MiBiz February 15, 2021 print edition by MiBiz

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DeVos-backed PE fund to support Michigan companies

Pop-up concepts, staffing challenges, uncertain demand fill chefs’ outlook

Family office taps Auxo Investment Partners to lead Michigan Opportunity Fund By MARK SANCHEZ | MiBiz msanchez@mibiz.com GRAND RAPIDS — A West Michigan capital investment fund that involves the family office for Doug and Maria DeVos wants to make longterm investments across a variety of industries with a goal of preserving and growing local companies and jobs. The DeVoses’ Continuum Ventures LLC has partnered with Grand Rapids-based Auxo

Investment Partners to manage the new Michigan Opportunity Fund, whose early investors include businessman and auto racing icon Roger Penske. Among the fund’s investment targets are Michigan-based family-owned companies whose owners are ready to retire and lack a next generation to take over. The Michigan Opportunity Fund will make majority and minority investments in small and mid-sized companies across the state. Investments will occur across the capital

spectrum, from growth and buyout capital to subordinate and distressed debt. The response from prospective investors across the state has been strong, said Doug DeVos, the co-chair of Ada-based direct-selling giant Amway Corp. Even investors who passed on the opportunity told him “I love the idea” and offered advice on creating the fund, DeVos said. “The fund has been really, really well received,” said DeVos, who sees a large demand

By KATE CARLSON | MiBiz kcarlson@mibiz.com

he COVID-19 pandemic has pushed restaurants to adapt and innovate in order to survive. As the architects of the restaurant industry, chefs across West Michigan have tested various experiments to stay afloat during the pandemic and beyond. Restrictions aimed at slowing the spread of the virus have cut down on already thin profit margins, leading many restaurants to close their doors. The Michigan Restaurant & Lodging Association predicts about 5,600 establishments will close in Michigan in the next six months. Restaurateurs have deployed a range of strategies have been since the pandemic hit, including ghost kitchens and pop-up concepts, increasing outdoor seating during colder months, and focusing on takeout and delivery. Meanwhile, some restaurant workers have taken on more duties as staff sizes shrink. Some of the trends could be temporary while others might leave their mark on the industry in a more permanent way, according to four chefs MiBiz spoke with recently.

See MICHIGAN OPPORTUNITY FUND on page 7

Equitable COVID-19 vaccine distribution in focus for West Michigan coalition By MARK SANCHEZ | MiBiz msanchez@mibiz.com

f the coalition coordinating COVID-19 vaccines in West Michigan gets judged for anything, Keith Hustak hopes it’s for how well the group equitably administers doses. The West Michigan Vaccine Clinic at DeVos Place in downtown Grand Rapids was a significant accomplishment to provide vaccines on a mass scale — it hopes to provide up to 20,000 a day. The clinic’s January opening now allows the West Michigan Vaccine Collaborative to pivot “and really start to focus” more on the equitable distribution and administration of vaccines, said Hustak, vice president for urgent care, occupational and virtual health at Spectrum Health. “We need to be judged not by DeVos Place, but by this (equity issue),” Hustak said during this month’s West Michigan Health Forum sponsored by Grand Valley State University. Hustak and others say distributing the vaccine equitably is a priority in the pandemic that has hit racial and ethnic minority communities harder than others. As they pursue that commitment, survey data has repeatedly shown racial and ethnic minorities are less likely to get vaccinated or are taking a wait-and-see approach.

Ghost kitchens An emerging trend that gained prevalence during the pandemic has been ghost kitchens — temporary pop-up concepts that a restaurant launches out of its kitchen with a separate menu. Hops at 84 East in Holland launched Frankie’s Cheesesteak Factory for a few months during lunch hours, offering cheesesteaks, fries and desserts. See FUTURE OF RESTAURANTS on page 23

See VACCINE DISPARITIES on page 3 PHOTO COURTESY OF SPECTRUM HEALTH

Grand Rapids commissioner departs Urban League of West Michigan to launch new firm

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VACCINE DISPARITIES Continued from page 1

In a monthly national poll by the Kaiser Family Foundation in January, 35 percent of Black respondents and 42 percent of Hispanic respondents said they had already gotten a vaccine or would as soon as possible. That compares to 53 percent of white respondents. Black and Hispanic residents were more likely to take a wait-and-see approach toward the vaccine — 43 percent and 37 percent, respectively — compared to 26 percent of white respondents, according to the poll.

‘Overall inequality’ Debra Furr-Holder, an epidemiology and biostatistics professor at Michigan State University, believes those findings do not reflect a hesitancy among ethnic and racial minorities to get the vaccine. Furr-Holder cites Genesee County and the Flint area where she works. The public health department has a waiting list of 30,000 people who want to get the vaccine, and the list grows by about 2,000 people per day. Data from the U.S. Centers for Disease Control and Prevention also show that African American parents generally vaccinate their children at the same rates as white parents. In COVID-19 vaccinations, “the problem is there is this disconnect” that is not about the vaccine itself, she said. “It’s more like skepticism, but it’s not skepticism of the vaccine. It’s skepticism that there’s an actual, authentic commitment from our nation and our leaders that African Americans emerge and recover from the pandemic equally as their white

counterparts,” Furr-Holder said. “It’s the overall inequality.” Data that the Michigan Task Force on Racial Disparities reported in December showed that Black residents who make up about 14 percent of the state’s population accounted for more than 40 percent of all COVID-19 cases and deaths earlier in the pandemic. Appointed by Gov. Gretchen Whitmer, the task force said that efforts during the past year to address racial disparities in health care reduced that to 9.1 percent of all cases and 5.7 percent of COVID-19 deaths as of December. Grand Rapids City Commissioner Joe Jones, who recently stepped down as CEO of the Urban League of West Michigan to start a consulting firm focused on social equity, said after the pandemic’s disproportionate harm to communities of color, the focus now is on vaccine distribution. “The lift is really to persuade or influence those communities to consider the vaccine,” Jones said. “Historically the atrocities that have taken place particularly with the African American community and the medical community are well known. That distrust has been developed, so that’s legit. To be able to communicate to the African American and Latinx communities about the need to take the vaccine — and yet respect their decision not to — weighs heavily on me.” In another example of racial disparities in the response to COVID-19, Furr-Holder points to how African American-owned businesses were the smallest recipients of federal Paycheck Protection Program loans. Given historic inequities, including in access to health care, “How is it now people are supposed to believe, ‘We care so much about you, we want you to have this very important layer of protection,’ when all of these other important layers weren’t prioritized?” Furr-Holder said.

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

CSM Group exec aims to be leader for women in construction Julie Byrne was recently appointed as president of CSM Group Inc. after working at the construction management firm for 15 years. During her time at the company, Byrne helped streamline the project start-up process by developing CSM’s pre-construction department. CSM Group is headquartered in Kalamazoo, and also has offices in Grand Rapids and Dickson, Tenn. As one of the few women to serve in a top leadership role at a construction company, Byrne hopes to set an example for others while working to increase diversity in the industry. She also Visit www.mibiz.com

plans to grow CSM’s platform on a national scale. “There is a lot to unpack being a female leading a construction company,” Byrne told MiBiz. “I’m excited about being a role model for women, not only in construction, but as a leader for women in top leadership positions of companies in general.”

Convention/Arena Authority, city advance plan for GR riverfront amphitheater The Grand Rapids-Kent County Convention/Arena Authority and the city of Grand Rapids have taken another step to advance plans for an outdoor amphitheater on riverfront property near downtown.

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Furr-Holden

Greene

Furr-Holder, who served on the Michigan Task Force on Racial Disparities, would like to see the federal government mandate and require states to demonstrate equitable distribution and administration of the vaccine. A state dashboard presently lists vaccine administration by age and gender, but as of last week lacked racial and ethnic data, although the state intends to add it soon. T h e Kent County Health Department is working to compile that kind of data “so we can better make strategies to make sure we’re addressing equity,” Dr. Nirali Bora, the department’s medical director, said during the GVSU West Michigan Health Forum.

Better partnerships The pandemic brought to the forefront health care disparities that care providers have said they commit to resolve. With the vaccine, equal access “is a huge issue,” said Dr. Andrew Jameson, director of infectious disease at Mercy Health Saint Mary’s in Grand Rapids. The health system partnered with Spectrum Health and the Kent County Health Department on the DeVos Place clinic. The West Michigan Vaccine Collaborative now looks to partner with groups such as Latinx organizations and the Grand Rapids African American Health Institute (GRAAHI) on outreach to minority communities on creating understanding of the vaccine, Hustak said.

The CAA board of directors approved an option agreement on Feb. 5 to purchase 11.6 acres of cityowned property at 201 Market Ave. SW to build an outdoor amphitheater. The Grand Rapids City Commission followed with unanimous approval of the option agreement on Feb. 9. “This agreement can be transferable, so that if at some time Grand Action or potentially another entity steps up to get engaged in the process, that’s anticipated in the agreement,” said Rich MacKeigan, regional general manager of DeVos Place and Van Andel Arena.

Whitecaps home field renamed LMCU Ballpark

West Michigan’s largest outdoor entertainment venue is rebranding following a new partnership announced this month.

Hustak

Jameson

GRAAHI, which works to address racial disparities in health care, has been partnering with care providers to learn about the vaccine “in order to provide the education within the community,” CEO Vanessa Greene told MiBiz last month. Prior survey data from the Kaiser Family Foundation indicated “we have to do a lot in terms of overcoming that fear and that history” of racial disparities in health care, she said. “We will be on the forefront of this and have ongoing conversations to inform and educate our community so people can make an informed decision, and in order to do that we have to be talking and we have to be talking often in reaching a wide spectrum of our community,” Greene said. Mercy Health Saint Mary’s now is planning to set up “pop-up” vaccine clinics, and this week was going to embed a vaccine administrator at its Clinica Santa Maria on Grandville Avenue in Grand Rapids that serves a Latinx population. The goal is to “try to meet people when they show up” for medical appointments, Jameson said last week during a media briefing. “We’re going to try to meet people where they’re at, so as they see their doctor and as they get to a situation and environment they trust, they can then schedule an appointment for a vaccine, and it may be at that time,” Jameson said. MiBiz Managing Editor Andy Balaskovitz contributed reporting for this story

Minor League Baseball club the West Michigan Whitecaps, which owns and operates what has been known as Fifth Third Ballpark for the last two decades, struck a new multiyear partnership with Lake Michigan Credit Union, which includes renaming the facility as LMCU Ballpark. With a 8,942-person capacity, the facility at 4500 W. River Drive in Comstock Park is home to more than 200 events each year, which will include Whitecaps home games beginning in its upcoming 2021 season.

Nick Hrnyak named CEO of Lacks Enterprises amid leadership changes

Tier-1 automotive supplier Lacks Enterprises Inc. recently announced several changes to its front office. The Cascade Townshipbased company named Nick

Hrnyak as the new CEO to replace Richard Lacks Jr., who has been in the role since 1999. Lacks will transition to become executive chairman of the board. Hrnyak was previously company president and made headlines as the first non-family member to hold that position in company history. He joined the company in 2002 as a divisional director of sales and moved on to manager and vice president roles. Ad d i t i o n a l l y, L a c k s announced that CFO Mike Clover would become president while controller Scott Chaudoir was promoted to the CFO role. The trio of executives combine for more than 40 years of experience with the company, which produces finish solutions for the auto industry and stands as the fourth-largest privately held employer in West Michigan.

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MANUFACTURING

Whirlpool emerges as key partner with statewide Industry 4.0 accelerator By JAYSON BUSSA | MiBiz jbussa@mibiz.com

collaboration of three Michigan-based, manufacturing technology-focused entities. Whirlpool is the only West Michigan-based s a manufacturer with a reputation corporate partner for the Industry 4.0 accelerfor skating the cutting edge of techator program, which is powered by Troy-based nology, Whirlpool Corp. leverages resource center Automation Alley, Jacksonrelationships with organizations based manufacturing technology accelerator and researchers globally to uncover Lean Rocket Lab, and Lawrence Technological emerging technology capable of transforming University’s Centrepolis Accelerator. its operations. As the only Industry 4.0 accelerator in North “I think one of the things we focused on America, and one of the few in the world, the more recently is not going after necessarily the program seeks to bring the top innovators latest technology but the technology that is from around the globe to Michigan by investtransformational in the long run,” Leonel Leal, ing in their businesses and providing coachWhirlpool’s director of global advanced manuing and resources. One of the most important facturing engineering, told MiBiz. components is establishing a foot inside the door of an impressive list of Michiganheadquartered corporate partners, which includes names like Denso Corp., Magna International Inc. and Whirlpool. When it came to finding a high-profile corporate partner for its growing ecosystem, Whirlpool stuck out. “For us, it was two things: Whirlpool is certainly already recognized as an industry leader. They’re an innovative company. Leal Sachdeva Seneff We always use their products — probably The Benton Harbor-based appliance manuevery day,” said Ken Seneff, co-founder of Lean facturer can look closer to home to find these Rocket Lab. “Second was their focus and their emerging tehcnologies thanks to an Industry willingness to look at new technology. Whirlpool, 4.0 accelerator program created last year, a from our impression, had a very strategic mindset

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Invisible AI was awarded $10,000 as part of a Michigan-based Industry 4.0 accelerator’s 2020 Pitch Night in October. The startup was named Best Manu-Tech Hardware Company of 2020. COURTESY PHOTO

for how they’re going to take their manufacturing operations into the future.”

First dibs For corporate partners, the arrangement is mutually beneficial, as Michigan-based manufacturers get first crack at innovations that range from AI-fueled technologies to machine vision. Whirlpool’s Leal said his team has carefully plotted a roadmap to operational excellence, and in doing so, is able to find the current gaps in its operation. With this knowledge, Whirlpool can lean on the Industry 4.0 accelerator program, among other resources, to find technology to fill those gaps. “We already know where we see gaps, therefore we’re not just going after something we hear for the first time,” Leal said. “We’re pretty strategic in the areas we know we want to advance in.” Leal said Whirlpool is in talks with a number of the startups associated with the Industry 4.0 accelerator program, and that the company is especially interested in technology capable of documenting continued efficiency on production lines, including finding opportunities to improve manual operations. “A lot of manual operations are hard to build connectivity with, but when you’re able to then apply some of these solutions that can monitor manual operations, that’s a great opportunity to see and learn,” Leal said. Whirlpool is in talks with a startup called Invisible AI, which was co-founded two years ago by University of Michigan graduate Prateek Sachdeva, who is also Invisible AI’s chief operating officer. The company has created AI-enabled cameras that watch assembly workers to spot mistakes or inefficiencies during manual assembly processes. The camera monitors wrist, hand and body movements — the assembler does not have to wear sensors — to determine if the assembler has deviated from the standard assembly process. The company was founded in the Bay Area but established a second office in Ann Arbor. Its Midwest operations will be based in Michigan going forward. “I enjoyed that one,” Leal said of Invisible AI. “We’re looking to work with them on deploying some pilots with Invisible AI. That’s a very promising one that I think is applicable in a lot of operations where you have manual operations and manual processes.” Whirlpool has a rigid process for testing new innovations before they can be built into its operations. This includes pilot, trial, deployment and roll out phases. During the pilot and trial phases, Whirlpool

“Manufacturing is a slowmoving industry. Finding the right people is definitely valuable. The accelerator has done a great job to provide resources on all fronts. Finding even small customers to talk to is incredibly valuable because we want to build a technology that helps everyone, not just the big players.” — PRATEEK SACHDEVA Co-founder and COO, Invisible AI

takes time to learn how the technology can be applied to specific processes and how it might play a role in the broader scope of its manufacturing operations. “We always think of the global aspect — not just for that particular factory,” Leal said. “We try to look at how this is going to impact (Whirlpool) overall.”

Foot in the door For Sachdeva, whose professional history is rooted in self-driving cars, getting in with bigname manufacturers is crucial for Invisible AI. By his account, it’s just one of the many benefits that the Industry 4.0 accelerator has provided. “It’s very hard to get access to customers like that,” Sachdeva said. “Manufacturing is a slowmoving industry. Finding the right people is definitely valuable. The accelerator has done a great job to provide resources on all fronts. Finding even small customers to talk to is incredibly valuable because we want to build a technology that helps everyone, not just the big players.” While Sachdeva deferred to Whirlpool for any details on Invisible AI’s relationship with the company, he did say that Whirlpool fits the mold for what AI is looking for right now to prove its value. “It’s tough to find innovative players in manufacturing who are willing to move fast because that’s what’s required to be a successful startup — that velocity,” Sachdeva said. “Other partners we’ve talked to have had the same experience.” Visit www.mibiz.com

HEALTH BIZ

Rising prescription drug costs likely to be revisited in Lansing By MARK SANCHEZ | MiBiz msanchez@mibiz.com

or generic drugs. Many of the task force’s recommendations were covered in legislation that lawmakers considered in 2020. Some of the bills had n the surface, the position appears legislative hearings, but none ultimately passed. completely counter to what a busiThe report from the bipartisan task force sets the ness organization would typically foundation for the reintroduction of bills in 2021. advocate. “It sets up, hopefully, a more robust policy disYet the ever-rising costs for precussion on these issues,” Johnston said. “Given scription medications has led the Grand Rapids the bipartisan nature of the task force, we’re hopArea Chamber of Commerce to support requiring that could signal some potential agreement.” ing pharmaceutical companies to explain certain Whitmer noted the task force’s report in last month’s State of the State address. She pointed to the bipartisan nature of recommendations and the rising cost of prescription medications. “Now, let’s get this on the legislature’s to-do list,” Whitmer Forshee Johnston Pallone Rapundalo said. increases in drug prices, the costs to research, develop and manufacture a drug, and how much Rising costs, varying interests it invests in clinical trials. The task force report found that over the past six That kind of transparency — embedded in a years, the average prices for drugs to treat “diastate task force’s report on drug costs — would betes, heart disease, depression and other combegin to create greater public understanding on mon conditions have more than doubled. These how prescription drugs are priced as health care prices are set with little transparency but with costs remain a top concern for employers, said tremendous consequence.” Andy Johnston, vice president of government Prices for common medications older adults affairs at the Grand Rapids Chamber. use increased at 10 times the rate of inflation over “We’re unique (among) business groups with five years, and the average price for prescripthis position,” he said. “When it comes to health tion drugs grew nearly 60 percent from 2012 to care costs, it’s a significant burden on American 2017, according to the report. Survey data indibusinesses and it places us at a disadvantage in cate that in 2017, nearly one-third of Michigan the global marketplace. Also, given the amount adults stopped taking a medication because of of taxpayer dollars spent on these, it seems like the costs. a reasonable regulation to support.” “Prescription drug prices have been rising at That’s why the Grand Rapids Chamber last unsustainable rates,” according to the task force year backed statewide legislation to require pharreport. “Residents across Michigan must often maceutical companies to report an itemized choose between filling life-saving prescriptions account of what goes into a drug’s price when its and paying rent, buying food, or obtaining other wholesale or treatment costs exceed $10,000 in a critical essentials.” year. The report to the Michigan Department of The issue and the complex way drugs are Health and Human Services would have required priced pits varying interests against one another. the total costs for making and distributing the In a statement emailed to MiBiz, the industry drug, R&D costs by the company or a third party trade association Pharmaceutical Research and or the cost of acquiring the drug, and what the Manufacturers of America (PhMRMA) put part of firm spent on its marketing and advertising. the cost issue on insurance drug copays that have risen over the years, particularly for name-brand Revisiting the issue and costlier medications, as employers sought to The issue will likely resurface in Lansing in the mitigate rising premiums. new legislative term. A task force formed a year “We are committed to working with Gov. ago by Gov. Gretchen Whitmer issued a report Whitmer and the Michigan Legislature to supthat called for greater transparency from pharport legislation that will save Michiganders maceutical companies and pharmacy benefit money at the pharmacy counter,” PhMRMA managers on prescription drug costs and how said. “Policy solutions that lower out-of-pocket prices are set. costs for patients will require that all actors The Prescription Drug Task Force issued sevacross the supply chain do their part. To effeceral policy and legislative recommendations on tively address patient affordability challenges, cost transparency, accessibility, affordability and we need long-term, common-sense reforms like accountability. They cover issues such as publicly lowering patient cost-sharing, allowing patients reporting data on drug prices and price controls to spread their costs throughout the year and that include setting caps on prescription copays requiring insurance companies and pharmacy built into health insurance policies. The recombenefit managers to share negotiated rebates and mendations also suggest prohibiting so-called discounts with patients.” “gag clauses” by pharmacy benefit managers In a legislative hearing last spring on bills to (PBMs) that prevent pharmacies from telling cusaddress rising drug costs, a representative from tomers about lower-cost alternative medications PhRMA explained that prices for drugs now on

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the market support industry R&D that costs billions. MichBio, the statewide trade association for the industry in Michigan, opposed much of the legislation that lawmakers considered in 2020. Recommendations in the task force’s report offer little new beyond what lawmakers considered last year, MichBio CEO Steve Rapundalo said. The report “was a foregone conclusion and a done deal right from the get-go,” and also was “anti-industry” and “anti-innovation, and done without an independent assessment or analysis on health care costs,” Rapundalo said. If lawmakers want to make prescription drugs more affordable for consumers, they should start with out-of-pocket costs rather than forcing drug makers to part with confidential, proprietary pricing data, Rapundalo said. Publishing list prices for drugs would mean little to consumers, “because that’s not what they’re paying and there are so many middlemen in between,” Rapundalo said. “Insurance design reform is where you want to start if you really want to impact out-of-pocket costs,” he said. MichBio would support bills to ensure savings from rebates negotiated between pharmaceutical companies and PBMs are passed directly to consumers and to ban gag clauses that are also included in PBM contracts with retail pharmacies, Rapundalo said. “The consumer should know when they go to a pharmacist if a copay is cheaper in cash than it is through the insurer, and if it is they should know that and be allowed to pay for that. Yet there are agreements in place that forbid the pharmacist from disclosing that, and that’s not fair,” he said.

Employer health plans Many employers have varying tiers in their drug benefits that require higher copays for namebrand and higher-cost drugs. The higher the tier, the higher the required copay. Prescription copays nationally in 2020 ranged from $11 for drugs that appear in the first tier of a prescription benefit, to $116 for costlier fourthtier drugs, according to an annual survey on employer health care costs by the Kaiser Family Foundation. The cost of a family health plan in 2020 averaged more than $21,300 nationally, or more than triple two decades ago. In West Michigan, where the average cost of a family health plan last year was more than $17,300, employers answering an annual survey by The Employers’ Association reported

average copays of $20 for generic drugs and $60 for brand-name drugs. Copays averaged $80 for drugs that were listed on a health plan’s third tier. Drugs listed on higher tiers had a copay for 20 percent of the cost, for a maximum $250 for the fourth tier and $450 for the fifth, according to The Employers’ Association. Representatives from health insurers in Michigan argue that imposing caps on drug copays written into employer health plans does nothing to alter the course of rising prices. Dr. James Forshee, senior vice president and chief medical officer at Priority Health, said some 800 brand-name drugs had price increases this year that average 4.5 percent. Specialty drugs commonly used by Priority Health members have gone up an average of 7.9 percent this year, or about $6,800 more annually, Forshee said. Even insulin that once costs $20 or $30 a month many years ago now costs as high as $1,000 monthly, Forshee said. “That’s the issue. It’s not whether you have a $100 copay. It’s the overall total cost,” he said. “Eventually, someone’s covering that total cost. We can get lost and hung up on where are the copays and where are the deductibles. I’m not sure that isn’t a distracting discussion from the fact that the prices have gone through the roof.”

Transparency needed Transparency on drug prices and how they are set remains the top legislative priority for the Michigan Association of Health Plans (MAHP), which represents HMOs in the state. The MAHP has long advocated for greater transparency in drug costs, said Executive Director Dominick Pallone. “At the end of the day, there’s only one entity that sets the list price, and that’s manufacturers. At the very beginning of the price-setting issue are manufacturers,” Pallone said. “This is the only product that I know of that the longer it’s available, in some cases, the prices go up.” While supporting greater price transparency, the MAHP would object to greater regulations on PBMs that act as a go-between and negotiate pricing between pharmaceutical companies, health plans and pharmacies. “PBMs are an important player for our industry right now. They help bring size to the negotiation with pharmacies on one end of the equation, and negotiation with manufacturers and wholesalers on the other end of the negotiation,” Pallone said. “Without PBMs our prices would be higher.”

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FINANCE

Grand Angels and affiliates reorganize to accommodate growth, promote diversity By MARK SANCHEZ | MiBiz msanchez@mibiz.com

restructuring for Grand Angels in 2021 aims to create understanding about angel investing and greater diversity among investors and their deals. The Grand Rapids-based angel investing network umbrella organization Michigan Capital Network has transitioned into a nonprofit trade association. Under Michigan Capital Network, led by Interim Executive Director Janet Wylie, Grand Angels and its affiliates in Kalamazoo, Detroit and Flint now work to “educate, grow, and diversify early-stage investors in communities across Michigan.”

A new subsidiary, MCN Ventures, manages Grand Angels’ three venture capital funds and plans to launch a fourth later this year. The venture capital funds maintain a focus on investing primarily in the Great Lakes region. Paul D’Amato, who’s been with Grand Angels since 2015, leads MCN Ventures as CEO and managing director. Dale Grogan, who joined Grand Angels late last year from Charter Capital Partners, works alongside D’Amato. The reorganization comes 16 years after Grand Angels formed as a loose-knit group of angel investors in West Michigan. Since then, Grand Angels has grown membership, added the venture capital funds and became a broader, more sophisticated organization that has invested more than $40 million over the years.

The structural changes should better accommodate continued growth and “greater impact and better impact” from investments, said Carl Erickson, chairman of the Michigan Capital Network. “Any organization as it grows needs to periodically look at its structure and adapt that structure to handle the growth and the new things that it’s been doing,” Erickson said. “We are just a different organization than we were historically. This reorganization takes the successes that we had and the opportunities we see in the future and aligns the organization better to take advantage of that.” Individual members of the Grand Angels network and its affiliates will now invest in deals through special purpose entities formed

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WORK FROM HOME WELLNESS Free 50-minute webinar | Tuesday, March 16 - 11 a.m. | Register: mibiz.com/wellness Many companies adopted work-from-home strategies in 2020 as a way to cope with COVID-19. Now, a growing number of those firms are considering WFH their “new normal” for 2021 and beyond. They’re also helping employees prioritize their physical, mental and emotional health by creating productive workspaces and healthy habits at their new home offices. Join MiBiz and wellness consultants GIG Design, LLC for this free 50-minute webinar on Tuesday, March 16 at 11 a.m. We’ll explore the impact of working from home on employee health, wellness and productivity. Plus, we’ll share actionable strategies that companies can utilize to help their employees thrive while working from home.

To register visit mibiz.com/wellness.

FEBRUARY 15, 2021 / MiBiz

specifically for each investment and that MCN Ventures will manage. Michigan Capital Network will “rely on trusted partners” around the state — including Invest Michigan, Invest Detroit, Michigan Rise, and Lean Rocket Lab — to source, vet, Erickson conduct due diligence, and negotiate deals, Erickson said. Members can also invest in later-stage deals through MCN Ventures.

Building on experience Through the new structure, Michigan Capital Network wants to grow to eight affiliated angel groups across the state with 250 members, from about 100 members today. The organization has been talking to potential new affiliate partners in two more markets in Michigan. Additional affiliates could come through partnerships with existing angel groups or the formation of new groups, Erickson said. Erickson cites one recent estimate showing there were 4 million people in the U.S. who met the federal definition for an accredited investor but only 300,000 are active angels investors. “In that sense, there’s a whole bunch of people who could be doing this but aren’t, and I think that’s driven by a lack of familiarity and education, which is why we have made education front and center in our purpose,” Erickson said. “If you don’t even know about this or feel confident in it or even know how to invest responsibly and successfully, no way are you going to be doing this.” Erickson also cites his own experience as an example. The founder of Grand Rapids software developer Atomic Object LLC, Erickson was first introduced to Grand Angels more than a decade ago by a client who had received an investment. At that time, he had done very little early-stage investing. “That made me aware of the organization. I joined and just learned a ton, sort of informally by just listening to the questions asked (and) by hanging around people who had more experience than me,” he said. “We want to take that dynamic of peer-to-peer learning and we want to complement it with a formal educational curriculum so that every single meeting has an educational presentation.”

More diversity Statewide in 2019, 14 angel organizations with 1,322 investors invested individually or through a group, according to the 2020 annual research report by the Michigan Venture Capital Association. To bring more angels into the fold, Grand Angels created two new member classes. They are emeritus members “who have aged out of early-stage investing” and offer “wisdom, experience, and relationships” to emerging members who are “the future business leaders and accredited investors,” Erickson said. “They’ll benefit from the connections, mentoring, and education we provide,” he added. “We’re planting seeds for future early-stage investors.” In planting those seeds, Michigan Capital Network wants to create greater diversity and have more women and people of color become involved in early-stage investing, according to Visit www.mibiz.com

Angel diversity One of Grand Angels’ restructuring goals is to create greater diversity among investors and investments. Here’s a look at 2019 U.S. angel investments in companies by gender and ethnicity of their CEO:

Male 73% Female 27%

White 86%

Asian 3%

Black 6%

Other 6%

Source: 2020 Angel Funders report, Angel Capital Association

Erickson. Women are underrepresented in angel investing while people of color are “dramatically underrepresented,” he said. Erickson sees the drive for greater diversity in early-stage investing as a social justice issue. “If you believe that this asset class of earlystage investments is an important one and can be a potential wealth-building one, then we should have everybody participating and benefitting,” he said. “The more diversity and life experience that we have, the better we all will be as investors and learning from each other. … I have no doubt that a diversity of our membership would help us with better diligence and deal sourcing.” The most recent annual Angel Funders report from the Angel Capital Association shows that nationally, women and people or color remain underrepresented as CEOs of companies that received an angel investment and “we saw virtually no change from 2018 to 2019.” Despite efforts in recent years for greater diversity in investments, “angel portfolio companies are still overwhelmingly being led by white male CEOs,” according to the Angel Capital Association’s 2020 Angel Funders report. Visit www.mibiz.com

MICHIGAN OPPORTUNITY FUND Continued from page 1

for the kind of capital the fund plans to invest.

“In our discussions, this is a market that sometimes isn’t always served or may not be served totally, meaning you may have pockets if it’s around a big city or somebody gets connected, but maybe it’s just not as serviced as fully as it could be. That’s what we’re trying to do,” DeVos told MiBiz. “We want to be a spark in the neighborhood and maybe we can have a role to play in making things better or creating an environment where businesses can thrive at an even higher level going forward.” While partners are reluctant at this point to discuss how much they intend to raise, the fund could become substantial, given the connections of DeVos and his family office’s involvement, plus the existing investors in Auxo Investment Partners that they intend to approach. “We want to keep making friends,” DeVos said. “This is north, south, east, west, across all of Michigan DeVos — wherever there’s friends, wherever there’s people interested in this.” As well, the fund will offer companies more than simply financial investments. Partners bring to the fund their own networks of people who can offer advice and guidance to the comHelminski panies that it backs. “That’s what good partners do: They introduce you to the next partner, or the next friend or connection. Those are the things you want to bring because sometimes just throwing money at a problem isn’t the solution. It’s the ingenuity, it’s the creativity, it’s the people,” DeVos said. “You’re going to need some money somewhere along the line, but what you really need are great people and great ideas, and people who understand the bigger issues of what a business is trying to accomplish, what value they’re trying to provide for their customers, what environment they want to create for their employees, and what role they want to play in their communities.”

Investment targets Partners intend to target an array of sectors that include health care, technology, food and beverage, consumer products, manufacturing, distribution, and business and industrial services. The fund will consider companies with owners and management teams that want to grow the business, or cases in which the founder or family owners want to sell and retire. Investments will go toward companies with revenue of $10 million to $200 million with $2 million to $20 million in earnings before interest, taxes, depreciation, and amortization (EBITDA). Organizers are building the fund “to have a pool of capital that supports just about any Michigan business, regardless of the type or need it has for capital,” said Jeff Helminski, cofounder and managing partner at private equity firm Auxo Investment Partners.

“The idea is that if we could really find a way to connect with these businesses and partner with them, and to focus and bring resources and support to them in a different way, maybe we can be helpful.” — DOUG DEVOS Co-chair of Amway Corp.

“We built the fund to broadly support Michigan businesses regardless of where they’re at in their need for capital or the evolution of their life cycle,” Helminski said. “We wanted to make sure we had a wide enough angle on the lens that we’re looking through for investment opportunities so that we could see all of the opportunities that are out there and consider all of those opportunities.” The fund’s first deal could close within 60 days, he said.

Creating connections The idea for Michigan Opportunity Fund started last spring as DeVos talked with colleagues at the West Michigan Policy Forum, where he serves on the board of directors, and the Grand Rapids Area Chamber of Commerce regarding how best to respond to the COVID-19 pandemic and its effects on small and mediumsized businesses. “The idea is that if we could really find a way to connect with these businesses and partner with them, and to focus and bring resources and support to them in a different way, maybe we can be helpful,” DeVos said. Those discussions led to Auxo Investment Partners and the partnership to create the Michigan Opportunity Fund. The partners are launching the fund not only amid the pandemic, but also as an entire generation of entrepreneurs will need to retire and exit their businesses. In the last few years, business leaders and economic developers have voiced concerns about the sale of local businesses to owners from outside of the region, or to out-of-state private equity investors who lack ties to the community. “We’re living it as business transitions from one generation to the next,” DeVos said. Many businesses are poised for growth and need capital, “but just making that next step or connection is a tough one, so maybe we can help on that front, too,” DeVos added. Organizers have been approaching family offices, institutions, and other prospective investors around the state to back the fund, which “isn’t so much focused on a particular dollar amount as it is focused on finding the right group of capital partners to be part of this with us,” Helminski said.

Local focus Key differentiators for the fund compared to many private equity firms are maintaining local ownership and owning companies well beyond the typical timeframe of many PE investors, perhaps indefinitely in some instances, he said.

“We’re really looking to connect with people that share our values, our passion for Michigan, and believe that you can leverage our investment activities as a force for good to create jobs and support Michigan communities, all while delivering superior returns,” Helminski said. “We want to connect with like-minded individuals, families and organizations that share those beliefs and invite them to be part of this with us.” One of those like-minded individuals is Roger Penske, the 83-year-old chairman of Bloomfield Township-based Penske Corp. In a statement on the fund’s formation, Penske said that “it is an honor to partner with the DeVos family and other Michigan investors in this endeavor, and I look forward to the economic vitality the fund will usher in across the state, from Detroit to Grand Rapids and all points in between.” “The Michigan Opportunity Fund presents the unique opportunity for local investors to invest directly in the future of our great state, supporting its family-owned businesses and the communities in which they operate — and at a particularly pivotal moment,” Penske said.

Respecting legacies The fund’s focus on attracting Michigan investors and family offices to invest in Michigan-based companies represents a “big selling point” when scouting for prospects, according to Helminski. Oftentimes, sellers of family-owned companies have concerns about their legacies in their communities under the new ownership, particularly when they sell to out-of-state investors. “If you’re a family-owned business that’s reached the point of deciding it’s time to sell the business because there is no next generation, the prospect of … partnering with a group like us, which is made up of other well-known and highly respected families who have built businesses similarly to the acquisition targets we have, will be very appealing to people — and comforting,” Helminski said. “They are trusting their legacy and their employees’ future into the hands of people that are going to treat it with the respect and with the care that they would have if they continued to own it.” He expects the fund will likely make 12 to 15 investments over a four-year period, after which partners would then consider forming a successor fund. “I would love nothing more than for this to be the first of many and to have what ultimately becomes a perpetual pool of capital that we can continue to invest in Michigan businesses as they grow over time, and as more get to the point of meeting those generational transitions,” he said.

“We built the fund to broadly support Michigan businesses regardless of where they’re at in their need for capital or the evolution of their life cycle.” — JEFF HELMINSKI Managing Partner at Auxo Investment Partners

MiBiz / FEBRUARY 15, 2021

FOCUS: WORK FROM HOME

Remote working highlights struggles, long-term opportunities for workers with disabilities By KATE CARLSON | MiBiz kcarlson@mibiz.com

dvocates for people with disabilities are hopeful that the work from home trend spurred by the COVID-19 pandemic will make employers more open to accommodations workers might need in a post-pandemic workplace. Not all companies have been able to switch to a work from home model, but most business that is conducted in a traditional office setting has been mandated to have employees work remotely when possible to slow the spread of the virus. A year ago, it would have been unlikely for employees to get work from home accommodations from their employer, said Disability Advocates of Kent County Executive Director David Bulkowski. Part of the organization’s work involves teaching people with disabilities about how to talk to their employer and ask for accommodations that will make them more productive at work. “I’m excited about the additional level of accommodations Bulkowski (work from home) could lead to,” Bulkowski said. “First and foremost the accommodation process is a dialogue — there should be a give and take. But I don’t think most employers will just snap back to the automatic ‘no,’ like the way things were before the pandemic.” Now that employers have seen workers maintain productivity while Lofton working remotely, Jeffrey VanDyke hopes it will open more opportunities for people with disabilities. VanDyke is a graphic design specialist for Disability Network West Michigan, where he also leads a digital peer support group. “(Working from home) can be hard on your mental health, but the positive side for me is I do not have to fight through the snow this winter as a chair user,” said VanDyke, who was born with Cerebral Palsy. “Now that we’ve seen consistently people of all ability levels — whether you’re born with a disability or not — can work from home, I’m hoping that will open up more opportunities.”

‘Asking for a chance’ Before the pandemic, VanDyke primarily did graphic design work for the Disability Network and lent his perspective as a keynote speaker at various in-person events. But his role at work has changed some with the pandemic. He has started leading a digital peer support group, which has been a lifeline for many who have disabilities, he said. “Before the pandemic hit, (working from home) was never really a possibility — or supposedly it wasn’t in some people’s opinions,” VanDyke said. “People with disabilities couldn’t really get jobs.” VanDyke isn’t sure whether the work from home shift will stick over time, but he is hopeful that it will. “One of my biggest messages overall is to just give us a chance,” VanDyke said. “We may do things differently or it may take us a little longer, but it doesn’t mean I am

FEBRUARY 15, 2021 / MiBiz

incapable. If you can find some way to meet us in the middle or where we’re at, we can be just as productive as any other individual. We’re not asking for more rights, we’re asking for a chance to be a part of society in all facets, not just some.” The pandemic has also given the general population a better idea of what isolation and the inability to interact with their community feels like — a feeling so often felt by people who have a disability. “This has never really been talked about or a concern until now,” VanDyke said. “This gave people who don’t have disabilities a chance to see what life was like for people with disabilities, and I hope it ultimately turns out to be a teaching tool for all of us.”

Seeking social opportunities Working and learning remotely has had mixed effects for people on the autism spectrum, said Joanna Lofton, community resource specialist at the Autism Alliance of Michigan. Individuals on the autism spectrum have had varying experiences during the pandemic, but the lack of social skills and general sensory issues that come with remote working have generally presented extra obstacles for people with autism, Lofton said. “There are a lot of people we serve who need the daily structure of getting up and going to work, but now they have been laid off,” Lofton said. “This difference in having idle time can show itself as aggression or withdrawal — idle time is not good for them.” The Autism Alliance of Michigan has seen a vast increase in families seeking assistance during the pandemic, primarily people looking for social opportunities, Lofton said. The organization also has seen an increase in adults reaching out to the Alliance because they suspect they are on the autism spectrum and need an assessment or to be connected with the appropriate resources. “For those who have been able to continue working, it’s been OK if they can actually go into the office — that routine has been important,” Lofton said. “One of our concerns is when an individual is able to go back to work or school, it’s still a change, which is one of the most difficult things for people on the spectrum.” Lofton suggests that people travel back to their workplace before they are called back to refamiliarize themselves with the routine, and reach out to employers to find out what the changes will be ahead of time to prepare for resuming in-person work. “Many of our individuals are worried about getting COVID-19,” Lofton said. “Most people on the spectrum do have co-occurring disorders, so you have to be really careful about them being exposed and what that might look like for them. A lot of times, it’s hard for them to identify that they are sick.” The Autism Alliance of Michigan has worked closely with some companies on how to better assist their employees on the spectrum, Lofton said. “It’s basically just them understanding autism better, and understanding that these individuals want to work and can be the absolute best employees,” Lofton said. “It’s all about expectations and understanding what kind of accommodations they’ll need. They can be your best employees and definitely have a lot to offer. We have some highly skilled and loyal individuals.”

A home office concept by Steelcase Inc. COURTESY PHOTO

Pandemic sends furniture manufacturers’ work from home plans into overdrive By JAYSON BUSSA | MiBiz jbussa@mibiz.com

or the large West Michigan-based office furniture manufacturers, remote working was a familiar concept and a demand they were prepared to fulfill. While names like Steelcase Inc., Herman Miller Inc. and Haworth Inc. were keeping an eye on the transition to higher percentages of remote workers, the COVID-19 pandemic and ensuing mass exodus from traditional offices lurched that evolution forward. Ryan Anderson, vice president of global research and insights for Herman Miller, pointed to the fact that the Zeeland-based furniture maker developed its first work from home solutions back in the 1950s and — despite always catering to that growing market — the company had to make some adjustments to accommodate the seismic shifts caused by the pandemic. “I think 2020 acted as a major catalyst toward where we already thought it was going,” Anderson said. “And from our standpoint, we had already developed a work from home offering — a dedicated e-com(merce) channel. Visit www.mibiz.com

We redesigned packaging to fit through residential doorways and was easy to break down. All that happened well before the pandemic.” “We stepped on the gas for sure in terms of promoting it and talking about it, and it worked out great Poel because we saw an over 270 percent increase in work from home sales last year,” he added. Grand Rapids-based Steelcase found itself in a similar position. While the furniture manufacturer’s core business centers on large enterprise clients and central offices, it also Nemschoff filled remote work and work from home niches. When the pandemic hit and nationwide shutdowns seemed potentially temporary, Steelcase was compelled to react. “We didn’t have a choice — consumers pulled us,” said Rob Poel, Steelcase’s general manager of work from home and new business innovation. “Orders just started spiking. We had a team in place at that time that was focused on our online store and retail business. But it was sized appropriately for the market at that time.” “We had to quickly marshal resources from a number of areas of the company, and after that we formed a newer and enhanced team to focus on that market,” he added. “That’s when I came into my role here.”

New products, e-commerce race When it came to addressing the physical needs of working from home, a few specific items emerged as top sellers. An ergonomic work chair was at the top of that list. “Not a large portion of the population has a dedicated home office,” Poel said. “Many are creating temporary spaces. These are the people who might be sitting on a folding chair or something else. … An ergonomic seating solution is clearly the No. 1 thing.” Poel said that height-adjustable desks were another in-demand item in addition to small tools and accessories, like a second monitor or a phone charging solution that would be readily available at an office. During the pandemic, Steelcase launched a sit-to-stand desk called Solo, which has proven to be popular among clients and fits the needs of this new brand of customer. “Some of the products that we developed before were being installed in an office by a professional installer,” Poel said. “Now, you’re shipping it FedEx, it’s being dropped on your doorstep and it needs the average consumer to be able to assemble it. (Solo) is one product that we launched … and we envision more in the year ahead.” Not only were in-demand products changing, but also the method in which clients were buying swung to e-commerce, where many furniture manufacturers found themselves enhancing their digital presence. It’s a frontier in which Haworth has been especially active over the last year. The Holland-based furniture maker launched an entirely new corporate website in July 2020 and updated its e-commerce site in the second quarter. “Everything (in the online store) is in inventory,” said Paul Nemschoff, Haworth’s vice president of global strategy and marketing. “They’re Visit www.mibiz.com

able to order and take delivery literally within days. We’ve seen good success on it.” Nemschoff said he plans further enhancements to Haworth’s e-commerce site, which will roll out before the end of February.

Workplace consultants Haworth has also harnessed its digital presence for more than just selling furniture. Through a web series called Haworth Connect, the company welcomes guest speakers to talk on topics ranging from resilience in challenging times to engagement and inspiration. The events never mention Haworth products. “As much as we believe that it’s important for us to give people at home, or anywhere else, a great product to work with, there is a huge mental component to this,” Nemschoff said. “And that’s

where we’ve really tried to be a good corporate citizen in helping our clients and those in the community we live and work in to be better prepared and better oriented as they work forward.” Office furniture manufacturers are finding themselves as go-to consultants for businesses that are struggling to pin down the right approach to working from home, an office or a hybrid of the two. Herman Miller, which staffs in-house consultants, received so many requests that it launched a digital tool to assess the health of a person’s work from home setup. Since launching last summer, 17,000 people have used the tool, Anderson said. “We learned a lot from it, too,” Anderson said. “We (launched it) partly because of this tidal wave of requests. Now the requests (from clients) are really around, ‘How do we help people work wherever they want?’ … People are starting to figure it out.”

A home office concept by Haworth Inc. COURTESY PHOTO

Whether it’s the living room or the board room, we’re here to connect and empower you.

MiBiz / FEBRUARY 15, 2021

FOCUS: WORK FROM HOME

Commercial real estate experts optimistic despite work from home uncertainty By KATE CARLSON | MiBiz kcarlson@mibiz.com

he West Michigan commercial real estate market has been relatively stagnant during the pandemic-induced shift to remote working, but advisers see some room for optimism ahead of a vaccine rollout and with several recent office deals. “No matter what industry we’re talking about, I think the driving force is people’s attitude — which used to be fear, but that is no longer the case,” said Chip Bowling, senior adviser and principal at Bradley Co. “People have been pent up and want to get back out to a social environment.” Amid the lingering uncertainty around the future of office space, Bowling expects many office tenants to make long-term decisions toward the end of the first quarter of 2021. Global real estate services firm JLL Capital Markets’ office insight report for the fourth quarter of 2020 showed market-wide vacancy rates in Grand Rapids at 10.1 percent, a year-over-year increase of 0.4 percent. Year-end leasing volume plummeted 60.1 percent from 2019. Average direct asking rents slid 1.3 percent. “There will be an increase in subleased space as some of these office occupiers are reassessing their office footprint and working from home,”

said JLL Senior Research Analyst Harrison West. “Some companies will be looking to shed a portion of their office space, leading to an increase in sublease space in Grand Rapids and Detroit. Not at the scale of coastal markets, but we’re starting to see an increase in subleasing.” Subleased office space comes at a discount, with rates approximately 10-20 percent below market rents, according to a Bradley Co. office market insights report. Sublease deals right now include benefits such as short-term leases, furniture, rent abatements or subsidized tenant improvements. This rise in subleased space hasn’t had a major effect on landlords so far, as most are receiving the majority of their rental payments, according to the Bradley Co. report. But subleased space will soon put pressure on market rates and could ultimately put pressure on landlords to drop their rates if they want to compete for new tenants in the open market. Companies that choose to work from a physical office going forward will need amenities that help attract talent, said Jeff Tucker, senior managing director of brokerage and principal at Bradley Co. “Amenities in an office setting will have to be as good or better than an employee’s house,” Tucker said. “An amenity driven workplace will draw people who prefer to be in-person and engaged as opposed to if you have a suburban

Downtown Grand Rapids. PHOTO COURTESY OF EXPERIENCE GRAND RAPIDS office and live in the suburbs, where you will be more likely to work from home.”

Companies driving change Pharmaceutical manufacturer Perrigo Co. plc’s plan to relocate its North American headquarters to downtown Grand Rapids could cause other similarly big moves by corporations, Bowling said. Insurance giant Acrisure LLC has also relocated its headquarters to Studio Park in Grand Rapids and is in the process of taking occupancy at the new location. “It’s our prediction the companies that come downtown will have a competitive advantage to recruit young talent,” Bowling said. Downtown is still a sought-after location despite businesses shutting down in 2020 under pandemic restrictions — especially as the city pursues activating the riverfront with multiple planned developments, including an amphitheater, Bowling said. A similar trend could play out in smaller cities like Holland and Muskegon by attracting larger companies to their downtowns for office space,

Tucker said. “These little communities are figuring out they have these amenities and pieces that will make people want to be a part of that company and come to work,” Tucker said. JLL’s office market report also points to Integro Builders LLC moving its office from Chicago to Grand Junction, just east of South Haven, as an example of a company considering a low-cost office alternative amid the work from home trend. “We’re also starting to see lowering the density of how many people are working at an office space, and people are being spread out,” said JLL’s Senior Vice President Bob Horn. “We are seeing some footprints stay as they had been, but with fewer people.” The office trends are hard to predict, but Horn expects the market to be soft for the next 18 months. “It’s not a (one size fits all) approach,” JLL’s West said. “Some companies realize working remotely is working for them, but others need to be face to face in an office that is collaborative.”

SUPPORT YOUR CUSTOMERS WHILE WORKING FROM HOME

HMS provides innovative solutions for the modern work-from-home engineer

s we kick off 2021, it appears that we have a positive outlook when it comes to customer sentiment and business. At the same time, most of us are under travel restrictions yet we need to keep our customers up and running. Machines still break or need servicing from OEMs/Machine Builders – often under required warranty commitments and Service Level Agreements (SLAs).

an ‘adviser’ may only be able to monitor the machine’s data. While remote access certainly provides a safe way to access factory assets, there are big cost savings as well. The ability to remotely access a machine can solve an estimated 60 to 70 percent of operating problems, avoiding the need for local support personnel to travel across town - or around the world. The average cost in North America to send a Field Technician onsite to troubleshoot a customer machine is $2,200 USD per trip. Over half of those visits could have been done remotely.

What can companies do who are restricted from sending service personnel to service remote equipment? How can we implement a stable “work from home” strategy that can outlive this pandemic? Any company facing the difficult decision of sending service technicians to the field should consider whether an industrial remote access solution might solve the problem for them instead. HMS Networks’ Ewon brand provides a secure, IT friendly solution for easily accessing remote industrial machines – as if the tech were directly connected. Rather than sending service technicians into a potentially unsafe region to troubleshoot a problem, HMS Ewon solutions provide a simple device which can be plugged into industrial equipment and can be quickly accessed via a secure connection directly to the asset. ‘Direct access’ means that almost any function that can be done

FEBRUARY 15, 2021 / MiBiz

locally, can be done from virtually anywhere – without ever needing a boarding pass. For example, valuable functions such as diagnostics, programming, and equipment monitoring are possible from a remote workstation (or even mobile device). The ingenuity of the HMS solution is that the technology does not reside on the automation network and is naturally fire-walled from the existing control systems - so end users can feel confident that the service work will not disrupt their process.

Ewon solutions leverage industry standard OpenVPN technologies using a firewall friendly transport with little or no IT changes required. The Talk2M infrastructure is ISO 27001 certified and the entire solution goes through regular security audits on a yearly basis to ensure industrial strength security. Concerned about User Level Access? The on-demand instant VPN connection is managed through the global Talk2M infrastructure (24/7/365) which provides varying levels of access to different device functions. For example, an admin might be able to update programming, while

Known as the industry standard for Industrial Remote Access, HMS Ewon solutions have been in the market for over 15 years, claiming over 300,000 registered users with connections in 156 countries. When you look at your 2021 planning, ask yourselves how you can grow your revenue, customer satisfaction, and employee satisfaction during restricted travel. HMS has the solutions to exceed your expectations.

Visit www.mibiz.com

M+A DEALS & DEALMAKERS AWARDS

THE DEALS MUST GO ON Introducing the winners of the top deals and dealmakers over a most atypical year for mergers and acquisitions

he MiBiz M&A Deals & Dealmakers Awards are back for their 8th installment to highlight best practices and excellence in what can only be described as one of the most atypical deal environments of all time. As in most other areas of business, the COVID-19 pandemic upended long-standing norms that had driven M&A transactions and dealmakers for decades. All of a sudden, buyers and sellers could no longer meet in person. Perhaps most notably, the due diligence process — that peek under the hood of a company to ensure that it matches the seller’s description and that it doesn’t pose any undue

risk for the buyer — largely went virtual as well, particularly in the case of international deals. However, the old adage seemingly proved correct: Necessity is the mother of all invention, and dealmakers across West Michigan got creative to keep deals alive and get them across the finish line. Whether some of these new practices stick around for the long term remains to be seen, but these companies’ resourcefulness and entrepreneurial thinking are undeniable. The panel of judges had their pick of interesting, strategic and challenging deals as a result of the unique situation, but their selections of the deals profiled on the following pages rose to the top as examples of excellence

from which other companies can pluck best practices. Just as in the M&A environment, COVID19 also upended our plans for these awards, which were originally scheduled for an event in October. While we’re forgoing that in-person celebration this year, we hope you join us in recognizing these companies and individuals as prime examples of the best that West Michigan has to offer.

DEALS OF THE YEAR Manufacturing The Shyft Group Real Estate Development Gun Lake Investments/ Waséyabek Development Co. LLC Banking/Finance ChoiceOne Financial Services Inc. Life Sciences Tetra Therapeutics Inc. Health Care Priority Health Professional Services Acrisure LLC Retail Zeigler Automotive Group

Joe Boomgaard, Editor

Economic Development Perrigo Co. plc Technology Foxbright Nonprofit Mel Trotter Ministries

THE SHYFT GROUP COMPLETES 2020 WITH A FLURRY OF M&A ACTIVITY, CORPORATE CHANGES By JAYSON BUSSA | MiBiz jbussa@mibiz.com

he Shyft Group was busy in 2020 — and a couple of major deals were only part of the dizzying year. In a change in corporate direction, The Shyft Group — formerly known as Spartan Motors — divested from its emergency response vehicle division in a deal that also sent its company name to the buyer. The Shyft Group also acquired aluminum truck body and accessory manufacturer F3 MFG Inc. Meanwhile, the company re-branded under its new name and relocated its corporate headquarters from Charlotte to Novi — all while grappling with the limitations of the COVID-19 pandemic. The pair of company-shaping deals was honored in this year’s M&A Deals & Dealmakers Awards, netting the honor for Deal of the Year in the manufacturing sector. Daryl Adams, who took over as company CEO in 2015, admitted that he did not have much experience in the emergency response vehicle industry, nor did many members of his team. While analyzing the viability of the segment, the team started to realize the inherent pitfalls that came with the market. Not only did fire truck sales nosedive by 30 percent during the Great Recession — sales that never recovered — but municipalities now find themselves with more frequent budget constraints. All factors considered: Emergency response vehicles are a tough market for finding success. Adams said The Shyft Group lost “a lot of money” in 2015 but slowly brought the division to a break-even point and slightly profitable in 2019, when management sat with the board of directors to discuss its fate. In 2019, the emergency response business delivered $260 million of revenue out of a total of $1 billion for the company.

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“We had a target of 10 percent adjusted EBITDA in 2020,” Adams said. “The other divisions are running mid-teens and lower teens. And ER was going to maybe break even and it was taking a lot of management’s time. When we saw it wasn’t going to be the same growth level as the other divisions, it was an easy decision.” The nature of the deal, which shed 25 percent of the business, was a bit new for The Shyft Group — the first carve out the company had ever embarked on as it sold the division to Wisconsin-based REV Group Inc. for roughly $50 million in cash. “It was a carve out, so we had to change the campus in Charlotte a little bit and they bought a couple of the buildings in the deal and got the employees so we had to do some separation agreements and things. Maybe they weren’t hurdles, but it was new learning for us,” Adams said. Investors reinforced the decision by responding favorably. The Shyft Group’s stock ticked up 58 percent for the year. While The Shyft Group exited emergency response vehicles, it leveraged that money to invest more heavily in its specialty vehicles division, where it purchased Californiabased Royal Truck Body in September 2019 and then F3 MFG Inc. in October 2020, which included the DuraMag and Magnum brands in its portfolio. The acquisitions grew the company’s capabilities in steel and aluminum service bodies and provided greater margins. “Maybe not right now, but in the next few years, we believe there is going to be a significant amount of infrastructure money spent in the U.S. because the roads are crumbling and the bridges are crumbling,” said Adams, whose company manufacturers key components for those and other service vehicles. “Eventually there is going to be some large infrastructure funding so we wanted to get a jump on that.”

Judge’s Choice America’s Bride Honorable Mention Auxo Investment Partners

DEALMAKERS Executive Jeff Lambert, Lambert & Co Adviser Jeff Ott, Warner Norcross + Judd LLP The Shyft Group President and CEO Daryl Adams. COURTESY PHOTO

MANUFACTURING

Investor John Kerschen, Charter Capital Partners Rising Star Matthew Baas, Small Business Deal Advisors

THE SHYFT GROUP Top executives: Daryl Adams (president and CEO), Jon Douyard (CFO), Todd Heavin (COO), Ryan Roney (chief legal officer and secretary), Chad Heminover, (president, Shyft Fleet Vehicles & Services), Steve Guillaume (president, Shyft Specialty Vehicles)

JUDGES

Annual sales: $757 million in 2019, from continuing operations

n Tanya Gibbs, partner at Rosette LLP

Total Michigan employees: 430

n John Kerschen, president and managing partner at Charter Capital Partners

Company: The Shyft Group offers vehicle manufacturing, assembly and upfit for the commercial, retail and service specialty vehicle markets. The company is organized into two core business units: Shyft Fleet Vehicles & Services and Shyft Specialty Vehicles. Its family of brands includes Utilimaster, Royal Truck Body, DuraMag and Magnum, Strobes-R-Us, Spartan RV Chassis, Builtmore Contract Manufacturing, and corresponding aftermarket provisions. Advisers on the deals: F3 MFG, Inc. acquisition: Donnelly Pennman & Partners (investment bankers); Varnum LLP (legal). Sale of emergency response vehicle segment to REV Group Inc.: Robert W. Baird & Co. Inc. (investment bankers); Varnum LLP (legal).

n Dustin Daniels, member of Miller Johnson Snell & Cummiskey PLC

n Remos Lenio, partner at Tillerman & Co. LLC n Julie Metsker, executive director of ACG Western Michigan n Pete Roth, partner at Varnum LLP n Stephen Waterbury, partner at Warner Norcross + Judd LLP n Jeff York, member of Dickinson Wright PLLC

MiBiz / FEBRUARY 15, 2021

M+A DEALS & DEALMAKERS AWARDS

TRIBES LEVERAGE SIMILAR INVESTMENT PHILOSOPHIES IN MCKAY TOWER TRANSACTION By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com

he seeds for the joint purchase of the iconic McKay Tower building in downtown Grand Rapids took root years ago when the CEOs at Waséyabek Development Co. LLC and Gun Lake Investments started talking about doing deals together. Gun Lake Investments CEO Kurtis Trevan and Waséyabek President and CEO Deidra Mitchell both started in their respective nongaming tribal economic development roles at about the same time, and both also planted their companies’ headquarters in downtown Grand Rapids. Along with economic development leaders from other American Indian tribes across West Michigan, Trevan and Mitchell began to meet on a quarterly basis to build inter-tribal relationships and share collective experiences. Over time, a common theme emerged.

“We’d talked for years about how tribes should be partnering with each other and how it doesn’t happen as frequently as it should,” said Trevan, a citizen of the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, or Gun Lake Tribe. Trevan got word through a relationship with a broker that the Borisch family’s Steadfast Property Holdings planned to put McKay Tower on the market, and immediately took an interest in the commercial property. Initially, he planned to pursue the transaction solely for Gun Lake Investments, with the tribal entity taking on “some level of debt” to finance the purchase. “Before we moved too far with that conversation, we thought, ‘This feels like it could be a really good transaction to partner on with Waséyabek,’” Trevan said, noting his familiarity with the firm’s investment strategy and governance. His instincts proved correct. “Kurt called and we talked about it, and I said, ‘That’s perfect — that would be a great co-acquisition,’” said Mitchell, whose firm serves as the non-gaming economic development arm of the

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Waséyabek Development Co. President and CEO Deidra Mitchell (left) and Gun Lake Investments CEO Kurtis Trevan. MIBIZ PHOTO BY KATY BATDORFF Nottawaseppi Huron Band of Potawatomi. “Like any strong relationship, it requires a lot of communication up front about how we’re going to manage the building and what the expectations are for making improvements and returns. It makes it a little more complicated, but that’s true of any partner that you go into business with.” The two firms worked together on due diligence and ended up closing on the $17.5 million transaction on Jan. 13, 2020. Because of their similar governance structures, they were able to negotiate the transaction at the management team level, which is notable in Indian Country where many economic development firms require tribal governments to sign off on projects. Gun Lake Investments and Waséyabek split the cost evenly and share 50-50 ownership of the 18-story, 154,000-square-foot building at 146 Monroe Center St. in the heart of the downtown business district. The joint acquisition was selected as the winner in the real estate category of the 2021 MiBiz Deals of the year Awards. To run the building, Trevan suggested a governance structure modeled after best practices from family owned business enterprises by creating a three-person board with a seat for each of the tribally owned firms and an independent third-party member. The partners recruited Scott Spoelhof from Holland-based Bayside Capital Management LLC to fill out the board. “With large buildings like McKay, there’s maintenance, capex and other improvements that we need to invest in to make sure the building remains in great shape, and those things cost a lot of money,” Trevan said. “You need to balance how does that fit within your strategies — and we have two distinct sets of strategies between GLI and Waséyabek — and ultimately what are your key stakeholders expecting? “We needed to have somebody with some independence who’s going to see things with a different perspective and help us elevate out of the weeds a bit. It’s really provided a lot of clarity around how we plan for this in a way that we can all be aligned.” Similarly, GLI and Waséyabek opted to work with a property management firm that aligned with their values and could deal with the day-today operations, ultimately selecting Grand Rapidsbased Rockford Construction Co. Inc. for that role. “Neither Kurt nor I had heavy experience in commercial real estate, so their experience across the industry has been very, very helpful,” Mitchell said. In particular, Trevan cited Rockford’s assistance as being a “huge asset” after McKay Tower suffered damage during the social unrest last spring.

REAL ESTATE + DEVELOPMENT GUN LAKE INVESTMENTS Top executive: Kurtis Trevan, CEO Annual sales: Not disclosed Total full-time West Michigan employees: 350 Company: Non-gaming economic development entity of the Match-E-BeNash-She-Wish Band of Pottawatomi Indians with a portfolio of 15 investments, including four operating companies Advisers: Rosette LLP (legal), BDO USA LLP (accounting), Barnes & Thornburg LLP (legal for the tribal partnership)

WASÉYABEK DEVELOPMENT CO. LLC Top executive: Deidra Mitchell, President & CEO Annual sales: Not disclosed Total full-time West Michigan employees: 93 (330 across the portfolio) Company: Non-gaming economic development entity of the Nottawaseppi Huron Band of Potawatomi Indians that includes commercial businesses, federal contracting firms and commercial real estate Advisers: Dickinson Wright PLLC (legal), Barnes & Thornburg LLP (legal for the tribal partnership)

So far, the partners remain bullish on the future of the building and the prospects of continuing to work together. While the pandemic affected the building’s retail tenants most acutely, the commercial and residential space has remained “remarkably stable,” Mitchell said, noting her belief that the iconic building will hold its value for years to come under the tribal stewardship. “We’re excited to be here and feel extremely blessed to have that trust and relationship with Waséyabek,” Trevan said. “We did something that has happened very few times in Indian Country, so we hope that it serves as a model for what tribes can do together. We can be doing more of that, and I think that’s really important for our tribes and for diversification plans.” Visit www.mibiz.com

We’re helping people get better. Better access to affordable, quality care across Michigan. Better costs on procedures and prescriptions. Better ways to stay engaged in their health. And, as we continue working toward our vision and values, we believe things will only get—you guessed it—better.

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MiBiz / FEBRUARY 15, 2021

M+A DEALS & DEALMAKERS AWARDS

CHOICEONE’S TWO RECENT ACQUISITIONS PROVIDE LESSONS ON VIRTUAL DEALMAKING By MARK SANCHEZ | MiBiz msanchez@mibiz.com

he two acquisitions ChoiceOne Financial Services Inc. closed over a 15-month period tripled the size of the Spartabased bank holding company. ChoiceOne first acquired County Bank Corp. in Lapeer, the parent company of Lakestone Bank & Trust. Billed as a “merger of equals” because of the banks’ similar size and culture, the $89 million all-stock deal that closed Oct. 1, 2019, doubled ChoiceOne’s assets to $1.3 billion and included 14 offices in parts of Lapeer, Macomb and St. Clair counties. After the deal closed, ChoiceOne moved from the OTC to the Nasdaq exchange, giving its shares greater liquidity and trading under the symbol COFS. Just three months later, ChoiceOne announced another deal with the acquisition of Community Shores Bank Corp. in Muskegon. The $21.5 million cash-and-stock transaction that closed July 1, 2020 added four more offices to ChoiceOne’s branch network — three in Muskegon County and one in Grand Haven — and more than $244

million in assets, extending the bank’s presence in the lakeshore market. Today, ChoiceOne Bank has 33 offices in West and Southeastern Michigan with $1.91 billion in total assets, plus a deeper talent bench and greater ability to absorb the high cost of technology and regulatory compliance. “They’ve really given us some scale, which has been very good for our clients, our employees and our shareholders,” President and CEO Kelly Potes said. T he t w o a c q u i s it ion s w on ChoiceOne Financial Services a 2021 MiBiz M&A Deals of the Year Award in the finance category. As a much larger bank, ChoiceOne today has a higher in-house lending cap of $17 million, compared to $10 million previously. The ability to write larger loans enables ChoiceOne to retain commercial clients as they grow, rather than refer them to another lender or syndicate a large credit request. “It allowed us to grow with our clients and to handle bigger relationships and not have to look at any participation with other banks,” Potes said. “We can handle the client’s whole needs at the bank. That was very much a big plus.” ChoiceOne completed the integration of Lakestone Bank & Trust in May

2020 during the COVID-19 pandemic. The Community Shores Bank acquisition was publicly announced just prior to the pandemic’s outbreak and work to close the deal and integrate the bank into ChoiceOne was done virtually. Going through that process virtually reinforces the best practice that a cultural fit remains the key to a good deal. That fit made both acquisitions go well, Potes said, particularly in the County Bank deal in which ChoiceOne’s senior management team post-transaction was an equal mix of executives on either side of the state. “When you’re looking at doing a deal, it’s not all about pricing, but also culture. Luckily we were blessed with the fact that we have a good cultural fit with both of these transactions, especially when we did the merger of equals with County Bank Corp. Because the sizes were so similar and you’re bringing together two management groups, you really needed to have a good relationship going into that, and we have,” he said. Despite the challenges of having to virtually integrate the ChoiceOne and Community Shores systems, “it went very well without a hitch,” Potes said. Knowing the Community Shores leadership well helped to smooth the integration process, as “everybody just rallied together and we made it happen,” he said. Potes believes the technology platforms used in completing the two

FINANCE CHOICEONE FINANCIAL SERVICES INC. Top executive: Kelly Potes, President and CEO Annual revenue: $15.6 million West Michigan employees: 232 Company: Full-service bank and financial services company

ChoiceOne Financial Services President and CEO Kelly Potes.

Advisers on the deal: ProBank Austin (financial) and Warner Norcross + Judd LLP (legal) for the County Bank Corp. acquisition; Donnelly Penman & Partners Inc. (financial) and Warner Norcross + Judd (legal) for the Community Shores Bank Corp. acquisition.

MIBIZ PHOTO BY KATY BATDORFF

deals virtually will prove useful should ChoiceOne pursue future transactions. “One thing that we learned is that you can do transactions virtually. So, I can see in the future, even when restrictions are lifted on social distancing, that these transactions and these conversions can be done more efficiently and be done virtually,” he said. “There’s always minor glitches here and there, but you’re going to have that whether it’s done virtually or not. We didn’t feel we really lost anything by doing them virtually.” After closing the two deals so close together, ChoiceOne remains interested in future acquisitions if the right opportunity arises. In the County Bank and Community Shores acquisitions, ChoiceOne staff who had yet to go through an acquisition — and were not with the bank when it merged in 2006 with the

former Valley Ridge Bank in Kent City — learned how to manage a transaction. “It really just enhanced everyone’s skills and got everybody up to speed on doing transactions, and I think that will pay dividends in the future. If we have future transactions that come up, we have a playbook on how to do it,” Potes said. “We have an appetite to grow, but it has to financially make sense and it has to culturally make sense on anything that we would look at. As those opportunities become available, we’ll certainly take a look at them.”

Congratulations to MiBiz M&A Deals & Dealmaker Awards finalists and winners, including John Kerschen, Charter President and Managing Partner, Dealmaker of the Year/Investor, for his leadership of the Charter Growth Capital Fund.

KNOW YOUR OPTIONS

Charter Capital Partners helps our clients understand the full range of M&A options available to them. We are adept at identifying the ideal strategy and timing to meet your goals, whether you want to grow your business or portfolio to the next level, or exit entirely. Our expertise includes business sale and acquisition, capital raise, business valuation, and succession planning. To learn more about your options and how we can help optimize your position, visit knowyouroptions.chartercapitalpartners.com.

Broker dealer services offered through M&A Securities Group, Inc. Member FINRA/SiPC, a separate entity from Charter Capital Partners and Charter Private Capital Management.

FEBRUARY 15, 2021 / MiBiz

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Acrisure’s success is no accident. Acrisure is already the fastest growing broker in industry history, backed by our exceptional Agency Partners. And in 2020, we acquired the insurance assets of Tulco, a leading provider of Artificial Intelligence. We’re combining our global distribution power with world-class AI expertise and transforming insurance brokerage and financial services.

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Winner: Mergers & Acquisitions, MiBiz 2020 MiBiz / FEBRUARY 15, 2021

M+A DEALS & DEALMAKERS AWARDS

TETRA THERAPEUTICS’ SHIONOGI DEAL BUILDS RESOURCES OF LARGE PHARMACEUTICAL COMPANY By MARK SANCHEZ | MiBiz msanchez@mibiz.com

fter years of raising millions in capital and federal grant funding for Tetra Therapeutics Inc. — which was developing a new drug that could potentially treat Alzheimer’s disease and a form of autism — Mark Gurney in 2020 finally found the big money he needed to get to the end. The Grand Rapids-based Tetra Therapeutics last spring sold to Japanese pharmaceutical company Shionogi & Co. Ltd. in a deal that could reach $500 million. Under the agreement, Shionogi & Co. acquired Tetra and its portfolio of drug compounds for treating Alzheimer’s disease, Fragile X syndrome and other brain disorders associated with cognitive or memory conditions. The Shionogi acquisition provided the financial backing that Tetra needed to conduct and complete later-stage clinical trials, secure regulatory approval, and bring the new drugs to market in the years ahead. The company today operates as a Grand Rapids-based wholly owned subsidiary of Shionogi and without the deal would have had to raise millions more in capital to support the upcoming later-stage clinical trials. “We now have the resources of a large pharmaceutical company behind us. That gives us greater speed and will still retain the same flexibility of a startup,” said Gurney, Tetra’s chairman and CEO who founded the company in 2011.

LIFE SCIENCES TETRA THERAPEUTICS INC.

Tetra’s deal with Shionogi & Co. won a 2021 MiBiz M&A Deals of the Year Award in the life sciences category. While specific terms of the deal that closed May 26, 2020, remain undisclosed, the total transaction value may reach up to $500 million if Tetra Therapeutics meets certain regulatory and commercial milestones. The deal followed a prior $35 million strategic investment Shionogi & Co. made in Tetra Therapeutics in late 2018. Prior to the Shionogi deal, Tetra conducted research and development on its new drug compound, known as BPN14770, at the Southwest Michigan Innovation Center in Kalamazoo with the backing of capital from private investors and $27 million in federal grant funding. Investors in Tetra included Grand Rapids-based Grand Angels and its Ka-Zoo Angels and Muskegon Angels affiliates, Kalamazoo-based Apjohn Group LLC, Traverse City-based Northern Michigan Angels, Ann Arbor SPARK, the Michigan Economic Development Corp.’s Invest Michigan fund, and the Bioscience Research & Commercialization Center (BRCC) at Western Michigan University, plus a number of local high net worth individuals. One of the largest exits ever recorded for a Michigan-based life sciences startup, the deal generated a strong return on investment for West Michigan-based investors who backed Tetra Therapeutics early. Investors in a $7.2 million Series A capital round Tetra raised in 2016 got a return of five times their

Top executive: Mark Gurney, Chairman and CEO Annual sales: Not disclosed

Tetra Therapeutics Chairman and CEO Mark Gurney. MIBIZ FILE PHOTO original investment. Participants in an earlier July 2013 debt offering got an ROI that’s close to 13 times their investment. “That was one of those exits that an earlystage investment fund counts on — that one out of 10 returns that covers the others. So, it was very successful,” BRCC Executive Director Stephen Haakenson told MiBiz last May. “This allows us to continue to put further funds out the door.” The BRCC invested $450,000 in Tetra and received an ROI that was in the “many multiples,” Haakenson said. Tetra has reported “quite encouraging” results from a mid-stage trial involving 30 patients at Rush University Medical Center in Chicago, where the company has worked with renowned researcher Dr. Elizabeth Berry-Kravis on its compound to treat Fragile X syndrome, an orphan disease that affects about 60,000 people in the U.S. Tetra expects to move into a Phase 3 trial involving upwards of 300 Fragile X patients in mid-202, a step that’s needed for seeking approval from the U.S. Food and Drug Administration that could come in late 2023. While Tetra prepares for the Phase 3 trial for Fragile X, Shionogi is planning to handle an

West Michigan employees: 11 (Grand Rapids and Kalamazoo) Company: Startup drug developer Advisers: Honigman LLP and Cooley LLP (legal); Nomura Securities Co. (financial)

upcoming Phase 2b study on the company’s compound to treat Alzheimer’s disease. The Osaka, Japan-based Shionogi in a recent presentation on quarterly results listed the Tetra compound’s potential to treat Alzheimer’s and Fragile X among eight core R&D projects in its drug pipeline. As he prepares to lead Tetra toward the final legs of a lengthy journey to market, Gurney said the best practice he advises other life sciences startups “is the same as voting — vote early and vote often,” a reference to the old Chicago tongue-in-cheek political expression. “For dealmaking, you need to start early and you need to keep at it,” said Gurney, whose first meeting with Shionogi came in 2017. “Doing a deal like this for the acquisition of your company … takes a while. People need to evaluate the science,” he said. “It’s very difficult to achieve an exit.”

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FEBRUARY 15, 2021 / MiBiz

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PRIORITY HEALTH MOVES TO BECOME MORE STATEWIDE HEALTH PLAN AFTER TOTAL HEALTH MERGER Acrisure co-founder, President and CEO Greg Williams. COURTESY PHOTO By MARK SANCHEZ | MiBiz msanchez@mibiz.com

riority Health wanted to build a book of business in Southeast Michigan for its Medicaid HMO. Total Health Care Inc. wanted to connect with a larger partner to better compete. Leaders of the two nonprofit health plans who had known each other for years started talking in early 2019 about what they could offer one another and potentially partner on. By August of that year, they worked out a deal to merge Total Health into the Grand Rapidsbased Priority Health, Michigan’s second-largest health plan with 1 million members enrolled statewide in group, individual, Medicare and Medicaid policies. “It was a great combination of two longstanding Michigan-based health plans,” Priority Health Chief Financial Officer and Senior Vice President of Operations Mary Anne Jones said. “It was a great complement and fit for Priority Health and Total Health to come together. We are statewide and have a very strong focus in Southeast Michigan, but we were not able to serve the Medicaid population there. To be able to bring that into our offerings just made a lot of sense.” Judges in MiBiz’s 2021 M&A Deals of the Year Awards named Total Health Care’s merger into Priority Health as the winner in the health care category. One of the oldest health plans in Michigan that was formed in 1973, Total Health Care at the end of 2019 had a combined membership of more than 87,000 members. That included 48,919 members enrolled in its Medicaid HMO, and another 39,412 enrolled in group and individual commercial policies sold through Total Health Care USA. Should the state re-bid Medicaid HMO contracts in the next few years, the Total Health merger puts Priority Health in a stronger position, Jones said. “It really has moved us to become a more statewide (health plan) in serving Medicaid, and that’s very important in our mission,” she said.

HEALTH CARE PRIORITY HEALTH Top executive: President Praveen Thadani, who succeeded former CEO Joan Budden in January after her retirement Annual revenue: About $5 billion (2020) West Michigan employees: About 1,600 Company: Statewide health plan with group, individual, Medicare and Medicaid policies Advisers on the deal: Did not disclose

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AMID HIGH VOLUME OF DEALS, ACRISURE BREAKS INTO ARTIFICIAL INTELLIGENCE Priority Health Chief Financial Officer and Senior Vice President of Operations Mary Anne Jones. COURTESY PHOTO Total Health Care CEO Randy Narowitz described the deal as “a great fit for both companies.” The merger into Priority Health would give Total Health Care “additional resources and stability, and allow us to continue to provide our members with the quality care they have come to expect from Total Health Care at a price they can afford,” Narowitz said in an announcement of the merger. Under terms of the deal that closed Jan. 1, 2020, Priority Health and Total Health Care committed to sharing best practices for the Medicaid market in Michigan. Priority Health also committed $25 million over three years for a foundation to support health initiatives to improve care and social determinants of health in the Detroit area. Forming the foundation was “the most interesting” and a unique aspect of the deal, Jones said. The foundation has been receiving grant requests from organizations across Southeast Michigan and should award its first grants soon, she said. Since the deal closed, Total Health Care has operated as a subsidiary of Priority Health as its two health plans focus on Detroit and surrounding communities. Total Health’s structure as a subsidiary could change as Priority Health now works this year to fully integrate the company’s operations and HMO plans, Jones said. “From an integration perspective, we really took the first year of 2020 to just make sure that we kept the Total Health operations and systems in place to assess how we want to do the integration. In 2021 we are working on integrating our back-office systems and employees into combined teams,” she said. “They will continue underneath Priority Health. We’re still assessing if they will continue long term as subsidiary entities or products within Priority Health, but we will be continuing the Total Health products.” The initial discussions in 2019 were key to bringing the two companies together. Executives focused first on culture and fit that set the foundation for a “very thoughtful, holistic” process today that focuses on processes, technology and “how we can best combine our talent and teams,” Jones said. “The relationships we built before we even started discussing a merger positioned us really well to know that we had a strong fit,” Jones said. “We intentionally took the time to really assess how we wanted to go through our integration processes and build those relationships, and that has built a lot of confidence and trust with the Total Health staff and leadership team there.”

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

reg Williams was looking for a company that could move global insurance brokerage Acrisure LLC into the world of artificial intelligence. He found the right one in tech entrepreneur Thomas Tull and his AI company, Pittsburgh-based Tulco LLC. After a mutual investor in both companies introduced Williams and Tull, the two met in Pittsburgh in early 2019. They quickly found common ground and soon formed a joint venture that ultimately led to Acrisure buying Tulco’s insurance practice. The all-stock transaction, valued at $400 million, closed July 29, 2020, providing the Grand Rapids-based Acrisure the artificial intelligence and machinelearning technology that Williams sought. “That transaction singularly transforms every facet of our business,” said Williams, Acrisure’s co-founder, president and CEO. crisure’s acquisition of Tulco’s insurance practice was named a winner in the 2021 MiBiz M&A Deals of the Year Awards in the professional services category. Williams and Tull decided initially to “test the waters” through a joint venture, known as Altway Insurance, that narrowly focused on life insurance and other individual benefits. The joint venture validated the role of AI and a digital platform in the insurance industry, as Altway Insurance generated sales growth of 10 percent or more a week for 24 straight weeks during the COVID-19 pandemic, Williams said. The joint venture’s success led to last year’s acquisition. Tulco’s insurance practice became Acrisure Technology Group, the Austin, Texasbased AI division led by Tull, who is a significant minority shareholder in Acrisure. “After almost half a year of 10 percent growth per week, I said to Tom, ‘We’ve kind of proven the case. This was a success we could only dream about. We really need to then take this AI capability and this AI talent and apply it to and deploy it across all Acrisure products,’” Williams said. The AI and robotic-processing ability that the acquisition gave Acrisure now gets used in back-office administration and sales and marketing functions, he said. In the back office, robotic processing saves about 1,800 hours of work a week and improves the productivity and efficiency of Acrisure staff, Williams said. The technology has not displaced staff at the fast-growing company, which recorded 2020 revenue of about $2.1 billion, more than three times the $650 million of 2017. “We’re still going to continue to hire, still going

PROFESSIONAL SERVICES ACRISURE LLC Top executive: Greg Williams, cofounder, president and CEO Annual sales: $2.1 billion in 2020 West Michigan employees: 625 Company: Global insurance brokerage Advisers on the deal: Varnum LLP and Skadden, Arps, Slate, Meagher & Flom LLC (legal)

to continue to grow. As we’re bringing more work into the business and into the home office (in Grand Rapids), we’re just doing that with the help of robotic processing,” Williams said. For clients, Acrisure uses AI in modeling to gain better insights on their risk, “bringing opportunities and identifying opportunities for our sales force they wouldn’t otherwise have,” and creating a competitive advantage, he said. “It gives us that insight to where that risk profile exists to where we know we can help them,” Williams said. “It really is identifying, in some cases, the unmet needs or the unexpressed needs of our clients that we should be talking to them about that we haven’t. The insights gained from this are vast and significant in terms of how we can help clients, while at the same time grow our business.” One of the world’s largest insurance brokerages, Acrisure has nearly 600 offices worldwide and for years has grown rapidly through an aggressive acquisition strategy. The company last year made 110 acquisitions and another 30 have closed or are under letter of intent in 2021. Acrisure put together the Tulco deal while maintaining a torrent of acquisitions in 2020. The company for years has by far been the largest acquirer of independent insurance agencies in the U.S, closing on 464 acquisitions from 2016 to 2020, according to Optis Partners LLC, a Chicago-based firm that tracks M&A in the insurance industry. Key to the Tulco deal, just as with buying an agency, was following long-held best practices. “Philosophically, we’ve always placed at the top of the list the party that we’re doing a deal with, the integrity of the people, the cultural fit and the things that we emphasize,” Williams said. “All of those things are really relevant to our standard, everyday M&A and that was also relevant here.” MiBiz / FEBRUARY 15, 2021

M+A DEALS & DEALMAKERS AWARDS

ZEIGLER AUTOMOTIVE KEEPS M&A MOMENTUM BY ADDING LUXURY BRANDS TO PORTFOLIO By JAYSON BUSSA | MiBiz jbussa@mibiz.com

Zeigler Automotive Group President and CEO Aaron Zeigler. MIBIZ FILE PHOTO

espite its wide footprint throughout a tristate area, Zeigler Automotive Group still found itself lacking a few of the big name luxury brands in its portfolio. “The one franchise I got asked about most was Mercedes,” said Aaron Zeigler, president and CEO of Kalamazoo-based Zeigler Automotive Group, which operates 75 franchises and 29 stores throughout Michigan, Indiana and Illinois. “That was probably No. 1 on our wish list. The second one I got asked about the most that we didn’t have was Land Rover.” Zeigler and his team were able to check those and other names off of their wishlist at the beginning of 2020 when the company acquired three luxury dealerships from Barrington, Ill.-based Motor Werks Auto Group. The deal was recognized as the winner in the 2021 MiBiz M&A Deal of the Year Awards in the retail category. Through the deal, Zeigler Automotive Group acquired an Infiniti store (its second in the market) and a Mercedes-Benz and Sprinter store in Hoffman Estates, Ill., in addition to a Jaguar Land Rover store in nearby Schaumburg, Ill. Zeigler also deals Chrysler, Alfa Romeo,

‘LANDMARK PROJECT,’ COLLABORATION BRINGS PERRIGO HEADQUARTERS TO MEDICAL MILE By KATE CARLSON | MiBiz kcarlson@mibiz.com

venture between Rockford Construction Co. Inc. and Rockford Development Group, Walsh Construction Co. Inc. and Walsh Investors, ocal economic development leadMurphy Development Group LLC and Michigan ers have long sought to bring a global State University. headquarters to downtown Grand Facilitating the relocation also involved the Rapids, and it will soon become a realMichigan Economic Development Corp., the ity as Perrigo Co. plc moves its North city of Grand Rapids and The Right Place Inc. American corporate offices to the Medical Mile. Finalizing plans for Perrigo to relocate to Grand The pharmaceutical giant will occupy three Rapids took about a year and a half, said Birgit upper floors of a building in Michigan State Klohs, the retired president and CEO of The Right University’s Grand Rapids Innovation Park at Place who led the economic development organization for 33 years. “These projects are complex,” said Klohs, whose retirement was effective at the end of January. “There is a lot of work that goes on under the surface when you pull together the resources, and hiccups that happen that you never see once the deal is done.” The complex nature of the project earned it recognition as a 2021 MiBiz Deal Klohs Mraz Kessler of the Year Awards winner in the economic 430 Monroe Ave. NW in what will be a $44.8 mildevelopment category. lion project. Perrigo announced plans to reloRockford Construction and Michigan State cate its offices to downtown Grand Rapids on University were already a well established team with Oct. 27, the same day the Michigan Strategic a high level of trust before the request for proposals Fund board approved a $2 million Michigan for the space at the innovation park in Grand Rapids Business Development Program grant, which was sent out, said Mike Mraz, president of Rockford was based on the anticipated creation of 170 Construction’s real estate development team. jobs in Michigan. A key piece of the equation that will help The deal to bring the Perrigo offices to downPerrigo’s employees integrate into the local town Grand Rapids was led by Health Innovation community involves the fact that Rockford Partners, a real estate and development joint Construction serves as the landlord of 700-800

FEBRUARY 15, 2021 / MiBiz

Maserati, Fiat and Chevrolet in the same market. The acquisition infused the regional dealership with 5,000 new units each year with a projected value of $350 million in sales annually. This boosts the company’s annual sales numbers to the neighborhood of $1.6 billion on 40,000 units sold. Per an early 2020 report by Automotive News, Zeigler Automotive Group was ranked No. 61 in dealerships nationwide for new car sales units, which was 15,888 vehicles and listed sales of almost $1.3 billion. The deal, which was prompted when Motor Werks approached Zeigler, was also the largest one for Zeigler in terms of price. Zeigler noted that Hoffman Estates and Schaumburg are highvolume markets in the Midwest. No stranger to scooping up available dealerships, Zeigler said that his team is able to streamline the integration process. “When we go to buy a new dealership, or multiple dealerships, the acquisition team will show up and get all the systems integrated so we mirror the systems we have in our other dealerships, which really streamlines things for us,” he said. “We were able, in this particular case, to bring those stores into our fold and really not miss a beat.” The deal was completed before the COVID-19 pandemic took hold in the U.S. Even through the pandemic, Illinois never shut down completely,

and Zeigler’s new dealerships had to crawl through a number of restrictions. Once restrictions were lifted, sales picked up in a big way. In fact, Zeigler has seen a sales bonanza company-wide throughout most of the pandemic, which has continued into 2021, when the business just recorded its best January ever. It also proved to be a good time to acquire the luxury brands that Zeigler Automotive Group did. “The luxury brands were more in demand than any other brands we had,” Zeigler said. “And I don’t know why that is. Even during the shutdown, they still performed well.” Zeigler continues to keep his ear to the ground for opportunities, and he expects significant M&A activity in this space as a whole. “I think there are going to be a lot of opportunities out there,” Zeigler said.

RETAIL ZEIGLER AUTOMOTIVE GROUP Top executive: Aaron Zeigler, President and CEO Annual sales: $1.6 billion Total West Michigan employees: 750 in West Michigan; 1,800 company wide Company: A Midwest auto group that features 29 locations throughout Michigan, Indiana and Illinois, featuring a wide variety of brands. Advisers on the deal: Varnum LLP

ECONOMIC DEVELOPMENT PERRIGO CO. PLC Top executive: Murray Kessler, president and CEO Annual net sales: $5 billion Total West Michigan employees: 4,000 Company: Generic pharmaceutical, wellness and self care product manufacturer

apartments downtown, as well as many restaurants, offices and retail buildings, Mraz said. “What we really strive to do is connect those employers and employees with an opportunity to live nearby and experience what downtown has to offer,” Mraz said. “That collaboration is already beginning. Companies are already working together even though the buildings aren’t completed yet.” “We all instantly thought it was a perfect fit for Perrigo,” Mraz added. “It really took many teams to bring this to fruition. This is a landmark project for us and we’re very proud to be able to be a part of it.” Perrigo is domiciled in Dublin, Ireland, but is run from its existing offices in Allegan, where the company was founded more than 130 years ago. Despite Perrigo’s local ties to West Michigan, a company as large as Perrigo had other choices for its North American headquarters, Klohs told MiBiz. The company was also considering Chicago and Southwest Florida for its office. One of the big selling points was Grand Rapids’ Medical Mile, which company CEO Murray Kessler previously told MiBiz has the

A rendering of Perrigo’s planned headquarters in downtown Grand Rapids. COURTESY PHOTO potential to become the “Silicon Valley of self-care.” “The development of Medical Mile and that ecosystem that has developed around health and life sciences over the last 20 years was one of the key drivers of this project,” Klohs said. The project is part of creating an ecosystem that will draw other companies to invest in downtown Grand Rapids, Klohs said. Helping to secure the Perrigo deal was a capstone project to end her career on at The Right Place, and even more noteworthy because it was all done virtually during the COVID-19 pandemic, Klohs said. “If you would have told me two years ago that we could do a deal of this magnitude without ever meeting with the company in person, I would say, ‘No way,’” Klohs said. “It can be done. Economic development is a team sport and you never pull this off without collaboration from others. I’m very proud this all came together.” Visit www.mibiz.com

‘EVERYTHING KIND OF FELL INTO PLACE’ WITH HANNAH LAWRENCE’S FOXBRIGHT ACQUISITION By JAYSON BUSSA | MiBiz jbussa@mibiz.com

annah Lawrence remembered the car ride home after closing on the acquisition of her first business — a moment of brief panic. “I remember just thinking, ‘What did I just do?’” laughed Lawrence, who purchased Grand Rapids-based Foxbright in January of 2020, becoming the new owner of a company that specializes in website and communication solutions for schools. “I took on some debt to finance the acquisition,” she added about her apprehension. “You go from not a whole lot in debt to suddenly you’re on the line for a whole lot and you have employees that you need to make sure you pay. There is a lot of responsibility associated with that. But, a few months in, you settle into it and it’s like, OK, things are going fine.” A little fleeting buyer’s remorse is natural in a deal involving an individual buyer like Lawrence. Her purchase of Foxbright earned the 2021 Deal of the Year status in the technology sector of MiBiz’s M&A Deals and Dealmakers Awards. Still, business ownership was seemingly always in the cards for Lawrence, who has experience in both finance and the project management side of technology. She previously served as CFO of Grand Rapids-based property management firm Eenhoorn LLC and then went on to work for Northgate Resorts, which is primarily run by her father and brother and manages a portfolio of camps and resorts. She was bitten by the entrepreneurial bug when she managed marketing, financing and sales operations for a home sales entity called Dolce Vita in Arizona, which was being positioned to sell. “I had a lot of fun with that small business aspect, having control over sales and marketing — it triggered the desire to really look for something,” Lawrence said. That’s when Foxbright became available after founder Catherine Ettinger planned to exit a business she established in 2002 with Paula Whisman, who remained with the company as an employee. “I felt comfortable coming in with very little tech experience and being able to focus on areas that they haven’t historically — the sales, marketing and business side versus the technical side,” Lawrence said. “Everything kind of fell into place, from the size of the company … as well as the cultural fit. To me, that was huge.” Lawrence said that the transaction was smooth. However, not long into her tenure Foxbright, the COVID-19 pandemic dominated public life and thrust schools into relative chaos. “There were some specific sales and marketing agendas I wanted to pursue in the first 13 months — some product changes — but I decided that I’m not going to get really aggressive about this because of the COVID situation,” she said. “I needed to put the brakes on some of it and really focus on relationships with the team and making sure they knew I wasn’t going to come down on them for ridiculous things during this time.”

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Mel Trotter Ministries President and CEO Dennis Van Kampen. COURTESY PHOTO

MEL TROTTER’S RECENT MERGERS SIGNAL A COMING SHIFT IN PHILANTHROPY

Foxbright owner Hannah Lawrence. MIBIZ PHOTO BY KATY BATDORFF

Clients and potential clients were generally quiet in March amid all the uncertainty. However, business has picked up since. Lawrence and the team were still productive in COVID-mired 2020, releasing the fifth and latest version of Foxbright’s content management system in October, which created a modern, relevant, user-friendly platform for clients. Lawrence also grew Foxbright’s client base by 7 percent in 2020. Some of that growth can be attributed to COVID-prompted interest in addition to the emphasis Lawrence has put on the sales and marketing piece, including working with a third party for (pay-per-click) and SEO marketing campaigns. “It’s been a lot of trial-and-error,” Lawrence said. “My next step is really looking to bring on a sales individual and a marketing individual, and bring that in house and really focus on client growth from a development side. The product we offer is really solid.”

TECHNOLOGY FOXBRIGHT Top executive: Hannah Lawrence, president and owner Annual sales: Around $800,000 Total West Michigan employees: Four (One part-time employee) Company: Provider of website and communication solutions to the education industry Advisers on the deal: First National Bank of Michigan, Bratschie & Born P.C., D. K. Weiss, Holt & Associates PLLC (buyer side). Warner Norcross + Judd LLP, VanderPloeg, Bergakker & Associates (seller side). Calder Capital (broker).

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

NONPROFIT

el Trotter Ministries’ acquisitions of two other Grand Rapids nonprofits in 2020 marked the start of a significant, long-term shift for the nonprofit that executives say will fundamentally change the organization. In early January 2020, Mel Trotter announced a merger with Heartside Ministry, which provides similar services for individuals experiencing homelessness. The primary driver of the deal was to reduce duplicate services, said Mel Trotter President and CEO Dennis Van Kampen. For about two years, officials with the two organizations had discussed ways to collaborate before the merger was finalized. That collaboration included sharing human resources responsibilities, facilities and maintenance and I.T. support that Heartside would contract through Mel Trotter. Mel Trotter announced a second merger in July 2020, this time with Grand Rapids-based Next Step of West Michigan, a nonprofit that provides job opportunities and performs construction, property maintenance, assembly and production services. The pair of deals earned Mel Trotter the Deal of the Year Award in the nonprofit category. While Heartside provides similar services as Mel Trotter, Next Step is “really a business. They employ people to either create a product that goes to the market or to flip foreclosed homes into low-income housing,” Van Kampen said. The Next Step merger aligned with Mel Trotter’s long-term vision of boosting its revenue through social enterprise businesses. Over the next 10 years, Mel Trotter seeks to derive 70 percent of its revenue through these enterprises, shifting from a mostly donor-based model. “Our gain was a workforce development program we didn’t have to create,” Van Kampen said. “A social enterprise allows us to fund growth that’s necessary to fulfill our vision, which is ending homelessness. We have a massive housing crisis, which not only contributes to people becoming homeless but also makes it far more difficult for them to get out of homelessness.” He added: “These mergers allow us to have a greater impact on the housing crisis.” The wheels are already in motion since the Next Step merger. In December, Next Step acquired a vacant industrial property across the street from its south-side Grand Rapids headquarters. Van Kampen said preliminary discussions

MEL TROTTER MINISTRIES

Top executive: Dennis Van Kampen Total budget: $13.25 million West Michigan employees: 198 Company: Faith-based nonprofit focused on homelessness and recovery Advisers: Beene Garter LLP (accounting) and David, Wierenga, and Lauka PC (legal)

have already started around converting the site to low-income or market-rate housing. Mel Trotter has also previously purchased two homes from Next Step to help move people out of homelessness. In 2021, Mel Trotter anticipates bringing another four or five houses online that Next Step has purchased and redeveloped. In the end, the two mergers served separate purposes for Mel Trotter: merging duplicate services in the case of Heartside, and growing its workforce development and housing resources with the addition of Next Step. Meanwhile, the COVID-19 pandemic brought some organizational challenges when merging the organizations, on top of what Van Kampen described as routine cultural changes that come when companies join forces. The experience also taught company leaders about the value of having sound business decisions driving such a move. “One thing that’s critical is the business plan — the numbers have to work,” he said. “One thing that frustrates me about nonprofits in general is they tend to not follow good business practices because they’re providing a social service. I’d argue: If you want to have the greatest impact with services you provide, then you have to follow the same principles and practices a business would.” Van Kampen maintains that the deals position Mel Trotter well in a shifting philanthropic landscape. “I’m very confident in saying the staff and leadership of all three organizations believe that what we did is the right thing to do,” Van Kampen said. “One way or the other, this is the future of nonprofits. In 10 years, we won’t have as many standalone nonprofits as we have today because the donor support isn’t there. I think we’re going to see many more nonprofits do exactly what we did.” MiBiz / FEBRUARY 15, 2021

M+A DEALS & DEALMAKERS AWARDS

JEFF LAMBERT OVERSEES STRONG YEAR FOR ACQUISITIONS, STARTUPS

PATIENCE IN A PANDEMIC HELPED GUIDE A BUSY YEAR FOR JEFF OTT By MARK SANCHEZ | MiBiz msanchez@mibiz.com

By JAYSON BUSSA | MiBiz jbussa@mibiz.com

s the COVID-19 pandemic was just starting to set in last spring, Jeff Lambert jotted down the words “positively legendary” on a sticky note. For the Lambert & Co. CEO, it was a reminder to make 2020 a memorable one, and by most standards, it was. Lambert, whose company stands as the largest public relations and investor relations firm in Michigan, said that 2020 was the most active year in company history, complete with three different acquisitions and launching two startups. “Any one of those would have been a highlight of a year in the past,” said Lambert, who was named winner in the executive category of the 2021 MiBiz M&A Dealmakers of the Year Awards. Lambert & Co. gobbled up deals in 2020, which kicked off with a December 2019 deal that saw an acqui-hire of Michelle Olson and her Phoenix-based team, who were part of New York-based Fingerpaint Marketing. The move netted Lambert & Co. clients in automotive and mobility and real estate in addition to expanding its national footprint. Just two months later, Lambert & Co. acquired New York-based Casteel Schoenborn Investor Relations & Corporate Communications, which has a seasoned investor relations practice with a specialty in financial services and the banking sector. “That was in an area that’s national expertise for us — investor relations,” Lambert said of the CSIR deal. “So, we’re a top five investors relations

EXECUTIVE JEFF LAMBERT Company: Lambert & Co. Annual sales/revenue: $15.5 million Total West Michigan employees: 75 Company: Michigan’s largest public relations and investor relations firm. Lambert is also owner of Fairly Painless Advertising, founder of fintech startup TiiCKER, and partner in diversity, equity and inclusion consulting firm EQUALSIGN. Company Advisers: Warner Norcross + Judd LLP (legal), Camber Engage, K&L Gates (on the TiiCKER deal), Mercantile Bank of Michigan (financial), EHTC (accounting).

FEBRUARY 15, 2021 / MiBiz

Lambert & Co. CEO Jeff Lambert. COURTESY PHOTO

firm nationally and if there is any IR firm for sale, we’re looking at it nationwide.” In the spring of 2020, Lambert & Co. made a local acquisition in West Michigan-based Fairly Painless Advertising, a 30-year creative services agency. The deal, which was completed at the height of the pandemic, added copy writers, web developers and graphic designers to Lambert’s strategic communications and capital markets team. “The Fairly Painless acquisition was really in response to our clients looking for more depth and integrated marketing and advertising so it made sense to add that 30-year track record to Lambert,” he said. Finally, Lambert & Co. acquired the PR team of Houston-based national advertising and media buying firm 9thWonder, entering into a joint venture with the top-50 agency in which the duo will continue pursuing additional acquisitions. “The addition of 9thWonder and joint venture was to take the Fairly Painless platform and put it on steroids — to really be able to have a national and global brand strategy firm in our family of companies,” Lambert said. Deals aside, Lambert & Co. also launched fintech startup TiiCKER, which uses incentives to convert retail investors into consumers while also getting consumers to invest in the brands that they enjoy and interact with regularly. Also, Lambert & Co. funded and launched a minority- and woman-owned diversity, equity and inclusion consultancy and diverse board development firm called EQUALSIGN. The firm landed clients spanning higher ed institutions, nonprofits and public companies, and was timely in a year that saw racial tensions boil over. The breakneck pace is not one that Lambert said his company will slow down any time soon, noting that Lambert & Co. has the goal to complete two acquisitions in 2021 in addition to launching one innovation or startup. While the COVID-19 pandemic certainly threw its share of hurdles at Lambert throughout the acquisitions process, he did come away learning a few of the benefits that come with this socially distanced approach at buying and integration. “When looking at multi-market acquisitions or certainly non-local acquisitions, the ability to do onboarding, training and even culture build has gone virtual so the speed of integration is actually magnified,” Lambert said. “Honestly, we were concerned about the impact on our M&A relative to COVID. It actually will become part of our playbook — the combination of virtual and in-person.”

s the economy abruptly ground to a halt last spring under COVID-19 restrictions, Jeff Ott stayed busy. Working from home, he was the main legal counsel for four bank transactions. A couple of the deals closed prior to the pandemic’s onset, while the legal work for others remained in progress and continued virtually amid the state-imposed restrictions. “It was a very odd year, obviously, and the deal work dropped off. But I was fortunate to have a number of transactions that were in the works essentially right before the pandemic hit, so they played out over the course of the year,” said Ott, an M&A attorney and partner at the Grand Rapids office of Warner Norcross + Judd LLP who specializes in bank mergers. “As the pandemic kind of came on, it was interesting how people were looking at the transactions and saying,‘Oh, gee: What do we do here?’” Ott said. “It was just very good monitoring and confidence on the merger partners that got them through, closed the deals, and that was great.” Working with partner Charlie Goode, Ott led the legal teams that handled the transactions in the latter half of 2019 and into 2020, including two acquisitions by Sparta-based ChoiceOne Financial Services Inc. His work earned him an the 2021 MiBiz M&A Dealmaker of the Year Award as an adviser. The deals in which Ott led the legal teams were: • ChoiceOne’s $89 million acquisition of Lapeer-based County Bank Corp., the former parent company of Lakestone Bank & Trust, that was announced May 25, 2019, and closed Oct. 1, 2019. The two banks completed their integration in May 2020. • ChoiceOne’s subsequent $20.8 million acquisition of Community Shores Bank Corp. in Muskegon that was publicly announced Jan. 6, 2020, and closed July 1. The banks completed their integration in mid-October. • The $42 million acquisition of North Star Financial Holdings Inc., parent company of Main Street Bank in Bingham Farms, by Hancock-based Keweenaw Financial Corp., the parent company of Superior National Bank and Trust. Announced on Sept. 18. 2019, the deal closed Feb. 20, 2020 with integration in the second half of the year. • A $15 million debt offering in December 2020 by Sturgis Bancorp Inc., the parent company of Sturgis Bank & Trust, to support further growth across Southwestern Michigan. Some of the transactions overlapped and — in the ChoiceOne deal with Community Shores — extended into the pandemic that added complexity to the deal, reinforcing the need for patience when putting together a transaction and to work through problems as they arise. “It was different,” Ott said of 2020 and the pandemic-related challenges with keeping a

Warner Norcross + Judd Partner Jeff Ott. COURTESY PHOTO

ADVISER JEFF OTT, PARTNER Warner Norcross + Judd LLP

transaction going through remote meetings and electronic means for exchanging documents. “What I learned was when you’re dealing with things like the pandemic, you just have to be patient. You have to take each day as it comes and work through the deal with things that come up and move on to the next issue,” he said. “That’s fundamental with any transaction because you’re always going to get thrown a problem that you didn’t expect. … This one just happened to be a monster problem.” The legal work included negotiating a transaction and preparing merger agreements and supporting documents, preparing securities registration statements and disclosure documents, due diligence and reviewing reports from management, coordinating and preparing regulatory applications, reviewing contracts, and reviewing communications to shareholders and public announcements on the deals. Ott not only represented banks in the transactions but also public companies that had to pivot and hold their annual shareholders meetings virtually. That meant setting up electronic voting for shareholders to vote on proposals. When working on a transaction, Ott said the best practice to follow is focusing on fashioning a deal that’s based on what a client needs to accomplish, rather than getting the best of the other side. “I always approach the transaction not as a game or not trying to win negotiating points. I sit down with the client and figure out what their objectives are. There’s typically a couple of fairly significant business points that are important to your client, and it’s those things that you need to make sure fall on your side or as close to your side as possible,” he said. “At least from my perspective, being reasonable in the documents … creates a better deal atmosphere. It’s easier for the various parties to work together to address the points that need to be addressed for each side of a deal and get to the place where you want to be.” Visit www.mibiz.com

CHARTER CAPITAL PARTNERS FINDS NICHE WITH MIDDLEMARKET COMPANIES By MARK SANCHEZ | MiBiz msanchez@mibiz.com

ince launching in July 2019, the Charter Growth Capital Fund has made five investments and raised $31 million to make minority investments in growing, middle-market companies that need growth capital. The investments and activity to date validates John Kerschen’s view that there was an existing market gap and need for a new mezzanine fund in Michigan that targets the lower end of the middle market. Mezzanine funds typically serve a market upstream from the segment the Charter Growth Capital Fund intended to target. “We really found a good, underserved niche in the market. That was our belief before we started, but deal flow has been really good,” said Kerschen, president and managing partner at Grand Rapidsbased Charter Capital Partners. Kerschen runs the capital fund with two partners, Managing Director Hector Bultynck and Director Mike Palm. “In the low end of the market here there just aren’t that many choices for a business that

Charter Capital Partners President and Managing Partner John Kerschen. COURTESY PHOTO

INVESTOR JOHN KERSCHEN President and Managing Partner Charter Capital Partners

might be doing $1 million, $2 million, $3 million of EBITDA and they need that incremental capital to buy out a shareholder or expand to take on a new line of business, or to recapitalize their balance sheet. It’s beyond conventional lenders, and up-market there are other capital providers that will do this stuff, but they try not to come below $10 million,” he said. “Deal flow and just the need for capital in this segment of the market has exceeded our expectations.” Charter Capital Partners created the mezzanine fund to make debt or equity investments

— or a combination of both — in lower middlemarket companies in the Great Lakes region that need $1 million to $5 million in capital to grow, recapitalize the business, or make an acquisition. The fund targets profitable companies with annual revenues of $10 million to $50 million. In addition to the $31 million raised from more than 40 investors, predominantly from Michigan and the Midwest, the fund has secured another $10 million in available debt financing to support deals. The Charter Growth Capital Fund’s formation earned Kerschen the 2021 MiBiz Dealmaker of the Year Awards as an investor. Investments through the five deals collectively total about $15.5 million in subordinate debt and minority equity, Kerschen said. Focusing on the lower end of the middle market where there’s demand for capital and less competition for deals has enabled the fund to “pick our spots where it fits our criteria and we connect well with the entrepreneur,” he said. Kerschen expects the fund to invest in 12 companies by late 2022, and “then we’d have to think about what’s next.” Four of Charter Growth Capital Fund’s five investments were in companies based in Michigan. Among them are Keystone Solutions Group in Kalamazoo, which provides product design for the medical device, aerospace and automotive industries, and contract manufacturing for medical devices. Keystone Solutions President Jim Medsker told MiBiz in October 2019 that the company had grown revenues “in the 40-percent range” and that the next few years “could be similar,” with growth rates of 30 percent to 50 percent. “We’re growing like crazy,” Medsker said. “This helps us to stay on that path.”

The fund has also backed Ann Arbor-based driving school All Star Driver Education that operates in 16 states; Envirolite LLC in Coldwater that produces specialized foam products; and Traverse City Products, a producer of custom roll formed and stamped products. The fifth investment, which closed in January, was for die-casting company Premier Engineered Products in Abingdon, Va. Beyond the financing, the Charter Growth Capital Fund provides portfolio companies advice, guidance and other support. During the COVID-19 pandemic, Charter Capital Partners also worked with portfolio companies on plans for safe operations, developing contingency plans and projections, and helping them secure federal Paycheck Protection Program loans. “That was a big undertaking in the first year of the fund, getting through a major disruption in the economy and the manner of doing business,” Kerschen said. “We were able to retain their employees and help everybody just get through this challenging time. We had to hunker down in some cases, and in some cases we’re not back all of the way.” Meanwhile, Keystone Solutions transitioned in the pandemic to packaging and selling swabs, test kits, and various COVID-related products. Running the Charter Growth Capital Fund through the pandemic reinforced to Kerschen and his partners the need for business owners to guard against overleveraging their companies and “not to push your resources right to the edge.” “That’s ultimately what got our portfolio companies through the pandemic,” Kerschen said. “They had flexibility on their balance sheets and they had access to cash resources, so when business stopped or got disrupted, we had the flexibility.”

MATTHEW BAAS ASSEMBLES GROWING NUMBER OF DEALS FOR ‘MAIN STREET’ COMPANIES By JAYSON BUSSA | MiBiz jbussa@mibiz.com

ax Friar, managing partner at Grand Rapids-based M&A firm Calder Capital LLC, routinely found his company passing on potential clients because of the size of their businesses. Wanting to do business with these small, “Main Street” companies, Friar tapped thenintern Matthew Baas to develop a way to harness Calder Capital’s existing infrastructure and resources to provide a helpful, cost-effective service for this brand of businesses. That’s when the idea for Small Business Deal Advisors LLC was born and Baas, now age 24, found himself leading the venture. “Matt was instrumental in the founding and the initial running of all SBDA deals,” said Friar. “I would not have done it alone. Presently, Matt is the ‘glue’ — a CEO/COO that makes sure new clients are on-boarded, set up, the prep work is coordinated and clients get out to market (in a) timely (way).” Baas, who also works for Calder Capital, was this year’s Rising Star Award recipient for the 2021 MiBiz M&A Deals and Dealmakers Awards. Baas originally came to Calder Capital in 2016 as an intern following his sophomore year of college at Michigan State University. Assuming a role in which Baas said he learned about every phase of the M&A process, conversations soon sparked about ways to effectively serve the many

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smaller businesses — restaurants, retail shops, franchise re-sales — that submitted inquiries. These business owners found themselves trapped on an island, generally unable to foot the bill for the fees associated with working with a traditional M&A firm while finding cookie-cutter business brokers to be ineffective. “That was the biggest thing: You’re going to end up with kind of a crusty old business broker,” Baas said. “A lot of times, they have this Rolodex, and once they get through the Rolodex with calling for a day, they kind of just sit and wait. Typically their contracts are two years exclusive. The seller is stuck. Our goal was to shake that up.” The model adopted by SBDA featured a month-to-month, non-exclusive contract with the sellers along with 8 percent commission rates. The flexibility and affordability spoke to small business owners. “The flexibility around the non-exclusivity is a huge selling point,” Baas said. “If they’re able to go and find a buyer on their own without us involved, they don’t owe us anything.” SBDA officially launched in 2017 and closed its first transaction in October of that year — the sale of Echo Hair Salon in Grand Rapids. Small Business Deal Advisors has closed 40 transactions since its inception, including 19 deals in 2020. While it relies on Calder Capital for leads and other resources, SBDA is beginning to generate leads of its own. Baas’ jurisdiction is not confined to SBDA, either. He also leads larger transactions for Calder Capital.

RISING STAR AWARD MATTHEW BAAS Co-founder and Managing Partner, Small Business Deal Advisors Company: Small Business Deal Advisors was borne out of Grand Rapids-based M&A firm Calder Capital LLC. SBDA utilizes resources from Calder Capital and tailors them to suit the needs of small, “Main Street” businesses looking to buy or sell.

Friar pointed to a recent deal as an example of Baas’ handywork. In January of 2020, Baas managed the successful closing of Rochester, Ind.based Topps Safety Apparel. Before becoming a client of Calder Capital, Topps Safety Apparel was being advised by another investment bank. After years into the process without success, the company engaged Calder Capital and Baas was asked to lead the sale. He repositioned the business for relaunched marketing efforts and did extensive market research to identify hundreds of prospective strategic buyers and eventually sold it. Baas said his age doesn’t necessarily creep into the conversation much anymore — especially with so much experience to his name. “Back as an early intern (with Calder Capital) or with the newly founded SBDA, I tried to avoid conversations about my age and really

Small Business Deal Advisors Co-founder and Managing Partner Matthew Baas. MIBIZ PHOTO BY KATY BATDORFF

emphasized the team we had and the systems and infrastructure we built,” Baas said. “Luckily, it wasn’t critically important that I have decades of experience because of those factors. I was just willing to put my head down and work and the rest came together.” MiBiz / FEBRUARY 15, 2021

M+A DEALS & DEALMAKERS AWARDS

AUXO INVESTMENT PARTNERS MANAGES INTERNATIONAL COMPLEXITIES IN 2020 DEAL

AMERICA’S BRIDE OWNER REFLECTS ON EXPANDING BUSINESS, ACQUIRING BRIDAL GALLERY

By JAYSON BUSSA | MiBiz jbussa@mibiz.com

By KATE CARLSON | MiBiz kcarlson@mibiz.com

orking in the wedding industry during the COVID19 pandemic and widespread restrictions on large gatherings has been stressful for Jennifer Elenbaas. But the bridal shop owner successfully opened a new location of America’s Bride and acquired Bridal Gallery of Grand Rapids during 2020, despite many couples opting to cancel or push back their wedding dates. Elenbaas’ determination in growing her business has earned the Allendale resident the judge’s choice award in the MiBiz M&A Deal of the Year awards. “I’ve always definitely been a calculated risk taker with a lot of determination,” Elenbaas said. “Nobody could have predicted what happened to all of the businesses with the shutdowns, but I have big goals for myself, and weddings are going to come back.” America’s Bride has a staff of seven while Bridal Gallery includes five employees. Elenbaas had to hire people to fill many positions throughout 2020 as employees chose to leave the state or pursue a different career because of COVID-19 and operating restrictions for the business. “Since the new year, things have definitely started picking back up and I am preparing because gowns take six to eight months to come in on special order,” Elenbaas said. “We’re preparing to have a big selection to sell off the rack.” Elenbaas opened the first location of America’s Bride in 2014 at 746 Four Mile Road in Walker, which was recently converted into an outlet store stocked with wedding dresses ready to purchase off the rack. When Elenbaas learned Bridal Gallery was for sale, she knew she wanted to purchase the store, which has been a staple for West Michigan brides for the past several decades. Elenbaas first met with the founders of Bridal Gallery at the end of 2019, and worked with the owner couple — Judi and Ralph Tapp — and Small Business Deal Advisors’ Max Friar on the deal, which closed in September

FEBRUARY 15, 2021 / MiBiz

America’s Bride owner Jennifer Elenbaas. MIBIZ PHOTO BY KATY BATDORFF 2020. The Tapps first founded Bridal Gallery, located at 749 44th St. SE in Grand Rapids, in 1985. “Bridal Gallery has been around for so long and they have exclusive rights to sell Allure Bridals gowns, so I was very excited for that,” Elenbaas said. “This has been a dream for me, purchasing Bridal Gallery gives me more options.” Acquiring Bridal Gallery is not the only growth Elenbaas’ business saw in 2020. After hearing that the Dressbarn at 3165 Alpine Ave. in Walker was closing at the end of 2019, Elenbaas negotiated with the landlord and took over the 8,500-square-foot space to open a luxury flagship store for America’s Bride. Construction took place throughout 2020 and the store opened in October. White marble floors were installed with runway carpets while Swarovski crystal chandeliers hang from the ceilings. Elenbaas fell in love with wedding dresses when she was looking for her own in 2000, and ended up pushing back her wedding when she couldn’t find the right dress. This is where her passion comes from to help brides find the right dress for their big day, she said. “We wanted to create that experience that you dream about from the time you’re a little girl and putting a pillow case on your head and imagining your wedding one day,” Elenbaas said.

JUDGE’S CHOICE AMERICA’S BRIDE Top executive: Jennifer Elenbaas Annual sales pre-COVID: $750,000 at America’s Bride; $500,000 at Bridal Gallery Total West Michigan employees: 12 Company: Bridal gown retailer Advisers: Small Business Deal Advisors

he team at Grand Rapidsbased private equity firm Auxo Investment Partners has a saying that every deal has to die once before it closes. “That tends to be the way these things work — you often come across things that look like they could be deal killers and you just have to find a way to work through them,” said Jeff Helminski, managing partner of Auxo, which invests in growing founder- and family-owned industrial, manufacturing and businessservices companies. Helminski and his team at Auxo encountered plenty of those instances in its 2020 acquisition of Indianapolis-based Precision Parts Group Inc. Precision Parts Group’s two divisions included Paramount Tube, which manufactures highly engineered and custom small diameter spiral-wound and extruded tubular products, and Euclid Medical Products, which manufacturers single- and multi-dose pharmaceutical packing systems. Precision Parts Group operates out of the Midwest region with a joint venture operation in China. By closing on the deal in September of 2020, Auxo was able to establish a platform in the spiralwound tubular products and pharmaceutical packaging industries. By Helmisnki’s assessment, the transaction came with a particularly complex set of characteristics and dynamics that the team had to finesse in order to close the deal against the backdrop of the ongoing COVID-19 pandemic, a potential deal-killer of its own. The deal earned a nod in this year’s M&A Deals of the Year Awards as an honorable mention. The international component was one distinguishing factor of the deal, marking the first time that Auxo has acquired a company with international operations. However, the firm’s team members did have plenty of experience in the international space. The Chinese joint venture, called PPG International, was partially owned by a minority shareholder who led the operation in the country. The challenges arose when Auxo was unable to connect with members of the joint venture in person and — because of a travel ban — had to rely on a consultant for onsite operational due diligence. Auxo’s consultant splits time between Michigan and her home in Austria, but because

Auxo Investment Partners Managing Partner Jeff Helminski. COURTESY PHOTO of the travel limitations, even she had to rely on an additional partner on the ground in China to carry out the crucial phase of the deal. “Building a relationship with them, getting to know them and having them trust us was important and that was a challenge,” Helminski said. “In terms of the operational diligence, we had to rely on a third-party adviser really almost two steps removed.” Navigating the due diligence of an extremely niche market was also a hurdle for Auxo. The team worked to map out the state of the market, determine where PPG stood in the space, uncover opportunities to dominate the industry and cultivate industry relationships. Auxo tackled this through consulting with industry experts and conducting independent research, which was a challenge during a time of economic and geopolitical uncertainty. A New York City-based private equity fund was the primary seller of PPG. However, the largest shareholder was the incumbent mezzanine lender who also desired to remain in the deal as both a lender and equity owner. This left Auxo to negotiate a transaction with a singular partner at the mezzanine lending firm who was both the largest shareholder and subordinated debt holder. At the same time, the party was the new subordinated debt holder Auxo had to negotiate with, and they desired to be an equity investor in the deal going forward. Precision Parts Group CEO David Hooe was the second largest shareholder and had been with the company for 30 years. Hooe was concerned with the legacy of the company and the fate of its employees.

Auxo caught a serendipitous break. One of Auxo’s founding investors is also the founder of a Chicagobased private equity firm, which coincidentally owned PPG previously when Hooe took over as CEO. This helped to build a bridge between Auxo and PPG. With these latest experiences under its belt, Auxo Investment Partners continues to seek out deals. Helminski said the firm is eying a European deal as a potential add-on acquisition for one of its existing companies. “We’re usually looking for good companies that we think we can help make a little better, but mostly grow them over time with our hands on, operationally active engagement with the company,” Helminski said.

HONORABLE MENTION AUXO INVESTMENT PARTNERS Top executive: Jeff Helminski, managing partner Company: Private equity firm specializing in investments in industrial, manufacturing and business services companies Advisers on the deal: Buyers: Miller Johnson (legal), Barnes & Thornburg LLP (legal), Mercantile Bank of Michigan (financing), Greyrock Capital Group (financing), BDO (accounting). Sellers: Brown Gibbons Lang & Company (investment banking); Ropes and Gray LLP (legal).

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FOOD BIZ FUTURE OF RESTAURANTS Continued from page 1

“It was a good patch for us to be able to pull in some extra revenue,” said Hops at 84 East Executive Chef Robert Repp. “I think it makes a lot of sense for large restaurants that have larger kitchens. For the size of our dining room, our kitchen is actually really small, so for us to operate two separate restaurants is really difficult. But we knew we wouldn’t be able to make the numbers to have a full staff on for lunch hours without trying something like this.” Ghost kitchens could potentially provide a path for newer restaurants to explore different concepts and find their niche after the pandemic, said EJ Martin, general manager and executive chef at Olive’s Restaurant & Bar in East Grand Rapids. “The ghost kitchen concept was so great during COVID-19 for many restaurants, and hopefully that can help other businesses down the road outside of the pandemic,” Martin said. “They could use that to adapt and see where they could be most successful.” Amore Trattoria Italiana in Comstock Park experimented with a pop-up concept by offering nachos every Thursday during the summer. It was a hit, but also time consuming, said owner and head chef Jenna Arcidiacono. “It’s confusing for guests — it’s not my favorite idea,” Arcidiacono said. “It ended up being really popular but also a lot of extra prep work to do. We had to add a lot of extra stuff to our kitchen and most of it had to be used that week or else it would go bad. But we have some really talented cooks in my kitchen who had a lot of fun with it.” CDKI Dining Group, which operates MeXo and Sandy Point Beach House restaurants, didn’t launch an entirely new restaurant pop-up during the pandemic, but the restaurant group did streamline its operations by working out of MeXo’s kitchen for both of its concepts. “With ghost kitchens you have to be careful the way you advertise it so you don’t confuse people,” said Executive Chef Oscar Moreno. “In our case, we were just trying to consolidate the two concepts in one with the lack of help we had.”

Staffing challenges Restaurants vary in how they have dealt with staffing levels in the past year, but most have cut down on staff sizes significantly with a lack of dine-in guests. Chefs in general are seeing

growing uncertainty about who will want to work in restaurants going forward. “I foresee a lack of potential employees for restaurants in the next couple years,” Martin said. “If I were a young person trying to figure out my direction right now, I wouldn’t be pursuing culinary, but maybe there are people who are looking at that as an opportunity with less competition currently in the field.” The staffing landscape is “pretty rough” overall at restaurants right now, Repp said. “I’m 31 years old, and when I was learning how to cook, you were lining up for a cook job,” Repp said. “It isn’t like that any more. Our service staff and kitchen staff are still pretty young, but there aren’t as many career cooks. A lot of them have gotten into different industries.” The pandemic has pushed some people into industrial work and other professions, Repp said, but it’s hard to say if that will be a longterm trend yet.

“The ghost kitchen concept was so great during COVID-19 for many restaurants, and hopefully that can help other businesses down the road outside of the pandemic. They could use that to adapt and see where they could be most successful.” —EJ MARTIN General Manager and Executive Chef, Olive’s Restaurant & Bar

Based on what Repp saw at Hops at 84 East when it was able to reopen for indoor dining in July 2020, this year has the potential to be a boom for business if capacity restrictions ease soon. “We were really busy last summer, it was really Marketing critical exciting to see,” Repp said. “After the first shutWith less of an in-person experience than ever, down, we were like, ‘What is going to happen, is marketing was vital for restaurants this past year, anybody coming out?’ But then we got flooded Arcidiacono said. with customers on our first day we reopened.” “We’re out there hustling on social media tellArcidiacono is less optimistic about the preing people what we’re doing and hoping they’re dicted pent-up demand. listening,” she said. “I’m very vocal on social “People are very leery and will be for a long media and I think it helps a lot. It’s all about comtime, which is to the detriment of all of us,” munication right now — people really want to Arcidiacono said. hear about how you’re being safe and clean, so Restaurants that are successful with takeout we talk a lot about that because a lot of people menus will thrive, but fine dining establishments are scared.” like Amore Trattoria will have to The pandemic has also pushed upcharge menus and create an restaurant employees to be more upscale experience for its customFOOD BIZ hands-on and take on more ers, Arcidiacono said. That is how NEWS responsibilities, Moreno said. In her restaurant reopened earlier — Sponsored by: addition to cooking and putting this month at 25 percent capacity. DAN VOS together the restaurants’ menus, Amore Trattoria created a chef’s CONSTRUCTION Moreno is now also mopping tasting menu for dine-in guests COMPANY floors, washing dishes and doing that has three options for each whatever else he can to keep his course for $59 per person. restaurants in business, he said. “We just decided to go that way for right now. “I’ve gotten more involved with promoting the We’re trying to figure out the best way to do dinerestaurant, creating videos and sharing pictures in,” Arcidiacono said. “For some people, this will and information,” Moreno said. “It’s important be too expensive, but we still have our take-out to educate our guests about how we do things.” menu as well.” Martin feels strongly that activity will bounce back for the restaurants that are able to stay open. Pent-up demand? “People love going out and I think it’s just Restaurants that are able to weather the pansomething that everyone has on their agendas demic could possibly see a boom in business a couple times a week,” Martin said. “Once the as some in the industry expect to see pent-up vaccine makes its rounds and we go up in capacdemand as restrictions are lifted and the vaccine ity, my hopes are the industry will bounce back rollout is successful this year. and it will feel like we didn’t skip a beat.”

From top: Robert Repp, executive chef at Hops at 84 East; EJ Martin, general manager and executive chef at Olive’s Restaurant & Bar; Oscar Moreno, executive chef with CDKI Dining Group; Jenna Arcidiacono, owner and head chef of Amore Trattoria Italiana. COURTESY PHOTOS

Design Build General Contracting Construction Management

Dan Vos Construction Company Ada, MI

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MiBiz / FEBRUARY 15, 2021

v Sandy Ward and her late husband, Cedric developed a children’s program at Circle Theatre and supported many programs aimed at engaging people of color in community arts throughout their life together. With the help of Grand Rapids Community Foundation, Sandy will create a scholarship fund after her passing to support students involved in theatre. The fund will bear their names and honor Sandy and Cedric’s legacy, always and forever. L E T U S H E L P YO U G E T S TA R T E D We’re here to help you understand your options and explore creative ways to leave your mark on the community and causes you love. Give us a call at 616.454.1751. grfoundation.org

FEBRUARY 15, 2021 / MiBiz

L E AV E YO U R M A R K

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NONPROFIT ORGANIZATIONS

Nonprofits less likely to draw from second round of federal PPP loans By JOSH SPANNINGA | MiBiz jspanninga@mibiz.com

“While we may be able to qualify, we don’t feel like we need it. We want to make sure that the dollars are available to organizations that truly need them.”

he full effect of the COVID-19 pandemic on the national economy was still largely unknown when the first round of federal Paycheck Protection Program loans was announced in late March 2020. State governments were just beginning to issue stay-at-home orders and restrictions on local businesses. It was unclear how long these restrictions would last, as well as just how extensively regulations would affect local businesses, including nonprofits. Nearly a year later, the economic repercussions of the pandemic are still unfolding. —MICHELLE VAN DYKE In ongoing efforts to ease financial stress on President and CEO, Heart of West Michigan struggling small businesses and nonprofits, United Way Congress approved an additional $284 billion in PPP loans in December. This includes at least $25 billion set aside for eligible borrowers with a maximum of 10 employees, or loans of up to percent reduction in quarterly revenue in 2019 $250,000 for eligible nonprofits in low- or midto the same period in 2020. The MNA recieved a income neighborhoods. $255,242 loan in the first PPP round. While the application window for the second “Thankfully, many were able to have a record round of loans is open until March 31, it is unclear year for donations from individuals or accessed how many Michigan nonprofits will benefit. relief through some of the emergency relief “I honestly haven’t heard from anyone who’s grants provided by foundations,” Gustafson been taking it,” Michelle Van Dyke, president said. “Unfortunately, due to that, they may not and CEO of Heart of West Michigan United be able to show a reduction in revenue. The issue Way, said of nonprofits seeking the second is whether these funds raised and received will PPP round. sustain them, and for how long.” Heart of West Michigan United Way was Another barrier some nonprofits face is the approved for a $672,575 PPP loan in April lack of an existing relationship with banks lend2020, which Van Dyke says “was very helpful ing the PPP loans. Smaller and minority-owned for us to bridge the gap.” The organization will and operated nonprofits, for instance, are often not be applying for a second draw, however, less likely to have such banking relationships as as Van Dyke says the federal funds are likely larger nonprofits. Additionally, banks aren’t typineeded elsewhere. cally used to dealing with the nonprofit business “While we may be able to qualify, we don’t feel model, experts say. like we need it. We want to make sure that the Kyle Caldwell, president and CEO of the dollars are available to organizations that truly Council of Michigan Foundations, said banks need them,” she said. face unique challenges when serving such a wide According to research published in July from variety of nonprofits. CMF recieved Grand Valley State University’s a first-round PPP loan of $464,195. Dorothy A. Johnson Center for “There was a lot of learning Philanthropy, nonprofits received NONPROFITS going on about different needs approximately 3.7 percent of all NEWS — based on the size of nonprofits,” PPP loans that were dispersed last Sponsored by: Caldwell said. “It’s a little bit difyear. In total, 181,680 nonprofits GRAND RAPIDS ferent with a nonprofit human benefitted, though an estimated COMMUNITY FOUNDATION service agency with several hun452,000 nonprofits were likely elidred employees and what that gible for PPP assistance, researchmeans versus a one- or twoers found. employee shop.” In addition to revenue and banking barriNonprofit barriers ers, the second PPP round includes new restricBased on initial responses to the second draw, it tions that may prevent some nonprofits from appears even fewer nonprofits may benefit this applying. For instance, in order to qualify for time around. a second draw, nonprofits have to employ Joan Gustafson, external affairs officer at the 300 people or fewer — a sharp drop from the Michigan Nonprofit Association, said some 500-employee cap for first draw loans. nonprofits aren’t applying for a second round Nonprofits applying for a second round because of a new requirement to show a 25 also must have used up first-round funds on Visit www.mibiz.com

authorized expenses. If less than 60 percent of the funds previously dispersed went to employees’ payroll, that nonprofit will not qualify for a second draw.

Arts, education nonprofits among hardest hit Nonprofits that focus on the arts are Caldwell Gustafson Van Dyke among the organizations most affected by COVID restrictions. Unlike food banks, shelCaldwell, of the Council of Michigan ters and other human service-based organizaFoundations, says the letter addresses a critical tions that may have seen an uptick in donations issue. last year, arts nonprofits often rely on ticket sales, “The core appeal here that the nonprofit memberships, gift shop sales, event rentals and community is making is for the federal relief other similar forms of revenue that simply aren’t to understand that nonprofits are frontline coming in right now. human services and businesses that need The Grand Rapids Public Museum is no unique and careful support in the CARES Act,” exception. he said. “And wanting to make sure that they “It definitely hits the museum’s earned revrealize nonprofits are small businesses, but enue, but we are seeing that people are engaging the nonprofit business model doesn’t allow for with the museum both on a limited basis in perthem to charge the customer more or to think son and also digitally. We know there’s a hunger of the other creative solutions that for-profit out there for the museum,” said Kate Kocienski, enterprises have.” Grand Rapids Public Museum’s vice president of While PPP loans can prove crucial, they’re still marketing and public relations. “The PPP would one of many options local nonprofits can pursue allow us to continue our normal operations and to obtain additional funding that include grants continue to create our educational content. So and charitable giving. it’s really filling in that decrease in earned revIn order to make funding available to strugenue that we’re not getting right now because gling nonprofits who may not qualify for a first or we’re not operating at 100 percent.” second draw PPP loan, the Council of Michigan The Grand Rapids Public Museum was Foundations has included a comprehensive list approved for a $644,000 PPP loan in April 2020 of various COVID-19 relief funds available across and has applied for a second loan. the state. Many arts nonprofits have had to get creative Caldwell’s organization has “been monitorto continue offering their services, which often ing up to 50 pooled funds” that members can involves boosting their online presence. The Grand access for emergency relief and that “create the Rapids Symphony, for instance, turned to streamfunding social net we need coming in (during) ing concerts virtually last year. While this means the pandemic.” audiences continue benefiting from the services they offer, it still doesn’t make up for lost ticket sales. Additionally, offering streaming services and redesigning a website can be costly upgrades. “To run a virtual operation is expensive,” Van Nonprofit organizations qualified for both Dyke said. “You’ve got laptops, and you’ve got rounds of the federal Paycheck Protection instructors … it’s just a different model for these Program. While the second round closes nonprofits. They continue to have challenges not March 31, Grand Valley State University just operationally, but how they deliver the serresearchers last year analyzed data from vices in the right way and in an efficient way to the first round in 2020: the people who need them.”

PPP by the numbers

A call to Congress Meanwhile, the Michigan Nonprofit Association has been promoting a letter drafted by the National Council of Nonprofits calling on the Biden administration to ensure nonprofits are able to receive the funds they need to continue their work. “Specifically, the letter calls for nonprofit-specific grants and forgivable loans for nonprofits of all sizes, an increase and extension of charitable giving incentives, full coverage of unemployment costs of reimbursing (self-insured) employers, and financial aid to state and local governments,” Gustafson said.

n 4.1 million: The number of jobs nonprofit organizations helped protect n 181,680: The number of loans made to nonprofits n 3.7%: The percentage of all PPP loans that went to nonprofits n 40%: The amount of eligible nonprofits that received a PPP loan Source: Dorothy A Johnson Center for Philanthropy

MiBiz / FEBRUARY 15, 2021

Pandemic, social unrest lead GR commissioner to form new company A Q&A with Grand Rapids City Commissioner and The Hekima Group President and CEO Joe Jones

rand Rapids City Commissioner Joe Jones recently stepped down from his full-time job as CEO of the Urban League of West Michigan to launch a consulting firm focused on diversity, equity and inclusion strategies and other social justice advocacy. Jones launched The Hekima Group LLC (named after the Swahili word for wisdom) after a decade at the Urban League where he worked closely on the ongoing inequities for people of color in West Michigan. Jones said he felt a calling to launch the consultancy following the nationwide protests after the killing of George Floyd, the COVID-19 pandemic’s disproportionate harm to communities of color, and his own personal brush with the virus in October. Jones spoke with MiBiz to discuss his new venture and recent City Commission business. Why did you decide to leave the Urban League after a decade, and what do you hope to accomplish with The Hekima Group? There were conversations with the board over the last year or so about plans to transition out. I felt like I had done what I was called to do in terms of helping to better position the organization to get back to its original mission of being very present in the community. I’m really feeling a call to lean in more aggressively to address inclusive economic growth. I believe that West Michigan can’t be all that we want it to be until we’re creating more opportunities for people to be what they desire to be. I think that’s been the disconnect for some time now, particularly for African American and Latinx residents not being able to take a bite at the apple and not having access to economic prosperity compared to their white counterparts. In announcing The Hekima Group, you cited the ‘collateral damage’ from both the pandemic and the social justice movements that launched last year. How do those two issues continue to play out in Grand Rapids? The devastation that’s come by way of COVID-19: That chapter is still being written in terms of the damage that has been done and that will be done to African American, Latinx and historically marginalized communities in general. The lift is really to persuade or influence those communities to consider the vaccine. To be able to communicate to the African American and Latinx communities about the critical need to take the vaccine, and yet respect their decision not to, weighs heavily on me. The killing of George Floyd, the aftermath, and the racial unrest was real. That was a significant amount of pent-up frustration, anger and just rage where you had people saying: I need to make my voice heard and I need to make it known this is just not right. Those two events were very significant in my decision making. Did anything else play a role in your business decision? I also tested positive for COVID in October. I started out with cold symptoms, which evolved into a loss of taste and smell and a headache nonstop for five days. As I was dealing with it in isolation, I couldn’t help but think about my mortality. I’d often think about the fact that I could die at any moment. COVID does a job on one’s physical body, but it also has done quite the job on one’s mental well being. It took a toll on me both physically and mentally. What role do you see The Hekima Group playing, either working with companies or doing issue advocacy? I believe wholeheartedly in our ability to walk alongside folks trying to engage in being a more just, equitable and inclusive organization. It’s bringing wisdom and strategy in areas like (diversity, equity and inclusion), strategic and multi-cultural communications, crisis management, corporate responsibility and public affairs. All of these things are a reflection on the experience I’ve developed over the last 30 years. How can companies ensure their equity goals or commitments have staying power? Post-George Floyd, there were a number of companies, organizations and individuals who really wanted to step up and be part of the solution. They were writing significant checks and making aggressive pledges to do better. But really, the jury’s still out on whether that same (energy) is still present, or if so, how can we maintain it. That’s a legitimate concern. The City Commission just signed off an option agreement to move forward with the 201 Market Ave. property redevelopment. How can that project move forward with an equity lens? One of the most glaring opportunities for that site in particular is around ownership opportunities for contractors and other businesses to participate in its development. Those are two areas that if we as a city can pull off, then we’re definitely moving in the right direction. Similarly, how can the city help ensure equity within the city’s expanding cannabis industry? The city has shown itself as having a value on equity defined as leveraging our influence to be intentional around removing and preventing barriers that have been created by systemic and institutional injustice. Historically, it has been an albatross around the necks of black and brown folks. Now that it’s legal, there’s not many on-ramps to opportunities because of the cost factor. It’s very costly to get into the industry. That’s a major barrier. Interview conducted and condensed by Andy Balaskovitz. COURTESY PHOTO

FEBRUARY 15, 2021 / MiBiz

IN THE NEWS M&A

n Service Express LLC, a private equity-backed Grand Rapids-based firm that provides third-party data center maintenance services, acquired Blue Chip Customer Engineering Ltd., which is headquartered in Bedford, England, but has locations throughout the U.K. and Europe. Established in 1987, Blue Chip serves as a third-party maintenance provider and managed services provider and also has a software development division in Sri Lanka. The deal for Blue Chip marked the first international acquisition for Service Express. Prior to the deal, the two companies had maintained a partnership and provided shared client services. Terms of the deal were not disclosed. Service Express is a portfolio company of New York-based private equity firm Harvest Partners LP. n Holland-based advanced touchscreen provider TES America LLC acquired certain assets from 3M Touch Systems, which is a subsidiary of 3M Company, with plans to breathe new life into the brand. One of the assets is MicroTouch, a brand credited for introducing the first capacitive touchscreen in 1984. TES America plans to overhaul and expand the MicroTouch line, including adding all-in-one, multi-touch computer systems that are equipped with the latest TES-patented technology. TES America also acquired Surface Capacitive and Projected Capacitive components and displays from 3M Touch Systems. These components are used for commercial applications for such industries as casino gaming, medical equipment and public kiosks. n The founders of Marquette-based Satellite Services Inc. have sold the company to an employee stock ownership plan (ESOP). SSI is a provider of base operating support, facility operations and maintenance, and military family housing operations and maintenance services to government and commercial customers. Prairie Capital Advisors Inc., an Oakbrook Terrace, Ill.-based investment bank and ESOP advisory firm, worked with the company on the sale. Terms of the transaction were not disclosed. n Traverse City-based High Street Insurance Partners acquired Hillsdale-based insurance agency Vested Risk Strategies Inc., according to a statement. The acquisition was the 18th for High Street Insurance Partners since it was formed in August 2018 by Detroit-based private equity firm Huron Capital. n Wyoming-based Praxis Business Brokers LLC worked on six transactions that were completed in the fourth quarter of 2020. They were Muskegon Awning and Fabrication’s sale to an Ada buyer, the sale of Coye’s Canvas & Awnings in Wyoming to a Grand Rapids buyer, Grand Rapids-based S&C Plastic Coatings’ sale to a buyer in East Grand Rapids, a Bloomfield Hills-based buyer’s acquisition of Lansing-based Melting Moments Ice Cream Treats, Kalamazoo Chuck Manufacturing and Service Center’s sale to a Barry County buyer, and the sale of Fourth Coast Café & Bakery in Kalamazoo to three partners from Valparaiso, Ind. Praxis President Michael Greengard represented the sellers in all six transactions.

JOINT VENTURE

n Acrisure LLC formed a joint venture with NFL quarterback Russell Wilson of the Seattle Seahawks and Grammy-winning singer and songwriter Ciara to support increased access to insurance by minority-owned businesses in the U.S. Evolution Advisors LLC will “immediately focus on providing greater access and more effectively distributing insurance products to minorityowned enterprises,” according to an announcement of the joint venture. That includes companies certified as a Minority Business Enterprise, of which there are more than 4 million in the U.S. with combined sales of nearly $700 billion.

EXPANSION

n Harbor Steel & Supply Corp. will be investing $2.4 million for a 34,000-square-foot expansion on the west end of its existing facility at 2385 112th Ave. in Holland Charter Township. Through the expansion, the company expects to retain its 24-person workforce, as well as create another 10 jobs over the next two years. An all-in-one metal services company, Harbor Steel has operated in Holland since 1986. The company measures, processes, cuts and distributes metal products for a number of industries and applications. Harbor Steel operates four West Michigan locations in total — Holland, Muskegon, Spring Lake and Manistee — with additional operations in West Virginia and Kentucky.

CONSTRUCTION

n Grand Rapids-based real estate investor Tim Engen has formed a new company that will focus on construction projects in the office, medical, industrial and retail sectors. Engen, president of Vision Real Estate Investment at 140 Monroe Center NW, recently launched CarbonSix Construction Inc. The companies are housed in the same office building, although the plan is to construct a new office for the two companies as well as an additional tenant. CarbonSix is “starting out small” with six employees, and some serving in dual roles at Vision Real Estate and CarbonSix, Engen told MiBiz. CarbonSix offers services including construction management, preconstruction estimating, design and build, and owner representation. The company works in collaboration with VREI, but was also formed to provide construction services to other owners throughout West Michigan, Engen said.

BANKING

n Kalamazoo-based Consumers Credit Union opened a new branch office on Wilson Avenue NW, across from the Meijer Inc. store in Standale. The full-service office is the credit union’s 22nd in West Michigan and includes personal and commercial lending and investment services. Grand Rapids-based CopperRock Construction Inc. served as the contractor; Bosch Architecture Inc. of Kalamazoo designed the office. Consumer Credit Union had more than 108,000 members and $1.47 billion in total assets at the end of 2020. n Kalamazoo-based Arbor Financial Credit Union opened a branch office on 32nd Avenue near I-196 in Hudsonville. The office is the 12th in the region for Arbor Financial, which at the end of 2020 had 44,666 members, $813.6 million in total assets, and $634.3 million in total deposits, according to a financial statement filed with federal regulators.

PUBLIC RELATIONS

n Kristie Burns, a communications professional with more than 20 years of experience, formed KB Communications Inc. She operates the firm virtually out of Norton Shores after moving from Grand Rapids a year and a half ago. The firm’s services include public and media relations strategies, corporate communications, and content to positively position companies within their industries, markets and communities. The firm works with companies in consumer products, health care and financial services sectors.

HEALTH CARE

n Catherine’s Health Center opened an additional location on the Streams of Hope campus at 60th Street SE in Grand Rapids. The location offers medical and behavioral health care alongside a food pantry, after-school tutoring, and other programs operated by Streams of Hope. Additionally, Catherine’s Health Dental Center opened on 36th Street SE in space that previously housed a dental center that closed last August. Visit www.mibiz.com

AWARD WINNER SPOTLIGHT

NOW ACCEPTING 2021 EXCELLENCE IN CONSTRUCTION AWARDS PROJECT & SAFETY ENTRIES ENTRIES DUE MARCH 4, 2021 ENTER AT WWW.ABCWMC.ORG/EIC ABC WESTERN MICHIGAN MEMBERSHIP REQUIRED FOR ENTRY SUBMISSION

G L A ZING

ARCHITECTURAL GLASS & METALS, INC.: VIKING CORPORATE HEADQUARTERS

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

PROJECT LOCATION BUDGET ARCHITECT COMPLETION TEAM

Viking Corporate Headquarters Caledonia $1,600,000 Byce & Associates September 2019 Project Manager: Bryan Dennis Superintendent: Tom Freiberg

AGM worked with the design and construction team in a design-assist delivery on this project, to help develop and refine material selection and interface details as required to achieve design intent. This approach maintained a desirable balance between cost, performance and schedule constraints.

New political boundaries to emerge in 2021

Jane Ghosh takes helm at Discover Kalamazoo

PAGE 16

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SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

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

UPCOMING ISSUES 3.1.2021

4.26.2021

Contract Deadline: 2.17.2021

Contract Deadline: 4.14.2021

Education & Talent Development

Contract Deadline: 3.3.2021

3.29.2021

Contract Deadline: 3.31.2021

6.7.2021

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

he latest state effort to provide financial aid to Michigan small businesses and entertainment venues that are ailing from the COVID-19 pandemic and resulting restrictions

Commercial Lending Quarterly: Small Business Lending Update PAGE 15

Cannabis advocates: Equity workgroup just a starting point PAGE 13

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

www.mibiz.com

A NEW TONE

S P ECI A L Y E A R-E ND I S S UE | DECE MBE R 2 1 , 2020 | V OL . 33 | NO. 5 | $ 3.0 0 E

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

SEE PAGE 4

By KATE CARLSON | MiBiz kcarlson@mibiz.com

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

Industry 4.0

PAGE 11

Grand Haven sees economic development momentum around 3 key projects 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

has a relatively short application window based on previous demand. Applications for the $55 million Michigan Small Business Survival Grant Program open at 9 a.m. on Jan 19. The application process closes at noon on Jan. 22. Entertainment and live music venues can apply for the $3.5

INSIDE:

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

PRESIDENT BIDEN PHOTO BY NAVY PETTY OFFICER 1ST CLASS CARLOS M. VAZQUEZ II ILLUSTRATION: KAYLEE VAN TUINEN

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

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.

PAGE 17

See BIDEN OUTLOOK Page 16

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.

Real Estate: Multifamily

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

INSIDE:

Cybersecurity SEE PAGE 6

Contract Deadline: 5.26.2021

State expects ‘extremely high’ demand for $58.5M in small business COVID-19 relief

See KALAMAZOO EVENT CENTER on page 3

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

Contract Deadline: 5.12.2021

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

ILLUSTRATION: KAYLEE VAN TUINEN

PAGE 4

Food Systems

Drinking Economy Craft Beverage Roundtable

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

Trade, labor shortage among top ag priorities this year Going Pro funding to address manufacturing workforce shortage

5.24.2021

Contract Deadline: 3.17.2021

More flexibility comes with latest round of PPP loans

CRYSTAL BALL

Culture & Generational Change

Contract Deadline: 4.28.2021

Utilities & Energy M&A Roundtable

HELP ON THE WAY

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 development tool that larger communities have like Grand Rapids and Detroit,” Iden 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 Commissioners for two years before he was elected to the state House of Representatives in 2014. “The event center was only ever discussed in concept. There were never formalized plans or a formal agreement about the size and scope of the project,” Iden said. “It’s always been preliminarily discussed as a high-level concept for the community.” The new legislation requires an event center financing program to describe the proposed size, location, cost and financing structure of the proposed facility, and to specify an assessment to be levied under the program, which can’t exceed 4 percent of county-wide hotel room charges. The assessment would effectively be a small increase to a county’s hotel lodging tax. The financing act defines an event center as a convention hall, auditorium, stadium, music hall,

Diversity/Equity/Inclusion Commercial Lending Quarterly: Commercial Real Estate Lending Update

Real Estate: Office

www.mibiz.com

By KATE CARLSON | MiBiz kcarlson@mibiz.com

5.10.2021

3.15.2021

4.12.2021

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

sales@mibiz.com | editor@mibiz.com | 616-608-6170 MiBiz / FEBRUARY 15, 2021

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