Crain's Detroit Business, Oct. 1, 2018 issue by Crain's Detroit Business

With few contracts, Tigers face offseason of changes Page 3 Tigers manager Ron Gardenhire

OCTOBER 1 - 7, 2018 | crainsdetroit.com

$2.5B deal done, Cotton family plans next steps, new ventures

jgreene@crain.com

After his family’s $2.5 billion sale of Meridian Health, Jon Cotton is already back in the health care game. Specific business and philanthropic plans are uncertain for the

four other members of the Medicaid health plan’s founding family. But Meridian’s charismatic 40-year-old corporate president and one of the three sons of David and Shery Cotton, who founded Meridian in 1997, has already launched ApexHealth, a

Grosse Pointe Farms-based Medicare Advantage managed care company. In addition, he says the family is working to structure a family foundation to handle their charitable giving. SEE COTTON, PAGE 17

Jon Cotton: Gearing up a Medicare Advantage insurer.

REAL ESTATE

A DREAM IGNORED, A PROMISE UNFULFILLED

KIRK PINHO/CRAIN’S DETROIT BUSINESS

The far east side neighborhood struggles with blight, disinvestment and decay.

Land on Detroit’s lower east side in limbo after developer’s broken promises By Kirk Pinho

An overturned, decomposing piano, a discarded wooden pallet and black bags of trash serve as streetside reminders of the repercussions of years of broken development promises in Detroit. In 2004, a group of investors made what was to be a reported $258 million bet on the city’s lower east side, and the Kilpatrick administration and City Council spent

millions priming the area for redevelopment. More than a decade later, and with New Far East Side Development Co. LLC still controlling at least 45 acres of the area abutting Grosse Pointe Park, the city has few options for getting back the property it sold to the investment group the Duggan administration says broke its promises of redevelopment. Today it still sits largely fallow, with nary a sign of the roughly 3,000 homes

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that were proposed for the area. It’s one of untold numbers of grandiose redevelopment visions that never got off the ground, for a host of reasons. But it was also one of the largest and most ambitious in recent memory and, to this day, the neighborhood struggles with blight, disinvestment and decay, with nearly 150 violations by New Far East Side Development totaling $41,000 accrued. SEE EAST SIDE, PAGE 18

Need to know J Group of investors that included a former Clinton-era cabinet secretary made reported $258 million bet J Kilpatrick administration and City Council spent millions priming the area for redevelopment J City left with few options for getting back after Duggan administration says developer broke its promises

2018 // O C T O B E R 1 , OIT BUSINESS CRAIN’S DETR

FOCUS

ELECTION 2018

NEWSPAPER

Page 3

WORKFORCE

HEALTH CARE

By Jay Greene

Warner, Norcross + Judd to move next to LCA in Detroit

Piecing together finance proposals: They add up to a balanced budget By Chad Livengood clivengood@crain.com

On paper, the tax and spending plans on which Bill Gretchen Whitmer and for Schuette are campaigning governor will almost certainly the plunge the state back into

main checking account, which funds discretionary spending for state agencies and programs. Whitmer, an East Lansing Democrat, is vowing to eliminate the on unpopular income tax Gretchen Snypensions that Gov. Rick Whitmer: Wants imder and the Legislature to stop tapping a tax posed in 2011 as part of school fund. code overhaul that shifted large corporations to more of the tax burden from

red. Bill Both candidates auditionSchuette: ing this fall to be Michigan’s Promising to cut next CEO are making promis- income tax. to at es to voters that add up least $1.2 billion in reduced $10 billion general fund, revenue for the state’s and individuals. comes at an estitransportation the The tax cut Whitmer wants leaving less money for that business leaders annually. workforce infrastructure mated cost of $300 million the Legisla“I think no matter who controls Whitmer, have been clamoring for. Snyder is credited the desk,” said While outgoing Gov. Rick a ture, that’s coming to pension income as balanced budgets after with delivering annual who voted against taxing of a governor faces major “Heck, Bill Schuette all period of turmoil, the next promises a state senator. ads in favor of that.” campaign on fiscal hurdles in delivering sudden is running supported has seen nearly two deSchuette also has recently with a general fund that Legislatures past income, after cades of stagnant revenue repealing the tax on retirement money to road repairs reductions Business depends on a reduced taxes and diverted bringing his promised make these investments. for by dedicated user to $1.3 bilthe human infrastructhat were traditionally paid in general fund revenue strong infrastructure and Need to know with skills to do the Bill Schuette offer tax cuts, fees and taxes. ture of an educated people practice JJGretchen Whitmer, out of this lion. Snyder's dollars reverse billion “Squeezing another Whitmer also wants to plans that could create deficits jobs.” ” to subsidize public spending start” for the state’s easy — or frankly helpful, to eliminate tapping the School Aid Fund budget is not going to be Schuette is vowing a “fresh to Snyder and Gov. of colleges, contending JJBoth gubernatorial candidates want cut will fuel economic said Bill Rustem, a past adviser president of Public universities and community budget and argues a tax violates the spirit of the tax on retirement income and people flocking to William Milliken and a retired “There’s ways you the “diversion” of funding growth through more jobs apvoters that 2.8 funding seen stagnant Sector Consultants in Lansing.But it would require overhaul of K-12 school JJState's general fund has the state — and paying taxes. Granholm and a could do some of those things. fees to do so.” In 2007, former Gov. Jennifer income tax rate proved in 1994. percent growth since 2000 million $900 up free or the and Changing that policy would Legislature agreed to raise raising some other taxes fund grew by just what programs or split K-12 schools. percent in what was porMichigan’s $10 billion general Neither candidate has said more annually for Michigan’s from 3.9 percent to 4.35 uld blow a $900 million asure to help the state illion — between 2000 and vernment they will elim-

Labor strife on the rise in Southeast Michigan By Dustin Walsh dwalsh@crain.com

Thanks to a strong economy and businesses’ difficulty in finding talent, power has shifted to employees. Labor strife appears on the rise in Southeast Michigan. On Sept. 17, nurses at the University of Michigan voted to authorize a three-day work stoppage to protest “ongoing and continuous violations of their workplace rights.” Two days later, 98 percent of the 160 housekeepers, servers, cooks and door attendants represented by Detroit-based hospitality union Unite Here Local 24 voted in favor of a strike at the Westin Book Cadillac in Detroit. And more than 160 road projects in Michigan were halted for nearly four weeks after a union of heavy equipment operators stopped working. With the unemployment rate in Michigan at 4.1 percent in August, the lowest it’s been in nearly 20 years, and workers in short supply, unions appear to control more leverage than in the recent past, officials said. “Now is the time to make sure we’re delivering,” Christine Sweeney, deputy organizing director for the AFL-CIO, told the Wall Street Journal last week. But local labor experts caution against believing a recent spike in labor strife is a sign of a strong labor movement. “Anecdotes are interesting, but three (local) strikes a trend reversal does not make,” said Hoyt Bleakley, an associate professor of economics at University of Michigan. “The decline in unionization has happened through recessions and expansions consistently. We’re not anywhere near a turning point on that.” While unions added 52,000 workers in Michigan last year, union affiliation remains well below pre-recession levels. More than 20 percent of the workforce was represented by unions in 2007, down to just 16.8 percent in 2017. Approximately 658,000 Michiganders are union members, a more than 35 percent drop since 1989, according to the U.S. Bureau of Labor Statistics. SEE LABOR, PAGE 19

INSIDE

Solving the puzzle of the candidates’ tax promises << Tax and spending plans of gubernatorial candidates Whitmer and Schuette would almost certainly plunge the state back into the red. Page 10

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

MICHIGAN BRIEFS

INSIDE

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

Michigan State’s $2.9 billion fund boosted by alternative bets Private equity helped drive annual performance for the top-performing U.S. college endowments, Bloomberg reported. Michigan State University posted an 11.1 percent investment gain in fiscal 2018, boosted by private equity, venture and real estate portfolios, “which handily beat their public market counterparts,” Chief Investment Officer Philip Zecher said in an email. Most college funds end their fiscal year on June 30 and report results in the fall as they receive performance updates on private investments. Vanderbilt University and University of Kansas posted double-digit returns and said private equity helped performance. It’s a switch from fiscal 2017, when many schools with larger portions of public equities bested their counterparts stacked with more alternatives. Endowments of all sizes had a median gain of 7.4 percent, gross of fees, according to data by Wilshire Trust Universe Comparison Service. Colleges usually report their numbers net of fees. The value of Michigan State’s fund

rose to a record $2.9 billion, the school in East Lansing said last Wednesday. MSU allocates about 40 percent in public equity, 23 percent in private equity and 22 percent in hedge funds, with the remainder in fixed income and public and private real estate and real assets. The fund has been run by Zecher, who has a doctorate in nuclear physics from the school, since 2016. Michigan State was among the top performers in fiscal 2017 with a 16.2 percent return.

Business Leaders for Michigan PAC endorses Schuette for governor

Business Leaders for Michigan's political action committee endorsed Republican Bill Schuette for governor last week, saying that the attorney general is more closely aligned with the group’s economic proposals than Democrat Gretchen Whitmer. Schuette held a press conference last Wednesday with leaders of statewide business and trade groups at the Michigan Restaurant Association’s downtown Lansing headquarters. The support from BLM is one of three major endorsements Schuette snagged this week from business groups, which have predominantly favored Schuette over Whitmer, a for-

Michigan State University posted an 11.1 percent investment gain in fiscal 2018, boosted by private equity, venture and real estate portfolios.

mer Democratic state senator. The Michigan Manufacturers Association and the National Federation of Independent Business also backed Schuette this week, joining a coalition of business groups that includes the Michigan Chamber of Commerce, the Michigan Restaurant Association and the Small Business Association of Michigan. Leaders with the groups cited Schuette's record on taxes and business regulation for their support of Schuette over Whitmer, who has led in recent polls.

Cintas to open Delta Township facility

Cincinnati-based Cintas Corp. has

started construction of a new facility in Delta Township. Cintas (NASDAQ: CTAS) will build a 55,000 square-foot facility and add 60 jobs, according to a news release. It expects to start hiring in fall 2019. Cintas has operated in the Lansing area for more than two decades, the release said. It has five plants and six branches in Michigan. The company designs and manufactures uniform programs, promotional products, safety products and other items.

Brewer expands in Grand Rapids

Brewery Vivant aims to grow its reach in the Grand Rapids area with a second facility, MiBiz reported.

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It’ll be a 25,000-square-foot taproom, brewery and warehouse in a former furniture store in Kentwood, according to MiBiz. Owners Jason and Kris Spaulding sought additional space as they grew out of their original location at 925 Cherry St. in Grand Rapids. “What we like about the (new) area is there’s not many locally owned places out there. We’re excited to be the local place,” Jason Spaulding told MiBiz. “We’re following our own advice whenever anyone asks us about opening a brewery: We’re going where other people aren’t.”

CORRECTION A story produced by Crain Content Studio on Page 40 of the Sept. 24 issue overstated the amount of investment tied to the annual Detroit Homecoming event. The story should have said the event, in its fifth year, has spurred about $300 million in pending and completed investments.

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REAL ESTATE

Warner Norcross + Judd is opening office next to Little Caesars Arena By Kirk Pinho kpinho@crain.com

Warner Norcross + Judd LLP is opening a large office next to Little Caesars Arena and relocating its Southfield office to the Bloomfield Hills area. The Grand Rapids-based law firm is leasing almost 30,000 square feet — the entire third floor — of a to-bebuilt building sandwiched between the arena and the Wayne State University Mike Ilitch School of Business on Woodward Avenue. The De-

Need to know

 Grand Rapids-based law firm is leasing almost 30,000 square feet of to-be-built building between the arena and the Wayne State University Mike Ilitch School of Business  Will relocate its Southfield office to Bloomfield Hills area

Detroit office is expected to open in September 2020 with about 100 employees, including roughly 60 attorneys 

troit office is expected to open in September 2020 with about 100 employees, including roughly 60 attorneys, said Linda Paullin-Hebden, executive partner of the firm’s Southfield office. She declined to say how much the firm is spending on the relocation, but did say that it will cost more to be in the new five-story building, which will also have the Detroit Medical Center as a tenant. “But it won’t be as much as you might think,” she said. “At the same

time, we think that comes with opportunities we don't have currently. We think it’s a good investment.” Rent in new office construction downtown is in the high $30s to low $40s per square foot including utilities. According to CoStar Group Inc., a Washington, D.C.-based real estate information service, rent in the Southfield Town Center, where Warner Norcross has about 26,000 square feet, is $16 to $17 per square foot, not including utilities.

Tigers will have a lot of decisions to make for 2019 By Bill Shea bshea@crain.com

The Detroit Tigers ended their season on Sunday, a six-month losing affair that surprised no one because it marked the club’s first full year of a rebuilding process. At the core of that effort is trying to replenish the team’s talent pool after a decade-plus of using young prospects in deals that landed the Tigers veterans amid a win-now strategy that produced good teams but no championships. Going into 2019 — Opening Day is March 28 — the Tigers have just two veteran players under long-term contract. Those are aging slugger Mi-

Need to know

Only Miguel Cabrera and Jordan Zimmerman have longer than 1-year contracts 

 Roster will be salary arbitration or team-controlled players  Rebuilding could fuel playoff contention by 2021

guel Cabrera ($30 million) and starting pitcher Jordan Zimmerman ($25 million), per sports salary tracking site Spotrac.com. The rest of the salary on the team’s books so far for next season is earmarked for two ex-players: $8 million for Houston Astros pitcher Justin

Verlander, and $6 million for Prince Fielder, who has been retired for more than two years. Those deals are the legacy of late owner Mike Ilitch’s free spending. Having only two active players under long-term deals reflects a change in business strategy as the Tigers pass from one generation of ownership to the next. Two years ago, the team had 12 multi-year contracts heading into the season. The team now is controlled by Mike Ilitch’s son Christopher Ilitch, 53, and he’s implemented a budget-minded spending philosophy quite different from that of his father’s regime. The days of enormous

NONPROFITS

4 Head Start providers in Detroit must recompete for contracts By Sherri Welch swelch@crain.com

contracts in the style of the New York Yankees or L.A. Dodgers are over for the Tigers, at least for a while. The team began to shed expensive talent last summer, notably by trading Verlander, J.D. Martinez, Justin Upton and others in a bid to reduce spending while amassing young prospects who will remain under team financial control (i.e. cheap in baseball terms) as they develop into major leaguers intended to help Detroit win its first World Series since 1984. The Tigers declined to discuss their finances, but common sense suggests the team’s payroll was bloated, because it hadn’t produced a playoff team since 2014.

At a time when foundations are pouring tens of millions of dollars into early childhood education in Detroit, the city’s Head Start system, which serves the Need youngest, most to know vulnerable chil Shifting dren, could see a contracts could big disruption. lead to closure of Four of the six local Head Start Head Start grantsites, layoffs ees in Detroit must recompete  Foundations for renewal of funding technical their five-year assistance, grants contracts this as providers forge fall. collaboration Three are be Federal funding ing required to decision expected participate once some time in 2019 again in an open competition for funding renewal after scoring in the lowest 10 percent nationally in a federal evaluation that one expert says sets up some number of providers to fail each year by grading on a curve against national benchmarks that aren’t clear up front. The government is considering changes to the evaluation, but not in time to keep the Detroit agencies out of recompetition. A fourth Detroit provider found noncompliant with federal operating guidelines early on in its five-year contract must also recompete. It’s not a certainty that the contracts will shift to other providers. In a study released in August 2016, the Department of Health and Human Services said about a third of all Head Start grantees were required to recompete for funding. Of those, about three-quarters had their grants renewed for another five-year term. More than half were the sole applicants for their respective grants. But if the four are unsuccessful in winning renewal of their contracts, up to $54.15 million of the $74 million in annual Head Start/Early Head Start contracts in Detroit could shift to new providers. That could mean the closure of existing Head Start centers and layoff of hundreds of employees. The closures would take away the only routine some children know and undermine the trust and relationships forged with parents since taking on the contracts in 2014 after the city of Detroit exited Head Start, providers said.

SEE TIGERS, PAGE 20

SEE HEAD START, PAGE 22

SEE OFFICE, PAGE 21

SPORTS BUSINESS

SEASON OF CHANGES?

Detroit Tigers manager Ron Gardenhire (center) watches as pitcher Francisco Liriano leaves the baseball game with a trainer in a game against the Minnesota Twins Thursday in Minneapolis. AP PHOTO/JIM MONE

MUST READS OF THE WEEK Lakeside going for a ‘downtown-esque’ feel

Temple Street redevelopment plan

Electric vehicles, charging stations

Lakeside Mall redevelopment plans reveal a move toward a downtown center plan. Page 14

Temple Street hotel, apartment project gets $5.7 million from state. Page 9

Consumers Energy, General Motors rev up plans for electric vehicle technology in Michigan. Page 13

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

HAP, United Physicians, Oakland Southfield team up to offer primary care-based Medicare HMO plan By Jay Greene jgreene@crain.com

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Health Alliance Plan of Michigan has teamed up with two physician organizations in metro Detroit to offer a primary care-based Medicare Advantage HMO plan for seniors, one of the first of its type in Michigan. Enrollment will begin in January for Primary Choice, HAP’s new Medicare managed care program that offers additional benefits than most plans in exchange for members to work closely with 400 primary care doctors who are part of United Physicians of Bingham Farms and Oakland Southfield Physicians in Southfield. Members also can choose any specialist, hospital or post-acute care provider in HAP’s wider network. Several of the unusual features of Primary Choice are that it was designed with the help of physicians and there are no copayments for primary care visits, lab work, telehealth services and annual physicals. Primary Choice members also pay a zero monthly premium to HAP, but still must pay Medicare’s Part A and Part B premiums for hospital and physician services. Moreover, there are no copayments for specialty visits for pulmonary and cardiac rehabilitation services, which are designed to reduce costly hospital readmissions, said Terri Kline, HAP’s CEO. Other specialty doctor visits require a $30 copayment. “We are projecting lower (expenses) for this plan so we can offer more benefits” to members, said Kline, adding that first-year membership for Primary Choice is expected to be about 2,000 seniors. HAP currently offers nine different types of individual Medicare Advantage plans with about 70,000 members. HAP is offering three new MA plans for 2019, including Primary Choice, a special-needs plan in Flint for dual-eligible people enrolled in Medicare and Medicaid and a lower cost PPO program. Nationally, more than one-third of Medicare-eligible seniors are enrolled in Medicare Advantage plans, or about 19 million members, according to the Centers for Medicare and Medicaid Services. Michigan is the sixth-largest state with people enrolled in about 63 different Medicare Advantage plans with 673,000 members in 2017. The average monthly premium is expected to drop 6 percent in 2019 to about $30, said CMS. Overall, the Medicare population is projected to increase from 54 million beneficiaries this year to over 80 million by 2030 as the baby-boom generation ages into Medicare, CMS said. More than 40 percent of seniors will join a Medicare Advantage plan, up from 30 percent in 2017. Open enrollment for Medicare plans begins Oct. 15 and runs through Dec. 7. Coverage begins Jan. 1. Michael Genord, M.D., HAP’s chief medical officer, said Primary Choice came about after a discussion last October with CEO Mike Williams, M.D., of United Physi-

Mike Genord: Helps lower costs for members.

Terri Kline: First plan of its kind in Michigan.

Need to know

 HAP has contracted with United Physicians and Oakland Southfield Physicians to offer Medicare managed care plan Jan. 1  Plan offers expanded benefits that include zero copayments for primary care, cardiac rehabilitation and pulmonary specialty services and $100 per quarter allowance for over-the-counter items  Medicare Advantage membership expected to grow by double-digits each year as baby boomer population ages

cians, and Jerry Frankel, D.O., chief medical director with Oakland Southfield Physicians. “Mike and Jerry called me to talk about how they could participate with HAP in the market,” Genord said. “We talked for eight months ... and wanted to bring something to the market that is physician driven and disruptive” in the managed care Medicare Advantage market that is fast-growing. Kline said there are similar plans nationally as Primary Choice, but that it is the first in Michigan. Williams of United Physicians, one of the largest physician organizations in Southeast Michigan with 2,400 participating doctors, said United and Oakland Physicians' 320-plus doctors have significant geographic overlap with their practices, share similar hospitals, and felt it could work with a payer more closely to benefit Medicare patients. “We have 400 primary care doctors who are coordinators of care with patients,” said Williams, who noted it is similar to a narrow network because of the primary care doctors but it offers a wide range of specialists and hospitals that are in HAP’s broader provider network. “We will sit down with patients and make sure they get the best (primary) care possible” and referred to the best specialty doctors, hospitals and post-acute care providers. Frankel said there has been a lot of competition between physician organizations for members and managed care contracts. He said the partnership with United Physicians and HAP is a recognition that working together makes more sense than fighting for market share. “Mike and I work together quite a lot on primary care leadership and agreed unless we do something (different) independent primary care doctors might not survive,” Frankel said. Ed Murphy, president of PM Group Benefit Advisors II LLC, an Auburn Hills-based affiliate of Plante Moran PLLC, said HAP’s Primary

Choice plan appears to be designed to reduce costs and help patients receive the right care at the right time in the right setting. “As health care inflation continues, carriers need to develop products that help enrolled participants navigate the complex hospital/ health care delivery system,” Murphy said in an email to Crain’s. “Product construct is aimed at efficient channeling of care. Enrolled participants are then asked to accept the care direction as it is driven by clinical effectiveness through providers that adopt and embrace the more efficient/effective delivery system. The goal, a win-win-win. Better care, better clinical outcomes, and lower costs.” Genord said the Primary Choice HMO plan offers several additional benefits that offer members lower out-of-pocket costs than other plans and greater case management. Besides other benefits, Primary Choice offers Medicare Part D “gap” prescription drug coverage for tier 1 and tier 2 drugs for seniors, saving them potentially hundreds of dollars in uncovered costs. Members also are allowed $100 per quarter free coverage for over-the-counter health products, including blood pressure cuffs or weight scales, Genord said. Kline said Primary Choice will have lower health care costs, but she declined to specify how much lower the primary-care based Medicare Advantage program will cost per member. But she said HAP was required to project all costs to Medicare when it filed for the plan. “(Studies) have demonstrated that care coordinators, one person managing care and the cost of care for patients can lower costs,” Kline said. “Here (in Michigan) we have high (emergency room) use and costs. ... These doctors can find a way to lower ER costs.” Kline said she believes Primary Choice also will help lower unnecessary hospital admissions, readmissions and fewer days in observation care units because primary care doctors will better manage care. Frankel said post-acute care costs are very expensive, especially for Medicare seniors, who range in age from 65 to more than 90 years old. “We want to make sure they end up in the right place in the system (after hospital discharge or if they can’t remain in their homes. We may end up sending patients to four or five ‘star’ facilities” instead of two or three stars based on Medicare-developed quality rating systems for home health, long-term care or rehabilitation facilities. Williams said physicians are very conscious about out-of-pocket costs for seniors as most live on fixed incomes. “We are seeing in our practices that seniors have reduced income and don’t want them to have to choose between food and medicine,” he said. “This helps with their well-being” to know primary care doctors are looking after them. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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Burns: One of the innovative programs that you offer is the Fatherhood Initiative. Matthews: Male involvement is critical in the road to recovery. Children have healthier lives when fathers or male figures are involved. It’s about training dads and facilitating how they can be more involved, giving them the information they need about their child so they can be supportive of the treatment plan. Burns: Right, and even educate them about the stigma that they might have about their child. Matthews: Absolutely. They should not be ashamed if their child has a challenge. Burns: How can the average person advocate and try to rid this stigma of mental health? Matthews: First we have to think about how we talk about mental health. That means we teach our children that mental health challenges are like any other type of illness and recognize that these problems are common.

Burns: What are some of the things that parents should look for so they don’t wait until a child is fouryears-old to be diagnosed? Macon: Autism is defined by a core set of symptoms. We’re looking for deficits in communication, play and social skills. Often this looks like failure to make eye contact, a regression in language or just a general non-engagement. One way you might see this is if your child is developing and suddenly you start seeing a regression in language. Or you start seeing eye contact disappear. Those are some of the first signs. Burns: If I'm a parent, how do I contact you or your colleagues at Centria? Macon: If someone wants to get more information, Centria has a dedicated page for parents. (https://www. centriaautism.com/) Centria can provide answers and help guide parents along the way. It’s really important to give parents the tools that they need to succeed.

Gilchrist: Absolutely. We need to wrap our arms around people and not lock them up. We don’t need to feed people into prison. Burns: As Lt. Governor, what would be your vision in helping children and their families to successful, rewarding and healthy lives? Gilchrist: Enabling infrastructure or infrastructure that enables imagination. That means healthy and productive environments at school. It also means the general environment that our kids exist in and can be physically active in whether that’s beautiful and vibrant state parks or safe streets. We believe that having infrastructure takes a holistic approach to quality of life. When we are enabling families, we’re enabling people to be healthy and to make these choices, and to be able to do whatever they want to do in Michigan. That will return the State of Michigan to one where people want to come to and where people want to stay, rather than going somewhere else to build their life and career.

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

New conservancy to raise $5M for Grand Circus Park work By Kirk Pinho

Need to know

kpinho@crain.com

A to-be-formed conservancy is seeking to raise $5 million needed for large-scale improvements to Grand Circus Park, and the parking garage below it is slated for at least $15 million in upgrades. Among the hoped-for upgrades are the installation of a sidewalk around the 5-acre park, replacement of the “pillboxes” that serve as the exits/entrances to the parking garage below the park and installation of a boulevard through Woodward Avenue where it bisects the space. Stacy Fox, co-founder and principal of Detroit-based developer The Roxbury Group, which is part of a joint-venture operating and improving the Grand Circus Park garage, said the conservancy is an offshoot of the Theater District Association, a 501(c)3 nonprofit that has raised about $750,000 through its annual Grand Circus Gala every summer for lighting, landscaping, trees and fountains in the area. “The Theater District Association has been a very good steward of this initiative the past four years, but it has other priorities that it is also interested in. It’s not just the park that the association is involved in or concerned with, it’s about the broader theater district,” Fox said. The conservancy will focus exclusively, on the park itself, with a board consisting of representatives from the city, the nearby property owners and

Hoped-for improvements include sidewalk around the park, boulevard through Woodward Avenue 

 Parking garage also slated for at least $15 million in upgrades  Conservancy is offshoot of Theater District Association

the Downtown Detroit Partnership, which partners with the association, and will partner with the conservancy, on execution of priorities and initiatives, Fox said. Fox said the $5 million effort is a reasonable milestone. “Given what we have done with just the gala, I think that’s an achievable goal,” she said.

$19M for parking deck upgrades A joint venture between Roxbury Group, a subsidiary of Bermuda-based holdout creditor Syncora Guarantee Inc. and Nashville, Tenn.based Premier Parking has also entered into a 30-year master lease agreement with the city to operate, manage and repair the underground garage, which has 790 spaces. The agreement comes five years after the city entered Chapter 9 municipal bankruptcy and reached a settlement with Syncora, which four years ago settled a $333 million bankruptcy claim with the city for $44.8 million in new debt, a lease to oper-

Among the hoped-for upgrades are the installation of a sidewalk around Grand Circus Park.

ate the Detroit-Windsor Tunnel, a long-term lease of the parking garage, development rights to the former Detroit Police Department headquarters building at 1300 Beaubien St. and land holdings along the east Detroit riverfront. “We look forward to benefiting from Roxbury’s and Premier Parking’s expertise in guiding the redevelopment of this key piece of Detroit’s

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that the joint venture receives revenue from the garage’s operations until the initial investment is recouped. Once that occurs, the city receives 25 percent of the parking revenue and the joint venture receives the remaining 75 percent. “I think because of our substantial investments in the district, including the David Whitney, Metropolitan (Building) and others, we had a natural interest in ensuring that the structure get preserved,” Di Rita said. “We were approached by the other partners to assist in finalizing the transaction with the city, but also to bring some expertise on financing and general project oversight. Our partners bring considerable strength as well, in terms of ownership and operation of similar assets around the country, so it was a great fit.” Premier Parking owns and operates 500-plus parking operations nationwide, a press release says.

Road, Suite 415, Troy, voluntary Chapter 11. Assets and liabilities not available.  Dumitru Medical Center PC, 38300 Van Dyke Avenue Ste. 104, Sterling Heights, voluntary Chapter 11. Assets: $704,789.57; Liabilities: $659,440.20.

 Doctor One House Call Physicians PC, 38300 Van Dyke Avenue Ste. 104, Sterling Heights, voluntary Chapter 11. Assets: $587,330; Liabilities: $434,401.61.  A1 Expeditors LLC, 7320 Nightingale, Dearborn, voluntary Chapter 7. Assets: $300; Liabilities: $23,759.36.

Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

BANKRUPTCIES The following businesses filed for bankruptcy protection in U.S. Bankruptcy Court in Detroit Sept. 21-27. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation.  Pyramid Quality Solutions and Innovations Inc., 2075 W. Big Beaver

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infrastructure,” Frederick Hnat, CEO of Syncora, said in a statement. The joint venture, Grand Circus Holdings LLC, will put $19 million into parking deck improvements that include upgrades to infrastructure, life-safety systems, security and technology, according to a press release. They are slated to take place over the next two years. The garage serves downtown residents of buildings like the David Whitney Building and the Kales Building, along with nearby office users. Spaces are made available to the public when available. The work “will not necessarily disrupt the ongoing use of the garage,” a press release says. David Di Rita, principal of Roxbury Group, said in an email that Detroit-based Pullman Restoration is working on developing the initial scope of work for the garage. Dykema Gossett PLLC provided legal services during the negotiation of the agreement. He said the agreement stipulates

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Henry Ford Health, WSU reach tentative deal to team up By Jay Greene jgreene@crain.com

Two of the biggest health care organizations in Detroit — Henry Ford Health System and Wayne State University School of Medicine — have signed a long-awaited letter of intent to affiliate, a move that would shake up the health care market in Southeast Michigan. The agreement, which is expected to be finalized within six months, covers medical education, clinical services and research, officials said Friday morning in a statement. It also comes on the heels earlier this week of a five-year deal reached between Wayne State University Physicians Group, the medical school’s faculty practice plan, and Detroit Medical Center on clinical and administrative services. In May, Crain’s reported that Henry Ford and Wayne State have been talking about combining forces for nearly two years under the code name “Project Leapfrog,” a reference to the hope the partners could grow their health care operations beyond that of other health systems based in Southeast Michigan, including Beaumont Health, Trinity Health and Ascension Health. “I am pleased to inform you that Wayne State University and Henry Ford Health System have signed a non-binding letter of intent to expand our partnership and bring our two Detroit anchor institutions even closer together,” M. Roy Wilson, M.D., president of Wayne State, said in a statement. “This is a significant step toward our shared vision of building a joint health sciences center that will transform health care delivery, medical education and research, and — most importantly — the health outcomes in our city, and beyond,” Wilson said. Under the proposed plan, which Wilson said will take hard work to finalize, the affiliation would designate Henry Ford Hospital in Detroit as the primary institutional affiliate for Wayne State University’s School of Medicine, College of Nursing and Eugene Applebaum College of Pharmacy and Health Sciences. “This is truly a groundbreaking collaboration — a private nonprofit organization and a public institution coming together in a revolutionary way,” Wright Lassiter III, president and CEO of Henry Ford Health System, said in a statement. “As we look to the future of patient care and the desire to make a long-standing impact on the health and wellness of our community, we believe that we can better achieve these goals through a transformative partnership than we could as institutions working independently.” Wilson explained that the health sciences center “will not be a physical location, but a separate operating and governance structure with a president, board, budget and governing committees.” It would oversee management and financial coordination of the partnership’s clinical, research and educational programs and activities, he said. Governing boards for Wayne State and Henry Ford have expressed unanimous support of the plan, Wilson said. “This is a great example of a public university and a private nonprofit organization coming together to serve an important mission for the benefit of our community,” Wilson said. “Our goal is to radically improve the health

Need to know

JJHenry Ford Health System and WSU

School of Medicine sign letter of intent to affiliate JJThe agreement would cover medical education, clinical services and research JJFinal agreement is expected within six months

and wellness of those in our community, and beyond — including the most vulnerable populations. We believe we can achieve more toward this goal by working together rather than independently.” Wilson also made it clear that the affiliation under discussion is not a

merger or acquisition. He said both Wayne State and Henry Ford would continue to work with other contracted partners, including DMC.

Background on the proposed deal Based on hundreds of pages of internal documents that Crain’s obtained under the Freedom of Information Act earlier this year, Henry Ford and Wayne State have also discussed a possible merger of their medical groups, a combined pediatric department and expanded children’s services, a consolidated research enterprise and jointly developed clinical

services. The discussions at one time projected $200 million in additional revenue for the partners. If consummated, the Wayne State-Henry Ford affiliation would include combining 1,530 physicians into a single medical group, offering pediatric and adult clinical services and combining research, medical student and residency teaching programs. The affiliation would change the health care landscape in Southeast Michigan by giving Wayne State’s 330 specialists and generalists access to Henry Ford’s six hospitals and the 1,200-physician medical group, and expand medical education and re-

search opportunities for the new partners. It could create a range of opportunities for Wayne State’s 18 clinical and academic departments and for Henry Ford’s six hospitals and 28 outpatient medical centers. Wayne State sponsors eight residency and two fellowship programs with 143 residents and two fellows. They include anesthesiology, dermatology, family medicine, otolaryngology, physical medicine and rehabilitation, urology and internal medicine. Henry Ford sponsors 66 residency programs across a broad spectrum of disciplines at its four teaching hospitals with 911 residents and fellows.

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OPINION COMMENTARY

Time to Line 5 pipeline no longer benefits Michigan get ready M for winter W

inter is j u s t around the corner, and it is only a matter of time until we see sleet, rain and snow. It is obviously time KEITH to put winter CRAIN tires on all those Editor-in-chief bicycles using the ever-growing number of bike lanes in our city. But mostly, the coming of winter will make those lanes even lessused than they have been this summer, while drivers sit stalled in traffic on narrowing roads. I understand the benefits of bikes — they’re healthier and cleaner than cars and take up less space on the road. But cities like Beijing with lots of bikers and bike lanes typically don’t contend with the winters that Detroit has. With more and more people coming into downtown Detroit, taking away lanes on major arteries only makes that traffic worse. And those bike-lane dividers certainly don’t seem like they’d make plowing any easier. I am still waiting for the bikeification of certain streets such as Gratiot or Woodward or Grand Boulevard. I can only assume that will be slightly before we see bike lanes on I-75 and I-94. Maybe they are Detroit’s answer to the lack of mass transit in Southeast Michigan. If politicians thought that segments of the driving public were not happy with the waste of limited resources on bike lanes, then they should just wait until it becomes obvious that bikers have disappeared until springtime, some five or six months away. Meanwhile the stripes will remain, even when they’re buried under snow. I believe more will question the wisdom of spending millions of dollars to accommodate a handful of bikers, notwithstanding the new scooter renters, as winter sets in. This is an idea that was carried way too far, with no end in sight. I can only assume it will continue to spread until someone, perhaps a new set of politicians, realizes the error. I remember when the mayor of Chicago lost a re-election campaign about the city’s inability to clear the snow. Bike lanes could indeed be the new battle cry. This project was a bad idea and a waste of taxpayers’ money in the summer. In the winter, it will become obvious what a mistake this project has been.

y family-owned ferry business has been shuttling passengers to Mackinac Island, Michigan’s most popular tourist destination, for 73 years. People come for the fudge, horses and bicycles, and historic charm — but mostly they come for the unparalleled and majestic beauty of the Straits of Mackinac. An oil spill here from Enbridge’s 65-year-old twin pipelines lurking on the bottom of the straits would be an absolute disaster for my business, and hundreds of others on Mackinac Island and across northern Michigan. There are now several reports that attempt to estimate the unthinkable damage of an oil spill here, with economic impacts differing between $2 billion and $6 billion and more. To me, it’s absurd to argue over the obvious devastation of an oil spill when our leaders should be focused on immediate solutions to prevent one. This past spring when a ship’s anchor struck and damaged both pipelines — and also severed adjacent electrical cables — we learned how imminent this catastrophe actually is. And as regulators have finally begun scrutinizing this pipeline, what they’ve found has only added to the concern: missing anchor supports have allowed the pipeline to sag and sway in the currents; missing protective coating has exposed the pipeline to corrosion; Enbridge has misled officials and withheld damaging information; and oil spill cleanup measures are wholly inadequate for the ice, waves and currents of the straits.

Enbridge’s Line 5 runs under the Straits of Mackinac.

OTHER VOICES Chris Shepler

Even speculation of an oil spill is directly affecting my business, as I now must consider how to provide insurance against a disaster that is out of my control but would put me out of operation. I am keenly aware that my boats rely on oil to operate, and I am not advocating against the entire oil industry. But Michigan should never have allowed an oil pipeline in the Straits of Mackinac

PURE MICHIGAN

and needs to decommission this pipeline. So I was surprised to learn that Michigan no longer benefits from this pipeline. A white paper released earlier this spring documents that Canadian pipeline-company Enbridge has recently transformed its pipeline network so that Line 5 is now primarily a shortcut for Canadian oil to reach refineries in Montreal and Quebec. Described to their shareholders as the “Eastern Canadian Refinery Access Initiative,” Line 5 is an integral part of the Canadian goal of transporting western Alberta oil to the Canadian east coast — right through our Great Lakes. This is even more infuriating when we realize that Canada has given up on building a pipeline to their east coast within their own borders because of the environmental concerns

of an oil spill. Just last year the Energy East pipeline was canceled — making Line 5 in Michigan waters a critical piece of Canadian oil infrastructure. And now making the situation even more frustrating, Gov. Rick Snyder has asked Enbridge to study building a tunnel under the straits as an alternative to the underwater pipeline. While I understand that putting Line 5 in a tunnel would diminish the risk of an oil spill, Michigan would be continuing to take the risk for Canadian oil. Beyond the extreme engineering considerations of a 5-mile tunnel, estimates are that it will take at least seven years until it is completed. We absolutely cannot continue to hope for seven more years that this aging pipeline won’t rupture. Surprisingly, Attorney General Bill Schuette, who has the authority to take immediate action to decommission Line 5, is supporting Snyder’s tunnel proposal, which would delay any action for years. I have joined with nearly 100 other CEOs in the Great Lakes Business Network, all of whom share my concerns about the risk of this pipeline. We are calling for a rapid and safe decommissioning of Line 5 to avoid a catastrophic oil spill. We expect our leaders to take action to protect Michigan businesses and our Great Lakes environment. Chris Shepler is president of Shepler’s Mackinac Island Ferry.

The safety of Line 5: A threat to us all

eaders may legitimately wonder why two longtime Michiganders — one from the business community and one with an engineering background — are so concerned about the continued operation of the Line 5 pipelines under the Straits of Mackinac. The answer lies in a recently surfaced document that underscores the fact that the structure and safety of Line 5 was compromised from the beginning. Warnings about the pipeline’s structure and safety, discussed in a 1954 Bechtel summary report, were ignored by its operators — a dangerous trend that has now continued for decades. Instead of moving forward with Bechtel’s original 1954 plan to armor the structure to prevent erosion of the pipe’s supporting soil by extreme underwater currents, Lakehead Pipeline Co., the predecessor to current operator Enbridge, turned a blind eye to the undermining of the structure and allowed a portion of it to collapse without taking significant action. The inadequacy of regulators notwithstanding, the time for decisive action has arrived. Incremental maintenance actions started in 2001 invited additional risk through the transformation of the structure from a continuously sup-

OTHER VOICES

Edward Timm and Ian Bund

ported one to a discretely supported one, without a complete analysis of the multiplicity of failure modes introduced by this transformation. This incremental maintenance involves the use of support structures that suspend Line 5 off the bottom of the Straits. To date, the hydrostatic testing and inline inspections done by Enbridge and the State of Michigan are anything but conclusive. A 2017 pressure test used far too little pressure to truly evaluate the line, just as a 2014 ultrasonic girth weld inspection was inadequate, especially given the fact that this inspection technology has often failed to find near-critical cracks — including the one that resulted in the rupture of Trans Canada’s Keystone line in South Dakota in November 2017. The bottom line is simple: The pipeline’s structural integrity still needs to be assessed by experts who

are not beholden to the pipeline industry, and given its location in the Straits of Mackinac, nothing but the highest standards should be accepted for its fitness. Line 5 faces multiple threats. Anchor strikes, such as the one that occurred in April, threaten to tear Line 5 apart, currents that could disperse oil swiftly throughout the region, a spill response plan from Enbridge that many worry is understaffed and under-resourced, and the questionable ability of federal government resources to respond in force and in time all intersect to pose a grave danger to Michigan’s economy and environment. In the worst-case scenario of a Mackinac Straits rupture, Line 5 would leak more than 2 million gallons of oil, contaminate 437 miles of Great Lakes shoreline, and cost $1.86 billion in damages, according to a study spearheaded by Professor Guy Meadows from Michigan Technological University. Another estimate forecasts that such a disaster would affect 60,000 acres of unique wildlife habitat with a resulting irrevocable loss of wildlife and cultural resources. At the same time, two environmental groups have sued the U.S. Coast Guard citing November 2017 comments made by former Coast Guard

Commandant Adm. Paul Zukunft during a congressional committee hearing when he told lawmakers the agency is not prepared for a major pipeline oil spill in the Great Lakes. The lawsuit asks a federal court in Detroit to declare that the Coast Guard violated the Oil Pollution Act of 1990 (OPA 90) when it approved the Northern Michigan Area Contingency Plan (NMACP) in June 2017, thereby invalidating the portions which apply to oil pipelines in the Great Lakes, including Line 5. The business and scientific communities alone can’t solve this problem, but their leadership will — we hope — make the difference between an economically and environmentally vibrant Michigan and one with another avoidable black eye. Our elected leaders need to shut Line 5 down until it can be proven by its operator/owner that it is unequivocally safe using the highest standards. We can avoid repeating the Flint water fiasco — if we act now. Ian Bund has spent the last 50 years in active venture capital investing. Edward Timm is a retired senior scientist with a long career with The Dow Chemical Co. and a Registered Professional Engineer in the State of Michigan.

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Temple Street project gets $5.7 million from state By Kirk Pinho kpinho@crain.com

A $67.7 million redevelopment of a Temple Street building in Detroit has received $5.7 million in brownfield incentives. The redevelopment of the former Standard Accident Insurance Co. building at 640 Temple St. by Christos Moisides, David Sutherland and Gretchen Valade is expected to include a 100-room boutique hotel spread across 78,000 square feet. In addition, it’s expected to include about 70 apartments and a rooftop pool, plus other uses. A

A development group plans to turn the building at 640 Temple St. in Detroit into a 100-room boutique hotel and 70 apartments.

nightclub is anticipated in the basement. The Michigan Strategic Fund board approved the $5.7 million brownfield package Tuesday morning. Financing for the project is expected as follows: J Chemical Bank loan: $32.25 million J Michigan Strategic Fund: $5.7 million J Supplemental loan: $4 million J Invest Detroit: $1.5 million J Historic tax credits: $8.6 million J Deferred developer fees: $1.24 million J Developer equity: $14.39 million

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Adell gets another OK for $125M Novi project By Kirk Pinho

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kpinho@crain.com

Broadcast entrepreneur Kevin Adell broke ground last week after he received another Novi City Council approval in his quest to redevelop his former Novi Expo Center site. City Council voted 6-0 last week to direct the city attorney to draft a planned rezoning overlay agreement for rezoning the 22-acre property at I-96 and Novi Road. The agreement still needs a final approval from the City Council, which is anticipated later this fall, said Sheryl Walsh-Molloy, the city’s director of communicaKevin Adell: tions. Broke ground on “It’s 99.9 perproject last week. cent approved,” Adell said Tuesday in an interview. Proposed tenants in the development are iFly Holdings LLC, an indoor skydiving simulation company; Drury Inn & Suites, Fairfield Inn and Suites, Carvana Co., Krispy Kreme Doughnuts, Texas Roadhouse and Planet Fitness. Adell also said Tuesday that he hopes to get a HopCat bar or a rock-climbing business on the site, which has been in his family for more than a half-century. David Staudt, Novi’s mayor pro tempore, said he believes the project will be positive for the city. “This is a piece of property that has been owned by the Adell family for many years and has largely been a blighted piece of property that Kevin is trying to redevelop into a property that the city can benefit from,” he said. “He doesn’t need the money. This is something that he wants to get done, and he’s the only person who can get it done.” Adell owns WFDF 910 AM and The Word Network cable television station. Before its demolition in 2012, the expo center had been vacant since 2005, when the center’s event management company was moved into what is now the Suburban Collection Showplace at 46100 Grand River Ave.

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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 // O C T O B E R 1 , 2 0 1 8

FOCUS ELECTION 2018

Piecing together finance proposals: They add up to a balanced budget By Chad Livengood clivengood@crain.com

On paper, the tax and spending plans on which Gretchen Whitmer and Bill Schuette are campaigning for governor will almost certainly plunge the state back into the red. Both candidates audition- Bill ing this fall to be Michigan’s Schuette: next CEO are making promis- Promising to cut es to voters that add up to at income tax. least $1.2 billion in reduced revenue for the state’s $10 billion general fund, leaving less money for the transportation and workforce infrastructure that business leaders have been clamoring for. While outgoing Gov. Rick Snyder is credited with delivering annual balanced budgets after a period of turmoil, the next governor faces major fiscal hurdles in delivering on campaign promises with a general fund that has seen nearly two decades of stagnant revenue after past Legislatures reduced taxes and diverted money to road repairs that were traditionally paid for by dedicated user fees and taxes. “Squeezing another billion dollars out of this budget is not going to be easy — or frankly helpful,” said Bill Rustem, a past adviser to Snyder and Gov. William Milliken and a retired president of Public Sector Consultants in Lansing. “There’s ways you could do some of those things. But it would require raising some other taxes and or fees to do so.” Michigan’s $10 billion general fund grew by just 2.8 percent — or $277 million — between 2000 and the 2019 fiscal year that begins Monday, according to the nonpartisan Senate Fiscal Agency. The general fund’s growth is more than $4 billion below consumer inflation since the beginning of the century, a reflection of both tax policy and deep reductions in income tax revenue during the depths of the Great Recession. Schuette, a Midland Republican, is promising voters he’ll cut the income tax from 4.25 percent to 3.9 percent — at a cost of $1 billion to the state’s

main checking account, which funds discretionary spending for state agencies and programs. Whitmer, an East Lansing Democrat, is vowing to eliminate the unpopular income tax on Gretchen pensions that Gov. Rick SnyWhitmer: Wants der and the Legislature imto stop tapping posed in 2011 as part of a tax school fund. code overhaul that shifted more of the tax burden from large corporations to individuals. The tax cut Whitmer wants comes at an estimated cost of $300 million annually. “I think no matter who controls the Legislature, that’s coming to the desk,” said Whitmer, who voted against taxing pension income as a state senator. “Heck, Bill Schuette all of a sudden is running ads in favor of that.” Schuette also has recently supported repealing the tax on retirement income, bringing his promised reductions in general fund revenue to $1.3 billion. Whitmer also wants to reverse Snyder's practice of tapping the School Aid Fund to subsidize public universities and community colleges, contending the “diversion” of funding violates the spirit of the overhaul of K-12 school funding that voters approved in 1994. Changing that policy would free up $900 million more annually for Michigan’s K-12 schools. But conversely, it would blow a $900 million hole in the cash-strapped general fund if universities and community colleges were held harmless. “People are shocked when they find out how much money is coming out of our education budget to backfill holes in the general fund,” Whitmer said. When the pension tax cut is factored in, Whitmer’s campaign promises add up to a $1.2 billion hit to the general fund.

Need to know

Gretchen Whitmer, Bill Schuette offer tax cuts, spending plans that could create deficits J

J Both gubernatorial candidates want to eliminate tax on retirement income J State's general fund has seen stagnant 2.8 percent growth since 2000

Neither candidate has said what programs or entire agencies in state government they will eliminate to fund their campaign promises, though Whitmer has left open the possibility of increasing taxes and fees to fund road repairs instead of drawing $600 million annually from the general fund. “As I listen to the rhetoric of my opponent about less, less, less, but you’re going to get more, more, more, I don’t think anyone really believes it,” Whitmer said in an interview with Crain’s. “You have to

make these investments. Business depends on a strong infrastructure and the human infrastructure of an educated people with skills to do the jobs.” Schuette is vowing a “fresh start” for the state’s budget and argues a tax cut will fuel economic growth through more jobs and people flocking to the state — and paying taxes. In 2007, former Gov. Jennifer Granholm and a split Legislature agreed to raise the income tax rate from 3.9 percent to 4.35 percent in what was portrayed as a temporary measure to help the state weather the recession. “We have to do that. It is keeping a promise,” Schuette told Crain’s. “When government makes a promise and they fail to keep it, it just breeds cynicism that you can’t trust any of these jokers. I think that’s wrong.” SEE PROMISES, PAGE 11

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

PROMISES FROM PAGE 10

But an income tax cut has not been a policy priority of one of Schuette’s biggest backers in the state’s business community. “Not on our list,” said Doug Rothwell, president and CEO of Business Leaders for Michigan, which endorsed Schuette last week. “If you’re looking at it just purely from an economic growth standpoint, we’ve not identified pension or personal income taxes as things that rise to that level.”

Where Schuette, Whitmer stand on select business issues Here’s a look at where Republican Bill Schuette and Democrat Gretchen Whitmer stand on major issues affecting business in this year’s campaign for governor of Michigan.

Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

Minimum wage

Marijuana legislation

Has long been opposed to the Affordable Care Act of 2010 that funded the expanded Medicaid health insurance program known as Healthy Michigan. He has said he won't try to repeal the program, which provides health insurance coverage for 680,000 lowincome adults.

Has opposed a higher minimum wage.

Helped get the Healthy Michigan program through the Legislature in 2013.

During the Democratic primary, she voiced support for a $15-perhour minimum wage.

Candidate

Taxes

Medicaid

Bill Schuette

Wants to cut the state’s individual income tax rate from 4.25 percent to 3.9 percent, which would reduce general fund revenue by $1 billion. He has signed a pledge not to raise taxes. Wants to eliminate the state income tax on retirement and pension income, reducing state general fund revenues by an estimated $300 million.

Gretchen Whitmer

Opposes cutting the income tax and has been open to raising taxes or fees that fund roads and transportation. Wants to eliminate the state income tax on retirement and pension income, reducing state general fund revenues by an estimated $300 million.

General fund strain The Legislature’s 2015 road funding plan laid out a five-year path toward gradually increasing road funding by $1.2 billion — half through a tax increase on fuel and vehicle registration fees and the rest through a first-of-its-kind general fund subsidy. Whitmer wants to increase annual road funding by $2 billion to leverage an extra $1 billion each year from the federal government. She has vowed to pursue voter approval of longterm bonding if the Legislature doesn’t go along with increasing fees and taxes on people who use the state's roads and highways. “We’re going to have to make a coalition to make the proper investments that we need to,” she said. Schuette said he’ll seek to wring out more unspecified savings elsewhere in the state budget to free up more money for road repairs. “You’ve got a $58 billion budget, let’s make it a priority,” Schuette said. “Every other aspect of government’s going to have to give a little bit. That’s a better approach, in my opinion.” The $58 billion figure Schuette cites includes the $13 billion School Aid Fund and federal funding for Medicaid health insurance for the poor and other programs that the Legislature has no control over. “What folks misinterpret is they see that $58 billion budget number and think that’s the budget — and it’s not,” said Al Pscholka, a former state budget director under Snyder. “The general fund budget is slightly more than $10 billion (and) … under some significant stress.” The fiscal strain on the general fund budget is largely due to a legislatively mandated earmark of $600 million for road and bridge repairs under a deal Snyder accepted with Republican lawmakers in 2015, Pscholka said. Other demands for general fund money include the state’s share of the 680,000 low-income adults enrolled in the Healthy Michigan expanded Medicaid program as well as a new state-level commitment to fund indigent defense, Pscholka said. “There are some general fund stressors,” said Pscholka, a former state legislator who chaired the House Appropriations Committee from 2015-2016. “But a billion dollars out of the general fund is a big hit.” Snyder is leaving office at year’s end with a balanced budget and just over $1 billion in the state’s rainy day fund, which had just $2.2 million in cash on hand when he became governor in 2011. Whether Schuette or Whitmer becomes the next governor, they’re “not going to have a big deficit coming in,” Pscholka said. “But it sounds like they may want to create one.”

Line 5

Education

Auto insurance

Opposes legalization and worked to shut down medical marijuana dispensaries as attorney general.

Has called for a “common sense” timeline for decommissioning Line 5.

Has said he is open to shifting $900 million in spending on higher education in the School Aid budget back to the general fund. Has said getting children to read at grade level will be a top priority.

Has voiced support for allowing drivers to opt out of unlimited medical coverage in their auto insurance plans in exchange for rate reductions. He has advocated for tort reforms to rein in the number of first-party over medical benefits for injured drivers.

Supports the Proposal 1 question on the Nov. 6 ballot to legalize marijuana for recreational purposes.

Wants to revoke the state’s easement in the Straits of Mackinac that allows Enbridge Energy to operate its Line 5 oil pipelines along the bed of Lake Michigan. An end of the property easement would eventually lead to shutting down Line 5.

Wants to shift $900 million in spending on higher education in the School Aid budget back to the general fund. Wants to repeal the third-grade reading mandate.

Opposes ending lifetime medical benefits for any catastrophically injured drivers. She also wants to bar insurers from using non-driving factors such as credit score, ZIP code, gender, marital status and education level for setting auto insurance premiums.

— By Chad Livengood

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Consumers, GM rev up electric vehicle technology plans By Jay Greene jgreene@crain.com

Consumers Energy Co. plans to move more quickly than previously announced to develop infrastructure for electric vehicles by buying or leasing more than 100 sedans from General Motors Co. for its employees, CEO Patti Poppe said last week. Earlier this year, Consumers and GM announced they would form a partnership to test smart charging for electric vehicle owners, Crain’s reported. Consumers and GM filed a plan in May with the Michigan Public Service Commission. “Electric vehicles are ready for the fast lane, and Consumers Energy wants to support this technology for the good of Michigan and our planet,” Poppe said in a statement. “Electric vehicles will reduce our carbon footprint, supporting our company’s Clean Energy Plan to already cut carbon emissions from our power plants in the next two decades.” GM official Dane Parker said the Detroit-based automaker envisions a strong future for electric vehicles. “GM’s vision is for an all-electric future with zero crashes, zero emissions and zero congestion,” Parker, vice president for sustainable workplaces, said in a statement. “We’re honored to have such strong partners at Consumers Energy who share our commitment to provide more sustainable solutions for everyone.” In a nutshell, here is Consumer’s electric vehicle plan: JJOver the next five years, Consumers Energy expects to replace more than 100 sedans with electric vehicles it will purchase or lease. JJConsumers Energy and General Motors will work together to test new technology that allows owners to plug in their electric vehicles at home and delay charging to start until overnight hours. Consumers Energy offers rates specifically for electric vehicle owners to encourage charging in off-peak hours, when there’s less demand for electricity from the grid. JJConsumers Energy is developing a $7.5 million effort over three years to encourage the development of EV charging stations across Michigan. That would include rebates for charging stations in people’s homes, at their workplaces and along major thoroughfares. DTE Energy Co. also in July filed an EV plan with the MPSC in which it plans to work with Ford Motor Co. on expanding charging stations. Last year, the Edison Electric Institute and Institute for Electric Innovation forecast up to 7 million electric vehicles will be traveling on U.S. roads by the end of 2025. “It’s important to see Michigan companies like Consumers Energy and General Motors take such significant steps to promote electric vehicles here in our state,” Liesl Clark, president of the Michigan Energy Innovation Business Council, said in a statement. “We need to drive Michigan’s advanced mobility industry to build a road to a bright future for Michigan’s economy and environment.” In 2017, the MPSC began to look at potential impacts to the state’s electric grid as growth of electric vehicles begin to ramp up. There are now about 12,500-15,000 EVs in Michigan, which is ranked 10th in national EV sales as of 2017. By 2030, industry estimates are that EV sales will grow 150,000800,000 EVs in Michigan. EVs includes all electric vehicles, including plug-in

hybrids and battery vehicles. Jackson-based Consumers Energy and Detroit-based DTE Energy plan to phase out the use of coal to generate electricity by 2040 and cut carbon emissions by at least 90 percent over the next two decades. Consumers plans to encourage electric vehicle use by granting a $500 rebate per vehicle for customers who install residential-based charging stations. Rebates in other states range from $250 in Georgia to $1,500 in California. For public charging stations at businesses or housing complexes, Consumers would offer rebates up to $5,000 per charger for installation of

Level 2 chargers, which are speedier than home-based units. The rebates are designed to cover about onethird of installation costs. Rebates will be limited to 200 charging stations for a total cost of $1 million over the three years of the program. Finally, Consumers also envisions installation of charging stations at commercial locations, similar to gasoline stations, and plans to provide rebates up to $70,000 per charger. The number would be limited to 24 fast chargers in Consumers’ market territory. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

SAVINGS

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The city of Sterling Heights is proposing a redevelopment of Lakeside Mall in Macomb County. This site plan shows the shopping center intact with residential and commercial space built around it.

Lakeside Mall redevelopment ideas revealed as ‘downtown-esque’ By Kurt Nagl knagl@crain.com

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

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The city of Sterling Heights is engaging developers and drawing up new zoning at Lakeside Mall as it prepares for the demise of the traditional brickand-mortar shopping center in favor of a “downtown-esque” city center. Officials are set to unveil to the public Thursday evening two new concepts that could take over the sprawling 1.5 millionsquare-foot mall on Hall Road between Hayes and Schoenherr roads, Sterling Heights Mayor Michael Taylor said. Michael Taylor: Urban design Process could plans for the take 10-15 years. Lakeside Mall District include two concepts. The first keeps the fully-enclosed mall largely intact and surrounds it with public, residential, medical and office space. The second takes a wrecking ball to the concrete behemoth built in 1976 and replaces it with more of a ground-up redevelopment. Neither are set in stone, but the city wants to make its vision for the site clear, Taylor said. “We’ve known for many years that shopping habits were changing and that Lakeside was losing market share,” he said. “We knew that if we didn’t act, the mall would slowly die and become a big blight to our city.” Luke Bonner, senior economic development adviser for the city, said the redevelopment is being looked at as an evolution, where the mall site could soon see mixed-use activation before eventually being transformed into a city center. Taylor said the redevelopment would cost in the “hundreds of millions of dollars” and could take as long as 10-15 years to happen. The city is taking steps to speed up the process. Officials are aiming to amend the city’s ordinance no later than the beginning of next year and are hoping to have viable redevelopment proposals in front of city council in the next couple months. “There are a number of real estate developers that have shown interest, but none of them have really said that

The city of Sterling Heights is proposing bold redevelopment plans for the sprawling Lakeside Mall.

Need to know

 Two concepts unveiled to redevelop 1.5 million-square-foot mall in Macomb County  City to change zoning, develop incentives package for redevelopment  Project would cost “hundreds of millions of dollars”

they are committed to putting money to this because I think they’re curious to see what we do,” Taylor said. City officials say they have support of the mall owners, but the ownership structure of the property complicates redevelopment discussions. It had been owned by Chicago-based General Growth Properties until the real estate investment firm defaulted in 2016 on a $144 million loan. The property was then transferred to C-III Capital Partners LLC, a New York-based firm that handles distresses properties. The mall is being managed by Chicago-based JLL Inc., which has offices in metro Detroit. Messages left Thursday with the mall owner were not immediately returned. C-III Capital Partners isn’t interested in long-term ownership, Taylor said. What it has planned for the mall, i.e. to whom it would sell or how it intends to market it, remains in question. Additionally, the big-box spaces at the mall — Sears, Lord & Taylor, J.C. Penney and two Macy’s stores — are owned independently. Sears officially closed its 325,000-square-foot store at the mall earlier this month. It was the impetus for getting serious on survival plans in a future where retail will likely look a lot different, City Manager Mike Vanderpool said. The city began exploring redevelopment several years ago as it

watched other area shopping centers, such as Summit Place Mall and Northland Center, close up shop. The troubled Eastland Center goes to auction next month, and the city of Harper Woods is proposing to move its civic center there. The Lakeside proposals aren’t meant to raise alarms, Bonner said. “The mall is still open, and it still has plenty of tenants,” he said. Even if not in its current form, the site oozes with promise for return on investment given its position at the center of Macomb County on one of the most successful commercial corridors in the state, he said. Besides The Mall at Partridge Creek, which saw department store Carson’s close this summer, Lakeside is the only traditional mall in the area. Owned by Chicago-based Starwood Retail Partners, Partridge Creek’s outdoor gathering space model has generally fared better than enclosed malls. Spokeswoman Christina Bachmann said the mall is in discussions with potential tenants and the Carson’s space will be filled soon. Sterling Heights is showing “it has skin in the game” by consulting with commercial real estate brokers, consultants and design architects, Taylor said. Detroit-based Wade Trim Associates developed the new site plans. They will be displayed 6-7:30 p.m. Thursday at Velocity Collaboration Center, 6633 18 Mile Road, in Sterling Heights. The city is also looking at various incentives to lure developers, including property tax abatement, brownfield tax incentives and funds through the state-enabled Corridor Improvement Authority. While certainly a daunting and tricky undertaking, overhauling massive shopping malls isn’t unprecedented. Taylor said the city and partners are looking to a mall in Colorado called Belmar, now owned by Starwood, that completed a successful $850 million redevelopment 15 years ago and gave the city of Lakewood an official downtown. He said he envisions the same for Sterling Heights. “We’re not the ones taking the risk, but we’ll be reaping the benefits, and that’s why we want to make it as turnkey as possible for developers,” Taylor said. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

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$2 BILLION DOLLAR QUESTION

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KEYNOTE SPEAKER ERIC HIPPLE, DIRECTOR OF OUTREACH, AFTER THE IMPACT FUND FORMER DETROIT LIONS QUARTERBACK

Keynote speaker and former Detroit Lions quarterback Eric Hipple will talk about the personal experiences that led him to become a mental health advocate, as well as his work with athletes to help them care for their whole selves – teaching them to understand the role that mental health plays in recovering from physical injuries.

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CALENDAR

SPOTLIGHT

TUESDAY, OCT. 2

4111; website: TimesTalks.com

Detroit: The Battle for Driverless Cars with Lyft, Ford and More. 6:30-7:30 p.m. The New York Times. New York Times deputy managing editor Rebecca Blumenstein talks about the rivalry for self-driving vehicle dominance. Speakers include: Kevin Johnson, president and CEO of Detroit Economic Growth Corp.; Raj Kapoor, chief strategy officer at Lyft; Sherif Marakby, president and CEO of Ford Autonomous Vehicles; Michigan Gov. Rick Snyder. $20. Gem Theater. Email: TimesTalks@ nytimes.com; phone: (866) 811-

WEDNESDAY, OCT. 3 Entrepreneur and Small Business Conference: Small Business Doing Big Business. 9 a.m.-4 p.m. National Entrepreneurs Association. Event will focus on specific strategies entrepreneurs can implement to scale and generate larger profit margins. Topics include working with corporations, government contracting, joint ventures, funding large projects and digital marketing. Speakers include, Joe Anderson, chairman and CEO, Tag Holdings LLC; Alina Morse, founder,

Zollipops; Rochelle Riley, author and columnist, Detroit Free Press and Dawn Verbrigghe, digital marketer and founder, Jottful. Lawrence Technological University. $97. Contact: ZaLonya Allen, email: supportstaff@ nationalentrepreneurs.org; website: nationalentrepreneurs.org Connecting People by Embracing Civility and Living by the Golden Rule. 11:30 a.m.-1:30 p.m. Detroit Economic Club. Gary Kelly, chairman and CEO, Southwest Airlines Co., talks about how hospitality and commitment to civility contribute to success. The Masonic. $45 members,

$55 guests of members. Website: econclub.org

UPCOMING EVENTS Reintroducing Wayne State University: Transformation After 150 Years in the Heart of Detroit. 11:30 a.m.-1:30 p.m. Oct. 9. Detroit Economic Club. Wayne State University President Dr. M. Roy Wilson will share his perspectives on the importance of universities and on the transformation of Wayne State. Westin Book Cadillac. $45 members, $55 guests of members. Website: econclub.org

ADVERTISING SECTION

DEALS & DETAILS

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

MERGERS & ACQUISITIONS

ARCHITECTURE/ ENGINEERING Sharon Woodworth Harley Ellis Devereaux (HED) Architect, clinician, author, and educator Sharon Woodworth, FAIA, ACHA, has joined the San Francisco office of architecture and engineering firm Harley Ellis Devereaux (HED) co-leading the national healthcare design practice as Studio Leader. Woodworth has two decades of healthcare architectural experience. Her nurse-turned-architect perspective on the care environment includes the latest research on stakeholder engagement, planning efficiencies, wellness, and evidence-based design.

INSURANCE & FINANCIAL SERVICES Stephen N. McCain, REBC, RHU Creative Benefit Solutions Creative Benefit Solutions (CBS, Troy) has appointed Stephen McCain as a Partner. Steve brings 28 years of employee benefits consulting experience to the firm. He specializes in the development, implementation, and service of customdesigned benefit plans and HR solutions. Steve is excited to be an integral part of the Executive Management Team, as CBS celebrates its 30th anniversary. He looks forward to contributing to the company’s continued growth, success, and client-focused culture.

AUTOMOTIVE Sylvain Puginier Varroc Lighting Systems Varroc Lighting Systems, a leading global supplier of innovative exterior vehicle lighting systems, has appointed Sylvain Puginier as Senior Vice President of Global Purchasing, MP&L, and Supplier Performance. Additionally, he will also have oversight of the company’s recently announced electronics joint venture. Puginier spent majority of his career at Valeo Lighting Systems in purchasing roles, most recently as Purchasing Director for the Valeo Lighting Systems product group.

NONPROFITS Kelly RossmanMcKinney The Nature Conservancy As a principal at Truscott Rossman, Rossman-McKinney will bring issues management and communications expertise to the Conservancy. She is deeply committed to community service and lives by the adage “the more you get, the more you give.” She chairs the Michigan Chamber Foundation and serves on several other boards.

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

J Helm Inc., Plymouth Township, a promotional products provider, has been acquired by Banyan Technologies Group, Dallas, Texas, a capital investor. Websites: helm.com, banyantechnology.com J American House Senior Living Communities, Southfield, provider of housing for senior citizens, acquired a 100-unit property in Macedonia, Ohio, from Vista Springs, Grand Rapids, owner of senior citizen care facilities. Vista Springs owns four senior care communities in Ohio and nine in Michigan. American House operates more than 50 communities in the Midwest and Florida. Websites: americanhouse. com, vistaspringsliving.com

CONTRACTS J BorgWarner Inc., Auburn Hills, an automotive supplier, is providing an electric drive module to Great Wall Motors, Baoding, China, an automaker, for the 2018 C30 electric vehicle and the brand ORA. Also, BorgWarner has been selected to supply its on-axis P2 drive module and electro-hydraulic control unit for hybrid-electric vehicles to two Chinese auto suppliers. Website: borgwarner.com, gwm-global.com J Meritor Inc., Troy, a commercial truck supplier, expanded its North America Authorized Rebuilder Program for drive axle carriers in the United States to include: Drivetrain Service & Components Inc., Chicago; TransAxle and TRC, Cinnaminson, N.J.; Anderson Brothers Inc., Portland, Ore.; Truck Gears Inc., Los Alamitos, Calif. and General Truck Parts & Equipment, Apple Valley, Minn. The total number North America locations is now 62. Also, Meritor announced 11 independent repair facilities in eight states are approved service partners of the Meritor Service Point program, bringing the total number of member shops to 30 nationwide. The shops include: A&A Truck Stop, Jackson, Ohio; D-Tire and Lube Center, San Antonio, Texas; David’s Towing, Newport News, Va.; 1st Choice Truck Service Inc., Fernley and Sparks, Nev.; Gulf Coast Drivetrain, Spanish Fort, Ala.; Jolly Truck & Trailer Service, Wichita Falls, Texas; M&M Tire & Mechanical Services Inc., Graysville, Ala.; Merritt’s Truck &

Auto Repair, Kokomo, Ind.; TDI Truck Repair and Towing, Swanton, Vt.; Winchester Truck Repair, Winchester, Va. and CFS Quick Lube, Greensboro, N.C. Website: meritor.com

EXPANSIONS J U.S. Army Tank Automotive Research, Development and Engineering Center, Warren, Merit Network, a nonprofit governed by Michigan’s public universities, and the Michigan Defense Center, an operation of the Michigan Economic Development Corp. focused on Michigan’s defense and homeland security and the Michigan defense contractor businesses, opened the TARDEC Cyber Hub as part of the Michigan Cyber Range. The Michigan Cyber Range offers cyber exercises, product testing, digital forensics and professional certifications based on the National Initiative for Cybersecurity Education framework. The new hub will allow TARDEC employees to access learning and certification and live security attack and defense exercises. Websites: tardec. army.mil, merit.edu/cyberrange, arsenalofinnovation.com J DriverSource Inc., Dearborn, a truck driver recruiter, has opened in Burr Ridge, Ill. Website: driversource. net

NAME CHANGES J In-House Realty, Detroit, a subsidiary of Rock Holdings Inc. and a provider of real estate services, has changed its name to Rocket Homes. Website: RocketHomes.com

NEW PRODUCTS J C & B Machinery, Brighton, provider of disc grinding systems, is now offering a higher speed grinding spindle for customers using Cubic Boron Nitride grinding wheels. Website: cbmachinery.com J PaperlessForms Inc., Southfield, provider of digital documents and forms, introduced a form tool to migrate paper documents to digital forms including electronic signature. The PaperlessForms form-builder tool is a spin-off of MyCDLapp.com, a document management product used in the transportation industry. Website: paperlessforms.com

Submit Deals & Details items to cdbdepartments.com

Metro Detroit YMCA CEO to retire

Scott Landry, president and CEO of the YMCA of Metropolitan Detroit, plans to retire at year’s end, capping a 31year career with the nonprofit. The YMCA board of directors has formed a search committee led by Scott Landry Wayne County Circuit Judge David Allen to identify Landry’s successor, working with representatives of the YMCA of the USA to conduct a national search. As president and CEO for the past four years, Landry, 60, has expanded community-based programs offered by the YMCA in the region, securing dedicated grant and contract funding when memberships failed to pick up at the YMCA branches in the region. Among the programs added during Landry’s tenure are: Detroit Swims, which teaches kids to swim for free; and Girls on the Run, which helps girls age 8-13 prepare for a 5K run, along with self-esteem, anti-bullying and teamwork lessons.

Longtime Ford finance whiz Schloss to retire

Neil Schloss, who helped Ford Motor Co. avoid bankruptcy during the Great Recession and became CFO of the automaker’s mobility arm, plans to retire at the end of D e c e m b e r, Ford said Thursday. Schloss, 59, has spent 36 Neil Schloss years at Dearborn-based Ford and served in a number of financial roles, including a decade as treasurer. He most notably helped the automaker secure a $23 billion loan in 2006 by mortgaging most of its assets to help survive the economic downturn. Then in 2009, Schloss led a creative debt buyback plan that cleared $10.5 billion off Ford’s books for $3.5 billion in cash and equity. In 2016, he became the founding CFO of Ford’s mobility unit, which was created to explore and invest in mobility services, information technology and global data insight and analytics. Ford said it would name a successor at a later date. “For almost four decades, Neil has played an important role in driving our business forward,” Ford CEO Jim Hackett said in a statement. “It was appropriate that he finish his career at Ford by helping to start the businesses that will be core to our future.”

October 1, 2018

COTTON FROM PAGE 1

Sean, Jon’s twin brother, and Michael, 38, are taking time off and have not yet made firm business plans. Shery Cotton and David Cotton, who was chief of obstetrics and gynecology at Detroit Medical Center before founding the Medicaid HMO company under the original name of Health Plan of Michigan, have retired but plan to stay involved in charitable activities in Southeast Michigan, Jon Cotton said. Jon Cotton was a 2015 Crain’s Newsmaker of the Year for helping to guide Meridian’s Medicaid health plans in Michigan and Illinois to become the largest in each state. “People said ‘My God, you are not taking a vacation?’ ” before starting up Apex, said Jon Cotton, pausing a second as any good stand-up would do to deliver the punchline: “I did. It was the Labor day weekend.” Cotton, a high-energy individual who along with Michael has a black belt in Taekwondo, noted he has worked at Meridian for nearly half his life. “It’s all I know,” he deadpanned. “We do what competitors aren’t doing. We are high-touch, member-friendly. I have huge satisfaction in what we do.” Some of that Meridian “we” is coming with Cotton. He hired three former Meridian employees to help with his startup. Ray Pitera will be chief development officer and senior vice president, similar titles to those he held at Meridian. Danielle Devine is vice president of operations. And longtime administrative assistant Sara Terrio will be there, too. “My wife said I needed to hire Sara or not come home,” he said. For now, Apex is in temporary digs at a former rug shop in a 900-squarefoot office with one bathroom at 92 Kercheval Ave. But that will be only for about five months until renovations are completed next door at 96 Kercheval. “My dad saw the location and cried. He said it was perfect. It was so much like his first office” in 1997, said Cotton, adding that he furnished the office with old Meridian furniture handpicked by current staff before the movers arrived. With that staff of three, Cotton says he has more responsibilities than before. “I empty the trash can now.” The other change is his new drive time. “I now have a 45-second commute” from his home in Grosse Pointe Farms, he said. “I am at work at 8:15 every morning, right after I drop my kids off at school.” The office amenities are of little importance yet, because it will take some time before Apex gets individual state approvals for Medicare Advantage plans in North Carolina, South Carolina, Virginia and Tennessee. “We were looking at those states prior to the sale, so it was a natural to go there,” he said. “We have done our homework. We have relationships there.” After that, Apex will need Medicare licenses from the federal Centers for Medicare and Medicaid Services, mostly likely next February, but won’t start signing up members until January 2020. The family has a five-year noncompete in Michigan, Illinois, Indiana and Ohio, Cotton said. Cotton said he is projecting modest first-year membership of 5,000 to 8,000 and a workforce of about 40 at the Grosse Pointe Farms office. He

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said more than a dozen more employees will be needed in the four states to work with providers. “My dad was groundbreaking in that. Provider network development was a big thing, working with doctors, talking about quality of health care,” Cotton said. “We plan to bring the same approach Dad started at Meridian.”

Surprise sale of Meridian Many were surprised when they heard in early June that the Cottons planned to sell Meridian, the state’s largest Medicaid health plan, to Tampa-based WellCare Health Plans Inc. The Cottons had long expressed a strong commitment to being a major force in Detroit for many years. In a statement, David Cotton explained the sale this way: “WellCare’s unwavering commitment to improving the lives of its members makes it an ideal partner. Our similar missions, values and goals combined with WellCare’s dedication to providing an unparalleled member experience, including access to high quality health care, were key factors in our decision.” Jon Cotton told Crain’s for a previous story that after some difficult discussions the family decided to sell the company last summer when it became clear it needed additional financing to continue to grow and manage an ever-expanding Medicare and financially risky Medicaid patient population. Meridian was a powerful economic force in downtown Detroit and ranked fourth on Crain’s Private 200 list of largest privately held companies in metro Detroit with $3.8 billion in revenue in 2017. It projected revenue of $4.3 billion this year. “We closed on the 30th of August. We walked through each floor, saying goodbye to everybody. It took a lot of time and was very emotional. Everybody was bawling. ... Meridian was the fourth child of the family.” Jon Cotton said he started working part-time with his father while he was in college at DePaul University in the late 1990s, then joined the company full-time in 2000 as a staff accountant. But he said it was a little better starting job than his younger brother, Michael, who started out in the maintenance department and later became Meridian’s COO. “I worked and traveled with my dad. ... We went door to door to make pitches to primary care physician offices,” Jon Cotton said. “I remember we stopped at a primary care office. She had nine Medicaid members, and when we signed her up, we thought it was a big win for us.” More than three decades later, Meridian’s nearly 1.1 million Medicaid members in Michigan and Illinois bring WellCare’s membership to 5.4 million, including 4.3 million Medicaid members. It operates in 11 Medicaid managed care states and 18 Medicare Advantage states. WellCare officials have told Crain’s they plan to hire more people in Detroit to support Michigan and its regional operations.

Looking forward Jon Cotton said the family will split the $2.5 billion purchase price by WellCare after bank loans, taxes and other expenses are paid. “We each owned 20 percent” of the company, he said. “Mom and Dad have retired. They will look at investments and charity work. Sean and Michael are taking some time off.” Jon Cotton, who also is involved with his brothers in the Grosse Pointe

Housing Authority that encourages people to move to the city, said the family is looking at “a lot of opportunities” in Detroit and in greater Southeast Michigan. “Dan Gilbert (CEO of Bedrock LLC) texted us and asked if we would stay involved with Detroit,” he said. “We said we would do the same” as before in supporting civic and charitable causes. For example, the Cottons are setting up a family foundation “that will help determine how we will give back to the community,” Cotton said. “A lot of people (investors and charities) have been calling a lot asking us what we will do,” said Cotton, who also is an adviser at Amherst Partners, a financial advisory firm in Birmingham. “We are taking it slow and want to be able to do it the right way.” Since 2011, the Cotton family has purchased a number of businesses and buildings along Kercheval Street in Grosse Pointe Park for a major retail, dining and entertainment district. Jon Cotton said those plans are still active, and more investments are pending. In a previous interview, Jon Cotton told Crain’s that the family would like to see downtown Grosse Pointe Park develop into an entertainment district similar to Royal Oak or Birmingham. “We’re losing people to those areas because they want that urban, walkable area.” As major hospital donors, the Cottons also funded in 2008 the creation of the Cotton Family Medical Library in the medical office building of St. John Providence Park Hospital in Novi. In 2011, the Shery L. & David B. Cotton M.D. Family Birth Center opened at Beaumont Hospital in Grosse Pointe. “We will continue to contribute to the community. We aren’t going anywhere,” Jon Cotton said. Most observers contacted by Crain’s believe that will happen because the Cottons see Detroit and its environs as the family’s home. Sean Cotton recalled in a letter that he remembers “like it was yesterday when my family from California moved here by way of Houston in the summer of 1991. ... (We) fell in love with this city and the way of life here. We stayed because we believed. ... “ Susan Moore, a quality consultant and president of Ortonville-based Managed Healthcare Resources who has known the family since the mid1990s, said the Cottons are caring business owners and dedicated community supporters. She is one of several people contacted by Crain’s who believe the Cottons will give back to the communities of Michigan. “David Cotton is a bright physician who was savvy enough to build a health plan infrastructure from the ground up that would make the state, providers and members happy,” said Moore, who helped the Cottons gain their health plan license back in 1997 and win accreditation with the National Committee for Quality Assurance. As a small business owner herself, Moore said she never had a problem with the Cottons making millions off of Medicaid because he ensured the public received quality health care. “It would be a travesty if he didn’t invest back into Michigan charitable work that promoted giving a hand to people to get off public assistance to help them make something of themselves. There are many cracks in the system that prevent people from moving out of poverty, and filling those cracks would be a great legacy.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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JOB FRONT POSITIONS AVAILABLE HARMAN CONNECTED SERVICES - PRINCIPAL S/W ENG (JOB CODE PSE-J-001) The Principal S/W Eng (Job Code PSE-J-001) responsible for 1. Dev of android speci feat and custom 2. Debug and troubleshoot issues across all the layers of the android device stack from low-level components to user Appli 3. Perfor optimizations of Cust appli 4. Research and implementation of architecture desg on server side for continuous deployment, appli builds, API and other commu b/w Cust appli and different server-side services 5. Commun with other teams involved in project 6. Design, imple, support and maintenance of user-level, system-level android appli, android framework, linux kernel and drivers for android devices, board support package (BSP) for android devices (phones, watches, tvs). 7. Design of server-side components such as web applications and REST services, including containers loadbalancing, queues and caching. Elig• Bachelor’s degree or (Foreign Equivalent) in Comp Eng or Information Tech or related with mini 6 years of IT industry exp. We also accept degree equivalent to US Bachelors issued by Education Evaluation agency • Alternate Masters or (Foreign equivalent) in Comp Eng or Information Tech or related with minimum 4+years of IT industry exp. We also accept degree equivalent to US Masters issued by Education Evaluation agency. Additional Requirement • Should be well versed with Java, Kotlin, Android (Migrate applications to Android O, write system level applications), Android Studio • Build tools: Git, Bitbucket, Gradle, Jenkins, Python, Bash, Ksh • Android native code debugging: NDK, valgrind, gdb, C, Assembly for ARM CPUs • Server side services development: Ansible, Docker, Apache Tomcat, Apache, Nginx • Protocols: HTTP, SSL/TLS • Databases: Oracle, SQL, Redis • Environment: Linux, Mac • Processes: Agile, Scrum/Kanban. Please send resumes to Harman Connected Services Inc, Attn: Mahesh G M/Job Code PSE-J-001, 2002 156th Avenue NE #200, Bellevue, WA 98007. Work location: Novi, MI

WEBASTO ROOF SYSTEMS, INC., TIER-1 SUPPLIER OF VEHICLE SUNROOF SYSTEMS SEEKS HEAD OF CONTROLLING Position available in Rochester Hills, MI, to lead central controll’g funct’n for N. American ops. Posit’n has responsibility for financial plann’g & analysis based on IFRS to incl mgmt of & report’g on region-wide P&L & cashflow forecast’g, program & project controll’g, R&D & tooling controll’g, purchase controll’g, KPI track’g, strategic projects & financial business cases for vehicle sunroofs. Duties: apply IFRS account’g principles to analyze deviat’n & variances in actual cost & income; develop Excel-based financial plann’g & analysis models for accurate regional forecast’g; perform regional cost account’g based on IFRS principles in alignm’t w/ matrix org; financial mgmt of acquisit’n project quotes & eng’g changes for vehicle sunroof systems; monthly presentat’ns & report’g of financials for acquisit’n & project developm’t; support harmonizat’n of projects to align customer quot’g, expense track’g & allocat’n for global sunroof programs; financial mgmt of R&D test’g & tool’g expenses; collaborate w/ R&D for financial plann’g of vehicle sunroof systems; report financial KPIs; itemize & report KPIs for vehicle sunroof systems to improve sunroof mfg processes; validat’n of sunroof compon’ts & mfg costs. Min edu req: Bach in Business Administrat’n or foreign equiv. To establish equivalence to Bach in Business Administrat’n will accept 3 yr of post-secondary edu in Business Administrat’n + 1 yr exp in financial or controll’g posit’n. Min exp req: 2 yr exp in controll’g posit’n w/ Tier-1 auto supplier. Special skills req: Must have 2 yr exp in each of follow’g: app of IFRS account’g principles for Tier-1 auto supplier; calculat’n of vehicle sunroof project cost for customer quotat’n; validat’n of sunroof product’n costs incl labor, tool’g, equipm’t & eng’g costs; track’g & reconcil’g project cost & profitability for vehicle sunroofs thru all customer milestones fr acquisit’n to start of product’n. Exp may be acquired concurrently. Resume to Webasto Roof Systems, Inc., Attn: Patricia Abbott, 1757 Northfield Dr, Rochester Hills, MI 48309, or apply online at www.webasto.com (Requisition ID 1027). EOE. Employer Pd. Ad.

MERCEDES-BENZ RESEARCH & DEVELOPMENT NORTH AMERICA, INC. Mercedes-Benz Research & Development North America, Inc. in Ann Arbor, MI is seeking an Engineer, OBD Calibration to calibrate On-Board Diagnostics (OBD) system for gasoline engines (direct injection (GDI), port injected (PFI), turbocharged and naturally aspirated). Job code: MT-AAMI. Mail resume: Attn: HR Dept, 309 N Pastoria Ave., Sunnyvale, CA 94085. Must reference job title and job code.

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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 // O C T O B E R 1 , 2 0 1 8

Detroit Children’s Fund working to open new schools By Kurt Nagl knagl@crain.com

The Detroit Children’s Fund is in talks with the Detroit Public Schools Community District to open new schools in the city as a solution to poor-quality schools already there. The move would bring the nonprofit closer to achieving its goal of elevating one-third of all public and charter schools in the city to “good quality” status by 2025 – an $85 million to $100 million undertaking, Jack Elsey, executive director of the nonprofit, said during a media roundtable Wednesday. Establishing new schools is one of the next major focus areas for the or-

ganization, which awarded a $5 million grant to Detroit charter school New Paradigm for Education last year and debuted a talent development program in March. “We see improving school quality in Detroit as a generational issue,” Elsey said. “We think families are not moving to Detroit because they don’t see hope in the schools.” Elsey said the foundation plans to help open one or two new schools under DPSCD in the next year, in addition to the $50 million “cradle-to-college” center planned at Marygrove, which the foundation is also supporting. Establishing new schools, in exist-

ing buildings or from the ground up, will be an ongoing effort. “We think there are some great ideas to start new schools that have the opportunity to get off on the right foot, that have great resources … that are attractive to families,” Elsey said. He declined to give a figure for investment in the new schools, saying it would vary from project to project. He said discussions with Superintendent Nikolai Vitti and the district are still developing. “We’re not going to drive the (DPSCD) strategy,” he said. “We’re going to support it.” The fund’s overall goal is increasing the quality — as defined by the newly

created Community Education Commission — of all 194 public and charter schools in the city. The commission was created by the mayor’s office this year and measures quality by how much a school improves its M-STEP scores year over year. Using recent poor test scores as the metric, only one in 10 schools in the city are administering a quality education. Elsey said the foundation splits its investment between public schools and nonprofit charter schools evenly. It does not invest in for-profit charter schools. Looking to high-performing school districts in Denver and Washington, D.C., as models, the foundation’s main areas

of investment are talent, schools, enabling conditions and innovation, according to a news release. While there is “no silver bullet for addressing educational issues in Detroit,” Elsey said, he believes the timing is right due to strong leadership of the city and the school district, as well as overall investment in the city. As of last October, the fund had raised nearly $16 million. Elsey said in March that he expected to raise between $8 million and $10 million more this year. The nonprofit’s fundraising dinner is Saturday at the Detroit Public Library, where it will announce that it has exceeded expectation goals, Elsey said.

EAST SIDE FROM PAGE 1

The city is still owed $19,300, the city says. The total project area envisioned nearly 15 years ago was bounded by Jefferson Avenue to the south, Alter Road to the east, Warren Avenue to the north and Conner Street to the west. It was anticipated to be done in phases, with the first Fox Creek phase consisting of properties totaling about 140 acres generally bounded by East Vernor Highway, Alter, East Jefferson and Eastlawn Street. It’s Eastlawn where the piano and trash have accumulated, one of the few signs of activity on a largely vacant street. Melvin Washington, managing member of New Far East Side and president and founder of Detroit-based Phoenix Group Cos., did not return multiple messages seeking comment. Linda Smith, another one-time investor who is the longtime head of Detroit-based housing nonprofit U-SNAP-BAC Inc., deferred most comment to Washington. David Hill, the late head of Kimball Hill Homes, died in 2008. The Chicago-area home developer was liquidated in bankruptcy the following year. And Henry Cisneros, a former Clinton-era cabinet secretary, said he and Smith have long since sold off their interest in the project.

‘Quadruple whammy’

The New Far East Side development area, 2004

More than a decade ago, a group of investors planned to redevelop the area in dark blue with thousands of homes in an investment of more than $250 million. It was to be completed in phases, the first of which is in light blue. The development never happened.

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External factors ultimately doomed the effort, said Cisneros, one of the project’s four main investors in 2004-05 and a former U.S. Department of Housing and Urban Development secretary, in an interview with Crain’s last week. He said he and Smith had no knowledge of the blight violations or debt. The investors ran into a series of “buzz saws” they did not anticipate, not the least of which was Hill’s death from a brain tumor. “We got hit by a quadruple whammy,” Cisneros said. That included the city’s worsening financial condition, the bankruptcy of General Motors, Hill’s death and the downfall of Mayor Kwame Kilpatrick and his administration. “We had a very well thought-out plan to build housing in the far east side area of Detroit,” Cisneros said. “We were well down the road in terms of planning, neighborhood meetings, city administration meetings and design of homes.” Not so fast, said Paul Robertson, chairman of Bloomfield Hills-based homebuilder Robertson Bros. “In 2004, no friggin’ way” would

KIRK PINHO/CRAIN’S DETROIT BUSINESS

Trash has accumulated on Eastlawn Street, where roughly 3,000 homes were proposed for the area bounded by Jefferson Avenue to the south, Alter Road to the east, Warren Avenue to the north and Conner Street to the west.

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that project have worked, he said. “Single-family on the east side as opposed to something downtown was worthless. There was no way, unless they had gobs and gobs and gobs and gobs of government subsidies.”

Exploring options

Linda Smith has questions. “It’s still an LLC. I just don’t have any update,” she said before deferring any remaining comment to Washington. Multiple messages were left and not returned.

“The city expended a lot of resources in conveying the property and making it ready for development. However, the developer broke the promise to develop the land.” — Lawrence Garcia, Detroit’s corporation counsel

Andre Spivey also has questions. “I need to know from the city’s perspective, what are our options, if any, because it’s a large plot of land and I would hate for it to sit there with nothing being done,” said the Detroit City Council member whose district encompasses the area. “The city was promised a large project on this property,” said Lawrence Garcia, the city’s corporation counsel, in a statement. “The city expended a lot of resources in conveying the property and making it ready for development. However, the developer broke the promise to develop the land. The city is exploring its op-

tions for seeking redress of the broken promise, but at this time, but it does not appear to have rights to reversion of ownership under the master agreement for the project.”

City’s hands tied

For now, the Duggan administration says, its hands are largely tied. Development agreements with New Far East Side Development from 2004 and 2005 don’t have reversionary language, meaning the city can’t take back the land in spite of the broken agreement. In all, the city sold the group about 660 properties between October 2006 and February 2009, according to a memo provided to the City Council last month. Another 481 properties were purchased privately. Today, city records show the group still owns 530 properties, having spent nearly $3.3 million on them. The land is valued at just $735,000, according to city data. “In 2004, a single-family project on the east side, there was just no way,” Robertson said. “There was just no way. Your costs were more than anybody would ever give you in sales price.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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

LABOR FROM PAGE 1

There’s no indication that labor unions are gaining enough members to result in a return to strike levels in decades past, Bleakley said. Labor strikes involving more than 1,000 workers have been in a freefall since the peak in 1974 with 424 strikes involving nearly 1.8 million workers, according to data from the labor bureau. There haven’t been more than 100 strikes in any year in the U.S. since 1981 and that hit a low point during the recession in 2009, with just five strikes involving 13,000 workers. There have been only 111 strikes across the country since coming out of the recession in 2010. Last year, there were only seven strikes involving 25,000 workers total. “There are always going to be work stoppages, but strikes are a rarely invoked weapon these days,” said Marick Masters, director of Wayne

State University’s labor studies program Labor@Wayne and professor of business and political science. “This is reflective of a major shift in the broader environment.” Masters believes there’s pressure coming from union members to “play catch-up” from decades of wage stagnation in a tight market. Wage growth in larger Southeast Michigan — including Genesee, Lapeer, Washtenaw, Livingston, Monroe, St. Clair, Macomb, Oakland and Wayne counties — is outpacing the national average of 2.9 percent. The region reported wage growth of 3.4 percent not seasonally adjusted between June 2017 and June 2018, better than metropolitan Chicago, Boston, Dallas, Houston, Los Angeles, Miami, Minneapolis, New York and Philadelphia. Only metro Phoenix, San Jose, Calif., Seattle and Washington, D.C., ranked higher in wage growth over the same time period. But rising costs, such as health care, housing, etc., have been largely sty-

mied by cost of living increases — up 2.9 percent not seasonally adjusted from July 2017 to July 2018, the U.S. Labor Department reported in August. Only the Unite Here Local 24 hospitality workers are striking for increased wages. Workers represented by United Here Local 1 in Chicago walked off the job at 26 hotels on Sept. 7 before reaching an agreement to raise wages with 11 of them last week. While the UM nurses are threatening to strike over technical aspects of their contract and working conditions, , no date has been determined. The road workers, technically engaged in a lockout, not a strike, were in a power struggle between the Michigan Infrastructure & Transportation Association and the International Union of Operating Engineers Local 324, which are seeking to bypass MITA’s ability to negotiate all road contracts for its members. The groups agreed to resume work Thursday and use a mediator to negotiate a new contract. Dan McKernan, the communica-

tions director for the operating engineers union, said despite a tight labor market, the strong economy actually favored MITA during the lockout. “We weren’t looking at the economy and saying, ‘the time is now,’ ” McKernan said. “The economic ups and downs of the economy can have a dramatic impact on the skilled trades. We want stability. But certainly the fact the economy is as strong as it has been, it made it financially possible for (MITA members) to enter a lockout.” And workers, increasingly not represented by unions, are more often turning to state and federal legislators to combat wage stagnation, Bleakley said. “People are finding ways to push up wages, but unions aren’t that tool anymore. People are turning not to the bargaining table but to the government with things like raising the minimum wage,” Bleakley said. “There’s more reliance on getting local, state and national government to push these issues forward."

On Sept. 6, Michigan’s Republican-led Legislature approved citizen-initiated legislation to raise the state’s minimum wage to $12 per hour in 2019, up from the current $9.25 per hour. Masters said workers have taken this route because employers have become less willing to offer wage movement and other benefits as unions have weakened. “It’s a perfect storm of economics and politics that have stiffened employers’ resolve,” Masters said. “Because employers have protected their interests from foreign competition and an exodus of jobs, there’s the impact of wage stagnation. Which means employers have pretty much held the line on both prices and wages. All of this together means a situation that doesn’t favor unions at the same time their ranks have declined dramatically. So, no, I don’t see a groundswell of union activity happening.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

Banking veteran Charles Dharte dies at age 78 By Kurt Nagl knagl@crain.com

Charles G. Dharte Jr., the former CEO of Troy-based Huntington Banks of Michigan, died at age 78. The Washington Township resident died Saturday, according to a post on the website of Wujek Calcaterra & Sons Inc. Dharte began his banking career in 1964 at Mount Clemens Savings Bank after graduating from the Uni-

versity of Detroit. He eventually rose to lead the institution. The bank became part of the Donald Parsons Michigan banking empire and then First Macomb Bancorp before being purchased by Columbus, Ohio-based Huntington in Dharte 1989, according to a Crain’s report from 1996, when Dharte re-

tired from the company after 32 years. Dharte served on the boards of various charitable and civic organizations, including St. Joseph's Hospital and the Boys & Girls Clubs of Southeastern Michigan, and was active in Catholic missionary efforts. “He always had a vision, and was

a man of great integrity who valued relationships, treated everyone with respect, and served his family and community with unwavering loyalty and gentle humility,” the obituary said. His family could not be reached for comment Wednesday. Dharte is survived by his wife Heidi Monica; children David, Brian, Marlies and Tom; and 12 grandchildren.

Visitation is scheduled for 2-9 p.m. Wednesday at Wujek-Calcaterra & Sons in Shelby Township, with a prayer service at 7 p.m. A funeral mass is scheduled for 9:30 a.m. Thursday at SS. John & Paul Catholic Church in Washington Township. Burial will be at Resurrection Cemetery in Clinton Township. Memorial donations can be made to the Capuchins or PIME Missionaries.

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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 // O C T O B E R 1 , 2 0 1 8

Last summer’s talent dump saw more than $70 million in salary cut, dropping the payroll from 2017’s Opening Day spending of $200 million to 2018’s leaner $130 million.

TIGERS FROM PAGE 3

“We’re continuing with our longterm plan to build our foundation through the draft and player development, and we’re seeing great progress with our top prospects in our farm system. We’re equally encouraged with the progression with our young players at the major league level,” Tigers Vice President of Communications Ron Colangelo said via email. While trying to be more efficient spenders, the team said it also has invested in an analytics department and in domestic and international scouting to better identify talent and to spend more wisely. Last summer’s talent dump saw more than $70 million in salary cut, dropping the payroll from 2017’s Opening Day spending of $200 million to 2018’s leaner $130 million. In addition to the $55 million earmarked for Cabrera and Zimmerman, millions more will be spent on players eligible for salary arbitration — those figures won’t be known until the process gets under way in January — and millions will be spent on journeyman free agents to fill out the roster. Baseball-reference.com’s contract tracking estimates that Detroit will spend about $45 million on salary arbitration contracts, and an additional $10 million on 13 players to fill out the roster. That projects out to a $123.7 million Opening Day 2019 payroll. The average MLB payroll in 2018 was $138.5 million, per Spotrac.com. The $123.7 million is basically flat over the roster spending as 2018 ends, but represents some assumptions that bake in reduced costs. For

“We’re continuing with our long-term plan to build our foundation through the draft and player development, and we’re seeing great progress with our top prospects in our farm system.” Ron Colangelo

example, veteran shortstop Jose Iglesias could sign elsewhere before next season as an unrestricted free agent. He was paid $6.2 million this season, and could get an increase with another team. Also coming off the books is the $18 million paid this season to Victor Martinez, who has retired at age 39 after 16 seasons in the majors. Another free agent who could leave is starting pitcher Francisco Liriano, who was inked to a one-year, $4 million deal this season. If those players were under longterm deals, the Tigers would be shelling out a lot more cash for a deeply under-performing roster. Tigers General Manager Al Avila in coming months will have to make decisions on the meat of the current roster. Most of the players are eligible for one-year deals, or their rights are retained by the Tigers and they play for the league minimum. Players in their mid- and later 20s form the core of the roster now, and they’re going to get salary increases under the arbitration system. Among them are pitchers Michael Fulmer, Shane Greene and Daniel Norris, and position players such as outfielders Nick Castellanos and

Mikie Mahtook and catcher James McCann. The front office also has the option of not offering them a deal and letting them become free agents. Other veterans who spent much of their early careers in the minors remain near the bottom of the pay scale because they don’t yet have the service time in the majors to qualify for salary arbitration. Key among that caste of players are pitcher Matthew Boyd, reliever Joe Jimenez and outfielder JaCoby Jones. The Tigers would shed those players only if they think upcoming prospects are better and ready to play, or if a cheap free agent is more efficient option. Most will remain, because the farm system is undergoing a makeover. Detroit’s minor-league player development system was bled of its talent in trades by the previous front office regime, and restocking it is a rebuilding strategy that has shortterm pain — a lot of losses — for long-term success. Emily Waldon, who writes about the Tigers’ minor league system for The Athletic Detroit, said most fans don’t grasp how barren the Tigers’ minor-league system has been in recent years. It will take more than a season or two to replenish it. “It was worse than people realize,” she said. “There’s still a lack of depth in the system, especially at catcher.” Creating a vigorous pipeline of young players, the salary dump, and the increased spending on scouting and data is meaningful only if the front office identifies the right blend of players that can win games. How has the strategy played out since it began in earnest last summer? Waldon likes what she sees so far, but cautions that for many of the new

prospects, they got only a quarter of minor-league play in last season because of when the trades occurred. This year was the first full year in the minors for them — and there’s reason to be optimistic. “A lot of these guys are starting to make a quick impact,” she said. One example is Jeimer Candelario, 23, who was acquired in the 2017 trade with the Chicago Cubs for Alex Avila and Justin Wilson. Candelario started 140 games for the Tigers at third base this season and is the first of the prospects from Detroit’s trade flurry to become a major league regular. Daz Cameron, an outfielder acquired from Houston as part of the deal that sent Verlander to the Astros, is another highly touted prospect. So is Isaac Paredes, an infielder who came to Detroit from the Cubs along with Candelario, also is promising and could see major league action in the in a year or so. The Tigers’ new business and talent strategy also ends years of trying to rebuild by plugging holes on the fly with free-agent fixes or by calling up players before they’re ready. “The problem with the old mentality is they were rushing guys up (to Detroit),” Waldon said. “The focus now is on the development process and not to trade them away.” An example of that patience is relief pitcher Joe Jimenez, Waldon said. The Tigers took their time letting him develop in the minors after signing him in 2013, where he worked his way up as an 18-year-old before making his major league debut in 2017. This season, he earned All Star honors. Patience is critical, Waldon said. “Don’t rush guys up to fill gaps. You cannot move guys up to save your butt at the MLB level,” she said.

“I liked what I saw from the Tigers this year. They didn’t rush (outfielder) Christian Stewart. It’s been a promising trend.” Detroit’s rebuild may be a longer slog because the team was widely criticized for being late to adopt the use of advanced metrics and data. Now they’re trying to play catch-up and have to get their old-school scouts to use the new data, Waldon said. “I think they do want to embrace it, but it’s complex process of getting the whole organization on board to make up lost ground,” Waldon said. It was analytics, traditional scouting and common sense that led the Tigers to take Auburn pitcher Casey Mize with the No. 1 pick in this year’s baseball draft. Mize will be a cornerstone of Avila’s effort to rebuild the franchise under the new business strategy, and the team showed its patience with his development by ending his season after just five starts in the minors. They wanted to rest his arm because he was coming off a full college season before his minor league innings. Mize could pair with Matt Manning, the ninth overall pick from the 2016 draft, to form the core of a strong starting pitching rotation. Waldon said the best of the Tigers’ prospects likely will debut in 2020 and that Detroit could realistically be a playoff contender beginning in 2021. That’s contingent upon the young players developing properly, and the front office finding the right veteran free agents to flesh out the major league roster. “In my opinion, yeah, it’s working. The moves are starting to show the results,” she said. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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

OFFICE FROM PAGE 3 www.crainsdetroit.com Editor-in-Chief Keith E. Crain President KC Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Product Director Kim Waatti, (313) 446-6764 or kwaatti@crain.com Digital Product Manager Carlos Portocarrero, (313) 446-6056 or cportocarrero@crain.com Creative Director David Kordalski, (216) 771-5169 or dkordalski@crain.com Assistant Managing Editor Dawn Riffenburg, (313) 446-5800 or driffenburg@crain.com News Editor Beth Reeber Valone, (313) 446-5875 or bvalone@crain.com Special Projects Editor Amy Elliott Bragg, (313) 446-1646 or abragg@crain.com Design and Copy Editor Beth Jachman, (313) 446-0356 or bjachman@crain.com Research and Data Editor Sonya Hill, (313) 446-0402 or shill@crain.com Newsroom (313) 446-0329, FAX (313) 446-1687, TIP LINE (313) 446-6766

She said talent recruitment is part of the firm’s cost-benefit analysis, as are opportunities for new business “that we are not pursuing, or we aren’t having those opportunities, because we don’t have a location in Detroit. There are several reasons we want to be here, in addition to talent.” “It’s a strong, positive move to gain access to companies in the city that would prefer to do business with law firms that are close by,” said Steve Morris, managing principal of Farmington Hills-based real estate firm Axis Advisors LLC and an adjunct professor at the University of Michigan’s Stephen M. Ross

Linda Paullin-Hebden: in 3 metro counties.

Steve Morris: Strong, positive move.

School of Business. Paullin-Hebden also says the move makes Warner Norcross “the only major law firm to have offices in Wayne, Oakland and Macomb counties.” Its Macomb County office is in Clinton Township at 45000 River Ridge Drive near Hall Road/M-59

“Warner Norcross + Judd’s planned expansion is just one example how The District Detroit is attracting worldclass companies and professional services to the city of Detroit.” Travis Arbogast, vice president of development, Olympia Development of Michigan

and Romeo Plank Road. Warner Norcross joins Google as a key office tenant in the Ilitch family’s District Detroit project, an-

chored by the new arena for the Detroit Red Wings and Detroit Pistons and spanning 45-50 blocks. “Warner Norcross + Judd’s planned expansion is just one example how The District Detroit is attracting world-class companies and professional services to the city of Detroit,” said Travis Arbogast, vice president of development for the Ilitch family’s Detroit-based Olympia Development of Michigan. The Southfield office of Plante Moran CRESA represented Olympia, while Southfield-based Advocate Commercial Real Estate Advisors of Michigan LLC represented Warner Norcross. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

MEET THE GUY WHO PUT THE PRO IN PROBUSINESS.

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For a state to have a pro-business climate, it must have a pro-business governor. Arkansas’ Asa Hutchinson is actively involved in attracting and keeping business in our state. He’s developed a pro-business culture that is ready to act quickly and decisively on corporate interests. Learn more about how a business-friendly state can work for you at ArkansasEDC.com/probusiness.

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HEAD START FROM PAGE 3

It’s a huge change to bring in new providers, new teachers and new facilities, said Brad Coulter, president and CEO of Matrix Human Services, the city’s largest Head Start provider and one of the agencies that must rebid on its contract. “It takes away stability for kids and families.” Head Start and Early Head Start programs geared to children from birth to age 5 provide comprehensive early childhood education, health, nutrition, and parent involvement services to low-income children and their families. Children rely on Head Start programs for daily meals, interaction and getting ready for their school years, said Walter Gilliam, a psychology professor in the Child Study Center at Yale University and director of the Edward Zigler Center in Child Development and Social Policy. “Whenever a grantee closes down, all those relationships that have taken years to develop are lost,” Gilliam said. To help the four providers get ready for recompetition, foundations already investing in early childhood care and education in Detroit are stepping up with even more grants, funding technical assistance and helping the nonprofits address issues identified by the U.S. Department of Health and Human Services’ Administration for Children and Families. For their part, the agencies are collaborating to support each other in their contract renewal bids and in addressing larger issues such as the shortage of adequate facilities and teachers in the city. The Department of Health and Human Services said it expects to issue the request for proposals on the grants some time this fall. Typically they are due within 60 days, with decisions on contract awards coming at some point in 2019.

Classroom assessment Matrix Human Services, New St. Paul Tabernacle Head Start Agency Inc. and Starfish Family Services scored in the bottom 10 percent of Head Start providers around the country in one or more areas of a federal evaluation done in 2017. The Classroom Assessment Scoring System assesses provider quality in three primary measures of emotional support, instructional support and classroom organization. All three fell short in rankings on classroom organization, which evaluates routines and classroom structure, but scored above the bottom 10 percent in instructional support. New St. Paul also scored in the lowest 10 percent in the pillar of emotional support, which gauges how teachers interact with children and their ability to support social and emotional functioning in the classroom. In each of the areas, scores down to the fourth decimal can separate agencies that must recompete from those that don’t. Metropolitan Children and Youth Inc., which does business as United Children and Family Head Start, must recompete based on a facilities violation in 2014 and two occasions of staff leaving a child unattended in 2014-2015, according to the Administration for Children and Families. The four agencies collectively serve over three-quarters of the

Brad Coulter: We didn’t hit the scores.

Ann Kalass: Always raising our game.

“There is broad agreement about the harm caused by the lowest 10 percent provision — a provision that isn’t grounded in quality, but rather penalizes grantees based on an arbitrary comparison across a cohort.” Yasmina Vinci, executive director, National Head Start Association

more than 5,000 children enrolled in the early development and education programs for children from birth to age 5 in Detroit. The other two Head Start grantees in Detroit, Renaissance Head Start and Order of the Fishermen Head Start, do not have to recompete for a contract renewal. “At the end of the day, we didn’t hit the scores, and we have to recompete,” Coulter said. “But if the bulk of Head Start providers in the city have to rebid for missing the mark on a score, there’s a systemic or underlying issue.”

National issue Aspects of the federal evaluation system have drawn backlash since it was put in place through the Improving Head Start for School Readiness Act of 2007. Up until that point, agencies that didn’t voluntarily end their programs and weren’t terminated by the U.S. Department of Health and Human Services received indefinite funding. The 10-percent trigger for recompetition and the lack of specific national benchmarks have drawn criticism nationally from providers and others. Agencies scoring in the bottom 10 percent in any area of the federal evaluation are automatically put into recompetition. That’s led providers to invest in professional development, and scores have risen. That’s good for the children served by Head Start, but the 10-percent provision sets some number of providers up to fail every year, no matter how well they do. “Basically, even though you’re in the bottom 10 percent, you could be doing pretty well because they’re grading on a curve,” Gilliam said. It’s the equivalent of a student getting a 93 on a test. That shows almost complete command of the material, but if everyone else scored better, that student is going to fail, he said. The Designated Renewal System which lays out conditions that would require a provider to recompete, and the system used to evaluate Head Start programs “as a whole, has been wonderfully effective in identifying quality, helping grantees raise quality and rightly holding

grantees responsible for the federal investment,” said Yasmina Vinci, executive director of the Alexandria, Va.-based National Head Start Association which represents 1,600 Head Start providers across the country, in an emailed statement. The 10-percent provision, however, works against that and does not effectively differentiate between low-quality and high-quality programs, Vinci said. “There is broad agreement about the harm caused by the lowest 10 percent provision — a provision that isn’t grounded in quality, but rather penalizes grantees based on an arbitrary comparison across a cohort,” she said. “In short, this trigger is not a transparent or clear measure. It is highly stressful and wasteful for programs — taking away from their ability to focus on their services — and is not accomplishing Congress’ goal of identifying and improving low-performing programs.” Early this year, the Administration for Children and Families said it was considering changes to the way Head Start providers are evaluated and federal funding ramifications. Among the changes under consideration are dropping the lowest 10-percent trigger for recompetition and establishing specific thresholds for scores in the three main areas evaluated so providers know what they are working toward each year. The new rules are due out some time in 2019. Until then, the current regulations and process remain in place, and four Detroit providers must prove they are the top candidates for the new, five-year contracts.

Cost to the community Recompetition for the four providers comes as other agencies have ended their Head Start programs in Detroit. They include Southwest Solutions, which exited at the end of last year due to facility and financial issues and the Children’s Center, which ended its programs last year in the face of administrative and financial issues. Matrix and Starfish, the two providers that spoke with Crain’s, said they are most concerned with the impact shifting the contracts will have on the children and their families. As part of the Head Start model, families are provided with wraparound services in areas such as health, nutrition, social services and more. The model also requires that providers engage parents in the communities, getting them involved on local boards. But shifting the contracts would also impact hundreds of people employed by the providers. Matrix, the largest of the four, with $25 million in annual Head Start contracts in Detroit, added 12 centers to its existing 10 centers and 200 employees when it took on the new contracts in 2014. It serves 1,927 children and their families through Head Start programs. It also provides support services for children and families such as housing and food assistance, financial literacy, education and workforce development, with a total annual budget of $40 million and 550 employees. In the 2017 federal “CLASS” evaluation, Matrix fell .0012 short in the area of classroom organization, ranking it among the bottom 10 percent. Meanwhile, on Michigan’s Great Start to Quality quality rating and

improvement system — which is aligned with the national, more comprehensive evaluation of the quality of early childhood and school-age care and education programs — the majority of Matrix Head Start centers scored four out of five stars, and three centers got fivestar marks. The state system supports early childhood programs and providers in their efforts to improve their programs and helps Michigan families find and choose quality child care programs. Starfish, which is operating on a $42 million budget, also garnered a four-star rating on the state quality assessment. Any shifts in its Head Start contract that’s up for recompetition would have ripple effects for several other nonprofits that are subcontractees under its contract. A total of 16 sites serving 888 Detroit children are covered by the $13.9 million contract, President and CEO Ann Kalass said. Starfish operates five sites employing about 50-60 people, and the balance are operated by Focus: Hope, Development Centers or American Indian Health & Family Services. “We are ... always looking at what is happening in our programs and classrooms,” Kalass said, such as providing professional development for teachers, adding additional staff in classrooms and beginning to implement a culture of trauma care within Starfish childcare centers. But the Department of Health and Human Services is running the Head Start program “in a very highstake way where if there’s one area that needs improvement … that alone can trigger a competitive application,” she said. “When we look at all of the indicators holistically, we are confident in the quality of our program. “We’re in this for the long run, and we are making progress year over year ... that’s what the children in Detroit deserve, that we’re always raising our game for children and their families,” Kalass said.

“The challenges of Detroit’s Head Start network are symptomatic of larger systemic challenges facing early education providers across the city and region. Such challenges ... must be addressed if we want our youngest children to excel in elementary school and beyond.” Katie Brisson, vice president, program, Community Foundation

Getting ready to recompete Recompetition for the four comes as foundations are making big investments to build the early child education infrastructure in Detroit. They’ve invested tens of millions of dollars to help address the need for teachers and facilities and the specific areas of improvement each provider must make as it recompetes for a new five-year contract.

Philanthropy is supporting Head Start in Detroit in a way that didn’t exist five years ago, Kalass said. The Head Start Innovation Fund, an $11 million fund supported by 10 foundations and administered by the Community Foundation for Southeast Michigan, has made about $6.4 million in grants to support providers in Detroit, Western Wayne, Oakland and Macomb counties since its launch in 2013, said Katie Brisson, vice president, program, at the Community Foundation. It’s also supported an enrollment campaign and education campaign around special needs youth in Head Start, and it’s supporting technical assistance for the Detroit providers facing recompetition, provided by a “dream team” of five or six national experts. The fund will make another annual grant to the Detroit agencies this fall as part of a round of grants totaling about $1 million, Brisson said. The new grants will support their efforts to address needs identified within the federal evaluation. To help address teacher shortages, last month, the Skillman Foundation and Detroit Children’s Fund launched the public-private effort “Teach 313”pre-K-12 Detroit teacher recruitment effort. And last November, Kresge Foundation and Battle Creek-based W.K. Kellogg Foundation committed $50 million to the “Hope Starts Here” initiative aimed at strengthening Detroit early childhood education through efforts including renovation and construction of child care facilities, early care and education scholarships, and fellowships and technical assistance for providers. “Hope Starts Here is focused on building Detroit’s infrastructure for high quality early childhood education to meet the needs of the city’s 54,000 children under age 5,” said Kellogg program officer Regina Bell, in an emailed statement. “Since Head Start serves almost 10 percent of young Detroiters, the programs are key part of the infrastructure and integral to the collaborative efforts underway through Hope Starts Here.” The Detroit Head Start providers are meeting monthly to put one voice behind some of the systemic challenges they face such as a shortage of qualified, credentialed teachers and quality facilities, Coulter said. They’re working with technical advisers provided by the Head Start Innovation Fund and the Office of Head Start in Chicago. And they’re collaborating on a local assessment of the need to cut costs and talking about joint recruiting of teachers. “The challenges of Detroit’s Head Start network are symptomatic of larger systemic challenges facing early education providers across the city and region. Such challenges ... must be addressed if we want our youngest children to excel in elementary school and beyond,” Brisson said. Over the last five years, the providers have truly grown as a collaborative, something that’s unique in a system that can sometimes spur competitiveness among agencies, Brisson said. “What is exciting and unique about the recompetition process that is going on now is that the Detroit agencies are working together to build their proposals and address challenges,” she said. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

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THE WEEK ON THE WEB

RUMBLINGS

SEPTEMBER 21-27 | For more, visit crainsdetroit.com

Ford paid $90 million for Michigan Central Station

ord Motor Co. paid $90 million for the Michigan Central Station in Detroit’s Corktown. The disclosure on the city’s property sales history page puts an end to months of speculation in commercial real estate circles about how much the Dearborn-based automaker ponied up to the Moroun family for the vacant and unused building off Michigan Avenue. A purchase price of $90 million puts the purchase price at $150 per square foot for the 600,000-squarefoot depot, which has long been seen as emblematic of a city that decayed over decades. AJ Weiner, managing director in the Royal Oak office of JLL, said the high purchase price is reflective of a buyer who will ultimately use the property itself, as opposed to an investor looking to profit off the building. “The benefits to a user buyer don’t translate to what an investor buyer would see the benefit of,” he said. “Marketing, social impact, etc. That said, that’s a staggering amount of money, and it’s another validation of an ongoing recovery of a market that continues to amaze and impress.” Dennis Bernard, founder and president of Southfield-based Bernard Financial Group, a prominent commercial real estate finance company, was surprised by the cost. “DAMN!!!!!,” he said in an email to Crain’s. A message was sent to a spokesperson for Ford Land Development Co., the automaker’s real estate development arm. A spokesman for the Moroun family declined comment. Ford finalized the depot purchase May 22, according to public records. The company is seeking nearly $239 million in local, state and federal incentives for its planned $740 million campus in the Corktown neighborhood west of downtown, with the train station as the focal point of the 1.2 million-square-foot project that is expected to bring 5,000 autonomous and electric vehicle technology workers to the area. The 104-year-old depot is expected to be turned into about 313,000 square feet of office space, about 42,000 square feet of residential space spread across 40 or so units, 43,000 square feet of commercial space and 60,000 square feet of event space.

BUSINESS NEWS J General Motors Co. is moving Cadillac’s headquarters back to metro Detroit about three years after the brand moved to New York City’s trendy SoHo district, Automotive News reported. The decision comes less than six months after GM executives ousted Cadillac President Johan de Nysschen, a former Infiniti and Audi executive, in exchange for Steve Carlisle, a GM lifer who most recently led the automaker’s Canadian operations. The move to Warren, across the street from GM’s technical center, will take place in April. J The eight glass huts installed at Capitol Park in downtown Detroit,

LARRY PEPLIN FOR CRAIN’S

Ford’s purchase price of $90 million puts the price at $150 per square foot for the 600,000-square-foot depot, which has long been seen as emblematic of a city that decayed over decades.

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

300

The number of dockless, electric scooters San Francisco-based Spin is planning to launch in Detroit, joining Bird and Lime.

10,000

The army of volunteers Life Remodeled expects to deploy for its annual Detroit neighborhood cleanup marathon, starting Monday.

$10 million The amount Ford Motor Co. has agreed to invest as part of a tentative community benefits agreement with the greater Corktown neighborhood and the city alongside its planned $740 million autonomous and electric vehicle technology campus.

built for the Downtown Detroit Markets, have been retrofitted as pop-up collaborative workspaces called “Workspace: dEFINED by ALL” by Detroit design firm dPOP. The co-working spaces are open to the public to use on a first-come-firstserved basis 9 a.m.-7 p.m. weekdays through Nov. 5. J Birmingham-based M Group and Florida-based Andover Real Estate Partners have purchased the 144unit Carlton Apartments in Detroit’s Lafayette Park for $11.55 million. They plan $2 million in renovations to the complex across from Detroit’s incoming small-format Meijer store. J Galley Group Inc., a Pittsburgh-based food hall creator, has selected four chef teams to dish out meals at its communal dining space in the Bedrock LLC-owned former Federal Reserve building, including Jimmy Schmidt, who was long the owner-chef of the Rattlesnake Club. Fort Street Galley is expected to open this fall with French-Filipino food, Korean-inspired dishes, food science-influenced barbecue and more, as the popularity of food halls gains traction locally. J Ford Motor Co.’s Chariot Transit Inc. shuttle service is partnering with Dan Gilbert’s family of companies to provide commuter service from select suburban locations to Quicken

Loans Inc. and other Gilbert-owned businesses in downtown Detroit. Bedrock is paying Chariot to operate the free rides for employees as a pilot program, with plans of expanding the downtown commuter service to be open to the general public. J The co-founder of 1701 Bespoke, a men’s custom clothier in Midtown Detroit, plans to set up clothing manufacturing in a leased facility in the city’s New Center area as Commonwealth Sewing Co. Commonwealth will do manufacturing work for 1701 Bespoke, as well as contract jobs for other local apparel makers, in a city where others are also seeking to make Detroit a clothing-manufacturing and fashion hub.

NONPROFIT NEWS J The Detroit Children’s Fund is in talks with the Detroit Public Schools Community District to open new schools in the city as a solution to poor-quality schools already there. The move would bring the nonprofit closer to achieving its goal of elevating one-third of all public and charter schools in the city to “good quality” status by 2025 — an $85 million to $100 million undertaking. J Creative Many Michigan hired Steve Wilson as interim president and CEO to take the reins after longtime leader Jennifer Goulet stepped down, amid a transition for the arts nonprofit. Wilson is tasked with guiding the organization through a reexamining of its structure and strategy.

Dan Gilbert

Steve Case

Gilbert, Case share expertise for companies

hat do two billionaires chat about? If they’re Steve Case and Dan Gilbert, they swap perspectives on lessons learned as entrepreneurs — to help early stage companies grow. Gilbert, founder and chairman of Quicken Loans Inc. and Rock Ventures LLC, spoke at a two-day “Rise of the Rest Fund Summit” in Chicago last week. AOL co-founder Case interviewed him for an hour before an audience of nearly 100 founders of early-stage companies that have seed-capital investments from the fund that Case started, which has attracted investors like Gilbert and sports team owner and entrepreneur Ted Leonsis. Case’s idea was simple: Create a fund that invests in promising companies outside of Silicon Valley, New York and Boston, investing alongside local or regional funds, with no more than 10 to 20 percent of a given capital raise round. The event gave Gilbert a chance to talk about his own entrepreneurial story and to tout Detroit as a place for startups and tech companies. “I’m getting calls, six to nine calls a month, from CEOs of Silicon Valley companies who have had it,” Gilbert said. “They can’t find people, they can’t get people to stay, it’s not affordable. Amazon and Bezos are the bellwether of what’s happening (on

the Coast).” Gilbert also spoke to a business philosophy of engagement in the city as “doing well by doing good. … We call ourselves ‘more-than-profit,’” offering the example of the yearlong project of using volunteers from his 13,000-strong downtown workforce to scan mountains of paper documents to give the Detroit Public Schools Community District its first digital records of high school diplomas that alumni could use for job search requirements. “What did that cost us?” Gilbert asked rhetorically. “That was an incredible motivator for our people, who felt like they had impacted our city.” The summit included one-to-one mentoring by fund investors and limited partners as well as networking and “big-stage” speakers. Detroit-area companies in the portfolio include GuardHat, an Internet-of-Things maker of wearable technology and workplace safety software; Sahi Cosmetics, whose products focus on ethnic skin tones; StockX, the online platform for the buying and selling of consumer goods, especially sneakers, handbags and other limited-run items; and Waymark, a video marketing startup. Another company, Denver-based WTRMLN WTR, was co-founded by Detroit expat Jody Levy.

GOVERNMENT NEWS J The Detroit Planning Commission this week is expected to consider a large LED sign atop a downtown high-rise apartment building, the Renaissance City Club Apartments at 555 Brush St. City Club Apartments has proposed installation of a 54-foot by 25-foot dynamic LED sign weighing 4,500 pounds above the property’s 33rd story on the western facade at a height of 306 feet. J Harper Woods is proposing to move its civic center to the Eastland Center mall property as part of a mixed-use redevelopment if the long-struggling shopping mall is sold at auction this month. A concept plan by Northville-based McKenna Associates shows a reuse of the site at 18000 Vernier Road that includes civic space surrounded by apartments, row houses, a hotel and restaurant space.

JEFF MARTIN SMZ

Detroit Mayor Mike Duggan was honored as the 2018 Goodfellow of the Year at the 29th annual Detroit Goodfellows Tribute Breakfast in September. The Old Newsboys’ Goodfellow Fund of Detroit bestowed its Edward H. McNamara Award Goodfellow of the Year Award on Duggan for his “significant” contributions to the community.