Crain's Detroit Business, Nov. 19, 2017 issue by Crain's Detroit Business

Tony Hawk launches consulting firm Page 12

Detroit City FC officially going pro in the fall of 2020

NOVEMBER 19 - 25, 2018 | crainsdetroit.com

Page 4

CASINOS

Why time was right for $1B Greektown sale

Buyers like Detroit’s mature track record, stable market By Bill Shea and Dustin Walsh bshea@crain.com

dwalsh@crain.com

The $1 billion sale of Detroit’s Greektown Casino-Hotel is the culmination of several factors, including industry trends and timing. First, and perhaps most simple is basic economics: Greektown owner Dan Gilbert wants out of the casino business, and found buyers willing to pay an agreeable price.

The buyers — Wyomissing, Pa.based gaming conglomerate Penn National Gaming Inc. and New York City-based Vici Properties Inc. — like Detroit because Greektown is a mature property with a known track record in a market where competition is limited and stable. State law permits only three commercial casino licenses in the city, which has been experiencing a downtown investment boom.

Big Las Vegas-style casinos are rare in the downtowns of major American cities. Most casinos are on the outskirts, in suburbs, or far-flung locations away from major population centers. Not Greektown’s 400-room hotel and casino, which is among the reasons why Penn National has pursued it for years. “It represents an opportunity for the company to expand and diversify further in a great market with a prop-

Need to know

J Casino real estate investment trusts are driving acquisitions J Analysts: Greektown price on par with expectations

Dan Gilbert: The time was right to sell

erty that is ideally situated. The acquisition will also be additive to Penn National’s operating results,” said Penn National spokesman Joseph Jaffoni. He said Detroit is ideal because of the city’s “improving economics.” SEE CASINO, PAGE 21

TELECOM

Cellphone carrier pole fee proposal sparks debate

SPECIAL REPORT | THE RENAISSANCE CENTER

Foggy future ahead?

By Chad Livengood clivengood@crain.com

The Renaissance Center is an icon of Detroit’s skyline and its most prominent office complex. It’s also a difficult-to-navigate behemoth that’s isolated from the rest of downtown. And at 40+ years old, it’s not the least bit trendy. With 1 million square feet in buzzy new office space planned for the other side of Jefferson Avenue, what does the future hold for the RenCen? Page 10 Photograph by Amy Elliott Bragg

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NEWSPAPER

INSIDE

Detroit’s Amazon bid: Not a waste >> Gamble spurred leaders to work together Page 3

AT&T, Sprint, Verizon and other cellphone carriers are lobbying Michigan legislators to grant them access to publicly owned traffic signal poles for mounting next-generation wireless technology — for less than what you probably pay for your monthly data plan. When lawmakers return to Lansing on Nov. 27 for the start of their lame- Need duck session, to know they’ll be asked to JJLawmakers are lock into law an being asked to lock annual lease rate in an annual lease of $20 for each rate of $20 for traffic signal pole cellphone carriers that wireless com- for accessing panies want to traffic signal poles use to deploy 5G wireless technol- JJRevenue wireless ogy to urban and carriers could reap suburban areas of dwarfs the proposed lease rate Michigan. The revenue wireless carriers could reap from data plans for smartphones, tablet computers and Wi-Fi-enabled vehicles dwarfs the proposed lease rate: Verizon and AT&T sell 1GB data plans for as little as $15 per month or $180 a year. Sprint advertises a 2GB data plan for $40 a month or $480 annually. The legislation, Senate Bill 637, also calls for infrastructure companies to pay a maximum $125 annual lease payment to municipalities for new utility poles they could mount along roadways, with limited power by local road agencies to object. “We really can’t say no and they’ll pay us $20 a year for a lease rate and a $200 permit fee for up to 20 locations, which is peanuts,” said Dennis Kolar, managing director of the Road Commission of Oakland County. SEE POLE FEE, PAGE 19

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MICHIGAN BRIEFS

INSIDE

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

Fewer hunters, more deer Fewer hunters are taking to the woods and fields as Michigan’s annual firearms deer hunting season began Thursday. With about 2 percent fewer hunters roaming the state, that can hurt the state’s economy, which sees about $2.3 billion from hunting each year. Fewer hunters also impacts natural resources conservation efforts, the Michigan Department of Natural Resources said. About $62 million is provided through hunting and fishing licenses each year. On the plus side, it should be a good year for deer hunting as the DNR said relatively mild winter and spring weather appears to have boosted the herd’s health and the number of surviving fawns. Despite the drop in hunters last year, an estimated 376,000 deer were harvested in 2017, up 10 percent compared to 2016, the DNR said. Michigan is one of the top five states nationally in number of deer hunters and overall deer taken each year. Firearms deer hunting season runs from Nov. 15-30. New rules are in place this year to prevent further spread of fatal chronic wasting disease among deer.

STATE OF MICHIGAN

Hunters contribute $2.3 billion to Michigan’s economy and pay for wildlife conservation and management work throughout the state. . last week by the Michigan Depart- however, that “this is no time to State unemployment ment of Technology, Management stand still or become complacent.” rate down to 3.9% Michigan’s unemployment rate & Budget. The agency said the state’s labor Michigan Medicaid fell by a tenth of a percentage point to 3.9 percent in October, the Asso- force was flat, with total employ- approved for drug ment in Michigan rising by about pricing experiment ciated Press reported. The state’s jobless rate was two- 2,000 in October and the number of Michigan is the second state to retenths of a percentage point higher unemployed declining by about ceive federal approval for a drug-pricthan the national rate of 3.7 percent 2,000. ing experiment that supporters say Gov. Rick Snyder noted that the may enable the state to save money last month and eight-tenths of a percentage point lower than the last time Michigan’s unemploy- and ensure medicines are working as state’s October 2017 rate of 4.7 per- ment rate was 3.9 percent was Oc- advertised, the Associated Press recent, according to figures released tober 2000. He said in a statement, ported.

CALENDAR

CLASSIFIEDS

DEALS & DETAILS

KEITH CRAIN

OPINION

OTHER VOICES

PEOPLE

RUMBLINGS

WEEK ON THE WEB

The Centers for Medicare and Medicaid Services announced the waiver approval last week, months after approving a similar proposal from Oklahoma. Michigan will be empowered to “demand results from drug manufacturers in exchange for paying for medicines” for Medicaid recipients, CMS administrator Seema Verna said. Under the value-based purchasing program, the state and a pharmaceutical company would agree to a set payment if its medication works as advertised, but only a fraction of that if the drug is not as effective as promised.

CORRECTION A photo on Page 3 of the Nov. 12 issue with the article “Sacred renaissance: Midtown church getting assist from national group for restoration” should have been credited to Rod Arroyo.

Congratulations to the winners of the 2018 Knight Arts Challenge whose ideas will engage and enrich Detroit through the arts. 25 ideas/ $1.46 million Learn more at knightarts.org. Arab American National Museum CAN Art Handworks/Carlos Nielbock Collective Sweat Detroit Core City Beautification Fund/Prince Concepts Cranbrook Art Museum Detroit Artists Market Detroit Public Theatre Detroit Writers’ Guild Karen Dybis Living Arts Mark Stryker Marshalle Montgomery Favors Michael Khoury

Michelle Andonian Michigan State University Community Music School-Detroit NKSK Events + Production/Njia Kai Norwest Gallery of Art Oudolf Garden Detroit ProjectArt Shara Nova Signal-Return The Hinterlands University of Michigan-Dearborn Wayne State University Vanessa Cronan

Photo from the exhibition Halal Metropolis: Exploring Muslim Visibility in Detroit, courtesy of the University of Michigan-Dearborn Halal Metropolis: Exploring Muslim Visibility in Detroit

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NONPROFITS

Sphinx Organization to create pipeline of diverse leaders in classical music By Sherri Welch swelch@crain.com

BY KEVINKENNEDY.COM

Afa Dworkin, president and artistic director, the Sphinx Organization.

Since the Sphinx Organization launched its educational, touring and competition programs 22 years ago, the number of black and Latinx musicians who hold seats in major orchestras around the country has begun to rise. During the same period, commissions, tours and solo performances by musicians of color have also grown,

said Sphinx President and Artistic Director Afa Dworkin. But diversity in the leadership ranks of classical music has not kept pace. Beyond societal and systemic challenges, there hasn’t been an organized effort to create a pipeline of diverse leaders in classical music, Dworkin said. “When there’s no role modeling ... it’s hard to see a feasible path,” she said. To address that, the Detroit-based

nonprofit is launching a leadership development program with educational and mentorship components aimed at cultivating black and Latinx candidates for leadership positions in orchestras, conservatories and music schools across the country. Initially it will work with leadership candidates in the classical music field, but the long-term vision is to expand it to all of the performing arts, Dworkin said.

The initiative has the potential to be transformative but can only have impact if it’s embraced by the field, she said. “For the status quo to change, it will take a sector-wide mindset change that not just recognizes the importance of diversity in leadership, but beyond that seeks out candidates and intentionally prioritizes diversity in leadership.” SEE SPHINX, PAGE 18

Q&A

ANALYSIS

Did Amazon use Detroit? Maybe. Waste of time? Hardly.

BLOOMBERG

as Detroit’s bid for Amazon’s second headquarters a colossal waste of time and effort? Hardly. Despite the CHAD hand-wringing LIVENGOOD over whether the S e att l e - b a s e d online retail behemoth planned all along to establish new corporate offices in the suburbs of New York City and Washington, D.C., the Amazon

fever that swept over Detroit a year ago was a flu worth catching. There hasn’t been a single economic expansion opportunity in decades that has spurred Southeast Michigan’s business and political leaders into collective action like the Amazon bid did in pursuit of 50,000 high-wage white-collar jobs. Even L. Brooks Patterson threw in his support for Detroit. The frenzied race for Amazon’s attention forced our leaders to take a serious look at our strengths as a region and our all-too-obvious shortcomings (see: pockmarked roads,

low-performing schools, fractured regional transit systems, the subpar percentage of adults with four-year degrees and our “radioactive-like” reputation). Before Amazon issued its Request For Proposals just after Labor Day 2017, the state’s economic planners were plodding along, chasing the usual assortment of auto industry investments, intrastate relocations and a collection of Amazon package fulfillment centers with low-wage warehouse jobs. Earlier that summer, Gov. Rick Snyder and Detroit Mayor Mike Dug-

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Known for steamed mussels and feather bowling, east-side cafe to soon be under new ownership. Page 14

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gan made a serious play for a Foxconn liquid crystal display screen manufacturing plant, but lost the bidding war to Wisconsin. But even Foxconn’s promised 13,000 jobs paled in comparison to the transformational economic tsunami that Amazon was stirring up. For Detroit and Michigan, the failed bid for Amazon’s second corporate headquarters suddenly got our leaders talking — and, in some cases, arguing — about what Michigan really needs to compete for 21st century knowledge-economy jobs. SEE AMAZON, PAGE 18

Jay Alix on restructuring, education and Broadway Jay Alix, founder of New Yorkbased AlixPartners LLP, made national headlines last week with a $200 million endowment gift to the Mayo Clinic, the largest ever made to the health system. Beyond his support of Mayo, Alix is quietly supporting causes in Southeast Michigan, where in the 1980s he founded his company (which still has a Southfield office), administers his foundation and still lives. He’s officially retired, but you Jay Alix: wouldn’t know it. Keeping busy in When he isn’t retirement. providing pro bono business consulting to the Mayo Clinic and serving on its board, he is backing Broadway productions and co-producing documentaries. Alix, who was named among Crain’s Detroit Business “40 Under 40” in 1991, remains a board member of AlixPartners as a shareholder but isn’t involved in the day-to-day operations of the company. Yet his passion for the restructuring and turnaround industry he helped create led him earlier this year to file personal lawsuits against New York-based management consulting firm McKinsey & Co., alleging racketeering and fraud. Alix, 63, spoke with Crain’s Senior Reporter Sherri Welch last week on the things capturing his time, talent and treasure. His comments have been edited for length and clarity. Crain’s: How did you get involved with the Mayo Clinic? Alix: I first learned about the Mayo

Clinic in the ’80s and really admired their business and patient care model. That became the model I designed our firm, AlixPartners, after. Mayo Clinic always puts the needs of the patient first. The patient never has to deal with internal bureaucracy and silos. Mayo is an integrated health system and it’s seamless to the patient. SEE ALIX, PAGE 20

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CONNECTION TO

COM M U N IT Y We travel your roads and live on your streets so we know well what is important to your community. Local knowledge and personal understanding – it’s all connected.

Detroit City plans to go pro in a new 11-team league.

DETROIT CITY FC

Detroit City FC to join pro league By Bill Shea bshea@crain.com

FISHBECK , THOMPSON, CARR & HUBER engineers | scientists | architects | constructors

Detroit City FC is officially going pro. The National Premier Soccer League said last week that the club is among 11 that will form a new professional league that will begin play in the fall of 2020. In the interim, the league said the teams will play in the inaugural “NPSL Founders Cup” competition that will run from August to November 2019. “That competition will lead to a full league schedule in the spring to fall of 2020. These clubs will be making a full-time commitment to their markets and will include professional players, coaches and staff,” the NPSL said in a statement. There are no details yet on the format, player rosters, schedule salaries and other details of the new league and for the Founders Cup. Those will be announced at a date later this winter, the NPSL said. Detroit City will still play a regular NPSL season in 2019 prior to the new cup and transition to the new league. A message was left for Detroit City FC CEO Sean Mann. The new pro league isn’t seeking professional status within the U.S. Soccer system’s organizational pyramid that’s topped by Major League Soccer, said DCFC Director of Media and Public Relations Lindsey Pehrson. That’s more of a semantical distinction because the players will all have professional contracts, meaning they give up their amateur status and NCAA eligibility. All teams in the new league will have paid professional players, coaches and staff, she said. DCFC has been part of the NPSL since the team launched in 2012. The league is a mix of mostly amateur and some semi-pro teams. Detroit City FC’s five owners have sought to turn professional because of the wild growth in their club’s popularity. It averaged 5,946 fans per match this past season at Hamtramck’s Keyworth Stadium, and drew nearly 8,000 for one match.

Need to know

JJPopular soccer club joining new pro

league

JJPro plans in works for several years JJDetails still sparse, but pro move comes in 2020

The club’s average attendance in 2018 topped the NPSL, and was better than 25 of the 33 clubs in the United Soccer League that’s two tiers above the NPSL on the U.S. soccer organizational pyramid. DCFC’s ownership has said it believes it’s leaving money on the table because the 90-plus-team NPSL offers only a 12-game regular-season schedule, with six of those at home. It’s not yet known how many games the new league will play, but Pehrson confirmed that it will be more than the current schedule. Also unclear is how DCFC and the other teams in the new league will finance the move to turn pro, which will require paid players and other expenses. DCFC ownership has studied bringing on a deep-pocket majority owner, but only if the club’s grassroots-focused business strategies remain in place. The team’s budget this season was $1.5 million, with most revenue generated by ticket, merchandise and corporate advertising sales. DCFC’s roster of 20-some players will transition from primarily collegians, who cannot accept salaries or perks without jeopardizing their amateur status for NCAA eligibility, to paid professionals. DCFC has been seeking to turn pro for several years, and it came close in 2017 only to get sidetracked because of discord and legal issues among the higher-level leagues. It was in talks with the North American Soccer League to join that second-division league, but the NASL lost its sanctioning from the Chicago-based U.S. Soccer Federation in 2017 and subsequently halted play. DCFC was functionally left with no choice but to remain in the NPSL. It wasn’t interested in joining the USL. As part of its long-planned bid to

go pro, DCFC earlier this year hired a Detroit ad agency, Lafayette America, to craft marketing and branding campaigns when the transition happens. It also has been planning more improvements to its home pitch — including the move from grass to artificial turf — and it opened a field house earlier this fall. Turning professional is the club’s largest and riskiest endeavor, however. “We are very excited to bring a new brand of community-based soccer to the U.S. market,” said NPSL Chairman Joe Barone in a statement. “Beginning with the Founders Cup, fans will be able to enjoy watching authentic clubs compete with professional players and staff. This new venture will build upon the success and experience of NPSL and its nationwide network of local soccer club members.” The other teams turning pro include ASC San Diego, Cal FC, California United Strikers FC, Chattanooga FC, FC Arizona, Miami FC, Miami United FC, Milwaukee Torrent, New York Cosmos, and Oakland Roots. The NPSL said “plans are being developed to add additional clubs” but didn’t disclose any more details. The California United Strikers FC separately announced that it’s joining the new league as an expansion team in Irvine, Calif. The NPSL operates under the United States Adult Soccer Association, the national organization for amateur soccer in the United States. “We support our members’ growth and expansion of their leagues,” said USASA President John Motta in a statement. “This is another opportunity to develop players, coaches, administrators, and referees at the highest level of adult soccer. This is absolutely critical for player development, as it prepares players onto the next level and also for referee development, as this level of adult soccer is the best training ground for referees in this country.” Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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Gilbert may pursue auto insurance reform in 2020 By Chad Livengood

Need to know

Billionaire Dan Gilbert and his Quicken Loans Inc. family of companies are prepared to fund a ballot campaign in 2020 to reform Michigan’s auto insurance law if lawmakers don’t take action by mid-2019, the mortgage company's top lobbyist told Crain’s. “If our leaders are not able to come together and get it done for the people, our position is then we need to take this directly to the people in 2020,” said Jared Fleisher, vice president of government relations for Quicken Loans. Since Detroit Mayor Mike Duggan’s “driver’s choice” proposal was defeated in the Michigan House last November, Quicken Loans has been actively lobbying for the Legislature

JJDan Gilbert’s Quicken Loans is mulling 2020 ballot initiative on auto insurance reform

clivengood@crain.com

JJMortgage giant giving lawmakers until mid-2019 to take action JJOther businesses may join coalition to overhaul Michigan's unique no-fault system to revisit no-fault reform in the lameduck session that begins Nov. 27. “We believe the right solution is a legislative solution (and) we believe that should happen in lame duck,” Fleisher said. “If it doesn’t happen in lame duck, we think it should happen in the first six months of 2019.” Gilbert’s company is dangling the threat of bypassing the Legislature

with a ballot campaign in 2020 as Duggan is challenging the constitutionality of the law in federal court. The Coalition Protecting Auto NoFault, a group comprised of medical providers and personal injury attorneys and the Insurance Alliance of Michigan — an industry group for auto insurance companies — filed separate motions last week in U.S. District Court in Detroit arguing the no-fault law should not be tossed out and can fixed by the Legislature. Ballot campaigns involving voter-initiated laws typically get launched in the second half of non-election years to give enough time to gather the more than 338,440 valid voter signatures — 8 percent of this year’s total votes for governor — that’s required to qualify for the next November general election ballot.

Gilbert has been a vocal proponent of no-fault reform for the past year, arguing the high cost of auto insurance in Michigan is a deterrent to economic development and attracting new residents to the state. The Quicken Loans founder and chairman got personally involved in lobbying legislators last year to aid Duggan’s pursuit of tiered levels of medical coverage for drivers to choose from instead of the unlimited medical insurance all vehicle owners are required to purchase. Fleisher said there’s been no decision made on whether they would pursue a ballot proposal that seeks Duggan’s “drivers choice” reforms or seeks to scrap the no-fault law and make Michigan a tort state again. In a tort system, injured drivers have to take at-fault drivers to court

to recoup their medical expenses and there are often limitations on medical coverage. Michigan’s unlimited personal injury protection coverage for medical treatment and lost wages is the most comprehensive — and most expensive — auto insurance coverage in the U.S. The Quicken Loans lobbyist said there’s likely to be other Michigan companies interested in supporting a ballot proposal — should it come to that. “I think it’s fair to say that you could see an active business coalition on this issue … folks who are not on the health care side, not on the insurance side, but who are on Michigan’s side,” Fleisher said. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

Crain’s event honors 20s, 40s award winners

lasses were raised and achievements praised at the Roostertail on Thursday night as nearly 400 people gathered to celebrate Crain’s 2018 classes of 20

in their 20s and 40 under 40 honorees. After an awards presentation and a panel discussion about bridging generational gaps in the workplace, partygoers dined, mingled,

AARON ECKELS FOR CRAIN’S

2018 Crain’s 40 under 40 honorees. From left: Will Branch, Dan Austin, Sanford Nelson, Seth Herkowitz, Jessica Hauser, Khalil Rahal, Alison Orlans, Joseph Vernon, Vijay Virupannavar, Regan Grant, Joni Thrower Davis, Michael Bassirpour, Tamira Chapman, Jeff Glover, Melissa Butler, David Vermiglio, Kerry Duggan, Kimberly Dowdell, Ron Bartell, Rana Elmir, Stephanie Amaimo, Kacee Must, Kevin Roach, David Vermiglio, Sri Maddipati, Omari Rush, Jacqlyn Smith, Adam Finkel.

danced and snapped selfies amid the glitter of the Roostertail’s festive winter decor. Nominations for 2019 20s and 40s classes will open in January.

AARON ECKELS FOR CRAIN’S

20 in their 20s honoree Meagan Ward, founder of women’s coworking space Femology, spoke on a panel about bridging generational gaps in the workplace.

AARON ECKELS FOR CRAIN’S

2018 Crain’s 20 in their 20s honorees. From left: Courtney Smith, Alyson Schramm Naeger, Allison Drutchas, Ghida Dagher, David Cowan, Katie Fahey, Ezekiel Harris, Stella Safari, Zain Ismail, Grace Hsia, Laura Grannemann, Justin Hanna, Marc Ledent, John Rogers, Mike Romine, Meagan Ward, Victoria Manix, Monica Rodriguez, Matt Romine.

AARON ECKELS FOR CRAIN’S

20 in their 20s honoree Zain Ismail, who works at Henry Ford Health System, addressed the importance of helping younger employees find purpose at work.

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Lorem ipsum

Cooked in Our House. Enjoyed in Yours.

CES chief: Detroit auto show ‘isn’t a competitor’ By Timothy J. Seppala Special to Crain's Detroit Business

zingermanscornmanfarms.com/thanksgiving

January 2019 will be the last time the Consumer Electronics Show and the North American International Auto Show run back-to-back. Owned and produced by the Consumer Technology Association, CES 2019 will run Jan. 8-11 in Las Vegas. The Detroit auto show will immediately follow, running Jan. 12-27 at Cobo Center. Some 45 Michigan-based companies will trek to Las Vegas to show off their wares to hundreds of thousands of attendees, including Continental Automotive, Ford Motor Co., automotive seating firm Magna and Magneti Marelli, which makes lighting systems for autonomous vehicles. Bosch will be on hand to show off e-bikes and autonomous sensor advances. Automotive supplier Valeo will debut a car with its Smart Cocoon biometric climate control system. Waymo CEO John Krafcik will keynote the Leaders in Technology dinner, an invitation-only event bringing together more than 600 policymakers, top technologists and entrepreneurs. The chief of the self-driving technology company will join a chat to discuss the latest self-driving applications and the future of mobility on Jan. 9. “Las Vegas will look like a turbocharged Detroit auto show,” Birmingham’s Gary Shapiro, president of the Consumer Technology Association, said at a Thursday media luncheon. For all Shapiro relates his flagship event to Detroit’s, he bristles at direct comparisons. “We are not a public auto show,” he said. The point of CES isn’t to move cars off dealership lots, it’s to showcase pure technology and get government, the tech world and auto industry in one place, to work together, he said.

knagl@crain.com

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Need to know

 January 2019 will be last time Consumer Electronics Show and Detroit auto show run back-to-back  Las Vegas tech show is about pure technology, not moving cars off dealership lots, according to CES chief  Waymo CEO John Krafcik will keynote the Leaders in Technology dinner at CES

He was adamant the CTA had nothing to do with the Detroit Auto Dealers Association’s decision to bump the January showcase five months, to June 8, in 2020. Nor did the association tell Audi, BMW or Mercedes-Benz to pick one show over the other, he said. Shapiro’s theory is that weather was a bigger factor than CES, echoing comments the dealers association’s Rod Alberts made to Crain’s in July. In the end, who shows what and where isn’t up to Shapiro. “Every company makes their own independent decisions,” he said. For Magneti Marelli, that means having a bigger presence at CES versus

Study: Michigan on track for largest job growth streak since WWII By Kurt Nagl

ARE YOU USING

TIMOTHY J. SEPPALA FOR CRAIN’S

Birmingham’s Gary Shapiro, president of the Consumer Technology Association.

the Detroit auto show, while viewing both shows as equally important. In Detroit, the company has exhibited its Smart Corner lighting system at the Automobili-D concourse in a cozy 10-foot-by-20-foot booth. In Las Vegas, it’s a different story. There, the company rents 6,000 square feet at The Wynn casino and resort and shows off its entire portfolio. Rather than prepare separate products or announcements for each show, the company repackages its CES debuts for the Detroit show. “Because our booth space (at NAIAS) is so much smaller than it is at CES, we just show a portion,” Magneti Marelli’s Lisa Van Giesen said. The marketing and communications lead explained that despite its Detroit showing being a small subset of the CES exhibit, it’s the same technology. “(It’s) still connected. It’s still autonomous, still lighting and electronics,” Van Giesen said. Scott Worden, corporate communications manager for Magna, agreed, saying that the messaging and product themes would be consistent across both shows. The Highland Park-based company will debut a concept that allows for reconfigurable second-row seating at CES and then “pick a couple of the highlights” to replicate at a smaller scale in Detroit. His company will have a bigger presence at CES because it’s a bigger event and runs longer, he said. Compared to Automobili-D’s four days during NAIAS preview week, between preshow events and when the show floor proper opens, CES runs for five. From those perspectives, it’s easy to understand why Shapiro is reluctant to compare the two. “When I look at our competitors, I don’t think the public auto shows are our competitors,” he said. “We provide something totally different.”

Michigan is on track to achieve nine straight years of job growth — the longest stretch since the World War II era. That’s according to a report released Friday by University of Michigan economic forecasters, whose findings paint a rosy picture of the decade that’s followed the Great Recession. Job recovery, a steady decrease in unemployment and brighter outlooks on the economy are all key points of the study, produced four times yearly by the Ann Arbor-based university’s economics department, which has forecast the state and national economy since 1952. The most recent study zeroes in on the third quarter of 2018 and compares it to data dating back to 1939. It finds that the nine years of job growth between the fall quarters of 2009 and 2018 match the previous record set between the spring quarters of 1991 and 2000. With growth expected to continue into the new year, the current streak is set to eclipse the one in the ’90s. “We are thus poised to set a new

Need to know

Longest job growth streak since 1939 expected 

 Unemployment rates lowest since 2000  Job growth expected to slow but stay positive in next two years

record for the longest period of job expansion in Michigan since the World War II era,” the study says. Economic recoveries have generally lasted longer in the past 40 years than recoveries earlier in the 20th century due to the timing of negative external shocks, a change in the economy’s composition and sophistication of policy makers, researchers say. The state’s unemployment rate is projected to average 4.4 percent in 2018, which would make it the lowest since 2000. The number of jobless residents dipped below 200,000 in September for the first time since 2000. However, the study points out that the state’s workforce had more than 250,000 additional people in 2000. Economists note a tightening labor market in the state and slight

slowdown in job growth but expect a positive trend over the next two years. Leading sectors for job gains this year have been construction and professional/business services, which both added more than 11,000 jobs since January. They are each expected to continue at the same clip in 2019. Health services saw 7,400 new jobs this year, while manufacturing added 6,900. Automotive sales have slowed some in the past year, and sales are expected to decline from 17.1 million this year to 16.9 million next year. “The overall 2019-20 forecast for Michigan sees steady but muted job growth, low unemployment, tame inflation and an economy that continues to diversify,” the study says. The study also dives into where the state will see growth in its under-65 population, noting that international migration and attraction of college-educated individuals are expected to play a big role. The full study and past reports can be found on the university’s website. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

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HAP to start moving 1,100 workers to Troy By Kurt Nagl

knagl@crain.com

Health Alliance Plan of Michigan will move 1,100 employees and contractors to its new building in Troy starting Nov. 26, with plans to complete the move in the first quarter of next year. The Detroit-based nonprofit health plan has nailed down dates for its hop from Southfield to Troy, it said in a Monday news release. HAP’s move from 21700 Northwestern Highway in Southfield to 1414 E. Maple Road was announced in February. Detroit-based DeMaria Building Co. Inc. is the general contractor handling

Need to know

JJMove from Southfield expected to be

complete Q1 2019

JJHAP to take up space at former HQ of United Shore JJMove announced in February

HAP will take up 180,000 square feet of the Troy building. renovations at the Troy building — the 275,000-square-foot former headquarters of United Shore Financial Services.

The mortgage company moved into its new Pontiac headquarters in June. HAP will take up 180,000 square feet of the Troy building under a sublease from Detroit-based Henry Ford Health System, its parent company. That’s a 16.7-percent smaller footprint than it has at its building in Southfield, where it leases 216,000 square feet. The amount of money HAP is investing in build-out was not disclosed. Signage on the building’s exterior is expected to go up later this week, depending on the weather, said Lee Ann Welsh, public relations manager for HAP.

WSU alumni donate $1M for engineering center By Anisa Jibrell ajibrell@crain.com

Wayne State University has received a gift of $1 million from two graduates to establish a new center for global engineering education. The center, which will be named the Nancy Philippart and Thomas McGrail Center for Global Engineering Education, will serve as the epicenter for international programs and global initiatives, according to a news release. The couple previously established an endowed scholarship at the college for students to seek out educational opportunities overseas. “The ability to work across cultures and countries is essential, particularly in many engineering fields where international offices have teams working together,” Philippart, an adjunct professor in the College of Engineering, said in the release. “Students who have the opportunity for global learning are going to have life-transforming experiences that shape their future success.” Current programs will merge within the new center that will hone in on study abroad, research, internships and service learning, the school said. The center will be home to the “3 + 2 program,” which will permit students from partner universities to study for three years at their home institution, then study at Wayne State for two years to complete a master’s degree. “This new center will provide global experiences for generations of students, through the generosity of Nancy Philippart and Thomas McGrail,” university President M. Roy Wilson said in the release.

BANKRUPTCIES The following businesses filed for bankruptcy protection in U.S. Bankruptcy Court in Detroit Nov. 9-15. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. JJScott Industries Inc., 32059 Milton Road, Madison Heights, voluntary Chapter 11. Assets and liabilities not available. JJHosner Holdings Inc., 26075 Woodward Ave., Suite 300, Huntington Woods, voluntary Chapter 11. Assets and liabilities not available.

BOOST EFFICIENCY. BOOST SAVINGS. Lower temperatures can mean higher energy consumption for Michigan businesses. But DTE Energy has tips to keep your bill low and comfort high. For example, replacing your thermostat with a programmable one could knock 3% off your bill. Sealing air leaks and adding insulation can save you up to 10%. And fewer hours of natural light mean you can save a bundle with highly efficient LED bulbs. You see, DTE wants to help make saving easier for your business. So get more tips at dteenergy.com/savenow.

COSTAR GROUP INC.

Detroit-based Health Alliance Plan is subleasing 180,000 square feet in the 275,000-square-foot former United Shore Financial Services LLC headquarters building in Troy.

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

OPINION COMMENTARY

Poppe says education overhead doesn’t add up

hen Patti Poppe looks at the current structure of Michigan’s public education system, the president and CEO of Consumers Energy Co. sees administrative overhead. Lots of extra administrative overhead. And the numbers tell the story. Michigan has 545 local public school districts, 56 county-level intermediate school districts and 295 independently operated charter schools. Twenty years ago, charter schools were just arriving in the educational marketplace through Michigan’s newly minted school choice and charter school laws that forced traditional school districts to compete for students within their own boundaries — and beyond — for students who carry with them a per-pupil grant that now averages $8,343. Twenty years ago, there also were 130,000 more public school-age students in Michigan to serve — with one-third fewer school entities and layers of administration. With nearly 900 entities splitting up the education of 1.52 million schoolchildren, Poppe wants to see more money go to the classrooms, supporting a teaching profession that’s hurtling toward a full-blown talent-attraction crisis.

CHAD LIVENGOOD clivengood@crain.com

“I think there should be administrative consolidation,” Poppe said in an interview with Crain’s. “That doesn’t mean you have to reduce the number of schools, per se.” The CEO of one of the state’s two major utility companies isn’t just pontificating from her corporate perch at 1 Energy Plaza in downtown Jackson. For Poppe, it’s personal. During a Nov. 1 speech at Business Leaders for Michigan’s CEO Summit in Detroit, Poppe showed a picture of her mother on the day she started as the principal of Bertha Robinson Elementary School in East Jackson after years of teaching in Napoleon's school district. “She’s not with us anymore, but I have a feeling my mother would be dismayed with how our teachers in America more broadly, but specifically here in Michigan, feel abandoned by us,” Poppe said. “They feel

blamed by us.” So as she looks at current state of Michigan’s public schools, Poppe can’t help but wonder whether structural consolidation of administrative operations may free up more money for classroom instruction and supporting educators. The East Jackson school district where Poppe’s mother once worked arguably should be merged with Jackson Public Schools or another neighboring district in eastern Jackson County. East Jackson schools is a lower-funded district that, like most districts in Michigan, has struggled financially for more than a decade to keep its doors open in the face of declining enrollment, increased competition and ballooning legacy costs that total one-third of the bimonthly cost of payroll. “Why isn’t it part of JPS?” asked Poppe, whose Jackson-based company is a major contributor to the local school district’s tax base. But that’s a politically explosive question in any town, where community pride and identity often centers on the local high school. Poppe thinks there could be a middle-ground approach where the number of school district entities is drastically reduced, while keeping “all of the mascots and all of the football teams and all of that busi-

ness.” “Cut upstream, like we all do in business,” Poppe said. Poppe is encouraging business leaders in Michigan to get Patti Poppe: involved in the Encourages debate about the business leaders future of Michito get involved in gan’s public edudebate. cation system as Gov.-elect Gretchen Whitmer and a new crop of legislators with no institutional knowledge take office on Jan. 1. She’s also mindful that businesses like hers can’t survive without stable and thriving school districts. That’s why Consumers Energy has pulled back on its initial attempt to get lawmakers to eliminate the personal-property tax on utility transmission equipment. Consumers want lawmakers to cap the company’s annual PPT bill at $200 million plus inflationary increases to lower the taxable value of new investments it’s making in electric and gas lines, substations, transformers, utility poles and gas storage facilities. “We’re not trying to eliminate that funding to the schools, but it can’t

grow because those same schools will have to pay it,” Poppe said. “The customers pay it — I don’t pay it — the customers pay that tax bill.” Consumers has estimated its personal property tax bill could double by 2025 without some relief from lawmakers in the upcoming lameduck session. But school groups are fighting the legislation because it would take another whack at a property tax base that still hasn’t evenly recovered for school districts from losses sustained during the housing crisis of the Great Recession. And that illustrates one of the entrenched conflicts in school reform. Businesses want better schools and educational outcomes and know the current system is an existential threat to their future. But like Consumers Energy, they’re still looking out for the bottom line. 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.

Everybody wants all the secrets A

t least a couple of times a day, someone innocently asks me to participate in some sort of survey. They are trying to mine some KEITH more informaCRAIN tion about me, Editor-in-chief although I am convinced that there is little if anything left they don’t already know. My guess is that they have figured out just about everything about me, my habits, what I buy and what I am likely to buy. I have no secrets from these data-driven folks. The surveys are usually innocent enough, but when we are finished, they add more pieces of the puzzle of our lives. Surely, some marketing guy or gal is willing to pay big bucks to learn that I do not smoke or buy beer and prefer Tim Horton’s to Starbucks. Someone is making a career off these mundane facts. I have no doubt that recently we all told someone something that hinted at our preferences in the voting booth, and minds were changed by

the right sales pitch. I prefer the guys that are really interested in the car I drive and why. Would I be interested in switching brands? Perhaps would I like an SUV instead of a four-door sedan? The last time I went to the supermarket and gave them my credit card, they were able to mine a truckload of data about what I bought, how often, what my ZIP code was and all sort of other delicious data to add to an already long list of likes and dislikes. You and I have no secrets any more. Business marketing has become so data-hungry that there is no defense against the constant vacuuming of our information. It began innocently enough, but now it has become essential to business to know as much about customers and prospects as possible. There is no point in fighting it. In fact, you probably would not know who to fight if you really wanted to object. Heck, we know something about you just because you subscribe to Crain’s or read this column. If I find out anything, I promise to forget it. Not that I heard anything in the first place, They, whoever “they” are, wouldn’t tell me anyway, so maybe your secrets are safe.

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

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

Welcoming immigrants pays big dividends

n 2003, 19 years after immigrating to Detroit from Iraq, I built my first hotel. It was a Hampton Inn in Detroit’s Commerce Township suburb, and it became one of the top-performing hotels in the state. From that success, I kept going. Today, I own 22 hotels, and have 10 more in the pipeline. These properties gross over $100 million a year and employ more than 1,000 people. But none of this would have been possible without the help of local organizations. In addition to my 90hour work weeks and sleepless nights, the Michigan Economic Development Corporation provided loans with low equity requirements and the Michigan Works Association helped me hire employees to sustain and grow my business. More recently, the Michigan Brownfield Redevelopment Program has provided funds to help me clean up sites for new development. The support I found in Detroit allowed me to thrive in America. That access to resources is why the bipartisan nonprofit New American Economy just ranked Detroit 10th in the nation on its Cities Index, an analysis of how well immigrants are integrating and succeeding in the nation’s 100 largest cities. Specifically, we received perfect scores in economic empowerment, job opportunities and livability. I was 17 when I arrived in Detroit. In Iraq, my family was persecuted for our Chaldean Christian faith, so my brother, who was here working as a drugstore owner, sponsored my visa. I knew no English, but ESL classes at a local community college helped me become fluent. I eventually earned my GED, and was accepted at the University of Michigan-Dearborn. I graduated with a degree in science technology and became a pilot for Northwest Airlines before launching my own hotel business, Elite Hospitality Group. Throughout this time, Detroit residents welcomed me. I know many immigrants who experienced similar

OTHER VOICES Basil Bacall

hospitality and have achieved great success here. In Detroit, immigrants are 35.8 percent more likely to be entrepreneurs than U.S.-born residents, according to the NAE. A number of

my former immigrant employees have gone on to start their own businesses. One now owns a deli in downtown Lansing and employs 10 people. Another, who started in housekeeping, now owns a convenience store and employs three people. I’m proud of these successes — and of how well Detroit scored on the Cities Index — but I know we have more work to do. Welcoming more immigrants to our region would benefit our construction and hospitality industries, including my own business. I’m currently struggling to fill dozens of open positions, a shortage that often forces me to delay projects by months

and can cost me hundreds of thousands of dollars in interest and lost revenue. My housekeeping and maintenance teams are also shorthanded. Immigrants could help fill all these positions. If I complete a project on time, I can make my loan payments promptly and hire more employees, many of whom are U.S.-born. If I’m late on a project, I often have to delay hiring 25-30 higher-skilled employees on the hospitality side. These are good jobs, which could benefit many families in Detroit and across Michigan. We need to support organizations such as Global Detroit, which is a re-

gional economic development engine that leverages the talent, ingenuity and entrepreneurial spirit of immigrants in metro Detroit to power the regional economy. Closing our doors to immigrants could be detrimental to Detroit. In these uncertain times for immigrants, I hope our city will continue to welcome and support foreign-born newcomers as it has done for me and so many others. Basil Bacall is founder and CEO of Elite Hospitality Group, a hotel development and management firm based in Bloomfield Hills.

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FOCUS REAL ESTATE

KIRK PINHO/CRAIN’S DETROIT BUSINESS

The Renaissance Center sits on Detroit’s riverfront and has 5.5 million square feet total across office, retail and hotel space.

What does Detroit’s renaissance mean for the Renaissance Center? By Kirk Pinho kpinho@crain.com

The state’s most prominent office complex is at a crossroads. With 5.5 million square feet total across office, retail and hotel space, the Renaissance Center on Detroit’s riverfront sits in a downtown that is rapidly being reinvented and redefined by billionaires. It is a city within a city — it literally has its own ZIP code and post office — and an attimes perplexing labyrinth that even has a mobile app to help visitors navigate. And now the Detroit riverfront is teeming with development activity, ranging from new apartments and hotel and art space to the east and large public parks and a to-be-demolished Joe Louis Arena to the west. The popular Detroit RiverWalk is at its doorstep. But it faces wolves on its front door, too. It has large blocks of unused space, hundreds of thousands of square feet, although the property is healthi-

Claudia Killeen: Riverfront attracts workers.

Edward Wujek: Every floor has great view.

Need to know

JJRenCen is seen as sequestered from new construction downtown JJMore than 1 million square feet of new office space planned for the other side of Jefferson JJRenCen rates more affordable and parking is ample, brokers say

ly occupied overall at north of 80 percent. Meanwhile, more than 1 million square feet of new office space is planned on the other side of Jeffer-

son Avenue both by billionaire Dan Gilbert and the dynastic Ilitch family, albeit available to tenants at substantially higher leasing rates. That’s not including planned renovations of existing space in rehabilitated buildings. The more than 80-member team from Los Angeles-based CBRE Inc. responsible for leasing and managing the behemoth complex has been active, peeling off 106,000 square feet of new and renewed leasing in 201718, said Edward Wujek, senior vice president of advisory and transaction services for CBRE. One of the leasing strategies? Simply what you can see with your eyes. “Because we aren’t wedged into the central business district with a bunch of other buildings, every floor has a great view,” he said, adding that parking is ample at the complex that was built in the 1970s and early 1980s. The team plays up the complex’s proximity to the water, multitude of retail tenants and other ame-

nities to lure new occupants. In addition, said Claudia Killeen, manager of General Motors Co. real estate, much of the activity that makes Campus Martius attractive to younger office workers is replicated on the riverfront. “We have Eastern Market do a mini-market out on the plaza. We are doing a lot of things that it does,” she said. “We have so many restaurants and food court tenants.” It has faced its knocks over the years, particularly because of its seemingly sequestered nature, separated from the rest of the city by a busy thoroughfare, and its layout that leaves many visitors asking for directions. It’s undergone hundreds of millions of dollars in renovations since General Motors Co. purchased it more than 20 years ago, with the automaker making it more inviting to the public. “My biggest challenge is to get prospective tenants in because they be-

lieve it’s an island unto itself,” said Sam Munaco, president of Southfield-based brokerage firm Advocate Commercial Real Estate Advisors of Michigan LLC. “Once I get them in the door, their eyes open up. The services, the amenities, the hotel — it’s world-class.”

More options downtown Still, the competition for tenants will be fierce. Gilbert is expected to kick off construction next month on the $830 million Monroe Blocks development, which includes a 35-story office tower with 818,000 square feet of space. Another 363,000 square feet is planned in the $909 million redevelopment of the J.L. Hudson’s department store site on Woodward between Grand River and Gratiot, which is slated to include a tower that dwarfs the RenCen’s 727-foot hotel by nearly 200 feet. SEE RENCEN, PAGE 11

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SPECIAL REPORT: REAL ESTATE

Nothing you throw out at the RenCen goes to a landfill

RENCEN FROM PAGE 10

In addition, Chemical Bank has a new 20-story high-rise slated for Woodward that will serve as its corporate headquarters but also have other office space, and the Ilitch family has several renovations of early 20th century buildings planned for office use like the Detroit Life Building and the former Detroit Creamery Co. building, for example. “It’s not going to lose its relevance or go away,” said Marc Nassif, a Detroit real estate expert who is senior managing director and partner of the Detroit office of BBG Inc., a leading national appraisal firm. “The new product coming online is going to be real significant competition to it. Unless somebody has a tangible reason to be tied to GM, it might be an uphill process. But the flip side to it is it’s stable, Class A or high Class B office product. It’s not trendy or riding waves on its loft office space.” The complex has lost tenants, most notably Ally Financial, which moved to the other side of Jefferson into what is now Ally Financial Center, formerly One Detroit Center. The Ally Financial space in the RenCen, totaling about 300,000 square feet, remains largely unfilled, although some of it has been back-filled, Wujek said. In addition, last year GM put the brakes on an eye-catching portion of a 120,000-square-foot addition and renovation, the 70-foot by 80-foot LED wall that was to encase the Detroit People Mover station at the complex, which was built in the 1970s and early 1980s. Announced by Henry Ford II in 1973, the Renaissance Center’s first tower opened in 1976, and by the following year, four towers around a central 73-story, 1,329-room hotel tower were fully constructed and opened, according to the RenCen’s website. The smaller towers, 500 and 600, developed through a separate venture by subsidiaries of Ford Motor Co. Land Development Corp., opened in 1981. GM purchased the Renaissance Center as its global headquarters in 1996 and by 2004 had completed $500 million in renovations, according to its website.

Sam Munaco: Price points vastly different.

By Kirk Pinho kpinho@crain.com

Michael Reilly: Have to look at a lot of factors.

If you throw something away at the Renaissance Center, it doesn’t go to a landfill. Ever. About 5 million pounds of trash from the 5.5 million-square-foot complex on the Detroit riverfront are recycled, reused or converted into energy, according to the property’s website. Paper is shredded and baled, eventually becoming things like cereal boxes and tissue paper. Plastic and batteries are recycled. Ditto with cardboard. Bottles and cans are donated to nonprofits. Food scraps from the more than two dozen restaurants are composted in rooftop gardens. Those are among the things that General Motors Co., the owner of the iconic property, does to limit its environmental footprint at the state’s largest office complex, which became landfill-free on Nov. 1, 2013, said Lauren Smith, strategic manager of sustainable materials management for the Detroit-based automaker. “It’s a lot to wrangle. There’s 14,000 people in the property and they have managed to set up different recycling systems as well as composting throughout the building,” she said.

rector in the Birmingham office of Integra Realty Resources, an appraisal firm. “That delta is significant to the typical user that is about 15,000 square foot in size. That’s about $225,000 per year or more in rent, and over a fiveyear lease, that’s about a $1 million more difference.” RenCen representatives remain optimistic when talking about the complex’s future given the new office space expected in the central business district. “It’s a few years down the line,” said Michael Reilly, asset services director for CBRE, of the new Hudson’s and Monroe Blocks office product. “You have to look at a lot of factors. They don’t have this view. Are you looking for brand new glistening office space near a stadium? OK, go and be blessed. We’re not going to be everything to everybody. They are gorgeous buildings and you could put them in New York, Chicago or Boston.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

GENERAL MOTORS

A rooftop garden near the Renaissance Center.

She also said that in addition to the environmental impact, there is also a business case for the program. “It also helps recognize top-line growth and attract new talent whose environmental values really align with GM, as well as a different subset of investors and shareholders,” Smith said. “There is some cost savings as well. We have generated about $1 billion in revenue from our different management systems and recycling.” The RenCen is one of 142 GM sites that is landfill free, according to Smith. But it is certainly not the only

property locally whose owners have become more considerate of their environmental footprint, said Janet Langlois, executive director of the Building Owners and Managers Association of Metropolitan Detroit, which represents landlords and property managers. “Many have high impact recycling strategies in their operations,” said Langlois. “Companies have become more focused on zero waste to landfill and that is the case throughout the GM facilities.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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Competitive rates The key factor will likely come down to rents, real estate experts said. Price-conscious firms may prefer the less-expensive RenCen, which Wujek said leases for an asking rate of $23.50 per square foot. New construction by Gilbert or the Ilitches is being quoted at $40 to $45 per square foot per office space, sources have said. “The RenCen is 50 percent of that,” said Steve Morris, managing principal of Farmington Hills-based real estate firm Axis Advisors LLC and an adjunct professor at the University of Michigan’s Stephen M. Ross School of Business. “The price points are going to be vastly different. You can make a deal for less than $25 gross at the RenCen, and you’re looking at almost $20 more per square foot for new construction,” Munaco said. That adds up to real money, said Anthony Sanna, senior managing di-

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Tony Hawk launches consulting agency in Detroit By Kurt Nagl knagl@crain.com

Tony Hawk is going from ollies and kickflips to brand building and creative consultancy. The skateboarder-turned-entrepreneur is co-founder of a new brand agency called D/CAL in downtown Detroit and California. The business, billed as a “hybrid brand consultancy and creative agency,” has an office on the 38th floor of the Guardian Building at 500 Griswold St. While the popularity of skateboarding has generally declined in recent years, Hawk has remained a household name since first captivating audiences in the late 1990s. D/ CAL is pitching itself as an agency that can help companies achieve similar brand endurance. “There’s a lot of hand-wringing around what the big problems are (for companies) — is it more about ideas and big data, is it more about in-house vs. agency partners?” said Adam Wilson, co-founder of the new agency. “Tony always felt that the large issue that needs to be solved is brand relevancy.” Launched last month, the agency’s client list so far includes Berkley-based juice maker Drought, Commerce Township-based health and wellness products manufacturer HoMedics Inc., Chicago-based government tech app provider CityBase and the Tony Hawk Foundation in San Diego. Wilson, who was director of brand experience for Dearborn-based Carhartt Inc., is based at the Detroit office with co-founder and creative veteran Ryan Maconochie. They are joined by account services director Katherine Huber. Hawk and Jared Prindle, the fourth co-founder and director of the Hawk-established 900 Films production company, will work out of the San Diego-based Tony Hawk Inc. offices. Hawk will work mostly

JOE GALL

D/CAL co-founders Ryan Maconochie (left), Jared Prindle, Tony Hawk and Adam Wilson with Katherine Huber, director of client services, atop the Guardian Building in downtown Detroit, where they have an office for their new agency.

Need to know

JJD/CAL launches with offices in

downtown Detroit and San Diego JJClients include Drought and Tony Hawk Foundation JJOffice is on 38th floor of Guardian Building

from the West Coast but will likely work in the Detroit office when he’s staying at his home in Detroit’s Woodbridge neighborhood or when

his nonprofit work brings him to the city. Wilson and Maconochie, skateboard enthusiasts who’ve known each other 20 years through working in the same industry, met Hawk a few times throughout the years at various skateboarding events. The most memorable, Wilson said, was when Hawk showed up with his Birdhouse Skateboards crew to skate in a mutual buddy’s drained swimming pool in Northville last year.

“Would you believe pros from all over showed up?” Wilson said. “I cooked pork loin for the entire Birdhouse crew.” The most pivotal encounter may have been at a launch party last year for Hawk’s temporary Wayfinding skatepark downtown. The wheels had been turning for a brand consultation agency, and Hawk gave the thumbs up shortly after. “I’ve worked with many brands and their agencies over the years

and even as a relative outsider looking in, I understand the challenges between clients and agencies. Our approach is unique, with an emphasis on authenticity,” Hawk said in a news release. The agency is divided into four main areas: brand consultancy for “triangulating the problem,” a cultural advisory board for “street-level here and now insights,” a creator network that focuses on “collaboration with next-generation creators” and specialized partners, which include the in-house team at Hawk’s foundation and Detroit Labs software company, according to a news release. Wilson said the agency provides a platform of creative solutions for a wide range of potential clients depending on individual needs, but it does not do media planning or buying. While the rise of digital media and the trend of bringing work inhouse has shaken the branding and advertising industry, companies face the same battle of staying relevant to sell products. Wilson said he thinks the solution is an agency that deploys a strategy tailored to each company. “What we’re trying to do is avoid solving the problem through the army you already have and the paycheck you have to cut behind you,” Wilson said. “It’s a lot more honest and pure if you can go in without all of that being there in the first place.” Wilson declined to offer any revenue projections, but said the goal is to eventually take on more employees and clients from a range of industries. “The easy answer is (we are targeting) any client that has a strong desire to explore what’s in the way of the brand being more culturally relevant and meaningful,” he said. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

Michigan Restaurant, hospitality associations to merge By Annalise Frank afrank@crain.com

Michigan’s restaurant and hotel associations plan to merge to create one new group called the Michigan Restaurant & Lodging Association. The change is also taking place locally: The recently relaunched Detroit Restaurant Association, a local chapter of the statewide organization, will rebrand as the Detroit Restaurant & Lodging Association. The Michigan Restaurant Association and Check In Michigan announced Wednesday morning that their boards have approved a letter of intent to merge the hotel association into the restaurant association. They expect to finalize the agreement in 2019 and launch April 1, but they will start doing business immediately as the new entity, they said in a news release. The Michigan Restaurant & Lodging Association will make its headquarters at the home of the statewide restaurant association in Lansing. The restaurant association will assume all assets of Check In Michigan. “This proposed merger feels like the natural evolution of our two organizations,” Justin Winslow, presi-

“This proposed merger feels like the natural evolution of our two organizations.” Justin Winslow, president and CEO of the Michigan Restaurant Association

Need to know

JJMichigan Restaurant Association and Check In Michigan now operate together JJTogether industries employ 595,000 in Michigan JJDetroit Restaurant Association also rebranding to include hotels

dent and CEO of the Michigan Restaurant Association, said in the release. “We already share many members, legislative priorities and industry challenges. Through this proposed merger, we have the opportunity to elevate the voice of the hospitality industry in Lansing and in Washington D.C., while expanding upon the value and vision we already provide for our members.” Food service and hospitality associations operate jointly in the majority of states, Winslow told Crain’s in

an email. Winslow will serve in the same role for the MRLA. Deanna Richeson, president and CEO of Check In Michigan, is being hired as a consultant “to ensure a smooth transition” in the merger of the two trade groups, Winslow said. The Michigan Restaurant Association had a staff of 20 and Check In Michigan had two, Winslow said in an email. He did not answer a question on staffing changes under the merger. On the merged association’s executive board are, according to its website: J Todd Callewaert, chairman; the Island House Hotel on Mackinac Island J Dave Dittenber, vice chairman; DRI Enterprises in Bay City J Andy French, treasurer; Aubree’s Flagstar in Ypsilanti J Brad Keen, past chairman; Boyne Resorts in Harbor Springs J Winslow of the Michigan Restaurant Association Lansing-based Check In Michigan was previously the Michigan Lodging and Tourism Association. It represented hospitality and tourism businesses, including those in-

volved with hotels and attractions around the state. It and the restaurant association have roles as advocates to politicians and the Legislature, as educators in their industries and assisting with recruitment and career development. The new entity represents more than 5,000 food and lodging establishments in Michigan. The state restaurant industry employs nearly 450,000 and takes in $16 billion in yearly sales. The state lodging industry employs 155,000 and reports $24 billion in sales. Check In Michigan reported revenue of $855,000 in 2017 and the Michigan Restaurant Association — along with its educational foundation and political action committee — takes in nearly $4 million yearly, Winslow said. The new MRLA expects to publish its 2019-20 legislative advocacy priorities early next year, according to its website. Priorities for 2017-18 included supporting the Pure Michigan tourism campaign; maintaining funding for ProStart, a nationwide high school restaurant and food service training program; and opposing mandatory paid leave legislation. The associations’ separate non-

profit educational foundations also intend to merge. The new philanthropic foundation will serve the needs of both industries, aiming to boost career and learning opportunities. In metro Detroit, the Detroit Restaurant & Lodging Association comes out of the Detroit Restaurant Association that was re-formed in 2017 by a group of Detroit restaurant owners after ceasing to exist around 50 years ago. It covers Oakland, Macomb and Wayne counties. Its board is made up mostly of Detroit restaurant and food business operators, according to its website. It is now seeking hotel operators as new members. “Hospitality has always been part of the broad focus of the (Detroit Restaurant Association),” Detroit Restaurant & Lodging Association Director Herasanna Richards said. “But especially as we see the hospitality industry growing in the city, the growth of hotels, hotels that have restaurant concepts ... a lot of it is intertwined to support that development and growth.” Annalise Frank: (313) 446-1630 Twitter: @annalise_frank

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

Henry Stanford, Varsity Randolph Agley, founder of Talon Automotive Group and former owner of F&M, dies co-founder, dies at 70 By Anisa Jibrell ajibrell@crain.com

By Anisa Jibrell ajibrell@crain.com

Henry “Hank” Stanford, who co-founded Varsity Automotive Group, died Nov. 9, the dealership group said. He was 70. The group, which includes Varsity Ford in Ann Arbor and Varsity Lincoln in Novi, was founded in 1981 by Stanford and his brother Lou Stanford. “Lou and Hank took a chance, risked everything, borrowed money from family and just kind of struck out on their own,” Matt Stanford, Henry’s nephew and Varsity Ford general manager, told Crain's. Henry Stanford’s daughter, April D’Antonio, said her father sold cars up until the day he died. “He was delivering cars, he changed his own plates,” Matt Stanford said. “He did own the dealership ... but he was a car salesman. He truly loved his customers; he had a huge customer base.” Henry Stanford’s son, Joe Stanford, a salesman at Varsity Ford, is “carrying on his father’s legacy” at the dealership, where they both worked, a news release said. Stanford is survived by his wife, Arlene; sons Jeff Stanford and Joe Stanford; daughter April D’Antonio; and

VARSITY AUTOMOTIVE GROUP

Henry “Hank” Stanford (right), with his son, Joe Stanford, who worked alongside him at Varsity Ford.

five grandchildren, who Matt Stanford said were “the light of Hank’s life.” Funeral services were Wednesday. Memorial donations may be made to the St. Anselm School Education Fund.

Randolph Agley, founder and chairman of Talon Group LLC and former owner of the former discount chain F&M, died Wednesday. He was 75. “He was a guy that was able to somehow strike the perfect balance ... of family, work, community and most important — fun,” longtime friend John Broad said. Broad met Agley in the 1990s through the Young Presidents Organization, an international network of young chief executives. Within each chapter there are several forums that consist of 10-12 members who meet monthly to discuss business, community and personal issues in confidence. Broad, Agley and the other members of their forum developed a strong bond and were members of the organization for the last 24 years. “When Randy spoke, we listened,” friend Greg Smith, CEO of New Center Stamping Inc. and another member of the forum, told Crain’s in an email. “We were very lucky as most men do not have this opportunity; we still today meet and we still today consider ourselves to be fortunate to have this environment,” said Bill Baer, another member of the forum and retired CEO of the Crown Group. Agley’s experience in investing, transaction sourcing and portfolio gov-

ernance spans 30 years, according to Bloomberg. After graduating from Sturgis High School, Agley went on to the University of Michigan where he earned bacheRandolph Agley: lor’s and master’s Struck a balance degrees from the in life. School of Business in 1964 and 1965, according to documents sent to Crain’s by Agley’s son, Jim. In 1965, Agley joined the Detroit office of Arthur Andersen and Co., an international accounting firm where he eventually worked his way up to a manager position, overseeing the small business division. “Randy was a stalwart of our group, very bright and always attuned to what was going on in the world and the economy,” Baer said. “He was such an entrepreneur as he bought or started many companies, always sharing the experience with us.” From there, Agley and his partner Michael Timmis purchased the original F&M Distributors Inc. discount retail store in Ferndale, the documents show, and the investment and management firm Talon LLC was born in 1973, of which Agley was chairman and CEO.

F&M Distributors was operating 119 stores when it filed for Chapter 11 bankruptcy in 1994, Crain’s reported. A year later, Drug Emporium Inc. of Powell, Ohio, purchased 26 stores in Detroit, Baltimore and Milwaukee. Through Talon, Agley bought majority ownership investments and operated industrial companies, such as real estate company Talon Development Group and Talon Automotive Group, a parts supplier based in Troy that makes products including zinc die-cast, automotive stampings and robotic handling equipment. The Grosse Pointe Farms resident served as a board member for the Detroit Regional Chamber, Detroit Institute of Arts, Detroit Renaissance Inc., National Symphony Orchestra and Barbara Ann Karmanos Cancer Institute. He also served as the finance chairman of the Michigan Republican Party and was nominated by former President Ronald Reagan and confirmed by the Senate in 1988 as a member of the St. Lawrence Seaway Development Corp., which operates and maintains the U.S. portion of the St. Lawrence Seaway. Agley is survived by his wife Judith; sons Jim and Joe; five grandchildren, and three great-grandchildren. Memorial donations can be made to the University of Michigan’s Randolph J. Agley Graduate Scholarship fund, which he established in 1989.

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BONUS DISTRIBUTION AT THE CHARITY PREVIEW, COBO CENTER AND LOCAL HOTELS For more information and to book your advertising space, contact Lisa Rudy at lrudy@crain.com AD CLOSE: NOV. 30 | PUBLISH DATE: JAN. 21 For more information and to book your advertising space, contact Lisa Rudy at lrudy@crain.com

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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 // N O V E M B E R 1 9 , 2 0 1 8

Manufacturing skills gap to worsen, study says By Kurt Nagl knagl@crain.com

The talent shortage that is vexing local employers and tamping down business despite a favorable economy is only going to get worse. That’s the thrust of a new skills gap study released Wednesday by Deloitte LLP and The Manufacturing Institute. In the study, the New York City-based consulting firm and the social impact arm of Washington, D.C.-based National Association of Manufacturers assert that a manufacturing skills gap jeopardizes more than $2.5 billion in GDP over the next decade. The shortage is projected to increase from about 488,000 jobs open today across the nation to as many as 2.4 million going unfilled from now until 2028, according to the study. That eclipses the 2 million vacant jobs between 2015 and 2025 that was projected in the group’s previous study. “Manufacturers in the United States are experiencing some of the highest levels of growth we’ve seen in decades, yet the industry seems unable to keep up with the resulting rebound in job growth,” Paul Wellener, vice chairman of Deloitte LLP, said in a written statement. The only upside is that it could be worse — the study finds that the central region of the county is experiencing fewer vacancies than other parts in jobs such as skilled and low-skilled production, engineering, software engineering and supply chain talent. The largest vacancy rate — 46 percent in skilled production positions — is the same across all regions of the country. Supply chain talent has the fewest empty jobs — 20 percent in the central region and 26 percent in other areas. In all, five out of 10 open jobs for skilled workers remain vacant due to the skills gap crisis, the study found.

LARRY PEPLIN FOR CRAIN’S

Auto parts giant Flex-N-Gate Corp. received more than 16,300 applications for about 500 positions at its new plant on Detroit’s east side to stamp and mold parts for the new Ford Ranger pickup truck.

Need to know

Deloitte study concludes manufacturing skills gap jeopardizes more than $2.5 billion in GDP J

J 2.4 million jobs expected to go unfilled from now until 2028 J Companies using variety of strategies to combat shortage

What’s causing the shortage is no mystery — the same problems continue to plague manufacturing. Negative perceptions of the industry, deficient technological skills amid the rise in automation and a large part of

the workforce set to retire are driving the labor shortage. In addition to the 2.4 million manufacturing jobs expected to be open in the next 10 years, there are another 2.69 million vacancies expected to be created by retiring workers in the same time frame, the study notes. “While the manufacturing industry today is thriving and optimistic, the sector’s workforce crisis seems to be casting a dark cloud over the future,” Carolyn Lee, executive director of The Manufacturing Institute, said in a written statement. “About 73 percent of manufacturers cite this crisis as

their top concern.” The study outlines a few strategies employers are using to combat the talent crisis, including: J Implementing learning and development programs to help transfer knowledge from retiring employees to incoming ones J Increasing hiring flexibility by being open to hire candidates with potential and strong competencies rather than factors such as years of experience J Embracing automation by investing in productivity-enhancing technologies

J Increasing wages and offering signing bonuses Locally and around the country, the talent gap extends beyond manufacturing to the service industry, retail and construction. Employers and labor groups are trying several ways to fill jobs, from looking past failed drug tests to participating in apprenticeship programs. The report is the fourth skills gap study conducted by Deloitte and The Manufacturing Institute.

Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

Cliff Bell’s owner to buy popular Cadieux Cafe By Kurt Nagl

Need to know

knagl@crain.com

Cadieux Cafe, the east side Detroit bar known for steaming mussels and feather bowling, is soon to be under new ownership. Paul Howard, co-owner of popular Detroit jazz club Cliff Bell’s, and local musician John Rutherford are purchasing the popular spot at 4300 Cadieux Road, according to an announcement last week. Effective Jan. 1, ownership will be transferred from the Devos family, which has maintained the former Belgian speakeasy’s “old-world charm and traditions” since 1962. Fret not, feather bowling won’t be going anywhere, and there’s a very good chance that mussels will stay on the menu, said exiting co-owner Ron Devos, who owns the business with his nephew Paul Misuraca. “Nervous, yes. Sad, yes. Relieved, yes. It’s a little bit of everything. We’ve been around for a long time, and we’re getting a little older, and we don’t have the capital to keep putting money into it,” 60-year-old Devos said. “We were looking for someone to take it off our hands.” Devos declined to reveal the purchase price. He said business is strong and selling was not a financial necessity. He said the new owners, to whom

JJBelgian-inspired former speakeasy

known for mussels and feather bowling JJIt's been owned by Devos family since 1962 JJLocal musician John Rutherford also part of new ownership

CADIEUX CAFE

Cadieux Cafe on Detroit’s east side has been owned by the Devos family since 1962.

he first spoke about selling the business three years ago, have the money for much-needed improvements to the parking lot, floor and other parts of the building. He’s not sure how much they plan to invest or the specifics on planned improvements. There’s a clause in the contract that says they have to keep the feather bowling and leagues going, though, and getting rid of it would be an unwise business de-

cision anyway, given its popularity and unique value, Devos said. Howard and Rutherford did not respond to requests for comment. Devos said the new owners have agreed to keep the cafe’s 25 or so employees and cooks. As far as he knows, the managers, including his son, Robert, will stay on to run the restaurant and bar. “We feel that John and Paul are the

perfect fit to keep our family’s Belgian legacy alive as well as usher in a new generation of traditions that will ensure the Cadieux Cafe’s place as an East Side mainstay for years to come,” said the news release announcing the sale. The cafe was founded in the 1930s by Belgian immigrants. It maintains an offering of a dozen-plus beers from Belgium and has hosted Belgian pastimes including pigeon racing, archery, darts and, most popularly, feather bowling, for which it operates regular leagues. Devos eventually bought the family business from his mom, and Misuraca became co-owner in 1989. Cliff Bell’s also traces its roots back to early immigrants and the pre-Prohibition era. The club closed in 1985 before being renovated and reopened in 2005 by Howard, Scott Lowell and Carolyn Howard. Paul Howard has his hands in several other popular Detroit bars and clubs, including ownership

stake in the Park Bar building, located in the same building as Cliff Bell’s, the Bronx Bar in Midtown and Queens Bar downtown. Rutherford, Howard’s partner in the Cadieux Cafe, is a local trombonist and founding member of the Motor City Horns, who joined Bob Seger and the Silver Bullet Band in 2006, according to his biography on the website of Brassjar Music, a boutique music production business he founded in 2000. Peter McGrath of Collier’s International brokered the deal. He declined to discuss terms of the purchase. Reaction to the sale has been a mixed bag. Some regulars have expressed worry over the storied establishment’s future, while employees new and old have largely supported the decision and expressed appreciation for being “part of the family,” Devos said. He said the current owners will stay on and help with the transition for as long as the new owners need. Devos looks forward to days when he can come into the cafe as a regular patron and muse about the “good run” he and his family had there. “I grew up here,” he said. “I lived in the building since I was 4 years old and obviously moved out eventually. I still come in and think of my mom in the mornings when I have my coffee.”

BE ON THE

LOOKOUT FOR THESE UPCOMING

NOMINATIONS PROGRAMS Do you know a 20-something who is someone to watch? Crain's 20 in their 20s recognition program seeks young professionals who are making their marks in the region. This awards program recognizes the hard work of local rising stars and further propels their careers.

2019

Since 1991, Crain's Detroit Business has gathered 40 of the community's overachievers for a special salute. Past winners have started companies, found success at a young age, established businesses and made nonprofits stronger.

For the seventh year, Crain’s will recognize the Cool Places to Work — companies that, according to their employees, go above and beyond in putting a focus on workplace culture.

Health Care Heroes honors top-notch medical innovators and patient advocates dedicated to saving lives or improving access to care. Winners are selected in multiple categories.

Crain’s new Notable Women series honors women in the state who are making an impact in a variety of industries. 2019 includes Notable Women programs focusing on STEM, education and law.

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

DEALS & DETAILS MERGERS & EXPANSIONS  Red Effect Infrared Fitness, Birmingham, a fitness franchise that uses infrared heat, has new franchise owners in Michigan, Virginia, California, South Carolina, Oklahoma, Florida and Ohio, including planned Michigan locations in Allen Park, Woodhaven, Ann Arbor, Rochester, Plymouth and Detroit. Website: redeffectfitness.net

GRANTS  Impact100 Oakland County, Birmingham, a woman’s philanthropic group, has awarded a $90,000 grant each to Common Ground, Huron-Clinton Metroparks and The Rainbow Connection. Common Ground, Bloomfield Hills, will use its grant to support its 24/7 resource and crisis helpline text and chat feature. Huron-Clinton Metroparks Foundation, Brighton, will use its grant to support its Seeding a Green Future-Engaging Low-Income Students in STEM through Sustainable Agriculture program. The Rainbow Connection, Rochester, will use its grant to support The Rainbow Connection Impact Kits for families experiencing a child facing a life-threatening medical condition and difficulty meeting basic living expenses. Website: impact100oaklandcounty.org

NEW PRODUCTS  Continuity Programs Inc., Walled Lake, a real estate software company, has launched MyLeadDashboard, an automated real estate marketing platform that includes customer relationship manage-

ment, client follow-up programs and lead generation. Website: continuityprograms.com  Gettees, Sterling Heights, a garment manufacturer, is now offering women’s T-shirts. Website: gettees. us  Destaco, Auburn Hills, supplier of automation, workholding and containment products, is launching TCC-2E Series Tolerance Compensation Clamps that are designed for welding and assembly applications that require the clamping of components of differing thicknesses or tighter tolerances. Website: destaco. com  Meritor Inc., Troy, a commercial truck supplier, has made optional hydraulic actuation available on ELSA disc brakes for applications requiring hydraulic disc brake variants. Also, Meritor has a new MX610 front-drive and MZ-610 tridem rear axle for multiple severe-duty applications. Website: meritor.com  Bollinger Motors, Ferndale, has introduced an all-electric, all-wheel drive B2 pickup truck. Website: bollingermotors.com  LIFT — Lightweight Innovations for Tomorrow, Detroit, a manufacturing consortium, aided Lifeline Firehose LLC, Lansing, a fire equipment manufacturer, with the production of a technology that makes it possible for a firehose to deliver breathable air and water/foam simultaneously. The technology, being launched on a Grand Ledge Area Fire Department truck in Grand Ledge, allows firefighters to battle fires longer, as well as get air to downed personnel and victims. Website: lift.technology, lifelinefirehose.com  MC3 Cardiopulmonary, Dexter, a

SPOTLIGHT medical equipment manufacturer, launched the Crescent Jugular Dual Lumen Catheter, the first such device cleared by the Food and Drug Administration for extracorporeal membrane oxygenation in the United States. Website: mc3corp.com  Gravity Software LLC, Detroit, a software company, released version 5 of its accounting software to include a bill of materials for light manufacturing and value-added taxes for international users. Website: go-gravity.com  Plex Systems Inc., Troy, a software company, released new products and upgrades including: an interface for business management transactions; a program for engineering change requests; an upgrade for report design; a program that makes it easy to understand which supplemental attachments a user should print in addition to main shipping documents; a multi-entity truck shipping module and a Plex Mobile app. Website: plex.com  MMS Holdings Inc., Canton Township, a contract research organization, assisted Vivozon Inc., Seoul, South Korea, a drug discovery company in achieving a fast track designation from the Food and Drug Administration for VVZ-149, a non-opioid pain killer. Websites: mmsholdings.com, vivozon.com  BorgWarner Inc., Auburn Hills, an automotive supplier, introduced a new commercial vehicle starter, the Delco Remy 31MT, for medium-duty commercial vehicles such as delivery vans, emergency vehicles and school buses. Website: borgwarner. com Submit Deals & Details items to cdbdepartments@crain.com.

Mott Foundation CEO passing reins to son

The Charles Stewart Mott Foundation has selected the great-grandson of its founder to be chief executive, The Associated Press reported. Longtime CEO William White announced last week he is passing the leadership reins to his son, Ridgway. The younger White White has been president of the Flint-based foundation since 2015. William White, who joined the foundation in 1969, said in a message he will serve without pay as board chairman. His late wife, Claire Mott White, was a granddaughter of Charles Stewart Mott, who launched the philanthropic organization in 1926. The Mott Foundation committed up to $100 million over five years to help Flint recover from its lead-contaminated water crisis.

Macomb County names new deputy exec

Vicki Wolber, who forged a career in emergency management and public safety, started a new role last Monday as Macomb County’s deputy county executive. Wolber, appointed by County Executive Mark Hackel, takes on a role that has been vacant for nearly a year. Kathy Bartz, who took the role in 2015 and left the county in February, was the most recent in the job. Hackel said he and Wolber have known each other for two decades, and he knew for several months that

he wanted her in the job. He waited to appoint her until after the election so that the job was secure, he said. “I wanted to be very calculative in who I selected for this highly Wolber recognized position,” he said. “It was a combination of making sure we have the right person and considering what we are trying to do in the organization.” Wolber was hired as assistant director of the county’s emergency management and communications department in 2000 and promoted to director in 2007. She earned a bachelor’s degree in business administration from Walsh College.

Millendo Therapeutics names new CFO

Ann Arbor-based drugmaker Millendo Therapeutics Inc. has named Louis Arcudi III as CFO, effective immediately, the biotechnology company announced last week. “I look forward to contributing to the team to help bring these important therapies to patients in need, while creating value for shareholders,” Arcudi said in a news release. Arcudi, who brings more than two decades of finance and operational experience, most recently served as senior vice president of operations and CFO at Cambridge, Mass.based cancer drugmaker Idera Pharmaceuticals, the release said, a post he held for 11 years. Before that, he was vice president of finance and administration for Peptimmune Inc., a Somerville, Mass.-based biotech company.

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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 or email dstein@crain.com. ARCHITECTURE

FINANCE

NONPROFIT

Gibbs Planning Group

Michigan CFO Associates

Mariners’ Church of Detroit

CFRE

Robert Gibbs, AICP, ASLA has been appointed by the National Endowment for the Arts to serve as an adviser to the Mayors’ Institute on City Design. Gibbs will be providing urban planning assistance for U.S. mayors to address their cities downtown challenges. Gibbs teaches at Harvard University and has been named one of the 100 most influential urban planners of the past century. Gibbs was recently honored by the Clinton Presidential Library and as a distinguished alumni and by Oakland University.

Rick DiBartolomeo, CPA, joins Michigan CFO Associates as a Consulting CFO. Rick is hands-on and result-driven with deep experience in finance, accounting & operations in both public accounting and private industry. Rick works side-by-side with business owners providing financial and operational leadership to reduce risk, increase profitability, and maximize cash flow. Rick is active in the community serving on numerous charitable boards, foundations and is also a past president of the DAC.

Rev. Jeffrey Hubbard has been named Rector of Mariners’ Church of Detroit, one of the city’s oldest parishes on the Detroit riverfront. He’s just the 19th full-time rector in the church’s 176 year history. An independent church recognized as a house of prayer for all people, Mariners’ welcomes visitors and members from all denominations and from communities throughout metro Detroit. Fr. Jeff’s goal is to expand the church’s reach, especially with those who are new to downtown Detroit.

Giuseppe “Joe” Rizza, CFRE, long-time Michigan fundraiser, receives Outstanding Fundraising Professional Award, Association of Fundraising Professionals New Mexico. A fundraiser for 35 years, Joe is President of Presbyterian Healthcare Foundation, directing fundraising for Presbyterian Healthcare Services, largest New Mexico nonprofit healthcare system. Previously, he was VP-Campaigns, Beaumont Health, Chief Development Officer Walsh College and Judson Center, Dir. Annual Funds, U of D-Mercy.

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

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

CALENDAR MONDAY, NOV. 19 Speed of the Game: A Conversation with Adam Silver and Dan Gilbert on the World of Business and Basketball. 3:30-5:30 p.m. Detroit Economic Club. A conversation with National Basketball Association Commissioner Adam Silver and Rock Ventures/Quicken Loans Founder and Chairman Dan Gilbert. MotorCity Casino Hotel. $45 members, $55 guests of members. Website: econclub.org

UPCOMING EVENTS Translating the Trade Situation: Tariffs, NAFTA 2.0 and What It All Means. 5-7:30 p.m. Nov. 26. Turnaround Management Association. The dynamics of trade are changing rapidly. What are the implications for business? How are companies dealing with these new realities? What could they mean for business in the future? Moderator: Tracy Arceci, senior vice president, Bank of America Business Capital, Bank of America Merril Lynch. Panelists: Jeoff Burris, Advance Purchasing Dynamics; Stephen Tapley, AlixPartners and Rick Walawender, Miller, Canfield, Paddock and Stone. Dickinson Wright, Detroit. $30 members; $50 nonmembers. Contact: Mary Anne LaMarre, email: Detroit@turnaround.org; phone: (313) 910-5066. UHY LLP Annual Construction Update. 7-11:45 a.m. Nov. 28. A tax reform update, a look at opportunity zone funds and a construction outlook. Speakers include: Diane Menzo, accounting manager, Flagstar Bank; John Gallo, principal, Tax, UHY LLP; Gina Staudacher, partner, Howard and Howard Attorneys; Mary LeFevre, regional director of business development, The Christman Co.; Anthony Bango, vice president of project planning, The Christman Co. and Jim Like, vice president, Christman Constructors Inc. Detroit Athletic Club. Free. Contact: Jessica Labut, email: jlabut@uhy-us.com; phone: (586) 843-2507. Franchising as a Career, an Investment, or Both. 5:30-7:30 p.m. Nov. 28. Includes franchising basics, the array of categories and investment levels available, how to match vision with viable choices and conducting proper due diligence. Speaker: Mark Cory, owner of FranNet Michigan. Law Offices of Jaffe Raitt Heuer & Weiss, Southfield. Free; registration required. Contact: Mark Cory, email: mcory@frannet.com; phone: (313) 821-5060. 31st Annual Butzel Long Labor, Employment, Benefits and Immigration Law Forum. 7 a.m.-3 p.m. Nov. 29. Presenters: Attorneys practicing in Butzel Long’s labor, employment, benefits and immigration law areas. Investigations in the Age of #MeToo special keynote speaker: Barbara McQuade, former United States AtMcQuade torney for the Eastern District of Michigan, University of Michigan law professor and

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MSNBC legal analyst. Workshop topics include: retention and transition strategies; employee benefits; topics in business immigration law; understanding wage and equal pay issues; arbitration vs. litigation; the National Labor Relations Act; the FMLA; employer immigration compliance and worksite enforcement; dealing with a mentally and emotionally challenged employee; workplace investigations; protecting trade secrets and effective noncompete agreements and service/emotional support animals and other ADA accommodation issues. MotorCity Casino Hotel Detroit. $190. Contact: Nairi Bagdasarian, email: bagdasarian@butzel.com; phone: (313) 225-7012. 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 Market Research Basics. 9-11:30 a.m. Dec. 5. Oakland County One Stop Shop. Workshop helps find customers, identify competitors, perform competitive analysis, identify new site locations, target direct mail campaigns, reveal untapped markets and expand to new and appropriate markets. Oakland County Executive Building Waterford Township. Free; registration required. Contact: Oakland County One Stop Shop, email: smallbusiness@oakgov.com; phone: (248) 858-0783. 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, Toyota Motor North America, will discuss how Toyota is managing the balance of present and promise. Moderator: John Lentz McElroy of Autoline Detroit. Westin Book Cadillac. $45 members, $55 guests of members. Website: econclub.org Fireside Chat with Ramzi Hermiz. 5-8 p.m. Dec. 6. Marketing and Sales Executives of Detroit. Q&A with automotive supplier Shiloh Industries CEO Ramzi Hermiz. Craft Breww City, Farmington Hills. $100 current MSED members; $125 nonmembers. Phone (248) 643-6540. Website: msedetroit.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.

CLASSIFIEDS

To place your listing, contact Katherine Rozek at 313-446-0485 or email krozek@crain.com www.crainsdetroit.com/classifieds POSITIONS AVAILABLE

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CRAIN’S READERS HAVE AN AVERAGE NET WORTH OF $1.6 MILLION

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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 // N O V E M B E R 1 9 , 2 0 1 8

AMAZON FROM PAGE 3

And this time, the conversation didn’t revolve entirely around how fat of a tax subsidy check could Michigan offer (though it took months of prodding by Crain’s to get state officials to cough up that $4 billion figure). Instead, there was a robust debate about Detroit’s ability to meet Amazon’s needs in attracting talent. Suddenly, quality of life mattered. The availability of bright minds mattered. And public transportation for those bright minds to get to work mattered. At the Woodward Avenue headquarters of Dan Gilbert’s Bedrock LLC, which served as a central clearinghouse for Detroit’s Amazon bid, officials strategized in a “war room” over how to overcome Detroit and Michigan’s pitfalls. To address the talent shortage, they drew a circle within a five-hour drive of Detroit to show the top-tier universities that could be tapped for talent from as far away as Pittsburgh, Chicago and Toronto. In pulling together a bid committee, those involved connected dots that no one had previously taken time to connect before. Like the fact that Amazon’s Seattle headquarters is the No. 1 destination for University of Michigan’s computer science and engineering graduates. Amazon also has hired more MBA graduates from Ann Arbor since 2010 than from any other university in the country, according to UM President Mark Schlissel. Those were data points that some leaders at UM were unaware of until the Amazon bid committee went searching for positive talking points.

SPHINX FROM PAGE 3

It’s always been important that Sphinx and its work not be about affirmative action but rather about equal opportunity and merit, Dworkin said. “We are better, richer, more creative, more inclusive, more sustainable if we are relevant. To me, relevance equals inclusivity,” she said.

By the numbers Just 2.7 percent of the musicians in American orchestras were black and Latinx when Sphinx launched 22 years ago, according to statistics it collected. By 2016, when it celebrated its 20th anniversary, that number had risen to 4.3 percent. A 2016 study from the League of American Orchestras showed a similar trend for all nonwhite musicians. The study released in the fall 2016 reported similar, albeit rosier, findings on overall diversity in orchestras. The number of nonwhite members in American orchestras increased from 3.4 percent in 1980 to 14.2 percent in 2014, according to the study, “Racial/Ethnic and Gender Diversity in the Orchestra Field.” But the proportion of nonwhite musicians and of black and Latinx musicians remained particularly low, and the wider orchestra field , including conductors, executives, staff, and board members, also remained predominantly white, according to the study. The proportion of Latinx musicians in American orchestras had increased to just 2.5 percent by 2014

Detroit’s bid for the second Amazon headquarters included a 242-page spiral-bound book.

And until the Amazon opportunity came along, expanding metro Detroit’s regional transit system was a philosophical argument that proponents did a lousy job of explaining in the failed 2016 ballot campaign. Amazon company officials told metro Detroit leaders in no uncertain terms that our fractured and limited system was a serious shortcoming in our bid for their business (Foxconn company officials also were fixated on bus routes, according to Duggan). That ignited a debate between Detroit and its suburbs over what kind of bus system we should have to move

people to jobs and how we should pay for it — a debate that’s far from settled. The Suburban Mobility Authority for Regional Transportation (SMART) and the Detroit Department of Transportation (DDOT) have both upped their games since the Amazon bid, accelerating efforts to have a seamless universal fare card system and expanding limited-stop routes on Woodward, Gratiot and Michigan avenues. SMART also has added its FAST bus service from downtown to Detroit Metropolitan Airport that embarrassingly didn’t exist when the authors of

Detroit’s Amazon bid had to scratch it into the plan. Before the Amazon bid, a group of the region’s top corporate CEOs had already been quietly mapping out strategies to enhance mass transit and better market Southeast Michigan for business relocation and expansion opportunities. Detroit’s Amazon proposal was pulled together in six short weeks, as employees at Gilbert’s Bedrock and outside consultants hired on the fly worked to put together a marketing package for metro Detroit that didn’t previously exist. They churned out a

from 1.8 percent by 2002, according to the study, while representation of black musicians continued to hover around 1.8 percent throughout the same period. “When the data is more closely examined, it is clear that the modest shifts towards diversity that we observe have been largely driven by Asian/Pacific Islander musicians,” the study noted. Nonwhite conductors increased from 15.7 percent in 2006 to 21 percent in 2016, and nonwhite music directors increased from 16.7 percent in 206 to 21.8 percent in 2016, according to the study. It did not break out the black and Latinx representation in those figures but noted top executives in the field are “overwhelmingly white.” Since 2006, the percentage of top executives from African American, Latino/Hispanic, Asian/Pacific Islander, American Indian/Alaskan Native and other nonwhite backgrounds has fluctuated between just 1.6 percent and 5.2 percent, according to the report.

Dworkin, professor of arts, leadership and entrepreneurship at the University of Michigan and the husband of Afa Dworkin, serving as senior adviser. Sphinx reported $7.8 million in income for 2017 and expenses totaling $5.9 million. It’s operating on a budget of just under $6 million this year. A $1.5 million grant from the Miami-based John S. and James L. Knight Foundation will fund the bulk of the first five years of the Leaders in Excellence, Arts and Diversity program. It will be focused on professionals in Detroit and 16 other cities where the foundation focuses its grant support, along with other cities like New York and Cleveland, Dworkin said. And it will seek emerging leaders looking to advance their personal and professional growth to produce impact in their communities and in the arts field as a whole. That could be musicians who dream of becoming a CEO, young budding entrepreneurs who want to make a difference in other leadership roles, such as the young founders of small startups, or people in junior roles at orchestras, Dworkin said. The LEAD program is free to participants and comes with a nominal stipend to cover travel to educational sessions and events, lodging and meals and a $1,000 stipend to help cover other incidentals while they take time off from jobs. Attendance at industry conferences such as those hosted by American Orchestras or Chamber Music America are also covered. The LEAD curriculum is still in development, Dworkin said. It will be finalized based on who the initial cohort is.

If it’s folks who already work primarily in the field in administrative capacities, they might not need fundamentals of nonprofit management, she said. They might need something along the lines of finance, development, networking or perhaps building a board or lessons in governance. “If it’s a mix, we’re going to look at the cross-section and create something as tailored as possible while also covering the basics,” she said. Fellows will also be assigned a year-round mentor, a leader nationally who can guide them in governance, leadership development, human resource management or whatever their goals are. “The mentor will help supplement their experience ... so they ultimately get more out of it than just this laidout curriculum,” Dworkin said. And “between the dean and their mentor and Sphinx, we’ll be able to find additional networks for them to access.” The cohort will meet for three- to four-day educational sessions the first year in the cities of Detroit, Miami, Cleveland and New York and participate in additional video sessions with the dean and the mentors throughout the year. “There’s a network of Sphinx alumni who are very interested in administrative careers,” she said. Sphinx has also asked the institutions hosting academy events, including the Juilliard School, Cleveland Institute of Music and New World Symphony in Miami, to help promote the LEAD program. And Dworkin, who teaches at Roosevelt University in Chicago during the summer, is promoting it among her students there.

The LEAD program To increase diverse leadership in the industry, Sphinx is collaborating with Stanford Thompson, a Sphinx alum and head of Play on, Philly!, a K-12, classical music education program, and with other national specialists in the filed to develop a twoyear leadership academy for classical musicians of color. Thompson, a recipient of Sphinx’s Medal of Excellence, will serve as dean of the new program and take the lead on developing the curriculum, with Sphinx founder Aaron

242-page spiral-bound book. “As we all stood back after the fact and said, ‘Look, if there’s any perfect demonstration of our need to be much better at having this information ready to go and available to respond to anything that comes into the region, this is a great example,’” said Gerry Anderson, chairman and CEO of DTE Energy Co., who served on the 60-member regional Amazon bid committee. Anderson leads a no-name group of CEOs that are in the middle of standing up a new regional economic development organization that will be set up to do just what Gilbert’s company did on the fly in marshaling the bid for Amazon HQ2. Before Amazon launched its HQ2 sweepstakes, the CEOs had been discussing forming the new business-attraction organization for a year, Anderson said. “The Amazon bid was definitely a punctuation of the need,” Anderson said in an interview. “This gave it a kick in the pants.” Since Amazon formally knocked Detroit out of the running in January, hardly a week has gone by in which business, civic and political leaders haven’t publicly discussed the lessons learned from the Amazon bid. The failure to win over Amazon was repeatedly talked about in the governor’s race this year, which means it can help guide Gov.-elect Gretchen Whitmer’s decsion-making on talent development, transit and business-attraction efforts in the new year. In many ways, the hard truths laid bare by Detroit’s failed Amazon bid were just the kick in the pants this region needed. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood Sphinx and Thompson have convened a national advisory panel of leaders of color and others who work in the classical music industry to provide feedback as the program is developed. “We learned from many orchestral partners and academic partners that there would be a great deal of interest “ in considering graduates of the program, Dworkin said. Sphinx also plans outreach with search firms, when the program takes off, to provide a roster of emerging leaders who would be ready for those kinds of leadership positions within orchestra, music schools and conservatories, she said. Sphinx is taking applications for the free program through Nov. 26. It expects to pick its first cohort in December and to launch the first cohort of 10 fellows in late January at SphinxConnect, an annual conference focused on diversity in the performing arts. Jesse Rosen, president and CEO of the League of American Orchestras, said the LEAD program will be a welcome complement to the league’s collaboration with Sphinx and the New World Symphony on the National Alliance for Audition Support, which works to increase diversity on the orchestral stage, and to the league’s own work facilitating networking and learning among African, Latinx, Asian, Arab and Native American orchestra administrators. “It’s critical for arts organizations to increase diversity, equity and inclusion throughout their institutions,” Rosen said. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

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POLE FEE FROM PAGE 1

In metro Detroit, officials estimate thousands of traffic signal poles and new poles in the right of way may be needed to build out a short-distance, wireless broadband network of antennas to support an emerging technology that could improve mobile internet access to streaming video and music and play a critical role in the deployment of self-driving cars. Oakland and Wayne counties are mounting a vigorous opposition to the legislation, contending Senate Bill 637 is a giveaway to multibillion-dollar companies and won’t come close to covering the cost county road agencies will shoulder in accommodating cell phone companies. “I don’t know about you, but it’s going to cost me more than $20 to drive somewhere and have them get out in the field, do all of that work and then write a report,” said Phil Bertolini, deputy county executive and chief information officer for Oakland County. David Lewis, president of AT&T Michigan, said the fee structure “provides a fair price and a new source of revenue for local governments” and still allows municipalities to charge wireless companies fees for applications, accessing the right-of-way and traffic pole. But the bill is silent on whether municipalities can levy additional fees, Kolar said. In Oakland County, which is in the midst of getting 250 small-cell antennas to support Sprint’s wireless network, each antenna requires an in-

“Standardizing the process and fees for small-cell deployment will allow Michigan to keep up with consumer demand and prepare our state for the innovative technologies, like 5G, of the future.” — David Lewis, president of AT&T Michigan

spection by a county-hired electrician as well as new paperwork to keep track of a wave of new permits for each installation, Kolar said. Each antenna also requires connecting the antenna to existing underground fiber optic cable, potentially leading to the disruption of easement landscaping, sidewalks, driveways and other infrastructure, Kolar said.

‘Arbitrary’ fee structure For Sprint Corp., the legislation could significantly reduce the lease payments the company has already agreed to pay Oakland’s road commission for small-cell antennas being installed at some intersections this month. The Overland Park, Kan.-based wireless giant is under contract with Naperville, Ill.-based Neo Network Development Inc. to lease 250 traffic poles for $1,250 each for the first build-out of a small-cell network in Michigan, according to Kolar. Oakland County’s road commission was poised to reap $1,000 annually for each installation, Kolar said. “This legislation would void our

contract with Sprint and go back to $20 per location,” he said. Khalil Rahal, assistant county executive for Wayne County, called the $20 lease rate “an arbitrary number that came out of nowhere.” “I don’t know that there’s a lot of science behind it,” Rahal said. “Honestly, we believe the free market ought to decide.” Wayne County had been negotiating a lease rate of $1,500 per traffic pole before the legislation started gaining traction in the Legislature. “We’re desperate for revenue, and we really think this could have been a revenue source for us,” Rahal said. “We ought to have control over our own rights of way, over our own assets." State Sen. Mike Nofs, sponsor of the bill, acknowledged that Oakland County’s contract would be voided by the fee structure in the legislation. Nofs, R-Battle Creek, said he picked the $20 annual lease rate for the betterment of cellphone customers, not the companies. “To me, it was always, we represent the customers or the citizens who elected us,” he said. “So I was just trying to keep their cost down as much

as I could to make it as affordable to as many people as I could.” Sprint is advocating for the legislation because municipalities have “widely varying” and “burdensome processes,” zoning regulations and fees for using rights of way for telecommunications equipment, company spokeswoman Yui Namiki said. “These issues lead to delays in network build-outs that would improve the wireless experience for our customers,” Namiki said in an email to Crain’s. “A uniform, predictable regulatory framework for small cells incents network operators to invest in critical 5G infrastructure.” AT&T’s Michigan president said the bill gives wireless carriers the same right to erect utility poles that electric, telephone and cable companies already have. “Standardizing the process and fees for small-cell deployment will allow Michigan to keep up with consumer demand and prepare our state for the innovative technologies, like 5G, of the future,” Lewis said.

Cities remain neutral Outstate legislators have been advocating for passage of the bill as a means of getting broadband wireless internet connections to rural and remote areas of the state. It’s a line of reasoning that Oakland County Executive L. Brooks Patterson’s administration has been challenging because the antennas have to be connected to underground fiber optic cable buried in road rights of way with other utility lines. “This whole industry is based on

density,” Bertolini said. “How are they going to do that in the middle of nowhere?” Nofs acknowledged there’s no requirement for wireless companies to deploy 5G technology to areas that lack broadband access. “Nowhere in the bill says that these cell companies will guarantee that the Upper Peninsula of Michigan or rural Michigan will have small-cell technology by a date certain,” Kolar said. Despite the opposition from the state’s two largest counties, the bill has not yet faced any major hurdles in the Legislature after clearing the state Senate in March 33-3. On Oct. 4, the House Energy Policy Committee advanced the bill to the House floor, teeing it up for the lameduck session that runs through Dec. 20. The Michigan Municipal League, a group that represents cities, has taken a neutral position on the bill after negotiating a series of changes, including a 40-foot cap on the height of new utility poles. “We just didn’t want it to be an absolute right for the industry to put these poles at whatever height they wanted,” John LaMacchia, assistant director of state and federal affairs for the Michigan Municipal League. The legislation also has exposed a division between counties and cities, which own and maintain different roads. “I think this thing’s got so much momentum, I’m not sure anybody’s going to be able to shift it at this point,” Bertolini said. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

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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 // N O V E M B E R 1 9 , 2 0 1 8

Miami-based investment firm buys Detroit property By Annalise Frank afrank@crain.com

A Miami-based international real estate investment firm purchased a building and a handful of properties near Detroit’s Woodbridge neighborhood, planning to locate an office and co-working space there. Spider, a group that oversees companies including Spider Investments and Spider Ventures, controls around 200 units in Detroit, in single family and multifamily properties. Now it’s looking to make its presence more public, aiming to renovate a building at 4264 Grand River Ave. and house a small office there, said Alejandro Eskenazi, corporate vice president. Generally Spider buys properties, redevelops them and then takes on investors, many of whom are based in Latin America. Its portfolio in Miami is larger, with bigger multifamily projects, Eskenazi said. Spider bought the Grand River property west of Midtown through Real Estate One and Detroit-based O’Connor Real Estate. O’Connor represented the seller, listed in Detroit records as 4731 Group LLC, registered to Derek Weaver, who worked in the past on the Grand River Creative Corridor art and revitalization project that launched in 2012. The Miami real estate firm took hold of six parcels clustered around and including the 5,600-square-foot building, which was built in two sec-

ALIX

FROM PAGE 3

When you show up at the Mayo Clinic, all your appointments and tests have been arranged. All your tests are done while you are there. Results come back within hours from Mayo’s own laboratories. When you leave, you have a diagnosis, or you actually have a solution. People with serious issues go there and get a solution, and it works. Companies come to AlixPartners when they have problems and want to get a quick, speedy integrated solution that works. And that’s what AlixPartners does all over the world. I went to Mayo in the early ’90s for my first executive physical and got to meet people there and was very impressed. I had been studying them for years. Pretty soon they were asking me for advice on how to solve Mayo’s business challenges. Mayo is a complex global business, so my skills and my experience turned out to be helpful for Mayo to think about the challenges in health care and in the world. Ten years ago, I helped them steer through the recession. I made sure I gave them good guidance on how to avoid trouble so they wouldn’t become a victim. I’m a pro-bono adviser to Mayo Clinic for more than 10 years. Mayo has been the main focus of my pro bono philanthropic time and activity, in addition to General Motors. I went into GM in 2008-09 and didn't charge them. Worked with them for free to help save it from the recession. What sparked your $200 million gift to Mayo?

Because I’ve been involved with Mayo for more than 10 years, I’ve come to know its culture, people, real strength and tremendous value to the world. I’m very impressed and very emotionally connected to its people. They’re some of the finest people I’ve ever worked

O’CONNOR REAL ESTATE

Miami-based real estate investor and developer Spider bought a building at 4264 Grand River Ave. and five surrounding vacant lots. It aims to redevelop the building for a new Detroit office.

Need to know JJInternational real estate firm Spider

plans renovation of Grand River building JJBuys six parcels for $425,000 JJCompany controls around 200 units in

Detroit multifamily, single-family housing

tions in 1933 and 1958, according to O’Connor Real Estate. Eskenazi said

“I’ve been spending time on Broadway productions and theater and musicals and also making documentary movies. I’ve had six Tony Award-winning plays and musicals in the last five years and have made half a dozen documentaries.” Jay Alix

with. Because I’ve been a part of their thinking on how they’re going to grow and prosper, I came to see health education as an area they could really benefit and prosper from. Mayo has three shields: clinical care, scientific research and education. It has been ranked No. 1 in the country by US News & World Report in clinical care. It’s always been a breakthrough leader in R&D. So its educational shield presented itself as an opportunity to really advance the medical school of the future. The country will be short 120,000 doctors in about 10 years because not enough people are going into medicine, partly because it’s so expensive and there’s no way to pay loans back. If we don’t train enough doctors, none of us are going to have medical care. The gift is aimed at helping students afford a medical education and not have financial burdens when they come out of school so they can practice medicine in the right way, and not just in a way that makes the most money. That’s what’s evolved, and it’s not healthy for patients. You supported the University of Michigan and its cancer center years

Spider will take control of the site around the end of the year. Spider bought the properties for $425,000 total, according to Detroit property records and O’Connor agent Vincent Mazzola. The other five properties, a total of nearly 20,000 square feet of vacant land, are at 2035 Calumet St., 2036 Calumet St., 2027 Calumet St., 2041 Calumet

St. and 4243 Vermont St. Extensive renovation work would ideally start in the beginning of next year, with a yet-to-be-determined team of Spider staff moving in after. It will open alongside co-working space, but details weren’t yet available. The mural-covered building will likely still have art across it after the renovation, but Eskenazi said

ago. Are you still involved with that or anything else philanthropically here in Southeast Michigan?

about money as much as it is about a solution to a very complex problem of how we’re going to train the doctors for the new world, how will they afford the education, where will they come from and how they will take care of patients for the future. All of that is at risk right now. This gift is part of a solution to a big national problem which has its origins right at the beginning of medical education.

I finished up my involvement with the UM cancer center probably close to 16 years ago. I do most of my philanthropy anonymously, now. I just don’t want to draw any attention to myself. I don’t think it is necessary. But I’ve done quite a bit of philanthropy in Southeast Michigan quietly, anonymously. Can you give a hint about the things that capture your attention and support here?

I’ve been involved in some very significant medical things, in education and the arts. But it’s anonymous. But the Mayo gift was not anonymous.

With the size of the gift it would be hard to keep it anonymous. And Mayo felt it would be better if I would identify myself. I’m on the board of trustees of the Mayo Clinic and also the co-chairman of its Global Advisory Council which has a significant development focus. I’ve been working on Mayo’s development for years. Even before this, I gave Mayo about $10 million many years ago. This gift in many ways is the culmination of many years of work and planning with Mayo. It’s where I felt this gift could have the biggest impact because Mayo has a unique model of care. And it turns out fully one-third of Mayo’s doctors have graduated from Mayo Clinic School of Medicine. So it’s likely the type of doctors Mayo needs in the future will come from Mayo’s medical school. By helping Mayo’s medical school today, we’re helping to train doctors from all over the world and ensure Mayo’s model of care continues into the future. This gift will help attract students in the next phase of medicine, which will include artificial intelligence, the human genomes and individualized medicines. This gift isn’t

You’ve backed several award-winning Broadway productions, right?

I’ve been spending time on Broadway productions and theater and musicals and also making documentary movies. I’ve had six Tony Award-winning plays and musicals in the last five years and have made half a dozen documentaries. I do that with my producing partner and life parter Una Jackman. We also make documentary movies and indie films together. Have we heard of any?

One called “The Journey” is about a young reporter who used to work for Reuters who was killed in Somalia in the ’90s. We also made a documentary about Maya Angelou that just came out on PBS about a year ago. And we made one about the Joffrey Ballet in Chicago that showed on PBS. We also recently helped underwrite Ken Burns’ documentary on the Mayo Clinic, which just showed on PBS about a month ago. I’m a producer and a backer. I help plan things and put deals together, help plays get started and get off the ground, and musicals. We have creative partners we work with on Broadway and in the movie industry. Una and I do it together. It’s a lot of fun. So you have a full plate?

I have enough to keep me busy in my supposed retirement. We reported on the litigation you filed earlier this year against McKinsey &

Spider hasn’t yet decided if it’ll keep the current art or change it. Contractors for the project haven’t been finalized and Eskenazi said he couldn’t yet estimate a total investment figure. The next planned step would be building new commercial structures, offices or retail, on the nearby vacant land. It’s a “strategic location,” Eskenazi said. “It’s definitely in the proximity to downtown, where we believe the growth is going to go, toward that area ... We’re looking for more projects and to keep on growing our portfolio and our presence there (in Detroit).” Spider is also making architectural plans for rehab of an 11-unit, two-building multifamily property west of Detroit’s New Center, near the Motown Museum and Rosa Parks Boulevard. Eskenazi said he expects the 2019 Marquette St. redevelopment to finish around March and was not yet able to estimate a project cost. In addition to its work as a developer and investor, the real estate company provides specialist services surrounding real estate investments, including legal, financial and accounting. It expects to develop a hotel in Miami Beach’s North Beach area next year and has another project in Miami that was stopped due to a slow condo market, Eskenazi said, among other developments in the works. Co. alleging racketeering. Where does it stand, and what led you to file that?

I’m personally litigating with McKinsey RTS. It’s part of my activities to protect the overall restructuring and turnaround industry and to call out illegal competitive behavior. I spent 40 years in the industry. I have been involved in the development and growth of the industry and also, now, the protection of the industry. This is a significant threat to the bankruptcy industry in the U.S. because McKinsey RTS has been competing illegally in the court system. It’s a small group of people who’ve been acting illegally against all logic and all case law and all written law. It’s violations of important federal laws. There’s a case filed in the Southern District of New York in Manhattan, alleging racketeering. The case spells out years of (alleged) illegal activity by McKinsey in the federal court system. They’re lying to bankruptcy judges and to the U.S. Department of Justice, as it’s alleged in the lawsuit. There’s a second set of litigation in bankruptcy court in Virginia against McKinsey, alleging they’ve committed a fraud on the bankruptcy court itself. I’ve asked the bankruptcy court to reopen a bankruptcy case. That lawsuit has won the support of the U.S. Department of Justice, which has filed a pleading supporting my motion to reopen the case. My lead lawyer is retired chief judge of the U.S. bankruptcy court in Detroit, Steven Rhodes. He’s working with me along with former bankruptcy judge Judy Fitzgerald, UM law school professor John Pottow and former Detroit U.S. Attorney Dan Lemisch. I’m not active in the restructuring industry. In a sense, this is like another pro bono activity for me, something that’s important and serious. I’m trying to help the bankruptcy system, help protect the rule of law and protect the industry from illegal and anti-competitive behavior.

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CASINO

tertainment in 2016, but while Gilbert’s other casino properties switched names, Greektown never did.

FROM PAGE 1

Gilbert is widely credited for creating a share of those improving economics after moving his Quicken Loans Inc. and thousands of workers downtown and then acquiring, renovating, and filling more than 90 downtown properties. He bought Greektown, part of his Jack Entertainment gaming properties, for what he told Crain’s was approximately $600 million in 2013.

Deal origins

Rise of REITs Gilbert’s Greektown sale also is a beneficiary of timing. He wants to exit gaming amid a wave of casino consolidation in recent years driven by the rise of gaming real estate investment trusts. Vici Properties is a REIT spun off from Las Vegas-based Caesars Entertainment Corp. during its bankruptcy last year, and will acquire Greektown’s real estate for $700 million to serve as the property owner. Penn National, which operates 40 horse racing tracks and casinos as part of a steady portfolio expansion, will pay $300 million for the casinos operating assets and serve as the casino operator. That sort of relationship has been increasingly common since casino REITs emerged in 2013. Vici is one of three such casino REITs. They’re popular because REITs don’t pay federal income tax and they must pass at least 90 percent of taxable earnings directly to shareholders. Investors are taxed at their individual tax rate for the ordinary income portion of the dividend, according to Las Vegas-based casino industry newsletter CDC Gaming Reports. Year-to-date through August, there have been $7 billion in announced casino acquisitions and mergers, and REITs were involved in about $4 billion of those deals, according to CDC Gaming Reports. Penn National launched the casino REIT trend in 2013 when it created and spun off Gaming and Leisure Properties Inc. (GLPI), which now has 44 casino properties. Some are leased to Penn National to operate, and some are operated by other companies. Vici will lease Greektown to Penn on a 15-year, $55.6 million lease. The REIT’s top executive also cited the casino’s downtown location in an improving Detroit as impetus for the acquisition. “As the only casino located in Detroit’s historic Central Business District, Greektown, and its 30-story hotel tower, are ideally situated. Downtown Detroit is benefiting tremendously from billions of dollars of investment across the residential, commercial, entertainment and cultural infrastructure,” Vici President and COO John Payne said in a news release. Penn National has one other leaseback relationship with Vici: It announced in June a $115 million cash purchase for the operation of Margaritaville Resort Casino in Bossier City, La., in a deal expected to close in December. Vici Properties is buying the casino real estate for $261 million in cash and leasing it to Penn. Penn National’s portfolio includes several major casinos acquired without a REIT deal: It paid $360 million in 2015 for the iconic 1,500-room Tropicana casino and hotel that opened in 1957 on the Las Vegas Strip. Penn paid $231 million in 2010 to acquire the debt and ownership of the M Resort in Las Vegas that opened in 2009.

ANNALISE FRANK/CRAIN’S DETROIT BUSINESS

Greektown Casino-Hotel’s new owners are Penn National Gaming Corp. and Vici Properties Inc.

A good price?

Sports gambling

As for Greektown’s $1 billion sale price, casino industry analysts say it’s in line with expectations. “I think the sales price seems reasonable given a) the strong and largely stable dynamics of the overall Detroit market, b) a relatively active M&A market fueled by competitive gaming REITs, and C) recent M&A multiples on comparable assets,” SunTrust gaming analyst Barry Jonas said via email. “The total $1 billion sales price for Greektown equates to about 10.4x EBITDA from the last 12 months.” He noted that recent comparable casino sales include $1.02 billion in April for the Hard Rock Rocksino Northfield Park in suburban Cleveland and the $850 million sale in May of Empire City Casino in the suburbs of New York City. Northfield Park was bought by MGM Growth Properties LLC (NYSE: MGP), a Las Vegas-based REIT, and Empire City was acquired by Paradise, Nev.,-based MGM Resorts International, owner of the MGM Grand Detroit. Greektown still carried $400 million in debt, Bloomberg reported. That will be paid out of the deal’s proceeds and not assumed by the buyers. The Greektown sale is in the same rarefied price range as significant Las Vegas casino transactions. In 2014, Deutsche Bank sold the Cosmopolitan of Las Vegas for $1.7 billion to New York City-based private equity giant Blackstone Group. In 2017, Nevada-based Golden Entertainment paid $850 million for the properties owned by American Casino & Entertainment Properties, including the famed Stratosphere and three smaller casinos. Federal and state gaming authorities must sign off on the deal, which is expected to be completed within six months, Gilbert told Crain’s. Jack Entertainment’s top executive, CEO Matt Cullen, said the company achieved its business goals with Greektown and is pleased with the sale price. “Penn had been interested in the Greektown casino for years on and off,” Cullen said. “We felt like we accomplished much of what we wanted to accomplish. We got a good price.” Gilbert’s Jack Entertainment still owns and operates five casinos and racetracks in Ohio, Maryland and Kentucky. Jack Entertainment said it’s “continuing a strategic assessment for its remaining gaming properties” in other states. Cullen said the Greektown deal happened because the situation was right, and no such “convergence” has yet happened for its gaming properties elsewhere — yet.

Lower on Penn National’s reasons to buy Greektown is potential revenue from newly legalized sports wagering, said Penn spokesman Jaffoni. Michigan has yet to introduce sports gambling legislation, but the casino operator intends to support bills that don’t carry onerous tax liabilities, Jaffoni said. The U.S. Supreme Court earlier this year overturned a 1992 federal law that had made just about every type of sports bet illegal except those made in licensed sports books in Nevada, Delaware, Montana and Oregon, along with wagering at horse and dog tracks. The Greektown sale — and potential sale of other Jack properties — comes as Americans are spending more at casinos, too. The commercial gaming industry generated $40.28 billion in gaming revenue in 2017, a 3.4 percent increase over 2016, according to the Washington, D.C.-based American Gaming Association trade group. Greektown has typically run in third place in gambling revenue in the three-casino Detroit market since the city’s casinos opened in 1999 and 2000. Last year, revenue at Greektown was nearly $330 million, compared with about $592 million at MGM Grand Detroit and $478 million at MotorCity Casino Hotel, which is locally owned by Marian Ilitch.

Casino history Greektown Casino-Hotel’s origins date back more than 20 years: Michigan voters approved Proposal E in November 1996 that created the Michigan Gaming Control and Revenue Act and authorized the licensing and operation of three commercial casinos within the city of Detroit. Greektown was one of the three and opened in November 2000 with the Sault Ste. Marie Tribe of Chippewa Indians as majority owners. The casino’s owners added 13-story, 3,500-space parking garage at Monroe and St. Antoine streets in 2007, and two years later opened an adjacent 30-story hotel. Debt problems and the recession led to the tribe seeking Chapter 11 bankruptcy protection in 2008, and two years later the casino was acquired by a consortium of institutional shareholders, known as Greektown Superholdings Inc., that were the original bond holders. Gilbert, through his Rock Gaming LLC, began acquiring stakes in the casino in 2012-13, and took nearly 100 percent control in June 2013. Rock Gaming, which invested millions into improvements at Greektown, changed its name to Jack En-

The Greektown deal comes two months after reports began circulating that Gilbert was looking to exit the casino business, including his properties in Cleveland, Cincinnati and Detroit. Gilbert said talks began with Penn National and Vici nine to 10 months ago. The time was right to sell, Gilbert said. “We bought it as a defensive play more than anything else. Two and a half years before we bought it, it came out of bankruptcy under the bondholders, and they weren’t running it well,” Gilbert said. “It would have been very bad for downtown if Greektown went under. If this thing was in the outskirts or in the suburbs, we wouldn’t have purchased it. We wanted good things to happen downtown, so we went ahead and purchased it. But (the casino) is probably a business that’s fully valued right now.”

What will Gilbert do with the $1 billion? Gilbert, who is worth an estimated $6.8 billion according to the Bloomberg Billionaires Index, has been a key player in the redevelopment of downtown. He said he plans to use some proceeds from the sale for investment in Detroit real estate and business development. “Overall, this will enhance our ability to develop things in a way and manner we have been doing downtown. To create new businesses and invest in others with opportunities to create more jobs and growth,” he said. One thing he’s not going to use the $1 billion for is to buy the Detroit Tigers, which has been an on- and offagain rumor for some time. “(Tigers owner) Chris Ilitch made clear previously they intend to be long-term owners,” Cullen said. “We’re not in any conversations with them. Speculation we had done this to allow us to (buy the Tigers) just isn’t accurate.” Gilbert, who owns the NBA’s Cleveland Cavaliers and some minor-league and e-sports teams, is seeking a Major League Soccer expansion team for Detroit with Detroit Pistons owner Tom Gores, a process that remains ongoing. The proceeds from the Greektown sale could help finance that, or just about anything else, Cullen said. “It’s fungible to some extent, and Dan will make that call. It could go into a lot of things,” he said.

Political effect Selling Greektown even has a potential electoral effect. Cullen said he doesn’t know if Gilbert will retain his Michigan casino license after the Greektown sale. Cullen, who also is licensed as head of Jack Entertainment, and Gilbert will be eligible to make local and state-level political donations again. State law forbids commercial casino license holders from making such donations, although they’re free to make federal campaign donations. Records show that Gilbert has donated to presidential candidates from both major parties. Cullen and Rock declined to say who the other Greektown investors are, other than to say Gilbert is by far the significant majority owner.

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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 // N O V E M B E R 1 9 , 2 0 1 8

Como’s rebirth comes with crusty pizza, multimillion-dollar overhaul By Annalise Frank afrank@crain.com

Restaurateur Zack Sklar considered tearing down Ferndale mainstay Como’s pizzeria, but in the end he couldn’t do it. Instead, the new owner is ripping up its family pizza recipe and bringing a new Detroit-style pie to the downtown corner restaurant. Como’s is set to reopen in spring. It will keep the name and serve pizza, other Italian options and drinks under Sklar’s Bloomfield-based Peas and Carrots Hospitality LLC. The beloved but health violations-afflicted restaurant that closed for good last year could have been replaced with a multistory mixeduse building at 22812 Woodward Ave. at the corner of Nine Mile Road. It would have been challenging, but the small, high-profile site had opportunity in a quickly evolving Detroit-adjacent city. “Como’s is a landmark ... I didn’t want to take that away from Ferndale,” Sklar said. “I was reading some of the forums. I couldn’t believe how invested the community is in the community there.” The star-topped neon Como’s sign will stay, too; otherwise, Peas and Carrots plans a hefty makeover with a complete interior gutting and facade overhaul, Sklar said. It plans to invest $5 million in the property, including the $3.07 million purchase price for the approximately 12,600-square-foot two-story building. The deal closed in June. Peas and Carrots is using McIntosh Poris Associates of Birmingham for design work. The contractor was not disclosed. The interior will be “cozy,” “paying homage to what was there, but it’s gonna be updated,” he said. The remade exterior will be all brick. Como’s is also getting smaller. Approximately 2,000 square feet of its more than 5,000-square-foot first floor will be taken up by a separate tenant, Traverse City Whiskey Co., which is set to open a tasting room there with cocktails and retail. It will have a separate entrance on Woodward Avenue. The restaurant won’t be lacking in liquor, though. It will have two bars, inside and outside, and pump music on weekends. “It’s going to be nuts,” Sklar said. Como’s will seat 100 inside and a couple of hundred on the 4,600-square-foot outdoor patio, employing around 65 people, according to Sklar. Traverse City Whiskey will have around 70 seats and Como’s will help it out with food. Como's pizza will cost around $11$15, depending on toppings. The building’s second floor will likely house some Peas and Carrots staff, Sklar said. It could also rent out to other office tenants and include a private dining room, but details haven’t been finalized. Sklar has 10 restaurants under several companies, including Peas and Carrots Hospitality. He has two co-owners in Peas and Carrots: Joshua Humphrey and Jim Bellinson. In addition to Como’s, Sklar has another two restaurants in the works: two Gus’s Fried Chicken lo-

ANNALISE FRANK/CRAIN’S DETROIT BUSINESS

Como’s pizzeria in Ferndale is set to reopen this spring under a new owner, Peas and Carrots Hospitality LLC, led by Chef Zack Sklar. The restaurant at 22812 Woodward Ave. in the city’s downtown shut in 2017 for Oakland County Health Department violations.

“I weighed building some monstrosity and making a bunch of money. I didn’t think it was the right thing to do by the community.” Zack Sklar

Peas and pizza

ANNALISE FRANK/CRAIN’S DETROIT BUSINESS

Chef Zack Sklar’s pizza will run approximately $11-$15 in the revamped Como’s restaurant in downtown Ferndale.

Need to know JJFerndale restaurant set to reopen in the spring JJNew owner is Zack Sklar’s Bloomfield Hills-based Peas and Carrots Hospitality LLC JJApproximately 2,000 square feet will be taken by Traverse City Whiskey Co., which will open a tasting room

cations in Cleveland and Chicago. Sklar is a partner in another company, Schmaltz Hospitality LLC, which is a Gus’s franchisee and has locations in Royal Oak and Midtown

Detroit. Peas and Carrots also operates Social Kitchen & Bar in Birmingham, Beau’s Grillery in Bloomfield Township, and Mex in Bloomfield Township and Great Lakes Crossing Outlets in Auburn Hills. As Sklar, a Crain’s 2015 Twenty in their 20s honoree, grows his restaurant portfolio, he’s also looking to expand the catering business with which he started his career. He’s also considering an additional Detroit or Ferndale presence for his Bloomfield Township-based Cutting Edge Cuisine.

Initially, Sklar’s team assessed building residential units on the 0.34-acre Como’s site. Visions for the property while it was on the market included a multistory mixeduse building or new restaurant. Como’s availability came about as the city has garnered more development interest — its first mixed-use parking garage was moving forward as of August. “I weighed building some monstrosity and making a bunch of money,” Sklar said. Ultimately “I didn't think it was the right thing to do by the community.” So he’s keeping Como’s. And that means Sklar is making pizza on a large scale for the first time. He’s chosen traditional Detroit-style pizza, the deep-dish kind that has a thick, crunchy crust and is cooked in a square or rectangular pan. “I grew up on this stuff,” he said. “So, as a chef, how can I make this better?” The chef said during a sampling with Crain’s recently that his pizza is defined by its crust. He uses a sourdough starter and a three-day fer-

mentation process that produces a solid bread base with inconsistent bubbles throughout. The sauce from San Marzano tomatoes is intensely flavorful, and so it is dotted across the surface instead of spread all over. Cheeses from Ireland, Italy and Wisconsin are placed beneath the sauce so the tomatoes and juices don’t moisten the bread. In local tradition, the cheese around the edges is caramelized into a crunchy layer — Sklar said he’s so obsessed with the edges he’s serving large pizzas as two smalls, so there’s more to go around. He said he crafted the recipe alone in his Bloomfield catering kitchen. In tasting sessions, he compared it with Detroit-style mainstays, Buddy’s Pizza and Loui’s Pizza in Hazel Park, but said he’s taken a chef’s lens to it and emphasizes fresh ingredients. After nearly a year and hundreds of test pies later, Sklar is ready to bring his concoction to the corner of Nine Mile Road and Woodward Avenue. Annalise Frank: (313) 446-1626 Twitter: @annalise_frank

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

THE WEEK ON THE WEB

RUMBLINGS

Morouns sell Corktown building to Dennis Kefallinos

Talent, wages weigh heavily in Research Panel survey

NOVEMBER 9-15 | For more, visit crainsdetroit.com

he Moroun family has sold a large former cold-storage building near Michigan Central Station to another Detroit property owner known for sitting on properties. The 437,000-square-foot building at 1448 Wabash St. in Corktown sold to Elizabeth Street Lofts Inc., an entity registered to Detroit real estate investor Dennis Kefallinos, according to public records. That entity lists its address as 1600 Clay St., the Russell Industrial Center that Kefallinos owns. Chris Mihailovich, a Kefallinos executive, confirmed the purchase but declined to elaborate on plans for the building. “As of today (the) plan is to develop the building, subject to change LOL,” Mihailovich said in a text message to Crain’s. When asked to elaborate, he said: “I cannot talk for Dennis, I don’t know what’s in his mind, all I know is we are going with developing (the) building! Subject to change. Meaning it could be residential. Or warehouse. ... Or office space. The options are many.” The seller was Northern Border In Transit LLC, which is registered at 12225 Stephens Road in Warren, the headquarters for the Moroun family’s business empire. Michael Samhat, president of the Morouns’ Crown Enterprises, confirmed the building had sold but wouldn’t disclose the buyer. Kefallinos, who has been investing in Detroit real estate for decades, has long been accused of sitting on properties and doing little to improve them, and renting substandard apartments as has been alleged in a class-action lawsuit. He has often outlined grand visions for the properties he purchases but those plans often have not come to fruition. A purchase price for 1448 Wabash St. is not known; Mihailovich declined to disclose it. The Morouns have taken sharp criticism for their stewardship over the Detroit train depot, which the family sold in May to Ford Motor Co. in a historic deal for $90 million. The Dearborn-based automaker plans to anchor a $740 million Corktown campus with the depot. Ford’s move has fueled massive real estate interest in the surrounding neighborhood. Kefallinos last year put 30 properties up for sale; some including Harvard Square Centre on Broadway Street and Shapero Hall in Lafayette Park have sold since then to other developers. He also bought a 630-acre former Boy Scouts camp earlier this year.

MORE NEWS J An affiliate of Detroit-based mortgage lender Quicken Loans Inc. is alleging fraud and collusion as it seeks a new trial after a Texas judge handed down a judgment for nearly $740 million. Amrock, an affiliate of Dan Gilbert’s Detroit-based Rock Holdings Inc., announced in a news release last week that it filed a motion for a new trial in the case. It said it has whistleblowers, former HouseCa-

T LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

The building at 1448 Wabash St. in Detroit’s Corktown neighborhood is 437,000 square feet and nearby the Michigan Central Station, which Ford Motor Co. bought earlier this year.

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

1,100

The number of workers HAP is moving from Southfield to Troy, starting Nov. 26.

$5 million

The amount Peas and Carrots Hospitality is investing in remaking Como’s pizzeria in Ferndale, including the building purchase price just over $3 million.

The number of Detroit funeral homes Michigan regulators inspected, finding no serious violations following discoveries last month of fetus remains in two funeral homes.

nary executives, to back up allegations against San Francisco-based real estate startup HouseCanary. The filing comes after a jury in Bexar County, Texas, ruled in March that Amrock, formerly Title Source Inc., misappropriated software from HouseCanary. J Udon noodle bar Ima of Detroit’s Corktown plans to open its second location in Madison Heights within two weeks. Chef Mike Ransom said he already shops four days a week in the Oakland County suburb home to a Southeast Asian immigrant community and restaurants. J A Miami-based international real estate investment firm purchased a building and a handful of properties near Detroit’s Woodbridge neighborhood, planning to locate an office and co-working space there. Spider, a group that oversees companies including Spider Investments and Spider Ventures, controls around 200 units in Detroit, in single family and multifamily properties. Now it’s looking to make its presence more public, aiming to renovate a building at 4264 Grand River Ave. and house a small office there, said Alejandro Eskenazi, corporate vice president. Cheli’s Chili Bar in downtown Detroit is closing on Nov. 24. The popular spot with a rooftop overlooking Comerica Park is owned by former Red Wings defenseman Chris Chelios. While Chelios’ move to Chicago, and the Red Wings’ decline in recent years,

are potential reasons for calling it quits, it is unclear exactly why it is closing or what will take its place. J The Detroit Regional Convention Facility Authority is negotiating a seven-figure naming rights deal for Cobo Center, according to a report from The Detroit News. The authority is in the “nitty-gritty of just finalizing the deal,” Claude Molinari, general manager of the downtown Detroit venue, told The News after a Thursday board meeting unrelated to naming rights. J A pair of New Center area apartment buildings have been purchased with the intention of renovating them and raising rental prices. Sales of a 19-unit, 13,200-square-foot complex called The Richmond and a 37-unit, 106,000-square-foot building called New Center Court Apartments closed around two weeks ago for $3.5 million total. J 98.7 Amp Radio, the top-40 pop hits station, has been replaced by Philadelphia-based owner Entercom Communications Corp. with “987 The Breeze.” It plays “relaxing favorites” from Elton John to Adele. J Lawrence Technological University and the city of Southfield are banding together to renovate a 6,300-square-foot center to house a business incubator and accelerator to support small manufacturers and hardware startup companies with product development and prototyping. The center, to be called the Centrepolis Accelerator, will be housed in a portion of the Enterprise Center, an office building formerly known as the Mark Plaza, next to the campus. J Former MSU and current Golden State Warriors basketball star Draymond Green will open his first Blink Fitness gym in Warren, the first in a wave of locations planned by the Saginaw native and his business partner Tom Shumaker under a franchise deal with the New York-based gym chain. The 15,000-square-foot gym will be located in the Hoover 11 Center. Blink Fitness also announced in September it would open in the Detroit Pistons’ new headquarters in Detroit’s New Center neighborhood. J An office building at 610 W. Congress St. that’s sat vacant for the past few years sold for more than $3 million to an investor aiming to fill it within the next half year. Anmar Sarafa, founder and president of Bloomfield Hills-based Steward Capital Management, bought the 26,000-square-foot building in Detroit’s financial district last week. Back in 2015 it was listed for $1.75 million.

alent and wages are weighing heavily on businesspeople's minds, at least according to a survey of Crain's readers who raised their hands to weigh in on important business issues. Respondents from Crain's Research Panel cited a lack of quality candidates, especially for high level roles, as their biggest challenge in recruiting and retaining talent; 30 percent of the 149 respondents identified that issue. Their second-biggest concern about talent is related to the more competitive job market caused by

low unemployment rates. Twenty-eight percent identified that as their biggest challenge. And that’s playing out in wages. A substantial majority of respondents, 62 percent, expect they will be raising wages in 2019, and an additional 20 percent said they were uncertain. Only 18 percent said they would not be increasing wages. Crain’s Research Panel is composed of hundred of people who are actively working in business in metro Detroit. For more information or to join, go to crain.com/research-panel.

ACCELERATE MICHIGAN INNOVATION COMPETITION

Accelerate Michigan Innovation Competition winners of a total of $1 million in cash and other prizes celebrate Tuesday evening at the Lexus Velodrome in Detroit.

Medical device maker nets top prize in competition V

erteCore Technologies LLC, a Mississippi-based orthopedic medical device developer, was awarded the $500,000 grand prize and a $10,000 people’s choice award at the Accelerate Michigan Innovation Competition on Tuesday evening. East Lansing-based GreenMark Biomedical Inc., which diagnoses early stage cavities and develops a painless way to treat them without a dentist’s drill, earned the $100,000 second prize. Ann Arbor-based Shoptelligence, an AI-style discovery platform, earned $50,000 for third place in Invest Detroit’s ID Ventures ninth annual pitch competition. “The innovation that we’ve seen at this year’s pitch competition is a testament to the extraordinary talent in Michigan,” Martin Dober, senior vice president and managing director of ID Ventures, said in a news release. A total of $1 million in cash and inkind prizes was awarded to eight startups selected from 24 semifinalists: J Grand prize, $500,000: VerteCore J Second prize, $100,000: GreenMark Biomedical Inc. J Third prize, $50,000: Shoptelli-

gence Woman-led prize, $150,000: SpellBound J Caregiver prize, $25,000: MyNurse J Social enterprise prize, $20,000: Derq J Hardware prize, $10,000: S3D Precision Dispensing J People’s choice, $10,000: VerteCore Companies hail from across Michigan as well as other states, but all have a presence in Michigan. Most are focused on information technology and health care. Nearly 400 top investors, entrepreneurs and community leaders attended the event at the Lexus Velodrome in Detroit, sponsored by Ann Arbor Spark, Invest Michigan, Belle Michigan, William Davidson Foundation and Michigan Economic Development Corp. among others. Since its launch in 2010, AMIC grand prize winners have hired more than 1,000 people and attracted more than $650 million in additional investment, according to a news release. Previous awardees include Orbion Space Technology, SPLT,, Banza, SkySpecs, VNN, Algal Scientific, Celsee and Armune BioScience. J

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