MiBiz February 17, 2020 edition by MiBiz

Biz groups push criminal justice reform

Grand Haven explores energy options

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FEBRUARY 17, 2020 • VOL. 32/NO. 9 • $3.00

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West Michigan aerospace suppliers manage through uncertainty

GR property managers focus on amenities in competitive rent market By SYDNEY SMITH | MiBiz ssmith@mibiz.com GRAND RAPIDS — As competition in the rental housing market heats up across West Michigan, property managers are turning to new kinds of exclusive amenities for their residents. That’s led Rockford Property Management LLC, the property management arm of Rockford Construction Co. Inc., to offer “Rock Perks,” discounts and offers for local businesses and experiences that are exclusive to residents at the facilities it operates. “Across the industry, I think it’s recognized there are more apartments online, not just in Grand Rapids, but nationwide,” said Monica SteimleApp, executive vice president of real estate development at Rockford Construction. “People have choice. Whether it’s within a building or an experience amenity, residents choose what their experience is going to be as opposed to Steimle-App just a space.” Rockford Property Management sees establishing these perks as an extension beyond what the company can offer its residents in the building. As thousands of units have come online in recent years in the city, multifamily housing managers are competing for residents in new ways that go beyond pricing. Rents in Grand Rapids have increased by 0.5 percent year over year, according to recent data from Apartment List, a San Francisco-based listing firm. Grand Rapids is not alone when it comes to rent increases: In Michigan, the rent increased in each of the 10 largest cities. See RENT TRENDS on page 7

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By JESSICA YOUNG | MiBiz jyoung@mibiz.com

BROAD IMPLICATIONS Researchers and state officials have realized that the effect of Michigan’s outdoor recreation industry goes well beyond tourism and hospitality, reaching into manufacturing, design, services and other sectors. As well, economic developers are quickly recognizing the key role that outdoor recreation can play in talent attraction and retention. SEE PAGE 17. Story by ANDY BALASKOVITZ.

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est Michigan-based suppliers of aerospace giant Boeing Co. continue to weigh their ability to bear higher costs during the company’s temporary suspension of production. The production halt comes after a prolonged worldwide grounding since March of Boeing’s fleet of 737 MAX jets, following the second of two crashes that killed a total of 346 people in 2018 and 2019. After the global grounding, Boeing continued to build the 737 MAX — the fastestselling airplane in company history — for 10 months in the hope of fulfilling a multi-year order backlog. However, the company eventually accumulated hundreds of grounded jets and the production of the plane came to a complete stop in mid-January. Boeing is compensating airlines that have lost sales as a result of the grounding with a mixture of cash payments and discounts on future sales, but the Chicago-based company’s U.S.-dominated supply chain has mostly been left without a lifeline. “It’s mind-boggling how much money is tied up in that supply chain,” said David Nolleti, an aerospace industry turnaround manager and director at financial and operational consulting firm Conway Mackenzie LLC. See AEROSPACE on page 4

Holland med device firm raises capital to support new product launch By MARK SANCHEZ | MiBiz msanchez@mibiz.com HOLLAND — Shoulder Innovations Inc. intends to use $2.2 million in capital raised from investors to support the launch of a new shoulder implant device that recently received regulatory approval, plus develop new products. The Holland-based medical device company earned U.S. Food and Drug Administration approval in December for the InSet Plus augmented glenoids, the cavity in the shoulder. The

product is headed to market in the next few weeks and allows surgeons “to treat some particularly complicated anatomy potentially more effecBall tively,” Shoulder Innovations Executive Chairman Rob Ball told MiBiz. The device is part of the company’s InSet Total System now on the market and “essentially provides a surgeon with a much broader set of tools with

which to treat the patient in the operating room,” Ball said. Shoulder Innovations also expects to launch another shoulder-replacement product later this year. The new product is currently undergoing FDA review. The two new shoulder devices give Shoulder Innovations a product portfolio that covers 85 percent of the shoulder surgeries performed by specialists, “which gives us a platform on which to continue building a broader and deeper distribution network in the United States,” Ball said.

GRCC welding program gains exposure thanks to Metallica PAGE 16

“We’re transitioning from a development company to a commercial company,” he said. Shoulder Innovations raised the Series B capital round from 31 investors, according to a recent filing with the U.S. Securities and Exchange Commission. Ball said the capital round involved existing investors and was led by Cultivate(MD) Capital Fund II LP, a venture capital fund operated by Grand Rapids-based Genesis Innovation Group LLC whose portfolio companies include Shoulder Innovations. See SHOULDER INNOVATIONS on page 3

IN BRIEF Total Wine plans first Michigan store in Cascade Township CASCADE TOWNSHIP — National alcohol retailer Total Wine & More plans to open its first Michigan superstore in the greater Grand Rapids area. An affiliate of Total Wine has leased the 34,250-square-foot former Babies R Us at 4923 28th St. SE in Cascade Township, according to filings MiBiz acquired in a Freedom of Information Act request. The company indicated in the filings that it plans to open an expansive beer, wine and liquor store at the site. Total Wine is leasing the space from an affiliate of Grand Rapids-based Edmark Development Co., according to a lease agreement included in the filings. Property records show Edmark has owned the location since 1998.

Total Wine, based in Bethesda, Md., operates 205 superstores across 24 states in the U.S., and employs more than 4,000 people, according to its website. Typical retail locations carry more than 8,000 wines, 2,500 craft and imported beers and 3,000 spirits. A spokesperson for Total Wine did not respond to requests for comment. — Reported by Sydney Smith

Whitmer proposes $10M for green bank, clean energy revolving fund LANSING — Gov. Gretchen Whitmer wants to infuse $5 million into a state green bank and spend another $5 million on a revolving fund for clean energy projects at state facilities. The $10 million in clean energy spending is part of Whitmer’s $61.9 billion fiscal year 2021

budget proposed this month. State officials say the spending is meant to encourage lenders to give favorable rates to residents and businesses for renewable energy improvements through Michigan Saves Inc., the state’s “green bank.” Whitmer The nonprofit Michigan Saves was created in 2009 and has financed more than $230 million in energy efficiency and renewable energy projects through low-interest loans. Officials have set an ambitious goal of $1 billion of investment by 2023. The program has financed 19,113 residential and 1,293 commercial projects. Nearly 450 of those were for solar installations. — Reported by Andy Balaskovitz

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Modular housing builder Urbaneer poised for growth with new partnership GRAND RAPIDS — Compact housing builder Urbaneer Inc. is poised to grow with a partnership with Troy-based Champion Home Builders to manufacture accessory dwelling units. The 510-square-foot accessory dwelling units are meant to serve as one solution to affordable housing issues around the country. The partnership with Champion, a subsidiary of Skyline Champion Corp., should allow Urbaneer within the next 12-18 months to exceed the number of units it has built since its inception in 2012. “We’ll be producing an Urbaneerbranded unit at 14 plants across the country,” Bruce Thompson, founder and president of Urbaneer, told MiBiz. “We can hit 48 states. That is something we’re the first to be able to say with these compact units, specifically with accessory dwelling units.” Urbaneer has patents on movable walls with wireless power that can make rooms smaller or larger on demand. Its homes incorporate those elements into their architecture and will be developed as part of Skyline’s Genesis brand. — Reported by Sydney Smith

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Grand Haven weighs energy options after Sims coal plant closure Published since 1988 MiBiz® is a registered trademark of REVUE Holding Co., Inc.

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com GRAND HAVEN — The J.B. Sims power plant in Grand Haven burned its last supply of coal this month, but local officials are still debating plans for the city’s long-term energy portfolio. With the 70.4-megawatt Sims plant out of the picture, the city is working through demolition plans and whether it will add natural gas generation to primarily power its sidewalk snow melt system. A small portion of the natural gas power could also be used during peak usage periods like hot summer days. David Walters, general manager of the Grand Haven Board of Light & Power (GHBLP), said the city will continue to rely on market purchases for its power in the near term and likely purchase gaspowered water heaters for the snow-melt system. “When Sims goes down, we’re going to find a diversified power supply portfolio, most of which will come from outside of our service territory,” Walters said. “It’s a big switch from what Grand Haven has done in the past.” However, the city continues to weigh its options for a small natural gas plant to power the snow melt system and act as a backup during high-demand periods. In 2018, the city considered building a 36 MW natural gas plant on Harbor Island where the Sims plant is located. However, the price of that plan “came in very high,” Walters said. It also faced pushback from environmental advocates, including the Sierra Club. Now Grand Haven utility officials are considering several small modular, reciprocating natural gas engines totaling around 20 MW of capacity. Grand Haven has a peak capacity need of 68 MW in the summer, meaning a replacement plant would only generate electricity for a small portion of the time. “We’re pretty optimistic some smaller project will make more sense than a 36 MW plant,” Walters said. Additionally, a combined heat and power plant could provide waste heat for the snow melt system. However, environmental groups remain concerned about a natural gas option. The Sierra Club led a public campaign in 2017 around closing Sims, calling on the utility to explore efficiency and market purchases of renewable energy instead. While the Sierra Club is celebrating the Sims closure, it is warning about building a new natural gas plant on Harbor Island. “Replacing coal with another fossil fuel gas plant is an economic and environmental mistake that harms the future of this lakeshore community,” Jan O’Connell, development director for Sierra Club’s Michigan chapter, said in a statement. “Analysis has shown again and again that there are viable and more affordable clean energy options along with energy efficiency measures available to limit and meet the city’s energy

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The Grand Haven Board of Light & Power is exploring its options after burning the last of its coal at the J.B. Sims power plant last week. The utility currently buys most of its power off the market, but is considering adding a small natural gas plant to power its snow melt system and serve as a backup in peak periods. MIBIZ FILE PHOTO: MARK SANCHEZ needs. For the health of our community and natural resources, Grand Haven should be looking at options to remediate this polluted riverfront site, instead of placing another fossil fueled barrier in Grand Haven’s beautiful Harbor. The last thing we need is for Grand Haven Board of Light and Power and its customers to be stuck paying for another expensive and polluting fossil fuel investment that could cost upwards of $55 million.” Walters said planning around whether to build a small gas plant will continue over the next six months, and will weigh the cost against continuing to buy power on the market. “We need to evaluate the cost of building it ourselves or essentially renting it from someone else,” he said. “Right now, we can rent cheaper than we can buy, but at some point, it’s going to be more expensive to rent than to buy. It involves financial projections we haven’t done.” Gerry Witherell, vice chairperson of the GHBLP board of directors, called natural gas units “our best option at this time.” He said planning around Sims’ retirement has spanned nearly a decade. “The city and the people who live here want some form of backup in the event something happens on the grid,” Witherell said. “It’s something that’s being (discussed) throughout the country as coal plants close.”

Local assets The first two coal units at the Sims plant were built in 1961, followed by a third unit in 1983. Units I and II shut down in 1986, and the utility has relied on Unit III since. The GHBLP also operates a 6.5 MW diesel engine, which is scheduled to close this year. In recent years, the remaining Sims unit began

SHOULDER INNOVATIONS Continued from page 1

As Shoulder Innovations prepares the next product launch later this year, the company will need to raise another $7 million to $10 million in Series C capital to build a larger distribution network. Shoulder Innovations will look for financial backers from outside of its existing investor base, Ball said. “We’ll seek additional new investors,” he said. Investors ultimately will seek an exit, Ball said. That could mean the sale of the company in the years ahead. “We’ve had significant inbound strategic interest and we expect that to continue, and wouldn’t be surprised if something happened over the coming couple of years,” Ball said. Contract medical device manufacturers in Michigan, Indiana and Oregon produce the shoulder devices for Shoulder Innovations. Sales of the first device that hit the market in 2016 have reached into “thousands” of units, Ball said. In a December announcement on the FDA approval of InSet Plus, Shoulder Innovations Chief Commercialization Officer David Blue noted that there are now more than 100,000 total shoulder surgeries annually in the U.S. and that demand for the procedure grows about 10 percent per year. Visit www.mibiz.com

to deteriorate, with upgrades pegged in the tens of millions of dollars. The timeline follows similar coal plant closures across the state, including the B.C. Cobb plant in Muskegon and the James DeYoung plant in Holland. Consumers Energy plans to close its J.H. Campbell coal plant in neaby Port Sheldon in 2031, or potentially sooner. GHBLP first identified a 2020 closing date for Sims in 2012. Across the country, coal plants have grown increasingly expensive because of cheap natural gas and renewables, along with the high cost of air pollution controls. Utilities are weighing the displacement of coal with natural gas and renewables, as well as reducing demand with energy efficiency. GHBLP buys power on the market through the joint-action Michigan Public Power Agency (MPPA), which purchases power from a variety of fossil fuel and renewable energy plants. “Financial transactions” aren’t tied to a particular generating source, Walters said, while longerterm contracts can be for a particular type of generation, such as wind or solar. Over the next few years, GHBLP expects to get about 20 percent of its power through renewable sources. This will be done through the MPPA rather than the city building its own generation, which Walters said isn’t economically feasible. Witherell called renewables a “partial solution but not a full solution.” “Our local transactions, or building something, is not going to include a significant portion of renewables,” Walters said, since the city wouldn’t qualify for the federal tax breaks that private developers do. “Customers ask: ‘Why aren’t we looking at renewables?’ We are, we’re just going to obtain them a different way.”

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Editor Joe Boomgaard / jboomgaard@mibiz.com Senior Writer Mark Sanchez / msanchez@mibiz.com (finance, health care, life sciences) Staff Writers Sydney Smith / ssmith@mibiz.com (real estate, economic development) Jessica Young / jyoung@mibiz.com (manufacturing, agribusiness, nonprofits) Contributing Reporter Andy Balaskovitz Contributing Photographer Katy Batdorff Copy Editor Claire Boomgaard VP of Production & Audience Development Kristi Kortman / kkortman@mibiz.com Senior Advertising Consultant Shelly Keel / skeel@mibiz.com Digital Specialist/Ad Traffic Coordinator Danielle Affholter graphics@mibiz.com

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The company’s products are designed to meet that demand with a system that simplifies shoulder replacement technology, according to the announcement. “Surgeons are seeking implant systems that can help to reduce implant loosening and revision rates, therefore increasing patient satisfaction and reducing overall healthcare costs,” Blue said. MiBiz / FEBRUARY 17, 2020

MANUFACTURING AEROSPACE

“There are really only two large commercial aircraft manufacturers in the world, Boeing and Airbus, so when one of them has a problem, the entire industry feels it. Every state in the country has members of the Boeing supply chain in it. That’s why, from a national perspective, this is a big deal.”

Continued from page 1 The lack of cash flow throughout the supply chain is resulting in some layoffs, but most local suppliers are mitigating the temporary shutdown by diverting labor elsewhere within their organizations and hoping that production resumes before their resources run out. Following nearly two decades of growth in the sector, West Michigan has a burgeoning aerospace and defense industry with more than 9,000 jobs at around 330 companies, according to Grand Rapids-based economic development group The Right Place Inc. “We’ve seen suppliers continually invest in expanding capacity and new capacity for new manufacturing technologies,” Noletti told MiBiz. “They’ve grown and grown and grown, and in a lot of cases, the private companies have taken on a fair bit of debt to finance that growth.” Costs associated with the grounding of the 737 MAX are likely to surpass $18 billion, according to an announcement made during Boeing’s quarterly earnings report. “There are really only two large commercial aircraft manufacturers in the world, Boeing and Airbus, so when one of them has a problem, the entire industry feels it,” Noletti said. “Every state in the country has members of the Boeing supply chain in it. That’s why, from a national perspective, this is a big deal.” Deferred production costs also grew by $2.6 billion, dipping into the aircraft’s long-term profit potential. As well, Boeing failed to sell any commercial planes last month. On a call with analysts last month, Arconic Inc. — which employs more than 2,000 people in Whitehall, north of Muskegon, where it manufactures cast components for jet engines — said it expected to lose $400 million in sales because of the Boeing crisis and could cut jobs this year as a result.

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— DAVID NOLLETI Director at Conway Mackenzie LLC

“If we’re clear that production is going to become much more healthy in 2021, then that’s going to affect our views about labor,” Arconic CEO John Plant said in the call. Arconic is considering a mix of cuts, extended vacations and changes in shift patterns, according to Plant, who said it has been difficult to switch workers to other products. “Most companies can’t afford to keep excess employees,” Noletti said. “Here, people are going to be hesitant to let people go and they’re going to try and maintain the workforce as best they can, but they’ll only be able to do that for so long.”

Protecting workers Aerospace supplier GE Aviation Systems LLC, which employs about 1,000 people in West Michigan, supplies engines for the 737 MAX and also produces navigation systems for the jet out of the company’s Grand Rapids-based operations. “We are partnering with our customers and suppliers to mitigate the impact of the temporary shutdown of the 737 MAX while protecting the company’s ability to accelerate production as needed in the future,” a company spokesperson told MiBiz. To do so, GE Aviation is attempting to avoid layoffs by shifting employees to other programs and reducing overtime and the use of contractors.

Fort Collins, Colo.-based Woodward Inc., which operates a plant in Zeeland that manufactures fuel injector nozzles and components for afterburner applications, also took action to try to avoid disrupting its workforce. “We’ve adjusted that contract temporary labor. We’ve dramatically taken down overtime that we were running. We’ve redeployed skilled labor into other parts of our business to preserve that skilled labor,” Woodward Chairman and CEO Tom Gendron said in a Feb. 3 conference call with brokerage analysts to discuss quarterly results. “We’ve gone after all discretionary expenses, discretionary spending, and we were attacking productivity and we are working hand in hand with our supply base to also have them be able to handle the temporary downturn and then the recovery in the ramp,” Gendron said. “It’s a challenging environment, because you’re going to go down, but then you’re going to come back up, and the type of product we make does require very skilled labor and a lot of special machinery and specialty activity from our supply base that we need to retain.”

Moving pieces Noletti at Conway Mackenzie said once production of the embattled 737 MAX restarts, many suppliers may face a range of new challenges beyond just labor.

“To me, managing the downside like the initial shock of losing the work is relatively easy,” Noletti said. “Most companies survive the downturn and then really struggle to ramp back up because they don’t have the cash to do it. That’s what companies need to think through.” Boeing reportedly said it will restart production before the planes are recertified, which is likely to be a complex process involving the Federal Aviation Administration (FAA) and other global regulators. “Given the high profile nature of the problems with the MAX, each one of those agencies is going to want their own tests and to make sure they’re satisfied,” Noletti said. “There are a lot of moving pieces to restart production that aren’t manufacturing related.” Boeing estimates it will get clearance to fly the jet around midyear, according to a recent statement. Last week, Boeing pilots were spotted flying the 737 MAX and testing new software, the latest indication the company may be getting close to an initial recertification flight, according to reports. “Return to service is a pretty complex equation to solve for,” Nolleti said. “It’s as easy as just starting up the line again and it’s not just the FAA approving it. I think there are a lot of constituencies that have to feel comfortable with (the jet) before (Boeing can) just start production but also ramp back up to where it was at 52 a month.”

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HEALTH BIZ

Legislation would enshrine key provisions of ACA in state law Move could protect popular provisions if SCOTUS strikes down law By MARK SANCHEZ | MiBiz msanchez@mibiz.com

or e e lement s of t he fe der a l Affordable Care Act could become state law if legislators in Lansing enact proposals backed by Gov. Gretchen Whitmer. In her recent State of the State address, the governor urged a bipartisan approach to ideas such as prohibiting health insurers operating in the state from denying coverage to people with pre-existing medical conditions. “Without that provision, the coverage of millions in our state could be at risk. We need to enshrine these protections for Michiga nders,” sa id Whitmer, who also favors prohibiting insurers from cancelling coverage based on a person’s health status. “But we need the support of lawmakers on both sides of the aisle,” Whitmer sa id. “Thin k about a ny Mukkamala woman who has given birth, any child with asthma, or anyone with a chronic condition like diabetes or high blood pressure. Pass these protections. It’s the right thing to do.” Included in the four-bill package introduced in the state Legislature on Jan. 30, Appel days after the governor’s address, are a state ban on the use of pre-existing conditions to deny coverage and a prohibition on the cancellation of health policies “based on the health of the insured.” Democratic lawmakers introduced the bills in a presidential election year as a federal court ruling in a Texas case that the ACA was unconstitutional now goes through the appeals process and heads toward a likely review by the U.S. Supreme Court. One of the bills, introduced by state Rep. Sarah Anthony, D-Lansing, would write into state law a provision of the ACA that requires health policies to include coverage for mental health care and substance abuse disorder “at a level of benefits that is no less favorable than the level provided for physical illness,” according to draft language of the legislation. A bi l l f rom state Rep. Matt Kolesza r, D-Northv ille, would require hea lth policies to cover a list of essential health benefits. Another bill, sponsored by state Rep. Jon Hoadley, D-Kalamazoo, would add “gender, gender identity, or sexual orientation” to antidiscrimination provisions of the state insurance code. The four bills sit in the House Insurance Committee and would need to gain support from Republican lawmakers, who have never shown much love for the Affordable Care Act. Still, one key Republican on health care issues in Lansing said in a statement after the governor’s State of the State address that he’s at least open the proposals. “The governor’s idea of enshrining parts of the Affordable Care Act into state law would require careful consideration. Always in the forefront of my mind is the critical importance Visit www.mibiz.com

of access to health care — especially in rural areas — and whatever we do regarding health care must keep that need in mind,” said Sen. Curt Vanderwall, R-Ludington, who chairs the Senate Health Policy Committee.

‘The right direction’ Some of the ACA’s provisions, particularly on pre-existing conditions, have proven “enormously popular within health care,” said Michigan State Medical Society President Bobby Mukkamala. Should the Supreme Court ultimately nullify the ACA, “at least we would have some state protections that won’t take Michigan backwards to the point where we didn’t have those things,” he said. The Michigan State Medical Society considers putting some ACA provisions in state law as “taking us in the right direction,” Mukkamala said. “Right now, we’re sort of relying on federal law to accomplish those improvements in health care in the country, and in case something happens to that federal law, this would sort of serve to preserve it, at least in Michigan,” Mukkamala said. A Flint otolaryngologist, Mukkamala views the idea of putting some ACA provisions into state law as an issue that should transcend politics. The Medical Society will actively advocate for the bills in Lansing, he said. “I think it’s prudent lawmaking to protect our citizens of Michigan in this way, regardless of party,” Mukkamala said. “I don’t see it as a partisan issue. I just see it as wisdom in preparation for what could happen.”

‘A good idea’ As of mid 2019, 11 states had enacted some kind of legislation codifying pre-existing condition protections into their laws, according to a July report from Avalere Health, a Washington, D.C.-based health care consulting firm. Given the uncertainty of the ACA resulting from the Texas case, “it’s probably a good idea” to have protections at the state level, said Laura

the notion of improving the ACA and is willAppel, senior vice president and chief innovaing to look at embedding the elements on pretion officer for the Michigan Health & Hospital existing conditions in state law. Association. “Blue Cross has long supported access to “We would not want to have a number of care and coverage for all, including people things happen to people,” Appel said. “You with pre-existing conditions,” Andy Hetzel, never know what’s going to change at the fedBlue Cross Blue Shield eral level.” of Michigan’s vice presiPrior to the ACA’s pasdent of corporate comsage, t he rescission of munications, wrote in an health coverage, particuemail to MiBiz. “We suplarly individual policies, port bipartisan efforts in was a “very serious probCongress to stabilize the lem,” she said. The fedACA, including efforts to eral law banned the pracprotect people with pretice, offering a “huge and existing conditions and important benefit,” Appel continue federa l subsisaid. dies to help people better “It’s not something that a f ford t heir indiv idua l many people experienced, coverage. We would simbut if you were the one that ilarly support efforts at did, it was just immensely the state level to provide devastating,” she said. security for people with Such a move does have pre-existing conditions in its limitations, however. accessing coverage from Employers’ self-funded all health insurers operathea lt h plans are reg uing in our state.” lated by federal law, the — BOBBY MUKKAMALA P r i or t o t h e AC A , E mploy e e Ret i r ement President of the Michigan State Blue Cross Blue Shield of Income Security Act of Medical Society Michigan was the “insurer 1974, and are not subject of last resort” in Michigan to state laws. that under state law had A fter t he governor’s to accept everyone who applied for coverage, speech, early response to the idea of securing regardless of health status. That changed with key elements of the ACA, particularly the part the federal law’s provision for an issue guarandealing with pre-existing conditions, indicated tee required of all health insurers. that “everybody was fairly open to the possiThe Michigan Association of Health Plans, bilities,” Appel said. which represents HMOs in the state, hopes “to Consumers have become accustomed to work with the governor and the Legislature ACA provisions on pre-existing conditions, on evaluating any and all health care reform and data from the governor’s office indicate proposals they might have,” said Executive more than half of Michigan residents have a Director Dominick Pallone. medical condition an insurer could consider Some aspects of the ACA are also already pre-existing, she said. included in state law. They include the right for a consumer to seek an independent review Broad industry support when a medical claim is denied or to resolve The state’s largest health insurer, Blue Cross other disputes, and similar methods to set rates Blue Shield of Michigan, generally supports for health policies, Pallone said.

“I think it’s prudent lawmaking to protect our citizens of Michigan in this way, regardless of party. I don’t see it as a partisan issue. I just see it as wisdom in preparation for what could happen.”

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ECONOMIC DEVELOPMENT

Criminal justice reform can help address workforce development, biz group says By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

series of recommendations from a state joint task force on reducing Michigan’s ballooning jail population can also address workforce development challenges, says a leading West Michigan business group. The Michigan Joint Task Force on Jail and Pretrial Incarceration — created by executive order from Gov. Gretchen Whitmer last year — in January released a 46-page report outlining 18 criminal justice reforms for lawmakers. Recommendations include ending license suspension and revocation for actions unrelated to safe driving, using appearance tickets as an alternative to arrest and jail, training police officers in behavioral health, and standardizing criminal justice data collection and reporting statewide, to name a few. West Michigan business advocates say criminal justice reform is a top policy priority, following recent legislative success that has drawn bipartisan support. “We’re at a time when we hear talent is a top issue and barrier for businesses of all industries and sizes. Our work in the workforce development space is around breaking down barriers and also tapping into populations we think are not fully tapped into,” said Alexa Kramer, director of government affairs with the Grand Rapids Area Chamber of Commerce. “The criminal justice system is one of those areas that can be a key barrier to workforce development for a lot of folks,” she added.

by Supreme Court reason to believe are a threat to public safety Chief Justice Bridget and develop alternative punishments for peoMcCormack and Lt. ple who violated a law but are not a public safety Gov. Garlin Gilchrist, risk,” David Guenthner, senior strategist for state affairs at the Mackinac Center for Public Policy, and met with experts said in a statement. across the state for Michigan League for Public Policy President four months last year. and CEO Gilda Jacobs said her organization The group exam“wholeheartedly supports” the task force’s ined 10 years of Kramer Guenthner Jacobs Chatfield recommendations. arrest and court data “Our current jail system’s overemphasis on from the state. The In September, the Grand Rapids Chamber fines and fees — and severe imbalance and punrecommendations paint a bleak picture about submitted testimony to the task force that was ishment for those who can’t afford them — is crethe status of Michigan’s jail population, which co-signed by executives from 11 area businesses, ating a modern-day debtors’ prison where peohas nearly tripled over the past 40 years while including Wolverine Building Group, RoMan ple with lower incomes receive harsher penalties crime rates have hit 50-year lows. In the past few Manufacturing, Mercy Health Saint Mary’s and than people with money,” Jacobs said in a statedecades, Michigan’s jail population was roughly Cascade Engineering. ment. “This area of our justice system has sadly split between pretrial and convicted detainees. Jailing people before trial because they can’t become more focused on public profits than The top five reasons people are sent to jail pay bail or for other administrative violations public safety and the punishment often fits the are: operating under the influence, assault, drivnegatively affects the workforce, businesses say. pocketbook more than the crime.” ing without a valid license, theft, and parole or “These practices unnecessarily disrupt our probation violation. businesses, destabilizing the individual’s producThe jail population also is made up disproAPPETITE FOR ACTION? tivity and the productivity of their employer,” the portionately of black men, while estimates show The report’s release follows multiple statewide companies wrote in the letter. that 23 percent of those entering jail had a sericriminal justice reforms over the past year, includThe letter includes four “shared principles” ous mental illness, a figure that increases in rural ing raising the age of defining an adult and allowamong the business community: “The fastest counties. ing parole for medically frail inmates. In late 2019, route out of a crime is a job;” “jail is not a oneThe report notes the rising jail population has the state House passed reforms size-fits-all solution;” “use data and evidencestrained local resources. involving the expungement of based solutions;” and “no one should ever be in “Policymakers in Michigan certain criminal records. jail because they are poor.” aiming to address jail incarcerThe recommendations ation must therefore address are effectively suggestions both the large number of peoCRIME DOWN, JAIL POPULATION UP ple whose lives are disrupted for issues for lawmakers to The task force — made up of 12 Whitmer appoinaddress. House Speaker Lee by short jail stays, who contees and nine state officials — was chaired Chatfield, R-Levering, and sume significant amounts of Republican Senate Majority public safety resources, and Leader Mike Shirkey indicated the relatively small group of a willingness to take up addipeople whose long stays drive tional criminal justice issues. up county jail populations,” “We have made significant according to the report. progress in reforming our crimThe Michigan Association inal justice system in recent of Counties is studying the years, but there is much more report’s recommendations, but we can do to protect the rights, said in January ahead of the freedoms and safety of every report’s release that the effort is single Michigan resident,” “notable for both its outreach to Chatfield said after the report’s county leaders directly involved release. “The House will review in jail operations and for the every one of these recommendata it has brought to public dations and begin work immeattention.” — ALEXA KRAMER diately to help protect the peoMAC Executive Director ple of our state and give them Stephan Currie was among the Director of Government the local and state government co-signers with top lawmakers Affairs at the Grand Rapids they deserve.” and public officials who outChamber Advocates, too, are optimislined the scope of the task force’s tic about the political outlook. work. “I feel very confident the The report also drew support political climate will allow movement on this from multiple public policy advocacy groups. knowing this is a great bipartisan issue and “The task force recommendations follow a something we can rally behind,” said Kramer theme that has been key to the successful crimfrom the Grand Rapids Chamber. “There is still inal justice reforms of the last decade and a a lot of work to be done in this space.” half: We should lock up the people who we have

COMMITTED TO WEST MICHIGAN.

CONNECTED TO THE WORLD.

“I feel very confident the political climate will allow movement on this knowing this is a great bipartisan issue and something we can rally behind. There is still a lot of work to be done in this space.”

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SEPTEMBER 3, 2013 VOL. 25 • NO. 23

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

Faith-based philanthropy drives local affiliate of National Christian Foundation By JANE C. SIMONS | MiBiz jsimons@mibiz.com

‘We’ve made some bad beer’ Quick decisions, making messes and staying humble drive explosive growth for Founders Brewing Co.

By NATHAN PECK | MiBiz

“The ‘uber’ beer geeks took notice. They shouted about us, and that allowed us to move in a positive direction. The attention put us in the limelight and made us the darlings of the industry,” Stevens explained. “The beer geeks are the reason this beautiful ike Stevens, president of Founders Brewing Co., can little disaster we call the craft beer industry exists.” laugh now about some of the poor choices the Grand Yet, by the mid-1990s, the company was also butting up Rapids-based craft brewer made over the years. against a series of constraints: a small production space, a lease He even cops to perhaps the worst sin of all for on a space that was too small for the growing business, and an a craft brewery. organizational structure that had Engbers and Stevens handling “We’ve made some bad beer,” Stevens said with too much of the day-to-day operations. a laugh. It’s not the sentiment that one would expect to come from the brewer of one of the world’s top-rated stouts, but it was the company’s willingness to try new ideas and fail that marked the To address those concerns, the late businessman Peter Cook, a point at which Founders Brewing Co. transitioned from a smallmentor to Stevens, pressed the company to formalize its relascale, also-ran to an internationally renowned brewer of some tionship with its board. Cook pushed them to focus on the of the boldest beers on the market. core of their business and leave other concerns to their growIn the mid-1990s, Founders Brewing was in trouble. In its ing staff. small production and taproom space on Monroe Avenue just “He wasn’t into discussing finances — he didn’t really underblocks from downtown Grand Rapids, co-founders Dave Engbers stand what we were doing,” Stevens said. “We and Mike Stevens realized that going with what the were undercapitalized, he told us. ‘Don’t worry industry demanded at the time was not leading about the mess you’re creating, that’s what investhem to success. Tossing out the accepted playtors are for.’ When you have drive, when you book, the duo instead opted to make the beers they have a product that is selling, don’t look back — were seeking: big, bold and unlike other offerings let others clean up your mess.” currently on the market. The effect was two-fold: Engbers and Stevens As part of that shift, Founders’ taproom became had to formalize their roles within the organizaa testing ground where the company released its tion, and the company began to bring in experts new and experimental brews. Some flopped. A few grabbed drinkers’ attentions. Today, a handful — MIKE STEVENS to handle areas where there were deficiencies. of those beers are among Founders’ most popuFounders Brewing Co. Whereas the two frequently touched all aspects of their business, they were forced to step back. lar brands: Dirty Bastard, Breakfast Stout (and its Their board had always included investors, but amped-up, barrel-aged brother, Kentucky Breakfast they now had a group with expertise that could Stout) and Double Trouble. But back then, they were help guide them forward. only experiments written in chalk on the daily specials board. “It held me accountable to shareholders and the people who “We tried making a lager when we shouldn’t have. We’ve done have a stake in the business,” Stevens said. “It made me better. some things with spices that didn’t turn out well,” Stevens said. Dave and I had to be better.” “But if we didn’t do that, we wouldn’t have made KBS.” But the transition was at times difficult. In pockets across the U.S., on blogs and message boards, “Personally, I’ve had more roles here than anyone. When Founders’ beers began attracting the attention of a growing numwe started, there was just three of us. We all helped … brewing, ber of craft beer aficionados. As the company’s beers started winning awards, the American drinker began turning away from the pale, fizzy domestics in favor of bolder craft brews. See FOUNDERS BREWING on page 12 npeck@mibiz.com

Make messes

“It feels like we’ve been building the plane while flying it.”

hilanthropic families throughout Western and Northern Michigan are putting their faith into action with their money. And they’re turning to a local affiliate of the National Christian Foundation (NCF) to help them. Locally, 350 families served by the organization’s West Michigan office contributed $36 million to individual “Giving Funds” at NCF and recommended more than $31 million in grants in 2012 to charities of their choice, said Jamie Kuiper, president of NCF’s West Michigan office headquartered in Grand Rapids. “That’s a lot of money,” Kuiper said. “Our office is the third largest NCF office in the country measured Kuiper by fund balance.” Kuiper declined to identify any of the 350 families. “We have some major donors, but I can’t tell you who they are,” he said. “They want to remain anonymous, and we provide a mechanism for anonymous giving.” Mike Stevens, president Founders BrewingGiving Co. NCF’sofdonor-advised Funds offer PHOTO: JEFF HAGE families an “easy-to-establish, low-cost, flexible” vehicle for charitable giving that’s an alternative to establishing a private foundation, according to the organization. Donors’ efforts have helped to make the Atlanta-based National Christian Foundation 19th largest philanthropic 2014 OUTSTANDING GROWTHthe AWARD organization in the United States, according to a 2012 article in The Chronicle of Philanthropy. In late July, officials with the NCF announced that they had reached a milestone their giving history when Grand Rapids-based craft brewerin founded in 1997 by Mike Stevens andthey Dave Engbers granted their four billionth dollar

FOUNDERS BREWING CO. ■

to the Association of Faith Churches and The NCF West Michigan affiliate has Ministers International, a Minnesota- an 18-member board which includes Jerry based international ministry that plans Jonker, chairman of the board and a partto use the money to support an orphan- ner in Grand Rapids-based Home Acres age in Thailand that provides housing and Supply Co.; Wendell Christoff, co-owner schooling for children rescued from the of Litehouse Inc., a salad dressing, sauce sex trade. and dip manufacturer with operations That grant was recommended by giv- in Lowell; and James Dally, a Kalamazoo ers in Midland through their Grounds for businessman. a Better World Giving fund. The group is Dally said the ability to have direct served by the NCF’s Eastern Michigan involvement in where his donations are office located in Birmingham. going and the asset-based giving approach “We are a well-kept secret,” Kuiper said. are appealing to him and his family. “A big part of it is our business model. Our However, his faith in God is what really local operating budget is about $360,000. led him to the organization. He said he was SERVING WESTERN MICHIGAN BUSINESS SINCE 1988 We don’t spend much on marketing.” referred to NCF by successful friends who The local affiliate had total revenue of were also involved in faith-based giving. more than $499,000 and expenses of about “Biblically, it’s very clear that ‘he that $384,000 in 2011, according to the most refreshes others will be replenished,’” recent IRS Form 990 available. Dally said. “I’ve applied those biblical Donors to NCF are attracted to the principles to what I do.” mission andBy ministry of the organizaWhat Dally does is manage several NICK MANES | MiBiz tion foundednmanes@mibiz.com in 1982. The three Christian West Michigan-based businesses. He is the financial experts who laid the groundwork founder and owner of Biddergy.com, an A West Michigan medical device development for the NCF were looking for a way to “simonline consignment and business liquidaand manufacturing company is consolidating to plify the process of giving, multiplyitsthe tion auction Kalamazoo and expanding operations, while website; Adventure Learning still planning to leave a footprint in Grand Rapids. results and glorify the Lord.” Centers, which operates child care centers Oshtemo Township-based Keystone “We went on to introduce one of the first in Solutions Portage, Caledonia and Kentwood; and Group invested about $500,000 into a new Christian-focused donor-advised Mavcon a construction and develop24,000-square-foot facilityfunds, with a clean room Inc., in what we nowKalamazoo call the Giving said company. All three businesses are where itFund,” will move all ofment its product development and manufacturing Larry Burkett, a best-selling author andoperations. based at offices in the Kalamazoo/Portage With theofnew building up and running, entrepreneur, who is one NCF’s founders. area. Keystone plans to consolidate all of its manu“We also developed special resources and expertise as well as facturinga to the siteexpertise and moveinout of aThe facility asset-based giving, tax smart the character and integrity of the individnear thewhich GeraldisR.the Ford International Airport in Rapids. way to donateGrand non-cash assets such as real uals involved with NCF is what Dally said Having two separate manufacturing facilities estate and business interests.” keeps him involved. made it difficult to show customers Keystone’s full The localset of affiliate was originally Founder Burkett said over the past three capabilities, said Robert Nesky, Keystone’s founded in 2000 asofthe Michigan decades, NCF has become the nation’s director salesWest and product development. “Our intention was always to have largest the business Christian Foundation, but joined forces provider of donor-advised funds IN givers. roof, but it has taken to actuwith the NCFunderneath because ofone the resources and a while focused primarilyMADE on Christian ally put that together,” said Nesky, noting that the expertise it provided. “Any charity MICHIGAN that doesn’t violate our consolidation plan had been in the works for some “The reason for“It’s thea affiliation with NCF statement is eligible to seekGroups fundKeystone Solutions time. good thing we waited because our busi- of faith provides product was that the tools they are able to offerWe giving afrom said. “Ourdevelopdonors ness has actually expanded. now have largerus,” Kuiper ment services and contract the two older facilities ers are muchfacility morethan sophisticated,” Kuipercombined.” are people who share our worldview as it manufacturing at a new The Grand Rapids location stemmed from a said. “We were one of the first two or three relates to material possessions and what 24,000-square-foot , ISO previous acquisition. affiliates. Now there 28.” operates in a variety God of has called us13485-certified to do.” facility with Whileare Keystone sec-

FEBRUARY 17, 2014 VOL. 26 • NO. 9

Keystone relies on product development business to drive contracts

■ Originally located in the Brass Works Building on North a clean room in Kalamazoo. tors ranging from automotive and aerospace to Monroe Avenue; moved to 235 Grandville Avenue in 2007 renewable energy, majority Michigan. of its business The about firm, MiBiz, whichvisit was founded ■ Sold 111,000 barrels of beer in 2013 COPYRIGHT 2013 © MIBIZ. Print subscriptions are free to qualified individuals who are employed in Westthe and Southwest For further information www.mibiz.com. ■ Volume grew 63% comes from serving West Michigan’s burgeoning in 1997 and had revenues of ■ Off-premise sales were up 46% medical device industry. around $5 million last year, ■ On-premise distribution rose 58% The company, which employs around 10 engiconsolidated its manufacturing under one roof with the new facility, but still plans to maintain a ■ The Association for Corporate Growth West Michigan will neers, had around $5 million in sales last year, but presence in the Grand Rapids area, where it is a member of MiDevice, a consortium of medical present its 2014 Outstanding Growth Award to Founders has grown about 30 percent over the past five years, device manufacturers. Keystone offers clients a full range of product design, contract manuBrewing Co. on March 18. The event runs from 5:30-8 p.m. Nesky said. at the Amway Grand Plaza in Grand Rapids. Visit acgwmich. facturing and logistics services. It mainly serves the medical device, automotive, aerospace and org for more information. While the business is currently about evenly renewable energy sectors. 200,000 180,000 160,000 140,000

FBC BARRELS PRODUCED

120,000

190,000

2014 proj.

112,000

100,000 80,000

70,886

60,000 40,000 20,000

40,937 17,330 6,127 11,898

24,501

0 2007 2008 2009 2010 2011 2012 2013 2014* SOURCE: FOUNDERS BREWING CO.

split between product development and contract manufacturing, executives want to put more emphasis on the manufacturing side as part of the consolidation. Operating in an ISO 13485-certified facility, Keystone plans to grow the product development side of its business, which should translate into additional opportunities in contract manufacturing, Nesky said. “(Product development), more and more, feeds into our contract manufacturing, specifically when it comes to medical devices,” Nesky said. “By expanding our facility and having us underneath one roof, we’re not jockeying around to two different facilities. It really helps show (our customers) what our infrastructure is, and it paints a much better picture for them that as they develop their products, Keystone could also be the contract manufacturer of some of those products. It has had an immediate impact on our business and our pipeline.” Many of Keystone’s clients value that they can work with a single company to develop a product, manage the manufacturing and production

process, and then distribute it, according to previous MiBiz reports. “There are several companies on the west and east coasts that compete with them because that’s where the big medical technology companies are based,” Hank Brown, former CEO of Tangent Medical Technologies in Ann Arbor, said in a previous MiBiz report on the company. “Keystone is a unique brand in the Michigan market.” Tangent worked with Keystone to develop a new kind of catheter called NovaCath. Keystone executives make it clear that the firm is not an OEM, but is instead focused on both design and manufacturing. The products they make do not contain the Keystone brand, but rather the names of its clients, who also entrust the company to handle the logistics of distributing the products directly to hospitals and other medical facilities. While the company is moving the vast majority of its business to the Kalamazoo area where the

company was founded in 1997, Keystone still sees significant value in the Grand Rapids market. For that reason, the company plans to open an office primarily focused on sales at a to-be-determined downtown location in the first or second quarter of this year, Nesky said. The reasoning behind keeping a presence in Grand Rapids, Nesky said, is primarily due to Keystone having a number of customers in the area. The company is also involved in organizations such as MiDevice, a consortium of two dozen medical device-sector firms led by The Right Place Inc. “Keystone is a great company with terrific leadership and we congratulate them on the planned downtown office,” said Eric Icard, a business development manager at The Right Place who leads the MiDevice consortium. Both Nesky and Keystone founder and President Jim Medsker “have been strong advocates for medical device manufacturing in West Michigan and are extremely active in MiDevice.”

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REAL ESTATE & DEVELOPMENT RENT TRENDS Continued from page 1

“We have not had to add any sort of incentives to our properties as incentives to rent, but what we have had is owners asking, ‘How come this property is not renting for the same price as last year?’”

GRAND RAPIDS RENT GROWTH OVER PAST 12 MONTHS

Currently, median rents in Grand Rapids are $755 for a one-bedroom apartment and $917 for Median rent for a two-bedroom apartment a two-bedroom. Grand Rapids’ year-over-year growth lags the state average of 1.1 percent, as in Grand Rapids was $917, which is still below well as the national average of 1.6 percent. the national average of $1,193. T he g row t h i n rent +2% prices in Gra nd Rapids also lagged behind the state average of 1.1 percent, as well as the national average of 1.6 percent. Most +1% c it ie s n at ionw ide s a w rent increases last year, — TIM VANDENTOORN although Grand Rapids is Managing Partner at United Properties of West “more reasonable” than +0% Wheeler Michigan most large cities, according to Apartment List. Rock ford Proper t y n GRAND RAPIDS n MICHIGAN n US Management, like many -1% The days of being able to rent a “C-class” property managers, uses 2019 FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 2020 property that hasn’t been maintained or comparables when setting updated are gone, VandenToorn said. In this its rental pricing. The firm SOURCE: APARTMENT LIST market, United Properties focuses on upgrades focuses on the reality that to make properties more appealing, which people have many choices could be as simple as taking better marketing when it comes to housing in VandenToorn photos, and also offers a “very flexible” schedGrand Rapids. ule to show the units. The company spends a “Although there is some significant amount of money on marketing differentiation with how units are built out, a Throughout the past year, rent increases have been occurring not just in the city of Grand and its web presence, he added. lot of the new apartments are really similar,” Rapids, but across the entire state. Of the largest 10 cities that Apartment List has data for in “Our reputation based on the size of our Steimle-App said. “We focus on a hospitalityMichigan, all of them have seen prices rise. The state as a whole logged rent growth of 1.1% company is very important,” VandenToorn driven culture. We emphasize the extremely percent over the past year. said. “With social media and the web, that’s a high level of customer service, but also where very big thing for us and our owners.” we utilize our community as an amenity.” $1,400 2% The tactics to attract renters seem Pure Real Estate Management LLC, $1,360 to be working, as Grand Rapids has which started in 2018 as an offshoot $1,200 $1,310 vacancy rates below 5 percent for of what’s now known as Wheeler $1,210 $1,000 multifamily properties, accordDevelopment Group, manages $1,080 $1,030 ing to recent data from the West multiple townhome properties $970 $920 $800 $900 $870 Michiga n of f ice of Colliers in communities in and around 1% REAL ESTATE International. The firm expects Grand Rapids. Townhomes take $600 $730 + DEVELOPMENT more than 900 market-rate units different marketing compared Sponsored by $400 to come online in 2020. to dow ntow n Gra nd Rapids ROCKFORD CONSTRUCTION CO. As more units reach the marapa r t ment s, but P u re Rea l $200 ket, property managers predict Estate uses some of the same $0 a further shift into providing amenities beyond tactics when it comes to attracting residents 0% G D IT IA just a nice place to live. in a competitive market. TS NT EN DS OR RN N N O I I N I H R B L O A P F TR IG VO NS TL AR AR RB “We feel that by adding more value to our “We start to dial in on the things that we RA LI DE HE W LA N ES D EA G N N W D N A actual physical space, we’re creating more can add to the resident experience,” said Jason A LI GR ER value as a part of our building others may not Wheeler, communications director for Pure ST SOURCE: APARTMENT LIST have,” Steimle-App said. Real Estate. “We want people to feel like they’re living in a home, so we try to attract that potential audience and look at in-unit amenities.” The communities surrounding Grand Rapids also provide a valuable asset that sometimes can’t be found in more urban areas, including different school districts and amenities like bike and walking trails, dog parks and other recreation opportunities. These are high value add-ons that differentiate Pure Real Estate’s properties from others, Wheeler said. Pure Real Estate also will offer incentives, including discounted units or first month free deals, when more competition exists. “Those are dictated by how busy the market is,” Wheeler said. For property managers who work with single-family or smaller multifamily properties, the competitiveness in the market has caused rents to plateau recently, said Tim VandenToorn, managing partner and broker at Grand Rapids-based United Properties of West Michigan LLC. United Properties manages about 1,000 single-family and small multifamily units in and around Grand Rapids. VandenToorn cited several differences between the market for single-family home rentals and newly built properties. “Condo and apartment buildings do have Instead of the standard 9-5, tradesmen and women are to add a lot of incentives to attract renters,” he choosing to write a different story - one built on refined said. “We have not had to add any sort of incenROCKFORDCONSTRUCTION.COM skill-sets, creativity, attention to quality and grit. tives to our properties as incentives to rent, but what we have had is owners asking, ‘How come this property is not renting for the same price as last year?’” % RENT GROWTH

1.6% 1.1% 0.5%

Y/Y RENT GROWTH

MEDIAN 2BR RENT

JANUARY 2020 RENTAL TRENDS IN MICHIGAN

BUILDING MORE THAN A RESUME

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FOCUS: EDUCATION & TALENT DEVELOPMENT — EDUCATION/TALENT ROUNDTABLE —

Fixing talent constraints starts with cultural change, partnering with higher ed By MARK SANCHEZ | MiBiz msanchez@mibiz.com

he talent needs of employers are a constantly moving target that requires companies to foster and maintain close ties with educators to keep up with the demands of the 21st century economy. That’s one of the perspectives participants shared in a recent executive roundtable MiBiz hosted on education and talent development. The region’s talent shortage results from a number of forces, including a lack of population growth for more than a decade.

Bill Pink, Grand Rapids Community College

Andy Johnston, Grand Rapids Area Chamber of Commerce

Jacob Maas, West Michigan Works!

Paul Isely, Grand Valley State University

Aaron Maike, Baker College of Muskegon

Dale Nesbary, Muskegon Community College

Participating in the roundtable on education and talent development were: n Paul Isely, associate dean of the Seidman College of Business at Grand Valley State University n Andy Johnston, vice president of government affairs for the Grand Rapids Area Chamber of Commerce n Jacob Maas, CEO of West Michigan Works! n Aaron Maike, president of Baker College of Muskegon n Dale Nesbary, president of Muskegon Community College n Bill Pink, president of Grand Rapids Community College Here are some highlights from what they had to say:

In the last few years, everyone from small business owners to corporate executives tells us their top challenge is difficulty finding and keeping talent. That certainly wasn’t the case a decade ago. How did we get from there to here? PINK: It’s several things. Number one, the region was coming out of a recession 10 years ago and now we have an economy that is booming and with individuals who are working. But at the same time, I think there’s a parallel piece here because while we have this vision that everyone’s working and the unemployment rate is so low, right here in this neighborhood, blocks away (from the MiBiz office on Wealthy Street in Grand Rapids) that’s not the story necessarily in terms of unemployment. We have people in these communities, communities that are lower socio-economically and people of color, in Grand Rapids and West Michigan that do not enjoy that low, low unemployment. While we do have some talent needs out there, I do think there are people who are not part of this economy at the scale that we envision so much. What we see right now in terms of unemployment, I do think there are still opportunities out there. This idea of a talent shortage that our employers are seeing, when we look at it, we know that when it comes to Boomers, they are continuing that trend of retiring and moving elsewhere, and that means moving out of their offices. We know that (we have) this ‘perfect storm.’ We’re not at the beginning of the storm, and we’re certainly not at the end of it. We’re seeing this phenomenon in working with many of our partners across the region and continue to have these conversations Visit www.mibiz.com

of, ‘How do we connect you more to some of these populations who truly aren’t in this economy at this point.’ MAIKE: Michigan’s population hasn’t recovered since the Great Recession. There’s 10,000 Baby Boomers retiring on a daily basis (nationally), and we have such high poverty and education deserts. We need to do more to lift folks out of poverty with some type of education. We have 30 years of really disinvestment in career technical education. We said, ‘Everybody has to get a four-year degree.’ That’s not for everybody. There is a huge pool of people out there right now who are not employed, and employers right now want the best talent and they’re sometimes not willing to take a risk on somebody that might not be exactly what they need for that job, to train them up and watch them be successful. That can help with this as well. NESBARY: This issue goes back decades. We could have had the same conversation in 2002 and 1979 when we were suffering from a recession, and we didn’t in any meaningful way attempt to fix the issue then. The culture here in Michigan has not changed substantially in terms of the view of our residents on what skills and talents they need to be successful. … In higher ed, I don’t think we were as aggressive as we needed to be back then to help convince our communities that that was the case, and our business community was far too insular in their approach to help us approach this issue. We’re making progress. I don’t want to sound like we’re not, but that really hasn’t changed much. Until we address that issue substantially, we’re going to continue to have these conversations whenever our economy goes up and down.

PHOTOS: KATY BATDORFF

MAAS: Part of it, too, is the wage gap. We have a tremendous amount of entrylevel jobs, but frankly, we haven’t seen the earnings bump up enough to really push the demand in certain industries and occupations. The wages have been relatively flat, and I think part of it is the wages just aren’t there yet to bump an interest in certain industries. JOHNSTON: Our members keep telling us that talent is their top issue. They’re starting that wage increase, but it’s slow and it doesn’t keep pace with other things in the economy, necessarily. But some of our companies are also competing on an international basis, so it’s hard to make some of the numbers work. The reasons we’re having this discussion is demographics, changing skill needs, and a steadily growing economy that keeps applying more and more of that pressure. The benefit of it is that it’s exposing these things that we’re talking about in making sure it’s a thriving and prosperous community for all, and really digging in and trying to create access. Because we need everyone if we’re going to keep growing in this new economy. ISELY: Obviously demographics is an issue. We obviously don’t have enough people. It doesn’t matter whether we are training them correctly, there’s not enough people to do the jobs that we have. We had a 10-year-long recession (in Michigan), not a two-yearlong recession, and that 10-year-long recession caused Generation X to leave Michigan at a rate much greater than

others, and their kids now are growing up in other states. That’s the future workforce. A lot of those people left with skills that we needed. Because our housing crisis started before the rest of the United States, construction trades left the state and went someplace else, and then when everything fell apart, they couldn’t come back. That is part of the play of why it feels so bad here in Michigan. How do you overcome some of those cultural issues and raise awareness of the need for some form of education beyond K-12? PINK: The direction we’re trying to push more toward is to get rid of the ‘either/or’ conversation and start in on the ‘both/and.’ Right now, we have this society that wants to separate associate degrees, skilled trades, whatever you want to call it, and fouryear degrees in that conversation. In our space, it’s a both/and, because when an individual finishes one of these skilled trades, we talk about it a lot. ‘Look at what you just did. You finished a certificate. You’ve done college work. What does that next step look like if that’s what you want to do?’ We have to help people understand it doesn’t have to just be this ‘either/or.’ It can be both. NESBARY: We have to drive that cultural change that is required as leaders in education and business. Do we want to be more like the ‘three Ms’ out there? Do we want to be more

like Massachusetts, Minnesota or Mississippi? What social, economic, racial and political efforts did they put in to make their societies improve over time? Minnesota was much less robust in terms of their economy than we were 40 or 50 years ago, but they changed their higher education system in a way that allowed them to work effectively together to do that. They diversified their economy in ways many others didn’t. We’re getting there now, but we’re roughly 20 years behind where they are. Massachusetts is kind of a different story, and Mississippi hasn’t done it at all and you can see where they are. Is part of this conversation that we need to get rid of a one-size-fits-all approach in higher education? PINK: That’s a big part of where we need to be, both from a higher ed perspective and education in general. In some ways, the way we’ve always done business as far as higher education is concerned may not necessarily be the best way people need to receive the (instruction), and they will vote with their enrollment. If our offering is, ‘We’re going to give you this 16-week class and you can come and get your degree in 16-week classes,’ we (cannot) keep thinking that way to a constituency that says, ‘Yeah, but I don’t have time to do that. I have two jobs and I’m trying to take care of a family. Can you give that to me in this way?’ We have to start and are starting that process of See ROUNDTABLE on page 10 MiBiz / FEBRUARY 17, 2020

FOCUS: EDUCATION & TALENT DEVELOPMENT ROUNDTABLE Continued from page 9

“Do we want to be more like Massachusetts, Minnesota or Mississippi? What social, economic, racial and political efforts did they put in to make their societies improve over time? Minnesota was much less robust in terms of their economy than we were 40 or 50 years ago, but they changed their higher education system in a way that allowed them to work effectively together to do that. They diversified their economy in ways many others didn’t. We’re getting there now, but we’re roughly 20 years behind where they are. Massachusetts is kind of a different story, and Mississippi hasn’t done it at all and you can see where they are.”

not only rethinking how it’s delivered, when it’s delivered, the format and how that looks. It has to be that way. What are the consequences over the next decade if this problem doesn’t get better? PINK: From a higher ed perspective, I honestly believe that if we are not responsive, we will find ourselves irrelevant, and if we’re irrelevant, it makes you wonder how long our doors will be open. There are many colleges across this country that are seeing that happen. Part of that is the fact that our business partners, if we’re not being responsive to them, they’ll stop coming. And I don’t blame them. If our responsiveness to our constituents is, ‘Here’s how we do it and here’s how we offer it,’ and they’re saying, ‘That’s not how we need it,’ we go away. JOHNSTON: No matter what organization you are, you have to continue to redefine and evaluate your value proposition for the changes. What we’re hearing from the business community is, ‘Stop trying to train folks for what you think I need for my facility. Give them the basics and give them the foundation, and then give them the soft skills.’ MAIKE: We need to change that methodology to give them the skill sets to be life-long learners, and that goes for the current employees as well because as a population, I don’t know that we’ve done a good job of saying, ‘Great — you have a four-year degree and whatever, but you need to go back and get this skill set because your work environment has changed.’ We have this paradigm of all those folks who are out working but are not as good as they could be.

— DALE NESBARY PRESIDENT OF MUSKEGON COMMUNITY COLLEGE

JOHNSTON: It’s a two-sided coin because a lot of employers need to hear that message, too, about what they’re really looking for. Perfect candidates do not walk through their door, so what skill sets do you really want? If I was hiring somebody, I need hard workers that can work in a fast-paced environment and have a high degree of integrity. That’s what I really look for at the end of the day because we can teach them the other stuff. ISELY: We’re no longer in a world where you go and you get an associate’s degree, or a four-year degree or you go and get a master’s degree, and that skill set will serve you for 10 years. Those times are gone and we’re moving much faster than that. Something the employers are forgetting is that they’re changing what they’re telling us, and they’re changing what they’re telling us very quickly because their world is changing

very quickly. They need to be understanding that once they tell us, it takes a little bit of time to put together a curriculum to give it to them. Should you train for attitude or aptitude? JOHNSTON: With scarcity, attitude becomes more important. You have to have the aptitude, but I just can’t go down the street and get someone. So how do I cultivate the people that I do have that are going to be with me, hopefully, for long? Are you as connected with employers as you need to be? PINK: From my experience, I think this is as strong (in West Michigan) as anywhere I’ve ever been in terms of higher ed and employers. I think the relationship is there. I think there is even more that can be done. Some of the

things we’re starting to see more in our region is K-12 becoming involved in that conversation because we can look at this from the whole education pipeline, K-12 through our four-year partners, and start saying, ‘Some of those soft skills, those employability skills, truly can be embedded and found at the K-12, high school level.’ We’re seeing more of that. MAIKE: We have six career counselors out at our ISD in Muskegon that are in those districts talking to those young kids, taking them on tours of factories, talking about higher ed, and then you couple that with thousands of students in West Michigan doing college work starting in 11th grade where they are biting off a lot of that associate degree for free. That really drives that pendulum and gets younger workers out quicker without that loan debt. ISELY: What we’re solving is what people know and the needs of the community, but we’re not solving the fact that we don’t have enough people. Quite frankly, in being proactive in education and showing this cooperation, some of the reasons we see catalytic effects are where people come here because of what we have: public-private partnerships, those interactions between business and education and those interactions between businesses. I sit in rooms where two manufacturers are talking to each other and I go to the other side of the state and they go, ‘There’s two people talking about that in the same room from two different places?’ That’s special to West Michigan and we need to pay attention to that and take advantage of that, and we will convince more people to come here. We are drawing more people to West Michigan, and we are drawing more young people to West Michigan. See ROUNDTABLE on page 12

Q&A: Tom Kelly

WMU Lean Six Sigma Certification: Flexible and Differentiated Courses Tom Kelly, instructor of supply chain at Western Michigan University, shares his experience on the benefits of WMU’s Lean Six Sigma certification courses. He has 30 years of experience with companies such as GE, Dexter, Amcor, Whirlpool and Parker Hannifin. For those who do not know what Lean Six Sigma is, can you describe it? Lean Six Sigma is a methodology that focuses on improving the performance of an organization by systematically removing waste and reducing variation throughout the organization’s process. It also provides a framework for overall organizational culture change. Lean Six Sigma changes the mindset of an organization’s employees and managers, shifting perspective to growth, continuous improvement and process optimization. How does having certified Six Sigma professionals in your organization transform it? Having team members in an organization who can implement lean tools allows companies to improve their processes and the quality of their products. In turn, these companies are able to produce more products with less error and higher value. Customer satisfaction thereby increases, which will lead to increased customer loyalty.

FEBRUARY 17, 2020 / MiBiz

What does Lean Six Sigma certification do for business professionals and their organizations? Individuals with certification are knowledgeable in different approaches to generate value and meet customer needs. They know how to optimize business processes and enhance staff involvement. Six Sigma certification makes a professional stand out. What differentiates the WMU program? Our program is unique because it does not focus on a particular type of candidate. WMU views Lean Six Sigma as a tool kit that can benefit all functions within business. We match tools to the candidates and their organizations’ needs. Courses are designed to be modular in nature, which permits candidates to tailor the certification process to their schedules.

Western Michigan University’s Lean Six Sigma sessions align with career paths and areas of responsibility. Training sessions are offered in March, June and August.

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The solution for Michigan’s talent gap lies within its current workforce

ichigan and its economy face a significant talent gap. In fact, the Michigan Department of Labor and Statistics estimates that there will be more than 5,000 job openings that require a college degree in the next year.

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FOCUS: EDUCATION & TALENT DEVELOPMENT ROUNDTABLE Continued from page 10

What’s new that employers need in terms of skills? JOHNSTON: We’re working with GVSU and some other partners on another employability skills survey to talk about what soft skills are needed. Number one by a lot is good choices and responsibility. The other is team management, and tech management also surfaced, and your ability to learn and adapt, and also work in those small teams that are so critical to making any organization run. PINK: Many employers want to tell us, ‘Can you tell them to either leave the phone at home or keep it somewhere?’ We hear it a lot from employers that so often people come into their shop that are the traditional 18- to 20-year-old graduate from our school and (employers have to tell them), ‘You’re working now,’ or ‘When you respond to the email, it’s not in ‘LOL’ texting language.’ What I’m hearing more and more is the interpersonal piece and how important that is in just interpersonal communication. MAAS: I don’t think it is new but it is certainly more defined than it used to be. Employers used to tell us, ‘Give me somebody who will show up on time and pass a drug test.’ We’d send them somebody and they would do both and we would say, ‘Hey, why didn’t you hire them?’ We ask the employers to be a little more specific when it comes to the soft skills piece of things. Our Talent Solutions Committee of the Workforce Development Board worked with the West Michigan talent triangle — Ottawa Area ISD, Muskegon ISD and the Kent ISD — to develop curriculum. We wanted a pre-test so we could identify some of those skills that need

improvement because all of us around this table could probably use some level of improvement, whether it’s communications or teamwork. With that, then they do a pre-test and a post-test to make sure you’re competent in the curriculum. We still are in the process of evaluating it, but we asked about 100 employers and had them really identify what they were seeing or not seeing in candidates and what they were looking for. It really came down to nine soft skills or professional skills that we focus on. (Editor’s note: Those nine soft skills are time management and punctuality, communication, teamwork, responsibility, workplace management, adaptability, reasoning, decisiveness, and innovation.) ISELY: What we’re hearing over and over again is they want our students to be able to use data in their critical thinking. Now it’s taken a while to discern what’s meant by that. Do they want a bunch of statistical people? Or do they need somebody who can make cool graphics? Or do they need somebody who understands what the data is telling them in decision making? And the answer is all three, but I think in the broader context, it’s being able to look at data and use it in decision making. Do employers who have persistent problems with talent attraction and retention sometimes need to look at themselves? MAIKE: You have to be competitive in this market. (Rather than saying you have a job opening) will you look at your pay, will you look at your benefits, will you look at your work environment and (are you) somewhere that our students are saying they want to go? JOHNSTON: It’s about setting expectations on both sides. PINK: In higher ed, we’re part of an industry

also because we have to hire as well, so we do understand that dynamic. But from an industry perspective, for years, we were so focused on helping people be aware of what we do. Surely, if we make you aware, you’ll come to us. Now awareness has to be coupled with attractiveness. What makes this the place (that someone chooses rather than) over there? I may be a construction company. Over there might be in health care. I have to attract you to me, rather than over there, and that attraction is compensation, it is benefits, it is work environment, it is ‘do I see people there that look like me and I feel like I belong.’ It is all of those things. Many of our students now are more focused on making sure they have their time. ‘I’m not working for you 60 hours a week. I want my ‘me time.’ Even though I know 60 hours a week may be overtime, it’s OK.’ JOHNSTON: But once they’re there for the 60, they want to know what they’re doing is meaningful to themselves and to the broader community, and some employers can do a better job of connecting why working in this manufacturing company does make for a little better place. Do employers need to look at talent more strategically, just as they do business growth, product development or new markets? MAAS: I feel that employers understand that it is almost their number one commodity, and that they need to start to do a better job of embracing and figuring out how to nurture and create this life-long learner. MAIKE: For the Employers Association of West Michigan (in Muskegon), the HR council roundtable is the most heavily attended. It is all full of HR representatives who are trying to figure it out because they realize how aggressive

“From a higher ed perspective, I honestly believe that if we are not responsive, we will find ourselves irrelevant, and if we’re irrelevant, it makes you wonder how long our doors will be open. There are many colleges across this country that are seeing that happen. Part of that is the fact that our business partners, if we’re not being responsive to them, they’ll stop coming. And I don’t blame them.” — BILL PINK PRESIDENT OF GRAND RAPIDS COMMUNITY COLLEGE

they need to be to find talent now and what this new generation expects for the work environment. There are a lot of employers highly engaged, and I think there’s a few that either don’t want to do it or they don’t have the time to share best practices. They’re not talking to the other employers in that group and saying, ‘What are you doing because I’m really struggling.’

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FOCUS: EDUCATION & TALENT DEVELOPMENT

Corporate pipeline for women improving, but disparities remain By SYDNEY SMITH | MiBiz ssmith@mibiz.com GRAND RAPIDS — For much of her career, Jacey Ehmann was the only woman in the room. While that’s often still true for women in the construction industry, Ehmann is working within her own firm, Grand Rapids-based Metric Structures LLC, to foster a more inclusive environment. At Metric Structures, a majority of the staff are women. “It made me more curious than critical, and I was intrigued by why we didn’t see more women in the construction industry,” Ehmann said. “We’re kind of working to change that narrative, not just for women, but for our entire community and team.” As a female business owner, Ehmann is a rarity not just in construction but for companies in general. An Inforum report on women’s leadership at Michigan’s top public companies shows the numbers of women in leadership positions are still well below the number of men. According to the findings, 21 percent of Michigan’s public companies have women directors; 12 percent of the companies have women as C-suite executives and 19 percent have women executive officers. For women of color, the numbers are much lower. Two percent of companies have directors or executive officers who are women of color. At a time in Michigan when companies are struggling to find needed talent, having inclusive policies and practices are important for

FEBRUARY 17, 2020 / MiBiz

attracting and retaining female talent, said Terry Barclay, president and CEO of Inforum, a Detroit-based nonprofit that helps companies boost talent initiatives for women. “The reason companies are so focused on achieving Barclay better balance in genders is it’s about talent,” Barclay said. “Women are more than half of college graduates. There’s gender parity in hiring for entry-level jobs. But we have, from a gender perspective, a broken first rung.” Barclay was referring to the so-called corporate Trombley ladder. For entry-level positions, women are nearly half of all employees. On the next rung of the corporate ladder, the percentage of women employees drops by 10 percent. This is the largest gap in the corporate ladder for women, but the numbers of women continue to dwindle up to the C-suite level.

Creating inclusion Ehmann did not set out to have a staff that is mostly made up of women, but believes she created an environment that is inclusive of unique policies that help women succeed at

work. “We really have a culture of being supportive instead of competitive,” she said. “We have an unlimited vacation clause, and I have a rea lly comprehensive maternit y leave policy. I really just started from what I thought was right to do for the people that believed in me.” Barclay said companies should know their numbers when it comes to gender gaps and employment, so they can measure themselves against their competition to increase gender parity as much as possible. According to multiple studies, companies that have gender parity are more profitable than those that lack it. “It pays off when you’re searching for talent at any level,” Barclay said. “If you have a reputation as a company being a welcoming place for everyone, that means you have a broader pool of potential talent from which to select. You can become a magnet for talent from all over the country and the globe.” Barclay said developing diverse talent starts with the hiring process, with companies ensuring they have a broad pool of applicants. The next is making sure hiring managers have unconscious bias training. For companies looking to promote workers, it’s important to examine who is typically acting on opportunities. “If you start to see patterns, it’s important to not just assume that you’re offering this and everyone has an equal shot,” Barclay said. “You need to look at who is acting on the opportunities you’re offering, and if you see patterns in that, get curious about why.”

Jacey Ehmann, founder and president of Metric Structures, a Grand Rapids-based construction firm, focuses on an inclusive work policy that’s “supportive instead of competitive.” COURTESY PHOTO

Another important aspect of developing women leaders is that inclusiveness needs to happen at the very top of the company as well, Barclay said. She sees larger companies in Michigan being more open to learning about this topic as talent issues persist. “We do know that leadership at the top makes all the difference in the world, because it sets the tone,” she said. “The top leaders at a company need to make a visible commitment and elevate the visibility of this work internally at their companies.”

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“We really have a culture of being supportive instead of competitive. We have an unlimited vacation clause, and I have a really comprehensive maternity leave policy. I really just started from what I thought was right to do for the people that believed in me.” — JACEY EHMANN President of Metric Structures LLC

Talent development The local focus on women and talent development has grown in recent years, as evidenced by the Grand Rapids Area Chamber of Commerce’s Athena program, which focuses on providing information, access and connections to support women’s professional development in West Michigan. Athena originated in Lansing and has also operated locally in Grand Rapids for 31 years. In 2018, about 80 people attended the Chamber’s Athena event; the most recent program sold out with 200 people in attendance, said Mel Trombley, director of leadership programs at the Chamber. Athena members said the struggles women have faced in the workplace have evolved and

the environment has somewhat improved, Trombley said. The program helps women (and men) across sectors connect and engage in issues that affect working women. The Chamber has developed a scholarship program through Athena that supports women leaders in the community, and hosts events that provide professional skill sets and takeaways. In 2020, it is focusing on bringing in speakers from around the globe. Overall, the professionals who spoke with MiBiz are optimistic for the future of women in the workplace, although they acknowledge there is a long way to go in some aspects, particularly for women of color. “We see the gap and acknowledge it, and are being intentional about our selection of council members, our speakers, our women-owned businesses that we are utilizing to make sure we are using a variety of people,” Trombley said of Athena’s work specifically on issues that women of color face. For some companies, the number of women of color in leadership positions is actually going backwards. “With women of color, saying that we’re stalled in our progress is the most favorable way of saying it,” Barclay said. In the creation of policies, it’s important to be aware of blind spots and recognize the different needs of various groups at work, Ehmann said. Having that f lexibility is the bottom line for inclusion at Metric Structures. “Transparency and flexibility are going to be cornerstones in making big changes,” she said. “Being open about those policy changes is important even if it’s not the industry standard.”

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FOCUS: EDUCATION & TALENT DEVELOPMENT

METAL ON METAL

Metallica grants draw awareness to GRCC welding program By JESSICA YOUNG | MiBiz jyoung@mibiz.com

s one of the first students to graduate from a workforce development program funded by heavy metal band Metallica, Krista Steffens developed skills that sparked her creativity and fueled under her career. For Steffens, who works at furniture supplier Moiron Inc. near Sparta, the motivation to become a welder was simple: She needed a raise. “I was the only income in my household and funds were tight, so I was trying to figure out how to make a little more of a living,” she told MiBiz. Steffens began developing new skills by staying after work for an hour every day to train as a welder. A month later, Moiron, a division of Carthage, Mo.based Leggett & Platt Work Furniture, promoted her to a new position in the welding department, which came with the desired pay increase. “I’ve been just going up from there,” Steffens said. After building her chops as a hand welder at Moiron, she enrolled at Grand Rapids Community College as part of the first cohort of students in a welding program partially funded by a grant from Metallica’s All Within My Hands Foundation. “My company showed me the basics and got me just to where I could produce a product,” she said. “The (GRCC) program taught me the fundamentals and was more in-depth.” Recently, Grand Rapids Community College announced it will receive another grant from the band’s philanthropic arm to help more

non-traditional students access the program and learn to weld. The All Within My Hands Foundation, which was formed in 2017, provides funding for workforce training in cities where the group has toured. GRCC was one of 10 colleges selected nationwide for the initial Metallica Scholars grant in 2018 and results from that cohort “exceeded expectations,” according to a statement from the band’s drummer, Lars Ulrich. “(The students) inspired us in more ways than we could have possibly imagined,” he said. “We’re really excited to be able to expand the initiative in its second year, assisting more students in achieving their dreams and transforming their lives in 2020.” With its share of the first round of funding, which totaled $100,000, GRCC launched its most intensive welding program. The college already housed one of the largest welding facilities in the Midwest, but the Metallica grants help draw more attention to the programs, according to Julie Parks, executive director of workforce training at GRCC. “It brings a whole other level of interest,” Parks told MiBiz. “Some people didn’t know we did welding at the college, and so Metallica made that prominent. There were even a couple of companies that wrote to us to say they were so excited that Metallica was funding this. I wasn’t a big Metallica fan, but there are some very loyal Metallica fans in West Michigan.” Over the course of the past year, Parks has become a bigger fan of the band. “I met James (Hetfield) and he likes to weld,” she said. “He totally gets skilled trades and what the opportunities are and how it can help

Krista Steffens attended GRCC’s welding program thanks in part to a grant from the heavy metal band Metallica. COURTESY PHOTO someone maybe get out of poverty into a really good paying job.” GRCC will use its second $50,000 grant to expand the program to more students with an emphasis on women or people of color, Parks said. The funding will cover most of the cost of tuition and equipment for the students. “We’re just trying to expose people to skilled trades,” she said. “There are some really great jobs and there are great chances for advancement in most fields, especially for women because there haven’t been many women in those fields.” Once on campus, students gain hands-on experience learning oxy/fuel, shielded metal, gas tungsten, gas metal, pipe welding, and robotics and prepare to work as welding technicians in manufacturing, construction and other local industries. GRCC also has partnered with an employerled committee of manufacturing leaders to fill in the gaps. Employers like Rapid-Line Inc., DeWys Manufacturing and Ridgeview Stamping are working with the college to provide work-based learning opportunities for student welders and

hire students who complete the training program. Welding training takes less time to complete at GRCC than traditional courses, but the program is still a big commitment, said Steffens, who is a single mom of two young children. “It takes time,” she said. “My (welding) program was seven weeks and I was away from my family for three or four hours, twice a week, but it was worth it because it opened doors.” Steffens is now part of an apprentice program at GRCC and is planning to continue her education and earn an associate degree from the college. In the process of learning how to weld, Steffens also found genuine enjoyment in the craft. “You’re underneath the hood for eight, nine hours a day, so you’re kind of in your own little bubble,” she said. “Just watching the metal turn into liquid and being able to maneuver it, it’s been very intriguing.” In her free time, Steffens welds metal flower sculptures that she sells or gives as gifts. “It originally started out as a way to make ends meet and then it just evolved into a passion that I didn’t know I had,” she said.

You see it every day. West Michigan is at the center of the Laker Effect. Here, you’ll find Lakers contributing their skills and drive to its considerable growth — as analysts and engineers, biochemists and health professionals, leaders of business and community. Every day your support for Grand Valley demonstrates the power of what can be.

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MICHIGAN’S OUTDOOR RECREATION

West Michigan communities leverage outdoor recreation in placemaking

n 63% of Michigan residents participate in outdoor recreation n 30% of outdoor recreation trips are within 30 miles of participant’s home n 80% of outdoor recreation spending in Michigan is from state residents n Michigan residents are “more likely to participate in kayaking and camping than the average American” In Michigan, outdoor recreation generates: n $26.6 billion in consumer spending n 232,000 direct jobs (twice as many as aerospace industry) n $7.5 billion in wages and salaries n $2.1 billion in local and state tax revenue n $5.26 billion in spending from out-of-state visitors

By SYDNEY SMITH | MiBiz ssmith@mibiz.com

uskegon County officials are hoping the possible purchase of 377 acres of private land will increase the quality of life and help with talent attraction. The land along Lake Michigan in Norton Shores has been on the market for about two years. The county is deciding whether to purchase the property, formerly a Nugent Sand Co. Inc. sand mining operation until 2016, to expand recreational opportunities in the county. “For Muskegon County, it would be a big deal for residents in that it would be land that is accessible and we could see our local families engaging with natural resources, but it’s also a big deal for visitors coming to the area because it offers additional recreational opportunities for them,” Caitlin Ward, marketing and operations manager at the Muskegon County Convention & Visitors Bureau, told MiBiz. If the county purchased the land, it would allow for further placemaking opportunities, an approach to the planning and design of public spaces that intends to promote people’s health and happiness. In many cases, placemaking is put into practice through recreation opportunities. WARD The purpose of placemaking is to “create a sense of place,” which i n c l u d e s re c re ational assets. The Lansingbased Michigan Municipal League assists communiDRAHEIM ties with placemaking efforts, from developing plans for recreation or other community gathering spaces. The organization will provide models and best practices to think about how those assets can be improved, said Shanna Draheim, policy development director at the League. From Dra heim’s perspective, recreation has played a large role in placemaking, and economic development more broadly, in the last 10 years or so. “In the work we’re doing, recreation tends to play a big role because we know there’s demonstrated proof that there are economic grow th in property values near recreation opportunities,” Draheim said. Placema k ing w it h recreation could be a tool to help address ongoing talent issues from a quality of life perspective as well, said Cindy Brown, vice president of talent initiative at The Right Place Inc., a Grand

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Communities across Michigan have started to embrace outdoor recreation as a key component of placemaking initiatives, which are aimed at improving the attractiveness of communities to current and prospective residents, as well as tourists. COURTESY PHOTO

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SOURCE: OUTDOOR INDUSTRY ASSOCIATION

OUTDOOR RECREATION

SECOND OF A 3-PART SERIES

Asset-based economic development key for leveraging outdoor recreation By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

ichigan’s outdoor recreation industry supports tens of thousands of jobs and billions of dollars in consumer spending, but researchers and state officials say ongoing work is needed to understand how the industry can be used as an economic development tool. The Michigan Department of Natural Resources’ Comprehensive Outdoor Recreation Plan for 2018-2022 highlights “asset-based economic development” as a “relatively new tool” for local and statewide agencies. The idea is for communities to identify and promote their assets to compete with other areas on a regional basis — a tool that could be valuable in a state competing with outdoor recreation powerhouses like Colorado, Utah or Vermont. “Ideally, utilizing an asset-based approach would enable the state and communities to better collaborate with each other to address priority recreation needs and gaps and find ways to link community recreation assets to grow Michigan’s overall economy and jobs base,” according to the report, which was prepared by Lansing-based Public Sector Consultants. “With careful research and targeted investment,” the report’s authors add, “local governments can grow their economies by developing outdoor recreation facilities and investing in outdoor recreation programs.” Indeed, the economic benefits of outdoor recreation are well-documented. A report by the U.S. Bureau of Economic Analysis last year showed outdoor recreation contributed $10 billion to Michigan’s gross domestic product. Total statewide GDP grew 9 percent from 2012-2017, while outdoor recreation’s portion grew 18 percent, about 2 percent above the national average, according to data compiled from the federal report. As well, the proximity to outdoor recreation opportunities has been shown to increase adjacent property values. Now researchers, private businesses and government agencies are delving into the ways communities and states can attract consumer spending and business investment through outdoor recreation. Dennis West, president of Marquette-based

No r t h e r n I n i t i a t i v e s , which provides small business loans, helped lead an effort about 10 years ago to take stock of and promote outdoor recreation opportunities across the Upper Peninsula. West also serves on the DNR’s Outdoor WEST Recreation Advisory Council. “The range of possibilities for both Michiganders and tourists has grown extraordinarily,” West said. The goal of the advisory council, he added, centers on answering the key question: “How do we increase participation in outdoor LAWSON recreation in Michigan and further capitalize on these really remarkable natural assets?”

created Michigan’s last year within the DNR. The state’s Comprehensive Outdoor Recreation Plan recommends quantifying the economic impact of public lands, integrating outdoor recreation needs into regional strategies, creating a program to “enhance trail-oriented economic development,” and finding ways to use vacant or underutilized land for recreation. Lawson said this type of inventorying and market analysis can help states like Michigan “understand exactly where their strengths lie so you’re not trying to compete with Utah for downhill skiing but competing with mountain biking or water sports, something other places don’t have.” This also includes “understanding a broader definition of outdoor recreation” that doesn’t perpetuate the imagery around the sector as “rich white people sports,” Lawson said. Other open-ended questions involve outdoor recreation’s role in more traditional sectors like manufacturing. An equipment supplier or auto parts manufacturer may sell components for outdoor recreation gear, for example. But overall it’s difficult to quantify these economic effects. Lawson said the Bureau of Economic Analysis’ report was crucial in beginning to shed light on outdoor recreation’s full economic impact. “It’s really interesting to see how broadly it does touch the economy, far beyond those very traditional tourism-supporting industries,” Lawson said. “It’s not just hotels and restaurants — it touches on manufacturing and design services.”

Rural benefits

Conservation and equity

Megan Lawson, an analyst with Headwaters Economics Inc. in Bozeman, Mont., authored a report last year showing that places with recreation economies have attracted people since the Great Recession “far faster” than places without them, particularly in rural communities. The report analyzed population trends in more than 3,000 counties in the U.S. It used U.S. Department of Agriculture typology codes to identify a “recreation community,” or how much places are dependent on entertainment, recreation and accommodations, the share of personal income from these categories, and the share of vacant housing for seasonal use. Recreationdependent communities in Michigan cover most of the Lower Peninsula and the Upper Peninsula. The Headwaters report found on average that recreation communities showed a positive net migration compared to non-recreation communities, particularly in rural areas, while metro areas in recreation counties are gaining residents at a faster pace. Increasingly, states are creating offices of outdoor recreation to organize these economic development efforts. Gov. Gretchen Whitmer

Jenny Rowland-Shea, senior policy analyst for public lands at the Center for American Progress, has also tracked the ways in which states are using outdoor recreation as an economic development tool. Specifically, states should be looking at conservation programs to secure land for recreation through land trusts and public access sites, create dedicated funding programs and cast a wider net to attract participants. “While it is impressive that nearly half of U.S. residents participate in outdoor activities, more than half of the population — frequently, lowincome people, people of color, and people with disabilities — are left out,” according to a report from the center last year. It adds that statewide outdoor recreation offices are key to organizing conservation efforts. Ultimately, outdoor recreation is an opportunity to promote economic development that veers from traditional programs. “Where the success of this economy is coming from is protected, accessible lands and water,” said Rowland-Shea. “States would be remiss if they’re only focusing on business recruiting and tax breaks.” MiBiz / FEBRUARY 17, 2020

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OUTDOOR RECREATION

SECOND OF A 3-PART SERIES

Partnership forms to protect Michigan’s public lands, parks By MARK SANCHEZ | MiBiz msanchez@mibiz.com

newly formed partnership involving six outdoor recreation and conservation groups wants to protect and maintain Michigan’s public lands for generations to come. Through the ProtectMI public awareness campaign that uses social media, the groups want to promote the importance of parks and public lands. They hope to mobilize residents to become advocates or to sign up as “ambassadors” for local and state parks and public lands. “Part of what we want to do is help people understand the role public lands play in their life,” said Rich Bowman, director of working lands for the Michigan chapter of The Nature Conservancy. “Things that we take for granted tend to get taken away from us. We believe that we need to raise the visibility of public lands so we don’t necessarily take it for granted,” Bowman said. “These public lands are fundamental to who we are as a state and who we are as communities, and we’re really just trying to create the mechanisms through this campaign and social media platforms for people to start talking about that and remembering it.”

The Nature Conservancy, Michigan Recreation and Parks Association, Michigan United Conservation Clubs, Michigan Environmental Council, Heart of the Lakes, and the Michigan Trails & Greenways Alliance partnered in launching the ProtectMI public awareness campaign. The effort aims to help residents realize the importance of state parks and public lands. COURTESY PHOTO

media campaign through internal operations, Bowman said. “What we’re advocating for is greater recognition of and a better understanding of the amazing assets Michigan has to offer. When someone goes outdoors, they don’t stop their enjoyment to think, ‘Gee, I wonder who paid for this and who manages it?’” said Jonathan Jarosz, executive director of Heart of the Lakes, a conservation group out of Bay City. “Most individuals aren’t aware of how their public lands and waters are supported. We want them to enjoy the heck out of our public lands, tell their friends and family how great our state is, and leave with a little better BOWMAN JAROSZ SUMMERS understanding of how it all got there.” For instance, fees and sales of the Recreation The Michigan chapter of The Nature Passport residents can buy when renewing their Conservancy partnered in forming ProtectMI vehicle registrations primarily fund state parks, with the Michigan Recreation and Parks not tax dollars, he said. Association, also known as mParks; Michigan Raising public awareness of what Michigan United Conser vat ion Clubs ; Michiga n and local communities offer extends from the Environmental Council; Heart of the Lakes; fishing and hunting destinations around the and the Michigan Trails & Greenways Alliance. state and the river walkways in many commuEach organization contributed seed fundnities like Grand Rapids and Kalamazoo, to Great ing for ProtectMI and will support the social

Lakes beaches and local neighborhood parks and trails, Bowman said. The public awareness campaign will target market groups beyond the sportsmen who have historically supported public lands through fishing and hunting licenses fees, which have been dwindling in recent years as demographics change and fewer people participate in those sports. ProtectMI wants to mobilize more people who use public lands for reasons other than hunting and fishing. “There are a whole lot of other folks out there who are enjoying using our public lands and waters and we want to be able to activate them long term to be advocates and protectors for those places,” Jarosz said. ProtectMI’s public awareness campaign also intends to tout the economic impact of the state’s natural resources and assets. A recent announcement on the campaign highlighted data showing the outdoor recreation industry in Michigan drives $26.6 billion annually in consumer spending, and directly supports 232,000 jobs and $7.5 billion in wages and salaries. Partners behind ProtectMI view their roles as helping prevent conflicts between users of public

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“When someone goes outdoors, they don’t stop their enjoyment to think, ‘Gee, I wonder who paid for this and who manages it?’ Most individuals aren’t aware of how their public lands and waters are supported. We want them to enjoy the heck out of our public lands, tell their friends and family how great our state is, and leave with a little better understanding of how it all got there.” – JONATHAN JAROSZ

EXECUTIVE DIRECTOR AT HEART OF THE LAKES

lands, driving more conservation and stewardship, and developing future leaders to advocate for parks and public lands. “From a cultural perspective, if those three things aren’t addressed, those are large cultural threats for us,” Jarosz said. The potential for local community leaders to de-emphasize or ignore parks as they pursue growth and development poses another threat, said Clay Summers, executive director of mParks. The public parks and amenities a community offers have become a growing lure in economic development, particularly when seeking to draw a younger generation of talent that places a high value on quality of life when choosing where to live and pursue their careers, Summers said. Community leaders need to “not forget what parks bring to their community as they’re looking at building out, they’re looking at strip malls taking up property or buying up land to put the next big development in,” he said. Ensuring parks are considered as a community grows and develops “should be part of the planning process,” Summers said. “One of the threats that we see … is as cities and townships and counties are looking at growth, a lot of time they’re forgetting about local community parks being a place that attract talent and attract younger residents who want to find a place to live and then look for work,” he said. “As we advocate from our perspective and as part of this larger picture, we’re talking about (parks) not being forgotten as communities are looking at growth, as they’re looking at business attraction and what those types of opportunities bring from an economic impact standpoint.” The role of parks also needs to be more of a consideration when community leaders locally are dealing with tight municipal budgets, Bowman said. The same consideration needs to happen at the state level when weighing budget priorities, such as in the present ongoing debate in Lansing over road funding. Quite often, funding for parks can easily get shuffled backward in those funding arguments, he said. “It’s easy for people to start to think of parks and public land as kind of a luxury thing or something that maybe is nice to have but it isn’t that important,” Bowman said. “We actually think that that again is the result of not necessarily understanding just what a fundamental role these play in what our communities are. I’m as interested in people valuing public lands as much as they value fixing the damn roads.” Visit www.mibiz.com

Rapids-based regional economic development organization. “Quality of life is usually a key component in the location decision for talent,” Brown said. “It may not be specific to outdoor recreation, but the quality of life is important to a lot of the employers. They’re choosing to bring people to open or start their organization or retaining talent in the area or attracting others to the area.” There is a case to be made for outdoor recreation’s role in economic development. Green infrastructure like parks, trails and outdoor recreation spaces improves property values for adjacent residents. For example, more than 30 studies have confirmed that homeowners will pay a premium to be near a park. This is what the League emphasizes when municipal staffers need assistance convincing elected officials to invest in public recreation spaces. It is clear residents place recreational opportunities high in their priorities, Draheim said, although budget challenges sometimes keep local municipalities from investing in their recreation spaces. “Compared to a lot of states, as the economy has rebounded from the recession, a lot of our communities haven’t fully rebounded,” Draheim said. “Sometimes parks and recreation becomes a ‘nice to have’ if it’s parks versus police, for example. You see a lack of investment in those resources even though there’s a high return on investment.” The League is also involved in a grant prog ra m w it h t he Michiga n Economic Development Corp. and Michigan-based crowdfunding platform Patronicity that helps to fund public space and recreation projects. Other state and federal grants also remain available for communities looking to invest in recreational spaces and infrastructure. Along with Nugent Sands in Muskegon County, other large-scale recreation projects are happening around West Michigan.

THE DEEP DIVE:

Ottawa County purchased the Ottawa Sands property in 2019 for $3.82 million at 18153 North Shore Drive in Ferrysburg. The 353-acre property could offer scuba diving, kayaking, fishing and a campground. In Grand Rapids, the HEACOCK restoration of the rapids in the Grand River promises enhanced and new outdoor recreational opportunities. Officials at Grand Rapids Whitewater, which is working along with multiple other organizations on the project, expect this to greatly expand the recreational opportunities in the river and lead to adjacent developments, providing economic development opportunities for the city. “I’m of the view that placemaking really means creating places that are interesting to people, and where they want to engage not only with the outdoors, but with each other,” said

“I’m of the view that placemaking really means creating places that are interesting to people, and where they want to engage not only with the outdoors, but with each other.”

the Nugent Sands property. Steve Heacock, president Over the next few months, and CEO of Grand Rapids the county is holding public Whitewater. “This project is input sessions on what could not only catalytic, but oncehappen at the site. The propin-a-lifetime in its ability erty could support broader to draw people together to outdoor recreation, which in enjoy the outdoors and to turn could expand tourism, enjoy each other in a central economic development and place, a downtown area.” marketing opportunities, Grand Rapids Whitewater Ward said. has received funding from “Wit h more pa rk s a nd the private sector, but also g r e e n s p a c e s , w e s om e the city of Grand Rapids, Kent t i mes see a bet ter qua lCounty and the state. ity of life,” Ward said. “We “Because they recognize would look forward to that the importance, not just for — STEVE HEACOCK to be a marketing point to recreation, but also for the PRESIDENT AND CEO OF encourage people to move environment and the ecology, GRAND RAPIDS WHITEWATER here and raise a family here people seem to grab the vision as well.” of this pretty easily once they see it and think about it,” Heacock said. MiBiz Editor Joe Boomgaard contributed to Meanwhile, Muskegon County is hoping this report. for the same consensus around a vision for

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Outdoor Recreation Michigan is the Great Lakes State, a Water Wonderland, the Midwest’s playground. This three-part report will explore the importance of the outdoor recreation industry to Michigan, emerging threats and the opportunities that abound for communities and companies. n PART 1: FEB. 3 A massive demographic shift and the declining popularity of hunting and fishing threaten to undermine the economic model that for generations has supported fisheries and wildlife conservation in Michigan. Available at mibiz.com n PART 2: FEB. 17 The state of Michigan is working with the private sector to recognize the important role outdoor recreation plays in economic development, including talent and business attraction, placemaking and quality of life. n PART 3: MARCH 2 A wide variety of companies spanning a range of diverse industry sectors make up Michigan’s $26.6 billion outdoor recreation industry.

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Construction Commitment Unparalleled

MiBiz / FEBRUARY 17, 2020

The Ottawa County parks system consists of 40 parks, natural areas and open spaces that cover more than 7,000 acres and includes six public beaches on Lake Michigan and 150 miles of hiking and biking trails. COURTESY PHOTOS: MIKE LOZON

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OUTDOOR RECREATION

SECOND OF A 3-PART SERIES

Ottawa County approaches parks system through economic development lens By MARK SANCHEZ | MiBiz msanchez@mibiz.com

few years ago, Jennifer Owens floated a “crazy idea” to the Ottawa County Parks Department. Her concept was to offer three-month passes to the county-run parks on Lake Michigan for employers to hand out to summer interns so they could enjoy the beach. The intent was to provide college interns in Ottawa County with a free sample of what the area offers in terms of quality of life. The thinking went that perhaps those interns would in turn give serious consideration to returning to the area after graduation to start their careers and end up staying. “I really do hope it helps them say, ‘Yeah, I really would like to live and work here one day,’” said Owens, president of the Zeeland-based economic development group Lakeshore Advantage Corp., which hands out up to 100 Ottawa County park passes annually for employers to give to their summer interns. The idea illustrates how the parks system that Ottawa County has cultivated over more than three decades — combined with Lake Michigan access and the abundant outdoor OWENS recreation opportunities in the area — fits into local economic development strategies. Owens calls the county parks and Lake Michigan “a very, very strong sales element” for Lakeshore Advantage’s attraction and retention work. The area’s natural amenities are embedded throughout the economic development organization’s promotional materials, including images of Lake Michigan beaches on the front page of its website. GAASCH Combined with two state parks in Holland and Grand Haven that are among the busiest in Michigan, the Ottawa County parks system offers local economic developers a valuable tool in waging the proverbial war for attracting business investments and talent, in particular the younger generations that highly value quality of life. “Attracting talent into our region is the only way we’ll continue to be strong as a community,” Owens said. “If you look at Millennials as a whole, what really drives Millennials is SHAMBLIN not the job but the ‘sense of place’ in terms of where they would start or grow their career.” Likewise, The Chamber of Commerce of Grand Haven, Spring Lake and Ferrysburg features outdoor amenities in its promotional materials of the communities.

FEBRUARY 17, 2020 / MiBiz

Ottawa County’s park system, Lake Michigan and the area’s other natural amenities bolster the quality of life that companies are increasingly seeking when deciding where to locate, said Chamber President Joy Gaasch. “With the talent shortage that we have, it’s a really important part of that attraction for our workforce,” Gaasch said. “When we talk to folks, it’s all about those extraneous attributes of a community that make a difference.” Ottawa County is one of the fastest-growing counties in Michigan, with a 2018 estimated population of more than 290,000, up 9 percent from the 2010 Census. The county began a push to Crossing with 239 acres of woods and wetlands along the Pigeon significantly upgrade and expand its parks system in 1987. County River in West Olive, and Rosy Mound Natural Area, a duneland commissioners that year created a parks commission and separate previously owned by a mining company that sports a 0.7-mile trail parks department, then hired a director, John Scholtz. through the woods to Lake Michigan. Parks previously were managed by the Ottawa County Road In Jenison, the 187-acre Grand Ravines features a half-mile Commission. At the time, Ottawa County had nine parks totaling trail along the Grand River with a 275-foot suspension bridge. The 400 acres, including three Lake Michigan beaches: North Beach county first acquired 68 acres of former farmland in 1999, then in Ferrysburg, Kirk Park south of Grand Haven, and Tunnel Park added an adjacent 100-acre parcel that overlooks the river and north of Holland. another 19-acre riverfront parcel for a natural area. Improvements Under Scholtz’s leadership, the county went on to methodically began in 2015. upgrade and expand existing parks and develop several new ones The latest addition to the parks system is Ottawa Sands, a 345with the support of millions of dollars in grants received from the acre former sand-mining operation in Ferrysburg situated on a Michigan Natural Resources Trust Fund that was matched with bend of the Grand River, across from Grand Haven, that includes local funding. an 80-acre inland lake. Today, Ottawa County’s parks system consists of 40 parks, natuThe park opened last October and planning will begin soon on ral areas and open spaces that cover more than 7,000 acres and crafting a master plan for Ottawa Sands, Shamblin said. includes six public beaches on Lake Michigan “Our goal is to really look at the natural and 150 miles of hiking and biking trails. resources of the site and look at a plan that preAfter forming the parks department more serves the amazing natural resources, and then than 30 years ago, the county first identified and open it up for public access,” he said. inventoried pristine dunelands, property frontThe county also continues development of the ing Lake Michigan, and the Grand River, Pigeon Grand River Greenway, a trail network following Creek and Macatawa River corridors to target for the river’s length that will connect to a trail sysfuture acquisition. Guided by a long-term stratetem in Kent County. The $41 million project will gic plan, the county over the years acquired thoutake until 2024 to complete. sands of acres for new parks, natural areas and A capital campaign to raise $7.2 million to – JENNIFER OWENS PRESIDENT OF LAKESHORE ADVANTAGE open spaces. support the Grand River Greenway’s developThat effort took off in earnest in 1996 when ment has so far netted $6.1 million in commitvoters first approved a 0.33-mill tax levy for parks, including proments, Shamblin said. gramming and land acquisition. Voters have since renewed the Amenities such as the Grand River Greenway, and the work parks levy twice for 10 years each, and by wide margins, most to create trail systems along other waterways, adds to the appeal recently in 2016. when pitching Ottawa County, Owens said. “Our parks in a lot of cases are people’s backyards,” said Jason When contacted by a company that’s recruiting talent and seekShamblin, Ottawa County’s parks director since last summer who ing relocation information about the area for prospective employsucceeded Scholtz following his retirement after more than 30 ees, Lakeshore Advantage always includes details about the Ottawa years. “We know that they see the value of the parks.” County parks system “to help them make the case that it’s not only The parks millage generates about $3.5 million annually for a great place to work in, but a great place to live,” Owens said. operations and capital projects, Shamblin said. “It’s a key part of the sales pitch, and not all companies are really The new Ottawa County parks developed over the years include aware of the importance of speaking to the amenities and the recthe 142-acre Connor Bayou Park on the Grand River, Hemlock reation that we have as a way to close the deal,” she said.

“Attracting talent into our region is the only way we’ll continue to be strong as a community.”

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NONPROFIT ORGANIZATIONS

Report highlights concern over ‘tainted money’ in nonprofit sector By JESSICA YOUNG | MiBiz

by the family now facing tough questions. Without industry-wide guideonprofits that depend lines to help organizations navigate on pr ivate donat ions vetting donors and dealing with and often publicly honor increased public scrutiny, nonprofit major gifts are increasboards and staff members are often i ng l y f i nd i ng t hemleft flailing, said Tory Martin, direcselves in ethically complicated spots tor of communications and engagewhen donors become embroiled in ment at the Johnson Center. scandals. “The question of where the money That’s according to a new report is coming from and how the money f rom t he Gra nd Rapid s-ba sed was made in the first place is becomDorothy A. Johnson Center for ing increasingly apparent because Philanthropy. the need for that money is on the rise Perhaps one of the most promiand the discrepancy between who nent recent examples comes via has it and who doesn’t is becoming t he em b at t le d ever more visible,” she said. Sack ler fa m i ly, From a list of common ethical whose members challenges, 40 percent of respondents have collectively to a recent survey by the Association donated m i lof Fundraising Professionals identilions of dollars to fied “tainted” money from donors as major art instituan issue where more guidance and tions around the resources are needed. globe. In fact, the “It’s important to remember that family’s patronnonprofits are between a rock and Martin age to i nst it ua hard place with a lot of these cont ions ra ng i ng siderations, especially for organizafrom the Guggenheim to the Louvre tions that are dealing with meeting may have been the only way the pubpeople’s basic needs,” Martin said. lic would have even come across the Left to their own ideals and the Sack ler name until rel iabi l it y of add irecently. tiona l resource Now, t he fa mi ly streams, some orgaa nd t hei r pha r manizations have volc eut ic a l compa ny, unteered to refuse or Sponsored by: Purdue Pharma LP, return money from GRAND RAPIDS COMMUNITY are infamous for the certain donors that FOUNDATION agg ressive ma rketthey consider probing of the addictive lemat ic. For exa mpainkiller Oxycontin, ple, the University of despite its known dangers, and their Southern California rejected a $5 complicity in fueling the nation’s million endowment in 2017 from deadly opioid epidemic. former film producer and accused The situation has left museums sexual predator Harvey Weinstein. with Sackler-named wings and other The gift was meant to support female nonprofits financially supported filmmakers.

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NONPROFIT SECTOR NEWS

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On the other hand, many organizations say they are unable to return funds once they have already been accepted. The Massachusetts Institute of Technology, Harvard University and Ohio State University all refused to return donations from financier Jeffrey Epstein after he was convicted of sex crimes. M o r e l o c a l l y, a l o d g e a t Interlochen Center for the Arts in Northern Michigan was named after Epstein, who attended the camp in the 1960s and later became a donor. Interlochen renamed the lodge following Epstein’s 2007 conviction in Florida, and “all tangible donor recognition for Epstein was removed from campus,” according to a statement last year from President Trey Devey after the Epstein scandal broke. The issue of tainted money is not new to the nonprofit sector, according to Martin. “There was a great deal of conversation at the beginning of the 20th century when the first major philanthropists as we think of them like Carnegie and Rockefeller showed up and started spending all this money on libraries and church organs when they also were responsible for

tremendous violence within their indust r ia l pract ices,” she sa id. “That question of taking with one hand and giving with the other and whether philanthropic activities can clean your slate, as it were, has been a part of the conversation for forever.” In some circles, the “cleanliness of any money gained through current, predatory capitalist practices should be considered suspect,” according to the report from the Johnson Center. Salvation Army founder William Booth, who died in 1912, is often quoted as say ing, “the problem with tainted money is there t’aint enough,” adding that donations were “washed clean” when used for the greater good. However, the issue may be amplified in 2020 due to the speed at which the public consumes information through technology. The internet seems to be playing a larger role in the spread of public projections and judgment surrounding famous individuals and major donors, according to Martin. “We certainly can’t discount the impact of the internet and the hyperconnectedness of the world in how

those conversations take place and how quickly they move,” she said. The debate over tainted money may be especially pertinent to West Michigan where so many buildings are named after wealthy donors, although major scandals have yet to surface locally. “We have not seen (the issue of tainted donors) particularly rise forward as something that is a particular concern to the (West Michigan) community,” Martin said. “I think most of the conversations we’re in are still generally focused on the great generosity of the community. It almost has this other effect where because those names are so prominent, the concept of philanthropy is very familiar to people.” Yet, the issue remains a top concern across the sector and if nonprofit organizations do start vetting donors more rigorously, it will come with a major shift in control, discipline and thinking around charitable giving and gratitude. “We have many, many conversations in philanthropy about the power dynamics between donors and nonprofits, but at the end of the day, donors have money and nonprofits need money,” Martin said.

Meet our One Hundred New Philanthropists As community leaders, business owners and parents, the Kolehouses bring many perspectives to their philanthropy. They trust Grand Rapids Community Foundation to meet our region’s most pressing challenges with bold, impact-driven solutions. Learn more about how you can make an impact through philanthropy by contacting Jenine Torres at 616.454.1751 or jtorres@grfoundation.org. MiBiz / FEBRUARY 17, 2020

Q&A Christina Keller

IN THE NEWS

President & CEO, Cascade Engineering Inc.

M&A

Christina Keller has led family-owned plastic-injection molding manufacturer Cascade Engineering Inc. since 2018. Keller recently spoke at an event focused on women’s leadership and increasing opportunities for women and others in the West Michigan workforce, and detailed the efforts Cascade Engineering has taken to increase diversity and foster an inclusive working environment. A 10-year veteran of Cascade Engineering, Keller spoke with MiBiz about why being inclusive is important for West Michigan businesses that want to keep growing.

How does diversity and inclusion fit into Cascade Engineering? Cascade is a triple bottom line company, so we focus on people, planet, profits. Diversity and inclusion is a key piece of our founder’s vision. We believe diversity drives innovation. We believe that diversity drives you to be a better organization overall. We’ve been on this journey for over 40 years, creating an inclusive work environment. It’s not just about having a diverse group, but it’s also the inclusivity. How do you put that into practice? We have our leaders go through the Institute for Healing Racism, we have diversity theater for all of our employees where we challenge ourselves with scenarios that have happened within the organization that we then talk about in a group setting as to why it was good or bad. We really create a culture that recognizes that inclusivity is a positive value that we want to embrace. The environment is super important. How did you get to this point as a company? We learned a lot of that through our prisoner re-entry program. A lot of people were having about a 20-percent success rate with hiring people with former felonies or welfare records, and what we found was if you really sit with people and understand what the barriers are and what they’re experiencing, you can create a lot more retention. We’re up to 90-percent retention with a lot of those groups now because we’ve addressed childcare, transportation, other types of things that might be barriers — sometimes unseen barriers — for people to progress. It’s really about sitting with people to understand what their needs are so that we can help bring people forward. For example, we got public transportation to come out to Cascade Engineering from downtown Grand Rapids. That helped a lot of people. We’re looking at the whole system and how we can support our employees. What are some best practices for creating this kind of environment? Everything at the beginning is uncomfortable at some level. It’s just staying with it. We did not have success our first time around. We had success because we had the will to continue and the openness to be able to fail. You might have awkward conversations, you might be having difficult situations, but you can embrace those and learn from them. Create a diverse pipeline of candidates — have at least one female candidate, have at least one candidate of color. You’re more likely to be able to at least have exposure to people who might be a great opportunity to add to your team. That’s a pipeline across the board, across the organization, and with board membership. For you personally, what made you decide to lead the company this way? I spent my younger career traveling. I wanted to solve problems internationally. I went to Africa and Latin America, and it was an experience in Africa I had where I noticed people were homeless, asked a local why they were homeless, and they said it was because World Vision gave grain, and all the local grain farmers went out of business. This whole side of unintended consequences really struck me. We can really do bad when we’re trying to do good. I recognize that in bigger cities and international locations, I was outside of the network I knew. I was really inspired to come back to Grand Rapids where I’m from and to join a privately held company because I believe regions are units of change and we can change West Michigan for the better because of the power of the networks, and we understand some of those unintended consequences in a deep way. My passion is around making a positive impact, and I found the fit with businesses because I believe they are a force that can be used for good. Is diversity and inclusion everyone’s job? I think we put a lot of burden on women to get women in power, or on African Americans to get more African Americans in power, and I think we need to all collectively work at it together. If somebody says it’s not their problem, they might be early on their journey and be a little bit nervous to stick their neck out. We need more people who are in a position of power and comfort and ability to be able to think this way. I think we need to make sure people are OK with different viewpoints, with different ways of thinking. If that’s something someone doesn’t want to take on right now, they might end up driving their company not into an expansive, innovative way. How do you feel about the direction West Michigan is going in terms of women in leadership? It’s great to see more women in leadership roles. You look at the major industries that we have — you have a furniture maker (Herman Miller) with Andi Owen; you have a car maker (General Motors) with Mary Barra; we have an energy company (Consumers Energy) with Patti Poppe; we’ve got the city with Rosalynn Bliss; we’ve got the state with Gretchen Whitmer. We’ve got engineering with Cascade Engineering. This is pretty exciting momentum to have women in these key leadership roles. I’m excited about where we’re going.

Interview conducted and condensed by Sydney Smith. COURTESY PHOTO

FEBRUARY 17, 2020 / MiBiz

n Charlotte-based Spartan Motors Inc. (Nasdaq: SPAR) has divested its emergency response division to Milwaukee-based REV Group Inc. (NYSE: REVG) in a $55 million cash deal, effective Feb. 1. The deal allows Spartan Motors to refocus its business on e-commerce, electrification and autonomous technologies, according to a statement. Under the transaction, Spartan Emergency Response and its brands Spartan Fire Apparatus and Chassis, Smeal Fire Apparatus, Ladder Tower, and UST became part of REV’s Fire & Emergency segment. REV Group also purchased the rights to the “Spartan” name and logo, which it is licensing back to Spartan Motors for its RV chassis business. Spartan plans to change its corporate name “in the coming months, subject to shareholder approval.” The company plans to use proceeds from the divestiture to pay down debt and for working capital. n A division of the Bay Mills Indian Community, based in the eastern Upper Peninsula, has signed an agreement to acquire Four Season’s Market Inc., a grocery store in Brimley. The tribal council approved Bay Mills Enterprises moving forward with the deal on Jan. 27. It expects the acquisition to close within the next six months, according to a statement. The 5,160-square-foot IGA-affiliated store is directly across the street from the 160-acre Brimley State Park, located along Whitefish Bay on Lake Superior, about 15 miles southwest of Sault Ste. Marie. Bay Mills Indian Community Tribal Chairman Bryan Newland said the acquisition will help the tribe toward its goal of “diversifying our business holdings.” The tribe expects to retain all current employees of the store. Terms of the deal were not disclosed. n Lansing-based Neogen Corp. (Nasdaq: NEOG), a food and animal safety products manufacturer, has acquired U.K.-based Abtek Biologicals Limited to accelerate growth in its global microbiology product portfolio. Abtek is a developer and supplier of culture media supplements and microbiology technologies with a production facility in Liverpool whose products complement Neogen’s culture media offerings, according to a statement. The Abtek operation will be managed through Neogen’s European headquarters in Scotland. Terms of the acquisition were not disclosed. n Foxbright LLC, a Grand Rapids software and web services company, was acquired by Hannah Lawrence from owners Catherine Ettinger and Paula Whisman. Founded in 2002, Foxbright primarily works with schools to manage and improve their websites. Calder Capital LLC represented Foxbright in the sale. Terms were undisclosed. Calder Capital also represented Michigan-based Family Wellness Center in the sale to an individual buyer. n Marketing and branding firm Revel acquired Borns B2B. The deal, which closed Jan. 30, “augments and enhances” Revel’s capabilities, partner and CEO Jason Piasecki said. Muskegon-based Revel serves small and mid-sized manufacturers, primarily in West Michigan. Muskegon-based Left Coast Capital Resources LLC brokered the deal, which was financed by Community Shores Bank, also of Muskegon. Terms of the deal were undisclosed. Borns B2B staff moved into Revel’s offices at Lake View Lofts on Western Avenue in downtown Muskegon. Each company retains its brand, and Borns B2B founder Randy Borns remains in business development and creative roles after the transaction. n Niles-based metal components manufacturer Modineer Co. Inc. will broaden its capabilities and enter new end markets under a deal to acquire the family-owned P-K Tool & Manufacturing Co. of Chicago. P-K Tool serves customers in the the powersports and automotive industries and offers tool design and build, welding, laser cutting, machining and assembly, according to a statement. The company employs more than 950 people. Terms of the deal, which closed Jan. 31, were not disclosed. Modineer is owned by Chicago-based

Westbourne Capital Partners, a private equity firm that works with family offices to invest in private companies; Oklahoma City-based family investment firm Hall Capital, the parent company of automotive supplier The Fred Jones Companies; and an unnamed private investor. n Holland-based Westside Auto Group Inc. acquired All Auto Care, a Grand Rapids-based automotive repair shop. The new ownership has been updating the renamed All Auto Services facility at Ball Avenue and Leonard Street, as well as purchased new equipment, according to a statement. The transaction was completed in November 2019 and announced this month. Terms of the deal were not disclosed.

EXPANSION

n Niles-based Niles Steel Tank Co. has completed an 85,000-square-foot facility to grow manufacturing capacity for its Alloy Works specialty division that makes stainless steel vessels. The expansion allows the company to better react to shifting demands from its customers, according to a statement. Alloy Works makes custom tanks for customers in the hydronics, chemical and petrochemical, dairy and food processing, brewing and winery, pharmaceutical and air products industries. Niles Steel Tank is a subsidiary of Bradford White Corp. of Ambler, Pa. Bradford White also operates a Michigan manufacturing facility in Middleville.

DONATION

n Insurance broker Acrisure LLC pledged $15 million to Spectrum Health to create a virtual innovation center for children’s health at Helen DeVos Children’s Hospital. Advanced programs and services at the Acrisure Center for Innovation in Children’s Health will initially focus on genomics and virtual health, according to a statement. Acrisure is one of the top 10 insurance brokers in the U.S. majority with $2 billion in revenue, 561 offices in 39 states and 16 international locations. The company has grown rapidly in the last several years through an aggressive mergers and acquisition strategy and easily ranks as the top acquirer in North America. Acrisure plans to move its headquarters and 400 employees from its current location in Caledonia to the south side of downtown Grand Rapids in the $30 million Studio Park development that’s now under construction.

INVESTING

n Red Oak Capital Group LLC has formed another fund that seeks to raise $50 million through a public bond offering to make commercial real estate bridge loans. The Grand Rapids-based Red Oak Capital said the U.S. Securities and Exchange Commission has fully qualified Red Oak Capital Fund IV and the bond fund is now open to investors. Formation of the fourth bond fund follows three previous funds of $50 million each that funded 23 commercial real estate projects, including six by Fund III, said Red Oak Capital CEO Chip Cummings. Fund IV also comes to market after Red Oak’s Fund III reached capacity in December after only two months.

REAL ESTATE

n Bradley Veneklase, associate broker at Grand Rapids-based Urban Soil Realty, has proposed converting the lower level of 65 Monroe Center St. NW into a five-room, 2,600-squarefoot micro-hotel branded The Finnley, which he named for his daughter. The Grand Rapids Downtown Development Authority approved a $25,000 Downtown Enhancement Grant that will help upgrade the lobby of the building to comply with the Americans with Disabilities Act, which involves lowering the lobby by about six inches. Demolition is ongoing, and Veneklase anticipates the project will be finished in August. Wyomingbased Richard Postema Associates Architects and Engineers PC served as the architect, and Grand Rapids-based Eastown Construction Inc. is completing the construction. Visit www.mibiz.com

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UPCOMING ISSUES

Hudsonville community bank completes $8 million raise

State maps optimal EV charger network

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JANUARY 7, 2019 • VOL. 31/NO. 6 • $3.00

Law tying state rules to federal standard no big deal, biz groups say

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

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With $77M investment, Ablative could draw attention to Michigan’s life sciences industry

By ANDY BALASKOVITZ | MiBiz By MARK SANCHEZ | MiBiz Netherlands-based Gilde Fund in Kalamazoo co-led the venabalaskovitz@mibiz.com msanchez@mibiz.com Healthcare led the Series D financing ture capital round, which includes an round in Kalamazoo-based Ablative unnamed major strategic investor and KALAMAZOO — The $77 million usiness and environmental Solutions, which developed a cathseveral local investors, some of whom investment in Ablative Solutions Inc. groups were equally surprised eter system to treat uncontrollable have backed the company since its ranks as the largest known venture at one of Rick Snyder’s final acts hypertension by deactivating nerves beginning in 2011. Ablative Solutions of Kalamazoo capital deal ever in Michigan, possias Michigan governor: Signing a bill in renal arteries. The investment will fund the comdeveloped a catheter system to bly helping draw more attention to making it more difficult for state agenPetoskey-based BioStar Ventures, pany over three to four years through treat uncontrollable hypertension the state’s life sciences research and cies to adopt rules stricter than federal Michigan Accelerator Fund 1 in Grand a pivotal late-stage clinical trial in the by deactivating nerves in renal development. regulations. Rapids, and Novus Biotechnology See ABLATIVE SOLUTIONS on page 5 arteries. COURTESY PHOTO But while environmental groups say the move jeopardizes natural resources and public health, business advocates downplay the concerns. “I think everyone was a little surprised he signed it,” said Jason Geer, director of energy and environmental policy with the Michigan Chamber PAGE 11 of Commerce. Sponsored by state Rep. Triston www.mibiz.com By SYDNEY SMITH | MiBiz Cole, R-Mancelona, ssmith@mibiz.com H.B. 4205 prohibits Geer state agencies from GRAND RAPIDS — Executives at nonadopting rules more stringent than profit development organizations think federal law “unless the director of the dissolution of the Kent County Land the agency determines that there Bank Authority will affect their operais a clear and convincing need to tions, even if some of the specific effects exceed the applicable federal stanwill remain unknown until the agency is dard.” The law also exempts emerGroups still hope to form healthWest Michigan manufacturers mostly are keeping the status quo with their pre-employment drug screenofficially closed. gency situations and special educaplans if appeal proves successful ing practices even after Michigan voters legalized cannabis use in November. MIBIZ FILE PHOTO: KATY BATDORFF The Kent County Board of Commissioners tion programs. on Dec. 20 voted to dissolve the Kent County “It just requires that if a departBy MARK | MiBiz Land Bank Authority, which is operating as ment wants toSANCHEZ promulgate a rule more msanchez@mibiz.com Innova-Lab, after a lengthy discussion of stringent than federal, they just need the organization’s mission. Ultimately, the to explain it,” Geer said. “I don’t see remedy everIt’s comes, Thewhy Employers’ majority of commissioners decided the land this asf aa hindrance. showing Association wantsstandards to offer members bank had completed its initial mission, espewe’re going beyondstill federal an option forwe’re employee cially in light of improvements in the real and justifying why doinghealth it.” coverage. The association was all set this past estate market since 2011. While more than a dozen states spring to launch an association health plan. Still, the end of marijuana proHowever, nonprofit developers who have similar laws that apply to enviManufacturers face questions Partnering with insurer Priority Health, The hibition will not mean a free-forhave come to rely on the Land Bank to ronmental standards, Michigan’s Employers’ Association planned to offer HMO over drug policies after all for citizens, according to Tami clear messy titles argued the organization applies across all state agencies. and point-of-service products to member VandenBerg, board member of still can play a role in the current market, Snyder vetoed similar legislation in Michigan legalizes marijuana employers, according to a filing with state MI Legalize, an organization that particularly given the affordable housing 2011, saying at the time he was conregulators who approved the coverage last fall. helped bring the legalization inistruggles in the region. cerned it would state’s Then came a“inhibit March 28the federal court ruling By JESSICA YOUNG | MiBiz tiative to voters. “It doesn’t seem like it cost the county ability to work withabusinesses and order by that struck down 2017 executive jyoung@mibiz.com The Michigan Regulation and really anything to have it in place,” said citizens to ensure regulatory President Trumpthat and our subsequent rules issued VandenBerg Taxation of Marihuana Act allows Jeremy DeRoo, executive director of LINC structure fits Department Michigan’s unique proby the U.S. of Labor that broadow that all adults in Michigan can legally individuals 21 years of age or older UP, a Grand Rapids-based real estate develfile.” In a bill-signing statement last of small ened the ability use marijuana, employers are weighto possess, consume, transport or process limited oper. “It seems to be more of an ideological month, Snyder said businesses his previous toconjoin together ing how the new law — and misunderamounts of marijuana or marijuana concentrate. difference between some of the commiscerns were addressed and that state health to form association standings about it — could affect their Smoking marijuana remains illegal in all public places. sioners and the role of a quasi-government rules can still be stricter “when accomplans. workforces. “People get a little too excited,” VandenBerg agency in the real estate market.” panied by the appropriate explanation “We ended up pulltold MiBiz. “You’re not going to be arrested for it. As it stands, the current Land Bank and support.” ing that off the table after Proposal 1 to legalize recreational cannabis passed 56 percent to 44 percent on the November That is a huge, huge win. That doesn’t mean you has 12 months to handle its liabilities and Geer wasn’t the only surprised thatone result from the court,” Jason Reep, presiballot and went into effect Dec. 6, making Michigan can smoke in your apartment if your landlord isn’t fulfill its agreements before it concludes. that Snyder backed said the bill. dent for The Employers’ the only state in the Midwest where adults can allowing that.” What happens after the Land Bank ceases See FEDERAL on page 3 Reep STANDARD Association, based in See LAND BANK on page 2 legally consume marijuana at any time. See DRUG POLICIES on page 4 Grand Rapids. The Employers’ Association stands among a handful of organizations in Michigan that P E R I O D I C A L S had their plans scrapped by the federal court ruling. Reep still holds out hope for launching PAGE 18 an AHP if an appeal turns out successfully. That could occur if the Department of SERVING MICHIGAN BUSINESS SINCE 1988 www.mibiz.com LaborWESTERN prevails in appealing the ruling by U.S. District Court Judge John Bates of the District of Columbia. As well, Congress could enact

Grow Michigan plans second mezz fund JULY 8, 2019 • VOL. 31/NO. 19 • $3.00

3.2.2020

Cybersecurity Deep Dive: Outdoor Recreation Part 3 Real Estate Spotlight: Newaygo County

By SYDNEY SMITH | MiBiz ssmith@mibiz.com

Drinking Economy Real Estate Spotlight: Mason County

GRAND RAPIDS — The opportunity to lease brand new office space in the heart of downtown Grand Rapids offered Van Wyk Risk Solutions the chance to grow into a new location. This month, Van Wyk will be the first tenant to move into the new Warner Building, located at 150 Ottawa Ave. NW in downtown Grand Rapids. After outgrowing its space on Wealthy Street in East Grand Rapids, the insurance agency will occupy 17,500 square feet on the 10th floor of the Warner Building. Although the company viewed about 20 different potential office locations, the Warner Building came out on top because of its location, quality and amenities, and because it offered the firm the chance to move into new Class A office space, said Max Van Wyk, chairman and CEO of Van Wyk Risk Solutions. “When you’re starting from scratch in a space, I think it’s always easier and more convenient to have new space, because you can build it out the way you want it to be,” Van Wyk told MiBiz. “We needed to look at spaces where we could accommodate everyone in a central location and provide the amenities our employees deserve.” The vacancy rate for office space in the central business district and suburban market in Grand Rapids remained below 10 percent for the first time in 30 years, according to a report from the Grand Rapids office of Colliers International. The report highlighted the need for more new construction or renovations in older buildings, as companies continue to seek out amenity-rich offices to attract and retain their employees.

Contract Deadline: 4.15.2020

5.11.2020

Deep Dive: Immigration Contract Deadline: 4.29.2020

Business of Senior Care Contract Deadline: 3.4.2020

3.30.2020

See CLASS A OFFICE on page 9

5.26.2020

Transition/Succession Planning Real Estate Spotlight: Barry County

Education & Talent Development Deep Dive: Immigration Part 2 Real Estate Spotlight: Berrien County

4.13.2020

6.8.2020

Contract Deadline: 3.18.2020

Industry 4.0

Contract Deadline: 4.1.2020

Contract Deadline: 5.13.2020

Court ruling dashes plans for new AHPs

Amenity-rich Class A office space still in demand in GR, suburban markets

Contract Deadline: 2.19.2020

3.16.2020

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

‘FLIGHT TO QUALITY’

4.27.2020

BUSINESS AS USUAL?

WATERLOGGED WONDERLAND

Corporations re-examine their Unseasonably rainy weather coupled with near record-high shareholder Great Lakes water levels have left many West Michigan business commitment

owners hoping the region will PAGE 10 dry out in time to salvage the season for visitors and tourists. SEE PAGE 12 SEPTEMBER 3, 2019 • VOL. 31/NO. 23 • $3.00

STORY AND PHOTO BY MARLA MILLER

Lawmakers push economic case for ‘licenses for all’

Grand Rapids explores potential for Craft beverage producerssolar suepower MLCC,at allege 8 sites unconstitutional state laws, enforcement

See AHPs on page 7

By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com GRAND RAPIDS — Tensions between Michigan craft beverage producers and the state regulatory agency appear to be ratcheting up with the filing of a new federal lawsuit, MiBiz has learned. In the case filed last week in the U.S. District Court for the Western District of Michigan, Sawyer-based Greenbush Brewing Co., Hudsonvillebased Farmhaus Cider Co., the Michigan Cider Association and Grand Rapids-based Vander Mill LLC are suing the Michigan Liquor Control Commission. The parties allege the

New $20M PE firm to target rural Michigan companies

M&A remains active among West Michigan manufacturers

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West Michigan Deals SEE PAGES 11-21

agency’s enforcement actions and licenses, was in violation of state law Regardless of the federal question revisions stateBALASKOVITZ liquor code enacted regarding the state law, Greenbush By to ANDY | MiBiz over its bonded transfers of cider, last fallabalaskovitz@mibiz.com are unconstitutional, and that which it purchased from Vander Mill. owner Scott Sullivan said the comthe state laws are preempted by federal In the court documents, Greenbush pany met the requirements in the laws regarding production sale aresaid the enforcement division told the revised Michigan Liquor Control GRAND the RAPIDS — Cityand officials of alcohol, particularly which is at acompany it “was required to ferment Code that would allow it to particireviving plans forcider, a solar project classified as wine. pate in the bonded transfer of wine. former Grand Rapids landfill as theevery drop of wine that it sold,” seized Plaintiffs, who say their businesses Greenbush produces some of its own city sorts through broader questionsall of its cider inventory and told the are being financially harmed because wine and cider under the new definiBy JESSICA YOUNG | MiBiz about potential generation at sevencompany to stop using its small wineof the actions, also allegeproperties. the new law maker license, effectively barring the tions, thereby qualifying it under state jyoung@mibiz.com other city-owned is unconstitutionally law to be eligible for bonded transfers. The Grand vague, Rapidsleaving Office ofproducer from selling all cider and wine. beverage producers open to “arbitrary “This has happened to a number hen Grand Rapids-based Sustainability is leading an Energy The lawsuit challenges the constiand capricious” actions. of breweries before us, and for whatMulti-Automatic Tool and Advisory enforcement Committee that, amongtutionality of the seizure, which was Theother lawsuit stems is from the MLCC theeffected without a search warrant. The ever reason, no one has been willSupply Co. started searchtopics, considering enforcement division’s finding on June ing to stand up and take MLCC head ing for prospective acquisipotential for solar projects to helpstate currently is holding about $7,200 19 thatmeet Greenbush, which holds both in Greenbush’s property, according to on,” Sullivan told and MiBiz. “IfCulver, I thinkright, formed their own company to Cedar Run Decoy founders Corey Lucas, left, Boyd tions several years ago, the move came as a 100-percent renewable microbrewer and small winemaker SeeinLAWSUIT on pagePHOTO: 3 JESSICA YOUNG stores today. a reaction to many of the company’s cusenergy goal for city operations bycourt filings. produce traditional waterfowl gear not found tomers buying directly from small shops. 2025. Convinced that he needed to diverA study conducted by the U.S. sify his business in order to compete, Department of Energy’s National President James Byl went looking for Renewable Energy Laboratory opportunities, but it looked at eight sites — including took a few years for the Butterworth Landfill on the the pieces to fall into city’s southwest side — for potential place and find the solar installations. After faulty modright target. eling this summer produced results By JESSICA YOUNG | MiBiz “We hunt and we spend a lot of time out there “I began to look showing most projects would have jyoung@mibiz.com talking about how we can do things better and how three years ago, but the cost the PAGE 4 city over the 25-year life of some of the products we were using just weren’t companies that I saw the projects, officials are revisiting BATTLE CREEK — Cedar Run Decoy Co. LLC aims working for us,” Lucas said. “We wondered why at the time just didn’t the study, said Alison Waske Sutter, SEE PAGE 16 back to we couldn’t just simplify things, get back to the to provide hunters with new ways to get seem to be the right who leads the sustainability office. Byl the basics of waterfowling. basics.” fit,” Byl told MiBiz. “We anticipate the results will The startup grew out of the frustration owners As a result, the experienced hunters decided “Five, six, seven years ago, coming out of show it does make sense economiCorey Lucas and Boyd Culver experienced in tryto team up and build their own products, at first the recession, I think I needed a few years cally and financially for us to install ing to find traditional gear — think hand-carved for themselves and now for others hunting from to rebuild as well. Now, banks are willing to solar at some facilities,” Waske Sutter decoys common in their grandfathers’ generation the potholes of the prairies to the big waters of the lend and it seems like a good time.” told MiBiz. — amid the motorized cheap plastic products freGreat Lakes region. In July, Multi-Automatic, a minorityThe biggest of the eight is the quently stocked at most sporting goods shops. owned wholesale distributor of machine Butterworth Landfill site, which See CEDAR RUN DECOY on page 6 could potentially host a 15-megaSee M&A ACTIVITY on page 5 watt project, according to studies. The city pursued a 2.25 MW project there in 2016, but the plan was abandoned after the developer “disappeared” and stopped communicating, city officials said previously. $2 million, according to federal securities filings. The city hopes to issue a request Partners hope to incentivize developers to add ‘hundreds’ of units The group as of early July said in the filing that it for proposals by the end of the year had secured more than $1 million from investors. for a new project that would simiBy SYDNEY SMITH | MiBiz and securing local planning approvals from a The six investors in the fund include the larly be developed by a third party. ssmith@mibiz.com municipality, said Ryan Kilpatrick, executive direcCommunity Foundation, Holland-based finanFor at least some of the remaintor of Housing Next, an initiative focused on supcial/investment services firm Brooks Capital ing sites, however, Waske Sutter HOLLAND — A new fund aims to cover pre-develporting housing solutions in Ottawa County. Management LLC, the West Coast Chamber of anticipates the city building and opment costs to incentivize developers to add “Very often, the development community is Commerce, and members of the Padnos family owning the solar projects. affordable housing in the Holland and Zeeland going to build what they know is successful in a who own Holland-based Louis Padnos Iron and The federal study looked at areas, MiBiz has learned. market,” Kilpatrick told MiBiz. “It’s a risk and it Metal Co. Two other investors asked to remain seven city-owned sites: the Lake The goal for the Holland/Zeeland Housing Pretakes a lot of front-end work to convince a municanonymous. Michigan water filtration plant in Development Fund Inc. is to create projects that ipality that it’s the right project. Our goal would be The capital should be enough to accomplish the Ottawa County, the Market Avenue would make financial sense for a public or private to position a development appropriately for the mission of the fund, said Mike Goorhouse, presiretention basin, City Hall, the Grand developer to take on after pre-development work right group.” dent and CEO of the Community Foundation. The Rapids Police Department downis completed. Housing Next, the Community Foundation of investors are hoping to initiate “hundreds” of units town station, the Bridge Street Fire The pre-development work can include site the Holland/Zeeland Area and several investors across the targeted communities, he said. See SOLAR on page 3 control, environmental inspections, site planning helped organize the fund, which is targeting to raise See HOUSING FUND on page 15

Manufacturers prepare ahead for cyber threats

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Lending Report

New fund aims to spur affordable housing development in Holland

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Could better commuter transit aid talent attraction?

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Multifamily development SEE PAGE 12

Contract Deadline: 5.27.2020

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