NEWSPAPER
© Entire contents copyright 1985 by Crain Commun ications Inc . All rights reserved .
Crain's
Price: 50 cents a copy; $20 a year.
GM, UAW study machining fluids
•
PAGE 5
.... Car alarm sales rise with thefts PAGE 22
•
Prechter says he's no Rupert Murdoch PAG E 4
WEEK OF AUG. 26 - SEPT. 1, 1985 VOLUME 1
0
NO. 30
Analysts see high-tech firms headed for trouble BY JEAN HALLIDAY Special to CRA IN'S DETROIT BUSINESS
Hi-tech companies, thought to be the salvation of states like Michigan that depend on smokestack industries, are falling far short of expectations because they haven't grasped business basics, analysts say. Unless they master marketing skills and take a hard-headed approach to the way they spend money, hi-tech firms will continue to wallow in red ink and see their stock prices drop on the public exchanges. Of 15 publicly-held Michigan firms that
can be classified as hi-tech, only three have seen both revenues and earnings rise significantly in the past four years, according to Don Durocher, president of the public relations firm Durocher & Co. Inc. in Detroit. Durocher said that trend emerged as he helped put together a survey of the top 100 publicly- held companies in Michigan for the Greater Detroit Chamber of Commerce. He also represents one of the best performing hi-tech performers, Medar Inc. in Farmington Hills. Two of the 15 companies are following the normal course of small, startup firms,
Durocher said, and three are too young yet to make a determination of their success. The remaining seven are experiencing growth problems. Medar Inc., Interface Systems Inc. in Ann Arbor, and Stryker Inc. in Kalamazoo have all posted good growth rates. International R&D Corp. in Mattawan and KMS Industries Inc. in Ann Arbor are doing moderately well. The three in whose cases it's too soon to tell are MEDST A T Systems Inc. in Ann Arbor, Winterhalter Inc. in Ann Arbor, and Info Designs Inc. in Bloomfield Hills.
BY VANESSA WATERS CRAIN'S DETROIT BUSINESS
See INKSTER, PAGE 25
~
Insurance rankings Southeast Michigan's top insurance companies and the top-selling members of the Million Dollar Round Table are ranked. Charts, Pages
14-15 ~
See HIGH TECH, PAGE 25
~
City radio stations are ripe targets
City-aided mall project set in Inkster A Detroit developer will construct a $9.7 million, two-story enclosed office and retail center in downtown Inkster, and city officials hope it will become the core of the central business district. The city of Inkster has given preliminary approval to issue $9.1 million in tax-exempt bonds to help the M.R. Group, 1949 E . Jefferson Ave. , finance the project. Final approval of the bond issue is expected within the next few months. The developer will provide the remaining $657,785. The 150,000-square-foot building will be located on nearly nine acres of land on the southwest corner of Inkster Road and Michigan A venue. It will be called Depot Plaza and Office Center. "I think the shopping center will be a magnet which will lure additional development downtown," said City Manager Gregory Knowles. Groundbreaking for the project is expected in October, according to Lillian Randolph, community development director for Inkster. The M.R. Group is a limited partnership. Mike Robinson is the general partner. Robinson did not re-
Laggards are Prab Robots Inc. in Kalamazoo, Energy Conversion Devices Inc. in Troy, Transidyne General Corp. in Ann Arbor, Gam Rad Inc. in Novi , Comshare Inc. in Ann Arbor, Daedalus Enterprises Inc. in Ann Arbor, and Photon Sources Inc. in Livonia. "The key to success in the hi -tech industry is business brains and management," according to Herbert "Ted" Doan, chairman of Doan Resources in Midland, a venture capital company.
BY STEVE RAPHAEL CRAIN'S DETROIT BUSINESS
DWIGHT CENDROWSKI
The rash of sales of Detroit radio stations this summer is just the beginning, local radio executives believe. Many of Detroit's 32 radio stations are undervalued because of poor revenues generated during the recession in the early 1980s. Even though an analyst said Detroit stations perform below the national average, strong ad revenues this year - up nearly 15 percent over last year - plus the presence of the auto industry, make the stations valuable in the eyes of investors. Edward Christian, president of Josephson Communications Inc., which recently sold WNIC-AM and FM in Dearborn, believes there will be additional sales.
Marcellus Alexander is the general manager of WRIF-FM, one of several area radio stations recently sold.
See RADIO, PAGE 26
~
BetaWest seeks major Rivard Place tenant BY MARY SOLOMON SMYKA CRAIN'S DETROIT BUSINESS
BetaWest Properties Inc. of Denver may soon be signing a major tenant for Rivard Place, its 500,000-square-foot office complex on the Detroit riverfront, according to various sources. The real estate development firm opened a satellite office in the 400 Tower of the Renaissance Center two weeks ago where potential tenants have been viewing a model of the project that may eventually enclose some 2 million square feet of space. The first phase, scheduled to be built over two years, includes the 25-story, 500,000-square-foot office tower, boat dock and fine restaurant. A major tenant leasing from 20 percent to 30 percent of the first phase would clear the way for groundbreaking, according to BetaWest officials. They declined to put a dollar figure on the
project. Rivard Place is planned to be built on a 6.3 acre parcel located on Atwater Street where Rivard Street ends at the Detroit River. The property is east of the Renaissance Center and west of the Stroh River Place development. "BetaWest has signed a purchase agreement and has until Nov. 1 to close the deal on the property," said B. Michael Pipia, manager of the site for FEDNAV U.S.A. Inc., which is asking $5.5 million for the parcel. "BetaWest has indicated that they intend to close on the property as soon as they have a major tenant, and things look very hopeful that will happen soon." "First of September we should know something," said Emmett Moten, director of Detroit's Commu nity and Economic Development Department. "They've been doing a lot of work out there - design development, talking to people
to move in, talking to a lot of people In the suburbs to move in. " Adrienne Thiele, Beta West's marketing and communication manager in Denver, said it is the company's policy not to discuss leases until tenants have signed contracts. Although Beta West declined comment, local brokers say that the price being quoted for Rivard Place is $20 to $22 per square foot, probably the highest rates in the metropolitan Detroit market. The best downtown Detroit office space, including the Renaissance Center, lists at about $18 per square foot . Brokers familiar with the downtown leasing market are enthused about the Beta West firm and its plans , but most express concern at whether even Detroit's newest riverfront building can demand $22 per square foot. "I think the project's a great idea," said Tom See BETA WEST, PAGE 25 ~