MiBiz Crystal Ball: December 21, 2020 special year-end edition by MiBiz

CRYSTAL BALL

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CRYSTAL BALL 2021

Keep on fishing. T he experience of living through the COVID-19 pandemic and helping manage a small business during a (hopefully) once-in-a-lifetime crisis has me leaning heavily on lessons I learned decades ago chasing winter steelhead with my dad on the Manistee River. We happily spent many hours together on the verge of frostbite, braving frigid temperatures, biting winds and driving lake-effect snowstorms — all for the chance just to hook into a chrome steelhead. My dad, Phil Boomgaard, believed in fully immersing me in the world of fishing from a young age. From the time I was old enough to hold a fishing rod and have my own waders, I was his fishing buddy. It didn’t matter how cold or nasty the weather was, if he was going fishing, I wanted to as well. It was a fate all but sealed before birth when my mom, who was five months pregnant with me at the time, fell into the Pere Marquette River while netting a salmon for my dad. Steelhead fishing, especially with the tactics we used in the mid 1990s, was a true exercise in delayed gratification. You lived for those rare moments when the line came tight and you felt that powerful head shake, but mostly you froze your ass off and wondered how long you could make a thermos of hot chocolate last. That was not always an easy proposition for a pre-teen. Frustrated and cold — and fishless — I remember it was easy to have your mind wander, lose sight of the potential to catch fish and start the plan for capitulation. I’d begin doing everything but casting a line, ratcheting up complaints that the fish just aren’t biting and that we should leave for home. In those times, my dad pulled out one of his famously sarcastic Phil-isms: “You can’t catch anything if your line is not in the water.” It was his way of sharing the maxim that perseverance pays off, no matter how hard the grind becomes. More than nine months into this deadly pandemic, that’s a lesson we can all learn from. Keeping our guard up against an invisible, deadly virus is tiring. We simply want to spend time with family, grab beers at the bar with friends, feel the energy of a crowded concert and just be social beings again, regardless of how introverted some of us are. Now more than ever, perseverance is key, especially in business. In fact, I see many comparisons between the best steelhead anglers and good entrepreneurs. A good steelhead fisherman has to cut through a ton of noise and focus on what he can control. You constantly move forward, reading the water and analyzing the situation. You keep all the tools in your vest at the ready. You adapt to new conditions. You place your best cast. You readjust until you get it right. And if that doesn’t work, you keep changing it up until you find a willing player or the right set of opportunities.

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When you stop and commiserate, you let those negative thoughts creep into your mind. The cold suddenly becomes more acute. You start to think about the long walk back to the truck and how nice it would be to have a piping hot cup of coffee. But you didn’t drive this far, hike all the way along the river and spend time daydreaming over the last week about shaking hands with a steelhead just to walk away empty handed. Steelhead fishermen, like entrepreneurs, are eternal optimists. You make another cast, try a different bait, adjust your float, round the next bend and keep trying to make it happen, because that bite will come and it’s your opportunity to seize. You’re guaranteed to catch zero fish if you aren’t trying. So you persevere and come back at it again the next day with a renewed sense of optimism and drive. Businesses have been applying that same thinking on a seemingly daily basis since March. In the face of countless adversities — state-mandated shutdowns, ever-changing rules, exposure to the virus taking out a portion of the workforce and revenue losses, not to mention potentially dealing with the disease on a personal level within their families — entrepreneurs have kept adjusting, finding new opportunities and reacting to fill new market needs brought on by the pandemic. Make no bones about it: It has been a grind. Even the most successful business owners have had to reset their targets, learn to do more with fewer resources and find ways to move ahead in the face of monumental challenges. But pulling down their shingle and heading to the nearest job fair is not an option, so they keep finding ways to eke out new business and persevere. After all, it’s tough to succeed in business if you’ve taken your chips off the table and walked away in lieu of having to deal with adversity. Here’s to persevering into 2021 and beyond.

Joe Boomgaard Editor

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INSIDE THIS ISSUE: Manufacturing

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

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MANUFACTURING

MANUFACTURING OUTLOOK

Manufacturing faces talent problem heading into a crucial 2021 By JAYSON BUSSA | MiBiz

“My view going forward is that I need to make sure that I keep my workers safe, secure, healthy and engaged. That is the number one thing it seems we’ve been focused on in particular in the age of COVID, and I don’t think that’s going away next year.”

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s manufacturing continues to lead both in statewide and nationwide economic recovery, the sector will still need to address a chronic issue that has only worsened throughout the COVID-19 pandemic. Talent shortages continue to dog manufacturers across Michigan as many companies have not been subtle about their desperate need for more workers. “We have employers with facilities that are here, but also elsewhere in the states and across the world, and they are very frank in their conversations saying, ‘If I have to, I will move my employees to (another) state because they have a readily available workforce,’” said John Walsh, president and CEO of the Michigan Manufacturers Association. “That worries me. I want to make certain that we as an industry, and we as a state, put talent development first.” Walsh

Bouncing back While the initial stages of the COVID-19 pandemic — and ensuing shutdowns of nonessential operations — decimated the manufacturing sector like it did most others in Michigan, manufacturers Harbour have snapped back relatively quickly. Manufacturers of many segments throughout Michigan are staring at backlogs of orders and demand that is nearly at pre-pandemic levels. “It’s an interesting time — frankly a lot of the current Erwin manufacturing environments are sort of bucking the trend,” said Laurie Harbour, president and CEO of Southfield-based consulting firm Harbour Results Inc. “Automotive is going nuts. We’re selling RVs and boats and trailers and everything that has to do with not vacationing today. Even if you go into medical, you have a lot of West Michigan medical guys making medical stuff. That is driving additional plastic parts and whatever is needed. I look at manufacturing right now and things look like they’re positive for next year.” Manufacturing has recovered steadily on a nationwide scale as well. The Institute for Supply Management manufacturing Purchasing Managers’ Index registered at 57.5 for November. Anything above a 50.0 in the index indicates growth, and November marked the seventh straight month of growth in manufacturing. The sector has been tempered by low inventories as manufacturers struggle to replenish while demand is still strong. This quicker-than-expected climb back to pre-pandemic levels has many operations humming and looking for additional talent, which hasn’t been easy to find. Walsh said that in January 2020 the manufacturing sector in Michigan employed 628,000 employees. That number is now around 560,000, showing how understaffed the industry still is compared to pre-pandemic times. “We have a massive amount of people on unemployment but they’re people out of the hospitality business or travel and entertainment and we haven’t figured out, in manufacturing, how Visit www.mibiz.com

— ERIC ERWIN CEO, FloraCraft Corp.

Opportunities and hardships ahead

FloraCraft Corp., Ludington. COURTESY PHOTO to attract those people into these good-paying manufacturing jobs,” Harbour said. “Talent is your No. 1 issue in 2021.” And while stimulus money and unemployment benefits are paramount for many American workers, it also leads to more people waiting on the sidelines. “Too much stimulus and people stay home,” Harbour said. “It’s needed, though. I feel horrible for the restaurants and all those in the hospitality industry. These business owners are going to lose their businesses.”

Bridging the talent gap Eric Erwin, president and CEO of Ludingtonbased FloraCraft Corp., had almost no trouble reeling his workforce back in after the company was deemed non-essential and closed down for a period in the spring. That wasn’t by luck, either — it was by design. “My view going forward is that I need to make sure that I keep my workers safe, secure, healthy and engaged,” said Erwin, whose company produces a wide range of foam crafting products. “That is the No. 1 thing it seems we’ve been

focused on in particular in the age of COVID, and I don’t think that’s going away next year.” FloraCraft requires high labor input for its products, making low-skill, low-wage shop workers a critical piece of its operations. Erwin and his team have emphasized talent retention and development, and it showed when nearly 100 percent of his 300-employee workforce returned after the shutdown. This investment in workers includes the FloraCraft Academy, which consists of a series of classes for the company’s top engaged employees. Erwin said he also strives to provide competitive benefits. In 2018, the company gave almost $4 million directly to employees, awarding a $125 bonus for each month the employee has worked at the company. “I don’t think enough businesses invest for the future with their current employees,” Erwin said. “We invest in a lot of development both for our most engaged employees — those that are on the shop floor — but also investing in our executives who will be the future leaders to make sure they’re prepared for all the challenges that are going to be in place.”

Simply existing in the manufacturing space doesn’t necessarily make a business bullet proof. Some manufacturers have used PPP loans as the lifelines they are, but haven’t been able to find solid financial footing as a result. This dynamic lays the groundwork for potential bankruptcies and consolidation in 2021. “I definitely think there are some people who made it through with PPP loans that probably wouldn’t have made it prior to PPP — there are still many of them that are on the bubble,” Harbour said. “I definitely think we’ll see some fallout in the coming two to three quarters. I know that restructuring firms are ramping up. They’re hiring people left and right. They know it’s coming. The banks are telling them it’s coming.” The pandemic also exposed the inefficiencies of the global supply chain, and many manufacturers will take steps to reshore or near-shore their supply chains to avoid future issues. “I do expect some regionalization of supply chains and that’s really going to help,” Walsh said. “We’ve pared down manufacturing to such a thin line of supply for efficiency sake and cost sake. When you have a disruption anywhere now, it can cause a worldwide crisis in manufacturing.” “We’re working with our members on how we can inspire more on-shoring and that might be through this regional supply chain or more in a duplication effort,” Walsh added. “Those are real opportunities for us.”

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MANUFACTURING

Automotive sales outlook stronger than predicted at start of pandemic

JSJ navigates complexities of supply chain disruption, mandatory vaccines

A Q&A with Mike Wall, director of automotive analysis at IHS Markit

A Q&A with Nelson Jacobson, chairman, president and CEO of JSJ Corp.

By JAYSON BUSSA | MiBiz jbussa@mibiz.com

COURTESY PHOTO

ew local executives can provide a better view of the manufacturing industry than Nelson Jacboson, whose Grand Haven-based JSJ Corp. is entering its 101st year in business and features a portfolio of companies with an international presence. Jacobson said the pandemic gave rise to a host of complexities in the supply chain as well as worker retention. Those challenges are likely to continue into next year, along with uncertainty about how the business community approaches mandatory COVID-19 vaccines.

With facilities throughout the world, how did COVID-19 affect your workers directly and how did JSJ keep workers safe on the job? We had an incredibly low infection rate and absolutely none that came directly from the facility — and that’s globally, which includes where we’re based in China. So I think everyone is on board that we have to work differently. But we’re lucky. We’re an older company and even with all of our growth we have a lot of tenure in the factory and a lot of great leadership at all levels. I’m just really grateful to them.

Looking ahead to 2021, is manufacturing out of the woods with COVID? What are your thoughts on how a new administration will affect the industry? Another (concern) is: Will business continue? Will this next wave cause something? With the new administration, this divisiveness, will it settle down so we can focus on the business? Many of the things President Trump was doing, they were things that needed to be addressed, but there probably was a much more constructive way to do them, especially for us global manufacturers. Tariffs were just this shock that we took. So, we’ve dealt with sort of two years of trauma. And we know the tariffs accomplished absolutely nothing.

Workforce shortages before and especially during COVID have been a major problem for manufacturing. Has it been an issue for JSJ? I have some really good friends (at other companies) that are really struggling and I think an advantage is our culture. Our retention rate was just extraordinary. Our HR teams, the senior leadership starting with myself, (COO) Tom Rizzi and (Executive Vice President) Eric Johnson, just kept communicating with the employees about what we were doing, why and how. We provided 32 hours of full wages for three weeks because we thought this would be over in three weeks, so we just paid them. I think they understood that we were taking their health as a first priority. Our retention and return rate globally was phenomenal. I’m sure there have been shifts or issues, especially in the transition where there might have been some shortages, but we’ve just not had that problem.

Were you forced to lay off employees? Has hiring resumed again? When business was down we did have to make some reductions in forces and some layoffs and those are always challenging. But I think people understand. We’re starting to hire again, especially in the engineering ranks. If anything, we’re seeing more people coming to West Michigan. That’s kind of an underlying benefit of this pandemic. We’re seeing a lot of interesting resumes out of Chicago and the east side where things are more challenging. That’s been a really pleasant surprise, especially for the engineering skilled trades.

With vaccines starting to roll out, have you had any discussions about mandatory vaccinations for your workforce? We’re just starting (those conversations). Boy, this is going to be a complex one. I think what we have to do is be very thoughtful. It’s an interesting one. It’s the same as the legalization of marijuana — how is that affecting this? I think we’re going to have to be very thoughtful. We’re going to have to be respectful of people’s rights. We eradicated smallpox and polio with vaccines and measles so it’s not unprecedented in history.

Disruptions in the supply chain have also been a big problem. Have those settled down, and how have you dealt with them? It’s just so complicated and you just have to work it. Again, I think we’re very blessed because we work really hard to be a good, good customer at every level with understanding how we can cooperate. It’s not a problem — it really is a resource allocation (issue). We just have to put a lot of extra effort into ensuring that we have (enough) and communicating if there is going to be a shortage of something. Our customers have to communicate to us what are the schedules and we have to make sure we have the parts. We’ve gotten a lot smarter. We probably learned tremendous things about ways to improve our supply chain.

DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

arket research and consulting firm IHS Markit recently locked in its latest forecast for the North American automotive industry. Barring any major pandemic-related setbacks, most data indicate a scrappy recovery on the back end of 2020 that will continue into 2021. IHS Director of Automotive Analysis Mike Wall, who brings more than two decades’ worth of auto sector expertise, discussed the relatively surprising projections that he didn’t foresee at the start of the pandemic.

How difficult is industry forecasting and getting a clear read on the future with all of the volatility brought on by pandemic? At this time last year when we were doing this exercise, I certainly didn’t have a global pandemic on my bingo card. When it comes to those types of events, no one is able to predict that. What we have done a decent job of, because of the data resources that we have, is trying to measure and monitor the health of the consumer and the recovery. Looking at registration data — new daily and weekly registrations — and being able to see the pace of sales certainly does help but it’s wickedly tough right now to forecast in this industry.

By all accounts, inventory is low. How does it look from where you sit? We’re in catch up mode. We’re way under where we need to be on inventory. We’re trying to rebuild inventory in a time when retail sales have snapped back, quite frankly, to darn near pre-pandemic levels. And, by the way, we have to do all this while social distancing, restructuring our lines for COVID mitigation and all that. That’s tough. Last month was a good example. We had a decent sales month. We only grew inventory by 40,000 or 50,000 units. It was pretty modest. And yet we realistically need to rebuild inventory by maybe the tune of 500,000 or 600,000.

What are some factors holding back automakers and suppliers from rebuilding at a quicker pace? You talk to just about any supplier and one of the biggest things they’re stressing about is labor. They can’t find people and they need more skilled labor. These COVID mitigations, there is a cost to them, but there is an impact to efficiency and we’re seeing that at the automaker level, too. It’s tough to rebuild those volumes when you have all these things operating out in the ether right now.

COURTESY PHOTO

Other than low inventories, is anything else hampering sales numbers? Probably the biggest headwind facing U.S. light vehicle sales is in the car rental market — those fleet sales. Certainly those are going to be depressed and quite frankly, they’re going to be depressed for a while now until air travel really comes back, which honestly will probably be a couple of years.

Per IHS reports and forecasts, the U.S. sold 17.1 million units in 2019, which was trimmed down to what will be around 14.6 million units this year. How devastating of a drop is that and where do you see us landing in 2021? You might look at those numbers and say, ‘Wow, that’s a haircut,’ and it is. But I’ll tell you that at the depths of the pandemic we were probably closer to 12.5 million (units) for the year. The 14.6 million is reflecting — not all, but a good chunk — the fleet sales weakness that is out there. We have started to see retail sales come back to the point where our 2021 number is 16 million units. It’s not 17 (million), but a good chunk of that delta is daily rental fleet sales. If you were going to tell me in late March and April that we’d be back to 16 million units next year, I’d say good luck.

How does this recovery compare to that of the Great Recession? When you look at the Great Recession, you look at the year 2007, which was the last sort of precrisis year. We had 16.2 million (units sold). We went to the depths and hit 10.4 million in 2009. We did not get back to 15 (million) until 2014. So, we’re realistically looking at next year at least getting back into the 16 million range, which is just amazing.

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People

February 16, 2021

Without the right definition of roles — and the right people in the right roles — a manufacturer’s systems are bound to fail. In this first webinar, we’ll highlight talent strategies that can help you build your team for the future while balancing the production demands of today. Plus, you’ll hear about how you can build a pipeline of talent and leadership from within during this webinar focused on people.

Process: Lean 3P

May 11, 2021

In this first of two webinars on process, we’ll address Lean 3P (Production, Preparation and Process), an event-driven process for developing new products concurrently with the operation that will produce it.

Process: The Pivot

August 10, 2021

As companies change and evolve, there are times when systems and processes need to be updated or completely rewritten. In this second webinar on process, we’ll dive into strategies for modifying the process elements within your company without losing track of your people and products.

Product

November 9, 2021

Product quality is a given in any manufacturing environment, which is why companies need a robust approach that meets its customers’ requirements as well as international quality standards. This webinar will focus on creating sustainable systems that balance the 3Ps

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

MANUFACTURING

Tight new vehicle inventory could persist into Q3 as demand remains strong A Q&A with Zeigler Auto Group President Aaron Zeigler By JAYSON BUSSA | MiBiz jbussa@mibiz.com

make it more affordable. The other piece of it is people have time now — people are bored.

ther than a brief period in the spring when these businesses were shut down completely, many West Michigan automotive dealerships have managed to move vehicles at an impressive clip throughout the COVID-19 pandemic. With 30 stores and 77 franchises throughout three different states, Kalamazoo-based Zeigler Auto Group is on the front lines of automotive retail. The company also operates Zeigler Motorsports, which belongs to another segment that is booming during the pandemic. MiBiz caught up with Zeigler Auto Group President Aaron Zeigler to see if he expects this rally to continue into 2021.

It’s no mystery that many dealer lots are thin on inventory. Is that a significant disruption and will it continue into 2021?

During an event that has created economic hardship across the country, how have dealerships been able to sell big-ticket items like automobiles and recreational vehicles?

Are you experiencing similar buying habits on the motorsports side?

Right now, there isn’t a lot of stuff to spend money on. Nobody went on spring break. Nobody did a big summer vacation — maybe they did a small one up north. Kids sports are shut down, you can’t go to concerts, you can’t go to sporting events, restaurants, bars — all that stuff that people typically spend money on. So, people maybe have some extra money to spend, which is why I think they’re buying some of these types of items, coupled with super low interest rates that also

I think inventories are going to stay light through at least the third quarter (2021) because it’s going to take a while for manufacturers and suppliers to catch up. Right now, the market is still outpacing what they can build. When the pandemic originally hit, I thought it would be the first quarter, and then we went to the second and now we’re thinking it will be the third quarter before industry starts to catch up. … Inventory is still down about 45 percent from what it was before the pandemic on the automotive side.

With motorsports, we’ve been selling every single product we can get. We sold out of personal watercraft this summer and we sold out months in advance, where if someone wants to buy a personal watercraft now, we’re selling into the spring market. Before COVID hit, we had about 1,300 units in stock, which is what we usually carry in total. We got down to where we only had 200 units in stock this summer and almost all of those were snowmobiles and now we’re going to sell out of snowmobiles. We’ve never done that before.

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Are you expecting the market to cool down any time soon? I don’t think, in the short run, it will. Interest rates are a driving factor for our industry and they’re going to stay low for a very long time. There is no inflation on the horizon whatsoever. The Fed has come out and said that for the next couple of years, interest rates will remain low. That really drives our industry. The same things for motorsports, RVs and boats. I think that’s why they’re all doing well right now. I think also there is a little bit of pent-up demand for people that didn’t buy in the spring and summer. So there is a little catch up there. The industry is very healthy right now and I think it will stay healthy moving forward because we’ll have all the tailwinds and then you have a healthier economy going forward.

Workforce shortages are an issue that businesses in all industries have had to contend with even throughout the pandemic. Last time we talked, Zeigler Auto Group was creating incentives to keep talent on board. How have those efforts been going? Our core workforce was fantastic. Our people were amazing. They stayed with us and have done a really good job throughout this and we actually were able to grow our employment throughout the pandemic. … We had some really talented people in our organization that kind of presented some opportunity that may not have come our way otherwise. We have been in really good shape from an employment standpoint.

MIBIZ FILE PHOTO: KATY BATDORFF

For many dealerships, the car buying experience changed with COVID-19 to limit person-to-person exposure. How has the process changed at Zeigler and will those changes stick? Someone can go and buy a car 100 percent online if they want to — literally do the transaction 100 percent on our website and never talk to someone and have a car show up in their driveway if they want to. A lot of people still want to talk to someone, but we’re able to do so many things online that it really shortens the face-to-face interaction that someone has to have. We’ve also done some things where we’re dropping vehicles off at people’s house for test drives. We’re doing the same for service where we’ll pick up someone’s car for service. … We learned to tweak our business to make it as safe as possible for our customers and make it as convenient as possible. Those are things that our customers like, so those are things we’ll continue to do moving forward.

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

REAL ESTATE & DEVELOPMENT

REAL ESTATE OUTLOOK

Experts divided over future of office space

By KATE CARLSON | MiBiz kcarlson@mibiz.com

hrough multiple lockdowns and workplace restrictions, companies have altered the way they think about and use their commercial office space because of the COVID-19 pandemic. West Michigan real estate experts say this will carry over into 2021, but the extent of how much a business will be affected in the new year is extremely industry-specific. Most office and retail users will be in better shape than business owners in hospitality that do not own their building — especially nonfast food restaurants, said Mark Ansara, vice president of Colliers International’s Ansara West Michigan office. “It’s harder for a restaurant that’s leasing than one that owns their own real estate that can work with their bank,” Ansara said. “Some landlords are forgiving and some are not.” The firm hasn’t seen any new restaurant leases unless Wiener the facility has a drive-thru window, Ansara added. “Restaurants and bars are not able to be open right now, and are already bleeding. And there are not enough Band-Aids in the world to stop the bleeding,” Ansara said. “They can’t survive with just takeout.” Larger chain restaurants Karger are struggling as well, but they are better positioned than local eateries, according to experts.

“About half of the experts will say you’ll need less space and half will say you’ll need more space. We do know that if the workforce is back working at full capacity that there will need to be an increase in office space for social distancing.” — DAVID WIENER Senior Vice President, Colliers International West Michigan

“The local guys without the deep pockets are the ones hanging on by a thread,” he said. Hospitality businesses including restaurants are all affected by the lack of entertainment downtown, according to experts. “Our downtowns are alive and well when we have entertainment, but we do not have a vibrant downtown right now,” Ansara said. “It’s just another layer of the challenge.” Empty offices also mean fewer people patronizing downtown restaurants and businesses, said David Wiener, senior vice president of Colliers’ West Michigan office.

Experts divided on office space Wiener said expert opinions vary widely when it comes to the demand for office space through 2021. “Our office at Colliers is seeing a couple things we want to keep a close eye on,” he said. “Some people have been working from home and have gotten comfortable doing that. But we also believe that businesses are going to need more in-person activity to keep their sales up and driving what they do.”

Some clients are considering adding square footage per employee to socially distance. The “million dollar question” is whether employers need to increase current office space to accommodate social distancing or whether enough employees working from home will offset the need for more space, Wiener said. Colliers is also seeing more companies signing short-term lease extensions that would typically be for five to 10 years. “About half of the (office space) experts will say you’ll need less space and half will say you’ll need more space,” Wiener said. “We do know that if the workforce is back working at full capacity that there will need to be an increase in office space for social distancing.” A majority of the 2,000 office workers Jones Lang LaSalle Inc. (JLL) surveyed in 10 countries said they want to work remotely more than two days a week on average, which is twice as much as pre-pandemic. Three-quarters of employees reported they want to continue working from home on a regular basis, according to the survey. Yet nearly three-quarters of survey respondents said they want the ability to come into an office, and 70 percent consider it the best place for team building and connecting with management. “Companies of all kinds are seizing a oncein-a-lifetime opportunity to change the office model and lean into workforce preferences,” JLL Director of Global Research Marie Puybaraud said in a statement. Before the pandemic, the office market had become “highly densified” over the years, said Jeff Karger, senior vice president of JLL in Grand Rapids.

“We used to talk about 200-350 square feet per person, and a lot of companies had gotten that down to 100-200 square feet per person, really packing people in,” Karger said. “There will be a de-densification, so some businesses might need a little extra space or the same space because they can spread out more if some employees continue working from home.” Karger said the amount of subleased space on the market has increased, which could indicate some downsizing. “We’ve seen an increase in sublease space not just downtown but across the board, which is a result of companies working more from home or not doing very well or both,” he said.

Looking ahead Wiener classifies 2021 as a year in which companies will “wait and see.” He said none of his clients have defaulted on office leases, and almost every client is paying their rent on time despite most offices working remotely. Some predictions at the beginning of the pandemic said offices might relocate from downtowns to the suburbs. In West Michigan this year, large companies have moved offices from downtown to the suburbs, and vice versa. If downsizing office space proves to be a trend for 2021, Karger noted the potential for some downtown office space being considered for residential use. “Whether it’s a change of use to apartments or hotels, I could see a project or two changing,” he said. “I think landlords will be looking at all their options.”

SEPTEMBER 3, 2013

VOL. 25 • NO. 23

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

Faith-based philanthropy drives local affiliate of National Christian Foundation By JANE C. SIMONS | MiBiz jsimons@mibiz.com

‘We’ve made some bad beer’ Quick decisions, making messes and staying humble drive explosive growth for Founders Brewing Co.

By NATHAN PECK | MiBiz

“The ‘uber’ beer geeks took notice. They shouted about us, and that allowed us to move in a positive direction. The attention put us in the limelight and made us the darlings of the industry,” ike Stevens, president of Founders Brewing Co., can Stevens explained. “The beer geeks are the reason this beautiful laugh now about some of the poor choices the Grand little disaster we call the craft beer industry exists.” Rapids-based craft brewer made over the years. Yet, by the mid-1990s, the company was also butting up He even cops to perhaps the worst sin of all for against a series of constraints: a small production space, a lease a craft brewery. on a space that was too small for the growing business, and an “We’ve made some bad beer,” Stevens said with organizational structure that had Engbers and Stevens handling a laugh. too much of the day-to-day operations. It’s not the sentiment that one would expect to come from the brewer of one of the world’s top-rated stouts, but it was the company’s willingness to try new ideas and fail that marked the To address those concerns, the late businessman Peter Cook, a point at which Founders Brewing Co. transitioned from a smallmentor to Stevens, pressed the company to formalize its relascale, also-ran to an internationally renowned brewer of some tionship with its board. Cook pushed them to focus on the of the boldest beers on the market. core of their business and leave other concerns to their growIn the mid-1990s, Founders Brewing was in trouble. In its ing staff. small production and taproom space on Monroe Avenue just “He wasn’t into discussing finances — he didn’t really underblocks from downtown Grand Rapids, co-founders Dave Engbers stand what we were doing,” Stevens said. “We and Mike Stevens realized that going with what the were undercapitalized, he told us. ‘Don’t worry industry demanded at the time was not leading about the mess you’re creating, that’s what investhem to success. Tossing out the accepted playtors are for.’ When you have drive, when you book, the duo instead opted to make the beers they have a product that is selling, don’t look back — were seeking: big, bold and unlike other offerings let others clean up your mess.” currently on the market. The effect was two-fold: Engbers and Stevens As part of that shift, Founders’ taproom became had to formalize their roles within the organizaa testing ground where the company released its tion, and the company began to bring in experts new and experimental brews. Some flopped. A few grabbed drinkers’ attentions. Today, a handful — MIKE STEVENS to handle areas where there were deficiencies. of those beers are among Founders’ most popuFounders Brewing Co. Whereas the two frequently touched all aspects of their business, they were forced to step back. lar brands: Dirty Bastard, Breakfast Stout (and its Their board had always included investors, but amped-up, barrel-aged brother, Kentucky Breakfast they now had a group with expertise that could Stout) and Double Trouble. But back then, they were help guide them forward. only experiments written in chalk on the daily specials board. “It held me accountable to shareholders and the people who “We tried making a lager when we shouldn’t have. We’ve done have a stake in the business,” Stevens said. “It made me better. some things with spices that didn’t turn out well,” Stevens said. Dave and I had to be better.” “But if we didn’t do that, we wouldn’t have made KBS.” But the transition was at times difficult. In pockets across the U.S., on blogs and message boards, “Personally, I’ve had more roles here than anyone. When Founders’ beers began attracting the attention of a growing numwe started, there was just three of us. We all helped … brewing, ber of craft beer aficionados. As the company’s beers started winning awards, the American drinker began turning away from the pale, fizzy domestics in favor of bolder craft brews. See FOUNDERS BREWING on page 12 npeck@mibiz.com

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hilanthropic families throughout Western and Northern Michigan are putting their faith into action with their money. And they’re turning to a local affiliate of the National Christian Foundation (NCF) to help them. Locally, 350 families served by the organization’s West Michigan office contributed $36 million to individual “Giving Funds” at NCF and recommended more than $31 million in grants in 2012 to charities of their choice, said Jamie Kuiper, president of NCF’s West Michigan office headquartered in Grand Rapids. “That’s a lot of money,” Kuiper said. “Our office is the third largest NCF office in the country measured Kuiper by fund balance.” Kuiper declined to identify any of the 350 families. “We have some major donors, but I can’t tell you who they are,” he said. “They want to remain anonymous, and we provide a mechanism for anonymous giving.” Mike Stevens, president Founders BrewingGiving Co. NCF’sofdonor-advised Funds offer PHOTO: JEFF HAGE families an “easy-to-establish, low-cost, flexible” vehicle for charitable giving that’s an alternative to establishing a private foundation, according to the organization. Donors’ efforts have helped to make the Atlanta-based National Christian Foundation 19th largest philanthropic 2014 OUTSTANDING GROWTHthe AWARD organization in the United States, according to a 2012 article in The Chronicle of Philanthropy. In late July, officials with the NCF announced that they had reached a milestone their giving history when Grand Rapids-based craft brewerin founded in 1997 by Mike Stevens andthey Dave Engbers granted their four billionth dollar

FOUNDERS BREWING CO. ■

to the Association of Faith Churches and The NCF West Michigan affiliate has Ministers International, a Minnesota- an 18-member board which includes Jerry based international ministry that plans Jonker, chairman of the board and a partto use the money to support an orphan- ner in Grand Rapids-based Home Acres age in Thailand that provides housing and Supply Co.; Wendell Christoff, co-owner schooling for children rescued from the of Litehouse Inc., a salad dressing, sauce sex trade. and dip manufacturer with operations That grant was recommended by giv- in Lowell; and James Dally, a Kalamazoo ers in Midland through their Grounds for businessman. a Better World Giving fund. The group is Dally said the ability to have direct served by the NCF’s Eastern Michigan involvement in where his donations are office located in Birmingham. going and the asset-based giving approach “We are a well-kept secret,” Kuiper said. are appealing to him and his family. “A big part of it is our business model. Our However, his faith in God is what really local operating budget is about $360,000. led him to the organization. He said he was SERVING WESTERN MICHIGAN BUSINESS SINCE 1988 We don’t spend much on marketing.” referred to NCF by successful friends who The local affiliate had total revenue of were also involved in faith-based giving. more than $499,000 and expenses of about “Biblically, it’s very clear that ‘he that $384,000 in 2011, according to the most refreshes others will be replenished,’” recent IRS Form 990 available. Dally said. “I’ve applied those biblical Donors to NCF are attracted to the principles to what I do.” mission andBy ministry of the organizaWhat Dally does is manage several NICK MANES | MiBiz tion foundednmanes@mibiz.com in 1982. The three Christian West Michigan-based businesses. He is the financial experts who laid the groundwork founder and owner of Biddergy.com, an A West Michigan medical device development for the NCF were looking for a way to “simonline consignment and business liquidaand manufacturing company is consolidating to plify the process of giving, multiplyitsthe tion auction Kalamazoo and expanding operations, while website; Adventure Learning still planning to leave a footprint in Grand Rapids. results and glorify the Lord.” Centers, which operates child care centers Oshtemo Township-based Keystone “We went on to introduce one of the first in Solutions Portage, Caledonia and Kentwood; and Group invested about $500,000 into a new Christian-focused donor-advised Mavcon a construction and develop24,000-square-foot facilityfunds, with a clean room Inc., in what we nowKalamazoo call the Giving said company. All three businesses are where itFund,” will move all ofment its product development and manufacturing Larry Burkett, a best-selling author andoperations. based at offices in the Kalamazoo/Portage With theofnew building up and running, entrepreneur, who is one NCF’s founders. area. Keystone plans to consolidate all of its manu“We also developed special resources and expertise as well as facturinga to the siteexpertise and moveinout of aThe facility asset-based giving, tax smart the character and integrity of the individnear thewhich GeraldisR.the Ford International Airport in Rapids. way to donateGrand non-cash assets such as real uals involved with NCF is what Dally said Having two separate manufacturing facilities estate and business interests.” keeps him involved. made it difficult to show customers Keystone’s full The localset of affiliate was originally Founder Burkett said over the past three capabilities, said Robert Nesky, Keystone’s founded in 2000 asofthe Michigan decades, NCF has become the nation’s director salesWest and product development. “Our intention was always to have largest the business Christian Foundation, but joined forces provider of donor-advised funds IN givers. roof, but it has taken to actuwith the NCFunderneath because ofone the resources and a while focused primarilyMADE on Christian ally put that together,” said Nesky, noting that the expertise it provided. “Any charity MICHIGAN that doesn’t violate our consolidation plan had been in the works for some “The reason for“It’s thea affiliation with NCF statement is eligible to seekGroups fundKeystone Solutions time. good thing we waited because our busi- of faith provides product was that the tools they are able to offerWe giving afrom said. “Ourdevelopdonors ness has actually expanded. now have largerus,” Kuiper ment services and contract the two older facilities ers are muchfacility morethan sophisticated,” Kuipercombined.” are people who share our worldview as it manufacturing at a new The Grand Rapids location stemmed from a said. “We were one of the first two or three relates to material possessions and what 24,000-square-foot , ISO previous acquisition. affiliates. Now there 28.” operates in a variety God of has called us13485-certified to do.” facility with Whileare Keystone sec-

FEBRUARY 17, 2014 VOL. 26 • NO. 9

Keystone relies on product development business to drive contracts

■ Originally located in the Brass Works Building on North a clean room in Kalamazoo. tors ranging from automotive and aerospace to Monroe Avenue; moved to 235 Grandville Avenue in 2007 renewable energy, majority Michigan. of its business The about firm, MiBiz, whichvisit was founded ■ Sold 111,000 barrels of beer in 2013 COPYRIGHT 2013 © MIBIZ. Print subscriptions are free to qualified individuals who are employed in Westthe and Southwest For further information www.mibiz.com. ■ Volume grew 63% comes from serving West Michigan’s burgeoning in 1997 and had revenues of ■ Off-premise sales were up 46% medical device industry. around $5 million last year, ■ On-premise distribution rose 58% The company, which employs around 10 engiconsolidated its manufacturing under one roof with the new facility, but still plans to maintain a ■ The Association for Corporate Growth West Michigan will neers, had around $5 million in sales last year, but presence in the Grand Rapids area, where it is a member of MiDevice, a consortium of medical present its 2014 Outstanding Growth Award to Founders has grown about 30 percent over the past five years, device manufacturers. Keystone offers clients a full range of product design, contract manuBrewing Co. on March 18. The event runs from 5:30-8 p.m. Nesky said. at the Amway Grand Plaza in Grand Rapids. Visit acgwmich. facturing and logistics services. It mainly serves the medical device, automotive, aerospace and org for more information. While the business is currently about evenly renewable energy sectors. 200,000

FBC BARRELS PRODUCED

180,000 160,000 140,000 120,000

190,000

2014 proj.

112,000

100,000 80,000

70,886

60,000

40,937

40,000 20,000 6,127

11,898 17,330

24,501

0 2007 2008 2009 2010 2011 2012 2013 2014* SOURCE: FOUNDERS BREWING CO.

split between product development and contract manufacturing, executives want to put more emphasis on the manufacturing side as part of the consolidation. Operating in an ISO 13485-certified facility, Keystone plans to grow the product development side of its business, which should translate into additional opportunities in contract manufacturing, Nesky said. “(Product development), more and more, feeds into our contract manufacturing, specifically when it comes to medical devices,” Nesky said. “By expanding our facility and having us underneath one roof, we’re not jockeying around to two different facilities. It really helps show (our customers) what our infrastructure is, and it paints a much better picture for them that as they develop their products, Keystone could also be the contract manufacturer of some of those products. It has had an immediate impact on our business and our pipeline.” Many of Keystone’s clients value that they can work with a single company to develop a product, manage the manufacturing and production

process, and then distribute it, according to previous MiBiz reports. “There are several companies on the west and east coasts that compete with them because that’s where the big medical technology companies are based,” Hank Brown, former CEO of Tangent Medical Technologies in Ann Arbor, said in a previous MiBiz report on the company. “Keystone is a unique brand in the Michigan market.” Tangent worked with Keystone to develop a new kind of catheter called NovaCath. Keystone executives make it clear that the firm is not an OEM, but is instead focused on both design and manufacturing. The products they make do not contain the Keystone brand, but rather the names of its clients, who also entrust the company to handle the logistics of distributing the products directly to hospitals and other medical facilities. While the company is moving the vast majority of its business to the Kalamazoo area where the

company was founded in 1997, Keystone still sees significant value in the Grand Rapids market. For that reason, the company plans to open an office primarily focused on sales at a to-be-determined downtown location in the first or second quarter of this year, Nesky said. The reasoning behind keeping a presence in Grand Rapids, Nesky said, is primarily due to Keystone having a number of customers in the area. The company is also involved in organizations such as MiDevice, a consortium of two dozen medical device-sector firms led by The Right Place Inc. “Keystone is a great company with terrific leadership and we congratulate them on the planned downtown office,” said Eric Icard, a business development manager at The Right Place who leads the MiDevice consortium. Both Nesky and Keystone founder and President Jim Medsker “have been strong advocates for medical device manufacturing in West Michigan and are extremely active in MiDevice.”

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

REAL ESTATE & DEVELOPMENT

CONSTRUCTION OUTLOOK

Construction leaders face a mixed bag of concern, hope heading into 2021 By KATE CARLSON | MiBiz kcarlson@mibiz.com

ecent year-end reports on non-residential construction activity softening and a plunging average project backlog are giving West Michigan construction leaders some reason for concern going into 2021. The average construction project backlog has decreased by 1.7 months over the past year, and in November was at 7.2 months. The November Architectural Billings Index — an economic indicator of non-residential construction — decreased to 46.3 in November compared to 47.5 in October. Meanwhile, talent is an Brady ongoing issue that’s top of mind for architects and builders, said Norm Brady, CEO of the Associated Builders & Contractors West Michigan chapter. “There are fewer graduates coming into the market every year and that will continue,” Brady said. “At VanGessel the same time, the number

of people retiring out of the industry is at an even more accelerated rate.” Michigan had 123,576 high school graduates statewide in 2008, and the number has been declining every year, according to data from the Western Interstate Commission for Higher Education. In 2030, the number of high school graduates is projected to be 87,000. Additionally, 48 percent of people employed in the construction industry are expected to retire over the next 15 years. Equity needs to continue being part of the talent discussion and how construction companies across the industry reflect that will ultimately drive change, said Mike VanGessel, founder and CEO of Rockford Construction Co. “We need to keep looking at how to make sure folks who are living in the community reflect our workforce,” VanGessel said. Construction material cost fluctuations are another factor that builders are closely watching. Costs of material including lumber and steel soared in 2020 and were unpredictable for a variety of reasons, including wildfires on the West Coast and tightened supply chains, though VanGassel expects those high costs to stabilize in the new year. “It was difficult to manage that, but I do think we’ve hit a plateau,” VanGessel said. “What will happen first is the supply chain will correct itself, I think the margins will correct, and we’ll see things come down in price some.”

Architecture firms reported they are modestly optimistic about 2021, even though architecture firm billings declined for the ninth consecutive month in November, according to a report from the American Institute of Architects. The biggest concerns that firms reported to AIA in a survey involve profitability, managing day-to-day business operations, and the far-reaching effects of the COVID-19 pandemic.

Some optimism Despite these concerns, construction and design leaders hold some optimism for 2021. News of a vaccine could make developers more confident to pull the trigger on projects that have been delayed by the pandemic, Brady said. This could potentially help increase the construction backlog and allow the ABI index to recover, he added. VanGessel said there will likely be more remodeling and smaller projects that will carry firms in 2021, as well as a number of bigger projects for Rockford in particular. Rockford is expected to start construction in February on Perrigo Co. plc’s new North American headquarters in downtown Grand Rapids. The $44.8 million project is set to wrap up in May 2022. “Generally speaking, optimism is good among (ABC) members,” Brady said. “Most have done relatively well financially in 2020. Work volume remained strong, and there is reason to believe

TOP CONCERNS FOR 2021 Issues related to firm management, operating a practice in a pandemic top list of business-related concerns for 2021. % OF FIRMS SELECTING AN ISSUE AS ONE OF THEIR TOP THREE BUSINESS-RELATED CONCERNS FOR 2021

Increasing firm profitability

29%

Identifying new clients and new markets/enhancing firm business planning/marketing Negotiating appropriate project fees Maintaining levels of staff productivity while working remotely Dealing with firm ownership transition issues Dealing with competition from other architecture firms or other design design professionals Managing rising costs of running a firm (e.g. space rents, health care costs, liability insurance) Retaining our key staff until more business returns Rebuilding our client base, or finding a new client base post-pandemic Ensuring collaboration and communication among management and staff while working remotely Maintaining relationships with longerterm existing clients

24% 20% 17% 16% 13% 12% 12% 11% 11% 10%

SOURCE: AIA ARCHITECTURAL BILLINGS INDEX

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GR TOURISM GROUP EXPECTS GRADUAL HOSPITALITY REBOUND STARTING NEXT YEAR A Q&A with Doug Small, executive director of Experience Grand Rapids By KATE CARLSON | MiBiz kcarlson@mibiz.com

COURTESY PHOTO

Startup architecture firm founder sees new design trends, need for inclusion in wake of pandemic A Q&A with Zachary Verhulst, managing director, PURE Architects By KATE CARLSON | MiBiz kcarlson@mibiz.com

achary Verhulst started Grand Rapidsbased PURE Architects in August, about five months into the COVID-19 pandemic. Verhulst — who was named the 2019 Young Architect of the Year by the American Institute of Architects’ Grand Rapids chapter — believes the pandemic will cause a major shift in architecture and design, while social movements over the past year have underscored the need for more diversity in the industry.

How do you see the pandemic affecting architectural design trends? I think it will be massive. We’ll see resilient architecture — emergency or crisis facilities — that people will start to study more. There will be more attention to indoor air quality, especially in health care and schools, and material research will be huge, specifically materials that prevent against or kill diseases. We already have antimicrobial and antibacterial material, but I think we’ll start to see that research and requirements for those materials change. Density in general is going to get looked at — on a micro scale from room to room and all the way to macro scale in cities. The consolidation of humans in space makes sense economically, but I think we’ll start to see some policy or zoning changes that might be less dense or individual spaces might increase.

What are some ways architecture firms might operate differently in 2021? I hope there will be a shift and that the traditional design team headed by a project manager and principal will get dismantled. Budgets coming out of the pandemic won’t warrant those huge teams. We’ve seen the need for a different set of skills or maybe a different set of eyes on a project. There are specialists like (diversity, equity and inclusion) consultants, health care professionals and guidance counselors who can consult on projects.

We’re starting to bring in diversity and inclusion experts as specialty consultants to our team. For K-12 work, the fact that firms typically don’t have social workers or guidance counselors involved in projects is a missed opportunity. Replacing carpet and paint is great, but if architects doing K-12 work are not benchmarking test scores and students’ grades, we’re doing students a disservice.

What types of projects do you plan to focus on at PURE Architects? We specialize in places where people live, learn and heal, including higher education, K-12, early childhood, health care work and any kind of multi-use or multi-family project. We’re a new but passionate practice and focus on spaces that uplift our community and impact our planet.

How will environmental considerations play a role in architecture and design going forward? It’s so critical, and it’s interesting in Grand Rapids. A lot of the city is so built out, so a lot of the work we do is in renovation. We just went through the 2030 District process where we had to make a sustainability action plan, which sets some very specific goals for our firm. We attach energy issues on every project, then goals for materials and water usage, which is the most challenging. The mission of the 2030 District is to work toward a carbon neutral Earth. We prioritize energy performance and publicly report how we’re doing. A lot of firms are kind of terrified of doing it — and it’s hard work — but it’s important work.

Why is it important to push for diversity and inclusion in architecture? To me it’s an opportunity to apply a different lens than most other firms, and that’s why we do design work. Only 2 percent of the people licensed in the industry are people of color. For us, being Blackowned provides a path for other people who look like me. Representation matters — personally, I didn’t even know what an architect was until I was 19 years old.

DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

he tourism and hospitality secPHOTO: MOD BETTIE FOR EXPERIENCE GRAND RAPIDS tors took a major hit in 2020 but are expected to slowly rebound in 2021 with positive news about the COVID-19 vaccine. Experience Grand Rapids Executive Director Doug Small is among industry leaders predicting it will take longer than a year for tourism to return to pre-pandemic levels, but a few larger projects on the horizon could provide Grand Rapids with some momentum in the new year. Hotels hit historically low occupancy rates in 2020, and Kent County hit a low in April with an 18 percent average occupancy rate. Occupancy levels are expected to increase in 2021, but are still expected to fall short of pre-pandemic levels.

How do you think different parts of the tourism industry will come back in 2021? The only business we really had in 2020 once COVID-19 hit was what we call the leisure business, people coming just to get away. It was a big thing for us when there were concerts in town, and the Grand Rapids Symphony had big shows going on all the time. Those will be the last things to come back and that will have a big impact on how big our leisure traffic is in 2021. The first that will come back the strongest will be corporate transient and professionals going to visit different corporate locations. I think the group meetings sector will spring back, but not for at least six months. So much depends on executive orders — right now that’s the big guessing game. We presented a plan of action to our board for 2021, but that could change in January.

How important is it that discussions continue in 2021 about constructing another convention center hotel downtown? Our competitors have not slowed down. They’re building hotels and expanding their convention centers, some in the middle of the pandemic. A destination asset study commissioned by Grand Action in 2016 said there is an immediate need to add a 400-600 room hotel to keep pace with competition. If we don’t pursue what the study said was needed, we’re going to be behind. It’s going to take a couple more years for approval and for the project to get off the ground. Then a project of that scope and size will take a couple of years to build, so you’re looking at four years. If my prediction comes true and we come back to pre-COVID numbers some time in 2023, that hotel will come shortly after and we can start running conventions and events out of it.

What do you see in the future for larger downtown venues? We’ll see closings. We haven’t even seen yet what will happen in the restaurant business. How much longer can an Intersection and a B.O.B. hang on without customers? What I don’t like about that is we were starting to get a reputation between places like 20 Monroe Live, DeVos Convention Center and Van Andel Arena as a pretty good music and event town. If you lose The Intersection or a 20 Monroe Live, we’re back to where we were in 2010 again, and it takes so long to build that up. It’s unfortunate. I hope I’m wrong, but I see some of these smaller venues having to close.

How have hotel occupancy levels shifted this year and what do you expect to see in 2021? Occupancy levels at Kent County hotels year-to-date through November are around 38 percent. The forecast nationally for year-end 2020 is 41 percent. We anticipate that our revenue will drop about 45 percent from what was forecasted when we started the year in 2020. In 2021, we are budgeting revenues to be about 30 percent less than what was realized in the year-end revenue of 2019.

What are you looking forward to in the new year? Seeing people. I also think the continuation and seeing the light at the end of the tunnel of the river restoration project will give our industry a little boost, along with the announcement of the amphitheater project (at 201 Market Ave. SW) going forward. Those will be two things saying Grand Rapids is coming back and doing just fine.

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Construction executive says pandemic underscores value of diversification, public projects A Q&A with Ben Wickstrom, president and CEO of Erhardt Construction By KATE CARLSON | MiBiz kcarlson@mibiz.com

da-based Erhardt Construction Co. focuses on a variety of market sectors — including industrial, higher education, senior living, places of worship, office and retail — and has intentionally diversified to be better positioned when one market slows down. While CEO Ben Wickstrom is concerned about some industry trends he expects to see in 2021, including a shrinking backlog of projects, he is still mostly optimistic about a gradual rebound starting around midyear. He also hopes the pandemic underscores the value of revenue to municipalities that helps drive construction projects, and plans to closely watch productivity on projects amid new worksite regulations.

What are you looking forward to in 2021? At the forefront is getting this thing (COVID-19) under control. That’s what I’m looking forward to. Beyond that, I’m looking forward to what we’ve learned this year and keeping things that have worked well and getting everyone back in the office.

I’ve been really pleased at how productive everyone has proven they can be remotely, but at the same time, it’s reinforced how much we like to be together at work.

Many developments were delayed this year because of the pandemic. Do you see construction projects increasing in the new year? I think it will probably be in the second or third quarter. I’m optimistic about stabilization in the first quarter, then trending back a little bit to modest growth, but I don’t think we’ll get back to 2019 levels yet. There won’t be an immediate turnaround, but things will start to pick back up, and they have to. We’re starting to see some good news about things turning around.

The average national backlog has decreased and the Architectural Billings Index has softened. Does this concern you going into 2021? It does concern me — that’s a good leading indicator for our industry. Our backlog is healthy enough to get us through 2021, but in 2021 we will definitely still have room to grow.

Several factors in 2020, including COVID19, caused construction materials to increase in price and volatility. Do you see this being an issue in 2021? I don’t think the volatility will be at the same level.

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I can’t predict what it’s going to do but I think as time goes on and the supply chain adapts to the new realities, the volatility will smooth out. It has been getting better. There’s also a lot of factors to materials pricing besides the pandemic. For example, all the forest fires on the West Coast had a big impact on lumber. While everyone is thinking about the pandemic, all the other influences are still there as well.

What other trends do you expect in 2021 that haven’t gotten much discussion? I’m concerned about a loss in revenue to state and local governments. I think it’s something that needs to get some attention. Construction spending on public projects and infrastructure is a big deal for our industry and our community.

Do you foresee any improvements on the talent shortage that the construction industry has been facing? Right now is a perfect time to find people. For Erhardt, talent is still at the forefront of what we do. It’s the slower times when we double down

on talent. It’s a long-term reality of our industry because when these projects and jobs do come back, the need for talent in construction will still be there and is there now.

How will the pandemic affect how your company operates long term? I’m keeping a really close eye on productivity. When construction was allowed to return in May, there was a lot of talk about how the increased protocols and (U.S. Centers for Disease Control and Prevention) guidelines were going to slow down the pace of construction. I was really interested to see how that would play out. When you talk about things like reducing crew size or virus-related things, I’m keeping a really close eye on what that does for productivity. In some cases, it increases productivity because it eliminates stacking trades. Trades are not stacked on top of each other as much under these new guidelines, and being less condensed and increasing work space can result in increased productivity when done the right way. That’s something I’m going to keep tracking.

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

SMALL BIZ

SMALL BIZ ROUNDTABLE

West Michigan small businesses look forward after a tumultuous year Four local business execs experienced work stoppages, financing challenges, new ways of doing businesses and — yes — even growth during the pandemic. They’re optimistic about the leaders that will emerge as a result of the public health crisis.

How was the Paycheck Protection Program process and have you gotten much guidance on loan forgiveness?

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

n hour-long conversation this month with three other small business executives was “therapeutic” for Jonathan Jelks. The Grand Rapids-based entrepreneur had shared and listened to the experience of peers from a variety of sectors about what it means to be a small business owner during a pandemic that’s now nine months long and Jelks Kelly counting. Work stoppages, loan rejections from banks, taking a “crash course” in workplace safety regulations and ensuring employees’ mental health were among the hardships executives described. Despite these hurdles, they all shared a common sense of optimism ahead of the new year and that — if systemic issues within the business community continue to be in focus — the pandemic may produce a unique cohort of small business owners who have weathered and thrived in the storm. This month, MiBiz hosted a virtual roundtable of small businesses from various sectors to discuss the pandemic as well as their 2021 outlook. The discussion, which took place Dec. 9 via Zoom and is available to view at MiBiz.com, featured: n Jelks, co-founder of Ambiance Kitchen & Bar, Motu Viget Spirits, GR USA Apparel Co. and Midwest Tech Project in Grand Rapids; n Alita Kelly, co-founder, South East Market in Grand Rapids; n Karl Kowalske, president of Seven Generations Architecture and Engineering LLC in Kalamazoo, a venture of Dowagiac-based Mno-Bmadsen, the non-gaming economic development arm of the Pokagon Band of Potawatomi; and n Alysha Lach White, founder and CEO of Little Space Studio in Grand Rapids. Here are some highlights from the conversation, which has been edited for length and clarity.

Where is your business at nine months into the pandemic? JELKS: The range of emotions I felt during the last nine months has just been all over the place. We’ve experienced Apocalypse Now real quick with COVID-19 and the pandemic. It’s the same for the businesses in my portfolio. With

LACH WHITE: The main experience we have been pulled through is that the reality of our (co-working space) business and where we are and what to expect coming out of it changed so rapidly. That was the constant stressor throughout the entire time. It’s stressful enough, but from a leadership standpoint, one thing that needs to be brought to attention is just what happens when you build this team and then suddenly everything comes to a halt. We had to make tough decisions early on in March when we had a shutdown. As we grew throughout the year and pivoted our direction, we built a team that we could retain as effectively and as affordably as possible.

Ambiance, it turned into one of our most triumphant achievements. Obviously, we’re excited to diversify our entertainment options downtown. Being an African American liquor-licensed business in the heart of the city and main artery there in Grand Rapids and just not being able to open has been extremely frustrating. We’ve had to learn

Kowalske

Lach White

it at a very quick pace. When you talk about entrepreneurship and the excitement of it and how much courage it takes, you never really know until you’re faced with challenges. Personally and professionally, I’ve never been faced with challenges like this during the past nine months. KELLY: When this (market) concept was coming to fruition, we really thought we were going to be looking at a space late next year, but because the pandemic has pushed us into really leaning into delivery and curbside and people needing groceries because they’re not going out as much, it’s really accelerated our whole operation. The way the pandemic has slowed other places down, it has inversely sped us up. We’re just leaning into that right now and honored to be hiring folks right now at a time when getting a job is so difficult. KOWALSKE: Since we’ve been dealing with this in March, we’ve gotten a pretty good handle on how you do the client work, engaging clients, designing, being creative when we’re used to doing all that in person. Now the focus has been much more on how we engage each other and how do we continue to build on that without getting fatigued by another Teams call or group meeting on Zoom. That’s been the biggest focus: building the community of the team.

KOWALSKE: For us, the process started before I joined the firm. I joined in September. One of the advantages as a small business is we’re fortunate to be part of a larger holding company. Mno-Bmadsen has several companies in their portfolio. What we did was try to leverage each other in access to banks. LACH WHITE: I have a very love-hate relationship with banks. We are very unique. After about a year and a half, we realized we’re difficult to fund. But that’s OK. Thank goodness we found an investor. We were part of the second (PPP) wave. We tried very hard to be part of the first wave, we just couldn’t make it work with our bank. But that was a huge, huge relief for us. It allowed me to retain staff that I was really nervous about holding on to. That was just awesome.

Despite no action as of now, there seems to be widespread support for Congress passing additional aid for small businesses. Where are you seeing that’s needed? JELKS: For the industry overall, definitely. Small businesses are just getting killed. This is kind of like reverse Darwinism. It’s unnatural selection. It’s hard enough being an entrepreneur in the first place but to have to deal with these kinds of challenges, it’s just something you didn’t plan for. Any support the feds can do when they know small businesses are pretty much the backbone of the country, the economy, I think they should do that. I definitely think there’s advocacy needed for small live entertainment stages and that kind of stuff. I’m definitely in favor and hoping for more support for businesses in hospitality. But everyone can’t be saved. The tough part about

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DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

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it is a lot of people are just going to go out of business. KELLY: There is something to be said about what is birthed through this pandemic. Our business is really being accelerated because we’re reacting to the pandemic, too. Supporting businesses that are birthed because of this whole experience and are trying to address issues associated with this pandemic is really important.

Outside of relief funding, how are you able to budget heading into a year starting with so much uncertainty? KOWALSKE: In the construction industry, it’s pretty lumpy in what market sectors are moving forward and what aren’t. We are a trailing business support service. Businesses need to be thriving and growing in order for our work to happen. Our individual outlook for 2021 is pretty optimistic for the first half in terms of what we anticipate continuing to move forward, projects we know have been funded. But a lot of the private sector or community-based work is on hold and is going to continue to be on hold. I don’t know that anyone can look past three or six months from now in terms of what the balance of the year looks like. JELKS: With the bar, you just don’t know how things are going to land. We’ve been trying to give ourselves enough runway so that if we need to open in the summertime that’s what we’ll do. We did the pivot and stashed some acorns so we can make sure if we need to hibernate all winter, we can take advantage of the opportunities when people are coming back outside. With some of our other businesses, we’ve seen great momentum. Our spirits company did a deal with Meijer. It was a massive deal for us. We’re now available at about 60 stores in their portfolio. That puts us at 260 stores overall for where our products are being served. Obviously, booze is Teflon in times like this.

concern going into 2021 is it is insanely stressful and everyone’s dealing with it on different levels. It puts a spotlight on what insecurities people already had and it just accentuates those. That’s a huge concern for my company and my greater community. If (businesses) are being mindful, listening to the community and listening to needs and desires and are being able to do the pivot, I believe they’re the ones that are just going to skyrocket. It just brings to light the type of grit that leadership can have in this situation. If you can make it through this, you can make it through any type of business issue in the future. I think it’s actually producing some strong leaders right now. I do want to put a caveat to that: While I’m very for that argument, I’m also very mindful that some business owners aren’t going to make it. There should be an important level of grace that comes with that. That if your business does not survive COVID, it is not your

fault. That it’s OK to just accept that. Because it may feel like your own personal failure. There’s going to be so many businesses that close. We have to be supportive of those individuals who tried as hard as they could and couldn’t make it work. That part of 2021 is going to be a healing process for businesses. KOWALSKE: If there is a humanity point of going through a pandemic and really trying to reach clients and customers and say: How can we help? I see that being hopefully a pivotal moment in how we all do business that people carry forward regardless of the pandemic and say, ‘We’re here to serve the customers and serve the clients.’ KELLY: I’m a relentless optimist. I usually stay in that space. I’m hopeful that because of the vulnerabilities to our food system that were exposed through COVID, people realize no one is really safe when it comes to food security. I’m excited to continue having those conversations and do the

work through South East Market to address them. JELKS: I’m optimistic. I think the country is having to look itself in the mirror and identify who we want to be moving forward. Where is our soul within all of this? We’re having a moment here and it’s a very important one. I think back to the riots that happened in downtown Grand Rapids in regards to race, civil unrests, protests. That was something that weighed heavily on my personal mental health. Not to the point when I wanted to do something crazy, but it’s stressful. I’ve been very excited that there have been some real conversations with corporate Grand Rapids that haven’t really happened before. There’s been some reckoning, understanding and enlightenment about some of the practices we have here that are extremely discriminatory. We have positive momentum and have to focus on the glass being half full in order to survive this thing.

How have you dealt with the necessary crash course in workplace safety regulations? JELKS: We just didn’t think about any of it within this context. If you look at any of the businesses that have been penalized for having too many people in their spaces, we’ve seen some cautionary tales that we don’t want to follow. LACH WHITE: There were little nuances we definitely had to be creative with. Overall, where we have had the most challenge is keeping a team functional and motivated. So much of our work was space-dependent. We’re huge advocates for mental health support. It’s important to talk about how you adapt your business to COVID, but I think that a lot of us are even more affected by our day to day workflow. That’s where most of our innovation has come from. KELLY: Even though we have a curbside bin and delivery set up, we’re noticing as other businesses are closed down or limited that a lot of our customers still want to come into the store and shop. A lot of us are just starving for community, so we are a space for that, too. Another thing we’re learning more about as we prepare to hire more staff is we need to have more people on call to work just in case someone contracts COVID or to address the mental health needs of our staff. KOWALSKE: The mental health part is spot on. Nobody has led an organization through a pandemic before. We’re all figuring it out as we go. As things change, we’re going to change, evolve and do everything we can to accommodate and share information as it comes in. We’ve said from the beginning as people start to come back to the office: Our job and goal is to make the office space the safest space that you can be outside of your house.

It’s hard to imagine we’ve been going through the pandemic for nine months. Then again, vaccines are on the way and new leadership is taking over in Washington. What’s your level of optimism heading into 2021?

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LACH WHITE: I’m definitely split on that. I have a very strong sense of optimism. My pessimism or Visit www.mibiz.com

Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

HEALTH BIZ

NEW GRAAHI LEADER SEEKS CONTINUED MOMENTUM ON ADDRESSING RACIAL HEALTH DISPARITIES

Telehealth will ‘stick,’ but many questions about vaccine, deployment remain unanswered

A Q&A with Vanessa Greene, CEO of Grand Rapids African American Health Institute By MARK SANCHEZ | MiBiz

A Q&A with Dr. James Grant of Blue Cross Blue Shield of Michigan

msanchez@mibiz.com

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

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n September, Dr. James Grant became chief medical director at Blue Cross Blue Shield of Michigan, making the transition during the COVID-19 pandemic that has elevated telehealth to the forefront in the industry. While a COVID-19 vaccine became available a week ago, starting with frontline health care workers and long-term care facilities, the pandemic will drive much of what happens in the health care industry in 2021, according to Grant.

How do you see the public health crisis evolving in 2021? We’re going to have to see where we are with everything from the vaccine to the continued growth of our COVID rates. I don’t think anyone in the country, from Washington to Los Angeles, knows the impact that the vaccine will have, knows the rates that we’re going to be able to give it to people, knows the potential side effects (and) knows the efficacy. That’s going to be a big unknown. We know that we’re going to give it. We know that there’s going to be frontline workers that are going to be getting it first, but there’s so many unanswered questions that nobody has the answer to. Give us a few months before we see COVID rates dropping. Are there side effects that take people out of work? Are we seeing patients coming in with COVID, but not maybe going into ICUs? There’s all of these unknowns that are going to take a while to get through.

What permanent changes do you think the pandemic will drive in health care? Telehealth is going to stick. We may see more people masked up before they talk to a patient closely. That may stick. One thing we’re going to see, and it’s a good thing, is a lot more attention to hand hygiene regardless of COVID. Eventually, when we get COVID under control, with better hand hygiene and more masks, we’ll see lower actual flu rates at the end of the year.

Do you see the crisis giving more attention to people taking better care of their own health? I think so. We’ve already seen people during the pandemic pay a little closer attention to obesity, understanding that we know obese patients and diabetic patients have a poor rate of survival with COVID. That’s been an impetus for people to take better care themselves.

How could the pandemic affect how employers alter employee benefits? I don’t know that we know necessarily how … it’s going to affect health benefits, but I think what we do know is how it’s going to affect the workplace. We’re going to see more work from home. We’re going to see a little more distancing in the offices. We’re going to see a little more flexibility where people work and what they can do at work, and we’re going to see a whole different office setting. That’s a permanent thing to see happen with COVID. We learned that we don’t necessarily need to be in the office for everything, we don’t have to be in a cubicle working next to somebody, and we don’t have to be in an elevator with 12 other people.

Do you worry about some of the steps people have taken to protect their health waning once the pandemic comes under control? Probably to some degree, but I don’t think we’re ever going to go back to exactly where we were. I think we’re going to see a little more social distancing (and) I think we’re going to see a little more frequent use of masks. It’s going to be somewhere in the middle to where we were and where we’re going to be, and it may take a few years to get to where we’re going to be.

What worries you as you look ahead to the next year? The worsening of COVID, a vaccine that doesn’t work (and) a vaccine that has tremendous side effects. What worries me is a population that doesn’t realize the importance of the booster shot with a vaccine.

If we talk again in a year, what do you hope to tell me about 2021? That we have a healthy community and that we have a Michigan (where people are) taking care of themselves. That we have a Michigan that’s conscious of infectious diseases like COVID, we have a Michigan that’s exercising more, that’s smoking less, and we have a Michigan that’s paying attention to obesity, hypertension and diabetes. We have a Michigan that’s looking toward a bright future.

DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

lifelong interest in diversity, equity and inclusion led Vanessa Greene to the Grand Rapids African American Health Institute, which works to address racial and ethnic disparities in health care. Greene joined GRAAHI as CEO in October, moving from Hope College where she held leadership positions in diversity and inclusion for nearly 17 years. She took over GRAAHI leadership as the COVID19 pandemic disproportionately affected African Americans and brought greater attention to longexisting racial disparities in health care. As GRAAHI Board Chairman Paul Doyle said upon Greene’s hiring: “Now, more than ever, it is important to continue to highlight the systemic inequities and racial health disparities in our community.”

What attracted you to GRAAHI? I’ve been working in the field of diversity, equity and inclusion at Hope College for 17 years. My interest in that work was really formed by the fact that I grew up in the ’60s in the Civil Rights movement. Growing up in that era, I was always interested in issues of equity. I also had my first job out of college where I worked for a state-funded program working with people with disabilities. All of my past work has evolved into my passion for the work of GRAAHI. So, when I learned about GRAAHI and learned that there was this organization in Grand Rapids that dealt with health inequity, specifically in the African American community, I said, ‘This is where my passion really meets my full purpose.’ Everything I’ve done in the past has been aligned in preparing me for this moment.

As we head into 2021 with the COVID-19 pandemic, what’s your top priority? Making sure the African American community and communities or color are prepared to deal with this worsening crisis. It is the top goal for GRAAHI. In doing that we need to amplify our education, research and advocacy to make sure the community is aware of the things that we’re doing, that people have access to resources and testing and understanding the importance of the vaccine, and that we’re working with them in ways they can protect themselves and their loved ones. To get the message out we have determined that we definitely need additional financial resources. Engaging the community in ways the community can walk alongside us, partner with us and support us is also very important and high on our list.

What do you hope to see GRAAHI accomplish in your first year? Looking at things more from the grassroots level, getting out and seeing a decrease in the ways that COVID is impacting the African American community and the community at large. We want to be a leading voice in that, a leading voice in the educational component of it, a leading voice in advocacy and research. Specific goals we have looked at are leading in the promotion and the participation of clinical trials and vaccinations within the African American community. That will require eliminating some of the distrust African Americans historically have had in the health care system. One of the ways

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we want to do that is by increasing culturally sensitive communication channels between the health care providers and African American patients and build that trust so that we can achieve high-quality care and better outcomes related to prevention, diagnosis, treatment and management.

The events of 2020 brought racial disparities in health care to the forefront. How do you think that will effect change in the health care system going into 2021 and beyond? What happened this past year with the protests, with the tragedies that we saw, stirred up the community and it created an awakening and a higher level of awareness and consciousness about some of the systemic issues that the Black community has been talking about for decades. One of the things that really came out of it was the recognition of systemic racism as a pandemic. Many of our leading health providers have seen the pandemic of racism as a health crisis. Moving into 2021, that level of awareness is heightened and an organization like the Grand Rapids African American Health Institute is positioned to be a leading voice in continuing to build those relationships with the health care providers as they’re having a greater understanding of how systemic issues and structures of racism lead to many of the health disparities that communities of color face. I see 2021 as a year we can come together collectively now that awareness has been increased and heightened and people are very much engaged at levels that we have not seen in the past.

What gives you hope for next year? I’m looking for transformational and sustainable growth within GRAAHI, particularly within our four pillars: education, research, advocacy and community engagement. If we really focus and build community support, partnerships and collaboration around those four areas, we can achieve that transformative and sustainable growth within our community, particularly around health equity.

What can the new president do in 2021 to improve health care in America? To make health care accessible to all people. Accessible and affordable. That just covers everything in terms of health care. And to fight hard and be diligent to just make sure every American citizen has access to quality health care. It should be a right for everyone.

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

HEALTH BIZ

PANDEMIC GIVES HEALTH CARE INDUSTRY ‘SOLID NUDGE’ TO MAKE NEEDED CHANGES A Q&A with Priority Health CEO Joan Budden By MARK SANCHEZ | MiBiz msanchez@mibiz.com

oan Budden retires Dec. 31 as CEO of Priority Health, Michigan’s second-largest health plan with more than 1 million people statewide enrolled in policies. As she prepares to depart after 12 years with the Grand Rapidsbased Priority Health, the last five as CEO, Budden expects COVID-19 pandemic will continue to cause disruptions. That includes within Priority Health, which had to adjust its operations because of state-ordered restrictions, as well as with the broader trend toward increased use of telehealth services, Budden told MiBiz.

What major adjustment that Priority Health had to make because of the COVID-19 pandemic will carry over into 2021? Priority Health has always had a lot of people have an option to work from home, and about 60 percent of our workforce did that at least on occasion. Of course, back in March we went full swing into 99.7 percent of our workforce working from home and we did that really quickly, within a week.

Our behaviors, our patterns of how we work, will never return to fully being in the office again, and we will not travel the same and we’ll connect differently. I think there are significant workforce ramifications.

What changes to the health care industry that were brought on by the pandemic do you expect to see stick around? We have been trying to encourage and promote virtual care for several years now, and it blossomed under the COVID pandemic situation, both on the consumer side as well as providers being thrown into it and becoming more accepting of it. A lot of people had experience with telehealth and will consider that more frequently in the future as a potential channel for care and to improve access to care. There’s big ramifications on the provider side, and there’s clearly some accessing (and) convenience improvements on the consumer side as well.

Where can telehealth make the biggest difference? One of the most promising areas is in the mental health arena where many geographic locations have a shortage of mental health providers. Telehealth

that the Biden administration will build off of the Affordable Care Act. Going back to the Obama administration, they realized at that point that there were flaws in the ACA, and we’ve been working to try and educate the Trump administration on flaws that exist and to try and make what we have better, rather than throwing the baby out with the bath water. I think that’s where we’ll continue to focus as a country.

in the mental health arena can really get greater access to the care that people need, especially with the extra stress and isolation and loneliness that this pandemic has caused. That can be very positive in the long run.

Does the pandemic accelerate change in health care? What I find in health care is we talk about it for years before we do it. We’ve been talking about telehealth for years. We’ve been talking about value-based payments for years. And whenever we talk about it we say, ‘it’s just on the verge of happening.’ But I do think the pandemic is going to give us a solid nudge to move us along that continuum.

What’s another example of how Priority Health responded to the crisis that will stay in practice next year? What we did in COVID was we identified the highest-risk people in our membership for COVID and we reached out to them to help them proactively understand and get the care they need to maintain their healthiest self. I think you’ll see more and more of that kind of outreach work being done on the health plan side to close gaps in care. If you’ve been diagnosed as a diabetic but you’re not getting primary

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care services, we are going to contact you and help you get an appointment. If you are over 50 and haven’t had your colonoscopy yet, we want you to do that. We think that prevention and early detection is the right thing to do. Those are the kinds of things I think you’ll see heightened, and technology and automation and risk-monitoring is going to get more and more sophisticated with more advanced data analytics and more advanced digital capability. That’s a real improvement for the better.

2021 will bring a U.S. Supreme Court decision on a lawsuit over the Affordable Care Act. How do you think the industry will respond to that ruling, regardless of how it goes? I believe that it will not be struck down. That’s my opinion, not fact. I believe

If the President-elect were to call you and ask for advice on what he could do to make health care better in America, what would you tell him? I would probably say something on pharmaceutical prices. It’s not lost on me, or probably anybody else in Michigan, that during one of our most expensive and heated political seasons this year, there were only pharmaceutical and political ads on TV. No one else could afford it, and that should tell us something. The advertising is just one piece of it. I would love to see a world where Medicare and Medicaid paid (care providers) actual costs for medical care for their enrollees, instead of commercial (insurers) picking up the bulk of the costs and subsidizing government programs. I don’t think it’s right that we have providers being so grossly underpaid for the Medicaid population and then having it optional if they actually participate in those programs. Government programs should pay their fair share.

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DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

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TO US, IT’S BIGGER THAN A BUILDING. At Triangle, construction is more than our job. It’s a personal promise to build spaces that cultivate growth, new beginnings, and redefine the limits of what’s possible. www.triangle-inc.com

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

FINANCE

MICHIGAN ECONOMIC OUTLOOK

Post-pandemic supply chain shifts could boost state’s industrial economy Office furniture, commercial real estate, retail, hospitality face major hurdles By MARK SANCHEZ | MiBiz

as Michigan, Robey said this month during an annual economic outlook for the region hosted by The Right Place Inc. ichigan’s economy could stand “When you have a global network and you to benefit in the years ahead as can’t move goods, it’s hard to build things,” Robey manufacturers move to reshore said. “I think there is huge demand and I talk to work to the U.S. after dealing my friends in the site-selection world across the with severe disruptions in their country and they’re seeing that experience, too. foreign supply chains when the coronavirus first Once things can happen, we believe they will surfaced in China. happen.” Reshoring industrial supply chains from overThe regionalization of supply chains “is seas marks one opportunity that West Michigan back on the front burner” in economic develophas in 2021 and the years ahead, according to Jim ment as companies begin to question whether over sea s supply chains are sustainable over the long term with the justin-time production model. “When you have a crisis like this, just in time doesn’t work, which Klohs Robey Ehrlich Long is where we see an Robey, director of regional economic planning opportunity or potential opportunity of them services at the Kalamazoo-based W.E. Upjohn reshoring,” said Right Place CEO Birgit Klohs. Institute for Employment Research. “Is there an opportunity for Michigan and then The ongoing difficulty that the pandemic for West Michigan in the reshoring of part of that triggered with global supply chains generates supply chain? In the short term, it’s a real issue, opportunity for a manufacturing center such no question.” msanchez@mibiz.com

Economic outlooks by Robey and others expect that manufacturing will lead Michigan’s continued economic recovery in 2021. The state’s economy will benefit if manufacturers re-establish U.S.-based supply chains following the disruptions that began early in the global pandemic, particularly if companies create domestic parts supply chains. “One thing that I think is going to be very interesting is this concept of manufacturing jobs coming back to the U.S.,” said Jeff Korzenik, chief investment strategist for Fifth Third Bank. “The old concept that job losses in manufacturing were somehow inevitable has been broken. The pandemic has highlighted the problems with a supply chain that is overly reliant on China,” Korzenik said. “When you shake up the global supply chain, the U.S. will pick up some benefits from that and obviously Michigan’s deep manufacturing history makes it well-positioned for some of this.” In its annual outlook, the Upjohn Institute expects manufacturing employment in the region to grow a slight 0.1 percent in 2021 and 3.1 percent in 2022. Service-sector employment in 2021 will remain 20.7 percent below preCOVID levels, according to the Upjohn Institute’s outlook. Even with strength in the manufacturing sector, and as productivity and output grow, overall

employment in the Grand Rapids area won’t return to pre-pandemic levels until “somewhere between 2023 and 2024,” Robey said.

‘Not a complete recovery’ Comerica Inc. Chief Economist Robert Dye believes Michigan’s economy sits poised to receive a lift in 2021 from the manufacturing and industrial supply base as the broader U.S. economy and demand pick up during the year. “As a whole, Michigan is very well positioned to feel a lift from a growing U.S. economy and a very much more optimistic economy in the second half of next year,” Dye said. “There’s a whole lot of pent-up demand out there and that will be very good for the Michigan economy through the second half of 2021 and into 2022.” One “big question” for West Michigan is the office furniture industry. The pandemic “has definitely broken through that aversion to remote working,” which has implications for demand in the office furniture industry and for commercial real estate, Dye said. “We all know that it works and we can do it now,” he said of working from home. In November, Comerica forecast Real GDP growth of 4.3 percent for Michigan’s economy in the fourth quarter and 2.6 percent in the first quarter of 2021. Comerica expects the state’s Real GDP to average negative 5.7 percent for all of 2020 and grow to a 4.5 percent annualized rate for all of next year.

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DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

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“When you have a crisis like this, just in time doesn’t work, which is where we see an opportunity or potential opportunity of them reshoring.” — BIRGIT KLOHS CEO of The Right Place Inc.

Michigan’s unemployment rate, expected to finish the year at 7.5 percent for the fourth quarter, will improve to 6.9 percent in the final three months of 2021, according to Comerica’s outlook. Meanwhile, University of Michigan economists expect the state to add 137,400 jobs next year and 99,400 in 2022. The projected job growth by the end of 2022 would return Michigan to within 3.4 percent of pre-pandemic employment levels recorded in the first quarter of 2020. “We’re seeing a substantial recovery, but not a complete recovery to where we were prior” to the pandemic, said Gabriel Ehrlich, director of University of Michigan’s Research Seminar in Quantitative Economics. The automotive and construction industries will lead the growth over the next two years, with losses continuing in the leisure and hospitality industry and other sectors, according to University of Michigan economists. “We are seeing a two-track recovery from the pandemic. Customer-facing industries lost more jobs and have recovered more slowly than other sectors. We expect that trend to continue,” Ehrlich said.

Unequal recovery In his monthly report, Grand Valley State University economist Brian Long, director of supply chain management research at the Seidman College of Business, noted the region “remains on the recovery track that began in July.” Even so, Long warned that given the effects of the second wave of COVID-19, “we should not be surprised if our statistics flatten or even turn slightly negative in the next few months.” “However, there seems to be universal agreement that when the new vaccine (or vaccines) finally reach a large portion of the population, we should see an economic boom,” Long wrote in the December report. Industrial purchasing managers in Grand Rapids and Kalamazoo answering Long’s November survey complain that their foreign and domestic supply chains “are still far from getting back to normal,” resulting in manufacturers struggling to maintain their production schedules as some components or materials are delayed. If COVID-19 gets under control and vaccines are effective and widely distributed, “we may see a short economic boom as pent-up demand fuels a round of purchases at both the consumer and industrial levels,” said Long, who hopes that Congress will enact a new economic stimulus package “to assist the vulnerable sections of the economy through the gap.” “However, it is worth remembering that some retail businesses, some restaurants, some movie theaters, and some segments of the office furniture business will NOT come back,” Long wrote.

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U.S. ECONOMIC OUTLOOK

EXPERTS FORECAST SUSTAINED GROWTH FOR THE U.S. ECONOMY IN 2021 By MARK SANCHEZ | MiBiz msanchez@mibiz.com

he U.S. economy that got hammered by the COVID-19 pandemic this spring heads toward 2021 on the rebound, although a surge in cases during the fall and renewal of restrictions in many states may limit economic growth nationally early in the new year. The economy has been steadily recovering since May, said Jeff Korzenik, chief investment strategist for Fifth Third Bank. The surge in COVID-19 cases through the fall and into the winter now poses a short-term risk for the economy that’s generally expected to grow at moderate rates in 2021, Korzenik said. The worst-case scenario is a double-dip recession, “although we simply don’t think that’s going to happen,” he said. While some states have reimposed partial restrictions, there’s less political will now compared to the spring for severe actions that could push the economy back down, Korzenik said. The distribution of vaccines that started last week also will likely begin to ease the medical necessity of restrictions, although Korzenik believes the U.S. won’t feel the full benefits from their availability until the second half of 2021. Korzenik Korzenik conservatively expects Real GDP growth in the 3 to 4 percent range for 2021. Despite the expected growth, unemployment nationally will remain elevated — especially in service sectors such as hospitality, food service and retail — and some job losses may prove permanent, he said. “We think it’ll be a long, long time before we see a return to that 3.5 percent unemployment rate we saw pre-pandemic,” said Korzenik, whose view on economic growth in 2021 is consistent with many Dye other economists who project further economic recovery next year. “We should have more than a glimmer of hope. There’s a lot of good news on the way,” he said.

Downside and upside risks The latest outlook from Comerica Inc. forecasts 3.9 percent Real GDP growth in the U.S. for 2021, with higher growth toward the end of the year. Comerica predicts the nationwide unemployment Manaenkov rate will be 6.3 percent for the full year, down from an estimated 8.1 percent in 2020. Chief Economist Robert Dye described Comerica’s latest outlook this month as “very complex,” with both downside and upside risks. The downside includes the surge in COVID-19 cases and restrictions that could potentially lead to mild or moderate decline in Real GDP in the first quarter, although Comerica does project slight growth in the first three months of 2021. “In the near term, we could see a softer first quarter than what we would like. I think the good news is that even if we do see a mild to moderate contraction in the first quarter GDP, usually when we talk about something like that, we’re always concerned about the cumulative effects. Does it spill over into the second quarter and the third quarter, and does the recession accelerate to the down side?” said Dye, who believes federal policy will keep the economy in positive territory. “What I’m saying is there’s a circuit-breaker here and even if we do see a moderate, mild decline in first quarter GDP, the risks of that snowballing into a deeper decline later in the year are pretty low,” he said. Dye and others also expect a federal stimulus package to come from Congress in the first quarter. The economy should get further aid from continued low interest rates and the COVID-19 vaccines that are now coming out and should become widely available in the spring, he said. “That definitely puts a floor under the downside risk. It’s really changed and brightened the longer-term outlook for most economists and financial analysts. Of course, we have to get to the long term and it’s going to definitely be a choppy and challenging few months this winter to get there,” Dye said.

Comerica predicts Real GDP will expand 2.2 percent for the first quarter, followed by 3.4 percent in the second. Real GDP grows to a robust 7.8 percent in the third quarter and then settles back to 4.3 percent for the final three months of 2021, according to Comerica’s outlook. Achieving herd immunity from the coronavirus could trigger a release of pent-up demand in the second half of 2021, said Dye, who predicts higher consumer and business confidence and increased business investment. Comerica economists expect unemployment nationally to ease somewhat during the year from an expected rate of 6 percent for the fourth quarter of 2020 to 5.8 percent a year from now. Even with unemployment remaining higher than pre-pandemic rates, Fifth Third’s Korzenik expects some sectors that are growing — distribution, manufacturing, construction — will again experience a tight labor market and skilled-worker shortage that they’ve felt for years. “I don’t think it’s too early to start talking about that. One of the challenges will be for employers to attract and retain talent and we’re going to be right back in that,” Korzenik said. “It seems impossible to be talking about tight labor markets since the pandemic began, but we’re going to be talking about them again by the end of next year.”

Virus controlling recovery A new economic outlook the Federal Reserve issued last week predicted Real GDP will grow 4.2 percent next year and 3.2 percent in 2022. While acknowledging the outlook was “subject to considerable uncertainty,” the Fed expects unemployment will decline from an expected 6 percent rate this year to 5 percent in 2021. “The path to economic recovery will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” the Federal Open Market Committee said in a statement following last week’s two-day meeting. In other outlooks, survey results this month from the National Association of Business Economists (NABE) point to 3.4 percent annualized Real GDP growth nationally in 2021. The outlook was based on surveys NABE conducted with members in mid November. The University of Michigan’s latest outlook issued in late November forecasts Real GDP expanding 4.2 percent for the U.S. in 2021, with economic growth returning to pre-pandemic levels in the second half of the year. Real GDP growth should taper off to 2.6 percent in 2022, according to University of Michigan economists. The outlook hinges on what happens with the pandemic and assumes that a vaccine becomes available to frontline workers by early 2021, with wider availability months later. “Regardless of what happens in the near term with the virus, I think the recovery will be pretty vigorous once we get a wide rollout of a vaccine,” Daniil Manaenkov, an economic forecaster with the university’s Research Seminar in Quantitative Economics, said during an annual outlook conference a month ago. U.S. job growth will return slower than GDP growth, according to Manaenkov. About half of the 18.2 million — JEFF KORZENIK jobs lost in the second quarter of Chief Investment Strategist at 2020 should return by the end of Fifth Third Bank the year. The economy should create another 3.9 million jobs in 2021 and 3.8 million the following year, eventually restoring most of the lost jobs by the end of 2022, Manaenkov said. University of Michigan economists project unemployment nationwide will decline from an estimated 8.1 percent this year to 5.9 percent for 2021, and further improve to 5.3 percent in 2022. The University of Michigan outlook also expects low inflation in 2021 and that the Federal Reserve will not increase interest rates until 2022.

“We should have more than a glimmer of hope. There’s a lot of good news on the way.”

Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

FINANCE

WEALTH MANAGERS WISH FOR CLARITY ON FEDERAL TAXES, STOCK MARKET SUSTAINABILITY A Q&A with Susan Vogel-Vanderson, managing director of Fifth Third Private Bank By MARK SANCHEZ | MiBiz msanchez@mibiz.com

all Street dealt with its share of volatility in 2020, a year with a deep decline at the outset of the pandemic followed by a later rebound. Citing volatility in the stock market over the last few years, some investors have shifted toward safety in managing their money. Susan Vogel-Vanderson, the managing director for Fifth Third Private Bank in West Michigan, hopes the new year brings some certainty to financial markets. A trusts and estates attorney, Vogel-Vanderson also is monitoring what could happen to tax rates in 2021 under the Biden administration, particularly if Democrats take control of the U.S. Senate after the Georgia runoffs.

What is the general mood out there among clients and investors heading into the new year? It’s been a very interesting year and the market’s been very volatile, particularly in the spring. We’ve had a nice recovery from the dip that occurred in the spring, but there was a lot of reticence on the part of clients to move money out of deposits and into investment management accounts over the course of this year. People were waiting to see what would happen with the election and obviously that wasn’t as clean of a day

in terms of results as probably most Americans would have hoped for. People are just starting to seem willing to move some additional assets to the market, but in October and November, clients moved even more money out of investments and into deposits with us. People have just felt uncertain and unsure throughout this environment in 2020.

Does that move to safety continue in 2021? I don’t know. There are a couple of different things at play. You have the Georgia (Senate) races that are yet to be decided. Markets tend to favor gridlock in government. Depending on the outcome of that race, we’ll see what happens. The other thing to really watch — and what we’ve been focused on and working with clients on — is that it’s really important to marry one’s investment strategy with a thoughtful overall wealth plan. We’ve been talking to clients right now more about making sure that they are accelerating income into 2020 because we fully expect that income tax rates are going to increase, again depending on what happens with that senatorial race in Georgia. We’ve been talking about bringing income into 2020, including taking some of the capital gains, because the Biden plan looks like it would raise the rate from 20 to 39.6 percent for individuals with income over $1 million.

DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

Heading into next year, what advice are you offering to clients? Each person or family’s situation has to be reviewed independently because everybody has a different circumstance. Some families have really flourished along with the rally and the equity markets in 2020. Others, particularly small business owners, have been hit very hard. We really have encouraged folks to meet with us and their attorneys and CPAs to look at what income can be accelerated into 2020, looking at things like doing a Roth (IRA) conversion, potentially.

What would you like to see the new president and new Congress do in 2021? Certainty would be great in terms of any upcoming tax changes. I worry about our ability to sustain an economy under higher income tax rates.

What are your hopes for next year? I hope for continued growth and some sustainability in the stock market.

What are some of the influences that will affect your industry in 2021? Wealth management is driven by a number of factors, but I would say the top driver would be what’s happening in the stock market and what’s happening with taxes — both income taxes and transfer taxes. Those are probably the primary drivers, and then you add in not only

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the generational transition (of business ownership) but the influence of women, for example. Women have come along professionally and as business owners, so it’s important to understand the interest of women as we’re looking forward in wealth management. The next generation that is coming up, the emphasis may be a little different in terms of what that Millennial generation, which is the largest generation, is interested in and how they want to communicate with their advisers.

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Pandemic cements move to remote work, automation; more stimulus needed A Q&A with John Ruther, managing director of O’Keefe Consulting LLC By MARK SANCHEZ | MiBiz msanchez@mibiz.com

ohn Ruther joined the Grand Rapids office of O’Keefe Consulting LLC in July as managing director. The company, based in Bloomfield Hills, offers a range of services including turnaround and restructuring consulting, corporate finance and litigation support. Ruther spoke with MiBiz about his view that some of the business practices that employers adopted in the pandemic — remote work and accelerating the use of automation — will remain in place in 2021 and beyond.

What do you see the economy doing in 2021? We’re going to see uncertainty running pretty much through the entire year and because of that, you’re going to end up seeing capital expenditures happen in I.T. and back-office automation and CPM software, (corporate) performance management. Because they don’t know exactly what’s going to happen moving forward, (companies) are going to be looking to beyond 2021 for the rebound. You’ll see where they’ll start analyzing data better. It’ll prep them for more permanent home office work too, I imagine. Then I also see that you’ll find a big push in 2021 even for the middle market to go with an ESG strategy, meaning environmental, social and corporate governance. That’s going to address areas like diversity and inclusion. It’s going to address areas like health and safety that obviously came up during COVID. In bigger companies, you see it fit in the area of sustainability, but we’re all really going to have to start adopting some strategies that will help us understand where things are going as we move forward. ESG is a great framework for that.

How will the economic fallout from 2020 play out next year? We aren’t done with some of these things that have popped up. You’ll end up seeing we’ll have a little bit of a setback in automotive. Automotive is going to have a short-term setback, according to everything they say. You’ll have to wait and see what happens in commercial real estate.

What does that mean for West Michigan? Here in West Michigan, we’re seeing the residential real estate stay strong. Commercial (real estate) is kind of interesting. We don’t know what’s going to happen with it, but I think you can see that it’s going to be a pivotal year. From the industrial standpoint, and you’ve seen it all over the place, we’re kind of short on industrial real estate, so I think that will stay strong. Everybody’s going to be developing strategies and you’re going to see the economy kind of moving along as is with people being very cautious.

If President-elect Biden were to call and ask for advice on what he could do to get the economy going again, what would you tell him? I would end up telling him that there needs to be some sort of stimulus that needs to be put in Visit www.mibiz.com

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place to help the businesses go. I also think that one of the things he’s going to need to do is work with businesses — maybe it’s tax breaks, maybe it’s whatever — to help them get into a mode of more automation (and) getting that infrastructure in place so that they can get the remote work, get the collaboration and keep the innovation going. He’s also going to have to take a look at some of the programs that are out there right now with some of the energy and climate issues and put some better framework around that so people know and get some certainty moving forward.

Businesses had to pivot fast in 2020 in response to COVID-19. What are some of those new practices that will become permanent? You’ll see office spaces/workplaces adopting longer term some of the health guidelines — a little more cleanliness and things of that sort. That’s going to bode well for our local economy with folks who are involved in industrial cleaners. You are going to see more people staying with the adoption of online buying and that’s going to have an impact on local retail, and I do see that there’s going to be a long-term play in working from home. Whether that ends up being a fad and five years from now there’s some great book that comes out telling us about how it’s fantastic for everybody to work together, or if it’s from an I.T. standpoint that collaboration ends up almost being a virtual reality where we’re right there with each other, we don’t know.

What makes you hopeful for 2021? Some of the things we did in 2020 to adapt, they can be carried forward. Automation … allowed us to say, ‘We don’t necessarily need to focus on things that aren’t value-added.’ Being able to do that and have a dispersed work group, that gives some hope. In West Michigan, the fact that people really want to be here is hopeful, too. People are coming back, people are coming in from out of state that have never been here. … That’s good news for us. Overall, business practices in West Michigan have been fiscally conservative. Even during the last downturn, we had quite a bit less distressed activity than the rest of the state. We pulled together as a community to help work on this. That’s going to continue as we move forward. I think we’ll pull through pretty nicely.

We’ve seen a lot of outside investors making acquisitions in West Michigan over the last few years. Does that keep going and pick up next year? I definitely see that continuing in 2021. That will definitely be an area (because) there is so much dry power right now (in private equity). Buyout funds are $853 billion nationwide. Even if we do go distressed, there’s a target right now of $122 billion in distressed funds out there nationally. With those going on and the attraction of (West Michigan), I have some folks that I work with that are more industry advisers, and they’re telling some of their clients, ‘If you’ve already made it through a couple of different things, rather than face the uncertainty and you’re getting ready to retire, look to exit.’ Last time around when we had problems, capital wasn’t there. This time, capital is not going to be a problem.

WEST MICHIGAN’S TOP DEALS & DEALMAKERS MiBiz presents the 8th Annual M&A Deals & Dealmakers Awards to spotlight best practices and excellence related to mergers, acquisitions, capital formation and other types of deal making throughout Western Michigan. We are seeking nominations for deals completed between July 1, 2019 and Dec. 31, 2020 in the following categories: n Deal of the Year: Manufacturing n Deal of the Year: Professional Services n Deal of the Year: Finance/Banking n Deal of the Year: Retail Sector n Deal of the Year: Real Estate/Development n Deal of the Year: Economic Development n Deal of the Year: Health Care n Deal of the Year: Life Sciences n Deal of the Year: Technology n Deal of the Year: Nonprofit n Dealmaker of the Year/Executive n Dealmaker of the Year/Adviser n Dealmaker of the Year/Investor Winners will be featured in a special editorial section in the February 15, 2021 print issue of MiBiz. Plus, we’ll highlight each of the winning companies and executives online and share their stories with industry professionals, executives, advisers, investors and other potential allies. It’s an exceptional opportunity to source new deals, attract employees, access capital and create strategic growth opportunities. The deadline for nominations is January 8, 2021 at 11:45 p.m.

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

ECONOMIC DEVELOPMENT

MEDC LEADER SEES ‘ASTRONOMICAL’ DEMAND FOR SMALL BUSINESS RELIEF

Dispensary owner — among early entrants in West Michigan — fears oversaturation

A Q&A with Mark Burton, president and CEO of the Michigan Economic Development Corp.

A Q&A with Greg Maki, owner of Agri-Med LLC

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

By KATE CARLSON | MiBiz kcarlson@mibiz.com

orn and raised in Muskegon, Greg Maki was the first to open recreational cannabis dispensaries in Muskegon, Ottawa and Montcalm counties. While many businesses ground to a halt during 2020, the cannabis industry continued to grow in West Michigan. Park Place Provisionary in Muskegon, Exit 9 in Nunica, and Edmore Provisionary are open under Agri-Med LLC, and Maki is working on opening more locations in the region.

What does the deployment of the COVID-19 vaccine mean to you? I’m going to get that shot the second I can. It will definitely help business, but it will still be a long time before most people will get it. We were blessed that the governor did find us essential this year, but having the vaccine will make it better for everybody. We need more businesses open in the community.

Are you concerned the cannabis market in West Michigan will become oversaturated? The market will definitely be oversaturated in Muskegon. There will be 10 dispensaries open in the county in 2021 for sure and there is still a lot of activity going on, but I don’t see Muskegon being able to support all the stores they have. The Grand Rapids recreational stores are also definitely going to take some of the business that we get.

How did you get into this business? I knew nothing about the cannabis industry three-and-half years ago, but we are kind of the industry leaders in our area. What’s most unusual is we’re local. I was born and raised in Muskegon, and 90 percent of the companies we compete against are big, multi-state operators or from Detroit. I still feel like we’re kind of cutting-edge. I am concerned about the oversaturation of the market, but still realize what a blessing it was to be first in the market. I didn’t realize the importance of that. We made all the mistakes first.

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How are you able to compete against larger companies as a local business owner? We expect to be growing in Park Place in Muskegon in 90 days — it’s 80 percent done. We knew we wouldn’t be able to compete unless we became vertically integrated. It would be harder if we hadn’t gotten in when we did, it’s all a big boy’s game now. People and municipalities can say they want to do something for local owners trying to get into the industry, but they care about the money and getting as many buildings remodeled as they can.

Is it still possible for local owners like you go get into the cannabis industry? It’s going to be a tough road. Even if they have their own building and grow operation, it’s still hundreds of thousands of dollars you need to invest. I sold everything I owned to get in and I came from an affluent family and it was a gamble for me. The taxes are enormous. You have to be very dedicated and work hard.

You recently opened your third dispensary, Edmore Provisionary. Do you have plans for more locations, and how do you decide where to open a new dispensary? We’re going to have eight or nine provisionaries by the end of 2021. It’s full speed ahead. Everybody on my team is running in a million different directions. We’re mainly sticking to West Michigan. Everywhere I look, parking is paramount because the regulations for parking, especially in some areas, are so restrictive. You see a nice building but if there is not adequate parking then it’s not worth it.

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DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

ark Bur ton took over t h e Mi c h i g a n Ec o n o m i c Development Corp. just days before Gov. Gretchen Whitmer issued her first state of emergency to curb the spread of COVID-19. Since then, the agency’s strategic plan has shifted dramatically. It has overseen 20 programs that delivered more than $170 million in relief funds, including a $10 million small business grant program last week in which demand far exceeded program limits. Burton has worked with Whitmer for years, including as her chief strategist prior to joining the MEDC and as her chief of staff while she served in the Senate.

How did the pandemic shift your early priorities and your impression of what the job would be?

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When I first started, I was specifically focused on a strategic plan that was adopted a little over a year ago. Once the (first stay-home order) was issued, it became clear that not only did we have a long-term public health crisis but also an economic crisis that would come as well. As an agency, we said: ‘Let’s think creatively and quickly about what needs are going to develop and let’s design and redeploy programs that would specifically target some of those.’ On March 19, the Michigan Strategic Fund approved the (first) Small Business Relief Program. It showed how we approached this crisis, which was we needed to act quickly without sacrificing quality and compliance that goes with programs like this.

Gov. Whitmer has been calling for lawmakers to pass a $100 million relief package for businesses. The MEDC opened a $10 million grant program last week that filled up immediately. Do you have a ballpark estimate of what might be needed to bridge these businesses? Obviously, each individual circumstance is slightly different. The responses we heard based on our Restart program in the summer — which was about $20,000 each, the most recent was $15,000 — was that money is helpful to pay fixed costs for their establishment as well as staff for two to three months. With the latest program, in 12 hours we had 7,997 completed applications submitted. We had another 14,000 still in the queue at 9 p.m. There’s going to be about 670 successful awards across the state. The demand is astronomical, which is why we continue to believe the state Legislature needs to come to some agreement over relief efforts before they leave for the holidays, as well as Congress. The ability to meet the needs of small businesses across the state is much bigger than the MEDC can handle and what the state can handle.

Could the MEDC launch more loan programs that are repaid over time? We did a loan program in mid March. The experience of that was mixed from a small business standpoint. Part of that was the continued length of the crisis. Even a very low interest loan someone receives in March, April or May — here we are five, six, seven months later and they’re saying: ‘Maybe I shouldn’t have taken that out.’ Is the possibility there? Yes, but I think it’d have to be a little more targeted because of some of the realities we saw play out in the spring, summer and fall.

What have you seen in terms of the flow of projects coming before the Michigan Strategic Fund? We’ve seen some wonderful projects come through that have been awarded some support. Perrigo in Grand Rapids was a great win, not just for the region but the state. Some projects like that have just continued and it seemed as though the crisis didn’t impact the kind of planning that businesses were undergoing for years. For some companies, the growth has been on course or continued; others have struggled and slowed. We’ve dealt with both, but it’s all-important to help those businesses that struggle meeting milestones to have a little more time.

What do you expect of Michigan’s economy in 2021, and are you optimistic? I’m optimistic and I’m excited. I think the work of Pfizer in Kalamazoo on the vaccine has really been able to provide that hope and that optimism that we’ll control and get past this health crisis at some point in calendar year 2021. We’ll still have work to do when it comes to a longer recovery, but we adopted a strategic plan a little over a year ago that is more relevant in this crisis than it was before the crisis. As soon as we can get the public health side controlled, then we’re able to start realizing that recovery in a long-term way.

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

ECONOMIC DEVELOPMENT

Cannabis attorney expects more municipalities to allow recreational sales in 2021 as benefits are realized A Q&A with Ben Wrigley, partner at CannaLex Law By KATE CARLSON | MiBiz kcarlson@mibiz.com

en Wrigley — along with fellow attorney Robert Hendricks — created a specialized law practice in 2013 under the CannaLex division of their firm, Wrigley Hoffman PC. As more adult-use dispensaries open across the state, Wrigley has emerged as a local voice in the cannabis industry to help make sense of frequently changing state and local restrictions for business owners. He has represented numerous clients seeking to start cannabis businesses in Michigan’s medical and adult-use markets, which he says are poised to expand to more municipalities.

Do you anticipate more municipalities opting into the sale of adult-use cannabis in 2021? I predict Grandville and the city of Wyoming will take a hard look at opting in. The negative-effects perception and potential constant criminal element of having dispensaries is not being borne out. As other cities and municipalities in the West Michigan area look at the

opportunities of opting in, they begin to outweigh the negatives. I believe many properties are going to be contesting the value of their properties next year, but a marjuana shop isn’t. Maybe a marijuana facility is a piece of property that has an upgoing value because of all these municipalities that are going to be hurting for money. I think we’ll see the number of municipalities opting in begin to increase more dramatically than in the past as they realize the revenue and property benefits.

What other trends do you expect to see in the cannabis industry in the new year?

Is it getting harder for smaller, local operators to get into the cannabis industry?

How many recreational dispensaries do you expect to see in Grand Rapids in 2021?

The more municipalities that (opt into adultuse), the value of the properties drops, the cost drops and you can get into it. Can the person who is poor or marginalized get in? No. It’s going to take some capital to get in. There are opportunities, but let’s be candid, those are generally in outlying areas. You’ve got to be able to acquire the property at a low cost. Then the problem again is there aren’t that many municipalities that are opted into adult-use, so there is less land available and the price is higher. If Grand Haven and Wyoming were to come in, the price would go down. If more smaller townships or villages started to opt in, the average person could get in.

The city of Grand Rapids was faced with the option of adding a consumption license to its ordinance. You can’t gather now, but I think as they study that over time and can see what has happened in other states around the country, they can see this is an opportunity. The industry is going to concentrate more on the retail sales and growing and processing rather than marijuana events or consumption licenses, but this is a great time to begin discussing it.

By the end of 2021 there will be a dozen retail enterprises in the city that have adult-use. They will have to be strategically located, and I don’t see the city reducing the restrictions. The next question they will have to deal with is the city center proper. Are we going to open up the city center to dispensaries?

Is there a chance marijuana use will be legalized at the federal level in 2021? The new administration, particularly Vice President-elect Kamala Harris, is on board with change from a number of standpoints. Change will come, but the problem truly lies in Georgia. On a federal level, if the Republican side of the aisle wins and continues a Senate majority, then they will want something for going along with

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taking marijuana off schedule 1. It would then be a matter of whether the Democratic side of the aisle is willing to give up enough. There could be some movement.

What effect would legalizing it at the federal level have on West Michigan dispensary owners? It’s fascinating. If I’m running a facility right now in the state of Michigan, obviously I’ve got employees, payrolls are being paid, and taxes are being paid. If I’m following all the state guidelines, I have a business. Especially if I’ve got my banking situation solved and find a bank that will work with me, maybe I don’t want it off schedule 1 because now the banking and lending process is open to everybody. Take it off schedule 1 at the federal level and every giant entity in the world is able to come in. That’s capitalism at its best.

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HIGHER EDUCATION

DESPITE THE ODDS, HIGHER EDUCATION SHOWS FLEXIBILITY DURING PANDEMIC A Q&A with Edward Montgomery, president of Western Michigan University By MARK SANCHEZ | MiBiz msanchez@mibiz.com

ike many in higher education, Western Michigan University moved fast to shift thousands of classes online when the COVID-19 pandemic hit this spring. Some of the changes made during the crisis will stick, according to President Edward Montgomery, who joined WMU in 2017. Montgomery served as chief economist and deputy labor secretary in President Bill Clinton’s administration and was also on President Barack Obama’s auto task force. Prior to joining WMU, he was the founding dean and professor of economics at the McCourt School of Public Policy at Georgetown University.

What’s been the biggest challenge for Western during this crisis? Uncertainty. If we just think about it from the very beginning when we went home in March, many people thought it would be a two-week order and then we’d return. Then another two weeks, and another two weeks, and another two weeks. This was an environment nobody planned for ahead of time. It was an environment that was continually shifting. We’re all captive to the disease. Planning around that shifting environment that we didn’t control was the

primary challenge. It tested our adaptability and flexibility as an institution. In many ways, I’m remarkably proud of us and higher education at large. If you would have asked people ahead of time if they think of higher education as flexible, most people would say, ‘no.’ They’d say we’d crack before we figured out a new way to do it, but we did.

What are some lessons learned in 2020 that will carry over into 2021? We asked different questions about how we operate and about what is essential and what is non-essential. We developed five different modalities for teaching classes, from the standard 100 percent in-person to 100 percent online and various combinations in between. That’s a way of teaching and learning that some of the faculty, I would expect, will retain. Many people have long predicted that (in-person) higher education was going to be replaced by online education. Based on student experiences, they want the in-person experience. They want the convenience the technology can offer, but they like that inperson interaction, and so our challenge is how to keep those two things going simultaneously.

What becomes more important for universities in 2021? There’s been a steady trend toward

increasing the importance of mental health. When we think about what the pandemic has done and the strains that it has imposed on students, faculty, staff, and the population of our country, there are growing challenges on how we preserve and maintain mental health. How do we make sure we take care of ourselves, both physically and mentally? That’s going to be an increasing part of what we do on campus.

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Putting on your economist hat, what do you expect for the U.S. economy in 2021?

We need to do something to support those who are unemployed and for those small businesses in particular that are forced to shut down. Another round of PPP and extended unemployment insurance benefits are the two biggest things we need so that we can continue to fight the spread of the virus and hold people over to the time when we can start reopening the economy in a more aggressive fashion and have help from the vaccine. We need something to get us over what I call a four- or five-month bridge.

If we don’t take some action (for a new federal stimulus package), I think there is a non-trivial risk of a double-dip recession and going back into recession. That’s what Chairman (Jerome) Powell of the Federal Reserve is worried about. If we have intervention, then I would expect that the recovery could weather both the constraints that are likely to come this winter with additional restrictions on activity, as well as begin to bounce back over the course of 2021. I expect we would get 3 to 3.5 percent growth in GDP under the assumption that we get some kind of federal intervention and stimulus.

What should they avoid? There is often in times of divided government a tendency to get into gridlock. The single worst thing we can do for the economy and the country is to get into gridlock. We have to find a way to accept half a loaf, compromise, move forward, make interventions and

What advice would you offer to the new president and Congress as the best thing they could do for the economy?

make investments that are targeted and prudent.

What worries you for 2021? I worry that we don’t get over our divisions or we don’t find a way around our divisions to keep moving.

What gives you hope for the new year? This country is remarkably strong. I think this country has found a way in the past to rally around together and to make progress. So, I guess I never lose my optimism about that. If we can get the pandemic in check and manageable, I think there are pent-up strengths and demands that can take us to new heights. Fundamentally, this is a strong country. We have to get out of our own way and we have to manage the pandemic. If we can do those things, I’m optimistic about the future.

INVESTING IN SCHOOL INFRASTRUCTURE DURING THE COVID-19 PANDEMIC

fter enduring over eight months of a novel virus, individuals and businesses alike are reimagining a life post-pandemic. While many businesses are coping with the short-term challenges by adding winter resistance outdoor spaces or plexiglass walls, other organizations are contemplating long-term changes as this pandemic continues to wear on.

BY: TRIANGLE ASSOCIATES

While some issues might be fixed from a shift to in-person learning, other problems will persist, and the stakes for improving America’s school facilities are higher than ever. Without state support, it is still unclear whether schools will be able to address concerns in the short-term to get leery teachers, students, and families to return. In turn, a district’s ability to retain families in their community to have the tax base to address building issues in the long-term remains unclear.

Alongside our social and work lives, our education system also continues to be upended. Schools are scrambling to meet the Center for Disease Control’s short-term solutions to minimize the spread of COVID-19 indoors to welcome students into their classrooms. Regardless of their adaptations, there have been multiple occasions when government regulations forced districts to turn to virtual learning, but classrooms won’t be kid-free forever. “In-person schooling will return as normal in the not so distant future,” said Matt Miller, project development manager at Triangle Associates. “Facility improvements and enhancements are extremely important as we return to normal to get families back into our local public schools.” As districts start to rethink how to address school openings, risk mitigation measures and public health regulations need to be considered within the school’s physical space. Still, before COVID-19, schools around the US were facing aging infrastructure issues, but the pandemic has brought more issues to light. In fact, according to a report by the Government Accounting Office, more than 40 percent of school districts need to update or replace their ventilation systems in at least half of their schools. Visit www.mibiz.com

normal, the importance of kids being in school and experiencing the social interaction of schooling, extracurricular opportunities, athletics, performing arts, and improved outcomes of inperson learning,” said Miller.

According to Miller, schools have also had to expand their drop-off and pick-up areas as more parents are opting to drive their kids to school instead of using the district bus system. “In addition to providing students, teachers, and parents with safe and adequate facilities in schools, the pandemic has highlighted a need for infrastructure designed to keep individuals healthy,” said Miller. “More parents are opting to transport their children during this crazy time, and school districts are adapting.” In Michigan, funding for school capital improvement projects is a local issue. Districts are required to get the majority of voters’ approval for tax millage increases to fund bond

referendums. Through this, voters permit the district to take out a loan and then pay back that loan over an extended period of time, much like a family takes out a mortgage for their home. While the pandemic has forced various discussions about the American education system, many remain optimistic about educational and infrastructural changes to come. Over the course of this pandemic, Triangle has helped six school districts secure the majority of votes to pass bond referendums, totaling nearly $236 million to fund their capital improvement projects. “Families who have stayed loyal to their local public school appear to be more supportive than ever as they realize, even more than

“After watching facility issues go unresolved for years, it has left many teachers and their unions wary,” said Miller. Additionally, many schools have had to defer maintenance due to the deep budget cuts to avoid teacher layoffs, which could cause trouble in the long run. “Many schools across the country are in need, and ongoing deferred maintenance projects are beginning to compound,” said Miller. “We can do better to support our local school districts.”

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

ENERGY

ENERGY OUTLOOK

Clean energy, Line 5, electric choice on Michigan’s energy docket in 2021 By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

ov. Gretchen Whitmer signed an executive order in late September creating a long-term climate change plan calling for the state to be carbon neutral by 2050. It’s an ambitious target at the state level, but it’s also one of myriad ways the public and private sectors are gearing up for the clean energy future. This past year, the state’s two large investor-owned utilities — Detroit-based DTE Energy and Jackson-based Consumers Energy

— announced their own emission-reduction targets calling for net zero by 2050 and 2040, respectively. Meanwhile, cities like Grand Rapids, Traverse City and Ann Arbor want to reduce their emissions through new renewable energy projects and electrified vehicle fleets, as well as by cutting energy use in buildings. Taken together, the plans chart a clear path to reducing Michigan’s use of fossil fuels, although fissures have emerged heading into 2021.

Distributed solar dispute The rapidly declining cost of solar energy makes

it an ideal candidate for utilities to build out their renewable energy portfolios. It’s also an increasingly attractive option for homeowners and small businesses that want to reduce their electric bills with an upfront investment that pays off over years. Although Consumers and DTE have announced plans to add thousands of megawatts of new solar energy, the companies want to build or purchase it in large quantities. Utilities in Michigan and other states have put up resistance to incentives for adding small, customerowned solar. In Michigan, clean energy advocates have called for fair compensation rates for the customer-owned power sent back to the grid, as well as lifting caps in state law on the number of customers who can participate in distributed generation programs. Those program limits are increasingly being met, including in Consumers’ territory, causing the utility to voluntarily double the program size. Laura Sherman, president of the Michigan Energy Innovation Business Council, says a key way utilities could support small-scale solar is by supporting legislation to lift the program caps entirely. “For our members, the biggest existential threat is this cap,” Sherman said, adding that new legislation on the issue is “going to be a top priority for us next year. The need for a legislative fix statewide to avoid relying on the random generosity of utilities is pretty important.” Margrethe Kearney, Grand Rapids-based staff attorney for the Environmental Law and Policy Center, said the distributed generation debate particularly affects small businesses that might want to offset their electricity with renewables, either for economic or environmental reasons. “We need to figure out how to optimize private and utility investments in distributed generation,” Kearney said. “Next year, that will be a huge focus at the (Public Service) Commission and what advocates are working on.” The MEIBC also is pushing for action to open community solar projects in Michigan where utility customers who may rent or not be on suitable property to install solar can still subscribe to it. As well, the group wants to see new bills introduced that expand property assessed clean energy (PACE) financing for energy efficiency and renewable energy projects on commercial properties.

Line 5, clean energy standards Meanwhile, environmental groups are closely following the legal dispute over the Line 5 pipeline and proposed tunnel project in the Straits of Mackinac. The debate is playing out in state and federal courts as well as the Michigan Public Service Commission, which will decide whether Enbridge Inc. can move forward with its tunnel

DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

plan that was negotiated in the final weeks of former Gov. Rick Snyder’s administration. Whitmer announced last month a plan to revoke Enbridge’s easement to operate Line 5 in its current form along the Straits of Mackinac lakebed. Whitmer gave Enbridge a six-month window to shut down the pipeline, which the company is challenging in court, while still leaving open the option for a tunnel. Environmental groups, tribes and some Northern Michigan hospitality businesses are aligned in support of shutting down Line 5 while construction trades, the Michigan Chamber of Commerce and oil industry groups favor the tunnel. Kearney said the ELPC has intervened in the pipeline case with state regulators. “Our focus has been on climate change and measuring the impacts the tunnel will have on the climate, which is a huge economic issue for municipalities and businesses,” she said. “We should not be developing significant infrastructure that’s not going to be used in 20 years.” Charlotte Jameson, director of legislative affairs, drinking water and energy with the Michigan Environmental Council, also notes that Michigan’s renewable and energy efficiency standards, which were expanded slightly in 2016 energy reforms, are scheduled to sunset in 2021. While the Snyder administration set longer term, non-binding goals for renewables and utilities have emission-reduction targets, a state law requiring specific percentages is key to holding utilities accountable, Jameson said. “Even with the economics favoring clean, efficient energy, that’s not sufficient. We will need strong standards to move us in the right direction on climate,” Jameson said. “My hope is there’s some renewed focus on those standards in the coming year.”

Large energy users’ priorities Outside of the clean energy space, advocates for large energy users — industrial utility customers — plan to push next year for legislation that opens up Michigan’s retail choice market. For more than a decade, Michigan’s retail choice program allowing customers to shop among alternative energy suppliers is capped at 10 percent of a utility’s electric sales. For years, a queue of companies have been looking to jump in. Although the cap was fiercely debated but not lifted as part of the 2016 energy reforms, groups are still looking to make Michigan’s market more flexible through “asset backed retail choice,” said Rod Williamson, executive director of the Association of Businesses Advocating Tariff Equity (ABATE). The legislation, which may be introduced in early 2021, would create some exemptions from the 10-percent cap, require large energy customers to give utilities a several-year notice if they plan to leave, and require a certain amount of in-state generation. “We think this hits all key points of Michiganbased assets and longer-term contracts with customers,” Williamson said. “It addresses utility concerns about jumping in and out. We think it provides a lot of upside to Michigan and these energy-intensive customers.” Visit www.mibiz.com

MICHIGAN UTILITY CEO TAKES HELM AMID MAJOR ENERGY TRANSITION A Q&A with Consumers Energy president and CEO Garrick Rochow By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

ike many utilities, Consumers Energy is at the beginning of a decades-long transition that will fundamentally change the way electricity is generated. Utilities are gradually replacing large, centralized coal plants with more distributed resources like wind and solar along with battery storage. Consumers announced in February a target to reach net zero carbon emissions by 2040. Its broader long-term Clean Energy Plan was announced in 2019 under former CEO Patti Poppe, who this month started a new job leading California’s largest utility, PG&E. The reins have COURTESY PHOTO been passed to new President and CEO Garrick Rochow, who’s been with the Jackson-based utility for 16 years, most recently as senior vice president of operations.

How have your duties changed since taking over as CEO, and what are some of your first priorities? Patti and I worked side by side through much of her leadership. Our business workings of the company as well as strategy is real solid. One priority is spending time with the investment community first to make sure we have a steady transition and ensuring we deliver on our ambitious clean energy goals. Another fingerprint is in the area of operational excellence — we’ve made great strides under Patti’s leadership. The third piece where I’m going to have leadership is on diversity, equity and inclusion. We’ve made great strides in this space over the years, but certainly the events of 2020 really suggest that more needs to be done.

You have West Michigan roots, working for the Holland Board of Public Works in the late 1990s and early 2000s. How has the utility business changed in that time? I started in coal plants, and this is a little bit of legacy for me. My dad worked nearly three decades for Consumers Energy. He came in in the ’70s, (which included) the Clean Air Act and Clean Water Act. Those were pretty substantial changes to how companies operated and frankly how environmental policy was being set across the nation. For a time, it was all about coming into compliance — that was my dad’s role. Fast forward to the late ’90s and early 2000s when I came into the company: We’re still generating much of our energy with coal, but we learned even in two short decades the impact of climate change and CO2 in the environment. We had 12 coal plants at one time. Now it’s down to five, and two of those retire in 2023. The three coal plants remaining are in this window of 2040, but are those retirements accelerated? Over 20 years, we’ve seen a dramatic shift in how we think about energy.

For Consumers or large utilities in general, what are going to be the biggest challenges to hitting those emission targets? We have these net zero commitments that require us to build out about 6,000 megawatts of solar between now and 2040. We’re familiar with building out stuff, the challenge is how do we ensure the reliability of the grid in that time period.

How long until battery storage is more widespread and can be paired with intermittent renewables? Prices need to improve; they’re not where they need to be. We have lithium-ion storage on the grid now, most of it in trials or pilots. We’ll be growing that over the next five to 10 years. I don’t envision until at least the 2030 timeframe we’ll see more large-scale lithium-ion storage.

Consumers Energy faced criticism — particularly from clean energy advocates — about its position on distributed generation. What’s your response to claims that Consumers supports large-scale projects but doesn’t want to incentivize customer-owned installations?

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We’re very much aligned with enhancing and encouraging solar in the state. It’s evident in our Integrated Resource Plan and our actions. When we see solar that’s on a home, sometimes that is two to three times the cost of solar at scale. We want to make sure that affordability is part of the equation. Right now, the distributed generation approach subsidizes much of that cost. We want to avoid the subsidy piece of this.

With Commissioner Sally Talberg leaving this month, the Michigan Public Service Commission will have had a new three-member slate since Gov. Whitmer took office. How does that new regulatory makeup affect the industry? We’ve got a great group of commissioners up there. It starts with the governor’s office and the commitment to decarbonize by 2050. We also recognize the commission is preparing for the future much like we are. We want to make sure it’s safe, affordable, reliable but also clean. There’s this general alignment that we’re all working toward those things. Visit www.mibiz.com

hscompanies.com Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

RETAIL

RETAIL OUTLOOK

Retail success in 2021 hinges on holiday shopping, adapting to e-commerce By KATE CARLSON | MiBiz kcarlson@mibiz.com

he pandemic pushed local retailers that traditionally rely on foot traffic to beef up their online presence and offer curbside and delivery options — mostly out of necessity to accommodate shopping from home and to compete with online retail giants. Even as in-person shopping restrictions and capacity constraints are eased in 2021, retailers are expected to make this e-commerce shift permanent. While online shopping is not a new concept, many small retailers were pushed into it faster than they might have been under normal circumstances, said Rick Baker, president and CEO of the Grand Rapids Area Chamber of Commerce. “The silver lining of 2020 was that it caused people to think and work differently, and there are always learnBaker ing opportunities from that,” Baker said. “A lot of businesses in our own organization and around town have tried something new that they might not have tried before and said they are going to keep certain things moving forward.” When the shutdown initially started last spring, Jean McCabe Marie’s was just beginning its online business when it had to shut down in-person shopping, said Matt Holmes, co-owner of the clothing and gift store with four locations in West Michigan. “Up until that point we had very little online

business. In eight months or so we’ve developed a pretty robust online platform and launched an app, which allows us to do live video selling and the user can purchase things QVC-style,” Holmes said, adding that about 2,000 people have downloaded the app. “It’s been a great way to at least reach a portion of our customer base that’s been unwilling or unable to shop in person for whatever reason.” The most successful retailers at Woodland Mall during the pandemic have quickly adapted to e-commerce shopping, said Marketing Director Cecily McCabe. “There is still a strong desire for people to shop brick and mortar, but embracing e-commerce has increased profitability,” McCabe said. While mall retailers are still using their stores for in-person sales, they’re also operating quasishipping and packaging centers from their locations, McCabe said. The close proximity to consumers compared to a major online retailer that may also involve delayed shipping is beneficial to shoppers, McCabe said. Shoppers can use curbside services to avoid high shipping fees and delays or use same-day retail delivery services that operate similar to DoorDash and UberEats if they want to get items the same day or quicker, she said. “These things are just starting up now, but we will continue to see these trends in 2021,” McCabe said.

Predictions difficult The pandemic has made this year’s holiday forecast the “most challenging ever” to predict, National Retail Federation Chief Economist Jack Kleinhenz wrote recently in a monthly economic review.

Tenden, Grand Haven. COURTESY PHOTO A lack of predictability is ultimately one of the biggest obstacles for retailers, Baker said. He anticipates that could improve some in 2021. “You can adapt even under the most challenging circumstances, which we saw this year, but it is easier if you can plan a little longer term,” Baker said. Forecasting for the fourth quarter of 2020 has been the most challenging part of the year, Holmes said. “Trying to stock up for what we hope the demand will be with implications out of our control like limited capacity and different restrictions makes it more difficult. And the fourth quarter typically drives sales for the year,” Holmes said. “Tying into that is working with our vendors who are going through that same process.”

Retailers are in the middle of the critical holiday shopping season, which will position store owners well for 2021 or lead to business closures. “If they don’t have a good Christmas or holiday season, it will be even more challenging,” Baker said. “This holiday season for the retail segment in particular is so important. They earn a huge percentage of their annual revenue in this period of time.” This year, the National Retail Federation is forecasting that holiday retail sales will increase between 3.6 percent and 5.2 percent over 2019, which would be between $755.3 billion and $766.7 billion. This includes online and other non-store sales, which are expected to increase 20-30 percent, or $202.5 billion to $218.4 billion, driven by this year’s strong shift to online shopping. Meanwhile, Amazon is having its best holiday shopping season in the e-commerce giant’s history as foot traffic dropped 52 percent at stores on Black Friday compared to last year, according to data from Sensormatic Solutions.

Trends for in-person shopping

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DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

McCabe said in-person shoppers are seeking deeper engagement with stores, which includes loyalty programs and booking private shopping sessions. “We have seen a lot of retailers enact private shopping with a stylist, a trend we expect to continue into the future,” McCabe said. “They are able to pull sizes in advance for the shopper, and it’s especially convenient for people who are short on time or feel they need extra assistance for whatever reason.” McCabe expects the return of sit-down dining to help increase foot traffic in 2021. A large portion of mall shoppers pre-pandemic were also older and therefore more at-risk of contracting the coronavirus. Mall officials hope to see these shoppers with pent-up demand later in 2021. Overall McCabe is optimistic shoppers will come back strongly to the mall this spring, but it will be a “long haul” to get there. “We need to get through December, January and February and then we’ll see more activity in retail consumers,” she said. Visit www.mibiz.com

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

Karen Kania and Peg McClure support nonprofits addressing basic needs. In particular, they’re focused on safe housing and alleviating hunger. They believe that if a person can’t nourish their body, they can’t nourish their spirit. As Karen and Peg considered what would happen to their assets after their lifetime, their professional advisor connected them to Grand Rapids Community Foundation. After their passing, the McKania Fund for the Economically Disadvantaged will be established at the Community Foundation to continue their legacy of providing for people facing housing and food insecurity. L E T U S H E L P YO U G E T S TA R T E D We’re here to help you understand your options and explore creative ways to leave your mark on the community and causes you love. Give us a call at 616.454.1751. grfoundation.org

DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

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NONPROFIT ORGANIZATIONS

NONPROFIT OUTLOOK

Nonprofit leaders cautiously optimistic about 2021, some organizations face tough challenges By MARLA MILLER | MiBiz mmiller@mibiz.com

ome nonprofits survived the first nine months of the pandemic relatively unscathed while others are hanging on in hopes that a widely distributed vaccine lifts capacity restrictions and renews confidence in gathering indoors. In such a diverse sector, the 2021 forecast brings a mixed bag of cautious optimism, and the reality that there will be nonprofits that close. “It’s going to get worse before it’s going to get better,” said Jeff Williams, director of the Community Data and Research Lab at Grand Valley State University’s Dorothy A. Johnson Center for Philanthropy. “It’s a long way between now and Easter. We have four full months of winter before we can start to get outside.” Williams believes the recovery will begin in 2021 but it will be another

Williams

Goorhouse

year before life returns to some semblance of normalcy. Some nonprofits such as food banks have seen donations and services increase. Others, like theaters and symphonies, chose to cancel seasons, reduce operating costs and “hibernate” before coming out on the other side. Nonprofits that remain open but are operating at reduced capacity are struggling the most. “The ones kind of caught in the middle — like an after-school program or children’s museum — are kind of open and kind of closed. That’s really difficult,” Williams said. A few factors will play a role in the sector’s recovery, including the health of the economy, getting the virus under control, and people feeling safe to resume activities. Nonprofits started to fail and disappear 18-24 months after the Great Recession, Williams said, and he predicts a similar trend coming out of the pandemic. “Nonprofits will run out of gas in spring to fall of next year,” he said. “Most nonprofits are surviving through 2020. I think we will start to feel the pain of nonprofits exiting in 2021 and 2022.” Charitable giving as of now is holding steady. Many people make

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year-end contributions, and nonprofit leaders remain optimistic that the funds will come in. “We’re expecting it to be down just a little bit,” Williams said. “Broadly speaking, donations tend to follow the economy, and broadly speaking the economy is doing OK.”

Concentrated giving expected Community foundations play a critical role in distributing money from donor-advised funds and other private philanthropy for nonprofit programs and services. Mike Goorhouse, president and CEO of the Community Foundation of the Holland/Zeeland Area, doesn’t foresee charitable giving dropping substantially in 2021 but perhaps becoming more concentrated. “It likely means that the trend towards getting a higher percentage of charitable dollars from fewer peo-

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Friis-Hansen

ple is going to be exacerbated during 2020-2021,” he said. Goorhouse sees a few emerging trends heading into the new year, including a deepening commitment to diversity, equity, and inclusion; addressing issues around affordable housing; and more funding for mental health programs. “Housing did not become more affordable during the pandemic,” Goorhouse said. “In many cases, affordable housing is an even greater challenge now than before.” Mental health services have been cut for years, making access and affordability a concern prior to the pandemic. The need for services remains high, and research shows it will be even higher in 2021. Foundations may prioritize more funding for summer school programs to help students who fell behind during virtual learning make academic gains. He foresees an uptick in need this spring from lower income families who will get smaller tax refunds after a lower earned income tax credit after months of unemployment. Additionally, Goorhouse predicts direct cash assistance programs will continue. The Greater Holland/

Grand Rapids Art Museum, Grand Rapids. COURTESY PHOTO Zeeland Direct Cash Assistance Program distributed more than $600,000 in 2020. The program provided $500 in emergency unrestricted cash relief to eligible individuals who lost their job or experienced significantly reduced hours of work during the pandemic. “Oftentimes, when you can’t feed your family or have to decide whether to fix the car to get to work, what you most need is resources,” he said. “It’s a strategy for how we serve alongside those that are financially unstable in our community. I think it’s here to stay.” In total, the program issued funds to more than 1,000 families in Holland/ Zeeland over the last five months. The program was the result of a collaborative effort involving CFHZ, Movement West Michigan, Good Samaritan Ministries and Community Action House. “I hope that foundations like CFHZ will make permanent some of our ‘altered practices’ that we used to make decisions and award grants during the height of the pandemic,” Goorhouse said. “Nothing like a crisis to help you experience a different, and possibly better, way of doing your work.”

Lingering concerns, focus on equity Diana Sieger, president of the Grand Rapids Community Foundation, said “there are a lot of things we don’t know,” and it’s hard to predict how 2021 will go. “When I look around and think about going into 2021, I would say the crisis around basic needs will continue,” she said. “If the pandemic lessens, we still will have very strong concerns about the health needs in our community and the economic crisis.” As an early pandemic response, GRCF repurposed many grants that were made prior to the shutdown and loosened the restrictions around funding for organizations that serve communities of color. Several pandemicrelief funds, including the GRCF’s La Lucha Fund and the Kent County Relief Fund, also distributed direct cash assistance to families and grants to businesses in 2020.

Sieger sees the foundation’s commitment to addressing racial inequities growing stronger in 2021, as well as its collaboration with other agencies and organizations. “It’s of no surprise that the COVID19 pandemic has really illuminated so much of the deeply historical and racial issues in our community,” Sieger said. “In our grantmaking, we want to make sure that our community is a place where everyone can access opportunity and experience a sense of belonging and prosperity.” The foundation’s team also meets with holders of donor-advised funds to help them understand the most critical needs. “If individuals have resources and have the money to give, now is the time more than ever,” she said. “This is not the time to say, ‘Well, maybe next year.’”

Arts organizations adjust Meanwhile, arts-focused nonprofits were largely forced to close their doors for several months in 2020, gradually reopening with occupancy limits and new safety regulations. Arts leaders responded by moving programs and concerts to a virtual format, and say they will continue to be nimble and flexible until a vaccine is widely available. “We just have to consider 2020 was really bad, and 2021 will also be full of challenges, but we have nine months under our belt of being responsive and being sensible about safety,” said Dana Friis-Hansen, director and CEO of Grand Rapids Art Museum. The museum didn’t reopen until August and adjusted hours to its three busiest days — two of which are free after a donation from Meijer Inc. GRAM also made various cost-cutting measures and reduced its budget by 19 percent for fiscal year 2021. “We want to be responsible with our funds,” Friis-Hansen said. “We don’t know how long this is going to last, so we’re being quite conservative in our spending.” The reduced hours will continue in 2021, as will safety precautions including temperature checks for all staff,

volunteers and visitors; face covering requirements; reduced capacity, plexiglass barriers and social distancing; increased cleaning and sanitization efforts; and an online ticketing system. Many exhibits and programs have a virtual offering for patrons who are still hesitant to visit or who live in another state. In some ways, it has helped expand GRAM’s audience. While attendance is down to roughly 30 percent of what it was a year ago, and GRAM has lost substantial earned revenue from admission fees, gift shop sales and facility rentals, Friis-Hansen said people are supportive and ready for a sense of normalcy. Many theaters and performing arts organizations had to cancel or scale back seasons, but West Michigan Symphony kept the music alive and moved concerts online. The live performances are recorded at the Frauenthal Theater, and subscribers and paid ticket holders receive an access code to watch for a limited time. “Our attitude from the start is we had too much momentum going; we weren’t going to let this stop us,” said Symphony President and CEO Andy Buelow. The symphony will continue with the virtual format until it is safe to gather indoors for live concerts — something Buelow hopes resumes later this spring or by fall. But the virtual replays may be here to stay, too. “We’re looking at this at an opportunity to operate in some new ways going forward,” Buelow said, noting he received an email from a patron in Arizona who watched “Home for the Holidays” online because they go south for the winter. Earned revenue from ticket sales has dropped, but individual giving and sponsorships “is as strong as ever,” Buelow said. The symphony scaled back its orchestra ensembles and reduced other expenses. “We weathered 2019-20 just fine, but 2020-21 is going to be harder because we have spent the entire year in a pandemic,” he said. “The longer this drags on, the more challenging it becomes.”

Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

NONPROFIT ORGANIZATIONS

New GVSU philanthropy chair awaits move to Michigan and delving into local issues A Q&A with Michael Layton, W.K. Kellogg Community Philanthropy Chair at Grand Valley State University By MARLA MILLER | MiBiz mmiller@mibiz.com

does that mean in terms of the composition of a board of directors of a community foundation, the staff of that community foundation, the organizations that it’s funding, it’s use of resources? And I see myself as an advocate and an ally for folks in community philanthropy to sort through those questions and to use the resources at our disposal at the Johnson Center in terms of research, data, learning services to help organizations answer those questions.

ichael Layton looks forward to the day when he can walk around downtown Grand Rapids or join colleagues for a coffee or beer in person. Originally from Philadelphia, Layton is Grand Valley State University’s new W.K. Kellogg Community Philanthropy Chair, the nation’s first endowed chair focused on community philanthropy. He joined GVSU’s Dorothy A. Johnson Center for Philanthropy in early September, but his relocation is on hold because of the pandemic. Layton founded and directed the Philanthropy and Civil Society Project at the Instituto Tecnológico Autónomo de México (ITAM) in Mexico City, where he developed a groundbreaking research and advocacy program to understand and strengthen philanthropy and civil society.

What are some philanthropic trends or issues that have arisen during the pandemic?

What interested you in the job at GVSU?

Do you have any specific research projects or goals in mind?

When I came back to the U.S., it was somewhat disheartening for me the extent to which many academics are really divorced from their fields of engagement and tend to publish and talk to each other and not to the greater public. One of the really refreshing things about the Johnson Center in general, and this position in particular, is the extent to which it sees itself as an important actor in terms of advancing philanthropy.

One important thing that I really want to dig into is to try to understand what the differences and similarities are between the way people in Latinx and migrant communities express their generosity and how those communities mobilize their resources on behalf of the causes they care most about. I really would like to dig in deeper and figure out ways to help community foundations in particular better engage and view their Latinx communities. Not just as communities in need of assistance, but as actively engaged participants as philanthropists in their own way.

What are some of your key priorities for 2021 and beyond? The last year has shaken up so many institutions and organizations. Like many people, I am trying to sift through and let the dust settle to figure out what comes next. But I think one of the clear priorities for the field of community philanthropy moving forward is how do we promote greater equity and inclusion in our communities. What

The one thing that sticks out with particular importance to me are the current debates over the assets that are being held in donoradvised funds and in foundations. And it relates to tax law, so it can kind of be an arcane discussion about things like payout rates. But the fact of the matter is there are billions upon billions of dollars that are held by foundations and in donor-advised funds and there’s a growing chorus of people that say, ‘We need those assets not just sitting in bank accounts accumulating interest, we need those mobilized and put into the streets to help people make it through this pandemic.’ For me, that issue stands head and shoulders above all others right now for the field.

What have been some of the pandemic’s biggest effects on the philanthropic sector, and how will that change operations for nonprofits in 2021? I think similarly for the impact of the disease on individuals who

UPCOMING ISSUES EGLE director on 2050 carbon neutral roadmap

Nonprofits seek restored charitable giving tax credits

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OCTOBER 12, 2020 • VOL. 32/NO. 26 • $3.00

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

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Action Metro Health pursuing open-heart surgery program in GR Grand reboot eyes By MARK SANCHEZ | MiBiz msanchez@mibiz.com

etro Health-University of Michigan Health likely will proceed with seeking state approval to perform open-heart surgery in Grand Rapids, a move that would bring more competition for the procedure to the local market. In a filing last week to the Michigan Department of Health and Human Services, Metro Health indicated it may pursue regulatory authority to launch coronary artery bypass surgery, cardiac valve repair or replacement, repair for birth defects of the heart known as

How should marketing change in the wake of COVID-19?

septal defects, and “other identified appropriate services.” Metro Health would spend $3.2 million to renovate and remodel space at its Wyoming hospital to perform heart surgeries, according to the Oct. 8 letter of intent to the state. The move comes nearly four years after Metro Health was acquired by University of Michigan Health System and Michigan Medicine, its academic medical center in Ann Arbor. “Michigan Medicine is world-renowned for cardiovascular care. This new program will bring that expertise to West Michigan, giving patients choice and access to the most sophisticated treatments and world-class cardiovascular

care. We are proud to help make this a reality,” Metro Health President and CEO Peter Hahn said in a statement to MiBiz. The letter of intent to the state signals a care provider’s interest in seeking a certificate of need (CON) to Hahn launch a new clinical service. Care providers typically will file a letter of intent that places them in line for state review during that quarter as the provider makes a final decision on whether to proceed.

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MAY 11, 2020 • VOL. 32/NO. 15 • $3.00

Experts warn of possible mental health ‘aftershock’ from COVID-19

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EXPLORING WHAT’S NEXT Experts preview workplace changes as economy slowly re-emerges

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

f the SARS outbreak 17 years By MARK SANCHEZ | MiBiz ago in Asia is an accurate indimsanchez@mibiz.com cator, behavioral health care providers could see a patient Hikers in Pictured Rocks National Lakeshore in the Upper Peninsula. PHOTO COURTESY OF PURE MICHIGAN eople who have been working from surge in the coming weeks and home for weeks because of the months as the COVID-19 pandemic COVID-19 pandemic will return to a takes an emotional toll on people. decidedly different workplace than One-third of the people in Asia By MARK | MiBiz they had previously once SANCHEZ the economy gets were unable to return to work full going again. msanchez@mibiz.com time after the SARS pandemic, six Changes will span a range of workplace in 10 experienced fatigue, and half Pure Michigan camenvironments, includinghe offices, shop floors, had difficulty sleeping. paign thatWearing touts the PAGE 12 PAGE 14 breakrooms and conference rooms. In Hong Kong, the suicide rate statemore as a travel destinaface masks and having distance spiked nearly 32 percent for two should soon between workers will tion become thereturn norm, years after SARS. Hong SINCE Kong also1988 MARCH 16, 2020 • VOL. 32/NO. 11 • $3.00 SERVING WESTERN MICHIGAN BUSINESS www.mibiz.com to spur fall and checks winterand travel along with routine temperature experienced “increases in persistent and help tourism-reliant small continually cleaning and sanitizing the workdepression, anxiety, panic attacks, businesses were hit hard place, tools, equipment andthat workstations. psychomotor agitation, psychotic this summer by other the COVID-19 Those and pracsymptoms, delirium, and suicidpandemic. tices are all part of the proality,” accordA s M“new ic h i gnormal” a n’s t oufor r ism verbial ing to a white GR debates increasing industry continues from employers workingtotoreel navpaper from Pine sites for marijuana igate the deadly pandemic Rest Christian businesses; equity, that has disrupted daily rouMental Health local ownership tines, thrown the economy Services on the concerns remain into recession and may linpotential menSmall businesses around West Michigan have been affected in many ways ger for many months until a tal health effects Kennedy P E R I O D I C A L S By SYDNEY SMITH | MiBiz by the ongoing pandemic. While some are seeing increased business, most Eastburg vaccine is developed. of the COVID-19 ssmith@mibiz.com “As business leaders, you have to make pandemic. companies are being forced to deal with the fallout by getting creative, mansure you’re taking the responsibility for your The white report pulls data from GRAND RAPIDS — Following aging cash and finding new ways to stay engaged with customers and cliemployees,” Kentwood-based Autocam a number of sources to issue a call to mixed messages from the Grand Medical Devices LLC CEO John Kennedy action for care providers to prepare ents. In this Coping with COVID-19 special report, MiBiz speaks with two Rapids City Commission late last said during a recent back-to-work webinar for the “aftershocks” from the pandozen WestByMichigan companies MARK SANCHEZ | MiBizto hear how they’re navigating the current month, marijuana advocates hosted by Advantage Benefits Group Inc. “It’s demic and “minimize the fallout of hope city officials will ultimately incumbent on us as businesses to make sure COVID-19 on mental health in our uncharted msanchez@mibiz.com waters. SEE PAGES 12-19 open more properties for medicommunities.” See WHAT’S NEXT on page 8 he coronavirus outbreak that’s batcal and recreational facilities. “ T h e w a r n i n g s i g n s a re tered Wall Street and caused supply On Feb. 25, the commission there right now that we could in PAGE 12 Visit mibiz.com for ongoing coverage of the business implications of experience COVID-19 ainsignificant West Michigan. chain disruptions for some manuwent back and forth on appliMichigan facturers has yet to interrupt transcations for both types of facilisurge in behavioral health needs actions, although more conversations are ties. The city has approved 24 that emerge out of this COVID crioccurring as part of due diligence, according licenses for medical marijuana sis,” Pine Rest CEO Mark Eastburg to M&A professionals. businesses, while another 14 By ANDY BALASKOVITZ | MiBiz benefits for people active in their state’s Program loan — call hosted by the West Michigan Policy told MiBiz. “We ought to be preDeals that are in process involve a deeper this means workare waiting for approval. The abalaskovitz@mibiz.com system. In Michigan, which requires 75 Forum. As of early May, Sturgis Molded pared as a state and a community dive into due diligence in where city hasn’t finalized recreerssituations unemployed as a result of the panpercent of the loan Products was running at about 10 perfor that in case that happens.” s some employers express demic could receive up to $962 a week. to be used for payone company is acquiring ational marijuana zoning regcent capacity involving transportation T he s t r e s s, a n x iet y a nd concern about retainThe federal benefits roll in order to be and medical devices. The company has depression the pandemic triganother that sources raw are available for ulations and won’t start accepting workers who are earnup to weeks, while state benefits forgiven — faced about 200 employees. gers can come from the loss of a materials or 39 components ing applications until April 20. were expanded more workers and backlash from “I’ve called people and there has jobrlier or income, grief, By JESSICA YOUNG | MiBiz Ea t his mont h and at tuncerhe West Michiga n ing more income through from China. Buyers to are Hours after voting to delay benefits than their 26 weeks. employees, since been communication that said, ‘I make tainty about the future. At Pine jyoung@mibiz.com Automotive Suppliers Symposium in Grandunemployment Rapids, asking extended for morefor informarecreational and pause mediPresta normal reports have shown conthe loan effectively more by not coming in,’” Presta told Rest, experiencing a rise Mike Wall,“we’re director of automotive analysis in Grandpaychecks, researchers say tion aboutMedia supply chains, cal applications, the City long-term cern among employers who pay less means workers would be paid their MiBiz. “That’s out there.” in many the stressors that are he automotive industry is scrambling to strike Rapids at IHSofMarkit, forecasted light vehicle sales structural fixes are needed backup plans and the Commission reversed course state than of the amount of benefits worktypical wages. Sturgis Molded Products’ operaknown to increase risk forthis sui-year, in to a balance between near-term execution and of 16.8 million units in the U.S. the seg-and federal programs. capabilities replacement after the six commissionThe $2.2 trillion CARES Act passed ers are receiving. In at least one case Kelly Presta, vice president at Sturgis tors and first-line positions make cide,” said. utility vehicles and pickup unsteady industry disruption from the novel ment that Eastburg includes cars, suppliers. ers could not agree on how to Brown in late March included provisions to“It’sin still Washington state, a company Molded Products Co., shared these less than the maximum amount coronavirus outbreak. trucks. very new. move forward. A last-minute See MENTAL HEALTH on page 6 addcon$600 in weekly unemployment thatitreceived a Paycheck Protection concerns during an April 22 conference See UNEMPLOYMENT on page 5 That’s according to industry experts who say the Already, that outlook is changing as COVID-19 Everyone’s trying to figure out on the fly, dispute among commissioners effect of the virus, which has been spreading around tinues to develop across the country, he told MiBiz. but if clients were selling source parts from also involved equity and local the globe since late December and shut down producAs of this report, IHS Markit was still finalizing a China, you’re going to have to make sure ownership. P E R sales I O projection, D I C A but L SWall expects the new foretion in specific regions, has shifted forecasts for global revised they have a backup supply-chain plan in Commissioners were conautomotive production and U.S. sales downward. cast to drop to 16.5 million units. case there is a major disruption,” said Mike sidering zoning amendments Indeed, Gov. Gretchen Whitmer announced “Everything is happening so quickly and there is Brown, who leads the M&A practice at investrecommended by the Planning the state’s first two presumptive positive cases so much volatility that given the circumstances, 16.5 ment bank Charter Capital Partners LLC in Commission that would have in Oakland and Wayne counties on March 10, fol(million) will still be a very good year,” Wall said. Grand Rapids. eliminated a waiver process See SHIFTING DYNAMICS on page 4 lowed by a state of emergency declaration. See DUE DILIGENCE on page 9 for sensitive land uses like religious institutions and opened more properties for cannabis development. Marijuana advocates have PAGE 11 sought to relax distance requirements in order to expand the number of properties qualified for marijuana business use, By ANDY BALASKOVITZ | MiBiz seeking a constitutional amendment graduated, or progressive, income tax. schools and road and water infrastrucwhich they say could also help abalaskovitz@gmail.com to change Michigan’s flat 4.25 percent The Democratic-backed proposals have ture starting in 2022. The plan would address concerns over a lack of income tax to a graduated structure failed to gain traction in the Republicanreduce the state income tax rate for local ownership. s progressive political advobased on income. The Board of State held state House and Senate. individuals with income of $175,000 or Joe Neller, co-founder and cates seek lower state income Canvassers is expected to decide in the In t he late 1960s a nd 1970s, less and joint filers with income at or chief government affairs offitax rates for most Michigan coming weeks whether organizers can Michigan voters by wide margins below $350,000. According to organizcer at Dimondale-based Green residents while higher earncollect signatures in hopes of putting rejected ballot proposals for a graduers, 95 percent of Michigan residents Peak Innovations LLC, said the ers pay more for infrastructure needs, the question to voters in November. ated income tax. Such a change would would pay a lower state income tax rate Planning Commission rejected the state’s leading business group is “If this qualifies for the ballot, require a constitutional amendment. than they do now. a provisioning center proposed bracing for a highly contentious politfrankly, it would be war,” said Rich However, supporters say growing Of the 41 states with income taxes, by his company because of the ical campaign. Studley, president and CEO of the income disparities and declining pub33 have a progressive structure. Federal site’s proximity to a church, Organizers behind the Fair Tax Michigan Chamber of Commerce. lic services have shifted public opinion. income tax also follows a graduated even though the company had Michigan campaign, which was For years, the Chamber has opposed The Fair Tax Michigan plan would raise model. a waiver from the church. announced in late February, are efforts in the state Legislature for a See INCOME TAX on page 3 $1.5 billion in additional revenue for See STATUS QUO on page 8

P COPING With limited funding WITH restored, Pure Michigan T shifts focus to fall and COVID-19 winter tourism

Former Muskegon coal plant to get new owners

Spectrum Health prioritizes buying local

STATUS QUO

See METRO HEALTH on page 3

Aerospace suppliers brace for continued turbulence

— C ORON AV I RUS I N M IC H IG A N —

Virus concerns drive additional due diligence in M&A transactions

Golf courses bounce back with banner summer

COVID-19 highlights structural changes needed for unemployment system, researchers say

Automotive analysts see shifting dynamics amid coronavirus spread

the pandemic, and with the restoration of limited funding, Travel Michigan Vice President Dave Lorenz sees an urgency to ramp the Pure Michigan campaign back up this fall — in some form — to support the tourism industry that’s populated by many small businesses. When working with limited funding, Travel Michigan would typically put its resources into the “big season” and promote See PURE MICHIGAN on page 15

downtown amphitheater

1.4.2021

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Industry 4.0 SEE PAGE 5

become infected, nonprofits that are smaller, ones that are often led by folks from communities of color, are generally disadvantaged in terms of the resources they have available. And I think the crisis that they have felt has been more acute than some of the larger, more well-established organizations. And at the same time, they operate in service to communities of people that have been the most severely impacted by both the health crisis, the economic downturn and the social unrest and injustice. So, I think that kind of triple threat has really threatened to undermine the viability of a lot of organizations.

Historically speaking, where does COVID rank by way of challenges, especially for social service and arts organizations? Are you optimistic the sector will rebound? I’m optimistic the creativity and commitment of people in (nonprofit) sectors — the arts and culture, social service organizations, advocacy organizations — are going to regain their footing. And I’m optimistic that funders and government and foundations will be there to help them reestablish the very important contribution that they make to the quality of life of every corner of this nation.

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By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com GRAND RAPIDS — The business group that pushed several major developments over the past 25 years has multiple new priority projects, including a downtown Grand Rapids amphitheater. Grand Action, which reconvened earlier this year after a nearly three-year hiatus, is studying the feasibility of an amphitheater, expanded convention center space and a professional soccer field. On Oct. 2, the Grand Rapids-Kent County Convention/Arena Authority board approved a resolution authorizing the authority to “proceed with efforts to determine whether there is an appropriate site for the location of an amphitheater.” Grand Action has effectively taken over those efforts from a task force appointed by the CAA Board. Grand Action has “embraced this potential (amphitheater) project and likely will get involved in its planning and fundraising for it,” Steve Heacock, president and CEO of Grand Rapids Whitewater and CAA board member, said during the meeting. “We don’t know that for certain yet, but that’s a very, very good potential.” Heacock added that multiple studies over recent years have all concluded a downtown amphitheater would result in positive economic activity, and that “site selection is the next big step.” Two potential sites on Market Avenue along the Grand River have been previously mentioned: 201 Market SW, where the city recently walked away from a separate $270 million development deal, and 63 Market Ave. SW, the site of the former Charley’s Crab restaurant. The three development projects have been on the radar of civic leaders, developers and city officials for nearly five years. Grand Action, which dissolved at the end of 2017 and relaunched in March under new leadership, has retained consulting firm CSL to provide a new market feasibility study on the projects. The study is expected in late November. Grand Action 2.0 is led by Carol Van Andel, Dick DeVos and Tom Welch, regional president of Fifth Third Bank. DeVos is the only holdover from the previous Grand Action team that was also co-chaired by John Canepa and David Frey, both of whom retired. Formed in 1992, the original Grand Action group pushed major downtown developments such as Van Andel Arena, DeVos Place Convention Center, the relocation of Michigan State University’s medical school to Grand Rapids and the Secchia Center, the Downtown Market, renovation of DeVos Performance Hall and the Grand Rapids Civic Theater.

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Construction industry adapts to new safety protocols

Michigan Chamber prepares for ‘war’ over graduated income tax proposal

Leaders push for action to raise wages PAGE 21

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Business of Senior Care SEE PAGE 16

DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

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WOLVERINE STRONG

Wolverine Building Group is proud to wrap up another year with a great team. Our passionate and relentless employees stepped up and stepped in to make great things happen through many challenges this year. As we seek possibilities and find solutions for the coming year, we stand strong in our purpose to positively impact the people and communities we work in.

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

A tunnel for Line 5 is the right solution. Protecting Michigan’s waters is critically important, as is providing the energy that fuels Michigan’s way of life and drives Michigan’s economy. That’s why we’re working to build a tunnel for Line 5, deep under the Straits of Mackinac. This underground concrete tunnel provides multiple layers of protection and ensures virtually no chance of a leak into the Great Lakes. It eliminates the possibility of an anchor strike and provides the uninterrupted energy supply Michigan needs.

DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

Our Line 5 pipeline has operated safely and reliably in the Straits of Mackinac for more than 65 years. We remain committed to safety in the Straits. That’s why we’re replacing energy infrastructure and strengthening safety where it matters most. Learn more at enbridge.com/line5tunnel.

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SPORTS

Pandemic slows momentum for West Michigan sports tourism

OUTDOOR RECREATION CONSUMERS SHIFT BEHAVIOR DURING PANDEMIC A Q&A with Brad Garmon, director of Michigan’s Office of Outdoor Recreation Industry By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

A Q&A with Mike Guswiler, president of the West Michigan Sports Commission COURTESY PHOTO

By JAYSON BUSSA | MiBiz jbussa@mibiz.com

ther than professiona l and high-level college sports, most athletic competition was sidelined on and off throughout the year, yet another industry casualty of the COVID-19 pandemic. It has made life tough for the West Michigan Sports Commission, which focuses on marketing West Michigan as a sports tourism destination. Since March, the commission saw 71 sports events canceled because of COVID19, equating to 32,242 lost hotel room nights. WMSC President Mike Guswiler ref lects on what this does for his organization and when we might see sports return in full force to West Michigan.

It’s no mystery that 2020 was a costly disaster for the sports industry. How long will it feel the repercussions? As we look at what happened in 2020 — and (the pandemic will) likely go into the first quarter of 2021 — there has been business that has been displaced. Event rights holders and national governing bodies have had events canceled. You look at the NCAA and March Madness as one example. What has been happening is kind of a snowball effect that these events that were lost are being kind of replaced in 2021. If you’re bidding on those events, you have to skip a cycle. So 2021 is going to be a challenging year from that perspective.

Are many organizations and governing bodies at least getting dates on the calendar with the idea that it would be easier to cancel if health conditions don’t improve? To put it simply, no, they’re not. We’re holding different virtual sales opportunity events, talking to clients, trying to learn where they are sitting. That’s the challenge. They just don’t know. Yes, they’re planning but with hesitation. They’re not moving forward and signing contracts and identifying locations because none of us really know.

Is enthusiasm in sports down in general? From a sports perspective, I think we’re hungry for it. Coming off the spring and the

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initial shutdown, once the governor lifted the stay-at-home orders, we got the Art Van Sports Complex (which WMSC operates) up and running. We put a lot of protocols in place and made sure our staff was safe and made sure spectators and teams felt comfortable coming there. We hit equal numbers of participating travel teams as comparable to 2019 once we got running. That told me that people were tired of being cooped up in their house. They wanted to get out.

How important is it that West Michigan’s long-standing minor league sports organizations survive this, and can they? I don’t know their overall financial situation to weather the storm. I think once we can open up and once we can see the minor league sports and major league sports get going, the fan base will be there for them and they’ll survive. We want to show that we are a sports destination and we need our minor league teams to really be there to have great success on the court, on the field, on the ice that we can point to and kind of brag about our city being a great sports destination. So we have representatives from the Whitecaps and the Griffins on the board to kind of help to talk about (West Michigan) as a sports destination.

Have the restrictions in Michigan made our state a tougher sell for sports? One example we’ve seen in opportunity lost is a handful of AAU basketball tournaments relocated to Indiana because they weren’t allowed to compete in Michigan. You just feel like you don’t have the same momentum. We don’t see the same number of RFPs out there and people planning for the immediate future. With some of the varying restrictions state-to-state, we have already seen these youth basketball tournaments turn to our neighboring states because they can participate there. Right or wrong, I think we all have to be careful and do our part to bring the case count down and not spread the virus. At the same time, we have to look at our economy and how we keep that stable and how we prepare ourselves to be ready when it opens.

ov. Gretchen Whitmer created the Office of Outdoor Recreation Industry within the Department of Natural Resources in May 2019, hoping to elevate the state’s status as a recreation destination. It’s tough competition with states like Utah, Colorado, Vermont and Maine, but Michigan has its own set of recreational assets, anchored by the Great Lakes and vast amounts of public land for backcountry activities. Brad Garmon was tapped to lead the office, and he says elevating the industry here means making connections with more traditional sectors like manufacturing. Aligning those sectors, which has accelerated during the pandemic, has been among Garmon’s priorities since taking the job. COURTESY PHOTO

When you got started in the job, connecting with sectors like manufacturing that may have not been tied into outdoor recreation was among your top priorities. How has that gone, particularly during the pandemic? Really well. It’s weird to say, but I think it got expedited because of COVID in a lot of ways. In a lot of interesting ways, it actually forced me into a triage kind of thing. I went from ‘how do I systematically and strategically grow this industry’ to having to learn really fast what it’s made of and how can I keep it alive. I was building a lot more relationships really quickly to help figure out where the sectors were at. Now I’m shifting back into more of a growth mode as we come out of this. At this point, we have this influx of consumers in the market and it’s really booming. How do we capture that and how do we merge with this new cadre of users?

What have you learned about consumer behavior and activity during the pandemic? One of the real benefits of the creation of this office and creating a nexus point is just the access to data, especially on the consumer side. Consumer behavior is changing through the pandemic, and the partnerships with the private sector are so important. They’re more nimble about it. As an example, I was talking with (Boyne City-based) Shaggy’s Copper Country Skis the other day. They are seeing a market trend toward backcountry sports — downhill, cross-country, snowshoeing, things like that. When you dive into the retail for winter, they’re having some of the same (supply chain) issues as bikes. People are trying to get it before it sells out. That’s what we want and need: More of a responsiveness to consumer behavior the private sector is going to have. Michigan should be really good at backcountry — we have tons of backcountry opportunities. But do we recognize that in time and make sure people have the information to do it safely?

A recent U.S. Bureau of Economic Analysis report showed outdoor recreation had a 1.9 percent value add to Michigan’s GDP. Some of the Mountain West states are in the 3-percent range. How can Michigan grow that? That (percentage) measures specialization, how much of your economy is made up of outdoor recreation. It’s a double-edged sword. You may have a market advantage or a special thing you’re doing or have a high degree of specific skills, tools or shops. On the other hand, it’s also a measure of the total economy. If you have a really big, diverse economy like Michigan, we may never get that big percentage. I take that percentage with a little grain of salt. But diversification is always the goal.

What effect will the federal Great American Outdoors Act, signed into law this year, have in Michigan? It raised the maximum amount communities can ask for (from the Land and Water Conservation Fund). In terms of dollars, it’s big and it’s going to be good. It’s also an opportunity to start thinking about matching dollars and how we make sure communities have that. I’m encouraging a ‘let’s put all the cards on the table’ mentality. Those match dollars are going to have to come from somewhere. There will be millions of dollars more per year, but it means we might have to get creative with matching that.

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

FOOD BIZ

Grocery exec: Pandemic forces long-term shift in consumer habits A Q&A with Tony Sarsam, CEO of SpartanNash Co. By JAYSON BUSSA | MiBiz jbussa@mibiz.com

onsumers relied on grocery stores and supermarkets like never before during the pandemic. As the state transitioned through various stages of shutdowns, these businesses had to keep their shelves stocked amid challenges like panic buying and stockpiling. Tony Sarsam took over as CEO at SpartanNash Co. in September as the industry was six months into the new dynamic. The former CEO of Texas-based Borden Dairy Co. shares his views on the challenges that await his company with 155 corporate-owned retail stores and a distribution business that delivers to 2,100 independent locations.

Are grocery stores still contending with stockpiling of food and essential products, and has SpartanNash recovered from the panic buying we saw in the spring? In anticipation of the fall surge, our distribution and merchandising teams have worked proactively with our suppliers to ensure we can provide our customers the essential food, medicine and household products they need. While we are experiencing some challenges with a limited number of products like spices and pre-packaged lunch meats, our supply chain has recovered from initial shortages. Within some categories

like the high demand paper and cleaning products, our store guests may find a reduction in selection, but we do offer several options.

What can these ongoing shortages be attributed to? Ongoing shortages in high demand categories reflect the labor challenges food producers, manufacturers and packaging companies are experiencing due to the pandemic. They also are a result of suppliers limiting the assortment of certain products so they can maximize production efficiencies. A good way to think about the initial shortages is it takes time for manufacturers and the supply chain to pivot distribution. For example, our favorite product — toilet paper — was earmarked for distribution to schools and businesses, which then closed. SpartanNash worked with other non-retail closed institutions to secure needed products, but it took time.

What will be some key issues grocery stores have to contend with in 2021? Until the number of COVID cases decrease, we anticipate labor shortages in our stores, distribution centers and throughout our supply chain will continue to be a challenge. Safety is our top priority and we must account for leave of absences. We have doubled down on recruiting and training initiatives to support our standards of operational excellence.

Before COVID, 23 percent of consumers prepared more than 90 percent of meals at home. Now, 43 percent of consumers prepare more than 90 percent of meals at home. We must — and will — continue to evolve our product and service offerings to provide the diverse types of food and formats our wide variety of customers deserve.

Has the pandemic driven SpartanNash to place a greater emphasis on sourcing products locally, perhaps as a means for creating a steadier supply chain? SpartanNash’s vision is to be a best-in-class company that feels local, where relationships matter. Our people-first culture is built on the success of the relationships we form with our associates, customers, suppliers, vendors and communities. Consequently, local product sourcing has been one of our corporate social responsibility dashboard initiatives for years — along with corporate and foundation financial and volunteer support to build stronger local communities. When possible, we work with local farmers, food producers and manufactures throughout our supply chain. Buying local not only fuels the local economy, it minimizes ‘food miles,’ improves product quality, and reduces the environmental impact associated with transporting the product.

And how important is social responsibility to consumers? Not only is our corporate responsibility for social and environmental initiatives the right thing to do, it makes strong business sense. Ninety percent of

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shoppers worldwide are likely to switch brands that support a good cause, 32 percent of associates would consider leaving a company if it had no social responsibility, and 65 percent would leave if they felt the company harmed the environment.

Do you foresee online grocery shopping being a permanent trend? Since the pandemic, our Fast Lane e-commerce business has grown over 300 percent. While it has leveled off to some degree, 90 percent of online shoppers are expected to continue shopping online post-pandemic. In 2021, we will continue to invest in e-commerce solutions and operational efficiencies to exceed customers’ appetite for this shopping convenience.

FORD AIRPORT DEVELOPMENT WILL “PUT WEST MICHIGAN ON THE MAP”

ith its new master real estate plan nearly finalized, the Gerald R. Ford Airport International is poised to enter the global stage.

some of the largest tracts of land with access to utilities along the I-96 corridor in West Michigan. We also have nearly 80 acres designated as a free trade zone. “

The Ford Airport will unveil the plan during the first quarter of 2021 through a series of virtual stakeholder engagement meetings, a new website, social media and more. More than $500,000 was invested in the most “ambitious and robust study of the Airport’s real estate assets to date” as the Ford Airport looks to attract new development and investments that will shape the region’s economy for the next two decades.

CREATING A WORLD-CLASS BUSINESS HUB

“We want to be the economic catalyst for West Michigan – and we are well positioned to do so,” said Stephen Clark, Ford Airport Director of Commercial Development. “Prior to the pandemic, the Ford Airport had a $3.2 billion economic impact on our region. Our goal is to more than triple that to $10 billion in the next decade, and our new real estate master plan gives us the roadmap for success. “The Airport has more than 900 acres of property open for development with

The Ford Airport is working with the Michigan Economic Development Corporation, The Right Place and industry partner McFarland Johnson to transform information and due diligence provided by local real estate brokers to develop solid action plans. One of the more exciting opportunities, is what Clark described the ability for the airport to partner with developers to create a “world-class business hub,” which could feature: •

Industry clusters, such as biomedical, medical devices or automotive that would benefit from co-locating near an anchor in order to shorten transportation times, strengthen relationships and take advantage of West Michigan’s location to major U.S. population centers.

DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

Stephen Clark

•

Corporate headquarters, with a company establishing a new global base of operations that would benefit from having a corporate hangar. Inland port connected to Muskegon’s deep-water that can house an intermodal facility to transfer freight. Hospitality, which could feature hotels, restaurants, gas station, pet boarding and other options to enhance business and leisure travel.

“What we are trying to do is unprecedented for an airport of our size,” Clark explained. “Very few airports, even large ones, are attempting anything this complex and intentional.”

2021 AND BEYOND The Ford Airport is preparing to announce plans for the first development in 2021 as the real estate master plan is released. Clark, who joined the Airport in 2018 in a newly created role to lead business development, said the Airport has already approved more than a dozen new leases in the last 18 months totaling more than $60 million in new investments. Despite the pandemic, Clark and other business leaders are bullish on the future of West Michigan. The economy will recover, and the team at Ford Airport wants to make sure they are front and center in the conversation as businesses develop their plans to meet the future marketplace. “We want to change the face of this area and put it on the map internationally,” Clark said. “People think of New York, Los Angeles or San Francisco as vibrant hubs for business, but why not West Michigan? We have the talent pipeline, an exceptional quality of life and moderate cost of living that combine to make West Michigan an attractive destination. “While you may be able to find these things elsewhere, you won’t be able to do so with access to property like that at the Ford Airport, which is immediately available for development.”

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

FOOD BIZ

Ag sector ‘more or less’ back to normal, although labor challenges persist A Q&A with Jeff Sandborn of Sandborn Farms By JAYSON BUSSA | MiBiz jbussa@mibiz.com

I COURTESY PHOTO

RESTAURATEUR’S PORTFOLIO SHRINKS UNDER PANDEMIC RESTRICTIONS A Q&A with Jeff Lobdell, president of Restaurant Partners Management LLC

n addition to farming his own 1,800 acres of corn, soybeans and wheat in Ionia County, Jeff Sanborn is also active in both the Michigan and National Corn Growers associations. In fact, he has represented Michigan on the NCGA board and was a chairman on the NCGA Ethanol Committee. Sandborn shared insights on how the COVID-19 pandemic, new administration and other issues are poised to affect the agriculture industry in 2021.

Did the COVID-19 pandemic disrupt operations for crop growers? Farmers really had no choice but to go out to the fields like they do every year.

For agriculture, we almost automatically social distance just because of what we do. For me, I had a positive COVID test on Nov. 13. I had field work to do so I just stayed in the tractor cab and we were spreading fertilizer and the guy loading me stayed in his cab and we were good. We have the ability to social distance out in the countryside probably way more than people do in densely populated areas.

What position are your restaurants in going into 2021?

Are farms out of the woods in terms of the pandemic?

By KATE CARLSON | MiBiz kcarlson@mibiz.com ith already thin profit margins, dine-in restaurants have faced the brunt of COVID19 restrictions in Michigan, and many won’t emerge on the other side. Some owners — including Jeff Lobdell, president of Restaurant Partners Management Inc. — feel their businesses have been unfairly targeted as state officials sought to stem the surge of cases over the past month. Lobdell owns restaurants across the state, including several in the Grand Rapids area like Bagel Beanery, Sundance Grill & Bar, Beltline Bar, The Omelette Shoppe, Rockwell Republic and Noble Restaurant. Lobdell started the year operating 20 restaurants, nearly half of which have closed at least temporarily.

This latest shutdown of sit-down dining restaurants was done with no safety net like what happened the last time when there was some federal stimulus. States around us aren’t doing this. I had 20 restaurants to start this year and after the first 90-day lockdown I permanently closed three. When we went to no sit-down dining and were told this would be three weeks, I kept them open (at a loss), and I had to shutter five more. I’m hoping it’s just temporary for those five. The businesses are hurting, employees are hurting, their families are hurting.

What do you think about some restaurant owners defying state dine-in restrictions? I’m not going to risk opening up and losing my liquor license because I need to be there for my community and my staff for the future. I’m not at that desperation point with nothing to lose, but if this continues, I don’t know what more we can do.

What business lessons have you taken from this year? I’ve always said restaurants are some of the cleanest, safest places in the community, and now they’re at all time highs for sanitation and safety. Another good thing is that more and more restaurants are doing commerce with online ordering and third-party delivery — that’s improved in the industry across the board. The local governments have also been excellent to work with in allowing us to expand our outdoor seating and trying different things like social zones, extended patio seasons and approving safe ways to serve cocktails to-go.

How might restaurants look or operate differently after the pandemic? I think there will be more technology, more ordering online, a little more delivery, curbside, and ordering by app with your phone. This has also taught people the importance of washing hands more frequently, and cleanliness standards are more likely to be publicized now in restaurants.

What will presumably fewer restaurants in 2021 mean for the West Michigan region? Michigan is a tourism state, especially in places where I have restaurants like Traverse City and Grand Rapids. Restaurants are a driving force of our state’s economy. The restaurants in cities are the heartbeat of those downtown communities, even in rural and suburban places. If we lose a lot of our great restaurants, we’re going to lose that sense of community.

Is the pandemic affecting the hospitality industry in ways that aren’t being discussed? Another area that’s been hard this year is higher education and colleges. People pay a lot for their college degrees and I see a lot of that going online. The restaurant industry can provide a path for people who maybe don’t want to spend thousands of dollars on college degrees. There is a pathway into the middle class when you work your way up to become a manager at a restaurant. As a manager you learn accounting, administration, social media, how to work on the line, production, teamwork, packaging to-go orders — there are so many things you learn and you can get a de facto degree in business by working in restaurants for three to five years.

DECEMBER 21, 2020 / MiBiz Crystal Ball 2021: Special Year-End Edition

Initially, I think when the first threat of it hit this spring, it kind of threw a wrench in things, just parts deliveries and things like that. Mostly, I could get everything I needed. You just need to have a little forethought and get things done. Really, now we’re back to normal more or less. Crop prices have trended up this summer and late fall. Yields are across the board across Michigan depending on how Mother Nature treated you in the spring and summer.

Food processors have been hit really hard by the pandemic. Does that pose challenges for operations like yours? For me, a lot of my corn goes to the local ethanol plant here in Woodbury. Because driving dropped off severely, they couldn’t make ethanol. Once the tanks get full, you can’t really keep making it, otherwise you dump it. … But I think we’re slowly getting back to normal. I know the ethanol plants locally have switched over to making people-grade, or whatever you want to call it, to use for hand sanitizer. They didn’t use their normal capacity, but it got them through to help get back to what they do.

Workforce shortages in the agriculture sector seem to be ever-present and a major problem during the pandemic. What are you seeing? For me, with crops, it’s more about the machinery and getting people to run the machinery and covering acreage. My wife and her dad have a beef farm, so trying to get people to help with that (can be tough). … When the economy was really booming

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pre-pandemic, not many people worked at that more labor-intensive type of work. It was hard. We had a lot of immigrants that came to do that work and that became harder … with the pandemic and some of the trade issues. A constant problem with any type of processing in agriculture is getting a stable, reliable workforce to do that work.

Speaking of machinery, precision agriculture seems to be constantly evolving as farmers continue to implement forms of automation. Do you see that continuing to transform the industry? As robotics become more the norm, I think that will fill in some of the labor issues. After the manufacturing downturn, there were a lot of robotics companies that kind of retooled their stuff and got it into different sectors.

On the heels of President-elect Joe Biden announcing Tom Vilsack as his nominee as U.S. Agriculture Secretary, how does a transition in administrations affect the industry? Just politics in general, when you transition administrations, there is always that concern with what’s different. Typically what happens — and I’m generalizing here — is the concern is always on regulation. Where is the balance point moving forward when it comes to regulation? There are a lot of people that are very wellintentioned that are in D.C. or on the coast that have a perception of agriculture that isn’t reality. There are things that they think make sense that really don’t. It goes back to a quote that I think (President Dwight) Eisenhower said that it’s easy to farm when you’re sitting at a desk with a pencil. It’s totally different when you get out in the field. There are government programs that make sense when it comes to sustainability but they don’t necessarily make it all the way to the ground.

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THANK YOU The staff of MiBiz wish to thank the following advertisers who partnered with us this year to provide the best business coverage in Western Michigan. We appreciate them and hope you’ll consider doing business with them in 2021.

AbsolutAire Inc.

Fishbeck

Nemic Industrial Supply

ACG Western Michigan

Flagstar Bank

Philip and April Alt

Advantage Benefits Group

Foster Swift Collins & Smith PC

PNC Financial Services

Agile Safety

Fritz Wahlfield Construction Company

Radley Corp.

American Subcontractors Association of Michigan

Gerald R. Ford International Airport

Rhoades McKee

Arbor Gage & Tooling

Gibson

River City Mechanical

Armock Mechanical

Godwin Plumbing

Rockford Construction Company

Associated Builders & Contractors Inc.

Grand Haven Area Community Foundation

Rosette LLP

Axios HR

Grand Rapids Area Chamber of Commerce

RTPR LLC

Barnes & Thornburg LLP

Grand Rapids Community Foundation

Senior Neighbors

Bauer Sheet Metal & Fabricating Inc.

Grand River Bank

Small Business Association of Michigan

Beacon Hill at Eastgate/Mary and Marta Center

Grand Valley State University

Smith Haughey Rice & Roegge

Beene Garter LLP

Gun Lake Investments

SpinDance

Benchmark Loan Partners

H&S Companies

St. Cecilia Music Center

Blue Cross Blue Shield of Michigan

Haworth College of Business

Stout Resius Ross

BlueWater Partners LLC

Health Alliance Plan

Tandem 365

Brigade Fire Protection Inc.

Highpoint Community Bank

TCF Bank

Business Leaders for Michigan

Holiday Inn

The Center - West

Certified Building Solutions

Horizon Bank

The Comedy Project

Charter Capital Partners

Hungerford Nichols CPAs + Advisors

The Employers’ Association

Classic Engineering

Hungerford Valuation

The Rapid

Commerce Bank

Independent Bank Corp.

The Right Place

Commercial Alliance of Realtors

Kalamazoo Community Foundation

The Trinity Group Ltd.

Consumers Energy

Kalamazoo Promise

ThrivePOP

Cornerstone University

Kalamazoo Valley Community College

Triangle Associates Inc.

D & D Building

Lacks Enterprises Inc.

Trophy House Brands

Dan Vos Construction

Left Coast Capital

Davenport University

Local First

UA174: West Michigan Plumbers, Fitters & Service Trades

Dickinson Wright PLLC

Macatawa Bank

United Bank

Disher

Metro Health Hospital

US Signal

Elzinga & Volkers

Michigan Economic Development Corp.

Van Dyken Mechanical Inc.

Enbridge

Mika Meyers

Van Laan Concrete Construction

Engine

Miller-Davis

Varnum Law

Ferris State University

Morrison Industrial Equipment Co.

Vista Springs LLC

Fifth Third Bank

MSU Broad College of Business

Warner Norcross + Judd LLP

First Companies

MSU Federal Credit Union

Waséyabek Development Co. LLC

First National Bank

NAI Wisinski of West Michigan

Wolverine Building Group

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Special Year-End Edition: MiBiz Crystal Ball 2021 / DECEMBER 22, 2020

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