MiBiz March 29, 2021 print edition

Kalamazoo County regroups after housing proposal fails

Deborah Prato takes helm at The Rapid

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‘Substantial and far-reaching’ Federal proposal to change some metropolitan areas’ status could jeopardize crucial funding and economic development From left: Award-winning designer Joey Ruiter sits on his NOMOTO motorcycle concept at his design studio in Ada. A rendering of Buell Motorcycles’ 1190 Super Touring bike. Ruiter and Buell recently formed a new collaboration. PHOTO BY KATY BATDORFF. COURTESY RENDERING

Design Disruptor Ada-based designer Joey Ruiter leaves his minimalist mark on the vehicle and furniture industries and starts a new collaboration with Buell Motorcycles

By JAYSON BUSSA | MiBiz jbussa@mibiz.com

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ot many designers — if any — feature a portfolio of work quite like Joey Ruiter.

From award-winning office furniture designs to a project he calls Snoped, a reimagined, black aluminum snowmobile that rides like a cafe racer, the Grand Rapids-based Ruiter is not your typical nine-to-five office furniture designer.

In fact, it’s his work with cars, motorcycles, boats and other transportation elements that has grabbed attention from nationwide media and enthusiasts alike.

“Some of my work is provocational,” Ruiter said. “It’s a piece of art. People will look at it and I want them to ask questions and for it to raise emotions.”

With his studio located in Ada, Ruiter’s bread and butter might be lending designs to some of West Michigan’s top furniture manufacturers — names like Steelcase Inc., Herman Miller Inc. and Nucraft Furniture Co. — but he

By KATE CARLSON | MiBiz kcarlson@mibiz.com

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has turned heads over the years with his transportation curiosities.

In 2019, Ruiter teamed up with fellow conceptual designer Rem D. Koolhaas to host an exhibition called DISRUPTORS at the Los Angeles-based Petersen Automotive Museum, showcasing conceptual approaches to automotive design.

As a self-described minimalist in his trade, Ruiter generally begins each of his projects by first stripping an object down to its core only to build it back up in unique and unexpected ways.

One such example is his NOMOTO, a motorcycle concept where a metal, graffiticlad body completely camouflages the bike against typical urban settings. The bike is also fully functional.

The Consumer Car is another highlight in Ruiter’s portfolio. Beginning with a 1993 Ford Festiva GL chassis and drivetrain, Ruiter See RUITER on page 3

everal Michigan communities are at risk of losing crucial federal funding under proposed changes to their designation as metropolitan areas, which local officials say would negatively affect services and economic development efforts.

The White House Office of Management and Budget (OMB) is considering a proposal to redesignate 144 U.S. Metropolitan Statistical Areas as “Micropolitan Statistical Areas” that are based on smaller population sizes. The proposal would affect metropolitan areas in Niles, Battle Creek, Jackson, Midland, Bay City and Monroe.

Currently, Metropolitan Statistical Hackbarth Areas must contain a U.S. Census Bureau-delineated urban area with a population of at least 50,000, while micropolitans are areas with populations of 10,000 to 50,000.

The OMB’s proposed change would increase the minimum population to qualify as a Metropolitan Statistical Area from 50,000 to 100,000.

OMB published a notice on the proposed change on Jan. 19, kicking off a public comment period that ended March 19. OMB will consider recommendations from a review committee and public comments, and any revisions will be announced in a final notice. The potential changes could go into effect in 2023.

See MSA AND CENSUS on page 5

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

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

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growing number of employers are offering incentives to their workers who opt for getting a COVID-19 vaccine, including with extra paid time off or small cash bonuses.

At automotive repair center Belle Tire, employees are paid $25 for each vaccination visit, or $50 total

if they get the dual-dose vaccine from Pfizer Inc. or Moderna Inc. The amount will more than compensate employees for the time they may need to leave work to get vaccinated, company officials say.

“We want to make sure all of the employees who want the vaccination can get it and feel safe, and that they don’t have to choose between staying on the clock and earning an hourly wage versus trying to get the vaccination,” said Don Barnes III, president of the Allen Park-based Belle Tire. The

company has 127 stores in Michigan, Indiana and Ohio, more than 2,300 employees, and is one of the nation’s largest tire dealers.

“We want all of the employees of all types to be able to do that so that they feel when they are at work it’s safe to be at work,” Barnes told MiBiz. “We want to make sure we create a safe working environment for all and we don’t want any of our teammates to hesitate.”

See VACCINE INCENTIVES on page 9

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Geography adds to talent challenges for northwest Michigan manufacturers PAGE 4

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Utilities & Energy SEE PAGE 10

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WELLNESS AND THE HOME OFFICE Experts weigh in on tactics for health and wellness while working from home

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icture the perfect home office: sprawling wooden desk, latest high-definition monitor, plush leather chair, and of course, that perfect built-in bookshelf as a backdrop for Zoom meetings.

Though pleasant, this vision is far from reality for most people working from home during the COVID-19 pandemic. More likely are long hours spent at improvised workstations — laptops on stacks of books, the kids’ old crafting table or a dining chair. Meanwhile, children play in the background or attend virtual schooling, spouses work shoulder-to-shoulder.

This new reality of working from home can be chaotic, mentally draining and unhealthy.

MiBiz recently hosted a free webinar with occupational therapy practitioners Anita Joy Edwards, Kara Wong and Sydney Lyng of health consulting firm GIG Design LLC to discuss the importance of wellness in mitigating the physical and mental toll of working from home.

Even with a dedicated home office, working from home in the COVID-19 era has created myriad health challenges.

Increased chair time has led to weight gain, chronic pain, depression and other adverse impacts. Endless Zoom calls and increased screen time have led to digital eye strain and anxiety. And unclear work-life boundaries have yielded longer hours and increasing burnout. According to a study from staffing firm Adecco, social burnout from the pandemic is estimated to cost the global economy approximately $323 billion annually.

Experts believe the work-from-home transition fueled

by COVID-19 will become a regular part of professional life in the future. As such, both workers and employers alike need to adopt wellness practices to keep everyone healthy in the long-term. Ultimately, health and wellness largely come down to social interactions, said Edwards, founder and president of GIG Design.

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MARCH 29, 2021 / MiBiz

“There’s an old saying that ‘It’s better to eat Twinkies with friends than a salad alone’,” Edwards said. “This means that the quality of relationship with others and ourselves has a greater impact than following dietary rules. The salad is obviously a healthier option (but) a shared experience with trusted peers is the healthiest option compared to experiencing something alone.”

Employers’ role in wellness Employers have adopted a variety of tactics to promote social interactions among their employees and ease the burden of the pandemic. Lyng and Wong, both occupational therapy students at the Chan Division for Occupational Science and Occupational Therapy at the University of Southern California, noted some companies host virtual happy hours. Others hold “health circles” – meetings among peers in a safe environment where they can openly discuss challenges they face in the new work-from-home environment. Outside of promoting social interactions, some companies also issue stipends or bonuses related to health and wellness.

However, the speakers indicated the most essential thing employers can do for their worker’s wellness is to listen, empathize with their employees’ concerns and troubles, and above all, remain flexible.

“There’s a positive correlation between flexible work schedules and proactivity,” Wong said. “It’s important for companies to avoid setting very stringent schedules and deadlines. The emphasis on clock time can cause unnecessary stress on employees and encourage a company culture that may not be beneficial.”

The speakers also suggested employers exercise caution and weigh the impacts on employee wellness when making certain decisions. Many companies have turned

to software to track employee activity and monitor their activity at home. While these programs can be effective from a profitability perspective, they also easily blur the lines between clock time and personal time and risk total surveillance of their employee and the employee’s family.

“Using such technology is heavily cautioned,” Lyng said. “It’s crucial to not only request explicit consent from employees but also weave privacy preserving features into the design of their technologies.”

Personal Tactics On a personal level, Edwards and the other speakers noted that individuals can take small actions throughout the day to promote physical and mental wellness.

Incorporating micro-breaks, standing and stretching, performing squats or other aerobic exercises once an hour, and placing the printer away from the desk, are all ways being people can intersperse physical activity through the workday. Additionally, purchasing ergonomic equipment to maintain proper posture can also help the physical impacts of working from home.

Though the COVID-19 pandemic has forced both employers and their workers to adapt in unfamiliar and uncomfortable ways, incorporating wellness techniques and strategies into daily life can help everyone improve their physical and mental health.

GIG Design offers top wellness tips for employees who are working from home. The wellness consulting firm also offers a variety of health and wellness services for employers, including an employee wellness survey and follow-up consulting services.

GIG Design is a team of health consultants who help individuals achieve their personal, health, and wellness goals. Our approach is client-centered and process-oriented in order to create the best potential for long-term success that sticks. Visit www.gigdesign.me.

Find the webinar recap at mibiz.com/work-from-homewellness Visit www.mibiz.com

RUITER

Continued from page 1 created a hyper-minimal design that essentially looks like a black box on wheels.

The outrageous creations also include Reboot Buggy, an ultra-practical off-road vehicle that was featured in WIRED Magazine and was purposely stripped of its luxuries and frills that coddle the driver. Ruiter is also the brainchild of Tinnie 10, a triangle-shaped minimalist outboard motor boat.

Right now, he is building two electric cars, one modeled as a big 1960sera American sedan and the other he described as “a monster — a completely ridiculous, over-the-top, goanywhere, top-down, off-road vehicle meets ’30s race car.” The two designs are an exploration in how drivers can restore a passion for the drive despite the often generic, uninspiring design and features of electric vehicles.

“With electric cars, people tend to ask two questions: How fast is it and what’s the range?’” Ruiter said.

“Those are boring questions. There is not much to ask about them. No one wants to pop the hood of an electric car and check out how many volts it is.”

Ruiter meets Buell When iconic American superbike maker Buell Motorcycles relaunched and set up shop in Grand Rapids, it caught Ruiter’s attention.

“I read something about Buell being in town and I kind of reached out to meet with them,” Ruiter said.

“I called (CEO Bill Melvin) and he told me to come by and check it out.

I described what I did as a designer in town and some of my motorcycle work I had already done.”

At the time, Ruiter was working on pieces for a show at the San Francisco Museum of Craft and Design, which

included a custom-designed motorcycle. Melvin invited Ruiter to use Buell as a starting point.

While Ruiter didn’t ultimately use the bike for his finished project, the relationship led to collaboration between Ruiter and Buell.

Ruiter designed Buell’s recently unveiled 1190 Super Touring bike, sporting the ultra-modern look that has become a calling card of Ruiter’s work.

“Our super touring bike is a variation of the platform but is also a very broad market segment for motorcycles,” said Melvin, who owns Buell after his Grand Rapids-based liquidation company Liquid Asset Partners LLC acquired the assets in 2016 for a reported $2 million. “(The design) is super cool. You look at it and you think that would be in a movie. When Matt Damon is stranded on Mars a second time, he’s going to hop on this bike and race to get to the rocket,” he said.

Melvin also said that, if the project is right, Buell would continue to tap into Ruiter’s design prowess. “(Ruiter) is a disruptor and Buell, in the next 10 years, people are going to see that we’re disrupting things and doing things that people want to buy and enjoy but also have products that surprise people,” Melvin said. “There are some things we can’t go into quite yet, but we’re looking to have products that are going to surprise people and broaden the market.”

In February of this year, Melvin announced that the Buell Motorcycles brand is back and the bikes will be produced in Grand Rapids. Until that point, Melvin maintained low-volume bike production in Grand Rapids under the name EBR Motorcycles. The company earned the rights to use the Buell Motorcycles name in April of 2020.

The company is currently building out its advisory board and executive team, focusing on new products and their launch dates. Earlier in the year,

the company announced that it would be releasing 10 performance models by the year 2024.

Limited edition Buell bikes are currently in production as the company’s leadership focuses on its larger plans and new models for 2022 through 2024.

“The timing is really set up nicely,” Melvin said. “There are a number of changes in the two-wheel market and we feel like those things line up very well for Buell.

“Also, the platform had been limited in the past through previous ownership and those shackles are off. There is a broader market available, so that’s really nice. And the setup for what we brought together here really allows us to take our time.”

Old brand, new design With Buell, Ruiter faced the task of stepping in to design for a brand that has lingered in the market for 35 years, cultivating international loyalty and recognition.

“I’m pretty familiar with the Buell brand and what (founder) Erik (Buell) had done in the beginning,” Ruiter said. “He was definitely a leader in pushing the envelope from an engineering standpoint.

“Aesthetically, they’re beasts. For him, it was function way over form. …

I think they got stigmatized early, but when you get to know the bikes more, they’re actually quite beautiful how they’re put together.”

Another design challenge Ruiter encountered was the fact that Buell bikes are generally tough to deconstruct and customize. For the final design, Ruiter wanted to “put an exclamation mark on the things Buell does well.”

Ruiter said that he is very interested in working with the brand to move it forward.

“I think carrying the brand forward will be really fun to do and see how we can push it forward,” he said. “The industry is changing really quickly. I’m

curious to see how we can keep up with that without starting over.”

On an island Ruiter continues to raise his profile in the design community despite the geographical barriers that come with operating out of West Michigan as opposed to one of the design epicenters on the coasts.

Ruiter has made frequent trips to events and galleries in both New York City and Los Angeles and said that many people in those circles don’t even know he lives in Michigan.

“It doesn’t really matter where you live today,” said Ruiter, who grew up in Grand Haven and attended both Muskegon Community College and Kendall College of Art and Design (KCAD). “Maybe five years ago, but not today. And, definitely not post-COVID. I’m actually working with more clients that aren’t local now probably because it’s more acceptable to not be there in person.”

But, for his contributions to the furniture industry — work that has cooled off during the COVID-19 pandemic — it does help to be close to many of the companies he works with on a regular basis.

KCAD President Tara McCrackin said technology has allowed designers to feel less pressured to migrate to one of the coasts in order to produce nationally recognized work. West Michigan is an attractive destination for designers for several reasons, she said, including being “design centric” with an increasingly innovative manufacturing base.

McCrackin called Ruiter’s overall work aesthetic “gritty glamor” that broadly applies design basics. She also called his acheivements a success for the local design community that “puts us on the radar — puts us on the map.

“It expands our reach and it draws talent to West Michigan.”

A recap of recent stories from MiBiz.com.

Global direct selling giant Amway Corp. announced it is cutting 6 percent of its global workforce, or about 900 people, most of whom are based at the company’s world headquarters in Ada. Eligible employees were notified this month about a “voluntary separation plan” aimed at helping the company to better focus on its health and wellness business and bolster its digital presence for its independent business owners and their customers. The move will largely affect people in “professional roles at our Visit www.mibiz.com

World Headquarters in Ada,” said Susan Nemes, manager of global PR at Amway. The company expects 90 percent of the expected layoffs, or about 800 positions, will come from its West Michigan operations.

The company expects the majority of the layoffs to take place from July through the end of 2021.

Michigan emerging as top sports betting, online gaming market Another busy stretch of sports betting and online gaming in Michigan has put the state among some of the top

Publisher Brian Edwards / bedwards@mibiz.com Associate Publisher Denise Montambo / denise@mibiz.com Editor Joe Boomgaard / jboomgaard@mibiz.com Managing Editor Andy Balaskovitz / abalaskovitz@mibiz.com (energy, policy) Senior Editor Jayson Bussa / jbussa@mibiz.com (manufacturing, tech, sports) Senior Writer Mark Sanchez / msanchez@mibiz.com (finance, health care, life sciences) Staff Writer Kate Carlson / kcarlson@mibiz.com (real estate & development, small biz) Contributing Reporter Josh Spanninga Contributing Photographer Katy Batdorff VP of Production & Audience Development Kristi Kortman / kkortman@mibiz.com Digital Specialist Danielle Affholter / daffholter@mibiz.com Graphic Designer Kaylee Van Tuinen / kvantuinen@mibiz.com Senior Advertising Consultant Shelly Keel / skeel@mibiz.com Sales & Marketing Associate Lauren Frailey / lfrailey@mibiz.com Director, Finance & Administration Tarah Buchan / tbuchan@mibiz.com

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markets in the country. The Michigan Gaming Control Board recently released February data showing that internet sports betting operators grossed $9.5 million while handling $301.9 million in bets. This was a 162-percent increase from the $115.2 million licensed operators took in during the last 10 days of January and a slight drop in per-day averages, from $11.5 million in bets per day in January to $10.8 million per day in February. Combined with retail sports betting inside casinos around the state, Michigan sports books took in $325.6 million in bets for February. The totals push

Michigan to the fifth largest market in the country, where it is expected to settle after overtaking Indiana. The country’s top markets are in New Jersey, Nevada, Pennsylvania and Illinois.

Biz coalition says health care bills will drive up costs for employers A coa l it ion of M ich iga n business groups is urging state senators to reject legislation that they claim will drive up the cost of health coverage for small employers. At issue are t wo bills t he st ate Hou se pa s sed

last week by wide margins — House Bi l ls 4346 a nd 4354 — that would require health insurers to cover oral oncology drugs at the same rate as intravenous chemotherapy, which costs much more. The legislation would also cap consumer co-pays at $50 for a 30-day supply of insulin. The Michigan A f for d a ble He a lt hc a r e Coalition argues that neit her ma ndate act ua l ly reduces costs or prices — just what consumers pay out of pocket. If enacted, the bills would drive up health premiums for fully insured small businesses, the coalition argues.

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MANUFACTURING

Geography adds to talent challenges for northwest Michigan manufacturers

By JAYSON BUSSA | MiBiz jbussa@mibiz.com

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s Michigan manufacturers of all segments continue grappling with a persistent talent shortage and skills gap, furniture-maker Metalworks Inc. has to contend with a unique set of

hurdles.

These are problems the company, which also does business as Great Openings, shares with its manufacturing brethren in Ludington and throughout the rest of the northwestern Lower Peninsula.

Geography — with Ludington fairly isolated along the Lake Michigan coast between Muskegon and Traverse City — is one of the most prominent issues making it tough for these manufacturers to acquire talent.

“Normally you can draw a 60-mile radius around your business or town and draw (talent) from that, but we only have half of that,” Metalworks President Tom Paine said. “We’re a

little bit disabled there. We can’t attract people from all directions.”

This leaves a finite talent pool for a small area that features some surprisingly large manufacturers, including names like Metalworks, styrofoam products manufacturer FloraCraft Corp., precision extruded aluminum components manufacturer UACJ Automotive Whitehall Industries Inc. and furniture maker Brill Co. In the case of Metalworks, about two-thirds of its 200-employee workforce is shop workers while the other third serve in support functions.

Collaboration vs. competition The manufacturers concentrated in this area are left to find a balance between working collaboratively to find ways to keep the talent pool stocked while also engaging in healthy competition for workers.

Scott Lakari, vice president of operations for Metalworks, said that resources like the Mason County Manufacturers Association (MCMA),

WEST MICHIGAN’S LEADING COMMERCIAL ROOFING CONTRACTOR

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A machine on the shop floor of Ludington-based FloraCraft Corp. COURTESY PHOTO which is a part of the Mason County Growth Alliance, is an effective resource in developing ideas that can help all manufacturers in the area.

“One of the things we talk about as an association is we’re not competitors in the markets we serve but we do compete for the same workforce,” said Lakari, who leads the MCMA. “If we consider that Erwin Lakari Paine 60-mile land lock with the group we have, we are competing for the same people and trying to make sure that when we hire a person ‘John, it’s time, we have an opportunity for you,’” we’re not losing them to FloraCraft or one of the Erwin said. other manufacturers in the community.”

Phil Gable, vice president of extrusion for At the moment, Metalworks isn’t in a panic to FloraCraft, has a similar story. He moved away bring on new talent after the COVID-19 pandemic from Ludington, acquired a master’s degree and decimated the office furniture industry when corserved with the military before returning to the porations across the country made a mass exodus area and taking his post at FloraCraft. from offices and transitioned to working from home.

“Being able to recruit these people to this area, However, the company is working to ensure we find we have a far greater opportunity to do it that current employees remain engaged and plans with people who are familiar with what northwestto hire additional workers when business volumes ern Michigan has to offer,” Erwin said. return to normal, which the company is expecting will happen near the end of this year.

Fortifying a pipeline FloraCraft President and CEO Eric Erwin Within such a tight-knit community, the role of West agreed that manufacturers in the area need to Shore Community College becomes amplified as a engage in both collaboration and competition. resource to develop talent for local businesses.

By his assessment, the COVID-19 pandemic Cr ystal Young, director of the college’s revealed the need for both affordable housing Business Opportunity Center, said West Shore has and accessible child care in the Ludington area regular conversations with area manufacturers.

— issues where businesses could collaborate. “(Manufacturing) is changing every day with “That being said, my belief is that FloraCraft technology, with automation and with robotics,” needs to be the employer of choice in Mason Young said. “We really have to be in continuous County,” Erwin said. “We’re competing for a communication with our manufacturers as to scarce resource like highly qualified labor. It’s what they need. They’re pivoting on dimes and FloraCraft’s responsibility to recruit the best and academia doesn’t always pivot on a dime.” retain the best. That doesn’t mean we necessarily In October of 2020, the school partnered with collaborate with our competition. the West Shore Educational Service District (ESD) “So, I believe in a marketplace of good ideas to hire a talent pipeline coordinator to engage K-12 and if we treat our employees better than other students and encourage talent development and folks, then we want people to come and work here.” retention in the area.

One talent-attraction strategy that FloraCraft West Shore Community College also designs has used is a “return to Ludington” movement, in labs and curriculums based on the needs of area which the company targets talent originally from manufacturers. A few years ago, the school jointly the area that has left. purchased a CNC machine with UACJ Automotive That’s how FloraCraft ultimately landed CFO Whitehall Industries Inc. The machine was the John Nielsen. same type found on the shop floor at the company, “Through networking within town, we were giving the school an opportunity to train both stuable to identify this former resident and connect dents and new hires at Whitehall Industries. with him a little over a year and a half ago. As we Similarly, FloraCraft made a recent capital stayed in touch, we knew what his longer term investment in robots to boost efficiency, which goals were and when an opportunity arose here changed its talent needs. at FloraCraft, it made it very easy for us to say, Visit www.mibiz.com

ECONOMIC DEVELOPMENT MSA AND CENSUS

Continued from page 1

A FloraCraft Corp. employee at the company’s Ludington facility. COURTESY PHOTO

“We’re competing for a scarce resource like highly qualified labor. It’s FloraCraft’s responsibility to recruit the best and retain the best. That doesn’t mean we necessarily collaborate with our competition.”

— ERIC ERWIN President and CEO, FloraCraft

“The West Shore program will be a funnel to bring people that will be trained in the operation of our facility,” Erwin said. “We work with them and provide a work study program for many of those students and it’s a great recruiting area for us.”

Just as important as bringing qualified talent through the door, cultivating talent is also a point of emphasis for Metalworks and area manufacturers.

Metalworks offers a program called UGotClass through West Shore Community College, which helps employees develop competencies in business that allow them to elevate to higher positions and pay grades.

For shop floor workers, Metalworks offers its Master Series, which is similar to UGotClass.

FloraCraft also places a strong emphasis on keeping employees engaged through ongoing training. It offers the FloraCraft Academy for high potential employees. This is a two-year curriculum akin to a college course. That has been on hold for the last six months but will return when FloraCraft is able to hold their sessions according to health guidelines.

“It’s something we’re really proud of,” Er w in said. “We’re prov iding excellent instruction including outside lecturers, who comment on specific topics. We know it’s really contributing to (employee) engagement.”

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The Census-based formula is “tweaked” every 10 years, but Metropolitan Statistical Area (MSA) standards have been in place since the 1950s, said Chris Hackbarth, director of state and federal affairs at the Michigan Municipal League.

The League is opposed to the proposed change.

The OMB considers the changes as a way to update and standardize the Census process, but it is much more complicated because of the data collection and federal funding tied to the Metropolitan Statistical Area title, Hackbarth said.

“There are so many ripCleveland ple effects,” Hackbarth said.

“If this change were in place today, it would be directly impacting a host of communities and the COVID-19 relief they’re expecting.”

Loca l of f icia ls a nd c o n g r e s s i o n a l l a w m a kers in Michigan have also expressed concern about Sobieralski the OMB proposal. U.S. Sen. Gary Peters, D-Detroit, issued a letter to OMB in mid-March calling the potential effects “substantial and far-reaching.”

“If this change was finalized, communities in my home state of Michigan and across the country could lose access to vital federal resources that they rely upon,” according to Peters’ letter.

‘Devastating to the community’ A metropolitan area designation not only helps communities qualify for federal funding including community development block grants, but it also provides valuable data to companies that are considering locating in communities, said Rob Cleveland, president and CEO of Cornerstone Alliance, a Benton Harbor-based economic development organization for Southwest Michigan.

“The loss of an MSA designation will be devastating to the community,” Cleveland said. “It would eliminate in-depth accurate data that we use for economic development, workforce development, transportation, land use and other planning purposes. Reducing data and eliminating data that we get for the MSA designation will directly impact our area planning efforts and ultimately it will lead our community leaders to make decisions with less information.”

Berrien County Administrator Brian Dissette said whether a community is within a designated MSA is an early consideration of site selectors.

“At this point, we’re concerned about a downturn in block grant funding to all of the county, specifically to Benton Harbor and the Niles area, and we’re concerned about general economic development efforts,” Dissette said.

The Berrien County Board of Commissioners passed a resolution on March 18 in support of maintaining its local MSA designation. Berrien Count y Communit y Development Director Dan Fette told commissioners during the meeting that the proposed change could potentially eliminate monthly industry data, possibly disqualify the county from cost of living indexes, and could cause federal funding reductions for

transportation, planning and housing.

Joe Sobieralski, president and CEO of Battle Creek Unlimited, believes businesses will continue moving to areas where they can find talent regardless of whether it’s in an MSA. However, losing the designation could cause trailing repercussions that affect whether businesses will move to the area, he said.

“Our transportation system is not fully selfsufficient and relies on federal government supplements and dollars from the city’s general fund,” Sobieralski said. “Something like that could eventually affect employment in Battle Creek.”

In the dark Sobieralski also said that it remains unclear based on OMB guidance whether the change in MSA designation would mean less federal funding and data collection.

“They want to downgrade it but are not being forthcoming on what that will mean,” he said. “I also think it’s bad timing. I’m sure this was in the works for a while, but you’ve got all of this remote work and moving about. We need to take a pause and step back and wait to get past this pandemic.”

Sobieralski said Battle Creek Unlimited has had some conversations with business leaders on the proposed changes, but that the economic development organization is focused on moving past the pandemic. Despite a lack of notice from OMB about the change, Sobieralski believes the issue is gaining enough opposition that it could be paused.

In its January notice, the OMB said part of the

“There are so many ripple effects. If this change were in place today, it would be directly impacting a host of communities and the COVID-19 relief they’re expecting.”

— CHRIS HACKBARTH Director of State and Federal Affairs, Michigan Municipal League

proposal is based on “continuing change in U.S. population and activity patterns.”

However, local leaders from the potentially affected West Michigan communities told MiBiz they feel in the dark about the reasoning for the changes and what the effects will be.

“I’m not sure any of us really know what the cause of this was,” Cleveland said. “Losing the MSA designation will be significantly detrimental to communities like ours.”

Coming Soon!

CULTURE AND GENERATIONAL CHANGE APRIL 26, 2021 The workforce in West Michigan includes four generations — Boomers, Gen-X, Millennials, Gen-Y — with very different ideas about work and the workplace. We’ll dig into how West Michigan companies, nonprofits and governmental organizations are evolving to deal with the range of issues presented by the generational changes happening in the workplace.

We’ll also present a special webinar, featuring a panel of experts on the topic of generational change.

Don’t wait to be in this issue! Contact us by Wednesday, April 14 to advertise.

Contact Us Today! sales@mibiz.com editor@mibiz.com 616-608-6170

MiBiz / MARCH 29, 2021

5

REAL ESTATE & DEVELOPMENT

Kalamazoo County regroups after ‘golden opportunity’ for housing falls through

By KATE CARLSON | MiBiz kcarlson@mibiz.com KALAMAZOO — Kalamazoo County is determining how to allocate funding from a recently approved housing millage after a failed attempt to turn the vacant Lakeside Academy campus into a muchneeded housing development.

The county has been gathering public comment and hired former county Treasurer Mary Balkema as its housing director to oversee funding from the new Homes for All millage that voters approved in November. The .75-mill property tax will be levied for eight years — from December 2021 to December 2028 — and is expected to raise about $6.4 million in its first calendar year. The millage replaces a .1-mill tax that has raised nearly $800,000 annually over the past six years, which has helped more than 500 families secure affordable housing.

“Many of us knew for a while that something bigger was needed,” said Kalamazoo County Board of Commissioners Chairperson Tracy Hall.

The new millage expands on the existing tax by increasing the number of people who can access funding. It will also go toward creating permanent affordable housing. Previously, the funding was only available to families with children enrolled in a local school district, but the qualifications have broadened to include rent subsidy programs, constructing permanent housing units and support services for cost-burdened households.

The county has spent the past few months gathering public comment on exactly how the funding should be spent. The county has a severe shortage of affordable housing units, which has caused many people to live in tents, hotels, doubling up or live out of their cars, Balkema said.

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MARCH 29, 2021 / MiBiz

Kalamazoo County officials unsuccessfully offered $6 million to purchase the Lakeside Academy property in Kalamazoo for emergency and affordable housing. PHOTO BY ANDY BALASKOVITZ “Since no county in Michigan has ever levied a millage like this, we are kind of building the boat while we are in the water,” Balkema said.

Michigan State Housing Development Authority rent subsidy vouchers are also going unused because of the lack of available affordable housing, she said.

The county Board of Commissioners is planning a retreat on May 15 to determine a housing policy and vision for the new millage money. A request for proposals on affordable housing projects is expected in July. The goal is for funds to be released for approved projects in March 2022 from tax bills that are levied in December this year.

“The decisions will ultimately be made by the Board of Commissioners and so the projects will be picked by them and the policy will be set by them. I think there is a lot of wisdom in that because there will be continuity with the plan,” Balkema said.

“This process will live on in perpetuity and additional feedback can be given every year as we learn what works and doesn’t work. Next year we’ll do this work all over again.”

The timeline is strategic because it aligns with MSHDA application deadlines for housing incentives, Balkema said.

“There are resources available to create affordable housing such as (Low-Income Housing Tax Credits), but those are limited resources and don’t always get you all the way there or make a project feasible,” said Jason Muniz, vice president of Portagebased Hollander Development Corp. “That’s where I think the millage could play a key role.”

Meanwhile, construction costs have “skyrocketed,” which was exacerbated during the COVID19 pandemic in part because of supply availability and tariffs, Muniz said. Construction for housing is cost-prohibitive across the board for single and multi-family homes, making affordable projects that much harder, he added.

“Affordable housing” is defined by the U.S. Department of Housing and Urban Development as a household paying up to 30 percent of its income on housing expenses, which includes rent, utilities, taxes and insurance. Based on 2019 Census data, the median household income for Kalamazoo County is $56,511 for a family of four.

“We would like very much to be involved in adding more affordable housing through this process,” Muniz said. “Kalamazoo is our hometown, our

“Since no county in Michigan has ever levied a millage like this, we are kind of building the boat while we are in the water.”

—MARY BALKEMA Kalamazoo County Housing Director

backyard, even though we work all over the state. I am very optimistic about what the millage can do.”

‘Back to the drawing board’ The county planned to use funding from its recently approved housing tax to purchase the former Lakeside Academy property at 3921 Oakland Drive in Kalamazoo. Plans sought to create emergency housing for the large homeless community in the county, as well as turn part of the building into permanent affordable housing units.

The Lakeside Academy Board of Directors declined the county’s $6 million bid and instead opted to sell the property for the same amount of money to Oakland Finance LLC. The company is registered to Jordan Schau, an attorney with Lake, Parfait & Schau PLC in Kalamazoo. Schau did not respond to requests for comment from MiBiz. “This was like one of those golden opportunities that we thought we had and we couldn’t pass up,” Hall said. “This is our most challenging issue, housing in general.”

County commissioners and administrators took two tours of the facility and presented its plan to the Lakeside Academy Board of Directors in November 2020. A majority of the board members voted against the county’s proposal.

Losing out on purchasing the 55-acre property was disappointing, especially because there is not much available space in the county, Hall said.

“There were so many reasons why it was such a good project,” Hall said. “Now we’re back to the drawing board figuring out what’s next.”

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State lawmakers consider tax-free savings accounts for first-time homebuyers

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

F

irst-time homebuyers could save for a down payment or closing costs through new taxexempt savings accounts under legislation that’s designed to promote home ownership and retain talent in Michigan.

Under separate bills pending in both the state House and Senate that have cleared their respective committees, first-time homebuyers could save up to $50,000 in an account they open with a bank, credit union or other financial institution.

Designated accounts opened under the proposed First Time Home Buyers Savings Program could accrue tax-free earnings for up to 20 years.

Consumers who create an account to save for the future purchase of a primary residence could also claim an income tax deduction on their state tax return under the legislation. The bills would allow a single tax filer to take a deduction of up to $5,000 annually, and up to $10,000 Damoose for a joint return.

Bill co-sponsor Rep. John Damoose, R-Harbor Springs, touts the legislation as a way to “help even more Michigan citizens achieve what’s always been the foundation of the American dream, which is home ownership.”

Damoose described the Manoogian accounts as “an innovative savings device designed to encourage people to plan for the future with a specific goal of home ownership in mind.”

“Home ownership matters in Michigan. It leads to the economic stability in communities throughout our state,” Damoose said during a recent House Tax Policy Committee hearing.

State Rep. Mari Manoogian, D-Birmingham, says allowing residents to form tax-free accounts to buy their first home promotes financial literacy.

Helping people gain a small tax advantage to save for a future home purchase can also contribute to addressing “brain drain” of “our bright young folks to other states and large cities” that’s been occurring for years in Michigan, Manoogian said.

“We should be working to keep those young people and their talents and those new families here in Michigan,” she said.

The House Tax Policy Committee last week cleared two bills that allow the formation of the savings accounts and create the tax deductions. The bills are now up for consideration in the full House.

The Senate Finance Committee also passed its version of the bills and recommended approval in the full Senate.

Changes likely The versions that the House committee passed sought to address Michigan Department of Treasury concerns about the administrative burden of the savings accounts and ensure their proper use.

“This is a laudable goal, but the trick is in the effectiveness of the legislation and also its execution,” Paul Connors, legislative liaison with the Visit www.mibiz.com

Department of Treasury, told lawmakers in committee testimony earlier this month.

Despite the changes in the House bills since introduction, the Treasury Department still opposed the legislation. Connors urged lawmakers to get financial institutions involved in the discussion as they work to craft final versions of the legislation.

House Tax Policy Committee Chairman Rep. Matt Hall, R-Marshall, expects further changes in the bills. Legislation supporters “are trying to get to a place where everyone supports this,” Hall said.

Another change to the House version addressed a concern raised by state Rep. Steve Johnson, R-Wayland, about account withdrawals that do not meet requirements and become subject to a 10 percent penalty. Johnson cited an example of someone serving in the military who opens an account to save for a future home purchase and then gets deployed or re-assigned out of Michigan. At Johnson’s urging, the committee added an exemption to the penalty for military personnel.

The Legislature passed similar bills in late 2018 to allow tax-free accounts for first-time homebuyers, only to have them vetoed by then-Gov. Rick Snyder. He “indicated support for the goal, but questioned the use of the tax code to incentivize taxpayer behavior,” according to a House Fiscal Agency analysis of the legislation — House Bills 4289-4290 and Senate Bills 145-146.

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Realtors support Nine other states have enacted legislation to allow tax-free savings accounts for first-time homebuyers, according to Brad Ward, vice president of public policy and legal affairs at the Michigan Association of Realtors.

Most of those state laws have passed within the last few years and little information is available yet on their effectiveness in promoting home ownership, although “we do believe that this program can be successful (and) we want to be ambassadors for this program,” Ward said. Michigan Association of Realtors has been a “big proponent” of the idea, he said.

“It gets at part of the affordability question that we’re wrestling within in this state, from at least the savings side,” Ward said. “Owning a home is one of the fastest ways to build wealth in America and we want to make sure more people have that opportunity to do so.”

While few people will have the ability to deposit large sums into an account, even doing a few hundred dollars annually over a period of years adds up and “makes a big difference for them” when they go to buy their first home, Ward said.

Other organizations backing the legislation include the Michigan Credit Union League, the Michigan Mortgage Lenders Association, the Home Builders Association of Michigan, chambers of commerce in Grand Rapids and Detroit, the Michigan Chamber of Commerce, and Habitat for Humanity.

As lawmakers continue to work on the bills, the Michigan Association of Realtors remains open to working with the state Treasury Department to address concerns that also include “guardrails” to ensure consumers properly use the savings accounts for eligible purposes, general counsel Brian Westrin said.

“We want to make sure that this gets established and that those expectations for an account holder are clear,” Westrin said.

Rely on MiBiz to break through the noise, go beyond the easy stories and deliver top-notch local business news and information not available from any other source.

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West Michigan Business News & Intelligence

MiBiz / MARCH 29, 2021

7

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Patient Co.’s SimPull equipment assists hospital staff with moving patients, which company officials say can help prevent injuries. COURTESY PHOTOS

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MARCH 29, 2021 / MiBiz

By MARK SANCHEZ | MiBiz msanchez@mibiz.com GRAND RAPIDS — The $1 million raised from investors moves medical product startup Patient Co. closer to the marketplace for an innovation designed to assist nurses and other caregivers moving hospital patients.

The company’s SimPull safety equipment gently slides a patient laterally from their hospital bed and onto a gurney to transport them, for instance, for a surgical procedure or diagnostic test such as a medical scan.

Founders of the Grand Rapids-based Patient Co. — Heureman which has offices in Traverse City and Scottsdale, Ariz. — tout SimPull as a way to prevent muscle strains or other injuries to nurses and caregivers, and to drive efficiency.

Instead of taking several people to move a patient from a bed to a gurney or back, the SimPull device allows a single Peters caregiver to do it.

“SimPull is the hood ornament for health care worker safety and effective health reform,” said Ryan Peters, Patient Co.’s co-founder and chief operating officer whose background is in population health management. “It’s a really great opportunity with the product.”

Peters and Andrew Heuerman, Patient Co.’s cofounder and CEO, say SimPull can prove particularly useful at small hospitals that are lightly or shortstaffed, or facilities experiencing a nursing shortage.

Federal Occupational Health and Safety Administration regulations require that a clinician

lift no more than 35 pounds at a time. As a result, it usually requires six or seven people to move a patient laterally and takes more than 20 minutes just to gather enough staff.

SimPull requires only one clinician and takes just a couple of minutes, creating “pretty staggering” workflow efficiency and time savings for hospital staff, which comes on top of improved safety, Heuerman said.

“This is one of the most common ways that nurses are getting injured,” he said. “In order to protect our nurses, we feel like this is a problem we have to prioritize through development of this technology.”

Product development Peters and Heuerman met when they worked together on a project at Spectrum Health Innovations that led to SimPull’s development.

Through Spectrum Health Innovations, they analyzed a problem raised in 2016 by a patient transport manager who was worried about injuries to his coworkers, specifically from lateral patient transfers, Heuerman said.

“He just thought there had to be a better way to do it. He felt, is there some way we could look into this further and create a device that could help solve this problem?” Heuerman said.

SimPull came out of that process at Spectrum Health Innovations, which analyzed the feasibility and vetted the market potential, and designed, developed and tested a prototype, Heuerman said.

He and Peters ultimately spun the company out of Spectrum Health Innovations to further develop and take SimPull to market.

Patient Co. also went through Conquer Accelerator, a business accelerator operated through a partnership between Spartan Innovations L3C and venture capital fund Red Cedar Ventures, both of which are subsidiaries of the Michigan State University Foundation.

Patient Co. recently closed on the $1 million seed capital round that drew about a dozen investors including Spectrum Health, Red Cedar Ventures, Invest Detroit Ventures, MedTech Ventures, and Quantum Medical Concepts, an early-stage investment fund the Michigan State Medical Society formed in 2017.

The capital, some of which came in early 2020, enabled Patient Co. to take a prototype and “turn it into something we can actually use and sell in the field,” said Heuerman, a Grand Valley State University graduate with a degree in kinesiology.

The company this year aims to move further down the commercialization pathway, including going through federal regulatory review. They hope to begin selling SimPull to hospitals by late summer or early fall.

Using the capital, the company plans to pilot the SimPull this summer at five partnering health systems, including Spectrum Health in Grand Rapids and Sparrow Health in Lansing, Heuerman said.

He hopes the health systems piloting SimPull turn into paying customers, and believes that SimPull can prevent thousands of injuries a year at hospitals.

“This device from a value side is really straightforward. It should be a really clear value-add for hospitals,” he said. “We’re really excited about what this product can do for health care.

“We think this is something that everyone needs.”

Patient Co. has a contract with Keystone Solutions Group in Kalamazoo to produce SimPull.

The company also intends to develop a nextgeneration version of SimPull for heavier, bariatric patients, plus other safety equipment for use in patient transports, Heuerman said. As well, Patient Co. could work with and support other innovators to develop their ideas or acquire innovations that are in their early stages, he said.

“At the end of the day, this isn’t the only product that we’re looking to work on,” he said.

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reporter’s NOTEBOOK

VACCINE INCENTIVES

Mark Sanchez writes about finance, health biz and life sciences.

616-608-6170 • msanchez@mibiz.com

Continued from page 1

West Michigan health care executives set aside competition during pandemic

Belle Tire’s small employee incentive is a typical example of what some companies are doing to encourage employees to get a COVID-19 vaccine, particularly workers who are in direct contact with the public. Employers offering small incentives are generally using a cash reward or additional paid time off, which workers can use for their vaccination visit and afterward if they don’t feel well as the vaccine takes effect in the body.

T

Avoiding coercion However, experts say employers need to consider an array of federal regulations that are intended to prevent coercion as they offer vaccine incentives to employees.

As with workpla c e w e l l ne ss programs, federal regulations require that employers Guinn provide a “reasonable accommodation” for employees to earn an incentive if they opt not to get vaccinated, Kristen Guinn, a shareholder at Grand Rapids-based Warren Smith Haughey Rice & Roegge PC, said during a presentation last week at the Grand Rapids Area Chamber of Commerce’s Health Care Summit.

“They should provide alternative ways to earn those incentives by employees who do not want to receive a vaccine.

For example, maybe attending training or a continuing education program,” Guinn said.

Federal regulators view employers’ COVID-19 vaccine incentives similarly to incentives to encourage wellness program participation: Employers may offer them to encourage participation, but cannot make an incentive so large or valuable that an employee feels compelled or coerced to participate.

A federal regulatory agency may consider an incentive to be coercive if it is “so large that the average employee has no choice but to accept,” said labor and employment attorney Richard Warren, a partner at Miller, Canfield, Paddock and Stone PLC. Some of Warren’s clients offer $100 cash incentives for employees to get a COVID-19 vaccine, he said. Warren’s “very comfortable that $100 or less would not be deemed coercive by any federal agency.”

The federal Equal Employment Opportunity Commission (EEOC) under former President Trump proposed rules Visit www.mibiz.com

Local health care workers administer COVID-19 vaccines at the DeVos Place in Grand Rapids. PHOTO COURTESY OF SPECTRUM HEALTH last year that allow minor vaccine incentives, Warren said. The EEOC withdrew the proposed rule after President Biden took office in January.

While a new EEOC proposal is expected soon, the withdrawal for now leaves uncertainty about the level of incentives that employers can offer, Warren said.

“So we are left with no firm guidance, other than it can’t be coercive,” he said.

“There’s no bright line dollar amount or bright line value amount that will cross the line between an incentive into coercion, and that’s what the agencies are using. You can’t coerce someone into getting the vaccine.”

‘Legal uncertainty’ A coalition of more than 30 national trade associations in February wrote to the EEOC, urging it to “quickly issue guidance clarifying the extent to which employers may offer employees incentives to vaccinate without running afoul of the Americans With Disabilities Act and other laws enforced by the EEOC.” “Employer-provided incentives can assist governments in quickly and efficiently distributing vaccines. Legal uncertainty about providing such incentives, however, has many employers concerned over liability and has made them hesitant to act,” according to the letter.

Employers may mandate that employees get vaccinated, although the Americans with Disabilities Act requires that they evaluate who cannot receive a vaccine because of a medical condition or disability, Guinn said. The law requires employers to “attempt to make reasonable accommodations” for those employees — such as remote work or absent under hardship — before excluding them from the workplace, she said.

Guinn urges employers to follow best practices that include creating a written policy, tailoring a vaccine program, and providing reasonable accommodations to employees.

Many of the employers Warren represents that offer incentives consider getting their workforce vaccinated as a possible competitive advantage.

“There’s no bright line dollar amount or bright line value amount that will cross the line between an incentive into coercion, and that’s what the agencies are using.

You can’t coerce someone into getting the vaccine.”

— RICHARD WARREN Partner, Miller, Canfield, Paddock and Stone PLC

The Employers’ Association in Grand Rapids recently polled a group of members on behalf of MiBiz on whether or how they are offering vaccine incentives.

Among the employers that responded, a handful said they were offering additional paid time off. A few contacted by MiBiz declined to discuss their policies.

“I don’t have any employers or clients that don’t take COVID-19 seriously. They know what a disruption it has caused in their workflow, customer flow and revenue, and they want these employees vaccinated and not result in any work stoppages because they are sick or out,” Warren said, adding that telling clients and customers that workers are vaccinated can create “more of a sense of ease.”

That peace of mind for customers is part of the rationale for the $25 per-shot bonus at Belle Tire.

The company wants to keep employees safe and ease customers’ angst when they come into a store for a vehicle repair, Barnes said.

“We want to make sure our customers coming in feel confident and safe,” he said.

he COVID-19 pandemic that stretched health systems during the past year also brought together health care executives as they responded to the crisis.

Leaders at health systems say they quickly set aside their competitive natures and kept in regular contact in the last year. Chief medical officers talked daily to share data and best practices for managing the crisis, keeping staff safe, treating patients with COVID-19, and how to plan and prepare.

“We’ve all learned so much,” Dr. Matt Biersack, chief medical officer and interim president at Mercy Health Saint Mary’s, said last week in a virtual panel held during the Grand Rapids Area Chamber of Commerce’s annual Health Care Summit.

“It’s been incredible to collaborate,” Biersack said. “We’re all thinking about the population and the community that we have here in the greater Grand Rapids area far more than we ever did before.”

Biersack joined his fellow chief medical officers, Dr. Ronald Grifka at Metro Health-University of Michigan Health and Spectrum Health’s Dr. Joshua Kooistra, in a Zoom discussion on the pandemic’s effects on health care.

“At times you just need to work together as a team to help protect the community,” said Grifka, who also cited the “collegiality” among health systems and local health departments resulting from the public health crisis.

One area of collaboration Biersack noted was sorting data by age and demographics to identify who and what communities are the most vulnerable to the coronavirus and COVID-19 — and “how do we serve them better and how do we work more closely together?”

“Those are learnings that I hope we carry with us long, long into the future,” he said.

The biggest collaboration has been with the West Michigan Vaccine Clinic at DeVos Place in downtown Grand Rapids that’s operated through a partnership between Mercy Health, Spectrum Health and the Kent County Health Department. The clinic, which opened in January, has the capacity to do 20,000 or more vaccines a day, although doses remain somewhat limited even with increased availability of late.

The three Grand Rapids-area health systems participate in calls with the state twice a week talking about vaccine dose availability, Kooistra said.

“As eligibility opens up, certainly supply is still going to be the constraining factor,” Kooistra said. “Our hope is that Pfizer, Moderna and Johnson & Johnson will increase manufacturing efforts. I’m sure they’re trying to fire on all cylinders right now, but our hope is that we will see increased supply in the next month or so. But the state of Michigan has told us that it’s still going to be constrained for the next few weeks.”

Pfizer Inc. has been ramping up production of its vaccine, including at its primary site in Portage, according to Molly Williams, the company’s director of state government affairs. Pfizer has contracts to sell the U.S. government 300 million vaccine doses this year, Williams said.

The company has so far shipped 70 million doses since December. It expects to make 120 million doses available to the federal government by the end of March and 200 million by the end of May, Williams said. Pfizer should ship the remaining doses to the U.S. government by the end of July, she said.

Improvements in manufacturing processes have reduced vaccine production and release times from 110 days to about 60 days, Williams said.

“We foresee no issues in delivering on the commitments we’ve made to the U.S. government. Our facility in Kalamazoo is the primary manufacturing site of our COVID-19 vaccine in the U.S. and we anticipate no interruptions in shipments at this facility as we look to scale up our production this year,” she said.

As Pfizer and the other vaccine makers increase production, vaccine eligibility expands and some restrictions loosen in Michigan and around the U.S., the task for health systems now is to ensure vaccines are administered equitably and people are educated about vaccine safety, Grifka said.

“The more people we get vaccinated the better we’ll be,” he said. “This is how we’re going to get back to normal living.”

The Michigan Department of Health and Human Services on April 6 expands eligibility for a vaccine to anyone 16 years old and up.

Other long-term changes for health systems brought on by the pandemic include the use of telehealth that soared early in the pandemic, Grifka said.

Grikfa also sees the possibility that even after the pandemic wanes, people will wear face masks during flu season each winter to protect themselves. He cited U.S. Centers for Disease Control and Prevention data showing the number of people in the U.S. who had the flu — which annually kills thousands — declined dramatically as a result of face mask mandates, better hand hygiene and social distancing.

“There may be some long-term effects that are very positive for the community,” Grifka said. “These keep people out of the hospital, out of the doctors’ offices, and back at work and with their families.”

MiBiz / MARCH 29, 2021

9

FOCUS: UTILITIES & ENERGY

Utilities chart renewable energy future as state mandates level off

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

M

ichigan’s mandates for renewable power and energy efficiency programs — first set in 2008 and slightly increased in 2016 — are scheduled to level off this year, although it may make little difference as the clean energy transition rolls on under market forces.

The state’s two largest utilities have announced clean energy targets over the next few decades to virtually eliminate carbon emissions from their power generation. Meanwhile, industry experts expect early and anticipated climate action from the Biden administration to further drive the clean energy sector through policy levers including incentives and placing a high price on carbon emissions.

Add in the ongoing decline in wind and solar prices and customer demand for renewables, and consensus is growing among experts that Michigan’s clean energy standards worked as intended to jumpstart the industry, but that they’re likely no longer necessary.

“Utilities are building more and more renewables just to keep up with the demand they’re getting,” including from voluntary renewable energy purchasing programs, said Tim Lundgren, a partner at Varnum LLP specializing in energy. “That is pushing them way beyond the renewable portfolio standard, which in a sense has outlived its usefulness.

It was great to kickstart things, but at this point the demand side is pushing renewable energy development and utilities are responding to that.”

Democratic lawmakers proposed legislation last year to expand the 15 percent renewable energy standard, but it failed to gain traction in the Republican-controlled state Legislature. The 2016 energy law rewrites that increased the renewable target from 10 percent to 15 percent by 2021 also created a new long-term utility planning process known as Integrated Resource Planning (IRP). Under state law, regulated utilities are required to model various scenarios for renewable penetration that factors in costs and emissions.

“The RPS has been very beneficial for a lot of our members. It has enabled the market to get going in Michigan,” said Laura Sherman, president of the Michigan Energy Innovation Business Council.

“At this point, given the utility IRPs, cost declines and the shift to renewables, we’re at the point where this is market-driven change and doesn’t necessarily need to be driven by mandates.”

Brandon Hofmeister, senior vice president of governmental, regulatory and public affairs at Jackson-based Consumers Energy, agreed that market forces and long-term planning are playing a much larger role in the utility’s renewable energy build out. In its first long-term plan filed with state regulators, Consumers plans to build or contract for 6,000 megawatts of new solar power by 2040.

“Our IRP obviously blows past a 15 percent renewable portfolio standard pretty aggressively,” said Hofmeister, adding that the utility “wouldn’t be opposed” to expanding the RPS, unlikely as it is in the state Legislature.

Among more immediate concerns for MEIBC and other clean energy advocates is the sunsetting of energy efficiency programs for municipal utilities and electric cooperatives under the 2016 law. Absent any change to state law, those utilities will no longer be required to offer efficiency programs beyond 2021.

“Energy waste reduction is critical for meeting our carbon reduction goals,” Michigan Department of Environment, Great Lakes and Energy Director Liesl Eichler Clark told MiBiz. “We will see that look different at the end of the year because municipal utilities and co-ops will switch over to voluntary.

We’re going to be watching that very carefully.”

Federal policy outlook Although more targeted bills are expected or are moving through the state Legislature involving taxation on solar projects and lifting caps on utility rooftop solar programs, some of the major energy policy shifts ahead may be coming from the federal level.

Shortly after taking office, the Biden administration announced goals for a carbon-free power

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MARCH 29, 2021 / MiBiz

STOCK PHOTO

Clark

Hofmeister

Jameson

sector by 2035 and overall net-zero carbon emissions economy-wide by 2050. Democrats controlling the U.S. House and Senate may also pursue 100 percent clean energy targets, with House Democrats introducing a bill in early March largely mirroring Biden’s goal.

“It’s conceivable you could get a (federal) clean energy standard set up in a bipartisan way,” Hofmeister said, referring to other potential clean energy policies through budget reconciliation or expanding renewable energy tax incentives.

Another climate change directive Biden laid out at the start of the administration that could have sweeping effects across the energy sector is revisiting

Lundgren

Sherman

the social cost of carbon, which places a per-ton price on carbon emissions. The Obama administration first used a social cost of carbon of around $50 per ton for climate regulations. It was scaled back to around $5 per ton under former President Trump.

The Biden administration is reportedly considering expanding the calculation to include environmental justice and long-term effects on disadvantaged communities, and reports have suggested it could fall in the $100-per-ton range.

“It makes the benefit side of reducing carbon much more valuable,” Hofmeister said. “As we’re reducing carbon emissions across our business, things that are less than the social cost of carbon might be cost-justified versus (technologies) that are five- to 10-times higher.”

Varnum’s Lundgren expects to see a new social cost of carbon calculation particularly affecting oil and gas pipeline projects.

Meanwhile, clean energy advocates and state officials also are tracking closely what the Biden administration’s infrastructure spending package will look like, which has reportedly been pegged at around $3 trillion.

“There’s so much we could do with more federal money on the climate side around infrastructure, whether it’s building out electric vehicle charging, weatherizing houses in Michigan or electrifying heating and buildings,” said Charlotte Jameson, program director for legislative affairs, drinking water and energy with the Michigan Environmental Council. “To my mind, a lot of that work needs to happen particularly in low-income and communities of color.”

Eichler Clark said the Whitmer administration will be closely following federal infrastructure plans with an eye toward water quality and climate change.

“Obviously, we’re interested in what actions the Biden administration might take around climate and mobility and how that overlays with what we’re doing in the state,” she said. “We’ll be paying a lot of attention to that.”

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To transport the same amount of energy Line 5 delivers by rail, barge or truck means more traffic, more emissions, more risk and higher fuel costs.

Governor Whitmer wants Line 5 shut down with no plan to replace the essential energy it delivers.

Take action at enbridge.com/supportLine5.

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MiBiz / MARCH 29, 2021

11

FOCUS: UTILITIES & ENERGY

5 energy projects to watch

T

he transition away from large coal plants is reducing power-sector emissions while also changing the state’s physical landscape. Hulking, centralized power plants are leaving vacant footprints for redevelopment, including in Grand Haven with the recent demolition of the J.B. Sims Generating Station. Meanwhile, more distributed wind and solar projects are also raising key land-use questions and, at times, vocal opposition. Here’s a list of five large-scale generation projects planned around West Michigan.

3. Calhoun Solar Center

— Compiled by Andy Balaskovitz

4. Freshwater Solar

1. Heartland Farms Wind Project Size: 200 megawatts (MW) Source: Wind Location: Gratiot County Status: The Michigan Public Service Commission in March approved a build-transfer agreement between Consumers Energy and developer Heartland Farms Wind Project LLC for the project, which is expected to be in operation by the end of 2022. Consumers plans to own and operate the 72-turbine project by then in order to qualify for federal Production Tax Credits.

2. Indeck Niles Energy Center Size: 1,100 MW Source: Combined cycle natural gas Location: Niles Status: Construction on this $1 billion power plant started in the summer of 2019 and is scheduled to be operational within the next year, said David Hicks, vice president of business development for Indeck Energy Services, which co-owns the facility with South Korean companies Korean Southern Power Co. (KOSPO) and Daelim Corp.

The combined cycle natural gas-powered facility, which was first proposed more than 20 years ago but faced yearslong delays, will produce electricity for the PJM power grid that reaches into Southwest Michigan and displace power from retiring coal plants elsewhere in the region. “Particularly in the last 10 years, you’ve seen a very strong movement to replace aging coal-fired and nuclear generation with state-of-the-art natural gas generation and renewable power,” Hicks told MiBiz.

Size: 200 MW Source: Solar Location: Convis Township, Calhoun County Status: Chicago-based renewable energy developer Invenergy LLC recently announced a 25-year agreement to sell 140 MW of power from the project to Consumers Energy. The power purchase agreement is subject to Michigan Public Service Commission approval, but the project aligns with Consumers’ plan to add about 1,100 MW of solar to its portfolio by 2024. The 1,200acre project is expected to be completed in 2022.

Size: 200 MW Source: Solar Location: Day Township, Montcalm County Status: New York-based developer Ranger Power’s proposed $200 million solar project is one of two large-scale renewable energy projects under consideration in Montcalm County and would be the company’s third large-scale solar project in Michigan. As of late last year, the developer was still securing leases with private landowners for the 2,000-acre project, the Greenville Daily News reported.

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5. Montcalm Wind Size: 375 MW Source: Wind Location: Montcalm County Status: Virginia-based developer Apex Clean Energ y says wind resources in Montcalm County, as well as large swaths of rural land and access to transmission, would make an ideal site for a large-scale wind energy project. Plans call for spreading 75 wind turbines across active farmland. While the project has sparked backlash from area residents with concerns about changes to the landscape, supporters say it would help local residents diversify their income with lease agreements and provide revenue to local schools and governments.

As of last month, developers were reportedly still gathering wind resource data from meteorological towers but hope to have the project operational by 2024. Apex Clean Energy is nearing the completion of a 385 MW wind project in nearby Isabella County.

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ILLUSTRATION BY KAYLEE VAN TUINEN

1. Heartland Farms Wind Project - Gratiot County 2. Indeck Niles Energy Center - Niles 3. Calhoun Solar Center - Convis Township, Calhoun County 4. Freshwater Solar - Day Township, Montcalm County 5. Montcalm Wind - Montcalm County

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OCTOBER 15, 2018 VOL. 30 • NO. 26

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

Stephen Waterbury, Warner Norcross + Judd LLP.

If your company has been featured in MiBiz, the exposure you received reached more than 35,000 business executives in West Michigan. Now you can share the news about your company by ordering MiBiz reprints.

VOL. 26 • NO. 25

Small business owners need to plan ahead to ensure smooth leadership transition

By NICK MANES | MiBiz nmanes@mibiz.com

F

81%

msanchez@mibiz.com

F

Preparing for Transition or small family-owned businesses, getting the right succession plan in place can be a long, drawn-out undertaking.

Just ask Marcia Elgersma.

She and her husband, Al Elgersma, realized more than a decade ago that they needed to figure out a succession plan for Al’s Excavating Inc., the nearly fourdecade-old small business they co-own in Hamilton, Mich., about 10 miles southeast of Holland. At the time, they wanted to outline the roles their children would take on in the excavating company going forward.

But that was in the year 2000 and despite their best intentions, the planning process ultimately ended unsuccessfully.

“It just didn’t work at all,” said Elgersma, the company’s secretary and treasurer. “We didn’t understand the processes and we didn’t know how to determine who was Percentage of West capable of leading.”

Michigan familyIn the meanowned businessses time, the Elgersmas with no succession plan, according to found it was easier the Family Owned to grow their comBusiness Institute. pany to $6 million in annual sales than it was to figure out the transition plan, she said. After their failed try at succession planning, the business went back to its old model and the owners “just hunkered in.”

It wasn’t until more than a decade later and based on a referral from a friend that the owners of Al’s Excavating met with

ground, make people calm and Waterbury’s career accomplishfind ways to help them out. ments as an M&A adviser, menThat’s a rare commodity, espetor and community builder cially with an intelligent attorearned him recognition as the riends and family saw Stephen Waterbury heading toward a ney who does a lot of deals.” first-ever winner of the Western career in law before he ever did.

Barnes & Thornburg LLP Michigan Dealmaker Hall of A desire to serve others and help them succeed was the drivattorney Michael Campbell, Fame Award. ing factor that led him to law school and to go on to a lengthy, who served with Waterbury Waterbury is “the last of accomplished legal career. on the board of ACG Western a dying breed,” said Richard After graduating with an undergraduate degree from Michigan State Michigan during the Noreen, CPA, a tax University, he applied and earned acceptance to Harvard Law School. early 2000s, agrees. partner at BDO USA A Lansing native, he later joined Warner Norcross + Judd LLP in M&A AWARDS He’s also been on the LLP who has known Grand Rapids, where he’s practiced business law for nearly 39 years.

INDUCTEE: other side of some Waterbury for a During his career, he has handled the legal work for hundreds of mergWESTERN MICHIGAN deals involving cliquarter-century and ers and acquisitions domestically and globally, and served as a mentor DEALMAKER ents Waterbury repworked with him on to the firm’s young associate attorneys at the dawn of their careers.

HALL OF FAME resented, and praises several client trans“Others assumed I would go into law earlier than I assumed I would him for his approach. actions. He praises go into law,” Waterbury said discussing his career during an interview “Steve is a true gentleman.

Waterbury’s “calming influat the law offices of Warner Norcross + Judd overlooking downtown He’s sharp. He’s respectful of ence” and consensus-building Grand Rapids.

SERVING WESTERN MICHIGAN SINCE 1988 everybody — the clients, the approach on getting dealsBUSINESS done.

“I ended up viewing it as a way of serving people — I wanted whatother attorneys. He’s a pleasure “No matter how contentious ever I did to have that be a central component,” he said. “At its highest to work with, even if he’s on the something was, Steve always and best, the legal profession is a service profession focused on helpother side,” Campbell said. found a way to find common ing people succeed.”

By MARK SANCHEZ | MiBiz

COPYRIGHT 2018 © MIBIZ.

Marcia and Al Elgersma, the owners of Hamilton-based Al’s Excavating, were typical of many small family-owned business owners in that they lacked a formal succession plan to transition to the next generation of leadership. After a failed attempt to develop a plan, the company tapped a team of local advisers to develop a leadership strategy and succession plan that it plans to launch Dec. 1. PHOTO: KATY BATDORFF business consultants and did a deep dive into the makeup of the family and analyzed which members were qualified to hold the various leadership positions.

Such delays in putting together a formal plan of succession are not uncommon among small and middle-market companies, experts say. In West Michigan, 81 percent of family-owned businesses lack a formal succession plan, according to the results of a study conducted by the Family Owned Business Institute (FOBI), a joint project of the Grand Valley State University Seidman College of Business and Western Michigan University’s Haworth College of Business.

Simply having a succession plan in place is not really enough for most companies, sources said. Rather, families and other shareholders in the business should do a thorough analysis of the company itself and the different people who could take on leadership roles, said Kirk Koeman,

a partner at DWH LLC, a Grand Rapidsbased business consulting firm.

Koeman was one of a handful of people to advise the Elgersmas as they put their plan together.

“In the case of Al’s Excavating, it took two years to make changes in the company,” Koeman told MiBiz. “Typically, there is a mindset that the owners’ sons will just take over. In many middle-market companies, that’s not always feasible, and you don’t really know that until someone from the outside talks with people in the company. … These people can still be owners, but they don’t have to be managers.”

During the two-year analysis of Al’s Excavating — during which time DWH served as general manager of the company so it could continue operating during a busy construction period — the research showed that members of the Elgersma family from both the second and third Continued on next page

COPYRIGHT 2014 © MIBIZ. Print subscriptions are free to qualified individuals who are employed in West and Southwest Michigan. For further information about MiBiz, visit www.mibiz.com.

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

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MARCH 29, 2021 / MiBiz

PHOTO: KATY BATDORFF

A focus on serving others serves Waterbury well during four-decade legal career

SEPTEMBER 29, 2014 SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

HELMINSKI PILOTS AUXO TO GROW COMPANIES WHILE MAINTAINING WHAT’S ‘SACRED’

By JESSICA YOUNG | MiBiz jyoung@mibiz.com

J

eff Helminski, co-founder and managing partner of Auxo Investment Partners in Grand Rapids, successfully leveraged his atypical experience and path into the world of private equity in multiple deals last year.

Helminski has a diverse professional background, including experience in manufacturing engineering, high-volume assembly operations management and real estate development. His firm, Auxo, now specializes in investing in and growing founder- and family-owned industrial, manufacturing and business services companies.

While he has managed dozens of transactions involving hundreds of millions of dollars during his career, Helminski believes last year’s transactions stand out as significant in establishing Auxo’s partnership-based model and the firm’s closely-aligned relationship between investors and fund managers.

With a fully subscribed fund, Helminski had the ability to invest in 10 to 15 companies in the first few years after building Auxo from scratch. Last year, Auxo

WINNER/INVESTOR: JEFF HELMINSKI

Co-Founder and Managing Partner, Auxo Investment Partners

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

evaluated hundreds of opportunities and closed on several transactions, including deals for Prestige Stamping Inc. and Andrie LLC. “Both companies had a strong focus on people and culture with honest, hardworking, down-to-earth people throughout the organization from the shop floor to the C-suite,” said Helminski, the winner of the investor category in the 2019 MiBiz Dealmakers of the Year Awards. “The sellers of the businesses, both families, cared deeply about the legacy of the company, the employees and making sure they found a successor that was going to provide them with not only sustainable employment, but hopefully, greater opportunities going forward.”

The businesses found a perfect fit in values and approaches with Auxo, according to Helminski.

The October 2018 deal for Prestige Stamping was Auxo’s fifth acquisition in 13 months. The Michigan-based niche manufacturer of custom-engineered stampings for the fastener industry selected Auxo as the buyer even though the company was not the highest bidder, according to Helminski.

The reason: The seller was concerned about the future of the company’s employees and younger generations of the founding family that remained in the business, which aligned better with Auxo’s values and longer-term investment approach.

In February, Auxo acquired Andrie, a bulk marine transporter of specialty products including cement, liquid asphalt, light oil petroleum products, and calcium chloride throughout the Great Lakes. Andrie operates a fleet of 19 tugs and barges out of Muskegon, Helminski’s hometown.

The company, a mature industrial business and “market leader in the niche that they serve within their sector,” checked important boxes for Helminski.

The acquisition also followed the firm’s December 2017 deal to buy Metairie, La.based M/G Transport Services, an operator of inland barges. The two firms now operate as Auxo Marine, a newly formed platform company.

When Helminski launched Auxo with partners Jack Kolodny and Fred Tedori, the team made “a very conscious decision” to be based in Grand Rapids.

“Part of that was because the values of West Michigan align with our values, but also, to put us this close to a large number of the kinds of businesses that we’re interested in connecting with throughout the Great Lakes region,” Helminski said.

OCTOBER 14, 2019 VOL. 31 • NO. 26

Continued

Jeff Helminski, co-founder and managing partner, Auxo Investment Partners.

MIBIZ PHOTO: KATY BATDORFF

Being based in the same community as many family- or founder-owned businesses is important when the firm is communicating with a potential target, he added.

“My background is not the prototypical path to being in the private equity investing world,” Helminski said. “When I’m having a conversation with a family that is thinking about this transition that is often partly emotional and partly financial, I can talk to the family and say ‘here’s my story, here’s my background, this is the way I grew up in West Michigan.’ It makes a difference.”

Even so, specializing in the acquisition of family-owned businesses also comes with its own set of unique challenges and opportunities.

“What’s interesting is when (the businesses) have been so successful and there’s a big enough end market that they could try and grow into that they often just haven’t done yet,” he said. “In knowing that they need to do certain things differently or

professionalize certain aspects of the business that haven’t yet been professionalized, or haven’t been developed into a more scalable function within the company, that’s going to take change.”

Stabilizing long-standing, familyowned business cultures while at the same time growing profits is “one of the most difficult things” Auxo does.

“It’s a delicate balancing act between these two seemingly competing interests of stability and maintaining that which is great, with changing enough to accomplish the growth at a higher rate than what they’ve historically done,” Helminski said.

Pre-transaction, the firm researches not only a potential target’s financial viability but also its culture and talent.

“We have a roadmap to be able to see what things are sacred and we want to really protect within the business, and what things can be done better if the company is going to grow and scale up beyond the point that they’ve achieved today,” he said.

COPYRIGHT 2019 © MIBIZ

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Renewable natural gas, battery storage to play key roles in low-emissions future

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

T

he ability to store intermittent renewable energy from wind and solar and capturing methane emissions from common waste streams to displace natural gas usage are two technologies poised to play a bigger role in a lower carbon future.

W hile they play separate roles and are at different stages of adoption, energ y storage and biogas — also known as renewable natural gas — are poised for growth under increasingly aggressive state and federal climate policies.

They also both face similar barriers to more widespread deployment, notably cost and supportive policies.

“That’s how most new technologies are introduced Peretick to c om merc ia l s y stem s: They start out pretty high on that cost and adoption curve. As more is produced and becomes more prevalent, the cost generally starts to decline pretty quickly,” said Michigan Public Service Commissioner Katherine Peretick, who was appointed by Gov. Gretchen Whitmer in December.

Peretick was formerly the director of engineering at Toronto-based energy storage project developer NRStor Inc., which focuses on the commercialization of storage projects. Already in her role at the MPSC, Peretick is helping lead an energ y storage working group laid out in Whitmer’s MI Power Grid initiative.

Peretick says energy storage technology is still “undervalued” despite being “very advanced.”

The electric vehicle industry has helped push battery storage in particular, which has spilled over into the power sector.

“Us in the electric power industry have been seeing the benefits of the scale and cost benefits the electric vehicle industry has generated,” Peretick said.

In 2018, t he Federal Energ y Reg ulator y Commission issued an order directing regional power grid operators to begin integrating and appropriately valuing energ y storage. The Midcontinent Independent System Operator (MISO), whose territor y includes the Upper Peninsula and most of the Lower Peninsula, in March requested a three-year extension for doing so, generating opposition from clean energ y advocates.

Despite relatively high costs and a lack of storage mandates in Michigan, supporters tout its versatility.

“It can be used really in any part of the market, whether it’s wholesale, retail or even residential,” Peretick said. “It has so much value that it can be used throughout the system. The main reason it hasn’t been adopted to its full potential at this point is because of these legacy restrictions on implementation and how

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“There’s all of these different value streams that come from batteries. It could be a supply asset, but also useful on the distribution grid to improve reliability.”

— BRANDON HOFMEISTER,

SVP of Governmental, Regulatory and Public Affairs at Consumers Energy

you structure those business models and pay for those services.”

Lawmakers in Lansing have directed state regulators to study battery storage’s potential in Michigan, while major utilities see it playing a larger role in the future.

Jackson-based Consumers Energy plans to file its next long-term energy plan with regulators in June, and storage may play a bigger role than previously forecasted, said Brandon Hofmeister, the utility’s senior vice president of governmental, regulatory and public affairs. Consumers has already rolled out pilot storage projects on its distribution grid and proposed in its latest rate case a residential storage pilot program that would allow batteries to essentially act as backup generators.

“There’s all of these different value streams that come from batteries,” Hofmeister said. “It could be a supply asset, but also useful on the distribution grid to improve reliability.”

Renewable natural gas Consumers Energy also is “definitely taking a look” at renewable natural gas, which will be relied upon in part to meet the utility’s net-zero methane emissions goal by 2030 for its natural gas distribution system. Although about 80 percent of that will be done with delivery infrastructure improvements, the remaining 20 percent will be met using renewable natural gas.

“We don’t need a lot of RNG because it takes a lot of methane out of the atmosphere and it’s a powerful carbon abatement, too,” Hofmeister said.

Renewable natural gas is made from anaerobic digesters that process waste from sites including landfills and farms. It can be used for transportation, heating and electricity, and can also be added to existing conventional natural gas pipelines.

Det roit-based DT E Energ y is t he on ly Michigan utility that offers a program for customers to voluntarily purchase RNG. Its subsidiary

DTE Biomass Energ y is also developing RNG projects in Wisconsin.

Last year, San Francisco-based Brightmark LLC announced a partnership with three West Michigan farms that will process waste from the dairy operations in anaerobic digesters at Beaver Creek Farms in Coopersville. After the conversion, the RNG is injected into a local gas pipeline.

In February, state Sen. Rick Outman, R-Six Lakes, introduced Senate Bill 138 that directs state officials to study RNG’s potential statewide, including for various energy customers.

“Renewable Natural Gas is an underutilized resource that can help control greenhouse gases and provide farmers, families, and others in my district with financial benefits to help their businesses,” Outman said in a statement last month.

Johannes Escudero, founder and CEO of the California-based Coalition for Renewable Natural Gas, told MiBiz that RNG has been on an exponential growth curve in recent years after being introduced in the early 1980s. Developers

built an average of about one RNG project between 1982 and 2011, or 31 total projects in the U.S. Since 2011, 157 RNG facilities are now in operation. Escudero expects about 800 projects to be online by 2030, and 5,000 by 2040.

Favorable policies like renewable energ y standards are key to that growing deployment and driving down costs, he added.

“We still have a long way to go,” Escudero said. “If you compare the RNG industry to largescale wind and solar, they had a 15-year head start on us. We’re playing catch-up in some respects.”

The MPSC’s Peretick hopes RNG follows similar trend lines as renewables and, more recently, energy storage.

“I hope renewable natural gas will be able to benefit from the lessons of energy storage in terms of regulatory barriers and reducing the roadblocks that the new technology might see,” she said, “and use energy storage as a bit of a trailblazer where it’s setting the path for some new technology adoption.”

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FOCUS: UTILITIES & ENERGY

Michigan’s oil and gas producers weather pandemic amid long-term demand questions

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

A

fter production ground to a halt for Michigan oil and gas producers early in the COVID-19 pandemic, wells resumed activity later in the year for an improved short-term outlook.

State officials report that oil and condensate production reached about 4.3 million barrels in 2020, down from just more than 5 million barrels the previous few years. Natural gas production continues to see a steady 8-percent year-overyear decline, said Adam Wygant, director of the Department of Environment, Great Lakes and Energy’s Oil, Gas and Minerals Division.

Last year’s oil activity was a “direct response to oil wells being shut down due to precipitous low prices we saw because of COVID,” Wygant said. Widespread stayat-home orders choked off oil demand globally, at one point sending prices negative and throwing the industry — particularly in large producing states like Texas

and North Dakota — into a short-term tailspin.

But producers drawing Michigan sweet crude managed to rebound after short-term well closures, Geer largely because the state is a relatively small oil producer.

“Overall, the drop in production during that COVID period could have been a lot worse and closer to production being cut in half,” Wygant Wygant said. “We hope it rebounds this year from companies putting wells back online as prices go up.”

Oil prices — or what producers are paid per barrel of extracting supplies from deep underground — are a major determinant of the industry’s future,

said Jason Geer, president and CEO of the Michigan Oil and Gas Association.

Within the past decade, prices and Michigan’s production had trended downward beginning in 2014 when prices started to drop below $50 per barrel, or what Geer called the break-even point for producers. Prices are now hovering around $60 per barrel. Deciding whether to drill a new well is “risky” when prices stay around or below that break-even point and projects can be 40-year investments, Geer said.

“Oil has been pretty cheap, and that has definitely impacted our ability to drill,” Geer said. “The pandemic crashed prices into negative territory, and that gives you pause on whether you want to make the investment. The price of oil is starting to go up, and high prices mean more activity for us. We feel pretty good that if the price continues to hover in the $60 range, we’ll probably have a pretty good summer.”

Wygant said well inspections have also rebounded since 2016 when the oil and gas division faced annual budget shortfalls

because of the drop in production, which helps fund the division’s oversight program. Annual well inspections had dipped to about 14,500, but have since rebounded to about 20,000 per year.

Long-term outlook As Michigan’s oil and gas industry continues its relatively modest pace, public debates around the industry rage.

Gov. Gretchen Whitmer, Attorney General Dana Nessel and environmental advocates are in a legal standoff over the future of the Line 5 pipeline, which Geer said many Lower Peninsula oil producers rely on to offload their product.

There’s also speculation about the industry’s long-term role as countries begin to more aggressively tackle climate change, including the U.S., where the Biden administration has announced economy-wide net-zero carbon emission targets by 2050.

Tribes and environmental groups have also injected climate change into the Line 5 debate, arguing that allowing

the nearly 70-year-old pipeline to continue operating for another 100 years is counter to climate change policies.

Essentially, the debate centers on oil demand in economies that place greater value on low-carbon alternatives.

Although long-term, 50-year forecasts raise questions about the industry’s role, Geer is unconcerned about the industry’s short-term prospects.

Michigan is also home to unique geological repositories that have the potential to store carbon emissions that are captured from sources and injected deep underground, otherwise known as carbon capture and sequestration. Using those injections to also extract more through enhanced oil recovery present a pair of potentially new revenue streams for companies and landowners.

“I think we’ll see some type of transition, but like everything else, it comes down to cost and what consumers want,” Geer said. “A lot of (consumer products) are also made from oil and gas — that need is not going away. We think we’ll weather it just fine.”

Running a growing business is difficult enough. And as you grow, knowing what resources are available, where to find them, and when to reach out can be another challenge entirely.

Fortunately, we’re here to make those challenges easier. The Right Place is your single source for business success in West Michigan, providing you with the tools and support you need to continue doing what you do best— running your business.

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CONGRATULATIONS TOP WINNERS 2021 MiBiz M&A DEALS OF THE YEAR

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In a deal valued at $400 million, Acrisure acquired the insurance practice of artificial intelligence leader Tulco, LLC, bringing best-inclass data science, AI and machine learning capabilities to the insurance brokerage industry.

The Shyft Group was recognized in a pair of company-shaping deals: the sale of its Emergency Response business segment to Wisconsinbased REV Group and the acquisition of Waterville, Maine-based F3 MFG Inc., an aluminum truck body and accessory manufacturer.

In its largest acquisition to date, Zeigler Automotive Group was recognized for its acquisition of three luxury automotive dealerships in the Chicago Area, adding 5,000 new units per year and projected $350 million in yearly sales.

Varnum is pleased to represent Acrisure on more than 500 acquisitions since 2013.

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FINANCE

MiBiz roundtable: M&A experts forecast strong deal flow in post-pandemic rebound

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

M

ergers and acquisitions should remain strong through 2021 — driven by several factors affecting deal flow — although finding a good deal may come with a high price for

buyers.

Participants in a recent MiBiz M&A roundtable discussion say they expect valuations to stay high for the foreseeable future — perhaps unreasonably so at times — as buyers compete for good deals in a robust market.

A massive capital overhang, low interest rates, and greater competition among buyers in the market drove up high valuations in 2020.

Buyers ranged from strategic corporate acquirers seeking to drive growth or add to platform companies, to private equity investors and family offices. Lower deal flow after the U.S. economy fell into recession in the COVID-19 pandemic also contributed to increasing valuations that are expected to remain elevated even as activity picks up.

“You throw those all in the mix and you don’t have an aggressive amount of deal flow, you’re going to have high valuations and you’re going to have high valuations for a while,” said Rajesh Kothari, managing director of Southfield-based investment banking firm Cascade Partners LLC.

High valuations Years ago companies regularly traded at multiples of three or four times earnings before interest, taxes, depreciation and amortization (EBITDA), Kothari said. Today a multiple of six or seven times “is probably the bottom end of the range, it seems like,” Kothari said.

High valuations have affected a couple of Waséyabek Development Co.’s deals in midstream, said Deidra Mitchell, president and CEO at the nongaming investment arm of the Nottawaseppi Huron Band of the Potawatomi.

Mitchell described how “uninformed” sellers heard about the multiple that somebody else got for their business, “and all of a sudden your deal just kind of starts to fall apart.”

Taking advantage of high valuations ranked second among the top reasons to sell in an annual M&A activity survey from Citizens Financial Group Inc. Among the respondents, 38 percent said they expect valuations for middle-market companies to increase in 2021, while 13 percent expected a decrease.

Peter Roth, an M&A partner at Grand Rapidsbased law firm Varnum LLP, which sponsored the roundtable, has seen some “disciplined” buyers walk away from deals because of high valuations.

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Jeff Helminksi, managing partner, Auxo Investment Partners

“They’re going to put their number in the ground and they have some room, but they’re very careful not to get dragged higher than what they’re comfortable with,” Roth said. “So, I have seen a number of times in the last bit of buyers walking away and saying, ‘Our number’s our number and if somebody wants to pay silly money, have at it.’”

Strong activity In its annual survey, Citizens Financial Group found “upbeat expectations” for both valuations and deal flow in 2021 in what was termed a “decidedly optimistic” M&A outlook. Survey data “suggests that a rush of middle‑market M&A is likely in 2021,” according to Citizens.

M&A activity in the first quarter has been strong, said roundtable panelists who believe 2021 could become a record year for deal flow.

“Part of that is you had pretty much almost six months of the year get trashed last year, so there’s a level of pent-up demand that’s driving it. We’ve never started out a year as strong as we’re starting out 2021,” Kothari said. “When I talk to my friends in the industry around the country, everybody is saying pretty much the same thing. There’s just a tremendous amount of activity and interest in the marketplace.”

As he scouts for deals in a strong market, LV2 Equity Partners LLC Managing Director John Pollock remains cognizant of sellers who — because of the nature of their business — experienced a temporary boost during the pandemic, driving up their valuation.

“You have to contend with those factors and make sound business decisions on what you’re willing to pay for a business. But what we struggle more with are ones where companies are trying to get paid a premium for what in our estimation is clearly a pandemic ‘bump’ of sorts,” Pollock said.

“Outside of that, it’s the ebb and flow of valuation based on supply and demand and all of the other factors that are in play.”

Federal policy Pollock doesn’t see that confluence of factors and “weird bubble” changing until “a change of substance” in presently low interest rates, “and that’s not happening anytime soon.”

A rise in inflation could lead the Federal Reserve to begin raising interest rates, although recent economic outlooks do not expect that to occur this year.

“Overall and core inflation will pick up on a yearago basis over the next few months because of comparisons with 2020” when “prices outright declined in the late winter and early spring of last year as the pandemic rocked the U.S. economy,” PNC Bank economists wrote in a recent economic briefing.

Rajesh Kothari, managing director, Cascade Partners LLC

Deidra Mitchell, president John Pollock, and CEO, Waséyabek managing director, Development Co. LV2 Equity Partner LLC

Peter Roth, M&A partner, Varnum LLP

PHOTOS: JOHN POLLOCK. SETH THOMPSON-GREENFROGPHOTO

“But the acceleration in year-ago inflation will be transitory, and both overall and core CPI inflation will slow on a year-ago basis in the second half of 2021. Inflation will then pick up somewhat in 2022 as stimulus supports a strong economic rebound, giving businesses more pricing power.”

In an updated U.S. outlook this month, economists at Comerica Inc. forecasted the consumer price index to rise from 2020’s 1.9 percent to 2.6 percent for 2021, then ease to 2.2 percent for 2022.

Comerica economists expect that the Federal Reserve’s “highly accommodative” monetary policy “will likely be maintained through this year and possibly much longer.”

“You had pretty much almost six months of the year get trashed last year, so there’s a level of pentup demand that’s driving it. We’ve never started out a year as strong as we’re starting out 2021.”

— RAJESH KOTHARI Managing Director, Cascade Partners LLC

Pandemic rebound, tax concerns The COVID-19 pandemic that hammered the economy and many businesses last spring could drive deal flow in 2021, according to the roundtable panel. Owners who struggled through the economic fallout of the pandemic and state-ordered closures may choose to sell now or accelerate their plans to exit the business.

That’s similar to what occurred in the aftermath of the financial crisis in the fall of 2008 that pushed the U.S. economy in recession.

“The attention to there being real risk and catastrophe possibly happening is driving some of the deal flow,” Roth said. “Those folks were kind of close to the exit, then they saw a catastrophe happen and risks became a little more real.”

Roth noted that “after a brief lull” when COVID19 hit a year ago, the M&A market remained robust through the latter half of 2020 when “we found ourselves super busy.”

Grand Rapids M&A firm BlueWater Partners LLC’s first quarter update this month cited data from global financial data provider Refinitiv that U.S. midmarket deals accelerated in the final three months of 2020, growing 23 percent from a year earlier.

Mid-market deal flow increased 5.7 percent sequentially from the third quarter to the fourth with purchase multiples seven times EBITDA, according to BlueWater Partners.

Jeff Helminksi, managing partner at Auxo Investment Partners in Grand Rapids, believes there’s a “bunch of people” who planned to sell their business within the next two to four years, “and they just weathered this storm and said, ‘Well, I don’t know if I want to go through that again, I’m pulling the parachute now.’”

Potentially higher federal tax rates under President Biden also could drive more sellers to the market in the months ahead, Kothari said.

The prospect of higher taxes, particularly an increase in the capital gains tax, on top of the pandemic and “extraordinarily high” valuations “are just kind of making people say, ‘Gosh, I should go’ and explore it today, more so than ever,’” Kothari said.

Move to Zoom As the COVID-19 pandemic took hold last spring and states imposed travel and stay-at-home restrictions, M&A professionals resorted to Zoom or other video-conferencing platforms to keep deals moving.

Roundtable panelists expect it to be a long-term feature of the deal process.

“This is going to carry forward to some degree.

The cost and simplicity of doing this is going to create an opportunity to get buyers and sellers together earlier and differently. There will be continued interest and opportunity to use technology to do that in the pre-deal process and, for sure, in the post-deal process,” Kothari said. “Everyone flying in to do all of that stuff is going to cut back dramatically.”

However, dealmakers should avoid falling into a “trap” where they rely too much on video meetings, Helminski said.

“People can come across very differently in this setting when you don’t know each other than it would in-person. There’s a trap you can fall into saying, ‘Hey, I’ve met them on Zoom and therefore I’ve got a really good sense of who they are,’” Helminski said.

“Sometimes that’s accurate and sometimes that’s not.”

Roundtable panelists also expect diversity, equity and inclusion to become a larger issue in the M&A profession.

Auxo Investment Partners has sought greater diversity on its team while telling recruiters that the firm wants a more diverse candidate pool, Helminski said.

A company’s reputation for diversity, equity and inclusion is an issue that Waséyabek Development will look at when buying, Mitchell said.

“That’s definitely something I think you have to consider in this day and age and what that looks like and having a mitigation plan or improvement plan of some kind,” she said.

MiBiz / MARCH 29, 2021

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TECHNOLOGY

Hudsonville VAR company looks to make inroads with tech giants

By JAYSON BUSSA | MiBiz jbussa@mibiz.com HUDSONVILLE — As extended reality technology creeps into the mainstream with big names like Microsoft, Facebook and Apple racing to develop the best experiences for end users, the industry still faces several hurdles to mass adoption.

However, a Hudsonville-based company that has hovered under the radar for nearly two decades could potentially hold the solution to helping these tech titans clear those hurdles to improve user experiences.

IMMY Inc. — originally formed in 2002 in Detroit — is developing a display system aimed at curing the typical problems that accompany current head-mounted disVilardi plays (HMDs) used for virtual and augmented reality (VAR).

These displays — like Microsoft’s HoloLens, Facebook’s Oculus and MagicLeap — tend to cause eye fatigue, motion sickness and other issues that make it less than ideal for mass adoption.

“IMMY represents, to me at least, a dying breed — or at least I hope it’s not a dying breed,” said Jon Peddie, president of Bay Area-based computer industry research group Jon Peddie Research. As a veteran of the graphics industry, Peddie has written a book called “Augmented Reality: Where we will all live,” and is an adviser for IMMY Inc. “Here’s a small, innovative company that is doing something that, when you look at it and understand the technology, you say, ‘Holy cow, how did you guys do that?’ They’re still inventing stuff that’s really hard to do and they’re doing it without a $20 billion government contract.”

Peddie became acquainted with IMMY Inc. and its original founder Doug Magyari around a decade ago. Over that time, IMMY — with just three internal employees — has developed a potentially gamechanging vision system that can eventually be used in head-mounted displays.

“What IMMY has figured out is how to get an image that is up close and personal to your eye, that doesn’t disorient you or make you sick or confuse you, which is a very complicated optical problem,” Peddie said.

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IMMY, which recently started doing business as Optique, has stood as a pre-revenue company for nearly 20 years. CEO Salvatore “Sam” Vilardi now reports that the company has raised roughly $14 million to date. This includes a recent rights offering that raised $800,000 for the company.

Vilardi, a West Michigan-based engineer with experience bringing new products to market, has been involved with the company since 2010, taking the helm last year to bring the development of its vision system across the finish line.

Optique’s aim is to develop and perfect its proprietary vision system in order to license it to one of the big-named players in the industry or enter into a partnership. This means that the small IMMY won’t have to go head to head with industry giants.

“Those guys are the big boys with a lot of deep pockets and a lot of resources,” Vilardi said. “What

I want to do is be able to offer them the optical display system and let them build the end user product.”

Vilardi compared this dynamic to the way that Intel creates chips and processors to go inside computers rather than developing entire computers.

“I want to be the Intel inside of AR and VR wearable glasses,” Vilardi said. “That’s the approach we’re after.”

Optique’s vision system uses a micro organic light-emitting diode (OLED) display that projects light into a mirror that, in turn, projects the images into the eye. The system does not push light through a lens like existing systems.

This setup eliminates the eye strain, fatigue and disorientation that often accompanies existing headmounted displays.

The system was also built with mass production in mind and more cost-efficient production consisting of a few molded components and a frame. The display and electronics are the most costly to produce.

Vilardi said that IMMY has had discussions with potential partnering companies, but could not name them.

“We’ve gone down paths, fairly in-depth and far down, with a couple very large computer companies,” Vilardi said. “Because the technology was still a bit premature at that point, we weren’t able to close those relationships. But they’re actively asking when we are going to be ready and when we are going to have a production version. We won’t have a hard time at all getting some licensing agreements in place.”

Barriers remain Vilardi said that IMMY is in the process of developing tooled parts and by the end of the year should be in a better position to land those partnership deals.

However, as a veteran of the industry, Peddie highlighted some potential struggles that come with working with big-name tech companies.

“IMMY’s stuff right now is good enough for Microsoft to jump in, and they should,” Peddie said.

“The problems you face with big organizations is something called NIH: not invented here. The difficulty you have with big organizations is you have a lot of people with big egos.

“It’s a problem and the only solution to that problem is luck,” Peddie continued. “You’ve got to find someone in the organization … who doesn’t wear his ego over himself all the time. That’s as big of an obstacle for IMMY as the technological challenges.”

Meanwhile, IMMY is looking to cash in on a $30 billion industry that is projected to grow exponentially in the years ahead. Virtual and augmented reality is used in everything from games and entertainment to employee training in several industries.

Still, the market can only grow as quickly as the technology improves and evolves. Vilardi believes IMMY can provide the shove the industry needs.

“Honesty, I think the only reason (extended reality has) not exploded is not because people don’t want it or the software doesn’t exist to create some really cool experiences,” Vilardi said. “It’s really been an issue of the display systems. (Inferior display systems) continue to let the industry down and not let it go anywhere. That’s where we see our advantage.”

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POLICY

State assistance program aims to help stabilize renters, landlords

By KATE CARLSON | MiBiz kcarlson@mibiz.com

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est Michigan housing experts say a program recently rolled out by the Michigan State Housing Development Authority will help stabilize renters and landlords who have been struggling financially throughout the COVID-19 pandemic.

The $282 million COVID Emergency Rental Assistance (CERA) program is replacing the Eviction Diversion Program that MSHDA launched in July 2020, which helped about 16,000 Michigan households avoid eviction and catch up on rent payments. In addition to the CERA program, another $340 million in federal funds is waiting to be appropriated by the state Legislature, bringing the program to $622 million.

While housing experts say many people who lost jobs during the pandemic have started returning to work, many still need help with living expenses.

MSHDA estimates that 50,000 to 55,000 families will be able to receive financial assistance through CERA, with an anticipated average rental assistance payout that could be as much as $10,000.

Beach

Reed

The previous program had an average payout of $3,300 per household.

“We’re seeing more people getting their income back to where it used to be before COVID-19, but they’re still behind because once you’re behind, it’s hard to get back,” said Jacob Beach, program director at Kalamazoo-based Housing Resources Inc. “We’re not seeing the need slow down.”

Housing Resources helped connect 700 households in Kalamazoo County with $2 million in rental assistance funding since the start of the pandemic through the state Eviction Diversion Program, Beach said. In Ottawa County, 485 tenants were able to access the eviction diversion funding. As of March 23, 260 people in Ottawa County were on the wait list or in the process of being connected to relief funding, said Jessi Christensen, eviction diversion lead at

Good Samaritan Ministries.

Under CERA, 65 percent of the funds ($405 million) must be spent or obligated by Sept. 30. CERA funding comes from the federal COVID-19 aid package passed in December 2020. Of the $622 million allocated to Michigan as part of the package, $560 million will be used directly on rental and utility assistance, with the remaining $62 million set aside for case management, administrative and legal services.

According to Moody’s Analytics, $57 billion remains in unpaid rent across the U.S. Federal and state relief packages fall short of renters’ and landlords’ needs, said Duy Vu, president of the Property Management Association of Michigan.

planning,” Reed said. “I have been doing a lot of hand-holding with my tenants. If someone says they can’t pay their rent on time but they can pay it on this day, then that’s great. We try to work with people.”

The beginning of the pandemic was “scary for everyone,” with a large number of tenants falling behind on rent and not being able to access available funds.

However, the number of people able to pay their rent has improved since then, Reed said.

“By August-September of 2020, we noticed a big uptick in people in the restaurant industry finding other jobs or most people were receiving assistance from the state or finding income in some way,” Reed said.

‘We try to work with people’

Eviction uncertainty

The increasing number of tenants who were unable to pay rent this past year meant a tighter budget for Urban Pharm LLC, even though the Grand Rapids property management company is doing the same amount of work, said Urban Pharm co-owner and broker Bethany Reed.

“Our numbers have suffered pretty significantly and we tightened our belts a little and didn’t hire like we were

Though uncommon, some tenants have fallen behind on rent by nearly $10,000 with no recourse for landlords under the federal eviction moratorium, Reed said. The U.S. Centers for Disease Control and Prevention’s eviction moratorium went into effect on Sept. 4, 2020 and is set to end March 31, 2021. The Biden administration is reportedly considering extending the eviction ban through July as

stimulus payments are delayed and amid lawsuits nationally from landlord groups challenging the ban as unconstitutional.

Urban Pharm has only pursued legal action against tenants in order to qualify them for state rental assistance, Reed said.

“It’s not our favorite, but that is the only way for us to do that currently, is through the court system,” Reed said.

Court documents and past-due rent notices are among documentation renters can use to apply to the CERA program.

PURE Real Estate Management had 10 to 15 tenants in its residential portfolio throughout West Michigan express concern about being able to pay rent when the pandemic first hit, said Jason Wheeler, communications director at PURE Real Estate Management.

“We were customizing plans with these people. For some of them, we were also providing resources and links to different financial opportunities or sitting down with them and making custom tailored approaches to each situation,” Wheeler said. “We were dealing with it on an individual, case-by-case basis.”

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COMMITTING TO PEOPLE-FIRST

Manufacturing Webinar Series to Focus On 3p Approach to Total Manufacturing

W

hile 2020 may be in the rearview mirror, the COVID-19 pandemic continues to challenge manufacturers, forcing them to find creative solutions to new and old problems alike. Once again, the Michigan Manufacturing Technology Center – West and The Right Place Inc. have partnered with MiBiz to host a new webinar series in 2021 to assist small- and medium-size manufactures in navigating the everchanging business landscape.

The four-part webinar series will focus on the 3P Approach to Total Manufacturing Management, a philosophy built on the Six Sigma framework. Each webinar will take a deep dive into one of the P’s of the 3P approach: People, Process (two webinars), and Product. The first installment of the webinar series, published in February 2021, centered on the benefits of a people-first philosophy for manufacturers.

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Too often, manufacturers express the notion they “just need bodies,” said Ben Wood, a business development specialist with Michigan Manufacturing Technology Center – West, who participated in the webinar. However, without considering employees’ likes and dislikes, their understanding of the business and importance of their position in the organization, simply throwing a body at the problem will only make the challenge worse in the long-run.

“Not only does this demonstrate a lack of caring from leadership, but it also puts companies on a quick path to destruction,” Wood said.

Placing employees in roles where they are comfortable, early in their career, gives them a foothold in the organization and allows them to carry that comfort level on as they take on more responsibility in the company. It also provides a

coaching opportunity on the “why” of their position, one of the essential components of the 3P system.

“Positioning people is just like buying machines,” Wood said. “It doesn’t make sense to buy a stamping press to drill holes in piece of material.”

Wood advocates for a talent strategy that includes beginning with a goal and purpose for each new hire. He suggests employers instruct their new hires with a process map to teach them their internal and external customers and the results of mistakes on the company at large. Wood also noted the importance of manufacturing executives connecting with their employees, including setting aside time for open discussion on what the employees learned during their training process.

“You’re going to learn about people by asking questions,” he said. “It begins with your onboarding process... That’s going to be the foundation of this whole people part of the 3P process. You have to know your employees and their skillsets and where they want to add value. Once you understand that, there’s plenty of different ways to train them.”

WORKPLACE FLEXIBILITY COVID-19 has forced many businesses to confront unique personnel situations, whether hybrid work-from-home, or enhanced flexibility during the pandemic. While some manufacturing executives may view adapting to these new circumstances with an employee-centered focus as the “fuzzy” aspect of the business, it is essential if a business wants to attract and retain talent, said Cindy Brown, vice president of talent initiatives with The Right Place.

“If the thought is that people aren’t as important and your products, processes and services, then you’re going to constantly struggle to attract and retain the right people and get them in the right position,” Brown said.

Brown points to three key human resources challenges manufactures are likely to face through

2021. As the pandemic continues, Brown notes the importance of actively improving employee morale, both long-term and on a day-to-day basis.

Manufacturing executives will also need to find ways to bridge the gap between traditional workplaces, and the new reality of working from home if they are to recruit and retain talent.

COMMITMENT Like many process improvements, the 3P approach demands commitment from company leadership.

However, Wood notes that simply paying lip service to 3P will not yield success. Executives must follow through with people-centered process improvements and actively engage with their employees in open dialogue.

“If you’re going to require your employees have a clean work cell, with all their tools, snacks and everything organized and wiped clean, I would highly recommend that you don’t call them into your office and it looks like a hurricane went through there,” Wood said. “You can talk a good game but doing and showing is going to be way more effective as a leader.”

Ultimately, the webinar participants agreed that the success of 3P comes down to the commitment on the part of company executives to make changes in a holistic way that best benefits the organization.

“These are all tips you have probably heard before,” Brown said. “But what you do and how you do it will depend on your commitment to the organization.

These ideas aren’t new, but how you implement them are.”

Find the webinar recap at mibiz.com/3pwebinars

MiBiz / MARCH 29, 2021

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v Sandy Ward and her late husband, Cedric developed a children’s program at Circle Theatre and supported many programs aimed at engaging people of color in community arts throughout their life together.

With the help of Grand Rapids Community Foundation, Sandy will create a scholarship fund after her passing to support students involved in theatre.

The fund will bear their names and honor Sandy and Cedric’s legacy, always and forever.

L E T U S H E L P YO U G E T S TA R T E D We’re here to help you understand your options and explore creative ways to leave your mark on the community and causes you love. Give us a call at 616.454.1751. grfoundation.org

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MARCH 29, 2021 / MiBiz

L E AV E YO U R M A R K

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NONPROFIT ORGANIZATIONS

Nonprofits step up as Kent, Ottawa counties see rising mental health needs

By JOSH SPANNINGA | MiBiz jspanninga@mibiz.com

E

arlier this month, Kent and Ottawa counties separately released results from their Community Health Needs Assessment reports, which compile data from surveys of county residents, health care professionals, and community leaders.

The results are published every three years in both counties and are used to help health officials identify pressing issues within the community and develop plans to address key problem areas. This year’s data reflect a growing need for mental health services that will require new and ongoing partnerships with area nonprofits.

Ottawa County-based nonprofit Community SPOKE plays an integral role in facilitating discussions about using the assessment’s findings to improve the community. The group was formed in 2013 out of a partnership between Ottawa County and the Lakeshore Nonprofit Alliance.

Community SP OKE Executive Director Patrick Cisler says the assessCisler ment findings help inform a C o m mu n i t y He a l t h Improvement Plan, which has been rebranded as the Healthy Ottawa Plan for 2021. Planning meetings are set to start virtually on April 15.

“That is a collaborative planning process where we Lewakowski engage multiple sectors in our community, from nonprofits and governments to for-profits and others to really prioritize what the greatest needs are and then develop some ideas on what we can collectively do to address those,” Cisler said.

Mental health a main concern The Ottawa County Community Health Needs Assessment identifies three main areas of concern: mental health, access to care, and fostering healthy behaviors.

The data surrounding mental health are especially concerning to health officials as the number of area adults who report poor mental health has nearly doubled since 2017, according to survey results. One in five area adults have thought about taking their own life in the past year, while — of those — one in five have attempted suicide. Suicide rates among youth are even worse, officials report.

Cisler and Sarah Lewakowski, a psychologist Visit www.mibiz.com

Campaign seeks ‘fair funding’ for nonprofit child welfare agencies

By JOSH SPANNINGA | MiBiz jspanninga@mibiz.com

T

he L a n si ng-ba sed A ssociat ion of Accredited Child & Family Agencies launched a new effort in mid March calling for equitable funding for child welfare agencies that provide vital services to Michigan families.

The Fair Funding for Michigan Families campaign seeks to bring funding for accredited nonprofit child welfare organizations in line with state-run organizations.

“Fair funding across the system will ensure that we A Glimpse of Africa founder Fridah Kanin (far right) with volunteers at a recent COVID-19 vaccine clinic for the local African immigrant population as part of a collaboration with provide Michigan children and Kent County. COURTESY PHOTO families with the care they need and deserve, and research does doing this work rather than starting from the ground and executive director of Grand Haven-based nonshow that when you start on the up and building our own work group for something profit Mosaic Counseling, say nonprofits are in a front end it pays dividends for like that,” Brummel said. unique position to provide mental health services.

Michigan’s children and famiEspecially concerning are the results that indiMosaic Counseling’s small staff and “very low lies and taxpayers,” Judith Fischer cate discrimination as a major barrier to receivoverhead” make it nimble to address needs while Wollack, president of AACFA and ing health care, particularly among people with it can raise funding through grants, churches, CEO of Saginaw-based Wolverine a disability, transgender people, and people who foundations and individuals, she said.

Human Services, told MiBiz. Fischer Wollack don’t speak English as their first language. Race “We’re just able to leverage that money with AACFA is a group of accredand ethnicity also play a large role in barriers to our partnership with therapists who are in private ited child welfare agencies in Southeast Michigan that receiving health care. practice,” Lewakowski said. was incorporated in 1994 to advocate for the needs of “We’re specifically thinking about how to Mosaic has 95 therapists on its panel, which Michigan’s abused and neglected children. AACFA is approach those topics because they’re also very is expected to grow to 110 soon in effort to meet made up of five different nonprofits and is focused on broad and complex,” Brummel said. community needs. Lewakowski became Mosaic’s strengthening the partnership between public and priMuch like the Healthy Ottawa Plan, Kent executive director in 2004, and says she’s never vate parties by influencing public policy and funding County will hold meetings where nonprofits, seen a greater need for mental health services in through the state legislative process. area leaders, county officials and others discuss that time than now. And unlike private practices, “Our AACFA agencies provide what we call the full how to address the community’s health needs.

Mosaic does not turn away anyone who lives or continuum of care. So a variety of us all do different Kent County has a long history of collaborating works in Ottawa County. things,” Fischer Wollack explained. “That includes menwith local nonprofits, which now appears more “We’re getting referrals from other agencies, tal health services. That includes foster care and adopimportant than ever. and we want to be able to keep up with that comtion. That includes nonsecured residential facilities for Recently Kent County collaborated with A mitment,” Lewakowski said. “It’s tricky right now. both (juvenile justice) and residential foster cares, and Glimpse of Africa to provide COVID-19 vaccinaWe are continuing to do it, but it’s tough.” then it also includes ‘secured setting’ maximum security tions specifically for the local African immigrant Lewakowski recently received a call from an treatment facilities for adolescents.” population. A Glimpse of Africa played a crucial area man who had been seeking mental health On average, foster care caseworkers who work role in getting the word out and making this underassistance unsuccessfully for six months because for state-funded agencies such as the Department of served population aware of the opportunity. of a lack of insurance coverage. By the time he got Health and Human Services (DHHS) make substantially “Some groups have language through to Mosaic, he was already feeling suicidal. more than those who work for nonprofbarriers, we all have cultural barIt’s a story that’s all too common in the mental its, according to the AACFA. This has led riers, we all have a lack of resources health field, she said. to labor shortages for nonprofit accredNONPROFITS that makes it difficult to be able “That’s what we hear a lot of — people who are ited child welfare agencies as their fundNEWS to access what’s available in the uninsured or under-insured,” Lewakowski said. ing does not allow them to compete with — Sponsored by: community,” A Glimpse of Africa “We want people to get counseling as soon as posstate pay rates.

GRAND RAPIDS founder Fridah Kanini told MiBiz. sible, before they start feeling suicidal. We want Fischer Wollack says state agencies COMMUNITY Kanini is Kenyan and moved to to help prevent that. Suicide is the most preventrely on nonprofit accredited child welfare FOUNDATION Michigan more than 15 years ago. able kind of death, however it’s not predictable.” agencies to help them provide necessary She says the clinic was a “very huge services for children and families, but it’s success,” and that the group is open to working difficult for nonprofits to deliver the same services with Kent County assessment on similar projects with the county in the future. less funding.

Results from the Kent County Community Health “Honestly, I think the work paid off,” Kanini Wolverine Human Services has faced recent scrutiny Needs Assessment also identified mental health said. “We didn’t fill out every single spot we had, from DHHS, which is seeking to revoke the organizaas a key priority along with access to care, ecoso other communities joined us at some point.” tion’s operating license for a juvenile correctional facilnomic security, and discrimination and racial While the vaccination clinic was not conity in Saginaw County over alleged rule violations and inequity. nected to Kent County’s Community Health Needs physical abuse, according to media reports. Wolverine Kent County Health Department Public Assessment, it is indicative of the type of collaborais reportedly appealing the findings.

Health Epidemiologist Maris Brummel believes tion that will be crucial to addressing community While AACFA is based in Lansing, the campaign the process to address these priorities will look health concerns in the future. advocates for fair funding for all accredited child welfare different this year as public officials look to join “It’s definitely something to consider when agencies across the state, including in West Michigan. existing coalitions. planning future programs and policies and initia“We’re not just fighting for the AACFA agencies,” “We’re going to explore what it would look like tives,” Brummel said. “It’s really going to be kind Fischer Wollack said, “we’re fighting for the state of to potentially join other coalitions that are already of at the forefront.”

Michigan.”

MiBiz / MARCH 29, 2021

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New transit CEO shifts from highdensity East Coast to West Michigan A Q&A with Deborah Prato, CEO of The Rapid

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eborah Prato is less than a month into her new job as CEO of The Rapid, the Grand Rapids metro area’s public transit system. It’s certainly a change of pace from the expansive systems where she previously held executive positions at New York City’s Metropolitan Transit Authority (MTA) and NJ Transit — some of the largest public transportation systems in the country. In an interview with MiBiz, Prato said while the scale is different, the mission to provide safe and reliable transit options that can also help fuel economic growth remains the same.

You’re coming to The Rapid from massive transportation systems in New Jersey and New York City.

How do you see that experience applying here?

It’s not exactly a one-to-one comparison and though the scope and scale is different, public transportation is public transportation. The smaller market has the ability to do more and more ability to be creative. For me, it’s an opportunity where I’ll get to know every employee and their name and hopefully their spouse’s and dog’s name. That’s literally impossible to do in New York City.

What were some of your duties at the MTA? My title was senior vice president of people and business transformation and we were working on the blocking and tackling part of engaging employees to make sure we were delivering service in the most effective and efficient way. If there was ever a job that I had that was tough, it’s that one. Your reach is so far, and trying to roll out something programmatic is difficult when there are so many employees.

How did you see bus ridership shift during the pandemic?

Bus ridership stayed strong during the pandemic. It’s a real backbone service and it’s really recognized that having a bus where you live is a valuable commodity. Across the country, challenges have been operator availability and finding a candidate pool with a commercial driver’s license. There are difficult national trends of recruiting and retaining (workers), along with private carriers offering signing bonuses and things like that.

What are some of your early priorities at The Rapid?

In my first 90 days, I need to learn. I’ve been in transportation before, but I haven’t been in this community. I need to listen and learn what this community needs and wants, what customers are saying, what employees are saying, where community leaders have problems, and where business leaders have issues where transportation could provide a solid solution. Then I’ll form some goals and objectives and move to creating a strategic plan and execution and tactics on that. My goal is that the community understands the value that transit provides.

When approaching community leaders, how do you make that connection between public transportation and economic development?

It’ll be a team effort on making this pitch. I only represent what we could possibly bring to the table, but there is an element of what could be as we explore different types of transportation modes. We’re looking at on-demand service in Kentwood and Walker — that will be new. Transit could be part of the solution.

If it’s not the cure, it could definitely be part of what gets us to a financially sound solution.

How can metro transit systems improve under financially constrained conditions?

(The Rapid) has a pretty good capital program. It’s healthy. We’re going to get creative with some of our subsidy partnerships and seek non-traditional solutions to what’s been there. It’s pretty well settled that transit provides value to properties and businesses. I see public transit as the great connector, as valuable as any other infrastructure. Power, sewer, water and public transit are what leads to economic vitality. If we need to flex and create a new solution, we’re open to looking at that.

How has The Rapid rebounded since the early weeks of the pandemic when it was potentially looking at hundreds of layoffs?

Some people did take voluntary furloughs, but no one was laid off. How do we move forward? That’s the million dollar question. What’s ridership going to do? Will remote workers stay as remote workers? In the last few weeks, we’ve seen a slight uptick in commuter (rides). Year to year, it has stayed pretty steady. I think we’re going to come back strong. This is a community that values transportation.

You’re coming from a high-density city like New York to a very car-centric state like Michigan. How do you adapt to that major transportation culture difference?

Certainly, population density drives more people to public transportation. But Rochester (N.Y.) was a very similar car-centric town with a lot of discretionary riders. (Editor’s note: Prato worked for seven years as chief administrative officer at the Rochester Genesee Regional Transportation Authority.) I think our amenities and ability to get people where they need to go safely without the hassle of a car and make it easy will help change the mindset. This is a totally green alternative. Instead of 60 cars on the road, it’s 60 people on a bus. I think West Michigan is ready to hear that kind of messaging.

Interview conducted and condensed by Andy Balaskovitz. Courtesy photo.

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MARCH 29, 2021 / MiBiz

IN THE NEWS M&A

n Traverse City-based Hagerty Insurance Agency Inc., an insurer of classic cars and high-end automobiles, has acquired the Detroit-based nonprofit Concours d’Elegance of America. The annual event showcases classic, rare and notable vehicles and has most recently been held at the Inn at St. John’s in Plymouth, Mich. According to a statement, Hagerty will work with Concours d’Elegance of America staff to raise its profile of the event, the proceeds of which support automotive education and local charities. Board Chair Larry Moss and director Tara Noftz will continue in their roles. The 42nd annual event is scheduled for July 23-25 this year. The deal adds to a growing lineup of automotive events for Hagerty, which previously acquired the Greenwich Concours d’Elegance and the California Mille. n A Boston interior design, procurement and project management firm owned by Grand Rapids-based Blackford Capital completed a merger that led to the creation of a new company serving the North American hospitality market. Blackford Capital jointly owns Boston Trade Interior Solutions with the management teams at portfolio company Vertically Integrated Products in Bloomingdale, Ill., and Boston Trade International in Hudson, Mass. Blackford Capital acquired Vertically Integrated Products in January 2017. n A St. Paul, Minn.-based data backup and storage company now has a second headquarters near Grand Rapids after being acquired by a local entrepreneur.

Mass Storage Systems Inc. announced this month that it has been acquired by Lisa Jabara Newell, an entrepreneur once from the Twin Cities area who is now located in Grand Rapids. Newell rebranded the company as Mass Mountain Technologies and relocated its headquarters to 3341 Ashton Road SE in Grand Rapids Township. The company specializes in customized data solutions for enterprise-level organizations.

Newell told MiBiz that she finalized the deal a couple of months ago and is assembling a Grand Rapids team that will focus primarily on sales and marketing. n Steel distributor Mill Steel Co. has purchased the commercial assets of Los Angeles-based Prassas Metal Products Inc., which specializes in distributing pre-painted and coated coil products. The deal expands Mill Steel’s geographic footprint while growing its reach to sources in the southeastern U.S. “When favorable opportunities such as this present, our aggressive acquisition strategy allows us to transact quickly to the benefit of our customers,” said Pam Heglund, president and chairperson of Mill Steel, which is headquartered in Cascade Township and operates five service centers across the U.S. Terms of the deal were not disclosed. n Caledonia-based Aspen Surgical Products Inc. has acquired BlueMed Medical Supplies Inc., a Canadian manufacturer of disposable shoe covers and other personal protective equipment. The acquisition expands Aspen’s portfolio of disposable surgical products that are manufactured and then sold into the acute care market. Aspen CEO Jason Krieser called BlueMed a “highly synergistic fit for Aspen in terms of manufacturing and commercial operations.” The deal follows Aspen’s recent acquisitions of Precept Medical Products Inc. and Protek Medical Products Inc. Terms of the BlueMed deal were not disclosed.

CAPITAL RAISE

n Grand Rapids-based Acrisure LLC closed on a $3.4 billion capital raise, most of which came from the sale of senior preferred stocks to a consortium of investors. Already one of the largest and fastestgrowing insurance brokerages, Acrisure will use the capital to support further growth and technology investments. Of the capital raised, $3 billion came from

the sale of senior preferred shares to an investment consortium led by Chicago merchant banker BDT Capital Partners. Acrisure raised another $454 million through the sale of junior preferred shares to a consortium of investors.

INSURANCE

n Small business clients of Blue Cross Blue Shield of Michigan that renew their health policies in the second half of the year will see small rate increases of less than 2 percent. The rate adjustments for third and fourth quarter policy renewals are similar to what Blue Cross Blue Shield and HMO subsidiary Blue Care Network implemented for small employers that renewed policies that were effective Jan. 1 or April 1. Rate adjustments for the third or fourth quarter renewals will average 0.9 percent statewide for the Blue Cross Blue Shield PPO health plans and 1.9 percent for HMO policies.

HEALTH CARE n Dr. Hyung Kim has stepped down as president of Mercy Health Saint Mary’s. Chief Medical Officer Dr. Matt Biersack was named interim president as Saint Mary’s searches for a new leader. Kim left the position a little less than two years after joining Mercy Health Saint Mary’s, which is part of Livoniabased Catholic health system Trinity Health. A Mercy Health statement did not offer a reason for his departure. Kim became president at Mercy Health Saint Mary’s in May 2019 after serving for six years as senior associate dean for clinical affairs at Michigan State University’s College of Human Medicine in East Lansing.

HIGHER ED

n Ferris State University’s Kendall College of Art and Design (KCAD) has named Tara McCrackin as president after serving in an interim role since 2019.

McCrackin, a former interior designer at Custer Inc., first joined KCAD in 2000 as an assistant professor.

School officials said McCrackin’s prior experience in the industry as well as a history in the classroom made her an ideal candidate. Ferris President David Eisler called McCrackin a “dynamic leader” whose experience and “understanding of the Kendall community as a long-term faculty member makes her the right person at the right time.”

NONPROFIT

n Muskegon-based Goodwill Industries of West Michigan Inc. is one of three organizations statewide that was selected to pilot an initiative assisting lower-income workers with affording and accessing child care. Serving Muskegon County, Goodwill Industries of West Michigan joins United Way of Northwest Michigan in Traverse City and Saginaw Intermediate School District as “facilitator hubs” for the MI TriShare Child Care Pilot Program. Under the program administered by the Michigan Women’s Commission, the state, employers and their employees will split the cost of child care. The initiative originated from a coalition of interests the Grand Rapids Area Chamber of Commerce assembled in 2019 to examine ways to assist lower-wage workers with child care and address a persistent labor shortage. n West Michigan Center for Arts + Technology (WMCAT) has named Jamon Alexander as its new president and CEO. A Grand Valley State University graduate, Alexander spent the prior six years as WMCAT’s director of workforce development, where he helped grow the program that provides support and career training for adults seeking careers in health care.

Alexander also previously led fundraising and volunteer efforts at YMCA of Greater Grand Rapids, Spectrum Health Foundation and the Heart of West Michigan United Way. Visit www.mibiz.com

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Jane Ghosh takes helm at Discover Kalamazoo

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JANUARY 18, 2021 • VOL. 33/NO. 7 • $3.00

Despite new state law, no solid plans for Kalamazoo event center

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

By JAYSON BUSSA | MiBiz jbussa@mibiz.com

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ichard Reiffer and his staff at Grand Rapids-based Fusion IT LLC tend to take a proactive approach when it comes to advising clients on digital strategies.

So when COVID-19 transitioned into a full-blown pandemic in early March, the team was already telling the midsize companies it works with to start facilitating effective remote work.

Fusion IT, which works with businesses Reiffer on an ongoing basis as a managed service provider (MSP), even developed white papers to serve as a reference for effective work from home strategies.

“We started warning our clients early and most of them acted on it to get equipment if they didn’t already have equipment capable of running their remote work,” said Reiffer, the company’s vice president of strategic initiatives. “For a while there, the backlog to get laptops was about six months.”

The ongoing pandemic has ushered in a tidal wave of remote working for companies that were either forced to send workers home or did it out of precaution. Many of these companies’ MSPs have become the brain trust for workfrom-home setups and strategies.

Uneven footing With remote work a growing trend before the COVID-19 pandemic, many companies already had a rough infrastructure in place to make the transition smoother, Reiffer said.

Still, some businesses had to swiftly make up ground while some of it was dictated by their respective industries.

See WORK FROM HOME on page 12

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Regulators, platforms, consumers gear up as online SERVING WESTERN MICHIGAN BUSINESS SINCE 1988 gaming prepares to launch

using geolocation properly and are able to properly identify a bettor so that bets are not placed by someone who is underage or not located in the state of Michigan.

competition among cities, and generate opportunity for a wider umbrella that includes equity as a key priority in economic development.

“Every region in the world is wrestling with what’s next,” said Thelen, who’s planning his move back to Michigan from Denver, where he’s currently senior vice president of Downtown Denver Partnership Inc., the city’s Thelen economic development SEE agency.

PAGE 4“The markets that can come together and move forward together are going to be winning markets and be able to leapfrog some of the competition.”

During previous recessions, Thelen said Denver “doubled down, invested in itself,” which allowed it to “accelerate out of recession and bypass that competition.” He’s leaving a “hyper growth market” in the Mile High City that’s attracted investments particularly from large tech firms such as Google, Twitter and Facebook.

“Virtually any tech company you can imagine has put up a sizable outpost in Denver,” Thelen said. “It’s a healthy reminder that the product of a region matters, and talent and placemaking drives business decisions. There’s been a lot of good movement in that area in West Michigan in the last 10-15 years. We’ve got to continue that.”

See ONLINE GAMING on page 3

developers say is critical for both businesses and households.

Eliminating the so-called “digital divide” must become as important as extending electrical and telephone service into rural markets in the 1930s, Birgit Klohs, CEO of The Right Place Inc. in Grand Rapids, said durKlohs ing a recent virtual panel discussion at the Michigan Economic Developers Association’s annual conference.

shortage among top ag priorities this year

The issue has become increasingly important during the pandemic as companies conduct business v irtua lly and students learn ichigan and the nation need the same remotely, Klohs said. The pandemic brought kind of concerted effort to deploy greater awareness to the issue and how in some broadband internet access as 90 years areas the digital divide “is more like the Grand ago when America set out to electrify Canyon,” Klohs said.

PAGE 11 rural areas following the Great Depression, eco“Our children shouldn’t be sitting in cars in the nomic developers say. parking lot of a restaurant to get Wi-Fi so they can The COVID-19 pandemic has heightened the do their homework. I think that’s just Third World,” need to fix a lack of affordable high-speed internet Klohs said.

See MEDA on page 3 access in some markets of the state that economic

By KATE CARLSON | MiBiz hold promise for the city’s transforkcarlson@mibiz.com mation. The projects also involve a variety of local interests and invesMANISTEE — The lakeshore city tors, including regional developers, of just more than 6,000 people is the local American Indian tribe and seeing multiple new downtown a nearby community college. developments that local officials “There are a lot of pieces when and investors say are critical for you’re transforming a downtown,” reinvigorating empty storefronts, said Scott Ward, president of West diversification and emerging betShore Community College, based ter off after the pandemic. about 20 miles south in Scottville.

In Manistee, two planned The college and community A vision for the Spirit of the Woods Manistee Gateway Project prehotels, a larger downtown “gategroups have been instrumental

By KATE CARLSON | way,” MiBizand a new to —education such housing, sented to city officials in September. COURTESY RENDERING centerincluding See MANISTEE on page 9 kcarlson@mibiz.com high-density rentals.

The Lansing-based Michiest Michigan citgan Municipal League has P E R I O D I C A L ies are examinstepped in to help local goving new poliernments solve their housing cies to expand puzzle. The MML plans to issue affordable housing and create guidance in early 2021 on code a supportive environment for reform that can help increase developers as studies show an affordable housing units. ongoing need for more units.

That includes incentivizing The renewed discussions affordable housing developers this year among city officials through tools like brownfield PAGES 10-11 in Grand Rapids, Holland, credits, streamlining zoning SEE PAGE 13 Kalamazoo and Grand Haven codes and a refined applicacome as the COVID-19 pantion process. demic has driven high unem“What happens is you have Drew Phillippy is president of Grand Rapids-based Purple East, which ployment and financial strain, developers sinking a lot of recently emerged from bankruptcy under a new law meant to help small raising concern among offimoney into the process and businesses. cials who say it could exacerit makes it harder for them to bate the need for affordable build housing developments housing. affordably,” said MML Policy Cities are attacking the Research Director Shanna problem in a variety of ways, Draheim. including revamping outdated Meanwhile, studies conzoning codes to make it eastinue to show a need for affordier for developers to include able housing throughout the affordability in housing develregion. A recent Housing Next opments, as well as prioritizing study shows at least 5,340 more affordable or mixed-use housrental units and 3,548 more For small businesses facing bankruptcy, the new ing for incentive tools such as owner-occupied units are brownfield credits. needed in the next five years federal Small Business Reorganization Act is proving Despite the effort being in Grand Rapids to meet housto be a cost-effective and timely lifeline. A Grand made to add more housing ing demand. Housing North, a Rapids retailer offers an early test case. SEE PAGE 14 stock at varying price points, nonprofit that spans 10 counhousing advocates and local ties in the northwestern Lower planners are still confronting Peninsula, showed last year STORY BY ANDY BALASKOVITZ // PHOTO BY KATY BATDORFF a stigma associated with — the region would need about See HOUSING on page 11 and community opposition

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he new round of federal Paycheck Protection Program loans includes a number of changes from the prior funding intended to aid small businesses hurting from the COVID-19 pandemic.

As with the first round last spring and summer, borrowers working through a lender can again use PPP funding from the U.S. Small Business Administration to pay operating expenses.

The new $284 billion PPP round extends eligible expenses to property damage incurred in last summer’s civil unrest that was not covered by insurance, supplier costs and worker protection expenditures. As well, eligible expenses now include costs to adapt to the pandemic such as facility modifications, software and cloud computing and delivery services.

See PPP LOANS on page 12

million Stages Survival Grant Program beginning at 9 a.m. on Jan. 21. The applications window for Stages grants closes at noon on Jan. 28.

The small window for the Small Business Survival Grant Program stems from an expectation that demand will easily outstrip available funding

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Natalia Kovicak takes helm at GR Econ Club

Panel: Rural broadband development should mirror electric gridlabor build-out Trade,

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

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Thelen to lead The Right Place amid economic development ‘inflection point’ State expects ‘extremely high’ demand for $58.5M in small business COVID-19 relief

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because of a “far, far greater need that exists than any amount of resources that we are facilitating,” Michigan Economic Development Corp. CEO Mark Burton said last week. Grant programs last year to provide relief for thousands of small businesses statewide quickly See MEDC GRANTS on page 10

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Two hotels, downtown education center lock in community investments in anticipation of post-pandemic recovery, local officials say

West Michigan cities weigh policy changes to bolster affordable housing

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Telehealth soars during pandemic, sparking new health coverage options

M&A Deals in Review: 2020

Transportation

Contract Deadline: 6.9.2021

7.5.2021

Industry 4.0: Automation Contract Deadline: 6.23.2021

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West Michigan Tribal Economy Contract Deadline: 7.7.2021

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8.2.2021 Insurance

Contract Deadline: 7.21.2021

8.16.2021

Automotive Supplier Outlook Commercial Lending Quarterly: Growth Lending Update

INSIDE:

Mergers & Acquisitions PAGE 7

6.21.2021

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New chapter for Chapter 11

Solar industry on edge

Contract Deadline: 5.26.2021

INSIDE:

Putting pieces together in Manistee Industry 4.0

INSIDE:

Real Estate: Multifamily

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New Priority Health leader on accelerating change in health care

PAGE 7

Cybersecurity standards to reshape defense manufacturing

KALAMAZOO — A new funding tool recently signed into law is intended to help finance an event center in downtown Kalamazoo, but it’s unclear if there is a desire or solid plans to move forward with the venue.

House Bill 4816 was sponsored by former state Rep. Brandt Iden, R-Oshtemo Township, and was signed into law by Gov. Gretchen Whitmer on Dec. 30. The Regional Event Center Financing Act creates a financing program for potential venue projects in Kalamazoo, Ottawa, Muskegon, Ingham and Washtenaw counties.

“The impetus for this legislation was basically to allow access to another economic PAGE 22 development tool that larger communities have like Grand SERVING WESTERN MICHIGAN BUSINESS 1988 www.mibiz.com Rapids and Detroit,” IdenSINCE told MiBiz. “I have always supported an event center downtown because I believe that Iden if urban core centers don’t grow, then they have a tendency to just die out.”

Iden was term-limited out of office at the end of 2020. He served on the Kalamazoo County Board of

By JAYSON BUSSA | MiBiz Commissioners for two years before he was elected jbussa@mibiz.com to the state House of Representatives in 2014.

“The bettors event center onlycasino ever discussed ILLUSTRATION: KAYLEE VAN TUINEN ports and was online gamers found inthemselves concept. There were formalized sitting onnever the sidelines in plans Michigan for orall a formal agreement about thewas sizeaand scope of hope of 2020, even when there glimmer ofthat the project,” said.

“It’s always been pre- before the stateIden would launch online gaming liminarily the year discussed was out. as a high-level concept for the community.”

However, people seeking to place wagers from computThedevices new legislation requires center weeks. ers and mobile can likely do soan inevent the coming programthe to describe theisproposed “We’refinancing ready when industry ready,”size, Michigan location,Board cost and financing structureDirector of the proGaming Control (MGCB) Executive Rick Kalm

By MARK SANCHEZ | MiBiz has a |relatively posed facility, and to specify an assessment to be

By ANDY BALASKOVITZ MiBiz short applicatold MiBiz. tion window based on previous the program, which can’t exceed abalaskovitz@mibiz.com That’slevied whereunder this high-profile issue stands at the4 start of msanchez@mibiz.com demand. percent county-wide hotel room charges.

The period 2021, weeks afterofstate officials waived a 15-day review he latest stateRAPIDS effort — Randy Applications for the $55 would effectively be a small increaselicenses GRAND Thelen describes the milon sportsassessment betting rules and then issued provisional to provide financial Michigan to a county’s hotel lodging tax.just eight days later. The COVID-19 pandemiclion as an “inflectionSmall point”Business that for 15 different platform providers aid tocan Michigan small Survival Grant Program open Thethe financing defines an event center as a shift the course of economic development in at actions paved way foract online gambling to go live. businesses and enter9 a.m. on Jan 19. The application convention hall,awaiting auditorium, stadium, music— hall, West Michigan.

The MGCB is now each platform including tainmentThelen, venues who that wasprocess closes noonas onthe Jan. 22.

PAGE sites 26 like DraftKings and FanDuel Sportsbook — to selected last at month popular See KALAMAZOO EVENT CENTER on page 3 of their are ailing from thenew COVID-19 panand live music president and CEOEntertainment of The Right Place Inc., undergo independent testing to ensure the integrity restrictions venues can apply formore the $3.5 says the challenges of 2020 will likely create games. This extensive www.mibiz.com vetting ensures that platforms are demic and resulting

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ITC, the nation’s largest independent electricity transmission company, is working every day and investing in our state’s infrastructure to modernize the grid in order to move electricity from where it’s generated to where it’s needed. That means safe, secure, reliable electricity to power economic growth, job opportunities, and our long-term energy future. We’re ensuring the grid can meet your energy needs now and long into the future. At ITC, we’re always working for the greater grid.

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