Crain's Detroit Business, April 23, 2018 issue by Crain's Detroit Business

Garlin Gilchrist II could be the Democratic answer for lieutenant governor

List: Staffing service companies Page 15

APRIL 23 - 29, 2018 | crainsdetroit.com

Page 4

TECHNOLOGY

THE ROBOTS ARE COMING. REALLY. Robotics program taking root in talent pipeline By Chad Livengood

FIRST Championship

Nine years ago, Samia Rahman and her classmates from the all-girls Detroit International Academy demonstrated the robot they built through the FIRST robotics program to DTE Energy employees during their lunch hour at the energy company’s downtown offices. As captain of the robotics team, Rahman had to stand before the DTE employees and explain how they built the machine — and make a business case to the company that financially sponsored her team, the Pink Panthers. After the demonstration, a DTE manager approached the team’s mentor and inquired about Rahman and whether she would be interested in a summer internship. “We had business cards, of course, being a high school student,” said Rahman, who handed the DTE manager her contact information.

What: World championship competition of the FIRST Robotics program.

clivengood@crain.com

EDUCATION

Where: Cobo Center and Ford Field, Detroit When: Wednesday-Saturday Who: More than 40,000 program participants More info: www.firstchampionship.org

Rahman has been in and around DTE ever since, interning at the company throughout college and becoming a full-time operational analyst after getting an engineering degree from the University of Michigan. Her exposure to one of Detroit’s largest employers came solely through FIRST Robotics, a 30-yearold organization that has turned robot-building into a team sport in high schools across Michigan. SEE ROBOTICS, PAGE 18

TRANSPORTATION

Project Destined teaches Car ‘subscriptions’ could real-world business experience make ownership obsolete Need to know

 Downtown Detroit hotel expected to undergo a transformation  Holiday Inn Express & Suites Downtown Detroit is the latest investment for Project Destined

By Kirk Pinho kpinho@crain.com

A downtown Detroit hotel in a key location has changed hands and is expected to undergo a transformation into a boutique hotel in the next 12-18 months. The Holiday Inn Express & Suites Downtown Detroit is also the latest investment for Project Destined, an effort that provides high school students in Detroit — along with a handful of other cities in separate but similar efforts — with real-world real estate and business experience by crainsdetroit.com

immersing them in the industry, from its beginning phases like deal sourcing and property acquisition all the way through completion of a renovation or redevelopment project. New York City-based Glenmont Capital Management along with two other out-of-state investors, Project Destined cofounders Cedric Bobo and Fred Greene, bought the 241room hotel and Washington Boulevard and Michigan Avenue last week for an undisclosed price. SEE PROJECT, PAGE 18

Vol. 34 No. 16 $5 a copy. $169 a year.

NEWSPAPER

By Dustin Walsh dwalsh@crain.com

Two Detroit startups are taking the traditional car ownership model and flipping it on its hood. Startups Condor Mobility LLC, operating as Condor Detroit, and Mobiliti LLC are launching vehicle subscription programs that promise a speedier, more flexible experience for their members, who pay a flat monthly fee — insurance and maintenance included — to drive a new or used car

whenever they want, for as long as they want. It’s not a new idea. Seven automakers, mostly luxury brands, have launched their own vehicle subscription programs, which have cropped up in most major cities and favor function over formality. But Condor and Mobiliti plan to use the auto dealer network to their advantage to take on their automaker rivals in the still-unproven market.

EACH WEEK DON’T MISS OUT ON CRAIN’S SPECIAL REPORT!

SEE CARS, PAGE 20

Need to know  Detroit-based startups are launching car subscription services  Business model will build partnerships rather than compete with dealers

018 S I N E S S // A P R I L 2 3 , 2 CRAIN’S DETROIT BU

FOCUS

FINANCE

Growth capital options exp beyond traditional bank le By Tom Henderson thenderson@crain.com

FINANCE, Page 8

BROUGHT TO YOU BY:

GETTY IMAGES/ISTOCKPHOTO

family offices More family wealth stays local with By Tom Henderson thenderson@crain.com

Call it the rise of the family office.

Wealthy families in southeastern inMichigan are increasingly hiring vestment professionals and setting up their own offices to vet business deals instead of investing passively by writing checks to wealth management firms or private equity companies. “A lot of money was built by people

Need to know

Number of local family offices has grown significantly in past 15 years  Family firms are recruiting top talent from New York and Chicago



Experts say strong M&A market is creating more investment businesses



cago. It was not invested locally,” said of Scott Eisenberg, managing partner the Birmingham-based investment banking firm of Amherst Partners

recruiting investment professionals here from New York and Chicago, places that once viewed southeastfor ern Michigan as a nondestination

finance. Birmingham-based Simon Holdings Group, for example, has recruited two advisers from Chicago and currently is recruiting two more outof-town professionals; Bloomfield Hills-based O2 Investment Partners LLC has grown from two investment professionals when it was launched ad-

David Berman was an investment In this package banker at Ziegler, a Chicago-based  More family wealth stays local with investment banking firm that helped family office. This page broker the sale of Mitchell’s former company in 2014, and now is a man-  Growth capital options expand beyond aging partner at Lorient, which was traditional bank lending. Page 9 named for the beach on St. Barts  Why the family office is on the rise. where they went to celebrate the sale toPage 10 and decided to go into business gether. In 2016, Berman was named one of for serve as a good source of talent Crain’s Twenty in their 20s. Sifamily offices such as Lorient and “We’re recruiting top investment mon Holdings. talent from New York. That’s easier oming

an inHopCat is the poster child for how choices creasing variety of flexible financing in need of are available to business owners dicash, according to Gary Lewis, a managing bankrector the Southfield-based investment ing firm Cascade Partners LLC. and growHopCat is the name of the popular around the ing chain of craft-beer restaurants BarFly state owned by Grand Rapids-based fueled by a Ventures LLC — a growth now being $25 million investment arNeed ranged by Cascade in 2015. That money, from two to know Texas companies, Congru “Abundance of ent Investment Partners capital” available and Main Street Capital for business Corp., financed a plan to owners seeking grow HopCat by six new growth capital restaurants a year for six  Business years and was honored as development the growth capital deal of corporations, the year at the 2016 annual fundless sponsors awards of the Detroit-area provide more chapter of the Association flexible options for Corporate Growth. BarFly has set up sepa Huron Capital rate LLCs in an expanding adds a “flex-equigeographical reach, includty” option that ing Cincinnati, Columbus, provides Kansas City, Mo., Lincoln, investment Neb., Louisville, Milwauwithout taking and controlling interest kee, Nashville, Omaha Pittsburgh. “HopCat had grown solution nicely and needed a flexible financing said Lewthat traditional lenders couldn’t do,” money is. BarFly founder Mark Sellers wanted outlet costs new each — business the grow to minimal about $3 million to open — but with dilution of his equity. because Traditional bank lending was out for an HopCat didn’t have enough assets equity was old-fashioned bank loan. Private inout because it typically wants a controlling terest. proposals Cascade sent out about 200 letters of inaround the country, got about 15

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

MICHIGAN BRIEFS

INSIDE

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

St. Clair theater arts festival idea gets a boost

A $5 million campaign to establish a destination theater arts festival along the St. Clair River and drum up tourism in the Blue Water area received a major boost Wednesday. The Riverbank Stage Festival and Performing Arts Academy received a $1 million challenge grant from the St. Clair County Community Foundation to support the plan for a multi-month festival spanning two cities and seven miles along the river. The objective is to create an annual showcase of top-notch theater production, like that of the internationally renowned Stratford and Shaw festivals in Ontario, said Kathy Vertin, founder and executive director of Riverbank Theatre and Performing Arts Academy. She founded the academy in Marine City five years ago, around the same time she launched her first theater, The Snug, after paying $130,000 for the building and $120,000 for renovation. Not long after, she opened a second, larger theater. Since then, her ambitions have become grander. Part of making the festival happen is renovating the closed Riverview East High School building in St. Clair for use as a 500-seat performance venue and headquarters for the

academy and the festival. The performance grant, made on behalf of the Franklin H. Moore Jr. and Nancy S. Moore Donor Advised Fund, will go toward the project. The challenge part of the grant is that Vertin must raise $2 million in the next year to reach the $3 million restoration cost for the school. If the funds are not raised in a year, the $1 million grant goes back to its donors.

CLASSIFIEDS

DEALS & DETAILS

KEITH CRAIN

OPINION

OTHER VOICES

PEOPLE

RUMBLINGS

WEEK ON THE WEB

den, who wiped the spray of rain from her eyes as she made her way down Boylston Street alone. “It’s good to get it done.”

Schuette to take action against company

With oil again flowing through sideby-side pipelines beneath the waterway that connects Lake Huron and Lake Michigan and inspections of damage to Line 5 and electric transmission lines underway, Michigan Attorney General Bill Schuette said last Tuesday he intends to bring civil action against the company believed to have caused the damage earlier this month, the Associated Press reported. Schuette said in a news release last week that he has notified VanEnkevort Tug and Barge Inc., whose ship he said dragged an anchor across bottomlands and submerged electric and petroleum pipelines in the Straits of Mackinac, causing the release of a hazardous substance and potentially harming aquatic life and the lakebed. The Department of Attorney General determined the VanEnkevort-owned Clyde S. VanEnkevort passed through the Straits shipping

CALENDAR

The Iron Belle Trail will traverse Michigan.

channel at the time the American Transmission Co. cables and Enbridge Line 5 pipelines were damaged April 1, the release stated. VanEnkevort spokesman Darrell Wilson said a VanEnkevort tug and barge were in the area that day and the company is cooperating with the investigation.

Michigan resident wins Boston Marathon

Desiree Linden of Michigan splashed her way through icy rain and a near-gale headwind to win the Boston Marathon last Monday, the first victory for an American woman since 1985, the Associated Press reported.

MICHIGAN DEPARTMENT OF NATURAL RESOURCES

Linden, a California native who splits time between a home in Washington Township and a cottage on Lake Charlevoix in northern Michigan, trains with the Hanson-Brooks Distance Project, based in Rochester Hills, co-sponsored by the Hanson’s Running Shop chain. The two-time Olympian and 2011 Boston runner-up pulled away at the end of Heartbreak Hill to win in 2 hours, 39 minutes, 54 seconds. That was more than four minutes better than second-place finisher Sarah Sellers — one of seven Americans in the top 10 — but the slowest time for a women’s winner in Boston since 1978. “It’s supposed to be hard,” said Lin-

Iron Belle Trail secures $10.5 million

Hiking and bicycling routes that will traverse Michigan have secured $10.5 million in private donations, The Associated Press reported. Gov. Rick Snyder on Tuesday shared the fundraising update on the Iron Belle Trail at an Ann Arbor event. He was joined by philanthropists including officials with the Ralph C. Wilson Jr. Foundation, which has pledged roughly $5.5 million for trail design and development in Washtenaw County and Detroit. A group has been formed to help raise an additional $155 million in private money. The Iron Belle Trail also has received federal, state and local grants, as well as money from a Michigan Department of Transportation-administered program.

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

NONPROFITS

New Paradigm for Education looks to expand by fall 2020 By Sherri Welch swelch@crain.com

New Paradigm for Education, a nonprofit operator of high-performing charter schools in Detroit, is looking to expand by taking on management of low-performing charters in the city. With a $5 million, three-year grant secured last year from the Detroit Children’s Fund, New Paradigm has set a goal to double the number of students it serves in the city to 5,000 by the fall of 2020. Following the addition of about 100 seats at the six schools it now operates, most of its near-term growth will come Ralph Bland: through school Looking at turnaround efopportunities. forts, and in the Need long term, to know through opening  Nonprofit new schools, operator of CEO Ralph Bland high-performing said. charter schools in “Right now, Detroit is looking we’re just lookto expand ing at opportunities that may  Has set a goal to present themdouble the number selves,” he said. of students it “We want to serves make sure we  New Paradigm is can see success in the process of at the end of the responding to tunnel...(to have) requests for the autonomy to proposals implement our model and community support.” New Paradigm is in the process of responding to requests for proposals issued by three undisclosed charter schools looking for new operators. As it works to secure new operating contracts, New Paradigm has made investments to develop administrative leadership and expand back office operations for two additional schools, Bland said. Much of the DCF grant will also be aimed at strengthening New Paradigm’s current operations through development of teacher and administrator talent and bolstering its academic systems, outreach to parents and governance. To run a good school, you have to have quality leaders, because they drive high expectations and outcomes at schools, Bland said. “It starts with that very intense tone ... from that principal or school leader to really push the teachers and students to get the job done.”

HEALTH CARE

Beaumont, Henry Ford rethink the ICU By Jay Greene jgreene@crain.com

Nicholas Tepe, M.D., had a $10 million charitable gift and ideas from doctors, nurses and family members. The mission? Transforming Beaumont Hospital’s surgical intensive care unit in Royal Oak to take advantage of the massive amounts of data contained in patients’ electronic medical records and to make the 20bed unit more friendly for both families and staff. As a cardiovascular surgeon and director of the newly renovated and

Need to know

Beaumont used a $10 million donation to redesign its surgical intensive care unit in Royal Oak 

 Patients, family members, doctors, nurses suggested changes intended to improve outcomes, satisfaction  Henry Ford neurologist Stephan Mayer wants to use technology to better predict potential negative events

Nicholas Tepe: Beaumont

expanded 20,000-square-foot Sara and Asa Shapiro Heart and Vascular Intensive Care Unit, Tepe also knew

that the ever-flowing live patient data coming from a number of monitoring machines tracking patients need-

Stephan Mayer: Henry Ford

ed to be better organized and presented for doctors and nurses. Tepe and other surgeons such as Marc Sakwa and James Robbins felt they could assess patient conditions much more quickly not by just eyeballing patients on rounds and checking medical charts, but by having the most important and critical data on each patient presented on ICU monitor screens outside each room — in the way clinicians think — without requiring a computer clickfest. SEE ICU, PAGE 21

SPORTS BUSINESS

Warren custom golf cart maker crafts Detroit Tigers’ bullpen cars

One of the bullpen carts recently delivered to the Detroit Tigers shown under construction at Warren-based Michigan Golf Cart. MICHIGAN GOLF CART

By Bill Shea bshea@crain.com

Justin Lokotar and his colleagues had just three weeks to transform a couple of stock golf carts into custom-designed bullpen cars in the shape of 1949 Mercury Eight coupes for the Detroit Tigers. The team unveiled the two-seat cars on Friday for their game against the Yankees at Comerica Park, marking the Tigers’ nostalgic return to a baseball fad that peaked in the 1970s but is slowly becoming a trend again.

Lokotar, 26, is general manager for his dad Keith Lokotar’s Warren-based Michigan Golf Cart Sales, which is a subsidiary of Keith’s Auto & Golf Cart Sales & Service but now has grown to become almost the entire business over 20 years. They got the request from the Tigers in March with the short turnaround time for delivery. No problem. The firm, with a 25,000 square-foot work and showroom space along Mound Road, does 10 to 15 custom golf carts an-

nually atop sales of about 300 to 500 units. Lokotar said the company has provided carts for the Detroit Red Wings (owned, like the Tigers, by the Ilitch family), the Detroit Lions and Woodward Dream Cruise, and for celebrities that he said he cannot disclose. The Ilitches are a longtime client, so it made sense they’d turn to Michigan Golf Cart Sales for the bullpen cars. “We’ve done work for them before. They were looking for some-

thing unique,” Lokotar said. “They wanted something different and eye-catching.” What they wanted was as close to a ’49 Mercury as possible, with Ilitch-owned corporate sponsor MotorCity Casino’s name and flame paint job adorning the carts. The home team’s cart, in its blue base color, has the Tigers’ Old English D emblazoned on the side and an orange flame job. The visitor car is black with yellow flames. SEE CARS, PAGE 17

SEE EDUCATION, PAGE 17

MUST READS OF THE WEEK Headquarters plans in Auburn Hills

What business is really all about

No decision yet on Major League Soccer in Detroit

Tectonics, WABCO announce plans for HQ buildings in Oakland County community. Page 13

Managing editor Michael Lee got a taste of covering the world of business and never looked back. Page 6

MLS owners met last week, but didn’t announce their choice of city for the next expansion team. Page 22

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

Garlin Gilchrist II is director of the Center for Social Media Responsibility at the University of Michigan School of Information.

JEFFREY M SMITH/UNIVERSITY OF MICHIGAN

A true Detroit comeback story

M Forbes Best Professional ZĞĐƌƵŝƟŶŐ Firm in 2017

6HUYLFH 2௺HULQJV • Talent Development & Delivery • Data Analytics • Cyber Security Services • Application/Software Development • Testing/Management Services • Connected Vehicle/Embedded Systems

Michigan | Washington D.C. | Florida | India optechus.com 313-962-9000

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

LISTEN TO WJR 760 AM LIVE ON: Tuesday, April 24, 2018, 7– 8 p.m. For more information and to listen to past shows visit:

http://chmfoundation.org/caringforkids/ Brought to you by:

ichigan Democratic Party leaders are in the midst of a talent search for a lieutenant governor candidate who can bolster former state Sen. Gretchen Whitmer’s chances of claiming the governor’s mansion should she prevail in the August primary. And the political party that has relied heavily on African American voter support at the polls for decades is scouting for a young black leader who could energize younger voters, particularly those of color. The Democratic Party’s bench is not very deep in this respect. There are some old guard politicians who would help draw older black voters to the polls, but not necessarily inspire younger ones. Wayne County Sheriff Benny Napoleon, who lost the 2013 mayoral election to Mike Duggan, has expressed interest in the job. But Napoleon’s name surfacing last year in a Detroit News report on an FBI corruption probe’s list of “target subjects” has raised cause for concern among Democratic Party leaders. Even if Napoleon can get the feds to clear his name, the TV attack ads from the Republican gubernatorial nominee and allied groups will practically write themselves. Wayne County Executive Warren Evans is part of Whitmer’s running mate search team, seemingly eliminating himself from the mix. Allies of Evans doubt he’d want the job. For starters, he’s got a pretty good thing going rebuilding a county government that was whistling by the bankruptcy court graveyard just a few years ago. Secondly, it’d be a big pay cut for Evans — a 28 percent pay cut, to be exact. The lieutenant governor’s annual salary is $111,510, a factor that may limit the pool of potential leaders. Evans’ annual salary as chief executive of the state’s largest county is $154,521. The Democrats’ search for a next-generation leader who can help Whitmer, a Lansing insider who’s still not well known in Detroit, may lead to Corktown, where a 35-year-old computer engineer is putting down roots in his native city.

CHAD LIVENGOOD clivengood@crain.com

Garlin Gilchrist II took many by surprise last fall when he mounted a grassroots campaign to unseat City Clerk Janice Winfrey. While his effort came up 1,482 votes short, Gilchrist’s ability to marshal support and talk about modernizing a city department that has long been viewed as a source of governmental ineptitude did not go unnoticed. Gilchrist is a technocrat, of sorts, by training. He studied computer science engineering at the University of Michigan. Like many young minds his age, Gilchrist left the state in the mid2000s after college during Michigan’s decade-long recession for better career opportunities, spending four years in Redmond, Wash., working for software giant Microsoft. Then he changed directions and got into political advocacy and moved to Washington, D.C., where he spent four years organizing national campaigns for MoveOn.org. Gilchrist also represents a growing group of black Detroiters who have returned home to plant a stake in the city. While working in Washington, Gilchrist organized a group of expats called Detroit Diaspora to create a network of Detroiters living elsewhere in the country that would focus on getting back to the city. He made his move in July of 2014, joining the Duggan administration under Chief Information Officer Beth Niblock to lead a team focused on overhauling the city’s archaic technology systems coming out of the bankruptcy. As director of innovation and emerging technology, Gilchrist

created the Improve Detroit smartphone app for citizens to report trash-dumping, broken traffic lights, clogged street drains and other municipal problems that for a long time had become accepted norms of living and working in the state’s largest city. He also played a major role in developing the demolition-tracking software that’s brought accountability and transparency to city government — and given investors a strategic roadmap for taking bets on the city. As a child, Gilchrist’s parents moved to Farmington in 1989 so he could get a better education than Detroit Public Schools offered. It’s not an uncommon story of middle class black flight from the city. Now as a father of 4-year-old twins, Gilchrist is sending his kids to the city’s public schools next fall. And he’s recently gone to work for his alma matter leading a newly created Center for Social Media Responsibility within UM’s School of Information. Instead of running his research operation in Ann Arbor, Gilchrist has planted himself in UM’s Detroit Center in the heart of Midtown. Set aside the narratives about Detroit that have been largely crafted by outsiders. This is a real Detroit comeback story. And it could be a compelling one for Democrats to establish a voice for Detroit in Lansing that’s been arguably missing for at least a generation. For his part, Gilchrist is not ruling out another run for public office and is aware that his name has been floated in Democratic political circles for the lieutenant governor’s post. “I’d be open to considering elective office again,” Gilchrist told me. “What’s more important is I came home because I thought that I learned a lot and I’ve experienced a lot in my career in other places and that those tools are best applied in the place that I actually care about. And that’s Detroit and that’s Michigan." Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

OPINION COMMENTARY

What business is really about

t’s all about people. That’s how I view what we do at Crain’s Detroit Business. Businesses aren’t collections of dollar signs and balance sheets and financial statements. At heart, they’re just people banded together to accomplish more than they can by themselves. But I’m getting ahead of things. Let me introduce myself: I’m Michael Lee, the managing editor here at Crain’s. What I aim to accomplish here is exactly what you just read above: Keeping our team chugging together to get you more news and insight than you can get on your own. Though you haven’t seen my name or my photo very often in this publication over the years, I’ve been at Crain’s for 11 years over two separate tours of duty. The story of my life is rooted strongly in Detroit’s business community. My late father, Jack, for years owned a shop that built industrial control panels — in the 1970s, pushbutton panels connected to huge banks of wiring encased in sheet metal. The kind of job shop tied to the auto industry that still fills industrial parks across our region. His story was the story of many entrepreneurs, especially in those years. His family transplanted from western Kentucky tobacco country to Detroit during World War II, drawn by the promise of jobs. I never had any interest in going into that family business, and eventually my dad sold it off and retired. But the lessons of growing up around a business never fade. The sense of not just being responsible for yourself, but responsible for those who work around or for you. The benefits of success, of course. But also the rough times when the boss doesn’t take a paycheck. I didn’t set out to be a business journalist. I wanted to be a sports writer. But once I got a taste of covering the world of business, the world of how the world really works and how things really get done, I never turned back. I find that plenty of the people in

MICHAEL LEE malee@crain.com

The lessons of growing up around a business never fade. The sense of not just being responsible for yourself, but responsible for those who work around or for you. my line of work have stories like these. Our newsroom is filled with the kids of fathers and mothers who were contractors, auto-shop owners, even a corned-beef king. That experience gives you an inherent appreciation for what business owners and executives live day to day. It makes us, frankly, better at our jobs. Those are the lessons that I try to keep in mind when I do my job here at Crain’s — that our readers are people who are influential, even powerful. But that they also bear great responsibilities. It’s our job to help them with those responsibilities. We think that by helping you succeed, we can help make the world a better place. Now that I’ve told you my story, I hope to use this space in future weeks to tell yours. Hit me up. Michael Lee is managing editor of Crain's Detroit Business. He can be reached at malee@crain.com or 313-446-1630.

LETTERS

CEOs should foot mass transit bill

To the editor: Interesting that CEOs of major local corporations are touting the lack of a tri-county mass transit super system as the major deterrent to business investment in the area (“CEOs push for vote on regional transit,” April 16 issue). A simple solution is to have these CEOs pledge $100 million each from their respective corporations, set the example, avoid the politics, and move on quickly. Surely, the financial payback to their corporations will be swift, judging by the intensity of their lobbying. Why ask the residents to pay for it? Private investment is very efficient. It always goes to the greatest need and payback. Many claim transit was Amazon’s reason for fleeing the area. Has any-

one seen Amazon’s objective criteria, and its scoring of the area against those criteria? Could it possibly be that the quality of the K-12 school system, appearance of neighborhoods within a five-mile radius of the proposed site, road conditions, number of job applicants who pass drug screening, number of qualified job seekers and other similar criteria were dominant? If transportation were the dominant deterrent, Amazon surely could have purchased a fleet of buses to transport its workforce, as Google reportedly does in California. This cost would have been trivial for Amazon. No, not all residents wish to pay yet another tax to subsidize others’ transportation wishes. If the M1 rail system is an example of what the planners hold as a shining example of mass transit’s benefits, then voters rightfully should de-

company to receive the Gertrude Crain Award. I know that my mom would be very proud. Mary will be honored at a luncheon in her honor, and I am sure that all of us in Detroit and her friends everywhere join in the celebration. After she graduated from Grand Valley State University, an institution where she is now a member of the board of trustees, she worked her way east and ended up in Ann Arbor, where we at Crain’s discovered her and convinced her to join us. Here, she has had an impact for many years, succeeding Peter Brown

as editor and then publisher. She has been a great asset to our company and to our community. I could not be prouder that she now has responsibility for all of Crain’s city publications. It wasn’t that long ago that she was inducted into the Michigan Journalism Hall of Fame, an honor that singles out her impact in the world of journalism. And that’s what the success of our publications has been all about. We believe in news, and Mary Kramer has been a leader. I am proud to have worked with her for all these years.

feat any attempts to expand this example of squandering tax dollars. Sacrificing one lane of Northwestern Highway for a bike lane is yet another example of extremely poor tax dollar investment. I have yet to see a bicycle using this bike lane. Any biker recognizes that this is an extremely dangerous condition for a bicyclist. Residents, by far, wish the roads to be repaired that are in a state of emergency. We do have a rapid transportation medium between Detroit and Ann Arbor — I-96/M-14. Joe Majcher Orchard Lake Send your letters: Crain’s Detroit Business will consider for publication all signed letters to the editor that do not defame individuals or organizations. Letters may be edited for length and clarity. Email: malee@crain.com

It is a fitting tribute E

arly next month, Connectiv, the association of business publishers, will have its annual get-together, in New Orleans. It is always a privilege to realize that they will be honoring my late mother, Gertrude Crain, who was chairman of this company for a couple of decades after my father, the company’s founder, died. Each year they announce the winner of the Gertrude Crain award for women in business media with long track records of accomplishment and service. This year the award will be presented to Mary Kramer, the group

KEITH CRAIN Editor-in-chief

publisher of Crain’s Detroit Business and our other city business publications, and a Crain executive for quite a while. She is the second executive in our

Crain’s Group Publisher Mary Kramer will be honored at a luncheon in her honor, and I am sure that all of us in Detroit and her friends everywhere join in the celebration.

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

What the no-fault debate can learn from mortgage banks

veryone agrees that auto insurance premiums in Michigan are too high, and the premiums in Detroit and several other cities are ridiculously expensive. But recent legislative efforts by Detroit Mayor Mike Duggan and Representative Lana Theis to lower prices by offering reduced benefits options is the wrong direction — as any of the 37,000-plus catastrophically injured Michiganders who have or are receiving auto no-fault benefits and their families will testify. What those survivors and families know — and what Duggan and Theis completely miss — is exactly what the mortgage industry has known for years. If you obtain a mortgage to buy a home, regardless of whether it costs $80,000 or $8 million, you have to buy insurance for the full value of the

OTHER VOICES Tom Constand

home. It makes no difference if the odds of losing that home in a fire, tornado, war, or act of God are unbelievably low; homeowners insurance is still required. And that’s because mortgage com-

panies know that first, if given a choice, most home buyers would buy limited or no coverage because of those perceived low odds; and secondly, low odds or not, horrific events do happen and mortgage banks refuse to be responsible for a homeowner’s lack of foresight. Vehicle accidents that result in a catastrophic injury — the kind of injury requiring millions of dollars in medical, therapeutic, rehab, and caregiver expenses — are rare, yet they happen in Michigan virtually every day. Few of us as individuals can calculate the odds and make an informed decision. Equally few of us will will-

ingly pay thousands for car insurance when we can get less expensive policies with medical benefits that won’t even cover a hospital stay, let alone years of therapy and caregiving. So if Mayor Duggan and Representative Theis succeed and drivers can choose cheaper but ineffective policies, many of us will. And when catastrophic accidents happen, as they invariably will, those unfortunate families will need to declare bankruptcy, go on Medicaid, receive limited care, and let Michigan taxpayers pick up the tab to meet hugely increased Medicaid funding needs. Bringing down the cost of auto premiums is critically important for

the state and Michigan residents, but it’s a process that requires conversation and compromise on the part of all those involved — medical organizations and providers, rehabilitation providers, attorneys and the insurers themselves. Trying to do that with simplistic and misleading legislation not only ignores the lessons learned by mortgage companies, but will further injure accident survivors and families while, in the long run, causing more pain for Michigan taxpayers. Tom Constand is president and CEO of the Brighton-based Brain Injury Association of Michigan.

TALK ON THE WEB

Re: Northville Downs to be redeveloped Sad to see this happening but it was just a matter of time. This will definitely change the fabric of the city. Vita Roney My issue with this is the already overloaded schools in the district. Grandkids are complaining schools are already packed to the brim. Can Northville handle potentially a thousand more kids? I hear they’re eating lunch in the hall at the high school because too many kids. Hopefully there is a plan. Dale Pale Most of that new development is likely apartments, as 48 acres is not room for many homes ... why no cry to save Northville downs as a historic racing site, the last one in Michigan? Simple. It is not the Ambassador Bridge, and another racing site, better and more modern, can be built elsewhere with but a portion of the money no doubt received from whomever purchased the land. But wait! They are building other bridges across the Detroit River, so why is saving the Ambassador bridge relevant again? It all depends on one’s point of view and location and money... diecuts Down goes horse racing (at least here). Great location. William Rauwerdink

Re: Meijer, Kroger double down on self-scan shopping I tried this for a quick shop, picking up a few items only, and it worked fine. Not sure how it will translate to a normal weekly shopping trip though, as that tends to fill the cart and the checkout will be interesting. MarkYTH Send your letters: Crain’s Detroit Business will consider for publication all signed letters to the editor that do not defame individuals or organizations. Letters may be edited for length and clarity. Email: rfournier@crain.com

Now that you’re financially secure, your worries are over. If only. But life’s curve balls don’t give a hoot about net worth. That’s why clients of Greenleaf Trust (with nearly $11 billion in assets under advisement) rely on us for mindful management of wealth that holistically integrates investment performance with tax planning, trusts, risk management, cash flow, retirement, estate planning, charitable giving, assistance to loved ones, and so on. The long-proven success of this approach has little to do with things beyond one’s control, and everything to do with everything else. Peace of mind is closer than you think. Call us.

Client relationships begin at $2 million.

34977 Woodward Avenue, Birmingham, MI 48009 248.530.6200 greenleaftrust.com

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

FOCUS

G b

FINANCE

then

H crea are cash rect ing fi H ing state Ven

Ne to

JJ“A capi for b own grow

JJBu deve corp fund prov flexib

JJH adds ty” o prov inves with cont

More family wealth stays local with family offices

nice that is. B to g abo dilu T Hop oldout tere C arou tent clud stru coll

GETTY IMAGES/ISTOCKPHOTO

By Tom Henderson

In this package

Call it the rise of the family office. Wealthy families in southeastern Michigan are increasingly hiring investment professionals and setting up their own offices to vet business deals instead of investing passively by writing checks to wealth management firms or private equity companies. “A lot of money was built by people who are entrepreneurs. They say, ‘I built money through mergers and acquisitions. I don’t want to be passive and turn over my money to someone else, and only find out quarterly how they are doing,’” said Sam Valenti III, president and CEO of Bloomfield Hills-based Valenti Capital Management LLC, a multifamily office founded in 1998. “The family office fits our time. It speaks to control and independence,” he said. “It always used to be, ‘Take your money to New York.’ Now, much more of it is staying here.” “Mega-wealthy families had access to big name private-equity firms in New York. When they had liquidity events, money went there.

JJMore family wealth stays local with family offices. This page

thenderson@crain.com

ily offices are here compared to 20 years ago, Eisenberg said: “I’ll give you the technical answer. A jazillion more.”

JJGrowth capital options expand beyond traditional bank lending. Page 9

Recruiting top talent

JJWhy the family office is on the rise. Page 10

Not only is more wealth being managed here instead of going to private-equity firms or the wealth-management offices of large banks in New York, but local family offices are recruiting investment professionals here from New York and Chicago, places that once viewed southeastern Michigan as a nondestination for finance. Birmingham-based Simon Holdings Group, for example, has recruited two advisers from Chicago and currently is recruiting two more outof-town professionals; Bloomfield Hills-based O2 Investment Partners LLC has grown from two investment professionals when it was launched in 2010 to eight today, including advisers recruited from Chicago, New York and Denver; Lorient Capital LLC has recruited one of its six investment professionals in Birmingham from New York and another

Need to know JJNumber of local family offices has grown significantly in past 15 years JJFamily firms are recruiting top talent from New York and Chicago JJExperts say strong M&A market is creating more investment businesses

Or to Chicago. It was not invested locally,” said Scott Eisenberg, managing partner of the Birmingham-based investment banking firm of Amherst Partners LLC. “Now, a family sells a company for $50 (million) or $100 million, its engaged family members don’t want to just be ski bums. They want to actively manage their portfolios.” When asked how many more fam-

from Grand Rapids. “Five years ago, it was very tough to recruit people here. Now? People want to come. They see the growth here,” said Sam Simon, founder of Taylor-based Atlas Oil Co. He founded Simon Holdings Group, his family office, in 2013. Not only has Lorient’s founder and managing partner, Mark Mitchell, recruited advisers from other markets, he recruited his co-founder as well. David Berman was an investment banker at Ziegler, a Chicago-based investment banking firm that helped broker the sale of Mitchell’s former company in 2014, and now is a managing partner at Lorient, which was named for the beach on St. Barts where they went to celebrate the sale and decided to go into business together. In 2016, Berman was named one of Crain’s Twenty in their 20s. “We’re recruiting top investment talent from New York. That’s easier with the resurgence of Detroit, and having a great office and great work environment make it easier. A lot easier than I’ve seen it in 20 years,” said Mitchell. Lorient recently moved into

the top floor of the completely renovated Wachler Jewelers building at the corner of Old Woodward and Maple Avenue in downtown Birmingham. He said he expects to add three more people to his deal team by the end of the year, including some from other markets. Kevin Prokop, a managing partner at Detroit-based Rockbridge Growth Equity LLC, said private equity firms serve as a good source of talent for family offices such as Lorient and Simon Holdings. “More professionals are coming out of the private equity space. They like the flexibility of the family office,” Prokop said. That is especially true for those leaving very large PE firms where they might be working in cubicle farms with narrowly defined job duties. At family offices, they can be more entrepreneurial, more hands-on in managing portfolio companies and often work in spaces like Mitchell’s and Simon’s where no expense has been spared on decor and creature comforts. SEE FAMILY, PAGE 10

Hop BarF

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

SPECIAL REPORT: FINANCE

Growth capital options expand beyond traditional bank lending “It’s such an exciting time. There’s an abundance of capital and more ways to fit the needs of the owner.”

By Tom Henderson thenderson@crain.com

HopCat is the poster child for how an increasing variety of flexible financing choices are available to business owners in need of cash, according to Gary Lewis, a managing director the Southfield-based investment banking firm Cascade Partners LLC. HopCat is the name of the popular and growing chain of craft-beer restaurants around the state owned by Grand Rapids-based BarFly Ventures LLC — a growth now being fueled by a $25 million investment arNeed ranged by Cascade in 2015. to know That money, from two JJ“Abundance of Texas companies, Congrucapital” available ent Investment Partners for business and Main Street Capital owners seeking Corp., financed a plan to growth capital grow HopCat by six new restaurants a year for six JJBusiness years and was honored as development the growth capital deal of corporations, the year at the 2016 annual fundless sponsors awards of the Detroit-area provide more chapter of the Association flexible options for Corporate Growth. JJHuron Capital BarFly has set up sepaadds a “flex-equirate LLCs in an expanding ty” option that geographical reach, includprovides ing Cincinnati, Columbus, investment Kansas City, Mo., Lincoln, without taking Neb., Louisville, Milwaucontrolling interest kee, Nashville, Omaha and Pittsburgh. “HopCat had grown nicely and needed a flexible financing solution that traditional lenders couldn’t do,” said Lewis. BarFly founder Mark Sellers wanted money to grow the business — each new outlet costs about $3 million to open — but with minimal dilution of his equity. Traditional bank lending was out because HopCat didn’t have enough assets for an old-fashioned bank loan. Private equity was out because it typically wants a controlling interest. Cascade sent out about 200 proposals around the country, got about 15 letters of intent and narrowed it down. The final deal included just $1.3 million in equity with the rest structured as mezzanine debt, which is not collateralized by assets and carries a higher

Gary Lewis

rate of interest than typical secured bank debt. “It’s such an exciting time. There’s an abundance of capital and more ways to fit the needs of the owner,” said Lewis. In 2014, HopCat tapped into Plymouth-based Grow Michigan LLC for mezzanine debt to fund openings in East Lansing, Ann Arbor and Detroit. Lewis said funding options for business owners have grown sharply since he began his career in 2008 with the Chicago-based private equity firm of Goense Capital Partners. He said traditionally, if an owner needed money to grow the business or buy out a partner, it could sell a majority stake to a private-equity company or go to a bank for a traditional loan based on assets. But if you were a fast-growing company without a lot of assets, banks weren’t interested in you, and if you wanted to sell off a chunk of your company but retain control, neither was private equity. “If you’re a business owner, there are just so many more options available. ... People think they need to sell if they have a liquidity problem, but there’s a huge supply of nontraditional lending and structured equity providers, such as private-equity firms going wider, with new slices of the pie, which is what Huron Capital has done,” he said, referring to Detroit-based Huron Capital Partners LLC.

There’s a better way to make your money grow. Seed your savings in a Lake Trust IRA.

Huron adds investing model Huron, which was founded in 1999 and is annually the state’s most active PE firm, has raised more than $1.7 billion in six funds. The largest fund of $575 million was raised last year, as was its sixth fund, the one Lewis was referring to. SEE OPTIONS, PAGE 12

HOTO

enog at Mainghree the rom

tner wth rms for d Si-

ming They ffice,”

hose here bicle du-

more n in and ell’s has ture

E 10

Visit laketrustplanning.org for more details.

CRAIN’S DETROIT BUSINESS

HopCat is the name of a chain of craft-beer restaurants around the state owned by Grand Rapids-based BarFly Ventures LLC founded by Mark Sellers.

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

SPECIAL REPORT: FINANCE FAMILY Why the family office is on the rise FROM PAGE 8

By Tom Henderson

Smaller fortunes, more expertise Cliff Roesler, a managing director at the Birmingham investment-banking firm of Angle Advisors LLC, said that while there are no hard statistics about family offices in southeastern Michigan, his guess is that they have grown in number in southeastern Michigan from about 20 15 years ago to more than 100 today. Originally family offices were for the extraordinarily wealthy — the Fords, Fishers and Ralph Wilsons of the world. Now, families with far smaller fortunes are running their own investment businesses. Roesler said his firm is in the process of closing on one deal thanks to family-office support. “It’s a Michigan company being sold, and the buyer has raised funds from family offices,” he said. Gary Lewis, a managing director at the Southfield investment banking firm of Cascade Partners LLC, credits the strong valuations for mergers and acquisitions for the proliferation of family offices. “The M&A market over the last eight years has been particularly strong. We’ve had a large number of liquidity events that have generated a lot of capital,” he said. “People selling companies have strong domain expertise and experience doing day-today business operations. They want to invest in businesses they know.” Because many family offices are funded by wealthy entrepreneurs who have successfully grown their own companies, they are willing to invest in startup or early-stage com-

“VCs have shied away from medicaldevice and medicaltech companies in recent years, and that’s where family offices have really stepped in.” Chris Rizik

panies that venture-capital firms have grown more cautious about over the last decade. “Family offices have certainly taken on an increasing role in investments in startup companies,” said Chris Rizik, CEO and fund manager of Ann Arbor-based Renaissance Venture Capital Fund, an affiliate of the Business Leaders of Michigan, which has raised two funds totaling $124 million and filed a form with the Securities and Exchange Commission last year saying it had raised $52 million of a planned third fund of $120 million. Rizik invests in venture capital firms willing to invest in Michigan. “VCs have shied away from medical-device and medical-tech companies in recent years, and that’s where family offices have really stepped in,” he said. He said some of the money invested in his funds have come from family offices, though he isn’t at liberty to name them.

Local family offices Lorient is one of those family offices willing to invest in early-stage

thenderson@crain.com

Sam Valenti III: Family office “fits our time.”

Chris Rizik: Family offices’ role increases.

medical-device companies. Mitchell founded Lorient with a commitment of $250 million of his own money in 2015. The year before he sold his majority interest in U.S. Medical Management, a Troy-based home-care company he founded in 1993, to St. Louis-based Centene Corp. for $200 million. Lorient has a flexible investment strategy, acting as a private-equity investor to buy both majority and minority stakes in established companies and as a venture capital firm backing startups. The first VC-type investment was for $3.3 million for First Sense Medical LLC, a Pontiac-based company that hopes to use infrared thermal imaging to detect breast cancer earlier and more reliably than mammography. It has a Michigan and Midwest focus, but also has an operating partner in New Jersey and one in New York. “I had a large liquidity event, so now I’m doing my next career,” Mitchell told Crain’s after launching Lorient. “The thought was, how can we be value-added and invest smart family money? We want to help provide the bridge to get companies to the next level.” Mitchell said his investment team is made up of people with C-suite experience. “All of our people have been out there as operators. We’re very hands-on.” He said he has been sourcing deals with other family offices, including Birmingham-based Simon Holdings Group, but has yet to do a deal in partnership with them. “We will,” he said. Simon, who founded Atlas Oil Co. in 1985 with a single truck and a credit card and built it into a $2 billion-ayear fuel wholesaler, has built a network of six investment funds under the brand of Simon Holdings. The group operates as a family office for Simon and five other local wealthy local families, who have requested anonymity. Simon is looking to expand his network of family offices far beyond southeast Michigan. Joining the firm as a consultant “to help us connect the dots with other family offices nationally,” Simon said, is Katherine Hill Ritchie, a veteran of the family office industry in New York who in January became director of strategic development at the Cleveland-based Nottingham Spirk family office. “She’ll help source deals and bring in minority co-investors,” said Simon. His funds have raised $130 million in committed capital and invest in a wide range of industries and companies, some in Simon’s sweet spot of oil distribution and service-station management, others as far from that as managing digital content for political candidates and providing modular classrooms for schools. Simon had some earlier investments separate from Atlas but began the family office in earnest in 2013. “We don’t invest in companies that

According to local investment bankers, wealth managers and executives at family offices, there are several reasons for the proliferation of such offices in the last 10 years: J A lot of wealth has been created by business owners who have sold companies as valuations soared post-Great Recession. Experienced at running businesses, they want to have an active role in deciding where to put their money and helping manage businesses their offices invest in. J Returns from private-equity funds have been flat in recent years, according to a 2016 report by the Washington-based Center for Economic and Policy Research titled “Are Lower Private Equity Returns the New Normal?” While the average private-equity fund outperformed the S&P 500 by about 2 percent, that number was driven by the top quartile of PE funds. The majority did not outperform the S&P 500. J Wealth managers and private-equity funds invest in a broad variety of

industries, some of which a wealthy investor has no interest in or may even actively dislike. Family offices allow investments to target areas of interest and expertise. J A proliferation of private equity firms, many of them with large new funds that require more investment managers, has diluted the talent pool. According to a local investment banker, “private equity is no longer the pot of ultra-experienced private deal doers, it is now a bastion of MBAs who want everyone to think they are super-smart investors, but most lack experience.” He asked not to be named for fear of angering potential future investors in his deals and made a point to say that his criticism did not apply to Detroit-based Huron Capital Partners LLC, the state’s most active PE firm. J The cost of investing in private-equity funds, which traditionally charge overhead fees of 2 percent of the money invested plus 20 percent of profits, is high. For an investor with $50 million to invest, that minimum fee of $1 million is more than enough

Sam Simon of Simon Holdings: “We offer experience. We’ve run companies.”

just need capital,” said Simon, whose group has 15 portfolio companies, including three aerospace companies and a French company, Touax, with operations in Miami and Atlanta that leases modular buildings to schools, a deal that closed in December. Simon said the portfolio companies employ about 1,000, with due diligence underway for eight more acquisitions with a total of more than 1,000 employees. “We invest in companies that need mentoring help, operations help and technology to help them grow their businesses,” said Simon. “We offer experience. We’ve run companies.” Simon Holdings now has six investment professionals and a back-office and IT staff of 20. Simon said his group’s large back-office staff, operational experience and growing professional team make it a good partner for area family offices. “The biggest thing going on now is we’re spending a lot of time with family offices,” said Simon. “How can we help them, and how can they help us? There are a lot of synergies, what I call one plus one equals 11. Some things we see aren’t right for us but are right

for them. Or they see things right for us that aren’t right for them.” O2 Investments Partners was founded by Gregg and Rob Orley and their brother-in-law, Lawrence Lax, although the Orley family has been investing and operating businesses and real estate since 1950. It is an example of how successful family offices become more institutionalized as they grow. O2 has invested more than $100 million in 20 acquisitions over the years, putting in money on an as-needed basis. But 18 months ago, the firm decided to raise a dedicated fund of $100 million called the O2 Investment Partners Oxygen Fund LP, 40 percent of it Orley family money and the rest from limited partners. The list of limited partners includes 12 other family offices, including offices in Georgia, Illinois, California and Florida. A fund allows other family offices to share in deals without having to do the hard work of vetting them, and a fund with limited partners allows O2 to keep 2 percent to cover expenses and 20 percent of profits generated. “Other family offices want to in-

to hire an experienced staff of three or four for his or her own family office. “Once you get to a certain size, maybe $100 million, a family office really makes sense,” said Mark McCammon, managing partner at Birmingham-based Strength Capital LLC, a private-equity company that has shifted from having a dedicated fund with limited partners to seeking partners to coinvest in individual deals as they arise. J Flexibility. Once an investment is made in a private equity fund, the limited partner is locked into an investment that might have a 10-year cycle until the fund matures and liquidates. Direct investments by family offices can be bought and sold at will. J Family offices now have professional events that cater to them and have developed around their needs and interests, and professional service firms have sprung up that directly target them. J Traditional diversification strategies once considered sound can be counterproductive in the era of mega private-equity funds.

CRAIN’S DETROIT BUSINESS

vest, they want to have skin in the game, but they don’t want to create an infrastructure,” said managing partner Todd Fink. “We look at 1,000 deals a year to invest in two or three. To do that, you need a talented team, and having a dedicated fund to invest from helps you attract the talent you need. “More and more, you hear about family offices across the country doing what we’re doing,” he said of the creation of dedicated funds with limited partners. Navigant Oak LLC of Northville is a classic family office. It was founded by CEO Greg Boll after he sold his share in Cummins Bridgeway, a joint-venture distribution company with Cummins Inc. in 2014. The two managing partners are his sons-inlaw, Aaron Cozart and Ethan Allen. Allen declined to comment on behalf of the family office, saying, as do many family offices, that it prefers to stay below the radar. Its website says it seeks controlling stakes in lower middle-market companies. Tom Henderson: (231) 499-0191 Twitter: @TomHenderson2

SPONSORED CONTENT

Team handles the heavy lifting Family-owned Alta Equipment relies on legal, bank advisors in handoff to next generation. When Ryan Greenawalt and his father, Steven, began exploring a succession plan for their family business in 2016, their strategy hinged on expanding the business into new territory while separating the real estate from the commercial business. Steven Greenawalt founded Alta Equipment in 1984 as a forklift dealership, and with Ryan grew it into a multi-state operation with a diverse product mix. While transitioning the business to the next generation, the family sought to spin out the real estate portfolio and finance it apart from the business. Luckily, the Greenawalts came in contact with Leo Kujawa, senior vice president of commercial banking at Flagstar Bank.

Kujawa examined Alta’s goals and customized a solution that removed the owner-occupied real estate from the existing credit facility and financed it through Flagstar. The family retained control of the real estate, allowing the business to pursue its growth strategy and implement the succession plan simultaneously. Flagstar brought on attorney Matt Casey and his team at Warner, Norcross & Judd for legal guidance and documentation. With the corporation no longer guaranteeing the real estate loans, and by signing long-term leases, the Greenawalts act as landlord for the Midwest-based properties. This allows Alta to strengthen its business, provides financial flexibility, and enables additional real estate acquisitions. “It was a pleasure working with Flagstar on this deal,” Casey said. It’s the kind of work at which Flagstar excels. “We like to position companies like Alta for success,” Kujawa said. For Ryan Greenawalt, Flagstar allowed him to accomplish several goals. “Their patience, their flexibility—they’re very pro-customer,” Greenawalt noted, adding that he enjoys Flagstar’s accessibility. “They’ve made their bank feel pretty intimate. I’ve met the CEO, and the president of the commercial banking group. It gives me peace of mind to know that I have a personal connection to the executives.” Generational transfer and funding capitalization are a dual challenge facing many mid-sized, family-owned companies. “There are a lot of privately-held companies here with significant real estate investment that are navigating similar issues,” Kujawa noted. “With the right team behind you, there are creative solutions that will facilitate the goals of owners and entrepreneurs.”

Position your company for next-gen success. Visit flagstar.com/commercial

FlagstarAltaEquipFullPAge.indd 1

MEMBER FDIC

4/17/18 3:30 PM

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

SPECIAL REPORT: FINANCE OPTIONS FROM PAGE 9

In its first five funds, Huron only acquired controlling interest in its portfolio companies. The Huron Flex Equity Fund LP, which ended up oversubscribed at $142 million, allows Huron to buy minority stakes in companies. “We raised it quickly and brought in two professionals, Doug Stanton as a partner and Charlie Sheridan as a principal, from Chicago to run it,” said managing partner Brian Demkowicz. “We wanted to expand our capabilities horizontally into adjacent strategies, and one of them was noncontrol. ... A lot of things come over the transom. A lot of business owners wanted to work with Huron but didn’t want to sell control of their companies.” Demkowicz said he decided to found Huron in Detroit, instead of Chicago, where he had been working, because his first fund of $72 million was able to attract some of the old-money family offices here as limited partners. He says he is prohibited from naming them, “but that’s why we are here. Our early LPs were wealthy Detroit families. We still re-

Brian Demkowicz: Legacy to family offices.

Cliff Roesler: Profusion of funding options.

main a strong legacy, out of loyalty, to local family offices.” The new flex-equity fund has already done its first coinvestment with a family office, joining in March with the Minneapolis-based Pohlad family, owners of the Minnesota Twins, in Russellville, Ala.-based B&B Roadway Security and Solutions LLC. “A lot of family offices are looking now to do direct investment deals, and we’re a great conduit,” said Demkowicz. David Sowerby, managing director and chief portfolio adviser in the Bloomfield Hills office of Cleveland-based Ancora Advisers LLC, said that as banks have grown more cautious, in part because of the Great Recession and in part because of

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

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

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

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

www.zhangfinancial.com Assets under custody of LPL Financial and TD Ameritrade. *As reported in Barron’s March 4, 2017. Rankings based on assets under management, revenue generated for the advisors’ firms, quality of practices and other factors. **As reported in Barron’s August 22, 2015, August 27, 2016, and September 15, 2017. Based on assets under management, quality of practices, revenue that advisors generate for their firms, and other factors. For fee-only status see NAPFA.org. Minimum Investment Requirement: $1,000,000 in Michigan/$2,000,000 outside of Michigan.

Dodd-Frank legislation passed by Congress to regulate banks, entities called direct lenders have prospered. In fact, Huron is more receptive to family office David Sowerby: partners because Direct lenders one of its longhave prospered. time limited partners, Comerica Inc., can no longer invest in its funds because of restrictions imposed by the Dodd-Frank act to limit bank risk. “There was a vacuum in the markeplace for companies to be direct lenders, then pool their loans and securitize them for investors,” said Sowerby.

The rise of direct lenders Two of the more successful of these, also known as business development corporations, are Chicago-based Monroe Capital Corp. (Nasdaq: MRCC), which was founded in 2004, and New York-based Golub Capital BDC Inc. (Nasdaq: GBDC). Sowerby said that investing in those secured assets has become a way for institutional investors to swap out their bond holdings for higher yields. Instead of getting two and a half or three percent from bonds, he said pension funds can get high single- to low-double digit returns. “If you’re a pension fund trying to meet actuarial returns, it’s hard to do that with bonds,” he said. “They lose liquidity and they take on a higher lever of risk, but they make a better return.” Cliff Roesler, a managing partner at the Birmingham-based investment banking firm of Angle Advisors LLC, said there has been such a profusion of new funding options that his firm is adding a new managing director soon to focus on those sources of money for clients wanting to find growth capital. “The new director’s specific responsibility will be growth capital from new and innovative funding options,” he said. He said those options fill in nicely for traditional sources of bank funding that got scarcer or dried up during and after the Great Recession. “Banks are hyperegulated, now,” he said. One of the options that has grown more popular with direct lenders and with business owners looking to shorten the time and simplify the process of raising a large funding round is a kind of credit facility known as unitranche financing. In the past, a business owner might have had to negotiate a handful of agreements with a variety of lenders. He or she might have sold off a chunk of the company in an equity deal; got a traditional loan from a bank, using collateral for a lower rate of interest on what is called senior debt; used other assets at a higher rate for a second-lien loan, which is paid off in the event of trouble after senior debt; negotiated a chunk of unsecured debt known as mezzanine funding, paying a much higher interest rate than for the senior debt; and perhaps found a lender willing to loan against enterprise value or cash flow. Finding lenders for each of those

chunks was time consuming, complicated and came with high legal fees. In unitranche rounds — as in the deal for HopCat — some equity is exchanged. The other lines of debt are rolled into a combination of senior and subordinated debt at a blended rate that is higher than typical senior debt and lower than mezzanine debt. The equity can be in common stock or in preferred stock, which is repaid before common. If a senior bank loan is at 5 or 6 percent interest and mezzanine debt at 14 or 15, a unitranche round might be at 11. While banks have been prohibited in investing in private equity companies or venture capital, they have broadened their commercial lending away from traditional senior debt. Huntington Bank, for example, has gotten aggressive in mezzanine lending, typically lending between $2 million and $7 million for a five-year loan. “We’ve had to find ways to be more creative,” said Brian Marshall, who heads Huntington’s commercial lending in Michigan and northwest Ohio. “Last year, for example, Huntington hired an equity adviser to help customers raise money. Banks are approaching the market in new and unique ways.” He said Huntington can take both a senior-debt chunk and a mezzanine chunk on deals if needed. “And we can introduce customers to equity partners for the rest,” he said. In 2016, Huntington negotiated a unitranche round for Jim Whitehead

“We’ve had to find ways to be more creative. Last year, for example, Huntington hired an equity adviser to help customers raise money. Banks are approaching the market in new and unique ways.” Brian Marshall, Huntington Bank

when his Rochester Hills-based company i.M. Branded was spun out from the Penske Automotive Group. The company makes graphics, displays and furniture for automotive dealers around the country, including the huge, 18,000-square-foot banners that adorn the Chrysler World Headquarters and Technology Center in Auburn Hills.

The fundless sponsor Birmingham-based Strength Capital LLC, a private equity firm founded in 2000 by Mark McCammon and Michael Bergeron, has switched to the fundless sponsor deal from the traditional model of raising a dedicated fund with limited partners. Strength raised its first fund of $30 million, a second fund of $140 million in 2006 and was planning a third fund of $250 million when the recession hit. Out of necessity, Strength gave up on the fund and began raising money on a deal-by-deal basis for acquisitions. It was able to close those deals in part thanks to money available from family offices. When the recession ended, Strength stuck to the

fundless model, which has become more popular across the country. The fundless model allows Strength to be more flexible with individual deals than it can with a structured fund, which has restrictions on what it will invest in and when investments must be liquidated and the fund closed. “The holding period isn’t restrictive. You can hold your investment and let it compound longer,” he said. And it gives portfolio companies more flexibility to sell equity and distribute cash. “One of our portfolio companies got money from family offices solely to distribute excess cash flow to family members as a yield,” said McCammon, who was a member of the 2004 class of Crain’s Forty Under 40. He says Strength has been doing one sponsorless deal a year and will be accelerating that as it cultivates more family-office relationships. “We have five family offices we deal with, and we’re cultivating another 15,” he said. Its most recent sponsorless deal, announced on April 9, was the acquisition of a controlling investment in ESP Associates Inc., a company based in Charlotte, N.C., that provides engineering, surveying and planning services for public and private clients. The $46 million deal was joined by a Cincinnati-based family office and the wealth management group of a major bank whose name was not disclosed. The wealth management group invested on behalf of other family offices. The company employs almost 400 and had 2017 revenue of $53 million. “Fundless sponsors are another tool in the toolbox,” said Chris Rizik, CEO and fund manager of Ann Arbor-based Renaissance Venture Capital LLC, a firm affiliated with Business Leaders for Michigan that invests in venture capital companies that in turn invest in Michigan companies. “You don’t spend 12 to 18 months raising a fund. You find a good deal, you go out and find investors. It shortens the process and lets investors invest in things they are specifically interested in, as opposed to limited partners who might be investing in things they have no interest in,” he said. Dave Eberly, who co-founded Farmington Hills-based Beringea LLC, one of the most successful venture capital firms in Michigan, co-founded Southfield-based Covington Partners LLC in January 2017 to take advantage of the boom in fundless deals. His firm vets companies whose owners need capital, maybe for growth or to buy out a partner, and then raises money as needed to close those deals on an individual basis from a network of family offices. “Ten years ago, if someone told me they were a fundless sponsor, someone without a fund, I never would have taken them seriously. The risk of them not raising enough capital was too high. I wouldn’t have considered it,” said Scott Eisenberg, managing partner of the Birmingham-based investment banking firm of Amherst Partners LLC. “Now, we have a deal under letter of intent with a fundless buyer who has access to family offices and is raising capital.” Tom Henderson: (231) 499-2187 Twitter: @TomHenderson2

WAB

W a By

tcliffo

W $20 foot Hills later Jo Ame gium plier outg Hills on p mou Th emp pect over “Th the need dle add A 61,0 Hills “lon

Bann War

Ex Te W By

afran

G ufac hea it h Aug A War laris has in L T tum mak men 90,0

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

ome

ows h inh a tricand datding hold und

nies disolio mily cess as a as a ain’s

oing will ates hips. deal ther

deal, quint in any proand pri-

d by and of a disment ther loys e of

ther izik, ArCapusithat nies om-

WABCO is building a 102,000-square-foot American headquarters in Auburn Hills.

WABCO building $20M headquarters, adding 90 jobs in Auburn Hills By Tyler Clifford tclifford@crain.com

WABCO Holdings Inc. is investing $20 million to build a 102,000-squarefoot Americas headquarters in Auburn Hills that the company expects to open later this year. Jon Morrison, president of the Americas for WABCO, said the Belgium-based safety technologies supplier for commercial vehicle fleets had outgrown its facilities in Rochester Hills and Troy. The company is focused on products that can support autonomous driving in commercial fleets. The plan is to consolidate nearly 200 employees at the headquarters, expected to open in July, and add 90 jobs over three years. “This will give us a central point in the region for WABCO,” he said. “We needed a larger facility in order to handle not only the employees but all the additional support services.” About 50 employees will stay at the 61,000-square-foot plant in Rochester Hills, where WABCO will maintain its “long-term” lease to handle its reman-

Need to know

Belgium-based technologies supplier is constructing a 102,000-square-foot space J

J Will bring together employees from Troy and Rochester Hills J Building expected to open in third quarter

ufacturing operations, Morrison said. The building is owned by Bloomfield Hills-based Alidade Research Drive LLC. Construction is supported by a $375,000 performance-based grant the company received in March from the Michigan Economic Development Corp.’s Michigan Strategic Fund. The MEDC stipulates that WABCO create 50 jobs to get the first $215,500 and an additional 37 jobs for the remaining $159,500 of the MSF grant. The edifice, designed by Birmingham-based Biddison Architecture + Design P.C., is being built by J.A.R. Development Co. LLC. Farmington Hillsbased Davis & Davis Interior Design

nths deal, s. It vescifilimting ” he

ded ngea vengan, Cov2017 m in

hose for and lose asis

me meould sk of was ered ging d inerst deal less ffic-

WABCO HOLDINGS INC.

TECTONICS

Banner and exhibit manufacturer Tectonics plans to move 100 employees from Warren to a new headquarters at 1681 Harmon Road in Auburn Hills.

Exhibits manufacturer Tectonics to move from Warren to Auburn Hills By Annalise Frank afrank@crain.com

Graphic display and exhibits manufacturer Tectonics plans to move its headquarters from a Warren facility it has outgrown to Auburn Hills by August. About 100 employees work in the Warren location, CEO Lee Skandalaris said in an email. The company has around 200 staff total, including in Lithia Springs, Ga., and Las Vegas. Tectonics, a subsidiary of Quantum Digital Group LLC, expects to make a “multimillion dollar” investment to build out a recently built, 90,000-square-foot building at 1681

Harmon Road, Skandalaris said. “The Auburn Hills facility allows us to set up our operation more efficiently and implement the new technology investments we’ve made,” he said in the email. It will increase its capacity with new manufacturing technology and launching a new software application. Germany-based Recaro Child Safety LLC originally built and formerly occupied the building on Harmon Road, according to Auburn Hills’ development blog. Recaro also previously occupied space across the street at 1600 Harmon, Crain's previously reported.

Co. LLC is handling interior design. The two-story facility at 1220 Pacific Drive will have a customer experience center, vehicle test lab, training center and other amenities, WABCO said in a news release. “The customer experience center will bring customers in to gain experience with our products,” Morrison said. “The jobs we are creating, the focus is on engineering and talent, but also talent that helps us take care of our customer.” WABCO’s workforce has tripled in recent years with the acquisitions of North Mankato, Minn.-based MICO Inc., Canada-based Laydon Composites Ltd. and Hanover, Pa.-based R.H. Sheppard Co. Inc., according to the news release. The manufacturer bought out Meritor Inc.’s share in a joint venture for $250 million in September. WABCO (NYSE: WBC) employs more than 1,800 in the America across 11 locations. In 2017, it reported sales of $3.3 billion and nearly 15,000 employees in 40 countries.

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

CALENDAR MICHIGAN’S COMMUNITY BANK

TUESDAY, APRIL 24

JUST GOT CLOSER.

Violet Gintsis

Community Bank President

Joshua Elliott Branch Manager

Mary Dunn

Commercial Lender

Betsy McCue

Michael Erfourth

Treasurey Sales Officer

Commercial Lender

Maggie Currier Mortgage Lender

The Plan for a Stronger Michigan. 11:30 a.m.1:30 p.m. Detroit Economic Club. Business Leaders for Michigan has unveiled its “Plan for a Stronger John Rakolta Jr. Michigan” which identifies key steps to growing good paying jobs and accelerating our state’s economic turnaround. Speakers: John Rakolta Jr., chairman and CEO, Walbridge, and Doug Rothwell, presiDoug Rothwell dent and CEO, Business Leaders for Michigan. The Masonic. $45 members; $55 guests of members; $75 nonmembers. Website: econclub.org

Matthew Bonacorsi Commercial Lender

Since 1997, our team has contributed to the success of businesses across the state. We understand entrepreneurs and their drive to succeed. Let us help you with your success.

WEDNESDAY, APRIL 25 High Growth Happy Hour: Building a Community-minded Sports Team. 6-8 p.m. New Economy Initiative. Sean Mann and Todd Kropp, Detroit City FC co-founders, will share how they have built a community-minded sports team from the ground up. Ghost Light Hamtramck. Free. Website: neweconomyinitiative. org

1700 W. Big Beaver Road Troy, MI 48084 248.434.5556 mercbank.com

Financing Experience

In Your Corner.

Financial matters, business and corporate matters, financial transactions, real property, acquisition and commercial financing transactions

Midwest Technology Leaders. 7-8 p.m. A gathering of Midwest information technology executives. Program includes: leaders in the technology community, emerging trends and new business shifts, insights from industry leaders and strategies by networking with peers, press and analysts. The Henry, Dearborn. $199; 50 percent discount available with SIM or We Build Character memberships. Contact: PK Keiran, phone: (360) 3388955; email: pk@premierconnects. com; website: mtlevent.com

THURSDAY, APRIL 26 How Workplace Branding Creates Company Culture. 8:30-10:30 a.m. The Association for Women in Communications Detroit Chapter. Katie McGerty, marketing manager at ISCG, and panelists Karen Dybis of Corp! magazine and Kristin Palm, managing director of communications at TechTown, will discuss how inspiring workspaces can improve human, organizational and facility performance. ISCG, Royal Oak. $25 members; $35 nonmembers; $15 students and recent graduates. Contact: Melinda Kollins, phone: (248) 722-5408; email: melinda.kollins@ gmail.com; website: womcomdetroit.org/wic-events

FRIDAY, APRIL 27 14th Annual MHCC Economic Forum Breakfast. 7:30-10 a.m. Michigan Hispanic Chamber of Commerce. Speakers: Bret Hardy, director and head of Mopar purchasing and supplier quality, FCA; Terry Nadeau, vice president global procurement, Johnson Controls; Tony Tomczak, chief procurement officer, DTE Energy. Detroit Athletic Club. $200. Contact: Eva Borquez, phone: (248) 763-2309. Women’s Business Symposium Greater Detroit. 10:30 a.m.-3 p.m. Comerica Bank. Speaker is Cookie Johnson, philanthropist, entrepreneur and author. MGM Grand Detroit. $75. Contact: Wendy Holmes, (248) 371-5503; email: wholmes@ comerica.com; website: events.comerica.com/wbsmi18

UPCOMING EVENTS

Startup to mid-size companies, corporate governance and private equity matters

Technology in Industry Reveal. 8-11:30 a.m. April 30. Automation Alley. Guide to Industry 4.0 adoption with observations, recommendations and action items to help manufacturers keep pace with rapid technological changes. Detroit Institute of Arts. $50 members; $75 nonmembers. Contact: podsiadlikl@automationalley.com Digital Marketing Secrets Revealed. 7:30-11:30 a.m. May 3 (rescheduled from March 22). Detroit Regional Chamber. Digital marketing leaders will look at the current digital marketing landscape. Greektown Casino-Hotel. $55 members, $99 nonmembers. Contact: Jim Connarn, phone: (313) 596-0391; website: detroitchamber.com/digital-marketing

Contact Kristen Veresh at kmveresh@varnumlaw.com

■

Ann Arbor

■

Detroit

■

Grand Haven

■

Grand Rapids

■

Hastings

■

Kalamazoo ■ Lansing

■

Novi

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.”

C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

CRAIN'S LIST: LARGEST STAFFING-SERVICE COMPANIES

Ranked by 2017 revenue Company Address Rank Phone; website

Top local executive(s)

Revenue ($000,000) 2017

Revenue ($000,000) 2016

Average daily employment 2017

Annual payroll 2017

No. of W-2 forms issued 2017

No. of offices in metro Detroit 2017

Kelly Services Inc. 999 W. Big Beaver Road, Troy 48084 (248) 362-4444; www.kellyservices.com

George Corona president and CEO

$5,276.8

150,000

500,000

Tata Technologies Inc. 41050 W. 11 Mile Road, Novi 48375-1302 (248) 426-1482; www.tatatechnologies.com

Warren Harris CEO and managing director

417.7 B

424.0 C

The Bartech Group Inc. D 27777 Franklin Road, Suite 600, Southfield 48034 (248) 208-4300; www.bartechgroup.com

David Barfield group development executive

396.0

345.0

2,200

Acro Service Corp. 39209 W. Six Mile Road, Suite 250, Livonia 48152 (734) 591-1100; www.acrocorp.com

Ron Shahani president and CEO

354.1

331.8

4,287

130.4

10,088

Strategic Staffing Solutions Inc. 645 Griswold St., Suite 2900, Detroit 48226 (313) 596-6900; www.strategicstaff.com

Cynthia Pasky president and CEO

340.0

330.0

AccessPoint LLC 28800 Orchard Lake Road, Farmington Hills 48334 866-513-3861; apteam.com

Greg Packer CEO and chairman

245.8

229.3

5,316

195.6

12,819

Stefanini Inc. 27100 W. 11 Mile Road, Southfield 48034 (248) 357-2866; www.stefanini.com

Spencer Gracias CEO

227.0

221.0

1,285

0.0

1,990

London Square Specialty Services LLC 500 Stephenson Highway, Suite 200, Troy 48083 (888) 703-3183; www.mycallcenterteam.com

Jeana Asmaro chief operating officer

105.0

98.0

Rapid Global Business Solutions Inc. (RGBSI) 1200 Stephenson Highway, Troy 48083 (248) 589-1135; www.rgbsi.com

Nanua Singh chairman and CEO

84.8

71.8

895

67.9

2,482

TTi Global Inc.

Lori Blaker president and CEO

78.0

82.7

240

14.7

293

Epitec Inc. 24800 Denso Drive, Suite 150, Southfield 48033 (248) 353-6800; www.epitec.com

Jerome Sheppard, CEO; Josie Sheppard, president

77.2

68.0

958

55.0

1,334

Danlaw Inc.

Raju Dandu founder and chairman

75.0

85.0

187

176.5

236

The Dako Group

Scott Baker president and CEO

70.0

58.0

900

50.0

1,500

Modis Inc.

Carl Lucke vice president

65.0

48.0

775

50.0

1,280

Reliable Software Resources Inc.

Ravi Vallem, CEO; Sridhar Kodati, CFO; Venkat Gone, president

64.3

63.2

650

41.5

724

G-TECH Services Inc. 17101 Michigan Ave., Dearborn 48126 (313) 441-3600; www.gogtech.com

Kouhaila Hammer chairman

53.4

56.0

558

774

Kyyba Inc.

Thiru Ganesan president and CEO

52.7

42.6

W3R Consulting

Eric Hardy, chairman, president and CEO

42.0

49.0

300

13.0

430

Staffworks Group

L. William Brann III, president and CEO; Jason Brann, executive VP

35.0

58.0

2,000

7,500

VisionPRO E 3031 W. Grand Blvd., Suite 600, Detroit 48202 (313) 420-2000; www.visionproteam.com/

Christine Rice CEO

35.0

Contract Professionals Inc.

James Cowper president

33.0

32.5

520

900

Arrow Strategies LLC

Jeff Styers founder and CEO

32.5

44.0

231

20.2

594

Malace & Associates Inc.

Larry Malace II president

30.4

34.1

985

23.6

2,440

CrossFire Group 691 N. Squirrel Road, Suite 118, Auburn Hills 48326 (248) 364-0007; www.xfiregroup.com

Deborah Schneider, cofounder and CEO; Martin Rosenau, co-founder and COO Sangeeta Ahluwalia CEO

30.0

36.0

30.0

28.0

320

8.0

922

N. Adams, Suite 185, Bloomfield Hills 48304 10 6001 (248) 853-5550; www.tti-global.com

Vincenti Court, Novi 48375 12 41131 (248) 476-5571; www.danlawinc.com Industrial Row Drive, Troy 48084 13 2966 (248) 655-0100; www.dakogroup.com Town Center Drive, Suite 2600, Southfield 48075 14 3000 (248) 357-4200; www.modis.com Haggerty Road #285, Northville 48167 15 22260 (248) 504-6869; www.rsrit.com

Orchard Lake Road, Suite 130, Farmington Hills 48334 17 28230 (248) 813-9665; www.kyyba.com Town Center, Suite 1150, Southfield 48075 18 1000 (248) 358-1002; www.w3r.com Northwestern Highway, Suite 200, Southfield 48075 19 24445 (248) 416-1090; staffworksgroup.com

W. Walton Blvd., Waterford 48329 21 4141 (248) 673-3800; www.cpijobs.com Franklin Road, Suite 1200, Southfield 48034 22 27777 (248) 502-2500; www.arrowstrategies.com Crooks Road, Suite 112, Troy 48098 23 5700 (248) 720-2500; www.malacehr.com

Automotive Quality & Logistics Inc.

Jib St., Plymouth 48170 24 14744 (734) 459-1670; www.aql-inc.com

This list of temporary-employer/staffing-service companies and companies that provide such services is an approximate compilation of the largest companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. It is not a complete listing but the most comprehensive available. Crain's estimates are based on industry analyses and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. Industrial Control Repair which was No. 20 on last year's list was not able to submit data before publication. NA = not available.

B Fiscal 2017 revenue listed in annual report 2016-2017. C Company estimate. D Acquired by the U.K. staffing company Impellam Group plc in December 2015. E A subsidiary of Vision Information Technologies Inc. The company formed after Vision Information Technologies Inc. separated its staffing business. LIST RESEARCHED BY SONYA D. HILL

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

DEALS & DETAILS

SPOTLIGHT RTA hires executive to manage operations

ACQUISITIONS & MERGERS J Credential Check Corp., Troy, a professional services organization, has acquired United States Homeland Investigations Inc., Washington, D.C., a consumer reporting agency. Websites: credentialcheck.com, ushii.com

CONTRACTS J ProQuest LLC, Ann Arbor, an information technology company, has a contract with the state of California to provide guided research and learning resources, reference materials and ebooks this fall to the state’s K-12 schools. ProQuest is one of three companies selected as part of California’s new statewide digital educational resources program. Encyclopedia Britannica and TeachingBooks.net are the two other selections. Also, ProQuest company Ex Libris Ltd., provider of cloud-based solutions for higher education, has a contract to provide the Ex Libris Alma library services platform and Ex Libris Primo discovery and delivery solution to the 61 libraries of the State University of New York system. Websites: proquest.com, library.ca.gov, exlibrisgroup.com, system.suny.edu/olis J The Kresge Foundation, Troy, a philanthropic organization, is part-

nering with thunder::tech, Detroit, a marketing and web design agency, to lead the foundation’s digital marketing programs. In addition to managing web development, maintenance and information architecture initiatives, thunder::tech will assist with select logo identity projects and web optimization for the foundation. Websites: kresge.org, thundertech. com J LJPR LLC, Troy, a financial adviser and wealth management firm, is using the Envestnet/Tamarac Inc., Seattle, Wash., platform for reporting portfolio management, performance reporting, billing and client portal management to increase efficiency. Website: ljpr.com, tamaracinc.com, envestnet.com

EXPANSIONS J Faurecia, Auburn Hills, an automotive technology company, has opened a tech center in Yokohama, Japan, for its seating, interiors and clean mobility businesses. Website: faurecia.com

JOINT VENTURES J American Axle & Manufacturing Holdings Inc., Detroit, a drivetrain components manufacturer, and Liuzhou Wuling Automobile Industry Co.

Ltd., automotive parts and accessories manufacturer and a subsidiary of Guangxi Automobile Group Co. Ltd., Liuzhou, China, have entered into a joint venture agreement to manufacture driveline systems. Websites: aam. com, lz.wulingauto.com.cn

NEW PRODUCTS J Sigma Financial Corp., Ann Arbor, and Parkland Securities LLC, Ann Arbor, are collaborating with BNY Mellon’s Albridge Solutions Inc., Pennington, N.J., to use Albridge Wealth Reporting, a web-based application that allows advisers to view and report on clients’ investment accounts, consolidating data from among a number of different sources such as brokerage accounts, mutual fund accounts, and life insurance and annuity product companies. Websites: sigmafinancial.com, parklandsecurities.com, bnymellon.com, albridge.com J Living Essentials LLC, Novi, the distributor of 5-hour Energy shots, debuted a Major League Baseball Extra Strength Cherry flavored 5-hour Energy shot with a bottle featuring an MLB silhouetted batter. Website: 5hourenergy.com

Submit Deals & Details items to cdbdepartments@crain.com

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

FINANCIAL SERVICES

PROFESSIONAL SERVICES Sherry Verstraete

Courtney Richardson

Vice President of Human Resources

Director of Industrial Strategy and Development

BeneSys Inc.

Scott Kowalski Head of Corporate Banking for Southeast Michigan

PNC Bank Kowalski manages PNC’s middle market and corporate finance businesses in the region. In his prior role as Corporate Banking relationship manager, he was responsible for business development and portfolio management for middle market business clients in SE Michigan. Kowalski has 18 years of corporate banking experience, including eight with PNC. He earned a bachelor’s in Finance from Michigan State University and a Master of Business Administration degree from the University of Detroit Mercy.

MANUFACTURING

BeneSys Inc. is pleased to announce the promotion of Sherry Verstraete to Vice President of Human Resources. Sherry has been instrumental in helping BeneSys grow over the past 17 years and will continue to focus on her support and advocacy for our 700 employees nationwide.

Carhartt, Inc. Carhartt has named Courtney Richardson as its director of industrial strategy and development. In this role, Courtney will be responsible for further defining Carhartt’s strategy and execution as the company continues to transform the way it services and forms relationships with businesses that have workwear needs.

KNOW SOMEONE ON THE MOVE? For more information or questions regarding advertising in this section, please call Debora Stein at (917) 226-5470 or email: dstein@crain.com

After a series of departures, the Regional Transit Authority of Southeast Michigan has hired a new top executive to manage day-to-day operations. Matt Webb, a transportat i o n -p l a n n i n g consultant at the firm CDM Matt Webb Smith, has joined the RTA as the authority’s new chief operating officer. Carmine Palombo, deputy director at the Southeast Michigan Council of Governments regional planning agency, has been running the RTA on a day-to-day basis since interim CEO Tiffany Gunter quit Jan. 2. Palombo is retiring from SEMCOG on June 15 after 43 years with the regional government organization. Gunter had been CEO since March 2017, when interim CEO Michael Ford was fired over questions about his travel expenses. Webb’s arrival two weeks ago has been welcomed as the RTA prepares to make a potential push for a ballot proposal this fall, board Chairman Paul Hillegonds said. “We need continuity and stability,” he said. Webb previously worked on a regional transit master plan in his role at CDM Smith and HNTB Corp., when he worked on the early planning for the QLine streetcar on Woodward Avenue. He has more than 20 years of experience in transportation planning and program management services in the areas of highway, rail and transit, according to a news release from RTA. He has a bachelor’s degree from Michigan State University and is a certified planner with the American Planning Association.

Melinda Clemons joins Enterprise Community

Real estate finance ace Melinda Clemons left her post at Capital Impact Partners for a position as senior director with Enterprise Community Partners in Detroit. Clemons began her new job last week at the Melinda Clemons nonprofit, which finances and builds affordable housing. She had served more than four years as Detroit market lead with Capital Impact — also a nonprofit, with a similar mission as Enterprise Community. The Enterprise Community role was previously held by Kylee Mitchell, a Detroit native who launched the organization’s Detroit office. She was selected last November to head up the new Detroit office of the Ballmer Group, the charitable foundation of former Microsoft CEO Steve Ballmer and his wife Connie.

LLamasoft selects CEO

LLamasoft Inc., an Ann Arbor-based supply chain software supplier and one of the fastest-growing tech companies in Michigan, has a new CEO. Razat Gaurav, 44, started with LLamasoft last week. He came from an executive position at JDA Software Group Inc. He replaces co-founder and former CEO Don Hicks, who will remain chairman of LLamasoft’s board. Hicks will direct strategy and long-term vision, while Gaurav will handle daily operations, Gaurav said. Hicks’ co-founder, Toby Brzoznowski, will continue with the company in the role of chief strategy officer, according to a news release.

PEOPLE BANKING J Steve Hansen to senior vice president, Crestmark, Troy, from first vice president.

LAW J Neil Silver to partner, Dawda, Mann, Mulcahy & Sadler PLC, Bloomfield Hills, from member, Kecskes, Silver & Gadd PC, Plymouth. J Monica B. Wilkinson to leader, Health Care Practice Group, Dykema Gossett PLLC, Detroit, from member, Health Care Practice Group.

ADVERTISING/ MARKETING/PR J Kristin Sokul to director, Tanner Friedman Strategic Communications, Farmington Hills, from senior account manager. Also, Kim Eberhardt to director from senior account manager; Tom Wegehaupt to senior account manager from account manager and Lexi Cerilli to senior account manager from account manager. J Angela Bianchi to vice president, Stratacomm LLC, Southfield, from

product PR manager, FCA US LLC, Auburn Hills. J Chris Preuss to executive vice president, global public affairs and marketing communications, WPP PLC, London, U.K., from senior vice present, marketing and communications, Aptiv (formerly Delphi Automotive), Troy. He will lead public affairs for WPP’s GTB (Global Team Blue), Ford Motor Co.’s dedicated ad agency in Dearborn.

NONPROFITS J Lucius Vassar to senior vice president, Detroit market leader, Cinnaire Corp., Lansing, from director of government affairs, Clark Hill PLC, Detroit. J Stacey Dettloff-Jones to deputy director, Training & Treatment Innovations Inc., Oxford, from clinical director.

To submit news of your new hires or promotions to People, go to crainsdetroit.com/peoplesubmit and fill out the online form. Please limit submissions to management- or partner-level positions.

Page 2

USINESS C R A I N ’ S D E T R OCIRAIN T B’SUDETROIT S I N EBS S // A P R I L 2 3 , 2 0 1 8

April 23, 2018 17

CARS

Need to know

JJWarren-based Keith’s Auto & Golf Cart Sales & Service created two Tigers bullpen cars

FROM PAGE 3

Lokotar said he and two colleagues took a pair of carts from Georgia-based Club Car (a division of Ingersoll Rand), stripped them down to the frames, and rebuilt everything inside to the exterior bodies that were fabricated from fiberglass in the shape of the Mercury. The flame paint job was done inhouse, too, he said. “Once you put the flames on, any wrong move, you’re going to have a giant scratch,” Lokotar said. They were delivered Friday, hours before the first pitch. The home and visitor bullpens have different colored cars to ferry relievers to the mound mid-inning — but if the pitchers opt not to use them, they’ll take their warm-up jacket to the dugout. The team announced it was adding bullpen cars in March, but the actual vehicles were a secret until Friday. “We had a blast doing them,” Lokotar said. He declined to discuss the cost of the two bullpen carts, citing a confidentiality agreement with the Ilitches, but noted that base golf carts sales begin at $2,000 and custom jobs have sold for as much as $22,000. Mark Sofia, founder of Tampa-based SportsKartz that created the Arizona Diamondbacks’ bullpen cars for this season, told Crain’s that his carts sell for about $20,000, and estimated what the Tigers are using could have cost $17,000 to $19,000

EDUCATION FROM PAGE 3

New Paradigm’s growth targets align with DCF’s own ambitious goal to expand high-performing schools by creating 25,000 seats for K-12 students in strong Detroit schools by 2025. Only about 6,000 of the 85,000 seats in all Detroit schools are in high-performing schools, Jack Elsey Jr., executive director of Detroit Children’s Fund, told Crain’s last fall. With the grant, its first investment, DCF is lifting up a model that Bland has been developing for about 15 years ago and that has seen consistent success in catching students up. Bland, a Detroit native, got his start in education as a first-grade teacher in the Detroit PubJack Elsey: High lic Schools. Edibar of excellence at New Paradigm. sonLearning Inc. (formerly Edison Schools Inc.), the original, for-profit operator of Detroit Edison Public School Academy — which is now operated by New Paradigm — then hired him as community resource director. He went on to become principal of Inkster Edison Public Schools before returning to DEPSA in 2002-03 to make his mark as superintendent, a position he still holds. After some success at DEPSA, Bland launched New Paradigm around 201011 when the Michigan Future Schools Initiative, a coalition led by the Skillman Foundation, opened the Early College of Excellence, a high-performing high school, on the academy’s campus. As the operator’s only high school, Early College of Excellence graduates 100 percent of its students. Last year, 80

JJCompany does 10-15 custom carts annually atop regular sales of 300-500 units JJRed Wings, Lions also are customers

MICHIGAN GOLF CART

The showroom at Michigan Golf Cart in Warren is filled with accessories and some of the 300 to 500 custom carts they sell or rent annually.

each. The Diamondbacks were the first major league team to use bullpen cars since the Milwaukee Brewers dropped their motorcycle/sidecar gimmick in 1995. The custom sports cart business is small, and Sofia said he welcomes anyone getting work rather than seeing it as competition. More bullpen cars is marketing for the niche sector.

“It’s good for all of us,” he said. Body color is the core personalization at Michigan Golf Cart Sales, Lokotar said, but the company does custom work such as TVs, LED and sound systems and other tech, lights, lift kits, utility boxes, headlights and flip seats in addition to paint jobs, graphics and body fabrication.

percent went on to college, Bland said, with all who applied accepted. New Paradigm took on operation of two former failing elementary schools for DPS in 2011, creating New Paradigm Glazer Academy and New Paradigm Loving Academy. It also launched New Paradigm College Prep to replicate DEPSA’s model and took over University Yes Academy. What differentiates New Paradigm is a high bar of excellence that holds everyone in the organization to those expectations every day, Elsey said. “You’re essentially convincing staff it’s important to work harder” than they would have to at other schools, he said. “That’s a pretty hard stance to take.”

said. Students spend 90 minutes out of each school day in a class with students at the same reading level, regardless of age, and move up as they progress. “We want to always remember we’re not preparing students to be a success in Detroit. We’re preparing students to be a success on the national and global levels,” he said. New Paradigm reported a loss of $546,834 on its 990 for fiscal 2016 ended June 30 and estimates it will report a similar loss for 2017 on just over $14 million in revenue stemming from grants/donations, management fees and reimbursable revenue from schools for staffing. The reported losses were due to the difference between when grant funding was recorded (the year prior) and when it was spent, CFO Paris Hodge said. To strengthen its student and teacher recruitment, New Paradigm is contracting with outside marketing professionals to strengthen its student and teacher recruitment. It has also expanded its in-home outreach to student families with the hiring of five new social workers to help them address issues preventing student success. New Paradigm is also bringing grief counselors in at least twice a week to ensure students and families can get the help they need, in school and in homes, to help families get back on track after suffering a loss, Bland said. Families have different types of trauma, whether it’s grief, homelessness, lack of food, need for dental care or lack of a school uniform, Bland said. “If we can figure out the deeper background about what’s inhibiting (student) success ... we can help that student and their family be more successful by fixing the trauma,” he said.

Catching students up New Paradigm has had success in increasing quality even as it’s grown, “which is really remarkable,” Elsey said. The Michigan Department of Education looks to student growth percentiles as a way to quantify student learning over one or more years. Those percentiles illustrate the degree to which a student has learned in a particular subject area such as English language arts or math, compared with a group of peer students who had a comparable score on the previous test in that subject. Five of the New Paradigm schools are at the 80th percentile, and one is close, he said, noting they are among just 22 Detroit schools at that level. “ We are choosing this metric ... because we think it accurately captures the kind of growth you want to see in Detroit schools,” Elsey said. “If a child is in a school that’s getting 80th percentile growth year after year after year, they’re going to catch up much faster than their peers.” An approach the charter operator takes to getting students up to grade level in reading is core to how it’s successfully catching its students up, Elsey

Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

It lists its customer base, beyond the sports teams, as outdoor sports enthusiasts, hunters, retirees, apartment and condominium complexes, manufacturing plants, landscape companies, marinas, city parks, schools and cottage owners. Sales, service, repairs and rentals are the primary business lines in addition to custom work.

“It’s a lot of fun,” Lokotar said. “We’ve done a lot of stuff.” The core of the company’s sales, rental and custom fleet are gas and electric EZGO, Club Car and Yamaha carts. Michigan Golf Cart Sales is a small part of the global golf cart and “neighborhood electric vehicle” market that’s predicted to grow to $3.8 billion worldwide by 2025, according to a forecast by Albany, N.Y.based Transparency Market Research. Another research firm, Valley Cottage, N.Y.-based Future Market Insights, estimated that the U.S. accounts for about 42 percent of the golf cart market globally, and sales reached $1.1 billion by the end of 2016. Lokotar, who handles the backshop while his dad oversees sales, declined to discuss revenue, but their annual number of units sold suggests around $1 million or more annually. He said he hopes the bullpen car trend continues and it becomes a steady business to augment traditional and custom sales. “It’s nice to have something different,” he said. “When you’re doing 300 to 500 golf carts, they start to blend together. It would be awesome if it became something.”

REAL ESTATE COMMERCIAL PROPERTIES ù12 Condo Pads, Chesterfield, Footing’s and 1st Floor Plumbing Done, $21K Each ù10K Sq. Ft. Industrial Building, Mt. Clemens, $280K ùOffice Building, Northville, 27K Sq. Ft. $3.6M, 8 Cap ù52 Acres Land, Chesterfield, 112 Lots $825K Bill McMachen ~ 586-915-4441

COMMERCIAL SPACE FOR LEASE 1,700.00 of commercial space for lease on Woodward Ave. Midtown, Detroit, MI 313-331-6422

MISCELLANEOUS

43 ACRES - JEWELL ROAD Between 27 & 28 Mile Roads Washington Township Zoned Residential (R1B) With Water & Sewer Bid Pkg available at: www.washingtontownship.org Call or email today for information on a custom advertising plan!

cdbclassified@crain.com 313.446.6086

JOB FRONT POSITIONS AVAILABLE

COMMERCIAL REAL ESTATE BROKER Cohn Commercial Properties, a West Bloomfield based real estate brokerage firm, is seeking an experienced Commercial Real Estate Broker to service the greater Detroit and beyond markets. The candidate will have 2+ yrs. experience in the industry and focused on customer-based success. In addition, the candidate will come prepared to make cold calls, follow-up on provided leads, and attend to all paperwork associated with their deals. Team-work and a positive attitude will make this candidate an asset to our exponentially-expanding organization.

Interested parties may reply to Cindy: CindyZ@CohnCommercial.com

HUMAN RESOURCE DIRECTOR - PACE SOUTHEAST MICHIGAN The HR Director is accountable for developing, directing, leading and implementing HR strategies, goals, program services, policies, systems, and processes for PACE Southeast Michigan. The major areas to direct include: * Workforce Planning, Recruitment & Talent Management * Organizational/Leadership Development * Employment & Compliance to Legal/Regulatory Requirements * Compensation & Benefits Administration * HR policy development and documentation * Payroll Policy & Practices & HRIS oversight * HR department staff, goals & development To learn more and apply visit: www.pacesemi.org

ROBOTICS FROM PAGE 1

FIRST — which stands for For Inspiration and Recognition of Science and Technology — is bringing its world championship competition to Detroit on Wednesday for a three-day gathering of more than 35,000 students, parents and team coaches at Ford Field and Cobo Center. The event and spotlight on Detroit underscores the growing popularity of an extracurricular activity seen by many potential employers as a critical way to expose students to careers in science, technology, engineering and math. Beyond contraptions that pick up and move blocks and other objects in competitions, the robotics program has created a pipeline of young talent that companies like DTE, General Motors Co. and Magna Seating have been tapping in recent years for engineering, problem-solving, teamwork and communications skills. “It’s kind of like a business within itself where you’re working with your own team, like a company, and you have to market it … get the funding you need to build the robot as robust as it must be,” said Rahman, who now mentors a robotics team through the Hope Center in Detroit.

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8 Businesses that have sponsored the robotics teams over the years are not just doing it for charity. The recruiters at some longtime business sponsors have added a question to their job applications asking if the prospective employee participated in FIRST Robotics in high school or not, said Donald Bossi, president of Manchester, NH-based FIRST. Because of the trials and tribulations students tackle while trying to build a machine, the experience is viewed by employers as similar to critical thinking and problem-solving challenges they’ll face in the workforce, Bossi said. “It really, really gives them a leg up,” Bossi said in an interview.

From ‘Little League’ to GM More than 700 robotics teams will descend on Detroit this week from a network of 61,000 teams globally spread out across 86 different countries, including more than 500 student-led robotics teams in Michigan. The high school students use bandsaws, drills and computer programs to design, construct, engineer, tinker and fine-tune their robots. The machines are remote-controlled by students who have to program and steer them through com-

Nuno-Whelan

Jarquin-Lopez

“You need the spirit, you need the image of the robot, the team and gracious professionalism and helping other teams out.” Samia Rahman

petitions to pick and move objects and maneuver around obstacles. Robotics teams are underwritten by sponsors and guided by volunteer mentors. “It’s a huge undertaking for those who do volunteer,” said Crystal Whetzell, marketing and communications manager at Magna Seating in Novi. Whetzell has volunteered for 17 years as a mentor to Novi High School’s robotics team, Frog Force Team 503. “I’ll get somebody across the par-

ticipation field coming to me to say, ‘You don’t know what this has done to turn my kid’s life around. He now has a focus,’” Whetzell said of the impact of the robotics competitions. As the program has grown, FIRST

has spread to the middle and elementary school levels using LEGO blocks. The LEGO leagues have created a natural pipeline for the high school teams and now employers, said Joa-

Making Michigan smile since 1957. PROJECT FROM PAGE 1

It is slated to become a Hotel Indigo, part of the International Hotel Group chain. The change is part of a raft of hotel developments, with a bevy of openings slated and construction expected to begin soon on a handful of others in and around downtown. Lawrence Kestin, managing principal of Glenmont Capital, said he was introduced to the investors through a mutual acquaintance, although for several years the company has been interested in Detroit. “The impetus behind the investment was to act as another resource to Project Destined, to see if we can get involved by shepherding kids through a hotel process,” he said. “We first started looking in Detroit for transactions because we wanted to take advantage of the revitalization and resurgence. Historically what we do is find investments in strong secondary cities.” Bobo and Kestin said the Hotel Indigo is intended to capitalize on the growing hospitality market in and around downtown. While the Shinola Hotel, Foundation Hotel, The Siren hotel and other boutiques are quality properties with

a lot to offer, often guests don’t want to spend $200 or more on a room. Hotel Indigo will offer the boutique hotel experience at a lower price, although Kestin declined to say precisely what that would be or how much would be invested to transform the property. “We are going to be at a much more affordable price point,” Kestin said. “Everything we are doing is comprehensive, the rooms, common areas, the restaurant.”

Lessons in business Diop Russell is an advocate for healthy eating in Detroit, having started the Put Some Respect on My Plate campaign. Russell also understands how real estate capitalization rates are measured and is soon to start teaching that subject to fellow Detroiters. Russell, 17, participated in the Project Destined pilot program and plans to study political science at Spelman College and, in her words, “change the world.” “Project Destined helped me learn about the importance of investing in my community,” said Russell, who participated in the pilot program unveiled at the Detroit Homecoming event produced by Crain’s Detroit Business. “When I go down to Atlan-

Intern Denny Peña (left) and Cedric Bobo at Pershing High School last week.

LARRY PELPIN FOR CRAIN’S

Detr Yais work com robo Kine

D a

W d o

eleEGO

ed a hool Joa-

AIN’S

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

PHOTOGRAPHS BY DETROIT CRISTO REY HIGH SCHOOL

A robot built by Detroit Cristo Rey High School’s FIRST Robotics team, the Kinematic Wolves FRC5577, performs tasks during a March 9 competition in Center Line.

Detroit Cristo Rey High School juniors Yaisiri Zuniga (left) and Malachi Pitts work in the pit at a FIRST Robotics competition in Center Line to repair the robot built by the school’s team, the Kinematic Wolves FRC5577.

quin Nuno-Whelan, chief engineer for next-generation SUVs at General Motors. “Think of (how) a championship baseball team needs to have strong Little Leagues feeding into strong high school teams, which feed into college and professional teams,” Nuno-Whelan said in an interview for the Crain’s “Detroit Rising” podcast. “We’re using that kind of model from within Detroit to say, ‘OK, if we want to hire engineers to come work at GM

that are job-ready, what do we need to do up and down this pipeline.” Led by Nuno-Whelan, the Detroit-based automaker has sponsored two teams in the Motor City for the past four years through Detroit Cristo Rey High School and the Detroit Hispanic Development Corp. “FIRST robotics has really built up my mind to see whether or not I want to do mechanical engineering,” said Miguel Jarquin-Lopez, a senior at Detroit Cristo Rey.

Cristo Rey High School has paired the FIRST Robotics team with its science curriculum and the school’s unique work-study program in which students work one day a week for their entire four years of high school at a paid job that helps underwrite their tuition. Nuno-Whelan supervises eight student-workers in engineering at the GM Tech Center in Warren. GM has more than 50 Cristo Rey students on its payroll. In four years, the school’s robotics team has started to produce future engineering prospects for GM. This summer, GM will have its first group of Cristo Rey graduates working as college interns, Nuno-Whelan said. If they intern all four summers of college at GM, they’ll graduate with seven years of robotics experience and internships and be at the front of employment line, he said. “So they come out not only caught up and ready to join the workforce, but they come out ready to dominate, ready to lead in the workforce,” Nuno-Whelan said. “And that’s really the model we’re setting here.” Milton Martinez, a global diagnostics strategist at GM’s Milford Proving Grounds, mentors a FIRST team through Detroit’s Cesar Chavez High School that qualified for the world championships this week.

He credits his career path in engineering to being exposed to robotics 20 years ago in high school in Texas. “I can draw a straight line from FIRST Robotics in Texas to my job here in Michigan,” he said. “It made me a better engineer, and I think these teams help the students become better engineers as well.”

‘Gracious professionalism’ For Rahman, her career path also grew from the robotics team a high school biology teacher talked her into joining a decade ago. She’s especially gratified to be able to encourage other girls of color to try it out. The students are not just judged on the skill of the robot, but how they present it to judges on the competition floor. Working at DTE, Rahman has found a lot of parallels between the processes of FIRST Robotics and the business cases she has to make for improving the delivery of electricity. “You need the spirit, you need the image of the robot, the team and gracious professionalism and helping other teams out,” she said. “That’s really the big community that FIRST entails.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

Delta Dental of Michigan has helped make smiles brighter and healthier across the state for more than 60 years. We are dedicated to using our experience and expertise to do dental better for you. Thank you for making Delta Dental of Michigan the top choice for dental benefits!

ta, I look forward to working with it there and learning how I can become a stakeholder and helping communities of color and minorities with investment.” In the program, about 15 students worked on a few small multifamily projects around Henry Ford Health System. Sitting in the Foundation Hotel downtown, Bobo, a former principal with the Carlyle Group investment firm focusing on rail, shipping and security, said 40 to 50 students from Cass Technical High School; Cody High School; Mumford High School; Central Academy and High School; East English Village Preparatory Academy; Martin Luther King Jr. Senior High School; and Renaissance High School are expected to participate in the next cohort after being selected through a “Shark Tank”style interview process from an expected candidate field of 100-150. The participants will be selected next month. Throughout the process, they will be led by real estate professionals like brokers, bankers and architects, among others in the field. They will also have access to internships. About $25,000 in scholarship money will be available through a competition in the first six months and 20 percent of the group’s investment re-

We do dental. Better. www.deltadentalmi.com

“We give early scholarship opportunities so it satiates demand and they can be long-term participants in the equity upside. With students, six months is a long time and it may take six months to generate cash flow for scholarships.” — Cedric Bobo, Project Destined cofounder

turns will go to scholarships once profits are turned in the Holiday Inn/ Hotel Indigo investment, Greene said. The remaining 80 percent goes to the investors. “We give early scholarship opportunities so it satiates demand and they can be long-term participants in the equity upside,” Bobo said. “With students, six months is a long time and it may take six months to generate cash flow for scholarships.”

Bobo and Greene, a developer in Washington, D.C., met through their network of friends and connected over native Detroit director Qasim Basir’s movie “Destined.” Basir is Wayne State University graduate and 2006 Crain’s Twenty in their 20s honoree. “We started looking at real estate deals together in Baltimore that didn’t quite pan out, but through that process we became very good friends,” Greene said of Bobo. “Cedric caught wind of the movie and he was moved and said, ‘Fred, you should check out this movie.’ Just the concept of young urban youths being one step away from going left or going right.” While there is an altruism to Project Destined, it’s not purely about financing education opportunities for Detroit teens, Bobo said. It’s about lessons in life and lessons in business. “I would never teach my kids how to lose money and I’m not going to teach someone else’s kid how to lose money,” Bobo said. “I want to teach them how to make money. There is no theory in our program whatsoever. Everything is about a real building, helping analyze rent, expenses, NOI and cash flow. We teach profit motive. We think that’s good.” 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 // A P R I L 2 3 , 2 0 1 8

CARS FROM PAGE 1

Condor launched its vehicle subscription service in Southeast Michigan in December, while Mobiliti will launch its services in Austin, Texas, on May 1. Both startups target younger drivers looking to sidestep the traditional buying or leasing process and offer bundled payment options to customers looking for a more tailored, hassle-free process. “Our vision is to make the process really simple; one payment, everything included,” said Tarun Kajeepta, founder of Detroit-based Condor. “People want flexibility to drive the car they want, when they want and change to a different car without the hassle of buying or leasing.” Condor’s monthly subscription fees range from $561 per month for a Chevy Cruise, with Michigan taxes, up to $1,059 per month for a Land Rover Range Rover. While the monthly payment is significantly higher than a traditional lease for a Chevy Cruise, the costs remain competitive when all aspects of traditional leasing are rolled in, Kajeepta said. The monthly payment for a 36-month lease on a Chevy Cruise is $253 a month, but monthly ancillary costs equate to $15 for registration, $28 for maintenance, $213 for insurance and $56 for down payment — bringing total monthly lease costs to $565, according to Condor. And it comes with a three-year contract. “A lot of folks don’t want to hold onto a car for three or five years,” said Chance Ritchie, CEO of Mobiliti. “The technology, look and functionality of vehicles is changing so rapidly, the subscription service makes a

LARRY PEPLIN FOR CRAIN’S

Tarun Kajeepeta, left, founder of Condor Detroit, and Aaron Bedell, head of operations and strategy at a dealership in Monroe.

lot of sense for many people.” Mobiliti’s subscriptions will start at $549.

Competitive edge Condor and Mobiliti are going up against some of the largest automakers in the world. Cadillac was the first auto brand to market with a subscription program, Book by Cadillac, which began in March 2017 as a pilot in New York and has since expanded to Los Angeles and Dallas. The program is expected to add cities this year, Automotive News reported. Porsche followed in October with Porsche Passport in Atlanta. Since

then, Volvo, Lincoln, Hyundai, BMW and Mercedes-Benz have launched or announced plans for vehicle subscriptions. Cadillac’s service costs $1,800 per month, with a $500 non-refundable member fee. Porsche Passport starts at $2,000 a month, with a more expensive $3,000-per-month option for higher-end models like the 911 Carrera S sports car. But automakers remain unsure if subscription services will be profitable. “We have to find out,” Klaus Zellmer, CEO of Porsche Cars North America, told Automotive News last month at the Geneva auto show. “It will be decided when we resell those cars employed in that fleet … into the

used-car CPO market. … We think it can be profitable, but that is when we are going to find out, once we have cycled the cars back into the market.” Condor and Mobiliti believe they’ve found a shortcut to profitability that the automakers can’t match — partnering with dealers instead of sidestepping them. Mobiliti will launch in Austin with 200 cars with plans to target other markets this year, including Detroit. Mobiliti works with former General Motors’ financing arm Ally Financial, which will offer fleet financing to dealerships in the program. Dealers maintain ownership of the vehicles, while Mobiliti maintains the customer interactions via its mobile app or website.

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

(248) 841-2200

www.miller.law

Condor has partnered with several local dealers and is currently acquiring its own vehicles to test out the platform before moving to an asset-free model like Mobiliti. For dealers, services like Mobiliti and Condor offer an additional revenue stream at a time when the used car market is about to be inundated with product. Leasing’s share of total U.S. auto sales has grown since the Great Recession, rising from 17 percent of the total market in 2010 to nearly 25 percent in 2016 and 2017, according to Atlanta-based auto service firm Cox Automotive, whose businesses include Kelley Blue Book and Autotrader.com. The result will be 3.9 million vehicles coming off lease this year, according to Cox Automotive. “There’s an impending cliff coming,” Kajeepta said. “When the used car market is flooded, car dealers now have another revenue stream.” Kajeepta said dealers would make around 80 percent of the total transaction value while using Condor’s services. For dealers, that’s a significant increase in the monthly value of each customer, Ritchie said. “If you walk into a dealership every five years, you’re only worth about $40 to $50 per month to the dealer,” Ritchie said. “Now dealers can make $200 per customer, per month.” But subscription services only account for a small percentage of the car buying/leasing experience, said Kristin Schondorf, global automotive and transportation mobility head for advisory firm EY. “This could be a very positive thing to add new revenue streams to dealers, but I’d estimate that subscription services are still a small percent of the market,” Schondorf said. “The revenue that dealers are seeing from this is going to be incremental so it’s too soon to tell if there will be any advantages. It will take time to understand the behaviors of consumers and the exact targeted buyer of subscription services.” Both Condor and Mobiliti are catering to younger professionals, especially those that may travel often and don’t need a car in one location for several months out of the year. Automakers are in lockstep. Cadillac says the average age of subscription members is 41 years old — 22 years younger than the brand’s traditional owners — and about 75 percent male, and the vast majority of them have never previously owned a Cadillac, Automotive News reported. Porsche has seen similar trends from Passport, with about 80 percent of subscribers between ages 25 and 44, and 78 percent new to the brand. Where Condor and Mobiliti differ is target markets. Condor is boostrapping it in Detroit, despite its highestin-the-nation insurance costs. Mobiliti is starting in Austin, avoiding the Detroit market at first. “Insurance costs really impact our pricing,” Ritchie said. “Detroit’s costs are the highest in the country and it’s such a unique market. Most people can get (employee discount) pricing and that it makes it more difficult for us to compete.” Where Ritchie sees profit constraint, Kajeepta wants Condor’s proof case to be its toughest market. “Insurance is absolutely the biggest pain,” he said. “If we moved our company from Detroit to Ohio, we’d get underwritten in one second. Here, we’re putting a dent in our profitability. But if we can maintain a profit here, we’re all set for a solid growth trajectory.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

ICU

FROM PAGE 3

Most electronic medical record presentations require doctors and nurses to click through multiple digital pages to get to the most important patient measurements — critical data that could mean life or death for patients. “It is easy to read the data that we most need to see. It makes the rounding process much easier,” said Sakwa, who is chief of cardiovascular surgery. Beaumont’s information technology department installed Epic Systems’ telemedicine software into the ICU’s EMR. Few, if any, hospitals have integrated software this way, Beaumont IT experts said. The changes gave SICU staff and patients immediate benefits. For example, staff making rounds can now see quickly in graphic format the most important patient lab results, blood flow and drugs the patient is on that elevate blood pressure. Individual patient computer monitors also show patient names, doctor names, diagnosis, number of infusion drips, last dose, glucose, hemoglobin, heart rate, blood pressure and other imaging data such as X-rays. “The regular Epic system, you needed to click 13 times to get to the chest X-ray we needed to see. Now we click once to get where we need,” Tepe said. “Deeper dives into data comes up as a long, scrolling, table five feet long that has everything lined up vertically by time. You see everything happening now and at anytime in the past.” Over the past five years, hospitals have been installing EMR systems to more effectively track inpatient care and link that data with office-based physicians and other providers to capture as much electronic health data on patients as possible. Hospitals also have been using patient and family advisory councils to garner advice in how to improve or redesign medical units to improve outcomes and convenience. But each medical service — whether surgery, general medicine or emergency — inside a hospital has its own special needs, and many facets, including patients, families, caregivers, computer systems and floor design. Using suggestions from nurses, doctors, patients and family members in the redesign advisory council, Beaumont’s heart and vascular SICU was expanded by 50 percent by tearing down unnecessary walls and pillars, opening closets and creating a better floor plan. Patient rooms now have 30 percent more volume. And families have a sleeping sofa, pillows and a storage area underneath with drawers for overnight stays. Another improvement the staff believes improves patient outcomes is moving the nurses’ break room inside the ICU and to the center of the unit. Nursing stations also were redesigned. Walls were torn down and a new floor plan designed. “It keeps them closer to patients. They can hear if the EKG is beeping. If someone calls for help, they can hear them and be there in five seconds,” Tepe said. Nurses and doctors now can see patients through plate-glass-covered walls and doors, which can be electrically frosted for privacy when needed. “We expect infection rates to go down because nurses are close to bedsides; they can monitor patients more quickly and the response time is quicker. ... CPR can start in 10 seconds, if necessary,” Tepe said.

www.crainsdetroit.com Editor-in-Chief Keith E. Crain President KC Crain 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

BEAUMONT HEALTH

Cardiac surgeons Nicholas Tepe (right) and James Robbins (center) talk with a patient during rounds at Beaumont’s newly renovated SICU in Royal Oak. Registered nurse Jason Riley is standing to left.

Seeking to predict outcomes At 877-bed Henry Ford Hospital in Detroit, Stephan Mayer, M.D., chair of neurology, had a similar dream. He also knew the medical team on the hospital’s 16-bed neuro ICU could deliver more effective and timely medical care if they could use EMR and patient monitors in a more effective way. Mayer felt the amount of data available on patients could be used to predict a variety of negative patient events that too often increased mortality and complications. Working on an idea and homemade system he came up with several years ago while at New York Columbia-Presbyterian Medical Center, Mayer found that a Texas-based medical engineering firm, Medical Informatics Corp., had developed a similar idea and was testing it on a small population of pediatric patients with cardiac defects. Mayer and Henry Ford’s information technology department now installing the company’s specialized software program called Sick Bay. He said the program will launch in June and begin storing patient data. After six months, Mayer said the neuro ICU will have data on 600 patients. “Bad things happen in the ICU. People stop breathing, go into cardiac arrest. We can take those events, using the machine to learn. When things start to go haywire for up to hours beforehand, you can spot that.” He believes the data collected on patients in the neuro ICU can be used to predict a cardiac arrest, stroke or other common medical event. “Our organization is eager to push boundaries. What we are doing, if it works as planned, then we would eventually to roll it out to all ICU beds in all the health system,” Mayer said. “It will change the way we round in ICU.” Tepe and Mayer say that their hospitals are test sites for the IT improvements and if the systems work out as designed their systems could adopt the changes at the other hospital ICUs. Beaumont Health has a total of 23 ICUs throughout its eight hospitals, including seven at the main hospital in Royal Oak. Henry Ford Hospital has 15 ICUs at its Detroit facility and a total of 22 throughout its five-hospital system.

ICU renovation Beaumont’s six-floor east ICU critical care tower opened in March 1994. After the Shapiros donated $10 million, Beaumont decided to completely overhaul its second-floor surgical ICU. But the renovation was tricky because the units were busy with 800 open heart surgeries a year. “We knew there was a better way to manage flow,” Tepe said. “We talked with doctors and nurses, who hated to be pulled away from the bedside to look at a computer. The No. 1 issue for nurses is to keep by the bed. No. 2 was family- and patient-centered care.” First was to redesign the waiting room, which was closed in and made families feel isolated. “Families suggested opening up the waiting room. We did the same for patient rooms,” Tepe said. Beth Fitzsimmons, a Beaumont nurse education specialist, said moving patients from one of Beaumont’s 34 operating rooms to the SICU also is much quicker with the redesign. “Our focus is on the patient because of all our connections,” Fitzsimmons said. “Nurses communicate better because we are closer. We can get patients up quicker for ambulation. You can’t measure it, but you can see it happen.” Sakwa said the SICU is an unusual unit because there are no residents on the service, only about 80 nurses and advanced practice providers. “We train new nurses and physician assistants for six months,” he said. “They are like fourth-year residents. (They) think like I think.” With the redesign, Fitzsimmons said nurses at their stations and on break can now see and hear all patients much more easily. A large unit monitor hung up by a nursing station is semi-automated to show the movement of patients and their data. “The charge nurse can look at that big monitor and know all they need to know to figure out where all the patients are going or not,” Tepe said. “It is very helpful if an emergency openheart is in the helicopter on the way in, and the SICU will need a bed in three hours.” Outside each patient room, computer monitors show name, diagnosis, number of infusion drips, last dose, glucose, hemoglobin, hemodynamics, heart rate, blood pressure and where the patient goes next.

Monitoring technology is highly specialized. Beaumont uses a standard General Electric monitor for such critical vital signs as EKG, blood pressure and “sats,” or oxygen saturation levels. But the big improvement in the SICU was to transfer monitoring from the transport screen on the bed to the larger screen hanging in the patient room. “It used to take us six minutes to individually re-hook up each cable,” said Tepe. Beaumont IT staff are currently working on a new request from doctors, Tepe said. “Our next improvement will be to show color codes to show us if patients are getting sicker,” he said. “We need a predictive algorithm. We don’t have now, but we are working on it.”

Sick Bay project What Tepe wants for Beaumont, Mayer at Henry Ford is working on. Like all ICUs, Henry Ford’s ICU tracks a variety of vital signs, but the immense amount of historic data is “flushed down the toilet” after immediate needs are satisfied, Mayer said. “This is all about lost opportunity and making the most out of the data we have,” Mayer said. “There is nothing unique about the data we have. We have EMRs connected to pharmacy, radiology, billings, this and that, but there is a doughnut hole. The empty spot is the ICU, where the sickest of the people are.” The Sick Bay software grabs data on patients, stores it, organizes it and later can be evaluated to pick out patient condition trends, Mayer said. Once that data is collected and analyzed, Mayer believes it can be used to predict a future patient event. For example, ICU monitors show a patient’s heart rate is 103 and the oxygen saturation percent is at 92, all within normal ranges. But what values are necessary for a neurologist to predict whether a patient may experience a serious problem? “We have alarms that are generalized, but there are no critical values. Now, you sit back and look at a patient record for days and you can see it shows a dramatic state of change,” he said. “We can use this (Sick Bay software program) to predict these adverse events.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

REPORTERS Tyler Clifford, breaking news. (313) 446-1612 or tclifford@crain.com Annalise Frank, breaking news. (313) 446-0416 or afrank@crain.com Jay Greene, senior reporter Covers health care. (313) 446-0325 or jgreene@crain.com Chad Livengood Covers Detroit rising. (313) 446-1654 or clivengood@crain.com Kurt Nagl Breaking news. (313) 446-0337 or knagl@crain.com Kirk Pinho Covers real estate. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor Covers the business of sports. (313) 446-1626 or bshea@crain.com Dustin Walsh, senior reporter Covers economic issues. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits and philanthropy. (313) 446-1694 or swelch@crain.com MEMBERSHIPS CLASSIC $169/yr. (Can/Mex: $210, International: $340), ENHANCED $399/yr. (Can/Mex: $499, International: $799), PREMIER $1,299/yr. (Can/Mex/International: $1,299). To become a member visit www.crainsdetroit.com/ membership or call (877) 824-9374 ADVERTISING Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Director of Sales Lisa Rudy Director, Crain Custom Content Kristin Bull, (313) 446-1608 or kbull@crain.com Senior Account Manager/Political Specialist Maria Marcantonio Advertising Sales Lindsey Apoctol, Heidi Martin, Sharon Mulroy, Diane Owen, Kate Rozek Classified Sales Kate Rozek, (313) 446-6086 Events Director Kacey Anderson Director of Marketing Christina Fabugais-Dimovska Senior Art Director Sylvia Kolaski Media Services Director Hussein Abdallah, (313) 446-0400 or sabdallah@crain.com Integrated Marketing Specialist Keenan Covington Sales Support Suzanne Janik CUSTOMER SERVICE Single copy purchases, publication information, or membership inquiries: Call (877) 824-9374 or customerservice@crainsdetroit.com Reprints: Laura Picariello (732) 723-0569 or lpicariello@crain.com Crain’s Detroit Business is published by Crain Communications Inc Chairman Keith E. Crain Vice Chairman Mary Kay Crain President KC Crain Senior Executive Vice President Chris Crain Secretary Lexie Crain Armstrong Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Contents copyright 2018 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is prohibited.

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 2 3 , 2 0 1 8

THE WEEK ON THE WEB

RUMBLINGS

Northville Downs to be redeveloped

Crain’s wins 13 awards from journalism group

APRIL 13-19 | For more, visit crainsdetroit.com

armington Hills-based homebuilder Hunter Pasteur Homes is under contract to buy the Northville Downs horse racetrack and redevelop the 48-acre property for housing. The harness racetrack’s land has long been sought by developers in upscale Northville, but the project wouldn’t necessarily end horse racing in the area. The site near Sheldon Road and Hines Drive is expected to be turned into 500-600 apartments and for-sale townhouses and single-family homes, according to a news release. Commercial uses are also expected. Northville Downs, Michigan’s last horse track since Hazel Park Raceway closed earlier this month, will remain open until the development begins. The track’s owners will seek to continue racing and wagering operations “at an area in close proximity to its current location,” according to the statement from Hunter Pasteur Homes. “This project is in the preliminary stages, and we’re eager to continue working with the city of Northville and our partners to iron out the numerous details that come with a project of this scale,” Randy Wertheimer, president and CEO of Hunter Pasteur, said in a statement. “We expect to have all entitlements in place in 2019. As more details become available, we will share them with the community.” Additional details such as purchase price and planned development cost were not disclosed. The Carlo family owns some of the track’s acreage, and an investment group called Northville Driving Club Corp. owns the rest. The Carlos are minority shareholders in that entity. The track’s ownership didn’t identify where it’s looking at building a new track. “Live harness racing and simulcast wagering will continue at our current location through 2020,” Northville Downs said in a statement Tuesday afternoon. “We are in the process of exploring multiple other locations to develop a first-class, state-of-the-art racing and gaming facility that Michigan will be proud of. We will continue to work closely with state and local representatives to implement the necessary changes that other states around us have, so we can bring racing back to its finest day.” It’s unclear if the track’s ownership will open a new facility regardless of changes in Michigan’s gaming laws, which prevent tracks from adding non-horse gambling like slot machines, or if it will build anew even without more forms of wagering. Northville Downs currently is open seven days weekly for simulcast wagering, and Friday and Saturday evenings for live races.

BUSINESS NEWS J Lear Corp. is actively trying to lease out space in one of its recently renovated downtown Detroit office buildings as the Southfield-based auto supplier re-evaluates its real estate portfolio. J Shelborne Development Corp. and nonprofit SER Metro-Detroit plan to redevelop the blighted Broderick Manor building in southwest Detroit. They aim to train youth and adults

CRAIN’S DETROIT BUSINESS

The Detroit Lions will open their 2018 season at home on national television and close out the season against division rivals the Green Bay Packers at Lambeau Field. The schedule released Thursday night by the NFL shows the Lions begin with a Monday Night Football game against the New York Jets at Ford Field.

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

1.4 percent

The rate hike Michigan regulators approved for DTE Electric Co. last week. It's less than the increase DTE implemented itself back in November, so customers are due refunds.

130

The number of rooms planned for the West Elm boutique hotel in Detroit from the Brooklyn-based furniture brand. Construction is expected to start next year.

390,000

The approximate number of DTE Energy Co. customers who lost power last week after an ice storm.

going through SER’s construction-skills programming during the renovation process. J Two doll doctors from the Doll Hospital & Toy Soldier Shop, which closed its location in Berkley after 70 years, have started a new doll repair business out of a home basement to continue the tradition. J Consumers Energy Co. will replace Pure Michigan as a sponsor of the Monster Energy NASCAR Cup Series at Michigan International Speedway later this year. J Grand Rapids-based Lambert, Edwards & Associates Inc. grew its national presence with the acquisition of a New York City financial public relations firm, Owen Blicksilver Public Relations Inc. J Discount grocery chain Aldi wants to fill more than 100 positions for its new and recently renovated stores across Michigan. J Wixom-based OPS Solutions, maker of Light Guide Systems augmented reality software for assembly and manufacturing, opened its first facility overseas in Prague, Czech Republic. J Major League Soccer owners met last week in Los Angeles to discuss issues including the coming decision on what finalist city will get an MLS expansion team. But no decision was made and Detroit is still in contention.

J An employee at Buffalo Wild Wings in Warren tested positive for hepatitis A. The restaurant was inspected last week and cleared to reopen. J Ford Motor Co. is partnering with Southfield-based Beaumont Health to launch GoRide, a shuttle service that ferries passengers to and from hospitals in Southeast Michigan for nonemergency medical care. J Wayne State University plans to acquire the NextEnergy Center in Midtown Detroit for an undisclosed price to create an innovation center. J Dan Gilbert said during a mortgage industry conference in Detroit last week that his Quicken Loans Inc. is “not really in the mortgage business. We’re in the data acquisition business.” J The owners of Shield’s Pizza are planning a $1 million renovation of their Troy restaurant to freshen its bloated menu and outdated design, and create a revenue-generating template for its other two stores. J Meijer and Kroger are rolling out a new service called “Scan & Go” that is designed to speed up the checkout process, responding to technology and customer habits that are changing the grocery game. J Comerica Bank’s marketing investment in the Detroit Tigers deepens with its sponsorship of the team’s World Series 50th anniversary celebration Sept. 7-9.

OTHER NEWS J S&P Global Inc. upgraded Wayne County’s bonds rating to investment grade — the county’s general obligation bonds now have a BBB-/Positive rating. J Crews have started building the Detroit Grand Prix track for the annual race on Belle Isle June 1-3. Organizers are looking to reduce the amount of time the track is set up on the island, but environmentalists continue to protest its impact. J The Regional Transit Authority of Southeast Michigan is moving forward with gathering public input on a 20-year, $5.4 billion mass transportation plan that Wayne County Executive Warren Evans has proposed, even as regional political support for putting the plan before voters in November remains uncertain. J Gov. Rick Snyder left last week for an eight-day trade mission in Europe focused on spurring investment in manufacturing, mobility and tourism.

Crain's Detroit Business won 13 awards last week at the Society of Professional Journalists Detroit chapter’s Excellence in Journalism banquet. The awards honor the best in local journalism for the year. Crain’s honorees were: J Jay Greene, first place in consumer/watchdog reporting for his report on plastic surgery, “An industry facelift” J Bill Shea, first for spot or breaking news for his coverage of the death and legacy of Mike Ilitch and third place in sports reporting for “Splitting audience could make UM’s $240 million athletics debt a heavier lift” J David Kordalski, first for sports page design for “Detroit’s highest-paid athletes,” Kordalski and freelance artist Robert Carter also won a third place award for cover design for Crain’s Michigan Change Makers J Crain’s senior reporter Chad Livengood and Mike Wilkinson of Bridge Magazine, second place for the explanatory report “How Michigan’s auto insurance premiums became the highest in the country” J Dustin Walsh, second for localization of a national story for “Opioids on the shop floor” and honorable mention for blogging on business

and economic issues J Ron Fournier, former Crain’s editor and publisher, second for general column and second for his personality profile “Gilbert the father, Gilbert the son” J Shea and Carlos Portocarrero, honorable mention in digital media presentation for Detroit 1917 / 1967 / 2017 J Reporter Lindsay VanHulle, who worked jointly for Crain’s and Bridge Magazine and now works full time for Bridge, earned second in blogging and third place for consumer/ watchdog reporting online for her story “Ban-the-box policy gains backers” The SPJ chapter gave its Journalist of the Year award to Robert Snell, a multimedia investigative reporter for The Detroit News and a former Crain’s staffer. Walter Middlebrook, a recently retired assistant managing editor for The News, and Detroit Free Press columnist Rochelle Riley received Lifetime Achievement awards. Hasan Dudar of the Free Press was honored as Young Journalist of the Year. Crain’s was also recognized earlier this year with national awards from the Society of American Business Editors and Writers.

ROSETTI

A rendering of Ford Field as announced as part of a bid for a new Major League Soccer team for Detroit.

Still no decision on MLS expansion team

ast Monday, Cincinnati made a stride in its pursuit of a Major League Soccer expansion team when its City Council approved a taxpayer subsidy for infrastructure to build a new soccer stadium. (Local billionaire Carl Lindner III is leading Cincinnati’s expansion team bid.) MLS owners were already scheduled to meet the following day in Los Angeles. Speculation was intense that the Ohio city would get approved for a team. That would have dimmed Detroit’s rival bid for an expansion team. Dan Gilbert and Tom Gores have been seeking a team since 2016 as part of MLS’ plan to expand by four cities, with two in a round that began in December and two expected later this year. Nashville was awarded a team in December. MLS has delayed a vote on the next city since then. Despite Cincinnati finalizing its

stadium site and financing, MLS didn’t make a decision last week. It’s unclear why. It issued a vague statement calling Cincinnati’s taxpayer subsidy “a positive step,” but it didn’t say why MLS owners didn’t take a vote, or when they might. MLS said it would continue to meet with the three finalist cities, which include Sacramento. Cincinnati, in a bid led by a minor league club that averages more than 20,000 a game, has been viewed as the front-runner. But does MLS secretly prefer Detroit, which is viewed as harming its chances by abandoning a soccer-specific stadium plan in favor of using Ford Field? Or Sacramento, which still needs deep-pocket backers? Motown remains in contention, for now. If it doesn’t get a team in this round, Detroit automatically is a finalist, with either other market, for the final two expansion cities.

DON’T MISS THE BOAT!

Every year, Crain’s Detroit Business covers the Detroit Regional Chamber Mackinac Policy Conference in a special issue. This year, we’re stretching to new heights and distributing our Mackinac Report issue starting Tuesday, May 29 at coffee shops, bars, hotels, restaurants – anywhere and everywhere around the island. We’ve even secured venues for live events, meet-ups and interviews!

WANT TO BE A PART OF THE ACTION?

Learn about our unique advertising opportunities, including: • Live events and parties throughout the island • Display advertising • Digital advertising • Email newsletter sponsorship • Sponsored content

BONUS DISTRIBUTION: Reach more than 2,000 attendees and visitors on the island

• Cover wrap

REGULAR DISTRIBUTION: Reach more than 23,000 Crain’s Detroit Business readers

…and much more!

• Print inserts

PRINT DATE: May 28 | CLOSE DATE: May 11 For advertising opportunities, contact Lisa Rudy at lrudy@crain.com

Environmental Services Energy Construction Manufacturing Food Processing Automotive Wholesaling Apparel

The Leading Bank for Your Business Metals Textiles Motion Picture Healthcare Life Sciences Wine Dealership No two industries face the same business challenges or have the same banking needs.

That is why Comerica specializes in understanding unique industry environments. The depth of our business portfolio reflects our extensive experience with industries like yours. From tailored lending programs1 to the right cash management and global solutions, our experience and knowledge of your unique industry needs can help you grow to the next level. This is how we became the leading bank for business.* To find out how Comerica can help your business thrive, visit Comerica.com/leadingbank or contact Comerica Bank at 888.791.9396.

ÂŽ

RAISE YOUR EXPECTATIONS. MEMBER FDIC. EQUAL OPPORTUNITY LENDER.

* Comerica ranks first nationally among the top 25 U.S. financial holding companies, based on commercial and industrial loans outstanding as a percentage of assets, as of December 31, 2016. Data provided by SNL Financial. 1 Loans subject to credit approval.

CBHQ-15807 06/17