MiBiz May 24, 2021 print edition by MiBiz

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Advocates push for statewide affordable housing legislation

Frenzied feeding Local restaurateurs struggle to adapt to lingering worker shortages, soaring costs By JAYSON BUSSA | MiBiz jbussa@mibiz.com

By KATE CARLSON | MiBiz kcarlson@mibiz.com GRAND RAPIDS — The lack of affordable housing supply is increasingly important for members of the Grand Rapids Area Chamber of Commerce, which is now helping lead a legislative effort to give municipalities more tools to advance projects. A f f or d a b l e hou s ing advocates in West Michigan and across the state formed the Housing Michigan coalition to push several bills that are now before state lawmakers. The coalition is Victory led by local and statewide groups including the Grand Rapids Chamber, Home Builders Association of Michigan, Michigan Municipal League and Housing North. A multi-bill package introduced last month by a bipartisan slate of lawmakers would allow for a variety of tax incentives to grow affordable housing supply. The key themes involve giving local governments more flexibility and control over affordable housing programs while expanding “workforce housing” for people who may have difficulty obtaining market-rate housing but make more than what qualifies for affordable housing. Josh Lunger, director of government affairs at the Grand Rapids Chamber, and other members of Housing Michigan testified this month to the Senate Committee on Economic and Small Business Development. “We started working on the housing issue locally quite a while ago,” Lunger said. “Our members have been raising this issue for several years. It’s a talent and quality of life issue that intersects with so many of our other issues.” See HOUSING LEGISLATION on page 6

ike nearly everyone in the restaurant industry, Jessica Ann Tyson has dealt with a barrage of challanges throughout the course of the last 15 months. Tyson is the owner of The Candied Yam LLC in Grand Rapids, a fastcasual establishment at 2305 44th St. SE that serves southern cuisine via limited dine-in and takeout services. As pandemic mitigation restrictions have continued to loosen statewide, Tyson’s latest dilemma hinges on scrounging for employees and piecing together some semblance of a fullystaffed workforce. “I can either look at this like a lemon or lemonade,” Tyson said. “I’m choosing lemonade, but I have some tequila in mine just to get me through.” See LABOR SHORTAGE on page 13

Food Systems

Also Inside: n Supply chain disruptions continue, page 12 n Farmers markets remain strong, page 14 Jessica Ann Tyson, owner of The Candied Yam LLC in Grand Rapids. PHOTO BY JEFF HAGE

Incoming MEDC leader cites ‘transferrable challenges’ with move to Michigan By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

ichigan Economic Development Corp. announced a transition in leadership last week that will bring economic development expertise from the bayous of Louisiana to the peninsulas of Michigan. The organization selected incoming CEO Quentin Messer Jr. from a candidate field of more

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Furniture manufacturers face fragile, inefficient supply chains

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than 100 people spanning 26 states and Puerto Rico. His appointment will be in effect by July 19. The MEDC Executive Committee’s selection drew widespread praise and optimism as the state enters its post-pandemic recovery. “The candidate pool was pretty deep, not just in terms of numbers but also in expertise,” said Grand Rapids Community College President Bill Pink, who serves on the MEDC’s Executive Committee and was part of the search committee. “It’s a compliment to the state that we have

such qualified candidates to this position.” Messer, 52, is leaving his post as president and CEO of the New Orleans Business Alliance, where he spent nearly six years pursuing economic development in the city. His new role will cover the entirety of Michigan, which also includes an iconic American city known for its resilience. “It wouldn’t do justice to Detroiters to say the city is like New Orleans,” and vice versa, Messer said in an interview with MiBiz. “Both are See MEDC CEO on page 3

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MEDC CEO

Continued from page 1 iconic cities, both are cities that matter and are a tremendous barometer that indicate how we as a country are doing. I’ve had the pleasure of serving an iconic American city — now I have the pleasure of serving an iconic American state.” Messer earned his bachelor’s degree from Princeton University, a master of business administration from Columbia University and a law degree from Columbia’s School of Law. After various nonprofit and consulting positions, Messer served three years at the Louisiana Economic Development Corp. Messer — the last two as assistant secretary — before leading the New Orleans Business Alliance. Messer said the “transferrable challenges” between New Orleans and Michigan are multi-faceted. “The first is making economic development matter to people,” he said. “Yes, you’ve Pink got to win deals and move projects, but if economic development doesn’t help with upward mobility, then it really has lost its meaning.” He added that New Orleans and Michigan often share a misperception from outsiders, which economic developers must address. “People thinking of New Orleans don’t necessarily

think of business, they think about having a great time. I don’t think people fully understand the richness of Michigan,” he said, specifically noting Portage-based Pfizer Inc.’s role in the COVID-19 vaccine rollout. A third challenge Messer faces, as he did while at the Louisiana Economic Development Corp., is balancing the interests of demographically different parts of the state. “What we’ll build is a championship economy that makes the reality of a changing economy relevant for people so they don’t feel invisible, or that the economy is passing them,” Messer said. “The connection is that ultimately people want opportunities. They want economic development to help them realize their dreams and aspirations.”

Post-pandemic recovery Messer succeeds former MEDC CEO Mark Burton, who left the post in March to co-lead Detroit-based law firm Honigman LLP’s economic development incentives group. Jeff Noel, corporate vice president at Benton Harbor-based Whirlpool Corp. who served on the search committee, will continue as MEDC’s interim CEO until Messer’s appointment is confirmed. Pink said leaders across business sectors — not just economic development officials — will be responsible for overseeing the transition to the post-pandemic economy. That includes adapting to workplace changes, supply and demand for goods and labor, and effectively using billions of dollars in federal stimulus funds. “I think (MEDC’s) top priority is pretty aligned with mine: How do we help our community dig out of this pandemic?” Pink said, referring to getting companies that have been reshaped by COVID-19 back to “running on all cylinders.”

MIBIZ, ENERGY NEWS NETWORK PARTNER ON STATEWIDE ENERGY NEWSLETTER

une 1 marks the start of a new partnership between MiBiz and St. Paul, Minn.-based nonprofit Energy News Network. For myself, though, it’s more of a reunion. From 2014 to 2020, I was a reporting fellow for Energy News Network, where I covered energy policy and politics in Michigan for the nonprofit newsroom. I’ve also continued to write a daily newsletter known as Midwest Energy News, which compiles energy-related stories in the 12-state region. I was grateful to spend six years regularly covering a complex topic like energy, which I found to be increasingly important for residents and businesses alike. Battery storage, declining costs of renewable energy and equitably transitioning from an electricity system as we knew it for decades are just some of Balaskovitz the seismic shifts taking place. As such, MiBiz and Energy News Network are launching a new weekly online newsletter — Michigan Energy Digest — that will focus exclusively on the state of Michigan. It will compile original stories from MiBiz and Energy News Network reporters as well as aggregate energy-related stories from other outlets. From the future of the Line 5 pipeline to automakers’ transition to electric vehicles, Michigan remains at the forefront of the sweeping energy transition. We hope you find value in the Midwest Energy Digest, which you can sign up for at mibiz.com. As always, thank you for reading.

Andy Balaskovitz, Managing Editor

Visit www.mibiz.com

“That needs to be a big focus area for many of us in the state,” Pink said. Messer described envisioning the role of postpandemic economic development as the “$65 million question.” But he believes Michigan has some built-in advantages. “Michigan is incredibly well positioned as more people go to hybrid, remote work situations. Its quality of place and central location will be very attractive to people who can work anywhere in the country,” he said. “At the end of the day, attractive states that have great talent, great physical places and great people with high integrity will always be winners. That’s Michigan.” Messer also comes to the state as economic development officials, including in West Michigan, place more emphasis on equitable economic development and ensuring that people of color have the same access to capital and opportunities to grow their companies. Messer said equitable development includes multiple “critical elements,” including the potential for upward mobility regardless of race, ethnicity or gender, and “leveraging all of the assets of all people.” “The final thing is making sure we celebrate, protect and provide capital to other opportunities to expand those businesses in Michigan,” he said. Pink said Messer stood out from the dozens of applicants based on his experience, communication skills and preparedness. “Quentin had done extensive homework on Michigan, its regions and the MEDC itself,” Pink said. “He has a good grasp on who we are and what we’re doing here.” Messer said his first priorities include building on that by visiting regions of the state like the Upper Peninsula and West Michigan: “I need to listen and move quickly.”

Business advocacy groups from around the Great Lakes argued this month that shutting down Line 5 would lead to a crisis in regional oil and gas markets, although pipeline critics say that forecast is overblown. The two sides ramped up advocacy recently as Enbridge Inc. ignored the state’s May 12 deadline to shut down the twin pipelines in the Straits of Mackinac. The company is in a dispute in federal court over the proper legal venue, arguing with the state more broadly about whether the pipeline should be shut down. The May 12 deadline set off a flurry of advocacy as well as legal, executive and legislative action this month. Chambers of commerce from Great Lakes states, the U.S. and Canada recently announced a joint brief they filed in the Whitmer administration’s case against Enbridge that’s pending

West Michigan’s big three furniture makers forecast workplace changes As business leaders across industries grapple with their approach to the workplace in a post-pandemic era, The Economic Club of Grand Rapids provided insight on the topic from some of the most influential players in office furniture. In a rare event, the CEOs of West Michigan’s big three furniture makers — Haworth Inc., Herman Miller Inc. and Steelcase Inc. — shared a virtual stage last week to offer their insights into the post-pandemic workplace and the effects COVID-19 has had on the industry. Moderated by Deirdre Jimenez, president and CEO of the Business and Institutional Furniture Manufacturer’s Association (BIFMA), the event covered recent industry trends as well as topics

Editor Joe Boomgaard / jboomgaard@mibiz.com Managing Editor Andy Balaskovitz / abalaskovitz@mibiz.com (energy, policy) Senior Editor Jayson Bussa / jbussa@mibiz.com (manufacturing, tech, sports) Senior Writer Mark Sanchez / msanchez@mibiz.com (finance, health care, life sciences) Staff Writer Kate Carlson / kcarlson@mibiz.com (real estate & development, small biz) Contributing Reporter Josh Spanninga Contributing Photographer Jeff Hage VP of Production & Audience Development Kristi Kortman / kkortman@mibiz.com Digital Specialist Danielle Affholter / daffholter@mibiz.com Graphic Designer Kaylee Van Tuinen / kvantuinen@mibiz.com

Director, Finance & Administration Tarah Buchan / tbuchan@mibiz.com

A recap of recent stories from MiBiz.com.

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Online casino gaming holds strong as sports betting expectedly dips While Michigan’s online sports betting figures made an expected drop in April, the state continued to see strong performance from online casino gaming, making it one of the nation’s top markets. On the heels of a month that featured the NCAA men’s basketball tournament, internet sports betting operators saw a month-overmonth decrease in both handle and gross receipts. For A pr i l, i nt er net sports betting operators handled $249.9 million in bets, which was down 30.5 percent from $359.5 million in March. Revenue for these operators also took a 36.8-percent hit, with $20.4 million in receipts. This was the first month-over-month decrease for the state’s nascent industry.

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MiBiz ISSN 1085-4916 • USPS 017-099 Established 1988 MiBiz is published every other week by MiBiz, Inc., P.O. Box 1629, Grand Rapids, MI 49501. Telephone (616) 608-6170. Fax (616) 608-6182. E-mail: info@mibiz.com. Subscription changes: subscribe@mibiz. com. Periodicals Postage is paid at Grand Rapids, MI. POSTMASTER: Send address changes to MiBiz, P.O. Box 1629, Grand Rapids, MI 49501. Subscriptions are available without cost to qualified readers. Paid subscriptions are available to those not meeting qualified circulation requirements. Paid subscriptions are $99/year. Single copy and back issues (when available) are $3 each, plus first class postage. Call 1-877-443-1977 to order. MIBIZ INC. 1059 Wealthy St. SE, #202 Grand Rapids, MI 49506 616-608-6170 phone • 616-608-6182 fax COPYRIGHT ©2021. All Rights Reserved.

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MiBiz / MAY 24, 2021

MANUFACTURING

Furniture manufacturers huddle to overcome supply chain challenges By JAYSON BUSSA | MiBiz jbussa@mibiz.com

ragile and inefficient supply chains took center stage throughout the COVID-19 pandemic and have furniture OEMs reevaluating the ways to approach this key component of their operations. At the same time, smaller manufacturers are eagerly vying for the opportunity to supply the furniture industry. Both sides came together recently for the first-of-its-kind Michigan Furniture Industry Sy mposium. The event was hosted by the Michigan Economic Development Corp.’s Pure

Michigan Business Connect (PMBC) program and was in partnership with West Michiganbased economic development agencies Lakeshore Advantage and The Right Place Inc. The event, held virtually on May 13, brought together 10 purchasing companies from Michigan and beyond with dozens of Michigan-based suppliers. The symposium featured a best practices panel discussion involving furniture executives and also facilitated 80 buyer-supplier meetings. Buyers included names like Zeeland-based Herman Miller Inc., Lowell-based Enwork and Genesis Seating Inc. in Kentwood. “We have worked with (office furniture) businesses before but those have not been on

specifically industry-focused initiatives,” said PMBC Senior Program Specialist Katy Till. “This is the first time solely focused on the commercial furniture industry to provide those supply chain connection opportunities. “K now ing they have experienced unique challenges due to COVID, we wanted to provide resources at a state Jimenez Sparks Till level to help with some of the supply chain issues that furniture industry companies were experiencing.” industry meaningful for West Michigan, and that Till said that PMBC — which provides prothe pandemic helped reshape some of its content. gramming predominately in metro Detroit — “(The PMBC staff) reconnected around the fall wanted to design an event that would benefit an of last year and said this is probably a better time than any to do something with the commercial furniture industry now that we know there are even more unique challenges and opportunities related to COVID,” Till said.

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Amy Sparks, president and CEO of Hollandbased manufacturer Nuvar Inc., was included on the event’s panel discussion. As a Tier 1 supplier for furniture OEMs, she fielded meetings with Michigan-based suppliers in an effort to forge new relationships. Nuvar manufactures finished goods primarily for the commercial office furniture industry. When the pandemic hit and orders for most commercial office furniture products plunged, Nuvar’s sales followed suit. This led Nuvar to scour for opportunities both in furniture and other industries. “We believe (commercial furniture sales) will come back, but what else can we be doing and how else can we add value?” Sparks told MiBiz. “There are so many wonderful companies in Michigan and West Michigan that service that industry that are in the same situation. They have tremendous capabilities. “Everyone uses the word ‘pivot’ — but how do you do that effectively while also remaining there for our historic customers that we believe will come back?” By Sparks’ assessment, now is not only a great time for Michigan-based buyers and sellers to connect, but also for our manufacturing-rich state to court OEMs on a national scale. “There is power in our network, and I think we can bring some wonderful value across the nation as well as international solutions,” she said. “It’s having that right playing field and just the opportunities and open doors.” Nuvar, which Sparks acquired in 2018, has leaned on economic development agencies to make those connections. The Michigan Furniture Industry Symposium was one such opportunity. Nuvar specializes in producing customizable solutions in both low and high volumes, a capability Sparks said is in demand by other industries as well. However, as businesses of all industries begin to sort out their new, revamped approach to work, Sparks said that she expects a strong demand for customization to fit the needs of employees wherever they might be working. “I’m hopeful that allows us to come alongside our partners and say, ‘Hey, let me help you with that. I can take that complexity out,’” Sparks said. “We can come do the rest of it and really open up your offerings.” Visit www.mibiz.com

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Furniture OEMs and suppliers have been working collaboratively to overcome industry shifts and supply chain challenges. PHOTO COURTESY OF STEELCASE INC.

Sealing the deal W hile supply chain challenges plagued all businesses in the commercial furniture market, they’ve been especially detrimental for the smaller players. “We’ve been hearing from some of the members, particularly our smaller and mid-size members, that supply chain issues were impacting them probably more significantly than the larger manufacturers,” said Deirdre Jimenez, president and CEO of the Business and Institutional Furniture Manufacturer’s Association (BIFMA). “So, (the symposium) was perceived as a real opportunity for them to explore expanding their supply chains.” In an industry that is broadly focused on environmental responsibility and sustainability, Jimenez said that like-minded suppliers are more likely to find connections with OEMs. “When you think sustainability and the environment and chemicals of concern — these are all areas that the industry is very proactively working on and improving in,” she said. “If we can bring our suppliers into this value structure, I think that will propel the industry forward.” While the dynamic of the post-pandemic commercial furniture market remains to be seen, Jimenez is bullish on the idea that many large businesses will reel their workforces back to the office. Citing a surge in office searches and interior design projects in large metropolitan areas, she expects an Visit www.mibiz.com

“Knowing they have experienced unique challenges due to COVID, we wanted to provide resources at a state level to help with some of the supply chain issues that furniture industry companies were experiencing.” — KATIE TILL Senior Program Specialist, Pure Michigan Business Connect

approach that is not necessarily dominated by remote work. “A lot of social capital was built up in the workforce prior to the pandemic that carried people through remote work for the year,” Jimenez said. “But that social capital has been eaten up and isolation and distancing and reduced engagement sets in when social capital is low.”

Coming Soon!

TRANSPORTATION

JUNE 21, 2021 This focus will report on the changes and challenges related to mobility throughout the region. We’ll dig into local and regional bus systems, train travel, the region’s airports, municipal planning to make West Michigan more mobile and, of course, parking. Don’t wait to be in this issue! Contact us by Wednesday, June 9 to advertise.

MiBiz / MAY 24, 2021

REAL ESTATE & DEVELOPMENT

Employers embrace more flexible workplaces as in-person restrictions lift By KATE CARLSON | MiBiz kcarlson@mibiz.com

for this story said they were also waiting on additional guidance from the Michigan Occupational Safety and Health Administration he lifting of Michigan’s in-person (MIOSHA) about return to work plans. As part work restrictions is a light at the of a broader budget negotiation deal with lawend of the tunnel for remote workmakers, Whitmer withdrew plans for MIOSHA ers eager to get back to the office, to issue permanent COVID-19 workplace safety while others are hoping f lexible rules. work settings will stick long term. Spectrum Health has shifted to a “virtual Starting May 24, remote workers are allowed first” philosophy, said Pam Ries, chief human to return to offices under Gov. Gretchen resources officer for the Grand Rapids-based Whitmer’s plan that tied various COVID-19 health system. About 8,000 of Spectrum’s 31,000 restrictions to statewide vaccination rates. employees are working virtually, and a return to Michigan hit the first vaccination threshold of the office is not anticipated until January 2022, 55 percent of the population on May 10, allowRies told MiBiz in an email. ing businesses across all sectors to call workers “There may be some roles that have a busiback to offices. ness need to return sooner, which we will carefully evaluate,” Ries said. “We’ll continue discussions and leaders will make decisions based on roles and what works best for each team.” Spectrum will provide employees with an advance notice before moving into the next phase of in-person work. Remote work for finance, billing, human resources and I.T. can effectively be done remotely long Weaver Ries Thelen term, while other teams that benefit Hitting the threshold eliminates the requirefrom face-to-face interaction will meet in perment that employers create a “policy prohibitson at times, Ries said. ing in-person work for employees to the extent Meanwhile, Spectrum’s planned eightthat their work activities can feasibly be comstory office building north of downtown Grand pleted remotely,” state officials said last week in Rapids for 1,200 employees will feature “hotelan announcement that permanent COVID-19 ing space” to accommodate workers who split safety rules are also off the table. their time between remote and in-person work, However, not everyone is eager to return Spectrum officials have said. to in-person work, and employers have so far “We know the future of work is all about taken varied approaches to bringing workers more flexibility, and we’ve learned that proback. ductivity remains strong,” Ries said. According to a March 2021 survey of 2,000 full-time workers nationwide, 87 percent of Return ‘in waves,’ talent respondents who have been working remotely development during the pandemic would prefer to conEven with restrictions lifted, companies tinue working remotely at least one day a week. bringing workers back will likely “come in Among all workers, 68 percent responded that a waves,” said The Right Place Inc. President hybrid workplace would be ideal going forward, and CEO Randy Thelen. according to the survey by market research firm Office restrictions until now have given Morning Consult. most companies some leeway in allowing people to work in offices during the pandemic, and ‘We’re not forcing people back’ some people have already started migrating In West Michigan, business leaders appear back, Thelen said. to be open to a more flexible or hybrid approach, “In the past couple of weeks there have been at least for the foreseeable future. more people downtown during lunchtime,” he Grand Rapids-based health care nonprofit said. “You’re starting to see it more and more as Hope Network surveyed its office employvaccination rates pick up.” ees and found the majority want to return to Some companies and organizations are still the office at least on a part-time basis, said developing their back-to-work strategy. Blue President and CEO Phil Weaver. Cross Blue Shield of Michigan’s Grand Rapids About 150 people worked at Hope Network’s office as of late last week had not yet made a main office in Grand Rapids before the pandecision for bringing back workers, according demic. While roughly 40 to 45 people came in to a company spokesperson. throughout the pandemic, about two-thirds Thelen sees value in returning to offices of the employees are still working remotely, for roles that require collaboration among Weaver said. employees, as well as younger employees that “We’re not forcing people back yet, but we’re learn through “subtle training” that comes from encouraging a couple meetings in certain cases being around others in a workplace. that might require group or collaborative ses“Young staff members are still growing in sions,” Weaver said. their careers and haven’t had development Weaver and other employers interviewed opportunities in the past year in certain ways

MAY 24, 2021 / MiBiz

“We know the future of work is all about more flexibility, and we’ve learned that productivity remains strong.” — PAM RIES Chief Human Resources Officer, Spectrum Health

that can only happen in an office environment,” Thelen said. Weaver of Hope Network is still cautious about potential effects after a year of remote working and how that could affect an employee’s development. “There are issues out there that nobody is really talking about,” Weaver said. “If you have a person working in the office every day and a person working remotely that you don’t see every day, who is going to get the promotion? Those things will have to be looked at on the human resources side of things. The fact of the matter is, if you want to move up in a company, it’s going to be hard to do that remotely.” Hitting the 55 percent vaccination threshold accelerated many companies’ return-to-work plans that had been under development since last year. The Right Place’s staff will be invited back to work in the office by the end of the month, but Thelen recognizes some employees’ switch from remote to in-person may not happen quickly. “We committed to give everyone on our team a 30-day notice before we make any requirements to work in the office,” Thelen said. “It takes time. We were able to switch from the office to the home in an instant because that was the mandate, but there is going to need to be a bit of a grace period for some people. We’ll work with them and be flexible.” Weaver expressed similar reasoning in giving workers flexibility in ramping up in-person work, citing complicating factors including childcare or taking care of a sick family member. “What we will be doing is requiring them to attend some meetings in the office, but they would be one day a week or every other week, that’s still being determined,” Weaver said. Thelen said one aspect of the pandemic’s seismic effect on office work is clear: Employers will be more flexible than ever before on inoffice expectations for employees. “There will be greater flexibility in the way we go about our work,” Thelen said. “Flexible work schedules will be allowed in a way we haven’t had historically.”

HOUSING LEGISLATION Continued from page 1

Patchwork of policies Lunger noted that only some cities have the tools to award tax incentives to affordable developments while most municipalities are unable to directly support workforce housing. For example, Senate Bill 360 — sponsored by Sen. Roger Victory, R-Hudsonville — would offer tax credits to employers that contribute to a local housing trust fund or that offer employees an option to participate in a “qualified employer-assisted housing project.” “In West Michigan where I serve, wages have increased nearly 6 percent since 2015, but the average price of a home has increased by over 60 percent during the same period of time,” Victory said in a statement. “We can attract industry, but the question is how do we connect them with the workforce?” State Rep. Mark Huizenga, R-Walker, who’s sponsoring a Kilpatrick companion bill in the House, added in a statement: “Kent County is facing a critical shortage of affordable housing. This plan represents a commonsense public-private partnership to address the needs of my constituents.” Taken together, the bills are meant to fill in some of the housLunger ing policy gaps and be customizable to give local control to each community’s housing needs, Lunger said. Currently, brownfield incentives are the main tool that developers can use to ensure a level of affordability for tenants, but the incentives are limited to projects in certain areas. Low Income VerWys Housing Tax Credits from the Michigan State Housing Development Authority are also available, though advocates say the program has become increasingly competitive. Neighborhood enterprise zones are similar to brownfield tax increment financing, said Ryan Kilpatrick, executive director of Housing Next. Both tools rely on the same enabling legislation, the Obsolete Property Rehabilitation Act, which defines communities that are eligible to use neighborhood enterprise zones based on prior U.S. Census data. Senate Bill 364 — sponsored by Sen. Jeremy Moss, D-Southfield — would expand the ability for local governments to designate neighborhood enterprise zones for “compact development,” effectively opening the tool to any city, town or village across the state. “We’ve got tax breaks available for commercial and industrial reinvestment, and principal residences have the ability to take a reduced tax rate,” Kilpatrick said. “The one constituent group that always tends to pay full taxes no matter what is low-income renters.” The customization baked into the legislation that accounts for varying area median income (AMI) among cities is also important, Kilpatrick said.

Passing savings on The proposed Attainable Housing and Rehabilitation Act — Senate Bill 362, sponsored by Sen. Winnie Brinks, D-Grand Rapids — would allow local Visit www.mibiz.com

Housing bills A multi-bill package pending with state lawmakers provides a variety of incentives to encourage affordable and workforce housing. Companion bills for each have been introduced in the state House and Senate:

SB 360-361 / HB 4649-4650 Allows for an employer-supported housing credit Sponsored by Sen. Roger Victory, R-Hudsonville, and Rep. Mark Huizenga, R-Walker

SB 362 / HB 4647 The Affordable Housing and Rehabilitation Act would allow residential developments with a level of affordable units to qualify for tax incentives Sponsored by Sen. Winnie Brinks, D-Grand Rapids, and Rep. Terry Sabo, D-Muskegon

SB 363 / HB 4648

Benjamin A. Zainea

Re-establishes the state Code Promulgation Committee Sponsored by Sen. Kevin Daley, R-Lum, and Rep. Joe Tate, D-Detroit

David S. Lefere

SB 364 / HB 4646 Expands Neighborhood Enterprise Zones to additional local governments statewide Sponsored by Sen. Jeremy Moss, D-Southfield, and Rep. Kyra Bolden, Southfield

SB 422 / HB 4827 Creates a residential facilities exemption that would allow a temporary tax abatement on qualified new housing development districts Sponsored by Sen. Ken Horn, R-Frankenmuth, and Rep. John Roth, R-Traverse City

SB 432 Allows local governments to enter into PILOT agreements with developers who are building or rehabilitating affordable or workforce housing units Sponsored by Sen. Wayne Schmidt, R-Traverse City

governments to establish attainable housing districts that would give developers tax relief if they reserve a certain amount of affordable units for income-qualified households. The threshold of affordable units would be set by the local unit of government, but could not fall below 30 percent of the project. “Income-qualified households” is defined in the legislation as a household that earns an annual income of 120 percent or less than the AMI. Abating property taxes in some way would be a huge help for Inner City Christian Federation, a Grand Rapids-based nonprofit that fills a variety of housing needs, including developing and rehabilitating properties into affordable units. “Five years ago we bought the Eastern Elementary building, and for us it takes some time to do the financing to renovate something into affordable housing,” said ICCF CEO Ryan VerWys. “During that time, we pay full property taxes on a building.” ICCF paid about $110,000 in property taxes on the elementary building before it was converted into affordable housing, VerWys said. Any savings on property taxes for a nonprofit would directly allow it to do more work toward affordable housing, he added. “If we see these policies go through, it would help us tremendously,” VerWys said. “Any savings would be passed on to our residents.” Visit www.mibiz.com

“If we see these policies go through, it would help us tremendously. Any savings would be passed on to our residents.” — RYAN VERWYS CEO, Inner City Christian Federation

VerWys also believes the bills would provide more incentives for landlords who are interested in making their properties more affordable for renters. “It’s a new set of tools in the tool kit and in some ways it is enlisting help from the marketplace of landlords or property owners with some kind of incentive that they could use to reduce rent or target their property to a low-income family,” VerWys said. Kilpatrick is optimistic that the legislation will advance in the Legislature given its bipartisan support. “What’s really important about the Housing Michigan coalition is that it’s a broad group of stakeholders that came together and wanted to focus on priorities that would get bipartisan support,” Kilpatrick said.

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MiBiz / MAY 24, 2021

HEALTH BIZ

Health insurers face ongoing pandemic complexities when setting future rates By MARK SANCHEZ | MiBiz msanchez@mibiz.com

mall businesses can expect larger increases in their health insurance premiums in 2022 than in recent years, even without costs associated with responding to the COVID-19 pandemic figured into the equation. Both Priority Health and Blue Cross Blue Shield of Michigan, which combined control most of the small group market in West Michigan, attribute their 2022 rate proposals to medical claims trends and the rising costs for prescription drugs, particularly specialty drugs. Blue Cross Blue Shield of Michigan proposes to increase rates by a statewide average of 7.9 percent for small group policies that renew in the first half of 2022. HMO subsidiary Blue Care Network proposes a 6.9-percent increase. The 2022 rate proposals to state regulators from Fester Michigan’s largest health insurer reflect medical claims trends outside of the effects of the COVD-19 pandemic, according to Sandra Fester, vice president of Michigan business at Blue Cross Blue Shield of Michigan. “Factors driving the trend are typical health care drivers Wolfenden such as hospital fee increases, higher utilization and higher pharmacy trends, including specialty drug costs,” Fester wrote in an emailed statement to MiBiz. “While we believe there could be higher costs related to COVID-19 in 2022 due to continued vaccinations, testing costs and treatment, these have not been built into our rates in order to provide market stability with respect to COVID-19 costs.” The Michigan Department of Insurance and Financial Services last year approved a statewide

average 0.9-percent increase for Blue Cross Blue Shield of Michigan small group policies that renewed in the first and second quarters of 2021, and 1.9 percent for HMO subsidiary Blue Care Network. Grand Rapids-based Priority Health’s 2022 rate proposals filed this month with the state are a little better. Priority Health proposed a statewide average 5-percent increase across all small group products: HMO, PPO and point-of-service plans, according to Diane Wolfenden, the vice president in eastern Michigan who oversees Priority Health’s small group market across the entire state. Wolfenden attributes the increased rate adjustments proposed for 2022 to medical claims trends, led by the ever-rising cost of prescription drugs. Priority Health’s claims trend has been running at 4.2 percent in 2021 while the trend for prescription drugs has been 6 percent, after moderating from 9 percent last year. The cost trend for expensive specialty drugs has been much higher, running “well into the teens, unfortunately,” at 13.6 percent in 2021, Wolfenden said. “It’s a very small volume of prescriptions, but a very high cost, and as (pharmaceutical companies) introduce more and more of them, it’s having greater impacts to those numbers,” she said. A financial report by parent corporation Spectrum Health noted that Priority Health’s $59.1 million operating income in the first quarter was below budget and down from a year ago, “driven by higher than expected medical trends in the first quarter due to higher COVID-19 related expenses and rising pharmacy trends,” according to the report. Priority Health also has seen a “little bit” of care providers raising prices, Wolfenden said. Priority Health’s 2022 rate proposals compare to the 2.6-percent average statewide increase implemented for Jan. 1, 2021 policy renewals. State regulators are reviewing a proposal for an overall average 4.02 percent rate adjustment for small employers that renew HMO or point-of-service policies in the second half of this year.

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Factoring in the pandemic Like Blue Cross Blue Shield, Priority Health’s proposed 2022 rates do not factor in the costs of the pandemic. Actuaries “don’t feel that they have enough data to actually add in any additional adjustment for these adverse impacts of COVID,” Wolfenden said, citing uncertainty about future vaccination rates and the long-term public health effects of COVID-19. “We feel like there is COVID in the experience to a certain degree. We don’t feel the need at this point to add anything additional,” she said. “It’s really too early to start building it into rates.” Setting future health insurance rates for the next year has been a much more complicated process for health insurers after a year dominated by the pandemic. It includes factoring in the costs of treating COVID-19 patients, testing, waiving copays and deductibles, and picking up costs for vaccine administration. Meanwhile, there has been reduced medical claims from last spring’s shutdown as well as a lingering reluctance by some people to seek care. A decline in medical claims a year ago when hospitals were unable to perform elective procedures and surgeries led health insurers to provide employers premium credits. “Predicting what’s going to happen in the future in this environment is very challenging, and there are a lot of different dynamics that have to be considered and lot of those dynamics at this point don’t really fit into historical actuarial and underwriting models,” Adam Dee, director of underwriting risk optimization and consultation at Blue Cross Blue Shield of Michigan, said during a recent presentation hosted by Advantage Benefits Group in Grand Rapids. Those dynamics include ongoing infection and vaccination rates, mitigation policies, the cost of care for COVID-19 patients, a transition to lower-cost telehealth, and the health consequences for those who delayed seeking care for a medical condition. “We have some things that have emerged that really have never been seen before,” Dee said. “There’s a lot that goes into thinking about what our COVID impacts are going to look like in the future.”

Claims volatility Medical claims trends largely returned to normal months ago, although winter and spring COVID-19 case surges meant continued volatility and uncertainty, Dee said. Michigan is now “on the right track” as vaccination rates increase, he said.

“Predicting what’s going to happen in the future in this environment is very challenging, and there are a lot of different dynamics that have to be considered.” — ADAM DEE Director of Underwriting Risk Optimization and Consultation, Blue Cross Blue Shield of Michigan

“Claims going forward may be more stable than what we originally thought, however they still are more volatile than what you may have experienced in the past,” Dee said. In crafting rate proposals for 2022, Blue Cross Blue Shield of Michian sought to use pre-COVID trend expectations and offer rate stability in an environment that remains “very fluid,” said Chris Winkler, director of rating and underwriting. Blue Cross Blue Shield will continue to evaluate claims trends and adjust accordingly to bring employers rate stability “over the next 18 months or so,” Winkler said. “There is still a tremendous amount of uncertainty around COVID. We are seeing 2021 progressing with a potential to settle to more typical rates,” Winkler said at the Advantage Benefits webinar. Since the pandemic began 15 months ago, Blue Cross Blue Shield of Michigan through early this month paid $670.7 million for medical claims for more than 174,000 commercial insurance enrollees and nearly 30,000 Medicare members who contracted COVID-19, according to Kirk Roy, Blue Cross Blue Shield’s vice president for underwriting and actuarial trend. Blue Cross will continue to rack up costs from claims trends as the pandemic lingers and as some people who had COVID-19 experience lingering health effects. “There’s still a significant impact on the health care system and on people’s health, and therefore costs,” Roy said.

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OCTOBER 15, 2018 VOL. 30 • NO. 26

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

Stephen Waterbury, Warner Norcross + Judd LLP.

PHOTO: KATY BATDORFF

SEPTEMBER 29, 2014

A focus on serving others serves Waterbury well during four-decade legal career VOL. 26 • NO. 25

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SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

Preparing for Transition

ground, make people calm and Waterbury’s career accomplishfind ways to help them out. ments as an M&A adviser, menThat’s a rare commodity, espetor and community builder cially with an intelligent attorearned him recognition as the riends and family saw Stephen Waterbury heading toward a ney who does a lot of deals.” first-ever winner of the Western career in law before he ever did. Barnes & Thornburg LLP Michigan Dealmaker Hall of A desire to serve others and help them succeed was the drivattorney Michael Campbell, Fame Award. ing factor that led him to law school and to go on to a lengthy, who served with Waterbury Waterbury is “the last of accomplished legal career. on the board of ACG Western a dying breed,” said Richard After graduating with an undergraduate degree from Michigan State Michigan during the Noreen, CPA, a tax University, he applied and earned acceptance to Harvard Law School. early 2000s, agrees. partner at BDO USA A Lansing native, he later joined Warner Norcross + Judd LLP in M&A AWARDS He’s also been on the LLP who has known Grand Rapids, where he’s practiced business law for nearly 39 years. INDUCTEE: other side of some Waterbury for a During his career, he has handled the legal work for hundreds of mergWESTERN MICHIGAN deals involving cliquarter-century and ers and acquisitions domestically and globally, and served as a mentor DEALMAKER ents Waterbury repworked with him on to the firm’s young associate attorneys at the dawn of their careers. HALL OF FAME resented, and praises several client trans“Others assumed I would go into law earlier than I assumed I would him for his approach. actions. He praises go into law,” Waterbury said discussing his career during an interview “Steve is a true gentleman. Waterbury’s “calming influat the law offices of Warner Norcross + Judd overlooking downtown He’s sharp. He’s respectful of ence” and consensus-building Grand Rapids. SERVING WESTERN MICHIGAN SINCE 1988 everybody — the clients, the approach on getting dealsBUSINESS done. “I ended up viewing it as a way of serving people — I wanted whatother attorneys. He’s a pleasure “No matter how contentious ever I did to have that be a central component,” he said. “At its highest to work with, even if he’s on the something was, Steve always and best, the legal profession is a service profession focused on helpother side,” Campbell said. found a way to find common ing people succeed.”

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

Small business owners need to plan ahead to ensure smooth leadership transition By NICK MANES | MiBiz nmanes@mibiz.com

or small family-owned businesses, getting the right succession plan in place can be a long, drawn-out undertaking. Just ask Marcia Elgersma. She and her husband, Al Elgersma, realized more than a decade ago that they needed to figure out a succession plan for Al’s Excavating Inc., the nearly fourdecade-old small business they co-own in Hamilton, Mich., about 10 miles southeast of Holland. At the time, they wanted to outline the roles their children would take on in the excavating company going forward. But that was in the year 2000 and despite their best intentions, the planning process ultimately ended unsuccessfully. “It just didn’t work at all,” said Elgersma, the company’s secretary and treasurer. “We didn’t understand the processes and we didn’t know how to determine who was Percentage of West capable of leading.” Michigan familyIn the meanowned businessses time, the Elgersmas with no succession plan, according to found it was easier the Family Owned to grow their comBusiness Institute. pany to $6 million in annual sales than it was to figure out the transition plan, she said. After their failed try at succession planning, the business went back to its old model and the owners “just hunkered in.” It wasn’t until more than a decade later and based on a referral from a friend that the owners of Al’s Excavating met with

81%

Marcia and Al Elgersma, the owners of Hamilton-based Al’s Excavating, were typical of many small family-owned business owners in that they lacked a formal succession plan to transition to the next generation of leadership. After a failed attempt to develop a plan, the company tapped a team of local advisers to develop a leadership strategy and succession plan that it plans to launch Dec. 1. PHOTO: KATY BATDORFF business consultants and did a deep dive into the makeup of the family and analyzed which members were qualified to hold the various leadership positions. Such delays in putting together a formal plan of succession are not uncommon among small and middle-market companies, experts say. In West Michigan, 81 percent of family-owned businesses lack a formal succession plan, according to the results of a study conducted by the Family Owned Business Institute (FOBI), a joint project of the Grand Valley State University Seidman College of Business and Western Michigan University’s Haworth College of Business. Simply having a succession plan in place is not really enough for most companies, sources said. Rather, families and other shareholders in the business should do a thorough analysis of the company itself and the different people who could take on leadership roles, said Kirk Koeman,

a partner at DWH LLC, a Grand Rapidsbased business consulting firm. Koeman was one of a handful of people to advise the Elgersmas as they put their plan together. “In the case of Al’s Excavating, it took two years to make changes in the company,” Koeman told MiBiz. “Typically, there is a mindset that the owners’ sons will just take over. In many middle-market companies, that’s not always feasible, and you don’t really know that until someone from the outside talks with people in the company. … These people can still be owners, but they don’t have to be managers.” During the two-year analysis of Al’s Excavating — during which time DWH served as general manager of the company so it could continue operating during a busy construction period — the research showed that members of the Elgersma family from both the second and third Continued on next page

HELMINSKI PILOTS AUXO TO GROW COMPANIES WHILE MAINTAINING WHAT’S ‘SACRED’ By JESSICA YOUNG | MiBiz jyoung@mibiz.com

eff Helminski, co-founder and managing partner of Auxo Investment Partners in Grand Rapids, successfully leveraged his atypical experience and path into the world of private equity in multiple deals last year. Helminski has a diverse professional background, including experience in manufacturing engineering, high-volume assembly operations management and real estate development. His firm, Auxo, now specializes in investing in and growing founder- and family-owned industrial, manufacturing and business services companies. While he has managed dozens of transactions involving hundreds of millions of dollars during his career, Helminski believes last year’s transactions stand out as significant in establishing Auxo’s partnership-based model and the firm’s closely-aligned relationship between investors and fund managers. With a fully subscribed fund, Helminski had the ability to invest in 10 to 15 companies in the first few years after building Auxo from scratch. Last year, Auxo

WINNER/INVESTOR: JEFF HELMINSKI

Co-Founder and Managing Partner, Auxo Investment Partners

269.345.4546

For more info, call MiBiz today: 616-608-6170

Brief business description: Private equity firm that specializes in investing in and growing founder- and family-owned industrial, manufacturing and business services companies Personal information: Wife, Tammy Helminski, who’s a partner at Barnes & Thornburg LLP; two sons, Ryan, 7, and Dominic, 9 Academic degrees: MBA from the Stanford Graduate School of Business, master’s in Engineering from Purdue University, bachelor’s in mechanical engineering from Michigan Technological University Community involvement: Board membership in Spectrum Health Hospital Group, Broadway Grand Rapids, St. Thomas Educational Support Services

evaluated hundreds of opportunities and closed on several transactions, including deals for Prestige Stamping Inc. and Andrie LLC. “Both companies had a strong focus on people and culture with honest, hardworking, down-to-earth people throughout the organization from the shop floor to the C-suite,” said Helminski, the winner of the investor category in the 2019 MiBiz Dealmakers of the Year Awards. “The sellers of the businesses, both families, cared deeply about the legacy of the company, the employees and making sure they found a successor that was going to provide them with not only sustainable employment, but hopefully, greater opportunities going forward.” The businesses found a perfect fit in values and approaches with Auxo, according to Helminski. The October 2018 deal for Prestige Stamping was Auxo’s fifth acquisition in 13 months. The Michigan-based niche manufacturer of custom-engineered stampings for the fastener industry selected Auxo as the buyer even though the company was not the highest bidder, according to Helminski. The reason: The seller was concerned about the future of the company’s employees and younger generations of the founding family that remained in the business, which aligned better with Auxo’s values and longer-term investment approach. In February, Auxo acquired Andrie, a bulk marine transporter of specialty products including cement, liquid asphalt, light oil petroleum products, and calcium chloride throughout the Great Lakes. Andrie operates a fleet of 19 tugs and barges out of Muskegon, Helminski’s hometown. The company, a mature industrial business and “market leader in the niche that they serve within their sector,” checked important boxes for Helminski. The acquisition also followed the firm’s December 2017 deal to buy Metairie, La.based M/G Transport Services, an operator of inland barges. The two firms now operate as Auxo Marine, a newly formed platform company. When Helminski launched Auxo with partners Jack Kolodny and Fred Tedori, the team made “a very conscious decision” to be based in Grand Rapids. “Part of that was because the values of West Michigan align with our values, but also, to put us this close to a large number of the kinds of businesses that we’re interested in connecting with throughout the Great Lakes region,” Helminski said.

OCTOBER 14, 2019 VOL. 31 • NO. 26

Continued

Jeff Helminski, co-founder and managing partner, Auxo Investment Partners. MIBIZ PHOTO: KATY BATDORFF

Being based in the same community as many family- or founder-owned businesses is important when the firm is communicating with a potential target, he added. “My background is not the prototypical path to being in the private equity investing world,” Helminski said. “When I’m having a conversation with a family that is thinking about this transition that is often partly emotional and partly financial, I can talk to the family and say ‘here’s my story, here’s my background, this is the way I grew up in West Michigan.’ It makes a difference.” Even so, specializing in the acquisition of family-owned businesses also comes with its own set of unique challenges and opportunities. “What’s interesting is when (the businesses) have been so successful and there’s a big enough end market that they could try and grow into that they often just haven’t done yet,” he said. “In knowing that they need to do certain things differently or

professionalize certain aspects of the business that haven’t yet been professionalized, or haven’t been developed into a more scalable function within the company, that’s going to take change.” Stabilizing long-standing, familyowned business cultures while at the same time growing profits is “one of the most difficult things” Auxo does. “It’s a delicate balancing act between these two seemingly competing interests of stability and maintaining that which is great, with changing enough to accomplish the growth at a higher rate than what they’ve historically done,” Helminski said. Pre-transaction, the firm researches not only a potential target’s financial viability but also its culture and talent. “We have a roadmap to be able to see what things are sacred and we want to really protect within the business, and what things can be done better if the company is going to grow and scale up beyond the point that they’ve achieved today,” he said.

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reporter’s NOTEBOOK Mark Sanchez writes about finance, health biz and life sciences. 616-608-6170 • msanchez@mibiz.com

A new era: Spectrum Health, Blue Cross finally sign a deal for Medicare plan

new deal between Blue Cross Blue Shield of Michigan and Spectrum Health finally brings West Michigan’s largest health system into the care network of a plan for seniors at the state’s largest health insurer. Starting July 1, the value-based contract for Spectrum Health with Blue Cross Blue Shield’s Medicare Advantage PPO has importance for both sides as the population steadily ages and Medicare becomes a larger part of the payer mix for providers. The deal may represent a new era of collaboration between Spectrum and Blue Cross Blue Shield. In the early 2000s the two organizations engaged in a highly public battle over reimbursement rates that nearly led to Spectrum Health dropping out of Blue Cross Blue Shield’s care network. The contract also brings Spectrum Health into Blue Cross Blue Shield’s Medicare Advantage PPO care network after a lengthy absence. People enrolled in the Blues’ Medicare Advantage PPO can access care at Spectrum Health without incurring out-of-network costs. Until now, the two were unable to come to terms, leaving Spectrum Health as the only health system in the state that lacked a contract for Blue Cross Blue Shield’s Medicare Advantage PPO. “We now have all of the hospitals in Michigan under contract for the Medicare Advantage PPO, which is huge because that provides choice for the seniors,” said Jeff Connolly, Blue Cross Blue Shield’s senior vice president overseeing West Michigan and the Upper Peninsula. The appointment of Tina Freese Decker as Spectrum Health’s CEO in 2018, plus public pressure to finally cut a deal, set the stage for the change. Connolly said Blue Cross Blue Shield more than two years ago embarked on an effort to finally work out a deal with Spectrum Health on the Medicare Advantage PPO. “That has evolved into an understanding that health care is extremely expensive. We’re in this together, so as opposed to having opposing views, we come together and work together because we have a vested interest on behalf of the employers and members and patients,” Connolly said. “We’ve heard loud and clear for many years from the community — business leaders, community leaders, religious leaders — that Blue Cross and Spectrum need to have a collaborative relationship for the betterment of the communities at large. It makes sense.” Spectrum Health is already a network care provider for Blue Cross Blue Shield’s commercial health plans and HMO subsidiary Blue Care Network’s Medicare Advantage plan. Under the latest contract, Spectrum’s 14 hospitals across the region and physician offices will accept the Medicare Advantage PPO. Through the contract, Blue Cross Blue Shield and Spectrum Health agree to work together to improve quality and contain the cost of care. That type of arrangement for years has steadily gained traction in health care as the industry transitions to an economic model that compensates care providers based on quality, outcomes and costs, rather than the traditional fee-for-service models where hospitals are paid per procedure. Some 80 percent of the hospital claims Blue Cross Blue Shield pays annually now occur under value-based contracts. In an industry where there has always been natural tension between health systems and doctors that provide the care and insurance companies that pay the bills, the Medicare Advantage PPO contract could build momentum for a closer working relationship with Spectrum Health. “This is not just one deal. It’s our expectation with our conversations that this will continue to evolve around a value-based relationship, which is what we’ve been aspiring to for the better part of a decade, and they’ve given us very positive feedback that directionally that makes sense,” Connolly said. “We have a complete agreement between our organizations to sit at the table together to collectively discuss and make decisions about what’s best for the community, as opposed to just what’s best independently for our organizations.” The new arrangement between the two companies not only follows the new economic reality for health care, but also demographic trends. The population is aging, and thousands of Americans are turning 65 every day and enrolling in Medicare. In a four-county region of West Michigan (Kent, Ottawa, Allegan and Muskegon), the percentage of the population 65 or older was about 16 percent as of 2019. That’s an increase of about five percentage points from the start of the decade, according to the latest edition of the HealthCheck report that Grand Valley State University’s Seidman College of Business publishes annually. The demographic shift and aging population has care providers and insurers adjusting accordingly. As more Baby Boomers turn 65 each day, Blue Cross Blue Shield’s Medicare offerings will continue to evolve “to better support the provider environment,” Connolly said. “Medicare Advantage will continue to be, and has been, increasingly a bigger part of the health care economic picture,” he said. “Given our size and our breadth in the Medicare Advantage space, there is a reason we need to come together at a minimum to provide choice for those seniors in the Medicare space.”

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INDUSTRY 4.0: AUTOMATION JULY 5, 2021 We’ll examine how companies across a variety of industries — manufacturing, farming, food processing, real estate — are automating an increasing amount of tasks. Plus, we’ll measure executive sentiment in our manufacturing sector survey about their plans for automation technologies in 2021-22. Don’t wait to be in this issue! Contact us by Wednesday, June 23 to advertise.

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MiBiz / MAY 24, 2021

HEALTH BIZ

HealthBar eyes growth via convenient drive-thru clinics, workplace care By MARK SANCHEZ | MiBiz msanchez@mibiz.com

new lakeshore location where people can drive up and get a COVID-19 test or basic medical care while sitting in their vehicle marks the second of what Nathan Baar hopes will become many drive-thru medical clinics across Michigan. Baar envisions HealthBar LLC, the company he founded a year ago, growing steadily from its pair of locations in Grand Rapids and Holland, where the company this month opened a clinic to treat minor ailments and offer tests at a former bank office on James Street near U.S. 31. Baar In addition to the medical clinics, HealthBar plans to begin enlisting employers for on-site workplace care and wellness. Baar describes his company as “developing a clinical network for health care service delivery that is outside of the traditional structure,” which comes with high costs and is geared toward treating illnesses. Instead, HealthBar will focus on health promotion, wellness and education, while offering people easy access to care “that really meets their needs where they are,” Baar said. “What we’re trying to rally and push is a meaningful movement that is truly trying to change the trajectory of health care. We’re really trying to join that push to say the system is broken and we need to fix it,” said Baar, HealthBar’s CEO and founder who previously worked as director of emergency and urgent care services at Metro Health - University of Michigan Health. HealthBar, which also offers a telehealth platform, started in 2020 by piloting a drive-thru model for offering COVID-19 tests during the pandemic. The company now looks to expand to a larger “urgent care style of care” at drive-thru clinics that offer convenient access, such as when parents get up

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on a Saturday morning and a young child requires attention for an earache or some other minor ailment. They could do a telehealth visit through HealthBar, which could also dispatch a clinician to their home, or visit a drive-thru clinic. HealthBar does not seek to compete with or replace primary care physician offices or health systems, said Baar, a registered nurse. “We’re trying to fill a void in the health care delivery model that nobody’s really doing a great job at right now,” said Baar, who sees the potential to partner with primary care practices and health systems in the future. Staffed primarily by nurse practitioners, the drive-thru locations are intended for treating minor ailments or getting a COVID-19 test or a routine blood draw to check a person’s cholesterol or A1C, for example. The sites are open to employees and their families at participating companies, as well as the general public. Baar formed HealthBar early in the COVID-19 pandemic, a public health crisis that has driven the exponential growth of telehealth, given rise to the use of drive-thru testing and vaccination sites and “blew up the traditional delivery model and people’s pre-conceived notion of things.” “The pandemic has accelerated this new model or new concept of health care delivery. People previously never really thought about driving through for testing or medical service. Telehealth was coming, but not quite there,” Baar said. “There are a lot of these alternative means of health care delivery that the pandemic has significantly accelerated. It just opened people’s minds to break free from the norm.” During the pandemic, many hospitals successfully deployed drive-thru locations to test people for COVID-19 and later to offer vaccinations. Last July, Fast Company detailed how a Seattle, Wash.-based architecture firm designed a conceptual drive-thru medical clinic for physicians to treat people in their vehicles, and that hospitals could easily deploy in a parking garage or parking lot. With HealthBar, Baar seeks to elevate the drivethru model. He hopes the concept catches on to

The Holland location of HealthBar’s drive-thru COVID-19 testing site also offers basic medical care, helping to fill a gap in the marketplace, company officials say. COURTESY PHOTO the point that he can open several more locations in West Michigan and the east side of the state, both with drive-thru locations and on-site clinics at employers. “We want to be a big player, not just in Michigan, but across the region and across the nation. That’s what we’re trying to push for,” he said. “We want to create these centers and push them in different markets and have these different networks of health care.” In looking to connect with employers for on-site medical clinics, HealthBar also plays into a growing trend, especially among companies that self-fund their health coverage, to offer employees basic and primary care in the workplace. In many cases, it’s a service that builds on corporate wellness programs. “We’re taking these components and concepts of everything and putting them together in a way that’s creating a new ecosystem of health care,” said Baar, emphasizing the wellness role that HealthBar seeks to drive via onsite employer clinics.

A concierge service, known as the Healthcare Partnership Program, will provide medical support and manage high-cost chronic illnesses among employees at participating employers. Companies can customize the level of service they want to offer, and HealthBar charges employers a per-month, peremployee fee to run the onsite clinic. “Our largest focus is to say, ‘We want to make people healthier. We want to reduce dependency on medication. We want to make people happier through good health and change their life by helping them understand how to be healthy, how to maintain health, and how to navigate health care appropriately,’ and empowering that person to make informed decisions, instead of being a victim of poor health,” he said. HealthBar employs a workforce of 15 people and contracts for about 300 clinicians to handle testing at the drive-thru locations. The company now works with more than 50 businesses, mostly for pandemicrelated services.

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DIGITAL BUSINESS BANKING CONVENIENCES FOR BUSY PROFESSIONALS Online services help streamline your workflow

you can easily view recent activity and deposit history.

t’s no secret that the rise of mobile connectivity, digital communication channels and the app economy is changing almost every aspect of modern life. The financial services sector is no different. The impact of technology has banks evaluating mobile and online banking in pursuit of innovative online business services to add convenience and flexibility to customers. A strong relationship with your business banker can help you navigate the ever-evolving consumer landscape, and its digital needs. A good business banker will offer solutions that help you in the most economical way perhaps eliminating trips to the bank, saving you time and money. Here are a few digital conveniences that could streamline your business’ banking experience:

Merchant Processing Accept all customer payments – including credit, debit, eMV/chip cards, and mobile wallets, such as Apple Pay® – with an all-in-one payment processing system. Your banking partner can offer you a way to power payments and simplify operations to help you grow your business on-site, online and even on the go.

With Reverse Positive Pay, you will be able to review all incoming and paid checks for potential fraud. These features allow you to control your checking transactions by rejecting anything that’s unauthorized or counterfeit.

Remote Deposit Capture

Positive Pay This web-based tool in online banking is specially designed to help combat check fraud and forgery. With Positive Pay, you’ll get alerted when suspicious or unexpected activity occurs.

Using a desktop device that connects to your computer, you can easily scan receivables and submit checks electronically – all from the convenience of your office. By

scanning an image of checks instead of moving physical documents around, you get faster deposits and fewer errors. If you are looking for even more expediency, mRDC (mobile Remote Deposit Capture) is the mobile app version that allows you to remotely deposit checks anywhere without the need for a desktop scanner. When you login to the app, you can use your smartphone camera to take photos of checks and quickly deposit them in batches. From the home screen,

As we all start to reimagine workplace operations and look closer at what can be accomplished in a remote environment, be sure to lean on your business banker to help you take a proactive approach to finding sound financial solutions during transformative times. Horizon’s Business Advisors are available to answer any questions about these digital banking conveniences. For more information, please contact us at 888-873-2640.

www.horizonbank.com

Someone You Know has earned this They haven’t slowed down since turning 60. They inspire others with their enthusiasm, energy and compassion. They are dedicated to improving our community or raising up those around them.

Wouldn’t it be great to recognize them now for all the good they do?

AWARDS

Gala

Each year, 16 inspiring individuals 60 years of age or older are honored at this premier event for their ongoing efforts throughout our community. Don’t miss this opportunity to give back to that one person who is always so giving of themself!

To submit a nomination, scan the QR code or visit SeniorNeighbors.org/nominate

NOMINATIONS ARE DUE JUNE 1 • Learn more or view past honorees at SeniorNeighbors.org/16over60

Raul Ysasi - 2020

Faye Richardson-Green - 2019

Ronald Hofman - 2020

Marian Barrera-Young - 2018

Each year, sixteen Honorees receive this premier award for their inspiring engangement in our community.

Visit www.mibiz.com

recognizes inspiring individuals 60 years of age or older for their engagement in our community.

Kate Dernocoeur - 2018 MiBiz / MAY 24, 2021

FOCUS: FOOD SYSTEMS

Food producers adapt after pandemic alters business models By JAYSON BUSSA | MiBiz jbussa@mibiz.com

s a producer that heavily supplies the food service industry, Swanson Pickle Co. Inc. had to make profound adjustments to its sales channels when the COVID-19 pandemic changed buying habits. “We did, right off the bat, see a very negative impact on sales,” said Katie Hensley, chief financial officer of Swanson Pickle, which grows and processes wholesale pickles in Ravenna in southeastern Muskegon County. “Then, over time, we have adapted.” Food producers like Swanson Pickle not only had to make a similar adaptation, but they also had to do it with little notice. Last spring, the pandemic suddenly shut down restaurants in Michigan and throughout the country. Demand from institutional food buyers like schools, corporate offices, sports stadiums and entertainment facilities plummeted. While those wells ran dry for food suppliers, retail environments saw demand for food increase as people cooked at home more frequently. Swanson Pickle’s business model was weighted in the food service category, leading to significant changes in the company’s approach to sales. Swanson Pickle expanded its retail distribution, which meant shipping pickles as far as North

MAY 24, 2021 / MiBiz

Carolina — territory where the business had never ventured. It also posed challenges as pickles are a freight-heavy product that loses financial viability the further they are shipped. “If you had your sales in grocery stores, you’d generally be impacted quite positively,” Hensley said. “We’re really serving a national pickle market, and we’re seeing a national drag on restaurant sales. And, if you think about all the stadiums — concerts and ball games — all the relish consumed in those environments, it’s substantial. Those still have a ways to go (before returning in full capacity).” “We’re really happy that the retail markets were doing well because it did allow us to shift, but I don’t think we can maintain that,” Hensley added. “If there is a silver lining, it is that we have a couple new relationships out of this.” Swanson Pickle purchases cucumbers from 10 to 15 different Michigan-based growers in addition to growing its own. Because of the slowdown in its traditional orders, the company enters the 2021 growing season with higher-than-normal inventory and plans to produce fewer pickles than in 2019 but more than last year’s COVID-disrupted season.

Soaring prices The sudden shift in the supply chain — even though it’s only expected to be temporary — was a key issue that the food industry had to contend with in 2020.

Swanson Pickle Co. Inc. in Ravenna had to adjust its approach to sales as COVID-19 reduced demand from institutional food buyers but increased demand in retail environments. COURTESY PHOTOS However, the industry made this transition fairly seamlessly despite a period of panic when grocery stores ran low on various items, according to Trey Malone, a Michigan State University professor of agriculture, food and resource economics. This nimbleness was especially true for the larger, vertically integrated, direct-to-consumer producers that had the power to make that pivot. However, some producers had less room to shift their business models. “For specialty crops, it can take 10 years sometimes to grow a tree for certain crops,” Malone said. “There is nothing you’re able to do if you have a chestnut farm. You have your trees — that’s just what you have.” Despite the fairly smooth transition in adjusting to the industry’s new normal of food distribution, prices for almost all types of food have been on the rise. Restaurant owners have reported that they are facing surging prices on almost every item incorporated in their menus. The consumer price index for April crept up 4.2 percent, and saw food prices inflated by 2.4 percent. In the 13 weeks leading up to April 24, seafood prices jumped by 18.7 percent followed by other essentials like fruit (7.5 percent), processed meat (7 percent) and bread (4.3 percent). The increase in prices stems from a variety of issues, starting with the fact that staple crops like wheat, soybeans and corn are trading at some of the highest prices the country has seen in the last decade. Weather conditions in South America have tempered that region’s expectations for crop yield this year, which has been a factor in driving up prices. “Corn and soybeans we feed to animals, so there goes your livestock feed prices — they’re up now and that livestock feed price is put forward into the system. All the while we’ve seen a pretty big increase in demand year-over-year,” Malone said. Malone said many farmers are now rushing to capitalize on the high prices and get as many crops into the ground, expecting increased acreage in wheat, corn and soybeans at the end of the season. “Right now, we’re seeing this unbelievable increase in price and that’s doing exactly what price increases do, and that’s attracting more supply,” Malone said.

A labor problem In addition to soaring prices on baseline crops, a labor crisis similar to numerous other industries continues to hang over the food production and processing spaces. This lack of labor, or more expensive labor, has been a challenge. Marty Gerencer, executive director of the West Michigan Food Processing Association, said she has even spoken with a local company that has turned down sales simply because they can’t facilitate the orders. “The ones I have talked to — they’re in the fruit and vegetable and beef industry — labor is a key issue and followed by housing to support the labor,” she said. “It’s really a system approach to providing the rural communities with resources they need to prosper and grow.” Hazekamp’s Premier Foods has wrestled with this very issue. The Muskegon-based meat processing and distribution facility features an extensive line of consumer-ready products. The company has weathered the pandemic effectively as the surge in retail orders offset the sales loss to food service channels. Still, President Dave Hazekamp has had to juggle a variety of disruptions with labor at the top of that list. Price increases for some products, including chicken wings, “are just a direct result of labor shortages at the plants. They are not able to be fully staffed to produce these products,” Hazekamp said. “Some plants, like ours, have temporarily halted labor intensive production lines and products to run the more mainstream-type products that are in high demand.” To quell its labor troubles, Premier Foods invested more money in technology, equipment, robotics and production line overhauls than ever before. Hazekamp expects the company to see a full return on that investment in less than three years. Meanwhile, Premier Foods continues to work with a staff that is short 35 employees. “We believe this will help us stay competitive on many fronts in the long term,” Hazekamp said. “But I don’t feel we would have invested so much money if not for the labor challenges we faced in 2020 that are continuing into 2021 and the foreseeable future.” Visit www.mibiz.com

LABOR SHORTAGE

Continued from page 1

“The primary problem for restaurants — and I would say any small business — is the stimulus that our government has put forth that incentivizes them not to go to work. How can small businesses compete with our government that simply prints money?” — JEFF LOBDELL CEO of Restaurant Partners Inc.

It’s no wonder that Tyson and her fellow restaurateurs are reaching for a stiff drink, as establishments of all shapes and sizes, from fast-food chain restaurants to locally-owned establishments, grapple with trying to operate amid a dearth of willing talent. The Candied Yam considers 15 employees to be a full staff, but right now, Tyson’s team is just five employees. That includes Tyson regularly involving herself in day-to-day operations. Many pundits and industry watchers point to the extended benefits available to the 700,000 unemployed workers in Michigan as keeping prospects on the sidelines rather than taking available jobs, whether in the foodservice sector or other industries. Unemployed people in Michigan currently receive an additional $300 per week as part of the federal American Rescue Plan, a measure that some states are starting to roll back as the country lifts out of the pandemic. However, the restaurant industry’s labor issues have seemingly deeper roots, according to industry sources. When restaurants faced shutdowns statewide early in the pandemic, many establishments shed large portions of their workforce. Some of those displaced workers have been apprehensive about returning for health reasons or have encountered conflicts tied to available childcare.

Searching for a solution Against a chorus of people advocating the solution is to pay workers more, Tyson argues the answer is not that simple, especially as restaurants simultaneously deal with soaring food costs. According to the most recent data from the National Restaurant Association, wholesale food prices increased for four consecutive months as of April, with “significant” month-to-month gains in beef (14.5 percent), pork (9.6 percent), fresh fruits and melons (9.3 percent), processed poultry (5.4 percent), and dairy products (3.2 percent). As a result of the ongoing trends, average wholesale food prices increased 6.9 percent year-over-year as of April, according to the trade group. The increased prices coupled with the labor shortage are forcing some restaurant owners to make difficult decisions. Visit www.mibiz.com

From left: The Candied Yam employee Rita Simon prepares muffins while while Sonya Vander prepares a meal. PHOTOS BY JEFF HAGE “My food costs, they’re not sustainable,” Tyson said. “Some days, I’m choosing between more chicken wings and more pay for my people. It’s a hard call, but someone has to make it. I feel like everything is spiraling and spinning in different ways. … You just want to make sure you can balance it out each day whatever comes your way.” The Candied Yam pays between $11 and $15 an hour and spreads tips around its workforce. At one point, the restaurant offered a $250 signing bonus in an attempt to lure prospects, but received no engagement from the effort. The ongoing staffing shortage has forced Tyson to invest a few thousand dollars to reimagine her restaurant’s service model. “For us, people come in, place their order and the ticket goes back and we make your order fresh,” Tyson said. “We’re looking at two-hour waits because we don’t have a staff. God bless our customers that do wait that long, but the majority of the customers are looking at you like ‘You better get your life.’ I have to remind them we’re making this stuff from scratch.” Tyson plans to prepare batches and offer cafeteria-style service so that customers can see which food is available on a given day.

New businesses struggle to staff As the CEO of Short’s Brewing Co. and the new owner of a recently reopened pizzeria and ice cream shop, Scott Newman-Bale has a perspective that runs the gamut of the restaurant industry. While Bellaire-based Short’s Brewing is equipped with a staff of around 150 people, Jac’s Parlor has attracted about 20 employees in the couple of weeks since it reopened and could use 10 more workers, said Newman-Bale, who recently purchased the 60-seat restaurant located down the road from Short’s main production facility in Elk Rapids. Newman-Bale has been able to hire teenagers to scoop ice cream at Jac’s, but has encountered a tougher time staffing the kitchen.

“In the kitchen, it’s different — we’re struggling like everyone else,” he said. “I think it’s a little hard being a new business. … It’s a battle for every person.” The staffing success for Short’s can be attributed in part to an attractive benefits package that includes a 401(k), sick and vacation time and education bonuses. In an area heavily reliant on tourism where seasonal work dominates, Short’s also stands out because it provides year-round employment. Still, the company has been challenged to compete against the enhanced unemployment benefits, according to Newman-Bale, who said that a number of past employees have cited the additional funds as the reason they are not yet returning to work. “Comments like that are very frequent, and that’s blatant comments and (doesn’t account for people) who are thinking it. It’s definitely clear that it’s having an impact. … I think it’s part of the problem, but it’s also a restaurant problem. Not for Short’s, but I think the industry is seen as an up-and-down industry. These are tough positions, especially in the back of the house.”

Benefits to blame? On May 30, Michigan will reinstate a measure that forces unemployed workers to prove that they are searching for a job, a move that critics of the extended benefits have applauded. However, some national studies have been unable to establish a link between the increased unemployment benefits and the population’s refusal to work. In a report titled “Employment Effects of Unemployment Insurance Generosity During the Pandemic,” researchers on behalf of Yale University compared employ ment t rends between states with and without generous unemployment benefits. The study showed that states with more robust benefits did not see a sharper increase in unemployment and its workforce returned to jobs at the same rate when it was deemed safe.

“I can either look at this like a lemon or lemonade. I’m choosing lemonade, but I have some tequila in mine just to get me through.” — JESSICA ANN TYSON Owner of The Candied Yam LLC

Even so, Jeff Lobdell, owner of Grand Rapids-based Restaurant Partners Inc., said that unemployment benefits coupled with various rounds of stimulus money are the source of the industry’s labor woes. “The primary problem for restaurants — and I would say any small business — is the stimulus that our government has put forth that incentivizes them not to go to work,” said Lobdell, whose portfolio includes 20 restaurants. “How can small businesses compete with our government that simply prints money?” Lobdell has increased wages by 20 percent to 25 percent, but the effort generated little movement. His company also offers pandemic pay for line cooks ($1 per hour extra), guarantees managers 50 percent of their annual bonus and provides free meals for workers. According to Lobdell, potential restaurant workers are simply making a logical decision given the conditions. “I’m not blaming the workforce as being disingenuous or lazy. They’re simply making a logical choice to continue to get the stimulus as opposed to going back to work,” he said. “I don’t think you can fault them for that.” MiBiz / MAY 24, 2021

FOCUS: FOOD SYSTEMS

Farmers markets prove crucial for vendors, startups during the pandemic By JAYSON BUSSA | MiBiz jbussa@mibiz.com

espite a season last year filled with widespread shutdowns and canceled events, farmers markets across Michigan not only survived the pandemic, but in some cases thrived. “Last year was my first year at the market and I was surprised at how many customers came through — we were enforcing mandatory masks,” said Randal Stewart, manager for farmers markets in both Grand Haven and Spring Lake. “I think we were determined to be an essential part of the community,” she continued. “I think it was an outlet for people to be able to get out. I talked to all the vendors and they all said their sales had increased.” In 2021, community farmers markets across West Michigan look to build on the momentum they created last year and remain as a sought-after resource in the post-pandemic era, even while vaccines continue to roll out and shoppers consider indoor grocery stores to be a safe and viable option once again.

Essential sales channel Last year, Stewart gained a more profound understanding and connection with the vendors at her farmers markets. She made a day trip to each one of the farms to see their operations for herself. During her time connecting with farmers and other vendors, she learned how important that markets were for local food producers and small food startups. She also found that these farmers and vendors treated markets as a crucial avenue for selling their products and connecting with local communities. “At the end of the market, I kind of walk up to each vendor and ask, ‘How did you do today?’” Stewart said. “If you talk to any of the farmers, they all depend on the income that comes from a farmers market.”

MAY 24, 2021 / MiBiz

“I think we were determined to be an essential part of the community. I think it was an outlet for people to be able to get out.” — RANDAL STEWART Market Manager, Grand Haven and Spring Lake farmers markets

Zenobia Taylor-Weiss, founder and owner of Grand Rapids-based Cellar Door Preserves, is one of the many food startups that utilize local markets to bring her product to the community. Taylor-Weiss’ four-year-old company that makes artisan preserves generates more than half of its revenue through wholesale distribution to mostly specialty shops and boutiques. However, she estimated that around a quarter of her sales were generated at both farmers markets and arts and crafts fairs. The arts and crafts events were all called off last year because of COVID-19 while farmers markets were able to proceed based on their status as an essential food provider. During 2020, Cellar Door Preserves established a presence at both the Fulton Street Farmers Market in Grand Rapids and the farmers market in Rockford. Taylor-Weiss said that sales she generated there helped to offset the business lost from the arts and crafts fairs. “Farmers markets were way better last year and our sales increased there. My guess is because people felt safer shopping there and it was an activity for people to do,” Taylor-Weiss said. As an extremely accessible sales avenue — the most that Taylor-Weiss has ever paid in booth fees

The Metro Health – University of Michigan Health farmers market in Wyoming. COURTESY PHOTO

was $30 per week — the increased sales has prompted Cellar Door Preserves to expand its presence at local markets. This season, Cellar Door will also set up at markets in both Kentwood and Kalamazoo. The pandemic also helped Taylor-Weiss to fine tune her sales technique. “Pre-COVID, I allowed people to sample everything,” she said. “I was terrified. I sell $12 jam and I didn’t expect people to buy $12 jam without tasting it. I was fully expecting the markets to be terrible and I was very pleasantly surprised. Not only did people buy my jam, but my sales increased.” Cellar Door Preserves established its own kitchen space in 2019 and now features two full-time and six part-time employees. Taylor-Weiss said weathering the pandemic with the aid of the farmers markets helped to confirm the viability of her business.

“I feel like my business is stronger for having made it through,” she said.

New customers Hailey Lamb, communications manager for the Michigan Farmers Market Association, said while outcomes vary on a case-by-case basis, her organization found that many markets around the state had higher-than-expected traffic and sales in 2020. Expanded food assistance benefits issued to hundreds of thousands of Michigan residents played a role in driving new customers and more money to the farmers markets, she said. Currently more than 1.3 million Michigan residents receive food assistance and 700,000 have seen an increase in t heir mont hly Supplemental Nutrition Assistance Program (SNAP) benefits. In response, Lamb said that some Michigan markets shifted course to accept food assistance payments. “Once that infrastructure is in place, they’ll keep it,” Lamb said. “That continues to attract new and existing customers.” The Metro Health – University of Michigan Health farmers market in Wyoming was able to capitalize on the additional food assistance funds and the public’s renewed interest in purchasing local food. Michelle Rademacher, head of community outreach for Metro Health, said the market was able to complete a full season in 2020, but the number of vendors — typically 50 to 54 — was cut in half to facilitate proper social distancing. The market kicked off its new season on May 13 and is expecting 36 vendors this year. Rademacher said traffic to the market ebbed and flowed in 2020, but was overall on par with a typical year. “With more people working from home, and possibly working from home for the continuation of the year, we may see the increase in attendance continue throughout 2021,” she said. Visit www.mibiz.com

COMPLIANCE AND CYBERSECURITY FOR BUSINESSES

or businesses to thrive in 2021 and beyond, they must adapt their business to a new, connected reality – but what many businesses don’t understand are the risks inherent in this new always on, always ready business environment of 2021. Cybersecurity (Cyber) is a term that is heard so often it can be difficult to discern what it really means and why your company should care about it. Breach here, breach there – it all becomes noise at some point. Compliance is a much simpler concept to understand, as it involves requirements dictated from authorities that you must adhere to or face potential fines or other penalties. But did you know some industries have cybersecurity compliance requirements? So what is cybersecurity and how does it relate to my business? A strong cybersecurity program protects your business-critical documents, email systems, computers, cloud platforms, etc. from unauthorized access, theft or damage. An effective cybersecurity program not only protects your business, but it can protect the security and privacy of your customer’s information as well. Unfortunately, a mistake in protecting your customer or patient’s information can result in a data breach and shutter the confidence of your customers, while creating enormous reputational risk for your company.

HIPAA, or referenced in contracts as required security practices from frameworks such as NIST 800-171 or CMMC. But these requirements can often be vague and lack specific guidance on implementation.

The Small Business Challenge According to the 2020 Verizon Data Breach Investigations Report, credential theft, errors and social attacks are the three most common causes of breaches, and 28% of breaches involved small business victims. That should convince any business owner that cybersecurity is not something to take lightly. Most small businesses can significantly reduce their cyber risk by focusing on eight core practices. 1. Use Secure Devices (computers, tablets and smartphones) 2. Secure Your Connection (Use secure networks and use secure remote access methods) 3. Secure Your Email (Use the security features of Office

Where Does My Company Stand Regarding Cybersecurity? Small businesses tend to be at a disadvantage when it comes to cybersecurity. They typically lack a seasoned security leader, lack funding, and lack proper tools. Though many small businesses leverage IT service providers for support, those providers often lack the cybersecurity expertise to be able to accurately assess the organization’s cybersecurity risk, develop a comprehensive program, or monitor a security program over time. Fortunately, some experienced cybersecurity leaders have decided to depart their corporate jobs for a more meaningful and impactful cause, offering their expertise part-time to smaller businesses in need. One such group of experts are available at Data Protection Partners. Data Protection Partners can help guide you and reduce your compliance, security and privacy anxiety by performing the following functions on your behalf: • Be your ongoing Security and/or Privacy Officer on an

365 and/or G Suite)

affordable, part-time basis

4. Use Strong Authentication (Use 2-factor authentication

• Review, update or create necessary policies and procedures

whenever possible)

Aren’t Compliance and Cybersecurity the same thing?

5. Control Access (Make sure access is only given to those

Compliance and cybersecurity are not the same, but they do overlap. It is possible for a company to be secure, but not compliant and vice-versa. If there is good alignment between the two functions, the result will be a company that is both secure AND compliant. Companies that operate in heavily regulated industries or provide services to the government often see security compliance requirements dictated in laws such as

6. Train Your Workforce (Educate staff on identifying and

• Respond to external inquiries regarding your security or privacy practices

with a legitimate business need)

• Assess your compliance to security and privacy regulations • Guide and manage activities to remediate audit or

reporting potential security concerns)

Rest Easy with Data Protection Partners Navigating the hype and risk around cybersecurity can be confusing and stressful. Designating a security contact is a good start, but effectively managing compliance, privacy and security requires expertise, and having an experienced leader at your fingertips can be invaluable. Leverage the experience of Data Protection Partners and rest easy knowing your company’s compliance, privacy and cybersecurity are in good hands. Contact us today at info@datapropartners.com.

assessment gaps

7. Be Ready for the Worst (Have contingency plans ready

• Educate staff on privacy and security, and how to

and test them)

recognize and report potential concerns

8. Monitor Compliance (Make sure you know and follow

• Coordinate incident training exercises for your teams

your regulatory obligations)

RECONFIGURING YOUR SPACE TO MEET CHANGING BUSINESS NEEDS Why Change? Why Now? Many businesses are experiencing change due to COVID, with new work patterns and more employees working remote. While change in business is not unusual, it seems to be coming more rapidly now and is causing many companies to rethink their physical space and how to best utilize it. As we anticipate the “new normal,” companies have a great opportunity to step back and re-envision their workspaces! You may find you have too little space due to distancing requirements or growth, too much space as more employees work from home, or need to improve productivity, collaboration, and talent acquisition/retention. Now is a good time to ask: • What impact does our physical space have on our employees and business? Is it meeting our needs? • Does our space enable the level of productivity and efficiency we need? • What physical changes will give us a good ROI?

Identifying the Problem and Opportunities SunMed, a local medical device manufacturer, experienced rapid growth as well as significant changes to their workplace due to COVID-19. “Our company has grown considerably within 18

Visit www.mibiz.com

months. This growth brought about significant change to our operations and required that we re-evaluate our space. Originally, we considered building new, but struggled to find the right site. We looked into separating our corporate headquarters from warehousing, but our employees wanted to stay together. Accommodating almost twice the number of people within the same footprint is challenging, but First Companies stepped in with their expertise and partnerships and really showed us what was possible,” shared Suzanne Kaupa, VP, Human Resources, SunMed

Investing in a Solution The reconfigured space features an open concept “main street” design where workspaces are aligned to the “main street” areas, and include booths, huddle rooms, and ‘hotel’ offices to meet a variety of needs and support the company’s open, collaborative culture. “COVID was an oddly perfect time to reconstruct since the office was empty. Throughout the build, we evaluated our short and longterm needs and developed solutions for both. As a result, we’ve gained an efficient workspace that better accommodates our growth. We’ve reduced unnecessary furniture and incorporated open, collaborative workspaces that maximize our space. Using glass as barriers instead of walls, we achieved a more open, cohesive office without compromising the safety or productivity of our employees. Our office is now a space where our employees want to be, and it accurately reflects our company’s

culture to new recruits.” Suzanne Kaupa, VP, Human Resources, SunMed

Taking Advantage of Underutilized Space Platinum Edge Solutions is another example of a company who reconfigured space for the benefit of the business and team. At the turn of the year, they realized their storage room accounted for a sizeable portion of the office and was being underutilized. To help attract and retain valuable employees in a market with labor shortages, they chose to turn their excess storage space into a gym, complete with showers and laundry.

Ideas for maximizing your space: 1. Open Concept: Walls take up more space than you think! Gain back precious square feet by turning private offices into open workstations. 2. ‘Main Street’ Design: Workspaces that branch off a few “main streets” flowing through the building allow for easy access and space efficiency. 3. Phone Booths & Huddle Rooms: Adding small booths and huddle rooms gives individuals places to take calls or collaborate uninterrupted without disturbing their neighbors – a great use of smaller spaces. 4. Hotel Offices: Making shared workspaces available for employees with inconsis-

tent in-office hours reduces underutilized space and is ideal for employees who primarily travel or work from home. 5. Glass Walls: Floor-to-ceiling or partial glass walls help maintain an open feel while still offering privacy. Window treatments are available to increase privacy, including films, frosted applications, and smart-touch technology that lets users select frosted or transparent glass with a single touch. Glass carries natural light throughout a space and takes less room than traditional walls. It’s easy to sanitize and maintain, and provides a modern, high-end finish.

6. Flex Space: Maximize efficiency by creating multi-use spaces, such as equipping large rooms with retractable dividers and moveable furniture. 7. Streamlined Furniture: Furniture, like technology, is continually evolving to provide a more ergonomic, streamlined, and efficient work experience. By updating furniture, you can preserve space and invest in your employees’ health (i.e. sitto-stand desks and properly fitted chairs) while supporting team collaboration and productivity (i.e. pods designed for collaboration, sound barriers to ensure focused, heads-down time, etc.)

MiBiz / MAY 24, 2021

ECONOMIC DEVELOPMENT

GVSU study confirms gaps in entrepreneurial support By MARK SANCHEZ | MiBiz msanchez@mibiz.com

ncreasing diversity within support organizations and improving access to marketing resources are among the top concerns for West Michigan entrepreneurs, according to a recent analysis commissioned by Grand Valley State University’s Innovation Hub in Muskegon. Access to capital also remains an issue particularly for small businesses owned by women and minorities, while “solo entrepreneurs” or sole proprietors could use more attention and support. The study examined how entrepreneurial support organizations in a sevencounty region are viewed by the people they serve. Conducted by Lansing-based Public Sector Consultants Inc., the study largely affirms what’s been known and provides added impetus for improvements, said Kevin Ricco, director of the GVSU Ricco Innovation Hub. “They’re telling us a lot of things that we already know, but it kind of validated it for us,” Ricco said. “At the end of the day, all of our partner organizations, we’re all interested in the same thing. We want to see the entrepreneurs and small businesses become successful.” The GVSU Innovation Hub and other entrepreneurial support organizations know they need greater diversity within, and better outreach to, entrepreneurs in underserved and under-represented areas, Ricco said. “Stakeholders felt that (entrepreneurial support organizations) need to make significant efforts in breaking down barriers to reach these communities and gain trust in order to provide better services and support,” according to a report on the study’s findings. The report indicated that women and minority small business owners who were surveyed “don’t

Entrepreneur needs Participants in a study on entrepreneurial support services in West Michigan identified areas of business support and training where they seek more help. The areas identified were: Marketing and social media

see enough people looking like them working at these support organizations,” including the GVSU Innovation Hub, Ricco said. “It was striking to hear that,” he said. Because of a lack of greater diversity, women and minority entrepreneurs “may be lukewarm to actually reaching out for (assistance) and putting their trust in us to help them,” Ricco said. “We know that’s a weakness. That’s something we have to address and we have to continue to work at,” he said. Public Sector Consultants reviewed entrepreneurial support services in the region and conducted online surveys with more than 100 entrepreneurs across seven counties: Kent, Ottawa, Muskegon, Oceana, Newaygo, Lake and Mason. The firm also interviewed and held roundtables with groups. Nearly half of the survey responses came from Muskegon County, more than 40 percent were from Kent County, and 16 percent were from entrepreneurs in Ottawa County. Participants “described excitement and interest at the community level around supporting small businesses and entrepreneurs, with high levels of engagement and support,” according to the study.

‘Lack of communication’ Despite the region’s entrepreneurial success and support organizations, Public Sector Consultants found that there persists a lack of understanding about what’s available across the region for small business owners. “While many stakeholders felt that there are a large number of resources available to small businesses and entrepreneurs, many agreed that the entrepreneurs in their communities do not know that those resources exist, or how to access them,” according to the report. “There is a lack of communication from business support organizations to individuals who are interested in or are currently starting a small business that prevents them from

EMILY PASZKOWSKI, CPA, CFE

JENN ROGELL, CPA, CFE, MBA

KATY FELVER, MSMSL

KERRY BEAN, CPA, ABV

MAY 24, 2021 / MiBiz

38% 33%

Business planning

32%

Legal support Organizational and time management

28%

Financing

28%

Document and policy development

27%

Branding

27% 27%

Access to buyers

20%

Market analysis or site location Hiring and managing employees

17%

Product development

13%

Supply chain management

SOURCE: West Michigan Entrepreneurial Market Analysis, conducted by Public Sector Consultants Inc. for the GVSU Innovation Hub in Muskegon.

receiving the support they need. For many individuals, not knowing where to start or where to go to receive help can be a huge barrier to taking the first steps in starting a small business.” Several respondents also indicated that “the number of resources available are not necessarily equitable between communities,” according to the report. To address that issue in the Muskegon area, the GVSU Innovation Hub organized the Business Resource Team, a loose-knit group of organizations that works with entrepreneurs. The Muskegon Business Resource Team works to “create, if nothing else, at least a starting point or a landing page for people to get some basic information and they’d be able to click on a link for somebody that they think can help, depending on what they need,” Ricco said.

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Marketing, social media Study participants also said deeper training and coaching that goes beyond the basics in business are among the service improvements that are needed. Participants want training “with very deep dives and to get really good, informative information from these sessions,” Ricco said. Specifically, 57 percent of study participants said they welcome more support and training in marketing and on using social media, and half of the participants cited a need for accounting and tax assistance. Nearly 40 percent want more training in financial planning and projections, and one-third need more help with business planning, according to the study’s findings. The results show that support organizations should look at training programs that go deeper — but may attract fewer attendees — for small businesses as they mature, Ricco said. Training often “casts a wide net” with a larger audience of entrepreneurs at their earlier stages, he said. “We need to almost change our philosophy a little bit as we think about and do a very deep dive into a specific element, whether it’s marketing or pick a topic that’s relevant,” Ricco said. “We have to think about it differently. The entrepreneurs are telling us, as support organizations, ‘Hey, you guys need to figure this out. We still have some unmet needs and there’s levels and grades and you guys need to sort out who’s going to do that and who’s going to go what.’” Public Sector Consultants also found that the region’s population growth exceeds the entire state, that revenue for participants declined 20 percent to 40 percent in the COVID-19 pandemic, and that new business applications increased, indicating higher startup activity out of the pandemic. Entrepreneurs in rural areas in West Michigan also “do not have access to the same funding opportunities, training, physical spaces, and other services that their counterparts in urban areas do,” according to the study. A lack of broadband internet access and transportation to urban areas with greater resources “exacerbate these issues in rural areas,” the study’s authors added. Visit www.mibiz.com

FINANCE

New $30M VC fund aims to get medical devices to market By MARK SANCHEZ | MiBiz msanchez@mibiz.com GRAND RAPIDS — A venture capital firm that invests in medical device technologies wants to raise $30 million for a new fund to support portfolio companies progressing with commercializing their innovations. Grand Rapids-based Genesis Innovation Group LLC’s Cultivate(MD) Capital Accelerator Fund GP LLC has so far raised $7.75 million from 44 investors toward a $30 million goal, according to a May 5 regulatory filing with the U.S. Securities and Exchange Commission. The fund’s formation follows a prior $10 million capital seed fund that Genesis Ball Innovation Group created to make early stage investments in medical device startups. “We started the seed fund a number of years ago and made a number of very early stage investments,” said Genesis Innovation Group CEO Rob Ball. “Many

of them have just matured at this point where a majority of the portfolio now has regulatory clearance and will be getting to the stages of commercialization.’’ That maturity brings about a need for additional capital in their life cycle with a fund that has a later-stage focus and a “little different” risk-reward profile for investors, Ball said. Cultivate(MD) Capital Accelerator Fund has already provided capital to three portfolio companies backed by the prior seed fund, Ball said. Among the companies are Grand Rapidsbased startup Happe Spine LLC, which is developing and commercializing a porous, bioactive material for orthopedic implants, and Shoulder Innovations Inc., which developed a shoulder replacement system and last fall raised $21.6 million in a Series C capital round involving 24 investors. Shoulder Innovations’ implant lasts longer and has fewer components, resulting in less time in an operating room for surgery and reduced the cost, as well as lengthening the periods of time before implants need to be replaced. The implant system has already been used in thousands of surgeries at hundreds of hospitals in the U.S., Ball said.

The most mature of Genesis Innovations’ portfolio companies, Shoulder Innovations this month signed a deal with Genesis Software Innovations that uses artificial intelligence so orthopedic surgeons can better plan surgical procedures. The U.S. Food and Drug Administration recently granted clearance to the Preview 3D Shoulder Arthroplasty Planning Software. In raising funds for Cultivate(MD) Capital Accelerator Fund, Genesis Innovation Group has been approaching a network of industry professionals, as well as high net worth individuals and family offices nationally, Ball said. The accelerator fund started fundraising in the middle of the first quarter and intends to close by Sept. 30. A “large number” of investors in the earlier seed capital fund have invested in the accelerator fund. “We’re doing really well,” Ball said. “It’s a nice market.” Genesis Innovations’ prior seed fund invested in 11 startups and plans to close soon on a 12th investment, Ball said. The companies backed by the fund were able to leverage the investments to collectively attract about $75 million in capital from direct investments from individual investors, plus debt, he said.

Venture capital in Michigan by stages Nearly two-thirds of the $257 million invested in a record 88 startup companies in Michigan last year went to early-stage deals. Here’s breakdown on 2020 venture capital investments by stage:

■

Early/startup stage – 65%

■

Growth/expansion stage – 17%

■

Seed stage – 11%

■

Mezzanine financing – 6%

■

Idea/pre-seed stage – 1%

SOURCE: Michigan Venture Capital Association 2021 Research Report

The need for further investment for venture capital-backed startups to continue commercialization toward the marketplace and the available funding has consistently been a wide gap. In Michigan alone, venture capital firms have $431 million available for follow-on investments in portfolio companies. The 165 Michigan-based

startups backed in the last two years require a collective $1.2 billion in additional capital in the next two years to grow, according to the recent 2021 Michigan Venture Capital Association Research Report. Eleven venture firms in Michigan are presently seeking to raise a combined $446 million.

REDUCING THE HUMAN STRUGGLE

Second installment in manufacturing series focuses on process improvements through Lean 3P

n today’s fast-paced environment, manufacturers can easily be tempted to implement technology and other solutions without fully examining the “why” and “how” that drives their operation. That’s where Lean 3P comes in. Instead of focusing on one-off solutions, the Lean 3P philosophy – which stands for production, preparation and process – takes a more holistic approach to improving manufacturers’ operations. Lean 3P was the topic at hand during the second installment of a 2021 webinar series hosted by the Michigan Manufacturing Technology Center–West (The Center-West), The Right Place and MiBiz. The webinar brought together industry experts and insiders to discuss the benefits of the Lean 3P system and advice to successfully implement those process changes in an organization. During the webinar, Michael Ramierz, president and partner with Wyoming-based automation service provider Orka Automation, framed Lean 3P in the context of talent attraction and development. “In today’s environment where labor is at a premium... the ability to use automation and Lean 3P in conjunction with each other to improve your process is really about improving your environment for your people,” Ramirez said. “It’s about improving their ability to do meaningful work, their ability to see themselves as part of something really special and want to stay with you as an employer.” On the contrary, poor processes can lead to unsafe work environments, unsatisfied and underutilized talent, increased turnover and a host of other negative impacts to a company’s bottom line and margin, Ramirez said. Overall, Lean 3P represents a powerful means of examining how a project is designed and manufactured, and guides teams through the creative process of generating ideas and implementing those ideas, said Jess Cruz, business development manager at The Center-West. The system can also eliminate the “throw it over the fence” mentality that

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passes problems from department to department without solving the issue. That can result in opportunity loss, conflicts of interest and a loss of focus on the customer.

THE HUMAN STRUGGLE When working with manufacturing customers, Orka Automation begins by analyzing ways to reduce the “human struggle” associated with their processes and suggesting solutions both upstream and downstream of the process. For example, the firm worked with a customer to streamline the inspection process for large pieces of cut foam to reduce repetitive and wasted movement during quality control. As a result, workers avoided moving the heavy work pieces between stations multiple times. Orka also installed an in-line quality control technology, which shifted the customer’s QC process to omore proactive than reactive. “For us it’s not about the technology,” said John Amrhein, executive vice president and partner at Orka Automation. “Some people see automation as an end. For us, we really think our product is the process itself. We are very focused on understanding a company’s processes, understanding how people engage in those processes – and once we have a good understanding of how things are and how they should be, then we start thinking about what technology can help.”

CULTIVATING EMPLOYEE BUY IN Webinar participants were quick to point out that Lean 3P and other process improvements are not nearly as successful without buy in from employees. “Lean is about bringing the team together in that work area, cell or business because they know more about that work than anyone,” Ramierz said. The Center-West’s Cruz emphasized the importance of treating everyone as equals when discussing and implementing Lean 3P strategies into an organization. The

structure of Lean 3P encourages talent development and helps create a culture where employees take ownership of the process improvements, he said. “Invite your team members at any level of the organization to be part of your process development cycle,” Cruz said during the webinar. “Teaching the leaders and the technical front line how to do this, how to work with people, work within the rules, brings the real value of Lean 3P to the forefront.”

REFRAMING TECHNOLOGY While automation and other technology can be powerful tools for manufacturers, Lean 3P experts suggest viewing process improvement in holistic terms, rather than attempting to solve it through technology alone. “Lean 3P and automation go together,” Ramierz said. “We have to change that paradigm

that this work is only done ... to drive profitability and productivity at the expense of the worker.” Instead, Ramierz believes that Lean 3P and automation creates an environment where workers feel empowered through meaningful work. “In essence it’s about how do (you) look at really crappy jobs within your four walls and eliminate them, and then take those people who are doing them, upskill them and create more meaningful work for them.”

Find the webinar recap at mibiz.com/3pwebinars

MiBiz / MAY 24, 2021

Brownfield Redevelopment: Good for the Environment and the Bottom Line

here is no doubt these are challenging times for many businesses and communities. Businesses that did not survive COVID-related shutdowns have left empty storefronts and offices. Offering incentives to attract new businesses may not be on the radar of already-strapped governments; however, reduced up-front costs make new development more feasible for businesses, and incentives do not reduce local bank accounts. Redevelopment incentives remain one of the best deals in town for reducing development-related environmental due diligence and cleanup costs and reusing contaminated property and blighted, obsolete buildings known as brownfields. Some incentives can even be used on property that isn’t challenged by brownfield conditions Brownfield conditions can be a significant redevelopment roadblock. Gas stations, warehouses, train tracks, and old industrial buildings remain a threat to public health, safety, and the environment and create extra costs for developers trying to take advantage of existing infrastructure or prime real estate. State and local incentives can level the playing field between a brownfield that may need demolition or environmental cleanup and a greenfield that has never been developed. These incentives most commonly include grants, low-interest loans, and tax increment financing (TIF).

1. GRANTS Brownfield redevelopment grants are available from the Michigan Department of Environment, Great Lakes, and Energy (EGLE), the Michigan Economic Development Corporation (MEDC), and the US Environmental Protection Agency (EPA). Eligibility and turnaround time differ for each agency, but EGLE and EPA grants generally pay for environmental site assessments, baseline environmental assessments (BEAs, which protect the buyer of a contaminated site from liability), and cleanup to make a contaminated site safe for people and the environment. EGLE and EPA grants are highly competitive and available only to local governments. MEDC’s Community Revitalization Program grants can be awarded to developers for demolition, site preparation, infrastructure improvements, building rehabilitation, and other costs in priority communities. Most grants require a committed developer who will create new investment, jobs, and/or an increase in the property’s taxable value.

2. LOANS EGLE offers local governments low-interest brow field redevelopment loans to incentivize new development on brownfield properties. Loans are less competitive than grants and can be repaid with tax increment financing (described below). Like grants, EGLE loans can be used for environmental assessments, BEAs, and other environmental costs associated with site reuse. Unlike EGLE grants, EGLE loans can be used even where there is no committed developer.

3. TIF TIF is probably the most complex incentive, but the least competitive. Local brownfield redevelopment authorities can motivate development by reimbursing developers from future property taxes for some of their costs. A site that is contaminated, blighted, or obsolete probably has a low taxable value. When it’s redeveloped, the taxes go up because the cleanedup property with a new business is worth more. The difference between the old tax amount and the new tax amount is the tax increment. The tax increment, consisting of local and some state taxes, can pay for eligible brownfield costs like asbestos abatement, demolition, environmental investigations, cleanup, and sometimes for new infrastructure and site preparation costs. The local government continues to collect the baseline (predevelopment) tax amount until the brownfield costs are reimbursed. Brownfield TIF can even reduce development costs on sites without typical brownfield challenges like abandoned buildings and contamination. For example, Fishbeck’s Brownfield Redevelopment team partnered with developer North River Hills LLC, the Newaygo County Brownfield Redevelopment Authority, and the State Land Bank Authority (SLBA) to use TIF for a new residential development in Newaygo, maintaining home affordability for buyers in the $200,000 market. Our innovative approach was to transfer a non-traditional brownfield property from its private owner to the SLBA, then back to the owner for development, to make the site eligible for brownfield incentives only available for land bank-owned property. The transfer means North River Hills LLC can

Before

After

be reimbursed for site preparation and infrastructure costs from homeowners’ future property taxes following appropriate government approvals. The developer lowers its bottom line and passes the incentives to home buyers in the form of lower home prices. The plan helps buyers who otherwise might be excluded from new home ownership by record high construction costs. Newaygo County, the City of Newaygo, and the State will all see increased tax revenues when the vacant property is developed, and eligible costs are reimbursed. Every brownfield project is different, but experts can help find creative solutions and provide property transaction environmental services to get it started on the right path.

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SMALL BIZ

Cubi Market’s Grand Rapids location at 1201 Wealthy St. SE in Grand Rapids. PHOTO BY ANDY BALASKOVITZ

Pick-up service for local food producers being tested in Holland, GR By KATE CARLSON | MiBiz kcarlson@mibiz.com

Pack Elephant founder and CEO Winsome Kirton. PHOTO BY KATE CARLSON

Pack Elephant helps local, diverse artisans scale their business By KATE CARLSON | MiBiz kcarlson@mibiz.com GRAND RAPIDS — When Winsome Kirton worked in advertising, she was often disappointed by executives’ uninspired corporate gifts that didn’t match the company’s values. Kirton saw a business opportunity in improving the quality of corporate gifting and helping companies fulfill supplier diversity goals, while also elevating small businesses owned by women, minorities, veterans, and LGBTQ people. Kirton opened Pack Elephant Inc. about two years ago as an online market that sells curated gifts sourced from diverse small business owners. In the middle of the COVID-19 pandemic last December, Kirton also opened a storefront in downtown Grand Rapids and is one of the anchor retail tenants at Studio Park. “We service consumers that come into the store or find us online, but we do a lot of corporate gifting — that’s really our bread and butter,” said Kirton, Pack Elephant’s CEO and founder. “A lot of corporations have supplier diversity goals or they have mission statements around diversity, equity and inclusion. We want to be able to help them demonstrate those and put their money where their mouth is when it comes to gifting.” Incorporating diversity, equity and inclusion in corporate gifting is a seemingly benign way to make a difference, but it can have a direct positive effect on communities of color, Kirton said. Connecting with Pack Elephant has made it possible for many small makers to scale their businesses, she added. Many vendors at Pack Visit www.mibiz.com

Elephant specialize in home goods, decor or wellness products and previously relied on seasonal artisan markets for in-person sales, or costly third-party services like Etsy. “We get orders sometimes for 1,000plus gifts at a time,” Kirton said. “That’s how you’re able to introduce artisans who don’t typically get that kind of volume to scale. Making it easy for customers is part of the puzzle, but this is also making sure the businesses themselves have a sustainable channel for sales.” As a Black woman, Kirton can relate to some of the additional obstacles her vendors from diverse backgrounds face when trying to break in and “be on the list,” she said. “That’s a difficult thing for anyone. You have to have all of these credentials that cost money and take a lot of time in order to get those badges of approval,” Kirton said. “For a lot of new businesses, they are looking for their first shot. If you’re not on the list, you’re not on anyone’s radar. That’s why a lot of businesses have trouble identifying and finding women or diverse-owned businesses to partner or work with.” As for corporate gifting, companies are typically last-minute shoppers that haven’t taken the time to thoughtfully source gifts, or they don’t know where to find diverse suppliers, Kirton said. “Having a platform to tap and a cohort of artists that have already been vetted is super helpful,” Kirton said. Moving into the Studio Park space during the pandemic was a challenge, but Kirton received a $67,500 grant from Downtown Grand Rapids Inc. to help cover rent. Acrisure LLC, which is in the process of moving into its new headquarters in Studio Pa rk, recent ly a nnounced t hat

“A lot of corporations have supplier diversity goals or they have mission statements around diversity, equity and inclusion. We want to be able to help them demonstrate those and put their money where their mouth is when it comes to gifting.” — WINSOME KIRTON CEO, Pack Elephant

it’s a platinum sponsor of the Arts Marketplace at Studio Park, which is anchored by Pack Elephant. With the addition of the physical storefront in Studio Park, customers are also able to purchase products from Pack Elephant individually. The physical space for the business also functions as a showroom so companies can come view products in person. “We really love being here,” Kirton said. “The location is awesome and also gives our artists and artisans that are West Michiganbased the opportunit y to have a downtown presence.”

hen restaurants were forced to change how they did business during the pandemic, Garrick Pohl saw an opportunity to test the market for a curbside service that focused on local small businesses. Pohl, a serial entrepreneur and executive director of West Michigan startup support firm SpinDance Labs Inc., launched a pilot project that provides a centralized curbside delivery method for local farms, restaurants and products. Known as Cubi Market LLC, the company launched two locations earlier this year at 430 W. 17th St. in Holland and at 1201 Wealthy St. SE in Grand Rapids. Residents living near Cubi locations can order groceries or locally sourced goods online and have them delivered to the centralized locations, which include temperature-controlled lockers for specific orders. Pohl said the concept has evolved to focus on helping these local producers and suppliers reach more consumers. “This idea came at the same time when we were all experiencing a change to how we buy food, buying food online, and getting more familiar with curbside pickup and delivery,” Pohl said. “Our team said curbside is working for big-box retail, how can we deploy that for local businesses?” Cubi is now an outlet for 32 vendors, including a range of restaurants, farms, bakeries and businesses offering home goods. Eliminating the last-mile delivery to someone’s home saves on packaging and additional transportation costs that are passed on to the consumer, Pohl said. The secure, temperature-controlled lockers also account for quality control, he added. “Initially we were just looking at food in general and where we could add some value. Where we ultimately landed was how people were shopping for food online and how they were picking it up,” Pohl said. “Home delivery was the traditional way, but there is so much waste with home delivery.”

Cubi’s model caters to small vendors that may lack a brick and mortar storefront or rely on weekly farmers markets. Cubi makes these businesses more accessible and gives vendors a platform to sell throughout the week, said Paul Mixa, Cubi Market’s marketplace director and chief curator. “People can get local, quality, fresh produce multiple days of the week and don’t have to wait for one day out of the week or have to wait in long lines,” Mixa said. “It’s easier and more accessible for many days throughout the week.” After launching a few months ago, Mixa and Pohl expect Cubi activity to pick up as the weather gets warmer and more produce is available. The average size of orders has also grown since the concept launched, Pohl said. “Our road map and vision for this is to not just be in a couple locations — we want to be where the traffic is,” Pohl said. “Sometimes that might be literally foot traffic and vehicle traffic, but sometimes that could be a multiple tenant dwelling, or employer or college campus.” The centralized concept can also support small businesses that may be struggling with high overhead costs such as rent at a brick and mortar location, Pohl said. “Ultimately, with the merchants we want a very predictable sales channel,” Pohl said. “It’s the uncertainty of demand that makes it difficult to build those businesses in the early years, and this can be a way for us to increase that consistency.” The Grand Rapids Cubi location is at a vacant corner lot at Wealthy Street SE and Fuller Avenue SE. Grand Rapids-based construction and design firm Metric Structures LLC was eyeing the property for a two-story mixed-use development that included a small grocery store. However, the timing of that plan has been delayed because of the pandemic. “We’d been working on striking a partnership with local vendors for a market there. Cubi came to us and it seemed like a good test fit,” said Metric Structures founder Jacey Shachter. “Cubi has aspirations for expansion down the road, and we’re open to a partnership with them. We’re keeping our opportunities open.” MiBiz / MAY 24, 2021

INFORMED IMPACT To overcome racial, social and economic inequities we must respond with intention and care. Grand Rapids Community Foundation uses the tools of philanthropy to answer community needs. Our partners inspire, motivate and guide our work.

The Community Foundation connects people, passion and resources to meet our region’s toughest challenges. Learn more at grfoundation.org. Grand Rapids Community Foundation is a proud sponsor of MiBiz’s nonprofit news section.

MAY 24, 2021 / MiBiz

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NONPROFIT ORGANIZATIONS

Nonprofits partner on new early childhood education center in southeast Grand Rapids By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com GRAND RAPIDS — A trio of nonprofits are partnering to develop a roughly $5 million facility this fall to help meet ongoing needs for early childhood education in a historically disadvantaged part of the city. IFF, a Chicago-based nonprofit community development financial institution (CDFI) with locations across the Midwest, is leading the development of a new early childhood education center in Grand Rapids’ Boston Square neighborhood. The organization is partnering with Early Learning Neighborhood Collaborative and Amplify GR, which is helping to secure the property. The facility’s location has not yet been finalized, but officials still plan to break ground this fall for a fall 2022 opening. Studies have shown over the past decade that the 49507 ZIP code has a disproportionately high number of children without access to reliable care and early education. Bryant “This is the historic epicenter of the African American community in Grand Rapids, and it’s been historically disinvested in, bottom line,” said Ashanti Bryant, IFF’s director of early childhood services. “We are part of those seeking to invest in a community that has tremendous assets and potential but not the same level of opportunity or a seat at the table. We see our investment in this center as an investment in the ward, ZIP code and neighborhoods where children and families deserve the very best.” The new 12,000-square-foot center will serve more than 100 children, from infants to 5-year-olds. It will also be a resource for home- or communitybased care providers. The facility will house certified teachers in its classrooms and also provide support services for parents and other local care providers. It also will operate for full days, all year long. “Parents don’t just work jobs from 8 a.m. to 3 p.m.,” Bryant said. “The need for quality childcare does not end at the beginning of June just because the school year ends.” In addition to the facility, IFF’s Learning Spaces program will provide grants to help 12 to 15 local providers improve their own resources and facilities. “We find that many childcare providers don’t have the margins to invest in and have a quality facility for the care and education of children,” Bryant said. “COVID taught us that the built environment has to be safe for humans to be inside of it. We have fivestar-rated providers in our community but they’re in below-par facilities. That’s IFF’s investment.” The plan is modeled off of IFF’s similar projects across the Midwest, including at the Marygrove College campus in Detroit that was announced in 2019. IFF has provided more than $60 million in financing to early childhood education facilities in the Midwest.

Leasing to own While IFF is developing the project, the goal is for the Grand Rapids-based Early Learning Neighborhood Collaborative (ELNC) to eventually own the building

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“Having this beautiful building will also help restore the faith of our community members in the system — that we can also get something good and intentionally designed for our children.” — DR. NKECHY EKERE EZEH CEO of the Early Learning Neighborhood Collaborative

in seven to 10 years. That’s a prospect that excites ELNC founder and CEO Dr. Nkechy Ekere Ezeh. Formed in 2010, the ELNC leases space for 35 classrooms at 11 different centers. At times, the organization has had to scramble to find a new location if a particular property owner has a new “vision,” Ezeh said. “Our children need consistency, they need to be stabilized,” Ezeh said. “We can’t be moving things around like that.” Ezeh was “getting chills” discussing the plan for the new center, as it would help bring stability to one of the most disadvantaged parts of the state’s second-largest city. “To have a beautiful center intentionally designed for our children in the neighborhood would do more than wonders for them,” Ezeh said, noting ELNC’s “place-based” mission. “We believe that children need to be surrounded in their own environment. The best environment for early education for children is rooted in what is local for them. “Having this beautiful building will also help restore the faith of our community members in the system — that we can also get something good and intentionally designed for our children.”

Building a presence Bryant said IFF has had a presence in West Michigan for the past seven years by issuing loans to various nonprofits. The organization conducted a study in 2018 that identified southeast Grand Rapids as the highest-need area of the city. The study found that Grand Rapids needs about 4,000 more licensed and registered early childhood education slots, two-thirds of which are concentrated in just one-third of the city’s neighborhoods. The study “helped catalyze” several new efforts, including the countywide Ready by Five millage that passed in 2018 and will generate $34 million in early childhood education funding for Kent County by 2024. The 2018 study also sparked IFF’s plans for the new center and opening its West Michigan office in the neighborhood. Looking ahead, the organization plans to update study to reflect changes brought on by the pandemic.

Chicago-based nonprofit community development financial institution IFF is partnering with two Grand Rapids nonprofits on a new early childhood education center on the city’s southeast side. PHOTOS COURTESY OF IFF

“We’ve lost about 20 percent of childcare Access is also only part of the equation, Bryant providers in the greater Grand Rapids and Kent added. The childcare industry is woefully underCounty area,” Bryant said of the pandemic. “That funded and is largely staffed by women and peocreated more need.” ple of color. Business groups have also focused on the “Even before COVID, we were losing a high ongoing need for early childhood percentage of providers,” he said, education. The pandemic highnoting the 20-percent decline in lighted and at times exacerbated providers in Kent County over the NONPROFITS the inequalities in workers’ ability past year. “Childcare is so imporNEWS to obtain childcare. tant in communities, but it’s also — Sponsored by: “C h i ldc a r e i s i mp or t a nt an industry and sector so severely GRAND RAPIDS because it helps support t he underfunded. We literally have COMMUNITY workforce, particularly in lowteachers today who are caring for FOUNDATION a nd moderate-i ncome comchildren and still being paid $8 to munities where, if people want $9 an hour. The predominantly to move themselves to a different economic women, and predominantly women of color, position, t hey’ve got to be able to work,” doing this work are doing it because they’re comBryant said. mitted to the children and families.” MiBiz / MAY 24, 2021

Former Cornerstone University president leaves legacy of growth, investment An exit interview with Dr. Joe Stowell Dr. Joe Stowell presided over his last commencement at Cornerstone University on May 8 after more than a decade overseeing substantial campus growth and investment. In his 13-year tenure, Cornerstone invested millions of dollars in new campus facilities and expanded program offerings, including the new $3.5 million Mary De Witt Center of Nursing in April and a planned bachelor of science in nursing. Stowell also helped double the university’s endowment and put the school on a path to be debt free by 2024, while reaching record-high enrollment for the school of more than 3,000 students in 2015. Stowell, 77, came to the private faith-based school after serving as a teaching pastor in suburban Chicago, and will stay on in an advisory capacity for the next year to help with the presidential transition. Stowell recently discussed with MiBiz his legacy and higher education more broadly in West Michigan. What was the status of Cornerstone when you arrived in 2008? I think Cornerstone had an outstanding mission and great leadership, but they were difficult times for higher education, especially private faith-based education. When we came, we had something with great bones but there was a lot of work to be done. I’m so thankful over the past 13 years to have seen dramatic growth and improvement on almost every front of the university. I attribute it to the outstanding board and team I worked with. What was your approach as you sought to build new academic programs and make investments? A very important part of our task when we came in was to advance the brand of the university. This university had all of the right stuff. What we had to do was get the brand identified and out into the community. I’m grateful for the fact that as we framed our brand, the experience of our brand on campus became a very strong reality. In the past, Cornerstone was kind of seen as a religious huddle up the Beltline and internally drawn in. Our commitment was to make sure we could be a blessing to the community outside of us and enable West Michigan to flourish with graduates who distinguish themselves in their career. What are Grand Rapids’ and West Michigan’s strengths when it comes to higher education? West Michigan is unusual for the high caliber of higher education opportunities that are here. There’s so many major players, and the options are interesting. Cornerstone, Calvin, Hope and Aquinas are all faith-based. Then you have the public universities. It offers a variety of attractions. It also makes it highly competitive. All of us are fishing out of the same pond, in a sense. One of the challenges is the demographics in Michigan have led to a declining high school graduation rate over the last seven to eight years, which makes the competition even more significant. There’s fewer fish in the same pond but more people with lines in the pond. It’s been interesting and a challenge. What new programs or degrees at Cornerstone do you see having a lasting effect? One of the things we’ve been wanting to do and have done quite successfully is measure and be responsive to the marketplace. We think we make a contribution by graduating students to go into careers that are significantly important to West Michigan in particular. As a result, most of our programs are geared to meet the needs of West Michigan’s industries. We see long-term impacts from our engineering and nursing programs and health care and pre-med programming. Can you discuss your approach to fundraising and investment and how that’s benefitted Cornerstone financially? We really increased the accountability and internal budget management. We enabled budget managers to be conservative yet resourceful in their areas. In terms of fundraising, it’s been wonderful to see a lot of people in these areas embrace our mission. It was the uniqueness of our mission that drew major fundraisers in. We wouldn’t be here today without the amazing group of donors that provided for us. I came here from Chicago and knew very few people over here. The first two to three years were just building relationships and communicating the goals, brand and our mission for where we were going to go. The Lord graciously provided these people who shared our passion. What did you learn about yourself as a leader during the pandemic? I learned how important it is to not be stuck in the groove of leading the way you’ve always led. Some principles to leadership never change, but all of a sudden you have to be nimble. One way is to be open to counsel and advice. Second, I learned how important it is to articulate your priorities in the midst of a most difficult time. The third is the sustainability of our mission, the financial one. We kept saying that all of the time so people had something to hang on to. What do you see as your legacy? I want our legacy to be our graduates who go out and enable their community to flourish and who contribute strongly to the success of organizations they serve in careers and bring the virtue of Christ in their culture. The simple answer is: I want my legacy to be our graduates who are making a difference. Interview conducted and condensed by Andy Balaskovitz. Photo courtesy of Cornerstone University.

MAY 24, 2021 / MiBiz

IN THE NEWS M&A n Grand Rapids Charter Township-based engineering firm Prein & Newhof Inc. has acquired Summit Surveying Inc., an Allendale-based land surveying firm, according to a statement. Summit’s founders, Todd Bronson and Rob Hammond, and its other employees will stay on under the new ownership. The move allows the founders to focus on surveying and let Prein & Newhof run the back office operations, according to a statement. For Prein & Newhof, the acquisition enhances the company’s land and construction surveying services in West Michigan. Terms of the deal were not disclosed. n West Michigan-based Wightman, a company that specializes in architecture, civil engineering and surveying, recently acquired Reynolds Land Surveying and Mapping LLC, a two-man operation headquartered in Hastings. With the purchase of the company, Wightman will establish a survey field office at 109 S. Church Street in Hastings. Wightman already maintains locations in Kalamazoo, Allegan, Benton Harbor and Royal Oak. Reynolds Land Surveying owner Brian Reynolds will join Wightman on a part-time basis while the company’s one employee will serve as a fulltime survey crew chief for Wightman. “Not only are we thankful to be bringing Brian Reynold’s expertise to the team, we are also looking forward to growing the footprint of our survey business in Barry County,” said Matt Davis, president of Wightman. n Lansing-based Liquid Web LLC, a private equitybacked hosting, cloud and WordPress software company, has acquired GiveWP and WP Business Reviews from Impress.org, according to a statement. GiveWP offers a website plugin that allows nonprofits and other organizations to accept donations. The deal extends Liquid Web’s web offerings tailored to small and medium-sized businesses, according to a statement. Both GiveWP and WP Business Reviews will operate as an independent unit within Liquid Web called StellarWP. Terms of the deal were not disclosed. Liquid Web is a portfolio company of Chicago-based Madison Dearborn Partners LLC. n Superior Business Solutions, a third-generation, Kalamazoo-based company that specializes in document management services, print marketing and promotional products, has been sold to the like-minded Smart Source, a company headquartered in Atlanta. Smart Source focuses on printed products, promotional marketing and business process outsourcing. The move allows Smart Source to increase its market share in the Midwest. “I am looking forward to helping make Smart Source an even stronger and more resourceful company,” Bill English, president of Superior Business Solutions, said in a statement. “We will be looking for other strategic additions to Smart Source in terms of geography, capabilities and cultural fit.” n West Michigan creative agencies Next Creative Co. and AUXILIARY Advertising & Design have merged, establishing a presence both in Holland and Grand Rapids. The two companies have organized under the Next Creative banner and feature a staff of 18 employees following the merger, which closed at the end of 2020. Next Creative is headed by Rich Evenhouse, now president, and Tim Hackney, who will serve as executive creative director. AUXILIARY was founded in 2005 by Tom Crimp, who is now a partner in Next Creative. n Traverse City-based High Street Insurance Partners acquired New Jersey-based Paladin Insurance Agency and Richardi-Demola Insurance Agency. Terms of the transactions were undisclosed. Both firms specialize in business and personal Insurance solutions. n Perrigo Co. plc intends to sell its Mexico and Brazil-based over-the-counter business to Bostonbased global private equity firm Advent International. Part of Perrigo’s Project Momentum cost savings initiative, the deal should close in the second half of the year. Terms of the transaction were undisclosed. The Latin American business unit generated about $85 million in sales in 2020, and Perrigo is “confident the businesses will do well under Advent’s ownership as these are key areas of focus for their company,” President and CEO Murray Kessler said in a statement.

n Highland Park-based Snethkamp Inc. acquired Feeny Chrysler-Jeep-Dodge-Ram of Gaylord Inc., according to a report in the Petoskey NewsReview. Snethkamp is a fourth-generation familyowned dealership operator in Southeast Michigan. Terms of the deal, which closed in April, were not disclosed. Feeny continues to operate two other stores in Grayling and Midland. n Jenison-based Dienetics Inc., a provider of diecutting and die-making services, was recently sold to Rockford, Ill.-based Excelsior Inc. Dienetics lends its rapid prototyping, design resolution and accelerated production services to the automotive, appliance and office furniture industries. Dienetic’s buyer, which has been in business for more than 100 years, manufactures custom gaskets, washers, seals, insulators and other precision parts out of both synthetic materials and thin-gauge steel, supplying OEM manufacturers around the world. Grand Rapids-based M&A firm NuVescor Group advised Dienetics on the sale.

EXPANSION

n Walker-based Meijer Inc. this month opened three new 155,000-square-foot supercenter stores in Seven Hills and Boardman, Ohio and Westfield, Indiana, according to a statement. The privately held Meijer now operates 255 supercenters and grocery stores spanning Michigan, Ohio, Indiana, Illinois, Kentucky and Wisconsin. n Rockford Brewing Co. LLC has unveiled plans to renovate a nearby historic building and expand with the new Malph’s Pizza Pub concept. The nearly 5,800-square-foot pizzeria, distillery and brewery will take shape in the former Vitale’s Pizza of Rockford, located at 42 E. Bridge St., just steps away from the existing brewery. The partners behind Rockford Brewing Co. had been in talks for months with former Vitale’s owner Terry Prowoznik to buy the restaurant, and eventually signed a purchase agreement in May 2020, just as the first wave of the pandemic took hold. n Long Road Distillers LLC plans to open its fourth location this summer after signing a twoyear lease for space in Cadillac. The Grand Rapids-based craft distillery will occupy the 3,000-square-foot space at 412 S. Mitchell St., which will have a 100-person capacity inside, plus hold an additional 100 people outside. Long Road currently maintains locations in Grand Rapids and Grand Haven and is finishing up the build out of a new location in Charlevoix.

PROFESSIONAL SERVICES

n Rua M&A LLC, which consists of NuVescor Group and Rua Associates, restructured to better focus each brand and increase client services. Under the changes, President Randy Rua will focus on working with companies that have been a large part of NuVescor’s target: manufacturing and manufacturing support, production, engineering, and distribution. Nick Good, who has handled buyer negotiations for all NuVescor and Rua Associates projects, now focuses on working with Rua Associates clients in information technology, construction, and business services. Travis Ernst will transition to operations manager.

HEALTH CARE

n Spectrum Health Lakeland began construction on new clinical space to expand heart and vascular services at Spectrum Health Lakeland Hospital in Niles. The $2.9 million project includes 3,760 square feet of new clinical space with 10 exam rooms, plus renovations to the hospital’s orthopedic and bariatric units. Completion is targeted for this summer. The project is supported by donors that include the family behind the French Paper Co. and the Edward F. and Irma Hunter Foundation, which offered to match every dollar contributed up to $200,000. Visit www.mibiz.com

UPCOMING ISSUES

6.7.2021

Real Estate: Multifamily Contract Deadline: 5.26.2021

6.21.2021

Transportation

Contract Deadline: 6.9.2021

7.5.2021

Industry 4.0: Automation Contract Deadline: 6.23.2021

7.18.2021

West Michigan Tribal Economy Contract Deadline: 7.7.2021

8.2.2021 Insurance Grand Rapids explores reviving formal arts council

Open-heart surgery partnership a ‘game-changer’

PAGE 21

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

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Drinking Economy

Gender disparities in the workforce ‘uncovered further’ by COVID-19 pandemic

CRAFT BREWERS RETOOL TO MAINTAIN PROFITABILITY

By KATE CARLSON | MiBiz kcarlson@mibiz.com

en and women both experienced steep declines in employment at the beginning of the COVID-19 pandemic, but on average, the workforce for men is back to pre-pandemic levels in Michigan while women have left the workforce at disproportionate rates. The pandemic’s negative effect on working women is amplified for working mothers, especially for women of color, according to a state Women in the PAGE 6 PAGE 22 Michigan Workforce report released atSINCE the MARCH 29, 2021 • VOL. 33/NO. 12 • $3.00 SERVING WESTERN MICHIGAN BUSINESS 1988 www.mibiz.com end of March. “Traditionally we have been facing this issue for a long time, it’s just the pandemic that Fauble is pushing it to the forefront,” said Blanca Fauble, chief development officer for the nonprofit Michigan Women Forward. “It’s always been there, it’s just now that it’s been uncovered further.” Part of the problem is that more women City Built Brewing Co. CEO Ed Collazo. PHOTO BY STEPH HARDING than men are in low wage jobs. Because of the lack of workplace protections that lower wage jobs tend to have, employees in these roles were the most at risk for losing their jobs for longer periods of time during the pandemic. According to 2018 data from the Brookings By MARK SANCHEZ | MiBiz the Center for Transformation Institution, close to half of all working women msanchez@mibiz.com and Innovation that will rise on a in the country — 46 percent, or 28 million — From left: Award-winning designer Joey Ruiter sits on his NOMOTO motorcycle concept at his design studio in Ada. A rendering of Buell 4.8-acre site along North Monroe worked in jobs that paid low wages averaging PHOTO BY KATY BATDORFF. COURTESY RENDERING Motorcycles’ 1190 Super Touring bike. Ruiter and Buell recently formed a new collaboration. GRAND RAPIDS By — The eight-story $10.93 an hour, while 37 percent of all workKATE CARLSON |Avenue MiBiz and Ottawa Avenue just office tower Spectrum Health plans east of the Grand River. The $60 ing men earn low wages. These percentages kcarlson@mibiz.com ot many designers — ifare anyeven — feahas turned over the years with his transto build will bring a major new redemillion to $80 million project higher for Blackheads and Latina women everal Michigan communities ture a portfolio of workinquite like portation curiosities. velopment and hundreds of employwill house about 1,200 Spectrum the workforce, of which 54 percent and 64 are at risk of losingadministrative crucial federalstaff — execJoey Ruiter. In 2019, teamed up with fellow conees to the Monroe North neighborHealth percent, respectively, are Ruiter low wage earners. funding under changes From award-winning“(The officepandemic) ceptualhas designer D. Koolhaas to host hood near downtown Grand Rapids. utiveproposed leadership, human resources, openedRem our eyes to PAGE 4 PAGE 26to a aproject their designation metropolifurniture designs he an things,” exhibition called at the Spectrum Health aims totobegin legal andasfinance — now worklot of different Fauble said.DISRUPTORS “From tan areas, officials say in the city. calls Snoped, a reimagined, black aluminum Los Angeles-based Petersen Automotive construction late this summer on which ing atlocal 26 leased offices See WOMEN IN THE WORKFORCE on page 17 OCTOBER 26, 2020 • VOL. 33/NO. 1 • $3.00 SERVING WESTERN MICHIGAN BUSINESS SINCE 1988snowmobile that rides like a cafe racer, the www.mibiz.com would negatively affect services and economic Museum, showcasing conceptual approaches development efforts. Grand Rapids-based Ruiter is not your typical to automotive design. The White House Office of Management nine-to-five office furniture designer. As a self-described minimalist in his P E R and Budget (OMB) is considering a proposal In fact, it’s his work with cars, motorcycles, trade, Ruiter generally begins each of his to redesignate 144 U.S. Metropolitan Statistical boats and other transportation elements that projects by first stripping an object down to Areas as “Micropolitan has grabbed attention from nationwide media its core only to build it back up in unique and Statistical Areas” that are and enthusiasts alike. unexpected ways. based on smaller popula“Some of my work is provocational,” Ruiter One such example is his NOMOTO, a By MARK SANCHEZ | MiBiz developers say is critical for both The issue has become increasingly importion sizes. The proposal said. “It’s a piece of art. People will look at it motorcycle concept where a metal, graffitimsanchez@mibiz.com businesses and households. tant during the pandemic as companies conwould affect metropoliand I want them to ask questions and for it to clad body completely camouflages the bike Eliminating the so-called duct business v irtua lly and students learn tan areas in Niles, Battle raise emotions.” against typical urban settings. The bike is also ichigan and the nation need the same “digital divide” must become as remotely, Klohs said. The pandemic brought Creek, Jackson, Midland, With his studio located in Ada, Ruiter’s fully functional. By JAYSON BUSSA | MiBiz kind of concerted effort to deploy important as extending electrigreater awareness to the issue and how in some Bay City and Monroe. bread and butter might be lending designs to The Consumer Car is another highlight jbussa@mibiz.com broadband internet access as 90 years cal and telephone service areas thetop digital divide “is more like theportfolio. Grand Beginning with a 1993 Currently, some ofinto West Michigan’s furniture manuin Ruiter’s ago when America set out to electrify rural markets in the 1930s, Birgit Canyon,” KlohsInc., said. By JAYSON BUSSA | MiBiz Metropolitan Statistical facturers — names like Steelcase Herman Ford Festiva GL chassis and drivetrain, Ruiter PAGE 16 Hackbarth PAGE 18 ichard Reiffer and his staff rural areas following the Great Depression, ecoKlohs, CEO of The Right “OurFurniture children shouldn’t jbussa@mibiz.com Areas must contain a U.S. MillerPlace Inc. and Nucraft Co. — but hebe sitting in cars in the See RUITER on page 3 at Grand Rapids-based nomic developers say. Inc. in Grand Rapids, said durparking lot of a restaurant to get Wi-Fi so they can Census Bureau-delineated urban area with a Klohs Fusion IT LLC tend to The COVID-19 pandemic has heightened the ing a recent virtual panel disdo their homework. I think that’s just Third World,” population of at least 50,000, while micropoltake a proactive approach need to fix a lack of affordable high-speed internet cussion at the Michigan Economic Developers Klohs said. itans are areas with populations of 10,000 to See MEDA on page 3 when it comes to advising clients access in some markets of the state that economic Association’s annual conference. 50,000. on digital strategies. The OMB’s proposed change would So when COVID-19 transitioned increase the minimum population to qualify into a full-blown pandemic in early By MARK SANCHEZ | MiBiz if they get the dual-dose vaccine from Pfizer Inc. or company has 127 stores in Michigan, Indiana and as a Metropolitan Statistical Area from 50,000 March, the team was already tellmsanchez@mibiz.com Moderna Inc. The amount will more than compenOhio, more than 2,300 employees, and is one of the to 100,000. ing the midsate employees for the time they may need to leave nation’s largest tire dealers. OMB published a notice on the proposed size companies growing number of employers are work to get vaccinated, company officials say. “We want all of the employees of all types to change on Jan. 19, kicking off a public comment it works with to offering incentives to their workers “We want to make sure all of the employees be able to do that so that they feel when they are period that ended March 19. OMB will consider start facilitating who opt for getting a COVID-19 vacwho want the vaccination can get it and feel safe, at work it’s safe to be at work,” Barnes told MiBiz. recommendations from a review committee effective remote cine, including with extra paid time off and that they don’t have to choose between stay“We want to make sure we create a safe working and public comments, and any revisions will work. or small cash bonuses. ing on the clock and earning an hourly wage versus environment for all and we don’t want any of our be announced in a final notice. The potential Fusion IT, At automotive repair center Belle Tire, employtrying to get the vaccination,” said Don Barnes III, teammates to hesitate.” changes could go into effect in 2023. which works See VACCINE INCENTIVES on page 9 ees are paid $25 for each vaccination visit, or $50 total president of the Allen Park-based Belle Tire. The See MSA AND CENSUS on page 5 with businesses Reiffer By KATE CARLSON | MiBiz on an ongoto — such housing, including kcarlson@mibiz.com ing basis as a managed service high-density rentals. P E R I O D I C A L S provider (MSP), even developed The Lansing-based Michiest Michigan citwhite papers to serve as a refergan Municipal League has ies are examinence for effective work from home stepped in to help local goving new polistrategies. ernments solve their housing cies to expand “We started warning our clients puzzle. The MML plans to issue affordable housing and create early and most of them acted on guidance in early 2021 on code a supportive environment for it to get equipment if they didn’t reform that can help increase developers as studies show an already have equipment capable affordable housing units. ongoing need for more units. of running their remote work,” said That includes incentivizing The renewed discussions Reiffer, the company’s vice presiaffordable housing developers this year among city officials dent of strategic initiatives. “For a PAGE 4 SEE PAGE 10 through tools like brownfield in Grand Rapids, Holland, while there, the backlog to get lapcredits, streamlining zoning Kalamazoo and Grand Haven tops was about six months.” codes and a refined applicacome as the COVID-19 panThe ongoing pandemic has tion process. demic has driven high unemushered in a tidal wave of remote “What happens is you have Drew Phillippy is president of Grand Rapids-based Purple East, which ployment and financial strain, working for companies that were developers sinking a lot of recently emerged from bankruptcy under a new law meant to help small raising concern among offieither forced to send workers home money into the process and businesses. cials who say it could exaceror did it out of precaution. Many it makes it harder for them to bate the need for affordable of these companies’ MSPs have build housing developments housing. become the brain trust for workaffordably,” said MML Policy Cities are attacking the from-home setups and strategies. Research Director Shanna problem in a variety of ways, Draheim. including revamping outdated Meanwhile, studies conUneven footing zoning codes to make it eastinue to show a need for affordWith remote work a growing trend ier for developers to include able housing throughout the before the COVID-19 pandemic, affordability in housing develregion. A recent Housing Next many companies already had a opments, as well as prioritizing study shows at least 5,340 more rough infrastructure in place to affordable or mixed-use housrental units and 3,548 more For small businesses facing bankruptcy, the new make the transition smoother, ing for incentive tools such as owner-occupied units are Reiffer said. brownfield credits. needed in the next five years federal Small Business Reorganization Act is proving Still, some businesses had to Despite the effort being in Grand Rapids to meet housto be a cost-effective and timely lifeline. A Grand swiftly make up ground while some made to add more housing ing demand. Housing North, a Rapids retailer offers an early test case. SEE PAGE 14 of it was dictated by their respecstock at varying price points, nonprofit that spans 10 countive industries. housing advocates and local ties in the northwestern Lower planners are still confronting Peninsula, showed last year See WORK FROM HOME on page 12 STORY BY ANDY BALASKOVITZ // PHOTO BY KATY BATDORFF a stigma associated with — the region would need about See HOUSING on page 11 and community opposition

Kalamazoo County regroups after housing proposal fails

By JAYSON BUSSA | MiBiz jbussa@mibiz.com

ooking back on a 2020 plagued by the COVID-19 pandemic, Ed Collazo didn’t sound like a business owner who just saw his company’s revenue plummet by half a million dollars for the year. “2020 was a blessing, dude,” said Collazo, CEO of Grand Rapids-based microbrewery City Built Brewing Co. There is certainly no disputing that top line revenue for virtually every craft brewery took a hit in 2020, a year when brewpubs and taprooms were either shut down completely or See PROFITABILITY on page 14

Deborah Prato takes helm at The Rapid

‘Substantial and far-reaching’ Federal proposal to change some metropolitan areas’ status could jeopardize economic development

Design Disruptor

Natalia Kovicak takes helm at GR Econ Club

Ruiter leaves his Panel: Rural broadbandJoey development should mirror electric grid build-out minimalist mark on the Michigan

vehicle and furniture industries and starts a new collaboration with Buell Motorcycles

Spectrum expects to save about $15 million annually in rent. Spectrum Health hopes the project will lead to further redevelopment and “breathe more life” into the Monroe North business district that most recently saw a former industrial site transformed into the 246-room Embassy Suites hotel, said Spectrum Chief Financial Officer Matt Cox.

Ada-based designer

Managed service providers play key advisory role in shift to work-from-home

infrastructure planning would get boost from Biden plan

“I think it’s certainly going to transform the neighborhood. It’s going to bring even more life into a neighborhood that’s growing now, and I think more development will happen as a result of us being there than if we weren’t there,” Cox said. The center also will house a training and a learning center in a first-floor meeting space for up to See SPECTRUM OFFICES on page 3

Geography adds to talent challenges for northwest Michigan manufacturers

Cannabis startups seek entry to market outside of retail

Education/Talent Development Contract Deadline: 8.18.2021

9.13.2021

Family Business

9.27.2021

INSIDE:

Utilities & Energy

Cannabis Cannabis Roundtable

Contract Deadline: 9.15.2021

10.11.2021

Real Estate: Industrial

INSIDE:

Mergers & Acquisitions PAGE 7

8.30.2021

Contract Deadline: 9.1.2021

Solar industry on edge

Contract Deadline: 8.4.2021

West Michigan cities weigh policy changes to bolster affordable housing

New chapter for Chapter 11

Automotive Supplier Outlook Commercial Lending Quarterly: Growth Lending Update

Experts seek federal guidance as employers offer COVID-19 vaccine incentives

8.16.2021

Also Inside: n Craft beverage roundtable, page 11 n Suppliers see highs and low in pandemic, page 12 n Group seeks affordable health plans for craft beverage workers, page 13

8-story Spectrum Health development to ‘breathe more life’ into GR district crucial funding and

Cybersecurity standards to reshape defense manufacturing

Contract Deadline: 7.21.2021

PAGE 9

APRIL 12, 2021 • VOL. 33/NO. 13 • $3.00

Contract Deadline: 9.29.2021

SEE PAGE 16

10.25.2021 Cybersecurity

Contract Deadline: 10.13.2021

11.8.2021

Education/Talent Development Contract Deadline: 10.27.2021

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