Crain's Detroit Business, January 13, 2025

Stellantis sells Mopar complex in Center Line

Buyers plan to redevelop 80-acre site of automaker’s

By Kurt Nagl

Stellantis NV has sold its massive 1.2 million-square-foot Mopar complex in Center Line — once considered the world headquarters of the automaker’s parts division — as it looks to centralize Mopar operations in the Midwest.

The automaker will continue to temporarily occupy the warehouses near I-696 and Mound Road, where it employs 500

UAW-represented workers, under a sale-leaseback agreement, Stellantis confirmed.

The company told officials with the city of Center Line, Mopar’s home since 1953, that operations would continue until at least April 2027 and possibly until 2029, City Manager Dennis Champine told Crain’s.

“I think the political leadership in my office sees this as sad and unfortunate … it’s tough to see Mopar go,” Champine said.

parts division

“But on the flip side, if it is redeveloped as projected, that is absolutely a good thing.”

The buyers, New York Citybased Ashley Capital and Hazel Park-based CSC Capital, plan to eventually demolish the aging complex for a redevelopment on the 80-acre site that sits along a key industrial corridor.

The Center Line deal closed shortly before the New Year. The

See STELLANTIS on Page 17

Michigan weed industry faces shakeout in 2025

By Dustin Walsh

Michigan’s cannabis industry faces a reckoning in 2025.

Oversupply and low, low prices are coming to a head in the industry, leaving a trail of shuttered cultivators and processors.

The average price for an ounce of cannabis flower in Michigan’s adult-use market fell nearly 23% to $71.80 — a record low — between the start of the year and the end of November, cutting into margins for the industry.

Two major cultivators have recently announced closures. Chicago-based PharmaCann told employees it would shutter its 207,000-square-foot LivWell Michigan cultivation site in War-

ren, laying off 222, in January.  Fluresh LLC, doing business as Tend.Harvest.Cultivate, announced it was closing down its $46 million, 105,000-square-foot grow facility in Adrian at the end of November.

And with the inventory of the annual outdoor “Croptober” harvest flooding the market, there’s no indication prices will stabilize.

The inventory of fresh frozen cannabis — which is cannabis from outdoor grow operations frozen for use in resins and rosins throughout the year — was already nearly 2.8 million pounds in October; up more than 228% from the 876,600

See MICHIGAN on Page 17

Metro Detroit malls are reinventing themselves as shopping evolves

As Southeast Michigan's remaining shopping malls emerge from a roller-coaster year, some have started to reimagine themselves — while others will continue to face challenges.

As Americans continue to re-

fine how and where they want to shop, trending away from malls that cropped up in suburbs across the country in the 20th century, owners and operators have sought to rethink the traditional enclosed shopping center.

For example, Briarwood Mall in Ann Arbor is forfeiting some of its

parking apron, about 6.2 acres of it, as Simon Property Group, based in Indianapolis, and Hines Interests LP, based in Houston, develop a new 370-unit apartment building. The effort is believed to be the first instance locally of a still-open mall

See MALLS on Page 17

January 13, 2025 HOME SALES

2025 could be year “golden handcuffs” come off in residential market.

How Gilbert’s team influenced Joe Louis Arena site’s future.

Bedrock’s Kevin Mull on writing the company’s playbook on innovation.

Mopar has been a fixture in the Center Line business community since 1953. STELLANTIS

Connor LaChance of Midland cuts a stem during the harvesting process at the Lume Cannabis Co. production facility in Evart. | NIC ANTAYA

apartment development on the Briarwood Mall surface parking lot in Ann Arbor.

GENSLER

By Kirk Pinho

One of RenCen’s rst tenants is departing for a new HQ

By Kurt Nagl

Detroit-based Dykema Gossett PLLC will depart the Renaissance Center, its headquarters since 1977, while its landlord decides the fate of the iconic o ce complex.

But the law rm won’t be going far.

Dykema will move its headquarters o ce and 100 attorneys and sta to One Kennedy Square near Campus Martius in downtown Detroit by late summer, ocials at the rm told Crain’s. Its lease at the Renaissance Center expires at the end of August.

“Dykema’s move back to the Central Business District is an important milestone for the rm …” Dykema Chair and CEO Len Wolfe said in a news release. “ is move re ects our commitment to remain a vibrant part of the City of Detroit, and we are thrilled to be a part of the downtown business community as we plan for our centennial anniversary next year.”

e rm will take 25,700 square feet at the Redico-owned building — half the space it occupies in the Renaissance Center’s 400 Tower, which would be demolished under a plan oated by owner General Motors Co. and developer Bedrock LLC.

Dykema — a top automotive law rm that counts GM and Ford

Motor Co. on its client roll — is also busy with a high-pro le o ce move 20 miles up Woodward Avenue. e rm is leaving its Bloomeld Hills digs for a smaller space in a new development in downtown Birmingham.

e rm expects to have occupancy in Birmingham by the

fourth quarter, a spokesman said. In Detroit, the transition to the green-tinted One Kennedy Square building, where the rm signed a 12-year lease, has so far been “seamless” with the help of Redico, Wolfe said. Build-out costs were not disclosed.

Dykema has plenty of company among organizations, especially in the legal industry, downsizing and shifting o ce footprints since the COVID-19 pandemic began in early 2020 and its long work-fromhome tail. Maddin Hauser, Dinsmore & Shohl and Brooks Kushman are just some of the law rms

that have made moves recently. Dykema also is not alone in its exit from the Renaissance Center. Public relations rm Franco, also one of the complex’s original tenants, is plotting a move to another o ce in Detroit, though details have not been revealed. Tower 400 alone is home to two dozen other tenants, according to a directory inside the building.

GM announced last April it would be leaving its longtime Renaissance Center headquarters for a signi cantly smaller space in Bedrock’s new Hudson’s Detroit development.

GM and Bedrock unveiled in late November a $1.6 billion plan for the complex that called for demolishing two o ce towers and opening up space along the Detroit riverfront for broader redevelopment. e $250 million ask for public subsidies was met with sharp criticism in Detroit and Lansing.

Dykema o cials said it was important that the rm keep its ag in Detroit and carry on its long tradition in the city. Founded in Detroit in 1926, the rm moved into its Renaissance Center o ce July 5, 1977, according to a spokesman.

“We are proud of our long-standing history in Detroit and are excited to continue contributing to the city’s revitalization and growth,” Wolfe said.

The Renaissance Center’s owner and largest tenant, General Motors, is moving out, and others are doing the same.

KIRK PINHO

This could be the year more homes go on the market

By Nick Manes

The year 2025 will likely bring further relief to the “golden handcuffs” that have kneecapped the housing market in Michigan and beyond for several years.

But many — not all — housing and mortgage experts say economic conditions will do little to bring about the shift. Rather, typical life circumstances will continue to occur — sellers who need a larger home, divorces, new jobs in new cities — and help free up new inventory for hungry buyers.

“What was tolerable in year one and became a little bit of an annoyance in year two. The longer you stay in a situation where you’re in a house that’s too big or too small, the more it becomes a challenge,” said Jeanette Schneider, president of Troy-based brokerage Re/Max of Southeastern Michigan. “And I think those types of things — kind of the life things — I think in large part is going to be a bigger trigger than the economic factors.”

Sometimes called “golden handcuffs,” sometimes called the “lockin effect,” much of the blame for limited existing housing inventory in Michigan and the rest of the country in recent years has been blamed on the historic low rates experienced in 2020 and 2021 during the COVID-19 pandemic. Millions of Americans bought or refinanced homes at rates in the 2%-3% interest rate range and now see no financial upside to letting go of their homes, or more specifical-

ly, their low rates.

Roughly 60% of the nation’s 50.8 million active mortgages are at rates below 4%, according to a report last year by the Consumer Financial Protection Bureau.

Inventory for homes for sale in

metro Detroit and elsewhere, however, has shown signs of improvement in recent months. Nationally, at the end of November, home inventory was up 10.3% from a year earlier, according to brokerage firm Redfin.

Developer, city at odds over progress at vacant Herman Kiefer hospital site

By Elizabeth Schanz

The developer that owns the massive Herman Kiefer hospital site in Detroit is at odds with the city over whether enough progress has been made on the long-vacant 40-acre property.

Ron Castellano — managing member of Herman Kiefer Development, which owns the former medical complex, two adjacent buildings and dozens of homes in the surrounding Virginia Park neighborhood — says headway has been made.

City of Detroit officials disagree — and are taking steps toward taking the property back.

Since the master development agreement was finalized in 2018 for the hospital and adjacent buildings, Castellano said he has transformed the site and maintained it to become a job-creating campus while separately renovating homes purchased from the Detroit Land Bank Authority in the Virginia Park neighborhood.

“We’re on track from our original goals… We’re hopeful that

something would have happened sooner. It’s just being realistic,” Castellano said, noting he believes the development will meet its original timeline for completion in 2028. “This is a very different neighborhood (than when we first purchased the property).”

Now, nearly seven years into the development agreement, the city claims the Herman Kiefer project has not met its benchmarks, including investment requirements for the last two years

Pontiac-based United Wholesale Mortgage CEO Mat Ishbia spoke recently about the rising inventory levels seen nationally.

“There’s a lot of houses out there,” Ishbia said in a UWM video in early December. “With rates

dropping a little bit, there’s an opportunity where affordability is better, more people are selling their houses and that’s why see inventory going up.”

3 new laws that will affect business community in 2025

By David Eggert

LANSING — Paid medical leave requirements, the state minimum wage and unemployment benefits will change substantially under new laws due to take effect in 2025.

The next Legislature signaled Jan. 8 that it will take up the minimum wage and paid sick leave issues, with Senate Democrats and House Republicans both introducing bills that would modify the law before it takes effect in February. The bills vary, but both would soften the increase in the tipped minimum wage and ease the paid leave requirements on smaller businesses.

Here’s a look at the laws going into effect early this year unless action is taken:

Paid sick time

Starting Feb. 21, employers with fewer than 50 employees will no longer be exempt from having to provide paid medical leave, as they are under the Paid Medical Leave Act, a 2018 law that the Michigan Supreme Court declared unconstitutional in July.  Employers with at least 10 workers will have to offer up to 72 hours annually, up from 40 hours now required for places with at least 50 employees. Employers with under 10 workers will be required to provide up to 40 hours of paid leave plus up to 32 hours unpaid.

The coming year could be the one that sees homeowners finally willing to give up their low mortgage interest rates and put their houses up for sale for another home. ISTOCK

The Herman Kiefer hospital site at the John C. Lodge Freeway and Clairmount in Detroit spans about 40 acres. | HErMan KIEFEr DEVELOPMEnT

How Gilbert’s team in uenced Joe Louis site’s future

As Detroit was mired in its unprecedented municipal bankruptcy more than a decade ago, behind-the-scenes negotiators enlisted what at the time was Dan Gilbert’s increasingly in uential real estate team to convince a major creditor to take a deal on the former Joe Louis Arena site.

is is what I believe is a wonky new detail spelled out in a new book, “Grand Bargain: e Inside Story of Detroit’s Dramatic Journey from Bankruptcy to Rebirth,” by Gerald Rosen, the former chief judge in the U.S. District Court for the Eastern District of Michigan who was the chief mediator in the case.

To be clear, we’ve known for a long time that Gilbert’s Bedrock LLC has worked with Syncora Guarantee Inc., another holdout creditor in the case, on bankruptcy-related real estate.

Bedrock has taken over essentially all of the Syncora properties, ranging from east Detroit riverfront land south of Je erson Avenue — this is my favorite nerdy nugget about it — to the former Detroit Police Department headquarters at 1300 Beaubien.

But I’m pretty sure this is the rst time Bedrock’s involvement in the Joe Louis Arena property during that time has been revealed.

Rosen writes that after having struck a deal with Syncora to get it to agree to the Plan of Adjustment, Financial Guaranty Insurance Corp. — FGIC (pronounced “FIDGE-ick”) for short — was the last “recalcitrant” creditor to be dealt with, as he described them during a November book promotional event at the

Detroit Institute of Arts.

en Rich Baird, a top adviser to Gov. Rick Snyder, proposed offering development rights to the Joe Louis Arena property, which was to be vacated in a few years as the Detroit Red Wings were getting ready to lace up their skates at what is now Little Caesars Arena.

As Rosen writes it, Baird then sought help from a pair of Gilbert’s top lieutenants — Matt Cullen and Jim Ketai — who were called in on a Saturday afternoon to start pitching FGIC on the JLA land, showing them revenue projections for a mixed-use hotel, residential, o ce and retail development on the site.

at wasn’t enough to sell the insurer right away, however, in spite of a promising ROI, Rosen writes.

vironmental concerns that could throw those revenue projections out of whack.

Apparently one thing that didn’t throw them out of whack is a crushed crane that collapsed while installing caissons on the JLA site in the 1970s. (Nor did a joke from David Massaron, then working in Mayor Mike Duggan’s administration, about potentially nding Jimmy Ho a’s body on the site.)

Ketai, on Jan. 7, recalled the Joe Louis Arena parking deck being a key sticking point in the deal that was struck in October 2014.

something new on the property. It’s important to remember the real estate and economic climate at the time, Cullen said Jan. 7.

“Gilbert had just come down. GM had just gone through bankruptcy, and so did Chrysler. e city was in bankruptcy. ere wasn’t really much happening yet,” Cullen said.

“Jerry (Rosen) was trying to say to them, ‘ is is worth X, and this is worth Y. You should believe in these values.’ It’s like you’re hawking your silver in order to make payments. at’s kind of what was going on. ey were very skeptical as to whether there was any value to this stu at all,” Cullen said. “It wasn’t just to come down and talk about those pieces of property. But it was also to give them a sense that there is value in Detroit assets, period, and that there is a future that was di erent from what they had seen in the rearview mirror.”

Charles is the highest ranked Fee-Only Advisor on Forbes’ list of

e big questions were who would pay for demolition of the arena (the state ultimately agreed to pony up millions for it) and whether there were any latent en-

“I remember it being kind of the last puzzle piece of putting this together, and they needed to establish a realistic value for that,” Ketai told me Jan. 7. “What they asked me to do was put together a pro forma of what the value could be for the deck were it to be redeveloped.” at, Ketai said, included renovation and upgrades, as well as tearing it down and building

Today’s rearview mirror looks a lot di erent than it did then. at Joe Louis Arena site deal ultimately roughly a decade later led to what is now generally referred to as the Water Square development. e property has, in part, been redeveloped by Detroit-based e Sterling Group with a 25-story apartment tower commanding some pretty high market-rate rents and a companion tower under construction slated to be a JW Marriott convention-style hotel to complement the Huntington Place convention center next door.  Will there be more development surrounding it? e Sterling Group has gobbled up more land nearby in recent months, so we’ll see.

And those hundreds of millions of dollars in real estate investment can be traced back to the late stages of Detroit’s bankruptcy and a deal struck in the wee hours of the morning.

German auto supplier to sell U.S. engineering business in Plymouth

By Kurt Nagl

German auto supplier Mahle Group is selling its U.S. automotive powertrain and engineering services business amid consolidation in the highly competitive space.

e company, whose North American headquarters is in Farmington Hills, has agreed to sell the U.S. branch of Mahle Powertrain to Belgium-based Dumarey Group in a deal expected to close in the rst quarter, Mahle announced Jan. 8.

Terms of the transaction were not disclosed.

Dumarey Group will get the keys to Mahle Powertrain’s Plymouth Township o ce and R&D site, including 70 employees fo-

cused on testing and developing electric and hybrid powertrains for U.S. customers.

Mahle Powertrain branches outside the U.S. are not part of the deal. e company chose to drop the U.S. business, in which it is a comparatively minor player with minimal market share, after a review of long-term strategic positioning.

“With the Dumarey Group we have found a buyer with a strong U.S. focus and corresponding dedicated growth strategy for this market that will be able to lead the business outside the Mahle Group into a successful future,” Marco Warth, vice president of Mahle corporate research and advanced engineering, said in a news release.

A Mahle spokeswoman said the Dumarey Group intends to bring all Plymouth Township employees onto its payroll with sights set on expansion.

“Acquiring Mahle Powertrain USA marks a signi cant milestone in our strategy and reafrms our long-standing connection with the United States,” Pierpaolo Antonioli, chief technology o cer at Dumarey Group, said in the release.

Excluding its Plymouth business, Mahle has more than 1,100 employees across ve locations in Michigan, including Farmington Hills, Troy, St. Johns, Belmont and Muskegon. Mahle Group generated more than $13 billion in 2023 and has 72,000 employees across 29 countries.

Kirk Pinho

An aerial view from fall 2024 of the JW Marriott hotel under construction, next to the new Water Square residential tower, along the Detroit Riverfront at the site of the former Joe Louis Arena in Detroit. DEAN STORM/CRAIN COMMUNICATIONS

Florida private equity firm buys Mackinac luxury yacht dock

By Rachel Watson

A wealthy Florida family has further consolidated its holdings on Mackinac Island with the purchase of a private dock that can accommodate up to six large yachts at once.

The Naples, Fla.-based Hoffmann Family of Companies announced Jan. 3 that its subsidiary Hoffmann Marine acquired East Dock LLC, a 180-foot private dock at 6937 Main St., just east of the Mackinac Island State Park Harbor. Terms of the transaction, which closed Dec. 31, were not disclosed.

The seller was an entity registered to William Anton, which acquired the dock in 2016 for $1.9 million, according to property records. Anton is co-founder with his wife, Patricia, of Anton Airfood Inc., a Tulsa, Okla.-based airport food service provider serving major U.S. airports.

Jenny Gezella, president of Hoffmann Marine, said in a state-

ment that the Hoffmann family is “thrilled” to add East Dock to its growing portfolio in Northern Michigan.

“We look forward to continuing the dock’s legacy of providing firstclass service and facilities to guests for years to come,” Gezella said. “Adding the East Dock to our portfolio continues to show the Hoffmann Family’s investment in Mackinac Island.”

The East Dock can accommodate large yachts of 40-120 feet in length for short- and long-term stays and has been known to dock as many as six vessels at once, according to Jessica Curruth, a spokesperson for the Hoffmann family.

Amenities at the recently renovated dock include a crew lounge, laundry facilities and grilling stations. It also has a new electrical system with service of up to 100 amps, water access at every pedestal, high-speed Wi-Fi and garbage disposal services.

The East Dock will continue to

be managed by Veronica Dobrowolski, who also is CEO of Sip n’ Sail Cruises and president of the Arnold Transit Co., formerly called the Mackinac Island Ferry Co. Both entities are now also owned by the Hoffmann family.

“I’m thrilled to support the Hoffmanns in expanding their marine presence on Mackinac and look forward to continuing to welcome guests to this stunning island,” Dobrowolski said in a statement on the deal for East Dock.

With the acquisition, Hoffmann Marine’s portfolio now includes 15 docks and 46 vessels across seven states, including docks in Mackinaw City, Mackinac Island and St. Ignace.

The Hoffmann Family of Companies private equity firm was founded by David Hoffmann and is led by his sons, second-generation co-CEOs Greg and Geoff Hoffmann.

The company’s first deal on Mackinac Island was the acquisi-

Italian auto design company stakes out $20M U.S. headquarters in Oakland County

By Kurt Nagl

A prominent Italian automotive design and engineering company is planting a flag in Bloomfield Township, where it plans to invest $20 million for its U.S. headquarters.

Italdesign will create 24 jobs in its new office at 6785 Telegraph Road, Gov. Gretchen Whitmer’s office announced Jan. 7.

The jobs are in engineering, sales and marketing, and administration with an average wage of $56.70 per hour, according to the Michigan Economic Development Corp., which awarded the compa-

ny a $200,000 performance-based grant. The company had considered sites in Ohio and California.

“The United States play a key role in our global strategy: partnering with major automotive players providing the widest range of services today available on the market,” Antonio Casu, Italdesign global CEO, said in a news release.

Renowned for its design work with a host of companies from Detroit automakers to foreign luxury brands, Italdesign employs more than 1,000 people in Italy, Spain, Germany and China. The company specializes in styling, engineering

and production for established and emerging automakers. It also does software development, electronics, integration and validation.

“… We are growing our economy, bringing supply chains home, and showing the world that Michigan is the best place to build the cars, chips, batteries, and cutting-edge technology of the future,” Lt. Gov. Garlin Gilchrist said in a news release.

Gilchrist was among a delegation of Michigan officials at CES in Las Vegas, where Italdesign unveiled plans for its new headquarters. The annual consumer tech-

tion of Shepler’s Ferry in 2022. The firm then sewed up ownership of all passenger ferries to the island with the acquisition of Sip N’ Sail Cruises in May 2024 and Mackinac Island Ferry Co. in June. The family rebranded the latter as Arnold Transit Co. in September.

Citing a cultural interest in Northern Michigan that grew out of its acquisition of Shepler’s, the family also bought St. Ignace-based Maurer Publishing LLC, the publisher of the St. Ignace News and the Mackinac Island Town Crier, in March 2023, under the banner Hoffmann Media Group.

The firm also acquired Gladstone-based Besse Forest Products Group, an Upper Peninsula wood products manufacturer, in March last year and Lowell-based Envision Engineering, a full-service metal forming manufacturer, in July.

David Hoffmann made his early fortune in the 1980s after founding

the Chicago-based executive search firm now known as DHR Global, which is still the conglomerate’s cornerstone business. From there, he branched into private equity through Osprey Capital LLC, now structured as a family office, and into real estate via Hoffmann Commercial Real Estate, which manages properties cumulatively valued at more than $1 billion.

Under the second generation, the Hoffmann Family of Companies expanded into new industries and its verticals now include aviation, agriculture, financial services, hospitality, business and professional services, industrial, manufacturing, marine, media and marketing, real estate and transportation.

The Hoffmann Family of Companies now owns about 120 global brands, with businesses that employ more than 16,000 people across 400 locations in 30 countries, according to the firm.

nology show has become a staple for auto suppliers and tech companies to showcase their latest wares to the industry.

“I am thrilled to welcome Italdesign to Oakland County and to Michigan,” state Rep. Samantha Steckloff, D-Farmington Hills, said in the release. “Their commitment to locating in our community demonstrates our excellence in automotive innovation, and we look forward to welcoming these new high skilled jobs to our area.”

A subsidiary of Hoffmann Family of Companies acquired East Dock LLC on Mackinac Island. | HOFFMann Mar nE

Italdesign’s new Quintessenza concept car. ITaLDESIGn

EDITORIAL

Let’s learn some lessons from lawmakers’ dysfunction

The end of the year in Lansing provided Michigan’s voters with a memorable example of how government shouldn’t do business.

The final days of the state’s legislative session would have been comedic if the stakes were lower. As they were, they were just sad.

With one Democrat and all Republicans boycotting the House chamber, critical legislation died on the vine for lack of quorum. Whether you supported any of those bills or not, this is no way to run a state that needs to compete globally for jobs and investment.

As a new legislative session began Jan. 8 with Republicans assuming control of the House and Democrats maintaining control of the Senate, our elected officials must move beyond the paralysis and theatrics that marked December’s meltdown.

At the top of the list: changes to Michigan’s tipped wage and paid sick time laws take effect in just six weeks — changes that restaurant owners warn could force closures and that broader business groups say could harm smaller enterprises already struggling with rising costs. Happily, both parties and both chambers signaled that these issues would be priority number one on the first session day of 2025.

COMMENTARY

These aren’t (or shouldn’t be) partisan issues — they’re economic ones. The new Republican House majority, Democrats in the Senate and Gov. Gretchen Whitmer need to work together with urgency to find reasonable compromises that protect workers while keeping Michigan competitive. That’s just one urgent example of why Michigan needs a legislative body that works. Sometimes the rough-and-tumble gimmickry of politics needs to bow to real-world needs and priorities.

Other crucial business priorities also demand attention. A sustainable source of

funding for economic development, a path forward for Detroit’s Renaissance Center, and even issues that are largely noncontroversial like a reinstatement of tax breaks for donations to community foundations. Wherever you stand on these issues, we need lawmakers who can debate and compromise and find workable solutions. You know, like civics class.

If there’s a silver lining to December’s dysfunction, it’s that several worrisome bills failed to advance — proposals that would have expanded liability exposure, imposed stricter environmental regula-

tions, and allowed a patchwork of local wage and benefit mandates. While some of these goals may be noble, their implementation as proposed would have added costs and complexity for job creators already navigating challenging economic waters.

Many say less government is good, and often that’s true. But counting on governmental gridlock to prevent harmful legislation isn’t a strategy that works in a complex world. What businesses and citizens need is predictable, stable governance focused on strengthening our economic fundamentals. Give our young people a worldclass education, make Michigan a destination state and, yes, fix the damn roads.

The new legislative term offers a fresh start. With divided control between the chambers, both parties must work together or nothing gets done. This presents an opportunity to focus on practical solutions rather than partisan point-scoring. (Perhaps this is a pollyanna viewpoint, but maybe if we demand it, we’ll get something in return.)

Michigan faces too many challenges to repeat last month’s political theater. We should expect more from our leaders. The question is whether our Legislature will meet that standard.

Detroit’s recovery may be obvious now, but its roots run deep

The Wall Street Journal recently dubbed Detroit the most unlikely boom town in the United States. Citing Dan Gilbert’s new Hudson’s block and other projects, the article was just the latest in a long series in publications nationwide celebrating Detroit’s comeback from the misery of its Rust Belt decades.

But most or all these tributes, like another recent one in The New York Times, cite “Mayor (Mike) Duggan, and with the help of some billionaire investors” as the prime movers behind Detroit’s revival. What all these hosannas miss is how deep the roots of Detroit’s recovery go.  The city’s recovery may be more obvious now, but as early as 25 years ago, Detroiters already had begun to engineer the first tangible moves toward reinvention.

John Gallagher worked as a reporter and columnist with the Detroit Free Press from 1987 through 2019. He continues to freelance for Crain’s Detroit and other publications. His most recent book is Rust Belt Reporter: A Memoir, published in September by Wayne State University Press.

I covered those efforts as a reporter and columnist with the Detroit Free Press for more than 30 years. My new memoir, “Rust Belt Reporter” (published by Wayne State University Press), shows how Detroiters were progressing on multiple fronts long before the more celebrated projects like Hudson’s or Ford’s Michigan Central Station revival.

Here’s the key: Detroit’s recovery didn’t rely on any one silver-bullet solution, not

Dan Gilbert moving downtown or even the city’s spin through municipal bankruptcy in 2013-14.

Rather, Detroit’s recovery has been a mosaic of efforts in which numerous players acting across a very wide range of endeavors began to inch the city forward little by little as early as 2000.

As a journalist, I first noticed this in the early 2000s as neighborhood activists and nonprofit groups began to reclaim vacant and abandoned city properties as community gardens and artists colonies.

Efforts like D-Town Farm on the west side and Earthworks Urban Farm on the east side first began to give Detroit a flavor of reinvention. Indeed, it was the repurposing of vacant urban landscapes that first excited urbanists far and wide about Detroit’s possibilities. Then, too, philanthropic foundations as early as the ’90s began to pivot from passively writing checks to good causes to taking an activist approach to helping Detroit.

The Kresge Foundation, Ford Foundation, the Community Foundation for Southeast Michigan, and multiple others, flush with legacy wealth from Detroit’s 20th century manufacturing success, began to underwrite educational, arts,

health, and community redevelopment work throughout the city.

This became most notable during the “Grand Bargain” in the city’s bankruptcy when foundations ponied up hundreds of millions of dollars to underwrite the settlement. But the foundations’ efforts have gone far beyond the bankruptcy case and indeed have funded Detroit’s recovery from the beginning.

And years before Detroit’s bankruptcy filing, the city government, then still under-funded and dysfunctional, agreed in the early 2000s to spin off multiple functions into a whole series of nonprofit conservancies and public authorities.

The success of so many reinvented parts of urban life, from Detroit’s convention center to Eastern Market to the creation of the RiverWalk and Campus Martius Park, relied on these spun-off nonprofit entities, many paid for by the newly activist philanthropic foundations.

Or take entrepreneurship. It may be hard to recall, but in the year 2000 Detroit had no startup incubators, no venture capital, no culture of entrepreneurship. Today, billions of dollars of venture investments fund hundreds of startups, and TechTown and Newlab today nurture the city’s ever-expanding population of entrepreneurs.

Only with most of this base of efforts already in place, could Detroit then enjoy the downtown renaissance made possible by Dan Gilbert’s investments, the reinvention of municipal government through a suc-

cessful bankruptcy, and the many encouraging programs under Duggan’s leadership. This holds a lesson for other troubled cities hoping to emulate Detroit’s success. As the old saying has it, nothing works but everything might. No one single strategy or program can turn around a city. But if we work across a hundred different fields, from schools to transit to entrepreneurship to neighborhood redevelopment, we can start to see some progress.

Someone asked me recently if Detroit’s comeback was still “fragile.” I replied, “No, but it’s incomplete.” Too many Detroiters still live in poverty. Our schools are still not getting the results for our children. Our crime rate, while remarkably better than in many years, is still too high. The next recession could still wreak great damage.

But Detroit has engineered so many successful efforts, from fixing its streetlights to the city’s bankruptcy to a more reliable bus system, let alone the glorious revival of the Michigan Central Station, that we no longer need fear falling back into the abyss.

But we do need to remember what got us here. So many players, from government to nonprofits to business to everyday citizens, all continue to have parts to play. We can’t neglect any sphere of urban life, from schools to transit to housing. We need to keep working on all of them.

And if we do, articles that proclaim Detroit America’s boom town will continue to be written for years to come.

Brew Detroit to close taproom to focus on beer distribution

By Jay Davis

e owners of a popular Detroit brewery have decided to make a shift.

Brew Detroit on Jan. 31 will close its taproom at 1401 Abbott St. in the city’s Corktown neighborhood, the business announced in a social media post. e owners plan to focus on the production and distribution of its beer.

Brew Detroit early last year reached a deal with AllPoints Distribution Network — the largest beer distributor in Michigan — that will see Brew Detroit products distributed in all 83 Michigan counties through AllPoints’ network of Anheuser-Busch distributors. AllPoints’ network includes 21 distributors.

e closure of the 7,000-square-foot taproom ends a 10-year run. In 2022, Brew Detroit debuted a new full kitchen, into which it invested more than $1 million, Crain’s previously reported.

e taproom o ers pizzas, sandwiches, salads and appetizers. A selection of 12 draft beers and six wines is also featured.

“It has been our honor and privilege to serve the Corktown and Detroit community for the last decade,” the post reads. “When we opened our Taproom in 2015, we sought to offer a variety of exceptional beers, what we found was community, through the exceptional people who decided to ll our space and collaborate with us over the years.”

Brew Detroit CEO Eric Lovell did not respond to Crain’s request for comment Jan. 3.

e taproom will continue to run during normal hours of operation until a farewell party planned for Jan. 31.

“It is with immense gratitude we thank every small business, non-pro t, artist, and community member we had the privilege to work with to bring great food, amazing events, and joy to our Taproom,” the post reads. “To our loyal patrons …. ank you. We will be forever grateful for the laughs, memories, and friendships. ere are still a few more to be made.

“Most importantly we thank our sta throughout the years, who have been the curators of countless memories and great experiences for our guests, and undoubtedly created the environment to make our Taproom a special place.”

Brew Detroit operates out of a 68,000-square-foot brewing and packaging facility in Corktown. It started as a contract brewery in 2012, then began

producing its own beer in 2015 and started distribution in 2017.

Brew Detroit o ers eight core and four seasonal brews. Its agship beer, Cerveza Delray, is a Mexican-style brew. Brew Detroit also produces Cloud 19 New England, Yumtown cherry-lime lager and Campin’ Beer blonde ale.

The Modern Law Firm.

Brew Detroit plans to focus on the production and distribution of its beer. | BREW DETROIT

Rift leaves 27,866 senior patients to seek new providers

By Dustin Walsh

Nearly 28,000 retirees in Michigan are likely seeking alternative care as Trinity Health and insurance giant Humana Inc. battle over reimbursement.

Livonia-based Trinity Health, with eight hospitals in Michigan and roughly 800,000 patients in 29 counties, stopped accepting Humana’s Medicare Advantage program on Jan. 1, demanding a higher reimbursement for care for seniors in the program.

Trinity physicians care for 27,866 Humana Medicare Advantage patients, the system confirmed to Crain’s in an email. Those patients are now out of network and their care at a Trinity facility or with Trinity physicians is no longer covered by their insurance. Trinity Medical Group has more than 150 practices across the state.

Medicare Advantage is a federal program that allows private insurers to sell Medicare plans, the federal health insurance program for people 65 and older. Typically, Medicare Advantage plans include not just inpatient and outpatient coverage, like traditional Medicare, but also include extra benefits such as prescription coverage.

Humana and Trinity have been negotiating for months but failed to come up with a new contract before the previous one expired on Dec. 31.

“From my perspective, it’s one 800-pound gorilla in a fight with another 800-pound gorilla,” Susan Moore, a longtime health insurer consultant and president and CEO of Managed Healthcare Resources Inc., told Crain’s. “Trinity, as a huge Catholic health system nationwide, may have tried to flex

muscles for asking a higher amount of remuneration than Humana wanted to pay.”

It’s unclear how close the two organizations are to reaching a deal, as negotiations are ongoing.

“Trinity Health continues to negotiate with Humana and will not give up trying to reach a fair agreement,” Bobby Maldonado, regional communications and public relations manager for Trinity, told Crain’s in an emailed statement.

Humana told Crain’s it is working with the Medicare Advantage members affected by the contract dispute to find alternative care with in-network providers.

“We continue to have good-faith discussions with Trinity Health

Father, son get prison time for commercial loan fraud in Troy

By Kirk Pinho

A New Jersey father and son each received federal prison sentences for their role in a commercial mortgage fraud tied to a large property in Troy.

Aron Puretz and his son Eli Puretz received a five-year sentence on Dec. 12 and a two-year sentence on Jan. 2, respectively, for taking part in a scheme that resulted in them and another investor acquiring the Troy Technology Park complex off of Interstate 75. Aron Puretz has since appealed his sentence, according to federal court records.

Both men are slated to have three years of probation after their release. Aron Puretz received a $250,000 fine, while his son received a $150,000 fine. Restitution in both cases was $22.2 million.

“We appreciate the time and effort the court took to ensure that the sentencing proceeding was fair and thoughtful,” said Sarah Krissoff, member of the New York City office of Philadelphia-based

law firm Cozen O’Connor LLP and Eli Puretz’s attorney, in an emailed statement.

An email was also sent to Aron Puretz’s attorney seeking comment.

The elder Puretz pleaded guilty in June to one count of conspiracy to commit wire fraud against a financial institution while the younger Puretz pleaded guilty to the same crime in August.

Federal prosecutors say the Puretz men and Boruch “Barry” Drillman, who has not yet been sentenced after a December 2023 guilty plea, were involved in orchestrating a multi-year conspiracy that snagged them tens of millions in fraudulently obtained loans.

In the scheme, they allegedly told lenders using bogus documents and straw buyers that they were paying far more for properties than they actually were, and then getting loans for millions more than was spent on them.

Among the properties caught up in the fraud was the 426,000-squarefoot, five-building Troy Technolo-

and remain open to renewing the contract if it’s fair to both sides,” Lisa Dimond, corporate communications lead for Humana, wrote in an emailed statement to Crain’s. “Humana maintains a strong network of high-performing providers that will help ensure our members continue to receive high-quality, effective, and affordable care. We understand that changing healthcare providers can be difficult, and we will work with our Medicare Advantage members to help them select new in-network providers to ensure their care is not interrupted.”

Luckily for those patients, most Trinity primary care locations are near competitors, but choices

could be limited. For example, there is only one alternative primary care office — operated by Corewell Health — in Hart, 23 miles south of Ludington, for Trinity patients.

But Moore said the last-minute announcement, which occurred only days before the new year, is damaging to patients as many were likely unable to change plans to keep their existing providers.

“You don’t mess with people’s doctors and relationships … Ever,” Moore wrote in an email. “People choose their plans based on the doctors and hospitals in the network.”

The rift between Humana and Trinity is just another event in a

nationwide battle against Medicare Advantage plans for health systems.

At least 32 health systems stopped accepting certain Medicare Advantage plans in the past few months, citing slow payments, outsized denial rates, low reimbursement and cumbersome prior authorization requirements. Chicago-based CommonSpirit Health, whose CEO Wright Lassiter III is the former CEO of Henry Ford Health in Detroit, stopped accepting Humana Medicare Advantage on Jan. 1.

Locally, Midland-based MyMichigan Health dropped Aetna Medicare Advantage at the start of the year.

gy Park east of I-75 and north of 14 Mile Road.

A $70 million purchase confirmed to Crain’s in 2020 by Eli Puretz ended up being fictitious and essentially a property flip between two related parties.

The actual purchase price was $42.7 million, prosecutors charged.

Drillman and Puretz allegedly represented to a lender that the sale was “arms length” — meaning that

the seller are buyer are not connected — when it fact it was not.

The lender foreclosed on the property and bought it out of foreclosure, according to commercial mortgage-backed securities data posted to CoStar Group Inc., a Washington, D.C.-based real estate information service.

A receiver was appointed in February and will continue to oversee the property during the

statutory six-month redemption period, according to the loan commentary.

Crain’s reported in February based on federal court filings that Wells Fargo N.A. provided at least $45 million in financing for the Troy Technology Park purchase. Wells Fargo said in its filings that it expects to take a large loss as “the loan balance far exceeds the market value of the property.”

Livonia-based Trinity Health system, with 88 hospitals nationwide and nine in Michigan, continues to struggle with high labor costs. | TRINITy HEALTH

The Troy Technology Park is near I-75 and 14 Mile Road. COSTAR GROUP INC.

5 key takeaways for the future of the automotive industry from Deloitte’s 2025 Global Automotive Consumer Study

By Jason Coffman, US Automotive Supplier Leader, Deloitte Consulting LLP and Jody Stidham, Managing Director, Global Automotive, Deloitte

As the Detroit Auto Show approaches, Deloitte’s 2025 Global Automotive Consumer Study offers crucial insights into the evolving landscape of the automotive industry. Here are five key takeaways that industry leaders in Michigan and beyond should consider:

1. Hybrid popularity rises as consumers seek fuel efficiency

Hybrid vehicles are gaining traction as a practical solution for consumers balancing fuel efficiency and emission reduction. In the U.S., the intent to purchase hybrid vehicles (HEV/PHEV) has increased by five percentage points year-overyear to 26%. This rise could reflect consumers’ desire for a “best of both worlds” solution to fuel costs. Meanwhile, interest in fully electric vehicles (EVs) has stagnated at 5%, and internal combustion engine (ICE) interest has declined by five percentage points to 62%. Automakers should view hybrids as a stepping stone to full electrification, addressing cost and range anxieties while EV adoption scales.

2. Brand switching is on the rise

Consumer loyalty is facing disruption, with over half of U.S. consumers surveyed (54%) planning to switch brands when purchasing their next vehicle, up from 51% last year. Product quality ranks highest in determining the next vehicle brand choice, followed closely by price and vehicle performance. As competition intensifies, automakers should focus on delivering superior value, innovative features, and reliable performance to help retain and attract customers. This trend underscores a need for automakers to continuously innovate and uphold high standards of quality to stay competitive.

3. Safety concerns slow autonomous vehicle adoption

Despite advancements in driverless technology, many consumers remain skeptical of fully autonomous vehicles due to safety concerns and lack of familiarity. More than half (52%) of U.S. respondents are uneasy about robotaxi services operating in their areas. Building consumer trust will likely require transparency, education,

and visible demonstrations of safety and reliability. For the automotive industry, this could mean investing in consumer education and more robust safety features to help alleviate concerns and foster acceptance of autonomous vehicles.

4. Charging at home remains the preferred choice

The demand for public charging infrastructure may be exaggerated, as 79% of U.S. EV intenders surveyed plan to most often charge their vehicle at home. Only 10% prefer to most often charge at public charging stations. This preference raises questions about the scale of public charging infrastructure investments. Automakers and policymakers should reassess infrastructure strategies to help prioritize home solutions while addressing barriers for renters and urban dwellers. For Detroit, this insight highlights the importance of developing home charging solutions that are more accessible and convenient for consumers.

5. AI and connectivity define the future of mobility

Technology is becoming a deciding factor for consumers, with an emphasis on seamless smartphone integration and advanced AI systems. More than 4 in 10 U.S. consumers aged 18-34 would be willing to give up vehicle ownership in favor of a fully available mobility-as-a-service (MaaS) solution. This trend presents an opportunity for automakers to differentiate by integrating advanced technology that can enhance user experience and build long-term brand loyalty. For the automotive sector, embracing MaaS and investing in cutting-edge technology could be crucial to attracting and retaining the next generation of consumers.

New law protects tenants who pay with housing assistance

By Nick Manes

New legislation in Michigan makes the source of one’s income for housing a protected class.

Gov. Gretchen Whitmer recently signed a package of bills that will outlaw some landlords “from denying a tenant housing based on their source of income,” according to a news release from Whitmer’s office. Specifically, the bills prohibit landlords with five or more rental units from denying occupancy to someone who pays their rent with housing assistance, such as Section 8 vouchers or veterans’ benefits.

The legislation essentially makes the source of income through which a tenant may pay rent a guaranteed protection, akin to gender or religion.

The bills had been making their way through the legislative process for months. The legislation was sponsored by state Sens. Mary Cavanaugh, Rosemary Bayer and Jeff Irwin of Redford Township, West Bloomfield and Ann Arbor, respectively.

“The bills also combat homelessness in Michigan by reducing the barriers folks have to overcome when finding housing in our state,” according to Whitmer’s news release. “These changes will help potentially 34,290 families afford a roof over their heads and will create more affordable housing options for Michiganders across the state, building on the Whitmer-Gilchrist administration’s commitment to ensuring anyone can ‘make it in Michigan.’”

By and large, landlord advocacy groups and housing providers were neutral on the bills and note that when landlords denied tenancy to those paying with vouchers, it was due in large part to the increased bureaucracy of working with the governmental or quasi-governmental agencies that ad-

minister such payment mechanisms.

“Our business won’t change” when the bills take effect this spring, said Andrew Kuhn, founder and CEO of Royal Oak-based property management company Sunrise Communities.

Kuhn — who also serves as president of the Apartment Association of Michigan trade association, which had a neutral position on the legislation — said the largest impact for him and other landlords will be additional training for staff on working with the voucher agencies, such as the Detroit Housing Commission, which administers Section 8 assistance in Detroit.

TriMas CEO to step down

By Kurt Nagl

TriMas President and CEO Thomas Amato is stepping down after an eight-year tenure marked by the revival of a key division, several divestitures and expansions into new product offerings.

Amato will remain with the Bloomfield Hills-based company through June 30 and maintain the CEO role until then, or until a successor is appointed, the company announced Jan. 6. He will not stand for re-election to the company’s board.

chapter of growth and value creation,” Parker said in the release.

TriMas (NASDAQ: TRS), whose largest business segment is in packaging, saw its stock value fall more than 4% to just under $23 per share as of Jan. 6. That share price is nearly 30% higher than in July 2016 when Amato took the helm.

Board Chair Herbert Parker called Amato a “valued leader” who helped build “a more focused company with a strong team,” according to a news release.

“The board and Tom believe now is the right time to undertake a search for Tom’s successor to lead the company through its next

Amato, who had a base salary of $750,000 as of April 2023, will receive a $1.6 million cash severance as part of a transition and separation agreement with the company, according to a Jan. 6 filing with the Securities and Exchange Commission.

Myriad pro-housing groups expressed support for the legislation, including the Michigan State Housing Development Authority, the Community Economic Development Association of Michigan and United Way of Southeastern Michigan, according to a bill analysis from the nonpartisan House Fiscal Agency.

Various pro-business and landlord groups were either neutral or opposed to the bills.

Similar to Kuhn, education for staff at landlord and property management companies will be the largest impact of the legislation upon taking effect, according to John Mione, COO and senior

attorney at Paletz Law in Troy.

Mione acknowledged the struggles that many tenants endure trying to find affordable housing and noted that the bills only make it so landlords can’t discriminate against those using Section 8 or other forms of government assistance. Prospective tenants could still be denied on other metrics, he said.

The legislation on its own is unlikely to be much of an investment deterrent for existing or would-be landlords, according to Mione.

However, the bills are cause for some concern when viewed through a broader lens, the attorney said, whose firm works with landlords and property manage-

ment firms throughout the state. The attorney pointed to ongoing challenges landlords face in courts, particularly in cases of eviction, where backlogs and bureaucracy often create headaches.

“It’s just another example of the difficult business environment that Michigan is becoming,” Mione said. “It’s contrary to the goal to solve the affordable housing crisis.”

Kuhn said he believes the bills will help improve access for those in need of housing who use government assistance to pay rent, but said any improved affordability will be indirect. Increasing housing supply broadly makes for a better solution, he said.

Additionally, Amato will receive a base salary for any special adviser service equal to half his CEO base salary rate, plus a truncated 2025 equity award including $600,000 in three-year time-restricted stock units and $900,000 in three-year performance-based target performance stock units.

Amato was credited with turning around the company’s aerospace division and “transforming TriMas’ business portfolio,” the release said. One recent example is the company’s decision to exit the oil and gas market in a bid to

shore up revenue and curb a profit crash.

TriMas has approximately 3,400 employees in 13 countries.

“It has been an honor for me to have led a company with such outstanding businesses over the past several years, and I thank the board and our leadership teams for their commitment along this journey,” Amato said in the release. “I am confident that TriMas is well positioned for future growth as we continue to focus our portfolio and align our businesses with customer demand.”

New legislation in Michigan essentially makes the source of income through which a tenant may pay rent a guaranteed protection, akin to gender or religion. | BLOOMBERG

TriMas makes its headquarters in Bloomfield Hills. | COSTAR GROUP INC.

Thomas Amato

Automakers’ ambitious bets on tech face a reckoning

By Pete Bigelow, Automotive News

The decadelong attempt by legacy automakers to transform into technology and mobility companies has reached a crossroads.

Beset with imminent challenges — the loss of global market share to rising China upstarts, a costly electrification transition and software-related struggles — they’re shedding ambitious bets on projects like robotaxis and retrenching around their core businesses.

General Motors Co. became the latest in early December, shelving its Cruise robotaxi business. Only a year ago, executives believed it would bring in $1 billion in revenue by 2025. Now, GM has refocused the Cruise team on exploring autonomy in personally owned vehicles “in a pragmatic and capital-efficient manner,” CFO Paul Jacobson told analysts.

Balancing the quarterly demands of Wall Street while maintaining investments in long-term innovation is always a tricky business, but Grayson Brulte, founder of market insights firm Road to Autonomy, worries American automakers are sacrificing their ability to compete in the future with companies like Tesla and Waymo.

“This business is changing and Detroit has to have a long look in the mirror and decide where it wants to go,” he said.

It is not only Detroit. Across the globe, legacy automakers are in the throes of a reckoning that comes as the guts of vehicles change from mechanically driven and combustion-powered to software-centered electric propulsion.

Volkswagen has sought wage reductions and factory closures in Germany, the latter for the first time in its 87-year history. Nissan is reducing global production by 20% to manage bloated supply and rising costs, and is engaged in discussions to merge with fellow Japanese automaker Honda next year as one means to pool resources and better compete with Chinese electrics.

“At the same time some companies are losing their largest profit drivers in China, they’re facing additional competition from a lot of the Chinese OEMs now venturing out into other geographies,” said Philipp Kampshoff, leader of consulting firm McKinsey & Co.’s Center for Future Mobility.

Chinese manufacturers have gone from exporting 1 million cars per year in 2020 to 6 million per year in 2024, according to Council on Foreign Relations figures.

Western automakers are now saying, “I’m capital-constrained, and I can only make so many bets,” Kampshoff said.

GM, Ford, VW, Hyundai on robotaxi retreat

Robotaxis are increasingly falling off the list.

Ford Motor Co. and Volkswagen shuttered their self-driving startup Argo AI in October 2022, with Ford CEO Jim Farley saying at the time that “profitable, fully autonomous vehicles at scale are a long way off.”

Ford spun some Argo technology and workforce into a new subsidiary called Latitude that focused on developing more sophisticated driver-assist technology. Hyundai bought out its partner on a self-driving joint venture called Motional in May, then pivoted the subsidiary away from robotaxi service and toward developing driver-assist systems.

After investing approximately $10 billion into Cruise, GM now follows their path, with personally owned AVs a glimmer on its longterm horizon.

“You just need a sheer amount of exhaustive capital to do this,” said Martin French, managing director of Berylls Strategy Advisors.

GM sought outside investment in Cruise before ending its robotaxi pursuits, but the lack of interest should be little surprise: More than 95% of the $900 billion invested in autonomous, electric and connected vehicles since 2011 has gone to startups rather than established car companies, according to McKinsey statistics.

Big bets compete with core business

In some circles, GM’s decision to abandon robotaxis reprises previous moments in which the automaker pioneered groundbreaking technology only to get cold feet along the road to commercialization, such as its development of the EV1 electric vehicle, skateboard platforms and the Chevy Volt plug-in hybrid.

The Volt “was practically the main reason for keeping the company alive during bankruptcy, and then it was cast aside,” Gartner analyst Michael Ramsey said. “I remember thinking, ‘God, this is crazy that they’re giving up on this technology that they are the clear leader in.”

Elsewhere, robotaxi struggles are emblematic of traditional automakers’ across-the-board struggles to monetize experiments with micromobility devices such as scooters and e-bikes, fractional ownership, car sharing, vehicle subscription services, in-vehicle marketplace exchanges and driver-assist features.

Further, a belief that data streaming from vehicles could be mined for consumer insights and revenue streams has proven wrongheaded, French said.

“Everybody believes they can monetize data, but nobody has done it,” French said.

Such experiments might work if

they’re separated from their parent companies and girded for the long haul, Kampshoff said. But that’s usually not the case. When parent companies face broader difficulties with the core business, such as the auto industry today, a focus returns to revenue growth, near-term return on investment and earnings before interest, taxes, depreciation and amortization.

“The new business that you’re trying to incubate is always going to look really bad, at least in the near-term,” Kampshoff said.

Long-term survival hinges on partnerships

In parallel, legacy automakers have endured pains in transitioning toward software-defined vehicles.

Software underpins industry efforts to improve cars over time with over-the-air updates. It can handle such diverse tasks as managing battery systems in new electric powertrains, provide vast in-cabin infotainment offerings and enable sophisticated driver-assist features.

Software content in vehicles has grown 200%-300% since 2015, according to McKinsey research. But traditional manufacturers “have shown they aren’t nearly as competent as their tech-native competitors” in writing code and speeding their go-to-market strategies, according to the firm.

“Incumbents still haven’t

cracked the code, for the most part, on how to be really great in software,” Kampshoff said.

He suggested the problem lies not in the workforce that automakers have tried to build, but in the executive ranks, where key performance indicators and yearslong development cycles have not yet fallen into sync with a software-defined age.

CARIAD, Volkswagen’s inhouse software unit, has endured persistent problems, restarts and management shifts since its 2020 founding and come to symbolize the industry’s software struggles, experts said. It lost more than $2 billion in the first three quarters of 2024 alone, according to financial disclosures.

Volkswagen may have found an answer: It is spending $5 billion on a joint venture with electric startup Rivian that, at least initially, revolves around software.

Such partnerships, whether they involve software, propulsion technology or autonomy, will be the key for traditional automakers navigating rising global trade tensions, high-tech competitors and stagnating sales, French said.

It is an idea that Sergio Marchionne, the late Fiat Chrysler Automobiles CEO, advocated for during his tenure. His 2015 presentation, “Confessions of a Capital Junkie,” has recently recirculated in automotive executive suites, experts said.

It noted emissions regulations were driving costly powertrain development and that new technologies like enhanced infotainment and autonomy were raising capital requirements.

“Consolidation is the key to remedying the problem,” Marchionne wrote.

That’s proven prescient, and the Nissan-Honda talks may be the first convulsion in what lies ahead.

“As the competition from the Chinese gets more real and people see how good the product is, I think it’s those partnerships at a technology and even a manufacturing level that will be key for a lot of OEMs to survive in the next five to 10 years,” French said.

GM Cruise robotaxis in San Francisco in a photo from 2022. GM announced it was winding down the Cruise effort late last year. | DaVID PauL MOrrIS/BLOOMBErG

Ford and Volkswagen shut down their Argo AI autonomous vehicle venture in 2022. MarK

KauZLarICH/BLOOMBErG

As EV fever cools off, what happens to battery plants?

By Kurt Nagl

Over the past three years, Michigan competed aggressively for electric vehicle battery projects as companies rolled out plans for multibillion-dollar factories representing the future of the automotive industry.

EV fever has since died down.

Automakers including Ford Motor Co. and General Motors Co. have addressed weaker-than-expected demand by dialing back factory plans and in some cases exiting from and shrinking them.

Battery giants like LG Energy Solution are juggling potential excess capacity amid massive expansion plans. China-linked battery makers CATL and Gotion are still dealing with community pushback on projects that became political landmines.

Meanwhile, sentiment against corporate incentives has grown stronger among critics and some lawmakers who have pointed to project disruptions and community resistance as proof points that Michigan’s economic development strategy needs fixing.

But Quentin Messer, the state’s top economic development official, said he rejects the notion that the EV battery plants might be boondoggles.

“Back in the Granholm administration, Michigan made a big push in batteries, and there were some things that didn’t work out well, and everybody kind of retreated,” Messer told Crain’s in an interview. “Can you imagine if we had continued going forward, what a profound advantage we would have had, because at some point there are going to be other propulsion systems.”

To that end, Messer said, the state will continue pursuing other battery and advanced mobility projects even as many of those secured have yet to launch.

It was never the expectation that the jobs promised for these battery plants would have materialized by now, Messer said. Anticipated employment for the first project backed by the Strategic Outreach and Attraction fund, or SOAR — a controversial business attraction fund — is not until 2027, for example. (More on that project in a bit).

“If you look at the actual dollars that have been disbursed from these grants relative to the private investment, I think what you’ll see is, on average, at least two-and-ahalf dollars of private investment for every dollar disbursed under these grants,” Messer said. “I like that. I’ll take that because that’s real money, real investment, coming into the state in anticipation of hiring Michiganders.”

Here’s a look at where EV battery projects in Michigan stand:

Ford Blue Oval Battery Park in Marshall

When Ford confirmed plans for a $3.5 billion, 2,500-jobs EV battery factory in Marshall in early 2023, it was a bit of redemption for Michigan in its quest to maintain automotive dominance.

Ford sent shock waves through the state in 2021 when it announced that it would be venturing away from home to invest $11 billion in EV plants and create thousands of jobs in Kentucky and Tennessee. It was the impetus for launching the SOAR fund, initially a $1.5 billion economic “toolkit.”

In late 2023, Ford announced it would cut the Marshall project by roughly a third, to $2.2 billion and 1,700 jobs. Michigan eventually slashed incentives for the project from more than $1 billion to $409.1 million.

The incentives that have been disbursed so far are $103 million in Strategic Site Readiness Program funding to the Marshall Area Economic Development Alliance for the project, according to the MEDC.

Construction of the scaleddown plant was more than 20% complete as of July, and the automaker said it remains on track to begin producing lithium iron phosphate battery packs, with help from Chinese battery giant CATL, in 2026.

Our Next Energy in Van Buren Township

Novi-based Our Next Energy (ONE) is working to stay afloat after its EV battery startup stardom faded into financial struggle. Investors balked on a critical fundraising round, resulting in layoffs, leadership changes and a paused build-out of its factory in Van Buren, where it planned to invest $1.6 billion and employ 2,112.

The company entered a strategic partnership with Foxconn in June in its pursuit to remain a going concern, Crain’s reported. The companies have yet to confirm the partnership and its status is unclear.

ONE employs 50 people at the Van Buren Township plant and will add more as additional phases of

construction are completed, spokesman Dan Pierce told Crain’s.

“The first phase of the build out, the completion of a dry room, has allowed ONE to build prototype LFP cells at ONE Circle,” Pierce told Crain’s in an email.

Additionally, the company began producing commercial battery packs at its Novi location after its contract manufacturing agreement with Piston Group ended. Customers for those packs include Bollinger, The Shyft Group and Motiv.

The state approved roughly $200 million worth of incentives for the Van Buren plant. It has so far received $70.2 million in Critical Industry Program grant funding, according to the MEDC.

“ONE continues to receive SOAR funding from the state of Michigan to support the build-out of its battery cell factory and will continue to do so as long as the company meets all of the agreed upon benchmarks for the facility which is scheduled to be completed and at capacity by 2027,” Pierce said.

Gotion battery plant near Big Rapids

Gotion’s planned $2.4 billion factory and 2,350 jobs near Big Rapids has been a lightning rod for controversy since the second the Chinese battery maker tried to plant its flag in West Michigan.

The project, announced in 2022, has spurred a lawsuit, community protests, heated anti-China rhetoric from Lansing to Washington, D.C., and a wholesale recall of local township board members. The factory footprint has also gone through numerous iterations, with various changes to square footage and a slight shift in location to keep out of another township opposed to it.

Still, the company appears to be moving forward with the project

despite an ongoing lawsuit with Green Charter Township to stymy it. Gotion began clearing land for the plant early last year and won a key ruling later in the summer allowing it to move forward.

The company is clamming up, though.

“Due to ongoing legal proceedings involving the Green Charter Township Board, Gotion has chosen to temporarily pause public statements to respect the legal process and ensure fairness,” the company said in a statement. “However, this will not affect its ongoing commitment to advancing the project. We look forward to resuming communications and sharing more exciting updates once these matters are appropriately resolved.”

Chuck Thelen, vice president and general manager for Gotion, did not return a request for comment.

The state approved $715 million worth of incentives for the project.

So far, it has received $50 million of Strategic Site Readiness Program funding through West Michigan economic development agency The Right Place, according to the MEDC.

LG Energy Solution in Lansing

LG Energy Solution has recently undertaken several large investments in Holland on the west side of the state, and its soon-to-be dissolved GM joint venture battery plant in Lansing recently wrapped up construction.

The battery manufacturer announced a year ago it would invest $3 billion at a plant in Holland to make cells for Toyota that would be shipped to the Japanese automaker’s plant in Kentucky and assembled into battery packs. At the same time, LG is wrapping up a

$1.7 billion expansion and gearing up for an additional $2.5 billion expansion in Holland.

Following GM’s planned exit from the Ultium Cells JV in Lansing, LG is considering using the plant in Lansing to supply cells to Toyota Motor North America, Crain’s reported Dec. 19.

It is unclear how shifting production to Lansing might impact LG’s large-scale expansions on the west side of the state.

LG spokesman Phil Lienert said acquiring the Lansing plant fits its goal to “optimize our investments in North America and also respond to the needs from global automakers.” The company did not confirm or deny plans to build cells for Toyota in Lansing and said “there are no changes or updates to share at this time” regarding investment in Holland.

The state supported the Lansing plant with a $666 million cash grant package — the first payout from the SOAR fund — which also helped fund GM’s Orion Assembly Plant expansion. The GM-Ultium project received a $120 million Critical Industry Program grant and a $66.1 million Strategic Site Readiness Program grant through the Lansing Economic Area Partnership, according to the MEDC. Messer told Crain’s on Dec. 19 that the state would seek to renegotiate its incentive deal with GM in light of the automaker pulling out of the Lansing plant.

“One of the things that collectively we’ve said is that we will have to go and renegotiate those grants agreements because now GM will not have any employment at (the Lansing plant),” Messer said. “Their sole employment is going to come from the Lake Orion facility, and so that’s going to require us to do a rewrite of those agreements that we’ll be undertaking the first quarter of calendar year 2025.”

Ford Motor Co. said last summer that its Blue Oval Battery Park in Marshall was more than 20% complete and is on target to start production in 2026. | FORD MOTOR CO.

EV battery maker Samsung SDI to lay off 179 in Oakland County

By Kurt Nagl

Samsung SDI America Inc. plans to lay o 179 workers in Auburn Hills, home to its automotive battery headquarters, where the manufacturer has committed more than $100 million in recent years.

e company will make the permanent cuts Feb. 24-28 at two locations: 4121 N. Atlantic Blvd. and 50 Continental Drive, according to a WARN notice sent to the state, dated Dec. 18.

More than 100 of those jobs impacted are plant operators. ere are also 18 engineers and 15 technicians set to lose their jobs. None are represented by a union.

Crain’s inquired with a Samsung SDI spokesperson and the company’s human resources director for more information.

While a cause for the layo s was not provided, it follows similar actions taken by electric vehicle battery manufacturers as slower-than-expected EV demand meets production overcapacity in Michigan and elsewhere. EVs are gaining in market share in the U.S. but not to the extent automakers such as Ford Motor Co. and General Motors Co. forecast when committing tens of billions of dollars to new electri ed factories. Suppliers, including Samsung SDI, followed suit with their own large-scale investments.

Samsung SDI, a subsidiary of South Korean giant Samsung Group, said in late 2023 it would invest $41 million in its Auburn Hills plants and create 368 jobs. In 2019, the company opened its $62.7 million EV battery pack plant and headquarters, saying at the time it expected 461 jobs by the end of 2024.

It is not clear how many employees will be in Auburn Hills following the layo s.

Since 2018, the Michigan Economic Development Corp. has awarded the company $15 million in cash grants and approved tax abatements to support expansion. e agency “chose to mutually terminate” its 2023 agreement with Samsung SDI, which called for a $5 million grant, and the company did not receive the funding, according to the MEDC.

“As for its 2018 performance-based incentive award, Samsung successfully completed its milestones and as a result, that incentive is no longer active,” MEDC spokeswoman Courtney Overbey said in an email.

PEOPLE ON THE MOVE

CONSTRUCTION

Granger Construction Company

CONSULTING

ChoiceTel

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

HEALTHCARE

Authority Health

INSURANCE

Lockton

Midwest firm Granger Construction is proud to announce the promotion of Chris Duprey, CPA, CCIFP, to the role of Executive Vice President, CFO. Chris joined Granger in 2013 and has been instrumental in providing financial oversight as well as managing banking, surety and risk management relationships for this ENR Top 400 ranked company. Chris holds a Bachelor’s in Business Administration from the University of Michigan and a Master’s in Professional Accountancy from Walsh College.

CONSTRUCTION

Granger Construction Company

ChoiceTel, a certified Women Business Enterprise, is pleased to announce Karla Thomas has joined our team as an Executive Technology Strategist. “With over 30 years of experience collaborating with global business leadership, leveraging technology for business initiatives, and mentoring colleagues, Karla’s expertise will be a huge asset to our clients,” said Diane Smith, ChoiceTel CEO. Since 1994, ChoiceTel has been consulting with enterprise clients on their technology and cybersecurity needs.

FINANCIAL SERVICES

CG Financial Services

Midwest firm Granger Construction is proud to announce the promotion of Rob Train, LEED GA, to the role of Executive Vice President, Operations. Rob joined Granger in 2001 and has held successive key roles including Regional and Preconstruction Director and Market Lead. Rob holds a Bachelor’s in Construction Management from Michigan State University, has served as Councilman and President for the Village of Sheridan, MI and is a member of the Central Montcalm Public Schools Board of Education.

CONSTRUCTION

Granger Construction Company

Midwest firm Granger

Construction is proud to announce the promotion of Tim VanAntwerp, P.E., Esq., Project

Executive, to the role of Executive Vice President, Business Development. Tim joined Granger in 2000 and currently leads Granger’s Business Development team, while also supporting Risk Management and Higher Education project delivery. Tim earned his Bachelor’s in Civil Engineering at Michigan State University and his Law Degree at Wayne State University.

CG Financial Services announces the hiring of Scott Hiipakka as President and Chief Operating Officer. The appointment comes as the firm, which manages more than $4 billion in client assets, expands its leadership team to drive continued growth and success. He previously served as CEO of the Michigan Israel Business Accelerator, a nonprofit economic development organization that has brought millions of dollars in investment to Michigan. Hiipakka is also a U.S. Army National Guard Major General.

FINANCIAL SERVICES

Northstar Bank

Tonya Gietzen has been promoted to Executive Vice President, Chief Lending Officer. With nearly 30 years in the banking industry, she will oversee and lead all lending activities at Northstar Bank, including developing and implementing strategic initiatives. As Northstar Bank recently exceeded $1 billion in assets, Tonya looks forward to building upon the success and continuing to focus on the bank’s core strengths.

We are pleased to welcome Tyra L. Evans, MHSA as Chief Operating Officer for Authority Health. She is a participatory leader with over 20 years of health care experience. She holds a B.A. and an MHA from the University of Detroit Mercy in Health Services Administration. Her leadership and business development expertise will further our objectives of increasing population and public health in Michigan and offering first-rate clinical care. Tyra makes free time to enjoy reading, travel, and family.

HEALTHCARE

Alessandro McMann transitioned to a Client Advocate with Lockton, specializing in Property and Casualty. Most recently, he was an Account Executive. He will focus on building and enhancing relationships by deeply understanding client needs. Alessandro was born and raised in Detroit. He attended Grand Valley State University, where he earned a Bachelor of Business Administration, with a focus in accounting and finance.

IT

Granite Networks

Accounting firm merges offices, steps into HR market

By Anna Fifelski

Yeo & Yeo, a Saginaw-headquartered CPA firm, is merging two of its metro Detroit offices.

Karmanos welcomes Nithin Peddireddy, M.D., otolaryngologist (ENT) and surgical oncologist. He specializes in benign and malignant head and neck neoplasms (i.e., mouth, jaw, and throat cancers, salivary gland masses, melanoma, and skin cancers of the face, neck, and scalp), advanced head and neck surgeries, and comprehensive reconstruction utilizing rotational flaps and microvascular surgery with free flaps. Dr. Peddireddy is part of Karmanos’ Head and Neck Oncology Multidisciplinary Team.

HEALTHCARE

ONL

Therapeutics

ONL Therapeutics, a clinical-stage biopharmaceutical company, appointed Penny Fleck, MT, MBA as chief development officer. Fleck, who has 20 years of experience leading R&D strategies at Fortune 500 pharmaceutical companies, will oversee development of ONL1204 Ophthalmic Solution as the company advances toward a planned phase 2 clinical study in Dry AMD/GA. She previously served as vice president and global head of specialty ophthalmology clinical development at Johnson & Johnson Innovative Medicine.

We are pleased to announce the appointment of Joshua Payne as Business Development Manager at Granite Networks. With extensive experience in account management, customer success, and sales from companies like LinkedIn and Microsoft, Joshua has a proven ability to assist clients in modernizing systems, addressing technological challenges, and maximizing value while minimizing costs. We look forward to his positive contributions to our team.

MANUFACTURING

LIFT/ALMMII

The firm acquired Bloomfield Hills-based Berger, Ghersi and LaDuke PLC in July, and is relocating employees from that office and its Auburn Hills location to a new office in Troy.

Yeo & Yeo is leasing the space, Kimberlee Dahl, director of marketing for the firm, said in an email, but did not disclose the cost of the buildout for the 14,000-square-foot space.

“A few factors led to this strategic decision. First and foremost, it was bringing our Auburn Hills and Bloomfield Hills professionals together under one roof to foster greater collaboration and connections,” Dahl said.

Both offices were already nearing capacity and didn’t have space to combine the team and account for future growth, Dahl said. The office will bring together a team of more than 30 employees, creating the firm’s second-largest office.

LIFT, the Department of Defense-supported national advanced materials manufacturing innovation institute, operated by the American Lightweight Materials Manufacturing Innovation Institute (ALMMII), announced two new additions to its Board of Directors.   Del Costy serves as Managing Director, Americas for Siemens Digital Industries Software and President of Digital Industries (software and automation) in the U.S. The Siemens’ Xcelerator portfolio is installed at LIFT headquarters.   Harris Ng is a Senior Partner at Detroit-based Kearney, specializing in electrification, mobility, product development, supply chain, and advanced manufacturing. One of Kearney’s Digital Model Factories is located at LIFT’s Detroit headquarters. Ng

“Our new office reflects our commitment to growth in Southeast Michigan,” principal and board member Tammy Moncrief said in a news release. “Last year, Yeo & Yeo welcomed 50 new hires firm-wide. This space positions us for future expansion while creating opportunities for collaboration and connection among colleagues.”

Yeo & Yeo also recently acquired Ypsilanti-headquartered advisory firm Amy Cell Talent effective Jan. 1, which will be rebranded as Yeo & Yeo HR Advisory Solutions. The acquisition created a new human resources and talent acquisition entity for the firm and added more than 25 employees. Amy Cell is the president of the newly created Yeo & Yeo HR Advisory Solutions.

“We are excited to welcome Amy Cell Talent’s professionals to the Yeo & Yeo team,” David Youngstrom, Yeo & Yeo’s president and CEO, said in a news release. “This partnership enhances our ability to meet our clients’ HR needs, helping them succeed in new and exciting ways.”

The Yeo & Yeo HR Advisory Solutions team will continue to be based in Ypsilanti at the Spark East Innovation Center.

Yeo & Yeo has nine offices in Michigan, located in Alma, Ann Arbor, Flint, Kalamazoo, Lansing, Midland, Saginaw and Troy, with a satellite office in Southgate.

Costy

Barbara Ann Karmanos Cancer Institute

Yeo & Yeo’s new Troy office in the Troy Corporate Center II at 880 W. Long Lake Road COSTAR GROUP INC.

One of Michigan’s largest accounting firms expands

By Anna Fifelski

One of Michigan’s largest accounting firms is continuing to expand.

Farmington Hills-based certified public accounting firm UHY LLP announced Jan. 6 it acquired the nearby Farmington Hillsbased accounting firm of Tama, Budaj & Raab PC, effective Jan. 1, according to a news release.

“We are very excited to join UHY. Our firm has enjoyed success over the years thanks to our talented team and wonderful clients. There is great chemistry between the two firms and a strong alignment and vision for the future,” TBR Partner Jeffrey Budaj said in the release.

UHY ranked as Michigan’s eighth largest accounting firm in 2024, with 592 employees in Michigan, according to data compiled by Crain’s Detroit Business.

All 12 professional and administrative team members from TBR will relocate to UHY’s Farmington Hills office and continue in their current roles.

“UHY is thrilled to welcome TBR to our growing and entrepreneurial firm,” Tom Callan, UHY’s Great Lakes regional managing director, said in the release. “TBR has built a reputation for serving clients exceptionally and we look forward to working collaboratively with them to continue to deliver superior service.”

UHY’s 2024 revenue was $400 million, a representative for the firm told Crain’s. The company declined to disclose any financial terms related to the transaction.

The firm is also expanding its national footprint, announcing Jan. 6 it acquired the 30-person Botz Deal & Company PC firm in St. Louis.

UHY has nine offices across the state, including in Ann Arbor, Cadillac, Detroit, Dowagiac, Farmington Hills, Kalamazoo, Port Huron, Sterling Heights and Traverse City, and more than 40 offices across the U.S. with more than 1,000 team members.

In 2022, Crain’s ranked UHY Advisors Inc. as one of Michigan’s 50 fastest growing companies.

Business groups unsuccessfully lobbied the Democratic-led Legislature to make several revisions or clarifications to the pending Earned Sick Time Act, including continued exemptions for small businesses. They wanted the sick time requirement to not apply to people working fewer than 20 hours a week, seasonal employees, temporary workers, independent contractors and subcontractors. Businesses also proposed, among other things, requiring a sick time notification before the start of a shift, saying the new law will let an employee “no call, no show” for up to three days. Republicans took control of the House this month, giving the business lobby some hope. But Senate Democrats and Gov. Gretchen Whitmer will continue to face pressure from unions and other supporters of the law to not touch it.  It started as a ballot initiative in

2018, one that Republicans who controlled the Legislature at the time passed — rather than let it go to voters — and scaled back to be more workable for businesses. The high court struck down the tactic.

Eighteen states have paid leave laws. Michigan’s 72-hour yearly mandate will be the most generous, according to the U.S. Labor Department.

Minimum wage

On Jan. 1, the minimum hourly wage increased to $10.56 from $10.33 under another law that began as a ballot proposal in 2018 before it was approved and watered down by Republicans in a maneuver the Supreme Court invalidated almost six years later. Tipped workers’ minimum rose to $4.01 from $3.93. They can be paid that rate as long as it, plus tips, equals at least the regular minimum.

On Feb. 21, the original ballot initiative will take effect. The $10.56 minimum will go to $12.48, $13.29 in

2026, $14.16 in 2027, $14.97 in 2028 and rise with inflation each year after. The lower tipped wage will gradually go up until matching the regular minimum in 2030.

Restaurants, bars and other hospitality businesses failed to persuade Democrats to keep intact the tip credit in December, prompting House Republicans and one House Democrat to boycott the last three session days and halt the Democratic majority’s ability to vote on other bills.

The industry warns of economic repercussions, including restaurant closures and price increases, from an almost $2 spike in the tipped wage next month combined with the sick time expansion. Proponents of ending the subminimum base wage say it is outdated and unfair to servers.

Unemployment benefits

Whitmer recently signed Senate Bill 40, which will extend how long Michiganders can get unemploy-

ment benefits to 26 weeks from 20 weeks and boost the maximum weekly benefit. The law will go into effect April 1.

Michigan is one of 12 states to provide fewer than 26 weeks of benefits in a year, according to the governor’s office.

The current max benefit, $362, has remained steady for 22 years, ranks ninth-lowest nationally and

is the lowest in the Great Lakes region. It will rise to $446 in April, to $530 in 2026, to $614 in 2027 and, each year after, to an inflation-adjusted amount.

The business community opposes the increase because employers will pay higher taxes to fund the benefits. Backers say the expansion is overdue and will help the jobless pay the bills while looking for employment.

Ishbia’s counterpart at Detroit-based Rocket Companies Inc., Varun Krishna, was also bullish going into the new year, telling analysts in November that while short-term challenges will be ever-present, the company is working to take the longer view.

Mortgage interest rates this year are expected to settle around 6% for a 30-year fixed rate — around the lowest point seen in 2023 — and amount to the “new normal,” according to Lawrence Yun, chief economist of the National Association of Realtors.

“Home buyers will have more success next year,” Yun said in a

statement in December. “The worst of the affordability challenges are over as more inventory, stable mortgage rates and continued job and income growth pave the way for more Americans to achieve homeownership.”

But those typical life circumstances mentioned by Schneider are always present in the market, argues Joe Fuca, a mortgage lender with brokerage Simple Home Lending in Macomb Township.

Still, 2025 “is going to be the magic year” for the golden handcuffs to break, Fuca contends. Should mortgage rates drop below 6%, he expects that will be enough to move the needle for many to shed the home that’s tied to their lower rates.

“I’m very confident,” Fuca told

Crain’s when asked whether he expects rates to drop below 6% this year. “I think the market is screaming for it.”

Whether those golden handcuffs fully break this year or are just slightly loosened remains to be seen. But most forecasts call for a similar housing market thisyear as what’s been seen last year.

Online brokerage firm Zillow last month forecast that national home sales in 2025 will grow 7.5% from 2024 to about $4.3 million sales. The company expects home values to grow about 2.6%.

Closer to home, Realtor.com predicts home sales in metro Detroit to grow 2.4% year over year and prices will increase about 6.2% from 2024.

of exp in IT or rltd occupation. MUST HAVE THE FOLLOWING SKILLS: Exp w/ RPA. RPA Dvlpmt using UiPath Studio. RPA Modification using UiPath Studio. Configuration of UiPath Orchestrator. Scheduling of Unattended RPAs using Orchestrator. Exp translating biz reqs / functional specs into tech specification docs. Ability to engage biz users to extract & document reqs for dvlpmt of RPA processes. Ability to create process flow diagrams to rep processes targeted for automation. Ability to debug process automations. Ability to write test cases. Ability to execute test cases & rprt results. Exp w/ UiPath Automation tools. Exp w/ MS Power Apps. Exp in unit tstng, developing/testing application interfaces & integration tstng. Employer will accept any amount of exp w/ the req skills. To apply for this pos: Pls access: https://workforcenow.adp.com/mascsr/default/mdf/recruitment/recruitment.html? cid=23354965-305e-4328-8f00d2192aa6b2d5&ccId=19000101_000001&lang=en_US&selectedMenuKey= CareerCenter&jobId=544780 to apply & send resume. Niterra North America Inc. is an Equal Opportunity/Affirmative Action Employer.

Packaged Application Development Manager (Accenture LLP; Detroit, MI): Manage project execution to ensure adherence to budget, schedule, and scope. Must have willingness and ability to travel domestically approximately 80% of the time to meet client needs. Multiple Positions Available. For complete job description, list of requirements, and to apply, go to: www.accenture.com/us-en/careers (Job# R00251785). Equal Opportunity Employer – Minorities/Women/Vets/Disabled.

UHY is headquartered in Farmington Hills. | COSTar GrOuP nC.

or its activation requirements, said Luke Polcyn, senior executive for development and economic transformation for the city. The city has issued remediation notices to the development team.

“The expectation was by this time that project would be well on its way,” Polcyn said. “This has been going on for a very long time … I worked at the land bank when the deal went to City Council; my daughter had just been born … my daughter has braces now.”

City sets a deadline

Castellano has been working in the Virginia Park neighborhood since 2015, when City Council first approved his purchase of the Herman Kiefer site for $925,000 — a deal that was officially finalized in 2018.

The purchase included the vacant buildings on the property including the 424,000-square-foot Herman Kiefer medical complex, which closed in 2013; Crosman Alternative High School, a former Detroit public school that closed in 2007; and the former Hutchins Middle School that closed in 2009.

Castellano said he has invested $13.4 million since 2018 into the Herman Kiefer property including “an enormous amount of cleanup” to fix “everything that was in disrepair from the city’s ownership.” In this process, 5.3 million pounds of debris was removed from inside and outside of the buildings, asbestos abatement was completed and long-term maintenance plans were established for the lots on the property including 24/7 security at the site.

The master development agreement requires that by the sixth anniversary of the deal’s closing, or February 2024, the developer must have invested at least $20 million in the project and/or “activated” at least 35% of the floor area and land on the site. Additionally, the investment commitment could be satisfied if the developer submits to the city evidence that the developer or third-party developers have paid or incurred aggregated costs.

Castellano said the development met this benchmark through the use of the site’s parking lots, baseball fields and basketball courts. However, city officials countered the developer’s statement, as the buildings on the site remain vacant — with one future tenant announced.

“There are obligations under the development agreement to keep it secured and maintained from an aesthetic standpoint … That stewardship or that caretaker role, is something I think he did seriously, and so I’ll acknowledge that,” Polcyn said. “But that said, I think Ron has honestly done very little more than (cleaning up the property), and the activations have been temporary at best, and in no way meet the expectations of the city at the time that we entered into this developer agreement.”

Polcyn previously advocated for Castellano before a November 2021 Detroit City Council vote on a proposal to give residents a chance to

buy houses and lots around the Herman Kiefer redevelopment and, in turn, remove a clawback clause from the developer’s contractor, which was ultimately turned down.

Polcyn, who was the city’s deputy group executive for jobs and economy at the time, said Castellano had “proven himself” at meeting the development agreement, noting the developer had invested more than $8 million — which was more than the $3 million required at the time.

Three years later, the city believes the project has not seen the same progress. As a result, the city sent its notice of an uncured default and an exercise of remedies to Castellano on Dec. 6.

This process means Castellano has six months to do one of two things: Meet the development obligations or deed the property back to the city free and clear of encumbrances including mortgages and back taxes, Polcyn said.

Dispute with the land bank

In 2017, Castellano entered a separate but related deal with the Detroit Land Bank Authority giving him the option to buy 117 empty homes and more than 300 vacant parcels within one to three blocks around the hospital and schools, Crain’s previously reported.

So far, Castellano said he has invested $2 million into the more than 100 Virginia Park houses purchased from the land bank. Of the 15 houses renovated in Phase I along West Philadelphia Street and Lee Place, 14 have sold and one is a rental. Twenty houses are undergoing renovations in Phase II and 13 houses are planned to be renovated in Phase III. Of the remaining houses, 13 are available for developers and 52 are being renovated by third-party developers, Castellano said.

But Castellano is also encoun -

tering issues with his work to renovate the homes. In 2024, the Detroit Land Bank Authority reconveyed 42 homes from Herman Kiefer Development, Polcyn said.

In a statement to Crain’s Polcyn wrote: “HKD was required to rehabilitate 20 houses by November 30, 2023. The DLBA reconveyed 19 of these properties on June 21, 2024. The DLBA returned two to HKD upon delivery of additional documentation. 17 houses remain reconveyed and in DLBA ownership. HKD was required to rehabilitate an additional 25 houses by July 31, 2024. HKD failed to do so and the DLBA reconveyed those properties on or about October 15, 2024.”

When asked if the land bank has reconveyed those houses, Castellano said: “We are not cooperating in any way, shape or form.”

The cost of renovations ranges from $150,000 for a single unit to about double that amount for a three-family unit. The renovations maintain the neighborhood’s historic character and prevent the houses from being demolished, Castellano said. Each house had its interior renovations including the replacement of sewer and water systems.

“My goal wasn’t to sell (the houses) to developers or even to rent ourselves,” Castellano said. “It was to put the equity back into the community.”

Castellano has worked with 13 groups on the renovations — 360 Detroit, Central Detroit, Christian Community Development Corp., Emerging Industries Training Institute, FreshM LLC, VSMA Holdings LLC, HK Community Hope Enterprises, Jaquelyn Aguilar, LCW42 Enterprises LLC, Dr Scott Housing LLC, Skilla Baby LLC, NoMa Detroit Holding LLC, H&M Hertitage Properties LLC and Clarence Willingham.

ment agency involved with the Virginia Park neighborhood — to find tenants for the property. Currently, potential tenants include Come Play Detroit and two Detroit-based vocational schools: the Dick “Night Train” Lane Career Center LLC and Emerging Industries Training Institution, Castellano told Crain’s in November.

Effect Detroit CEO Samantha Scott Jenkins has been working with the development for about two and a half years.

“I feel that Ron is very concerned with making sure that the community gets the project that the community needs and the community deserves,” Jenkins said. “I think he’s been waiting to see and hoping that he could bring together the community project with the wraparound-community feel that he always wanted to see in the beginning, and I see it coming along.”

Donell Studstill cuts the grass at the Herman Kiefer site in an undated photo. Developer Ron Castellano said Studstill worked for him for seven to eight years, and then bought a house Herman Kiefer Development renovated on Lee Place. |

Filling the property

As reconveyance discussions and a 2028 deadline hover over the Herman Kiefer redevelopment, Castellano plans to counter all of the city’s claims and maintains that the development will be completed in 2028.

“The whole thing is being disputed. Everything (the city is) doing and saying just misrepresents what we’re doing. They have no concept of what work has been done. They literally are just clueless to the neighborhood and what’s been happening,” Castellano said. “We’re going to continue as we have.”

City officials say there would have to be a lot of progress and investment to make that timeline happen under Castellano. With the remediation notice, the city believes it can push progress at the property one way or another.

“Our hope is that by pressing our remedies with Mr. Castellano, there’s an opportunity to accelerate progress or find a different path forward,” Polcyn said.

In November the Detroit Academy of Arts and Sciences announced it was planning to move to the former Hutchins School at the Herman Kiefer site — marking the first announcement of a new tenant for the property, despite earlier speculation about a practice facility for the Detroit Lions. The news generated new interest in the property, Castellano said.

“The phone’s ringing now, I think you can see, with Detroit Academy of Arts and Sciences, of any site in the city — they chose our site,” Castellano said. “That means a lot to me, to show you this work that we’ve been doing for the last six years is actually come to fruition. It’s really exciting how we’re working together and this project is going to happen.”

Herman Kiefer Development has been working with Effect Detroit — a nonprofit community develop-

Aside from barriers including the COVID-19 pandemic, Castellano said he feels that especially over the last three years the city is out of touch with the development’s efforts and is not working to “make this thing happen.” He said the lack of support from the city to bring tenants to the Herman Kiefer site has prevented the project from lifting off.

Castellano said the city only draws attention to property in Midtown, downtown and most recently Corktown — rather than bringing tenants to Herman Kiefer hospital site campus to shape it into a “job-generating” facility in the neighborhood.

“Our goal was not to just put residential in these buildings… We wanted to put in jobs,” Castellano said. “We have 1,000-plus jobs sitting on this facility, and you’d think that the city would be doing more to help us reach that goal of putting ‘commercial’ in this commercial building. So I think you know that was sort of the hardship along the way.”

Polcyn maintains the city has been “as eager as Mr. Castellano to see that property filled with tenants” and brokered opportunities when they could. While Polcyn said he understands “full well” that having tenants on hand is important for redevelopment, Castellano could proceed without tenants and make further investments in his property.

“The Herman Kiefer Project is unique because of all of the separate but related land bank agreements … The hospitals and schools projects are in and of themselves a big undertaking,” Polcyn said. “The historic properties are difficult to reposition and when Ron stepped up to take this on, based on his experience in New York, there was this hope that he’d be able to execute that vision and he has struggled ... When and if there is an alternative vision for that project, I imagine we’ll have to adapt to whatever those challenges are.”

The Herman Kiefer property originally fell under the Community Benefits Ordinance — a local law requiring developers to engage with the community to identify community benefits and address potential negative impacts of certain projects. Effect Detroit has taken a lead role in community engagement efforts for the site, and plans to increase its work in 2025.

At left is the former Hutchins Middle School, located at 8820 Woodrow Wilson St. in Detroit, before restoration by Herman Kiefer Development, and at right is the building after the company cleaned up and secured the property. | RON CASTELLANO/DETROIT ACADEMy OF ARTS AND SCIENCES

RON CASTELLANO

STELLANTIS

purchase price was not disclosed.

Stellantis spokeswoman Jodi Tinson said the move is part of the Mopar consolidation plans outlined in the 2023 UAW collective bargaining agreement, which called for construction of a new $30 million “mega hub” to be launched in 2026.

“The sale of the Mopar facility in Center Line, finalized in December with a leaseback agreement, ensures operations and employment for the approximately 500 UAW-represented employees will continue uninterrupted until a new facility is completed,” Tinson said in an email.

A likely landing spot for the mega hub is a former golf course and farmland across from the old Ford Romeo Engine Plant in Washington Township, Crain’s reported last summer, but Stellantis has not confirmed a location.

MALLS

From Page 1

relinquishing some of its surface parking to build new housing.

In Troy, Oakland Mall owner Mario Kiezi has brought in several new businesses with an Asian tilt to the property he purchased in 2022 at 14 Mile and John R roads. This spring, Kiezi said he was trying to capture “the Madison Heights energy going north,” referring to the neighboring city that is home to Asian businesses of all kinds along John R and elsewhere. It’s part of Kiezi’s effort to make Oakland Mall stand out from others, bringing unique and sometimes first-to-the-market concepts not located in its peer properties.

And while not quite as dramatic as the changes at Briarwood and Oakland, a long-vacant box at The Mall at Partridge Creek in Clinton Township may end up getting a Dick’s Sporting Goods Inc. House of Sport location — which would be the first in the state — to replace the long vacant former Nordstrom Inc. department store.

But perhaps the most dramatic change of all is the closure over the summer of Lakeside Mall in Sterling Heights, a staple in Macomb County for decades. Its owner, Out of the Box Ventures LLC, ultimately plans to raze it and build a $1 billion-plus mixeduse development with a few thousand apartments and other uses in what city officials are branding a type of town square project that would be a defining part of the city for decades to come.

Last month the Sterling Heights City Council signed off on a master development agreement for the project, which is expected to break ground in late 2025. Not expected as part of the redevelopment: 50-story skyscrapers (although zoning changes would allow for it).

And construction continued on turning Northland Center in Southfield into one of the largest apartment complexes in the re-

“While discussions about a Mopar Mega Hub in Michigan are ongoing, the future site will be state of the art with new technology and innovation as well as a very safe and modern working environment for our employees that will be operationally carbon net zero, consistent with our Dare Forward objectives to deliver cleaner more environmentally responsible operations,” Tinson said.

The company is also in various stages of selling and consolidating other parts distribution centers in Marysville, Milwaukee and Atlanta, with plans for leasebacks during any transition.

Mopar has been a fixture in the Center Line business community for more than 70 years. It has been vital for the 1.7-square-mile city’s tax revenue and the company has been “a great partner” to the city, Champine said. Mopar has been a key sponsor of the city’s annual Independence Festival, for example. At the same time, its presence

has been steadily declining. The complex, composed of four main buildings, housed more than 1,000 employees some 15 years ago. Two of the buildings are largely empty now, Champine said.

Center Line was officially recognized as the “Home of Mopar” in 2012, according to a news release at the time, which referred to the Center Line complex as “Mopar’s World Headquarters.”

It’s not clear when the company stopped referring to it as such.

“While Mopar’s administrative headquarters have always been at the Chrysler Technology Center (CTC) in Auburn Hills, the Center Line location has housed warehouse and packaging operations for more than 30 years,” Tinson said.

Mopar became a central issue in 2023 negotiations with the UAW, which orchestrated walkouts in Center Line and other parts plants around the country as part of its wild cat strike. The union’s collective bargaining

agreement with Stellantis eliminated tiered wages at Mopar and increased employee pay by up to 76%, according to the UAW.

Ashley Capital has been a prolific developer of old industrial real estate in Southeast Michigan, replacing factories with Amazon-style warehouses for a variety of users. One of its largest current undertakings is the redevelopment of Buick City in Flint.

CSC Capital, a small real estate investment firm, also had its eye on the Mopar Center Line property.

“We were both looking at it and said why don’t we do it together,” said Michael Khalil, chief investment officer and co-principal of CSC Capital. “To us, it is irreplaceable industrial land in the heart of metro Detroit.”

Champine said he is hopeful that the redevelopment will drive tax revenue and he is confident in Ashley Capital’s ability to deliver, given its “impeccable record” with other projects in the region.

gion — as well as the site of the state’s first Costco Business store. In spite of those efforts around the region, there are still major challenges at others.

The new owners of Fairlane Town Center in Dearborn fell behind on property taxes last year —

a hallmark of its new ownership group around the country. Great Neck, N.Y.-based Kohan Retail Investment Group was late on $1.73 million in city property taxes across three separate parcels comprising the mall, and others reported that it faced utility shutoffs.

From Page 1

pounds in November 2023, according to state data analyzed by William Fetterman, owner of Hanover-based Central Coast Horticultural LLC.

That oversupply of cannabis is a prime driver of low prices. Last year, fresh frozen cannabis sold for $0.12 to $0.15 per gram. This year, that price is going to be as low as $0.08 per gram, or about $36 per pound, Fetterman told Crain’s.

But there are several factors at play that could sustain those in the Michigan market that are able to withstand the current pricing conditions.

The benefit to cultivators going out of business is that it removes product supply from the market.

Fluresh produced about 4% of the state’s total marijuana output with its Adrian operation contributing about 20,000 pounds of product and output from its Grand Rapids operation contributing 30,000 pounds annually, CEO Brandon Kanitz told Crain’s.

Removing the Adrian site’s supply could inch marijuana prices up in the coming months.

Kanitz hopes others in the industry follow suit and throw in the towel by removing unprofitable operations to become smaller companies.

“I think the overhang in inventory will persist into 2025, but supply will continue to come offline and we’ll be in a healthier market going into 2026,” Kanitz said.

And there’s the hope of federal rescheduling of marijuana to change it from a Schedule I narcotic to a Schedule III drug, placing it alongside ketamine and some anabolic steroids. The U.S. Drug Enforcement Agency removing marijuana as having “no currently accepted medical use and high potential for abuse” under the Controlled Substance Act of 1970 would also free cannabis businesses from a costly tax code law.

Rescheduling marijuana eliminates the IRS Tax Code 280E, which prevents individuals from writing off business expenses involved in the trafficking of narcotics translating to a 70% or sometimes higher effective tax rate for marijuana dispensaries instead of the regular 21% corporate rate.

But the ultimate crutch to the industry is the strength of the Michigan marijuana consumer.

The proposed Lakeside Town Center project in Sterling Heights would include 150,000 new square feet of retail and dining space. | CITy OF STErLInG HEIGHTS

Kohan paid $52 million for the mall in April 2023 after a brief ownership by Dallas-based Centennial Real Estate. And in Taylor, Southland Center is on the verge of being sold after its owner defaulted on some $78.5 million in Barclays debt.

Despite those low margins, operators sold nearly 35,000 more pounds in marijuana flower and 103,000 ounces more infused liquid in October than in September.

The low prices have created a buyers’ market in the state that recorded a total of $276.4 million in sales in November — or nearly $39 in per capita spending for adults 21 years and older in the state.

“Overall, the Michigan cannabis market in 2025 is poised for continued growth and development,” Myles Baker, a partner and cannabis attorney at Detroit-based law firm Dickinson Wright, told Crain’s in a statement. “Federal guidance on rescheduling may shake things up nationwide. Competition may intensify leading to a survival of the fittest environment, but with continued growth in sales.”

The Miniso location at Oakland Mall in Troy opened last year. | KIrK PInHO

Bedrock’s Kevin Mull is writing the company’s innovation playbook

Kevin Mull, 55, left a 31-year career at German engineering and technology company Robert Bosch LLC to join Dan Gilbert’s Bedrock LLC in November 2023 as the senior director for the Office of Urban Strategy and Innovation He co-founded two of Bedrock’s innovation spaces across the city: the Detroit Smart Parking Lab in 2021 at the Assembly Garage at 1701 W. Lafayette Blvd. and the Urban Tech Xchange in 2023, on the third floor of Bedrock’s Lane Bryant building at 1520 Woodward Ave. that combines resources from Bosch and Cisco Systems Inc. Following is a conversation with Mull about current efforts and what is coming:

By | Anna Fifelski

On Dec. 17 Bedrock announced the development of a Life Sciences District on the Gratiot Avenue site. Can you speak on how this plays into Bedrock’s broader innovation strategy?

We are looking to innovate on multiple fronts, and the announcement that was made ... is really a long-term, bigpicture move for Bedrock in the development of a full innovation district.

The idea is that as the Detroit Smart Parking Lab and the Urban Tech Xchange scale, from now, moving forward, that that work will really be additive to the innovation district that’s being deployed at the Gratiot location. That doesn’t necessarily mean that the Detroit Smart Parking Lab is going to move to Gratiot, just that it’s a node in a broader innovation strategy that Bedrock is deploying.

The work that I’m doing today is tech that we can deploy now in our platform and in our portfolio. So it’s like the near-term work, and then the Gratiot site as it comes online, then we’ll be feeding projects and startups and concepts into that development effort.

It’s been a little over a year since the opening of the Urban Tech Xchange. What are your goals for this space and what projects have you had over the past year?

We don’t confine our deployments to just this space. While there is dedicated space, if there’s an opportunity to engage a startup with a technology that maybe doesn’t apply to this building but it applies to something else in our portfolio, we do have the ability to do that.

So the first one, I would say, is technology from our large co-founding co-sponsors, Bosch and Cisco. So this space is populated with technology from both of them. For example, for Bosch, we have a suite of kitchen appliances that are fully integrated into the building management system, so we’re able to monitor their performance and generate a lot of useful metrics about how much energy they’re consuming and how many times they’re utilized … In the case of Cisco, it’s a very sophisticated network infrastructure that kind of is the backbone of the UTX that makes

it easy for tech companies to deploy against. One of our focus areas here is accessibility.  So a tech category that’s really emerging called assistive tech, or age tech. So how can technology help people age in place? Which is obviously very important right now, as our Boomer generation gets older; assistive tech, meaning, how do you have tech that’s supportive of people with physical disabilities? We have a product from a company called Lotus that is a ring that you wear that allows a person to control different assets in the built environment by clicking a ring, such as lighting and things like that. So we’re really excited about that category.

How do Bedrock’s multiple innovation centers across the city (UTX, DSPL, etc.) work together? How does Bedrock work alongside all the tech ecosystems in the city to bolster Detroit’s innovation ecosystem?

We are very intentional about our desire and efforts to collaborate in the ecosystem. I actually saw this word in (a Crain’s) article (on the Gratiot Avenue site): ‘co-opetition.’ In some regards, we’re all working to forward or advance our own initiatives, and I suppose that creates some level of competition, but it’s more about the cooperation.

I think in some ways, Newlab (at Michigan Central) is a good example for this, where we have had situations where we’ve been able to work with somebody, maybe that Newlab is already working with, where we’ve been

Read all the conversations at CrainsDetroit.com/TheConversation

able to provide that physical, realworld space for them to deploy, or vice-versa, where we’ve brought somebody into the parking lab to deploy their technology from another geography, and then they have evolved into taking space at Newlab because they came to Detroit and found out that that was an opportunity for them. So we really firmly believe that that collaboration is absolutely critical for the region to evolve as ... a world-leading innovation ecosystem.

What does Detroit’s ideal startup and innovation ecosystem look like to you? And what steps do we take to get there?

For me, it’s creating a continuum where a very, very early-stage startup — pre-seed or seed-stage startup — gets an opportunity to work in this ecosystem. If you think of the parking lab, they come and deploy first in the parking lab, and then we are able to amplify their message, and then they’re able to identify venture capital funding, for example, or they can tap into this great philanthropic network that we have here, and then that allows them to move forward in their journey. And then they decide that they need to have an office here — and hopefully that would be a Bedrock office — but they start to scale here, and then they start recruiting talent from our local universities to continue to fuel their growth, and then eventually they set up a manufacturing location here in the region.

So it’s like, we need to take that

first seed and then give it all the love and attention that we can and work together in the ecosystem. Because there are not a lot of examples where one of us, one of the innovation players here, can deliver all those things. So we have to make sure that those relationships are built and those hand-offs are made to care and nurture for that startup that has chosen to do their first thing here.

And then I think the other big one is engaging the local universities and making sure that we retain that talent coming out of the universities through this innovative work that we’re doing that’s also going to be critical for our future as well.

What’s a fun fact about you, or something you like to do in your spare time?

I’ve been a resident of downtown Detroit for almost the last 10 years, and I’ve been watching and experiencing first hand what’s happening in the city, and I’m just thrilled beyond description to be able to spend all of my days working to do something additive to that.

I’m a big sports fan. I’m originally from Pittsburgh, where we’ve had a lot of success and also a lot of competition with Detroit in certain areas, but the fact that the Lions are making this amazing run toward the Super Bowl is really testing my sports loyalties because of the black and gold that’s running through my veins.

A Steelers versus Lions Super Bowl, which is possible, would really create a problem for me, but also it’d be very exciting.

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Kevin Mull is senior director of urban strategy and innovation at Bedrock. | BEDROCK

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