MiBiz May 11, 2020 print edition by MiBiz

How should marketing change in the wake of COVID-19?

Aerospace suppliers brace for continued turbulence

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MAY 11, 2020 • VOL. 32/NO. 15 • $3.00

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Experts warn of possible mental health ‘aftershock’ from COVID-19

EXPLORING WHAT’S NEXT Experts preview workplace changes as economy slowly re-emerges

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

f the SARS outbreak 17 years ago in Asia is an accurate indicator, behavioral health care providers could see a patient surge in the coming weeks and months as the COVID-19 pandemic takes an emotional toll on people. One-third of the people in Asia were unable to return to work full time after the SARS pandemic, six in 10 experienced fatigue, and half had difficulty sleeping. In Hong Kong, the suicide rate spiked nearly 32 percent for two years after SARS. Hong Kong also experienced “increases in persistent depression, anxiety, panic attacks, psychomotor agitation, psychotic symptoms, delirium, and suicidality,” according to a white paper from Pine Rest Christian Mental Health Services on the potential mental health effects Eastburg of the COVID-19 pandemic. The white report pulls data from a number of sources to issue a call to action for care providers to prepare for the “aftershocks” from the pandemic and “minimize the fallout of COVID-19 on mental health in our communities.” “ Th e w a r ni ng si g ns are there right now that we could in Michigan experience a significant surge in behavioral health needs that emerge out of this COVID crisis,” Pine Rest CEO Mark Eastburg told MiBiz. “We ought to be prepared as a state and a community for that in case that happens.” T he s t r e s s, a n x iet y a nd depression the pandemic triggers can come from the loss of a job or income, grief, and uncertainty about the future. At Pine Rest, “we’re experiencing a rise in many of the stressors that are known to increase risk for suicide,” Eastburg said. See MENTAL HEALTH on page 6

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By MARK SANCHEZ | MiBiz msanchez@mibiz.com

COPING WITH COVID-19 Small businesses around West Michigan have been affected in many ways by the ongoing pandemic. While some are seeing increased business, most companies are being forced to deal with the fallout by getting creative, managing cash and finding new ways to stay engaged with customers and clients. In this Coping with COVID-19 special report, MiBiz speaks with two dozen West Michigan companies to hear how they’re navigating the current uncharted waters. SEE PAGES 12-19

eople who have been working from home for weeks because of the COVID-19 pandemic will return to a decidedly different workplace than they had previously once the economy gets going again. Changes will span a range of workplace environments, including offices, shop floors, breakrooms and conference rooms. Wearing face masks and having more distance between workers will become the norm, along with routine temperature checks and continually cleaning and sanitizing the workplace, tools, equipment and workstations. Those and other practices are all part of the proverbial “new normal” for employers working to navigate the deadly pandemic that has disrupted daily routines, thrown the economy into recession and may linger for many months until a Kennedy vaccine is developed. “As business leaders, you have to make sure you’re taking the responsibility for your employees,” Kentwood-based Autocam Medical Devices LLC CEO John Kennedy said during a recent back-to-work webinar hosted by Advantage Benefits Group Inc. “It’s incumbent on us as businesses to make sure See WHAT’S NEXT on page 8

COVID-19 highlights structural changes needed for unemployment system, researchers say By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

s some employers express concern about retaining workers who are earning more income through unemployment benefits than their normal paychecks, researchers say long-term structural fixes are needed to state and federal programs. The $2.2 trillion CARES Act passed in late March included provisions to add $600 in weekly unemployment

benefits for people active in their state’s system. In Michigan, this means workers unemployed as a result of the pandemic could receive up to $962 a week. The federal benefits are available for up to 39 weeks, while state benefits were expanded to more workers and extended for 26 weeks. Media reports have shown concern among employers who pay less than the amount of benefits workers are receiving. In at least one case in Washington state, a company that received a Paycheck Protection

Construction industry adapts to new safety protocols PAGE 11

Program loan — which requires 75 percent of the loan to be used for payroll in order to be forgiven — faced backlash from employees, since Presta the loan effectively means workers would be paid their typical wages. Kelly Presta, vice president at Sturgis Molded Products Co., shared these concerns during an April 22 conference

call hosted by the West Michigan Policy Forum. As of early May, Sturgis Molded Products was running at about 10 percent capacity involving transportation and medical devices. The company has about 200 employees. “I’ve called people and there has been communication that said, ‘I make more by not coming in,’” Presta told MiBiz. “That’s out there.” Sturgis Molded Products’ operators and first-line positions make less than the maximum amount See UNEMPLOYMENT on page 5

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How COVID-19 has Challenged Digital Transformation Business as usual is anything but these days given the unprecedented challenges created by the COVID-19 crisis. Nonetheless, a number of technologies are enabling businesses to continue operating — even if it means working differently. The cloud is one of them. TELEMEDICINE AND ADVANCED ANALYTICS Right now, staying healthy is at the forefront of our minds. Yet strained healthcare resources and social distancing measures are preventing people from having physical consultations with doctors or therapists. This has made cloud-based telemedicine and teletherapy crucial for providers and patients. To underscore this point, during one week in April, a Midwest mental health service provider conducted almost 1,000 outpatient telemedicine visits per day. That’s more than a twenty-fold increase from the previous week. US Signal’s connectivity and this customer’s cloud-based EMR platform have allowed them to coordinate and provide this much-needed remote support and care during the pandemic. We’ve also been able to help other healthcare sector clients keep up and running by implementing cloud-based business continuity and disaster recovery solutions. THE ROLE OF CLOUD AND NETWORK CONNECTIVITY IN TODAY’S BUSINESS Applications running in the cloud are enabling the collaboration and conferencing tools pressed into urgent COVID-19 duty by companies that have suddenly found themselves with almost entirely remote workforces. US Signal’s rapid bandwidth upgrades for clients ensures employees can work remotely, communicate effectively, and maintain the same efficiency levels. We have recently had clients praise the pace with which we were able to rollout remote networking capabilities due to the network architecture that we supply. We’ve all witnessed the robustness of streaming and shopping platforms such as Netflix and eBay. They demonstrate the importance of having access to a network infrastructure with the ability to scale securely and handle extraordinary usage levels without latency. US Signal’s switched and routed services do just that—enabling our customers to quickly and safely deliver traffic to where they need it. We have a robust, secure fiber network spanning over 14,000 miles across 10 states. If you’re delivering large amounts of content but want to avoid latency, it also helps to select a data center provider with facilities that are close to your users. Perhaps that’s why our 2020 State of Data Center Offerings survey found 91 percent of respondents were likely to select a data center provider based on that criteria. ADJUSTING TO CHANGING MARKETS The cloud offers a solution to businesses that are dealing with huge swings in demand or trying to cope with supply chain disruptions. We've all seen headlines about the plight of global airlines and large manufacturers, but small businesses are

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particularly vulnerable to the economic downturn brought about by COVID-19. JP Morgan Chase's research suggests 50 percent of small businesses are currently operating with fewer than 15 days in buffer cash. With other factors including a smaller supplier base (for manufacturers) and a significant drop in global demand (for example, in hospitality and tourism), OECD data suggests COVID-19 will impact SMEs even more than the 2008 financial crisis. Businesses of all sizes are using cloud-based analytics software to support current future planning to cope with changes in demand or supply chain disruption. But they need to check that their cloud service provider has the necessary network connectivity and plenty of redundant architecture for maximum response and uptime, even at times of peak demand. US Signal’s Enterprise Cloud services are always up, always available, and always secure. That’s because we exclusively own and operate our carrier-grade network, which is designed with redundant architecture for maximum network speed and security. It’s also worth investigating if your cloud service provider can deliver additional optimizing website performance tools such as image compression, network prioritization, edge caching, route, and optimization. MORE CLOUD USAGE MEANS MORE POTENTIAL CRIME The increase in cybercrime is one of the few downsides to a heavy reliance on the cloud—and no one is immune to the threat. In mid-April, San Francisco International Airport disclosed that it had suffered a double website hack that may have allowed attackers to harvest employee and visitor Windows login credentials. This reminds us that security teams must adjust their threat detection to combat the recent rise in cyberattacks. Maintaining fully up-to-date antivirus software, a secure firewall, and deploying continuous automated network monitoring are good places to start. Each is vital for managing and mitigating security issues before they become significant problems. But it’s also essential to educate employees on how to spot emails that could contain ransomware. Simple things such as not opening emails from people you don’t know—even if they look like they’ve come from someone in the same company—and hovering over links in emails to check they’re genuine before clicking on them are highly effective in reducing the chances of getting stung. At US Signal, we can help you with these challenges, as we have security built into the heart of our network and operations. Our managed security services include website and application security, protection against content scraping, SQL injection attacks, and all forms of DDoS attacks. And it doesn't matter whether your websites and applications are hosted

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on-premise, in colocation, or on cloud-hosted servers—we’ve got your back. PROTECT YOUR DATA Your data center provider should incorporate current security protocols and technologies to ensure compliance with data protection directives such as PCI-DSS, HIPAA, CCPA, and GDPR. Businesses risk prosecutions and fines if they fail to protect customer data. And cybercriminals seek to exploit those fears with the threat of obtaining sensitive data and releasing it into the public domain. Businesses should also consider the geodiversity offered by their data center provider. US Signal’s 8 data centers are strategically located throughout America’s heartland, which is considered one of the country’s safest geographical regions due to the lack of natural disasters and strong network connectivity. Most of our facilities are at least 200 miles apart and run on separate power grids to minimize the impact of natural disasters. ACT NOW—DON’T WAIT FOR A COVID-FREE WORLD Don’t wait until the COVID-19 crisis is over before reviewing how effectively your cloud architecture can scale and how much protection it affords you from cybersecurity threats. The current climate allows for accelerated growth if you can ensure to meet your customers’ needs effectively. This pandemic has pushed the fast-forward button on the plans that many organizations had for their digital transformation. It has caused them to adapt to the new business environment faster and in ways that many CIOs would not have believed. For that reason, it’s vital to ensure your cloud and network provider has the financial security to weather the storm—and can offer highly available, secure solutions to meet your needs. US Signal was founded in 2001, and today we're the largest debt-free, privatelyheld data center services provider in the Midwest. That means, if you’re with us, you’re in safe, experienced hands.

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West Michigan manufacturers reopen with heightened awareness of risk management

Publisher Brian Edwards / bedwards@mibiz.com Associate Publisher Denise Montambo / denise@mibiz.com

By JESSICA YOUNG | MiBiz jyoung@mibiz

anufacturers are contending with the risk COVID-19 still poses to their workforces. In accordance with Gov. Gretchen Whitmer’s new executive order greenlighting the sector to “open in phases” beginning this week, manufacturers in the state will be required to implement enhanced safety strategies to prevent further spread of the deadly virus. “If you’re one of the people who is going back to work, we need you to be scrupulous about best practices both inside the workplace and outside so neither you, nor your family, nor your coworkers get sick,” Whitmer said at a press conference on May 7. Expanding workforce safety is the top concern at Holland-based metal fabricator Agritek Industries Inc., said company president Larry Kooiker. Under the state’s stay-at-home executive order, the company continued small-scale operations as an essential business, but restoring normal functions with returning workers will still prove complicated. “We’re probably going to have to do a better job of social distancing and taking people’s temperatures,” Kooiker told MiBiz before Whitmer’s announcement. “The workers that were left here have all worked here for a decade or more. This is our core, very trustworthy, very responsible bunch. As we bring people back, we have a little bit more of a worry, because then you start getting … employees that you don’t know as well and it’s a little harder to keep it under control. We will have to tighten up our measures.” Manufacturers that are restarting some or all of their operations this week are entering “a brave new world,” said John Walsh, president of the Michigan Manufacturers Association. In addition to guidelines from the state, Centers for Disease Control and Walsh Prevention and Occupational Safety and Health Administration (OSHA), manufacturers are preparing for restarts armed with best practices from essential businesses that remained open during the shutdown and also those that have already reopened in other heavily industrialized areas.

Operating safely Manufacturing accounts for about 19 percent of Michigan’s economy; only about 5 percent of manufacturers in the state remained open throughout the shutdown to provide essential goods and services, according to Whitmer. “The fact that we did have some manufacturers continue to operate because they were essential businesses proved that you can operate safely and productively,” Walsh told MiBiz. “We’ve learned a lot, not just here but worldwide. Some of our larger worldwide corporations have provided a great deal of instruction and education throughout the industry.” Manufacturers are already familiar with mitigating workplace hazards for the safety of their employees. That experience will come into play while identifying and implementing the new safety procedures, which are surprisingly straightforward, according to Walsh. “I took a deep dive into CDC, World Health Organization and OSHA regulations and they’re all remarkably similar and clear,” he said. “Sometimes regulatory agencies can go on at great length and you can’t understand them, but in this case, the existing regulations are rather clear.” Manufacturers are required by the state to conduct pre-work screenings, implement Visit www.mibiz.com

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Editor Joe Boomgaard / jboomgaard@mibiz.com Managing Editor Andy Balaskovitz / abalaskovitz@mibiz.com (energy, policy) Senior Writer Mark Sanchez / msanchez@mibiz.com (finance, health care, life sciences) Staff Writer Jessica Young / jyoung@mibiz.com (manufacturing, agribusiness, nonprofits) Contributing Reporters Jayson Bussa, Marla Miller, Jane Simons, Rich Tupica Copy Editor Claire Boomgaard VP of Production & Audience Development Kristi Kortman / kkortman@mibiz.com

Michigan manufacturers can return to work on May 1l as long as they adhere to enhanced safety measures intended to prevent the spread of the coronavirus. COURTESY PHOTO dedicated entry points, require masks or face shields where social distancing is not possible and train workers on the transmission of COVID19 and use of personal protective equipment. Companies also will have to support employees requesting to stay home in the event of a family crisis caused by COVID-19, diagnosis or exposure to the virus. In accordance with a previous executive order, employers are prohibited from punishing employees for staying home because they are sick or think that they may have been exposed to the virus. “Follow these (new safety processes) up with well-communicated company policies that encourage employees who don’t feel well to call in, to stay home, to understand that their job is not at risk and that health is first,” Walsh said. In addition to state-mandated safety practices, many West Michigan manufacturers are responding to the crisis by creating “infectious disease management teams” with both management and nonmanagement staff to establish ready-to-go response plans, according to Walsh.

that are “not laid out in a way that keeps people away from each other” may have flare-ups of the virus that cause employees to feel unsafe at work, according to Jackson. “Short term, they have to take a look at where they need barriers to limit handoffs and stagger employees and design their shop floor so that they can get the same productivity out of their shop with all of the precautions in place,” he said. “That’s a big deal because, on day one, it’s going to be a lot of new ways of working, productivity is going to drop and that’s going to hurt them as well.”

“Businesses need to be responsible for maintaining safe work practices going forward so that if this virus flares up again or the next one comes, we can manage the economic impact.”

Stay vigilant

Manufacturers also have to be prepared for more public outbreaks of the virus and for many of the changes to plant floors and workflows to remain in place for months. “Businesses need to be responsible for maintaining safe work practices going forward so that if this virus flares up again or the next one comes, we can manage the economic impact,” Jackson said. “If you don’t take this into consideration and you think this is temporary and just go Bearing back to the way it was, you’re — JEFF JACKSON responsibility just setting yourself up for failManaging director at BlueWater Businesses have the responure again.” Partners sibility to demonstrate they Still, Agritek’s Kookier said have taken actions to prehe is skeptical that the strinvent the spread of the virus, gent new safety protocols will according to Jeff Jackson, managing director at stick around in his factory forever. Grand Rapids-based BlueWater Partners LLC. “I would say these changes are medium Manufacturing companies that BlueWater term,” he said. “I can’t picture a guy two years Partners works with are adjusting workflows from now running around with a mask and not on the production floor “so their hourly workshaking hands. Slowly, our culture will return ers can be safe,” Jackson said. That will result in once we get a vaccine and people lose the fear a loss of productivity, although manufacturers — just like people used to be so scared to borthat have not done so already can offset that by row money because they got burned so bad in implementing lean production practices while 2008 by being heavily leveraged. It only took still “using their space in a more safe fashion,” about two or three years to get back into leverhe said. aging.” Manufacturers that have been shut down MiBiz Senior Reporter Mark Sanchez contribduring the pandemic will return to an environuted to this report. ment where volume is down, and shop floors

Senior Advertising Consultant Shelly Keel / skeel@mibiz.com Digital Specialist/Ad Traffic Coordinator Danielle Affholter graphics@mibiz.com

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MANUFACTURING

HOME, FOR NOW Office furniture industry stays vigilant as nation joins ‘huge experiment’ in remote working By JESSICA YOUNG | MiBiz jyoung@mibiz.com

he COVID-19 global pandemic has pushed millions of Americans to work from their home offices, or in lieu of a dedicated workspace, their dining room tables and couches. Social distancing rules and guidelines have quickly shifted most everyday activities to within the four walls of people’s private homes and forced changes in health care, learning and even happy hour — all of which have swiftly transitioned to meeting by smartphone or computer. The crisis and businesses’ responses to it also could impose permanent changes in both commercial real Keene estate needs and the office furniture industry. “The COVID-19 pandemic has changed the ways and places people work,” Katie Woodruff, global corporate communications manager of Steelcase Inc., said in an email to MiBiz. “It’s too early to know what longIsely term implications this will have on corporate real estate strategies — as remote work (and) working from home isn’t a new concept.” A post-coronavirus commercial office may look very different. Employees may now feel safer with more dividers and space between workstations instead of the Long open floor plans that have gained favor in recent years. “It’s reasonable to assume that business leaders will want to reassure their employees they’re

offering a safe place to work,” Woodruff said. “This could bring a short-term return to some of the facilities management practices businesses implemented before their offices were closed — frequent cleaning, worker protocols, offering more space between workers (and) additional privacy options.” Through its operations in China, Steelcase has some familiarity with how factories and offices could function after people begin emerging from their homes, according to company CEO Jim Keene. “It is important to note that it’s not coming back to the way it was before, not exactly,” Keene told brokerage analysts in a late-March conference call to discuss Steelcase’s quarterly financial results. “As people come back, they’re far more aware of infection control, they’re far more aware of social distancing protocols. There’s not a lot of gatherings of people. They’re doing things on an ongoing basis that we’re all still just getting used to here in the U.S. and in Western Europe.” Around the world, dense offices that have little separation between people will have to adjust along with “products and solutions that have maximized density,” according to Keene. However, in places where the outbreak has stabilized enough that the health care system has been able to respond and manage the virus on an ongoing basis and stay-at-home orders have been lifted, people are “glad to be able to connect together” again, he added. The changes in office culture and design that workers will face are accelerations of trends that existed long before the current crisis, said Mike Dunlap, principal of Michael A. Dunlap & Associates LLC, a Holland-based office furniture industry consulting firm. The number of people “working away from a traditional office at coworking spaces or an alternative office has been going up for probably 20 years,” Dunlap said. “I think people like the flexibility, even if they do it just part-time.” Working from home has been gaining momentum in parallel with the technology to accommodate telecommuters. It’s likely that

Office furniture manufacturers might need to adjust their product strategy to meet the safety needs of office workers given the lessons learned during the COVID-19 pandemic. COURTESY PHOTO some if not many of the people who are now working from home will continue to do so into the future, according to Paul Isely, associate dean and a professor of economics at the Grand Valley State University Seidman College of Business. “I think it’s going to create jobs that we didn’t think could be at home,” Isely told MiBiz. While 11 percent of the U.S. workforce had been laid off or furloughed by the beginning of April, 34 percent of Americans who previously commuted were working from home, according to a recent report from the Massachusetts Institute of Technology. “We know that this is a huge experiment for a lot of companies right now,” Isely said. “They’re being able to test techniques and ways to keep their teams together and they’ve never had a reason to do it at this scale. As they test that stuff and as we start to have the feedback on what’s working and what’s not working, that’s when we really will start to understand its true effect on everything else.” The longer people are required to work at home, the greater the adoption of working remotely will be when the dust settles, according to a study from Global Workplace Analytics. The research firm estimates that 25-30 percent of the workforce will be “working at home on a multiple-days-a-week basis” by the end of 2021. Prior to the pandemic, only about 4 percent of the U.S. workforce was working from home at least half the time, according to the data.

Office shifts In addition to generating the need for upgraded technologies like video conferencing software and widespread access to high-speed internet, the shift to home offices also will significantly

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affect West Michigan’s office furniture industry, according to Isely. As an example, he noted that members of his team have requested permission to bring the furniture from their on-campus offices to their homes. “They want to go and get their office chair because they don’t have anything at home that is like that and their back is hurting or they’re having other problems because they don’t have the right ergonomic stuff,” he said. The immense economic fallout of the pandemic and the ensuing recession will drive many employers to cut costs, according to Brian Long, director of supply chain management research at GVSU’s Seidman College of Business. Companies could find an easy solution to reducing some of their financial obligations by downsizing office space and letting employees continue to work from home. “Maybe there are some initial costs of helping people get a home office setup, but in the long run, the cost of having more people work from home would be less for the company,” Long said. A typical company saves about $11,000 per half-time telecommuting employee per year, according to the Global Workplace Analytics report. Increases in the home office market are going to be a major adjustment for West Michigan office furniture companies that are reliant on clients that buy quantities of product to fill largescale commercial spaces. West Michigan-based manufacturers dominate the office furniture market and more than 16,000 people in West Michigan work in the industry, according to The Right Place Inc. It could be difficult for West Michigan’s “Big Three” — Steelcase, Holland-based Haworth Inc. and Zeeland-based Herman Miller Inc. — and their dealer networks to shift to smallerscale clients or one-off home office sales, according to Long. “The problem that I have with our furniture companies in Grand Rapids right now is they’re too much geared toward the corporate market,” Long said. “They need to develop some really neat modules and start marketing them to the home office market because too much of that market right now is going to IKEA and other places like that.” Still, West Michigan manufacturers — which have been manufacturing furniture in the region since the 1800s — have a long history of adaptability and innovation. “The furniture industry has always changed in Grand Rapids,” Long said. When the production of wood furniture moved from West Michigan to North Carolina in the mid-1900s, Steelcase gained “huge government contracts for filing cabinets” during World War II, Long added. Similar pivots will be necessary when people emerge from their homes and into a post-coronavirus business environment. The businesses that can’t evolve may be left behind, he said. “There are people who want to do exactly what they’ve been doing in the past and there are very few businesses that can even operate that way,” Long said. “What you did and were successful with today is not what you may be successful with tomorrow.” Visit www.mibiz.com

UNEMPLOYMENT Continued from page 1

Boeing’s plans to slow production and cut its workforce will likely ripple through the supply chain, including aerospace manufacturers in West Michigan. COURTESY PHOTO

Michigan aerospace suppliers brace for continued industry turbulence By JESSICA YOUNG | MiBiz jyoung@mibiz.com

he aerospace industry is facing unparalleled disruption and uncertainty emerging from the continued grounding of Boeing’s 737 Max and the COVID-19 pandemic. Some Michigan manufacturing companies that have grown their operations in the aerospace supply chain over the past decade will not survive this crisis, according to Tony Vernaci, president of the Rochester-based Aerospace Industry Association of Michigan (AIAM). “There are going to be some companies that won’t be able to weather the storm,” Vernaci told MiBiz. “They’re going to wind up probably closing their doors.” The health and economic Vernaci effects of the coronavirus outbreak are expected to linger, and air travel will not recover from the damage that has already been done for years to come, according to executives at the industry’s biggest manufacturers. Last month, after reporting that revenue dropped by 26 percent in the first quarter of 2020, Boeing Co. CEO Dave Calhoun told shareholders the negative effects of the coronavirus pandemic are likely to affect the company through at least 2023. Next month, in the first wave of “several thousand” job cuts, the company is permanently slashing about 16,000 employees. Production of commercial aircraft will slow, including the troubled 737 Max, the 787, the 777 and the 777x. Calhoun said suppliers that had been gearing up to expedite production after the 737 Max eventually receives clearance to return to service will now face even greater challenges. “The plans they have made and the investments they have made around the future, not dissimilar to ourselves, they now have to tear up and start over and resize themselves to accommodate that new future,” Calhoun said. Airlines are also reporting breathtaking freefalls. Globally, airlines are forecast to lose $314 billion this year, according to the International Air Transport Association. In the U.S. alone, passenger traffic is down 95 percent and 2,800 planes are grounded, Calhoun said. Moreover, airlines are slowing down or stopping payments, deferring airplane orders and postponing delivery of completed orders from Boeing. Deliveries dropped 66 percent in the company’s first quarter. The drastic job cuts at Boeing are likely to spur thousands of local layoffs. In a letter to employees, GE Aviation President and CEO David Joyce laid out a plan for a 25 percent permanent reduction to the company’s global employee base of about 52,000 people. Information about local cuts is not yet available, according to Jennifer Villarreal, GE Aviation’s communications and media relations leader based in Grand Rapids. GE Aviation employs about 1,000 people in West Michigan. It’s difficult to overstate the effect even small disruptions at Boeing or European competitor Airbus can have when they ripple down to local manufacturing suppliers in the sector, AIAM’s Vernaci said. The organization Visit www.mibiz.com

is already in talks with some “overwhelmed” and “exhausted” members. “Our job is to try to help these companies understand that there could be other options before filing bankruptcy or closing their doors, so don’t give up yet,” Vernaci said. He predicts the shuttering of local aerospace companies to start this year and bleed into 2021. “I don’t think it’s going to be a landslide or a freefall of companies going under, but some of the companies that were undercapitalized or with poor cash flow and just leveraged very highly, they’re going to have a tough time,” he said. In the wake of inevitable exits in the sector over the coming years, Vernaci said he will work to keep the state’s aerospace supply chain as intact as possible. “If a company isn’t able to hang on and survive the storm, that’s business for other people to pick up,” he said. “There will be opportunity for some, which is unfortunately at the price of the misfortune of others.” Opportunities for aerospace suppliers may also lie in cuts to internal manufacturing programs at Boeing. “These companies were having a tendency to try to bring more of the things they were doing in the supply base back in-house,” Vernaci said. “That’s going to change now because to bring it in-house, that means more complexity and pieces for them to manage.” As manufacturers across all industries learned from the Great Recession, diversification can aid survival in a turbulent economy. Several aerospace manufacturers in West Michigan also supply the medical device, automotive and defense industries. “The aerospace industry got so big in Michigan because suppliers got tired of the automotive rollercoaster and said, ‘OK, we’ve got to saddle something else up because we have all of our eggs in automobiles and it’s feast or famine,’” Veranci said. “That made a lot of companies become a lot smarter about who and what they do business with.” Although the automotive industry doesn’t seem to be a beacon of opportunity this year — vehicle production and auto sales are forecast to plummet in 2020 — medical device production might increase because of the ongoing health crisis. Meanwhile, defense manufacturing remains at least relatively stable. Military and defense contracts helped offset losses related to commercial airline production at GE Aviation, according to Chairman and CEO Larry Culp. “The rapid contraction of air travel has resulted in a significant reduction in demand as commercial airlines suspend routes and ground large percentages of their fleets,” he said during the company’s first-quarter earnings call. “On the other end of the spectrum, demand for our military business remains strong. To that end, we rebalanced some of our capacity to meet this increased demand.” Under the Trump administration, the federal government is still “pumping more into their defense spending,” according to Vernaci. In fact, some local defense manufacturers have seen an uptick in orders recently, he added. “That’s a good thing and I think time will tell how much the government can keep piling up more and more debt and putting out more stimulus and spending more,” he said. “But there’s opportunity in everything if you choose to look for it.”

of benefits, Presta said, while technical positions make more. Meanwhile, the company is looking into starting a worksharing program, which would allow more workers to come back at reduced hours while still qualifying for federal and some state benefits. She added that “it’ll be an interesting dynamic” once auto manufacturing ramps back up and more employees are called back. Presta’s concerns were for employees who are able to come back but choose not to, as opposed to employees who may be affected by COVID19 or who are caring for others. If able employees choose not to come back, she added, “We can clearly deny unemployment at that point.” John Austin, director of the Ann Arbor-based Michigan Economic Center and a nonresident senior fellow at the Brookings Institution, expressed surprise that employers were having these concerns. “I think that’s a perverse concern,” he said. “Most every worker would rather be working on getting paid for showing up than this very modest safety net that we have really turned on for most workers in this crisis.”

UI underfunding Presta says a better policy move would have been for the federal government to cover up to 100 percent of an employee’s pay instead of a flat $600-a-week allotment. But the chronic underfunding of state unemployment systems meant inadequate technology Houseman prevented such a tailored option, said Susan Houseman, vice president and director of research at the W.E. Upjohn Institute for Employment Research in Kalamazoo. “It was a policy choice, and there was not a good one in the situation,” Houseman said of the $600 in weekly federal benefits. “Most unemployment insurance agencies around the country have inadequately funded the administration for many years. It’s completely antiquated. They just weren’t nimble enough to change formulas to calculate something that would be like a wage replacement. “It underscores the need to update the administration of our unemployment insurance agencies around the country.” The U.S. Department of the Treasury indicated recently that employers who got funding from the Paycheck Protection Program would not lose loan forgiveness if a laid-off employee opts to continue getting unemployment and declines to return to work. An interim final rule from Treasury “will specify that, to qualify for this exception, the borrower must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower,” according to the recent guidance. “This is one of those instances where there’s more to come,” said U.S. Small Business Administration Great Lakes Regional Director Rob Scott. “There are going to be situations where you offer an employee their job back and they don’t want to come back. We do not want to hurt that small business

“We should all be questioning a system that pays people to stay home until their job comes back. The likelihood is a lot of those jobs aren’t coming back. We need a system that helps you identify your skills for jobs that will be coming back.” — JOHN AUSTIN Director of the Michigan Economic Center

owner who got this forgivable loan and put them in a situation where they’re not successful.”

‘Broken system’ Other researchers say the coronavirus pandemic has exposed fundamental flaws in the federal and statewide unemployment programs. An April 30 policy paper by Stephen Wandner released through the Upjohn Institute declared that unemployment insurance is a “broken system and should be rethought.” Taxes and benefits are out of balance, while re-employment services are inadequate, he argues. The paper outlines legislative fixes — such as indexing benefits to the cost of living, standardizing rates across states and bolstering programs that help workers find new jobs — and administrative options, such as bringing more uniformity under a federal program. “We need a system that encourages retraining and mobility, allowing you to move from job to job,” Austin said. “There are no career ladders anymore.” With hundreds of thousands of Michigan residents losing employer-sponsored health insurance during COVID-19 layoffs, Austin says pension and health care benefits should be more portable and travel with the worker. This also would benefit workers not eligible for unemployment benefits pre-coronavirus, such as independent contractors and gig economy workers. As well, automation is underscoring the need for unemployment benefits to include job training, he said. “We should all be questioning a system that pays people to stay home until their job comes back. The likelihood is a lot of those jobs aren’t coming back,” Austin said. “We need a system that helps you identify your skills for jobs that will be coming back.” Meanwhile, COVID-19 is poised to deplete Michigan’s reserves that pay out benefits. As of April 30, more than 1.2 million people in Michigan had filed jobless claims, or about 25 percent. Upjohn Institute Senior Economist Christopher O’Leary expects Michigan to pay out $9.2 billion in state unemployment benefits for the year starting March 21. It started 2020 with $4.6 billion in unemployment reserves. “I anticipate Michigan will need to borrow about $3.4 billion later this year to meet its obligations,” O’Leary wrote on May 6. MiBiz Senior Reporter Mark Sanchez contributed to this story. MiBiz / MAY 11, 2020

HEALTH BIZ

Continued from page 1

Stretched thin As well, Michigan entered the COVID-19 crisis with existing problems related to the accessibility of mental health care. A 2019 study conducted by Ann Arborbased Altarum, commissioned and funded by the Michigan Health Endowment Fund, cited a serious shortage of psychiatrists and other mental health care providers in the state. Altarum detailed how 650,000 people in Michigan with a mental illness and more than 500,000 with a substance use disorder fail to receive any treatment. “We’re already stretched thin as a state in behavioral health and this is going to stretch

us even more,” Eastburg said. “We really need to step up right now.” Pine Rest’s intent with the white paper was “to get us as a state to begin thinking about and get our creative clinical and policy minds working on this question: How do we improve access to behavioral health if we do see a surge?” Eastburg said. Among the suggestions is “improv ing access to mental health care through awareness, affordability, and technology” such as telehealth platforms. “We in Michigan need to continue to scale up teletherapy and telepsychiatry, let Michiganders and gatekeepers know the availability of these care options and how to find them, and keep in place financial incentives such as waivers for co-pays for these services,” according to the white paper. Ac t ion on ex pa nd i ng telehe a lt h i n

behavioral health c a re ha s be en moving forward on a number of f ronts. Ma ny mental health care providers have transitioned to telehealth platforms to connect with patients during the COVID-19 pandemic and state-issued stay-at-home orders. Early on, therapists at Pine Rest adapted to conducting outpatient sessions through a telehealth platform. Prior to the pandemic, Pine Rest therapists held about 100 telehealth sessions a week. They are now conducting about 6,000 weekly sessions, Eastburg said. Patients have adapted well to the change, according to Eastburg. “Some of the patients we’re seeing initially were a little skeptical, but as they get used to it a little bit, people have accepted it and they’re

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MENTAL HEALTH

returning for follow-up visits. It seemed to work well,” he said. “We’re been pleasantly surprised that people have really adopted it because it’s a great tool in this crisis.”

More access In April, the Michigan Health Endowment awarded nearly $3 million in grants to 60 organizations statewide to expand telehealth services. The funding will help the organizations to implement telemedicine procedures, set up billing, train or add staff, educate patients, and acquire licenses and equipment needed to comply with federal privacy requirements. Grand Rapids-based Hope Network was among 15 West Michigan care providers to receive funding from the endowment to offer more telehealth services. Hope Network used the $50,000 to quickly expand and ramp up telehealth for multiple services, including substance abuse treatment, CEO Phil Weaver told MiBiz. “I really believe that this will be the turning point in using telehealth more strategically than what has been available before,” Weaver said. Hope Network serves more than 1,000 clients weekly through an array of programs. Many of its clients previously served in face-toface meetings are now using telehealth, Weaver said. So far, Hope Network has seen a small increase in inquiries from people who are having issues that “may not be a serious mental health condition, but it’s serious enough to them that they make a call to Weaver somebody,” Weaver said. He’s concerned about what may occur in the summer and fall. Higher incidences rates of substance abuse and post-traumatic stress disorder are among the problems that Weaver expects. Care providers will need to partner even more to respond, he said. “I think six months from today we’re going to see a massive uptick in both substance abuse and other mental health conditions,” he said. “There’s going to be post-traumatic stress coming out of this pandemic. All of our jobs in the community that are in health care is to try to figure out, ‘OK, how do we start to be proactive in addressing that together?’ “It’s going to change how we think and do business. I am hopeful that we take this opportunity to make those changes and improve health care for our community.”

Changing status quo

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MAY 11, 2020 / MiBiz

The greater use of telehealth services, albeit mandated by the stay-at-home order, is one example of change that’s already occurring to improve access. That’s illustrated by the Michigan Health Endowment grants to Hope Network and others, plus action by Blue Cross Blue Shield of Michigan. The state’s largest health insurer has begun to develop telehealth programs with care providers to allow certain patients with substance abuse disorder to detoxify and undergo treatment at home. Through the effort, Blue Cross Blue Shield of Michigan’s program “meets people where they live” and can bring their families more into their treatment, said Dr. William Beecroft, medical director for behavioral health at Blue Cross Blue Shield. “We may find this approach could change the status quo for substance use disorder treatment in the future,” Beecroft said. As well, 18 community mental health organizations across Michigan were recently chosen to receive federal grants totaling $54.4 million to expand services to people with mental illnesses or substance use disorders, according Visit www.mibiz.com

FINANCE COVID-19 TAKES TOLL ON MENTAL HEALTH In a tracking poll conducted in late April by the Kaiser Family Foundation, 56 percent of respondents said stress or worry related to the COVID-19 pandemic had affected their mental health or well-being. Here’s a look at some of the findings of what people have experienced: Trouble falling or staying asleep, or sleeping too much

40%

Poor appetite or overeating

33%

Frequent headaches or stomach aches

18%

Difficulty controlling temper

15%

Increased alcohol or drug use

13%

Worsening chronic conditions like diabetes or high blood pressure

to a recent announcement from U.S. Sen. Debbie Stabenow, D-Michigan. In Kent County, community mental health agency Network 180 received nearly $2 million. Network 180 plans to partner with Cherry Health to provide primary care and telehealth for Suboxone treatment. The organization also will work with Arbor Circle, Hope Network, InterAct and Pine Rest for case management, treatment, psychiatric rehabilitation, social support services and recovery. T he federa l f u nd i ng for t he Cer t i f ied Community Behavioral Health Clinic “allows us to serve anyone in need of mental health or substance use disorder services regardless of ability to pay or insurance type,” Network 180 COO Beverly Ryskamp said in a statement on the agency’s website. “Before the grant we were only able to serve individuals coming into our Access Center who have Medicaid or no health insurance.” Sim i la r g ra nts were received by West Michigan-based agencies in Battle Creek, Lansing, Muskegon, Kalamazoo and Ludington, according to Stabenow. The funding “provides a major boost in services to individuals in our state during this difficult time,” Stabenow said in a statement.

Employers’ roles In addition to increasing capacity and scaling up the use of telehealth, the Pine Rest white paper suggested that providers “prepare our existing behavioral health workforce for caring for a surge of trauma-related needs, and in evidence-based suicide prevention interventions.” Therapists at Pine Rest, for instance, aim to “sharpen up their skills in working with people who have been traumatized, identifying suicide risks and addressing risk factors,” Eastburg said. The therapists are honing their skills at “all the good things good therapy training prepares you for, but you want to be especially astute because we might be seeing more situations like that where it’s important those skills be really sharp,” he said. Employers also play a role in preparing for the emotional effects the pandemic could have on employees, Eastburg said. He urges employers to examine their employee assistance program (EAP), if they have one, and to remind employees what they have available. “It really is a good time right now for companies to reach out to the EAP and find out what those benefits are, figure out how to communicate with your employees, and let people know this is available,” he said. “The minimal step you can do is mobilize that resource if you have it.” Visit www.mibiz.com

ChoiceOne-Community Shores deal progresses toward ‘likely’ third quarter close By MARK SANCHEZ | MiBiz msanchez@mibiz.com n mid-2018, executives and directors at Community Shores Bank Corp. began to study “strategic alternatives” to grow the bank. They met several times between July and December and “evaluated the considerable progress that Community Shores Bank had made over the past years,” according to a recent federal regulatory filing. In the months that followed, Community Shores directors decided to sell the bank. They ultimately chose Sparta-based ChoiceOne Financial Services Inc. (Nasdaq: COFS), citing among their rationale a good cultural fit between their two organizations. “Ultimately, in the judgment of the board, ChoiceOne’s proposal surpassed the others in terms of economic return to its shareholders and the continued commitment to excellence in community banking for the benefit of its customers and employees,” Brolick according to a prospectus filed April 29 with the U.S. Securities and Exchange Commission. Nearly six months after the $21.9 million Potes deal was signed and publicly announced, Community Shores shareholders are scheduled to vote on the acquisition on June 17 in a virtual meeting. Approval is almost a formality, since directors and executives at Community Shores who hold about 40 percent of common shares have agreed to cast them in favor of the transaction. Another 24.2 percent of the bank’s common shares are held by Bruce Essex Jr., the son of Bruce Essex Sr. The elder Essex is a longtime director at Community Shores. The deal has been progressing smoothly toward the shareholder vote, even as executives at both banks managed through the COVID-19 pandemic, Community Shores President and CEO Heather Brolick told MiBiz. Shareholders should soon receive materials for the virtual meeting, she said. “I have been encouraged by how smoothly this is actually working,” Brolick said. “We think alike and we probably have been running our businesses alike, both boards and management. It’s been very simple for us to communicate and work together as we put this

into place formally.” Brolick was among a group of banking executives who formed Community Shores in 1998. She will become senior vice president of human resources at ChoiceOne when the deal closes. When the two banks announced the deal in early January, they had hoped to close it by the end of the second quarter. The closing, presuming shareholder and regulatory approvals, now may occur a little later. “Initially we thought the acquisition at the holding company level could be completed in the second quarter of 2020. As time went on, we found the timing to be too aggressive,” ChoiceOne CEO Kelly Potes wrote in an email to MiBiz. “We are working hard toward still closing in the second quarter, but our closing will likely fall into the third quarter.” ChoiceOne Financial Services, the parent company of Spartabased ChoiceOne Bank, was already looking to expand into the lakeshore market when the opportunity arose to acquire Community Shores. Under the deal, ChoiceOne would add three offices in Muskegon County and one in Grand Haven in neighboring Ottawa County. ChoiceOne last year doubled in size to 29 offices in Western and Southeastern Michigan with an $89 million merger with Lapeerbased County Bank Corp., the parent company of Lakestone Bank & Trust. The final integration of the two banks, including Lakestone offices assuming the ChoiceOne name, is set to occur this summer.

Best interests The opportunity to pursue another acquisition came about as Community Shores executives and directors examined their options. By May 2019, they had determined to pursue a sale. “After assessing the information presented by investment bankers concerning market trends in the banking sector, size, historical growth, and financial progress of the bank, the board found it in the best interest of Community Shores’ shareholders to proceed toward a sale of the company from among the strategic options available,” according to the prospectus. Community Shores directors hired investment bank ProBank Austin, which by July 2019 had “identified potential transaction partners that could fit within the parameters outlined by the board.” ProBank then sent information to 12 potential suitors. In August, Community Shores received seven “indications of interest from prospective acquirers,” one of which was ChoiceOne,

Sparta-based ChoiceOne Financial Services planned for the acquisition of Community Shores Bank Corp. to close in the second quarter, but the deal may now extend into the third quarter. MIBIZ FILE PHOTO: JOE BOOMGAARD

according to the prospectus that If approved by Community details how the deal came together. Shores shareholders, the acquiAfter “further discussions” with sition would elevate ChoiceOne the seven, ProBank subsequently to about $1.6 billion in assets and received five “revised indications $1.4 billion in deposits. of interest.” Community Shores for 2019 After “conducting a comparhad net income of $763,000, or 19 ative analysis between the five cents per diluted share, down from indications of interest, account$905,000, or 22 cents per diluted ing for factors like merger conshare, in 2018. The corporation sideration, employment matters, ended 2019 with $202.1 million geographical advantages, and in total assets and $178 million in future avenues for a combined deposits. g r ow t h,” C om mu n it y Shores directors whit“We think alike and we tled their choice to two: probably have been ChoiceOne and another running our businesses unidentified bank. On Oct. 2, 2019, a meetalike, both boards and ing between Community management. It’s been Shores’ board, ProBank very simple for us to and ChoiceOne executives “shed light on ChoiceOne’s communicate and work strengths, its products and together as we put this services, loan portfolio into place formally.” and deposit growth, strategic focus, mission and vision, merger and acqui— HEATHER BROLICK sition history, particularly President and CEO of Community the recent merger of equals Shores Bank Corp. with County Bank Corp., market capitalization, and shareholder return,” In addition to ProBank according to the prospectus. Austin serving as financial adviser, Dickinson Wright PLLC Finding growth is legal counsel for Community ChoiceOne submitted another Shores Bank in the deal. Grosse revised bid to Community Shores Pointe-based Donnelly Penman on Oct. 18. Five days later, the two & Partners Inc. is financial adviser decided to move toward a deal. and Grand Rapids-based Warner They negotiated and conducted Norcross + Judd LLP is the legal due diligence through the rest of counsel to ChoiceOne Financial 2019 on a final agreement, which Services. was executed on Friday, Jan. 3, 2020, and publicly announced the Earnings following Monday morning. performance Under the terms of the agreeThe 2019 merger with County ment, Community Shores shareBank doubled ChoiceOne’s earnholders have the right to receive ings for the first quarter. an amount equal to $5 in cash or The corporation in April 0.12161 shares of ChoiceOne stock reported $3.2 million in quarfor each of their shares. terly net income, or 45 cents per Di rec tors at bot h ba n k s diluted share. That compares with approved the agreement. Among net income of $1.6 million, or also the reasons Community Shores 45 cents per diluted share, for the directors cite in the prospectus first quarter of 2019. in urging shareholders to supThis year’s first quarter port the deal is the 7 percent to 10 included $282,000 in mergerpercent earnings accretion once related expenses. Minus that cost, the sale to ChoiceOne is fully ChoiceOne’s quarterly net income implemented, and “the expecwas $3.5 million, or 49 cents per tation that the merger will result share. in a larger and more diversified ChoiceOne ended the quarfinancial organization with a ter w ith $1.39 billion in tota l larger and more diversified asset assets. base.” MiBiz / MAY 11, 2020

ECONOMIC DEVELOPMENT WHAT’S NEXT Continued from page 1

that we do all of these practices that truly make these places safe.” A producer of medical devices that’s helped with products like ventilators to support the supply chain during the pandemic, Autocam Medical is considered an essential business and has continued operating with safeguards in place. In preparing to reopen and bring back employees, companies should designate leaders to manage the overall response to the pandemic, said Keith Hustak, vice president of outpatient services at Spectrum Health. This Hustak includes overseeing specific tasks such as sanitizing and disinfecting, protocols to prevent infections and the spread of the coronavirus, communication and training for employees, and procuring personal protection equipment in the workplace. Companies should put Miller that team together weeks before reopening and hold daily team meetings “to talk about all of these things,” Hustak said during the Advantage Benefits webinar. “You have to be diligent about executing on these tasks before your employees go back to work,” Hustak said. “Your business cannot Jackson look like it did pre-COVID, and if it does, that means you’re not doing some things right, so you have to get a team engaged on this.” Anne Leighty, a partner at Rockford-based Phoenix Consulting Group LLC, urges employers who consider reopening to keep up to date on the requirements of the U.S. Occupational Safety and Health Administration, as well as the equivalent state regulatory agency, plus guidelines from the U.S. Centers for Disease Controls and Prevention. State and federal agencies regularly update guidance and requirements as the pandemic progresses, Leighty said. “Be informed. The information is constantly changing. It isn’t a one-time read-it-and-knowwhat-to-do,” she said. In developing new social distancing policies for their offices and facilities, employers can consider spreading out workstations or implementing one-way hallways, said Bryan Blackburn, another partner at Phoenix Consulting Group. The firm, which is offering a free hour of consulting during the pandemic, provides services in accounting, human resources, information technology and finance. Employers also need to develop practices for disinfecting their offices and facilities — more than once a day for high-traffic areas — and figure out policies for visitors, clients and vendors, Blackburn said. “What do you do if you have a visitor? What’s the protocol for the facilities? Do they have to get prior authorization before entering the building? Are they physically cleared? Are they tested? Those are some areas that really need to be addressed,” he said.

A little slack Perhaps the best thing employers and employees can do is give a little slack as everyone adjusts to the pandemic, Leighty said. She cites workers with children who have been doing school lessons at home. Now mom or dad, or both, might have to go back to the office each day with a few

MAY 11, 2020 / MiBiz

weeks or more still left in the school year. “How frustrating can that be? You’re required to now come back into the office, plus the kids are at home and it’s not like summer. You need to be doing curriculum with them,” Leighty said, adding that employers may find those workers want to continue working at home for a bit longer. “There’s going to be a lot of frustration on both sides,” she said, citing instances in which employees who had been working from home and would prefer to continue doing so are not allowed to by their employer. “And, actually, vice versa: There are people that maybe need to get out of the house. It’s just an unknown right now and each business is going to have to take their own approach. There’s no one-size-fits-all answer.” Individuals deal with the pandemic differently on an emotional level, and patience and understanding with one another is crucial, according to the consultants. For instance, some employees may not adjust well to wearing a face mask at work, Leighty said. Employers also need to communicate their plans regularly with returning employees, Blackburn added. “The folks that have not been to work in the past two months, they don’t know what the changes are at their work facility, so when they enter that first day it’s all new. Management needs to realize that the learning curve may be greater than what they’re expecting,” said Blackburn, who emphasizes the need for understanding as everyone adjusts. “Show compassion, not only for your own family and employees, but your clients and your business partners,” he said. “If we can work together with a single goal in mind, we’ll get through this together.”

Financial planning

Workers at Autocam Medical Devices in Kentwood now wear face masks as part of safety measures taken in the wake of the COVID-19 outbreak. COURTESY PHOTO

Business leaders also will have to adjust their respond with people and the safety plan that I internal operations as they adapt the company need to have in place for each one,” Jackson said. to the economic conditions resulting from the Some practices, such as increased cleaning pandemic. Companies will need to rethink the and distancing workers, “I don’t think those are future, make new projections for revenues and going away soon, and they probably shouldn’t,” then plan accordingly, said Ronald Miller, a manhe said. aging director at Grand Rapids-based BlueWater Partners LLC. Practicing protocol “None of us will really know exactly what our In the weeks since the pandemic spread to ‘new normal’ is going to look like,” Miller said. Michigan, Autocam Medical has implemented “We do not know where the economy is going, so protocols to prevent the spread of the coronavibusiness owners really need to look at a number rus within its facilities and workforce. of different scenarios and different probabilities In that time, “our practice has improved drainto how their business is going to be ramping matically,” Kennedy said. up.” “What we’ve done is gotten down to what we In general, business owners and executives think are the critical facshould “be very realistic tors for actually making about their business and a difference, flattening the impact on their busithe curve, preventing the ness that the virus has spread, however you want had” and “make sure that to express that, and then you are protecting the maintaining an extremely viability of your company safe workforce,” Kennedy long term by being very said. proactive on addressing Autocam Medical has the new environment,” 500 employees at three Miller said. Jeff Jackson, also a — KEITH HUSTAK facilities and “we’re pretty much doing the same managing director at Vice President of Outpatient Services at thing at all of the faciliBlue Water Par tn ers, Spectrum Health ties,” he said. encourages companies The company had one to run “best case, likely employee at its Plymouth, case, worst case” scenarMass. facility who tested positive for COVID-19. ios to understand what the business faces “and The employee recovered and is doing well, said then have a plan for each of those cases.” Kennedy, who credits protocols the company put State and federal regulations already in place as being “instrumental” in preventing require employers to provide a safe workplace. the spread of the virus at the facility. Guidelines issued during the pandemic call for “It definitely shows that you can operate additional practices in health, safety and social with these protocols and your business can cerdistancing protocols, as well as criteria for tainly be at lower risk,” he said. “I think a lot of restarting operations and bringing back workers. the manufacturing businesses in particular, and “You just have to look at each piece of your construction and other businesses, you can truly business systematically. That way, once you socially distance and actually operate this way.” understand, ‘OK, this is what my business is Autoca m Medica l’s pract ices include going to look like going forward for the next 12 wearing face masks, checking employees’ to 18 months,’ (I can determine) how I need to

“Your business cannot look like it did preCOVID, and if it does, that means you’re not doing some things right.”

temperature daily, encouraging frequent and thorough hand washing, increased housekeeping, keeping worker stations at least six feet apart, and limiting density in common areas such as lunch and conference rooms. The company separated tables and removed chairs from common areas “just to make sure that people are not congregating, because that’s the tendency,” Kennedy said. The company hired staff to continually “clean all work surfaces that a human hand touches,” including his own office. Autocam Medical also adjusted its attendance policy for employees who had COVID-19 symptoms. “We paid people fully to stay home. That’s probably been one of the most important things that we’ve done,” said Kennedy, who sees a change in the company’s system becoming permanent to prevent the spread of colds or the flu in the workplace and keep people from coming to work when they’re sick. “We haven’t figured out what to do yet, but we certainly want to make sure that our policy works in a way that encourages people to stay home when they have some type of sickness,” he said. Through April 27, Autocam Medical also paid employees to stay home if they live with someone who has a chronic illness that makes them vulnerable to COVID-19, he said. In office settings, companies may continue to have some employees work from home at least part of the time to maintain social distancing in the workplace. Working at home is an increasingly welcomed option among office workers, according to a lateApril survey of more than 1,000 people conducted by national HR consulting firm Robert Half International. Nearly eight in 10 respondents said they’d like their employer to allow them to work from home more frequently, and 63 percent said they realized their job was doable from home. Nearly half said they hope their employer will change the office layout, 55 percent want staggered work schedules, and seven out of 10 want fewer in-person meetings and training. Visit www.mibiz.com

Q&A Jordan Buning President, DDM Marketing & Communications As the business world adjusts to the COVID-19 pandemic and seeks to get back to work, companies will need to alter their approach to the market and how they promote their products or services, according to Jordan Buning, the president of DDM Marketing & Communications in Grand Rapids. Buning tells MiBiz those changes in messaging and branding and how companies position themselves in the marketplace could very well become permanent. How has the crisis changed the marketing messaging for companies? People are kind of uncomfortable with how to talk. I think there are some that have a natural ability to connect and be empathetic. Then there are some that really don’t know how to do that. They’ve known how to talk business, they’ve known how to sell products, and now suddenly they need to connect more at a human experience level and create some level of authenticity, and it’s kind of uncomfortable for some organizations. That’s something we’ve been wrestling around a lot with: How do you talk ‘right’ during this time? There are a lot of things to watch and there are some things we all like and some things that we don’t. Do you see the pandemic creating a permanent change in how companies try to market and position themselves? Just because of the global impact of this and none of us have experienced it in our lifetimes, it really is going to change the mindset a little bit. There’s a shift in motivators that we’re dealing with right now. People need to feel safe, they need to be informed and they want some form of convenience that is connected to the safety issue as well. The drivers that you think you knew about your audience are different right now and they’re going to be lasting for quite a while. Whether they’re permanent (or) permanent for the next year, that’s just a reality. So resetting how you understand your audience and how you connect with them are big issues for a lot of companies. For companies that pulled back their marketing during the crisis, what do they need to keep in mind as they re-engage? There’s this ongoing challenge of how do you be the brand that you would want to interact with. That’s the ongoing question before you completely roll back. How do we still relate? How do we connect? How do we communicate? That’s an ongoing issue. As they move back into the marketplace, I think it’s almost going to force a lot of people to go back through a strategy process and start asking questions. Is the audience we knew and the messaging we were sending and the products that we were offering still as relevant as they were before COVID-19? In what scenarios do you see that shift in strategy occurring? Some people may discover a pretty tectonic shift in the way that they’re going to interact with their customers, and they might need to start over. If the interaction they had was going to trade shows and being able to get their leads there and they just worked their leads for the better part of a year, and (now) the trade show’s gone away, how are they going to connect with them? What are the drivers those people are going to have? Their whole strategy may shift in some cases. What’s the best thing a company can do as it plans a strategy to re-engage with marketing and advertising? They need to start by taking a step back and asking a lot of questions, just like if you were going through a strategy or discovery process or something like that again. Who are we? Who’s our customer? What do they want? How are we connecting with them? Be very intentional about their position in the marketplace. Our viewpoint is going to be, take the long view. Do we want to fix some symptoms or do we want to solve the problem? That’s the mindset that a lot of these companies need to have as well. Are you just trying to do something really quick, or are you trying to really solve whatever the shifts are in the way that you’re going to communicate with your customers? What’s a mistake to avoid? One of the risks they have is ignoring (customers) and maybe by going dark. Maybe it’s even best intentioned, but I think people want to have clarity that you’re there as a resource to them. There was a study done essentially about how people will remember how you dealt with them in a moment of crisis, and that kind of stuck with me as we talked about our own clients. We’re going to have clients that have work that we can bill them for, but if we walk away, we’re leaving an opportunity for somebody else to maybe come in and solve their challenges. They’re going to remember if you were or weren’t there for them. That’s a challenge for a lot of companies. How are you going to find a way just to be considerate in the era that you’re in? That may not mean you’re going to get business from them, but how are you going to be supportive? How are you at least going to reinforce that you’ll be supportive for them? What are some unique examples of how companies have been keeping their brands out there even as so much of the economy has been shut down? I’ve seen a lot of organizations doing some pretty good stuff. Maybe they’re just building informative webinars. I’ve seen restaurant companies or organizations that are giving away their ‘secret’ recipes and all that. Those are innovative ways (to say), ‘OK, I can’t deliver an interaction in the same old way, but maybe I can give them some other kind of value.’ That’s very much the opportunity that some organizations have. What type of messaging will simply turn off a consumer? I keep going back to the Trojan Horse scenario. The one where it kind of looks like they’re trying to be your buddy, but they’re really just trying to sell you something. My partner, Mark Blodger, has been saying this a lot: A lot of organizations have to shift from selling to helping. That stuck with me. Ultimately, every organization’s goal is to sell something, and that’s not to be ignored. But the way you do it and the authenticity that you deliver is really the key thing. If you say these buzzwords just to get people’s attention and then go right back to doing what you’ve always done, I think you’re going to lose people.

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T H E C A M PA I G N F O R G R A N D VA L L E Y S TAT E U N I V E R S I T Y

Serving the West Michigan market for 30+ years. We will continue to serve you and answer any questions you may have during this challenging time. Our company has invested in the necessary tools to allow our team of agents, property managers and professional staff to remain fully operational. Although it feels far from “business as usual”, we are committed to meeting your unique commercial real estate needs. There is plenty of uncertainty right now in our community and beyond, but our team remains optimistic, committed and focused on doing our part to weather this storm.

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269 353 Commercial Real Estate Services, Worldwide. Grand Rapids Office 616 776 0100 naiwwm.com

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Interview conducted and condensed by Mark Sanchez. COURTESY PHOTO Visit www.mibiz.com

MiBiz / MAY 11, 2020

ECONOMIC DEVELOPMENT

‘No one is happy’ GR entrepreneur denied medical marijuana dispensary as city officials grapple with regulations By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com GRAND RAPIDS — Objections from religious institutions have halted another proposed medical marijuana dispensary in Grand Rapids, underscoring what critics say is a flawed and unclear regulatory system. On April 24, the city’s Planning Commission — an eight-member appointed body that considers waivers if medical marijuana businesses are located near sensitive uses like parks, churches and substance abuse treatment centers — rejected requests to open a dispensary on South Division Avenue. It was the commission’s third denial this year. Nearby religious officials VandenBerg objected to the business on moral grounds, saying it would be a detriment to the neighborhood’s character and the youth. Applicant Tami VandenBerg, an Eastown resident who owns popular bars The Meanwhile and Pyramid Scheme, sought to repurpose a

vacant electronics store on the city’s south side with a hiring preference for local residents. Some Planning Commission members said VandenBerg was the ideal type of candidate the city wants operating a cannabis store. However, the April 24 meeting included objections from the pastors of two nearby churches and a mosque. The Planning Commission initially deadlocked 4-4 on the waiver before ultimately denying it. Planning Commission members spoke repeatedly about their frustrations — not with marijuana businesses but with the underlying zoning regulations adopted by the City Commission. They grappled during the meeting over whether a medical marijuana dispensary would have a “detrimental impact” on the religious institutions, weighing the anti-drug messages from religious leaders and the physical geography of where the business is located around a busy thoroughfare. The Planning Commission could have approved the waiver despite the opposition from church leaders. “It is extremely frustrating to have the existing regulations put us in this position,” said Planning Commission member Stacie Behler. Planning Commission member Walter Brame added: “I think, frankly, we have been put in an untoward position from the City Commission on this.”

Working as intended? Since the city started accepting applications last year, the Planning Commission has approved waivers for 25 medical marijuana locations — including

Entrepreneur Tami VandenBerg was involved with plans to convert a former electronics store on South Division Avenue in Grand Rapids into a medical marijuana dispensary. The Planning Commission denied the special land use request for the facility after religious groups spoke out against it. MIBIZ PHOTO: ANDY BALASKOVITZ grow sites, dispensaries and processors — while denying them in eight cases. Three provisioning centers are in operation: 3Fifteen at 2900 S. Division Ave.; Pharmhouse Wellness at 831 Wealthy St. SW; and Fluresh at 1213 Phillips Ave. SW. The denials were based on objections from religious organizations, treatment centers or city parks, in several cases from multiple sources. Grand Rapids Planning Director Kristin Turkelson said despite frustration from Planning Commission members and applicants like VandenBerg, the medical marijuana ordinance is working as intended. “It is working in that we set out to use the separation distances to protect sensitive uses but also control the number of facilities and proliferation of facilities in the city,” she said, noting that setbacks were specifically used instead of capping the number of facilities in the city. Municipalities including Muskegon Township and Lowell, for example, have capped the number of cannabis businesses allowed. The city of Muskegon established a marijuana overlay district to locate dispensaries. While Turkelson agrees that VandenBerg may have been an ideal candidate based on objectives set out by the city, that’s not a determining factor. “If we were solely focused on local ownership, then absolutely Tami’s application would fulfill that,” Turkelson said. “But that’s not the only consideration to look at. The Planning Commission was responsible to the entire ordinance, not just one aspect of a desired goal, which is local ownership.”

“Not only were the churches speaking in opposition to the proposed new provisioning centers, they were also speaking to the fact that this should not change in the future and that their desires and wishes are as important — if not more important — than some of these businesses,” he said. “That’s a tough coalition to fight, let’s be candid.” According to data compiled by the city, 17 religious institutions have not objected to cannabis facilities, while five have filed objections. VandenBerg waited for 13 months for the Planning Commission to consider her company’s application, which required multiple renegotiations on an option to buy the building at 2249 S. Division Ave. Her team had invested “tens of thousands” of dollars into the property. Communication with all of the religious institu-

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MAY 11, 2020 / MiBiz

‘No one is happy’ While the Planning Commission must follow regulations in the ordinance, the rules give the body authority to decide waivers and, effectively, the fate of a project. Applicants also can appeal a decision to the Board of Zoning Appeals. Ben Wrigley, partner at Cannalex Law in Grand Rapids, represented a client whose waiver request for a dispensary on South Division also was denied. “One of the things the Planning Commission has been struggling with are these waivers,” Wrigley said. “What is the purpose for these buffer zones and sensitive areas which are guiding the situation? Are (they) to make the determination that a provisioning center within the 1,000foot radius of a church is going to have a negative, adverse effect? How do you measure that?” Wrigley said “for the most part,” cities have not gone to the same lengths as Grand Rapids on separation requirements from as many sensitive uses. He added that religious opposition to marijuana facilities is part of a broader coalition in Grand Rapids.

— BEN WRIGLEY Partner at Cannalex Law

tions was either sporadic or non-existent until days before the Planning Commission meeting, as she and the city didn’t realize exactly how many were within the 1,000-foot setback. She held four meetings with neighborhood groups and the community. “The whole thing was really, really challenging,” VandenBerg said, adding that two of the religious groups didn’t submit letters of opposition until days before the commission meeting. “It was alarming and disappointing. The letters were very fringe opinions and had nothing related to land use. I really didn’t think (the Planning Commission) was going to take seriously the letters that said marijuana is evil.” VandenBerg also submitted dozens of letters of support for the project, although Planning Commission members noted they weren’t generally from the neighborhood of the proposed dispensary. Initially, VandenBerg didn’t plan to appeal the decision to the city’s Board of Zoning Appeals, but now is considering it. “No one is happy about this ordinance,” she said. Visit www.mibiz.com

REAL ESTATE & DEVELOPMENT

BACK TO WORK Construction industry adjusts to new COVID-19 protocols By JAYSON BUSSA | MiBiz jbussa@mibiz.com

hen the statewide construction industry fired back up on May 7, Dan LeMore and his team at The Christman Co. had already tweaked their approach to projects in response to the nationwide COVID-19 pandemic. While a wide majority of construction companies and projects were put on hold after an executive order from Gov. Gretchen Whitmer, Christman stayed relatively active with essential projects in the health care and wastewater industries. “The things you are seeing (now) as far as safety protocols, we have been doing for several weeks, including dealing with positive COVID-19 cases, contact tracing and figuring out a plan for each project,” said LaMore LaMore, senior vice president of West Michigan operations for Christman Co., which is headquartered in Lansing with offices in Grand Rapids and Detroit. “We definitely feel like this past seven weeks of experience have been valuable so we can do a good job Courtade moving forward and helping others that are just starting out to move forward more positively,” he added. While Christman didn’t necessarily have to skip a beat in its approach to construction projects, many companies continue to ramp up operations and now must comply with a new executive order Potter that lays out an extensive list of required safety practices and precautions. The order doesn’t just apply to construction companies, but also building trades, like electricians, plumbers and HVAC technicians. In order to resume operations and comply with the executive order, construction companies and related businesses must satisfy 19 different standards. A small sampling of those requirements include: • Restricting the number of workers present on the premises to only those who are absolutely necessary to complete the work. • Conducting a daily entry screening protocol for workers and visitors as they enter the worksite in order to identify people with COVID-19 symptoms and to track exposure to individuals who might be suffering from the infectious disease. • Wearing mandatory face shields or masks when workers are not able to consistently maintain six feet of separation from one another. Life on job sites is now markedly different for construction companies. At Christman, LeMore described a few of the changes, such as foreman huddles every morning to promote enhanced communication and coordination on a job site. Christman also has implemented a smartphone app that allows workers to scan in when they enter a job site and answer four COVID19-related questions before undergoing a visual inspection. The company also uses infrared thermometers on some jobs to test for fevers. In addition to that, Christman also uses a thirdparty cleaning service that’s responsible for circulating around a job site to clean common contact points like door knobs, handrails and ladders.

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“As we’ve lived through this over the last few weeks, the thing that stood out to me is that our priorities have to be the safety of the workers and the safety of the occupants when (when the project is in) an occupied building,” LeMore said. “The second thing is communication.”

New challenges With a bevy of new restrictions to follow and additional expenses to contend with, project inefficiencies naturally become issues, espehave caused disruption to projects, it has been cially in an industry that hinges on timelines relatively easy to overcome through communiand budgets. cation with project owners. “There are some impacts here that will slow “I think the (clients) we’re working with, we things down — they will cause some ineffihave a really good group at this point who are ciencies in the workplace and on the construcvery much understanding of the times,” Potter tion site, specifically where you have to restrict said. “When we went over our response plan, the number of workers present,” said Bruce there was understanding. This is our risk manCourtade, an attorney with Grand Rapids-based agement plan for their project. We want to keep Rhoades McKee PC, who specializes in commertheir project moving, keep it as on-schedule as cial and residential construction matters. possible, yet at the same time asking them for “It allows no more than what’s strictly grace to help us with the schedule. necessary to perform the work,” he said. “We’ve had really good conversa“The construction industry is a lot of tions, and the health and safety of the hurry up and wait. You will have a workers is paramount above all particular segment of the job that else. They all agree.” has to be done today so you will These new measures have REAL ESTATE flood that area with a crew to get been put into place to deal with + DEVELOPMENT it done. If you’re strictly following the new normal, but the quesSponsored by these guidelines, if you can do it tion remains of what might hapROCKFORD CONSTRUCTION CO. with two people, then you do it pen when, and if, life returns to with two people.” the old normal. Some companies LeMore of Christman agreed with that are mulling over the idea of implementing these notion, but also said that it “doesn’t mean that changes indefinitely. completion dates are slipping, it means they’re At Erhardt, Potter said that he saw a lot of harder to achieve.” benefit to the new sign-in process and leveragAda-based Erhardt Construction Co. is ing technology for it. But he was not enthusiastic another construction company that enacted about all the new measures in place. new safety measures even before the industry“Some of the PPE requirements will be difficult wide shutdown of non-essential projects on to deal with,” Potter said. “I’m not sure how long March 23. Safety director Nate Potter said the we will have to go with the masks — I personally company has gone on to implement a comprewould prefer that would fall off sooner or later.” hensive safety plan, guided by the continued information and recommendations released Gray areas via government orders and through organizaStill, some businesses and professionals find tions like the CDC. themselves stuck in the gray areas of the Potter said although the new safety measures

“We definitely feel like this past seven weeks of experience have been valuable so we can do a good job moving forward and helping others that are just starting out to move forward more positively.” — DAN LEMORE SVP of West Michigan operations at The Christman Co.

executive order, which based on previous orders, will likely be selectively enforced according to jurisdiction. There is also some confusion over exactly who it applies to and the way in which companies interpret subjective language. “It just shows how, even when you’re trying to be clear, there are still gray areas,” Courtade said. “I got a call from a cabinet maker — he makes cabinets for custom homes — asking whether he is a contractor eligible to go back now or is he a manufacturer required to be shut down. When you figure (it out), let me know. “You cannot anticipate every possible scenario and cover it in a document that is less than 10,000 pages long. Even at 10,000 pages, other questions will come up. That’s why we have multiple executive orders.”

MiBiz / MAY 11, 2020

COPING WITH COVID-19: SPECIAL REPORT MIBIZ GETS FACEBOOK GRANT TO COVER HOW SMALL BUSINESSES ARE COPING WITH COVID-19 MiBiz has been selected by the Facebook Journalism Project to receive a COVID-19 US Local News Relief Grant. Our newsroom will use these additional resources over the

next year to report on how the pandemic has changed the operating environment for small businesses in Western and Southwestern Michigan. We want to hear directly from companies with fewer than 500 employees about how they’re coping, pivoting, restarting operations and finding new markets in the face of the crisis. If your business has “war stories” because of COVID-19, please share them — warts and all — at editor@mibiz.com.

Jonathan Jelks, entrepreneur. COURTESY PHOTO

AGRIBIZ EN T REPRENEUR

Grand Rapids entrepreneur sees the full spectrum of economic changes By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com GRAND RAPIDS — Jonathan Jelks — a Grand Rapids entrepreneur behind a variety of startups in fashion, tech and hospitality — is seeing the full spectrum of economic changes brought on by the coronavirus. Jelks is co-founder of several businesses, including Ambiance GR Kitchen & Lounge, a new downtown restaurant and bar still under construction; Motu Viget Spirits; GR USA Apparel Co.; and a new streaming app geared toward up-and-coming musicians. Before COVID-19 struck, Ambiance was initially scheduled to open around Memorial Day in a long-vacant below-grade space at 125 Ottawa Ave. NW in downtown Grand Rapids. Construction is near completion, but the project also requires permit approvals from the city. The restaurant has received financing assistance through the Small Business Administration that will cover the next six months of obligations, Jelks said. “Until we can operate at a certain capacity, it makes no sense for us to be open,” he said. “We’re in purgatory.” However, the outlook isn’t as grim for his other ventures. Motu Viget, which produces a line of brut wine and vodka, is “doing very well for us,” he said. Its Avani Supreme vodka brand, produced in partnership with Grand Rapids-based Long Road Distillers LLC, is available in stores while its flagship brut — a partnership with Paw Paw-based St. Julian Winery — can be ordered online and shipped to customers. “People are still drinking in the state of Michigan. We’re happy to be part of that experience,” he said. Jelks also is involved in the forthcoming Radi8tor app, a smartphone streaming music platform that includes geolocation features and is set to launch in June. Meanwhile, the GR USA apparel line featuring the city of Grand Rapids has been “so far so good.” For entrepreneurs, the business climate during COVID-19 has been “tumultuous,” he said. “You don’t know how drastically your revenue is going to change from month to month. While there has been assistance for certain entrepreneurs, some have not been eligible,” he said. “My heart goes out to everybody who is responsible for leading people and paying employees. There is no model for this. If this persists too much longer, the American economy as we once knew it is going to go through a complete metamorphosis.” Jelks isn’t staying bogged down in the gloom, though, and remains hopeful for people looking to succeed during and after the pandemic. “In crisis, there is a lot of opportunities,” he said. “There are gaps in our system now where new businesses can be created to help revive things. It’s important we remain supportive of one another.”

MAY 11, 2020 / MiBiz

Fulton Street Farmers Market stays open, adapts to new safety measures By JESSICA YOUNG | MiBiz jyoung@mibiz.com GRAND RAPIDS — In March, organizers at the Fulton Street Farmers Market in Grand Rapids were preparing for their biannual soup-tasting fundraiser. Usually, vendors and West Michigan restaurants donate soups for the event. Hundreds of people gather to taste food from the cooler weather season, catch up with one another and support the market. “It’s a celebration of our second season market and it’s a great way to highlight local restaurants,” Rori Jean Trench, executive director and market manager, said of the event. At a meeting about a week before the fundraiser, which was scheduled to take place on March 24, one of the market’s board members voiced concerns about holding such a large event in the face of a possible outbreak of COVID-19. In the end, the board and staff decided together to postpone, and perhaps, cancel the fundraiser. The next day, Gov. Gretchen Whitmer reported Michigan’s first confirmed case of COVID-19 and issued a state of emergency. “It was a pretty surreal moment because, up until that point, it was kind of like humming in the background but we didn’t quite understand the magnitude or how it would impact us,” Trench told MiBiz. “Ever since then, we’ve been on high alert and high speed just changing and evolving our operations, staying very in tune with what’s going on, and really communicating with all of our governing agencies to see what our best practices should be and how we can best implement those.” For nearly 100 years and still now every week, farmers fill stands on Fulton Street with fresh produce, meats and dry goods. The market is “one of only a handful” in the region that is open year-round, which has helped Fulton Street Farmers Market adapt its operations in phases to the new operating environment, according to Trench.

Patrons observe social distancing guidelines at the Fulton Street Farmers Market in Grand Rapids. MIBIZ PHOTO: JESSICA YOUNG “Many markets are ramping up right now and trying to figure out how they’re going to do their operations — we’ve been living it in real time,” she said. “We have not closed at any point. Every week, we’ve just continuously modified our operations, communicated with our customers, communicated with our vendors and just tried to remain diligent during this time.” Market organizers have implemented several new safety measures in accordance with guidelines from the state and health officials. Customers are asked to stay six feet apart, send only one shopper per household and refrain from touching any products before purchase. Vendors are all stationed at outside farm stands, wear masks and gloves and continuously sanitize their areas. To adhere to social distancing guidelines, only 66 shoppers are allowed into the market at a time and just 39 vendors are spread out among the 118 outdoor booths. “That’s a huge cut for us, even from a financial standpoint, if we can only allow half of the vendors that we normally do,” Trench said. Still, the market is doing well and some farmers’ produce and meats are selling more than ever, she added. “It’s a really challenging time and we’re really having to think outside the box and change and evolve,” Trench said. “We want to celebrate that we’re in this interesting position for people who want to support their local farmers. There are a lot of unsettled feelings about what does this look like and how are farmers going to move forward during this. It’s been a really humbling experience.”

EN T ERTA INMEN T

The Intersection fights for survival amid venue shutdown By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com GRAND RAPIDS — Music venues across the U.S. are caught in a coronavirus quandary. The question they face: Do they start booking and rescheduling bands with a safe amount of lead time in the months ahead, or do they wait for talent agents to contact them as bands feel more comfortable traveling? “It’s like playing a game of chess at this point,” said Scott Hammontree, general manager and talent buyer at The Intersection in Grand Rapids. “The virus is dictating right now when that’s actually going to happen.” Indeed, music venues were among the first to halt operations due to COVID-19 — The Intersection’s last show was on March 12 — and they may be among the last to reopen. As of late April, Hammontree said “not much communication” was happening between bands, agents and venues. “Everyone is just waiting to see,” he said. Since Gov. Gretchen Whitmer’s stay-home order came down on March 24, Hammontree said there’s been a mix of acts canceling, postponing and rescheduling. Initially, venues were rescheduling shows to June and July, while “others were more realistic” and planning into the fall, he said.

The Intersection, which includes four venues in downtown Grand Rapids, hosted its last concert on March 11. MIBIZ PHOTO: ANDY BALASKOVITZ The Intersection — which includes four separate venues of varying capacity at its downtown Grand Rapids location — has temporarily laid off all of its staff, which ranges in size from the mid-50s to nearly 90 people, depending on the concert season. The venue typically has 100,000 to 110,000 attendees a year and exceeds $3 million in ticket sales. As long as large gatherings are banned to prevent the spread of the coronavirus, music venues remain in limbo. Unlike bars or restaurants that may be able to limit occupancy in the future, venues have no such options. Another complication is the varying stayhome orders by state. In the coming months,

Michigan’s rules may look different than Indiana’s and Ohio’s, for example. Hammontree also serves as the talent buyer at the Clyde Theatre in Fort Wayne, Ind. “I feel like it’s impossible to plan at this point,” he said. “The guidelines vary from state to state.” Amid the uncertainty and survival mode, small independent venues across the U.S. have banded together. The National Independent Venue Association (NIVA), which now has more than 1,000 members, is calling on Congress to support “targeted legislative and regulatory assistance.” A study by the National Endowment for the Arts says arts and culture contributed nearly $880 billion to the U.S. gross domestic product in 2017. Pollstar forecasts the live music industry could lose $8.9 billion in revenue if venues remain closed through 2020. NIVA’s letter notes that, “for the first time in history, there is legitimate fear for our collective existence.” The Intersection also has started a staff fundraiser for tipped and hourly workers, which raised $8,500 in the first month. “It really comes down to survival mode,” Hammontree said. “We really don’t know how long we can go. We have zero income while the bills are piling up for rent, utilities and insurance.” Visit www.mibiz.com

RE TA IL

Meat Block’s retail store keeps up with demand despite volatile market By MARLA MILLER | MiBiz mmiller@mibiz.com FRUITPORT TOWNSHIP — The Meat Block Inc.’s restaurant accounts have taken a big hit due to COVID-19, but the Muskegon-area retail store and online orders have kept the Anderson family busy. The retail store at 2330 E. Broadway Ave. in Fruitport Township has remained open as an essential business, but policies and procedures continue to change under the governor’s executive orders. A lakeshore meat wholesaler and butcher since 1909, The Meat Block in recent weeks has struggled to keep up with demand because of meat processing plants closing across the country. “I think there are going to be shortages and high pricing for a while,” said Harvey Anderson, who co-owns the business with his son, Matt Anderson. “It’s everything right now — beef, pork and chicken.” Anderson answered the phone and said he only had a few minutes to spare because “we’re completely swamped.” The Meat Block did get a loan for employees through the Small Business Administration’s Paycheck Protection Program, and Anderson said the company has tried to keep everyone working. “We lost a lot of our wholesale accounts, but we have the retail outlet here that is keeping us busy,” he said. “We service hospitals with the wholesale (operations), so we really can’t close our doors.” Anderson has been in the business for 52 years, and said he has never experienced anything like the COVID19 crisis, noting The Meat Block is complying with all of the current safety guidelines. Only six customers are allowed in the store at one time, the restrooms are closed to the public, hand sanitizer is stationed inside the door, and customers must wear masks while in the store. The Andersons adjusted the store’s hours, including opening a half hour early for vulnerable populations, adding protective plexiglass at the registers, and continuing to post updates via social media. Due to rapidly

Retail sales and online orders have kept The Meat Block busy in Fruitport Township. MIBIZ PHOTO: MARLA MILLER changing inventory, curbside pickup and online ordering may not be available. Initially, customers could call ahead for curbside pickup and order from a special curbside menu. The Meat Block also has an online store, and employees continue to update the available inventory. On April 2, Matt Anderson made a Facebook post thanking customers and listing the restaurants that continue to order from The Meat Block. “My vendors have been instrumental in keeping our freezers and coolers stocked with fresh inventory and for that I am appreciative,” he wrote. “I am especially thankful for my employees and staff that have been working extremely hard to keep up with the current changes. It has been challenging, but they have been loyal, flexible and diligent.” Using the tagline “the cuts you dine out for,” The Meat Block is a fifth-generation family-owned operation that specializes in quality meats for commercial accounts, restaurants and retail customers. Hamburger, chicken and pork chops are its staple meats, but the store also sells a variety of steaks, lake perch, shrimp and Michigan-made spices and grocery items. Meat products are USDA Choice grade or better, properly aged, vacuum-sealed, ensuring freshness for months, and available fresh or frozen. In the late 1980s, Matt Anderson joined his father and uncle in carrying on a family business started by his great-great grandfather, John Anderson. The first location on Hackley Avenue opened in 1909 as Anderson Packing. It was renamed Superior Meat Co. and became The Meat Block in 1978.

RE TA IL

Vertigo Music serves loyal followers with home delivery, curbside sales By RICH TUPICA | MiBiz rtupica@mibiz.com GRAND RAPIDS — Listening to records during the stay-at-home order may seem essential for passionate music lovers, but during this pandemic, vinyl shops have been closed to the public since mid March. In Grand Rapids, Vertigo Music decided to get creative with its sales model and has managed to keep some cash flow coming through its doors at 129 S. Division Ave. “We’ve been doing some home delivery and some curbside,” said Vertigo owner Herm Baker. “We’ll also continue to list more and more things on Discogs [a record listings and commerce website] — that’s been a saving grace for us at this time.” Record Store Day, the biggest annual sales day for independent shops across the country, was delayed from April 18 to June 20 because of COVID-19. It was a crushing financial blow for shops that depend on that one-day sales boom. Luckily for Vertigo, Baker said his lean business model is helping his shop weather the COVID-19 storm. “We are in good shape,” he said. “Our tale is a good tale, and a part of it is because we’ve always run a Visit www.mibiz.com

fairly tight staff and rent is reasonable. We keep our overhead low.” “It’s just [employee] Brandon Hill and I doing mail orders,” he added. “No Paycheck Protection Program, no loans and our rent is being paid on time. We have rent covered through June at this point and utilities are covered. We have very little debt, that’s always been our thing.” As for the future, Baker said his retail shop is proceeding with caution. “We should hopefully be able to come out of this sometime in June, fairly unscathed,” he said. “Although, having said all of that, we’re still paying rent and utilities, so every month we are still probably going back slightly financially. We’re not making a ton of money on Discogs right now. We’re listing things to move, pricing to sell.” With stacks of sanitized mail orders being boxed up and shipped out of his storefront, Baker said one hurdle has been the U.S. Post Office. “It’s been terrible in Michigan specifically,” Baker said, recounting an incident involving a customer order. “About two weeks back, it was a busy day, so instead of driving the record to them, I mailed it. It was right off 28th Street in Grand Rapids.

Vertigo Music has been selling records via mail and delivery. MIBIZ PHOTO: RICH TUPICA

That was 12 days ago. He’s still yet to receive that package. It’s now sitting in Pittsburgh. I don’t know why mail routing in Grand Rapids sent something to Pittsburgh only to ship it back to Grand Rapids again — that makes absolutely no sense. You and I would be out of business if we did that.” Once the doors reopen to the public, Baker said he plans to create a safe shopping environment for his loyal customers — some of whom have been digging through the crates at Vertigo since it opened 20 years ago. “We will be taking some precautionary measures, perhaps handing out gloves and using a lot of sanitizer,” Baker said. “We might have some traffic flow procedures, too. We’ll work on some directional things. Our aisles are fairly narrow, so there are bound to be some interactions, so maybe we will (limit) the amount of people in there at one time. We don’t know yet.”

Bill Welter, founder of Journeyman Distillery. COURTESY PHOTO

BE V ER AGE

Journeyman Distillery focuses on survival By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com THREE OAKS — Other than the early days of launching Journeyman Distillery LLC, founder Bill Welter cannot recall a more difficult business environment than the present. For nearly two months, the Three Oaks-based craft distillery has had to close its tasting room and restaurant in compliance with social distancing guidelines. While the craft distillery distributes its portfolio of spirits to 19 states, the nationwide closure of bars and restaurants to combat the spread of COVID-19 has eliminated what’s typically 50 percent of Journeyman’s revenues. Meanwhile, sales to consumers have trended toward larger format bottles and familiar value brands, and not craft products, leading to an overall “substantial decrease in distribution” revenue, Welter said. The current situation has “certainly stunted” Journeyman’s growth plans, which had included a second location in Valparaiso, Ind., where the company planned to redevelop an old industrial facility into a pilot distillery, restaurant and brewery, as well as a possible theater and hotel. “We were exploring the idea of opening a second location in Valparaiso, but now we need to think about how is it that we get reopened and survive in the new environment,” Welter said. “We’ve gone from looking at a second location to survival mode.” In the early days of the shutdown, Journeyman repurposed its operations to make hand sanitizer and was one of the first to market with a Michiganmade product. While demand was brisk initially, as more local companies started to make sanitizer and as normal suppliers began to replenish their stocks of product, “we saw the demand drop considerably.” “We looked at hand sanitizer as a tourniquet on a gaping wound, and the tourniquet appears to have loosened up as the sanitizer market is getting filled

by major corporations,” Welter said, acknowledging that he was grateful for the opportunity to keep some people employed in making sanitizer products. Manufacturing sanitizer also allowed the company to contribute to “a higher purpose” in helping out frontline health care workers, but Welter said the company has since transitioned back into making spirits. “We’re taking a risk that we’ll be allowed to open up at some time in the near future and that things will return to some level of normalcy — or whatever that looks like,” he said. “The hardest thing in all this, we’re preparing to reopen the business but in a lot of ways we don’t know when and how. It’s like sitting down and playing chess but we don’t know the rules. Because we don’t know the rules, we don’t know what the first move is. Establishing rules for hospitality and reopening would make our lives easier.” He also worries what capacity reductions for restaurants could mean for the industry, given its “notoriously low profit margins, and that’s when they’re at 100-percent capacity and things are running well.” Additionally, he said existing relief programs such as the U.S. Small Business Administration’s Paycheck Protection Plan “are not beneficial to the restaurant industry,” particularly in Michigan because companies do not yet know when they will be able to reopen and rehire people and qualify for loan forgiveness. “Our family was in the banking business for 40 years, and the thing you don’t need when you have no revenue coming in is more debt,” Welter said. Despite the challenging environment, Welter said he’s “actually optimistic” for a quick economic recovery once people can get back to work and companies can reopen. “What we’re experiencing is all driven by response to the coronavirus, and I think it’s very possible this could be a short-term response to the coronavirus and then we’ll see it return to normal by the end of the year,” he said. “I’m not really very political, but I think the country needs to get on the same page, put politics aside and do what’s best for the people of the nation and for small businesses. We need to work toward getting things open and getting back to people having a positive work experience, positive social interaction again.” MiBiz / MAY 11, 2020

COPING WITH COVID-19: SPECIAL REPORT T ECHNOLOGY

For tech firm Carnevale ID, reacting to unpredictable change is business as usual By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com GRAND RAPIDS — Technology firms like Carnevale ID Inc. are designed to react quickly to changes and create new innovations for clients. Throughout the user experience designer and software developer’s nearly 20-year history, those changes have mostly stemmed from advances in technology platforms that bring new tools to market. The current moment of change may have been brought on by the coronavirus, but it’s still having a profound influence on how companies in a range of industries are thinking about leveraging technology in new ways, said founder Michael Carnevale. “And they’re not responding to it from a shortterm quarantine perspective,” Carnevale said. “They’re responding to it from a longer term (perspective that) ‘life is going to change in these subtle ways, and our interactions between customers and businesses will be changing in these subtle ways.’

“These are opportunities that companies have to be ready for and to be serving up that type of interaction that the customers are going to want with businesses. It’s going to be different.” For example, he cites the ability to use augmented reality to allow people to experience products from the comfort and safety of their homes “without having to go to a showroom to be able to understand it.” “We have been delivering these types of advanced digital experiences for years now, and I think we’re just going to see more of that,” he said. Carnevale said the pandemic seems to have changed clients’ priorities. While some of Carnevale ID’s clients hit pause on their projects, others used the disruption as a catalyst to push forward. “The fact that we create digital experiences for businesses and their consumers, that seems to be a space that represents a lot of value to our clients, especially right now, because so many of the customer interactions are going to be happening digitally,” he said.

Michael Carnevale, founder of Carnevale ID. MIBIZ FILE PHOTO: JEFF HAGE

The social distancing guidelines related to the pandemic also have changed how the team at Carnevale ID collaborates with one another. Gathering in a conference room to brainstorm ideas has been supplanted by virtual collaboration leveraging whiteboard technology in the Zoom video conferencing software or web-based software tools including Miro and Loom. Carnevale expects the ubiquity and widespread use of those tools to further the push for decentralized business operations that support remote work.

EQUIPMEN T

RE TA IL

‘Chopped at the knees,’ Coldbreak makes pivot to direct to consumer sales

Schuler Books leans on e-commerce, curbside orders

By JOE BOOMGAARD | MiBiz

By ANDY BALASKOVITZ | MiBiz

jboomgaard@mibiz.com GRAND RAPIDS — Equipment maker Coldbreak knew it would face a major challenge when the outbreak of COVID-19 led to the shutdown of bars and restaurants and events across the country. The company’s signature jockey box is a portable tool craft breweries use to serve draft beer at large gatherings such as beer festivals. Not only were the beer festivals themselves canceled in the wake of COVID-19, but also the viability of the craft beer industry has been called into question. In a survey last month, Boulder, Colo.-based Brewers Association found nearly 60 percent of craft brewers could sustain operations for less than three months if the current shutdown conditions persist. Coldbreak had doubled sales in the last couple of years and was projected to nearly double again in 2020. After long functioning with a small operation, the company scaled up last year to seven employees. Then the coronavirus hit and “that all came to a screeching halt,” said Boyd Culver, who co-founded Coldbreak with Chris Musil. The company made the tough choice to lay off its staff, regroup and prepare for what was coming next. “It wasn’t just a matter of cutting staff. These people are my friends,” Culver said. “On a personal level, that’s the lowest I’ve ever felt; I’ve never gone through depression like that. The staff that we had was just amazing. Obviously, it wasn’t our fault that this happened, and they understood that, but it’s still painful to have to do that. They’re all such great people. “When it comes to our customers, it’s the same thing. They’re all our friends, and we just want to see everybody do well. Obviously, we want them to come back, from a business standpoint, but we want them to be successful because they’re our friends.” The pandemic outbreak also wreaked havoc on Coldbreak’s business. Jockey box sales were projected to grow 50 percent year-over-year in April, but the month’s sales ended up being down 80 percent from a year ago.

MAY 11, 2020 / MiBiz

“The more traditional generations have probably been resistant to it because they see the value of everybody being in the same room and getting stuff done together. I think what’s happening is they’re now seeing that this works as well, and in a lot of cases, even more effectively with the decentralization,” he said. “They’re seeing that their team is being just as productive, and so I think there’s going to be less resistance to remote work within corporate and agency environments.” In the short term, Carnevale thinks the tech industry could experience a slow down in the summer, but he’s confident that his firm is structured to react and deal with the unknowns. “Technology is already pretty unpredictable; the rate of change is so fast,” Carnevale said. “From a business structural standpoint, we’ve always had to respond to that level of change. The situation we’re in now is just another form of change. It’s a change that’s not coming from Silicon Valley, per se. It’s coming from another source, but we’re responding to it in the same way. “That whole mindset is why our customers like working with us. You can’t support clients in a state of rapid change and give them the services they need and the solutions they need if you’re not adapting and changing faster even than they are.”

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Boyd Culver and Chris Musil, founders of Coldbreak. COURTESY PHOTO “We’ll be chopped at the knees, but we’ll be OK. We’ll survive this,” Culver said. Coldbreak secured a Paycheck Protection Program loan and was able to hire back a couple of staff members. It’s mostly Culver and Musil working on the floor these days, assembling jockey boxes and other products, including homebrewing equipment, which is where the company got its start. Sales to homebrewing shops have actually held up during the pandemic, and Coldbreak plans to expand its offerings to hobbyist brewers. The company also is going to “pivot our focus a little bit and go more direct to the consumer,” Culver said. That includes an educational campaign via YouTube videos to show people what a jockey box is and how they could use it for smaller gatherings like house parties and weddings. The company also was in the process of getting collegiately licensed to make branded jockey boxes for tailgating parties. “A lot of beer drinkers don’t even know what a jockey box is, and rightfully so. They drank out of them at beer festivals and they didn’t know it,” Culver said. “But we have some products that are more suitable for the home. We feel that’s going to be the more popular thing.” From a personal level, Culver said he misses meeting up with his friends over a beer at a brewery or a bar and having random conversations with new people. Even so, he’s in no rush to risk his family’s health to do so right now. “I often compare it to a shark attack,” he said. “People do go back into the ocean eventually, but it takes them a long time to get comfortable.”

GRAND RAPIDS — In a matter of months, the coronavirus pandemic transformed a Grand Rapids-based independent bookseller’s business model. Schuler Books Inc.’s 28th Street store. Following Michigan’s stay-at-home MIBIZ PHOTO: ANDY BALASKOVITZ order in late March, Schuler Books Inc. “immediately focused our marketing intensely” on social media to drive online sales, owner Bill Fehsenfeld told MiBiz. In April, Schuler Books did 23 times as many online sales compared to April 2019, and double its typical annual online business. Fehsenfeld, who opened the first Schuler Books in Grand Rapids with wife Cecile in 1982, said the company had to redesign the way it managed online ordering. “It totally changed our process to make it much more efficient,” he said. “We never could have handled that kind of internet volume.” Typically, online orders through Schuler Books are fulfilled by Ingram Content Group, a Tennessee-based national book wholesaler. With the increased volume, Schuler hired back more workers to fulfill orders directly off its shelves. Now online orders are filled in both Michigan and Tennessee. On April 24, Gov. Gretchen Whitmer issued an executive order allowing non-essential retail stores to fulfill curbside and delivery orders. With these and online orders, Fehsenfeld said more than 30 employees are back to work at the company’s three stores in Grand Rapids, Okemos and Ann Arbor. “People were thrilled when curbside opened up,” Fehsenfeld said. In the early stages of the pandemic, Schuler Books laid off a “large portion” of its staff but has kept them on the company’s health insurance plan while on leave. The closure of dine-in restaurants also “really affected us,” Fehsenfeld said. Schuler Books’ stores include full-menu Chapbook Cafes, which didn’t translate well to take-out service, he added. Across the U.S., independent bookstores have been sent to the brink after a post-Great Recession renaissance a decade ago. They’ve had to pivot to online sales to stay afloat, or turn to crowdfunding in the case of famous San Francisco shop City Lights. Fehsenfeld said the effects are being felt differently across indie bookstores. Schuler Books, for example, exceed 20,000 square feet and can offer a range of products beyond books. Puzzles have been a huge seller lately, he said. As well, Schuler Books was in a “good position” with no debt prior to the pandemic, and also qualified for a federal Paycheck Protection Loan in the first round of funding, Fehsenfeld said. However, he did note the irony of the PPP program in having to use most of the funds for payroll to have the loan qualify for forgiveness, even though the stores couldn’t open. His “biggest fear” moving forward is a second wave of COVID-19 coming in the fall and going into the holiday season. “It would be a disaster,” he said. Overall, Fehsenfeld says his industry continues to benefit from a loyal customer base. “The advantage we have in our business is there’s a place in people’s heart for their local independent bookstores,” he said. “There’s a lot of support from our customers doing everything you can to keep the business going.” Visit www.mibiz.com

CONS T RUC T ION

Honor Construction CEO says worksite guidelines would spur confidence, economic recovery By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com GRAND RAPIDS — The construction industry operates within a system of safety guidelines and rules intended to ensure that workers remain safe and that projects get built to the appropriate standards. Brad Laackman, president and CEO of Grand Rapids-based Honor Construction, would like to see similar regulatory guidance when it comes to doing business in the coronavirus era. Not only would guidance around proper coronavirus mitigation measures help keep construction job sites safe, but also it would help people regain confidence to restart the economy, he said. In the absence of protocols, proper guidance and widespread virus testing, Laackman believes clients will begin “tip-toeing back into capital construction.” “I’m really looking forward to some structure there or some guidelines and usually this would be OSHA,” Laackman said in a late-April interview. “OSHA hasn’t come out with anything right now for COVID to say, ‘This is what we recommend.’ I want some more guidelines to be able to follow and to empower my subcontractors with. “In my mind — and maybe it’s the military in me — send me the rules and I will adhere to the rules. I don’t want to make up my own rules. That never ends well for anybody.” Laackman likens the situation to the development of safety protocols decades ago for dealing with asbestos. “Some of us in the construction industry looked at that and said, ‘That’s a pain in the ass,’ but it still was something. I’d rather say that’s a pain in the ass or it’s overkill and get that kind of response than nothing at all,” he said. “If you came out with that, that opens up confidence for owners, subcontractors and general contractors like myself. It clears the playing field. And yes, maybe construction will take 10 or 15 percent longer because we’ve got to do other stuff — or maybe there’s more cost to construction because now everybody’s got to buy a lot of PPE — but at least there’s something.” Honor Construction was coming off its best year ever in 2019 with a project backlog stretching into 2021. The company also started 2020 with its highest staffing level ever. All signs pointed toward a breakout year, Laackman said.

Brad Laackman, President and CEO of Honor Construction. COURTESY PHOTO

Then the coronavirus pandemic hit and “everything just screeched to a halt for clients’ confidence in the economy.” None of the company’s projects have been canceled thus far, according to Laackman, who noted that Honor Construction remained busy during the shutdown because it was working on some projects deemed essential under the Michigan executive order. After talking with his staff, he came to the conclusion that the shutdown of the construction industry was “really, really appropriate” to ensure workers’ safety. For the essential projects that remained in process during the shutdown, team communication took on heightened importance as clients and subcontractors learned to deal with digital tools like Zoom and GoToMeeting “I’ve always run a very flexible company about people working remotely and working from home, or working wherever, as long as they hit their job goals,” Laackman said. “That really came in handy when everybody ended up doing that here at our company. It wasn’t a new thing. We’re a mobile company. For companies that didn’t have that before, I think that was a big learning curve.” The other wild card, even for essential projects, came down to whether municipalities remained open for inspections and permits “and all those things that run alongside a project.” Laackman praised the city of Grand Rapids for its responsiveness, but said the experience was lacking with other unnamed municipalities. He also called out West Michigan subcontractors, many of whom were working at less than full staffing levels, for stepping up to tackle essential projects in health care. “It was a great show of West Michigan teamwork that if there was something essential, I didn’t hear a ‘no,’ I just heard, ‘It might take a little longer,’” he said.

A RCHI T EC T URE

Cornerstone Architects brushes up marketing as projects hit pause By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com GRAND RAPIDS — Over the last few years, Cornerstone Architects Inc. PC has been riding the wave of business in the design and construction industry. Coming out of the last recession, the Grand Rapids-based firm, which also operates an office in Traverse City, set out on the “pretty logical” step to eliminate as much debt as possible to ensure the company could weather any future economic downturns. “We’re planners so we always plan for our clients, but it’s amazing how we neglected our own plans,” said Tom Nemitz, principal of Cornerstone Architects. “This is one of the instances where we did put it in place. We wanted to get a plan to not only eliminate debt but also try to get a little bit of cushion because we were anticipating a recession … and we’ve got great people and we want to hang on to them. “Now with the pandemic, despite our best efforts in planning, who could have seen that coming?” In the weeks after the COVID-19 pandemic hit, Cornerstone Architects had 60 percent of its active projects get placed on hold as clients tried to figure out what the crisis will mean for them and their finances. “None of them have evaporated, thank goodness, but the others have been put on Visit www.mibiz.com

hold pending financing. A couple of them are businesses so they’re waiting to see what transpires and that they’ll have enough money to pay their people,” Nemitz said, noting the situation is “negatively affecting the clients, but also our ability to conduct revenue.” Cornerstone Architects applied for and received a Paycheck Protection Program loan to help the firm weather the current loss of business. “Right now, we have cash flow but in two months is the great unknown, and that’s where I think that PPP funding will come into play and help us out quite a bit,” Nemitz said. “It just gives us a little bit more security if things don’t get going as quickly as we all want them to.” Work continues to move forward for projects that already secured financing, mostly for the firm’s municipal, K-12 and higher education clients. “Those are great projects to have because they need to really keep moving on them from a design standpoint, and so it benefits us,” Nemitz said. Looking ahead, Nemitz expects the design and construction industry to remain strong, at least in the short term, because of continued pent-up demand. If anything, the current blip could reset prices and get some clients off the sidelines. “A lot of our clients still have some pentup demand, and they’ve been waiting for the

Tom Nemitz, Principal of Cornerstone Architects Inc. COURTESY PHOTO right time because construction has been booming so much,” he said. “It’s been difficult for them to really pull the trigger on a number of their projects. A few of them had said, ‘Boy, we really need an adjustment in the economy so that we can afford to build.’ Be careful what you wish for.” Nemitz cautioned that any return to normalcy will also result in some delays for those complicated projects that have been put on hold as crews re-engage and get back up to speed. In the meantime, Cornerstone Architects has been “polishing up on our marketing efforts” to stay in touch with current and prospective clients and continue to fill the project pipeline. “We’ve been fortunate enough not to have to do full-fledged marketing efforts through the last few years, but this is a great time to catch up on some of our marketing,” Nemitz said.

Allan O’Shea, President of CBS Solar. COURTESY PHOTO

ENERGY

Copemish solar energy installer gets back on rooftops By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com COPEMISH — On the afternoon of May 4, three days before an executive order by Gov. Gretchen Whitmer allowed construction to resume statewide, Allan O’Shea was “ready to go to the party.” O’Shea, the president and sales director of CBS Solar in Copemish, was readying his company and workers to resume installing rooftop and ground-mounted solar panels on residential properties. While energy has been considered critical infrastructure during Michigan’s stay-home order, much of the work involving contact with customers — including assessments in or around homes for solar and energy efficiency — was put on hold. The stoppage came after a relatively mild January and February, when “we were going great guns,” O’Shea said. However, O’Shea is coming back in high gear. Although some projects are resuming that were put on hold, O’Shea was actively marketing during the roughly six-week shutdown, gaining more customers. The active 10 to 15 jobs are lined up from Petoskey to Mason County, he said. “It was very nerve wracking. We didn’t know how long this was going to go,” O’Shea said. “But we kept advertising and talking to customers.” O’Shea developed a set of guidelines for employees based on Whitmer’s executive order opening the construction industry and his own research. Workers will maintain social distancing at job sites and will take multiple company vehicles to the locations. O’Shea is also offering workers a per diem if they feel safer traveling in their own vehicle and bringing their own food. Customers are contacted ahead of time about whether they’re comfortable with crews being there. The safety precautions are likely to stay in place at least through the year. “Even if there is a vaccine developed, I’m not going to change our procedures because the damage certainly hurts our cash flow and ability to grow as a company,” he said. “And here we are in the middle of it.” While broader concerns remain for the renewable energy industry post-coronavirus, particularly for utilityscale renewable energy projects, O’Shea said he’s been assured his supply chain won’t face major disruptions. Delays may happen as other contractors — such as electricians — face a backlog of work after also returning on May 7. Meanwhile, CBS Solar qualified for a roughly $50,000 Paycheck Protection Program loan during the first round. O’Shea said it’s unlikely the company will be able to comply with all of the provisions, like using 75 percent of it to cover payroll, that allow the loan to be forgivable. “It wasn’t going to make or break us, but if we didn’t get it, it could have hurt us really bad,” he said. “I feel for those who haven’t got it, especially with the way they’re acting in Washington now.” With new safety guidelines and a steady log of projects, CBS Solar appears to have emerged from the first big wave of COVID-19 in Michigan. “We’re all fired up and ready to go,” O’Shea said. MiBiz / MAY 11, 2020

COPING WITH COVID-19: SPECIAL REPORT DISPENSA RY

Park Place Provisionary adapts model to serve customers curbside By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com MUSKEGON — The line was 15 cars long on a recent Thursday evening, with employees shuffling between vehicles and the retail shop to scan IDs and run products out to patrons. Such is the new normal for Park Place Provisionary, one of two dispensaries in Muskegon serving both medical and recreational cannabis customers. Gov. Gretchen Whitmer’s original stay-athome order on March 24 permitted dispensaries to remain open as an essential business, although they were required to establish curbside pick-ups or home delivery. The Marijuana Regulatory Agency had previously planned to expedite requests for home delivery services. Tracy Powers, vice president for AgriMed LLC, the parent company of Park Place Provisionary and Exit 9 Provisionary in Crockery Township, said operational changes were already underway before Whitmer’s order. Park Place’s steady “high volume of customers” in a relatively small space “was really starting to impact our employees and their feelings of

well-being,” Powers said. Park Place has around 20 employees who sort and package products, answer phone calls and manage operations. Since then, Park Place has set up a drive-thru operation at its location just east of Seaway Drive in Muskegon’s designated marijuana overlay district. The company asks customers to pre-order online or by phone. Drivers pull into the store’s parking lot, an employee (wearing a protective face mask) scans customers’ IDs, and another employee brings out a paper bag that was filled inside the building. A cash transaction takes place when the bag is delivered. The Park Place system also focuses on efficiency: The company turned around 15 carloads of customers in less than five minutes. Overall, Powers says “business hasn’t really changed, other than the fact we’re doing it outdoors.” The volume of customers has remained steady, perhaps increasing slightly when federal stimulus checks started arriving, Powers said. The vast majority of purchases — 80 to 90 percent — are for recreational sales. Powers added that customers also are buying larger quantities at a time, likely to avoid more

Muskegon’s Park Place Provisionary implemented outdoor curbside pick-ups for marijuana customers. MIBIZ PHOTO: KRISTI KORTMAN frequent trips. She declined to give sales figures. “People will come and spend a big chunk of change and walk out with a pretty good sized bag of product,” she said. Although the coronavirus hasn’t disrupted Michigan’s cannabis supply chain, state policies have, according to Powers. In early April, the Marijuana Regulatory Agency announced that caregivers would no longer be able to supply recreational products for retail stores. The policy was expected to stay in place until September to

DE ALERSHIP

RE AL E S TAT E

Sharpe Cars makes shift to online vehicle sales

Grand River Realty eager to resume inperson work amid pent-up demand

By JESSICA YOUNG | MiBiz

jyoung@mibiz.com

GRAND RAPIDS — Coming off of strong sales in 2019, executives at Sharpe Cars had plans to reinvest capital into the company’s showrooms and facilities. Then came the outbreak of COVID-19, which upended those plans. “All of those projects have been wiped off the table right now,” said George Sharpe Jr., general manager of Sharpe Cars. “Now, we’re in kind of a crisis protection mode for the business just to sustain through this time. It’s the preservation of capital, not knowing how long this will go on for.” To protect staff and shoppers from the highly contagious virus, the showrooms at Sharpe Cars have been closed to the public since mid-March, repair and maintenance staff has transitioned to a split schedule and all sales efforts have been pushed online. “If I could only timestamp it and look at the progression of my mindset throughout this time, it took a while to adapt to the severity of it,” Sharpe said. After a complete stop in sales in March, Sharpe Cars — which holds franchises for BMW, Land Rover, Jaguar and Mini — sold half the number of cars in April as it would have without the disruption from the pandemic and efforts to mitigate the outbreak.

GRAND RAPIDS — Real estate workers in West Michigan returned to in-person activities on May 7 after being halted for six weeks because of the COVID-19 outbreak. From March 15 to April 15, housing sales in the region and the surrounding area were down 40 percent from the same time last year, according to the Grand Rapids-based Greater Regional Alliance of Realtors. Trapped in his home office, Grand River Realty LLC owner Pete Bruinsma said the drop felt much more dramatic. Moreover, the deals that did manage to go through were likely already in process since February or March. In a timeframe when he would Bruinsma normally sell about 10 properties, Bruinsma said he closed on just one vacant house, a sale that was in motion before the shutdown. Under the state’s stay-at-home home order and the classification of real estate agents as non-essential workers, realtors were forbidden from conducting business outside of their own homes from late-March until last week. Some relied on photos and virtual tours to show properties but most activities were curbed, according to Bruinsma, who said Michigan is the 49th state in the nation to allow real estate agents to resume showing properties with social distancing, including gloves and face masks. “I started keeping a list of states who allow in-person real estate activity and quit when the list got too long,” Bruinsma said. Real estate open houses are still prohibited, but workers can now enter homes and conduct in-person meetings to develop a new listing.

MAY 11, 2020 / MiBiz

Crews at Sharpe Cars in Grand Rapids are taking extra measures to disinfect vehicles. COURTESY PHOTO “We had the functionality (online) before, but COVID has forced our behaviors as a dealership to change,” Sharpe said. “By no means was it normal, but I’m pleased we went from where we were, from zero sales for two to three weeks, to some sales, to now we’re up to, in a month’s time, close to half the business and sales. I’m grateful for that.” The 50 percent year-overyear drop in sales at Sharpe Cars aligns with industry-wide vehicle sales forecasts. Complete sales results for the month of April will not be publicly released until the second quarter concludes in June, but car shopping experts at Edmunds estimate 633,260 new cars and trucks were sold last month. That’s a 52.5-percent decrease from April 2019 and a 36.6-percent drop from March 2020. At the four Sharpe Cars stores, more buyers than Sharpe expected are following through on pre-orders, which automakers have still been able to supply despite global manufacturing shutdowns and disruptions. “At the early onset of this, I anticipated more people backing out, but there was just a

couple,” Sharpe said. “A lot of people still continue to take delivery of what they were planning.” Into the summer and perhaps for the rest of 2020, Sharpe expects online transactions to continue to carve out a larger share of total auto sales, even though the platform has its limitations. “There is still a human interaction that takes place. It begins online, but you can’t click a button and pay for it,” Sharpe said, adding that some documents need to go “back and forth” and the state requires a “wet signature” on a few critical vehicle sales agreements. For now, the sales staff at Sharpe Cars is collecting those signatures upon delivery to customers’ homes or designated delivery locations. “Until the vaccine is found, we’re going to be operating in these safe environments for some time,” Sharpe said. “I think it’s a matter of figuring out how to conduct business in any industry in a safe way to keep the economy going and keep people working to be able to increase their spending and consumer confidence.”

allow for newly licensed growing operations to supply stores. The change significantly affected supply availability — particularly for distillate used to make edibles and vape cartridges — and sent prices upward. Powers says it could take at least a few months for supplies to catch back up with demand. “I’m sure by fall we’ll be rocking and rolling again,” she said. “The next few months will be tough on the recreational side. There’s been a lot of demand, I can attest to that.”

As well, clients can enter a home to view the property or to sign necessary documents. Although housing activity in West Michigan had been effectively frozen during the state’s stay-at-home executive order, the markets are not expected to exit the crisis chilled, according to Bruinsma. “I highly anticipate the market picking up right where it left off before the shutdown,” he said. Spring is a critical time for real estate activity, especially in West Michigan where people avoid moving during the cold and snowy winter months, he added. “All of that pent-up demand over the winter kicks in in the spring and it kind of defines the year,” Bruinsma said. The housing market in the Grand Rapids metro area has consistently ranked among the “hottest” in the country during the past several years. In 2019, houses in the region were averaging just 10 days on the market with a median listing price of $178,050, up 11.3 percent from the year before, according to data from Realtor.com. After a normal lull for the holidays, market activity had already started to surge this February, according to Bruinsma, who said the spring sales spike has begun earlier and earlier each year. “It’s crazy. Right at the beginning of the year, when people started coming back out, I saw people bid way too much for stuff because there was just no supply,” Bruinsma said, noting that any suppressed inventory from the past several weeks will not fill the gap. “People have such high confidence in the value of real estate right now, especially in Grand Rapids. It’s kind of an anomaly because even if they think they’re not going to get their full value or they’re going to have to compromise on value at the moment, they’re going to maybe delay on listing it.” Those decisions will keep competition high in the area in the short term, but seasoned realtors are still wary of the effect a recession spawning from the COVID-19 crisis and widespread unemployment could have on their businesses. “There are no precedents for something like this,” Bruinsma said. “Yet, despite it being an entirely different type of situation, we have the 2007-2009 housing crisis in close memory and it affects perception.” Visit www.mibiz.com

RE S TAUR A N T

HO SPI TALI T Y

Topshelf in Muskegon sticks to pizza-subs-beer formula

Suburban Inns ‘hanging on by our fingertips’

By MARLA MILLER | MiBiz mmiller@mibiz.com

By JESSICA YOUNG | MiBiz

MUSKEGON — As one of the only restaurants open in downtown Muskegon, Topshelf Liquor Bar & Pizza owner Jim Noel is sticking to a formula he knows well. The restaurant’s pizza and sub sales are enough to maintain a profit while several craft beers on tap are available to-go in howlers and growlers. “It’s what I have done for the last 30 years, so it was nothing new to me,” Noel said. “It was a no-brainer doing the carryout and delivery aspect of it because that is what my background is.” His other Topshelf location at 2155 E. Apple Ave. also hasn’t missed a beat due to COVID-19, and continues to do steady carryout and delivery business. “Business is very good on Apple,” he said. “Downtown is not as good because it’s mainly eat-in, but we have enough business to warrant staying open. You have certain ongoing expenses whether you are open or closed.” Noel also owns two sit-down restaurants that are new to downtown Muskegon: Capone’s Speakeasy & Pizzeria and 794 Kitchen & Bar. Both have shut down since Gov. Gretchen Whitmer’s executive order closed restaurants and bars on March 16. Capone’s, a dimly lit yet elegant sit-down restaurant that evokes the Prohibition Era, opened in November. The 794 sports bar opened in July and serves mostly sandwiches, Tex-Mex, chicken and waffles, plus a wide variety of craft beer. Noel said he may reopen 794 Kitchen & Bar for carryout service, depending on how long restaurants are ordered to remain closed for dine-in customers. “Sure, I am concerned from the standpoint of when they are going to be open to full business,” he said. “It’s not necessarily the ongoing costs that trouble me. The loss of income is the biggest thing, the lost opportunities.” Noel was approved for a Paycheck Protection Program loan in the first wave of applications, and noted his bank, Huntington Bank, was helpful through the process.

jyoung@mibiz.com

Topshelf Liquor Bar & Pizza in downtown Muskegon has remained open for carryout and delivery. MIBIZ PHOTO: MARLA MILLER A restaurateur for 30 years, Noel has kept most of his kitchen staff and delivery drivers employed but laid off his bar and serving staff. Most of them have qualified for unemployment, he said. He also increased the pay for those who stayed on and worries it may be difficult to find employees with federal and state unemployment benefits that max out at $962 a week in Michigan. Early on, employees tried delivery at the downtown store, but there wasn’t enough business to make it worthwhile. During the day shift, business at Topshelf has been “holding up,” and the city’s police and fire departments and other businesses have placed large orders, said Amber Crow, a cook who also helps out with social media. “With takeout, we have been staying afloat fairly well,” Crow said. “We have a great loyal customer base.” The pizza parlor has signs posted limiting the number of people in the store at one time. Other safety measures include available hand sanitizer for customers and gloves and masks for employees. “We have gloves on all the time,” Crow said. “We’re trying to keep everyone safe with all the precautions we can.” Also in downtown Muskegon, Nipote’s Italian Kitchen is another new restaurant that has stayed open for takeout. Owners Jeff and Shawn Church spent months readying the restaurant made from two shipping containers at 98 W. Clay Ave. It opened in July 2019, and chef Jeff Church is now manning the kitchen solo, offering online ordering and a variety of meals for pick-up and family-size “take and bake” dishes.

RE TA IL

Local Epicurean encouraged by response to e-commerce shift By JESSICA YOUNG | MiBiz jyoung@mibiz.com GRAND RAPIDS — Last year was “the best year ever” at Local Epicurean LLC, a maker of handmade pasta, sauces and specialty food products. Although the company has had some success with online sales and an outpouring of support from customers in the wake of the crisis caused by COVID-19, this year’s sales outlook is not nearly as bright. “Everything went south pretty quick and the stay-at-home order really changed our paradigm entirely,” said Steve Bowyer, one of the partners in the company. “People, rightly so, are taking the virus very seriously and it’s the only way we’re going to get this behind us.” In response to the dangers of the global pandemic, Local Epicurean canceled its pastamaking classes and closed its retail space in mid-March, despite the store’s designation as an essential business by the state of Michigan. “As difficult as the decision was to make, it really was a no-brainer,” Bowyer said. “We decided that we would close the storefront operation down temporarily because we felt it was probably safer for our customers and the general public to maybe make just one stop at a Sam’s Club or at a Meijer or D&W versus five stops in small specialty food stores. I really felt that we just had the responsibility to do that and, in retrospect, I’m very glad we did.” People concerned about the survival of Local Epicurean’s small storefront in the Visit www.mibiz.com

Local Epicurean has started selling more products online in the wake of the COVID-19 pandemic. COURTESY PHOTO Eastown neighborhood of Grand Rapids instantly began reaching out to the staff, according to Bowyer. “There was an immediate response from our guests really just wondering what we were doing, how we were going to handle it, and if it was OK to stop in,” Bowyer said. The company pivoted the bulk of its business to e-commerce, where it began listing more products along with new multi-item “pantry boxes” and ready-to-bake meals. Unprompted by an official call-to-action or any direct marketing from Local Epicurean, many customers directed financial support to the business in other ways, too. “What’s really encouraging to us is the number of people that are buying gift cards, the number of people that are buying future cooking classes, and I bet a third of our online orders are gifts from someone to someone else,” Bowyer said. Last week, the Local Epicurean storefront reopened for weekend business with limited hours.

“I think with the proper precautions, now that everyone is wearing gloves and masks and distancing, I feel better for everyone’s safety,” Bowyer said, adding that the business will slowly transition back into routine operations over the next couple of months. “I’m sure that once we fully reopen, we’ll get back to business as usual. It’s going to take a while and I think merchants need to understand that.” Still, Bowyer is apprehensive about the state of the economy and the long-term effects that rampant unemployment might have on consumer confidence. Local Epicurean is “certainly not an everyday food store” and as household incomes drop, customers might be less likely to seek out the company’s “foodie” products, he said. “What is the disposable income going to look like after this? With so many unemployed people, it’s certainly on the top of our mind,” he said. “I think that we’re going to need to be open for a while to understand that and make adjustments where we can and where it’s necessary.”

HUDSONVILLE — Nearly all of Suburban Inns Inc.’s more than 1,000 hotel rooms in West Michigan are sitting empty. Faced with that situation, the company is in “survival mode,” according to Bill Lucas, vice president of hotel operations at the Hudsonville-based company. “It’s not even a drop in the bucket: The faucet turned off; it’s basically just dripping,” Lucas said. All seven of Suburban Inns’ hotels in the greater Grand Rapids and Holland areas are functioning at between 6-12 percent occupancy. “To put that in perspective, at the Embassy Suites (in downtown Grand Rapids), you’re talking a 250room hotel that’s selling anywhere between nine to 15 rooms a night,” Lucas said. “To say we’re hanging on by our fingertips is just that.” The company completely closed its Holiday Inn of Midland because of the hotel’s dependency on global business travelers to The Dow Chemical Co., he added. Global travel restrictions and travel bans related to the outbreak of COVID-19 started affecting business at Suburban Inns’ properties in January. Ensuing bans on group gatherings and stay-at-home orders Lucas escalated the crisis and affected all facets of the company, including the company’s Big E’s Sports Grill and Sharkee’s Bar and Grill restaurants. “First, we watched Fortune 500 companies, the bigger name-brand companies, ban travel. Around mid-February, then the local companies started really pulling back,” Lucas said. “From there, it became the leisure travelers, and then it just fell apart.” Spring and summer festivals and concerts were canceled. Banquet and conference room reservations were abandoned. “The weddings, the bridal showers, the baby showers, the award ceremonies — all of that just disappeared,” Lucas said. In response, Suburban Inns laid off 90 percent of its workforce, although the company is still paying for employees’ health insurance with the help of the Paycheck Protection Program. “We fully expect to bring them back,” Lucas said. “At what pace will they be brought back? That is dictated by the business.” For now, the company’s properties — which operate as essential businesses — are working “off a skeleton crew” of mostly management and department heads, he said. The guests of the hotels are mostly frontline workers who are traveling to help staff hospitals and nursing homes, according to Lucas. They have little to no interaction with hotel staff. Linens are picked up and dropped off from the hallways, breakfast is grab-andgo, and guests enter with digital keys downloaded to their smartphones. “They might wave to us at the front desk, but then they go upstairs,” Lucas said. The buffets, pools, spas and gyms at the hotels were closed by state mandate, and Lucas is hesitant to predict when those amenities will be safely back in operation. “It’s a level playing field for everybody in the hotel business right now because none of that is open, none of that is available,” he said. “You take away that amenity from everybody, what do you have to offer?” Even when travel and hospitality business begins to resume some normalcy, amenities like buffet breakfasts might permanently wind up a relic of the past, he said. “You really don’t know what’s going to be next,” Lucas said. “In my opinion, a lot of people have been staying at home and missed a lot of vacations. Maybe they’ll want to get out and venture out again. When they do, their expectations are going to be pretty high. They’re going to want to visit somebody that’s clean and healthy and respecting what they’re desiring. We’re just trying to try to stay on top of that.” MiBiz / MAY 11, 2020

COPING WITH COVID-19: SPECIAL REPORT BE V ER AGE

Virus throws curveball just as Peat’s Cider opens Southwest Michigan taproom By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com Seven Steps Up in Spring Lake. COURTESY PHOTO

EN T ERTA INMEN T

Seven Steps Up worries about future of live concert venues By MARLA MILLER | MiBiz mmiller@mibiz.com SPRING LAKE — Gary and Michelle Hanks have spent the last nine years building a niche business and bringing a variety of singer-songwriters and rising musicians to Seven Steps Up. But COVID-19 has Gary Hanks worried it could all fall apart — permanently. Independent performance venues across the country were some of the first places to close and likely will be the last to reopen. On a good day, Hanks remains hopeful concerts scheduled this summer or rebooked for the fall will actually happen. On a bad day, he thinks the 2020 schedule is a goner. “We go from one extreme to the other, almost hourly,” he said. “We’re not managing it. We’re totally shut down. We really have nothing to sell other than the concerts we do.” The venue had a solid lineup of concerts scheduled this spring, but it has been closed since mid March after the governor’s first executive orders limiting group gatherings and closing nonessential businesses. Even as people adjust to a new way of life and the economy starts to reopen, the question remains: Will people want to gather in close quarters and listen to live music? Seven Steps Up is located in the former Spring Lake Masonic Temple, a renovated historic landmark that dates to 1919 and can comfortably seat up to 130 or so concertgoers. The venue offers concerts both in a listening room as well as clubstyle setting. However, Seven Steps Up was designed to be an intimate performance space, meaning social distancing rules or reduced occupancy limits would make it nearly impossible for the venue to turn a profit. “One of my guesses is they may let us reopen but with restrictions that don’t make it economically possible,” Hanks said. “We bring in national touring artists and they are not cheap.” Hanks said a 100-person limit would be viable if the venue doesn’t have to comply with the six-foot social distancing requirement. “Like probably every independent small venue, it’s packed tight to get those people in,” he said. “I tried to do an estimate. If we had to do six-foot separation and let couples sit next to each other, we could hold 44 people. I looked at the economics, and we would lose money.” Initially, artists and their agents started calling to postpone or reschedule shows planned for this spring. Most of them have committed to performing at a later date rather than cancel. “Logistically, it’s tough for everybody,” Hanks said. “They may be coming from anywhere in the country. They have to put together a string of shows. If only a couple venues are open, it doesn’t make sense for them to come.” Hanks recently joined the National Independent Venue Association, which is lobbying Congress for financial assistance for independent music venues. His wife, Michelle Hanks, works as a CPA, which is helping sustain the couple. Seven Steps Up did not apply for a Paycheck Protection Program loan, and although they closed the venue, there are ongoing expenses such as the mortgage, insurance, music licensing fees, liquor license, health department permits and building maintenance. Seven Steps Up tried hosting a couple of virtual concerts, including one featuring Ruth and Max Bloomquist, but there were some technical glitches. The owners invested in technology that can broadcast the concert on multiple channels simultaneously and continue to post live videos of artists on the venue’s social media channels. Gary Hanks said they have considered various reopening scenarios and could react quickly, but so many unknowns remain around artists’ and patrons’ safety. In addition, heavy restrictions on crowd size could force many venues to close or increase ticket prices. “I will say we have the world’s greatest fans and, in most cases, we haven’t given several thousands back to people asking for refunds,” he said. “The majority have said hang onto our money, we’ll use (the tickets) for the new date. Our No. 1 concern is that everyone be safe and stay alive, including us and our staff.”

MAY 11, 2020 / MiBiz

STEVENSVILLE — Peat’s Cider Social had been open for less than two weeks when co-founder Dan Peat began hearing about a highly infectious virus that was starting to affect various parts of the country. The company, Peat’s Original Cider, started nearly three years ago as a distribution-only craft cider maker at the Peat family’s 200-acre farm in Paw Paw. By launching Peat’s Cider Social, a 16,000-square-foot combination taproom and 16-lane bowling center, the company was creating a direct consumer connection that would allow it to stretch its legs and produce a range of ciders, not just what would sell at distribution accounts. When the new location opened in early March, Peat’s Cider had hired seven people to staff the new taproom. As the news of the coronavirus kept coming, the company put up a social media post about its sanitation practices to reassure its new customers that it was taking the situation seriously. “It was really incredible in probably 72-ish hours how quick it went from, ‘We might have to adjust our process a little bit,’ to ‘I think we need to close, guys,’” Peat said. “We’ve got the risk of being owners and this comes with the territory, so it’s up to us to figure it out.” Before the state mandates hit, Peat’s Cider Social shut down the bowling alley and closed the taproom except for to-go sales of cider, before ending even those limited customer interactions. “In our observation, if a lot of people aren’t taking it very seriously but we are, then we’re putting our staff at risk, or ourselves or our family,” Peat said. As well, Peat observed the irony of the situation. “We literally have social in the name of our taproom and social distancing is the name of the game, so that’s some bad luck,” he said. Peat “dusted off” a crisis response slide deck he had prepared years ago as a student at Michigan State University to guide the

M A RK E T ING

StudioOne Creative helps clients pivot during pandemic By MARK SANCHEZ | MiBiz msanchez@mibiz.com PAW PAW — When clients pivoted, so did Rene Rodriguez. In one instance, an industrial packaging maker in Bangor that serves the auto industry slowed when the pandemic hit, so the company retooled and shifted to design and produce face shields. Within four days, Rodriguez worked with Barber Packaging Co. to develop a website for the new p ro t e c t i ve p ro d ucts division to sell online. “We were able to come together and develop this website and they’re starting to fulfill orders,” said Rodriguez, a sole Rodriguez proprietor and owner of photography studio and graphics communications firm StudioOne Creative in Paw Paw. The move is just one example of how Rodriguez has been able to drum up some business during the pandemic, both for himself and clients.

Dan Peat, co-founder of Peat’s Original Cider. COURTESY PHOTO company through the wholly unfamiliar process. The company’s leadership team met with each employee to discuss best options and offer help in any way possible. The goal was simple, Peat said: “To treat people well so that they want to come back to us when this fog passes.” Another challenge in the shutdown for the young company hit on the production side of the business. Typically, fruit growers’ apple stocks dwindle in quantity and quality necessary for cider making by early spring. While the company had a couple of year’s worth of data to project distribution demand in normal times, it had no playbook for 2020 to estimate the demand at the new taproom until this fall’s crop becomes available. “That was already hard enough to plan for, then you throw in the mix that both us and our distribution accounts are going to be all out of whack over COVID,” Peat said. “I bought a lot of them and got the juice going; now I’m hoping that I’ve bought enough.” As the company got more information about the virus and proper procedures, it reopened for curbside sales. Peat said the leadership team constantly is monitoring best practices and the latest news about the virus to ensure the safety of staff and customers. “We want to be conscious that we can look ourselves in the mirror and say we did all the right stuff, which right now, I definitely feel that we did,” he said.

As many clients had to close because of the state’s stay-at-home order or lost business during the pandemic, StudioOne Creative has focused on helping some clients create a web presence and to “try to find other ways that they could pivot and continue to sell their services, if possible,” Rodriguez said. “I take great pleasure in helping so many businesses succeed, and it’s unfortunate and it’s very difficult when it’s limited to what we can do currently to help businesses during this pandemic,” he said. “We’re going to do the best we can. We’re shifting and we’re taking everything online, and we’re setting up so many online sales for clients and adding that capability to their website so they can continue to sell their services, gift cards or anything else because they need to continue to be viable.” Still, StudioOne Creative’s business has fallen off considerably. Revenues are down about 60 percent from this time a year ago. Like many small business owners, Rodriguez worries about what the future holds for his company and his clients. He counts among his clients a Paw Paw restaurant that had served 2,500 to 3,500 meals a week and employs 30 people. The restaurant has now been closed for weeks. “It’s really slowed down for me with the marketing services I provide for many small businesses in a variety of different industries,” Rodriguez said. “It’s very tough currently on many of us. We’re just concerned; we really don’t know what’s going to happen moving forward.” One difficulty during the pandemic comes from the simple connections to

people he’s gained by running a small business. A self-described “people person,” Rodriguez loves the “personal interaction with my clients” that’s now missing. He typically works on five to 10 projects a day for small businesses and nonprofit clients. “We just don’t have that currently,” said Rodriguez, who serves on the board of directors at the West Michigan Hispanic Chamber of Commerce. “It can be difficult and it can be at times depressing, to be very honest, because we just don’t have that human interaction that we’re used to.” Rodriguez has operated StudioOne Creative for 12 years. He’s a married father of two daughters, ages 10 and 12 years. His wife, Diana, is an educator in Van Buren County and has continued working during the pandemic. While times are tough right now as a small business owner, Rodriguez does remind himself: “That’s the role we chose.” “Sometimes, it can be feast or famine,” he said. “That’s the nature of working for yourself.” As a marketer, Rodriguez personally has sought to do what he can to help fellow small businesses in Paw Paw where he lives. “I go out and do curbside. If I can, I pull out the owner, I take a photo and I share it on social media and say, ‘Please consider this business as a business to get takeout because they need our help,’” he said. “The least we can do is try to support them during this time, and we do. We share it on social media as much as we can and hope to drive some business to them.” Visit www.mibiz.com

RE AL E S TAT E

Grand Rapids’ Waters Building ‘fortunate’ to avoid major disruptions By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com GRAND RAPIDS — The owners of the iconic Waters Building admit they’ve been “fortunate” in avoiding most adverse effects stemming from the COVID-19 pandemic. Ahead of the state-mandated stayat-home order and social distancing measures, the Waters Building was 94 percent occupied and current on all of its leases, “and essentially is so today,” said co-owner Bill Mast, who’s also president of Grand Rapids-based contractor Visser Brothers Inc. M a s t a n d c o - ow n e r M a r k Finkelstein, principal of Grand Rapidsbased Edmark Development Co., have been working on a case-by-case basis with affected clients, namely the building’s two foodservice tenants. Even the

Homewood Suites by Hilton hotel in the building has remained open, albeit at “significantly” decreased occupancy during the pandemic. “By and large, office tenants in the building and apartments are not largely affected,” Mast said. “With our rent roll, so far, we’ve been fortunate enough to be largely unaffected.” Finkelstein said 42 of the building’s 44 apartment units are occupied, and most of the office tenants, which are mainly professional service firms, “continue to work from home so they’re still making money.” “Because of that, they’re paying the rent,” Finkelstein said. “We’re fortunate that we’ve got the type of tenants that we do that are able to do that.” Despite weathering the current conditions relatively unscathed, Mast said it’s been “very encouraging” how

The Waters Building in downtown Grand Rapids. COURTESY PHOTO lender Mercantile Bank of Grand Rapids has stepped up to help, in part thanks to some easing in federal regulations on the banking industry in the middle of the crisis. “Our loan gives us a little ability to offer some of that grace forward to our tenants in the meantime without missing a payment or changing the nature of the loan,” Mast said, noting landlords are “sandwiched in the middle between tenants and lenders.” The building owners also have adjusted to the new environment by

limiting entry from three locations to just the main door on Ottawa Avenue, as well as stepping up cleaning and disinfecting of door handles and other commonly touched surfaces, including common area bathrooms. Looking forward, the ownership team expects some lasting disruptions from the pandemic, particularly in people’s willingness to visit restaurants and other crowded venues. As well, some professions increasingly might switch to a work-from-home model, which could affect properties

T ECHNOLOGY

BE V ER AGE

YETi CGI’s experience offers lessons on productivity for virtual collaboration

Soldadera Coffee co-owner expands business from side hustle to full-time gig By MARLA MILLER | MiBiz mmiller@mibiz.com

By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com GRAND RAPIDS — Josh Freeney has a decadelong head start on all the professionals who are just now being thrust into a situation where they’re working remotely. Freeney, a co-founder of tech firm YETi CGI Inc., and his partners have been working on projects from various parts of the country since the company’s inception. “For us, this has been business as usual,” Freeney said. In that decade of remote work, Freeney and his partners have learned myriad lessons about how to collaborate effectively and be productive by leveraging technology. One of their key lessons is that video conferencing — including software like Zoom that has become part of the post-COVID-19 office lexicon — “doesn’t get the job done.” “The companies that have not been focused on remote collaboration and productivity are being sold a bill of goods around remote communication,” he said. “What you’re seeing is all of these companies right now are being handed tools like Teams, Zoom, things like that. Their schedules are filling with meetings, and the productivity is tanking, and the ROI is going to follow.” The reason: Being on video conferencing for hours on end is exhausting and leads to burnout, and does not create an environment conducive to collaboration, according to Freeney. Instead, he recommends turning off the camera, maintaining an audio connection and leveraging a shared whiteboard platform such as Loom, Miro or even a Google Doc where all the people involved can participate simultaneously. Freeney said those collaborative platforms are more productive and useful than situations in which one person shares a screen, “which turns it into a presentation.” “It took us four years to get to what we call the ‘nod-and-grunt’ level of communication over Visit www.mibiz.com

Josh Freeney, co-founder of YETi CGI Inc. COURTESY PHOTO

the phone,” Freeney said. “It takes a lot of practice because you have to recognize that you don’t have the capability of signaling with your hands or your eyes, so you have to actually create space in the room to think, so people can interrupt and go through the natural processes. “If your remote session is not generating useful data, you are not working, you are talking about working.” Perhaps the partners’ aversion to video conferencing could have been predicted by the intentionally low-profile company’s credo: “We’re the hairy guys in the woods doing all the work but there’s no photographic evidence.” “You will not find the demo reel on our site,” Freeney said. “You will see a list of customers that’s fairly impressive, and those are all very real.” The customer list spans recognizable brand names ranging from Google, Mattel, Crate & Barrel, and Fisher-Price, to Nickelodeon, Steelcase and National Geographic. As more companies pay attention to the need for collaborative user experiences created by remote working, YETi CGI has seen an uptick in business. “A lot of the cases we’ve been making have become a lot more palatable because we were talking about ‘what ifs’ before and now we’re talking about a lot of realities,” Freeney said. “The way I think about it is human beings need space to think, work and play. We just got cut off from a lot of those spaces right now. What that means is we need to invent new spaces. That’s what we see a lot of our customers coming in and trying to ask for, but they don’t actually know the words for it.”

GRAND RAPIDS — For the family-owned startup Soldadera Coffee LLC, the COVID-19 crisis has brought an unexpected opportunity. CEO and co-owner Mario Rodriguez had been juggling his full-time engineering job in Auburn Hills with trying to expand the family’s cold brew coffee business in West Michigan. Since being laid off because of COVID-19, Rodriguez has shifted his focus to Soldadera’s future growth. Some of those goals include seeking out funding for a permanent production facility and café, new labeling and branding, and expanding e-commerce sales. “The loss of employment could be seen as a positive or negative,” he said. “I plan to focus more on Soldadera to expand our flavors and brand and modify our business plan in order to make this company bigger during this time of great uncertainty.” Soldadera’s main product is a unique-tasting cold-brew coffee inspired by the family matriarch, Grandmother Cristina, a social activist in Mexico who stood up for people’s rights, especially injustices against women. Rodriguez and his wife Erinna Espinosa, sister Gabby Rodriguez and their father Cesar Rodriguez launched the business a few years ago after winning several pitch contests, including Start Garden’s 5x5 Night and its 100 Ideas competition in 2018, which garnered $20,000. Soldadera is sold in Hispanic stores and restaurants in West Michigan. The family also secured shelf space at Meijer Inc.’s Bridge Street Market and a deal with SpartanNash to get the cold brew into several Family Fare and D&W stores in West Michigan. Prior to COVID-19, they spent many weekends offering samples at area grocery stores and community events. “Now we’re looking at subscriptions and evolving based on the limitations that have been put on us due to the virus and now that I have more time,” Rodriguez said. “Sometimes, you pivot to a new idea and new way of doing things — any good business person has to pivot and modify to keep the business going.”

such as the Waters Building to some extent. “People need socialization. They need to see people face to face,” Finkelstein said. “It’s one thing to Zoom somebody, but it’s another thing to be in front of people. It may take two years, but it’s going to go back to the way it was.” Mast likens the current situation to penguins crowding toward the edge of an iceberg because they’re nervous to jump in over fears of a sea lion might eat them. But once they see a member of the group go in and not get eaten, they’re more apt to dive in and go hunt for prey of their own. He expects the country will monitor carefully what happens in the cities and states that ease restrictions and decide for themselves how to react. Regardless of how long the process takes, Mast notes the Waters Building, which was built in 1898, has weathered many crises in its history. “The building’s been here longer than anyone currently walking around and it’ll be here after we’re all gone,” he said.

The owners of Soldadera Coffee are using the current crisis to tweak their strategies and explore new growth opportunities. COURTESY PHOTO

Raul Alvarez, owner of GTSD Group, has helped the Rodriguez family tell their story and expand their reach into area grocery stores. The next step is to secure longer term funding to increase production and support sustainable growth. “It’s been a lot of fun watching them grow,” Alvarez said. “Just the fact they were able to see that growth and to work with a larger organization like SpartanNash, for example, is a testament to the story they have.” Alvarez supports other Hispanic and Latina businesses as a board member on the West Michigan Hispanic Chamber of Commerce. He said many business owners lack the technical knowhow to apply for federal pandemic relief and feel challenged by the language barrier. The Hispanic Chamber started hosting weekly Zoom meetings for Hispanic and Latina business owners to share ideas and offer guidance and support. “With everything going on, they feel at a loss; they are not connecting with each other, and they are not connecting with their customers,” Alvarez said. “Beyond the camaraderie, it’s a really good way for them to ask questions and connect them with resources.” Soldadera’s grocery sales have slowed down since the pandemic hit, prompting the Rodriguez family to look for new ways to grow, including selling coffee online. A subscription service is still in the works, but members would receive the cold brew, a home brew kit with coffee beans, and additional goodies such as a cap or T-shirt, along with stories about Soldadera’s social responsibility and causes the business supports. “My goal and hope have always been to focus 100 percent on our mission and our coffee and bringing the diversity of this coffee to the community,” Rodriguez said. “We are there in Grand Rapids and still supporting the community.” MiBiz / MAY 11, 2020

ENERGY

Renewable energy, transmission build-out needed in Lower Peninsula as plants close By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

ichigan needs a swift build-out of renewable energy and, in the longer term, more transmission projects to account for the energy shortfall that will grow as more coal and nuclear plants are retired. Last month, the Midcontinent Independent System Operator (MISO) — the entity overseeing the electric grid spanning several states from Canada to the Gulf of Mexico — held its annual capacity auction that sets wholesale power prices in various zones for the year ahead. Nearly all of the Lower Peninsula comprises MISO’s Zone 7. The auction results showed the Lower Peninsula fell short of the necessary generation to maintain reliability, causing a small percentage of wholesale power prices in the Lower Peninsula to skyrocket. By comparison, nine of the 10 MISO zones had clearing prices around $5 per megawatt day (MW/day). Zone 7’s prices cleared at $257.73 MW/day, or the maximum known as the Cost of New Entry. The prices are in place from June through May 2021. While the shortfall was largely due to new accounting by MISO, the results suggest a bigger shift underway in the Lower Peninsula: Retiring coal plants and the Palisades nuclear plant in Van Buren County are driving the need for more instate generation. The quickest way to meet the target is building renewable energy, experts say, in addition to a 1,100 megawatt natural gas plant DTE Energy is building in St. Clair County. “If you start removing a nuclear plant and some others and you don’t have the capacity to fill that gap, then you’re in a very different situation and you are really risking the reliability of the grid,” said Valerie Brader, an attorney at Troy-based Rivenoak Law Group PC and former director of the Michigan Agency for Energy under Gov. Rick Snyder.

The coronavirus is also playing a role, Brader said. Although Michigan’s overall power demand has dropped 15-20 percent during the pandemic, ramping back up during an economic recovery could further strain the system. Meanwhile, COVID-19 has the potential to delay some utility-scale renewable energy projects. Michigan Public Service Commission Chairperson Sally Talberg called the situation “dynamic.” Zone 7 is expected to fall short again next year but rebound after DTE’s gas plant comes online in 2022. Palisades and coal plant retirements also are factored into the projections, “although unexpected changes could occur” that affect the numbers, such as new generation not coming online, extended plant outages or changes in demand.

The auction MISO’s annual planning resource auction sets wholesale power prices for the year ahead. Each year utilities in MISO’s region must secure enough resources to meet the grid operator’s requirements, either by owning or contracting for generation or purchasing it through the auction. Power companies can buy or sell resources into the auction. Within Zone 7, the Lower Peninsula didn’t meet its Local Clearing Requirement, or the amount of generation that’s required to come from within the zone. For the first time in the auction’s history, prices in the Lower Peninsula cleared at the maximum level. Zone 7 was short of the minimum requirement by just 123 MW, meaning 5 percent of the wholesale power demand will pay higher prices. It’s also unclear which electricity customers will pay the higher prices — in fact, some utility customers will see benefits if their power company has excess generation and sells it on the wholesale market. That’s the case with Jackson-based Consumers Energy, which has “more than enough in-state

capacity import limit, transmission has been largely constrained into the Lower Peninsula compared to neighboring states and even the Upper Peninsula. Earlier this year, the Michigan Public Service Commission asked MISO to study the potential for increasing transmission into Michigan. It’s a longer-term goal, as it often takes several years to build new or upgrade transmission lines, often with local landowner opposition. “Transmission is definitely a way to make a big difference,” Brader said. “That being said, transmission takes a while to build, and at this point, there hasn’t been a project proposed. In the near term, you’ve got to get the renewable projects built and make sure demand response and energy efficiency work can continue.” Wheeler said Consumers’ Clean Energy Plan, which anticipates 6,000 MW of additional solar energy by 2040, aligns with the gradual closing schedule for its remaining coal plants and ending its Palisades contract. During the pandemic, Consumers also has continued work on a wind project in Gratiot County. “We think it’s always important for energy providers to develop and follow long-range plans that ensure there’s a reliable energy supply for their customers,” Wheeler said. “The MISO auction results indicate a need for more electric generation within the Lower Peninsula of Michigan. That’s what we are doing through our Clean Energy Plan.” Without enough in-state electricity generation, the chances for power outages increase, Talberg said. “The auction was designed to send this signal that more generation is needed in the local area and/or increased transmission,” she said in an email. “Not meeting the (local clearing requirement) does not mean Michigan will have power outages due to lack of supply but it does increase the probability of it.”

electricity generating capacity” for its full-service customers, said spokesperson Brian Wheeler. Consumers sold some capacity to energy providers that didn’t have sufficient local capacity. “The higher auction price will benefit our full service customers because all of the proceeds from Consumers Energy’s capacity sales in the auction will flow directly back to the customers in the form of lower electricity rates,” Wheeler said. “We will be watching to see if alternative energy suppliers are able to secure the electric generating capacity they will need under Michigan’s energy law.” The higher prices are likely to hit electric “choice” customers who buy power through alternative suppliers. Depending on how those contracts are structured, customer bills may increase if suppliers didn’t purchase power ahead of the auction. The Coldwater Board of Public Utilities will reportedly face $2.3 million in additional costs as a result of the auction. Tim Lundgren, general counsel for Energy Michigan, which represents alternative energy suppliers, says MISO’s tariff “has created a bit of a shortage on paper where there isn’t a reliability problem. There’s plenty of electricity. Part of the problem is the way MISO’s tariff is structured. Really, it’s a mathematical problem that could be addressed and fixed quite readily and would add considerably to our available resources we could use.” The MISO auction results also suggest that “we need a focus on getting some of these new renewable energy projects built in Michigan,” he said.

More imports In the longer term, Lundgren and others say Michigan could meet its generation requirements by importing more power from neighboring states to the south. Known as the

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‘FLIGHT TO QUALITY’

Court ruling dashes plans for new AHPs

Amenity-rich Class A office space still in demand in GR, suburban markets By SYDNEY SMITH | MiBiz ssmith@mibiz.com

5.26.2020

Education & Talent Development Contract Deadline: 5.13.2020

6.8.2020

Commercial Lending Report Contract Deadline: 5.27.2020

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.

7.6.2020

West Michigan’s Tribal Economy Contract Deadline: 6.24.2020

7.20.2020 Industry 4.0

Contract Deadline: 7.8.2020

See CLASS A OFFICE on page 9

6.22.2020

Auto Industry Forecast Contract Deadline: 6.10.2020

9 West Michigan Industries Being Distrupted by AI Contract Deadline: 7.22.2020

Manufacturers shift operations to meet needs during pandemic By JESSICA YOUNG | MiBiz jyoung@mibiz.com

D Zeeland-based MedViron has received numerous orders for its overbed tables from health systems across the country that are ramping up capacity to deal with COVID-19 patients. COURTESY PHOTO But then the company started getting emails and phone calls from large health systems across the country inquiring about MedViron’s overbed tables and the lead times to get orders filled. One order led to another and all of a sudden, the company’s strategy had to change. “I have big hospital systems that are contacting us in a panic needing overbed tables in order to get rooms open,” Davis said. “All of a sudden, it was like boom: In 24 hours, we had an order and we’re told that there’s going to be another order coming for another 30 units, and then we got another order from (an existing customer) who’s all of a sudden moving forward on a project. I think it’s just the start.” Davis said Wednesday the company had an order backlog of nearly 300 units, with a realistic expectation that it would grow to nearly 900 units by the end of the week. One customer from New York asked if they could get the tables within two weeks as the hospital races to increase its bed space. See MEDICAL FURNITURE on page 5

emand for the mobile computer workstations produced by Walkerbased health care furniture manufacturer Altus Industries Inc. had already begun to spike as hospitals started setting up quarantine and triage areas in preparation for an influx of COVID-19 patients. Then as Gov. Gretchen Whitmer issued a stay-at-home executive order on March 23, Altus began getting requests for a product not yet in the company’s wheelhouse: mobile ventilator carts. “We had a customer using one of our carts already as a ventilator cart — it was close enough,” Altus co-owner Eric Kahkonen told MiBiz. The engineering team at Altus got to work using the company’s standard components to configure Kahkonen a cart designed to support ventilators, which mechanically “breathe” for patients unable to do so on their own. The COVID-19 virus attacks the lungs and, in severe cases, makes breathing difficult and requires medical ventilators. After just a few days, the first ventilator carts were already in production. Altus has begun taking orders for ventilator carts as well as telemedicine carts, which allow doctors and See RETROFITTING on page 4

Work-sharing draws new attention as a ‘win-win’ alternative to layoffs

WATERLOGGED WONDERLAND Former Muskegon coal

Unseasonably rainy weather plantcoupled to get with near record-high Great Lakes water levels have many West Michigan business newleft owners owners hoping the region will PAGE 12 dry out in time to salvage the season for visitors and tourists. SEE PAGE 12 MARCH 16, 2020 • VOL. 32/NO. 11 • $3.00

STORY AND PHOTO BY MARLA MILLER

STATUS QUO

GR debates increasing sites for marijuana businesses; equity, localenforcement ownership actions and agency’s concerns revisions to stateremain liquor code enacted

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

last fall are unconstitutional, and that By SYDNEY SMITH | MiBiz the state laws are preempted by federal lawsssmith@mibiz.com regarding the production and sale of alcohol, particularly cider, which is GRAND RAPIDS — Following classified as wine. mixed messages Grand Plaintiffs, who sayfrom theirthe businesses Rapids City Commission last are being financially harmedlate because month, of the actions,marijuana also allegeadvocates the new law hope city officials will ultimately is unconstitutionally vague, leaving openproducers more properties for“arbitrary medibeverage open to cal and recreational facilities. and capricious” enforcement actions. On Feb.stems 25, thefrom commission The lawsuit the MLCC went back and forth on applienforcement division’s finding on June cations for bothwhich types holds of facili19 that Greenbush, both ties. The city approved 24 microbrewer andhas small winemaker licenses for medical marijuana businesses, while another 14 are waiting for approval. The city hasn’t finalized recreational marijuana zoning regulations and won’t start accepting applications until April 20. Hours after voting to delay recreational and pause medical applications, the City Commission reversed course PAGE 4 after the six commissioners could not agree on how to move forward. A last-minute dispute among commissioners also involved equity and local ownership. Commissioners were considering zoning amendments recommended by the Planning Commission that would have eliminated a waiver process for sensitive land uses like religious institutions and opened more properties for cannabis development. Marijuana advocates have sought to relax distance requirements in order to expand the number of properties qualified for marijuana business use, which they say could also help address concerns over a lack of local ownership. Joe Neller, co-founder and chief government affairs officer at Dimondale-based Green Peak Innovations LLC, said the Planning Commission rejected a provisioning center proposed by his company because of the site’s proximity to a church, even though the company had a waiver from the church. See STATUS QUO on page 8

Commercial Lending Report

he automotive industry is scrambling to strike a balance between near-term execution and unsteady industry disruption from the novel SEE PAGE 16 coronavirus outbreak. That’s according to industry experts who say the effect of the virus, which has been spreading around the globe since late December and shut down production in specific regions, has shifted forecasts for global automotive production and U.S. sales downward. Indeed, Gov. Gretchen Whitmer announced the state’s first two presumptive positive cases in Oakland and Wayne counties on March 10, followed by a state of emergency declaration.

INSIDE:

Transition/ Succession SEE PAGE 16

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

Automotive analysts see shifting dynamics amid coronavirus spread INSIDE: By JESSICA YOUNG | MiBiz

www.mibiz.com

AN —

Virus concerns Planning drive additional due diligence in M&A transactions

licenses, was in violation of state law Regardless of the federal question over its bonded transfers of cider, regarding the state law, Greenbush which it purchased from Vander Mill. owner Scott Sullivan said the comIn the court documents, Greenbush pany met the requirements in the said the enforcement division told the revised Michigan Liquor Control company it “was required to ferment Code that would allow it to particievery drop of wine that it sold,” seized pate in the bonded transfer of wine. all of its cider inventory and told the Greenbush produces some of its own company to stop using its small winewine and cider under the new definimaker license, effectively barring the tions, thereby qualifying it under state producer from selling all cider and wine. law to be eligible for bonded transfers. The lawsuit challenges the consti“This has happened to a number tutionality of the seizure, which was of breweries before us, and for whateffected without a search warrant. The ever reason, no one has been willVisitcurrently mibiz.com for ongoing the of COVID-19 in West Michigan. state is holding aboutcoverage $7,200 of ing tobusiness stand upimplications and take MLCC head in Greenbush’s property, according to on,” Sullivan told MiBiz. “If I think See LAWSUIT on page 3 court filings.

jyoung@mibiz.com

“In many ways, this is an ideal downturn to use work sharing — we don’t think there’s a great need for restructuring the economy,” Houseman said. “In those circumstances, it’s really beneficial if possible to maintain those employment relationships.” Work sharing, or “short-time compensation,” also allows employees to maintain health insurance benefits. Research has shown that fully severing the employment tie increases the likelihood of “persistent adverse effects to their employment and earnings for many years,” Houseman said. See WORK SHARING on page 10

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qualify for a percentage of unemployment benefits based on their reduction in hours. In the unique circumstances brought on by the coronavirus, in which businesses have been ordered to shut down for a certain time period, work sharing can be beneficial by keeping trained workers on staff without having to go through a new round of hiring. “It’s potentially beneficial to both workers and businesses when the downturn is expected to be temporary,” said Susan Houseman, vice president and director of research at the Kalamazoo-based W.E. Upjohn Institute for Employment Research.

Spectrum Health prioritizes buying local

a handful of organizations in Michigan that had their plans scrapped by the federal court ruling. Reep still holds out hope for launching

an AHP if an appeal turns out successfully. West Michigan Coronavirus That could occur if the Department of SERVING MICHIGAN SINCE 1988 LaborWESTERN prevails in appealing the rulingBUSINESS by U.S. execs talk concerns District Court Judge John Bates of the District leadership sideline West of Columbia. As well, Congress could enact strategies — C O R O N A VSee IAHPsRon page U 7S I NMichigan MICHIG amid sports teams PAGE 14 pandemic

Craft beverage producers sue MLCC, allege unconstitutional state laws, enforcement

Manufacturers prepare ahead for cyber threats

8.3.2020

Race to add hospital capacity keeps West Michigan manufacturers on the job

www.mibiz.com

Arsenal of health:

‘CAN YOU HURRY UP?’

rdinarily, our next print issue would have arrived in your mailboxes today. But because we are living in extraordinary times, the paper isn’t there. Instead, we produced an enhanced digital edition and a downloadable PDF version of the March 30 edition that was emailed to our 21,000+ print and e-newsletter subPAGE 11 scribers. We’re also posting the digital versions on our www.mibiz.com By JOE BOOMGAARD | MiBiz website to make it available jboomgaard@mibiz.com to the tens of thousands of non-subscribers that visit ZEELAND — As Brad Davis tracked news about the our website and social media spread of the coronavirus in early March, he cauchannels. tioned his production team at MedViron LLC that We also lowered our paythe company might need to shut down to do its part wall on March 16 to make all with social distancing. of our coverage of the coroAt the time, his thinking was navirus pandemic free to that the maker of medical furreaders. And our hope newsroom Groups still to form health nishings had no need to keep has stepped up its coverplans if appeal proves successful production running. The best age of business news, policy thing for the company and the updates and what all this By MARK | MiBiz employees was for them all to do means for SANCHEZ West Michigan msanchez@mibiz.com their part in helping “flatten the companies and the region’s curve” and curb the spread of the economy. f a remedy ever comes, pandemic. The print version of The Employers’ Davis still wants “If we have to shut down, we MiBizAssociation will be back. Over theto offer members employee have to shut down, that is what it is,” said Davis, the next an twooption weeks,for we’ll be giv- health coverage. Thesubscribers association the was all set this past and president of MedViron. “I don’t give a shit founder ing print springtotohave launch an mailed association health plan. about making money — it’s bloody serious; it’s scary.” option MiBiz with Health, The toPartnering their homes orinsurer offices,Priority or Employers’ Association planned to offer HMO to receive a digital edition in and point-of-service products to member their email inbox. If you’re a employers, according to a filing with state regular print subscriber, look regulators who approved the coverage last fall. for an email from us on how Then came a March 28 federal court ruling to do this. that struck down a 2017 executive order by The net of it: We aren’t President Trump and subsequent rules issued By ANDY BALASKOVITZ | MiBiz printing right now, but we’re by the U.S. Department of Labor that broadabalaskovitz@mibiz.com still publishing. ened the ability of small Thanks for your conbusinesses to join together or Michigan companies scaling back but not tinued readership and to form association health completely shutting down as the state tightpartnership. plans. ens restrictions to stop the spread of the “We ended up pullcoronavirus, a little-used program is drawBe well. ing that off the table after ing new attention as an alternative to layoffs. that result from the court,” Michigan’s voluntary Work Share program, oversaid Jason Reep, presiseen by the Unemployment Insurance Agency, dent for The Employers’ Brian Edwards, Publisher avoids layoffs by reducing hours across more employReep Association, based in bedwards@mibiz.com ees. Instead of some being fully unemployed while Grand Rapids. The Employers’ Association standsothers amongmaintain full employment, more workers

Could better commuter transit aid talent attraction?

PAGE 20

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

Ea rlier t his mont h at t he West Michiga n Automotive Suppliers Symposium in Grand Rapids, Mike Wall, director of automotive analysis in Grand Rapids at IHS Markit, forecasted light vehicle sales of 16.8 million units in the U.S. this year, in the segment that includes cars, utility vehicles and pickup trucks. Already, that outlook is changing as COVID-19 continues to develop across the country, he told MiBiz. As of this report, IHS Markit was still finalizing a revised sales projection, but Wall expects the new forecast to drop to 16.5 million units. “Everything is happening so quickly and there is so much volatility that given the circumstances, 16.5 (million) will still be a very good year,” Wall said. See SHIFTING DYNAMICS on page 4

he coronavirus outbreak that’s battered Wall Street and caused supply chain disruptions for some manufacturers has yet to interrupt transactions, although more conversations are occurring as part of due diligence, according to M&A professionals. Deals that are in process involve a deeper dive into due diligence in situations where one company is acquiring another that sources raw materials or components from China. Buyers are asking for more information about supply chains, backup plans and the capabilities of replacement suppliers. Brown “It’s still very new. Everyone’s trying to figure it out on the fly, but if clients were selling source parts from China, you’re going to have to make sure they have a backup supply-chain plan in case there is a major disruption,” said Mike Brown, who leads the M&A practice at investment bank Charter Capital Partners LLC in Grand Rapids. See DUE DILIGENCE on page 9

Michigan Chamber prepares for ‘war’ over graduated income tax proposal By ANDY BALASKOVITZ | MiBiz abalaskovitz@gmail.com

s progressive political advocates seek lower state income tax rates for most Michigan residents while higher earners pay more for infrastructure needs, the state’s leading business group is bracing for a highly contentious political campaign. Organizers behind the Fair Tax Michigan campaign, which was announced in late February, are

seeking a constitutional amendment to change Michigan’s flat 4.25 percent income tax to a graduated structure based on income. The Board of State Canvassers is expected to decide in the coming weeks whether organizers can collect signatures in hopes of putting the question to voters in November. “If this qualifies for the ballot, frankly, it would be war,” said Rich Studley, president and CEO of the Michigan Chamber of Commerce. For years, the Chamber has opposed efforts in the state Legislature for a

graduated, or progressive, income tax. The Democratic-backed proposals have failed to gain traction in the Republicanheld state House and Senate. In t he late 1960s a nd 1970s, Michigan voters by wide margins rejected ballot proposals for a graduated income tax. Such a change would require a constitutional amendment. However, supporters say growing income disparities and declining public services have shifted public opinion. The Fair Tax Michigan plan would raise $1.5 billion in additional revenue for

schools and road and water infrastructure starting in 2022. The plan would reduce the state income tax rate for individuals with income of $175,000 or less and joint filers with income at or below $350,000. According to organizers, 95 percent of Michigan residents would pay a lower state income tax rate than they do now. Of the 41 states with income taxes, 33 have a progressive structure. Federal income tax also follows a graduated model. See INCOME TAX on page 3

Leaders push for action to raise wages PAGE 21

INSIDE:

Business of Senior Care SEE PAGE 16

MAY 11, 2020 / MiBiz

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

NONPROFIT ORGANIZATIONS

Goodwill Industries partners with Keystone Solutions Group to produce face shields By JANE SIMONS | MiBiz jsimons@mibiz.com KALAMAZOO — As they deal with the effects the coronavirus pandemic is having on their bottom lines, businesses and organizations are engaging in some in-your-face thinking to generate revenue and keep their employees working. Late last month, Goodwill Industries of Southwestern Michigan took over the production of face shields from Kalamazoobased Keystone Solutions Group, an engineering, product development and medical device contract manufacturing company. Keystone designed and originally produced the face shields at its location in the Oshtemo Business Park. Goodwill will sell the face shields directly under the brand 420 East, while Keystone will continue to act as the distributor. The 420 East brand is a nod to the address for the Goodwill facility on East Alcott Street. John Dillworth, president and CEO of Goodwill Industries of Southwestern Michigan, said the face shields will be sold to the organization’s customers, some area nonprofits, and Goodwill affiliates throughout the United States. The face shields will sell for $3 apiece and will be packaged in 50-count boxes. “Our biggest customers will be other Goodwills across the country,” Dillworth said. “There are 140 across the U.S. and a lot of them have come to the conclusion that face shields are better than face masks. “If you look at how some people are wearing face masks, it’s embarrassing because they’re not wearing them properly and they’re constantly adjusting them, which means they’re touching their faces. The face shield keeps you from doing that because of the Sponsored by: plastic covering.” GRAND RAPIDS A group of 16 Goodwill team COMMUNITY members are making the face FOUNDATION shields and will double production this week to 12,000 units. Dillworth said he anticipates production to increase next week to 22,500 face shields when additional plastic and foam supplies arrive. “We are a little behind on production versus demand,” Dillworth said. “When we’re getting orders now, we’re shipping them out three days after we get them.” He said his organization wouldn’t have been able to source the supplies without Keystone, which already had contacts for the foam and plastic used to make the face shields. “We’re buying elastic for the face shields and the packaging material and labels,” Dillworth said. “We had some better sources of more cost-effective packaging supplies.” The for-profit/nonprofit collaboration was an outgrowth of conversations that took place between Dillworth and Jim Medsker, Keystone’s CEO and a member of Goodwill’s board since 2013. Medsker had served as board president of Goodwill from 2018-2019. “We had identified that we needed face shields for our employees, and at the same time (Jim) reached out to me and said they needed a workforce to meet the capacity to produce face shields,” Dillworth said.

NONPROFIT SECTOR NEWS

Offering solutions To produce the volumes needed to meet the demand for face shields, Keystone would have had to “staff up,” according to Vaughn Gerber, the company’s director of central engineering. “Part of the reason we decided to hand this off is that at the same time we started making the face shields, we also started the process of manufacturing test kit swabs,” Gerber said. Dillworth “That’s really where our focus has been, on launching sterile test kit swabs.” The demand for these swabs is upwards of hundreds of thousands and growing, primarily Goodwill Industries of Southwestern Michigan is producing face due to the COVID-19 pandemic, Gerber said. shields under the 420 East brand. COURTESY PHOTO “We’ve actually had interest for the test kit “When it came to contract manufacturing, this has enabled us swabs in higher volumes than that,” he said. to get a few customers we wouldn’t have had otherwise,” Dillworth “The challenge is getting the raw swabs in.” said. Despite working with limited resources, The face shield production also opened up a new revenue Keystone has remained fully operational and Gerber stream that is giving Goodwill a financial boost while also employis considered an essential business because of ing people. its product line. The company has 60 employThe organization had 312 employees before it closed under ees, which includes a production team that continues to come in to the state mandated stay-at-home order. Two hundred and fifty of manufacture various medical equipment and supplies and an office those employees have been furloughed. The organization has an staff that is currently working from home. annual budget of $14 million, 80 percent of which comes from its Keystone’s products are shipped to customers in the U.S. and 10 retail stores. An 11th store located in Paw Paw is closed and will North America who in turn may ship them worldwide. not reopen when the lease expires in July. Other than one product line where there has been a minor softIn addition to the revenues generated, store sales also supening, “we haven’t seen a sharp decline in the demand for products ply the vast majority of surplus funds for that we make,” Gerber said. “This has allowed Goodwill’s mission, Dillworth said. us to keep our crew working here.” “Last year, the stores contributed $780,000 The company began making face shields on to our mission,” he said. April 7 with a goal of producing 4,300 per day. The remainder of the budget comes from Gerber said the production continued through contract work and grants and fees for mission that week. The following week, Keystone services programming. handed off the raw materials to Goodwill and “Fortunately, we’ve had a very strong run of helped the organization set up its assembly good years financially so when this rainy day hit, process. we know we have a surplus of funds to weather Dillworth said Keystone had a good design the storm, but it’s not inexhaustible at all,” for the face shields, which hold up well and can be cleaned with common products such — JOHN DILLWORTH Dillworth said. “If we’re in the same position in August, we’ll be in a heap of trouble.” as Windex. President and CEO of Goodwill Had Keystone continued with the face Industries of Southwestern shield production, the company would have Michigan Plan for reopening had to hire additional employees, while Once the state allows stores to reopen, Goodwill had people out of work who wanted Goodwill will implement social distancing a job. guidelines and a one-way traffic pattern in its stores. Dillworth “Goodwill can manufacture and distribute through their own said the biggest difference for customers is that they will have sources, and we do have some accounts that we are going to be to take items intended for donation out of their cars as opposed distributing to as well,” Gerber said. to having Goodwill team members do it. Despite these precautions, Dillworth wonders whether Financial boost customers will feel comfortable coming back into the stores Everyone involved in the collaboration is benefitting from it, to shop. Dillworth said. He cited Medsker as being instrumental early on “They’ve had enough time at home that they’re shopping online in putting Goodwill on the path to ISO certification, creating a more. We’re already looking at what we could do to triple our online clean room for production work, and upgrading the skill sets of sales,” he said. “The key in a changing environment is being open employees. and flexible to new and different things.”

“The key in a changing environment is being open and flexible to new and different things.”

Together, we will recover. Inequities are intensified in times of crisis, and our community has responded with collaboration, innovation and generosity. Learn more at grfoundation.org/covid19 Visit www.mibiz.com

MiBiz / MAY 11, 2020

Q&A Dr. Adam London

IN THE NEWS

Director, Kent County Health Department Over the past few weeks, the number of positive COVID19 cases in Kent County rose sharply, roughly doubling in each week during the second half of April. Reports suggested West Michigan was a new hotspot after the early and continued devastation in Southeast Michigan. The public health director in Kent County, though, says more targeted testing in vulnerable populations was the key to helping stop the spread here. Positive cases are up, yet total deaths have grown gradually. Hospitals have not yet reached capacity. Dr. Adam London spoke with MiBiz on May 5 about the county’s effort to track COVID-19, the limitations in testing and walking “this delicate policy tightrope” between public health and the economy.

Over the past few weeks, officials have noted a large percentage increase in COVID-19 cases in Kent County and West Michigan. Are those increases concerning to you? No, they’re not concerning at all for me. In fact, I think they have been a little bit misrepresented. What we’ve done is approach this lately with a more aggressive strategy for testing. Where most of the state is right now, individuals who are looking to be tested are almost always symptomatic, almost always going through their primary care physician or hospital to be tested. Here in Kent County, we recognized looking at the data in other parts of the country that we were very likely to have worst-case scenarios in places like long-term care homes and shelters for those experiencing homelessness. We decided that instead of waiting for symptomatic cases to develop in those settings, we should act more aggressively to identify positive cases in those environments before those small outbreaks become large outbreaks. We really want to break up these small clusters before they become bigger outbreaks. What was the planning behind the more aggressive testing, and how is it working in practice? Within the Health Department and county team, we have a number of units including our surveillance, testing and communications teams. We have a team doing the isolation center for those who don’t have a place to stay who are positive. The surveillance team is where we’re doing all of our epidemiology. We have a team of nurses who are trained to go into the field and collect samples from those higher risk environments. We coordinate and have regular meetings with hospitals. We were doing just a few dozen tests a day in early April, late March to 1,000 now, and we’ve seen an increase in positive cases. We’re hunting for it, and finding it. What are you hearing from hospitals? Are there concerns about reaching their capacity? The hospitals all report they’ve seen fairly flat numbers in terms of admissions for COVID-19. While the testing has increased, most of the people diagnosed positive are mildly symptomatic or can recover at home. The actual number of people admitted at local hospitals is a little less than 100, and that number has stayed pretty flat. We have seen the curve flatten as far as hospital admissions go. Trying to measure the shape of the curve by testing is complicated because testing was not consistently available over the past few months. The availability has changed and it’s a really hard metric to judge actual prevalence in the community. A better measure is hospital admissions. The number of deaths in Kent County remained in the 30s over the past week. What information does the county have on who is dying? Our current number is 39 as of this morning [May 5]. That number has been fairly flat. The number we’re really watching is the rate of days it takes to double. We’re at 33 days to double our death count, and that number continues to increase. We’re putting our hospitals in a good position to provide high quality care. A majority of (patients) are recovering and having a successful outcome. The vast majority (of deaths) have been over the age of 60, the vast majority had underlying health conditions as well. That trend has played fairly consistent with what we’ve seen elsewhere. We also see a lot of people in the 30-50 age bracket that have tested positive for COVID-19. While the most terrible outcomes have been fairly limited to the 60 and older population, we have seen hospital admissions in all age groups. Are you seeing any concerns about tests showing false negatives? I’m concerned about that, and a lot of things related to testing, especially as we test more asymptomatic individuals and more people who are critical infrastructure workers who think they have been exposed to someone positive. There’s a great desire among those individuals to get tested right away. In many cases, the infection hasn’t occurred to a level to be detected by a test. We’re also seeing problems with false positives, especially with antibodies tests they want more available. In places where they’re using antibody testing, it’s picking up an immune response to infections that have happened with other types of coronavirus, the less severe forms that have been around for decades. What has Kent County been able to glean from the experiences in Southeast Michigan? The No. 1 takeaway is you cannot allow your hospitals to be overwhelmed. When the hospitals can’t handle the surge in cases, that’s when you start to see the increase in the rate of death and the worst outcomes. You’ve got to keep hospitals in good shape. We’ve also learned that communities of color and socioeconomically distressed communities suffer disproportionately from COVID-19. There’s a variety of reasons, most importantly the prevalence of other underlying conditions and lacking access to health care. We recognize that and we’re doing our best to make information available in lots of different languages, make messages culturally relevant and work with leaders in those communities to make sure our message is reaching people who need to hear it the most. What lingering concerns do you have, and what keeps you up at night? What keeps me up late at night is the concern that this is not going to be a short-term crisis. This virus is not going away anytime soon. We still have a huge majority of people who are susceptible to this infection. Until we have better therapies and ultimately a vaccine, we’re going to be struggling with this. I also know and fully recognize we need to reopen the economy. We need to get life going again in so many ways. That’s so important and so related to many other health outcomes. We have to walk this line between being mindful and cautious about COVID-19 and also mindful and cautious about the health of the economy and making sure people have jobs, can pay their mortgage, buy groceries and don’t disrupt the supply chain of so many products. We need to do both. We have to walk this delicate policy tightrope between both of them to make sure we’re not causing disaster on either side of the situation. And we will need to walk that tightrope for probably a year or so.

M&A

n Caledonia-based Aspen Surgical Products Inc., a producer of disposable surgical products, has acquired Precept Medical Products in Arden, N.C., a maker of personal protection equipment in health care. The acquisition adds to Aspen’s product portfolio. Aspen, with facilities in Caledonia and Las Piedras, Puerto Rico, also gets about 200,000 square feet of manufacturing and distribution capacity with Precept’s manufacturing facility in Agua Prieta, Mexico, and distribution warehouses in Douglas, Ariz. and Richmond, Va. Precept designs, manufactures and markets protective medical apparel for infection control. The company’s products include surgical face masks, non-surgical isolation gowns, lab jackets, scrubs, coveralls, patient gowns, lab coats and cold therapy packs. Terms of the deal were undisclosed. Aspen Surgical is a platform company of Boston-based Audax Private Equity. n Lansing-based communications firm 7C Lingo LLC has acquired 2b Inclusive LLC, a professional development training firm also based in Lansing. Tedi Parsons, managing partner of 2b Inclusive, will stay on with 7C Lingo, where he will serve as the vice president of professional development and training, according to a statement. Parsons also will oversee a new initiative, 7C Pros, aimed at professionals just starting a career in the C-suite. 7C Lingo President and CEO Fathy Shetiah said the deal allows the company to expand its services and client base. Terms of the deal were not disclosed. n High Street Insurance Partners, a Traverse City-based agency platform backed by private equity, recently completed three acquisitions, two of them in West Michigan. The agency closed in April on deals for Ken Bleeker Insurance Agency in Martin and Trust Shield Insurance Group in Schoolcraft. High Street this month expanded outside of Michigan with the acquisition of New Hartford, N.Y.-based Gates-Cole Associates. Since forming in June 2018 with backing from Detroitbased private equity firm Huron Capital, High Street has made 10 acquisitions. The company now has more than 300 employees at offices in Michigan, New York and Pennsylvania.

EXPANSION

n Inner City Christian Federation has expanded its emergency shelter services during COVID-19, opening a three-bedroom home for families experiencing homelessness in Grand Rapids, adjacent to the organization’s Family Haven shelter. n Economic development agency Battle Creek Unlimited has expanded its COVID-19 Emergency Microgrant Fund to a second round that includes small businesses and nonprofits in neighboring communities. Following a $200,000 grant from the Consumers Energy Foundation, and additional funding from BCU and the W.K. Kellogg Foundation, officials plan to support 65-85 more businesses in the Battle Creek area, including in Springfield and Emmett, Bedord and Pennfield townships. Grants are up to $5,000 and are limited to organizations with fewer than 15 employees and less than $1 million in annual revenue. The funds can be used for payroll, accounts payable, rent and other bills. n Battle Creek-based Cask & Kettle, which makes cocktail pods for Keurig-style coffee machines, is rolling out its product in select Walmart stores across Michigan. The woman-owned company was founded in 2017 to focus on bringing craft-style hot cocktails into homes.

PHARMA

n Southwest Michigan could become one of three production sites in the U.S. for a potential vaccine for COVID-19 that Pfizer Inc. and Mainz, Germanybased BioNTech SE are developing. The first participants in a clinical trial for four vaccine candidates have already been dosed, Pfizer and BioNTech said last week. If the clinical trials prove the vaccine candidate successful, Pfizer and BioNTech plan

to produce the vaccine at Pfizer’s Kalamazoo-area facility in Portage, as well as in St. Louis, Mo. and Andover, Mass., plus Puurs, Belgium.

HEALTH CARE

n Citing low reimbursements rates, declining referrals and low occupancy that make continued operations unsustainable, the Dominican Sisters of Grand Rapids plans to close the Marywood Health Center, a 49-bed nursing home on the Sisters’ Marywood Campus. The Marywood Health Center provides clinical care and rehabilitation therapies for people recovering from illness or injury, stroke or surgery. The Dominican Sisters have operated the Marywood Health Center for years with Trinity Health. The center no longer accepts new admissions and the Dominican Sisters will work to ensure an orderly, safe discharge of remaining residents to their homes or another health care facility. n The state Department of Health and Human Services and Department of Labor and Economic Opportunity have launched a new portal in Pure Michigan Talent Connect to make it easier for health care professionals to apply for jobs providing care for COVID-19 patients. As of last week, the portal had more than 7,000 job openings for positions including registered and licensed professional nurses and respiratory therapists at long-term care facilities and other facilities. Full-time, part-time and temporary positions are available. n Grand Rapids-based Field-Tools is offering a free health-screening form on its mobile app for construction companies to use as workers returned to work last week. On their phones, workers activate a QR code in the app at signs posted at construction site entrances. The form asks a series of questions about recent travel and contacts who may have tested positive for COVID-19. Questions answered “yes” notify the site supervisor. Pioneer Construction Co. officials have successfully tested the app in the field. n Metro Health-University of Michigan Health System will start voluntary staff furloughs this week in response to the “lasting” financial consequences of the COVID-19 pandemic. Officials expect a $40 million operating loss through the 2020 fiscal year that ends June 30. Metro Health joins Spectrum Health, Mercy Health and Bronson Healthcare in cutting expenses after weeks of losing revenue following an executive order by Gov. Gretchen Whitmer that prevented elective, non-essential procedures and surgeries.

BANKING

n Grand Rapids-based Independent Bank Corp. (Nasdaq: IBCP) plans to consolidate eight offices into nearby branches. The branch consolidations will generate more than $1.3 million in annual cost savings and come with a one-time expense of $800,000, most of which will occur in the second and third quarters. Independent Bank has 68 offices in the Lower Peninsula. The offices Independent Bank plans to consolidate into nearby locations are in Troy, Pigeon, Acme, Ionia, Potterville and Olivet, CEO Brad Kessel said in an email to MiBiz. The bank also plans to consolidate offices on the campuses of Central Michigan University in Mt. Pleasant and Saginaw Valley State University into other branches in those markets.

MOBILITY

n PlanetM, the mobility initiative of the Michigan Economic Development Corp., has issued $333,000 in grants to four companies to pilot new transportation projects. They include Adastec, which will test a full-size electric and automated bus at Michigan State University’s East Lansing campus, and KTISIS, which will install traction systems to improve vehicle safety and performance on off-road vehicles at Silver Lake Sand Dunes near Hart.

Interview conducted and condensed by Andy Balaskovitz. COURTESY PHOTO

MAY 11, 2020 / MiBiz

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