Crain's Detroit Business, Aug. 12, 2019 issue by Crain's Detroit Business

Michigan’s marijuana industry faces a marketing challenge Page 10

Big Boy’s new owners aim for a comeback Page 3

AUGUST 12 - 18, 2019 | crainsdetroit.com

GOVERNMENT

What will happen to Brooks’ deputies?

Replacing Patterson could shake up leadership By Kirk Pinho kpinho@crain.com

One of the things in limbo as a decision on the replacement of the late L. Brooks Patterson looms is the fate of the team he assembled over more than a quarter-century at the helm of the state’s wealthiest county. The answer to how a new Democratic county executive — if one is appointed — puts together a stable of new deputies and administrators could lay somewhere between an immediate wholesale overhaul of Patterson’s administration and something more akin to picking off the a la carte menu at a restaurant as time goes on. Patterson, the longtime Republican county government chief who died Aug. 3 at age 80 following complications from pancreatic cancer, amassed a core of deputy executives and administrators, some of whom had served under him for decades, even back to his tenure as county prosecutor. They include Gerald Poisson, long Patterson’s deputy, who assumed the top job on an interim basis 12 hours

after his boss died; Robert Daddow, a municipal finance wizard who, prior to joining the Patterson administration in 2000, was director of the Michigan Department of Poisson Management and Budget; and Phil Bertolini, a technology expert whose three-decade career in county government places him in the deputy executive/ CIO role. “Normally in the cycle of things, when you are elected as a new county executive, a new president, a new governor, you have six or seven weeks to put a team together and to have some transition time with the previous staff. But we don’t have that,” said Shelley Goodman Taub, a longtime Republican county commissioner from Birmingham who was elected to her post the same year Patterson was elected county executive.

WINDS OF CHANGE

SEE OAKLAND, PAGE 18

ECONOMIC DEVELOPMENT

Mahindra ambitions fuel push to expand ‘Good Jobs’ By Chad Livengood clivengood@crain.com

Mahindra North America Inc.’s plans to build a $1 billion automotive assembly plant on the barren site of Flint’s once-sprawling Buick City complex may be the opening salvo in a renewed debate in Lansing over large-scale tax incentives for companies that create new jobs in Michigan. The India-based vehicle maker’s announcement last week that it could employ up to 2,000 workers at an assembly plant for its off-road and commercial vehicles at the east side Flint site comes as Michigan’s tax incentive for creation of above-average-paying jobs is nearing its $200 million cap and set to expire at year’s end. crainsdetroit.com

Mahindra said in a company statement that its final decision on whether to build a plant in Flint “will be driven in part by the financial incentives that are available from the State of Michigan.” Mahindra’s plans for the Buick City site also hinge on securing a $6 billion contract to build 180,000 next-generation delivery vehicles for the U.S. Postal Service. The two-year-old Good Jobs for Michigan incentive allowing companies to capture half or all of their employees’ 4.25 percent state income tax withholding for five or 10 years has just $37.6 million in remaining incentives after four projects promising the creation of 7,800 jobs, according to the Michigan Economic Development Corp. SEE GOOD JOBS, PAGE 20

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Slow sales, consolidation mean disruption ahead for automotive suppliers By Dustin Walsh

dwalsh@crain.com

he automotive sector has recorded the longest stretch of continuous growth in history, more than a decade, but that’s about to change, if the experts are to be believed. New vehicle sales are down across much of the globe with the U.S. expected to record this year sales below 17 million for the first time since 2014. Despite strong gross domestic product growth, a key indicator of economic success, the auto industry finds

itself at the heart of uncertainty with sustained tariffs and trade wars, a shifting focus to autonomous and electric vehicles, tanking stock prices and competition from new market entrants. The industry is already in transition, cutting workforce in spades ahead of any real continued fallout. The sector cut nearly 22,000 jobs in the U.S. through May, or 211 percent more than the same five months last year, according to data by Challenger, Gray and Christmas Inc. That’s catching up quickly to the roughly 30,500 total from last year. SEE AUTO, PAGE 20

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MICHIGAN BRIEFS

INSIDE

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

Hagerty sells 25% stake to Markel Corp.

Hagerty Insurance Agency, a Traverse City-based insurance and lifestyle company known for its focus on classic and collectible vehicles, has sold a 25 percent stake for $212.5 million to Markel Corp., Automotive News reported. Markel, a Virginia-based insurer and reinsurer, has been an underwriting partner for Hagerty since 2011. “This investment will not affect our day-to-day operations in any significant way other than to increase our pace of growth,” a spokesman for Hagerty said in an emailed statement to Automotive News. “Hagerty will remain substantially a privately owned company and be globally headquartered in Traverse City.” The spokesman said Hagerty sought the investment to increase growth “to save driving and preserve car culture for future generations.” The Hagerty family, who founded the company in 1984, owns the majority of the company. It has around 1.5 million customers and employs 800 in Traverse City and another 400 at offices in Ann Arbor, Colorado, Toronto, London and Dusseldorf, Germany. In addition to insurance, the com-

CALENDAR

pany runs the Hagerty Drivers Club for auto enthusiasts, as well as an auto magazine and popular YouTube show. Markel Corp. did not immediately respond to a request for comment.

More Sears stores in Michigan to close

Sears stores in Saginaw and Portage will close this fall in the latest round of department stores to get the ax. The Hoffman Estates, Ill.-based big-box retail chain will close 26 Sears and Kmart stores around the country by late October, according to an announcement from the company. Liquidation sales at the Sears department stores and auto centers in Portage, 6780 S. Westnedge Ave., and Saginaw, 4900 Fashion Square Mall, are scheduled to begin around Aug. 15. The troubled retailer — once the biggest in the U.S. — has been battered by e-commerce and shifting consumer trends. As it continues to close department stores, it is making a play to build a portfolio of stores with smaller footprints — a key tenet of its turnaround plan. It didn’t say how many jobs would be impacted, but said workers would be offered severance payments like those allotted employees at Sears Holdings Corp. ahead of its 2018

SEARS

Sears will close its department stores and auto centers in Portage and Saginaw this fall.

bankruptcy filing. “After careful review of where we are today, we believe the right course for the company is to accelerate the expansion of our smaller store formats which includes opening additional Home & Life stores and adding several hundred Sears Hometown stores after the Sears Hometown and Outlet transaction closes,” the company said in its announcement. The newest spate of closures come

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a little less than a year after Sears entered Chapter 11 bankruptcy. It has closed thousands of stores in the past few years, and there are little more than a dozen Sears and Kmart stores left in Michigan.

Fifth Third Bank to raise minimum wage to $18 per hour

Fifth Third Bancorp plans to raise the minimum wage to $18 per hour

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for all of its employees, including around 900 in Michigan. The Cincinnati-based bank said it will increase the minimum wage from $15 effective Oct. 28, according to a Tuesday news release. The move will affect 4,900 employees, mostly at retail locations and customer support centers. In Michigan, Fifth Third Bank employs 2,684 people. About 34 percent of its employees in the state will benefit from the increase, according to bank spokeswoman Beth Oates. “A competitive compensation and benefits package is essential to our ability to attract and retain the industry’s best and brightest,” Greg Carmichael, chairman, president and CEO of Fifth Third, said in the release. Fifth Third raised its minimum wage from $12 to $15 in January 2018, marking a 50 percent increase over the past two years. The new raise translates to $500 more per month, pre-taxes, for every full-time employee currently making $15 an hour. That equates to a $15 million annual investment for the bank.

Crain’s People on the Move showcases industry achievers and their companies to the business community. For more information, contact Debora Stein at dstein@crain.com or submit directly to CrainsDetroit.com/people-on-the-move Ask about our new 6x and 13x bulk commitments. Advertising Section

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NONPROFITS

RESTAURANTS

Local Boys & Girls Clubs affiliate breaks from national By Sherri Welch swelch@crain.com

In a move aimed at maintaining local control and focus, one of three local Boys & Girls Clubs of America affiliates has broken from the national organization after operating as a part of it for 60 years. Boys & Girls Clubs of Macomb and Oakland Counties is now operating as Metro Detroit Youth Clubs. “We are seeing strategic moves among numerous national nonprofits to consolidate through mergers and acquisitions, and while there are benefits that drive those decisions, there can be drawbacks and negative implications that impact local donors and organizations that were built on generous Tillander local support and commitment,” President and CEO Brett Tillander said. As the organization met with stakeholders, one powerful perspective that emerged time and again was the value of a local focus, he said. Donors not only committed to maintaining their support for the organization, several increased their support.

David Crawford, co-owner of Big Boy Restaurant Group LLC, has been the Warren-based chain’s CEO since early 2018. Before that he held positions as interim CEO and chief marketing officer. ANDARY STUDIO

BOUNCING BACK

Big Boy’s new owners aim to reboot 83-year-old eatery chain afrank@crain.com

Need to know

Move aimed at maintaining local control, focus 

Club to launch first Wayne County site in September 

Expanding to Wayne County While its name has changed, the organization’s focus on serving youth ages 6-18 has not, Tillander said. It’s still providing literacy and other academic support, career exploration, fitness and sports programs and programs to build character, leadership and civic engagement. SEE CLUBS, PAGE 21

Dug Song

CEO-led group of investors bought Warren-based restaurant chain last fall 

As Big Boy’s new owners aim for a comeback, the change comes in small moves — taking MSG out of seasoned salt, for example — and large ones, like paying off $34 million in debt. The Warren-based restaurant chain’s CEO led a group of local investors that bought Big Boy Restaurants International LLC last fall. Now called Big Boy Restaurant Group LLC, the company plans a slew of improvements centering on more cost-effective expansion, a food overhaul and more effective marketing. Still, a comeback will be a tall order for the 83-year-old icon that has shrunk to a sliver of its former self. A main challenge could be assuring

Boys & Girls Clubs of Macomb and Oakland Counties operating as Metro Detroit Youth Clubs 

“We have really enjoyed our relationship with Boys & Girls Clubs of America, but part of our goal is to make sure we’re focused on what we’re doing in the next era of our organization,” Tillander said. “For us to have ... local control and focus on local impact, this evolution of us emerging as Metro Detroit Youth Clubs became the path forward.” The name change will also differentiate the nonprofit from Boys & Girls Clubs of Southeastern Michigan and Boys & Girls Club of Troy, helping to alleviate confusion among donors and other supporters, he said. “We are the only ... Metro Detroit Youth Clubs. There’s no confusion.”

Need to know

By Annalise Frank



Expansion effort, food reboot is under way

 New fast-casual Big Boy concept to debut in Southfield in coming weeks

customers, especially Michiganders, that Big Boy hasn’t disappeared, despite restaurant closings, CEO and co-owner David Crawford said. The chain is down from around 149 locations in 2009 (23 company-owned) to 75 now, 14 of which are company-owned. Crawford has a goal: He wants to grow Big Boy back to 100 restaurants in two years. His “reach goal” is 200 in five to seven years.

The chain plans to open five locations in Michigan this year: A new fast-casual model in Southfield targeted for the week of Aug. 19, a Garden City restaurant that opened in March, a concession stand in Fraser, and two more in Muskegon and Okemos. Most existing locations are in Michigan, though the chain has some in Ohio, California and North Dakota, according to a location map on its website. Big Boy Restaurant Group now owns the Big Boy brand, name and assets, as well as Bob’s Big Boy in California and the Big Boy Food Group in Warren that makes soups, salad dressings, baked goods and mayonnaise. That’s aside from around 120 stores owned separately in Ohio, Indiana and Kentucky. SEE BIG BOY, PAGE 18

ENTREPRENEURSHIP

After Duo Security sale, Dug Song looks to hack philanthropy By Vickie Elmer

Special to Crain’s Detroit Business

Dug Song built Duo Security into a company worth $2.35 billion, and now is intent on taking a startup mentality to Ann Arbor philanthropy. His vehicle to do that is the recently launched Ann Arbor Entrepreneurs Fund, which plans to tackle social and other issues in Washtenaw County by drawing on investments and volunteer time from local tech startups. Technology founders may find it valuable because it also provides a space to discuss needs and problems

— and may also offer some engaging volunteer opportunities to their staffs, Song said. Tech companies that join the Entrepreneurs Fund must commit to give 1 percent equity stakes, 1 percent of profits or 1 percent of staffing hours to community service. They also pay an annual membership fee of $125; steering committee members contribute $2,000. A contribution of equity carries the biggest potential payoff. “Profits don’t matter as much as equity,” said Song, who noted that it will be important to ask startups for 1

percent equity stakes when they are small. Such small stakes could turn into huge windfalls for the fund if a venture-backed tech firm sells or goes public. “Every year for 15 years, (Ann Arbor’s startup community has) had a company exit for around $200 million. We’ve been very, very successful for a city of our size,” Song said at the InterMitten Conference in June. One $200 million sale of a company that donated 1 percent of its equity in its startup days would net the fund $2 million. SEE SONG, PAGE 17

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The fire that engulfed the former Gold Dollar bar on Cass Avenue at Charlotte Street two weeks ago made the building structurally unsound. It is now slated for demolition.

Demolition on Ilitch-owned former Gold Dollar bar to start

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A former bar owned by the Ilitch family will be demolished after a July 22 blaze. The city issued an emergency demolition order KIRK the day after the PINHO fire at the former Gold Dollar bar at Cass Avenue and Charlotte Street. The notice says that the building is structurally unsound and unsafe, and “poses an actual and immediate threat to the health, safety and welfare of the public.” Art Dore Jr., president of Bay Citybased Dore & Associates Contracting Inc., said Monday afternoon that his company was subcontracted to do work by Detroit-based contractor JC Beal Construction. The Ilitch family’s Olympia Development of Michigan real estate company said demolition will begin once permits are finalized, which should be soon. It could be in just a few days. Dore said demolition is slated to be done by an excavator and that it should take three weeks. A notification to the state Department of Environmental Quality said the demolition was to begin soon. David Bell, director of the Building, Safety Engineering and Environmental Department, said Tuesday morning that because the roof collapsed during the fire, there is nothing holding the walls in place. “They are structurally unsound, so we decided it is best to bring it down,” he said. “This is something that unfortunately happens quite often when there is a significant fire at a location. The fire department goes in and does their job, but sometimes the structure is not savable.” Olympia Development is responsible for the demolition costs, Bell said. “As soon as they submit that (demolition) application to us, we are going to get it processed as quickly as possible.” The company said in a statement that it is “fully complying with the

city’s emergency demolition order” and that JC Beal Construction will “oversee completion of the work in a safe, swift and thorough manner.” A document called a notification of intent to renovate/demolish filed with the Michigan Department of Environmental Quality and the Department of Licensing and Regulatory Affairs says that the building is 4,200 square feet. Dave Fornell, a spokesman for the Detroit Fire Department, said two weeks ago that the fire was being investigated as an arson. However, the fire is no longer being treated as arson although the investigation is still open, he said Tuesday afternoon. “We have looked at the (surveillance) video, which shows no one going in and out of there, and the dog could find no flammable liquids,” he said. He said two weeks ago that it took about 90 minutes and 30 firefighters to get the blaze under control. Detroit land records show that an entity tied to the Ilitch family paid $2.23 million for the property at 3127-3129 Cass Ave. in May 2015 and transferred it to another Ilitch entity in June 2016. It is where rock band the White Stripes played many of its early concerts, according to Rolling Stone. In 2015, Jack White’s Third Man Records released “The White Stripes: Live at the Gold Dollar, Vol. III” showcasing a 1999 live performance there. Owned by Neil Yee, the Gold Dollar was an eclectic bar and live music venue open from 1996 to 2001. The former lounge opened in 1934, and in the 1950s it became a drag show bar until the late 1980s, then closed for awhile, according to Daily Detroit.

Birmingham defeats parking deck bond plan Voters in Birmingham on Tuesday overwhelmingly turned down the city’s request to sell up to $57.4 million in bonds to partially pay for a new parking deck. A scrappy campaign headed up by a pair of local political commit-

tees ultimately helped convince voters by a more than 2-1 margin that it was a bad deal for the swank suburb to issue the bonds. That kills a plan, at least in its proposed format, to build a $140 million mixed-use development downtown anchored by a new flagship store for luxury homegoods retailer RH, formerly known as Restoration Hardware.

New residential across from Detroit VA hospital A Grand Rapids-based developer plans to enter the Detroit market with a $5 million residential project in Midtown. Mosaic Homes aims to start construction in October or November on 10 for-sale condominiums on the southwest corner of John R. Street and Forest Avenue, across from the John D. Dingell VA Medical Center. The complex will also include 1,000 square feet of live/work space, said Brad Rottschafer, president of Mosaic. The development, consisting of six townhomes and four lofts with rooftop decks, is expected to take about a year to construct. Rottschafer said the project has received all approvals and just a construction permit is needed to proceed. The residential units will cost $300,000 to $600,000. They have not been sold yet. Rottschafer said Sue Mosey, executive director of Midtown Detroit Inc., got him excited about the project and the development happening in Detroit. Rottschafer, who founded Mosaic in 1993, dubs the company as a boutique homebuilder that operates mostly on the west side of the state. He said he recently responded to a request for proposals to do a 15-unit development in Detroit’s Brush Park neighborhood and intends to do more work in the market. — Crain’s reporter Kurt Nagl contributed to this report. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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Hospitals prepare for unthinkable with practice, planning By Jay Greene jgreene@crain.com

Hospitals in Southeast Michigan continually practice and refine plans for responding to a sudden influx of critically wounded patients caused by an incident like the shootings that took place last weekend in El Paso, Texas, and Dayton, Ohio, which claimed 31 lives and injured more than 50 people. Three metro Detroit Level I trauma center staff members at Henry Ford Hospital in Detroit, Beaumont Hospital in Royal Oak and DMC Detroit Receiving Hospital say that though such an incident might stretch their resources, they are prepared. Having a mass casualty plan and practicing for a variety of events — ranging from shootings, bombings, and chemical spills, to power outages or industrial accidents — is critical for a successful response if a worstcase scenario happens. “Obviously this is not something anybody Rhea wants to take a part of, but we are large and well-prepared for anything that happens to come into our doors,” said Alex Rhea, an emergency physician at Beaumont Hospital. If 15-20 gunshot victims were transported to Beaumont Hospital, even shortly after 1 a.m. as in the case of the Dayton shootings, Rhea said the staff on duty could take care of them. “I work midnights, and we are very well-staffed all the time,” said Rhea, who is one of four attending doctors at night. “It flexes depends on how many medically ill people we have. We wouldn’t have to call in extra staff unless it was extraordinary.” “We try to be” ready for a mass casualty event, said John Snider, R.N., emergency preparedness coordinator at Henry Ford Hospital. “The Joint Commission regulates hospital activity and they mandate preparedness. They call it a surge, and we have plans and procedures and trained staff ready.” A Level I center has trauma staff 24/7, can treat adults and children and has the highest capability to deal with a major event that has injured many people, among other standards. Snider said Henry Ford’s worst mass shooting intake was a few years ago when seven people were shot and brought into the ER, which is typically staffed with four or five attending physicians, 10-12 residents and 32-36 nurses, plus additional support workers to staff the 138 beds. “We train four to five times a year” for a mass shooting event, said Snider, adding they also participate in citywide drills simulating mass casualty events such as chemical spills. Snider said 20 gunshot wound victims at a time “would stretch our resources.” But typically once off-duty staff hear about a major event they usually come in to help. “Doctors and nurses run toward the sound of gunshots,” he said. Stefanie Wise, M.D., medical director of emergency medical ser-

Local public safety officials take part in an active shooter training drill with DMC Huron Valley-Sinai Hospital earlier this year.

Need to know

JJMetro Detroit trauma center officials

talk about preparedness for mass shooting event

JJDrilling and training is important to get ready for what nobody ever wants to experience JJSoutheast Michigan has five Level I trauma centers

vices and disaster management at Detroit Receiving Hospital, said the Level I trauma center is ready in the event of a mass shooting. “Our hospital is as ready as any trauma center can be,” Wise said. “We could handle (15-20 shooting victims). If there was a significant number, we could call in more staff or bring in on-call staff or hold over staff.” With 63 beds and three trauma surgery rooms, Detroit Receiving already this year has treated 78 gunshot patients. “We train institutionally for shootings, hazardous materials, chemical spills, power outages, evacuation procedures,” said Wise, adding that Receiving is preparing for a mass shooting drill later this year. In April, DMC Huron Valley-Sinai Hospital conducted a mass shooting drill that involved a simulated active shooter to train staff. The exercise was staged in collaboration with Huron Valley-Sinai’s police authority, Commerce Township fire and Oakland County Sheriff’s emergency responders. But participating in a drill and living through a real-life incident are much different. “(The El Paso and Dayton shootings are) a huge tragedy that I pray we never have to deal with,” Wise said. “Realistically I am doing everything I can to make sure the hospital, residents, doctors and the EMS system is ready.”

Public health crisis? Doctors on the ground have counterparts in the medical community

who have advocated for treating gun violence as a public health issue. President Donald Trump last Monday condemned white supremacy and the “barbaric slaughter” in El Paso and Dayton. “In one voice our nation must condemn racism, bigotry and white supremacy,” he said. But in his 10-minute statement he didn’t call on Congress to act on any gun safety laws other than stronger action to address mental illness, violence in the media and in video games. Earlier that morning, Trump tweeted that Congress should do more to strengthen background checks, but he tied the changes to changes in immigration laws he favors and that Democrats oppose. In a statement from the American Medical Association, President Patrice Harris, M.D., called for common-sense steps to prevent avoidable deaths and injuries caused by gun violence. The AMA has declared gun violence to be a public health crisis and has called for more research, background checks and gun buy-back programs. “The devastating gun violence tragedies in our nation this weekend are heartbreaking to physicians across America,” Harris said. “We see the victims in our emergency departments and deliver trauma care to the injured, provide psychiatric care to the survivors, and console the families of the deceased. The frequency and scale of these mass shootings demands action.” Because sometimes single hospitals can be overwhelmed by the sheer numbers of injured people, regional trauma networks direct ambulances to other hospitals. For example, recently Mount Sinai Hospital in Chicago temporarily stopped accepting patients because the hospital was at capacity following a three gang-related shootings in which nine people were injured and one died, CNN reported. Technically, Mount Sinai went “on bypass,” notifying the trauma network it needed to stop ambulance runs and divert traffic to other trauma centers.

Disaster training drills Macomb County last week planned a full-scale mock disaster training drill with a simulated active assailant that will be conducted at COMTEC in Mount Clemens, L’Anse Creuse High School in Harrison Township and three other locations. Participating will be the Macomb County Emergency Management and Communications, Clinton Township Emergency Management, and the city of Warren Emergency Management exercises will also occur at Clintondale High School, Clinton Township and Fitzgerald High School in Warren. In Michigan, there are approximately 86 adult trauma centers, with 10 Level I (highest level), 23 Level II, 20 Level III and 33 Level IV, the Michigan Department of Health and Human Services said. There are also seven pediatric trauma centers, including three Level I centers. Michigan’s trauma network is divided into eight regions, with Southeast Michigan having two regions because of its size. Region 2 North includes Oakland, Macomb and St. Clair counties; Region 2 South includes Wayne, Monroe and Washtenaw counties and the city of Detroit. Besides the four Level I trauma centers in the tri-county area — at Beaumont, Henry Ford, DMC Detroit Receiving and Ascension St. John Hospital — there are two Level I centers in Ann Arbor, at the University of Michigan and St. Joseph Mercy hospitals. All of the hospitals in Michigan’s trauma network have well-developed and well-honed disaster plans and experience enacting these plans during drills and exercises as well as during actual incidents. Once a hospital is notified of a mass casualty event, the hospital activates its disaster plan. This puts into motion a series of actions. It includes alerting necessary staff and departments on incoming patients and making room in the ER for casualties by admitting, discharging or asking existing patients to wait if medically possible.

DETROIT MEDICAL CENTER

It usually also means activating an incident command system and implementing disaster triage. Not all patients arrive at hospitals at the same time and not all arrive from ambulances. Hospital trauma chiefs must allocate staff appropriately based on the seriousness of the injuries. Depending on the number of patients coming in, hospitals could call in additional doctors and nurses. Often in large emergencies, ER staff can become exhausted and need to be relieved, thus necessitating additional staff from the hospital’s on-call directory or from neighboring hospitals. Since Beaumont’s new trauma center opened in September 2017, Rhea said, the four trauma room bays where emergency surgery and other procedures are performed have been full several times. “We’ve had a couple car accidents with multiple cars where all the trauma bays were full. Those prepare you for a larger-scale casualty” event, he said. On Nov. 14, 1991, Beaumont’s ER experienced its most traumatic event when a disgruntled worker at the Royal Oak Post Office killed four of his co-workers with a handgun and wounded several others before shooting himself. Four of the injured people, including the shooter, were transported to Beaumont for treatment. The shooter, Thomas McIlvane, 31, was pronounced dead shortly after arrival at Beaumont. Rhea said it is hard to comprehend being in a situation in which he would be called to treat people in a mass shooting event. “The thing that hits closely to me, having a 6-month-old and a 2-yearold daughter, is if anything like that happened to my family,” Rhea said. “It just shows you how fragile life is. From a physician standpoint, it makes our job so much more important to make sure we are adequately prepared to turn around that situation.” Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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Life Remodeled’s one-stop Durfee center adds tenants By Sherri Welch swelch@crain.com

Life Remodeled has made a name for its ability to mobilize 10,000 volunteers each of the past three years for its six-day cleanup of central Detroit. But its largest impact in the neighborhood could be yet to come. The nonprofit has secured lease commitments from three new organizations for the repurposed former Detroit Public Schools Community District school building it’s converted into a community center, with public use of gym and auditorium spaces and services to help lift people in the neighborhood out of poverty. Those leases will bring it to 27 business, government and nonprofit service provider tenants in the Durfee Innovation Society center, and depending on final agreements, could bring ocLambert cupancy up to 89 percent, founder and CEO Chris Lambert said. He’s looking to bring the 143,000-squarefoot center to full occupancy by year’s end. Recently, Life Remodeled secured a $600,000 unrestricted grant from the Ballmer Group to fund, among other things, measurement of the impact the services offered at the center are having in the community. “This project is the most important one we’ll ever do,” Lambert said. “It’s a one-stop shop of opportunity” for children, youth and adults by moving the best and brightest organizations into one building, he said. “Those organizations are better together just by association and also by proximity and very intentional steps we’re going to take to create that ecosystem.” Efforts continue to complete renovations at the former Durfee Elementary-Middle School at 2470 Collingwood St., between Linwood Street and Rosa Parks Boulevard. Life Remodeled is working to raise the last $1.3 million of the $4.8 million budgeted to renovate the historic building, Lambert said. At the same time, it’s continuing to fill out the services offered from the building. “We’re selective on who we let into our building. (Tenants) have to be involved in improving education, in workforce development, entrepreneurism (and) human services,” Lambert said. Three new tenants are expected to move into Durfee this fall: J Metro Detroit Youth Clubs, formerly Boys & Girls Clubs of Oakland & Macomb Counties, will launch its first Wayne County club in September. J JVS Human Services is bringing a Detroit at Work workforce development intake site to the center in October, in partnership with ResCare Workforce Services to provide career coaching, career technical training and job seeking skill workshops. J Methodist Children’s Home Society, which launched new child-abuse-prevention and substance-abuse services at the center early this year, plans to expand its space at the center to house new substance abuse, foster care and senior programs it recently took on with its

BRENDAN ROSS

Life Remodeled has repurposed a former school building into a community center, with public use of gym and auditorium spaces and services.

Need to know

With three new tenants set to move in this fall, center is up to 27 organizations J

J Ballmer Group has granted $600,000 in unrestricted funding to support, measure impact J Goal is to take community center model to another Detroit neighborhood in 2021

acquisition of Community Social Services of Wayne County. As opposed to growing on its own, Methodist Children’s Home Society saw at Durfee the opportunity to team with like-minded organizations to better serve and strengthen the community, President and CEO Kevin Roach said in an emailed statement. Durfee “is a perfect fit for this career center considering there are over 30 other human service organizations in the building offering literacy services, career training, family services, youth recreational services, financial education and advocacy,” said James Willis, vice president, workforce development and rehabilitation at JVS. Services at the center now include job mentoring, training and/or placement in areas like coding, marketing, retail, construction and the electrician field, basic social services, behavioral health, business support, literacy programs, foster care and adoption services, senior services and violence prevention programs. Just more than a year ago, U.S. Housing Secretary Ben Carson designated Durfee as the first of a series of “EnVision Centers” or neighborhood service hubs across the country. The public-private collaborations that make up the federally designated centers are aimed at accelerating economic mobility for low-income households in communities that include HUD-assisted housing. It’s the center’s tenants that will drive impact in the neighborhood; Life Remodeled’s role is to help them be better together, Lambert said. With the Ballmer Group funding, the nonprofit hired two of three new employees, bringing it to a staff of 11. It will also use the funding to market the services to youth and adults in the

community, coordinate with the Durfee and Central High schools next door and to contract with Gingras Global, a tenant at Durfee, to help it measure the impact of programs, Lambert said. A data collection system and set of dashboards will enable collection and analysis of simple and streamlined information to shape funding, marketing and programming strategies. With the tenants and services offered at Durfee, Life Remodeled is looking to: J Make high-quality, effective human services programs available to central Detroit residents J Improve scores for K-8 students across Durfee Elementary-Middle School (now housed in the Central High School building), which scored in the bottom 1 percent of state scores on math and reading last year, Lambert said, to improve education outcomes at Central, where 76 percent of students were chronically absent last year J Connect residents and other Detroiters with thousands of sustainable job opportunities each year J Reduce crime in the neighborhood “When you increase job ... and educational opportunities, crime has no choice but to decrease,” Lambert said. “Crime is directly tied to lack of opportunity, joblessness, lower education levels and illiteracy.” The success of any neighborhood efforts will be directly tied to the ability of organizations to hear and put into action the voices of children, youth and adult residents, Lambert said. To that end, nine adult residents from the neighborhood serve on an advisory council to Life Remodeled to provide input and feedback from the community, and a youth advisory council will launch this fall, he said. Rooting programs and services aimed at helping lift people out of poverty in the community is something the Ballmer Group supports, Executive Director Kylee Mitchell Wells said in an email. “The Durfee Innovation Society is an example of public, private and philanthropic partners working together to fill a gap in the community by offering a variety of resources that

have a dynamic approach for helping kids and their families increase their chances of economic mobility,” Mitchell said. Corporate support for Life Remodeled’s operations has grown by leaps and bounds since it launched Durfee center, Lambert said, with newly awarded grants of $50,000 or more from companies including BASF SE,

L&L Products, Masco Corp., Sun Communities and White Pine Investment Co. More than 160 companies have contributed $1,000 or more this year, he said. Life Remodeled is operating on a cash budget of just more than $3 million and an in-kind, donated goods and services budget of $2.2 million. The continued support in its work “gives us confidence that we can and will eventually multiply this model throughout the city of Detroit, with the hope of expanding to additional large U.S. cities over the next 10 years,” Lambert said. Life Remodeled plans to begin work in another Detroit neighborhood in the fall of 2021, he said. It will continue to run the Durfee Innovation Society for the full 50 years of the lease but move to another Detroit neighborhood at that point to create another one-stop service center and also do annual neighborhood cleanups and blight removal, Lambert said. It will look for a neighborhood with high levels of crime and blight, academic challenges and workforce shortages, he said. And it will look for another building that’s embedded in the community and walkable, like a school building, he said. Currently, Life Remodeled is considering the Brightmoor, Jefferson-Chalmers and lower east side neighborhoods, Lambert said. Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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OPINION EDITORIAL

Oakland follies don’t instill confidence W

hatever else L. Brooks Patterson was known for, he was lauded for maintaining a deep and loyal leadership bench running Oakland County that made it a model of good governance. As Kirk Pinho reports on Page 1, a significant chunk of that bench is expected to scatter to the winds as power shifts in the wake of Patterson’s death. The rapid-fire bungling of the process to replace Patterson, run by the Democratic majority on the Board of Commissioners and its (now former) Chairman Dave Woodward, has done nothing to instill confidence in the county’s future leadership. It’s been a mess of conspicuous backroom dealing and organizational stumbles. In the short span of a week: The commission set a special meeting five days after Patterson’s death, then canceled the meeting two days before it was supposed to happen. Woodward, a Democrat, quit the chairmanship of the board, a required step for him to seek the county executive job. Because of the 10-10 partisan split that resignation caused on the board, rumors arose that a Republican could also resign from the board and take a deputy role under Woodward. Then, it was decided the county would take applications for the job. And another meeting was set to vote on the next executive. Except, somebody failed to note that Aug. 15 meeting date was the same day as Patterson’s funeral, angering Patterson’s family and former lieutenants. So it was moved back yet another day. Oakland County Treasurer Andy Meisner, also a Democratic hopeful for the executive job, slammed the process early in the week, then late in the week said he wouldn’t apply for the job but would still be running in 2020. Apparently he realized his best shot might be to stay out of this mess entirely. We await with eagerness and trepidation the next turn of the screw in this soap opera. The political machinations so far make the idea that the application process can be legitimate laughable. Voters will get the opportunity to weigh in on the results in just a little over a year. Whoever winds up running the county until then will need to do a better job than what we’ve seen so far.

To the Editor: For nearly 70 years, the Detroit Institute of Arts has been an important part of my life. I worked as a puppeteer at the museum as a teen, and during the time of the Grand Bargain I was proud to help raise $866 million to ensure the museum stayed open and art stayed on the walls. My wife is an emeritus board member and we have lived just miles from the DIA for nearly our entire lives. Through Oct. 13, the DIA is displaying over 40 works of art in the exhibition “Humble and Human: Impressionist Era Treasures from the Albright-Knox Art Gallery and the Detroit Institute of Arts” in honor of Ralph C. Wilson Jr., the late founder and owner of the Buffalo Bills and someone I was fortunate to call a friend during his most extraordinary life. I served as Ralph’s lawyer for 15 years before he passed away in 2014 and currently serve as chairman of the Ralph C. Wilson Jr. Foundation, which made this exhibition possible. For me, “Humble and Human” is one of the most important and unique exhibitions the DIA has offered in its remarkable history, and

Trump’s policies have helped Michigan businesses, families

LETTERS

Exhibition honors visionary Detroiter

COMMENTARY

I strongly encourage residents to take the time to experience it. Ralph loved Impressionist art and visionary painters like Pierre-Auguste Renoir, Claude Monet and Vincent van Gogh. Though he owned several Impressionist paintings, Ralph was not himself an artist nor did he talk about brush stroke techniques or the technical aspects of the art. He simply loved art for what it represented — turning conventional wisdom on its head or challenging the status quo. Through the foundation and our support of education leaders like the Detroit Institute of Arts, Ralph’s impact continues as the foundation supports initiatives that help young Detroiters thrive physically, mentally and emotionally in a world that is increasingly complicated. Ralph had an inspiring and rare approach to life, business and community. “Humble and Human” draws connections between his life of integrity, hard work and honesty and the amazing art showcased there. I encourage everyone from Southeast Michigan and beyond to visit the DIA to celebrate the centenary of the birth of Ralph C. Wilson Jr. Eugene Driker Chairman Ralph C. Wilson Jr. Foundation

uring the Democratic presidential candidates’ July 31 debate in Detroit, Joe Biden came out in favor of eliminating the use of all coal and fossil fuels. Others on the debate stage, including Kamala Harris and Jay Inslee, quickly endorsed the same policy, all in the name of a radical climate agenda that would cost trillions of taxpayer dollars and put Americans out of work. What the 2020 Democrats didn’t say was how dangerous this fossil fuel policy would be to the people of the Midwest, particularly Michigan. Eliminating fossil fuels would put thousands of workers out of business and destroy the automobile industry, which is a critical part of the region’s economy. By embracing this policy, Democrats continue to prove they have no interest in helping middle America. Under President Trump, the automobile industry has added 109,500 new jobs and manufacturing wages have surged. Companies like Fiat Chrysler and Ford have ramped up their investments and production in Michigan, adding thousands of new jobs and building new facilities to house operations: the former is building a $1.6 billion assembly plant in Detroit and adding 6,400 new jobs, while the latter is building its own new autonomous vehicle plant and adding 900 new jobs over the next few years. Michigan’s auto industry has been

OTHER VOICES Ronna McDaniel

revitalized by this administration, which is why Democrats’ proposals are so dangerous; they would undo this progress and take us backward. It’s not just their fossil fuel policy — it’s also their failure to embrace the U.S.-Mexico-Canada Trade Agreement (USMCA), which would be a boon to American industries, farmers, and workers. Last year, Michigan exported $23 billion to Canada and imported $56 billion from our northern neighbor; we exported $12 billion to Mexico and imported $47 billion. Our auto workers would benefit from USMCA provisions that encourage more goods to be manufactured at home. Our farmers would benefit from expanded access to key imports. Our small- and medium-sized business, the vast majority of Michigan’s exporting companies, would be empowered to trade with our neighbors. Not to mention, the USMCA has the support of groups like the Michigan Chamber of Commerce, and companies like Ford Motor and Fiat Chrysler. Even so, the Democratic presidential

candidates entirely ignored the issue during the debate and once again swept the concerns of middle America under the rug, choosing instead to endorse radical, socialist policies that would hike our taxes and bankrupt future generations. Meanwhile, President Trump’s policies continue to help Michigan families. His tax cuts provided middle-class Michiganders an average tax cut of over $1,400 and led companies of all sizes to increase bonuses and benefits for employees. Michigan added 48,500 new jobs last year, and nearly 300 distressed communities across the state have been named Opportunity Zones for greater investment. Our communities are better off, thanks to Republican leadership. Ahead of 2020, the difference has never been clearer: Democrats have nothing to offer American workers and industries, but President Trump will keep fighting to make sure they thrive. Ronna McDaniel of Northville is chairwoman of the Republican National Committee. She’s a former chair of the Michigan Republican Party.

MORE ON WJR Listen to Crain’s Group Publisher Mary Kramer and Managing Editor Michael Lee talk about the week’s stories every Monday morning at 6:15 a.m. Mondays on WJR 760 AM’s Paul W. Smith Show.

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Facing the talent shortage head-on with apprenticeships Having skilled, competent employees is key to any organization’s success. This is no longer easy for manufacturers to come by, however, as a massive talent shortage has emerged in the industry in recent years, leaving many jobs unfilled and tasks undone. It is expected that this talent gap will result in millions of positions remaining vacant in the years to come, a number that will only continue to grow if nothing is done to counteract this trend. To provide solutions, we must first understand the roots of the problem. Many issues and challenges have combined to create the perfect storm for manufacturing jobs, including: 1. Silver tsunami. The large number of baby boomers retiring each year, also referred to as the “silver tsunami,” has been anticipated for years, yet it is still a main contributing factor to the talent shortage. These experienced workers continue to leave the workforce at an increasing rate, taking their skills with them and leaving behind vacancies that cannot be filled easily. Decades of experience in manufacturing cannot be taught to new workers overnight, making it nearly impossible to sufficiently fill the voids these workers leave behind. 2. Industry 4.0. As new and interconnected technologies, commonly known as Industry 4.0, continue to grow in the manufacturing world, more and more manufacturers are having difficulty keeping up with the latest trends. In addition to trying to understand the vast amount of innovations currently on the market, manufacturers face the added challenge of finding talent with the skills and education necessary to operate such technologies. Industry 4.0 calls for a new kind of worker, with more advanced and more specific skills than previously needed for a career in manufacturing, adding to the gap in talent needed and talent available. 3. Education and training. The issue of insufficient training and education has contributed largely to the skills gap facing manufacturers. From lack of interest in STEM career paths to lack of awareness about career opportunities available to lack of proper training for those interested in pursuing a manufacturing career, it can be difficult to prepare the students of today for the manufacturing jobs of tomorrow. At this point you may be asking yourself, “How can we close the skills gap?” A growing solution is apprenticeship programs. Apprenticeships are one of the most effective, proven ways to directly train and retain workers while shrinking the talent shortage. As most processes in manufacturing involve detailed protocols and a deep understanding of equipment, it is crucial that all workers have comprehensive training in order to be successful. Placing students directly on the factory floor with experienced employees providing guidance can eliminate challenges associated with poor training. Implementing on-the-job training for students not only provides them with valuable hands-on learning experiences, but connects

OTHER VOICES Elliot Forsyth

manufacturers with future workers. Additionally, apprenticeships provide manufacturers with a way to invest in the future of their company and their employees, giving

them a solid foundation and room to grow within their organization. Investing time and effort in training and developing staff through apprenticeships can boost your company’s desirability, helping workers to envision future growth and career opportunities in your company. This can support employee retention efforts, as well as attract outside workers seeking to grow their skills. Ultimately your organization can become a company of choice that is recognized for its commitment to developing the next generation of manufacturers. Methods such as apprenticeships

are a proven way to combat the talent shortage. Although it will take years of combined efforts from the government, schools and manufacturers to successfully address this skills gap, steps such as these can go a long way in raising the next generation of manufacturers. Elliot Forsyth is vice president of business operations at the Michigan Manufacturing Technology Center, where he is responsible for leading practice areas that include cybersecurity, technology acceleration, marketing, market research and business development.

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A growing solution is apprenticeship programs. Apprenticeships are one of the most effective, proven ways to directly train and retain workers while shrinking the talent shortage.

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FOCUS

MARIJUANA AND AGRIBUSINESS FINANCE

Michigan municipal retirees funding state’s largest pot operations

MARKETING SMOKE SCREEN

16 public pension funds hold marijuana REIT stock By Dustin Walsh dwalsh@crain.com

As social media ad platforms bar marijuana marketing, young industry turns to old platforms, invents new ones

Instagram and others, effectively bar marijuana-related businesses from using the marketing tools built into their platforms. Because marijuana is still a Schedule 1 narcotic at the federal level, social media platforms ban ads. For instance, Facebook’s advertising policy states “ads must not promote the sale or use of illegal, prescription or recreational drugs.” Google’s advertising policy bans ads for “substances that alter mental state for the purpose of recreation or otherwise induce ‘highs.’”

Southwest of Lansing, in Dimondale, about 10,000 marijuana plants are growing in a 25-acre, 57,000-square-foot grow house — the largest in the state. Those plants, grown by Green Peak Innovations to supply Michigan’s medical marijuana dispensaries, hold a value approaching $4 million. The success of Green Peak’s grow operation and the under-construction 47,000-square-foot Harrison Township operation of Emerald Growth Partners is supported by approximately 75,000 Michigan public employees, indirectly. The Municipal Employee’s Retirement System of Michigan, a statewide public employee retirement pension fund, is an investor in San Diego-based Innovative Industrial Properties. IIP is a publicly traded marijuana-focused real estate investment trust. IIP owns dozens of properties across the U.S., leasing them to marijuana growers and retail operations. At least 16 public pension funds have invested in REIT through the S&P 600 Smallcap Index, a move local marijuana executives see as providing legitimacy to the fledgling industry. “We’re obviously big believers in marijuana as a product and we subscribe to the thesis that it’s a strong investment and the growth opportunity of the future,” said Jim Radway, co-founder and CEO of Green Peak. “We think lots of institutional investors are looking at or are already in this space and it will continue to become more interesting for them.” MERS representatives declined to discuss the investment, only pointing out that it did not directly invest in the marijuana industry. “Innovative Industrial Properties is part of our S&P 600 Index, not an investment of our active portfolio,” said Carrie Lombardo, chief strategic and external affairs officer for the pension fund. “MERS does not actively pick stocks for our index funds which are designed to replicate the performance of a broad index.” To that point, MERS also holds about 25,000 shares in Richmond, Va.-based Altria Group Inc., one of the largest producers of tobacco products including the maker of Marlboro cigarettes Philip Morris USA. As more marijuana-related companies turn public — a half-dozen launched initial public offerings already this year — more investments may occur. But the negative stigma toward the industry remains an issue, said Radway. REITs like IIP provide investors an avenue to invest in the industry without directly investing in companies that grow or sell marijuana.

SEE SCREEN, PAGE 12

SEE REIT, PAGE 12

ILLUSTRATION BY ELLEN WEINSTEIN FOR CRAIN’S

By Dustin Walsh

dwalsh@crain.com

erry Millen knows his clientele. More than 60 percent of his customers at medical marijuana dispensary Greenhouse of Walled Lake are 60 years or older. So recently, he found himself schlepping $4,000 of audio/visual equipment into the great room at Brookdale Senior Living in Novi. For Millen, the 114-unit retirement community is a honey hole of potential customers looking to improve daily life via the medicinal properties of cannabis. “You’d be surprised how many want to hear

about marijuana,” Millen said. “Getting out there and providing these educational seminars is the way to get into a community so they can learn about us. If I can’t get them into my store, I’ll bring my store to you.” Greenhouse and the rest of Michigan’s burgeoning marijuana industry are increasingly seeking ways to market themselves amid stiff competition as they remain locked out of the mod- Millen ern marketing tools. Despite the industry’s rapid growth throughout the U.S. and an eroding negative stigma, social media marketing platforms, such as Facebook, Google,

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Special to Crain’s Detroit Business

Emerald Growth Partners founder and CEO Randall Buchman says the new industry’s workforce needs will be “tremendous in all aspects.” Buchman’s company is wrapping up construction on a Harrison Township cultivation facility, and he’s currently working on hiring about 60 people to staff it, “from the top grower all the way down to a janitor.” As more cannabis facilities open statewide, those hiring needs will be multiplied. The workforce needs are myriad. Buchman sees potential in hiring talent from other industries at the corporate level. “We’re not just looking for people that have been in the cannabis industry,” he said. “We’re looking for other people to work in other aspects of our company, like compliance. You don’t have to be a cannabis person to know compliance.” One of the biggest challenges will be bringing existing cannabis caregivers — those who are licensed by the state to cultivate and supply small amounts of cannabis for their patients — into the new market. Buchman says he’s conducted job interviews with a few caregivers who were uninterested in joining his operation because he couldn’t offer them more than they were making alone.

Leffert

Hendricks

“They’re looking at what they can make sitting on their couch in their basement or their barn, running under a caregiver model, and they’re not necessarily paying taxes on that money,” he said. “They don’t have to be at work at 9:00 and punch in. They don’t have to follow that lifestyle and they don’t necessarily want to.” While Buchman anticipates that many caregivers will remain “on the black market” for the time being, he expects that to change as legal retail operations with a broad variety of tested product come online. “I think a caregiver/black market person is going to struggle giving that same sort of security to the patients,” he said. Could cannabis be included in the Michigan Right to Farm Act?

The Generally Accepted Agricultural and Management Practices in Michigan’s Right to Farm Act (RTFA) establish standards of normal farming activity, pre-empting local zoning ordinances and protecting conforming farmers from nuisance lawsuits. Bob Hendricks, senior counsel with Grand Rapids-based law firm Warner Norcross + Judd, says the RTFA “probably” covers cannabis growers “in some very narrow sense” right now — but that could be expanded. “If the right people want to bring this before the agricultural department and advocate on that score, I think they would have a lot of opportunities to be successful,” he said. In a 2018 article for the Michigan Bar Journal, Hendricks opined that cannabis growing operations could be easily defined as farms under the RTFA’s stipulations, also noting that they already face public and municipal nuisance concerns. For example, Hendricks said he “wouldn’t be at all surprised” if a GAAMP were created to establish guidelines for managing the smell from cannabis facilities. “[Concern about] the smell sometimes may be a little bit overblown, or it might take on dimensions that are even broader than reality,” he said. “But it is absolutely a topic that people are concerned about and care about.” One or more GAAMPs pertaining to cannabis would not affect municipalities’ right to enforce bans against recreational cannabis businesses. But GAAMPs would protect cannabis operations from local regulations or lawsuits that might otherwise limit their ability to do business. The decision ultimately lies with the Michigan Department of Agriculture and Rural Development, which reviews GAAMP

What will be the environmental impact of the industry, and will new regulations be needed?

“We don’t see any new regulations necessary to treat the marijuana industry differently than we treat any other industry,” said Robert Elmouchi, environmental quality analyst for the Michigan Department of Environment, Great Lakes, and Energy. But there’s no question that the rise of a legal recreational cannabis industry will impact the environment. The state is working to understand those impacts and communicate accordingly with the industry. EGLE environmental quality analyst Kaitlyn Leffert says the cannabis cultivation and processing industries have “distinct environmental impacts.” Concerns on the processing side are fairly straightforward. Solvents used in processing have the potential to create unhealthy emissions or runoff. The big question for now, though, is the air emissions impact of cannabis cultivation. “We know there are emissions of volatile compounds from the plants themselves, but we don’t really have a good understanding of the quantity of those emissions and whether it’s something we should be concerned about from a regulatory standpoint,” Leffert said.

“Many companies are not familiar with our rules, and we’re glad to provide guidance and information for them.” Robert Elmouchi

Elmouchi says EGLE is awaiting the results of a study the state of Colorado is currently conducting on that topic. One potential concern is that some well-intentioned growers use a mister to add odor-controlling chemicals to the exhaust from their facilities, not realizing that those chemicals may be releasing volatile organic compounds into the atmosphere in the process. Leffert says many cannabis entrepreneurs may gain their business licenses and think that’s the “end of the story” as far as compliance with state regulations. However, a host of standard environmental regulations still apply to them — which is why Elmouchi strongly recommends they call EGLE’s Environmental Assistance Center. “Many companies are not familiar with our rules, and we’re glad to provide guidance and information for them,” he said.

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Michigan voters’ approval of the Michigan Regulation and Taxation of Marihuana Act (MRTMA) last November resolved one major legal anxiety for the state’s cannabis industry, but it also introduced countless new questions. There’s still considerable uncertainty over specifics of the state’s recreational cannabis policy itself, as emergency rules released last month will expire early next year. Those looking to get into the business of growing and cultivating cannabis — or who already do so illegally and want to become legit, or who want to know what it would mean to live or do business near a cannabis cultivation operation — are muddling through, trying to understand what comes next. Crain’s spoke to experts in cannabis cultivation and regulation. Here are three questions they identified as being on people’s minds as the legalized cannabis horizon gets closer.

changes annually. If the state agriculture department does move to create one or more cannabis-related GAAMPS, Hendricks said, “it’ll be another sign that cannabis is becoming not a lightning rod for controversy, but another component of our very diverse economy. I would welcome it.”

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SPECIAL REPORT: MARIJUANA AND AGRIBUSINESS

SCREEN FROM PAGE 10

“The typical marketing toolbox doesn’t apply to this type of regulated industry right now,” said Brandon Chesnutt, vice president and director of digital and development at Bingham Farms-based Identity Marketing and Public Relations. “A thing medium-sized businesses take for granted, cannabis companies can’t touch.” Identity is currently developing marketing strategies for a few marijuana-related business, but Chesnutt would not disclose the companies before the campaigns are rolled out. The rules don’t just apply to those directly involved in the selling of cannabis, but also potentially to service providers, said Derek DeVries, director of social strategy at marketing and public relations firm Lambert & Co. in Grand Rapids. Lambert represents Grand Rapids-based Specialty Agriculture Insurance Co. of Michigan, which sells liability insurance to the industry. That company must be careful of violating social media policies as well. “They are not in violation of any federal laws and not selling cannabis products, but because the way the (social media) filters operate, they are clumsy, our clients may get taken down,” DeVries said. “A lot of companies are testing the limits, trying not to run afoul of the rules, but it’s risky, so we’re building out what a safe strategy would look like.” Those who attempt to sidestep the social media platforms’ rules face stiff penalties, such as a deactivation of their account, thus losing all of their Facebook or Instagram followers. “If you get deleted, there’s no recourse,” said DeVries. “There’s no dedicated team at Instagram to seek out about restoring your Instagram account. At any time they could just decide, or a competitor or anyone, really, could flag you (for violating rules) and your account could be taken down. Everyone is being very, very cautious about staying inside the rules.” The social media companies are taking this hard line approach in an attempt to not upset the White House and U.S. Congress, DeVries said. “The feds already don’t like this industry and Google, Facebook, etc. aren’t exactly best friends to Congress right now,” DeVries said. “They are the easy linchpin to go after (to harm the marijuana industry). So they are just steering clear right now,

GREEN PEAK INNOVATIONS

Green Peak Innovations, a marijuana grower and dispensary owner based southwest of Lansing in Dimondale, sent a marketing team to Detroit’s Movement Electronic Music Festival in May. The team handed out swag, such as T-shirts and hats emblazoned with the company’s marijuana brand North Cannabis Company, which is sold in around 50 dispensaries throughout the state.

“We’re all engaging in old media, like newspapers or billboards. Sure, we’re boxed out of the new methods, but if this were a federally regulated industry right now, I’m quite certain Starbucks, Coca-Cola and Pfizer would own it. So you deal with it and try to get creative.” Jeff Radway

leaving the industry to find different ways to approach marketing.” The different ways are much like the old ways — such as billboards, direct mailers, email signups and events. Green Peak Innovations, a marijuana grower and dispensary owner based southwest of Lansing in Dimondale, sent a marketing team to Detroit’s Movement Electronic Music Festival in May. The team handed out swag, such as T-shirts and hats emblazoned with the company’s marijuana brand North Cannabis Company, which is sold in around 50 dispensaries

throughout the state. Green Peak also used billboard advertising around the highways leading into Detroit during the festival and gave product to some of the artists at Movement in hopes of receiving a plug. “Your brand is still represented on Instagram and Facebook and you can’t do anything to violate those rules, so you get creative to get people there,” said Jeff Radway, co-founder and CEO of Green Peak. “You do things like grand openings or guerrilla marketing to get their attention.”

REIT

FROM PAGE 10

“There’s still in this industry a common reference to plant touching and non-plant touching,” Radway said. “The more regulated, more conservative the investor that still wants to participate in the industry gravitate toward non-touching options. But once investors get comfortable, there’s tremendous opportunity in the plant-touching side.” MERS held 2,910 shares of IIP as of June 30, valued at just over $300,000. By contrast, Blackrock Inc., one of the largest investment management firms in the world, holds more than 1.3 million shares of IIP, valued at more than $140 million. IIP owns 24 properties totaling

GREEN PEAK INNOVATIONS

A San Diego-based marijuana-focused real estate investment trust invested $13 million to build out Green Peak’s medical marijuana growing space in Dimondale and plans to invest up to another $21 million to expand it.

New media sites have filled the void left by legacy social media, such as Leafly and Weedmaps. These sites offer news and advertising specifically for the marijuana industry, but don’t reach as wide of an audience, Chesnutt said. Weedmaps operates like a Yelp! for marijuana dispensaries, allowing users to identify locations as well leave and read reviews. Leafly provides a similar service while also allowing users to research cannabis strains and industry news. “There exists a marketing structure for a cannabis company, but it only focuses on where a customer might already exist,” Chesnutt said. “They are only targeting those taking that extra step to seek out cannabis, not targeting a more general audience. So your marketing dollars are limited there, in my opinion.” While the social media marketing blackout is frustrating for the industry, it may be better than an alternative reality where the platforms were receptive to marijuana because it was legal at the federal level. “I will say that it’s a level playing field,” Radway said. “We’re all engagroughly 1.8 million square feet leased exclusively to state-licensed marijuana operators. The REIT invested $13 million to build out Green Peak’s space in Dimondale and plans to invest up to another $21 million to expand the space, Radway said. IIP will break ground on the expansion in August, he said. Green Peak was prequalified by Michigan’s Marijuana Regulatory Agency for 12 Class-C grow licenses, allowing the company to grow up to 18,000 plants. The company plans to get to 15,000 at the Dimondale location with another 3,000 at a facility in Lansing. Green Peak will produce more than 20,000 pounds of marijuana flower annually and add capacity for oil, edibles and vape production with the expansion.

ing in old media, like newspapers or billboards. Sure, we’re boxed out of the new methods, but if this were a federally regulated industry right now, I’m quite certain Starbucks, Coca-Cola and Pfizer would own it. So you deal with it and try to get creative.” Millen is doing just that. In the coming weeks, he’ll open Greenhouse Genuine CBD adjoined to his current medical marijuana dispensary. Largely unregulated, CBD, or cannabidiol, is an extract from marijuana that contains minuscule to no traces of THC, the chemical that causes a marijuana user to get high. CBD products are sold as oil, gummies, lotions and more, and are designed to relieve anxiety and aches and pains. The products are so popular, they can now be found everywhere from Kroger stores, which sells CBD-infused lotions locally, to Family Video, which sells CBD oils and gummies. Customers enter Millen’s CBD store through the same door as his medical marijuana shop, providing CBD customers with a direct peek at the store’s marijuana offerings. Millen believes this will entice customers to either get a medical card to purchase marijuana or remember the brand when adult-use marijuana goes on sale in his shop next year. Plus, CBD doesn’t violate social media policy. “I’ll be able to advertise Greenhouse Genuine CBD without any problems,” Millen said. “People can come in off the street (with no medical marijuana card) and buy CBD products and see into my other facility. They’ll be able to see it’s like the Pottery Barn and Grandma-safe. That’ll create its own word of mouth.” Word of mouth is the only really successful way for marijuana businesses to compete, Chesnutt said. “People are focusing on their own properties and their customer service operation,” Chesnutt said. “There are fewer ways to reach a wider audience, so that makes (online) reviews really, really important.” Millen agrees. “It’s marijuana and sometimes marijuana sells itself,” Millen said. “As long as you listen to your customers and run a great shop, word of mouth is the best you can do. These aren’t original ideas. It’s about execution. Facebook can’t make you a great shop with a great product.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh Emerald Growth Partners’ Harrison Township operations — a 47,000-square-foot grow operation being built by IIP — is currently under construction with an expected completion date in September. Randall Buchman, CEO of Emerald Growth and its dispensary operations Pleasantrees, was unaware of MERS’ stake in IIP, but called it a safe bet. “The (marijuana) industry isn’t proven, but if you look at it from a high level, it’s just real estate, which is proven,” Buchman said. “(IIP) are making good decisions on who they are deploying their money with, so it makes complete sense they would receive these kinds of investors.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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Oral insulin clinical trial underway at Flint research center By Jay Greene

jgreene@crain.com

The race is on to perfect a capsule to control type 2 diabetes — and a Michigan research clinic is playing a part. Experts said oral insulin in capsule form holds the best chance for people with diabetes to improve treatment compliance with their chronic disease, which is the seventh-leading cause of death in the U.S. This is because an estimated 25 percent of the 870,000 people in Michigan and more than 30 million nationally diagnosed with diabetes don’t take their daily injection of insulin either because it is too expensive, it is unpleasant or they fear needles. “It’s a big problem. Taking insulin orally could increase compliance because if they have a choice between a pill or a shot, they will take the pill,” said Ahmed Arif, M.D., owner, director and principal investigator at AA Medical Research Center, a multi-specialty clinical research facility in Flint where the oral insulin drug is being tested. Several pharmaceutical companies such as insulin-maker Novo Nordisk and research universities, including Massachusetts Institute of Technology and Harvard University, have been testing a variety of approaches for oral insulin over the past several years. Drug giant Pfizer invested millions into oral insulin research only to come up empty in 2007. The chief problem with making oral insulin work is getting the insulin-filled capsule past the stomach, where the pills are destroyed by acid. “Oramed has a special delivery system to protect the insulin, get it past the stomach to the liver where it can work,” said Arif, an internist and pediatrician. AAMRC is one of 24 research sites in 13 states, and the only one in the Midwest, participating in a phase two clinical trial sponsored by New York-based Oramed Pharmaceuticals (NASDAQ/TASE: ORMP), a small drug company backed by venture capitalists CONFIRM and Chinese investors. “There is a clear race to getting the first technology for oral insulin,” said Oramed CEO Nadav Kidron. “Other companies are working on different products. Our formulation enables the insulin to get directly to the liver. This is the natural way: from the pancreas to the liver.” In 2006, Kidron co-founded Oramed with his mother, Miriam Kidron, a former researcher at Hadassah-Hebrew University Medical Center in Jerusalem and the company’s chief scientific officer. She developed the technology in an effort to help her husband treat his diabetes. “My father suffered from diabetes, and it was my mother’s mission to find an alternative way to deliver insulin,” Kidron said. “When she told me that they had a breakthrough that could help millions of people around the world, that’s when I knew I had to make it a reality.” Oramed has only 15 full-time employees, but Kidron said he outsources most of the work. It has raised capital from several sources, including Regals Capital Management in New York. Oramed also has

Need to know

Flint-based AA Medical Research Center is one of 24 sites in 13 states where oral insulin capsule is being tested 

 Oral insulin could potentially replace daily injections that many patients don’t want to do  Nearly 1 million adults in Michigan have diabetes, with 2.7 million showing prediabetic symptoms

Arif

Banka

signed a licensing deal with HTIT, a Chinese pharmaceutical company, that also has invested $33 million in hopes of bringing oral insulin to China. Worldwide, diabetes also is a growing concern with studies showing some 425 million adults have diabetes globally. That number is expected to reach 629 million by 2045. Kidron said oral insulin also could be more effective than current treatments. For example, insulin is typically injected directly into the bloodstream, but only a fraction reaches the liver, often causing excess sugar to be stored in fat and muscle, which can result in weight gain. With Oramed’s proprietary “protein oral delivery” platform, the active insulin is protected in a special capsule as it travels through the stomach and into the intestine, and its absorption is increased by an enhancer supplement along the intestinal wall, Kidron said. “By preventing protein-drug breakdown in the gastrointestinal tract and promoting its crossing the small intestine, this breakthrough solution brings oral protein-drug delivery significantly closer to a reality,” Kidron said. “The result is better glucose control, reduced hyper and hypoglycemia, and potentially less weight gain — and treatment can begin earlier, improving outcomes.” In the past year of the study, 24 research sites have enrolled about 300 people in the placebo-controlled, randomized phase 2b study. More than 80 percent, 237, have completed the trial. Drugs that show they work in phase 2b studies then can go on to major studies in thousands of patients that can lead to drug approval. The goal is to show the effectiveness and safety of “ORMD-0801,” as the drug is currently named, in type 2 diabetes patients who have inadequate blood sugar control. If the drug can lower average blood sugar levels over three months, the test would succeed, Kidron said. Kidron said the multi-site study will be completed later this year. He said the data will be submitted to the FDA, which could approve the start of expanded testing of the drug. If all goes well, oral insulin could be on the market in two or three years. “It is going very well. The most important thing with the drug is that it works, and it is safe. How well it is

working, we will find out in the next three or four months when we unblind the study and find out,” Kidron said. While Arif doesn’t know which of his nine patients are being treated with oral insulin or the placebo, he said: “My gut feeling is it will work.” Ajaz Banka, M.D., an endocrinologist at the Beaumont Endocrine Center in Beverly Hills, said the clinical trial is an important step forward in diabetes management. “It could be a game changer. There is a need for something like this because we have 10 percent of the population in Michigan affected by diabetes,” he said. Banka said many patients diagnosed with diabetes don’t want to start insulin treatment right away. “They worry about it. It is about four shots per day. Cost is a huge issue. There is a benefit and insulin can prevent a lot of problems,” he said. But Banka said the big challenge is developing a pill that bypasses the stomach and gastrointestinal tract where it is broken down. “Insulin is a protein. We digest protein in the stomach. You need to bypass that before it is absorbed and broken down,” Banka said. “Then there is the question of how long it stays in the system. Is it short or long acting?”

Why Flint research facility? Oramed selected AAMRC because metro Detroit has a high percentage of people with diabetes and because the company has worked with the Flint center before and it has a good reputation, Kidron said. About 10.6 percent of the population of metro

“It could be a game changer. There is a need for something like this because we have 10 percent of the population in Michigan affected by diabetes.” Ajaz Banka

Detroit has diabetes, compared with 9.3 percent nationally. AAMRC is part of Arif’s internal medicine and pediatrics practice where he also sees patients. The 17-year-old research center has conducted more than 100 clinical trials on conditions including type 2 diabetes, chronic kidney disease, hypertension, heart failure, rheumatoid arthritis, osteoarthritis and asthma, mostly pharmacy company-sponsored research, with 14 trials ongoing, including the Oramed study. Arif said most of his research subjects come through his office, although he lists the trials on his website. The FDA doesn’t allow him to advertise for human subjects in research trials. So far, seven patients have already completed the 90-day tests. Two more patients are undergoing the tests. “Not everybody qualifies for the study. We had 15 or 16 volunteer. We are looking for patients who have poorly controlled diabetes and are not already on insulin,” Arif said. The nine people going through the testing in Flint must be 18 years or older, have type 2 diabetes, an HbA1C (blood sugar) count of more than 7.5 percent and a body mass index of less

than 40 (more than 40 is considered obese). People also must be taking metformin, which is a drug that helps lower blood sugar levels, allowing insulin to work better. About 25 percent of patients in the trial received a placebo. Nearly 900,000 people in Michigan have diabetes with an estimated 2.7 million more with prediabetes, said Michigan Department of Health and Human Services. In 2018, these conditions will cost Michigan an estimated $9.7 billion. An A1C above 6.5 percent is considered positive for diabetes. A normal blood sugar level is considered below 4.6 percent. Type 2 diabetes, sometimes called ‘adult-onset’ diabetes, is the most common form of the condition, accounting for up to 95 percent of all Americans diagnosed with this metabolic disorder. In type 1 diabetes, which is often hereditary and non-preventable, the immune system wrongly attacks and damages the cells of the pancreas that produce insulin, a hormone that is key to regulating blood sugar levels. In type 2 diabetes, the insulin the body produces doesn’t function as effectively as it should, hence it is also sometimes called “insulin resistance.” Diabetes is characterized by high blood sugar, or hyperglycemia. When the body does not produce enough insulin, a hormone that transports sugar from the blood into the cells for energy, blood sugar levels rise, causing the conditions for diabetes. Complications from the disease includes blindness, kidney failure, stroke and heart attack. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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Thanedar settles lawsuit over sale of Avomeen chemical testing firm By Chad Livengood clivengood@crain.com

Shri Thanedar, the serial entrepreneur who poured millions of dollars of his personal fortune into a failed bid for governor last year, has settled a lawsuit with the private equity firm he sold his Ann Arbor chemical testing company to in 2016. C h i c a go-based private-equity firm High Street Capital’s Avomeen Holdings LLC Thanedar sued Thanedar in November 2017, alleging the businessman misrepresented the business’ finances leading up to the November 2016 sale of a majority interest in Avomeen Analytical Services LLC. Thanedar netted $20 million from

Need to know

Businessman Shri Thanedar settles lawsuit over finances of Ann Arbor chemical testing firm J

J Private equity firm alleged fraud by Thanedar in the deal while he was running for governor J Thanedar recently moved to Detroit with intent of running for office again

the sale of a controlling interest in the chemical testing lab, which he founded in 2010 after losing another analytical chemistry and drug development company in the Great Recession. But the private equity firm alleged Thanedar engaged in “a scheme to defraud purchaser into entering the transaction at a significantly inflated purchase price” by inflating the company’s monthly revenue and earnings, according to the complaint. Thanedar and his related company, Chemreal LLC, settled the lawsuit

Aug. 2 in U.S. District Court, averting a trial that was scheduled to begin Tuesday, court records show. The terms of the settlement were not disclosed, but Judge Gershwin Drain retained authority to enforce the settlement through Jan. 31, 2020, in his order dismissing the lawsuit “with prejudice and without any costs or attorneys’ fees to any party.” Last year, Thanedar spent $10.3 million of his fortune in a third-place finish for the Democratic nomination for governor. He recently bought a home in Detroit’s Palmer Woods neighborhood and moved to the city and told Detroit Metro Times he is considering another run for public office. Thanedar did not return a message from Crain’s. Attorneys for Thanedar and Avomeen Holdings also did not return messages last week. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood

PlanetM awards $450,000 in grants to mobility-focused startups By Kurt Nagl knagl@crain.com

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A U.K.-based self-driving tech company and New York City-based carpool business are among the six startups receiving a portion of $450,000 in grants from Michigan’s mobility effort PlanetM. The grants, administered through PlanetM, are awarded to address mobility and transportation issues affecting the state. This is the agency’s third round of mobility grants. U.K.-based Propelmee, which won $100,000, is targeting Michigan for its first location outside of Britain, the release said. The company takes an “industry-first approach” to autonomous driving, and unlike many other companies in the space, it does not rely on 3-D high definition mapping. “We chose Michigan as the ideal spot to demonstrate our technology on public roads because of the fantastic support from local government and forward-looking initiatives to promote the development of advanced mobility technologies,” Zain Khawaja, CEO and founder of the startup, said in a press release. “We especially look forward to tackling the challenging winter driving conditions on Michigan highways, and working towards developing new partnerships with the local automotive industry.” The other $100,000 winner is Traverse City-based Aveopt Inc., which develops software for unmanned aerial systems. “We are pleased PlanetM is undertaking efforts to help facilitate integrating UAS as the aerial component within Michigan’s mobility initiative, further solidifying and elevating Michigan’s leadership in mobility,” Aveopt CEO Art Kahn said in the release. New York City-based GoKid won $90,000 and plans to bring its carpool service to Michigan schools. Its mobile app provides optimized

INTVO.COM

Ann Arbor-based Intvo, which develops software predicting pedestrian behavior, was among six startups that won a share of $450,000 from PlanetM’s third round of mobility grants.

Need to know

JJU.K., NYC companies to enter

Michigan market

JJCarpooling, pedestrian safety among focuses of startups JJThis is the third round of mobility grants for PlanetM

“We chose Michigan as the ideal spot to demonstrate our technology on public roads because of the fantastic support from local government and forward-looking initiatives to promote the development of advanced mobility technologies.” Zain Khawaja

routing, in-app texting, calendar syncing and automatic alerts. The startup will be working with TechTown Detroit to launch its Michigan pilot later this month. Other winners are: J Intvo, Ann Arbor ($50,000): Develops software that detects and predicts pedestrian behavior. The company intends to partner with the University of Michigan’s Transportation Research Institute to deploy their technology in Ann Arbor. J Aerotronic, Detroit ($50,000): Works with Detroit-based DTE Energy Co. to pilot remote sensing technology that uses machine learning. J AKTV8 LLC, Green Oak Township ($50,000): Provides electronic suspension solutions to improve ride comfort, safety and handling. PlanetM’s previous batch of grants included $100,000 for a drug delivery robot at Beaumont Hospital in Dearborn. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

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WHY LEADERSHIP ACADEMY?

“The Crain’s Leadership Academy was a wonderful experience that encouraged me to dig deeper into my leadership toolbox in order to become better. The coaching was phenomenal and the relationships that I was able to build with my fellow classmates were valuable and genuine. I would recommend CLA to any leader looking elevate their personal brand and connect with an incredibly talented group of peers in the Metro Detroit area.” – Kimberly Hoyle, Director of Business Development & Marketing, HamiltonAnderson SESSION DATES: Wednesday, Sept. 25 – 9 a.m. - 5 p.m. Wednesday, Oct. 2 – 9 a.m. - 5 p.m. Friday, Oct. 4 – 1 - 3 p.m. Friday, Oct. 11 – 9 a.m. - 5 p.m.

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CALENDAR

DEALS & DETAILS

TUESDAY, AUG. 13

UPCOMING EVENTS

How to Be a Great Boss (Leadership + Management = Accountability). 8-9:30 a.m. Troy Chamber of Commerce. Session will provide supervisors with an approach to dramatically improve employee accountability, performance and excitement in their work. Speaker: Tiffany Kruczek, Business Evolution Group LLC. Michigan Schools and Government Credit Union. $15 members, $25 nonmembers. Website: troychamber.com

Army Futures Command: Forging the Future of Warfighting with Business Partners Big and Small. 11:30 a.m.-1:30 p.m. Sept. 5. Detroit Economic Club. Gen. John Murray, commander of Army Futures Command, will discuss how the Army relies on partnerships with industry leaders based on modernization priorities regardless of business size. The Masonic. $45 members, $55 guests of members. Website: econclub.org

For the Health of America: A Vision for the Future of Health Care. 11:30 a.m.-1:30 p.m. Sept. 10. Detroit Economic Club. Blue Cross Blue Shield Association President and CEO Scott Serota shares insights on the challenges facing the health care system today — and the steps health insurers and their partners are taking to build a stronger health care system for the future. Ford Field. $45 members, $55 guests of members. Website: econclub.org

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LAW

Ignition Media Group

Plante Moran

Ogletree Deakins

Ignition Media Group is pleased to welcome two new additions to our team, Jehona Dreshaj and Leah Hill, who both bring unique skill sets. Dreshaj Jehona joined the agency to lead the efforts in Digital Media Marketing and Social Media Strategy for the agency and our clients. Prior to joining Hill Ignition, Jehona worked for Guess Inc. as a licensing and marketing coordinator. Jehona is also known as a social media lifestyle influencer. At Ignition Media Group, Leah Hill is currently leading our Event Management and Brand Positioning arms. Leah brings creative energy when handling events and assisting in brand development that is always appreciated by clients. Ignition Media Group is proud to have these two talented young women on our team.

Plante Moran Partner Michelle Watterworth has been named vice chair of the American Institute of CPAs’ State and Local Governments Expert Panel. In this role, Watterworth will address accounting and auditing issues at the national level, frequently working directly with the Governmental Accounting Standards Board. The panel protects the public interest by bringing together knowledgeable parties in the state and local government industry to deliberate and build consensus on key issues.

Heather G. Ptasznik recently joined Ogletree Deakins’ Detroit (Metro) office as senior counsel. Heather has been representing management in employment law matters for over twenty two years. As an experienced employment lawyer, she counsels clients and defends them in court on various matters including hiring, terminations, reductions in force, leaves of absence, FMLA, workplace investigations, disability accommodation and wage and hour issues. She earned her J.D. from Widener University School of Law and her A.B., with honors, from the University of Michigan.

Accenture Accenture is proud to announce Horace Tiggs, IV as the Detroit Innovation Hub Director. Horace will work to bring innovation to Accenture’s people and clients through overseeing and integrating dynamic teams. As a Managing Director in Accenture’s Digital Delivery business, Horace brings over 20 years of experience leading complex initiatives and accounts. He also serves on the boards of Exeqpath LLC, University of Michigan Center for Diversity and Outreach Advisory Board and Via Vitae Travels.

District Capital, LLC Brieden Consulting Group is pleased to welcome Kristyn Ivison as an Account Manager. Kristyn will be responsible for managing our clients’ strategic paths including positively impacting and improving their culture. Kristyn brings an abundance of experience in employee benefits. Brieden Consulting Group is a Michigan based employee benefits management and consulting firm, specializing in self-funded employer plans, enhancing each client’s culture by engaging leadership and enabling technologies.

Neil Gorosh has joined District Capital as an Originator and General Counsel. Neil has over 30 years of experience in the mortgage banking field. Neil also has a law degree from Wayne State University Law School. District Capital is excited to add him as part of the team.

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MERGERS & ACQUISITIONS J Meritor Inc., Troy, supplier of drivetrain, mobility, braking and aftermarket products for commercial vehicle and industrial markets, completed the acquisition of AxleTech, Troy, manufacturer and supplier of drivetrain systems and components for heavy-duty vehicles, from investment firm The Carlyle Group for $175 million. Website: meritor.com J ATA National Title Group LLC, Farmington Hills, a title insurance agency, has merged with InTitle Agency Inc., Cincinnati, Ohio, a title company, to expand its coverage in Ohio and Kentucky. Operating under the ATA umbrella, the new entity will remain as InTitle Agency. Website: atatitle.com

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SPOTLIGHT

J Condominium Management Associates LLC, Farmington Hills, a property management firm, has been named the property management firm for Wabeek Pines Condominium Association, Bloomfield Hills; Main North Lofts Condominium Association, Royal Oak; Pine Knolls Condominium Association, Farmington Hills; 750 Forest, Birmingham; and Estates on Pine Lake Condominium Association, Bloomfield Hills. Website: condomanage.net J Marx Layne & Company, Farmington Hills, a public relations agency, was selected as the agency of record for the Royal Oak Downtown Development Authority, Luca Mariano Bourbon and Whiskey; and the Ann Arbor Art Fair. Website: marxlayne. com J Bianchi Public Relations Inc., Troy, a public relations firm, has been named by MTU America Inc., Novi, the North American regional headquarters of Rolls-Royce Power Systems, as its public relations agency of record for the Americas. Websites: bianchipr.com, mtu-online. com JJNear Perfect Media, Bloomfield Hills, a public relations firm, has been named the agency of record for C3 Industries, Ann Arbor; International Hardcoat, Detroit, and Josef Newgarden, Nashville, Tenn. Websites: nearperfectmedia.com, c3industries.com, ihccorp.com, josefnewgarden.com

EXPANSIONS JJInternational Automotive Components, with North American headquarters in Southfield, supplier of automotive components and systems, is expanding its manufacturing facility in Elmdon, U.K. The facility will be solely used to service IAC Group’s longtime customer Jaguar Land Rover. Website: iacgroup.com

NEW SERVICES JJClark Hill PLC, Detroit, a law firm, launched ASSET360, a cyber and defense practice that combines the firm’s cybersecurity and data privacy, information governance, reputation and crisis management and white collar crime and government investigations teams to address a company’s cyber and defense issues worldwide. Website: clarkhill.com

Corona

Quigley

Kelly Services CEO to step down

Longtime Kelly Services Inc. executive George Corona plans to step down as president and CEO early next year, the Troy-based staffing company announced. He will be succeeded by Executive Vice President Peter Quigley, who will take over for Corona on Oct. 1. Corona, who took the helm of Kelly Services (NASDAQ: KELYA) in May 2017, will serve in a non-executive advisory role until his retirement and remain a member of the company’s board of directors, the company said in a news release. He served as Kelly’s executive vice president and chief operating officer for eight years, and has more that two decades of experience in several different roles at the company. Before joining Kelly Services in 1994, Corona served in management posts at Digital Equipment Professional Services Group and Plymouth Township-based Burroughs Corp., according to the release. Quigley, who will also join the company’s board of directors in October, represents Kelly on the board for leading Japanese staffing supplier Persol Holdings, in which Kelly has an investment, Crain’s reported. He is also a board member of PersolKelly, Kelly’s joint venture with Persol, headquartered in Hong Kong and previously known as TS Kelly Workforce Solutions.

The Detroit News promotes Root to managing editor

The Detroit News selected Kelley Root as its new managing editor to replace Gary Miles, who left the post to take over the top executive role held by the late Jonathan Wolman. The newspaper announced Root’s appointment, effective Aug. 5, in Root an article on its website. Root, who grew up in Oak Park, will manage newsroom operations. She comes from a role as assistant managing editor, according to The News, and has been with the paper for 15 years. Root, 51, still reports to Miles, who became editor and publisher after Wolman died in April at age 68. Wolman worked 12 years in the top role. At The News, Root also spent time as metro editor and oversaw the Macomb County bureau, the Monday article said. She managed the award-winning team that covered Detroit’s municipal bankruptcy in 2013 and 2014, according to the Society of Professional Journalists’ Detroit chapter, for whom she is a board member.

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SONG FROM PAGE 3

The Ann Arbor Entrepreneurs Fund, first reported by the Ann Arbor Observer, is modeled after similar funds in Silicon Valley and Austin, Texas. It appears to be the first August of its 12, kind2019 in Michigan working with community or other foundations, said Kyle Caldwell, CEO of the Council of Michigan Foundations. It will be run by the Ann Arbor Area Community Foundation, with input from a steering committee comprised of Song; Paul Brown and Doug Neal, managing partners in eLab Ventures; Jeff Rinvelt, principal at Renaissance Venture Fund; and InfoReady CEO Bhushan Kulkarni, a former Community Foundation board chair. â&#x20AC;&#x153;We take quality of life and place-making in our region for granted. â&#x20AC;Ś As an entrepreneur and business owner of multiple companies in our region, I want to show by example that we can make much needed resources available in our community and pay back to the community that has given us so much,â&#x20AC;? Kulkarni said. It also benefits the companies, he said, through talent attraction and retention, as the fund supports engagement and quality of life. The fundâ&#x20AC;&#x2122;s first success metric will be the number of tech entrepreneurs who sign on, said Neel Hajra, Community Foundation president. So far, five founders have signed up, four pledging annual profits and one equity. Two others have indicated they will join soon, one with equity and one with profits, Hajra said. The foundation does not share specifically what each member contributes. Song sees his role as the recruiter and connector to bring in more tech executives and venture capitalists to the Entrepreneurs Fund. â&#x20AC;&#x153;What we need is scale,â&#x20AC;? he said. (Song regrets he did not put in equity from Duo because its sale to Cisco Systems Inc. last October came up so quickly, he said.) â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re working to rally the entrepreneurs, tech entrepreneurs. ... Itâ&#x20AC;&#x2122;s early daysâ&#x20AC;? on entrepreneurs signing up, he said. The first recruiting meetup was held in June; the next one is set for Sept. 25 at a bar in downtown Ann Arbor. Though there are a number of other tech meetups in the region, Song sees value in bringing together founders to discuss issues in small groups. â&#x20AC;&#x153;Previously successful, currently successful and aspiring entrepreneurs all rub elbows. This leads to better outcomes for the companies â&#x20AC;&#x201D; and for the community,â&#x20AC;? he said in an interview. Because it is new, many details such as the issues addressed and what kinds of volunteer projects will be supported are still being considered. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s still experimental,â&#x20AC;? said Song, and will evolve as more tech entrepreneurs join. Yet he identified some issues that he believes the Ann Arbor area needs to address: growing wealth disparities, high housing costs and disparities in life expectancies. â&#x20AC;&#x153;The Entrepreneurs Fund is attempting to address inequity in Washtenaw County. Which means we will live and work in a more just and equitable place, which forwards our companyâ&#x20AC;&#x2122;s goal of improving life for everyone,â&#x20AC;? said Matthew Johnson-Roberson of

â&#x20AC;&#x153;We take quality of life and placemaking in our region for granted. â&#x20AC;Ś As an entrepreneur and business owner of multiple companies in our region, I want to show by example that we can make much needed resources available in our community and pay back to the community that has given us so much.â&#x20AC;? InfoReady CEO Bhushan Kulkarni

Refraction AI, which builds small delivery robots that may operate in either bike lanes or roadways. He has joined the Entrepreneurs Fund. â&#x20AC;&#x153;To make this a place that people want to live, work, play and raise families, it should be one where all members of the community get to benefit and share in the success of companies use that community as a launching point.â&#x20AC;? Caldwell of the Council of Michigan Foundations noted that new philanthropists are creating innovative ways of giving that are not connected to traditional foundations or institutions. â&#x20AC;&#x153;Just look at the way new forms of philanthropy are popping up in new, thriving economies,â&#x20AC;? he said. Song is the co-founder of Duo Security, which prevents cybersecurity breaches through two-factor authentication. Its clients have included Facebook, Etsy and Zillow. It was acquired for $2.35 billion in cash in October 2018 and became part of Ciscoâ&#x20AC;&#x2122;s Networking and Security business. Now under Cisco, he serves as Duoâ&#x20AC;&#x2122;s general manager, based in Ann Arbor, where Duo employs close to 400 people. Song previously worked with the Ann Arbor Area Community Foundation to build a skate park in Ann Arbor; he loves to skateboard. His wife, Linh Song, a social worker, serves on the Community Foundationâ&#x20AC;&#x2122;s board of trustees. He first considered creating an Entrepreneurs Foundation around 2011, and even created a Slideshare presentation. But his wife was expecting their second child and he was establishing Duo so he did not pursue it then. Hajra noted that there are many more tech startups now, so a launch will be easier this time. â&#x20AC;&#x153;The rolloutâ&#x20AC;&#x2122;s really going to take a couple years. â&#x20AC;Ś This is really intended to be designed by tech founders and entrepreneurs. Weâ&#x20AC;&#x2122;re (going to) take the organic approach. Build it, entrepreneur by entrepreneur,â&#x20AC;? Hajra said. Success for the Ann Arbor Entrepreneurs Fund could have many colors. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s community impact, moving the community forward,â&#x20AC;? said Hajra, seeing a steady stream of grants made to nonprofits in Washtenaw County and one or two program officers on his team supervising the fund and its grants. Song has a different view. â&#x20AC;&#x153;Can we be that gold standard for what truly thoughtful founders do here? â&#x20AC;Ś For me, the hallmark will be that itâ&#x20AC;&#x2122;s something that every entrepreneur wants to join,â&#x20AC;? he said.

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BIG BOY FROM PAGE 3

An additional 274 operate in Japan independently. Big Boy also signed a seven-country deal with Singapore-based Destination Eats to build a minimum of 70 restaurants, though it’s aiming for 1,000.

Roots to sale Big Boy may be looking to modernize, but it traces its origins to the Great Depression. Founder Bob Wian bought a 10-seat diner in Glendale, Calif., in 1936 and grew it into Big Boy, with help from an eventual first franchisee, the Elias family of the Detroit area. Big Boy peaked at 950 units in the 1980s. In 2000, radio station entrepreneur Robert Liggett bought the 455-restaurant chain out of bankruptcy. Crawford joined Big Boy in 2009 and became CEO in January 2018. He and investors he declined to name bought Big Boy for an undisclosed amount that year on Oct. 24. “On Oct. 23, we were $34 million in debt. By Feb. 4, we were debt-free,” Crawford said. “We paid off debt through a series of sale-leasebacks for (around 10) properties that we owned.” Big Boy also sold off 16 company-owned stores to franchisees, which also alleviated rent burden for those locations. The company and its franchises employ 3,000. It saw $110 million in systemwide sales in 2018, down from around $113 million the year before. Crawford attributes the fall to closing underperforming restaurants in Grayling, Shelby Township and Westland. He attributed the longer-term shrinkage of the chain to a strategy that shuttered franchise locations whose owners wouldn’t finance remodeling efforts. He said he’s allowing franchi-

OAKLAND FROM PAGE 1

Other longtime lieutenants include J. David VanderVeen, director of Central Services who also oversees Oakland County International Airport; Laurie Van Pelt, formerly the management and budget director who was elevated to deputy county executive last week; and Art Holdsworth, director of Facilities Management. David Dulio, director for the Center for Civic Engagement at Oakland University and a political science professor there, called Patterson’s team first-rate. But he also anticipates it to be dismantled in a new administration, tailored to the new executive’s liking. “There is no question that Brooks Patterson assembled a fabulous team of public servants. Their record in the county, especially on the economic side, can’t be questioned. It’s been a wonderfully run county government,” Dulio said. “But I don’t think a new county exec is going to want a host of people who are used to doing it ‘Brooks’ way.’ They are going to have to make it their own culture and environment, so I think there is going to be change.” Bill Mullan, media and communications officer for Patterson, said county administrators and departments received more than 400 local and national awards for things ranging from technology to budgeting to campus beautification, among others, during Patterson’s tenure as county executive. “Oakland County will do our best to ensure a seamless transition,” Mullan said.

ANNALISE FRANK/CRAIN’S DETROIT BUSINESS

A fast-casual, 3,000-square-foot Big Boy is set to open within weeks at 26400 Telegraph Road in Southfield.

sees without the ability to finance such overhauls all at once to do partial renovations over several years. Big Boy faces a hotly competitive restaurant market where its sit-down family-restaurant roots have become passe. “I think a comeback is a long shot,” said Erik Gordon, a University of Michigan Ross School of Business professor who focuses on strategy and entrepreneurship. “Big Boy, in its heyday, faced lots less competition. What’s exciting about Big Boy that would draw people away from all the other choices they have? ... I think Big Boy will have to get lucky. Or extremely creative.” Gordon said he doesn’t see past store closings as hurting Big Boy with

its consumers, though it could prove troublesome in convincing franchisees it’s a good investment. Tony Michaels, the former Big Boy CEO who is credited with leading the charge to save the company from bankruptcy in 2000, said the company must “make sure they’re answering the age-old question about relevance.” “Do I think it’s doable? Oh, absolutely,” said Michaels, who is now president and CEO of The Parade Co. “The job they have ahead of them is to really look at the product line and understand the people situation, and they’re also going to have to take a look at their facilities. ... The restaurant business is heavy lifting right now.”

Naming a successor The county board is in the throes of budget meetings and immediately upending the administration could throw a wrench in the process. Taub said the targeted approval deadline is Sept. 18 for the upcoming fiscal year, which begins Oct. 1. Some said they anticipate some deputies involved in that process to remain on in the short term but gradually depart. Now the Oakland County Board of Commissioners, controlled by Democrats for the first time in decades, must name a successor if it wants to avoid a special election that could result in another Republican winning the right to serve the remainder of Patterson’s unfinished seventh term. On Wednesday, Democrat David Woodward, formerly the county board chair, resigned from the county board to clear a hurdle to becoming the appointed county executive. Incumbency would likely give him a leg up during a 2020 campaign. However, Woodward’s departure from the board results in a 10-10 partisan divide. A tie vote on a candidate fails, and members will likely move on to another candidate if they deadlock on the vote for one candidate, unless a member requests to change their vote before the roll call is closed, said Chris Ward, chief of staff for the Board of Commissioners. Applications for the executive job, which pays $197,248 per year, are being accepted through noon Tuesday, Aug. 13. A bipartisan committee will review the applications. The names of appointees to the review committee were not

Bertolini

Daddow

yet available Friday, but Ward said the makeup is likely to be 4-2 Democrat/ Republican. As of Friday morning, four people had applied for the post, Ward said. Their applications are posted on the county’s website. Currently the board is scheduled to meet at 9:30 a.m. Friday, Aug. 16; the board was scheduled to meet on Thursday, Aug. 15, but that drew criticism from Poisson and Patterson’s daughter, Mary Margaret Patterson Warner, because Patterson’s funeral is at 1:30 p.m. that day. If the county board can’t make an appointment, Poisson will serve as county executive until a special election is held to fill out the remainder of Patterson’s term. There would be a primary election concurrent with the March 10, 2020, presidential primary and a May 5, 2020, general election, Ward said. Oakland County Treasurer Andy Meisner — a Democrat who plans to seek the executive position next year — last week was critical of how the process had gone so far, although he told the Oakland Press on Thursday that he would not submit one to be considered

Fast and furious At the fast-casual, 3,000-squarefoot Big Boy set to open within weeks at 26400 Telegraph Road in Southfield, customers order at a counter and sit down with numbers, waiting to be served. There’s no tip line on checks. It seats 75 and employs around 24. Crawford aims to get the model’s cost down from $800,000 to $500,000, creating an appealing three-to-one sales-to-cost ratio for franchisees ($1.5 million in annual sales). A free-standing, around 5,400-squarefoot Big Boy costs $1.7 million to build. Customers are asking for fast-casual in California, Florida and abroad, to serve Patterson’s unfinished term. Even if another Republican ends up in the role, Dulio believes there will be a shakeup. “I think it’s probably likely to be similar to other transitions, whether between presidential administrations, gubernatorial administrations. The next county executive, even one that is interim, may want their own people,” Dulio said. Frank Houston, the former chairman of the Oakland County Democratic Party, said last week that he doesn’t “expect any sort of mass staff exodus” when Patterson’s replacement is determined. “Oakland County’s government is full of smart, dedicated, hardworking people, and I believe everyone — from elected officials to Brooks’ deputies, to every other county employee — understands the importance of keeping the county moving forward in a way that all of our residents in Oakland County can benefit from and be proud of.”

Change on the horizon? Patterson was first elected county executive in 1992 after serving four terms as Oakland County prosecutor. His tenure as Oakland County executive was marked with myriad successes, but also controversy. The county’s AAA bond rating has been reaffirmed time and time again under his leadership, and the county has a lauded three-year rolling budget. He instituted the Automation Alley high-tech cluster and the Emerging Sectors program for knowledge-based jobs. Medical Main Street and Main Street Oakland also

Crawford said. More could crop up in Michigan, but in general local Big Boy fans value their sit-down breakfasts and buffets. The Southfield location is in a threetenant building Big Boy constructed for around $1.2 million, with Starbucks as a tenant and another yet to be signed. Crawford said the model is less cost-prohibitive than a standalone restaurant and Big Boy plans to replicate it. The Big Boy building planned on Woodward Avenue in Royal Oak on the old Pasquale’s Restaurant site will be somewhat similar. Opening new locations helps Big Boy convince potential customers the brand is sticking around, but image is key, too. One piece is better telling its “food story,” Crawford said. Big Boy has used non-frozen, local ingredients for decades, but only now is it making that part of the image, including by plastering phrases on walls and place mats such as “house-made ice cream” and “fresh eggs sourced from a single-family farm.” The company a year ago hired Chris Cason, a former executive chef at Chapman House in Rochester and sous chef at Roast in downtown Detroit. They have built a tighter menu with the well-loved burgers, as well as vegetarian Impossible meat, more salads, ingredient changes such as eliminating MSG (a sometimes-controversial flavor enhancer), house-made chips and other additions. For an iconic brand like Big Boy, there could also be danger in steering toward newness. “We have to be very careful about how we treat our existing guests that come through the doors, saying, hey, I’m going to try to reach the millennials, and then I’m going to upset my (older) base,” he said. Annalise Frank: (313) 446-0416 Twitter: @annalise_frank came into being under his watch. He was honored by Governing magazine in 2013. The University of Detroit graduate and U.S. Army veteran was generally viewed as a business community champion. While his leadership of Oakland County itself has drawn wide praise, his comments about Detroit and other issues have drawn criticism. His career had been marked by bitter feuds with Detroit and neighboring counties over issues ranging from transit to the Detroit Water and Sewerage Department. Some viewed him as an obstacle to regional cooperation. Democrats have been making inroads politically in the county that for decades was a GOP stronghold, with Meisner; Jessica Cooper, prosecutor; Lisa Brown, clerk/register of deeds; and Jim Nash, water resources commissioner, controlling four of the six countywide elected positions. Sheriff Michael Bouchard is a Republican. Still, Republicans hope Patterson’s legacy — and at least some of his lieutenants — endure. “I would hope that common sense comes into play and they take a look at the jobs these people have been doing over the years. It’s indisputable that Oakland County has been doing a terrific job, without argument the best-run county in the U.S.,” said Mike Kowall, a former Republican state lawmaker who now works in economic development for the county. “I know all the parties involved and they are common sense players.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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AUTO FROM PAGE 1

Pain is no doubt on the horizon for automotive suppliers and workers, but who suffers will likely be the result of business strategy. Globally, automotive suppliers created $510 billion in shareholder value since the last Great Recession, more than doubling the market value before the recession. But that growth was not equitable, according to research in Deloitte’s 2019 Global Automotive Supplier Study released last week. The top third of auto suppliers accounted for more than 99 percent of that growth, said Neal Ganguli, managing director and leader of the automotive supply base group for Deloitte. “Past success is no longer a guarantee of future earnings,” he said. “The industry itself is going to grow, but the supply base is going to change and just because the cost of parts per vehicle is going to go up, it does not mean a rising tide is going to lift all boats.” But the previous decade’s successes are being evaporated this year. Every Southeast Michigan supplier has reported troubling earnings for the first half of this year. For example, Plymouth-based Adient plc reported a loss of $321 million in the second quarter, Detroit-based American Axle & Manufacturing Holdings Inc. reported a net income drop of more than 65 percent and Auburn Hillsbased BorgWarner Inc. reported a net income drop of 37 percent. Even

GOOD JOBS FROM PAGE 1

“Something like that would be precisely what this bill is designed to help,” state Sen. Ken Horn, R-Frankenmuth, said about the Mahindra project. In the Flint area, a company seeking a Good Jobs tax incentive award from the Michigan Strategic Fund would have to pay employees a workforce average wage of at least $20.50 per hour, or $42,654 a year. Horn said he intends to introduce legislation later this month that would eliminate the Dec. 31 sunset on the Good Jobs incentives and allow for up to $500 million in additional income tax captures by companies that create new jobs that pay at or above the regional average wage. “We think the two-and-a-half-year sunset demonstrated this was a successful program. It didn’t bust the budget,” said Horn, chairman of the Senate Economic and Small Business Development. “We want to make sure the cap is reasonable, too. Whether $500, $400 or $300 million is the new cap is unclear. But we’ll talk about it.” In July 2017, the Republican-controlled Legislature approved the Good Jobs for Michigan tax incentive as then-Gov. Rick Snyder was trying to entice Taiwanese electronics manufacturer Foxconn to build a $10 billion liquid crystal display manufacturing plant in the state, promising at least 3,000 jobs. Foxconn chose Wisconsin instead, spurning Snyder’s offer of a $3.7 billion package that included all $200 million of the Good Jobs incentives. Later that year, the MEDC offered all $200 million of the tax incentives to Amazon.com in failed bids to get the online retail and tech giant to plant a 50,000-employee second North American headquarters in Detroit or Grand Rapids. After that failed, officials at the MEDC

the hot Aptiv plc, which develops self-driving software, reported lower income, down 5 percent from the same quarter last year. And there doesn’t appear to be any relief on the horizon. “... we exited the second quarter with softer sales than anticipated and we expect this to continue to impact us in the second half of 2019,” American Axle Chairman and CEO David C. Dauch said in a press release earlier this month. The troubling market forces are likely to drive consolidation in the industry, Ganguli said, where suppliers are either on the hunt for stronger segments to add to their portfolio or will become part of someone else’s. “If you’re in a commoditized sector, you’re asking how you consolidate,” Ganguli said. “How are you going to be the last one, two or three companies standing? Someone has to make axles, for example. Will it be you? The solution is to build scale, consolidate and be the cost leader or be ready to be consolidated.” Global supplier merger and acquisition activity is near record highs, according to PwC’s 2019 Auto Supplier Consolidation study released last week at the Center for Automotive Research’s Management Briefing Seminars in Traverse City. Global auto supplier deal values are expected to reach $44 billion in 2019, well above the average of $20 billion. Most of the deals between July 2018July 2019 were in the powertrain segment, followed by electronics systems,

Ganguli

according to the study. For instance, Lake Forest, Ill.-based Tenneco Inc. closed on a $5.4 billion deal to acquire Southfield-based Federal-Mogul. The merger will result in two separate publicly trad-

ed companies. The consolidation is driven by long-term outlooks of where market growth is going to occur. According to the Deloitte study, segments such as transmission and axles are expected to decline 6 percent and 10 percent, respectively, by 2025. Meanwhile, electric vehicle and autonomous vehicle sectors like electric drivetrain is expected to grow 306 percent, battery and fuel cell sectors by 266 percent and advanced driver-assistance systems and sensors by 190 percent. Investments in these sectors is likely to ramp up in the wake of declining car sales, as suppliers position themselves for sustainability in a down market, Ganguli said. But Dietmas Ostermann, U.S. automotive advisory leader for PwC, said this may prove fatal for many suppliers as they are preparing for a future that is anything but certain. “We’re asking whether (automakers and suppliers) are investing too much into electric vehicle and autonomous vehicle technologies,” Os-

Good Jobs for Michigan incentives The Good Jobs for Michigan program allows for $200 million in incentives to be awarded through the capture of half or all of the 4.25 percent state personal income tax generated by a new employee. To date, $162 million has been used up on the following projects since July 2017:

Aptiv PLC

Project: Transformation of part of its Troy headquarters building into advanced safety engineering center. Tax capture incentive: $30.7 million Terms of tax capture: 100 percent withholding for up to 10 years Investment by company: Up to $30 million Jobs: 500

KLA-Tencor Corp.

Project: R&D facility in Washtenaw County for the Milpitas, Calif.-based chipmaker Tax capture incentive: $16.2 million Terms of tax capture: 100 percent withholding for up to 8 years Investment: $71.1 million Jobs: 500 Source: Michigan Economic Development Corp.

started using the new tax incentive to ink economic development deals with smaller-scale — though not insignificant — business-expansion projects. The first four companies awarded Good Jobs for Michigan incentives included pharmaceutical giant Pfizer Inc. ($10.5 million for 450 jobs); chip-testing equipment manufacturer KLA Corp. ($16.1 million for 500 jobs); autonomous-vehicle technology supplier Aptiv PLC ($30.6 million for 500 jobs); and Fiat Chrysler Automobiles, which will be able to claim up to $105 million in taxes generated by the 6,350 new employees it is hiring at assembly plants in Detroit and Warren. Horn equates a project like Mahindra’s to Fiat Chrysler Automobiles’ $1.6 billion conversion of its two engine plants on Mack Avenue in Detroit

Pfizer Inc.

Project: Expansion of Portage drug manufacturing plant for New York-based drugmaker Tax capture incentive: $10.5 million Terms of tax capture: 100 percent withholding for up to 10 years Investment: $465 million Jobs: 450

FCA US

Project: Transformation of plants in Warren and Detroit Tax capture incentive: $105 million Terms of tax capture: 100 percent withholding for up to 10 years on 3,000 jobs at Mack Avenue and Jefferson North assembly plants; 50 percent withholding for up to 5 years on 1,400 jobs at the Warren Truck Plant Investment: $4 billion Jobs: 6,350

into a new Jeep SUV assembly plant. “I want tons more opportunities like the Jeep plant,” Horn told Crain’s. But critics of the new program argue there’s little difference between the Good Jobs for Michigan program and the budget-busting Michigan Economic Growth Authority (MEGA) tax credits that will continue to drain $600 million annually from the state’s coffers through 2029. Though there are significant differences in the two programs, the value of both tax incentives is directly tied to the state personal income tax generated by the employee. “It looks and functions a lot like MEGA, even though one was a refundable credit against the (Michigan Business Tax) and the other one is not,” said James Hohman, director

termann said. “We’ve projected these investments have reduced (earnings before interest, tax, deprecation and amortization) by 2 percent. The economic viability of these investments is still 20 to 30 years out in our opinion. The only viable market is the robotaxi. Right now there’s no private use case that pays off. This means there will be more significant cost reductions moving forward to justify these investments.” Ostermann believes these investments and the negative attitude toward car sales may force a downturn where otherwise one wouldn’t exist. “The industry seems to be on the verge of talking itself into a crisis,” Ostermann said. “These investments have already caused (automakers) to initiate cost-reduction programs, putting enormous pressure on the supply base, despite sustained robust GDP growth in America. I don’t believe we’ve ever seen vehicle sales decline with 3 percent GDP growth. It’s not justified with the economics right now.” The strong technology push and rapid industry transformation has opened doors for smaller, atypical entrants into the market as the industry is increasingly reliant on outside knowhow, such as Bloomfield Hillsbased Karamba Security Inc. and Troy-based Facton Inc. Karamba provides end-point security for connected and autonomous vehicles to prevent cyber attacks that could enable or, worse, crash a vehicle. Current luxury vehicles have more than 100 million lines of code

with autonomous vehicles expected to reach more than 300 million lines. Karamba employs 40, only four in Michigan, but has already secured contracts with 17 automakers and large suppliers. Misguided or not, the industry’s quest to transform driving technology opened doors for the software firm and will likely make the firm recession proof even as car sales are slowing, said Ami Dotan, co-founder and CEO. “Everybody realizes this industry is a slow-moving sector,” Dotan said at the MBS conference last week in Traverse City. “But the ones that saw the vision were the automotive customers. It takes a long time, but once embedded these are long-term contracts. They don’t get into the validation process every year. That provides us stability.” Facton, with most of its operations in Germany and four employees at its Troy office, provides costing software, allowing the industry to model out costs in the supply chain, purchasing and product development. The impending downturn may boost Facton’s local operations, said CEO Alexander Swoboda. “In the long run, this economic pressure is good for us,” Swoboda said. “I just spoke with a vice president of sales at a supplier, and he said his major customer is asking for a 7 percent cost reduction. That makes our pitch easier, even if cutting a check is a little more difficult.”

of fiscal policy for the Mackinac Center for Public Policy, a Midland-based free-market think tank. “All of these discretionary business subsidy programs are fundamentally the same.” The distinction, Horn said, is employers awarded the Good Jobs incentives only get to keep their employees’ state income taxes if the new job is created. During the Great Recession, the MEGA program was changed from a job-creation incentive to a job-retention subsidy to keep FCA, General Motors Co. and Ford Motor Co. anchored in Michigan. “We don’t give any money away,” Horn said. Of the four projects approved for Good Jobs for Michigan tax captures, it could be five years until all of the new jobs are created. Under the 2017 law, the companies can’t capture the tax incentive until the new employee starts working and paying the 4.25 percent income tax. Aptiv is in the midst of renovating 186,000 square feet of its 473,427-square-foot Troy headquarters for 500 new engineers, support staff and electronic labs technicians who are being relocated to Michigan. In October 2018, the Michigan Strategic Fund awarded a Good Jobs incentive to high-tech semiconductor equipment manufacturer KLA Corp. to subsidize a 230,000-squarefoot second headquarters and research center that’s expected to be complete in the summer of 2021. KLA now plans to create 600 new jobs over six years instead of the original 500-job projection, said John McLaughlin, senior director and Ann Arbor site leader KLA Corp. The company has already started hiring software and hardware engineers and other jobs in corporate functions that will count toward the Good Jobs for Michigan incentives, McLaughlin said. The exact number of new jobs created to date is not being made public, he said. “We are on track for our recruiting

goal in 2019,” McLaughlin said. Pfizer’s Good Jobs tax incentive is tied to opening a 400,000-square-foot sterile drug manufacturing facility in the Kalamazoo suburb of Portage that isn’t expected to be in operation until 2024. The drugmaker is pledging to add 450 jobs at its 71-year-old global manufacturing complex in Portage, which employs 2,200. Late this year and in early 2020, FCA is expected to begin filling the 4,950 jobs it is creating at its Mack Avenue and Jefferson North assembly plants in Detroit. FCA is expediting conversion of its Mack Avenue facility to begin production of Jeep vehicles in the fourth quarter of 2020. Hohman said lawmakers should put a pause on authorizing any new tax-capture incentives until the initial 7,800 promised jobs come to fruition. “We ought to wait and see what happens before you declare this thing a success,” Hohman said. Senate Minority Leader Jim Ananich is a Democrat from Flint whose community suffered population loss and increased unemployment after GM closed the Buick City plant in 1999. Southfield-based Lear Corp. opened a new seating plant on 33 acres of the Buick City site last year, the first redevelopment project on the site that has come to fruition. Mahindra has signed a letter of intent with RACER Trust to redevelop the 364 remaining acres. Ananich said he has no position yet on “Good Jobs 2” and allowing the tax incentive to continue. “The longer I’ve been in the Legislature, the less I like tax incentives,” said Ananich, whose been in the Legislature for eight years. But the unlike the MEGA program, Ananich said, “at least in Good Jobs you know exactly how much it’s going to cost you and how many jobs you’re getting.”

Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

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

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

Two remaining Boys & Girls Clubs affiliates look to different plans to increase impact By Sherri Welch swelch@crain.com

The two remaining Boys & Girls Clubs of America affiliates in the region are both moving forward with new projects designed to increase their impact. Like Metro Detroit Youth Clubs, both are planning and forging new collaborations to bring new programs to their members. The Boys & Girls Clubs of Southeastern Michigan is launching a new model with co-working space, community amenities and adult memberships this weekend. At the same time, Boys & Girls Club of Troy is in the quiet phase of a $4 million capital campaign to fund construction of a dedicated teen center. The Southeastern Michigan affiliate will open newly renovated spaces in its Dick & Sandy Dauch Campus NFL/YET on Detroit’s west side this weekend during its second annual “Detroit’s on Now” block party and carnival, hosted with support from the Sean Anderson Foundation. The spaces completed during the first phase of $500,000 in renovations at the club include a Ponyride co-working space, the Sean Anderson Foundation Content & Production Studio, the “Innovation Lab” or gaming and makers space, community meeting rooms and a self care center.

Need to know

JJBoys & Girls Clubs of Southeastern

Michigan will unveil newly renovated spaces, model at Detroit club

JJBoys & Girls Club of Troy has launched campaign to build $4M center to support teens JJBoth approaches include collaboration with others to expand programs

The nonprofit’s new model “has helped to reinvigorate interest in either continuing, expanding or bringing back funding.” Shawn Wilson

Boys & Girls Clubs is forging collaborations with Code313, Detroit Area Pre-College Engineering Program and others to bring new programs to the new spaces, President and CEO Shawn Wilson said. Boys & Girls Clubs of Southeastern Michigan in April launched a new pilot membership model where adults and entrepreneurs, with a $40 annual membership, can gain access to the new spaces and amenities at the club when they aren’t in use for youth programs.

CLUBS FROM PAGE 3

Metro Detroit Youth Clubs is operating on a $1.6 million annual budget with seven full-time and 38 part-time employees at four sites in Royal Oak, Ferndale, Southfield and Washington Township. In September, the nonprofit will open a fifth club — its first in Wayne County — at Durfee Innovation Society, a multi-tenant supportive services and job training center housed in a repurposed school building in central Detroit. Boys & Girls Clubs of Southeastern Michigan, which plans to launch a pilot adult and entrepreneur membership program this week at a Detroit club, historically has operated sites in Wayne, Oakland and Macomb counties. Last year, it shuttered sites in Shelby Township and Ypsilanti and closed a Detroit location over safety issues. According to its website, it has eight remaining locations, half located in local schools. Four of the clubs are in Detroit, and three others are in outer Wayne County in Belleville, Highland Park and Romulus. It has one remaining club in Oakland County, in Auburn Hills. There were no geographical territories assigned by Atlanta-based Boys & Girls Clubs of America, so the nonprofit could have gone into Wayne County sooner, Tillander said. But it hadn’t yet been asked. “In every location, we were invited ... when Life Remodeled approached us, we were ready to accept that,” he said. Opening in the Durfee center presented “an excellent opportunity to align with them, the neighborhood

Nabers

McIntosh

“In every location, we were invited ... when Life Remodeled approached us, we were ready to accept that.” Brett Tillander

and the other Durfee tenants committed to serving the community,” Tillander said. With 1,100 K-12 students attending school right next door at Durfee Elementary-Middle School and Central High School, the club is ideally located, he said. There are low literacy rates among Durfee students, Tillander said, and high chronic absenteeism among students in the high school. Teens comprise about 40 percent of Metro Detroit Youth Clubs’ total membership, he said. Teenagers have totaled 5,034 of the nonprofit’s members since 2010. None among them participated in a pregnancy while engaged with the club, and all but one either graduated from high school or earned their GED, Tillander said. At Durfee, Metro Detroit Youth Clubs expects to provide programs

The club plans to officially open its new spaces on Sept. 3. It will then begin work on other new spaces, including a barber shop/salon, test kitchen, cafe, laundromat and dance studio. It expects to be able to announce additional support for the project and to complete it by the end of the year, Wilson said, noting it’s working to secure multiyear gifts for programming in 2020 and 2021. The nonprofit’s new model “has helped to reinvigorate interest in either continuing, expanding or bringing back funding,” he said. Wilson, who joined Boys & Girls Clubs in October, was charged with reinvigorating the club’s relevancy and funding, forging new collaborations and stabilizing finances. “Everybody is very excited about this (model),” he said. Other local communities are asking the nonprofit to bring the model to their backyards, and four other Boys & Girls Clubs are benchmarking it, Wilson said. Meanwhile, Boys & Girls Club of Troy has acquired and cleared 1.5 acres next to its club on John R, just south of Wattles Road, to ready it for a new, 14,000-square-foot teen center planned for the site. “Right now, we’re turning away kids at our club” for lack of space, CEO Jeff Evans said. “There’s really no place for them to go … movies only last two hours.

Where’s a productive place for them to be?” The Troy club’s young members — which number about 300 each day during the summer — hail from over 40 different local communities. The teen room at the club only has space for 50. The club, which is operating on a $600,000 budget, plans to build a new teen center, connecting it to the current building via a hallway to the gym. Construction will begin within the next year or two, depending on the pace of fundraising, Evans said. The center, which is expected to have space to serve 100 teens or more each day, will include a music studio with lessons provided by national nonprofit Note for Note, a Planet Fitness-equipped workout room, a drivers training school with a private instructor, a program with nonprofit Digital Inclusion which refurbishes, markets and resells used computers and new workforce readiness and pre-apprenticeship programs in skilled trades like welding. Boys & Girls Clubs of Troy also plans to help teens explore career paths, apprenticeship opportunities and college opportunities. “You assume parents are having these conversations with their kids, but they’re really not,” Evans said.

for about 240 students each day, Tillander said. Linda Nabers, who led the club’s Southfield location since 2010, will serve as director of the Durfee club. Tillander said Evans Metro Detroit Youth is also in the process of hiring 15 employees overseeing programs, all but one part time, and raising $750,000 to outfit the new club. A $250,000 challenge grant from Garden Fresh founder Jack Aronson — a member of Metro Detroit Youth’s board — and his wife Annette has helped spur support from the Children’s Foundation and others, Tillander said. To bolster support for students, Oakland University is establishing a presence within Metro Detroit Youth Club’s footprint at Durfee. OU students and staff will provide academic support, homework assistance and mentoring to the club’s young members. And the Oakland County university’s student sports teams, many with student athletes who grew up in the city, will provide sports clinics for the younger students. “We have found that when our club members connect with role models ... and they see they are going to school and having come from places like they are in, it inspires them,” Tillander said. “It’s an opportunity for them to see a world that’s beyond their experience.” One of OU’s goals is community outreach, said Glenn McIntosh, vice president for student affairs and chief diversity officer.

“When we look at the population we want to serve, it’s certainly youth.” OU can provide tutoring in literacy, mathematics and reading, said McIntosh, who is also a member of Metro Detroit Youth Clubs’ board of directors. Those volunteer efforts “will be able to galvanize our employee base, as well as students,” he said. The university’s athletic teams already do community work in Pontiac, McIntosh said. Their efforts at Durfee will be an extension of that. “It’s good experience for the student athletes as well as the opportunity to connect with young people and be a positive role model.”

Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

Marketing and branding As an affiliate of Boys & Girls Clubs of America, Metro Detroit Youth Clubs benefited from marketing and powerful brand awareness campaigns, Tillander said. As an independent nonprofit, “we’ll have to focus significantly on our marketing and branding,” he said. Several local agencies are providing pro bono marketing, branding and communications assistance, including: Ideation Orange, Midcoast Studio, Group Ex and CKC Agency. Whether an affiliate of Boys & Girls Clubs of America or independent, Metro Detroit Youth Clubs will do a good job of serving kids, providing quality programs and a safe place for youth to thrive, said Jeff Evans, CEO of Boys & Girls Club of Troy. “That’s the most important thing.” “We still plan on staying in touch and partnering with them as we have in the past,” Evans said. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch

crainsdetroit.com Editor-in-Chief Keith E. Crain Publisher KC Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Associate Publisher Lisa Rudy, (313) 446-6032 or lrudy@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 Portfolio Manager Tim Simpson, 313-446-6788 or tsimpson@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 Senior editor, Chad Livengood, (313) 446-1654 or clivengood@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

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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 the 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 2019 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 // A U G U S T 1 2 , 2 0 1 9

THE WEEK ON THE WEB

RUMBLINGS

Hudson’s site tower may end up not being tallest in state

First USPBL veteran called up to the majors

AUGUST 2-8 | For more, visit crainsdetroit.com

he United Shore Professional Baseball League is celebrating a milestone after one of its former pitchers was called up to a Major League Baseball team — the first player in the Utica-based developmental league to make it to “the show.” Randy Dobnak, 24, was called up by the Minnesota Twins earlier this week, according to an MLB announcement Thursday. The right-handed Pittsburgh native played for the Utica Unicorns in 2017 after graduating from Alderson Broaddus University in West Virginia and going undrafted. In his only season in the USPBL, Dobnak pitched six games, recording 29 strikeouts on a 3-0 record and 2.31 earned run average, according to a USPBL news release. The Twins scouted Dobnak and he signed a minor league contract with the club after the 2017 season. “The USPBL is truly a developmental league for Major League Baseball, and we hope that Randy is just the first of many players who will be able to fulfill their dream of making it to

or 2 1/2 years, Dan Gilbert’s Bedrock LLC has said that the tower planned for the site of the former J.L. Hudson’s department store in downtown Detroit would be the tallest building in the state when it’s completed. Now, it’s not entirely sure. Whether it ends up taller than the 727-foot Detroit Marriott at the Renaissance Center, currently the state’s tallest building, is largely contingent upon what an undetermined hotel operator that could use the building wants, said Joe Guziewicz, vice president of construction for Bedrock, which is Gilbert’s real estate development, management, leasing and ownership company. Guziewicz spoke to members of the media last week before taking them into the 40-foot-deep hole where the development is now slated to rise and be complete in four years. “It’s tough to answer,” Guziewicz said in response to a question about its height. “Do I think it’s going to be half the size (of what was previously discussed)? My gut reaction is probably not. Is it going to be the tallest building? Possibly.” “As we get that hotel operator online, they are going to have a lot of impact on the function of the building, and ultimately the height of the building,” Guziewicz said. Among other revelations during the briefing: J A skydeck is no longer planned for the tower because it would have required a dedicated elevator, taking up too much building space when also paired with a hotel elevator and residential elevator. J Bedrock is seeking a national brokerage firm to handle at least the office leasing for the building, and potentially the retail leasing for its Monroe Blocks project. It’s the first time Gilbert’s company has sought to contract with another broker to fill up its space in Detroit. At the time of the December 2017 groundbreaking ceremony, the project was expected to be complete in 2022 and have 330-450 residential units; 103,000 square feet of retail, food and beverage space, plus a street-level market; 168,000 square feet of event and conference space; and 263,000 square feet of office space. Another 93,000 square feet of exhibit space was planned, along with at least 700 parking spaces in a below-ground garage. The development is now anticipated to be complete in 2023. “There was a lot of demolition and remediation that needed to happen,” Guziewicz said. “We had to reinforce some of the wall. We had to repair some of the tie-backs that hold that tub wall. We did a lot of work.”

BUSINESS NEWS J GateHouse Media owner New Media Investment Group Inc. agreed to acquire Gannett Co., which includes the Detroit Free Press, in a $1.38 billion deal that unites the two biggest U.S. daily newspaper chains in an in-

the Majors,” Andy Appleby, founder and CEO of USPBL, said in the release. In its fourth year, the USPBL has proved to be a popular and affordable entertainment option Dobnak for casual and serious fans of the game. The $18 million Jimmy John’s Field along M-59 in Utica averaged 3,400 fans last year. The 1,900seat stadium offers ample lawn seating, live music, children’s games and fireworks regularly. Appleby has outlined plans to expand the four-team league and export his business model to other major markets. Attracting talent and establishing a reputation as a stepping stone to the big leagues could go a long way in raising the league’s profile and making that vision real. There are more than half a dozen USPBL veterans playing on MLB farm teams.

KIRK PINHO/CRAIN’S DETROIT BUSINESS

Workers have resumed installing windows on the top floors of the new Little Caesars Global Resource Center on Woodward Avenue in downtown Detroit after at least a year delay.

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

$57.4M

Amount of proposed bonds for a parking deck in Birmingham that voters shot down

2,000

Number of jobs expected to be created by Mahindra in Flint

$3.25M

Sale price for a building near Little Caesars Arena seeing new life as a market

dustry that’s consolidating to survive. The merged entity will be a local news giant that owns more than onesixth of all daily newspapers in the country and reaches nearly 9 million print readers. J The West Dearborn Downtown Development Authority and the East Dearborn Downtown Development Authority are offering grants of up to $10,000 each to support entrepreneurs, pop-up shops and artists setting up shop in the districts. J A former party store in The District Detroit that sold for $3.25 million two years ago is seeing new life as a market. High-end ZZ Market & Grill opened last Tuesday at 210 Henry St., around the block from Little Caesars Arena. J Lithium-ion battery maker A123 Systems LLC plans to lay off 42 employees at its Livonia headquarters as it ends manufacturing in Michigan to focus on research and development.

The cuts affect “manufacturing-related employees” including production operators, technicians, plant supervisors, engineers and others, A123 said in a notice it filed with the state last month. J Kroger Co. planned to host a job fair this past weekend in hopes of filling 500 open positions, with plans for an additional 300 later in the year. J The Chaldean Community Foundation acquired The Chaldean News for an undisclosed amount. Founded 15 years ago, the monthly newspaper has a circulation of about 10,000 and more than 20,000 active monthly digital readers. J Detroit Mayor Mike Duggan said he aims to deliver to FCA US LLC 10,000 Detroiters qualified for jobs at the east-side plants the automaker is spending $2.5 billion to expand. J Le Rouge is getting a new brew courtesy of Stroh Brewing Co. and Brew Detroit. The new Stroh’s lager, themed after the Detroit City FC semi-pro soccer team, debuted last Tuesday at the team’s match against Windsor TFC. Dubbed Detroit Lager, the 4.6 percent ABV beer is made with traditional corn grits.

DEVELOPMENT NEWS J Workers last Monday began installing windows on the final floors at the new Little Caesars headquarters building on Woodward Avenue in downtown Detroit. It marks the first visible progress on the installation of the pizza-slice shaped windows in more than a year. J Wahlburgers became the first tenant to open at the 122,500-squarefoot Woodward Corners development in Royal Oak last week. Others will include Beaumont Urgent Care, New Order Coffee, a fitness studio and a yoga studio.

LARRY PEPLIN FOR CRAIN’S

At Crain’s HR Summit last week, a panel of human resources leaders and executives discuss how CEOs and HR can work together to drive strategy. From left, Crain’s Special Projects Editor and moderator Amy Elliott Bragg interviews Cathy Kosin, senior vice president and Detroit market leader, Oswald Cos.; Anthony LaVerde, CEO, Emagine Entertainment; Shelby Langenstein, chief people officer for Emagine; and C. Elaine Tingle, executive director of HR and community affairs at Bridgewater Interiors. The event also honored the winners of the inaugural Crain’s Excellence in HR awards, featured in last week’s issue.

MoGo goes electric with pedal-assist bikes M

oGo has rolled out 50 new pedal-assist bikes in Detroit capable of cruising up to 15 mph on electric boost. The bike-share nonprofit said last week that the part-electric bikes, called MoGo Boost, will enable users to go farther and faster. The bikes feature technology that adjusts the level of electric assistance depending on the user. The new bikes will be added to MoGo’s fleet of 430 bikes stationed at 44 stations around the city. MoGo employees will charge the bikes, the release said. It eventually hopes to install electric charging stations. The nonprofit is moving forward

with plans to bring its bikes to Berkley, Ferndale, Huntington Woods, Oak Park and Royal Oak this year. It won a $495,380 grant from Southeast Michigan Council of Governments for the expansion. Questions were left with a spokesperson Friday for more information on the electric bikes and expansion. MoGo is investing in electric bikes as the city becomes accustomed to electric scooters scattered about downtown and into the neighborhoods. Since the onslaught of scooters from companies including Lime and Bird hit Detroit last year, other unique mobility concepts such as pogo sticks have cropped up around the country.

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