SINCE 1983
SEPTEMBER 16, 2013
2 Grand rapids Business Journal 30th anniversary September 16, 2013
Reflections on 30 years in the business of business
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’m often asked where the Business Journal idea came from. My business background ranges from selling lemonade and popcorn in front of my grandparents’ home in the Netherlands and setting up a bicycle-parking rental out of their garage, to odd jobs around the neighborhood, being a writer throughout school years and graduating with an MBA from MSU. My years as a local chamber of commerce executive were punctuated by a barrage of complaints from business leaders about the local media, especially the daily paper. The overriding perception was that it minimized or ignored local business and business news. That perception reached a crescendo in the late ’70s. After announcing my planned departure from the local chamber in 1979, I suggested to a few trusted insiders that I would try to resolve the “news problem.” In 1983, we delivered on that pledge when we launched the Business Journal.
The Business Journal filled the news void for those who took their business news seriously. They didn’t appreciate having it ignored, minimized or trivialized by the daily, or dumped into 10-second sound bites by broadcasters. Prior to 1983, business news in Grand Rapids didn’t exist in the sense it does today. Anything resembling business news in GR traveled almost exclusively by word of mouth at meetings, forums and via various “offline chat rooms” that included Sayfee’s, Duba’s, Ottawa Grill, Fables and the Pantlind Hotel, as well as the Peninsular Club, University Club and other private clubs for the well connected. We changed that when we launched the Business Journal. Grand Rapids was a rare commodity: a community with a business journal — the only one in Michigan. We were pioneers. A modest effort in the beginning, the Business Journal gave voice to business. No longer would business news be ignored or relegated to irregular wire service fillers in the back of the daily. It became important! It was risky and it was challenging: Parting with my former partners, it was just me and the bank. The bank was a ter-
rific supporter of the venture. Entrepreneurs understand well this financial loneliness. But achieving this 30-year milestone says more about this community and our talented and dedicated staff. The creation of the Business Journal was my mission, one shared by our team of dedicated professionals. Naysayers were abundant, including the local daily. Competition can be enlightening. I believe we helped improve business coverage by all media in this community. It forced the daily to pay attention to business coverage in a way it had not felt the need to do before. My position as founder of this publication provided a unique window onto the myriad of changes in the Grand Rapids economy and landscape. Many of those changes are chronicled in this issue. We started with a dream, a concept and an unknown future, similar to most business startups. We sought to provide great journalism where no one else had ventured. Month after month, week after week, the Business Journal featured news about business before any mention appeared in the daily — or anywhere else, for that matter. In some cases, important news we uncovered never appeared in local media at all. That situation, while not as pervasive as in 1983, still exists today. Some people cite this as a reason for declines in mass media over the years, and a rise in niche media like the Business Journal and broadcast cable media. The Business Journal filled the news void for those who took their business news seriously. They didn’t appreciate having it ignored, minimized or trivialized by the daily, or dumped into 10-second sound bites by broadcasters. I often reminisce about the many outstanding people I have come to know via my special “window.” It has been a privilege. We don’t have enough space to recognize them all, but I do appreciate their continuous support, encouragement, contributions, ideas and comments. In 1983, Grand Rapids opened a fabulous new Amway Grand Plaza tower building, and Steelcase had just opened its new international headquarters. Monroe Mall was “improved” for the “umpteenth” time, and the economy of Grand Rapids was booming after a series of economic challenges such as high gas prices, obscene inter-
est rates, supply shortages, auto slumps and erratic weather. The next 30 years promise to produce an even greater impact. Many local icons of the past have disappeared, and the most critical element facing this community is to replace the leadership group that brought us to this stage of development. Local history tells us the new leadership will come mainly from within. The next generation of leaders already exists, emerging and gaining confidence. The Business Journal will continue to identify them. The world is changing and shrinking. Forces pushing change are difficult to alter, and economic and public policy challenges still exist, but entrepreneurs will continue to see new opportunities. Dark clouds always have silver linings. A point of view does matter! Grand Rapids remains an economic beacon to others in this state — a “can-do” city. GR continues to expand and to grow entrepreneurs willing to invest in the
community. The world discovers over and over again what we have always known: Grand Rapids is, and always has been, a very special place. In this community I feel we have been blessed. Grand Rapids is the greatest city in Michigan, where dreams and ideas still come true. Thank you, subscribers! Thank you, readers! Thank you, advertisers! Thank you, vendors! Thank you, staff! And, thank you, Grand Rapids! John Zwarensteyn Publisher
Website: www.grbj.com; general editorial inquiries: editorial@grbj.com; general sales inquiries: advertisingsales@grbj.com Publisher
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September 16, 2013 Grand rapids Business Journal 30th anniversary 3
Rick DeVos: The future contains no absolutes Business needs to ‘stay nimble’ and ‘react to things along the path.’ Mike Nichols
Grand Rapids Business Journal
Rick DeVos has been a voice for art, entrepreneurs and cultural change in the city, but one voice he refuses to be is that of a false prophet. To celebrate the 30th anniversary of the Grand Rapids Business Journal, DeVos — born one year before the Journal’s inception — sat down to discuss how the next 30 years might impact West Michigan’s business trends. But the man who gave Grand Rapids ArtPrize and Start Garden would not give predictions, bluntly stating he doesn’t spend much time thinking about who or what will be big in the next 30 years. “I’m not big into predicting things. There are a million different scenarios that could play out over the next 30 years. The only thing you can predict is that things are unpredictable,” he said. “It’s interesting to look at it, but to lock ourselves into a specific vision of a scenario that’s going to play out — like the sort of binary thinking of, ‘Oh, everything is going to happen in China, be made in China’ — I think is silly. There are no absolutes in anything in the future.” DeVos warned of those who dogmatically claim to know the answers about the economy’s future. Answers to the macro questions — the biggest questions regarding business, currency, social and national issues — are impossible to predict, he said, and an attitude of being able to define the future could be dangerous to the present. “I could rattle off a bunch of buzz words about advanced manufacturing and agriculture. I think all those things have value and will continue to grow in importance, but again, the part of our culture that has been drawn to the projection and the 30-year plan is actually detrimental,” he said. “We get ourselves locked into specific visions of what the future holds when, in reality, none of us knows what it is. We need to stay more nimble and be able to react to things along the path.” DeVos told Kendall College of Art and Design’s Portfolio magazine, for an article published this summer, that everyone can work together to build a better future. When asked what obligations community members have to each other and why, he responded: “I think of it more in terms of ‘opportunity’ than ‘obligation.’ We’re cooperative beings, and our desire for community comes from deep within us. So we have the opportunity to scratch that itch for connection and community by doing things to serve others, creating the places we want to live, and partnering with people to get cool
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things done. I think the simplicity of the ethic of ‘do unto others as you would have them do unto you’ does a good job of encapsulating the ‘obligations.’” History, which is filled with the biographies of experienced problem solvers, is much more interesting to DeVos than conceptualized futures, and he feels the fact-grounded past is much more applicable to the present than a theoretical future. He won’t claim to know what will happen, but he is fascinated in what did happen, particularly in the growth of Michigan’s auto and manufacturing industry in the late 1800s. “We were that much closer to being a frontier state at that time,” he said. “Eventually, that frontier moved west, and you could argue that’s why California enjoyed the run that it did and still does to a great extent.” In the early 1900s, it was Michigan, not California, that enjoyed the reputation of being America’s rising Silicon Valley, a hotbed of innovation formed around entrepreneurs building automobiles, DeVos said. Over time, the success of the industry led to market-hunting and growth forecast. The sort of discipline necessary to operate such companies efficiently at scale, however, was somewhat antithetical to the experimental na-
ture that needed to exist to birth them, he said. As a result, Michigan’s culture became much more about “the company” than it did about individuals. It was in this single-minded culture that an attitude of trend predictions took root, exchanging the speculative experiments of entrepreneurs for right-angled, stubborn faith in a supposedly impervious future. In short, the business culture locked itself into a binary vision, a mistake DeVos refuses to repeat, echoing the lesson of Saint James, who wrote, “Now listen, you who say, ‘Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.’ Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes.” (James 4:1314, NIV) Michigan’s business culture traded off the exponential gains of finding explosive growth in diversity and risk-taking for a meager but dependable 2-percent-a-year sort of incremental growth, he said, creating a growing system but one very susceptible to shock from the outside. “If you’re always carving out a path to diversify to other areas, to do the speculative things, you’re building — at the very least — ro-
bustness to (absorb) those kinds of shocks,” he said. Then came the devastating shocks of an economic recession. The auto industry, which had not diversified, had its guts ripped out and collapsed, along with the jobs, incomes and hopes of everyone who had put all their eggs in “the company’s” basket. Now, from the ashes, the entrepreneurial cycle has sprung anew, and men like DeVos are sowing venture seed companies and sharing their fortunes with entrepreneurs who are not daydreaming of the future but studying the lessons of the past and challenges of the present. He wants to help build a Grand Rapids where there’s a place for the speculative. “Our vision’s really about a culture that has rediscovered its entrepreneurial muscles, that the ‘weirdos in the garages’ are able to get this support from people with financial means,” he said. “You should be able to (design) businesses that scale — and that exist at scale, that intentionally have mechanisms to seed new things outside of themselves or let people move in and out more permeably … (creating) a lower-friction environment for new things.” DeVos’ disinclination toward predicting the future extends to labeling individuals’ identities, particularly his.
When asked what his role would be in the future of Grand Rapids, he rolled his eyes, blew out a deep sigh of vexation and muttered, “I’m super-comfortable with that question.” His reaction may have been sarcastic, but his response was fairly straightforward: DeVos believes his sweet spot is as a catalyst, a drum-banger for entrepreneurs and anything that will keep the culture out of the clutches of monolithic, corporate-minded domination. Naturally, therefore, his very “role” abhors such a defining question. “Our culture’s desire for that question creates the myth of the leader or something, someone who has answers — and I’ll be the first one to say, ‘I don’t have answers,’” he said. “The answers reside in individuals and pockets of individuals throughout the community. To the extent that they are able to do their own thing, live their own lives and build their own businesses, the better off this whole region’s going to be.”
Photo by Adam Bird
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September 16, 2013 Grand rapids Business Journal 30th anniversary 5
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HAPPY 30TH BIRTHDAY GRBJ! City and CWD agree on property option Agreement is for up to three years and could cost developer $55,000.
January 25, 2013
By David Czurak
Bank One Now Nearly Done June 14, 2002
Second Story To Buy Eight-Story Y August 20, 2004
By David Czurak
Grand Rapids New Car Guys June 17, 2005
By David Czurak
CWD to renovate Trade Center Building
September 15, 2012
By David Czurak
Scott Wierda: Makes Jade Pig Fly August 1, 2000
By Anne Bond Emrich
DP Fox Buys Stealth Franchise June 5, 2002
By David Czurak
A Rampage Of A Good Time June 13, 2002
By David Czurak
Ionia Ave. Facility Site for Apartments December 19, 1994
Dan Calabrese
Grand Rapids Griffins rally around 2013 Calder Cup June 19, 2013
By David Czurak
DP Fox Grows April 16, 2002
By David Czurak
Second Story Climbs DP Fox To Build A Another Level New Neighborhood January 17, 2005
By David Czurak
March 4, 2003
By David Czurak
s
CWD Real Estate Investment plans eight-story building downtown
Revived Free Parking Now At Issue
January 15, 2013
By Charlsie Dewey
Grandville developers were ready for Cabelas
Commerce Building Getting Historic Redo
October 24, 2003
By David Czurak
December 11, 2007
By David Czurak
February 20, 2012
By Pete Daly
Businesses Crucial To Cool Cities March 11, 2005
By Daniel Schoonmaker
It Took A Financial Village
July 9, 2008
By David Czurak
CWD Is Newest Name On The Block May 30, 2008
By David Czurak
New year brings jobs to Bucktown
Grandville retail center looks like an economic engine. December 22, 2012
By David Czurak
Cabelas could be very good for retail market March 3, 2012
By David Czurak
Downtown real estate game in play once again November 25, 2011
By Business Journal Staff
PHOTOGRAPHY BY: RANDY PASSENO
By Pete Daly
January 2, 2013
By Mike Nichols
Wierda Enjoys Being Creative August 18, 2008
By David Czurak
Construction pending on former XRite land July 20, 2009
Grandville raises region’s profile among retailers
Cummings recognized for lifetime achievement UM/ULI awards recognize state’s best in commercial real estate. November 7, 2011
Pete Daly
12 Grand rapids Business Journal 30th anniversary September 16, 2013
Manufacturing: foreign competition drove the changes Pete Daly
Grand Rapids Business Journal
Two highly respected veterans of the West Michigan manufacturing scene for the past 30 years, Jim Zawacki and Fred Keller, both immediately touch on the same factor when asked about the biggest change since 1983. Keller calls it “internationalization.” Zawacki is even more specific: Japanese automakers. “Everything was different” in American manufacturing in 1983, said Zawacki, chairman of Grand Rapids Spring & Stamping. “The Japanese were just beginning to get involved in the automotive market.” When Zawacki and his partners bought GRS&S in June 1985, the stamping plant just north of downtown had 45 employees. Now it has 625 workers in several plants. About 65 percent of GRS&S’s metal components output today is for the Japanese automakers. Sales in the last fiscal year, which ended in June, were more than $100 million. “The influence of the Japanese manufacturing technique was very strong,” said Keller, who founded Cascade Engineering in 1973. Today the plastic injection molding company has about 1,200 employees, almost half of them in Grand Rapids and the rest in Ohio, North Carolina, Texas, and Budapest, Hungary. The automotive industry is still very important for both GRS&S and Cascade Engineering. Keller’s company is known for a variety of plastic products, from wheeled carts for curbside refuse collection and recycling to parts for big trucks such as fenders, grills and fairings to deflect the wind. The truck parts division is the largest of its 12 divisions. Zawacki said in 1983, quality of production wasn’t the big issue — it was just one of them. Keller said the Japanese showed American manufacturers they did not have to choose between cheap production and highquality production. “You could have high quality and be the least expensive at the same time,” said Keller. “The only way to get low-cost goods was to make them right the first time.” Thirty years ago, according to Zawacki, cost wasn’t the driver it is today. “Today, quality is a given, and delivery (on time) is a given,” he said. The auto industry “won’t even talk to you if you haven’t got decent quality records in parts per million. We didn’t even talk in parts per million.” “The Japanese hate waste,” he said, and with good reason. If production entails waste, it means
cost may be reduced by eliminating the waste. GRS&S is big on quality. It worked to qualify for the globally recognized ISO quality standards for manufacturing and then the more advanced QS standard for auto parts. “We were one of the first 200 (companies) on the QS (standard) back in the late ’90s,” said Zawacki, “a coup” that helped put GRS&S ahead of its competition. GRS&S is also ISO 14001 registered, which is the environmental quality standard, according to Zawacki, “and the big pushers of that were the Japanese.” Again, there was a practical reason: Reducing industrial waste that goes into landfills or risks polluting the air and water ultimately will help reduce costs. “Now, of course, everybody’s on the green bandwagon,” said Zawacki. Just how good at beating the competition GRS&S has become was evident in early 2010. Toyota had been subjected to a recall of millions of vehicles when it was suspected gas pedals were causing unexpected acceleration. A Japanese parts maker that competes with GRS&S needed six to eight weeks to produce a key replacement part; GRS&S needed only days to build the dies and ship 1 million parts. Zawacki said success on a tough order doesn’t guarantee more business with Toyota. “We’ve got to be competitive,” and “cost is a very big driver” in that competition. Electronic technology makes things happen much faster now. Zawacki noted that GRS&S did not even own a fax machine in the early 1980s. “I used to go down to Western Union if somebody said they were sending me a fax.” Today, “we’re a cloud-based ERP system at work. The computer systems are phenomenal. I can go online at any time and see which machines are running and which are not — and why.” Employee relations have changed, too. Zawacki figures GRS&S has been sharing its financial statements with employees for about 15 years, something that was almost never done in a manufacturing environment years ago. “We don’t have time clocks,” he said. A lot of manufacturing companies treat their employees much better now, he said, and actively encourage employee involvement in finding ways to decrease cost and improve production. “We’ll implement 25 ideas per year. That’s unheard of in the United States,” he said. The Great Recession almost cut U.S. auto sales in half and drove the weaker industry suppliers out
of business from 2007 into 2009. Now the pendulum has swung back. “It’s just amazing. I don’t know who’s buying all these cars, but God bless ’em,” said Zawacki. The problem is, the supplier base is no longer large enough to meet demand, and “some of them are busting at the seams and are on the verge of problems,” he said. Adding to that constraint is a lack of suitable new employees for factories that need to expand. “Hiring people that want to work and want to learn is a problem today,” said Zawacki. Keller notes that manufacturing created a great deal of wealth in the U.S. because of exports from the U.S. in the decades after World War II. The internationalization of manufacturing today means U.S. manufacturing lost a lot of jobs, and that “huge shift” also means American industry has less impact on the growth of the economy now, he said, because more of the capital is being generated by overseas manufacturers. Part of the reason for the negative balance of trade in this country is due to 50 percent of U.S. oil being imported, according to Keller. Natural gas and oil are still
the primary source of the vast majority of plastic, although plastics can be made from biological materials such as corn. However, to environmentalists who think fossil fuels should not be used to make plastics, Keller offers a different perspective: “It’s a far better thing for us to do with our oil and natural gas than simply burn it for energy.” When burned in cars and homes, “it’s gone,” he said, but if used to make plastics that go into many everyday products, “we can recycle it many times over.” “Thirty years ago we were still pretty much in the throwaway world, and today we’re much more involved in utilizing recycled material,” said Keller. And now, there is a new capability in U.S. manufacturing: the ability to “manufacture energy,” he said. He is talking about solar receptors and wind turbines that generate electricity “so we don’t need to be continually relying on fossil fuels for our energy.” Solar panels have dropped in price and increased in efficiency. Years ago the installation cost of solar panels was estimated at about $12 per watt of power out-
put; now it is about $1. The cost of a complete solar generating system “used to be in the teens (of dollars) per watt. Now it’s down to about $2.50 or $3,” according to Keller. It’s the entire system, not just the solar panels, “that’s now driving the cost,” he said. But wait: Cascade Engineering makes plastic racks for large, flat-roof solar systems, rather than the more expensive metal racks. The plasticbased systems snap together, further reducing installation cost. Keller also likes to point out that the greatest demand for electricity by American consumers is for air conditioning during heat waves — “exactly when the sun is shining and when the solar panels are collecting at their peak.” Think Michigan doesn’t get enough sunshine? Germany has the largest installed base of solar panels in the world, per capita — “Yet their sun is about the same as in Michigan,” said Keller. Meanwhile, fossil fuel costs will continue to increase, driven by distant consumers such as China and India. “So if you want long-term price stability, we should invest in solar,” said Keller.
Jim Zawacki has guided his business growth from 45 employees at its start in 1985 to 625 at several plants, through the sea changes of Japanese manufacturing, electronic technologies and the Big 3 meltdown. Photo by michael Buck
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Thank you! As we celebrate the 30th Anniversary of the Business Journal, the staff of Gemini Publications would like to express our heartfelt appreciation to our many long-time subscribers, advertisers, partners and vendors. It would not have been possible for us to cover the area’s important business news without your support. We’re proud to be the one you trust.
14 Grand rapids Business Journal 30th anniversary September 16, 2013
There is no quick recovery from recessions anymore Even so, per capita income here is way up compared to 30 years ago. Pete Daly
Grand Rapids Business Journal
As awful as the recent Great Recession was, West Michigan doesn’t look too shabby when comparing the per capita income of now to 30 years ago. At that time, according to Gregg Dimkoff of Grand Valley State University’s Seidman College of Business, per capita income was $11,700 for the Grand Rapids/Wyoming MSA. “Today, it’s about $38,000,” said Dimkoff, adding that even when factoring in the inflation rate, it still is a doubling of income — and one may assume that means the standard of living is much higher now. Dimkoff, a finance prof who has been closely watching West Michigan business for almost 40 years, said that, 30 years ago, “people called us the Furniture City.” The nickname arose after the Civil War when the area grew to be the center of U.S. furniture manufacturing. Although residential furniture production began to relocate to North Carolina by World War II, office furniture after the war took its place, notably with “the Big Three”: Steelcase, Herman Miller and Haworth. However, area office furniture manufacturing also began to shrink at least two decades ago and “has been slowly going away,” said Dimkoff. For years, Steelcase was the largest employer in the region, tied closely with General Motors. Dim-
koff believes Steelcase once employed an estimated 10,000 here, but today, according to The Right Place, Steelcase has 3,227 employees and ranks 15th. Its numerous plants on Eastern Avenue between 36th Street and 44th are no more, and Herman Miller now is ranked higher at 14th with 3,300 employees. The largest employer in the region now is Spectrum Health with 19,100 employees, and No. 2, according to The Right Place, is Axios Inc., with 8,000. It is an employment placement business, mainly providing temps. In third place is Meijer Inc. with 7, 725 employees. General Motors closed most of its West Michigan facilities, some prior to and some during the worst of the recession, and now has just 550 employees in the Burlingame Avenue plant in Wyoming. The end of production in May 2009 at the iconic GM Stamping Plant in Wyoming in the wake of GM’s bankruptcy was a huge shock to the community. More than 1,500 people were working at the plant, which opened in 1936 and was the largest property taxpayer in the city of Wyoming, contributing more than $1 million a year to the city treasury. Today, the 2-millionsquare-foot plant is gone and the cleared site is under new ownership. The city is desperate to find “advanced manufacturing” companies to locate there. The Kalamazoo region has had a long history of manufacturing, ranging from paper mills to metal manufacturing to pharmaceuticals. Led by Upjohn, pharmaceuticals were a key source of highly paid employment for the thousands involved in drug research and development. The seeds of change were plant-
ed in 1995 when Upjohn merged with Pharmacia, a Swedish company, becoming Upjohn & Pharmacia. According to Dimkoff, Upjohn had been experiencing a downturn caused by a few blockbuster drugs coming off patent protection and a lack of new drugs in its pipeline. At the time, it was the biggest employer in the Kalamazoo area with more than 7,000 employees — “more than 20 percent of total employment in the Kalamazoo area,” he said. “Things turned bad in 2003,” said Dimkoff, when Pfizer, a New York-based pharmaceutical giant, acquired Pharmacia. Pharmacia employment in southwest Michigan was about 6,000 at the time, but Pfizer immediately bought out 1,200 workers and followed that with more buyouts in 2005. By 2010, Pfizer employed 2,800 in Kalamazoo; that number is up to about 3,000 now, said Dimkoff. “I’m not sure about the reasons for the drop in employment, but suspect it’s partly due to shuttering of products that are at the ends of their profitable lives, partly the closing of products that don’t fit Pfizer’s market strengths, and partly the consolidation of nonproduction-related functions to the home office instead of maintaining duplicates at both places,” said Dimkoff. According to the W.E. Upjohn Institute for Employment Research in Kalamazoo, not all local pharmaceutical jobs were eliminated. Pfizer’s largest production facility is the one in Portage, and in 2012, Pfizer spun off its animal sciences division as an independent company called Zoetis, which has employees in downtown Kalamazoo and in Richland Township. George Erickcek, senior region-
al analyst at the Upjohn Institute, is a veteran observer of the West Michigan economy and its relationship to employment. He said the recession of 1981 was the last of what he calls “a V recession,” in which there is a rapid plunge in the economy and then a rapid bounce up again. Now, he said, recessions are more like an L: The economy drops and then finally levels off and slowly plods along before starting back up again. But recovery is a long time coming, as has been demonstrated by the recent Great Recession. Most business people agree the economy is improving but are virtually unanimous in adding “not fast enough.” Erickcek said the recession of 1991 was dubbed “the jobless recovery,” and that description holds for all of them, he said, since the 1980s. The highest employment Michigan ever had, he said, was June 2000, when there were 4,745,000 workers on the job. “We’ve never reached that again,” he added, and right now the state is about 673,000 jobs lower. “Will the state ever get back to June of 2000? I think the answer is no,” he said. In early 1990, about 27 percent of people employed in West Michigan were in manufacturing, with about 11 percent in health care and private education. Most of that number is health care, to which the federal government adds employees in private education, mainly at private colleges. Today, about 19 percent of the West Michigan work force is in manufacturing and 16 percent in health care/private education. That 19 percent in manufacturing “is still much higher than the nation as a whole,” Erickcek said. Nationally, it is about 12 percent.
He said “West Michigan” for these purposes includes the MSAs for Grand Rapids, Muskegon, Holland, Kalamazoo, Battle Creek and Benton Harbor. In that region, from 1990 to 2013, the total number of jobs increased by 162,000; there was a loss of 23,000 manufacturing jobs and an increase of 60,000 jobs in health care/private education. In West Michigan, the highest employment in manufacturing was December 1999, and the highest employment in health care/private education was March of this year. While many believe the service sector, which includes health care, will take the lead over manufacturing, Erickcek says the Michigan economy “is still extremely dependent on manufacturing” because the goods produced are sold outside the state, bringing new money in. “If we lost the manufacturing sector, we would lose a driving force in our economy,” he said. Health care employment is growing across the U.S. because the aging baby boomers have made the market huge, but health care consumers are inside the country — not like the consumers of manufactured goods, many of whom live in other countries. While West Michigan is making a name for itself in health care, Erickcek believes health care has “very small potential of bringing new money into the area.” According to Dimkoff, the 1970s were horrible years for business and the economy, but “things that happened in the 1980s set us up for some good years.” People who remember what downtown Grand Rapids was like in the 1970s can testify to the changes for the better. One was the growth of Amcontinued on page 15 8
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September 16, 2013 Grand rapids Business Journal 30th anniversary 15
Technological changes leave region trying to keep pace Explosive growth will squeeze some mid-sized firms. Mike Nichols
Grand Rapids Business Journal
Five-thousand dollars on a credit card was all Jeanne Englehart needed to start her computer training company. That was the West Michigan of 1985. Credit and technology — among other things — have changed since then. Englehart, now vice president of The Charter Group and former president of the Grand Rapids Area Chamber of Commerce, said she has seen technology change drastically for business, both on a global and local basis, over the course of her career. When she started that first business, Productivity Point, she focused on training the average business worker in basic computer technology. New technology every year meant she needed to keep re-training them. “I was pretty naïve,” Englehart said. “What I didn’t see coming was how many times the programs would change and people would need to be retrained.” Englehart sold that company in 1998, but by then, technology was expanding so quickly that the business world was being sucked along in its wake. West Michigan is a business community rich with “many flavors” of technology, she said, helping the area earn a reputation as a biosciences hub. That would not have happened without technology, Englehart said, because technology is the one thing every industry needs.
“We are becoming a hub for certain industries, and those industries attract technology,” she said. “Look at what’s happening at Van Andel Institute. Sure, they’re scientists, but there’s technology in every decision.” Erik Hall, manager of coLab, formerly known as Grand Rapids Tech Hub, echoed Englehart’s assessment, adding that most technologies emerge out of universities and the health care sector, which is another factor in Grand Rapids’ favor. “Biotech is huge here and that’s really because of the Van Andel Institute and Spectrum and Metro and other huge health organizations putting money into the development. And when it comes down to it, people are going to do what they can with money,” Hall said. “I think there’s always going to be web tech, but biotech is something that’s going to be huge.” In the past 30 years, Englehart said there have been major positive changes in West Michigan’s bioscience technology industry, but there are other technology areas that still need work, she said. After all, technology by itself can’t really improve a city or a business operation, she said, because new technology and its processes are only as effective as the people who use them. Currently, West Michigan faces obstacles that are leading to loss of technology talent, she said. “Many of the individuals coming to Grand Rapids have come from different cultures, and they aren’t sure this is the city they want to stay in because it’s not culturally welcoming,” she said. “We have to adapt to those cultural obstacles if we want to see our community become suc-
cessful. If we fail to adapt to those cultural obstacles … it will lead to failure in those sectors.” Aaron Schaap, founder of Elevator Up, a web hosting and development company, and organizer of the co-working community called The Factory, is looking for solutions to Englehart’s concerns about talent. This spring, Schaap started coLearning at The Factory, a program offering classes in technology, design and business in hopes of educating local entrepreneurs and professionals on the ever-changing world of technology. As far as West Michigan is concerned, it’s also an attempt to curb a resources shortage by developing a local pool of technology talent, he said. “There are so many companies that want people, but they just can’t find the talent fast enough. It’s an exciting time but a nerveracking time, too. If you’re a small business, you can’t just wait around for four years for people,” Schaap said. “We need to support local colleges, but it’s unrealistic to have them solve all those problems. So companies are stepping up, spending a lot of money on professional development.” Englehart and Schaap share the belief that West Michigan’s future industries will be built and sustained by technology. In the past 30 years, technology has given the world the PC, Internet and smartphones, Englehart said, at least one of which every business uses in some capacity. Now, however, the most important issue businesses need to explore is “big data,” she said, which has to do with the way information is collected and analyzed. On a federal level, it’s essentially be-
come Big Brother, she said, citing recent revelations and leaks about the National Security Agency. But on a business level, it’s what’s at the heart of the future of product development, marketing — everything. Expect to see a lot of small businesses that specialize in harnessing big data pop up all over the place, she said, adding that some mid-sized data businesses will have to decide whether they want to become larger and compete on scale, or become smaller and compete on speed. “The companies that harness the big data and figure out how to use it are going to be the big winners here,” she said. “The companies that will emerge are companies that help people use and analyze the data and make changes to their business as a result of their data. It’s an art and science.” Hall said he couldn’t agree more with Englehart’s assessment of big data. He uses it for his business, Lee Shore Ventures, and encourages other startups to do the same by hiring someone with an analysis background. If business leaders take this trend shift seriously, giving big data and the technology it feeds on more of a focus, it could mean an explosion of hubs for technology and design all over the city — hubs rooted in new venture seed funds that didn’t exist when Englehart started her business with a credit card. “I see Grand Rapids being able to have a tech culture, especially if you look at how much manufacturing is in the area,” Hall said. “Tech is intertwined with everything. … That’s how manufacturing makes their money.”
No quick recovery 7 continued from page 14 way Corp. and its acquisition of the aging Pantlind Hotel — today, the Amway Grand Plaza. Dimkoff said he believes $60 million was pumped into renovating the old hotel because Amway needed a venue for its increasingly large, annual, Amway product distributors meetings, which brought people from around the world. “It still wasn’t big enough,” he said, so there followed more Amway investment in downtown hotel rooms: the Courtyard by Marriott and, most recently, the JW Marriott. Over the same period, the Amway founders donated millions to improve downtown; hence, the Van Andel Arena, Van Andel Museum Center, DeVos Place, DeVos Performance Hall and Van Andel Institute. The “biggest thing,” over the years, in Dimkoff’s opinion, is “the explosion in growth” in the city. The recession “is in everyone’s mind, but for those people who’ve been around for 30 years, it’s unbelievable: new roads, new malls, huge businesses, condos — just the economic vitality.” The Grand Rapids/Wyoming MSA was the fifth fastest-growing in the U.S. in 2011, according to Dimkoff, with a 5.4 percent increase in income in one year. And 2012 was high, too, he added. “Some would argue we are just recovering from the tremendous dip” from 2007-2009, “but still, over 30 years, the growth has been good. I’d rather be here than any other place in Michigan — and a lot of other places in the U.S.,” said Dimkoff.
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16 Grand rapids Business Journal 30th anniversary September 16, 2013
Convention business checks in as major economic player David Czurak
Grand Rapids Business Journal
The local convention business has dramatically changed for the better since the Convention and Arena Authority came into existence in April 2000 and DeVos Place was opened in January 2004. At that time, as it is now, the seven-member board was chartered by the state and chaired by Steven Heacock. In 2000, the convention facility was still the Grand Center, an outdated structure owned by the city and one the Downtown Development Authority and Grand Action Committee desperately wanted to replace. The Grand Center was useful in its time. It enticed state groups and local businesses to hold their conventions and meetings there, but large exhibitors were nowhere to be found. The many pillars inside the structure didn’t allow the Convention and Visitors Bureau to book groups that needed a wide open space to showcase their products. Regional and national groups weren’t booking the Grand Center, either, and those in the local hospitality industry — especially the downtown hotels and restaurants — had to make do without that revenue. Still, the Grand Center posted some profitable fiscal years near the end of its life. However, 1995 wasn’t one of them. The building lost $800,000 that year — just one in a string of years the center was in the red — and the city decided it was time to stop managing it and find someone else to do it. It hired Spectacor Management Group of Philadelphia, known today as SMG, to run the Grand Center. In 1999, the building had a
surplus of $125,336. The following year, its profit reached $270,266, and 2000 became the building’s most profitable year ever. “I think that speaks very well for the team that is in place,” said Mayor John Logie, who also served on the CAA and was chairman between Heacock’s two terms, of the management change. However, just a week prior to Logie’s comment, a groundbreaking ceremony for the new convention center, DeVos Place, took place, and when construction of the $212 million facility began, traffic to the Grand Center suffered, as the modern, column-free structure with plenty of exhibit and meeting space was going in where the center stood. In 2002, the Grand Center returned to its losing ways and dropped $506,161. The following year, the Welsh Auditorium, also known as the Civic Auditorium during its 71year run, was razed for the new convention center, but its stylish art-deco façade and lobby were restored and became a part of the new building. According to Experience Grand Rapids, which replaced the CVB in 2010, 2002 was the final full year of business for the Grand Center. “In 2003, several months of business had used a portion of the new DeVos Place, so 2002 is the year we show as a ‘full’ year,” wrote Doug Small, president of Experience GR, in an e-mail to the Business Journal. In 2002, the Grand Center hosted 28 groups that brought in 45,850 convention-goers who filled 32,509 hotel room nights. Compare those numbers with the figures Small provided from last year: In 2012, DeVos Place hosted 60 groups that brought in 215,720
DeVOS Place OPeNeD in 2004 replacing the Grand center, significantly increasing hotel room occupancy and boosting business throughout the downtown. Photo by chris Pastotnik
convention-goers who filled 149,266 hotel room nights. The biggest beneficiaries of that traffic were the hotels. Total room revenue reached $127 million last year, and the average night’s stay cost $96.60. Both figures were modern-day highs. Occupancy finished at 60.6 percent in 2012; just three years earlier, the rate was 48.6 percent. The DDA, Grand Action, Kent County, the state and the federal government all chipped in to pay for the construction of DeVos Place, and the city handed over a
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key piece of property at the corner of Monroe Avenue and Michigan Street for the project. The county issued two bonds that totaled $94.6 million in 2003 and agreed to pay bond buyers with receipts from the Lodging Excise Tax, a 5 percent tax that hotel and motel operators add to each guest’s bill. In 2004, the Business Journal gave Grand Action, the DDA, Kent County and the city its Newsmaker of the Year Award for their combined and cooperative efforts to make DeVos Place a reality. The massive new building was seen by many as one that would draw regional and national groups to downtown. Although construction on DeVos Place didn’t officially end until early 2004, the building hosted three conventions in 2003 that drew 12,500 delegates. In 2004, its hosted 36 groups and 59,500 delegates; 46 and 81,350 in 2005; 52 and 72,925 in 2006; and 62 and 100,300 in 2007. From 2003 through 2007, 199 groups met at the new convention center. Their delegates booked 234,537 hotel rooms and spent nearly $109.5 million here over those years. But despite the booking momentum, the building was running deficits for the CAA. For its first nine years, the convention center recorded operational losses of more than $5.2 million. This past fiscal year, however, DeVos Place made fiscal history with an unaudited operating surplus of $95,725. “It’s rare that facilities like this operate in the black,” said Rich MacKeigan, SMG regional general manager and CAA executive director. Perhaps the building’s turning point began in February 2006 when the CVB announced it had booked a major national convention: The Religious Conference Management Association agreed to hold its 2009 World Conference and Exposition at DeVos Place. The RCMA is an international interfaith group with more than 3,000 meeting planners who plan 16,000 religious conventions and meetings annually. “This is quite a coup for our community. The ability to bring RCMA to Grand Rapids signifies we have arrived as a player in the convention market,” said CVB President Steve Wilson at the time. “The individuals who attend this convention plan conferences all over the world. This single convention has the potential to generate hundreds of new bookings. The potential economic value could easily exceed $20 million.”
Another major national convention booking came in 2009, when the National Organization of Black Law Enforcement Officers agreed to hold its annual training conference and exhibition here in July 2014. More than 2,000 delegates will spend three days here next summer, with an economic impact of about $4 million. “I’m ecstatic. This is probably the proudest moment of my career,” said Small of the booking at the time. “This is a group that we, as an organization, made a commitment, along with SMG, to really start to position this destination to attract more multicultural convention groups,” added Small, who arrived here in 2008. Shortly after that announcement, the Fraternal Order of Eagles decided to hold its North American Convention at DeVos Place. The group brought 2,500 members here last July and had an economic impact of $4.2 million during its four-day stay. But possibly the biggest catch came in February 2011 when Experience GR snagged the American Quilters Society for three consecutive years. Each meeting will bring 10,000 quilters to the city and add $15 million to the local economy. Two have already been held, and the third is set for August 2014. “I’d say that our message is certainly being heard. We’re getting more ‘looks,’ if that’s proper to say, and that’s all we ever ask. We think our brand message and our marketing is working,” said Small then. The recent past has been bright for the convention business here, especially with the lavish JW Marriott solidly entrenched along the east bank of the Grand River. And the future may even be brighter. Small recently told county commissioners that the Experience GR sales staff, headed by Executive Vice President George Helmstead, booked 353 groups last year that will meet here over the next several years. Those groups are estimated to bring 217,722 delegates. Also last year, Small pointed out that 157 potential clients toured the facility and the city, and 611 sales leads were checked out. Small also hinted that the 2012 record of $127 million in hotel revenue may be topped this year if the current trend continues over the remaining three months. “This year we’re 8.2 percent ahead in room revenue from our record year,” he said. At that pace, 2013 will set a new all-time high of $138 million.
September 16, 2013 Grand rapids Business Journal 30th anniversary 17
West Michigan has a walk-on role Film industry not yet a key ingredient in the state’s economy. Pete Daly
Grand Rapids Business Journal
In the U.S. film industry, Michigan has had mainly a walk-on part — but state subsidies for the film industry became a Technicolor addition to the usual drama in the state Legislature after then-Gov. Jennifer Granholm got the Michigan Film and Digital Media Incentive passed in 2008. Many Michiganders who once made a living involving film production were working in the advertising industry in southeast Michigan, making car commercials for the Big Three. Corporate jobs like that began to shrink by the 1990s, so eventually, feature films were seen as a potential way to put many of those professionals and their equipment back to work in Michigan. In July, a report was published that compiles the experiences and perceptions of 70 Michigan residents still working in the Michigan film and digital production industry. It’s timely because the Michigan Film Office, a state agency that is charged with encouraging movie-making investments in Michigan, is now working on a strategic plan to guide growth and development of the industry, and it is due Oct. 1. The independent report finished in July was done by Deb Havens and Mark Adler, co-founders of Film Friendly Michigan and film industry professionals with long experience in Michigan productions.
The film and digital media industry at one time was limited to advertising. michigan film incentives helped expand the expertise to movie making. Photo by Johnny Quirin
The report is posted on film friendlymichigan.com/blog. A key short-term recommendation of the report is to involve members of Michigan’s film and media industries in the Michigan Film Office’s strategic planning process, but Havens said that does not appear to be the case at this time. Michigan’s feature film industry — that’s where there’s usually a lot of people employed and big Hollywood bucks are spent — began in 1946 when Esther Williams and Jimmy Durante were on location at the Grand Hotel on Mackinac Island for the production of “This Time for Keeps.” Grand Rapids had a taste of Hollywood excitement when George C. Scott came here for filming of background scenes in “Hardcore,” a 1979 movie about a conservative Midwestern businessman — Jake Van Dorn, played by Scott — whose teenage daughter disappeared during a church youth group trip in California and ended up in porn movies.
Michigan’s next and really big walk-on role for Hollywood was “Somewhere in Time,” the 1980 movie starring Christopher Reeve and Jane Seymour — and the Grand Hotel in all its glory. The film was so popular there are still groups visiting the Grand Hotel every year to watch it on DVD and dress up like high-society folks from the early 1900s. Eric Johnson, who formed Gorilla Pictures with Eric Machiela in Grand Rapids almost 10 years ago, told the Business Journal they spent a lot of time working on films out of state “because there wasn’t a lot going on here at the time.” “Usually in a small market like this, the talent emerges, outgrows the area, and then leaves for L.A. or New York or Chicago,” said Johnson. “You would be amazed at the amount of musicians and filmmakers that have come from West Michigan over the last 20 years — they’re just not here anymore.” The Great Recession and neardeath experience of two of Michigan’s Big Three automakers led to the state’s energetic effort to lure the film industry and create jobs. Before 2007, said Havens, the state’s incentive to the movie industry amounted to something like a 30 percent discount on the crew’s hotel rooms. “That was just so, so minor,” she said. Then, in 2007, there was a significant incentive approved by Granholm that was a 20 percent sliding-scale for some production costs. Granholm’s next legislation, in 2008, offered the most generous incentive in the nation to the movie industry: 40 to 42 percent of the cost of filming would be refunded to the movie moguls, and it also covered television and digital media productions. There was always a complaint, however, that it did not cover television commercials. The legislation also tried to spur capital investments in movie studios with a 25 percent subsidy for new film-related facilities, and there was a 50 percent tax credit for training of Michigan residents to work in the industry. The studio investment incentive led to a huge controversy in Grand Rapids in 2010 when a pair of investors said they were buying Hangar 42, a vacant auto parts plant in Walker, for $40 million — although it had previously been listed at $10 million. Felony fraud charges were brought by the Michigan attorney general (later dropped), and before the dust settled, there were lawsuits filed by companies that had been working for the two would-be studio owners. Due to the incentives, movies were shot in Grand Rapids, and some continue to be, although not at the scale once hoped. As stated in the Film Friendly Michigan report: After the passage of Granholm’s 2008 legislation, Michigan immediately became one of the top three U.S. competitors for filmmaking in the world, competing with New Mexico and Louisiana, which also had attractive cash incentives. Regional film offices were established in Ann Arbor, Detroit, Macomb and Oakland counties and in Grand Rapids, and there was studio investment in Pontiac, Detroit, Allen Park and Manistee. Film Friendly Michigan notes that in 2008, Michigan’s film industry expenditures grossed $125 million, up from $2 million in 2007, creating an estimated 2,800 jobs with incentive investments totaling just less than $48 million. By 2010, the film industry had produced nearly 150 films in Michigan, spending $642 million and generating more than 5,000 jobs in production and approximately 8,000 acting jobs. The statistics were obtained from Michigan
Film Office annual reports. Meanwhile, there were persistent critics of the incentives each year, and in March 2011, newly elected Gov. Rick Snyder said he wanted a $25 million cap on the incentives. Public Act 291 of 2011 became law on Dec. 21, 2011. The legislation made the Michigan Film Office part of the Michigan Economic Development Corp., which the FFM report said was underscoring the state’s intent to increase the real economic impact of the film incentives. However, Act 291 did not provide separate funding for infrastructure and work-force development. A cap of $50 million for the film incentive was authorized for 2012, and Snyder wanted it cut to $25 million for fiscal year 2013-2014 but was overruled by the legislature. As stated in the FFM report: “The impact of reduced support for the film industry was immediate. Many films scheduled for production left the state, followed by workers pursuing jobs in the film industry.” When they finished writing the report in July, Adler and Havens noted “the state has had difficulty in recruiting film projects and spending in numbers equivalent to those prior to passage of Public Act 291 in 2011. In fiscal year 2012, just under $17 million was spent from the $25 million appropriated for incentives.” The report also notes the MFO has approved projects for FY2013 that would total about $33.5 million out of the $50 million appropriated by the legislature. Slightly more than $24.5 million is currently unspent. “Based upon these indices, it is clear that past assumptions about how to grow the film and digital media industry no longer serve to attract or support” that form of economic development to maximum effect. The report states the film industry people working in Michigan believe “unanimously that the new iteration of incentives (2011 to present) is not effective when compared to the impact made by the preceding initiative (20082010). Further, participants perceived that building Michigan’s indigenous (film industry) work force was no longer a priority; and that stimulating the state’s economic growth and development was significantly hampered because of continuing political controversy over the incentive program.” Havens told the Business Journal the intent of the FFM report is to “get the insight of the people” who are actually working in film and digital production in Michigan now, while the MFO is revamping strategy. A key long-term recommendation in the report is that Michigan “establish high-tech zones to help interested communities attract and locate film and digital media companies within economic development areas similar to the current Medical Mile in Grand Rapids, Auto Alley in Oakland County, etc.” The report says professionals from established film companies should be recruited to set up shop in these high-tech zones, including agents for actors and writers, film distributors, and managers in production and post-production companies. Havens mentioned that the state of Michigan is looking in the Middle East for companies willing to invest in Michigan. “Those countries do have a thriving industry in film, and they have a lot of financial resources. The question is, what would it take to get them to invest here in film? We’re inviting them for everything else — why not film?”
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18 Grand rapids Business Journal 30th anniversary September 16, 2013
Grand Rapids proves to be a championship town Football, baseball, basketball and hockey all made their mark on West Michigan. David Czurak
Grand Rapids Business Journal
The modern era for local professional sports really isn’t that old — only going back about 20 years — because the industry is facility driven. Without a stadium, field or arena capable of holding sizeable crowds, the revenue won’t be there and neither will the franchises. That was the case here until April 12, 1994, when the West Michigan Whitecaps played their first Midwest Baseball League home game at Old Kent Park in Comstock Park. That spring day capped an eight-year crusade driven by Lew Chamberlin and Dennis Baxter to bring professional baseball here; they moved the Madison Muskies to the 10,000-seat suburban park and became an affiliate of the Oakland Athletics. “I speak at a lot of functions and what’s amazing to me is that people are surprised it’s been 20 years,” said Whitecaps President Scott Lane.
Rapids Sullivans, a top-notch amateur baseball club, in 1953. The Sullivans played home games at Valley Field, now Sullivan Field, on the city’s west side and won the National Baseball Congress World Series in 1960, 1970, 1983 and 1984. In fall 1961, Sullivan played a major role in bringing the Grand Rapids Tackers into the Mid-West Professional Basketball League and won the league championship in the 1963-64 season. The following year the Tackers moved to the North American Basketball League and won two titles there in 1964 and 1967, the year the NABL disbanded. Sullivan had a hand in football, too, with the Grand Rapids Shamrocks and Grand Rapids Blazers. Both teams played home games at the South High School field in Burton Heights. Both played in the United Football League and both won championships. The Shamrocks was the first entry and won the title in 1961. Then the Shamrocks became the Blazers the following year and also became champs in 1962. The league dissolved two years later in 1964. Three years before Sullivan started his baseball club, the Grand Rapids Rockets were playing hockey at Stadium Arena, now the DeltaPlex Arena and Conference
The whiTecaPS have made it to the mBl championship series five times in their history and won the title each time. courtesy the whitecaps
But before Chamberlin and Baxter made their mark on the modern era, one businessman was the sports business here. Robert “Bob” Sullivan owned and operated Sullivan’s Carpets and Furniture on the site now occupied by Bridgewater Place and River House condos. He also had a tile store on Bridge Street where the Swift Printing Co. is today. Sullivan held interests for decades in local basketball, football and baseball teams at the semiprofessional and amateur levels. He formed and managed the Grand
Center in Walker. The Rockets skated in the International Hockey League from 1950-1956 and lost in the league finals three times. The franchise left town after the 1956 season to become the Huntington Hornets and then moved again to become the Louisville Rebels in 1957. The franchise folded in 1959. Twenty-two years passed before pro hockey was played again at Stadium Arena. In 1978, the IHL’s Dayton franchise moved here and became the Grand Rapids Owls. The Owls only played for two seasons, losing in the IHL
GRaND RaPiDS RamPaGe won the arenaBowl, the league’s championship, at the arena before a national audience on aBc television on aug. 19, 2001. courtesy the Rampage
finals the first year and failing to make the playoffs in their second and last season. But pro hockey returned in a big way 16 years later. The Van Andel Arena opened Oct. 12, 1996, and the Grand Rapids Griffins, then an IHL franchise, began their run a few days later in front of a packed house of 10,834. The Grand Action Committee, a coalition of local business people, and the Downtown Development Authority worked together for a period of four years to bring the city a firstclass facility. Spectacor Management Group was chosen by the DDA to manage the building. The city had hired SMG to oversee operations at the Grand Center, the convention and meeting facility, in 1994. Craig Liston was the SMG manager then and told the Business Journal Grand Rapids was the nation’s largest city without an arena until the Van Andel made its debut. Dan and Pamella DeVos and David Van Andel created West Michigan Hockey Inc. in 1995 with the sole purpose of bringing pro hockey here. Their firm signed a lease agreement for the arena with the DDA on Oct. 11, 1995, after the IHL awarded the partners an expansion franchise the previous April. “When we announced the formation of West Michigan Hockey in January of this year, our stated objective was to offer affordable family entertainment through the highest quality hockey possible. Under the terms of this lease agreement we will have accomplished that,” said Dan DeVos then. The Griffins played in the IHL through 2001, the year the league dissolved, and joined the American Hockey League the following sea-
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son. The team, the primary affiliate of the Detroit Red Wings, won the Calder Cup championship in June 2013 and presented the city with its first hockey title. The Griffins weren’t the arena’s only pro sport tenant. The Grand Rapids Hoops beat the Rockford Lightning on Nov. 16, 1996, in a Continental Basketball League game at the arena that drew 8,704 fans. Businessman Bob Przybysz and his partner Brendan Suhr had bought the Grand Rapids Mackers in March of that year and moved the team from the Welsh Auditorium, which only had a seating capacity of 3,500, to the arena. They returned the franchise to its original name after running a name-theteam contest. The Hoops debuted in the CBA in the 1989-1990 season at the Welsh and the successful 3-on-3 tournament Gus Macker crew bought the club in 1993. But the CBA struggled and the Hoops folded in February 2001 when the league suspended operations. Isiah Thomas, former Detroit Pistons great, bought the league and all its franchises. But when Thomas accepted the head coaching job for the Indiana Pacers, the National Basketball Association forced him to relinquish his ownership. Buyers couldn’t be found and the CBA died. The Hoops played for a seasonand-a-half in the International Basketball League when local businessmen Joel and Bruce Langlois, owners of the DeltaPlex, revived the franchise and moved the games into their building. The franchise ended in 2002 following a thirdplace finish in the IBL. Football also was played in the arena. Dan and Pamella DeVos brought the indoor variety of the game to the building in 1998. A year earlier, their firm, DP Fox Ventures, purchased the defunct Arena Football League franchises of the Detroit Drive and Massachusetts Marauders and named the
club the Grand Rapids Rampage. The franchise won the ArenaBowl, the league’s championship, at the arena before a national audience on ABC television on Aug. 19, 2001. In 1999, arena football was identified as the hottest pro sports commodity around. But a decade later, financial strains throughout the league convinced owners to cancel the 2009 season. “I believe what is best for the AFL is best for the Grand Rapids Rampage. When the league is ready, the Rampage will play,” said Dan DeVos at the time. But on March 5, 2010, DP Fox announced the Rampage was officially out of business. The Whitecaps recently concluded their 20th season, and management is making plans for a 21st that will begin at Fifth Third Ballpark next April. The franchise set minor league attendance records in its first few seasons and drew an all-time high of 547,401 in 1996. The team pulled in a very respectable 390,000 fans through its turnstiles to finish fourth in MBL attendance. The Whitecaps have made it to the MBL championship series five times in their history and won the title every time. They beat Wisconsin in 1996; Rockford in 1998; Kane County in 2004 and 2006; and Beloit in 2007. Perhaps the club’s biggest victory was bringing baseball here and kick-starting the modern era of local pro sports. The Business Journal gave Chamberlin and Baxter its prestigious Newsmaker of the Year Award in 1994 for their never-sayquit effort to make the Whitecaps and the local sports industry a winner. “We reached levels of success we might never have dreamed we’d reach,” said Chamberlin back then. “It was frustrating at times, but I never lost the idea that it was going to be successful,” added Baxter. “It was just too good to back away from.”
The GRaND RaPiDS GRiffiNS won the calder cup in 2013. courtesy the Griffins
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Newsmaker Award winners prove their staying power Tim Gortsema
Grand Rapids Business Journal
It’s a club whose membership grows by one each year. The Grand Rapids Business Journal’s Newsmaker of the Year Award goes to individuals or entities whose economic impact will be felt in the community for years to come. The award is given each January to one of 10 finalists announced the previous December. So far, 21 winners have accepted the honor. History can sometimes be a cruel judge in these instances, but many of the winners certainly have had a long-term economic impact on the community and were deserving recipients. The Newsmaker of the Year Award winners: 1992: Few would argue the impact that Rich DeVos has had on West Michigan, both then and now. The DeVos name can be seen on many of the area’s public buildings to which he provided significant funds, seeding the beginning of the downtown renaissance. The firm he founded with lifelong friend Jay Van Andel, Amway Corp., remains one of the world’s major players in the direct-selling business. 1993: The next year’s winner also represented one of the area’s corporate icons, but Steelcase CEO Jerry Myers would leave his post just 18 months after receiving the Business Journal’s top honor. 1994: Lew Chamberlin and Denny Baxter, after years of beating the bushes, brought professional minor league baseball here in the form of the West Michigan Whitecaps. The team would go on to win five Midwest Baseball League
championships and become the Class A affiliate of the Detroit Tigers. 1995: John Canepa, Dick DeVos and David Frey, representing the Grand Action Committee, helped bring Van Andel Arena to downtown Grand Rapids, creating a ripple effect that is still being felt today. 1996: Another threesome consisting of City Manager Kurt Kimball, Right Place President Birgit Klohs and Gov. John Engler earned honors for their overall impact as partners in economic development in West Michigan through the Brownfield Redevelopment Act, which spurred dozens of projects.
made its presence felt with breakthrough work in the cancer research and biomed fields. CEO David Van Andel said the best was yet to come, and his statement proved prophetic. 2001: The award went public again, with Kent County Board of Commissioners Chairman Pat Malone and Kent County Administrator Daryl Delabbio accepting the honor for the effort put forth by county officials in making Kent a better place to live and work, ranging from parkland preservation to the new courthouse to health plans for those who couldn’t afford them.
Place convention center earned plaudits for national significance along with its local development impetus. 2004: The importance of health care in the community was validated when Saint Mary’s Lacks Cancer Center and the Meijer Heart Center at Spectrum Health earned top honors as much for the way they would deliver treatment as for their stunning new facilities. 2005: Health care scored another win with the opening of the new Metro Health campus just south of Grand Rapids.
2009: David Van Andel’s “best is yet to come” statement came to fruition with the opening of the $150 million Phase II of Van Andel Institute.
2011: Even as it approached its 50th anniversary, Grand Valley State University continued to exhibit fresh ideas and enthusiasm for development, with expansions at both its Allendale and Grand Rapids campuses. Michigan Future Inc. President Lou Glazer called Grand Valley “the most important asset that West Michigan has for a future successful economy.”
1998: The emphasis returned to the sports world when the West Michigan Grand Prix and its driving forces, Sam Cummings and Dan DeVos, made downtown rumble. But the noise was short-lived as WMGP was unable to land a title sponsor and was out of financial gas two years later.
2000: The region’s main life sciences player, Van Andel Institute,
2008: Finally, the health-care run was halted when the internationally acclaimed JW Marriott Hotel opened in downtown Grand Rapids.
2010: West Michigan began a return to its automotive roots when Gentex Corp. earned top honors for its explosive growth rate and hiring of 600 new employees.
1997: The birth of Spectrum Health, through the marriage of the former Blodgett and Butterworth hospitals, took center stage and is now the area’s largest employer.
1999: The theme of saving gas brought honors to three people who immersed themselves in parking and transportation. Ted Perez, George Heartwell and David Cassard earned the honor for their work to cure the region’s “growth issue” of parking and mass transit.
come known as the Medical Mile, RDV Corp. took top honors for its work along Michigan Street NE and development of many of the health-care related facilities that stand there today.
meTRO healTh left its land-locked Grand Rapids location and opened its new leeD-certified campus in Byron center. Photo by michael Buck
2002: A partnership between Siemens Corp. and Grand Valley State University earned credit for developing an alternative-energy business park in Muskegon.
2006: The health-care theme continued with the Michigan State University College of Human Medicine’s new location in downtown Grand Rapids.
2003: The $212 million DeVos
2007: Building off what would be-
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2012: The latest piece in downtown’s renewal earned top honors. The new Downtown Market was expected to have a 10-year economic impact of $775 million and create more than 1,300 jobs, according to co-developers Grand Action Committee and Grand Rapids Downtown Development Authority. The money is a staggering figure and, if it comes to fruition, will be an economic catalyst on the scale of Van Andel Arena.
Congratulations to the Grand Rapids Business Journal for 30 years of dedication to the Grand Rapids Community! 32 Market
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