It’s manufactured product. We don’t touch the leaf, we make the shovels,” — a reference to the companies that supplied products, like shovels, and services during the California gold rush. Those businesses ultimately made far more money than those panning for gold. Precision, which employs 25, is expected to generate $20 million in revenue in 2018, continuing its trajectory of 200 percent year-over-year growth, Beginin said.

Entering new phase For market entrants, it’s not gold they’re after, but green. Michigan’s marijuana industry, which is legally limited to only to the roughly 250,000 medical marijuana card carriers, is expected to generate more than $694 million in sales in 2018, according to Washington, D.C., analytics firm New Frontier Data. That figure is expected to eclipse $755 million by 2020 — strictly from medical use. The Coalition to Regulate Marijuana Like Alcohol, a grassroots committee formed to legalize adult use of marijuana in Michigan, submitted 365,000 signatures as part of a ballot drive to the state in November. That could put the issue in the November 2018 elections. If passed, people 21 and older could possess up to 2.5 ounces of marijuana and grow up to 12 plants for personal use. The proposal also calls for a 10 percent tax on marijuana, on top of the 6 percent state sales tax. If voters approve the measure, Michigan would become the 11th state to legalize recreational marijuana. New Frontier projects Michigan’s marijuana industry would generate between $1.5 billion and $2.3 billion in sales by 2020 if it passed a well-regulated adult use program. Giadha Aguirre De Carcer, CEO of New Frontier, said 2018 is the beginning of the third phase of the U.S.’s marijuana industry, transitioning from users turned business operators to middle-management entry into the market to now public investor funds and top executives leaving their perch in traditional business to join the industry. “These new companies are not only surviving and getting more capital, they are getting executives with major experience,” she said. “It’s not complicated, it’s a numbers game. There’s demand and a monetizable business model, and the companies are maturing, which has attracted more mature money and talent.” Canada, which is expected to legalize recreational marijuana on June 1, already has several public companies operating in the space, including Canopy Growth Corp., the first publicly

Byron McVay and Damian Nicholson at Precision Extraction Corp. in Troy.

traded cannabis company in North America. Canopy (TSX: WEED and NASDAQ: TWMJF) sold more than a metric ton of cannabis oil in its second fiscal quarter, which ended on Sept. 30, 2017, and has a market cap of more than $6 billion. Founder Bruce Linton previously served as president of Ottawa Internet company webHancer Corp. In October, New York-based Constellation Brands Inc., which sells Corona beer and Robert Mondavi wines, said it plans to acquire a 9.9 percent stake in Canopy for roughly $199 million. But the industry is ramping up more slowly than expected in Michigan, partially due to complex regulatory framework, said Alan Rogalski, licensed clinical pharmacist and attorney for Warner Norcross + Judd LLP in Southfield. But early entrants with business know-how will line their pockets, he said. “The first ones to the playing field will control the playing field,” said Rogalski, who co-chairs the firm’s life sciences practice and is the lead attorney on the marijuana industry. “There is going to be a stampede, because we have such a huge population of medical users. The money is going to talk. Those with business sophistication and the ability to raise funds have the ability to plug and play very rapidly.” As of late January, only 14 state license applications for growing facilities, processing facilities, provisioning centers and compliance facilities had been submitted to the Michigan Department of Licensing and Regulatory Affairs. However, roughly 600 applications are in the prequalification stage or are in process, according to data provided by David Harns, public information officer for LARA. The state began accepting applications in December on its newly designed regulatory framework, nine years after residents voted to legalize medical marijuana. Crain’s spoke with several high-volume growers, those expecting to grow tens of thousands of plants, but none agreed to speak on record until licenses are approved by the Medical Marihuana Licensing Board. The first batch is expected to be presented to the board in March or April, Harns said in an email. But it’s the establishment of the supply chain that’s occurring right now, said Margeaux Bruner, executive director of marijuana consulting firm Quantum Mechanic Services LLC. “This is different than building an engine, but you still need outside suppliers, packaging experts, labeling compliance, benchmarking, etc.,” said Bruner, a former contract project management analyst for Ford Motor Co.

“Everything we’ve learned in the automotive industry is very useful in this one. This is the middle of a perfect storm, where we’re witnessing the end of prohibition and there’s immense opportunity for professionals. We’ve only just begun the professionalization of this industry. It’s going to need specialty skills from real estate brokers to educators to CPAs to all the other necessary infrastructure to build a viable industry.” Rogalski said it’s the external investors playing the market on the periphery that are enjoying the market growth in Michigan. “People who own the land, get the municipal approval with an ability to build the facility; those are the guys getting paid regardless if the seeds sprout,” Rogalski said. “All that makes money with little to no risk. It’s a calculated industry right now. The continued flow of money is eventually going to drive more change and sophistication.” Real estate has likely been the most active part of the pot equation in recent years. Lansing real estate magnate Ron Boji, president of The Boji Group, is already developing space for medical marijuana growers. Boji previously told Crain’s he expects a lofty profit by leasing space in up to seven of his approximately 25,000-square-foot industrial buildings across the state. Jeff Donahue, another private practice attorney, and investors acquired 130 acres in Windsor Township, 10 miles southwest of Lansing, to develop for marijuana growers specifically. Donahue’s Harvest Park Development LLC industrial park sold out all 10 lots, which are expected to house 15,000- to 80,000-square-foot grow buildings, of its first phase that came on the market in November six months ahead of schedule. It’s recently opened up development on the second 67acre phase. “We were looking at the industry migrating from that weed shop, ‘Reefer Madness’ concept to a more traditional equity market,” Donahue said. “We saw an opportunity.” However, few communities in the state remain open to marijuana grow operations or dispensaries, which makes developments like Harvest Park more valuable, Donahue said. Brokers and legal experts have pointed to communities like Warren, Troy, Commerce and Shelby townships, Livonia and Detroit as being prime targets for growers in Southeast Michigan. “From a pure park development standpoint, you can get acreage that’s decent,” Donahue said. “But when it comes to cannabis, having infrastructure, zoning and ordinances and a municipality that’s friendly ... That’s

LARRY PEPLIN FOR CRAIN’S

rare, so this ended up being a prime piece of property that we’re able to sell at a premium.” Donahue said his investors are considering another development in West Michigan as the industry matures. There are still limits to how much like any other business marijuana operations can be. Banks can’t lend to marijuana growers and sellers because it’s considered a Schedule 1 narcotic, according to the U.S. Department of Justice, and banks would be in violation of federal money laundering laws. States seeking a tax-collection infusion from marijuana sales are left relying on the trusting nature of the industry’s operators. Because of banking rules, most marijuana businesses pay taxes in cash. As the San Francisco Chronicle wrote on Jan. 28: “Bay Area marijuana retailers who went fully mainstream this month were forced to act like gangsters anyway as they rumbled down freeways and across bridges in sport utility vehicles and sedans and, in at least one case, a Tesla, bearing cash piled in shopping bags and suitcases.” An estimated 70 percent of the more than 1,600 recreational and medical dispensaries in California, which legalized recreational marijuana use at the beginning of the year, are still dealing in cash. Rogalski expects this to stimulate change at the federal level, regardless of who is in office. “They are going to have to walk into the treasury with a bag full of dimes; It’s onerous,” Rogalski said. “That’s the only system that currently exists — having the equivalent of a Brinks truck, two guys with Glocks on their hips and ex-military personnel walking in bags of large deposits for taxes into the treasury. That can’t continue. Revenue is generated, taxable revenue, and certainly the IRS expects to be paid taxes, so that’s going to change and I think it’s going to change in the next 12 months.” For Precision, none of these rules matter. It’s dealing in manufactured products. Expensive products, ranging from $43,000 to $1 million, that are in demand. It’s the only extraction product supplier in the state and is looking to expand globally in the coming years, Beginin said. “For Michigan, it was always a question of whether the end product was legal. Now the Legislature has answered that, which I like,” Beginin said. “Right now we’re the only manufacturer East of the Mississippi (river), and our biggest market is California. The industry is getting bigger and bigger, and we’re looking to grow with it.” 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 // F E B R U A R Y 1 2 , 2 0 1 8

THE WEEK ON THE WEB

RUMBLINGS

Patterson wants to let some cities opt out of regional transit plan

Scenes from a stock market correction

FEBRUARY 2-8 | For more, visit crainsdetroit.com

akland County Executive L. Brooks Patterson vowed last Wednesday night to oppose any regional transit plan that “forces” nine affluent communities that have long rejected being part of the SMART bus system into a new property-taxing district for metro Detroit. In his annual State of the County address, Patterson said he offered a deal to regional leaders on a new Regional Transit Authority that would raise $1.2 billion in taxes for an improved mass transportation network, but exclude Novi, Waterford, Lake Angelus, Rochester, Rochester Hills, Keego Harbor, Sylvan Lake, Orchard Lake and Bloomfield Hills from a new millage. Patterson said elected leaders in Detroit, Wayne County and Washtenaw County want those nine communities — which opted out of the Suburban Mobility Authority for Regional Transportation in the mid-1990s — included in a proposed service area to raise nearly $1.7 billion in transit taxes over 20 years. “If someone doesn't see the rub here, they must be playing Candy Crush on their cell phone,” Patterson said at the end of an hourlong speech at the Flagstar Strand Theatre for the Performing Arts in Pontiac. The speech marked the first time Patterson has publicly called for the ability of communities to opt out of the fledgling Regional Transit Authority, which was created in 2012 after decades of debate as an entity designed to knit together the pathwork of different bus systems running through Detroit and its suburbs. “I’ve been asked to force into the tax plan those nine communities ... that have long ago opted out of the current transit tax — they don’t see a benefit,” Patterson said. “Some political leaders south of Eight Mile want me to do it anyway.” Representatives for Detroit Mayor Mike Duggan and Wayne County Executive Warren Evans did not have immediate comment on Patterson’s proposal. Patterson, a 79-year-old Republican, said he’s been “ostracized” by “certain members of the business community” for continuing to oppose the transit plan sought by his counterparts. “I want you to know that as long as I’m county executive, I will respect the wishes of the voters of the select nine Oakland County opt-out communities,” said Patterson, who has been Oakland County executive since 1992.

BUSINESS NEWS J Fast-casual, New York-based Mediterranean chain Hummus & Pita plans to open five locations in Southeast Michigan, first in downtown Detroit and Troy. J DTE Energy Co.’s electric and gas utilities are being questioned by the state’s regulator over thousands of power shutoffs resulting from a computer system malfunction that led to customers not getting required second notice their service would be cut. J The dates for the 2019 North American International Auto Show are set:

KURT NAGL/CRAIN’S DETROIT BUSINESS

The Michigan Department of Transportation is adding to the arsenal of tactics it’s using to mend crumbling roads in metro Detroit. The usual pothole-patching techniques haven’t been adequate this winter, MDOT spokeswoman Diane Cross said. The winter repairs that go beyond using the usual cold-patch material will be “very expensive” and are expected to last longer, Cross said. They include using hot-mix asphalt, which will compact and should last longer; a liquid asphalt solution, including a stone mixture or recycled asphalt; and an innovative, fast-set material for cold weather that the department hasn’t used before.

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

64 percent

JJThe amount by which the assessed value of industrial property in Detroit rose in the past year — a sharp increase.

200

JJThe number of hourly employees Spanish supplier Grupo Antolin plans to add at its Shelby Township plant.

$5 million

JJThe price Dan Gilbert paid for the former Comerica Bank building in downtown Detroit at 201 W. Fort St. at Shelby Street.

The public show is Jan. 19-27. The charity preview is slated for Jan. 18, which follows the press preview on Jan. 14-15 and industry preview Jan. 16-17. J The Detroit Pistons are now worth $1.1 billion, the first time the NBA franchise has crossed the billion-dollar valuation threshold, according to Forbes.com. Detroit was valued at $900 million a year ago. J An Elder-Beerman in Adrian and Carson’s in Benton Harbor are set to close after the department stores’ parent company Bon-Ton Stores Inc. filed for bankruptcy and prepares to close 47 stores across the country. J The local TV rating for Philadelphia’s 41-33 upset of the New England Patriots in Super Bowl LII last Sunday night drew a 47.1 rating in metro Detroit — a slight fall versus last year, but still higher than the national audience rating. J Quicken Loans Inc. aired a one-minute ad during the Super Bowl that featured Detroit native comedian Keegan-Michael Key as a simplicity “translator” and is part of a bigger marketing campaign. J The Detroit Lions hired New England Patriots defensive coordinator Matt Patricia as their latest head coach. J Birmingham-based Amson Nassar Development closed on the purchase of a 301,000-square-foot building in Fraser occupied by Faurecia Interior Systems Inc.

J Lisa Keane, who has spearheaded a financial turnaround at University Physician Group, Wayne State University’s 400-member faculty practice plan, will be reassigned to other duties on March 1 after nearly two years as president and COO of UPG. J Soccer will return to Keyworth Stadium in Hamtramck on April 14 when Detroit City FC takes on Western Michigan University to kick off the team’s 2018 season. J San Francisco-based workout studio The Bar Method is readying to open its first Michigan location in downtown Detroit in March.

ast week’s wild ride on Wall Street had its local impact, too. Monday’s record-setting 1,175-point decline in the Dow Jones Industrial Average followed by a 1,033-point drop on Thursday was joined by declines in metro Detroit’s major players. Two companies saw more than a billion dollars in market value evaporate between the time the market opened Monday and Tuesday. Ford Motor Co. lost nearly $1.2 billion in value between opening on Monday at $10.78 per share to close on Thursday at $10.47 per share. Troy-based Aptiv, formerly known as Delphi’s automotive technology unit, lost nearly $1.1 billion. Manufacturing in general felt the pain, because Wall Street’s fear of higher interest rates can affect companies in that business disproportionately. Construction-materials maker

Masco Corp. and Auburn Hills auto supplier BorgWarner both felt the pain, losing $623 million and $470 million in value, respectively. But it wasn’t just manufacturing, Ann Arbor’s Domino’s Pizza Inc. lost $517 million in value between Monday and Thursday. The week’s selloffs were a correction spurred by news the previous Friday, when a healthy jobs report accompanied by rising wages sparked fears that the U.S. Federal Reserve would raise interest rates more quickly than expected. David Sowerby, managing director and portfolio manager at Ancora Advisers LLC in Bloomfield Hills, said the market volatility could continue for several weeks, but is expected to level off and recover due to strong public company balance sheets, modest wage growth, a tightening labor market, among other measures.

OTHER NEWS J Beacon Park, developed by DTE Energy Co. and run by the Downtown Detroit Partnership, is hosting free film nights in a heated tent Saturdays in February. J Gretchen Valade is donating $2 million to Wayne State University’s jazz center, bringing her total support for the university’s jazz program to $9.5 million. The Donation will fund the future Gretchen Valade Jazz Center. J Former state Rep. Rashida Tlaib, a Democrat, announced she plans to run for Michigan’s 13th District, the congressional seat left vacant by former U.S. Rep. John Conyers, who resigned in December. J PNC Foundation granted Say & Play with Words, a Detroit literacy pilot program for pre-K children, an extension with a $250,000 donation. J Speaking to Detroit Economic Club members last week at the Masonic Temple in Detroit, Sen. Gary Peters called for Michigan to capitalize on its leadership role in developing autonomous vehicles and become a leader in artificial intelligence at large.

OBITUARIES J Former U.S. Rep. Joe Knollenberg, a longtime insurance business owner who represented parts of Oakland County for 16 years, died last Tuesday at age 84 from complications stemming from a long battle with Alzheimer’s disease. J Ralph Caponigro, a former finance executive for The Stroh Brewery Co. and for Compuware Corp., where he helped lead the company during its initial public offering, died Feb. 3 at 85 as a result of a slip-and-fall injury that happened in mid-January.

OLYMPIA DEVELOPMENT OF MICHIGAN/SCREENSHOT

The view of Woodward Avenue southbound at Little Caesars Arena showing new retail shopping on the I-75 overpass downtown.

Woodward’s I-75 overpass may be widened for retail M

ore details have been revealed about the effort to install new retail along Woodward Avenue on its I-75 overpass in downtown Detroit. The Ilitch family’s Olympia Development of Michigan is eyeing widening the Woodward bridge over the freeway by 60 feet to accommodate another approximately 9,000 square feet of retail. Details are spelled out in a proposal Olympia submitted to the Michigan Department of Transportation that Crain’s obtained Tuesday through a Freedom of Information Act request. In 2016, MDOT put out a request for proposals for what it calls the Fisher Freeway Downtown Crossings project, which in the proposal Olympia estimates to cost $10 million to $15 million. The Detroit-based development company, which did not respond to emailed questions, says in the proposal that two retail buildings — a 6,150-square-foot building on the west and a 3,000-square-foot building on the east side of the bridge —

would be built on 40-foot and 20foot expansions, respectively. Olympia is seeking funding from the U.S. Department of Transportation through the Transportation Investment Generating Economic Recovery, or TIGER, program for 80 percent of the costs for the first phase, which is the bridge expansion. If Olympia does not receive the TIGER grant, or if it doesn’t cover 80 percent of the project cost, the company says it would seek funding from the state’s Transportation Economic Development Fund, the Transportation Alternatives Program and/or the federal FAST Act. Olympia would pay the remaining 20 percent of the first-phase cost. The second phase, which is the ground-up retail construction, would be financed through a construction loan and Olympia equity of about 30 percent to 40 percent. Local tax breaks would also be sought, including perhaps Neighborhood Enterprise Zone funding, the proposal says.

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