MiBiz 12-7-2020 print edition by MiBiz

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Steelcase cyberattack serves as warning for manufacturers, experts say

Hospitals prepare for COVID-19 vaccine distribution

By JAYSON BUSSA | MiBiz jbussa@mibiz.com

s details on a recent cybersecurity attack against Grand Rapids-based office furniture giant Steelcase Inc. begin to surface, local manufacturers of all industries and sizes may want to take notice. The ransomware attack on Steelcase, which shut down its global operations for two weeks, was a stark reminder of the growing number and sophistication of cybersecurity threats facing all types of businesses — with manufacturing attracting a growing number of attacks, experts say. While Steelcase declined to comment for this report, details of the attack are reverberating through the cybersecurity community. The furniture manufacturer first reported the incident on Oct. 22 in a filing with the U.S. Securities and Exchange Commission. Steelcase followed with an additional filing last month indicating it had shut down global operations for two weeks and that business had resumed normal operations. The financial toll of the attack may reveal itself when the company reports its third quarter financials on Dec. 17. A form of ransomware called Ryuk is believed to be the culprit of the attack. Ransomware is a type of malware that can infect a system and encrypt files to block access to them. The threat actor then demands a monetary ransom to restore access. Manufacturers are especially sensitive to these types of attacks because they can’t afford to halt production and rely on their systems to maintain continuity. In the spring, Ryuk caused major disruptions to the city of Durham, N.C., and has also been cited in other high-profile cyber attacks. “Over the last two years, I’ve had a few organizations reach out to us just to help with (ransomware) remediation — post-breach remediation — and Ryuk was involved in two of those. It’s nasty,” said NuWave Technology Partners LLC CEO Chad Paalman, who is a member of regional and national cybersecurity peer groups. “It gets on your network. Depending on the threat actor group behind it, the demands for ransom are See CYBERSECURITY on page 4

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By MARK SANCHEZ | MiBiz msanchez@mibiz.com

A Staff in Spectrum Health’s primary medical-surgical unit caring for patients with COVID-19 at Butterworth Hospital. PHOTO COURTESY OF SPECTRUM HEALTH HEALTH BEAT

TAKING A TOLL The COVID-19 pandemic is stressing a health care workforce already coping with burnout By MARK SANCHEZ | MiBiz msanchez@mibiz.com

rofessional burnout was a big problem in health care well before COVID-19. The pandemic only worsened the situation by pushing some hospitals to capacity and further stressing doctors, nurses and other medical professionals with longer hours and additional shifts amid surging caseloads. This mental and emotional toll on frontline clinicians treating COVID-19 patients generates deeper concerns about elevated burnout rates and more people leaving the profession. “There’s a huge underlying, baseline discontent in terms of burnout and distress in the medical profession, and then we’re hit with the uncertainty of the pandemic,” said Claudia Finkelstein, director of wellness, resilience and vulnerable populations at Michigan State University’s College of Human Medicine. See HEALTH CARE WORKERS on page 3

s they manage the ongoing surge of COVID-19 patients, hospitals are preparing to receive and distribute vaccines that could ease and eventually bring an end to the pandemic. The first vaccine could become available by mid December and — under the recommendation of a U.S. Centers for Disease Control and Prevention advisory panel — first go to health care workers and long-term care facilities. Peter Hahn, president and CEO at Metro HealthUniversity of Michigan Health, said the CDC panel’s recommendation “makes absolute sense” given the frontline role of health care workers in treating COVID-19 patients, and the vulnerability of residents at long-term care facilities. “There’s going to be a limited supply early on. Health care workers are critical in terms of taking care of folks in the hospital and just makHahn ing sure the health system can be there for our communities,” Hahn said. “That recommendation rings right to me.” Metro Health has been working for weeks to prepare for the vaccines. The health system purchased ultra-cold freezers needed to store the vaccine developed by Pfizer Inc. and BioNTech SE at minus-70 degrees Celsius. In the U.S, Pfizer will produce its vaccine at its Portage facility in Southwest Michigan. See VACCINE DISTRIBUTION on page 22

MEDC pilot program seeks to connect corporate purchasers with small biz during holidays By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

alls to support small businesses during the holiday shopping season have perhaps never been louder than this year. The pandemic has upended the restaurant industry, while local retailers facing capacity restrictions and fewer resources are forced to

compete directly with online giants equipped with a vast logistical network and an overwhelming online presence. The situation pushed Joe Agostinelli to want to do something about it. In September, Agostinelli became executive director of the Grand Rapids Area Revitalization Task Force, which was created by Mayor Rosalynn Bliss to coordinate the

city’s pandemic economic rebound. He recently pitched an idea to Michigan Economic Development Corp. officials that’s meant to drive large holiday purchases to area small businesses. “We had been talking about how we figure out a way to encourage the premise of all of this: You have a lot of large, corporate entities that typically do things around the holiday giving season,” said Agostinelli,

who was a partner for seven years at Southwest Michigan First. “This is the time when we as a community have to be trying any and all things we can to support these local businesses. It’s no secret, this is a very challenging time.” The MEDC liked the idea. Under the Grand Rapids Area Winter Buy Local Initiative, small businesses add themselves to a list corporate See MEDC PROGRAM on page 8

Grand Angels taps Dale Grogan as managing partner PAGE 7

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Spectrum Health Medical Group Insurance Coder Pat Kinney, who has worked from home for the health system since 2013, took on a new role sanitizing touch points at Butterworth Hospital and the Fred and Lena Meijer Heart Center. PHOTO COURTESY OF SPECTRUM HEALTH HEALTH BEAT

HEALTH CARE WORKERS Continued from page 1

“On the one hand, you are here to do what you signed up to do. But on the other hand, it’s at a crushing volume and pace that’s hard enough to sustain in the short term,” Finkelstein said. “But the fact that it’s coming back again, people are kind of running on fumes. It’s an ideal set up for burnout on top of the usual.” A 2019 National Academy of Medicine report showed the medical profession suffers from an alarming rate of burnout caused by high stress, high demands, high patient caseloads, long hours and a lack of resources. The National Academy of Medicine estimated that 35 to 40 percent of practicing physicians and nurses experience symptoms of burnout. In a survey released in July by the American Nurses Foundation, the philanthropic arm of

Finkelstein

Johnson

Ries

the American Nurses Association, nearly 30 percent of almost 10,000 nurses who responded said they had experienced feelings of depression. The survey was conducted from March to July, well before the recent surge of COVID-19 cases across the U.S. Brian Peters, CEO of the Michigan Health and Hospital Association, cites a June article in the international medical journal QJM that reported on studies showing anxiety among medical staff at hospitals globally as high as 70 percent during the pandemic. Symptoms of depression were as high as 40 percent, which Peters called “an incredibly high number.” Insomnia, burnout and emotional exhaustion rates were similar, according to QJM. Peters worries the pandemic has “absolutely worsened” burnout in the health care industry. The present case surge this fall followed “a little bit of optimism” over the summer when infection rates and hospitalizations declined after peaking in the late spring, he said. “It’s a real gut punch to have what we’re dealing with now — not only the numbers going back up, but for many hospitals in the state really seeing record high numbers of inpatients,” Peters said. The uncertainty over when the pandemic wanes contributes to the elevated stress and anxiety of medical personnel, said Dr. Elishae Johnson, a psychotherapist and Bronson Healthcare’s assistant director of business health services who leads its employee assistance program. Visit www.mibiz.com

Even with the promise of a vaccine in the coming months, the inability to gauge the future weighs on staff who are trying to keep up with a surge in COVID-19 patients and heavy workloads, Johnson said. “What’s more challenging about COVID-19 is we can’t foresee where it ends. So, the question is, ‘How long am I going to experience this?’” she said. “It’s hard to heal from a trauma when you’re still in it.”

Expanding employee services West Michigan hospitals contacted by MiBiz report higher use of employee assistance programs by staff and their dependents, and say they have significantly ramped up emotional support for staff through a number of initiatives. At Bronson, for example, counselors routinely spend time on hospital floors to talk to nurses and other staff about how they’re managing stress and anxiety, or to just simply let them vent, Johnson said. Bronson also does one-onone counseling for staff and group sessions, she said. Employees’ emotions include empathy for those battling COVID-19, gratitude for the show of support they’ve received from the public, and Gonzalez fear, frustration and a sense of helplessness, Johnson said. The use of Spectrum Health’s 24-hour employee assistance program grew 30 percent in the third quarter alone, said Chief Human Resources Officer Pam Ries. Spectrum has stepped up programs to support staff, including deploying digital health tools. More than 3,000 Spectrum employees have enrolled since September in an app called Headspace that helps users decompress and manage their stress, Ries said. Spectrum piloted the app with physicians, who found it so effective they started to prescribe it to patients, Ries said. The health system then provided the app to nurses and eventually all employees, she said. “This is just another way in which we can offer an opportunity that might meet some peoples’ needs,” Ries said. “We know not one size fits all, which is why we’ve offered a lot of different ways people can engage. “Everyone’s struggling with different things right now.”

Support ‘all the way around’ On top of the surging caseloads, medical personnel face the risk and worry of contracting the coronavirus while on the job then carrying it home and potentially infecting their family. Employees are stressed over keeping their families safe and the greater difficulty of balancing their home and work life as they work longer

hours, particularly if they have young children at home. Hospitals are responding in a variety of ways to help staff cope and ease the external stresses and anxiety away from the job. Measures include providing bonus pay and onsite child care, greater schedule flexibility to better balance work and home, and offering financial assistance for employees who are experiencing hardship when, for instance, a spouse lost their job or was furloughed. “It’s just chipping away at the little things that are really making life hard so that we can try and help support them all the way around,” said Jennifer Gonzalez, chief human resources officer at Metro Health-University of Michigan Health. “We absolutely can’t change COVID, but we talk about additional things that they may need,” Gonzalez said. “It’s a lot that our frontline staff are dealing with everyday.” During the pandemic, Metro Health launched an office for professional well being to focus on staff physical, emotional and professional welfare and to address burnout, stress, fatigue, quality of life and the work-life balance, Gonzalez said. Metro Health also provides $1,500 in emergency assistance that was funded by the hospital’s foundation. Trinity Health — the Livonia-based parent company of Mercy Health in West Michigan — has a Colleague Emergency Assistance Program that provides employees up to $2,000 in financial assistance, said Ane McNeil, senior vice president and chief human resources officer at Trinity Health. To date, the program has provided more than $1 million to more than 700 employees, McNeil said. Some hospitals also have used federal CARES Act funding to provide bonuses or hazard pay to staff, Peters said. Trinity Health is among the organizations that paid bonuses. The health system in November gave staff a $600 “appreciation award” and a “gesture of thanks to our colleagues for everything that they continue to do,” McNeil said. Likewise, Spectrum Health a few weeks ago paid staff a $500 bonus, Ries said. Metro Health plans to set up hospital respite centers for staff to get away between shifts, relax, and read messages of gratitude from the community, Gonzalez said. If someone contracts the virus and wants to isolate away from home, they can get discounted rooms at the Hyatt hotel near the hospital’s campus, she said. To help staff with family at home, Metro Health worked with the Metro Health Hospital Foundation and the nearby SpartanNash YMCA in Wyoming to provide free onsite child care, plus reinstituted two weeks of paid leave first provided last spring for an employee who contacts the coronavirus or needs time off to care for someone who is infected. “It really is checking another worry off of their list,” Gonzalez said. “They know they have the security if they need it to be able to stay home and take care of their family.”

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MANUFACTURING CYBERSECURITY Continued from page 1

pretty significant. If you don’t have clean backups, you’re forced to pay the ransom, or else.” NuWave has locations in Grand Rapids, Kalamazoo and Lansing and also provides local support for businesses in Traverse City, St. Joseph, Jackson and Southfield. The company specializes in working with manufacturers, putting Paalman on the frontlines as the industry faces these sophisticated threats. “I would hope (Steelcase) had enough network segmentation that it only impacted specific areas of the network, and that’s the level of detail I don’t have yet,” Paalman said. “When you go back to cases like the Target Corp. breach … (companies) don’t want to share that stuff. You may never hear the exact details.” In late 2013, the Minneapolis-based retail giant faced a data breach involving millions of customers’ credit card information, leading the company to make widespread improvePaalman ments to its cybersecurity platform.

A lesson for the industry The Steelcase attack is far from an outlier as manufacturers of all sizes face the same types of cybersecurity threats. Stefan In the “2020 State of Encrypted Attacks” report by San Jose, Calif.based software company ZScaler Inc., health care and finance proved to be the most popular targets for encrypted attacks with manufacturing a not-so-distant third. The industry saw 1 billion encrypted attacks through September 2020, according to the report. Ransomware is especially potent, and threat actors are upping the ante in terms of ransom. Coveware, a Connecticut-based firm that specializes in combating ransomware, reported that from Q2 to Q3 of 2019, the average ransomware payment increased 13 percent to $41,198 per attack.

In a Deloitte LLP-prepared report called “Cyber Risk in Advanced Manufacturing,” the global firm said manufacturing faces cyber risks of increased complexity as it adopts Industry 4.0 digital practices and solutions such as sensor technology, smart products and internet of things (IoT) strategies. Many assume hackers are primarily after sensitive information, which might be true for heavily attacked industries such as health care and finance. However, manufacturers that don’t deal with much sensitive information should not feel complacent, experts say. “We’re seeing a lot more ransomware type attacks,” said Jeff Stefan, attorney with Varnum LLP, who specializes in data privacy and advanced mobility. “They’re not necessarily

focused on obtaining sensitive, personal information or financial information for identity theft. But I think there is — unfortunately, because it’s a terrible thing — a lucrative business surrounding locking up systems and demanding ransom in exchange because of how vital certain servers and these systems are to companies.” Stefan said a robust defense against cyberattacks is a mix between the right technology but also organizational structure that focuses on cybersecurity. This means having one or multiple people — preferably higher ranking employees — who are accountable for cybersecurity. Stefan also said cyber insurance programs are important for businesses, and the expenses that come with cybersecurity are no longer optional — they’re simply a cost of doing business.

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Some industries are given federal standards to follow, but Stefan said those standards should be just part of the equation. “Regulation with cybersecurity is very tricky,” Stefan said. “You have to strike the right balance between encouraging companies to implement the best practices and doing what they need to do organizationally as well as from a technological standpoint. “There is a fine line between becoming too prescriptive where you don’t want companies that are spending a lot of money and resources just to comply with the law as opposed to diverting that money to what’s best suited to respond to threats.”

Manufacturers heed warnings John Waack, director of information technology for Holland-based furniture manufacturer Trendway Corp., said the company has spent time over the last three years restructuring its cybersecurity posture from top to bottom. Fellowes Brands acquired Trendway in the summer of 2019, and Waack said Trendway has been able to tap into the company’s cybersecurity resources, as well. In the spirit of educated its employees, Waack and his staff implement a security awareness test and training tool called KnowBe4. The program simulates phishing attacks on employees — traditionally urging or tricking users to click on an infected link — and customizes training based on how the worker responds to the message. A few years ago, Waack and his team spotted a ransomware attack before it profoundly affected the company’s system. The event helped prompt the company to reassess its approach to cybersecurity. “We did a pretty significant review of our system security, our backups, the frequency of our data backups, and things like that,” he said. “We’ve positioned ourselves to be as insulated as possible from a ransomware attack.” “That’s easier for us than it is for Steelcase in quantities of data,” Waack added. “We’re talking about a couple terabytes of data here, versus Steelcase, which is probably in the petabyte range, a thousand times bigger.” Visit www.mibiz.com

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MANUFACTURING: Leading Positive Change

RAND RAPIDS, Mich. —Though many manufacturers tout leadership as one of the most important aspects of their businesses, many fail to understand the nuances of leadership, which can make the difference in an organization’s long-term success. That was the takeaway message during the recent installment of the “Manufacturing Back-to-Basics” webinar series hosted by the Michigan Manufacturing Technology CenterWest and MiBiz. This fourth and final installment of the four-part webinar series brought together industry experts and manufacturing executives to discuss the finer points of leadership and how positive leadership informs a strong company culture. “Leadership isn’t something that you can just send a group of your leaders out, they go away for a weekend, come back and they’re all of a sudden a leader,” said Jack Russell, president of Muskegon-based Rolar Products, who participated in the webinar. “Leadership is a process.” While a nebulous topic at times, leadership forms the bedrock on which most of a company’s success is built, according to Ben Wood, a business development specialist with The Center-West who focuses on leadership training. During the webinar, Wood noted that effective leadership impacts everything from workplace culture and talent retention, to the company’s reputation among its industry peers and customers. “When you have good leaders, people want to work for you and want to impress you. As opposed to the alternative which is coming in just to get a paycheck,” Wood said, noting customers can also tell the difference in worker morale when a company exhibits positive leadership.

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A CULTURE OF LEADERSHIP

Developing strong leadership was key to Russell’s strategy for Rolar Products. Following a career with an international automotive manufacturer, Russell purchased the small machine shop five years ago with five workers. Since then, he and his team have grown sales by 500 percent and expanded its workforce to 25 employees. For Russell, leaders need to be emotionally committed to their role, which includes a willingness to be vulnerable. Leaders must also genuinely want to lead. Russell noted employees are often promoted to leadership positions because they are the best at their job, not necessarily because they desire to lead their fellow workers. Additionally, prospective leaders must also believe in the company’s culture, he said. “The people have to be willing to buy into the vision … and want to participate,” Russell said. “That’s the only way you’re going to make money or move forward – if the most important assets, the employees, are in it with you.” Specifically, Russell encourages leaders to develop a true interest in their people. For him, that goes beyond paying mere “lip service” to the notion that people are a company’s most valuable asset. Leaders should interact with their employees in a way that shows they are genuinely interested in their lives and their family. For example, instead of asking employees how their families are doing every day, effective leaders need to remember their employee’s responses from previous conversations, take those into account, and ask new meaningful questions, he said. “People know you’re just asking the question … and aren’t really interested in the answer,” Russell said.

LEADING AT ROLAR

Russell has established several key strategies for effective leadership at Rolar Products. For one, he shares business details with employees on the shop floor, including sales prices of each part Rolar produces. Russell and his leadership staff also encourage all workers to come forward with suggestions to improve workflow, quality or other aspects of the business. “Whether it’s your job or not, everyone is encouraged to challenge the status quo,” Russell said. Additionally, Russell includes employees in hiring decisions. Prospective applicants are often invited to come in and work a trial shift with the rest of the team, who then determine if the individual may fit with the rest of the workforce. From there, employees share their observations with management. Ultimately, instilling positive leadership comes down to consistency in ensuring each member of the management team shares the same vision of the company, particularly as the company grows, Russell said. For larger companies, he recommended executives continue to add managers to avoid a situation where one person may be responsible for managing some 100 employees. “If you don’t have those people well trained and in line with what the vision is for your company, it’s going

to go askew very quickly,” Russell said. “Second shift is going to want to do something differently, the third shift is going to want something different…You have to make sure … that you can keep those personal relationships.”

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FINANCE reporter’s NOTEBOOK Mark Sanchez writes about finance, health biz and life sciences. 616-608-6170 • msanchez@mibiz.com

Getting to know you Raising capital for a startup company is never easy, though there are steps entrepreneurs with a dream and a vision can take to help their cause. Early-stage investors want to back companies with innovations that solve a problem in the market and have a potential for high growth. One of the first things they look at is a startup’s management team that a founder has assembled. The due diligence investors perform on an investment prospect will include not only analyzing relevant experience and the quality of the management team, but also determining how well leaders listen and learn. They’ll want to know as part of their due diligence how “coachable” a company is, said Jeff Wesley, executive director of Red Cedar Ventures in East Lansing, the venture capital subsidiary of the Michigan State University Foundation. “Team is everything. The person’s attitude is everything. When that person walks in the door, is this somebody I can engage with? Somebody I can coach? Will they listen to advice?” Wesley said during a recent webinar hosted by the Michigan Venture Capital Association. “Have they gone out and gotten advice from lots of people they can reach out to, or are they set in their ways in terms of what they want to do? I don’t think you can make an investment if you can’t check all of those boxes,” Wesley said. “You can have the greatest technology, but I really believe in leadership and I really believe that sets the stage for the whole Wesley culture and the team. I think that’s a key element of de-risking any opportunity.” Wesley and Paul D’Amato, managing director of two venture capital funds run by Grand Rapidsbased Grand Angels, emphasized the need for entrepreneurs who pursue a capital investment to view investors as partners. Investors want to know how well entrepreneurs and the management teams they back will listen to their advice. Wesley described the business relationship between the investor and a startup’s leadership as D’Amato a marriage. “We have to be able to work together on a day-to-day basis and be aligned if the company is to be successful,” said Wesley, who’s also executive director of Michigan Rise, a new early-stage seed fund launched this past summer. Backed by the MSU Foundation and Michigan Strategic Fund, Michigan Rise invests in young tech companies in the state. Since launching in August, Michigan Rise has looked at 75 to 80 applications that were submitted through its website and funded 10 so far, Wesley said. He expects Michigan Rise to close roughly 30 deals a year. As investors perform their due diligence on investment prospects, startups just as importantly need to look closely at their potential investors, D’Amato said. The notion of “open and coachable” goes both ways, he added. “We need to work together, and if they think they can’t work with us, then I’d rather know that right up front. We’re probably going to work together for five or six years. That’s the average. That’s a long time, and it’s not always going to go in a straight line. Sometimes there will be tough things we’ll need to work through,” D’Amato said. The trust factor includes entrepreneurs understanding that investors are not there to steal their idea, D’Amato said. Grand Angels has been in business for 16 years “and we would not be in this business any longer if we started doing that,” he said. As due diligence proceeds, startups must commit to full disclosure. Investors will hold their information in confidence, D’Amato said. Companies that withhold or decline to part with requested information — whether financial projections or highly detailed information on their product or service — won’t get funded. “If we say we need 10 pieces of information and we get five, I can’t make a decision. I just can’t do it, and that’s how it goes sometimes,” D’Amato said. “It can slow down our process, and in the past it’s also just killed deals. We just couldn’t get the information we needed and we just had to pass.” Entrepreneurs need to keep in mind that they are competing for a capital investment and that few companies that investors look at ever get funded, heightening the need to put their best foot forward with a polished pitch when they do get in front of prospective investors. Grand Angels has looked at more than 2,000 prospects this year, completed a “serious level of due diligence” on about 300, and invested in six, D’Amato said. “So that’s a pretty sharp funnel,” he said. Investors who back startups can also bring more than needed capital. They offer an extensive professional and peer network that startups can tap for advice, guidance and insight, Wesley and D’Amato said. Those peer networks can also lead to a key introduction to a potential client or vendor, expertise needed to develop their product or service or on financial and business planning, or to secure additional capital in the future. “It’s a big part of what our value proposition is as an organization beyond the check,” D’Amato said. “We’re in it to help at any level and wherever we can. We’re trying to add more than just a check.”

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Grand Angels taps Dale Grogan as managing partner to expand reach across state By MARK SANCHEZ | MiBiz msanchez@mibiz.com

Foundation of North Central Wisconsin. During his tenure as Grand Angels president, Parker led the formation GRAND RAPIDS — The new managing of three affiliated angel groups — partner for Grand Angels looks to tap his Kalamazoo-based Ka-Zoo Angels, Flint statewide contacts to build a bigger presAngels, and Detroit-based Woodward ence among early-stage investors. Angels — under the Michigan Capital Dale Grogan joined the Grand Network umbrella. Rapids-based Grand Angels in late In Grogan, Grand Angels brought November from Charter Capital aboard a managing partner who’s experiPartners, where he worked for 13 years. enced, known across the state and “shares At Charter, Grogan helped launch and our passion for early-stage investment and manage Michigan Accelerator Fund helping communities thrive by providI, a venture capital fund, and Charter ing capital to early-stage founders,” said Growth Capital Fund, a mezGrand Angels Chairman Carl zanine fund. Erickson. Grogan saw an opportuHiring an executive who nity in Grand Angels to focus can offer an outside perspecSponsored by: on early-stage investing in tive “as we’re thinking about the TCF BANK startups that want to develop organization’s future” and who and commercialize an innovaknows the landscape for earlytion, and to work with entrepreneurs to stage investing in Michigan was “incred“solve a previously unsolvable problem.” ibly valuable,” said Erickson, the executive “I just like the intellectual pursuit of the chairman of Atomic Object LLC, a Grand early-stage stuff,” said Grogan, a one-time Rapids-based software developer. entrepreneur who has started new compa“We got the type of guy we needed,” nies. “I know how hard that is.” he said. “To find somebody just like we “If you think about what entreprewere looking for and who already hapneurs do, they recognize something that pens to be local and has a network in can be done better or something that Michigan is just incredible.” hasn’t been done before, and then they work like crazy to make that happen. To Restructuring, me. that is tremendously stimulating,” he expanding reach said. “I know that it takes lots of hands and Hiring a new managing partner comes lots of oars to make that happen, and as Grand Angels’ leadership works on a that’s a place I want to be. I want to be on restructuring plan that Erickson expects that bench pulling on that oar.” to roll out in early 2021. Charter Capital Partners’ venGrogan said his first task “is to really ture capital funds have previously coget the lay of the land” and understand invested in deals with Grand Angels. how the Grand Rapids market fits in with “I’m quite comfortable with this space. the larger statewide market. I know the folks,” Grogan said. “I feel like I “It’s really to extend the Grand Angels’ can hit the ground running on this one.” reach across the state so that the angels Grogan’s hiring follows the departure can have better access and more consisof Tim Parker, who left Grand Angels tent access to higher quality deals that they in October after four years as presimight not ordinarily see — things that are dent to become president and CEO of not in their backyard,” Grogan said. the Wausau, Wis.-based Community

FINANCE

Formed in 2004, Grand Angels consists of the angel investment network, plus two active venture capital funds. Paul D’Amato, managing director of Grand Angels’ venGrogan ture capital funds, said in a recent webinar hosted by the Michigan Venture Capital Association that there is “soon to be four funds.” “We are actively investing out of our third fund and will Erickson continue to do so until the second half of 2021. At that point, we will start investing out of our fourth fund. We will begin raising capital for our fourth fund during the first half of 2021,” D’Amato wrote in an email to MiBiz. Grogan will work with D’Amato to manage the venture funds. Grand Angels has invested about $3.7 million in 10 companies in 2020. Of that total, a little more than $2 million was from Grand Angels’ third venture capital fund, and about $1.5 million was through its angel network, which includes Grand Angels, Ka-Zoo Angels, Flint Angels and Woodward Angels, D’Amato said. Meanwhile, angel investing in Michigan has grown steadily for several years. Angels put $73.6 million into 106 startup companies across Michigan in 2019, which compares to $52 million invested in 84 startups in 2018, according to an annual report from the Michigan Venture Capital Association. The number of angel investors in Michigan also grew more than 50 percent from 859 people in 2018 to 1,322 last year, according to the MVCA.

Lighthouse Group acquisition could spur more Michigan deals for Chicago-area firm By MARK SANCHEZ | MiBiz msanchez@mibiz.com

he Chicago-area insurance brokerage firm that acquired Grand Rapids-based Lighthouse Group intends to look for other deals in Michigan. Alera Group, which started four years ago and now has more than 90 offices and 2,000 employees across the U.S., wants to accelerate organic growth through additional mergers or acquisitions in Michigan. “We’re their platform in Michigan,” said Lighthouse Group Managing Partner Tom Helmstetter, who started the insurance agency in 1995. “That’s clearly something that they’d like us to explore for them, to see where that might happen. Consolidation in our industry, you see it all the time. It’s happening at quite a quick pace.” Across the U.S., Chicago-based Optis Partners LLC — which tracks M&A in the industry — counted 466 transactions through the third quarter, a decline from the 499 deals in the first nine months of 2019 that reflects a disruption in deal flow during from the COVID-19 pandemic. M&A activity totaled 170 deals in the third quarter alone, virtually equal to the 171 mergers in the same period a year earlier, according to Optis Partners. After the 25 percent decline in the second quarter, the firm expects deal flow in 2021 “should continue unabated due to the increasing supply of capital chasing a still very large inventory of sellers.” Lighthouse Group in recent years has grown by high single or double digits, Helmstetter said. The firm today employs 175

people at eight offices across Michigan. Helmstetter points to the company’s Troy office that opened in July as providing a base for growth and potential M&A in the Detroit area. “We hope to expand that office, both organically and with some possible mergers,” Helmstetter said. “We’ve had that office open just a short time now, but already we’re seeing some real successes over there, so we think that’s going to be a natural growth area for us.” The deal with Alera Group came as Lighthouse Group management was thinking about “what might happen in the next few years,” Helmstetter said. The agency connected with Alera Group, an active buyer in the industry, through professional networking. The deal gives Lighthouse Group deeper expertise and insight in areas such as data analytics, benchmarking, plan design, and risk management and mitigation, Helmstetter said. “We’ve been very successful, but just because we’ve been successful in the past doesn’t mean it’s going to continue,” he said. “It provides a national-size company with the resources. We’ll still retain that local touch, but have those resources a national company can bring to us.” Terms of the deal were undisclosed. Strategic consulting and M&A advisory firm MarshBerry Capital Inc. in Woodmere, Ohio, served as financial adviser to Lighthouse Group in the transaction. Alera Group CEO Alan Levitz called Lighthouse Group “an exciting addition” to the firm. “There is a very natural cultural fit between our two collaborative organizations and an opportunity for Lighthouse to leverage Alera’s national platform for the benefit of their clients,” Levitz said. MiBiz / DECEMBER 7, 2020

SMALL BIZ “This is the time when we as a community have to be trying any and all things we can to support these local businesses. It’s no secret, this is a very challenging time.”

MEDC PROGRAM Continued from page 1

buyers can use when seeking suppliers for typical holiday gifts like food baskets, flowers and various crafts. Corporate entities also can customize their search for minority-, women- or veteranowned companies. For one, the initiative builds off a similar program the MEDC launched earlier this year for a Personal Protective Equipment (PPE) procurement platform. Also, during the pandemic, the MEDC has had to pivot from in-person, business-to-business matchmaking to virtual events. “We’re hoping to do this platform to give a little easier access point for not only corporations but small businesses in the area to see what else is in the community to support purchases from a local standpoint,” said Bobby Chasnis, director of the MEDC’s Pure Michigan Business Connect program.

Regional pilot The result is a regional, rather than statewide, pilot program for businesses in Kent, Ottawa, Ionia and Montcalm counties. “We’re looking to get some feedback from the Grand Rapids team before opening it to the entire state,” Chasnis said. Pure Michigan Business Connect is Sponsored by: coordinating the program that, as of SMALL BUSINESS ASSOCIATION Dec. 3, had 18 local suppliers signed OF MICHIGAN up from Grand Rapids, Wyoming, Kentwood, Middleville, Jenison, Lowell and Grand Haven. They include upcycled textile manufactures, CBD producers, skincare producers, floral shops, cleaning services, food retailers, candlemakers and jewelers. Most have gift certificates available. Within the first week of the program, officials hadn’t yet formally sought corporate purchasers. The virtual business-to-business initiative is modeled off an MEDC program in March that connected companies with PPE supplies. Chasnis said more than 3,000 submissions from companies in need of PPE have come in so far.

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Jessica Malkin, owner of Grand Rapids-based The Market Made. COURTESY PHOTO “Having that success and seeing a lot of individuals accessing this, we wanted to pivot off of that and see if it could translate into this holiday corporate gift-giving,” Chasnis said.

Getting noticed Pandemic aside, small businesses face daunting challenges when competing for online space against retail giants. “It would be great to see some of the bigger corporations from the west side or even smaller businesses just find different businesses they might not be aware of,” Chasnis said, noting what at times can be costly marketing for small businesses. “We’re hoping some of the smaller businesses that might not have that footprint will get noticed.” That’s the hope of Jessica Malkin, owner of The Market Made in Grand Rapids, who’s among the 18 supplier companies that have signed up. “The bigger companies and corporations just dominate the Google search page so much, it’s so hard to find local businesses with how their algorithms are and how they monopolize the internet space,” Malkin said. Malkin started her company selling various home decor goods

and professional design services during the pandemic. She lost her job as the manager of a retail store because she is high-risk for contracting the virus. “I wallowed for a couple of months trying to figure out what I wanted to do and looked for a virtual job but wasn’t having a lot of luck,” she said. Malkin heard about the Pure Michigan Business Connect program in early December in the #GRbossbabes Facebook group. She signed up to sell — JOE AGOSTINELLI customized home decor Executive Director of Grand boxes, interior design services Rapids Area Revitalization and various home goods. Task Force Other entrepreneurs also heard about the program through Facebook. Tracey Gerdeman, co-owner of the Southside Flower Market in Grand Rapids, found out about the program through the same social networking group. The woman-owned flower shop is approaching its one-year anniversary at its brick-and-mortar store. “Obviously, we’re not growing as fast as we’d like to” because of the pandemic, which shuttered floral businesses this spring, Gerdeman said. However, during the earlier months of the pandemic, the shop specializing in custom flower orders was able to deliver flowers that were assembled at the home of one of the owners. “You learn to pivot, and we pivoted every week,” Gerdeman said. The company is marketing itself in the Pure Michigan Business Connect program as a “European style flower market” that specializes in custom orders. “The opportunity to get your name out there and let people know you’re not just the normal florist is always awesome,” Gerdeman said.

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SPORTS

WHITECAPS PURSUE PUBLIC, PRIVATE SUPPORT TO MAKE UP FOR LOST SEASON By JAYSON BUSSA | MiBiz jbussa@mibiz.com

The Kalamazoo Wings are among West Michigan minor league hockey teams facing an uncertain 2020-2021 season because of the pandemic. COURTESY PHOTO

Minor league hockey teams sidelined, grapple with uncertain 2020-21 season By JAYSON BUSSA | MiBiz jbussa@mibiz.com

n a typical year, the Grand Rapids Griffins would be more than a month into its season on the ice. This year, though, the American Hockey League organization has found itself sitting, waiting and bracing for what promises to be a rough season on the balance sheet — that is, if the team laces up the skates at all. A broad surge in COVID-19 cases has not only delayed this year’s AHL season by several months, but if a season ever does get rolling, Griffins management doesn’t know what to expect from one of its primary revenue sources: Fans in the stands. “It’s not going to be a good financial year even if we come back under limited fans,” said Griffins President Tim Gortsema. “Whether that’s 25 percent or whatever — it’s still going to be not a good financial year at all for the team. However, we have always been committed to being a good league partner to the AHL as a whole and try to be a good partner to our affiliate,” the Detroit Red Wings. The AHL normally begins its season in October. On the heels of a premature ending to last season, Gortsema said it became apparent over the summer that the October start date was not realistic. The National Hockey League plans to kick off its new season at the beginning of January while the board of governors for the AHL settled on a Feb. 5, 2021 start date, even with no signs of COVID subsiding. Gortsema said AHL team leaders will reconvene this month for discussions. Individual teams will decide whether to play the season. For the Griffins, it’s too early to tell. “Every American Hockey League team, I think first and foremost, they want to be a good partner to their NHL team,” Gortsema said. “So, in our case, be a good partner to the Detroit Red Wings. If the NHL comes back in January or February, they’re going to need access to a player supply base in terms of supplementing their rosters due to injuries and call-ups and things of that nature. … But it’s to be determined how the next number of weeks or months will play out with the virus.” Roughly two-thirds of the AHL teams are directly owned by their NHL affiliate. These teams might find it in their best interest to subsidize a financially hobbled AHL team if it means Visit www.mibiz.com

maintaining access to players. The Griffins are independently owned. “I think the league is sensitive to all of the independent teams,” Gortsema said. “At the end of the day, it has to work for both sides. ...We’re just trying to figure out if we can find a happy medium here that works.”

Kalamazoo, Muskegon teams forge ahead The Kalamazoo Wings, which compete in the East Coast Hockey League, get a small jumpstart on the Griffins while the Muskegon Lumberjacks — a tier 1 junior hockey team of the United States Hockey League — has already kicked off its season, although recent statewide health restrictions have delayed their home opener at Mercy Health Arena. The K-Wings are slated to start their season on Jan. 15. Barring any major changes in regulations, K-Wings Business Operations Director Toni Will is tentatively planning to welcome roughly 500 fans into the Wings Event Center for the early season. That’s 10 percent capacity for an arena that seats 5,100, and the scant crowds won’t do the K-Wings any favors. “Does that cover our costs? No, not even close,” Will said of the 10 percent capacity scenario. “But, we are privately owned and we are fortunate in our ownership of (Greenleaf Companies Chairman) Bill Johnston and (Stryker Corp. Director) Ronda Stryker — they are very community focused and are very passionate about the Kalamazoo Wings.” Will added that the organization has around 500 season ticket holders, which would give those fans exclusivity to watch the team play and, if regulations ease up during the course of the season, the organization could sell additional tickets.

Saving revenues With limited fans, both the K-Wings and Griffins are forced to think outside the box on how to recuperate revenue lost to both ticket sales and traditional sponsorships that rely on signage and in-game announcements at the arena. “The inability to have games is devastating,” said Tom Sullivan, president and co-owner of LEAD Marketing Agency in Grand Rapids, which works with both the Griffins and Grand

Rapids Drive basketball team. “They get their revenue from ticket sales and when there are no games there is no ticket sales. Even if there is 25 percent occupancy, or whatever it ends up being, that is very difficult for minor league local teams.” Social media is one avenue to generate visibility for sponsors. The Griffins’ Gortsema praised the organization’s robust social media following, which is among the top in the AHL. When the pandemic started to interfere with operations, he said the organization leaned on social media to provide exposure for sponsors. The Griffins also have a radio broadcasting deal and stream games on AHLTV, just as all other teams in the league do. “These are all small potatoes relative to the bigger dynamic of being able to have fans in the stands and everything that goes with that,” Gortsema said. “But at least it’s an opportunity to generate some revenue.” The K-Wings will also be unveiling a leaguewide streaming platform through FloSports.tv to increase visibility for the team and sponsors. Will said the team is using every available resource, which includes its digital marquee that faces I-94 and receives 33,000 impressions per side each day.

COMSTOCK PARK — While cautiously optimistic about the 2021 season, West Michigan Whitecaps CEO Joe Chamberlin and his front office must still contend with the giant deficit left when Minor League Baseball shut down the entire 2020 season because of COVID-19. From alternative programming at Fifth Third Ballpark, which the organization privately owns, to an infusion of cash from partners and original investors in the team, the organization is looking to find solid financial ground to get to 2021. “In this year, our revenue will have declined by about 90 percent,” Chamberlin told MiBiz. “We’re a small business, we’re a seasonal business, and we’re a severely impacted business. So, since this pandemic started impacting our operation, we’ve been chasing every option available to us.” While programming at the ballpark has generated some revenue, it’s not nearly enough to address the shortfall. Like most small businesses, Chamberlin said the Whitecaps have received or continue to pursue government funding. Whitecaps Professional Baseball Corp. received an $834,600 Paycheck Protection Program loan on April 28, according to the U.S. Small Business Administration. Chamberlain also mentioned the federal RESTART Act for small businesses and the Save Our Stages Act for entertainment venues as two pieces of legislation that, if passed, the organization could leverage. Whitecaps officials have also pushed for state legislation that would defer property tax payments for businesses that have been shut down during the pandemic. Meanwhile, the Whitecaps have leveraged the partners and investors that helped bring the team to Grand Rapids 27 years ago and construct the stadium without tax dollars. The team created Whitecaps Bridge Fund LLC to help sustain the organization into the next year. RDV Sports Inc., originally established by Richard DeVos to purchase the NBA’s Orlando Magic, contributed between $100,001 and $250,000 in September for an interest in the bridge fund. The transaction was detailed in recent financial disclosures filed by Secretary of Education Betsy DeVos to the U.S. Office of Government Ethics. “We’ve had an incredible group of stakeholders and investors who brought the team here and bought the stadium back in 1994 and they’ve been a part of our ability to withstand 2020 and build a bridge into 2021,” Chamberlain said. “Just like any business, when you’re going through a year like 2020, you sometimes look to ownership and have to ask for some help, and we were no different.”

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FOCUS: CONSTRUCTION WRAP-UP COMMERCIAL CONSTRUCTION ROUNDTABLE

CONSTRUCTION LEADERS REFLECT ON 2020, EXPECT MORE STABILITY IN NEW YEAR By KATE CARLSON | MiBiz kcarlson@mibiz.com

est Michigan construction firms saw projects in the hospitality and office industries slow down this year because of COVID-19 restrictions, leaving many to get creative and pivot to industrial and residential markets. Gov. Gretchen Whitmer’s initial stay-home order to slow the spread of COVID-19 halted construction projects that were not deemed essential from March 23-May 7, launching the initial strain on the industry. Despite several obstacles this year that exacerbated construction’s ongoing talent shortage, including workers sidelined by the pandemic, industry leaders in West Michigan told MiBiz during a recent roundtable that they were aided by a healthy backlog of projects going into the year. Many are hopeful for projects in the hospitality sector to resume in 2021 with promising news about COVID19 vaccine studies, while some also noted the uncertainty of a close presidential election now in the rearview mirror. Participants in the roundtable were:

Chris Beckering Pioneer Construction Inc.

Mike Bishop TCF Bank

Megan Feenstra Wall Mathison | Mathison Architects

Brad Laackman Honor Construction

Ted Lott Lott3Metz Architecture

Bob Pomeroy Fishbeck

there and we could help out in our mid-market type of way which was very helpful.

I think it should be somewhat stabilizing. From just an overall market standpoint, I think that it’s yet to be seen what Biden’s infrastructure plan entails, how that will be funded and what impact that will have on our industry.

the construction technologies that come out of this.

n Chris Beckering, executive vice president of Pioneer Construction Inc. n Mike Bishop, head of TCF Bank’s West Michigan construction and real estate group n Megan Feenstra Wall, architect at Mathison | Mathison Architects and incoming president of the American Institute of Architects’ (AIA) Grand Rapids chapter n Brad Laackman, president and CEO of Honor Construction Inc. n Ted Lott, principal at Lott3Metz Architecture n Bob Pomeroy, architectural division principal at Fishbeck Here are some highlights from the discussion, which was conducted virtually via Zoom:

What have been key takeaways during the pandemic for your company or the industry? FEENSTRA WALL: Flexibility is the key for this year. With the AIA we had to pivot and cancel some events we were pretty excited about. Some things we could pivot to doing virtual and in that way we’ve increased some of our engagement across the state. We’re seeing more involvement from firms along the lakeshore than we were before. As a firm and an organization it’s just about being ready for what’s coming next and being flexible. LAACKMAN: We were also fortunate to work through the pandemic with some critical projects throughout (Grand Rapids), but it was maybe half of what we were planning. We have been making it through and making good progress on some things, but hitting the pause button on others. LOTT: We’ve been fortunate in the fact that we’ve been working straight through this. For us it’s been an acknowledgment of people we have working for us and folks we are working for. We’ve learned that we can handle it, that is one of the biggest things. We’re always challenging ourselves one way or another. It’s just heightened our confidence in ourselves. POMEROY: For us we were able to make the pivot to working remotely pretty easily, but we had lost a considerable amount of work so it was just a huge drop-off for us through most all of the markets we were in. We had an interesting conversation with a client, and they basically said, ‘Innovate or die.’ Visit www.mibiz.com

That became our new thing. We’re starting to find work in areas where we never were before and I think that helps us be stronger.

What new markets and projects have you been pursuing? POMEROY: We do a fair amount of higher education work and that really took a huge hit. It was really reaching out into biotech areas and pushing into that, which we’d never done before. We have (light industrial) clients in a different division but we had never really explored that, so we’re pushing that as well. BECKERING: When we had projects put on hold, we had guys who wanted to continue working and see what they could do, so we pivoted to the health care industry and helped some of the major health care (companies) in the area mobilizing vaccination and testing sites. We’ve been able to keep our guys busy with meaningful work while addressing the needs of the pandemic. You’ve got to be creative and do things that you haven’t done before. LAACKMAN: On a smaller scale we had done an enormous amount of hospitality and restaurant work, which of course took the biggest hit. Everything stopped — that was one of our specialties and so was office work, which has changed. A lot of (office projects) have turned into housing, and hospitality turned into health care for us. We switched those two areas out for the other two, called upon our old resumes and our staff’s experience to find a new way. The need was out

FEENSTRA WALL: We had a huge backlog when we first started, and we were incredibly busy in those early days of the stay-at-home order, so it was kind of overwhelming, but then we saw the same thing — some of our nonprofit, higher education and office work started to taper off. But in the meantime we also do residential and that has just been nonstop. So we were able to take some of those markets that were slowing and replace them with that residential work. All of our work has started to pick up again but residential is not slowing down. This last quarter is busier even than the first but there was certainly a lull over the summer.

How do you think the construction industry will be affected by the incoming Biden administration? BECKERING: The markets are indicating that they like the idea of a splitparty president and Senate control, and it looks like that’s the direction we’re heading. From that direction,

LOTT: It’s going to be much more about the next phase of the pandemic and the federal response to it. We have a huge logistical problem that we’re coming into with the vaccine distribution. This is what the federal government should be able to do well. I’m very hopeful we’ll be able to have a coherent federal response to this next phase of the pandemic. Hospitality is nonexistent right now — the quicker we get past the pandemic, the quicker those markets are going to come online. To me, that’s my biggest hope of a new administration.

What are you looking forward to in 2021? LAACKMAN: I’m really looking forward to the return of the hospitality industry. Out of catastrophe there is innovation and I’m really excited to see what happens in that market and also in the construction market, and

BISHOP: We have had several residential builder clients that have told us that throughout all of this, 2020 will be their best year ever. Throughout this people are still buying houses. FEENSTRA WALL: From an AIA standpoint I’m excited to continue the conversation of diversity and climate action. My experience with AIA is that it just moves so slowly as an organization, and I’ve witnessed this pivot. I’ve never seen them move so quickly as they have in the last few months. I’m excited about that and I feel like there might be some change coming. We have a backlog (at Mathison | Mathison) that could probably take us through the first quarter. Some of our nonprofit work is loosening up so I’m hopeful we can expand that. BECKERING: It’s all about that base, that manufacturing base in West Michigan. If we get that engine revving everything else will follow. That engine seems to be revving so we’re excited about opportunities to help local manufacturers, distributors and logistics companies expand and build new in our home town. MiBiz / DECEMBER 7, 2020

FOCUS: CONSTRUCTION WRAP-UP

PROJECTS TO WATCH IN WEST MICHIGAN

By KATE CARLSON | MiBiz kcarlson@mibiz.com

he COVID-19 pandemic has brought ups and downs for West Michigan’s construction industry — activity and competition has increased in areas like school bond projects, while the hospitality and office sectors saw major slowdowns. Across the region, though, several major developments remain on the horizon. They range from marquee developments that have been in works for years to some that were unveiled during — and are being guided by market forces resulting from — the public health crisis. Here’s a look at major projects planned across West Michigan:

MUSKEGON APARTMENT TOWER

THE MILL AT VICKSBURG

TOWERS ON RIVER

n Architect: Hopkins Burns Design Studio PLLC n Construction manager: Frederick Construction Inc. n Cost: $80 million n Completion: 2025

n Construction manager: Midwest Construction Group Inc. n Architect: Integrated Architecture LLC, Holland Engineering n Cost: $20 million n Completion: 2022

A former Southwest Michigan industrial site in Vicksburg is undergoing a massive $80 million redevelopment. The project was the second in the state to receive transformational brownfield incentives to turn the historic Lee Paper Mill into what will include an 84-room hotel, brewery, distillery, beer garden and restaurant. The goal is to create a regional destination focused on beer, events and live music, said Jackie Koney, director of operations for Paper City Development LLC. The project was initially planned to open in phases starting in 2022, but developers are now holding off until all aspects of the development are completed for an anticipated 2025 grand opening, Koney said. Construction started in June 2019, of which portions were delayed by the pandemic this summer. Paper City Development was founded by Vicksburg native Chris Moore, who now lives in Seattle where he opened Old Stove Brewery five years ago and also owns software firm Concord Technologies. Moore will open a second location of Old Stove Brewery, as well as a brewery museum, as part of the development. “We want it to be a brewery destination,” Koney said. Despite some delays this year, construction is progressing. Six buildings that were not historic were removed from the property, exterior masonry has been completed, and work is now starting on interior renovations. “Between removing the exterior buildings and cleaning up the brick, it looks stunning,” Koney said. “Instead of white and gray paint, you’re seeing new paint and steel. It’s to the point where people can’t see what it looked like before.”

A five-story, mixed-use building with luxury condominiums is planned for 159 South River Ave. in Holland. Four medical suites will take up the second floor of the building, which will have parking on site for patients and tenants. The project is also expected to include retail space on the main floor of the facility. Condo units will range from 1,000 to 2,500 square feet and will include one- to three-bedroom units at market rates. The facility will include a fitness center and a community terrace bordered by a green roof system. “It’s a very unique project, it’s luxury living in downtown Holland, which I think is a very attractive area,” said Mike Corby, executive vice president at Integrated Architecture LLC. “There aren’t many walkable downtowns that compare to Holland in the state of Michigan. It’s a nice example of a mixed-use project with condominiums, retail and medical.” The building’s modern design includes nine individual but connected towers, which will allow for scenic views and natural light in all of the units, Corby said. The existing building on the site is expected to be demolished in the next several weeks, and site work is could begin in mid to late December. Construction is expected to be completed sometime in 2022. “We’re looking forward to bringing some stylish architecture into town. We see that there’s a need for high-end residential property in downtown Holland,” said project developer Dennis Jacobs. “The development that’s been done by GDK and others to extend Eighth Street and at the Civic Center creates a need for this project.”

DECEMBER 7, 2020 / MiBiz

n Construction Manager: Ferguson Development LLC and Brianna Scott n Architect: Integrated Architecture LLC n Cost: $10 million n Completion: 2021-2022 A 10-story market rate residential development is planned for a former bank building at downtown property owned by the city of Muskegon. Upwards of $10 million will be invested in the redevelopment at the corner of First Street and Clay Avenue. Plans include 50-60 apartment units in the first phase, which is expected to be completed in 2021. An additional 12-16 units are planned for phase two, which is expected to be finished in 2022. “This serves one of our biggest economic development initiatives, which is increasing residential development in downtown,” said Jake Eckholm, Muskegon’s economic development director. Eckholm also noted the project’s African Americanowned construction team led by Michigan State University Trustees Joel Ferguson and Brianna Scott. “It’s a large-scale development, so it’s great we can bring some diversity to the project,” Eckholm said. Ferguson Development LLC spent nearly $300,000 investigating the site to determine if it could retain the existing frame of the structure, Eckholm said. The developers learned they could keep the steel frame, which will result in some efficiency on the project, he said. The original intent was to use the first floor as commercial space, which changed when the pandemic hit, Eckholm said. Instead, “robust tenant amenities” are planned for the first floor, which include a large packaging room, meeting spaces, a game room, and leasable offices to accommodate people working from home, Eckholm said. “With the advent of COVID-19 wreaking havoc on the commercial real estate market, it is harder for those ventures to get funded,” Eckholm said. “If the market recovers in the future, we can still convert some of that space for commercial use.”

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MiBiz / DECEMBER 7, 2020

HARRISON PARK APARTMENTS DWELLING PLACE | GRAND RAPIDS, MI 2020 ABC EXCELLENCE IN CONSTRUCTION AWARD

FOCUS: CONSTRUCTION WRAP-UP MCCAMLY PLAZA HOTEL n Construction manager: TBD n Architect: TBD n Cost: $15 million to $20 million n Completion: 2022

KALAMAZOO CREAMERY

PERRIGO HEADQUARTERS

n Architect: Byce & Associates Inc. n Construction manager: Hollander Development Corp. n Cost: $14.7 million n Completion: January 2021

n Construction manager: Rockford Construction Co. n Architect: TBD n Cost: $44.8 million n Completion: TBD

The former site of Klover Gold Creamery is transforming into a mixed-use development in Kalamazoo’s Edison neighborhood. The three-story building will have 48 residential units, including 38 dedicated to tenants who make 30 percent or below Kalamazoo County’s area median income. The facility will include a YWCA daycare with a natural outdoor play area, a co-working space, Hollander Development Corp. offices, retail space, outdoor patios, a rooftop terrace, exercise room and group gathering room. The project is planned to be LEED Platinum-certified with solar panels on the roof. Construction is wrapping up on the $14.7 million project, and the apartments should be completed by the end of January 2021, said Michael Flynn, vice president of Byce & Associates Inc. “This was really a group effort with the neighborhood association to come up with an organic design for the community,” Flynn said.

Perrigo Co. plc is relocating its North American corporate headquarters to downtown Grand Rapids as part of the Michigan State University Grand Rapids Innovation Park under development at 430 Monroe Ave. NW. The company plans to invest nearly $44.8 million in what will be a 63,550-square-foot facility, which is expected to create 170 new jobs on Medical Mile. The company received a $2 million grant from the Michigan Strategic Fund for the project on Oct. 27. “It’s about as significant as it gets in my business,” The Right Place Inc. CEO Birgit Klohs previously told MiBiz of landing a downtown headquarters. “It is an unbelievable success. Having a global company downtown is huge. It can’t be overestimated how important it is.” The new office will primarily house corporate and functional leadership as well as some administrative roles. The facility will include an adaptable, collaborative workspace.

The McCamly Plaza Hotel is getting a facelift and rebranding after being closed since November 2019. After acquiring the property from its previous owner on Nov. 3, Battle Creek Unlimited is planning a complete renovation of the 15-story, 239-room hotel in downtown Battle Creek, located at 50 Capital Ave. SW. The economic development organization has retained Suburban Inns to assist with rebranding and renovations, and plans to reopen the hotel in 2022. The project is expected to help attract international business travel to the area. The hotel includes event space for conferences and conventions and is connected to Kellogg Arena. Battle Creek Unlimited President and CEO Joe Sobieralski said he is “confident this property can be transformed into a showpiece that’s a regional draw for Battle Creek.” The project is still in the planning and design phase, with construction expected to begin in the spring of 2021, Sobieralski said. “I’m extremely excited about this project. It’s a pivotal piece in the revitalization of downtown, even though it’s a little bit outside our wheelhouse, but that makes it an even more exciting project.”

We Built That.

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From the beach

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FOCUS: CONSTRUCTION WRAP-UP HAYMARKET PLAZA n Construction manager: Treystar Inc. n Architect: TowerPinkster, Kingscott Associates Inc. n Completion: June 2021

LAKESHORE CONVENTION CENTER n Construction manager: Clark Construction Co. Inc. n Architect: Progressive AE Inc. n Cost: $19.5 million n Completion: 2021 After a temporary delay this spring because of the pandemic, construction is wrapping up on the Lakeshore Convention Center in downtown Muskegon, which will serve as a conference and event venue set to be completed early next year. The new 45,000-square-foot venue at 470 W. Western Ave. is attached to the Delta Hotels by Marriott Muskegon as well as Mercy Health Arena. The new convention center is designed to accommodate groups of up to 1,000 people in its 20,000 square feet of meeting space.

PEERLESS FLATS n Construction manager: River Caddis Development LLC and AVB Inc. n Architect: Progressive AE Inc. n Cost: TBD n Completion: Summer 2022 A 133-unit condominium and apartment project will soon become downtown Grand Haven’s largest residential development. The project, at 125 Elliot Ave., is on the former Stanco property, a 4.66-acre site near Grand Haven’s waterfront. The project developer is Kevin McGraw, president of East Lansing-based River Caddis Development LLC, and construction is planned in a single phase. The project includes 124 market-rate apartments ranging in size from efficiency to two-bedroom units. Nine condominium units are also planned along Second Street. The Grand Haven City Council reportedly gave unanimous support for the project last month.

The public alley between four downtown Kalamazoo buildings — 229-251 E. Michigan Ave. and the recently completed $100 million Catalyst building at 180 E. Water St. — is being redeveloped into a shared community space called Haymarket Plaza. The project will feature a snowmelt system, lighting, outdoor furniture, an open area for entertainment and food trucks, as well as a three-dimensional art display that will project local art from the community. Project funding managed by the Monroe-Brown Foundation came from a variety of sources, including the city of Kalamazoo, the Michigan Economic Development Corp., and a Patronicity crowdfunding campaign that raised nearly $54,000. Millions of dollars were invested to install the snowmelt system, and the art display will cost about $220,000, said Fritz Brown, a partner at Treystar. “There is nothing like it anywhere in any city our size,” Brown said. “This 3-D projection mapping is really cool and brings a big city feel to it, and is a huge picture that will be projected on the side of the Haymarket building.” Projectors for the development will arrive later this month, but will not be used until June 2021 when the outdoor furniture is also installed, Brown said. Project developers originally planned to open the plaza this month, but the COVID-19 pandemic has slowed the project’s urgency. “We’re excited about it and can’t wait to show everybody,” Brown said.

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MiBiz / DECEMBER 7, 2020

FOCUS: CONSTRUCTION WRAP-UP

School bond projects provide reliable work for firms during pandemic By KATE CARLSON | MiBiz kcarlson@mibiz.com

-12 school bond projects have emerged as an increasingly reliable source of work for West Michigan construction and architecture firms, even though some districts opted to delay putting projects to a vote this year because of the pandemic. Most construction firms were able to lean on a healthy backlog of projects throughout the pandemic, but it was still a year of uncertainty as hospitality, higher education and office projects were largely delayed or put on hold indefinitely. However, the longevity of multi-year school bond projects has provided firms some stabilization this year.

“This has really been a strong market to keep us stable while other markets come back,” said Matt Slagle, a principal and director of K-12 education at TowerPinkster. About a dozen school bond proposals passed in 2020 in West Michigan, totaling nearly $650 million. The bidding process has gotten more competitive as some architecture firms that lacked a history with school projects pivot to the K-12 sector. The share of the K-12 market in TowerPinkster’s workload has increased from roughly 40 percent last year to about 60 percent, Slagle said. When many health care and higher education projects were put on hold this year, the firm focused more on K-12. TowerPinkster planned to be the architect for 10 school bond projects slated for the May 5, 2020 election ballot in West Michigan. Of those, five districts delayed putting their bond project

to a vote because of the pandemic. The five that stayed on the ballot each passed. “The ones that delayed were primarily at the governor’s request. They didn’t have all of the absentee voting process figured out,” Slagle said. “The school bonds that stayed on the ballot primarily were no tax increase that needed to be passed before the millage fell off.” School districts that rescheduled were on the Nov. 3 ballot or will be determined during the May 2021 election, Slagle said. The firm is involved with nine bond projects totaling $308 million that are expected to be on May ballots.

Stability in uncertainty Grand Rapids-based Owen-Ames-Kimball Co. is working on seven school bond projects that

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

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passed this year, which is a typical pace for the construction firm, said Chief Strategy Officer Josh Szymanski. K-12 construction makes up about 70 percent of the firm’s projects. “Things we’re noticing is when the absentee voter legislation (Proposal 3) passed in 2018, we were curious about how that would affect school bonds and thought it might hurt them. But if anything, it helped them — passage rates have been quite high,” Szymanski said. Historically, more absentee votes tended to work against school bond proposals passing, but that hasn’t been the case so far, Szymanski said. The pandemic likely led to fewer bond proposals making the ballot this year, but passage rates have “all been really steady,” he said. “The priority level has dropped, and rightfully so, and there are a few less bonds out there and a few less people looking at them than normal,” Szymanski said. “Nevertheless, the K-12 work still provides us a lot of stability.” This has also led to increased competition as more firms shift focus to the K-12 market. “When there is an RFP out for a project, there is at least twice the competition as before and you see people from out of state trying to get in on a school project,” Slagle said. “It’s really beneficial we’ve had this expertise for years and have been able to lean on it at this time.”

COVID’s effect on projects A key aspect to pursuing a school bond project is holding stakeholder engagement forums for the community, said Jeff Hoag, K-12 practice leader at Holland-based GMB Architecture + Engineering. “Once the pandemic hit, the ability to connect with people and to gather and get people together to help educate them on what the needs are and why a project is important, that got really challenging,” Hoag said. GMB, along with other construction firms in the region, created physical materials to send home with students, and made a transition to holding virtual stakeholder forums. Slagle “What we’ve found is that the process in some ways allowed people to feel more comfortable attending those meetings,” Hoag said. “A lot of the material is being recorded, so they can go back and watch it. In some cases we’ve seen greater participation than in the traditional forums.” Szymanski Several West Michigan architecture firms involved in K-12 construction have noted increased participation in virtual community forums. TowerPinkster, for example, saw triple its normal forum participation the first time it held a community forum over Zoom. Some logistics of school bond projects are also changing because of the pandemic. The focus for school developments has long been on student safety, but this year included a renewed focus on increasing air quality and upgrading HVAC systems to help with room ventilation. “What I’ve seen is people really starting to embrace the idea of health, safety and security all rolled into one,” Hoag said. School leaders are also interested in creating more large, open spaces rather than enclosed areas, said Steven Hoekzema, another director of K-12 education at TowerPinkster. “Some of our clients are concerned about healthy environments more now so we’ve increased ventilation, and they’re interested in operable windows, and are holding breaktimes outdoors on patios rather than inside,” Hoekzema said. Szymanski agreed that, while always a priority, air quality has moved to the top of the list. “It’s an obvious way to address the situation,” Szymanski said. “We can’t make every classroom bigger, but if we can improve the air quality, how students flow in and out of classrooms, then those are things we can change.” Visit www.mibiz.com

Higher ed capital outlay projects screech to a halt By KATE CARLSON | MiBiz kcarlson@mibiz.com

tate funding uncertainty during the pandemic has been a key factor in the lack of large construction projects this year at community colleges and universities. Construction firms that rely on higher education projects, including those in the state’s capital outlay list, have had to look elsewhere for work during 2020. The list includes potential projects at universities and community colleges that qualify for a portion of state funding. “Pretty much everything” has been put on hold at public universities this year aside from some smaller projects, said Eduardo Blanc, senior vice president at TMP Architecture Inc. and director of the firm’s Kalamazoo office. “We do K-12 and college work, that’s our bread and butter,” Blanc said. “Only the projects already in the process of being built continued to happen.” Under the capital outlay process, public universities can apply for state funding for up to 75 percent of construction projects if it does not exceed $30 million. State universities and community colleges — especially larger universities with bigger budgets — also use their own funding for projects, which likely was on the decline this year with the uncertainty of the pandemic and decreased enrollment numbers. Capital outlay funding must be approved by state officials. Gov. Gretchen Whitmer has vetoed several capital outlay projects at public

universities, including two in 2019 and another five in late March 2020 as the pandemic took hold in Michigan. Each year universities are required to submit a five-year capital outlay project inventory of all campus facilities, which includes priority projects in which schools plan to seek state authorization to start the design process. This year, the State Budget Office issued a letter saying it would not accept or score proposals for priority projects, taking away the first step for new capital outlay projects to get off the ground. The change in the process this year will likely defer applications until next year, according to state officials. Some schools could decide to fund projects on their own, which has occured when projects were turned down in the past. “Any time there is a downturn in projects and they get put on the shelf, it takes a few years for them to come back,” said Mitch Watt, senior vice president and principal at Walker-based Triangle Associates Inc. Because the capital outlay system is on hold, most of TowerPinkster’s higher education construction projects are waiting for a state review to move forward, said TowerPinkster Marketing Manager Chloe Beighley-Ludeke. “Private institutions were able to continue. A lot of those projects are funded by donors and alumni, so that is money that had already been secured. But the majority of our public projects were put on hold,” Beighley-Ludeke said. “We were able to do some smaller engineering projects, but big flagship projects were not able to take place.”

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FOCUS: CONSTRUCTION WRAP-UP

Project delays, Zoom meetings, worksite safety: Construction lessons learned from COVID-19 By KATE CARLSON | MiBiz kcarlson@mibiz.com

he construction industry was one of many that was forced to switch up its workflow and get creative this year with the drastic changes, uncertainties, restrictions and additional safety protocols that were put in place amid the COVID19 pandemic. West Michigan firms found ways to innovate and were helped by going into 2020 with a healthy backlog of projects, but many developments

were also put on hold or suspended indefinitely during the pandemic. Construction and architectural firms had to adapt to a changing market and new restrictions to stay viable, industry representatives told MiBiz. Gov. Gretchen Whitmer’s first stay-home order that took effect March 24 stopped nonessential construction for nearly two months. Remobilizing after the construction shutdown proved difficult because everything was out of sequence, said Chris Beckering, executive vice president of Pioneer Construction Inc. During the shutdown, Pioneer was focused on keeping

its finger on the pulse of material availability, Beckering said. “One of the biggest challenges was trying to figure out what needed to be done, how to comply with ever-changing executive orders, and trying to figure out what the best route would be with conflicting information about the virus,” Beckering said. “We had to plan the best way to work in this pandemic in real time.” The virus and subsequent restrictions and safety protocols caused firms to adjust to some employees working remotely, as well as reconfiguring site layouts to comply with social distancing.

“We have been doing what we can virtually,” said Mitch Watt, senior vice president and principal at Triangle Associates Inc. “We tried to go back to the office but had some people get sick. We’ve been Zooming and doing conference calls.” Once employees returned to work after the shutdown, lumber was more expensive and harder to source, and the whole process was more time consuming with social distancing measures in place, said Jackie Koney, chief operating officer for Paper City Development LLC, which is managing the $80 million The Mill redevelopment in Vicksburg south of Kalamazoo. The virus spread also exacerbated the industry’s talent shortage, especially when employees contracted COVID-19 or were exposed to the virus and had to quarantine. “We only had one roofer on the site that contracted COVID-19, but if anyone from a company that subcontracts for us got COVID, we would ask their whole team not to come on site for 14 days, which really slowed things down,” Koney said. However, safety screenings added to the process for worker safety are now an efficient part of the workday, Watt said. “It has taken a lot of work and making sure everyone is checked in on the job site and keeping masks on,” Watt said. “We’ve done daily screening and temperature taking at the beginning of each day. Back in May it took a long time to adjust, but now that we have the system in place, it’s running smoothly.” For some tasks, Pioneer has added physical barriers when possible when workers have to be closer than 6 feet apart, Beckering said. Watt “Gearing up is part of our regular routine, so adding a mask is one additional step,” Beckering said. “In that sense, I think adoption was fairly simple compared to other industries.”

Going remote

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DECEMBER 7, 2020 / MiBiz

Working remotely was initially a hard transition for some industry employees, especially at TowerPinkster, said Chloe Beighley-Ludeke, the firm’s marketing manager. “ We are really culture focused at TowerPinkster, so it was hard for us to not be in the office together and have those in-person meetings, stopping by people’s desks and having those interactions throughout the day in our open-concept office,” Beighley-Ludeke said. Several firms in the region, including TowerPinkster, told MiBiz that being forced into the remote work flow will be beneficial long term. “We’ve found new ways to interact to get projects done quickly, to meet with our clients efficiently over Zoom,” Beighley Ludeke said. “This is something we will continue with some of our clients in the future who are farther away.” Other firms also see benefits with the transition to more virtual work. “You still miss the in-person activities, but sometimes it’s been even better than before just because people are so respectful of everyone’s time and everybody has more of an opportunity to contribute when you are meeting virtually,” said Eduardo Blanc, senior vice president at TMP Architecture Inc. “Every crisis you have to learn from and it was a good lesson learned, how to conduct the same type of process remotely.” There is a renewed emphasis on the importance of communication among team members and clients to keep everyone on the same page, Beckering said. “That takes a lot of collaboration onsite and offsite,” Beckering said. “We’ve fared well, largely as a trade, by transitioning to digital and remote platforms. Now we’re much more able to work remotely as much as necessary.” Visit www.mibiz.com

ASAM IS PROUD TO ANNOUNCE ASAM IS PROUD TO ANNOUNCE:

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BUI LD I N G A S T R O N G ER W ES T M I C H I G A N CO NS T R U C T I O N I N D U STRY The American Subcontractors Association of Michigan (ASAM) is dedicated to providing services and benefits that help trade contractors, suppliers and service providers become more successful. Through member meetings and networking, ASAM provides educational opportunities, valuable information and Business Practice Interchange (BPI) sessions for trade contractors throughout Michigan. As beneficiaries of ASAM’s decade-long groundwork, our organization continues to advance the positive working culture our chapter has created and is a key vehicle for elevating our trade-contractor standing within the environments we work and the communities we serve.

C E L E B R AT I O N •

MCOY AWARDS September 30, 2021

FREDERIK MEIJER GARDENS & SCULPTURE PARK THURSDAY, SEPTEMBER 30, 2021 5:30PM – 9PM

Michigan Contractor of the Year (MCOY) was founded by ASAM on a vision to positively impact the construction industry. The annual gala celebrates general contractors and construction managers with a track record of best practices, professionalism and collaboration within the trade-contracting community. Past MCOY winners and nominees have been intentional in their success— raising the bar for our entire industry. Moreover, these companies have embraced a team-centric approach, leading to a morepositive atmosphere, higher morale, increased productivity and stronger working relationships. On behalf of the members of ASAM, we want to thank all of our past MCOY nominees:

ROCKFORD PROPERTY MANAGEMENT: SERVING WITH SOUL

t Rockford Property Management, we understand the importance of meeting and exceeding expectations – every single time. With an approach powered by hospitality-driven culture and a team that constantly seeks to deliver high-quality customer service, our goal is simple: provide exceptional service at every level through all aspects of our relationships with clients, tenants and residents to ensure assets are utilized to their fullest potential. Our focus on hospitality means that every aspect of our work – from initial contact to lease signing, move-in and ongoing relationships – is centered on delivering premium experiences. To consistently accomplish this goal, we leverage a team with diverse skill sets. We are innovative, we are forward-thinking and we understand that no two properties require the same management approach to achieve success. This is exactly why we work closely with every one of our partners to develop customized, tailor-made plans that are specific to a property’s location, tenant mix and neighborhood. And, because we also operate as constructors and real estate developers, we know the entire life cycle of a building, allowing us to deliver an unparalleled experience for our clients as we maximize sales, implement sustainable measures and deliver places with soul. With this approach, we manage holistically, providing a diverse array of services, including everything from general property management to maintenance services, procurement, building

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Grand Rapids Research Center, we will provide property management services for the new Doug Meijer Medical Innovation Building when it opens in 2021. The building will host a slew of groundbreaking medical tenants, including Michigan State University, Spectrum Health, BAMF Health and more. We’re also proud to be the property management provider for Perrigo’s new North American corporate headquarters, which will also be located within the Innovation Park.

At the Heart of it All: People

automation, asset management and beyond. Our work spans multiple industries and more than 3 million sq. ft. of managed space, including residential, commercial, retail and medical. Additionally, our combined portfolio represents $365 million in assets managed. Thanks to our wide-ranging capabilities, we stand ready to deliver high-quality services for any owner at any property, just as we’ve proven throughout the past year with some of our most recent work.

several transformations since it was initially constructed late in the 19th century. But through the years, the 16-story building has maintained a unique energy and enthusiasm, something we are honored to support by providing our management services to more than 100,000 sq. ft. of combined commercial, retail and residential space as we support our Tribal partners Gun Lake Investments and Waséyabek Development Company.

McKay Tower

Grand Rapids Innovation Park

In 2020, we proudly assumed property management services at the historic McKay Tower in downtown Grand Rapids. Situated in the heart of the city, McKay Tower has undergone

Just as property management continues to evolve, so too does the healthcare ecosystem. At the Grand Rapids Innovation Park, which currently features the Michigan State University

As we continue to seek new opportunities to render property management services driven by hospitality-driven culture for the Grand Rapids market and beyond, we remain focused on the heart of what makes our work so meaningful: people. From our team members in accounting, leasing, maintenance, marketing and property management to the small business owners, healthcare workers and residents we serve, we recognize that curating and nurturing community is the most important part of our efforts. Serving with soul is what we do best – and we look forward to seeing where it takes us next.

rockfordconstruction.com MiBiz / DECEMBER 7, 2020

HEALTH BIZ

Wishing you a joyous holiday season and a new year filled with gifts of peace, health and happiness! Happy Holidays from our family to yours!

Michigan Chief Medical Executive Dr. Joneigh Khaldun discusses COVID-19 vaccine distribution during a Dec. 1 press conference. COURTESY PHOTO

VACCINE DISTRIBUTION Continued from page 1

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“Once we get the vaccine shipments, we’re ready to go,” Hahn said. As of Dec. 1, 48 hospitals and 12 local health departments across Michigan had ultra-cold freezers with capabilities to receive the Pfizer vaccine, Michigan Chief Medical Officer Dr. Joneigh Khaldun said during a recent press conference. More than 100 hospitals and local health departments across the state have the ability to store and distribute a vaccine Moderna Inc. developed, Khaldun said. After initial limited availability, vaccines become more widely available, “hopefully by January,” Khaldun said. “Depending on supply of the vaccine, we’ll continue to expand to other types of critical health care workers,” other groups such as educators, and “eventually to the general public,” Khaldun added. “We hope to be able to have the vaccine available to the general public by late spring.”

Beginning of the end?

WEST MICHIGAN’S TOP DEALS & DEALMAKERS MiBiz presents the 8th Annual M&A Deals & Dealmakers Awards to spotlight best practices and excellence related to mergers, acquisitions, capital formation and other types of deal making throughout Western Michigan. We are seeking nominations for deals completed between July 1, 2019 and Dec. 31, 2020 in the following categories: n Deal of the Year: Manufacturing n Deal of the Year: Professional Services n Deal of the Year: Finance/Banking n Deal of the Year: Retail Sector n Deal of the Year: Real Estate/Development n Deal of the Year: Economic Development n Deal of the Year: Health Care n Deal of the Year: Life Sciences

n Deal of the Year: Technology n Deal of the Year: Nonprofit n Dealmaker of the Year/Executive n Dealmaker of the Year/Adviser n Dealmaker of the Year/Investor

Winners will be featured in a special editorial section in the February 15, 2021 print issue of MiBiz. Plus, we’ll highlight each of the winning companies and executives online and share their stories with industry professionals, executives, advisers, investors and other potential allies. It’s an exceptional opportunity to source new deals, attract employees, access capital and create strategic growth opportunities. The deadline for nominations is January 8, 2021 at 11:45 p.m.

NOMINATIONS OPEN: MIBIZ.COM/DEALS For sales information, contact sales@mibiz.com.

DECEMBER 7, 2020 / MiBiz

The U.S. Food and Drug Administration this week is scheduled to review the emergency use application for Pfizer’s vaccine. The FDA’s Vaccines and Related Biological Products Advisory Committee will review an emergency application from Moderna on Dec. 17. If the FDA grants emergency approval, distribution of the vaccines could begin days afterward, bringing what health care providers hope is the beginning of the end to the pandemic that broke out in the U.S. in March, has killed more than 270,000 people nationwide, hammered the economy, and in the recent surge pushed some hospitals to capacity and stretched staff thin. “As the COVID-19 pandemic continues to affect people worldwide, having a safe and effective vaccine is critical to stopping the spread of coronavirus and keeping people healthy,” Ascension Michigan said in a statement. Ascension Michigan owns Ascension Borgess Hospital in Kalamazoo and community hospitals in Allegan, Dowagiac and Plainwell. Grand Rapids-based Spectrum Health said in a statement to MiBiz that it “eagerly awaits a decision from the FDA on emergency use authorization for the first COVID-19 vaccine.” “We’ve had a team working for months to ensure we have the capabilities to receive, store, distribute and administer vaccines when they become available. We have several freezers in place throughout our health system to accommodate the storage needs associated with the vaccine,” Spectrum Health said, adding that it’s working with state and local health departments “to ensure a coordinated approach.”

Uphill climb Part of hospitals’ preparation is ensuring that the COVID-19 vaccines are safe and effective and encouraging people to get vaccinated.

A recent poll of older adults by the University of Michigan “suggests an uphill climb lies ahead to reach that goal.” Just 58 percent of adults between 50 to 80 years old in the university’s National Poll on Healthy Aging said they were somewhat or very likely to get vaccinated. Women and people of color in that age group were less likely to get vaccinated, the survey found. Metro Health “will do everything we can to support getting the community vaccinated,” Hahn said. “We’re going to implore people to do it. This has been a historic challenge. Science has provided an answer, so we just need to make sure that folks trust it and really take it to heart.” The pharmaceutical companies have developed their vaccines at unprecedented speed and in a matter of just months. Hospitals across the state are collaborating on messaging that the vaccines are safe and effective, said Ruthanne Sudderth, senior vice president of public affairs and communications at the Michigan Health and Hospital Association. The reduced time of an otherwise lengthy development process comes from removing “red tape that normally exists when a vaccine is developed,” as well as securing funding and administrative requirements, Sudderth said. “The speed at which these vaccines have been developed should not be looked at as a negative when people are considering whether it’s safe and effective,” she said. “We want people to know that the vaccine process underwent very strict scrutiny and has been tested as well as it could have been, and that we’re feeling confident that this is going to help us get back to normal. “We’re cautiously optimistic this could be the start of a really serious improvement in Michigan if people take the vaccine and we can start to make some headway.” Despite the promise of the vaccines to bring an end to the global pandemic, health care leaders urge people to remain vigilant and comply with public health measures: wearing face masks, social distancing and washing their hands. “It’s not a silver bullet and we’re still going to need people to take the preventative measures we know have worked for months. Because not everybody’s going to get the vaccine at the same time, there’s going to be a tail on this before we have strong immunity throughout the state and throughout the country,” Sudderth said. “There is some light, but the tunnel is still pretty long.” Vaccine distribution also comes with significant logistical challenges, starting with the need for ultra-cold storage of the Pfizer vaccine. The Moderna vaccine needs storage at minus-10 to minus-20 degrees Celsius, “which is what most medical-grade freezers can generate,” said Pete Haverkamp, director of pharmacy services at Metro Health. “The Pfizer one’s definitely the most challenging because of the very limited stability,” Haverkamp said. “We’ll be happy when we have some other vaccines like the Moderna one that will give us some more flexibility.” Visit www.mibiz.com

FOOD BIZ

Demand surges for Michigan’s Christmas tree industry By JAYSON BUSSA | MiBiz jbussa@mibiz.com

f patronage of local Christmas tree lots and farms is any indication, then Michigan residents are really in the holiday spirit this year. Business has been booming for this segment of the agricultural industry in Michigan, which ranks third among Christmas tree producing states in the country behind Oregon and North Carolina. Local u-cut farms, tree lots and wholesale farms, which sell a combined 2 million fresh trees annually, are quickly moving through their 2020 supply, which many industry insiders attribute to the COVID-19 pandemic keeping many families cooped up in their homes for the better part of the year. Tree shopping, meanwhile, provides an opportunity for safe outdoor fun.

own the farm that opens only on weekends between Thanksgiving and Christmas. “We are locked in in terms of what we can buy for the year based on the previous year’s order. So even if your business wants to grow, it’s really super hard to find more trees.” Postema said that the overwhelming surge in sales is certainly good for the farm as a business, but it can negatively affect some of the farm’s longtime clients that might strike out on finding a tree later into the season. “We’ve had a solid group of customers that have returned with us for the past 10 years and it’s hard to tell them (inventory is already low),” Postema said. “We have a whole other group of customers we still expect to see this coming weekend and we barely have trees to sell them.”

A pandemic release

Like most industry members, Postema attributed some of the increased interest in Christmas trees to the cabin fever Banner year brought on by COVID-19. Over the Brandon Postema, who works at famspring and summer, the pandemic had ily-owned Postema Christmas Tree a similar effect on patronage at pumpFarm in Alto, had droves of tree buykin patches, orchards and u-pick farms. ers visit during the farm’s first weekWhile COVID-19 may have played end of the season, which a role in driving more came right after the people to the farm, Thanksgiving holiday. Postema said his famThe 35-acre farm has ily also took safety preSponsored by: trees planted on 15-20 cautions to meet health DAN VOS acres of its property. In guidelines and protect CONSTRUCTION addition to the Christmas both staff and customers. COMPANY trees that the farm grows, “Operationally, we’re it also orders around 400 about the same because additional trees from Needlefast we’re all outside,” Postema said. Evergreens Inc., a Ludington-based “Really, all we did to be different this farm. year is … we closed down the cabin After the first weekend of sales, and are giving hot chocolate and Postema said the farm had just 35 candy canes at the end to reduce trees remaining and was all but sure touch points.” to sell out long before the season ends. “Busy” is also how Derrick In the initial weekend of sales in 2020, Vormittag of Grand Rapids-based Postema Christmas Tree Farm had Vormittag Tree Farm described the more business than it did all of last early portion of his company’s season. year, he said. Vormittag, who is a math teacher Complicating matters, the farm by day, works on the 63-acre farm lacks options for procuring additional owned by his father. Currently, the trees. farm has trees growing on 20-25 acres. “There aren’t any more trees availVormittag Tree Farm was a hobby able,” said Postema, whose parents farm until 12 years ago when his father

FOOD BIZ

Postema Christmas Tree Farm in Alto. COURTESY PHOTO quit his job as a tool and die technician during the recession and made the farm his full-time venture. Because the farm continues to grow each year, Vormittag expected that it would be busier this year compared to last, but he now anticipates that the farm will sell out of trees — or come close — because of the surge in demand. “A lot of tree lots are not open this year. … Some didn’t want to invest in buying the trees and not be able to sell them,” said Vormittag, whose farm only sells trees directly to customers. “The people that would go to those lots are going to the farms. Thanksgiving travel is also down 50 percent, which means 50 percent of the people that would have been traveling are home or in the vicinity of home and they are looking for things to do.” Whether this season is an outlier or the industry will be able to sustain the momentum, farms say they have difficulty reacting. Christmas trees take eight to 10 years to grow to a proper size, requiring impeccable foresight from producers to meet demand. “I’m a math teacher so I have numbers in my background,” Vormittag said. “You’re always looking at current trends, emerging markets and what trees people are interested in. In the big scheme of things, your location can only grow certain trees to the best of their ability. “You have to know your property and you have to dabble in what the

markets are looking for and see what you can do.”

Sustaining momentum According to the National Christmas Tree Association, U.S. tree farms are growing close to 350 million Christmas trees on about 350,000 acres. Typically, those farms sell an average of 25 million-30 million Christmas trees every year. Michigan’s 2 million trees contribute $30 million to $40 million to the national market each year. Nationally, a majority of trees are purchased from u-cut farms (32 percent), large chain stores (24 percent) and independent retail lots (17 percent). According to Amy Start, executive director of the Michigan Christmas Tree Association, the state is a favorable area for growing trees because of its climate, topography and soil. Start said industry members also are hoping to find ways to sustain the momentum brought on by this banner season. “If a consumer is new to having a real tree and they (bought a real tree) this year because they could get out with the kids, they might find it was such a great experience that they want to do it again,” she said. “That’s what we’re hoping, for the new people that have never had this experience to be like, ‘Wow, this is really cool.’”

Since 2008, the nation has experienced a mild shortage in Christmas trees, but supply hasn’t always been low, Start added. “It’s a cyclical business and in the past we’ve had an overabundance of trees, so it’s great (tree farms) are having this time where they’re able to sell out, and sell out early so they can enjoy a little Christmas, too,” Start said. While business might be booming for now, growers say they also face their share of risks. “There are a lot of factors — a farmer can lose half their crop like they did a few years ago to a drought,” Vormittag said. “At that point, you can be four, five years into something and watch it die. It can be lucrative and it can be devastating. There is a risk and there is a reward.”

“There aren’t any more trees available. We are locked in in terms of what we can buy for the year based on the previous year’s order. So even if your business wants to grow, it’s really super hard to find more trees.” — BRANDON POSTEMA Postema Christmas Tree Farm

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

DECEMBER 7, 2020 / MiBiz

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NONPROFIT ORGANIZATIONS

Red Horse Center for Collaborative Leadership Executive Director Fred Bueltmann. COURTESY PHOTO

HORSES AND HUMANS

Fennville-based Red Horse Center for Collaborative Leadership offers equine-assisted experiential learning to boost organizations’ team building, morale By MARLA MILLER | MiBiz mmiller@mibiz.com

Red Horse Ranch has hosted Discovering Your Herd workshops around organizational leadership and ighly intuitive horses team building since 2008. After leaving are experts at nonverbal his full-time career in the beer busicommunication and can ness, Bueltmann shifted his focus as sense chaos, conflict and an independent consultant, podcaster other human emotions. and “herd manager.” He brings unique They often mirror behaviors and, as insights on collaboration, company herd animals, reveal the benefits of culture and the craft marketplace after working in collaboration. more than 20 years in the craft beer Red Horse Center for Collaborative industry. Leadership aims to get people away “Witnessing the power this work from Zoom meetings and computer has and its ability to help groups see screens to experience the transfortheir own story with new insights was mative power of a human-horse conreally inspiring to me,” he said. “Red nection and facilitate positive change Horse is a culmination of all of these within organizations. things, us expanding what we offer “There are a lot of groups out there — here at the farm, and us committing nonprofit groups fightourselves to making ing for social change this experience avail— that would really able to more people.” benefit from restorative Despite the panSponsored by: and collaborative workdemic, the organizaGRAND RAPIDS shops,” said Red Horse tion constructed a COMMUNITY Executive Director Fred covered arena and an FOUNDATION Bueltmann. “We want indoor retreat center to help people who are called The Tree House helping people.” to host workshops, classes and other A former brewery executive, programs. The project was finished Bueltmann has found a new callthis fall, and Red Horse plans to weling among the horses on his 22-acre come guests and participants once it Red Horse Ranch in Fennville. He is safe to gather indoors. launched the Red Horse Center to Meanwhile, Bueltmann is giving share the wisdom of human-horse virtual presentations and starting to interaction through mindful experibook workshops into spring and sumential learning. mer 2021. Bueltmann wants to serve Bueltmann co-founded Red Horse organizations near and far, noting with his wife, Ulla Frederiksen, who organizations from other states plan is also a psychologist and offers prito visit the farm. vate practice therapy through The “We have enough space to gather Sundance Center on the farm. They outside, regardless of the COVID situaare certified facilitators of the Eagala tion,” he said. “We can facilitate group Model. Eagala (Equine Assisted workshops up to 25 people as long as Growth and Learning Association) is there are reasonable temperatures.” a distinctive experiential framework Bueltmann gathered a team and a designed to hold space for clients to board of directors and has applied for discover, learn and grow from a horse 501(c)(3) nonprofit status. He hopes and human experience. to receive the status by spring 2021,

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which will allow Red Horse to accept charitable contributions, apply for grants and offer scholarships to nonprofits. “We want to collect support that creates scholarships for nonprofit organizations to participate in the workshops and write grants for the same,” he said.

Team development Red Horse has a lofty mission: “Strengthening collaborations for the greater good by working with humans and horses, through mindful experiential learning and considerate leadership models, to discover and empower positive change in the world.” Red Horse serves all sizes of businesses but was established with community-based nonprofits and social change organizations in mind. The workshops also benefit businesses that want to work on team development and improve company culture. Day-long and multi-day workshops can be tailored to organizational, department-level or leadership teams. Clients help set the objectives for the day, including work around mission and vision, company culture, morale, diversity and inclusion, new projects and new employees. Red Horse also offers one-on-one mentoring and workshops focused on professional development, leadership skills and horse and human collaborations. Private rentals are available for artists and educators who seek a tranquil setting to work on a project or space to host classes and workshops, as well as families and groups looking to host gatherings and celebrations. As for the Eagala work itself, Bueltmann experienced a workshop as a client years ago. Now he spends his days on the farm running the center and Treehouse Productions.

He regularly shares interviews and insights on cultural shifts through his This Craft Nation project and podcast, and Michigan’s Great Beer State Podcast, which he produces. “I have been a witness to getting people out of the office and looking at things metaphorically,” he said. “It started by discovering the Eagala Model and what it did for the therapy world. I was beginning my career as a brewery executive in Michigan, and I was learning the challenges and opportunities in terms of managing groups of people. We just saw the opportunity and how powerful the work was.”

… They (the horses), by nature, have a way of bringing forward what’s going on underneath the surface and then supporting and helping the group decide what to do about that discovery.” Frederiksen was Eagala advanced certified in 2010, when she began serving internationally as an Eagala trainer. Her private practice, The Sundance Center, specializes in equine-assisted individual and group therapy and trauma-informed therapy for Highly Sensitive People. “Horses, by just being near them, actually exude a peaceful existence,” Frederiksen said. “They teach us about inner peace and being grounded and going with the flow and being in the moment, all of those elusive human goals. More than that, they become metaphors for who or what we are dealing with in our lives.” Frederiksen has witnessed the growth and learning that takes place, resulting in insights that create positive, actionable change. Interacting with the horses in a peaceful and nonthreatening outdoor environment provides participants with a safe place to explore and find their own solutions to questions and problems. “When you’re interacting with a horse, with a 1,000-pound animal, you immediately become your authentic self,” she said. “We are involving our bodies, our minds, our hearts, and not just our intellect. When we experience it, we understand it, so the experiential part of this work means that people come away having felt something, having experienced something rather than just having been taught something by an expert.”

Preventing burnout

Despite the challenges presented by the coronavirus pandemic, Bueltmann continues to spread the word about Red Horse’s work and the benefits of horse and human collaborations. Taking time for individual and organizational self-care and self-assessment is critical to prevent burnout. It can help strengthen a nonprofit’s ability to invite supporters into their cause and shift teams into a mode of discovery. Eagala training “We’re challenged, but we’re also Bueltmann earned Eagala certificainspired by it,” Bueltmann said. “It is tion in 2001 and specializes in equinea very important time for groups and assisted organizational development. organizations to work on how they He said no horse experience is neceswork together and how that can help sary for the workshops. Participants them pursue their mission.” don’t ride the horses, The work is even but they do get up more relevant in close and personal light of social juswith them. The tice issues, changes horses act as “cliin the way people ents” or “customers” work, and the stress and react to what is and isolation of the going on. ongoing pandemic. Horses have a “ We know so finely tuned commany organizations munication strucare working to get ture, are sensitive us through this, and and expressive, and they are dealing with understand group severe burnout,” dynamics intuitively. Frederiksen said. “The horses are “We’re really hoploose. They have ing to position ourchoices and they selves in a place we can decide where — FRED BUELTMANN can offer respite and to move and how to retreat and profound Executive Director of Red move,” he said. “The insight into how Horse Center for Collaborative people have choices change makers can Leadership on where to move keep moving forward and how to move. with clarity.”

“It is a very important time for groups and organizations to work on how they work together and how that can help them pursue their mission.”

MiBiz / DECEMBER 7, 2020

Q&A Kelsey Perdue Kids Count Project Director, Michigan League for Public Policy Appointee to Michigan Black Leadership Advisory Council Grand Rapids resident Kelsey Perdue was one of 16 people appointed by Gov. Gretchen Whitmer last month to the state’s newly created Black Leadership Advisory Council. The group will advise the administration on policy recommendations and also “identify state laws, or gaps in state law, that create or perpetuate inequities.” Perdue brings to the council experience in grassroots organizing for equitable policies in West Michigan. In addition to her position as director of storytelling and communications at the Grand Rapids-based Urban Core Collective, Perdue also serves as project director of Kids Count in Michigan at the Michigan League for Public Policy. She spoke with MiBiz about how her experience will fit with more than a dozen appointees from across the state, and the challenges and opportunities ahead.

What are some policy recommendations you expect to discuss with the Black Leadership Advisory Council? From a policy perspective, I bring a varied approach to grassroots activity, being focused on voices that are closest to the pain, power and solutions, as well as more formal advocacy work with the (Michigan League for Public Policy) on state budget related policies. From an agenda perspective, I’m really focused on seeing policies that are equity focused. I do not believe policies or state budgets are color blind. It’s not a fiscal document, but a moral document. Whatever we discuss, advise or recommend — if there’s an investment to be made and justified, that will come along with it. You come to this role from a public policy and health angle, but what perspectives do you expect from the business or economic community? One thing I love about this committee is bringing folks together from different sectors. I think that’s so critical. When we talk about equity and social justice, voices from the business and economic development community might be missing, but we really need everyone at the table. I’m a true believer that when you talk about any agenda, you need to consider both social and economic issues — they all work hand in hand. Having those perspectives and appointees is just as critical as a public policy appointee. How do these issues around representation differ in West Michigan compared to other parts of the state? In terms of the Black community on this side of the state, we don’t have the same sort of numbers or percentage of the population we do in Southeast Michigan, particularly Detroit. When it comes to issues on this side, our communities might be less out, but it’s a really great representation of the challenges we have throughout our state and the nation. Just because a racial or ethnic group is not ‘in the majority,’ doesn’t mean they should have less access to opportunities to power and influence. On this side of the state, with Black folks not in the majority, the challenge is: How do we still get things done that benefit the community? Are we making sure we keep all members of the community in mind? That includes Black communities and many others. When announcing the advisory council, the state noted potential recommendations that might address state laws that create or perpetuate inequities. What are some that come to mind? We as a state should consider strengthening our safety net. When we consider any budget priority and know policies alone are not color blind, do they have disproportionate impacts that are often unintended? Another thing is thinking about how we fund our school systems. Right now, there are so many disparities in funding for our schools. It hits low income and communities of color the hardest. When we talk about equity, particularly racial equity for Black folks in this country, we did not get to this place overnight. Throughout history, it has been through intentional policies and decisions, many very recent. We’re not going to get out of it overnight. I can’t tell you one or two policies that will automatically make life better for Black folks. It is a cross-sector, multi-issue challenge. I plan to be a champion and the Black Leadership Advisory Council will be a champion. And we need buy-in from communities, businesses and every sector in order to make any real change. What are some misconceptions that the council will need to address? Often when we talk about racial equity, we tend to conflate race and class. The safety net, for example: That’s a class issue that has racial implications. Education funding is also a class issue that has racial implications. Also, Black folks who are not living in poverty also suffer with the current state of our policies and outcomes. I want to correct that to not conflate race and class. I don’t have all the answers — that’s why there’s such a diverse group of stakeholders called to really be champions around some we think we can successfully make an impact on, as well as achieve buy-in to move the needle. The research around the Kids Count program has shown Michigan ranks basically in the middle of U.S. states for childhood well being. What is happening here that places Michigan in the middle of the road? As a state, we need to make some bolder movement on the policy side with access to resources for families, strengthening our safety net and revising how we fund schools. That will really help us move ahead. We’re doing well in some areas — health is one. We have some of the highest rates of children with health insurance. While poverty has gone down or improved, the number of families struggling to make ends meet has actually gone up. That has huge implications for business. We talk a lot about child care right now and as we recover from the pandemic, access to childcare and affordable childcare is getting the attention it deserves. Access to childcare is a women’s rights issue, it’s a business issue, it’s a talent pipeline issue. Tackling that will allow more families to work, allow stronger and sustained talent for businesses and, I think, can really help move Michigan forward.

Interview conducted and condensed by Andy Balaskovitz. COURTESY PHOTO

DECEMBER 7, 2020 / MiBiz

IN THE NEWS M&A

n Fruitport-based medical device supplier Motion Dynamics LLC, a portfolio company since 2016 of Los Angeles-based private equity firm Vance Street Capital, has completed its first add-on acquisition with a deal for ViaMed Holdings LLC. The Easton, Mass.based ViaMed manufactures miniature precision components and subassemblies for medical device manufacturers in the neurovascular, peripheral vascular and orthopedic markets. The deal complements Motion Dynamics’ capabilities and allows the company to “simplify the supply chain” for device manufacturers, President Chris Witham said in a statement. Terms of the transaction were not disclosed. Motion Dynamics was advised by Chicago-based Vedder Price LLP, while Attleboro, Mass.-based Coogan Smith LLP served as legal adviser to ViaMed. n Caledonia-based Aspen Surgical Products Inc. completed its third acquisition in less than a year after buying Coralville, Iowa-based Protek Medical Products Inc. The acquisition “strengthens Aspen’s broad portfolio of medical and patient and staff safety products sold into hospital and surgery center markets,” according to the company. Protek Medical Products produces single-use ultrasonic probe covers and needle guides used in tissue biopsies, fluid aspiration and vascular procedures, as well as protective covers for medical instruments and equipment. Terms of the deal were undisclosed. Aspen Surgical, a maker of disposable surgical products, previously acquired Arden, N.C.-based Precept Medical Products and Redmond, Wash.-based Beatty Marketing & Sales LLC. n New York City-based private equity firm ASGARD Partners & Co. has acquired a controlling interest in Angstrom Technology, a Grand Rapids-based company that designs, builds and maintains modular cleanrooms for clients in North America. Angstrom Technology’s management team will continue to lead the company. Terms of the deal were undisclosed. Grand Rapids-based M&A firm Charter Capital Partners represented Angstrom Technology in the transaction. Dickinson Wright PLLC served as legal adviser to Angstrom, while Richmond, Va.-based McGuireWoods LLP advised ASGARD Partners. n Albion-based Caster Concepts Inc., which designs and manufactures industrial casters and wheels for a variety of industries, expanded into the aerospace and defense sectors with a deal for Los Angeles-based Aerol Co. Inc. The acquisition included Aerol’s line of aluminum casters specifically designed for the aerospace tooling industry, which bolsters Caster Concepts’ product line of heavy-duty industrial casters, wheels and polyurethane tread. Caster Concepts plans to close Aerol’s southern California operations and move it to its home facility in Albion. The company also plans to outsource the production of aluminum castings to a foundry in West Michigan. Terms of the deal were not disclosed. n Greenville-based FabX Industries Inc., a provider of machining and fabrication services, acquired Fort Wayne-based Guide Engineering LLC in a deal that closed Oct. 31. Guide Engineering specializes in designing and manufacturing automation, assembly and test systems primarily for the automotive industry. The acquisition adds capabilities to FabX, which is focused on highquality, cost-effective and value-added machining and fabrication services. FabX President Gopi Ganta will now take on the CEO role at Guide Engineering, where former co-owner Scott Taylor will serve as president. The deal allowed two of Taylor’s partners to transition to retirement. Grand Rapids-based mergers and acquisitions firm NuVescor Group advised Guide Engineering on the deal. Terms of the deal were not disclosed. FabX Industries previously acquired Kalamazoo-based Elite Tooling LLC in late summer. n Chicago-based Factorial Holdings acquired 26 existing Burger King restaurants in the Grand Rapids area, where it plans to construct 10 new locations of the fast food chain over the next five years. Factorial Holdings specializes in buying restaurant companies where founders are interested in transitioning. The firm invests in family-owned companies with $500,000 to $5 million in annual earnings.

VENTURE CAPITAL

n The innovation and investment arm of Grand Rapids-based food distributor Gordon Food Service participated in a $4 million funding round for MarginEdge Co., a Fairfax, Va.-based restaurant management software firm. Relish Works Inc., the GFS division based in the Merchandise Mart in Chicago that makes minority seed and early-stage investments in companies involved in food industry innovations, joined the round as a new investor in MarginEdge, which to date has raised more than $15 million. Philadelphia-based venture capital firm Osage Venture Partners led the round, which included all repeat investors except for Relish Works, according to a statement. GFS CEO Rich Wolowski said the investment not only signifies the company’s “excitement for the MarginEdge product, but the impact we think it can have on our customers and the industry at large.”

EXPANSION

n Grand Rapids-based Total Fire Protection Inc., a family-owned business that has specialized primarily in fire sprinkler and extinguisher services, has launched a new Total Fire & Security division to provide a more complete line of life safety services. The company is now able to provide new services that include installation, inspections and service for fire alarms and security alarms in addition to central station alarm monitoring, building access control, security cameras and nurse call systems. The move came as customers signaled to the company that they were looking for one-stop-shop solutions, Total Fire Protection President Ryan Goossens told MiBiz.

BANKING

n Grand Rapids-based Lake Michigan Credit Union opened a full-service branch on East Main Avenue in Zeeland. LMCU, the largest credit union in Michigan, has 55 offices, including 11 in southwest Florida. The credit union had nearly 400,000 members and $8.73 billion in assets as of Sept. 30, according to a quarterly financial report to federal regulators.

HEALTH INSURANCE

n Priority Health plans to give large employers a rebate on their employee health coverage, a result of lower medical claims during the COVID-19 pandemic. The rebate will appear on February invoices for employers with 51 or more employees and range from 5 to 35 percent of one month’s premium for more than 1,000 fully funded large group employers that collectively employ about 260,000 people. Priority Health will base rebates on the medical claims trend for each employer over a 12-month period through Sept. 30.

HEALTH CARE

n Bronson Methodist Hospital and Ascension Borgess, both located in Kalamazoo, were named among the top 50 heart hospitals in the U.S. by Fortune and IBM Watson Health. Ascension Borgess was listed among the top 20 cardiovascular teaching hospitals in Fortune and IBM Watson Health’s 50 Top Cardiovascular Hospitals for 2021. Bronson Methodist was among the top 20 teaching hospitals. Other Michigan hospitals named among the top 50 heart hospitals are St. Joseph Mercy Ann Arbor Hospital, McLaren Macomb Hospital in Mt. Clemens, and McLaren Northern Michigan Hospital in Petoskey.

PUBLIC RELATIONS

n Long-time media and public relations professional Tim Dye has launched a strategic communications firm, Dye Communications LLC. The firm provides internal and external communications services that include media Dye relations and coaching, issue management, crisis communications, digital media strategies, community relations and business publication support. Dye previously led the Grand Rapids office of Truscott Rossman LLC. Visit www.mibiz.com

Six Personal Considerations Before Selling a Business PRESENTED BY: MIKE CHAFFIN, SVP, Commercial Banking

usiness decisions are often intertwined with the impact they’ll have on the family, and business owners must understand the dynamics and value drivers of both—as well as how they overlap. It’s a strategic benefit to have a team of professionals who understand the valuation aspect of selling a business, in addition to having wealth expertise, during all stages of your business sale. This is especially true if you can find a team that can tailor its recommendations based on your goals and needs. There are several personal and professional questions you may consider prior to selling your business, including:

1. What do you need from the sale? Many business owners intend to fund retirement from the sale of their business, and they’re accustomed to cash flow from their day-to-day business activities. It may, therefore, be important to think about what aftertax proceeds are necessary to support your future needs. A key variable for this analysis is understanding what your business is worth. An M&A advisor who understands the market and your industry may be best suited to help understand your valuation along with helping to evaluate strategic alternatives for the business. A thirdparty valuation specialist (many accounting firms have these groups) may also provide a market valuation, and these types of reports are often used for wealth planning purposes ahead of a formal sale process.

2. How does the sale fit into your estate plan? Tax and estate planning can be important topics to think through, and wealth transfer strategies may provide opportunities to save on both income and estate taxes. Transferring ownership interest to family members, trusts or other entities before the sale may help you take advantage of allowable valuation discounts and can reduce transfer taxes later. Transfers such as these are commonly weighed against future needs

and often considered nine to twelve months before any sale of the business, if not two to three years prior. “In my experience, the most successful transitions occur when the planning starts, long before the owner has any serious intention of leaving the business,” says Troy Farmer, Regional Director, Wealth Planning at Fifth Third Bank. “Early strategic planning that coordinates both income tax planning as well as estate transfer tax planning can increase the eventual value of a business while minimizing tax impacts. It can help ensure that the owner can sell to their preferred buyers. And it can help them achieve their financial goals after the sale.”

3. What are your charitable intentions? If you have charitable intent, strategic charitable giving can provide additional opportunities for tax savings. For instance, a charitable tax deduction in the same year that you sell your business may help offset the gains you incur. Depending on the type of business entity and the individual’s tax and cash flow circumstances, business owners might consider donating shares of the business to a charity, donating cash from the sales of the business, establishing a charitable trust that provides a lifetime income stream, or creating a donor advised fund or a private foundation that can be used to distribute charitable contributions in the future.

4. What does the sale mean for you and your family? As a business owner, you may have devoted your life to the business—growing it into a successful organization. Are you ready for what will be a major change? Have you determined what the sale will mean for children who may have been involved or planned to be involved in the business? Will an increase in wealth affect the family’s values and governance? How does the business owner educate their descendants on handling wealth? You may consider how your dynamic may change and grow from the event.

5. Is your business handling any of your personal affairs?

Owners may have business expenses that were handled through the business, but that serve both business and personal purposes. Consider, for instance, a vehicle purchase. Once you sell the business, those expenses will fall to you again and the personal assistance will end—and these factors should be a part of the financial modeling for the sale. “Evaluating desired cash flow post-sale will provide an estimate of the assets the business owner will need to achieve his or her goals and the amount of proceeds needed from the sale,” says Farmer. “That cash flow should account for personal expenses previously paid by the business as well as future expenses such as travel, a vacation home, to account for the owner’s desired lifestyle in retirement.” Some business write-offs will become personal expenses. If your wealth is significant, you may want to consider a family office or other assistance with financial affairs.

6. Will you start another business? What will your life look like after the dust has settled from this business sale? Are you headed into retirement, or will you put the proceeds into your next venture? What will you do with your time? Some options include devoting your time to travel, or becoming an angel investor to help the future generation of entrepreneurs start their own enterprises. Creating an action plan can help you mentally make the transition from your current endeavor to the next stage. As you’re considering these essential points, it’s important to have the right professionals in the early stages. That may include investment bankers, lawyers and accountants. To assemble your core team, consider looking for financial institutions that can serve as a strategic fit and bring to the table a variety of professionals who can help you determine what’s best for you, your family and your business from both a business operation and a wealth planning standpoint. Now is a great time to evaluate your options for your business and your wealth planning needs. Fifth Third Bank can assist you with the future planning for your business and beyond by putting you in contact with team members qualified to support your specific needs.

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This content is for informational purposes only and may have been derived, with permission, from a third party. While we believe it to be accurate as of the date of publication, it does not constitute the rendering of legal, accounting, tax, or investment advice or other professional services by Fifth Third Bank, National Association or any of its subsidiaries or affiliates, and it is being provided without any warranty whatsoever. Please consult with appropriate professionals related to your individual circumstances. Deposit and credit products provided by Fifth Third Bank, National Association. Member FDIC. Fifth Third Private Bank is a division of Fifth Third Bank, National Association, which is an indirect subsidiary of Fifth Third Bancorp. Banking, investment and insurance products and services are offered through or made available by one or more of Fifth Third Bancorp’s indirect subsidiaries. Investments, investment services, and insurance: Are Not a Deposit | Are Not FDIC Insured | Offer No Bank Guarantee | May Lose Value | Are Not Insured by Any Federal Government Agency CS4818109 Insurance Products made available through Fifth Third Insurance Agency, Inc.

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