Crain's Detroit Business, July 9, 2018 issue by Crain's Detroit Business

Ex-Lions chefs expand business Page 3

JULY 9 - 15, 2018 | crainsdetroit.com

A look at private dining rooms Page 10

TRADE

BRIDGE OR BARGAINING CHIP?

Gordie Howe International Bridge conceptual image | WDBA

As Canada forges ahead on project, trade tensions near a boil By Chad Livengood clivengood@crain.com

WINDSOR, Ontario — The Canadian government is forging ahead with construction of a new Detroit River bridge designed to enhance trade as economic relations between the longtime trading partners grow strained — and the crossing

could become a bargaining chip. Major construction of the Gordie Howe International Bridge is expected to begin this fall once a contract is signed with Bridging North America, the consortium of infrastructure companies chosen last week by the Windsor-Detroit Bridge Authority to build the bridge. The long-awaited move toward an

Need to know JJContractors named for Gordie Howe International Bridge JJGrowing trade dispute could make bridge a bargaining chip JJBridge seen as crucial for future of Canadian auto industry

official groundbreaking later this month comes as President Donald Trump threatens a tariff on Canadian-assembled vehicles — which he describes as “the big one” — following Canada’s retaliatory tariffs on U.S. goods responding to the 25 percent duty Trump imposed on foreign steel and aluminum. Adding to the international ten-

sions is the billionaire Moroun family, owners of the Ambassador Bridge and longtime foes of the Canadian government who are egging on a nationalistic president to pull the plug on a permit for the bridge, which Canada sees as a top national priority for the future of its auto industry. SEE BRIDGE, PAGE 18

REAL ESTATE

Rushing to opportunity

HEALTH CARE

New zones created by tax overhaul draw investor attention

Blue Cross takes punches in governor’s race

By Kirk Pinho

By Chad Livengood

The nation’s newest investment tool is getting some super-sized attention in metro Detroit — and is poised to bring new investment to neighborhoods throughout the region. A provision tucked into the Republi-

can tax-reform package enacted last year allows for capital gains on things like stock or real estate sales to be diverted into so-called Opportunity Funds. The funds invest in low-income Census tracts — known as Opportunity Zones — that have been strangled of investment in recent years and decades.

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NEWSPAPER

The Snyder administration selected the Opportunity Zones, which were then ratified by the U.S. Department of Treasury. No fewer than four such funds are in the works along the I-75 corridor ranging in size and scale. One is from a soon-to-be former Detroit economic development official. Another private investor is in the process of raising $100 million-plus for a $500 million pipeline of projects. And there are a pair of a pair of funds planned that will target smaller, distressed urban areas like Pontiac and Flint. “It’s starting to pick up,” said Joseph Kopietz, member of the Real Estate Group for Detroit-based law firm Clark Hill PLC. SEE ZONES, PAGE 17

clivengood@crain.com

Blue Cross Blue Shield of Michigan has become a political punching bag for one of the leading candidates for governor in his campaign for the Democratic Party nomination and bid to make Michigan the first state with single-payer health insurance that could put private insurers out of business. Abdul El-Sayed, M.D., has increasingly singled out Blue Cross in his campaign for governor as the Aug. 7 primary nears, seeking to tie the Detroit-based insurer to the race’s frontrunner, former Sen. Gretchen Whitmer, whose father, Richard, was president and CEO of BCBSM from 1988 to 2006. In a debate last month in Grand

El-Sayed: Attacks tied to Blue Cross

Whitmer: Father was Blues’ longtime chief

Rapids, El-Sayed said he’s “not bought off by the folks like Blue Cross Blue Shield” and took veiled shots at Whitmer, who attended a fundraiser in March organized by Blue Cross executives who run the insurer’s political action committee. SEE GOVERNOR, PAGE 20

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

MICHIGAN BRIEFS

INSIDE

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

One-fourth of Monroe’s revenue in DTE tax fight

American cities routinely dole out tax breaks and other subsidies to lure big companies to set up shop. But one small town in Michigan is discovering the risk that comes with relying too heavily on corporate taxpayers, Bloomberg reported. Monroe, a 20,000-resident city, could see a quarter of its revenue wiped out if Detroit-based utility DTE Energy Co. wins a challenge to its property-tax bill for a coal-fired power plant. That could jeopardize funding for crucial services from public safety to special education, Monroe County’s chief financial officer Michael Bosanac wrote in an email. An over-dependence on one industry has proven a pitfall for other U.S. municipalities. Detroit collapsed into bankruptcy after decades of seeing its population dwindle as auto-industry jobs disappeared. New Jersey had to rescue Atlantic City as some casinos shuttered and others appealed their tax bills. Wayne, New Jersey, could be in trouble now that its third-largest taxpayer, Toys ‘R’ Us, is out of business. “A concentrated tax base is a principal credit risk in a small government,” said Matt Fabian, managing director and senior analyst at Municipal Mar-

ket Analytics Inc. “Their reliance on a single industry or company creates potential volatility and that could be hard for a small government to manage.” That’s been true for cities that draw a lot of tax money from aging power plants. Energy producers across the U.S. have pushed to wrest concessions from local, state, regional and federal policymakers to keep nuclear and coal power plants afloat in the era of cheap natural gas and the rise of wind and solar power. DTE also filed a tax appeal on its nuclear power plant Fermi 2, located in Monroe County. “DTE Energy’s appeals with the Michigan Tax Tribunal regarding the taxable value of the Monroe and Fermi plants were merely protective appeals that needed to be logged by a set deadline because agreements with the local taxing jurisdictions were not completed,” the company said in an emailed statement. “DTE’s goal is to reach a reasonable agreement regarding the amount and timing of any reductions before the tribunal makes its decision.” Still, Monroe is set to see the amount of money it funds government services slashed, even as it must continue to make payments on $45.4 million in outstanding general-obligation bonds. The city recently warned investors about the tax appeal in a filing with the Municipal Securities Rulemaking Board. Repaying in-

We call Detroit home. Our students call it campus. Either way, getting to where we are today took time — 150 years, to be exact. And in that time, Wayne State University has connected with its community like few institutions ever do. We’re proud of Wayne State’s engagement in Detroit — our home and our campus. It’s something that can only happen over time. And we have been here a long time. Learn more at wayne.edu.

Brian Walker, president and chief executive officer of Herman Miller Inc.

vestors is the city’s first priority, said City Manager Vincent Pastue. The bonds are rated AA- by S&P Global Ratings. “Your first obligation is to make your debt payments,” Pastue said in a telephone interview. “You don’t really have a choice.”

Herman Miller talks trade war

The brewing trade war between the U.S. and its major trading partners may lead Zeeland-based furniture maker Herman Miller Inc. to relocate some of its manufacturing if costs become prohibitive, CFO Jeff Stutz said, according to Bloomberg. “We are obviously feeling the effects of tariffs that are putting pressure on our business as it stands today and have been all fiscal year,”

BLOOMBERG

Stutz said last week in a phone interview. The creator of the ubiquitous office chair has plants in the U.S. and abroad, including China and the U.K. While the company has no concrete plans at this time, it could shift some manufacturing to other countries or find third-party companies in those regions to make products for them, Stutz said. He didn’t specify which factories could be moved. CEO Brian Walker said the company is keeping an eye on U.S. actions related to tariffs and responses from other countries. “As a result, we are proactively developing and continue to refine contingency plans,” Walker said last week on an earnings conference call with analysts. He didn’t elaborate. The furniture company surged last

CALENDAR

CLASSIFIEDS

DEALS & DETAILS

KEITH CRAIN

OPINION

OTHER VOICES

PEOPLE

RUMBLINGS

WEEK ON THE WEB

Tuesday, a day after posting fiscal fourth-quarter profits that topped analysts’ estimates. The shares jumped the most since 2011, rising 11 percent to $38.10. That pared the stock’s decline this year to 4.9 percent.

Army Corps to seek funding for Soo Locks

The U.S. Army Corps of Engineers says construction of a second Great Lakes navigation lock for large freighters will be included in its 2020 budget request to the Trump administration, the Associated Press reported. Lt. Col. Dennis Sugrue of the agency’s Detroit district said last Monday the Soo Locks upgrade will have to compete with others from around the nation. Congress will make the final decision about whether to fund the $1 billion project. A new Army Corps analysis significantly boosts the project’s benefit-cost score, which should improve its prospects.

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

FOOD

GAME PLAN FOR GROWTH

BILL SHEA/CRAIN’S DETROIT BUSINESS

Joe Nader (left) and Scott Breazeale work on food intended for the Texas Rangers on Thursday as part of their business that includes serving meals to the visiting teams at Comerica Park.

Hardcore Meals adds MLB teams to client roster as retail bonbon business prepares for launch By Bill Shea bshea@crain.com

Chipotle beef tacos and black currant tea bonbons may seem like strange culinary bedfellows but not for Joe Nader and Scott Breazeale. The boyhood friends quit their jobs last November as the No. 1 and 2 executive chefs at Ford Field for Detroit Lions games and launched upscale bonbon specialists Guilt Chocolates. That’s the bonbon part. To float the chocolate business un-

Need to know

JJFord Field chefs quit in November to

launch chocolate business

JJPre-made meal business for athletes floats growing bonbon business JJDuo plans to add more gyms to bolster revenue

til it launches a consumer-facing operation at the end of the summer, they have been running Hardcore Meals, a pre-made food service for

CrossFit athletes and others. That’s where the beef taco part comes in. Launched in January 2017, Hardcore Meals has about 300 clients at 13 gyms in metro Detroit. This past spring, the company picked up new clients, the visiting teams at Comerica Park in town to play the Detroit Tigers. So, Nader and Breazeale are back in the business of feeding pro ballplayers, only now it’s shortstops and pitchers instead of quarterbacks and punters. They declined to discuss finances

in detail but said Hardcore Meals makes enough money to pay the bills while Guilt Chocolates prepares for its retail expansion. Both businesses share a renovated building on Seven Mile Road in Redford Township, which is part of nearly $1 million they have invested to create their venture so far.

Double-play dining So far, Hardcore Meals has provid-

ed food for the Oakland A’s, Kansas City Royals, Texas Rangers, Chicago White Sox and Minnesota Twins, Nader said. They picked up the work through Canton Township dietitian Maureen Stoecklein, the New York Mets team dietitian, he said. Hardcore Meals does food prep mostly for the Tigers’ American League Central Division opponents because they visit Comerica Park several times a season. SEE HARDCORE, PAGE 21

INVESTMENT

Fund aims to revitalize Detroit neighborhood

Belle Michigan launches $20 million impact fund By Sherri Welch swelch@crain.com

A $20 million impact investment fund launched in March to make early stage investments in high-growth, women-owned businesses — long a sector short on capital — isn’t wasting any time. Just a few months in, Belle Michigan Impact Fund has raised $5 million from 41 women investors and made its first two investments. The Belle Fund invested in Troybased Alchemy, which is using augmented reality to “gamify” chemistry and develop new ways to teach STEM; and Bellevue, Wash.-based Seeva Technologies Inc. Seeva came to Detroit for the Techstars Mobility business incubator program in 2016 with

Need to know

J $20 million impact investment fund launched in March J Plans is to make early-stage investments in high-growth, women-owned businesses J Fund already raised $5 million and made two investments

patented technologies to heat and apply washer fluid to windshields, LED headlamps/tail lamps, front and rearview cameras, sensors and other autonomous vehicle and driver-assistance systems. It now has an Ann Arbor location. Investors in the new, Grosse Pointe Farms-based fund include well-known names such as: Patricia Poppe, presi-

By Sherri Welch swelch@crain.com

Nancy Philippart: Want to be able to selectively invest.

Carolyn Cassin: Proving that it matters.

dent and CEO, CMS and Consumers Energy; Kathleen McCann, chairman and CEO, United Road Services Inc.; Florine Mark, president and CEO, The WW Group Inc.; Andra Rush, founder, chairman, CEO and president, Rush Group; Terri Kline, president and CEO of Health Alliance Plan; Lisa Payne, who is chairman of Soave Enterprises and president of Soave Real Estate; and Mary Kramer, group publisher of Crain Communications Inc. SEE BELLE, PAGE 22

A new, private impact investment fund set to launch late this summer could bring more than $10 million in new investment to the Detroit neighborhood where the ’67 uprising began. The goal of the Durfee Central Alumni Fund L3C is to attract business and a tax base to revitalize the community and provide residents with new opportunities, said Romy Kochan, president and managing director of the fund’s sponsor, Auburn Hills-based Gingras Global Groups L3C. “(It) used to be a very dynamic commercial district, if you talk to the residents there,” said Kochan, who spent over 20 years in traditional and public

Need to know

J Durfee Central Alumni Fund L3C aims to attract business to Rosa Parks and Linwood community J Fund targets businesses with social enterprise mission J Planned investment range is $25,000 to $900,000

investment fields before founding Gingras in 2011. Many Jewish alumni of Central High School still living in the region remember how vibrant the community was; and, she said, once word of the fund and its aim got out, news spread quickly. SEE FUND, PAGE 22

MUST READS OF THE WEEK Michigan Boy Scout camp purchased

Women in leadership

Cadillac House reopens with fanfare

Detroit real estate investor Dennis Kefallinos bought a campground in Lupton. Page 7

A few questions for Linda SchlesingerWagner, founder of skinnytees. Page 14

The 158-year-old inn and tavern, in the center of Lexington, has undergone a $3.5 million restoration . Page 16

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

Ascension At Home expands home health, hospice services in Michigan, other states By Jay Greene jgreene@crain.com

As Ascension Michigan continues to reorganize its operations and rebrand its 15 hospitals, the Roman Catholic system has fully integrated its home health, infusion and hospice operations into Ascension at Home, a seven-state subsidiary of parent company Ascension Health. Combining Reverence Home Health and Hospice, the Michigan-based home health and hospice company, with Ascension at Home is just one example of how St. Louis-based Ascension Health, the nation’s largest nonprofit health system, is moving to integrate care, cut costs and shift more services into outpatient settings to match reimbursement policies. It’s part of a broader realignment at the mammoth Ascension Health. Nationally, Anthony Tersigni, Ascension Health’s CEO, announced in March the health care system has cut administrative costs by $400 million this year by realigning leadership and organizational structures, according to a report in Modern Healthcare, Crain’s sister publication.

Post-hospitalization reorganization Darcy Burthay, managing director of home care services with Ascension at Home, said Michigan’s Reverence was the last large home health market subsidiary to join Ascension at Home in 2017. Reverence was created in 2012 when Ascension's five regions in Michigan merged home health, in-home hospice, infusion, telehealth monitoring, palliative care, durable medical equipment and other complementary post-acute care services. Burthay, a nurse who has spent 33 years with Ascension, mainly in Indiana, said Ascension’s goal in Michigan and nationally is to move home health and hospice, along with a few sites that had infusion services, into a separate company, which would allow greater innovation and care coordination. In 2013, Reverence generated $62 million in revenue, employed 590 workers and cared for 2,000 patients each day with 235,000 annual visits, said Patricia Maryland, the former

Need to know

JJAscension Michigan's Reverence Home

Health & Hospice joins corporate post-acute care subsidiary

JJStrategy is to use physicians, post-acute care services to avoid unnecessary hospitalizations JJReimbursement driving more care

services away from hospitals and into outpatient, home settings

CEO of Ascension’s St. John Providence Health System in a 2012 interview. Maryland now is CEO of Ascension’s health care division. By 2017, Maryland said Reverence was projected to double its statewide market share to 12 percent from the current 6 percent, increase annual revenue to about $80 million and employ more than 800 workers. During the first quarter of 2018, the consolidated Ascension at Home increased home health and hospice volume 4 percent as compared with the same period in 2017, Burthay said. “We are on pace to provide over 1 million home health visits in 2018 in seven states,” she said. “We serve nearly 1,000 hospice patients each day and employ over 2,300 associates in our home care programs.” Burthay declined to provide revenue figures for Ascension at Home. In 2014, Ascension at Home was founded as a joint venture with Evolution Health, a Dallas-based post-acute care provider, with the goal to manage all Ascension’s home health, hospice and other post-acute care services. Evolution is part of Nashville-based Envision Healthcare Holdings Inc., (NYSE: EVHC), which in June was acquired for $5.6 billion by KKR, a New York-based private equity firm that has been buying health care entities the past several years. “When Ascension spun out home health and hospice from hospitals, all the back office focused on structure and process, the kinds of things done in home health,” Burthay said. “Ascension has a strong focus in running strong hospitals, but back office functions are important, too. There is a love and passion for keeping people at home.”

Ascension has consolidated home health and hospice services to its At Home subsidiary in Wisconsin, Indiana, Oklahoma, Texas, Alabama, Kansas and Michigan. In 2014, Ascension also consolidated nursing home and other long-term care services in its Ascension Senior Living subsidiary. “We want to bring all the best practices together,” Burthay said. “Not every market has every service. Our goal is to expand home health and hospice and add services in markets where we can as we reform health care.” Burthay said Michigan is a full-service market with all components but doesn’t have as much palliative care on the outpatient side. “We are not moving all palliative care out of Michigan hospitals but making it available (outpatient),” she said One of the goals for Ascension hospitals and physicians is to be able to make “one call for a home health care agency,” Burthay said. But in markets where Ascension hospitals don’t have an owned home health, hospice or infusion service, Burthay said the company would consider equity joint ventures with established home health and hospice companies. “In the markets ... where we already have a robust presence, we might look for a joint venture” with a hospital or other provider, she said. “We don’t want to duplicate what is already being done.” One reason to be efficient in home health is that profit margins are small, she said. “The average reimbursement under Medicare for a 60-day stay is $2,500 to $3,500,” Burthay said. However, CMS announced last week that it may pay home health agencies a 2.1 percent increase in Medicare payments for remote patient monitoring. The $400 million increase could more than reverse the 0.4 percent, or $80 million cut from last year. Another reason to improve postacute care is that it will help Ascension reduce readmissions and move to value-based care. Over the last several years, hospitals have been financially penalized by Medicare for not meeting readmission rate goals. “Post acute care, on the home care side, is not just trying to prevent read-

“Not every market has every service. Our goal is to expand home health and hospice and add services in markets where we can as we reform health care.” Darcy Burthay

missions but also trying to prevent (unnecessary) admissions,” Burthay said. For example, despite reducing readmission rates, Ascension St. John Hospital in Detroit was penalized $277,000 in 2017 because of its 16 percent readmission rate, which was higher than Medicare projected. The data came from the Center for Medicare and Medicaid’s Hospital Readmissions Reduction Program and Medicare cost reports by American Hospital Directory, a Louisville-based consulting company. “Our Ascension Medical Group, with 6,000 doctors (nationally, 1,000 in Michigan), can refer patients directly to home care instead of an admission” in an emergency department or office, Burthay said. “We want to reduce readmissions not just because of the financial penalty, but it really can change the cost of care.” Burthay said Ascension’s post-hospitalization strategy is moving toward a complete continuum of care approach, starting with office physicians trying to prevent admissions before they become necessary. “Physicians can catch patients early in the disease process because they see patients more often and can focus patients on a continuum of care,” she said.

Changes at Ascension Over the past year, Ascension Michigan laid off more than 500 of its 26,000 employees and reorganized many departments to reduce costs, improve efficiencies and develop new strategies to prepare for a transition to more outpatient care services and telemedicine. In Michigan, Ascension cut at least $60 million in expenses through layoffs and other restructuring in 2018, said former market executive

Gwen MacKenzie. This year, Tersigni said Ascension plans to cut an additional $61 million in fiscal 2019 from its operating units. But Ascension also announced in May it would invest $50 million in three of its health systems in Saginaw, Standish and Tawas City. Ascension previously had considered selling the hospitals, but now it will spend money to expand outpatient care services. Ascension officials were unavailable to discuss details of integration, cost-cutting and outpatient expansion plans in Michigan with Crain’s. In June, Ascension Michigan also began a rebranding strategy to rename its 15 hospitals and 250 clinics with the Ascension name. For example, Crittenton Hospital and Medical Center is now Ascension Providence Rochester Hospital and St. John Hospital and Medical Center in Detroit is now Ascension St. John Hospital. “In September of 2016 we announced that we would unify our brand statewide,” Joseph Cacchione, M.D., CEO of Ascension Michigan and president of Ascension Medical Group, said in a statement. “This was the beginning of our efforts to share best practices, enhance patient care and deliver greater value to the communities we serve. This rebranding is the next step in that transition to a unified brand.” Other large health care systems in Michigan that operate their own home health and hospice subsidiaries or companies and are redesigning their delivery systems for greater outpatient care are Henry Ford Health System, Beaumont Health, Spectrum Health, McLaren Healthcare and Trinity Health. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

Services planned for founder of Women’s Automotive Association By Anisa Jibrell Automotive News

Memorial services have been planned for the late Lorraine Schultz, who spearheaded the Women’s Automotive Association International — a nonprofit organization that provided scholarships and networking opportunities to women in an industry long perceived as a largely male domain. She passed away last month at 88. A memorial Lorraine Schultz: service will be held at Holy Memorial service Name Catholic is July 14. Church in Birmingham on July 14. Schultz died June 26 in Ascension Providence Hospital in Novi, said Lynn Wilhelm,

Need to know

JJSchultz spearheaded the Women’s

Automotive Association International in 1996 JJHer first role in the auto industry was executive director of the Detroit Model Bureau JJFuneral service is scheduled for July 14 in Birmingham

former president of the association. Schultz’s first role in the auto industry was as executive director of the Detroit Model Bureau, an agency that provided talent for auto shows. After the agency’s dissolution, Schultz was executive director of the AutoLeather Guild of America for nearly two decades where she oversaw marketing for top tanners. When the guild was discontinued in 1995, Schultz founded and began as CEO of the Women’s Automotive

Association International the following year. The organization was the first of its kind, Wilhelm said, and awarded thousands of dollars in scholarships to women seeking careers in the auto industry. At one point it operated 13 chapters across the country with hundreds of members, she said. The mentoring and networking group amassed more than 1,200 members across the U.S. and Canada, according to an obituary placed in the Detroit Free Press. “I never met anyone who was as gracious” as Schultz, Wilhelm said. “She faced any challenge with tenacity and truly shined in the presence of others.” A pioneer in her field, Schultz’s tenacious effort paid off in 1999, when the Automotive Hall of Fame presented its Distinguished Service awards to three women for the first time since 1945. They were Schultz;

Maureen Kempston Darkes, then-president of General Motors of Canada; and Bobbie Gaunt, thenCEO of Ford Motor Co. of Canada. Schultz and the association’s influence played a role in the hall of fame’s decision, Crain’s Detroit Business reported in 2002. Schultz was a member of the association’s board of directors at the time. “Women are out there doing the job, but it’s all about getting the visibility that men have always gotten,” Schultz told Automotive News in 2000. “That’s where the ‘old boys club’ came to be. They knew about each other. They had a system. Today it’s changing, more and more women’s names are coming up.” Before the organization folded in 2017, Schultz received the final Women’s Automotive Association International Spirit of Leadership award.

“She had a way to get whatever she needed to support others,” Wilhelm said. “She was a mentor, a sympathetic ear, and very dear friend to many.” Schultz is survived by her daughter Tracey Ridenour and grandchildren Dean and Laine Ridenour. She was preceded in death by her husband Arthur, son Brian and sister Natalie. A memorial service is scheduled for July 14 at 10 a.m. at Holy Name Catholic Church in Birmingham. A celebration reception will follow the services at a location to be determined. A private ceremony will be held at Great Lakes National Cemetery in Holly at a date to be determined. Donations can be made in Schultz’s name to Juvenile Diabetes Foundation, Northwood University Spirit of Leadership Endowment Fund or the Michigan Humane Society.

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Wayne State students develop electronic medical record used by international medical missions Need to know

By Jay Greene

JJThree former Wayne State students developed software that medical teams on international missions use to track patient care

jgreene@crain.com

When Nabil Othman, M.D., was a third-year medical student at Wayne State University School of Medicine, he took a trip to Haiti in 2014 with 19 of his closest friends. But it wasn’t a vacation. He was on an international medical mission, one he later said gave him a deeper appreciation of his field. But Othman was also testing a newly invented electronic medical record system for traveling medical teams. Co-developed in 2011 by Sarah Draugelis and two of her WSU classmates, Team fEMR is now used by at least five medical relief organizations, including doctors and students at Wayne State with the World Health Student Organization and International Samaritans of Ann Arbor. “We used fEMR twice in a mountainous community outside Port-auPrince, once in February and once in December” 2014, said Othman, who grew up in Detroit and now is a second-year anesthesiology resident at Cedars-Sinai Medical Center in Los Angeles. Sarah Draugelis: Othman said Co-developed the experience fEMR system. he and other medical, pharmacy and nursing students had with Wayne State doctors was “fantastic.” He said each visit was for a week, and the team treated nearly 500 people. “When I was in medical school, I wanted hands-on experience. We were studying all year long, and I wanted to do something,” he said. “We set up a primary care clinic there and used fEMR to do all the charting.” Draugelis said fEMR has logged more than 30,000 patient records the last four years from trips to Haiti, Peru, the Dominican Republic, India and Ecuador. Besides Wayne State, Florida State University, Louisiana State University and University of Toledo, she said. “I began this work when I was a student at Wayne State after noticing a lack of continuity in medical volunteers after the 2010 earthquake in Haiti,” said Draugelis, a premedical student at Wayne State who graduated with a psychology degree. She also is a professional ballerina performing in Detroit and Chicago. The fEMR program is free, opensource software that can be downloaded by anyone, Draugelis said. The co-founders also include Kevin Zurek, a computer science graduate who works now at Ford Motor Co.; and Erik Brown, a neurosurgery resident in Portland, Ore., who also was in Wayne’s M.D.-PhD program. The current chair of Team fEMR is Chih Chuang, M.D., a WSU professor of medicine and palliative care specialist at John D. Dingell VA Medical Center in Detroit. He will be succeeded in July by Justin Hickman, M.D. Chuang said Wayne State students continue to participate with WHSO and go on medical missions,

JJSince 2014, dozens of Wayne State medical, pharmacy and nursing students have traveled to Haiti and the Dominican Republic JJFEMR is a free and open-source software system

Nabil Othman (left) at a clinic in Haiti in 2014 as a medical student at Wayne State University.

Kevin Zurek, a computer science graduate who works now at Ford Motor Co, is a co-founder of Team fEMR.

now focusing on public health. However, due to unrest in Nicaragua, WHSO has shifted more to Haiti and the Dominican Republic. He said Wayne students have already gone this year and are planning a return in 2019. “Volunteer doctors and nurses take a suitcase filled with the laptop

and the software loaded. They use the laptop as an intranet server and can connect with iPhones or other laptops. This allows them to work in remote areas and take care of patients,” said Draugelis, who went on medical missions in 2011 and 2012 during the testing phase of fEMR. For repeat medical missions,

SARAH DRAUGELIS

Draugelis said the patient records help doctors track medical care and also know what supplies to bring. “In Haiti, if we knew there were a number of high-risk pregnancies, we could have brought extra kits and supplies,” she said. Mohammed Arsiwala, M.D., an internist who often goes on interna-

tional medical missions to Africa, said he is familiar with fEMR and knows doctors who have used it. “It is very effective. Wayne State uses it, and it can benefit you if you work in an area that doesn’t have wifi and you can work off a laptop and log visits,” said Arsiwala, president of Michigan Urgent Care Centers and also is president-elect of the Michigan State Medical Society. But Arsiwala, who also operates a charity, the H.E.L.P Foundation, said he has his own methodology for recording patient visits. He often travels on medical missions with his wife, Tara Coughlin, who also has a medical foundation, Malayka International. “I was in Africa” last month “and I do registration manually. I write things down. Every day 500 to 600 people show up. They don’t have a photo ID, and I can’t log all the information into an EMR,” Arsiwala said. In Haiti, Othman found that many of the Haitians had common and recurring primary care problems, including hypertension, diabetes and reflux disease. But there were patients with HIV, breast cancer and advanced mitral valve disease. “We saw a lot of worm infections and gastrointestinal problems,” he said. One of the benefits of fEMR was continuity of care, Othman said. For several years, Wayne students, doctors and nurses visited the same community and saw the same patients. “We went back year after year at scheduled times. We thought we would use fEMR to hold community’s medical record. It worked very well for four years,” he said. “I think it demonstrated the value that you can have a medical record without any internet infrastructure.” Othman said students and doctors took medical histories just like in the U.S. “It took 15 to 20 minutes, on par for normal. We got pictures, names, addresses of people, birthdays. We took a full history, present illness, past surgical history, social history, current medications and allergies.” While he said he is enjoying his anesthesia residency at a busy 1,000-bed urban hospital, Othman said he is looking forward to going out on another medical mission. “I learned from before how really refreshing the experience was,” he said. “The people from Haiti or other countries, they don’t have the same care we have here in the U.S. They are more grateful and trusting. After all the administrative work and insurance forms, missions are a more pure form of medicine.” 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 // J U LY 9 , 2 0 1 8

Kefallinos buys 630-acre former Boy Scouts camp File this in the I Really Didn't See That One Coming category. Detroit real estate investor Dennis Kefallinos has purchased a large former Boy Scouts of America campground in Lupton about 10 miles from the Huron National Forest. It’s not yet known what Kefallinos plans to do with the 630-acre property at 3552 Lakeshore Drive, about 20 minutes northeast of West Branch, Chris Mihailovich, one of his top lieutenants, told me. “We are evaluating what’s the best use of the property going forward, wish I had some more news,” he said in a text message Monday night, adding that he did not know the purchase price. We at least know it was listed for $1.9 million, or $3,016 per acre. Staff in the Ogemaw County register of deeds office said a deed was filed April 27 for the April 23 sale of the Northwoods Scout Camp to Ivory Properties LLC, which is the 30-year-old LLC registered to Kefallinos at 1600 Clay St. in Detroit. That’s the address of the Kefallinos-owned Russell Industrial Center off I-75. The campground, which closed in 2016, had been owned by Chief Okemos Council No. 271, one of nine scout councils that in 2012 had merged to create the Michigan Crossroads Council, which oversees Boy Scout properties, personnel and programs for the Lower Peninsula. According to an online market-

KIRK PINHO

kpinho@crain.com

Need to know

JJ Detroit real estate investor bought Northwoods Scout Camp site in April JJ Plans for the Lupton property are unknown JJ Had operated as a Boy Scouts campground until 2016

ing brochure prepared by Portage-based brokerage Midwest Realty Group LLC, which represented the Michigan Crossroads Council, the property includes the 80-acre private Lake Arrowhead as well as frontage along Big Williams Lake and Big Norway Lake. It also includes campsites, shooting ranges, a ranger’s cottage and a log cabin, the brochure says. A message was left with Rick DeKam, the Midwest Realty Group listing broker on the property; and the Crossroads Council. Kefallinos has been buying and selling Detroit buildings for decades. He often speaks of grand visions for the properties he purchases but rarely do his redevelopment plans

COSTAR GROUP INC.

The Northwoods Scout Camp in Lupton sold to Detroit real estate investor Dennis Kefallinos in April. It has 630 acres and includes the 80-acre private Lake Arrowhead.

come to fruition. Last year, he put 30 properties on the market for sale or lease. He later walked back the idea that he was having a fire sale on his nonresidential portfolio in

an interview with yours truly. He has long been accused of sitting on properties and doing little if anything to improve them, and renting substandard apartments to

tenants, as is alleged in a class-action lawsuit. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

Litigation Experience

In Your Corner. ®

FIST OF CURRY

Mexicantown’s Fist of Curry closed Sunday after opening in February.

Fist of Curry closes after six months Mexicantown’s Fist of Curry announced it would close its doors for good last Sunday. Formerly the Huron Room, Fist of Curry opened in February, replacing the seafood restaurant. “We’ve been honored to share this concept of world curry, and it’s been our pleasure to serve you during our brief tenure at 2547 Bagley Avenue,” Fist of Curry said on its Facebook page. “But the corner of 18th and Bagley has other plans.” Owner Inlaws Hospitality also runs nearby Green Dot Stables and Johnny Noodle King. Fist of Curry also teased more things to come at the location. “For those of us who believe in new beginnings, we say ‘seeya.’ Stay tuned, Detroit,” it said. — Laura Cassar

Business litigation, contracts and commercial matters

Construction law and litigation

First Tier Ranking in Corporate Law and Commercial Litigation

Contact Rich Hewlett at rthewlett@varnumlaw.com

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

OPINION EDITORIAL

Lyon case shows need for protection T

his week may bring an end to one of the most tortuous — and expensive — legal episodes in Michigan history. A 10-month preliminary exam for state health Director Nick Lyon is expected to end Wednesday with a Genesee County district judge deciding by July 25 whether prosecutors commissioned by Attorney General Bill Schuette have enough evidence to bring Lyon to trial. We are not making a value judgment on lives lost to Legionnaires’ disease, but we suspect this case has more to do with Mr. Schuette’s gubernatorial bid than righting a wrong in Flint. Putting Lyon on trial could have a chilling effect that would haunt Michigan for years to come. State administrators — if they could be lured into public service in the first place — may hesitate to make big decisions. Lyon is facing involuntary manslaughter charges for the Legionnaires’ disease-related deaths of two men, among 12 fatal incidents of the disease that happened concurrently with the Flint water crisis. Lyon’s case, and similar charges against state Chief Medical Officer Eden Wells, hinge on whether Flint residents should have been warned of an increase in Legionnaires’ incidences in 2014 and 2015. Perhaps they should have been, though conclusive evidence that the switch of Flint’s water supply was responsible for the outbreak is still unclear. The state health department also produced evidence the increase was connected with plumbing at McLaren Flint hospital. In government, It was a judgment call. Lyon officials need some may have made the wrong judglevel of security ment in not warning people sooner. they won’t be But that should not rise to the prosecuted simply level of criminality, especially givfor doing their jobs. en that scientific experts are still debating what caused the outbreak. It’s been an expensive debate for Michigan taxpayers. The Department of Health and Human Services’ legal tab so far, which the state is paying, amounts to $5.3 million. More than a quarter of that has gone to Lyon’s defense. That doesn’t account for other state legal costs and the millions of dollars Schuette has spent on special prosecutor Todd Flood’s scattershot operation investigating the water crisis, which could bring the total state legal bill north of $30 million. Simply put: Putting Lyon on trial would set a terrible precedent for how we police state officials. In government, officials need some level of security they won’t be prosecuted simply for doing their jobs. They often are called on to make decisions that can have life-or-death consequences. The law recognizes this necessity. Police officers and firefighters have strong protections against civil or criminal charges stemming from actions they take while performing their jobs. State officials should have the same. Sometimes officials have to make decisions based on imperfect information, but fear of criminal consequences is likely to make them choose the safe option or choose inaction over action. If they fear being prosecuted for not warning the public, we will see an epidemic of state officials crying wolf. There’s already enough CYA in government; the law shouldn’t encourage it further.

LETTERS

Ford should consider sign sculpture

To the editor: As a matter of continuing to add civic art to Detroit and keeping the excitement with Ford moving into the Michigan Central Station going, I believe much good would be done by installing a sculpture sign in front of the Depot similar to the “I amsterdam” sign in front of the world-famous Rijksmuseum and similar sculpture signs in other cities, such as the “Sing the Queen City” sign on the Cincinnati riverfront. Other than continuing to add civic art, a sculpture sign would have several benefits. It would continue to attract photo opportunity visitors to Corktown, the depot, park and upcoming retail that will fill the depot long after the excitement of the recent news dies down. A sculpture sign would also provide an opportunity for the city, Corktown

The “I amsterdam” sign in front of the Rijksmuseum.

or Ford to brand the project in a more meaningful way than has been thought of yet with the endless array of Detroit-branded products while avoiding detracting from the depot’s image by keeping the sign at the ground and off the building. So I ask the city’s or Ford’s design team to consider this opportunity as they work toward reopening the depot and continuing to build on Detroit’s

positive momentum. Eric Fazzini Commerce Township

newspapers’ owners can yell, “uncle,” and the JOA would end, effectively putting one of the two papers out of business, something that was postponed for three decades. My hope is that both corporations would simply not be willing to kill their newspaper, and both would continue to operate under separate ownership. That would be the best of all possible worlds, though I know that is unlikely. This inevitable decision has been kicked down the road for many years. During the JOA’s existence, a great deal has changed in the newspaper world, making it much tougher for

both papers to continue to exist. The vast majority of JOAs created nationally are defunct. On the eve of launching this publication in 1985, as talk started to simmer about a JOA in Detroit, I lobbied for a continuation of two completely independent publications. It was not successful then, and I have no idea what the owners plan to do during any window available to them to dissolve the current partnership. I hope both papers can survive somehow. Although I am pessimistic, Detroit should have two papers. We may find out the future soon.

More on WJR Hear Crain’s Group Publisher Mary Kramer and Managing Editor Michael Lee talk about the week’s stories every Monday morning on WJR 760 AM’s Paul W. Smith Show.

It has lasted for nearly 30 years

s U.S. Attorney General Ed Meese was walking out the door at the end of the Reagan administration in 1988, he approved the Detroit joint operating agreement for our two hometown newspapers. It was an act of Congress that allowed two failing newspapers in a market to work together as one business to survive regardless of laws enforcing competition. Versions of the Detroit JOA now been in effect for nearly 30 years, and the community has been able to have two newspapers with separate editorial staffs for all that time. That has given metro Detroit, theoretically,

KEITH CRAIN Editor-in-chief

two points of view, while at the same time combining all their business operations into one, allowing them to survive and make a profit. Unfortunately, it looks like even

with the JOA, these two papers are going to have to face the ugly reality that the time has come to figure out what to do about the combined operation in a very tough time for the daily newspaper business. Make no mistake, Detroit deserves two newspapers with two even more distinct voices than they have today. As the country becomes more polarized all the time, it certainly serves our community to have two strong and opposed voices. Sadly, the Detroit JOA has not worked out quite as intended. There are certain points in this relationship when one or both of the

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

As MSU and Uber show, compliance starts at top

ichigan State University will soon get a chief compliance officer, but it still has a problem — and it starts at the top. No new title or office will fix a culture that missed or ignored warning signs involving the behavior of gymnastics doctor Larry Nasser and Dean William Strample, both of whom were star performers at the university. MSU provides an object lesson that business owners and executives ignore at their peril. When a top performer gets a pass for bad behavior, the organization learns. It learns not to push important people too hard on integrity. It learns cynicism. It learns how to get away with bad behavior. And MSU is hardly the only organization with this issue. Uber. Wells Fargo. MSU. Uber had a process for handling complaints of sexual harassment. Susan Fowler, the soon-to-be famous whistleblower invoked this process by going to the human resources department. She was told the harasser was a top performer, so nothing could be done. Wells Fargo had multiple policies and processes to prevent improper transactions. Its process flagged employees opening fraudulent accounts, effectively stealing from customers. But that business unit was very successful, and thus its leader was a star performer. She argued that it was stealing from only a small percentage of customers and could reimburse any customers who complained. The leader was allowed to prevent reports from getting to the corporate office and the board. Michigan State had a process for performance reviews of deans and for investigation of Title IX complaints. Numerous reports of sexual harassment by Strampel were considered in his performance review. There were investigations of reported abuse by Nasser. But Strampel was an important and successful dean, and Nasser brought renown to the university by treating elite gymnasts. They were given the star treatment. Their misdeeds were ignored. In each of these examples an important and powerful person became involved in a process designed to detect and prevent misbehavior. In each, the culture gave privilege to the powerful, the process was cut off and horrible things happened. And in each, the consequences for the organization, and for the CEO and several levels of top brass, were dire. At MSU, hiring a chief compliance officer and creating an office to correct what interim MSU President John Engler called a “diffuse and disorganized” administration aren’t the most important part of the solution. Over many years as a general counsel, building compliance programs and working through compliance problems at multinational companies, I’ve learned that more processes aren’t enough to change the result, and that hard work by leadership is the key factor for success. Mr. Engler (or the CEO of any company) cannot simply delegate compliance to compliance people. A compliance office exists to help leadership build a culture and apply high standards of conduct, not to “do” compliance so leadership can ignore it. Compliance professionals can spot red flags, but only leadership

OTHER VOICES David Jaffe

can do something about them. Here are a few key elements of a successful compliance program, which only MSU’s top leaders can provide:  Encourage people to report con-

cerns, ask uncomfortable questions and prevent retaliation.  Ensure that each employee and student knows that her or his boss, coach or teacher expects and models ethics conduct and compliance.  Create incentives for good conduct and avoid incentives for bad conduct.  Use the data the compliance office will generate to change the organization. And, especially important in light of MSU’s history:  Assure there is only one standard: Important people can’t get away with bad conduct, bad conduct is penalized appropriately, and compliance

I’ve learned that more processes aren’t enough to change the result, and that hard work by leadership is the key factor for success. is not used as a pretext to punish people. And how would your organization’s culture stack up? Has the CEO given a top performer a pass on an

ethical or legal violation because that person is “just too important to the business right now?” Have you disciplined subordinates but not even given a public reprimand to a culpable superior? Have you let a star escape a process because he or she is “too busy” adding value? That value, and much more, can disappear very quickly. A compliance officer can add a lot of value by helping leadership lead. But it’s up to leadership to make any compliance effort real. David Jaffe is principal of Birmingham-based Jaffe Counsel.

Why Crain’s Leadership Academy? Promoting leaders from within your organization is smart – some research suggests that leaders promoted from within a company have higher productivity gains than outside recruits. The Academy is a unique five-session program that pulls promising leaders and executives together to build their innate management strengths and form lasting professional relationships. Participants leave ready to lead and grow. How would you rate your overall satisfaction with Leadership Academy?

The Academy provided skills and tools that will help me grow as a leader.

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of surveyed graduates said agree or strongly agree

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Ideal participants have a minimum of seven years business experience, and/or manage a team, and who are on the fast track for increased responsibility at any level of an organization. Participants have represented mid-size enterprises, nonprofits, Fortune 500 companies and educational institutions. For more information, contact Keenan Covington at kcovington@crain.com or 313-446-0417. You can also visit www.crainsdetroit.com/leadershipacademy.

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

FOCUS

PRIVATE DINING ROOMS

Out of the office

ot every meal eaten near co-workers needs to be warmed up in the office microwave: Bring employees out of the office and into a private dining room. The best locations for food-accompanied business meetings offer not just blank walls and box lunches but expressive decor and diverse cuisines. At our selection of metro Detroit op-

tions, collaborate at a long table alongside an open set of French doors, pass Cantonese dishes family-style or enter a historic club downtown. We’ve tried to highlight a variety of cuisines, styles and prices, but this selection only scratches the surface of what’s available. Prices and food are subject to change by season and group size. — Annalise Frank

Br Ch Bo

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Rattlesnake Club

Rattlesnake Club Rows of masks decorate this steakhouse’s colorful, semi-private room called the Grill. The Rattlesnake Club sits along the Detroit RiverWalk and has several private options. Capacity: 40 maximum in the Grill room

Cuisine: A seasonal set menu Cost: Minimum around $100, depending on the season Contact: (313) 567-4400 or catering sales manager Michelle Taylor at michelle@rattlesnakedetroit.com Address: 300 River Place Drive, Detroit

Ike

Traffic Jam Pop’s for Italian

Pop’s for Italian A spacious, industrial-modern Ferndale restaurant offers a private room with an exposed ceiling, multicolored wood flooring and a private bar. Capacity: 100 Cuisine: Italian dishes in set menus, family-style, as a buffet or passed appetizers Cost: From under $1,000 to around $2,000, depending on size and the day of the week Contact: kim@popsforitalian.com, (248) 268-4806 Address: 280 W. Nine Mile Road, Suite #2, Ferndale

Traffic Jam & Snug Those seeking a quiet moment in the city can turn to Traffic Jam, an eclectic Midtown joint established in 1965. The brick-lined pub has a private room businesses and medical schools often use for presentations or meetings. Capacity: 40 Cuisine: Varied fish, meat and vegetarian options, with a focus on house-made baked goods, cheeses and beers, as well as produce grown on the Traffic Jam roof and greenhouse Cost: Minimums are generally $300; most private menus range from $25 to $75 per person Contact: (313) 831-9470 Address: 511 W. Canfield St., Detroit

A ous hou whi che clud ronings Cap che Cuis ern food plat dish cust Cos son Con com Add Det

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

La Dolce Vita This old-world Italian restaurant is known for its elegant ambiance along Woodward Avenue, near Detroit’s Palmer Park. It hosts private dinners in two adjoining back rooms or larger events during off hours that spill onto a garden patio. Capacity: Two rooms, 24 and 44, or combined for around 70 Cuisine: Traditional Italian dishes off its menu; standard dinner menus that finish with fresh cannolis; and brunch options such as crepes, Fettuccine Florentine and salmon hash Cost: Set menus range from $28-$48 per person for dinner and $18-$20 for brunch. Off hours, fees to open the restaurant run from around $300$500 Contact: (313) 865-0331 Address: 17546 Woodward Ave., Detroit

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ank La Dolce Vita

Brix Wine & Charcuterie Boutique

This wine bar and retail space in a renovated bank building in Detroit’s West Village offers small gatherings in a refurbished bank vault, complete with bar-lined door and tiled walls. Capacity: 10 Cuisine: Dine on prosciutto, salami and cheeses served on wooden boards. Sample from an evolving wine list. Cost: Minimum of $250 Contact: (313) 267-4006 or info@ brixdetroit.com Address: 7968 Kercheval St., Detroit

ods,

Ike’s Restaurant

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Three private and semi-private dining areas with accommodations from 10 to 300 guests Available AV equipment Pre-set menus starting at $25 per person

Mention this ad for a first-time booking incentive.

Brix Wine & Charcuterie Boutique

Ike’s offers several no-frills dining rooms along the central thoroughfare Van Dyke Avenue in Macomb County. A long list of Lebanese appetizers — kibbeh, baba ghanoush, etc. — can be ordered alongside smoked salmon, lobster tails and chicken wings. Capacity: Several rooms for 20-40, 20-50 Cuisine: Lebanese focus, with substantial American, Greek and Italian options Cost: Starting at $15 per plate Contact: (586) 979-4460, ike@ikesrestaurant.com Address: 38550 Van Dyke Ave., Sterling Heights

Gold Cash Gold A Corktown building previously home to a pawn shop houses Gold Cash Gold, which offers private meals at a chef’s table. Decor touches include stained glass and chevron-style recycled-wood ceilings. Capacity: Up to 13-15 at the chef’s table Cuisine: Chef-driven, southern and French-influenced food off the menu, tasting plates paired with drinks or dishes specifically tailored to customers Cost: Starting at $54 per person for parties with a set menu Contact: inbox@gcgdetroit. com Address: 2100 Michigan Ave., Detroit

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C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

SPECIAL REPORT: PRIVATE DINING ROOMS

PizzaPlex L3C This Neapolitan pizzeria and cafe in Southwest Detroit has a casual atmosphere with strings of lights and splashes of art. It acts as a social enterprise, aiming to reinvest profits back into its employees and surroundings. Capacity: 15 to around 55 Cuisine: Classic wood-fired, Neapolitan-style pizzas and Italian sides Cost: A minimum of around $10 per person for a group of 15. Pizzas range from $8-$13 Contact: (313) 757-4992 Address: 4458 W Vernor Highway, Detroit

Atwater Brewery in Detroit

Atwater Brewery in Detroit The brewery known for its German-style lagers takes private diners in the same space where it stores its barrel-aging beer: the Barrel Room. Capacity: Up to 50 seated Cuisine: Full catering menu with American standards such as sandwiches and prime rib Cost: Room fee of $100 an hour with a three-hour minimum; Food starts at $14 per person Contact: eventsdetroit@atwaterbeer.com Address: 237 Joseph Campau Ave., Detroit

PizzaPlex L3C

Selden Standard

A minimalist, black-andwhite room has a wall of French doors that can be opened up to the outside. Capacity: Up to 35 seated Cuisine: Seasonal, preset menus with internationally influenced New American cuisine Cost: $35 per person for lunch or brunch; around $70 per person for dinner. Room fees and minimums may apply. Contact: events@seldenstandard.com or (313) 4385055 Address: 3921 Second Ave., Detroit

Hong Hua

The Detroit Club

The Detroit Club The historic club in an 1892 Romanesque Revival building recently underwent a multimillion-dollar overhaul. Private spaces are intricately decorated, with paintings in elaborate frames and large, wooden furniture. Capacity: 13-24 Cuisine: French-inspired American dishes, meat and seafood Cost: Small group dinner prices start at $58 per person Contact: (313) 338-3222 Address: 712 Cass Ave., Detroit

Hong Hua

With a flair for seafood and a vast menu spanning several regions of China, Hong Hua has gained a following from its white-linen-laden post in Farmington Hills. Capacity: 30-50 Cuisine: Traditional Cantonese, Hong Kong-style and Chinese dishes, with a focus on healthful cooking; custom upon request Cost: Depending on group size and the day of the week, costs can range from around $500-$2,000 Contact: (248) 489-2280, ask for Danny Yu or Gary Yau Address: 27925 Orchard Lake Road, Farmington Hills

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

CALENDAR WEDNESDAY, JULY 11 Tech Takeover: Industry 4.0 & The New Frontier of Innovation. 7:459:30 a.m. Automation Alley. Information about how companies can apply digital technologies on their factory floors. Hear case studies on how organizations are using the industrial Internet of Things to accelerate innovation and growth, discover why every organization needs an augmented reality strategy. Speaker: Howard Heppelmann, divisional vice president and general manager, Connected Operations Solutions, PTC. Automation Alley. $10 members; $20 nonmembers. Phone: (800) 427-5100; email: info@automationalley.com 1 Million Cups. 9-10:30 a.m. Oakland County Economic Development and Community Affairs. Two early stage startups will do a six-minute presentation on their companies to potential advisers, investors and fellow entrepreneurs. Free. Executive Office Building Conference Center, Waterford Township. Contact: One Stop Shop, phone: (248) 858-0783; email: smallbusiness@oakgov.com; website: 1millioncups.com/oaklandcounty

THURSDAY, JULY 12 Professional Edge Workshop on Crisis Communications. 8-9:30 a.m. Birmingham Bloomfield Chamber. A workshop on crisis communication plans designed to protect and

defend an individual, company or organization facing a threat to its reputation. Free; registration required. La Strada Dolci e Caffe, Birmingham. Contact: Kelly Bennett, phone: (248) 430-7688; email: kellyb@bbcc.com

UPCOMING EVENTS Tech Tuesdays: The Impact Of Robotics and Automation on Small Manufacturers. 8 a.m.-1 p.m. July 17. Lawrence Technological University. Session shares how companies are applying automation and robotics technology to improve the delivery of durable goods and at better margins. Presentations by Dan Radomski, mentor in residence, LTU Collaboratory; Corey Carolla, Red Rabbit Automation/Vickers Engineering; Mike Foster, Behco-MRM; Ryan Astor, ARM and LTU Robotics Engineering summer camp students. Lawrence Technological University. Free with online registration. Contact: Mark Brucki, email: mbrucki@ ltu.edu. Website: ltucollaboratory. com/events/tech-tuesdays-robotics-and-automation/ Government Contracting 101. 9 a.m.-noon. July 19. Schoolcraft College. What does it take to become a successful government contractor? What services and resources are available to a small business pursuing the government market? Seminar will give insight into companies considering the field of government con-

tracting. Schoolcraft College, Livonia. $45. Contact: Kara or Shannon, phone: (734) 462-4438’ email: ptac@ schoolcraft.edu Apprenticeship Info Session: Addressing the Manufacturing Talent Shortage. 9:30-11:30 a.m. July 24. Automation Alley. Information session to learn more about implementing a registered apprenticeship program and about ApprenticeshipUSA, a Department of Labor-funded grant partnership between Automation Alley and the state of Michigan. Speakers: Marybeth Koski, Department of Labor, Employment and Training Administration; Collin Mays, talent development coordinator, Southeast Michigan Community Alliance (SEMCA) and Karol Friedman, director, partnerships and talent, Automation Alley. Michigan Manufacturing Technology Center, Plymouth. Free. Contact: Karol Friedman, email: podsiadlikl@automationalley.com Lead Your Company to the Top: Strategic Planning Workshop. 8:3010:30 a.m. July 25. Michigan Manufacturing Technology Center. Program to help determine performance in comparison to competitors while identifying potential areas for improvement. Free. Michigan Manufacturing Technology Center, Plymouth. Contact: Theresa Gaston, phone: (734) 4514208; email: inquiry@the-center.org; website: the-center.org

DEALS & DETAILS MERGERS & ACQUISITIONS J Varroc Lighting Systems, Plymouth, an exterior vehicle lighting supplier, acquired Sa-ba Automotive, a privately owned company headquartered in Istanbul, Turkey. The acquisition includes a 10,000-square-meter manufacturing and technology center near Istanbul and a plant under construction in Dimitrovgrad, Bulgaria. Terms and conditions were not disclosed. Also, Varroc Lighting opened a new production facility in Vietnam, about 30 minutes outside of Hanoi. Website: varroclighting. com

CONTRACTS Stoneridge Inc., Novi, an automotive electronics designer and manufacturer, has partnered with Shell Lubricants and AirFlow Truck Co. LLC, Newington, Conn., to fit its MirrorEye camera monitoring system on a hyper-fuel efficient truck, the Starship Initiative. Websites: stoneridge.com, airflowtruck.com J JSJ Corp., Grand Haven, a holding company with manufacturing, distribution and service businesses, is investing in UVAngel, Livonia, a maker of automated disinfection technology for surfaces such as keyboards, touchscreens and equipment in health care facilities, food service outlets and retail stores, for manufacturing, engineering and licensing agreements. Websites: uvangel.com, JSJcorp.com J

The U.S. Army Contracting Command, Warren, awarded a $33.8 million contract to weapons manufacturer General Dynamics Ordnance and Tactical Systems Inc., St. Petersburg. Fla. The contract was issued May 22 and is expected to run through March, 2019. Websites: gd-ots.com, acc.army.mil J Folkteller LLC, Detroit, a new media publishing company, has partnered with Intensify Digital, Detroit, a video broadcast, marketing and social media technology company, and filmmaker Amy Weber to launch a new media fantasy series, “Excerpts from an Unknown Guidebook.” The series launches in August, beginning as a book that will move into film, television and streaming media. Websites: intensifydigital.com, folktellerstories. com J InfuSystem Holdings Inc., Madison Heights, provider of infusion pumps and related services for the health care industry, has selected Smiths Medical, part of Smiths Group plc, Minneapolis, Minn., manufacturer of specialized medical devices and equipment, as an official distributor of its CADD infusion therapy products for ambulatory medical uses. Websites: infusystem.com, smiths-medical. com J

EXPANSIONS J Domino’s Pizza Inc., Ann Arbor, a pizza company, has opened a store in Pristina, Kosovo. Website: dominos.com

J JKL Associates, Grosse Pointe Farms, a business consulting services company, has opened an office in Kissimmee, Fla., and enhanced its virtual delivery of services. Websites: jklassociates. com, promiseculture.com J Cooper-Standard Automotive Inc., Novi, a part of Cooper-Standard Holdings Inc., a supplier of systems and components for the automotive industry, broke ground on a 100,000-square-foot rubber mixing facility in Aguascalientes, Mexico. Website: cooperstandard. com J American Axle & Manufacturing Inc., Detroit, an automotive driveline and powertrain components supplier, is expanding operations in the industrial area of Viladecans, Spain, with a facility to open in January 2019 to produce powertrain components for Europe’s automakers. Website: aam.com

NEW PRODUCTS J Valentine Distilling Co., Ferndale, has released a new bottle for its vodka that features vertical ridges and a re-designed label. Website: ValentineDistilling.com J Shinola Detroit LLC, Detroit, a luxury goods maker, has released a Statue of Liberty timepiece collection, created in partnership with The Statue of Liberty-Ellis Island Foundation Inc. Website: shinola. com

Submit Deals & Details items to cdbdepartments@crain.com

Everything is a Presentation with Michael Angelo Caruso. 5:30-7:30 p.m. July 26. TiE Detroit. Speaker Michael Angelo Caruso, founder and president of Edison House, an Caruso international consulting firm specializing in corporate and personal improvement. TechTown — The Garage. Free. Contact: Jacqueline Perry, phone: (248) 254-4087; email: jacquelinep@kyyba.com; website: detroit.tie.org Social Media for Business Growth. 9-11:30 a.m. Aug. 15. Oakland County Economic and Community Affairs. Terry Bean, Motor City Connect, will present what works, what to avoid and how to use LinkedIn, YouTube, Facebook and Twitter. Topics include three things to do to find success on each platform, how to use status updates that gain attention, ways to manage priorities, how to make posting simpler and fastest way to grow an audience. $40. Oakland County Executive Office Building Conference Center, Waterford. Phone: (248) 858-0783; email: smallbusiness@ oakgov.com Measuring the Effectiveness of Goals with Metrics. 8:30 a.m.-10:30 a.m. Aug. 16. Michigan Manufacturing

Technology Center. Program helps assess a company’s performance, establish relevant business metrics and prevent goals from being missed in the future. Workshop is focused on achieving positive organizational change. Michigan Manufacturing Technology Center, Plymouth. Free. Contact: Theresa Gaston, phone: (734) 451-4208; email: inquiry@the-center. org; website: the-center.org Marshall Plan for Talent Workshop. 1-3:30 p.m. Aug. 16. Lawrence Te c h n o l o g i c a l University. Roger Curtis, director of the Michigan Department of Talent and Economic Development, Curtis will provide an overview of Gov. Rick Snyder’s Marshall Plan for Talent to prepare students and adults for jobs. Free with online registration. Lawrence Technological University. Contact: Mark Brucki, email: mbrucki@ltu.edu 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.

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

WOMEN IN LEADERSHIP

A few questions for Linda Schlesinger-Wagner active wear. Skinnytees has been featured on “The View,” “Good Morning America” and QVC.com. ¶ Schlesinger-Wagner began her career Linda Schlesinger-Wagner founded fashion line skinnytees in 2009 at 60 as a bookkeeper for her father’s Livonia-based tool manufacturing comyears old. The $6 million company manufactures women’s fashion tanks pany, James Tool Co, from 1967-1984. While working at James Tool, she and tops that can stretch to accommodate different body types and come opened a children’s store in 1977, called Rainbow Lollipop in downtown in a variety of colors and styles. The Birmingham-based Skinnywear LLC Birmingham. After closing the store in 1985, Schlesinger-Wagner began has more than 200 different products, including leggings, dresses and manufacturing clothing full time. By Rachelle Damico

Special to Crain’s Detroit Business

Why did you decide to start a fashion company?

dog watching, baby-sitting, working for a party planner and working as a stylist for a photographer.

My grandmother taught me to sew when I was little, which was a creative outlet for me. I learned about and became interested in business while working for my father’s company. I didn’t really go to college, but he gave me a great background. I had a 5-year-old son at the time and was told by my doctor that I couldn’t have any more children, even though I did go on to have a daughter. I liked to be around children and thought having a business centered around that would be fun and happy. That’s when I opened Rainbow Lollipop.

How did skinnytees begin?

What were your early years like?

I went to Europe to buy for my store, but I wanted to make something myself. I bought a knitting machine and designed vests to go into my store, each one different. I didn’t know a thing about knitting, but I taught myself by reading the manual. I hired sales representatives in California and New York who had a large customer base, and they helped put me on the map. I sold thousands of vests. In 1980, I made 250 vests for the international kids show in New York. Neiman Marcus bought all of them. It validated what I did, because they loved it. I went from being a retailer to becoming a children’s wholesaler of knitwear, selling to high-end specialty stores all over the United States. Were there any challenges?

I went on to have a successful children’s wear business, but the kids business is hard. We were trying to be everything to everybody. If you count

SKINNYTEES

Skinnytees manufactures women’s fashion tanks and tops that can stretch to accommodate different body types.

all the sizes in kids, I think there’s 17 sizes in girls, 14 in boys. It was just crazy. A sales representative in New York contacted me about making a matching mother-daughter vest set for a well-known woman’s store at the time, Betsey Bunky Nini, which was on Madison Avenue in New York. That’s when I started manufacturing women’s clothing under the label Annie M Knitwear. I loved it, but we were chasing people for money all the time. That became a real headache. I closed that business down and worked different jobs, including

I got a divorce about 12 years ago and purchased a house on an adjustable rate mortgage. When the economy collapsed in 2008, my mortgage rate skyrocketed. I realized I needed to make some money, because I had to keep the house. I redesigned a camisole I made 10 years previously to go under a sweater. I wanted something that would sell to most women (regardless of body type) in many colors without having to offer sizes. I came up with the name skinnytees in the middle of the night, and purchased the domain name on GoDaddy for $8.99. I started out with one bin of camisoles and $1,000 worth of product, working out of my home. Now we have an 8,000-square-foot facility in Birmingham and a fabulous team.

have to take all the returns. However, we sold out in three minutes for a 10-minute spot. That kept us going and the money growing. Then they asked us to do “Today’s Special Value,” which is a 24-hour sale. They order a couple hundred thousand sets, so it became big numbers. When I received the first check from that, it was a check like I’ve never saw before. I thought, oh my god, I really did it.

“Most people don’t realize that when you sell to QVC and you’re new, if your product doesn’t sell you have to take all the returns.” Linda Schlesinger-Wagner

Linda Schlesinger-Wagner

When was the moment that put skinnytees on the map?

QVC approached me five years ago. I met with them and presented skinnytees to eight younger women. I showed up wearing tons of skinnytees and showcased different outfits. They loved my presentation. I had 60 days to sell 12,000 pieces. Most people don’t realize that when you sell to QVC and you’re new, if your product doesn’t sell you

Detroit sees uptick in construction permit OKs with new system Need to know

By Kurt Nagl knagl@crain.com

The city of Detroit’s new digital permit approval system is clearing out shelves of paper plans and relieving contractors and staff from the time-consuming ways of old. Since rolling outs its ePlans system late last year, the Buildings Safety Engineering and Environmental Department is receiving more than 95 percent of permit approvals electronically, according to Dave Bell, department director. He says the new process takes no more than half the time as the old way. Contractors’ quick adoption of the new system speaks to why the city overhauled its old network, which was outdated and inefficient. Steve Pariseau, principal architect at Royal Oak-based Shelter Design Studio LLC, said the old way was a “nightmare” compared to the process now. “I used to have to go in and walk documents through every step of the process,” he said. “It was simply a very

JJCity has approved over 20 percent more permits under new system JJOver 95 percent of plans are being submitted digitally JJNew system cuts application processing time in half, city says

CITY OF DETROIT

The city of Detroit’s buildings and planning department is receiving over 95 percent of construction permit applications digitally after implementing its new ePlans system late last year.

cumbersome process, but necessary so you could track what changes were being made.” The department approved in the

last nine months about 630 applications under the new system — over 20 percent more than the old system during the same point in time last

year, Bell said in an email. The department receives on average 200-300 permit requests per week. Pariseau, whose design firm has been operating since 2007 with most of its projects in Detroit, said he has used ePlans a half-dozen times and can already feel its positive effects on business. To get approval for medium-sized projects in the past, it would take three to four days, he said. It takes only about a day and a half now, and it can all be done from the office. “It’s been great, quite honestly. A lot less paper and a lot easier to track,” he said, adding that he thinks the new system is even more thorough than

the previous process. “Certainly, it has had a direct impact on business in that I’m not spending a lot of time administratively on the permit process.” With development downtown and in adjacent areas booming, the new system has “changed the game,” Bell said. It eliminates parking and gas costs and, perhaps most appreciated, it allows contractors to submit corrections virtually instead of going to the department to pull papers and submit revised plans. “Even those customers that originally were against change are now on board,” Bell said. EPlans is powered by new software from Accela Inc. put into use this spring to replace the old Tidemark program. The city paid a one-time fee of $262,750 to implement ePlans and will pay $147,000 in annual operating costs. Officials say there are no plans to consolidate employees as a result of the more efficient system.

N O M I N AT I O N S A R E O P E N F O R

Tell us what lawyers and firms meet the mark. This awards program honors stand-out achievements – the verdicts and litigations that made the most impact in the last year or so – as well overall excellence in the practice. Winners will be announced in the Sept. 24 issue. If you have a strong case for a candidate’s inclusion, nominate today. Participation is free and entries will be accepted until Monday, July 16.

C AT E G O R I E S : ·

Law Firm of the Year

Attorney of the Year

Non-Partner Associate of the Year

M&A Deal of the Year

Real Estate Deal of the Year

Verdict or Settlement of the Year

Business Litigation of the Year

State your case at crainsdetroit.com/nominate.

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

SPOTLIGHT Science center CEO steps down

The Cadillac House is hosting a week of grand opening events after a $3.5 million renovation by Detroit-based developer the Roxbury Group.

ROXBURY GROUP

Cadillac House reopens with a plan for growing Thumb tourism pipeline

By Annalise Frank afrank@crain.com

The Cadillac House, a 158-yearold inn and tavern, is reopening with fanfare in the center of Lexington. The new hotel used a gala, boat ride from Detroit and ribbon-cutting last week to advertise the grand opening after Detroit-based real estate developer the Roxbury Group’s $3.5 million restoration. Stacy Fox, a principal of the Roxbury Group, bought the Cadillac

House building in the summer of 2016. She also owns a home in Lexington. Now she wants downtown Lexington’s only major hotel to help bolster year-round tourism to the small Lake Huron coastal community, as well as gather locals. The town is about an 80-mile drive from Detroit proper. “It’s very accessible from Southeast Michigan,” Fox said. “We hope to add to (Lexington’s) popularity

ADVERTISING SECTION

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

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

Need to know

JJGrand re-opening this week after $3.5

million renovation

JJHosted a gala, boat ride from Detroit and public lighting ceremony JJ12-room hotel starts taking reservations, to open later in July

and cachet and represent, truly, a destination point for those who want to have a weekend getaway, and just increase the appeal of the area ... I think the (Lake Huron coast) is entering a new phase of development and popularity, and we certainly plan to build on that.” A healthy roster of events, the Lexington Village Theatre and the town’s proximity to metro Detroit mean Lexington has the potential to increase its tourism traffic year-round, she said. The Cadillac House team aims to coordinate with Lexington and the theater to increase the town’s offerings. It also plans to make an effort to market in metro Detroit.

“We bring large crowds of people to town for (theater) shows, but they don’t have a place to stay, oftentimes,” said Mike Kettlewell, co-owner of the Lexington Village Theatre. “We’ve talked about working together to bring people to town for both entertainment and a nice getaway overnight and sort of joining up on that. ... The winter is where this town can sometimes struggle, and our hope is to bring more people up here in the winter.” A village of Lexington official didn’t return a request for comment. The hotel has 12 rooms and opens July 23. Prices range, depending on the season, from $130 to around $200. The restaurant, serving classic comfort foods, opened June 11. The original inn operated 30 rooms and closed in the 1960s. The first-floor restaurant continued until May 2016, after an unpopular 1970s renovation that left the building half tan and relatively windowless.

The Michigan Science Center is launching a national search for a new president and CEO. Tonya Matthews has stepped down to pursue other opportunities in the science, technology, engineering and math Matthews realm, the center said last week. COO John Anderson will serve as interim CEO while the board of directors conducts the search. Matthews, 44, began leading the science center in 2013, the year after it reopened as a new nonprofit entity, after the Detroit Science Center’s financial issues and subsequent closure. She led the 2016 launch of the STEMinista Project to engage girls in STEM and the renovation and opening last year of the science center's immersive Toyota Engineering 4D Theater. Under Matthews’ direction, the center provided programs to more than 1.4 million people.

Incoming Cranbrook Art leader decided not to take job

John Berry, who was set to join Cranbrook Academy of Art and Art Museum as acting director, will not be taking the job. After accepting the interim position in May, Berry was expected to join Cranbrook June 18. But he Berry tendered his resignation instead, citing a personal family concern, Director of Communications Julie Fracker said. The Cranbrook Academy of Art and Art Museum is now working to appoint an interim director and plans to launch a national search for a permanent director this fall, she said.

PEOPLE FINANCE J James Clark to partner, Blumark Financial Advisors LLC, Troy, from senior adviser. J Becky Kenyon to vice president of field claims, Amerisure Insurance, Farmington Hills, from chief claims officer, Continental Western Group, a W.R. Berkley Corp. company, Urbandale, Iowa.

HEALTH CARE J David Donigian, M.D., to chief medical officer, Molina Healthcare of Michigan, Troy, from medical director.

ROXBURY GROUP

The exterior of the Cadillac House Inn and Tavern in Lexington was altered in a 1970s modernization effort, but restoration by Detroit-based Roxbury Group returned it to its original look.

To submit news of your new hires or promotions to People, go to crainsdetroit.com/peoplesubmit and fill out the online form.

July 9, 2018

ETROIT USINESS C R A I N â&#x20AC;&#x2122; S D E T RCORAIN I Tâ&#x20AC;&#x2122;SBDU S I NBE S S // J U LY 9 , 2 0 1 8

ZONES

Page17 17

Southeast Michigan Opportunity Zone designations

FROM PAGE 1

â&#x20AC;&#x153;We are starting to get a great deal of interest in this on an exploratory basis from a wide variety of people, from potential developers on how they can utilize this as a potential opportunity for equity investments and also people looking at it from the other perspective of opportunities to defer and reduce taxes,â&#x20AC;? Kopietz said. The upside for Opportunity Fund investors is a deferred and reduced capital gains tax. The win for the urban areas is the added capital flowing through private enterprise within their borders. â&#x20AC;&#x153;I think people are thinking of this as another tax program thatâ&#x20AC;&#x2122;s maybe going to do some stuff,â&#x20AC;? said Matthew Temkin, managing member of Detroit-based North Coast Partners LLC, which is raising $100 million to $200 million for an Opportunity Fund it plans to invest in a $500 million pipeline of largely multifamily and commercial development projects in Detroit neighborhoods. Temkin is a Farmington native who now lives in New York City. â&#x20AC;&#x153;I think itâ&#x20AC;&#x2122;s an entirely new asset class thatâ&#x20AC;&#x2122;s going to redistribute capital across the country. We need to underline how big this could be,â&#x20AC;? Temkin said. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s the thing that people really arenâ&#x20AC;&#x2122;t quite getting. This is the beginning of something that could be really, really big.â&#x20AC;?

Opportunity by location Opportunity Zones are designated according to U.S. census tracts where the poverty rate is at least 20 percent and the median household income is less than 80 percent of that in the surrounding areas, per 2011-15 Census Bureau American Community Survey data. Then each stateâ&#x20AC;&#x2122;s governor nominates the zones for approval by Treasury as a qualified zone within 30 days of their submission, which Michigan and 17 other states received on April 9. There are now some 8,700 such zones throughout the country in all 50 states. An Opportunity Fund then invests in an Opportunity Zone. Out of 1,152 eligible census tracts in Michigan, Gov. Rick Snyderâ&#x20AC;&#x2122;s administration chose 288 zones based on a variety of factors, including ability to attract investments and where there have been sudden employment losses. Opportunity funds can be established by a wide swath of groups or organizations, such as banks, development groups, community development finance institutions, regional economic development groups and investor consortiums, according to the Economic Innovation Group, which spearheaded the initiative that started gaining traction in Congress in 2016.

Tax-lowering opportunity Under the law, capital gains must be invested in the funds within 180 days after the gain is realized. Generally, patience is rewarded with lower taxes. If the gains stay within the fund for five to seven years, the investor has to pay federal capital gains taxes on 90 percent of the original income. If the funds stay more than seven years, the investor pays only 85 percent. Thereâ&#x20AC;&#x2122;s an extra carrot for investors if they leave the money in the fund 10 years or longer: They donâ&#x20AC;&#x2122;t have to

Legend Opportunity Zones

pay any capital-gains tax on the appreciation of the Opportunity Fund, in addition to getting the 85 percent rate on the original investment. If they pull that money out before then, they pay normal capital gains tax on the fundâ&#x20AC;&#x2122;s appreciation. To put it more concretely: According to Florida-based law firm Holland & Knight LLP, a $1 million profit from an Aug. 1 stock sale would hit

â&#x20AC;&#x153;I think people are thinking of this as another tax program thatâ&#x20AC;&#x2122;s maybe going to do some stuff. I think itâ&#x20AC;&#x2122;s an entirely new asset class thatâ&#x20AC;&#x2122;s going to redistribute capital across the country. We need to underline how big this could be. Thatâ&#x20AC;&#x2122;s the thing that people really arenâ&#x20AC;&#x2122;t quite getting.â&#x20AC;? â&#x20AC;&#x201D; Matthew Temkin, managing member of North Coast Partners LLC

an investor with a $238,000 tax bill this year. Yet if the investor put the $1 million capital gain into an Opportunity Fund, which then invests in an Opportunity Zone building instead, and that money remains there until the end of 2026, the investor only pays taxes on $850,000, or 85 percent of $1 million. That means a tax liability of just $202,300 in 2026 on that gain. If it is withdrawn in the five- to seven- year window, the tax bill (23.8 percent) on the $900,000 (90 percent) is $214,200. However if that investment is held until 2028, for example, and the building sells for $3 million in 2028, the entire $2 million of gain on the Opportunity Zone investment would be tax-free, and the investor would only be required to recognize $850,000, or 85 percent of original $1 million, of gain on Dec. 31, 2026. â&#x20AC;&#x153;One-hundred percent of the new gain is tax free for new investments held for at least 10 years,â&#x20AC;? said Richard Barr, partner and chair of the Economic Development Incentives Practice Group in the Detroit-based law firm of Honigman Miller Schwartz and Cohn LLP. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s the larger potential benefit that some people are looking at right now that wasnâ&#x20AC;&#x2122;t obvious to some people in the beginning.â&#x20AC;? How it will work still depends on specific regulations expected from the Internal Revenue Service this summer.

He also notes that itâ&#x20AC;&#x2122;s not likely a single investor can make an Opportunity Zone project succeed, and many contributors may be needed, â&#x20AC;&#x153;which creates issues of governance and possible headaches among investors.â&#x20AC;? In addition, some Detroit community groups have been critical of how the state chose the Opportunity Zones, because some of the cityâ&#x20AC;&#x2122;s most sought-after neighborhoods fall within the borders of such a zone. â&#x20AC;&#x153;What data are you using if you think Indian Village or downtown is impoverished?â&#x20AC;? LaToya Morgan, director of Community Development Advocates of Detroit, a nonprofit that works to stabilize neighborhoods in the city, asked Bridge Magazine in March. Morgan was referring to the east-side enclave and central business district, where the former has long been a prized address and the

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26.5% influence the purchase of office/industrial and commercial space. Help them find you by advertising in Crainâ&#x20AC;&#x2122;s Real Estate section. 313.446.6086 â&#x20AC;˘ FAX: 313.446. 034 7 E-Mail: cdbclassified@crain.com

Headaches and questions Not all investment gurus are sold on Opportunity Zones, however. â&#x20AC;&#x153;Investors should be wary of the risk profile of Opportunity Zone deals, which could be much higher in certain targeted census tracts than the stock market,â&#x20AC;? Darryl Jacobs, member in the Chicago-based law firm Ginsberg Jacobs LLC, wrote for National Real Estate Investor. â&#x20AC;&#x153;The key will be staying diversified while still taking advantage of the capital gains tax relief available through the program.â&#x20AC;?

latter has attracted billions in investment in the last several years. â&#x20AC;&#x153;It seems like youâ&#x20AC;&#x2122;re focusing on areas that arenâ&#x20AC;&#x2122;t impoverished at all, and doing so could be pushing people outâ&#x20AC;? of areas getting the designations, she said. Regardless, said Clark Hillâ&#x20AC;&#x2122;s Kopietz, Opportunity Zones are attracting considerable attention nationwide. They could also push some redevelopment and development efforts from the category of theoretical into the category of the real. â&#x20AC;&#x153;I think we will see a lot of the projects that were on the bubble get done with some sort of Opportunity Zone investments,â&#x20AC;? said Kopietz, a Crainâ&#x20AC;&#x2122;s 40 Under 40 honoree in 2012 and a member of its 50 Names to Know in Real Estate class in 2016.

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C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

BRIDGE FROM PAGE 1

The Morouns’ Detroit International Bridge Co. has been airing Fox News television ads in just the Washington, D.C., market, seemingly aimed at an audience of one — the celebrity-billionaire-turned-president. The commercials ask him to withdraw the U.S. permit needed to build the Gordie Howe bridge. They’re also lobbying for Trump to get Canada to drop its stipulation that the Morouns tear down the Ambassador Bridge if they build a replacement span. That matter could be injected into renegotiation of the North American Free Trade Agreement. “Trump could very well ... hold up (bridge construction) for a year or two as a bargaining chip,” said Peter Woolstencroft, professor emeritus of political science at the University of Waterloo and an expert on U.S.-Canadian relations. “Quite frankly, why would (Trump) be interested in making the border more fluid?” It’s a looming question that Gordie Howe bridge proponents tried to downplay last week in announcing the public-private partnership with Bridging North America following years of planning and political and court battles with trucking magnate Manuel “Matty” Moroun and his son, Matthew, who now runs the family’s Warren-based transportation, logistics and real estate companies. “This is yet another commitment of the government of Canada — in spite of other challenges we have on the tariff and trade issue right now — to recognize the importance of the relationship between our two great countries,” said Dwight Duncan, chairman of the Windsor-Detroit Bridge Authority’s board of directors. Duncan acknowledged “there could be challenges moving forward,” but he doesn’t foresee them as stopping the six-lane, cable-stayed Gordie Howe from being built. “But we won’t be slowed down by (the Morouns) or anyone else,” said Duncan, who later added: “This train is leaving the station.” But the unpredictable nature of Trump’s presidency combined with his brewing trade war with China and a longtime ally like Canada could put the Detroit River bridge battle in the middle of renegotiations of the NAFTA pact, Woolstencroft said. “Why wouldn’t he do that?” Woolstencroft asked. “He’s got nothing to lose by doing that.” Proponents of the bridge see Trump’s tariffs as a short-term negotiating tactic that doesn’t change the need for greater efficiency and re-

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

Dwight Duncan, the CEO of the Windsor-Detroit Bridge Authority, speaks at a press conference Thursday announcing the contracting team for the Gordie Howe International Bridge.

“This is yet another commitment of the government of Canada — in spite of other challenges we have on the tariff and trade issue right now — to recognize the importance of the relationship between our two great countries.” — Dwight Duncan, chairman of the Windsor-Detroit Bridge Authority’s board of directors

dundancy for commercial truck traffic at the border that feeds the supply chain of Michigan and Ontario’s auto industries. “When you’re building a bridge that’s supposed to be there for 50 years or more, you can’t stop every time there’s a little bump in the road,” said Bill Anderson, director of the Cross-Border Institute at the University of Windsor. “The current volatility in terms of the current relationship between the U.S. and Canada isn’t going to be something that’s taken into account in deciding to forge ahead.” Sandy Baruah, president and CEO

of the Detroit Regional Chamber, a longtime supporter of the new bridge, sees no strategic reason why Trump would scuttle the Gordie Howe bridge, because Canada and private companies are paying for it. “The deal that’s on the table right now is very much a Donald Trumptype deal,” Baruah said. “It is a one-sided deal.”

New bridge ‘really helps Canada’ For Canada, construction of a second Detroit River bridge to speed the cross-border flow of auto parts, assembled vehicles, agricultural products and other goods is seen as vitally important to the economy. Automobiles and auto parts accounted for 28 percent of Canada’s exports in 2015 and one-fifth of its NAFTA-related trade with the U.S. and Mexico, according to the Canadian Vehicle Manufacturers’ Association, which represents General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles. The Canadian auto industry depends on exports. Canadian purchases of vehicles assembled in Canada equate to just 12 percent of the country’s production. In 2016, 95 percent of Canadian-assembled vehicles valued at $64.6 billion were exported into the

U.S., according to the Detroit 3’s Canadian trade group. Canada’s population is only about a tenth of the United States’ population. That economic reality for Canada, particularly southern Ontario, has caused leaders of both dominant political parties to support the bridge, starting with former Prime Minister Stephen Harper inking a 2012 crossing agreement with Michigan Gov. Rick Snyder and continuing under the current administration of Canadian Prime Minister Justin Trudeau. “That’s a polite way for Canada to say, ‘We’re desperate, we need it,’” Woolstencroft said. “Frankly, (the Gordie Howe bridge) really helps Canada. If you had to put a metric on it, maybe 80-20 in Canada’s favor. That’s why we’re paying for it.” The Canadian government has spent at least $350 million to date on preparing both sides of the river for a new bridge — buying and clearing land, adding 1 million tons of fill dirt to the Canadian side, moving utility lines, building drainage systems and access roads and obtaining necessary permits for what's expected to be a multiyear construction project. Canada and Ontario also spent $1.4 billion constructing the Herb Gray Parkway, a new highway that will connect Ontario’s Highway 401 to the Gordie Howe bridge crossing, which will then feed passenger and

truck traffic into Interstate 75 on the Michigan side of the river. “It demonstrates how much value the government of Canada … puts on maintaining this economic integration relationship with the United States,” Anderson said of Canada’s investment. “I would be absolutely shocked if anyone in Ottawa came out and said, ‘Well, we’re just going to sit back and watch what happens with NAFTA.’” The Michigan Department of Transportation has acquired about 90 percent of the 634 parcels of land in Detroit’s Delray neighborhood needed to land the bridge and build a 167-acre port of entry and customs plaza, said Heather Grondin, vice president of communications and stakeholder relations for the WDBA. But MDOT remains locked in an eminent domain battle with Moroun-owned entities that control key parcels in the Delray neighborhood. That includes up to one-third of a 42acre Central Transport trucking terminal on Jefferson Avenue. Central Transport is the Moroun family’s main trucking company. The Bridging North American team of companies, led by Toronto-based ACS Infrastructure Canada Inc. and Calgary-based Fluor Canada Ltd., are expected to sign a contract with the WDBA by the end of September, when terms of the agreement and the construction time line will be disclosed, officials said. Meanwhile, the Moroun-owned companies are in Wayne County Circuit Court trying to argue against the necessity of MDOT taking their land. And the Morouns are still trying to engage the Trump White House on Canada’s requirement that they tear down the 88-year-old Ambassador Bridge, which they planned to keep standing for emergency use and special events. “If Canada and the U.S. want to work together and figure out what to do with our current Ambassador Bridge, we’ll live with what the two countries come up with,” said Dan Stamper, president of the Detroit International Bridge Co. Canadian officials have not been deterred by the latest volleys from the Moroun camp, which has attempted to influence public opinion on the bridge for years through television advertising on both sides of the border. “I remember (the Morouns) running ads when we did the Herb Gray Parkway that said it was the ‘road to nowhere,’” Duncan said. “Well, that road is going to this bridge, which is being built.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

Better Made bags more markets outside of Michigan By Kurt Nagl knagl@crain.com

Better Made Snack Foods Inc. is breaking into more markets outside its longtime Detroit stronghold. The snack producer and local favorite is now distributing in 14 states outside of Michigan, from Florida to Nevada, according to a company news release. It also has distributors in Japan and Qatar. In 2015, Better Made was keen on keeping with its original business recipe of hyperlocal-only, and it distributed only in Michigan. One of the reasons for expanding the snack’s reach is that when Michigan residents leave the state, they of-

ten take their bags of Better Made along with them. Ramped-up requests from smaller distributors across the country are helping the company build its brand outside of its home state. “The growth is due in part to our loyal customers living out of state and the desire for niche brands across the country,” company CEO Sam Cipriano said in a written statement. Questions were left with the company regarding its most recent distribution deals. The company has plans to snag another handful of states for distribution later this year. Its product line

includes flavored potato chips, popcorn, pretzels, tortilla chips, pork rinds and beef jerky. Better Made also has its products at Little Caesars Arena, Jimmy John’s Field in Utica and Van Andel Arena in Grand Rapids. Founded in 1930, the company’s 2016 revenue was $70 million. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl Better Made Snack Foods Inc. is distributing to 14 states besides Michigan, in part due of demand from loyal customers now living out of state. CONTRIBUTED PHOTO

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C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

Michigan Democratic gubernatorial candidates from left, Shri Thanedar, Gretchen Whitmer and Abdul El-Sayed are seen during their first debate June 20 in Grand Rapids.

GOVERNOR FROM PAGE 1

“I haven’t had a fundraiser thrown for me by Blue Cross Blue Shield — and I will not,” said El-Sayed, a former Detroit health department director. “Because to speak the truth, you cannot be taking money from the same corporations that bought and sold our politics for far too long.” In an interview with Crain’s, Whitmer said establishing a Medicarefor-all health insurance system in Michigan is “not realistic.” “I don’t oppose that, but it’s not a real option right now,” Whitmer said of single-payer health care. “... The projections tell us it’s not realistic in Michigan at this moment.” On the campaign trail, El-Sayed has staked his bid for the Democratic nomination on tapping into a pool of liberal voters who may be distrustful of corporations, particularly big ones like Blue Cross Blue Shield of Michigan, which, with 4.6 million members, controls 70 percent of the state’s private insurance market and has managed care plans in both the Medicare and Medicaid systems. “My opponent is hand-over-fist taking money from folks like Blue Cross Blue Shield,” El-Sayed said last month in an interview for the Crain’s “Detroit Rising” podcast. “I don’t take their money — so they don’t have power over me.” El-Sayed’s most fervent supporters have latched onto his rhetoric about Blue Cross. “I think the only unrealistic part of it for Gretchen Whitmer is she needs Blue Cross Blue Shield dollars,” said Tanya Sharon, a retired Detroit schoolteacher from West Bloomfield Township who is supporting El-Sayed. It’s unclear, though, how much money Whitmer’s campaign and her allies have received to date from Blue Cross employees and its PAC, which doled out more than $200,000 to both Democratic and Republican politicians in the first four months of the year. Build a Better Michigan, a nonprofit political group supporting Whitmer organized under section

“If you look at the trillions of dollars we spend on health care, 20 percent of that money is really taken up by the insurance companies. Under the single-payer system, it would actually be cheaper to cover people because ... we’ll be able to negotiate better pricing (for prescription drugs).” — Shri Thanedar

527 of the federal tax code, doesn’t have to disclose the donors for its $1.8 million in TV ads aiding Whitmer’s campaign until July 15. And gubernatorial candidates don’t have to legally report more than six months of 2018 campaign donations until July 27, 11 days before the primary. “It’s one of the flaws of the reporting deadlines that makes it more difficult to track the money,” said Craig Mauger, executive director of the Michigan Campaign Finance Network, a government watchdog group.

After Obamacare El-Sayed has waged his campaign for single-payer insurance after most establishment Democrats have moved on from the 2009 and 2010 battles over creation of the Affordable Care Act. In the midst of that acrimonious national debate over health care, then-President Barack Obama abandoned a public option insurance program and cut deals with the insurance industry to create marketplace exchanges where Americans could buy subsidized private insurance plans. Republicans have spent years trying to dismantle the Obamacare sys-

“I’m grateful to have the support of Emily’s List. I’m grateful to have the support of the carpenters’ (union). There are a lot of diverse groups — the Sierra Club came on board just in the last couple of days.” — Gretchen Whitmer

tem, while visions of a Canadian-style universal health insurance remain popular on the political left. At times, El-Sayed has tried to prod Whitmer about her public silence on single-payer insurance and apparent support from Blue Cross. “We’re unwilling to say things like ‘single payer’ ... because we know too many Democrats have been bought,” El-Sayed said at a July 2 candidates’ forum in Detroit. But so far, the 46-year-old East Lansing Democrat has not engaged the upstart 33-year-old opponent from Shelby Township. When asked about her support from Blue Cross executives, Whitmer pivots to talking about endorsements she’s received from progressive and Democratic groups instead. “I’m grateful to have the support of Emily’s List. I’m grateful to have the support of the carpenters’ (union),” Whitmer said. “There are a lot of diverse groups — the Sierra Club came on board just in the last couple of days.” Officials at Blue Cross Blue Shield’s employee PAC declined to comment. But a spokeswoman for the insurer questioned the need to “dismantle” the insurance market in favor of a government-run system. “More people are insured, more small businesses are offering coverage, and premiums in the small group and individual markets are moderating. Medicaid enrollment is up,” Blue Cross spokeswoman Helen Stojic said in a statement. “There is robust competition here. The private

“I haven’t had a fundraiser thrown for me by Blue Cross Blue Shield — and I will not. Because to speak the truth, you cannot be taking money from the same corporations that bought and sold our politics for far too long.” — Abdul El-Sayed, M.D.

health insurance market is healthy in Michigan, and we see no reason to dismantle it.” Whitmer has avoided being pinned down on single-payer health care by emphasizing her role to drum up Democratic votes as the Michigan Senate’s minority leader to expand the Medicaid health insurance program for the poor to more than 650,000 low-income adults. “I fought to expand Medicaid, I crossed the aisle to get it done,” Whitmer told Crain’s. “I’ve got a real record of getting people health care. I’m not just taking positions.”

Big question: how to pay El-Sayed has stepped up his vocal criticism of Blue Cross and its perceived favoritism toward Whitmer’s candidacy as polls show he remains in third place in the race, behind Ann Arbor busnessman Shri Thanedar, who also has embraced single-payer care as part of his platform. “If you look at the trillions of dollars we spend on health care, 20 percent of that money is really taken up by the insurance companies,” Thanedar said at the June 20 debate. “Under the single-payer system, it would actually be cheaper to cover people because ... we’ll be able to negotiate better pricing (for prescription drugs).” Unlike El-Sayed, though, Thanedar has not released a detailed plan for putting such a system into place.

MICHAEL BUCK/WOOD-TV8 VIA AP, POOL

El-Sayed has called for paying for universal health insurance through a 2 percent gross receipts tax for businesses with fewer than 50 employees and a 2.25 percent gross receipts tax for businesses with more than 50 workers on their payroll. The first $2 million in gross receipts would be exempted from the tax, ElSayed said, relieving small-business owners of paying directly for their employees’ health care coverage. El-Sayed’s plan also is financed through a graduated income tax for individuals, tacking on increases of the 4.25 percent income tax ranging from 0.75 percent for the lowest-paid workers to 3.75 percent for the wealthiest Michiganians. “Is it going to be a big lift? Yeah,” El-Sayed told Crain’s. “But is it the right thing to do? There’s no doubt.” Detroiter Greg Humphries, 54, said he’s skeptical of El-Sayed and Thanedar’s promises to deliver universal health care. “If they’d explain it more in-depth and how we’re going to pay for it, I’d be interested,” said Humphries, a local political consultant who said he’s undecided in the governor’s race. “It’s easy to say what you’re going to do. But don’t give me empty promises because I know it’s all about the money — and the votes.” At the July 2 candidates’ forum at Detroit’s Northwest Activities Center, El-Sayed attempted to frame single-payer as the defining issue of the race for the Democratic nomination — and Blue Cross as the impediment to making it a reality. “Right now, we are watching as people have been bought off by the insurance company that wants to maintain the status quo. It is not OK,” El-Sayed said. “We have to be willing to stand up and say, ‘We’re going to cut out the insurance company middle man (and) we’re going to fight for single-payer health care.” Whitmer, El-Sayed and Thanedar will face off in a final televised debate July 19 in Detroit at the downtown studio of WDIV (Channel 4). Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

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Some of the coloring used to create the glossy, vivid bonbons at Guilt Chocolates in Redford Township. The business is buoyed by sister enterprise Hardcore Meals until it launches a consumer-facing operation later this year.

HARDCORE FROM PAGE 3

“We focused on the division teams because they’re here three times a year, so it makes the most business sense for us,” Nader said. For now, the baseball meal prep is about a quarter of Hardcore Meals’ business, he added. Pre-game meals are started in their Redford Township kitchen and completed at the stadium. Post-game meals are trucked downtown inside special coolers. Last Thursday, Nader, Breazeale and one of their assistants were preparing food for the Texas Rangers, who were beginning a four-game series with the Tigers. On a stove was a large pan of thinly sliced, grilled and marinated beef for use in the aforementioned chipotle beef tacos — a reflection of the desire for Central and South America food from the many Latino ballplayers. Visiting teams usually have their dietitians arrange meals, and food is enough for about 45 people per game. That includes players, managers and coaches and traveling staff. The standard menu for visiting teams is two proteins, two starches and two vegetables, Nader said. Since there is a small cadre of professional sports team dietitians, Hardcore Meals has been getting business through word-of-mouth referrals.

Ultra-elegant plans Nader, 47, and Breazeale, 48, initially planned a slow roll-out for Guilt Chocolates that eventually would include a brick-and-mortar retail chocolate shop. They’ve since changed their strategy. Instead, they opted to focus on online retail commerce along with popup events and wholesale deals with restaurants, caterers and florists. The chocolatiers have a wholesale distribution deal with Canton Township-based Chef’s Source. For now, the partners are moving 1,000 to 2,000 bonbons a month. Retail, they average about $3 each, but wholesale costs are cheaper. A retail

website and marketing plan will launch this fall to get Guilt Chocolates’ glossy, colorful bonbons in front of consumers. “We want to take our time with this and do everything right,” Nader said. They’ve designed and ordered specialty packaging for their bonbons, which they eventually will offer in boxes of six, nine, 12 or 24 chocolates. They come in flavors such as passion fruit/tarragon ... Sumatran coffee/Madagascar vanilla ... burnt orange/muscovado... rye whiskey/ pecan ... black currant tea. “We have a vision of this to be ultra-elegant chocolate,” Breazeale said.

Meeting meal needs The Hardcore Meals aren’t exactly elegant, but they’re designed to suit the needs of those looking to lose weight, gain muscle or otherwise boost their athletic performance and health. And the business model is deceptively simple: Nader and Breazeale gin up a new online menu each week, create the meals and drive them to the gyms. The CrossFit customers pick up their prepared meals at the gyms. The food is stored in Hardcore Meals-branded coolers and packed in logo bags. Clients order their meals online and return the food containers and bags each week. The meals are not a subscription plan, so clients don’t feel tied down, Nader said. Customers choose from three performance nutrition meal plans — paleo, performance and vegan — and pick them up on Mondays or Thursdays. The menu is updated on Tuesdays for the following week, and the food is locally sourced. They emphasize fresh, seasonal products. Each meal averages $10 to $13.50, Nader said, and customers order six to 10 meals at a time. At a minimum of six $10 meals multiplied by 300, that’s $18,000 a week in revenue. That’s pushing $1 million a year. Nader said Hardcore Meals has been getting calls from gyms in Lansing, and plans are to add clients along that route to make it an economically efficient drive. They expect

to add a driver as they add gyms along the way. The business plan also calls for more full-time kitchen staff as Hardcore Meals and Guilt Chocolates each grow. One client is Corey McEldowney, head coach and manager of CrossFit in the D. When the gym at the corner of Griswold Street and Michigan Avenue had one of the Hardcore Meals coolers for clients, five people signed up for food delivery in the first week, he said. “They’re super reliable and good with working with you,” McEldowney said, noting that clients can request foods to fit within their diet and allergy needs. He buys the muscle and performance menu meals. “We don’t always have time to precook meals or cook a dinner. It fits for whatever lifestyle you’re trying to do,” he said. “I don’t plan on stopping buying from them any time soon.” He cited a tuna salad and a bacon turkey burger recently that were “absolutely delicious.” In addition to CrossFit clients and baseball teams, Hardcore Meals also provides its pre-made meals for college athletes and for individual professional hockey and football players as part of their off-season routines, Nader said. Expansion plans include targeting the growing market of performance academies that specialize in athlete training. Hardcore Meals particularly wants to target those focused on youth sports. “If you want to give your kid an advantage, have them eat correctly,” Nader said.

Space suits expansion plans Hardcore Meals takes up most of the front of the Redford Township building. The back, a separate allwhite, lab-like kitchen that’s kept at 66 degrees, is where they use stateof-the-art machinery to create hand-designed, ornate, French chocolate-covered bonbons. Last year, they found the 3,000-square-foot building, a former party store that had been gutted to the floor and studs, and then they designed the kitchens themselves and

turned a former bowling alley lane into a long table that can be used for in-house, pop-up style dinners. A big-screen TV is mounted along one wall in the kitchen, so the chefs can watch the World Cup and other soccer matches. They also can use it during private events and for business. “This is a dream come true for Scott and I to do our own business, so we want it to be comfortable,” Nader said. Another revenue source is leasing kitchen time to food trucks for mealprep space. Right now, Plymouth-based Impasto Food Truck, which offers Italian-inspired wraps, is using the kitchen. Nader and Breazeale also do traditional event catering for weddings and events. It’s different now from what they did at Ford Field, and they’re their own bosses. At Ford Field, they worked for Chicago-based Levy Restaurants, which has the stadium concession contract with the Lions. In addition to games, they also handled the food at the Lions’ training facility and for stadium events. They’re still as busy. “We’re working as much if not more, but we’re driving it ourselves. It’s all of our own challenges. We’re pursuing things in the manner we want to do them,” Nader said. Nader was hired as executive chef for the Lions and Ford Field in 2005 after working as top chef for multiple restaurants, a country club in California and the W Hotel in San Diego. He began his food career as a dishwasher and busboy at Pizza Hut. Breazeale earned notice by becoming a finalist on the Food Network’s “Halloween Baking Championship” in 2015. Before going to work at Ford Field five years ago, he was executive chef at John D Bistro in Ferndale, and he worked as sous and pastry chef at the Novi Chop House. A third partner in Guilt Chocolates is Jennifer Gratz, the senior sales manager at Detroit’s Westin Book Cadillac Hotel, Nader said. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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BELLE FROM PAGE 3

Former General Motors Co. executive Nancy Philippart and Carolyn Cassin, president and CEO of Michigan Women Forward, a nonprofit that invests in low- to moderate-income female entrepreneurs without access to traditional capital, are the founders and general partners of the fund that is focusing its investments in areas in which its general partners have expertise, including technology, health care, manufacturing/supply chain, automotive and mobility. “We’re investing in women-owned businesses, and we’re bringing more women into this investment opportunity and proving that it matters,” Cassin said. In 2017, U.S. startups led by women secured just $1.9 billion, or 2.2 percent, of the $85 billion in total venture capital funding, according to Pitchbook, a Seattle-based financial data and software company. On the investor side, last year just 11.3 percent of partners at VC firms in the U.S. were women, Pitchbook said. “There’s a cultural bias in investing. It is longstanding and rampant,” Cassin said.

Breaking boundaries through investment Belle Michigan Impact Fund, which has secured a third-party designation as an impact investment fund from the Global Impact Investing Network, will make $100,000 to $250,000 investments, Philippart said. Impact investment funds provide a return for investors while also enabling them to do a social good. The investments bring new pools of money to bear on social issues that nonprofits, philanthropy and governments traditionally have supported. Michigan foundations, as well as individuals, are beginning to make impact investments. The new fund builds on the $2.5 million Belle Michigan Fund LP Cassin and Philippart launched five

New fund boasts talented team General partners and co-founders: JJCarolyn Cassin, president and CEO,

Michigan Women Forward

JJNancy Philippart, general partner and

co-founder Belle Michigan Limited partners include:

JJLauren Bigelow, CEO, Growth Capital Network JJShelley Bird, managing director, Golden

Seeds

Patricia Poppe: CMS Energy, Consumers Energy

Kathleen McCann: United Road Services

Florine Mark: The WW Group Inc.

Marianne UdowPhillips: University of Michigan

JJApril Boise, senior vice president, chief legal officer and corporate secretary, Meritor Inc. JJMary Brevard, co-chairman and director, Chambers Island Capital Investors LLC JJSusan Diehl, co-founder and partner, Trinitas Advisors LLC JJKaren Ebben, founder, Global Marketing Impact LLC JJSue Ellen Eisenberg, attorney, Sue Ellen Eisenberg & Associates PC JJBlanca Fauble, director of development, HAVEN JJJoanne Faycurry, partner, Schiff Hardin LLP JJLinda Forte, former vice president, business affairs, and chief diversity officer, Comerica Inc. JJMindi Fynke, owner and CEO of EHIM JJTerri Kline, president and CEO, Health Alliance Plan JJBeth Konrad, multimedia journalism program director and professor, Loyola University JJMary Kramer, group publisher, Crain Communications Inc. JJRonia Kruse, president and CEO,

JJAnne Mervenne, president, Mervenne & Co. JJLeslie Murphy, president and CEO, Murphy Consulting Inc. JJCindy Niekamp, board member at Ball Corp. and Magna International; retired senior vice president at PPG Industries JJLisa Payne, chairman of the board, Soave Enterprises, and president of Soave Real Estate JJPatricia Poppe, president and CEO, CMS Energy Co. and Consumers Energy Co. JJAnne Regling, former executive vice president and COO, Children’s Hospital of Michigan JJAndra Rush, founder, chairman, CEO and president, Rush Group LLC

OpTech LLC

JJMona Sater, physician’s assistant

JJFlorine Mark, president and CEO, The

JJRenee Shreves, senior account manager, Oilfield Chemicals, Rubber, Antioxidants, SI Group

WW Group Inc.

JJAlicia Masse, managing director, Alderney Advisors LLC JJKathleen McCann, chairman and CEO,

United Road Services Inc.

JJMarianne Udow-Phillips, director, Center for Health Research & Transformation, University of Michigan

FUND FROM PAGE 3

About 50 accredited, high-networth local Jewish investors have made soft commitments to the fund, Kochan said. Undisclosed local foundations, corporations and banks have also made soft commitments. The new fund will make investments of $25,000$900,000 in companies with a social focus that Romy Kochan: are willing to loWill look at any cate in or within business in area. one mile of the h i s t o r i c , 143,000-square-foot Durfee Innovation Society center. Life Remodeled is developing the center in the former Durfee Elementary-Middle School at 2470 Collingwood St., between Linwood Street and Rosa Parks Boulevard (adjacent to Central High School), Kochan said. Durfee is the first of a series of national Envision centers planned to serve as hubs for neighborhood services, as announced last month by U.S. Secretary of Housing Ben Carson.

Life Remodeled is developing a center in the former Durfee Elementary-Middle School.

“Effective neighborhood revitalization requires a multi-faceted approach,” Life Remodeled CEO Chris Lambert said. “Gingras Global’s fund will play a critical role in creating substantial opportunities for entrepreneurs to thrive, while also generating significant advancements for the local economy.”

Investment plan Investments from the new impact investment fund will take the form of loans and/or equity positions in for-profit businesses formed to hire people with barriers to employment, to share their resources to help meet a social need or to have another social or environmental impact. The goal is to attract businesses that have been turned down by a bank but would provide healthy support to the community, Kochan said. The fund will provide those businesses with technical assistance.

“We want to make them bankable … to get them at least a three-year track record of profitability... so they can develop relationships with banks and get traditional financing,” said Kochan. Commercial businesses moving into the neighborhood could also be considered for investments since they also would increase the tax base and contribute to revitalization of the lowto moderate-income neighborhood, she said. A company like Toarmina’s Pizza, which brought a franchise into the Durfee Innovation Society center last fall to employ Central High School students, share profits and teach them to franchise, could also qualify for an investment, Kochan said. “They might need some capital to sustain the business in Durfee until it becomes more established.” “We’ll look at any business in this area because it’s so under-resourced,” she said.

years ago. That fund invests in women-owned or -led Michigan startups in technology-enabled services, life science/medical devices, advanced manufacturing, alternative energy and IT/data analytics sectors. Experienced male angel investors told the pair when they started the first fund there would never be enough deal flow for investments and never be enough women interested in early stage investing, Cassin said. “That was patently not true.” The first fund attracted 28 women investors and one man and almost unlimited deal flow, she said. The fund is fully invested and now working to divest its portfolio companies. Of the 14 companies in which it invested, one closed and a second made 1.875 times investors’ money when it sold. Cassin and Philippart, who are selling a third company now, said they expect to see a similar return. “Deals started coming to Belle that were not based in Michigan because we had something unique to offer,” Cassin said, adding the first fund was “extremely successful” in finding good deals and great women entrepreneurs, investing in them and making profits for investors. There also was strong interest in Cassin’s experience at a national health care company and in creating one as well as Philippart’s experience in supply chain work, automotive engineering and manufacturing. Ten companies came to the new fund for investment in the first round, Cassin said. “It’s a pretty exciting pipeline.” Since the first Belle Michigan fund launched five years ago, the number of women angel investors in the region has grown from less than 10 to 50 unique women angel investors, she said. But, Philippart said, there are few women venture capitalists investing in late-stage funding. “We also want to be able to selectively invest bigger amounts of money later on for these companies we grow and nurture,” she said. “They may hit a wall with a male-run, male-investors Gingras, which administers private impact funds around the country, already has done due diligence on three social enterprises that will represent its first investments if the investor board approves them, she said. They include: J Sister Code, a Detroit company Marlin Williams founded to teach women coding. J Montee Holland, who launched a line of men’s suits under the Tayion brand and plans to teach fashion design to neighborhood kids. J Think Detroit, a co-working incubation space founded by Jibran Ahmed. The website for the fund is expected to go live this week. Kochan said due diligence will include traditional financial cash-flow projections, analysis of social and economic impact, strength of operational model and the team. The fund will not lock portfolio companies into loans and will give them seven to 10 years to repay investments or refinance with a bank. “Then we’ll turn around and use the money to invest with someone else,” she said. While working on the fund, Gingras, which opened an office in the Durfee center, is also designing a mock investment committee to teach for high school and middle school students how investments and small business works.

firm not wanting to invest in them.”

Private funds help create jobs The first private impact fund in Michigan, ImpactT3, launched in 2014, attracting 48 accredited investors, said Romy Kochan, founder, president and managing partner of Auburn Hills-based Gingras Global Inc., which is administering the Belle Michigan Impact Fund and affiliated Gingras Global Groups L3C. Gingras is sponsoring a private impact fund to help bring business back to the Central High School neighborhood where the 1967 Detroit uprising began. It has invested in three Detroit companies: Artesian Farms; Rebel Nell L3C, which hires disadvantaged women to make jewelry from graffiti that has flaked off Detroit walls; and Detroit Sewn, a cut-and-sew manufacturer. Recently, the Makers Environment Fund launched to provide investment capital to skilled-trades organizations in Michigan that are training and employing people, Kochan said. It invested in Welding Concepts Training LLC and Pingree Detroit, a leather goods manufacturer that employs veterans. “The main investor attraction to these types of private equity and debt impact funds is job creation,” Kochan said. “The idea of recycling capital by investing, receiving repayment/returns and then redeploying the investment dollars is exciting to individual investors.” Local interest in impact funds is picking up. Year to date, Gingras, which administers impact funds around the country, has seen double the number of proposal requests for design and administration of new impact investment funds for about 30 requests so far, Kochan said. “It has been exciting to witness the ‘a-ha’ moment as individuals become aware that their locally invested dollars have the power to create jobs and a wave of impact for their communities.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

Big ask, big solution Kochan and business partner Natalie Hazen came up with the idea for the new fund when Lambert asked them for help. He wanted to engage the social enterprise firms they provided bookkeeping and accounting services to through their affiliated company Gingras Global Group Inc. Lambert had sought grants to get entrepreneurs to locate in Durfee and get on their feet. But, Kochan said, “he already had so much on his plate trying to get that building up to code.” So last year, they started talking with people about the potential for a fund to invest in business attraction efforts. “We came across a relatively large Jewish population still living in Southeast Michigan that graduated from Central High School,” Kochan said. Either over the phone or in-person at a local coffee shop meeting with a prospective investor, Kochan and Haven were introduced to potential investors who had grown up in or attended school in the neighborhood. “There was this overwhelming excitement that happened organically (as) more and more alumni learned about the potential for the fund,” Kochan said. Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 9 , 2 0 1 8

THE WEEK ON THE WEB

RUMBLINGS

Broder & Sachse to sell The Scott at Brush Park

State health chief gets top appellate attorney

JUNE 29-JULY 5 | For more, visit crainsdetroit.com

he Scott at Brush Park, one of the newest ground-up apartment developments in the greater downtown area, is being listed for sale less than two years after it opened. The 199-unit development cost Detroit-based Broder & Sachse Real Estate Inc. $65 million to build. It does not have a listed asking price through the Southfield office of Ambler, Pa.-based Berkadia, which has been hired to market the property. “We determined now is the right time to sell The Scott at Brush Park, given the strong state of the market for stabilized Class A mixed-use product,” Richard Broder, CEO of Broder & Sachse, said in a statement. “We are going to the market unpriced and will let the market speak to the value.” Broder & Sachse broke ground on the project at Woodward Avenue and Erskine Street in July 2015. It is one of several Brush Park developments in the past several years, along with the City Modern primarily residential mixed-use project by Dan Gilbert and others. “We always consider our options many times during the cycle of a development — whether that means hold, sell or reposition. We never have a firm sell or hold requirement, which allows us to take note of the market and act accordingly.” He added that Broder & Sachse is “looking for someone who is willing to pay for the value we’ve created and who understands there is more opportunity to reap at this property.” The project also has 15,000 square feet of retail space, which has been leased to businesses like Empire Kitchen & Cocktails, For the Love of Sugar and Carter-Snell Skin Center and dermatology office. An emailed alert about the listing says the residential units are 100-percent leased and the retail space is 95-percent preleased. Broder & Sachse is also redeveloping the former Milner Arms apartments at Woodward Avenue and Martin Luther King Jr. Boulevard into The Hamilton and The Vernor, long in the works at Cass Avenue and Canfield Street in Midtown on land owned by Wayne State University.

BUSINESS NEWS Detroit-based Clark Hill PLC’s absorption of Dallas-based Strasburger & Price LLP was the largest U.S. law firm M&A deal of 2018’s second quarter, according to a prominent tracker of law firm mergers and acquisitions. The merger with 195-attorney Strasburger & Price in April has grown Clark Hill’s attorney count to about 650. J Sears is closing its store at Oakland Mall in Troy. The location at 300 W. 14 Mile Road is scheduled to close in late September as part of a nine-store round of closings for the troubled retailer. J Jacapps, an app developer founded by a Detroit radio veteran formerly of WRIF-FM (101.1), helps companies create efficiencies through mobile applications. After a decade in operation, it is cashing in on its inJ

KIRK PINHO/CRAIN’S DETROIT BUSINESS

Broder & Sachse broke ground on The Scott at Brush Park at Woodward Avenue and Erskine Street in July 2015. It is one of several Brush Park developments in the past several years, along with the City Modern primarily residential mixed-use project by Dan Gilbert and others.

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

630 acres

The size of a former Boy Scouts camp near the Huron National Forest that Detroit real estate investor Dennis Kefallinos purchased.

$2.3 billion

The amount of Michigan exports that could be subject to retaliatory tariffs by China, Mexico, Canada and the E.U., according to a U.S. Chamber of Commerce analysis.

34 acres

The property Traverse City Whiskey Co. bought to expand production in Leelanau County, according to the Associated Press.

vestments and diversified client base. J WXYT-FM (97-1) The Ticket extended its contract with Mike Valenti, the spirited sports radio host of the eponymous “The Valenti Show.” J More than seven years after the sale of Detroit Medical Center, Legacy DMC, the nonprofit board that has been overseeing the 2011 sale and purchase agreement has given six-hospital DMC’s for-profit owner Tenet Healthcare Corp. a clean bill of health on 15 covered contract covenants. J Wixom-based Rockwell Medical Inc. responded to a whistleblower lawsuit by its former CEO Rob Chioini and former CFO Thomas Klema by denying all allegations and countersuing the former executives in the U.S. District Court Eastern District of Michigan in Detroit. J Wrecking crews took their first

swipes last week at the half-built jail structure on Gratiot Avenue near I-375 in preparation for a complete demolition at the site. Detroit-based Bedrock LLC will then lead development of retail, office, residential and restaurant space on the property. J Novi-based Cooper-Standard Holdings Inc. has a deal to acquire Lauren Manufacturing LLC and Lauren Plastics LLC. The two rubber and plastic suppliers are housed under New Philadelphia, Ohio-based Lauren International Ltd. J DTE Energy Co. is proposing a multimillion-dollar investment at the vacant Summit Place Mall in Waterford Township for a new storage facility staffed with 225 workers. J An outdoor Latin restaurant created by Prime + Proper proprietor Jeremy Sasson and supported by Dan Gilbert’s Bedrock LLC opened last week in Detroit’s Capitol Park as part of the summer Downtown Detroit Markets program. Clementina will be open through around Nov. 10.

OTHER NEWS J Two employees of a contractor working on a Wayne State University construction project, the Anthony Wayne Drive Apartments, were diagnosed with Legionnaires’ disease. The cases come after the university found the bacteria in three cooling towers and three bathrooms in several campus buildings last month. J Scheduled for Sept. 13-22 in Eastern Market, Murals in the Market is scheduled to feature 50 artists who will add around 40 new murals to the area. The event would include a block party and add a new art element: sculptures. J The American Civil Liberties Union of Michigan and other organizations have settled a lawsuit that allows low-income Detroit individuals and families facing foreclosure to buy their homes for $1,000, the Associated Press reported.

tate health Director Nick Lyon has brought in one of Michigan’s legal big guns to try to avoid going on trial for involuntary manslaughter in Flint’s Legionnaires’ bacteria outbreak that corresponded with its water crisis. Prominent Grand Rapids attorney John J. Bursch will deliver closing statements Wednesday in Lyon’s defense in the conclusion of a 10-month preliminary examination in Genesee County District Court. For Bursch, it’s a courtroom setting that’s a couple of notches below his normal workplace. A former state solicitor general, Bursch is usually in front of the state and nation’s highest courts, having argued 27 times before the Michigan Supreme Court and 11 cases before the U.S. Supreme Court. Bursch’s extensive appellate cases have spanned numerous areas of law — business and environmental litigation, intellectual property disputes, election law and constitutional challenges. But he’s never been involved in a criminal case of such magnitude as the charges Attorney General Bill Schuette’s special prosecutor brought against Lyon in a probe of Flint’s water crisis that has ensnared 15 state and local officials. Bursch has been working in the background on Lyon’s behalf for months with the health department

director’s main criminal defense attorneys, Larry Willey and Chip Chamberlain of Willey & Chamberlain LLP in Grand Rapids. The Michigan Department of Health and HuBursch man Services had spent $1.4 million through late June on Lyon’s criminal defense alone, with $1.35 million paid out to Willey & Chamberlain and $50,000 paid to Bursch’s Caledonia-based firm, Bursch Law PLLC, state records show. Lyon’s preliminary exam has spanned 23 days in court before Judge David Goggins, who has indicated he’ll rule July 25 on whether Lyon should stand trial on felony charges of involuntary manslaughter and misconduct in office and willful neglect of duty. Bursch said he took on the case out of a principle that the charges against Lyon essentially criminalize the decision-making of government officials. “If public officials are criminally charged for not doing the job that somebody thought should have been done it’s going to chill officials from making the hard decisions when you want them to,” Bursch told Crain’s.

PALAZZO DI BOCCE

Sixteen of the world’s best bocce players are set to compete later this month at the International Bocce Tournament hosted by Palazzo di Bocce in Lake Orion.

Bocce tournament set for metro Detroit

he world’s best players of one of the oldest sports in the world are set to compete in Lake Orion later this month. Palazzo di Bocce is hosting the International Bocce Tournament on July 20-21. The Lapeer Road venue does double duty as an Italian restaurant and expansive bocce facility. Sixteen of the world’s best players representing eight countries will compete for the $10,000 grand prize of the competition, which has a total purse of $20,000.

Americans Jose Botto and Jason Wisniewsk, representing Palazzo di Bocce, are among the contenders. Botto took home the silver medal at the World Singles Bocce Championship in 2015, bringing home the first world medal ever for the U.S. Wisniewski placed third in the U.S. Singles Championships in 2015. The tournament will mark the second time it has been played in the U.S., according to Oakland County Prosper, a county-run magazine. The county is sponsoring the tournament.