Crain's Detroit Business, May 14, 2018 issue by Crain's Detroit Business

A few questions for energy CEO Carla Walker-Miller Page 14

Gores and the PE playbook Page 3

MAY 14 - 20, 2018 | crainsdetroit.com

TRANSPORTATION

Businesses team up with city on mobility test programs By Dustin Walsh dwalsh@crain.com

REAL ESTATE

Retail, residential plan targets Asian population YEAGER

The $50 million to $60 million project would include housing, retail, and potentially offices along Grand River Avenue in Novi.

Aikens’ Novi plan would turn 15 acres south of Twelve Oaks into ‘Asian Village’ By Sherri Welch swelch@crain.com

Oakland County’s Novi area is home to the largest Japanese population in Michigan, and as a whole, the state is home to the second-largest Japanese population in the Midwest. But up until now, there hasn’t been a dedicated retail, restaurant and entertainment area for Japanese and other Asian populations. A $50 million-$60 million, mixed-

use retail project taking shape in Novi is setting out to change that. The project will give Japanese and other Asian residents a place to shop, live and gather, while also serving as a destination for others in the region, planners said. The city of Novi last week approved the $3.15 million sale of just less than 10 acres of land it assembled for the project to Sakura Novi LLC, an affiliate of Birmingham-based developer

Robert B. Aikens & Associates LLC. The deal is contingent on creation of a brownfield plan and approval of a Planned Rezoning Overlay plan from the city. The area slated for the “Asian Village” project is bounded by Grand River Avenue to the south, Town Center Drive to the west and 11 Mile Road to the north. Only a few miles from Novi’s Twelve Oaks Mall, the site is zoned for office, service, com-

mercial and light industrial. Anchored by a new market/food hall concept by One World Market, the pocket Asian Village will span about 15 acres and include 75,000 square feet of lifestyle retail, with lifestyle services, such as exercise facilities and salons and soft goods stores, Japanese, Korean and Chinese restaurants and entertainment such as a Japanese karaoke bar. SEE ASIAN VILLAGE, PAGE 17

VENTURE CAPITAL

Renaissance seals up $81 million fund

By Tom Henderson thenderson@crain.com

The Ann Arbor-based Renaissance Venture Capital Fund, created in 2008 as an affiliate of Business Leaders for Michigan, has finished raising its third and largest fund of $81 million. Renaissance is a fund of funds, investing in other venture-capital firms crainsdetroit.com

Need to know  VC fund of funds was created to lure capital to Michigan in recession 

New fund, the third, is the largest so far

that are willing to invest in Michigan companies, many of them early-stage tech companies. Previously, it raised Vol. 34 No. 19 $5 a copy. $169 a year.

NEWSPAPER

funds of $45 million and $79 million. The fund was started in the depths of the recession, in an attempt to lure capital to a state that desperately needed it. But the result has hardly been charity: Companies that are reinvesting in the new fund are doing so partly because they’ve seen great returns.

THE LIST

Largest Michigan accounting firms Page 13

The new fund looks to be part of what will become a banner year for venture-capital fundraising in the state. According to April's annual report from the Ann Arbor-based Michigan Venture Capital Association, VC firms operating in Michigan raised $202 million for new funds last year. SEE FUND, PAGE 19

Southeast Michigan’s private sector is teaming up with the city of Detroit and the state to address the city’s transportation gaps by investing in programs to improve access and safety and ease congestion. Called the Detroit Mobility Innovation Initiative, a group of 10 public and private entities identified four key areas — neighborhood mobility, downtown accessibility, traffic safety and electric vehicle use and education — to develop six pilot programs Need to launch in the to know  A public-private next six months. Partners in the partnership has program include formed to tackle the city, the Michi- mobility in the city gan Economic De- of Detroit velopment Corp.,  The group will General Motors launch six pilot Co., Lear Corp., programs in the DTE Energy Inc., next six months Bedrock Detroit, Quicken Loans  The initiative Community In- will tackle safety, vestment Fund, congestion, access New Economy Ini- and electric tiative, The Boston vehicles Consulting Group and BCG Digital Ventures. The pilots to launch in the fall are:  A mobile app-based demand-driven shuttle service.  A low-cost car-sharing program for specific Detroit neighborhoods.  An app-based parking mobile app that integrates dynamic pricing alongside a perks program.  An electric vehicle hub with fastcharging stations in Capitol Park.  A traffic-management system that integrates priority to public transit vehicles at intersections.  A “central intelligence” hub to collect and distribute mobility-related data from infrastructure, vehicles and mobile devices. Mark De la Vergne, the city’s chief mobility officer, said the goal is to address the city’s transportation pain points while building out a sustainable model for the private sector. “We could’ve come up with our own ideas, but we wouldn’t get the private sector buy-in,” De la Vergne said. “We have a good team here, but we don’t have a great perspective how the private sector operates or how these things are sustainable financially. This allows us to get involved and understand the financial risks and helps these companies understand the institutional challenges city residents deal with.” SEE MOBILITY, PAGE 21

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MICHIGAN BRIEFS

INSIDE

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

Supplier fire idles 4,000 at Ford truck plant in Dearborn Ford Motor Co. said production of F-150 and Super Duty pickups — its most profitable vehicles — at multiple U.S. factories will be halted this week because of a fire at a supplier plant near Lansing that produces parts for the trucks. General Motors Co., Fiat Chrysler Automobiles and Mercedes-Benz also said output has been disrupted. Ford on Monday idled F-150 production at its plant in Kansas City until May 14, temporarily laying off 3,600 workers. It was also to suspend production at its Dearborn Truck Plant on Wednesday night through at least the end of the week, affecting about 4,000 workers. According to a letter shared with Dearborn Truck workers Wednesday afternoon, officials expect the plant to resume production today, although the letter cautioned that “this situation and circumstances can change.” The company halted Ford Super Duty production in Kentucky, although that plant continues to produce other vehicles and no workers have been laid off. Super Duty output will continue at Ford’s plant in Avon Lake, Ohio. Ford executives on Wednesday de-

clined to say how long production will be suspended, although it could be knocked out for several weeks, a person familiar with the situation told Bloomberg. The parts plant in Eaton Rapids, owned by Meridian Magnesium Products of America, supplies three different components for Ford vehicles: a front bolster used in the F-150, Super Duty, Expedition and Navigator; a 3rd row seat-cushion pan used in the Explorer, Flex and Lincoln MKT; and a liftgate inner used in the MKT.

Restaurant operators expect growth in 2018 The Michigan Restaurant Association's first quarter industry report reveals an ongoing labor shortage is taking a toll on restaurateurs across the state. Of the 400 member restaurants surveyed in the trends study, 62 percent said filling jobs has been their No. 1 challenge. About 32 percent said they want to grow their staff size, up from 22 percent in the fourth quarter of 2017. But the hiring crunch has begun to impact labor costs, with first quarter costs topping the fourth quarter and all of 2017. Michigan's unemployment rate was 4.8 percent as of February, according to the U.S. Bureau of Labor Statistics. “We knew what some of the hot

CRAIN’S DETROIT BUSINESS

Restaurants in the state are feeling the pinch of a labor shortage.

button issues or trends are out there, but the degree to what the labor shortage was, was surprising,” MRA CEO Justin Winslow told MLive. Scarce labor, however, has not dimmed optimism about restaurants' bottom line. Those surveyed said they anticipate sales and traffic will grow 4.5 percent and 4 percent, respectively, in 2018, according to the report. The first quarter saw same-store sales increase by 1.6 percent statewide.

Audits warned of lax MSU athletic oversight Audits show Michigan State University's former athletic director Mark Hollis and former President Lou Anna

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Simon were repeatedly warned that sports staff members weren't adequately following financial procedures, the Associated Press reported. The Lansing State Journal obtained the university's internal audits through a public records request. Hollis and Simon left the university this year in the wake of the Larry Nassar sexual abuse case. Auditors reported that athletic officials didn't regularly review department finances and misused university-issued credit cards. Auditors also warned the athletic department six times that complimentary game tickets were being handled improperly. The audits say officials offered explanations and improvements for each finding, but the same issues reappeared in subsequent audits.

CORRECTION

In the April 30 edition of Crain’s Detroit Business, the largest office leases list on Page 14 should have identified Bloomfield Hills-based Jonna Realty Ventures Inc. as the owner of the property at 26545 American Drive in Southfield, where Autoliv ASP Inc. signed a 179,300-square-foot lease last year.

Congratulations to the Detroit Regional Chamber named a

“Top Economic Development Group” by Site Selection Magazine. A national leader in business attraction for its 2017 impact.

New Projects

$179.25 Million

New Business Investment

957

New Jobs Created

One of the many examples of the Detroit Regional Chamber powering the economy for Southeast Michigan.

Learn more at detroitchamber.com.

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HEALTH CARE

Health systems maintained steady profit margins in 2017 By Jay Greene jgreene@crain.com

Southeast Michigan hospital chains posted healthy surpluses in 2017 despite continued movement to lower-paying outpatient services, anemic reimbursement rate increases and above average pay raises to workers. Investment income bolstered health system bottom lines for the six systems that Crain's reviewed as the stock market posted strong gains. But that rosy picture may be short-lived: A new report from Moody's Financial Services projects that average hospital margins will decline nationally to negative 10 percent in 2018. Henry Ford Health System and Beaumont Health, two Southeast Michigan powerhouses that ended fiscal 2017 on Dec. 31, posted strong

Need to know

 Big gains in investment income bolstered hospital operations in 2017  Strategies turning more intensively to outpatient services as insurers, patients seek lower cost, more convenient settings  Henry Ford Health System, Beaumont Health and McLaren Health Care lead the pack in local Southeast Michigan systems

financial statements. Henry Ford reported net income of $203.7 million on total revenue of $5.98 billion. Beaumont posted net income of $321.6 million on total revenue of $4.44 billion. McLaren Health Care Corp., a 14-hospital system based in Grand Blanc, also posted positive earnings of $80.3 million for the first quarter 2018 ended Dec. 31 on total revenue of $926,382. Livonia-based Trinity Health, one of the nation's largest nonprofit health systems with 94 hospitals, also posted higher-than-expected net income of $806.4 million on total revenue of $9 billion for the six months of fiscal 2018 ended Dec. 31. Detroit Medical Center, which is part of for-profit Tenet Health Care Corp., doesn't report independent financial results. However, Tenet also reported higher-than-expected first-quarter 2018 net income of $99 million, up from a net loss of $53 million in the same period during 2017. Revenue declined slightly for the 69-hospital chain to $4.7 billion from $4.8 billion for the first quarter. Analysts cited $250 million in companywide expense reductions for an 8 percent reduction in operating costs and a 12 percent increase in nonsurgical revenue, reflecting more urgent care business due to the severe flu season. SEE SYSTEMS, PAGE 18

HEALTH CARE

Wayne State-DMC future: Reconciliation, or extended breakup?

By Jay Greene jgreene@crain.com

Now that the Detroit Medical Center and Wayne State University have made a six-month deal to try to work out their differences, the big question is whether it will end in reconciliation or just an extended breakup. The two sides have agreed to talk for another three months to try to find a new long-term contract covering adult medical services agreeable

to both parties. Officials for DMC and Wayne State have agreed not to give interviews to the media for the time being in hopes the controversy cools down over the possibility their 100-year partnership will end, several sources who asked for anonymity told Crain's. DMC and Wayne State officials also declined to answer written questions. "With our mutual goal of wanting to do what is best for our patients, at

this time, both DMC and WSU feel it premature to answer your questions," said an email from Wayne State and DMC. "Point being that the advisory board was just formed and has not yet met. We want to be respectful of the work the committee will do." But sources familiar with the talks have told Crain's that DMC and Wayne State are quietly making plans for what happens next if their historic

affiliation ends in late November. Last week, the two academic medicine partners agreed to extend their 18-month contract a third time for another six months until mid-August. However, they also agreed that if after three months if a new partnership model can't be agreed upon, they would spend the following three months until November unwinding the relationship. SEE WSU-DMC, PAGE 19

SPORTS BUSINESS

The private equity playbook Gores’ tenure as Pistons owner shows benefits, limits of translating his forte to the professional sports world.

By Bill Shea bshea@crain.com

Tom Gores’ business portfolio is diverse: Machinery, textiles, data, logistics, IT, billboards, energy, marketing, media, hotels and even river barges. His Los Angeles-based private equity firm Platinum Equity LLC has bought more than 200 companies since Gores founded it in 1995 and claims $13 billion in assets under management from 30-plus businesses right now. They have many case studies of success, but one piece of Gores’ port-

folio has vexed him and his lieutenants: the Detroit Pistons. That came to a head again last week as he fired head coach and top basketball executive Stan Van Gundy. Gores is among a wave of successful private equity and venture capital investors who have varying levels of success, in terms of winning and losing, as NBA team owners. Gores and Platinum acquired the Pistons and related assets in 2011 for $325 million — a steal in terms of pro sports team prices. In 2015, he bought out his company’s 49 percent stake for an undisclosed sum. Platinum executives still aide Gores as team owner. The Pistons’ off-court business unit was restructured under Platinum and performance has improved, with Chief Marketing and Revenue Officer Charlie Metzger recently telling Crain’s that corporate sales revenue has doubled since relocating downtown last year as a tenant at the new Little Caesars Arena. It’s also building an approximately $85 million headquarters and practice facility in New Center.

Private equity vs. venture capital What’s the difference between private equity and venture capital? In general terms, private equity firms usually buy full or controlling ownership of established companies in need of restructuring, while venture capital invests in startups, often giving them less than full ownership and usually across many young companies to minimize risk. Some financial companies do both private equity and venture capital investing. For both, the ultimate goal is an exit, where the company or stake in the company is sold for a profit on the initial investment. — Bill Shea

SEE GORES, PAGE 20

PHOTO BY GREGORY SHAMUS/GETTY IMAGES

MUST READS OF THE WEEK Xeeva uses AI to help streamline supply chains

Horizon Global CEO resigns Redevelopment planned amid restructuring for Ann Arbor riverfront site

Madison Heights-based startup announced it received an investment of more than $40 million for AI development. Page 4

Mark Zeffiro stepped down only days after the release of first-quarter results, which included a $57.5 million net loss. Page 11

DTE Energy Co. and The Roxbury Group to bring a mixed-use development around a “world class” public park. Page 16

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Startup uses AI to help customers streamline their supply chains By Tom Henderson

“Having a Detroit office is something I will do with pride. I carry my Shinola bag to Silicon Valley and around the world and brag about where I am from. ”

thenderson@crain.com

Launching his second startup has been a lot less stressful than the first, said Dilip Dubey, the founder and CEO of Madison Heights-based Xeeva Inc., which uses artificial intelligence to help customers streamline their supply chains. Earlier in April, the company announced it had received an investment of more than $40 million, which was led by PeakEquity Partners, a private-equity firm in Radnor, Pa. That investment came after a steady growth in customers and revenue since 2014, when Dubey founded the company. Xeeva shares an address with his first company, Netlink Software Group America Inc., though not for long. Dubey says he is scouting a location in downtown Detroit and plans to move the company there as soon as possible. “I just started a search. Over the next three months, I should have a better idea of where. Having a Detroit office is something I will do with pride. I carry my Shinola bag to Silicon Valley and around the world and brag about where I am from," he said. "I want to be part of what is happening downtown.” Dubey said the launch of his first company was so arduous and stressful that he bears the emotional scars 21 years later. In its first year in 1997, the company that morphed into Netlink landed exactly one contract for $500. Dubey had quit a secure job as an engineer with General Motors Corp., and his wife, Sonal, had quit her job as a program manager with Delphi Corp.

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Dilip Dubey

Need to know

Xeeva announced it had got an investment of more than $40 million 



Second startup for Dilip Dubey

Uses artificial intelligence to help customers streamline their supply chains 

to have their first baby. Day and night, Dubey worked the phone from his condo in Troy, making cold calls to pitch the vision he and his co-founder, Anurag Shrivastava, had of supplying a wide range of IT services to small and midsized companies. And day and night, his cold calls got the cold shoulder and the quick brushoff. “To this day, if I get a cold call at 8 at night, I'll talk to the caller. I'll talk to them for as long as they want. I know how hard it is to be making cold calls,” he said. “Making those calls wasn't much fun, but it worked out.” Indeed. Netlink has more than 2,000 employees and facilities in 18 countries. Dubey is still the company's chairman, and Shrivastava is CEO. By the time Dubey quit as CEO to found Xeeva, Netlink’s revenue was $150 million. Of quitting his job to start Netlink, Dubey said “everything was at risk,” but he never had doubts. He was, he knew, an entrepreneur. As he said in a profile in Crain’s in 2007: “I had a great job at GM, but you could see where you were going to end up in 30 years. It didn’t seem exciting enough.” Dubey and Shrivastava met as undergrads in India in 1986, then went their separate ways. Dubey enrolled at the University of Michigan to earn his master's degree in mechanical engineering and was hired by GM. Shrivastava went to Clemson to study human-computer interfacing and joined the Paris-based Capgemini Group as a consultant. Dubey spent three years at GM while working on his Ph.D. in international business at Wayne State University. His thesis was on teamwork in global businesses. In 1997, the two reunited and formed Netlink, Dubey as CEO and Shrivastava as chief technology officer. The problem was convincing would-be customers their companies needed more sophisticated IT. Most companies had yet to hear of the internet and had no inkling how ubiquitous and important it would be. The cloud was one thing and one thing only — that thing going across the sky. And while many employees of small and midsized companies sat at computer terminals, they shared data with each other via reams of printouts from the company computer and interfaced with customers by fax. After the slow start, Netlink revenue grew briskly. By 2007, it had grown to about $60 million, and the company had about 1,000 employees, about half located in Bhopal, India.

Dubey’s launch of Xeeva was much easier. Instead of making cold calls, Dubey had a vast customer base from which to draw. He said he started using artificial intelligence, or machine learning, while at Netlink in 2012 to test out the premise that it could simplify procedures and cuts costs for supply-chain management, especially for large companies. “We thought AI could change the world of procurement, but we were surprised by how big the savings were,” he said. He said that at large companies, the procurement process is typically spread out over a variety of departments involving many people, with millions of things bought from hundreds or thousands of suppliers. “It’s very difficult without AI to understand in real time how best to manage the process,” Dubey said. Early feedback from customers was dramatic enough that he resigned as Netlink CEO in 2013, took a few employees with him and formally launched Xeeva on Jan. 1, 2014. “It’s easy for a customer to get his mind around AI when we quickly unlock $23 million in annual savings in the supply chain.” The company received startup funding from individuals associated with Netlink and from Resilience Capital Partners of Beechwood, Ohio. Netlink has no equity stake in the company, Dubey said. The name Xeeva derives from a Sanskrit work, jiva. “We looked at Latin words and at Sanskrit words for intelligence driving results,” he said. The closest he could come up with was “jiva,” which roughly translates as an entity imbued with a life force. “We put an X in front to make it sexier,” he said. Xeeva has about 180 employees and opened an office in Bhopal in March 2016. “We're in active hiring mode. We should add 30 to 40 more by the end of the year,” Dubey said. He said the company is generating revenue at a run rate of $20 million a year and has been growing revenue by 35 percent a year. The new funding round will focus on sales and marketing and improving the software, which is currently being used in 45 countries and offered in 18 languages. Customers include Detroit-based American Axle & Manufacturing Inc.; Stuttgart, Germany-based Daimler AG; and Sterling Heights-based Key Safety Systems Inc. In September, the company announced it had been granted two U.S. patents, one for its Virtual Data Manager and one for its Virtual Catalog Manager. The VDM takes data that is fragmented across various systems and departments in a company and organizes it, identifying savings opportunities. The VCM uses the VDM data to build catalogs for e-procurement. Dubey said the company has 20 more patents in process. SEE XEEVA, PAGE 5

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XEEVA

Mahindra makes giant leap into Detroit area

Paul Winn, a partner and co-founder of PeakEquity, a PE firm that invests only in software firms, generally with revenue between $15 million and $30 million, said an investment banker in San Francisco approached his firm in the second quarter last year about taking a stake in Xeeva. Peak Equity decided to invest after a due diligence process that included talking to Xeeva customers about cost savings. "It starts with leadership. Dilip is passionate, a natural leader with vision. And we like that whole idea of AI and machine learning to make things more automated that you can quickly bring value to customers," Winn said. "We do a very intense due-diligence process. Poor Dilip and his team were like, ‘Holy cow!' But we finally got to a greenlight. We think we are the right fit for Dilip and his team. Our value add is we offer more than money. We have a lot of operational experience that we bring. I've run big companies and small companies. We like to find these companies with good technologies that we can help grow faster and scale to become category leaders. We're very excited about what Xeeva can be," he said. Winn added PeakEquity typically writes a check for $25 million to $30 million, using institutional co-investors as needed. Co-investors were part of the Xeeva funding, but he declined to name them.

By Anisa Jibrell

FROM PAGE 4

Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

Automotive News

After an unsuccessful attempt to enter the U.S. auto market in 2010 as an import-only diesel pickup brand, India’s Mahindra & Mahindra has come back with a different plan: It will launch U.S. vehicle manufacturing at ground zero of the American auto industry. It is a rare play for an automaker wanting to get into the U.S. market. For the past 30 years, new competitors have shunned Detroit as a manufacturing site. The last non-Detroit 3 automaker to open an assembly plant in the Detroit area was Mazda in 1987, in a product-sharing deal with its then-part owner, Ford Motor Co. Other automakers from Japan, Europe and Korea have enjoyed generous incentives to open greenfield plants in states around the South and Midwest. Mahindra North America has a different strategy. It is investing $230 million in three Detroit-area operations: a warehouse and logistics center in Pontiac, a prototype and engineering operation in Troy and now a vehicle assembly plant in Auburn Hills. By itself, the 150,000-square-foot vehicle plant represents a modest investment of $22 million. But Mahindra, a Mumbai, India, industrial conglomerate with annual sales of approximately $19 billion, has bigger visions for Detroit. The plant will begin building the

MAHINDRA

Mahindra will make an off-road vehicle called the Roxor, similar to an old-style Jeep, at the new assembly plant in Auburn Hills.

Roxor, a retro offroad-only vehicle similar to a Willys Jeep. But Mahindra is also one of five manufacturers in the running for a $6 billion contract to design and Pawan Goenka: produce mail Had the red carrier vehicles carpet rolled out for the U.S. Postal Service. And longer term, Mahindra officials said they want to make use of their new Detroit engineering, manufacturing and supply chain facilities to develop other vehicles for the U.S. market.

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The company said additional projects in the pipeline will generate approximately 400 more jobs and an additional $600 million in local investment. “The state was happy to see a company coming in and setting up in Detroit because that doesn’t happen very often these days,” Pawan Goenka, Mahindra managing director, told Automotive News, a Crain Communications publication. “They sort of rolled out the red carpet for us and did everything they possibly could to attract us. It was a bargain investment for the state of Michigan. Mahindra obtained an $800,000 Michigan Business Development Program grant.

Another $1 million in job-training costs will be split between the state and Oakland Community College. Local governments have stepped up to help Mahindra with such routine requests as a parking lot expansion. Goenka said the idea of getting up and running with an off-road vehicle came out of Mahindra’s existing Detroit-area engineering and prototyping center. “Once we came here to do engineering, we soon found that we could use this sort of setup for more than just engineering,” Goenka said. “It became natural for us to expand to doing a product for the USA — working with what we already had in India and then significantly modifying it, and redesigning it for the U.S. market.” The overall project is a fraction of the size of another recently announced U.S. auto plant — the $1.6 billion assembly plant announced for Huntsville, Ala., by Toyota and Mazda in January. But Goenka said Mahindra is committed to Detroit. “Detroit has the richest pool of resources of anywhere in the world,” he said. “Therefore we decided that if we were to tap into high-end, high expertise, mature, experienced resources — the best place to come is here. “Any more expansion that we do is based on how the product performs,” he added. “We have no reason to think that we’ll go anywhere but (the) Detroit area.”

C R A I N ’ S D E T R O I T B U S I N E S S // M A Y 1 4 , 2 0 1 8

OPINION EDITORIAL

Drawing some QLine lessons

his month has seen rising scrutiny on the Qline, and its success or failure, on its first full year of carrying passengers up and down Woodward. The numbers aren't rosy. The system had sold only 130 annual passes, and the average daily ridership of 3,700 is well short of the goal of 5,000 riders per day, Crain's reported last week. There are a number of lessons that should be drawn from the QLine experience thus far as politicians debate whether to go to voters again for a regional transit millage: When it comes to transit, it's all about the network. A bus or train or streetcar is as useful as the number of potential destinations available, and how many times riders have to transfer in order to get there. The QLine, much like the People Mover, has a limited route that isn't tightly integrated into other forms of transit. Make it about getting people from Point A to Point B. Part of the problem with the QLine is that it shares its lane with traffic. During the line’s long gestation, various schemes were floated to run the streetcar in dedicated lanes, separated from traffic. This would have reduced delays caused by cars illegally parking on the track. Instead, the line was put in a shared lane to maximize ease of foot traffic to retail businesses. If people are choosing not to ride it, that appears to have been a mistake. Fixed-rail systems are always a risk. Rails mean there is no easy or cheap way to move more of the line to the center of Woodward. Or to adjust a route to respond to actual use patterns. Transit has to improve on existing options. It’s very hard to see how the QLine is much improvement over a bus, given that buses already ran up and down Woodward subject to the same obstacles. Any new transit additions should give people choices that improve on speed or convenience or add new destinations. The Qline wasn’t intended to be a transit system. It was an experiment, a pilot project that we supported in hopes that it would spur demand for expanded transit. The hiccups of sharing lanes with passenger cars have kept it from doing that. More experiments that might produce more flexible results are on the horizon. As Crain’s reporter Dustin Walsh reports on Page 1 of this issue, some of the same Southeast Michigan businesses that helped pay for the QLine are backing several public-private pilot projects to test new ways of getting people where they need to go, and where employers need them to go. Such experimentation is to be commended. Let’s hope that the lessons from the experiements are learned and put into practice.

LETTERS

Electric vehicle benefits clearer To the Editor: Earlier this year, I had the distinct opportunity to represent plug-in electric vehicle owners at the Electric Vehicle Technical Conference in Lansing at the invitation of the Michigan Public Service Commission. There I found the presentations and information shared by the automakers and the utilities to be very informative, which left me with encouragement that the initiatives and policies going forward will be to the mutual benefit of all involved parties regarding the broader-based adoption of electric vehicles in Michigan. To accelerate EV adoption, I believe it essential that: a) more affordable residential electric rate designs be approved for EV consumers, b) less costly Level 2 residential (240-volt) charging

station installations be made available, c) increased cooperative education/ advertising be produced and offered to the general public, automotive dealerships and utility customers and d) a partnership be established with the Environmental Protection Agency to develop “Energy Star” ratings for electric vehicles to be included on each vehicle’s window stickers. This should allow vehicle consumers to be more fully informed prior to purchasing/leasing and thus ease “range and cost anxieties.” In this manner, I predict EVs can eventually also be viewed by consumers as just another household major electrical appliance or device. Given the uncertainty of recent news events involving the Middle East affecting global crude oil prices and the fact that fossil fuels are nonrenewable energy sources, gasoline prices will undoubtedly fluctuate upwards. However, for most of us consumers, the benefits of electric vehicles have

already begun to outweigh any outdated perception of their disadvantages. The American Automobile Association’s recent (May 8) survey shows that 20 percent or 50 million Americans will likely go electric for their next vehicle purchase, up from 15 percent in 2017. With the OEMs producing ever-more-efficient EV fleets and the utilities implementing appropriate source ratings and consumer installation plans, as you read this article ask yourself — why haven’t I yet made the move to consider an electric vehicle? Murray Davis Redford Township

institutions involved in Eric’s project was quite a few more than I expected, but I remember how many were involved in the Book-Cadillac several years ago, so I should not have been surprised. Right now Corktown is hot, and investors are scrambling to get involved amid the reports of Ford Motor Co.’s interest. (Ford’s interest in the city has a history and includes Henry Ford II’s commitment for the Detroit Renaissance Center a few decades ago. It still seems ironic that Henry’s dream is now occupied by Ford’s crosstown rival, General Motors.) There will be another neighbor-

hood after Corktown. Investors will see a new opportunity, and all of a sudden, there will be a new hot spot. That is how rebuilding occurs. One brick at a time. For all the people who have watched the lack of development over the years, it is very satisfying to see it happening now. And it’s fun. Every day, every week, someone has a new idea and a new project that happily has the support of the mayor and his staff. Rome was not built in a day, and Detroit is not being rebuilt in a day. But it is happening. A million here ... a million there.

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

One small step at a time

ne of my favorite senators when I was growing up, Everett Dirksen, was known for his melodious voice. Legend has it that he had a saying: “a billion here, a billion there, and before you know it you’re talking about real money.” He was describing federal spending, but I would suggest that something similar is going on today in Detroit on perhaps a smaller but no less important scale. Last week, I attended a groundbreaking ceremony in Corktown announcing yet another multimillion-dollar construction project, put together by my friend Eric Larson

KEITH CRAIN Editor in chief

with the help of lots of his friends, to create one more piece in a citywide puzzle. That is how we are rebuilding our city, one brick at a time, a million here, a million there and before we

know it, we have ourselves a real renaissance. Business is seeing the opportunities every day for development and expansion. Our city government sees it as well and is giving these entrepreneurs the economic support and connections that they need to get their jobs done. Let’s not kid ourselves and think that even a second headquarters of Amazon would cure all our ills. But we are on a roll, and each day, we see a business announcing another project that will mean more jobs and more opportunities for everyone in our city. I must admit that the number of

M M st W

C R A I N ’ S D E T R O I T B U S I N E S S // M A Y 1 4 , 2 0 1 8

How my president’s tariffs would cripple my company

am a business owner, a proud Republican, and a voter who supports President Donald Trump’s campaign to level U.S. trade imbalances. I am also angry, frustrated and a little scared, because the unintended consequences of the president’s $50 billion tariffs on China would cripple my business in Auburn Hills and strip my 50 employees of their good-paying jobs. This is crazy. My company, Lucerne International, makes cast, stamped and forged components and assemblies for the automotive and heavy truck industries. Our largest contract is for the Jeep Wrangler. As one of the world’s only companies producing Class-A forgings, we make the door, hood, windshield and tailgate hinges that sit outside Wranglers like polished jewels. We’re damn proud of this work. It starts overseas — we have seven plants in Asia, where the hinges are manufactured. They are shipped to the Lucerne plant outside Detroit, inspected, repackaged and sent to another auto supplier for assembly before being shipped to Toledo for installation on the vehicle. That’s a supply chain: Thousands of American jobs. Billions of American dollars. And it’s all in danger. For some strange and destructive reasons, the proposed Trump tariffs include an obscure provision calling for a 25 percent tax on “iron or steel, aluminum, or zinc hinges and base metal parts … designed for motor vehicles.” Those are our hinges. As far as I know, no other company falls under this provision buried in a $50 billion list of products. For every $2,000 in duties proposed by the U.S., $1 directly impacts Lucerne. For the life of me, I can’t figure out why my certified woman-owned company in the heart of Trump country is being targeted. Beijing will pass that tax onto me. My customers — other U.S. auto suppliers and U.S. auto companies — will not absorb the cost, nor will U.S. auto buyers. It’s a tax on my Michigan company and my Michigan employees, and we can’t absorb it. Ninety-percent of our more than $40 million in revenue is tied to products that fall under the new tariff provision. Unless the president grants an exclusion, Lucerne will fold. I’m angry and scared. Scared that my president is about to make a terrible mistake. Scared for my employees, who love their jobs, who make good money, and who get their college tuitions paid. Scared for my community and my country, which is about to be blindsided by a bad policy forged of best intentions. On the big picture, the president is right: U.S. trade deficit needs to be tamed. But, please, not this way — and not when Lucerne is poised to grow to $50 million in revenue next year and expand its Michigan workforce by 25 percent. Grant us an exclusion, Mr. President. Give us time to finish our work and bring manufacturing back to Michigan. Because there is not enough capacity to make these parts anywhere

OTHER VOICES Mary Buchzeiger

in the United States, we were planning on opening a manufacturing plant in central Michigan to reshore this work. But it takes time to bend the arc of economic change — much more time than allowed under the

administration’s trade strategy. It also requires a re-engineering of the American workforce. With 4 percent unemployment, we have a hard time finding people to work in our plant outside Detroit today. One of the reasons for the strong Trump economy: More workers in the U.S. make products that are made from steel than make steel itself. Billions of dollars are pumped into the American economy by the unique and ingenious ways U.S. companies use steel and aluminum components — like we do at Lucerne. I wonder: Does President Trump

Ninety-percent of our more than $40 million in revenue is tied to products that fall under the new tariff provision. Unless the president grants an exclusion, Lucerne will fold.

Does he know that my little company in my little corner of Michigan would lose 90 percent of its business overnight? Does he understand that a 25 percent tax on the components Lucerne uses would evaporate my profit margins? That it would shut us down? I don’t think he does. Because I know my president cares — and I’ve got to believe he will change his mind, grant sensible exclusions, and help companies like Lucerne make America great again.

know that his tariff on imported components threatens almost every manufacturing job in Michigan?

Mary Buchzeiger is CEO of Auburn Hills-based Lucerne International Inc.

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C R A I N ’ S D E T R O I T B U S I N E S S // M A Y 1 4 , 2 0 1 8

FOCUS LAW

MAKING THE DEAL Know what you want, be willing to compromise, do homework for successful negotiations, attorneys say By Doug Henze

Special to Crain’s Detroit Business

Everything felt right during the job interview: the work sounded exciting, advancement seemed possible and the boss was jovial. But when the offer rolled in, the salary was a disappointment. The conversations that follow are an example of negotiation that nearly everybody has experienced. But the lessons that can be drawn from attorneys who do those negotiations for a living can apply to any time you need to negotiate in business life. In any type of negotiation, rule one is to know what you really want, said Terry Bonnette, a partner with Nemeth Law PC in Detroit. Bonnette has represented management clients in labor negotiations for 15 years. “You need to have a clear expectation of what your desired outcome is, as well as a clear understanding of what your acceptable outcome is,” he said. “Experience has taught us to have a plan B and a plan C.” Then, it’s a matter of communicating your wants — not always as simple as it sounds. “I’ve been in negotiations where

we spent entire days without receiving a clear demand from the other side,” Bonnette said. “A lot of negotiating is trying to dig your way through (the other side’s) poTerry Bonnette: sition to find out Have clear what their actual expectations. interest is.” He gives the example of a labor contract negotiation, where management sits firmly on its no-raise position, while labor refuses to move forward without a promised pay increase. “Parties get so tied to their positions they lose track of their interests,” he said. “Those are the cases where the labor dispute ends up in a strike.” Flexibility is the way forward. “Additional vacation time may be able to be given,” Bonnette said. If the negotiations are to settle a wrongful termination lawsuit, providing a letter of reference or hooking an employee up with a headhunter could

reduce the cash payout, Bonnette said. “We have had settlements before where the person admits they were really unhappy in their position,” he said. “What they needed was financial backing to be able to get training or go back to school.” Since labor contract negotiations typically involve many issues, “horse trading” may be the way to go. “The other side is saying they want ‘A, B, C,’ but they really want ‘A’ more than ‘C,’” Bonnette said. “Maybe if I give them ‘A,’ they will take ‘C’ off the table.” In a salary negotiation, a job candidate can use data to leverage better pay, said Bruce Sendek, a Detroit-based Butzel Long shareholder and chairman of the law firm’s litigation department. Sendek, who has practiced law since 1977, has negotiated employment contracts on behalf of executives. “It’s a question of doing homework,” he said, adding that job candidates need to research a given field’s going salary to make sure any offer is in line. “That’s easier today than it ever was, with Internet access.” And make sure the employer knows the value you’ll bring, he suggests. “(Tell them), ‘This is what I can do

ZONADEARTE/GETTY IMAGES

Need to know JJIn any type of negotiation, rule one is to know what you really want JJExpecting not having to compromise is a mistake JJAnother misstep is not developing data-driven arguments

for your company. I’ve turned around companies like yours,’” Sendek said. “It’s salesmanship, isn’t it? It’s knowledge of your product, and your product is you.” Employers often set corporate-wide limitations on year-overyear pay increases. There may not be an opportunity to make up for failure to negotiate a high enough salary coming in the door. At the same time, job candidates need to understand everything a potential employer expects of them. They may have to agree not to take a position with a competitor for two or three years after leaving the employer, for example. “Let’s say a position pays half a million dollars a year, and it seems like it’s the right pay and benefits,” Sendek said. “Then, someone hands you a restrictive covenant. Then, you might want more (money). It’s a huge thing today.” But negotiations aren’t always all about money, said Joshua Opperer, a partner with law firm Honigman,

M i l l e r, Schwartz and Cohn LLP in Detroit, who has been practicing law since 1995. “The human aspect is incredibly important,” he said. “There isn’t a one-size-fits-all (solution).” Opperer recently helped pair a private equity fund investor with a group of doctors who wanted to expand a group of clinics they had started and will continue to operate. “It’s very personal to them,” he said of the doctors. “They’re not just looking at maximizing the value.” In such negotiations, existing owners need to know their future role in deciding such things as how the company will operate company or award bonuses, Opperer said. In one case he handled, the owners were concerned about whether they still could bring their dogs to work, he said. Some negotiations involve multiple parties — throwing a wrinkle into any deal, Opperer said. Besides the parties at the table, players such as banks may be working in the background. “The buyer and seller may agree to one thing, but the question is if that deal is financeable,” he said. “Buyers and sellers can solve a lot, but not everything.” SEE DEAL, PAGE 9

C R A I N ’ S D E T R O I T B U S I N E S S // M A Y 1 4 , 2 0 1 8

The sticky question of salary history questions C Bruce Sendek: Expect to have to compromise.

Joshua Opperer: Isn’t always all about money.

DEAL

FROM PAGE 8

Opperer was one of the Honigman attorneys representing the Detroit Institute of Arts in Detroit’s “Grand Bargain” during the city’s exit from bankruptcy in 2014. The complex deal, using foundation donations, avoided the sale of the city-owned institution’s artwork, while preserving city pensions and satisfying creditors. While Opperer wouldn’t discuss specifics of the negotiations, he credits the deal with the museum’s continued operation and, in part, the city’s resurgence. Getting there meant finding common ground between many parties, including the DIA, the state of Michigan, the city of Detroit, several unions, the foundations, the court and the citizens of Wayne, Oakland and Macomb counties. “Nobody pulled punches but everybody understood that victory was not victory for one,” Opperer said. “I don’t know that you can compare any transaction to the Grand Bargain. For those in the state of Michigan and the city of Detroit, this was one of a kind.” Making that type of deal, or a much smaller one, means avoiding the pitfalls negotiations can bring, Opperer said. Those include: J Refusing to admit you don’t understand the complexities of a situation, rather than bringing in an expert; J Failing to treat other parties with respect, simply because you feel you have more leverage or deal-making experience, and J Letting ego drive a negotiation, so that giving something feels like a loss. “You can end up winning the battle but losing the war,” Opperer said. “Don’t just win to win a point. Two or three people can feel good about a compromise, if you approach it the right way.” Entering negotiations with the expectation of not having to compromise is a mistake Sendek sees clients make, he said. “(They say) ‘When I put a number on the table, that is what I want,’ he said. “They expect everybody will understand the reasonableness of what they want. “A real rookie mistake is setting the ceiling too low. You’ve got to set your demands for higher than you want … so you can have an opportunity to go back to the table.” Another misstep is not developing data-driven arguments, he said. If you’re selling a house, know the sale price of comparable homes. If it’s a lawsuit, research jury awards. “It has to be more than, ‘It’s what I want,’” he said. Negotiations also can fail because of timing, Bonnette said. “I think the most difficult negotiations are those in which the parties are not ready to reach resolution,” he said. “The parties don’t feel like their voices have been heard yet.” And negotiation doesn’t always work. Knowing when to quit is a time and money saver. “We try to figure out sooner, rather than later, whether it’s an unmakeable deal,” Opperer said.

an employers ask prospective employees about salary history? That’s the question many employers may be asking themselves after this week’s Rizo v. Yovino decision out of the Ninth Circuit Court of Appeals (covering California, Alaska, Arizona, Hawaii). In the case, female employee Aileen Rizo’s salary was below that of comparable male employees. The employer argued Rizo received the same step increases as males under the union contract but hired in at a lower rate due to her prior salary — with that being the only basis for the wage differential. The court held that considering prior salary alone or in combination with other factors could not justify the wage differential and therefore violated the Equal Pay Act. The act prohibits employers from discriminating against employees on the basis of sex by paying less wages “for equal work on jobs requiring equal skill, effort and responsibility performed under similar working conditions.” Exceptions are made for wages under a seniority system, merit system, system measuring earnings by quantity or quality of production, or a differential based on any other “factor other than sex.” The court determined that Rizo’s prior salary history was not a differential based on a factor other than sex; instead, a “factor other than sex” was limited to legitimate job-related factors such as a prospective employee’s experience, educational back-

OTHER VOICES Patricia Nemeth

Who are the comparable employees to the potential employee? Will you or are you paying male and female comparable employees equally as required under the act? Is there a defensible reason for not doing so under the Equal Pay Act? ground, ability or prior job performance. Further, the court indicated Rizo’s employer could not consider Rizo’s prior salary history at all, alone or in combination with other factors. The Rizo opinion goes beyond what is required by the Equal Employment Opportunity Commission. The EEOC’s Compliance Manual indicates that the Equal Pay Act al-

Corporate Law Experience

lows employers to consider prior salary history as part of a mix of factors (such as education, experience) where the employer “concludes that the prior salary accurately reflects ability, based on job-related qualifications.” Other courts such as the Tenth (covering Oklahoma, Colorado, Kansas, New Mexico, Wyoming) and Eleventh Circuits (Alabama, Florida, Georgia) have followed the EEOC’s interpretation. While the Rizo decision does not have an immediate impact in Michigan, it could shape future federal decisions which do impact Michigan. In EEOC v. J.C. Penney Company, a Sixth Circuit opinion which covers Michigan, the employer only provided spousal health coverage to employees whose spouses earned less than they did — referred to as the “head of household” provision (most likely males). The Sixth Circuit determined a legitimate business reason existed for the head of household provision; it was therefore based on a factor other than sex and did not violate the EPA. This “legitimate business standard” was based on a Ninth Circuit case and standard which Rizo has now overruled. Time will tell what the Sixth Circuit will do. It is likely they will no longer follow the legitimate business standard but will use the standard found in the EEOC Compliance Manual, as other federal courts have done. For Michigan employers, the EEOC Compliance Manual is also a

good place to turn for guidance. Michigan employers can ask about and consider prior salary history but should do so with the EEOC guidelines in mind. Consider prior salary history as part of a mix of factors (e.g. education, experience) and reach a conclusion “that the prior salary accurately reflects ability, based on job-related qualifications.” Who are the comparable employees to the potential employee? Will you or are you paying male and female comparable employees equally as required under the act? Is there a defensible reason for not doing so under the Equal Pay Act? These are key questions employers need to consider. Importantly, Rizo is emblematic of what is happening nationally. There is a trend toward banning employers from asking prospective employees about prior salary history in an effort to address gender wage disparity. A number of states and cities have passed such laws over the last year. A bill has also been introduced at the federal level. Michigan has adopted a counter trend approach. On March 26, 2018, Gov. Rick Snyder signed a bill to prohibit any local government in the state of Michigan from enacting a law prohibiting an employer from asking about prior salary history, as well as other select information). The law goes into effect June 24. Patricia Nemeth is the founder and president of Detroit-based labor and employment law firm, Nemeth Law.

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For tickets, visit www.crainsdetroit.com/insidescoop. Learn about unique branding and sponsorship opportunities by contacting Lisa Rudy at lrudy@crain.com.

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NOTABLE WOMEN IN MICHIGAN

At companies across Michigan, notable women navigate company restructurings, argue high-stakes legal cases and find efficiencies in manufacturing processes. These women also mentor, teach and volunteer in their communities. Through this series, Crain Content Studio will profile more than 200 women in business this year.

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Chamber highlights Mackinac Policy Conference schedule By Tyler Clifford tclifford@crain.com

Detroit Regional Chamber President and CEO Sandy Baruah on Tuesday highlighted the Mackinac Policy Conference 2018 agenda and central themes of the annual convention. As Michigan inches closer to the November elections, Baruah said this year’s conference will focus on three pillars that are “critically important issues for the state.” The pillars were crafted by the statewide committee chaired by PricewaterhouseCoopers LLP Managing Partner of Greater Michigan Ray Telang and serve as a theme for the various keynotes and panels on the schedule for the four-day event. The conference assembles about 1,700 leaders from across the state to discuss Michigan’s economic future. It’s scheduled for May 29-June 1 at the Grand Hotel on Mackinac Island. Panel discussions will cover topics such as mobility regulations, opioids, economic development, women in the workplace and education. The first session Wednesday opens with a program titled “Training for the Future: Aligning Michigan’s Industry and Workforce Needs.” “As I travel to speak with employers about talent and CEOs about what they need to grow, one issue is not only attracting talent but keeping their own people right to do their job effectively and safely,” Telang said. Detroit Free Press columnist Ro-

Ray Telang: Chair of this year’s conference.

Need to know

JJDetroit Regional Chamber conference scheduled for May 29-June 1 JJPanel topics include opioid epidemic, development, women in the workplace, education JJThree pillars focus on Michigan’s preparedness, the mobility disruption and trust

The conference assembles about 1,700 leaders from across the state to discuss Michigan’s economic future. It’s scheduled for May 29-June 1 at the Grand Hotel on Mackinac Island.

chelle Riley will moderate a panel titled “Detroit’s New Era of Collaboration on Education” that includes Mayor Mike Duggan, Detroit Public Schools Community District Superintendent Nikolai Vitti, Detroit school board Treasurer Sonya Mays and University of Michigan President Mark Schlissel. The three pillars of this year’s

Mackinac Policy Conference are: Is Michigan Prepared? Ensure Michigan is competitive for major business investment to continue growth and address issues that prevent sustained prosperity for all. J The Mobility Disruption: Strengthen Michigan’s readiness for the disruption that next-generation mobility will create for industry and society. J

Horizon Global CEO Mark Zeffiro resigns amid company restructuring By Dustin Walsh dwalsh@crain.com

Troy towing and trailer equipment supplier Horizon Global Corp. parted ways with its CEO and delayed its annual stockholders meeting last week amid a company restructuring and poor financial performance. Mark Zeffiro resigned Tuesday from the top executive role and from the company’s board only days after the company rel e a s e d first-quarter results, which included a $57.5 million net loss. That loss includes a $43.4 million noncash goodwill impairCarl Bizon: ment tied to its Named interim European operpresident. ations after a $200 million acquisition of Netherlands-based towing accessories manufacturer Brink Group. Adjusted earnings still resulted in a $2.9 million net loss in the first quarter, despite rising sales. Horizon named Carl Bizon, formerly its Americas president, to interim president and CEO as the company starts its search for a permanent CEO, the company said in a press release. James Tindell, division finance officer, will replace Bizon as the interim president of its Americas division.

Sandy Baruah: Focus on critical issues for state.

Need to know

Horizon Global CEO Mark Zeffiro resigns amid company restructuring J

J Carl Bizon becomes interim president and CEO J Company is consolidating operations, reducing U.S. salaried workforce by 30 percent

“Carl has extensive knowledge of our products, customers and suppliers, as well as the overall industry,” board Chair Denise Ilitch said in a statement. “His experience running each of our three divisions, coupled with a long track record of achievement in manufacturing and operations, make him an excellent fit to lead Horizon Global during this period. Under his leadership, we are confident that the Company will continue to make progress, improving efficiency and productivity and reinforcing the broad appeal of our successful brands in key geographies worldwide, to drive improved profitability and increased value for our shareholders.” As a result of Zeffiro’s resignation, the company moved its annual stockholders meeting at the Hilton Garden Inn in Troy from Tuesday to May 15. Horizon’s stock price is down 69 percent to the mid-$5 range as of last week from its 52-week high of $19.26 reached last summer. The company began a cost-savings plan in March to address its financial pressures. The plan, which includes reducing its U.S. salaried

workforce by 30 percent by consolidating its Solon, Ohio, and Mosinee, Wis., offices into its Plymouth location and increasing production in low-cost locations like Mexico and Eastern Europe, is expected to result in cost savings of $3 million to $5 million this year. Once fully implemented, the plan is expected to result in up to $12 million in cost savings annually, the company said. The company has recognized it has struggled to maintain production and shipping levels out of several of its plants and is seeking to increase output at its Mexico plant and Kansas City distribution center. Zeffiro, 52, joined Horizon Global in 2015 when TriMas Corp. spun off several of its brands to form the publicly traded company. Before that, he served as executive vice president and CFO at TriMas and was a former vice president of finance at Black & Decker. While Horizon declined to detail whether Zeffiro’s resignation was forced or voluntary, his executive severance package is expected to be worth several million dollars, including two years of his $650,000 base salary and payout of his stock awards and two years of health benefits. Bizon joined Horizon in January after serving nearly two years as CEO of Jayco Corp.’s Australian operations. Before that, he served as president and managing director of TriMas’ Asia Pacific, Europe and Africa operations.

J Trust: Restore confidence in the critical institutions of government, media and business to build trust in society. Featured speakers include: J Gov. Rick Snyder J Paula Kerger, president and CEO, Public Broadcasting Service J Richard Edelman, president and CEO, Edelman, whose firm does an

annual study on trust in American society J Don Butler, executive director of connected vehicle platform and product, Ford Mobility J John Boehner, former speaker of the U.S. House of Representatives J Peggy Noonan, columnist at The Wall Street Journal and a best-selling author J John King Jr., former U.S. Secretary of Education; president and CEO, The EducationTrust The Mackinac Policy Conference will feature a gubernatorial debate on Thursday featuring the three leading candidates of each the Republican and Democratic parties.

PANEL DISCUSSION:

The Future of Mergers & Acquisitions

Moderator: Jay Greene, Reporter, Crain’s Detroit Business Wright Lassiter, CEO, Henry Ford Health System Joan Budden, CEO, Priority Health Ewa Matuszewski, CEO, Medical Network One David Hefner, Vice President of Health Affairs, Wayne State University Enormous mergers that blur the lines among payers, middle men and providers are remaking the health care landscape: CVS-Aetna, Cigna-Express Scripts, United Healthcare/DaVita, Walmart/Humana, and more. What should we expect, and what will the effects be once it’s all sorted out? Does Southeast Michigan need more consolidation or is it the right mix now for patients and employers?

Thursday, June 21 9-11:30 a.m. Somerset Inn 2601 W. Big Beaver Individual ticket: $80 Reserved table of 10: $850 Young Professional: $56 Are you a Crain’s Detroit Member? Email us at cdbevents@crain.com to receive your individual ticket discount.

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CRAIN'S LIST: LARGEST MICHIGAN ACCOUNTING FIRMS

Ranked by number of Michigan employees Rank

Company Address Phone; Website

Managing partner(s)

Number of employees in Michigan Jan. 2018/ 2017

Number of employees Southeast Michigan Jan. 2018/ 2017

Number of Michigan Number of employees Michigan engaged in employees audit/ engaged in accounting taxes

Number of Michigan employees engaged in consulting

Number of Michigan employees engaged in other

Number of CPAs Michigan Jan. 2018/ 2017

Plante Moran PLLC 27400 Northwestern Highway, Southfield 48037 (248) 352-2500; www.plantemoran.com

James Proppe

1,632 1,599

1,154 1,142

521

334

408

369

631 630

Deloitte LLP and its subsidiaries 200 Renaissance Center, Suite 3900, Detroit 48243-1895 (313) 396-3000; www2.deloitte.com/us/en.html

Mark Davidoff

1,521 1,071

1,374 992

582

257

430

252

315 319

PricewaterhouseCoopers LLP 500 Woodward Ave., Detroit 48226 (313) 394-6000; www.pwc.com

Ray Telang

793 787

805 NA

397

194

109

301 322

Ernst & Young LLP 777 Woodward Ave., Suite 1000, Detroit 48226 (313) 628-7100; www.ey.com

George Lenyo

735 673

640 586

253

185

195

102

314 258

Rehmann 1500 W. Big Beaver Road, 2nd Floor, Troy 48084 (248) 952-5000; rehmann.com

Ryan Krause

590 627

275 296

174

109

151

156

327 266

BDO USA LLP 2600 W. Big Beaver Road, Suite 600, Troy 48084 (248) 362-2100; www.bdo.com

Keith Klucevek John Marquardt

525 518

122 135

124

132

269

167 158

UHY LLP Chrysler House, 719 Griswold St., Suite 630, Detroit 48226 (313) 964-1040; www.uhy-us.com

Thomas Callan

390 380

136

129

163 164

KPMG LLP 150 W. Jefferson Ave., Suite 1900, Detroit 48226 (313) 230-3000; www.kpmg.com

Betsy Meter

375 369

306 310

156

84 83

Doeren Mayhew & Co. PC 305 W. Big Beaver Road, Suite 200, Troy 48084 (248) 244-3000; www.doeren.com

Chad Anschuetz

225 241

223 239

96 108

Yeo & Yeo PC 5300 Bay Road, Saginaw 48604 (989) 793-9830; www.yeoandyeo.com

Thomas Hollerback

214 200

38 23

87 85

Rhonda Huismann

207 207

10 13

Crowe Horwath LLP 55 Campau Ave. N.W., Suite 500, Grand Rapids 49503 (616) 774-0774 ; www.crowehorwath.com/offices/ grandrapids/

84 87

Andrews Hooper Pavlik PLC 691 N. Squirrel Road, Suite 280, Auburn Hills 48326 (248) 340-6050; www.ahpplc.com

William Mulders Jr.

153 NA

22 NA

67 NA

Grant Thornton LLP 27777 Franklin Road, Suite 800, Southfield 48034 (248) 262-1950; www.grantthornton.com

Jim Tish, Detroit office managing partner

116 109

48 53

Maner Costerisan 2425 E. Grand River Ave., Suite 1, Lansing 48912 (517) 323-7500; manercpa.com

Jeffrey Stevens

110 NA

3 NA

55 49

Baker Tilly Virchow Krause LLP 2000 Town Center, Suite 900, Southfield 48075 (248) 372-7300; www.bakertilly.com

Patrick Killeen

91 103

40 48

Clayton & McKervey PC 2000 Town Center, Suite 1800, Southfield 48075 (248) 208-8860; www.claytonmckervey.com

Robert J. Dutkiewicz

75 78

38 36

Cohen & Co. B 21420 Greater Mack Ave., St. Clair Shores 48080 (586) 772-8100; www.cohencpa.com

Robert MacKinlay

71 66

26 30

Gordon Advisors PC 1301 W. Long Lake Road, Suite 200, Troy 48098-6319 (248) 952-0200; www.gordoncpa.com

Patricia Bojanic and Kevin Klein executive committee

62 62

33 32

MRPR Group PC C 28411 Northwestern Highway, Suite 800, Southfield 48034 (248) 357-9000; www.mrpr.com

Angela Mastroionni

51 51

26 26

Croskey Lanni PC 345 Diversion St., Suite 400, Rochester 48307 (248) 659-5300; www.croskeylanni.com

David Croskey

48 D 48

34 D

38 D

29 D 29

Cole, Newton & Duran CPAs 33762 Schoolcraft Road, Livonia 48150-1625 (734) 427-2030; www.cndcpa.com

Arthur Cole

47 45 E

16 15

Derderian, Kann, Seyferth & Salucci PC 3001 W. Big Beaver, Suite 700, Troy 48084 (248) 649-3400; www.DKSScpas.com

Ursula Scroggs

45 37

25 23

Mattina Kent & Gibbons 1214 N. Main St., Rochester 48307 (248) 601-9500; www.mkgpc.com

Vincent Mattina Jr.

42 43

27 29

20 20

RSM US LLP 719 Griswold St., Suite 820, Detroit 48226 (313) 335-3900; rsmus.com

Larry Keyler

40 NA

Echelbarger, Himebaugh, Tamm and Co. 2301 East Paris Ave. SE, Grand Rapids 49546 (616) 575-3482; www.ehtc.com

David Echelbarger

39 41

0 0

18 14

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

B Formerly Godfrey Hammel, Danneels & Co. PC. Bought by Cohen & Co. Ltd. of Cleveland in January 2016. C Merged with Hantz Rhoades & Doehrer LLC , effective Jan. 1, 2017. The combined firms operate as MRPR CPAs & Advisors with offices in Southfield, Ann Arbor and Saline. D Company estimate. E Acquired Bartos, Hoffer, Lustig, and Tomes PC and Michael G. Thomas CPA on Oct. 1, 2016. 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 // M A Y 1 4 , 2 0 1 8

WOMEN IN LEADERSHIP

A few questions for: Carla Walker-Miller By Rachelle Damico

Special to Crain’s Detroit Business

Carla Walker-Miller is the president and CEO of Walker-Miller Energy Services LLC. The company evaluates and reduces energy use by installing products such as LED light bulbs, thermostats and low-flow shower heads. The Detroit-based company has contracts with utilities companies in Michigan, Ohio and Illinois, including DTE Energy Co. Founded in 2000, Walker-Miller Energy Services has 100 employees and generated $28 million in revenue last year. Walker-Miller received her bachelor of science degree in civil engineering from Tennessee State University in Nashville. From there, she climbed the corporate ladder for more than 18 years before starting her own company distributing electrical equipment for her former employer, ABB Inc., which operates in robotics and automation technology. When the economy crashed, Walker-Miller Energy Services shifted its business model to energy solutions. Why did you decide to study engineering in college?

When I was a senior in high school, I knew my parents weren’t going to be able to pay for college. I asked my guidance counselor which jobs made the most money that didn’t require an advanced degree, and they said engineering. It was that cut and dry. When I started college in 1981, there was a move to recruit more black and female engineers. I received a full-ride scholarship. It wasn’t a convoluted, long decision at all. They paid for me to go to school. That’s why I’m an engineer. You worked in corporate America for 18 years. What was that like, and

why did you decide to move on?

How did the economic downturn affect the company?

I entered corporate America expecting to be successful, recognized and rise to a level commensurate with my capabilities. That was not possible. Something kept people from seeing my capabilities as equal, and my persona as worthy compared to the typical white male engineer. There was a constant need to validate my right to be there. I had a “pseudo-leadership” position, which is where you have the title and not the authority. I remember putting together a market analysis. Almost immediately after I distributed it, I got a call asking who wrote the paper. I had to defend that I actually authored the work. Later, I found out I was making less than the average salary for my position. When the correction was made, it was flippant.

New orders dwindled, and orders in progress were canceled. Our revenue was $800,000 in 2012. I had exhausted all resources to keep the business going. Between 2010-2012, it was trying to hold on and not go out of business, and this was what was happening all over the economy. How were you able to stay in business?

I started looking at energy solutions in 2007-2008, when energy legislation was being considered, and finally passed in Michigan. We became a subcontractor of energy-efficiency services, and that introduced us to the market. With the one contract under our belt, we became the energy-efficiency services company for the Detroit Public Lighting department. That’s where we cut our teeth and learned the industry. It progressed from there.

What led you to start your own company?

I saw a business opportunity that allowed me to leave with excitement, as opposed to leaving feeling demoralized. I proposed a business arrangement to spin off as a black female-owned distributor of electrical equipment for the company I exited, ABB. It was a win for ABB and the companies I was selling to, because they were trying to diversify their supplier base. I developed a reputation for being good at what I did. I knew the equipment, I knew the customers, and I knew the market. What I didn’t realize, is that when you leave a huge company, your corporate cred does not translate with you. I had to reintroduce myself as an independent entity. In spite of that, I managed to have annual average revenues through 2009 of $10 million a year.

How do you hire?

Our philosophy is to hire for character and train for skill. In my 18 years as a business owner, by far the biggest “aha” moment has been how many people I’ve released for character and integrity issues. You can have the best engineer in the world, but if they can’t communicate and be a part of the team, they can bring the entire group or company down. I’m also committed to hiring Detroiters. We track our Detroit-based team members every week. Our goal is 70 percent right now, and I’m proud to say we’re at about 59 percent. A job can change the life of a person, a family, or a community. It’s important to me to be able to do that by reaching into the city of Detroit. Carla Walker-Miller is the president and CEO of Walker-Miller Energy Services LLC

Design Core Detroit program to recognize ‘inclusive design’ By Sherri Welch

A Montreal bakery in its city’s design competition used plywood finishes with paint dusting to resemble floor, repurposed thrift store furniture and handwritten signs to connect with its neighborhood customers.

swelch@crain.com

Design Core Detroit is rolling out a design competition for businesses to recognize “inclusive design” that has created spaces welcoming to all. “It’s about the kinds of signals that say a place is welcoming to people of all different backgrounds,” said Executive Director Olga Stella. That could mean taking physical ability into consideration, with a building or place designed to accommodate people in wheelchairs or others with strollers. It might be exterior cues that make all people feel welcome or a menu or store displays are written in a way everyone can understand and that aren’t intimidating because of the font or language used. “A lot of those things are sometimes a little unconscious,” Stella said. “What we’re hoping to list out are projects that really stand out.” Inclusive design takes into consideration the spectrum of human diversity and the individual experiences of each person to create places or things with broader social impact.

DESIGN CORE DETROIT

“A lot of those things are sometimes a little unconscious. What we’re hoping to list out are projects that really stand out.” — Olga Stella, Design Core Detroit executive director

The concept is the focus of Design Core Detroit’s action plan released in April and part of its larger strategy of positioning design industries to advance inclusive economic growth in Detroit. The new contest, “Commerce Design: Detroit”, is among the first efforts to come from the action plan. It’s aimed at raising awareness of and access to professional design services for neighborhood small businesses, while also lifting up the impact of commercial design

projects on the communities in which these businesses reside. Developed over 20 years ago in Montreal — another UNESCO City of Design — the competition is now licensed in more than a dozen cities. It will recognize projects, submitted by the business owner and design team, completed in the city of Detroit, Highland Park or Hamtramck in the past five years. The goal is to show others what inclusive design looks like, said Stella. For example, during a trip to Montreal to benchmark businesses that had won awards there, the Design Core Detroit team visited a bakery. It wanted to be a neighborhood bakery and not a gentrifying force, Stella said. It didn’t have a lot of resources but wanted to communicate its essence of making quality baked items. Its design incorporated that by using basic plywood, dusted with paint to make surfaces look like work tables in a kitchen, an opening to allow customers to watch bakers working, repurposed chairs and tables from a local thrift store and hand-lettered signs. “They were simple touches. They

wanted to say this is really good, high-quality food, but for everybody in our community,” Stella said. Entries for Commerce Design: Detroit are due by June 30. AIA Detroit and Design Core Detroit are hosting a workshop/information session on the contest on Friday morning. Ten winning projects will be announced at an Oct. 25 ceremony at the Garden Theater in Detroit. A People’s Choice vote will be opened at that time to allow the public to select their favorite. The 10 winning businesses will be featured in a Design Crawl Open House. Design Core has tapped AIA Detroit to manage the competition, which is supported by a $50,000 grant from Bank of America and a $25,000 grant from the Hudson-Webber Foundation. Hudson-Webber’s grant is supporting Design Core Detroit’s bid to bring good design forward and allow communities to have input, said President Melanca Clark. “It’s interesting because a lot of the design can signal gentrification,” she said.

C R A I N ’ S D E T R O I T B U S I N E S S // M A Y 1 4 , 2 0 1 8

DEALS & DETAILS

CALENDAR

ACQUISITIONS & MERGERS

TUESDAY, MAY 15

Meritor Inc., Troy, commercial truck supplier, has acquired substantially all of the assets of AA Gear & Manufacturing Inc., Howell, low-to-medium volume batch manufacturer of gear and shafts, and its subsidiaries. Also, Meritor recently launched a new RS180 series rear axle with a maximum gross axle weight rating of 35,000 pounds for fire and rescue applications and MOX-32, a 32,000-pound rated frontdrive steer axle for heavy-duty and off-highway applications. Websites: meritor.com, aa-gear.com J Detroit-based private equity firm Huron Capital Partners LLC's building automation and energy services platform, Albireo Energy, has acquired Energy Management Control Corp., Long Island City, N.Y., provider of building automation and integration services. Websites: huroncapital.com, AlbireoEnergy.com, emcccontrols.com J ATA National Title Group LLC, Farmington Hills, a title insurance agency, has acquired the assets of Greater Metropolitan Title LLC, a title agency with offices in Chicago's Loop, Arlington Heights, Vernon Hills and Oak Brook, Ill. The new company will be branded GMT Title Agency. Websites: atatitle.com, grtmet.com J

CONTRACTS Anesthesia Associates of Ann Arbor and Midwest Anesthesia Consultants, Ann Arbor, provider of anesthesia and pain management services, has partnered with J.W. Childs Associates, Waltham, Mass., a private equity firm, for growth equity capital to support expansion and combine with J.W. Childs’ portfolio company Siromed. Websites: a4anesthesia.com, jwchilds.com, siromedusa.com J The Michigan Manufacturing Technology Center, Plymouth, has been tapped by the National Institute of Standards and Technology’s Manufacturing Extension Partnership program to lead a national effort to prepare MEP centers to roll out cybersecurity services to small and medium-size manufacturers across the U.S. Websites: the-center.org, nist. gov/mep J Near Perfect Media, Bloomfield Hills, a public relations firm, has been named the agency of record for Andy Elder, Bingham Farms; Dan Gutfreund Realty Group, Birmingham; Leila, Detroit; Sky Foundation Inc., Bloomfield Hills. Website: www. nearperfectmedia.com J Qualitech, Bingham Farms, a technology integrator and software reseller, has installed its hosted VOIP phone system at Dembs Development, Farmington Hills, a construction, development and management company of industrial real estate, and Supportive Home Health Care LLC, Troy, a home health care provider. Website: qualitech.net J The National Veterans Business Development Council, Detroit, a veteran-owned business certification organization, has contracted with Toyota Motor Corp., Japan, an automotive manufacturer, as its newest corporate sponsor. Toyota will now recognize NVBDC as its certification

organization for all service disabled and veteran-owned businesses. Websites: nvbdc.org, toyota.com J DaO Detroit, Detroit, maker of plant-based hair care products, has partnered with Detroit Is The New Black, Detroit, a boutique. Websites: daodetroit.com, detroitisthenewblack.com J Metro MLS of Wisconsin, Wauwatosa, Wis., a real estate listing service, and the Danville Area Board of Realtors, Danville, Ill., a real estate agency, are now offering access to their MLS data through zipForm Plus and zipFormMLS-Connect, automated data entry solutions from ZipLogix, Fraser, a real estate technology company. Also, ZipLogix has released ListFlash, a real estate listing tool that enables brokers to immediately broadcast an announcement to agents within their brokerages about properties with just-signed listing agreements. Websites: ziplogix.com, usamls.net/DanvilleIL, metromls. com J Icom North America LLC, New Hudson, manufacturer and distributor of alternative fuels systems, and Gascomb SA, Mexico City, Mexico, a car repair company, signed an agreement for Gascomb to exclusively distribute Icom alternative fuel systems, which include propane autogas vehicle systems for gasoline and diesel engines and dynamic compressed natural gas, liquified natural gas and renewable natural gas systems. Websites: icomnorthamerica.com, gascomb.com

NEW PRODUCTS J Xoran Technologies Inc., Ann Arbor, a medical technology company, has released MiniCAT 2020, a small, low-dose, cone-beam scanner specialized to assist physicians in the diagnosis of sinus disease. Website: xorantech.com J Geometric Results Inc. (GRI), Detroit, a managed service provider, has launched Ascend, a statement of work management program. Website: GeometricResultsInc.com. J Gale Group Inc., Farmington Hills, part of Cengage Learning Inc. and a publisher of research and reference resources, has launched a new digital archive to help researchers explore the development, actions and ideologies behind political extremism. “Political Extremism & Radicalism in the Twentieth Century: Far-right and Left Political Groups in the U.S., Europe and Australia” is a digital archive documenting radical right and fascist movements, communist and socialist groups and new left activists. Also, Gale has achieved conformance certification for Learning Tool Interoperability 1.0 and Deep Linking from IMS Global Learning Consortium to integrate Gale content into learning management systems such as Schoology, Blackboard, Canvas and Moodle. Website: gale.com J Bar’s Products Inc., Holly, manufacturer of leak repair products for vehicles, has introduced Bar’s Leaks CVT Transmission Fix, engineered to stop slips, sluggishness and hesitation while sealing any leaks in continuously variable transmissions. Website: barsleaks.com

Submit Deals & Details items to cdbdepartments@crain.com

Keeping Information Safe: What You Need to Know. 11:30 a.m.-1:30 p.m. Washtenaw Economic Club. Cybersecurity panel Lanse LaVoy, vice president of Information Assurance, Quicken Loans; Fernando Maymi, lead scientist, Soar Technology Inc.; Mike Hanley, vice president of security, Duo Security Inc., and Alon Yaffe, director of product management/data protection, Barracuda Networks, discuss the top cybersecurity threats today and how businesses and individuals can protect themselves against them. Washtenaw Community College. Free members; $77.50 nonmembers. Phone: (734) 677-5060; email: washtenaweconclub@wccnet.edu

THURSDAY, MAY 17 13th Annual Nonprofit Management Conference. 8 a.m.-3:10 p.m. Troy Chamber of Commerce. Training for nonprofit professionals, board members and volunteers through breakout sessions on core areas of nonprofit management: governance/operations, marketing, technology, human resources/volunteers/staff, fund development/ donor relations, leadership/board development, strategic planning and finance/accounting. Walsh College. $60 members; $110 nonmembers. Contact: Jessica Minnick, email: theteam@troychamber.com; website: troychamber.wpengine. com/events/13th-annual-nonprofit-management-conference

UPCOMING EVENTS Mayor Dennis Archer Luncheon.11:30 a.m.-1:00 p.m. May 22. Livonia Chamber of Commerce. Former Detroit Mayor Dennis W. Archer recently wrote a book about his life story, “Let The Future Begin.” Archer will speak about the book and decisions he Archer made to guide Detroit into its current renaissance. Schoolcraft College, Livonia. $45. Contact: Laura Tahmouch, phone: (734) 427-2122; email: tahmouch@ livonia.org; website: www.livonia. org/events/details/mayor-dennis-archer-luncheon Building a Brand That People Will Love (Or Possibly Hate). 6:30-8:30 p.m. May 22. American Marketing Association Detroit. Eoin Comerford, CEO of Moosejaw, will lead a discussion of successful branding tactics. Comerford will also give additional insight behind Walmart’s acquisition of Moosejaw, and what

this means for the future of the Moosejaw brand. Topics include: Aligning brand identity with overall mission, strategies for building a brand’s desired reputation and instances in which sacrificing a sale is necessary. Lawrence Technological University. $45 nonmembers, $35 members, $20 students. Contact: Whitney Swistock, phone: (248) 7971976; email: ama.detroit7@gmail. com; website: amadetroit.org Women in Blue Celebration. 8-9:30 a.m. May 23. Detroit Public Safety Foundation. A celebration of the women within the Detroit Police Department, Detroit Fire and EMS and the programs and initiatives taking place to protect women and children in the community. A portion of all individual ticket sales will support the investigation and prosecution of Aquilina rapists identified by backlogged rape test kits. Judge Rosemarie Aquilina, who presided over the Larry Nassar abuse trial, will be the keynote speaker. A Women in Blue Officer of the Year and Women in Blue Firefighter of the Year will also be recognized at the event. MGM Grand Detroit Grand Ballroom. $125. Contact: Carter Drewry, phone: (313) 628-2169; email: cdrewry@detroitpublicsafety.org; website: detroitpublicsafety. org Virtual Employment Revisited. 9:00 a.m.-noon. May 23. Nemeth Law PC. Nemeth Law attorneys will discuss the challenges of managing virtual employment and a variety of related labor and employment law topics, including: when working from home works and when it doesn’t; data security, confidentiality and privacy issues when working remotely; is telecommuting required as a reasonable accommodation for a disability?; wage and hour issues of offsite work and best practices for implementing (and rescinding) work-from-home practices. MSU Management Education Center, Troy. $75. Contact: Pamela Perkowski, phone: (313) 567-5921; email: pperkowski@nemethlawpc. com; website: nemethlawpc.com

Tony James

A Conversation on the U.S. Economy and the Retirement Challenge. 11:30 a.m.-1:30 p.m. May 24. Detroit Economic Club. Tony James, executive vice chairman, Black-

stone, discusses trade war fears, employment rates, the deficit and tax cuts. Westin Book Cadillac. $45 members; $55 guests of members; $75 nonmembers. Website: econclub.org The Patient is Waiting. . . For a Dose of Disruption. 11:30 a.m.1:30 p.m. June 7. Detroit Economic Club. Dave Ricks, chairman and CEO, Eli Lilly and Company, talks about unleashing technology and the change it causes on health care. Westin Book Cadillac. $45 members; $55 guests of members; $75 nonmembers. Website: econclub.org Global Security Means Local Problems: Security; Intelligence; Space; Cyber & Politics. 11:30 a.m.-1:30 p.m. June 13. Detroit Economic Club. Former Congressman Mike Rogers discusses the rapid changes of technology, the emergence of new (and old) Mike Rogers national security problems, and how the nexus of technology and security will change the way we look at and interact with the world. Ford Field. $45 members; $55 guests of members; $75 nonmembers. Website: econclub.org Tech Talk and Tech Trek 2018. 9 a.m.-6 p.m. June 15. Ann Arbor Spark. Tech Talk: Speakers will each have six minutes to talk about their innovations, what they see happening in the world of tech, and what they foresee for the future. Tech Trek: Technology companies will open their doors to the public and showcase their latest innovations. Michigan Theater and downtown Ann Arbor. Free. Website: techtrek. annarborusa.org 2018 Women’s Business Enterprise National Council National Conference & Business Fair. June 19-21. Great Lakes Women’s Business Council. “Discover the Difference,” is an event for Michigan’s women business owners to meet with corporate purchasing representatives of national and international corporations. Cobo Center. Passes range from $200-$1,050. Contact: Robin Kinnie, phone: (734) 838-3862; email: rkinnie@greatlakeswbc.org; website: wbenc.org To submit calendar items visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” from the drop-down menu that will appear. Fill out the submission form, then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events

PEOPLE NONPROFITS J Sheryl Arb to vice president, marketing and communications, Community Foundation for Southeast

Michigan, Detroit, from senior director, Global Internal Communications, Kellogg Co., Battle Creek. 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.

C R A I N ’ S D E T R O I T B U S I N E S S // M A Y 1 4 , 2 0 1 8

DTE, Roxbury Group to redevelop Ann Arbor riverfront industrial site By Tyler Clifford tclifford@crain.com

DTE Energy Co. and The Roxbury Group are partnering on a project to bring a mixed-use development centered around a “world class” public park along the Huron River in Ann Arbor. The 11-acre Broadway Park project could bring up to $75 million or more of investment to the vacant former Michigan Consolidated Gas Co. industrial site, the companies said. Bruce Peterson, senior vice president and general counsel for DTE Energy, cited Roxbury’s experience with “challenging developments” and “high-quality work” as a reason to partner with the Detroit-based developer. DTE owns the land that borders the Ann Arbor Amtrak Station to the south. Under the agreement, Roxbury — a Detroit-based real estate development company — will secure financing to purchase the property and build the development, while DTE has approval authority over design. Roxbury will buy the land upon completion of remediation and other permits, said David Di Rita, Roxbury founder and principal. “If a project like this were occurring in Detroit, there would be a number of incentives that are not really available in Ann Arbor, so a lot of this will be privately financed,” he said. “We may be able to get some brownfield funding.” The project would transform the vacant site as an extension to the surrounding parks and trails along the river. An early blueprint includes plans for 100 condominiums, 20,000 square feet of retail space — including a

DTE ENERGY CO.

DTE Energy Co. and The Roxbury Group are teaming on a development to build a park, condos and retail sapce along the Huron River in Ann Arbor.

“high-quality restaurant” facing the Huron River, an 8,000-square-foot year-round pavilion and a boutique hotel on the vacant site. Peterson envisions the project will entail a division of medium-rise buildings with retail that serves neighborhood and recreational purposes. He did not disclose many details about the proposed condominiums, other than they would range from one- to three-bedroom residences. About 80 percent of the project makes way for a park along 1,200 feet of restored river shoreline, a news release said. “Our development agreement with Roxbury Group is the result of DTE Energy’s commitment to developing this site in a way that highlights the natural beauty of the riverfront while preserving much of the land for the public’s enjoyment,” Gerry Anderson, chairman and CEO of the Detroit-based utility, said in a statement. “Broadway

Park is designed to be an iconic development and public space that further solidifies Ann Arbor’s reputation as one of the state’s premier communities.” DTE has contracted with three firms to assist with early design planning: Detroit-based Hamilton Anderson Associates is the principal architect of the project, Ann Arbor-based SmithGroup/JJR is handling land use planning and engineering work, and SME Consultants of Plymouth is working to complete remaining remediation work on the site. Peterson estimates about 80 percent of site remediation has been completed, including the full rehab of the shoreline. Project for Public Spaces, a New York nonprofit, has been contracted to design and create programming for the park. The firm will lead a series of focus groups to get input from the community on the design and development process.

SPOTLIGHT Gemphire Therapeutics gets new CEO

Livonia-based Gemphire Therapeutics Inc. has installed Steven Gullans as its new president and CEO. Gullans, who became a board member two years ago, had covered both roles in the interim since Mina Sooch’s resignation nearly a year ago. His career spans nearSteven Gullans ly three decades in starting, investing in and consulting for biotech companies, a news release said. The new president and CEO wants to focus on gemcabene, a therapeutic drug candidate for cardiovascular and metabolic disease that he sees has market potential. Prior to Gemphire, Gullans co-founded health care venture capital firm Excel Venture Management as managing director. He decided to step down as managing director of the Boston business to focus on his new role. Gullans also co-founded Orionis Biosciences LLC, a private multinational preclinical stage therapeutics company, in Boston. Gullans was an associate professor at Harvard Medical School and Brigham & Women’s Hospital in Boston for nearly two decades. He advises the Cleveland Clinic and Partners HealthCare on innovation and commercialization, a news re-

lease said. Gullans holds a biology degree from Union College, a Ph.D. in physiology from Duke University and postdoctoral work at Yale University.

Creative Many Michigan leader plans departure

Creative Many Michigan’s President and CEO Jennifer Goulet, who has led the arts advocacy group since 2009, plans to step down by September. There are no immediate interim or transition plans, she said. Instead, Creative Many’s board of directors, in consultation with Goulet Jennifer Goulet and the leadership team, is taking a look at the future needs of the organization before making a decision on her successor. “I am super excited about where this organization is,” Goulet said, but the opportunity to be mindful of what she’ll do in the future is very exciting. Goulet, who served as a board member for the organization when it operated as ArtServe Michigan, became development director in 2007 and president and CEO in 2009. During her tenure, she’s led Creative Many in research, public policy, professional practice, funding and communications efforts.

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

www.crainsdetroit.com/onthemove

LAW

Maddin, Hauser, Roth & Heller, P.C. Maddin, Hauser, Roth & Heller, P.C., is pleased to announce the addition of attorneys Earle I. Erman, Julie Beth Teicher, Craig E. Zucker, David H. Freedman, and David M. Eisenberg to its firm’s Creditor Rights, Bankruptcy and Insolvency Practice Group.

NONPROFITS Joe Hinrichs 2018/20 Community Giving Campaign Chair

United Way for Southeastern Michigan United Way for Southeastern Michigan selects Ford Motor Company Executive Vice President and President of Global Operations Joe Hinrichs, to lead its 2018/20 Community Giving Campaign. Hinrichs succeeds FCA CEO Sergio Marchionne, who has chaired United Way’s 2016/18 campaign ending in July. As chairman, Hinrichs and his executive cabinet will lead fundraising efforts to further strengthen United Way’s impact throughout the tri-counties around Health, Education and Economic Prosperity.

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

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ASIAN VILLAGE FROM PAGE 1

Apartments and townhomes and possibly 15,000 square feet of office space are also part of the project. Those developments would be nestled into a walkable, open-air retail development wrapped around a four-acre lake with Japanese gardens, a walking path and pavilion area surrounding the lake. Chicago-based Yeager, Planning and Design is serving as archiScott Aikens: tect on the projCarrying on the ect. family business Environmental studies and other due diligence and city approvals are expected to take about a year and a half to complete, said G. Scott Aikens, vice chairman and director of leasing for Robert B. Aikens & Associates LLC, the same company developing the recently announced, $100 million “Five & Main” mixed-use retail project in Commerce Township. Aikens, with his brother, Vice Chairman Robert Bruce Aikens Jr., is carrying on the business his father started Asian companies, especially those from Japan, have long been telling the county and city of Novi that they don’t have a place to grab a bite, get a drink and mingle with each other, said Irene Spanos, director of economic development and community affairs for Oakland County. Other major metropolitan areas have some sort of Asian town, either a Little Tokyo or Chinatown, she said. “We have Greektown and Mexicantown. Now we’ll have an Asian Village as well,” Spanos said. “Having this asset in our community will not only retain the businesses here because it shows we care about their nationality (and) their investment in our state, but it will be an incentive for other businesses looking to locate in the U.S.” New businesses “are going to look at Southeast Michigan because of this Asian Village” and because of the local talent in the region, she said. The project began as a conversation with one of Novi’s businesses, One World Market, a subsidiary of global seafood and Asian products supplier True World Group LLC. The market asked the city and county to help it identify a developer for a prototype market and food hall it wanted to build in Novi. The larger vision for Asian Village evolved from there, with One World Market choosing Aikens as the developer on the project. The 25,000-square-foot, prototype market and food hall will offer sushi, ramen noodles, bento boxes, an Asian bakery and other goods to anchor the development. New Jersey-based True World Group, which locally also owns and operates Noble Fish in Clawson, said the success of its current market in Novi and the city’s support for Asian and Japanese businesses is why it chose Novi for the new prototype store. It expects that store to serve as the pilot for a national expansion of the concept. Having an anchor tenant that wants to move forward “is an impetus to get the project off the ground,” said Cindy Ciura, a retail consultant who is helping Oakland County identify developers for major retail projects in the county. She is also a consultant to Aikens on the Asian Village

CRAIN CRAIN’S DETRO I T ’SBDUETROIT S I NBEUSINESS S S // M A Y 1 4 , 2 0 1 8 and Five & Main projects. “Having the market there will be a big draw, especially the fact that they want to do a prototype,” she said. To round out the property needed for the village, Aikens is negotiating for the purchase of just more than 3 acres of land surrounding Ecco Tool Co. from the business and separately is in negotiations with residential developers to handle the housing component of the project, which will include about 200 units of apartments and townhomes. Ecco Tool, a small, family-owned company that manufactures cutting tools, has occupied that property since 1967, 12 years after owner Floyd Peterson’s father started the company. The company would continue to operate from its 8,000-square-foot building, selling only the property around it. “This has been huge for me to let go of part of a family heritage,” Peterson said. “If it wasn’t a really good project, I wouldn’t do it.” It’s not about money, Peterson said, but rather about helping out his city and bringing people to the area he considers its downtown. “This is something the city really wants to see go through. Therefore, it made me take a second look at it,” he said. As planned, the development would be akin to similar retail developments geared largely to Japanese expats on the West Coast, Aikens said.

“We have Greektown and Mexicantown. Now we’ll have an Asian Village as well. Having this asset in our community will not only retain the businesses here because it shows we care about their nationality (and) their investment in our state, but it will be an incentive for other businesses looking to locate in the U.S.” — Irene Spanos, director of economic development and community affairs for Oakland County

“One purpose of these developments is to connect individual and families to their homelands so that (they) feel more at home.” Michigan is home to 11,663 Japanese people, per the American Community Survey from 2016, local demographer and Pleasant Ridge Mayor Kurt Metzger said. The only other Midwestern state to

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

May 14, 2018 17

INDUSTRIAL PROPERTY

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MARKET PLACE REQUEST FOR PROPOSALS

REQUEST FOR PROPOSAL (RFP) FOR GENERAL CONTRACTOR The Detroit-Wayne Joint Building Authority (DWJBA) owner/operator of the Coleman A. Young Municipal Center (Center) is seeking Request for Proposals (RFP) from qualified firms who desires to provide general contracting services. The Center is a 745,000-square foot office building located in the heart of downtown Detroit. The DWJBA anticipates the following Scope of Work will be accomplished under the general contractor: ∂ New Security Portal at Larned Entrance ∂ Subterranean work to correct water intrusion and waterproofing The full RFP and drawings from the Architect, SmithGroup JJR, will be available for download on May 8th, 2018 at the following BOX folder: https://app.box.com/s/uygvmvjc72gmwh4akovnlcjn4dbxnojh Currently, the schedule is uploaded to that folder. Please attempt to access this folder and download the file before May 8th so if you have any difficulties, we can address them. There is a MANDATORY pre-bid meeting at 2:30 p.m. (EST) on Wednesday, May 16, 2018 in the Erma Henderson Auditorium on the 13th floor of the Center. The deadline for questions related to this RFP is May 21st, 2018 by 5:00 p.m. (EST) Interested firms must submit (4) four sealed bid copies no later than Thursday, May 31, 2018 at 2:30 p.m. (EST) Public Opening to Follow To: Detroit -Wayne Joint Building Authority Coleman A. Young Municipal Center 2 Woodward Avenue, Suite 1316 Detroit, MI. 48226 Attention: Deb Craig, Senior Construction Manager, Hines-Porcher

count more Japanese people among its residents is Illinois with 18,355. Within Michigan, Oakland County is home to just less than half of Michigan’s Japanese population, and Novi is the city with the most Japanese residents, just under 2,300. The only Midwestern city with a larger concentration of Japanese people is Chicago, Metzger said.

Japanese residents have made the area around Novi, Northville, Plymouth and Canton Township home because that’s where many Japanese research and development centers and companies have located, Metzger said. “If it’s geared toward Japanese, that’s the right place to do it,” he said. In the three-mile radius around the Asian Village site, 19 percent of the population is Asian, with an average household income of $119,000, Aikens said. And there are 220,000 Asians living within 50 miles of the Novi site. Aikens is looking for regional, national and international merchants that serve those populations, he said. “I’ve enjoyed doing the leasing at a place like the Village of Rochester Hills; this thing adds a whole new challenge in looking for ... Asian business owners serving their customers,” Aikens said. “That’s a whole new challenge, which is exciting.” Asian Village is a natural fit for Novi, said Sheryl Walsh-Molloy, director of communications for the city. In addition to enhancing the city’s business retention and attraction efforts, “the village will be a regional destination for all to enjoy and share, as well as a wonderful way to educate and share the Asian culture with others,” she said. Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

JOB FRONT POSITIONS AVAILABLE

SENIOR DESIGN ENGINEERS - MOLEX, LLC Molex, LLC seeks Sr Design Engineers for Rochester Hills, MI loc. to dev & design new electro mech product designs & product extensions. Master’s in Mechanical Eng +2yrs exp. or Bachelor’s in Mechanical Eng +5yrs exp req’d. Req’d Skills: Must have exp designing powertrain harness connectors, DOE, FEA, 2D tolerance analysis; CAD sw (NX - modeling & drawings); DFMEA, DVP&R, GD&T, Eng Change Requests, Mech assist force analysis simulation; wire harnesses & wire termination (crimping, splicing) techniques; design for connector current (A) rating & thermal mgmt; wire bundle size prediction; harness connector validation & testing; statics, strength of material, thermal dynamics, vibration; manufacturing methods (moldflow, injection molding, stamping, welding). Send resume to: MLXjobs@kochind.com, Ref: XY SOFTWARE TEST ENGINEER -HARMAN CONNECTED SERVICES JOB CODE STE-M-07 - NUMBER OF POSITIONS: 01 Job Duties: Cond sys level SW validation for proj/team on automotive infot sys.Dev test strategies & plans in inline business & prod req. Initiate & foster team wide acti learning & adopt new & relev state of the art tech for automotive infot, consumer electr, embedded sys, SW testing & test tools. specs, user guides, use cases, comparable prod & prev known bugs to create & maintain test plans, test designs & test cases. manual & auto SW test. session based explor test, endurance based test/life test to verify func over long periods or ignit cyc. Iden SW issues & trans problem issues into the issue track sys with supp log files & data. Rec, processes & anal data with PC based tools & test instr. Docu test & create test rep. Partic in req rev, dsgn rev & other acti in FW of an Agile/Scrum dev process. Part in internal & cust test drives. tech supp for the resolution of various cust & interdep issues on need bas. setup of modules/wiring & maintain test benches & test vehicles approp Req: Bach’s deg (or foreign Equiv) in CompSci, Eng, Info tec, Electro/Telecomm or rel & 5 Yrs of prog exp IT indus of which 3-5 yrs Exp into Automotive Infot Test or Mobile devi/OTA sol test is accepted. OR Mast’s deg (or foreign Equiv) in CompSci, Eng, Info Tech, Electro/Telecom or rel & 3 yrs of exp in Auto Infot Test or Mobile devi/ OTA solu tes is accepted. Exp: Work k’ledge func & non-funct SW test SW test lifecy & var test des method (func, perf, stress load, risk-based, scenario, etc.,). Exp autom test tools & FW, Defect mgmt Tools (Jira etc., Test case mgmt tools Config mgmt tools (Perforce, GIT,). MS Office, Jira, Assembla, Doors, Perforce, QNX, Linux, Android, Wi-Fi, BT, GSM/WCDMA/CDMA/LTE. Work Loc: Livonia, MI. hav other assign in other loc in U.S. inclu Novi, MI. Send resumes to Harman Connected Services, Attn: Mahesh GM/Job Code STE-M-07, 2002 156th Avenue NE #200, Bellevue, WA 98007. TECHNICAL LEAD, 1 NO. JOB CODE: TL-LIV-01, HARMAN CONNECTED SERVICES Work with Busn analy, Developer & tester for complex proj during SDLC & STLC. Write Arch itecture/ Design specs. Def scope of funct area for prog based proj charter. Accept deliv from internal & external supp based on defined acceptance criteria,Triaging Bugs Monitor (KPI) & stab for spec func area Sync proj plan & sched (work pack defi & deli) with Prod mgmt & mutual sign off. Manage dep & interfaces to func areas & subproj proact Ens the deli features in scope, time & qlty. Ens traceability & consis of req, feature maturity, test specs, defects & change req Effort esti for Change Req from Prod mgmt. Ens the imple of def test strat & docu the achieved results. Rev Test case Test Spec & Scenarios. Req: Bach’s deg or (foreign Equi) in CompSci, Eng, Electr or rel with 5 yrs of work exp in IT. Or Alt Master’s deg or (foreign Equi) in Comp Sci, Eng, Electr or rel with 3 yrs work exp in IT Exp: Android Auto or Linux p’form, Java & C/C++ native, Linux kernel or dri, Func Test, Sys Test. K’ledge in IVI Radio/Tuner dom (AM/FM/RDS/SXM/HD/DAB/SDARS tech) & Navi Dom (Dead Reckoning & Route calc) Good U’stand of Schematics & PCB layouts of Infot Head unit & diff SoC archit like Intel Apollo, Raspberry Pi ARM. Android App FW Archit (AFW) k’ledgeTuner Hardware (Dirana & Saturn), Navig HW (UBlox, Gyro & Accelerometer) SW Ver control thro GIT, Clearcase, Perforce, U’standing diff satellite constellations like GPS, GLONASS, Galileo & BeiDou Exp in Dead reckoning, route calc algori, CAN diagn & diff vehicle CAN archit Work Loc: Livonia MI, & other locations in U.S. incl Novi, MI. Apply: send resumes to Harman Connected Services Attn: Mahesh GM /Job Code TLLIV-01, 2002 156th Avenue NE #200, Bellevue, WA 98007.

C R A I N ’ S D E T R O I T B U S I N E S S // M A Y 1 4 , 2 0 1 8

SYSTEMS FROM PAGE 3

The University of Michigan Health System declined to provide financial results for the first six months of fiscal 2018, which ended Dec. 31. Ascension Health Michigan, a 14-hospitalWarren-based subsidiary of St. Louis-based Ascension Health, also did not respond to a request for the first six months financial data for 2018 ending Dec. 31. For fiscal 2017 ended June 30, Ascension Michigan reported operating income of $$85.2 on operating revenue of $3.84 billion. This was a 34.3 percent decline in operating income from $129.7 million and a 4.6 percent increase in operating revenue from $3.67 billion in 2016. Ascension owns 151 hospitals nationally.

Henry Ford and tax reform Henry Ford increased operating income 54 percent to $146 million, for a 2.5 percent margin, in 2017 from $95 million the previous year, a 1.7 percent margin. That’s despite absorbing a 3.5 percent average wage increase for its employees and $12 million in information technology expenditures at recently acquired Allegiance Health in Jackson, said Robin Damschroder, Henry Ford’s CFO. Driven by gains in outpatient revenue and new patients, revenue increased about 5 percent to $6 billion from $5.7 billion. Henry Ford includes a 1,200-physician medical group and a health insurance company, Health Alliance Plan. Investment income increased 102 percent to $95 million from $47 million because of a rising market and new investment strategy that shifted cash to equities for greater returns, Damschroder said. “We recruited new providers to the system and we had 152,000 new patients and now serve 1.59 million people,” an 11 percent increase in patients, Damschroder cited as one reason for the nearly 5 percent in revenue gains. Henry Ford also increased outpatient visits by 11 percent and outpatient encounters, which includes emergency visits and outpatient surgeries, by 16 percent to 3.3 million. In addition, online medical appointments grew 40 percent and there was a 25 percent growth in the highest complexity patient referrals over 50 miles, she said. Henry Ford also ended a threeyear, $300 million expense reduction and process improvement plan that generated $179 million in cost savings and enhanced revenue in 2017. Over the past four years, the integrated delivery system generated a combination of savings and growth of $641 million, she said. A new five-year redesign and transformation program that began this year is expected to return about $200 million a year in growth and cost savings, Damschroder said. Looking ahead, she saidsaid, Henry Ford is seeing continued strong outpatient volume and with good expense management “we are planning for an increase in operating income.” On federal tax reform, which some experts said would benefit investor-owned hospitals more than nonprofits, Henry Ford broke about even. “When you look at our financial statement, we were very fortunate. We did total refunding before tax reform, so we dodged that impact,” she said. The Republican tax reform plan,

Henry Ford Health System saw operating margins get fatter despite rising wages and IT expenses.

“We are projecting volume increases, a lot of strategic investments from our family and patient-centered care planning, to expand our quality programs and to invest in population health infrastructure.” — John Kerndl, CFO, Beaumont Hospital

while reducing taxes and returning billions of dollars to corporations and individuals, eliminated tax-exempt bond refinancing, or advanced refunding, for nonprofit hospitals. Damschroder said Henry Ford doesn’t plan to refinance bonds until at least 2019. “We will finish our new strategic plan in May and make plans then around the capital side,” she said. The federal tax reform also places a 21 percent excise tax on covered nonprofit executives making more than $1 million per year. “We are going to see a slight impact on that, but we get a decline in the tax rate on taxable entities, so one netted out the other,” she said. But Damschroder said Henry Ford executives are more concerned about a possible $25 billion cut in Medicare reimbursements to pay for the federal tax cut. Under federal budget rules, the Medicare program has an automatic payment cut when tax revenue drops. “We don’t know the date, but it is in the language, so it is a possibility anytime,” she said.

Integration at Beaumont The eight-hospital nonprofit system increased net patient revenue by 1.5 percent to $4.4 billion in 2017, but because of $90 million increase in salaries and benefits to employees, operating income declined 11.4 percent to $177.6 million, a 4 percent margin. From 2014 to 2016, Beaumont’s operating margins rose steadily from

Like other health systems, Beaumont is seeing rising staff wages.

BEAUMONT HEALTH

HENRY FORD HEALTH SYSTEM

3.1 percent in 2014, 3.4 percent in 2015 and 4.6 percent in 2016. The 4 percent margin posted last year was lower, but according to plan, said John Kerndl, Beaumont’s CFO. As most hospital systems, Beaumont saw inpatient volume decline while outpatient surgeries, primarily orthopedics, ambulatory visits and emergency department activity increased. “We have data that we share that goes through five or six health systems” in Southeast Michigan “and we were the only health system that saw market share increase in discharges and emergency visits,” Kerndl said. Expenses rose 2.1 percent to $4.26 billion. That number was driven mostly by a 5.5 percent increase in wages, benefits, overtime and tuition reimbursement to $2.5 billion. “We made a big investment in staff in 2017 and there will be more in 2018,” Kerndl said. “We had additional tuition reimbursement in 2017 of $900,000. Folks were going back to school.” In 2017, Beaumont also completed its program to create a common pay scale for all its various job descriptions to improve its competitiveness in the job market, Kerndl said. For example, intensive care nurses across the eight hospitals are on the same pay scale based on education and longevity. “No one lost on hourly rates,” he said. “(Pay) only went up.” Beaumont’s bottom line improved 12 percent to $321.6 million from $286.7 million as investment income rose 91 percent to $183.5 from $95.7 million. “There were two drivers of that. The markets were very strong last year and we had a highly engaged investment committee that had great investment results,” Kerndl said. But Beaumont decided to turn its pension liabilities for the former Botsford Hospital to MassMutual by entering into an annuity purchase, he said. “This purchase not only took significant risk off Beaumont but also benefits the participants in the plan as they will receive a form of guaranteed benefits from the insurance company,” Kerndl said. As a result, Beaumont took a $26 million non-cash hit on pension ex-

“When you look at our financial statement, we were very fortunate. We did total refunding before tax reform, so we dodged that impact.” — Robin Damschroder, CFO, Henry Ford Health System

penses in 2017, and this year will take another $44 million noncash expense. “Doing this closes the book on Botsford’s legacy frozen, terminated plan and eliminates future risk and volatility related to the those liabilities,” he said. Looking ahead to 2018, Kerndl said he expects a similar year, except he projects an increase in operating income. “We are projecting volume increases, a lot of strategic investments from our family- and patient- centered care planning, to expand our quality programs and to invest in population health infrastructure,” he said.

McLaren’s buying spree Despite an 8 percent drop in operating income to $25.1 million and slight 1.3 percent dip in total revenue to $939,000 for the first quarter of 2018, David Mazurkiewicz, McLaren’s CFO, said McLaren is continuing on from the best year in its history when it earned total income of $307 million for 2017 ended Sept. 30. “We had another great year and are continuing that into 2018,” Mazurkiewicz said. “We had some decline in premium revenue (for McLaren Health Plan), but that is because of how the state accounts pass through money from the feds.” Mazurkiewicz said inpatient discharges dropped a little but outpatient activity more than took up the slack. “We are continuing to see revenue improve. We have a major emphasis on growth and are making sure we demonstrate quality and keep our expenses down,” he said. Earlier this year, McLaren closed on a deal to acquire Caro Community Hospital and MDwise, a nonprofit HMO in Indianapolis. The system will file a certificate of need request later this year to build a new $450 million replacement hospital in Lansing. It also has a letter of intent to acquire Huron Medical Center, a small hospital in Bad Axe. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

C R A I N ’ S D E T R O I T B U S I N E S S // M A Y 1 4 , 2 0 1 8

WSU-DMC FROM PAGE 3

Earlier last week, DMC, the Wayne State medical school and its 400-physician University Physicians Group agreed to form a 14-member advisory task force to discuss new partnership models and a way to stay together. “We are pleased that a joint advisory committee will be working on issues of mutual significance and will include representation of (Wayne State medical group) department chairs and DMC leadership,” Jack Sobel, M.D., medical school dean, and Charles Shanley, M.D, CEO of University Physicians Group, said in an email to faculty. In a joint statement last Monday, DMC and Wayne State said the committee will work to “develop a new model for the delivery of clinical and administrative hospital and clinic services.” DMC has said they are done discussing the current model. Two Wayne State sources told Crain’s that DMC has agreed to pay Wayne State “a little more” than the current contract for the next six months. Doctors said the DMC-WSU clinical services and administration contract is worth about $14 million annually, or about $1.16 million per month. “For decades, (DMC and WSU) have worked together to provide topnotch medical care for Detroit residents and state-of-the-art training and research opportunities for the (medical school),” DMC CEO Tony Tedeschi, M.D., said in the joint statement. “Our relationship over the years has impacted thousands of physicians and patients, and based upon my discussions with Dean Sobel over the past week, I am hopeful about the possibility that we can continue our partnership in delivering excellent care to patients and growing our respective institutions.” Sobel and Shanley said in their email to faculty that “medical students’ and residents’ education were not going to be affected” and that the existing contracts with DMC for medical education would continue for at least the next five years “without interruption,

no matter the clinical contract.” Janis Orlowski, M.D., chief health officer with the Association of American Medical Colleges, said DMC’s termination letter on contract talks with Wayne State on May 1 was a rarely used business tactic, one little used between academic partners. “This public display was very aggressive and places a lot of concern with the community and patients over the future of health services at DMC,” Orlowski said. “It must concern medical students at Wayne State who are at DMC. And any new resident starting July 1 must be on edge.” While DMC and Wayne State publicly express hope for a reconciliation, the two partners continue to develop backup plans if the restarted contract talks fail. For example, DMC and its parent company, Dallas-based Tenet Healthcare Corp., are lining up replacement doctors for clinical services and administration if the contract ends. DMC has contracted with a national hospitalist company to provide physicians and is negotiating with another health care company, say several sources close to the negotiations. Crain’s has previously reported that DMC has reached out to universities to replace or supplement Wayne State that include the University of Michigan, Michigan State University, Central Michigan University and University of Toledo. Those negotiations are extremely complex and sources say a new academic relationship could take two to three years to fully implement. A physician source with longtime contacts with DMC and Wayne State doctors and administrators told Crain’s that DMC also is in talks with a Michigan-based hospital company related to issues with the Wayne StateDMC contract. But the talks could include other health care deals. Grand Blanc-based McLaren Health Care Corp. has met with DMC Tenet twice in the past three weeks — holding lengthy meetings — to talk about possible business deals, how McLaren might help out with DMC’s situation with Wayne State and the disruption a breakup with Wayne

FUND FROM PAGE 1

Eleven firms are targeting a total of $657 million in fundraising this year. “Each time we’ve got more organizations involved. It’s great validation as our reach gets larger,” Chris Rizik, Renaissance’s CEO and fund manager, told Crain’s. “We had 10 limited partners in our first fund. We have more than 25 in this one.” One of those new investors is Southfield-based Barton Malow Co. “Startups often possess the right model and offerings to capitalize on emerging trends, but lack the access to capital. Meanwhile, many corporations have capital but are looking for new ways to innovate in their industry,” Ryan Maibach, the CEO of Barton Malow, said in a press release. “Renaissance brings together the best from both worlds, in order to bring to market innovations that help its corporate partners and that create new growth opportunities for the region.” Part of the business model is to get corporate investors who assess a young company’s products and technologies and eventually become customers. DTE Energy Co. is a return investor, having invested $10 million in each of the Renaissance funds. According to Gerry Anderson, DTE’s chairman and CEO, what began as an investment as

would cause, according to two sources with knowledge of the talks who requested anonymity. McLaren owns Barbara Ann Karmanos Cancer Hospital on the DMC main campus in downtown Detroit. Karmanos purchases some support services from DMC and leases operating rooms at DMC Harper University Hospital. McLaren CEO Phil Incarnati has previously confirmed to Crain’s that he has discussed the possibility of McLaren acquiring DMC’s Children’s Hospital and Huron Valley Medical Center with Tenet Vice Chair Keith Pitts. However, Tenet executives have rejected a piecemeal sale. In January 2011, DMC was sold to Vanguard Health Systems in a $1.5 billion deal. A little more than two years later, in June 2013, Tenet acquired 28-hospital Vanguard in a $4.3 billion deal. Sources have estimated DMC’s value had risen to about $1.8 billion on about $2.1 billion of annual revenue, which was about 35 percent of Vanguard’s annual revenue. DMC’s current value is estimated to exceed $2 billion. In a statement, McLaren confirmed that the 14-hospital nonprofit system is involved in “seven potential transactions of significance,” said Kevin Tompkins, the system’s director of marketing. He declined to name them. “Some of these are Michigan-based. And others are out of state opportunities,” Tompkins said in an email to Crain’s last week. “All of them are covered by non-disclosure agreements.” A DMC source said DMC has contracts ready to be activated with private doctors and at least one national hospitalist company “if WSU fails to meet expectations.” The DMC source said Tenet has a problem with Wayne State negotiating a deal with Henry Ford while at the same time publicly stating it wants a long-term deal with DMC. “(Wayne State) is trying to sell the idea ... (it can) sell services to both DMC and Ford” at the same time, the DMC source said. “UPG (doctors) have told me they will reach out and negotiate for each department. UPG

docs are very disappointed and are turning against their leadership.” Sources say talks for an affiliation agreement between Wayne State and Henry Ford remain very much alive. They say it could include pediatrics and, depending on how the talks go with DMC, could include an expansion of the current medical education agreement and a new adult services affiliation. While Wayne State officials don’t believe a “transformational” agreement can be reached with DMC in any contract, they still want a fully integrated academic medicine model that calls for close cooperation and strategic planning between the university and a hospital partner or multiple hospitals. One model frequently mentioned by Wayne State officials is the University of Pittsburgh Medical Center model. UPMC is a nonprofit health system with 30 hospitals in its network and a close affiliation agreement with the University of Pittsburgh and its medical and health sciences schools. However, the university transferred its faculty practice plan to UPMC 20 years ago. But several Wayne State doctors said they also would prefer the model at the University of Chicago with its Pritzker School of Medicine and 900-physician faculty practice group. However, University of Chicago owns its 808-bed teaching hospital that includes the Bernard A. Mitchell Hospital and the Comer Children’s Hospital. Wayne State doesn’t own a hospital. “The best arrangements are aligned at the top with common and unified strategic goals and a strategic mission that runs through clinical departments that also can have departmental contracts but tied together with overall goals,” Orlowski said. But Orlowski said if DMC is proposing to simply contract department by department with Wayne State, “that is very old school.” She said modern medical schools and clinical partners typically have an overarching contract that aligns institutions at the very top — at the board level and C-suite executives.

Departmental or clinical service line goals can include targets for quality of care, reducing length-of-stays of patients, and joint recruiting of physicians to target growth strategies, she said. “There can be lump sum payments for clinical services and also financial support for faculty (including education and research) in an integrated contract,” Orlowski said. Of the 151 medical schools in the U.S., Orlowski said there are many models that work. Some medical schools have mixed clinical models that contract with multiple hospitals. “Faculty goes to more than one hospital system,” she said. “It is not ideal, but it can work.” If DMC and Wayne State dissolve their partnership, Orlowski said it could take at least two years to completely disengage their joint medical student programs. “Medical students will follow the faculty if they leave (DMC) because there is no clinical services agreement to see patients,” Orlowski said. “Medical students could round with private doctors. It could be allowed by (Liaison Committee on Medical Education), but it is not usual. There would have to be an agreement” with LCME. Several hundred Wayne State medical students receive clerkship training at DMC, but also at Henry Ford Hospital, Beaumont Hospital Dearborn, John D. Dingell VA Medical Center, St. John Crittenton Hospital, Barbara Ann Karmanos Cancer Hospital and St. Joseph Mercy Oakland. For residency programs, Orlowski said because most are sole-sponsored by DMC the only issue is whether DMC can replace Wayne State faculty doctors with private doctors who understand residency program rules. “There are doctors in the private sector who understand how to educate residents because they were residents once,” Orlowski said. “Doctors must know how to teach residents, evaluate residents, what to do for remediation and demonstrate the skills necessary for them to perform procedures like how to remove a gallbladder.”

“Each time we’ve got more organizations involved. It’s great validation as our reach gets larger.”

fund. Draper Triangle is part of the Draper Venture Network, named for Draper Fisher Jurvetson, a Silicon Valley VC firm founded in 1985. “I’m very excited to see them close on their fund,” said Adrian Fortino, a managing director at the Mercury Fund who runs the Ann Arbor office. “It’s an incredibly important platform for Michigan. It’s not a coincidence that we opened an office here after Renaissance invested in us. Their base of limited partners is unmatched from a strategic point of view. It’s a fantastic group of corporates who want to engage in innovation.” “It’s great they’ve closed on a new fund. We need them now that the state funds of funds have disappeared. We need someone like Renaissance to step up,” said Jim Adox, who runs the Ann Arbor office of Madison, Wis.based Venture Investors LLC. He was referring to the Venture Michigan Fund I and VMF II, two funds created by the state of Michigan before the recession and run by Credit Suisse. Both also invested in VC firms willing to do deals here. Despite lobbying by the local VC community, legislators decided against creating a VMF III. Renaissance was created with a mission of doing social good. According to its recent annual report, it has done just that. According to Rizik, since its found-

ing, it has lured more than $17 in investment to the state for every dollar it has invested. He said his first two funds have invested $75 million in 30 venture-capital funds around the country, which in turn have invested more than $1.3 billion back into state companies. The companies, in turn, have used the investment capital to hire more than 1,300 employees, who make an average salary of more than $75,000. Rizik also holds what he bills as UnDemoDays, where VC investors can meet one-on-one with Michigan entrepreneurs. One UnDemoDay led to Kalamazoo-based Cirius Therapeutics, a pharmaceutical company developing therapies to treat liver disease, getting an investment of $34 million from Frazier Healthcare Partners in 2016. It has also helped Detroit-based Autobooks LLC, which offers payment and accounting software that financial institutions can market to their small-business customers, get funding of $15 million, led by Draper Triangle Ventures. In 2017, Renaissance, in partnership with the Michigan State University Foundation, opened an office in the East Lansing Technology Innovation Center. It has also helped launch organizations with a similar fund-of-funds model in Houston and Cincinnati.

— Chris Rizik, Renaissance’s CEO and fund manager

a member of the Business Leaders for Michigan trying to do social good by helping the local VC community during the recession, has turned into a profitable endeavor, too. “We jumped into the first fund when the Michigan economy had us rethinking a lot of things. One was, how can we get more of a startup culture here? There wasn’t enough venture capital here, and Business Leaders for Michigan wanted to push Renaissance to catalyze that,” he said. “Of course, we wanted good results but we said, ‘This is important and we support it.’ But not only is Renaissance delivering on the original goal of upping venture-capital activity in the state, it’s performing well for our portfolio of investments at the company. It’s become a proven vehicle for good returns. “We had done our homework on Chris. The reports I got were good, that he was a smart professional, but you never know. Ultimately the proof is in the pudding, and we watched results roll in. Our return on the first fund is at 14 percent, and it’s still

playing out. That’s not at the very top of returns on investment for us, but it’s close to the top.” Other institutional investors that joined DTE in reinvesting in the third fund include AAA Michigan, Blue Cross Blue Shield of Michigan, La-ZBoy Inc., Meijer Inc., Burns & Wilcox and universities, foundations and pension funds. Some of the investors asked for anonymity. Several of the out-of-state VC firms Renaissance invested in weren’t just interested in investing in companies here. They subsequently opened offices here, as well. Those include Houston-based Mercury Fund, which opened an Ann Arbor office in 2014 after Renaissance invested $3 million in Mercury’s second fund in 2010 and $5 million in its third fund in 2013; and Pittsburgh-based Draper Triangle Ventures, an affiliate of one of the oldest and best-regarded venture capital firms in Silicon Valley, which opened offices in Ann Arbor and downtown Detroit in 2014 after Renaissance invested $4 million in its third

Jay Greene: (313) 446-0325 Twitter: @jaybgreene

Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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GORES FROM PAGE 3

“We made numerous other operational moves that dramatically improved sales, sponsorship, television and other revenue performance,” said Platinum Equity partner and spokesman Mark Barnhill via email. While Gores and his operatives have found success in using their M&A playbook in other industries — they buy a mature company or business unit, insert a management team to improve practices, and sell for a profit — it hasn’t worked nearly as well with winning basketball games. Boardroom acumen doesn’t always translate into sports success. The Pistons are 235-323 with one playoff appearance — and not a single playoff victory — after seven seasons with Gores as owner. That matters, because the Pistons are Gores’ most public asset. In the M&A world, he and Platinum have a solid reputation. But even if the Pistons are handsomely profitable, they have a reputation for mediocre basketball and a questionable front office when it comes to managing the roster and salaries. And even if they’re profitable, they’d be even more so with a full arena fueled by a winning team. Gores, now searching for a top basketball executive and his fourth head coach, is among a handful of private equity and venture capital billionaires who own NBA teams, and they have a mixed record of success. The key appears to be simple: Some owners have hired the right personnel executives and coaches, and perhaps had a bit of luck, to establish consistent winners. Gores hasn’t done that, at least not yet.

A different business? Platinum’s niche is that it makes equity and debt investments by buying units from Fortune 500 companies, taking public companies private, and specialty acquisitions from private sellers. The Pistons acquisition was a private sale by Karen Davidson, widow of longtime owner William Davidson, and a group of minority owners. It wasn’t considered a traditional private equity play, and Gores has said he doesn’t intend to flip it. The transaction did use many pages from the Platinum playbook. It reshaped the Pistons’ traditional business functions — marketing, sales, customer service, human resources, payroll, maintenance, etc. “The Pistons investment doesn’t really fall outside of what we normally do. Our core investment thesis is to acquire under-performing or under-managed businesses, execute operational changes that improve performance and create value, and, in most (but not all) cases, sell the business with a gain on the original purchase price,” Barnhill said. Unlike the rest of the portfolio, the business also has a roster of millionaire athletes. Instead of just fixing outdated business processes, modernizing equipment, or hiring and layoffs, NBA team owners have to hire a front office that works very publicly to identify elite talent, and then rely on that talent to develop into stars — all while juggling contracts under the league’s complicated salary cap structure. In more simple terms: It seems easier to ramp up profitability of widget production than it is to beat LeBron James. And widget makers don’t have millions of fans and countless media talking

CARLOS OSORIO/AP

Tom Gores, left, with Stan Van Gundy after introducing him as the Detroit Pistons newest head coach at the Palace in Auburn Hills in May, 2014.

Private equity/venture capital ownership in the NBA Here’s a quick look at how the prominent NBA teams owners with a private equity/ venture capital background have fared:

MILWAUKEE: Since buying the Bucks in 2014 for $550 million, Marc Lasry (co-founder of New York City-based Avenue Capital Group) and Wes Edens (co-founder of Fortress Investments and former partner at BlackRock and Lehman Brothers) have seen their teams make the playoffs three times in five seasons but never get past the first round. ATLANTA: Apollo Global Management co-founder Tony Ressler headed a group that bought the Hawks for $730 million in 2015, and the team had two playoff seasons before falling to 24-58 in 2017-18. Coach Mike Budenholzer was fired last year, and his name has been connected to the Pistons job. BOSTON: Wyc Grousbeck, a partner at suburban Boston-based Highland Capital Partners, leads the consortium that bought the Celtics for $360 million in 2002. The club won the NBA title 2008 and has been a playoff fixture for much of the group’s ownership tenure. PHILADELPHIA: Last week, the Celtics were locked in a second-round playoff fight with the 76ers, another NBA team with private equity ownership. Apollo Global Management co-founder Josh Harris bought the Philadelphia 76ers for $280 million in 2011, and he also owns the NHL’s New Jersey Devils. The Sixers have been in the spotlight for years for their strategy of short-term losing with the intent of gaming the system to acquire talent for long-term success — known colloquially as “The Process.” Under Harris’ ownership, Philadelphia bottomed out with a 10-72 season in 2015-16, but they emerged this season with a 52-30 record that included 16-straight victories to end the regular season and a playoff run. SAN FRANCISCO: The gold standard for private equity-linked NBA team ownership may be the Golden State Warriors. Functionally the home team for San Francisco’s Silicon Valley, with its tech and financial billionaires, the Warriors were bought in 2010 for $450 million with the majority owner being Joe Lacob, a longtime partner at nearby venture capital giant Kleiner Perkins Caufield & Byers. The Warriors, who already had team star Steph Curry on the roster, flourished when Lacob promoted Bob Myers to general manager in 2012. His handling of the roster led to NBA championships in 2015 and 2017, and a finals loss in 2016. Myers, coincidentally, got his start as an intern under current Pistons vice chairman Arn Tellem in the 1990s, and became an agent with Tellem in L.A. before Lacob hired him in 2011. — Bill Shea

heads demanding you sell the team or fire the coach or trade everyone. That intense scrutiny is one of the unique aspects of pro sports team ownership that private equity investors may never have previously experienced. “It’s a whole other level. It’s not completely different, but it’s much more public,” said Raj Kothari, managing director at Southfield-based investment banking and private investment firm Cascade Partners LLC. “Consumer opinion matters. People are taking action because of how the consumer and public is reacting.” That opinion includes plenty of criticism and calls for Gores to sell the team. “He’s definitely getting his fair share of it,” Kothari said.

The talent grail Finding the right talent, from management to assembly line workers or point guards, is where traditional business and sports ownership are especially similar. “Sports is a people business. You hire the coach or CEO and if they don’t pick the right players or strong sales guys, you’re not going to win,” Kothari said. Gores initially relied on former Pistons great Joe Dumars as president of basketball operations, which is functionally the manager in charge of finding players. Dumars was hired by Davidson in 2000, and by 2003-04 the Pistons were again NBA champions. They lost in the finals the follow-

ing season, and remained a playoff team 2009. By then, the Pistons were under heavy criticism for Dumars’ personnel moves and internal team dysfunction, and Gores ousted him in 2014. He then hired Van Gundy as both coach and president of basketball operations. Four years later, Van Gundy exits with a 152-176 (.463) record and a year left on a $35 million contract. Gores intends to hire a coach and top personnel executive separately. Barnhill defended the Van Gundy hire and tenure, noting that he “rebuilt the culture, re-instilled a winning attitude and work ethic, took us to the playoffs two years ago and retooled a roster that we think can be very competitive in East.” The four seasons under Van Gundy improved roster and basketball operations, Barnhill said, and should accelerate the process to return to winning, the playoffs, and ultimately winning championships. But he also said it wasn’t enough, which is why the change was made. “The team has not progressed over the past two years and we decided that a change is necessary to regain our momentum. But the team is in a better position than it was when we bought it, and we have high hopes for next year and the future,” he said. One key executive was hired in 2015: former mega-agent Arn Tellem, who is vice chairman of the organization and Gores’ top executive for his metro Detroit investments and deals. While he’s helping Gores find a new coach and top personnel manager, he’s not making roster decisions. The Tellem hire is an example of the overall strategy of improving the Pistons, Barnhill said. “We bolstered the management team, starting with Arn Tellem at the top and extending to a deep bench of executive and rank-and-file talent across the organization,” he said. Even with the NBA draft coming up in June, there is no formal timetable to hire a coach and top basketball executive, Barnhill said. The goal is to hire the right people and have them follow the shared plan to craft a winning team. “We want to be quick about this process but we don’t want to hurry,” he said via a phone interview with Crain’s Friday afternoon. The new basketball ops chief will report to a committee of top Gores’ aides including Tellem, Barnhill, and Platinum partner Robert Wentworth. While Gores’ rebuilds the front office again, it’s fair to note that Detroit’s mediocrity predates him: This was the Pistons’ ninth losing season in the past 10 years. The final seven seasons under Davidson family ownership also saw four coaching changes. Still, Gores has come under fire from critics who accuse him of being an absentee owner distracted by a vast business empire elsewhere, including millions of dollars poured into the franchise and the community. Barnhill bristles at the suggestion Gores’ is an absentee owner because he’s not regularly at games. “It’s just wrong. It’s a fallacy,” he said, attributing such criticism to the “Twitter mob” and uninformed pundits. Instead, Gores is deeply involved in the franchise behind the scenes, he said, and Tellem is on ground in Detroit as Gores’ chief representative day to day. “Arn is a leader of the business. He’s not a replacement for Tom. He’s part of the ownership team that is devising the strategy, and executing on it in respect to the Pistons,” Barnhill said. As owner, Gores also has been un-

der criticism for green-lighting January’s trade for L.A. Clippers star forward Blake Griffin, a deal that severely restricts the next front office’s ability to improve the roster. Detroit’s player payroll this season was nearly $120 million — seventh-highest in the 30team NBA, according to basketball-reference.com. Gores and the wizards of high finance can’t simply buy their way to a championship. The NBA’s salary cap rules limit spending. The next Detroit basketball executive and the new coach will have to get creative, and hope that the current core — Griffin, Andre Drummond, and Reggie Jackson account for $74.3 million next season — can provide a winning foundation for the near-term.

NBA ROI The Pistons are a textbook example of how business experience from Wall Street or Silicon Valley can fail in the NBA. “They have winners and losers. Gores is no different; he’s had winners and losers,” Kothari said. That hasn’t kept financiers from buying teams. The trend of private equity and venture capital investing in the NBA dates to the private equity unit of the nearly $200 billion Ontario Teachers’ Pension Plan in 1994 spending $50 million (and eventually a total of $300 million) to buy the Toronto Maple Leafs, their arena, and later the Toronto Raptors. The plan sold what became an 80 percent stake for $1.3 billion in 2012. Neither team won a championship or sustained success under institutional private equity ownership. The pension plan still realized a 2,400 percent return on its investment. Even with all the losing, Gores has seen the value of the Pistons increase from $360 million in 2011 to $1.1 billion this year, according to Forbes. The NBA franchise average value was $226 million in 2002, when the Celtics were bought by a private equity investor. Today, it’s $1.65 billion. That’s a 640 percent growth rate regardless of the owners’ backgrounds or skills. Beyond winning, a number of factors drive a team’s value and its sale price, including league and local broadcast rights deals, stadium debt, local market conditions, roster, corporate sponsorships, attendance, etc. Private equity and venture capital billionaires have bought NBA teams because they’re among a small group of people who can afford it. Team ownership can burnish the public image of billionaires — being seen on TV courtside next to celebrity fans is a type of branding for owners — and it can be fun. “Guys with a lot of money look for interesting things to do,” Kothari said. That said, they still want their fun investment to appreciate. “They were looking at marketing and revenue opportunities in a multitude of ways you can generate revenue,” Kothari said. “They realized it’s a big business, and they’ve grown those multitude of revenue streams as a result.” In 2002, NBA teams averaged $86 million in annual revenue, according to Forbes. In 2018, that’s grown to $246 million. “They’re smart business guys figuring out ways to generate a return from their significant investment,” Kothari said. “I think there will continue to be interest (from private equity investors) as the business model evolves.” Bill Shea: 313 (446-1626) Twitter: @Bill_Shea19

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State AG Schuette sold $7.2 million in Virgin Islands real estate while in office By Chad Livengood and Kirk Pinho Michigan Attorney General Bill Schuette has quietly made multimillion-dollar real estate transactions involving inherited oceanfront property in the U.S. Virgin Islands while in office and used six state employees to complete four separate transactions between February 2013 and January 2017, documents show. Schuette, the front-runner for the Republican nomination for governor, acknowledged Thursday that he and his sisters have sold more than $7 million in property they inherited after the deaths of their mother and stepfather, Carl Gerstacker, a former chairman of Dow Chemical Co. in Midland. Schuette has repeatedly said his assets were held in a blind trust. Information about the sales is coming to light as Schuette’s competitor, Lt. Gov. Brian Calley, and his allies have made Schuette’s personal finances a focus of the Republican nomination for governor. A super political action committee supporting Calley aired a television advertisement recently calling Schuette a “trust fund baby.” “Bill Schuette lied about millions of dollars in offshore transactions w/ his own signature and address,” Calley wrote Thursday on Twitter. “He will literally say and do anything to get elected and all should be concerned we have a very dishonest person as highest law enforcement officer in MI.” Schuette’s campaign took issue with Calley mischaracterizing the Virgin Islands property as being “offshore” because it’s a U.S. territory. “Calling property owned inside the United States ‘offshore’ implies something sinister — and is false,” Sellek said. Vircom LLC, a Midland company registered under Schuette’s name at his home address, sold four separate parcels of land in St. John in 2012 and 2013 totaling $7.2 million. Schuette is listed in Michigan and U.S. Virgin Islands records as the “manager” and registered agent of Vircom, property records obtained by Crain’s show. On Feb. 20, 2013, Schuette sold two parcels of land overlooking St. John is-

MOBILITY FROM PAGE 1

The group came together after BCG approached De la Vergne’s team and Trevor Pawl, group vice president of the MEDC’s mobility arm Planet M, about potential mobility ideas, which resulted in constructing a team from the private sector along with more than 100 hours of interviews over the past three months with Detroiters, commuters and the region’s business sector. The group outlined more than 120 ideas before settling on the six pilots. “It makes no sense for the city to do this on its own,” said Michelle Andersen, partner and managing director of the Detroit office for BCG. “We (BCG and De la Vergne’s team) have a ton of passion around the city. We have people and intellectual horsepower, but we don’t own cars to invest toward this or own charging stations or write apps.” The pilots will be implemented by the group, with each member working on at least one of the six programs. GM will work with the city to offer a

DITLEFFPOINT.COM

Michigan Attorney General Bill Schuette and his sisters have been selling off parcels of land on a peninsula called Ditleff Point on the island of St. John in the U.S. Virgin Islands.

land’s Rendezvous Bay for $1.8 million each, property records show. Nancy O’Shea, a now-retired secretary in the AG’s Alcohol & Gambling Enforcement Division, notarized both transactions. Schuette’s executive assistant, Lori Gay, and his top aide Gerald “Rusty” Hills signed both property deeds as witnesses to the land sales, according to the document. On Nov. 16, 2016, Schuette completed another transaction granting an easement on family-owned property on the island of St. John with the help of three state employees, property records obtained by Crain’s show. Gay notarized the 2016 transaction and the attorney general’s communications director, Andrea Bitely, and an office analyst, Dulce Cardenas, signed as witnesses to the private transaction, U.S. Virgin Islands property records show. “Bill signed and Lori notarized the document while I was waiting to talk to him and, as a result, I signed as a witness,” Bitely said Thursday in an email to Crain’s. “If my memory serves, it was less than two minutes of our day.” Bitely said O’Shea “provided a 30 low-cost car-sharing program to city residents outside of downtown and Midtown. The automaker is currently working with insurance providers to reduce the cost of its Maven car-sharing program to make it affordable to low-income residents, De la Vergne said. The program will likely be launched through a new startup company working alongside a community organization, he said, but what price and which neighborhoods will be targeted remain open-ended. De la Vergne envisions the on-demand shuttle will serve as a first-mile, last-mile option for city residents that live a distance from traditional bus routes. That program is also seeking an app developer partner to create the algorithm to drive the program. Bedrock is likely to lead development of the dynamic-pricing mobile app, which will use an algorithm to determine optimal pricing at certain points of the day and offer incentives to shops and restaurants for drivers willing to park farther from the city center, said Kevin Bopp, vice president of parking and mobility for Bedrock. The goal

second or less service” for Schuette to finalize the February 2013 land sales. “As anyone who has a busy schedule knows, it can be a challenge to find a notary that is available when you are available and you have witnesses available,” Bitely said in an email Friday. On Jan. 17, 2017, Schuette got Gay to notarize another transaction for a quit claim deed for 6 acres deeded to a school. Records show the signing of that document was witnessed by Cardenas and Barb Teszlewicz, an executive assistant to Schuette’s top deputy. In other deals, Schuette’s Vircom sold a 1.27-acre parcel on June 12, 2012, for $1.1 million, according to U.S. Virgin Islands property records. On March 1, 2013, Schuette sold a 13.44-acre parcel of land on St. John island for $2.5 million, records show.

Calley criticism Calley criticized Schuette for the real estate transactions after the attorney general has publicly said for years that he transferred his assets into a blind trust before becoming the state’s chief is ultimately to reduce congestion at peak times in the city’s central business district, where street parking is scarce. The city and Bedrock control around 50 percent of the public parking in Detroit’s Central Business District. “There’s a real opportunity here to not only direct individuals to parking assets, but to benefit retailers and restaurants. We care about the city, and this group knows for the city to be healthy, the community has to be healthy, and addressing transportation in the city is a big step to getting there.” The city and DTE plan to install six fast-charging stations for electric vehicles along a current no-standing zone on Griswold Street in Capitol Park, De la Vergne said. The charging stations will be accompanied by educational programming on EVs in the park. The traffic management system will use vehicle-to-infrastructure technology to allow city buses and other public transportation priority to get through traffic lights quickly — likely holding a green light or yellow light longer as a bus approaches, De la Vergne said. The city plans to launch the pilot in the fall

law enforcement officer in 2011. Schuette repeated that assertion Thursday during a gubernatorial debate at the Michigan Press Association’s conference in East Lansing after Calley accused him of “directing the purchase, transfer of millions of dollars in offshore assets while attorney general.” “All of my assets are in a blind trust,” Schuette said. Schuette’s campaign later clarified that the Caribbean property and affiliated LLCs were not part of the blind trust, as Schuette and his sisters have been actively selling off the land on a peninsula jutting out of St. John’s sandy south shore. “Bill Schuette has not violated the spirit of the blind trust that he voluntarily created to avoid potential conflicts of interest as attorney general,” Schuette campaign spokesman John Sellek said in a statement. Schuette’s family still has a lot of prime Caribbean real estate to sell from the estate of their late matriarch, Esther, and Gerstacker, who was chairman of Dow Chemical from 1960 to 1978. Gerstacker died in 1995; Schuette’s mother passed away in 2003. with a “handful” of buses and intersections in the city, which have not yet been identified. The creation of a “central intelligence” hub will be used to share data collected from connected vehicles and infrastructure with the intent of improving city services. De la Vergne said the city plans to use the hub for real-time notifications of pothole locations as well identifying traffic problems, such as an area where people drive too fast, etc. Andersen said each pilot is expected to cost between $200,000 and $600,000 and will be funded by the members. “What we’re doing now is pushing these pilots to the next stage to get a minimum product from contributions from each member,” Andersen said. “Who is providing dollars, hardware or software is still being worked out. There’s no funding model for the future, but we’re confident these solutions will prove worthy enough for continued funding.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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Why the automakers are ditching auto shows By Amy Wilson Automotive News

When BMW unveiled a redesign of its M5 sport sedan in 2011, the car had to jockey for attention among nearly 50 production vehicles debuting at the Frankfurt auto show. Last year, the automaker went a very different route to generate buzz for the sixth-generation M5 without having to share the spotlight. It revealed the car in a video game. The 2018 M5 showed up in teasers for “Need for Speed Payback” last summer before appearing at a gaming convention and then an esports competition at an arena in Paris. After all that, BMW finally showed it to auto journalists at the Frankfurt show in September. BMW’s strategy, unthinkable only a few years ago, illustrates how the digital era is transforming the way automakers introduce vehicles. The shift has left many of the big international auto shows grasping for answers as brands increasingly connect with consumers through Instagram and YouTube instead. The Detroit show, already noticeably more sparse and less flashy in recent years, is losing all three German luxury brands for 2019. Mercedes-Benz said in February that it’s dropping out, followed by BMW in March and Audi last week. “We’re reviewing the auto show footprint to say, ‘Where does it really make sense, which formats make sense, to get journalists, to get customers, to show and display your vehicles?’ ” Bernhard Kuhnt, CEO of BMW of North America, told Automotive News. “We’re definitely going to invest into other formats as well. The auto show is not the right format only.” For Detroit, losing the three German luxury brands — on top of earlier departures by some smaller manufacturers — threatens to create a domino effect, with fewer journalists deciding to attend and then even more brands reconsidering the investment required to be there. “If there is less press, that puts us in a bind,” said Jim Lentz, CEO of Toyota Motor North America. “I don’t need to spend all this money.” Beyond video games, automakers have livestreamed unveilings, debuted cars on morning TV shows and launched vehicles at trade expos such as the big CES tech show in Las Vegas, which happens just days before the Detroit show each January. Automakers have increasingly decided it’s more worth their money to host private introductions at far-off locations in between auto shows, letting journalists spend a day or two with a vehicle instead of doing just a quick walk-around sandwiched between other unveilings. “There are a lot of choices about how to communicate your information and where and when, and auto shows are no longer a default,” said Stephanie Brinley, an analyst with IHS Markit. “You don’t have to be at any particular show. The auto shows are having a hard time navigating why the change is happening, what the change really is and how to react to it.” Show organizers in Detroit are re-examining how the event is staged, including its January timing. The industry is watching closely. It’s not just Detroit losing exhibitors. Several key brands have opted out of the most recent shows in Geneva, Frankfurt and Paris. At the same time,

CRAIN’S DETROIT BUSINESS/ DUSTIN P. WALSH

The North American International Auto Show is exploring moving the show elsewhere on the calendar to better engage attendees.

growth in China has fueled new shows there that compete with more established ones for automaker dollars. “The marketplace is changing right before our eyes,” said Rod Alberts, executive director of the Detroit Auto Dealers Association, which puts on the Detroit show. “Every show, whether it’s a regional or an international show, has a place in what’s going on with the auto industry. But the key is that they all make adjustments along the way to make sure they’re relevant to what is needed and making sure the brands and the manufacturers are getting what they need out of those shows.” DADA is considering moving Detroit’s show to October or June, when the weather will be better and automakers can stage outdoor ride-and-drives or other activities to convince consumers of their vehicles’ merits. Show organizers are gathering input from all stakeholders, including automakers, and a decision is expected this summer, or possibly sooner, Alberts said. If the show moves, it’s expected to happen in 2020, pushing that year’s show to the summer or fall. There are discussions about holding a smaller event on the new timetable in 2019 to try out elements such as outdoor test drives — and to help bridge what would otherwise be a 17- to 21-month gap between Detroit’s turns on the auto show circuit. Show organizers started looking at a move in February after Mercedes dropped out for 2019, citing product launch cadence and acknowledging increased competition confronting auto shows. The deliberations took on more urgency when BMW and Audi followed suit. Jaguar, Land Rover, Porsche, Volvo and Mazda also have left in recent years, while the displays of many that remain have shrunk.

‘Melting pot’ “It was the one show where Korean, Japanese and German auto execs showed up at,” AutoPacific analyst Dave Sullivan said of Detroit. “It was where the supply base could mingle. It was a melting pot — everyone in the auto industry could come together as one for a few days every year. The significance of it is really starting to fall apart.”

Mercedes and BMW execs have said they could return to Detroit in 2020 or later if the show fits their product timing. Audi last week said it would “continue to evaluate auto shows on a case by case basis relative to the timing of our product introductions and the value the show brings from a media and consumer perspective.” 2019 will be the first time without all three German luxury brands since it became the North American International Auto Show in 1989.

“The key is that they all make adjustments along the way to make sure they’re relevant to what is needed and making sure the brands and the manufacturers are getting what they need out of those shows.” — Rod Alberts, executive director of the Detroit Auto Dealers Association

The earlier departures already had contributed to conspicuous empty spaces at Detroit’s newly renovated convention center during the show’s media preview days. At the same time, automakers are doing more offsite reveals so their vehicles won’t start the show under a shroud and miss out on media coverage. Some automakers now skip press conferences at Cobo Center in part because of costs; there were 21 in 2015 but just 13 this year. Instead of spending $1 million on a Detroit press conference, Honda unveiled its revived Insight hybrid at a holiday media gathering in December, though attendees had to agree not to publish pictures or details until the week of the auto show. A separate event allows for a “more rich storytelling environment than, boom, 20 minutes and you’re off to the next press conference,” American Honda public relations chief Sage Marie said. Even so, Honda’s Acura brand did

hold a press conference in Detroit this year for the redesigned RDX crossover, the first in a new generation of products. “We wanted to make a little bit of a splash and beat our chests a little bit,” Marie said. Automakers are wrestling with the changes. Ford Motor Co.’s Lincoln brand sees regional shows, which are focused on consumers rather than on attracting worldwide media coverage, as an important part of its marketing strategy, said Robert Parker, Lincoln’s head of marketing, sales and service. But larger shows are a tougher call. “If you’re in the midst of a transformation like Lincoln is, customers may need an event like this to look at a car. Most people who come to auto shows are within 12 months of a purchase,” Parker said. Going forward, auto shows “will play a role, but these global shows are the ones that are more difficult to figure out.” For many automakers, press coverage of auto shows is a major factor in their participation. Companies such as Toyota that have relatively low market share in Detroit are watching organizers’ deliberations closely to gauge the effect on the show’s ability to continue attracting media from all over the world. The Detroit show issued 5,078 media credentials in 2018, a number that’s been stable for the last several years. Media coverage actually rose 46 percent from 2017, generating 564 million impressions, according to a study commissioned by the dealers association and conducted by Prime Research. Through two-thirds of the 2017-18 auto show season, Detroit was second globally in media impressions after Frankfurt, according to Prime, pending results from Geneva, New York and Beijing.

Lower-cost alternatives Even shows that generate huge media coverage must find ways to make participation less costly, given the growing number of lower-cost alternatives for automakers, former Cadillac President Johan de Nysschen said. “Auto shows have become very expensive. Just doing press conferences

is some staggering cost,” de Nysschen said in an interview shortly before leaving Cadillac in April. “I don’t know why they’re that expensive. Show organizers need to take a long, hard look at this.” In conjunction with a date change, Detroit show organizers intend to work with city and convention center officials to reduce setup time for the show. It currently takes nearly three months, a period spanning three major holidays — thus requiring significant overtime pay for workers. “We’re going to look at ways to save our customers money when they come here,” said Alberts, the DADA chief. Of course, marketing to consumers is ultimately the reason auto shows exist. Attendance at U.S. auto shows increased considerably from 2009 to 2015, as the economy improved and more millennials gained the means to buy new vehicles, said Steve Bruyn, CEO of Foresight Research, which studies auto shows. It has leveled off the last three years at an estimated 11 million people annually. Detroit is one of just a few shows that publicly report attendance, which has hovered at just more than 800,000 for the last several years. “Shoppers can go and look at vehicles and shop for cars and have a good time doing it,” Bruyn said. With two-thirds of attendees in the market to purchase a new vehicle in the next year, “The exposure is incredible.”

More test drives The plan to add more outdoor and test-drive opportunities for Detroit attendees is something automakers are asking for. General Motors has floated turning the auto show into more of a festival. A move to June or October would enable exhibits outside the convention hall and improve the experience for consumers, Alberts said. In the interim, people going to the January 2019 show may see more indoor activities as planners try to leverage open floor space. “It’s still a strong international show that’s changing into what the future of shows is going to look like, which has to do with experiential, new brands like GAC that are coming to the market soon and technology,” Alberts said. GAC became the first Chinese brand on the show’s main floor in 2017, after other brands’ departures freed up space. Steve Harris, a former communications chief at Chrysler and GM, fondly remembers the days when the Detroit show’s press conferences made big splashes: Jeeps that crashed through plate-glass windows, a cattle drive in the city streets and indoor snowstorms. The days when practically every major auto brand is there are probably over, he said, but the show can still be meaningful with support from the Detroit 3. “A big thing is what GM, Ford and Fiat Chrysler decide they want the Detroit show to be,” said Harris, who is retired. “If they want Detroit to be a place where they make major announcements, regardless of how they’re done and what they are, then Detroit will continue to be relevant as long as those companies are still relevant.”

C R A I N ’ S D E T R O I T B U S I N E S S // M A Y 1 4 , 2 0 1 8

THE WEEK ON THE WEB

RUMBLINGS

Detroit to expand neighborhood fund, raise $130 million

Alix takes on consulting competitor in court

MAY 4-10 | For more, visit crainsdetroit.com

ollowing investment of $42 million in three Detroit neighborhoods, the city and partners are expanding the Strategic Neighborhood Fund to seven more areas, the city announced. In partnership with Invest Detroit, the fund will raise $130 million to build 10 “vibrant, inclusive” areas throughout the city, touching more than 60 individual neighborhoods over the next five years, the news release stated. The Strategic Neighborhood Fund 2.0 will also expand its scope to include streetscapes, park improvements, commercial development and housing stabilization. The next seven neighborhood area to see investment are Grand River Northwest, Warrendale/CodyRouge, Russell Woods/Nardin Park, Campau/Banglatown, Gratiot/Seven Mile, East Warren/Cadieux and Jefferson Chalmers. The Kresge Foundation, whose efforts in Detroit focus on the revitalization of neighborhoods, is committing $15 million to SNF 2.0, which was announced at a meeting of top local and national philanthropic organizations late last month. The city will also raise $250 million for the Affordable Housing Leveraging Fund to ensure the neighborhoods remain inclusive and affordable for long-time and new residents. The city has already committed $50 million to the fund, which will preserve 10,000 existing affordable housing units and create 2,000 more over the next five years. With $42 million from SNF 1.0, $130 million from SNF 2.0 and $250 million from the Affordable Housing Leveraging Fund, projected investment in the neighborhoods will reach $422 million over the next five years. That investment is expected to leverage more than $600 million in private investments, pushing total neighborhood investment over $1 billion. The $42 million pilot effort focused on Islandview/Greater Villages, Vernor/Southwest and Livernois-McNichols. “In the first three neighborhoods, we went in and worked with the residents to support development and we saw incredible results,” Mayor Mike Duggan said in the release. “We’ve got new mixed-use apartment buildings with affordable housing, we have more businesses and more parks opening up. We applied the tools that drove the development in downtown and midtown and put them into neighborhoods, and now we’re expanding that to seven more areas across the city.” The city said it and Invest Detroit will raise $56 million in corporate and philanthropic support, match those funds with local resources and secure state and federal dollars to reach the $130 million goal. Following a yearlong community engagement process led by the city’s planning department, plans are underway in the Grand River Northwest area. The process is just beginning in Jefferson Chalmers, Russell Woods/ Nardin Park, Campau/Banglatown

ROSSETTI ARCHITECTS

Larson Realty Group, the city of Detroit and other partners broke ground Tuesday on The Corner, a $30 million mixed-use development at the old Tiger Stadium site in Corktown. Plans include 111 apartments and 26,000 square feet of commercial space.

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

15 percent The year-on-year drop in the number of people experiencing homelessness in Detroit, Highland Park and Hamtramck, according to a count by volunteers and the city of Detroit.

$1 million The proceeds the city of Detroit expects from selling Joe Louis Arena seats and equipment.

111 The number of apartment units planned for The Corner, a $30 million mixed-use development that broke ground last week at the former Tiger Stadium site.

and Warrendale/Cody-Rouge. Planning for Gratiot/Seven Mile and East Warren/Cadieux will kick off in early 2019, the city said.

BUSINESS NEWS J Detroit Hardware, open along Woodward Avenue in New Center since the early 1930s and in business since 1924, has sold its building and plans to close in June. J The LPGA Tour has an official team event for the first time in its 69year history and it will take place in Michigan, in Midland with a sponsorship from Dow Chemical Co. J Echoing previous months, prices of homes and condominiums in the metro Detroit region continue to climb as inventory falls, according to April data released last week by Farmington Hills-based Realcomp Ltd. II. J Sodexo Inc. is laying off 34 food service workers at the College for Creative Studies after the Detroit college moved to terminate its contract with the Maryland-based food and facilities management company. J Lyft Inc. is offering a credit to riders during weekday overnight hours along a Woodward bus route as the city seeks to incorporate new mobility and technologies in its services. J Finalists for the EY Entrepreneur of the Year Award include Damien Rocchi of Grand Circus Detroit LLC,

Brad Oleshansky of Pontiac-based M1 Concourse LLC and Rifino Valentine of Ferndale-based Valentine Distilling Co. J Emily Heintz, a finance professional with a breadth of experience supporting the state's venture capital and entrepreneurship communities, launched a startup called EntryPoint to promote inclusion and connection in business. J O2 Investment Partners, a private equity firm based in Bloomfield Hills, invested in EMEX LLC, an energy-focused services provider that runs an online buying and selling platform for gas and electricity. J Jim Brady's Detroit, the Royal Oak restaurant and bar inspired by an old Detroit restaurant owned by the same family, plans to open two concepts in Detroit's old Chinatown neighborhood. J As a labor strike continues, Caesars Windsor has postponed more shows and canceled hotel reservations through the end of May. J An art gallery, cafe and bike shop, rock-and-roll bar, Japanese smallplates restaurant and cheesecake bakery plan to open up this summer in a complex that's being renovated by Woodbridge Pub owner Jim Geary. J Arotech Corp.'s Epsilor-Electric Fuel Ltd. has been awarded a $3 million contract from Canada's defense department to create a charger suitable for its armed forces program.

OTHER NEWS J The cause of the May 3 parking deck collapse in Detroit's Rivertown Warehouse district was structural failure spurred by shoddy construction work that went unflagged by inspectors, the city has determined. J The city of Detroit has started $58 million in work to resurface 88 miles of roads this year, and plans to make fixes to the Bagley Street Bridge in southwest Detroit. J The Detroit Pistons Foundation, Detroit Pistons owner Tom Gores and Vice Chairman Arn Tellem committed three-year grants to the Detroit Symphony Orchestra and Sphinx Organization to enhance music and education programs for Detroit youth. J Detroit residents who undergo workforce training through a city program could get their Driver Responsibility Fees waived and licenses restored ahead of the planned Oct. 1 forgiveness date.

orporate turnaround veteran Jay Alix, the founder of AlixPartners LLP, is suing that firm’s biggest competitor, McKinsey & Co., alleging the advisory firm engaged in racketeering. McKinsey “knowingly and intentionally submitted false and materially misleading declarations under oath in the bankruptcy proceedings” to hide conflicts of interest, according to the complaint filed last week in Manhattan district court. The suit also alleges McKinsey operated “pay-to-play” arrangements in which McKinsey would direct bankruptcy work to attorneys that reciprocated by hiring the firm for consulting work. The suit says McKinsey has unlawfully received at least $101 million in consulting fees, financially harming AlixPartners. The suit alleges these charges amount to bankruptcy fraud, mail fraud and wire fraud. AlixPartners is not named as one of the parties in the lawsuit. Jay Alix had sold a majority stake in the firm to private equity firm CVC Capital Partners in 2012. Then in 2016, he teamed up with a pair of Canadian pension fund managers, Caisse de

dapot et placement du Quabec and Public Sector Pension Investment Board, as well as Investcorp Group, to buy out a stake held by private equity firm CVC Capital Partners to become a majority shareholder in the company he founded in 1985. AlixPartners and McKinsey have sparred for years, often competing for the same clients in big bankruptcy and turnaround cases. McKinsey denies the allegations. “We will vigorously defend ourselves against these meritless claims and expose Mr. Alix’s clear pattern of anti-competitive behavior in court,” the company said in a statement. While AlixPartners work has shifted away from turnarounds in recent years — they only account for roughly a quarter of the business — the Southfield-founded company built a reputation under Jay Alix for restructuring. Jay Alix led the restructuring of General Motors during the Great Recession, operations of the city of Detroit in the 1990s and assisted the Detroit Public School system in 2017. Alix was a Crain’s 40 under 40 honoree in 1994.

PASSION FILMS

Grammy-winning singer Michael Bolton (center, with scarf) poses in front of the Spirit of Detroit statue with Slow Roll Detroit founder Jason Hall (to left of Bolton) during one of Bolton’s visits to Detroit.

Michael Bolton to appear in Detroit for doc premiere

rammy Award-winning singer Michael Bolton will be on hand to introduce his documentary about Detroit's resurgence for its national premiere Tuesday at the Redford Theatre in Detroit. "American Dream: Detroit" will also be screened at more than 450 cinemas in the country — 26 in Michigan — for the one-day-only event. Tickets for the 7 p.m. show are $16 and available on the Redford Theatre website. Bolton, a native of Connecticut, began making the documentary highlighting the comeback of Detroit in 2013, saying he had fallen in love with the city and its people. The "love letter to Detroit" features interviews with business moguls, singers and luminaries, including Chris Ilitch, Jerry Bruckheimer, Francis Ford Coppola, Aretha Franklin, Smokey Robinson and Alice Cooper. Everyone featured in the film was

invited to the premiere, said its director and Bolton's manager, Christina Kline. But organizers weren't yet sure who will attend and whether Bolton will perform. A roster of young local musicians featured in the film in collaboration with the Detroit Institute of Music Education are scheduled to perform, Kline said. One song included in the film is "Silent Film" by Stephie James, an artist from metro Detroit who moved to Nashville. James also co-owns Dessert Oasis Coffee Roasters in Detroit's Capitol Park, she said in an email. Michigan theaters to screen the movie include the Fairlane Megastar 21 in Dearborn, the Maple Theatre in Bloomfield Hills, Emagine Novi 18, AMC Forum 30 in Sterling Heights and the State Theatre in Traverse City. Tickets are available at www. fathomevents.com/events/american-dream.

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