MiBiz Crystal Ball 2020 by MiBiz

CRYSTAL BALL

S P ECI A L Y E A R-E ND I S SUE | DECEMBER 23 , 20 19 | V OL . 32 | NO. 5 | $ 3.0 0 P

We’ve always been all in one.

Now we’re Since our company began in 1956, we have adapted to your changing needs. At our core, we are trusted as engineers, architects, scientists, and constructors solving problems while making the world a better place. While the name is new, our approach is still the same: all-in-one service with an emphasis on integrity, innovation, and excellence.

800.456.3824 fishbeck.com

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

Visit www.mibiz.com

2020 CRYSTAL BALL

MIXED MESSAGES

he West Michigan economy looks good heading into 2020, and few people we’ve interviewed for this Crystal Ball edition fear that a recession is imminent. While executives should take solace that the region’s economic fundamentals remain sound, as the saying goes, the devil is in the details. Take, for example, manufacturing output in the Grand Rapids metropolitan statistical area spanning Barry, Kent, Montcalm and Ottawa counties. Projections for 2020 and 2021 say that manufacturers should continue to expand by 1.1 percent each year, according to Jim Robey, an economist at W.E. Upjohn Institute for Employment Research. While that’s down slightly from the 1.3 percent gain this year, their output expansion is forecast to outpace their peers statewide. The catch: Manufacturing employment, on the other hand, is expected to shrink by more than 700 jobs in 2020 and nearly 1,000 jobs in 2021, based on “productivity enhancements” and companies making investments in more efficient Industry 4.0 technologies. It’s time to retrain our brains and accept the realities of a job-loss expansion. To quote Robey: “The economy can grow while employment declines. That’s kind of a new concept in economic development. Economic development has always been about jobs, and the argument is that economic development needs to be about jobs and capital investment. That’s not only in manufacturing, transportation and warehousing, that’s across services as well.” At the same time, economists also remain quick to point out that we’re in the middle of a consumer-driven U.S. economy. In other words, as long as consumer confidence remains elevated — and it currently is at record highs — consumers will keep shoveling fuel into the economy, which will continue to expand overall. Right now, consumers have good reason to be giddy. Statistically, any consumer who wants a job is employed, as evidenced by persistently low local and national unemployment figures. With the Dow up around 20 percent year to date, consumers’ 401(k)s are performing well and they’re resting easy. They’re also possibly a little drunk, given that more than 8,000 breweries operated nationwide at some point this year, reaching a new record, according to the Brewers Association. In fact, it might be good if they’re a little tipsy. That way, hopefully they’re not paying attention to tariffs and

Published since 1988 MiBiz® is a registered trademark of REVUE Holding Co., Inc.

trade wars, international Twitter imbroglios involving the Tweeter in Chief, modeling around the enormous social and economic costs of climate change, the “batshit crazy” inability of Lansing to deliver on infrastructure spending, or even the fact that marijuana remains scarce in Michigan despite being legal. However, as soon as consumers go one toke over the line, they’re bound to become as paranoid as American corporate executives, who’ve reacted to the intense volatility by losing confidence and backing off on spending. Another reason to stay up at night, according to economist Paul Isely at GVSU: “[O]ne thing that we know historically is the consumers are the last to find out about a recession.” Sweet Jesus! But let’s not forget that the fundamentals — the very building blocks of the region’s economy — remain strong, according to economists. It’s just that we’re heading back to normal after a period of strong growth and acceleration. Slow growth curves aren’t as sexy as hockey-stick charts, but the fact is we’re still growing, still moving forward. One possible analogy comes from the current state of the craft beer industry. The sector continues to grow at a rate of 4 percent, but it’s coming off a period earlier in the decade when it was rocketing ahead at 20 percent annually. Pundits like to cite the slower growth and higher rate of closures as a reason why the beer bubble is about to burst. The reality is likely much less sinister: markets mature. The headlines may not jump off the page when you’re “only” growing at 4 percent, but as industry veteran Larry Bell pointed out: “We’ve been spoiled.” Likewise, West Michigan has been spoiled with strong growth as it raced ahead of the pack in recovering from the Great Recession. At some point, you need to transition from recovery to maintenance, and that’s the place in the economic cycle that we’ve reached. In that context, maybe 1.8 percent growth in output for 2020 doesn’t sound so bad after all. Cheers,

Editor Joe Boomgaard / jboomgaard@mibiz.com Senior Writer Mark Sanchez / msanchez@mibiz.com (finance, health care, life sciences) Staff Writers Sydney Smith / ssmith@mibiz.com (real estate, economic development) Jessica Young / jyoung@mibiz.com (manufacturing, agribusiness) Contributing Reporters Andy Balaskovitz, Marla Miller, Jane Simons Copy Editor Claire Boomgaard VP of Production & Audience Development Kristi Kortman / kkortman@mibiz.com Senior Advertising Consultant Shelly Keel / skeel@mibiz.com Digital Specialist/Ad Traffic Coordinator Danielle Affholter graphics@mibiz.com

Circulation For address corrections or subscriptions, contact MiBiz at 1-877-443-1977 or subscribe@mibiz.com MiBiz ISSN 1085-4916 • USPS 017-099 Established 1988 MiBiz is published every other week by REVUE Holding Co., Inc., P.O. Box 1629, Grand Rapids, MI 49501. Telephone (616) 608-6170. FAX (616) 608-6182. E-mail: info@mibiz.com. Subscription changes: subscribe@mibiz.com. Periodicals Postage is paid at Grand Rapids, MI. POSTMASTER: Send address changes to MiBiz, P.O. Box 1629, Grand Rapids, MI 49501. Paid subscriptions are $59/year, $109/two years and $149/three years. Single copy and back issues (when available) are $3 each, plus first class postage. Call 1-877-443-1977 to order.

Brian Edwards Joe Boomgaard Publisher Editor

GET THE LATEST E-NEWS SENT TO YOUR INBOX MiBiz publishes multiple free e-newsletters highlighting local news and data, as well as best practices, events and resources:

Publisher Brian Edwards / bedwards@mibiz.com Associate Publisher Denise Montambo / denise@mibiz.com

Reproduction or use of any portion without permission of the publisher is prohibited.

n Monday Morning – A weekly roundup of business news and intelligence. n The Friday Ticker – Recapping the week and looking ahead. n Small Biz – A bi-weekly compendium of news, best practices and events. n Manufacturing Report – A bi-weekly digest of local manufacturing news. n West Michigan Nonprofits Report – A monthly roundup of news and information affecting the nonprofit sector.

SIGNUP TODAY AT MIBIZ.COM/SUBSCRIBE/E-NEWSLETTERS Visit www.mibiz.com

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

10 CONCERNS FOR 2020

For this 13th installment of Crystal Ball, MiBiz reporters interviewed dozens of West Michigan executives about their outlook for the state and national economy and the indicators they’re watching as they prepare their businesses for the new year. While no single issue seemed to rise to the top this year, here’s a subjective list of their concerns that came up most often, ranked in no particular order.

TRADE/TARIFFS

As one saying goes, “Expansions don’t get tired; rather, they end due to policy mistakes.” Since Michigan is a state steeped in automotive and agriculture, two export-heavy industries, businesses here depend on Washington getting the policy right. Failure to pass the USMCA and reach a trade deal with China could send those businesses — and the economy — over the edge. “One of the biggest things is the uncertainty involved. When you’re making a long-term investment, you really want to know what the rules are. Right now, companies just don’t know what the rules of the game are going to be, and that’s tricky. To some extent, that can matter even more than just the tariffs themselves.” — Gabe Ehrlich, associate director of the University of Michigan Research Seminar in Quantitative Economics

LENGTH OF EXPANSION/ FEARS OF RECESSION

The current economic expansion has gone on for longer than any other in modern U.S. history, which is causing executives to wonder how soon into the future the next recession will occur. Unfortunately, it’s often hard to predict when that next downturn is coming, as incorrect predictions about impending recessions over the last three years have proven. “To look into the future, we have to look at the past. It’s like driving down the road at 90 miles per hour and looking in your rearview mirror. It works pretty well when the road is going straight, but when there’s a 90-degree turn, you might not see it.” — Paul Isely, associate dean of the GVSU Seidman College of Business

DIVERSITY, EQUITY, INCLUSION The face of West Michigan is changing and becoming less homogeneously white. Smart companies are grappling with ways to tap into a pool of employees and consumers who hail from a diversity of backgrounds.

“[W]e’ve realized that diverse teams have proven to have higher or more increased rates of productivity. We’ve also seen a diverse consumer base result in increased sales as well. Outside of it being trendy and outside of it being a buzzword, the true benefit to companies is you’re going to have increased sales, increased products, increased value, and more longevity as opposed to circling within the same market over and over again.” — Graci Harkema, owner of Graci LLC

VOLATILITY

While the economy is much larger than the stock market, it can have an effect on consumer confidence, both positive and negative. As the market has become more reactionary in recent years, that’s led to large swings tied to news about tariffs and Federal Reserve decisions on interest rates.

“It would probably be unrealistic to assume volatility stays as low as it has recently been. Again, there’s a number of things on the horizon that have the potential to cause volatility, and I’m thinking about things like the presidential election, the ongoing impeachment discussion that could bleed into next year, a Brexit deadline of Jan. 31, and the ongoing trade negotiations between the U.S. and China. There are a lot of uncertainties out there that will evolve and proceed through 2020, and depending on how those things evolve, you could make a good case for why there could be more volatility next year than there was this year.” — Nick Juhle, VP and director of investment research at Greenleaf Trust

STALLED BUSINESS SPENDING

More companies are taking a pause when it comes to capex, driven either by uncertainty related to trade deals and tariffs or by their place in the economic cycle. For its part, the Institute for Supply Management expects capex to decrease 2.1 percent among manufacturing companies in 2020. “We’ve spent pretty heavily over the last six years, including a pretty substantial addition that we put on one of the buildings. So, we’re also kind of contracting. We’ve got a couple of things that are must-haves and we’ve got a couple of things lined up that have short payback periods, but it’s going to be over the next year or two. It’s going to be a pretty tight budget for our own capex spending.” — Bob Roth, president and CEO at RoMan Manufacturing Inc.

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

INABILITY TO SHIFT ANY MORE HEALTH CARE COSTS TO WORKERS

Employers’ shift to high-deductible plans has hit a wall as employees have reached the limit of the burden they can assume. Experts say that’s forcing the industry to reexamine the payment model for health care and to look for new ways to ensure access. “Everybody’s been looking for what the magic bullet is and we’ve gotten to the point in health care where so much of the cost has been transferred to consumers in the form of co-pays and deductibles and these high-deductible health plans, and that’s kind of run its course. That is not going to be an option going forward, yet we still have the cost of health care as a major issue.” — Marianne Udow-Phillips, executive director of the Center for Healthcare Research & Transformation

‘NORMAL’ IS HERE

The economy on average grows around the 2 percent. Michigan, after years of stronger growth, is heading “back to trend,” according to economists. That slower growth has stoked fears that the economy could be weakening. “It’s reasonable to expect slow and steady growth in the state, but we may be a little more vulnerable given our still higher relative exposure to the manufacturing and goods-based side of the economy. … We’ve had a pretty good run. Overall, we’ve performed relatively well versus other states.” — Martin Lavelle, business economist at the Federal Reserve Bank of Chicago, Detroit branch

CONSUMERS IN CONTROL

Consumers need to stay confident, employed and spending for the economy to continue growing. The question remains: How long will their confidence stay at record highs and what will be the chain of events that causes them to retrench? “What we are expecting, and often what we as economists are talking about, is when the next recession comes it will be consumer led. Consumers are about two-thirds of the economy. Right now consumer confidence is at an all-time high. … Consumers feel pretty good. They are concerned about trade and tariffs, they are concerned about lots of the uncertainty that business is thinking about, but we do continue to see this being strong. As long as they’re strong and they believe in the economy, we’re probably going to be OK.” — Jim Robey, director of regional economic planning services at the W.E. Upjohn Institute for Employment Research

TALENT

The labor market in Michigan continues to be tight around major metro areas. Compounding the problem for employers in West Michigan is that labor participation rates are already higher than in other parts of the state, signaling that there’s no silver bullet left to solve the talent crunch.

“With our growth rate, we are hiring at all levels of the organization. … We are utilizing every resource we know in terms of staffing firms, recruiters, headhunters, websites, you name it, and we’re still struggling to find the talent.” — Jim Medkser, president of Keystone Solutions Group

POLITICS/ELECTION YEAR

The bitter partisan divide continues to permeate from Washington, D.C. through to the halls of the state Capitol in Lansing. An election year and a likely impeachment trial (and probable acquittal) will only make matters worse. Businesses have to operate within the policy framework government sets, and they need the pols to give them the framework and get out of the way. “[P]eople just view Washington right now as a complete wasteland of trying to get anything done. There are a lot of big topics the candidates of course will always focus on, but I think the basic functionality of our federal government and our political process needs to be on top of those things they need to talk about because the biggest ideas they have are not going to go anywhere in the current atmosphere in Washington, regard-

less of the party.” — Matt Resch, owner and president of Resch Strategies LLC

Visit www.mibiz.com

Warner Norcross + Judd

Moving forward together. Grand Rapids Community Foundation partners with the area’s most passionate professional advisors to move community giving forward. Within the walls of their offices and beyond, professional advisors use their knowledge and relationships to connect donors’ passions and philanthropy. Please join us in celebrating Warner, Norcross and Judd, whose employees are building a thriving community through their work and their activities. The firm partnered with Grand Rapids Community Foundation to create a fund to give back to the community and engage their employees in giving. But to Warner, Norcross and Judd, creating change means investing more than financial gifts. They also encourage employees to show their commitment to Kent County through volunteer work individually and as an organization. Find out more about how our team can help steward your resources to make a difference in our community at grfoundation.org/advisors.

Visit www.mibiz.com

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

“ WHEN WE DO A JOB... WE DO IT RIGHT. ANY OTHER WAY IS INEXCUSABLE.” Jim Flier - President, Flier’s Quality Water Systems

Getting the customers’ job done right isn’t the main thing… it’s the only thing. Nearly every person and every business relies on purified water in one way or another. From drinking water, to medical procedures, or manufacturing processes. Properly designed, installed, and maintained water purification systems by Flier’s, will not only insure healthier lives, but will ensure that manufacturing processes attain maximum results.

Customized Twin Reverse Osmosis Systems With Carbon Pre-filters For Manufacturing Application

Flier’s provides world class engineering, installation, 24/7 service, routine maintenance, and operates one of Michigan’s largest FDA regulated GMP resin regeneration plants… all with 100% customer satisfaction. Have a problem or question? Call us at 616-583-9040 or (800) 898-5525

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

Visit www.mibiz.com

MANUFACTURING OUTLOOK

West Michigan manufacturing could contract in 2020, economists say By JESSICA YOUNG | MiBiz jyoung@mibiz.com

f the long-promised economic downturn is on the horizon, manufacturers will be the first to feel it in 2020. That’s according to economists and industry experts who say the U.S. economy has become virtually split as it’s powered by confident consumers but weakened by a cautious business sector that is reducing investments and bracing for a contraction. “We’re seeing wages go up, and people are seeing the people around them employed, so consumers are pretty optimistic right now,” Paul Isely, associate dean of the Seidman College of Business at Grand Valley State University, told MiBiz. “But one thing that we know historically is the consumers are the last to find out about a recession.” Manufacturers, on the other hand, are often the first. The U.S. manufacturing Purchasing Managers’ Index (PMI) from the Institute for Supply Management has been dropping since April 2019, down to 48.1 in November, well below market expectations. This marked the fourth consecutive month of contraction, which is represented by any reading below 50. Global trade remains the most significant cross-industry issue, according to the data. However, falling oil prices, which were consistently down about 20 percent this year compared to 2018, helped to forestall an overall economic turn, according to Isely. “The drop in oil prices really helped alle— MIKE WALL viate some of the other pressures that busiDirector of nesses were feeling and automotive kept us from slowing analysis at IHS down even more as we Markit came into the end of the year,” he said. Year over year, U.S. manufacturing employment is up 0.6 percent, according to Isely’s read of the data. However, that slight growth — in an era of record-low unemployment — may not paint the whole picture. “The average hours worked have dropped from last year by more than half an hour a week,” Isely said. “When you factor that in, the total hours worked in manufacturing have dropped by 0.4 percent.” The corresponding modest decrease in income per person may seem insignificant, but it might mean the difference between certain workers being able to go out to eat or go to a

“We’ve got a little bit of a decline (in auto sales) for next year but not anything that would be a harbinger of doom for the industry as it relates to the North American market.”

Visit www.mibiz.com

movie, he said, noting it also has the potential to affect their purchasing power. “It really looks like the end of this year is going to stay consumer-driven,” Isely said. “Certainly, we’re going to start next year consumer-driven, but we’re going to be watching that consumer very carefully to see whether the corporate pessimism leaks into the consumer side of the equation.”

Auto holds steady The collective outlook among automotive suppliers moved deep into negative territory late this year as trade tensions, declining volumes and weakness in the U.S. economy weighed on manufacturers, according to a report from the Original Equipment Suppliers Association (OESA). Even so, auto sales slightly exceeded expectations, ending 2019 with sales estimates of more than 17 million light vehicles, according to Mike Wall, director of automotive analysis at IHS Markit in Grand Rapids. Wall predicts consumers will become a bit more stretched for funds in 2020 and sales will drop to about 16.7 million units, which is “still quite healthy.” “We’ve seen the trade issues weigh heavily on exports at times and other elements of the economy like industrial production, but at the same time, the consumer has been pretty resilient,” Wall said. “We’ve got a little bit of a decline (in auto sales) for next year but not anything that would be a harbinger of doom for the industry as it relates to the North American market.” The effects of the UAW-GM strike that lasted six weeks before ending in late October will extend into the new year. GM estimates that it

lost approximately 300,000 units of vehicle production to the strike. Overall, the industry will end 2019 at 16.3 million units produced, according to Wall’s forecasts. “We’re going to get some of that back next year,” Wall said. “GM is working furiously to try to recover.” The industry also produced about 300,000 fewer units than forecasted because of tariff difficulties and tighter controls on inventory and vehicle stocks by the OEMs and retailers, according to Wall. Because of these constraints, Wall predicts automotive production will increase slightly to 16.6 million units in 2020, including 200,000 units that will come back to the market as part of GM’s strike recovery. New vehicle launches are also expected to increase 33 percent in 2020, when automakers will bring online 64 new products, according to Wall. This trend will continue to present challenges for suppliers from both operational and cash flow perspectives, according to Sig Huber, senior managing director at Conway MacKenzie. The challenges are even greater when suppliers need to manage multiple launches within a short period of time, or even concurrently, he said. “When you go through launch activity, it’s always a time of risk for the automaker as well as its suppliers further down in the supply chain,” Huber said. “When there is a large jump in the volume of launches, industry-wide, that creates an environment that will be very challenging for the supply base to deal with.” Flawed launches can create significant cash flow burdens for suppliers if they have to absorb high part scrap rates, plant overtime and expedited freight charges, according to Huber. These launch pressures exist at all tiers throughout the supply chain and in many cases are felt more strongly at the Tier 2 and Tier 3 levels, he said.

‘Returning to trend’ Two other influential cyclical segments of West Michigan’s manufacturing sector — office furniture and aerospace — have also topped out and are showing signs of weakening, according to Brian Long, director of supply chain management research at Grand Valley State University. However, Long said there are “no signs” to indicate a local recession ahead for 2020. Many local measures, including manufacturing output and light vehicle sales, are simply “returning to trend,” according to economist Jim Robey, director of regional economic planning services at the Kalamazoo-based W.E. Upjohn Institute for Employment Research. In a presentation as part of The Right Place Inc.’s annual economic forecast, Robey said he expects manufacturers in the Grand Rapids metropolitan statistical area — which includes Barry, Kent, Montcalm and Ottawa counties — will lose more than 700 jobs in 2020 thanks to “productivity enhancements.” Even so, the industry’s gross regional product (GRP) will still increase by a percentage point, or about $130 million, he said. Uncertainty stemming from several policy “risk factors,” including the ongoing trade wars, volatility of the stock market, federal debt and deficits, and general political concerns, could derail U.S. manufacturers and “keep economists up at night,” Robey added. Indeed, economic forecasts become substantially less accurate the closer the economy comes to a significant shift, said GVSU’s Isely. “To look into the future, we have to look at the past,” he said. “It’s like driving down the road at 90 miles per hour and looking in your rearview mirror. It works pretty well when the road is going straight, but when there’s a 90-degree turn, you might not see it.”

WEST MICHIGAN’S LEADING COMMERCIAL ROOFING AND SHEET METAL CONTRACTOR

A SUBSIDIARY OF EAST MUSKEGON ROOFING AND SHEET METAL • EASTMUSKEGON.COM • 231.744.2461 Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

MANUFACTURING

BOB ROTH

PRESIDENT AND CEO // ROMAN MANUFACTURING INC. GRAND RAPIDS

The U.S. manufacturing Purchasing Managers’ Index from the Institute for Supply Management hit new lows in the past few months — a leading indicator that manufacturers must change their tactics in the coming year, said Bob Roth of RoMan Manufacturing Inc. Roth represents the second generation of leadership at RoMan and serves as a member of the board of directors and vice president of the American Welding Society.

What is your 2020 outlook for West Michigan and for the manufacturing industry? I’m still pro-West Michigan and still very much pro-manufacturing. I think the general outlook for our larger community and for the manufacturing sector is good.

Going into 2020, economists are predicting slowing yet continued growth in manufacturing. What are you expecting? Specifically for RoMan Manufacturing, our sector of manufacturing is industrial capital equipment and for that sector, I think it’s actually going to see a contraction. The reasoning behind that is nothing squirrely like 2008 or 2009. It is the natural kind of capex cycle, which always has higher highs and lower lows than the general manufacturing cycle.

Why is that? Companies spend money on capital equipment, they put that equipment into service, they’re producing whatever products it is that they produce

The Center-West and MiBiz are teaming up to present an industrial-strength quarterly webinar series focused on best practices for small and mid-sized manufacturers. Each webinar in the 2020 series — Back to Manufacturing Basics — will feature experts on the topic at hand as well as Michigan manufacturers sharing their stories. The 50-minute webinars will provide actionable, real-world information to help manufacturers improve their efficiency, enhance quality and drive profitability.

Design for Manufacturing & Assembly – February 11, 2020 Learn how small- and mid-sized manufacturers use Design for Manufacturing & Assembly as a core tenet of their product development efforts. We’ll highlight best practices for research, analysis, cross-functional teams and development processes that can help you rapidly create and validate designs that require the least time, material and capital resources.

Core Competencies & Growth – May 12, 2020 Identifying your key capabilities and resources can be an important first step to creating new growth opportunities for manufacturers. In this webinar, we’ll discuss processes for assessing your core strengths and share proven strategies for leveraging your key advantages to develop new products, new applications and new markets for your company.

Building Your Culture – August 11, 2020

For additional information on the 2020 Back to Manufacturing Basics webinars to register, visit MiBiz.com/BackToBasics

Establishing an intentional approach to company culture is helping some Michigan manufacturers attract the right workers and prepare for their next phase of growth. This webinar discussion will examine best practices for building culture and amplifying your values to assemble a high-functioning team that’s ready to take on the challenges and changes ahead.

Investing in Leadership – November 12, 2020 Promoting operations staff to manufacturing management positions can often be a recipe for failure. The reason: Employees who are good at their job often lack natural leadership skills to step into those new roles. An investment in leadership training can help. Join us for a panel-style webinar on best practices for training team leaders, plant managers and other middle-management workers.

and capital equipment lasts a long time. Six-, 10-, 15-year lifespans on capital equipment are not out of the ordinary. It’s not something you’re replacing every year and that’s what kind of gives that amplitude to the cycle that is different than the general manufacturing cycle.

How will you approach your own capex in the next year? We’ve spent pretty heavily over the last six years, including a pretty substantial addition that we put on one of the buildings. So, we’re also kind of contracting. We’ve got a couple of things that are must-haves and we’ve got a couple of things lined up that have short payback periods, but it’s going to be over the next year or two. It’s going to be a pretty tight budget for our own capex spending.

What indicators are you watching to predict capex spending? It’s really interesting and I’ve been tracking it for about 20 years. As our leading indicator for this kind of capex cycle, we take the Purchasing Managers Index (PMI) monthly data, convert it to a rate of change, and it leads our business by about six to 12 months. We already saw that rate of change of the PMI go into contraction way back in November of last year, so we’ve known this day is coming. Then, we start to alter our tactics. We don’t change our overall longer-term strategy, but we definitely change our tactics.

How does this part of the cycle affect your tactics for next year? We see ourselves in the backside of that business cycle. Now, we’re going to focus more on talent development and retention, less on talent relative to talent attraction. During this period, we’re going to focus on making sure that our inventories are tight and that we’re watching our credit practices — in the credit that we give to our customers — and not allowing that to get out of hand. It’s about managing working capital. It’s about investing in people but not necessarily having to go out and figure out how to get more people during this part of the business cycle.

What are some mission-critical steps that you’re taking that you think are going to prepare your company for 2020? We’re really focused on market share gain. We have a couple of markets where we’re the incumbent dominant competitor in that particular space. In those places, it’s like guard your flank and don’t let somebody take market share away from you. Then, of course, we have a couple other segments that we serve where we don’t have that incumbent kind of position, where we’re the newer kid on the block. So now it’s about where we see the weaknesses of our competitors and we’re going to go after market share. We are building our business plan to be flat for the year. In those markets where we’re more dominant, what that really means is as the tide goes out, our boat is going to sink a little bit — but we’re not going to let anybody take market share away from us. In those places where we think that we can get market share, we’re going to be very aggressive. That gives us a flat business plan year over year. Of course, as the cycle moves to the next growth phase, then that market share gain will give us a double kick because we’ve got a bigger chunk.

Are most of your industrial customers still automotive suppliers? If you would have asked me that question 10 or 15 years ago, I would’ve said ‘absolutely,’ but not anymore. It’s still a very important segment, but we’ve focused on new growth areas that are not as automotive centric. Once upon a time, basically 90 percent of our business was resistance welding and 70 percent of that was direct automotive. We haven’t shrunk one iota in resistance welding, but now it’s only 55 percent of our total business, not 90 percent. The growth for our company over the last decade has been in these new application areas for us, which gives us a couple more springs in the mattress, so to speak. We’re not relying on just one spring anymore. Then, this spring might be bouncing up and that one might be bouncing down, but they don’t necessarily all bounce at the same time. Interview conducted and condensed by Jessica Young. Courtesy photo.

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

Visit www.mibiz.com

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

We Create Great Spaces where Businesses Thrive

Buy, Build or Lease Options

Ground-up Construction

Renovation or Office Refresh

Professional Property Management

All of the Expertise You Need

Under One Roof

YOUR SPACE, OUR BUSINESS Call us today to discuss your space needs.

CONSTRUCTION | REAL ESTATE | PROPERTY MANAGEMENT 4380 Brockton Drive Southeast, Suite 1, Grand Rapids, Michigan 49512 FirstCompanies.com | 616.698.5000

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

Visit www.mibiz.com

MANUFACTURING

JIM MEDSKER

Does the fact that Keystone was able to find that funding within Michigan say anything about the strength of the medical device sector and the capital availability in the state?

PRESIDENT // KEYSTONE SOLUTIONS GROUP KALAMAZOO

I believe it does. It’s an example of the strength of both the available capital and the investing that’s going on in this region especially. One of our values here at Keystone is we value long-term collaborative relationships. I personally and Keystone have had a long-term collaborative relationship with Charter Capital and their team, and that’s important to us. While capital is important and advising is important, there is also a comfort level that comes along with a strategic partner that you’ve known for over a decade to go down a path together with.

Kalamazoo-based Keystone Solutions Group has experienced strong growth in recent years that President Jim Medsker expects to continue in 2020. The company is a product designer for the medical device, aerospace and automotive industries, and also offers contract manufacturing for medical devices. Keystone currently employs 58 people in Oshtemo Township and is targeting $15 million to $20 million in revenue for 2020, coming off a year of 50 percent year-over-year revenue growth.

Where do you see the medical device industry heading in 2020? We see continued growth and also continued trending toward many of the medical device OEMs outsourcing the manufacturing aspect of their products so that they can focus on selling the product. We’ve heard that feedback from the very, very large OEMs all the way down to the privately-held smaller companies as well. … There also is definitely an ever-increasing focus on risk mitigation and risk monitoring. If you’re the patient lying on the OR table, you’re happy to know that they keep continually improving and making risk mitigation more rigorous. As a manufacturer, it obviously makes you level up on a constant basis in your quality management system, your infrastructure and so forth.

as well. Having that type of financial partner — as well as a partner that can provide advising and provide additional contacts and the synergy — does help ensure continued growth, sustainability, and it also helps with risk mitigation as well.

As you look ahead to 2020, where do you see changes that Keystone will need to address? It’s very possible that on the horizon for 2020 is an additional facility. We have expanded within this facility two or three times and we’re getting close to maxing it out. We’re landing gigs that take up larger initiatives and take up more square footage. It’s not

just for available space but also for risk mitigation so that we can have that duality of facilities. This is part of the Charter infusion of capital: We are implementing a new ERP system for the company and that will probably be wrapped up and fully implemented near the end of 2020. That’s a big program for us.

What’s keeping you up at night as you look out to 2020? The biggest one is the ETO sterilization, quite frankly, because we have to sterilize our products. While there are other sterilization methods out there, ETO sterilization has been out there for a long time for a wide variety of products for good reason. It doesn’t attack the plastics and other materials like the other processes, for example, like gamma radiation sterilization. That (issue) is probably the highest on the radar. Quite frankly, without a sterilization base, we don’t get sterile products. Interview conducted and condensed by Joe Boomgaard. Courtesy photo.

THE BEST PART WE’VE EVER MADE IS MAKING OUR COMPANY PART OF

WEST MICHIGAN

Given Keystone’s growth spurt, how are you handling expanding your workforce? It’s been one of our bigger challenges this year and I anticipate it will continue to be a big challenge in 2020. With our growth rate, we are hiring at all levels of the organization. … We are utilizing every resource we know in terms of staffing firms, recruiters, headhunters, websites, you name it, and we’re still struggling to find the talent.

Outside of just keeping up with growth, what are some of the emerging challenges for your company? Probably one of the biggest challenges we faced tactically this year is the ETO (ethylene oxide) sterilizers and what’s going on with them. The singleuse sterile products that we produce are sterilized after final packaging. As a contract manufacturer, we rely heavily on outside sterilization resources. A number of them have come under fire this year and have been shut down by the EPA for various reasons. Viant shut down (its Grand Rapids facility), and they were one of our smaller suppliers, but still a key supplier. Now we’re not sterilizing in Grand Rapids anymore. We had another sterilizer that was shut down over in the Chicago area.

How did you react to those closures? This year, we’ve validated four new sterilizers, which was quite a lift. Validating a sterilizer is three- to six-month effort with many, many people involved, ranging from microbiologists to engineers to quality people, manufacturing engineers, that sort of thing.

Are you having to go farther outside of Michigan to find product sterilization services? The radius has expanded, for sure. … We have now validated a handful of sterilizers, but they’re located in New Jersey, they’re located in Virginia. We have another one that’s in the Boston area. We have had to expand the radius a bit. There is actually talk from some of our larger clients of even exploring the potential of offshore sterilizing services, which I’d rather not do because it’s a logistics nightmare, of course.

What does the Charter Growth Capital Partners investment from earlier this year do to position your company in the months ahead? What it does is it gives Keystone the dry powder to continue on this fairly steep growth path. In addition to the working capital that the Charter deal provides, the Charter team and their experience and their connections with other medical device and life science companies is synergistic Visit www.mibiz.com

After five decades of proven excellence and innovation in developing automotive décor components, we’ve never been more sure that our success is a direct result of the people and community where we reside. Some companies are powered by electricity. Ours is powered by West Michigan.

LACKSENTERPRISES.COM Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

ENERGY OUTLOOK

Solar and electric vehicles on Michigan’s horizon By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

he beginnings of a largescale solar power buildout, bolstering electric vehicle infrastructure and preparing a power grid of the future are among Michigan’s top energy-related trends expected in 2020. Over the past year and a half, Michigan’s transition from coal-fired power plants took on a more firm schedule as each of the state’s regulated utilities filed formal plans with regulators that outline plant closures, new generation and ways to conserve energy. The state’s largest utilities will gradually close coal plants by 2040, at the latest, and the state’s electricity portfolio will rely more heavily on natural gas, wind and solar, according to Integrated Resource Plans required under 2016 energy laws. The solar industry, in particular, is expected to make up a greater share of the state’s renewable energy mix, where it is currently just 4 percent. There appears to be more certainty in the near term for medium- and largescale solar projects. Jackson-based Consumers Energy plans to own or buy 5,000 megawatts of new solar by 2030. Currently, Michigan has a total installed solar capacity of less than 200 MW. Under a settlement agreement with Consumers this year, nearly 600 MW will be built by independent power producers by 2023, starting next year. Consumers plans to

competitively bid for solar contracts beyond that. Meanwhile, New Yorkbased developer Ranger Power is in the early stages of two large projects in Calhoun and Shiawassee counties. The build-out of larger solar projects, though, is expected to raise additional land use and siting concerns. Some communities have been apprehensive about allowing utility-scale solar projects, similar to disputes over siting wind energy. “That’s going to be an important area of policy work going forward to support that (solar) build-out,” said Charlotte Jameson, program director at the Michigan Environmental Council. As utilities pursue larger projects, much more uncertainty surrounds the role of small-scale and residential solar projects. Sweeping 2016 energy reforms put in place a distributed generation program to replace Michigan’s net metering program, which required utilities to credit customers who send excess power from renewable energy back to the grid at the retail price of power. The Michigan Public Service Commission spent considerable time designing a new program, which requires utility customers to purchase their energy needs upfront at retail rates and be credited at a new “outflow” rate. Utilities have wrangled with clean energy advocates about what that outflow rate should be, with utilities arguing it should be the wholesale price of power and advocates wanting to maintain retail credits. Detroit-based DTE Energy was the

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

first to have its distributed generation program approved, and outflow rates were set at roughly midway between wholesale and retail rates. Solar advocates maintain this removes incentives to install rooftop solar, although DTE continues to see new participants in its program. The growing problem — and one that’s likely to bear out over the next year — is when utilities reach the cap in the number of customers who can participate. The cap is set at 1 percent of a utility’s total capacity. One utility in the Upper Peninsula already has reached its cap, while Consumers and DTE are estimated to reach theirs over the next year or two. The Michigan Public Service Commission reported this month that solar installations grew nearly 57 percent in 2018. “We’re really going to run into a difficult spot when it comes to smallscale solar in 2020,” Jameson said. Additionally, clean energy advocates say Michigan lags behind states like Minnesota and Illinois by not having “community solar” laws that allow residents who may not be able to afford or accommodate solar to invest in local small-scale projects. Bipartisan bills introduced throughout 2019 aim to address distributed generation and community solar. Although clean energy advocates support the legislation, DTE and Consumers came out against them. In October, Consumers Energy CEO Patti Poppe said the bills “really aren’t necessary” in light of the

company’s long-term Integrated Resource Plan approved in June. Laura Sherman, president of the Michigan Energy Innovation Business Council, says solar installations are part of a broader trend of utility customers and businesses taking control of their energy usage. Much of the shift, she added, is being driven by declining costs. “Big cost declines across the board are driving utilities, customers and cities toward advanced energy, wind, solar, storage and energy management,” she said.

EVs and grid planning As major automakers across the globe prepare to build new electric vehicle models in the coming years, state regulators and utilities are actively preparing charging station infrastructure in Michigan. Consumers and DTE have launched their own electric vehicle pilot programs totaling a combined $23 million for charging station rebates, both for homes and in public areas. In 2019, the Michigan Energy Office also commissioned studies on optimal locations for public fast-charging stations across the state. The goal is to give EV drivers peace of mind to cross the state without running out of charge. The state is also using $10 million from its $64.8 million in Volkswagen settlement funds to contribute to rebates for public fast-charging stations. Lawmakers, too, have taken up the issue. In June, state Sen. Mallory

McMorrow, D-Royal Oak, led a bipartisan package of bills that would encourage charging stations at state parks and carpools while also giving incentives to property owners who install stations. The movement around EV charging is meant to align with automakers’ ramp up of EV models in the coming years. “Our EV charging landscape is really going to grow,” Sherman said. “That aids in customer confidence along with the new models coming out.” The Michigan Public Service Commission — which includes two new members appointed this year by Gov. Gretchen Whitmer — also launched the MI Power Grid initiative in October. The project is meant to prepare Michigan for the shift from large, centralized power plants to more distributed generation driven by declining costs. “For us, the push is really to make sure that’s a policy-driven process,” Jameson said. “That we’re going to actually see commission orders or some real decision-making coming out as opposed to more reports.”

Visit www.mibiz.com

SMALL STEPS TO BIG DATA FOR SMALL AND MID-SIZED MANUFACTURERS

important factor. People in manufacturing today need to hile Industry 4.0 is typically thought of in pay attention to it. It doesn’t mean you need to jump into terms of robotic arms, highly automated the deep end, but be prepared to get your feet cold and processes, and “internet of things” wet.” (IOT) devices, the next big revolution in But Nowak cautions against companies jumping too manufacturing is also heavily steeped in another far into the deep end and investing in more technology emerging technology: big data. than they can handle. Big data was the main topic at last week’s Industry 4.0 With vast amounts of data produced daily, companies Webinar, hosted by MiBiz and the Michigan Manufacturing can easily collect far more information than they can Technology Council - West. The third webinar in the larger realistically process. There’s also the issue of merging a Industry 4.0 series featured comments from big data number of different data formats, Nowak said. Software experts and manufacturers regarding best practices to may collect data from machines in Microsoft Excel, while incorporate big data into organizations. other data may be recorded with PDF, audio or a number As manufacturers continue along the Industry 4.0 of other different file types. Simply merging those formats path, many are beginning to add data science and into data that can be processed can be an immense analytics, or “big data,” into their operations. If IOT devices challenge for manufacturers. are considered the engine of Industry 4.0, big data is the Overall, Nowak suggests small- to medium-sized fuel, said Dr. Brent Nowak, the executive director of the manufacturers approach big data with the simplest applied Medical Device Institute (aMDI) at Grand Valley strategy and lightest investment State University. possible. Similar to technology “We gather (big data), process it FIND YOUR PATH TO companies working in cuttingand turn it into the energy behind edge sectors, it’s better to fail the global revolution,” Nowak said. BIG DATA fast and learn, rather than be Nowak noted the global value of Start by watching the online stuck with a large investment in a big data is expected to reach $14.4 misunderstood technology, he said. trillion in 2021, with 35 percent of video replay of the webinar “Big data is not just a project, companies already collecting data at mibiz.com/webinar to it is a business strategy and I’m by smart sensor technology. That get the big picture on big data recommending that you want to be means manufacturers of all sizes and to hear how 21st Century able to fail,” Nowak said. “If you’re need to jump into big data, or risk going to hire a team of five Ph.D. Plastics took a “figure it out” being left behind, Nowak said. researchers to do a big project and “It’s an evolution that you’re not approach to implementing its invest a lot into infrastructure...that going to be able to stop,” he said own big data strategies. might not be the first place to start of Industry 4.0. “(Big data) is an

your small- or medium-sized manufacturer.” 21st Century Plastics Corporation, a Potterville-based plastic injection molding company, has adhered to that light and fast approach to data science. While the company has collected machine data since 1994, it recently began searching for other areas where big data technology may be useful to the organization. “In 2019, we really started thinking — we have our production really taken care of, but what else can we track, and keep data and records on that may help,” said Doug Sanford, a project and process engineer at 21st Century Plastics. “We were thinking (about) what things would put us… out of business or shut us down.” Sanford and his team decided to integrate sensors and big data technology into their plastic injection-molding machines to monitor the electrical draw per machine. Sanford opted for the “fail fast, fail cheap method” and purchased some cheap amp meters and created an interface that would collect and catalog data from the machines. 21st Century Plastics hopes to eventually use the data to create a predictive maintenance model. The manufacturer is currently working on integrating other sensors into its vacuum system. For Sanford, the key to 21st Century Plastics Industry 4.0 journey with big data thus far was the “figure it out”

GREATER PASSION

BETTER

approach the company takes toward problems. Instead of relying on vendors, Sanford and his team do the bulk of research, testing, and problem solving themselves. For those engineers in positions where they need to sell the benefits of big data to executives, Sanford suggests purchasing some cheap sensors and an offthe-shelf microcontroller and experiment on their own. “If you really think you need to try something, then maybe buy a $10 Arduino and do something at home and bring it in...plug it in and say look what we can do,” Sanford said. “ I did this in five minutes for 20 bucks. Imagine what we can do with a little more time and a little more resources. Getting your foot in the door and then push through the door and just kind of do it.”

616.771.0325 125 Ottawa Avenue, Suite 450 Grand Rapids, MI, 49503

Welcome to Metro Health. Where game-changing advances are capable of life-changing results. Where leading physicians are part of a health system recognized around the world. The answers you need are no longer ‘someday’ and ‘maybe.’ They’re here and now.

MEDICINE

Visit www.mibiz.com

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

www.triangle-inc.com

TO US, IT’S BIGGER THAN A BUILDING.

At Triangle, construction is more than our job; it’s a promise to build only the best for our clients, ourselves and our communities.

Construction Commitment Unparalleled

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

Visit www.mibiz.com

RETAIL OUTLOOK

Retail professionals optimistic for 2020 By SYDNEY SMITH | MiBiz ssmith@mibiz.com

s consumers’ shopping habits change and the retail sector reacts to new technology-driven disruptions, retail industry watchers in West Michigan remain optimistic about the year to come. Among the industry insiders holding a positive outlook is Cecily McCabe at Woodland Mall in Grand Rapids. “I think we’re the best-kept secret in retail right now in that we’ve got a strong buying economy here,” said McCabe, marketing manager for Woodland Mall. “People like to shop. It makes it a lot easier to attract new retailers to Grand Rapids.” In the last year, Woodland Mall invested $100 million to renovate a former Sears store location as part of a project that redeveloped an entire wing of the shopping center to bring in high-end tenants such as Von Maur, which operates from a 90,000-square-foot space. Nineteen new retailers have come to the mall since crews began the demolition of Sears in 2017. In 2020, four new stores are slated to open in Woodland Mall, and Pennsylvania Real Estate Investment Trust Inc. hopes to redevelop another wing of the sprawling complex in the coming years, McCabe said. This growth trajectory and projections from other local retail experts contrast with the national narrative of a brick and mortar retail crisis that’s worsening because of consumers’ increasingly online shopping habits. Retail industry professionals in West Michigan are optimistic 2020 will be another strong year for retailers who are able to adapt to changes in the market. “We know there’s a strong desire by the community to shop brick and mortar,” McCabe said. That sentiment was echoed by David Denton, vice president of real estate brokerage at Grand Rapids-based DAR Development Inc. Denton called 2019 a “record year” from a production standpoint, and he expects consistency for the next few years based on the pipeline going into 2020. Denton is a 20-year industry veteran who specializes in retail and restaurant projects in Michigan, northern Indiana and Ohio. He has some national clients, like Starbucks and Tropical Smoothie, that are generating a lot of activity. In particular, national retailers remain interested in Grand Rapids’ traditional retail corridors, Denton said. “People still like brick and mortar; they still like experiences,” he said. “They like convenience, but they don’t do 100 percent of their shopping online.” According to data from Colliers International, the vacancy rate for West Michigan retail overall stands at 3.17 percent. Colliers notes that space continues to fill up quickly, especially second-generation restaurant space, end caps, mid-box space and newer multi-tenant spaces in major retail corridors like 28th Street and Alpine Avenue. “The most active retailers we find today want the brand-new center, and they’re willing to pay $30 to $40 a square foot — which seems crazy — to be on the right corner or to be next to the right center on 28th Street or Alpine, or in Grandville,” Denton said. The healthy retail outlook locally comes as the Grand Rapids Downtown Development Authority and Grand Rapids Area Chamber of Commerce next year will continue a one-year retail retention and attraction initiative. The project involves studying current and future trends in retail, as well as hiring a retail specialist who will develop and implement an action plan. The partners aim to present the recommended strategies outlined in an action plan to the Grand Rapids City Commission in the first half of 2020, and report on the outcomes of the strategies in early 2021. The study will focus on retail across the city, including downtown and in neighborhood business corridors.

Visit www.mibiz.com

For its part, the DDA awarded innovation grants to a handful of retailers who plan to open in downtown Grand Rapids. This month, three more retailers received funding from the DDA to help start their small businesses in downtown Grand Rapids. The DDA has approved seven grants since the program began in 2018, and has granted $250,000 in total. The DDA most recently approved grants for GR Noir Wine & Jazz at 35 S. Division Ave., part of a $4 million development by Rockford Construction Co. Inc. that activated a long-vacant corner of Division and Weston. Art Caribbean Fusion Cuisine also received a grant for its location at 57 Monroe Center Ave., and Oh, Hello Co., an online stationery and organization accessories company, received a grant for its first brick-and-mortar location at 40 Monroe Center Ave. The grant program was created because the DDA saw a “considerable amount” of demand

for business services downtown that are not frequently available, Kyama Kitavi, economic development manager for Downtown Grand Rapids Inc., said during the December DDA meeting. Retailers are taking note that they need to have a strong online presence in addition to their brick-and-mortar location, Woodland Mall’s McCabe told MiBiz. “We’ve learned that there’s a strong synergy between brick and mortar and online retail,” she said. “The retailers that have a strong presence in both areas are the ones that are the most successful in our mall. We’re also starting to attract online retailers that would also like to have brickand-mortar presence.” In other trends, DAR Development’s Denton expects to see more focus on the health and wellness part of the market, with fitness centers, physical therapy and chiropractic offices, as well as CBD and marijuana-related businesses.

The region also has proven attractive to experience-related retailers, such as trampoline parks or movie theaters. “You’re going to see more and more of that, which is positive, because it pulls people out to the retail areas for reasons other than food, and then opens them up to the opportunity to shop as well,” Denton said. McCabe said as long as retailers reinvest and react proactively to changes, the outlook for retail in West Michigan is “very positive.” “As long as we continue to do that, we see a healthy outlook for the future, definitely,” she said.

BUILDING MORE THAN A RESUME Instead of the standard 9-5, tradesmen and women are choosing to write a different story - one built on refined skill-sets, creativity, attention to quality and grit.

ROCKFORDCONSTRUCTION.COM

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

REAL ESTATE & DEVELOPMENT

Mary Anne Wisinski-Rosely PARTNER // NAI WISINSKI OF WEST MICHIGAN GRAND RAPIDS

Following a busy year for real estate transactions across the region, NAI Wisinski of West Michigan Partner Mary Anne Wisinski-Rosely, who specializes in the office market, expects more of the same in 2020. She projects strength across all commercial real estate segments, especially in the area surrounding downtown Grand Rapids. What are your expectations for the broader commercial real estate market for 2020? I think sales of properties will continue to be strong in 2020. Leasing will always be strong. That’s probably across the board as far as office, industrial, retail investment properties. I think in all sectors that will be true. With sales being strong, that inventory is still going to be a challenge. There’s still going to be a lack of inventory in all areas. I think pricing will remain high.

That sounds similar to what we experienced this year. I would say that is relatively the same. I don’t think there’s going to be a lot

of change in the market. I don’t think there’s going to be one big thing that is going to change a lot; I think 2020 will be much of the same.

impact our area as much as they do in other parts of the country.

What could affect the market and cause changes?

We always wonder when it’s going to happen. It’s inevitable that something will happen from what I’ve been hearing. I think there will be a downturn at some point; I don’t think it will happen in 2020, but I do think there’s been a little bit of a slowdown in the market, but not enough to make a huge impact. We might see that in 2020, but nothing major at this point.

Whenever there’s an election year, people tend to be a little bit more cautious in their decisions, not knowing how the election is going to affect the economy and jobs and supply, things of that nature. Whenever there’s an election year, there’s always cautiousness. Especially being in West Michigan, where it’s a very conservative market, you see that too. But because it’s a conservative market, people usually plan and things don’t

What about a slowdown in the economy?

The office market was particularly busy in 2019. What are you expecting next year?

In office in particular, leasing will continue to be strong. Office inventory for sale, there’s going to be a lack of inventory for sale, and there will be buyers out there, so I think pricing will remain strong from a sales perspective. Lease pricing is going to remain relatively f lat; I don’t think we will see a big increase or decrease in that. Cost of construction will still be high in my opinion; that sometimes affects the leasing rates a little bit, especially if there’s new construction.

How do you think Acrisure’s downtown headquarters move will affect that market? I don’t know if it will spark more to work downtown; I think it will be healthy for downtown to have a company such as Acrisure there. It’s more expensive to occupy space downtown. Rental rates tend to be a little bit higher, and you have the additional cost of parking downtown. I think the parking crunch has been alleviated a little bit with the opening of the Studio Park parking ramp, but I still think there is a lack of parking in certain areas of downtown. The cost of parking, if you have a lot of employees, it can be a high-ticket item that you don’t need to have in the suburbs. I think (Acrisure’s move) will spur some people to want to be downtown,

but I don’t think it’s all of a sudden going to be a huge impact.

Along with parking, are factors continuing to align in favor of the suburban market? The market surrounding downtown will still remain strong; there will be a demand for people to be close to downtown but not quite in downtown. I still think the southeast corridor will remain strong; it’s always been a strong corridor for office. We’re seeing new office space pop up on the southwest end of town in the Byron Center M-6 corridor. I think in those areas you’ll see more demand for office space as well.

Is there anything else on your mind heading into 2020? The cost of construction is going to be high, so you won’t see any speculative new buildings. They’re going to be either partially leased or owner-occupied new construction. The reason for a lot of new construction is a lack of inventory for people who want to own, so I think you’ll see a lot of owner-occupied new construction. I see the office market staying steady, not a big up and not a big down. Interview conducted and condensed by Sydney Smith. Courtesy photo.

Win more work in 2020 Field Tools software and mobile technology helps you create a safer and more productive construction job site VISIT US AT THE GREAT LAKES DESIGN AND CONSTRUCTION EXPO FEBRUARY 12-13, 2020!

www.field-tools.com 16

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

Field Tools is a locally-owned business that was created by construction industry experts. We are here to help.

Visit www.mibiz.com

Client Service Rising to New Heights

Warner is committed to providing unsurpassed legal counsel and exemplary customer service to clients of all sizes and complexities. From start to finish, we deliver solutions built upon a solid foundation. Learn more at wnj.com. Warner’s Managing Partner Douglas Dozeman is responsible for the contents of our advertising. Contact: ddozeman@wnj.com or 616-752-2148. Please read our full privacy policy on our website. Visit www.mibiz.com

1500 Warner Building 150 Ottawa Ave NW Grand Rapids, MI 49503

Grand Rapids Southfield Macomb County Midland Kalamazoo Muskegon Lansing Holland

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

REAL ESTATE & DEVELOPMENT

Mike Corby EXECUTIVE VICE PRESIDENT INTEGRATED ARCHITECTURE LLC GRAND RAPIDS

Grand Rapids-based Integrated Architecture LLC is coming off a year with many transformative development projects, including Studio Park and Bridge Street Market. While being as diversified as possible, the firm also will focus on how it can contribute to solutions to the housing crisis in 2020, said Mike Corby, executive vice president at Integrated Architecture. Overall, he feels optimistic, yet cautious, for 2020.

This was a year of big projects for Integrated. What’s next?

DAN VOS

PRESIDENT AND CEO // DAN VOS CONSTRUCTION CO. ADA

As the frenetic pace of projects begins to become more manageable next year, Dan Vos Construction Co. Inc. President and CEO Dan Vos hopes his company will be able to say yes to clients more often. The full-service construction firm has a strong pipeline heading into 2020, even if it is expected to slow down somewhat compared to the last couple of years.

What’s your overall sense of the construction market for 2020? I think for us next year is going to be similar to this past year and maybe a little slower, but not much. We’ve got a pretty good backlog going into the new year, similar to last year at this time. We’re short on people like everybody else, and there’s plenty to do. It doesn’t seem to be slowing down a ton. I think we’ll have our typical little slowdown in late February or March for a little bit, but then spring comes around and everybody ramps up again.

Nothing out of the ordinary then? No, not really. I don’t expect a whole lot of difference. A lot of our clients are repeat clients that we work for year after year after year. They’re cranking.

How does the vision of your project pipeline compare to a year or two ago? I’d say it’s normal. It’s hard to go past a year out. We don’t usually book stuff beyond that. So I feel comfortable for the next year anyway, and after that it gets a little more fuzzy.

Have you seen any major themes emerging for projects? For us, it’s been a mix. In the last year or two, it’s been pretty heavily in the religious sector: churches, private schools and things like that. After the recession, that market was dry. You’re dealing with a lot of personal money. When people are having

a hard time, it’s tough to give to a school or something like that. I think there was kind of a big backlog for that type of thing: new churches, new schools, or renovations. We’ve got quite a few going right now and have for the last couple of years. It’s not a major market for us, but it’s just something we do a lot of. We’re in the food processing and pharmaceutical world also. Those tend to be strong markets pretty consistently. Even in a downturn, those two areas are pretty strong so that helps even out the down times for us.

Are there any lingering effects on raw materials stemming from ongoing trade tariffs? We hear a little bit of chatter from our clients about it but it kind of is what it is. They need it, so you do it.

Do you see any major change in the cost of construction in the next year or so? I think it’s just a factor of the market. I don’t know that once costs go up, they come down much at all — ever. It’s just kind of a factor of the way things are.

Will 2020 be the year for more speculative projects? We don’t do any of that anyway, so I don’t have a feel for that at all. … We specifically build for a client, so if a client needs something, we do it for them. It’s not on a spec type of deal. We just have never been in that. I know a lot of our competitors do it and that’s great, but it’s just not what we’re doing.

Will the presidential election have any effect clients’ willingness to do projects? I don’t know when that’ll start to happen and I don’t know if it will, but I’m guessing it probably will. I think it always does.

Is that a headache for next year? No, I don’t think about that much.

How does the continued investment around the West Michigan area help attract new projects for contractors to work on? There’s been a lot more activity … and I think it’s bound to attract people. I look at my son, who is going to be in college next year. If you look at these kids coming out of college, it’s a cool place to be. It’s bound to attract young folks and businesses.

It sounds like you’re expecting more of the same for 2020. Does that pose any challenges for your company? I’m not too worried about it. We’ve got more work right now than we can do. We’ve said no to more projects this past year than we ever have just because we can’t handle them because of the staff. I think that’s going to continue into next year and hopefully we’ll have the right mix and we won’t have to say no next year. But that still means we’re busy, we’re just not as crazy busy. You can finally get caught up on some things and you can refresh some equipment.

What’s keeping you up at night as you look ahead to next year? I always get a little nervous this time of year for upcoming work, but at this point in the year, I feel good with our backlog. I feel good with our people that we have on board. We’ve got an excellent team right now. All cylinders are operating pretty good, so I don’t stay up at night a whole lot for anything. Interview conducted and condensed by Joe Boomgaard. Courtesy photo.

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

In terms of the larger projects, we are working on the final phase of Studio Park, the new Acrisure LLC headquarters. That’s going to be a great project. This is kind of the last major piece of the first phase of the development. We’ve got a lot of other things going on downtown with a couple of projects … and we have a project coming up with Blodgett Hospital this year. We were awarded another project with the University of Michigan and a lot of other housing and development projects are on the books.

What makes the upcoming year different from 2019? The thing that was interesting is we’re really getting a strong focus on housing, and in particular housing that’s trying to help serve a market that’s not been very well served. We’re still doing a lot of market-rate housing. Housing is a big deal with a lot of our clients and it’s going to be a continued project type that’s going to be pretty important just because every community seems to have a housing need right now. But I think it’s a cautious year. It’s just one of those years where you’re not sure which direction it’ll head, but it seems like there’s a lot on the horizon. We’re very optimistic.

What’s causing the caution? On the housing and development side, the costs of construction are quite high. Rents are kind of limited by the market, whereas construction costs basically can rise independently. The big challenge right now is being able to build something cost effectively and be able to get enough rent or sales price to cover the cost of construction, as well as to give the developers some measure of profits. The incentives that West Michigan was very fortunate to get over the course of maybe a 10- or 15-year period are not as available anymore. Developers and contractors and architects are having to figure out different ways to make the equations work better. But I think it’s just construction prices are quite high and the markets are stabilized in terms of rents and things like that.

Are you concerned about a slowdown in the economy? I tend to operate with a great deal of caution and paranoia anyway. Our business is a very cyclical business. Typically, the cycle is a seven-year cycle and we’re going on our 10th year of fairly steady, decent markets. You’d be foolish not to be concerned. It’s interesting, though: The R-word really doesn’t come up much with clients, which is good. The feeling that I sense is business as usual, understanding that construction costs are high and you have to figure that out. But the other thing about our particular business is our office is very diversified. We’re doing work in the corporate market, we’re doing work in the health care market, we’re doing work in the housing market. We’re still responding to a lot of proposals, both in terms of the corporate sector, but also the institutional sectors like colleges and universities. They still seem to have projects in the pipeline. As long as we can secure a few of those, we’ll be good.

You mentioned spending time on housing projects. What does that entail? As a firm, we’ve got an internal housing think tank that’s really trying to understand architects’ and designers’ roles in helping solve the housing crisis. We’ve really started to look at designing communities — unit housing design, how we can fit efficiencies in the design that will make the projects cost less yet still be quite livable. We’re working with organizations like Housing Next and we’re working with Michigan Community Capital. These are all organizations that have a strong housing mission. 2020 for us, it’s business as usual in terms of the project types, but I think there’s going to continue to be a strong focus on how we can help solve the housing issues that communities in West Michigan and Michigan in total are experiencing.

What made you want to get involved in that? We saw the writing on the wall maybe about four years ago. We’ve started to look at unit design and getting smaller units because, obviously, the smaller the price of architecture square footage wise, presumably the less costly it will be. There’s opportunity. Just from that perspective, there aren’t a lot of firms that are looking at it. Both developers and architects tend to gravitate toward what they know best. There needs to be some design solutions that can address it proactively versus just hoping that we can figure out a way to cut a few dollars here and there. Design in this instance might play a very strong role in helping — along with other partners in the whole process — to solve the housing crisis.

What else are you watching for 2020? I don’t sense any pessimism with clients, or anything but optimism right now. That doesn’t mean that there’s not something looming out there, but generally the sentiment out there is people are still focusing on doing projects and that’s a positive thing. It’s definitely something that tells me that this year should be another reasonable, decent year versus a year that maybe isn’t so good. But we’ll see. Interview conducted and condensed by Sydney Smith. Courtesy photo. Visit www.mibiz.com

AS WE LOOK BACK ON OUR 80TH YEAR, WE THANK OUR TEAM Wolverine Building Group is impacting people and communities across the state, nationally, and in our backyard here in West Michigan. We are thankful for a team of individuals who exemplify our purpose and core values through their hard work, dedication, and commitment to volunteering. We love what we do.

Visit www.mibiz.com

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

HEALTH BIZ

Mick Young

PRINCIPAL AND OFFICE BUSINESS LEADER // MERCER GRAND RAPIDS

HR consulting firm Mercer’s annual cost survey shows employers across Michigan paid an average of 4.7 percent more for employee health benefits in 2019. Employers expect 2020 costs to increase another 5.3 percent, provided they maintain the same benefit level, and 3.6 percent if they make changes to their health plans. As costs keep rising each year, Mick Young of Mercer’s Grand Rapids office sees more interest among employers for greater consumerism in health care and a much higher focus on the quality of care for their employees. What’s the biggest trend you saw emerging this year as employers renewed health benefits for 2020? There is a much greater attention on the employee experience that relates to health care, and that’s everything from ‘how do I enroll’ to ‘how do I get help’ to ‘how do I manage my chronic disease.’ (They are) becoming focused on the experience of that employee and that member. The comparative experience in health care is vastly different to buying a song on iTunes or to picking an app or to watching a movie on your phone. The experience is so much quicker, it’s so much more pleasant than trying to get your flu shot or trying to manage diabetes. There is a tremendous focus on how do we improve the experience of the member.

What would you like to see happen in health care in 2020? A laser focus on quality. Forget about deep-discount networks, forget about narrow networks, forget about which (health) systems are in or out of a network. Let’s focus on who provides quality service at a reasonable cost. I believe there’s going to be a huge focus on that space in 2020 as well. Separate from ‘where do I get the biggest discount,’ it’s more about ‘where is my outcome going to be best for me?’

Are employers beginning to gravitate to that issue? Absolutely. There is so much going on around that quality quotient and it’s coming like a freight train. The data shows employers are at the point

where they all realize you can only shift so much (of the costs for health coverage) to the members. If the member can’t afford it, then they just can’t afford it. You look at social determinants of health and the affordability of health care, the issues are so much more important than getting a deeper discount (from care providers through your health plan). It’s more about how do we hold the hands of these members to get the care that they need.

What is something else in health care we’ll hear more about in 2020?

Beyond costs, what’s the biggest issue for employers in the new year?

Complacency. Employers across the country have got to lead the disruption and they have to lead the change. When year-to-year costs appear to be reasonable, it sort of pushes the button on complacency and sort of lets people breathe a little and maybe kick the can down the road a little bit. In my opinion, that’s exactly the wrong sort of thing to do. The time is now to put the pedal down and really let employers drive change and don’t wait for any carriers to deliver that.

There’s a war for talent and I feel everyone’s attention is on that key focus: How do we attract and retain the people we end up hiring to stay with our firm? That’s probably the singular, most important issue for employers: How do we meet employees where they are and in a way that they want to work here and stay here?

What do you want to hear the presidential candidates talk about during the 2020 campaign? I’d like to see them address and argue and debate Medicare for All. I’d like to see them sort of articulate what does that look like, what does that cost, and then find the middle ground in terms of what’s realistic based on what we can afford and get that on the table. That’s not to say that is a solution, but let’s get it on the table and thoroughly vet that as an alternative. I think that would motivate the marketplace to move quicker toward this quality quotient and toward this member experience, and toward how do we make and keep people healthy. Understanding what a government solution might look like will then motivate people to find the right solution in between.

The concept of a concierge and advocacy at a much deeper actual level for members, whether they just need a card or to figure out their diabetes, or whether they need to schedule surgery. The concierge advocacy model is another very fast-moving train that will be here in 2020.

What makes you worry about next year?

What makes you optimistic? I feel like we’re in a spot that we’re ready to put our pedal down. I think employers are ready to lead. You look at the Amazon-Berkshire-Chase connection (through a joint venture named Haven Healthcare to address high health care costs and improve outcomes) and there’s leadership. That gives me hope. There’s a groundswell of demand from members that are saying, ‘This has to be different.’ With this economy and this war for talent, (employers are) pushing the envelope.

Interview conducted and condensed by Mark Sanchez. Courtesy photo.

616.784.5833

COMMERCIAL • INSTITUTIONAL INDUSTRIAL • FOOD/AGRICULTURAL • FAITH/WORSHIP 20

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

Visit www.mibiz.com

FRANK SARDONE

PRESIDENT AND CEO // BRONSON HEALTHCARE KALAMAZOO

Frank Sardone departs Bronson Healthcare at the end of the year, ending 31 years with the Kalamazoo health system, the last 23 as its president and CEO. He prepares to retire as Bronson Healthcare undertakes major capital projects that include a new $22 million hospital in South Haven and a $60 million outpatient cancer pavilion in downtown Kalamazoo. Like other health systems, Bronson is responding to forces that are reshaping health care and will only continue to affect the industry in 2020 and beyond. James “Chip” Falahee will serve as interim CEO until Bronson hires a new chief executive.

What do you see as the state of Bronson Healthcare today as you prepare to exit? I’m pleased to say I’ll be handing Bronson off in a strong position from a patient care standpoint, from a quality standpoint, and solid strategically and financially. From a patient care standpoint, we continue to make improvements in quality. We’re always striving to provide the highest level of care and that process continues. Strategically, we have various projects underway right now. All of these are designed to bring high-quality care to the customer wherever they are.

What are the major forces driving change at Bronson in 2020?

It’s similar trends that we’ve seen over the past several years. Consumerism is certainly driving a lot. Just as our shopping habits have changed and evolved with online ordering and delivery services, we’re making health care much more convenient and accessible, through virtual visits and by having offices closer to where people live. The other thing that continues to evolve is the whole value equation and making sure that we provide the right care at the right time at the right place and at the right cost. We continue to see the shifting payment models that shift more risk to health care providers. That trend continues to evolve and we have to continue to look at ways to more efficiently provide care, and that’s a good thing because we’re focusing on what’s the right care at the right time and place for that patient.

If you had the power to make any change to the American health care system, what’s the first thing you’d do?

That’s a pretty simple answer for me because it would be to make sure everyone has appropriate health care coverage. We’re well aware of the debates going on nationally and the whole gamut of options. I don’t advocate a specific model, except that we should be striving for that universal coverage. I look at health care as a right and I think in our country, we should be figuring out how everyone gets covered.

What do you want to hear the presidential candidates talk about in 2020?

So many countries in the world have figured out how to provide universal health care coverage. That should be part of the dialogue, regardless of the political party.

What issues are going to emerge and accelerate in health care in 2020?

The trends that are there with consumerism. No question, we have completely changed our habits in virtually every other aspect of how we purchase goods and services. Health care is no exception. I think technology will enable that. The other thing is the trend toward shifting the risk for the population to the health care provider. That means we have to and we are paying greater attention to the social determinants of health. It’s been demonstrated that we can only, from a health care provision standpoint, do about 20 percent, and 80 percent of the impact is from the social determinants.

What in your industry worries you?

The uncertainty. We had what was demonstrated as improvements (in health coverage) from the Affordable Care Act. That has been questionable with the changes that have (since) been made. What will the next cycle bring? It’s just the uncertainty. There’s a long lead time for any project in health care that requires construction and requires capital, and that uncertainty is a real challenge. The more certainty we have, the better we can plan to meet consumer needs.

What gives you hope and optimism for 2020?

We are getting better and better as an industry in understanding patient needs. We’re doing a better job of applying evidence-based medicine to whatever the condition is, and the electronic health record enables that implementation of whatever that pathway is for that patient. It allows the physician and other providers to see what you received here and what lab test you had there. Being able to see that complete record for a patient is very important. I never buy into the gloom that many advocate. We’re providing better care today than we were 40 years ago that’s been enabled by technology and the other resources. I think it will just keep getting better and better. We’re always going to be challenged by how we pay for these miracles that get produced every day, but I think it’s a worthy challenge that we take on.

When you write the letter that you leave in the desk drawer for your successor to read on their first day, what advice will you offer?

I’ve been asked that question a lot lately. I’m reminded of (the book) Seven Habits of Highly Effective People. One of the things that’s always stayed in my mind, and I must have read that over 25 years ago, was ‘seek first to understand.’ That’s kind of a credo I’ve always carried with me. In health care, you have lots of different stakeholders. You have a staff with close to 9,000 people, we have the community, we have physicians and we have other providers. Most importantly, we all have and share the ultimate customer — and that’s the patient and their family. So seek first to understand what does that patient need and how do we best serve that patient. I look at us as being servant leaders. Everything we do is in a pretty complicated industry, but you can simplify it by saying, ‘Whatever we do, this is all in service to our ultimate customer, the patient and family.’

Marianne UdowPhillips EXECUTIVE DIRECTOR CENTER FOR HEALTHCARE RESEARCH & TRANSFORMATION ANN ARBOR

Marianne Udow-Phillips considers the last few years an “interesting time in health care because it’s always hard to predict exactly what’s going to happen” under President Donald Trump. The executive director of the Ann Arborbased Center for Healthcare Research & Transformation, UdowPhillips hopes that what happens in 2020 is a greater push to better controlling ever-rising costs in health care.

What’s the biggest issue for Michigan’s health care industry in 2020? The biggest issue is a continuation of the big gorilla in the room, which is the cost of health care. Everybody’s been looking for what the magic bullet is and we’ve gotten to the point in health care where so much of the cost has been transferred to consumers in the form of co-pays and deductibles and these high-deductible health plans, and that’s kind of run its course. That is not going to be an option going forward, yet we still have the cost of health care as a major issue.

What are some tactics to combat rising costs in 2020? On the positive front, more employers are understanding the connection between human service issues and the cost of health care. We do have a lot of people who end up in the emergency department of hospitals, but they really are there because they’re dealing with issues related to substance abuse or mental health issues or other issues. If you could deal with them on the front end, on the upstream, you could keep them out of the emergency department. So on the positive end, we hear more health plans — and more purchasers and employers — talking about what’s known as social determinants of health. What do we do about those kinds of critical issues? Employers are looking for a lot of different strategies. Some of them do say maybe we should think about concierge medicine or direct primary care, or something like that. There’s no data out there to show that saves money, but I think it expresses an idea that employers are frustrated with what the choices are and are really searching for anything.

What could we see in the state Legislature next year to address health care issues? I do think we’ll see movement in our state on price transparency bills, particularly when it comes to prescription drugs. Drug transparency is on the agenda in Lansing for sure. Surprise medical bills are still on the agenda in Lansing, and that is a critical issue. There does seem to be bipartisan support to do something with surprise medical bills, and that’s also moving at the federal level.

What do you want to hear the presidential candidates talk about in their campaigns? I really want them to focus on this issue of the cost of health care. We’ve gotten way off in this discussion on Medicare for All and other approaches on financing that miss the core issue that consumers really care about, and that is they are paying too much for their prescription drugs. So I really want to hear the candidates focus on what they would do about the cost of care.

What’s lurking over the horizon that makes you worry about 2020? No question, this Texas lawsuit makes me worry because it will be so disruptive to the health care system (if the Affordable Care Act gets overturned). [EDITOR’S NOTE: As this report went to press, a federal appeals court ruled the individual mandate was unconstitutional, but sent the case back to a lower court to decide what parts of the law can stand.] Sure, it would go to the Supreme Court and who knows exactly where it would end up, but it would throw so much chaos into the system and we need predictability. We need people to have a system that they understand and that continues to function. That lawsuit and some of the other efforts that have been attempted to undermine the Affordable Care Act really create business uncertainty and sow a lot of chaos in the marketplace.

What makes you think some of the problems with health care will get a little better? This positive trend I see of health plans recognizing the connection between social determinants of health and the costs of health care. That’s huge, and that’s been a long time coming — the fact that we’re now even talking about those kinds of issues and that there are efforts underway to think creatively about what health benefits could look like in the future that might address some of those problems.

What would surprise you in 2020? If we pass a federal bill on prescription drug costs, that would surprise me. That would be a good thing, but it means that we have overcome a huge lobby in Congress. If there were more coming together of Democrats and Republicans on ways to fix the Affordable Care Act and move it forward to create more access for people, that would surprise me and it would be a good thing. Interview conducted and condensed by Mark Sanchez. Courtesy photo.

Interview conducted and condensed by Mark Sanchez. Courtesy photo. Visit www.mibiz.com

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

U.S. ECONOMIC OUTLOOK

Economists expect U.S. to avoid recession in 2020 By MARK SANCHEZ | MiBiz msanchez@mibiz.com

ears of a national recession in 2020 are largely unfounded. So insists Jim Robey, director of regional economic planning services at the Kalamazoo-based W.E. Upjohn Institute for Employment Research. Amid outlooks that predict slower growth ahead for the U.S., Robey and other economists don’t see a recession occurring in 2020, nor the year after. Rather, they project the nation’s record economic expansion will keep going, as it has been for more than a decade. “No one is thinking 2020 is a recession year, and maybe not even in 2021,” Robey said. Helping to keep the U.S. economy growing, Robey even if at a slower pace, is high consumer spending and confidence, according to Robey. Key measures of consumer confidence by the University of Michigan and The Conference Board remain high. The University of Michigan consumer sentiment index Ehrlich stood at 99.2 as of December, up from 96.8 a month earlier and 98.3 a year earlier. The Conference Board’s index has slipped in recent months, although its last report in November noted

that consumer “confidence levels are still high.” “As long as they’re strong and they believe in the economy, we’re probably going to be OK,” Robey said of consumers, a segment that accounts for two-thirds of the U.S. economy. Outlooks generally expect U.S. Real GDP growth of 2 percent or lower for 2020. The Federal Reserve Board’s latest outlook projects 2 percent Real GDP growth next year, down from an expected 2.2 percent in 2019. In the longer term, the Federal Reserve forecasts Real GDP growth to ease to 1.9 percent in 2021 and 1.8 percent in 2022. University of Michigan economists predict 1.7 percent Real GDP growth for both 2020 and 2021. Gabe Ehrlich, associate director of the University of Michigan Research Seminar in Quantitative Economics, described the 2020 outlook as “reasonably good. It’s slow but steady progress and no recession.” “This far into a business cycle expansion, that’s pretty good,” Ehrlich said. “The natural tendency of the economy is to grow over time. The reality is that the U.S. economy has a lot going for it.”

Increasing odds At Comerica Inc., economists in a December outlook predicted 1.9 percent Real GDP growth in 2020. Comerica credited consumers with keeping the U.S. economy growing. “Despite weakness in both business investment and the manufacturing sector, the consumer sector has been a key source of strength and stability for the U.S. economy,” Comerica economists wrote in their monthly outlook.

5 Year Loan/7 Year Amortization Commercial Finance $25,000,000 TRANSPORTATION COMPANY

Revolving Line of Credit & Term Loan Asset Based Lending $5,250,000 MACHINING MANUFACTURER & MATERIAL HANDLING EQUIPMENT COMPANY

LOC/Term (5/5)/EOL C&I $6,000,000 AUTOMOTIVE PLASTIC INJECTION MOLDING COMPANY

LOC/Term/CREM C&I $3,330,000 PRODUCE SUPPLIER

We’ve got the right formula for commercial banking. No matter the industry, Chemical Bank offers creative solutions and enthusiastic team members that add value to your business. Visit ChemicalBank.com or contact Krista Flynn, West Michigan Regional President, at 616.588.7424 for more information.

Member FDIC

“Consumer spending increased at a faster rate than GDP for five out of the seven quarters ending in 2019 Q3. Consistent healthy consumer spending has been supported by a tight labor market.” Yet that doesn’t mean the U.S. economy can avoid risks for a recession, such as a slowing manufacturing sector and weakening business investment that could ultimately carry over to consumer confidence and spending. Comerica pegs the probability of a recession at 22 percent within the next six months and 40 percent within a year. That probability grows to 53 percent within two years and 63 percent within three years, according to the Comerica outlook. In a survey of 53 economic forecasters by the National Association of Business Economics, one in five said they expected the U.S. economy to begin turning downward by mid 2020 and onethird expects that a downturn won’t occur until the second half of 2021 or later. NABE survey respondents expect 2020 Real GDP growth of 1.8 percent.

Tariff uncertainty

“I think USMCA will be very good for us, particularly taking uncertainty out of the market,” Robey said. Even with slower growth, economic outlooks predict that unemployment across the country will remain low, providing employers little relief from a tight labor market. Comerica predicts a 3.5 percent unemployment rate for 2020, and the University of Michigan projects 3.5 percent next year and 3.4 percent in 2021. The Federal Reserve projects an unemployment rate of 3.5 percent in 2020 growing slightly to 3.6 percent in 2021.

Interest rate stability

Business owners can look forward to one imporAs the new year approaches, the U.S. economy tant piece of certainty: Interest rates will not rise continues to grapple with the effects of trade tarearly in the new year. iffs and the trade war with China. After three interest rate cuts since July, the That uncertainty takes a toll on business conFederal Open Market Committee (FOMC) voted fidence and capital spending, the latter of which Dec. 11 to keep the federal funds rate at its preshas been trending downward as of late, Ehrlich ent level. In a statement, the FOMC noted that said. The trade war, he said, “obviously is not a unemployment remains low and that “although big plus for growth.” household spending has “One of the biggest been rising at a strong things is the uncertainty pace, business fixed involved. When you’re investment and exports making a long-term remain weak.” investment, you really “Our economic outwant to know what the look remains a favorable rules are. Right now, one despite global develcompanies just don’t opments and ongoing know what the rules of risks,” Federal Reserve the game are going to be, Chairman Jerome Powell and that’s tricky,” Ehrlich — GABE EHRLICH stated. “We believe that said. “To some extent, the current stance of Associate director of the U-M Research that can matter even monetary policy will supSeminar in Quantitative Economics more than just the tarport sustained growth, a iffs themselves. You don’t strong labor market, and know. There’s the direct inflation near our symcosts of tariffs, but then there’s the fact that they metric 2 percent objective. As long as incoming could be different a year from now.” information about the economy remains broadly A new trade deal with Mexico and Canada consistent with this outlook, the current stance of could help ease some of the uncertainty, Robey monetary policy likely will remain appropriate.” said. Outlooks generally expected the FOMC to Enacting the U.S.-Mexico-Canada Agreement, maintain the present federal funds rate. referred to as USMCA, “is absolutely essential,” Robey at the Upjohn Institute views holding Robey said. In Michigan, Canada accounts for interest rates steady as appropriate. nearly 42 percent of the state’s $58 billion in “I’m looking at the fundamentals of the econexports annually, while Mexico receives 21.2 omy and there’s no reason to lower interest rates,” percent, he said. Robey said.

“The natural tendency of the economy is to grow over time. The reality is that the U.S. economy has a lot going for it.”

BAUER sheet metal & fabricating EST. 1932

THE ONLY WAY TO MAKE MALT FOR THE BEER INDUSTRY.

Malting America

A Division of TCF National Bank

(Malters Advantage)

bauersheetmetal.com | (231) 773-3244

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

Visit www.mibiz.com

WEEKEND INVESTMENT. LIFELONG RETURNS.

RACHEL GONZALEZ DIRECTOR, GLOBAL COMPENSATION & BENEFITS DAYCO EMBA, CLASS OF 2018

Now is the time to invest in your future. The Broad EXECUTIVE MBA is the best EMBA value in the Big Ten. In less than two years, a short-term weekend investment can bring you lifelong financial, professional and personal returns.  Elevate

yourself among your peers your earning potential beyond the ordinary  Nurture essential leadership and business skills  Build a lasting and powerful professional network  Grow

Call (517) 355-7603 or visit broad.msu.edu/westmi to get started.

Visit www.mibiz.com

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

MICHIGAN ECONOMIC OUTLOOK

After ‘disappointing’ year, Michigan economy poised to grow in 2020 By MARK SANCHEZ | MiBiz msanchez@mibiz.com

combination of factors came together in 2019 to take a bite out of Michigan’s economy. The six-week General Motors strike, white-collar job cuts at GM and Ford early in 2019, a slowing manufacturing sector, and relatively f lat auto sales collectively held back the state’s growth this year. As 2020 approaches, Gabe Ehrlich and his colleagues at the University of Michigan expect the effects of those one-time factors to fade and the state to return to moderate economic growth after a “disappointing year” in 2019.

“The sun has kind of really stopped shining on Michigan’s economy this year, but we’re holding our own. We’re hanging in there and we do expect growth to pick back up over the next couple of years,” said Ehrlich, associate director of the University of Michigan Research Seminar in Quantitative Economics. The University of Michigan’s most recent state outlook forecasts a return to a “moderate trend” in 2020 with 1.3 percent growth in state Real GDP, followed by 0.9 percent growth in 2021. For 2019, the state’s Real GDP grew just 0.4 percent because of one-time events during the year, such as the GM strike that directly took 31,500 payroll jobs out of the economy this fall and generated spillover effects across the automotive industry’s supply chain, Ehrlich said.

That annual growth would be the lowest for Michigan since the Great Recession. “I think the outlook is still good. We think a lot of those obstacles are temporary,” he said. “There were a lot of one-time things that we saw that we’re hoping we’re not going to see again over the next couple of years.” However, a slowing manufacturing sector “is kind of the new normal” through 2021 for Michigan, Ehrlich said. T he Un iversit y of Mich iga n projects employment to return to a “moderate but sustained” growth trend with the state’s economy generating 23,300 new payroll jobs in 2020 and 25,900 in 2021, according to the outlook. That’s about half the pace of job creation in 2017 and 2018.

Amid moderate economic growth, Michigan’s unemployment rate will remain low and dip further, and the labor market should stay tight. The University of Michigan predicts the statewide unemployment rate will inch down to 3.9 percent in 2020 and 3.7 percent in 2021. As of October, unemployment in Michigan stood at 4.1 percent. Three of the four lowest county unemployment rates for the month were in West Michigan: Ottawa County, 2.3 percent; Allegan County, 2.4 percent; and Kent County, 2.5 percent.

‘A pretty good run’ Comerica Inc.’s most recent outlook also projects “cooler growth in the Michigan economy in 2020.” Real GDP growth for the state should come in at 1.7 percent for all of 2019, which includes a hit in the fourth quarter stemming from the GM strike. Comerica projects Real GDP growth of just 0.5 percent for Michigan in 2020. “Cooler auto sales late this year and early next year would contribute to near stagnant overall job growth for Michigan heading into 2020,” Comerica economists wrote in their outlook. Given the combination of easing auto sales and a slower manufacturing sector from the uncertainty generated by trade tariffs, the state still should do OK economically in 2020, said Martin Lavelle, a business economist with the Detroit branch of the Federal Reserve Bank of Chicago. “It’s reasonable to expect slow and steady growth in the state, but we may be a little more vulnerable given our still higher relative exposure to the manufacturing and goods-based side of the economy,” Lavelle said. Lavelle hedges that expectation on whether consumer spending remains strong and unaffected “by these other issues that are kind of just hanging out there.” The slower growth next year would follow a period from 2010 to 2018 during which Michigan outpaced other states based on the strength of the auto industry, plus its greater economic diversity, Lavelle said. “We’ve had a pretty good run,” he said. “Overall, we’ve performed relatively well versus other states.”

Mixed messages

Running a growing business is difficult enough. And as you grow, knowing what resources are available, where to find them, and when to reach out can be another challenge entirely. Fortunately, we're here to help make those challenges easier. The Right Place is your single source for business success in West Michigan, providing you with the tools and support you need to continue doing what you do best-running your business. Find guidance, resources, and a team ready to assist at rightplace.org.

THE

RIGHT PLACE

Advancing the West Michigan Economy

info@rightplace.org \ 616-771-0325

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

In the Grand Rapids area, an annual outlook from the Kalamazoo-based W.E. Upjohn Institute for Employment Research projects moderate growth next year with slower overall job gains after years of solid expansion. “The messages are a little mixed for next year,” said Jim Robey, the Upjohn Institute’s director of regional economic planning services. In an economic outlook presented this month with The Right Place Inc., Robey projects 1.8 percent growth in total gross regional product for 2020 in the Grand Rapids area, off slightly from the expected 2 percent growth in 2019. The service sector will lead the way with 2.2 percent growth in gross regional product after increasing 2.4 percent this year, Robey said. The region’s goods-producing sector is forecast to grow 1.1 percent in 2020, down from an expected 1.3 percent this year. “We’re really looking at somewhat returning to trend. There’s been so much growth,” Robey said. As economic growth in the West Michigan region eases, employment gains should wane as well. Service sector employment will continue to grow in 2020, albeit at a slower rate than in recent years, while manufacturing jobs should dip slightly. That will result in overall employment growth of 0.7 percent for the region that includes Kent, Ottawa, Barry and Montcalm counties. The Upjohn Institute outlook expects goodsproducing employment to decline 0.7 percent in 2020. Service-producing jobs in the Grand Rapids area should grow 1.1 percent, Robey said. For 2021, Robey expects overall employment Visit www.mibiz.com

You see it every day. West Michigan is at the center of the Laker Effect. Here, you’ll find Lakers contributing their skills and drive to its considerable growth — as analysts and engineers, biochemists and health professionals, leaders of business and community. Every day your support for Grand Valley demonstrates the power of what can be.

Jim Robey, director of regional economic planning services at the W.E. Upjohn Institute for Employment Research, discusses his projections for 2020 during The Right Place Inc.’s Economic Outlook event on Dec. 11 at the Amway Grand Plaza Hotel in Grand Rapids. COURTESY PHOTO in the region to dip 0.1 percent, or by about 460 jobs, an amount he called “not that significant.” Goods-producing employment could decline by nearly 1,000 jobs in 2021, which should be partially offset by growth in the service sector, he said.

Industrial weakness Across West Michigan, key indexes for sales, purchasing, production and employment all remained in negative territory for November, although each improved from the prior month, according to a survey of industrial purchasing managers in Grand Rapids and Kalamazoo released this month. Short- and long-term business outlooks also improved from the prior month. The long-term out look among sur vey respondents for the next three to five years

improved in November to a reading of 35, up 10 points from October. The short-term outlook for the next three to six months registered 11, which compares to a record-low of negative 2 for October. Three cyclical manufacturing industries in West Michigan — the automotive supply chain, office furniture and aerospace — each appear to have peaked and are showing signs of weakening, according to Brian Long, director of supply chain management research at Grand Valley State University’s Seidman College of Business. “So far that weakening in all three of these industries has been relatively stable,” Long said. “We are probably looking at a decrease of just a few percentage points and that’s what we are hoping will continue going forward here.”

gvsu.edu/OurLakerEffect T H E P OW E R O F W H AT C A N

T H E C A M PA I G N F O R G R A N D VA L L E Y S TAT E U N I V E R S I T Y

Local business lifelines. macatawabank.com/Business

Visit www.mibiz.com

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

FINANCE

Nick Juhle

VICE PRESIDENT AND DIRECTOR OF INVESTMENT RESEARCH GREENLEAF TRUST // KALAMAZOO

Investors approach 2020 with a little anxiety from concerns about the future of the U.S. economy that moved into a record period of expansion this past summer, plus the presidential election and other issues that create uncertainty. Nick Juhle, vice president and director of investment research, says investors view the stock market much as they did a year ago: with a sense of uncertainty about how long economic growth can last.

What’s the mood of investors as the new year approaches?

It’s well understood we’re in the midst of the longest economic expansion in U.S. history. Naturally, people are anxious about the prospects of a recession, and from our perspective, it’s not a question of if we’ll experience another recession but when. … As you look back post-World War II, we’ve had a recession on average every five years or so. It’s actually a much more common thing than people realize. The problem is we’re in the longest expansion we’ve ever experienced and that makes people anxious that we’re due for another recession, and that’s compounded by the fact that our most recent experience with a recession was 2008, the financial crisis, which was particularly severe and I would say not a normal experience. I would say heading into 2020, the mood feels a lot like it did heading into 2019. Investors feel like the expansion is long in the tooth. Their anxiety is heightened as they wonder when we’re going to have the next recession and how severe it’s going to be.

A lot of the outlooks are not calling for a recession, but they do predict slower U.S. economic growth for 2020. How is that affecting clients’ decisions?

Typically when people talk about the prospect of a recession, they’ll handicap it based on the odds of having one within the next 12 months or so. There’s certainly a pretty logical story you could tell that we could make it through the next 12 months without experiencing a recession, but there’s also some more pronounced and more binary risks out there as well. I would say generally, though, it’s been supportive of people staying disciplined and staying invested in the market. We’ve seen over the last several years people have been more compelled to buy (in) the dips. Even if it doesn’t seem obvious we’ll have a recession in the next 12 months, people are staying disciplined and keeping their portfolios invested.

Will 2020 bring more or less volatility to the market?

It’s hard to say. When you look back at 2019, we actually experienced relatively little volatility. Going back another year, 2018 was more volatile but it was more of an average level of volatility. How do we think about 2020 as we look forward? It would probably be unrealistic to assume volatility stays as low as it has recently been. Again, there’s a number of things on the horizon that have the potential to cause volatility, and I’m thinking

about things like the presidential election, the ongoing impeachment discussion that could bleed into next year, a Brexit deadline of Jan. 31, and the ongoing trade negotiations between the U.S. and China. There are a lot of uncertainties out there that will evolve and proceed through 2020, and depending on how those things evolve, you could make a good case for why there could be more volatility next year than there was this year.

How could the presidential campaign affect the market?

That’s a question we’ve been hearing from many of our clients as we enter 2020. There’s certainly no shortage of bold market predictions out there based on some potential outcomes of the election — and that’s nothing new, either. There’s several well-known hedge fund managers who recently described the type of market Armageddon that could occur if Trump were defeated in 2020. You heard things like, ‘What if Warren gets elected? What if Bernie gets elected? What if ‘insert name here’ gets elected next year?’ There are bold predictions about significant market moves that could potentially occur. History just doesn’t bear these things out. If you look back in 2016, many experts were predicting that a Trump presidency would derail the markets. More recently, I saw a piece that said that a Trump resignation could cause a rally. These predictions are all over the board and if we look back over the data, presidential election years on average look pretty average.

Does it matter who’s in control?

I can look back about 84 years just following the Great Depression and on average, an election year’s returns were just shy of 7 percent, and an average annual return is about 8 percent. So it’s a pretty normal experience as far as it goes and it doesn’t really matter, if you look back, who was in power. Over those same 84 years, you had about half the time the White House was occupied by Democrats and about half the time it was occupied by Republicans, and the average return during Democratic years and Republican years were almost spot on the exact same number.

What do you want to hear the candidates talk about next year?

There are a lot of issues we face in our country and one of the things I thought was interesting was when the Fed chair, Jerome Powell, spoke (in November) about trying to take steps to extend this expansion so that it can help to even the playing field and create opportunities for what’s referred to as the ‘last hired, first fired.’ The wealth gap question seems to come into play and it’s an important theme to think about. How can we continue to grow the economy in a way that benefits all Americans?

What worries you as we near 2020?

The things that worry me the most are the things that I have the least insight into and the least ability to predict or expect. There’s a lot of binary events out there. The big topics like Brexit, U.S.China trade. You run down that list and those are all things that are uncertain but you kind of have some parameters around what the outcomes will likely be at some point and a certain level of expectations that go with that. I’m worried about that fixed business investment spending component of our economy. It’s paused right now amid the trade uncertainty, but if that’s resolved or at least if there’s some closure on that and it picks back up, then that risk goes away. The longer the trade war drags out, the bigger that risk becomes and it could bleed over into the consumer.

What makes you optimistic?

We have a lot of good things going on in the economy right now. When you think about GDP and the main components that comprise it, the consumer is by far the largest contributor and right now that consumer is amply employed, wages are increasing, which means there is money in people’s pockets if you want to work. We had a record outcome as the retail season kicked in following Thanksgiving. So people are fully employed and they are spending, and that’s a really good thing in terms of maintaining our economy. Interview conducted and condensed by Mark Sanchez. Courtesy photo.

Still GRRowing... With nonstop flights to now more than 30 destinations around the country, it’s no wonder we’re setting passenger records. This year we will finish Phase Two of the Gateway Transformation, which elevated our ticketing, baggage screening, and baggage claim areas. Even more exciting, we will begin construction on the expansion of Concourse A next year – adding gates, opening up the walkways and seating areas, and increasing the food & beverage and retail spaces. 2020 will be better than ever. 26

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

FlyFord.org Visit www.mibiz.com

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.

Visit www.mibiz.com

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.

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

POLICY OUTLOOK

Gerrymandering effort gives way to more state government reforms By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

fter securing a victory over partisan gerrymandering in the 2018 election, organizers behind the grassroots group Voters Not Politicians have their sights set on several more state government reforms in 2020. The group was behind the push to end gerrymandering — when the controlling party in Lansing effectively draws new legislative districts every 10 years — and create a 13-member redistricting commission made up of randomly selected Republican, Democratic and non-party-affiliated voters. Sixty-one percent of Michigan voters approved the constitutional amendment last year. While two lawsuits brought by Republican groups are challenging the redistricting commission process, Secretary of State Jocelyn Benson has proceeded with notifying Michigan residents about their eligibility to become members following a two-month public comment period this year. The commission is scheduled to draw districts for the 2022 election. Nancy Wang, executive directory of Voters Not Politicians, expects legal challenges to the maps as well. “Litigation is a fact of life we’re going to have to deal with,” Wang said. “Unfortunately, it’s a lengthy and costly process we just have to go through to protect the voters’ will.” The newly drawn maps — though their final form is unclear — could have major implications for the makeup of the state Legislature and Michigan’s congressional delegation, particularly in areas like Kent County that are already trending more Democratic. “We always focused voters on the process, not the outcome,” Wang said. “We can’t guarantee the maps are going to look a certain way, but when communities are no longer split or cracked for political purposes, you do get a reduction in the crazy shapes you get in Michigan. You get things like more competitive elections and new candidates.”

More reforms For most of 2019, the group gathered feedback from volunteer organizers about which issues to tackle next. Among them are transparency efforts already launched in the state House that have hit roadblocks in the Senate, and vice versa. (Michigan ranks 50th among U.S. states on transparency because of exemptions in open records laws for top lawmakers and the governor and a lack of financial disclosure requirements, according to the Center for Public Integrity.) In 2020, Voters Not Politicians plans to take on reforms to term limits, lame-duck sessions, the Freedom of Information Act, lawmakers’ financial disclosures and the revolving door of legislators-turned-lobbyists. It will likely involve a mix of constitutional amendments (which would be required to reform term limits and the lame-duck session) and legislation with buy-in from leading members of the Republican-held House and Senate. Legislative attempts to address most of these issues have failed to gain traction. Meanwhile, Michigan has among the strictest term limits in the nation, limiting representatives to three two-year terms and senators to two four-year terms. Voters approved term limits in 1992 by nearly 60 percent.

MARIJUANA OUTLOOK

Marijuana work will continue in 2020 with recreational, medical projects By SYDNEY SMITH | MiBiz ssmith@mibiz.com

Wang said the plan isn’t to abolish term limits, but rather make them “flexible” to allow lawmakers to gain expertise on various issues. “If they had more time, they could focus on building relationships in each chamber and reach compromise on long-term issues like schools, water and infrastructure,” Wang said, adding that “cycling” through lawmakers “leads to more power held by lobbyists.” The group also is eyeing reforms to lameduck sessions, the roughly month-and-ahalf-long period after elections and before the new members take office. Historically, controversial bills, such as Right to Work legislation and a deal to build a tunnel for the Line 5 pipeline, are rammed through during lame duck. For other issues — including opening up the Legislature and governor’s office to the Freedom of Information Act and restricting the ability of lawmakers to become lobbyists shortly after leaving office — Wang said the group wants to work with lawmakers on a legislative package, as attempts so far have failed to clear both chambers. The state’s largest business advocacy group has taken an interest in Voters Not Politicians’ efforts, notably when reports spread about the two groups meeting over term limits. Some reform advocates raised concerns about Voters Not Politicians working with the Michigan Chamber of Commerce, which actively fought the redistricting initiative. “I think it’s fair to say term limits have not been the panacea that proponents had hoped,” said Michigan Chamber of Commerce President and CEO Rich Studley. He added that the Chamber doesn’t support repealing term limits, but rather retaining the current number of years and allowing lawmakers to serve in the same office. Addressing other government transparency is “something we’re open to and working on at the Chamber,” Studley said. Wang said it’s “great” that her group has had “frank conservations” with the Chamber about overlapping ideas on government reform, “but I’m under no illusion that our interests perfectly align.” The overriding goal, she added, is improving Michigan’s ranking as among the worst in the nation for government accountability. “There’s a real opportunity for Michigan to go from worst to first for integrity in state government,” Wang said. “What we’re trying to do in 2020 is completely transform state government into one that’s open, transparent and accountable.”

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

ompanies working in the marijuana industry are expecting a busy year in 2020, as more licensed businesses open and additional communities begin regulating recreational operations. 2019 was full of activity as new marijuana companies sought licensing and construction firms built provisioning centers and grow operations for medical marijuana businesses, particularly in the city of Grand Rapids. After receiving a flood of inquiries for work on marijuana-related businesses this year, Grand Rapids-based Orion Construction Co. Inc. took on several projects and expects the work will continue into 2020. “Right now, we look at it as a booming market in the next year, and we’re going to take advantage of that market while we still can,” said Brad Walsh, project manager at Orion. Orion is under contract or currently working on five marijuanarelated projects, with five more planned in the coming months. Most of the projects are in the Grand Rapids area, as the city’s Planning Commission has been working through a list of more than 90 medical marijuana business applications. Many of the city-approved medical marijuana facility projects — which include 16 provisioning centers and five grow facilities, some of which also have provisioning centers — will open in 2020. Orion’s work includes new construction, as well as renovations of retail facilities, warehouses and storefronts. The firm is working on a provisioning center off East Beltline Avenue, as well as a 28,000-square-foot grow facility in the former Kids’ Food Basket warehouse on Oak Industrial Drive in Grand Rapids. Elsewhere around the region, companies from Detroit and Dallas are looking to put projects in Muskegon, which opted into allowing recreational marijuana businesses in October. “I think it’s going to be huge for 2020,” Walsh said. “It seems

like every other week we have a new prospective client come in.”

Recreational gets regulated As of mid December, provisioning centers in Battle Creek, White Cloud and Evart received state licensing to begin selling adultuse marijuana products. Most of the licenced retailers to date have been in Southeast Michigan. The city of Grand Rapids could start receiving applications for recreational marijuana businesses in April after zoning ordinance amendments for adultuse marijuana are completed, Landon Bartley, senior planner for the city of Grand Rapids, told MiBiz in an email. Communities around the state will also need to decide whether to allow recreational businesses if they have not already; many have opted not to allow them. The additional adult-use marijuana business approvals will allow medical marijuana companies to get into that industry first, per state guidelines. “A lot of these companies are being designed for medical and recreational,” said Walsh at Orion Construction. “When the city of Grand Rapids says, ‘OK, we’re going to do recreational,’ a lot of these companies will have already built that into their existing floor plan.” The Michigan Marijuana Regulatory Agency in November surprised the industry by allowing recreational businesses to transfer medical marijuana for recreational use. Some marijuana advocates have said this would cause increased pricing and shortages of product in the market. When adult-use marijuana retailers opened in Michigan this month, some stores ran out of product within days. In the first week of legal sales, recreational marijuana yielded $1.6 million in total sales from just five shops. Walsh expects a similar result in West Michigan, underscoring the desire for marijuana companies to be among the first to open. Many of Orion’s clients remain more concerned with timing than budget.

“They want to spend as much money as they have to to get these things open as quickly as possible, because they realize the companies that are open first are going to get the flood of the market share,” Walsh said. “They realize that whoever is out there first is going to get the attention.” Planning for the future will be key to ongoing success in the industry, said Max Benedict, managing partner at Blue Pointe Equities LLC, which has partial ownership in the former Benteler Automotive facility on Grand Rapids’ southwest side that will house a growing facility and retail dispensary for Fluresh LLC in early 2020. Blue Pointe Equities formed in 2018 as a privately-held real estate investment trust that plans to invest around $90 million in the local market by attracting interest from local and national accredited investors.

“There’s going to be a huge demand for product, and supply will not have come completely online yet. While the prices we’re seeing right now are high, it’s going to go up from there.” — MAX BENEDICT Managing partner at Blue Pointe Equities LLC

Benedict expects Blue Pointe to entertain more opportunities in the marijuana industry in 2020. As well, he predicts the opening of retail operations will squeeze the supply of product from licensed marijuana grow operations, which take longer to open than a provisioning center. “There’s going to be a huge demand for product, and supply will not have come completely online yet,” Benedict said. “While the prices we’re seeing right now are high, it’s going to go up from there.” Visit www.mibiz.com

CLIMATE CHANGE OUTLOOK

Advocates expect ambitious statewide climate change goals in 2020 By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

hortly after Gov. Gretchen Whitmer took office in January 2019, statewide environmental groups issued an “environmental roadmap” for policy action on various conservation issues. The roadmap through 2022 includes a focus on climate change mitigation and resiliency, calling for coordination among state agencies and local governments, supporting the “rapid retirement” of coal plants and setting “ambitious” clean energy goals. Whitmer has achieved some of the goals in her first year, such as creating an Office of Climate and Energy and joining the U.S. Climate Alliance, which commits states to emissions-reduction goals laid out in the 2015 Paris climate agreement. Attorney General Dana Nessel has also joined federal lawsuits against the Trump administration’s efforts to rollback national emissionsreduction programs, as the groups hoped. However, there’s more work to be done, said Kate Madigan, “If we put policy director of the Michigan in place that Climate Action Network. “Where we’d really like to encourages and see more action is leadership invests in the clean to move Michigan to be carenergy economy, bon neutral and run on 100 percent renewable energy for we’re going to see all sectors by 2050,” Madigan more jobs coming said. to our state.” Advocates hope for an ambitious carbon-reduc— KATE MADIGAN tion plan in 2020, mirroring executive orders from new Director of Michigan Climate Democratic governors in Action Network eight states in 2019, including Minnesota and Wisconsin.

“We’re expecting (Whitmer) will follow through on that,” Madigan said. “There is support from the people in Michigan to lead on climate change.” Madigan added that this “really needs to center around and prioritize a just and equitable transition,” particularly for communities where coal plants are closing and allowing marginalized communities to access affordable renewable energy. Also at the top of climate advocates’ 2020 priorities: Shutting down the Line 5 pipeline. “When we’re in the middle of a climate crisis, we know we need to move rapidly off of fossil fuels within the next decade,” Madigan said. “Building or authorizing new oil infrastructure through our state is absolutely the wrong direction.”

Climate coordination Climate change — driven by transportation and energy emissions — is poised to affect a broad section of Michigan’s economy, including via more frequent water level fluctuations, extreme weather and increased contamination from agricultural runoff, to name a few. In February, Whitmer reorganized the former Department of Environmental Quality Brown into the Department of Environment, Great Lakes and Energy (EGLE), which includes a climate change division. The state’s Office of Climate and Energy is led by Dr. Brandy Brown, who was appointed in June. Brown was formerly a strategist with East Lansing-based CLEAResult, where she specialized in electrification and transportation. Brown said 2019 was spent doing “internal work to lay the groundwork to accomplish future policies.” This includes coordinating among state agencies on climate planning and finding “what we have the ability and power to change within the timeframe climatologists are giving us,” as well as inventorying potential statewide effects.

“That has been a very nuanced exercise, and it has many intricate working parts,” she said. Brown said a top priority for 2020 is submitting finalized recommendations to Whitmer for climate action. She couldn’t say whether that would include more ambitious emissions-reduction goals, but added: “Targets are key. We’ll have to wait and see.” While Brown’s office coordinates across state agencies, she is the only full-time staffer. Madigan hopes more funding is directed to the climate office. Although setting strong climate targets may be a difficult task if taken to the Republican-held Legislature, Madigan maintains it’s a bipartisan issue that doesn’t pit the environment against the economy. “If we put policy in place that encourages and invests in the clean energy economy, we’re going to see more jobs coming to our state,” Madigan said.

CELEBRATE COMMUNITY CHANGEMAKERS AT THE CHAMBER’S 132ND ANNUAL MEETING

he Grand Rapids Chamber is thrilled to announce the 132nd Annual Meeting on Tuesday, January 28, 2020 at DeVos Place.

His changemaker tactics break the mold of typical executives, such as embarking on a global expedition to 50 countries across six continents to uncover the secret to building life-changing brands.

At the Chamber’s largest event of the year, over 800 attendees will celebrate what was accomplished in the community to “Create Great” in 2019, as well as the work the Chamber executed to support a thriving and prosperous West Michigan for all.

Local business leaders will leave Dustin Garis’ presentation feeling energized and inspired to drive their brand forward in new, unique ways. Attendees will also be treated to a reveal regarding the upcoming West Michigan CEO Summit, which will be back for its second year on June 4, 2020.

With the nation’s third best economy and the number one job market in the U.S., it’s no secret that Grand Rapids is on a trajectory for growth. “Grand Rapids experienced abundant expansion in 2019, and the Grand Rapids Chamber looks forward to cultivating this continued growth into 2020,” said Rick Baker, President & CEO of the Grand Rapids Chamber, “In response to our members, we are expanding our program offerings to over 160 events and programs a year, and are continuously working to provide assistance to over 2,400 members who are all Creating Great in West Michigan.” With numerous exciting new leaders coming to the community in 2019, and

Visit www.mibiz.com

exciting growth projects such as Studio Park coming to fruition, it’s been an exciting year for both Grand Rapids and West Michigan.

Additionally, the event’s keynote address will feature Dustin Garis, a world-renowned brand innovator and customer experience pioneer.

The energy from 2019 will carry into the 132nd Annual Meeting, where the Chamber’s outgoing Board Chair, and President & CEO of Priority Health, Joan Budden, as well as incoming Board Chair, and Chief Operating Officer of Roman Manufacturing, Nelson Sanchez will share insightful, educational Leadership Lessons for attendees.

Dustin Garis has been pushing boundaries throughout his career at the most breakthrough companies around the globe. This includes the likes of The Coca-Cola Company and Procter & Gamble FutureWorks — an innovation epicenter responsible for incubating a billion-dollar portfolio of disruptive ventures worldwide.

This event is brought to you by Premier Sponsor Blue Cross Blue Shield of Michigan. Tickets to the 132nd Annual Meeting are available now. Visit grandrapids.org/annual-meeting to register.

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

ECONOMIC DEVELOPMENT

Rick Baker

unpredictable, but the presidential years always kind of add an element of unpredictability to the economy. I think keeping a close eye on what’s happening in the political arena is always important for us, as well as the public policy area, because ultimately the political arena is about affecting public policy. We do a lot of work in that space, both at the state and local level, but then partnering with our U.S. Chamber of Commerce on the national level to make sure that we continue to have a state, local and national business climate where our businesses can be effective and competitive in the global marketplace.

PRESIDENT & CEO // GRAND RAPIDS AREA CHAMBER OF COMMERCE GRAND RAPIDS

The Grand Rapids Area Chamber of Commerce continues to seek out ways to address the persistent talent issues that local companies are facing. Rick Baker, president and CEO of the Grand Rapids Chamber, said the organization is advocating for ways to attract talent at the local and state levels, including by expanding programming in 2020.

What state issues are your top priority?

What are the Chamber’s biggest areas of focus for 2020?

What are you hearing from members around talent predictions for next year?

Over the last couple of years, we have been building up our capacity to deliver programming for our members that will really help them connect to one another, but also to help build their own capacity as a company. It’s things such as the entrepreneurial operating system and getting more companies using that kind of programming, which helps them operate even more efficiently, more effectively, and grow. We will continue to build upon those past successes that we’ve had and focus on programming that really helps our businesses grow. We are also looking at some talent programming because talent continues to be the number one challenge for businesses. We’ll be having a talent summit and talent series in 2020 to share some best practices and some opportunities for potentially trying some different strategies for recruitment and retention of employees and what’s working with others in the region.

I think talent’s going to continue to be a real big challenge for employers, though I think most economists are predicting a slight slowdown in early 2020. So that may take off some of the pressure, but not all of the pressure. It’s a very small slowdown and it’s not a long-term one, so I don’t think that’s going to take the pressure off of our ability to find talent for all of our positions that are open. There are more positions open than there are people out there to fill them. That actually has an impact on a company’s ability to grow because if they can’t build enough houses or produce enough widgets, it affects their ability to grow.

What other business challenges are you tracking? 2020 is a presidentia l election year, and this one I think is going to be particularly

We still have unanswered questions of the road funding. There’s a lot of us in different segments of the state saying we need to invest more in our infrastructure. We spend a lot of time on unfunded liabilities. We’ve got multiple layers of local government where their pensions and some of the liabilities and the promises they’re making to employees, the funding is not there to support it. We need to address that issue, be prepared before it gets any more challenging for us and it gets to be too big of a hole to dig out of.

What else? There’s just a whole cadre of different areas where we can think about making some policy changes at the state level that would help address some of our talent challenges. All the way from criminal justice reform to occupational licensing reform — some occupations don’t allow someone who’s served time in prison to get licensed, but … should it be a barrier? — and then even childcare. What can we do with childcare so that potentially removes what could be a barrier for someone going into a job because the cost of childcare or access to childcare is preventing

them from taking a job with one of our employers. There’s a lot of different things we are working on that all go back to talent.

The Chamber is also focusing on equity and inclusion. Why is that? We’re considered at the national levels kind of a leader in this area because we’ve been involved in it for so long. We are not only continuing that programming but expanding that programming in 2020 because more and more businesses are recognizing that our community is changing. It has been, and we need to embrace everyone that’s here and make sure that people have an opportunity to be successful and look at whatever barriers there might be for that success and start breaking those barriers down.

How will that play out in 2020? We have had for a number of years a Diversity, Equity, Inclusion summit. … We’re continuing that in 2020, but we’re adding a diversity, equity and inclusion series that will dive deeper. We have our Facing Racism program that we will continue to do. That program has been increasing in demand in our employer community, and so we’re delivering that more often than we ever have. And looking at what’s next is our Facing Racism 2.0, to continue to build the capacity of our people and our companies and understanding how to create a work environment that is attractive to a diverse workforce, because we know there’s a lot of research that shows that companies with diverse workforces have increased revenue. Having those lenses at your table, having that diverse thought at your table as your company makes decisions really puts your company at a competitive advantage. Interview conducted and condensed by Sydney Smith. Courtesy photo.

COMEDY FOR HUMANS!

(SANCTIONED BY ROBOTS)

place. So, if something’s happening here, I feel like there should be a reason it’s happening here instead of just some other cool room.” He elaborated, “For example, someone asked if they could rent out the theater for a rehearsal dinner and I said probably not, unless we did a roast of the bride and groom at the end. To which the person replied, ‘Oh! That sounds awesome!’”

WHY DOES GRAND RAPIDS NEED THE COMEDY PROJECT?

fter more than a decade touring the country with acclaimed comedy institutions like The Second City, Joe Anderson took a close look at what was going on in his hometown of Grand Rapids and realized there was a niche to be filled. He and fellow comedian and friend Ben Wilke did extensive demographic research and decided, just like with comedy, timing WAS everything and it was time for The Comedy Project. The two launched a Kickstarter campaign in late 2016, raised almost $30k and about two years later, produced their first shows during Laughfest 2019. In October 2019 the business received its Class C Liquor License and has scheduled January 31, 2020 for their official ribbon cutting.

WHAT IS THE COMEDY PROJECT?

The Comedy Project is an improv and sketch comedy theater, training center and bar. Their 5000 square foot venue is located on Leonard Street, across from Mitten Brewing Company, Long Road Distillery and right next to Two Scott’s BBQ, in the booming Westside business district. Building on a model used similarly around the world, The Comedy Project is focused on producing great improv and sketch comedy shows, training others in the art and craft of comedy and helping businesses exploit, in a good way, the values of improv. When asked what makes The Comedy Project unique as a venue, artistic director Joe Anderson responded, “We are first and foremost a comedy

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

Polls and lists are a dime a dozen but as many know, Grand Rapids was recently ranked as having the highest rate of depression among large U.S. metro cities. The Comedy Project feels it is poised to be more than just a place to see a funny show and grab a drink. “Make Friends As An Adult” was the tagline for one of their recent training center ad campaigns and Anderson says that idea relates to almost everything they’re doing at The Comedy Project. “I love standup comedy.” He said. “But there are some huge differences between standup and both improv and sketch comedy. Standup comedy is generally adversarial by nature while sketch, and in particular improv, is communal by nature.” He continued, “One of my favorite audience interactions was with a retiree after a show. To be honest, I wondered if they had enjoyed themselves. This audience member called me over to their table and said, ‘Ya know what? This was fun! This was really fun! I had no idea what I was getting myself into. I thought comedy was just someone talking at you but this was, well, this was fun!’” On the training center side of things, nearly 100 people have already signed up for improv, comedy writing or comedy performance classes since the first class offering in the Spring of 2019.

WHY DO BUSINESSES NEED THE COMEDY PROJECT?

Around the world, businesses have discovered the very tangible value of improv.

Improvisation has become synonymous with the “Yes, and…” way of thinking. This is the idea and behavior of accepting what another has stated and then expanding on that line of thinking. For those hesitant to dive in, Anderson had this to say, “People put so much pressure on themselves but the truth is, you don’t have to say something fast or funny. You just have to say the next thing you would say, based on what the other person just said or did. Improv forces you to be in the moment. This is precisely why improv training can help people be better listeners and observers.” Whether an organization is looking for an overtly fun “day away” to help increase employee retention and engagement or wants to find new ways to improve their presentation or brainstorming skills, The Comedy Project can tailor the workshop to their goals.

WHO IS THE COMEDY PROJECT?

Currently there are almost 20 cast members who perform in a variety of shows. The management team are all writers and performers as well but their official titles are: Stevie Sahutske, Technical Director Eirann Betka-Pope, Programming Manager Kristin Hirsch, Special Events Manager Amy Gascon, Training Center Director Ben Wilke, Marketing Director Joe Anderson, Artistic Director

www.thecomedyproject.com 616.369.7469

Visit www.mibiz.com

NATHAN BOCKS

What do you mean by that? We were looking at the idea of creating an ordinance that required continuous public access all the way along the waterfront in Holland, so that any developer that put in a project, whether it was going to be a hotel or a restaurant or retail establishment, would reserve an easement along the water that allowed for public access.

MAYOR // HOLLAND

After unseating the two-term incumbent in the November election, Holland Mayor Nathan Bocks got right to work after being sworn into office. Holland is in the midst of several large projects, including brainstorming the framework that will inform the development of its waterfront, increasing affordable housing in the region, considering an anti-discrimination ordinance and rewriting its zoning. All of these projects will move along in 2020, as Bocks and city officials also keep an eye on the economy. Looking to 2020, what are your biggest priorities?

What is the potential for development along the waterfront?

My priorities for 2020 are very similar to the three issues that we had in the campaign: housing, waterfront development, and looking at a nondiscrimination ordinance moving forward in the city. Those three things really tie together. We have the final report and update on the Waterfront Holland visioning process, so now we have a template for us when we’re looking at projects and ideas that are coming with waterfront development in Holland. In my mind, it’s not only just about developing the waterfront, but it’s making sure that we’ve got good public access, and that when we’re looking at projects that include housing, that we’re looking at making sure we’ve got an opportunity, as much as possible, to create housing at all price points.

A lot of people are focused on the James DeYoung plant, but that’s really just one piece of the overall waterfront development. The Waterfront Holland project runs all the way from Collin Park … over to Windmill Island. (The city is) looking at all of that waterfront and then the space around it and saying, ‘how do we make sure that in the decades to come, we’re creating a plan and putting forward projects and encouraging projects that create a unified waterfront?’ Through the planning process, and frankly because the city does own some of the parcels along the waterfront, the city has the ability to be able to influence the type of development that takes place there and say, ‘does it fit, does it not fit,’ and is able to put ordinances and policies in place to help encourage that kind of development.

Matt Resch OWNER AND PRESIDENT RESCH STRATEGIES LLC // LANSING

Gov. Gretchen Whitmer took office in January 2019 after a winning campaign in which she promised to fix the roads. Her proposal toward that goal, a 45-cent increase in state fuel taxes, proved about as popular as a mammoth pothole that rattles your teeth each day during the morning drive to the office. Finding a road solution that the Democratic governor and Republican-controlled state Legislature can agree on remains a priority in Lansing in 2020, said Matt Resch of public relations and public affairs firm Resch Strategies LLC. The new year will also see whether Gov. Whitmer and Republicans can move beyond their fierce battle over the state budget.

As we head toward 2020, what’s the general mood in Lansing these days?

Will the fallout from the fight over the budget linger into next year?

I think the mood is uncertain. A lot of people are just kind of shaken from how the budget process played out this fall. It was unprecedented, really, in the way the budget was passed, and then the vetoes came about and then it was resolved. I think people are really wondering now what the new normal is and what this is going to mean for next year’s budget process.

I honestly don’t think so. I think that it will probably be better and that the level of animosity was probably overblown. It probably wasn’t as bad as it may have seemed, at least personally between the leaders. They hopefully have taken the year to get to know each other better, have learned some lessons of how they work together, and that will pay off next year in a more orderly process.

Visit www.mibiz.com

What will get done on the waterfront in 2020? I think we’re going to be making some small steps over the course of the next year to put foundations in place to make sure that we’ve got the ordinances and the policies that we need to be able to encourage the types of ideas that the community gave us in terms of what they want with waterfront development.

How will Holland’s work on affordable housing continue in 2020? We’ve been looking at ways that the city can not only help developers through that process, but then the other thing that we’re looking at doing in the city is trying to create areas that increase density gently. The city’s starting to be very proactive in looking at its zoning ordinance and saying ‘how can we meet these desires and these needs in some of our neighborhoods, and do it in a way that does not negatively impact the current property owners?’ I would anticipate that over the course of the next year the Planning Commission is going to move forward with a recommendation on a Unified Development Ordinance and present that to council.

How might those potential housing policies affect the city? It has the potential of impacting the city pretty dramatically, not only in terms of what kind of change it might make in a particular neighborhood, but also, realistically, how these rules will be and can be used down the line.

The other issue you mentioned is an antidiscrimination ordinance. Why is that a priority? Eleven years ago, there was a proposal made to city council to add to the city’s current

What’s on the top of the agenda in Lansing for 2020? The big unanswered question is still the roads. It was the governor’s top priority. I don’t know if it was the top priority (in the state Legislature), but it was near the top, and they both are starting 2020 having not gotten anything done on that. I have to think that continues to be at least the governor’s priority and that will be a big topic of conversation.

There’s talk in Lansing about considering toll roads. How do you think that idea’s going to go over?

No concept of revenue enhancement goes over well in Michigan, so I can’t fathom it’s going to be terribly popular. At the same time, I don’t blame the legislature for looking at that alternative. They need more investment in the roads, and clearly the gas tax is not a way to go, at least right now. I think that they are right to look at those kinds of things to see if there are some innovative approaches that might work.

How will outlooks for slower U.S. economic growth next year affect the agenda in Lansing?

It really should affect their thinking. They need to be aware of the fact that a national recession affects

anti-discrimination ordinance protection for the LGBTQ community in the areas of both housing and employment. There was a vote, and it was voted down five-four. For the last eight years, there’s been a discussion about it. The makeup of the council has changed in a way that it is very likely that if a similar ordinance with similar language came back before the council, that it would likely pass at this point.

What other issues are you keeping an eye on in 2020? The economy is definitely something that we’re keeping a close eye on. We have been in that period of growth for quite a long time and we would be foolish to think that that would continue forever. So then the question is, how do we make sure that we, as a city, are in the best financial position that we can be in, knowing full well that there’s likely to be an economic downturn that comes at some point in the future? City staff have already been making plans for that and saying ‘let’s make sure that we are as lean as we can be and as it makes sense to be, and that we are making sure that if and when this happens — and it’s likely a ‘when,’ not an ‘if’ — that we can be as prepared as possible for it.’

What are you looking forward to taking on in 2020? I’ve been mayor for all of 28 days. So I think I’ve got a handle on most of what’s going on and what’s coming down the line. It has been a whirlwind month getting up to speed. The council itself has been phenomenal. We’ve got nine great people sitting around the table. It’s a great combination of sage wisdom sitting at the table, we’ve got some people who’ve been around for a little while with some newer ideas, and we’ve got three brand new folks. That’s been working really well. We’ve got a stellar city staff as well. I was lucky enough to know a lot of the city staff before I took on the job as mayor, but I have now had the pleasure of working with them very closely over the course of the last month. We could not have better people doing the job for the people of Holland. Interview conducted and condensed by Sydney Smith. Courtesy photo.

Michigan so much more dramatically than other places and that putting money away into a rainy day fund and making those kinds of fiscally sound decisions is going to be really important to put Michigan in a spot to weather a recession when it inevitably comes.

2020 is an election year for the state Legislature. What do the Republicans need to do to hold power and what do the Democrats need to do to pick up seats or gain control of the state House or Senate?

Republicans need to minimize the drama and any kind of level of, or interpretation of, dysfunction in Lansing as possible. Run as tight of ship as they can and get things done effectively. Democrats need to hope that the president keeps being the president.

What do you want to hear the presidential candidates talk about?

I would like to hear them talk about just how they’re going to get Washington functional again. A lot of the work I do deals with federal and state policy, and people just view Washington right now as a complete wasteland of trying to get anything done. There are a lot of big topics

the candidates of course will always focus on, but I think the basic functionality of our federal government and our political process needs to be on top of those things they need to talk about because the biggest ideas they have are not going to go anywhere in the current atmosphere in Washington, regardless of the party.

What would surprise you in 2020 that we will be talking about a year from now?

I would be very surprised if we were talking about a second term for President Trump. I think that he has put himself in a pretty tough spot and would be surprised if that is going to happen. For that to happen, it would require the Democratic Party to nominate the strongest possible candidate, and they have not been great at doing that, either.

What’s one prediction sure to go wrong?

That the legislative race for the state House is going to be really tight. That could go wrong. I think that House Republicans will actually do fine, but most people would predict that with the presidential race, they’re going to have a tough year. Interview conducted and condensed by Mark Sanchez. Courtesy photo.

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

ECONOMIC DEVELOPMENT

Dave Alexander

BUSINESS DEVELOPMENT MANAGER, CITY OF MUSKEGON MUSKEGON

Dave Alexander was appointed business development manager for the City of Muskegon in July. Alexander was formerly the executive director of Downtown Muskegon Now, which recently disbanded. His new role includes acting as the Downtown Development Authority’s staff liaison, overseeing the Brownfield Redevelopment Authority, and supporting commercial retail development throughout the city. What’s the economic outlook for next year for the Muskegon region? Employment remains strong. If there is a downturn in 2020 or 2021, or when the next downturn comes, we are in a much better position than we were in 2007 in terms of the strength of our economy, the robust nature of our employment market and the employment situation, the amount of private sector development and investment. I think that we are in a good position to move through the next one and come out pretty strong on the other side.

is the old Matson Oldsmobile property. It’s … going to be subject to some state and city assistance with the owner to come up with a pre-development document that will request developers to put proposals in, and we will have a Michigan Economic Development Corporation developer showcase sometime probably early summer to show that off. Number two is the Hackley Administration Building. The administration building is owned and used and operated by the Muskegon Public Schools. They are into teaching students, not preserving historic structures. They do not need that much space. They will be vacating that in July. … We’re just looking for the right public/private partnership to coalesce around it.

What else do you plan to work on next year? We need to continue to develop our downtown as it relates to the Imagine Muskegon Lake plan in 2020 and take a look at the linkages as we go west from downtown to the beach at Pere Marquette Park. I also want to really put a focus, as we have in both Downtown Muskegon Now’s former strategic plan and in the DDA’s strategic plan, to look at diversity, equity and inclusion. We are a diverse community. We need to have a downtown that represents all and reflects all.

What are your expectations for new development in the city for 2020? Small business development will be on the retail side, and we need to find retail development that has spaces that are affordable, so that you can move from the chalets of the Western Market — the pop-up shops — into bricks and mortar and have it be affordable. … There are obviously many blocks around Western where we’re looking to incubate the next step from the Century Club Center, which is a gathering of about 10 retailers in one space in a mall situation where there’s a central checkout, to an actual brick-andmortar location.

We have one going on right now with the convention center. The second phase of the Lakeview Lofts … is The Leonard, and then at the end of Second Street at Morris, the construction of a Microtel hotel by Wyndham. All three of those, we hope to have under construction by the spring.

With the convention center underway, how do you envision that will transform the downtown? We hope to have it done by the first quarter of 2021, so 2020 will be a year that we will be having Parkland Development, the owners of the new Delta by Marriott, our former Holiday Inn, getting in position to manage that. Also, they are working with the convention and visitors bureau on marketing and sales. Then the city, through its planning and economic development functions, is looking at spin-off development and the future of parking. We need to be prepared and ready this time next year to launch a successful convention center.

What policy changes would you like to see happen that would have a direct benefit for redevelopment in Muskegon? The main one that we are working on right now … is the reinstatement of the historic tax credit. There is a proposal to give tax credits to building owners who are in a historic district, of which we have many, including in our downtown. The Hackley Administrative Building could be very much advantageously supported into the future as it gets redeveloped.

How do you feel about Muskegon’s progress and development in the last decade and where the city is headed?

What are some of the key projects the DDA plans to focus on in 2020?

Unless there’s a major, deep recession, I see the current momentum carrying through any shallow recession or any stall in the economy. There is pent-up demand. There is pent-up interest. We are an Opportunity Zone. We are getting Opportunity Zone investors taking a look at us.

We are in a long-term, historical transformation of our community that we’re seeing most visibly in the downtown, but it is throughout Muskegon County. The long-term future in our city from downtown to the beach is taking shape very nicely. In the next five, 10, 15, 20 years, hopefully we will look back to this time to see that yes, there were some tipping points back in these years that we are living through right now. We would hope that 2020 adds to that momentum in significant ways going forward.

We just completed a $900,000 streetscape project in the heart of Third Street, which we dubbed Midtown. There’s a huge piece of property on the east side of Third Street down in that district that

Have those looks from Opportunity Zone investors translated into projects?

Interview conducted and condensed by Marla Miller. Courtesy photo.

How could any market downturn affect that activity?

PHIL GARDNER

It’s really the strength of small employers that we often overlook and they seem to remain enthusiastic about growth and the opportunities.

DIRECTOR MICHIGAN STATE UNIVERSITY COLLEGIATE EMPLOYMENT RESEARCH INSTITUTE EAST LANSING

Despite outlooks for slower economic growth, college graduates can expect a “fairly strong” job market when they go looking for work next year after earning their degrees. In its annual recruiting trends report, Michigan State University’s Collegiate Employment Research Institute surveyed more than 2,800 U.S. employers in all 50 states and across all sectors and projects job opportunities will grow 12 percent across all degrees. Employers plan to hire more graduates with associate or bachelor’s degrees, and reduce hiring for students coming out of college with a master’s degree, said Phil Gardner, director of the Collegiate Employment Research Institute. What did employers tell you about their hiring plans for 2020? What we’re really seeing and what we anticipate is we’re going to continue to see a fairly strong college labor market. We’re in our 10th year of that now and that’s kind of unusual for a labor market to continue without some dips along the way, but this one has been very good and it’s out a little bit ahead of a national labor market. It was much stronger than we anticipated given some of the clouds around the economy, so we’re grateful. It

looks like from every way we’ve looked at the data that it’s going to stand up through the spring. We don’t see anything right now that’s going to be a repeat of 2008 or 2000 when things looked good going in and then just collapsed.

How does the Midwest compare with the rest of the nation? Things look really good … and promising … for our region, which is made up mostly of Michigan, but includes Indiana and Illinois.

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

How are some of the things going on in the economy affecting hiring plans for 2020? It’s hard to tell. We asked questions about the global economy and tariffs, and in those two cases, about one in five of them (regionally) reported they had to make adjustments in their hiring outlooks because of what’s going on. That’s very close to what the national numbers say. One in five employers are being indirectly impacted by tariffs and the global economy. The thing that’s really influencing employers is turnover. As the economy remains strong and the opportunities have increased, employers have faced employees finding better opportunities down the street or at a different company. Employers are dealing with turnover and we’re continuing to grow at a pace that they still need to hire.

What surprised you in this year’s results? That we didn’t have a stronger reaction from employers about economic concerns that were coming in. While we continue to get reports from groups like the Institute for Supply Management, the National Association of Business Economics and some more recent ones, employers were more confident about hiring than I thought. That was a big surprise. We’ve had nine years of big growth, the last four or five of them have been in double-digits

and last year it dipped down a bit, which I thought was more sustainable. There’s a little more confidence out there than I anticipated.

Employers are confident for now, but what’s something they’re doing in response to outlooks for slower economic growth next year? They’re going after degrees that cost less. Instead of needing master’s or MBAs in business, they’re getting BAs. Instead of BAs in computer science or I.T., they’re going to a community college or a two-year school for a computer science graduate or I.T. type. We see some of that going on. They’re being cautious but they’re still hiring and have reshuffled their opportunities in a way that favors associate and bachelor’s degrees over master’s degrees.

What would you like to hear the candidates talk about during the 2020 presidential campaign? Education. Because we have to find ways to continue to have the workforce understand they have to continually be able to elevate themselves in skills and abilities or they’re not going to keep up with the labor market. Education and training development become a really key question in how we do that. Another is how are we going to respond to A.I. (artificial intelligence) and cognitive systems technology? It’s going to be very disruptive and I don’t think most politicians understand that. By the time they do, it’s going to be too late. Interview conducted and condensed by Mark Sanchez. Courtesy photo.

Visit www.mibiz.com

NONPROFIT ORGANIZATIONS

Kirk Hallman EXECUTIVE DIRECTOR MUSKEGON MUSEUM OF ART

Like many cultural arts nonprofits, the Muskegon Museum of Art has been experimenting with ways to engage new audience members, especially younger people. For instance, that’s led to the museum holding events focused on craft beer or a particular type of imagery popular with that demographic, said Executive Director Kirk Hallman. However, those events are just the tip of the iceberg in reaching and getting donations from the next generation of donors.

What does 2020 look like for the nonprofit sector? As long as the economy stays steady, I don’t really see anything that might have a major impact, unless we have a big downturn in the economy. But, even a mild recession doesn’t affect our sector too much because we have worked to build strong relationships. I think we’re going to be steady on. … The nice thing we have going for us is that we’re really diversified with support from individuals and the corporate community. We’re not beholden to just banks or corporate sponsors. There’s always someone to step in and underwrite and get gifts from. Over the decades the Muskegon Museum of Art has been a really responsible institution that takes a look ahead. Just like an investment portfolio, you have to spread it out wide and spread out the risk. It’s all about what you’re doing for the community and what you’re bringing to the region at the cultural and educational level.

How will the 2020 presidential election affect nonprofits? The election itself doesn’t; it’s the tax laws. The itemization did hit some organizations harder than most. Because of the threshold change, some people are waiting for two to three years to give a bigger gift. … I think it will be more about whatever administration gets in and what changes, if any, they make to tax laws. I was bracing for bigger impact when the tax laws changed.

Is there any legislation you’d like to see enacted to benefit the nonprofit sector? We don’t get a lot financially from the Michigan Council for Arts and Cultural Affairs or the

KEITH HOPKINS

National Endowment for the Arts. We do get some and it represents a small amount of our budget. Knowing the state Legislature supports them is good for the climate in the nonprofit sector. It’s always great to see a trend where you’re getting a little more in allocations. Those statewide allocations are huge for some organizations, but they’re not a big part of our budget. We get about 1 or 2 percent. We are pretty heavy on donations. We have a $1.5 million budget and we have to ask for donations from individuals and organizations for about $700,000 of that. About 50 percent of our budget is donations.

How do you ensure Muskegon Museum of Art remains reactive to donors’ needs? We have a diversified donor base and we’re usually trying to match their interests with something they’re funding, whether it be funding for school buses to bring students here or a certain exhibition that a company might have something to do with material-wise. We can make a really easy case for the amount of people we engage here and the minds we can change in the community. When you convince someone and they’re all in for what you’re doing, it’s easier to bring other people in. You can have a real measurable impact for them such as how much their logo gets pushed out.

What are some major changes that you see continuing to happen in 2020? The things that shift for us is our basic audience. Society changes. Thirty or 40 years ago, people came in and they’re not coming in now and you worry about a graying donor base. We are working on ways to engage 20- and 30-year-olds because in the future, they will become our next generation of donors. We’re looking at how we engage that next generation of donors and how we get them involved. We also are focusing on donors who have fallen by the wayside. We’re always pushing these little rocks up the hill all the time.

What takeaways should our readers have for 2020? Keep patronizing cultural institutions, especially if you’ve been on the fence about it. Open yourself up to what an organization does for your community. Give it a try and start asking questions. … There’s not a better return on investment because we have our fingers in everything, including programs for our guests with Alzheimer’s and school children with buses bringing them in on a regular basis. People don’t realize how far we are into the fabric of society. The majority of our guests are from Muskegon, but we get quite a few from Ottawa and Kent County. We really are a regional art museum. We’re always thinking about how we can stay relevant, especially since we have such a great urban community. Interview conducted and condensed by Jane Simons. Courtesy photo.

PRESIDENT \\ HOPKINS FUNDRAISING CONSULTING LLC ADA

Despite all the distraction and noise around the 2020 election, veteran fundraiser Keith Hopkins does not think the cycle will have any effect on giving. Even so, he’s monitoring what’s going on in the economy and how the massive transfer of wealth could change what West Michigan nonprofits will need to do to attract the next generation of donors.

What’s on your mind as you look ahead to 2020? The November jobs report exceeded expectations. The unemployment rate is the lowest it’s been since 1969 and the Dow is up 20 percent. I’m not going to say that we’re going to have a recession in an election year, but I think 2021 may be a different story. I’m anticipating a pretty strong 2020 based on what we’ve seen this year. … Locally, even if things are going poorly nationally, West Michigan tends to be much more resilient because we’re more diversified.

How are nonprofits positioned heading into the new year? 2019 was very strong. Organizations like Wedgwood Christian Services and D.A. Blodgett, which had major fundraising campaigns, exceeded their goals. Grand Rapids Community College raised over $15 million and the Grand Rapids Boy Scout service center raised over $6 million. Given that, all of the economic indicators seem to be pretty strong.

What’s the climate for nonprofit fundraising? Because we had a change in the tax law in 2018, we’re seeing more bundling where accountants are telling their clients that, because they’re not itemizing deductions anymore, they may want to think about bundling their contributions. As an example, if my plan is to give $10 million to my alma mater in 2019 and another $10 million in 2020, my accountant may say, ‘Why don’t you give more in 2019?’ This is happening particularly with mid to upper-income earners.

What gives you hope about 2020 and beyond? I really feel like we’re entering into the Golden Age of philanthropy with 10,000 Baby Boomers retiring every day now. Over the next 20 years, all of those retirees are going to be slowly dying off. That will create a giant transfer of wealth with $6 trillion to $9 trillion going from one generation to the next.

What challenges come with that next generation that’s receiving that wealth? The younger Millennial generation … are not joining civic groups like their parents and grandparents did, and I think it’s because they’re busy. I wonder about how the younger generation is going to lead the charitable sector. Strategies will have to change. Getting their time might be more

“We give to make an impact, no matter how small, and to better the community around us.” - Audrey Mitchell

challenging than getting their attention. But I’m seeing people doing good at a younger age. When kids buy products now, they want to know how socially responsible that company is. The younger generation is much more attuned to that.

What legislation would you like to see enacted to benefit the nonprofit sector? There’s been a big discussion around endowments. Harvard University has a $40 billion endowment, most of the Ivy League schools have endowments up in the $10 billion range. Harvard could never charge another student for tuition by using just that endowment to pay tuition for every student. The $1.6 billion in earnings from that endowment would pay for a helluva lot of tuition. Why is Harvard sitting on this when we have so many students in debt? Colleges with a really healthy endowment should spend more money to keep the debt limit low. If kids have got that kind of debt, they’re not creating economic wealth. Colleges or any organizations with really healthy endowments ought to put that money to better use. Hope College, my alma mater, just got a new president and to his credit, he wants to turn Hope into a tuition-free college. I think it’s the writing on the wall. If we don’t do it, the government will.

What other policies do you think might pop up? Most community foundations have donor-advised funds. Every year, I give to a fund. I could take the deduction and keep taking deductions while building that fund to the community foundation. The government should say that they require you to spend 5-10 percent of that fund each year, and that’s a potential law that could pass. A donor-advised fund is an endowment that addresses a particular issue, so rather than having the money just sitting there, why not use some of it now to make a difference. I was driving through downtown Kalamazoo the other day and I saw homeless people outside in 20-degree weather. Could we find ways to use the money now and care for them now?

What keeps you up at night? Fundraising keeps you up at night because it’s fundraising. One thing I always wonder about is the economy. Although it doesn’t prevent people from giving, it sometimes takes longer to get to that goal. Interview conducted and condensed by Jane Simons. Courtesy photo.

Meet our One Hundred New Philanthropists You don’t need a million dollars to be a philanthropist; you just need heart and an organization to help you move forward. Learn more by contacting Jenine Torres at 616.454.1751 or jtorres@grfoundation.org. Bryant and Audrey Mitchell, members of 100 New Philanthropists

Visit www.mibiz.com

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

NONPROFIT ORGANIZATIONS

Chris Sargent

PRESIDENT AND CEO, UNITED WAY OF THE BATTLE CREEK AND KALAMAZOO REGION BATTLE CREEK

United Ways around the country continue to focus on the population of people who are Asset Limited, Income Constrained, Employed (ALICE), or another measure for the working poor. United Way of the Battle Creek and Kalamazoo Region President and CEO Chris Sargent said about 40 percent of people in the region live paycheck to paycheck, which has many ripple effects in the community.

What’s on your mind as you look ahead to next year? The trends we’ve been experiencing in the nonprofit sector in the last few years is that overall giving to many local nonprofits is down. But, there’s also a lot of good causes out there, and a lot of opportunities to give to good causes. New nonprofits and new ways for people to give sometimes create limitations for how donors are giving.

How could the 2020 presidential election affect the nonprofit sector? With an election year, there are definitely lots of ‘asks’ and invitations to give. We know there are limited resources for people to give with discretionary income. United Ways, the nonprofit sector and our partners work with people from all political affiliations. We’re bigger than one particular issue. We’re really focused on every individual who’s interested in helping to support their community.

Does the political climate filter into the nonprofit industry? One thing we have seen in the political environment that plays out from a national perspective is the continuation of the creation of division

across the country, which has the potential to impact what is happening at the state and local level. There’s this thinking that, ‘I’m going to do what’s best for me first and I might think of someone else in the community second.’

What does that mean for nonprofits and people locally? The division we are seeing across the country creates a division locally about how we tackle complex social issues and take care of our friends and neighbors who are vulnerable. ALICE populations are the largest in our communities. If we continue to see this gap and it continues to increase, there may come a time when we won’t be able to support nonprofits that fill those gaps. I worry about the divisions in the country, the economy and more people with less resources to make ends meet on a monthly basis.

Given your work around the ALICE population, where do you advocate for more change? We continue to advocate for SNAP benefits because we know that some of the cuts to SNAP benefits are going to continue to jeopardize vulnerable families. More than 70 percent of the

resources in the community for food and to address food insecurity issues comes from the government’s support of the SNAP program. If you look at basic need resources like food and emergency shelter, we advocate in key pieces of legislation related to work requirements implemented as part of expanded Medicare benefits. We don’t want the most vulnerable in our community to lose benefits because of unintended conversations about the requirements they must meet to maintain those benefits. Let’s not do anything that prevents vulnerable families and children from getting access to basic needs.

What type of legislation would you like to see enacted to help the nonprofit sector? The most recent conversations we’ve had with legislators is around the charitable tax deductions and the implications of that. It’s hard to measure and understand at an organizational level the impact of that. Millions of dollars will not be coming philanthropically. Universally, legislators are aware of that implication. They all share in the knowledge that this will reduce the amount of philanthropic giving. Nonprofit networks like United Way were having a lot of conversations with legislators to prevent that, to no avail.

What will be among your continued focuses in 2020? Generally speaking, most of our elected officials know how important the nonprofit sector is. It represents 10 percent of the labor force and provides a lot of support to constituents. There’s always opportunities with numerous issues to have productive conversations on multiple sides of the aisle and a lot of people we work with at the state and local level are people we’ve known for a long time. They know when we come and talk to them that we’re representing United Way or other nonprofits and we’re coming to them from a place of impact of what’s happening with the constituents we’re representing. The challenge is

where the resources are going to come from to support the programs needed. We are nonpartisan and we talk about issues that are important to people in our community. We talk about it from an issue perspective and helping people understand about intended and unintended consequences.

Talk about some of the headwinds for the nonprofit sector next year. The nonprofit sector goes as the economy goes. If a recession happens and the economy slows, business slows and philanthropy slows. The ability for nonprofits to generate and leverage private resources that are not enough to counter cuts at the state and federal level continues to be a concern for us. We’ve heard talk about the importance of living wages with benefits. The ALICE Report shows how much an individual needs to make to support basic needs in a household. It’s the private sector that has to fund the different needs we see. We spend a lot of time with organizations and companies asking, ‘What does it look like to compensate workers with living wages and benefits?’

On the flip side, what opportunities do you see ahead for 2020? This region is one of the most generous philanthropically. We have a history of being extremely generous and supportive of our friends and neighbors. I know there have been many cases where there have been challenges and we have always had generous individuals, organizations and companies and businesses that have stepped up and that won’t change. We have some of the most talented and passionate people leading our nonprofits. We are fortunate to have the skills of great leaders who are helping people who need support and lifting them up. Interview conducted and condensed by Jane Simons. Courtesy photo.

SOUTH CHRISTIAN HIGH SCHOOL’S 21ST CENTURY LEGACY

oving buildings after over six decades presented a variety of challenges and opportunities for South Christian High School. First, and foremost, the school’s leadership wanted to create a space that would help it meet its mission for the next 100 years. Practically speaking, that meant developing an educational setting where students and teachers could leverage technology and learn, but also gather, worship and build community. To achieve that successfully, building South Christian High School took people with open minds who listened well and worked together. This project was based on planning, value engineering and field design. Located at 7979 Kalamazoo Ave. SE, Byron Center, MI 49315, the new South Christian High School accommodates 700 students and 56 classrooms, a 1,100-seat auditorium with balcony, STEM facilities, a full kitchen, home economics, wood and metal shops as well as creative and industrial art spaces. Designed by AMDG Architects and built by Dan Vos Construction Company, the high school also

includes performance and learning gyms, an indoor baseball diamond for physical education classes and an outdoor amphitheater. A wide variety of community spaces help bring students together with flexible furniture and common areas for viewing projects, and classrooms with glass doors and walls. The construction of South Christian High School involved over 66 different trade contractors, including 12 concrete contractors, 3 concrete suppliers, 3 electrical contractors, 5 site work contractors, 2 LPDA contractors, multiple painters, 4 HVAC and controls contractors, and multiple subcontractors who had ties. In total, more than 40 tradespeople who worked on this project are graduates of South Christian School and at least 10% of the workforce for this project was involved in the school in some capacity or have kids in the school. Even high school students worked at the school as their summer job or participated in design focus groups. Our team worked with the architect and the client to research and implement value engineering, providing cost savings for the school. For example, having re-evaluated the plans, everyone agreed that a larger shop space would offer more to students. Having had shop experience themselves, our team saw a great opportunity in creating a metal shop for the up-and-coming generation skilled tradesmen. The enrollment in all shop classes continued to grow during construction. Subsequently, by working with teachers and instructors a metal and machining

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

shop was added adjacent to the woodshop. Adding the machine shop was challenging, as its construction was happening within a few months of the school being opened. Although, this change did not cost extra due to in-kind gifts and utilizing existing space. Our team as well as the school knew that this was the best way to create space that flowed well and provided additional capability for young people to gain exposure to tool and die practices. The South Christian High School project is unique because it was a community effort that was in the making since 2001. Extensive collaboration between AMDG Architects and the school’s constituents helped define and incorporate the key design objectives early and throughout the process. Thanks to the community effort, this school offers more than college prep, but central skills for life and knowledge of skilled trades. We worked to check all the boxes that make up a good school and then we looked even further to create a place of learning that can be flexible and unique for the next generations. The school and trade contractors looked at this as not just an opportunity to build a building but also to build a place for the community, where many of the people building it were community members themselves. Most in the community will attend a

basketball game, their kids and neighbors will visit the school, the outdoor amphitheater, or the auditorium that can hold a small chapel or a full-scale musical with flying Mary Poppins. The involvement of multiple subcontractors in various categories required intensive planning, thought and discussions. Everyone was invested and wanted to be part of this project. Through communication, collaboration methods, and the implementation of value-add opportunities came in under budget by over 10% on the project. Our team worked to maximize these connections and figure out what sections of the school everyone’s talents would be best suited for. Through communication and collaboration, the valueadd opportunities were successfully implemented and the project came in within budget. The South Christian High School project embodies what we do as a company – “Building for Life.” This building is special because it was built on a 60+ year old legacy. It was built to preserve the culture of the school, yet it was not built on a basic formula. This project was a way to create a place for the future through the hands of the current generation. Visit www.mibiz.com

FOOD BIZ OUTLOOK

Embattled ag industry hopes trade stabilizes in 2020 By JESSICA YOUNG | MiBiz jyoung@mibiz.com

ews that the United States-Mexico-Canada Agreement appears to be headed toward ratification comes as a positive for farmers across the country and especially in Michigan. Canada and Mexico remain influential purchasers of Michigan goods and are a top export market for the state’s dairy, pork, dry beans, fruits and vegetables. The new USMCA agreement — which remains much the same as NAFTA — will again allow for the cross-border flow of goods without the threat of tariffs. “When the economics dictate it, our farmers have proven time and time again that they can compete with anyone in the world if the playing field is level,” said Ernie Birchmeier, manager of commodity, farm and industry relations at the Birchmeier Michigan Farm Bureau. “Trade is critical to agriculture,” Birchmeier said, noting that the struggling farm economy will not improve without a significant thawing of international relationships. “Ninety-five percent of the world’s population lives outside of the United States, and we need to have the ability to market to those consumers.” In addition to past uncertainty with conWeber tinental trading partners, the farm economy has been hit hard by U.S. government’s temperamental trade war with China that began in July 2018. The tit-for-tat in the following months eventually raised tariffs on U.S. soybean exports to China as high as 33 percent and pork tariffs as high as 72 percent. “China has a billion more people than we do in the United States,” Birchmeier said. “They’re dealing with a disease outbreak right now in their swine population that has wiped out about half of their swine population. That is a huge opportunity for American pork producers to move product.” Without a substantive U.S.-China trade deal, the U.S.

agricultural economy will continue to struggle with trade uncertainty in 2020, according to Colorado-based agricultural lender CoBank. Additionally, questions continue to linger as to whether the USDA will soften the blow of the trade war through government payments to farmers. Even if an agreement with China is settled immediately in 2020, the effect of the tariff strife will continue to last for a number of years because the state’s former trading partners have already reorganized themselves, according to Steve Weber, director at consulting firm O’Keefe LLC. “Anytime that we would get a trade war concluded with China, “We’re seeing a lot of financing being provided not necessarily by a there would most likely be an immediate uptick in agricultural traditional bank, but by John Deere finance or Navistar International exports to China, but it’s going to take some time for normalized Harvester,” he said. “Their financial portfolios are growing.” trade to resume,” Weber told MiBiz. “Perhaps they got new supFarmers and ranchers also increasingly are choosing to outpliers, they signed contracts and perhaps those contracts might source activities such as fertilization and herbicide application be multi-year in length. It just might take a while for them to work rather than owning the equipment themselves. those through.” “They’re just making other choices,” Weber said. “They’re As opportunities for global trade for U.S. farmers shrunk, other going to make whatever choices they can to reduce their costs producers filled in the gaps. Now, Michigan’s and increase their bottom line.” agricultural industry is facing much more com- “Anytime that we As well, an increasing number of petition from producers in eastern Europe, GreenStone Farm Credit Services’ clients would get a trade India, South America, and even China itself, have filed for extensions on payments that which has started to grow more domestiare due next year, according to Paul Anderson, war concluded with cally. In particular, increased world grain supthe firm’s executive vice president and chief China, there would plies will keep downward pressure on prices, credit officer. most likely be an according to Weber. The East Lansing-based GreenStone holds “Back in the ’70s and ’90s, the United States about 70 percent of the market share of farmimmediate uptick in and Canada were the bread baskets for a big porers who borrow money in the state. agricultural exports tion of the world,” he said. “There are a lot more “They still have crops out in the field, so to China, but it’s suppliers out there for producers to go to today.” they’re not going to make that January 1st payThe financial challenges caused by the ment,” Anderson said. going to take some trade war will change Michigan farmers’ purWhere appropriate, the lender is extending time for normalized chasing patterns in the coming year, forcing January due dates into next spring. trade to resume.” operations to become even leaner. Besides “All in all, it’s not as bad as we thought,” land costs, maintenance and cost recovery Anderson said. “Sixty or 90 days from now, it’ll for machinery is the most significant expense — STEVE WEBER be interesting to see how this prognostication for farms and many operations are no longer pans out. It’s sometimes hard to tell because Director at O’Keefe LLC purchasing new equipment, opting instead for people don’t always ask for help until they leasing arrangements, according to Weber. really, absolutely need it.”

We go beyond taxes... We’re your core business network. Let our business advisors assist you with: • • • •

Business Valuations Tax Planning & Preparation Succession Planning Controller & CFO Services

• Business Consulting • Retirement Planning • IT Consulting & more!

hscompanies.com • 616.453.8551 4575 Lake Michigan Drive NW Grand Rapids, MI 49534

See what being an H&S client is all about. Visit www.mibiz.com

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

FOOD BIZ

PAUL VANDER HEIDE CO-FOUNDER // VANDER MILL LLC GRAND RAPIDS

Alcoholic beverage producers that want to market their products beyond their home markets are facing many tough realities as competition continues to ratchet up and as consumers’ preferences shift in often unexpected ways (see: hard seltzer). For its part, regional cider maker Vander Mill LLC continues to expand its markets geographically as it makes sense and with the right wholesale partners, said co-founder Paul Vander Heide. To start the new year, the company is focused on commissioning a new large-scale apple press with the aim of improving product quality and margin. How would you assess the craft beverage market as you look out to 2020? For us, 2019 has been a year of positive growth in some areas and negative growth in others. A lot of that is market dependent. We’re distributing to nine states right now and some of those are new, and that has led to an increase in some volume. But our existing market in Chicago has been very competitive lately. 2019 definitely reared its head for us in that market. Overall, we feel we know what we need to do moving forward to try to combat what is a very busy marketplace for craft beverage in general.

How is Vander Mill approaching geographic expansion? We’ve always sought opportunity when we have the right distribution partner. That relationship is so very important to the success of the brand in the marketplace. We continue to keep our ear to the ground and respond to folks when there is a level of interest to make sure we pick the right partner. That being said, our two newest markets, North and South Dakota, were somewhat of a logistics fix for us. We ship to Minnesota and we’re now with the

same wholesaler in Minnesota and North and South Dakota, which allows us to achieve full truckload orders out to that area of the country, which improves everybody’s efficiency by saving on freight. It’s an example of how we’re looking at the pipeline and trying to make sure that we’re both finding the right partners and keeping things efficient.

We’re going to be pressing on the regular, and it’s always been a part of our businesses to let the consumer in as much as possible to see what we’re doing. Cider, the way we make it, is a very honest product. It’s local apples getting squeezed into juice and fermented. We’re excited to have that ‘from apple to glass’ experience here in Grand Rapids now.

Are you planning any major capex next year?

What does the recent explosion of hard seltzers tell you about the alcoholic beverage industry?

For a number of years, we turned to some other processors here in Michigan to press apples for us, mostly because the equipment that we have out at our Spring Lake location just isn’t sufficient enough to keep up with our needs for hard cider. We’re still in the process of commissioning our new press, but we’re excited about that and to be back in control of the raw material. We believe our quality will continue to improve and it will hopefully stand to give us a bit more margin on our products as well.

At least in my experience thus far in this industry, there’s always a great deal of noise in the market, whether it’s alcoholic root beer or other sodas. Now obviously seltzers are the biggest example of noise in the marketplace. It’s definitely disruptive to everybody: craft beer and cider, big domestic cider, and wine and spirits. Everybody gets impacted one way or another when something this big comes rolling through the industry.

Does pressing all your own apples offer any ancillary benefits for Vander Mill?

Outside of seltzers, how do you see the larger market playing out next year?

We’re excited to have that in our space here in Grand Rapids where people can see it work.

One t h i ng t he cra f t i ndu st r y is lea r ning is that it’s incredibly expensive on the

distribution side to maintain and support a brand. We’re noticing that as well. You’re dealing with ver y large companies in this industry, and to keep up with many markets or multiple states is increasingly difficult for not just sales focus and brand awareness, but the efficiency of logistics. The alcohol industry hasn’t grown as a total in volume for over a decade, so everybody’s growth is coming from somebody else.

Do you see that continuing to drive M&A? What some of these larger breweries and more recent acquisitions have seen is somewhat of a realization that to be in that many states, or certainly to be a national brand, there is a certain amount of infrastructure that needs to be in place. That’s incredibly expensive and complex. It’s going to prove to be difficult for brands that are trying to compete in many markets.

As competition keeps getting more intense, what do companies like Vander Mill need to do to thrive? We’re realizing that we just need to continue to do the hard work of supporting our wholesalers, supporting our retailers, and supporting and thanking our customers. By thanking, I mean continue to innovate, bring out quality products, stay true to our brand. But there’s a certain amount of the ABCs of this business that you really have to settle into no matter what else is going on, and that’s working with your wholesalers and retailers to continue to drive product to the consumer.

As an industry, what can you do to help convert more American drinkers to cider? The small producers in our industry are going to continue to do the local work of changing people’s palate to cider, and I don’t see that letting up. It just takes time. Many times, I feel like how could I be in business for this long and still have so many people not understand what cider is, but we face it every single day so we know there’s a long way to go.

What’s keeping you up at night as you look at 2020?

The <engine/> team is grateful to our clients for a fantastic 2019. HERE'S TO 2020!

<engine/> | Grand Rapids, MI | runengine.com 36

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

Since I’ve been in business, I’m kept up at night — there are so many moving parts. But as I’m in this industry longer and as I’m a business owner longer, I get a little less frantic and I lose less sleep than I used to because the cookie crumbles all the time, and you’ve got to sweep it up and keep moving forward. Interview conducted and condensed by Joe Boomgaard. Courtesy photo. Visit www.mibiz.com

GRACI HARKEMA

Stephanie Schafer

OWNER // GRACI LLC // GRAND RAPIDS

After a deposition leaked in the racial discrimination lawsuit filed against Grand Rapids-based Founders Brewing Co., the brewery again made national headlines when Graci Harkema, its diversity and inclusion director, publicly resigned after less than a year in the position. Founders went on to settle the lawsuit, although the case has remained a topic of conversation in the craft beer industry. Meanwhile, Harkema has started her own business, Graci LLC, to focus on sharing diversity and inclusion best practices within the adult beverage industry. What was it like for you to leave Founders so publicly? Exiting so publicly certainly was very intense. I did not realize that my resignation would hit national news and be covered by the likes of The Washington Post and NBC and The Chicago Tribune. The reason why I posted my resignation on social media was due to the advice of my attorney, to ensure that I was being open and transparent about my reasons for leaving in order to prevent others, including Founders, from saying that I left for reasons that were not true. It certainly was very intense, especially with a lot of media interviews afterward. However, as intense as it was, I believe that it was important for me to be open and transparent with the public on what I stood for and what my values were.

When did you realize you wanted to start your own business? I didn’t realize I was willing to start my own business until I had the demand for it. I resigned without knowing what I was going to do. Within a week of my resignation, I had nine breweries and distilleries, primarily from West Michigan and a few from the West Coast of the country, reach out and tell me that they appreciated me being so open and vulnerable, and that I was able to give them perspective on some missteps that they had in their own companies. They realized that they had an obligation to do better and they wanted to do better, and be ahead of diversity and inclusion challenges that they were seeing, before it would turn into an escalated situation or a lawsuit.

What has your new company allowed you to do? Most notably, I spoke at the Brewbound conference in L.A., where it was a large beer conference with some big players in beer, most notably MillerCoors. It specifically was about how we can move toward equity within beer, and what are some missteps that we’ve seen, and how can we learn from that.

What’s on the horizon for 2020? My goal is to continue to be not just open and engaged in the industry, but really be a voice for all identities in the industry, and to be able to elevate the other voices that perhaps have been silenced. I’m writing a book as well. I’m working with a public relations firm on finding literary agents to pitch my story to publishers. The overall premise of the book is a memoir of my entire life story, but the themes are overcoming adversity and also driving toward your purpose. Right now, my clients are breweries, and then I’m having conversations currently with some restaurant groups. It’s primarily in Grand Rapids because I’m still living here. However, I do have some other clients that I’ve engaged with who are in larger cities.

What are some of the common issues among companies in the craft beverage industry? The most common by far is they’re having challenges in building a diverse workforce, and that Visit www.mibiz.com

CO-OWNER AND OPERATOR // JEM-LOT DAIRY WESTPHALIA

Dairy producers are struggling to make ends meet, and many dairy farmers have lost money for months or even several years straight. JemLot Dairy’s Stephanie Schafer, who is also a district director with the Michigan Farm Bureau, said the situation is largely the result of low milk prices. Her farm keeps 300 dairy cows in Clinton County. It’s been a rough year for farmers. How are they faring going into the next year?

ties into the second challenge of having an inclusive environment. Most importantly, especially when it comes to building a diverse workforce, is those in hiring capacities need to realize that your workforce is only going to be diverse if you are intentional on having it be diverse. Often times, when there’s issues, especially when it comes to breweries’ hiring practices, they’ve been started by groups of folks who are very similar to one another. As the company grew, they were thinking, ‘OK, who in my circle would be a good fit here? Who do we know that we would want to work here?’ Chances are those people are exactly like them. Then it becomes this multiplying ripple effect where we’d just continuously hire people who are exactly like us. If people like us in that core group are not diverse, chances are who we’re hiring is not going to be diverse. It’s important to make intentional efforts.

How do you think the Founders situation informs conversations about diversity in the industry? I think the silver lining of the Founders situation as a whole, even prior to my resignation because that had already hit national news, is it created an opportunity for others to have real-time conversations about injustices and discriminatory actions that we’re seeing every day. I think it made people realize, ‘Hey, this isn’t just an isolated situation,’ that really this could happen anywhere and it’s important to no longer ignore the issues.

Where does that conversation go in 2020? It is trendy right now, and so with some organizations you hear it because it’s a hot topic and from others we’re hearing it because we’ve realized that diverse teams have proven to have higher or more increased rates of productivity. We’ve also seen a diverse consumer base result in increased sales as well. Outside of it being trendy and outside of it being a buzzword, the true benefit to companies is you’re going to have increased sales, increased products, increased value, and more longevity as opposed to circling within the same market over and over again. As breweries are becoming more and more competitive, it’s imperative that they’re expanding who their audiences are and expanding who their internal teams are.

Where can craft beverage companies or other businesses start? If your own interior and internal team does not have diversity — diversity of experience, diversity of background, diversity of thought — if the core internal team is very homogenous, then be intentional on networking, utilizing resources and gaining insights and perspectives from others who have a different experience than you. Those are going to be the voices that will help keep companies competitive and also help keep companies aware of some of the areas that they may be missing.

Believe it or not, farmers are optimistic to the end. I’ll tell you they’re looking forward to 2020. I know a lot of farmers that just wish this year would end. They just want to be out of 2019. It has been tough. They are looking forward to 2020 because it can’t get any worse.

What do you think is getting better? I can’t say that I’ve heard a whole lot of grumbling about prices lately. Dairy is starting to look a lot better. The prices are coming up. We’re still dealing with some issues, but the overall price that farmers are getting paid is a lot better than what they’ve seen in dairy.

Why are the prices so volatile? That’s a good question and we’ve been asking it. We produce this milk and MMPA (Michigan Milk Producers Association) tells us that their plants are running pretty much at capacity, so why do we have such a low price? They’ll point to several things like fluid milk consumption is down and consumption overall on cheese and everything is down. It’s hard to believe. If we could get exports moving, especially to China, that could be a big game-changer. Those guys are growing and they’re going to have to feed a lot of people.

How much do you think the bankruptcy of Dean Foods is going to affect the regional dairy market next year? It depends on what DFA (Dairy Farmers of America) does with that and who buys their plants or if those plants just get mothballed. If they just completely close them up, then we’re going to lose processing capacity and that could hurt. I would think it’s going to be over a year before that gets all hammered out and settled — but don’t think that dairy producers aren’t watching to see what happens. You want to have the capacity to process the product. Otherwise, it has to get shipped out of state or to a different processor and then it costs us more money.

Thousands of U.S. dairy farms have closed in the past couple of years and one of the largest drops came from Michigan, which lost 230 dairy farms in 2018, according to the USDA. Do you expect more dairy farmers in the region to close? I think you’ll see a few. I’m hoping you don’t see the large number like you have in the last three to four years. When we used to look at the dairy industry, we used to look at it like a three-year curve. One year, you’re going up. In the second year, you’re at the top. In the third year, you’re coming down. Most people on that three-year cycle could survive that up and down, but we’ve been on a (downward trend) for five years already and it’s just been too long. That’s why you see farms going out. The low has been too long for a lot of people to sustain.

What is happening to the farmers that are leaving the dairy industry? They sell the cows, save the equity and save what they can and move on. Some of them are getting to the age, too: I think the average age of a dairy farmer now is 59 or 60 years old. Some of those guys are looking at this as too much of a struggle. They don’t need it and are going to move on and do something else.

What other parts of the industry are they moving on to? I see a lot of crop farmers. They have enough acres to make a decent living and it works out great if they have things paid off. I don’t see them going into raising heifers or anything like that because they’ve just had enough of dealing with the animal end of it.

What are you watching now to gauge your plans for next year and for the future? We’re watching class three milk. We’ve been watching that to see if we can contract any milk ahead. We are not borrowing any money, I can tell you that. Even though prices are up right now, they’ve been down so long that it’ll take guys a year to a year and a half to catch up. It’s something to get excited about, but it’s not something that’s going to happen instantaneously.

What’s your takeaway as you look ahead to 2020? We’re climbing up that hill again. You just don’t want to be one of the statistics. We’re a sixthgeneration farm with the seventh generation coming right up. I’ve just come back from the Farm Bureau State Annual Meeting and we listened to some young farmers and they’re enthusiastic. It’s hard not to catch that bug. I have never seen a year like this and they may not ever see one like it again in their lifetime, but they have remained enthusiastic through a wet, wet spring and a cooler summer and a wetter fall now, so it’s refreshing to listen to a young farmer. It’s kind of hard not to be optimistic when I also have three young farmers living with me in the house. Interview conducted and condensed by Jessica Young. Courtesy photo.

Interview conducted and condensed by Sydney Smith. Courtesy photo. Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

FOOD BIZ

LARRY BELL

PRESIDENT AND FOUNDER // BELL’S BREWERY INC. KALAMAZOO

Bell’s Brewery Inc. founder Larry Bell sees another two years of turmoil ahead for the craft brewing industry, particularly as growth continues to level off and as more owners opt to take “a boatload of money” and sell their companies. As Bell’s Brewery looks ahead to celebrating its 35th year in business in 2020, the company continues to remind customers that it remains a quality and fiercely independent option amid a growing number of products now part of multinational conglomerates. The Brewers Association is talking about another year of 4 percent growth in 2020, well off the pace from the middle of the decade. While growth is slower, is that necessarily bad? Listen, most industries would be rea lly happy with 4 percent growth right now. If the American economy was growing at 4 percent now, oh my gosh — that would be unbelievable! It’s just we’ve been spoiled by having years of 20 percent growth. Especially as our market has matured, 4 percent is a nice number. And if craft beer is growing at 4 percent and macro beer is actually declining, craft beer is actually grabbing more market share.

How do you see hard seltzer factoring into the market next year? I think we’re going to see the Great Seltzer Wars of 2020. It is going to be crazy in your grocery market on the shelves there, as all the big guys launch new products and as White Claw and

Truly try to protect their space. It’s going to be a little bit nutty with the seltzer thing, as Bud Light Seltzer and Corona seltzer come out. White Claw is doubling down and investing a lot of money into new plants. Not everybody’s going to win at that game. It could be a bloodbath for some. For craft brewers, where that’s a problem is as those seltzers start pushing shelf space in the off-premise (stores), it becomes a little bit harder especially for the smaller players to hold onto their space in those sets. That could definitely hurt smaller packaging breweries.

With more craft brewers getting into seltzer, does that muddy the waters for the industry in any way? It could change how people look at their beer portfolio. I think it depends on who they are. If they’re part of a group and that group has decided ‘this is going to be our seltzer brewery,’ well then maybe that’s going to be

successful for them. But seltzer production is a little more high tech. To make it good and clean, it’s a lot easier to do it in a bigger, more technologically advanced brewery than in a smaller brewery.

Does Bell’s look to play in that product category at all? 5 Year Loan/7 Year Amortization Commercial Finance $25,000,000 TRANSPORTATION COMPANY

Revolving Line of Credit & Term Loan Asset Based Lending $5,250,000 MACHINING MANUFACTURER & MATERIAL HANDLING EQUIPMENT COMPANY

LOC/Term (5/5)/EOL C&I $6,000,000 AUTOMOTIVE PLASTIC INJECTION MOLDING COMPANY

LOC/Term/CREM C&I $3,330,000 PRODUCE SUPPLIER

We do not. We are beer brewers, thank you very much. We don’t make fermented sugar water with flavors.

The dealmaking continued in the craft beer industry in 2019. What’s your prediction for M&A in the coming year? I think we are going to see one more major deal before the end of the year, and I think we are going to continue in 2020 to see some more M&A activity.

Who’s going to be buying? The Asians and the Europeans still have an interest in the craft beer space in the United States. It would appear that Constellation probably doesn’t anymore because they screwed up what they had (with Ballast Point) and have done so poorly. Probably not ABI (AnheuserBusch InBev) — they have a pretty full portfolio. I could see MolsonCoors possibly making some more acquisitions. They’re going to be losing an incredible amount of production volume over the next two years as Pabst switches (its production contract) over to City Brewing in LaCrosse, Wisconsin. You’re talking 5-6 million barrels of production. That’s a whole plant for those guys. Will they be looking to pick other things up to make in there? I think they probably still have some interest in acquisitions.

Are the buyers hitting the market at the right time, given that some of these breweries are starting to realize they might be over-leveraged or are getting forced into an exit? Member FDIC

A Division of TCF National Bank

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

Definitely. These people talked like this thing was going to be growing 20 percent a year. As you get into it and you’ve been doing it for seven years and maybe they’re not making the kind of money they thought they were going to make

and they’re over-leveraged, maybe it’s time to get out of this. ‘Who can help me?’

How do those stressors change the dynamics in the industry? We’re going to see this rate of closure that’s been accelerating maybe accelerate a little bit more in 2020. And certainly the velocity of openings is going to slow down.

Yet the Michigan market has continued to grow in recent years. Will that change? I think we’re going to start finding some equilibrium as far as the number of breweries in the state. I know there’s some new people opening up in Grand Rapids. We’ve had three closures here in Kalamazoo, and I don’t know how many openings we’re going to be having here now. I think we will start to find equilibrium in the openings and closings in the state. I predict we will see some M&A activity in the state.

How do these dynamics affect a craft brewery like Bell’s that’s approaching 35 years in business? Honestly, these mergers and acquisitions right now are a positive for us. As we continue to tout our independence, I think that resonates with a certain group of consumers. There’s not a lot of us O.G. craft brewers left that are independent, that haven’t done a deal. I think that’s a plus for us right now, and we’re going to continue to push that.

As all these fads come and go, where do you see the craft beer industry going next? We’ve kind of come to the end of the original craft beer revolution, and now it’s going back to what it was when I started. This small brewers group was about small, independent breweries and what we could do to band together, to try and keep our place in the market. It’s not about the ingredients anymore, or tradition. It’s really about are you small and independent and those are the people that are going to hang out together and make sure that they can still have access to the marketplace. Interview conducted and condensed by Joe Boomgaard. Courtesy photo. Visit www.mibiz.com

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 2020.

1st Source Bank

Competition Engineering

Gun Lake Investments

Progressive AE

ACG Western Michigan

Consumers Energy

H&S Companies

Real IT Solutions, Inc.

Advanced Manufacturing Expo

Cornerstone University

Davenport University

Rhoades McKee

Advantage Benefits Group

Creston Industrial Sales

Highpoint Community Bank

AIA Grand Rapids

Crystallume/RobbJack

The Right Place, Inc.

Holland Home

AJACS Die Sales Corp.

CSI Grand Rapids

Hope Network

Ritsema Associates

Allied Electric, Inc.

D & D Building

HR Collaborative

American Marketing Assoc. / W. Michigan Chapter

Dan Vos Construction

Hungerford Valuation

Davenport University

American Subcontractors Association of Michigan

Decade Products Corp.

Hyper-Graphics Real Estate Marketing Agency

River City Mechanical Rockford Construction Co. SAE International Small Business Association of Michigan

The Deltaplex Arena and Conference Center

Independent Bank Corp

APEX Controls, Inc.

Industrial Control Services, Inc.

SME Education Foundation

Area Community Services Employment & Training Council

Dickinson Wright PLLC

Kendall College of Art & Design of Ferris State University

Smith Haughey Rice & Roegge

Dropsa USA, Inc. DTE Energy

Koops

Specialty Agriculture Risk and Financial Association

DVS

Lacks Enterprises, Inc.

SpinDance

Elzinga & Volkers

Lambert & Company

St. Cecilia Music Society

Emmanuel Hospice

LV2 Equity Partners

Sumitomo Drive Technologies

The Employers’ Association

Macatawa Bank Martin Commercial Properties

Superior Integrated Systems

Enbridge Erhardt Construction

Mercy Health

Ferris State University

Merit Network, Inc.

Fifth Third Bank

Metro Health Hospital

First Companies

MFP Automation Engineering

Fishbeck

Michigan Economic Development Corp.

Flagstar Bank

Michigan Manufacturers Association

Unlabeled Beer Tasting Game

Fliers Quality Water Systems, Inc.

Michigan State University Broad College of Business

Van Dyken Mechanical, Inc.

Midlink Business Park

Varnum Law

Mika Meyers

Vista Springs LLC

Armock Mechanical Contractors Associated Builders & Contractors, Inc. Axios HR Baker Engineering Barnes & Thornburg LLP Bauer Sheet Metal & Fabricating, Inc. BDO USA LLP Beene Garter LLP Behco-MRM Blandford Nature Center Blue Cross Blue Shield of Michigan BlueWater Partners, LLC Brigade Fire Protection, Inc. Business Leaders for Michigan BW Manufacturing

Forerunner 3D Printing Fritz Wahlfield Construction Co. Fusion IT

Commerce Bank Central Michigan University Certified Building Solutions Charter Capital Partners Chemical Bank

Gerald R. Ford International Airport Gibson Global Concepts Enterprise, Inc. Godwin Plumbing Grand Haven Area Community Foundation

ChoiceOne Bank

Michigan Manufacturing Technology Center - West Morrison Industrial Equipment Co. Motion Industries, Inc. Old National Bank Pleune Service Co.

Thompson M-TEC Triangle Associates, Inc. The Trinity Group, Ltd. Trophy House Brands United Federal Credit Union

Van Laan Concrete Construction

Walheim Media for E2.org WAM Print/Mail, Inc. Warner Norcross + Judd LLP West Michigan Construction Industry Forum

PM Environmental

West Shore Bank

Colliers International West Michigan

Grand Rapids Area Chamber of Commerce

Porter HIlls

Westwind

The Comedy Project

Grand Rapids Community Foundation

PNC Financial Services

Horizon Bank

Commercial Alliance of Realtors

Grand River Bank

Prairie States Enterprises, Inc.

Wolverine Building Group

Commonwealth Construction

Grand Valley State University

Precision Data Products, Inc.

World Trade Week West Michigan

Citizens Bank

P.O. Box 1629, Grand Rapids, MI 49501 | mibiz.com Sales inquiries: sales@mibiz.com Editorial inquiries: editor@mibiz.com

Visit www.mibiz.com

Special Year-End Edition: MiBiz Crystal Ball 2020 / DECEMBER 23, 2019

BOOST CUSTOMER COMFORT AND SAVE

When the temperature drops, your monthly business costs can rise. Luckily, DTE makes it

easy to see how weather and usage affect your energy bill. We might not be able to change the weather, but we can help you better manage costs.

To get tips and learn more, visit dteenergy.com/heatingseason.

DECEMBER 23, 2019 / MiBiz Crystal Ball 2020: Special Year-End Edition

Visit www.mibiz.com

Creative Files: DTE Energy/Creative/DTE1036 - Gas Print Ads/R4 > 2019-02-23-DTE1036-gas heating season-10.25x13.625-CMYK-R4.indd