Crain's Detroit Business, March 12, 2018 issue by Crain's Detroit Business

An appreciation: Homebuilding pioneer Bill Pulte Page 3

What keeps La June Tabron, Rip Rapson up at night? Page 4

MARCH 12 - 18, 2018 | crainsdetroit.com HEALTH CARE

Ascension layoffs total 500, with more coming

ENERGY

DTE gets pushback on new St. Clair County power plant DTE Energy’s natural gas plant 

Breaks ground in 2019; opens in 2022 in East China Township

jgreene@crain.com



Expected to provide 24/7 power to 850,000 homes

Ascension Health in Michigan is nearly complete with its employee layoffs and management restructuring as it has laid off 500 workers, including 20 executives or managers, at its 14 hospitals in Michigan. Gwen MacKenzie, Michigan market executive of Ascension Michigan, said in an exclusive interview last Thursday with Crain’s that Need the layoffs cover a to know wide range of job  Ascension categories: nursMichigan has laid es, medical theraoff 500 employees, pists, technicians, including nurses unit clerks and and 20 in other support sermanagement vice employees. “We have tran Goal is to cut sitioned close to costs by $60 500 associates. million this year, Every one of improve efficienthose has been cies and worker painful and hurtproductivity ful,” said MacK Unknown enzie, a former number of union oncology nurse nurses and other who has headed support personnel up Ascension expected to be laid Michigan since off this year 2014. “You probably wonder why we were not talking more openly about it. It is very private and sensitive matter that we take very seriously on behalf of our associates.” Ascension Michigan employs about 26,000 people, and the layoffs so far are a little more than 2 percent of the workforce. But MacKenzie said more layoffs are expected after Ascension completes employee-to-patient ratio reviews and notifies the Catholic health system’s 25 collective bargaining units, which account for 22 percent of its workforce, or 5,800 workers. Further layoffs of those unionized employees could take several months to complete, she said. “We don't expect a large number” of more layoffs, she said.

DTE claims plant will significantly reduce emissions compared with coal plants

By Jay Greene



Debate is over whether the plant will save ratepayers compared with renewables. 

Transformers

By Chad Livengood clivengood@crain.com

Heat recovery steam generator

of its 2.2 million electric customers in Southeast Michigan. The opposition groups said DTE could save customers more than $340 million by shelving the gas plant and instead investing in wind and solar, other renewable energy options, storage technologies and energy efficiency programs. By doing so, the groups said DTE would increase its renewable energy portfolio to 24 percent of generation from the 11 percent projected based on DTE regulatory filings, said Vote Solar, Union of Concerned Scientists and the Environmental Law and Policy Center. Tom Beach, an energy consultant hired by Vote Solar with Crossborder Energy in Berkeley, Calif., said DTE used outdated costs for solar, which are much lower now, and significantly underestimated the future prices of natural gas when it submitted its proposal to the MPSC last July. SEE DTE, PAGE 21

SEE AMAZON, PAGE 18

Steam turbine

Generator Generator

Gas turbine Building

Transformers

Transformers Source: DTE Energy

Battle over whether gas, renewables are less costly By Jay Greene jgreene@crain.com

SEE ASCENSION, PAGE 18

DTE Energy Co. is facing strong opposition from environmental and renewable-energy groups to its proposed $1 billion, 1,100 megawatt gas-fired power plant in St. Clair County. At issue is what would be cheaper and greener to replace three old coalfired plants DTE plans to close: the gas plant, or investments in renewable energy sources. A decision from the Michigan Public Service Commission is expected in late April. DTE says building the gas plant is the least costly option for customers, will help it reduce carbon emissions by 30 percent by 2030 and will replace some lost jobs due to coal plant closures in St. Clair County. The company says it wants to break ground on the project in 2019 and begin producing enough electricity to power 850,000 homes, which is 39 percent

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“Wind and solar, particularly solar, are dropping fairly rapidly and DTE used cost data that was 18 months old to make it look significantly less expensive to build the gas plant.” Tom Beach, energy consultant

Need to know

DTE wants to build a $1 billion natural gas plant in East China Township to replace three coal-fired plants 

 A decision is expected by end of April by the state Public Service Commission  Opponents argue that DTE underestimated the future price of natural gas and failed to price out renewable energy resources and other electricity demand reduction strategies

Detroit’s Amazon incentives remain ‘trade secret’ The Michigan Economic Development Corp. is keeping secret the tax incentives offered to Amazon for an economic development project in downtown Detroit that’s not expected to ever materialize, citing a “standing” nondisclosure agreement with billion- Need aire Dan Gilbert’s to know  MEDC is keeping Rock Ventures. The state agen- secret the tax cy’s decision to incentives offered shield from public to Amazon disclosure the like-  Citing a “standing” ly billions of dol- nondisclosure lars in tax incen- agreement with tives the state was billionaire Dan prepared to give Gilbert’s Rock Amazon for a Ventures 50,000-employee corporate campus  Raises questions in Detroit stands in about whether contrast to its dis- Gilbert and Rock closure last week Ventures are getting of up to $2 billion special treatment in incentives of- from the state fered to Amazon for a Grand Rapids campus and the more than $3 billion in subsidies offered last year to Foxconn Technology Group for a manufacturing plant in Michigan. It also raises questions about whether Gilbert and Rock Ventures are getting special treatment from the state, and why the state is keeping secret incentives that it and the city of Detroit had offered. Public money was being offered that would have benefited Gilbert, but the public isn’t being told how much. The MEDC denied Crain’s request under the Freedom of Information Act for the total amount of taxpayer subsidies offered for a downtown Detroit campus based on a nondisclosure agreement with Rock Ventures that was forged between Gilbert’s company and the state nearly a year before Amazon set off an inter-state bidding war for its new campus.

Gas turbine

NEWSPAPER

Heat recovery steam generator

DEVELOPMENT

INSIDE

The technology for your next car is here today << Contintental Automotive Systems is developing an automated trailer hitching and guiding system; Adaptive LED headlamp technology is coming to the U.S. Page 14

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MICHIGAN BRIEFS

INSIDE

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

Firm gets $990 per hour to represent MSU board

Michigan State University’s Board of Trustees hired a law firm to represent its interests amid fallout over a now-imprisoned sports doctor who sexually assaulted athletes. The East Lansing school said last week the Washington, D.C.-based firm Akin Gump Strauss Hauer & Feld LLP was retained to represent the board. The contract, which puts two of the firm’s partners, Steven Ross and Doug Maynard, on the job, includes a 10 percent discount to provide legal advice “at the lowest cost” for $990 per hour. Akin Gump Partner Estela Diaz and General Counsel Stan Brand will cost $835 and $775, respectively, to assist on the matter. Paralegals could charge $175 to $380 per hour and additional discounts will be available for other timekeepers handling billing services, according to the document obtained by Crain’s. The contract was signed by General Counsel Robert Noto on behalf of the MSU board on Feb. 7. Akin Gump has the right to change rates in the future, it said. The firm is coordinating work with Michigan State’s internal legal team and other external law firms that the university has retained to address Lar-

ry Nassar-related inquiries and lawsuits. Congress, the NCAA, federal agencies and Michigan attorney general’s office are investigating. Nassar worked for Michigan State and USA Gymnastics, which trains Olympians. More than 250 women and girls gave statements in court about how the former doctor abused them under the guise of medical treatment. He was sentenced to decades in prison.

FOIA exemption OK’d for cybersecurity info

Cybersecurity plans and vulnerabilities would be exempt from open-records requests under legislation approved by Michigan lawmakers last Tuesday, the Associated Press reported. House members sent the bill to Gov. Rick Snyder in a 104-4 vote, paving the way for the state to block cybersecurity information shared with Michigan State Police and other public bodies. Supporters of the exclusion said without it companies might be reluctant to cooperate with officials in the event of a security breach due to fear of sensitive information being released under the Freedom of Information Act. Snyder spokeswoman Tanya Baker said in a statement that the governor looked forward to reviewing the final bill. “Given his private sector background, he understands better than

CLASSIFIEDS

DEALS & DETAILS

KEITH CRAIN

OPINION

PEOPLE RON FOURNIER

NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION/T. ARCHER

Outbreaks of blue-green algae have plagued Lake Erie since the 1990s.

most how the protection of private and sensitive computer data is critical to effectively combating cybersecurity incidents,” Baker said. Rep. Brandt Iden spearheaded the endeavor as part of a package of cybersecurity reforms being wrung out by the Legislature and the governor’s office.

EPA plan seeks cuts in causes of Lake Erie algae

The U.S. Environmental Protection Agency is calling for stepped-up efforts to reduce nutrient pollution that contributes to algae blooms in Lake Erie but is not recommending new federal regulations to accomplish the task. A plan released by EPA’s Chicago-based Region 5 office sets targets for reducing phosphorus that feeds giant algae masses that in the past decade have caused fish kills and beach closures on the shallowest of the Great

Lakes, harming tourism and threatening drinking water. A 2014 bloom settled over the drinking water intake pipe for Toledo contaminating the municipal supply for more than 400,000 people. But the strategy relies largely on existing state and local programs and voluntary actions by the region’s farms to prevent phosphorus-laden fertilizers, manure and sewage from flowing into waterways, particularly in a dissolved form that creates toxins. It acknowledges some tougher rules might be needed but leaves those decisions to the states. “EPA is working with federal and state partners to ensure local communities and economies continue to benefit from this vital resource,” regional administrator Cathy Stepp said, describing the plan as “a significant step in fulfilling our commitment to protecting the health of Lake Erie.” The blueprint seeks a 40 percent re-

WEEK ON THE WEB

duction in the amount of phosphorus entering the lake by 2025, a goal endorsed previously by Ohio, Michigan, Indiana and the Canadian province of Ontario. That would require a reduction of about 7.3 million pounds annually from U.S. sources, the EPA plan said. It said a critically important need is reducing runoff of phosphorus during spring storms through better sewage treatment, stormwater management and farm practices. For agricultural lands — the biggest source of dissolved phosphorus in Lake Erie’s algae-choked western basin — the plan outlined measures that can keep fertilizers from running off, including reducing nutrient applications on frozen or snow-covered ground, saturated soils and before significant rainfall.

CORRECTION  A story on Page 1 of the March 5 issue misstated the title of Jay Farner at Quicken Loans. He is CEO.

Future

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RUMBLINGS

ENERGIZING MICHIGAN’S

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WILLIAM J. PULTE, 1932-2018

Building a legacy

William Pulte building his first home at age 18 in 1950 and a Detroit Times newspaper clipping from that time. COURTESY OF PULTEGROUP

Pioneering PulteGroup founder helped shape American suburbs By Kirk Pinho kpinho@crain.com

In 1950, 18-year-old William J. Pulte and some of his friends built a house near Detroit City Airport. Over the next 67 years, Pulte and his companies would build 24 more — per day, on average. Pulte, the founder of national homebuilding pioneer PulteGroup Inc., died March 7 in Naples, Fla., at 85, leaving a legacy of more than 600,000 homes that helped define the shape of American suburbia. He helped transform the housing industry by taking it national, one of

the few companies spreading out in the 1960s from simply building in his own backyard of Detroit to Chicago, Washington, D.C., and Atlanta, creating a powerhouse that he took public in 1969 as Pulte Home Corp. Within a quarter-century, it had become the largest homebuilder in the U.S. “From a builder standpoint, he was groundbreaking. He was one of the first builders who became a larger regional builder to branch into other markets,” said longtime friend Paul Robertson, chairman of Bloomfield Hills-based homebuild-

MUST READS OF THE WEEK Battle Creek makes more than cereal Crain’s Michigan Business looks at Battle Creek’s industrial park, Snackwerks, Duncan Aviation and Restore (269). Pages 8-11

What’s Michigan’s future if third-graders can’t read? Chad Livengood looks at a study that details alarming statistics about the state’s test scores in reading. Page 5

Need to know

 Founder of national homebuilding pioneer PulteGroup Inc. dies  Legacy of more than 600,000 homes built 

Helped shape American suburbia

er Robertson Bros. In addition, he was a revolutionary in the creation of the modern-day subdivision — and in prominently stamping a brand on those communities, said Randy Wertheimer, president and CEO of Farmington Hills-based homebuilder Hunter Pasteur Homes. “I don’t believe subdivisions existed like we know them today until Pulte began doing that in the 1950s and 1960s,” he said. SEE PULTE, PAGE 20

COURTESY OF DAVE LEWINSKI

Bill Pulte, founder of Pulte Home Corp., in a file photo around the time of his retirement in March 2010 at age 77.

NONPROFITS

Civilla, Code for America team up to improve public benefits applications By Sherri Welch swelch@crain.com

Michigan may soon have something to teach the rest of the country about improving the process for applying for public benefits. The Detroit-based nonprofit Civilla has teamed up with California-based nonprofit Code for America to improve mobile users’ experience with the state’s online benefits application using a similar technique that puts real-life people at the center of studying how to im-

prove the process. The local effort comes as part of a national project aimed at strengthening online application systems for public benefits. It builds on Civilla’s recent completion of its inaugural project, a nearly 2 1/2-year effort that took Michigan’s legendarily complicated public benefits application — a 42-page, intimidating monster of a form — down to 18 pages or less, depending on what’s being applied for. SEE CIVILLA, PAGE 22

Need to know

 Civilla is working with California-based nonprofit on national pilot to improve public benefits application process for mobile users  Code for America chose Civilla because of its work to shorten and clarify Michigan’s paper public assistance application, based on user feedback  The joint work of the two nonprofits is expected to inform similar public benefits projects across the U.S.

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WHAT KEEPS YOU UP AT NIGHT?

Vulnerable and humble, leaders who changed two cultures In the first days of their partnership, Rip Rapson of the Kresge Foundation and La June Montgomery Tabron of the W.K. Kellogg Foundation had RON to convince their FOURNIER staffs to trust — trust in their leadership and trust the plan to join their two nonprofits in a mission to improve early childhood education in Detroit. “I think La June is with you,” Rapson’s staff at Kresge told him after an early meeting with Kellogg, “but I am not sure her staff is with you.” Tabron said she heard the same notes of skepticism from her Kellogg colleagues after the first meetings with Kresge. But those days are behind them, and now the two nonprofits are spending $50 million to establish and coordinate an early childhood education program they call Hope Starts Here. To understand what led to the breakthrough — and what lessons other leaders might learn from the partnership — I interviewed Tabron and Rapson together after they received a joint Crain’s Newsmakers of the Year award. Tabron said it takes “courage and risk-taking” to change staff culture. “I think that is something that we have to do in our businesses, no matter what type of business we are running,” she told me. “There are many aspects to courage, and one is to be vulnerable and to admit that you are not the smartest person in the room and you don’t have all the answers.” Nodding his head in agreement, Rapson added that the Kellogg-Kresge marriage also is an example of how Detroit leaders are learning to share power. “The distributive leadership model is the future of a complex place like Detroit,” he said. “I cannot think of a single initiative that the mayor has engaged in the last two years that was not enhanced, accelerated or made possible by philanthropy, or by the private sector, in one way or another.” Without ceding their institution’s authority or expertise, according to Rapson and Tabron, both Kresge and Kellogg have multiplied their impact by coming together. Our conversation was edited for length and context. What keeps you awake at night, La June?

I’m really troubled about whether there is a will of people to improve the lives of all other people (particularly children). That is a big and scary statement.

Yes.

Is that something you have always worried about, or is it something that has happened in the last 13 to 14 months?

It has been a little bit of both, because the structures I think you put in place with children are long-term structures and systems, and we have not been diligent about making them work for children for a very long time. But what is shifting me — and what’s keeping me up at night more recently — is that I am much more aware of the

The Tabron File

The Rapson File

La June Montgomery Tabron

Rip Rapson

Age: 55

Age: 60-something

Education: Bachelor’s degree in Business Administration from the University of Michigan and a Masters in Business Administration from the Kellogg Graduate School of Management at Northwestern University

Education: BA in Government, Pomona College; JD from Columbia University

Mentor: Moses Walker Biggest achievement: Raising two African American boys First job: Summer Program Attendance Taker Life goal: To be of service

force against what I am working towards. Why is that?

The discourse around immigration and some of the nationalist movement. It is troubling because it is making me more keenly aware that we have not made as much progress as we thought we have. For me, that is directly related to my work on how to improve the lives of all children. Rip, what keeps you up at night?

The persistence of … intergenerational poverty. The question of how you put in place this really complex circuitry of opportunity is really hard, and I think one of the things I increasingly struggle with at Kresge is how acutely contextual change is. What it looks like in Detroit is very different from what it looks like in Memphis and it is very different from what it looks like in New Orleans, and yet all the underlying drivers are the same. It is good health, safe neighborhoods, proper education preparation, adequate transit and adequate connection to jobs. The possibility that you can actually work in local places and make a difference serves as something of an antidote to the pervasive despair that so many of us are feeling about our national environment, and yet the more local you work, the more in tune you have to be to the peculiarity of the circumstances and context, and that means you have to be smarter, tougher and more persistent. La June, tell me something you would not be doing as well if you did not have

Mentor: Don Fraser, Congressman and Mayor from Minneapolis Biggest achievement: Contributing to the evolution of the Kresge Foundation’s approach to philanthropy (and helping create federal wilderness protection for the Boundary Waters Canoe Wilderness Area in Northern Minnesota) First job: Teaching tennis to inner-city kids in Minneapolis Life goal: Ensuring that America’s cities are inclusive, equitable and just the skill set of Kresge and Rip in this partnership.

I can probably give you many examples. (To name one): If you look at the imperatives of Hope Starts Here, there is a piece that involves inadequate facilities: They are not in the right locations and community members need an access to a place to go. That is an area where Kresge has led. Rip, same question to you.

Kellogg brings so much to this. It is almost humbling: their sophistication with community engagement, their deep knowledge of what early childhood opportunity looks like in community is really profound. I do think one of the things that Kresge does well, not just in Detroit, but elsewhere, we weave in larger systems, because as complex and multifaceted as the early childhood system is, it still needs to touch broader community development imperatives as a place. A child care provider exists in a place, a childhood center exists in a place. How you get to that place, how you engage parents in that place, whether that place is a place of high quality of life or a poor quality of life (are questions that must be answered). So I think what we’re going to do from our side is to try and constantly ask the question: What is the larger surrounding? How do we make sure that health systems, transportation systems and workforce training systems and housing systems all fit together? It sounds too big and too complicated, but I think that’s why working in a geography is important. Detroit is a big place, but it is a manageable place. We can actually get our hands around it.

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JEFF HUARD/SPOTLIGHT PRODUCTIONS

Katy Cockrel (left) and Nia Batts (right) co-founded Detroit Blows because the city lacked a specialty blowdry bar hair salon that’s common in bigger cities and the affluent suburbs.

Recapturing service industry sales one hair ‘blowout’ at a time

Lifelong Detroiters Nia Batts and Katy Cockrel are unlikely owners of a downtown hair-drying and styling salon. They both work in corporate marketing, social media and communications. CHAD Neither one of them is a LIVENGOOD hair stylist. But as childhood friends who reconnected on a professional level, Batts would travel from New York City to Detroit for meetings with Cockrel and their clients. Each trip to Detroit for business required Batts to trek out to a full-service hair salon in Royal Oak or Birmingham to get what’s known as a “blowout” — a wash, blow-dry and styling. And each time, they talked about how Detroit needed a blow-dry bar, which are common in big cities. “We had that conversation enough that we decided to do it ourselves and open our version of this business, right here at home,” Cockrel said in an interview for the Crain’s “Detroit Rising” podcast. In October, Batts and Cockrel opened Detroit Blows in the ground floor retail space of the Z Garage at 1232 Library St. — a stone’s throw from the construction sites of the Shinola hotel and what will be Detroit’s tallest skyscraper at the base of the former Hudson's department store. Their business model aims to fill one of the many voids Detroit still has in the service industry that causes both Detroiters and suburban residents who work in the city to head to the suburbs for services every day. (The Detroit Economic Growth Corp. commissioned a study last year that found $2.6 billion in retail and service sales bleeds into the suburbs every year.) “It’s about recapturing those dollars as much as it’s about making sure that young employees, that citizens of Detroit, feel like they have ser-

‘Detroit Rising’

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

vice-based businesses that are allowing them to move and really sort of integrate and remain in the community,” said Batts, who is CEO of Detroit Blows LLC. The two millennial entrepreneurs run the 15-employee business while maintaining other jobs and living in the city. Cockrel is a vice president in the Detroit office of Finn Partners Inc., a global public relations agency. Batts is founder and CEO of Telescope Collective LLC, a Detroit-based marketing and project management company. Batts and Cockrel have created a philanthropic arm of the business called Detroit Grows. They are donating 25 percent of all net sales plus $1 from every $35-40 hair blowout to Detroit Grows, which will then make microgrants to other female entrepreneurs in the city. The microgrants, for example, could help an at-home baker in Brightmoor purchase a commercial oven to increase production and sales of their baked good, Cockrel said. “Small-scale things like that will help extend the reinvestment out of the central business district and into the neighborhoods,” she said. The “Detroit Rising” podcast is a weekly feature profiling people and issues in business, nonprofits and government in Detroit. If you’ve got a story idea to feature on the podcast, email me at clivengood@crain.com or call me at (313) 446-1654.

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OPINION COMMENTARY

The many gifts of Stephen Luigi Piazza

hortly after Stephen Luigi Piazza got sick, he asked me to come to his home and bring 50 books. Actually, he requested 50 copies of a single book — the one I wrote about my son with autism. “Sign them. Leave them,” he said. “I’m giving them away to friends.” Sharing my book with his friends was an amazing act of grace. There is no higher compliment. Stephen had a ton of friends: Everybody in Detroit seemed to know him, and anybody who knew him loved him. At the time, I had just moved from Washington, and thought to myStephen Luigi self: Stephen LuiPiazza: Informal gi Piazza is introambassador for ducing me to Detroit. Detroit, one influential reader at a time. God bless him. That memory brought tears to my eyes at Stephen’s funeral. He died Feb. 26 in Houston after a fierce fight with cancer. One of Dan Gilbert’s top lieutenants, Stephen was the senior director of mortgage banking with Quicken Loans. He was an informal ambassador for Detroit, welcoming out-of-town reporters and VIPs with unbridled enthusiasm (“This city is epic!”), a new pair of Nike shoes (he wore a different pair every day) and

RON FOURNIER Publisher and Editor

personal tours of his beloved city. A few years ago, I was sent to Detroit to do a story on my hometown. Stephen met me outside a downtown bar and took me on a walking tour of Gilbert’s properties. As we rounded a corner onto Woodward, I heard somebody shout, “Hey Rocky!” That is my childhood nickname, known only to my family and oldest friends. I turned around and saw my sister, Raquel, who was walking to her office at the Archdiocese of Detroit. She didn’t know I was in town. I didn’t know she worked downtown. It was a coincidence. Or was it? In the years since, I learned that Stephen had a special gift for connecting people. He knew I was homesick for Detroit. When I hugged Raquel, I heard Stephen laugh — “heh-hehheh” in that childish-devilish way his friends will never forget — and I now suspect he knew the chance encounter would push me home for good. I wanted to bump into family more often. On another reporting trip, Ste-

RON FOURNIER/CRAIN’S DETROIT BUSINESS

Not only did Stephen Luigi Piazza plan his own funeral, he orchestrated his own wake at a downtown theater and authored the marquee-worthy theme.

phen asked me to visit the Downtown Boxing Gym near where I grew up on the east side. I didn’t want to go. I had a plane to catch. “Don’t be such a putz,” he chuckled — “hehheh-heh.” So I went and fell instant-

ly in love with coach Khali Sweeney and his partner Jessica Hauser. The column I wrote for The Atlantic made a direct appeal for donations to the books-before-boxing program. I had never done that before,

overtly advocate for a news source. Stephen had a way of getting the best out of people. “It is truly Stephen Luigi Piazza’s world, and we’re all living in it — and we’re better for it,” Gilbert said last week at Stephen’s funeral. “If you’ve got to do it with one guy, he’s it.” One friend after another took their turn at the church microphone honoring Stephen. They cried a lot and laughed more. I sat in the back row, alone with my thoughts, when Ryan Houlihan said something about Stephen that gave me chills. “If he found a book he loved,” Houlihan said, “he bought 50 books and gave one to everyone he loved.” Then the Rev. John Ball of Lake Orion United Methodist Church eulogized Stephen. The father of a son with autism, Ball recalled a “defining moment” in his life, when Stephen gave him a book. The book I wrote about my son. “I want you to read every word,” Stephen told Ball. I just sent an email to Ball suggesting we get together to toast our friend and chat about our boys. We’ve got plans to meet this week. God bless him. Stephen connected two fathers, two strangers, while he was still living in this world, and even from a place far beyond ours, he still offers gifts. 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.

It is time for a change I

t was well over a quarter of a century ago when Detroit and its automotive retailers saw fit to change their sleepy car show into a significant international motor show. In the years since, the show has endured, and the milestones have been many. Over the years the North American International Auto Show has attracted tens of thousands of journalists and auto executives to our community, and the economic impact has been spectacular and immeasurable. But times have changed, just like Detroit, and it would appear that our international motor show needs a shot in the arm to continue to stay lively and relevant. One of the best ideas is to switch the date to October. Have the normal show in January and from then on, it will be in the fall, a time of year that should delight visitors who have never been excited about the brutal days of January. My personal hope is that this happens in time for a fall 2019 show. We have been lucky enough to have to deal with only a couple of blizzards, but it has always been a sore spot. Certainly the visiting journalists would cheer about the change. Other changes would go along

KEITH CRAIN Editor-in-chief

with this shift. Our company’s own Automotive News World Congress, a tradition in Detroit, would change its dates as well in order to continue to be a part of this important event. With pleasant weather, many of the manufacturers will be able to display all sorts of new technology in an outdoor setting without concern for snow or sleet. Plenty of outdoor venues would be available for the automakers to demonstrate their latest vehicles. Now they will be able to show off their latest and greatest amid Michigan’s often-glorious fall weather. We would have one last show next January, and then all eyes would be waiting for the exciting debut of the new, improved show. It will be the first, and as always, the best.

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

Who needs a Marshall plan if third-graders can’t read?

hile Gov. Rick Snyder is focused on a “Marshall Plan” for talent development centered on high school students, the state needs an emergency plan for third-grade reading. That’s the conclusion anyone could draw from a new report published Tuesday by the educational advocacy group The Education Trust-Midwest that offers yet more alarming data on third-grade reading proficiency in Michigan. In comparing Michigan with 10 other states that are using the same test, Education Trust-Midwest’s analysis shows Michigan ranked last with just 44 percent of all third-graders being proficient in reading in the 2016-2017 school year — down from 50 percent proficient in 2014-2015. These abysmal test scores are an existential crisis for Michigan’s economic future that affects everything from college readiness and longterm talent attraction to school ratings and property values. Like the state’s crumbling roads, it’s a grim reality whose consequences are far-reaching. The six percentage point drop in proficiency was the largest among the group of 11 states that participate in a testing consortium that, for the first time, lets us make an apples-to-apples comparison to other states, including California and Washington. “The results are more devastating for students of color and low-income students: 29 percent of low-income students were proficient in

CHAD LIVENGOOD clivengood@crain.com

third-grade reading and only about one-third of Latino and a fifth of African American students were proficient in third-grade reading,” Education Trust-Midwest’s report says. In Detroit, just 9 percent of third-graders from low-income families in Detroit Public Schools Community District tested proficient in reading last year. Among low-income third-graders attending charter schools in Detroit, the reading proficiency level was 20 percent last year, according to Education Trust-Midwest. And Michigan’s downward decline in elementary school reading proficiency isn’t a new trend. Between 2003 and 2015, Michigan was just one of five states that saw fourth-grade reading scores decline on the National Assessment of Educational Progress tests. While Snyder is pursuing a well-meaning proposal he’s been developing for years to shake up the high school-to-college pipeline to meet skill-specific job demands, these test scores represent a real cancer in our elementary schools

GETTY IMAGES/ISTOCKPHOTO

Michigan ranked last with just 44 percent of all third-graders being proficient in reading in the 2016-2017 school year .

that’s working its way into secondary schools. And these declining reading test scores came as the state began spending $77 million over the 2016, 2017 and current fiscal years on programs — such as reading coaches and more instruction time — aimed at ensuring third-graders are reading at their grade level. That will become critically important in the 2019-2020 school year when a new state law kicks in that could lead to large numbers of third-graders being held back a year if they’re not deemed proficient in reading. Royal Oak-based Education Trust-Midwest contends the current literacy intervention programs ar-

Tell us about your business’ reinvention

to in-demand skills seems in conflict with the fact more and more of them are not prepared for secondary education, let alone college. How will Michigan attract new businesses and talented workers with bottom-of-the-barrel test scores that are a major factor in where people buy homes for their families? This is a question Snyder and the individuals who want to succeed him in the governor’s office next year have not really ever addressed head on. The reality is, if you can’t fix the basics like early reading proficiency in education, you can’t fix the rest of it.

M&A Experience

It’s been a decade since the Great Recession. And Crain’s Detroit Business is looking for stories not just of survival, but of reinvention. We want to hear about companies or nonprofits that — whether out of necessity, opportunity, ingenuity or all of the above — fundamentally transformed themselves during the Great Recession and now, 10 years later, are thriving because of it. Maybe you changed products. Or found a wildly different group of customers. Or did a refinancing job that felt like a high-wire act. Or — maybe — the recession shattered your company, but you’ve built a whole new one out of the ashes. We'll consider your submissions for a special section to be published in our April 16 issue. This isn’t a contest. We’re looking for stories with drama and lessons that can be learned by all leaders. Submit your story ideas at crainsdetroit.com/ideas by March 15. Contact abragg@crain.com or (313) 446-1646 with questions.

We want to hear about companies or nonprofits that transformed themselves during the Great Recession and now, 10 years later, are thriving because of it.

en’t working and need to be overhauled before the third-grade reading law goes into effect. Their report contains a series of recommendations on what Michigan can learn from leading states that we desire to be among. “I don’t think anyone said three years ago, ‘Let's allocate $77 million for lower outcomes,’” said Brian Gutman, director of external affairs for Education Trust-Midwest. “The research suggests that what we’re doing right now isn’t having the intended effect. ... We need a wake-up call.” Snyder’s desire to spend $100 million over the next five years creating new programs and certificates for high school students to be exposed

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CRAIN’S MICHIGAN BUSINESS: BATTLE CREEK

F By

thend

Downtown Battle Creek CITY OF BATTLE CREEK

Battle Creek makes more than cereal By Tom Henderson thenderson@crain.com

“The Cereal City” is Battle Creek’s motto. But as important as cereal — and the Kellogg Co. and Post Foods, both founded in Battle Creek at the turn of the 20th century — has been to the city, it is an ongoing irritation to Robert Corder, vice president of business attraction for Battle Creek Unlimited, a nonprofit economic development organization. “The problem with Battle Creek is perception. For so long we’ve been known as Cereal City, but there is so much more to the city than that,” Corder said. “Post and Kellogg have been cutting back employment for years. Today, the main story is the Fort Custer Industrial Park, but nobody thinks we’re anything but cereal.” That sprawling 3,000-acre industrial park is home to more than 80 companies and 13,000 employees. Among those companies are 18 from Japan and firms from Canada, Denmark, Germany and Austria. On Wednesday, a deal between Germany-based BASF Group, the worldwide chemical giant, and Tokyo-based Toda Kogyo Corp. to form a joint venture, BASF Toda America LLC, officially closed. The deal will allow Toda Kogyo, which employs 36 at its manufacturing plant in the industrial park, to add more production lines and grow its workforce in the next two to three years, said director of human resources Sarah Mercer. It’s just the latest feather in Fort Custer’s cap. And there are more to come: the park has 1,000 acres yet to be developed and recently cleared three 20-acre parcels that were heavily wooded for the next expansion; one lot has been sold and construction

TOM HENDERSON/CRAIN’S DETROIT BUSINESS

In December 2017, BASF Group announced its joint venture with Toda Kogyo, BASF Toda America LLC,. The joint venture involves Toda Kogyo’s two operations in the U.S., in Battle Creek and Elyria, Ohio.

Need to know

count of 52,347, create this mighty manufacturing campus? The story starts back in the cereal days.

JJBattle Creek has courted Japanese firms since ’70s with tax incentives, cultural comforts

Former Army camp

JJFort Custer Industrial Park home to 80 companies and 13,000 employees

JJLatest company is BASF Group, Todo

Kogyo Corp. joint venture

has begun on an aluminum anodizing plant. And the Battle Creek Unlimited board recently approved plans for a 100-acre section of undeveloped land in the northwest corner of the park to be set aside as a campus devoted to companies involved in the growth, testing, packaging and distribution of medical marijuana. How did this small city in the Lower Peninsula, midway between Detroit and Chicago, with a 2010 census

It was only about a decade after the founding of the Kellogg Co. as the Battle Creek Toasted Corn Flake Co. in 1906 by Will Keith Kellogg, an outgrowth of his work with his brother, John Harvey, at the Battle Creek Sanitarium, where they followed the dietary practices of the Seventh-day Adventist Church. At the site of what is now the industrial park, on the western outskirts of Battle Creek, Quaker and Spiritualist sects founded the town of Harmonia in 1855. Over its brief history, the town had a private academy, a public school and more than 20 homes, in-

cluding that of antislavery activist Sojourner Truth. During World War I, Battle Creek offered the land to the federal government, and on July 1, 1917, after vacating more than 100 farms, the U.S. Army opened Camp Custer, later to be named Fort Custer, on 8,878 acres. About 2,000 buildings were built in six months, at what was then the astronomical cost of about $9 million. The camp housed up to 60,000 troops during the war. In 1964, Secretary of Defense Robert McNamara ordered the closing of the fort. The official closing ceremony took place in 1968. Today, there is an Air National Guard base on the site and a large National Guard armory. Soon after the fort closed, 2,000 acres were sold to the city of Battle Creek. Battle Creek Unlimited was formed in 1972 under contract with the city to market an industrial park and manage the demolition of Army buildings and the clearing of vast swaths of forest. That year, Archway Cookies became the first tenant. In 1976, the park was designated as a customs port; in 1978 it was designated a foreign-trade zone and in 1980, Kellogg opened a $10 million R&D facility there. That same year, state Public Act 450 created the Battle Creek Tax Increment Financing Authority as the first industrial TIFA in Michigan. The TIFA officially owns the industrial park and Battle Creek Unlimited manages it.

Courting Japan In the mid-1970s, Battle Creek Un-

In this package JJBattle Creek makes more than cereal. This page JJFormer Kellogg executive has plans to grow food businesses. Page 9 JJTo kickstart a comeback, couple builds on Battle Creek’s past. Page 10 JJWestern Michigan on the wing. Page 10

limited officials began making trade missions to Japan. The Japanese were ramping up U.S. manufacturing, and they were going to need U.S. facilities. If you were coming all the way to Michigan to be close to the Big Three, Battle Creek wasn’t all that far away, relatively, from Southeast Michigan. And BC Unlimited had a new industrial park and tax credits and abatements to offer. “There’s no secret sauce to economic development,” said Corder. “You go and build relationships.” In 1978, Hi-Lex Corp. of Japan created a new subsidiary in the park, HiLex America Inc., a maker of mechanical control cables for the auto industry. It is still in the park and now employs 322. In 1984, Denso Corp., headquartered in the Kariya, Aichi prefecture in Japan, created Denso Manufacturing Michigan Inc. as the lead North American facility for the manufacture of automotive air conditioning and engine cooling components and systems. DMMI has grown over the years to be the largest manufacturer in the Fort Custer Industrial Park and the largest employer in and around Battle Creek. According to BC Unlimited, its campus now includes 2,817 employees in 1.4 million square feet of manufacturing, warehouse and administrative space in six buildings on more than 100 acres of land. SEE PARK, PAGE 11

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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 // M A R C H 1 2 , 2 0 1 8

Former Kellogg exec has plans to grow food businesses By Tom Henderson thenderson@crain.com

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Snackwerks of Michigan LLC, a startup founded by Jeff Grogg, a veteran of the food industry and a former Kellogg executive, closed Friday on a funding round of $2 million, half of that in equity capital and the other half a variety of loans, including $500,000 from Battle Creek Unlimited, an economic development nonprofit. Snackwerks is a contract manufacturer that began production on the north side of Battle Creek in November 2016. The company makes a variety of products for food manufacturers around the country. Its founder, Jeff Grogg, is a veteran of the food industry and a former Kellogg executive who’s using his experience and expertise to grow early stage food businesses nationwide. In 2009, Grogg founded another company in Battle Creek, JPG Resources LLC, a consulting company with a national practice that advises early stage food companies on business development and marketing and helps them find suppliers and distributors. Grogg has grander plans for venture capital than the funds he raised for Snackwerks. Last week, he co-hosted an event for some 200 venture capital investors at the huge Natural Products Expo West in Anaheim, which drew 80,000 food-industrial professionals to a variety of events, panel discussions and 3,100 exhibits. That formally kicked off fundraising for what Grogg hopes will be a $20 million to $30 million fund that invests in early stage food companies. The fund, called the RCV Frontline Fund, will be co-based out of Battle Creek and New York City. The initials come from the name of a venture-capital firm in New York, Reynolds & Company Venture Partners LLC. Reynolds & Co. will be the fiduciary in investments, with Grogg a partner helping to source deals and do due diligence. JPG employs 47, about half in Battle Creek and the rest scattered around the country. Grogg says it will have revenue of about $4 million this year and is currently looking for a larger facility in Battle Creek. “JPG is just down the street, but we’re busting at the seams. It’s a fun business that’s really growing,” said Grogg from the Snackwerks facility, a former supermarket he bought in March 2016. He said JPG will employ more than 50 by year’s end. One of Grogg’s recent hires is Eric Stief, a brand name in Michigan entrepreneurial circles who joined JPG’s business development team in January 2017. Prior to joining JPG, Stief was director of commercialization for the Beaumont Health System from 2015-2017; senior vice president at the AutoHarvest Foundation in TechTown from 2010-2014; and director of venture development at Wayne State University from 2009-2010. Grogg said JPG has nondisclosure agreements with most of his companies, but one important customer he

Jeff Grogg founded Snackwerks, a contract manufacturer that began production on the north side of Battle Creek, in 2016. TOM HENDERSON/CRAIN’S DETROIT BUSINESS

Need to know

JJFood industry veteran Jeff Grogg

launching a venture capital fund to invest in early-stage food businesses JJHis startup Snackwerks just closed on

a $2 million funding round

JJBattle Creek-based JPG Consulting

helps food companies across the country with business development

can name is Health Warrior of Virginia, which launched in 2010 and makes a variety of food bars with chia seeds as a prominent ingredient. JPG helps with product development, sourcing and sales. What is strategically important for JPG is that Health Warrior is funded by VMG Partners, a San Francisco-based venture capital firm that raised a $550 million fund last year to invest in emerging food and beverage companies, others of whom are likely future customers. Other customers include Junkless Foods of Kalamazoo and This Bar Saves Lives, a health food bar company based in Venice, Calif., whose products have been picked up nationwide by Starbucks. Grogg is on the company’s board of directors. Snackwerks now employs 20 and will use the new funding to purchase new baking equipment and increase production. Grogg said he expects to grow headcount “to well over 35 by the end of the year.”

He said the company had revenue of about $700,000 last year and he expects to hit $2.3 million this year.

A fruitful internship Grogg was an intern at Kellogg in 1991 and joined the food giant in product development after graduation in 1992. In 2000, after Kellogg bought San Diego-based Kashi Co., Grogg was named as its head of research and development. Grogg left Kellogg in 2009, having helped grow Kashi from $24 million in annual sales to $750 million, to found JPG Resources as well as co-founding a second company, Portland, Ore.based Bridgetown Natural Foods LLC, a kosher- and organic-certified contract manufacturer that makes a variety of baked goods sold under other companies’ brands. Grogg co-founded Bridgetown with Mark Haas, who had been director of operations at Kashi. “It was crazy starting two companies at the same time, but I had grown to be more of a business person than a food person,” he says. “By 2012 we had grown Bridgetown to 120,000 square feet and 140 employees. I wanted to spend more time at JPG and more time in Battle Creek, so I sold my interest.” Grogg said that part of the business plan for Snackwerks is employing neighborhood residents, many of

whom are minorities, and hiring former convicts. He is also looking to hire employees with a limited knowledge of English. As a result of Snackwerks’ hiring practices, joining Battle Creek Unlimited and Chemical Bank in the $1 million loan portion of the company’s $2 million funding round was a loan from the Lansing-based Opportunity Resource Fund, a nonprofit targeting opportunities in deprived neighborhoods. “This ZIP code is in the bottom 60 out of 900 in Michigan,” said Grogg, referring to the 49037 ZIP code. “There hasn’t been any economic development on this side of town in years. If you didn’t have a car, it was very hard to get to the jobs in the industrial zone on the other side of town. With us here, a lot of our workers walk to work.” “Jeff has a real strong social-justice focus. He could have come into our industrial park, and he looked into it, but he really wanted to employ people in that neighborhood,” said Robert Corder, vice president of business attraction at Battle Creek Unlimited. “It’s nice, too, to see him repurposing old buildings. He really knows what he is doing.” The Chicago-based Sustainable Local Food Investment Group, a network of independent investors who share the mission of using private investment to re-establish sustainable food systems in urban regions, led the $1

million of equity capital invested in Snackwerk’s funding round. Grogg said the company also got a Michigan Department of Agriculture and Rural Development grant of $125,000 in February. Grogg’s official title at Snackwerks is managing director. Joining him in management is Pete Borozan, the operations lead, who has more than 30 years in the industry and was previously a vice president at Kraft Pizza and Hot Pockets. Grogg said his industry contacts have paved the way for the startup to land contracts with established food companies right out of the gate. “It’s a lot easier this time around than when we did Bridgetown nine years ago,” he said. He said that while Snackwerks targets established firms, one of his customers is a startup, Birmingham-based Rosted Brand snacks, which are made from roasted lentils. “We wouldn’t normally take on a startup, but we want to support Michigan companies,” said Grogg. “The founder, James Atto, is very smart and he knows what he is doing.” Unlike Snackwerks, Grogg’s new VC fund will target early-stage food companies. “We’re looking to write checks for between $250,000 and $1 million,” said Grogg. “This is new and exciting for us. We have such a window into new companies that need to attract early stage money.”

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

CRAIN’S MICHIGAN BUSINESS: BATTLE CREEK

To kickstart a comeback, couple builds on Battle Creek’s past By Tom Henderson thenderson@crain.com

Restore (269) LLC is a Battle Creek startup that hopes to save downtown buildings from the wrecking ball and replicate on a smaller scale the preservation of old office and residential buildings in downtown Detroit in recent years. The company was founded by Cody and Caitlynn Newman, married former high school sweethearts at Battle Creek Lakeview who were brought back to the city by personal tragedy. Caitlynn’s uncle, Tim Shiump, who she described as her father figure, died in 2015 and left her his house. And Cody’s father, Todd, was diagnosed with colon cancer and died at age 46 in November 2016 after they returned to town from Ann Arbor that May to be with him. They want to use those tragedies to serve as jumping off points for their plans for urban preservation. Cody is a licensed architect and

Who believes in Michigan?

Need to know

JJCody and Caitlynn Newman have

rehabbed the Ratti Building in downtown Battle Creek JJJust signed their first tenant for ground floor commercial space JJPursuing an RFP to turn a former factory into a craft brewery and event space

Caitlynn is a social worker. Both got their master’s degrees from the University of Michigan just before returning to Battle Creek. He works for Eckert Wordell in Kalamazoo and Architecture + Design in Battle Creek. She is a social worker in the critical-care unit at Bronson Battle Creek. Though her uncle had left her his house, they were used to living in a downtown environment in Ann Arbor and had spent a lot of time in down-

town Detroit. “We wanted a cool place to live and saw a listing for this building,” said Caitlynn. “This building” is an old two-story commercial building on West Michigan Avenue in downtown Battle Creek. The ground floor housed the A. Ratti & Sons men’s clothing store. The upstairs was a small hotel. The owners changed their mind about selling, but rented the Newmans a spacious upstairs apartment that had been remodeled out of a big chunk of the former hotel. They had been paying $1,000 a month for rent in Ann Arbor for what they describe as “a one-bedroom dump.” In Battle Creek, what they got for $1,300 was eye-popping, with hardwood floors, two bedrooms, 1,500 square feet of space and an outdoor deck. That price, they thought, would one day seem like a steal. They had seen other downtowns come back. They

Who wants a brighter future for our children?

Cod Res

Who wants to grow our business?

Who wants to make more money?

Western Michigan on the wing By Tom Henderson thenderson@crain.com

There’s more than meets the eye to this simple sentence: Duncan Aviation is a company that repairs and upgrades planes at the W.K. Kellogg Airport in Battle Creek. Before you get to the Duncan facility there, you might picture a small operation at a not-quite-middle-of-nowhere community airport. But when you arrive, you see a huge building, 375,000 square feet in all, which houses three separate maintenance bays and three paint bays under one roof. Each mainteAndy Richards: nance bay is Runs the Battle crammed wing to Creek facility. wing and nose to tail with airplanes undergoing repair, upgrades, refurbishing or the routine but costly and expensive recertification process mandated by manufacturers and the Federal Aviation Administration as various planes hit certain timetables

Need to know

J Duncan Aviation came to Battle Creek in 1980 with purchase of Kal-Aero Inc. J Employs 630 and is the 15th-largest employer in Battle Creek J Company does maintenance, repair and overhaul for planes

of operation. At any given time, there are 35-40 planes in various stages of work in the three maintenance bays, undergoing everything from simple tasks that take a day to finish to the complete gutting and refurbishment of big jets that takes six months. The planes include what are called ultralarge aircraft — Gulfstreams, Bombardiers and Falcons that are 100 feet in length, with wingspans to match — as well as small 30-footers and everything in between. “We’re targeting more ultralarge planes, now, than we ever have in the past,” said Andy Richards, vice president of completions and modifications. Duncan Aviation is the largest privately owned company in the world that does what is called MRO in the aviation industry, for maintenance,

repair and overhaul. It has 39 facilities across the county, including one in Kalamazoo. The largest is its headquarters operation in Lincoln, Neb. By far the second-largest is the Battle Creek operation, which employs 630, making it the 15th largest employer in and around Battle Creek. Duncan Aviation came to Battle Creek in 1998 when it purchased Kal-Aero Inc., a company that also specialized in avionics installation, repair and overhaul of private aircraft. Duncan needed an operation closer to East Coast clients and customers in Detroit, Chicago and other Midwest cities, and Kal-Aero was an established company with a good reputation in the industry. When Duncan began in 1956 as a distributor of Beechcraft Aircraft, being centrally located was irrelevant. It branched out into service and maintenance in 1963 and opened its first satellite facility in 1985. It bought its first MRO company in 1992 and made its second acquisition when it bought Kal-Aero. At the time, Kal-Aero employed 325, one of them Richards, who had been at Kal-Aero for nine months. He had recently earned his master of fine

arts degree from the University of Minnesota and took a job at Kal-Aero handcarving cabinets for luxurious private jets. He soon discovered an affinity for business and management. He has since worked his way up. Ten years ago, he was named program manager for the Falcon 7X airplane account Duncan had secured from Paris-based Dassault Aviation. Dassault built its new planes in France to the point they could fly, then flew them to

Battle Creek for all the finishing work needed before delivery to U.S. customers, a project that lasted for six years. Now, Richards runs the Battle Creek facility and also serves on Duncan’s 14-member management team, based in Lincoln. Duncan said nondisclosure agreements prohibit him from naming customers but said they include highnet-worth individuals and the fleets of many Fortune 500 companies.

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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 // M A R C H 1 2 , 2 0 1 8

Cody and Caitlynn Newman founded Restore (269) LLC in Battle Creek. TOM HENDERSON/ CRAIN’S DETROIT BUSINESS

were confident Battle Creek’s would, too, and they wanted to be part of it. “Here, we can make a difference. We knew we could make an impact,” she said. “We pestered the owners for a year, and finally they decided to sell,” said Cody. Battle Creek Unlimited, a nonprofit economic development organization, owned three-quarters of the building, and a private party owned the remaining quarter. Last year, after buying the building, the Newmans formed Restore (269) LLC, the numerals representing the city’s area code, as a vehicle for a company focusing on the redevelopment of downtown buildings. “We were coming from Ann Arbor, where there was so much culture and nightlife,” said Caitlynn. “Our complaint with Battle Creek when we came here was there was nothing to do downtown. No culture. Young people would leave and never come back.” “Battle Creek has great bones, great architecture. It just needs people to turn it around,” said Cody. “Battle Creek now is like downtown Detroit in 2011. In 2011, you thought, ‘Why

would anyone buy there.’ Now, who can afford to buy there? We’re taking a page out of Detroit’s play book.” Each floor in the Ratti Building has 3,000 square feet of space. They did an extensive rehab on the ground floor, which had been empty for four years, and finished the mostly already rehabbed front apartment upstairs, turning it into a two-bedroom rental unit they list on Airbnb. They recently signed a tenant for the downstairs, who will move her family therapy practice there this spring.

Craft brewery plans Last Friday marked a big day in the Newmans’ plans for their next project. In December, Battle Creek Unlimited put out requests for proposals for developing three abandoned downtown buildings the organization was given by the Battle Creek land bank to get back on the tax rolls. BC Unlimited didn’t set sales prices. For the right proposal, it could even give a building away for free. Friday was the deadline for submissions. The Newmans put in an RFP for a three-story building around the corner from them on Carlyle Street. They want

to turn the former factory, which has 20,000 square feet of space, into a brewery on the first floor, a tech incubator on the second floor and a multipurpose event space on the third floor. Their proposal dovetails with a fourth RFP Battle Creek Unlimited issued, offering $200,000 in funding to someone willing to open a craft brewery downtown. Arcadia Brewing Co. used to be a prominent member of the downtown business community. The name still adorns the building just to the east of the Newmans’. Last year, Arcadia built a new brewery in Kalamazoo and left Battle Creek. “If you’re trying to attract millennials, you need that signature brewery,” said Robert Corder, vice president of business attraction for BC Unlimited, before the deadline for RFPs. “A lot of people have come to town to scope out downtown as a result of our asking for RFPs. We were surprised at the response we got,” said Corder. “We’re looking for a quick turnaround on the RFPs. We hope to go to the board quickly, vet them and in early April announce the winners.” As for the Newmans? “Their bid was very strong,” he said. “Cody and

If you want a stronger future for Michigan,

Who wants more job opportunities?

If you want Michigan’s economy to grow and thrive, we need to compete with other states and win. We need to create an environment that attracts new business, and talent that has the education and training to do the jobs of tomorrow.

Caitlynn have great energy. They are the next generation. They see what Battle Creek can be. They’re not hung up on what it used to be.” If the Newmans get control of the Carlyle building and win the RFP for the brewery, they will find a craft brewer to be the tenant. They will find someone to manage the incubator space. Caitlynn will manage the event space. The Newmans say they have much of their financing in place and are in the process, if their RFP for the building is successful, of securing funding participation from the Michigan Economic Development Corp. There is a new roof on the building, but the Newmans will need to replace the electrical, mechanical and plumbing systems. “This is very bullish, but we’d like to have the event space open in December. The rest of the building could be early 2019,” said Cody. When asked about what’s next for BC Unlimited in pushing revitalization, Corder said: “What do we do next? There are a lot of buildings downtown.” Which is music to the Newmans’ ears.

raise your hand.

A plan has been developed to accomplish these goals: the Plan for a Stronger Michigan. Raise your hand to support the Plan at StrongerMichigan.com.

An Initiative of Business Leaders for Michigan.

DUNCAN AVIATION

Duncan Aviation has 39 facilities across the county. The largest is its headquarters operation in Lincoln, Neb. By far the second-largest is the Battle Creek operation, which employs 630, making it the 15th largest employer in and around Battle Creek.

An unintended benefit of Duncan buying a Battle Creek facility is that Western Michigan University has one of the leading aviation programs in the country, with four-year programs training both pilots and mechanics. WMU has its own hangar at the Kellogg Airport. Duncan works with both Purdue University and WMU in program coordination and hires the schools’ graduates. Jonathan Hyde is one of the WMU alumni at Duncan. “I’ve been here six years,” he said, putting down a tool for a minute as he stood under an airplane wing. “I’m the avionics installation team leader. My team focuses on Cessnas, Gulfstreams and Hawkers.” Duncan also hires graduates of two-year community-college programs in airframe and power-plant maintenance. The company works on a four-shift, 24/7 work schedule. Some employees work four 10-hour days, some work three 12s. “We need to have this place running constantly. We compete as much on limiting airplane downtime as we do on cost. We need to get them back in the air,” said Richards. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

PARK FROM PAGE 8

Kellogg is the No. 2 employer with a head count of 2,279. DMMI, despite the “Michigan” in its name, also owns a 103,000-squarefoot plant in Montgomery, Ala., and a 36,000 square-foot facility in Urbandale, Iowa. In 2014 and 2015, the company invested $53.6 million on new manufacturing lines and product-testing labs, and in 2016, it announced plans to invest $37 million Robert Corder: in more new maRecruited to BC chinery and Unlimited. equipment. The newest Japanese arrival in the industrial park was Sakae Seiko Co. Ltd., a metal-working company that supplies the auto industry. It created a subsidiary in 2016 called Sakae Seiko International America Inc. to serve as a sales office to serve North America. Then, in December 2017, BASF Group announced its joint venture with Toda Kogyo. A new legal entity, BASF Toda America LLC, began operating under that name on Friday.

BASF is the majority owner. The joint venture involves Toda Kogyo’s two operations in the U.S., in Battle Creek and Elyria, Ohio, which had previously operated under the name Toda America Inc. They produce what are called cathode active materials, raw chemical compounds that are sold to battery makers for the manufacture of cathodes for lithium-ion batteries. The batteries power electric tools, computers, wind power projects, smart grids and electric cars. BASF employs about 114,000 worldwide. Toda Kogya employs about 1,200 employees as of fiscal 2016. In April 2010, Toda America Inc. began construction on its 80,000-square-foot manufacturing plant on an 18-acre brownfield site at the eastern end of the industrial park. Half of the $70 million project was financed with a grant from the U.S. Department of Energy as part of a program for energy diversification. Helping drive the creation of a North American subsidiary was the awarding of a license from the Argonne National Laboratory to make cathode materials, with the plant, which opened in 2012, able to produce 3,600 metric tons a year. The Michigan Economic Growth Alliance approved a 12-year, high-

tech employment tax credit for Toda America Inc., with projections that it would eventually employ 57 people and pay an average weekly wage of $893. The city of Battle Creek provided a $5.5 million, 12-year tax abatement for infrastructure and site development. Corder said part of the creation of a comfortable culture for Japanese companies in Battle Creek was BC Unlimited’s support in the 1980s for the Japanese Saturday school, where for more than 30 years kids have been able to study the Japanese language and culture. They also supported a club for Japanese business executives. Corder himself is proof of BC Unlimited’s continued focus on the Far East. He was recruited to the organization a year ago after spending 10 years in Chicago working for the Japanese External Trade Organization, which facilitates the expansion of U.S. companies into Japan and Japanese companies here. “In 1975, Battle Creek Unlimited was playing the long game, but it has really paid off because they did it right. Japan was not a big foreign investor, then, but BC Unlimited was ahead of its time in recognizing what would become a trend,” said Corder. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson

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

CRAIN'S LIST: LARGEST MICHIGAN BUSINESS INSURANCE AGENCIES AND COMPANIES Ranked by 2017 revenue Company Address Rank Phone; website

Top executive(s)

Revenue ($000,000) 2017

Premium Revenue volume ($000,000) Percent ($000,000) 2016 change 2017

Employees Jan.2018 Michigan/ Total U.S.

Worldwide employees Jan.2018

Insurance category

H.W. Kaufman Group Inc./Burns & Wilcox Ltd. 30833 Northwestern Highway, Farmington Hills 48334 (248) 932-9000; www.hwkaufman.com

Alan Jay Kaufman chairman, president and CEO

$2,100.0

$2,050.0

2.4%

$2,100.0

244 1,732

2,019

Insurance Company

Auto-Owners Insurance Co. Inc. 6101 Anacapri Blvd., Lansing 48917 (517) 323-1200; www.auto-owners.com

Jeffrey Tagsold B chairman and CEO

1,782.2

1,735.6

2.7

7,296.6

2,697 4,908

4,908

Insurance Company

Amerisure Mutual Insurance Co. 26777 Halsted Road, Farmington Hills 48331 (248) 615-9000; www.amerisure.com

Gregory Crabb president and CEO

838.9

835.9

0.4

838.9

357 737

737

Insurance Company

AmeriTrust Group Inc. (formerly Meadowbrook Inc.) C 26255 American Drive, Southfield 48034-6112 (248) 358-1100; www.ameritrustgroup.com

Kenn Allen president and CEO

715.5

707.1

1.2

672.2

323 799

799

Insurance Agency, Insurance Company

Marsh & McLennan Companies Inc. (MMC) One Towne Square, Suite 1100, Southfield 48076 (248) 945-5600; www.mmc.com

Nina Maggart managing director & head of office

126.0 D

122.0 D

3.3

0.0

0 0

Insurance Company

62.9

3.0

383.2

539 7,996

7,996

Insurance Agency

58.0

56.0

3.6

200 NA

26,783

Insurance Agency

Gallagher E 30150 Telegraph Road, Suite 408, Bingham Farms 48025 (248) 203-0626; www.ajg.com

38.8

36.8

5.3

1,596.7

144 144

144

Marsh & McLennan Agency LLC - Michigan 3331 W. Big Beaver Road, Suite 200, Troy 48084 (248) 822-8000 and (734) 525-2463; www.mma-mi.com

Insurance Agency, Insurance Company

LSG Insurance Partners 2600 S. Telegraph Road, Suite 100, Bloomfield Hills 48302 (248) 332-3100; www.lsgip.com

Todd Piersol, executive vice president; Angela Garner, president; Paul Glantz and Doug Shepson, administration Bryan Hirn, area president, benefits & HR consulting; Ryan Isaacs, area president, insurance & risk management Becky McLaughlan, president & CEO health & benefits; Dan Hale, president & CEO, property & casualty Jay Schreibman president and CEO

64.8

Brown & Brown of Detroit 35735 Mound Road, Sterling Heights 48310 (586) 977-6300; www.bbdetroit.com

37.0

34.3

7.9

1,394.5

86 101

101

Insurance Agency

Alan Chandler, president and CEO; Jeffrey Chandler, exec. vice president; Robert Trobec, CFO/ executive vice president Jim Kapnick CEO

34.5

31.1

11.1

180.0

156 161

161

Insurance Agency

29.7

29.4

1.1

300.0

156 156

156

Insurance Agency

Patrick McDaniel, Michigan partnership leader; Michael Nixon, senior vice president, SEMI employee benefits leader Nick Valenti president and CEO

28.9

27.3

5.7

427.7

158 695

695

Insurance Agency

17.6

17.1

3.2

16.4

92 127

127

Insurance Agency

Valenti, Trobec, Chandler Inc./VTC Insurance Group 1175 W. Long Lake Road, Troy 48098 (248) 828-3377; www.vtcins.com Kapnick Insurance Group

Chicago Road, Troy 48083 11 769 (248) 352-4455; www.kapnick.com

Hylant Group Inc. 2401 W. Big Beaver Road, Ste. 400, Troy 48084 (248) 643-8750 ; www.hylant.com

Michigan Financial Cos. Inc. 28411 Northwestern Highway, Suite 1300, Southfield 48034 (248) 663-4700; www.michiganfinancial.com

The Huttenlocher Group 1007 W. Huron, Waterford Township 48328 (248) 681-2100; www.hgway.com

David Huttenlocher CEO

14.3

11.8 F

21.2

110.0

86 86

Insurance Agency

Daly Merritt Insurance

Martin Daly, president and CEO; Melissa Armatis, COO

11.2

12.4

-9.6

124.5

59 NA

3,888

Insurance Agency

A. E. Mourad Agency Inc.

Anthony Mourad, president; Peter Mourad, vice president; Steve Mourad, vice president

11.2

10.8

3.0

638.9

16 19

Insurance Agency

KIG Korotkin Insurance 26877 Northwestern Highway, Suite 400, Southfield 48033 (248) 352-5140; www.getkig.com

Kenneth Korotkin president

8.3

7.8

6.6

8.3

50 50

Insurance Agency

Oswald Cos.

Catherine Kosin senior vice president, Detroit market leader

6.8

8.0

-15.0

59.0

29 400

400

Insurance Agency

Capital Insurance Group

Robert Moglia Jr., president; Edmund George, Tom Moglia, Donn Johnson, vice presidents

6.3

6.0

5.0

42.0

27 27

Insurance Agency

Johnston Lewis Associates Inc.

Jay Sawmiller, president and CEO; Mike Cardella, Dan Wilhelm, Steve Rosser, executive vice presidents

5.7

5.0

14.0

43.5

36 36

Insurance Agency

J.S. Clark Agency Inc. 25900 W. 11 Mile Road, Suite 210, Southfield 48034 (248) 355-9600; www.jsclarkagency.com

Joel Clark president and CEO

5.4

5.1

5.7

0.0

33 33

Insurance Agency

Allied Insurance Managers Inc.

Ron Kosmal, chairman and CEO; Paul Murad, president; Jayson Bass, vice president

4.7

4.4

6.4

35.0

33 33

Insurance Agency

Goodman Venegas Insurance Agency Inc.

M. Paul Venegas, president; Regina Goodman, co-owner

3.7

3.4

8.8

33.0

15 15

Insurance Agency

Biddle Ave., Wyandotte 48192 15 3099 (734) 283-1400; www.dalymerritt.com Dequindre Road, Madison Heights 48071 15 28277 (248) 336-1600; www.aemourad.com

Woodward Ave., Suite 201, Bloomfield Hills 48304 18 39572 (248) 433-1466; oswaldcompanies.com W. Square Lake Road, Bloomfield Hills 48302 19 1263 (248) 333-2500; www.capitalinsuranceagent.com E. Maple Road, Troy 48083 20 575 (248) 528-2400; www.johnstonlewis.com

S. Blvd. E., Suite 110, Rochester Hills 48307 22 1055 (248) 853-0930; www.alliedinsmgr.com Livernois, Suite 170, Troy 48083 23 2800 (248) 740-9090; www.goodmanvenegas.com

This list is an approximate compilation of the largest such agencies and companies in Michigan. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Michigan office. NA = not available.

B Succeeded Jeffrey Harrold as chairman and CEO in December 2017. C Meadowbrook Insurance Group, announced in October that it had changed its name to AmeriTrust Group Inc. D Includes Marsh, Mercer and Oliver Wyman figures. E Formerly Arthur J. Gallagher & Co. F Southeast Michigan revenue only. LIST RESEARCHED BY SONYA D. HILL

Discover the Power of the Right Partnership. Get out of the box. Demand more. Letâ&#x20AC;&#x2122;s start a conversation. 888.839.3100 or visit us at lsgip.com

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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 // M A R C H 1 2 , 2 0 1 8

FOCUS

CUTTING EDGE AUTO TECHNOLOGY

Novi-based Osram Opto Semiconductors manufactures the LEDs and silicon backing to make adaptive beams possible. OSRAM OPTO SEMICONDUCTORS

The tech you’ll use in your next car By Dustin Walsh dwalsh@crain.com

The modern automobile is daunting — it’s one of the most technologically advanced machines on our planet — and it’s not getting any simpler. As major automotive players, startups, researchers and technologists contemplate and design a future of cars that drive themselves, crashfree highways and new approaches to vehicle ownership (or lack of ownership), end users — those who drive, ride in and own cars — are left wondering how these advancements will impact their lives. Here, we’re going to discuss some of the new technological advancements in automotive technology that you’ll be able to see, feel or interact with on your next vehicle or the vehicle after that. These technologies are designed to make the driving experience easier, safer and in some cases,

Need to know

JJContintental Automotive Systems is

developing an automated trailer hitching and guiding system JJAdaptive LED headlamp technology already in use in Europe is coming to the U.S. JJAugmented reality is making things more efficient on the factory floor

more fun. From easier trailer hitching and less headlamp glare to augmented reality on the factory floor, drivers will see immediate improvements behind the wheel and on the road — though the road ahead is far less clear.

Automated trailer hitching You’ve seen “that guy” at the boat launch. You’ve probably been that

stressed person at least once, backing up a trailer with a new boat toward the ramp with all the efficiency of an unmanned fire hose. Continental Automotive Systems Inc., the North American subsidiary of Germany’s Continental AG, is aiming to bring convenient and anxiety-reducing technology to trailer use with its automated trailer hitching and guiding system. Initial iterations of the system, likely available in 2020 mode years, uses a vehicle’s backup camera, which are now standard in 2018 models in the U.S., to identify the trailer, its clearance and proximity to the hitch. Coupled with Continental’s air suspension system, the height of the vehicle adjusts to the height of the trailer and the vehicle is guided to the hitch for a seamless connection, autonomously. The next advance of the trailer system is the ability to back the vehicle

and trailer up without ever touching the steering wheel through the use of a knob in the vehicle or a mobile app on a tablet, said Jeremy McClain, director of systems and technology for Continental’s North American chassis and safety division. The user would receive prompts via the screen in the vehicle or on the tablet about the trailer’s angle and trajectory to allow easy, disaster-free control while backing a trailer up to a boat launch or parking spot. “The cameras measure the articulation angle to give you a much more intuitive way to control the trailer,” McClain said. “Even for the experienced trailering drivers, it adds a huge amount of value. It brings a new level of convenience and safety.” The ability to exit the vehicle and control it remotely will require new regulations, McClain said, but expects the ability to be a feature in the 2020s.

Adaptive headlamps Compared to Europe, U.S. roadways are blinding. But regulation changes this year could bring an end to U.S. drivers’ glare problem. New lighting technologies already hitting European roadways offer major advantages in the U.S. as well. Some call it adaptive-drive beam: A car’s headlamps are comprised of dozens of LED lights that can monitor the environment and adapt independently to reduce glare and improve driver vision. Novi-based Osram Opto Semiconductors manufactures the LEDs and silicon backing to make adaptive beams possible. The cluster of LED lights work in real time to turn on and off individual lights to avoid blinding other drivers. And they can turn off to create a “black-box” effect around vehicles in the beam of light, eliminating glare for other drivers. SEE TECH, PAGE 15

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

CONTINENTAL SYSTEMS

Continental Automotive Systems Inc., the North American subsidiary of Germany’s Continental AG, is aiming to bring convenient and anxiety-reducing technology to trailer use with its automated trailer hitching and guiding system.

TECH

FROM PAGE 14

The systems use existing cameras on vehicles with advanced safety functions, such as lane-departure warning and emergency-braking systems, to detect light coming from other vehicles. Plymouth-based light systems supplier Varroc Lighting Systems has a 40LED system already in production overseas. Osram has developed a system with 1,024 LED pixels. These lights also allow for greater visibility — current systems provide 100 feet or more of visibility over traditional auto headlamps — providing the driver with 1-2 seconds more reaction time, he said. Mike Godwin, director of LED lighting at Osram, said adoption is picking up in Europe and U.S. manufacturers are interested in the technology. Standards are expected to be determined this summer, with the hopes of regulatory approval for the systems from the National Highway Traffic Safety Administration thereafter.

Augmented reality Augmented reality is changing the way consumers see the world — from

chasing PokeStops in the mobile game Pokemon Go to live stickers on their smartphone. The same technology is also improving the efficiency and reliability of automobiles. The innovation is one part interactive how-to and one part idiot-proofing, and is gaining traction in manufacturing, health care and other fields. Wixom-based OPS Solutions LLC makes software powering augmented reality on the factory floor. The software, called “Light Guide Systems,” uses projectors to overlay step-by-step images and instructions, complete with visual cues like arrows and videos, on parts and production areas to assist workers with proper assembly. A worker follows visual indicators to complete each step of the manufacturing process. A red light flashes and a buzzer sounds if a step is missed or incorrect part is used. It’s a deceptively simple way to get some huge productivity and quality gains. At automaker FCA US LLC’s UAW-Chrysler National Training Center, roughly 5,000 new employees are training in standard manual assembly on OPS Light Guide systems. FCA revealed the OPS system boosted worker productivity by 38 percent and quality rose by 80 percent.

The augmented reality market is expected to rise to $133.8 billion by 2021 from $3.3 billion in 2015. It’s an update on a Japanese concept called poka yoke, or driving down costs and increasing productivity in the manufacturing process through “dummy proofing,” and has been used for decades. The Japanese term, coined in the 1960s by a Toyota Motor Corp. engineer, defined the just-in-time production philosophy first implemented by Toyota before spreading to the other automakers. Production quality and efficiency spiked from implementation of the process. While the consumer will never see an OPS system in operation, the results are noticeable in stronger welds, bolts in the correct spot and perfect undercoating, among other improvements. The augmented reality market is expected to rise to $133.8 billion by 2021 from $3.3 billion in 2015, according to a Zion Market Research report. A healthy dose of that, as much as 25 percent, is expected to be from manufacturing and industrial use.

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certificates and master degrees in engineering from Lawrence Tech.

DEALS & DETAILS CONTRACTS J zipLogix LLC, Fraser, a real estate technology company, has integrated HomeActions marketing platform, from HomeActions LLC, Cove Springs, Fla., an e-prospecting and client relationship platform for real estate agents, within the zipForm Plus forms platform to provide marketing tools to users. Websites: ziplogix.com, homeactions.net. J Technology companies Continental Automotive Systems Inc., Auburn Hills, and NVIDIA Corp., Santa Clara, Calif., announced a partnership to create Artificial Intelligence self-driving vehicle systems based on the NVIDIA Drive platform, with a planned market

introduction in 2021 for Level 3 features. The partnership enables the development of AI computer systems scaling from automated Level 2 features to full Level 5 self-driving capabilities, where the vehicle has no steering wheel or pedals. Websites: continental-corporation.com, nvidia.com.

EXPANSIONS Goddard Systems Inc., King of Prussia, Pa., the franchisor of The Goddard School preschool system, has opened a preschool at 48600 Grand River Ave., Novi. The school was built by Sachse Construction, Detroit, and designed by Hobbs + Black Architects, Ann Arbor. Phone: 248-938-0400. Websites: J

goddardschool.com/detroit/novigrand-river-avenue-mi, sachseconstruction.com, hobbs-black. com. J Athletico Physical Therapy, Oak Brook, Ill., a physical therapy franchise, has opened a location at 26945 Ford Road, Dearborn Heights. Phone: (313) 254-4873. Website: athletico.com.

NAME CHANGES J Title Source Inc., Detroit, provider of title insurance, property valuations and closing services, has changed its name to Amrock. Website: amrock.com.

Submit Deals & Details items to cdbdepartments@crain.com.

Learn more: ltu.edu/engineering admissions@ltu.edu

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ADVERTISING SECTION To place your listing or for more information, please call Debora Stein at (917) 226-5470 or email: dstein@crainsnewyork.com

www.crainsdetroit.com/onthemove

HEALTH CARE

INSURANCE

REAL ESTATE

Jeanne Merchant

Bert Copple

Eileen Dooley

Mary Anne Wilson

Donald Selvidge

Board of Directors

Corporate Chair of the 2018 Metro Detroit Parkinson’s Walk on May 19

Vice President, Health & Benefits

Senior Advisor, Furniture Advisory Services, Project Management, Detroit

Senior Managing Director

Michigan Parkinson Foundation Jeanne Merchant, president and owner of Home Instead Senior Care of Southwest Oakland County was elected to the Michigan Parkinson Foundation (MPF) board of directors for a three year term. Merchant will assist the MPF in its mission to provide direct patient services and education programs to help improve the quality of live for those who live with Parkinson’s, a progressive neuro-degenerative disease. There is no cure; only treatment for the symptoms. For help visit www.parkinsonsmi.org. Bert Copple, the President of the Home Instead Senior Care franchise in Birmingham, is serving as the Corporate Chair of the Parkinson’s Walk because it was a way to support his clients. He sees first hand the need for the Michigan Parkinson Foundation’s services. The MPF provides valuable education, tools and financial support to help people with Parkinson’s improve their quality of life today. ”Our two organizations strive to make a positive impact on those who live with Parkinson’s”.

Armada Risk Partners Armada Risk Partners is pleased to announce the addition of Eileen Dooley, formerly of Oswald Companies, as Vice President, Health & Benefits, based in the company’s Michigan office. Eileen will work with small and mid-market Health and Benefit clients in developing their benefits strategy as well as assisting them daily with all aspects of their benefit plans and administration. We welcome Eileen to the Armada fleet and wish her success in her new role.

Mary Anne Wilson has joined CBRE as a Senior Advisor in its Furniture Advisory Services, Project Management team in Detroit. With 20-years of furniture dealership sales experience, Mary Anne will work with clients to develop a customized bidding strategy aimed to deliver transparency and savings to the process.

ADVERTISING & MARKETING

ACCOUNTING

PROFESSIONAL SERVICES

Jim Malkowski

Jay Kolker

Senior Manager, Tax Services

Chief Information Officer

RSM US LLP

BeneSys, Inc.

Jim has more than 15 years of experience in the accounting industry. His focuses include income tax accounting under topics ASC 740 and IAS 12, and tax planning and compliance. Jim’s previous roles included directing the global tax function of large U.S. multi-national outbound manufacturing and the North American tax function of a publicly traded foreign direct investment French inbound global manufacturing organization.

BeneSys, Inc. is pleased to announce the hiring of Jay Kolker in the role of Chief Information Officer. Jay has over 30 years of IT experience in healthcare, insurance, and benefit administration, most recently as Vice President of Enterprise Technology for Delta Dental of Illinois. Jay’s focus will be developing superior IT strategies and services in support of BeneSys’s strategic plan.

CBRE

Jaime Neher

Chief Executive Officer

Design Lead

ROSSETTI

Mike Ashley has been promoted from director of marketing to chief executive officer at White Glove Workshops - a digital marketing company based in Birmingham, MI that specializes in planning and promoting educational seminars for service professionals. In his role as CEO, Mike will oversee several operational and business development initiatives for the company. Previously, Mike was the managing director of Great Lakes Golf & Sports Complex and a managing partner at Four Seasons Golf Centers.

Donald Selvidge has been named Senior Managing Director for the Detroit office of Integra Realty Resources. The move is part of a broader transition to expand leadership structure within the organization.

ARCHITECTURE

Mike Ashley White Glove Workshops

Integra Realty Resources Detroit

Jaime Neher, LEED AP, BD+C joins ROSSETTI as a design lead, bringing 15 years of architecture and design experience to the firm. She is skilled in designing immersive experiences with creative solutions, and her resume spans luxury retail experiences in Las Vegas to mixed-use developments in Detroit. At ROSSETTI, Jaime will work in all aspects of design projects, spanning hospitality, commercial, sports, and entertainment.

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For more information or questions regarding advertising in this section, please call Debora Stein at (917) 226-5470 or email: dstein@ crainsnewyork.com

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RAIN CRAIN’S DETROC IT B’SUDSETROIT I N EBSUSINESS S // M A R C H 1 2 , 2 0 1 8

CALENDAR THURSDAY, MARCH 15 A Conversation with Tim Sloan: Leadership, Culture and Innovation. 11:30 a.m.-1:30 p.m. Detroit Economic Club. Wells Fargo CEO and President Tim Sloan will discuss leadership, innovation and the financial services industry. MotorCity Casino Hotel. $45 members, $55 guest of members, $75 nonmembers. Website: econclub.org Great Lakes Business Intelligence & Big Data Summit. 8 a.m.-5 p.m. WIT. Includes keynotes from industry experts, case study sessions, vendor software demonstrations, handson workshops and networking opportunities. Attendees will learn about the latest business intelligence and big data software, best practices, and success stories. Troy Marriott. $169. Contact: Erin Adair-Guy, phone: (248) 641-5900 x244; email: eguy@witinc.com; website: greatlakesbisummit.com

UPCOMING EVENTS Positive Links Speaker Series: Clash! Bridging Cultural Divides in the Workplace. 4-5 p.m. March 19. Ross School of Business. Hazel Rose Markus, Davis-Brack Professor in the Behavioral Sciences Department of Psychology at Stanford University,

REAL ESTATE

SPOTLIGHT David Lewis named AT&T Michigan president

AT&T looked internally to find a new leader of its Michigan operations in David Lewis. He replaced Jim Murray, who departed the position he held since 2009 in December, last week as president. Lewis, 45, now oversees legislaDavid Lewis tive and regulatory affairs in Lansing and external and industrial relations for the

shows how recognizing and including interdependence within workplace culture cycles can bridge divides and enhance individual motivation, creativity and performance. Michigan Ross Campus. Free. Contact: Jacob Feinberg, phone: (734) 764-0544; email: cpoevents@umich.edu; website: positiveorgs.bus.umich.edu JVS Business Connections: Networking for Introverts, Extroverts and In-between-verts. 7:30-8:45 a.m. March 21. JVS. Speaker: Abby Kohut. Topics: How to explain what you do so people will remember you, how to identify the right networking opportunities for you, what “paying it forward” is all about, why networking is simply making new friends and how to turn your networking magic into long-term relationships. JVS, Southfield. Free, but registration required. Contact: Angela Bevak, info@ jvsdet.org To submit calendar items visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” from the drop-down menu that will appear. Fill out the submission form, then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/ events.

Page17 17

state’s 6,000 workers. Before Michigan, he spent nearly a decade running AT&T Indiana’s external and corporate affairs. The Indianapolis native has public service experience as a staffer in Indiana’s commerce department and later lieutenant governor’s office under Joe Kernan. Prior to AT&T, he was a JPMorgan Chase & Co. vice president. Lewis holds a master’s degree in public affairs from Indiana University-Purdue University Indianapolis.

Engler hires executive team members

Michigan State University Interim President John Engler made two additions to his executive team who

will deal with government and media affairs. Kathleen Wilbur was named executive vice president for government and external relations and Emily Gerkin Guerrant was named vice president and university spokesperson. They were to begin their new roles Monday. The new hires come as the university deals with multiple investigations of the its handling of sexual assault investigations into disgraced former sports and USA Olympics doctor Larry Nassar. Wilbur is a former MSU trustee and joins Engler’s team after spending about 16 years with Central Michigan University. Guerrant comes from the Michigan Economic Development Corp.

PEOPLE ENGINEERING

HEALTH CARE

Nathan Stalker to mechanical department leader, Strategic Energy Solutions Inc., Berkley, from senior mechanical engineer.

J Adnan Munkarah, M.D., to executive vice president and chief clinical officer, Henry Ford Health System, Detroit, from chairman, Department of Obstetrics, Gynecology and Women’s Health, and chief medical officer, Henry Ford Hospital and Health Network, Detroit.

FINANCE J Randy Wilson to senior manager, Cendrowski Corporate Advisors LLC, Bloomfield Hills and Chicago, from principal, Plante Moran PLLC, Chicago.

NONPROFITS/ ORGANIZATIONS J

Kelly Bennett to marketing and

events manager, Birmingham Bloomfield Chamber of Commerce, Birmingham, from office manager and event coordinator, Rochester Regional Chamber of Commerce, Rochester. Also, Alexandra Cordon to membership manager from business account executive, Comcast Corp., Royal Oak. To submit news of your new hires or promotions to People, go to crainsdetroit.com/peoplesubmit and fill out the online form.

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(231) 409-9119 Call anytime between 7am and 10pm Email: joe@joeblachy.com Website: joeblachy.com 420 Howard St., Petoskey, MI 49770

The Crain’s Reader 26.5% influence the purchase of office/industrial and commerical space. Help them find you by advertising in Crain’s Real Estate Section. 313.446.6086 • FAX: 313.446. 034 7 E-Mail: cdbclassif ied@crain.com

Req: Bachelor’s deg or Foreign equiv CompSci, Eng, Electri/Electro Eng /related/equal with Min 5 Yrs exp Java & Android & 2+ yrs C/C++. Alt: Masters deg / Foreign equi CompSci, Eng, Electri/Electro Eng /related/equal with Min 3 Yrs exp in Java & Android & 2+yrs C/C++. Exp req- Android App dev exp. Dev & custom exp work with core apps & perfor impr; Dev exp in Android App FW, Exp work with Native ser (C/C++) Work k’ledge of JNI, Exp using various tools rel anal & debug tools like SysTrace, CPU Monitor, traceview, Memory analyzer, Hierarchy viewer, analy bug rep. Code & artifacts rev Solid debug exp issues, incl perf issue, across layers of Android. Dev k’ledge in using sqlite databases/similar Compl awareness SDLC Work in Linux envir, k’ledge using source control tools GIT. Scrip tools python.

Work loc: Novi, MI May have assignments in U.S. incl Livonia, MI. Apply: Pls send resumes to: Harman Connected Services Inc Attn: Gokul /Job Code SSE-HCS-06 2002 156th Ave NE #200, Bellevue, WA 98007.

Senior Software Engineer Job Code SSE-05; Position: 1 Focus time on design & dev AndroidApps/Serv for Automotive Infotainment proj. strong u’standing of Android operating sys (Appl & FW). have experience in C/C++/Java dev for IVI systems; passion dev new prod & exp working SDLC. Analyze cust & intern req & specification & transl into sw design, add features, modify, fix bugs, and/or port to differ platforms while adhering SW design & coding best prac. Test SW design & code at unit & system level to insure requirements are met & highest SW qual is achieved. Work with Harman domain teams define interfaces b/w components Partici in inter & cust driven design & code rev throughout prog. Provi tech l’ship in Android HMI proj. Support & mentor less exp peers by share k’ledge in Android & rel tool carryout acti. Commu with peers in Harman group to coord SW dev across diff geo regions. Work with cust to further define req & resol issue. Req: Bach’s deg or foreign Equivalent in CompSci; Eng & 5 yrs of prog work exp in SW design & dev on Mobile Smartphone platform &/or In-Vehicle Infot p’form in lang of C/C++ & Java, spec to Android App FW & app dev. Alt: Master’s deg or foreign Equivalent in CompSci Eng & 4 yrs of prog work exp in SW design& dev on Mobile Smartphone p’form &/or In-Vehicle Infot p’form in lang of C/C++ & Java, spec to Android App FW & app dev. Exp incl: 5 yrs of ext exp in software design & dev on Mobile Smartphone and/or In Vehicle Infot p’form lang C/C++ & Java. Exce skill in Obj Orien Program & Obj Ori Design. Min 3yrs exp UI FW dev for In-Vehicle Infot / smartphone. & Android Framework Dev. Expert in infot HMI dev, GIT & GERRIT, UML, Excel prob solv skills with exp of using sys anal & profiling tools for debug & perform optimization.

Work loc: Novi, MI May have assignments in U.S. incl Livonia, MI. Apply: Pls send resumes to Harman Connected Services Inc Attn: Gokul /Job Code SSE-05, 2002 156th Ave NE #200, Bellevue, WA 98007.

Crain’s Classifieds Gets Results

POSITIONS AVAILABLE

ACCOUNTING Risk Assurance Manager, IT Risk Management (Mult. Pos.), PricewaterhouseCoopers LLP, Detroit, MI. Enhance internal audit functions to further align to clients’ company strategy & risk mgmt. Req. Bach’s deg. or foreign equiv. in Acct, Bus Admin, Comp Sci, MIS, Engg or rel. + 5 yrs post-bach’s progress. rel. work exp.; OR a Master’s deg. or foreign equiv. in Acct, Bus Admin, Comp Sci, MIS, Engg or rel. + 3 yrs rel. work exp. Must have CISSP, CISM, CISA or rel. license. Travel req. 60% of time.

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REAL ESTATE ATTORNEY Grand/Sakwa Properties, a Farmington Hills-based real estate investment, development and management firm with over 6 MM sq. ft. of assets, is seeking an experienced Real Estate Attorney to serve as its corporate counsel. The candidate will be responsible for drafting purchase and sale agreements, commercial leases, loan documents, and other transactional documents for a portfolio of residential, industrial, and commercial properties. The candidate should also have experience with legal work that pertains to general real estate matters such as title review, zoning, entitlements, and incentives agreements. Admission to the Michigan Bar and 5+ years’ experience as a commercial real estate attorney preferred.

Direct resumes to: jdemetriou@grandsakwa.com

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

ASCENSION FROM PAGE 1

Over the past three weeks, Crain’s has reported hundreds of layoffs at Ascension hospitals in Michigan. Sources suggested layoffs could eventually total this year up to 1,000, which could include moving several hundred employees into a contract management company. MacKenzie did not specify a final number because of the ongoing reviews and labor talks. “We think this is our new normal. The landscape we are navigating here is the new reality,” said MacKenzie, who worked as a nurse practitioner and administrator at Detroit Medical Center for 25 years until 2005 when she became CEO of Sarasota (Fla.) Memorial Hospital. “We are the largest system in the U.S. and try to be transformational and ahead of changes,” she said. “We make adjustments as fast as we can, but as a Catholic ministry we need to be sensitive to vulnerable populations.” With burdensome regulations getting worse and growing reimbursement cuts from government and private payers facing Ascension and all health systems, MacKenzie said, Ascension needs to reduce costs and reorganize to prepare for patients seeking lower-cost health care options.

“We believe all health systems (will need to cut expenses and reorganize). We may be a leader as all health systems go through the same rapidly changing landscape with reimbursement decline, people transitioning to outpatient (services),” she said. “We are focusing on ambulatory growth. ... Health care costs are a major issue and we are addressing that now.”

Finances strong, but concern for future Ascension Michigan posted fairly strong financial results in 2017. Thirteen of its 14 hospitals Michigan earned a total of $114.6 million on operations, according to American Hospital Directory, a Louisville-based consulting firm. No data for Michigan was available for 2018. Financial reports on Genesys Regional Medical Center in Grand Blanc Township were unavailable for 2017. In fiscal 2017 ended June 30, Ascension’s St. John Providence Health System, a five-hospital regional system in Southeast Michigan, earned net income of $110.1 million on $5.83 billion total revenue, for a 2.1 percent total profit margin, AHD said. The data comes from Medicare cost reports that hospitals are required to submit to the federal government.

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:

Only St. John River District Hospital in Southeast Michigan lost money, $4.8 million on net patient revenue of $82.9 million. Flagship St. John Hospital and Medical Center in Detroit reported net income of $36.9 million; Providence-Providence Park Hospital earned $39.9 million; and Crittenton Hospital had a $9.7 million gain. Two other hospitals in Michigan reported operating losses: St. Mary’s of Michigan in Saginaw, $21.3 million loss; and St. Joseph’s Hospital in Tawas City, a $162,000 loss. Borgess Medical Center in Kalamazoo earned $26 million on operations last year. Meanwhile, St. Louis-based Ascension Health, the nation’s largest nonprofit system with 141 hospitals in 24 states, reported a 78 percent decline in operating income to a 0.7 percent margin during the first six months of fiscal 2018 ended Dec. 31 from 3.3 percent margin in 2017. It has been taking steps the past year to shore up its profit margins and has cut expense increases from 9.1 percent in 2017 to 1.5 percent the first six months of the year. MacKenzie said in a statement that “it’s our goal to have a sustainable margin so that we can continue to provide affordable, accessible care to all, with special attention to the poor and vulnerable.”

Local plan to reduce costs, improve efficiencies But MacKenzie said Ascension Michigan wasn’t directed or mandated by Ascension in St. Louis to cut specific numbers of employees. Its goal is to reduce expenses by $60 million this year. “We create these solutions together. This is our work,” MacKenzie said. “It is not imposed on us by anyone. We created staffing plans” (using) benchmarks shared by multiple markets. Decisions on layoffs, cost reductions and restructuring going on in various Ascension markets in Indiana, Wisconsin and Texas were made

Providence-Providence Park Hospital in Novi is one of the Ascension hospitals that has seen layoffs re

by senior vice presidents like MacKenzie, she said. Those four markets account for about half Ascension’s 141 hospitals and half its $22.6 billion revenue. “Those markets are the larger markets. We are 20 percent of Ascension in Michigan,” she said. “We tend to drive health care trends. We are more standardized at Ascension, across the markets as a national health care organization.” MacKenzie said the Catholic health system is using a standardized benchmarking approach in its largest markets to reduce clinical variations of tests and procedures, to improve patient safety and quality and evaluate the optimum number of employees in various departments. Adhering to best practice employ-

ee staffing ratios can help manage declining inpatient volume, the move to outpatient services and the need to improve worker productivity, MacKenzie said. “These staffing benchmarks are in place at some of our ministries,” she said. “We looked to the best performing (hospitals)” that staff to inpatient and outpatient volume, she said.

Restructuring beginnings MacKenzie said the restructuring began last summer and started layoffs of 28 full-time equivalent workers in management suites, including 12 vice presidents, five directors, three managers and eight support staff. Ascension Michigan’s management to staff ratio dropped to 10-1,

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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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AMAZON FROM PAGE 1

“The Amazon bid is now dead, so there’s no reason to hide any of the incentives they were willing to give, because neither Detroit or Grand Rapids is a candidate,” said Jane Briggs-Bunting, a media law attorney and founding president of the Michigan Coalition for Open Government. The Right Place Inc., a west Michigan economic development group that assembled Grand Rapids-area bids for Amazon, also had a nondisclosure agreement in place with the MEDC dated Jan. 8, 2014, according to records Crain’s obtained under a FOIA request. Both agreements for Rock Ventures and The Right Place contain nearly identical wording about what’s deemed “confidential exempt information” — raising new questions about why the state agency is making public one set of tax incentives offered to Amazon in Grand Rapids while shielding the Detroit bid. “They had the same confidentiality agreement. It makes no sense,” said Briggs-Bunting, who reviewed the nondisclosure agreements for Crain’s. “I just think they like to say no because they really, really love Dan Gilbert.” Christin Armstrong, associate general counsel for the MEDC, said the

agency determined the Detroit incentive package can’t be disclosed because there was an addendum attached to the Rock Ventures nondisclosure agreement that covers documents for a variety of Gilbert’s downtown Detroit real estate projects that could be applied to a different company. “There’s still negotiations, there’s still incentives being discussed, so it’s still financially-proprietary information,” Armstrong told Crain’s. There was no addendum specifically naming the Amazon HQ2 project added to The Right Place’s nondisclosure agreement — leading the MEDC to grant a Freedom of Information Act request by Crain’s and prompting the Grand Rapids organization to voluntarily release the information to news organizations. Briggs-Bunting said the promised tax incentives can only be promised by the state and city of Detroit, not Gilbert’s Rock Ventures or Bedrock LLC real estate management firm. “The tax incentives ... are coming not from Bedrock, but from the city of Detroit,” she said. “To me, it sounds like they have it backwards.” In denying a Crain’s FOIA request for the tax incentives offered to Amazon in Detroit, the MEDC cited an exemption under the public records law that protects trade secrets and commercially sensitive information from disclosure. “We entered into a nondisclosure

agreement with the MEDC to protect the competitive information that was contained in our Amazon bid,” Rock Ventures spokeswoman Whitney Eichinger said in a statement to Crain’s. Peter Hammer, a law professor at Wayne State University, also reviewed the nondisclosure agreements for Crain’s and said the pacts can’t be used “to expand the scope of a FOIA exemption.” “I can’t see any obvious reason why one would cover the numbers and the other would not,” Hammer said. “That seems odd because it’s basing the scale of the exemption not by the law but rather by the NDA.”

Long-shot chance? Even though Amazon publicly eliminated Detroit in mid-January from its headquarters search competition, the MEDC also is withholding the tax incentive numbers because Amazon hasn’t picked a city yet — implying that it is holding out a longshot chance that Detroit’s offer remains on the table. “The project is still viable,” said Emily Gerkin Guerrant, senior vice president of marketing and communications for the MEDC. “(Amazon) hasn’t made a final decision, so we feel that the (nondisclosure agreement) is still in place.” Amazon was not a party to the nondisclosure agreement that MEDC

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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 // M A R C H 1 2 , 2 0 1 8

Gwen Mackenzie is Michigan market executive of Ascension Michigan.

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still slightly higher than the industry standard of 8-1, she said. “We started to look at our administrative infrastructure” last July, MacKenzie said. “We needed a better staff ratio and started” with management. Over the past two years, Ascension Michigan has been combining executive jobs between several hospitals and created a seven-member statewide corporate team that includes a chief operating officer, chief nursing officer, chief medical officer and chief financial officer. For example, Jean Meyer has moved to Michigan corporate COO from her previous job as CEO of St. John Providence. The St. John Providence CEO job is unfilled. Besides having regional executives

share multiple hospital oversight responsibilities, MacKenzie said some state services have been moved to the corporate level, including human resources, marketing, mission and finance. At hospitals, Ascension also is cutting other costs, including information technology, real estate, travel, purchasing and supply costs. Ascension has cut contract labor costs to nearly zero from $21 million in 2017 and is looking at more flexible staff-

entered into with Gilbert’s Rock Ventures LLC, the parent company of the Quicken Loans Inc. founder’s Detroit-based business empire. Rock Ventures’ nondisclosure agreement predates Amazon’s Sept. 7, 2017, request for proposals by nearly a year. “In some cases, not all, we have a standing NDA with a partner that we do a lot of deals with,” Guerrant said in an email. “In addition to that agreement, we often amend (an) NDA to apply to specific projects too.” The document is dated Sept. 22, 2016, and was crafted about two weeks after Gilbert’s Rock Ventures began lobbying lawmakers to create a new sales and income tax-capturing incentive for developers to transform long-deserted brownfield sites. The addendum detailing “confidential exempted information” lists “transformational development” projects dated Sept. 22, 2016, for the former Hudson’s department store site and Rivereast, property east of the Renaissance Center that was pitched to Amazon for a riverfront campus. Those new tax credits, which lawmakers approved in May 2017, were ultimately part of the Detroit and Grand Rapids bids submitted to Amazon last fall, records show. Gilbert’s Rock Ventures and Bedrock led Detroit’s bid for Amazon’s

second headquarters after Detroit Mayor Mike Duggan tapped Gilbert to lead a regional bid committee. The bid was submitted to Amazon in October. In late December, Crain’s first obtained a copy of the 200-page sales pitch book Gilbert’s company produced. Under a separate FOIA request, the city of Detroit released to Crain’s more than 1,800 pages of documents related to the bid. Rock Ventures’ addendum to the nondisclosure agreement contains a log of 51 documents that are to be covered by the confidentiality pact, including a “Domestic Economic Development Incentive Package” and a six-page draft of the Amazon bid created by Boston Consulting Group, which aided Gilbert’s company in assembling the Amazon proposal. “You don’t really know what’s contained in those exhibits or the confidential information,” said Robin Luce-Herrmann, general counsel for the Michigan Press Association and media law attorney at Butzel Long. Luce-Herrmann also reviewed the nondisclosure agreements for Crain’s. The agreements wade into a mostly untested area of the state’s public records law, she said. “I don’t know if it’s a trade secret here,” Luce-Herrmann said. “But it certainly has the aura of commercial or financial information.”

Gwen MacKenzie, Michigan market executive of Ascension Michigan

ing models for nursing and other professions. “We reduced overtime by associates, decreased it by one-third,” MacKenzie said. “We looked at open positions and the necessity to post and refill positions without rigorous evaluations. We didn’t fill 150 open positions.” MacKenzie also addressed a previous Crain’s story that up to several hundred patient transporters and maintenance workers may be moved to Ascension’s environmental services contract management company, Touchpoint Support Services. “We are still discussing” that, she said. Touchpoint currently manages Ascension’s housekeeping and dietary staff. At St. John Detroit, Ascension’s flagship hospital in Southeast Michigan, MacKenzie said the several dozen patient care technicians that were laid off were not part of Ascension’s national model. “It was only at St. John. Others (Ascension hospitals) have not had (PCTs) for some time,” she said. The unit clerks in nursing depart-

Mixed transparency record The MEDC, a quasi-state department that operates with a mixture of taxpayer and private funding, has a mixed record of disclosing tax incentives for large employers. The most high-profile disclosure of taxpayer incentives was amendments the MEDC’s Strategic Fund board made in 2015 to Michigan Economic Growth Authority tax credits to subsidize the rentention of thousands of jobs at Detroit’s automakers. At the time, the MEDC said revised tax credits for Ford Motor Co. were capped at $2.3 billion and that Fiat Chrysler Automobiles NV was entitled to $1.7 billion in MEGA credits through 2029. But the MEDC kept secret the revised value of tax credits General Motors Co. can claim, citing a confidentiality agreement requested by the Detroit-based automaker. Hammer, the Wayne State law professor, said the high-profile nature of Detroit’s bid for Amazon’s second headquarters justifies public disclosure. “There are strong public policy reasons, in my opinion, for transparency and accountability, which would suggest that you’d want to be releasing as public information the amount of tax subsidies that the MEDC would be promising,” Hammer said. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

ments who were laid off also can be replaced, in part, by improved technology, she said. “We talked about the unit clerks this morning. We don’t have to use the phone. There are other ways to communicate electronically. We have been working on that and will accelerate that work,” she said. MacKenzie said Ascension also is looking at moving clinical programs to less expensive settings. She did not specify the hospitals, but they include two audiology clinics, a coagulation clinic and possibly shifting inpatient pediatric services at one hospital. Nurses, doctors, former and current employees who have talked with Crain’s about the job cuts have expressed anger that top executives at St. John and Ascension in St. Louis appear not to be participating in the expense reduction. For example, Ascension Health CEO Tony Tersigni earned $17.5 million in 2017 in total compensation when base salary, bonuses and other compensation are tallied. Tersigni headed up St. John Providence from 1995 to 2000. MacKenzie declined to comment on that issue. In 2008, when the nation was beginning to reel from the massive economic downturn, former Beaumont Health System CEO Ken Matzik

called a press conference to announce more than 165 layoffs of employees. Standing in from of print reporters and television cameras, Matzik also said he and other top executives and employed doctors also would take a 10 percent pay cut. Department managers took a 4 percent pay cut. Without the executive pay cuts, Matzik said another 225 workers would have been laid off. Despite nurses and doctors telling Crain’s they fear the downsizing will affect patient safety and quality because they will be spread even thinner than before, MacKenzie said she didn’t expect any negative impact. “This is the new normal, how we redesign work,” she said. For example, the use of electronic medical records will save nurses time in patient assessments, she said. “People are finding it easier,” she said. Managers at Ascension hospitals, she said, round frequently to talk with nurses and other employees to get a sense of how the changes are affecting them. “Anything the nurses are concerned about, I am concerned about,” she said. “Our focus is trying to make their work as efficient as it can be.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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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 // M A R C H 1 2 , 2 0 1 8

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.

PULTEGROUP

William J. Pulte (left) and his grandson Bill Pulte walk with Gov. Rick Snyder (center) in Detroit’s Brightmoor neighborhood circa 2013.

PULTE FROM PAGE 3

FISHBECK , THOMPSON, CARR & HUBER

“If you look at housing that’s older than 1960, they are not really in subdivisions, they are just streets within a city. But post-1960, they are neighborhoods with names and branding and marketing. There is something to that today that I believe he played a significant role in creating.” His grandson Bill Pulte said he “really pioneered American subdivisions.” “His philosophy was that by building homes in a subdivision, he was creating a community of families and a community of people. He was creating a community of people that would make life more enjoyable for people in that subdivision and community, and that was why Pulte Homes was so wildly popular. He was building communities in a way that nobody else had.” Pulte, who started William J. Pulte Inc. in 1956, built his first home near Detroit City Airport at age 18 in 1950 with high school friends and his first subdivision in 1959. He retired from the company at age 77 in 2010. “Clearly a sad day in the industry. Bill was not only a legend in homebuilding but a gentleman as well,” said Howard Fingeroot, area president for M/I Homes of Michigan, the company created after Bloomfield Hills-based Pinnacle Homes of Michigan LLC was sold to Columbus-based M/I Homes Inc.

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Wertheimer said Pulte’s personality trickled down to the company’s employees. “Our development division sells them land and subdivisions, and they are a pleasure to work with. They don’t operate like one of the largest homebuilders in the country, and that’s all a credit to the culture and the soul that Pulte had created. When they shake your hand

and say you have a deal, you have a deal. Dealing with a company that’s as large as they are, that’s abnormal,” Wertheimer said. Robertson, who said he had lunch with Pulte two weeks ago, described his friend as frugal, quietly charitable with his fortune and humble. “Terribly humble and terribly cheap,” Robertson said, laughing.

“His philosophy was that by building homes in a subdivision, he was creating a community of families and a community of people. He was creating a community of people that would make life more enjoyable for people in that subdivision and community, and that was why Pulte Homes was so wildly popular. He was building communities in a way that nobody else had.” — Bill Pulte, grandson

“When my wife and I would fly to Florida we sometimes bumped up to first class. He was always sitting in the back in coach. He could have bought and sold me 1,000 times over.” Robertson continued: “No college, no nothing. You asked to ask him what he was, and he used to say he was a carpenter.”

His grandson said he was “always interested in taking care of the most poor in the world and the country.” “He gave away an incredible amount of money in a way where nobody ever knew that he was the quiet giver,” Pulte said. “To him, the definition of philanthropy and giving was doing so on an anonymous basis. He never sought any credit.” The younger Pulte also modeled a blight removal program in Detroit in 2013 after efficiencies his grandfather taught him. It cleared 10 blocks around Eastern Market.

Corporate maneuvers PulteGroup (NYSE: PHM) had been based in Bloomfield Hills until 2014, when it completed a move to Atlanta, Ga., where it is currently headquartered. The company announced in May 2013 that it was moving south to “bring us closer to our customers and a larger portion of our investment portfolio,” Richard Dugas Jr., then the company chairman, president and CEO, said at the time of the announcement. Ryan Marshall is now president and CEO. It reported $7.5 billion in homebuilding revenue in 2016 on nearly 20,000 home closings. Revenue was up 28 percent over 2015 and closings were up 16 percent. It has homebuilding operations in 25 states and 49 different markets. In 2016, Pulte became involved in a battle with the company’s board over its leadership and helped trigger Dugas’ ouster, which eventually led to Marshall’s selection to run the firm. Pulte was inducted into the Home Builders Association of Southeastern Michigan Hall of Fame in December. As he said at the time: “I consider myself incredibly lucky to have never worked a day in my life, because I truly loved what I did and the tremendous people I got to work with.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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

DTE

FROM PAGE 1

The MPSC staff agreed and concluded that DTE “should have used higher prices in its natural gas high price case.” By not considering the risk of higher gas prices, staff said “this could mean that the company’s proposed project is not the most reasonable and prudent choice” and that DTE did not accurately forecast the full risk to ratepayers. “Wind and solar, particularly solar, are dropping fairly rapidly and DTE used cost data that was 18 months old to make it look significantly less expensive to build the gas plant,” said Beach, who has been an energy consultant more than 25 years. He previously worked for California Public Service Commission. “When you add the wind and solar tax credits, which will phase down in 2022, and add in efficiency, storage and demand response (when customers agree to curtail energy use in times of high demand) the case for renewables is much better.” DTE said in an interview with Crain’s and in a February hearing before the MPSC that its plan to build a natural gas-fired power plant in East China Township will save customers $300 million to $500 million and ensure dependable baseload power. DTE wants to open the plant in 2022 to replace three coal-fired plants it plans to close at River Rouge, St. Clair and Trenton Channel between 2020 and 2023. Irene Dimitry, DTE vice president of business planning and development, disputed the opposition groups’ low estimates of using renewables. She said replacing electricity capacity with renewable energy and energy efficiency, demand response would cost $300 million to $500 million more than the projected $989 million cost for the gas plant. “They had various errors in assumptions in the ways they treated different parts of (DTE’s gas and renewable energy) portfolio,” Dimitry said. Beach said his analysis of DTE’s costs for the gas plant are 20 percent higher than what DTE projected because of outdated energy prices and other faulty assumptions. However, Dimitry said DTE correctly compared the cost of natural gas with renewables and conducted a complete cost-benefit analysis of the various alternatives and projected costs out far into the future. She said DTE analyzed 50 different energy scenarios. “I am very confident we did a robust and through analysis that led to picking natural gas,” she said. “We met every minimum requirement, and we went above and beyond.” Becky Stanfield, Vote Solar’s senior director of western states, said DTE skewed its report to what it wants: a natural gas power plant. “Using DTE’s own analysis tools, our analysis shows that this billion-dollar gas proposal is simply not the best way to provide reliable, affordable, and clean electricity for Michigan customers,” Stanfield said. “The bottom line is that solar, wind and efficiency can do the job for less, and DTE should not be locking Michigan energy customers into paying for this costly gas option.” Margrethe Kearney, senior staff attorney with the Environmental Law & Policy Center, said DTE should rethink its plans to add natural gas plants. DTE has said it also could need another gas plant to meet demand in 2029. “DTE failed to seriously look at solar and wind power, battery storage, energy efficiency, and demand response, which would give DTE the flexibility it needs to integrate clean,

cost-effective renewables that are good for Michigan’s economy and environment,” Kearney said. When to begin a project

DTE’s opponents have asked the MPSC to require DTE to resubmit its gas plant proposal under the new energy law, approved in December 2016. MPSC’s staff suggested in testimony that the commission is within its purview to do that. Staff based its conclusion on the new law’s legislative intent that is to offer ratepayers the lowest-cost option for future electricity generation. In late July 2017, DTE submitted its certificate of necessity for the gas plant, five months before the new IRP regulations went into effect last December. The new energy law went into effect in April 2017, but the gas plant did not fall under the law because the regulations on a new integrated resource planning process weren’t developed yet. For months, DTE and its CEO Gerry Anderson argued in favor of the new energy law that included an updated and stronger IRP process. DTE said the law’s new IRP would give the company flexibility and the public more information on the lowest cost and best future energy sources. Anderson has told Crain’s that timing of renewable investments is critical. Under an IRP, regulated utilities like DTE and Consumers Energy Co. are required to develop long-term plans on how they will meet electricity demand in their service areas. The plans include evaluations of energy waste reduction, supply sufficiency, demand response, the impact of state and federal environmental regulations and other considerations. Any new generation source is required to be the lowest-cost and best option. Dimitry said the gas plant filing was “just a matter of timing — when the coal plants retire and how long it would take to build a new plant.” She also said it took the MPSC nearly a year to develop the regulations after the state Legislature passed was is now Public Act 341 and 342. But Dimitry said she disagrees with DTE opponents that the new IRP process is more rigorous than the old process. “It is slightly different. We did model other things. We did 50 different scenarios using our own analysis. We felt (building a gas plant) would make more sense,” she said. However, MPSC staff said while DTE’s IRP complies with the 2008 energy law, it would not comply if it was refiled under the new 2016 energy law IRP process. MPSC staff asked DTE to run an energy scenario with increased renewable resources, energy efficiency and demand response and DTE declined on Dec. 1, according to an MPSC’s brief. Sam Gomberg, senior energy analyst at the Union of Concerned Scientists, said the new IRP process requires more detailed analysis of energy production options. He said DTE would have had to model additional scenarios that specifically addressed energy storage and wider ranges of renewable sources, but stopped short because the old 2008 energy law didn’t require it. “DTE did not meet its burden to show that their proposed gas plant was the best option for Michigan customers” in either the 2008 or 2016 state energy laws, Gomberg said. “Under Michigan’s electricity planning law, the commission should send the company back to the drawing board.” Another reason Beach said DTE should invest in renewables now instead of later is because federal tax credits are available now. “DTE’s goal to reduce carbon emissions (80 percent lower by 2050)

is commendable and everyone supports it,” Beach said. “The question is what is the best way to get there. There is a significant opportunity given the availability of federal tax credits to get going, building more renewable at a lower cost.” Legislation that grants the 30 percent federal tax credits for solar begins to phase down in 2020 to 26 percent, 21 percent in 2021 and down to 10 percent in 2022 for commercial. Residential solar tax credits expire in 2022. Wind tax credits end in 2019. Anderson has argued that if DTE had been forced to invest in renewables in 2009 rather than in 2014, the company would have spent $150 million more on wind and solar. If DTE invests in solar and wind after 2022, the development costs are expected to increase, Beach said. “It is always a balancing act” when to begin energy projects, Dimitry said. “We have pulled forward some projects to qualify for tax credits from our original time frame. ... If we have an opportunity utilize more tax credits, we will.” Dimitry said DTE plans to announce a major renewable energy wind project in the range of 150 megawatts. She declined to specify where because negotiations with a developer are not complete. Through 2040, DTE plans to add up to about 4,000 megawatts of renewable energy. While DTE did not bid out renewables to compare with their proposed gas plant, other energy companies are finding very low renewable prices when they go out for bids. For example, Xcel Energy of Colorado sought bids from renewable energy companies to replace a 660-megawatt coal-fired power plant. In January, the energy company received more than 400 proposals at prices far below what it expected. The median price bid for windplus-storage projects in Xcel’s solicitation was 2.1 cents per kilowatt. So-

lar plus storage was 3.6 cents per kwh. Previously, the lowest known bid for similar solar resources was 4.5 cents per kwh in Arizona. DTE testified that it had not sought bids for renewable energy to replace its coal plants. DTE asked for bids only to build gas plant capacity. If the MPSC approves, DTE customers will pay about 6.7 cents per kwh over the lifetime of the plant, according to the MPSC. Renewable energy contracts

While DTE currently has renewable energy contracts with several hydroelectric, landfill gas and biomass entities that produce 104 megawatts of electricity, DTE says it won’t need them when they begin to expire in 2024. Doug Jester, an energy consultant with 5 Lakes Energy LLC in Lansing, testified in the hearing that DTE only used capacity generation from the renewable plants in its calculations of energy capacity until their contracts expire. He said DTE should have projected the generation from renewed contracts since the entities are going businesses or governmental agencies with employees and capital infrastructure. “The commission should require that DTE incorporate in its resource planning analyses reasonable projections of the (Public Utilities Regulatory Policies Act) contracts that can reasonably be expected to be available to DTE during the period covered by the IRP,” said Jester, who represents ELPC. PURPA is a federal law passed in the 1970s to encourage small renewable energy generation under 20 megawatts. Under PURPA, utilities must pay the price based on the “avoided costs” to generate the same amount of power used in the current standard power-generation source, which used to be coal and now is a hybrid combined natural gas cycle source. “We haven’t signed a PURPA con-

tract in more than a decade. There has been some study requests, and those are in the study phase. We do have a number of requests at various stages of study. We have communicated to them if you look at overall plan with the new gas plants and plans for energy efficiency and demand response that we are not projecting capacity needs in the future.” Dimitry confirmed DTE has told renewable energy developers it does not need additional renewable capacity from them. Some 141 developers have submitted interconnection applications for 100 kilowatts to 80 megawatts since December, according to a DTE filing. “We took into account the existing contracts, played them out through the late 2020s. The gas plant is a lot cheaper than PURPA” contracts, Dimitry said. Own or purchase?

Beach says utilities have a bias toward assets they can own. “Utilities make profit by how much they invest in the system,” he said. “A gas plant is a $1 billion investment. They earn a nice return on it. Utilities always have bias on building own resources as opposed to buying their own.” Asked about the intensity of the opposition to the gas plant, Dimitry said DTE is not surprised. Does she believe the commission will rule in the company’s favor? “We believe our analysis was robust and complete” she said. “We will either get approval or we won’t.” Dimitry acknowledged that the MPSC could require DTE to file under the new energy regulations. “I believe we put together a strong proposal that is right for our customers, cost-effective and flexible, and supports our sustainability goals,” she said. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

Arlie Sisson VP Emerging Products, Conde Nast Northwood Class of 2008

WHERE WILL YOUR TRUE NORTH LEAD YOU? New York, NY

ARLIE’S TRUE NORTH LED HER HERE Northwood University is committed to a policy of nondiscrimination and equal opportunity for all persons regardless of race, gender, color, religion, creed, national origin or ancestry, age, marital status, disability or veteran status. The University also is committed to compliance with all applicable laws regarding nondiscrimination. Northwood University is accredited by the Higher Learning Commission (hlcommission.org), a regional accreditation agency recognized by the U.S. Department of Education.

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CIVILLA FROM PAGE 3

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

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The idea? Put humans at the center of the process. That involved thousands of hours of interviews about the hurdles and questions people faced as they confronted filling out the form. “We have tools out of an industrial period that have tended to have us think of people as widgets and numbers, so you design systems that way,” said Civilla’s CEO and Co-founder Michael Brennan, who left United Way at the end of 2015 after a 30-year career there. The systems “end up not being very humane, (and) so much complexity gets loaded in that (they) end up not being very efficient.” Just as it did when it redesigned the paper form, Civilla is now sitting with a pilot group of users at two Genesee County sites to understand the issues they encounter as they attempt to apply for benefits from a mobile device. And it’s working with Code for America to figure out how technology could be used to help deal with those issues. “The work that’s going on here is meant to be of service not just to Michigan but to all 50 states,” Brennan said.

A "superpower" Civilla and Code for America met in the fall of 2016 at a New York City gathering convened by U.S. Digital Service to bring together organizations working on some aspect of public benefits. After developing technology to help people apply online for CalFresh, California’s version of the federal Supplemental Nutrition Assistance Program food assistance program for low-income people, Code For America joined a number of public and private groups to form the Integrated Benefits Initiative. The initiative is focused on building new human-centered approaches to improve enrollment and eligibility for people who apply for multiple assistance programs. The result could be new tools to assist clients trying to enroll, such as software, pop-up prompts or clarifying language for eligibility and enrollment. Code for America’s partners in the national project include the Centers for Medicare & Medicaid Services, the Center on Budget and Policy Priorities and Nava PBC, the San Francisco-based technology company that was instrumental in the rescue of Healthcare.gov during the implementation of Obamacare. Grants from the U.S. Department of Agriculture Food and Nutrition Service and the Chan Zuckerberg Initiative, the company founded by Facebook founder Mark Zuckerberg and his wife Priscilla Chan in late 2015 to engage in civic and philanthropic investment, are supporting Code for America’s national work. With funding in hand, Code for America chose Civilla and Michigan to launch the pilot for the project, which will eventually expand to four to six states. “Working with Civilla is like having a superpower,” said Laura Ramos, senior director, integrated benefits for Code for America, in an email. “Civilla brings a deep expertise in human-centered design and truly inspiring commitment to their community — two ingredients required to catalyze change inside government.” Code for America knew it wanted

CIVILLA

Civilla is focusing on user feedback to help improve the the process for applying for public benefits in Michigan through a mobile device.

Lena Selzer: Technology can help.

Michael Brennan: Systems end up not being humane.

to work with the Michigan Department of Health and Human Services from the start, she said. “Civilla is an indispensable partner in the pilot, and we could not be doing this work at this pace without their prior work.” General Motors is supporting the Michigan work with $450,000 in grants, Brennan said.

Human-centered approach By shadowing clients coming to the online system from a mobile device and gaining an understanding of the issues they face, Civilla and Code for America are providing a new research and development capacity for state government, Brennan said. Their approach is putting the human user first and using technology to be of service to their needs in-

“Civilla brings a deep expertise in human-centered design and truly inspiring commitment to their community — two ingredients required to catalyze change inside government.” Laura Ramos, Code for America

stead of the reverse, he said, an approach adopted years ago by companies in the furniture, hand-held technology and other industries. Work continues, but one area where technology might help users to more quickly and accurately apply for benefits is in submitting supporting documentation for things like checking and savings accounts, vehicles and property owned, income and employment verification, medical needs, childcare and child support, said Civilla’s design director, Lena Selzer. A person’s eligibility can’t be determined until all of the required documentation has been received, Brennan said, so anything missing holds up the process. By sitting with users, Civilla learned that the guidance on submitting required documentation was general and vague. People had a hard time understanding what they needed to submit, Selzer said. “We also heard from clients that they have a hard time knowing how to collect those documents. Some might have it in a filing cabinet, but others might have to call (the) landlord for copy of lease agreement, a former employer to verify employment, etc.” Then applicants had to figure out how to submit the verification. Many tried to take photos on cell phones, but they were coming out too dark or too blurry, Selzer said. “We think technology can help them with those things,” with, for example, a pop-up message to remind a user to place the document being photographed on a stable surface or to check their light settings. There could also be room for improvement in how caseworkers communicate with clients during the submittal process, Selzer said. Something as simple as texting a client to communicate in real time on documentation opens up a whole new world in how a government agency could interact with clients, she said.

Instant messaging is old hat for private businesses, but it’s been hard for government agencies to keep up with new technologies in the midst of all the complexity and volume they are dealing with, Brennan said. The two nonprofits expect to complete the discovery and test phase of their work on the web application by the end of October, Selzer said, with the results of that work dictating what comes next.

National potential Civilla is operating on a $2 million budget this year with six employees, Brennan said. About 70 percent of its revenue comes from fees for service, and the remaining third from philanthropic grants. “The innovation happening in Michigan today is already influencing states around the country,” Ramos said. “We have been talking to other states about their participation in a pilot. There has been quite a bit of interest in the Integrated Benefits Initiative especially as we describe ... the work in Michigan.” The understanding gained through the pilot with Civilla “will serve as a foundation for Michigan Department of Health and Human Service leaders to build on as they continue their efforts to redefine the experience Michigan residents have when interacting with government,” Ramos said. And the technologies and tools developed through the Michigan pilot will be available for any state or vendor to learn from or build on, she said. Code for America plans to feature the Michigan pilot work with Civilla at its annual summit in Oakland, Calif., in late May, an event that attracts many local government leaders from across the country, Ramos said. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

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

THE WEEK ON THE WEB

RUMBLINGS

Deal sealed for Gilbert to get ‘fail jail’ site

Crain’s wins business journalism awards

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

ayne County’s long nightmare with its half-built jail site downtown is nearing an end. Dan Gilbert and the county have reached an agreement for him to develop the site at the foot of the central business district and construct a $500 million-plus new criminal justice complex that would replace it. After years of jockeying and shifts in plans, the billionaire real estate and mortgage mogul can now move forward with a new 15-acre development on a site that has long been a smudge on a rapidly changing downtown landscape. In exchange for the property at Gratiot Avenue and I-375, an affiliate of Gilbert’s Rock Ventures LLC, Rock Development Co. LLC, is expected to build the county a new consolidated criminal justice complex a few miles north at I-75 and East Warren Avenue on property owned by the Detroit Department of Transportation. “This agreement is an outstanding example of Detroit 2.0, where the public and private sectors partner together in a smart, cooperative and optimistic manner to find and implement the best outcome possible,” Gilbert said in a statement. Details of the agreement still need approval before it becomes official. “Today the county executive announced a huge step toward replacing outdated jails and courthouse facilities in what could be the best solution for both Wayne County taxpayers and the continued revitalization of downtown,” commission Chairman Gary Woronchak said in a statement. “The Wayne County Commission is prepared to carefully examine all aspects of this proposal and decide whether it is in the best interests of the people we represent.” Gilbert and the county have been in direct negotiations for over a year. “Thousands of hours were spent to reach this agreement,” Evans said during a press conference last week on the 30th floor of the Guardian Building downtown. “It is complicated and complex, but it’s a good deal for Wayne County taxpayers.” After originally proposing a site at I-75 and East Forest Avenue, Gilbert then proposed moving the criminal justice complex to a nearly 13-acre city-owned property at I-75 and East Warren. Under Gilbert’s plan, Rock Development would build a new $533 million consolidated criminal justice complex by the spring or summer of 2022. Demolition of the old jail property is expected this summer or fall. Richard Kaufman, deputy county executive, said the agreement calls for ground to be broken on the I-75/Warren complex by Oct. 1.

BUSINESS NEWS J A San Diego real estate firm, Pacific Medical Buildings, is in talks with Southfield officials on a potential deal to redevelop about a fifth of the 125-acre Northland Center site in Southfield. J Taylor & Morgan, a business and accounting advisory firm based in

COSTAR GROUP

The site of the former Friends School in Detroit’s Lafayette Park neighborhood has a new ownership group planning to redevelop its 4 acres. A joint venture between Detroit-based developer Broder & Sachse Real Estate Services, Southfield-based developer Woodborn Partners LLC and Farmington Hills-based builder Hunter Pasteur Homes closed on the purchase Wednesday for an undisclosed price. All three are mixed-use and residential developers active in projects in greater downtown Detroit.

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

20 percent

The amount by which the DTE Energy Foundation increased its support of nonprofits between 2016 and 2017.

$650,000

The amount Antietam owner Greg Holm is asking of one of the restaurant's two side-by-side Art Deco buildings on Gratiot Avenue in Detroit's Eastern Market area.

127

The number of employees Southfield-based Integrated Manufacturing and Assembly plans to lay off at its Highland Park plant.

Flint and Troy, purchased Detroit-based municipal adviser Municipal Financial Consultants Inc. J Business Leaders for Michigan, a policy-focused group of the state’s top CEOs, is preparing its legislative agenda to build on the state’s recent economic revival and not succumb to complacency in a strong economy. It released its “Plan for a Stronger Michigan” last week. J Little Caesars Arena is going green for March with a DTE Energy Co. sponsorship that will power the venue with renewable energy during five Red Wings home games. J WXYZ-Channel 7 said last week it had taken morning news anchor Malcom Maddox off the air “for the time being” after a lawsuit filed last Tuesday claimed the station didn’t take adequate action on sexual harassment. J Motor City Match winner Raeshawn Bumphers of Pink Poodle Dress Lounge plans to open her flagship bridal salon in April in Detroit’s Jefferson Corridor. J Downtown Detroit Markets, a program of Bedrock LLC and the Quicken Loans Community Investment Fund, will return this spring and summer after an inaugural win-

ter program that generated more than $2 million in sales for participating startups. J Humanetics Innovative Solutions Inc., a Farmington Hills-based crash test dummy maker, has acquired an Austrian safety test equipment manufacturer, DSD Testing GmbH. J The co-founders of Ann Arbor-based Duo Security Inc., the fast-growing provider of internet security for corporations, have launched a free website called Decipher at decipher.sc to deliver news about hacking and educational resources about internet security, what the risks are and what to do about them. J Southfield-based Redico LLC purchased a 28-story skyscraper in Indianapolis, adding to its significant holdings. J Lipari Foods LLC of Warren purchased Waterloo, Wis.-based Jim’s Cheese LLC in a bid to grow its manufacturing business. J The Detroit Zoo moved its 13-year-old female polar bear, Talini, to Chicago and took in 5-year-old female polar bear Suka of Madison, Wis., to promote breeding with Nuka, the zoo’s 13-year-old male.

OTHER NEWS J Detroit Mayor Mike Duggan gave his State of the City speech last Tuesday night at Western International High School on the southwest side. Among other things, he pitched a plan for a bus route in northwest Detroit connecting six to a dozen schools run by independent charter operators and Detroit Public Schools Community District. J The city launched a State of the City website the day after the address linking to the varied initiatives on which Duggan spoke. J Detroit City FC will host FC St. Pauli May 19 for the first of two international friendlies the team has scheduled for this season. The Detroit soccer club will be playing live on TV for the first time, as well. J The Detroit Historical Museum’s commemoration of the city’s 1967 uprising, “Detroit ’67: Looking Back to Move Forward,” nabbed a finalist spot for a national honor by the Institute of Museum and Library Services.

Crain’s Detroit Business is being recognized for its journalism by Society of American Business Editors and Writers. Crain’s won an honorable mention in the General Excellence category among publications with fewer than 50 editorial employees for its “strength and depth of reporting” on Southeast Michigan. Crain’s was one of only two publications recognized in that category nationally. The Crain’s entry in that award category included a story that revealed how employers play a role in opioid abuse, another piece that helped mobilize a push to change rules that led to Michigan’s high auto-insurance rates and one that reflected on the history of Detroit’s Black Bottom neighborhood on the 50th anniversary of the 1967 uprising. Reporters Chad Livengood and Kirk Pinho also received an honorable mention in the Breaking News catego-

ry for “Amazon HQ2 bid revealed: tax breaks, $120 million talent program, transit vision.” That story began with a request filed with the city of Detroit under the Freedom of Information Act. That request eventually led to Crain’s receiving a copy of the 200-plus-page book submitted as part of the bid to land the online giant’s $5 billion investment and 50,000 jobs. Crain’s Detroit Business also earned an Award of Excellence for the first time in the Society for News Design’s Best of News Design competition. The award, in the News Design/ Business Page category, was for “Flocking home to the D,” a front page on the 2017 Detroit Homecoming event. Freelance illustrator Stacy Innerst and Crain’s Creative Director David Kordalski collaborated on the work. SND’s competition is open to papers around the globe.

BLOOMBERG

Dave Brandon, chief executive officer of Toys R Us Inc., speaks during an interview at a Toys R Us Inc. store in Secaucus, New Jersey, in 2016.

Brandon’s Toys R Us gig extends losing streak D

avid Brandon is on a losing streak. His failure to rescue troubled Toys R Us seems likely to end in liquidation of the toy chain’s U.S. assets. The chain’s owner, Bain Capital, brought in Brandon as Toys R Us CEO in 2015 to make its on- and off-again initial public offering a reality — because he’d done it before. The job followed his five years as athletic director at the University of Michigan ended with his resignation in 2015, amid a furor over flagging success on the football field, unhappiness with certain business moves, and the university’s handling of a potential concussion to football player Shane Morris. Brandon spent 1999-2010 as CEO of Ann Arbor-based Domino’s Pizza Inc., and led a turnaround. Bain had paid Domino’s founder Tom Monaghan $1.1 billion in September 1998 for the company, later hiring Brandon, who had been running Livonia-based direct-mail giant Valassis Communications Inc. since 1989. His time at Valassis included the firm’s 1992 initial public offering — something of interest to Bain because its core business strategy is buying

companies and then later selling them for a lot more money. Brandon led Domino’s to an IPO in 2004 and led its now-famous ad campaign about reworking the brand’s “cardboard crust.” Bain and other investors took an $897 million Domino’s dividend in 2007, following its IPO in 2004. The pizza giant later became the largest pizza company in the world under Brandon’s successor and fellow UM graduate Patrick Doyle. Toys R Us was a harder fix, however. Despite being loaded with debt — Bain did a $7.5 billion leveraged buyout of the retailer in 2005 — Toys R Us was billed as a real IPO candidate in 2010. Investment banks were hungry to handle the IPO, which they expected to be large. In an email to colleagues, an analyst at investment bank Needham & Co., after learning it was trying to handle the IPO, famously wrote “I would crawl on broken glass dragging my exposed junk to get this deal.” But the IPO never happened and Toys R Us hasn’t turned a profit since 2013. It filed for bankruptcy in September.

KIRK PINHO

Join Crain’s real estate insider Kirk Pinho and a group of powerhouse experts as they share perspectives on the future of Detroit’s real estate market, what factors are impacting development in the area and how changes in the market can directly affect your business.

Thursday, March 22

8-10:30 a.m. Garden Theater, Detroit Individual ticket: $80 Reserved table of 10: $850

PANEL 1: FOLLOWING (AND ATTRACTING) THE MONEY Downtown Detroit’s resurgence is news everywhere from the New York Times to CNBC. But it still lags other cities in outside investment from REITs, hedge funds and others with deep pockets. What will it take to get Detroit to the next level? PANELISTS:

*This special discount is only available to young professionals ages 21-35. You may be required to show ID at the event.

Sonya Mays, president and CEO, Develop Detroit Inc.

Are you a Crain’s Detroit Member? Email us at cdbevents@crain.com to receive your individual ticket discount.

Clifford Brown, managing partner, Woodborn Partners LLC

Young Professional (30% Off) $56

Dennis Bernard, founder and president, Bernard Financial Group Dan Mullen, president, Bedrock LLC

PANEL 2: THE BIG PICTURE: ECONOMIC OUTLOOK FOR DETROIT COMMERCIAL REAL ESTATE An economic outlook for Detroit’s real estate market: What are the economic issues that will affect the region? Is it purely the performance of the automotive industry, or have we moved beyond that? What other outside factors will play a role? PANELISTS:

Keona Cowan, senior vice president, Invest Detroit Paul Traub, senior business economist, Federal Reserve Bank of Chicago, Detroit branch