MiBiz June 7, 2021 print edition by MiBiz

Arts group pilots new biz model to reach public

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‘We have to go small’

GR startup finds purpose with urban air quality mapping

Public health officials shift to a distributed approach to ensure COVID-19 vaccination rates continue to grow By MARK SANCHEZ | MiBiz msanchez@mibiz.com

n the nearly four months between late January and May this year, the West Michigan Vaccine Clinic at DeVos Place administered more than 230,000 COVID-19 vaccine doses. The mass clinic in downtown Grand Rapids significantly helped drive Kent County’s vaccination rate to 54 percent of eligible residents fully vaccinated and 60 percent partially vaccinated when it shut down last month, according to county officials.

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hen Darren Riley graduated from Carnegie Mellon University in 2014, he took with him in-demand skills rooted in software development and cybersecurity. After a couple of years applying those skills as a cyber risk consultant for professional services giant Deloitte, he quickly learned that corporate America was not for him. “I was really at the intersection of how we bring technology to tackle some systematic issues and solve problems near and dear to my heart,” Riley said. That is exactly what R i le y is at tempt i ng to do with his Grand Riley Rapids-based startup Rapids Air Quality LLC. The company, co-founded with James Meeks and Hasib Ikramullah, is working to operationalize the concept of mapping cities with a series of air quality sensors. Rapids Air Quality deploys a network of sensors and feeds the data to its dashboard to create an in-depth map that allows users to get an accurate snapshot of the air quality in individual neighborhoods. Through a partnership with Downtown Grand Rapids Inc. (DGRI), Rapids Air Quality is wrapping up a full deployment in downtown Grand Rapids, which will serve as a proof of concept for the new business. Meanwhile, Riley and his team look to quickly expand by working with their networks in both Detroit and Chicago. “We’re starting out with the first launch and we’re learning how we can do better and how we can be better stewards of the data to the partners we work with,” Riley said. See RAPIDS AIR QUALITY on page 3

Now that the DeVos Place clinic has shut down operations becasue of slower demand and given that vaccine doses are far more readily available, the Kent County Health Department has been altering course to achieve a 70 percent vaccination rate among residents. “The strategy right now is to continue putting vaccines where people are already at and where they go on a regular basis,” said Dr. Adam London, director of the Kent County Health Department. “During the last four months, we knew that the demand was so high that people See VACCINE STRATEGY on page 8

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Short-term rental bills draw concern from local officials, housing advocates By KATE CARLSON | MiBiz kcarlson@mibiz.com

ocal officials and affordable housing advocates in Michigan have been vocally opposed to legislation that would make short-term rentals a permitted use in all residential zones. Until now, some local governments have banned or severely restricted the use of shortterm rentals made popular through sites like Airbnb and Vrbo.

Bills working their way through the state House and Senate would amend the Michigan Zoning Enabling Act and take away local governments’ ability to impose certain regulations on short-term rentals. Senate Bill 446 is sponsored by Sen. Aric Nesbitt, R-Lawton, and House Bill 4722 is sponsored by Sarah Lightfoot, R-Springport. The legislation defines a short-term rental as the rental of a single-family home, a oneto four-family home, or any unit or group of units in a condominium, for no more than 30

days. Under the legislation, short-term rentals would be considered a residential use and exempt from special or conditional use permitting. Some municipalities have banned or capped the number of property owners who can rent out their home on a short-term basis in specifically zoned areas. Other local regulations have included buffer zones between shortterm rentals and requiring additional layers of inspections. See SHORT-TERM RENTALS on page 18

Michigan kombucha brewers scale up with demand PAGE 19

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RAPIDS AIR QUALITY

Continued from page 1

On a mission R i ley ca me to Mich iga n i n 2015 a nd has remained active in the state’s entrepreneurial scene as a manager at Endeavor Detroit, a network of business leaders that mentors and accelerates startups in Michigan and throughout the Great Lakes region. Riley attributed the connections made through Endeavor Detroit, and eventually Grand Rapidsbased entrepreneurial support organization Start Garden Inc., for plugging him into the Grand Rapids community. With a simple core mission that all residents of a city are entitled to clean air, Rapids Air Quality formed in April of last year with Riley and his partners currently serving as the only employees in the company. The company could pursue a round of seed funding toward the end of the year, with a target of $1.5 million to $2 million, depending on how it hits its milestones, Riley said. Meanwhile, the founders are working to build a business model around their service. The full-service model being deployed in Grand Rapids allows cities, nonprofits and corporate donors to subsidize the project implementation and ensuing services. Still, Riley sees value in providing air quality data to various stakeholders once a city has been fully mapped. Those stakeholders may include nonprofits focused on erasing the inequalities associated with low-income areas of a community to socially conscious businesses that want to protect the areas around their production plants. “Once we have a whole city, there is a business model where we can package data for certain stakeholders and extract from that pool,” Riley said, adding that the company can provide context around air quality information so interested parties can fully leverage the data. “For us, it’s about engaging stakeholders where they are at a neighborhood level and educating folks around the community to make the data valuable,” Riley said. “What I mean by valuable is they understand the reading and understand what it means to their families … and to make sure those users are recipients of the data and the services that come after the data.” Darel Ross, a director with Start Garden, highlighted Rapids Air Quality’s intention to make

genuine connections within the communities it serves. “From a personal standpoint, I am always intrigued by female- and minority-owned tech startup entrepreneurs because usually they’re using and applying tech in a way that’s solving problems that other people aren’t looking for,” Ross said. Ross also noted the way Rapids Air Quality presents data can be used as a competitive advantage for cities and municipalities. “We do see a day where, when you go to book your flight to go somewhere, you can also track the air quality of that area where you’re going,” Ross said.

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Rapids Air Quality’s devices for testing air quality in Grand Rapids. COURTESY PHOTO

A boost to business Last month, Rapids Air Quality gained access to a trove of resources when it was selected for Accelerate Incubation, a program hosted by mHUB, a Chicago-based hardtech and manufacturing innovation center. Rapids Air Quality was one of just nine startups accepted into the inaugural cohort for the six-month, hands-on accelerator that focuses on hardtech product development and commercialization. Along with the resources available through the program, mHUB issued Rapids Air Quality a $75,000 simple agreement for future equity (SAFE) note, which is convertible for equity in the company. mHUB features one of the nation’s leading prototyping facilities. Through the program, Rapids Air Quality can explore what type of application-specific sensors it will need for deployments and then work to create them. As of now, Rapids Air Quality uses off-the-shelf sensors, fastening them to light poles throughout a city. “(Rapid Air Quality’s) philosophy is gamechanging and the challenge now is how can you build such an infrastructure,” said Thierry Van Landegem, executive director of mHUB’s accelerator program. “What is the technology you need? Can you just take off-the-shelf sensors and put them everywhere? The answer is probably no; that would come with exorbitant costs. So, how can technology build something that is deployable and at a cost-efficient manner? What is that business model? Those are exactly two areas that we look at in the program.” Van Landegem said mHUB’s selection committee considered startups’ ability to solve social issues as it combed through nearly 500 submissions. “The really disruptive idea is how can we now build an infrastructure that is at the neighborhood level — the community level — to get a much clearer

and finer idea of what air quality is so we can think about how to use the information we capture,” Van Landegem told MiBiz.

Grand Rapids benefits Rapids Air Quality plans to wrap up its deployment in downtown Grand Rapids this month. DGRI funded the project, which Riley and his team completed at their cost. While the DGRI staff will be able to access the dashboard and its information a week after the deployment, it will need a full year of data to draw any sort of conclusions, said Marion Bonneaux, DGRI’s data and information specialist. “From my perspective, information like this is really only useful in its own context,” Bonneaux said. “We will be able to monitor overall changes as well as notice the impacts we’ve made year over year related to projects in development around downtown, changes we make to transit and the options people have to traverse our city, and of course our engagements in and around the river as those projects start to kick off.” Bonneaux also said that this information helps Grand Rapids grow in an environmentally smart way. She encouraged additional neighborhoods and community partners to join the program and steadily expand the information system. “Integrating real-time information on air quality will bolster our knowledge-based approach for more daily operations, such as event planning and reporting, environmental studies and development decisions, but its primary goal is to grow our datainspired approach to policymaking and advancements for our community,” she said.

BIZ BRIEFS A recap of recent stories from MiBiz.com.

West Mich. hotel stays expected to pick up as biz travel lags West Michigan tourism officials are reporting upward trends in travel and hotel stays as COVID-19 restrictions lift, and leaders are optimistic about the local tourism economy for the rest of the summer. So far this year, Kent County has seen month-tomonth gains in hotel stays, sa id Experience Grand Rapids President and CEO Doug Small. March 2021 ended w it h a n average occupancy rate across Kent Visit www.mibiz.com

county of 40 percent, almost 10 points higher than the previous month, Small said. “Our leisure travel is not what it’s been in the past, but it’s picking up,” Small said. “Amateur sports are picking up as well. We just don’t have business travel back.”

Whitmer creates statewide office for internet infrastructure Gov. Gretchen Whitmer recently announced the creation of a statewide office that will coordinate efforts to make high-speed internet

service more accessible and affordable in Michigan. Part of the Michigan Department of Labor and Economic Opportunity, the Michigan High-Speed Internet Office is responsible for “convening and coordinating departments and agencies in the advancement, implementation, and funding of the state’s current and future efforts to ensure that every home and business in Michigan can access highspeed internet services that meet their needs,” according to Whitmer’s executive order. A dedicated state office on high-speed internet access

“will help ensure these efforts are as coordinated, focused, and effective as possible,” the executive order states.

Cyberattack disrupts meat supply chain, Plainwell facility reopens The meat supply chain is bracing for potential fallout from a disruption in production as the world’s largest meat producer rebounds from a devastating cyberattack. JBS S.A., a Brazilian meat processor that supplies 275,000 customers worldwide and operates facilities

in 20 countries, altered its production schedule last week after a cyberattack brought down its systems. This included a complete shutdown of many North American plants. The company reported to national media outlets that production would resume last week at most of its plants, but did not indicate when it would return to full capacity. The JBS plant in Plainwell, which employs more than 1,200 people, was among the facilities that closed last week but would reportedly resume full production in a few days.

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 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 Senior Advertising Consultant Shelly Keel / skeel@mibiz.com Sales & Marketing Associate Lauren Frailey / lfrailey@mibiz.com Director, Finance & Administration Tarah Buchan / tbuchan@mibiz.com

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Holland startup Wedge grows quickly through pandemic, leverages video for talent recruitment By JAYSON BUSSA | MiBiz jbussa@mibiz.com

s an entrepreneur, Matt Baxter acknowledges that opportunities like the one in front of him rarely come along. “There aren’t many moments where not only is the product valuable but the team is right, there is funding behind it and the timing could not be better,” said Baxter, CEO of Competitive Wedge LLC, a one-way video interview platform designed to streamline recruiting. “It’s literally no one else’s fault if we fail.” The last 15 months of the COVID-19 pandemic haven’t slowed the Holland-based startup’s hyper-growth journey. If anything, the pandemic fueled growth as Wedge built out its team and capitalized on working with clients that encountered a hiring surge. Wedge has raised $2.6 milBaxter lion to date. After closing on an initial round of $1 million in July of 2020, the company raised an additional $1.6 million in less than a year from both new and existing investors. Baxter brought on recruiting industry veteran Theo Rokos as Wedge’s new president earlier this year as the company expanded both its sales and growth teams. Rokos previously served as chief revenue officer at Job.com and was the co-founder and former CEO of video interviewing competitor GreenJobInterview LLC. With virtually every professional industry facing talent and recruiting needs coming out of the pandemic, Wedge is aiming for fast growth. “From the beginning, we have said, ‘Let’s grow this thing as fast as we possibly can,’” Baxter said. “Obviously getting a startup off the ground has its (share) of things taking longer than you expect. Before the pandemic, we were geared up to grow like crazy. Then, the pandemic was fuel on the fire.”

“We’re fast-growing, there is attention on us, and we’re up-to-date tech right now, but we have to make sure that continues to be the case.” EASTMUSKEGON.COM

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— MATT BAXTER CEO of Competitive Wedge LLC

Diverse hiring needs Throughout the pandemic, Baxter found that companies encountered talent dilemmas in three different ways: Laying off existing employees, freezing hiring, and some that were forced to ramp up hiring. This included industries related to supply chains and logistics. Wedge found opportunity in working with those businesses that saw a surge in hiring. As the U.S. lifts out of the pandemic, the company is ready to help the other industries hire and rehire their workforces. Many of those empty positions are hourly workers. Baxter contends that Wedge streamlines the process by eliminating the time-consuming phone screening process that leads to the in-person interview. “You’re just trying to make sure the candidate shows up and if they can have a reasonable conversation and then move them to (the) in-person (interview),” Baxter said. “We can remove that whole thing and cut your time in fractions and then get to that in-person. Absolutely, I think in-person interviews are important.” According to Baxter, Wedge’s work with a trucking company underscores its potential to help companies looking to hire hourly workers en masse. “Every hourly worker doesn’t need to put on a suit and tie and go into a formal interview,” Baxter said. “Being able to do a quick pre-screening by video and have it sent over to the hiring manager makes for a really great candidate experience. The same thing applies for retail and manufacturing.” Still, Wedge is competing among plenty of heavy hitters to connect some of the 16 million unemployed Americans with their next job. This includes ZipRecruiter Inc., which recently went public using a direct listing. The recruiting giant uses artificial intelligence to connect employees with jobs for which they’re qualified — the user doesn’t have to formally apply. Solutions like Wedge use video. The competition puts pressure on Wedge to stand out in the market, which Baxter says is accomplished with a user-friendly interface that seamlessly integrates with other application tracking systems (ATS). “We’re fast-growing, there is attention on us, and we’re up-to-date tech right now, but we have to make sure that continues to be the case,” Baxter said.

On the cutting edge Steve Lowisz has been involved in the same space as Wedge for more than two decades as the CEO of Livonia-based talent research and recruiting firm Qualigence International Inc. Lowisz invested in Wedge in the most recent round of fundraising. As someone who keeps his finger on the pulse of the industry to keep his own business competitive, Lowisz saw Wedge on the cutting edge of the industry. “The résumé is outdated in my opinion,” Lowisz said. “You get a heck of a lot more value by sitting across from somebody and watching them as they answer questions and talk about themselves. To do it in volume and in scale … leveraging video to do that, I think is absolutely the wave of the future.” In fact, Lowisz said he has interacted with companies that are experimenting with doing away with traditional résumés completely and using only video. “You’ve got to give a guy like Matt a lot of credit,” Lowisz said. “This was kind of his brainchild, but he made the call to go out and get a (president) like Theo, who has a lot more experience and success. You don’t see a lot of startups do that unless they are forced to, and he wasn’t really forced to.” Visit www.mibiz.com

FINANCE

Sleeping Giant Capital marks first year with investment, developing students By MARK SANCHEZ | MiBiz msanchez@mibiz.com KALAMAZOO — The Western Michigan University management professors behind an investment fund that looks to cultivate and support a new generation of entrepreneurs hope to complete fundraising by the end of 2021. Sleeping Giant Capital LLC recently closed on $21 million raised from investors toward a $50 million goal for the Sleeping Giant Capital Principled Impact Fund I LLC that will back entrepreLepisto neurs trained at WMU who want to buy and run their own company. The fund is gaining awareness as fundraising continues to secure additional investors, Managing Partner Doug Lepisto said. “I feel good. We’ve had a positive start on our fundraisMcIver ing,” Lepisto said. “There’s a lot of promising conversations that we’re having and I think there’s real enthusiasm from the business community, Western (Michigan University),

alumni, and sellers around our model. We’ve made a lot of progress and (there’s) a lot still to do.” Lepisto formed Sleeping Giant Capital in the summer of 2020 with Derrick McIver. Both are associate professors of management at WMU’s Haworth College of Business and co-directors at the university’s Center for Principled Leadership and Business Strategy. Fundraising has progressed as planned despite starting in the “very uncertain environment” of the COVID-19 pandemic, Lepisto said. The social impact aspect and the fund’s unique focus have been a selling point that’s drawn interest from prospective investors who are increasingly looking for more than a financial return, according to the founders. “Whether it’s sellers, investors, alumni, business executives or community partners, we have been amazed by the enthusiasm for the innovative and purpose-driven approach of this fund,” McIver said. “Investors today require both attractive returns and true social impact. We see these two elements of our approach as mutually reinforcing. This first close demonstrates investor confidence in our vision and ability to execute.”

with $1 million to $10 million in annual revenue, although “we have looked at things that are lower, (and) we have looked at things that are bigger,” Lepisto said. The fund operates with a purpose beyond generating financial returns. Investments will support prospective owner/operators who go through an eight-week program, known as Acquire, that the Haworth College of Business launched last fall. Acquire trains WMU masters of business administration students and experienced business professionals to become owner/operators. Acquire graduates can apply to go through a process where they are offered data, resources and connections to search for a company to buy and run. They can then qualify for financing through Sleeping Giant Capital to finance an acquisition. Sleeping Giant executives say both the fund and Acquire have received strong interest since they were formed. Acquire’s inaugural cohort earlier this year was sold out, and the program has a list of 40 to 50 people who are interested in participating in the next cohort planned for this fall.

Supporting students

Starting investments

Sleeping Giant Capital Principled Impact Fund targets equity investments toward small businesses primarily based in West Michigan and generally

The fund also recently made its first investment — in Chicago-based industrial sales company LineDrive, which was acquired by WMU alumnus Michael

Abdella — after looking at more than a hundred prospects. Lepisto expects the fund to close one more deal in 2021. Sleeping Giant Capital will probably make two or three investments a year, he said. The partners will direct investments primarily toward companies based in West Michigan with up to 20 percent of the investments going to firms outside of the region. “Whenever there is an opportunity for the investment to increase in value through bringing it to West Michigan and we can create more jobs and activity here, we would always be interested in that option,” Lepisto said. Sleeping Giant Capital Principled Impact Fund I has attracted investors who are high net worth individuals and from family offices, and has received “interest in conversations” from foundations and other institutional investors, Lepisto said. The fund has a long-term focus and could hold companies for several years, perhaps indefinitely, with the owner/operator ideally buying out Sleeping Giant Capital’s position. Volatility in the stock market, low interest rates and the emerging risk of inflation plays into Sleeping Giant’s favor as the fund seeks additional investors through 2021 who have interest in an alternative investment option. “We’re definitely a different asset class and our long-term focus and patient focus is something that folks are interested in,” Lepisto said.

FROM VISION TO REALITY: GRAND RAPIDS INNOVATION PARK Grand Rapids is teeming with innovative people and companies. Young professionals recognize the city as the ideal jumping off point for their careers. Entrepreneurs see the tremendous value in leveraging the ample resources available to bring their ideas to life. And along the Medical Mile, which encompasses an expansive stretch of Michigan Street east of the Grand River and just south of Interstate 196, groundbreaking research is transforming the healthcare industry. It’s no surprise that Michigan State University (MSU) chose the Medical Mile as home base for their College of Human Medicine at the Secchia Center. That decision kickstarted the real estate development efforts that have led to the genesis of the Grand Rapids Innovation Park (GRIP). GRIP is a healthcare innovation hub that encompasses the Grand Rapids Research Center, Doug Meijer Medical Innovation Building (DMMIB) and 430 Monroe Avenue, which will become home to Perrigo Company plc’s new North American Corporate Headquarters after construction is completed in 2022. The vision for GRIP is grand: Generate an environment in which a variety of industries – education, healthcare, hospital systems and private industry – can collaborate to license, manufacture, distribute and commercialize health innovation with speed to market. Achieving such a bold vision requires the perfect partner along with a bit of ingenuity. From the onset, Mike Mraz, president of real estate development at Rockford Construction,

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knew his team could provide the level of expertise and service needed to make GRIP a reality. “In terms of the delivery model and our comprehensive platform, which includes real estate development, financing, construction and property management services, we were completely confident in our ability to bring this to life,” Mraz said. Recognizing the complexity of the work, Rockford helped form Health Innovation Partners (HIP), a real estate development joint venture (JV) between Rockford Construction/Rockford Development, Walsh Construction/Walsh Investors, Murphy Real Estate Services, Harrison Street and MSU. Collectively, the group selected a public-private partnership (P3) approach to develop the project. P3s allow public institutions, like universities, to team up with private industry partners who are well equipped to handle the significant capital outlay and allocation of risk associated with large-scale projects like GRIP. They also allow work to be completed with enhanced speed and efficiency. Without the P3, MSU may have had to engage in other efforts to finance the work, such as a longterm fundraiser. But through the expertise of HIP and Rockford, the development kicked off successfully and has been moving forward ever since. “P3s require plenty of innovation and creativity,” said Melissa Collar, Rockford’s chief counsel and vice president of strategic partnerships. “But being a thought leader is something that Rockford

has done throughout its history – give us a difficult problem and we’ll find a solution.”

will provide more than $300 million in economic impact to Kent County each year.

Beyond engaging the partners in a P3 approach to delivery, Rockford and the collective team also brought significant technical knowledge and experience to the development portion of the work. The development group successfully navigated the complex design needed to situate all three buildings within GRIP to maximize visibility. Additionally, the team was able to balance complementary architecture; appropriate floor plans; site infrastructure; mechanical, electrical and plumbing systems; and more to establish a plan for the associated buildings and facilities that won’t just attract world-class tenants, but also

Looking forward, Rockford envisions an opportunity to complete similar projects at additional sites, leveraging the power of P3s to bring advanced healthcare systems to the public quickly and with the highest level of care and quality.

rockfordconstruction.com MiBiz / JUNE 7, 2021

FINANCE

Branch acquisitions to expand Horizon Bank’s Michigan reach By MARK SANCHEZ | MiBiz msanchez@mibiz.com uying 14 offices in the central and northern Lower Peninsula from TCF Bank provides a broader stage for Horizon Bancorp Inc.’s further expansion in Michigan. The TCF offices, which collectively have $976 million in deposits and $278 million in loans, will double the Michigan City, Ind.-based Horizon Bank’s presence in the state. The branch acquisitions align “with Horizon’s strategic objective” and represents “a natural extension of our current footprint within the state of Michigan,” said Craig Dwight, chairman and CEO of parent corporation Horizon Bancorp Inc. Acquiring the TCF branches will add “attractive growth markets” of Cadillac and Big Rapids Dwight and mass in the Midland market, Dwight said in a conference call with analysts to discuss the deal.

Horizon agreed to pay $17.1 million for deposits it’s acquiring, or a 1.75 percent premium. Targeted to close by the end of the third quarter pending regulatory approval, the planned sale is part of federal regulatory approval for Detroit-based TCF Financial Inc.’s $22 billion merger into the Columbus, Ohio-based Huntington Bancshares Inc. (Nasdaq: HBAN), which is scheduled to close by June 9. Horizon Bank (Nasdaq: HBNC) expects some attrition among customers and staff after the sale closes. The bank for the first 12 to 18 months will focus on stabilizing the customer base in each of the 11 counties where the acquired offices are located and are contiguous to the 10 counties where Horizon already has offices. “After that 18-month period we’ll look at a buildout as we see it’s needed,” Dwight said. Horizon Bank has 81 offices in Indiana, Michigan and Ohio with $6.1 billion in assets and deposits of more than $4.72 billion. The bank’s 17 locations in Michigan include Grand Rapids, Holland, St. Joseph, Benton Harbor, New Buffalo, Portage, Battle Creek, Three Rivers, Three Oaks and Union.

As of June 2020, Horizon Bank had $927.1 million in deposits, according to the FDIC’s most recent annual Summary of Deposits. Future expansion in Michigan could include acquisition, Dwight said. Horizon Bank has been open to M&A in Indiana, Michigan and northwest Ohio, he said. Buying the TCF offices in Michigan “does not take us out of the M&A game,” Dwight said. “Given the talent and resources we have in place, we continue to have discussions around other M&A activity and will continue to actively evaluate potential transactions to enhance our positions within our current footprint,” he said.

Banking powerhouse TCF (Nasdaq: TCF) agreed to divest the offices to secure regulatory approval for the Huntington merger. The Federal Reserve Board of Governors and the Office of the Comptroller of the Currency approved the merger after a review by the U.S. Department of Justice’s Antitrust Division. The Justice Department required TCF to sell 13 of the 14 offices because the merger would have resulted in Huntington having a market concentration in the affected market that exceeds a 35 percent guideline, according to an order the Federal Reserve issued on May 25 approving the deal. The sale is intended “to mitigate the potentially adverse competitive effects” of the merger in those markets, according to the order. The deal between TCF and Huntington will create a Midwest banking powerhouse with dual headquarters in Detroit and Columbus.

After the merger closes, Huntington will become the 25th-largest bank in the U.S. and among the largest operating in Michigan with $170.8 billion in assets and deposits of $138 billion across its footprint. Huntington will base commercial banking operations at the Detroit headquarters, with consumer banking headquartered in Columbus. In West Michigan, Huntington will become the second-largest bank in the Grand Rapids-area market with $6.7 billion in deposits and a 20.7 percent market share. Huntington would become the thirdlargest bank in the Kalamazoo-area market with 12 percent of the deposit market, or $646 million, according to the Federal Reserve. Huntington will lead the Battle Creek area with $396.1 million in deposits, or a 33.2 percent market share. TCF’s merger into Huntington will result in the closing of 198 branch offices mostly in Michigan, including all of Huntington’s 97 branches at Meijer Inc. stores. The banks say all offices targeted to close are located near an existing branch. The planned sale of the TCF offices in Michigan represents one of the first peripheral market shifts from the merger. Executives at smaller banks have said the combination of TCF and Huntington generates opportunity for them to pick up both business and talent. “That’s definitely been an opportunity for us and there is disruption from that,” Mercantile Bank CEO Robert Kaminski said when asked about the TCFHuntington deal in an April call with analysts. Bank mergers often result in talent moving from the merged institution to another bank, as MiBiz reported earlier this spring.

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Share increase positions ChoiceOne Bank for potential acquisitions By MARK SANCHEZ | MiBiz msanchez@mibiz.com

aising the number of authorized shares by 25 percent gives ChoiceOne Financial Services Inc. greater ability to pursue another acquisition should the opportunity arise. Shareholders at the Sparta-based ChoiceOne Financial Services (Nasdaq: COFS), the holding company for ChoiceOne Bank, voted overwhelmingly at their recent annual meeting to raise the corporation’s number of authorized shares of common stock from 12 million to 15 million. ChoiceOne directors proposed and recommended Potes approval of the share increase. The corporation’s 2021 proxy statement noted “it is advisable to have additional authorized shares of

common stock available for future issuance to position ChoiceOne to be able to react quickly to strategic opportunities that may arise in the future.” The corporation could issue the shares, if needed. The additional authorized shares also could go to pay possible future dividends, equity compensation and “other corporate purposes that might be considered,” according to the proxy.

Expanding Michigan presence After two acquisitions in the last two years that tripled ChoiceOne’s size, the corporation remains open to potential future deals, CEO Kelly Potes said. “We’re interested in expanding our presence within Michigan. With good-sized offices on both sides of the state and the desire to grow, that is an option for us,” Potes said. “The desire is for the bank to grow both organically and, if possible, make acquisitions within the state of Michigan.” ChoiceOne, which dates back to 1898, wants to remain independent.

The corporation presently has more than 7.8 million shares of common stock outstanding, plus 72,907 shares reserved for issuance under various equity plans. That leaves ChoiceOne with more than 4.1 million authorized common shares available for future issuance. The corporation a year ago bought the former Community Shores Bank Corp. in Muskegon in a $21.9 million cash-and-stock deal that closed July 1, 2020, and added four offices in the lakeshore market and $245 million in assets. ChoiceOne at that time increased authorized shares of common stock from 7 million to 12 million. About 524,000 shares went to the transaction. The Community Shores Bank acquisition followed the $89 million all-stock deal for County Bank Corp. in Lapeer, the parent company of Lakestone Bank & Trust, in October 2019. Billed as a “merger of equals” because of the banks’ similar size and culture, the acquisition brought ChoiceOne another $673 million in assets and 14 offices in Lapeer, Macomb and St. Clair counties. ChoiceOne, with 34 offices in West and eastern Michigan, had $2.07 billion in assets at the end of the first quarter. As COVID-19 restrictions ease and in-person meetings ramp back up, “there’s a little more chatter out there” about bank M&A, Potes said. T he CEO of Mich iga n Cit y, Ind.-based Horizon Bancorp Inc., which is buying 14 offices that TCF Financial Corp. is divesting as part of its merger with Huntington Bancshares Inc., said in an analyst call that he sees interest in bank

“We’re interested in expanding our presence within Michigan. With good-sized offices on both sides of the state and the desire to grow, that is an option for us.” — KELLY POTES CEO of ChoiceOne Financial Services Inc.

M&A increasing, especially with the potential for federal tax code changes. “We all are hearing that discussions are taking place and the conversations are increasing,” Horizon Chairman and CEO Craig Dwight said. “There has definitely been a pickup in conversations between bank CEOs and bank chairmen, as well as investment bankers.” One of t he latest t ra nsact ions in West Michigan was St. Joseph-based United Federal Credit Union’s acqu isit ion of t he for mer Edgewater Bank that closed in April.

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HEALTH BIZ VACCINE STRATEGY

Continued from page 1

were going to go wherever the vaccine was available. That’s why DeVos Place made so much sense for us,” London added. “We’re past that now. The theme now is to make the vaccine available where people are already going.” That’s now the general strategy in many communities. More than five months after vaccinations started in December, health departments and health systems say reaching the 70 percent vaccination rate to achieve herd immunity requires evolving strateBasser gies and tactics as vaccination rates slow. Rather than rely on largescale clinics, health departments and health systems now focus primarily on getting people vaccinated at physician offices, hospitals or pharmacies, and working with churches, schools, community organiJameson zations, employers and even summer events and festivals. Mercy Health, for example, will have a presence at the annual Seaway Run that it sponsors in Muskegon on June 26. The Ottawa County Department of Public Health set up a tent at the Tulip Time festival in Holland in May to Wieghmink offer vaccines. The department provided 125 single doses of the Johnson & Johnson vaccine. The focus on smaller “pop-up” clinics aims to reach “pockets in the community where we can help fill the need,” Ottawa County Public Information Officer Kristina Wieghmink said. The Ottawa County Department of Public Health no longer operates a large clinic at the Holland Civic Center and for now still runs a vaccination site with Holland Hospital at Grand Valley State University’s Holland campus for second doses. The Department of Public Health also partners with employers for workplace vaccination sites, as well as with organizations that serve people who are homebound, Wieghmink said.

Branching out Health departments hope to get as many people vaccinated during the summer as possible to help meet the 70 percent goal. “We’re really focusing on accomplishing as much as we can before the fall and before the school year starts back up again. Having more inside activity is going to be an opportunity for the virus to spread more quickly, so we want to try to make sure that we combat that before fall,” Wieghmink said. Spectrum Health in May began offering vaccines at more than 60 outpatient urgent care and convenient care centers and physician offices across 13 counties. The Grand Rapids-based health system last week also started to offer vaccines at workplaces with employers, said Chief Operating Officer Brian Basser. “It’s a much more distributed approach and a much more targeted approach. It’s leveraging established infrastructure,” Basser said. “It’s really

JUNE 7, 2021 / MiBiz

The Ottawa County Department of Public Health’s pop-up COVID-19 vaccination site at this year’s Tulip Time festival in Holland. COURTESY PHOTO

meeting the patients where they are and recognizing the important relationship that occurs between a physician and their patients. We know that there is a real challenge with hesitancy and that people have questions, and connecting with their medical provider is perhaps the most effective way to overcome that hesitancy and get their questions answered.” At its 14 hospitals, Spectrum Health offers a vaccine to any unvaccinated patient when they are discharged as an inpatient or from an emergency room visit, Basser said. The health system has been scaling down operations at a vaccine clinic on 60th Street, where it’s only doing second doses and has provided more than 58,000 vaccinations. Spectrum Health continues to operate a drive-up vaccine site at 1300 Michigan St. NE in Grand Rapids. Mercy Health also offers vaccines to hospital patients and is now moving vaccinations into primary care physician offices in Kent, Ottawa and Muskegon counties. “Many of the Grand Rapids offices are vaccinating or will be vaccinating within the next few weeks and we’ll follow suit in the Muskegon, Grand Haven and northern network offices,” said Judy Binns, vice president of clinical services at Mercy Health Physician Partners. Dr. Andrew Jameson, regional medical director for infection control at Mercy Health Physician Partners, said getting another 10 to 15 percent of the population vaccinated will require locations that are smaller and lower volume, but may offer more convenience for unvaccinated people than going to a large clinic. “We have to go small,” Jameson said.

Incentivizing shots Mercy Health also now provides vaccines at workplaces and wants to partner with businesses such as retailers or entertainment or sports venues on perks such as tickets to an event or gift cards. “Those are some of the next steps to really incentivize people that may not be willing to (get vaccinated) but are now,” said Jameson, who notes

“good, old fashioned bribery” may prove necessary for some people to get vaccinated. Mercy Health still operates vaccine clinics at an office building at 44th Street and Kalamazoo Avenue in Kentwood, and a Shape Corp. office in Spring Lake. Soon, both clinics will only offer second doses. In Ottawa County, the Department of Public Health has been encouraging employers to offer employees incentives to get vaccinated through added paid time off or a gift card of perhaps $100, Wieghmink said. Federal laws allow employers to offer workers incentives to get vaccinated as long as the incentives are not “coercive,” according to updated guidance the U.S. Equal Employment Opportunity Commission (EEOC) issued May 28. Sizable incentives could make employees feel pressured to disclose protected medical information as they answer disability-related screening questions before receiving a shot. Employers also may require workers to get vaccinated to enter the workplace, “so long as employers comply with the reasonable accommodation provisions” of the Americans with Disabilities Act, according to the EEOC.

Access challenges In Kent County, pivoting from large-scale clinics means getting out more into Grand Rapids’ urban core and rural townships where vaccination rates are the lowest, London said. Six rural, northern townships and high-density neighborhoods in the city of Grand Rapids have the lowest vaccine rates in Kent County and are below 50 percent in some areas, London said. Communities such as East Grand Rapids, Walker, Ada and Cascade have the highest rates that reach 70 to 80 percent or more, he said. The low rates could stem from access issues. Rural communities don’t have the same density of clinics and available pharmacies as suburban communities, London said. Political views toward the vaccine have also played into the lower vaccination rates in those rural townships, he said.

In the city, some urban neighborhoods lack pharmacies that provide vaccines and there remains a lingering resistance to the vaccine from the historical lack of trust and skepticism some people of color have toward the health system, London said. To overcome that reluctance, health departments have worked to partner with physicians, pastors, local business leaders and organizations that people trust. Doctors are “the No. 1 trusted source from anybody” for encouraging people to get vaccinated, Wieghmink said. Reasons people cite for not getting vaccinated range from a lack of trust of vaccines or the health system, to a lack of easy and convenient access, according to London. Survey data indicate that 20 to 25 percent of people in Kent County are willing to take time to get a vaccine, but “they’re probably not willing to spend a lot of time or take a lot of special effort to go and pursue a vaccine, London said. “They’re willing to take it if it’s brought to them and it’s made incredibly convenient, but they’re probably not going to make a special trip anywhere,” he said. “That’s why it’s important to get it into pharmacies and provider offices and it’s important to have it available in small clinics throughout the community.” The Kent County Health Department has been considering working with employers and offering vaccines at the workplace. That’s an option that was not previously workable, as the health department and partners — Spectrum Health and Mercy Health — dedicated staff to the DeVos Place mass clinic that offered scale, efficiency and the capacity to do thousands of vaccinations a day when demand was high. The Kent County Health Department is looking at coordinating workplace vaccinations through a regional collaborative that can match requests with providers, London said. “Now we’re dealing with this portion of the population that might not go to a pharmacy or a clinic specifically for a vaccine, but they might do it if it’s in the cafeteria or the break room at work,” London said. “We are kicking the tires on that idea once again.” Visit www.mibiz.com

Kalamazoo startup’s medical device fills unmet needs for diabetic patients By MARK SANCHEZ | MiBiz msanchez@mibiz.com KALAMAZOO — A Kalamazoo startup seeks to raise $5.1 million over two capital rounds to commercialize a treatment for diabetic foot ulcers that cost billions of dollars annually to treat in the U.S. Adlore Inc.’s SenLore therapeutic boot combines heat and electrical stimulation to improve blood flow and heal wounds from foot ulcers. Sensors embedded in the boot’s insole monitor a patient’s blood flow in the foot. A Wi-Fi connection can remotely monitor progress, while the device Lawson alerts a doctor if a patient experiences reduced blood flow that hinders healing. P re s e nt l y b a c k e d by $500,000 raised from convertible notes issued in 2020 that paid to develop a prototype and conduct a pilot study, Adlore now wants to raise another $2.5 million in a Series A capiThomssen tal round to complete development on a final product design. A follow-up $2.6 million Series B capital round would pay for a clinical study needed to generate data

when seeking regulatory approval from the U.S. Food and Drug Administration. That could lead to selling the intellectual property and an exit for investors by the end 2023, although Adlore could take SenLore to market on its own if it’s unable to find a suitable buyer, said President and CEO Eli Thomssen said. The company has “been getting a lot of irons in the fire” and attracting interest from prospective investors, Thomssen said. “This is an unmet medical need,” he said. “People recognize this is a problem and it’s in need of a better solution than what we have had.”

Unmet need In developing SenLore, Adlore looks to tap a massive $327 billion annual market in the U.S. for treating diabetics, $11 billion of which goes to treat foot ulcers that can lead to an amputation. More than 8 percent of the U.S. population, or 26.8 million people, are diabetic and a quarter of the diabetic population will develop a foot ulcer at some point in their life. One in five diabetics will get will get a moderate to severe infection and undergo amputation, according to data in an Adlore investor presentation. SenLore can enable foot ulcer patients to receive treatment and allow physicians to remotely monitor their progress at home or a care center and intervene quickly if their condition deteriorates. “The idea is that we can monitor these wounds every day so we don’t have to wait,” said Daryl

Lawson, Adlore’s chief scientific officer. “A physician or a wound clinic can see the blood perfusion in the foot every day and then be notified if it goes significantly down and call in someone right away.” The remote monitoring also can help compliance in a patient’s use of the device, said Lawson, an associate professor at Western Michigan University’s Department of Physical Therapy who has expertise with wound management, electrophysiology and orthopedics. SenLore’s cost-saving potential within the Medicare market for senior citizens who develop a foot ulcer is “huge,” Lawson said. Treating a diabetic foot ulcer costs an average of $12,858, according to the National Center for Biotechnology Information, a part of the National Institutes for Health. Four in 10 foot ulcers recur within a year. Nearly two-thirds recur within five years, according to a 2017 study published in the New England Journal of Medicine that Adlore cites in its investor presentation.

Matching telehealth growth Adlore prepares to commercialize SenLore amid a greater use of telemedicine that has grown exponentially during the COVID-19 pandemic and can lead to the potential market acceptance, Lawson said. “It’s greeted now much more with open arms,” he said. “Physicians are getting paid for it and on the other end the patients trust it much more now,

Adlore Inc.’s SenLore therapeutic boot that’s meant to improve care for diabetic patients. COURTESY RENDERING

where five years ago I don’t think that was the case. It wasn’t as accepted.” Estimating a $3.2 billion U.S. market potential for SenLore, Adlore projects sales of up to $9.2 million in the first year on the market in 2024. Sales could quickly grow to a projected $150.8 million by 2028. The company would target sales to podiatrists, wound care clinics, endocrinologists, vascular surgeons, and family practitioners. “I think with the cost savings, the telemedicine and the efficacy of how this will work with healing a wound, it has great, great potential,” Lawson said.

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 / JUNE 7, 2021

SMALL BIZ

New community supported arts program breaks down barriers between artists, public By JOSH SPANNINGA | MiBiz jspanninga@mibiz.com

The owners of Beacon Corner Bar are preparing to open the casual seafood restaurant concept in downtown Grand Rapids later this year. PHOTO BY KATE CARLSON

San Chez, ROAM owner resumes plans for casual seafood restaurant in downtown GR By KATE CARLSON | MiBiz kcarlson@mibiz.com GRAND RAPIDS — Cindy Schneider was ready to apply for a small business loan in March 2020 to open a new restaurant in downtown Grand Rapids when COVID-19 put her plans on hold. More than a year later, Schneider has resumed work on renovations and completing the menu for the casual seafood restaurant Beacon Corner Bar, which is expected to open later this year. Beacon Corner Bar will be located in the same building as one of Schneider’s other restaurants, San Chez Bistro, at 38 W. Fulton St. “We’re going to have some fun and introduce Grand Rapids to casual dining seafood,” Schneider told MiBiz. “No white linens, we’ll have rolled out paper. We have some really great recipes and have some really talented chefs.” Securing financing for a new restaurant concept during the pandemic was challenging, but Schneider — like many small business owners — had picked up the skill of applying for COVID-19 relief loans for her two other restaurants, San Chez Bistro and ROAM by San Chez. Locating Beacon in the same building as San Chez Bistro will also mean less overhead costs than typically come with opening new restaurants, she said. Beacon Corner Bar, which will seat about 100 people, was halfbuilt with all of the kitchen equipment purchased before the industry came to a grinding halt in early 2020, Schneider said. “We restored a lot in the building and have the original tin ceilings, doors and windows, and were able to restore half of the wooden floor,” Schneider said. “It’s an amazing corner in downtown Grand Rapids. We’re excited to have people walk in, see it and enjoy something they probably haven’t had the chance to in this community before.”

JUNE 7, 2021 / MiBiz

Grand Rapids-based Maxam Architecture PLLC and Pinnacle Construction Group Inc. are working on the renovations. Schneider was raised in Long Island, N.Y., which is providing inspiration for the menu with popular coastal fare like seafood boils and clam bakes. She also plans to have a New York-style pastrami sandwich and a selection of chowders on the menu. Schneider is aiming for a September opening — around ArtPrize 2021, which is scheduled from Sept. 16 to Oct. 4 — as renovations, menu development and staffing proceed as planned. “We have been talking a little bit about a ghost kitchen and doing seafood boils out the door — we’ll see,” Schneider said. “It’s been such a long haul with Beacon, but we’re in no hurry. There are usually more variables you have to deal with when it comes to opening a new place, but we don’t have a lot of that; this is really a remodel for us.” Staffing also remains an ongoing challenge for Schneider at her two current restaurants as well as Beacon Corner Bar. She is piloting a program in which employees are given a $300 paycheck bonus if they are fully vaccinated and work at least 30 hours per week at any of the restaurants. “What we need is to take the people that we have and get them to work 30 hours,” Schneider said. “If we had that, we would not have a job crisis. We hope that inspires other people in the business to work for us, too, because that’s a really great incentive.” Schneider previously operated San Chez Cafe in the future Beacon space. The cafe merged with San Chez Bistro in 2015 to accommodate space. “Once we knew the Residence Inn project was coming across the street, we decided that real estate wasn’t being used to its full potential, which is when we came up with the Beacon Corner Bar,” Schneider said.

rt collecting is often seen as only accessible to people willing to invest substantial funds, and an activity generally reserved for the extremely wealthy. In an effort to combat this stereotype and make the process of collecting art more accessible to the general public, Grand Rapids-based Avenue for the Arts LLC has put together its first-ever Community Supported Art (CSArt) program. The program is based on the Community Supported Agriculture (CSA) business model in which community members purchase shares from local farmers, who in turn supply the purchaser with a designated portion of their crop over time. Instead of produce, the CSArt Trebellas program provides the purchaser with a small collection of artwork from local artists. Avenue for the Arts Director Zachary Trebellas says he was inspired by similar CSArt programs in dozens of cities across the U.S. and Canada. “I thought, ‘OK, Grand Rapids isn’t on that map. Let’s bring that idea here if it’s something that’s really working across the country,’” Trebellas told MiBiz. The COVID-19 pandemic helped Trebellas advance the idea after it became apparent that both local artists and community members would greatly benefit from the program. “The public and artists were interacting less than ever as everyone was interacting less, so I thought that this would be a good opportunity to sort of reconnect local artists with the general public,” he said, adding that the model has the potential to reach people who don’t typically visit art fairs or galleries. “I’ve lived here for six years and I’ve seen how difficult it is for the general public to find and buy art locally.”

How it works The first shares became available for purchase on June 3. For its inaugural CSArt program, Avenue for the Arts is offering a full share consisting of nine pieces of art from nine different local artists for $300. The program also offers a fraction share option for three works of art for $100. Each option can be purchased directly through Avenue for the Arts’ website, which also features samples of the artists’ works.

Prints by artist Snicka that are featured in Avenue for the Arts’ new CSArt program. COURTESY PHOTO Avenue for the Arts issued an initial call for artists this past winter and received applications from 25 local artists. A jury that included an art professor, muralist and the owner of a local screen printing shop selected nine artists who would provide a variety of mediums and styles. “They spent an afternoon looking at the 25 and trying to decide not only who could successfully do this project, but also what nine artists would work well together,” Trebellas said. “If someone were to receive work from nine artists, you don’t want nine screenprints of nature or something. They tried to pick to allow variety and quality.” The selected artists include two photographers, a painter who specializes in miniature watercolors, a ceramicist, multiple illustrators and printmakers, and an artist who creates cyanotypes. The idea was to include works that are enticing to a diverse audience. In addition to receiving the artwork, CSArt shareholders will also be invited to events where they can interact with the artists who made the work. This again mirrors the more common CSA program in which purchasers pick up their produce directly from the farm they are supporting.

Increasing artistic freedom While the CSArt program benefits the general public by making art collecting easier and more affordable, it also benefits the artists with guaranteed payments up front. “Over half of the money made goes straight to the artists,” Trebellas said. “Each artist was paid $1,000 to make 50 artworks, which isn’t really a lot when you think about it. They have to be pretty economical with that.” Shares became available for purchase on June 3, and all artwork is to be completed by July. The first CSArt pick-up event is tentatively scheduled for late August.

Eliza Fernand is among the artists featured in the program. Fernand is a multidisciplinary artist who has worked in a variety of mediums including murals, quilts, ceramics and video. She is also a teaching artist at Grand Rapidsbased West Michigan Center for Arts and Technology (WMCAT). Fernand’s submissions to the program are miniature slip cast ceramic ghost sculptures, which patrons will receive along with access to a video that she animated using the artworks. By paying the artists up front, the CSArt program has provided Fernand with more freedom to create something truly unique. “I like the opportunity to make something that someone can own and appreciate as a work of art,” she said. “It’s a small sculpture instead of a cup.” Snicka, another local artist featured in the program, is excited to meet community members who will be receiving her work. “I’ve gone to different events at local galleries in Grand Rapids, but I haven’t gotten to interact with our community with my art before, so I’m definitely looking forward to that,” Snicka said. Snicka’s submission to the CSArt program will consist of a limited series of art prints. While Snicka has done this type of printmaking before, this will be her first time working on a project of this size. Trebellas is hopeful that Avenue for the Arts can make the CSArt program a regular occurrence. As with many of the organization’s projects, the CSArt program will act as a sort of pilot that may be replicated in the future if successful. Organizers expect the 50 shares to sell out quickly based on early interest from pre-registrations. “My hope is that this will be a successful way for non-art people to support the arts scene,” Trebellas said. “I’m hoping that this is an accessible way for people who haven’t really dipped their toes into buying local art to be able to do it easily.” Visit www.mibiz.com

SPECIAL TO MIBIZ • JUNE 7, 2021

Q: HOW DO COMPANIES ATTRACT TALENT AND GROW THEIR BRAND? A: By leading with their values and becoming

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GET INVOLVED The best way to know where you’re going is to first know where you are. The journey towards a better business future is different for everyone and it’s not about perfection. Whether you’re just beginning or well on your way, a regenerative economy starts with measuring and benchmarking your current impacts. The SDG Action Manager and the B Impact Assessment are free online tools that outline your current impacts, areas for growth, and pathways to that growth.

Governance Average Business

Workers

2021 GOOD FOR MICHIGAN AWARDS Out of all the businesses that participate in Good For Michigan each year, these businesses are making the most positive impact.

AWARDEES

Little Space Studio Little Space Studio started as a small coworking space and have grown into a d y n a m i c s u p p o r t s ys te m fo r a re a creatives. They provide affordable access to technology and resources, education and mentorship opportunities, and a robust network of creatives for area businesses.

FlexTech Education “The front-facing piece of us is coworking, but the deeper level is that we are this holistic business support that you just can’t find anywhere else.” – Alysha Lache-White, Founder & CEO

Walker-Miller Energy Walker-Miller Energy is Detroit-based, Black Woman-owned energy efficiency contractor. They design and implement programs for utility companies who are seeking to provide energy savings to their customers. They are a values-driven company that strives to empower people and uplift communities and believe that energy efficiency equally addresses a social and environmental need.

FlexTech Education is a teacher-powered education consulting company. They provide professional development to schools who want to offer project-based learning experiences to students. Their hands-on curriculum is rooted in realworld problems that mirror the way we live and work.

Our company exists to change the future of education and the assessment allowed us to place ourselves within a local and global context and think about all the ways our work can make life better for educators, students, and families.” – Sarah Pazur, Co-Founder, President, & CEO

Mallowfields “The B Corp assessment represents our commitment to drive energy equity, empower people and enrich communities. It is totally in keeping with our belief that businesses can drive both purpose and profit.” – Carla Walker-Miller, Founder & CEO

M allow f ie ld s is a n e m ploye e - own e d , corporate republic, software engineering company. Each employee-owner has equal voting rights and equal access to company legal and financial records. Even before the company started, the founders knew they wanted to champion values such as transparency, fair and equal pay, and the democratic process.

“Everyone has a vote. Everyone has equal voice in the company.” – Jessa Challa, Software Engineer

EuzenConnect EuzenConnect is a social impact start-up that works to connect employers to the robust talent pool in Michigan. They use the SDG Baseline and Action Manager to not only measure their own impacts, but as a tool for the employers they work with. Their programs target an underutilized talent pool and help employers create holistically welcoming environments for their new hires.

“I really hope other organizations take advantage of this assessment because it’s a great way to figure out where to get started.” – Blythe Kazmierczak, CEO

As Michigan’s B Local, we create connections, increase the positive impact of our B Corps, and raise awareness of the B Economy. B Corps have not only measured their impacts, they have reached a minimum performance score and have been certified by B Lab, a nonprofit organization that believes in unifying companies around the world with a goal of making high ethical standards for business practices the new norm.

When you see this logo, you know you’re supporting a company that puts people and planet first.

MEET MICHIGAN’S B CORPS! THESE B CORPS ARE ACTIVE IN OUR B LOCAL COMMUNITY AND RIGHT IN OUR OWN BACK YARD. TO LEARN MORE ABOUT B CORPS AROUND THE WORLD, VISIT BCORPORATION.NET.

Specialty Services

Arts & Entertainment

These graphs reflect the combined average scores of the 24 B Corps in Michigan. The scores are compared to the combined average scores of those who have taken the same B Impact Assessment, but have not certified.

Banking & Finance

Specialty Retail

Building Services & Suppliers

Restaurants, Food & Beverages

Assessment Performance

Business Services

30 Cleaning

BUSINESSES

25 20 15

Computers, Web & Telecom Photography Farms & Producers

Marketing, Advertising & PR Manufacturing

Women Owned

Family-Owned

Health & Wellness

Employee-owned

10 5 0

Community

Customer

Environment

B Corp Businesses

Governance

Average Business

Workers

FOCUS: REAL ESTATE: MULTIFAMILY

State seeks to expand access to key housing tax credit, but funding remains scarce By KATE CARLSON | MiBiz kcarlson@mibiz.com

roposed changes to the Low Income Housing Tax Credit program administered by the Michigan State Housing Development Authority seek to increase access to the funding tool to communities beyond downtowns and city centers. The Qualified Allocation Plans that determine how the credits are awarded are typically amended every two years. The funding program is the main tool available for developers in Michigan to create affordable housing developments. The draft changes are expected to be approved this month. MSHDA delayed the proposed amendment process when the COVID-19 pandemic hit last year, and only had one funding round in 2020 in June instead of its usual two rounds. Developers and housing advocates raised concerns t hat t he single round format would be perBrown manent, t hough MSHDA expects to return to two funding rounds this year. The first round took place in February and the second is set to take place on Oct. 1, said Chad Benson, acting director of development for MSHDA. “That’s still under the draft (Qualified Allocation Plans) Hollander we’re working on and that’s what we’re planning for the next funding round,” Benson said. The proposed changes to the 2022-2023 Qualified Allocation Plans (QAP) will be used to score the first funding round in October this year. Key changes include a focus on incentivizing environmentally friendly building practices and on making the credits more available to rural communities. In the past, the QAP had also been split between funding the production of new housing units and the restoration of existing units. The plan is to now

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shift to focusing on the production of new units, Benson said.

Rural communities The QAP has used a “walk score” metric to award Low Income Housing Tax Credits (LIHTC), which considers densely populated areas throughout the state, generally downtowns, Benson said. The QAP would now rely less on walk score and more on proposed developments’ proximity to critical amenities such as grocery stores or doctors’ offices. “If a development is located outside of a city center but is located next to critical amenities, it opens up more opportunities,” Benson said. Housing North Executive Director Yarrow Brown doesn’t expect the “small changes” in the QAP to make a huge difference for the communities her organization serves, which span 10 counties in the northwest Lower Peninsula. “MSHDA has a huge task ahead of them to meet the needs of many communities,” Brown said. “In rural communities, we don’t meet a lot of the scoring with walkability and access and proximity to transportation. We really want to see more flexibility, and that’s what we’re pushing for in general.” Brown at times discourages developers from even applying for LIHTC funding because of the unlikelihood that they’d qualify, she said. However, a Traverse City project was recently awarded incentives, and multiple projects in Emmet County are considering applying, she said. “We have people across all kinds of income levels in all kinds of communities,” Yarrow said. “What we’ve been seeing is while wages have only increased by 6 percent, real estate has increased by 60 percent. There is a huge imbalance and you can barely find a place to purchase for less than $250,000. We at Housing North want to focus on everybody that lives and works in a community year round.”

People who are making 80 to 120 percent of the area median income are still being priced out of the market in northern Michigan, creating a need for the “missing middle” in the housing stock, Yarrow said.

‘Environment of scarcity’ Meanwhile, developers have seen fundamental challenges around the LIHTC process for years. “For a long time there has been a pretty vocal sentiment from rural areas — particularly from northern Michigan — that Detroit and Grand Rapids were soaking up a disproportionate amount of the resources,” said Matt Hollander, managing principal of Portage-based Hollander Development Corp. “In that sense MSHDA has done things that will help open up access where it’s needed, but those communities still need more affordable housing, too.” Hollander Development is familiar with the LIHTC application and changes over the years because of the firm’s focus on acquiring, developing and owning affordable and mixed-income housing developments. “There is no way for it to be perfect because LIHTC is an underfunded resource and is an environment of scarcity,” Hollander said. “Only around 25 percent of projects that apply are likely to get funded, and we don’t have any hard data to say how many projects never even get to the application process because they don’t apply because it’s so competitive.” Typically those projects that avoid applying are in rural areas, Hollander said. “Manistee is where we are working on a project currently,” Hollander said. “I think areas like Manistee — smaller farm communities and a lot of the communities that are major tourist communities along the lakeshore — will benefit from the changes.”

“There is no way for it to be perfect because LIHTC is an underfunded resource and is an environment of scarcity.” —MATT HOLLANDER Managing Principal of Hollander Development Corp.

While developers welcome more flexibility in qualifications for funding, the program is likely to remain competitive even if more funding is allocated based on housing demand, officials say. “There is so much need out there that it will still be a very competitive process,” Benson said. “I don’t think we expect there to be any change in that.” About 40 to 60 applications are submitted in the twice-yearly funding rounds though available funding only supports 16 to 20 projects, Benson said. “With this round, MSHDA has done a nice job of engaging with a lot of different stakeholders and weighing the pros and cons of the changes,” said Ryan Kilpatrick, executive director of Housing Next. “The primary issue is MSHDA tends to have $10 million in requests for funding for every $1 million they can dole out.”

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MiBiz / JUNE 7, 2021

FOCUS: REAL ESTATE: MULTIFAMILY Developers plan more than 800 housing units at former Walker golf courses By KATE CARLSON | MiBiz kcarlson@mibiz.com

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Adding value to your real estate transactions John Arndts, Ben Zainea, Dan Parmeter and our other real estate attorneys analyze and address your real estate matters with your best interests in mind to give you a competitive edge. • Purchase and Sale Agreements

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JUNE 7, 2021 / MiBiz

WALKER — Two former golf courses in the city of Walker are poised to be redeveloped into large-scale housing projects with a combined total of 757 rental units and 67 single-family homes. The projects at the former Lincoln Country Club and English Hills Country Club would also boost the Grand Rapids area’s increasingly in-demand housing stock. “There continues to be an increasing demand for not just single-family, but multifamily developments as well,” said Walker Mayor Gary Carey. “There are demographics that don’t necessarily want to own a home at this point in time, Avis and it’s not always that they aren’t able to, so it’s important to have those choices in our community.” Multifamily housing can also be an attractive option for course owners looking to sell as maintaining a course becomes less economically viable, while also providing a template to reiCarey magine large greenspaces. “We have to reimagine how our land is currently being utilized by the city,” Carey said. “It’s not just our golf courses, which are huge financial drains on our owners, but it’s also the large shopping complexes. I’d also like to see some of these big concrete jungles and parkCavenaugh ing lots not being used for anything. Why would we not find a way to reimagine those to something more purposeful?” The metropolitan area’s housing supply is tight as the region continues to grow, noted Matt Jones, associate vice president at Colliers International’s West Michigan office. “All of the low-hanging fruit is already being developed, so people have to naturally get creative when they think about where and what they develop into housing out of necessity,” Jones said.

(616) 632-8000

The former English Hills Country Club located north of I-96 between M-37 and Bristol Avenue NW has been eyed for redevelopment in the past, and was rezoned to high-density residential in 2003 for a multifamily project that never came to fruition. The golf course reopened after that, but closed down again in 2020. Illinois-based Redhawk Multifamily LLC is planning a 552-unit apartment complex on the property that would include one-, two- and three-bedroom units. The development is set to take up about 30 percent of the 142-acre site, which also includes property adjacent to the golf course at 1470 Four Mile Road NW. The Walker City Commission approved preliminary site plans and is expected to soon sign off on the project, said Mark Avis, managing member of Redhawk Multifamily. Redhawk’s acquisition of the property is dependent on the approval from the city. “The development process was great. It was one of my first projects with no opposition from staff,

planning commission or council and pretty much no negative feedback from the public,” Avis said. “We did a lot of outreach with the neighbors and worked with staff ahead of time to take into account a lot of questions and concerns.” Average unit size will be 1,000 square feet with price points expected to range from $1,400 to $1,500 a month. Redhawk also plans to donate the southeast portion of the property to the city of Walker to expand English Hills Park. “It’s a great amenity for our residents, yet we could definitely use more land, and with the growth that’s taking place there, this will be able to allow for more people to use amenities there,” Carey said. Redhawk is also planning to keep most of the existing trees at the golf course by constructing housing units on former fairways. “They’re keeping the green space Walker is known for but addressing the needs of the market for multifamily homes,” Carey said. “We’re excited about that, adding another neighborhood to our community.”

Lincoln Country Club The rezoning and redevelopment of Lincoln Country Club has been more challenging for developers, in part because of the COVID-19 pandemic’s effect on in-person city meetings and notifying the public about the project. Illinois-based Stoneleigh Companies LLC plans to build 67 single-family home lots and 214 singlestory rental units on the former golf course located at 3485 Lake Michigan Drive NW. The approval process was paused following city staff concerns about accessibility and public safety, but the planning commission is expected to approve the plan this month with the city commission following suit in July, said Stoneleigh CEO Rick Cavenaugh. “The revision was more driven by the city commission’s comments as it related to their master plan, so we shuffled the site around a little but did not change the main concept of the development,” Cavenaugh said. The final connection points into the development have been moved slightly from where they were initially planned to address public safety concerns, Carey said. “I give the developer a ton of credit. They’ve bent over backwards and made the needed changes to make this a workable solution for us,” Carey said. A Stoneleigh Companies affiliate struck an arm’s length deal with AMF Bowling Centers Inc. in October 2019 to buy the property and closed on the acquisition in January 2021. The golf course was losing about $200,000 a year, Cavenaugh said, and is now closed permanently. The bowling alley on the site also closed permanently last year because of the pandemic. However, the site plan received an outpouring of negative feedback from some surrounding residents at city meetings, with most comments expressing concern about increased traffic and the potential loss of green space. “There is a unique dynamic: We know we need more housing, and people in the city know and want that too, but not necessarily in their backyards,” Carey said. “There is a fine balance of what makes sense. We’ve taken the approach with our industrial development of full speed ahead, but with these developments it’s a more controlled growth.” Visit www.mibiz.com

Coming Soon!

TRANSPORTATION

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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.

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MiBiz / JUNE 7, 2021

REAL ESTATE & DEVELOPMENT SHORT-TERM RENTALS Continued from page 1

The bills as drafted would strip municipalities’ ability to adopt these types of local regulations, which also include rules on noise and traffic and occupancy levels.

Realtors on board Brian Westrin, general counsel for trade group Michigan Realtors, told MiBiz the legislation would restore homeowners’ private property rights in municipalities that severely restrict short-term rentals as well as attract investments in Van Beek second homes. “When people are looking at investing in our state, especially with second-home ownership, they do ask those questions of: Can I rent on a short-term basis or at all?” Westrin said. The legislation also comes amid an active housing market Winter in Michigan as realtors report record sales and houses quickly selling above asking prices. The Southwestern Michigan Association of Realtors reported a record 1,044 houses sold in

Travis Hanko renovated a house in Benton Harbor that’s been converted into a lucrative short-term rental. COURTESY PHOTO April 2021 in Allegan, Berrien, Cass counties and the western two-thirds of Van Buren County, with selling prices continuing to “set new record levels each month in 2021,” according to the organization. The previous record was 965 houses sold in April 2018.

Local opposition However, local officials who have regulated shortterm rentals say the legislation strips away local power and ignores neighborhood concerns. “What we found when we did our evaluation last year was that (our regulations) met the market need and we thought we put pretty reasonable restrictions

in place,” said Holland City Manager Keith Van Beek. “This isn’t just about the property rights of the folks that have a short-term rental, we’re also worried about the property rights of people living around them.” The city of Holland launched a short-term rental pilot program in 2018 that has since been adopted as part of its local zoning ordinance. The city has a limit of 25 short-term rentals allowed in its traditional neighborhoods and imposed a 500-foot buffer between each short-term rental. The city also requires rental property owners to keep contact information on file with the city in case problems arise during a rental period. “We put a lot of work into this and had a lot of citizens provide feedback,” Van Beek said. “This additional assurance belongs at the local level of how to allow something and do it in such a way that matches the needs of our local community and local neighbors. That’s why we object to the legislation.”

Housing implications

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Local officials are not only concerned about potential nuisance issues with short-term rentals, but also with the risk of further straining the housing supply. In cities like Traverse City, short-term rentals are part of the local tourism economy but are already having detrimental effects on the availability of housing stock, said Traverse City Planning Director Shawn Winter. He believes the proposed legislation could contribute to the rising cost of housing. As of mid May, Traverse City had 31 licensed owner-occupied short-term rentals and two applications pending, along with 165 short-term rental properties licensed that are not owner-occupied and 14 with applications pending. Winter also raised concerns about ownership changing at developments that receive state and local incentives to serve as workforce housing. The fear is that these developments will be changed to condos, making it possible for owners to turn units into short-term rentals, Winter said. “When you start to have a lot of housing stock tied up in short-term rentals, it’s hard to have people move here,” Winter said. “Our service industry workers can’t find any housing at a reasonable price anywhere in town and are forced to live outside of town and have time and travel expenses, which ends up being pretty significant. A lot of places have a hard time retaining workers, and not just service industries, but manufacturers, too.” Westrin disputes arguments that the legislation would have a detrimental effect on affordable housing. “There are so many other variables that we’re working against to make sure housing is affordable

“When you start to have a lot of housing stock tied up in short-term rentals, it’s hard to have people move here.” — SHAWN WINTER Traverse City Planning Director

in Michigan and short-term rentals are the least of those concerns,” Westrin said. “The bigger issue is the cost of materials, low interest rates, and the availability of the housing stock is currently very low.” Yarrow Brown, executive director of Traverse City-based advocacy group Housing North, said short-term rentals aren’t necessarily a problem, but communities should be able to regulate them as they see fit. “We’d like our local units of government to be able to make that decision,” Brown said.

Renting an Airbnb Travis Hanko explored Airbnb during the COVID-19 pandemic as a way to earn extra income. Business has been scarce during the winter months for his landscaping company, Precision Cutz LLC, so he bought a house in August of 2020 in Benton Harbor near his home in Coloma. “I needed to figure out something to do to keep my (employees) busy and have supplemental income as well,” Hanko said, adding that he originally intended to buy a house “to flip and sell it.” Hanko invested about $130,000 to gut and renovate the Benton Harbor property. After learning about Airbnb from a neighbor, Hanko opted to rent his property on a short-term basis instead of immediately selling it. He also says short-term renting is less stressful and more lucrative than having long-term tenants, while eviction bans during the pandemic further dissuaded him from long term rentals. Hanko is now in the process of buying another home to renovate and convert to a short-term rental after a promising start with his first attempt. “We had our first renter two weekends ago and are booked through August every weekend and during every week,” Hanko said. Visit www.mibiz.com

FOOD BIZ

Michigan kombucha producers expand as consumer demand spikes By JAYSON BUSSA | MiBiz jbussa@mibiz.com

hen Courtney Lorenz launched her business in 2015 brewing and selling kombucha, she started working with just three 5-gallon containers. Her Traverse City-based Cultured Kombucha Co. now occupies a sprawling 5,000-square-foot facility where a dozen 500-gallon brewing tanks are running at any given time. Cultured isn’t the only Michigan-based kombucha brewer that is finding steady growth in a quickly expanding industry that centers on this fermented, sweetened tea with a centuries-old history. Kombucha Brewers International, the industry’s primary trade association, identified kombucha as a $1.8 billion dollar industry and growing. Brewers throughout Michigan are carving out their niche in this quickly expanding market.

Steady growth

as a more refreshing, alcohol-free version of an IPA. “You can have these crafted beverages but don’t have to consume the alcohol,” Lorenz said. “Our goal was to create a crafted alternative for people who don’t want an alcoholic beverage.” Cultured plans to cover consumers that do prefer an alcoholic beverage as it develops a hard kombucha, a variety with a longer fermentation process and added sugars to increase alcohol content. Cultured Kombucha recently received a $10,000 Food and Agriculture Investment Fund grant from the Michigan Department of Agriculture & Rural Development, which Lorenz said will be used to create the infrastructure for that expansion. She also said that Cultured Kombucha’s hop tea should be available in the fall with the hard kombucha coming in mid winter. Cultured plans to use its existing distribution network for the products while opening new markets. With the recent moves, Lorenz and her team are striving to carve out a significant presence for Cultured throughout the region. “I think Cultured Kombucha could really be one of the greater kombuchas of the Midwest,” Lorenz said. “I think it’s a highly underserved market and is dominated by national brands right now, but consumers are really asking for something that is more crafted and less Pepsi or Coke.”

Cultured Kombucha distributes to 180 locations throughout Michigan, including restaurants, gastropubs, breweries and independent grocers. Just recently, the brewer inked a 22-store distribution deal with Meijer Inc., allowing it to break into the big box retail environment and furthering New demand Cultured’s reach throughout Michigan while also Muskegon-based Lively Up Kombucha LLC is emerging into parts of Indiana and Ohio. another prime example of a kombucha brewer that The deal was the result of two years of lobbying has grown quickly and completely organically. with Meijer buyers. Founded by Brenna Kelley and Zack Smith in “(The Meijer deal) is allowing us to really creJune of 2017, Smith recalled the early ate steady jobs throughout the entire years when his startup worked out of course of the year,” said Lorenz, a rental kitchen while he had pallets whose business employs three curFOOD BIZ of bottles and a chef’s freezer stashed rently but could use additional staffNEWS in his living room. ing. “Beverage is a seasonal market — Sponsored by: Despite no investor backing, no matter what beverage you’re in. DAN VOS Lively Up just recently moved into We’ll have some consistency with CONSTRUCTION its new 2,600-square-foot producour ability to employ people, which COMPANY tion space at 1945 Stebbins Road in is great. It will also allow us to have a Muskegon Township where 2,000 really solid brand awareness.” gallons of kombucha are constantly brewing. Cultured Kombucha is also developing two new Already with a patchwork of retailers across products, including a hop tea and hard kombucha, Michigan that carry Lively Up’s kombucha, which a particularly hot segment of the kombucha market. is a low-sugar, dry variety with raw fruit and herbs, For its hop tea, Cultured Kombucha will leverage Smith said his company just signed a deal with the availability of home-grown hops made available Whole Foods Market Inc. to distribute to all of its through Traverse City-based of MI Local Hops LLC Michigan stores. to create a sparkling beverage that Lorenz described

Lively Up and Cultured are both proof of how the drink has crept into the mainstream just within the last decade. “Even 10 years ago, it was this health tonic that some people may have been afraid of or did not know of,” Smith said. “It was something that your hippie cousin had in their closet or your weird friend drank it. I think now, especially in the last five years, kombucha is becoming more acceptable as an overall functional beverage and just a common beverage. It’s still a niche product.” Smith credited local kombucha makers across the state and country for helping the beverage make this transition. “I think a lot of it has to do with us spreading the word and making it taste good and warming up the market,” Smith said. “Also, people are feeling good from it.” As the market continues to grow and attracts additional players — including large, national brands — Smith says he’s not worried about oversaturation, and stressed the importance of authenticity when it comes to a product like kombucha. “I think if you’re making a really good product and are authentic, you’re going to stick around,” he said. “Those who are not in alignment with that will end up phasing out. … Craft beer teaches us that and really any of these niche industries.”

The next kombucha frontier While the kombucha market continues to expand as a whole, hard kombucha is emerging as a popular alternative to both beer and hard seltzers. Kombucha Brewers International reported that sales of hard kombucha have grown from $1.7 million in 2017 to more than $12 million in 2019. National names like Sierra Nevada Brewing Co. (which brews Strainge Beast), San Diego-based JuneShine Inc. and Wild Tonic of Arizona have capitalized on the surge in popularity while local makers like Cultured Kombucha get in the game. However, the entire market originated in Michigan, which is home to Ypsilanti-based Unity Vibration Kombucha LLC. Founders Rachel and Tarek Kanaan refer to Unity Vibration as “the O.G. of hard kombucha” after developing the first kombucha beer, which is never diluted, pasteurized, distilled or bottled before being fully fermented. Unity Vibration continues to expand in a market it essentially created, and is expected to finish

Cultured Kombucha Co. has scaled up production over the last few years to meet growing market demand. COURTESY PHOTO out this year with a distribution that reaches into 25 different states. “All of these hard kombucha companies saw the opportunity in a segment that we were the only company in for years — they got a lot of funding and took off,” Tarek Kanaan said. The hard kombucha space is another area where authenticity is key — not only in the way a company conducts business, but in the product itself. Tarek Kanaan said that many of the national brands align with seltzer makers in their approach to production. Unity Vibration aligns with, and piggybacks on, the state’s thriving craft beer industry. Not only is Unity Vibration a member of the Michigan Brewers Guild and Brewers Association, but it regularly participates in local beer festivals and even refers to its hard kombuchas as “beers.” “People want something that is authentic and they can tell you’re not full of crap,” Rachel Kanaan said. “We’re really a heritage brand. We’ve been doing this for a long time and have been authentic since the beginning.”

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MiBiz / JUNE 7, 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.

JUNE 7, 2021 / MiBiz

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NONPROFIT ORGANIZATIONS

Kalamazoo Institute of Arts receives $65,000 grant for temporary exhibition

The Frauenthal Center in downtown Muskegon seeks to raise an additional $7 million from the public for capital improvements at the historic landmark. PHOTO: MIBIZ STAFF

Frauenthal launches new $7M public fundraising campaign for capital improvements By JAYSON BUSSA | MiBiz jbussa@mibiz.com

organizations like the West Michigan Symphony Orchestra and the Muskegon Civic Theater, in addition to hosting its own series and events. The campaign has so far raised $4.1 million from local donors and corporate partners. Messing said that the initial success in raising money was a testament to what the venue means to the community. At the beginning of June, the campaign turned to the general public in Muskegon County to bring it across the finish line. “We’ll continue our efforts speaking to public and private foundations, but in the public phase of this, we’re looking to the community to join us in preserving this gem for the next 90 years,” Messing said.

MUSKEGON — Leadership at the Frauenthal Center stepped back in 2019 to administer a full architectural assessment of the historic performing and events center, which has endured nine decades of consistent wear and tear. Partnering with Ada-based Erhardt Construction Co. for the assessment, Frauenthal Center Executive Director Eric Messing and his team identified several millions of dollars in critical repairs and upgrades in order to keep the Muskegon County staple in proper shape for future programming. That’s when leaders decided to raise some cash — and also when the COVID-19 pandemic struck. Despite the economic hardships that came with the ensuing 15 months of the pandemic, the A COVID facelift Frauenthal Center, which operates as part of the Community Foundation for Muskegon County, With the initial money raised, the Frauenthal was effective in raising initial funds and address- Center was able to address some of its more pressing needs. This included 102 new, historiing the facility’s more pressing needs. cally accurate and energy efficient “Because of the pandemic, we windows that are expected to save were able to really focus on this the center on energy costs. Another campaign, which is an interestNONPROFITS portion of the funds was devoted to ing time to be fundraising, but it NEWS — repairing and reinforcing the cenenabled us to make several signifSponsored by: ter’s fire escapes. icant improvements to the building GRAND RAPIDS Perhaps the most significant during our closure,” Messing said. COMMUNITY FOUNDATION upgrade, especially in light of the Dubbed the “Next 90 pandemic, was a new HVAC sysYears Frauenthal Preservation tem designed to enhance and proCampaign,” the campaign by the Frauenthal Center and the Community tect air quality in the theater and lobby areas. “We hope that everyone feels safe in returning Foundation aims to raise $7 million to make the upgrades to a venue that is regularly used by here,” Messing said. Visit www.mibiz.com

“We’re looking to the community to join us in preserving this gem for the next 90 years.” ERIC MESSING Executive Director, Frauenthal Center

While summer is dotted with occasional event rentals, in addition to a free family movie night available to limited audiences, the bulk of the Frauenthal’s season begins late in the fall. Installing heated sidewalks along the perimeter of the facility as well as updating its digital display screen and marquee are the next steps. Upgraded sound and video systems that are also crucial for the center will follow. “Our technical equipment is so dated that we have to rent sound equipment and bring it in,” Messer said. “Some touring shows will pass over our facility because of some of our outdated technical equipment. By upgrading and updating sound, video and eventually lighting, it’s not only going to enhance the patron experience but also artist experience and be more attractive to clients.”

KALAMAZOO — The Kalamazoo Institute of Arts recently received a $65,000 grant from the Terra Foundation for American Art as part of a nationwide initiative. The Chicago-based Terra Foundation — which supports American art exhibitions, projects, academic research and publications — awarded the funds to support a temporary exhibition titled “Art, Music, Feminism & the Mid-Century Quest for Change.” The exhibit, which will be displayed in 2022, focuses on the music industry in the 1950s when women were starting to find their voice in a male-dominated industry and society. The Kalamazoo Institute of Arts was one of 35 organizations across 30 different states to receive a portion of the $2.5 million in grant money. The funds are tied to Terra Foundation’s two-year Re-envisioning Permanent Collections initiative aimed at encouraging museums to explore their collections more deeply to reveal the artworks and voices that have shaped the cultural heritage, with a priority on equity and inclusion, according to a statement. The grants support the reinstallation of permanent collections as well as the development of temporary exhibitions drawn from museum collections. “These projects reflect the important work being done in the field to expand narratives of American art in order to embrace more inclusive histories that reflect a diversity of voices and experiences in the telling of those stories,” Terra Foundation President and CEO Sharon Corwin said in a statement. “We share this commitment to re-envisioning American art history and are honored to support these grant recipients from across the country in realizing their projects.” Terra Foundation considers this latest initiative as phase two of its recovery grant program aimed at providing support for museums and arts organizations that have encountered financial hardships during the COVID-19 pandemic. Throughout the pandemic, and subsequent museum closures, the Terra Foundation has provided immediate assistance for many organizations around the country. This is the KIA’s first grant from the Terra Foundation. Compiled by MiBiz staff

MiBiz / JUNE 7, 2021

Affordable housing remains in focus as nonprofit exec takes new role A Q&A with Jeremy DeRoo, incoming CEO of Dwelling Place For nearly 13 years, Jeremy DeRoo has played an integral role in seeking equity within disadvantaged Grand Rapids neighborhoods, particularly when it comes to housing and development opportunities. Last month, officials announced that DeRoo would depart neighborhood development organization LINC UP to lead Dwelling Place, another Grand Rapids nonprofit that focuses on housing affordability in the region. DeRoo is set to take over Dwelling Place next month from Dennis Sturtevant, who led the organization for 33 of its 41-year existence. The leadership change also comes at a crucial time as Grand Rapids and the surrounding area experiences a crisis in affordable housing availability. DeRoo spoke with MiBiz about the challenges ahead and the policies that could help move the needle on housing access. As you prepare to leave LINC UP, what do you see as the biggest ongoing challenges for the organization and the community it serves? There continues to be a major challenge in Grand Rapids around affordable housing. It’s one of the driving forces since LINC UP started and continues to be. It has significantly impacted the neighborhoods that LINC serves. The demographics are shifting as gentrification comes in, property values are significantly increasing and home ownership levels are very low. It continues to be a concern and a problem LINC is trying to address. With that are also racial equity implications. With ownership rates so low and property prices going up, there’s a widening of the racial wealth gap. How did you see the COVID-19 pandemic affect the communities you serve at LINC UP? I think most people are familiar with the disparities that COVID-19 brought to the surface that have been facing communities that LINC serves for a long time. It just really exacerbated them: Unemployment rates skyrocketed and the lowest earners could not or did not have the option to stay at home. It increased sickness rates because of that, or people lost their jobs and there was a huge economic loss to the community, as well as all of the additional stress and dynamics that go along with job loss. How can Grand Rapids effectively tackle its shortage of affordable housing? I think the housing crisis is predominantly caused by housing policies. There are a lot of things that contribute to it, but we need to build more and different types of homes in the city of Grand Rapids and the greater Grand Rapids area, which means we need to have things other than single-family homes available for purchase. There’s an under-built townhome market. Even co-housing or land trusts — we just don’t have a lot of options on the spectrum of owning opportunities. The same is true on the rental side: We just don’t have enough rentals in the city. What roles do you see for the city, state and federal governments? I think the city plays a significant role in ensuring that it updates its master plan in a way that produces more equitable outcomes for housing. I think the state of Michigan can do more to promote home ownership for low-income families. There are some specific programs they could bring back to encourage more home ownership development. There just needs to be subsidies in creating affordable housing options. The state can direct more particularly to the home ownership side of the equation. There’s a significant amount of federal spending going on right now across the board. Directing that toward addressing some of these housing challenges is really critical to a full recovery from what we’re experiencing here. What led to your decision to join Dwelling Place, and how might the new position overlap with your previous work? Dwelling Place provides me an opportunity to continue to work around equity and housing and maybe take a broader, more regional perspective. LINC focuses heavily on neighborhoods and neighborhood solutions. Dwelling Place is an opportunity to take a more housing focus. Given the housing crisis that Grand Rapids and West Michigan is facing, we have a unique opportunity. There’s increased awareness on the importance of housing and how it’s a significant factor to shift systemic outcomes. We can use this time to craft a new housing strategy in the region. As a nonprofit leader, how has fundraising changed over the years and, in particular, over the past year? I think it’s a little early to know the full implications of the pandemic on philanthropy. At LINC, we have seen increased interest in our community organizing and advocacy work in promoting racial equity. That’s a strong trend that will probably stick around long term for philanthropy — a willingness to take on systemic issues and root causes. And that’s key to resolving the affordable housing crisis. What kind of legacy does Denny Sturtevant leave behind at Dwelling Place? Denny has contributed to an amazing organization that has a great reputation of doing really good work. They’re known across the state and really nationally as taking on complicated housing projects and doing them very well. It’s definitely some big shoes to try to fill on my part, but he’s left behind a group of extremely talented individuals and staff who are really good at what they do.

IN THE NEWS M&A

n Grand Rapids Venture Capital has acquired Professional Courier Services, a same-day, small-package delivery and errand service in Grand Rapids. Small Business Deal Advisors LLC represented Professional Courier Services owner Cathy Smith in the sale. Smith founded Professional Courier Services in 1978 and sold the business to retire. Grand Rapids Venture Capital plans to add warehouse space to offer more logistics services, including warehousing and fulfillment, last-mile delivery and transportation options to customers. Steve Barnes created Grand Rapids Venture Capital during the pandemic to find new investment opportunities. n Public relations and investor relations firm Lambert & Co. has sold its Lansing political business formerly known as Sterling Corp. to Brightspark Strategies, the three-person team running Sterling’s conservative fundraising unit. Lambert President Don Hunt said in a statement that the firm is focused on its “growing and profitable practice areas” and is “shedding noncore operations.” He added that the sale provides a “significant return” while also “eliminating the potential for conflicts inherent with a political practice.” Lambert, which has offices in Grand Rapids, Detroit and New York City, will retain its Lansing office. n BluJay Solutions, a global provider of supply chain software with a major presence in Holland, has been sold to Austin, Texas-based E2open in a deal valued at around $1.7 billion. The deal, which was announced late last month, brings together two complementary software as a service (SaaS) providers. BluJay Solutions works with 50,000 network participants that will enhance E2open’s network of more than 220,000 network participants. The deal also helps expand E2open’s supply chain execution capabilities, namely with transportation management. The deal is expected to close in the third quarter.

EXPANSION

n Industrial Magnetics Inc. plans to more than double its manufacturing space in Boyne City with a 36,000-square-foot addition, according to a statement. The additional room will allow the company to support its organic business growth and to handle production of products stemming from its recent acquisition of Walker Magnetics. Construction on the project started last fall and is expected to wrap up by July 1. Industrial Magnetics is a manufacturer of permanent and electromagnetic solutions for industrial applications. In February 2021, the company acquired the assets of Worcester, Mass.-based Walker Magnetics Group Inc., a manufacturer of highly engineered industrial magnetic products that’s been in business since 1896. n Industrial automation and robotics integrator Mission Design and Automation LLC is building a new 50,000-square-foot manufacturing facility at 9696 Black River Court in Holland Charter Township. The $5.3 million project is expected to create 109 jobs over a two-year period by increasing the company’s engineering and machine build capacity. State officials said the project aligns with the Michigan Economic Development Corp.’s strategic goal of growing advanced manufacturing and Industry 4.0 jobs statewide. Grand Rapidsbased Pioneer Construction Co. serves as the general contractor on the project, which is expected to be move-in ready by the end of the month. n Autocam Medical Devices LLC plans to invest $60 million over the next three years to expand production capacity in West Michigan. The producer of surgical and medical components and devices expects to build a new 100,000-square-

foot global headquarters and production facility at Broadmoor Avenue and 36th Street in Kentwood. Autocam Medical is working with Grand Rapidsbased AMDG Architects Inc. to design the facility. Pioneer Construction Co., also of Grand Rapids, will handle the build-out. The company expects the expansion will create an additional 250 jobs. Autocam Medical has already started hiring and expects to increase its recruiting efforts significantly over the next year.

BANKING

n Lake Michigan Credit Union opened a new branch at 496 Ada Drive SE in Ada and an office on Robbins Road in Grand Haven. The Grand Rapids-based credit union has 59 offices, including 13 in Florida, with assets of about $10 billion and more than 406,000 members. n Mercantile Bank of Michigan transferred ownership of a former office on Lincoln Street in downtown Lakeview to the Hough-Pontius VFW Post No. 3701, which plans to renovate the building to include a large event space, commercial kitchen, private offices and meeting spaces. n Honor Credit Union will add an office in the Grand Rapids area with the planned acquisition of the smaller ATL Federal Credit Union. The acquisition will give ATL’s 1,767 members access to a far larger branch network in the Grand Rapids area and more financial services, including business lending and “robust” mortgage lending, ATL President and CEO Robert Shane said. ATL has a single office on 36th Street in Wyoming with $15.1 million in assets. The Berrien Springs-based Honor Credit Union has 23 offices in Southwest Michigan and the Upper Peninsula with $1.14 billion in total assets and nearly 92,000 members. The present ATL location would become Honor’s first office in Kent County. n Tom Lampen, senior vice president and CFO at Sparta-based ChoiceOne Financial Services Inc., plans to retire effective Dec. 31, 2021. ChoiceOne directors approved a succession plan and expect to name senior vice president and COO Adom Greenland to succeed Lampen as CFO. Lampen will retire after 34 years in the banking industry, which includes service as ChoiceOne’s CFO since 1992.

HEALTH CARE

n Bronson Healthcare has opened its new $22 million, 52,000-square-foot South Haven Hospital. The two-story facility was developed east of the existing hospital between Blue Star Highway and Bailey Avenue. The 8-bed facility includes significantly less inpatient capacity than the existing 49-bed hospital to reflect low inpatient volumes, and focuses mainly on primary care, wellness, disease management and the most-used medical services. Bronson South Haven Hospital is the second new facility the Kalamazoo-based health system opened this year. Bronson in February opened the $60 million Frank J. Sardone Pavilion in Kalamazoo adjacent to Bronson Methodist Hospital. n Spectrum Health will rebrand Health Pointe, an outpatient medical campus in Grand Haven developed jointly with Holland Hospital, as Spectrum Health Grand Haven Center. The name change will occur over the next six months and comes after Spectrum Health bought out Holland Hospital’s share of the joint venture to become sole owner. The new name “aligns with Spectrum Health’s branding in West Michigan and identifies the Grand Haven Center as part of the health system’s family of services,” the health system said in a statement. n Holland Hospital added a specialty care practice in pulmonary and sleep medicine with Dr. Dale Coller, who specializes in the diagnosis and treatment of lung conditions, breathing problems and sleep disorders, including obstructive sleep apnea.

Interview conducted and condensed by Andy Balaskovitz. Courtesy photo.

JUNE 7, 2021 / MiBiz

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To transport the same amount of energy Line 5 delivers by rail, barge or truck means more traffic, more emissions, more risk and higher fuel costs. Governor Whitmer wants Line 5 shut down with no plan to replace the essential energy it delivers.

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