MiBiz May 10, 2021 print edition by MiBiz

Banking groups back federal cannabis SAFE Act

Bronson Healthcare CEO looks back on first year

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RACIAL RECKONING

Biz, labor groups spar over state’s ‘permanent’ COVID-19 workplace rules By ANDY BALASKOVITZ | MiBiz abalaskovitz@gmail.com

hile Michigan is making progress to vaccinate the vast majority of residents against COVID-19, Gov. Gretchen Whitmer’s administration wants to put in place longterm workplace safeguards in case the virus still maintains a presence here. Earlier this year, the Department of Labor and Economic Opportunity began a formal rulemaking process over “permanent” workplace safety rules that could remain in place after emergency orders expire by law in mid October. The proposed eight-page rules involve determining COVID-19 exposure risk at worksites, preparedness and response plans, basic infection prevention measures, health screenings and providing personal protection equipment. The proposed rules also include industry-specific requirements, and a provision to promote remote work when possible. The state first issued emergency rules on Oct. 14, 2020 to govern workplace safety through the Michigan Occupational Safety and Health Administration (MIOSHA). They last six months and can be extended for six months, creating the October 2021 deadline. “Beyond that, it requires the agency to go into an additional rulemaking process,” said Sean Egan, Michigan’s COVID-19 workplace safety director who oversees MIOSHA. “Knowing that, and not knowing where we will be in October” with the virus necessitates the creation of long-term regulations, he said. While state officials say permanent rules would provide continuity in the event of a prolonged pandemic with insufficient vaccinations or potential coronavirus variants, business advocates have described the proposal as heavy-handed regulations that would interfere with companies’ day-to-day operations. “It doesn’t instill a lot of confidence in the business community to say that there’s no light at the end of the tunnel,” said Wendy Block, vice president of business advocacy See MIOSHA RULES on page 3

From left: James Peacock III, Jamiel Robinson and Jennifer Burns. PHOTO BY KATY BATDORFF

Municipalities and organizations play catch-up on diversity, equity and inclusion as minority business leaders seek resources By KATE CARLSON | MiBiz kcarlson@mibiz.com

t’s been a year since social media timelines were filled with Black Lives Matter hashtags, messages of solidarity with people of color, and promises to address racism as organizations responded to the national racial justice movement.

Jamiel Robinson, the founder of Grand Rapids Area Black Businesses (GRABB), isn’t holding his breath that many of these pledges will lead to lasting change. “I think it was more of a self preservation thing for a good amount of those people that were making those statements,” Robinson said of businesses, government officials and other organizations. See EQUITABLE DEVELOPMENT on page 10

Diversity, Equity and Inclusion

Also Inside: n Venture capital diversity, page 12 n LGBTQ ballot initiative, page 14 n Q&A: Jazz McKinney, page 14

Sligh factory transformation poised to reshape GR city block By KATE CARLSON | MiBiz kcarlson@mibiz.com GRAND RAPIDS — Construction is expected to start next spring at the historic Sligh Furniture Co. factory near downtown on what would be one of the city’s biggest housing developments in recent years. T he m i xed-use redevelopment planned by Detroit-based

Sturgeon Bay Partners calls for 753 apartment units across three buildings, commercial space, a cafe and a five-story parking garage. The development at 446 Grandville Ave. SW in the city’s Roosevelt Park neighborhood comprises nearly the entire block where the furniture company operated from 1880 to the early 1930s, according to the Grand Rapids Historical Commission.

The 753 units are poised to make a dent in the city’s ongoing housing needs, particularly for affordable options. Recent studies show the cit y needs an additional 9,000 units at all price points over the next five years to meet demand. “We’re carving out at least 10 percent of the total unit count to be affordable housing, and that

will be anywhere from 60 percent to 80 percent of the area median income,” Sturgeon Bay Partners co-founder John Gibbs told MiBiz. “I think we’ll have a good chance of achieving an even higher percentage than 10 percent as we work with (the Michigan State Housing Development Authority) and some other organizations.” See SLIGH FURNITURE on page 6

Auto dealers see shrinking inventory from high demand, supply woes

Commercial Lending Quarterly: Commercial real estate

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MIOSHA RULES Continued from page 1

Block

and member engagement with the Michigan Chamber of Commerce and one of eight voting members of an advisory committee overseeing the draft rules. “We think it’s very inappropriate if we’re no longer under a state of emergency. If anything, our members are asking for more certainty; these proposed rules create more questions.”

Committee process, shifting conditions Over the past two months, a formal advisory committee made up of four representatives each from labor and management held nearly 10, three-hour meetEgan ings to discuss and reach consensus on a proposed set of rules. The committee reached agreement on some aspects of the proposal but deadlocked on several key components, according to committee members. A 4-4 vote on proposed amendments meant they wouldn’t move forward. The committee also had non-voting technical advisers including the Michigan Licensed Beverage Association, the Michigan Retailers Association and Blue Cross Blue Shield of Michigan. A May 26 public hearing marks the next step in the months-long formal rulemaking process. The state can review those comments and make updates “where necessary,” Egan said. The proposed rules would then go before the legislative Joint Committee on Administrative Rules for final approval. Egan believes the process could wrap up before the emergency rules expire in October. At the start of the process, Virginia was the only other state to have enacted permanent COVID-19 workplace safety rules, according to state documents. Egan noted that Oregon and California have each initiated their own permanent rulemaking processes. “One of the challenges, and certainly in a pandemic, is when you create a draft rule, conditions

change,” Egan said. “We’ll have an opportunity to update the draft to make sure it’s in alignment with the ‘Vacc to Normal’ plan and potential federal OSHA standards that may be coming out.” Additionally, the draft rules include a provision that MIOSHA “shall examine the continued need” for the rules within 21 days after an emergency rule is lifted or expires. On April 29, Whitmer announced the “MI Vacc to Normal” plan that ties vaccination rates at 55 percent, 60 percent, 65 percent and 70 percent thresholds to further economic reopenings. Egan called vaccinations the “tool to make workplaces truly safe.” But there’s also mounting skepticism about whether Michigan and the U.S. will reach 65 percent or 70 percent vaccination rates. “And then what? How long do we have these permanent rules?” Block said. “I think there is some concern about when and if Michigan is ever going to find itself in a situation where we don’t have layers of restrictions.” Dave Worthams, director of human resource policy for the Michigan Manufacturers Association, said in a statement that Michigan businesses “cannot be handcuffed permanently and compete effectively in the global economy.” “We need reasonable long-term solutions that recognize the COVID-19 emergency will end at some point in the future,” Worthams said. Joshua Pugh, spokesperson for the Michigan AFL-CIO, downplayed concerns about the length of the rules. “The only rules that will stay in place long term are those that are necessary to keep workers safe,” Pugh said in a statement to MiBiz. “The regular rules process does not mean anything will be permanent, it is just another way for the administration to collect input from as many interested parties as possible. Any business that truly values the safety of their workers should welcome the opportunity to be engaged in the rulemaking process.” “The quickest way for us to lose much of the ground we’ve gained in fighting this virus would be for greedy businesses and bosses to be allowed to cut corners and put the safety of workers at risk, just to make an extra buck,” Pugh added. “We’ve seen what happens when we let down our guard.” Egan said the state will have multiple opportunities to update the draft rules before they’re finalized if the vaccination targets are met.

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

Township advances plan to ‘reimagine’ Plainfield corridor The Plainfield Charter Township Planning Commission recently voted to adopt the Reimagine Plainfield Plan, which recommends ways to build vibrant places, encourage green space, and make Plainfield Avenue north of I-96 more of a destination. The plan focuses on Plainfield Avenue from Four Mile Road to the Grand River, which currently has many chain restaurants, parking lots and auto-oriented businesses that are not flexible for future development. The township voted in July to put a moratorium on most developments along the corridor with the intention of finalizing the Reimagine Visit www.mibiz.com

Plainfield Plan by the time the moratorium expires on July 24. Key recommendations of the plan include creating and preserving green space, establishing three new town centers for community activity along the corridor, and encouraging mixed-use development that includes housing, retail and buildings that are adaptable to a range of uses.

Start Garden brings back business pitch competition

After taking a year off, Start Garden is bringing back a business pitch competition that awards $1,000 to 100 contestants and $20,000 to 10 finalists. The Start Garden 100 began accepting pitches last week from entrepreneurs who are asked to submit a 90-second

video describing their idea. Start Garden will accept entries through July 26. Judges will select 100 entrepreneurs who will receive $1,000 to pursue their idea over two months and present at a Demo Day competition on Oct. 2. Ten winners chosen that day will then get $20,000 to support their business. Start Garden also will award $5,000 to a high school student or team. “It’s always been a platform for anybody who wants to get an idea off of the ground to do it,” Start Garden co-director Paul Moore said.

Ottawa County moves forward with broadband internet assessment

Ottawa County has hired an Ann Arbor-based nonprofit research organization owned by Michigan public universities to analyze local broadband internet service, identify gaps and recommend potential cures.

“We don’t know where we’ll be in October. Our hope is we’re at the tail end of (the COVID-19 pandemic) and won’t need much, but we need to prepare for whatever we need.” — SEAN EGAN Director of COVID-19 Workplace Safety, State of Michigan

Sticking points, agreement Block said the remote work component was among the notable sticking points during the advisory committee meetings. According to the draft permanent rules: “The employer shall create a policy promoting remote work for employees to the extent that their work activities can feasibly (e.g., technical, economical, performance) be completed remotely.” Promoting remote work if possible versus requiring it if in-person isn’t necessary is the key difference between the draft permanent and current emergency rules. Egan also said that “remote work as a strategy to mitigate COVID” continues to be recommended by the U.S. Centers for Disease Control and Prevention and federal OSHA. “Quite frankly, these are decisions that need to be made between an employer, employees and the union if they’re organized,” Block said. “We think it’s wholly inappropriate for the government to even mandate a long-term policy related to remote work.” She characterized the process as “pretty frustrating” and “deadlocked” with several 4-4 votes on rule amendments. Without a majority, the proposed rules are the “status quo” of what the state sought in the first place, Block said. While Egan agreed there “were certainly disagreements,” the agency is gathering input “from all stakeholders, not just certain groups.” “We’re just using the only tool we have,” Egan said. “We don’t know where we’ll be in October. Our hope is we’re at the tail end of this and won’t need much, but we need to prepare for whatever we need.”

It’s the first of a four-step process to improve high-speed internet access across Ottawa County, where broadband coverage in some areas remains spotty or inaccessible. “Taking steps now to improve broadband access will ensure all Ottawa County families and businesses have the tools to compete now and in the future,” said Paul Sachs, director of Ottawa County’s Planning and Performance Improvement. The Ottawa County Board of Commissioners late last month approved a $42,000 contract with Merit Network Inc. to conduct the first phase of the digital inclusion strategy.

Major utilities seek negotiations on rooftop solar

Michigan’s two major investorowned utilities want to negotiate with state legislators and advocates on a proposed bill that would expand access to

the companies’ rooftop solar programs. During a joint press conference last week, officials with Detroit-based DTE Energy and Jackson-based Consumers Energy — along with the Michigan Chamber of Commerce and the Utility Workers Union of America — said House Bill 4236 in its current form is unfair and would create subsidies paid by customers who don’t generate their own power onsite. H.B. 4236 is sponsored by state Rep. Gregory Markkanen, R-Hancock, and has bipartisan support in the state Legislature, as well as backing from clean energy advocates. The bill would eliminate caps in regulated utilities’ distributed generation programs, which use a formula adopted by the Michigan Public Service Commission to credit customers who send excess power they generate back to the grid.

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MiBiz ISSN 1085-4916 • USPS 017-099 Established 1988 MiBiz is published every other week by MiBiz, Inc., P.O. Box 1629, Grand Rapids, MI 49501. Telephone (616) 608-6170. Fax (616) 608-6182. E-mail: info@mibiz.com. Subscription changes: subscribe@mibiz. com. Periodicals Postage is paid at Grand Rapids, MI. POSTMASTER: Send address changes to MiBiz, P.O. Box 1629, Grand Rapids, MI 49501. Subscriptions are available without cost to qualified readers. Paid subscriptions are available to those not meeting qualified circulation requirements. Paid subscriptions are $99/year. Single copy and back issues (when available) are $3 each, plus first class postage. Call 1-877-443-1977 to order. MIBIZ INC. 1059 Wealthy St. SE, #201 Grand Rapids, MI 49506 616-608-6170 phone • 616-608-6182 fax COPYRIGHT ©2021. All Rights Reserved.

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MiBiz / MAY 10, 2021

MANUFACTURING

Auto dealers face vehicle shortage as supply chain woes grip industry By JAYSON BUSSA | MiBiz jbussa@mibiz.com

n a typical year, Matt Koning likes to have up to 210 vehicles listed and ready to sell across his four used car lots. Right now, his inventory is sitting at 110 — and he still feels fortunate to have that robust of a supply. “We can’t keep up with demand right now — getting them fixed and repaired quick enough with the people and the resources we have,” said Koning, president and owner of Broadmoor Motors. “They’re just selling faster.” Koning and his dealership — which maintains stores in Caledonia, Middleville, Hastings and Wayland — are emblematic of the entire industry right now as it faces a problematic intersection of high demand for vehicles and a worldwide slowdown in production because of material shortages, primarily microchips. Dealerships of all sizes are facing bare lots and showrooms while used cars are going for retail prices at auction. The dynamic is forcing these businesses to make crucial adjustments and get creative in order to navigate the turbulent industry. “I’m a little surprised more places haven’t gone out of business or at least cut their workforce,” Koning said. “You look at some of these dealerships that are used to having 100 cars for sale and they only have 40 or 50. I don’t know how they pay all their salespeople and buyers and other overhead they normally have. “I suspect we’ll see more dealerships close or combine over the next few months.”

Production slowdown Disruptions in the industry’s supply chain have hampered new vehicle production in North America. News of the global microchip shortage has dominated headlines, painted as the primary culprit of the production slowdown. Microchips are required for many different vehicle components, from power windows to dashboards to transmissions. Ford Motor Co. recently estimated that it would have to slash production by 50 percent in the second quarter because of the microchip shortage. “Automakers and suppliers that were requesting (microchips) weren’t sure initially what demand would be like” early in the COVID-19 pandemic, said Mike Wall, director of automotive analysis at IHS Markit. “They were maybe scared to ramp up. But by July or August, we knew demand was coming back with gusto.” However, Wall noted that the industry faces more issues than just a shortage of semiconductors. This includes shortages, increased lead times and high prices for materials like rolled steel, rubber, resin and seat foam in addition to disruptions at many of the nation’s ports. “Were it not for microchips, we’d still be in a pickle,” Wall said. “Maybe not as severe of one. That’s the interesting thing in all this. There are a number of commodities that are causing all sorts of problems.” In its latest forecast, IHS Markit projected that the industry will see 15.7 million units of North American light vehicle production for 2021. If not for the shortage of materials, the industry would

MAY 10, 2021 / MiBiz

likely be on par with pre-COVID levels, which were at 17 million units in 2018 and 16.3 million in 2019, which included the General Motors labor strike at the end of the year. Production plummeted to 13 million units in 2020 during the pandemic. The industry is currently sitting on 2.4 million units of inventory and could use an additional 700,000 to 1 million to return to “normal” market conditions, Wall said. These supply chain kinks are amplified by the fact that demand has snapped back to pre-pandemic levels. Wall was fairly surprised by this trend since the pandemic caused such widespread unemployment and disruption to the nation’s GDP. Based on those metrics, he would have expected a slower return of demand. “This is very much a supply situation and not demand,” he said. “That’s the good news in all of this — people are ready and willing to buy cars. That’s saying something considering when you look back on 2008 and 2009, it took a lot longer to get back to par. Here, retail sales are back to pre-COVID levels. “If we could get the stock, we’d be selling even more.”

Finding a niche Dealerships — fishing out of a smaller pond of available vehicles — find themselves getting creative when it comes to sourcing vehicles to sell. For Broadmoor Motors, which employs 36 fulltime and five part-time employees, that niche is loading up on vehicles with branded titles. These vehicles come with a history — whether they are theft vehicles or have a salvaged title. Koning said that most dealerships and buyers shy away from these vehicles. However, Broadmoor Motors has seen success by providing comprehensive disclosure of each vehicle’s history and standing behind all of the vehicles they sell. “We feel like we’ve done something and scaled it that no other dealers are really looking to do,” Koning said. “Most dealers have to have clean titles, accident-free vehicles. We’re not afraid of something with a history. We’ll just disclose everything and show before pictures and we won’t get as much money for it but we’ll still make a customer.” Broadmoor Motors has also invested heavily in commercial vehicle sales. In fact, the business started in the late 1980s by dealing with cargo trucks. When the pandemic hit, Broadmoor Motors loaded up on commercial vehicles that were more readily available, and it has paid off so far. “I think that’s with any business — you have to have an edge or niche, something that you can specialize in and focus on that’s different from everyone else, whether that’s the way you treat people or your product or both.” Koning said. “I would look at our business and say we have kind of a unique product — we’re not afraid of anything. What sets us apart, though, is how we treat people. I would say that’s our main focus.” Inventories are just as light for DP Fox Ventures LLC, parent company of Fox Motors, which operates 50 dealerships that are mainly concentrated in West Michigan but also extend to the Upper Peninsula. Fox typically maintains a 90 or 100-day supply of vehicles. Right now its supply is down to about 30 days for domestic vehicles and between 30 and 60

Broadmoor Motors’ used vehicle lot in Middleville. The company’s inventory is about half of what it typically is because of high demand and supply chain shortages. PHOTOS BY JAYSON BUSSA

“Were it not for microchips, we’d still be in a pickle. There are a number of commodities that are causing all sorts of problems.” — MIKE WALL Director of Automotive Analysis, IHS Markit

days for imports, or roughly one-third of the company’s typical inventory, according to Fox DP President and Chief Operating Officer Diane Maher. Fox has increased efforts to source private sellers looking to unload their vehicles. The company introduced the Fox Cash Offer promotion about a year ago, in which Fox provides an instant cash offer for any used vehicle. Maher said she has been pleased with the response. “It’s a little tougher to do it when you don’t have anything to put (vehicle sellers) in, like a new car,” she said. “That’s a little challenging right now but it’s been a successful promotion, for sure.” Fox dealerships will also scour Craigslist and similar websites while also networking with the vehicle owners that frequent Fox’s service centers. The company is constantly on the lookout

for vehicles, but the auctions — where prices are expected to continue rising — are not always a viable route. “Auctions are the last resort because those prices are just way too high right now,” Maher said. “It’s just an unusual market condition that you don’t want to hurt yourself too much in or get too crazy with.” Fox enjoys the advantage of operating a larger group dealership, but not necessarily for the purchasing power. “I think having a big group is helpful especially when you have multiple franchises in your group and you’re able to move cars around,” Maher said. Aaron Zeigler, president and CEO of Kalamazoobased Zeigler Auto Group, has found a similar luxury as a company with 30 dealerships throughout Michigan, Indiana and Illinois. Not only can he move cars around, but as part of Zeigler’s aggressive efforts to buy up cars, the company has also had luck buying in bulk. Zeigler, who normally stocks 12,000 vehicles but is down to 6,300 right now, said it wouldn’t be uncommon for his company to approach a seller to purchase 500 vehicles at a time that just came off lease. Zeigler also recently added to its portfolio by purchasing its first Subaru dealership, located in Merrillville, Ind. The acquisition highlights the potential for consolidation in the market. “There is a tremendous amount of M&A activity right now,” Zeigler said. “And I think part of it is driven by (the fact that) times have been pretty good.” Visit www.mibiz.com

Manufacturers shift from pandemic shutdowns to supply unpredictability By JAYSON BUSSA | MiBiz jbussa@mibiz.com

aurie Harbour compares life in today’s manufacturing industry to a game of whack-a-mole as company leaders find themselves addressing one problem only to encounter another. As manufacturers emerge from what’s hoped to be the worst of the COVID-19 pandemic, reverberations from the public health crisis continue to linger in major ways. In fact, the fallout from the early pandemic is proving to be more difficult than the initial shutdowns themselves. “2021 is going to be — and already is — more difficult than 2020,” said Harbour, president and CEO of Southfield-based manufacturing consultant Harbour Harbour Results Inc. “What the big executives are telling us — the Whirlpools, the GMs, the GEs, the Fords — is it’s more difficult in 2021 because the unpredictability is so much more significant.” Raw material shortages and pricing surges are among the most prominent of daily Klotz headaches for manufacturers as steel, resin and semiconductors are the toughest to source. Log jams at U.S. shipping ports and major kinks in international container shipping have extended lead times and also led to increased shipping costs. Meanwhile, consumers never really stopped buying big-ticket items like appliances, automobiles and recreational vehicles. Annualizing vehicle sales for March would put North America on pace to sell 18 million vehicles in 2021, but the industry will fall far short of that mark because of production slowdowns. As someone who advises manufacturers, Harbour admitted that — in this climate — it’s nearly impossible to be proactive. “It’s a tough one because it’s really about daily — and sometimes multiple times a day — communication with your staff on what do we have, what do we need, where are we going, what customers are screaming the loudest and what customers drive profitability in our business,” she said. “It’s almost like a daily review of customers and strategy.”

Addressing challenges As a Tier 1 automotive supplier, Cascade Townshipbased ADAC Automotive Inc. is feeling the ramifications of one the most prominent material shortages in manufacturing right now. As a worldwide shortage of semiconductors significantly slows down automotive production, ADAC — which produces vehicle entry systems at its facilities in Muskegon and Saranac — has had to adjust its workforce accordingly while managing its existing inventory. While the semiconductor shortage has limited ADAC’s output of electronic entry systems, its slower pace has stayed in lockstep with dwindling orders from OEMs. Visit www.mibiz.com

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With signs of potential supply chain relief ahead in the late summer or fall, the industry will need to methodically ramp production back up, said Peter Hungerford, ADAC’s executive vice president and chief strategy officer. “The challenge going forward is how can we build back up the resources we need to then fill customer orders as they get the microchips they need for their products?” he said. “If one week we get 50 percent of the orders and the next week we get 150 percent of the orders, that’s going to cause an equally problematic whipsaw effect.” “Our challenge is how, as an industry, do we pragmatically come back to full production managing both the supply side — microchips, resin, chemicals — and then the labor side because labor all through COVID has been another big challenge,” Hungerford added. With both consistency of orders and the sustainability of its supply chain put in peril, Hungerford admitted that the pandemic and its after-effects have forced his team to work more diligently. “We would have daily coordination meetings to ensure that whatever orders we do have, we were working with our suppliers and production teams to make sure we could deliver on those orders,” Hungerford said.

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Still optimistic David Klotz, president of the nationwide manufacturing trade group Precision Metalforming Association (PMA), has met with members across the country to see how they’re coping with the disruptions. Klotz confirmed that availability and prices for raw materials were among the biggest headaches. He has encountered some manufacturers that had presses ready to run and were just waiting on coils to arrive. PMA — which represents the $137 billion metalforming industry in North America — polled its members for an April report showing 64 percent of respondents said that lead times have increased compared to the previous three months. The trend is expected to continue. In many cases, the nearest approximation to being proactive is blindly placing orders for these crucial materials, with some PMA members already placing steel orders for October, November and December. “If you don’t put your order in now, you’re going to be left behind, so they’re placing their orders way in advance,” Klotz said. The PMA is pushing hard for the Biden administration to reverse the Section 232 tariffs on steel and aluminum that were put in place by the former Trump administration. The move would open up supply and drive down prices, according to Klotz. Despite the many causes for concern, PMA members are still quite optimistic for the future. A recent poll of its members showed that 56 percent of metalforming companies forecast an improvement in economic activity in the next three months. Harbour agreed, saying that she expects most manufacturers to navigate the choppy waters. “Most industries are very up in terms of revenue projections — except for maybe aerospace — and people are really positive,” she said. “Today, we face the day-to-day challenges. I think 2021 will still be a strained year because of unpredictability. It will affect people’s profit, but it won’t put them out of business.”

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REAL ESTATE & DEVELOPMENT SLIGH FURNITURE

Continued from page 1

Gibbs said he also wants to allocate some space for affordably priced commercial leases. The building’s open floor plan could accommodate a makerspace, he added. “We’re looking at having a healthy mix of some restaurants, and we’d love to have a grocery store that’s more affordable for the surrounding neighborhood. We’re going to seek that out in the coming months, and some retail and your typical coffee shops,” Gibbs said. Sturgeon Bay Partners’ portfolio includes a mix of small and larger multifamily and mixeduse projects in Detroit. Gibbs co-founded the firm in 2017 and oversees acquisitions, dispositions and other investment activity. Gibbs previously was on the acquisition team of real estate development firm DDG Partners, where he focused on deals in New York City and San Francisco.

Reshaping, restoring the block Planned tenant amenities include rooftop terraces, gyms and possibly some co-working space. Expected public amenities include a dog park and a central plaza that would feature events and food trucks. The development team will also improve the surrounding streetscape to follow city guidelines to make it more walkable and pedestrian friendly, said Lynée Wells, founder president of Grand

Rapids-based Aligned Planning, who is consulting on the project. Boston-based Touloukian Touloukian Inc. is the project architect while Grand Rapids-based Barnes & Thornburg LLP serves as legal adviser. Site plans call for demolishing part of the Sligh building that was a later addition and has foundation issues. Wells said these portions aren’t character-defining and are separate from the historic components that will be preserved. Developers plan to restore the historic, 19th century red brick building, bring it up to code and hopefully add it to the National Register of Historic Places, Wells said. “The registration process and subsequent rehabilitation will be done to high standards that are sensitive to the building’s architectural character,” Wells said. “Today this building has no protections from demolition or alteration that could jeopardize its historic character.”

‘Destroying families’ The development plan aligns with the city’s transitional city center zoning, officials have said. The site was also among several industrial parcels that were eyed for more mixed uses as part of the city’s 2002 master plan. Several artist studios and stores currently operate in the building, including three large antique shops that have spoken out against the development. Mark Miller, owner of Lost & Found: Treasures of Old & New Ltd., told MiBiz that he believes the city has underestimated the value and economic

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Sturgeon Bay Partners’ planned massive redevelopment at the former Sligh Furniture Co. factory in Grand Rapids calls for 753 apartment units and a variety of amenities. RENDERING COURTESY OF TOULOUKIAN TOULOUKIAN INC.

effect his business has on the community. Lost & Found has been operating in the Sligh building for the past 12 years, specializing in selling midcentury modern furniture across 50,000 square feet of the building. “We want to keep doing business here, and we think turning this into a giant apartment complex is not the right move for our community,” Miller said. “I would hate to see what would happen to the neighborhood. I think it will end up destroying families in the long run.” The current building owner hasn’t been renewing leases and has moved people out in anticipation of selling the building, Miller said. “We’re going to explore whatever legal avenues are available to us,” he said. Miller said he is open to moving his shop if necessary, but for now he is focused on finding a way to stay in the Sligh building. Miller said he has six employees and rents out 50 spaces in his shop. Property records show CGFH 446 Grandville LLC bought the property — which includes 10 buildings totaling nearly 590,000 square feet on 5.1 acres — in November 2017 for $7.2 million. The company is registered to John Breza, a West Bloomfield-based real estate manager and developer.

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T he Gra nd Rapids Pla n n i ng Com m ission approved the development on April 22, voting to allow specific building heights in some areas that strayed slightly from zoning requirements. The property otherwise meets zoning regulations and won’t require further approval from the Planning or City commissions. Despite the city’s findings, Lost & Found, Warehouse One Antiques and Century Antiques are collecting petition signatures from the community opposing the development. Miller said the building tenants weren’t notified about the April 22 meeting, or when the property was previously rezoned in 2008 to transitional city center. During the April 22 planning meeting, Grand Rapids City Planning Director Kristin Turkelson rebuked these claims and said notices were sent out according to legal requirements. “There has been a lot of chatter about the development with some of the tenants,” Gibbs

“We want to keep doing business here, and we think turning this into a giant apartment complex is not the right move for our community. I would hate to see what would happen to the neighborhood. I think it will end up destroying families in the long run.” — MARK MILLER Owner, Lost & Found: Treasures of Old & New

said. “We don’t own the building yet, we’re planning to close in a couple of weeks. We haven’t met with the tenants as of now.” The developers plan to meet with existing tenants to discuss options once the building is purchased, restored and brought up to code, Gibbs said, though it could be difficult retaining all three antique stores based on how much space they collectively occupy. “None of the tenants have reached out to me, but we are planning to meet with them,” Gibbs said. “We want to make sure we meet with the tenants, listen to their needs and hopefully get a good majority of them back in the building once the work is finished.” Visit www.mibiz.com

COMPLIANCE AND CYBERSECURITY FOR BUSINESSES

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

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

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

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

365 and/or G Suite) 4. Use Strong Authentication (Use 2-factor authentication

affordable, part-time basis • Review, update or create necessary policies and procedures

whenever possible)

Aren’t Compliance and Cybersecurity the same thing?

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

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

6. Train Your Workforce (Educate staff on identifying and

• Respond to external inquiries regarding your security or privacy practices

with a legitimate business need)

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

reporting potential security concerns) 7. Be Ready for the Worst (Have contingency plans ready

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

assessment gaps • Educate staff on privacy and security, and how to

and test them) 8. Monitor Compliance (Make sure you know and follow

recognize and report potential concerns • Coordinate incident training exercises for your teams

your regulatory obligations)

THE BUSINESS CASE FOR DIVERSITY, EQUITY & INCLUSION

n principle and in practice, the Grand Rapids Chamber believes in the value and power of diversity, equity, and inclusion (DEI). Various reports released in 2020 amidst a global pandemic, mounting racial tension and a divisive political atmosphere prove there is much work to be done. McKinsey & Company, a United Statesbased management consulting firm that advises on strategic management to corporations, governments, and other organizations, released the following research findings in 2020. • At the beginning of the year, women in

have even regressed. Without diversity, equity, and inclusion, we limit our talent, resources, and the business opportunities necessary to thrive in an increasingly competitive global marketplace. This is why we’ve assembled a team of subject matter experts who can provide DEI training for your organization. Dedicating strategy, time, and resources to both recruiting diverse talent and retaining and developing employees supports our common goal of building an inclusive culture where all people in West Michigan can thrive. THE SERVICES

entry-level management held only 38 percent of manager-level positions. Due to the challenges created by COVID-19, as many as two million women are considering leaving the workforce -- a phenomena that could set women back half a decade.

The Assessment: To develop an effective DEI strategy, it’s important to understand the perceptions of all stakeholders regarding the current state of DEI in the organization. The DEI Assessment will help you establish a baseline for your company and outline recommendations for the next steps.

• In the case of ethnic and cultural diversity,

Implicit Bias Training: Biases start early, and

businesses with culturally diverse teams outperformed those with minimal diversity by 36 percent in profitability.

just about everyone is prone to biases. Learn more about what implicit bias is, how to combat it, and how to tackle it moving forward.

• As it relates to sexual orientation, aca-

Institute for Healing Racism: The Chamber

demic estimates have found that 5.1% of U.S. women and 3.9% of U.S. men identify as LGBTQ+. Creation of psychologically safe workplaces for LGBTQ+ employees result in happier employees who view their workplaces more favorably and have more supportive managers, all of which positively impacts attraction and retention of talent.

believes the most effective way to combat racism is to educate individuals by use of honest and open dialogue. This program is an opportunity to start this dialogue by bringing racism to the forefront of discussions and examining it as both a personal and societal problem.

Despite consistent findings promoting the benefits of DEI, progress remains slow in closing gender and cultural representation gaps and, because of the pandemic, some companies

Visit www.mibiz.com

Organizational Culture & Communication Training: Poor communication lies at the root of many problems. How do your team members communicate with one another? This eight-hour training will focus on improving and understanding communication across teams and your organization’s culture.

THE SUBJECT MATTER EXPERTS Ken James, Director of Inclusion With nearly three decades of experience spanning a multitude of industries including non-profit, health care, and higher education, Ken is driven by his passion to initiate cross-cultural dialogue and advance diversity, equity, and inclusion. As Director of Inclusion for the Grand Rapids Chamber, he combines his knowledge and lived experiences to deliver creative, intentional programs to employers and their stakeholders. Ken is an alumnus of Kentucky State University and Grand Valley State University, from which he holds a master’s in public administration. Most recently, he earned Executive Certification in Diversity Coaching through the CoachDiversity Institute in partnership with Howard University School of Business and is recognized as an Associate Diversity Coach (ADC). Emily Smith, Inclusion Program Manager A native of New Mexico, language, culture, and diversity have influenced Emily from an early age. She is an Advanced Certified Cultural Intelligence (CQ) Professional and Unconscious Bias (UB) Certified Professional, and utilizes these skill sets to further the work of equity and understanding through a culturally intelligent, global, human-centered lens. In her role as Inclusion Program Manager with the Grand Rapids Chamber, Emily supports DEI training and affinity programs designed to create a greater sense of belonging for business professionals in the West Michigan community. She is an alumna of Colorado State University and Aquinas College. If you are interested in engaging in a DEI training program or assessment, please contact Omar Cuevas, Vice President of Sales and

Marketing for the Grand Rapids Chamber (omar@grandrapids.org). ABOUT THE GRAND RAPIDS AREA CHAMBER OF COMMERCE

foster an inclusive and welcoming community, and advance a vibrant business environment that nurtures economic prosperity for all. Learn more at www.grandrapids.org.

The Grand Rapids Area Chamber of Commerce leads the business community in creating a dynamic, top-of-mind West Michigan region. Together with over 2,500 member businesses, we work to expand the influence, access, and information required to actively encourage entrepreneurial growth and community leadership. We offer the connections, resources, and insights needed to develop strong leaders, engage a diverse workforce,

MiBiz / MAY 10, 2021

FINANCE

Michigan banking groups back federal cannabis bill By MARK SANCHEZ | MiBiz msanchez@mibiz.com

broad support for the SAFE Banking Act among the banking industry and financial institutions that want to serve what has become a nearly $1 billion ederal legislation advancing through industry in Michigan. Congress this session could lead to more “Chances are good, except if they decide they banks serving marijuana-related busiwant to go for the more aggressive legislation,” nesses in the U.S. and Michigan. Tierney said. “We’d all like to just see the SAFE The Secure and Fair Enforcement (Banking) Act. It would be fine if we could provide (SAFE) Banking Act passed the U.S. House in April on a services to the cannabis industry without any fedbipartisan 321-101 vote. The bill sits in an evenly divided eral repercussions. We don’t need to have marijuana Senate now under the slim control of Democrats who legalized on the federal level.” need to decide whether to push forward with the bill, Reintroduced in March after failing to gain pursue outright marijuana legalization or couple the enough support in the prior congressional term, issue with broader criminal justice reform. the SAFE Banking Act would prohibit federal agencies from penalizing financial institutions that serve marijuana-related businesses in states where it’s legal. Since marijuana remains illegal at the federal level — despite legalization in some form in 38 states, including Michigan for medical and recreational use — banks and credit unions involved with the industry must comply with rigorous requirements. The regulatory burden, along with concerns Corkery Hendricks Hufnagel about their reputation, keep most banks and Mike Tierney, president and CEO of the credits unions from getting involved in the industry. Community Bankers of Michigan, remains “very “There are a lot of banks that don’t want to optimistic” the SAFE Banking Act can gain enough regardless of whether it’s legal,” Tierney said. “That support to pass the Senate with the 60 votes needed may change once it’s legal, but there are bankers to prevent a filibuster. that just don’t feel it’s an industry they want to serve However, he is concerned about the potential for right now. Some just don’t feel it’s a benefit to their Democrats to pursue full legalization while there’s community.”

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MAY 10, 2021 / MiBiz

State-legal industry In Michigan last year, medical and recreational marijuana generated $984.7 million in sales, according to the state Marijuana Regulatory Agency. Through the first quarter of 2021, sales totaled more than $360 million, including $97.5 million in March alone for recreational marijuana. Tierney estimates that about 10 banks in Michigan now serve the cannabis industry. The Michigan Credit Union League estimates a similar number of its members do it as well. More credit unions would like to serve marijuana-related businesses if the SAFE Banking Act passes, Michigan Credit Union League CEO Patty Corkery said. Passage of the law is “a drum we’ve been beating for a while,” Corkery added. “The appetite is definitely there because it’s what their communities are demanding and what their businesses are demanding. Even those that might not necessarily have a strong desire to get their feet wet in cannabis, that’s what they’re hearing from their communities and their businesses, and they’re going to roll up their sleeves and look into it,” Corkery said. “The bottom line is it is legal in our state and we need to support the businesses that are engaged in legal activities.”

Federal guidance The financial institutions that serve the marijuana industry do so under 2013 guidance from the Financial Crimes Enforcement Network, or FinCEN, an organization in the U.S. Department of the Treasury. The guidance offers financial institutions a pathway to serve a marijuana-related business without violating the federal Bank Secrecy Act and anti-money laundering regulations. The guidance includes requirements for a much higher level of due diligence when taking on a customer in the cannabis industry and ongoing monitoring of the business to ensure its legitimacy and adherence to state laws. A bank also must monitor the company’s sales for any sudden spikes and determine why that occurred. Among the banks serving the marijuana industry is Mason-based Dart Bank, which has four branches in Eaton and Ingham counties plus seven loan production offices that include Ada, with $622.1 million in total assets. When Michigan voters approved recreational marijuana in 2018 after medical use had been allowed for a decade, Dart Bank “looked at the landscape out there and were seeing businesses that couldn’t even be served,” CEO Bill Hufnagel said. The bank also heard from state regulators and local elected officials who worried about the public safety aspects of purely cash businesses. Executives decided to work with regulators to learn about what was required to provide marijuana-related businesses a full array of banking services, from deposits to wire transfers to commercial loans. “We’re a community bank, so we’re here to serve the communities that we work within,” Hufnagel said. Dart Bank has invested heavily to build up the internal systems and staff needed to monitor marijuana clients and handle the high federal regulatory and reporting requirements, he said.

Building relationships, ‘lot of caution’ Serving the marijuana industry differentiates Dart Bank from competitors “of all sizes, shapes and forms,” and drives growth and deposits, Hufnagel said.

“We took this as an opportunity to build relationships with people who weren’t being served and to do something different for them,” Hufnagel said. “This is not a quick, flash-in-the-pan type of business for Dart Bank. This is something we’re hoping to continue to grow, not only in the state of Michigan, but with our partners that are going to grow into other areas, and we want to continue to grow with them and to offer them the service. This is a business line that we’re dedicated to.” Nationwide, there were 515 banks and 169 credit unions providing service to marijuana-related businesses at the end of 2020, according to an April quarterly report by FinCEN. In a recent survey by the industry trade publication Bank Director, just 7 percent of responding CEOs, directors and chief risk officers said their bank presently serves marijuana businesses. Another one-third were unsure if their bank was willing to do it, and 34 percent said they had at least discussed it but do not yet work with those businesses. The survey results indicate “there is a lot of caution around” banking marijuana-related businesses, said Emily McCormick, Bank Director’s director of research. That caution could stem from present U.S. Department of Justice guidance that leaves enforcement of the federal prohibition on marijuana up to the discretion of local federal prosecutors. If a U.S. attorney decides to prosecute a local marijuana business, a bank could lose all of the collateral that backs the company’s loan, Tierney said. “Banks have not been wanting to lend to the industry because you didn’t want your collateral confiscated,” he said. “So, financing then becomes very difficult.” Bob Hendricks, an attorney at Warner, Norcross + Judd LLP who chairs the Grand Rapids law firm’s Cannabis Industry Group, senses “that there is a fair amount of pent-up interest, not only in the small banks but in the larger banks, to providing banking services to what clearly seems to be an emerging industry with some serious legs and some serious growth potential.” However, that doesn’t mean that banks and credit unions will flock to the industry, Hendricks said. While passage of the SAFE Banking Act in the Senate — and President Biden’s signature — could bring more and larger institutions into the fray, the high level of due diligence, report requirements scrutiny, compliance costs and risk would remain. That will keep some financial institutions away, he said. The continuation of a black market will also act as a deterrent for some banks and require great caution when taking on a marijuana client, he said. “It’s not going to be like banking a donut shop,” Hendricks said. “This still is an industry coming out of the black market.” To any bank that’s considering serving marijuana-related businesses, Hufnagel at Dart Bank advises them to make sure they fully understand the federal requirements and have the systems and staff needed to comply. “Be prepared for what you’re going to be faced with,” Hufnagel said. “It’s an extremely difficult business and you have to be willing to put the effort in both the infrastructure and technical side.” However, Hufnagel opposes the SAFE Banking Act. Dart Bank has made the investments and took on a large risk to serve the industry. The law could bring not only competition, but players that would not “operate in a way that’s going to be in the best interests of everything that we’re doing” and cause problems for the entire industry, he said. Visit www.mibiz.com

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

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

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

Investing in a Solution The reconfigured space features an open concept “main street” design where workspaces are aligned to the “main street” areas, and include booths, huddle rooms, and ‘hotel’ offices to meet a variety of needs and support the company’s open, collaborative culture.

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

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

Ideas for maximizing your space:

“COVID was an oddly perfect time to reconstruct since the office was empty. Throughout the build, we evaluated our short and longterm needs and developed solutions for both. As a result, we’ve gained an efficient workspace that better accommodates our growth. We’ve reduced unnecessary furniture and incorporated open, collaborative workspaces that maximize our space. Using glass as barriers instead of walls, we achieved a more open, cohesive office without compromising the safety or productivity of our employees. Our office is now a space where our employees want to be, and it accurately reflects our company’s

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

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

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

AWARD WINNER SPOTLIGHT

LOW VOLTAG E

GRAND VALLEY AUTOMATION, INC.: VAN DYKEN MECHANICAL CORPORATE HEADQUARTERS

2515 ALPINE AVE NW, SUITE C GRAND RAPIDS, MI 49544 ABCWMC.ORG

Visit www.mibiz.com

PROJECT Van Dyken Mechanical Corporate Headquarters LOCATION Grandville BUDGET $250,000 ARCHITECT Mathison | Mathison Architects COMPLETION July 2019 TEAM Project Manager: Scott Wiersma Superintendent: Cory Tate

The office renovation project for Van Dyken Mechanical involved a complete renovation of the former office space and conversion of the adjacent warehouse into a streamlined office headquarters. Grand Valley Automation designed, programmed, and installed Schneider Electric EcoStruxure controls along with a plethora of Security interfaces, intercoms, sensors, and cameras.

MiBiz / MAY 10, 2021

FOCUS: DIVERSITY, EQUITY AND INCLUSION EQUITABLE DEVELOPMENT Continued from page 1

“Many made statements that were sincere, but at the same time, they may not know how to make those changes they promised.” Without minority representation in meaningful leadership roles at organizations, the act of sincerely wanting to be better isn’t enough and is more like “the blind leading the blind,” Robinson said. Robinson and other business leaders of color told MiBiz that — for the most part — they have yet to see meaningful changes in the way West Michigan institutions address racism, implicit bias and creating equity for minority-owned businesses. “In Grand Rapids, we have a lot of well-meaning organizations that aren’t equipped to deliver results our community needs,” Robinson said. “Funders keep funding those that keep showing themselves to be ineffective. A lot of organizations have raised millions of dollars for equity goals, and a large part of that never makes it to a Black organization’s business or budget. A lot is absorbed by white organizations that say they want to do the work.” Bing Goei — the owner of Eastern Floral and the Goei Center who serves on the board of the West Michigan Asian American Association Inc. — echoed Robinson’s comments. The lack of minority representation in leadership positions remains a key barrier to progress, he said. While many companies have funded studies and formed committees, they often fail to invest the time and money necessary to work to solve racial equity issues, Goei said. “We can do all the reports and do all these studies and create all these events, but what are you willing to invest to make it happen?” Goei said. The past year has brought a flurry of workgroups and pledges involving diversity, equity and inclusion among the business community. Last month, the Grand Rapids Area Chamber of Commerce announced Black, Asian and Latinx business councils within its organization to better serve minorityowned businesses, which Goei called a “positive step.” “I’m still waiting for what investments will be made to make sure this becomes a successful program,” Goei said. “None of us are asking for a handout, we’re asking for an opportunity to provide the skills and talent we have without being questioned and without being placed in a stereotype that our history has put us in.” The city of Grand Rapids in particular had work to do before the pandemic. In 2015, Forbes ranked Grand Rapids as the second-worst U.S. metropolitan statistical area economically for African Americans. According to a 2019 study compiled by personal finance website WalletHub, Grand Rapids ranked 101 out of 182 cities across the nation for Latino entrepreneurs.

MAY 10, 2021 / MiBiz

“Businesses of color and women-led businesses were already having a hard time before COVID-19 and were experiencing unique challenges,” said Alita Kelly, co-founder of Southeast Market on the city’s south side. “I’m hoping we’ll see some continued support after COVID-19 in a way we didn’t before because it shouldn’t take these national protests for that to happen.”

Efforts being made However, local officials clearly see a role in solving these long standing issues, and are taking varying approaches to do so. The Right Place Inc., the city of Grand Rapids, and the Grand Rapids Chamber are all pursuing goals or initiatives to increase diversity, equity and inclusion in their organizations. The Right Place — which serves as the economic development organization for the greater Grand Rapids region — recently partnered with several foundations to fund a Brookings Institution study to craft a vision for inclusive growth in the local economy. Recommendations formed out of the study include creating more quality jobs, having more concerted efforts around building diverse business ownership, and doing more research around inclusive economic growth, said Tim Mroz, senior vice president of strategic initiatives at The Right Place. That means avoiding dead-end opportunities in workplaces and building connections with workforce development agencies, Mroz said. Growing existing minority-owned businesses is another key priority that emerged from the study. Prior to the COVID-19 outbreak last year, The Right Place initiated the New Community Transformation Fund LP, a venture capital fund that will invest nationally in minority-owned companies. The fund, which went public in January 2020, has raised nearly $10 million of a $25 million goal and is close to deploying its first investments. The fund aims to invest in businesses that are either minority owned or have the potential to be minority owned, Mroz said. If a company that is going through an ownership transition identifies a minority professional to buy the business, it could tap into the fund to help make the transition successful, Mroz explained. “We are also in the final throes of developing a region-wide minority business directory on our website,” Mroz said. “One of the challenges we’ve heard from purchasing professionals is they want to or are looking to diversify their overall contracting services.” The growing list, which will be made available to businesses, will include vendors such as catering and printing services as well as suppliers of various commodities. Identifying minority owned companies has become easier since business owners applying for COVID-19 relief funding have the option to self-identify their race and other

“I’m hoping we’ll see some continued support after COVID-19 in a way we didn’t before because it shouldn’t take these national protests for that to happen.” — ALITA KELLY co-founder, Southeast Market

demographic information as part of the process, he said. The city of Grand Rapids has a similar initiative to bolster its directory of minority, women, and micro-local contractors for developers seeking tax incentives on projects. Developers complete an inclusion scorecard that includes setting aspirational goals for diversity in contractors if they seek tax incentives. Although the city can’t legally mandate developers follow diversity targets on projects, officials hope to aid the process by presenting them with diverse options, said Jeremiah Gracia, the city’s economic development director. “I think we have four or five projects that have utilized this plan and it has been well received and meeting expectations in getting aspirational goals and commitments to building the involvement of diversity among conGoei tractors,” Gracia said. The city is also expected to select a company proposal this month to operate its SmartZone business incubator with the goal of bringing more diversity and equity among tech startups, Gracia said. It’s part of the city’s broader plan to address DEI as it revisits contracts. “If we do our job well with the SmartZone, we should be able to funnel those companies into being investable in the Transformation Fund,” Gracia said. In August 2020, the city also updated its Brownfield Authority policy to intentionally prioritize neighborhoods of focus and projects that involve firsttime developers. Under the new policy, these types of projects can receive up to 100 percent reimbursement for eligible activities to get a development started, Gracia said. “As we were talking with our stakeholders, people were saying they would like to do projects but don’t have the capital up front to do the environmental work,” Gracia said. “This is a policy change that is important for us to educate so people understand and know about it.”

Grand Rapids Area Black Businesses founder Jamiel Robinson. PHOTO BY KATY BATDORFF

Gracia

Kelly

‘Radiate outward’ As institutions work to catch up with DEI initiatives, business leaders like Robinson have formed their own networks to help their communities. Construction on GRABB’s headquarters — which will also serve as an incubator known as District 2012 for Black-owned businesses — is expected to start in July at 2012 Eastern Ave. SE on the city’s south side. “Our ultimate goal is to create wealth and assist Black businesses in creating wealth … in the city of Grand Rapids,” Robinson said. “Our goal is to reduce any barriers to businesses, and one of them is having space available to meet with clients.” Most Black businesses in the U.S. are single member LLCs or smaller startups with few employees, Robinson said. Creating a location that can offer shared resources and a physical space for Black business owners will help them grow so they are scalable, Robinson said. Project organizers are also being intentional by spending at least 75 percent of the design and construction costs with minority-owned subcontractors, he said.

Mroz

Triplett

Black Wall Street Kalamazoo, which serves a similar purpose as GRABB in helping to connect Black business owners with resources, also recently secured its first physical space at 1311 Portage St. in the city’s Edison neighborhood. The nonprofit formed in 2013 with a goal to strengthen the lifespan of Black-owned businesses in the community, said founder Nicole Triplett. Many of the Black-owned businesses in Kalamazoo are startups without physical locations, Triplett said. Her organization’s new headquarters will take away some of the initial overhead for entrepreneurs with shared resources that include office space, wi-fi and printing services. By next fall, Triplett hopes to be running a training space for entrepreneurs out of the location, and eventually set up a marketplace for the businesses in the organization as well. District 2012 and Black Wall Street Kalamazoo have a shared goal to act as a catalyst and a beacon to help the Blackowned business community grow. “We want everything we’re doing internally in that building and hub to radiate outward into the other vacant storefronts in the area,” Robinson said. Visit www.mibiz.com

EXPERT

CARE FOR ALL

By embracing the strength of diversity, the justice of equity and the welcome of inclusion, we become a better workplace and center of healing. At Metro Health – University of Michigan Health, we believe every individual deserves respect, belonging and healthcare rooted in anti-racism and equity. Join one of West Michigan’s Best and Brightest employers. metrohealth.net/careers

At MSUFCU, we believe it is our responsibility to protect and improve the financial health of a community. And that starts with a supportive environment where individuals and community partners are empowered to work together to create a place where we are proud to live and work. From our early years when we operated out of a desk drawer on MSU’s campus to now serving over 305,000 members worldwide, we have a longstanding history of being on the leading edge of social change. To learn more about our initiatives, visit msufcu.org/dei.

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MiBiz / MAY 10, 2021

FOCUS: DIVERSITY, EQUITY AND INCLUSION

Michigan VC industry focuses on cultivating more diversity in staff, investments By MARK SANCHEZ | MiBiz msanchez@mibiz.com

ichigan’s venture capital industry made modest strides in the last few years to create greater diversity within its ranks and in the number of startups run by women or minorities that receive investments. Now the industry looks to invest further in diversity, equity and inclusion. A DEI committee the Michigan Venture Capital Association established intends to cultivate ways to drive much more diversity in the sector. The group wants to elevate diversity and craft core principles under which association members operate in an industry that has traditionally been dominated by white males.

to elevate (diversity and inclusion) into the core,” Glaza told MiBiz. “There is a passive wanting things to change, but the events of the past year helped put the impetus to say, ‘The time is now to show a commitment to take action and to capitalize around the momentum around change.’”

Building trust

Data in the MVCA’s 2021 research report indicate Michigan’s venture capital industry has made some progress in recent years, although Glaza and others say it’s not nearly enough. At the end of 2020, just 15 percent of the 165 startups in Michigan backed by venture capital were led by a person of color, 12 percent were led by women and a mere 1 percent had a CEO who identified as LGBTQ. Of the $287 million in venture capital invested in 2020 in 88 startups in Michigan, $57.8 million went to a company led by a person from an underrepresented group. In terms of talent, just 17 percent, or 14 of the 81 venture capital professionals working in Glaza Tabben Welch Topouzian Michigan last year, were The MVCA has three goals: increase diversity women, compared to 21 percent across the U.S., where among venture capital professionals working in more than half of the population is female. An equal Michigan, grow investments in startup companies number of venture capital professionals in the state led by a founder from an underrepresented group, last year were a racial minority. That compares to 2017, and drive greater diversity among the talent at portwhen only five of the 87 venture capital professionals folio companies “from the boardroom down,” said in the state were women and seven were minorities. Patti Glaza, the executive vice president of Invest While the industry has become a little more Detroit who chairs the MVCA’s DEI committee. diverse than it was a few years ago, “there’s a lot The association and its members have priorimore that needs to be done,” said MCVA Executive tized greater diversity in recent years. The social Director Ara Topouzian. unrest of 2020 and the COVID-19 pandemic that Without greater diversity within its ranks and generated greater awareness of existing economic its investments, “there’s a lot of great deals being inequities in areas such as access to health care “put missed out on,” Glaza said. more urgency to formalize the path,” Glaza said. As an early-stage investor, Invest Detroit has Research has shown the startups that are diverse driven diversity by following the ideal that “your and funds with diverse talent and boards tend outinvestment team really has to reflect the commuperform companies that lack diversity, she said. nity you’re serving and that you want to invest in,” “The venture capital industry historically has she said. By “being very intentional,” Invest Detroit very much suffered from a lack of diversity, and has accelerated diversity and built an investment underrepresented entrepreneurs have really faced team where about one-quarter of the staff are people barriers of access to capital, so the MVCA wants of color and 25 percent are women.

“Historically, you have to break that chain because it’s easy to want to invest in people that look like you, and it’s not a conscious bias. It’s ‘Oh, we went to the same school’ or ‘grew up in the same neighborhood’ or ‘did the same activities,’ versus truly building diverse teams with diverse experiences that can find and connect and develop trust with entrepreneurs who come from different experiences,” Glaza said. “I think we can make a dent really quickly if we can build some of that trust by having more of these diverse teams.”

Tipping the scales Inequities in access to capital have led to the creation of new funds across the U.S. that are focused on supporting minority entrepreneurs. In Michigan, the effort to improve access to capital for minority entrepreneurs led to the formation of two new funds last year. The Right Place Inc. in Grand Rapids led the formation of the New Community Transformation Fund LP that plans to invest in growing, secondstage businesses owned by people of color. The fund also will invest in companies that are going through transitions as owners retire and a person of color acquires the business. In Detroit, a group of five Black professionals formed and launched Commune Angels last summer to invest in companies across the U.S. O r ga n i z e r s o f t h e Ne w C o m mu n i t y Transformation Fund are “super close” to raising $10 million, said Managing Partner Skot Welch. At that point, the fund plans to begin making investments, with the first three deals coming from West Michigan. Companies outside of the region will have to move here to receive an investment. The New Community Transformation Fund continues to draw strong interest from prospective investors who share the organizers’ vision, Welch said. Prospective investors have called to say they wanted to “circle back” to talk to the fund’s organizers about their “significant traction,” Welch said. “Now people are looking at the fact that we’re so close to that $10 million. They say, ‘I’d like to be that organization that tips it over,’” he said. “We’re just trying to look at who the person or that organization is to help tip it to the $10 million, because that sets a lot of things in motion.” Given what’s occurred in the last year, “there is less of a need to explain why it’s needed,” Welch

“There is a passive wanting things to change, but the events of the past year helped put the impetus to say, ‘The time is now to show a commitment to take action and to capitalize around the momentum around change.’” — PATTI GLAZA EVP of Invest Detroit

said. “We’re living within the case study that frames why we need such things.”

‘The face of America’ A number of banks active in West Michigan also committed to DEI initiatives over the past year. For example, Bank of America in June pledged $1 billion over four years, an amount later raised to $1.25 billion over five years, to a diversity initiative. Bank of America’s $100,000 in seed money to cover startup costs for the New Community Transformation Fund came out of that commitment. Driving economic growth and prosperity for all means “that the people who are leading and owning the businesses represent the true look of the face of America,” said Renee Tabben, Bank of America’s Grand Rapids market president who serves on the New Community Transformation Fund’s five-member board of directors. “This idea of having a way to get capital to those that are going to create that healthy, diverse, vibrant economy is critical,” Tabben said. “We as a region are not going to be able to grow at the pace and the success rates of other regions that do have that diverse leadership and ownership.” The New Community Transformation Fund aims to eventually raise $25 million. Tabben has been contacted by Bank of America peers in other markets across the U.S., including in Miami, Denver and New Mexico who are interested in replicating the model in their community, she said.

Committed to diversity, equity and inclusion in everything we do davenport.edu Business | Technology | Health | Urban Education

MAY 10, 2021 / MiBiz

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Brownfield Redevelopment: Good for the Environment and the Bottom Line

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

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

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

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

Before

After

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

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Industry 4.0 Opportunity Assessment aims to jumpstart small manufacturers advanced manufacturing journey As advancements in Industry 4.0 surge ahead, the pace of development and sheer scope of technology often leaves small- and medium-size manufactures without the expertise and resources to forge a clear path forward. Industry 4.0 is normally discussed in terms of large operations, with budgets and staff dedicated to implementing advanced manufacturing technology. By comparison, many smalland medium-size manufacturers lack the dedicated staff to even begin their Industry 4.0 journey and come away from their research with far more questions than answers. To aide small- and medium-size manufacturers in beginning their Industry 4.0 Journey, the Michigan Manufacturing Technology Center – West (The Center - West) has partnered with the Michigan Economic Development Corporation (MEDC) and Automation Alley to offer a free Industry 4.0 Opportunity Assessment. The assessment – the costs of which are underwritten by the MEDC – identifies key bottle necks in a manufacturer’s operation and provides tailored advanced manufacturing solutions that make business sense for each company’s specific needs. “This is literally a brass-tacks conversation,” said Justine Burdette, regional director of The Center-West and vice president of technical services at The Right Place, Inc. “This is not all about robots and automation. We are bringing a more holistic approach to this.” For Copemish-base M R Products Inc., the assessment allowed the manufacturer of plastic chains, plastic stanchions and other products, to explore technology it otherwise would not have had the time or capacity to access. “For us, Industry 4.0 and all of the new technology is a little beyond our capabilities,” said Ryan Schultz, COO of M R Visit www.mibiz.com

Products, who until a year ago also served as the company’s sole IT person. “We never had the capabilities in-house to really go after the next step. What this assessment did was identify the weaknesses that are most important to us and how we can attack those weaknesses.” The Industry 4.0 Opportunity Assessment consists of two parts. First, manufacturers answer a set of questions pertaining to their business and manufacturing process, such as cost of goods sold, run time, number of employees and other similar questions. The second portion of the assessment includes an on-site walkthrough by two experienced members of The Center-West staff who tour the facility and analyze each company’s processes and procedures. “They’re really getting a feel for not only your processes as a manufacturer and where you’re at in your manufacturing journey, but also where you are at in your Industry 4.0 journey,” Burdette said. Following the assessment, The Center-West issues a comprehensive report, customized to the individual manufacturer, which identifies specific pinch-points in the manufacturer’s operation. The report then offers recommendations for which specific Industry 4.0 and advanced manufacturing technology are best suited to address those issues. Most importantly, the assessment also provides cost breakdowns and estimated ROI figures for the manufacturer depending on what solution they choose.

the following week. This led to data that was out of date and lagged current production conditions. The Center identified several solutions to this bottleneck through the assessment and followed through with connecting M R Products to the appropriate vendors. Now, M R Products uses tablets and software to collect and review production data. Instead of week-old data, the company has easy access to daily reports which they can then use to immediately address issues as they occur. “I’m thrilled with the assessment,” Schultz said. “It was a little scary going through it. No one wants their faults picked out... We knew we were low in some areas and they definitely told us where we needed help. They really put it into perspective what it was costing us by not moving forward.”

SCHEDULING AN ASSESSMENT Please contact The Center-West to schedule a free Industry 4.0 Opportunity Assessment with the information below. Phone: 616.301.6247 Email: thecenter@rightplace.org www.thecenterwest.org

For M R Products, the assessment identified solutions for inefficiencies in production data tracking. Previously, the company created large, complex spreadsheets which would go through several rounds of data entry and review with different employees before a report was issued – often MiBiz / MAY 10, 2021

FOCUS: DIVERSITY, EQUITY AND INCLUSION

New Pride Center leader prioritizing racial diversity, serving younger generations PHOTO BY DANIEL JAMES - UNSPLASH

Deadlines approaching for ballot measure to expand state LGBTQ civil rights By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

ichigan lawmakers are running out of time to pass legislation expanding civil rights protections for the LGBTQ community before a planned ballot measure with wide business support is potentially approved for the November 2022 election. The Secretary of State is now validating signatures for Fair and Equal Michigan’s ballot initiative to expand the Elliott-Larsen Civil Rights Act to include protections based on sexual orientation and gender identity. The campaign submitted more than 480,000 signatures in October, and needs 340,000 to make it on the ballot. The state could issue a ruling on the signatures by late spring or early summer, according to campaign officials. If approved, the measure would go to the State Board of Canvassers for certification to get on the November 2022 ballot. The state Legislature would then have 40 days to adopt the proposal or send it to voters. It could also put forward a competing proposal. Campaign organizers expect to know definitively within the next couple of months whether the question will be on November 2022 ballots. Late last month, the Fair and Equal Michigan campaign announced support for the initiative from chambers of commerce across the state, including in Lansing, Flint, Jackson, Midland, Saginaw and Traverse City. Business advocates in Southwest Michigan, Detroit and Ann Arbor previously endorsed the proposal. However, the Grand Rapids Area Chamber of Commerce is still holding out hope for a legislative approach and is at this point withholding support for the ballot measure. “We are supporting a negotiated, legislative solution,” said Andy Johnston, vice president of government affairs with the Grand Rapids Chamber. He cited concerns about the Republican-held Legislature potentially putting a competing ballot question forward, as well as potential legal challenges to the ballot proposal if it’s approved by voters. “To avoid that divisiveness, the Grand Rapids Chamber has been trying to push a legislative solution on this issue,” Johnston said. While campaign organizers say the measure is on solid legal footing if approved, they don’t discount the potential for lawmakers to obfuscate the ballot measure. “Fair and Equal Michigan very much wants a legislative solution as well,” said campaign spokesperson Josh Hovey. “The very first goal of putting

MAY 10, 2021 / MiBiz

“If any business organization does want a legislative solution, we welcome them to encourage the Legislature to take this up now. But the window for a legislative solution is going to close very, very quickly.” — JOSH HOVEY Spokesperson, Fair and Equal Michigan

this on the ballot is to force the Legislature to come to a vote. And if any business organization does want a legislative solution, we welcome them to encourage the Legislature to take this up now. But the window for a legislative solution is going to close very, very quickly.” It’s also unlikely that the Republican-held Legislature would be successful — as it has been in years past — at adopting the proposal and then amending it to include religious exemptions, as some top lawmakers have previously advocated. That approach would likely earn a veto from Gov. Gretchen Whitmer. “Gov. Whitmer is the one safeguard we have against the adopt-and-amend strategy,” Hovey said. The Grand Rapids Chamber is among a growing number of business advocates and companies supporting an Elliott-Larsen expansion, which they argue is about fairness and also attracting and retaining talent. The ballot measure is backed by dozens of companies including Herman Miller Inc., Founders Brewing Co., Blue Cross Blue Shield of Michigan, Consumers Energy, Kellogg Co., Steelcase Inc. and General Motors, to name a few. Even with that widespread support, the Chamber’s position suggests there’s still some disagreement about how to get it done. “When the hourglass completely runs out on a legislative solution, we’ll take up whether to endorse the (ballot) proposal and figure out whether it’s the best option to advance this discussion,” Johnston said. The campaign is aligned with that approach, Hovey said, but noted that time is running out. “Also like the Grand Rapids Chamber, we’re very much looking for a legislative solution,” Hovey said. “But the time for that is now.”

A Q&A with Jazz McKinney, executive director of the Grand Rapids Pride Center Jazz McKinney started as executive director of the Grand Rapids Pride Center on March 15 after previously serving as the organization’s interim director and chair of its Transgender and Gender-Non-Conforming Committee. Originally from Detroit, McKinney — who uses they/them/their pronouns — is a Grand Valley State University graduate and longtime Grand Rapids resident. McKinney’s main goal is to make the Pride Center a more inclusive space for all members of the LGBTQ community by following through with the organization’s Community Accountability Plan that was created last year to address claims of racism within the organization. McKinney spoke with MiBiz about their plans for the organization and serving younger and more diverse generations. What is your main focus as you start in this new role? My vision is to truly fulfill our mission, which is to serve all of our LGBTQ community, not just white people. My vision is to make the Pride Center more accessible to people of color and people with disabilities, and making it more accessible even with the internal things. Within the LGBTQ community, there also tends to be phobias around some of the identities, like biphobia and transphobia, so I’m really just trying to bring us all together as LGBTQ people and make sure we’re serving our most marginalized population. Can you discuss the Community Accountability Plan and any progress that has been made since it was adopted nearly a year ago? Our goal when we put the plan together was to actually complete all of those goals. I really believe in making sure things are sustainable. It would have been really easy for us to plow through that list and say, ‘Yes, we completed that,’ but there are things that are still pending on our list because even though we’ve been working on them, they’re not done. Companies and economic development organizations have placed greater emphasis on diversity, equity and inclusion in order to attract talent. How important is it to members of the LGBTQ community that where they work or live is inclusive of their identity? I think it’s huge. Even in the last month I’ve had three people reach out to me asking if I could help find them an employer that is LGBTQ-freindly. I can’t hire the entire LGBTQ community to work for me — we have to make sure those other places are a good fit and a lot of that is diversity of thought. If you don’t hire any LGBTQ people, then it’s not always that the people who work for you are neccessarily anti-LGBTQ, they just might not have been exposed to it so they don’t know the nuances. I remember applying to a previous job that I had and they were super excited about my LGBTQ history and then I went to sign my employee paperwork and it didn’t have my gender listed. They had a face palm moment and didn’t realize that, even though they called themselves allies and an LGBTQ inclusive workforce. What else could organizations and companies be doing to be more inclusive of the LGBTQ community? Outside of policy, I would also just say education. Terminology and how you treat people and your definition of family. A lot of employers have a bereavement policy that says you can only take bereavement leave if your spouse or immediate child of those people dies. Gay people were only allowed to marry in 2015. Most employers have LGBTQ people in their arena and they might just not know it because maybe they haven’t made the space comfortable enough for people to come out. It’s about having the opportunity and having that space, so employee resource groups can help with that as well. Do you think the way people use the Grand Rapids Pride Center is changing? What do you want it to look like? The younger generation is becoming even more diverse and inclusive, even in terminology. When I was growing up, you were either gay or you were lesbian, whereas now even as executive director, I’m still constantly learning new terminology. These young kids are learning more about intersectionality, too. People used to think you had separate issues as a Black person and as an LGBTQ person. All of those different things can and do interact with each other. That’s why I took over, to really push us in that direction of the intersectionality piece. Interview conducted and condensed by Kate Carlson. Courtesy photo. Visit www.mibiz.com

Return-to-Office: 5 Tips for Developing Your Come-Back Strategy

s the end of the pandemic moves closer every day, many office-staff employers are debating what the future of their work strategy will look like. Although Upwork’s Future Workforce Pulse Report estimated 26.7% of Americans will continue to work remote through 2021, many employees are itching to get back into the office. And, on the other hand, many are not. As an employer, you are tasked with developing a return-to-office strategy that appeases all levels of employees, maintains compliance, and serves the needs of your organization. Lighthouse, An Alera Group Company, a local leader in employee benefits consulting, offers five things to consider when developing a return-to-office strategy: 1. Establish Your End Goal: How do you want to see your team engaging with in-office vs. remote work when all is said and done? Immediately following the mass office closures in early 2020, “return to normal” was the goal for most employers – leadership was trying to figure out how much longer before we can all go back to how things used to be. Now that the shock of the pandemic has worn off, many employers have had time to reconsider their work from home practices and what makes sense for their workforce going forward. When strategizing for your own return-to-office plan, establish on the front end what makes sense for your company post-pandemic. Do you need everyone back in-person 100% of the time? Or would introducing a flex time schedule be beneficial for your operation and employees? Determine this now and use this goal to inform the rest of your strategic decisions going forward. 2. Honor Your Core Values: In determining your end goal and the decisions you are making throughout the process, you don’t have to do what the “big guys” are doing. Facebook, Google, and Adobe were quick to announce

plans to permanently embrace remote work. Tech companies of the like have the most to gain financially from a remote workforce and, therefore, have a high interest in encouraging companies to stick with the WFH model. Know what your competition and the rest of the industry is doing, but your organization has its own people, culture, and business objectives which should be your primary influence in determining your own return-to-office game plan. 3. Use Technology Wisely: Establishing your end goal first and keeping your core values front and center will help determine your technology use going forward. Many organizations found technological solutions for remote work far exceeded their expectations at the beginning of the Stay Home order. However, leaders should be careful not to let technology capabilities be the primary influence in determining a come-back strategy. Just because you have the technology to make remote work more efficient does not mean remote work is the most efficient. Consider what outputs will be sacrificed should you implement too much remote work technology solutions and determine if that is a price you are willing to pay. Additionally, once you determine the appropriate technology use going forward, set clear service standards. Is it okay to take virtual meetings from a coffee shop? Are there professional attire guidelines that should be followed? Make the expectations clear from the start. 4. Have Patience: If we have learned anything this year, it is that things change quickly. It is important not to set too many hard and fast expectations that could easily be altered by the next regional outbreak or even a changed mind. Consistent and transparent communication is necessary, but formal return-to-office strategy announcements should be well thought out and actionable. Many

workplace cultures are already relatively fragile due to the unknowns and financial unrest of the last year. It can add further stress to announce a return-to-office plan prematurely, upsetting the portion of your workforce who wants to stay at home, then not being able to stick with the announced strategy due to unanticipated outside factors. 5. Leverage Leadership: With today’s fight for top talent retention, understanding where your employees stand on the matter is key. Often, survey responses are emotionally charged and do not always reflect the true sentiments of the employee population. Instead, engage in frequent and honest conversation with management about how their teams feel toward their current production levels, their concerns about in office work, and their expectations for returning to the office.

For more information about strategizing your return-to-office plan, contact Zachary R. Haan, at Lighthouse, An Alera Group Company.

Zachary R. Haan Senior Account Executive zhaan@lighthousegroup.com 616.455.9286

The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such. Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice.

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MiBiz / MAY 10, 2021

CLQ - COMMERCIAL REAL ESTATE LENDING

Commercial real estate lending remains solid as some sectors outperform others By MARK SANCHEZ | MiBiz msanchez@mibiz.com

Mark Ansara, managing principal and senior vice president at Advantage Commercial Real Estate Services LLC in Cascade Township. “I think it’s still ank lending for commercial real estate fluid. There’s just a few more hurdles you have to and development held steady through jump through to make it happen.” the first quarter as some sectors expeLenders on a spec-built project, for instance, rienced high demand and others that wanted 20 percent down before the pandemic remained somewhat soft as the COVIDnow require 25 percent or more “depending on the 19 pandemic surpassed a year. asset’s location, how old it is and the leases in place,” Ansara said. Retail projects not located in a prime corridor that previously required 50 percent to 70 percent pre-leasing now need “more like” 70 percent to 80 percent, he said. “If you’re not rock solid 70, 75 percent pre-leased or leased then under construction, it’s going to be a tough sell to a bank,” Ansara said. “A real tough sell.” Orion Construction Co. President Roger Rehkopf describes a lending market for conAnsara Rehkopf Rivette struction that’s “a little more on the conservaMultifamily housing and manufacturing are the tive side” and a “little cautious” on some projects, hot sectors right now while hospitality and restaualthough he has not seen much change in underrant industries lag. Commercial real estate experts writing standards. say that accessing credit has not been a problem for “They just want to make sure everything is ready projects or transactions, although some banks are to go, and when you make your commitment to have doing a little deeper due diligence, asking more quesso many units done by a certain date, you’re there,” tions or upping pre-leasing and other requirements. Rehkopf said. “Banks are still lending, (but) everything’s just Part of that conservativeness on construction under a fine-tooth comb to make sure the borcomes from a tight supply and rising lumber prices rower has the ability to pay those funds back,” said that could affect building, he said.

“There are only so many commercial lenders in this world and they were all busy with PPP loans. Now that they’re able to take a breath and focus on future business opportunities, that’s been really refreshing to us.” — NICK RIVETTE Partner, Wirt-Rivette Group

Grand Rapids-based Orion Construction has needed to stock up and store inventory and supplies for future projects to mitigate the rising prices, Rehkopf said. The company presently has a 72-unit townhouse project where “we’re trying to buy as much as we can buy.” “Lumber has gone crazy in the last 12 months (and) probably more in the last six months,” Rehkopf said.

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Independent Bank offers a variety of financing options for equipment, commercial real estate, working capital, and more to ensure that if your business has a need, you’ll have a solution. Contact your local Commercial Banker today! Scott Rowley SVP, Commercial Banking 616.233.7113 | SRowley@ibcp.com IndependentBank.com

MAY 10, 2021 / MiBiz

Nick Rivette, a partner at Saginaw-based WirtRivette Group that has an office in Grand Rapids, said the firm has had no difficulty securing financing through United Bank for the $10 million Legacies Village senior living community it’s developing in Caledonia. Some banks are asking more questions and “delving deeper” in due diligence, “but for us that’s all a good thing,” Rivette said. “Coming out of a crisis like this pandemic has brought that about,” he said. “That tightening of the belt is really a reflection of how we all look at risk having gone through a pretty traumatic 15 months.” Economists have said that bank balance sheets remain in relatively good shape and they have plenty of liquidity for lending. The Wirt Rivette Group has found that banks “have tremendous deposits and right now they’re looking to lend,” said Rivette, noting the firm’s close business relationships with a number of banks and credit unions. Commercial lenders for more than a year have been busy working with customers on federal Paycheck Protection Program loans that may have affected access to credit, and some have pulled back on credit to certain market classes, Rivette said. He sees them now “getting past the immediate crisis” and PPP. “With a 12- to 18-month construction period, we’re going to see a return to normalcy and a comeback there,” Rivette said. “There are only so many commercial lenders in this world and they were all busy with PPP loans. Now that they’re able to take a breath and focus on future business opportunities, that’s been really refreshing to us.”

Different crises, concerns remain Unlike the recession that occurred following the 2008 U.S. financial crisis, the deep economic decline last spring early in the pandemic during stateimposed restrictions was not a banking crisis or a fundamental problem with the economy.

Economist Paul Isely, associate dean at Grand Valley State University’s Seidman College of Business, repeatedly emphasized that difference in a recent economic outlook given to the Cornerstone Alliance in St. Joseph. “This is all about a virus and all about policies around the country that were designed to keep the virus at bay,” Isely said. Still, data from two recent surveys show bankers nationally did tighten up lending when the economy fell hard last year. Among the 188 executives responding to industry trade publication Bank Director’s 2021 risk survey conducted in January, 43 percent said they were concerned their bank was overly concentrated in commercial real estate. Less than 25 percent held the same concern a year earlier in Bank Director’s 2020 risk survey. The concern this year was even greater for larger banks, according to the survey. Nearly one-third of survey respondents were worried about loans to the hospitality industry that includes hotels and restaurants. The survey results are “really indicative of a lot of uncertainty that I think is still kind of lingering a little bit in the environment” nationally, said Bank Director Director of Research Emily McCormick. “We’re starting to see the light at the end of the tunnel, but we’re not quite there yet.” An April quarterly survey of senior loan officers nationally by the Federal Reserve found that underwriting standards overall “remained basically unchanged, while banks tightened standards on construction and land development loans and eased standards on multifamily loans.” “Banks reported stronger demand for construction and land development and multifamily loans and reported weaker demand for nonfarm nonresidential loans,” according to the Federal Reserve’s report on bank lending practices.

‘Pipeline remains solid’ Recent quarterly earnings reports from banks show a solid market for commercial real estate and construction lending. Grand Rapids-based Mercantile Bank Corp., for instance, reported making $135 million in commitments during the first three months of 2021 for commercial construction and development loans that it expects to fund over the next 12 to 18 months. “Our construction pipeline remains solid,” Mercantile Bank President Ray Reitsma said during an April conference call with brokerage analysts. “The funding that we see in the very near future that we can point to some specificity is similar to …. the last couple of quarters.” Mercantile does continue to “monitor the financial condition and performance of credit,” particularly for hotels and lodging, assisted living, restaurants and entertainment, Reitsma said. At PNC Bank, underwriting standards for commercial real estate and construction/development loans have not changed in the past year, Regional President Sean Welsh said. The industrial sector remains strong and multifamily housing is “a very good market,” he said. “Some of the other (sectors such as lodging, office and retail) are probably a little bit on a pause and we’re going to see where they go from here,” Welsh said. “I would say that they’re kind of in a pause at the moment to kind of see if the economy comes back and where the demand goes.” Visit www.mibiz.com

Let’s make dreams a reality. When you’re ready to turn your dream into a reality – you want to work with a partner who you trust and can help you reach that goal. That’s where we come in. At Mercantile Bank, we’re ready to make your dreams happen. Come talk to us, we’re here to help you build what’s next.

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FOOD BIZ

Fruit growers optimistic after two-day frost scare By JAYSON BUSSA | MiBiz jbussa@mibiz.com

focus for a month yet, he has not seen any indicators that would raise major concerns. “You can go out and survey ... take flowers off and cut them in half to see if parts of the flower are damaged,” Kober said. “If it has any brown or discoloration, then it’s damaged or dead and won’t be a viable fruit. You can do that but you’re talking about hundreds of acres so it’s tough to get a good sample size. If the damage is there, then it’s there. The opportunity to mitigate it was weeks ago.”

s West Michigan fruit growers braced for two nights of hard frost in late April that would threaten their already developing buds, many in the industry and downstream economy feared a repeat of a disastrous 2012 season. “That’s what’s in the back of everyone’s mind, though, because it’s just recent memory,” said Jamie Kober, enhancement director at Sparta TownshipTurning point based Riveridge Produce Marketing Inc. The 2012 season was a catalyst of sorts that pushed “Compared to that, though, we’re in great shape.” some growers to bolster their frost mitigation infraNo one can blame growers for having that notostructure — efforts that are paying off in a season like rious year stuck in the back of their mind. In 2012, an this one where those investments are being used to unusual weather pattern that started with 80 degree ward off damaging frost. temperatures in late March was followed by a dam“After 2012, there were a lot of investments aging frost that decimated the crop for fruit growers made in frost mitigation,” Kober said. “We are defiacross the state. The weather wiped out 85 percent nitely seeing the benefits of those. We’re seeing that of Michigan’s apple crop and 90 percent of its tart they’re effective, but they’re also expensive. That cherries. Some West Michigan growers lost their was probably the hesitation prior to 2012 but we’re entire crop that year. seeing those methods are paying off and they’re Kober, whose company manages 860 acres of worth it.” apple orchards on West Michigan’s fruit ridge, said Diane Smith, executive director of Lansingthat the industry hadn’t seen an event anywhere based grower-funded nonprofit Michigan Apple similar to that in the 70 years prior. Association, said that she also saw 2012 as a pivThis year, West Michigan fruit growers faced a otal year. similar dynamic, but not nearly at the same magni“After the devastating crop loss of 2012, growtude. They had to grapple with two days of poteners made significant investments in frost protection tially devastating frost, leading to a couple sleepequipment, such as frost fans and sprinklers,” Smith less nights spent out in the orchards to administer said. “In addition, apple trees have some natural frost mitigation. While it might not have been at the defense mechanisms such as foliage, that help to scale of 2012, Kober said the weather was certainly retain heat. … Apple growers have a long history of concerning. battling Mother Nature in the spring. Growers are “What was unique about this is that we had three part scientist, part artist and part gambler.” days in a row and two of them were in the critical Even though some innovations zone,” he said. “Every event is going might have stemmed from 2012, batto nibble away at the crop. If we had tling frost with everything from fans one of those, we’re not really conFOOD BIZ to sprinklers to helicopters is an old cerned. Two of them, it gets a litNEWS practice. It’s part of doing business tle more concerning and we had — Sponsored by: as a fruit grower in West Michigan, a minor event maybe a few weeks DAN VOS and arguably one of the most stressprior to that, too.” CONSTRUCTION ful aspects. The industry is now creeping COMPANY “This year was outside the ordiout of the danger zone as growers nary (weather pattern),” said Anna assess the damage to their current Wallis, apple production specialist with Michigan crop. While Kober said that the true effects of the State University Extension. “Farmers love to talk two mornings of hard frost won’t be completely in

Microsprinkler systems are one of the few ways fruit farmers across West Michigan combat frost and stop it from damaging the developing buds on their trees. This year, farmers had to contend with an especially hard frost late in April. COURTESY PHOTO about the weather, and it’s always a source of stress. That’s not new.”

Revenue channels The health of a grower’s apple or other fruit crop ultimately drives profitability, making the battle against frost and other variables a high-stakes game. A farmer’s apples, for instance, have three different available channels in the industry. Producing fresh market apples — well-sized varieties with minimal defects — yields the highest profit. Small apples with some defects are sold and used for processing for items such as apple slices and apple sauce. The least profitable among apples are those used for cider and juice products. These available channels ensure that, even if frost wreaks havoc on a crop and hurts the quality of apples, farmers are able to generate some revenue off their crop, even if it’s not optimal. “There is a big (price) discrepancy between market fresh apples and processing apples,” said Wallis, who is based in Kent County, the top appleproducing county in Michigan. “The goal is to produce as much fresh market fruit as you can. But, growers don’t get much control over how they sell their apples. The retailers decide that.” Michigan is the third-largest apple producer in the country behind Washington and New York. The state is home to 14.9 million apple trees spread across 34,500 acres of orchards.

“After 2012, there were a lot of investments made in frost mitigation. We are definitely seeing the benefits of those. We’re seeing that they’re effective, but they’re also expensive.” — JAMIE KOBER Enhancement Director, Riveridge Produce Marketing Inc.

As such a large player in the national and international fruit industry, the rest of the country takes note when Michigan faces conditions that might compromise the condition and quantity of its crop. “If you have had apple slices at McDonald’s, then you have probably had Michigan apples,” Wallis said. “(Michigan apples) are in a lot of main retail avenues.” “We stay in touch with colleagues across the country in order to manage all aspects of apple production,” Wallis added. “This includes major frost damage that other state industries will have to react to. We try to coordinate efforts.”

Coloma Frozen Foods Inc. Coloma, MI

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MAY 10, 2021 / MiBiz

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SMALL BIZ

Portage nail salon confronts broad, industry-wide challenges By KATE CARLSON | MiBiz kcarlson@mibiz.com PORTAGE — For years, Le Nails owner Jennifer Nguyen provided manicures for some of her regulars on a strict two-week schedule. During the COVID-19 outbreak, however, Nguyen’s regulars grew accustomed to more sporadic appointments — or none at all — as the pandemic caused capacity restrictions and temporary closures. Michigan nail salons were mandated to close on March 17, 2020, to help slow the spread of COVID-19, and were allowed to reopen again on June 15. Similar to other businesses in the beauty industry, nail salons are typically limited to indoor settings. Along with customer hesitation to resume in-person activities or a loss of disposable income, or both, the beauty industry found itself among a unique sector of small businesses harmed by the pandemic. In the first five months of the pandemic lockdowns last year, the founder of London-based nail polish retailer Nails.INC told Harper’s Bazaar that the company’s online sales increased 200 percent and U.S. retail sales were up 125 percent compared to the previous year.

People replaced salon appointments with do-it-yourself beauty regimens — a shift still being felt by small business owners like Nguyen. “They are used to living their lives without their nails done,” said Nguyen, who hopes it’s a slow re-emergence to nail routines instead of a long-term trend. “Business has been slowing down. Even though the vaccine came out, I think people are still getting used to getting their nails done again.” Nguyen started working for her cousin at Le Nails in 2007, and has owned the salon since 2012. The 1,000-square-foot shop inside The Crossroads mall in Portage has been hit hard by COVID-19 restrictions. The store is currently limited to about six customers at a time compared to about 20 customers at once pre-pandemic. “There is lots of extra cleaning we have to do before every customer comes in, so it takes a bit longer,” Nguyen said. “There is a very slow motion to what we have to do and we cannot have someone sitting and waiting.” Before the pandemic, 90 percent of Le Nails’ customers were walk-ins, which is much harder to accommodate under tight capacity limits. Mall operating hours also have been reduced by three hours to 11 a.m. to 7 p.m., Nguyen said.

Additional unemployment insurance benefits have also made it challenging to keep Le Nails staffed, said Nguyen, who had 10 employees pre-pandemic but now has three and works overtime with her husband to stay afloat. “Me and my husband have to be there six or seven days a week,” Nguyen said. “We have to be the workers and the managers, but we want to be working there to pay our rent and utilities. If I hire a manager or another worker to come in, then I will be making zero money.” Moreover, costs for supplies like personal protective equipment, rubbing alcohol and acetone needed to operate Le Nails skyrocketed during the pandemic, Nguyen said. She’s also buying more tools and supplies than before when she could sanitize and reuse some of them. “It’s terrible, but it’s happening everywhere,” Nguyen said. “I do understand that it is what it is, everyone is having to limit their capacity.” The challenges don’t end there. Nguyen was able to access some federal small business relief funding, but she couldn’t have done it without the help of attorney Crystal Bui, who also serves as the president of the nonprofit Asian Community Outreach. Nguyen speaks English as a second language — an

Le Nails salon at The Crossroads mall in Portage. PHOTO BY KATE CARLSON additional barrier to COVID-19 relief funding for minority-owned businesses — and reached out to Bui for help. The New York Nail Salon Workers Association, which is part of the labor union Workers United, conducted a survey of more than 1,000 members that found more than 81 percent felt excluded from government help during the pandemic, according to a report in MIT Technology Review. Meanwhile, mall foot traffic has been decreasing, and Nguyen’s family

is pushing her to look at other locations. But she has built up her business in the current location for so long that it would be hard to walk away, she said. “The business you get inside of a mall is not the same as it was 10 years ago,” Nguyen said. “Because I’ve been here about 15 years I do know lots of customers. They are like my friends and my family, my shop is like my kid, so I will try to hang on and hopefully we can get through until business is more normal.”

DIGITAL BUSINESS BANKING CONVENIENCES FOR BUSY PROFESSIONALS

Online services help streamline your workflow

you can easily view recent activity and deposit history.

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

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

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

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

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

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

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

www.horizonbank.com MiBiz / MAY 10, 2021

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

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

MAY 10, 2021 / MiBiz

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NONPROFIT ORGANIZATIONS

Next-gen donors pursue immediacy, social change during pandemic By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

oon after the COVID-19 outbreak and ensuing stay-at-home order hit Michigan last spring, Ann Arbor tech entrepreneur Joe Malcoun formed a philanthropic venture to help restaurants and frontline workers. Malcoun, an early stage tech investor who co-founded the coworking and event space Cahoots, partnered with other local investors and companies to raise $200,000 for a program that distributed restaurant gift cards to 2,000 health care workers in Southeast Michigan. It was Malcoun’s idea of delivering swift relief to struggling restaurants and essential frontline workers.

Goldseker

Malcoun

Through his marriage to Caitlin Klein, Malcoun is also the beneficiary of a substantial inheritance. Philanthropy researchers would classify him as a “next-gen donor,” and his gift card plan exemplifies several of the characteristics that are helping these donors reshape the philanthropy world. In general, next-gen donors seek an immediate effect by taking new approaches with their giving that’s increasingly targeted at social problems. “For whatever reason, our generation is very much trying to find a way to live our values,” Malcoun told MiBiz. “When you have resources that a lot of times were inherited, there is this sense of: ‘I have to do something with this.’ If I didn’t earn it, I at least have to make sure we do some good with it and invest it in things we’re passionate about. That ends up translating into a lot of social issues.” A recent survey by nonprofit experts shows that the pandemic exacerbated these trends among next-gen donors. Michael Moody, Frey Foundation Chair for Family Philanthropy at Grand Valley State University, and Sharna Goldseker, founder and vice Visit www.mibiz.com

donors were already trying to push,” Moody said. “Certainly, there’s evidence that it’s going to continue long term. Really, the next generation feels the power and importance of giving time and talent.” “Impact investing” and a focus on racial equity and social justice also gained steam during the pandemic, Moody said. “Many (sur vey respondents) said that 2020 gave them a chance to talk about these values with their family and to think about how that affects their family’s giving,” Moody said. “I don’t think that’s going away.” Goldseker and Moody are keeping the survey results informal but plan to develop best practice guides for audiences across the country. “We really want to make this work helpful for the field,” Moody said. Malcoun’s gift card plan was also relatively informal, and the work wrapped up as interest grew from outside of the region. The goal wasn’t to create a new business around the idea, but rather to deliver needed relief swiftly, he said. About six months after the effort, Malcoun was at the center of a national political controversy after filming a commercial for then-candidate Joe Biden’s campaign. He was interviewed as a bar owner (he coowns the legendary Blind Pig in Ann Arbor) struggling through the pandemic. Conservatives rallied around his background as a wealthy angel investor, which he openly acknowledged, to the point that the national Trends ‘intensified’ ad was removed based on concerns The researchers summarized the over his safety. findings last month for GVSU’s After he put the experience and Dorothy A. Johnson Center for news cycle behind him, Malcoun said P h i l a n t h r o p y. I n he is now focused on addition to the immefilling out his role as diacy, new tools for a next-gen donor, NONPROFITS giving and a focus on which he described NEWS social justice, responas an ongoing learn— Sponsored by: dents also reported a ing experience. GRAND RAPIDS “humble reckoning” Even so, Malcoun, COMMUNITY about the “inevitable, who also serves on the FOUNDATION persistent, yet often board of the ACLU unspoken power difof Michigan, sees a ferentials that underlie all philanstrong connection between political thropy,” the researchers wrote. and social advocacy. Key questions leading up to the “We’re learning, that’s what a lot pandemic included whether these of this is for us,” Malcoun said, notnext-gen giving trends would coning he and his wife are relatively new tinue, and for how long. donors. “There’s a massive overlap “What we found was that many coming of social and political issues, of the things they told us they were and political contributions affecting doing in 2020 in an intensified way social issues. That intersection is very were expansions of what next-gen important.” president of New York City-based nonprofit consultancy 21/64, coauthored the 2017 book, Generation Impact: How Next Gen Donors Are Revolutionizing Giving. Driven by a desire to continually expand on their original research, Goldseker and Moody wanted to see how nex t-gen donors were responding to the multiple crises of 2020: the COVID-19 pandemic, its economic fallout, and the racial justice movement in response to police brutality. “We really just found that they were stepping up in incredible ways,” Goldseker said of next-gen donors. The nationwide survey last summer included 111 respondents of next-gen donors in their 20s, 30s or 40s who had a “capacity for major giving,” Moody said. “Next-gen donors are not only giving charitable contributions — writing checks, allocating grant money — but t h e y ’ re a l s o using other Moody kinds of tools in the toolbox,” Goldseker said. The efforts over the past year included developing tech platforms for other nonprofits, helping minority business owners access capital, and — in the run up to the election — helping to get out the vote during a pandemic.

First Baptist Church at 315 W. Michigan Ave. in downtown Kalamazoo. COURTESY PHOTO

Nonprofit to transform historic Kalamazoo church as new owner By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com KAL AMA ZO O — The Kalamazoo Nonprofit Advocacy Coalition has taken ownership of the 168-year-old First Baptist Church downtown and seeks to raise millions of dollars for renovations and expanded programming. After years of declining membership in the church’s congregation, First Baptist Church last month gifted the roughly 30,000-square-foot building to the coalition, known as KNAC. The nonprofit is in the first phase of making critical structural repairs under a $280,000 budget. Sytsma The second phase involves a potentially $3 million capital campaign for a full renovation that would give more flexibility for the leased spaces and cater to organizations’ specific needs. “A big theme of the building is shared use,” said KNAC Board President Dann Sytsma. Current tenants include theater groups, a dance studio, artist workspace, offices and several nonprofits. First Baptist Church also continues to worship in the space. The church currently has about 20 tenants, which could increase to about 60 after the planned renovations, according to Sytsma. For decades, the church has been a “very arts focused congregation,” Sytsma said, noting the transfer to KNAC was a natural fit. “It started being excessively expensive for them to keep up the building,”

“We’re building a culture and something that people are really going to be excited to go to for their work.” — DANN SYTSMA President of Kalamazoo Nonprofit Advocacy Coalition

said Sytsma, who’s artistic director for Crawlspace Comedy Theatre, which leases space in the church. KNAC formed in 2017 to manage the building and start attracting arts and community-focused tenants. “It was becoming more apparent that KNAC would be a better owner of the property to guide everything it was going to be,” he said. Based on KNAC’s structure, it currently remains unclear whether the property or portions of it will return to the city’s tax rolls, according to Sytsma. But t he bu i ld i ng’s locat ion a nd KNAC’s focus on accommodating community-minded organizations creates opportunities for groups that might not otherwise be able to afford to operate in prime downtown space. Officials hope to complete the $3 million renovation by 2025. “We’re building a culture and something that people are really going to be excited to go to for their work,” Sytsma said. “There isn’t really anything else quite like it downtown.” MiBiz / MAY 10, 2021

Communication key during health system CEO’s first year on the job A Q&A with Bill Manns, president and CEO of Bronson Healthcare Bill Manns started as president and CEO at Bronson Healthcare on March 30, 2020. The COVID-19 pandemic was in its early stages in Michigan and hospitals had been ordered by the state to halt all non-emergency procedures. As a result, the Kalamazoo health system was projecting a “fairly significant” financial loss, said Manns, who previously served as president of St. Joseph Mercy Ann Arbor. He was president at Mercy Health Saint Mary’s in Grand Rapids from 2013 to October 2018. Manns talked to MiBiz about his first year leading Bronson through the pandemic. What’s it like stepping into the CEO position as a public health crisis was emerging and spreading? I’ve talked to so many people and they’ve said, ‘Oh, man. I’d hate to be in those shoes stepping in as the new guy right in the middle of a pandemic.’ Very truly, it demonstrates and you see people’s true colors under a crisis — from staff at the bedside who stepped up to the challenge, to our physicians and providers who really stepped forward, to managers and directors who were rolling up their sleeves and also providing care. I really saw the heart of the organization putting the patients first. It was both humbling and rewarding to be in a position to help guide and lead the organization through the crisis. As you prepared to move into the CEO position, was there a moment that told you just how bad the crisis would get? For me, the elective surgeries had been shut down. I sat down with our chief financial officer and we went through some projections. At that point, it became real. You have to weigh just these huge projected losses against the fact that Bronson is the largest employer in Southwest Michigan, and know that you couldn’t shrink the organization because that would have an impact on the region. So how do we very carefully navigate this challenge in a way that would allow the organization to grow and move forward and not allow the hole to be too deep that you spiral out of control and it couldn’t come back financially? What was decision No. 1? To cut my salary. For me, it was important to model the way. I knew that no matter what, we would have to reduce our expenses because elective surgeries had stopped and we couldn’t craft a scenario where you’d be able to come out without reducing expenses. To follow up with decision No. 2, many of the other executives jumped on board. It was, ‘Wait, the new guy’s going to do it, so we’re going to follow.’ So, that was cool. The tougher decisions we didn’t want to make involved furloughing staff. That was tough because nobody wants to do that. I grew up in Detroit where my dad was always worried about being laid off from the plants. I took that very, very seriously. What must an effective leader make sure they do while leading in a crisis? Communicate, communicate, communicate. We did a number of videos, a number of emails, and to the extent that I could stay safely and appropriately distanced, I walked around to listen to people and communicated. And again being new, people didn’t know me. It was, wow, ‘I think I’m a trustworthy guy, but, gee, you never met me before and some of the decisions I have to make are going to be really tough.’ In that kind of crisis, you have to really over communicate and communicate in ways that were quite novel. How has the first year and managing the crisis changed you as a leader? It’s given me resolve as a leader that you really do have to listen to and trust those around you. It’s given me a sense of resolve that together the team can do virtually anything. This crisis just demonstrated to me that we literally are all in this together. When I refer to the ecosystem that exists, especially in health care, and the impact the crisis has had worldwide, as a leader I can mistakenly think about what I do. It really isn’t. It’s about what we do together as a team. So, it has allowed me in a very counterintuitive way to have a sense of peace and resolve because I know where I have weaknesses, someone else on the team will pick up. Where I see someone else needs help, I feel very comfortable diving in. It’s really changed my type-A kind of mindset to be a more holistic and supportive leader than before. What’s the pandemic’s lasting effects on Bronson, and on health care in general? For health systems, there’s the obvious: Telehealth. Many have been struggling to get traction around their telehealth strategies and we saw an exponential rise in telehealth that kind of plateaued as we opened back up. But telehealth is here to stay for the foreseeable future. For Bronson, it’s opened our eyes that we have a larger responsibility to the communities that we serve toensure that we provide access. What’s the biggest thing you learned in the last year? The resilience of the staff. I’ve watched and seen people do things where I’m just in complete awe. I’ll take the strength of the team over the strength of any one individual. As we were looking at this projected loss, we assembled about 100 directors and managers to help us grow and come out of this financially. While we were dealing with the pandemic, in about 16 weeks, they generated ideas that really benefited Bronson significantly and helped us take what would have been a really challenging financial situation and turned it around so we ended our fiscal year in relatively good shape. Interview conducted and condensed by Mark Sanchez. Courtesy photo.

MAY 10, 2021 / MiBiz

IN THE NEWS M&A

n Edgewater Bank branches have become part of United Federal Credit Union following federal regulatory and shareholder approvals of a merger between the two institutions. The four Edgewater Bank offices in Berrien County — plus loan offices in Greenville and Fremont — took on the United Federal Credit Union (UFCU) name when they opened on May 3. An Edgewater Bank office in Buchanan will close permanently and the staff will be consolidated into a nearby UFCU branch. About 5,600 Edgewater Bank customers are eligible to become UFCU members. n Manistique-based Mackinac Financial Corp. (Nasdaq: MFNC), the parent company of mBank, will be acquired by Green Bay, Wis.-based Nicolet Bankshares Inc. (Nasdaq: NCBS) under the terms of a definitive merger agreement that the companies signed in April. In the cash-and-stock deal valued at approximately $248 million, Mackinac shareholders will have a right to receive 0.22 shares of Nicolet’s common stock and $4.64 for each common stock of Mackinac. The deal, which is expected to close in the third quarter of 2021, equates to 18.3 times Mackinac’s earnings per share in 2020, according to a statement. The combined bank will have about $6.1 billion in total assets, $5.2 billion in deposits and $3.9 billion in loans. Currently, mBank operates 28 branch locations, including 10 in the Upper Peninsula, 10 in the northern Lower Peninsula, and one in Oakland County, plus seven in northern Wisconsin. Minneapolis, Minn.-based Piper Sandler & Co. served as financial adviser to Mackinac, while Detroit-based Honigman LLP served as the bank’s legal counsel. n Byron Center-based Wonderland Tire Co. Inc. acquired Newport, Ky.-based Sumerel Tire Service Inc. in March, according to a statement. With the Sumerel deal, Wonderland Tire now operates 13 locations in six states with a capacity to produce more than 137,000 remanufactured tires per year at four manufacturing locations. Wonderland and Sumerel worked together over the last 24 years. The management team at Sumerel remains in place after the close of the deal, the terms of which were undisclosed. n Norton Shores-based Seabrook Plastics Inc., a molder of plastic parts primarily for the automotive and defense industries, recently finalized the sale of its company to fellow lakeshore-based plastic parts manufacturer Molding Solutions Inc. of Grand Haven. Seabrook Plastics, which was founded in 1994 and is headquartered at 1869 Lindberg Drive in Norton Shores, specializes in producing plastic parts with tight tolerances suitable for defense applications and is known in the industry for its advanced production methods. Seabrook will now be owned and managed by Molding Solutions, an ISO 9001:2015-certified plastics injection molder located at 1734 Airpark Drive. The company supplies clients in the automotive, furniture, appliances, consumer goods and construction industries. n Grand Rapids-based wood products manufacturer UFP Industries Inc. recently acquired the assets of Minneapolis-based Endurable Building Products LLC, which manufactures customized structural aluminum systems and products, such as deck framing and balconies. Endurable Building Products, which tallied around $15 million in sales for 2020, will maintain its current leadership. The acquisition is expected to allow UFP to provide a new set of services for its construction customers.

REAL ESTATE & DEVELOPMENT n The two-year redevelopment of the former Grand Rapids Christian High School building into a variety of uses, including 40 affordable apartment units, is now complete. The 75,000-squarefoot building at 415 Franklin St. SE will also serve as the new headquarters for the Inner City Christian Federation, as well as worship space for Madison Church and a YMCA child development center. ICCF is managing the new apartments, which in-

clude four Americans with Disabilities Act (ADA) compliant units. The units — available for tenants living at or below 80 percent of area median income — are currently all leased out with families starting to move in, according to ICCF officials. n Spectrum Health plans to begin work soon on a new long-term care center along Fuller Avenue in Grand Rapids. The 130-bed facility would replace an aging Continuing Care center nearby on Fuller Avenue NE that Spectrum Health leases from Kent County. Planned for a nearly 10-acre site at Fuller Avenue NE and Cedar Street NE, the new 94,455-square-foot center would consist of 120 beds in private and semi-private rooms for long-term care patients who need 24-hour care, plus a 10-bed hospice unit. Spectrum Health plans to begin construction “right away” with a goal of completing the project by spring 2023, officials said. Plainfield Township-based Progressive AE Inc. designed the facility for Spectrum Health.

FINANCE

n Coldwater-based Southern Michigan Bancorp Inc. (OTC Pink: SOMC), the parent for Southern Michigan Bank & Trust, completed a private placement of subordinate notes to accredited investors that raised $30 million. Southern Michigan intends to use the net proceeds to retire existing debt, support organic growth and for general corporate purposes. Performance Trust Capital Partners LLC served as the sole placement agent for the offering. Warner Norcross + Judd LLP was legal counsel to the company, and Hunton Andrews Kurth LLP served as legal counsel to the placement agent. Southern Michigan Bank & Trust has 13 offices in Branch, Calhoun, Hillsdale, Kalamazoo and St. Joseph counties with $1.07 billion in total assets as of March 31 and deposits of $925.6 million. n Lake Michigan Credit Union opened a new branch on Robbins Road in Grand Haven. The office is Lake Michigan Credit Union’s second in Grand Haven. The Grand Rapids-based credit union has 59 offices in Michigan with 406,861 members as of March 31 and $9.99 billion in assets, deposits of $8.59 billion, and $6.55 billion in loans, including $711.5 million in commercial loans, according to a financial report to federal regulators. The largest credit union in Michigan, Lake Michigan recorded quarterly net income of $53 million.

HEALTH CARE

n BAMF Health Inc. committed to investing $30 million for a new headquarters and facility at the new Doug Meijer Medical Innovation Building under construction in Michigan State University’s Grand Rapids Innovation Park downtown. BAMF Health is working to move radiopharmaceuticals from the research lab to commercial use for molecular imaging used in precision treatment for cancer patients that can result in complete remission without side effects. Led by Dr. Anthony Chang, the company expects its molecular imaging and theranostics clinics to open in February 2022, creating 200 jobs in the life sciences sector. n Cornerstone University opened the Mary De Witt Center for Nursing, which will house a new nursing degree program that’s awaiting approval from the Higher Learning Commission in summer 2021. The 8,100-square-foot nursing facility was designed by C2AE Inc. Christman Co. was the contractor.

NONPROFIT

n The Fremont Area Community Foundation launched a nationwide search for its next president and CEO. The foundation retained Kittleman & Associates, a national executive search firm specializing in the recruitment of CEOs for nonprofit organizations, to lead the search and partner with a group consisting of representatives from across its four-county service area. Present CEO Carla Roberts plans to retire by the end of 2021. Visit www.mibiz.com

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WHY ADVANTAGE At the beginning of the year, our team of experienced commercial real estate advisors teamed up to create Advantage Commercial Real Estate. As we serve area businesses, it is important for the community to understand the “why” behind all that we have done, all that we are doing, and all that is to come. Our dream started from a desire to be locally owned and operated, to better serve our clients throughout West Michigan. With advisors as owners, we can grow with your business and completely tailor our services to meet your unique needs. We have experts in every commercial real estate specialty that are strategic, tenacious, and determined to see you and your business achieve success. We are grateful for the outpouring of support we have received from the West Michigan community for our new endeavor. We cannot thank you enough for inspiring us, choosing us, and trusting our team of experts to get the job done.

1575 Arboretum Drive SE, Suite 402 | Grand Rapids, MI 49546 616 327 2800 | www.AdvantageCRE.com

MAY 10, 2021 / MiBiz

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