MiBiz February 1, 2021 print edition by MiBiz

Going Pro funding to address manufacturing workforce shortage

Cannabis advocates: Equity workgroup just a starting point

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FEBRUARY 1, 2021 • VOL. 33/NO. 8 • $3.00

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A NEW TONE

Grand Haven sees economic development momentum around 3 key projects By KATE CARLSON | MiBiz kcarlson@mibiz.com GRAND HAVEN — The West Michigan lakeshore town is experiencing a boom in economic development interest as three key properties around the city’s core are eyed for new projects. Grand Haven is going through a largescale master plan update for its Grand River waterfront, as well as determining the future of a decommissioned diesel plant on city-owned property. The city also just approved a planned 124-unit housing development on the former Stanco Metal property near downtown. Grand Haven Chamber of Commerce President Joy Gaasch looks at the most recent redevelopments as a critical way to draw visitors to and retain talent in the community — and something that will help with a post-pandemic economic recovery, she said. “This has been a year to do some good planning,” Gaasch said. “It’s been important that we’ve been able to engage people in the discussions, and certainly city staff has been phenomenal in keeping on top of these projects and making sure that people are informed and engaged.” The city is going through a master planning process to redevelop its waterfront along the Chinook Pier and beyond, with a goal of increasing the connectivity between downtown and the riverfront. The municipality gathered public feedback over the summer about redevelopment concepts for the waterfront, which include constructing an all-seasons farmers market area, green space, play structures and shops. Despite the pandemic, city staff gathered public comment on the waterfront master plan concepts by setting up outdoor town hall meetings and displays outside where people could leave comments, said City Manger Pat McGinnis. “Now we’re looking at how feasible this plan is, how likely it is and we’ll do some additional design work and see about engaging with private partners,” McGinnis said. See GRAND HAVEN on page 3

Biz groups back Biden’s early action on COVID-19 and immigration; policy concerns remain

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By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

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Whitmer, GOP legislature compete over COVID relief funding

ithin hours of his inauguration on Jan. 20, President Joe Biden signed executive orders seeking to bolster the country’s COVID-19 response and issued a memo to top federal officials to “preserve and fortify” a key immigration policy for certain undocumented immigrants. The actions were among more than a dozen executive moves in Biden’s first few days in office.

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Efforts underway to improve broadband access in Ottawa, Kent counties By MARK SANCHEZ | MiBiz msanchez@mibiz.com

ttawa County expects to have a better understanding later this year of exactly where gaps exist locally for broadband internet service so it can begin to address the issue. Once a consultant collects and analyzes data on broadband access and identifies what’s

needed and the potential costs, Ottawa County will then look at how best to fill persistent service gaps that have become even more glaring during the COVID-19 pandemic. The work begins with correcting what Paul Sachs, director of Ottawa County’s Planning and Performance Improvement Department, considers “woefully inaccurate” maps from state and federal agencies on broadband access.

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Cybersecurity SEE PAGE 6

Ottawa County can then use the consultant’s data and updated, accurate maps to encourage service providers to expand broadband, or perhaps to form public-private partnerships to extend service. “The intent is to give us a thorough understanding of where our gaps are,” said Sachs, noting that low population density in rural stretches of the county and high See BROADBAND ACCESS on page 10

AJACS FIRST TO PROVIDE NEXT GENERATION OF AMADA SERVO STAMPING PRESSES IN WEST MICHIGAN

s Industry 4.0 continues to drive investment decisions for manufacturers, one Grand Rapidsbased company hopes to bring the latest advancements in stamping technology to West Michigan and beyond. AJACS will be the first authorized representative in Michigan, Indiana, Illinois and Wisconsin to offer the next generation SDE/SDEW AMADA digital electric servo stamping presses from their Grand Rapids headquarters. The new SDE/SDEW series of AMADA stamping press includes enhanced features and controls including an integrated motion creation and editing software, nine types of slide motion control, settings for energy reduction and less oil usage and touch screen control. As opposed to older, flywheeldriven stamping presses, servo presses offer an unparalleled amount of control of the machine through software and programming. AJACS will feature one of the new AMADA SDE/SDEW stamping presses at its Grand Rapids location, as part of a mini-show room where customers are encouraged to test the machine and its features for themselves. “The AMADA brand is a highly valued partner, which is why we wanted to

get something that you could actually touch and feel,” said Mike Worst, Product Manager of Press Equipment at AJACS. “It’s hard to show people this type of technology with just brochures. It’s like trying to sell a Cadillac. People want to see it and touch it. We really hope that this helps educate the market and drive new opportunities for partnerships.” Worst noted that one of the main advantages of the new AMADA SDE/ SDEW line is its integrated SMAPS software, which allows for offline design and editing of slide motion paths for the machine. “The software allows customers to design the slide motion path from their desks,” Worst said “Let’s say you get a new part and you’re not exactly sure how you’re going to process it in the press. This software will help you maximize your output and help you select the right path and verify the path you’re creating.” AJACS offers two additional pieces of AMADA software for the SDE/SDEW press, including a pressure waveform analysis software (WANMS) which generates an analysis of waveforms, forces, motion and other data from the stamping press in real time. Additionally, AJACS also offers the APINES software which provides a virtual environment to monitor machine condition and

production status data in real time through an internet browser application. AJACS also provides the requisite coil equipment to complement the AMADA presses. “Our metal stamping customers are continuing to go more and more high tech,” Worst said. “Our machine allows them to incorporate this new technology and software and really differentiates a customer from their competitors.” AJACS, which first entered the metal forming industry in the 1960s, decided to partner with AMADA as part of a larger growth strategy aimed at diversifying the number of products it provides to its customers. While the company traditionally focused on tooling equipment for the past 50 years, AJACS executives believed the company could strengthen its relationship with its current customers by adding cutting-edge stamping equipment as well.

tooling, and some of the automation that surrounds their work as well.”

“Our customers can have one contact and one relationship that can support them in a multitude of areas within their business,” Worst said. “We can now support them with the equipment, the

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GRAND HAVEN Continued from page 1

Developing vacant properties

Mold to master planning The waterfront redevelopment process surfaced after mold was discovered in late 2019 in the structure that housed the shops along Chinook Pier. High water levels caused the mold, leading shops to be demolished and tenants moved into the Grand Trunk Depot on Harbor Drive. A couple of shops also moved into storefronts downtown. “It was something beyond our control,” McGinnis said. “We had to tear it down and start from scratch and decided to find out what the community wanted to see there.” The planning project was propelled by a $1.5 million grant from the Michigan Economic Development Corp. to fund the planning and design process for redeveloping the waterfront. “The redevelopment of that piece of the waterfront is a critical part of the draw to the waterfront in the Grand Haven area,” Gaasch said. “It’s always been a really vital part of attracting visitors and it’s really a vital part of the continued renewal of our community and of placemaking.” An attractive downtown with updated waterfront amenities will help market Grand Haven, Gaasch said. “Moving forward, as we look at things that can bring a vibrancy to the waterfront that will impact the economic vitality of the community, everyone’s focused in that direction,” Gaasch said. “It’s refreshing this plan can take that into consideration.” The master plan includes details about an allseasons structure that could house the farmers market, as well as opportunities for public-private partnerships to occur that will result in revenue generating businesses or facilities to help the city pay for the cost of maintaining the waterfront, Gaasch said. “We pride ourselves in being a year-round economy because we have a very strong manufacturing base,” Gaasch said. “Our goal is not to have a seasonal downtown, so it all really ties together as you’re developing a plan and supporting those local businesses.”

Redevelopment of a couple vacant properties is also in the works with the planned 124unit Peerless Flats apartment project, which was recently approved by the city. The project is planned at the former Stanco Metal Property at 105 Fulton St. The development received a Michigan Community Revitalization Program loan for $4.75 million along with $1.38 million in brownfield incentives. The city is also wrapping up a public input process to determine redevelopment plans for cityowned property at 518 Harbor Drive, less than a mile west from the Stanco property along the Grand River. The building on the site was previously used by the Grand Haven Board of Light and Power, and the bid solicitation process started in fall 2020. Proposals for redeveloping the decommissioned diesel plant site include a mixed-use event center, housing and a hotel. “The building itself is historical in its design with the brickwork, the windows, the cornice around the windows and the style itself is historical from over 80 years ago,” said Liza Dora, chair of the City of Grand Haven Historical Conservation District Commission. The building is also historically significant because it used to power the city at one point, Dora said. The commission supports diesel plant redevelopment plans that keep the structure intact, she said. Illinois-based CL Real EState Development LLC is proposing to buy the property for $400,000 and turn the site into a mixed-use space with a restaurant, event and meeting space, and offices. The proposed three-floor structure would be 5,500 square feet with a seating capacity of around 300 people. The project’s taxable value would be $3.35 million with eligible brownfield costs of $450,000. Melching Inc. and its associate company, Phoenix Reclamation LLC, proposed to purchase the property for up to $1 million. The team is proposing to preserve the original character of the diesel plant structure and create five townhouses in the southeast corner of the site. The project

Chinook Pier

Peerless Flats

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Board of Light and Power Diesel Plant

Downtown Grand Haven. ILLUSTRATION BY KAYLEE VAN TUINEN

would have a taxable value of $3.75 million with eligible brownfield costs of $786,500. Capstone Real Estate LLC is proposing to purchase the property for more than $1.5 million and demolish the diesel plant structure to build eight, double-unit residential townhome-style buildings. Each unit will have about 2,000 square feet of space with three bedrooms. The project would have a taxable value of $5.5 million and eligible brownfield costs of $650,000. Sylvan Lake-based hotel development and management company Elite Hospitality Group is proposing to purchase the site for up to $1 million and demolish the existing structure for the development of a mixed-use-90-room hotel and retail space with ground-floor retail. The Grand Haven City Council is expected to consider a recommendation from the Board of Light and Power for the future use of the site later this month. “We’re really glad the city is taking our input into consideration when they’re making changes,” Dora said. “It’s something new that’s come about in recent years, and we’re grateful for that.”

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

In deal for TCF, Huntington Bank to close 97 in-store branches at Meijer locations Huntington Bancshares Inc. intends to close 198 branch offices — about half of which are based in Meijer Inc. stores in Michigan — after completing the proposed $22 billion acquisition of Detroit-based TCF Financial Corp. The planned closings include the 97 in-store branches located in Meijer locations that will occur after the deal between the Columbus, Ohio-based Huntington Bancshares (Nasdaq: HBAN) and TCF Financial (Nasdaq: TCF) earns regulatory approval and closes this spring. According to executives, the locations are all near traditional Huntington branches. In a conference call to discuss quarterly results, Huntington Bancorp Chairman, President and CEO Stephen Stenour attributed the planned Meijer in-store closings to Visit www.mibiz.com

“just excess distribution in Michigan as a consequence of the combination” that “will allow us to cycle out of the in-store” branches. Huntington and the Walkerbased supercenter retailer Meijer first signed a deal in 2012 for the bank to open in-store branches in Michigan.

Founders announces sponsorship with NBA’s Philadelphia 76ers With a relatively strong foothold already in the Philadelphia market, Grand Rapids-based Founders Brewing Co. recently announced that it has become an official sponsor for NBA team the Philadelphia 76ers. Brewery officials say the partnership will build on the company’s already strong presence at the Wells Fargo Center in Philadelphia, which the 76ers and other teams call home. The partnership goes into effect beginning in the second half of the

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team’s 2021 season. In addition to its general designation as an official sponsor, Founders and the 76ers have collaborated to produce limited-edition, co-branded All Day IPA packaging and cans, which will be distributed exclusively in the Philadelphia market and is the primary component of the partnership. A promotion of this nature — one that does not rely on signage or recognition inside the arena — is vital, as the 76ers have kicked off the season restricting fan entry, on par with most teams throughout the league. Financial terms of the sponsorship were not disclosed.

CEO departs Mno-Bmadsen for tribal economic development position in Washington Troy Clay, the CEO since the founding of Dowagiac-based Mno-Bmadsen, the non-gaming economic development and investment arm of

the Pokagon Band of Potawatomi, resigned his post to take a role at a similar tribal organization in Washington. Clay’s last day at Mno-Bmadsen was Jan. 18, after which he joined Kingston, Wash.-based Noo-Kayet Development Corp. as its chief executive. Based across Puget Sound from Seattle in western Washington, NooKayet serves as the economic development arm of the Port Gamble S’Klallam Tribe. Clay was a founding board member of Mno-Bmadsen in 2012 and was selected to lead the organization shortly thereafter. Under his leadership, MnoBmadsen launched its own companies as well as acquired outside firms under a buy and hold investment strategy. Today, the portfolio companies generate more than $140 million in combined revenues and employ in excess of 300 people, mostly in Michigan, Indiana and Illinois. CFO Julio Martinez, a five-year veteran of the firm, will serve as acting CEO of Mno-Bmadsen.

Editor Joe Boomgaard / jboomgaard@mibiz.com Managing Editor Andy Balaskovitz / abalaskovitz@mibiz.com (energy, policy) Senior Editor Jayson Bussa / jbussa@mibiz.com (manufacturing, tech, sports) Senior Writer Mark Sanchez / msanchez@mibiz.com (finance, health care, life sciences) Staff Writer Kate Carlson / kcarlson@mibiz.com (real estate & development, small biz) Contributing Reporter Marla Miller VP of Production & Audience Development Kristi Kortman / kkortman@mibiz.com Digital Specialist Danielle Affholter / daffholter@mibiz.com Graphic Designer Kaylee Van Tuinen / kvantuinen@mibiz.com Senior Advertising Consultant Shelly Keel / skeel@mibiz.com Sales & Marketing Associate Lauren Frailey / lfrailey@mibiz.com Circulation For address corrections or subscriptions, contact MiBiz at 1-877-443-1977 or subscribe@mibiz.com

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MANUFACTURING

Manufacturers turn to Going Pro funding to address workforce challenges By JAYSON BUSSA | MiBiz jbussa@mibiz.com

n an ongoing struggle with workforce shortages and a persistent talent gap, Michigan’s manufacturers have found a valuable asset in the Going Pro Talent Fund. The fund, which is administered by the state’s Department of Labor and Economic Opportunity, continues to directly support the industry’s acute workforce development needs, announcing in late January that it will distribute $39 million in grants to 850 businesses that will eventually go toward training 30,000 workers. The West Michigan region — which consists of Allegan, Barry, Ionia, Kent, Montcalm, Muskegon and Ottawa counties — was awarded $12 million in total funds delivered to more than 280 businesses. The fund also plans to disburse $2.7 million to 43 different businessesin the Southwest Michigan region. The money can be used at the discretion of

the company, but it must go to training efforts that provide upskilling for workers or supporting the increase in credentials, certificates and degrees. “We have had, for severa l yea rs now, employers facing really critical challenges with locating the talent that they need and being able to train and retain that talent so they can remain competitive with other states and the world,” said Amy Lebednick, business solutions director for workforce development agency West Michigan Works! “The Going Pro Talent Fund really helps to fill a gap of training that ensures a win-win for both the employers and job seekers.”

Manufacturers seize opportunity While the Going Pro Talent Fund has been in place since 2013 and awards money to businesses in a variety of sectors, manufacturers are most prevalent on the extensive list of grant awardees for this year and years past. In fact, companies in the industry have gobbled

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up 43 percent of this year’s grant money, totaling $5.6 million statewide. The industr y as a w hole ha s long battled a deficiency in talent, a problem t hat has on ly gotDouglas Karl Lebednick Payne ten worse with the COV ID-19 pandemic. The pandemic ush- high-demand industries — construction, I.T., ered in mandatory shutdowns in the spring health care and agribusiness.” for many manufacturers, in addition to proWhile Lebednick has seen an uptick with viding uncertainty in demand and triggering those other industries receiving grant money, both voluntary and involuntary layoffs. As the she added that “manufacturing absolutely industry adjusts to a new normal, manufac- takes the lead in submitting applications.” turers are finding it even tougher to fill hourly Manufacturers are also increasingly turning production positions, let alone openings for to automation to fill in for workforce shortages, highly skilled talent. and with greater technology comes a greater “I would say that, generally over the years, need for training. our manufacturer employers probably take up “Employers are investing in equipment and the majority of our applications,” Lebednick machinery in order to increase production and said. “At West Michigan Works!, we do have be able to manage the staff they do have. They’re industr y talent councils in all five of our making these capital investments and they really

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“The Going Pro Talent Fund really helps to fill a gap of training that ensures a win-win for both the employers and job seekers.” — AMY LEBEDNICK Business Solutions Director for West Michigan Works!

need the training and funds to be able to upskill their current workforce to use and program that new equipment,” Lebednick said. Oliver Healthcare Packaging Co. certainly falls into this category. The Trevose, Pa.-based company employs more than 850 employees and operates seven manufacturing facilities and six technical labs throughout the world. Grand Rapids is home to its Americas headquarters. The company was awarded $37,500 from the Going Pro Talent Fund to fuel training efforts. Vice President of Global Operations Russell Douglas said that Oliver is embarking on a fiveyear workforce development initiative and is in the process of rolling out a new enterprise resource planning system, which includes a new manufacturing execution system (MES). With that, the company needs workers to have the skills to interface with components like advanced machine controls, robotics and machine vision systems. “Most of our workforce touches a piece of equipment that has some level of interface either with MES or with advanced machine controls and process automation,” Douglas said. “We’re making sure they’re positioned well for those interfaces.” The Going Pro funds will accelerate those efforts. “Would we have undertaken that with or without receiving the grant? Yeah, we probably would have, but it certainly puts us in a much better position to accelerate that training and that activity,” Douglas added.

Moving the needle Based on the outcomes of fiscal year 2019’s leveraged dollars from the fund, the program has been effective in moving the needle in this crucial area of manufacturing. In 2019 (the program was unfunded in 2020), the fund div vied out $10.9 million across the state. In manufacturing, those dollars resulted in the training of 225 apprentices and 1,272 new hires while providing classroom training for an additional 2,894 workers. This year’s funds are planned to provide training for 545 apprentices and 2,523 new hires with classroom training for 7,875 people. Grand Haven-based R.A. Miller Industries Inc. (RAMI), which manufactures antennas for aerospace, vehicle and defense applications, is another West Michigan business that received money from the grant. With a portion of the $32,050 grant, the company is developing a formal training program and set of standards to help employees Visit www.mibiz.com

learn a variety of precision training tools. Brooke Karl, director of finance and HR at the company, said that these skills not only benefit employees on the job at RAMI, but also transfer to other jobs throughout the industry. “It provides a formal training structure with all the specific tools we use,” Karl said. “We found that every employee was using tools a little differently. This will get everyone on the same page and using the tools the same way. I think it’s really going to support and reduce our scrap rate and increase our efficiency.” RAMI also will use some of the funds for a root cause analysis training program in an effort to better serve clients. The rollout of additional training comes at a good time for RAMI, which saw a f lood

of new employees enter the company in 2018. Because of a combination of factors, including an aging workforce that started to retire and increased demand from government contracts, R AMI hired 86 new employees that year, which represented 45 percent of its direct, hourly workforce. Training became an issue, especially when the older workers with all the institutional knowledge started to exit. “We needed the money to launch the new standard. The amount of time and cost to train all 80 assembly associates, it’s too significant to take on with our own investment,” Karl said. “The idea is that this will help us get that going and create a standard. Then, going forward, we will have one training class a year for our new hires.”

Like most manufacturers that ran into workforce issues, RIMA took a hard look at talent development and training and explored avenues to solidify its personnel because of the pandemic, said CEO Rob Payne. The exercise reinforced many of the practices the company was already implementing and will further cement with additional training, Payne said. “With the current job market, we really look at a person’s attitude and the way they are as a person,” Payne said. “We take the position that we can train the hard skills that they need to do well. If they have the right attitude and willingness to work and are a good fit culturally, the hard skills and the specific things they might need on a day-to-day basis, those things can be trained.”

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FOCUS: CYBERSECURITY

Training, preparation key to preventing cyber attacks By JAYSON BUSSA | MiBiz jbussa@mibiz.com

mployees at Trendway Corp. have a reason to be skeptical about suspicious emails that show up in their inboxes. That’s exactly the way John Waack wants it to be. In an effort to promote a culture of strong cybersecurity, the director of information technology for the Holland-based office furniture manufacturer uses a fairly popular solution to test employees and their level of interaction with suspicious emails. Called KnowBe4, the program allows administrators to send out fake phishing emails and track how an employee reacts to the communication. Genuine phishing emails are some of the most common methods cyber attackers use to extract sensitive information from users, ranging from login passwords to Social Security numbers. In fact, according to the 2020 Verizon Data Breach Investigation Report, phishing was the number one threat action for a successful breach. The KnowBe4 software tracks metrics that include who opens a simulated phishing email and proceeds to click on links. Some users are led so far as to download a document or provide sensitive information. Employees that exhibit haphazard cybersecurity habits will receive customized follow-up training — generally via video — to help them adopt safer practices. “When they slow down and look at it, they’re like, ‘Oh, yeah; you’re right,’” Waack told MiBiz. “That’s what our objective is: to get them to slow down. Everybody is in a hurry these days, everybody has more work than time.”

Even as a smaller office furniture manufacturer, Trendway — now owned by office technolog y and accessories manufacturer Fellowes Brands — has seen a variety of cybersecurity attacks. While nefarious users posing as a Nigerian prince might be a grift from yesteryear, Waack said that employees now receive bogus notifications asking users to reset their Microsoft 365 passwords or even attackers trying to trick the HR department to change the routing number on a direct deposit. While phishing emails provide a variety of subtle red flags, Waack said that sometimes the best line of defense is for an employee to simply step back and ask whether that communication seems genuine. “I don’t need you to do 10 levels of interrogation on each email you get, but you really need to think about what’s being requested and what you should do,” Waack said. “Would my team ever send you this message and just ask you to click on it?” Waack also said that Trendway is making a big push in the next couple of months to brush up its cybersecurity posture in an attempt to find that fine land between strong cybersecurity and easy accessibility to information and systems for employees. “All of those are a balance to say, ‘I’m going to protect you from doing these sorts of things and the rest we’re going to rely on you,’” he said.

Cybersecurity workout Testing and training has also proven valuable for Grand Rapids-based Precision Aerospace Corp., which is one of three small and mediumsized businesses owned by private equity-backed Tribus Aerospace Corp., which is based in Chicago. As a

provider of intricate parts for the aerospace industry — both commercial and defense — Precision Aerospace handles controlled unclassified information on a daily basis. Thomas Symons, who serves as I.T. manager for all three companies, said up until about nine months ago, Tribus did not have a formal training program in place, but used the growing number of attacks as justification to develop one. With a mix of office and shop floor users, the company showed through initial tests that this training was needed. Tribus also implements KnowBe4 as a testing and training tool. Symons said the first initial phishing test to its employees revealed a roughly 60 percent hit rate. After providing mandatory training for all its users, only 10 to 12 percent of users fell for follow-up phishing tests. “(Cybersecurity training) is like exercise: If you don’t maintain it, you lose it,” Symons said. “When you go talk to KnowBe4, they have statistics that show when training is stopped, the number starts to rise with compromises.” The KnowBe4 tests are a stark reminder that users will always be a liability in the grand scheme of cybersecurity. That’s why Symons spoke to the importance of permissions, firewalls and other measures that serve as a security backstop for when employees make mistakes. Even further, Symons said to “have a plan to fail.” This includes methods to recover from a breach or successful attack, which could range from cybersecurity insurance that provides rapid response and covers the financial fallout to a concise disaster recovery plan. “Think of it as an onion: There are always layers to security and you don’t just want one doorway that’s locked,” Symons said. “You need (to protect) multiple doorways to get to your crown jewels.”

Capitalizing on COVID chaos The overwhelming number of employees now working remotely

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because of the pandemic, coupled with a general public that is thirsty for the latest COVID-19 updates, has laid the groundwork for more successful threats. As of June 2020, the FBI reported its Internet Crime Complaint Center had already received complaints of 20,000 coronavirus-related cybersecurity threats. “Where we’ve always seen it is people clicking on links that they shouldn’t,” said Kelly Hollingsworth, a partner at Warner Norcross + Judd LLP who focuses on the general business and information technology industries. “Now, we’re seeing (emails that say) sign up for our vaccine. If it didn’t come from Spectrum (Health) or Metro (Health), probably don’t click it.” With the shift to more remote workers, users increasingly are relying on their smartphones to read email, where it’s easier to fall victim to a phishing email, Hollingsworth added. Steven Lauber, owner of Grand Rapids-based I.T. services provider Trailhead Networks LLC, said he has also seen the surge of attacks during the pandemic. “The attackers were really picking up on t hat frenz y of t hings related to coronav ir us,” Lauber said. “Maybe there would be a big scam around the stimulus (checks) and trying to get folks to click and

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fill out their information or a scam outbreak map for COVID-19. It was a curiosity that we all had. They preyed on that.” Employees working remotely already opened up cybersecurity vulnerabilities, such as working on a personal or shared device. As well, not physically working in the same vicinity as coworkers can also make it difficult to identify phishing emails. “In the past, you’re in the same building, maybe down the hall, so it’s a lot easier to get up and go check with them face to face,” Lauber said. “Now, people are out by themselves more and it’s not quite as easy to do that. Maybe a little more out of convenience, they might make that judgment before verifying.” Trailhead works with small to medium-sized businesses in a range of industries, and offers training as a part of its services. Lauber stressed that an effective process should be very hands-on for employees. “It’s got to be a dynamic, interactive type of training,” he said. “You don’t want it to just be a PDF or watching a webinar. A company wants to make sure (its) employees are understanding and comprehending it and that you can actually test that ongoing. It has to be ongoing and changing.”

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FEBRUARY 1, 2021 / MiBiz

VOL. 26 • NO. 25

Preparing for Transition Small business owners need to plan ahead to ensure smooth leadership transition By NICK MANES | MiBiz nmanes@mibiz.com

or small family-owned businesses, getting the right succession plan in place can be a long, drawn-out undertaking. Just ask Marcia Elgersma. She and her husband, Al Elgersma, realized more than a decade ago that they needed to figure out a succession plan for Al’s Excavating Inc., the nearly fourdecade-old small business they co-own in Hamilton, Mich., about 10 miles southeast of Holland. At the time, they wanted to outline the roles their children would take on in the excavating company going forward. But that was in the year 2000 and despite their best intentions, the planning process ultimately ended unsuccessfully. “It just didn’t work at all,” said Elgersma, the company’s secretary and treasurer. “We didn’t understand the processes and we didn’t know how to determine who was Percentage of West capable of leading.” Michigan familyIn the meanowned businessses time, the Elgersmas with no succession plan, according to found it was easier the Family Owned to grow their comBusiness Institute. pany to $6 million in annual sales than it was to figure out the transition plan, she said. After their failed try at succession planning, the business went back to its old model and the owners “just hunkered in.” It wasn’t until more than a decade later and based on a referral from a friend that the owners of Al’s Excavating met with

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ground, make people calm and Waterbury’s career accomplishfind ways to help them out. ments as an M&A adviser, menThat’s a rare commodity, espetor and community builder cially with an intelligent attorearned him recognition as the riends and family saw Stephen Waterbury heading toward a ney who does a lot of deals.” first-ever winner of the Western career in law before he ever did. Barnes & Thornburg LLP Michigan Dealmaker Hall of A desire to serve others and help them succeed was the drivattorney Michael Campbell, Fame Award. ing factor that led him to law school and to go on to a lengthy, who served with Waterbury Waterbury is “the last of accomplished legal career. on the board of ACG Western a dying breed,” said Richard After graduating with an undergraduate degree from Michigan State Michigan during the Noreen, CPA, a tax University, he applied and earned acceptance to Harvard Law School. early 2000s, agrees. partner at BDO USA A Lansing native, he later joined Warner Norcross + Judd LLP in M&A AWARDS He’s also been on the LLP who has known Grand Rapids, where he’s practiced business law for nearly 39 years. INDUCTEE: other side of some Waterbury for a During his career, he has handled the legal work for hundreds of mergWESTERN MICHIGAN deals involving cliquarter-century and ers and acquisitions domestically and globally, and served as a mentor DEALMAKER ents Waterbury repworked with him on to the firm’s young associate attorneys at the dawn of their careers. HALL OF FAME resented, and praises several client trans“Others assumed I would go into law earlier than I assumed I would him for his approach. actions. He praises go into law,” Waterbury said discussing his career during an interview “Steve is a true gentleman. Waterbury’s “calming influat the law offices of Warner Norcross + Judd overlooking downtown He’s sharp. He’s respectful of ence” and consensus-building Grand Rapids. SERVING WESTERN MICHIGAN SINCE 1988 everybody — the clients, the approach on getting dealsBUSINESS done. “I ended up viewing it as a way of serving people — I wanted whatother attorneys. He’s a pleasure “No matter how contentious ever I did to have that be a central component,” he said. “At its highest to work with, even if he’s on the something was, Steve always and best, the legal profession is a service profession focused on helpother side,” Campbell said. found a way to find common ing people succeed.”

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

Marcia and Al Elgersma, the owners of Hamilton-based Al’s Excavating, were typical of many small family-owned business owners in that they lacked a formal succession plan to transition to the next generation of leadership. After a failed attempt to develop a plan, the company tapped a team of local advisers to develop a leadership strategy and succession plan that it plans to launch Dec. 1. PHOTO: KATY BATDORFF business consultants and did a deep dive into the makeup of the family and analyzed which members were qualified to hold the various leadership positions. Such delays in putting together a formal plan of succession are not uncommon among small and middle-market companies, experts say. In West Michigan, 81 percent of family-owned businesses lack a formal succession plan, according to the results of a study conducted by the Family Owned Business Institute (FOBI), a joint project of the Grand Valley State University Seidman College of Business and Western Michigan University’s Haworth College of Business. Simply having a succession plan in place is not really enough for most companies, sources said. Rather, families and other shareholders in the business should do a thorough analysis of the company itself and the different people who could take on leadership roles, said Kirk Koeman,

a partner at DWH LLC, a Grand Rapidsbased business consulting firm. Koeman was one of a handful of people to advise the Elgersmas as they put their plan together. “In the case of Al’s Excavating, it took two years to make changes in the company,” Koeman told MiBiz. “Typically, there is a mindset that the owners’ sons will just take over. In many middle-market companies, that’s not always feasible, and you don’t really know that until someone from the outside talks with people in the company. … These people can still be owners, but they don’t have to be managers.” During the two-year analysis of Al’s Excavating — during which time DWH served as general manager of the company so it could continue operating during a busy construction period — the research showed that members of the Elgersma family from both the second and third Continued on next page

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PHOTO: KATY BATDORFF

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

SEPTEMBER 29, 2014 SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

HELMINSKI PILOTS AUXO TO GROW COMPANIES WHILE MAINTAINING WHAT’S ‘SACRED’ By JESSICA YOUNG | MiBiz jyoung@mibiz.com

eff Helminski, co-founder and managing partner of Auxo Investment Partners in Grand Rapids, successfully leveraged his atypical experience and path into the world of private equity in multiple deals last year. Helminski has a diverse professional background, including experience in manufacturing engineering, high-volume assembly operations management and real estate development. His firm, Auxo, now specializes in investing in and growing founder- and family-owned industrial, manufacturing and business services companies. While he has managed dozens of transactions involving hundreds of millions of dollars during his career, Helminski believes last year’s transactions stand out as significant in establishing Auxo’s partnership-based model and the firm’s closely-aligned relationship between investors and fund managers. With a fully subscribed fund, Helminski had the ability to invest in 10 to 15 companies in the first few years after building Auxo from scratch. Last year, Auxo

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

evaluated hundreds of opportunities and closed on several transactions, including deals for Prestige Stamping Inc. and Andrie LLC. “Both companies had a strong focus on people and culture with honest, hardworking, down-to-earth people throughout the organization from the shop floor to the C-suite,” said Helminski, the winner of the investor category in the 2019 MiBiz Dealmakers of the Year Awards. “The sellers of the businesses, both families, cared deeply about the legacy of the company, the employees and making sure they found a successor that was going to provide them with not only sustainable employment, but hopefully, greater opportunities going forward.” The businesses found a perfect fit in values and approaches with Auxo, according to Helminski. The October 2018 deal for Prestige Stamping was Auxo’s fifth acquisition in 13 months. The Michigan-based niche manufacturer of custom-engineered stampings for the fastener industry selected Auxo as the buyer even though the company was not the highest bidder, according to Helminski. The reason: The seller was concerned about the future of the company’s employees and younger generations of the founding family that remained in the business, which aligned better with Auxo’s values and longer-term investment approach. In February, Auxo acquired Andrie, a bulk marine transporter of specialty products including cement, liquid asphalt, light oil petroleum products, and calcium chloride throughout the Great Lakes. Andrie operates a fleet of 19 tugs and barges out of Muskegon, Helminski’s hometown. The company, a mature industrial business and “market leader in the niche that they serve within their sector,” checked important boxes for Helminski. The acquisition also followed the firm’s December 2017 deal to buy Metairie, La.based M/G Transport Services, an operator of inland barges. The two firms now operate as Auxo Marine, a newly formed platform company. When Helminski launched Auxo with partners Jack Kolodny and Fred Tedori, the team made “a very conscious decision” to be based in Grand Rapids. “Part of that was because the values of West Michigan align with our values, but also, to put us this close to a large number of the kinds of businesses that we’re interested in connecting with throughout the Great Lakes region,” Helminski said.

OCTOBER 14, 2019 VOL. 31 • NO. 26

Continued

Jeff Helminski, co-founder and managing partner, Auxo Investment Partners. MIBIZ PHOTO: KATY BATDORFF

Being based in the same community as many family- or founder-owned businesses is important when the firm is communicating with a potential target, he added. “My background is not the prototypical path to being in the private equity investing world,” Helminski said. “When I’m having a conversation with a family that is thinking about this transition that is often partly emotional and partly financial, I can talk to the family and say ‘here’s my story, here’s my background, this is the way I grew up in West Michigan.’ It makes a difference.” Even so, specializing in the acquisition of family-owned businesses also comes with its own set of unique challenges and opportunities. “What’s interesting is when (the businesses) have been so successful and there’s a big enough end market that they could try and grow into that they often just haven’t done yet,” he said. “In knowing that they need to do certain things differently or

professionalize certain aspects of the business that haven’t yet been professionalized, or haven’t been developed into a more scalable function within the company, that’s going to take change.” Stabilizing long-standing, familyowned business cultures while at the same time growing profits is “one of the most difficult things” Auxo does. “It’s a delicate balancing act between these two seemingly competing interests of stability and maintaining that which is great, with changing enough to accomplish the growth at a higher rate than what they’ve historically done,” Helminski said. Pre-transaction, the firm researches not only a potential target’s financial viability but also its culture and talent. “We have a roadmap to be able to see what things are sacred and we want to really protect within the business, and what things can be done better if the company is going to grow and scale up beyond the point that they’ve achieved today,” he said.

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FOCUS: CYBERSECURITY

Finance, health care remain vigilant on cybersecurity as small biz takes notice By JAYSON BUSSA | MiBiz jbussa@mibiz.com

hrough working with a number of banks and credit unions, Randy Brinks is fully aware of the giant target that the financial services industry has had for years concerning cybersecurity threats. Brinks is CEO of Grand Rapids-based RedRock Information Security LLC, a 24-employee operation that specializes in working with financial institutions and businesses throughout a number of industries. RedRock works with its clients to keep

them in compliance with federal and industry regulations while maintaining a strong posture that a member of an oft-targeted industry should have. “Health care and finance have been targeted for years now because they have private information that can be sold on the open market,” Brinks said. “Attacks like ransomware are a great opportunity for that.” Still, while industries like finance, health care and defense might offer the most bountiful payload of sensitive information, cyber attacks have grown to become fairly industry-agnostic, which should make businesses of all sizes and industries take notice.

Keeping a guard up Regulated industries like finance and health care gain the advantage of thirdparty audits and a general blueprint for Brinks Minick Truscott Weller what strong cybersecurity should look like. However, not all industries operate in these Brinks, whose firm is audited by the FDIC just closely regulated spaces. like the banks it serves, said that the standards are “I would argue that because most organiwritten in a way where they also give each individual zations are not regulated … they’re like swiss institution flexibility to implement best practices. cheese. No one is looking over their shoulder, no one is telling them what they should and shouldn’t be doing and how to prioritize their security controls.” Facing a full spectrum of potential cybersecurity threats that range from espionage conducted by nation states to hacktivists looking to make a statement or earn credibility, Brian Minick, chief information security officer (CISO) for Fifth Third Bank, said that his institution mostly sees attacks that stem from organized crime. “You see things like people trying to trick our customers into handing over their user ID and passwords,” Minick said. “We see a lot of credential validation attacks — you read about all these companies that were breached and lose user IDs and passwords. The bad guys bring those … and try those (on online bank accounts) to see if they’re the same.” While regulations certainly help guide institutions like Fifth Third, Minick said each bank needs to take measures to address its own unique, individualized threats. “The challenge is that (regulations) work very well for most threats,” Minick said. “When you get into the area of targeted threats — folks who are trying to break into your organization and actively trying different things — you need a very nimble, intelligence-driven approach to that, not necessarily a purely risk- and controlsdriven approach.”

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Health care is another long-targeted, regulated industry and the COVID-19 pandemic has only made matters worse by ushering in a new wave of attacks. Data from CheckPoint Research — a research arm of California-based Check Point Software Technologies — revealed that with ransomware alone the worldwide health care industry saw a 45-percent increase in attacks in November and December of 2020 compared to the previous two months. Not only do hospitals and other health care providers have to manage vulnerabilities inside their own buildings, but every time they use a new vendor, they inherit the risks that come with those companies. “There is cyber supply chain risk and that translates into every time we buy or hire a vendor, we’ve extended our risk to include them,” said John Weller, CISO at Metro Health — University of Michigan Health. “As we’ve expanded into telehealth technology, we have to ask: Are they secure?” The emphasis is on “speed to market, and security oftentimes comes last,” Waller added, referring to how companies work to address emerging needs in hea lth care. “They’re Visit www.mibiz.com

trying to fill the need and get market share quickly, and security is not their No. 1 concern.” Weller stressed that cybersecurity should be treated as a “team sport,” and Metro Health has walked that line by joining the Michigan Healthcare Security Operations Centers, which was established in 2018 and brought together I.T. security experts from Michigan Medicine, Beaumont Health, Munson Healthcare, the Michigan Health & Hospital Association and security company CyberForce|Q. The group shares information on threats and best practices. “(Cybersecurity) is too big for a single company to take on themselves,” Weller said. “We acknowledge that. We have to be a team player and share what we’re seeing and other hospitals are sharing what they’re seeing and we get the benefits of it.”

Small, medium-sized businesses vulnerable The growing number of successful cyber breaches are not necessarily tied to lax security, according to John Rolecki, partner and data security attorney at Varnum LLP. Threats continue to grow in their sophistication and many small- and medium-sized businesses are struggling to keep up. “More and more highly sophisticated criminals are targeting these mid-size businesses and it’s so important to have a plan and something in place before calling the lawyers” after a breach occures, Rolecki said. In 2019, public relations firm Truscott Rossman, which has an office in Grand Rapids, formed a coalition to work with small- and medium-sized businesses to help them prepare for and prevent cyber attacks but also to effectively work through them if they fall victim. Truscott Rossman joined with Lansingbased Providence Consulting and law firm Fraser Trebilcock to form “Defeat The Breach,” which also utilizes additional services from Canadian digital forensics firm DFI Forensics. The “Defeat The Beach” coalition estimates that 71 percent of all cyberattacks are committed against small businesses, and that 60 percent of small businesses that are breached will end up shutting down as a result. Truscott Rossman CEO John Truscott emphasized the importance of training for all employees, but especially during the COVID19 pandemic when cyber attacks have surged by 400 percent, according to the FBI. “What we’ve found in instances of breaches or hacks or malware, so many people are working from home,” Truscott said. “They’re not thinking like they would in the office. They’re not as cautious when they see that email from a person and they don’t know who it is.” The consensus with virtually any cybersecurity expert is clear: In this digital era, cybersecurity is now a cost of doing business — not a luxury line item. “I strongly advocate that (small businesses) talk to an I.T. consultant,” Truscott said. “It may not happen this year or next year but it’s going to happen some time and you have to be prepared because it could be devastating to your business.” Visit www.mibiz.com

Educational institutions strive to stock a talent-hungry cybersecurity industry By JAYSON BUSSA | MiBiz jbussa@mibiz.com MUSKEGON — Even before colleges started offering curricula centered on cybersecurity, Susan Rhem-Westhoff was exploring that realm with her students at the Muskegon Area Career Tech Center. Rhem-Westhoff has been a mainstay at the Tech Center throughout its 18 years of operation and serves as an instructor for the Internet, Network & Security Technology program. “This is a two-year program, and kids in the second year write their own ticket” with what they want to focus on, Rhem-Westhoff said. “I asked them 17 years ago what they wanted to learn about, and they said computer security. We started doing that and it’s just grown and evolved.” With a strong focus on cybersecurity, the center offers two classes of 26 students for its Internet, Network & Security Technology program. The program, which also explores topics such as computer networking and programming, is helping prepare students for the grossly underemployed cybersecurity industry. Expertise in cybersecurity can be applied in a variety of ways in the marketplace — from working for private companies or managed I.T. service providers to applying the skills in the defense industry. Program graduates have gone on to work at places including the U.S. Department of Defense, the National Security Agency (NSA) and Howmet Aerospace in Whitehall. Rhem-Westhoff said that most program graduates go to college directly, an essential step in reaching high-paying jobs.

Problem solvers wanted The program allows students to acquire both college credit and industry certification, allowing them to hit the ground running at the next level. “We work very closely with not only our business advisory committees but also the colleges,” Rhem-Westhoff said. “We have a great partnership with (Muskegon Community College). Our

program absolutely dovetails and rolls right into their networking programs. They also have a new networking security program that they’ve added, which is awesome.” With four-year schools, Rhem-Westhoff identified both Ferris State University and Davenport University as strong schools for a cybersecurity-focused education. Rhem-Westhoff said that the typical student that thrives in her own program tends to be a tenacious problem solver. With cybersecurity threats constantly evolving, the curriculum also changes to stay in lockstep. “That’s what makes it so interesting,” RhemWesthoff said. “And the kids love that, too — you’re not going to get bored. (Attackers) only need to find one way in, and you have to find all the ways in. It’s a great field for life-long learners because everything you learned yesterday can change.” Kyle Wilcox — who went through the program in 2015 and 2016 — went directly to work in I.T. for the Navy, where his job focuses on cybersecurity. Wilcox was formerly stationed off the coast of Japan, and is now transitioning to his new post in Suffolk, Va. The 22-year-old said the center’s program provided him with the basics and fundamentals of networking and cybersecurity that he was able to build on in the Navy. While Wilcox spends his time scanning for threats, managing hundreds of assets, conducting vulnerability assessments and a variety of other crucial cybersecurity functions, he said that when he retires from the Navy, he hopes to apply his skills in the private sector. “Any information system in the world is hackable — that’s a given fact,” Wilcox said. “The difference is how hackable is it? A lot of companies fail to properly secure their information systems. I think it would be beneficial if myself, and others like me, take what we know to industries to say, ‘Hey, let’s improve your security posture.’”

Left to right: Matt Stores and Sam Montgomery, both students at Ravenna High School, also attend the Muskegon Area Career Tech Center’s Internet, Network & Security Technology program. COURTESY PHOTO

Talent dearth Alan Rea, professor in the Department of Business Information Systems at Western Michigan University’s Haworth College of Business, has also seen increased interest in the area of cybersecurity — and with good reason. Rea said cybersecurity is one of the top two growth areas in information technology and computer science, with 2.5 jobs per every person that wants one. Also, the median salary is currently more than $98,000. National labor analytics firm Emsi underscored this overwhelming demand in a 2020 report, pointing to the fact that demand is twice as high as supply. For every 100 job postings, there are only 48 qualified candidates, per the report. “(Cybersecurity) appeals to so many different types of people because there are many things to do with it,” Rea said. “You don’t have to sit all day long in front of a computer and look at viruses.” Four years ago, Western Michigan University launched a master’s degree in cybersecurity and has turned out more than 25 graduates so far. Last fall, amid the COVID-19 pandemic, the university also launched a bachelor’s degree in cybersecurity. “You’re going to see more and more cybersecurity degrees, if you haven’t already, coming online,” Rea said, “because there is a demand.”

MiBiz / FEBRUARY 1, 2021

ECONOMIC DEVELOPMENT BROADBAND ACCESS Continued from page 1

costs are the main barriers to further broadband extension. “It’s challenging to talk to providers about going to an area when it comes down to the business model and costs that are exorbitant if we’re not able to get the right data,” he said. “The major carriers are not willing to expand their service to a road with 50 homes on it in one of our rural townships because it may cost a quarter million dollars to do it, and they don’t see their return.”

Filling service gaps A 2018 broadba nd map estimated that 22 percent, or 28,000 households, in Ottawa County lack reliable high-speed internet service through a fixed source such as a fiber optic network. Sachs believes the 2018 map was inadequate and that the access gap is as high as 35 percent of Ottawa County’s 105,000 households. Mroz Ottawa County — one of Michigan’s fastest-growing counties with a population nearing 300,000 — is working on the project with a group of public and private sector representatives. The county expects to award a contract to a consultant by March 1 and have the data collection and analyOwens sis done by the end of 2021, Sachs said. Working with additional consultants, t he Ottawa County group could craft a plan by the first half of 2022 on how to extend broadband access and fill existing service gaps, he said. “We are looking at perSachs manent solutions. School districts in the county have hotspots, we received a grant for all 10 of our libraries so they could have hotspot devices for patrons to check out, but those are stopgaps. That doesn’t address the future of how we need to operate in this area and we need to really address fixed broadband to every business and resident,” Sachs said. “This is definitely about addressing how we continue to grow as a region with the right connectivity and quality of life and economy, and broadband is a major factor.” Britt

Pandemic exacerbating problem The effort in Ottawa County typifies the situation facing many communities in Michigan and around the nation, especially in rural communities where reliable, affordable broadband internet access remains a problem. The COV ID-19 pandemic has exposed and heightened the need for greater deployment of reliable broadband ser vice, with

FEBRUARY 1, 2021 / MiBiz

STOCK PHOTO

so many people working at home and their children learning remotely, or now accessi ng hea lt h ca re t h roug h telemed ici ne. “It’s always been a challenge. I think never before have we needed access so much at the residential level as we do now as people try to work, educate and get health care from home. The pandemic really brought to life what a challenge it is and what a barrier it is,” said Jennifer Owens, president of the economic development organization Lakeshore Advantage in Zeeland. “Hopefully, when we get back to normal that sense of urgency of getting it in place won’t subside.” In some instances, the issue is not access to service but the download and upload speeds available, as well as capacity. Owens describes her own family’s experience during the pandemic. The family had five people working or learning remotely from home, attending Zoom meetings or downloading school work. “The amount of buffering we saw, the challenges we faced as a family all trying to learn and work remotely in an area that is even considered

‘high-speed,’ was pretty startling,” Owens said. “Even if you think, ‘Yeah, we have it,’ depending on how many people are on that system, you really don’t.” Across Ottawa County, “there are a lot of dead spots where there is just nothing offered,” according to existing broadband maps, Owens said. She also questions the accuracy of those maps. “The maps look OK, but the level of speed that’s considered OK is not sufficient for a family of five who are all streaming, Zooming and doing all of the things that we have to do now to continue to work and learn,” she said.

Broadband ‘essential’ A 2020 analysis by the W.E. Upjohn Institute for Employment Research in Ka lama zoo on economic development barriers within Lakeshore Advantage’s service area in Ottawa and Allegan counties concludes that many people now “view access to broadband as essential to business.” The Upjohn Institute cited a project it did in Bedford County, Pa., that “also indicates that it is essential to

“This is definitely about addressing how we continue to grow as a region with the right connectivity and quality of life and economy, and broadband is a major factor.” — PAUL SACHS Director, Ottawa County Planning and Performance Improvement Department

attracting and retaining workers and their families.” The Upjohn Institute analysis showed that “access to high-speed broadband was not sufficient and could be a significant barrier to growth,” Owens said. Visit www.mibiz.com

Owens and others v iew reliable, highspeed i nter net ser v ice a s a v ita l publ ic infrastructure that in today’s era rates just as important as water and sewer systems and public roads that were developed generations ago. Deploying broadband further “has to be viewed as a necessary utility, not an amenity,” Owens said. “I see it very much like the next industrial revolution where roadways were aggressively put in place to assure travel. Access to highspeed broadband is the roadway to our future,” said Owens, who views high-speed access as a “very complex” issue that requires public and private sector collaboration. “Now, with so many people going remote and the workforce really having a choice, maybe some (people) working from home long term, it’s even more of a priority for us to ensure our residents have access to high-speed, quality broadband,” Owens said. “As more and more employers are encouraging people to work from home, and may long term say it’s OK to work from home, that could be a significant barrier for them.” Should the shift to remote work become permanent for many people, access to high-speed internet service becomes increasingly important in competing for talent, Owens said. Many workers today can live anywhere and work remotely in their chosen profession, and “we can’t compete for that kind of talent if we don’t have access everywhere,” she said. In today’s digital economy, communities that lack affordable, reliable high-speed

internet access and their residents are at a disadvantage economically, said Tim Mroz, senior vice president of strategic initiatives at The Right Place Inc. in Grand Rapids. Broadband internet in the digital economy has evolved into an essential service, Mroz said. “From a business perspective, you can’t expect a community to be competitive if they cannot offer broadband to a business locating in that community. It is impossible for a business today to operate in a community that does not offer them adequate broadband,” Mroz said. “Whether you are a manufacturer or a retailer, you have to have broadband.” The same goes for developing talent. Students growing up in a rural community that has limited connectivity or lacks broadband service will have a hard time as they move into their high school and college years, Mroz said. “If you’re a kid growing up right now in a rural community in West Michigan and you don’t have access to broadband, how much harder is it going to be as a high schooler, a high school graduate and potentially as a college graduate, if you never had access to the internet to begin with when you’re competing against people that have had access since they were 2? It’s not even a fair game anymore,” he said.

Kent County efforts To begin addressing the issue, Kent County hired The Right Place last fall to install 78 internet access points across the area. Installation

of the access points, completed at the end of December, offer free Wi-Fi for anyone within a 900-foot radius and at least enable someone who lacks service to gain access. While the new access points that include 19 county parks are far from optimal and require somebody to get within range, they do offer a quick stopgap measure that provides high-speed connectivity to people who need it during the pandemic, said Kent County Administrator Wayman Britt. The emergency Wi-Fi project, funded with $400,000 in CARES Act money, will lead to a broader initiative to permanently extend broadband access in Kent County, Britt said. The county has heard repeatedly during the pandemic from schools and local chambers of commerce about the need for greater broadband access, he said. “Everybody’s doing things virtually right now. We needed to find a solution that allows people to participate in the things they would normally do when we weren’t affected by COVID,” Britt said. “It’s a short-term fix, but eventually it can pave the way for a long-term fix as we learn about this and the benefit of this and think it’s going, hopefully, to hurry up and cause the community to realize we’re in a new era.” Kent County commissioners are now forming a subcommittee and building a public-private coalition to “take a more in-depth look at this and what this means for the future of the community,” and to pursue long-term fixes, Britt said. In describing an upcoming process that neighboring Ottawa County is going

through now, he expects recommendations from the group by the end of 2021. Back in December, the Michigan Economic Development Corp. announced that the state will receive $362.9 million in federal grant funding over the next decade for service providers to expand broadband access to nearly 250,000 sites statewide. The MEDC estimates that 1.2 million Michigan households lack a permanent fixed broadband connection at home, resulting in $1.8 billion to $2.7 billion in unrealized potential economic benefit. The state in October awarded $12.7 million in grants for projects to improve rural broadband internet access. In West Michigan, an initiative in Barry County was awarded $1.1 million through the Connecting Michigan Communities program to expand broadband access. A project in Berrien and Cass counties received $410,422, while a Calhoun County project received $276,000. A four-county project in Calhoun, Eaton, Ingham and Jackson counties was awarded $782,699. The state budget for the 2020-21 fiscal year included $14.3 million for broadband projects. Despite the federal funding, Sachs points out that taking 10 years to get extended broadband deployed under the federal support is far too long. The $842,260 awarded to three firms to extend service to a combined 1,903 locations in Ottawa County also would only add connectivity to another 8 percent of households over a decade, he said: “We know we need to take action now.”

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MiBiz / FEBRUARY 1, 2021

ECONOMIC DEVELOPMENT

Economic development leadership changes could lend ‘fresh eyes’ to mission By KATE CARLSON | MiBiz kcarlson@mibiz.com

est Michigan economic development organizations are in a transition period — much like the industry itself during the COVID-19 pandemic — as multiple agencies take on new leadership. Those transitions include The Right Place Inc. President and CEO Birgit Klohs retiring after 33 years, Ron Kitchens resigning as CEO from Southwest Michigan First after 15 years, Discover Kalamazoo President Greg Ayers resigning in April 2020, and the resignation of former Saugatuck Douglas Area Convention and Visitor Bureau Executive Director Josh Albrecht in 2019. New leaders at these organizations could add another layer of uncertainty to what these entities and their communities will face in 2021, or they could serve as a useful tool to forge new business relationships, according to economic development experts.

thing because it also gives a fresh pair of eyes,” Whittaker said. T he profession a lso ha s nat ural turnover, but the longer someone stays is usually better for a community, said John Avery, executive director of the Michigan Economic Developers Association. “The most important thing is idenIsley Sones Whittaker tifying someone who has a vision and “Those relationships are really hard to can follow the vision of a community, pass on or give to a new owner,” said Dean and their relationship-building is critical,” Whittaker, an economic development and Avery said. real estate consultant who is the founder and Any time the CEO leaves is somewhat CEO of Holland-based Whittaker Associates unexpected, said Carla Sones, interim CEO Inc. “Those relationships build up over a long of Southwest Michigan First. However, when period of time. But I see it as an opportunity for Kitchens announced his retirement, he had new relationships to be formed. The organizabeen working with the board for the past sevtions we’re trying to recruit in West Michigan eral years to ensure the organization had a are also going through a similar transition.” succession plan in place, Sones said. Whittaker attributes the leadership turnover “We were set up better for his resignation to a natural progression of Baby Boomers reachthan we realized we would be,” said Sones, ing retirement age. who took on the role of managing partner “The change in leadership could be a good while Kitchens was CEO. “We were all shocked in the moment but really quite prepared to move forward in the interim.”

Looking forward

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Despite pandemic recovery being the main priority for many organizations, Whittaker said West Michigan economic development remains active. “I talk to a number of economic development organizations across the countr y and their pipeline of new projects has not changed,” Whittaker said, noting that planning for new facilities, expansions and relocations for larger companies can take two to three years. “There was a little dip in March and April, but now the pipeline is just as full as it’s ever been.” A major theme Whittaker expects to see from the Site Selectors Guild — a national trade group for site selection consultants — is an even higher prioritization of how communities are addressing social justice issues. “E c onom ic de v e lopm e nt or g a n i z ations and communities have got to step up their game if they want to be considered,” Whittaker said. The work-from-home trend that was spurred by the pandemic is also putting skilled employees in the driver’s seat, Whittaker said. “What if instead of recruiting a company, we focused on recruiting people instead?” Whittaker asked. “Economic development is about trying to increase the portion of the economic pie so we all get a bigger piece, and create jobs and wealth in the process.” This has played out particularly in Southwest Michigan, where an influx of people are moving from larger cities because it is viewed as a safer place with less population and more outdoor access during the pandemic. Economic development organizations should focus on opportunities the pandemic has created as opposed to what it has restricted, Whittaker said.

“The leadership of these economic development organizations and companies is going to have to start finding new ways to draw companies to West Michigan other than what we have been using for the last 20 years.” — PAUL ISELY Associate Dean, Grand Valley State University Seidman College of Business

Sense of place Southwest Michigan First’s main focus over the last few years has been attracting talent to the region, Sones said. The immediate focus of the organization is assisting businesses with COVID-19 relief and helping downtowns recover in the region. “Downtowns have experienced a lot of loss because of the office buildings being closed and not having patrons in the shops,” Sones said. “We’ve worked so hard establishing that sense of place. That’s a priority the community is worried about. Recovery for hospitality businesses as well as the retention of talent is what we’re focused on, and we know those two are married together.” Restaurants and hospitality businesses are generally not the focus of economic development organizations, but that is part of the formula that retains and attracts talent, said Paul Isely, associate dean and a professor of economics at the Grand Valley State University Seidman College of Business. “What is interesting about West Michigan is our exposure to manufacturing, which is outsized compared to other areas of the country,” Isely said. “There are some ZIP codes here where fifty percent of the jobs are manufacturing, and that’s also a sector that throughout the pandemic has struggled finding workers to replace people.” Drawing and retaining businesses to the area requires talent, and a selling point of West Michigan used to be the affordable cost of living. But that is going away, Isely said. “The leadership of these economic development organizations and companies is going to have to start finding new ways to draw companies to West Michigan other than what we have been using for the last 20 years,” Isely said. “Some businesses that are successful here in West Michigan right now are going to have to grow and change, or else they will be replaced.” Visit www.mibiz.com

ECONOMIC DEVELOPMENT

State pursues cannabis industry racial equity, but advocates say more work needed By KATE CARLSON | MiBiz kcarlson@mibiz.com

ichigan cannabis businesses have over whelm ing ly white ownership despite the state’s 2018 voter-approved marijuana law encouraging participation by people who have been “disproportionately impacted by marijuana prohibition and enforcement.” Data collected in December 2020 by the state Marijuana Regulatory Agency (MRA) shows ownership of licensed recreational establishments is just 3.8 percent Black or African American, and 1.5 percent Hispanic or Latino. The findings reinforce the MRA’s move last year to establish a Racial Advisory Workgroup to create policy ideas and recommendations to address disparities in the industry. The workgroup released Ross f i na l recom mendat ion s on Jan. 19 after meeting from July through December 2020 with subcommittees that focused on social justice, business development, local equity, process and pathways, a nd resou rce deploy ment a nd st rateg ic partnerships. Workgroup recommendations include increasing studies and research on cannabis, creating a crowdfunding platform that would support local investors and those in disproportionately affected communities, creating educational resources for municipalities and partnering with land banks to increase access for social equity applicants getting into the cannabis business. The MR A is also facilitating a standing Diversity, Equity and Inclusion Workgroup that will meet once a month to continue to advance the proposals of the Racial Equity Advisory Workgroup. The MRA’s racial equity recommendations are the first time the state has added clarity around what “equity” means in the industry, said Denavvia Mojet, founder and executive director of the Black and Brown Cannabis Guild. She also served on the Racial Equity Advisory Workgroup. “We can finally recognize the elephant in the room,” Mojet said. “In government there are these beautiful buzz words like social equity with the thought that it will come back to people of color when instead it should have started with people of color.” If nothing else, Mojet hopes municipalities will take the lead after the MRA put the focus on equity and race, clarif ying commonly used broad terms like “social equity.” Under many municipalities’ social equity programs for cannabis businesses, incentives can apply to women, local residents, people with prior cannabis convictions and veterans who are white and not part of communities disproportionately affected by prohibitionist laws.

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Cannabis industry advocates say the state’s effort to address inequities in business ownership is a start, but more work could be done particularly at the local level. STOCK PHOTO Mojet has been leading the Black & Brown Cannabis Guild since founding it in 2019. The guild operates as more of a community organization, and creates a network for people of color who are passionate about cannabis, as well as offering expungement resources. “I’m excited about a lot of (the recommendations) and think it will help change the industry to be more inclusive around the ownership and licenses,” Mojet said. “The cannabis industry can bring opportunities, and whether you’re Black or white, there is a part you can play in equity in the industry.” Mojet sees the workgroup recommendations as a positive start to the industry becoming more equitable, and she emphasized the importance of the MRA establishing a more permanent workgroup. “We need to continue this relationship between the MRA and people of color,” Mojet said. “If we’re really serious about racial equity, we should have people of color speak directly with them.”

Tax increase, lack of specifics The Michigan Cannabis Industry Association (MiCIA) supported the Racial Equity Advisory Workgroup’s recommendations overall, but strongly opposed two that would increase the excise tax on adult-use products and another that would levy a tax on medical cannabis. The tax increase received the least support among MiCIA members. “The MiCIA unequivocally opposes any tax increases on the retail and medical markets. We should be focusing on reducing costs and this proposal will only serve to drive patients to the illicit market,” Anquinette Sarfoh, MiCIA board member and member of the Racial Equity Advisory Workgroup, said

“This is a time for municipalities and the private sector to set up some policy with their rhetoric. We’re not going to create financial equity with aspirational goal setting. You can’t wish your way to equity.” — DAREL ROSS Owner, Forty20 Cannabis LLC

in a statement on the recommendations. “As a cannabis patient with multiple sclerosis, the idea of creating another financial barrier between patients and their medicine is abhorrent.” The recommendations that came out of the MRA’s workgroup will generally be helpful, but they lack specific quantitative goals, said Darel Ross, a director at Grand Rapids-based Start Garden. Ross also runs consulting firm Forty20 Cannabis LLC that helps businesses seeking to enter the cannabis market. “The lack of t he specif ic qua ntitative goals and unwillingness of municipalities to just state the outcome, or specific number of Black-owned cannabis businesses they want to see, makes it very difficult to get to that,” Ross said. “This is a time for municipalities and the private sector to set up some policy with their rhetoric. We’re not going to create financial equity with aspirational goal setting. You can’t wish your way to equity.”

Emerging opportunities According to a 2020 national study from the American Civil Liberties Union, A frican Americans are 3.64 times more likely than white people to be arrested for marijuana possession, despite similar usage rates. The increasing number of states legalizing or decriminalizing marijuana has not reduced national trends in racial disparities, according to the study. Part of the problem is municipalities should look at the issue from an economic lens instead of just a social equity lens, Ross said. There is a market for Black-owned dispensaries and other cannabis businesses, he added. “We have to collectively admit that if there is no diversity within dispensary ownership in the next 12 months, then it’s by design,” Ross said. Despite the lack of diversity in ownership in the recreational cannabis market, opportunities are still just starting to emerge, Ross said, adding that most cannabis business operators also want to be part of the equity solution, but there is not a clear structure to get there. “A lot of times they’re just being asked to fill out an equity survey and fill out promises,” Ross said. “We are at a place where it’s becoming inexcusable to not have equitable outcomes.” The municipalities and businesses that truly stand by their equity mission statements are the ones who act on them, Ross said. Through his consulting firm, Ross is working with 3Fifteen Cannabis, which is working to launch two black-owned dispensaries in Michigan. “I think everybody has the right idea and right intentions,” he said. “However, history has shown us intentions alone do not move the needle.” MiBiz / FEBRUARY 1, 2021

SMALL BIZ: COPING WITH COVID-19

Applying for COVID-19 aid a rocky process for some restaurant, bar owners By KATE CARLSON | MiBiz kcarlson@mibiz.com

ami VandenBerg successfully applied for the first round of federal Paycheck Protection Program loans for her small businesses in 2020. In the months rounding out last year, though, she and many other small business owners were “left flailing,” said VandenBerg, t h e ow n e r o f T h e Meanwhile bar and Pyramid Scheme venue, both in Grand Rapids, as uncertainty clouded the prospects of additional funding support. The U.S. Small Business Administration opened applications for Grill a new round of forgivable PPP loans through March 31. VandenBerg and other West Michigan restaurant and bar owners describe the funding as a lifeline that will hopefully prevent more small businesses from closing, though the proJohnson gram is not without its flaws. “We were thrilled that another stimulus bill passed, although it was too late for many,” VandenBerg said. “I have friends who have lost their businesses, but we were able to fortunately hold on through being VandenBerg mandated to close. I think we probably could have figured out a way to hold on without the (latest round of PPP) assistance, but it would have put us in a lot of debt.” The Michigan Restaurant and Lodging Association predicts about 5,600 establishments will close in Michigan in the next six months. “The first round (of PPP) was amazing. I was beyond thrilled, but it was not enough and we ran through it,” said 1983 Restaurants owner Lucas Grill. “We weren’t even through the summer and the money

FEBRUARY 1, 2021 / MiBiz

Recruiting firm helps companies find talent under pandemic variables By JAYSON BUSSA | MiBiz jbussa@mibiz.com The Apartment Lounge in downtown Grand Rapids launched a GoFundMe campaign to help keep the business afloat as loan applications proved challenging. PHOTO BY KATE CARLSON from the PPP loan was gone. When we hit November and didn’t have a loan, it was a different situation. We had all this overhead, labor costs and no assistance.” Grill said 1983 Restaurants — which operates Seventy-Six, Poquito and Obstacle No. 1 in downtown Holland, as well as Public in Zeeland — would hire people back quickly if it gets approved for this current round of PPP. Before the pandemic, about 100 people were employed across 1983 Restaurants’ four businesses. When they are able to reopen Feb. 1, Grill expects staffing will be at about 65 employees. “Restaurant owners like myself, we’re desperate — our employees and ourselves need the money,” Grill said. “Our sales in the second quarter of 2020 were down by 79 percent.” Grill opened Poquito and Obstacle No. 1 cocktail bar in Holland four months before the pandemic hit. “Every time we start to build some momentum, we have to shut down,” Grill said. “It’s a gut punch.”

Bar challenges Not being able to pivot to takeout during dine-in restrictions adds another layer of difficulty for bars that do not have food service. With months of no additional federal funding after the first round of PPP, The Apartment Lounge owner Bobby Johnson has dipped into his personal retirement savings. He also started a GoFundMe for the state’s oldest, continuously operating LGBTQ bar, and has been holding occasional pop-up happy hours in his bar’s outdoor space. “A lot of local businesses are starting GoFundMe campaigns and people don’t understand that without it we wouldn’t be able to survive,” he said. Outdoor dining and service is less feasible in the winter months, but The Apartment still sporadically hosts outdoor happy hours to keep generating some revenue, Johnson said. Businesses like The Apartment rely on a high volume of customers to make a profit, which makes dine-in restrictions — such as 25 percent capacity limits, which begins Feb. 1 — even harder to operate in, Johnson explained. The average bill for a customer that comes to The Apartment is about $15, while the average bill at a restaurant could be $30 to $40. The Apartment also lost its 11 p.m.-2 a.m. crowd, which was its busiest time pre-pandemic.

Lack of clarity on funding tools VandenBerg only applied for the latest round of PPP — which she ended up securing — for The Meanwhile. She was worried

that applying for a PPP loan for the Pyramid Scheme would jeopardize the venue’s ability to receive relief from the $900 billion coronavirus relief package passed at the end of 2020. The legislation set aside $15 billion for grants to entities including small arts and entertainment venues. Grants from the relief bill for entertainment venues will likely be much more than the PPP loans, but VandenBerg was not able to get a definitive answer on whether applying for one program would disqualify her from applying to another funding source. “It feels like we’re in this high stakes poker game,” VandenBerg said. The first round of PPP was forgiven for The Meanwhile, but VandenBerg is still waiting to see if it will be forgiven for the Pyramid Scheme because it was not open long enough to use much of the funding for payroll. Between the two businesses, $125,000 was secured in the first PPP round. “It was worth it regardless because it’s a 1 percent loan and we have way more overhead at the Pyramid Scheme,” she said. “The main issue for the Pyramid Scheme was in order to use all of our staff or even half of them, we had to be having shows.”

Relationships with bankers Johnson said when he tried to apply for the first round of PPP loans, he was “frozen out,” and had to switch banks before he was eventually able to qualify for $23,100 in funding. “We were with a large bank and they helped their larger clients before they helped their small clients,” Johnson said. “We switched to Lake Michigan Credit Union.” The Apartment has kept its core staff and for the first time opened an outdoor patio area in the summer. For Grill, of 1983 Restaurants, applying for the first round of PPP went smoothly and did what it was designed to do — keep people on the payroll. Grill’s relationship with his local bank, West Michigan Community Bank, was helpful in the process, he said. Millennium Restaurant Group, which operates six restaurants in Kalamazoo, also benefited while applying for PPP by having a good relationship with its bankers to secure funding in the first round, said Operating Partner Shelly Pastor. As a company that’s been in the restaurant business for more than 20 years, Millennium was equipped with the knowledge and skills to navigate the PPP application process, she said. “We see this as helping to tide us over,” Pastor said, adding that it will also benefit service industry vendors. “Without it I can see us and many others not surviving.”

KALAMAZOO — As she connected with businesses during the COVID-19 pandemic, long-time professional recruiter Sheri Welsh noticed that HR departments were becoming largely depleted as the economic slowdown decimated many industries. This dynamic inspired Welsh and her team at Kalamazoo-based talent acquisition firm Welsh & Associates to design and launch a new service. T h r ou g h t h e F l e x Ta l e nt Acquisition Program, Welsh & Associates now provides fully customizable human resource solutions that effectively act as an extension of the company’s in-house department. “Right now, in the midst of the pandemic, there are still companies that are thriving,” said Welsh, whose company has been in business for Welsh nearly two decades. “They’re growing. You have organizations that are ramping up new programs and starting new divisions and have a need to hire talent rapidly, but the bandwidth in HR has been squeezed unmercifully by the pandemic.” Welsh said throughout the course of the pandemic, many HR departments have been caught up in downsizing. Businesses that managed to stay staffed in this area have found themselves spending most of their time recruiting a workforce for hourly roles and don’t have the capacity to focus on bringing in executives and professionals. This has proven especially true in the manufacturing industry, where COVID-19 has exacerbated existing workforce shortages, Welsh said. The Flex Talent Acquisition Program, which Welsh & Associates officially launched in January after testing it on existing clients, is a response to this dilemma, helping to meet the rapidly changing talent needs of companies belonging to all types of industries. “This model doesn’t work maybe two years ago, to be honest,” Welsh said. “Maybe it didn’t make a lot of sense for companies two years ago. But post-pandemic — if we can even say that we’re in the post-pandemic … it has upended so many things with talent acquisition. We are a solutions provider and we felt that the solutions we had to offer could be improved by introducing this model.” Welsh and her team have made a living finding hardto-source talent for their clients. Engineers, as one example, enjoy a meager 2.9 percent unemployment rate, making it especially difficult to find any. “When you look at the (high) unemployment figures, you might assume that you can find talent yourself, and you can, but you can’t find the needle in the haystack — specific talent you’re looking for,” Welsh said. And that’s the secret sauce for Welsh & Associates. Welsh attributed her company’s ability to source talent to one simple thing. “It’s good old-fashioned hard work,” she said. “What we’re doing — and it’s been the hallmark of our success for 20 years — is employ executive search techniques to professional level positions. We actually recruit and headhunt talent. We don’t really care if folks are actively looking or not. We want to talk to the very best people doing this work in their field today and we want to talk to them about what we believe is a better opportunity with our clients.” Visit www.mibiz.com

CLQ: SMALL BIZ LENDING UPDATE

SBA simplifies PPP loan forgiveness process By MARK SANCHEZ | MiBiz msanchez@mibiz.com s clients began reaching out in recent weeks to gather documents and apply for forgiveness of their federal Paycheck Protection Program loans from last year, executives at Level One Bank urged them to wait. The reason: The U.S. Sma l l Business Administration was planning further guidance for PPP loan forgiveness that would simplify the process for borrowers who got $150,000 or less. “We told our clients, ‘Why don’t you hold off if you haven’t already applied for forgiveness because it’ll be even easier,’” said Greg Wernette, executive vice president and chief lending officer at Farmington Hillsbased Level One Bank, which has $4.5 billion in assets and Hopps maintains an office in southeast Grand Rapids. “The SBA is making it simpler for smaller companies. It’s a lot more straightfor wa rd a nd it doesn’t require as much documentation to get forgiveness,” Wernette said. “Basically, you’re not going to have to Piper round up as much paperwork to get forgiven for last year’s (loans).” In updated guidance issued Jan. 19, the SBA will allow small businesses that received PPP loans of $150,000 or less last year to fill out a simpler, single-page form — which comes with five pages of Shepherd instructions — that attests that they complied with all requirements.

‘Big benefit’ The new stimulus package that allocated $284 billion for a new PPP round that launched in January also Wernette i ncluded la ng uage t hat required the SBA to create a simpler forgiveness process for loans issued in 2020. The legislation also created a process for new PPP loans issued in 2021. As of Jan. 24, the SBA had approved 400,580 loans under the new PPP round that includes 13,171 for $1.5 billion for Michigan small businesses. The simpler form asks borrowers to fill in the amount of their PPP loans, how much was used for payroll costs, and how much they are asking to have forgiven. PPP borrowers must retain their support documentation for four years. “We feel that it’s going to be a big benefit for our customers,” said Michael Shepherd, head of SBA lending for Fifth Third Bank. Fifth Third wrote 40,071 PPP loans last year Visit www.mibiz.com

totaling $5.4 billion across its 13-state footprint, according to SBA data. More than 40 percent of Fifth Third’s PPP borrowers have applied for loan forgiveness, Shepherd said. More than eight in 10 had received PPP loans of $150,000 or less. Once a lender reviews a forgiveness application and submits it, the SBA has up to 90 days to make a final decision, Shepherd said. To date, most of the applicants received answers on forgiveness within the 90-day timeframe. “We’ve had much quicker on some and a little bit longer on others,” Shepherd said. “The overall turn has been very good from the SBA within the timeframe.” Level One Bank wrote 2,176 PPP loans for about $400 million last year. About 30 percent of those borrowers have already sought and received loan forgiveness from the SBA. Wernette expects a “significant number of borrowers” at Level One to qualify for forgiveness of their PPP loans. Many of the bank’s clients that got a PPP loan last year are now applying for another loan in 2021, Wernette said. Borrowers who have yet to seek forgiveness for a 2020 loan and waited for the new SBA guidance were able to focus more time “on the important dynamics of keeping their business afloat,” he said.

‘Much easier’ As the SBA administers the new PPP round that Congress authorized in late December, the agency is working to approve loan forgiveness for those PPP borrowers who meet eligibility requirements. In the first round of the PPP, the SBA approved 5.2 million loans nationwide totaling $525 billion through the end of the program on Aug. 8. In Michigan, more than 128,000 small businesses received a combined $16 billion in PPP loans. As of three weeks ago, the SBA said that in the three months since opening the forgiveness process, the agency forgave more than 1.1 million PPP loans nationwide totaling more than $100 billion. Through Jan. 12, the SBA received 1.3 million forgiveness applications totaling about $170.5 billion. Of small businesses that received PPP loans up to $50,000 last year, nearly nine out of 10 had been approved for forgiveness, according to the SBA. A large majority of first round PPP loans fall under the simpler forgiveness criteria and process. More than 87 percent of all PPP loans were for $150,000 or less, while two thirds were for $50,000 or less, according to SBA data. At the time the first round ended on Aug. 8, the average PPP loan was $101,000. Banks, credit unions and other financial institutions participating in the PPP have been reviewing forgiveness applications even as they process new requests for the second round, which opened last month and runs through March 31. The simpler forgiveness process lessens the task for lenders, who are simultaneously preparing and reviewing new PPP applications. Since launching the PPP last spring, the SBA has repeatedly updated or altered rules and guidance, often frustrating lenders, particularly in the early weeks and months of the program. This time, the latest guidance on forgiveness for loans of $150,000 or less was a welcome change

for lenders that makes the process easier for them and their clients. “It’s much easier in that they just have to provide us some information and the signed form. It’s not nearly as complicated and it’s pretty straightforward and easy,” said Steve Piper, chief credit officer at Kalamazoo-based First National Bank of Michigan. “They still should provide us with some of the information to support that, but we don’t have to look at it, which is the biggest and my favorite part of it. We just have to say that they gave us information to support it.” FNB wrote about 600 PPP loans in the first round in 2020, about 200 of which have since been forgiven by the SBA, Piper said.

More applications coming The new process has significantly shortened the amount of time it takes to review forgiveness applications before submitting them to the SBA, said John Hopps, commercial credit manager at Grandville-based Grand River Bank. “It does ease the administrative burden. It also eases the burden on customers,” Hopps said. Grand River Bank did 370 PPP loans in the first round for about $60 million, and about 60 percent of the loans were for $150,000 or less, he said. About 60 PPP borrowers at Grand River Bank have since received forgiveness from the SBA, and Hopps expects many more will now apply. “We were waiting for the new form to come out for the $150,000 and under group,” Hopps said. “It’ll be a pretty significant amount that will get forgiven in the next month or so.”

“The SBA is making it simpler for smaller companies. It’s a lot more straightforward and it doesn’t require as much documentation to get forgiveness.” — GREG WERNETTE EVP and Chief Lending Officer at Level One Bank

In the first round, Grand Rapids-based Mercantile Bank wrote more than 2,271 PPP loans totaling about $554.3 million. As of Jan, 14, the SBA had forgiven 1,103 the loans to Mercantile clients for $210.2 million, according to a recent presentation on fourth quarter results. “Based on recent trends, it appears that a vast majority of the remaining PPP loans will be forgiven during the first three quarters of 2021,” CFO Chuck Christmas told brokerage analysts in a Jan. 19 conference call. However, the bank had yet to receive forgiveness payments from the SBA on PPP loans of $2 million or more, although 70 percent of those borrowers had applied, according to Christmas. Just 0.5 percent of the PPP loans issued last year were for $2 million to $5 million, but they amounted to 13.7 percent, or $72.1 billion, of the total value, according to the SBA.

PPP LOANS The U.S. Small Business Administration approved 5.2 million loans nationwide totaling $525 billion in the first round of the Paycheck Protection Program. Here’s a breakdown on loans amount by volume and size:

Loan size

Loan count

Net value

3.5 million

$62.7 billion

$50,000 to $100,000

683,785

$48.6 billion

$100,000 to $150,000

294,557

$36.0 billion

$150,000 to $350,000

377,797

$84.7 billion

$350,000 to $1 million

199,679

$113.5 billion

$1 million to $2 million

53,218

$73.8 billion

$2 million to $5 million

24,248

$72.1 billion

More than $5 million

4,734

$33.1 billion

$50,000 and less

MiBiz / FEBRUARY 1, 2021

POLICY BIDEN OUTLOOK Continued from page 1

Executive Order 13987 created a national COVID-19 response coordinator, while subsequent pandemicrelated orders included mask wearing on federal property and created a coronavirus testing board. Meanwhile on Jan. 20, Biden signed a memo to the Attorney General and Secretary of Homeland Security to preserve the Deferred Action for Childhood Arrivals (DACA) program, a 2012 policy under the Obama administration that deferred the removal of undocumented immigrants who were brought to the U.S. as children and stayed in school or enlisted in the military. Both policy initiatives signaled a new tone from the Biden administration on day one and have gained support from some groups in the West Michigan business community. “It’s been good to see President Biden’s call for 100 days of mask wearing and a whole slew of executive orders around tackling the pandemic,” said Andy Johnston, vice president of government and corporate affairs with the Grand Rapids Area Chamber of Commerce. “It was positive from our standpoint when it comes to the (DACA) order and was something we were hoping to see,” he added. “Talent attraction and recruitment is still a major issue for us, and it was encouraging to see them prioritizing immigration reform.”

COVID-19 response The Biden administration’s early focus on a COVID-19 response has been welcomed particularly by business groups and economists who have long argued that a full economic recovery won’t start until the pandemic is under control. “We are in a recession that was caused by the pandemic — period, end of story,” said Michigan State University Economist Charles Ballard. “Absent the pandemic, the U.S. economy wouldn’t have done all of these gyrations we’ve gone through. Thus, the economy’s not going to really get back to normal until we get the pandemic under control.” Within the first three days of taking office, Biden signed more than a dozen executive orders specific to addressing the pandemic. Days later, the administration announced it would buy 200 million doses of COVID-19 vaccines. “I’m also encouraged that it’s beginning to look like the vaccine rollout might finally gain some strength,” Ballard added. “On balance, certainly I’d say that it looks like there’s a plan with the Biden administration. With the Trump administration, it just seemed rudderless.” Guillermo Cisneros, executive director of the West Michigan Hispanic Chamber of Commerce,

FEBRUARY 1, 2021 / MiBiz

agrees that it’s “imperative,” particularly within the Latinx community, to get the vaccine. “Unfortunately, we’ve seen in the Latinx community hesitation of a lot of people that don’t trust the government, who fear any consequences after getting vaccinated,” he said. “The issue is across the board.” In late January, Cisneros was a m o n g m o re t h a n 5 0 p e o p l e appointed by Gov. Gretchen Whitmer to the Protect Michigan Commission, which aims to raise public awareness about the safety and effectiveness of COVID-19 vaccines. “I’m excited about the opportunity,” Cisneros said. “It says it’s the only way we’ll be able to move forward and help the economy grow.” Ballard agreed: “We can’t pretend the pandemic’s over here and the economy’s over there. They’re intimately intertwined.”

Immigration reform A naturalized U.S. citizen from Mexico, Cisneros said more broadly the swearing in of Biden was “absolutely” a sigh of relief. Biden also signed an executive order incorporating undocumented immigrants into the decennial Census count and terminating construction of the southern U.S. border wall. “What we are sensing and feeling is more openness from this new government to search for problems and struggles that the U.S. has, particularly for the people who are disadvantaged,” Cisneros said. Like Johnston, Cisneros says the DACA program hits on crucial workforce issues across a variety of trades in Michigan and elsewhere. “The workforce we have doesn’t have the proper documentation to fulfill these jobs and get certified” in trades, he said. “DACA is a good beginning of moving toward more comprehensive immigration reform. It will provide opportunities for all of these students or individuals who came to this country when they were kids. At the same time, it will benefit incredibly these business owners looking for talent.” Johnston said the DACA memo in particular represented a “good tone being set. We do need to make changes to our immigration system. Not only will it help businesses meet critical workforce needs, but it’s also good to do from an individual standpoint. We want the most talented, industrious people as possible to drive growth and, in turn, create more jobs.”

Policy concerns Despite support for immigration and public health efforts, Michigan business groups are skeptical of other early actions from Biden. That includes the cancelation of a presidential permit for the Keystone XL pipeline, which was among several executive actions the administration has already taken to

Residents line up for COVID-19 vaccines at the DeVos Place in Grand Rapids, which has been transformed into a mass vaccination site seeking to administer up to 20,000 shots per day. Health care and economic experts say the economy won’t rebound until the vaccine is widely distributed and the virus is under control. PHOTOS COURTESY OF SPECTRUM HEALTH address climate change that have garnered support from clean energy groups. Despite Keystone XL’s planned path from Alberta Province in Canada to the Gulf of Mexico via Great Plains states, business groups have raised concerns about the potential effect on energy prices and the cost to produce goods. Also last week, the Biden administration announced a pause on oil leasing on U.S. federal land. Small Business Association of Michigan President Brian Calley says the rulemaking process that goes along with executive orders will ultimately determine their policy weight,

including a Biden order directing the federal Occupational Safety and Health Administration to develop new COVID19 workplace safety guidelines. Calley called the Keystone XL order “concerning and problematic in terms of the cost of energy and the cost of anything that uses petroleum as an input. Taking chances with energy costs is an unnecessary risk given the challenges we face.” Johnston also cited the Keystone XL permit revocation as a specific sticking point: “We want to make sure energy independence remains a priority.”

So far, these issues have been among a slew of policy discussions being raised after Democrats took back a majority in the U.S. Senate, along with the presidency, and retained control of the U.S. House. Johnston hopes debates around raising the federal minimum wage to $15 an hour and tax policy changes — while still worthy of discussion, he says — remain separated from the pandemic response. “It’s a bit of a mixed bag,” Johnston said of the Biden administration. “On the whole, it’s been positive to see.” Visit www.mibiz.com

Whitmer, GOP legislature compete over COVID relief funding By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

o v. G r e t c h e n W h i t m e r a n d Republican lawmakers are squaring off over multi-billion-dollar COVID19 spending plans that would bolster a vaccine rollout, K-12 schools preparedness and crucial business support. Whitmer unveiled her $5.6 billion Michigan COVID Recovery Plan on Jan. 19, which includes $90 million to distribute COVID-19 vaccines and $225 million to fund three new programs through the Michigan Economic Development Corp. The MEDC programs would include grants and low-interest loans for restaurants and other “place-based businesses,” companies with fewer than nine employees, and hightech startups. Whitmer’s plan also calls for reinstating the Good Jobs for Michigan tax incentive program and calls on lawmakers to permanently extend unemployment insurance benefits from 20 to 26 weeks. The governor’s plan brought swift criticism followed by a Jan. 27 counter-proposal from state Rep. Thomas Albert, R-Lowell, who chairs the House Appropriations Committee. Multiple statew ide business groups were quick to back Albert’s $3.5 billion plan, which includes $415 million in grants for businesses directly affected by state shutdown orders, a $150 million deposit into the state’s unemployment trust fund to offset fraudulent claims last year, and $38.5 million to reimburse fees for liquor license and health department inspections. Both plans include funding to assist business owners facing penalties and interest on unpaid 2020 property taxes. “House Republicans are going after direct and immediate urgent needs within the sectors of the business community that were most negatively impacted by the government orders,” Small Business Association of Michigan President Brian Calley told MiBiz. “They do a really nice job at zeroing in on and sending a message to these businesses that are struggling the most that we want you to survive.” Calley, the former Republican lieutenant governor under Gov. Rick Snyder, added that the GOP plan goes further with $22 million in property tax relief — a measure business groups have called for since last summer and that Whitmer vetoed twice in related bills. “That was a really big deal,” Calley said of the House’s property tax proposal. The GOP plan also has support from the state chapter of the National Federation of Independent Business and the Michigan Manufacturers Association.

Daylight or similarities? In an interview with MiBiz last week, Albert said his plan differs from Whitmer’s primarily in how they target business relief. Visit www.mibiz.com

“When it comes to the short-term survivability of a business, job training only matters if the business still exists to employ people in the first place.” — BRIAN CALLEY President of the Small Business Association of Michigan

“Instead of trying to help people start their lives over, we’re trying to help them before their lives come to an end,” Albert said. “The governor’s plan is more about increasing funding to government-run programming and creating new college-level jobs — which is fine, but with the specific crisis we’re in, thousands of small businesses are holding on by a thread.” Michigan Economic Development Corp. President and CEO Mark Burton said in an emailed statement that it “remains imperative that we set a course for economic recovery to build on the foundation of nearly $240 million in small business relief the organization has already deployed statewide.” T he bu si ne s s-relate d i n it iat ive s i n Whitmer’s plan, including passing legislation reinstating the Good Jobs for Michigan program, “will help stabilize, recover and ultimately grow the economy here in Michigan.” Both spending plans primarily rely on federal COVID-19 relief funding that has been distributed to states but is subject to legislative approval. While introducing her plan last month, Whitmer focused on the message that jumpstarting the economy would first require getting COVID-19 under control. Her plan also drew support from Business Leaders for Michigan, which is now under the leadership of Jeff Donofrio, who previously led the state Department of Labor and Economic Opportunity under Whitmer. Gilda Jacobs, president and CEO of the Michigan League for Public Policy, sees the two plans as “very similar in many ways. All Democrats and all Republicans want to get everyone vaccinated as best they can, and everyone gets that it’s a health issue and an economic issue. If everyone gets vaccinated, the economy will become more robust.” Jacobs didn’t draw much distinction between direct grants for businesses and job training initiatives. “It’s a both-and situation — I think you really need to do both,” Jacobs said, noting there’s likely to be additional federal stimulus funds flowing to states under the Biden administration.

Top: Gov. Gretchen Whitmer and Chief Medical Executive Dr. Joneigh Khaldun during a June 2020 press conference. State Rep. Thomas Albert, R-Lowell, during a Jan. 27 House Appropriations Committee in Lansing. COURTESY PHOTOS

“By getting people trained differently and upskilled and providing an opportunity to have better paying jobs … it’s a win-win for everybody, particularly for small businesses.” — GILDA JACOBS President and CEO of the Michigan League for Public Policy

“By getting people trained differently and upskilled and providing an opportunity to have better paying jobs … it’s a win-win for everybody, particularly for small businesses,” said Jacobs, a former Democratic lawmaker

who agrees with Whitmer that permanently expanding unemployment benefits to 26 weeks “is an imperative.” Calley said he doesn’t see business grants a nd job t ra i n i ng f u nd i ng as “mut ua l ly exclusive.” “When it comes to the short-term survivability of a business, job training only matters if the business still exists to employ people in the first place,” he said. “We have to think about the long term, but we also have to think of the short term.” “They’re taking different approaches, for sure,” Calley added of the two plans. “These are both very new proposals that have been on the table.” The latest differences over the current year budget supplemental are likely to play out over the coming weeks. “We’ll take it one day at a time,” Albert said, noting likely collaboration with Senate Republicans. “We hope to have something on the governor’s desk in the near future.” MiBiz / FEBRUARY 1, 2021

FINANCE

‘THE NATION IS WATCHING US’ Diversity-focused VC fund garners widespread attention, even before making initial investment By MARK SANCHEZ | MiBiz msanchez@mibiz.com GRAND RAPIDS — The West Michigan venture capital fund that intends to invest in growing, minority-owned businesses has garnered attention from interested parties who want to replicate the model elsewhere in the U.S. Renee Tabben, Grand Rapids market president at Bank of America and a board director at the New Community

Anku

Transformation Fund LP, said she’s been contacted through her professional network by people in Denver, Colo., Miami, Fla., and Sacramento, Calif. who “seem to have the same demand for what we’re trying to achieve with the fund (and) the same thinking in terms of what’s possible.” “Just in the last few weeks, we’ve had conversations with those cities and a few other ones have started to come in as well. The opportunity

Klohs

Tabben

to duplicate this model is very strong, very promising,” Tabben said. “When you’re thinking big, good things happen.” Since launching a year ago, the New Community Transformation Fund has netted $8.5 million in commitments to date from investors, and should reach $10 million perhaps as soon as next month. Another $17 million is “in the pipeline from folks who are very excited about this fund and looking to make a significant investment,” s a i d Kw a m e Anku, the CEO of Sacramentobased Black Star Fund, who’s been ad vis in g local partners on the Welch formation of the

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FEBRUARY 1, 2021 / MiBiz

new venture capital fund. The social unrest of last spring led major institutional investors to commit to supporting initiatives such as the New Community Transformation Fund, Anku said. He cites Bank of America as an example of a commitment that has now come through for the fund. The Charlotte, N.C.-based Bank of America made what Tabben described as a “substantial” investment in the New Community Transformation Fund, which was in addition to providing early seed capital. The investment was part of a broader $200 million, four-year commitment the bank made last year to support Black, Hispanic and other underrepresented minority and women entrepreneurs. Bank of America last week announced $150 million in investments in 40 funds based in 21 markets across the country. “It takes time to put that infrastructure in place. Now, we’re starting to see those commitments and those deployments starting to happen,” Anku said. “We know at the family office level and at the corporate level that there is an appetite and a hunger to be able to deploy this capital. There is a movement that’s happening in the country.” A November 2020 report by Morgan Stanley illustrates that movement. More than six in 10 U.S. venture capital firms that Morgan Stanley surveyed said the Black Lives Matter movement affected their investment strategy. Nearly half made changes in 2020 and more than two-thirds said they are now more likely to invest more in companies with diverse founders, according to the Morgan Stanley report.

Feeding the pipeline The New Community Transformation Fund ultimately hopes to raise $25 million through 2021 to support minority entrepreneurs. “With the momentum that’s happening nationally, with all of the excitement that’s happening locally, we feel we’ll be able to accomplish that goal by year’s end,” Anku said. Once the venture capital fund hits $10 million in committed

investors, it will begin pursuing investments in growing, secondstage companies that are owned by people of color and in need of growth capital. The fund also will invest in companies that are going through transition as owners retire and a person of color is acquiring the business. The fund could make its initial investments in late summer, all in locally-owned companies, said Managing Partner Skot Welch. “We’re going to start at home with our first three investments,” Welch said. Investments will range from $250,000 to $500,000 per company. The fund will target investments in companies involved in advanced manufacturing, food and agribusiness, e-commerce, information, financial and sports technology, or life sciences. Companies outside of West Michigan that receive an investment will have to move “the majority, if not all of their operations” to the region “because we want them to be of the landscape of West Michigan (and) to be involved,” Welch said. Anku said the fund that he runs has invested in more than a dozen companies led by people of color and “I can tell you that the pipeline is robust with potential deals with incredible companies across different industries.” “We’re very comfortable with that pipeline and feel we have some great companies outside of West Michigan that will relocate,” Anku said.

Filling a gap Citing a need to focus more on diversity and inclusion, regional economic development firm The Right Place Inc. spearheaded the formation of the New Community Transformation Fund early last year with $200,000 in seed money apiece from Bank of America and the Consumers Energy Foundation to cover startup costs. DTE Energy has since given $100,000 in seed money. The founders publicly announced the creation of the fund a year ago and began fundraising last spring. “We’ve come a long way,” The Right Place CEO Birgit Klohs said. “One thing I learned from Kwame is there’s a lot of venture fund money floating around for young, white kids coming out

of Stanford, but not so much for young people of color. It has really strengthened that this fund is a really, really important thing to bring about in Western Michigan.” Studies have repeatedly shown that only a small percentage of the venture capital invested in the U.S. annually goes to startups owned or led by a female or racial minority. Of the more than $2.1 billion in venture capital investments in 71 Michigan startups in 2019, less than 5 percent was for companies led by racial minorities.

Gearing up S i n c e f o r m i n g , t h e Ne w Community Transformation Fund secured investments of $1 million from Mercantile Bank Corp., Spectrum Health Ventures and most recently, Consumers Energy Foundation. Add it iona l i nvest ments ca me i n du ring the year from Autocam Medical, DTE Energy, Gentex Corp., Greenville Partners/ Meijer Inc., Horizon Bank, Rockford Construction Co. Inc., Wolverine Building Group and Wolverine Gas & Oil Co. As they prepare for making the fund’s first investments, partners this year plan to hire administrative staff such as a managing director, financial analysts and other positions. The fund should have a management team in place by April, Welch said. The founders also will consider extending the New Community Transformation Fund’s model across the U.S. “The nation is watching us,” Welch said. “We haven’t even made our first investment, but we’re getting requests to help create a New Community Transformation Fund in major cities.” Welch holds the vision that the fund can drive “a further mosaic landscape within West Michigan and to make sure that we are no longer a flyover city for entrepreneurs of color.” “We want to be the place where people say, ‘You’ve got to go to West Michigan because t h at ’s w her e s ome r e a l l y important work is occurring,’” he said. Visit www.mibiz.com

COURTESY PHOTO

Northpointe Bank records ‘banner year’ in 2020 amid low interest rates By MARK SANCHEZ | MiBiz msanchez@mibiz.com

he $91 million Northpointe Bancshares Inc. netted in a private stock placement will help support further growth through mid-decade. Grand Rapids-based Northpointe had a record year in 2020 and roughly doubled the amount of mortgages written annually in a typical year as low interest rates drove home sales and refinancings. Primarily a mortgage lender, Northpointe Bank wrote “just shy” of $15 billion in mortgages in 2020, roughly split between home purchases and homeowners that refinanced existing mortgages, said President and CEO Charles Williams. Northpointe’s assets have grown in recent years from about $700 million to nearly $3.5 billion, Williams said. “We’ve had tremendous growth over the last couple of years,” said Williams, calling 2020 a “banner year because of the low interest Williams rate environment.” The capital raised through the private share placement with institutional investors that closed at the end of December should take Northpointe through 2025, Williams said. “We were in the right place at the right time in 2020, and we think that that’s going to continue for the foreseeable future,” he said. “Business has been very robust and the capital raise is going to allow us to be able to continue that for years to come.” Piper Sandler & Co. and Performance Trust Capital Partners LLC served as placement agents for Northpointe Bank. Northpointe, which last raised capital in 2019 through a $25 million private placement, has about 55 loan production offices in 24 states, plus a single full-service bank office in Grand Rapids, with a total workforce of about 1,100 people. Northpointe Bancshares in 2018 acquired Home Point Financial in Ann Arbor, a subsidia r y of Home Point Capita l LP. The deal included acquiring mortgage offices that were primarily in Ohio, New Jersey, Pennsylvania, Rhode Island and Connecticut and extended Northpointe Bank’s residential lending business into the northeastern U.S. Visit www.mibiz.com

The bank today writes mortgages in all 50 states, Williams said. Should the right opportunity arise that makes sense and with “quality” mortgage lenders, Northpointe would consider opening additional offices, although new locations are not in the bank’s plans, he said. “The plan is to continue measured, quality growth,” Williams said. “Quality is far more important to us than quantity.” Outlooks project the housing market across the U.S. to remain strong through 2021 and interest rates to stay low, driving business for mortgage lenders such as Northpointe. Realtor.com predicts existing home sales in the U.S. to grow 7 percent this year and single-family housing increasing 9 percent. Mortgage rates w ill average 3.2 percent through 2021, according to a housing forecast Realtor.com issued in early December. The average price of a new home should increase 5.7 percent in 2021, after rising 7 percent in 2020. In the Grand Rapids-area housing market, Realtor.com predicts existing home sales to grow 9 percent this year and prices to increase 3.6 percent over 2020. Colliers International noted in a recent real estate outlook that residential was among the market sectors that was successful through the pandemic. The Grand Rapids-area housing market should remain tight through 2021. “Locally, a lot of the easy, low-hanging fruit from a development side has been picked through already. We have some struggles ahead of us in delivering enough housing,” Matt Jones, an associate vice president at Colliers’ West Michigan office, said during a virtual forecast event last month. Comerica Inc.’s most recent U.S. economic outlook issued Jan. 11 projects an 8.7-percent increase in housing starts in 2021 and for the sales of existing single-family homes to grow more than 18 percent to 6 million. Interest rates for 30-year, fixed-rate mortgages should average 2.68 percent in 2021, according to Comerica’s forecast. The Nationa l Association of Rea ltors forecasts home prices to increase 8 percent nationwide and 30-year mortgage rates to average 3 percent this year and 3.25 percent in 2022.

IN THE NEXT ISSUE:

THE WINNERS 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 West Michigan 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

In the Feb. 15, 2021 print issue, MiBiz will be featuring winners and honorees in a special editorial section. 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.

Contact MiBiz today for advertising opportunites:

sales@mibiz.com • (616) 608-6170

MiBiz Staff Writer Kate Carlson contributed to this story. MiBiz / FEBRUARY 1, 2021

Selma Tucker is passionate about safe and affordable housing. He believes that if a family can’t access the housing market, where most middle-class wealth is held, it will be difficult for them to find stability and prosper. Selma regularly donates to Grand Rapids Community Foundation. He recently named the organization a beneficiary of his life insurance policy. His planned gift will help ensure the Community Foundation’s work to improve the lives of all people in the community continues well into the future. 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

FEBRUARY 1, 2021 / MiBiz

L E AV E YO U R M A R K Visit www.mibiz.com

NONPROFIT ORGANIZATIONS

GVSU trends report highlights disruptive forces in philanthropy By MARLA MILLER | MiBiz mmiller@mibiz.com

hrough the pandemicrelated turmoil of 2020, many nonprofit organizations shifted focus or practices while others shined a light on longstanding disparities around health outcomes, racial equality and economic opportunity for people of color, researchers say. The findings are included in the “11 trends in Philanthropy for 2021” report that was issued last month by Grand Valley State University’s Dorothy A. Johnson Center for Philanthropy. The report, now in its fifth year, shares insights across 11 essays on emerging issues i n t he ph i la nthropy sector. “One of the things that strikes us every year as we’re writing this is how interconnected they all are,” said Johnson Behrens Center Executive D i r e c t o r Te r i Behrens. “That is what led us to write that first (essay), ‘Dynamic and disruptive forces are increasingly at work.’” Some of those Martin key forces that are driving change and disruption include more concentrated wealth, increasing giving mechanisms and an increasing focus on diversity, equity and inclusion in philanthropy. The report tackles timely and heavy-hitting topics related to social justice funding, trauma-informed philanthropy, foundation payout rates, the overlapping roles of government and philanthropy, the globalization of philanthropy, philanthropy and reparations, and the nonprofit sector’s role in building public trust. “The sector is roiling around all these changes that are interacting with each other and creating real disruptions,” Behrens said. “If you read through the 11 trends, you can really see connections and how they all connect to each other.”

Philanthropy, business, government overlap For Behrens, one of the most interesting trends relates to the erosion of public trust in governmental institutions, and the nonprofit sector’s role in fostering public trust. “The nonprofit sector has more trust than government and business Visit www.mibiz.com

and has the opportunity to step up and really work toward building public trust in each other and our public institutions,” she said. Another trend to watch is the role of philanthropy and government overlapping in the public sphere, which is increasingly complex as foundations and donors step in to fill funding shortfalls and gaps in services. The blurring of business and philanthropy earned mention in the 2019 trends report and continues to accelerate at a rapid pace. The trend is evolving in several ways, including entrepreneurs and startups taking on social missions and a greater commitment to charitable giving and social responsibility. “There are a lot of different ways businesses are saying, ‘It’s not all about me and maximizing my profits, but how do I contribute to the social good?’” Behrens said.

But there is growing criticism among social justice leaders, scholars and sector critics about foundation payout rates, the distribution of grant dollars to Black, Indigenous, People of Color (BIPOC)-led organizations, and the restrictions placed on grantees. An essay that Behrens co-authored with Michael Layton, GVSU’s W.K. Kellogg Community Philanthropy Chair, notes the most intense debates center around how much funding is being distributed. More than $1 trillion is sitting in private foundations, and another $120 billion is in donor-advised funds. The sector also faces tough questions around who benefits the most from philanthropy, why BIPOC organizations have long been overlooked, and cumbersome grant requirements. Many leading foundations, including the W.K. Kellogg Foundation, are beginning to question and address racial inequity in their grantmaking practices. That includes how the money is Growth of social distributed, the application process, justice funding reporting requirements, and other Economic disparities among people guidelines that often exclude smaller, of color and racial injustice boiled less established, and minority-led over in 2020, prompting more grassorganizations. roots efforts to support social justice “One of the things we’re certainly causes. In an essay accompanying starting to see more research on is how the report, the authors note there has much money goes to BIPOC organizabeen an increase in smaller donations tions,” Behrens said. “We don’t have a by ordinary citizens to combat social lot of good national data.” and racial injustice. Existing research shows that orgaLarger donors, including many nizations led by people of color don’t foundations, also instihave the connections tuted policy changes to or the history of net“decolonize” wealth and works to get access to NONPROFITS give nonprofits more donors. They tend to NEWS freedom to use those be smaller, informal — Sponsored by: funds how they see fit. groups that get started GRAND RAPIDS Funders have loosened to serve the needs of a COMMUNITY restrictions on their local community. FOUNDATION grants and their grant“Some of those orgaees, and there seems to nizations that can have be a shift toward advocacy and efforts the most impact on a local level have to change public policy. a hard time getting access to funding,” However, even with less restrictive Behrens said. gifts, the authors warn other complications could arise, including the risk Philanthropy and of movement capture. This involves government pressure that funders put on nonprofits around funding priorities and programs The relationship between government that shy away from activism and emphaand philanthropy has always been fluid size self-help and self-actualization. and complex, but the boundaries are For instance, the Black Lives growing increasingly blurry. An essay Matter Global Network Foundation in the Johnson Center report explores began to formalize its structure in the interplay between the two and the 2020. It remains to be seen whether growing reliance on philanthropy to large funders will continue to give step in when government falls short. freely or tighten the guidelines around In Michigan, the Detroit Grand unrestricted resources for social jusBargain, which saw foundations tice causes and movements. and donors step up to fund pensions for retirees and save the Detroit Institute of Arts, is one example. And Where the money flows the Foundation for Excellence in The power dynamics at play within phiKalamazoo involves two local donors lanthropy — and where and how much aiming to raise $500 million for an money flows to nonprofits — isn’t new. endowment that would keep city tax

The 11 essays included in Grand Valley State University’s recent report, “11 Trends in Philanthropy for 2021.” COURTESY ILLUSTRATION rates stable and support municipal programs. The fundamental question of who should do what in a democracy stood out to author Tory Martin, Johnson Center director of communications and engagement, during her research. “That’s a broad question we have wrestled with for over 200 years,” she said. The nonprofit sector’s response to the COVID-19 pandemic brought the issue front and center. After a lackluster coordinated federal response for testing, contact tracing and personal protective equipment distribution, foundations across the country offered financial assistance and worked with nonprofit partners to deliver critical services. “These blurring sector-boundary questions are really dominant forces going on in the field that are pushing us all to define what is the role of philanthropy, what is the scope of philanthropy and what should we expect of ourselves,” Martin said. “The systemic problems we face as a country will only be solved together, by cross-sector and cross-community partnerships.”

Using the report Nonprofits and others in philanthropy can use the report to “think about how it might impact them and spark some ideas about how they can do their work differently,” Behrens said. While past reports highlighted more specific trends, the 2021 report deliberately examined broader themes, Martin said. In addition, cross-sector partnerships and crosscommunity partnerships rely on having good data, which is another trend highlighted in the report. “For nonprofits, it’s very much about understanding the skills, resources and movements that they need to be

“These blurring sectorboundary questions are really dominant forces going on in the field that are pushing us all to define what is the role of philanthropy, what is the scope of philanthropy, and what should we expect of ourselves.” — TORY MARTIN Director of Communications and Engagement, Johnson Center for Philanthropy

successful,” Martin said. “A lot of these trends talk about what is essential, cutting edge and what you need to be good about, like data. If you can use data effectively, you are ahead of the curve.” Western Michigan Planned Giving Group hosted two presentations by Johnson Center staff in 2020, and uses the annual trends report to guide and inform members’ work. The professional membership group includes development executives and nonprofit fundraisers as well as CPAs, lawyers and trust officers involved in charitable gift planning. “Their work really does help guide some of our work and helps us just be aware of the situations that our donors are facing,” said Jennifer Yelovina, vice president of Western Michigan Planned Giving Group. “It really provides a great overlay for the environment. It helps inform our practice with regard to gift planning and development strategies, keeping in mind the larger perspective.” MiBiz / FEBRUARY 1, 2021

New Family Business Alliance leader discusses ongoing research, priorities A Q&A with Robin Burns, Director, Family Business Alliance

obin Burns took over as head of the Grand Rapids-based Family Business Alliance in November after nearly 12 years as marketing director at the Rhoades McKee law firm in Grand Rapids. The FBA was created in 2006 as a partnership with the Grand Rapids Area Chamber of Commerce and Grand Valley State University and later reorganized as a 501(c)(6) nonprofit. With more than 150 member companies, the FBA’s mission is to ensure family-owned businesses in the region are passed down to future generations. Burns spoke with MiBiz about what’s next for the organization.

What are your priorities since taking over as director of the Family Business Alliance? We really have three priorities. One is to seek greater impact for our current members, and we recently completed a survey understanding the needs of the membership, its demographics and how we can create greater value for members with the services we provide. We know family business is such an integral part of the West Michigan business community and culture. We certainly have a priority to reach more members and to serve more members.

Can you discuss FBA’s research goals that brought it in alignment with GVSU? We work in partnership to some degree with GVSU through the Family Owned Business Institute, and (they) have a board member director that sits on our board as well. We’re putting on a joint event in April about avoiding the entitlement mentality. We try to maximize the education and resources we’re putting out to family businesses in the community.

What do you mean by avoiding the entitlement mentality? The Family Business Alliance really strives to create educational content and programming to serve its members. In our survey, we found 57 percent of our current family business members are in a stage where they’re working with multiple generations in business together. Sixteen percent are introducing the next generation into the business. Our leadership series in 2021 is three-part: developing an owner’s mindset and how that can shape the value of the organization; how do you avoid entitlement as owners; and (finding) the leader in all of us. That’s speaking to regardless of where you’re at in the business, there’s a leader in all of us and we want to harness those skills for the organization and the community.

How much is succession planning a part of the FBA’s work? That’s the ultimate goal of the FBA: to provide people, resources, content and connections that can help a family business prosper and develop to the next generation. In a recent study by Deloitte, only 41 percent felt they were actually competent in their plans for succession. Studies have shown 30 percent of businesses really only get to the second generation, and survival into the third generation is 12 percent. Helping these families navigate the family and the business issues to maximize a succession plan is where we strive to make an impact and how we measure it.

What trends are emerging among West Michigan family owned businesses, particularly over the past year? That’s one of our greatest challenges: figuring out how the pandemic shapes the family businesses in the community going forward. We know from other studies that family businesses typically will not lay off their employees. They’ll take less compensation, elect to not take bonuses themselves and trim other areas to maintain their staff. We know that family businesses are really seeking to strive to be more innovative and harness technology and take more risks for growth and diversification. We know so many positives about family businesses, but how that will play out post-pandemic we’re still trying to evaluate.

What lessons are being learned about your membership during the pandemic? We’ve been fortunate that our membership has remained strong throughout the pandemic. Our organization is more than 50 percent manufacturing based, followed by business and professional services. Many of our family organizations are taking advantage of funding and grants available from the government. At this point, we’re thankful our membership is still engaged.

What are your members’ biggest challenges ahead? Their strategies for growth and diversification, strategic planning, attracting and retaining talent, mergers and acquisitions, and multi-generational workforces and working together with families. I think family businesses are really trying to position themselves for growth and diversification, and that will certainly continue to impact our West Michigan community. Interview conducted and condensed by Andy Balaskovitz. Courtesy photo.

FEBRUARY 1, 2021 / MiBiz

IN THE NEWS M&A

n Lansing-based Air Lift Co., a manufacturer of air suspension systems, has acquired Flo Airride Mfg. LLC, a Temecula, Calif.-based manufacturer of air tanks used for aftermarket truck modifications intended to lower vehicles. The deal also included the rights to Slam’d Magazine, a publication serving the niche automotive enthusiast community, according to a statement. Under the terms of the deal, Flo Airride’s manufacturing will move from a facility in Oklahoma to Air Lift’s operations in Lansing. Former Flo Airride owner and founder Mike Alexander also joined Air Lift as performance brand manager. The acquisition enables Air Lift to deepen its market presence in the lowered vehicle segment, President Kevin Mehigh said in a statement. Terms of the deal were not disclosed. n London, U.K.-based Prudential plc plans to spinoff Lansing-based Jackson Financial Inc., which includes Jackson National Life Insurance Co., also in Lansing, and global financial firm PPM America Inc. in Chicago. Prudential said the spinoff would separate Jackson earlier than a planned minority initial public offering. Under the spinoff, subject to shareholder and regulatory approvals, Prudential would retain a 19.9-percent stake in Jackson Financial that it intends to divest over time. After the separation, Jackson expects to list on the New York Stock Exchange using the ticker “JXN.” Prudential also appointed Steven Kandarian, the former CEO of MetLife, as non-executive chair of Jackson’s board of directors. n Marshall Excelsior Co., a manufacturer of engineered flow control products based in Marshall in south-central Michigan, acquired the assets of Tampa, Fla.-based CPC-Cryolab and Rockwood Swendeman, a pair of brands owned by Burlington, Mass.-based CIRCOR International Inc. (NYSE: CIR). CPC-Cryolab manufactures liquid hydrogen and liquid helium valves, while Rockwood Swendeman makes cryogenic safety relief valves. The deal allows Marshall Excelsior to expand its capabilities into the cryogenics market, according to a statement. Terms of the transaction were not disclosed. Marshall Excelsior Co. is a portfolio company of Harbour Group, a St. Louis, Mo.-based multinational private equity firm. n Ambler, Pa.-based Bradford White Corp., a manufacturer of water and space heating equipment for a range of sectors that operates plants in Middleville and Niles, acquired Keltech Inc. from the Menomonee Falls, Wis.-based Bradley Corp., according to a statement. Based in Delton in Barry County, Keltech manufactures commercial and industrial tankless electric water heaters. Along with the deal, Bradford White also plans to begin supplying Bradley Corp. with tankless electric water heaters for its emergency eye wash and safety shower stations. Terms of the deal were not disclosed. n Feyen Zylstra LLC, a Grand Rapids-based electrical services and industrial technology firm, has expanded its footprint into North Carolina with the acquisition of Dynics Services Group, a division of Ann Arbor-based Dynics Inc. Dynics specializes in industrial grade computer hardware, visualization software, network security, network monitoring and software defined networking solutions. Both Feyen Zylstra and Dynics have maintained a working relationship. Terms of the deal, which was finalized on Jan. 6, were not disclosed.

EXPANSION

n The newly rebranded Bodwé Professional Services Group, a division of Mno-Bmadsen, the Dowagiac-based non-gaming investment arm of the Pokagon Band of Potawatomi Indians, spun off Steelhead Engineering Co. from Kalamazoo-based Seven Generations Architecture + Engineering. Steelhead is a provider

of mechanical, electrical, plumbing and engineering services. The company employs eight engineers and recently moved into new office space at 259 E. Michigan Ave. in Kalamazoo, aided by a grant from the Michigan Economic Development Corp. As well, Bodwé partnered with Scott Moore y Medina, the founder of Tulsa, Okla.-based architecture and design firm Blue Star Integrative Studio, to create a new Michigan-registered company under the same name. Moore y Medina brought his portfolio and brand with him and joined the new entity. Bodwé was advised on the deal by Grand Rapidsbased law firm Varnum LLP. The new company expands Bodwé’s geographic reach and talent pipeline. n Grand Haven-based UV Angel has partnered with select McDonald’s locations in Dallas, Houston and Chicago to deploy its UV Angel Clean Air product, which uses ultraviolet light technology to kill off pathogens on surfaces and in the air. Another product, called Adapt, mounts directly to high touch areas like touch screens and keyboards, using the ultraviolet rays to sanitize those surfaces.

HEALTH CARE

n Metro Health – University of Michigan Health opened a new outpatient center on East Beltline Avenue just north of Lake Drive in East Grand Rapids. Metro Health Beltline replaces a smaller clinic on Cascade Road and includes heart and vascular specialists. At 30,500 square feet, the office is Metro Health’s largest primary care site and has the capacity to accommodate up to 20 providers and care for 400 to 500 patients a day. The center houses family practice, sports and internal medicine, behavioral health and diabetes education, Xray and a lab, adult and pediatric heart, and vascular specialists and services. n Mercy Health opened a new $19 million outpatient medical center in Norton Shores for primary care physicians; behavioral health; X-ray; labs; Lakeshore Laser and Aesthetics; and physical, occupational and speech therapy. A pharmacy and urgent care center will open at a later date. The site consolidated three primary care physician practices — Harborwood Family Medicine, Harbour Pointe and Norton Family Practice — into one location. Mercy Health opened similar facilities in North Muskegon and Hudsonville in 2018. The Norton Shores facility was designed by Brighton-based Lindhout Associates Architects P.C. Holland-based EV Construction served as the general contractor.

BANKING

n Mercantile Bank of Michigan donated a former branch office in downtown Ionia to the Ionia Community Library. Ownership of the building, a two-story neoclassical structure built in 1913 with a temple front and two-story limestone columns, will transfer in March. Mercantile Bank continues to operate two Ionia locations.

NONPROFIT

n The Steelcase Foundation named Daniel Williams as president. Williams starts at the foundation on Feb. 22. He most recently served as president and CEO of the West Michigan Center for Arts and Technology in Grand Rapids. The Steelcase Foundation is an endowed foundation independent from Steelcase Inc. that the company’s founders and original directors formed in 1951. The foundation supports projects that “drive systemic change in our communities” and awarded more than $5 million in grants in the last fiscal year. Visit www.mibiz.com

UPCOMING ISSUES

2.15.2021

Work From Home M&A, Deals & Dealmakers Awards Contract Deadline: 2.3.2021

3.1.2021

Education & Talent Development Contract Deadline: 2.17.2021

3.15.2021

Real Estate: Office

Contract Deadline: 3.3.2021

3.29.2021

Utilities & Energy M&A Roundtable

Contract Deadline: 3.17.2021 New political boundaries to emerge in 2021

Jane Ghosh takes helm at Discover Kalamazoo

PAGE 16

PAGE 22

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

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

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

www.mibiz.com

HELP ON THE WAY More flexibility comes with latest round of PPP loans

By KATE CARLSON | MiBiz kcarlson@mibiz.com

Kalsec earns B Corp status JANUARY 4, 2021 • VOL. 33/NO. 6 • $3.00

LET THE GAMES BEGIN

PAGE 4 OCTOBER 26, 2020 • VOL. 33/NO. 1 • $3.00

Managed service providers play key advisory role in shift to work-from-home By JAYSON BUSSA | MiBiz jbussa@mibiz.com

ichard Reiffer and his staff at Grand Rapids-based Fusion IT LLC tend to take a proactive approach when it comes to advising clients on digital strategies. So when COVID-19 transitioned into a full-blown pandemic in early March, the team was already telling the midsize companies it works with to start facilitating effective remote work. Fusion IT, which works with businesses Reiffer on an ongoing basis as a managed service provider (MSP), even developed white papers to serve as a reference for effective work from home strategies. “We started warning our clients early and most of them acted on it to get equipment if they didn’t already have equipment capable of running their remote work,” said Reiffer, the company’s vice president of strategic initiatives. “For a while there, the backlog to get laptops was about six months.” The ongoing pandemic has ushered in a tidal wave of remote working for companies that were either forced to send workers home or did it out of precaution. Many of these companies’ MSPs have become the brain trust for workfrom-home setups and strategies.

Uneven footing With remote work a growing trend before the COVID-19 pandemic, many companies already had a rough infrastructure in place to make the transition smoother, Reiffer said. Still, some businesses had to swiftly make up ground while some of it was dictated by their respective industries. See WORK FROM HOME on page 12

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

competition among cities, and generate opportunity for a wider umbrella that includes equity as a key priority in economic development. “Every region in the world is wrestling with what’s next,” said Thelen, who’s planning his move back to Michigan from Denver, where he’s currently senior vice president of Downtown Denver Partnership Inc., the city’s Thelen economic development SEE agency. PAGE 4“The markets that can come together and move forward together are going to be winning markets and be able to leapfrog some of the competition.” During previous recessions, Thelen said Denver “doubled down, invested in itself,” which allowed it to “accelerate out of recession and bypass that competition.” He’s leaving a “hyper growth market” in the Mile High City that’s attracted investments particularly from large tech firms such as Google, Twitter and Facebook. “Virtually any tech company you can imagine has put up a sizable outpost in Denver,” Thelen said. “It’s a healthy reminder that the product of a region matters, and talent and placemaking drives business decisions. There’s been a lot of good movement in that area in West Michigan in the last 10-15 years. We’ve got to continue that.”

See ONLINE GAMING on page 3

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

million Stages Survival Grant Program beginning at 9 a.m. on Jan. 21. The applications window for Stages grants closes at noon on Jan. 28. The small window for the Small Business Survival Grant Program stems from an expectation that demand will easily outstrip available funding

Natalia Kovicak takes helm at GR Econ Club

Panel: Rural broadband development should mirror electric gridlabor build-out Trade, shortage among top ag priorities this year

The issue has become increasingly important during the pandemic as companies conduct business v irtua lly and students learn ichigan and the nation need the same remotely, Klohs said. The pandemic brought kind of concerted effort to deploy greater awareness to the issue and how in some broadband internet access as 90 years areas the digital divide “is more like the Grand ago when America set out to electrify Canyon,” Klohs said. PAGE 11 rural areas following the Great Depression, eco“Our children shouldn’t be sitting in cars in the nomic developers say. parking lot of a restaurant to get Wi-Fi so they can The COVID-19 pandemic has heightened the do their homework. I think that’s just Third World,” need to fix a lack of affordable high-speed internet Klohs said. See MEDA on page 3 access in some markets of the state that economic By KATE CARLSON | MiBiz hold promise for the city’s transforkcarlson@mibiz.com mation. The projects also involve a variety of local interests and invesMANISTEE — The lakeshore city tors, including regional developers, of just more than 6,000 people is the local American Indian tribe and seeing multiple new downtown a nearby community college. developments that local officials “There are a lot of pieces when and investors say are critical for you’re transforming a downtown,” reinvigorating empty storefronts, said Scott Ward, president of West diversification and emerging betShore Community College, based ter off after the pandemic. about 20 miles south in Scottville. In Manistee, two planned The college and community A vision for the Spirit of the Woods Manistee Gateway Project prehotels, a larger downtown “gategroups have been instrumental By KATE CARLSON | way,” MiBizand a new to —education such housing, sented to city officials in September. COURTESY RENDERING centerincluding See MANISTEE on page 9 kcarlson@mibiz.com high-density rentals. The Lansing-based Michiest Michigan citgan Municipal League has P E R I O D I C A L ies are examinstepped in to help local goving new poliernments solve their housing cies to expand puzzle. The MML plans to issue affordable housing and create guidance in early 2021 on code a supportive environment for reform that can help increase developers as studies show an affordable housing units. ongoing need for more units. That includes incentivizing The renewed discussions affordable housing developers this year among city officials through tools like brownfield PAGES 10-11 in Grand Rapids, Holland, credits, streamlining zoning SEE PAGE 13 Kalamazoo and Grand Haven codes and a refined applicacome as the COVID-19 pantion process. demic has driven high unem“What happens is you have Drew Phillippy is president of Grand Rapids-based Purple East, which ployment and financial strain, developers sinking a lot of recently emerged from bankruptcy under a new law meant to help small raising concern among offimoney into the process and businesses. cials who say it could exacerit makes it harder for them to bate the need for affordable build housing developments housing. affordably,” said MML Policy Cities are attacking the Research Director Shanna problem in a variety of ways, Draheim. including revamping outdated Meanwhile, studies conzoning codes to make it eastinue to show a need for affordier for developers to include able housing throughout the affordability in housing develregion. A recent Housing Next opments, as well as prioritizing study shows at least 5,340 more affordable or mixed-use housrental units and 3,548 more For small businesses facing bankruptcy, the new ing for incentive tools such as owner-occupied units are brownfield credits. needed in the next five years federal Small Business Reorganization Act is proving Despite the effort being in Grand Rapids to meet housto be a cost-effective and timely lifeline. A Grand made to add more housing ing demand. Housing North, a Rapids retailer offers an early test case. SEE PAGE 14 stock at varying price points, nonprofit that spans 10 counhousing advocates and local ties in the northwestern Lower planners are still confronting Peninsula, showed last year STORY BY ANDY BALASKOVITZ // PHOTO BY KATY BATDORFF a stigma associated with — the region would need about See HOUSING on page 11 and community opposition

he new round of federal Paycheck Protection Program loans includes a number of changes from the prior funding intended to aid small businesses hurting from the COVID-19 pandemic. As with the first round last spring and summer, borrowers working through a lender can again use PPP funding from the U.S. Small Business Administration to pay operating expenses. The new $284 billion PPP round extends eligible expenses to property damage incurred in last summer’s civil unrest that was not covered by insurance, supplier costs and worker protection expenditures. As well, eligible expenses now include costs to adapt to the pandemic such as facility modifications, software and cloud computing and delivery services. See PPP LOANS on page 12

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

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

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

New Priority Health leader on accelerating change in health care

PAGE 7

Cybersecurity standards to reshape defense manufacturing

KALAMAZOO — A new funding tool recently signed into law is intended to help finance an event center in downtown Kalamazoo, but it’s unclear if there is a desire or solid plans to move forward with the venue. House Bill 4816 was sponsored by former state Rep. Brandt Iden, R-Oshtemo Township, and was signed into law by Gov. Gretchen Whitmer on Dec. 30. The Regional Event Center Financing Act creates a financing program for potential venue projects in Kalamazoo, Ottawa, Muskegon, Ingham and Washtenaw counties. “The impetus for this legislation was basically to allow access to another economic PAGE 22 development tool that larger communities have like Grand SERVING WESTERN MICHIGAN BUSINESS 1988 www.mibiz.com Rapids and Detroit,” IdenSINCE told MiBiz. “I have always supported an event center downtown because I believe that Iden if urban core centers don’t grow, then they have a tendency to just die out.” Iden was term-limited out of office at the end of 2020. He served on the Kalamazoo County Board of By JAYSON BUSSA | MiBiz Commissioners for two years before he was elected jbussa@mibiz.com to the state House of Representatives in 2014. “The bettors event center onlycasino ever discussed ILLUSTRATION: KAYLEE VAN TUINEN ports and was online gamers found inthemselves concept. There were formalized sitting onnever the sidelines in plans Michigan for orall a formal agreement about thewas sizeaand scope of hope of 2020, even when there glimmer ofthat the project,” said. “It’s always been pre- before the stateIden would launch online gaming liminarily the year discussed was out. as a high-level concept for the community.” However, people seeking to place wagers from computThedevices new legislation requires center weeks. ers and mobile can likely do soan inevent the coming programthe to describe theisproposed “We’refinancing ready when industry ready,”size, Michigan location,Board cost and financing structureDirector of the proGaming Control (MGCB) Executive Rick Kalm By MARK SANCHEZ | MiBiz has a |relatively posed facility, and to specify an assessment to be By ANDY BALASKOVITZ MiBiz short applicatold MiBiz. tion window based on previous the program, which can’t exceed abalaskovitz@mibiz.com That’slevied whereunder this high-profile issue stands at the4 start of msanchez@mibiz.com demand. percent county-wide hotel room charges. The period 2021, weeks afterofstate officials waived a 15-day review he latest stateRAPIDS effort — Randy Applications for the $55 would effectively be a small increaselicenses GRAND Thelen describes the milon sportsassessment betting rules and then issued provisional to provide financial Michigan to a county’s hotel lodging tax.just eight days later. The COVID-19 pandemiclion as an “inflectionSmall point”Business that for 15 different platform providers aid tocan Michigan small Survival Grant Program open Thethe financing defines an event center as a shift the course of economic development in at actions paved way foract online gambling to go live. businesses and enter9 a.m. on Jan 19. The application convention hall,awaiting auditorium, stadium, music— hall, West Michigan. The MGCB is now each platform including tainmentThelen, venues who that wasprocess closes noonas onthe Jan. 22. PAGE sites 26 like DraftKings and FanDuel Sportsbook — to selected last at month popular See KALAMAZOO EVENT CENTER on page 3 of their are ailing from thenew COVID-19 panand live music president and CEOEntertainment of The Right Place Inc., undergo independent testing to ensure the integrity restrictions venues can apply formore the $3.5 says the challenges of 2020 will likely create games. This extensive www.mibiz.com vetting ensures that platforms are demic and resulting

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

INSIDE:

Putting pieces together in Manistee Industry 4.0 Two hotels, downtown education center lock in community investments in anticipation of post-pandemic recovery, local officials say

West Michigan cities weigh policy changes to bolster affordable housing

Telehealth soars during pandemic, sparking new health coverage options

INSIDE:

M&A Deals in Review: 2020

Contract Deadline: 3.31.2021

4.26.2021

Culture & Generational Change Contract Deadline: 4.14.2021

5.10.2021

Diversity/Equity/Inclusion Commercial Lending Quarterly: Commercial Real Estate Lending Update Contract Deadline: 4.28.2021

5.24.2021

Food Systems

Contract Deadline: 5.12.2021

6.7.2021

Real Estate: Multifamily Contract Deadline: 5.26.2021

INSIDE:

Mergers & Acquisitions PAGE 7

Drinking Economy Craft Beverage Roundtable

See THELEN on page 12

New chapter for Chapter 11

Solar industry on edge

4.12.2021

SEE PAGE 16

6.21.2021

Transportation

Contract Deadline: 6.9.2021

7.5.2021

Industry 4.0: Automation Contract Deadline: 6.23.2021

sales@mibiz.com | editor@mibiz.com 616-608-6170

Visit www.mibiz.com

MiBiz / FEBRUARY 1, 2021

Where today’s transactions meet tomorrow’s goals Proven advice and solutions for moving ahead. Our 2020 Capital Markets clients can tell you: Successfully navigating change and challenges takes experience and know-how. Now, more than ever, experience matters. Let us put our deep industry expertise and sophisticated banking solutions to work for your company to help you reach your goals and build your future.

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