Crain's Detroit Business, Oct. 15, 2018 issue by Crain's Detroit Business

Big plans for the Hudson’s site Michigan’s outdoor economy, Page 10

Page 3

OCTOBER 15 - 21, 2018 | crainsdetroit.com

THE GOVERNOR’S RACE

THE BUSINESS OF GOVERNING Where Schuette, Whitmer stand By Chad Livengood clivengood@crain.com

Republican Bill Schuette and Democrat Gretchen Whitmer offer competing visions in this year’s governor race for the most pressing issues affecting business and the economy in the Great Lakes State. The two gubernatorial rivals were set to square off Friday in their first televised debate in Grand Rapids and will participate in their second hourlong debate at 8 p.m. Oct. 24 in Detroit on WDIV-Channel 4. For many voters, a time-limited debate format doesn’t always lead to full and thoughtful answers. Both Schuette and Whitmer recently sat down separately with Crain’s Detroit Business to discuss their plans for leading the state over the next four years — and perhaps eight years as seven of the past eight governors of Michigan have been re-elected. Here’s where they stand on questions critical to the state’s business and economic climate:

ILLUSTRATIONS FOR CRAIN’S BY CHRIS MORRIS

Taxes and spending J Schuette has proposed slashing the state’s individual income tax that small business owners pay on LLCs, S-corps and sole proprietorships from 4.25 percent to 3.9 percent, the previous rate before a split Legislature and then-Gov. Jennifer Granholm raised the tax during the Great Recession.

SEE CANDIDATES, PAGE 25

See for yourself JJWatch video of Crain’s interviews with governor candidates Bill Schuette and Gretchen Whitmer. https://tinyurl.com/ydf86v6c

HEALTH CARE

REAL ESTATE

DMC awaits inspections

Health system preps for more scrutiny over dirty instruments By Jay Greene

Detroit Medical Center faces a surprise quality inspection that could happen any time from state and federal regulators, according to officials from the Chicago office of the Centers for Medicare and Medicaid Ser-

vices and the Michigan Department of Licensing and Regulation. CMS said last week it has authorized an investigation at Harper University Hospital and Detroit Receiving Hospital in response to recent media reports to determine whether the facilities are in compliance with

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the agency’s conditions of participation. If violations are found, CMS could terminate DMC’s participation in Medicare, costing the for-profit hospital millions in revenue. Violations also could trigger hospital accreditation action by the Illinois-based Joint Commission. In a statement at midafternoon Friday, a DMC spokesperson said in a statement: “The surveyors have not arrived, but we welcome the opportunity to demonstrate the effectiveness of the quality and safety protocols we have in place and how seriously we take them.” The inspection follows a Crain’s article last week that raised questions about ongoing infection control and instrument cleaning issues. SEE DMC, PAGE 21

Toronto developer scouting Detroit market By Kirk Pinho kpinho@crain.com

A prominent Toronto developer who is building Canada’s tallest skyscraper has been scouting for property to build on in Detroit as well. While city boosters and real estate experts regularly talk in general terms about the amount of out-of-state and international interest in the Detroit real estate market, rarely do the identities of those interested parties — still drawn to the area by higher returns on comparatively cheap properties — become known until they buy a building or land. It’s different for Sam Mizrahi, who registered business entities in Michigan last month, one of which describes its “general character” as “real estate development and financing.”

Two real estate sources briefed on his interest in Detroit development also say he’s been looking for land to build on for the last several months. Precise locations in the region are not known, and land records in Wayne and Oakland counties don’t indicate any property purchases have yet been made. He would be the latest out-of-state investor in the Detroit market, following Philadelphia-based developer David Grasso, who is working on a development (potentially a high-rise) at the southwest corner of Woodward Avenue and West Grand Boulevard and New Yorkers Mario Procida (Midtown West), ASH NYC (The Siren hotel and Eastern Market project) and Ron Castellano (the Herman Kiefer property), among others. SEE MIZRAHI, PAGE 22

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MICHIGAN BRIEFS

INSIDE

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

Stabenow pushes through bill to lift pharmacy gag restrictions U.S. Sen. Debbie Stabenow, D-Mich., a sponsor of a federal bill that ends pharmacists’ gag clauses in Medicare prescription drug plans, is celebrating the signing of a pair of bills regarding the issue last Wednesday by President Donald Trump. So are Michigan pharmacists, many of whom have been frustrated for years with their inability to advise customers about less-expensive drugs. “It’s wrong that a person overpays for their medication simply because their pharmacist is not allowed to tell them they could pay a lower price with cash instead of insurance,” Stabenow said in a statement. “Thanks to a successful bipartisan effort, we’ve banned this outrageous practice once and for all. This is an important step toward lowering the skyrocketing prices of prescription drugs for Michigan families.” One effect of the Know the Lowest Price Act of 2018, which Stabenow sponsored, is that pharmacists will now be able to tell customers they might be able to pay less for their prescription if they pay out of pocket.

Stabenow’s bill prohibits a prescription drug plan under Medicare or Medicare Advantage from restricting a pharmacy from informing an enrollee of any difference between the price, copayment or coinsurance of a drug under the plan and a lower price of the drug without health insurance coverage. Such restrictions are commonly referred to as “gag clauses.” Larry Wagenknecht, CEO of the Michigan Pharmacists Association, which lobbied for the legislative package, said the federal bills will help Michigan pharmacists and families. “Michigan pharmacists are active members of the community and are committed to providing quality care to our patients and their families,” Wagenknecht said in a statement. “With passage of Senator Stabenow’s Know the Lowest Price Act, pharmacists will be able to help their patients pay less for the prescriptions they need.”

$20 million Midland canopy walk opens

Visitors can now line up to take a leap of faith in Midland at one of the country’s longest canopy walks. The Herbert H. and Grace A. Dow Foundation donated $20 million for the Whiting Forest of Dow Gardens, which opened last Sunday and includes a 1,400-foot-long canopy

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WEEK ON THE WEB

Grant to aid Michigan workers affected by retail, banking declines

ASSOCIATED PRESS/SUSAN WALSH

President Donald Trump (left) shakes hands with Sen. Debbie Stabenow, D-Mich., center, during a signing ceremony for the Patient Right to Know Drug Prices Act and Know the Lowest Price Act of 2018.

walk suspended 40 feet above ground. Visitors can walk, jump and sprawl on cargo nets stretched between the trees and land suspended 25 feet above the ground, a news release said. The Dow Gardens complex is a landmark public garden built in 1899 by Dow Chemical Co. founder Herbert Dow. The updated complex provides a year-round experience with nature on the 54-acre forest. Philadelphia-based Metcalfe designed the space to let guests wander paths through woods, open

fields and dark forests. “In a world of technology that sometimes makes us more divided, we work to design places that bring people together outdoors and in nature for purposeful interaction,” Alan Metcalfe, principal of Metcalfe, said in the release. “Whiting Forest of Dow Gardens is a great example of that philosophy.” The complex features a new 13,600-square-foot playground, apple orchard, amphitheater and cafe, among other offerings. A mid-century residence was repurposed into a visitors center for the site.

The U.S. Department of Labor awarded the state of Michigan a $3.2 million grant to assist workers affected by disruption in brick-and-mortar retail and banking. The Trade and Economic Transition National Dislocated Worker Grant will fund programs by the state’s Talent Investment Agency that seek to train workers for high-demand jobs, such as information technology, health care and advanced manufacturing, said Stephanie Beckhorn, director of the agency. Programs are administered through the 16 Michigan Works agencies throughout the state. The agency has two years to spend the one-time grant, Beckhorn said. Since the start of 2017, more than 7,000 retail workers and more than 1,000 financial service workers have been laid off in Michigan, said Joe Billig, the agency’s director of talent policy and planning.

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DEVELOPMENT

A look inside newly grown Hudson’s project

TRANSPORTATION

By Kirk Pinho kpinho@crain.com

Detroit’s tallest building — and the state’s — is expected to feature a stepping design in the heart of downtown as fresh details of Dan Gilbert’s signature downtown development project are revealed in a new site plan obtained by Crain’s. The plan dated Sept. 10, submitted to the city and obtained through the Freedom of Information Act on Tuesday afternoon, includes new scope of projections for the J.L. Hudson’s department store site development project not previously reported. Among them: J The overall project size is anticipated to be about 1.424 million square feet spread across two buildings, a more than Need 40 percent into know crease from JJProject totals about 1 million 1.424 million square feet. square feet, more J That includes a than 40 percent 62-story tower up larger than to 912 feet tall previously revealed and a 14-story, 232-foot-tall poJJThe podium or dium that has in“block” is now 14 stories, with a max creased in size from nine stories. of 232 feet in Crain’s first reheight ported recently JJOffice space that the tower increases by at height, previousleast 100,000 ly 800 feet, has square feet, and grown as Gilhotel space totals bert’s Bedrock 500,000 square LLC evaluates its feet options for programming the sweeping development on what is perhaps downtown’s most iconic site. J Office space in the 14-story podium, sometimes referred to as the “block,” has increased to 363,000 square feet across the top six floors (about 60,000-square-foot floor plates, some of the largest in the city), up from 263,000 square feet. The podium also includes a skylight, a detail not previously known. The office space is expected to command rents in the high $30s to low $40s per square foot. The most recent JLL Skyline report for the most prestigious office buildings downtown lists an average rent of $23.47 per square foot. J Hotel space is slated to be about 500,000 square feet, although a Bedrock spokeswoman said last week that the Detroit-based real estate development, ownership, management and leasing company “is not ready to talk about potential partners for the hotel yet.” SEE HUDSON’S, PAGE 22

MOBILITY STARTUPS GAIN TRACTION

One startup, Zohr, turns Mercedes-Benz vans into mobile tire shops. ZOHR

Accelerator helps import talent, entrepreneurs to Southeast Michigan By Pete Bigelow pbigelow@crain.com

As Sunjay Dodani prepared to decamp from Silicon Valley for three months and place his startup into a business incubator in Detroit, his team of advisers urged him to reconsider. They thought his fledgling company, which makes sensors that gather detailed information on tire health, would be better served maturing in a Bay Area culture tailor-made for small startups. “But there was something in my gut,” said Dodani, CEO of IntelliTire. “It’s a risk leaving the Silicon Valley

Need to know

11 startups make up the fourth class of the Techstars Mobility Accelerator J

J Companies spent the past three months polishing business plans and establishing partnerships J Class spans the transportation spectrum, with some businesses anchored by the latest in artificial intelligence and some that are ingeniously simple

innovation bubble for the Midwest, but this is a relationship industry, and mobility in its own way is very much about building relationships.”

Mobility encompasses much more than the auto industry, but Dodani said the crossroads of those relationships still run through Detroit. So IntelliTire forged ahead with its participation in the Techstars Mobility Accelerator here, along with 10 other startups making up the organization’s fourth class of nascent businesses. Founders of the companies spent the past three months polishing business plans and establishing partnerships with industry heavyweights such as Ford Motor Co., Honda Motor Co. and Bosch while working in the city. Last week, they

graduated from the business incubator, pitching their businesses to a crowd of about 1,000 industry professionals during an event at the Detroit Institute of Arts. “I skip the traditional auto shows now in place of this event,” said Reilly Brennan, general partner at Trucks Venture Capital in San Francisco. “The value for me as an investor isn’t just the companies on stage but the ecosystem around entrepreneurship, which includes other VCs, prospective founders and also a handful of big OEM customers.” SEE MOBILITY, PAGE 24

AUTO INSURANCE

Snyder’s move sparks calls for fraud prevention By Chad Livengood clivengood@crain.com

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

Michigan’s highest-in-the-nation auto insurance rates have prompted years of debate over whether the state should establish a fraud prevention authority.

The lack of any additional personnel for Gov. Rick Snyder’s new anti-fraud initiative in the state insurance department has sparked renewed calls from lawmakers to create and fund a new agency charged with rooting out fraud and waste in Michigan’s no-fault auto insurance system. The anti-fraud unit Snyder created in the Department of Insurance and Financial Services last month came with no additional money or employees to investigate fraud in the insur-

ance and financial services markets, said Randall Gregg, senior deputy director and general counsel of DIFS. Instead, DIFS is moving around existing personnel to launch fraud investigations with assistance from the Michigan State Police and attorney general’s office, Gregg said. The creation of the anti-fraud unit near the end of Snyder’s time in office has sparked some renewed focus on establishing a state agency to investigate fraud suspected of contributing to Michigan’s highest-in-thenation auto insurance rates. SEE FRAUD, PAGE 24

MUST READS OF THE WEEK Health center in Midtown sees growth

Kelly Services leader helped company evolve

Jury awards almost half a million dollars

Central City grows in Detroit: adds clients, employees, new transportation service. Page 4

Longtime Kelly Services leader Terence Adderley dies at 85. Page 21

Family wins Pontiac General ‘pay-for-play’ residency case. Page 6

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CENTRAL CITY INTEGRATED HEALTH

One of two new vans that each seat 14 people used to transport people to health care services provided by Central City Integrated Health in Detroit

Central City grows in Detroit: adds clients, employees, transportation By Jay Greene jgreene@crain.com

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Ryan Lepper, CEO of Central City Integrated Health Inc., a Detroit-based federally qualified health center and mental health provider in Midtown, had a dream back in 2016: expanding services beyond health to housing, transportation and dental. Having an investment background, Lepper also wanted to hit $20 million in revenue at the nonprofit by 2021. Now, after further review, he expects to hit $17 million this year, blow past $20 million by Ryan Lepper: Nobody doing the 2019 and come close to hitting things we do. $30 million by 2021. But hitting self-imposed financial targets is not a goal in and of itself. It is a reflection of how well Lepper believes Central City is serving its population, he said. For example, three years ago the health center served 4,500 people. It now serves almost 6,000. â&#x20AC;&#x153;We started a transportation division. We have a â&#x20AC;&#x2DC;no-consumer-left-behindâ&#x20AC;&#x2122; theme. We have two big passenger buses parked in New Center. We have taken in 700 new customersâ&#x20AC;? from May to June, said Lepper, adding the center is adding 50 to 90 clients per month. Many of those came from New Center Community Services, which closed earlier this year when it lost a contract with Detroit Wayne Mental Health Authority. â&#x20AC;&#x153;Nobody is doing the things we do. We have an employment and housing division because we found this is what people need,â&#x20AC;? Lepper said. â&#x20AC;&#x153;We are trying to make this as simplistic as possible for consumers.â&#x20AC;? A growing number of health centers nationally and in Southeast

Need to know

Federally qualified health center will have hired about 22 people by end of this year J

J Client growth is 50-90 per month, made possible in part by adding two transportation buses J CCiH offers physical, mental health, dental services, plans to add vision and obstetrics/gynecology in 2019

Michigan have expanded their physical health offerings into dental and behavioral health to serve their clients better. In 2016, Central City changed its name from Detroit Central City Mental Health to better reflect its broader health care offerings, namely its forays into affordable housing projects like at the historic Charlotte Apartments at 644 Charlotte St., Peterboro Place at 8 Peterboro, and Clinton House at 99 Kenilworth. The projects total more than 110 units for special-needs and veteran residents. Lepper said renovation of Saint Rita Apartments at 35 Owen St. is expected to be completed in the early spring. Central City was awarded annual tax credits of $510,488 to transform the historic apartment building into 26 affordable-housing units for about $6.8 million. â&#x20AC;&#x153;We have a number of other projects on the drawing board,â&#x20AC;? he said.

Growth plans Central Cityâ&#x20AC;&#x2122;s growth plan is ambitious. It calls for it to build more than a dozen new health clinics â&#x20AC;&#x201D; providing medical, dental and mental health care â&#x20AC;&#x201D; to be surrounded by affordable housing for its clients in Detroit, the rest of Southeast Michigan and eventually greater Michigan and other states. Midtownâ&#x20AC;&#x2122;s service area has a population of 13,422, with approximately 3,944 homeless individuals living in shelters, temporary housing or on

the streets. There are three homeless shelters in its service area, along with 3,500 residents of public housing. Central City also offers an array of social services to the homeless by offering temporary housing for veterans and disabled people, literacy training, employment support and transportation. So far this year, Lepper said, Central City has hired 12 new employees and plans to hire 10 more by the end of the year. To satisfy demand, he said, the health center is looking to buy a seventh building to house employees and serve clients. â&#x20AC;&#x153;We are redefining the way we deliver health care. We have a system called Care Team. We put the consumer in the middle surrounded byâ&#x20AC;? primary care providers, dentists, social and case workers, Lepper said. â&#x20AC;&#x153;Each Care Team will have 300 to 400 consumers assigned to it.â&#x20AC;? Soon, Central City will sport a new five-employee call center to coordinate incoming and outgoing calls, appointments and reminders for appointments, Lepper said. â&#x20AC;&#x153;We saw over 85,000 encounters last year,â&#x20AC;? he said. â&#x20AC;&#x153;At this point the phone rings all the time. We want to greet consumers the right way.â&#x20AC;? The clinic also focuses on getting those customers where they need to be. â&#x20AC;&#x153;Transportation has always been a huge barrier. We provide people with bus tickets to coordinate rides, but the city bus lines are not always reliable,â&#x20AC;? Lepper said. â&#x20AC;&#x153;We identified that problem and I made it a division. It will be huge, a big revenue grower for us. â&#x20AC;&#x153;Some community mental health centers donâ&#x20AC;&#x2122;t have a primary care provider on site. We have everything: dental, primary care, and we are looking at adding obstetrics/gynecology, optometry and vision. They will be our next service lines.â&#x20AC;? Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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Michigan’s gubernatorial candidates weighed in via video during the conference, focusing on the importance of internet access throughout the state. Conference speakers stressed that the next governor would be tasked with making many of the study’s initiatives a reality. “We need to expand issues like telemedicine and broadband to assist people in more rural areas so they can have adequate and top-flight health care, and get connected as well,” said Republican nominee Bill Schuette. “Healthy Michigan (Medicaid expansion) is the law, and it’s not going anywhere.” Democratic nominee Gretchen Whitmer called internet access “a critical issue that means quality of life for seniors. I want to get everyone in Michigan connected. “Ensuring that Michigan is a great place to retire is really important. We want to keep seniors here and thriving in this state. Access to health care is a critical piece of that.”

Research yields recommended calls to action An economic analysis by Public Sector Consultants helped determine the report’s recommended calls to action. The 19 partner organizations, including the Michigan Department of Civil Rights, the Michigan Nonprofit Association and American Indian Health & Family Services, also contributed. “They were with us from the beginning, sharing ideas and information at the roundtables, providing invaluable perspectives, and adding encouragement and enthusiasm along the way,” Paula Cunningham, AARP Michigan state director, stated in the report. The calls to action focus on these areas: chronic disease, home and community long-term services and telehealth and broadband internet. The Public Sector Consultants analysis found: • “If Michigan can reduce the prevalence of diabetes among the senior population (65+) by 1 percent, it could decrease treatment costs by over $32.5 million.” • “If Michigan can delay entrance for 1 percent of the 38,801 Medicaid recipients currently in certified nursing care for one year and keep them on aged/ disabled 1915(c) waivers, the state could save $3.15 million in general fund Medicaid expenditures. By doing so, the savings would allow the state to serve an additional 722 people through other home and community-based services. • “An estimated 368,000 rural Michigan households do not have access to broadband internet. As a result, just over $2.5 billion in potential economic benefit is left unrealized among disconnected households. Rural Michigan residents and their caregivers who do not have adequate access to telemedicine options spend an additional $5,262 in travel expenses and lose $2,314 in wages.” Read the full report at states.aarp.org/wp-content/ uploads/2018/10/AARP-Report-Disrupting-Disparities.pdf

KEY FINDINGS The research report produced key findings to be addressed. Among them: • Health disparities in Michigan that start at birth and continue into adulthood affect the lives of millions of health care consumers in racial and ethnic groups, reported a 2018 W. K. Kellogg Foundation study. Eliminating the disparities could boost the state’s economy by $4.1 billion. • African-American seniors in Michigan fare worse than their white counterparts on several health indicators. The indicators include lower rates of health insurance coverage, more unmet household and personal care needs, higher rates of diabetes and high blood pressure, a higher likelihood of skipping medical care, and lower use of online health care services. • The state falls short on providing sufficient home and community-based services for older adults and people living with physical disabilities.

• Family members are the primary caregivers for older adults. The total estimated economic value of the uncompensated care they provide is roughly $14.5 billion a year. The out-of-pocket costs by family caregivers is nearly $7,000 a year. For Hispanic/Latino caregivers, the cost is $9,000. African-American family caregivers spend nearly 34 percent of their income on caregiving. • Telehealth is seen as a viable solution to getting health care to older adults throughout the state. About a third of the seniors surveyed by AARP are interested in using it. Thirty-nine percent would be interested in using remote patient monitoring to track and send important health information to a provider. • Telehealth has barriers, though. They include lack of understanding about it, privacy concerns, scant computer skills among some seniors, and fear that telehealth might eliminate an in-person visit with a doctor.

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Canadian parents Satish and Poonam Chopra won a $484,564 verdict against Pontiac General for a breach-of-contract lawsuit over a payment to the hospital in exchange for promises their son would join the hospital’s residency program.

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Family wins Pontiac General ‘pay-for-play’ residency case By Jay Greene jgreene@crain.com

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A federal court jury in Port Huron awarded almost half a million dollars to plaintiffs in a lawsuit saying Pontiac General Hospital breached a contract with the parents of a medical school graduate who paid $400,000 believing their son would be accepted into a hospital residency program. Andrew Broder, a partner with Payne, Broder & Fossee P.C. in Bingham Farms, said last week that his clients, Satish and Poonam Chopra, and their son, 33-year-old Varun, felt vindicated in the trial before U.S. District Judge Robert Cleland. “My clients and I are gratified that the claims which we asserted in this case were vindicated by the jury’s verdict. In fact, the jury found in favor of the plaintiffs on every claim which was tried in federal court during the past few days,” Broder said in a statement. CEO Sanyam Sharma of Pontiac General told Crain’s that the hospital is evaluating its options. “We disagree with the jury’s verdict,” he said Wednesday, adding: “Since we got the verdict yesterday, I think it’s a little too early to definitively comment on an appeal, but it is a strong possibility.” In a breach-of-contract lawsuit filed in 2017 in U.S. District Court in Detroit, the Chopras, who live in Brampton, Ontario, contended the family owners of Pontiac General asked for $400,000 in exchange for accepting Varun into the program in the fall of 2016. Chopra received a signed residency contract the same day his father paid the final of three checks, court records show. “Two years ago, my clients paid the $400,000 required entry fee charged by Pontiac General Hospital as a condition of admitting Dr. Chopra into its residency program,” Broder said. “An enforceable agreement was reached by the parties, by which Dr. Chopra would thus be admitted to the program. But the hospital thereafter breached the agreement by declining to let Dr. Chopra start the program, and to add insult to injury, the hospital refused to return the funds which my clients had paid. That is why this lawsuit was filed." The jury deliberated about 3 1/2

Need to know

JJCanadian parents won a $484,564 verdict against Pontiac General JJParents of would-be resident paid Pontiac General $400,000 with promises son would join hospital’s program JJPontiac General owners contended it was a donation and not linked to acceptance into the program

hours before coming back with its unanimous verdict. Broder called seven witnesses to the stand, including the three Chopras, Pontiac General’s family owners CEO Sanyam Sharma and COO Priyam Sharma, hospital residency manager Carol Samson and Nikhil Hemady, M.D., hospital program director and chief of staff. The jury rejected all defenses and claims by the Sharmas, answering “yes” to the questions “Did the plaintiffs prove existence of residency contract?” and “Did the plaintiffs breach the residency contract?” The jury found that Varun did not first breach the contract, as the Sharmas contended, according to the verdict form released Tuesday by the court. The jury awarded $484,564 in damages to the Chopras. “I have practiced law for 45 years, both in and outside of the health care arena,” Broder said. “Except for what was done by the hospital here, I have never, ever, heard of any hospital charging medical school graduates to get into a residency program. I hope that, as a result of this case, such an outrageous practice never occurs again.” Pontiac General emerged from bankruptcy in 2016 after the Sharmas bought the hospital and began turning it around. From 2009 to 2014, Pontiac General lost more than $73 million and had gone through several owners. While Pontiac General is licensed for 306 beds, only about 30 are staffed in a medical-surgical unit that ranges occupancy from 25 percent to 50 percent. It also operates a 30-bed adult psychiatric unit that averages more than a 90 percent occupancy rate. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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OPINION EDITORIAL

COMMENTARY

On gerrymandering For Schuette, laws aren’t a salad bar — except when they are and marijuana

ballot proposal that would create an independent commission to oversee political redistricting every 10 years is the right idea at the right time. Proposal 2 on November’s ballot, known as “Voters Not Politicians,” would amend the Michigan Constitution to create a 13-member commission to draw the lines for legislative districts in Michigan. Now, districts are drawn by whichever party controls the state Legislature. There’s a good business case to be made for the proposal. Its aim is to create districts that are more competitive, that don’t provide an advantage to one party — as many of Michigan’s gerrymandered districts now do. Those “safe” districts provide little incentive for lawmakers to be responsive to the concerns raised again and again by business leaders — improving roads and other infrastructure, and fixing an educational system that has fallen further and further behind and exacerbated a talent crunch. Part of the reason for that lack of responsiveness is term limits, which curtail relationships that would normally be built over years. The Voters Not Politicians proposal would restore some of those incentives. Some of the tactics of this proposal’s backers have left a bad taste in the business community’s mouth. There was no excuse for the aggressive targeting of Michigan Chamber of Commerce board members when its foundation was fighting to keep the proposal off the ballot. But those tactics should not take away from the potential benefits of a more engaged electorate and more responsive politicians. Pot points Proposal 1 would legalize recreational marijuana in Michigan. Michigan would join nine states in this. There are some good non-business arguments for the proposal, but some points to consider as you weigh your vote: n It’s hard to see anything good that would come of the proposal for employers. Many in industries where safety is a primary concern have a hard enough time finding workers who can pass a drug test. n Promises of a massive tax revenue benefit are overblown. Supporters of the proposal estimate the state could net $130 million a year in tax revenue. That amounts to about 0.2 percent of total state spending. The roughly $30 million that would put in the state’s general fund would pave only 30 lane-miles of road, for example. The Michigan proposal’s taxes fall short of those in several other states that have legalized. n Cannabis is a growing business that could offer entrepreneurial opportunities. But it’s likely to come to be dominated, like alcohol and tobacco, by a few big, out-of-state players. This may be a good example of “caveat emptor” — buyer beware.

ttorney General Bill Schuette has this folksy saying about his principled approach to defending the state’s laws in court that goes like this: Michigan’s constitution and laws are not a salad bar. He made this argument repeatedly in defending his decision to go all the way to the U.S. Supreme Court defending Michigan’s voter-imposed ban on same-sex marriage. He lost that battle. “An attorney general is not an optional exercise where you pick and choose like some salad bar,” Schuette said before his 2014 re-election. “You defend the (state) constitution.” Schuette made a similar argument Tuesday when he issued a statement that appeared to be an attempt to distance himself from Gov. Rick Snyder’s Unemployment Insurance Agency and its “flawed” computer system that falsely accused nearly 44,000 jobless workers of fraud. “As Attorney General, it is my responsibility to defend all of Michigan’s laws, whether I personally agree or not, and regardless of whether the law is a good one,” Schuette said. “The MiDAS computer system was flawed. The result of this flaw was 44,000 people being wrongly accused of fraud and 186 people wrongly charged by local prosecutors’ offices, all of whom are terrified of the long-term consequences. The MiDAS system failed Michigan, and all of its citizens.” What the statement didn’t say is Schuette has vigorously defended the state in a lawsuit brought by workers and was successful in getting it tossed in the Court of Appeals before the state’s highest court granted the plaintiffs a hearing Wednesday in Lansing. The issue for the Michigan Supreme Court on Wednesday is a technical one: Did plaintiffs wait too long to sue? Like a lot of moves by the Republican attorney general, Schuette’s statement seemed politically calculated — possibly an attempt to inoculate himself from an opponent’s ad in the final four weeks of his race for governor against Democrat Gretchen

Whitmer. That’s because when it comes to Schuette’s legal strategies as attorney general, there’s often some nuance and a whole lot of maneuvering involved. In one of their latest tussles, Whitmer says in television ad that “Bill Schuette thinks insurance companies should be allowed to deny coverage to people with pre-existing conditions.” Her claim is based on Schuette’s yearslong effort to deep-six the Affordable Care Bill Schuette Act of 2010. He and other Republican attorneys general took their fight to derail Obamacare to the U.S. Supreme Court — and lost. Schuette has called Whitmer’s ad a lie, citing his past statements favoring a ban on insurance companies denying someone coverage because of a pre-existing medical condition. Whitmer’s ad seems to put words in Schuette’s mouth that he never directly said. But don’t actions matter more than words? Schuette tried to get the law overturned in nine separate lawsuits that challenged everything from the constitutionality of individual mandate to the state-level marketplaces, in which health insurance companies were required to sell plans with coverage of pre-existing conditions. For Schuette to now say he favored some parts of Obamacare is akin to choosing spinach over ro-

President Donald Trump. It seems to me that the logical way to get rid of a leader you do not like in a democracy is to use the ballot box. Watching these mobs protest a duly elected leader seems to upset most citizens of both political parties. The biggest problem is that we have not seen enough leadership from both parties to denounce this sort of activity. All political leaders, both local and federal, have to stand up and publicly reject that type of uncivil protest.

We have had rallies and protests forever; they’re part of America. I remember when Gene McCarthy was running for president, and he got all sorts of folks attending his appearances protesting the war. Lots of rallies, lots of people, but no riots. The first political rallies that turned into mobs in the late 1960s were during the 1968 Democratic National Convention in Chicago. In our nation’s history, we have had lots of rallies, and that is how it should remain.

CHAD LIVENGOOD clivengood@crain.com

maine lettuce from his own proverbial salad bar. There have been other instances when Schuette has walled himself off from Snyder, like when he sided with Detroit pensioners in the city’s bankruptcy and argued that the state constitution shields those benefits from being reduced. A federal bankruptcy judge disagreed with Schuette and every labor union in town. Schuette also declined to represent the state in the final appeal of a teachers union lawsuit challenging the constitutionality of a 2010 law that docked school employees’ pay by 3 percent to fund their retiree health care plans. And Schuette recently made another curious legal move, informing the state insurance commissioner that he may not defend the state’s auto no-fault insurance law in a federal lawsuit brought by Detroit Mayor Mike Duggan seeking to overturn the 45-year-old statute. Schuette has moved to create a “conflict wall” within the Attorney General’s Office in the event that he may side with Duggan and challenge the constitutionality of the law — and let other attorneys in his office defend it. “That’s just an option. I haven’t made any decision yet,” Schuette said in an interview last week with Crain’s. “It’s better to be smart and thoughtful ahead of time should there be some wrinkle you don’t anticipate and we’ll see what happens.” It’s unclear what unforeseen “wrinkle” Schuette may be hedging against. He’s got less than three months left in office as the state’s chief law enforcement officer, and the lawsuit isn’t scheduled to get a hearing until January. But what is clear is the attorney general sometimes does like the taste of the salad bar.

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

It is still a mob

e are seeing a huge decline in civility. For some reason, many among us seem to be happiest when a rally turns into a mob. We have heard too many leaders feel justified in encouraging mob action in protest of our current leadership in the White House, pushing people to hound and harass the other side personally at every turn and plumbing new depths in inflammatory language. This all seems to be caused by dis-

KEITH CRAIN Editor in chief

like, to the point of obsession, against

Mobs are much more common in countries without functioning democracies. In spite of the rhetoric you might hear, we are still one of those. But the more our politics turns on incitement and disrespect, the greater the chance of violence and of losing our freedoms. Political protest is a part of our being and a grand American tradition, but allowing political differences to become an excuse for mob action is the true threat to our democracy.

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Teamwork, self-awareness essential to collective cybersecurity O

n the eve of the seventh annual North American International Cyber Summit, where leaders, strategists and operators gather to collaborate on ways to solve national cybersecurity problems, we need to take stock of our progress in addressing cyber threats to Michigan government, businesses and citizenry. While much progress has been made over the last eight years to make Michigan more cyber secure, our ability to be “self-aware” is a critical component toward making sustained progress in solving some of our toughest cybersecurity problems. It’s time for us to ask and answer some tough questions. Are we thinking, planning and operating as a single team? Are we breaking down cultural barriers and bureaucratic processes that hinder our ability to share critical data and information? Are we caught in the rut of chasing tactical outcomes, across hundreds of cyber initiatives, instead of focusing on a handful of strategic cyber priorities? Consider the impact of cyberattacks on state and county government, business and private concerns right here in Michigan. The growing threat from adversary states, non-state actors, cyber criminals, and our own lax implementation of policies within our organizations are not hypotheticals. Given the degree to which our civilian and military infrastructure depend on cyber-enabled technologies, continued risks in the cyber domain present a serious and growing challenge to state government, industry, academia, our citizenry and our nation. The upcoming Cyber Summit provides us a timely opportunity to renew our sense of urgency and strengthen our teamwork and ultimately our outcomes. As we gather for the summit, we must stretch beyond discussion and collaboration and identify ways we can think, plan and act together. Let’s continue our

OTHER VOICES Betsy Freeman

legacy as a cyber leader by: Creating a roadmap for “cyber synchronization” across Michigan industry, government and academia; and with surrounding states, to eliminate redundant initiatives J

and incentivize joint execution supporting a “whole of nation” approach to collective security. J Agreeing on a handful of strategic cybersecurity priorities, aligned with federal infrastructure and national security objectives, to focus and synchronize our efforts, investments and outcomes internally and with other states. J Thinking, planning and acting together to eliminate “silos of excellence,” incentivize cultural changes and override historical precedent when warranted is essential to sustained progress. The cyber landscape changes rapidly and so must we. J Encouraging “self-awareness” by

building an environment where it is acceptable to challenge the status quo and openly discuss fact-based decision making. This will drive conversation around how we can do better not just how we can do more. Self-awareness means being able to test and fail; it means being able to innovate and create near-term opportunities because we can ask and answer tough questions of ourselves. As we gather for the upcoming summit, we must celebrate the tremendous progress made to date but also renew our sense of urgency and teamwork. Let this “call to action” reinvigo-

rate our commitment to making Michigan and our nation more cyber secure. Only by harnessing our strengths, assessing and acting on our weaknesses and partnering with surrounding states will Michigan continue its strong legacy of national cyber security leadership for many years to come. Betsy Freeman is CEO of Radius Advisory Group, LLC, Holland Michigan; former deputy chief information officer for Business Process and Systems Review, Office of the Department of Defense, chief information officer, Pentagon, Washington, D.C.

TALK ON THE WEB

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Re: Sears takes steps to file for bankruptcy *Yawn* The guy has gotten rid of almost everything good about Sears. This has been an embarrasing theatrical performance. How obvious has it been? Ask anyone you know when was the last time they were actually in one of these stores, and they will immediately respond with “...wait ... they are still in business ?” Steve Smith

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FOCUS

THE OUTDOOR ECONOMY

GETTY IMAGES/ISTOCKPHOTO

MCCOOL OUTDOOR LLC

GETTY IMAGES/ISTOCKPHOTO

PHILIP HUTCHINSON

Backpacking (clockwise from top left), fishing, wakeboarding and canoeing are among the popular activities in Michigan’s outdoor economy.

Rethinking Michigan’s natural resources DNR forms council to build partnership between business, conservation

By Dustin Walsh

dwalsh@crain.com

In 1869, Michigan produced 95 percent of the nation’s copper, almost exclusively from mines in Upper Peninsula’s Copper Country. In 1880, Michigan produced as much lumber as the next three states combined. Michigan was a natural resources epicenter. It still is, but hard-hatted miners and axe-toting lumberjacks have been replaced with Patagonia-sporting hikers and G. Loomis-wielding

Need to know

J DNR forms Outdoor Recreation Advisory Council J

Seeks advice of business community

Plan is to encourage economic growth and build partnerships between business and conservation J

anglers. Instead of chopping down trees, we’re photographing them. Instead of cutting rocks, we’re climbing them. Michigan’s outdoors is postcard

country. The Department of Natural Resources took a step earlier this year to expand Michigan’s growing outdoor recreation economy — which accounted for $26.6 billion in consumer spending and 232,000 jobs last year — by forming the Outdoor Recreation Advisory Council to seek the advice of business owners, store managers, CEOs and conservation leaders. Michigan is now the 10th state to form such a council to increase access to the outdoors, encourage economic growth and build

partnerships between business and conservation. “In this state, we have world-class resources,” said Keith Creagh, director of the DNR. “We had 27 million visits at our 103 state parks last year. What we have is special in Michigan, but how do we connect that to the local urban and rural economies? How do we position natural resources to help business, the overall economy and the quality of life here? That’s where a group like this can help us.” SEE COUNCIL, PAGE 14

In this package JJDNR forms council to build partnership between business, conservation. This Page JJBig bikes make for big business in Traverse City. Page 11 JJLittle Bay Boards’ paddleboards are also works of art. Page 12 JJSkis built for the Keewenaw. Page 14 JJA former marketing executive made hunting and fishing his business. Page 16

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Jason Lowetz, founder Einstein Cycles and Bearclaw Bicycle Co.

BEARCLAW BICYCLE CO.

Big bikes make for big business in Traverse City By Tom Henderson thenderson@crain.com

Though Jason Lowetz was a professional bike rider, of both road and mountain bikes, and ran a bike shop in California, moving to Traverse City in 2009 had nothing to do with the robust cycling culture there. And it had nothing to do with what would later become his first business, Einstein Cycles LLC, or his second business, Bearclaw Bicycle Co., a retailer for custom-designed, expensive carbon-fiber and titanium bikes. Lowetz and his girlfriend, Kristie, who would later become his wife, had both moved to California from St. Ignace and wanted to come back to Michigan, and her mother had a home in Traverse City they could rent. It just turned out to be a happy coincidence that people in Traverse City were as passionate about cycling as he was. Jason was also a musician, and the plan was to come back to Michigan, focus on his music and finish an album. Soon after their return, Jason and Kristie married; soon after that, Kristie was pregnant. Instead of continuing to dream about a music career, “I needed a job,” he said. “I applied to be a manager at a bike shop and never heard back. So, I decided I’d start a bike shop out of my house. I converted the garage and started doing bike repairs.” Business boomed — briefly. Soon, alas, a city zoning official showed up at his house, told him he was in violation of zoning ordinances and shut him down. That was the summer of 2011. Joining the local cycling community when he arrived in town, Lowetz said he realized that while the other bike shops did brisk business and sold high volumes of bikes, they didn’t generally stock the higher end road and mountain bikes he preferred and which he had sold in California. He thought the bike culture in Traverse City was big enough to support a store that catered to that audience, and he leased out a space in a small

Need to know

JJJason Lowetz founded Einstein Cycles

in 2011 to sell high-end bikes to Traverse City’s avid cyclists

JJSaw a market for custom fat-tire bikes and launched Bearclaw Bicycle Co. in 2015 JJExpects revenue of $1.2 million at Einstein and $375,000 at Bearclaw this year

strip center at Four Mile Road and Munson Avenue, east of downtown. Lowetz was reading an autobiography of Einstein at the time. He thought the name would imply that shoppers were making a smart choice by buying their bikes there. He used his wife’s credit card and a small investment from a friend to get started. To sell high-performance Focus bikes, he placed the minimum order they’d take to start him as a retailer: $10,000, which bought him five bikes. “That gave me a legitimate brand in the store,” he said. “I basically worked 100 hours a week for a couple of years,” he said. “It turned out there was a need for high-end bikes for enthusiasts. We were pretty busy right away. It helped I was active on the local bike scene and winning races.” In its third year, Einstein did $1 million in sales. “That was the same volume my store in California was doing after 50 years in business,” he said. He said revenue has been steady, with profit margins increasing gradually. He expects Einstein revenue to be about $1.2 million this year.

Cashing in on a craze Four years ago, the fat-tire bike craze exploded in Traverse City. Since Lowetz already had a clientele that was used to spending more for a bike, it made sense to him to become the first retailer in the area to really start pushing those bikes, which have much fatter tires than typical mountain bikes — about five inches wide — and can easily navigate trails in northern Michigan, in both heavy snow in winter and deep

sand in the summer. They typically retail for between $1,600 and $4,500. “I sold 100 fat-tire bikes in 2014,” said Lowetz. “Fat-tire bikes just exploded. We’re a small community here, but I was the No. 1 or No. 2 fattire retailer in all the Midwest.” That year, Einstein carried just one line of carbon-fiber fat-tire bikes — which are lighter, hold up better to the pounding of trail riding and are more expensive than standard bikes — “and I couldn’t keep them in stock.” He had an epiphany: Why not go for the really high-end of the fat-tire market by buying component carbon-fiber parts and making his own bikes? And sell them under their own brand, Bearclaw? In mid-2014, Lowetz got frame and fork samples from a variety of manufacturers but decided, instead, to design frames to his own specifications, working out geometries he thought would be better suited for the rugged terrain of northern Michigan trails. Lowetz talked to American manufacturers about making components of his design, but chose a Chinese supplier instead. He said it beat American suppliers on price, quality and on being more responsive to his needs as they evolved. But he had to commit to 100 carbon-fiber frames, which meant borrowing $100,000. “I went to the bank and said, basically, ‘I need a bunch of money.’ They saw what we’d been doing the last three years and said OK.” The winter of 2015, Lowetz ordered the frames, half medium sized and half large, and sold his first bike, a fat-tire model he called the Balthazar. In 2016, he expanded the Bearclaw line to include titanium bikes called the Thunderhawk, the Beowulf and the Frank. Titanium bikes are heavier than carbon-fiber bikes but have a smoother ride and are more durable. A second Chinese manufacturer makes the titanium components to Lowetz’s design. SEE BIKES, PAGE 12

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SPECIAL REPORT: THE OUTDOOR ECONOMY

Catch a wave

Little Bay Boards’ paddleboards are also works of art By Tom Henderson thenderson@crain.com

Lake Affect is a shop in downtown Petoskey. It carries clothes and home decor, but its focus is on creations by local artists. It might seem like an unlikely retailer for stand-up paddleboards. Until you’ve seen the boards made by Jason Thelen, the Native American founder of Petoskey-based Little Bay Boards LLC. His wooden paddleboards and wake boards — smaller boards towed behind motor boats — are visually stunning works of art, with their long thin strips of hardwood and colorful, eye-catching geometric inlays. The boards are so artistic that store owner Molly Kircher admits she’s a half-hearted retailer, at best. “His boards are just so beautiful, very few people who see one don’t want one, even if they don’t paddleboard,” said Kircher, who has three

Need to know

JJThelen, a descendant of Chief Petoskey, started making boards in 2013 JJHe makes eight boards a month that retail for $900 to $2,600 or more JJBoards are sold almost exclusively through the Internet and word of mouth

on display. One, made of knotty pine with a sunburst design, hangs behind her check-out counter. “I price them really high because I don’t want to sell them. And we have two at our house. They’re so beautiful, you think, ‘How can I put this in the water? How can I pull it up onto sand?’” Kircher said she found Thelen when she was looking for local artists to stock in the store, which is in its sixth year. “He was just starting out and I saw some of his boards and asked him if

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we could sell them,” she said. “Jason is an artist, but he also delivers product on time. He’s always reliable, a customer-oriented humble guy.” Thelen grew up in Petoskey and is the great-great-great-great-great grandson of Chief Ignatius Petosega, a legendary figure among the Odawas and the namesake of both the city and Michigan’s state stone, “Petoskey” being the derivation used by white settlers. Thelen dropped out of high school and took a series of jobs working in local restaurants. “I realized I was never going to get anywhere in life doing that, so I got into carpentry,” he said. In 1999, he took an entry level job cleaning up shingles and debris for a local builder, JR Construction Building & Design, whose owner, John Plichta, eventually became his father-in-law. Over time, he worked his way up to being a finish carpenter. In 2008, the bottom fell out of the local building market. His father was a carpenter with a small wood shop, and to make ends meet, Thelen began building custom furniture on the side.

BIKES FROM PAGE 11

Lowetz is still waiting to see how President Donald Trump’s tariffs on Chinese imports will affect his business. His clientele of avid bikers willing to pay for a premium product may help insulate him to some extent, but “yes, we will be affected. All businesses will be affected. It should be a premier time for someone or a group of someones to start a bicycle frame and/or component manufacturing business here in the U.S.” Bearclaw sells fat-tire bikes, mountain and gravel-road bikes with tires two to three inches wide and road

A fateful decision

Moll in Pe his b stor

In 2011, Thelen borrowed a paddleboard and went out in Good Harbor Bay in the Leelanau Peninsula, spending what he describes as a blissful day paddling around. Later, “I had a few Coronas and decided I wanted to buy a paddleboard, but I couldn’t afford one. So I got online and saw I could buy a kit and build my own.” He also found some forums on board making. “The great world of Google can answer everything for you,” he said. He also reached out for advice and formed a friendship with Paul Jensen, a legendary builder of wooden surfboards who became his mentor. “He invented hollow-framed boards and I had a million questions for him.” After a year, Thelen had made his first board, a small, eight-footer for Shawni, his 9-year-old daughter. “It was made with white and red cedar, a lot of salvaged materials I found, and it was gorgeous. Six years ago, people hadn’t seen wooden paddleboards,” he said. People would see it at the beach and ask him and his wife where they

had bought it. After a while, “My wife said, ‘Did you ever think of building one for sale?’” Jensen helped him blueprint a full-size paddleboard, for which Thelen paid him a royalty. By then, the recession had ended, and JR Construction was booming again. Thelen began building boards, slowly, after a typical long day working for his father-in-law. In 2013, Molly Kircher offered to pay for his supplies up front if he would build her some boards for her shop. A year later, Thelen created a Facebook page for his boards, “and every time I posted a photo, more people would like it,” he said. By 2015, he was making three boards a month in his dad’s garage wood shop, working 100-hour weeks between his day job and the paddleboard business. Boards are made of white cedar milled in Boyne Falls, red cedar from Washington State, with accents of aspen, walnut and as much locally salvaged wood as possible, and weigh between 27 and 30 pounds. He doesn’t scrimp on the detail work, which is time consuming.

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bikes with tires one to two inches wide. It operates out of the same space as Einstein, which has doubled its square footage since opening. Today, the average Einstein bike sells for about $1,500. Bearclaws start at $3,750 and go as high as $10,000. About half of Bearclaw’s customers take one of the standard carbon-fiber or titanium bikes Lowetz has designed. The other half choose to customize their bikes, mixing and matching wheel sizes, gears, bearings, brakes and other components with a wide range of costs that can drive the finished price much higher. “We’ll sell well over 100 Bearclaw bikes this year. It just keeps growing,” said Lowetz. That will put revenue at

more than $375,000. Lowetz also sells apparel and drink tumblers under both the Einstein and Bearclaw brands. Matt Harris is a big fan of the Bearclaw brand. Ironically, he owns his own business, Epic Powersports, which sells dirt bikes, the ones with internal-combustion engines that can be found on the many miles of off-road-vehicle trails in northern Michigan. “As I got older, I realized trees hurt,” joked Harris, talking about the perils of missing a turn and careening into the woods while zipping around the forest on a motorized bike. “A lot of us dirt bike riders migrate to bike riding.” He’s also become a Bearclaw ambassador. “Matt has sold 10 Bearclaws

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PHILIP HUTCHINSON

Molly Kircher, owner of Lake Effect store in Petoskey, with Jason Thelen and one his boards, which she has hanging in her store.

“I never saw my kids. One day my wife sat me down and said, ‘You can’t do this anymore.’ This was during a heart-to-heart over a beer at midnight. I had left for work at 6 a.m. and just got home. She told me this heart-breaking story. My daughter had this nappy-headed doll she had started calling her dad and kissing it goodnight every night,” said Thelen, who has thick, coarse hair. “I quit my job and started amping up the board business,” he said. Standup Journal Magazine, a publication for board enthusiasts, profiled Thelen and his boards, with photos showing his artwork to full effect. Thanks to the journal, he eventually shipped boards to Australia, Nova Scotia, Texas, New York, Hawaii and Minnesota. Orders started piling up. “I could only make three boards a month in my dad’s garage, and that was really pressing it, and I was starting to get booked up four months in advance.” It was time for a larger location with for us through his networking,” said Lowetz. Lowetz said his best marketing tool has been Instagram. “I post photos of our bikes, and I get reaction from around the world. It gets me more connected than I ever imagined. I sold a bike to someone in Denmark this morning, and we’ve sold to the U.K., Mexico and across the U.S. I had a post recently that reached 20,000 people. I posted a photo four days ago and 14,000 people have seen it and 1,265 liked it. I posted a photo of a new fork and asked people to name it and 17,000 people looked at it and 150 suggested names.” Lowetz also markets the brand through a person he knows well who

more equipment, more capacity and a more formal business structure. In 2016, Thelen formed his LLC. A long-vacant factory on the south side of Petoskey, what had formerly been Continental Structural Plastics, had been renovated and converted into space for a handful of small businesses and artists. Thelen has a 35-foot by 75-foot space near the front of the building and one full-time and two part-time employees. There are computer-controlled cutting tools available, but Thelen isn’t having it. “I mill everything with a table saw. I do it old school. Salesmen keep trying to sell me saws with digital readouts. ‘How much do they cost?’ ‘$10,000.’ Mine cost $450,” he said. Thelen is up to eight boards a month, now, and plans to ramp up soon to 12 a month. The paddleboards range from $1,500 for a standard board to $2,600 for the average custom board to as much as $4,000 if the customer wants something particularly artistic, such as a recent customer of Latvian descent who wanted ancient Latvian symbols inlaid throughout the board. Wakeboards are generally $900 to $1,200. “This summer was ass-kicking for me,” said Thelen. “I’ve been unbelievably blessed. I’m a high-school dropout. I don’t know business. But I’ve been able to grow a little hobby in a garage into a business.” In addition to boards, Thelen now sells Little Bay Boards merchandise, including caps, long-sleeved shirts, T-shirts and insulated tumblers. Thelen doesn’t sell his boards through any retail outlets besides Lake Affect. He does all of his business through the Internet and word of mouth. “I sell to someone and the next year I sell to seven of their neighbors. I got a call from a guy in Corpus Christi, Texas, last week. He saw a board on top of a car when he was at Whitefish Point in the UP and asked the guy where he got his board.”

Teacher comes calling Rick Jordan of Gaylord is a loyal customer. A retired supervisor at Great Lakes Energy Co., he was born and raised in Florida and spent a lot of time surfboarding. “Three years ago, I started seeing paddleboards, and I thought, ‘How great would that be?’” said Jordan. He started Googling and came across Thelen on Facebook. “He was still working out of a garage, then, and I messaged him: ‘Hey, I want one of your boards.’ I told him, ‘I might have special needs, I might be a pain in the butt.’ “I had some design ideas. I wanted to use the board in fresh and salt warides in area races under the moniker Chet Bearclaw, with a wig, fake beard and a mountain-man look. He has his own Facebook page. Lowetz currently operates Bearclaw as a DBA but is in the process of setting it up as a separate LLC. “It’s its own creature. It’s its own brand,” he said. He is leaning toward hiring an experienced bike-store manager to manage the Einstein brand while he continues to grow Bearclaw. He has six employees, who split their time between both operations, but two of them will be at Bearclaw exclusively once the LLC is finalized. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

ter and be able to ride waves,” said Jordan. What he had in mind was a paddleboard that could also sort of double as a surfboard. What that would require would be a board with a big bow in the bottom, rising up at each end and not flat like a typical paddleboard. “He exceeded all my expectations. His craftsmanship in woodworking is unlike anything I’ve ever seen, and I’ve been around a lot of carpenters. I hang mine up in my house when I’m not using it. It’s a work of art. People come over to the house and they just want to look at it. When you’re out paddling, people come over to look at it and ask you where you got it.” Chris Davis is a wood-shop teacher at Henry Ford II High School in Sterling Heights. He said he thought it would be a cool project to have his students form small teams and make wooden stand-up paddleboards during the last school year. He started Googling around, too, and came across Thelen’s work. “I saw a lot of boards, and his just stood out. I emailed him and said, ‘Is it OK if I work for you for free for a week?’” said Davis. After the school year ended last June, Davis went to Petoskey and got a hotel room for a week, learning as many tricks of the trade as he could. "The week I was there, I couldn't believe how many people had heard about him and were coming in to see him and his boards. I said to him, ‘How do you ever get things done?’ “His skill is outstanding. His boards are night and day better than any boards I’ve seen out there,” said Davis, who plans to have his shop classes make 10-12 boards this year.

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SPECIAL REPORT: THE OUTDOOR ECONOMY

A ski built for the Keewenaw By Tom Henderson thenderson@crain.com

Jeff Thompson was one of the lucky graduates in the 2012 class of mechanical engineers at Michigan Technological University in Houghton. As soon as his last exams were over, he had a job waiting for him. It wasn’t in the auto industry, where a lot of Tech’s engineers go. It wasn’t even in engineering. It was making skis, something he’d been doing since he was in high school, at his own company, Shaggy’s Copper Country Skis in Boyne City. The company’s name is a tribute to Thompson’s family heritage. Shaggy was his great-great uncle, Shaggy Lehto, a blacksmith in the Upper Peninsula town of Kearsarge in the Upper Peninsula. In 1908, having grown tired of working with metal, he decided to make three pairs of wooden skis to better navigate the 300 inches of lake-effect snow that falls in the Keweenaw Peninsula each year. Copper Country is what the Keweenaw Peninsula, which juts out into Lake Superior, is called, for the millions of dollars and tons of copper that came out of its mines in the 19th and 20th centuries, when it was the largest copper-producing region in the world. Wood from white pine in the northern Lower Peninsula built the nation’s new houses in the late 18th century, and copper from the U.P. wired them for electricity. Europeans, primarily Finns, left the old country to work the mines. Shaggy was one of the few Finns in the area to make his living above ground, and he left a family legacy of skiing. One of the three pairs he built is still in the family. While Jeff was raised downstate, in South Lyon, most of his family was born in Kearsarge, including his father, John, who is his partner in the business. “I grew up ski racing. In the winter I was on snow six days a week and the seventh day was spent traveling to a race,” said Jeff. In 2004, he made a surfboard. “That taught me how to work with fiberglass and epoxy,” he said. The next year, he and his brother, Jonathan, began making skis. “I cut a ski apart and was going to put the tip on a bike and have a ski

COUNCIL FROM PAGE 10

Michigan formed the council in May, the first Midwest state to do so. Members of the council, which has only met twice since its creation, include: Suzanne Miller Allen, director of community responsibility for Blue Cross Blue Shield of Michigan; Bo Brines, owner of Midland-based Little Forks Outfitters; Troland Clay, president and CEO of Mno-Bmadsen, the non-gaming investment arm of the Pokagon Band of Potawatomi Indians; Chris Lampen-Crowell, co-owner of Kalamazoo-based Gazelle Sports; Linda Hubbard, president and COO of Carhartt Inc.; Jonathan Jarosz, exec-

Need to know

JJShaggy’s custom skis founded in 2012 JJFamily business on track to sell 1,000 skis this year JJSkis made from as much locally sourced material as possible

bike. When I cut it, that was the aha moment,” said Jeff. “I said, ‘This is wood, fiberglass and plastic. We can do that.’” Their father owned his own home construction company in South Lyon, so they had access to all the tools they needed and access to advice, too. A part-time business supplying family and friends, and then others as word-of-mouth spread, was born. In 2008, as Jeff was heading off to college and the economy collapsed, John got seriously into making skis, too. In November that year, Shaggy’s Copper Country Skis was formally created as an LLC. During college, Jeff spent his summers and all the breaks during the school year making skis in the family barn.

Time to move north In the spring of 2011, “I got a call from my dad,” said Jeff. “He said, ‘We just sold the house. We’re moving up north. You need to find a home for Shaggy’s.’” The Thompsons already owned a place in Boyne, which is where they were moving to. “I drove down to Boyne the next day from Houghton to look for a building to rent,” said Jeff. He found an abandoned Knights of Columbus hall outside of town. “We knew if we wanted to make something of this, we needed a storefront. We were asking $500 for a pair of skis, and people needed to be able to come in, see what we had and try them on.” By August, the building had been renovated and they were making skis. The Thompsons set a target of selling 200 pairs of skis. In 2012, their first full year, they sold 250. A little over two years ago, their landlord told them he was selling the building, and Shaggy’s moved to a former freight train depot just

John (left) and Jeff Thompson with some of their custom skis.

utive director of conservation group Heart of the Lakes; Andy Lindsay, vice president of sales in the Americas for Groupe Beneteau in Cadillac; Chris MacInnes, president and co-owner of Crystal Mountain Resort; Tracy Mayer, owner of Traverse City-based Backcountry North; Jeff Poet, president and co-owner of Gaylord-based Jay’s Sporting Goods; Matt Ruiter, general manager of bicycle wheel manufacturer Velocity USA; Chuck Smith, CEO of Hemisphere Design Works; William Smith, CFO of Detroit RiverFront Conservancy; Lindsay Struve, store manager of Recreational Equipment Inc.’s Ann Arbor store; Paul Vitrano, vice president of global government relations for Polaris Industries; Dennis West, president of Mar-

quette-based community investment organization Northern Initiatives; and Steve Nadolski, vice president of national commercial accounts for Detroit-based Amrock Title Insurance Co. Nadolski, 53, said the council’s goal is to pinpoint the emerging trends of younger generations and determine ways to capitalize on potential outdoor spending. “Young people today are not looking for the same outdoor recreation activities we did as kids,” Nadolski, an avid hunter and angler, said. “When I grew up, you hunted, fished and camped. Now it’s trending differently and our goal is to figure out what resources we can pull together to follow those trends and provide that feedback to the state.”

Younger generations are indeed hunting and fishing less than their elders, according to data from the DNR. The number of unique customers purchasing hunting licenses fell 3 percent from 2015 to 2016. Fewer than 700,000 licenses, many to the same customer for different species, were issued that year. Fishing license sales grew by 1 percent that year, but are still down 41 percent since they peaked in 1988. There are roughly 70,000 fewer anglers in Michigan now than in 2009, according to research by Michigan Technological University. But 63 percent of Michigan residents still participate in outdoor recreation, according to the Outdoor Industry Association.

SHAGGY’S COPPER COUNTRY SKIS

Activities such as hiking, kayaking and even picnicking are on the rise, according to a survey by the DNR. Of those surveyed, 32 percent participate in canoeing, kayaking, standup paddle boarding or wind surfing and 34.1 percent hike or backpack, only 6 percent behind fishing. “People are out exploring, they are just not doing what they used to do as much,” said Janet Ries, vice president of marketing for Carhartt, who serves as a stand-in for Hubbard when she’s unable to attend the council’s meetings. “We’re at a crossroads where the outdoor industry is changing, and we’re all getting in the same room to figure that out and how to build stewardship, economic development, education and health and wellness; connect-

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SKIS

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west of downtown Boyne, on M-75, the main drag into town. It was built at the turn of the 20th century and used to store straw and hay. In the 1990s, it was a craft brewery — a brewery ahead of its time that went out of business — then a gym, then a wood shop. This time, they bought the building. They project sales of 1,000 pairs this year. “Every year, we’ve grown a considerable amount,” said John, taking a break from running a saw in the back of the shop. “We could make more, but our whole thing is to grow at a slower pace and control product.” As Shaggy’s proclaims on its website: “Shaggy’s Copper Country Skis was founded with the intention of producing a ski that wasn’t a slug! For too long, the skiing community has been plagued with mediocre products built for the masses. Shaggy’s plans to change that. Our mission is to build a ski that takes all you can give it and comes crawling back for more, day after day.” Shaggy’s is a family business, though it has four employees who aren’t family. Jeff is president, John is vice president and Jeff ’s mother, Shari, is office manager. Jonathan has his own business, making stencils for people needing to paint things on the surface of parking lots, but still helps out at Shaggy’s, too, as does his wife, Lindy. Jeff ’s wife, Stephanie, runs their social media, which drives a lot of online sales. The front of Shaggy’s wood shop serves as a retail outlet. Jeff decided years ago not to sell his skis in other retail ski stores. “There’s not enough margin to make sense trying to sell in other stores. And they’d have $100,000 worth of Rosignol skis on the wall and $3,000 worth of Shaggy skis. They’d have a responsibility to push Rosignol,” he said. “We also started doing a lot more custom work, and you can’t (have) a middleman doing that. Custom work allows us to not have to focus on volume.” At the low end of his custom ski business, skis go for about $750. “You can get pretty easily to $950 and to $1,500 or $1,600 at the very top end,” he said. All Shaggy’s noncustom skis are branded with names from the Keweenaw, once bustling towns now mostly verging on ghost status, like Ahmeek, Kearsarge or Hubbell, or places Lake Medora, Lac La Belle, the Phoenix Mine or Brockway Mountain. They range in price from ing these companies and the state with getting people outdoors.” Creagh said today’s fast-moving economy requires market research on trends that state organizations like the DNR just don’t have. “Sportsmen and sportswomen have held the torch of Michigan’s outdoors for a long time, but now there’s a whole new generation that loves to go kayaking or hiking or seeking a whole new outdoor adventure. The people on this council understand this better than most and can determine how business can help us connect, what relationships can be mined to strategically make sure our footprint is right for the future.” Nadolski said the council is just getting its bearings after the first two

“We knew if we wanted to make something of this, we needed a storefront. We were asking $500 for a pair of skis, and people needed to be able to come in, see what we had and try them on.” Jeff Thompson

Narrower skis are faster and more nimble. You can ski downhill on Shaggy’s skis, but they don’t make a line specifically for the downhill racer. “That’s a tough market. The big companies spend millions on selling to that market,” said Jeff. Jeff sources as much as he can from northern Michigan, including locally cut hardwood, bringing in rough lumber from a mill down the road and cutting it with their own CNC machines. Despite the emerald ash borer taking a huge toll on ashes in northern Michigan, he is still able to source adequate supplies of ash, a strong wood that makes up the core of many of their skis. Cores can also be made of poplar or of alternating strips of ash and poplar, depending on the characteristics they are aiming for. Ash is stronger, but poplar, also a strong wood, is lighter. The skis’ cores are covered in plastic, carbon fiber and fiberglass. For a long time, Shaggy’s supplied ash cores to other ski makers, but as sales volumes grew in later years, they were able to devote all their time and material to their own

Shaggy’s Copper Country Skis is named for a great great uncle in the Upper Peninsula, a village blacksmith named Shaggy who started making skis in 1905.

$599 to $849. Jeff describes the Ahmeek as “our flagship ski. It outsells everything else. It even shines when you are skiing through crud. You take it on vacation and it’s good on powder, good on groomed snow and good on crud.” Shaggy’s skis come in varying widths at what is termed the waist of the ski, or the middle — 85-, 95-, 105-, 115- and 115-plus millimeters. They are a bit wider at the front and rear. Downhill racing skis made by other manufacturers can be as narrow as 60 millimeters, and skis made for extreme conditions in Alaska, for example, might be as wide as 130 millimeters. The softer and deeper the snow conditions, the wider the better. meetings but hopes to push for recommendations in the near future. For Creagh, that list could deviate from anything the DNR has ever tried. “We have 4.6 million acres of public land and we need people to value that,” Creagh said. “So maybe that means we work to get kayak docks near bars and restaurants or maybe we host food truck rallies at our state campgrounds. We need to integrate new ideas into our toolkit. The DNR used to say, ‘Here’s our natural resources, enjoy them,’ now we’re saying, ‘Here’s a natural resource that’s unique to Michigan, how can we use it?’” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

skis. They also built snowboards for other companies. Shaggy’s also sells branded T-shirts, hoodies and caps and sells wood scraps for kindling.

A happy customer Dan Bergman says he has owned a pair of Shaggy’s skis for eight or nine years. He describes himself as a ski bum and has been skiing since he was 8 or 9, about 40 years. He got his kids into skiing at a young age, too. The family lived in Mt. Pleasant but drove north every weekend in the winter to ski at Boyne Mountain. One day, one of his son Darrin’s friends showed him a Shaggy’s ski. Soon, “I was skiing Shaggy’s, my wife was skiing Shaggy’s, my daughter was skiing Shaggy’s and so was my son.” Darrin, now a student at Northern Michigan University, is what Shaggy’s calls an ambassador. They use videos of him skiing in their marketing and social media. “I’m on my fourth or fifth pair of Ahmeeks. I fell in love with them the first time I skied on a pair,” said Bergman. He says they are wider, lighter and more durable than traditional skis. “You can ski pretty much any condition but hard-packed ice. I like backcountry skiing in deep snow and the Ahmeek is good for that. I’ve gotten to know Jeff and John really well. I love the Thompsons. I’ve referred a lot of people there, and they just love them, too. As long as my body holds up and they stay in business, I’ll be buying from them.” Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

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SPECIAL REPORT: THE OUTDOOR ECONOMY

Gone fishing, for good

A marketing exec quit his job in 2001 and has made hunting and fishing his business ever since By Tom Henderson

Need to know

thenderson@crain.com

When David McCool got stressed out at work, he did what a lot of people do to unwind. He went hunting and fishing. For 18 years and counting. McCool was once a marketing executive, making a lot of money in Austin, Texas, but not at all happy about it. “It wasn’t working out,” said McCool, who has a marketing degree from Ferris State and spent six years in Austin working for Electrosource Inc., a publicly traded maker of lead-acid batteries and components. He left the corporate world in 2000

JJDavid McCool guides hunting and fishing trips on Au Sable and Lake Michigan JJHe’s based at the historic Douglas House near Grayling JJA pioneer of fly-fishing for carp

at age 32, returned to Michigan and founded McCool Outdoor LLC, a hunting and guiding service, in Lake Ann, just west of Traverse City. He also has another business, Fisher/ McCool Property Services LLC, which does maintenance for pools and hot tubs for property managers

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and property-rental companies. Though McCool owns the maintenance business, which provides income during the months in Michigan when fly-fishing and bird hunting go dark, guiding is his true passion, an inheritance of five generations of family sportsmen and women. He focuses on fly-fishing, both on rivers like the Au Sable and on Lake Michigan, and on hunting upland bird such as grouse and woodcock. McCool’s great-great-great grandfather was John Fisher. Fisher and his wife, Harriet, moved to what was then a trading post at the base of the Leelenau Peninsula shortly after it was established in 1848. They began buying land, eventually owning most of what would become downtown Glen Arbor. In 1854, Harriet gave the town its name, a tribute to the wild grape wines that covered many of the area’s trees. The Fishers’ descendants later opened one of the first cherry processing plants in the area, which later grew into a big operation called Morgan-McCool.

Historic lodge

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Though McCool lives in Lake Ann, he boasts as a base of operations one of the most historic hunting and fishing destinations in the state, the Douglas House in Lovells Township, northeast of Grayling. Also known as the Douglas Hotel or the North Branch Outing Club, it was designated as a Michigan State Historic Site in 2001 and added to the National Register of Historic Places in 2002. Thomas Douglas was born and educated in Canada and moved to Saginaw to work as a bookkeeper in his uncle’s lumber mill. In 1893, he moved to Grayling to manage the R. Hansen Lumber Co. at the height of the northern Michigan lumber

boom, when hundreds of thousands of acres of white pine were clear cut, milled in Saginaw and Flint and shipped by train across the U.S. In 1898, Douglas built his own sawmill and general store in the small logging town of Lovells. In 1916, he constructed the Douglas House, a two-story combination of prairie and Victorian design. In a bid to draw tourists to the area as the lumber business began to slow, Douglas established the North Branch Outing Club at the lodge. One draw was that the house, unlike most in northern Michigan, had electricity, supplied by Douglas’ mill, as well as indoor plumbing. Surrounded by prime fishing and hunting grounds, soon the Douglas House was a favored spot for Detroit’s auto aristocracy, who came by train in northern Michigan to fly-fish and hunt. Outing Club members included Henry Ford, Horace Dodge and Charles Nash. After Douglas died, his daughter, Margaret, ran the hotel until it closed in the early 1960s. It sat empty and deteriorating for years, until it was bought by Judy and Darrell Fuller. They financed an extensive rehab, with all period-piece materials and furniture, and opened a bed and breakfast called the North Branch Outing Club in 1996. Darrell has since died, but Judy continues to run the business. The Outing Club offers 11 single rooms and two suites and sits on 20 acres of land, abutting 400 feet of the north branch of the Au Sable River, which runs clear and fast just a few yards to the east of the driveway. On display at the lodge is the hotel registry, opened to May 21, 1938. One after another that day, these guests registered — John D. Rockefeller; John L. Lewis, the president of the United Mine Workers of America

from 1920 to 1960; Walter Chrysler; Edsel Ford, Henry’s son; and Albert Sloan, longtime chairman and CEO of General Motors Corp. Ernest Hemingway, Harvey Firestone and various members of European royalty and aristocracy were also guests over the years. In addition to serving as a guiding headquarters and as a bed and breakfast and lodge for corporate retreats, the Outing Club is home to a full-service Orvis fly-fishing retail shop. As McCool leads a visitor out of the Orvis shop into the yard, a bald eagle floats on the thermals overhead, and Finn, his black lab pup, who is in training and about to officially enter the guiding business, raced joyously down the slope and dove into the river. McCool also fishes other wellknown rivers in northern Michigan, including the Manistee, Boardman, Platte and Jordan rivers. On the Au Sable, though, he takes clients out in a long, narrow wooden boat of his own design that he keeps there. After a day on the river or bird hunting — or what he calls “cast and blast,” where clients fish a bit, then look for birds — guests can hang out together in the lounge, sitting room or large dining room on the first floor and catch up on emails or the news on their laptops or smart phones via Wi-Fi. They won’t be able to watch anything on larger screens, though; there are no TVs in the lodge.

Fly-fishing for carp? While he conducts a lot of business out on the Au Sable, McCool heads to Lake Michigan in spring and summer for a unique kind of fly-fishing he pioneered — casting for golden carp in the flats along the shore, a fish he jokingly calls golden bone-

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McCool and the writer, Bob Butz, caught and released 12 carp that day, all larger than 15 pounds and all only after a long battle and a wearing reeling in of line taken. As Butz described it: “Upon the strike, each fish seemed to torpedo away for the shores of Wisconsin somewhere beyond the horizon, the neon colored fly line disappearing after them as if shot from a laser beam ... The carp were in the mood, as they say. And I fished for them with the intensity you muster when the fishing is good, maybe even the best you’ve ever had.”

Team bonding

MCCOOL OUTDOOR LLC

sler; bert CEO

David McCool (second from left) with clients on north branch of Au Sable River.

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fish, a nod to the popular sport fish found in such saltwater hot spots as Key West. “All the guides laughed at me when I said I was going to guide carp fishing. Now, they’re all doing it,” said McCool. “Hooking a carp is like hooking a runaway freight train.” In the summer of 2001, he took a client out fly-fishing for carp and got the kind of validation for carp fly-fishing that money couldn’t have bought. That day on the water later turned into a long and laudatory piece on the wonders of carp fishing and Lake Michigan in the New York Times. The piece read in part: “A fly-fisherman prowling the northern Michigan shoreline, with miles of secluded beaches and glistening blue water under a sky like mother of pearl, could easily imagine himself in the Caribbean, perhaps wading the reefs around Christmas Island or the flats off the coast of Belize. The Lake Michigan coast is that picturesque. And come summer, the angling is that good owing to the most unlikely of fishes: the simple and unassuming carp. “Take it from someone who knows: Though the scenery here and the quality of fishing compare favorably to those exotic locations down south, when it comes to downright power and fight, a bonefish doesn’t have much on a 30-pound carp. On a recent summer afternoon in the shallows of Lake Michigan, I would not have wanted to be any other place. The rolling waves lapping against the shore and the cries of the herring gulls soaring overhead were indicative of all things coastal. Indeed, the Great Lakes are truly like inland seas.”

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The Outing Club hosts a lot of corporate retreats. Each June, a group of about 24 doctors from the University of Michigan health system books the place. A 12-person sales and marketing team for Hunters Specialties, a Cedar Rapids, Iowa-based company that has made a wide variety of tools and gear for hunters since 1973, was a client of McCool’s and the Outing Club in 2016. Chris White, Hunters’ vice president of channel marketing and business analytics, organized the trip, five days of bonding over staff meetings, catered meals, fly-fishing and bird hunting. He said he was told about McCool and the lodge by people who knew him in the hunting industry and reached out to McCool to see about a corporate booking. He said it was a trip he will al-

Douglas House, a historic lodge in Lovells Township, northeast of Grayling, where John D. Rockefeller, Henry Ford, the Dodges, Hemingway and others, used to hang. It was a wreck, long abandoned, then bought and rehabbed gorgeously, now a bed and breakfast and guiding headquarters.

ways remember. In fact, he returned to the lodge for a vacation with his wife earlier this month. “Dave took care of everything. The trip exceeded our expectations. The accommodations were special. The meals were fantastic. We were able to write out names into the same guest book as Rockefeller and

the Dodges, to be a little bit of history. We had everything from novices to experts. Dave did a fly-fishing class the first day and then we went out on the river.” How was the fishing? “It was great. The brown trout were in spawning mode.” And the upland bird hunting? “In

the two days I went out, I came back with six woodcocks and three grouse. The whole week was great. Judy and Dave and his guides were like being with best friends. There was great camaraderie.” Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2

Electronic Payments, Data Privacy

and Security Law Experience

In Your Corner. ®

Contact Jill Miller at jmmiller@varnumlaw.com

Data Security and information law, privacy policies, breach notification requirements Electronic payments, mobile payments, electronic fund transfers, stored value cards Aviation law, aircraft acquisitions, disposition, operation, leasing and financing, FAA filings, International Registry requirements

SPONSORED CONTENT

THE MAKING of an HONOREE

A conversation with Mark Davidoff, who will be honored with Yeshiva Beth Yehudah’s Outstanding Leadership Award at the school’s annual dinner later this month You’re involved in many different community projects. Why have you chosen Yeshiva Beth Yehudah as the place to focus your energies? Davidoff: My involvement with the Yeshiva dates to my role as Executive Director at the Jewish Federation of Metropolitan Detroit, until I transitioned to Deloitte in 2005. As a constituent agency of the Federation, I worked closely with the leadership of the Yeshiva in financial, strategic and facility planning. I have had a close relationship with the institution over many years.

“When you are committed to an effort that brings such high value, it doesn’t really feel like a responsibility.” -Mark Davidoff The Yeshiva seems to have the support of so many community and business leaders. Why do you think this is so? Davidoff: In this era where many are searching for common ground, for a safe harbor of civility, there is no better anchor than the Yeshiva. Although its primary mission is to serve students of the Jewish community, the Yeshiva has evolved into a beacon for the general community where throughout the year, and especially at the annual dinner, we can lean on the Yeshiva to refresh our understanding that at the root, we are all grounded in common values.

Mark Davidoff with students during a visit to Yeshiva Beth Yehudah

Have you visited the school in person? What was your impression?

s managing partner of the Michigan practice of Deloitte LLP, Mark Davidoff is the organization’s top leader in the state, overseeing 1,200 professionals based in Detroit, Grand Rapids and Midland. Davidoff served as CFO and Executive Director of the Jewish Federation of Metropolitan Detroit from 1992-2005 and serves in a number of leadership positions in the metro Detroit community. Davidoff talked about the significance of receiving Beth Yehudah’s “Outstanding Leadership Award” at the upcoming annual dinner Oct. 28.

Davidoff: I have had the pleasure to visit the Yeshiva many times over the years and to participate in moments when leaders from throughout our community have an opportunity to visit the schools of the Yeshiva for the first time. It’s always amazing to see the institution through the eyes of a first-time visitor and witness their deeper understanding of the special nature of the Yeshiva.

What drove you to accept the honor of being the Beth Yehudah outstanding leadership awardee?

Davidoff: When you are committed to an effort that brings such high value, it doesn’t really feel like a responsibility. It is truly an honor to help make a difference. Bring your “A” game because the more you invest in the effort, the greater the rewards.

Mark Davidoff: The first question that any potential honoree should ask is, “How will my saying ‘yes’ help the organization?” This dinner is historic in its impact on students and the broader community. The team at the Yeshiva is world class and they made it easy to say yes. What do you think makes Beth Yehudah different from so many other schools? Davidoff: The Yeshiva is built on a foundation of values and beliefs that drive its mission. Add to that a commitment to serve any student, regardless of financial capability, and a holistic approach to parent engagement and teacher involvement. These factors drive a unique set of dynamics, all centered on the students.

What would your message be to others who might be considering taking on the responsibility of being an honoree in future years?

What is one simple thing the metro Detroit business community can do to help inspire future leaders, like those students attending Beth Yehudah? Davidoff: Be intentional. Detroit is a laboratory for leadership given the positive geometric changes we have witnessed over the past number of years. Now is the time to seed the next generation of leaders who can be prepared to build on this progress. To be a part of the Yeshiva Dinner, visit www.ybydinner.org, email dinner@yby.org or call (248) 663-8299. Seating is limited.

PAST HONOREES

Matthew J. Simoncini Lear Corp.

Mark Fields Ford Motor Co.

Gary Shiffman Sun Communities, Inc.

Nancy Grosfeld 2018 Dinner Chairperson

Daniel Loepp Blue Cross Blue Shield

PARTNERS DETROIT:

A gateway to Jewish tradition

artners Detroit, the adult education division of the Yeshiva Beth Yehudah, offers free Jewish educational opportunities to the entire metro Detroit community. Partners programming reaches thousands of individuals weekly. The Tuesday night one-on-one study program attracts hundreds of participants each week. This program creates a space where everyone feels welcome, cultivating the development of relationships across the full spectrum of the Jewish community and introducing participants to new ways of thought and a deeper understanding of their heritage. At a recent event showcasing the Partners program for visitors of other communities, Ethan Davidson, son of the late Bill Davidson and himself a partner of the program, explained why he felt that Partners is so vital. “The thing about Partners is that each of the people that are involved with this is a gateway to free access of our tradition,” Davidson said. “Partners is one of the greatest portals that has come out of the Detroit community and that’s why it’s so important for me personally, and for my father’s Foundation, that we have been involved in this thing. “This is really the thing that is making a tremendous difference worldwide in Jewish Communities.” A peek into the study hall on Tuesday nights would deliver the sight of pairs of partners, studying oneon-one, deep in conversation and creating a hum of activity that is inspirational and moving in its energy.

Robyn Lederman, a lawyer at Brooks Kushman P.C., is a participant at the Tuesday night study sessions and has attended Partners missions, weekend retreats and lunch and learn sessions. “It’s just so simple,” she said. “You think of ‘Field of Dreams’ — if you build it they will come… and the speakers that we have at the Partners programs are some of the best speakers I have heard in my entire life.” New programming is constantly being developed, drawing on a long tradition of hospitality, social consciousness, ethics and relationship-building. Holidays are shared with friends both new and old, life-cycle events are celebrated together, projects to help those in need are completed with passion, generosity and care. Eighteen-year-old Jared Arbit, a freshman at Michigan State University, said Partners has greatly impacted his life. “Today my priorities have changed. I still make time to play sports and hang out, but now I actually tackle the pile of homework flooding my backpack and work hard to uphold Jewish values. I understand where I came from and feel blessed to be able to say ‘I Am Jewish.’” Jared’s father, Dr. Phil Arbit, Medical Director and Chief of Anesthesia Services at the Novi Surgery Center, added: “My own father, during the last year

of his life started studying with us. Three generations studying together, that was pretty amazing.” In recent years, Partners hosted a study session at the institution’s main fundraiser, the Yeshiva Beth Yehudah Annual Dinner. Hundreds of dinner attendees arrived early and immersed themselves in Torah study for an hour before the start of the dinner, adding an educational and spiritual dimension to the incredible event. This program will be held again this year and even more participants are expected. Sam Shrago, a 25-year-old Partners participant, moved to Michigan to work on a master’s degree at University of Michigan. “One year after being in Detroit I was ready to pack up and leave. I was spinning my wheels and didn’t have the community I needed, and then I discovered Partners. Over the past year I have found my niche in the Jewish Community and forged connections with amazing people in this special city.” Partners uses weekly emails and social media to communicate and share ideas. The weekly email, including a short topical video message on the Torah portion and a complete listing of upcoming events, is sent to over 5,000 Partners each week. To receive updates, or for more information, visit Partnersdetroit. org or follow #PartnersDetroit.

Lawyers, CEOs, doctors, even judges share table space with other professionals, tradesmen, children and retirees, all joined together and equal in their pursuit of the knowledge, insight, ethics and life lessons contained in the Torah. Dr. Conrad Giles, a Professor at Wayne State University and President of World ORT, commented on the growth and impact of the Partners Program. “Until the Partners programs were offered we could not have conceived that there was this enormous appetite on the part of the greater community to learn,” Giles said. “The byproduct of this is that not only are they educating themselves and their children but most importantly, we are one. The activities that Partners in Torah have embraced have made us truly one community.” In addition to the weekly Tuesday night study sessions, Partners has developed specialized programming for many demographics ranging from teens to seniors and provides study groups, activities and heritage missions that further enhance the learning experience.

Tuesday night learning at Partners Detroit

Yeshiva Beth Yehudah Annual Dinner

RESERVATIONS AND INFORMATION WWW.YBYDINNER.ORG 248-663-8299 DINNER@YBY.ORG SPONSORS

C E IN E D

UC TI

HONORING

YESHIVA BETH YEHUDAH

MARK DAVIDOFF Michigan Managing Partner, Deloitte

GUEST SPEAKER

PRIME MINISTER TONY BLAIR

EVENT SPONSOR

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 5 , 2 0 1 8

CALENDAR UPCOMING EVENTS Robots Won’t Take Your Job, But They Will Change It. 11:30 a.m.-1:30 p.m. Oct. 23. Detroit Economic Club. Ranjit de Sousa, president, Lee Hecht Harrison, will talk about changes and trends. Westin Book Cadillac. $45 members, $55 guests of members. Website: econclub.org Wayne County Business Resource Network Roundtable. 8:30-11 a.m. Oct. 25. Wayne County. Learn about the Wayne County Economic Development Corp. program and service providers and Business to Business. Keynote speaker: Wayne County Executive Warren Evans. Moderator: Mark Lee. Wayne County Community College District, Taylor. Free. Contact: David Schreiber, email: dschreiber@waynecounty.com; phone: (313) 967-6421.

DEALS & DETAILS 2018 Michigan CEO Summit. 8 a.m.2 p.m. Nov. 1. Business Leaders for Michigan. Opening keynote One Michigan: Patti Poppe, president and CEO, CMS Energy and Consumers Energy. 21st Century Health Care: What’s on the Horizon: Daniel Loepp, president and CEO, Blue Cross Blue Shield of Michigan; Lara Latham, vice president, health care systems, Stryker; John Hendrickson, president, C&H Solutions LLC, former CEO, Perrigo. Next-Generation Family Businesses — Standing the Test of Time: Ron Hall Jr., president and CEO, Bridgewater Interiors LLC; Ben Maibach III, vice chairman and chief community officer, Barton Malow Co.; Brig Sorber, executive chairman, Two Men And A Truck/International Inc.; Robert Taubman, chairman, president and CEO, Taubman Centers Inc. Breaking Through Traditional Barri-

ers — Growing Your Bottom Line Through UX: Chris Granger, group president, sports and entertainment, Ilitch Holdings Inc.; Julia Oswald, senior vice president, business insights, strategy and consumer insights, Domino’s; Brian Pugh, director, digital user experience, Meijer. Luncheon keynote: Are You Doing Everything Possible to Prepare for What’s Next: Richard Anderson, president and CEO, Amtrak. Westin Book Cadillac Detroit. $150. Contact: Courtney Masiarczyk, phone: (313) 259-5400; email: courtneym@businessleadersformichigan. com; website: businessleadersformichigan.com To submit calendar items visit crainsdetroit.com and click “Events” near the top of the home page. More Calendar items can be found at crainsdetroit.com/events.

ADVERTISING SECTION 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

ACCOUNTING Robert M. Johnson Michigan Association of Certified Public Accountants The MICPA has elected Robert M. Johnson as chair of its board of directors for 2018-2019. Johnson, CFO at Shift Digital in Birmingham, will expertly guide the board with his more than 30 years of experience as a CPA in metro Detroit. Prior to Shift Digital, he held financial positions at Dynatrace, CareTech Solutions, Palace Sports & Entertainment and the Detroit Pistons Basketball Company. Johnson serves on a committee at Walsh College, his alma mater, to raise funds for student scholarships.

Christine Czuprynski McDonald Hopkins McDonald Hopkins LLC announced the election of Detroit attorney Christine Czuprynski to the firm&#039;s membership. Christine focuses her practice specifically in the area of data privacy and cybersecurity. She has experience counseling clients on topics ranging from security breach preparedness and response, to SMS and email marketing campaigns. Christine earned a J.D. from the University of Michigan Law School in 2005 and graduated from Western Michigan University, magna cum laude, Phi Beta Kappa.

Stacie Clayton Detroit Renewable Energy

Doug Newcomb Wards Intelligence Wards Intelligence (WI), a world-leading provider of automotive insights and analysis, has appointed Doug Newcomb as a senior analyst to lead its mobility practice. Newcomb joins WI from C3 Group, LLC, a West Coast mobility and events consulting firm, headquartered in the Portland, Ore. area, where he has served as president since 2013. Prior to launching C3 Group, Newcomb served as senior editor, technology, at Edmunds.com.

PUBLIC RELATIONS

LAW

ENERGY

AUTOMOTIVE

Detroit Renewable Energy (DRE) is pleased to announce the addition of Stacie Clayton as the vice president of government and community affairs. Clayton brings over 25 years of extensive experience working with Michigan’s government, corporate and non-profit sectors. Prior, Clayton was the assistant director for the Governor’s Office of Urban Initiatives and her previous positions included leadership roles in the City of Detroit Mayor’s, Council and Clerk’s Offices. Clayton is a Detroit resident.

SOFTWARE/SERVICES

Keith Donovan Airfoil Communications Airfoil Communications announced the promotion of Keith Donovan to president from senior vice president. Donovan has more than 20 years of experience in marketing and communications, having served clients across multiple industries including technology, automotive, healthcare and professional services. Donovan has been with the agency for 12+ years.

Danielle T. Weinberg Kroll CourtWorks LLC Danielle Weinberg Kroll is Co-Founder of CourtWorks llc, an SaaS company that helps Courts manage thousands of defendants while on probation. She was promoted by the Board of Directors to Vice President of Government and Customer Relations. Danielle holds a Bachelors degree from Michigan State University and a Masters in Public Administration from the University of Michigan. She previously worked at JP Morgan Chase helping manage their $100M investment into the Detroit community.

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

ACQUISITIONS & MERGERS J SpotOn Transact LLC, San Francisco, a payments and software company, acquired EmaginePOS, Ferndale, a point-of-sale software company. The EmaginePOS platform offers reporting capabilities, remote management, pay at the table and online ordering. Websites: spoton.com, emaginepos.com J MSX International, Detroit, a business process outsourcing company, acquired Impetus Automotive Ltd., Warwick, England, an automotive consultancy. Websites: msxi.com, impetusautomotive.com

CONTRACTS J BorgWarner Inc., Auburn Hills, an automotive supplier, has a three-year contract with WM Motor Technology Co. Ltd., Shanghai, China, manufacturer of electric automobiles, to collaborate on transportation models for a smart city. BorgWarner plans to provide electric propulsion technologies and electrical application systems. Websites: borgwarner.com, wm-motor.com J Goldfish Swim School Franchising LLC, Troy, a chain of swim instruction facilities, is a sponsor of the USA Swimming Foundation, the philanthropic arm of USA Swimming, Colorado Springs, Colo. The company will support the foundation’s Make a Splash initiative, a water safety campaign that aims to provide the opportunity for every child in America to learn to swim. Goldfish Swim School Franchising has set a fundraising goal to raise $1 million by 2024 to help fund free or reduced-cost swim lessons in communities across the country. Websites: goldfishswimschool. com, goldfishfranchise.com, usaswimmingfoundation.org, usaswimmingfoundation.org/makeasplash J 123Net Inc., Southfield, provider of data center, network and voice services for Michigan businesses, has an agreement with St. Clair County Regional Educational Service Agency to improve and expand RESA’s fiber network that provides internet access to schools, public libraries and municipalities. Websites: 123.net, sccresa.org J ComForCare Health Care Holdings LLC, Bloomfield Hills, a home care services provider, has an agreement with Kindred At Home, Atlanta, Ga., a home health and hospice services provider, to collect de-identified health information and share outcomes with professionals and industry leaders to improve delivery. Websites: comforcare.com, kindredhealthcare.com

EXPANSIONS J Staymobile, Atlanta, Ga., a phone repair chain, has opened a service center at 313 S. Main St., Royal Oak. Phone: (248) 606-2067. Website: staymobile.com/locations/royal-oak

MOVES J AutoCom Associates, a public relations firm, has moved to 100 W. Long Lake Road, Bloomfield Hills, from the Swanson Building, 74 W. Long Lake Road, Bloomfield Hills. Phone: (248) 647-8621. Website: usautocom.com

SPOTLIGHT Former AT&T exec lands job with Arab American and Chaldean Council

Jim Murray, the former president of AT&T’s Michigan division, has a new job as executive director of the Arab American and Chaldean Council. Murray started in the newly created position last week, with his first full day on Thursday. His role will be to execute the vision and expand the Murray mission of the nonprofit, which operates 12 outreach centers throughout metro Detroit. Murray, 48, said his priority will be growing the human services agency. “I want to up ACC’s profile in the community,” Murray said. “They’re well-known among the clients they serve, but I think there’s a lot of work to do to help them grow.” Murray met the nonprofit’s founding president and CEO Haifa Fakhouri in his work with AT&T Michigan, where he was president from 2005 until December. After leaving, he did contractual work with the nonprofit for leadership development before landing the job as executive director. He now oversees growth and strategy at the nonprofit, which has around 145 employees, an annual budget of $12 million and, last year, served 76,571 individuals. It delivers training for education and employment and offers behavioral health assistance, self-enrichment services and immigration help.

Former DIA exec joins Van Dyke Horn

When Annmarie Erickson started work Monday with public relations firm Van Dyke Horn, she was walking into her third office in a historic metro Detroit building. The nonprofit and communications veteran comes from Henry Ford Health System, where she was vice president Erickson of governance for nearly two years, but she is well-known for her more than 16 years at the Detroit Institute of Arts, including through the city of Detroit’s bankruptcy. Erickson, 61, is joining the Detroit-based PR company in the newly created role of executive vice president. She brings contacts and depth of experience in navigating relationships between nonprofits, business and government — Van Dyke Horn’s specialty, CEO Peter Van Dyke said. Van Dyke Horn’s home base is the historic Albert Kahn-designed Fisher Building in Detroit’s New Center, owned by client The Platform LLC. Erickson also previously worked from century-old Cranbrook House while in communications roles for Cranbrook Educational Community.

October 15, 2018

C R A I N ’ S D E T R O I TCRAIN B U’SSDIETROIT N E SBSUSINESS // O C T O B E R 1 5 , 2 0 1 8

21 1 Page

Kelly Services leader Adderley helped steer industry evolution By Tyler Clifford tclifford@crain.com

The Detroit Medical Center is owned by Dallas-based Tenet Healthcare Corp.

DMC

FROM PAGE 1

The Oct. 8 article cited ongoing problems with surgical instrument cleaning and also outlined a federal investigation into DMC’s cardiology program, the use of employed nurses for private doctors and other matters at DMC. In 2016 and 2017, DMC was cited for multiple infection control infractions by state and federal regulators. DMC later submitted a plan of correction that was accepted by the Centers for Medicare and Medicaid Services. It has since restructured its sterile processing department, including creating a second one at DMC Children’s Hospital of Michigan, Crain’s has reported. Last Wednesday, DMC provided a statement to Crain’s responding to questions about instrument cleaning. “Quality control is paramount to the DMC. For surgical care, that includes having appropriate safety protocols in place and multiple checks and balances as part of the preoperative process, which takes place before surgery begins,” according to the DMC statement. Officials with LARA confirmed they are looking into allegations that DMC has had multiple incidents this year with dirty or contaminated instruments reaching operating rooms in at least three adult hospitals. None of the dirty instruments, those with surface blood or bone fragments, was used in any operations, the sources said. “CMS has authorized an investigation in response to recent media reports related to these facilities. LARA serves as the investigatory arm of CMS in Michigan,” said LARA official Pardeep Toor, adding that LARA “encourages all concerned residents, patients, parents and peers to file complaints against licensed health facilities which may allegedly be risking public health, safety or welfare.” The pending inspection from quality regulators is separate from the ongoing federal investigation into DMC related to its cardiology program and use of employed mid-level practitioners to help private doctors with patient rounds, admissions and discharges, Crain’s has reported.

Surgeons, nurses speak out Over the past nine months, sources have told Crain’s of at least two examples of surgeons or nurses in DMC’s adult hospitals in Detroit discovering dirty or bloody instruments. In all the examples, the dirty and contaminated instruments were discovered before

operations. Following last week’s story that included a bloody instrument involving surgeon Hussein Darwische, Crain’s confirmed another incident of dirty instruments reaching a DMC operating room, but not the sterile field within the operating room. In Darwische’s case, he said in the Monday story that safety processes worked as intended. In a second case, a surgeon doing foot surgery at Harper opened a tray and found it to contain bloody and dirty instruments, according to a source with direct knowledge of the incident. The surgeon ordered a second tray and found the same problem. A third tray was delivered and the surgery was completed. Last week, two DMC doctors responded in an email to Crain’s inquiries about problems with dirty instruments. “The surgical instrument sterilization process at the DMC is significantly better, and I don’t believe that there’s another health system around that is as focused on this process as the DMC,” Joseph Lelli, surgeon in chief at Children’s Hospital of Michigan, said in a statement. “Since the implementation of our process improvement plans with surgical instrumentation, I’ve had no concern about patient safety. While no process is perfect, we have a very reliable process with checks and balances so that any errors detected never reaches the patient,” Brian Little, specialist in chief, DMC Orthopedics, said in a statement. A pediatric surgeon at Children’s told Crain’s that hospital’s new sterile processing department has been a success and a great improvement over the centralized department used for DMC’s adult hospitals. “I haven’t had to contend with a single tray delay or contaminated case or lost instrument,” the surgeon said. “(It is a) night-and-day transformation.” Children’s surgeons and nurses initially reported problems they had with dirty instruments to the media that led to the changes in 2017, he said. But the adult sterile processing department, which is in the basement of Detroit Receiving Hospital, is another story, said more than five doctors who practice at DMC and tell Crain’s of a variety of issues besides instrument cleaning. Under former CEO Mike Duggan, DMC centralized all instrument and equipment sterilization into a single location 10 years ago from multiple hospital departments to save money. Sources said Duggan also cut staff by 30 percent and problems began almost immediately. Each day, DMC’s sterile processing

CRAIN’S DETROIT BUSINESS

department cleans and assembles thousands of instruments into surgical sets, or trays, for the hospitals of the DMC’s downtown campus, which includes Receiving, Harper University, Hutzel Women’s and DMC Cardiovascular Center.

Problems remain While two surgeons told Crain’s that instrument cleaning in the adult sterile processing department has improved, there are still occasional problems with dirty, bloody and missing instruments. One of the problems, said the senior surgeon, is the level of promised investment by DMC in the adult sterile department is less than what staff expected. He said experienced staff have left because of poor morale and pay lower than market rates. Those left have less experience and are overworked. But he said the number of instrument sets sent back before surgery at DMC because of contamination problems are probably no more than other hospitals. However, three surgeons expressed ongoing frustration about opening surgical trays and finding that critical instruments are missing. The senior surgeon, who said he has practiced at other hospitals where this is not as great a problem, said he believed it was due to lack of budget to spend on new or replacement instruments as opposed to poor department management. Multiple sources told Crain’s other problems DMC’s operating rooms, mainly at Harper, Receiving and the orthopedic surgery suite at DMC Cardiovascular Center, involve the following: J Missing instruments in surgical trays, which sources say happen every week. J The time it takes — 20-30 minutes — to receive a new tray or instrument from the central sterile processing department because of the distance from cleaning rooms to ORs at Harper, Receiving and the Heart Hospital. Surgical teams and patients under anesthesia sometimes have to wait, increasing costs and possibly creating quality issues. J Transporting sterile trays and instruments through DMC corridors to hospital ORs sometimes causes wrappings of trays to be punctured, causing potential contamination and exposure. In those cases, which happens regularly, the trays cannot be used and must be reordered by surgical staff, delaying surgical teams and patients. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

Terence Adderley, whose career spanned six decades with Troybased Kelly Services Inc., died Tuesday night at his home in Bloomfield Hills, the company confirmed Wednesday. He was 85. Adderley over his career helped steer an evolution of the staffing industry from the early “Kelly Girl” office-temp brand to an industry that offered an array of services ranging from engineering to information technology staffing. The former chairman and CEO of the staffTerence ing company Adderley: CEO had battled 1989-2006. health issues since a “cardiac incident” in 2006. Adderley, a Detroit native and son of Kelly Services’ founder, served as CEO from 1989 until 2006 after holding a series of managerial and executive roles that started in 1958 as manager of the company’s office in Louisville, Ky. He retired as as chairman last month. Funeral arrangements are pending, Kelly Services Senior Vice President and Corporate Secretary James Polehna said. Small family and memorial services are being planned. “I think the company is extremely saddened by his passing, especially in light of his recent retirement,” Polehna said. Calling him the “godfather” of Kelly Services, past Plante & Moran PLLC partner Paul Bernhard once compared Adderley’s importance at the company to Bill Gates’ at Microsoft Corp. In September, the company named its lead director, Donald Parfet, to the chairman role. Parfet is founder and managing partner of the Kalamazoo-based life sciences accelerator Apjohn Group LLC. George Corona remains Kelly’s president and CEO. “I am proud to have been a part of Kelly for more than 60 years and honored to have followed in the footsteps of my father, William Russell Kelly, who launched the temporary staffing industry,” Adderley said in a written statement last month. The adopted son of William Rus-

Need to know

JJAdderley served as CEO 1989-2006 JJHe gradually shed roles after being hospitalized in 2006 JJCareer with Kelly services spanned six decades

sell Kelly, Adderley became the company’s second chairman following Kelly’s death in 1998. Adderley was preceded in death by his own son, Terence Adderley Jr., who died in the 9/11 attacks. Under Adderley’s leadership, Kelly Services built engineering and technical staffing divisions for information technology, finance and health care among other sectors. The company also launched a health care informatics division that helped hospitals shift to electronic health records systems. Adderley was the company’s controlling shareholder. The company reported he owned 1.5 million shares of the company’s Class A nonvoting stock and 3.2 million shares of its voting Class B stock at the time of his death, according to a federal securities filing. Most of the Class B shares were held by a trust. After Adderley’s death, Kalamazoo businessman William Parfet and Bodman PLC members David Hempstead and Andrew Curoe were appointed as trustees of that trust. William Parfet is the brother of the current Kelly Services chairman. “The business world has lost a true icon and respected leader, and Oakland County has lost a friend,” Oakland County Executive L. Brooks Patterson said in a statement. “Terry Adderley was one of six original members of the Oakland County Business Roundtable and was honored in December for 25 years of distinguished service. It’s a great loss to the community.” Adderley served on the boards of numerous organizations, including of the Business Leaders for Michigan, the Detroit Economic Club, William Beaumont Hospital, Oakland County Business Roundtable, Detroit Country Day School, Citizens Research Council of Michigan and the Community Foundation for Southeast Michigan. He formerly served on the boards of DTE Energy Co.; First Chicago NBD Corp., now part of JPMorgan Chase & Co.; and the Detroit Renaissance Foundation.

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MIZRAHI FROM PAGE 1

Internationally, Fernando Palazuelo, a developer out of Peru, has been working for years on the Packard Plant project. Mexican telecom mogul Carlos Slim Helú, regularly listed as one of the world’s richest men, made millions when he bought and then sold less than two years later a mostly vacant downtown office building to Adient plc for a new headquarters plan that earlier this year was scrapped. Multiple emails and phone messages were left with Mizrahi the last two weeks. Two attorneys at Detroit-based law firm Kotz Sangster Wysocki PC, Keith Soltis and John Ulrich, who are listed on the business entity registrations also did not respond to emails and phone calls from Crain’s. Mizrahi, who was born in Iran and

MIZRAHI DEVELOPMENTS VIA FACEBOOK

Toronto developer Sam Mizrahi is looking at the Detroit market.

came to Canada as a young boy, most recently was in the luxury dry cleaning industry, starting a company in

1992 called Dove Cleaners, which had more than 100 locations before he exited the business, according to a

2015 interview in Toronto Life. The precise circumstances surrounding his exit were not known; the company faced financial trouble in 2007 as DoveCorp Enterprises sought bankruptcy protection, a CBC article at the time said. Mizrahi Developments was founded in 2008. The company is in the process of building a 1,005-foot, 85-story tower called The One, which is slated to have 416 condominiums, a 175-room hotel and retail space, according to an October 2017 story by The Globe and Mail. The story says a 33-foot-tall first floor is rumored to include an Apple store. The Toronto Star in June said the building will have its own postal code when completed in 2023. Mizrahi also is developing the building at 1451 Wellington in Ottawa with 93 condominiums and a building at 128 Hazelton Avenue in Toronto with 21 condos across nine

stories. Broker James Becker has perspective on both Canadian and Detroit real estate, having worked in the industry for JLL (formerly Jones Lang LaSalle) in Toronto for several years as president and international director. Now the principal and managing director of the Detroit office of Toronto-based brokerage Avison Young, Becker said Mizrahi’s attempts to plant a flag in the Detroit market make sense. “It’s pretty logical,” he said. “There are not a lot of returns to be found in Toronto because everything is compressed and expensive. Looking at a 7 or a 7.5 percent return here probably looks pretty attractive versus the 4 or 4.5 percent he is seeing in Toronto.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

HUDSON’S FROM PAGE 3

The number of rooms is not known, although as currently envisioned, the top three floors would be for hotel space, according to the site plan. The average hotel room is approximately 300 square feet, although some brands have been shrinking that to 200 square feet or less. Depending on configuration and size of things like hallways and other nonroom space, the hotel space could include 1,000 or more rooms. J Residential space is expected to be about 251,000 square feet across about 250 units. In the site plan, it’s spread across 22 floors. J Retail space has been scaled back, from 103,000 square feet to about 73,000. It would be on the first two floors of the podium. J Exhibit space has decreased from 93,000 square feet to 77,000 square feet across floors two through five of the tower. J Event space has grown to 185,000 square feet from 168,000 square feet and includes a 1,250-seat event hall, a 445-person capacity ballroom and various meeting rooms. That would be across most of the third, fourth and fifth floors of the podium. J A 700-space underground parking deck and a public observation deck atop the tower are also planned. “We look forward to announcing more details about the Hudson’s site in the coming months,” Whitney Eichinger, vice president of communications for Bedrock, said. The tower would feature elevations, from east to west, of 168 feet; 378 feet, 8 inches; 536 feet; 805 feet, 4 inches; 912 feet; 848 feet; and 706 feet, according to the site plan. “The taller tower volume is placed on the south side of the site, along Gratiot, closer to the CBD (central business district),” the site plan says. “The tower massing steps down in scale from Woodward in deference to Library Square and the historical fabric to the east. The northern portion of the site is defined by the block volume, which transitions the site in scale toward Merchant’s Row and the historical fabric north of East Grand River.” Work is expected to take four or five years; demolition on the underground parking garage previously on the site began in December and is largely complete. Foundation

KIRK PINHO/CRAIN’S DETROIT BUSINESS

Work on the Hudson’s site project is expected to take four or five years; demolition on the underground parking garage previously on the site began in December and is largely complete.

SHOP ARCHITECTS PC

This rendering shows the view from the north (left) and south of the new Hudson’s site tower in downtown Detroit.

preparation work is underway. The project is designed by Detroit-based Hamilton Anderson Associates and New York City-based Shop Architects PC. The general contractor is Southfield-based Barton Malow Co. In February 2017, the tower was slated to be 734 feet tall, just a shade taller than the 727-foot Detroit Marriott at the Renaissance Center. Then in September 2017, another 66 feet and a skydeck were added to the building, bringing it to 800 feet in height and a $909 million price tag. The Hudson’s project is one of four where Gilbert, the billionaire founder and chairman of Quicken Loans Inc. and Rock Ventures LLC, is receiving $618.1 million in socalled “transformational brownfield” financing. The four projects total $2.14 billion. The three others are: J The $830 million Monroe Blocks project, which is planned to include a 35-story office tower and 482 residential units, plus retail and other uses. The office tower is slated to be 814,000 square feet, and the project is also anticipated to include 169,000

square feet of retail space spread across the two phases. A 1,200-space below-ground parking deck is also planned. J The $313 million redevelopment of the Book Tower and Book Building on Washington Avenue into a mix of uses. Among them: 95 residential units; an approximately 200room hotel; 106,000 square feet of office space; 50,000 square feet of conference and event space; and 29,000 square feet of first-floor retail. A 400-space parking deck is also planned. J A $95 million, 310,000-squarefoot office addition to Gilbert’s One Campus Martius building that he co-owns along with Meridian Health. Forbes pegs Gilbert’s net worth at $6.9 billion. Since moving Quicken Loans downtown, he has assembled a sweeping real estate portfolio of more than 100 properties — buildings and parking decks, plus plans for new buildings on dozens of acres of land. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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FRAUD FROM PAGE 3

“I am skeptical as to what it does,” said state Rep. Pete Lucido, a Shelby Township Republican and attorney who has done work in the auto nofault field. “Why did we have to wait for the governor, during his lame duck, to take this up?” Auto insurance companies have long contended Michigan’s unlimited medical benefits for injured drivers has bred a financial incentive for fraudulent overuse of rehabilitation and imaging clinics, in-home attendant care, transportation services and personal injury attorneys who specialize in maximizing insurance claims because they can keep onethird of the money they collect. “Fraud is overstating the value of the loss. Fraud is charging for things that aren’t delivered,” said Pete Kuhnmuench, executive director of the Insurance Institute of Michigan, the industry’s lobbying group. “There’s a number of different ways you can look at fraud.” With limitless medical expenses for injured drivers being the leading cause of rising auto insurance rates, the creation of a state agency to investigate fraud has been proposed in the Legislature in multiple bills over the past five years, but never made it the governor’s desk. “The Legislature still needs to act in order to give (the anti-fraud unit) the teeth and the direction it needs to be effective,” said state Rep. Lana Theis, a Brighton Republican and chair of the House Insurance Committee. Both of the leading candidates to replace Snyder as governor have voiced support for creating a fraud authority. “We have to have a real department that is funded with actual employees to have any success on that — not just announce something with a department that already exists without any extra resources dedicated to it,” Democratic gubernatorial candidate Gretchen Whitmer said in an interview with Crain’s. Attorney General Bill Schuette, the Republican candidate for governor, has called for the passage of Senate Bill 1014, which would create a Michigan Automobile Insurance Fraud Authority within the attorney general’s office. That bill is sponsored by Senate Insurance Committee Chairman Joe Hune, R-Hamburg Township. The legislation, which was voted out of the Senate in June, would require the Attorney General’s office to staff the fraud authority. But the powers and duties of an auto insurance fraud authority re-

MOBILITY FROM PAGE 3

Array of businesses While no one is mistaking the Motor City for Silicon Valley or Tel Aviv, the 11 companies are contributing to an emerging startup culture in Detroit that’s drawing notice beyond its borders. From tires to travel, this year’s class spans the transportation spectrum, with some businesses anchored by the latest in artificial intelligence and some that are ingeniously simple. IntelliTire built sensors that provide data on tire health going beyond tread and tire pressure, including counting the number of rotations

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

With limitless medical expenses for injured drivers being the leading cause of rising auto insurance rates, the creation of a state agency to investigate fraud has been proposed in the Legislature in multiple bills over the past five years, but never made it the governor’s desk.

Need to know

JJGov. Snyder’s new effort to reduce auto

insurance fraud lacks additional personnel, resources

JJLegislative efforts to create a fraud prevention authority have languished for five years JJMedical providers’ group wants “balanced” fraud authority that investigates auto insurance companies

main a hotly debated topic in Lansing. SB1014 contains vague language that empowers a fraud prevention authority to take unspecified actions to “reduce the incidence of automobile insurance fraud.” Hune said his fraud authority bill would make it a bureau within the Attorney General’s office that would be empowered to investigate instances of insurance fraud committed by medical providers, drivers and insurance carriers and agents. “It takes that argument off the table that it’s only a one-way investigative body,” Hune said. “And I’m sure the opposition is still not happy with that.” and measuring how individual potholes and rough roads affect the life span of a tire. With use primed to rise in an era of automated vehicle fleets — not to mention the current army of e-bikes and scooters — tires will be churned through faster, and fleet managers may desire detailed information on their status. “The tire is the secret sauce,” said Dodani, who signed a partnership agreement with Goodyear during his time at Techstars. “It is the only thing that touches the ground. It’s the only thing that translates all that performance, innovation and technology from the car to the road. It will tell you everything you need to know if it’s connected.” IntelliTire wasn’t the only Techstars participant wringing innova-

Medical providers and personal injury attorneys in the Coalition for Protecting Auto No-Fault want a “balanced” fraud authority that has the powers to investigate insurance companies for denying medical claims. The “abusive practices” of insurers who deny claims for injured drivers and force them to sue is what drives up the cost of personal injury protection premiums for motorists, said Stephen Sinas, associate legal counsel for CPAN. Lawsuits in Michigan’s auto insurance system make up one-third of all lawsuits filed in the state’s circuit court, according to court data. “One of the reasons we have so many lawsuits in Michigan is the insurance companies don’t think they have to pay a claim until a person obtains a lawyer,” said Sinas, a Lansing-based personal injury attorney at the Sinas Dramis Law Firm. “It’s not just about lawyers filing lawsuits because they can get rich off it.” The fraud authority legislation CPAN supports, House Bill 4672, would house the entity within the

Michigan Automobile Insurance Placement Facility, a state-created organization that ensures high-risk motorists can get insured. That would also keep the fraud authority outside of the control of the governor or attorney general. That legislation focuses more on identifying instances of insurance companies committing fraud through the use of independent medical examiners that insurers hire to deny medical claims from injured motorists. Insurance companies would be required to contribute $5.5 million annually to pay for the administration of the proposed fraud authority. “Everyone thinks it’s a good idea except insurance lobbyists,” said Rep. Joe Graves, a Genesee County Republican who sponsored HB4672. “I just can’t get a hearing in committee to take it up.” Hune’s bill is tie-barred to another auto insurance reform bill that would let senior citizens opt out of limitless Personal Injury Protection coverage and instead rely on their Medicare coverage for treatment of

auto accident injuries. Under Senate Bill 787, senior citizens would have to choose between buying a plan with $50,000 of PIP coverage or a traditional plan with unlimited medical coverage. Proponents believe the insurance premiums of senior citizens could be reduced by $1,000 annually if they used their Medicare insurance coverage instead of auto nofault. Hune called the senior opt-out an “integral part of the package.” The senior opt-out legislation also is more controversial because it would allow, for the first time, a segment of drivers to operate without Michigan’s unique unlimited medical coverage. Tying the senior citizen opt-out to the fraud authority legislation makes both a non-starter for the group representing medical providers and personal injury attorneys. “It’s a totally unproductive discussion at this point,” Sinas said.

tion from where the rubber meets the road. Zohr, of Kansas City, Mo., is transforming Mercedes-Benz Sprinter vans into mobile tire shops, banking on a basic premise that motorists don’t want to sit around waiting for mechanics to fix a flat or rotate their tires.

At first glance, there’s not much that connects bicyclists to the auto industry and such an app could pretty much be built anywhere. But LaneSpotter founder Lynsie Campbell said she found value in spending three months in Detroit. “While this city is very motor-centric, everyone is thinking more about mobility,” she said. “The conversations I’ve had with Ford, Bosch and Honda and the other corporate partners of the program, it was eye-opening to see how much they’re thinking about mobility overall and transitioning from automotive companies to mobility companies.” Although she’s returning to Pittsburgh, Campbell says she’ll likely visit Detroit each month to maintain the relationships she built via Techstars.

That’s one small way the accelerator hopes to provide some economic tailwinds to the region. None of the companies in this year’s class originated in Detroit, but several now plan to open offices here. Sam Zheng, founder of DeepHow, which makes how-to videos for skilled-trades workers and enhances their training, said he plans to move his company here from New York City. In that way, the program helps import talent and entrepreneurs to Southeast Michigan. Of the 44 startups to go through Techstars, only two have been local and half a dozen have moved here. Managing Director Ted Serbinski said that’s good for the economy overall and traditional automakers in particular.

Minds on mobility Bike safety was another key focus, with two companies seeking to make cycling less dangerous. One, LaneSpotter, of Pittsburgh, is building essentially a Waze app for cyclists — offering crowdsourced information about streets such as which ones have bike lanes and where there are potholes or other obstacles.

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

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CANDIDATES FROM PAGE 1

“This is about fulfilling a promise,” Schuette said. “When there was a temporary income tax increase put in place for a temporary reason, it shouldn’t be a permanent reduction on income and growth in Michigan.” Schuette argues an income tax cut is crucial to growing the state’s population — a priority he emphasized again and again. “Every problem we have in Michigan today would be minimized if we had more people,” he said. “We can’t afford not to cut taxes or otherwise we won’t compete with the Tennessees, the Floridas and the Carolinas and the Texases — and that has to be our goal.” J As a legislator, Whitmer voted for the Michigan Business Tax, the income tax hike under Granholm and extending the 6 percent sales tax to a variety of services (a short-lived idea in Lansing that never got implemented). As a candidate for governor, Whitmer is advocating for new scrutiny of tax expenditures, “dollars that we choose not to collect” through various exemptions, deductions and credits in the tax code. Whitmer said the sales tax exemption for food and prescription drugs should remain in place. “But if it’s just an industry that had a connection 30 years ago to someone in the Legislature and got special tax treatment under the law, and they’re not creating jobs and they’re not making investments in the state, then it doesn’t make sense anymore,” Whitmer said. She also is open to new forms of taxation for funding municipalities, which are heavily reliant upon property taxes. “I do believe locals should have some more flexibility when they need to provide police, fire and the basic services that municipalities need to draw people into their business space and into the residential space — that’s something I do believe locals should have the ability to do,” Whitmer said.

Roads and infrastructure J Whitmer’s plan to pump $2 billion more annually into road funding hinges on higher “user fees” such as fuel taxes or vehicle registration fees, which she voted for in the Michigan Senate alongside Republicans in the majority. If Whitmer can’t get the Legislature to impose new fees and taxes on road users, she has said she’ll seek voter approval of a $20 billion, 10year bond program to fund infrastructure repairs. “I put a real plan to fund infrastructure on the table,” she said.

www.crainsdetroit.com Editor-in-Chief Keith E. Crain President KC Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Product Director Kim Waatti, (313) 446-6764 or kwaatti@crain.com Digital Product Manager Carlos Portocarrero, (313) 446-6056 or cportocarrero@crain.com Creative Director David Kordalski, (216) 771-5169 or dkordalski@crain.com 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

PHOTOGRAPHS BY LARRY PEPLIN FOR CRAIN’S

more money for roads. The other part of Schuette’s road-funding plan hinges on getting more federal funds. Both Schuette and Whitmer support construction of the Gordie Howe International Bridge.

Auto insurance J Reforming Michigan’s no-fault auto insurance system has become a marquee issue in this year’s elections, from the top of the ticket to races for the state House and Senate. Whitmer wants to prohibit auto insurance companies from using nondriving factors such as credit rating, gender, marital status and education level for determining premiums for motorists. “If you don’t have that, you’re not guaranteeing the rates go down for people that are struggling the most,” Whitmer said. Whitmer is open to a fee schedule for medical procedures to rein in costs but wants to maintain the state’s unlimited lifetime medical benefits for catastrophically injured drivers.

herit a new state law that goes into effect for the 2019-2020 school year that requires third-graders to be reading at their grade level that year in order to advance to fourth grade (with some exceptions). Whitmer wants to repeal the law and dedicate more state resources toward tripling the number of reading coaches in public schools and launching summer literacy programs to help struggling students. “I think the Legislature is going to be under tremendous pressure to change that law,” Whitmer said. “I was so sad to see (the Legislature) do that because it flies in the face of all of the science.” She wants to fund those literacy programs by reversing Gov. Rick Snyder’s use of $900 million annually in school aid funds to pay for public universities and community colleges, which has traditionally been subsidized by the state’s general fund. Whitmer has not said how she'll come up with the $900 million in state general fund dollars needed to make universities and community colleges whole. Schuette proposes having the business community and philanthropic foundations donate to a new state fund to pay for literacy coaches in schools, summer reading camps and transportation scholarships for attending another school. The two gubernatorial rivals also disagree on the best approach to turning around persistently failing schools. Schuette wants an A-F letter grade system for K-12 schools and said he would close schools with chronically low test scores. “It does not help us to have failing schools where children don’t get the education they need to compete in this incredible place called America,” Schuette said. Whitmer favors more “wraparound” support services for children over closing their school. J

J Schuette has said the state doesn’t need any new taxes to fund infrastructure improvements and that additional money for roads can be squeezed out of the existing state budget. “Every business I know in Michigan — whether it’s Crain’s or whether you sell furniture, whether you’re selling chemicals or whether you’re selling cars — you establish priorities in terms of your budget,” Schuette said. “In Michigan, with a $58 billion budget ... we need to make roads a priority.” Within the state’s $58 billion budget, just $10 billion is discretionary money used to fund state agencies and make outlays to universities, community colleges and municipalities. When asked, Schuette did not say which state programs or departments he would eliminate to free up

J Schuette has voiced support for Detroit Mayor Mike Duggan’s proposal to let drivers choose lower levels of medical coverage. “I’m Mike Duggan’s best hope for auto insurance reform,” Schuette said. Schuette did not offer a detailed plan for lowering the cost of auto insurance, but said he’ll use his “relationships” with Duggan, legislators, hospitals and medical providers to bring change to the costliest auto insurance system in America.

Education J Whitmer and Schuette take starkly different approaches to tackling the literacy crisis that’s creeping up in Michigan’s elementary schools. As governor, one of them will in-

“Not just giving a letter grade and then shutting it down and abandoning students and their families,” she said. “That’s really not a real option.”

Talent and economic development If elected governor, Schuette said he would try to poach businesses and workers from Illinois, capitalizing on the Land of Lincoln’s higher taxes and government financial woes. “The next governor needs to make a beeline ... to Illinois because that is such a screwed-up state when you think about it — high taxes and budgets that never work,” Schuette said. “...There’s an APB out by Bill Schuette for Illinois companies to come to Michigan. I think that’s an important part of how we build our workforce.” J

J Whitmer wants to bring back the brownfield redevelopment and historic preservation tax credits Snyder eliminated to incentivize rehabilitation of older and environmentally contaminated property. “Those are two incentives I think are important to have in the toolbox,” she said. In the Legislature, Whitmer supported tax incentives for the film industry, which started off as a generous 42 percent refundable credit under Granholm and was capped at $50 million a year in Snyder’s first few years and eventually eliminated. Whitmer isn’t campaigning for the return of film incentives, but she’s cautioning against causing instability for other businesses in tax and incentive policy. “The change every year and the unknown going through the budget process was already hurting (a film) industry that had started to be built up here in Michigan,” she said.

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

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THE WEEK ON THE WEB

RUMBLINGS

Apartment, hotel project planned for riverfront

McTevia book chronicles battle with disease

MONTH 0-0 | For more, visit crainsdetroit.com

$136 million development on the east Detroit riverfront would bring 360 apartments and a 120-room hotel to the area. It’s one of the latest in a string of waterfront investments attempting to capitalize on tens of millions of dollars spent on the Detroit RiverWalk and other projects in recent years, radically transforming the area. The project by Detroit-based City Growth Partners LLC would also include 30,000-40,000 square feet of retail space and a boutique hotel, said Moddie Turay, founder and principal partner and a former Detroit Economic Growth Corp. executive. The Economic Development Corp., which is staffed by the DEGC, approved last week transferring development rights to the 3.1-acre property bounded by Atwater, Franklin, Riopelle and Rivard streets from St. Louis-based McCormack Baron Salazar Development Inc. to an entity affiliated with City Growth Partners. The purchase price was $5.61 million. Construction is expected to begin in the first quarter of 2020 and take at least two years to complete, Turay said. The project’s capital stack is to include developer equity, Community Revitalization Program funding and a traditional construction loan. Apartment rent is expected to be around $2.50 per square foot, or $2,500 per month for a 1,000-squarefoot unit, and 20 percent of the 360 units will be designated as affordable to those making up to 80 percent of the federally designated area median income of those in the Detroit-Livonia-Warren Metropolitan Statistical Area. Turay said there is a letter of intent signed with a national boutique hotel that doesn’t currently have a presence in the Detroit market; he declined to identify the company. The retail space is expected to be anchored by a 10,000- to 15,000-squarefoot tenant and other smaller uses like restaurants. Turay said that with design elements such as a public courtyard, the project will be welcoming to the public at large.

BUSINESS NEWS J Metro Airport Westin union workers voted to authorize a strike Thursday, after Unite Here Local 24 members walked out of another Marriott International Inc.-operated hotel Oct. 7. More than 100 Westin Book Cadillac Detroit workers were still striking as of Thursday night, demanding “downtown standard” wages and input on job loss due to technology advancements. J Northern Equities Group is planning a 210,000-square-foot addition of Class A office space to the 99 percent occupied Haggerty Corridor Corporate Park in Novi. The Farmington Hills-based real estate developer has site plans approved for the new four-story building, which would sit on 14 acres off Cabot Drive between 13 Mile and 14 Mile roads.

LARRY PEPLIN FOR CRAIN’S

The planned project by City Growth Partners LLC on 3.1 acres east of the Renaissance Center is one of the latest in a string of waterfront investments attempting to capitalize on tens of millions of dollars spent on the Detroit RiverWalk and other projects in recent years, radically transforming the area.

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

3 to 4

The percentage raises Michigan Medicine union nurses get under a three-year contract approved after several months of tough negotiations

750

The number of workers Maryland-based tech company DMI plans to hire in the region by 2021

$160 million

The amount Flex-N-Gate put into its Detroit plant, which opened Monday and is being hailed as the biggest auto supplier investment in the city in 20 years

The developer is in talks with several potential tenants and will begin construction once an agreement is in place. J All of the red seats at Detroit’s Little Caesars Arena — which show up starkly on TV when they’re not filled during games — will be swapped for black seats over several months beginning in December. The announcement comes 13 months after the building opened and its two primary tenants, the Detroit Red Wings and Detroit Pistons, were the subject of commentary about the unfilled bright red seats during games. Lower-bowl seats will be covered with black fabric during the replacement process. J Detroit’s Spirit Plaza transformed

last week into a showcase of transportation options for the second Detroit Moves mobility festival. Mobility firms such as May Mobility, Chariot, Navya, Waymo, Priva and Calm Car were among those displaying vehicles and offering a look into how they work.

urnaround veteran Jim McTevia is still working at 81 years old — with another birthday only weeks away. He serves on nine boards of directors, actively works with four clients and employs six at his Bingham Farms advisory firm McTevia & Associates LLC. Retirement doesn’t appear to be an option, even as an incurable neuromuscular disease is bent on slowing him down. He was diagnosed with inclusion-body myositis in 2014. In his latest book, “One-Eyed Kings,” McTevia writes about the disease and overcoming the challenges of impaired movement. “This book is really about someone who is supposed to be a nationally known problem solver that faces a problem he cannot solve,” McTevia said. “But what it’s really about is helping my fellow man with all the issues we face and about learning there’s a hell of a lot more to be grateful for than angry about. I learned I could either sit here and let this thing make me miserable and everyone miserable around me or I could be grateful for how fortunate I’ve been.” Inclusion-body myositis affects thousands of Americans over 50 years old. It’s an inflammatory disease that leads to muscle degeneration. McTevia, for instance, has trouble gaining balance at times and is unable to perform simple tasks like writing with a pen or buttoning a shirt. The disease is usually not life-threatening, but has no known cure. The book journeys through McTe-

GOVERNMENT NEWS J Detroit Public Schools Community District has so far secured $2.4 million to deal with a widespread lead/copper water contamination problem in its buildings, including separate $500,000 pledges from United Way for Southeastern Michigan and Quicken Loans Community Fund. The nonprofit also established the United Way Water Relief Fund to help pay for the new drinking and filtration systems. J A 640,000-square-foot chunk of the 1.4-million-square-foot Eastland Center mall campus in Harper Woods fetched $3.125 million at auction last week. Not included in the auction were the former Macy’s and Target stores, or the Lowe’s and Home Depot properties. The city would like to see mixed-use development on the property and is also proposing movings its civic center there. J The state aims to fully open the under-construction section of I-696 between I-75 and I-94 by when “winter hits.” But delays due to potential bad weather and September’s labor lockout could mean the work is finished temporarily to clear roads for the winter and then permanently completed in the spring. Currently the westbound segment of I-696 is closed to traffic and eastbound is open. But the eastbound traffic is shifted to the completed westbound roadway as construction work on the other side commences.

In his latest book, “One-Eyed Kings,” Jim McTevia writes about inclusion-body myositis and overcoming the challenges of impaired movement.

via’s life as a “hotshot” businessman coming to terms with life’s inescapable truths and brushes with humility. McTevia hopes the book will, at least, inspire those with the disease to lead a happier life. But he also thinks the book has a broader appeal that will encourage readers to look at life differently. To that end, he’s already successful. “I’m not John Grisham. This isn’t going to be a best-seller,” McTevia said. “But I am getting great feedback from people who it is helping ... and I now know that’s worth a million bucks.” Ali Ammaweri works in StockX’s authentication operations, which makes sure collectible shoes and other items traded on the platform are genuine. LARRY PEPLIN FOR CRAIN’S

StockX’s funding round fuels European expansion

etroit-based e-commerce startup StockX is taking a foothold in Europe after it got a $44 million boost from investors. The stock market for shoes and other collectibles already sells across national lines, but now it’s opening an authentication center in West London and making changes to improve international user experience, according to a news release. StockX CEO Josh Luber and co-founder Dan Gilbert, the Detroit billionaire and founder of Quicken Loans Inc., announced the $44 million Series B funding round Sept. 12. It has allowed the international expansion. Silicon Valley venture capital firms GV (formerly Google Ventures) and Battery Ventures co-led the round, a

sevenfold increase from the $6 million StockX raised in February 2017. The StockX website works as a secondary market for buying, selling and authenticating collectible sneakers and other items after they sell out in stores. Changes targeted at customers outside the U.S. include accepting euros and pounds, lowering shipping costs and clarifying taxes and duties so prices are all-inclusive without additional fees being collected upon delivery. The West London facility will serve as an office, shipping and authentication center. It is a “new beginning for the StockX brand in Europe,” Luber wrote in a post on the company’s website.

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