Crain's Detroit Business, Oct. 22, 2018 issue by Crain's Detroit Business

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OCTOBER 22 - 28, 2018 | crainsdetroit.com

WORKFORCE

Skilled-trades push exposes fractured training pipeline By Chad Livengood clivengood@crain.com

On the north end of Howell, the men and women who will help construct Detroit’s next skyscraper, a tunnel under the Straits of Mackinac and rebuild Michigan’s crumbling roads and bridges are learning how to make precision cuts into the earth and maneuver cranes for jobs where inches matter. The Operating “We’ll Engineers Local 324 be at trains heavy equipment and crane op500 erators on a sprawlbefore ing 550-acre plot of land in the exurbs we that the union started building a know half-century ago on it.” the north side of M-59. On any given John Hartwell, weekday, dozens of Operating excavators and bullEngineers dozers roll across apprenticeship the forested training coordinator ground, as apprentices and journeymen practice operating increasingly high-tech machinery. The union’s business of training apprentices is booming with 400 active apprentices. “We’ll be at 500 before we know it,” said John Hartwell, apprenticeship coordinator for the Operating Engineers. The Operating Engineers are about to break ground on a 19,000-squarefoot, nine-classroom addition to their training center. The union anticipates years of increased demand for its skilled workers to build the Gordie Howe International Bridge, billionaire Dan Gilbert’s Hudson’s site skyscraper and replace the countless bridges in Michigan that are deemed structurally deficient. But most will have a long trek out to Howell to learn how. It’s the only heavy machinery training facility of its kind in Michigan funded in partnership with infrastructure companies — and probably can’t be easily replicated to make this particular trade more accessible to an interested worker in Detroit or Dowagiac.

An array of choices for commuters Page 3 DEVELOPMENT

MANUFACTURING

Old wood, new tune High-end guitar makers find resonance in Detroit

By Dustin Walsh dwalsh@crain.com

In October 2015, state regulators hired contractors to dredge Muskegon Lake on the state’s west side to remove roughly 42,000 cubic yards of debris from the lake’s bottom. Thousands of sinker logs, lacking the buoyancy to remain on the water’s surface and dating back to the mid-1800s operations of the Hackley-Hume Lumber Mill, were removed. The old-growth pines date back to at least the 1700s. At the same time, East Los Angeles native Gabriel Currie, a legend-track handmade guitar builder, was pushed out of LA, and California in general, by rising rents and rising odds of failure. The Echopark Guitars owner and builder planned to blow town, move his entire life somewhere new, to him at least. His plan took him to the Pacific Northwest, the Southwest and eventually Detroit. Currie landed in Detroit in May 2017 and set up shop in the Old Redford neighborhood of Northwest Detroit. “For so many the West and LA is the end of the rainbow, but it’s all bullshit. It’s a facade,” Currie, 50, said. “I wasn’t running from anything; more like running to something. I was studying up on the logging industry, the lumber barons like Charles Hackley and the craft of making instruments. I needed a place where I could get into my craft and shake the glitter of California. Detroit was it. How could I not be here?” SEE GUITARS, PAGE 19

A guitar made by East Los Angeles native Gabriel Currie, who has moved his high-end instrument making to Detroit. ROBERT BRUCE PHOTOGRAPHY

‘Tidal wave’ of new landlords swoops into Eastern Market Buyers purchase more than 20 buildings By Kirk Pinho kpinho@crain.com

A new corps of landlords is scooping up Eastern Market property and rapidly changing the real estate landscape for the food district east of downtown Detroit. In the last 18 months or so, a handful of buyers have purchased more than 20 buildings totaling nearly a half-million square feet with the potential for well north of $100 million in investment. But those buyers are cut from a different cloth than many of the Eastern Market property owners of old. This crop is laden with developers, economic development professionals and out-of-state and foreign investors looking to cash in on a hot enclave where food and funkiness, foot traffic and freshness, reign supreme and where Detroit’s billionaires haven’t planted their imposing flags. Yet historically, the street-level business operators in Eastern Market owned their own properties, said Robert Heide, who up until about three years ago had substantial real estate holdings in the district before cashing out and “semi-retiring.” “Most of the business owners there were building owners themselves,” he said. Santemp Co. is out, having sold its six-building, 110,000-square-foot property portfolio to New York City-based ASH NYC, which redeveloped the Wurlitzer Building into the swank Siren Hotel. The company plans a mixed-use development that’s still in the early stages. As is Bert Dearing, although his popular Bert’s Warehouse, 2727-2739 Russell St., remains in operation as a tenant of Sanford Nelson’s Firm Real Estate LLC. Busy Bee Hardware sold its approximately 20,000 square feet to developer Roger Basmajian’s Basco of Michigan Inc., who plans a $6 million redevelopment. Other long-term property owners like Rocky Investment Co. have also exited the market.

SEE TRAINING, PAGE 20

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SEE MARKET, PAGE 21

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NEWSPAPER

INSIDE

Past is prologue for Kmart

In the wake of scores of eulogies for retail giant Sears, fewer words have been said about its Detroit-born corporate sibling Kmart. Hints to its future may be found in its history. Page 6

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MICHIGAN BRIEFS

INSIDE

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

Solar farm planned near Flint Plans are in the works for an approximately $250 million solar farm near Flint. Ranger Power’s project detailed last Wednesday would be built on 1,200 acres of land in Shiawassee County’s Hazelton and Venice townships, the Flint Journal reported. Representatives of Ranger Power say they have lease agreements or purchase options for the land, which is mostly farmland and vacant property. Ranger Power projects the solar farm would result in a $250 million investment in the county, $16 million in construction spending, 321 jobs during construction and $3.2 million in increased household earnings for property owners, the report said. Officials say construction at the site about 65 miles northwest of Detroit could begin by the end of 2019 and the solar farm could be operational by 2020.

Door opened to public aid for private schools

Michigan lawmakers can send tax dollars to private schools in certain circumstances, the state appeals court said last Tuesday in a major test of a 1970 amendment to the Michigan Constitution that says no public money can flow.

In a 2-1 opinion, the court said private schools can receive tax dollars to help them comply with health, safety and welfare rules without violating the constitution, The Associated Press reported. The court created a three-part test to ensure any reimbursement is incidental to teaching and doesn’t involve entanglement with religion. An example: criminal background checks of staff. “The criminal background checks are mandated by state law. ... It does not constitute a primary function or element necessary for a non-public school’s existence, operation and survival, and it does not involve or result in excessive religious entanglement,” judges William Murphy and Anica Letica said. Judge Elizabeth Gleicher seemed incredulous in her nine-page dissent, starting it with a reference to the 1970 amendment approved by voters: No public money can support a nonpublic school. “The words at the heart of this case are clear, cogent and commanding,” Gleicher said. The majority opinion “ignores the constitutional text and imposes a judicial gloss that contradicts the people’s will and the well-understood words they approved.” The American Civil Liberties Union and public school groups challenged $2.5 million that was approved in 2016 for fire drills, inspec-

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September 2017 rate of 4.7 percent. The agency said total employment in Michigan rose slightly by 1,000 during the month while the number of unemployed fell by 8,000.

Pontiac schools released from oversight

RANGER POWER

Ranger Power projects the Shiawassee County solar farm would bring $16 million in construction spending, 321 jobs during construction and $3.2 million in increased household earnings for property owners.

tions and other state requirements at private schools. Court of Claims Judge Cynthia Stephens blocked it. The appeals court overturned Stephens’ decision, sent the case back to her and ordered her to apply its three-prong test. Separately, Stephens also must decide whether money appropriated by the Republican-controlled Legislature needed approval from two-thirds of lawmakers. It passed only by a majority. An appeal to the Michigan Supreme Court is possible.

State unemployment rate down to 4%

Michigan’s unemployment rate fell by a 10th of a percentage point to 4 percent in September, the Associated Press reported. Figures released last week by the Michigan Department of Technology, Management & Budget show Michigan’s jobless rate was threetenths of a percentage point higher than the national rate of 3.7 percent last month and seven-tenths of a percentage point lower than the state’s

The Pontiac School District is no longer under state oversight, Michigan Treasurer Nick Khouri announced last week. The district had been under a consent agreement since September 2013 based on recommendations of the superintendent of public instruction and a financial review team, Gongwer News Service reported The review team found that Pontiac Schools' general fund budget deficit increased from $24.5 million to $37.7 million between 2011 and 2012. Unpaid bills to vendors totaled about $33 million as of the end of June. Pontiac Schools on May 1, 2013, defaulted on a $1.4 million debt service payment related to energy bonds issued in 2006.

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HEALTH CARE

Oakland Regional has new strategy, new name

TRANSPORTATION

By Jay Greene jgreene@crain.com

Oakland Regional Hospital in Southfield is back in the financial black with a new CEO, a new strategy, new physician investors — and now a new name. Just this week, the physician-owned hospital has been renamed Surgeons Choice Medical Center. Founded more than 40 years ago after the purchase of an old Holiday Inn as Great Need Lakes Rehabilitato know tion Hospital by J Hospital Claude Oster, renamed D.O., the hospital Physicians Choice was purchased Medical Center by Edward Burke, M.D., and 18 J Physiphysician invescian-owned tors in 2004 for $2 hospital was million. The phyprofitable in sicians invested mid-2000s, but $30 million in an experienced drop overhaul and in surgeries posted healthy J New strategy profits for nearly calls for expanded seven years. surgery, medical, But in 2016, nursing care the for-profit osteopathic hospital — with 30 medical-surgical beds, a 26-bed long-term care facility and 15-bed rehabilitation unit — nearly faced bankruptcy after five years of declining patient volume, rising expenses and an inability to replace a half-dozen physician owners who had retired, moved or wanted out of hospital ownership. The physician investors hired a new CEO, Steven Craig, a first-time hospital administrator who has been involved in outpatient health care delivery and is a trained corporate psychologist, to put their turnaround plan in effect. By adding 13 additional physician investors, most of whom are orthopedic, hand or eye surgeons, and hiring new employees, surgery volume at the hospital has increased about 40 percent the past three years. In 2018, surgery volume was about 550 per month, or 6,500 annually, from a low of about 380-420 per month, or about 5,000 annually, in the mid-2010s. Before the 2009 recession, the hospital’s volume topped 7,000 per year, Craig said. “This place is a diamond in the rough. All we needed was a new plan and a restructuring,” said Craig, adding that Surgeons Choice offers payers and employers surgery options that are half the costs of other, larger hospitals. “We just have to manage it right to be successful.” SEE HOSPITAL, PAGE 20

MAY MOBILITY INC.

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

LARRY PEPLIN FOR CRAIN’S

Clockwise from top: Ann Arbor-based May Mobility serves self-driving rides to Bedrock employees in Detroit, scooters have become a part of the transportation landscape downtown along with rental bicycles.

Options change commuter landscape A year ago, there were no scooters. There weren’t any semi-autonomous shuttles ferrying Quicken Loans employees to a parking garage in Greektown. Google’s Waze carpooling service wasn’t operating in metro Detroit. Ford Motor Co.’s Chariot Transit Inc. wasn’t shuttling Quicken employees to work in 14-passenger transport vans from suburban locales. SMART’s FAST bus service wasn’t running up and down Woodward, Gratiot and Michigan avenues. And the QLine streetcar on Woodward Avenue and Mogo Detroit bike

CHAD LIVENGOOD clivengood@crain.com

share were just six months into operation. The way people to get work and move around downtown Detroit has

rapidly changed in a matter of 12 months. And Kevin Bopp is smiling. As vice president of parking and mobility for Bedrock LLC, Bopp’s job is to create new options for employees of Quicken Loans, affiliated companies and Bedrock tenants to get to work each day. Bopp manages 19,000 parking spaces for the 17,000 employees of the Quicken Loans family of companies and some of the tenants in Dan Gilbert-owned buildings that now total 50,000 downtown workers. Bedrock is the real estate management

arm of Gilbert’s downtown Detroit business empire. Bopp said his mission is to create “optionality” for getting into and around downtown Detroit — and change long-held habits. “We’re really trying to be thoughtful about a changing commuter landscape — not everybody wants to drive to work every day,” Bopp said in an interview for the Crain’s “Detroit Rising” podcast inside a May Mobility shuttle while it looped around downtown on its 1-mile fixed route through Cadillac Square and Greektown. SEE COMMUTER, PAGE 19

NONPROFITS

Garden Fresh founders work to slake thirst for literacy By Sherri Welch swelch@crain.com

Garden Fresh Gourmet founders Jack and Annette Aronson are looking to take a classroom literacy program that’s shown early success in Ferndale and Hazel Park into Detroit high schools, while also expanding the more intensive tutoring and programs offered by nonprofit Beyond Basics there. To fund both literacy efforts, they’re

Branded water bottle.

launching a nonprofit bottled water line intended to create an annual revenue stream of $1 million within two years. The couple has a truckload of “Thirst 4 Knowledge” brand water

bottles produced by Absopure ready to go and are seeking trademark protection for the brand. They’re in talks with two large Michigan retail chains to get widespread distribution of the bottled water, but Jack Aronson said he’s guessing the water, like Garden Fresh salsa, will get its start on the shelves of a smaller, regional chain like Plum Market first. Aronson said he’ll also look for opportunities to sell the bottled water di-

Need to know

JJCouple launching nonprofit bottled water line to fund program expansion JJEffort has shown early success in Ferndale, Hazel Park

rectly to local employers, giving them naming opportunities as new literacy programs open up at each Detroit high school. SEE LITERACY, PAGE 21

MUST READS OF THE WEEK Park Avenue buyer led by Oakland County developer

Westin Book Cadillac strike in second week

Joe Louis Arena sale tops $1.2 million

Troy-based developer and investors plan unspecified hotel. Page 17

Detroit hotel risks loss of event business if strike doesn’t end soon. Page 7

So far, more than 8,000 seats have been sold; sale ends soon. Page 7

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Boys & Girls Clubs of SE Michigan taps Ford Fund exec as new president, CEO By Sherri Welch swelch@crain.com

The Boys & Girls Clubs of Southeastern Michigan is tapping a Ford Motor Co. Fund executive to lead the organization as it seeks to freshen the relevance of its programs, step up collaborations and stabilize its finances. Shawn Wilson, who has led multicultural engagement for the carmaker’s philanthropic arm for the past four years, will join Boys & Girls Clubs as its new president and CEO on Nov. 26. He will succeed Mary O’Connor, national director of major metro services at Boys & Girls Clubs of America, who is on loan to the local affiliate, serving as interim CEO. O’Connor came on board earlier this year after an earlier interim CEO Brad Baumgardner, someone known as a change agent in the national club’s system, held the role for a short time. The new role presents an opportunity to work with stakeholders “to reimagine new ways in which the organization can become a driving force for youth and community building in Southeastern Michigan,” Wilson said in a release. Wilson, 44, brings years of experience in community and youth engagement to the new role. Among other responsibilities in his current role at Ford Motor Co. Fund, he has served as strategic lead for the Ford Resource and Engagement Centers, a $15 million placebased strategy to drive economic mobility for residents in Detroit neighborhoods. Under his direction, the two Ford Resource and Engagement Centers on the city’s southwest and east sides distributed 2.5 million pounds of food over the past five years, served 30,000 youth and families annually, provided $15 million in tax returns to families and delivered workforce and entrepreneurship training to 8,000 individuals. More recently, Wilson also served

Need to know

Shawn Wilson brings experience as nonprofit seeks to freshen relevancy, step up collaborations, stabilize finances 

 Appointment follows nine-month search  Organization chairman calls Wilson's hiring “a game changer”

Shawn Wilson: Tapped to make change.

Hiram Jackson: Wilson is a game changer.

on the leadership team tasked with the initial rollout of Ford’s $740 million Corktown campus project. As the community engagement lead for the project, Wilson oversaw efforts to bring community voices into planning for the new campus. Prior to Ford, Wilson served as president and CEO of Usher’s New Look in the Atlanta, Ga., area from 2004-2014. In that role he worked with the Grammy-award-winning artist to develop the organizational strategy and program model for the organization. During his tenure, the nonprofit certified over 21,000 youth as global leaders and delivered 300,000 hours of curriculum-based training in five states and seven global communities including Nairobi, London and Shanghai, according to Wilson’s LinkedIn profile. In that role, he also led development of “Music Leadership 101,” a social enterprise and blended-learning K-12 curriculum adopted in Georgia, Ohio, North Carolina and Florida. For the 11 years prior, Wilson was founder, president and CEO of social entrepreneur consultancy SWI Consulting Inc. and Athletes Helping

Youth Inc., an Atlanta organization that worked to align high net worth individuals, corporations, foundations and celebrities with community causes and issues including youth obesity, education and gun violence. He also served as senior program director for the YMCA of Metropolitan Milwaukee from 1991-1998. Boys & Girls Clubs Chairman Hiram Jackson, publisher of the Michigan Chronicle, said he’s known Wilson since his days of working for Usher’s New Look. His hire is “a game changer for us,” Jackson said in a release. His “transformative thinking and innovative ideas will not only propel the Boys & Girls Clubs of Southeastern Michigan to new heights, but also redefine how youth services are delivered to children and families throughout the region,” he said. Wilson’s appointment at Boys & Girls Clubs comes following a ninemonth search launched as the nonprofit seeks to turn around years of financial losses, declines in club memberships and a workplace culture that led to high employee turnover. Since the beginning of the year, the nonprofit has closed three of its 10 sites, shuttering locations in Shelby Township, Ypsilanti and Detroit as part of a newly adopted strategy to collaborate with other organizations and share space to deliver its programs for youth ages 6-18. Today, it serves over 15,000 youth annually. The nonprofit is also taking a new look at its programs, lifting up workforce development lessons it’s long taught kids, beginning at age 13. Those include things like how to dress, show up to work on time and provide good customer service, things that have been embedded in the club’s programs traditionally but have never been labeled as “workforce development,” Jackson said in August. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

Financier said to weigh sale of Dura

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By Kiel Porter and David Welch Bloomberg

Financier Lynn Tilton is working with Jefferies Financial Group Inc. to seek buyers for Auburn Hills-based auto-parts maker Dura Automotive Systems Inc., according to people familiar with the matter, as she looks to unload some of her investment firm’s holdings to repay creditors. Dura, owned by Tilton’s Patriarch Partners, could fetch about $1 billion, said the people, who asked not to be identified because the matter isn’t public. Jefferies is preparing Dura for an auction likely to draw interest from private equity firms and other auto-parts suppliers, they said. A representative for Jefferies declined to comment while representatives for Dura and Patriarch didn’t respond to requests for comment. Dura comes to market after Tilton reached a legal settlement in May with bond insurer MBIA Inc. The agreement involved three bankrupt investment funds Tilton and MBIA had created to originate loans for distressed companies owned by her

Need to know

Auburn Hills-based supplier is being prepared for an auction 

 Dura is owned by Tilton’s Patriarch Partners investment firm 

Tilton seeks cash to repay creditors

BLOOMBERG

The sale of Auburn Hills-based Dura Automotive, could net Lynn Tilton and her Patriarch Partners about $1 billion, sources said.

turnaround firm. Tilton agreed to step aside as head of the funds for at least 15 months, according to court documents. She can resume her position if she can re-

pay MBIA and other creditors with proceeds from selling or refinancing some of her portfolio companies. The documents don’t publicly detail which ones. Tilton has 25 operating companies, including Dura, MD Helicopters Inc. and Rand McNally, she said in a bankruptcy court filing in March. Patriarch acquired Dura for $125 million in 2010, less than two years after the company emerged from bankruptcy. It now generates about $90 million in annual earnings before interest, tax, depreciation and amortization, the people familiar with the matter said. Dura designs and makes driver control systems, lightweight metal vehicle frames, battery trays and other auto body parts, according to its website. Tilton started Patriarch in 2000 after two decades as an investment banker at firms including Morgan Stanley, Goldman Sachs Group Inc. and Amroc Investments. A celebrity within the business world, she specializes in buying troubled companies and fixing them.

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The first Kmart store was located in Garden City. It closed last year.

Look to Kmart’s history to see its future

The past week has seen an outpouring of eulogies for Sears — the Amazon of its day, the pioneer of the department store, the one-time largest retailer in America. What I’ve seen little of is similar remembrances for its Detroit-rooted corporate sibling: poor, unlamented Kmart. Sears Holdings Inc. Chairman Ed-

die Lampert, after riding a painful decline all the way down, still seems intent on preserving both brands. His investment company, ESL Holdings, appears to be planning to bid to buy about 400 profitable stores through the bankruptcy process. It would be what’s called a “stalking horse” bidder — essentially offering up the opening bid in an

MICHAEL LEE malee@crain.com

The combined company took Sears’ name and abandoned ship at the mammoth, forbidding Kmart headquarters in Troy, which is still awaiting redevelopment. auction to pay creditors, of which ESL is also one of the largest. But who else would buy? And is there really a path forward for Kmart and Sears to survive? We can look at the past 30 years of Kmart’s long, slow decline for some clues. In the 1980s and 1990s, Kmart was a retail behemoth that stretched its purview far beyond its big-box discount stores. Under CEO Joe Antonini — who started out as a store manager at a Kresge’s five-and-dime — Kmart got big, and very diverse. It had through acquisitions gotten into the business of warehouse clubs (Pace Membership Warehouse), office supplies (OfficeMax), bookstores (Waldenbooks and later, Ann Arbor-based Borders), home building supplies (Builder’s Square) and sporting goods (Sports Authority). Unfortunately, the big capital outlays required to diversify in that way led to underinvestment in the core Kmart supply chain and complaints that Kmart had trouble keeping its shelves stocked. A shareholder revolt demanded that the company focus on that core business, and the side businesses were sold or spun off. A common thread: None of them exists anymore as a standalone busi-

Joseph Antonini: Diversified Kmart holdings.

Chuck Conaway: Declared price war with Wal-Mart.

ness; all were either acquired or shut down. That lack of attention to maintaining and improving the Kmart stores is a refrain we’ll hear again and again. Kmart’s next moment of truth came under Chuck Conaway, hired by Kmart after time as a top executive of the CVS drugstore chain. Conaway did focus on improving the store experience and plowed money into improvements. He also made the mistake of declaring a price war with Wal-Mart Stores Inc., something Kmart didn’t have the scale or inventory controls to do. And a big mistake it was, ending with Kmart in Chapter 11 bankruptcy. Enter Lampert. The billionaire investor who had been touted as a “next Warren Buffett” had been buying up Kmart’s debt and would ultimately control the company as it exited bankruptcy. Lampert was no retailer, but was seen as a wizard of financial engineering. Post-bankruptcy, Kmart’s stock rocketed on speculation that he had a secret plan to unlock the value of the company’s real estate, or would use it to roll up other companies into the next Berkshire Hathaway, or any of a number of other fever dreams. When he bought Sears and combined the two companies, those dreams got even more intense. The combined company took Sears’ name and abandoned ship at the mammoth, forbidding Kmart headquarters in Troy, which is still awaiting redevelopment. The company’s stock began a long runup and peaked at nearly $150 a share — in April 2007.

Lampert long stated that he was trying to transform the company into a 21st century retailer, and invested little in maintaining and improving the Eddie Lampert: stores, which reSeen as wizard of mained stuck in finance. the 20th century and became increasingly sad looking. If Lampert succeeds in keeping some of those stores alive through bankruptcy — and that’s a Super Kmart-sized “if” — there might be around 200 Kmart and 200 Sears stores left in the U.S. (Fascinating fact: That would mean there are more Kmarts in Australia, where they’re owned by a separate company, than at home.) Can a big-box retailer that size compete? Bankruptcy can shed a lot of old obligations, but it’s hard to see how such small chains can really compete after losing the economies of scale that weren’t enough to compete with Wal-Mart and Amazon even when Kmart had 2,000 stores and not 200. The stores haven’t gotten any better. They still have issues keeping items on the shelves that shoppers want, and seem caught in a time warp from 1985. And the relentless publicity from the chains’ decline has done nothing to dispel that image. In short, Kmart’s got all the same problems it has had for 30 years — and has lost essentially all the advantages it might have had at one time. Even Lampert isn’t going to pour the kind of money in that the chains would need to survive. Now, in Kmart’s hometown, between stores already gone and stores now slated to close, there will be only three Kmarts left — in Belleville, Warren and Waterford Township. If you’re nostalgic for the 1980s, you might want to visit them now. They may not be around long. Michael Lee: (313) 446-1630 Twitter: @MichaelAllenLee

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Joe Louis Arena seat sale tops $1.2M so far, ends soon By Bill Shea

bshea@crain.com

The sale of Joe Louis Arena’s seats has generated more than $1.2 million since it began May 1, and just two weeks remain before it ends. So far, more about 8,000 seats from the city-owned arena have been sold, according to Robert Levy, president of Bloomfield Hills-based industrial asset auctioneer Robert Levy Associates LLC, which Detroit hired to handle the direct sale of the seats and fixtures. Another few hundred thousand dollars has been generated from the sale of nonseat items such as signs, fixtures and memorabilia. The basic seat for sale was actually a pair of connected chairs because they’re linked by a single armrest. Those began at $150, but have since been reduced to $50, Levy said. About 4,500-5,000 seats remain for sale, he added. Anything not sold will be scrapped. The online seat sale site is thejoeseats.com. In addition to the basic red chairs from the seating bowl, there are black, brown and blue seats from suites and special sections still for sale. Fixtures such as signs, railings, lights, suite furniture and trough urinals remain for sale. So are the contents of the Ilitch family’s owner suite, which includes a toilet, shower, bars, cabinets, ceiling fans, etc. Another online auction of those arena fixtures, via OrbitBid.com, is scheduled for Tuesday. Additionally, sealedbid commercial auction of salvageable major arena infrastructure, such as the heating/cooling systems and electrical wiring, is being finalized and should be done next week, Levy said. Levy said he’s pleased with the seat sale because the initial estimate was that only 6,000 seats would sell. About 70 percent of the arena’s 20,00 seats were available for sale. Most were sold to fans or local business such as bars. Not many were sold to professional dealers that specialize

UNITED SHORE

Wholesale mortgage firm United Shore bought 40 seats from to-be-demolished Joe Louis Arena in Detroit for use in a conference room in its new Pontiac headquarters.

Need to know

JJSale of 8,000 Joe Louis Arena seats has

generated about $1.2 million

JJAuction of arena fixtures set for Tuesday JJFormer Red Wings home will be razed for redevelopment

in reselling seats from historic venues. “Some of those guys bought parts. They didn’t buy whole seats,” Levy said. “The majority of the buyers were end users.” One of those was Mat Ishbia, CEO of United Shore Financial Services LLC. He bought 40 seats for his wholesale mortgage company’s new headquarters in Pontiac. “They are in use in our ‘The Joe’ con-

ference room, a themed dedication to Joe Louis Arena,” Brad Pettiford, senior communication strategist at the company, said via email. “All of our conference rooms are named after various locations, mostly cities like Pontiac, Detroit, Birmingham, etc., but we also have a ‘Silverdome’ conference room with seating from there, as well as a ‘Breslin’ conference room with actual hardwood from MSU’s playing facility.” United Shore also bought the Red Wings’ locker room doors, arena section signs and concourse lighting, Pettiford said. Crain’s broke the news in October 2016 that the city and Olympia were in talks to create an auction to dispose of the arena seats, which are most often bought by fans, sports bars and even

barbershops. Levy said buyers have been able to pick out specific seats, and some have acquired seats that had particular memories for them, such as a first kiss or marriage proposal. “We made sure everyone walked out with what they wanted. We had some really cool buyers,” he said. Levy previously handled asset auctions for the city during bankruptcy, selling vehicles and equipment, and for major corporate sales such as for Eastern Airlines and Chrysler Corp. The city is selling the seats and fixtures because the arena’s primary tenant, the Detroit Red Wings, left the building last year to play at new Little Caesars Arena. After the team removed what it owned from the building, the city hired Levy and Byron

Center-based appraisal and auction firm Miedema Asset Management Group Inc. to dispose of what’s left. Terms of the deal between the Detroit Building Authority, which operates the arena for the city, and the auctioneers weren’t disclosed. Levy told Crain’s earlier this year that the deal is a “cumulative tiered structure” for sales fees, but deferred any comment on specific financials to the city. The mayor’s office hasn’t disclosed the financial arrangement. The city has said it will use proceeds to offset its cost of maintaining the arena, such as utilities and security. Detroit spent $57 million to build the arena, which opened in 1979 and was named for the famed heavyweight champion boxer who once lived in the city. The Red Wings won four Stanley Cups during their residency at Joe Louis, and had a streak of 25 consecutive playoff seasons — helping build a loyal fan base that includes people willing to buy seats from their team’s old home. The team’s corporate parent, Olympia Entertainment owned by the Ilitch family, last year removed everything owned by the Red Wings and relocated it to the new arena, put it into storage or auctioned it. The only involvement from Olympia with the sale was ensuring the auction information was distributed to the team’s approximately 7,000 season ticket holders, Levy said. They got a chance to buy seats before the public sale began May 12. The arena will be demolished and the site redeveloped as part of Detroit’s deal to exit from municipal bankruptcy in 2014. Gotham Motown Recovery LLC, a subsidiary of New York Citybased Financial Guaranty Insurance Corp., has until January 2020 to submit to the city its development plans for the 9-acre riverfront site. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

Detroit hotel risks loss of event business if strike isn’t resolved By Annalise Frank afrank@crain.com

The Westin Book Cadillac hotel in downtown Detroit is on track to lose major event business as a union strike there winds through its second week. If a solution isn’t found soon, organizers of the upcoming CityLab Detroit conference and Business Leaders for Michigan’s Michigan CEO Summit said last week that they could change venues. The dispute has already factored into at least two moves: an Oct. 9 Detroit Economic Club meeting and a Great Lakes restoration conference last Wednesday and Thursday. The Marriott-owned downtown hotel and event hub isn’t likely to lose major chunks of revenue from events alone, according to experts. But axing conferences that draw big catering orders and attendees from out of town who rent rooms could hurt. Marriott and the Westin Book Cadillac have not answered specific questions on business impact, instead providing statements that the hotel is still operating and serving guests. Nearly all 160 housekeepers, servers, door attendants and cooks represented by Detroit-based hospitality union Unite Here Local 24 at the Marriott-owned hotel are on strike after a walkout Oct. 7. After a bargaining meeting Thursday on which union

ANNALISE FRANK/CRAIN’S DETROIT BUSINESS

Westin Book Cadillac Detroit workers demonstrate Wednesday afternoon.

representatives declined to comment, a date for a return to the negotiating table hadn’t been confirmed as of last Thursday, Unite Here spokeswoman Rachel Gumpert said. The walkout came after months of negotiations. Contracts expired June 30. Local 24's chief demands of the downtown hotel at 1114 Washington Blvd. are for higher wages, hiring temporary workers as full employees and

giving the union more input on technology changes that could cost jobs. Union workers at another local Marriott-owned hotel, the Metro Airport Westin, have voted to authorize a strike. As of late last week, none had walked out. The longer Local 24 strikes the Westin Book Cadillac Detroit, the steeper the financial impact. “Management will weigh and re-

weigh the short-term revenue losses against the forever costs of granting higher wages,” Erik Gordon, clinical assistant professor at the University of Michigan’s Ross School of Business, said in an email. “Events are important to hotels if they fill sleeping rooms and produce catering revenue. Renting meeting rooms is not usually as profitable.” Losses depend on cancellations, said Marick Masters, director of Wayne State University’s labor studies program. Hotels like the Westin Book Cadillac generally make around 68 percent of operating revenue from renting rooms and 25 percent from food and beverage, he said, adding that a downtown institution like the Westin also likely earns good money from weddings and other events. The Healing Our Waters-Great Lakes Coalition postponed its annual conference scheduled for Wednesday and Thursday at the Westin Book Cadillac due to the hotel worker strike, the environmental restoration group announced Monday. More than 300 people were expected to attend. It's been rescheduled for the spring at a yet-tobe-determined location. The Michigan CEO Summit scheduled for Nov. 1 at the hotel has on its speaker list Consumers Energy Co. CEO Patti Poppe, Blue Cross Blue

Shield of Michigan CEO Daniel Loepp and Amtrak CEO Richard Anderson. Spokeswoman Anna Heaton confirmed in an email that host Business Leaders for Michigan has a “back-up plan” to switch to another venue, but is “very hopeful the wage issue will be resolved by then.” Urban issue conference CityLab comes to Detroit Oct. 28-30 — currently booked at the Westin Book Cadillac, but it will move if the strike isn't resolved, organizers confirmed. A host of prominent businesspeople, philanthropists, educators and politicians are set to discuss technology, universal basic income, housing and more at the event hosted by The Atlantic magazine, the Aspen Institute and Bloomberg Philanthropies. “(The Westin’s) competitors are able to take advantage of this,” University of Detroit Mercy marketing professor Michael Bernacchi said. “While (the hotel's) got a brand name that’s clearly recognizable and has been successful, to repair this damage and to respond to competition is not going to be easy ... “Time is not on their side at all. Anything that gets moved probably is gone forever and anybody that thinks differently is kidding themselves.” Annalise Frank: (313) 446-0416 Twitter: @annalise_frank

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OPINION COMMENTARY

A remarkable gesture

ust try to imagine how successful you must be during your business life to be able to encourage your widow to donate $100 million in honor of your 100th birthday. In two different towns. Ralph Wilson was obviously very successful in business during his lifetime. But what is even more remarkable is the intention to give away so much after his death. He set up a foundation, not to live forever, but to give away its assets in 20 years and simply disappear. The foundation will get rid of everything and go out of business. That is simply unheard of in the charitable world. Foundations are supposed to get a life of their own and live forever. Not this one. But even more remarkable is the generosity of the family and his widow, Mary Wilson, who had to approve and endorse the philanthropy. Buffalo and Detroit are two cities that earned his trust and affection. Each city would benefit from his philanthropy. He was a pioneer in professional football and was a charter owner in the American Football League, of the Buffalo Bills. But he

KEITH CRAIN Editor-in-chief

never forgot his roots. What he did was stunning. These are some of the largest charitable gifts you’ll ever hear about. When he died and the team in Buffalo was sold, you might have expected the heirs would have faded into the background and led a life without worry. But the Wilsons had different ideas. His success in business all his life allowed the family to make these stunning gestures after he died. Profits are not a dirty word, and Detroit and Buffalo should be eternally grateful for his business success and the family’s generosity. Thousands of Detroiters will enjoy the fruits of his labor. We are all very grateful.

Workforce solution? Tuition help for workers that actually helps

ith employers scrambling to find new workers with the right talents and skills to fill critical jobs, perhaps they’re already under the companies’ roofs. Many companies offer tuition assistance or reimbursement programs for employees to go back to school and earn a certificate or degree or just to take certain courses to hone skills the employer needs. But there’s a big barrier for employees to enroll in college courses: the upfront cost. For example, a single three-credit-hour graduate class at Wayne State University costs $2,100. At Oakland University, taking junior-level courses part time (nine credit hours) to finish a bachelor’s degree costs nearly $4,500. Per semester. Credit card giant Discover Financial Services Inc. found the upfront cost caused lower-level call center employees to drop their higher-education ambitions because they simply couldn’t afford to front the cost of tuition, books and fees — and then wait months for reimbursement. “That’s an enormous cash-flow problem,” said Jon Kaplan, chief learning officer for Discover Financial Services. At an employee town hall meeting in June, the Riverwoods, Ill.-based credit card company announced a change in its tuition reimbursement benefit to a tuition remission where the company pays three universities directly for their employees’ tuition, books, fees and any taxes if the benefits exceed the $5,250 federal limit for educational reimbursements.

CHAD LIVENGOOD clivengood@crain.com

“There was an audible gasp from the audience when we rolled it out,” Kaplan said Tuesday during a discussion at a Detroit Regional Chamber breakfast meeting at the Detroit Athletic Club. Kaplan was making a case to business leaders in attendance that they should rethink their tuition reimbursement programs as one solution to addressing the talent gap. “We think it’s going to be a very minimal expense to get 1,000 people every year enrolled in college,” Kaplan said. There’s some evidence that tuition reimbursement programs do have a return on investment for employers. The Lumina Foundation studied Cigna Corp.’s tuition reimbursement program between 2012 and 2014 and found it had a 129 percent ROI for the global health care services company through fewer turnovers and staying with the company longer, cutting down on HR management costs. Employees who used Cigna’s tuition benefit also saw their wages grow by 43 percent after they attained new skills and got promotions within the company, according to the Lumina study.

DETROIT REGIONAL CHAMBER

Jon Kaplan, chief learning officer for Discover Financial Services, talked about the credit card giant’s new approach to paying for the college tuition of employees as a means of developing its talent pool during a Detroit Regional Chamber breakfast last week at the Detroit Athletic Club.

For switching to tuition remission model, there are some mechanics that each employer has to work out, Kaplan said. Discover hired for-profit firm Guild Education to manage its tuition remission program and negotiate lower tuition charges with the three partnering universities — economies of scale that an individual employee couldn’t achieve on his or her own. The credit card company requires each employee enrolled in its Discover College Commitment to fill out the Free Application for Federal Stu-

dent Aid (FAFSA), which can reduce the tuition bill, depending on what aid they qualify for. Discover also is no longer policing its employees’ grades like it used to. Under its old tuition-reimbursement program, if an employee failed a college course they’d already been reimbursed for, they had to repay the company for the cost, Kaplan said. “We actually found that our employees would quit,” Kaplan said. “They’d rather run than try to pay that back.” Under the new remission program, the company stops paying the tuition

bill if an employee’s grades slip. “We’ll pay for that D, we’ll pay for an F,” Kaplan said. “But you may not be able to get back into the program if you don’t increase your grades.” And Discover Financial isn’t paying for degrees in poetry or Latin. The company has tailored its tuition remission benefit to seven specific degrees in fields that would benefit the company. Discover company officials are trying to build loyalty in its existing lower-skilled workforce while getting them trained for jobs that require more skills. It’s an interesting approach compared with the frantic hunt underway in most human resources departments right now for talent. And for big businesses like Discover, it’s a new approach to tackling the talent crisis without waiting for some outside force — such as politicians — to fix the educational pipeline that more and more companies are finding to be broken. “If you start investing in your frontline workers, it’s like putting chips on the table all over the place — you’re getting a lot of return for that,” Kaplan said. “It’s an easier way to build talent.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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.

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Strong fuel economy standards support jobs, innovation

nder direction from President Donald Trump, the U.S. Environmental Protection Agency and U.S. Department of Transportation are considering rolling back fuel economy standards for cars, trucks and SUVs. That could be disastrous for Michigan, put the jobs of thousands of workers in the auto sector on the chopping block here and around the country and reverse the recovery of our auto industry. During a recent hearing in Dearborn, people ranging from leaders in the automotive industry to union leaders to environmental advocates to economic experts all voiced concerns with how this proposal will impact jobs, innovation, sustainability and our future. I am adding my voice to theirs as the mayor of a city that serves as a hub of innovation and a global leader in electrified, connected and autonomous vehicle advancements. Boasting more than 200 firms and 20,000 individuals in the automotive and mobility industry, the Ann Arbor area has experienced rapid growth in the past decade and will likely maintain or accelerate this pace. The region houses the main campus of the University of Michigan and cutting-edge local testing and proving grounds like MCity, the American Center for Mobility and the EPA National Vehicle and Fuel Emissions Laboratory. The proposal to roll back fuel efficiency standards — by the agencies’ own estimation — could cost up to 60,000 auto jobs across the nation. In Michigan alone, 70,000 people are working to develop and build the advanced parts needed to make our cars and trucks more fuel efficient. This means that, as a state, we have a significant amount to lose from these proposed rollbacks, not just in direct automotive jobs but in the advanced technology and advanced manufacturing ecosystem connected to it. There is also the impact to human health and our environment, as well as a financial impact to consumers associated with these proposed rollbacks. Rolling back the standards means more air pollution in our towns and cities, increasing health impacts and exacerbating the emis-

OTHER VOICES Christopher Taylor

sions driving climate change. The smart standards already in place reduce U.S. dependence on foreign oil, protect consumers from increasing gas prices and save all drivers money at the pump. As the EPA noted in

2016, a new vehicle meeting the current 2025 carbon pollution requirements will save consumers at least $3,400 over the life of a vehicle. What we need — for our economy, our environment and our future — is for the agencies to reconsider this bad proposal and maintain strong fuel economy standards for cars, trucks and SUVs. Rolling them back jeopardizes the environment, quality of life, and innovation economy that we are building in communities like Ann Arbor and around the state and country. Today, we are well-positioned to compete for the technology and manufacturing jobs of tomorrow, but

What we need — for our economy, our environment and our future — is for the agencies to reconsider this bad proposal. giving up on common-sense fuel economy standards gives a leg up to our competitors in the global race to design and manufacture the technologies needed to make cleaner vehicles. Instead of keeping us on the road

to a future that is more affordable, cleaner and healthier for all, these proposed fuel economy rollbacks will increase what consumers pay at the pump, destroy good-paying jobs and add pollution to our air and water. As a community, Ann Arbor stands ready to say “no” to these ill-conceived and harmful rollbacks and is ready to work with the EPA, other communities, auto manufacturers and others to ensure that we protect and create more stringent fuel-economy standards for the benefit of all. Christopher Taylor is the mayor of Ann Arbor.

LETTERS

History shows mobs don’t end well

To the Editor: Regarding Keith Crain’s Oct. 15 column, “It is still a mob,” everything I’ve ever witnessed and every history I’ve ever read proves that if a mob isn’t controlled, it takes control. Ironically, reformers who are tolerant of mobs are swept up with all the rest when mobs prevail — the French liberals (Lafayette among them) by the Jacobins, Russian reformers by the Bolsheviks, Chinese democrats by the Maoists. Contrary to what many believe, we’re not immune to these tendencies in America. Tom Doran Plymouth Send your letters: Crain’s Detroit Business will consider for publication all signed letters to the editor that do not defame individuals or organizations. Letters may be edited for length and clarity. Email: malee@crain.com

Happy, healthy employees help every business win. No matter how big or small your business is, you depend on your employees. And nothing shows you care about them more than offering Blue Cross Blue Shield of Michigan and Blue Care Network. Our members awarded us the 2018 J.D. Power award for “Highest Member Satisfaction among Commercial Health Plans in Michigan.” Learn more at bcbsm.com/employers

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For J.D. Power 2018 award information, visit jdpower.com/awards. Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association.

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FOCUS

CRAIN’S HEALTH CARE LEADERSHIP SUMMIT

In this package

 Washington state, Michigan execs discuss efforts. This Page  Section 298 pilot programs move ahead. Page 11

CROSS-COUNTRY LESSONS

 Panelists: What’s working, what’s not, how to coordinate care. Page 12  Jails, hospitals, schools are de facto “safety nets.” Page 13

ANDREW JOWETT FOR CRAIN’S

Moderator Mark Lezotte (left); Dennis Mouras, CEO, UnitedHealthCare Community Plan of Michigan; Isabel Jones, manager of Managed Care Integration, Washington State Health Care Authority; Willie Brooks, president and CEO, Detroit Wayne Mental Health Authority; and Dohn Hoyle, director of public policy, The Arc Michigan, speak on a panel about the best ways to coordinate and pay for mental health care.

Washington state Medicaid integration executive, Michigan HHS director discuss efforts at Crain’s Health Care Leadership Summit By Jay Greene jgreene@crain.com

With Michigan one year away from testing whether Medicaid HMOs can work effectively with behavioral health organizations to integrate health services, a Washington state Medicaid official last week gave attendees at Crain’s Health Care Leadership Summit a glimpse of one potential future. At The Henry Hotel in Dearborn, Isabel Jones, integration manager with the Washington State Health Care Authority, said three Medicaid health plans have already begun contracting in two of the state’s 39 counties to manage the physical and behavioral health of several thousand people. Results so far are promising, she said, with eight of 31 outcome measurements exceeding other counties and the remaining 23 outcomes showing no significant changes. “The first (six months) were rocky for the health plans to implement (the plan and contract with all willing behavioral health providers in their markets), but we are happy with the results so far,” Jones said. Three more counties have begun integration this year with 180,000 lives covered with 24 counties joining in 2019 and the final 10 in 2020. Jones said the Washington Legisla-

Need to know

 Crain’s 10th Health Care Leadership Summit debated integration of physical and mental health  Keynote speakers included Washington state Medicaid integration executive Isabel Jones and Michigan HHS Director Nick Lyon  By fall 2019, Michigan plans to go forward with three pilots and one demonstration project to test integration

ture approved legislation in 2014 to move to an integrated Medicaid behavioral and physical health system by 2020, but counties could join earlier if they wanted. For nearly 20 years, Jones said, Washington Medicaid and others used three systems of care for physical, mental health and substance abuse services. The intellectual developmentally delayed population had already been integrated into managed care plans. “We tried everything — memorandums of understanding, joint meetings (to improve care coordination) — to serve our clients better,” Jones said, adding that in 2016 the state of Washington ranked 46th nationally in providing mental health services to its population. While Jones cited some evidence that outcomes have improved in the

ANDREW JOWETT FOR CRAIN’S DETROIT BUSINESS

Isabel Jones, integration manager with the Washington State Health Care Authority, speaks about her state’s experience during the Crain’s Health Care Leadership Summit at The Henry Hotel in Dearborn.

two counties, she said clinical integration between physical and behavioral health providers is still a work in progress. “The Medicaid plans are trying to offer incentives to the providers to co-locate services under one location to make it easier to coordinate care and for (patients) to receive ser-

vices,” she said. “There need to be mergers in the provider community or collaboratives to co-locate services.”

Lessons learned As Michigan moves to design its integrated system, Jones said Wash-

ington found that mandating strict standards for provider networks for the HMOs is necessary. For example, Washington regulators require that any Medicaid HMO that contracts with the state must also contract with any willing behavioral health provider. She said if the state found out a provider in a market did not have a contract, the HMO would need to ensure that was corrected or explain why. “When Medicaid enrollees are in a single health plan, they can receive physical, mental and substance use services better because incentives are much better aligned,” Jones said. “The health plans can do early intervention and more to a higher level of care and deliver higher-end services.” Jones said it appears that the Medicaid health plans are saving money on the physical health side by being able to deliver mild, moderate and serious mental health services. They appear to be using those premium dollar savings to expand behavioral health services, she said. To prevent profiteering by the Medicaid HMOs, Jones said the state law limits the health plans to a 3 percent profit margin, and they are required to spend at least 85 percent of premiums on medical care. SEE SUMMIT, PAGE 13

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SPECIAL REPORT: HEALTH CARE LEADERSHIP SUMMIT

‘Section 298’ pilot programs move ahead By Jay Greene jgreene@crain.com

The differences in philosophies were evident when Lisa Williams, executive director of the West Michigan Community Mental Health, met last summer with Sean Kendall, president of Detroit-based Meridian, a WellCare company, and members of the Section 298 Medicaid leadership group. Williams represented behavioral health providers and Kendall Medicaid health plans. For more than two years, the two industries have been players in a political battle over how the state of Michigan might restructure now separate $11.6 billion Medicaid physical and behavioral health financing and delivery systems. Under the existing 20-year Medicaid scheme in Michigan, the state has two separate delivery systems. Physical health for Medicaid patients is managed by 11 health plans in a $9 billion prepaid managed care system. Behavioral health services are managed by 10 regional public authorities known as prepaid inpatient health plans, or PIHPs, in a $2.6 billion system. The PIHPs receive state Medicaid dollars for covered behavioral health services and contract with mental health agencies and their providers. During a breakout panel at Crain's Health Care Leadership Summit last week, Williams described how behavioral health providers and the health plan executives began to work out their differences to integrate the two systems in three regional pilot programs in Genesee, Saginaw, Muskegon, Lake, Mason and Oceana counties. “When I think about where we started back last December with process of drafting” the initial integration plan, Williams said, “What I am most proud of are the relationships we have built through the process. We all have an overarching commitment to figure out a way to make (the pilots) operationally functional. Citizens deserve to have the best outcomes.” Williams said the health plans and the community mental health providers went from a “this is our way and this is your way” of doing things to “how can things be done together?” Kendall said the two sides developed a consensus model for how to coordinate and pay for care that was radically different in the end from each starting point. “When we started, we were far apart,” Kendall said. “The HMOs offered a fee-for-service model and the community mental health (providers) wanted a sub-capitated (per member per month payment) model. We met in the middle. We have a mixed model to develop the program and allow for person-centered directed care. There was a big barrier at first for true financial integration. It was a big win to get it done.” But not everybody was happy. Kevin Fischer, executive director of the National Alliance on Mental Illness, which represents advocates and users of the systems, said behavioral health providers have the best interests of people in mind, but clients and families have been left out of the planning process.

Need to know

JJCrain’s panel explained different

approaches to delivering and paying for care in behavioral health and physical health systems JJProgress made in developing integrated approach, but panelists say more is needed before pilot programs begin next October 2019 JJAdvocates for behavioral health and developmental disabled population say they have been left out of discussion of how to test integration

“The concern I have is the limited role advocates have played for people we serve,” Fischer said. Phil Kurdunowicz, a manager who is designing the pilots with the Michigan Department of Health & Human Services, acknowledged there have been acrimonious discussions at times about how financial integration of physical and behavioral health should work. The state Legislature, however, was prescriptive in how the pilots should be set up, he said. “Despite various problems, (we have) an opportunity to test these

models. To Kevin’s point, there is a need to engage consumers and advocates at the local level and there also is a need to have a conversation about is this the best direction for the state to go. We are open to other ideas how to do this to extend our conversation,” said Kurdunowicz. Earlier this year, MDHHS awarded contracts for three pilot programs to community mental health agencies in six counties. The agencies will contract with Medicaid HMOs, which will be responsible to coordinate and pay for physical and behavioral health

services. The pilots are slated to begin in October 2019. Medicaid health plans participating in the pilots include Meridian, Blue Cross Complete, Molina Healthcare, UnitedHealthcare, McLaren, Health Alliance Plan and Priority Health. Panel moderator Jason Radmacher, CEO of TBD Solutions LLC in Kentwood, asked Fischer what more can be done to involve advocates in the process that primarily involves the HMOs and the behavioral health providers and agencies. SEE PILOT, PAGE 12

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SPECIAL REPORT: HEALTH CARE LEADERSHIP SUMMIT

Panelists discuss what’s working, what’s not, and how to coordinate care, pay for it in integrated system By Jay Greene jgreene@crain.com

Moderators of two opening panels at Crain’s Health Care Leadership Summit last week quickly brought out the differences between how Medicaid health plans and those involved in delivering behavioral health services view what Michigan wants to do to save money and integrate physical and behavioral health. Moderator Jeff Brown, a health care consultant and former director of Oakland and Lakeshore prepaid inpatient health plans, asked five panelists what’s working and what’s broken and needs fixing in the state’s $2.8 billion prepaid Medicaid behavioral health system. “What is good is there is a broad array of services today, but not enough,” said Marjorie Mitchell, president of MichUCAN and a longtime advocate for improved behavioral health services. “Integration happens at the provider level, not at the payer (level).” Mitchell said integration of physical and behavioral health — that Michigan wants to test in pilot projects starting October 2019 — should be more than saving money for the state. “We need more services for people. We need personal care.” Dominick Pallone, executive director of the Michigan Association of Health Plans, which represents 13 managed care organizations, 11 of which participate in Medicaid physical health, said the state’s use of HMOs since the early 1990s has worked well for everyone under Republican and Democratic administrations. “We take care of physical health, mild and moderate” behavioral health conditions, Pallone said. “It has worked well.” But Mitchell and other panelists argued that the mental health system has been historically underfunded in

PILOT FROM PAGE 11

“Have advocates at the (planning) table,” Fischer plainly said. “We fear things (will be) dictated down to us. We understand change is inevitable. I need to be able to go back to people and calm those fears. Show us our concerns are being addressed, not just ‘we heard you, now we are moving on.’” with the financing and delivery plan. Fischer said he isn’t blaming the state health department or the health plans. “It is betrayal by the state Legislature,” he said. During last year’s stakeholder meetings, advocates recommended more than 70 suggestions to improve the system that the Legislature ignored when it approved the pilot programs, he said. Kendall said he hopes the community mental health providers are representing their clients in the leadership meetings. “They (clients) are our neighbors. Our goal is to develop a program and integrate care holistically,” he said, adding: “We are trying to supplement (mental health services), not take it away.”

ANDREW JOWETT FOR CRAIN’S DETROIT BUSINESS

CEO of UnitedHealthcare Community Plan of Michigan, Dennis Mouras, addresses the audience during the panel discussion last week during the Crain’s Health Care Leadership Summit at The Henry in Dearborn.

Need to know JJBehavioral health system advocates argue system underfunded for years; skeptical Medicaid HMOs will improve system JJMedicaid health plan executives say other states that integrated have saved money and increased mental health services JJMichigan plans to test integration in three pilot programs starting in late 2019

Michigan. “We create budgets and then move them around (mental health providAs Kendall said, and other HMO executives echoed multiple times during the summit: “We believe there will be more services in the community because (of financial) savings on the physical side. Change is hard; it never is easy. (People) are used to doing things in one way. There will be bumps in the road. ... We have great people highly invested in the program, and hopefully we will come up with better outcomes.” Radmacher asked Williams about the reaction from her peers in the behavioral health community to West Michigan joining the pilot process. “It was quite mixed,” Williams said. “A number of CMHs (community mental health agencies) said to keep us posted (because) we want to start building now (and do) it the best way. Other CMHs very adamantly challenged us on participation in the pilot. Others were saying wait and see.” Elmer Cerano, retiring executive director of the Michigan Protection & Advocacy Service Inc., said the designs of the pilot programs were not what advocates wanted. “You are dealing with people’s lives,” he said. “The agenda (pilot

ers) to meet needs,” she said. “We should be asking, ‘What services are needed, and how much do we need to fund it?’ ... I talk with people all the time. None of them say we want to give money to the HMOs. They want more services and more coordination.” “Margie is right,” said Pallone. “People don’t care who is paying. They want to get served and their benefits covered. The average enrollee contract is four pages long for roles and responsibilities for members in an HMO. If someone needs (serious mental illness coverage), an inpatient site visit, there is a blame

game for who pays for it.” Pallone said that shouldn’t happen and Medicaid integration is one way to solve the problem because Medicaid health plans would be responsible for mild, moderate and serious mental health issues, including inpatient psychiatric hospitalizations, if necessary. Mitchell said the public simply wants accountability. “(I hope) the problems can be fixed without sending money to the HMOs.” But one of the problems in the current bifurcated system, which Michigan funds physical health through the Medicaid health plans and be-

structure and solution) was wrong. ... It was your agenda, not ours.” Williams said the overwhelming consensus among her peers is to ensure that the needs of the people are met in any redesigned behavioral health system. Kurdunowicz encouraged participants in the integration process to “hold us accountable. We are working very well with CMHs, listening, forming groups, investing time and resources. We are trying to report out as much as we can. We have great HMOs and great CMHs. It will be a better program once we get it up and going.” Radmacher also asked a number of other questions during the 45-minute discussion.

combining physical and behavioral health data, Meridian found in other markets that 20 percent of people were identified for additional case management. “Maybe they were not getting the services” they needed and could benefit from, he said. By coordinating care, Kendall said physical health costs went down by one-third by reducing acute-care admissions. “We can reinvest that and putting more resources on the behavioral health side,” he said. “We are working with community resources to help and support them.”

How will care coordination work?

Kendall said health plans already do care coordination on the physical health side for mild and moderate mental health services. “For serious mental illness, we need to work on that. We are looking for ways to use the resources the CMHs have developed in the community with our back end support” of data collection and case management. For example, Kendall said when

What about the intellectually and developmentally disabled population?

For now, the IDD population will not participate in the pilots, Kurdunowicz said. Instead, the state will contract with a single PIHP to manage about 61,000 people unenrolled in managed care plans, which includes 70 percent of the IDD population, he said. “It has hard to manage a community-based model under managed care,” he said. “There are long-term issues. Costs don’t decline over time, over years or decades.”

havioral health through the 10 prepaid inpatient health plans, is that the state has been slow to address behavioral health provider demands for increased funding, several panelists said. “A lot is about the money and the need to know outcomes,” Pallone said. “(The state) needs to manage taxpayer resources. Five of 10 PIHPs are running structural deficits. This is pushed to taxpayers. We need to create a payment system where we integrate the person who is paying.” But Mitchell argued that integration doesn’t do anything about getting more money into the system. “There must be a needs assessment” on the extent of the problem in Michigan and funding to match, she said. Mitchell said when things go wrong people with disabilities will not file complaints to an HMO about not receiving proper care or services. Brown asked the panel if it matters to average people who pays for their mental health services: Medicaid HMOs or behavioral health providers. Dan Russell, CEO of Genesee Health System for the past 19 years, said people don’t care who pays their bills. But they do care about receiving timely services. Tom Kendziorski, executive director of The Arc of Oakland County since 1992 and with the organization for 36 years, said he finds it difficult to believe that Medicaid HMOs will become experts on personal care to those people with intellectual and developmental disabilities. “The developmental disability population needs to be carved out of the Medicaid system,” said Kendziorski, who has two aging brothers with developmental disabilities. “Another issue is general funds, the use of non-Medicaid dollars. We have people who can’t get services before they meet deductibles.” SEE INTEGRATE, PAGE 14

Williams said access to primary care services is a real challenge in rural areas for the IDD population. For example, some women in their 50s who live in rural areas have never had mammograms. “We won’t see savings on the behavioral health side, but earlier access to care on the physical side will (reduce costs),” she said. Is the state and leadership group learning by mistakes made in other states?

The Section 298 leadership group has been working with colleagues and consultants in other states that have integrated physical and behavioral health, Williams said. “We can’t afford to screw up,” she said. “HMOs have experiences in some states where not gone well. We are building on collective knowledge. We are absolutely mindful. But the reality is Michigan is different than other states because of the inclusion of IDD population. We also have public system. It doesn’t mean we ignore the lessons.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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SPECIAL REPORT: HEALTH CARE LEADERSHIP SUMMIT Jails, hospitals, SUMMIT

schools are de facto ‘safety nets’ By Jay Greene jgreene@crain.com

Wayne County Executive Warren Evans, a former sheriff, jail director and criminal justice expert, summed up the problem of using jails to fill the cracks in a broken mental health system this way: “We are just recycling (people) and costing more at the other end.” At Crain’s Health Care Leadership Summit panel on filling the cracks in the mental health system, moderator Carmen McIntyre, M.D., chief medical officer of the Michigan Department of Corrections, asked the four panelists to describe mental health problems they see at jails, hospitals and schools beNeed cause of a broken to know health system. JJCrain's panel Evans said the addresses cracks Wayne County in the mental Jail could be conhealth system sidered the largest psychiatric JJJails, hospitals hospital in the and schools are state of Michioften overlooked when solutions are gan, partly besought to stem the cause of underfunding, a lack of state's mental treatment ophealth crisis tions for prisonJJHospital ERs ers, unfair Medboard mental icaid rules and a health patients lack of coordinabecause lack of tion with health places for them to organizations. go “Each year we spend $6 million year for mental health just trying to deal with the situation. At its core, all we are doing is maintaining order in the jail,” Evans said. “We have far more people with mental health problems in jail than in general population. We are doing nothing for them other than keeping it safe.” Evans suggested the state Medicaid program should pay for services for eligible people who are in jails. “We have people in jail that if they were out on the street would be covered,” Evans said. “You are not covered if you are in jail. ... What does it matter your residence? There are a lot of things that impede what we do.” Another problem Evans cited is because prisoners have untreated mental health conditions they end up staying incarcerated longer. “Because of mental health problems, they are there more days. We are paying for that, not with mental health dollars, but with general fund appropriations,” he said. “It continues and doesn’t make sense.” But hospital emergency departments also are faced with an overflow of people with mental health problems because there are serious cracks in the mental health system. Sanford Vieder, D.O., chair of Beaumont Health’s emergency medicine department, said boarding of mental health patients in hospital emergency departments is a constant and severe problem nationally, but especially in Southeast Michigan. SEE SAFETY NET, PAGE 14

FROM PAGE 10

Another lesson Jones said Michigan should note based on Washington’s experience is that Medicaid HMOs have a totally different billing system than behavioral health providers. “Focus on knowledge transfer. We spent a lot of time on communication” between the Medicaid health plans and the behavioral health organizations and providers, Jones said. “Health plans had to learn how the behavioral providers get paid. It is totally different. HMOs are not used to it,” she said. But Jones said Medicaid health plans reached out to providers they never dealt with before and understand “whole person care” much better. “HMOs learned to work with homeless shelters, the social (safety net) system and criminal justice, the jails. They are in constant collaboration,” she said. One barrier that must be resolved over the next several years is developing an information technology system with shared medical records between HMOs and the behavioral health system, Jones said. “Most behavioral health providers are migrating to new health records,” she said. “There is no integration yet. We have seen them move more with billing” and later she expects they will share clinical information once privacy issues are worked out. Jones said Washington state received $1.5 billion from the federal government in a 1115 waiver that allowed integration and is using some of it to help providers with new IT systems.

ANDREW JOWETT FOR CRAIN’S DETROIT BUSINESS

Nick Lyon, director of the Michigan Department of Health and Human Services, talks about his policy and budget experience Monday during the Crain’s Health Care Leadership Summit at The Henry Hotel in Dearborn.

Michigan integration Earlier Monday, Nick Lyon, director of the Michigan Department of Health and Human Services, gave an opening keynote address to explain how Michigan began its integration process in early 2016 with the concept first proposed in Gov. Rick Snyder’s 2017 budget proposal. Lyon said he saw the now wellknown “Section 298 boilerplate,” which started as a budget carve-in for managed care plans to provide behavioral health services, as a starting point to

discuss how best to deliver and improve delivery of physical and behavioral health. He also said he saw it as a opportunity to find a way to direct more money to the behavioral health system. But Lyon acknowledged what many in the Snyder administration discovered: the strength and passion of the advocates of mental health as they fought strongly against quickly turning over nearly $2.8 billion in funding to the Medicaid HMOs to manage. “The boilerplate was not greeted” favorably by advocates of the current behavioral health system, especially those

who rely on home- and community-based support services, Lyon said. However, under the leadership of Lt. Gov. Brian Calley, the state health department began early in 2016 a Section 298 process that led to 45 meetings with 1,113 people from all sides. He said three pilots and one demonstration project will begin in October 2019 to test the best way to integrate care. “Anything we can do to make the two systems work better will help” the more than 2 million people who use either Medicaid physical health or behavioral health services.

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SPECIAL REPORT: HEALTH CARE LEADERSHIP SUMMIT ‘What did you do today about the SAFETY NET problem?’” FROM PAGE 13

“We have a 37-bed ER at Beaumont Farmington Hills. Today, we have six patients in the ER who have been there in excess of three days waiting for placement and treatment,” Vieder said. Two weeks ago, Beaumont had 16 patients waiting more than 48 hours each because the hospital had no available psychiatric beds or could not find them outside care, he said. McIntyre asked Mark Reinstein, CEO of the Mental Health Association of Michigan, to describe what is missing in the state’s mental health system. He said current efforts by the state to integrate Medicaid physical and behavioral health won’t fix the following six problems: J Insufficient number of psychiatric hospital beds and lack of appropriate lengths of stay to meet clinical demand J An epidemic of people with mental illness lining up in justice systems and jails J A flawed recipient-rights and dispute-resolution system that is stacked against people and families who need help, and has no effective way of holding state contract holders accountable. J Despite federal law, lack of insurance parity or equality for coverage of mental health services; Michigan needs stronger laws J Ongoing retention and turnover problems in direct care support staff because of low pay J Lack of aggressive or effective enforcement in monitoring contracts with service managers by the Michigan Department of Health and Human Services Elizabeth Bauer, a former state education board member who has

ANDREW JOWETT FOR CRAIN’S DETROIT BUSINESS

Wayne County Executive Warren Evans talks about the mental health system during a breakout session last week during the Crain’s Health Care Leadership Summit at The Henry in Dearborn.

been involved in mental health advocacy since 1958, said there are shortages of providers at every level, from direct care workers in homes, to teachers and special educators in schools. “My big thing is that we work on these things in little silos. Education makes a silo, mental health, corrections, licensing and regulatory affairs does it,” she said. “Down there at the person level there is somebody trying to get access to services.” Vieder said more psychiatric providers are needed, along with training for nurses and other specialists involved in psychiatric and sub-

stance abuse care. More psychiatrists are also needed who are willing to treat patients with Medicaid, Medicare or commercial insurance because of low pay, Vieder said. McIntyre, a psychiatrist, said there are enough licensed psychiatrists, but Michigan’s reimbursement to psychiatrists is fourth-lowest in the nation. “Go south (Ohio) and get paid 60 percent more,” she said.

Filling the cracks Evans said there needs to be better coordination with private or qua-

INTEGRATE FROM PAGE 12

Brown also asked what else could be done in the future to improve the system. Kathleen Kovach, COO of Oakland Community Health Network, said physical and mental health providers need to co-locate services together more to ease care coordination and patient convenience. “Choice needs to happen. We need more federally qualified health centers (like Oakland Health Integrated Network)” that offer wide ranges of services.

Improvements, but ... Kendziorski said there have been huge gains over the years for people with disabilities and serious mental health conditions. “We have a community-based model now,” he said, adding: “We are threatened by the movement to standardization across the state.” Russell said funding has been cut to mental health organizations, challenging everyone in the system. “In spite of the differences, community mental health takes care of the consumers they have. Sometimes we have to be creative” to get by. Kovach said what works well in the behavioral health system today is that it is grounded firmly in civil rights and the philosophy of person-centered planning. “There is always room for improve-

ANDREW JOWETT FOR CRAIN’S DETROIT BUSINESS

Kathleen Kovach, COO of Oakland Community Health Network, said physical and mental health providers need to co-locate services together more to ease care coordination and patient convenience.

ment,” said Kovach, adding: “(The state) needs to put more money into (health) information exchange. We need real time information instead of claims data. ... If we coordinate care, what are the savings? We can improve more by sharing data.”

How to coordinate, pay for physical and behavioral health Mark Lezotte, an attorney with Butzel Long in Detroit, quizzed four panelists on how they would fix the system by coordinating physical and behavioral health and how those

services would be reimbursed. Willie Brooks Jr., CEO of Detroit Wayne Mental Health Authority, said Medicaid health plans and mental health providers could coordinate care well if they worked together. But he questioned whether HMOs would accept financial risks for sicker patients as behavioral health providers now do. “Look at the service level itself, the risk factors. HMOs do well with healthy people, less well with sicker people,” Brooks said. “We are risk-seekers in mental health. We look for people to help. Both entities can do well if they manage it well.”

si-government organizations. He said Wayne County is in the early stages of working on a possible solution to coordinate activities between mental health agencies and criminal courts with the Detroit Wayne County Mental Health Authority. “We are trying to coordinate, but we are terribly underfunded. We just figure out how to budget year to year,” Evans said. “We are not budgeting to solve problems or make people better. I can’t tell you how much money we are spending to warehouse people. It’s a tremendous problem in dollars and cents, also when you go home and say, Dennis Mouras, director of Medicaid in Michigan with United Healthcare, challenged Brooks’ suggestion that Medicaid HMOs are afraid of taking care of sick people. “We are not risk-averse. We manage risk in a broad way,” said Mouras, adding that behavioral health services must be provided with compassion. “We are seeing most of savings in physical health side (in United’s experience in other states it operates and integrates care). The savings go to the behavioral health side.” Mouras said this is one reason — saving money on the physical health side and transferring over to mental health services — why he sees integration as a step forward for Michigan. “We only do mild and moderate (behavioral health) now,” he said. “We want to do more in the future.” Dohn Hoyle, director of public policy with The ARC of Michigan, said he has large concerns about the direction Michigan is headed with integration. A large number of Republicans in the Michigan Legislature want to turn over about $11.5 billion in Medicaid funds to the health plans to manage the entire system. While it is unclear what might happen after the Nov. 6 election, the state’s Health and Human Services Department has selected Medicaid HMOs to manage three regional pilot programs that will test integration starting in October 2019. “It is not where

In health care, Vieder said, insurance companies, Medicaid and Medicare should expand telemedicine service payments for psychiatric care. “Telehealth psychiatry is a tool, one solution, that we can’t deploy in an effective way,” he said. “It can help make a dent in (the problem), but not fix everything.” Medicare allows some telehealth services, but it is restrictive and limited mostly to people who live in rural areas and only after a face-toface meeting, Vieder said. “Gov. (Rick) Snyder in 2012 signed a bill that paved the way for insurance to pay for telemedicine services, but it doesn’t apply for Medicare or Medicaid, and many people are covered under those plans,” he said. Bauer said more funding should be allocated to mental health courts and jail diversion programs. “I sit on the mental health court in Oak Park. Persons coming before the court can be in diversion programs, but there are no psychiatrists to see them. They just sit in jail,” Bauer said. “We have an effective court in Wayne County, a tiny one in Oak Park. Ingham County has a good one, but they are limited and only serve those with misdemeanors.” Reinstein said the state’s mental health diversion council, which helps people avoid incarceration and seek treatment, could be made more effective to reduce problems. “The council gives each community mental health (agency) $10,000” per year, he said. “This means if you get one non-Medicaid case, that is it. You are out of money.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene the money goes that it is important. It is what the person needs and wants, versus where the system wants them to go,” Hoyle said. “Person-centered planning is more than person-centered care. I don’t see this as a change going in the direction of the person.” Isabel Jones, manager of integration with the Washington State Health Authority, said the developmental disability population is already taken care of by Medicaid health plans. But because Washington has a federal 1115 waiver, the state has carved out home and community-based services for the developmental disabled population from managed care. Hoyle said what state officials and Medicaid health plans need to understand is “people with disabilities have an aversion to the medical model.” Unlike most physical and medical health care, with the exception of hospice and palliative care, doctors and nurses are trained to treat people and watch for improvements in health. “You have to understand the person may not get better. Mental illness will probably stay the same,” Hoyle said. “The medical necessity is they live in one place and receive care where they want it. In managed care, the HMO decides. This is foreign on the other side.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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CALENDAR TUESDAY, OCT. 23 Robots Won’t Take Your Job, But They Will Change It. 11:30 a.m.-1:30 p.m. 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

THURSDAY, OCT. 25 Wayne County Business Resource Network Roundtable. 8:30-11 a.m. Wayne County. Information 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.

UPCOMING EVENTS 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,

Guest speaker: Deanna Hatmaker. JVS, Southfield. Free; registration required. Contact: Angela Bevak, phone: (248) 233-4482; email: abevak@jvsdet.org

Hendrickson

Loepp

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 Barriers — 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:

Poppe

Taubman

Courtney Masiarczyk, phone: (313) 259-5400; email: courtneym@businessleadersformichigan.com; website: businessleadersformichigan. com Automation Alley’s Integr8 Conference. 7 a.m.- 4 p.m. Nov. 14. Program will discuss the smart technologies shaping the future, focusing on the industrial internet of things, robotics, artificial intelligence, cloud computing, cybersecurity, big data, advanced materials/additive manufacturing and modeling, simulation, visualization and immersion. Renaissance Center. $449 member; $599 nonmember. Email: info@automationalley.com; phone: (248) 4573200. Building a Culture That Drives Employee Engagement and Commitment. 7:30-8:45 a.m. Nov. 15. JVS Business Connections. Learn how employers promote a culture that thrives and drives commitment.

Women, Empowered. 11:30 a.m.-1 p.m. Nov. 16. Auburn Hills Chamber of Commerce. Topics include: how local leaders navigated challenges, how they balance it all and what they learned to let go. Speakers: Ana Almeida, customer business unit vice president for Ford, Pescovitz GM and FCA, Faurecia; Ora Pescovitz, president, Oakland University; Ursula Scroggs, president and director, DKSS. Marriott Auburn Hills, Pontiac. $45 members; $55 nonmembers. Table of 8: $330 for members; $415 for nonmembers. Contact: Taylor Reyes, email: treyes@auburnhillschamber. com; phone: (248) 853-7862. 2018-2019 State of the Region. 11 a.m.-1 p.m. Dec. 4. Detroit Regional Chamber. The chamber will release its annual State of the Region report, providing an economic overview of the 11-county region and benchmarks against peer regions. Learn

where the region stands in per capita income growth, unemployment, median home values, talent, innovation and foreign direct investment. Ford Field. $65 members; $120 nonmembers. After Nov. 27, $75 members; $130 nonmembers. Contact: Jordan Yagiela, phone: (313) 596-0384; email: jyagiela@detroitchamber.com Toyota In Transition: Maintaining Momentum in the Age of Mobility. 11:30 a.m.1:30 p.m. Dec. 5. Detroit Economic Club. Jim Lentz, CEO, ToyLentz ota Motor North America, will discuss how Toyota is managing the balance of present and promise. Moderator: John McElroy of Autoline Detroit. Westin Book Cadillac. $45 members, $55 guests of members. Website: econclub.org To submit calendar items visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” from the drop-down menu that will appear. Fill out the submission form, then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events.

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

Advertising Section

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

FINANCIAL SERVICES

NONPROFITS

RSM US LLP

Amherst Partners

Katie Chrz has joined RSM’s Detroit practice as a lead tax senior manager, bringing 15 years of experience of both serving clients in the Big 4 public accounting space as well as and working in the automotive industry. She has focused on federal tax compliance and consulting matters for corporations and partnerships. Katie also has extensive experience in the area of accounting for income taxes, serving companies in both the private and public sectors.

Amherst Partners is pleased to announce that Bruce Goldstein has joined the firm as a Managing Director in the Restructuring Advisory practice. With more than 35 years of experience across a range of industries, he has previously served as Interim CEO, COO, and Chief Restructuring Officer for numerous companies as well as a private equity Chief Operating Officer and Chief Financial Officer. Prior to joining Amherst, Mr. Goldstein was a Managing Director at MorrisAnderson & Associates in Chicago.

Michigan Green Industry Association (MGIA) The Michigan Society of Association Executives (MSAE) inducted Diane Banks, Executive Director of the Michigan Green Industry Association (MGIA), into the Michigan Association Hall of Fame at its annual Diamond Awards ceremony in Novi, MI. Banks, a White Lake resident was one of three association executives to receive top honors at the 2018 statewide ceremony. The award honors individuals who exemplify the best in association management and those who have excelled in the profession.

ACCOUNTING

INSURANCE

NONPROFITS

RSM US LLP

Sterling Insurance Group

Playworks Michigan

Jenny Blair has joined the Detroit office as a manager of the growing international tax team. With more than 10 years of accounting experience, Jenny provides international compliance services for large complex multinational corporations and assists in determining the compliance requirements related to acquisitions of businesses with multiple entities in different jurisdictions. In addition, Jenny provides individual compliance for companies with inbound and outbound expatriate employees.

Sterling Insurance Group - one of the fastest-growing insurance and employee benefits brokerages in the country - announced and welcomed Brad Richards recently as the Employee Benefits Production Lead. Richards will be responsible for the leadership of the Employee Benefits Sales Team, development of new business opportunities and the creation of customized employee benefits solutions to fit client needs. Richards brings with him over 20 years in employee benefits experience.

Playworks today announced the appointment of Alexandra Gardner as the organization’s first Development Director in the Michigan Region. In this new role, Gardner will be charged with raising over $1,000,000 and diversifying the Playworks portfolio to include more support from corporations and individuals. This position is generously supported by the Michigan Health Endowment Fund through a Nutrition & Healthy Lifestyles grant awarded in April, 2018.

ACCOUNTING

REAL ESTATE

RSM US LLP

REDICO

Brendan Murphy has joined RSM’s Transaction Advisory Services practice, responsible for financial due diligence execution. He has focused on financial statement and operational audit and advisory services for large public and private technology, healthcare, financial services, automotive, and manufacturing entities. With prior roles at Ernst & Young and Ally Financial Inc., he has extensive experience with SEC rules and regulations, PCAOB and AICPA standards, healthcare regulations and IFRS standards.

Jennifer Roth has joined REDICO as vice president of development, bringing more than 20 years of development experience to the organization. She manages the company’s multifamily development opportunities, as well as renovation projects for American House Senior Living Communities, a REDICO affiliated company. Prior to joining REDICO, she served in development leadership roles with Village Green and BKV Group Architects. Her expertise spans multifamily, commercial and mixed-use asset classes.

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

DEALS & DETAILS NAME CHANGES J Service First Logistics, Auburn Hills, a supply chain management and logistics firm, has changed its name to SFL Companies. Website: sflcompanies.com J Lambert, Edwards & Associates, Detroit, a public relations firm, has changed its name to Lambert & Co. Also, the North American International Auto Show has expanded its partnership with Lambert & Co. to manage media relations and provide social media strategy and support for its 2019 and 2020 events. Websites: lambert.com, naias.com

NEW SERVICES J Wayne County Community College District, Ted Scott Campus, Belleville, is beginning a Licensed Practical Nurse program. The first cohort will begin in January 2019 and the college is currently accepting applications for registration online and at its six campus locations. The LPN program will admit a maximum 24 students twice a year. Website: wcccd.edu J Ross Mortgage Corp., Troy, a residential mortgage lender, has added four loan options, a one-time close construction loan for people building a home, a doctor loan for physicians with high student loan debt, a manufactured home loan and a VA renovation loan for veterans. Phone: (877) 775-7088. Website: rossmortgage.com J ZipLogix, Fraser, a real estate technology company, released zipForm Record-Connect, software that offers more than 30 data fields and auto-populates information from a national public records database directly into zipForm documents. Website: ziplogix.com J Fraza, Canton Township, a provider of material handling equipment, has launched Vitan Equipment, a branch offering new and used equipment, parts and service, training, warehouse and industrial supplies, at 42866 Merrill Road, Sterling Heights, phone: (855) 270-0853, and 3480 Broadmoor Ave. SE, Suite 107, Grand Rapids, phone: (855) 2700853. Websites: vitanequipment. com, frazagroup.com J Detroit-based Ilitch Holdings Inc.’s Olympia Entertainment event venues have been certified by the National Weather Service as “StormReady.” The sites include Little Caesars Arena, Comerica Park, DTE Energy Music Theatre, Meadow Brook Amphitheatre at Oakland University, the Fox Theatre and the Michigan Lottery Amphitheatre at Freedom Hill. To be recognized as StormReady, a site must: establish a 24-hour warning point and emergency operations center; have more than one method to receive severe weather forecasts and warnings and to alert the public; create a system that monitors local weather conditions; promote the importance of public readiness through multiple outreach efforts and develop a formal hazardous weather plan, which includes training severe weather spotters and holding emergency exercises. Website: olympiaentertainment.com

Submit Deals & Details items to cdbdepartments@crain.com

SPOTLIGHT Haven hires new CEO

Pontiac sexual assault and domestic violence shelter Haven has appointed a new leader after firing its president and CEO Amna Osman in the spring. A i m e e Nimeh, 40, formerly executive director of Nimeh Susan G. Komen Greater Detroit, was hired to fill the job effective last Monday, according to a news release. In her new role, Nimeh will lead the organization that helps more than 30,000 people each year. She will oversee strategy of the nonprofit as well as its services, which include an emergency shelter, a crisis line, counseling, advocacy, forensic exams and educational programming. Nimeh had led Southfield-based Susan G. Komen and its half-dozen employees for just 10 months..

Community Foundation's Ferriby to join Clark Hill

Robin Ferriby, the Community Foundation for Southeast Michigan’s longtime expert on planned giving, is leaving the nonprofit for a similar role at Clark Hill PLC. Ferriby, 57, who has served as vice presiFerriby dent of philanthropic services for the Community Foundation for 19 years and as general counsel since March, will join Clark Hill’s Birmingham office Nov. 5 as senior counsel in its tax and estate planning unit. The position is newly created and will pair Ferriby with Clark Hill member Duane Tarnacki, the firm’s tax exempt and charitable organizations leader. At the Community Foundation, Ferriby has advised families, businesses and foundations on complex gift and grant arrangements, including gifts of closely held business interests and intellectual property.

Northwood University president to retire

Northwood University’s president and chief executive officer is retiring after 12 years at the helm. Keith Pretty, 67, announced last week plans to retire from the private M i d land-based university June Pretty 30, according to a news release from the school. As Northwood’s third president, Pretty’s tenure was marked by expansion of the campus at its home base, as well as philanthropic and scholarship growth.

October 22, 2018

C R A I N ’ S D E T R O I TCRAIN B U’SS DI ETROIT N E SB SUSINESS // O C T O B E R 2 2 , 2 0 1 8

Park Avenue buyer led by developer Kiezi By Kirk Pinho

kpinho@crain.com

A Troy-based developer and his investors are in the process of purchasing the Park Avenue House downtown and turning it into an unspecified hotel. Mario Kiezi confirmed that he is in the process of buying the 13-story building at 2305 Park Ave. at Montcalm Street, a week after a Detroit Free Press report first revealed residents of the 1925 building have been given 30day eviction notices earlier this month. Bill Nowling, a partner at Detroit-based public relations firm Lambert & Co. and a spokesman for Kiezi, said the sale of the building for an undisclosed price isn’t expected to occur until the first quarter next year. “The intention is to return that property to being a hotel,” Nowling said Thursday afternoon. “We are not commenting on what flag will be there yet.” Nowling said the eviction notices for residents — many of whom are low-income — were issued by the property’s seller. “None of this talk of moving residents out in 30 days was any condition of any offer they put on the table,” Nowling said. “That was the seller’s sole action.” He said Kiezi and the investors want the seller, the Harringtons, to “back away from that notice” and give residents more time, probably until the

jgreene@crain.com

McLaren Health Care, a 14-hospital system based in Grand Blanc, will begin providing a range of retail clinic, urgent care and primary care services in 2019 at drugstores in Michigan owned by Deerfield, Ill.-based Walgreens, the companies announced last week. McLaren will manage and staff the locations, officials said. Other terms of the multiyear contract were not disclosed. Walgreens owns 9,560 drugstores in the U.S., including 233 stores in Michigan. It has 13 similar arrangements with health systems for its drugstores in Illinois, Wisconsin, Florida and several western states. McLaren has also agreed to sell its pharmacy business and prescription files to Walgreens (NASDAQ: WBA) for an unspecified price. McLaren operates 14 retail pharmacies, about 12 of which are located inside its hospitals. Walgreens will acquire and consolidate locations to about three sites that will be rebranded as Walgreens pharmacies by early January. “As the cost of health care continues to rise, patients’ expectations are evolving around better value, convenience and simplicity, and a desire for instant, high-quality care,” Pat Carroll, M.D., Walgreens’ chief medical officer and group vice president for health care services and clinical programs, said in a statement. “Our collaboration with McLaren demonstrates our ongoing commitment to create neighborhood health destinations that provide retail health services and patient care across the communities we serve.” McLaren’s employees, pharmacy patients and McLaren Health Plan

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Need to know

J Troy-based developer plans to turn Park Avenue House into hotel J Residents were given 30-day eviction notices; buyer says seller issued the notices J Building listed for sale for $15 million; sale closing slated to happen next year

end of June 2019. They met with Mayor Mike Duggan last week, who asked for

more time for the residents, and the developer agreed, Nowling said. “We don’t want the residents to go anywhere, and we don’t think the residents need to go anywhere right now,” he said. The Free Press also reported that the city is aiming to use $400,000, which includes $350,000 for the nonprofit United Community Housing Coalition, to help vacate residents of the 180-room building.

Troy-based L. Mason Capitani Inc. has the listing for the property, which is being marketed for sale for $15 million, or $142.80 per square foot for the 105,000-square-foot building. Messages sent last week to the listing broker were not returned. Crain’s left a voice mail for property manager Sean Harrington.

Need to know

members will be able to access prescription services at Walgreens drugstores. “Consumers increasingly seek value and convenience when choosing a health care setting, and fewer — particularly younger adults — have a relationship with a primary care physician,” Philip Incarnati, McLaren’s president and CEO, said in a statement. “Walgreens has a reputation for delivering outstanding service

and customer experience, and we are proud to work with them to create these new clinics and give Michigan residents more options for quality, affordable care Philip Incarnati: when and where Consumers seek they need it.” convenience. Carroll said Walgreens chose McLaren over other systems in Michigan because it shares similar values and operates in many markets in Michigan. "McLaren will decide whether they want a retail health clinic, urgent care or primary care practice locations," said Carroll, noting that the two companies are early in the process of se-

lecting types of services to offer at Walgreens. Kevin Tompkins, McLaren's senior vice president of marketing and planning, said the company and Walgreens will develop a plan over the next three months to decide on the clinic and urgent care locations. He said a number of employees will be hired, depending on the type of health center. Carroll said a retail clinic, which offers about 30 different diagnoses, would be located in a Walgreens store and take up about 300 square feet. On the other hand, an urgent care center could be as large as 2,500 square feet and offer medical and diagnostic services. Or a McLaren primary care group could locate in office space close to a Walgreens drugstore, he said.

STATEMENT REQUIRED BY THE ACT OF AUGUST 24, 1912, AS AMENDED BY THE ACTS OF MARCH 3, 1933, JULY 2, 1946 AND JUNE 11, 1960 (74 STAT. 208) SHOWING THE OWNERSHIP, MANAGEMENT AND CIRCULATION OF: Crain’s Detroit Business, Publication No. 743370, published weekly at Detroit, Michigan, for September 30, 2018. Numbre of issues published annually, 51. Annual subscription price $169.00 7. Complete mailing address of known office of publication: Crain Communications Inc., 1155 Gratiot Avenue, Detroit, Wayne County, MI 48207-2997. 8. Complete mailing address of the headquarters or general business office of the publisher: Crain Communications, Inc., 1155 Gratiot Avenue, Detroit, Wayne County, MI 48207-2997. 9. Full names and complete mailing address of Publisher, Editor, and Managing Editor: Publisher: Mary Kramer, Crain Communications Inc.,1155 Gratiot Avenue, Detroit, MI 48207-2997. Editor: (None) Managing Editor: Michael Lee, Crain Communications Inc., 1155 Gratiot Avenue, Detroit, MI 48207-2997. 10. Owner (Do not leave blank. If the publication is owned by a corporation, give the name and address of the corporation immediately followed by the names and addresses of all stock holders owning or holding 1 percent or more of the total amount of stock. If not owned by a corporation give the names

and addresses of the individual owners. If owned by a partnership or other unincorporated firm, give its name and address as well as those of each individual owner. If the publication is published by a nonprofit organization, give its name and address.) Crain Communications Inc., 1155 Gratiot Avenue Detroit, MI 48207-2997. K.E. Crain, 1155 Gratiot Avenue Detroit, MI 48207-2997. 11. Known bondholders, mortgagees, and other security holders owning or holding 1 percent or more of total amount of bonds, mortgages or other securities: None. 15. Average number of copies of each issue of this publication sold or distributed through the mails or otherwise during the 12 months preceding the date shown above was: Total number of copies: 22,196; Mailed In-County Paid Subscriptions Stated on PS Form 3541: 0; Paid distribution outside the mails including sales through dealers, carriers, street vendors and counter sales and other paid distribution outside USPS: 10; Mailed outside county paid subscriptions stated on PS Form 3541: 19,429; Paid distribtuion by other classes of mail through the USPS: 4; total paid distribution: 19,443; Free or nominal rate outside-county copies included on PS Form 3541: 1,720; Free or Nominal Rate in-County Copies included on PS Form 3541: 0; Free or nominal rate distribution outside

the mail: 192; Free or nominal rate copies mailed at other clases through the USPS: 0; Total free or nominal rate distribution: 1,912; total distribution: 21,355; Copies not distributed: 841; Total: 22,196, Percent Paid: 91.05%. Actual number of single issue published nearest to filing date (Sept. 24, 2018); Total number of copies: 20,392; Mailed In-County Paid Subscriptions Stated on PS Form 3541: 0; Paid distribution outside the mails including sales through dealers, carriers, street vendors, counter sales and other paid distribution outside USPS: 8; Mailed outside-county paid subscriptions stated on PS Form 3541: 18,900; Paid distribution by other clsses of mail through the USPS: 3; Total paid distribution: 18,911; Free or Nominal Rate in-County Copies included on PS Form 3541: 0; free or nominal rate outside-county copies included on PS Form 3541: 355; Free or nominal rate copies mailed at other classes through the USPS: 0; Free or nominal rate distribution outside the mail: 71; Total free or nominal rate distribution: 426; Total distribution: 19,337; Copies not distributed: 1,055; Total: 20,392; Percent Paid: 97.80%. 17. Publication of Statement of Ownership, if the publication is a general publication, publication of this statement is required. Will be printed in the October 22, 2018 issue of this publication. 18. I certify that all information on this form is true and correct: Mary Kramer. Date: 9-25-2018.

JJGrand Blanc-based hospital system to offer services in 2019 JJMcLaren agrees to sell pharmacy business and prescription files to Walgreens JJClinic and urgent care locations to be decided over next three months

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McLaren to partner with Walgreens on clinics By Jay Greene

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Burns: Tell us the dates and other details. Diefenbach: Festival of Trees 2018 takes place November 18- 25. Our Black Tie Preview Gala is on Saturday, November 17. Tickets are available at fot.org. Burns: The public is actually able to buy the trees? Diefenbach: Absolutely. There is a multitude of variety, something for everyone’s taste. In addition to the trees, we have a festive gift shop. We have tabletop trees, wreaths and centerpieces. There are kids activities too. Lego comes in and creates a huge city. The Detroit Historical Museum brings in its train set. There is something for everyone. General admission is $5 for adults, $3 for kids and under two is free.

Burns: What does being a candidate for the Senate mean to you? James: I understand and recognize the tremendous obligation that we have to serve in our community. My father and mother came from Mississippi in a different time. My father was born in the Jim Crow South in 1941. He lived across the street from Mississippi State University and couldn’t go there because he was black. He refused to accept dependency as his destiny, he refused to be a victim. He fought in Vietnam honorably. He came to Michigan and worked for Chrysler before starting a trucking company with one truck, one trailer and no excuses. He started the company from nothing and grew it into something that he was able to pass on to his sons. I will continue that legacy by being a mentor and leader. We’re going to break the glass ceiling for opportunity, regardless of race. It’s such a tremendous blessing to be in this position. We need to use our blessing to be a blessing to others.

Smith: One program we’re involved in is the Horsey House Call with Camp Casey. They actually bring a horse to the child’s home because a lot of these kids are not strong enough to go away to camp. The family and friends are at the home when there’s a rap at the door, the child answers it and it’s a horse! The kids ride the horse and have a lot of fun. It’s innovative and creative and lets the kid just be a kid for a day. It’s a great program. Burns: If a listener is considering Northwestern Mutual as a career path, what advice do you have? Smith: We’re a career that allows people to be in business for themselves but not by themselves. We’re very supportive internally. We like to see people succeed. So if somebody’s interested, they can contact us.

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 2 2 , 2 0 1 8

GUITARS FROM PAGE 1

Little did Currie know when he trekked east, the history books would come to life and he’d come face to face with Hackley’s legacy. A chance meeting with Brian Mooney, president of Detroit-based Integrity Building Group, led to a business partnership where Hackley’s sunken logs from the depths of Muskegon Lake will soon become some of Currie’s priciest and rarest guitars yet. The use of Michigan pine from a bygone era plays into Echopark’s growth plans to expand revenue 10-fold in the next five years. “My instruments are known for being at the top of the food chain, but these are going to be another level,” Currie said. “Once the wood is gone, it’s gone. I might be able to make 100 pieces ... maybe.” Currie declined to reveal how much the guitars made from Hackley’s lumber will cost, but it’s reasonable to expect them to cost more than his most expensive offerings now — his Esperanto ES Recording electric guitar retails for $14,000 before upgrades. Echopark is projected to reach $240,000 in revenue this year, up 30 percent since arriving in Detroit but lower than its peak a few years ago of nearly half a million dollars. Guitars take upward of eight months to a year to make, each one meticulously crafted by Currie and his three employees and a handful of aging wood shop tools. His guitars are used by rock stars Joe Perry of Aerosmith; Josh Homme of Queens of the Stone Age; Dean Fertita, a Royal Oak native, of Queens of the Stone Age and The Dead Weather; Jakob Dylan of The Wallflowers; and actor Johnny Depp, who also plays in a band with Perry called Hollywood Vampires; among others. Detroit bluesman Larry McCray said price tag doesn’t dictate quality. “The quality of the instrument is what makes it a high-end guitar,” McCray said in an email to Crain’s. “Echopark guitars, in particular, use very high-quality woods and components ... the third ingredient is the knowledge and know-how to bring that instrument to its highest form.”

A passion for wood Currie grew up in East Los Angeles, toiling in the rise of racial violence of the 1970s and the influx of drug-related gangs in the 1980s. He began making guitars at 12 and, as a teen, became an apprentice under Leo Fender at his Fullerton, Calif., shop, G&L Musical Instruments. Fender founded the Fender Electric

Gabriel Currie works on a guitar body at his workshop in Detroit.

JESSE GREEN

Mark Wallace: “We try to find young makers, but we haven’t been able to find that next generation yet.”

Instrument Manufacturing Co. in 1946, creating the stalwart solid-body Fender Stratocaster guitar that remains popular today. He sold Fender Electric to CBS in 1965 for $13 million and founded G&L in the late 1970s. Under Fender, Currie learned the careful precision of handmade guitars. Today, he still knocks slabs of wood to hear the resonance of the wood to determine its viability as an instrument. Currie can wax poetic about tonewoods like acacia, swamp ash, Brazilian rosewood, mahogany and original growth pine, the same materials envied by guitar-making legends 50-plus years ago — names immortalized in the headstocks of guitars played by bluesmen, rock stars and novices alike.

“Everyone aspires for the guitars of the ’40s, ’50s and ’60s,” Currie said. “What makes them so special? Why do they sound so good? Machines can make guitars, but they can’t fake the process. They can’t find the wood. The tonal qualities, that comes from the dirt, from the minerals and the oxygen it’s grown in.” Handmade guitar makers are quasi-dendrologists and speak of wood characteristics like steelmakers speak of tensile strength and annealing. Mark Wallace, founder of Corktown’s Wallace Detroit Guitars LLC and president and CEO of the Detroit RiverFront Conservancy, began making guitars from wood reclaimed from Detroit’s historic buildings in 2014 and shares Currie’s passion for wood. He sources his guitar materials from Detroit-based Architectural Salvage Warehouse, a nonprofit that preserves and remodels historic properties and provides training and employment to residents. Wallace takes waste materials from places like the former Cadillac Stamping factory on Connor Street and turns them into $3,000 electric guitars. “The pine grown in modern forests is grown fast and creates fat growth rings and soft wood,” he said. “Old wood in Detroit grew slow, slowing the cycle. There are hundreds of tiny growth rings, each representing one summer and one winter season. That tight growth makes harder wood, and you’re able to get a totally different performance from that pine than what comes out of a lumber operation today.” Wallace has sold roughly 170 guitars since 2014 and plans to release a bass

COMMUTER FROM PAGE 3

Bedrock’s partnerships with May Mobility and Chariot are still in the early stages. About 200 Quicken Loans workers are riding May Mobility’s five-seat semi-autonomous shuttles on a daily basis between office buildings in Campus Martius and the Bricktown parking garage at Beaubien and East Fort streets. That’s less than half of the 500 employees that Bedrock initially said would use the service when it was announced in June. May Mobility’s shuttles are manned by a “fleet attendant” who can grab a small steering column at any time to adjust the vehicle’s programmed route in case of obstructions in the road.

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

Kevin Bopp, vice president of parking and mobility for Bedrock LLC, discusses the strategies Bedrock is deploying to cut down on downtown Detroit congestion inside a May Mobility semi-autonomous shuttle as it rolls along a 1-mile loop route in the central business district.

ROBERT BRUCE PHOTOGRAPHY

guitar in late October. The company employs about seven, he said. The company generated revenue of $100,000 in 2017.

Detroit: City of makers Currie is sourcing the 300-year old Hackley wood from Integrity Building Group in Detroit, thanks to a new friendship with Mooney. Mooney found the wood from a newspaper ad while vacationing in West Michigan. “I’m always looking for unique wood to work with for commercial restoration,” he said. “The man selling it was burning it to get rid of it. He had no idea of the intrinsic value; how it’s been preserved and hardened at the bottom of the lake. I bought all 800 logs.” After shipping it back to Detroit nearly three years ago, Mooney held on to the stockpile. But after a mutual friend introduced him to Currie earlier this year, Mooney knew the old-growth pine would be perfect for guitars. “Not only is it unique and rare, it has a resonance you can’t get in other types of lumber,” Mooney said. “The way that Gabriel does his craft, limits his production. That’s what this wood was meant for.” Mooney and Currie are business partners on Hackley’s lumber. A formal agreement hasn’t been drafted but Mooney said the sales will likely be split 60-40 in favor of Currie. Echopark also recently launched its DT Series guitars, which are made from less expensive woods and retail between $2,500 and $3,500. Currie said the goal is to make a more accessible The six 14-passenger Chariot vans currently in operation have the capacity to transport 84 workers to and from work each day. If there’s demand, Bopp envisions the service being offered to other downtown workers. And Quicken Loans recently bought all of its employees annual QLine passes — at an undisclosed discount — to encourage them to park in Midtown or New Center and ride the streetcar into the central business district. The goal, Bopp said, “is to create optionality so that people have an experience that’s customized to their preferences — and it’s not something they’re locked into each day.” “You could drive to work a couple days a week, you could carpool one day, you could use something like Chariot or the buses," Bopp said. The goal is to reduce the need for

Echopark guitar without tarnishing its established brand and quality. The guitar maker plans to make no more than 200 DT Series guitars annually. “I want to offer both sides of the spectrum, but my high-ends can’t be devalued by my low-ends, and that’s why I’m limiting production,” Currie said. “I’m really hoping instead of caviar, I can offer you trout. I think I can.” Currie expects the DT Series to help fund an expansion of his operations, so Echopark’s roots can grow in the city and make a larger impact. Wallace sees the same. He’s hoping expanding into a bass guitar series will foster growth and attract more talent to the region. “We try to find young makers, but we haven’t been able to find that next generation yet,” Wallace said. “We’d love to bring in some young bucks and really get expanding the operation.” Both Wallace and Currie are capitalizing on Detroit’s resurgence and its reputation as a city of makers, a city established as manufacturing epicenter in an era when where a product comes from can be more important than its quality. But both also think fostering in a new era of craftsmanship for guitars will boost the city’s worth as an instrument builder. “There are certain people in Detroit making Detroit products because it has the Detroit name on it,” Wallace said. “The products I’m interested in care about Detroit and making it better. “Gabriel and I could certainly make guitars cheaper than we do today but we want them to be special. It’s the difference between a new sedan and the car your grandpa has been wrenching on in the garage for years.” Currie is ingrained in the community, already hosting a benefit concert last year for his new nonprofit, the Old Redford Community Arts Foundation. Currie recruited old friend and Echopark guitar player Jackson Browne to play the show at the Redford Theater last August. Echopark will host another concert at the historic 1,500-seat venue, only a few blocks from its shop, in February, this time to celebrate Detroit’s blues history. Blues musicians McCray and Harmonica Shah will headline the event. Currie is currently filming a documentary on turning Hackley’s lumber into Echopark guitars and hopes to debut the film at the event. Currie said the Old Redford nonprofit will look to open an arts education program in the area to expand its mission of teaching music and arts to youth in Northwest Detroit. “This is an environment of makers,” Currie said. “I’m an American. I’m in Detroit. Of all the f------ places in the U.S., how is there no one here doing what we’re doing? The music world deserves this. Detroit deserves this. Hell, I deserve this.” Bedrock to build more and more parking garages in downtown Detroit and control demand, which has fueled noticeable increases in parking prices in the past years. “Long term, it’s really best for the city that everyone doesn’t rely on driving and parking,” Bopp said. For as much that has changed in the past year, Bopp said, May Mobility’s shuttles could expand to other routes, linking downtown workers to nearby apartment buildings or even operating in Detroit neighborhoods where public transit options are limited to nonexistent. “You shouldn’t be surprised that within the next year these vehicles are deployed in very different ways,” Bopp said. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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

TRAINING FROM PAGE 1

In the push by state policymakers and employers to steer more young people into once-stigmatized skilled trades, the limitations of the existing infrastructure for training workers combined with a fractured network of apprenticeships and training programs has surfaced as a new clog in the talent pipeline. “The space you need to do what we’re doing and the amount of noise we’re making, we need to be tucked away in Howell,” said Dan McKernan, spokesman for the Operating Engineers Local 324. “It’s not just something you drop in a city block.” The shortage of skilled-trades workers has exposed how few training facilities there are in Michigan after decades of high schools closing down career and technical education programs. “I think we’re continuing to pay ramifications for that,” said Jim Sawyer, president of Macomb Community College, which offers skilled-trades programs in building construction and welding.

‘It shouldn’t be this complicated’ The state also lacks any kind of centralized, easy-to-navigate system for actually breaking into the trades, much less finding work-as-you-learn apprenticeships offered by unions like the Operating Engineers, said Roger Curtis, who recently left Gov. Rick Snyder’s administration after two years as the state’s talent and economic development director. “Getting into the apprenticeship programs in the state varies wildly in the unions, from super easy to really incredibly hard to navigate,” said

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

Operating Engineers Local 324 has about 400 current apprentices who are working for construction and infrastructure companies while learning the trade at the union’s sprawling 555-acre training facility in Howell.

Curtis, who recently joined Consumers Energy Co. as the utility’s vice president of public affairs. “It’s incredibly hard to navigate those waters right now.” Curtis said he realized this was a problem last year while speaking to a group of high school counselors about advising their students on career opportunities in skilled trades. The group of educators asked for more information on how students could get into apprenticeships and training programs to become electricians, plumbers and computer-assisted machinists, Curtis said. Curtis said he and a state Department of Education official produced a list of five websites for the high school counselors to mine for information to guide their students’ career choices. “It just struck me: How can you ask a counselor who already averages

729 students per counselor and has no time ... and now we’re going to tell them to go to five different websites to get the information?” Curtis said. “I think there is a need to streamline this.” Union contractors and labor unions operate a little-known organization called Management and Unions Serving Together, or MUST, and a website that is supposed to serve as a recruiting tool. “Anyone outside of our group would have no idea what that acronym stands for,” said Tom Ward, apprenticeship coordinator for Detroit Metropolitan Masonry Local 2’s training center in Warren for bricklayers and masons. “You (tell a potential recruit), ‘Go to the MUST website to learn about the building trades,’ and they’re going to look at you and say, ‘What does that mean?’” Colleges have a common applica-

HOSPITAL

Other services growing

FROM PAGE 3

One of the first steps was to separate the hospital from Michigan Surgery Specialists, the holding company for the group’s other entities. Now MMS is a separate professional corporation entity with its seven clinical offices in Southeast Michigan, and the hospital has been converted from an S-corporation to a limited liability company to give it more flexibility. “The problem with an S-Corp was that for anyone to buy into the system, they had to buy into the owner group, (which was) MSS,” Craig said. “Joining MSS meant that they would have to give up their independence (and tax ID). ... This prohibited us from getting new independent owners. So we split them apart.” Craig said the seven physician owners of MSS each own 5 percent for 35 percent of the hospital and the other 13 physician owners each own 5 percent for the remaining 65 percent. He said more physician investors are being sought.

Financial improvements Because Surgeons Choice is a boutique hospital that specializes in surgery, its four operating rooms are the key to its finances. In 2017, the for-profit hospital generated enough revenue to go into the black for the first time since 2014, earning net income of $131,033 on net patient revenue of $30 million, a 25 percent increase from $23.9 million in 2016, according to Medicare costs re-

tion that high school students can navigate through a smartphone app. There’s not a similar tech-savvy entry point for getting into the skilled trades, Ward said. “This is a challenge of ours, for sure,” Ward said. “It shouldn’t be this complicated.” A simple Google search for “skilled trades near me” — like an 18-yearold high school senior might try — brings up a disparate menu of choices. “It’s very confusing,” said Todd Sachse, founder and CEO of Sachse Construction in Detroit. Sachse thinks the solution to fixing the fractured system is to consolidate skilled trades programs under the roofs of the state’s 28 community colleges, using a well-established educational infrastructure to help recruit and feed the talent pipeline. “If we can concentrate those various skilled trades (at community colleges) … it raises the level of, I’ll call it, social status of those professions,” Sachse said in an interview for the Crain’s “Detroit Rising” podcast. Most community colleges in Michigan already offer a mixture of skilledtrades training programs. But it’s hitand-miss. Oakland Community College, for example, offers a construction management certificate and associate degree, but has no carpentry program. Community colleges could provide “a much more organized and controlled environment” for skilledtrades training and teach prerequisite courses in math that most of the construction professions demand, Sachse said. “I think it’s better for the unions and the trade schools because No. 1, it’s concentrated,” Sachse said. “... These unions should be able to partner with (the colleges) and, in some ways, help fund that training.”

SURGEONS CHOICE MEDICAL CENTER

Surgeons Choice Medical Center in Southfield is unveiling its new name this week.

ports provided by Louisville-based American Hospital Directory. It lost a total of $1.7 million in 2015 and 2016, AHD said. “Focusing on quality as opposed to quantity made a big difference,” Craig said of the revenue increase and net income gain in 2017. Craig said as word-of-mouth spread about the new surgeons, some of whom also practice at Beaumont, Ascension St. John, Henry Ford Health and Trinity hospitals, and the lower costs compared with larger hospitals, surgical volume increased. “That revenue surge (in 2017) allowed us to come out of a huge financial hole, and we are continuing to grow at a strong rate and 2019 is projecting to be a very strong year financially,” he said. Craig and the owners used the additional revenue to pay down debt. Since 2011, more than $6 million in total debt has been paid down to about $980,091

in August. Moreover, total liabilities also declined 67 percent during that period to $4.8 million from $14.5 million. “In today’s rapidly changing health care environment, fiscal responsibility is critical,” he said. “In many hospital systems, the costs of operational inefficiencies and fiscal liabilities are passed on to patients and employers. This is one of the main reasons health care costs have skyrocketed. We decided to do it differently.” Quality and outcomes have steadily improved at Surgeons Choice over the past several years, he said. Of 10 surgical complication measures, the hospital outperformed national averages in eight and equaled the averages in the other two, AHD said. Some of the measures better than national averages include serious blood clots after surgery, bloodstream infection after surgery and serious complications.

Reflecting better business, Craig said the 190-employee hospital has hired many new staffers, averaging about five per month. He said there has been about 80 percent turnover in staff since 2016. “We have completely changed our culture with new staff. We are more concierge for patients and families to make them feel at home,” said Meghann Keliher, the hospital’s marketing manager. Surgeons Choice sits adjacent to a parking lot that is next to Ascension Health-owned Providence Hospital. Several times, Providence or physicians on its medical staff considered purchasing the hospital, but now both co-exist with overlapping orthopedic surgery services that also include hand and elbow, reconstructive and total joint replacement procedures. The new strategy also emphasizes building patient volume at Surgeons Choice’s 26-bed skilled nursing unit, 30-bed medical surgical unit and its 15bed rehabilitation unit. For example, the Oakland Nursing Center, the skilled nursing unit on the hospital’s third floor, has doubled average daily census the past two years from about 10 to 20 patients, bringing in about $75,000 per month in revenue, Craig said. “The nursing unit used to lose money ...” he said. “Many of our nursing home patients are elderly and ill. We want to make sure their stay — and their families’ experience — is unique, caring, and unlike any other nursing facility.” Craig said the hospital has recently

Split by purpose One of the reasons there is a fractured training pipeline is labor unions have built apprenticeship programs over decades in partnership with certain businesses, while community colleges and private, for-profit trade schools have carved out niches for themselves in select markets. And union apprenticeships are limited by design, as both unions and employers tend to be conservative in how many people they train. “We take in what the market can handle and what we can train,” said David Poletis, statewide training director for the Michigan Regional Council of Carpenters, which has seven training centers across the state, including two in Ferndale and Warren. Apprenticeship programs restrict hiring in deference to journeymen and to ensure they’re not overstaffed. “We don’t bring anyone in unless there’s jobs waiting for them,” said Ward, whose union runs a four-year brick and masonry restoration program with a starting wage that jumped from $14.11 to $20.67 per hour in June because of a shortage of new recruits for the physically demanding trade. Union apprenticeships and community colleges as well as private trades schools have different missions and guarantees for apprentices. Unions tout their superiority in linking their training to earn-whileyou-learn jobs. “The community colleges can provide us (apprentices) with better offthe-street training,” Poletis said. “But they can’t provide our on-the-job training.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood contracted with World Class Acute Care, a Southfield-based long-term acute care company, to manage the unit.

Why physicians invest Each of the 20 physician investors and co-owners has purchased shares valued at $50,000 each. They own 100 percent of the hospital, the Oakland Regional Macomb Center, a freestanding surgery center, the Oakland Imaging Center, and the newly opened Surgeons Choice Dearborn Center, which offers electromyography, outpatient physical and occupational therapy. The real estate is owned by a mix of physicians and outside investors, Craig said. Stephanie Prechowski, R.N., the director of surgical services, said surgeons like to practice at the hospital because it has more convenient access and turnaround times. “They can do more procedures because operating room turnaround time is three to five minutes,” she said. “Surgeons wait longer at other hospitals.” Kyle Anderson, M.D., a sports medicine physician, who also practices at Beaumont, St. Joseph Mercy Oakland and the UnaSource Surgery Center, invested in Surgeons Choice two years ago because he wanted more control over his surgeries. “The hospital had reasonable volume, but they had incurred some debt. I was focusing on the potential. The potential (for growth) outweighed whether it was a business risk,” Anderson said. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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

LITERACY FROM PAGE 3

There are some great programs working with kids in kindergarten through eighth grades, Aronson said. They include Beyond Basics, which provides reading, one-on-one tutoring and supplemental programs including writing, art and mentoring, to students from prekindergarten to 12th grade during the school day. The model has proven success in helping students who are several grade levels behind, said Aronson, who chairs the Beyond Basics board. But with a higher price tag, the program is limited in the number of students it can reach. Aronson believes the less costly, national Read 180 model that uses a classroom setting with a group of students, a reading specialist, one or more tutors and customized software can help increase literacy rates and reach larger groups of students. The Read 180 pilots at Ferndale and Hazel Park high schools pair a reading specialist and tutor with up to 20 students each hour in the two Oakland County districts. With customized lessons based on each student’s reading level and progress, the program is already showing results, Aronson said, with some students in Ferndale, where initial measurements are in, increasing two or more reading grade levels through the program last year. They were behind two or more grade levels in reading, said Carol Jackson, who is operations manager for the two pilots. “We’re trying to help students get some traction their last couple of years of high school,” Aronson said. “What we’re trying to do is capture these kids before they get out looking for jobs and careers.” He talked briefly with Nikolai Vitti, superintendent of Detroit Public Schools Community District, about six months ago about the program’s early success and is now seeking a meeting to discuss a possible expansion of it to Detroit high schools, Aronson said. Detroit Public Schools has not yet begun the planning process for choos-

Annette and Jack Aronson

ing the new high school curriculum, said Chrystal Wilson, assistant superintendent of communications and marketing. It will soon begin organizing a group similar to that used for the K-8 curriculum planning, comprised of administrators, teachers, counselors, students and community members to help identify the district’s new high school curriculum. And any supporting work like tutoring will be born out of that same process, she said. The district doesn’t have any current plans to use the Read 180 program, Wilson said.

Pilot programs Aronson’s alma mater, Ferndale High School, has a significant number of students with reading issues. In the 2017-2018 SAT assessment, 52.7 percent of 11th-graders at the school were not proficient in reading and writing, said Dania Bazzi, superintendent of Ferndale Public Schools. The Aronsons three years ago paid to bring in the national Read 180 intervention program. They funded a dedicated reading specialist and a tutor to work with students in the classroom setting and also brought Beyond Basics and its tutors to the school to work with

a handful of the highest-need students. “Any time we can get more one-onone with the students, nothing is more important than that,” Aronson said, but that model is more expensive. The multimedia Read 180 program is designed to meet the specific needs of students reading below grade level. It blends instruction from a teacher with computer software that tracks progress and customizes instruction. Through their Artichoke Foundation, the Aronsons paid $58,000 for 20 software licenses at Ferndale High School the first year and has renewed them at a cost of about $3,000 annually for each of the past two years. They also equipped a classroom space with flexible learning furniture and computers and created a reading cafe, with hightop tables and coffee, water and protein snacks to create a space students in the program can convene and read. Last year, the couple launched a similar pilot at Hazel Park High School. Their combined support of Beyond Basics and bringing the Read 180 program to the Ferndale and Hazel Park high schools has added up to roughly $500,000 over the last few years, Aronson said. Both high school pilots use a classroom setting with the reading specialist and tutor working with a group of up to

MARKET FROM PAGE 1

With smaller, perhaps less liquid landlords comes deferred maintenance, said Dan Carmody, president of the Eastern Market Corp. Deeper wallets should bring a fresh round of building improvements, he said. “We saw this trend coming,” Carmody said. “I call it a tsunami or tidal wave of investment that’s needed to update many of the buildings in the district ... To have a future, these buildings need a large infusion of cash.”

A ‘seven-day location’ Among the buildings on tap for redevelopment: the former Detroit Water and Sewerage Department building that the city abandoned two decades ago on the north edge of the district on Riopelle Street next door to Roma Cafe. It’s windowless, sprawling, covered in graffiti. Enter George Jackson’s Ventra LLC and Ottawa-based Halcor Group, which plan a $20 million to $22 million redevelopment of the 105,000-squarefoot building into the Riopelle Market, which would have a mix of food-centered space like restaurants, accelerators and other uses, as well as office space.

Rendering shows Riopelle Market, which would have a mix of food-centered space like restaurants, accelerators and other uses, as well as office space.

It’s that mix that Jackson, the former head of the Detroit Economic Growth Corp., said would help make Eastern Market an even busier destination more regularly. “Eastern Market should be a seven-day location, not just a weekend location,” Jackson said. He added that the joint venture has talked with both the Nelsons and the ASH NYC team about their efforts. “They are all a good fit for what we are doing and also the direction that the Eastern Market Corp. wants to go in,” Jackson said. “Everything so far is compatible.” Grant Greschuk, director of Halcor, said a construction loan and other types of subordinated debt is expected to finance the project. The joint venture has hired Birmingham-based McIntosh Poris Associates and Detroit-based Centric Design as architects on the Riopelle Market project. The Southfield office of Colliers International Inc. has been hired to lease the space to tenants.

Halcor is also working on a redevelopment of the former WJBK TV building in the New Center area into at least 150 residences.

Rent increase worries Some existing businesses, Carmody said, have expressed concerns about rent increases as the new landlord crop pours money into improving the older buildings. Part of that concern arises because the space has been comparatively inexpensive for decades. “The previous landlords came up in an age where having a warm body and somebody paying any kind of rent was an advantage over having vacant space,” he said. But for example, Riopelle Market office rents would be on par with what’s seen in some of the renovated spaces in the central business district. It would have to start in the mid $20s per square foot for the project to be economically viable, said Peter McGrath, senior associate for Colliers Interna-

20 students each hour for five hours out of each school day. Last year, the two pilots worked with about 120 students deemed most in need of tutoring by administrators and teachers, Jackson said. It’s too soon to have a full year of results for the students participating in the Hazel Park High School pilot. But at Ferndale High School, about 84 percent of the 79 students in the program last year showed more than a year’s growth in reading level, Bazzi said. And just under a quarter of the students in the program increased their reading level by two grade levels or more. Generally, you see schools use reading specialists at the elementary level, Bazzi said. High school English teachers are teaching content, not reading. “To be able to have a reading specialist at the high school level is a unique opportunity,” she said. “This is going back, teaching reading to students we need to get to grade level.” Aronson comes to class once a month with lunch for the kids to build relationships with them. And he takes them on field trips to see things they wouldn’t otherwise be able to see, like an opera in Detroit, she said. Like Read 180, Beyond Basics offers small-group tutoring for groups of two to 10 students, as well as one-on-one tutoring for students who are two grade levels or more behind, at schools in Detroit, Pontiac and Taylor. “Reading and writing is a foreign language to the majority of kids in vulnerable communities,” said Pamela Good, co-founder, president and executive director. “The data we have from over 10 years of doing this is that what’s best for the child who’s more than a grade level behind in reading is one-on-one tutoring.” In Detroit, that’s the majority of students, Good said. Can you get gains with group tutoring? You can, but they won’t be as great, she said. “This crisis is so large, it’s going to take all of us, even people who aren’t in the literacy space to come in and meet the needs.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch tional. And Drew Chorney, senior vice president and director of retail for Colliers, said the retail rent “sweet spot” would be the “high teens to low $20s” per square foot. “Each deal is going to be unique and the economics are going to reflect the credit of the user,” Chorney said. Nelson has said he plans on carving out affordable space for artists and food users as his overall vision for his portfolio progresses. Despite the range of plans, the new cadre of property owners in the district all say Eastern Market needs to stay true to its roots as an area that sells, promotes and celebrates food and the arts. “Eastern Market Corp. has done a fantastic job of maintaining the area’s longevity,” Greschuk said. “In most cities, this would have disappeared long ago.” Nelson, son of serial entrepreneur Linden Nelson, said there will continue to be a mix of landlords and owner/operators in Eastern Market. “There are still a lot of owner/occupiers. You’ve got people like The Platform, the ASH group, Firm, George Jackson and some others that aren’t the traditional Eastern Market owners that have a food business in the building they own, but you still have some of those,” he said. “You’re going to continue to have that mix, and that’s a good thing.”

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

THE WEEK ON THE WEB

RUMBLINGS

Wilson foundation to grant $200 million for parks in Detroit, Buffalo

Is this Dead Things 2.0 for winless Red Wings?

OCTOBER 12-18 | For more, visit crainsdetroit.com

he Detroit-based Ralph C. Wilson Jr. Foundation announced last week its largest round of grants to date, $200 million in commitments split evenly between Southeast Michigan and Western New York. The latest round of funding comes on what would have been its namesake’s centennial birthday. The grants will fund waterfront parks in Detroit and Buffalo named in honor of Wilson as well as development of greenway trails throughout the two regions. There was a bit of serendipity involved in figuring out how the foundation would celebrate Wilson’s 100th birthday, foundation President and CEO David Egner said. Wilson believed in exercise and connecting people and had a great love affair with the water, Egner said. “Putting these parks on the water, having them bear his name and having them support this active lifestyle he so promoted, made sense ... nothing creates more opportunities for people to connect and get exercise than trails and parks,” he said. Both West Riverfront Park in Detroit and LaSalle Park in Buffalo are on the water and within sight of international border crossings. Both parks will be designed by world-renowned designers, making them destinations, and both will share the same name. “The sun will literally rise and set on Ralph C. Wilson Jr. Centennial Park on both sides of Lake Erie,” Egner said. The parks serve as anchors to a larger, more robust and burgeoning regional greenway system, connecting to other parks and neighborhoods, he said. The Wilson grants will stimulate the development of a minimum of 250 miles of new trails between the two regions. “That’s enough trails that if we strung them together, I could ride my bike between the two parks,” Egner said. Ralph C. Wilson Jr., the late owner of the Buffalo Bills and Grosse Pointe Park-based investment firm Ralph Wilson Equity Fund LLC, died in March 2014, leaving a $1 billion bequest to be spent down in his hometowns of Detroit and Buffalo/Western New York within 20 years. As part of the new grant commitments, the Detroit RiverFront Conservancy will take receipt of $40 million to support the $55 million-$60 million cost of developing West Riverfront Park. Another $40 million of the Southeast Michigan commitments will go to yet-to-be-determined grantees, disbursed by the foundation on a project-by-project basis for greenway efforts.

BUSINESS NEWS J Peak season for residential real estate in metro Detroit is winding down with indications that the seller’s market is beginning to shift, according to data released by Farmington Hillsbased Realcomp. Nothing is new

MICHAEL VAN VALKENBURGH ASSOCIATES

Rendering shows the West Riverfront Park in development for Detroit.

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

$58 million

JJThe expected price tag for the redevelopment of the Albert Kahn Building in Detroit’s New Center

110 feet

JJThe length of the new Lear Corp.-supported float unveiled last week during a preview party for America’s Thanksgiving Parade

$76

JJThe average resale price of Detroit Pistons tickets — the lowest in the NBA, per TicketIQ.

about high prices and low inventory, but the price increases are leveling out and it has the industry’s attention. J Little Caesars Global Resource Center facade’s pizza-shaped glass installation is at least nine months behind schedule. No new panes have been added to the 234,000-squarefoot building since at least August, perhaps even longer. Sources told Crain’s the $150 million project under the Ilitch family’s umbrella has also hit snags with its HVAC systems. J Detroit City Council last Tuesday approved $104 million in tax breaks spread over 35 years to subsidize Ford Motor Co.’s rescue of the long-abandoned Michigan Central Station and creation of a sprawling 5,000-worker campus in Corktown. The council also approved a community benefits agreement in which Ford has agreed to invest $10 million in the greater Corktown neighborhood as part of its developments there. J The owner of Pegasus Taverna in Detroit’s Greektown has purchased the New Parthenon restaurant across the street and plans changes that could shake up the neighborhood block beside Greektown Casino-Hotel. Greek restaurants New Parthenon and Santorini Estiatorio are gone and aren’t coming back, said Jim Papas. He has closed New Parthenon for renovations but hasn’t yet decided whether he’ll reimagine it as another traditional Greek restaurant or try something new there, he told Crain’s at Pegasus on Thursday afternoon.

OTHER NEWS J Davenport University plans to open a new satellite campus in Detroit’s New Center One building in January in response to an opportunity the Grand Rapids-based business school sees in customizing college degrees and certificates for employers in the city. The private not-forprofit school plans to serve more than 2,000 students per semester in 12,000 square feet of first-floor retail space there. It’ll close its Livonia location, but maintain its presence in Warren. J The Detroit Regional Chamber’s political action committee endorsed Democrat Gretchen Whitmer for governor over Republican Bill Schuette, while siding with Republican House Speaker Tom Leonard to succeed Schuette as attorney general over Democrat Dana Nessel. In endorsing Whitmer, the chamber PAC cited her support for the group’s priorities in regional transit, infrastructure funding and construction of the Gordie Howe International Bridge. J The Henry Ford announced the public phase of a $150 million comprehensive campaign aimed at spurring innovation, invention and entrepreneurship in the region’s future workforce. It will fund new digital and experiential learning platforms, programs, exhibitions and initiatives to advance innovation, invention and entrepreneurship and endowment for the Dearborn-based museum and Greenfield Village. J The Detroit Land Bank Authority is letting Democratic lieutenant governor candidate Garlin Gilchrist II keep a dilapidated 106-year-old apartment building in Detroit’s North End after he cleaned up the property and paid an overdue tax bill. Gilchrist has been working to rehabilitate the eight-unit apartment building over the past two years and it has become a surprise point of concern in the governor’s race. Republican nominee Bill Schuette visited the property to film a campaign video there.

OBITUARY J Longtime Detroit radio personality Mike Clark of the iconic “Drew and Mike Show” morning show died last week at age 63. Clark co-hosted, with Drew Lane, the rollicking show on rock station WRIF 101.1 FM from December 1991 until it was canceled in May 2013. He went on to launch podcasts and had a brief return to radio.

re the Dead Things back? The Detroit Red Wings went into the weekend without a victory in their first seven games of the 2018-19 season for their worst start since beginning 1985-86 with an 0-8-1 record. Detroit began that 1985-86 season with a 6-6 tie against Minnesota North Stars at Joe Louis Arena, followed by eight losses before a 6-3 home victory against the Pittsburgh Penguins on Oct. 30, 1985. The Red Wings were also winless to start the 1982-83 season at 0-6-1, the last year of what’s considered the “Dead Things” era that began in the late 1960s. What helped end the struggle was drafting future all-galaxy forward Steve Yzerman in 1983. They made the playoffs the two seasons before their rough 1985 start (they finished 28-38-14 that year). After 1985-86, they’d make the postseason every year except for 1989-90 until the long reign of success ended in 2016. Detroit had a streak of 25 consecutive playoff seasons — and won four Stanley Cups — from 1990 to 2016. They missed the postseason the past

two years, the first time that’s happened in back-to-back years since 1981-83. Detroit was absent from the playoffs from 1978-83, and made the postseason just twice from 1967-83. The NHL’s schedule-makers did the Red Wings no favors this season: They’ve played six of their first eight games on the road. The seven losses include a shoot-out and overtime defeat. Ironically, it was a Tampa team that kept Detroit winless with a 3-1 victory at Amalie Arena on Thursday. The Lightning were built by Yzerman, who was the team’s general manager until recently — fueling hope that his decision to step away from Tampa means he could return to Detroit to fix the Red Wings. Detroit (0-5-2) had a game Saturday night in suburban Miami against a Panthers team that also was winless to start the season. The Wings’ next home game is Tuesday against the Carolina Hurricanes at Little Caesars Arena — where plans are in the works to soon replace the bright red seats with black chairs that will appear less obviously empty during games on TV.

KIRK PINHO/CRAIN’S DETROIT BUSINESS

The Wagner Place project is restoring the old Wagner Hotel and transforming the face of West Dearborn.

Jolly Pumpkin, more to open in West Dearborn W

agner Place, a massive mixeduse redevelopment that Ford Land Development Corp. is working on, is bringing new dining options to Dearborn. Jolly Pumpkin Brewery, breakfast-lunch eatery The Great Commoner, Modern Greek, Paradise Biryani Pointe Indian Cuisine, Eleanor’s Cafe Yogurtown and a regional barbecue chain whose name was not disclosed are committed tenants in the development that also includes

office space for 600 of the automaker’s employees. Wagner Place is on the south side of Michigan Avenue, flanking the east and west sides of Monroe Street in downtown West Dearborn. The project is restoring the old Wagner Hotel and transforming the face of West Dearborn. Jolly Pumpkin also plans to open another location in Detroit Metropolitan Airport’s North Terminal as part of a redevelopment there.

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