Crain's Detroit Business, Feb. 14, 2022 issue

RISING STARS: Bakery grows out of Marygrove food-business incubator. PAGE 3

BROADBAND ACCESS New money for connections, but that’s not only issue PAGE 10

CRAINSDETROIT.COM I FEBRUARY 14, 2022

BLOCKADE MAY HAVE LONG TAIL

Truckers and other protesters block access to the Ambassador Bridge in Windsor last week.

Businesses worry about ripple effects from closure, mandates

GREG LAYSON FOR CRAIN’S DETROIT BUSINESS

BY KURT NAGL

Leading ‘movement’ to repair Detroit There isn’t an easy line to be drawn between historic preservation and chicken paprikash, but James A. Turner draws it anyway.

It was his first exposure to the Hungarian dish at 15 that made him see the value of different cultural groups, he said. Since that fateful meal, Turner’s interest in other cul-

tures has expanded to include the architectural differences each brought to metro Detroit — the different building characteristics, the housing stock.

Turner, who owns Turner Restoration, was long intrigued by the built environment. He subscribed to Old House Journal and Fine Homebuilding and volunteered with what was then Preservation Wayne. But

See BRIDGE on Page 16

Tension amps up in construction labor Union billboard, lawsuit raise temperature

James A. Turner gets hands-on in restoration

BY ARIELLE KASS

Add a blockade at the busiest U.S.-Canada border crossing to the list of supply chain problems pounding Michigan businesses.

The shutdown of the Ambassador Bridge last week, the main link between Michigan and its largest trading partner, over COVID-19 vaccine mandates for truck drivers and other issues quickly escalated to an economic emergency with far-reaching impact from farms to automotive factories.

Brian Hitchcock’s trucking business is at a near-standstill thanks to protesters blocking access to the Ambassador Bridge, but he said they are not the problem.

“We can’t afford to lose drivers over a mandate when they’ve been out there for two years doing this

BY KIRK PINHO James Turner teaches a student at Commonwealth Preservation Trades in Louisville, Ky. | TURNER RESTORATION

he had a whole other career, working at IBM and for other third-party vendors, before a two-week window See TURNER on Page 16

Celebrating Black History Month: This profile is part of a series of conversations with Detroit-area Black entrepreneurs and business leaders about how they got their start. Visit crainsdetroit.com for more throughout the month of February.

The opening salvo last month was a federal lawsuit alleging pervasive racial discrimination in a nonunion electrical shop based out of Lansing.

Now the union representing electrical contractors is taking its case to the public with a billboard targeting a large hotel under construction in Detroit’s Corktown neighborhood questioning why its developers and general contractor aren’t using unionized trades labor.

To be clear, the billboard doesn’t

make this a New York City-style labor beef, complete with a 25-foot tall inflatable rat known as Scabby greeting people at job sites or protests where the union had a gripe.

There aren’t brawls in the streets.

But for Byron Osbern, business representative for the International Brotherhood of Electrical Workers Local 58, the Godfrey hotel project was the last straw.

“You can look out the union hall and see the crane,” Osbern said.

See UNION on Page 17

NEWSPAPER

VOL. 38, NO. 6 l COPYRIGHT 2022 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

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BIG DONATION

ARTS GRANTS

Mary Ann Van Elslander gives millions to St. John Children’s PAGE 13

Davidson Foundation gives to DIA, DSO in Gersons’ honor PAGE 13

2/11/2022 2:54:00 PM

NEED TO KNOW

SUPER BOWL SPOT

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT  WHITMER PROPOSES HIKE FOR HIGHER EDUCATION THE NEWS: Gov. Gretchen Whitmer wants to boost state taxpayer support of Michigan’s public universities and community colleges by 5 percent in the next fiscal year under a plan that would represent the largest single-year funding increase for higher education in decades. In addition to a 5 percent hike for the 2023 fiscal year, Whitmer proposed giving Michigan’s 15 public fouryear universities and 28 community colleges an extra 5 percent one-time payment using surplus tax funds and $200 million for deferred maintenance of campus buildings and information technology systems.

WHY IT MATTERS: Michigan has lagged other states in state aid for higher education. If approved, the spending plan would also mark the first time since 2000 that the state has appropriated money to state universities earmarked for facilities, said Daniel Hurley, CEO of the Michigan Association of State Universities.

 CONSTRUCTION QUIETLY STARTS AT JLA SITE THE NEWS: The arrival of construction equipment signaled the start of site work for a new residential tower on the former Joe Louis Arena site in Detroit. Several pieces of heavy-duty equipment could be seen on the

GM, Dr. Evil take up the charge on climate change

Under the plan presented during a school board study session, the district could spend $281 million to rebuild five schools, another $296 million to renovate buildings, and $128 million to reopen previously closed schools, expand pre-K, build additions onto existing schools, and demolish or sell some vacant buildings.

9-acre site late last week as contractors with Macomb Township-based Colasanti Construction Services Inc. prepped for initial work on a 24-story apartment tower being built on the property. A worker at the scene Thursday said 100-foot deep caissons were being drilled.

WHY IT MATTERS: A building permit issued for the property allows for site, civil engineering and foundation work “only for future multifamily dwelling.” The developer, Detroit-based Sterling Group, applied for a permit for the building itself on Jan. 28 although the city declined to release any information on it Thursday.

 DETROIT PLAN WOULD REBUILD SCHOOLS THE NEWS: The Detroit school district unveiled Thursday night an ambitious $700 million proposal to rebuild schools, renovate buildings, reopen previously closed schools, expand pre-kindergarten programs, and address other long-delayed building needs, Chalkbeat reported.

 In General Motors Co.’s version of an “Austin Powers” movie, Mike Myers played Dr. EV-il — EV, as in electric vehicles — and the character realizes he needs to solve climate change before taking over the world.

That was the plot of the automaker’s Super Bowl ad, which was released Thursday after several days of teasing its use of the 1990s film franchise to push its EV plans in Sunday’s game. GM and agency McCann were able to lure back several key members of the film’s cast, including Rob Lowe as Young Number Two and Seth Green as Scott Evil.  In the ad, the characters are shown taking over GM’s Detroit headquarters at the Renaissance Center. Between one-liners, they sneak in GM plugs, including promoting its Ultium battery platform, which the company has touted as enabling the construction of a range of EVs at different prices.

But the ad also pitched EVs more broadly as pro-environment, with Scott Evil noting that they can “reduce tailpipe emissions.”

WHY IT MATTERS: As part of the $700 million plan, district officials are calling for rebuilding the following schools: Cody High School, Paul Robeson/Malcolm X Academy, Pershing High School, Carstens @ Golightly, and Phoenix, a building that closed in 2016.

 COMMUNITY FOUNDATION NAMES NEXT PRESIDENT

Dr. Evil and his cronies help fight climate change in GM’s Super Bowl ad. |

THE NEWS: Two After a year-long national search, the Community Foundation for Southeastern Michigan has named a new president. Ric DeVore, newly retired regional president for Detroit and Southeast Michigan for PNC Bank, will succeed the foundation’s longtime president Mariam Noland on April 1.

GENERAL MOTORS CO.

WHY IT MATTERS: Noland is retiring after 36 years at the foundation. During that time, she’s helped to establish a tradition of permanent endowment in Southeast Michigan and $1.2 billion in assets at the foundation to provide predictable revenue for nonprofits.

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2 | CRAIN’S DETROIT BUSINESS | FEBRUARY 14, 2022

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FINANCE

ENTREPRENEURSHIP

Mi Bank ready to act on aggressive growth plan Bank to focus on private client services

BY NICK MANES

Ruth Bell (left) and her son, Robert Mitchell, both of Detroit, prep baked goods for her Chugga’s Main Street Bakery space at the former Marygrove College campus in Detroit. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

RISING SUCCESS

Detroit baker gets a lift from incubator at Marygrove campus

BY ANNALISE FRANK

Ruth Bell’s first customer in Detroit was a mail carrier who followed her nose to Bell’s front door, the sweet scent of freshly baked bread emanating from within.

That was the early 1990s and Bell, who worked in a bakery with her mother and grandmother in Los Angeles decades previous, was making bread at home only because her children refused store-bought.

She hesitated, but then cut the mail carrier half a loaf. The mail carrier came back the next day with another potential customer, and it snowballed from there.

Now, after a long career in entrepreneurship, Bell has snagged a lucrative wholesale deal with Meijer Inc. and plans to open a storefront for the business she started three decades ago, Chugga’s Main Street Bakery.

She’s been working in a shared kitchen under a food incubator program in northwest Detroit. It’s helped the business grow, but now Bell simply needs more space.

She’ll be going from a cramped 400 square feet to 3,000.

Bell and her son Robert Mitchell have been baking through the night, from 9 p.m. or 10 p.m. to 6 a.m. several nights a week, averaging around 400-500 products a week in a bakery room off of a kitchen that used to serve Marygrove College. The school closed down in 2019 and the site is being transformed into a new “cradle-to-career” campus.

Detroit community chef Phil Jones runs the kitchen there under a partnership with the Marygrove

Having had much of its business kick into gear amid a global pandemic, one of the few banks to launch in Michigan in the years after the Great Recession now plots an aggressive growth path.

Established in April 2019 and formed to operate as “a financial service provider for business owners,” Mi Bank in Bloomfield Township found itself processing COVID-19 small business re- Farr lief loans at a breakneck pace less than a year after opening its doors.

Flash forward to the emergence of spring in 2022 and the bank is preparing to exit the so-called “de novo” period during which new banks can offer only “pretty vanilla” services, said Rob Farr, the bank’s chairman and CEO. Now Mi Bank — which as of September had about $154 million in assets, according to a regulatory filing — has tapped an industry veteran to lead a new private financial services business for high-net-worth customers. Farr also said he sees opportunity for growth of the business organically and possibly through acquisition.

“So we look at ourselves as really a financial service provider for business owners. That’s our primary target market,” Farr told Crain’s. “So in addition to loans and deposits, which obviously we can provide as a bank, we’re looking at other things we can provide to that target market, which would include a lot of things including potentially getting trust powers,” Farr said. “So that takes us into looking into what other things can we be helping a business owner with to make their life a little simpler?”

Shifting into new gears

Conservancy overseeing the Kresge Foundation project. Jones runs a space for growing entrepreneurs, provides catering with his business Farmacy Food and cooks meals for those who need them.

He’s been there nearly a year.

Bell started in the kitchen there in fall 2020 and became one of the first to join the pilot incubator program for food businesses under Jones, who she knew from selling at Eastern Market.

Jones said the shared kitchen program is still in the “early stages” and there’s no set number of businesses they expect to serve in the coming year.

As the first part of its shift into growth mode, Mi Bank has tapped an industry veteran to lead its nascent Private Client and Family Office initiative. The bank announced last month that it had hired Bruce Kridler as a director of the new venture. He will oversee the delivery of additional products and services to the bank’s high net worth and ultra-high net worth clients.

Some of these services will be provided directly by Mi Bank, and others will be delivered through relationships with other providers, executives said.

Before joining Mi Bank, Kridler spent nearly a decade leading business development for Kalamazoo-based wealth management firm Greenleaf Trust, and prior to that spent more than 17 years with Huntington Bank’s Private Financial Group and Wealth Management operation in metro Detroit.

Kridler said his goal is to provide a level of service that clients desire from

See BAKER on Page 15

See MI BANK on Page 15

Ruth Bell sells her Chugga’s Main Street Bakery monkey bread at Holiday Market in Royal Oak and small-format Meijer markets in Royal Oak and Detroit. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

Detroit community chef Phil Jones is looking to help Black- and Brown-owned food businesses find financing and resources through a shared kitchen incubator program at the former Marygrove College campus in northwest Detroit.

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REAL ESTATE INSIDER

Record year in commercial property sales skips metro Detroit Commercial property transaction volume reached all-time high levels nationally last year, but not in metro Detroit.

That’s not to say Kirk that 2021 was a PINHO bad year for property deals around town — quite the opposite in fact, experts said, as transactions, by dollar volume, last year were fourth-highest since 2006.

That’s according to data from Irvine, Calif.-based CoreLogic Inc., which tracks financial, property and consumer information.

“Nationally it was crazy and even though this wasn’t record setting locally, it was a pretty... good year,” said Dennis Bernard, founder and president of Southfield-based Bernard Financial Group.

The fuel for the surge in commercial acquisitions was a combination of factors.

They include low cap rates, which is shorthand for capitalization rates, a measure of risk vs. reward in real estate deals. Low cap rates mean lower risk and lower investment return, while higher cap rates mean higher risk but higher investment return. And low cap rates tend to drive up acquisition values, said Anthony Sanna, executive director in the Birmingham office of Integra Realty Resources, an appraisal firm.

Inflation hedging was another factor.

“Low cap rates and inflation have increased dollar volume,” Frank Nothaft, executive and chief economist for CoreLogic, said.

Sanna said property buyers are expecting appreciation in the next two or three years and that rent growth across a host of sectors, ranging from multifamily apartments to the industrial, warehouse and distribution sector, is fueling value growth.

That’s a positive sign overall, Sanna said.

“In the pandemic, we thought there would be some widespread damage that never really occurred,” he said.

In Metro Detroit, according to CoreLogic, there was $1.9 billion in sales last year across 3,678 deals for an average of $515,435 each. | LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

Anne Galbraith Kohn, senior vice president of investment and institutional properties in the capital markets division of Dallas-based CBRE Inc.’s Southfield office, said in an email that “industrial and multifamily investment sectors remain strong and accounted for the majority of the sales volume in 2021.”

“We expect interest in these categories to remain robust with the retail sector gaining momentum in 2022,” Galbraith Kohn said.

And some investors looked for deals in advance of what they believed were impending tax code changes under a new administration and Congress last year, Bernard said, including changes to 1031/like-kind exchange rules that allow investors to buy and sell properties, within certain parameters, with deferred capital gains taxes.

Low mortgage rates on commercial deals also gave borrowers cheap money.

And there was a lot of it floating around, Bernard and Sanna said.

“Also you saw that there was a tremendous amount of liquidity, which meant that it had to go somewhere and the stock market was already at a high and bouncing around, so they were looking for real estate,” Bernard

said. “It was an unusual year. There was a lot of liquidity pumped from the federal government and other governments that went to investors.

It was a confluence of things that made it a huge year.”

Nationally, there was $1.21 trillion — gulp — worth of property sold in the U.S. last year, according to CoreLogic data, dwarfing the $1.17 trillion recorded in 2006 and $1 trillion in 2007 in the two years leading up to the Great Recession.

Last year there were 411,965 sales for an average of close to $2.95 million each. In 2006, there were 417,374 for an average of about $2.81 million and the following year, there were 374,528 sales, averaging $2.69 million nationwide.

In metro Detroit, according to CoreLogic, there was $1.9 billion in sales last year across 3,678 deals for an average of $515,435 each.

The highest in the 15-year period between 2006 and last year was in 2006, when there was $2.1 billion across 4,595 transactions for an average of $457,246 per sale, CoreLogic data say.

The next highest was in 2019, when there was $1.97 billion across 3,953 sales for an average of $497,738 and then in 2012, when there was $1.93

billion across 4,291 sales for an average of $448,754.

A new master plan Here’s something to watch, a tipster notes.

Royal Oak is in the process of hiring a firm to do its new master plan.

Normally, that’s a bit of a snooze, but the players involved this time around will likely make things a bit jazzier, at least from an urban planning perspective (for those of you who geek out over that sort of thing).

The city issued a request for qualifications for planning firms to author the new master plan and received 11 responses.

Five firms were given the green light to submit a request for proposals: Miami, Fla.-based DPZ CoDesign; Chicago-based Houseal Lavigne Associates; Columbus-based MKSK, which has an office in Detroit; Detroit-based Archive DS; and Detroit-based SmithGroup.

It’s now in the hands of the planning commission to evaluate those responses when they come in.

All have done work locally.

DPZ is known locally for its work for years in downtown Birmingham on various aspects of the posh city’s mas-

ter plan. Its application materials say the firm has also worked in Pontiac.

Houseal Lavigne has done work in Detroit’s Jefferson-Chalmers neighborhood, Livonia and West Bloomfield Township, while MKSK has done work in Ferndale, Bloomfield Hills, Berkley, Grosse Pointe Park, Farmington, Rochester Hills, Royal Oak and Birmingham, its application materials say.

Archive DS’ application says that it has worked on the Woodward Avenue Non-Motorized Master Plan and the master plan for the first phase of the Bus Rapid Transit Master Plan for Woodward, among others.

SmithGroup’s application says it has done work or is currently working in Ferndale, Detroit’s Islandview neighborhood, Lansing, Traverse City, Wyandotte, Owosso, Dearborn and elsewhere.

Jeffersonian Houze owner seeks to halt sale One of the corporate owners of the troubled Jeffersonian Houze highrise apartment tower is seeking to prevent a foreclosure sale of the building that’s scheduled for Feb. 17.

In a motion for a temporary restraining order filed in federal court Feb. 4, LivRiverHouze LLC says that it “will suffer irreparable harm” if the sale is not blocked.

LivRiverHouze is registered to real estate investor and developer Joe Barbat, who is one of the co-owners of the building along with Arie Leibovitz, another investor and developer.

The two men have been battling in court for more than a year over the building.

The 410-unit building at 9000 E. Jefferson Ave. has been under the oversight of Ronald Glass of B. Riley Financial Inc. since the summer after lender Fannie Mae requested a receiver in April.

A six-month redemption period would begin following the auction, according to a filing from January.

Glass would continue to oversee the property during the redemption period, the filing says.

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

REAL ESTATE

Gardner White taking over part of former Art Van campus in Warren

BY KIRK PINHO

Gardner White will take over a portion of the massive former Art Van Inc. headquarters in Warren as it needs more space for distribution and corporate staff.

The Auburn Hills-based furniture store said last week that it would occupy part of the property’s warehouse as well as the store and corporate office.

In a Monday afternoon interview, Gardner White President Rachel Stewart said the company will have leadership staff in Auburn Hills and Warren and some will have offices in both locations. The corporate offices in Warren are about 75,000 square feet and whatever Gardner White doesn’t use for employees will be used for other purposes.

“It is not an entire (headquarters) relocation because we are not moving all of our distribution activities,” Stewart said. “We needed more corporate office space, so we will be moving a lot

The former Art Van headquarters in Warren is being partially taken over by Gardner White furniture. | COSTAR INC.

of our corporate leaders to that location. What we are also doing is we simply need more space for a distribution center. These are two now very important operations” in Auburn Hills and Warren.

The new warehouse space in Warren will allow for more incoming ship-

ment storage while also maintaining its Auburn Hills distribution center, a Monday afternoon news release says.

Stewart said the Auburn Hills location is landlocked and building additional space there isn’t feasible.

“We also believe in this location,” Stewart said. “We have had a fabulous

store down the street from it for 30 years.”

Also as part of the move, Gardner White will shutter that existing 40,000-square-foot store on Ryan Road and move all of those operations into the former Art Van store in Warren, which is about 100,000 square feet, Stewart said.

A spokesperson said that overall the furniture retailer will take about 300,000 square feet of the broader former Art Van property at 6500 E. 14 Mile Road, which totals more than 1 million square feet.

Stewart said a capital expenditure budget has not yet been determined.

Farmington Hills-based Friedman Real Estate and Southfield-based Signature Associates Inc. were the brokerage firms on the deal.

Montreal-based Brasswater, formerly Groupe Quint, finalized its purchase of the former Art Van property plus one other for $52.5 million in September.

An email was sent to Simon Yeramian, Brasswater’s vice president of investments, on Monday afternoon seeking comment.

The property was most recently occupied by Loves Furniture Inc. and was listed at $65 million in January 2021, a jump from the previous asking price of $53.9 million. Marketing materials from Southfield-based Signature Associates Inc. at the time said the 1.06 million-square-foot building sits on 63 acres and has more than 1,150 parking spaces.

Loves Furniture bought Art Van’s assets and leases for 27 stores for $6.9 million in May 2020 and then eight months later went belly up.

Gardner White has taken over former Art Van stores in Canton Township, Rochester Hills, Saginaw, Shelby Township, Taylor and Howell.

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

4 | CRAIN’S DETROIT BUSINESS | FEBRUARY 14, 2022

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REAL ESTATE

REAL ESTATE

Michigan posts most foreclosures in country as backlog clears

BY ARIELLE KASS

Michigan and metro Detroit have far more foreclosures than anywhere else in the country, according to data from RealtyTrac. But the huge year-over-year increase in January is no cause for alarm, experts said, and isn’t a sign of a worsening housing market.

The 1,013 foreclosures in January in metro Detroit are nearly five-fold more than the 210 foreclosures in Chicago, the metro area with the next-highest total. Michigan’s figures represented a 622 percent increase over the totals in January 2021.

But Rick Sharga, the executive vice president of RealtyTrac, said the figures were still low compared with a normal year. The big leaps, he said, were because moratoriums that kept foreclosures from moving forward had run out. Most of those in Wayne County, which had the bulk of foreclosure activity, were in the end stages of the process — indicating that they had been on hold throughout much of the pandemic, but were finally moving forward.

“They’re all old foreclosures that have been in the process a long time,” he said. “Wayne County numbers could look better by next month.”

The backlog is simply moving faster in Michigan than it is in other states, Sharga said.

He said it could take several more months for the backlog to be completely cleared out, but that the figures are still “well below” normal levels and are not a cause for concern.

Across the metro area, one in every 1,547 homes was foreclosed on in January; in Wayne County, it was one in every 768.

“I don’t think it’s in danger of seeing what we saw 10 years ago,” Sharga said.

One reason for that is the relative amount of equity people have in their homes now. Coming out of the Great Recession, Sharga said, a third of homeowners had properties that were underwater — they owed more on their mortgages than their homes were worth.

Now, he said, about 87 percent of those in foreclosure have equity in their homes. While having equity doesn’t prevent them from losing jobs or having medical issues that cause them to miss payments, Sharga said homeowners dealing with foreclosure now are more likely to have a “softer landing” by selling the home to pay off the mortgage.

Rick Linnell, a real estate attorney with Linnell & Associates, said he expects more people to sell their homes before they’re foreclosed on, including to third-party buyers who seek out homeowners in dire straits with the intent of fixing up homes and flipping them. The market is “on fire,” he said, and he expects more people to sell before they get to the point of foreclosure.

“To me, it’s counterintuitive,” he said. “I feel bad for the people. They could be making money.”

While RealtyTrac’s data includes both commercial and residential properties, Sharga said the vast majority of Michigan foreclosures are residential.

Jared Friedman, managing director in charge of the Capital Markets, Acquisitions and Institutional Advisory Group for Farmington Hillsbased Friedman Real Estate, said his company, which handles receiverships all over the country, is seeing very few in Michigan.

“The state of the commercial foreclosure market in Michigan specifically is almost nonexistent,” he said. “All the receiverships we have right now are in Illinois, Wisconsin, Ohio, Texas. Michigan is our quietest state in terms of foreclosure.”

He attributed that to the health of the automotive market and its ripple effects, as well as Michigan landlords in general not being over leveraged.

“We have probably have 3 million square feet of receiverships we have taken over, and almost none of it is in Michigan,” Friedman said.

Staff writer Kirk Pinho contributed to this story.

Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB

The 1,013 foreclosures in January in metro Detroit are nearly five-fold more than the 210 foreclosures in Chicago, the metro area with the next-highest total. | GETTY IMAGES/ISTOCKPHOTO

Parts of the city of Detroit saw the greatest increases in sales prices, with one area of the city seeing prices jump a whopping 68 percent, according to data from the multiple listing service Realcomp. | GETTY IMAGES/ISTOCKPHOTO

Southeast Michigan home prices largely up in 2021, especially in Detroit Warren, Sterling Heights, Royal Oak, Livonia see sales bumps

BY ARIELLE KASS

The 2021 housing market in Southeast Michigan continued to be strong, as low inventory led to rising prices and increased demand. But the benefits weren’t shared equally — prices and total sales spiked more in some parts of the region than in others.

Parts of the city of Detroit saw the greatest increases in sales prices, with one area of the city seeing prices jump a whopping 68 percent, according to data from the multiple listing service Realcomp. Still, the median sales price in that area on the east side — Eight Mile Road south to Gratiot Avenue and Houston Whittier Street north to Seven Mile Road — was just $42,000, the lowest in the region. Other parts of Detroit were also among the most likely to see prices jump. Some, like Mack Avenue to the city limits, had far higher median sales prices that neared $200,000.

As a whole, Detroit had more sales than anywhere else in the region. The 4,576 closed purchases in 2021 marked an 11.1 percent increase over 2020, and the median value of $73,000 was up 33.6 percent.

“We’ve had a lot of interest in our real estate,” said Darralyn Bowers, a broker with Bowers Realty & Investments who works in Detroit. “People are desperate for housing right now.”

Bowers suggested some of the increase in sales in the city comes from the number of landlords who have decided they wanted to get out, as the Duggan administration enforced requirements for property owners to have certificates of compliance to be eligible for full distributions of coronavirus relief funds.

“If you can’t find a rental, your only alternative to find some kind of housing is to buy,” she said.

“IT’S THE NATURAL PROGRESSION OF WHAT’S AFFORDABLE. WHEN INTEREST RATES ARE LOW, PEOPLE ARE MOVING UP. ...

IF INTEREST RATES ARE LOW, PEOPLE WILL BETTER THEIR SITUATION.” — Al Block, real estate broker and co-owner, RE/MAX First

Other parts of the area also saw sales bumps. Warren, with 2,545 sales, was up 16.2 percent and Sterling Heights, with 1,996 sales, showed a 17 percent increase. Sales were also up 13.4 percent in Royal Oak, to 1,822, and 7 percent in Livonia, where 1,784 houses were sold.

Al Block, a real estate broker and co-owner of RE/MAX First, said that as prices went up in Ferndale (3.7 percent, to $222,500), Royal Oak (9.8 percent, to $290,000) and Troy (9.4 percent, to $350,000), Warren and Sterling Heights in particular represented an expected direction for the market. Prices in Warren were up 9.7 percent, to $170,000, while in Sterling Heights, they rose 17.1 percent, to $260,000.

“It’s the natural progression of what’s affordable,” Block said.

“When interest rates are low, people are moving up. ... If interest rates are low, people will better their situation.”

The amenities many of these cities have worked to create over the years, from parks to vibrant downtowns, have also had an impact on desirability, Block said. Residents take note as areas improve and continue to move to those parts of the region.

Ann Arbor, with 1,517 sales, saw a 20 percent increase as prices rose

nearly 10 percent to $389,900. Kristen Kasten, a Realtor with Remerica Hometown, said the inventory shortage contributed to the spike.

With the University of Michigan, the city’s walkability, its diversity and easy access to nature, Ann Arbor is the “ideal spot to call home,” she said. People continue to buy homes above list price and Kasten said she’s seeing more cash sales.

In Lake Orion, a village of about 3,000 residents in northern Oakland County, just 51 houses sold — but that was 6.3 percent more than the year prior. And the median sales price of $291,000 marked a 43.3 percent increase, the largest in the region outside of parts of Detroit.

The jump is simply attributable to supply and demand, said Michele Blair, an independent real estate broker who works in the area. As older people decide to stay put, there are fewer options for those who want to move to the area.

Blair said she’s at the point where she’s simply turning away first-time buyers.

“The poor young people just getting started, they don’t have 10 grand in the bank, they don’t stand a chance,” she said. “The less you have available, the higher it’s going to get.

There’s no secret formula. It’s Economics 101.”

Even when more inventory does become available, Blair said she expects demand to stay high. Sales fell in a variety of jurisdictions — like Bingham Farms in Oakland County, where the 17 sales marked a 35 percent reduction, or Conway Township in Livingston County, where 37 sales were a third lower than 2020, even as prices were up in most.

“We’re like a big old dry sponge.

The market’s just going to suck them up,” Blair said. “It’s crazy out there.”

Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB

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2/11/2022 12:15:35 PM

FINANCE

NONPROFITS

GR private equity firm takes minority stake in PR firm Lambert

Fight over millions from Pulte to Detroit nonprofit headed to Florida Supreme Court

BY NICK MANES

The parent organization of Grand Rapids-based public and investor relations firm Lambert & Co. has taken on a minority investment in a bid for future growth.

A private equity fund affiliated with Grand Rapids-based Charter Capital Partners has taken an undisclosed minority stake in the firm, among the largest in Michigan and a growing national presence, according to a news release.

The news was first reported Thursday by MiBiz. The mix of debt and equity will be used to fund future growth, including new practice areas, recruiting leaders to offices in Michigan, Arizona, New York, and Texas, and accelerating its already active M&A activity, according to the release.

“Lambert has grown from a startup in my basement to one of the nation’s leading firms for integrated strategic communications,” Jeff Lambert, founder and chairman of Lambert & Co., said in the release.

“We have aggressively expanded our national clients and service footprint throughout our 23-year history, but never more so than in the last five years, and we believe Charter is a great partner to help us push the pace of growth and M&A.” The firm hauled in about $13.65 million in total fees in 2020, making it the 40th largest PR firm in the country, according to O’Dwyers,

The downtown Detroit office of PR firm Lambert & Co. | NICK MANES/CRAIN’S DETROIT BUSINESS

which tracks public relations companies.

“Our mission is to provide capital to industry-leading companies that will maximize our investment and Lambert is a company on a path to do just that,” said John Kerschen, managing director of Charter’s Capital Growth Fund. “The investment thesis was compelling based on their track record of both organic and acquisition growth, as well as industry-first innovation, and we expect to see another 20 percent growth year in 2022.”

Jeff Lambert announced late last year that he would moving from the role of CEO to chairman and that the company had tapped industry veteran Michelle Olson as the new chief executive.

Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

BY SHERRI WELCH

The estate of William Pulte has won an appeal reversing a lower court order to pay Detroit-based New Common School Foundation millions of dollars pledged by the late homebuilder while he was alive.

But the court battle between the two sides isn’t over.

New Common School Foundation, created to support Cornerstone Schools in Detroit, said it plans to appeal the decision to the Florida Supreme Court.

Led by William Pulte’s son, Mark Pulte, the estate and William J. Pulte Trust had stopped making payments on a 2019 settlement agreement to New Common School Foundation, after discovering what Mark Pulte said was a misuse of charitable funds that included a 61 percent bump in co-founder W. Clark Durant’s total compensation in 2018 after the elder Pulte’s death, with $335,000 in incentive and retention bonuses awarded on top of his $475,000 in base pay.

In court documents, the estate laid out a long list of other concerns, as well, about how New Common School Foundation, which does business as Turning Point Foundation, is using charitable funds. It noted loans made between the nonprofit and Durant, use of foundation funds to purchase high-end artwork and joint ownership between the foundation and Durant of at least one piece of artwork, payment of travel expenses for Durant and his family for a trip to Israel and a whistleblower lawsuit filed by a former Cornerstone superintendent, that raised questions

ENERGIZING MICHIGAN’S ECONOMY How energy infrastructure can attract and retain business

Mark Pulte

Jeffrey Neilson

about the foundation (and Durant) benefiting from real estate deals tied to the schools.

New Common School Foundation disputes the allegations.

After the Pulte estate and trust stopped making agreed-upon payments, the foundation filed suit with the Florida probate court that had approved the earlier settlement agreement between the two and won a court order directing Pulte to pay the remaining $8.7 million left on the $10.15 million settlement agreement.

Pulte appealed that order to the Florida Second District Court of Appeal in November 2020.

More than a year later, the appeals court reversed the lower court’s enforcement of the settlement agreement and the order that Pulte make the outstanding payments to New Common School Foundation.

In a Jan. 28 opinion, the appellate court panel that heard the appeal said the probate court lacked jurisdiction to enforce the settlement agreement, effectively reversing the lower court’s order that the Pulte estate pay the remaining funds.

Through his attorney at Clark Hill PLC, Mark Pulte, co-trustee for the estate, declined comment.

New Common School Foundation plans to appeal the reversal to the Florida Supreme Court, Chairman Jeffrey Neilson, partner at Bloomfield Township-based Lipson Neilson, said in a statement emailed to Crain’s.

Neilson said there were conflicting rulings in different Florida Court of Appeals districts that could have impacted the outcome of the case differently. The appellate panel on the case at hand “was obliged to follow the precedent established in its district,” even though the judges recognized the conflicting precedents that could have confirmed the probate court had jurisdiction and resolved the case in New Common School Foundation’s favor, he said.

The Florida Supreme Court would be likely to accept review of the case to resolve the conflicting precedents, Neilson said.

“It must not be overlooked that the appellate court panel did not rule on the merits of the case, as it left intact the probate court’s finding that the Pultes had no valid legal basis to stop making the settlement payments on Bill Pulte’s unchallenged written requests,” Neilson said.

Prior Florida Supreme Court opinions strongly suggest that the court will recognize that the probate court has continuing jurisdiction to enforce its approval order, he said.

“We believe that in the end the Pultes will have to continue to make the settlement payments totaling $8.7 million over the coming years.”

Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

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2/11/2022 12:54:14 PM

REAL ESTATE

The building at 2529 Orleans St. in the Eastern Market area is under renovation in a $24 million redevelopment that is expected to house new studios and offices for iHeartMedia Inc. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

Popular Detroit FM radio stations 95.5, 97.9, 100.3 moving to Eastern Market

BY KIRK PINHO

The volume in Eastern Market is going to be a little louder Monday through Friday.

The food-oriented commercial district east of downtown will be the new home of iHeartMedia Inc. From the former Detroit Brewing Co. building currently under renovation at the corner of Orleans and Adelaide streets, iHeartMedia will house radio stations Channel 95.5, 97.9 WJLB,100.3 WNIC, 106.7 WLLZ, Mix 92.3 FM and the Black Information Network on 1130 AM. Paul Corvino, regional president for iHeartMedia, said shows like Mojo in the Morning (95.5), and personalities like Jay Towers (100.3), Bush Man and Dr. Darrius (97.9), Ya Girl Cheron (92.3), and Doug Podell and Trudi Daniels (106.7) will all work and broadcast out of the building at 2529 Orleans St. Sales, production and other staff will also be housed in the building.

“A couple years ago we decided we want to be part of the Detroit revitalization,” Corvino said. “We’re very excited about what’s going on and we believe that iHeart and our brands, the No. 1 cluster of radio stations in the Detroit region, should be in the city supporting the city.”

Build-out is expected to be complete in May. He declined to disclose terms of the lease or cost to renovate the space.

Christos Moisides, the Detroit-based developer and landlord of the building, said the company’s lease is for 11,000 square feet although iHeartMedia will also have use of event space and the basement in the former cold storage building when needed. iHeartMedia currently has its studios and local space in Farmington Hills at 27675 Halsted Road at the southwest corner of 12 Mile Road, although its 37,600-square-foot office is currently up for sublease through the Southfield office of Cushman & Wakefield at $18 per square foot per year through Jan. 31, 2024, according to listing materials.

A message was sent to Cushman & Wakefield seeking comment.

Moisides bought the building in January 2020 from New York City-based ASH NYC, just before the onset of the COVID-19 pandemic.

Its overall redevelopment last year

was pegged at $24 million, with 55,000 square feet of office planned and the remaining space being reserved for commercial space like a brewery and a restaurant.

Moisides, executive member of Detroit-based 400 Monroe Associates LLC, paid $4.1 million for it and expects to spend $17.4 million on construction and another $2.6 million in soft costs, according to a Detroit City Council briefing document.

He was seeking approval of a 12-year city tax abatement valued around $1.08 million, Crain’s reported at the time.

In addition to iHeartMedia, Moisides said there are “a few creative companies” that have signed on for office space and there are discussions with an art gallery.

He declined to specify the companies, only saying they would take up about half the building’s square footage. In addition, the building is slated for 3,000 square feet of first-floor event space and the basement, which has 13foot rounded brick, is also slated for programming, Moisides said in an email Wednesday afternoon.

He said there is also a Mediterranean-inspired restaurant planned for the second floor that he and his wife, Ellena Gatzaros, and her family would operate along with his restaurant company, Zoe Hospitality Group. They own London Chop House and Fishbones.

Grand Rapids-based Rockford Construction is the general contractor while Detroit-based Rossetti Associates is the architecture firm.

The last significant office tenant to take space in Eastern Market was the public relations firm Truscott Rossman, which moved its headquarters from Lansing to 2362 Russell St. Developer and landlord Sanford Nelson has proposed putting up a four-story, 40,000-square-foot building at 2701 Russell St. with retail on the first floor and office space above. Although the building that sat at that site has been torn down, construction has not yet started on the new building, which would be marked by a colorful glass façade.

Crain’s reporter Annalise Frank contributed to this report.

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

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2/11/2022 9:38:21 AM

COMMENTARY

Border blockade shows how crucial our connections are

BY JOHN WALSH

COMMENTARY

Spring is coming. Where is urgency on freeway flooding?

N

ine years ago Feb. 8, the State Waterways Commission sent an urgent request to the Legislature seeking emergency funding to dredge government-owned marinas and harbors of refuge along the Great Lakes as low water levels threatened recreational boating and charter boat fishing.

Lawmakers responded at what passes as light-speed in Lansing.

Nineteen days later, an appropriations bill containing $21 million for emergency harbor dredging was introduced.

Twenty-eight days after that, on March 27, 2013, then-Gov. Rick Snyder signed the funding bill, shoveling money out the door of the Capitol to ensure big boat hulls could safely navigate the channels of harbors in Frankfort, Grand Marais, Beaver Island and 46 other marinas across the Great Lakes and Lake St. Clair.

If only the current Legislature and governor would respond INEXPLICABLY, NO with such urgency to that are unLAWMAKER FROM freeways derwater far too often.

WAYNE COUNTY Democratic Gov. HAS PUBLICLY OR Gretchen Whitmer’s administration on PRIVATELY Wednesday asked SOUGHT FUNDING the Republican-controlled Legislature for FOR BACKUP about $66 million to GENERATORS. install backup generators at pumping stations along metro Detroit’s flood-prone freeways.

Some 40 of these pumping stations lost power and were unable to pump water out of cavernous freeways last June during a storm that dumped 6.5 inches of rain over 12 hours.

Countless vehicles were stranded in several feet of water, their engines likely ruined.

Chad

LIVENGOOD

A similar breakdown in this critical infrastructure occurred during an August 2014 storm that flooded long stretches of the bathtub that is I-696 (plus thousands of basements along that corridor).

Last June, a section of westbound I-94 in Detroit — one of Michigan’s most critical corridors for the flow of goods and people getting to work — was closed for several days as a result of flooding damage that needed repair.

The Michigan Department of Transportation responded by requesting a grant from the Federal Emergency Management Agency to buy the backup generators necessary to ensure the pumps still run when DTE Energy Co.’s electricity supply is interrupted.

MDOT is still waiting on that request, department Director Paul Ajegba told Crain’s last week.

But, despite Michigan’s coffers overflowing with billions of dollars in federal stimulus and surplus funds, MDOT never asked the Legislature directly for the money last summer after the calamity of freeway flooding made national news, showcasing yet another failure of Michigan infrastructure.

NATHAN DENETTE/THE CANADIAN PRESS VIA AP

DANIEL SAAD FOR CRAIN’S DETROIT BUSINESS

C

anadian truckers have brought their pandemic protests to the U.S. border and as the situation persists, Michigan manufacturers are watching closely, and we urge swift resolution to prevent further disruption John Walsh is to the free flow of people president and and goods between our CEO of the nations.

Michigan Many of the Michigan Manufacturers Manufacturers AssociaAssociation. tion’s members throughout the state have reached out to us about the blockade, seeking information and sharing a general concern — a concern that has grown with each passing hour.

In this world of “just-in-time” deliveries and precisely tuned supply chains, even a day or two of delay can be costly and troublesome. Plant closures and temporary layoffs have already occurred, stressing an already challenged supply chain. As the situation at the border persists, our concerns grow and the economic impact of this requires action.

We have been in personal contact with Gov. Gretchen Whitmer and Ontario Agent General Earl Provost, as well as the offices of Sen. Gary Peters and the Michigan Department of Transportation. I am encouraged that, without exception, each of these leaders is actively engaged and working with every entity of jurisdiction at the local, provincial, state and federal levels to clear the backup at the Ambassador Bridge and in other areas of vital importance to international commerce.

The relationship between Michigan and Canada is crucial to economic security on both sides of the border and the corridor that runs between Detroit and Windsor is

vitally important to the Michigan manufacturing base — to the automakers as well as the many other manufacturing subsectors that make up Michigan’s diverse industry.

Our industry delivers the largest portion of gross state product and supports more than a half million workers.

Michigan exports $17.3 billion in goods to Canada annually and we import $33.3 billion from Canada. While all citizens should be free to exercise their right to express their disagreement with government policies, each day this protest continues to prevent crossings at the border in Detroit/ Windsor, the more our respective economies will be damaged.

It is our hope is that those involved with the protest and the Canadian government can resolve their differences quickly and that any further public demonstrations take IT IS OUR HOPE IS place in a manner that permits the hun- THAT THOSE dreds of millions of INVOLVED WITH dollars in manufactured goods and raw THE PROTEST AND materials that flow THE CANADIAN across the bridge daiGOVERNMENT ly to resume.

M a n u f a c t u r e r s CAN RESOLVE have persevered in the face of unimag- THEIR inable challenges DIFFERENCES over the past two years. Despite a pan- QUICKLY demic, government-ordered shutdowns, workforce upheaval and historic supply chain disruptions, Michigan manufacturers continue to grow, create jobs and make transformational investments in communities large and small, in both of our beautiful peninsulas.

To support the continued economic recovery of Michigan, our nation and our Canadian partners, we urge a rapid solution to the troubling breakdown of commerce at our shared border.

See LIVENGOOD on Page 15

MORE ON WJR  Crain’s Executive Editor Kelley Root 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.

Truckers and supporters block the access leading from the Ambassador Bridge, linking Detroit and Windsor, as truckers and their supporters continue to protest against the COVID-19 vaccine mandates and restrictions in Windsor on Wednesday.

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8 | CRAIN’S DETROIT BUSINESS | FEBRUARY 14, 2022

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2/11/2022 10:01:14 AM

OTHER VOICES

Male leaders need to advocate for women in the workplace

BY JOSEPH FADOOL AND TERRY BARCLAY

The competition for talent is always front of mind but never more so than in the past few months.

The pandemic has taken its toll on everyone, but more so on womTerry Barclay is en and especially president and CEO of Inforum. women of color, which is why we are asking male leaders at all levels to focus on advocating for women in their companies.

Why men? Because men hold more leadership positions — 92 Joseph Fadool is percent of Fortune vice president of 500 CEOs are men, BorgWarner Inc. as are 94 percent of S&P 500 and and president Michigan public and general companies. More manager of broadly, women BorgWarner consistently repreemissions, thermal, and sent about half of turbo systems. entry-level positions but hold only about one in four SVP and C-suite positions, according to the 2021 Lean In-McKinsey Women in the Workplace report. The falloff is steeper for women of color.

As executive leaders at a Fortune 500 company and a nonprofit focused on women in the workforce, we take this disparity seriously. So we and other senior corporate leaders interested in bolstering the talent pipelines have collaborated to understand this issue more fully.

Here’s what we’ve learned: Research has shown that senior leaders need to frequently and visibly champion inclusive workplaces and provide training to create an inclusive

culture. That’s essential. But it’s not up of female colleagues to others including introducing them to your netenough. Male advocacy efforts need to take work. place throughout companies — not EFFECTIVE LEADERS KNOW THAT just at the top.

Male advocates LEARNING TO ASSESS AND VALUE THE need to be leaders ENTIRE TALENT POOL IS NOT JUST AN at many levels — dubbed the “mag- EXERCISE IN HITTING DIVERSITY NUMBERS ic middle” by one — IT’S AN INVESTMENT IN THE FUTURE. executive — because that’s where everyday activities have the greatest Build inclusive practices that ensure all voices are heard and considered in impact.

Important additions to those every- every meeting. Provide greater career transparency day practices: Advocating on behalf of and building for all employees — What does it take to

build a career to the C-suite? Women are less likely to be coached on which career paths are more likely to lead to senior positions, but not all men understand this either. Internal and cross-company best-practice exchanges and experiences for increasing opportunities for women to advance. What works? What doesn’t? Set hiring and promotion goals, track outcomes, and hold managers and senior leaders accountable.

Beyond accountability, it’s important to understand that changing behavior is emotional — the data and the business case are important, but building authentic connections takes time.

Best practices like those above and others help bridge the gap between intellectual and instinctive understanding.

Effective leaders know that learning to assess and value the entire talent pool is not just an exercise in hitting diversity numbers — it’s an investment in the future. As one male leader told us: “It has to be well accepted that inclusion and diversity is a business strategy similar to prospecting, similar to product diversification, similar to hedging our portfolio. You have to understand how you leverage people to build the business. Absent that, you’re not progressing in the way that modern leaders need to be progressing. You will be left behind.”

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2/11/2022 9:39:43 AM

CRAIN’S MICHIGAN BUSINESS: INFRASTRUCTURE

A 5G cell tower developed by Brighton-based Aradatum

With federal fund allotted for broadband, attention turns to other factors in digital divide | BY NICK MANES Experts in the field of broadband in-

ternet access say they see a point in the not-too-distant future in which the state’s so-called “digital divide” has largely been bridged.

But that moment, when it happens, is far from the end of the work.

With nearly one-third, or about 1.25 million Michigan households, lacking a permanent, fixed internet connection at home, experts say the expected money from the federal Bipartisan Infrastructure Investment and Jobs Act passed last summer — likely upwards of $1 billion for Michigan alone for broadband connectivity — will go a long way toward bringing that number down.

But the physical infrastructure is just one piece of the puzzle, according to Eric Frederick, executive director of the nonprofit Connected Nation Michigan, an advocacy organization for broadband access around the state. Addressing more systemic issues, such as internet affordability for lower-income households and teaching digital literacy will remain challenges for years to come.

10 | CRAIN’S DETROIT BUSINESS | FEBRUARY 14, 2022

“Infrastructure is not an easy thing to solve,” said Frederick.

“But it’s a lot more black and white than the issues of affordability and devices and digital literacy. Like, those are just much messier to solve.”

Indeed, Joshua Edmonds, the director of digital inclusion for the city of Detroit, notes that the digital divide is not monolithic and that the issue of connectivity is different in a rural part of the state compared to a city like Detroit, where upwards of 35 percent of the population lives in poverty.

“I’m not having a conversation about the metaverse with a (Detroit) resident coming home to (low-speed) DSL internet,” said Edmonds, referring to the emerging immersive virtual reality technology.

The ultimate goal for Detroit, Edmonds said, is to address some of those systemic issues through a municipally owned fiber internet infrastructure the city plans to de-

“I’M NOT HAVING A CONVERSATION ABOUT THE METAVERSE WITH A (DETROIT) RESIDENT COMING HOME TO (LOW-SPEED) DSL INTERNET.” — Joshua Edmonds, the director of digital inclusion for the city of Detroit

velop in the coming years with federal relief dollars. Much of that work remains in the planning stages, said Edmonds, who noted the city would not operate the utility.

Edmonds declined to provide a cost for the proposal at this time, saying those details would be further outlined in the coming months, but said he believes there will be a pilot program up and running later this year.

Defining the problem The Michigan Broadband Roadmap, done by the state’s Office of

High Speed Internet and released last year, lays out the issue of the lack of connectivity in fairly stark terms: Nearly 35 percent of households earning less than $20,000 annually (197,000) do not have a broadband connection.

More than 22 percent of residents age 65 and older (395,000) do not have broadband at home.

Black and Latino Michiganders are nearly half as likely to have a home broadband connection than non-Black or Latino residents.

See DIVIDE on Page 11

ARADATUM

CONNECTION IS THE EASY PART

CRAIN’S MICHIGAN BUSINESS | INFRASTRUCTURE Where broadband is lacking

DIVIDE

From Page 10

 Connecting currently disconnected Michigan households is estimated to produce $1.8 billion to $2.7 billion in annual economic opportunity, according to a 2012 study cited in the Broadband Roadmap report.  Coming out of the COVID-19 pandemic, companies expect the number of employees working from home to triple from pre-pandemic times, according to a 2020 survey by the Atlanta branch of the Federal Reserve.

“Lack of broadband impairs residential and commercial development in many areas of Michigan, including those that have typically been defined as ‘vacation’ properties, tourist destinations, and other smaller rural areas and towns,” reads the state’s report, which includes data points from a variety of sources, including the U.S. Census and the Federal Reserve.

Statewide push Expanding broadband access has increasingly become top of mind for a host of Michigan policymakers, advocates and broader industry groups, who all see reliable internet connectivity as part of a comprehensive economic development strategy.

And the efforts are mounting from all corners of the state. Take, for instance, the Homebuilders Association of Michigan.

Dawn Crandall, the association’s executive vice president of government relations, said that the organization has been forced to look beyond its standard mission of advocating for homebuilding, and take a more “holistic” view, which includes ensuring

Many areas of Michigan lack internet service that can meet the needs of today’s connected world. 25Mbps/3Mbps is considered the slowest “broadband” service, but experts say 100x10Mbps is the speed that can meet needs into the near future.

Unserved Household, density per square mile

Areas lacking faster broadband (100/10 Mbps):

Greater than 100 51-100 11-50 2-10 >0-1 Zero houshold area

SOURCE: CONNECTED NATION

nies tend to avoid, said Leete.

“Because we’re self-powered, we can immediately drop the tower in (those remote areas), giving people the broadband connectivity they’re looking for,” said Leete. “So there’s a lot of opportunity.”

Aradatum has partnered with Livonia-based Roush Industries and MAHLE Powertrain LLC in Plymouth for manufacturing and engineering of the towers.

Also on the state government front, Gov. Gretchen Whitmer, a Democrat,

“BECAUSE WE’RE SELF-POWERED, WE CAN IMMEDIATELY DROP THE TOWER IN (THOSE REMOTE AREAS), GIVING PEOPLE THE BROADBAND CONNECTIVITY THEY’RE LOOKING FOR.” — Larry Leete, founder, Aradatum

reliable broadband access.

That’s become especially true as new home construction has pushed into more outlying areas where connectivity is often an issue, and the pandemic and the need to work remotely have only reinforced the importance, according to Crandall.

“It used to be that we looked at housing as kind of a single issue,” Crandall said. “We need more housing. But there are a lot of things that play into that as we look at the economic development needs in the state.”

Other private-sector players also see ample opportunity to capitalize on the push for greater broadband connectivity as well.

Enter Aradatum Inc., a Brighton-based startup launched last year that has so far raised $15 million in growth capital from a variety of private investors. The startup has plans to deploy 5G high-speed wireless telecommunications towers in some of the country’s most remote areas, such as an island in Maine, according to founder Larry Leete.

The roughly 150-foot-tall towers the company is developing include a wind turbine that allows for them to be self-powered. That allows the company to access remote areas that large telecommunications compa-

Areas lacking “bare bones” broadband (25Mbps/ 3Mbps):

last summer created the state’s HighSpeed Internet Office, aimed at making “high-speed internet more affordable and accessible.”

The executive directive handed down by Whitmer calls for the hiring of a full-time chief connectivity officer for the state. The position, as well as the overall office, however, has gone unfunded by the Republican-controlled state Legislature.

Housed within the state’s Department of Labor and Economic Opportunity or LEO, the staff position has been contracted out to the Connected Nation Michigan organization on a temporary basis.

Susan Corbin, LEO’s director, said in an email that the department “has been working with the legislature to make significant broadband investments and we are committed to removing barriers in high-speed internet availability, affordability and adoption for disproportionately impacted communities of color, those in rural areas, and low-income households.”

High speed in the UP Perhaps not surprisingly, Michigan’s Upper Peninsula, with its large swaths of rural landscape, stands as one of the least-connected parts of the state.

Like others, Scott Randall said he’s hopeful that could soon change.

The general manager at Marquette-based fiberoptic company Peninsula Fiber Network LLC said his company has been investing tens of millions of dollars in fiber infrastructure in the state’s UP region and neighboring Wisconsin.

Like Frederick with Connected Nation Michigan, Randall said he believes the state is inching toward the bridging of the digital divide. For the UP region, that means further good news for its economic development efforts. “(The UP) is a pretty unique part of the world. We love the outdoors and the clean air and all the water, and we’d like more people to be able to share that with us,” said Randall. “But I think for some folks, not being able to have broadband, it’s a big consideration. So this grander effort that’s in play, I think could really help tourism and maybe people considering relocating up here that maybe would not have thought about it before.”

For Edmonds, the director of digital inclusion for the city of Detroit, the issue really boils down to just a handful of basic principles, he said.

“We need to be able to get lower-priced internet and we need to get an internet that people will legitimately want to enroll in, and not nec-

essarily just had to choose between two options,” he said. “So we want choice, we want competition and we want lower costs. That’s what’s north for us, and quite frankly, that’s what should be north for the state.”

Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

GRIT: STORIES OF GREATNESS FROM THE STREETS TO THE SUITES SPECIAL GUEST

Going forward The federal infrastructure bill passed last summer totals $550 billion in new investment, which includes about $65 billion for highspeed internet access.

Specific allocations for states and cities is still being determined, but Frederick said he expects for Michigan to see somewhere between $1 billion and $1.3 billion for its broadband efforts.

“There’s been a lot thrown around about the infrastructure act and that it’s a once-in-a-generation investment, but I truly think it is,” said Frederick, noting that the money in that legislation is 10 times the amount included in the 2009 stimulus package passed in the wake of the Great Recession.

“And I honestly believe that we have an opportunity to close the digital divide in the state — or at least getting very, very, very close to closing it — over the next 10 years,” Frederick added. “But it has to be done efficiently and effectively and transparently in order to be able to truly use these resources to close that gap.”

Mario Nanos, President, Washtenaw FAN

Watch for the latest episode of Grit coming Feb. 21 on Apple Podcasts and Spotify.

HOST

Margaret Trimer, Vice President of Strategic Partnerships at Delta Dental

FEBRUARY 14, 2022 | CRAIN’S DETROIT BUSINESS | 11

COURTS

EDUCATION

StockX sued by Nike over entry into NFT sector

Larry Bell gives $5.25M to Kalamazoo College

Popularity of digital assets has skyrocketed

BY NICK MANES

The recent entry by StockX LLC into the emerging market of the digital assets known as NFTs is quickly being met with litigation by one of the world’s most identifiable brands.

Sneaker behemoth Nike Inc. has sued the Detroit-based reseller of trendy footwear and other lifestyle items, alleging that its announcement last month, and more specifically, actions since, violate Nike’s well-known trademarks.

NFTs, which is short for nonfungible tokens, are essentially digital “signatures” that can be tracked using blockchain technology to show ownership of a digital file such as a piece of artwork, or of physical goods. Their popularity has skyrocketed along with valuations of tokens.

The lawsuit states that the Oregon-based Nike has not given any authorization or approval to StockX for use of its trademarks, such as the famous ‘Swoosh’ logo.

However, Nike alleges that “StockX is ‘minting’ NFTs that prominently use Nike’s trademarks, marketing those NFTs using Nike’s goodwill, and selling those NFTs at heavily inflated prices to unsuspecting consumers who believe or are likely to believe that those ‘investible digital assets’ (as StockX calls them) are, in fact, authorized

by Nike when they are not.”

A spokesperson for StockX said

in an emailed statement that the lawsuit “lacks merit and is based on a mischaracterization of the service” it offers.

“Our Vault NFTs depict and represent proof of ownership of physical goods stored in our vault that customers can trade on our platform. StockX Vault NFTs are not digital or virtual sneakers. We do not state or imply that our Vault NFTs are associated with, sponsored by or officially connected to any third party brand,” the company said in the statement. “StockX undoubtedly has the right to provide our customers with this new and innovative approach to trading current culture products, and we plan to vigorously defend our position.”

The lawsuit, which seeks a jury trial, asks for — among other things — that Nike be awarded profits StockX has earned as part of its NFT initiative.

NFTs have skyrocketed in popularity in recent months, and companies including StockX and Nike have sought to capitalize on the craze.

Late last year Nike made its entry into the market with the acquisition of RTFKT, an NFT company.

As NFTs have risen in popularity, so too have lawsuits tied to their use, according to a recent Reuters report.

StockX’s initiative uses NFTs tied to physical products that sneaker traders can buy and sell instantly using blockchain technology to en-

AUTOMOTIVE

BY DUSTIN WALSH

NFTs in StockX’s “vault” | SCREENSHOT

sure authenticity. Buyers will own the token and the corresponding sneakers and may have them delivered at any time, or they can choose to let StockX hold onto the physical goods while they “trade” the token like a stock.

Nike’s lawsuit states that company’s objection to the NFT business is because “nearly all the NFTs minted by StockX to date are Nike-branded NFTs, yet none of those NFTs originate from Nike.”

Whereas with StockX’s traditional reselling business, the goods originate from a variety of companies, according to the lawsuit.

StockX has said that Nike is by

far the largest brand for sneaker sales on its platform, and that Nike shoes trade at an average of 54 percent above retail value.

Last April, StockX announced $255 million in new investment at a valuation of $3.8 billion.

Nike (NYSE: NKE) meanwhile, has a total market capitalization of nearly $227 billion. The company is reported to be in talks to acquire troubled fitness company Peloton.

— Bloomberg contributed to this report.

Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

Larry Bell, former owner and CEO of Bell’s Brewery Inc., gave $5.25 million to his alma mater Kalamazoo College, the institution announced last week.

Bell The funds will be divvied up between the Center for Environmental Stewardship, a distinguished chair position in American history, food and justice sustainability programming as well as the existing Larry J. Bell ’80 Endowed Scholarship and the Kalamazoo College Fund.

Bell graduated from Kalamazoo College in 1980, just five years before he founded Bell’s Brewery.

The gift is the first philanthropic endeavor since Bell sold his brewery to Australian brewing conglomerate Lion Little World Beverages, which also owns Fort Collins, Colo.-based New Belgium Brewing Co. The deal also includes the sale of Escanaba-based Upper Hand Brewery, which Bell’s Brewery founded in 2014.

Terms of the deal were not announced, but are estimated in the hundreds of millions of dollars.

AUTOMOTIVE

Shyft Group to roll out EV van next year

BY RICHARD TRUETT

American Axle is broadening its traditional portfolio of old-style heavy-duty axles and driveline components. | AMERICAN AXLE VIA TWITTER

American Axle invests $15M in VC firm in electrification push

BY JOHN IRWIN

Automotive supplier American Axle & Manufacturing Holdings Inc. said it invested $15 million in Silicon Valley venture capital firm Autotech Ventures, as the Detroit-based company looks to boost its electrification business.

American Axle said in a Wednesday statement that its investment gives the company exposure to startups that are working in electrification, connectivity and autonomous technology. The supplier said it will seek opportunities to partner with those companies to complement its existing electrification and mobility business.

“AAM and Autotech share a commitment to developing the next generation of mobility companies focused on electrification and growth,” American Axle

CEO David Dauch said in the statement.

The investment comes as established suppliers and automakers increasingly look to partner with tech startups and other newcomers to the industry to leverage their technology and expertise.

Autotech Ventures describes itself as an early-stage venture capital firm with a focus on companies dedicated to “solving ground transport challenges related to connectivity, autonomy, shared-use, electrification and digitization of enterprise.” Autotech Ventures said it is generally willing to make initial investments in companies of between $1 million and $8 million, and it has more than $400 million under management today, the statement said.

From Automotive News

The electric delivery van segment will get another new entry in about 18 months from a Novi-based company.

The Shyft Group, formerly Spartan Motors, on Tuesday said it will build a turnkey electric delivery van for fleet customers that should be ready to roll by mid-2023.

Spartan — which got its start in Michigan in the mid-1970s building fire trucks, then blossomed into a large manufacturer of truck bodies, RV chassis, delivery vehicles and other work trucks — changed its name to Shyft Group in 2020, the year it sold its fire truck business. It’s now based in Novi.

In 2020, the company booked $676 million in sales. It has plants and other operations in 10 states and Mexico. The new van, which will be unveiled next month at an industry trade show in Indianapolis, will be the company’s first turnkey vehicle since its fire truck days.

CEO Daryl Adams said the company is using its own in-house designed electric chassis that will be driven by an electric axle purchased from a supplier. Shyft engineers are designing the power electronics and are working with a supplier to develop the software. Batteries, Adams said, will be purchased from a supplier. The estimated range between charges for the walk-in delivery van is 150-175 miles. Testing is scheduled to begin this year.

Shyft Group’s EV chassis and CEO Daryl Adams.

“We were looking around [the industry] for around two years to find an [EV] chassis. We were hoping we could find someone who had a chassis we could use,” he said.

“What we found was that many of these startups had great PowerPoint presentations. We went through them — we discovered they needed a lot of money to build them. We said we have almost 50 years of chassis- and body-building experience. Companies are coming out with e-axles and batteries. All we were missing was the operating system for the vehicle.”

Shyft’s chassis has been designed

to be manufactured in several sizes, so the company can offer Class 3 fleet customers different-sized vehicles. The company is designing the body in-house.

Adams said the Shyft will build the van in a dedicated EV plant. He would not say how much the new electric van will cost. But, he said, it will initially be more expensive than a traditional gasoline or diesel van.

However, fleet operators could see their overall costs ultimately be lower because of government EV incentives and lower maintenance costs.

From Automotive News

12 | CRAIN’S DETROIT BUSINESS | FEBRUARY 14, 2022

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NONPROFITS

Davidson Foundation awards $6.5M to two arts organizations Detroit Institute of Arts receives $5M grant; Detroit Symphony Orchestra receives $1.5M grant

BY SHERRI WELCH

The William Davidson Foundation has committed $6.5 million in grants to two prominent Detroit arts organizations.

The Detroit Institute of Arts has been awarded a $5 million grant and the Detroit Symphony Orchestra a $1.5 million grant, according to the foundation.

The grants were made in honor of the late Byron “Bud” and Dorothy Gerson, the brother-in-law and sister of the late William Davidson.

The couple supported both institutions during their lifetimes, like Davidson, who was president and CEO of Guardian Industries Corp. and the owner of the Detroit Pistons and Detroit Shock basketball teams and the Tampa Bay Lightning hockey team.

The new grants “are a reflection of both family and foundation priorities,” said Ralph Gerson, treasurer and director of the William Davidson

Dorothy and Byron Gerson

Foundation and the couple’s son, in a release.

Gerson also serves as vice chair of the DIA board and officer at large on the DSO’s board.

“My mother and my uncle had a very close relationship throughout their lives, going back to their time growing up as children living in the city of Detroit. Together, they were introduced to world-class art, music, and creative talents beginning at a young age. It was important to them that families across the region enjoy

similar experiences for generations to come.”

Dorothy Gerson, who died last year at the age of 99, was a longtime board member of the DIA. She and her husband, who died in 2013, were active members of the museum for more than 40 years and donated numerous objects to the DIA’s permanent collection in addition to providing financial support, Salvador Salort-Pons, director, president and CEO of the DIA, said in the release.

The $5 million grant will support the DIA’s American Art department and its curator, named the Byron and Dorothy Gerson Curator and Department Head of American Art, in honor of the grant.

The grant will also establish a new lecture series that will bring prominent speakers knowledgeable about 20th and 21st century American art to Detroit for free events to benefit the DIA and metropolitan Detroit communities.

SPORTS BUSINESS

A member of the DSO’s development committee, Dorothy Gerson, along with her husband, was an active fundraiser for and patron of the orchestra.

The $1.5 million grant will support the DSO’s efforts to attract and retain notable musicians and support education and youth programs. In recognition of the support, the DSO’s principal bassoon position will also be named for the couple.

“My father and my aunt grew up going to youth concerts at the DSO, which created memories that lasted for their lifetimes,” said Ethan Davidson, grants committee chair and director of the foundation, in the release.

“Our family and foundation’s commitment to music in Detroit spans three generations of our family and we want to maintain that in my aunt’s memory.”

Beyond the hundreds of millions of dollars in grants made to support eco-

nomic development and quality of life in Michigan and the Jewish community and state of Israel, the Willliam Davidson Foundation has emerged as a significant supporter of arts and culture in Southeast Michigan.

In the more than 16 years since it began operating, it has provided more than $55 million in funding for arts and culture groups in the region and $25 million to the “grand bargain” that shored up Detroit pension funds and enabled the DIA and its world-renowned collection to spin off from the city.

Its most recent grants to the DIA and DSO follow a $5 million grant made to the Michigan Opera Theatre in November to support innovative programming with other U.S. opera companies and its ongoing modernization efforts at the Detroit Opera House.

Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

HEALTH CARE

Mary Ann Van Elslander gives millions to Ascension St. John Children’s Hospital Gift supports ‘Your Child, We Care’ campaign

BY DUSTIN WALSH

The Rocket Giving Fund raised more than $1.35 million during the 2021 Rocket Mortgage Classic golf tournament at the Detroit Golf Club event to support local nonprofits. | ROCKET MORTGAGE

Rocket Mortgage Classic raises $1.35M to help bridge digital divide, other efforts

BY CRAIN'S DETROIT BUSINESS

The nonprofit that manages the Rocket Mortgage Classic raised more than $1.35 million last year through the third annual PGA Tour event in Detroit.

The Rocket Giving Fund announced Thursday that $805,000 of those funds were put back into partner organizations with the Changing the Course initiative, which is working to end Detroit’s digital divide.

In 2020, about 40 percent of Detroit households were “digitally included.”

That number has grown to 67.5 percent. A digitally included household means at least one member has a reliable broadband connection, a working non-smartphone computer/tablet and know how to use it.

“It is our passion to use the Rocket Giving Fund as a force for change and an opportunity to bridge Detroit’s digital divide,” said Jay Farner, CEO of Rocket Companies Inc. (NYSE: RKT) and the chairman of the Rocket Giving Fund. “The success of Changing the Course is measured by the number of Detroit families who are now able to access the internet as well as the brighter future digital inclusion provides.”

The Rocket Giving Fund disbursed funds in 2021 for Changing the Course recipients Connect 313 Fund, which received $700,000; Children’s Foundation — which acts as a fiduciary for Midnight Golf, Detroit Police Athletic League and First Tee Greater Detroit — received $100,000; and Human-I-T received $5,000.

Rocket Mortgage invested $400,000 through the Rocket Mortgage Classic’s Area 313, or holes 1416 at the Detroit Golf Club. Called “the most charitable three holes in golf,” players who scored a 3 on Hole 14 (an eagle) or a 3 on Hole 16 (a birdie) triggered a $5,000 donation to Changing the Course. Golfers who scored a hole-in-one on Hole 15 generated a $25,000 donation.

The Connect 313 Fund was founded through the 2020 Rocket Mortgage Classic and is rooted in the city of Detroit’s digital inclusion strategy. These efforts include training residents on how to use their new tools and giving them information they need to become educated users.

Connect 313 launched an awareness campaign, EBB 313, in 2021 with a goal of connecting Detroit households

to the Emergency Broadband Benefit, a federal program that subsidized the cost of internet and technological devices for eligible households. During that campaign, more than 82,500 Detroit households were connected, or about 30 percent of all households in the city. The program has since been replaced by the Affordable Connectivity Program.

The Rocket Giving Fund also made disbursements to Greater Palmer Park Community, which received $109,828, and Birdies for Charity, which received $437,169.

“The success of the 2021 Rocket Mortgage is an incredible platform to increase digital inclusion for Detroiters in every neighborhood,” said Laura Grannemann, vice president of the Rocket Community Fund, the philanthropic partner of Rocket Companies, and a Rocket Giving Fund board member.

The PGA Tour and Rocket Mortgage in September announced an extension of the title sponsorship for the Rocket Mortgage Classic through 2027. The fourth annual tournament is scheduled for July 25-31 at the Detroit Golf Club.

The Ascension St. John Children’s Hospital wing will soon don another Van Elslander sign.

Mary Ann Van Elslander, philanthropist and wife of the late Art Van Furniture founder Art Van Elslander, made a “multi-million dollar” gift to the hospital in Detroit.

The health system declined to reveal the exact sum donated.

The gift supports the hospital’s “Your Child, We Care” campaign and bring its total to $18 million, the system said in a news release.

The funds will be used to expand the hospital’s inpatient pediatric unit and create a dedicated entrance for women and children at the hospital.

The new entrance will be named The Van Elslander Women’s and Children’s Entrance and allow expectant mothers and their children to enter the hospital without having to go through the emergency de-

partment in view of trauma patients.

The pediatric inpatient unit will also be renamed The Mary Ann Van Elslander Pediatric Unit.

Van Elslander, a mother of 10, was a frequent volunteer in the hospital’s pediatric unit and she previously gave funds to create the Mary Ann Van Elslander Neonatal Intensive Care Unit.

“My passion has always favored the well-being of babies and children,” Van Elslander said in the release. “Having been blessed with a large family, I am delighted to support Ascension St. John Children’s Hospital, which has done a wonderful job serving our community’s families and will do so for generations to come.”

The pediatric unit expansion will also create a dedicated pediatric emergency center.

The expansion is expected to begin in the spring.

Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

Ascension St. John Hospital in Detroit. | STEVE MAYLONE FEBRUARY 14, 2022 | CRAIN’S DETROIT BUSINESS | 13

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PEOPLE ON THE MOVE

Advertising Section To place your listing, visit crainsdetroit.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

ACCOUNTING

AUTOMOTIVE

HEALTHCARE

NONPROFIT

TECHNOLOGY

Gordon Advisors, P.C.

Ziebart International Corporation

Health Alliance Plan (HAP)

Make-A-Wish Michigan

ChoiceTel

Health Alliance Plan (HAP) has named Archana Rajendra vice president and deputy general counsel. In this role, she oversees and provides strategic direction on all regulatory affairs and legal matters that impact the organization, including managing HAP’s in-house legal department and its related functions. She holds a J.D. from Indiana University School of Law and has more than 25 years of professional experience serving in highly regulated industries.

Make-A-Wish® Michigan recently welcomed Michael Hull as the new president & CEO. A dynamic leader with a strong record of success, Michael brings a wealth of nonprofit and leadership experience to his new role. He most recently served as Executive Director of the Great Lakes Region for ALSAC/St. Jude’s Children’s Research Hospital. Michael is a leader of high integrity who brings strategic vision and a commitment to ensuring that all eligible children have equitable access to the mission.

ChoiceTel is pleased to announce that Michael Vail has joined the team. As a Sr. Customer Success Manager, Michael is focused on customer lifecycle management, serving as a trusted advisor tasked with pairing solutions to key business objectives, and acting as an escalation point with telecom & technology providers. Since 1994, ChoiceTel has been helping mid-market to enterprise clients select, manage & ensure their telecommunications/IT products and services are clearly meeting their needs.

Scott D. O’Rourke, CPA, M.S.T., was promoted to Shareholder at Gordon Advisors, P.C. Scott joined the firm in 1998 and thrives in the accounting and auditing department. With over 20 years of experience, he provides support in an array of industries including manufacturing, construction, wholesale distribution and service businesses. Scott is a member of MICPA and AICPA.

Ziebart International Corporation, the leading provider of vehicle appearance and protective services, just announced the promotion of Larry Stewart to Vice President of Information Technology. In Stewart’s new role, he will oversee the development and rollout for all of Ziebart’s information systems, including monitoring the security of the company’s private information. Stewart’s years of technological experience will help lead the brand’s internal and external innovation strategies.

ACCOUNTING

AUTOMOTIVE

Gordon Advisors, P.C.

Ziebart International Corporation

Hannah Thoms, CPA, M.S.F., CFP®, was promoted to Shareholder at Gordon Advisors, P.C. and specializes in the areas of estate, tax and personal financial planning. She has over 20 years of experience assisting clients in developing strategies to meet their financial planning objectives, while saving current tax dollars and minimizing future tax implications. Hannah is a member of AICPA, MICPA and FEPCMD.

Ziebart International Corporation, the leader in vehicle appearance and protective services, announced the promotion of Naji Younes to Vice President of International Business Development. Starting as a business consultant before moving into a director position, Younes recently sold nine new master franchises – increasing Ziebart’s reach internationally. In his new role, Younes will work to expand the franchise into new markets amid great industry growth despite the current auto chip shortage.

SHARE YOUR COMPANY’S JOURNEY LAW

PROFESSIONAL SERVICES

Foley & Lardner

Aon

Nicholas Ellis is a supply chain attorney with Foley & Lardner LLP. Nicholas’ practice focuses on manufacturing, supply chain and automotive matters, including the Uniform Commercial Code (UCC). He routinely counsels clients in the US and elsewhere on a variety of commercial contract matters and supply chain disputes, including warranty claims, force majeure, commercial impracticability, terms and conditions, and other commercial agreements.

Darrin Eaton has joined the Aon Michigan team as an account executive. In this role, Darrin partners with clients to create customized long-term benefits strategies. He helps clients take more control of their healthcare expenses, including employee satisfaction and improving the health of their organization. Darrin has over 27 years of health and benefits advisory and consulting experience, including 10 years with Blue Cross Blue Shield of Michigan.

Feature your latest milestones, launches, partnerships, awards and more in Crain’s

FINANCIAL SERVICES ACCOUNTING

Gordon Advisors, P.C. Christine M. Tudrick, CPA, was promoted to Shareholder at Gordon Advisors, P.C. She joined the firm in 1999 and has over 30 years of experience providing accounting, tax and consulting services to clients in a variety of industries. She has a passion for helping small business owners achieve success by being their trusted advisor. Ms. Tudrick is a member of AICPA and MICPA.

Stifel Nicolaus Howard Margolis, AIF®, CTFA has joined Stifel’s Southfield office as Senior Vice President/Investments and Portfolio Manager – Solutions Program. A financial advisor since 1987, he helps his clients pursue their financial goals by building customized, agile plans designed to help them grow, manage, and protect their wealth. He is a Michigan State University graduate and holds the Accredited Investment Fiduciary® and Certified Trust and Fiduciary Advisor designations.

14 | CRAIN’S DETROIT BUSINESS | FEBRUARY 14, 2022

NONPROFIT

PROFESSIONAL SERVICES

Downtown Detroit Partnership

Aon

The Downtown Detroit Partnership welcomes Soula Burns as Director of Corporate Partnerships.

She brings more than 25 years of sales and events experience and has represented some of Detroit’s premiere professional sports brands throughout her career. In this position, she will play an integral role in supporting the organization’s growth and Detroit’s transformation as a destination for corporate events and family-friendly activities.

Chris Hieftje has joined the Aon Michigan team as an account executive. In his new role, Chris works with clients to understand their unique business and risk management needs while engaging Aon resources to ensure client satisfaction. Prior to joining Aon, Chris was the risk manager for Meijer, Inc. in Grand Rapids, where he also worked with Meijer’s affiliated company, Fresh Thyme Market. Chris earned a Bachelor’s degree from Calvin University in Business.

For more information, contact Debora Stein at dstein@crain.com or submit directly to CRAINSDETROIT.COM/COTM

year Chugga’s is open at its new location. She declined to disclose current sales and revenue.

Chugga’s sells at Holiday Market in Royal Oak and the two small-format Meijer stores in the region, Woodward Corner Market in Royal Oak and Rivertown Market in Detroit.

Bell is in talks to sell a wider range of her products at more Meijer locations, but it’s not finalized and she’s not sure of a specific number.

Chugga’s has participated in a host of grant programs and competitions, including making it to the semifinals in 2016’s Hatch Detroit competition and getting in-kind business assistance through Motor City Match.

BAKER

From Page 3 “The goal is to empower communities, empower Black and Brown folks to have a fair stake in the food system,” Jones said. “Much of the work around food generally does not allow Black and Brown faces to get the funding, to get the resources, to get the support so what we’re trying to do here is create that foundational piece.”

Accommodating growth Bell and Mitchell need more space, time and capacity to fill their growing orders. Right now they have to turn down some requests for Chugga’s 20 flavors of its signature braided monkey bread, plus bean pie, peach cobbler and other goods.

Mitchell says, for example, they used to make dinner rolls for the DoubleTree Suites hotel downtown. He wants to get back to other large customers like that.

“We knew we couldn’t produce enough,” he said. “The last thing you want to do is take on a client when you can’t supply what they need.”

That’s where vacant, city of Detroit-owned property comes in.

Detroit City Council last month approved Bell’s purchase of a space at 435 W. Seven Mile Road for $1,000. The aqua-painted brick storefront is half of a shuttered old bakery called Golden Star. Bell may buy the other half, but no deal is done.

Chugga’s must “clean and secure the property” within six months of the

LIVENGOOD

From Page 8

And inexplicably, no lawmaker from Wayne County has publicly or privately sought funding for backup generators, said Sen. Wayne Schmidt, chairman of the Senate’s transportation appropriations subcommittee.

“What’s frustrating, and I think it stems from the very top, is there’s not a lot of communication — a lot of grandstanding,” said Schmidt, a Traverse City Republican and 13-year veteran of the Legislature. “I’ve said it before and I’ll say it again: A lot of governing by press release. Not a lot of working with people on both sides of the aisle that can get things done.

MI BANK

From Page 3

their banking advisers, but rarely receive.

“I’ve contended for a long time that the people who are really good in our business know the difference between the end of a Kridler transaction and the beginning of a relationship,” he said. “The American Banking Association Journal does surveys all the time with customers of banks, and 88 percent of all customers of banks say they would like a relationship with their bank and with their banker, yet only 12 percent … believe they actually have a relationship.”

One area of focus highlighted by Kridler is helping wealthy families craft their “philanthropic mission.” Too often, he said, people are somewhat blindly financially backing causes with little oversight of what their dollars are

Family tradition Chugga’s Main Street Bakery aims to open a storefront and larger workspace this year, moving from 400 square feet in a shared kitchen at the former Marygrove College campus to buying a 3,000-square-foot vacant city-owned site at 435 W. Seven Mile Road. | ANNALISE FRANK/CRAIN’S DETROIT BUSINESS

closing and earn a certificate of occupancy — one of the final things required to open the business — within 36 months, per the city’s terms of the deal.

The site will need a full renovation, costing around $75,000-$100,000.

Chugga’s will have a kitchen, a packing and shipping area and a small retail section so people can buy directly at the store — they can’t do that right now with the Marygrove shared kitchen setup.

“I am working on some grants and I’m working with a financial institution on getting that under my belt,” Bell said. “It’s a lot of stuff in there that

needs to be cleaned out. So, the funding needs to come like, yesterday. But there was nothing we could do until we had the closing.”

Mitchell, who has experience in demolition, said he’s looking forward to getting to work on the place himself.

They expect some help cleaning it out from volunteers, as well.

Jones, a self-described “lover and supporter” of Chugga’s products, said he’s hopeful the space Bell has finally nabbed will bring her more success.

As of now, Bell’s business is 85 percent wholesale and 15 percent retail, with Mitchell doing deliveries. Bell expects to see $165,000 in sales the first

The baking business is not easy, Mitchell said.

Bell does things the traditional way, with recipes that take more time and money than a large production line would to make a similar product. They have to charge more, too. But the quality is so high in comparison, Mitchell said. He believes in his mother and what they sell.

“This is why you need small businesses that still have some of the old ways,” he said.

Chugga’s is steeped in family tradition — including the name.

Bell, who grew up on Detroit’s east and then west sides, was nicknamed “chubby baby” as an infant. Her brother, who had trouble pronouncing it, said “chugga” instead of “chubby.” The name never really left.

The monkey bread recipe is from

“And I’m a little frustrated by that,” Schmidt added. “Actually, I’m a lot frustrated by it.”

Michigan’s policymakers seem to respond with much more urgency to boats being trapped in the Pentwater Municipal Marina than full-size trucks getting swamped on I-75 in Detroit.

In 2013, during the Great Harbor Dredging Crisis, the Senate voted 35-0 in favor of dredging 49 different marinas and harbors of refuge (one of the senators absent from the vote was then-Democratic Leader Gretchen Whitmer).

“This needs to be completed and done so dredging, in fact, can begin in a timely fashion,” then-Sen. Roger Kahn, chairman of the Senate Appropriations Committee, said at the time.

Even though the Whitmer administration waited nearly nine months to directly ask lawmakers to appropriate money for these generators, MDOT is not completely sitting on its hands.

The agency set aside $10 million in its repair budget to bid out construction and installation of 17 backup generators along metro Detroit freeways that frequently flood, Ajegba said.

“We picked some of the most critical locations, like the I-94 corridor, the M-39/Southfield Freeway corridor and the Lodge freeway by the downtown area that floods a lot by Cobo Hall,” Ajegba said.

Design work for 17 backup generator stations is nearing completion and the projects will then go out to bid by spring, Ajegba said.

“While all of the bureaucratic process is still going on, we know the public will not understand if we have another (flood event),” Ajegba said. “So MDOT took it upon ourselves to keep the wheels in motion.”

But the wheels of government are slower than our ever-changing climate.

The MDOT director acknowledged the 17 backup generators likely won’t be in place until late summer.

Whitmer’s $66 million request to the Legislature for 140 generators is for the 2023 fiscal year that begins Oct. 1. That means, at the earliest, these generators won’t be in place until spring of 2023.

Lawmakers are sitting on a $2.9 billion general fund surplus and don’t need to wait until October.

One of the reasons Michigan has a

actually supporting.

Other areas of focus could be on helping meet aviation needs when necessary, and providing consulting services for cybersecurity. Those areas would likely be handled through partnerships, the executives said.

Launched in the spring of 2019 with $30 million of capital, Mi Bank was the first de novo bank started in Michigan in a decade after the Great Recession dealt a blow to such activity.

A combination of increasing capital requirements mandated by regulators for new banks, as well as sustained low interest rates that put a hamper on profits have made new bank formation a challenge, said Michael Tierney, the president and CEO of the Community Bankers of Michigan trade association.

Crain’s reported last week that a new community bank had been proposed for Oakland County, with a headquarters in Birmingham.

Mi Bank quickly found itself — like everyone else — navigating the pandemic as it began to take hold in the spring of 2020.

The bank put early focus on helping clients obtain forgivable loans under

the Paycheck Protection Program. As of Dec. 31, Mi Bank had funded 400 loans totaling about $44.8 million, according to data the bank supplied to Crain’s. Of those, 299 loans totaling $36.6 million had been forgiven.

Farr, Mi Bank’s chairman and CEO, said the bank ended 2021 with about $185 million in assets and hopes to grow that to around $300 million over the next year or two.

The goal is to become a $1 billion bank, which Farr said Mi Bank will achieve through organic growth and possible acquisitions in markets beyond Southeast Michigan.

But don’t expect to see a Mi Bank branch on your local corner.

“With our focus on business owners and businesses, as opposed to trying to be all things to all people, our business model doesn’t call for a lot of branches,” Farr said. “And even going forward, I think that puts us in a better position because … I thi nk you’re gonna see a lot of closing, unfortunately, of branches, as opposed to opening branches.”

Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

Bell’s grandmother, who Mitchell recalls as having an immensely focused work ethic. “That helped push my mom,” he said.

Bell remembers constantly watching her grandmother bake, peering to see up onto the high counter and nabbing a gob of cookie dough when she could.

As an adult, after her family moved to Los Angeles, Bell began baking while working at gas station company Arco.

As more people tried her baked goods, that transitioned into a wholesale baking gig by 1975 and then she asked her mother and grandmother to join her.

Their bakery supplied Paramount Studios, according to Bell. Her mother also sold Mexican food out of their building.

Later, back in Detroit, it all started again with that mail carrier who tried a half a loaf of bread.

“She came back the next day with another mail lady. She said, ‘We want to get two loaves of bread,’” Bell said .

Her first wholesale account in Detroit was at Harbortown Market on East Jefferson Avenue. She was still baking out of her house, but ended up opening a shop on the east side near Denby High School that she later closed.

“My kids were growing up and I was running here and running there and I couldn’t keep the place open all the time,” Bell said.

Starting her baking back up and getting a storefront has been a “long time coming,” she said. “Everything is a process, so you just have to go through the process, and I think we’re on a road to success.”

Contact: afrank@crain.com; (313) 446-0416; @annalise_frank full-time Legislature and governor is to respond to the needs of the citizenry when they arise — not when the next budget cycle rolls around.

In 2013, the Legislature and governor responded to the needs of anglers and sailboat and yacht owners in 47 days. It’s been 228 days since these storm water pumps failed motorists along metro Detroit’s freeways.

Today’s Legislature could send Whitmer a bill authorizing the purchase of backup generators in a matter of weeks.

But first they would need to treat flooded freeways in the state’s most populous region with the same urgency as low water in small harbor towns.

Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

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FEBRUARY 14, 2022 | CRAIN’S DETROIT BUSINESS | 15

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TURNER

From Page 1

restoration workshop sent him on another path.

“I got down there and I realized that’s what I should be doing,” said Turner, 73. “I got back and I started.”

In the intervening two decades, Turner’s expertise has been in high demand. He travels the country restoring windows, and has recently been spending about half his time in Louisville, working on the preservation of a 1932 post office in Shelbyville. He’s working with the Kentucky Center for African American Heritage and the city’s Mount Zion Baptist Church, which owns the building. But the pandemic has led him to want to be closer to home.

Turner plans to look for more jobs in and around Detroit.

The first job he took, for $5,800, took six months — “I was paying them to restore their house,” he quipped — but it gave him the confidence to move forward, stripping and reglazing, priming and painting, and coming out at the end with a finished product.

“You just kind of figure it out. You stumble forward,” Turner said. “I’m still trying to figure it out.”

At first, he had ambitions of building up a big business, with as many as 25 employees. But Turner soon learned with more people come more management responsibilities, and more people depending on him for their livelihood. It took the joy out of the restoration work and

Jim Turner’s company worked on the adaptive reuse of the steel casement windows of the greenhouse at the El Moore Apartments in Detroit. | PHOTOS BY TURNER RESTORATION

Turner Restoration restored 300 windows and doors at the Sherbrooke Apartments in the Midtown neighborhood of Detroit.

meant he spent less time doing it.

So now he prefers to work with just three to five people, and has

trained many who have gone on to establish their own restoration careers.

BRIDGE

From Page 1

without a vaccine or a mask or anything else,” said Hitchcock, CEO of Webberville-based MBH Trucking and chairman of the Michigan Trucking Association.

Both Canada and the U.S. currently have regulations that require COVID-19 vaccinations for truckers who cross the border into their countries.

MBH trucks typically cross the Ambassador Bridge about 25 times per week, hauling everything from petroleum and antifreeze to livestock feed and nitrogen fertilizer — a crucial import from Ontario for farmers in Michigan and a big part of MBH’s business.

In the past three weeks, the company’s cross-border dispatches are down by 30 percent because only half of its 45 drivers are vaccinated and eligible to cross under Canada’s recently enacted requirement, which prompted protests that spread to the Windsor side of the Ambassador Bridge.

Hitchcock said business is down not because of lack of demand but because of a yearslong driver shortage exacerbated by vaccination requirements.

“The concern I have is there’s nobody new available when the freight comes available. You can’t find a driver,” Hitchcock said. “There’s gonna be a shortage of nitrogen fertilizer.”

Fertilizer makes up just a fraction of the $300 million of goods carried over the Ambassador Bridge each day, but losing supply would have serious consequences for farmers soon to begin planting for the spring season.

Impact from the broken link between the U.S. and Canada was felt immediately in the manufacturing sector, which accounts for the largest slice of Michigan’s $17.3 billion in annual exports to Canada.

Ford Motor Co., General Motors Co., Stellantis NV and other automakers were forced to scale back production at

Trucks wait on Interstate 75 during backups at the Ambassador Bridge on Feb. 8. | BLOOMBERG

Hitchcock

Lippstreu

assembly plants in Michigan and Ontario due to parts shortages. The production cuts have a ripple effect on suppliers already hurting from shutdowns related to the pandemic and microchip shortages.

“All it takes is one missing part, and it shuts down an assembly line,” said John Taylor, professor of global supply chain management at Wayne State University. “The whole system is built on minimal disruption so you can ship parts a day or two before they go into the car.”

Plant closures and layoffs will continue if the border remains closed, said John Walsh, president and CEO of the Michigan Manufacturers Association.

“Automotive suppliers are on the brink of a significant production crisis,” Julie Fream, president and CEO of the Original Equipment Suppliers Association, said in an email. “We need both the Canadian and U.S. border authorities, as well as local law enforcement, to fully enforce the laws and regulations to reopen all border crossings including the Ambassador Bridge.”

The likely direct lost wages for the week in Michigan due to the disruptions amount to $51.3 million, as calculated by East Lansing-based Anderson Economic Group LLC. That number would climb “at an accelerating pace” the longer the blockages go on, said Patrick Anderson, principal and CEO of the consulting firm, but the impact of the closures will remain long after traffic flow resumes.

“This episode has underlined for the United States the critical nature of the Michigan-Ontario border crossing and highlighted the vulnerabilities of the U.S. auto industry related to the reliance on truckers,” Anderson said. “I think this will have effects on trade negotiations, on infrastructure decisions

One of those he trained is Andrea Sevonty, the owner and primary craftswoman at Sevonty Restoration. Sevonty said she apprenticed with Turner for several years before he “kicked me off,” urging her to open her own business. That was 13 years ago.

Sevonty still considers Turner a mentor, and said he’s helped dozens, if not hundreds of people, get started in the trade, through teaching workshops and bringing people on who show an interest in the work.

Turner is modest, she said, but his work is nationally known.

“It’s an undercurrent, a movement,” she said of his influence.

“He’s incubating people across the

country. He’s giving them the confidence so they can start their own business.”

Turner said he’s learned much of his success is based on building trust over the years. And patience, which lets him see the benefits of reworking what’s there, rather than replacing the old with something new. He relishes stripping a window down to bare wood, and waiting for the paint to cure before returning it to a frame.

Modern society doesn’t value maintenance, he said, but it’s imperative to him.

Maintenance reduces the environmental impact of building new when something can instead be restored. There are also cultural implications to keeping and repairing old buildings, and value in not erasing people’s history by tearing down their buildings. Being a preservationist, Turner said, is a holistic way of life. He sees himself as a steward for the environment at large.

Turner said the pandemic in particular has taught him that so few things are permanent, so he has to preserve what he can. The work grounds him, he said, much as his time in the water did as a high school swimmer.

“I want to lose myself in the exercise,” he said, comparing swimming to the joys he gets in restoration. “I want to do it until I feel the pleasure of it, until I’m drunk with it. ... I get lost in it, too.”

Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB

and on relations between the U.S. and “It’s the commonsense thing to do at a Canada for years.” time when we are navigating a global Aurora, Ontario-based Magna Inter- supply chain disruption and driver national, one of the largest auto suppli- shortage.” ers in North America with a large presOver the past few years, the trucking ence in metro Detroit, is “managing industry has grappled with a driver the supply chain constraints caused by shortage made worse by the pandemthe blockade” by finding alternative ic. The shortage hit a historic high last points of entry into Canada and the year of more than 80,000 drivers, acU.S., spokeswoman Tracy Fuerst said. cording to the American Trucking AsFinding alternate routes can be tricky sociations. and costly, said Raddy Velkov, vice Lippstreu said the vaccine mandate president of carrier sales operations for means 30-50 percent fewer truck drivBlueGrace Logistics, a Florida-based ers are eligible to cross the border. Even transportation services provider that after it reopens, he said, constricted opened an office in Troy last October. driver availability threatens the agriOver the past few days, the company cultural sector, which exports about has been coordinating shipping routes $2.8 billion of goods annually, 40 perfor its manufacturing customers in cent of which goes to Canada.

Michigan, including the Blue Water But first, farmers need fertilizer to Bridge connecting Port Huron to Sar- grow the crops. nia, where traffic is also backed up.

“Everyone in Michigan agriculture Velkov said the company is working right now is extremely concerned that with some companies to consider alter- we’re not going to be able to move nate shipping, such as air and rail. product at the volumes we need to Velkov said Canada’s vaccine man- move it especially as we head for the date put more strain on truck supply extremely busy spring planning season between the two countries before the and as we head for the 2022 harvest bridge closure brought it to a head. later this year,” Lippstreu said.

“Our market currently is very That protesters can threaten ecocapacity-constrained,” he said.

“It puts more pres- “I THINK THIS WILL HAVE EFFECTS ON sure on the avail- TRADE NEGOTIATIONS, ON ability of trucks out INFRASTRUCTURE DECISIONS AND ON there.”

Gov. Gretchen RELATIONS BETWEEN THE U.S. AND Whitmer called on the Canadian gov- CANADA FOR YEARS..” ernment to “de-es- — Patrick Anderson, Anderson Economic Group calate” the blockade and “take all necessary and nomic disaster by parking in front of appropriate steps to immediately and a bridge exposes how fragile the supsafely reopen traffic.” ply chain is, and it also threatens Some in the business community, Michigan’s reputation for a stable like Hitchcock, have specifically called supply base, Taylor said. for an end to the vaccine mandate. Ex“You just don’t know if the system empting truck drivers from the man- is stable,” Taylor said. “Can it be shut date is the “common sense” solution, down? It casts a lot of doubt.” said Chuck Lippstreu, president at Michigan Agri-Business Association.

Contact: knagl@crain.com; “It’s the right thing to do,” he said. (313) 446-0337; @kurt_nagl

16 | CRAIN’S DETROIT BUSINESS | FEBRUARY 14, 2022

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UNION

From Page 1

“That billboard, that specific job, that is about protecting our home court. This is our backyard.”

Overlooking the construction, the billboard says, “Union electricians power Detroit” followed by, in a horror movie red font, “Why not the Godfrey?”

It marks a noted escalation, however mild, in what have generally been fairly quiet relations between union and nonunion construction labor the last decade or so, said Marick Masters, a Wayne State University Mike Ilitch School of Business professor in accounting, finance, business and political science who is an expert on labor unions.

“These trends (of de-unionization) started long before that,” he said. “The growth in nonunion labor in construction really started in the 1970s and it’s not surprising that you haven’t seen a whole lot of tension points in the sense of public visibility, but the trend nonetheless has been present.”

Although it’s a pretty tame response so far, it’s a sign the union is ramping up its awareness campaign locally.

“I am not aware of any development projects recently which have provoked this kind of thing,” Masters said.

Patrick Devlin, head of the Michigan Building and Construction Trades Council, said he has seen such forms of awareness raising nationally, but not locally.

“I haven’t seen a whole lot in the way of something like this, also with the social media attention,” he said.

‘A fight for the whole job’ Osbern said one of the plaintiffs in the lawsuit who is no longer with defendant company, Lansing-based United Electrical Contractors Inc., is now a member of one of his chapter’s signatory contractors, Detroit-based Streamline Electric Inc. He said he has been in meetings with union organizers who are assisting workers filing the lawsuit, backing up claims by United Electrical that the union is involved.

But the billboard, he said, isn’t specific to United Electric. No matter what nonunion electrical company contractors Lansing-based Christman Co. and Chicago-based Norcon Inc. hired, it would be up, he said.

“We let enough go on over here,” Osbern said. “There has been a couple other projects where we didn’t do too much more than background. ... Of course you have smaller developments all over here that our members aren’t on. A lot of the resurgence as far as residential developments, we are not on.”

“It’s like, when do we fight back?” he added, “We fought back behind closed doors. This time we gotta bring it out on the street. ... We could picket or we could handbill. We picketed the job in December.”

Osbern said to expect the fight over the Godfrey to continue.

“This is a fight for the whole job, not just construction, but maintenance, operations, day-to-day tasks at that hotel.”

A brief history of construction unions It’s been a difficult slog for organized construction labor. The economic turmoil in the 2000s and early 2010s was not particularly kind to construction workers. The state’s Right to Work law also went into effect in March 2013, preventing requirement of union membership or payment of union

A billboard down the street from the Godfrey Hotel, which is under construction. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

dues as a condition of employment in a unionized company.

“It creates a challenge for unions to organize and there’s been various research which has shown over time that the presence of a Right to Work law in a state will discourage union organizing efforts,” Masters said.

Devlin also said that the repeal of the state’s prevailing wage law — it was reinstated on a limited basis last year — was a blow to unions as well.

Data compiled by Barry Hirsch, a Georgia State University professor, and David Macpherson, a Trinity University professor, at the Union Membership and Coverage Database shows that in 1986, the earliest year available, there were 28,920 private construction union members in the Detroit region representing about 36.4 percent of the total private construction workforce of 79,357.

As of 2012, before Right to Work went into effect, there were 9,114 private construction union members of total private construction workforce of 56,090, representing 16.2 percent. That was also during a time when little construction work was taking place due to the Great Recession.

In 2021, even though there were 102,391 private construction workers, the unionized workforce was just 23,778, or 23.2 percent.

“Generally speaking, there’s been a significant decline in the unionization rate among construction workers. ...

This is a nationwide trend,” Masters said.

Making the Godfrey The $45 million to $50 million Godfrey hotel project by Chicago-based Oxford Capital Group LLC and Farmington Hills-based Hunter Pasteur Homes has been in the works for several years.

In November 2020, Crain’s reported that the developers went through a limited version of the city’s Community Benefits Ordinance process even though the project didn’t meet the $75 million threshold for so-called tier 1 projects.

The hotel, announced in March 2020, is the first phase of what is expected to be a two-phase project that also includes a seven-story, 188-unit apartment building plus a second building with seven, four-story townhomes and a three-story 216-space parking deck. Retail would also be included in the apartment building and parking structure.

In August, the Michigan Strategic Fund gave its blessing to $5.9 million in

state tax captures for the $93 million residential component, which is expected to start construction this year.

In all, the development is receiving about $16 million in brownfield reimbursements, with $10.1 million coming from local tax captures, according to an MSF board briefing memo from August. Other tax breaks for the Oxford/Hunter Pasteur effort include a $10.6 million tax abatement for 10 years.

“They got tax abatements, brownfield, rehabilitative tax abatements and when it came time for construction, the developer and general contractor went out to Schoolcraft College when they could have went to DHDC (The Detroit Hispanic Development Corp.) on Trumbull and Howard,” Osbern said. “They could have hired one of our contractors, but they didn’t.”

A source familiar with the matter, however, said that the union electrical contractor bid for the hotel component of the project came in substantially higher and was therefore cost-prohibitive. For the apartment and retail component to the west, however, the electrical work was awarded to union labor, the source said.

The source said a majority of the subcontracting money spent on the hotel component has gone to union labor.

Other tensions The billboard is not the only source of tension.

Last month, six former employees of Lansing-based United Electrical Contractors Inc., a nonunion outfit which does work in Detroit and the metro region, claimed that use of racial slurs against Black, Hispanic and other workers of color were “a part of near-daily vocabulary of many white employees and managers,” and other racist language was also used regularly, including references to whips and plantations.

In addition, job training and promotion opportunities were regularly afforded to white workers but not workers of color. It was common for managers with United Electrical Contractors to take no action to stop the alleged racism, the lawsuit claims.

Black and Hispanic employees with more seniority were laid off while white employees with less seniority were not, according to the complaint.

It also says Black employees were often made to do more physically demanding work than white employees, among other allegations.

Scott Flegler, president of United

Electrical Contractors, said in a statement to Crain’s that the lawsuit contains new, unfounded claims and that the Equal Employment Opportunity Commission received complaints from the six plaintiffs last year and has now declined to take action on them.

In the statement, Flegler also said that prior to filing the EEOC claims, the IBEW’s lawyers “attempted to use the threat of (filing a lawsuit alleging racism at the company) to coerce UEC to become a union shop despite the fact that UEC’s employees overwhelmingly oppose it. ...

“In apparent recognition that they are unable to win over the hearts and minds of UEC’s employees, the union has abandoned their failed recruitment campaign and transitioned to a pure smear campaign strategy,” the statement continues. “... We will not only vigorously defend ourselves against these claims, but will also be taking action to hold the union accountable for its conduct.”

Jimmy Greene, president of Lansing-based Associated Builders and Contractors of Michigan, which has about 1,000 members, many of which are nonunion, said his organization is “completely and totally against any form of discrimination, period.”

Greene, who is Black, said he is “probably more personally and passionately involved” in anti-discrimination efforts “than most would be.”

“I certainly would not be complicit to it, nor would I condone it,” he said.

A challenge for developers The story gets complex on the developer side, as well.

Clifford Brown, a Detroit mixed-use multifamily developer who runs Woodborn Partners, said he is not opposed to unions.

“I don’t have a problem with people negotiating for a wage,” he said. “I have a problem with forcing people to use more expensive materials or labor in an environment like this.”

Using union labor, he said, almost automatically drives up the cost of building. That, in turn, means that primarily apartment, but also retail, rents have to increase for developers to make enough profit to justify the risk in building.

And if rents increase, that poses two more problems.

First, Detroiters who already face rising rents and low wages, won’t be able to afford to live in many of the units being built, even with affordability measures instituted by the city.

And if people can’t afford to live in

the units, the development won’t lease up and be profitable and could be a money-losing situation, meaning fewer projects get built in a city that already struggles with housing.

“Our cost of construction is too high to gather or sustain any momentum in getting real projects done in neighborhoods, and frankly, downtown or Midtown,” Brown said.

He also said he is not getting wealthy right away building what he has built so far — The Scott at Brush Park along with Detroit-based Broder & Sachse, The Coe in the West Village neighborhood and others he is working on around Detroit.

“Those of us who are building in the city of Detroit are crazy people,” he said. “We’re doing it because we are passionate about seeing something happen in Detroit.”

The buildings he is working on, he says, will be worth less than it cost to build them for several years. That’s because it takes several years to “season” the property — basically get it occupied, stabilized and with increasing rents.

And as to public retaliation for not using union electricians?

“He’s going to exacerbate the problem,” Brown said of the IBEW’s Osbern.

“If his bid misses, and he’s going to go scorched-earth on people and try to force them to take on work $1 million or $2 million more? What kind of market is that? How do you have a healthy market in that situation?”

Is union labor better?

Key among considerations for Masters is building quality and safety, particularly pointing to the condominium tower collapse in Surfside, Fla., that killed 98.

That building failure was a situation caused by a potent cocktail of faults, including design, construction and neglect, the Miami Herald reported late last year.

That isn’t to say, Masters said, that if you use nonunion labor, your building is at risk of such a catastrophe.

But hiring union labor does, he said, tend to ensure better quality.

“Unionized work in general tends to be of higher quality,” he said. “The workers have been trained, gone through sponsored apprenticeship programs and there are all kinds of safety precautions that can lead to a better product. Now, you may have to pay a little bit more, but you know, when you think about the consequences, heavy, well-developed physical structures are really important.”

“It’s important to have a pool of highly skilled craftsmen in place, especially the size and complexity of projects we are involved in,” said Ryan Maibach, president and CEO of Barton Malow, the Southfield-based general contracting giant. “Erecting steel on a high rise or wiring a substation is complicated work and you can’t put someone with little experience in that environment and expect them to do it safely and efficiently.”

Greene, the longtime head of the ABC of Michigan, disputed that nonunion workers produce inferior work.

“The unionized skilled trades workers, they’re incredible at what they do,” he said. “They’re highly trained.

They’re safe, competent. They do marvelous work. And those markets they do business in or that they construct in, I have nothing disparaging to say about any of those things: Safety, quality, competency, nothing at all. Now that I said that, I would echo the same thing with ours.”

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

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THE CONVERSATION

Illuminating Concepts CEO aims to tap push toward ‘smart cities’ Illuminating Concepts, the longtime Farmington Hills-based lighting and multimedia design company, seeks to use a new brand to tap into the push toward “smart cities.” It has formed Intellistreets, with a focus on making the streetlight the linchpin through which cities can gather their data, according to Ron Harwood, founder and CEO. Harwood said he's gotten a litany of interest from cities around the country regarding putting in place the company’s technology, which can be used for helping direct traffic, provide public Wi-Fi, and give municipal officials a steady stream of needed data. | BY NICK MANES  What makes the Intellistreets platform unique?

So the essence of the Intellistreets patents begins with synchronization.

It synchronizes the lights to come on at the same time ... up and down the waterfront or up and down Woodward Avenue. It synchronizes all the flashers the same way. If I wanted to strobe, these flashers tell people which direction to leave the stadium, it can go ‘red, red, red,’ and then green for safety. So it will synchronously move people in different directions, so it’s very good for traffic, both pedestrians and motorist traffic.  What are some other potential uses?

You’ve seen in downtown Detroit, antennas going up all over the place with 5G? So we do that ... We literally do public Wi-Fi access points in the base of the pole, and these concealed antennas use high-quality Cisco Wi-Fi.  So how do you view the overall business model for this ‘smart city’ technology?

With new federal funding, cities will be improving their downtowns in a number of ways. Certainly improving the roads, improving security improving telecommunications. You hear this every day on the news. And we do all of that, but we don’t do it with individual parts. I will say we (have been) speaking to Los Angeles, Chicago, Detroit, Tampa and Miami — speaking to very large cities.  And what are those cities looking for as you speak with them?

So (cities are) collecting information, they’re collecting data. The water leaving the city, going to plants.

Or the water leaving the Detroit River going to your drinking taps.

Everything from that to digital cameras and weather stations. And if all those things are necessary — which they are now — how can we communicate through one platform?

Intellistreets is almost the only

Well, we have the same security levels as Amazon does. So as far as security levels go, we can’t do any better than what Amazon can give us. They’re the No. 1 at it. But if somebody was to find a way to log on to the system ... There are so many levels of security built into our firmware that ... I don’t think that they would be able, nor would they be interested, in creating any kind of a cyber disaster.

Now, that sounds maybe a little short-sighted.

platform any city would need to do all of its sensor data, collect all of its information and the only in the world that can talk to the streets.  What does that mean from a practical standpoint?

Imagine with all the intelligence we possess in these streetlights, if Ford, GM, Chrysler or Tesla decided that they wanted to have a backup system or a communication system at street level, including being able to talk to people, it’s all done. They just have to connect with us through the cloud. And if they wanted to have a sensor that identified the vehicle and its speed and its location, they can do it off our poles and we already have the wireless platform to send that data back to them.

We can take analog video triggers from cameras and we can create an action where the lights flash ... like if there’s water over the curb (and on the street).

Instead of having the police department have cruisers directing traffic ... you can have the signs do your traffic redirection.

The bottom line is that streetlight just gave us the opportunity to mount a bunch of devices that the cities have always needed. So instead of digging up the streets, I decided to do something like this all wirelessly.

So we can attach this to existing poles if we need to, we don’t even have to change the lights. So in a way, it’s a very high performance kiosk that acts as a streetlight.

 Does the surveillance aspect concern you?

I don’t see a Big Brother aspect to what we do ... And I just went through this with some major cities. One major city said, ‘Oh, we’ve got to have cameras. We’ve got to have all these features. And we need 55,000 of them before September.’ And another city said, ‘We’re afraid of putting in cameras because people are afraid of facial recognition.’

So our system doesn’t automatically catch anybody at anything. You have to engage the software and buy the hardware to make that happen. So it’s up to every individual city what they want to engage. You can have Intellistreets without cameras. But what if you wanted to count traffic?

You need a camera. So it’s not exactly a conundrum, because I think what used to be a conundrum five years ago is turning into a necessity. That we need to be able to see bad things going on in the street, and that doesn’t mean we have to watch you.

It just means we have to be able to recall that incident and find out what happened.

 How should we think about the security of all of this given the proliferation of cyberattacks and your work calls for turning the streetlight into a data mining tool?

Ron Harwood is founder and CEO of Illuminating Concepts.

AT CRAINSDETROIT.COM/THECONVERSATION

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CRAIN COMMUNICATIONS INC. has announced it acquired a minority stake in a growing sports business news publication.

Crain, the Detroit-based parent company of Crain’s Detroit Business, Automotive News, Ad Age and a host of other niche business publications, announced last week that it made a minority investment in Front Office Sports, which values the New York City-based company at $25 million, according to a news release. Terms of the deal were not disclosed.

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Editor-in-Chief Keith E. Crain Publisher KC Crain Group Publisher Jim Kirk, (312) 397-5503 or jkirk@crain.com Associate Publisher Lisa Rudy, (313) 446-6032 or lrudy@crain.com Executive Editor Kelley Root, (313) 446-0319 or kelley.root@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Digital Editor for Audience Elizabeth Couch, (313) 446-0419 or elizabeth.couch@crain.com Creative Director Thomas J. Linden, tlinden@crain.com Digital Portfolio Manager Tim Simpson, (313) 446-6788 or tsimpson@crain.com Assistant Managing Editor Beth Reeber Valone, (313) 446-5875 or bvalone@crain.com Assistant Managing Editor Lauren Abdel-Razzaq, (313) 446-5800 or lauren.razzaq@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 Associate Creative Director Karen Freese Zane, kfreese@crain.com Art Director Kayla Byler, kayla.byler@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

fice Sports.

“We couldn’t be more excited about our investment in Front Office Sports,” Crain said in the release. “We love the space they expertly cover, and their team is great to work with — we know there’s a lot we can learn from each other. As Crain continues to build new businesses around data and digital audiences, FOS is a perfect fit.”

The news release says that in the last year, Front Office Sports’ newsletter subscriber base grew

288 percent, sponsor and advertising revenue grew 269 percent and its social channels had more than half a billion impressions.

“The business of sports is not a trade,” Adam White, founder and CEO of Front Office Sports, said in the release.

“The business of sports is culture, finance, consumer marketing, entertainment and now Web3,” White continued. “Our company was founded out of deep conviction that this industry had to be covered differently.”

Chairman Keith E. Crain Vice Chairman Mary Kay Crain CEO KC Crain Senior Executive Vice President Chris Crain 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 no issues on 1/3/22, 7/4/22, 11/21/22 nor 12/26/22, by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices.

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18 | CRAIN’S DETROIT BUSINESS | FEBRUARY 14, 2022

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