Crain's Detroit Business, Dec. 3, 2018 issue by Crain's Detroit Business

A Lion roars again: Lomas Brown relishes his radio role Page 3

DECEMBER 3 - 9, 2018 | crainsdetroit.com

Hazel Park Raceway redevelopment gets $21.44 million Page 15

MANUFACTURING

GM: THE FALLOUT GM may keep cashing in tax credits after cuts, closures By Chad Livengood clivengood@crain.com

General Motors Co. may be able to continue claiming its maximum amount of tax credits from the State of Michigan even after the Detroit automaker sheds 8,100 salaried jobs in North America and possibly shutters its Detroit/Hamtramck assembly and Warren transmission plants. That has some state lawmakers calling for a re-examination of the taxpayer subsidies that the last three governors of Michigan have bestowed upon GM and its crosstown rivals Ford Motor Co. and Fiat Chrysler Automobiles in an effort to keep the automakers firmly planted in the state. GM’s tax credits, the total value of which is shrouded in secrecy, can be applied to a maximum of 34,750 retained jobs under a December 2015 deal the automaker struck with Gov. Rick Snyder’s administration.

The automaker’s current in-state workforce totals 51,000 employees, GM spokesman David Caldwell said. While GM hasn’t said where all of the salaried jobs are being eliminated in North America, most of the company’s white-collar workforce in engineering, design, research, middle management and executive ranks are based in Southeast Michigan. Even if all of the proposed job cuts were made in Michigan, GM could still have a 8,100-employee buffer above the cap for the number of Michigan jobs it can claim for Michigan Economic Growth Authority tax credits under the Michigan Business Tax. That’s because the automaker can claim a tax credit on the payroll of up to 34,750 jobs retained annually through the end of 2029 under the deal cut three years ago with Snyder’s Michigan Economic Development Corp. SEE TAX CREDITS, PAGE 20

Detroit/Hamtramck Assembly is one of five North American plants that GM plans to close in a massive restructuring announced on November 26.

Analysis: Pain in Michigan will reverberate from GM’s bigger move on electric

General Motors Co.’s restructuring announcement Monday signals a new era in American manufacturing — one that will be painful in the Midwest — Southeast Michigan in particular. The American car is dead and GM, like Ford Motor Co., is betting its future on electric and autonomous vehicles. The consequences will be far-reaching even if the bets work out for the metro Detroit-based automakers. On a conference call with reporters Monday, GM DUSTIN CEO Mary Barra said the automaker will continue to WALSH invest in the trucks and sport utility vehicles and crossovers that dominate the U.S. market but it has “the opportunity to take down our capital expenditures while investing more in future technologies like autonomous and electric vehicles.” To do so, GM says it is aiming to close five plants, in Detroit/Hamtramck; Warren; Lordstown, Ohio; Baltimore, Md.; and Canada, as well as eliminate up to 14,300 salaried jobs. SEE WALSH, PAGE 20

JEFF KOWALSKY/AFP/GETTY IMAGES

INSIDE

EMPLOYMENT

Wage growth, competition likely to render minimum wage delay moot

Real estate market health? Look to the debt. Page 10 crainsdetroit.com

By Dustin Walsh dwalsh@crain.com

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Very few in Michigan — excluding tipped-wage workers — earn the state’s minimum wage, and market economics, barring an economic downtown, will keep that true in the future. The GOP-controlled Michigan Senate last week delayed a minimum wage ramp-up to $12 an hour by eight years, effectively making the state-instituted wage floor meaningless due to wage growth and in-

Need to know  Senate advanced the bill to delay increasing the minimum wage to $12 an hour by 2022 until 2030  In 2017, about 7 percent of Michigan’s 4,276,000 workers made at or below the current minimum wage of $9.25 an hour

creased labor competition, according to experts. The Senate on Wednesday advanced the bill to delay increasing

the minimum wage to $12 an hour by 2022 until 2030. Under the current law, which GOP legislators pre-emptively approved in September to keep the citizen-led initiative off the November ballot, minimum wage is scheduled to rise to $10 in 2019, $10.65 in 2020, $11.35 in 2021 and $12 in 2022, with yearly inflationary adjustments after. Under the new legislation, the wage would increase to $9.48 in 2019 and by $0.23 cents annually until it hits $12 in 2030. SEE MINIMUM, PAGE 17

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MICHIGAN BRIEFS

INSIDE

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

Bills to ease upgrade to 5G wireless systems go to governor LANSING — Bills designed to ease upgrades to 5G wireless systems in Michigan are heading toward Gov. Rick Snyder’s desk. The Senate enrolled the legislation Thursday, a day after it was passed by the House. The bills would create streamlined regulations, including fees, to install a dense network of smaller, lower-powered cells on telephone poles and other infrastructure in public rights of way. They are backed by wireless providers and business groups but opposed by municipalities who say they interfere with their right to recover costs. Other opponents worry about the health effects of the technology. 5G systems are the fifth generation of wireless technology. Under the bill, the zoning permit fee for small cell wireless facilities would be $500 while keeping the fee for modification or installation of wireless support structures at $1,000. The bill in its current form requires small cell infrastructure to be labeled with emergency contact information. Providers would be required to notify local authorities responsible for

rights of way upon application for a permit. It also requires for providing notice of discontinuance of a small cell facility and allows for local authorities to request the property to be returned to its former condition. AT&T Michigan President David Lewis said installing small cells will enable faster wireless internet speeds and provide more capacity for things like streaming music or videos. The legislation has sparked debate. Local governments, including Oakland and Wayne counties, have criticized the legislation for capping fees they can charge at $20 per year. They also contend 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.

Cost of project to keep out Asian carp nearly triples

Fortifying an Illinois waterway to prevent invasive carp from using it as a path to Lake Michigan could cost nearly three times as much as federal planners previously thought, according to an updated report. The U.S. Army Corps of Engineers last week released a final strategy plan for upgrading the Brandon Road Lock and Dam near Joliet, Illinois, which experts consider a good location to block upstream movement of

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barrier, noisemakers and an air bubble curtain to deter fish from swimming upstream and remove those that don’t turn back. The adjacent lock would be retooled to flush away unwanted species floating on the water.

Michigan Senate committee OKs pipeline management bill

Scientists warn that if the voracious carp become established in the Great Lakes, they could harm the region’s $7 billion fishing industry.

Asian carp that have infested the Mississippi and Illinois rivers. Scientists warn that if the voracious carp become established in the Great Lakes, they could out-compete native species and harm the region’s $7 billion fishing industry. The Corps’ new plan is similar to a draft from August 2017, but the estimated price tag has jumped from

$275 million to nearly $778 million. “Basically during the past year, some additional engineering and design work changed the scope to bring it up to that current cost,” Allen Marshall, spokesman for the Corps’ district office in Rock Island, Illinois, said last week. Under the plan, the channel would contain devices including an electric

Legislation moving in Michigan’s Senate would authorize the Mackinac Bridge Authority to help implement a deal to replace twin oil pipelines in a crucial Great Lakes channel. The Republican-led Senate Government Operations Committee passed the bill 3-2 on party lines last week, but the full Senate delayed voting so changes can be made. Gov. Rick Snyder’s administration says the bridge authority is the logical choice to oversee a proposed pipeline tunnel in the Straits of Mackinac. Opponents of the agreement say the authority’s mission should not be altered so significantly.

BE ON THE LOOKOUT FOR THESE UPCOMING NOMINATION 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 mark 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 2019

NOTABLE WOMEN IN REAL ESTATE

Crain’s Detroit Business will name the 2019 Notable Women in Real Estate in a special report on February 18. In that report, we’ll profile women in the real estate industry who are considered leaders in their workplaces and in the community.

For questions about these nominations programs, contact Keenan Covington at kcovington@crain.com

Also, stay tuned to crainsdetroit.com/nominate

C R A I N ’ S D E T R O I T B U S I N E S S // D E C E M B E R 3 , 2 0 1 8

HEALTH CARE

WSU medical group tries to thread Ch. 11 needle By Jay Greene jgreene@crain.com

The sudden bankruptcy filing Nov. 8 of the Wayne State University Physician Group was driven by discovery earlier in the year that financial losses of the 264-physician faculty practice plan were double the $5.5 million expected and a new, more drastic turnaround plan was required, Crain’s has learned. Over the next four months, as UPG works with the U.S. Bankruptcy Court in Detroit and the hundreds of credi-

REDEVELOPMENT

Eastland’s new owner brings big promises, spotty record

Need to know  Wayne State’s University Physician Group filed for bankruptcy to shed expensive leases, service contracts and pave the way for a new future  Bankruptcy prompted by several factors, including defections of specialist doctors to competing hospitals and groups  Partner health organizations were also becoming nervous about the financial turnaround plan, so a new one was crafted

tors to come up with a final plan, the future of the 18-year-old faculty practice plan once designed to be a profit center for Wayne State will be made more clear. What is certain, however, is UPG will never become the large, clinically comprehensive and profitable practice plan envisioned by former Wayne State Medical School Dean John Crissman back in 1999. Beyond the current financial crisis, the reasons include mismanagement, overly ambitious growth plans, competi-

Mark Shapiro: Plan to complete bankruptcy by mid-summer.

Charles Shanley: HFHS affiliation will help with UPG comeback.

tion, lack of teamwork and a common goal among physician faculty members. For at least the next decade, UPG will be, at best, mildly profitable as a much smaller clinical enterprise of 100 to 200 doctors with top-notch specialists. It will also primarily serve as a vehicle to service the medical education contract at Detroit Medical Center, Henry Ford, and the WSU School of Medicine's other residency program commitments. SEE UPG, PAGE 18

SPORTS BUSINESS

By Kurt Nagl knagl@crain.com

The new owner of Eastland Center is a New York-based real estate investor who wants to bring the long-struggling mall in Harper Woods back to life — a plan that hasn’t panned out for some of his other properties, including in Michigan. Mike Kohan, principal of Great Neck, N.Y.-based Kohan Retail Investment Group, placed the winning $3.125 million bid for a 640,000-square-foot chunk of the mall. The deal with CWCapital, which has owned the mall since it went into foreclosure in 2016, closed last week, Kohan said. “I understand the mall suffered in the past few years,” he said. “We are hands-on owners and are trying to get whatever tenants we can bring to try to put a light on in those dark spaces.”

Need to know  New owner is New York-based Kohan Retail Investment Group  Group owns 27 malls, including two in Michigan 

It has checkered ownership history

Eastland Center has lost most of its anchor tenants in the last few years, leaving little hope for a comeback in its current form at a time when traditional malls are on a steep decline. The most unique pitch for Eastland Center so far has been transforming it into a civic center with the city of Harper Woods as its main tenant. Kohan said the first part of his plan is to locate new tenants to stabilize the mall. “Further down the road,” he said he is “looking forward to discussions” with the city on a potential partnership. Harper Woods is pushing an “economically sustainable redevelopment plan,” according to documents on its website. The city envisions replacing the mall with a “civic campus,” with a new city hall and police department. Joe Rheker, city manager, said he recently made contact with Kohan and set up a conversation about future redevelopment at the site. SEE EASTLAND, PAGE 18

Lomas Brown (right) during the Detroit Lions-Chicago Bears game at Ford Field on Thanksgiving Day. BILL SHEA/CRAIN’S DETROIT BUSINESS

Lomas Brown, a rookie again, grows into his radio role By Bill Shea

dio role, with five left this season, and he’s enjoying it. “It was a lot of pressure, but now I feel so much more comfortable. I know how to look at the field a lot better, at the whole field instead of just the line of scrimmage,” he said in his signature deep delivery that’s a blend of modest aw-shucks drawl and eager delight.

bshea@crain.com

Gregarious and gargantuan. Those are two accurate descriptions of Lomas Brown. Oddly, so is the word rookie. The former Detroit Lions left tackle, who spent the best years of his 18 NFL seasons blocking for Barry Sanders, has found a new career at age 55 as the game analyst for the team’s game radio broadcasts on WJR 760 AM. The station hired him in July to replace Jim Brandstatter, who had been a Lions radio broadcaster for 31 years. Brown, now in his first season doing color commentary alongside play-byplay announcer Dan Miller, came into the NFL as the Lions’ first-round draft pick in 1985, and exited in 2002 with a Super Bowl ring as a backup with Tampa Bay. Now he finds himself learning a new job while maintaining gigs that help connect small metro Detroit companies to larger businesses to fuel their growth. In both jobs, he’s using his experience of playing with five NFL teams to offer lessons and insight for listeners and for corporate clients. Brown is 15 games into his new ra-

Back to work

BILL SHEA/CRAIN’S DETROIT BUSINESS

Former Detroit Lion Lomas Brown is in his first season doing color commentary for broadcasts of the Lions games.

Need to know  Lomas Brown replaced Jim Brandstatter on WJR Lions broadcasts in July  Brown spent 11 of his 18 NFL seasons with the Lions  He also works to link small businesses with larger firms

The initial idea was for Brown to work alongside Brandstatter and Miller, but for reasons never made clear by WJR, the station decided to not renew Brandstatter’s contract and instead pair just Brown and Miller. That sent shockwaves across Detroit media, and both Brown and Brandstatter have said publicly they were surprised. Four months later, Brown is diligently working to improve as an analyst. His radio work week is not unlike his football career. He said he spends Sunday nights, after returning home from a game, studying post-game comments, interviews and highlights. He’s always trying to glean new insights. On Mondays, he’ll re-watch the

Lions game and review his radio performance. He’ll travel to the Lions headquarters in Allen Park on Wednesdays to interview a player, and he puts together a podcast with the team’s in-house multimedia journalist, Tori Petry. Thursday through Saturday are reserved for more game study and notes, and also travel if there’s a road game. “By Saturday, I’m just trying to think about what I’m going to say on Sunday. Just try to run Sunday through my head. I try to do everything like I used to do when I played football,” he said. He credits Miller for helping him improve his radio demeanor and to improve his new skills. “It’s been great. If it wasn’t for him, I wouldn’t have the confidence to do this. How he sets me up, he makes it so easy for me. He gave me so many tips to use,” Brown said. Miller and Brown have a spotter that helps them quickly identify players in the mass of action occurring seven stories below them on the Ford Field turf, and the duo also uses hand signals and other tools to ensure a smooth broadcast. SEE BROWN, PAGE 21

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CRAIN’S DETROIT BUSINESS

State quality inspectors returned to DMC Detroit Receiving Hospital last week to conduct a full survey of the hospital.

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DMC Detroit Receiving gets new inspection after failed review

By Jay Greene jgreene@crain.com

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State quality inspectors returned to DMC Detroit Receiving Hospital last week to conduct a full survey of the hospital, one month after it was cited for failure to comply with Medicare conditions of participation in a limited survey on infection-control practices, Crain’s has learned. At least 38 deficiencies were found in four infection-control and patient rights standard categories at Receiving Hospital, according to the Michigan Department of Licensing and Regulatory Affairs, which conducts surveys for the U.S. Centers for Medicare and Medicaid Services. In a statement last week, DMC confirmed that surveyors from the agency arrived at Receiving on Tuesday to conduct the survey “to evaluate compliance with health and safety requirements.” A knowledgeable source in DMC said Friday the inspectors were still at the hospital, but Crain’s could not confirm that fact with DMC or CMS. The DMC statement said the hospital, which is owned by Tenet Healthcare Corp, a for-profit chain based in Dallas, welcomed the inspectors. On Nov. 21, DMC submitted to CMS a 27page letter that outlined how it plans to correct the deficiencies in patient rights and infection control. “We expect this survey to continue over the coming days, and the hospitals’ certification to treat federal program patients will continue without interruption throughout the survey process,” DMC said in the statement. DMC did not respond for further comment. Deficiencies at Receiving included possibly unauthorized restriction of nonviolent patients, patients with surgical-site infections not properly evaluated by quality assurance, surgical patients who could have been exposed to infectious agents from dirty instruments not properly evaluated for possible infections and surgical staff not following proper hand hygiene and glove use rules. In one incident, LARA inspectors said a surgical staff member told of an incident in September where an ink pen was found inside a surgical instru-

Need to know JJ Receiving was cited for a variety of deficiencies in infection control practices JJInspectors were expected to spend several days at Receiving JJCitations follow inspections found similar problems at Harper University Hospital

ment tray in the operating room. No documentation was immediately found on the event and the central processing department director was unaware of it. After a short investigation it was discovered that the ink pen was discovered Sept. 27 before surgery on a 50-year-old male. The dirty tray was removed and a new tray brought in to complete the surgery. No other information was available on the incident. The LARA report also noted that there were six contaminated instrument events documented by Detroit Receiving from Sept. 15 through Oct. 5. However, only two of five patients who were involved in the dirty instrument problems were reviewed for possible infections. Moreover, six of seven patients with documented surgical site infections were not evaluated by the performance improvement program, LARA said. In 2016 and 2017, DMC also was cited for multiple infection control infractions by state and federal regulators. DMC later submitted a plan of corrections that was accepted by CMS. In response, DMC restructured its sterile processing department, including creating a second one at DMC Children’s Hospital of Michigan, Crain’s has reported. Each day, DMC’s sterile processing department cleans and assembles thousands of instruments into surgical sets, or trays, for the hospitals of the DMC’s downtown campus, which includes Receiving, Harper, Hutzel Women’s and DMC Cardiovascular Center. In an Oct. 7 article on problems with DMC’s cardiology program, Crain’s reported infection control and instrument cleaning allegations by physicians and other staff. From Oct. 15-18, LARA inspected Receiving Hospital and Harper Hospital. It also inspected

Children’s Hospital based on separate complaints. A CMS report obtained by Crain’s found no quality problems at Children’s Hospital for the departments it surveyed. Earlier this week, Crain’s reported that DMC Harper University Hospital was notified it was cited for at least 22 deficiencies in infection-control quality standards, CMS said. Deficiencies at Harper included bugs flying around intensive care unit patient areas, dirty kitchen and food handling areas and a surgical instrument tray opened potentially too early for the operation and improperly covered with blue towels that violated infection control rules. “Although surveyors have not yet arrived at Harper University Hospital, we will work with them when they do arrive,” DMC said last Wednesday morning. “DMC remains committed to providing residents of Detroit with safe, accessible, quality care. This commitment is central to our mission and everything we stand for.” On Nov. 7, DMC Detroit Receiving received a letter from CMS notifying it that it failed to be in compliance with four standards on patient rights, infection control, infection-control program and infection-control leadership that included about 38 separate incidents of deficiencies. “The deficiencies cited are significant and limit your hospital’s capacity to render adequate care and to ensure the health and safety of your patients,” according to the letter from CMS to Harper officials. “Your hospital is subject to termination from the Medicare program for noncompliance with the Medicare conditions of participation,” CMS said. While CMS always provides this language when notifying a hospital it is subject to an unannounced inspection following complaints, CMS inspects hospitals more closely that have been subjects of multiple inspections and complaints. However, the only remedy CMS has to discipline hospitals is termination from the Medicare program, a very rare and unlikely event for hospitals but one that would have far-reaching financial consequences. SEE INSPECTION, PAGE 6

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COURTESY OF US SIGNAL

The 100,000-square-foot new data center in Van Buren Township is slated to be completed in the fourth quarter 2019.

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“Should CMS decide to impose termination (from Medicare), at that time, you will receive official notification of our decision and have the right to request a hearing before an administrative law judge of the United States Department of Health and Human Services’ departmental appeals board,” the CMS letter said. Some of the 38 deficiencies in standards found at Receiving by CMS included: J Failure to ensure that the physician order for the restriction of freedom of movement for a nonviolent patient was renewed in writing at least every 24 hours. This resulted in unauthorized use of restraints on at least three patients. J Failure to maintain an ongoing infection-control program designed to prevent, control and investigate infections and communicable diseases for the last 12 months reviewed. This could result in the potential for transmission of infectious agents for all patients served by the facility. J Failure to ensure the infection-control plan and surveillance policies followed national guidelines. This resulted in failure to report, investigate and implement correction measures for non-government mandated reported surgical site infections found over the past year. J Failure to follow infection-control policies for donning and removing gloves and hand hygiene in the operating room. Failure was found in three of five observations during the visit. J Failure of the CEO, medical staff and director of nursing services to ensure the hospital quality assessment and performance improvement program addressed infection-control issues in seven out of 15 patients with surgical site infections. J Failure of top responsible executives to ensure breaches in sterile process-

the Van Buren data center, on Haggerty Road near I-275 and I-94, would cost to build. The company said in a press release that most of its data centers are at least 200 miles away from each other and operate on different power grids to minimize the negative effects of natural disasters, and that their locations in cooler Midwestern climates help with energy efficiency. US Signal declined to disclose the contractors on the project. ing of surgical instruments were documented, investigated and corrective measures implemented. Within the deficient standards, LARA inspections noted the following incidents: J Three of four nonviolent patients with restraints were found to be in “soft restraints” more than 24 hours and longer than authorized. J Neurological surgeries were assessed as high risk for surgical site infections, which should have triggered a management intervention. However, no risk analysis was done. Staff reported that layoffs prevented full reviews. J Two patients with spinal surgeries developed surgical site infections in February. However, review of reports to management found references of no infections. Other documents showed that one neurosurgery patient and three other patients developed infections. J Staff were observed moving patients to an operating room table without following hand hygiene procedures. The same staff were then observed removing nonsterile gloves and opening a supply cabinet to remove sterile gloves. In response to the CMS report, DMC prepared a lengthy plan of correction to address the deficiencies. It includes: J Rules and policies were changed to ensure patient restraint authorizations are completed before the end of the 24hour period J DMC’s infection control committee will meet monthly to address all incidents of infections. J More training and education of staff that includes proper sterile techniques, hand washing and use of gloves. J Communication will be enhanced to ensure reports of surgical site infections reach appropriate managers, including the CEO, chief nursing officer and director of quality and patient safety. J Noncompliance with all rules will result with correction action according to medical staff bylaws and employee rules.

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Burns: How are you trying to get the word out to the Catholic community? Moloney: We’re working with partners like Children’s Hospital of Michigan Foundation and with the Bishops and the Archbishop to help parishes learn about this option. We’re also working with a variety of networks, like the Young Adult Catholic Professional group. Our hope is to educate young adults and families to understand the value and the importance of giving. There’s a shift in how young adults and millennials give and we want to make sure they’re educated. Burns: Where do you see the Catholic Foundation in 5-10 years? Moloney: We want to serve at the center of Catholic philanthropy and be present to Catholics and non-Catholics alike, who want to have their investments in line with their values. All of our investments are in line with socially and morally responsible investment guidelines. Ideally, we would have an endowment at every parish and at every Catholic school. We intend to be here in the long-term and to grow and be of service in a more impactful way, giving more funds, supporting more families.

make their next meal. We’re providing supplemental food for these students. The biggest distraction to learning is somebody who is hungry. Burns: Is this generation more at ease discussing depression? Martell: We’re trying to remove the stigma; that helps students who have depression to seek help. We’re not necessarily sure we have the resources to meet that need because we probably have students who are waiting to see counselors and psychiatrists. Burns: A clinic might get 40 walk-ins a day of students who self-describe themselves as having some issues. It’s hopeful they’re looking for help. Martell: I’ve been at MSU for 33 years and I’ve seen the evolution of the student. Students today are very distracted by technology. We call it distracted living because they don’t necessarily have the sense of the environment around them to make good decisions about getting help. Coming to any university, students are facing the same types of problems. We are the first university in the state of Michigan to supply housing for students who are in recovery. There are probably 1,200 students at MSU that need support.

Larry Burns: Tell us about your role at Children’s Hospital. Dr. John Dentel: One thing people may not understand is that as a congenital heart surgeon our patients may be a couple hours old or may be 50 or 60 years old. We follow these patients from birth until the end. It’s nice to have a little bit of primary care side of it; you’re that stable physician for them. Burns: What makes the Children’s Hospital of Michigan special and what do families need to know about a dedicated pediatric hospital versus a community-based hospital? Dentel: It’s the subspecialists. Everyone is pediatric trained at some level. On top of that, the resources-- as far as what an adult needs being different than what a child needs-- are all available at Children’s. Burns: All of those specialists, including nurses, are trained to deal with children, and not adults. That’s also important, correct? Dentel: It is and it’s interesting because you’re treating the whole family; you’re trying to help the parents understand what’s going on, but also taking care of the child. The nurses have to balance that. Burns: Children’s Hospital of Michigan just cut a ribbon on the new lobby and tower, a $150 million investment into the hospital making it even more stateof-the-art. Dentel: We also have a brand-new, state-of-theart operating room and a dedicated cardiac intensive care unit that’s a step off from the PICU so that we have our patients all in one place.

Burns: Tell us about research at Children's Hospital and how it might impact what you're able to do for your patients? Dentel: One thing that I was exposed to in Seattle was heart transplants. They’ve been doing them for close to 20 years and we actually did 20 heart transplants in the academic year that I was there. I noticed early on, that we had a couple patients that stopped taking their medications and there were concerns about compliance and medical adherence. I wanted to understand this better and how can we help these patients. We looked at all of our transplant patients to see if there was a correlation between compliance and outcomes. We found that if you didn’t show up to appointments at least 95% of the time, you were at risk for surviving after your transplant. We’re looking at the data more intimately trying to help modify that risk factor.

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OPINION COMMENTARY

Déjà vu: Same old political battle brewing over roads

emocratic Gov.-elect Gretchen Whitmer is on a collision course with the Legislature’s new Republican leaders on fixing Michigan’s crumbling roads as they disagree on the urgency to invest more money in transportation infrastructure — and where to get the money. State Sen. Mike Shirkey, the incoming Senate Majority Leader, wants the Legislature to stick to its 2015 road-funding plan of adding $1.2 billion in new spending — up from $3.2 billion — by 2021. “And then we take a snapshot and say, ‘OK, what has that accomplished? Is it enough? Or is it still a shortfall?’” the Jackson County Republican said in an interview. State Rep. Lee Chatfield, who will become speaker of the House next year, wants to revisit a past failed effort to untangle the 6 percent sales tax that’s embedded in the price of gasoline at the pump, but is diverted largely to schools. “We have to solve the real underlying problem and make sure road funding isn’t being siphoned off every single year,” said Chatfield, a Republican from Emmet County. “And the fact is by eliminating the sales tax at the pump and making that up in a revenue-neutral gas tax, we’ll be dedicating nearly $1 billion in additional funding to our roads.” Chatfield’s plan also would blow a $1 billion hole in the sales tax-dependent School Aid Fund, causing a host of other budgetary battles as lawmakers would have to reprioritize spending to avoid making deep cuts to K-12 schools, community colleges and universities.

CHAD LIVENGOOD clivengood@crain.com

Shirkey and Chatfield’s approaches to road-funding are déjà vu for the battle outgoing Gov. Rick Snyder’s administration spent years waging. Hoping not to repeat Snyder’s fate, Whitmer has vowed to go to the ballot in 2020 and ask voters for permission to issue billions of dollars of new state debt for infrastructure investments if the Legislature won’t raise fuel and registration taxes on motorists. All of this early positioning by Michigan’s next top leaders has the makings of a political stalemate. Whitmer will likely pick up where Snyder left off trying to get outstate Republican leaders to take seriously the real adverse impact deteriorating roads have on the state’s economy. Four years ago this month, Snyder’s political capital from winning re-election and keeping the GOP firmly in control of Lansing wasn’t enough to convince fellow Republicans to raise the gas tax 21 cents per gallon to provide a sustainable and immediate source of new revenue to fix Michigan’s crumbling roads and bridges. Instead, Jase Bolger, the speaker of the House at the time, forced Snyder

A new kind of CARE package I

don’t know how many people remember CARE packages, distributed first to people affected by the ravages of World War II and later to the needy around the world. In recent weeks, we’ve read and seen the “caravan” of hundreds, perhaps thousands, of people south of our border who are learning that they won’t be able to enter the United States as they hoped. Some have actually headed back to where they started. Maybe we need a new kind of CARE package — not just food and clothing, but directing aid — we spend billions already — to create safety and economic opportunity for people who have risked everything to enter the U.S. I don’t want to get into the politics of how we should handle the people hoping to enter the U.S. illegally or to apply for asylum. But certainly the Red Cross can help support with the basic needs of food and clothing. It’s a global organization known for neutrality. Beyond that, I have no solution. And even this idea of providing the basics, food and clothing, is bound to be controversial. And it’s short term.

KEITH CRAIN Editor-in-chief

I don’t know how long this stalemate will last but I am sure that any help right now would be greatly appreciated without making any commitment to the refugees that are in Mexico. This is no solution but it could be helpful — maybe even helpful to the countries through which these migrants are traveling. Even the mayor of Tijuana has appealed to the Mexican government and the United Nations for humanitarian aid to support the surge in migrants who have stopped in his city. Maybe it’s time for a new kind of CARE package.

and Senate Republicans who voted for the fuel tax hike down a more complicated path in a bid to remove the sales tax from gasoline so that all taxes paid at the pump get pumped into the roads. To satisfy Bolger and House Republicans, Snyder and lawmakers on both sides of the aisle — including then-Sen. Whitmer — concocted an amendment to put before voters that would have removed the sales tax on gasoline, replaced it with a higher fuel tax generating $1.2 billion more for roads and raised the sales tax by one cent to make the schools more than whole. It was a Christmas tree only a lameduck Legislature could erect, complete with ornaments that had nothing to do with fixing roads (like restoring an income tax credit for lower-wage earners and requiring an adequacy study for K-12 education funding). Proposal 1 had to be illustrated with a byzantine diagram, underscoring why it was ultimately doomed. Five months later, Michigan voters shot down Proposal 1 in a special statewide election in a historic four-to-one shellacking. In November 2015, Snyder begrudgingly accepted a compromise to get his $1.2 billion more per year for roads: a 7-cent gas tax increase and 20 percent vehicle registration fee hike to raise $600 million in new revenue that took effect Jan. 1, 2017. The remaining $600 million is gradually being siphoned from the state’s general fund by 2021. That’s the plan Shirkey wants to stick to, even though a 21st Century Infrastructure Commission appointed by Snyder concluded that plan is $1.5 bil-

lion short of what’s needed annually. The Michigan Department of Transportation has said overall pavement conditions on state trunkline roads will continue deteriorate every year, even with the extra $1.2 billion each year. “At the time of passage in 2015, this package was allowing us to fall further behind,” said Mike Nystrom, executive vice president of the Michigan Infrastructure & Transportation Association. Shirkey argued road agencies are “having challenges” spending the new money fast enough. “So there’s no reason to attempt to spend more than we have the capacity to actually intelligently deploy,” he said. That’s news to the organization that represents the state’s road-building companies, Nystrom said. “I haven’t heard that one iota,” Nystrom said. “The industry is not at capacity. I think that’s a political red herring.” While Shirkey and Chatfield are going down different avenues, a predictable showdown with Whitmer could be avoided altogether. With gas prices currently under $2.20 per gallon in much of the state, if there were the political will, the Legislature could pass a 15-cent gas tax this month in the lame-duck session without the blowback lawmakers usually get when gas approaches $3 per gallon. “The sooner we get to work on it, the better,” said Senate Minority Leader Jim Ananich, D-Flint. Next year, it won’t get easier, with 30 of the 38 Senate seats turning over and term limits changing one-fifth of the

House’s membership. “There’s definitely some logic to it,” Ananich said of voting to raise the gas tax now. But it’s not a plan being pushed by Snyder or GOP legislative leaders as they’re more focused on scaling back the new minimum wage and paid sick time laws and other political priorities before Whitmer takes over. A 15-cent gas tax hike could raise nearly $800 million more annually for roads, bringing annual new revenue to about $1.4 billion. A 20-cent gas tax hike, like the one Snyder and Senate Republicans pushed for four years ago, would generate $1 billion more, bringing new spending to $1.6 billion. That still would be more than $1 billion short of the $2.7 billion that Snyder’s infrastructure commission concluded is needed to replace a rapidly aging transportation infrastructure. In Macomb County alone, the state’s third-largest county has 803 lane-miles that need repaving and 44 bridges that need to be replaced (four are closed) at a price tag of $1.2 billion — the spending increase goal for the entire state. So far, the revenue from the 2015 plan that began trickling in last year has amounted to $8 million annually for Macomb County — enough to repave five miles of two-lane roads, Macomb County Executive Mark Hackel said. Hackel, a Democratic ally to Whitmer, said the course Chatfield and Shirkey are preparing to take sends a clear signal for the next two years. “We’re going to continue to do nothing,” Hackel said. “That’s what I’m hearing.”

C R A I N ’ S D E T R O I T B U S I N E S S // D E C E M B E R 3 , 2 0 1 8

Time for change on our region’s nonprofit boards

e stand at a pivotal time for the future of the nonprofit sector in our region. Now is the time for businesses and corporate leaders to take advantage of an opportunity to make an even stronger commitment to our community than ever before. The business community already plays a big role through its corporate social responsibility initiatives and by sitting on nonprofit boards. Yet in the face of generational change, boards must become much more diverse, in their thinking and in their recruitment practices, to help organizations sustain and grow. In just less than four years, there have been an estimated 240 nonprofit CEO turnovers in Southeast Michigan. Even though that large number was predicted and replicated nationwide with the change in leadership, mostly due to baby boomer retirements, some of that movement has been driven by other market forces which boards must better understand. As board governance moves to more of an entrepreneurial model, such as driving earned revenue, social enterprise and other emerging tools, it is imperative that nonprofits, foundations and businesses are on the same page when it comes to succession planning for the C-suites at charitable organizations and institutions, as well as succession planning for boards of directors themselves. That should include terms for members, better recruitment of potential leaders and other strategies. Board members need to come to

TALK ON THE WEB

OTHER VOICES Gary Dembs

the table more aggressively and contribute deeper strategic thinking, based on their business practices and on other board service examples they have witnessed. There have

been too many instances locallyof lack of board oversight, or where outgoing nonprofit CEOs have had their thumbs pressed too tightly on controlling their board, much to the detriment of the people they are supposed to be serving. To rectify that troubling trend, board members must: JJFocus on sustainability and growth to further their organization’s missions, with a greater emphasis on accountability in financial projections and reporting to their funding sources JJTake charge of CEO succession planning, invest in growing talent in-

ternally and put resources behind education and training of executives JJTake a much longer view of future board leadership by recruiting a younger and more diverse talent pool to the full board level, earlier every year. Collectively, the nonprofit sector needs to do a better job of convening board members from various organizations much more regularly, to share best practices, trends in the industry, and to have more meaningful conversations about potential mergers and collaborations, which have been lacking in the sector. A renewed focus on board roles

and responsibilities, separate from, and sometimes in conjunction with nonprofit CEOs, will help everyone. Additionally, more aggressively identifying and placing future leaders on the board and staff levels will benefit every stakeholder impacted by the sector. Together, let’s keep the positive momentum going, for the future of our region. Gary Dembs is the founder and principal of the Non-Profit Personnel Network, a search and consulting firm serving the nonprofit sector, based in Southfield.

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Re: GM may close Detroit-Hamtramck, Warren plants You can thank Trump for the steel tarrifs that are partially responsible for this decision by GM. Mastadon FCA is cleaning GM’s clock. Jeep and Ram are making money hand over fist, and oil is at $51 a barrel. The late Sergio Marchionne was 100 percent right and ahead of his time. I’m sure he’s looking down, laughing at GM. This is entirely on Bloody Mary’s hands for putting out noncompetitive product. ALEX Painful but lessons learned. john With automation and other changes in the automobile industry, this is only the beginning of what we will see long term across all companies within the industry nationwide. While still profitable, GM needs to do these things to keep ahead of the curve. I just hope that they consider metro Detroit plants differently than they consider the rest of the county. This is the home where they look to attack global talent and their role in making this a competitive community should not be ignored. Closing Hamtramck (without a follow-up product) will have a harsher impact on the community they call home than closing any other plant in the United States. E M Parmelee

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FOCUS FINANCE

CMBS market rises More loans, fewer delinquencies fuel improvements in Metro Detroit By Kirk Pinho kpinho@crain.com

The commercial mortgage-backed securities market in metro Detroit continues to see marked improvements over the last year. Industry data from New York Citybased Trepp LLC shows an overall positive trajectory for CMBS debt as there are more loans on the books, fewer delinquencies, lower overall delinquent balances and delinquency rates and a higher aggregate loan balance in the Detroit-Warren-Livonia metropolitan statistical area. All of that bodes well — for now — for the local real estate market, which relies on the CMBS financing for a variety of things, including building purchases and debt refinancing, among others. “There is still plenty of capital available in the marketplace,” said Dennis Bernard, founder and president of Southfield-based Bernard Financial Group. “We are in the ninth inning of an extra-inning game of the real-estate cycle. It’s long and nobody knows when it will end. But unlike in the past, underwriting has stayed appropriate.” The region’s borrowers are faring slightly better than the national average, according to Trepp data. Overall, the national delinquency rate was 3.42 percent in October, compared to 5.21 percent in October 2017, while Southeast Michigan’s fell to 2.86 percent in October from 5.08 percent in October 2017, according to Trepp. Not everything is necessarily rosy. A national expert warns of possible broader disruption in commercial real estate finance in the next 6-18 months, although not in the CMBS market. “The question of the next commercial real estate finance disruption is not a matter of when, but how,” writes K.C. Conway, the chief economist for the CCIM Institute, in a new report issued last week. “It will not be caused by a subprime mortgage crisis or overleverage in the commercial mortgage-backed securitization market. The likely suspects this time around will be a combination of rising interest rates and a disruption in liquidity for commercial real estate lending as a result of accounting, regulatory and financial product shake-ups.” The total commercial real estate debt loan in the United States is $4.1 trillion, according to the report, called “Commercial Real Estate Finance Disruption: Deja Vu or Something New?” Of that, 9.1 percent is

GETTY IMAGES/ISTOCKPHOTO

CMBS delinquencies fall Data is for the Detroit, Warren and Livonia statistical area.

Period

Total Loan Balance ($MM)

Delinq. Loan Balance ($MM)

10/2017

6,320.66

11/2017

Delinq. Rate (%)

Total Loan Count

Delinq. Loan Count

321.29

5.08

543

6,500.54

297.42

4.58

548

12/2017

6,907.87

296.60

4.29

553

01/2018

6,870.09

295.79

4.31

550

02/2018

7,078.31

285.71

4.04

556

03/2018

7,142.81

270.04

3.78

555

04/2018

7,442.22

266.43

3.58

552

05/2018

7,522.42

257.80

3.43

553

06/2018

7,542.64

238.63

3.16

557

07/2018

7,567.39

222.98

2.95

558

08/2018

7,701.74

220.06

2.86

568

09/2018

7,692.23

219.27

2.85

569

10/2018

7,649.33

219.02

2.86

565

Source: Trepp LLC

CMBS debt while the majority, or 52.7 percent, is from commercial banks. Life insurance companies provide 11.6 percent of the CRE financing, the report says. Still, however, local experts remain optimistic moving forward for a variety of reasons. Industrial and office vacancy rates remain low. The industrial market, in spite of last week’s news from General Motors that it plans to shutter two local plants and three others, continues to enjoy record-high leasing rates and high occupancies. “The occupancies are up, especially with industrial and flex. They are probably at an all-time high. We are seeing market vacancy less than 5 percent for industrial and flex space in metro Detroit,” said Matthew Shane, managing director of Birmingham-based Lutz Real Estate Investments. And office markets ranging from Detroit’s downtown core to the suburban corporate hotbeds like Southfield, Troy, Farmington Hills and Auburn Hills are filling up space,

Market numbers Here are the by-the-numbers snapshots: J Total delinquent loans, October 2017/ October 2018: 20/12. Bad debt being shed. J Total loan count, October 2017/October 2018: 543/565. More loans on the books. J Delinquency rate, October 2017/ October 2018: 5.08 percent/2.86 percent J Delinquent loan balance, October 2017/ October 2018: $321.29 million/$219.02 million J Total loan balance: $6.32 billion/$7.65 billion

Source: Trepp LLC

Bernard said. “Office is really finally coming back in the suburbs. Most of the suburbs are 85 to 90 percent occupied, which is healthy. It’s been 10 years of slowly coming back up,” Bernard said. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

C R A I N ’ S D E T R O I T B U S I N E S S // D E C E M B E R 3 , 2 0 1 8

Delta to roll out facial recognition technology at Detroit Metro Airport By Annalise Frank afrank@crain.com

Delta Air Lines Inc. is expanding facial recognition technology to Detroit Metropolitan Airport’s McNamara Terminal. The technology reduces the hassle of finding tickets and passports, Delta says. It claims that based on initial data, the biometrics system is saving travelers at an Atlanta terminal an average of 2 seconds at boarding and 9 minutes overall per wide-body aircraft. The airline started fully installing the optional service there in mid-October. The technology comes to all 14 international flight gates at McNamara through a partnership between Atlanta-based Delta; the airport’s manager, the Wayne County Airport Authority; and U.S. Customs and Border Protection.

customers the option of moving through the airport with one less thing to worry about, while empowering our employees with more time for meaningful interactions with customers,” West said in the release. Detroit airport officials welcome the upgrades. “It is a great honor for Detroit Metropolitan Airport to become one of

the nation’s first biometric terminals,” Chad Newton, Wayne County Airport Authority Interim CEO, said in the release. “As a world-class airport, we are continuously seeking ways to enhance the customer travel experience.” Annalise Frank: (313) 446-0416 Twitter: @annalisefrank

Need to know

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JJMcNamara Terminal to get new

boarding method at all international gates by mid-December JJOption involves looking at screen, then walking through security

WHERE EXPERIENCE AND INNOVATION INTERSECT.

JJAirline started testing technology on one metro Detroit flight last summer

“Delta’s successful launch of the first biometric terminal in the U.S. at the world’s busiest airport means we are designing the airport biometric experience blueprint for the industry,” Delta COO Gil West said in a news release. After years of testing at Hartsfield-Jackson Atlanta International Airport and John F. Kennedy Airport in New York, facial recognition debuted in July at Detroit Metro Airport for boarding on one particular flight. Now it will be implemented at all of the terminal’s international boarding gates for use by Delta and partner airlines Air France and Aeromexico by mid-December, the release said. In 2019, the airline is expected to extend the option to all international ticket check-in points, from self-service check-in to baggage check and arrival in the U.S. This would make metro Detroit the second city after Atlanta to get a fully facial-recognition-enabled international terminal. Delta declined to elaborate on its partnerships or disclose costs. Travelers can still opt out of using the technology and proceed as usual. Less than 2 percent have opted out so far in Atlanta, according to Delta. For passengers trying it, they should still bring a passport. Here’s how it works: J Enter passport information during online check-in. J Click “Look” on the screen at the lobby kiosk where you’re checking in, or approach the camera when boarding or at a TSA checkpoint. J Wait for a green check mark to appear on the screen. J Walk through. “We’re removing the need for a customer checking a bag to present their passport up to four times per departure, which means we’re giving

DELTA AIR LINES

Atlanta-based Delta Air Lines started rolling out facial recognition technology across a full terminal in Hartsfield-Jackson Atlanta International Airport in mid-October.

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Irving Nusbaum, face of New York Carpet World, dies at 85 By Kurt Nagl

knagl@crain.com

Irving Nusbaum, the face of former retail empire New York Carpet World, died Tuesday in his Franklin home. He was 85. Along with his late business partner Marvin Berlin, Nusbaum built the Southfield-based carpet company into a $650 million operation with 180 stores across the country before selling it in 1996. In the past few years, Nusbaum’s health declined severely; he was on dialysis and immobile from two broken hips, said his son, Robert. He recently developed sepsis, which he was unable to fight off. “It was a very peaceful, painless ending,” Robert Nusbaum said. “My dad and I spoke pretty much every day. We were partners in just about everything.” Those watching television during the carpet seller’s heydays of the 1980s and early 1990s would remember Nusbaum as a down-to-business salesman pitching “drastic price cuts” during 30-second commercials. He was one of the best-known local examples of CEO-as-pitchman, and he was a “marketing genius,” his son said. “The sale ends Wednesday and starts again Thursday,” his son said. “That was his thing.” Irving Nusbaum inherited the business from his father, Abraham, who emigrated from Europe and began wheeling supplies around doorto-door with a wheelbarrow in the 1920s. He grew the business to three stores in Detroit and Hamtramck. Irving Nusbaum took over the company at age 24 when his father died in 1957. Aggressive advertising fueled the business, and it expanded to 17 states at its peak as the largest floor-covering retailer in the country. Robert

Irving Nusbaum

“The most important lesson I learned from my dad is how you conduct yourself not just as a businessman, but as a person. When you die, you don’t take your money or anything else with you. You just take your name and your word.” Robert Nusbaum

Nusbaum joined his father in the business after graduating college in 1983 and worked his way up to vice president. “The most important lesson I learned from my dad is how you conduct yourself not just as a businessman, but as a person,” he said. “When you die, you don’t take your money or anything else with you. You just

take your name and your word.” Irving Nusbaum and Berlin sold the company in 1996 to Georgia-based Shaw Industries Inc. for an undisclosed sum. Shortly after, Shaw was acquired by Berkshire Hathaway Inc. Once retired from the company, Nusbaum focused on his real estate portfolio — he owned the property of about 150 of his stores, along with other partners, including his sons Robert and Arthur — and philanthropic efforts. The family portfolio today includes dozens of industrial, residential and office properties around the country, Robert Nusbaum said. He said he is a partner with Farmington Hills-based Dembs Development Inc. on the recently purchased former Federal-Mogul Corp. headquarters in Southfield. In 2011, Irving Nusbaum and Berlin donated the carpet company’s defunct headquarters — a 92,000-square-foot building in Southfield on the northeast corner of Eight Mile and Southfield roads — to Gleaners Community Food Bank of Southeastern Michigan. “There is no higher purpose that I could envision for this place that meant so much in my life,” Nusbaum said in a statement in 2011. Nusbaum is survived by his wife of 61 years, Barbara; sons Arthur and Robert; brother Frances Fetter; and five grandchildren. Funeral services were Thursday at Ira Kaufman Chapel in Southfield. Internment will take place at Beth Abraham Cemetery in Ferndale. Religious services were scheduled at the chapel at 7 p.m. Thursday, Sunday and Monday. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

Accelerator celebrates $1 million in investment, opens 2019 applications By Kurt Nagl knagl@crain.com

The Desai Accelerator is accepting applications for its 2019 summer cohort of startups and celebrating $1 million of investment since it started seed-funding small businesses in 2015. The program, run by the University of Michigan’s Zell Lurie Institute of Entrepreneurial Studies and Center for Entrepreneurship, has so far invested in 25 local businesses that make everything from infant warming blankets to neuroscience-based music discovery playlists. The accelerator invested a total of $150,000 in six businesses in the 2018 cohort. Applications, which can be completed online, close Feb. 3. The amount invested in a cohort depends on the number of businesses participating, which also varies with each cycle, said spokeswoman Jillian Saftel. Some years there are two cohorts and some years there is just one, depending on interest and funding availability. Each business in a cohort is typically given a $25,000 investment, but

Need to know JJUM-backed accelerator has invested $1 million since 2015 J

Applications for 2019 close Feb. 3

J 25 businesses have received seed funding

“As our mission is to help startups make it to their first million dollars, it is truly satisfying to be hitting our one millionth dollar invested.” Angela Kujava

it can apply for more after completing the program, which includes access to legal services, human resources and mentorship from the UM alumni network. “As our mission is to help startups make it to their first million dollars, it is truly satisfying to be hitting our one millionth dollar invested,” said

Angela Kujava, managing director of the accelerator, in a written statement. Several businesses have made big strides since winning investment from the accelerator, including Ash & Erie Inc., a Detroit-based online clothing retailer that won $150,000 on ABC’s “Shark Tank” last year and was featured in Forbes 30 Under 30 — Retail & Ecommerce 2019 list. Additionally, MySwimPro, a workout and training app developer based in Ann Arbor, was named by Apple as the 2016 Apple Watch App of the Year. Saftel said if there is return on the accelerator’s investment, it goes back into the investment fund. It hasn’t seen any return yet because it usually takes five to 10 years for startups to begin turning a profit. The accelerator was founded in 2013 and is funded by the Desai Sethi Family Foundation, the Davidson Foundation, the Wadhams family and the Michigan Economic Development Corp. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

C R A I N ’ S D E T R O I T B U S I N E S S // D E C E M B E R 3 , 2 0 1 8

Aptiv’s tech center in Troy OK’d for $30.7M tax capture By Dustin Walsh dwalsh@crain.com

Aptiv PLC will get to keep up to $30.7 million of its employees’ tax withholdings by creating 500 jobs at its Troy headquarters. The Michigan Strategic Fund on Tuesday approved the 10-year Good Jobs for Michigan tax capture for the autonomous-vehicle technology supplier, allowing the company to keep the income tax withholdings for 500 new engineers, support staff and electronic labs technicians as part of the relocation. Aptiv is expected to invest between $20 million and $30 million on the project. The Michigan Economic Development Corp. said in a memo that allowing Aptiv to keep its employees’ tax withholdings is necessary to sway the company to create its active-safety engineering center in Troy over Indiana, where it was also considering. Aptiv plans to keep an office and headcount in Indiana, according to Rachelle Valdez, vice president of marketing and communications at Aptiv. As part of the project, Aptiv will renovate up to 186,000 square feet of its 381,713 square feet of space at 5725 Innovation Drive in Troy, the MEDC said in the memo. The company leases an additional 92,000 square feet to Delphi Technologies, which spun off from the company earlier this year. The Good Jobs for Michigan program was created as part of a threebill package in 2017 when the state was pursuing massive investments from Taiwanese electronics manufacturer Foxconn and Amazon’s HQ2. Foxconn went to Wisconsin and Amazon recently announced it would split its second headquarters between New York City and suburban Washington, D.C. The Michigan program allows businesses to keep all new employees’ income tax withholdings for 10 years for creating 3,000 or more jobs that pay at least the average regional wage; keep half the income tax withholdings for up to five years for creating at least 500 jobs that pay the average regional wage or more; or keeping all the income taxes for 10 years for creating 250 or more jobs that pay at least a quarter more than the average regional wage. Aptiv falls into the last category. Aptiv is the third beneficiary of the program. Pfizer and KLA-Tencor were previously approved under the program, with Pfizer capturing incomes taxes of $10.5 million for up to 10 years for 450 jobs and KLA-Tencor capturing $16.1 million of income taxes for up to eight years for creating 500 jobs. According to the program guidelines, the Michigan Strategic Fund can strike up to 15 deals a year. No more than $200 million in incentives can be awarded — a provision that backers say distinguishes the program from the old, uncapped Michigan Economic Growth Authority program, for which the state is on the hook for billions of dollars in obligated credits and which also applied to companies that retained jobs. Retail stores, pro sports stadiums and casinos can’t qualify for the new tax breaks. Lawmakers would have

Need to know JJAptiv will keep up to $30.7M of income tax withholdings to create 500 new jobs in Troy JJJobs said to pay at least 25 percent more than the regional average wage JJNew jobs are part of Aptiv’s relocation of its Indiana technical center to Michigan

to reauthorize the program if they want it to extend beyond 2019. Aptiv is headquartered in Gilling-

ham, England, from a tax perspective, but its operational headquarters remains in Troy. The supplier of autonomous vehicle software employs 147,000 and operates 14 technical centers, as well as manufacturing sites and customer support centers, in 45 countries. It spun off its powertrain segment as Delphi Technologies PLC in December 2017. Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

Aptiv will renovate up to 186,000 square feet of its 381,713 square feet of space at 5725 Innovation Drive in Troy.

Michigan beckoned. Greenleaf Trust called. Growing up in Pittsburgh with Ivy League-educated parents, Leslie Labarthe Coyle was keen on reaching her own rigorous goals. Education was key, and Northwestern University was atop the list. Midway through her drive to Evanston, Leslie stopped in Ann Arbor for lunch and strolled around U of M’s campus. Her first impression was favorable, and her early acceptance soon after was too good to refuse. Arthur Anderson was her first stint after graduation, followed by banking and a foray into trusts and tax-related issues, and then a long run with a Louisville, Kentucky-based trust company where her primary client was the company’s own governance, committees, and board. After twelve years, she yearned to work directly with wealth management clients. Through LinkedIn, she learned about Greenleaf Trust and our client centric culture, core values, twenty years of growth, and how other wealth management professionals had steered their careers to us. We invited Leslie to visit. Over the course of three days of formal interviews and social interactions, she observed a culture of respect, collegiality, client-first priorities, and long-term perspective. It cemented her own long-held view that in wealth management, numbers are sometimes the easy part. And that real work and value also lie in aligning a client’s family dynamics and multi-faceted wants and needs with what their wealth can enable and sustain. It’s what Leslie feels called to do, and why she answered when we called. She’d love to hear from you, too. Peace of mind beckons.

34977 Woodward Avenue, Birmingham, MI 48009 248.530.6200 greenleaftrust.com

C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // D E C E M B E R 3 , 2 0 1 8

CRAIN'S LIST: MICHIGAN BANKS

Ranked by 2018 Michigan deposits inside market Rank

Company Address Phone; website

Top executive(s)

Michigan deposits inside market ($000,000) June 2018/2017

Number of Michigan offices inside market 2018

Michigan deposits outside market ($000,000) 2018

Number of Michigan offices outside market 2018

J.P. Morgan Chase & Co. 611 Woodward Ave., Detroit 48226 (313) 256-8500; www.jpmorganchase.com

John Carter market president

$43,832.4 $43,944.7

231

$1,230,258.6

4,913

Comerica Bank 411 W. Lafayette, Detroit 48226 (248) 371-5000; www.comerica.com

Michael Ritchie Michigan market president

30,157.2 29,480.7

195

27,928.5

242

Bank of America 2600 W. Big Beaver Road, Troy 48084 (800) 643-9600; www.bankofamerica.com

Matthew Elliott Michigan market president

19,264.2 17,841.0

107

1,293,436.4

4,365

PNC Bank

Ric DeVore, president for Detroit and Southeast Michigan

17,288.6 17,425.1

186

244,887.7

2,295

Fifth Third Bank Eastern Michigan One Woodward, Detroit 48226 (313) 230-9001; www.53.com

David Girodat president and CEO, Eastern Michigan

16,530.1 16,954.5

208

91,636.1

965

Huntington National Bank

David Lochner B president of Eastern Michigan

15,767.0 15,199.5 C

316

66,869.4

695

4 5 6

755 W. Big Beaver Road, Troy 48084 (800) 243-7274; www.pnc.com

801 W. Big Beaver Road, Suite 500, Troy 48084-4724 (248) 244-3541; www.huntington.com

Chemical Financial Corp. (Chemical Bank) 235 E. Main St., Midland 48640-0569 (989) 839-5350; www.chemicalbankmi.com

Thomas Shafer president and CEO

13,123.4 11,777.5 D

196

1,441.6

Flagstar Bancorp Inc. 5151 Corporate Drive, Troy 48098-2639 (248) 312-2000; www.flagstar.com

Alessandro DiNello president and CEO

10,297.0 9,023.8

618.5

Citizens Bank E 27777 Franklin Road, Southfield 48034 (248) 226-7998; www.charterone.com

Richard Hampson Michigan market president

5,719.3 5,537.9

84,582.7

706

TCF Bank 17440 College Parkway, Livonia 48152 NA; www.tcfbank.com

Camilla Stensen director retail banking, Michigan

3,193.9 3,010.3

15,318.2

282

Independent Bank Corp.

William Kessel president and CEO

2,820.5 2,278.0

0.0

230 W. Main St., Ionia 48846 (800) 355-0641; www.ibcp.com

Mercantile Bank Corp. 310 Leonard St. NW, Grand Rapids 49504 (616) 406-3000; www.mercbank.com

Robert Kaminski president and CEO

2,540.5 2,378.8

0.0

Wells Fargo & Co. 101 W. Washington St., Marquette 49855 (906) 228-1203; www.wellsfargo.com

David Szabo regional president

2,444.0 2,817.2

1,267,554.0

5,856

Macatawa Bank Corp. 10753 Macatawa Drive, Holland 49424 (616) 820-1444; www.macatawabank.com

Ronald Haan president and CEO

1,586.9 1,465.6

0.0

KeyBank N.A.

Ted Willett president, Michigan

1,480.8 1,415.7

106,222.0

1,176

100 S. Main, P.O. Box 8612, Ann Arbor 48107 (800) 539-2968; www.keybank.com

Old National Bank 2723 S. State St., Ann Arbor 48104 (734) 887-2600; www.oldnational.com

Alex Strati Michigan region CEO

1,367.2 1,317.4

11,301.5

165

Arbor Bancorp Inc. (Bank of Ann Arbor) 125 S. Fifth Ave., Ann Arbor 48104 (734) 662-1600; www.bankofannarbor.com

Timothy Marshall president and CEO

1,314.8 1,331.6

0.0

CIBC Bank 34901 Woodward Ave., Ste. 200, Birmingham 48009 (248) 566-4700; us.cibc.com/en/home.html

Victor Dodig, president and CEO; Larry Richman, senior executive VP and group head, US region; president and CEO, CIBC Bank USA Jae Evans CEO

1,310.9 NA

17,187.5

1,278.2 1,211.7

0.0

18 19

Isabella Bank Corp. 401 N. Main, Mt. Pleasant 48858 (989) 772-9471; www.isabellabank.com

MBT Financial Corp. (Monroe Bank & Trust) 102 E. Front St., Monroe 48160 (734) 241-3431; www.mbandt.com

H. Douglas Chaffin president and CEO

1,149.1 1,179.0

0.0

Crestmark Bancorp Inc. F 5480 Corporate Drive, Suite 350, Troy 48098 (248) 641-5100; www.crestmark.com

W. David Tull, chairman and CEO; Michael Goik, president and COO

1,122.3 838.5

0.0

Level One Bancorp Inc. G 32991 Hamilton Court, Farmington Hills 48334 (248) 737-0300; www.levelonebank.com

Patrick Fehring chairman, president and CEO

1,083.2 997.7

0.0

First National Bancshares Inc. (First National Bank of America) 241 E. Saginaw, East Lansing 48823 (800) 968-3626; www.fnba.com

Ken Foote CEO

1,045.7 960.5

0.0

Mackinac Financial Corp. (mBank) 130 S. Cedar, Manistique 49854 (906) 341-8401; www.bankmbank.com

Kelly George, president of Mackinac Financial Corp., president and CEO of mBank; Paul Tobias, chairman and CEO Mackinac Financial Corp., chairman of mBank

881.5 705.5

148.6

SOURCE: FDIC This list ranks banks and bank holding companies with a presence in Michigan. Figures are from the FDIC's deposit market reports, which are based on the branch/office deposits for all FDIC-insured institutions as of June 30. It is not a complete listing but the most comprehensive available. Companies are listed with the address and top executive of their main metro Detroit office. Actual figures may vary. NA = not available.

B Stepped down as president effective Jan. 1, however will stay on until a successor is found. C Acquisition of FirstMerit Corp. closed in August 2016. D Acquired Talmer Bancorp Inc. in August 2016. E Charter One branches in Michigan and Ohio were rebranded as Citizens Bank in April 2016. F Acquired by Sioux Falls, S.D.-based Meta Financial Group Inc. on Aug. 1, 2018. Crestmark will operate as a division of Meta (Nasdaq: CASH) from its headquarters in Troy. G The holding company of Level One Bank, filed for an initial public offering with the SEC on March 23. It proposes to trade shares under the symbol LEVL on the NASDAQ. An expanded version of this list is available with a Crainâ&#x20AC;&#x2122;s membership at crainsdetroit.com/lists

C R A I N ’ S D E T R O I T B U S I N E S S // D E C E M B E R 3 , 2 0 1 8

Samsung plans $62.7M auto battery plant, 461 jobs in Auburn Hills By Kurt Nagl

Need to know

knagl@crain.com

JOHN SOBCZAK

Hazel Park Raceway had been in business for nearly 70 years, but struggled financially for several years as the gaming industry changed.

Hazel Park Raceway redevelopment gets $21.44 million in financing By Kirk Pinho kpinho@crain.com

The $85 million redevelopment of the Hazel Park Raceway has received state approval for $21.44 million in brownfield financing. The Michigan Strategic Fund board approved the measure for New York City-based Ashley Capital’s redevelopment Tuesday. The second phase of the Tri-County Commerce Center project is slated to bring a pair of new manufacturing, distribution or warehouse buildings to the remaining 95 acres of the racetrack

long streak of losing money, including at least $1 million annually before the switch from harness racing to thoroughbreds in 2014. Ashley Capital purchased the re-

maining 95 acres of the property later that month. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

Samsung is planning to open a $62.7 million automotive battery plant in Auburn Hills that would create 461 jobs by the end of 2024. The plant will serve as a battery pack manufacturing facility, research and development center and headquarters of auto battery operations for Samsung SDI America Inc., a San Jose, Calif.-based subsidiary of Samsung’s storage battery manufacturing company. It will be the company’s first high-volume auto battery facility in the United States and will supply rechargeable batteries for the auto, IT and energy storage system industries, according to a news release from the Michigan Economic Development Corp. Samsung’s local customers were not disclosed. The company considered a competing site in Ohio that offered immediate occupancy, room for expansion, close proximity to its primary supplier and an “extremely aggressive” incentives package from the state of Ohio, according to the MEDC. “Additional constraints to moving forward with the project in Michigan include immediate access to a qualified workforce, electricity cost and the availability of electric power,” the MEDC said in a memo. The Michigan Strategic Fund on

JJ Plant would serve as company’s first high-volume auto battery facility in nation JJJobs would be created by end of 2024 JJState awards $10 million grant

Jobs promised at the plant include production line operators, factory managers and engineers. Tuesday approved a $10 million Michigan Business Development Program grant for the project. It is also being supported by a property tax abatement from the city of Auburn Hills and a 6-mill State Education Tax abatement. Jobs promised at the plant include production line operators, factory managers and engineers. The company is considering expansion of other areas of business in the plant depending on the market. Samsung has a production presence in Auburn Hills, according to its website. It employs 130 people in Michigan and 30,000 worldwide. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

Labor and Employment Experience

In Your Corner.

Need to know JJProject to bring 1.49 million square feet

of space to Hazel Park Raceway site JJProperty already the home of 575,000-square-foot building

JJAshley Capital bought the race track's remaining 95 acres in April after it closed

site totaling about 1.49 million square feet: One about 650,000 square feet, the other 840,000 square feet, according to an MSF board memo. Ashley Capital’s state tax capture would be $6.84 million while the local tax capture would be $14.6 million. Southfield-based Signature Associates Inc. is responsible for leasing the buildings to tenants. Ashley Capital, which has its local office in Canton Township, in 2015 purchased 36 acres of the property at 10 Mile and Dequindre roads and developed the first Tri-County Commerce Center building that totals 575,000 square feet and now houses operations for Amazon.com, LG Electronics and Bridgewater Interiors. That project received $5.75 million in brownfield financing, the MSF memo says. The track at the southwest corner of 10 Mile and Dequindre roads closed in April after 69 years and a

Contact Tiffany Snow at tksnow@varnumlaw.com

Employment matters, having served as a senior account manager at a regional staffing firm for many years prior to entering the legal profession Legal education includes a litigation and estate planning focus

Tier 1 Metropolitan Ranking in Labor Law – Management and Employment Law – Management

Legal Experience In Your Corner.

Ann Arbor

Detroit

Grand Haven

Grand Rapids

Hastings

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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 // D E C E M B E R 3 , 2 0 1 8

CALENDAR

DEALS & DETAILS

TUESDAY, DEC. 4

WEDNESDAY, DEC. 5

Michigan Economic Forecast Series. 7:30-9:30 a.m. Automation Alley. The Michigan Business Network provides insights into business trends for 2019. Learn the results of the Michigan Future Business Index, which surveys business leaders and reports trends in the state’s small to mid-sized business economy. Automation Alley. $10 member; $20 nonmember. Contact: Jeffrey C Mosher, email: MichiganBusinessNetwork. com

Market Research Basics. 9-11:30 a.m. 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.

2018-2019 State of the Region. 11 a.m.-1 p.m. 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. $75 members; $130 nonmembers. Contact: Jordan Yagiela, phone: (313) 596-0384; email: jyagiela@detroitchamber.com Company-Community Partnerships for Purpose and Sustainable Impact. 4-5 p.m. Michigan Ross Center for Positive Organizations. Speakers: Kathryn Heinze, associate professor, Sport Management, faculty associate, Center for Positive Organizations, and Sara Soderstrom, assistant professor, Organizational Studies and Program in the Environment, University of Michigan. Ross Building, University of Michigan. Free. Website: positiveorgs.bus. umich.edu

Toyota In Transition: Maintaining Momentum in the Age of Mobility. 11:30 a.m.-1:30 p.m. Detroit Economic Club. Jim Lentz, CEO, Toyota Motor North America, will discuss how Toyota is managing the balance of Lentz present and promise. Moderator: John McElroy of Autoline Detroit. Westin Book Cadillac. $45 members, $55 guests of members. Website: econclub.org

UPCOMING EVENTS

Johnson

Mason

2019 Michigan Economic Outlook. 11:30 a.m.-1:30 p.m. Jan. 8. Detroit Economic Club. Speakers include: Kevin Johnson, president and CEO, Detroit Economic Growth Corp., and Jeff Mason, CEO, Michigan Economic Development Corp. MotorCity Casino Hotel. $45 members, $55 guests of members. Website: econclub.org

THURSDAY, DEC. 6

17th Annual NAIAS Breakfast. 7:30-9:30 a.m. Jan. 18. Inforum. Features a cross-industry panel that will focus on artificial intelligence and how innovations made across industries are being investigated and used in automotive. Speakers: Jason Mars, CEO and co-founder, Clinc, and professor of computer science, University of Michigan and Alisyn Malek, COO and co-founder, May Mobility Inc. Detroit Marriott at the Renaissance Center. $75 nonmember; $1,000 table sponsor. Website: inforummichigan.org

Fireside Chat with Ramzi Hermiz. 5-8 p.m. 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.

MERGERS & ACQUISITIONS  Mans Lumber and Millwork, Canton Township, lumber and building material providers, has acquired Washtenaw Door & Trim Inc., Ypsilanti Township, maker of custom doors, moulding, stairs and hardware. Websites: manslumber.com, washtenawdoor.com  Tower International Inc., Livonia, manufacturer of automotive metal components and assemblies, has an agreement to sell its European operations to Financière SNOP Dunois S.A., Brioude, France, an automotive supplier. Tower's European operations include manufacturing facilities in Belgium, Czech Republic, Germany, Italy, Poland and Slovakia and offices in Germany and Italy. Websites: towerinternational.com, snop.fr

CONTRACTS  Burns & Wilcox, Farmington Hills, a wholesale insurance broker and underwriting manager, has a partnership with BreachAware, London, England, a cybersecurity company, for cyber products and services. Websites: burnsandwilcox.com, breachaware.com  ZipLogix, Fraser, a real estate technology company, has a partnership with Sellers Shield LLC, Austin, Texas, a real estate software company, to use the company’s Smart Seller Tools, an interactive seller’s disclosure process designed to prevent lawsuits, with the zipForm Plus platform. Websites: ziplogix.com, sellersshield.com

NEW PRODUCTS 

Fathead LLC, Detroit, maker of li-

censed, life-size wall graphics of professional athletes and team logos, has introduced a new line of merchandise featuring teams and professionals of Team Liquid, Utrecht, Netherlands, an esports organization. Website: fathead.com, teamliquidpro. com  Shinola/Detroit LLC, Detroit, and the Walt Disney Company, Burbank, Calif., an entertainment company, have launched the Mickey Classics Collection, honoring 90 years of Mickey Mouse. Mickey Classics is a collection of limited-edition and special-edition Shinola Runwell timepieces, leather goods, audio equipment, wall clocks and journals showcasing Mickey Mouse. Websites: shinola.com, thewaltdisneycompany. com  North American Bancard Holdings LLC, Troy, a payment solutions provider, has introduced PayAnywhere Smart Terminal, allowing merchants to accept payments, track inventory and manage employees through a portal. Website: nabancard.com, payanywhere.com  Museum Edutainment LLC, Ann Arbor, a media company, has introduced Bardeum, a mobile app for Android or iOS devices to provide content during a museum or historical site visit. Websites: museumedutainment.com  Terumo Cardiovascular Group, Ann Arbor, provider of cardiovascular surgery technologies, has received 510(k) clearance for the CDI Blood Parameter Monitoring System 550 from the U.S. Food and Drug Administration, for monitoring of oxygen delivery to a patient during a cardiopulmonary bypass. Website: terumo-cvgroup.com Submit Deals & Details items to cdbdepartments@crain.com

Advertising Section

PEOPLE ON THE MOVE

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

LAW

REAL ESTATE

thunder::tech

Gallagher Sharp LLP

The Platform

thunder::tech is proud to announce Bruce Williams has been promoted to Vice President of the Development Department. After 16 years with the agency, Bruce will be focusing on thunder::tech’s digital transformation services; e-commerce solutions provided by multi-disciplined teams; and development of internal resources, talent and skillsets with external partners and technologies. Bruce will continue to provide strategy and alignment of solutions with clients’ unique industries and opportunities.

Gallagher Sharp is pleased to announce the addition of Jerry McDonnell as a Partner in our Detroit office. Jerry advises clients on various aspects of railroad, transportation, and logistics law. He represents railroads in all aspects of personal injury litigation, FELA, occupational injury, grade crossing accidents, property damage, freight loss, and interpreting agreements involving railroad real estate. He is a Martindale-Hubbell AV® Peer Review Rated Attorney. See www.gallaghersharp.com.

Gallagher Sharp is pleased to announce the addition of Mary O’Donnell as a Partner in our Detroit office. Mary focuses her practice on commercial transportation litigation. She represents several railroad clients in rail accidents, personal injury, wrongful death, FELA and occupational / repetitive stress injuries, grade crossings, property damage, employment, eminent domain, and other commercial matters. She is a Martindale-Hubbell AV® Peer Review Rated Attorney. See www.gallaghersharp.com.

The Platform, a real estate development company specializing in Detroit mixed-use projects, is proud to announce Edward Wizner as executive vice president of development. He will lead and manage its development team and project pipeline. Ed brings more than 25 years of experience in real estate development, specializing in large-scale, mixed-use revitalization projects. He founded Four Corners Land, a real estate development and consulting firm, and worked for RPT Realty, Ford Land, and Grand/Sakwa.

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 // D E C E M B E R 3 , 2 0 1 8

MINIMUM FROM PAGE 1

The Senate rework also caps the minimum wage for tipped workers at $4 an hour instead of matching the minimum wage of other workers at $12 an hour. Lawmakers also altered another citizen-led bill that exempted small businesses — those with fewer than 50 workers — from requiring paid sick leave. State Rep. Darrin Camilleri, a Democrat from Brownstown Township, said the slower minimum wage rampup under the Republican-authored legislation is “really troubling.” “They don’t want to pay workers essentially is what it looks like,” Camilleri said. “And they’re doing everything they can to make wages stagnant — to the best of their ability.” But the state’s small businesses, particularly those outside of metro Detroit, are breathing a sigh of relief, said Rob Fowler, president of the Lansing-based Small Business Association of Michigan. “The market should set the wage and in many places it’s at $12 right now,” Fowler said. “It’s not our position that wages should be low; we don’t want wages to stagnate. But we are opposed to the government willy-nilly setting a wage that can kill a small business in a rural community.” Fowler pointed to a member’s sewing operation in Michigan’s Upper Peninsula that pays workers near the current minimum wage, which he said would be uncompetitive if it had to pay a $12 minimum wage by 2022. “It would be a great burden for them to get there so quickly and would probably make it uncompetitive,” Fowler said. “That business has to compete on a global market and that’s much different than a McDonald’s in suburban Detroit. That’s the trouble with a one-size-fits-all approach. The economy is different in different parts of Michigan.” State Rep. Lee Chatfield, a Republican from Emmet County who will become speaker of the House next year, said the citizen-led initiative was billed “as helping working people,” but it inevitably hurts the very people it was designed to help by increasing labor costs that could make low-margin businesses unprofitable. “In turn it only hurts our business climate and business environment, which in turn will hurt the working class,” Chatfield said in an interview with Crain’s. “It’s within the Legislature’s purview to change the voter-initiated law.” But there’s been no instance since the state’s 1963 convention was ratified in which the Legislature changed a voter-initiated law in the same session in which the Legislature adopted it. Few workers in Michigan fall at the minimum wage threshold now. In 2017, about 7 percent of Michigan’s 4,276,000 workers made at or below the current minimum wage of $9.25 an hour, according to the Michigan Department of Technology, Management and Budget. Michigan’s workforce is also comprised of roughly 125,000 tipped employees exempt from the $9.25 minimum wage and another 233,000 teenagers. Under current law, teenage workers younger than 18 can be paid 85 percent of the $9.25 minimum wage. The numbers can’t tell the whole story, as some of those teenage workers were 18 and 19, hitting the traditional minimum wage requirement, and some of them are likely tippedwage employees as well.

But the reality is very few non-teenage, non-tipped wage workers in the state actually make the state-mandated minimum wage. And by 2030, even fewer may make the new minimum wage of $12 an hour thanks to market forces in a strong economy and the tight labor force. Economists like University of Michigan’s Justin Wolfers, also a public policy professor, and others project wage growth of 3 percent annually over the next decade, thanks to 2 percent inflation and 1 percent productivity gains. Annualizing the wage growth over 11 years means workers currently making the state’s $9.25 minimum wage will make $12.80 an hour in 2030 — or $0.80 more than the minimum wage will be. That doesn’t mean raising the minimum wage is meaningless, said Wolfers. “My guess is that this (population) is a large enough — and needy enough — group that it would be an overstatement to say that the $12 minimum wage in 2030 will help no one,” Wolfers said. “But equally, it’s accurate to say that it’ll probably help fewer people than the current Michigan minimum wage helps.” But 11 years is a long time and the economy has already been expanding for nearly a decade. The potential for a recession looms and workers could suffer without increased protections, said Charles Ballard, an economist at Michigan State University. “The minimum wage isn’t binding for many workers now,” Ballard said in an email to Crain’s. “On the other hand, one pessimistic possibility is that wages for low-wage workers could fare so badly in the next 12 years that there would be workers who would be paid less than $12 per hour, even in 2030, in the absence of a minimum.” James Rigato, executive chef and owner of Mabel Gray and majority owner of Doug’s Delight, both in Hazel Park, is happy the Legislature changed the tipped-wages provision in the bill, but doesn’t support the minimum-wage delay overall. Rigato, and other restaurateurs, opposed including tipped-wage workers in the $12-an-hour bill because they said it would result in servers and bartenders making less money and irreparably harm the restaurant business model. Restaurants paying higher wages would cause food prices to rise, and customers would be less inclined to tip knowing servers made a higher wage. “I’m a business owner and I’ve been in this industry for a while now and as someone inside this machine, I know way too many people who would lose their quality of life if you pushed them into a higher minimum wage and away from a gratuity system,” Rigato said. “The restaurant industry operates on such thin margins. We’re one recession way from disaster always.” But he does believe the minimum wage is too low for non-tipped wage employees in Michigan. “The original proposal was too far one way and the Republican legislation is now pushing it too far the other way,” he said. “The common ground seems to be more and more rare and this is just another pendulum swing.” Both the minimum-wage and sick leave bills adopted by the Senate last week now go to the Michigan House of Representatives. The bills can be taken up as early as Tuesday. Term-limited Gov. Rick Snyder has not indicated whether he would sign either bill. Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

Advertising Section

CLASSIFIEDS

To place your listing, contact Kate Rozek at 313-446-0485 or email krozek@crain.com www.crainsdetroit.com/classifieds MISCELLANEOUS GREEN ZONE BUILDING, MULTIPLE SIZE UNITS TO LEASE $24 SQ. FT. WHITE BOX AREA WITH PROPER ELECTRICITY SUPPLIED. NEW BUILD OUT! Billl McMachen ~ 586-915-4441

RESIDENTIAL PROPERTY

THE BEST TIME

REQUEST FOR QUALIFICATIONS

REQUEST FOR QUALIFICATION The Detroit-Wayne Joint Building Authority (Authority) is interested in securing the services of a professional service firm to develop plans and specifications for upgrades to sixteen elevators within the Coleman A. Young Municipal Center. Specifically, to provide specifications and scope of work for the following: ∂Elevator cab interior finishes (walls, hand & foot rails, flooring, etc.) ∂Elevator cab lighting ∂Elevator lobby(s) fixtures PROJECT: The Authority was created in 1948 to develop, own and operate the 745,000-square foot Coleman A. Young Municipal Center which was constructed in 1953 at a cost of $26,000,000. Major tenants are the City of Detroit (the “City”) and the County of Wayne (the “County”). ∂The sixteen elevators (fifteen passenger and one freight) will be modernized as part of a capital improvement plan ∂Specs for the interiors must be determined prior to finalization of modernization scope ∂Successful A&E firm will work directly with elevator consultant and eventual successful elevator contractor Interested firms should provide their qualifications to assist the Authority in achieving these goals. Your response should include the following:

FOR THE LOWEST PRICES OF NORTHERN MI WATERFRONT IS NOW… IN THE WINTER! JOE BLACHY (231) 409-9119

JOE@JOEBLACHY.COM JOEBLACHY.COM CALL ANY TIME BETWEEN 7AM AND 10PM 420 HOWARD STREET | PETOSKEY, MI 49770

Call or email today for information on a custom advertising plan!

cdbclassified@crain.com

1. Location of your headquarters and/or local office 2. Name and qualifications (resumes) of the members of your team including a. Hourly billing rate b. Estimate of the percentage of their hours applied to this engagement 3. A list of engagements of a similar nature including client contact information 4. List of subcontractors and include the information requested in sections 1, 2 and 3 Please provide four (4) sealed original sets and one electronic submission of the information requested above as follows: Deadline: 12:00 Noon, Wednesday, December 12, 2018 To: Detroit-Wayne Joint Building Authority 2 Woodward Avenue, Suite 1316 Detroit, Michigan, 48226 Attention: Gregory R. McDuffee, Executive Director, commissioners@dwjba.com The Authority reserves the right to request additional information, require an interview of the team members identified in the submission and withdraw this RFQ without notice or explanation and at no cost to the Authority.

313.446.6086

DON’T LET YOUR BUSINESS LOSE OUT

ON THE NEXT HOLIDAY PARTY, GIFT EXCHANGE OR FAMILY OUTING It’s holiday season and the perfect time to highlight your catering service, venue space, gift catalogue or restaurant. Our classified advertising section offers business owners a variety of options to boost their marketing efforts. FOR MORE INFORMATION ABOUT THESE OPPORTUNITIES, email or call Kate Rozek @ krozek@crain.com or 313-446-0485.

C R A I N ’ S D E T R O I T B U S I N E S S // D E C E M B E R 3 , 2 0 1 8

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EASTLAND FROM PAGE 3

“Our plan is not only retail, which will be the primary plan, but also multi-user and alternative use, meaning entertainment and professionals, like urgent care or accounting,” Kohan said. Kohan Retail Investment owns 27 malls across the country, including Midland Mall and The Orchards Mall in Benton Harbor, according to its website. Much of Kohan’s portfolio consists of properties bought out of bankruptcy or foreclosure. He’s often touted his ability to resuscitate dying malls. But Kohan — who also goes by Mike Kohen and Mehran Kohansieh — is perhaps known more for his well-documented struggles than for being a mall savior. He bought The Orchards Mall in 2014, aiming to “fill it up and bring it back,” he told the Herald Palladium then. In June, he moved to auction off the mall, which was 45 percent occupied and had $407,000 in unpaid prop-

UPG

FROM PAGE 3

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The bankruptcy comes amid two other major recent developments related to Wayne State, though CEO UPG CEO Charles Shanley, M.D., said they have no relation to the bankruptcy. First, the five-year medical education and administrative contract signed between UPG and Detroit Medical Center in late September. And two, ongoing affiliation talks between Wayne State University School of Medicine and Henry Ford Health System that would make Henry Ford the primary academic partner to Wayne State, away from the DMC where it has been linked for decades. But what left UPG with absolutely no other options was when earlier this year Wayne State informed UPG that it would reduce the amount of its annual subsidy, hoping to phase it out entirely in two years, two knowledgeable sources who asked not to be named told Crain’s. Financial losses at UPG starting in 2015 required Wayne State to financially support the group’s operations to keep it afloat. Officials for Wayne State, Henry Ford and DMC declined comment for this story. DMC is owned by Tenet Healthcare Corp., a Dallas-based investor-owned hospital chain.

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DMC wanted several assurances that UPG would not massively shift doctors and clinical volume away from DMC to Henry Ford as initial affiliation talks with Henry Ford Health has contemplated, two inside sources at DMC and UPG said. DMC also wanted assurances that UPG would be financially stable over the five-year period of the contract. This meant two things. One, the discussed merger or clinical partnership between UPG and Henry Ford Medical Group was taken off the table. Two, UPG formulated a new turnaround plan to eliminate a growing deficit in 2018 caused by the defection of several dozen high-revenue-producing specialists, including three gastroenterologists, a plastic surgeon, a nephrologist, three internal medicine doctors and an electrophysiologist, three sources said. But a closer review of the finances of UPG revealed revenue and expenses were incorrectly accounted for and the

“Our plan is not only retail, which will be the primary plan, but also multi-user and alternative use, meaning entertainment and professionals, like urgent care or accounting.” Mike Kohan

erty taxes and bills, the paper reported. The mall is still listed as part of his portfolio. Steven Silverman, with Farmington Hills-based Friedman Integrated Real Estate Solutions LLC, which managed the auction, could not be reached for comment. In the past, Kohan Retail Investment has been subject to lawsuits and racked up hundreds of thousands of dollars in unpaid taxes and bills, according to various media reports from suburbs where his malls operate. The heat was turned off at one of his malls in St. Lou$5.5 million projected loss for 2018 was actually $10 million to $12 million, depending on what was considered consolidated revenue. This plus the steady loss of specialists from UPG — Shanley said 58 doctors have left UPG since January — to DMC, other competing hospitals and groups was putting UPG deeper in the hole. UPG would have accepted a contract longer than five years, but as it stands now, the contract can be terminated by either party after 2.5 years for no cause, two sources said. Another provision in the contract is that DMC can withdraw from it before Jan. 1, 2019, when it goes into effect, if it is not confident that UPG’s finances are in order. While DMC is unlikely to invoke this provision, it places pressure on UPG to complete its bankruptcy by the summer of 2019 with the necessary planned reduction of expenses and debt, sources said.

Talks with Henry Ford The second external factor that contributed to the decision by UPG to file for bankruptcy is the promise of an even closer affiliation with Henry Ford, a possibility that has been explored at least three times going back to the late 1990s. In 2012, talks between the two health organizations nearly led to a merger that would have created the Henry Ford School of Medicine at Wayne State University. Henry Ford Hospital would be renamed Henry Ford University Hospital, the 2012 plans suggested. Shanley said HFHS’s affiliation with Wayne State will help UPG’s comeback a great deal over the long run. He did not specify how, but other insiders said UPG could tap into HFMG’s management expertise and work closely in other projects. A deeper affiliation with Henry Ford holds the potential to help Wayne State, UPG, its doctors, employees and patients generate benefits in the future, which could portend help in the bankruptcy. Finally, it offers UPG a “next step” after the reorganization as many physicians within the group will generate research and clinical service revenue through Henry Ford facilities, diversifying UPG’s business. “The two parties (Wayne State and Henry Ford) are well on their way to become (closer partners) and it is long overdue. The plans make good sense and should be doable,” said Crissman,

Ea Wo va

is, and the lights went out at one in New York after an electricity bill went unpaid. He purchased Midland Mall in June for $9.4 million from a court-appointed real estate firm that took over when it was foreclosed on in 2016, according to a report from the Midland Daily News.

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a pathologist who was dean of the Wayne State medical school from 1999 to 2004. “It is gratifying to see what (former CEO) Mark Kelley (of Henry Ford Medical Group) and I started many years ago finally coming to fruition,” said Crissman, who added he and Kelley also envisioned a much closer clinical affiliation between HFMG and UPG. Kelley retired in 2012. “It irritates me to (hear) criticism of the two of us for starting a process that was way ahead of the time that we never had a chance to finish,” Crissman said. Jack Sobel, Wayne State’s medical school dean, has said consistently the past two years that Wayne State needs to find a partner that will provide additional subsidies for clinical operations to support the academic mission of the medical school. UPG, which is a 501(c)3 nonprofit organization, is the clinical enterprise of Wayne State. Several sources affiliated with Wayne State said they believe contracting and working closely with Henry Ford will bring additional revenue to the medical school to support the educational and research mission.

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Financial rock bottom From 2009 to 2012, UPG was profitable, averaging about $2 million to $3 million per year. Beginning in 2013, however, UPG began generating operating losses, culminating in a $9 million loss in 2015. Net assets also dropped from $63 million in 2013 to $42 million in 2015, according to IRS 990 forms. In late 2015, Wayne State conducted an in-depth financial analysis of UPG, the medical school and a related entity and discovered financial losses would exceed $32 million for the year. A number of expense-reduction steps were put into place that cut the losses to $17 million in 2016 and $11 million in 2017. But the financial audit earlier this year found UPG was on track to lose up to $12 million in 2018. While Shanley, who became CEO in March, declined to confirm the amount of financial losses because the group is in bankruptcy court proceedings, he acknowledged that UPG’s projected losses for 2018 had been $5.5 million and the group had projected to break even by 2019. “We have spent the last seven months in turnaround mode,” he said. Bankruptcy documents filed by UPG this month show assets of $31.8 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 // D E C E M B E R 3 , 2 0 1 8

Eastland Center mall in Harper Woods has long struggled with vacancy and disinvestment. COSTAR GROUP

He spoke of plans to revitalize that property, too. As for Eastland Center, Kohan said it’s too early to say what the next steps will be. There are no immediate plans for infrastructure improvements or to make changes at the management level. and liabilities of $50.2 million. Revenue has declined tremendously over the past two years, dropping 13 percent from $180.8 million in fiscal 2017 ended Dec. 31 to $160.6 million in fiscal 2018 from Jan. 1 through November. From Oct. 1, 2016, to Sept. 30, 2017, UPG generated $218.7 million in revenue. Since the beginning of 2017, UPG has lost about more than 100 doctors, which has drastically cut into revenue, according to sources and UPG’s own data. In early 2017, UPG reported to Crain’s it had 400 full-time physicians. Now, UPG has 264. Just this year through the end of November, UPG has lost 58 doctors, Shanley said. Of the 58, 15 anesthesiologists left to form their own practice plan, he said. To make up for the revenue declines, “We are increasingly cutting expenses, optimizing revenue. That started before me,” Shanley said. “What became apparent (since March) was that to be self-sufficient, we needed to restructure our fixed costs. We are on a path to reorganization.” Three sources told Crain’s that many of the doctors who left UPG this year did so after the updated accounting from Wayne State showed debt and losses much higher than expected for the group. One private practice doctor said over the years, two of UPG’s biggest revenue-producing departments were down to two gastroenterologists from 15, and down to four cardiologists from 25. UPG doctors likely to stay are ones needed to comply with the DMC contract or those with practices tied closely to the hospital such as nephrologists for the dialysis center, internal medicine “intensivists” for intensive care units, surgeons for the operating rooms and hospitalists for general medical floors, said the DMC doctor. Others may leave for Henry Ford or another opportunity. But Shanley said UPG's turnaround plan calls for the group to “return back to our roots, focusing on the DMC community” in downtown Detroit. He acknowledged it is a major retrenchment from UPG's former grandiose plans of becoming a 1,000-physician medical group that could compete with anyone in Southeast Michigan. “The most viable path for UPG is to refocus on the city of Detroit with DMC,” he said. “It allows us to teach medical students and residents, and do clinical care” at DMC.

“The property is gonna go in the same way it has been for day-to-day operations,” he said. “The only difference is gonna be bringing in more people.” The mall opened in 1957 but has emptied out over the past couple of decades due to disinvestment and the rise of e-commerce. Its major anchor tenants fell one by one — Sears, Burlington Coat Factory, Macy’s and Target. Businesses still holding out there include Shoppers World, Payless Shoe Source, Kay Jewelers and Finish Line. It is about 35 percent occupied, according to Southfield-based Farbman. Not included in the auction were the former Macy’s and Target stores. Kohan said no deals have been made with new tenants yet, and he is encouraging small business owners to reach out if they are interested in a space, as the long-term redevelopment plan remains in flux. “It’s gonna cost a lot of money,” he said. “I’ll have to see what kind of use the mall is gonna bring.” Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

Bankruptcy details UPG attorneys have told bankruptcy court that the group practice plans to continue operating, move its corporate administrative functions to Midtown Detroit from Troy and focus on being the “premier academic clinical practice” for the DMC. There are no plans to downsize UPG's workforce, which includes 755 total employees, including 264 physicians and 491 staff, Shanley said. Last year there were 878 total. But to do that, said Shanley, UPG needs first to shed overpriced property leases and ineffective contracts. It already has terminated four leases on six properties in Detroit, Dearborn and Rochester and has another 20 leases that it hasn't decided on yet. “We are doing a review of all leases and contracts, individually,” Shanley said. Mark Shapiro, UPG’s bankruptcy attorney with Southfield-based Steinberg Shapiro and Clark, said the plan is to complete bankruptcy by midsummer. “My first goal is to save 800 people’s jobs.” Shapiro said. “The second goal is to propose a plan that creditors are on board with to pay them what we can afford over a five-year plan. ... It is not a shedding of debt. Whatever is not paid off after five years will be wiped out.” As the number of UPG doctors has shrunk, Shanley said, the leases have become an even greater problem. He said the leases were entered into assuming UPG would grow. Most of the largest creditors listed in bankruptcy documents are owners of real estate that UPG has leased. The largest creditor listed is Chicago-based Troy Medical Properties, which is owed $27.4 million under a commercial lease. Wayne State is also listed as one of the largest creditors, with $5.6 million owed for reimbursement and parking, and $723,000 for rent. Shapiro said landlord claims are capped at either 15 percent of the original lease or one year remaining rent. He said UPG’s five largest liability leases total $39 million, which means the liability is capped at $4.5 million. “We tried to settle with the landlords and not go into Chapter 11,” he said. “We sent letters to them in September” but couldn’t work anything out. He said the UPG board later approved bankruptcy just before the Nov. 8 filing. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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TAX CREDITS FROM PAGE 1

In 2015, GM agreed to a cap on the total value of its tax credits after the refundable MEGA tax credits swelled to more than $600 million annually, wiping away much of the state’s tax revenue from the 6 percent corporate income tax. At the same time, the Snyder administration signed a nondisclosure agreement with GM to shield the value of the automaker’s tax credits from public disclosure — a deal some lawmakers with GM plants in their districts want to re-examine. “We need to make sure they’re holding up their end of the bargain,” said state Rep. Darrin Camilleri, D-Brownstown Township. “Part of the problem is we don’t know what that bargain is.” GM’s plans to cut jobs in Michigan and possibly close two plants runs counter to the original purpose of the tax credits to get the automaker to maintain its large presence in Southeast Michigan, Camilleri said. “The idea was to keep and retain jobs — and we need to keep companies to that standard,” said Camilleri, whose Downriver state House District 23 is home to GM’s Brownstown Battery Assembly Plant. Senate Minority Leader Jim Ananich, a Democrat from Flint where GM assembles its highly profitable Chevrolet Silverado and GMC Sierra trucks, said the company’s job reductions in 2019 should be leverage for the MEDC to renegotiate the MEGA tax credits deal. “If you’re going to cut jobs, should we continue to give people the same tax credits we’ve given in the past when they’re laying off people?” Ananich asked. “I think most people would probably say no.” MEDC officials declined a request from Crain’s this week to voluntarily disclose the value of GM’s MEGA tax credits, citing the NDA. “The MEDC and our partners at the local and regional level will continue to work with General Motors, as well as other OEMs and suppliers, to ensure Michigan remains the global epicenter of the automotive industry as the future of mobility and market conditions

WALSH FROM PAGE 1

GM’s announcement shouldn’t have come as a surprise. It was expected that it needed to address underutilization of its plants. The automaker represents 1 million of the 3.2 million units of underutilized capacity in the U.S. through October, according to the Center for Automotive Research. Buyers don’t want the sedans. Domestic carmakers don’t make any money from them. U.S. automakers have conceded that business to Japan’s automakers, which make all of the top-selling sedans in the U.S. — the Toyota Camry, Toyota Corolla, Honda Civic, Honda Accord, Nissan Altima and Nissan Sentra. In truth, it’s unlikely GM’s Lordstown, Ohio, and Detroit/Hamtramck plants will close completely. A new factory is afoot. GM may be threatening to close those assembly plants, but it’s almost surely a negotiating tactic for its next labor contract negotiations with the UAW in 2019.

Shift to electric But it’s clear that General Motors wants a more competitive contract with

GENERAL MOTORS CO.

Evetta Osborne (right) and her daughter, Monique Watson, work the line at General Motors Co.’s Detroit-Hamtramck assembly plant, which is in danger of closing in 2019.

evolve,” MEDC spokesman Otie McKinley said in a statement. GM also won’t disclose the value of its tax credits, which are paid out of the state Treasury and deplete the state’s general fund checking account. “I can’t speculate on that,” Caldwell said in an email to Crain’s. GM’s tax credit is based on the 4.25 percent individual income tax each eligible employee pays the state. The credits are tied to the wages, overtime and profit-sharing checks — all of which have risen in recent years as GM has posted record profits. For a GM engineer earning $100,000 annually, the company can claim a credit of $4,250. For an assembly line worker making $50,000 annually or $24 per hour, the refundable tax credit is about half of what the engineer’s job is worth in taxpayer subsidies. If the majority of GM’s job reductions in Michigan hit the salaried white-collar ranks, the overall value of the company’s tax credits could decrease because it would have fewer higher-paid employees to claim under the subsidy formula, said James Hohman, director of fiscal policy for

the Mackinac Center for Public Policy, a Midland-based free-market think tank. “I do expect that to decrease their annual MEGA credit amount,” Hohman said. Efforts in the Legislature to force the state Treasury Department to disclose the value of each company’s MEGA tax credits or curtail the program have failed to gain any steam. State Rep. John Reilly, R-Oakland Township, has a bill to make public the value of GM’s tax credits. The bill has languished in the House Tax Policy Committee for the past 14 months and will likely die at year’s end. But given that GM has upheld its end of the deals, it would be difficult to claw back promised tax credits, Hohman said. “Even if they changed the law, GM might still point to that (2015 non-disclosure agreement) and say, ‘You still can’t disclose what we’re getting,’” Hohman said.

fewer worker requirements because, well, electric cars require fewer workers. GM also announced Monday its transmission plants in Warren and near Baltimore will stop production next year as well. Well, what kind of car doesn’t need a transmission? An electric one. “The bigger concern, which isn’t the headlines, is GM pulling back on transmissions,” said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor. “Correcting transmission capacity is just maybe the first step in moving toward a more electrified future. That has big ramifications across the manufacturing sector. Conventional powertrain (manufacturing) is all over the Midwest.” Dziczek’s logic follows some basic facts about electric cars. Battery-powered cars have just more than a dozen moving parts, compared with hundreds in one powered by a traditional internal combustion engine. “If there are fewer parts, there are fewer suppliers, and therefore fewer jobs,” Dziczek said. “We won’t have the same job footprint. A plant that assembles vehicles, engines or transmissions has a greater economic footprint contribution. How many of these jobs really get replaced if these plants make only electric cars?”

Effect on suppliers

Growing tax subsidy Hohman and the Mackinac Center

The important question we don’t yet know the answer to is: How many jobs will be lost at Auburn Hills powertrain supplier BorgWarner Inc., Detroit-based American Axle & Manufacturing Inc. or dozens of other suppliers in the region if GM and Ford are all-in on electrification? Those suppliers, which did not immediately respond to questions on the issue, have spent years investing in electric-vehicle technology, but components for gas-powered cars continue to make up the bulk of their businesses. Of course, all of this plays into the broader question of the future of work as automation and artificial intelligence technologies improve. Electric vehicles are part of that future. On one hand, we can look to the Industrial Revolution during the 18th and 19th centuries. Innovation during that era actually created jobs. Better jobs. That didn’t happen overnight. Those new and better jobs occurred after a prolonged period of adjustment. In that aftermath, the world saw two major communist revolutions in Russia and China that cost

have long been critics of the MEGA tax credits, which began as a job-creation tool under Republican Gov. John Engler and morphed into a job-retention subsidy under Democratic Gov. Jennifer Granholm in the depths of the Great Recession. In 2009, just after GM and Chrysler got bailed out by U.S. taxpayers and went through historic bankruptcies, the Granholm administration gave GM a tax credit worth $1.07 billion over 20 years that was tied to the retention of 20,000 jobs in Michigan and making $2.5 billion in capital investments at instate assembly plants and facilities. In subsequent years, the MEDC’s governing board, the Michigan Strategic Fund, granted GM multiple amendments to add more workers to the “global retention” MEGA tax credit, thus rapidly increasing its value — and cost to taxpayers. Within five years, GM’s tax credits doubled in value as the Granholm and Snyder administrations let the automaker add nearly 13,000 jobs to its tax credit claims. By July 2014, GM’s remaining tax credits were worth $2.1 billion, the last public disclosure of millions of lives. The Industrial Revolution also brought about the modern welfare state at the end of the Great Depression, and the full benefits of industrializing weren’t truly recognized until the War Machine came to be in Michigan during World War II.

More pain is coming Today globalization and automation continue to boost productivity and profitability, but workers are barely seeing wage growth and, in cases like the GM announcement, are seeing job losses. And as GM and others turn traditional assembly plants into electric car plants, and automation continues its rise, more pain is coming. As Axios reported Tuesday, this results in “a major secular employment shift away from unionized factory workers and Detroit middle-management lifers. Expect the United Auto Workers, still GM’s largest shareholder with a $3.6 billion stake in the company, to remain extremely unhappy for the foreseeable future.” Gabriel Ehrlich, associate director of University of Michigan’s research seminar in quantitative economics, projects even more job losses in the future.

their value made by the MEDC, according to state records. In 2015, after ballooning MEGA credit redemptions had forced midyear state budget cuts, the Snyder administration inked agreements with GM, Ford and FCA to cap the remaining value of the credits so future governors and Legislatures could budget for them. Ford agreed to cap its remaining credits at $2.3 billion through the end of 2029, while FCA accepted a $1.7 billion cap for the remaining life of the MEGA tax credit program. But GM worked out a deal with the MEDC to keep the value of its tax credits and annual payouts confidential. As part of the deal, GM pledged to invest an additional $1 billion in capital improvements to Michigan facilities before the credits expire on Dec. 31, 2029, a pledge GM met the following year when the automaker reported making $1.55 billion in capital investments, according to the MEDC’s most recent annual report to the Legislature. The MEDC spokesman said it’s still too early to tell how GM’s job reductions will impact its MEGA tax credits, which the company redeems annually. “Without knowing if or how the company’s employment levels in the state will be impacted, it’s premature for us to comment on any potential effect to existing MEGA tax credits,” McKinley said. “We will continue to monitor the situation to understand what, if any, any implications arise.” Reilly represents District 46 in northern Oakland County, where GM employs 1,166 workers at its Orion Assembly plant in Lake Orion. That plant produces the Chevrolet Sonic and Chevrolet Bolt EV, as well as GM’s Cruise autonomous testing vehicles. From Reilly’s vantage point, he contends the job-retention MEGA tax credits have outlived their original purpose. “All of the central planning we put into these ideas is not the way the market works,” Reilly said. “I’m opposed to these kind of interruptions in the marketplace. This didn’t keep the jobs here, right? Those dollars could be better spent.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood “This news does not come out of the blue,” Ehrlich said in an emailed statement. “We have been forecasting employment in manufacturing to slow down substantially over the next couple of years here in Michigan. The culprits in our view are a slight decline in Detroit Three vehicle sales, higher costs from steel and aluminum tariffs along with the threat of more and consumers’ shift away from sedans toward light trucks.” Further electrification could be a greater culprit moving forward. The global, U.S. and certainly the Southeast Michigan economy and society will transform in significant ways and there are no simple fixes or adaptations to the problem of what’s happening, deindustrialization. I’ve written in length about improving retraining — the U.S. spends less than 0.1 percent of gross domestic product on jobs retraining, compared to greater than 1 percent of GDP in other nations — and the ramifications of not preparing for a future of reduced assembly jobs. I’ll repeat an important detail here: Assembly jobs did not make the U.S. a rich country. Innovation did. The Industrial Revolution was a tipping point. GM’s announcement may be another.

C R A I N ’ S D E T R O I T B U S I N E S S // D E C E M B E R 3 , 2 0 1 8

BROWN

victory. They lost four others during Brown’s Detroit years. “It was just things we couldn’t overcome. A lot of injuries,” Brown said. Brown left the Lions in 1996 and signed a three-year, $9 million freeagent contract with the Arizona Cardinals. He then played for the expansion Cleveland Browns in 1999 before two seasons with the Giants and his final season with Tampa Bay. Brown was part of the last Lions team to win its division — in 1993, when it was still called the NFC Central Division. “Isn’t that crazy?” he said, shaking his head. It became the NFC North Division after the 2001 season.

FROM PAGE 3

“When they first offered the job to me, I really wasn’t comfortable with it because I had never done it before in my life. Getting comfortable and working with someone that makes you comfortable, it makes a world of difference,” Brown said. One of the radio challenges Brown said he’s worked to overcome is giving his observations and analysis in eight to 10 seconds. “I’ve got to get right to my point,” he said. Eighteen years of playing gives him football insight that a layman isn’t likely to grasp. Brown can dissect why a play is botched and tell listeners what it means, with his deep voice and cheerful, eager demeanor that hints at his affection for his old team. His new employer and his broadcast partner both have praise for his radio performance thus far. Miller, the WJBK-Channel 2 sports director who has broadcast Lions games on radio since 2005, said he’s impressed with Brown’s development and dedication as a rookie color analyst. “I think the growth has been tremendous. It started with his willingness to dive right in,” he said. “When he got this job, he’d done two games in his life.” After he was hired, Brown would come to the Fox 2 studio to practice calling games and to learn the mechanics of radio, Miller said, adding that the former tackle has embraced the hard work to improve through reviewing broadcasts, making notes, seeking advice and criticism. Just like a football player does. “The way you get better in this business is reps, and he’s getting those. ... He’s gotten so much more comfortable dealing with the constraints of a broadcast,” Miller said. “He’s only going to get better.” Brown’s boss at the radio station also speaks highly of him. “Lomas is doing a great job. Our Operations Manager Mike Wheeler and Lomas talk after every game to review details,” Tom O’Brien, WJR’s vice president and market manager, said via email. “It’s great to have a former Pro Bowl Lions player with 18 years in the league provide his insight to listeners. Behind the scenes, Lomas is very engaging with sponsors.” WJR, a 50,000-watt news/talk station owned by Atlanta-based Cumulus Media Inc., picked up the Lions radio rights before the 2016 season from CBS Radio Inc.-owned 15,000watt sports talk station WXYT-FM 97.1 “The Ticket” (now owned by Entercom), which had aired the games since 2004. WJR is the team’s flagship for a network of nearly 50 radio stations in Michigan and northwest Ohio.

What can Brown do for you? Brown also has gigs doing corporate work for local companies. For example, he’s vice president and director of community relations for industrial pallet manufacturer Lightning Technologies Inc. in Lake Orion and Oxford. Company founder and CEO Jeffrey Owen said he hired Brown to offer input and ideas related to Lightning’s relationship with the communities in which it’s located, and he’s represented Lightning at meetings and events in the region with elected officials and with investors.

Unafraid to speak

AP PHOTO / AL MESSERSCHMIDT

Detroit Lions tackle Lomas Brown (75) sets for play during a game against the San Francisco 49ers in 1988, at Candlestick Park in San Francisco, Calif.

“I didn’t win the Super Bowl until my 18th year. It was a lesson in hanging in there. I apply those lessons to try to help motivate smaller companies.” Lomas Brown

“His fantastic demeanor and personality reflect the commitment we have to the communities of Oxford and Lake Orion,” Owen said via email. Brown also networks small companies to big ones. He introduced Patrick Peteet, owner of Oak Park-based Peteet’s Famous Cheesecakes, to Meijer Inc. executives, and now the small bakery has its cakes in 24 Meijer stores and its cookies in 44 stores. That has accelerated the bakery’s growth plans, Peteet said, including a forthcoming building expansion. “It’s huge. You’ve got a foot in the door in order to grow,” he said. “Lomas is always there introducing me to a lot of people. He’s always taking cheesecakes around, to Lions games.” Brown likened such introductions to what he did in football. “It’s a good thing for a large company to bring up a smaller company. As a lineman, that’s what I did,” he said. “I let people know about job opportunities. That’s my role, to spread that.” He also conducts youth football camps, and is offensive line coach at Bloomfield Hills High School. Two years ago, he and writer Mike Isenberg authored a book called “If These Walls Could Talk: Detroit Lions: Stories From the Detroit Lions Sideline,

Locker Room, and Press Box.” After football and after doing ESPN work, Brown said he spent two years as a diversity supplier consultant for Dan Gilbert’s Detroit-based Title Source. “It taught me about the diversity field and inclusion and how that interaction works,” Brown said. He also applies the lessons he learned in pro football to the business world, in corporate speaking and consultancy. “Football teaches you so much. Perseverance. To be able to last and go through some of the hard times and to last,” he said. “I didn’t win the Super Bowl until my 18th year. It was a lesson in hanging in there. I apply those lessons to try to help motivate smaller companies. It’s never going to be easy. You’re not always going to get the fame and glory that you think that you deserve. I was an offensive lineman. Barry Sanders was back there. We didn’t mind. I wanted to be one of the faceless guys because he was such a great talent, but we know as individuals what we did to help Barry accomplish what he did. You don’t always have to be out in the limelight to be an important cog in the success that you might have.”

Team history Brown learned those lessons during his experience with the Lions that runs deep, and crosses generations. “I got here in ’85 and we got Barry in ’89 and everything changed. It was a whole different team. Coach Wayne Fontes took over,” he said. The Lions made the playoffs in 1991 and 199395, but managed just one postseason

Brown, to his credit and detriment, shows no fear of speaking his mind, from criticism of Lions offensive coordinator Jim Bob Cooter’s play calling to more serious comments. For example, he drew widespread condemnation in December 2012 when he said on ESPN Radio that he purposefully let an opponent sack quarterback Scott Mitchell to get him out of the game. Mitchell broke a finger on the play. When the backlash erupted, Brown owned up to it and was remorseful. “It’s one play out of the 18,000 that I regret,” he told “ESPN First Take.” “It came off boastful, and I shouldn’t have said it that way. I said it, I can’t take it back, but I shouldn’t have said it the way I said it.” In talking with Crain’s, Brown didn’t hesitate to question the way WJR jettisoned his predecessor, Brandstatter, who had done the color commentary on radio for Lions games since 1987. “WJR didn’t handle it right, not after 31 years. That’s not how you let someone go. You’re talking about replacing someone that did for 31 years. I enjoyed Jim. I really did. I’ll put this out here, too: WJR told me it wasn’t a performance issue why they were replacing Jim. So that lets you know he was at the top of his game,” he said. “WJR had their reasons. It could have been handled better. I told them that. I think that’s why some of the backlash came, because of how Jim was treated more so than me coming in to do the job. I think it was wrong.” He’s on a one-year deal with WJR, but that could turn into longer deals, and Brown said the station has plans to use him in the offseason for other radio work. “WJR said they have a lot of things they want to build around me during the offseason. I’m excited about working with them outside of the football season,” he said. For now, he’s pleased to be in the broadcast booth and not on the field, where he started 251 NFL games. “I’m not beat up and sore and not getting cussed out by the coach. It’s a good gig,” he said. Brown didn’t disclose what he’s paid by the radio station. In his NFL career, he earned an estimated $34.4 million, according to pro sports salary tracking site Spotrac.com. His 18 seasons spanned different eras of the NFL, including when the gargantuan TV deals and the advent of player free agency fueled big salary increases. “That’s what I’ve been living off, what I earned from the NFL, since I retired. I was blessed enough to play in three decades. I was able to realize some of the money and benefits the guys get now. It’s crazy the money they make now,” he said. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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

REPORTERS Tyler Clifford, breaking news. (313) 446-1612 or tclifford@crain.com Annalise Frank, breaking news. (313) 446-0416 or afrank@crain.com Jay Greene, senior reporter Covers health care. (313) 446-0325 or jgreene@crain.com Chad Livengood, senior reporter Covers Detroit rising. (313) 446-1654 or clivengood@crain.com Kurt Nagl Breaking news. (313) 446-0337 or knagl@crain.com Kirk Pinho Covers real estate. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor Covers the business of sports. (313) 446-1626 or bshea@crain.com Dustin Walsh, senior reporter Covers economic issues. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits and philanthropy. (313) 446-1694 or swelch@crain.com MEMBERSHIPS CLASSIC $169/yr. (Can/Mex: $210, International: $340), ENHANCED $399/yr. (Can/Mex: $499, International: $799), PREMIER $1,299/yr. (Can/Mex/ International: $1,299). To become a member visit www.crainsdetroit.com/ membership or call (877) 824-9374 ADVERTISING Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Director of Sales Lisa Rudy Director, Crain Custom Content Kristin Bull, (313) 446-1608 or kbull@crain.com Senior Account Manager/Political Specialist Maria Marcantonio Advertising Sales Lindsey Apoctol, Matthew Miller, Sharon Mulroy, Diane Owen, Kate Rozek Classified Sales Kate Rozek, (313) 446-6086 Events Director Kacey Anderson Director of Marketing Christina Fabugais-Dimovska Senior Art Director Sylvia Kolaski Director of Media Services Joseph (Sam) Tanooki, (313) 446-0400 or sabdallah@crain.com Integrated Marketing Specialist Keenan Covington Sales Support Suzanne Janik CUSTOMER SERVICE Single copy purchases, publication information, or membership inquiries: Call (877) 824-9374 or customerservice@crainsdetroit.com Reprints: Laura Picariello (732) 723-0569 or lpicariello@crain.com Crain’s Detroit Business is published by Crain Communications Inc Chairman Keith E. Crain Vice Chairman Mary Kay Crain President KC Crain Senior Executive Vice President Chris Crain Secretary Lexie Crain Armstrong Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except 1st issue in January and last issue in December, by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Contents copyright 2018 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is prohibited.

C R A I N ’ S D E T R O I T B U S I N E S S // D E C E M B E R 3 , 2 0 1 8

THE WEEK ON THE WEB

RUMBLINGS

Site by Whole Foods in Detroit sells for $15 million

Veteran journalists join Michigan Advance site

NOVEMBER 22-29 | For more, visit crainsdetroit.com

n entity tied to Southfield-based Ciena Healthcare Management Inc. in Southfield has purchased a key piece of Midtown real estate with plans for a mixed-use development. In what is so far the most expensive land sale of the year in Detroit, the 3.78-acre property at 3750 Woodward Avenue immediately north of the Whole Foods grocery store sold to a limited-liability company registered to Ciena CEO Mohammad Qazi for $15 million, or $3.97 million per acre, according to city property records. It was recorded with the city on Sept. 24. Ciena Healthcare manages 45 skilled nursing homes and rehabilitation centers in Michigan, according to the company’s website. Qazi said last week the site is subject of "some exciting plans." “It will be one of the most exciting projects to take place in Detroit. It’s going to be a mixed-use development, upscale,” he said. He referred further inquiries to Tranéy Thames, senior account executive with public relations firm FleishmanHillard. Thames said a groundbreaking ceremony is expected in the spring and that more information will be made public by the end of the year. Vacant and recently adorned with a new scrim saying “More Midtown,” it had been targeted for a new consolidated headquarters of Wayne State University Physicians Group, which filed for Chapter 11 bankruptcy reorganization in November. Shane Napper, the president of construction for Grand Rapids-based Rockford Construction, who is identified as development manager for the ownership group, said in a statement provided to Crain’s that “our team has already begun preparing the site for construction and repairing the fencing around the perimeter of the property.” He said the group is working with the city and the Detroit Brownfield Redevelopment Authority on the project that “will be designed to meet several market needs in the community.” Cleveland-based Ferchill Group was going to develop WSUPG’s $68 million project, which was never built after the nonprofit started experiencing financial problems. Today, it is sandwiched between the busy Whole Foods store and a freshly redeveloped Hammer and Nail Building, which is now called The Plaza after a $24 million redevelopment into 72 apartments and 2,000 square feet of retail.

BUSINESS NEWS J The state’s economic development board approved a 30-year tax abatement for Ford Motor Co.’s planned campus in Detroit’s historic Corktown neighborhood that is the tax-incentive linchpin for the automaker's revitalization of the long-vacant Michigan Central Station. The tax breaks amount to $208.8 million — or $6.95 million annually — in property taxes that Ford won’t have to pay over a period of 30 years that will begin in five years.

KIRK PINHO/CRAIN’S DETROIT BUSINESS

A 3.78-acre property at 3750 Woodward Avenue immediately north of the Whole Foods grocery store sold to a limited-liability company registered to Ciena CEO Mohammad Qazi for $15 million

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

18 percent

The year-on-year increase Detroit bike share system MoGo has seen in monthly and annual memberships.

The number of days on which Detroit’s Campus Martius Park will host the post-holidays Winter Blast festival. It’s grown from three days long last year.

3,800

The number of hourly and salaried factory workers in the U.S. at risk as General Motors considers closing up to five plants in North America, including in Detroit-Hamtramck and Warren Transmission.

The General Motors Co.-owned Courtyard by Marriott hotel across from its Renaissance Center headquarters is for sale. The Detroit-based automaker, which last week announced it plans to slash more than 14,000 jobs and idle five North American plants, confirmed its intention to sell the 265-room hotel that was built in 1985 as part of the mixed-use Millender Center complex on Jefferson Avenue downtown. A source briefed on the matter said GM hopes to fetch $45 million for the property. It’s not known whether that includes the 1,850-space parking deck, 30,000 square feet of retail and nearly 10,000 square feet of office space in the complex that the automaker owns. J Hard Rock Café in downtown Detroit is going to close after Jan. 26. Its lease at the One Campus Martius building owned by Quicken Loans Inc. and Meridian Health expires early next year. The rock ’n’ roll themed restaurant opened there back in 2003. The chain said in a statement that it would be open to opening another location in Detroit if “the right space can be identified.” J Antihero — a Japanese pub-style bar and eatery, or “izakaya” — opened Thursday in downtown FernJ

dale four and a half years after being thought up by restaurant group Working Class Outlaws, which also operates nearby restaurants Imperial and Public House. The newcomer will serve small plates of Japanese comfort food to complement a waterfall of alcohol options. J A real estate developer who recently bought the Detroit mansion owned by the late Aretha Franklin plans to renovate the home. Anthony Kellum, president of Michigan-based Kellum Mortgage, announced last week that he purchased the 5,600-square-foot brick house adjacent to the Detroit Golf Club that fetched $300,000 in October. It’s been vacant for 10 years.

new free nonprofit news site based in Michigan's capital has a name, a launch date and a staff of journalism veterans. Michigan Advance Editor-in-chief Susan Demas will lead a team of reporters made up of Ken Coleman, Nick Manes and Michael Gerstein when it begins publication Tuesday. Crain’s first reported earlier this month that the Washington, D.C.based Hopewell Fund is financially backing the publication through a multistate journalistic initiative called The Newsroom. Michigan Advance said it aims to fill the void caused by news operations cutting their state Capitol bureaus, featuring in-depth news stories, a blog, guest columns and a daily newsletter. Demas, a longtime journalist, will offer progressive commentary. She signed on to the publication after selling her politics-and-policy newsletter “Inside Michigan Poli-

tics” in March and joining campaign- and advocacy-focused public relations firm Farough & Associates. She left Farough after the Nov. 6 election. She will be joined by Coleman as senior reporter, covering Southeast Michigan, education, civil rights and voting rights. The well-known Detroit historian is a former Michigan Chronicle senior editor and served as the “American Black Journal” segment host on Detroit Public Television. Manes will report on West Michigan, business and labor, health care and the safety net. He spent six years as a reporter at MiBiz covering commercial real estate, economic development and public policy. Gerstein will cover the governor’s office, criminal justice and the environment. Before that, he wrote about state government and politics for The Detroit News, The Associated Press and MIRS News.

OTHER NEWS J Former head football coach and athletic director George Perles has resigned from the Michigan State University board of trustees. The 84-year-old, who has Parkinson’s disease, cited health issues. J A Michigan truck hauling company president who pleaded guilty to wire fraud after plastic crates valued at more than $2.9 million were sold to a recycling company for about $460,000 has been sentenced to 33 months in prison. Arshawn Hall of Farmington was sentenced Thursday in Detroit federal court. Hall’s RAMA Enterprise Inc. was hired to transport auto parts in the crates and return the empty crates. The Justice Department said in a statement that the crates were diverted elsewhere. J Detroit’s bike share system MoGo continues to see strong ridership in its second year of operation as it looks to expand to the suburbs and despite increased mobility options. The nonprofit has logged nearly 237,000 rides on its docked bicycle system from when it began operations in May 2017 through September this year. According to its first progress report released Wednesday, MoGo has seen an 18 percent yearover-year increase in monthly and annual memberships, with users clocking nearly 834,176 miles since its launch last year. Annual passes, which allow unlimited 30-minute rides, cost riders $80 while monthly passes are $18.

KIRK NAGL/CRAIN’S DETROIT BUSINESS

The driving range stretches 205 yards and is surrounded by 175-foot-tall netting.

Topgolf prepares to open complex in Auburn Hills T

opgolf International Inc.’s new 65,000-square-foot entertainment complex and driving range in Auburn Hills is nearly ready. Players will tee it up from the three-tiered hitting bays by the end of the year, the Dallas-based company promises. An exact date will be announced this week, said spokeswoman Morgan Wallace. Construction for the $12.5 million project started in January. The new entrant into the local golf and entertainment market aims to bring a high-tech, glitzy twist to a sedate game at a time when golf is broadly declining in popularity. A preview party last week attended by company executives, community dignitaries and an assortment of VIP guests, including members of the Detroit Pistons, offered a look at what will be on offer. With 40 locations around the country and 15 more planned, Topgolf has become a popular destination. This will be the first in Michigan, although the company opened one of its Swing Suites in MGM Grand

Detroit last year. Located at I-75 and Joslyn Road, the complex’s driving range backs up to the freeway with towering poles and netting. A total of 102 climate-controlled hitting bays promise comfortable play year-round, while 270 big-screen TVs, food and alcohol will keep nongolfers entertained. There’s also 3,000 square feet of event space. The driving range is filled with circular targets in the ground designed as dart board-like greens that players aim at and earn points depending on where the balls land. Two massive video boards are set up at the back of the range to play anything from football games to music videos. Each ball has a microchip that tracks location and distance, with results displayed on screens at each bay. Players are charged hourly, and the cost depends on time of day. It is $25 total per hour to rent a hitting bay from 9 a.m. to noon for up to six players. The cost is $35 from noon to 5 p.m. and $45 from 5 p.m. to close.

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