MiBiz July 6, 2020 print edition by MiBiz

New BIFMA CEO takes over amid industry uncertainty

MSU flexes collaborative playbook

PAGES 4-5

PAGE 14

JULY 6, 2020 • VOL. 32/NO. 19 • $3.00

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

‘Certainly a demand’

Small businesses in the food system ‘maintaining’ as COVID-19 fallout continues

GR considers fasttracking recreational cannabis as sector grows elsewhere in West Michigan By KATE CARLSON | MiBiz kcarlson@mibiz.com

he Grand Rapids City Commission is expected to vote July 7 on a plan that could allow retail recreational cannabis sales months ahead of schedule, and put the city on track with a growing number of communities allowing the industry to flourish. The commission advanced a resolution on June 16 to allow existing medical cannabis businesses to apply for a recreational license. The proposal was initially limited to growers, processors, safety compliance facilities and secure transporters. First Ward Commissioner Jon O’Connor, who has consistently advocated for the retail sale of recreational cannabis in the city, initiated an amendment last month to include provisioning centers. “There is certainly a demand,” O’Connor said during the meeting. “I know there are (recreational retail) operators outside of Grand Rapids that have the ability to deliver here. Those are tax dollars that are not being spent in our community.” Dispensaries have increased delivery service during the pandemic, but that’s also due to the fact that not all communities are allowing recreational stores, said Robin Schneider, executive director of the Michigan Cannabis Industry Association. “It’s very important that all adult cannabis consumers have safe access to recreational cannabis that is safe, clean and tested,” Schneider said. “The more licensed growth we have, the better it is for the consumer because they have more variety to choose from and the price tends to drop.” O’Connor told MiBiz in June that the purpose behind See CANNABIS on page 11

www.mibiz.com

The Meijer State Games of Michigan will go forward this year, albeit with fewer sports that allow participants to adhere to health guidelines. Planners also have created some virtual competitions. COURTESY PHOTO

West Mich. Sports Commission manages through cancellations, lost visitor spending Some sporting events return to action with focus on safety By JAYSON BUSSA | MiBiz jbussa@mibiz.com GRAND RAPIDS — The West Michigan Sports Commission took measures to create a safer work environment at its office, which was newly opened in November of last year before the springtime COVID-19 pandemic sent staff home to work remotely. The organization currently does not allow pop-in guests — those that do visit are subject to a health questionnaire and a temperature check

— and the team has created a flow to the office to maintain proper social distancing. Now, they just have to figure out how to actually do their work. “We’re focused on (making it safe to work at the office), but how do we then do what we’re supposed to Guswiler do, which is promote sports tourism and have activities?” said President Mike Guswiler. For a nonprofit tasked with attracting and promoting sports tourism to the area and driving See SPORTS on page 3

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

or a sector with already thin margins, restaurants and other small food businesses are just looking to stay above water as pandemic restrictions slowly lift. With 50-percent occupancy restrictions and virtually no revenue from in-house and public events, these small businesses’ options are limited for generating new income. On top of that, they’re dealing with a food system in flux as order patterns shift and supplies run short, as well as uncertain demand from restaurantgoers and ongoing concerns over worker safety. “I feel like what’s happening now is we’re in maintaining mode,” said Matt Smith, co-owner of Louise Earl Butcher LLC in Grand Rapids. Smith noted the absence of most public events, as well as the cancellation of various dining events and classes the shop held as a way to boost profits. “Some of those things that were really carrying the momentum for us going into the new year are gone,” he said. “Getting into a maintaining thought process is probably one of the biggest challenges and where we think things are going to stay for a while.” See ROUNDTABLE on page 19

GR airport exec: ‘The worst part is behind us’ By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com CASCADE TOWNSHIP — Officials at the Gerald R. Ford International Airport have launched a new campaign to ensure travelers’ safety as activity begins to rebound from the coronavirus pandemic. The “Fly Safe. Fly Ford.” campaign announced on July 6 highlights what officials anticipate will be long-term

changes at the airport, such as continuous cleaning protocols, limiting contact between travelers and employees, and installing new HVAC equipment to improve indoor air quality. “The intent is to make sure passengers have a level of confidence in the safety and health of being able to fly with a comfortable travel experience,” said Tory Richardson, president and CEO of the Airport Authority, which oversees See AIRPORT on page 3

The Gerald R. Ford International Airport’s “Fly Safe. Fly Ford.” program includes new cleaning protocols, restrictions on person-to-person contact and upgraded HVAC equipment for better air quality. COURTESY PHOTO

New SE Grand Rapids market to serve up fresh food, entrepreneurism PAGE 18

INSIDE:

Small Biz M&A SEE PAGE 16

Five Important Considerations for Safer Back-to-Work Screening

afeguards required by Executive Order 2020-114 involve screening employees and visitors prior to entering a workplace. For facilities with relatively low entrance/exit counts, screening requirements may be no more than a minor inconvenience. However, facilities like manufacturers with a labor model based on shiftwork have different needs, necessitating efficient screening of groups of employees before they begin work. Some of the required safeguards include daily health questionnaires, temperature screening, dedicated entry points, security measures to prevent bypassing screening stations, and social distancing while queuing. Many facilities are not currently equipped to allow for these activities. In response, several facilities have erected open-air tents or created outdoor queuing lines. Public officials caution COVID-19 will continue to be a threat until a vaccine is available; presumably then, screening protocols will still be necessary when the warm summer temperatures give way to the cold winds of another Michigan winter. Facilities need to prepare now for a sheltered screening area. The future of design may evolve, with screening areas becoming a basic component to building entry designs; similar to how airport security design evolved after 9/11. Until then, facilities need to adapt by utilizing renovation of existing space, creating additions, or erecting temporary enclosures. Many may elect to pursue temporary enclosures as these can likely be placed into service much quicker and more economically than a permanent solution. Creating an enclosed space for health screening creates certain quandaries that require thoughtful solutions. Five things to consider:

with crevasses or tight, inside corners are difficult to clean. Touchpoints like doors, electronic screens, and writing utensils are special points of consideration. Privacy. Health privacy laws, such as Health Insurance Portability and Accountability Act (HIPAA), need to be honored, records need to be secured and interactions between health screeners and employees are to be guarded. Use social distancing to your advantage, providing a little space between those being screened and those waiting in line helps maintain privacy.

Temperature. Required temperature screenings are typically conducted in one of two ways: employee selfreporting or onsite, touchless temperature assessment. Most temperature screenings will occur as part of the facility entry screening procedure. Touchless thermometers have a narrow ambient temperature operational range; they also require the tested person be acclimated to room temperatures. An outdoor, unconditioned environment will not be conducive to outdoor temperature screenings this winter, or even this summer as temperatures rise. Airflow and Filtration. Space conditioning requires special consideration. With airborne pathogens, conditioning and movement of air in enclosed spaces can be a liability if improperly addressed. However, if handled correctly, ventilation can increase protection against the spread of infection. The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) advises that a combination of dilution and

Testing Procedure. Will an outside health assessment company be contracted to provide the screenings, or will internal employees be reassigned to fill this role? It may be beneficial to outsource this task to an outside organization that is responsible for PPE, record-keeping, and liabilities associated with providing health screenings. Companies specializing in this type of activity may also have access to technologies and procedures that help expedite screening such as touchless or paperless screening questionnaires.

filtration is very successful in removing pathogens from enclosed spaces. Using high volumes of outdoor air utilizing laminar flow diffusors effectively dilutes contaminates in the air while filters with a minimum efficiency reporting value (MERV) rating of 13 should be used to filter contaminates. These strategies have been successfully employed in hospitals and laboratories for years. UV light sterilization, bipolar ionization, and maintaining humidity levels between 40%-60% are additional strategies but typically come with higher costs. Consider equipment selections carefully, there are a multitude of system types available and not all systems are well suited to the demands imposed by high outside air volumes or the pressure-drop created from the use of MERV 13 filters.

As the wheels of industry begin turning again and the rush to reopen subsides, we look ahead for strategies to safely maintain our workplaces and avoid additional pandemic-related shutdowns. Presumably, the need for screening protocols is going to remain with us for at least another season. Giving thought to the issue now allows for development of effective and efficient solutions for your facility before our warm, sunny summer turns to another cold, windy winter.

Cleanability. Hard, non-porous materials compatible with the intended cleaning products are required. Materials such as carpet, fabric, and even improperly finished gypsum board are difficult to sanitize. Layouts

Contractors brace for supply chain disruptions

UPCOMING ISSUES

PREPARING FOR THE SURGE Hospitals look to add beds, meet staffing challenge in COVID pandemic By MARK SANCHEZ | MiBiz msanchez@mibiz.com

line in Bronson Methodist Hospital’s emergency state filing to temporarily add 300 beds epitomizes the main challenge for boosting capacity for an expected surge in COVID-19

West Michigan will work differently post COVID-19

patients in the coming weeks. How The Kalamazoo hospital’s employers ability to put the added beds into operation “will be depencan help with dent on staffing,” according mental health to a filing with the Michigan

PAGE 2

Department of Health and PAGE 13

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

SBA races to provide relief to small businesses, but some hiccups remain By MARK SANCHEZ | MiBiz msanchez@mibiz.com

he sheer volume of small businesses that have sought federal relief loans illustrates the depth and scope of the economic pain brought on by the COVID-19 pandemic. The U.S. Small Business Administration quickly blew through $349 billion in just 14 days and approved loans for 1.6 million small businesses nationwide before halting new applications April 16 for the Paycheck Protection Program. That’s as many loans as the SBA processed in the previous 14 years combined. Congress last week allocated another $320 billion for the PPP, $30 billion of which will go to federally designated community development financial institutions, plus banks and credit unions with less than $10 billion in assets. Banks and credit unions with assets between $10 billion and $50 billion will get another $30 billion. The legislation also directed $60 billion in funding to the SBA’s Economic Injury Disaster Loan program Congress set up earlier in the pandemic. Before running out of money for the first round of the PPP, the SBA approved relief loans totaling $10.38 billion for nearly 43,500 small businesses in Michigan. Executives at banks and credit unions say applications for the PPP came from across the economy, including Main Street-type businesses, companies up to the 500-employee threshold, the hospitality sector, restaurants, manufacturers and retailers that have been hurt by the pandemic and resulting stay-at-home orders. “If you connect enough dots, and some you have to connect more dots than others, you can almost see where every single human being and every

7.20.2020

9.14.2020

Family Business

8.3.2020

Contract Deadline: 9.2.2020

9 West Michigan Industries Being Distrupted by AI Industry 4.0 Contract Deadline: 7.22.2020

9.28.2020

Diversity/Equity/Inclusion Contract Deadline: 9.16.2020

8.17.2020

10.12.2020

Contract Deadline: 8.5.2020

Contract Deadline: 9.30.2020

Automotive Supply Chain

Industry 4.0

See SBA LOANS on page 8

10.26.2020

Contract Deadline: 8.19.2020

Contract Deadline: 10.14.2020

Insurance

Mergers & Acquisitions

JULY 6, 2020 / MiBiz

By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com

hospitals a fighting chance against the highly contagious COVID-19. Once they got past the chaos in which the rules seemingly changed by the hour, they all needed to take a step back, assess what their next steps would be and recalibrate their business strategy. In many cases, that strategy focused on figuring out how best to take care of employees in the short term while also addressing the company’s viability in the long term as the crisis continues to play out without a realistic end date in sight. To that end, business owners also thrust themselves into applying for government relief programs, finding novel ways to generate revenue, and — this being West Michigan — figuring out how they could use their platforms to help others in need. Here are six stories of local executives dealing with the crisis, coping with the “new normal,” and looking ahead to how their companies and society could change as a result of the pandemic.

the region’s busiest tourist towns, as Main Streets across the state are bearing the brunt of COVID19 closures. While some restaurants and breweries have pivoted to takeout and delivery, retailers deemed nonessential fall into more of a gray area. Some have shut down entirely, while others are transitioning online to remain at least partially open for e-commerce. Under a new executive order issued April 24, those stores now have more clarity: Retailers selling non-essential items can open for curbside pick-up and for delivery. See LAKESHORE RETAILERS on page 10

s the owner of longtime downtown Grand Haven retailer Down To Earth, Sholeh Veiseh has turned to hosting virtual fashion shows and offering sales on social media to bring in some revenue during the coronavirus closure. Gov. Gretchen Whitmer’s initial executive order closing non-essential businesses through April 30 shuttered most storefronts on Washington Avenue, an established shopping district in one of

How should marketing change in the wake of COVID-19? PAGE 9

MAY 11, 2020 • VOL. 32/NO. 15 • $3.00

VC, PE firms steer companies through crisis

Remote working Aerospace puts broadband suppliers accessbrace in for continued spotlight turbulence PAGE 5

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

After unbridled growth, Michigan craft Experts warn of beverage companies possible mental gird for devastating lows By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com

ichigan’s craft beverage industry is facing a challenge with the economic fallout from the coronavirus pandemic that is unlike any other in its history. Many companies have been completely closed for weeks as a result of state-mandated orders to end all

health ‘aftershock’ from COVID-19

in-person dining and drinking in their establishments in an effort to curb the spread of COVID-19. For the first time in many of their histories, the owners of breweries, By MARK SANCHEZ | MiBiz distilleries, wineries and cideries have msanchez@mibiz.com been forced to lay off staff members — theirf the companies’ direct connecSARS outbreak 17 years tions with consumers in their inditapago in Asia is an accurate rooms cator, and bars. behavioral health care Theproviders craft beverage companies that could see a patient remain are coming leveraging skeleton surgeopen in the 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 PAGE 12 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.” “ The wa r n in g sig n s a re 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.

crews for to-go orders, curbside pickup or home delivery of beverages and food. Meanwhile, distilleries have repurposed their stills to produce ethanol in an effort to answer the call to boost critical supplies of hand sanitizer. These scrappy and resilient companies are finding revenue wherever they can, but few could have prepared for such an abrupt sea change that’s been brought on by the pandemic.

www.mibiz.com

INSIDE:

Industry 4.0 SEE PAGE 4

EXPLORING WHAT’S NEXT

In a survey compiled by Boulder, Colo.-based Brewers Association in early April, 14.1 percent of respondents indicated their business could sustain for four weeks or less if the current conditions persisted. An additional 45.8 percent of respondents said their businesses could only sustain for one to three months if the social distancing measures and restrictions on sit-down service remain in place. See CRAFT BEVERAGE on page 14

Experts preview workplace changes as economy slowly re-emerges By MARK SANCHEZ | MiBiz msanchez@mibiz.com

COPING WITH Drinking economy COVID-19

Foodservice disruptions cause crisis for farmers

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

LAKESHORE RETAILERS ADAPT, MOVE ONLINE AS SOME SCRAMBLE TO STAY AFLOAT By MARLA MILLER | MiBiz mmiller@mibiz.com

www.mibiz.com

State, local officials seek federal help as COVID-19 budget deficits loom

hrinking revenue from sales, income and gasoline taxes could cost state and local governments billions of dollars in the coming months, potentially cutting already stretched services and leading to a prolonged recession without sufficient federal support. all it the six stages of COVID-19 copState officials reported earlier this month Human Services. ing: Experiencing shock. Assessing. that the fiscal year general fund and school As with every hospital durRecalibrating. Cash Flowing. Helping. www.mibiz.com aid budgets ending on ing the COVID-19 pandemic, Imagining. Sept. 30 could see a $1 bilBronson has been planning That seems to sum up an emotional and intellion to $3 billion shortfall, for a patient surge by simultalectual path many West Michigan business owna result of the public health neously looking at how to add ers have travelled recently as their companies measures taken to prevent capacity and then staff those faced extraordinary circumstances brought on the spread of the coronabeds, if needed. by the spread of coronavirus. virus. The higher range is “In order to care for an Over the last two weeks, MiBiz spoke with a decline of more than 10 increased number of patients, owners and executives in a variety of industries. percent. Next fiscal year, Bronson plans to redeploy staff No matter what sector they work in, they all Bartik the deficit could be up to members who are not curpretty much experienced the same rollercoaster $4 billion. Yet those are just estimates at this rently in clinical roles, but who of emotions. point, and it’s difficult to predict the ultimate are clinically First came the shock at how fast the virus was effect of the pandemic on the budget. licensed. We spreading throughout the United States, then “My own guess is it might be worse than h a ve ma n y panic when it became clear that all non-essenthat,” said Tim Bartik, senior economist with RNs who tial businesses in Michigan would need to close the Kalamazoo-based W.E. Upjohn Institute work in eduto help “flatten the curve” and give the state’s See BUSINESS OWNERS REACT on page 12 cation, qualSee STATE BUDGET on page 14 ity and safety, By MARK SANCHEZ | MiBiz management msanchez@mibiz.com and other Neely departments n normal who will return totimes, a roleTrinity of pro- Health’s seven vidinghospitals patient across care,”Michigan Denise generate comincome Neely, bined senioroperating vice president forof $9 million to $10Healthcare million a month. By MARK SANCHEZ | MiBiz revenues, assess the effects, and conportfolio compavisualize how we will steer out of this Bronson and chief But the current operating msanchez@mibiz.com tinually revise projections based on nies. We immediately fog,” Parker said. “Sometimes, it is operating officer and chief environment is far from normal, and the COVID-19 panthe data they see. shifted into crisis difficult for a small company in the nursing officer for Bronson demic has pushed said the Catholic health sys-he COVID-19 pandemic that Investment firms say they continue management mode trenches to see the entire battlefield. Methodist Hospital, in a tem’s financial to scout for new deals, although some and began working We can provide that vision and bring statement to MiBiz.performance deep into thedismantled daily routines red. and hammered the economy are generally doing so at a slower pace. each step of the probest practices, along with resources “We are currently identifyThestaff Michigan for Trinityhas forced investors to pivot Their immediate priority is to focus cess in parallel,” Tim to help them develop and implement ing those membersoperations and will Health, the parent corporation along with the companies they back on portfolio companies in which they Parker, the president safe and smart strategies.” refresh them onLivonia-based current processes Parker of Mercy Health West care. Michigan and Saint financially. have already invested to help them of Grand RapidsGrand Angels has angel investor before they return to in clinical Joseph Venture capital and private equity navigate the crisis, and in some cases based Grand Angels, groups in West Michigan and affiliWe are also calling on retirees whoMercy Health System in Southeast investors contacted by MiBiz say provide an injection of capital. wrote in an email to MiBiz. ates in Kalamazoo, Detroit and Flint. may be willing to return to the a $50advised portfolio companies they’ve “The crisis certainly caused a sud“One aspect of our role is to help The investment firm closed in late workforce,” Neely said. Michigan, recorded toloss stayforsafe, preserve cash, control den change in the way we all work companies deal with the current realiDecember on $11.7 million raised See SURGE on page 17 million operating March, “and remember See VC/PE on page 18 expenses and capital spending, secure and live. Its impact jolted us and our ties and at the same time help them in March half the month was a normal month,” President and CEO E R I O D I C A L said S Rob Casalou. The operating loss Casalou stems from the lost revenue from canceling non-essential surgeries and procedures, combined with ramped up spending to test and care for COVID-19 patients. See FINANCIAL CRISIS on page 6 PAGE 3

Downtown Grand Haven. MIBIZ PHOTO: MARLA MILLER

See MENTAL HEALTH on page 6

8.31.2020

Business owners discuss reacting, coping and planning for the future in the era of coronavirus

Health systems face financial crisis brought on by pandemic

TRIAL BY FIRE:

Contract Deadline: 7.8.2020

PAGE 16

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

APRIL 13, 2020 • VOL. 32/NO. 13 • $3.00

APRIL 27, 2020 • VOL. 32/NO. 14 • $3.00

West Michigan’s Tribal Economy

Minority biz leaders face barriers to recovery

PAGE 9

INSIDE:

SEE PAGE 14

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

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

Construction industry adapts to new safety protocols PAGE 11

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

SPORTS

Continued from page 1 business to local hotels, the West Michigan Sports Commission has seen major disruptions during the months-long COVID-19 pandemic. A once-robust schedule of youth and amateur sports from a local, statewide and regional scope has been ravaged. Now, Guswiler and his team find themselves mostly managing cancellations, trying to shift around the schedule to make many of the events work, whether that’s in the fall or into 2021. Still, many events have proven to be unsalvageable. Guswiler said that, to date, the commission has had 51 cancellations this year — events that are completely lost. “Some of those were assisted events, some we were partnered with and we had control over,” Guswiler said of the cancellations. “But, it’s 51 canceled events that we just couldn’t do anything about. That amounts to over 150,000 event attendees that would have participated and nearly 30,000 room nights, which our hotels desperately need. “We always associate a visitor spend based on the number of people that would come in and we use industry figures. It amounts to over $45 million that was lost in spending from these events not happening. That’s been tough to swallow.” Guswiler said that part of the reason he’s optimistic that action will ramp up quickly is because amateur and youth sports are resilient, plus families and kids are itching to get out and compete. Even during a pandemic, when families might be skittish to travel long distances, WMSC events are accessible. “Most of this work we are doing has drivability,” Guswiler said. “People drive over from Detroit metro and from our surrounding states. People will start to move in when we get the green light. We saw that with what we were able to do under the current guidance, and we’ve heard some hotels have had some impact from that (but) it’s not nearly enough right now. Where we should be at is 70 or 80 percent occupancy on some of these weekends — an average occupancy certainly in the 60s. We’re still down in the teens or just slightly better. “It’s been a big hit. We’re hoping to come out of it sooner or later.” Small Experience Grand Rapids is a close partner with WMSC in attracting tourism and convention spending into the area. Doug Small, president and CEO of Experience Grand Rapids, credited the Sports Commission as

The West Michigan Sports Commission is moving forward with events at Art Van Sports Complex this month. COURTESY PHOTO playing a vital role in helping bring record hotel revenue to Grand Rapids in the past. “The traditional convention and meeting groups that we tend to get involved with, most of the time — not always — is midweek business that tends to fill … hotels or convention centers,” Small said. “What Mike brings in helps fill a void. It helps fill weekends, especially during the summer and fall periods, and most of his sports groups use the suburban, select service hotels that really could use that boost of business, especially on weekends. It’s been the perfect scenario for us.”

Sports begin to stir The West Michigan Sports Commission has a few different arms to its business model, and one of the segments is starting to see some activity. The commission operates the Art Van Sports Complex in Rockford, an 80-acre baseball and softball complex with eight total fields that has seen some cancellations but is poised to host events this month that comply with health guidelines. Some of the regular organizations the complex hosts include Game Day USA, USSSA, Blue Chip Softball and VetSports. Guswiler and his team had hoped to open the complex in early to mid June, but were unable to

do so. The organization saw nine canceled tournaments in total. Now, the WMSC is installing measures to host its remaining events in a safe manner. Parking fees, facility rental and concessions are the primary revenue centers for the Art Van Sports Complex. “To some extent, we want people up there and buying snacks and candy, but we want them doing it smart and safe,” Guswiler said. The West Michigan Sports Commission also operates a separate nonprofit called the Michigan Sports Alliance, which was established in 2016 in order to operate Meijer State Games of Michigan’s Winter and Summer Games. The Meijer State Games has been another high-profile event that attracts athletes from all over the state and serves as an economic driver for the local area. This year, the Games will forge ahead, but in a greatly pared-down fashion. Executive Director Eric Engelbarts and his team hand-picked sports in which athletes could easily adhere to health guidelines, as well as replaced some of the sports with virtual competitions that have been met with mixed reception. It would have been the 11th year of the Meijer State Summer Games, and Engelbarts said he was pleased to host them in any form. “Overall, it’s one of those things that people have not been able to get out and go anywhere, so the fact that the event is up and running, they’re super excited to be out and see other people,” he said. “There is a lot of excitement out there.” Registration fees and sponsorships drive the business model for the Games. Registration fees fell flat this year with most of the sports being canceled but Engelbarts pointed to the strong partnerships with long-time sponsors as an anchor for the organization during this rough patch. They include title sponsor Meijer Inc., in addition to companies like Metro Health and Lake Michigan Credit Union. “A lot of them have been with us for five or 10 years,” Engelbarts said. “Meijer has been with us from the beginning. Their support for the event has not wavered because of this.” While sports tourism like many other industries has slowed down to a crawl, Guswiler predicted it would lead the charge when the pandemic has subsided. “I think it’s going to be one of the first generators of tourism that comes back and gets what we call heads in beds,” he said. “That encourages me and encourages my team to keep working and looking at opportunities that are out there.”

AIRPORT

Continued from page 1 the operations. “It’s designed to give them an opportunity to understand what may be different than what they experienced four to five months ago when traveling.” The campaign comes as passenger travel begins to rebound from the depths of the pandemic in April and May, when about 95 percent of travel was eliminated from Grand Rapids, mirroring trends across the country. Richardson said it’s been a “slow and steady pace” to get back to a 75-80 percent drop in passenger travel from a year ago. “A lot of it is predicated on what’s available and what flights airlines are putting back in the market,” he said. Prior to the pandemic, the Grand Rapids airport served 36 nonstop flights, but that’s expected to contract to 22, per the July forecast. The airport now serves about 1,5002,000 passengers per day, down from 6,000-7,000 daily a year ago. “The worst part is behind us,” Richardson said. “We hit the bottom, started climbing out and we’re making steady progress on that. Hopefully by the end of this year, we’re about 55 percent of where we were a year ago.” Visit www.mibiz.com

Air travel via Gerald R. Ford International Airport plummeted about 95 percent in the depths of the pandemic and has been slow to rebound. The facility sees about 1,500-2,000 passengers per day, well off the 6,0007,000 people who went through the gates on an average day a year ago. COURTESY PHOTO

The passenger travel decline has meant revenue losses and layoffs for both the airport authority and its vendors. Most recently, Swissport disclosed that it had laid off 55 baggage handling employees since April, cuts that are expected to be permanent. The Airport Authority had roughly a dozen employees who took an early retirement on top of staff reductions “across the board,” which helped bring expenses more in line

with revenues, Richardson said. Year to date, the airport has experienced a roughly $12 million revenue loss, including $5 million in April. “We think June will start to show a little better progress,” he said. The Grand Rapids airport also saw a slight increase in passengers after Delta and United Airlines received permission to divert flights in Kalamazoo and Lansing to Grand Rapids because of lower demand.

The arrangement is expected to be reevaluated in September. While the airport and airlines are taking extra safety precautions, the U.S. Centers for Disease Control and Prevention still advises that people shouldn’t travel if they are sick or have been around a sick person within the past two weeks. Some states, particularly in the Northeast U.S., are requiring travelers from 16 states seeing an uptick in COVID-19 cases and hospitalizations to quarantine for 14 days after arriving. In Grand Rapids, travelers experiencing COVID-19 symptoms are told not to enter the facility. The airport asks travelers to wear facemasks in the facility, and social distancing signs are posted throughout. The goal is to have a “seamless and touchless environment,” Richardson said. Still, the airport can’t entirely control customers’ willingness to travel or when a vaccine is developed. Richardson said these appear to be key factors in whether traffic increases. “We’re confident this recovery will continue, but it will probably take another year or so until we’re out of it,” Richardson said. “Some of these changes are for good and will be necessary improvements that will stick with our industry going forward.”

Published since 1988 MiBiz® is a registered trademark of MiBiz, Inc.

Publisher Brian Edwards / bedwards@mibiz.com Associate Publisher Denise Montambo / denise@mibiz.com Editor Joe Boomgaard / jboomgaard@mibiz.com Managing Editor Andy Balaskovitz / abalaskovitz@mibiz.com (energy, policy) Senior Editor Jayson Bussa / jbussa@mibiz.com Senior Writer Mark Sanchez / msanchez@mibiz.com (finance, health care, life sciences) Staff Writers Kate Carlson / kcarlson@mibiz.com (real estate & development, small biz) Jessica Young / jyoung@mibiz.com (manufacturing, agribusiness, nonprofits) Contributing Reporters Marla Miller, Jane Simons Copy Editor Claire Boomgaard VP of Production & Audience Development Kristi Kortman / kkortman@mibiz.com Senior Advertising Consultant Shelly Keel / skeel@mibiz.com Digital Specialist Danielle Affholter graphics@mibiz.com

Circulation For address corrections or subscriptions, contact MiBiz at 1-877-443-1977 or subscribe@mibiz.com

MiBiz ISSN 1085-4916 • USPS 017-099 Established 1988 MiBiz is published every other week by MiBiz, Inc., P.O. Box 1629, Grand Rapids, MI 49501. Telephone (616) 608-6170. Fax (616) 608-6182. E-mail: info@mibiz.com. Subscription changes: subscribe@mibiz. com. Periodicals Postage is paid at Grand Rapids, MI. POSTMASTER: Send address changes to MiBiz, P.O. Box 1629, Grand Rapids, MI 49501. Subscriptions are available without cost to qualified readers. Paid subscriptions are available to those not meeting qualified circulation requirements. Paid subscriptions are $99/year. Single copy and back issues (when available) are $3 each, plus first class postage. Call 1-877-443-1977 to order. HEADQUARTERS 1059 Wealthy St. SE, #202 Grand Rapids, MI 49506 616-608-6170 phone • 616-608-6182 fax NEWSROOM 1224 Plainfield Ave. NE Grand Rapids, MI 49505 COPYRIGHT ©2020. All Rights Reserved.

Reproduction or use of any portion without permission of the publisher is prohibited.

MiBiz / JULY 6, 2020

MANUFACTURING

New CEO takes reins at BIFMA as industry reels from effects of pandemic By JAYSON BUSSA | MiBiz jbussa@mibiz.com GRAND RAPIDS — Dierdre Jimenez is joining the Business and Institutional Furniture Manufacturers Association at an interesting time. The COVID-19 pandemic has the office furniture industry reeling from plummeting sales, a falloff in new orders and questions over the sector’s role going forward given the dramatic global shift to working from home. Jimenez, the incoming BIFMA president and CEO who will lead the nonprofit trade group as long-time Executive Director Tom Reardon retires, stressed that this giant roadblock facing the $16.6 billion North American industry won’t stop the organization from addressing its long-term goals or agenda. Instead, she acknowledges the present remains an exciting time for the industry in terms of innovation, style and functionality.

“BIFMA has sort of quietly existed, and I think there is opportunity to serve more members and join in partnership with other industry organizations … to help share the message and the value that has been invested in all of this hard work.” — DIERDRA JIMENEZ Incoming President and CEO of BIFMA

“We’re trying not to drop everything we’re doing long term to deal with the short term, but also trying to address any of the short-term needs the industry might have,” Jimenez told MiBiz. Jimenez, who officially takes her post July 7, comes to the position with a background in architecture and interior design. She spent more than 25 years serving in executive and ownership roles in corporate real estate and architecture and engineering consulting. “She brings a lot to the table,” Reardon said of Jimenez. “She has a lot of great background and experience in architecture and interior design and those are groups that we are increasing our communication and outreach to. I am not at all surprised at the profile of the candidate because it aligns perfectly with our go-forward goals.”

Focus on standards Over the last decade, BIFMA has implemented uniform standards specifically tailored to office furniture that measure performance, safety and sustainability. During Reardon’s tenure, this included the introduction of the Level certification program, a tiered evaluation and certification system to measure the social and environmental effects of various furniture products. Level provided transparency and simplicity for consumers who were seeking out furniture that was environmentally sustainable and socially responsible. Reardon said that developing a set of standards was important for the industry since furniture makers often found themselves being pulled in different directions in terms of defining sustainability from client to client. This is an area that Jimenez looks to build on as she takes over the top executive role at BIFMA. “I think the work Tom and the team did in terms of standards and sustainability is recognized and respected industry-wide,” she said.

“The one thing we don’t want to do is disrupt that. We want to maintain that and continue to thoughtfully expand that.” The organization will continue carrying that torch via a compliance program called BIFMA Compliant. The organization originally expected to roll out the public launch of BIFMA Compliant this year. However, complications with the COVID-19 pandemic, which affected test labs, manufacturers and the furniture industry as a whole, pushed back the program until March 2021. The program covers nine mechanical standards that focus on safety and durability and is open to both BIFMA members and non-members alike. Testing is conducted in an ISO 17025 accredited test lab and products that meet the standard are granted permission to use a BIFMA Compliant mark to indicate its designation. BIFMA Compliant is yet another tool that will bring transparency to the consumer, according to Jimenez. “(BIFMA Compliant) is targeted to help the consumer understand which products do comply with the standard and which ones may not,” Jimenez said. “It’s not made to disparage products that haven’t gone through the review process, but it’s more so to make sure when clients are buying products that conform to BIFMA standards, that they know the product was tested and does conform.” “I’m looking at it from a specifier’s perspective … and from a direct buyer’s perspective,” she added. “If I’m looking to make a major investment in furniture, what do I need to know and how simply can I find information?”

Celebrating innovation Aside from furthering existing BIFMA agenda items, one way Jimenez looks to enhance the

WEST MICHIGAN’S LEADING COMMERCIAL ROOFING AND SHEET METAL CONTRACTOR

A SUBSIDIARY OF EAST MUSKEGON ROOFING AND SHEET METAL • EASTMUSKEGON.COM • 231.744.2461

JULY 6, 2020 / MiBiz

Incoming BIFMA President and CEO Dierdre Jimenez starts her position on July 7. COURTESY PHOTO

organization’s effectiveness in serving the industry is to better elevate innovation. “The side of the furniture industry we have not yet celebrated to a degree is the design and innovation side,” she said. “There are some really creative designs coming out in furniture right now and we’re just not elevating them the way we could be. “There have been some extremely innovative products put on the market, and I think helping designers who specify those products and direct buyers who buy those products understand what’s coming next is really a large part of what I’d like to bring to the table.” One way BIFMA plans to do that is by teaming up with NeoCon, the premier industry product trade show and expo held every year at Merchandise Mart in Chicago, to launch Confluence Chicago. The event was scheduled to launch this year and run parallel to NeoCon before it was canceled in reaction to the pandemic. Confluence Chicago, which will now debut in June 2021 right alongside NeoCon, is a threeday summit that aims to connect professionals from across different creative industries and design disciplines to find inspiration and common threads in their work.

Looking to grow Reardon’s departure comes at a time when BIFMA is on solid footing as an organization, which now has record high membership, dues revenue and general revenue. As well, the U.S. market grew by 4.8 percent to $14.77 billion in 2019, with the overall North American market up 4 percent, according to preliminary BIFMA estimates. Jimenez looks to leverage the organization’s health to promote further growth. “There are a number of companies out there that we think we could help,” she said. “We think the services that BIFMA has provided to existing members would be as much appreciated by new members. “There hasn’t been very strong outreach. BIFMA has sort of quietly existed, and I think there is opportunity to serve more members and join in partnership with other industry organizations — from a design perspective to client/ customer organizations — to help share the message and the value that has been invested in all of this hard work.” In addition to Jimenez taking BIFMA’s head role, the organization also voted in Kristie Juster, CEO at Jasper, Ind.-based Kimball International, and Matt Schad, CEO of Comstock Park-based Nucraft Furniture Co., to its board of directors back in May. A more than 15-year industry veteran who leads the family-owned Nucraft, Schad held positions in product development and operations before rising up to CEO. He also has experience as an attorney in Washington, D.C. “It’s certainly a challenging time and I’m looking forward to being a part of the board and helping craft responses to the challenges that are facing the industry,” Schad said. Visit www.mibiz.com

Reardon reflects on industry peaks and valleys during tenure at BIFMA By JAYSON BUSSA | MiBiz jbussa@mibiz.com

weren’t adding heads. But we slowly grew out of it and for a number of reasons.

hen Tom Reardon rose through the ranks of the Business and Institutional Furniture Manufacturers Association (BIFMA) 22 years ago, the trade association was operating in the red. Fast-forward more than two decades later, and BIFMA now enjoys all-time high marks in membership, dues revenue and total revenue. Reardon is set to retire this month, making way for new President and CEO Dierdre Jimenez to step into the organization. Reardon spoke with MiBiz about his time with BIFMA and the volatility in the office furniture industry.

And now the COVID-19 pandemic — any parallels with the others?

You were at BIFMA to witness three major industry downturns. How do they compare? The industry peaked in sales in 2000 — and 2001, 2002 and 2003 were three consecutive years of consecutive decline. So, the cumulative effect of that three-year decline was about a 40-percent drop from the peak in 2000 to the bottom in 2003. It was protracted, just really dragged out. It was unprecedented. In the time that BIFMA has been tracking industry sales since the early ’70s, we never had more than one year of decline. So, three years of decline, and to the magnitude that it was, it was devastating. … Then the financial downturn (hit Reardon in) late 2008. It was calendar year 2009 for our industry that we again experienced a 40-percent drop in sales, but it happened in one year. It was just as devastating at the previous one, but much quicker. We’ve been growing. The economists have sort of called this the ‘jobless recovery’ and our industry was negatively impacted by that. Companies

Again, very, very quick — almost like turning off a faucet. All of a sudden, all businesses are closed and everyone’s working from home. We don’t know what the end looks like yet; we’re in the midst of it right now. Sales went negative in March and again in April. We’re expecting May is probably going to show negative numbers as well. Where’s the bottom and what will the rest of this year look like remains to be seen. … These have been three very different recessions.

Can we expect the pandemic to definitively shape the future trends in office furniture? I’ve joined in on a number of webinars hosted by different design firms. Everyone is trying to figure that out. Virtually overnight, we went from what we knew was normal, whatever that was. It was mostly working together, collaborating with your colleagues. That was, is and will continue to be a thing. Virtually overnight, we had to abandon that work style and go work from home. … Literally overnight, we had to change the way we worked. Before, those changes were much more gradual and much more evolutionary rather than the drastic change that occurred all at once. But we adapted.

What has changed since 2000 and how has that affected the industry’s fight to return to its prior peak? There are a number of reasons for the industry not having recovered to our peak in calendar year 2000, one being that imported product from outside of the U.S. has increased dramatically over the last 20 years. In the ’90s, U.S. exports of office furniture were roughly equal to our imports. They were almost a wash in the early ’90s. Exports started increasing in the late ’90s and

continue to increase and accelerate. Even if our market were consuming the same amount of product, the domestic sales are going to be less because there is more coming from offshore.

Under your guidance, BIFMA has championed sustainability in the industry. How has that met the needs of industry professionals? What was happening back in the mid 2000s (is that) sustainability was starting to become much more of a priority for a lot of clients. The LEED green building rating system was driving a lot of that change and customers were starting to specify (sustainable products). Everyone was defining sustainability differently with their own lens and own priorities. The industry was trying to respond to those and oftentimes being pulled in different directions depending on the customer they were talking to. What BIFMA did in establishing a sustainability standard, it was written specifically for furniture. Rather than being generic, it was much more relatable to the products our industry produces. It gave the entire industry one set of guidelines, one standard to point to and work toward. The industry was quick to embrace it.

Was it your mission to come in as executive director and put BIFMA on stronger financial footing? We were operating in the red. The board at that time said, ‘Tom, we want to give you this leadership position, but you need to understand that we cannot tolerate any more budget deficits. You have to turn this organization around financially.’ Those were sort of my marching orders. … Through a combination of cost cutting and revenue generation, we very quickly turned the organization around and started operating in the black and have rebuilt the accumulated surplus. … But, we’ve done a lot of other good work. We accomplished a lot on behalf of the industry and invested a lot in the industry over that time.

TOP 3 BENEFITS OF IIOT FOR MANUFACTURERS

ven before the current pandemic, manufacturers faced increased challenges from industry and government regulations, and customer demands for lower prices and faster delivery. Now, strain on the global supply chain and economic pressures at home mean the lean operations of years past just aren’t enough to maintain a competitive edge. More than ever, manufacturers need connected systems to ensure that every opportunity for time and cost savings is acted upon. Enter the IIoT. Unlike the consumer-facing Internet of Things (IoT) with connected smart phones, cars or even appliances, the Industrial Internet of Things connects devices to provide data visibility, improve performance, or enable automation in a manufacturing environment. The IIoT can drive significant benefits for manufacturers operating in the new business climate of 2020 and beyond.

Ensure Data Integrity The backbone of the IIoT is data. Not only does it allow data to be collected from PLCs, machines, scales and more, but lets you analyze the data to put it to work, addressing inefficiency and waste throughout the shop floor. In order to make informed decisions, it’s critical to ensure access to real-time metrics from each stage of the manufacturing process. For example, IIoT connected devices can help add visibility by pulling data from automated handling equipment, retrieval systems, MES or proximity sensors. In fact, a recent study from IoT Analytics concludes that “IIoT platforms are beginning to replace MES and related applications, including production maintenance, quality, and inventory management.”

Visit www.mibiz.com

This means IIoT systems bring the advantage of a single system of record for data integrity. Automated data collection eliminates time consuming and error-prone manual data entry. In turn, managers can reduce the time spent gathering reports while improving reaction time to address problems as they happen.

Add Real-Time KPIs Problems on the shop floor can include everything from machine downtime to misplaced product and quality control. Each issue increases inefficiency, slowing down production time and increasing costs from labor and material waste. The right IIoT system identifies where and when issues occur, making KPIs available from a single dashboard, without manual calculations. For instance, a real-time view of overall equipment efficiency (OEE) helps you identify and address areas for equipment improvement. In addition, you can track machine and user activities and events without the complexity of using many systems.

Cut Waste & Inefficiency Apart from machine monitoring, the IIoT provides insights to costs incurred from material waste and inefficiency. Identifying bottlenecks from workflows is key to protecting your bottom line. Even before the pandemic, manufacturing and warehousing faced a labor shortage. Now, with further reductions in available workers, making the most of your labor force is more important than ever.

The IIoT-connected shop floor collects and updates labor data. This can include analyzing scheduled time versus direct/indirect time, or identifying where goals can be reset to create optimal output and scheduling of jobs.

manufacturers must add real-time access to critical information generated across the organization. The IIoT makes this possible by seamlessly integrating with multiple databases, machines, equipment and business systems.

Along with labor tracking, connected devices can add visibility to processes that make a critical difference in production costs. For instance, a recent study by ToolingU and SME said “16 percent of manufacturers report scrap and rework rates of 4 percent of sales or higher: i.e., a $50 million plant is effectively wasting $2 million to revise or discard products.” The benefits of identifying and addressing unnecessary scrap and rework are plain to see.

The IIoT is nothing new to Radley. For over 45 years, Radley’s solutions for integrated data collection have helped manufacturers gain real-time visibility to their processes, automating tasks and increasing efficiency along the way. Now we bring our expertise together with today’s world of internet-connected devices and Cloud computing. From monitoring machine downtime and maintenance, to regulation compliance and quality control, Radley brings the IIoT together to truly maximize on your data. Learn more and request a free demo at www.radley.com.

The Time Has Come 2020 has shed new light on the need to optimize manufacturing workflows to cut costs while maximizing productivity. Last century’s lean manufacturing and production methodology has given way to today’s IIoT, with a surge of transformative technology driving the industry. To maintain a competitive edge,

MiBiz / JULY 6, 2020

MANUFACTURING

Automation firms pitch robots as solution to social distancing for manufacturers By JESSICA YOUNG | MiBiz jyoung@mibiz.com

obotics and automation could offer manufacturers a key way forward to operating in the postcoronavirus environment because of their ability to reduce workplace contamination and worker interactions. That’s according to Tim Boeve, president and owner of Zeeland-based Hil-Man Automation LLC, who thinks of robots as the ultimate solution to a problem that’s become top of mind for manufacturing executives in the months after COVID-19 first made its way into the corporate lexicon. “We have always built equipment to minimize human input,” Boeve said. “Robotic cells and the like are more dependable than the human process.” West Michigan manufacturers across a variety of sectors are rethinking floor layouts because of the need for social distancing practices that can reduce outbreaks of COVID-19. Limiting face-to-face contact with others is the best way to subdue the spread of the deadly virus, according to the Centers for Disease Control and Prevention. To practice social distancing, people must stay at least 6 feet from others infected with the virus, many of whom may not outwardly show symptoms or signs of the disease. While Troy-based Precision Extraction Solutions designed its KPD series of industrial extractors to reduce overhead for manufacturers while increasing productivity,

the automated system is in demand because of the need to change working conditions to slow the spread of the coronavirus. The company’s emerging cannabis technology, released in late 2019, has been deployed by some of the largest cannabis brands and manufacturers around the world, according to Nick Tennant, founder and chief technical officer at Precision Extraction Solutions. The KPD series of machinery auto-

to batch processing,” Tennant said. “Batch processing is extremely laborious and if you think about having seven or eight or nine extractors to be able to equal the throughput that something like this (KPD extractor) does, you’re talking about running those batch extractors 24 hours a day, you’re talking about having three shifts of people and you may well employ 40, 50, 60 employees in order to do the same work that four employees could do with a plant such as this.” In addition to allowing processing companies to scale their operations and increase output while maintaining social distancing, the modular, self-contained system can be installed inside or outdoors and takes just a few months to deliver, which is important as manufacturers scurry to get back to pre-COVID production levels. “It’s plug and play,” Tennant said. “You can — JERRY FOSTER drop it onto a slab on a Chief Technology Officer at Plex Systems Inc. farm, you can drop it in an industrial building or any number of turnkey solutions.” mates the process of extracting cannabis used for making CBD products and Shift to recovery THC distillates like vapes and edibles. The KPD series requires two to four Manufacturers are already doing what operators compared to upwards of 30 it takes to get back to pre-COVID propeople to operate alternative “batch duction levels as quickly as possible, processing” setups with similar proaccording to Jerry Foster, chief techcessing rates, according to Tennant. nology officer at Troy-based Plex “People typically have unreasonSystems Inc., a provider of enterprise able expectations when it comes resource planning technology.

“As manufacturers look to spread out their line workers, the use of cobots will become more attractive by allowing for more worker density on the line, where we can no longer put humans shoulder-to-shoulder.”

Tim Boeve, president and owner of Zeeland-based Hil-Man Automation LLC, views automation as a key option for manufacturers to address social distancing concerns on their shop floors. COURTESY PHOTO “Due to social distancing requirements that we expect will continue for months ahead, we expect that the appetite for cloud-based solutions and automation tools, both of which help address workplace health and safety requirements, will attract more interest in the near future,” Foster said. Plex Systems tracks data on thousands of factories around the world and has been monitoring production across multiple industries throughout the pandemic. The food and beverage industry has already surpassed pre-COVID-19 production levels, according to the data. Many industries are not far behind with production rates at about 75 percent compared to preCOVID-19 levels. North America is “surging,” Foster said, posting 54 percent growth in production transactions as factories reopened. “Consumer demand seems to be a driving force in sector recovery, combined with that industry’s ability to manage workforce health and safety at scale,” Foster said. “Automotive suppliers have been relatively quick to recover from their all-time low in April because of pent-up demand from buyers, which has put pressure on automakers and their suppliers to restart operations and deliver new vehicles.” Comparatively, aerospace and defense manufacturers have been slower to recover because of the lack of demand for commercial flights. Michigan automotive production activity is at 78 percent of its activity during the week of March 8, just prior to the COVID-19 restrictions. From its lowest point of production, the week of April 5, Michigan automotive production activity has increased by a nearly incomprehensible 1,471 percent, according to Foster.

Role for tech

Precision Extraction Solutions, founded by Nick Tennant, who serves as the company’s chief technical officer, developed an automated solution to make cannabis extracts used in CBD products and marijuana vapes and edibles. COURTESY PHOTO

JULY 6, 2020 / MiBiz

Plex Systems has also been tracking worker login information relative to productivity among smart manufacturers. Through the worst of the pandemic, logins in North America dropped to 44 percent of pre-coronavirus levels, while production activity dropped to around 17 percent of pre-coronavirus levels during that same time. This indicates that although operations were reduced, many workers were able to do their jobs remotely and rely on the cloud to keep the company

running, according to Foster. Globally, worker logins are now at 93 percent of pre-COVID-19 levels of activity. Manufacturers will likely continue to invest in solutions like automation, robotics and Industrial Internet of Things (IIoT) that allow for remote machine monitoring and predictive maintenance, or cloud-based technology that lets companies continue to run their operations while reducing the number of staff required on site, according to Foster. “On the shop floor, we’ll likely see workers using augmented reality (or) wearable technology that can deliver real-time work instructions and knowledge along with connected devices such as smart glasses, headsets or tablets and smartphones, all of which allow manufacturing workers to do their jobs without crowding a single workstation to record production,” he said. “As manufacturers look to spread out their line workers, the use of cobots will become more attractive by allowing for more worker density on the line, where we can no longer put humans shoulder-to-shoulder.”

More coming? In the Grand Rapids region, 48 percent of jobs are “susceptible to automation,” according to a January 2019 study from the Brookings Institution, a nonprofit public policy organization based in Washington, D.C. Automation will take place everywhere, but manufacturing tasks in West Michigan are particularly ripe for robotics. In fact, more than 70 percent of manufacturing tasks could be automated, according to the data. While the company has not yet correlated an extreme uptick in requests and new business that are related directly to the coronavirus outbreak, Hil-Man and its subsidiary Precision Dispense Technologies LLC have been busy, according to Boeve. “Our business has been very fortunate,” he said. “We’ve added three new people since the reopening of manufacturing and we have a funnel of new work. I can envision in the future here, when these big companies that we supply equipment to get a better idea of what’s going to happen within the industry, they’ll want to see what they can do to minimize or to create better social distance between operators.” Visit www.mibiz.com

Commercial EVs gain attention from automakers, corporations, environmentalists By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

ajor automakers as well as nascent startups are showing an increased focus on electrified commercial delivery vehicles, hoping to gain market share as corporate demand increases. Last month, Reuters reported that General Motors is planning an electric van geared toward businesses, with production to start late next year at the company’s Detroit-Hamtramck plant. Meanwhile, startups Arrival and Rivian have contracts with United Parcel Service Inc. and Amazon.com, respectively, totaling more than $4 billion. Analysts say the automakers are rushing into a space with notable differences from electrified passenger vehicles. Commercial vehicles provide an opportunity for higher margins and are driven less by customer preference in vehicle type. Companies, meanwhile, can realize cost savings of electric vehicles through less maintenance and fuel costs. “Commercial vehicles are excellent opportunities in many ways for electrification,” said Jukka Kukkonen, chief EV educator with Shift2Electric, a Minnesota-based consulting and training firm. “You’d have to fund the transition to move to new technology, but then you could save a lot by not having to do ongoing maintenance for those and pay for gas. There’s a lot of opportunities in there.” Delivery organizations like Amazon and UPS are suited for electric vehicles, Kukkonen added, with set routes and frequent usage. As well, commercial vehicle manufacturers are taking notice and incorporating electric chassis into their future product plans. That includes The Shyft Group, formerly known as Spartan Motors Inc. with operations in Charlotte, Mich., which last year debuted a pair of electric commercial fleet vehicle concepts: a walk-in van developed with Motiv Power Systems and an electrified last-mile delivery vehicle aimed at the parcel-delivery market.

“Electricity is cheaper than gasoline or diesel on an equivalency basis over a particular number of miles. In the commercial vehicle space, it’s all about being able to deliver your products more cheaply.” — CHARLES GRIFFITH Director of the Climate and Energy Program at Ecology Center

Charles Griffith, director of the Ann Arborbased Ecology Center’s climate and energy program, said vehicle technology has advanced to the point where automakers are now close to rolling out commercial EV models. Ford Motor Co. plans to introduce an electric Transit van for the 2022 model year, while Rivian plans to start building 100,000 electric vans for Amazon next year. GM spokesperson Katlynn Downey responded to questions about GM’s reported interest in electrified commercial vehicles with the following statement: “General Motors is committed to an all-electric future and is implementing a multisegment, scalable EV strategy to get there. At this time, we do not have any announcements to make regarding electric commercial vehicles.” Griffith agrees with the “reasons why this commercial vehicle space makes a lot of sense for electrification,” including fuel savings and maintenance. Visit www.mibiz.com

The commercial truck segment presents a market opportunity to increase the use of electric vehicles because they typically travel set routes on a regular frequency. Electric vehicles offer cost savings on maintenance and fuel compared to traditionally powered vehicles. COURTESY PHOTO “Electricity is cheaper than gasoline or diesel on an equivalency basis over a particular number of miles,” he said. “In the commercial vehicle space, it’s all about being able to deliver your products more cheaply.” By comparison, the consumer vehicle market focuses on style, convenience and other vehicle attributes to cater to buyers’ preferences, Griffith added. Also, larger and more expensive vehicles have a higher profit margin for manufacturers. Clean energy advocates also say the commercial vehicle space could be an avenue for more widespread adoption and reducing emissions from the transportation sector as passenger EV sales still represent a tiny fraction of overall vehicle sales. “Commercial vehicles are responsible for a significant share of air pollution, especially for more traditional air pollutants because of the heavy reliance on diesel,” Griffith said. “When you start thinking of areas where trucks travel the most — more industrial areas of urban cities — you realize those trucks are the primary source of pollution in those neighborhoods. It’s very important from both an environmental and equity standpoint to focus on how we can improve the profile to clean up the emissions from this segment.” Kukkonen said the U.S. overall remains a laggard in EV sales compared to China and Europe, where he said automakers are focusing their attention. “They’re considering the U.S. as a sideshow right now,” he said. “Production numbers are still small, and there are a lot of moving parts.”

Charging infrastructure, corporate demand Should commercial EVs take off, they likely will rely most often on company-owned charging stations as opposed to publicly available chargers. The vehicles are more likely to travel a planned route and return to a central depot. “I think it’s easier for fleets to be able to provide the necessary charging infrastructure of those vehicles,” Griffith said, compared to passenger light-duty vehicles. Additionally, charging the vehicles is more likely to take place overnight, which offers overall electric grid benefits for ratepayers by dispatching power during otherwise low-demand periods. “I don’t really see charging infrastructure being any kind of a problem for (companies),” Kukkonen said. “They just have to do the installation at their facilities and figure out how they’re used.” Large companies’ consideration of electrified fleets comes after corporate demand for clean energy has advanced the development of

renewable energy. Kukkonen said the two issues go “hand in hand,” and if a company has publicly stated climate change goals, transportation is the logical next step after renewable energy. Ceres, a Boston nonprofit focused on corporate sustainability, formed the Corporate Electric Vehicle Alliance earlier this year to help companies with fleet electrification. Members include Consumers Energy, AT&T, DHL and Amazon. As part of its plan to spend Volkswagen

settlement funds, the state Department of Environment, Great Lakes and Energy is planning phases that include funding for local freight vehicles and related charging infrastructure. “There’s an opportunity for fleet managers, both public and private, to take advantage,” Griffith said. “This is a good opportunity to help jumpstart this market. It could help motivate some entity to explore the options they might not have otherwise.”

a provider of CBD supplements and more in Holland, MI has acquired a new e-commerce website ynotcbdmi.com The undersigned served as exclusive web development adviser to Y-Not-CBD.

Affordable, common-sense websites.

MiBiz / JULY 6, 2020

SPORTS

West Michigan colleges and universities grapple with unpredictable athletic budgets By JAYSON BUSSA | MiBiz jbussa@mibiz.com

ate last year, the Cornerstone University athletic department announced the addition of men’s volleyball to its collection of sports programs, as well as plans to renovate a couple of its athletics facilities. With renovations in full swing and a newly signed men’s volleyball coach, operations came to a standstill in the middle of the spring sports season as the COVID-19 pandemic hit, and it’s been like that ever since. “From the standpoint of planning, you always plan for the worst in college athletics and with small colleges or even in business, but now a lot of those plans are coming to reality,” said Aaron Sagraves, athletic director at Cornerstone. “I’ve been thankful to our leadership staff and our coaches for being this open to change. Once you overcome the idea that (operations) are going to look different, that helps. Then you can move forward.” Indeed, college athletics will look different this fall, but with the severity of the COVID-19 pandemic ebbing and flowing, it’s hard to tell exactly how different. Just like their professional and semi-professional counterparts, the athletic programs at colleges and universities throughout West Michigan have seen unprecedented disruptions. However, not all these struggles are equal. While Division 1 programs are left to rectify large budgets that are fueled heavily by external revenue — boosters, broadcasting deals, sponsorships and ticket revenue — the smaller programs around West Michigan grapple with these problems on a smaller scale. “I think the way that we’ve approached it is that, ‘Hey, we’re doing pretty good right now,’” said Sagraves, whose operations are mainly fueled by tuition dollars. “We’re really thankful

for the outlook of our incoming freshman class (size) and the retention for our students coming back. I think it’s looking really good. I’m looking forward to seeing what this fall brings as long as something doesn’t happen, which we’re also preparing for.” As dictated by the National Association of Intercollegiate Athletics (NAIA), Cornerstone cannot conduct team activity until Aug. 15. Athletes are permitted to organize their own practices, but coaches cannot be involved. General conditioning and training is also allowed. The first fall competition for Cornerstone is slated for no earlier than Sept. 5 and all sports will see a slightly abbreviated schedule. These are universal measures that programs at all levels are handling.

Facility rentals a major blow Facility rental and team camps are a big revenue driver for programs like Cornerstone. With gyms remaining closed indefinitely around Michigan because of an executive order from the governor’s office, facility rental is an opportunity that has been completely lost. “We’ve lost the entire month of June from a rental perspective,” Sagraves said. “It’s usually one of our biggest months. We’ve got kids and tournaments — it’s just packed all summer long — and we haven’t had that the entire month. We’re hopeful to get back out in July.” Even for a program with a higher profile like Division 2 Grand Valley State University, this is a source of revenue that drives not just the program as a whole but also individual teams. “Shutting down our facilities and camps is a $900,000 loss just in this year,” said GVSU Athletic Director Keri Becker. “That will certainly have an effect. We’re asking (coaches) to go through an exercise, where they’re — as of today — building their budgets based on their big buckets of expenses (travel, officials and uniforms) and then

Smaller colleges and universities such as Cornerstone University in Grand Rapids rely less on external revenue sources and more on tuition for funding. COURTESY PHOTO

JULY 6, 2020 / MiBiz

Sports at Cornerstone University ground to a halt this spring amid widespread shutdowns related to the COVID-19 pandemic. COURTESY PHOTO we’ll figure out the shortfalls. Then, we can figure out how to fill the gaps, hopefully with money that I have — discretionary money as an AD.” While Division 2 athletics are still not very reliant on external revenue, GVSU has spent the last decade and a half elevating itself into somewhat of a Division 2 powerhouse. This higher profile has made ticket sales and sponsorships a significant source of revenue. The football program generates the lion’s share of that revenue segment. This includes ticket sales and sponsorships that come with visual advertising in Lubbers Stadium, which seats 14,000 fans. But this fall, those 14,000 fans could be more like 4,000 fans — or even worse, no fans. Becker has built budgets that plan on 50 percent of expected revenue for sponsorship advertising and ticket sales, knowing that reality has the potential to be far bleaker. “I’m building my budget based on 50 percent reduction on those buckets,” she said. “That means we’ll still have some capacity somewhere. But I haven’t built a budget based on zero percent. I’m trying to be cautiously optimistic. “I talked to my vice president, and if we get to that space where we get worse than what we think, then I’m going to have to start getting a little deeper into some places that I don’t want to go, and that’s people.”

WMU trims $6 million Western Michigan University Athletic Director Kathy Beauregard has been tip-toeing around the proverbial minefield that is a $6 million athletic budget reduction for the year. This was a byproduct of a projected $88 million budget deficit for the university, which prompted 20-percent cuts across the board. The school’s athletic department also missed out on around $1.5 million that was to be paid out by the NCAA. The NCAA allots certain amounts of money to member schools and their conferences, generated by big money makers like the NCAA men’s basketball tournament in March, which was canceled this year. “This was worst-case planning to cover the fiscal year this year and to also look at what may be potentially coming in the fall,” Beauregard said of the cuts. WMU’s counterparts at Central Michigan University and Eastern Michigan University have both recently dealt with anemic budgets by cutting sports programs. CMU recently announced it would cut men’s track this year because of budgetary constraints related to the COVID-19 pandemic. The Detroit News reported that the move would save CMU $600,000. Unrelated to the pandemic, EMU cut softball,

wrestling, men’s swimming and women’s tennis in March 2018 to address budgetary issues. Beauregard had gone through the process of cutting a sport — men’s track in 2003 — and said she was devastated by it. She and her team have worked to forge ahead without such drastic measures, but Beauregard expects to see more of that happen on a nationwide scale as the pandemic crawls along.

“I’m building my budget based on 50 percent reduction on those buckets. That means we’ll still have some capacity somewhere. But I haven’t built a budget based on zero percent. I’m trying to be cautiously optimistic.” — KERI BECKER Athletic Director of GVSU

WMU has taken small steps to ease the budget — less travel and time on the road (WMU basketball was scheduled to travel to Hawaii this year), amended schedules and more. However, with roughly 84 percent of the budget going to staffing and scholarships, Beauregard said that staff cuts and adjustments to the current scholarships are where the program made up most of its fiscal ground on the heels of the cuts. Football season will be crucial for WMU, with home games played at the 30,000-capacity Waldo Stadium and a road game at Notre Dame University, which guarantees WMU a $1.15 million payout. Beauregard and her team continue to plan out the best ways to keep fans socially distanced and in compliance with safety recommendations when and if they visit campus. “We lowered our revenue projections based on not having full houses or not having a potential game in particular,” Beauregard said. With health guidelines changing seemingly every week, all the athletic directors that spoke with MiBiz echoed the fact that they focus on planning with the information they have in front of them right now. “You have to plan with the information you know now … but give yourself some decisionmaking space, just the ability to pivot,” GVSU’s Becker said. Visit www.mibiz.com

ENERGY

New GR steam plant owner eyes expansion amid downtown growth By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com GRAND RAPIDS — Since the late 1800s, downtown Grand Rapids has been equipped with a network of pipes that heat buildings with steam generated from a series of boilers across from Van Andel Arena. Known as district energy, the concept is seeing a revitalization as a clean energy tool, particularly when the boilers that generate the steam are powered by renewable energy. In Grand Rapids, officials with Vicinity Energy Inc. — which recently acquired the facility from Veolia North America — tout the efficiency rate of producing steam from the natural gas-powered boilers and potential capital cost savings for building owners in lieu of their own heating equipment. Vicinity General Manager J.J. Loew, who took over the position last month, also sees room for growth by adding more customers to the system amid new downtown development. The operation serves roughly 130 downtown customers, and is one of Vicinity’s 18 networks in 11 cities. “The continued expansion of downtown and where this infrastructure is relative to all of the developments going on makes Loew it an opportunity for Grand Rapids to continue to leverage this energy efficient solution,” said Loew, who was previously a branch manager in Grand Rapids for KONE, a global elevator and escalator supplier. “We’ve got capacity to add a large number of buildings even with the system that’s in place now.” Customers can use the steam directly or to power heat exchangers that heat water. Some customers also have steam-driven chillers that cool buildings, Loew said. Vicinity Energy is effectively another utility option and can potentially eliminate or reduce the need for a natural gas connection. The company also is considering adding a cooling component for customers, potentially increasing customers’ energy savings, and may add another plant “in some yet to be determined location.” Since Vicinity Energy was created in January, “there’s an even deeper focus on what we can do for efficiency projects as well as capital expenditures and growing the infrastructure,” Loew said. In late 2019, Antin Infrastructure Partners finalized its acquisition of Veolia’s U.S. district energy assets and renamed as Vicinity Energy. Veolia purchased the plant and infrastructure from Kent County in 2008.

Vicinity Energy owns a waste-to-energy plant in Wisconsin, which Loew said is part of the company’s plan to seek options that can minimize its carbon footprint. Cheri Holman, executive director of the U.S. Green Building Council of West Michigan, said the energy savings from steam versus natural gas can vary. Holman helps oversee the Grand Rapids 2030 District, which was announced in 2015 and aims to reduce energy usage in existing buildings by 50 percent over the next decade. Common approaches for doing so include efficient lighting and upgrading building controls. “I wouldn’t jump to say (steam) is an energy reduction, but one thing I could point out about

steam is it requires less of an upfront investment in equipment,” Holman said. Sam Cummings, managing partner at CWD Real Estate Investment LLC, a major property owner in downtown Grand Rapids that rents office space at 50 Louis Street to Vicinity Energy, agrees on the capital cost savings. “The benefit is clearly that the initial capital costs are significantly less when you’re hooking up to a community power plant versus having to install your own,” Cummings said. However, he added that whether the steam network will deliver cost savings depends on the scenario. “Clearly, the independence” of controlling

Vicinity Energy Inc. recently acquired the downtown Grand Rapids district energy system from Veolia North America. COURTESY PHOTO your own heating system onsite may be a drawback to joining the steam system. CWD owns properties both on and off the network. “We are happy customers of theirs,” he said.

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

Clean energy tool, cost savings Grand Rapids is among dozens of U.S. cities, campuses and facilities that rely on a form of district energy for heating and cooling. The more than 100-year-old concept often was powered by coal power, the cheapest form of electricity for decades. However, district energy managers increasingly see the potential for the technology to reduce cities’ carbon footprints, seeking alternative ways to power the steam generators. Officials in St. Paul, Minn. are transitioning the city’s district energy plant off of coal this year to biomass. A developer in neighboring Minneapolis this year proposed a plan that would use aquifers to heat and cool some buildings as a way to reduce the city’s dependence on natural gas. Loew said the “overall limited carbon footprint and overall efficiency … is one of the big drivers for more and more communities to be engaging with district energy.” Visit www.mibiz.com

www.triangle-inc.com

BRETON VILLAGE MiBiz / JULY 6, 2020

REAL ESTATE & DEVELOPMENT

Construction firms bounce back, remain wary of long-term effects from pandemic By KATE CARLSON | MiBiz kcarlson@mibiz.com

ichigan had the largest percentage increase in construction jobs among dozens of states from April to May, as firms rebounding from COVID-19 are showing cautious optimism in hopes of the overall economy following suit. As workers returned to the job sites after being forced to close as part of coronavirus mitigation measures, Michigan added some 50,500 jobs in the construction industry in May, according to data from the Associated General Contractors of America. That marked an increase of 51.4 percent from April to May, which ranked first among all states in terms of the percentage gain. However, despite the growth, the construction industry employs 29,800 REAL ESTATE fewer workers than + DEVELOPMENT it did in March of Sponsored by this year, around ROCKFORD the beginning of CONSTRUCTION CO. the pandemic. Holland-based EV Construction is still working through a backlog of projects from when nonessential work was put on hold for six weeks across the state to stop the spread of COVID-19. The firm remained 70 percent operational during the shutdown because of jobs that were considered essential in health care and manufacturing. EV Construction furloughed 20 of its 160 employees, but was able to call them all back once the industry reopened. “Some of the furloughs were because of work slowdown, but some of it was lack of access to child care for employees with children,” said John Parker, EV’s vice president of project development. “Now that we’re back to work, last week we had over a 20 percent supplement to our own workforce.” Parker added that new work was still coming in during the shutdown from March 24-May 7. In

the short term, EV Construction is understaffed for labor and has hired 10 people, mostly skilled workers, he said. The Lansing-East Lansing metro area ranked second nationally in terms of percentage growth in construction employment from April to May at 80 percent, or 3,600 jobs, according to AGC. Battle Creek ranked sixth nationally with 67 percent growth in construction employment for adding 600 jobs, while Grand Rapids ranked seventh, having added 10,600 jobs, growth of 65 percent. Elsewhere, monthly percentage gains ranged from 22 percent in Muskegon, 28 percent in Niles/Benton Harbor and 35 percent in Kalamazoo/Portage.

Long-term effects could be grim Despite EV’s business ramping up since the reopening, Parker said his main concern is that the pandemic could have a lagging, long-term negative effect on the industry. “We feel lucky that we don’t have a lot (of projects) in markets more directly affected, but generally our main concern is the projects that will likely now never make it to the drawing board,” Parker said. “For construction, we usually lag behind other industries in the effects of an economic slowdown.” Architecture firms across the country reported a steep decline in billings for the third consecutive month, with the May Architectural Billings Index recording a reading of 32.0, according to the American Institute of Architects. The majority of firms saw their billings decrease. Any reading below 50 indicates a contraction. Still, EV Construction remains generally optimistic, Parker said. The firm is working to diversify its workload based on types of projects and geographic locations, and is pursuing some outof-state work in Texas and Colorado. However, the “economic boost” from lifting lockdowns will not sustain long-term growth for the construction industry, according to AGC of America.

CONSTRUCTION EMPLOYMENT IN MICHIGAN MSA Battle Creek

APRIL 2020

MAY 2020

PERCENT CHANGE

900

1,500

67%

Grand Rapids/ Wyoming

16,200

26,800

65%

Kalamazoo/Portage

4,300

5,800

35%

Lansing/East Lansing

4,500

8,100

80%

Muskegon

1,800

2,200

22%

Niles/Benton Harbor

1,800

2,300

28% SOURCE: AGC OF AMERICA

“Boosting infrastructure spending, protecting firms that are operating safely and encouraging people to return to work will help convert shortterm gains into longer-term growth,” AGC CEO Stephen Sandherr said in a statement. Parker said it’s important for construction companies to maintain strong working capital to continue operating. EV was able to use a Paycheck Protection Program loan to help maintain its financial stability during the shutdown. “Without that assistance, I think that companies like ours and other construction companies might have burned their working capital,” Parker said. “That was a really important part of our story through the shutdown, but we feel strongly we can survive even if more assistance does not come, but we are very much at the mercy of other parts of our economy that we need to recover.” The health of the overall economy is the main concern for Aaron Jonker, who serves as the president and co-owner of Wolverine Building Inc. in Grand Rapids. Jonker said that whether a project is canceled or delayed depends on the client. “We work for a lot of national chains and some have put a pause on projects while others are moving forward even more aggressively because customers are not in the facilities currently, so they see it as time to get construction work done,” Jonker said.

‘Cautious optimism’ Overall, Jonker is pleased with the way the construction industry has responded to the pandemic, specifically related to safety protocols. “Our industry has been one that’s focused on safety for a very long time,” Jonker said. “We’re used to implementing safety changes, so I think we’re uniquely set up to adapt to it relatively quickly.” Chris Beckering, executive vice president of Pioneer Construction, added that construction workers are accustomed to wearing personal protection equipment such as masks on the job. “As of now, we are back to work, and we are working under new policies and procedures and following CDC guidelines,” Beckering said. Pioneer Construction in Grand Rapids was down to about 20 percent of its normal working capacity during the shutdown. It saw a slowdown in the supply chain with some materials, but has been working closely with suppliers and logistics companies to make sure it has materials ready, he said. “We had quite a bit of time to deal with those things and prepare during the weeks we were shut down,” he said. “We’re all kind of waiting to see how things will shake out and what the longterm impacts are going to be. There are a lot of signs of cautious optimism.”

GET THE LATEST E-NEWS SENT TO YOUR INBOX MiBiz publishes free e-newsletters highlighting local news and data, as well as best practices, events and resources: n Morning Edition – A daily roundup of business news and intelligence. n Small Biz – A bi-weekly compendium of news, best practices and events. n Manufacturing Report – A bi-weekly digest of local manufacturing news. n West Michigan Nonprofits Report – A monthly roundup of news and information affecting the nonprofit sector.

JULY 6, 2020 / MiBiz

Visit www.mibiz.com

ECONOMIC DEVELOPMENT CANNABIS

Continued from page 1 fast-tracking businesses from medical to recreational is to jumpstart additional tax revenue during the pandemic. The city is able to collect excise tax dollars only from recreational cannabis businesses, not medical. If the resolution passes, it would likely allow for the sale of recreational cannabis several months sooner than expected. In March, commissioners voted 5-2 to delay recreational applications for six months until Oct. 20. As of mid-June, the city had approved 20 applicants for special land use waivers to allow for medical marijuana provisioning centers, said Kristin Bennet, transportation planning and programs supervisor for the city of Grand Rapids. Bennet said if medical dispensaries are approved on July 7 for the fast track program, then only the 20 approved applicants for medical dispensaries will be able to apply for a special land use waiver to start selling recreational marijuana. This includes the four medical dispensaries that are currently operating in Grand Rapids. T he cit y has made it t h roug h the queue of applica nts apply ing for a medical prov i sion i ng c enter l icense, Ben net s a id . Q ua l i f y i ng properties in t he city that could host — ROBIN a provisioning center are dwindling, SCHNEIDER s h e a d d e d , b u t Executive Director, any future appliMichigan Cannabis cants would have Industry Association to wait until Oct. 20 to apply for recreational sales as initially planned if the July 7 resolution passes. A Colorado firm recently opened Terrapin Care Station, a 35,000-square-foot medical marijuana production facility in Grand Rapids. The new business is not a dispensary, but would be able to supply both recreational and medical cannabis to retailers if commissioners OK the resolution on July 7. Terrapin spokesperson Peter Marcus previously told MiBiz that opening a provisioning center in Grand Rapids is not the company’s priority, but it could be pursued if an opportunity arose. The city is still working out other details related to zoning requirements and promoting equity in the commercial cannabis space. The Cannabis Justice Work Group was formed in February by Grand Rapids City Manager Mark Washington to develop a comprehensive social equity policy that will accompany licensing and land use regulations.

“Kalamazoo moving forward with their adult use program is a big deal.”

Growth elsewhere As Grand Rapids debates its next steps forward, recreational retail stores are operating in several communities across West and Southwest Michigan. “West Michigan traditionally has been slow to get on board with adult-use cannabis sales, and we have recently seen them moving forward and embracing their adult-use program and we’re pleased to see that,” Schneider said. Lowell was the first city in Kent County to allow recreational cannabis sales earlier this year, and Cedar Springs became the second on June 11. Med’s Cafe provisioning center in Lowell is the closest recreational dispensary to Grand Rapids, with all other recreational retail businesses located at least 30 miles from downtown. Visit www.mibiz.com

The Refinery, a medical marijuana provisioning center in Kalamazoo, planned to begin selling recreational products on July 3. Unlike with medical cannabis, taxes from recreational marijuana products go to local communities. COURTESY PHOTO Elsewhere, recreational dispensaries are operating in Battle Creek, Muskegon, Grant, White Cloud, Big Rapids, Douglas and Bangor. Kalamazoo recently opted into recreational sales, with its first dispensary — Lume Cannabis Co. — operating since June 6. “Kalamazoo moving forward with their adult use program is a big deal,” Schneider said. “There are a lot of (medical) retail facilities already there and functioning, and them opting into adult use will help them add jobs and create tax revenue.” That’s part of Tom Farrell’s goal at The Refinery medical provisioning center he coowns in Kalamazoo. The dispensar y was recently approved for its recreational license,

and the plan is to start rolling out adult-use products starting July 3. “Offering recreational should really pick up the speed of our business based on what I’ve seen from Lume,” Farrell said. “I think it’s going to be some growing pains to get used to but it should bring a lot more opportunities and business to the area. We’ll be able to reinvest into the community and do our part and grow as a company.” The Refinery has been selling medical cannabis since December, and is locally owned and operated by Farrell and his father of the same name. “We keep the money we make in the economy in the local area,” Farrell said. “Any money

we make or people we bring in we want to keep everything local. Some of the dispensaries that are chains do some of that, but I also see some hiring managers out of Grand Rapids and Detroit and people commuting back and forth.” There is an opportunity for locally owned cannabis businesses to grow in Kalamazoo, especially with the sale of recreational now being permitted and being in a college town, Farrell said. “A lot of these kids are graduating or leaving the area, but if we can give some of these opportunities to people here I think that’s a great opportunity to keep people in Kalamazoo,” he said.

WHATEVER IS

NEXT…

For Grand Valley students, next is opportunity and innovation. Next is global, connecting and uniting us. It’s local, shaping the spaces in which we work and live. It’s a commitment to progress. Next is where minds are free to imagine what could be. At GVSU, next is now. And whatever’s next for you, we will help you get there.

gvsu.edu/next

MiBiz / JULY 6, 2020

Fly Safe. Fly

Dan Koorndyk Board Chair

Tory Richardson President & CEO

flyford.org/safe 12â&#x20AC;&#x192;

JULY 6, 2020 / MiBiz

Visit www.mibiz.com

To our friends, neighbors and fellow travelers:

Ford.

Each spring, we share an annual report from the Gerald R. Ford International Airport with our community. This spring had been no different. We were putting the finishing touches on articles and photos that had a great story to tell – of record passenger growth, new direct routes, greater community partnerships and the cherry on top of it all: launch of a $90 million expansion of our main concourse to meet this stellar demand.

And then, COVID-19. Like virtually every airport, we were surprised by the velocity of the impact the coronavirus would have on air travel. Our growth halted virtually overnight as we, like every other business in West Michigan, put safety first and complied with our governor’s Stay Home, Stay Safe order. We tabled some construction projects already in process and postponed groundbreaking on important new initiatives. Like all of you, we pivoted to focus exclusively on what mattered most: The health and safety of our team, our airline partners and our flying public. That meant investing in sanitizing and disinfecting and establishing intense new protocols to enforce physical distancing, wearing of facial coverings, hand washing and other best practices designed to stop the spread of COVID-19. It meant working from home, transforming spare rooms and dining room tables into offices where we juggled homework, childcare, meal prep, home maintenance and more to flatten the curve. It meant new ways to build community at a time when we were told we must stay far apart. Throughout it all, Ford Airport remained open, a critical link to the health – and economic recovery – of our region. Our team members set their own worries aside to come in to work to ensure our travel partners could keep flying. Together, we brought much-needed PPE and supplies to hospitals and frontline workers in West Michigan. We brought family members home from around the world. And we connected our friends and neighbors to loved ones in need around the country. Three months ago, when we began preparing this report, we were incredibly proud of the facts, figures and stories we were going to share with our community. And while we

Dan Koorndyk, Chair Gerald R. Ford International Airport Authority Board

Visit www.mibiz.com

still are, that has been eclipsed by an ever greater pride for the tremendous work and dedication we have witnessed from our team and travel partners under these most stressful conditions. We commend each and every one of the Ford Airport family for going above and beyond to keep West Michigan flying safely. We are gratified to see our collective work has helped to slow the spread of COVID-19 in Michigan. Each day, we are grateful to see more passengers come through the terminal. More flights are being added, more destinations are opening up. It is starting to look and feel more normal, although we are a long way from back to normal. But we WILL get there – and get there safely together. We are committed to the economic recovery of West Michigan and have invested significant time and resources to ensure business and leisure travelers will Fly Safe when you Fly Ford. You’ll see a number of safety enhancements when you visit us next time, from hand sanitizer stations throughout the airport to reminders of physical distancing to enhanced sanitation procedures. You can read about these – and more – on our website, FlyFord.org. When the time comes for you to fly again, your Ford Airport team will be here to connect you safely to wherever you need to go. We believe in the power of travel and its ability to bring people from all over the globe together – and we’re not wavering in that belief. As West Michigan’s gateway to the world, we will be here to bid farewell as you travel beyond our community for business or pleasure – and we’ll look forward to welcoming you with a smile when you return home. Fly Safe. Fly Ford. Be well.

Tory Richardson, A.A.E., President & CEO Gerald R. Ford International Airport

MiBiz / JULY 6, 2020

HEALTH BIZ

MSU flexes collaborative strategy developed in West Michigan to forge new partnerships By MARK SANCHEZ | MiBiz msanchez@mibiz.com potential partnership with Henry Ford Health System could follow a similar playbook that Michigan State University wrote over the last decade in building up a medical education and research hub in Grand Rapids. The non-binding letter of intent signed between MSU and the Detroitbased Henry Ford Health System envisions some of the same ideas that have driven MSU’s West Michigan partnerships with Spectrum Health, Mercy Health, the Van Andel Institute, Mary Free Bed Rehabilitation Hospital, Pine Rest Christian Mental Health Services and others. Norm Beauchamp, MSU vice president for health services, has wanted to form additional partnerships and further extend the university’s collaboration on research and education. In Henry Ford, MSU would par tner with a $6.5 billion health system that Beauchamp includes six hospitals and more than 250 care sites in Southeast Michigan, a 1,900-member physician group, and the 570,000-member Health Alliance Plan of Michigan. MSU and Henry Ford first started talking about an alliance about a year ago, Beauchamp said. He quickly found that colleagues at Henry Ford Health System were “kindred spirits” who shared MSU’s vision for forging clinical, education and research partnerships with an aim to improve the affordability and accessibility of health care. “We just started having conversations, and I don’t think it was something of this scale at first, but just the

more we talked about it, the more it just seemed like we could really bring things together in a transformative way and build on all of these things we had been doing in West Michigan and in East Lansing,” Beauchamp said. “One of the goals was, because we built this engine for research and education in East Lansing and we’ve connected it to Grand Rapids: Can we create more of those connections statewide?” In Grand Rapids, MSU’s College of Human Medicine has forged numerous partnerships over the years and developed the $88.1 million Grand Rapids Research Center. MSU is adding to the downtown research park with the Doug Meijer Medical Innovation Building, funded with a $19.5 million donation from Doug Meijer, the former co-chairman of Meijer Inc., and the Meijer Foundation. As well, MSU and McLaren Health Care are developing the University Corporate Research Park in East Lansing that’s part of a $450 million health care project adjacent to campus. The project includes a 240-bed hospital for McLaren, a cancer center, a medical services building, and other facilities for health care, education and medical research. A partnership with Henry Ford would give MSU greater scope and scale in medical education and research, Beauchamp said. The two organizations plan to sign a final agreement in the fall. Henry Ford and the university have long partnered in education through MSU’s College of Osteopathic Medicine and College of Nursing.

Statewide research corridor A June announcement on signing the letter of intent described the potential for an affiliation on shared research, more opportunities for health students,

GROUP & CORPORATE SUBSCRIPTION PACKAGES 14

JULY 6, 2020 / MiBiz

Using a playbook for collaboration that it developed in part in Grand Rapids, Michigan State University plans to partner with Henry Ford Health System in Detroit for research and medical education. COURTESY PHOTO and the long-term potential to develop a joint research institute. Research could focus on health inequities and disparities, social determinants of health, primary care, precision health, population health and cancer. Through the new affiliation, MSU and Henry Ford would expand edu-

of a research corridor of sorts spanning across the state to include East Lansing and Grand Rapids to the west. Bringing Henry Ford into the research partnership “is strengthening the bench in extraordinary ways,” Beauchamp said. “It just scales up and makes a research corridor,” he said. “It’s bringing “One of the goals was, because all of the strengths we built this engine for research we can find to bear and education in East Lansing on one of the greatest challenges sociand we’ve connected it to Grand ety faces, which is Rapids: Can we create more of accessible, affordthose connections statewide?” able, compassionate care.” Beauchamp and — NORM BEAUCHAMP Adnan Munkarah, Vice President for Health Services at MSU Henry Ford Health System executive vice president and cation and training for physicians, chief clinical officer, envision the nurses and other health professionals research work that could occur in with a focus on diversity, retention and Detroit to also extend elsewhere in recruitment, and what the announcethe state. ment termed as “revolutionized training models.” Fostering MSU now does about $800 million collaboration a year in research, Beauchamp said. Combining that with Henry Ford’s Through the partnership with MSU, $100 million in annual research makes researchers and clinicians at Henry for a “$900 million research powFord could reach out and involve erhouse” that would become part their peers in East Lansing and Grand

Rapids in a project. That collaboration also could extend from MSU’s other partners to Henry Ford, they said. “We believe in collaboration. We believe in the opportunity to spread innovation and work together and to collaborate. If you look at discovery and research in health care at the present time, at regional, national and international levels, the biggest discoveries are working through collaboration,” Munkarah said. “We believe that stronger collaboration and stronger partnerships are going to help us as a state advance our health care infrastructures so that we can serve our communities better.” Talks between MSU and Henry Ford about a potential partnership started when Richard “Chip” Davis reached out to Beauchamp after becoming CEO of Henry Ford Hospital in Detroit in November 2018. Beauchamp and Davis had worked together years earlier at Johns Hopkins Medicine in Baltimore, Md., where they had set up a leadership development program. Beauchamp met with Davis and Munkarah and they quickly found that MSU and Henry Ford, which had been wanting to build its research and education base, shared a common vision for the future. “Once we met, we could see that the alignment was there.” he said.

Outfit your team with the essential business-development tool:

Timely, relevant business news. Professionals with sales and business-development responsibilities rely on timely business news and intelligence to drive revenue, create new relevant opportunities and expand brand presence. With MiBiz subscription packages, you can arm your team with 24/7 digital access to real-time news, exclusive stories, market insights and business intelligence about the companies, policies and strategies that are driving Michigan business.

Contact MiBiz today for more information:

616-608-6170 • subscribe@mibiz.com

Visit www.mibiz.com

Physicians group argues state surprise billing legislation offers ‘one-sided solution’ By MARK SANCHEZ | MiBiz msanchez@mibiz.com ills to curb surprise medical billing in Michigan move forward in Lansing without the backing of physicians, who worry the proposed changes in state law would put them at a disadvantage when negotiating future reimbursement contracts with health insurance carriers. While physicians and organizations agree with insurers that patients need protections from surprise billing, they view the legislation that cleared the state House last month as giving health insurers too much power in negotiating future deals. In recent testimony to state legislators, Dr. Bobby Mukkamala, president of the Michigan State Medical Society, called the four-bill package a “one-sided solution to surprise medical bills.” “This is about further consolidating leverage Mukkamala with an already minimally competitive insurance market to drive down physician rates at a time, quite frankly, we need physicians more than ever,” said Mukkamala, a Flint-based otolaryngologist. The state House backed the four bills in a near Pallone unanimous vote on June 24 and sent them to the Senate, which is considering its own version of legislation on surprise medical billing, also known as balanced billing. Surprise billing occurs when a patient receives care from a physician who does not contract with the person’s health insurer and is considered as an out-of-network provider. The situation at times can leave patients stuck with large medical bills when they receive care, often unknowingly, from a provider who is not part of their health insurer’s care network. The legislation the House approved would require care providers to inform patients in advance that their health insurer may not cover all of their medical services and that they can request care from an in-network provider. In emergency situations, the out-of-network provider would have to accept payment that’s the average amount within the region that a patient’s health insurer pays an in-network provider, or accept 150 percent of what Medicare pays for a medical service, whichever is greater. If enacted, the legislation would require the Michigan Department of Finance and Insurance Services, beginning in 2022, to conduct an annual survey on surprise billing that includes the number of out-of-network billing complaints and the adequacy of insurers’ care networks in Michigan. The legislation also would establish an appeals process within the Department of Finance and Insurance Services if a provider believes what the average amount that an insurer pays for a medical service within a region was miscalculated. An out-of-network care provider also could seek arbitration if an insurer denies a claim seeking payment of

Visit www.mibiz.com

more than 150 percent of the Medicare rate and can document a “complicating factor,” such as the severity of a patient’s condition.

‘Changes the dynamic’ Dr. Tom George, a Kalamazoo anesthesiologist and a one-time state legislator, told the House Ways and Means Committee that the arbitration process is “very narrow” and “very circumscribed.” Instances of balance billing at Kalamazoo Anesthesiology PC where George practices are “very rare,” and involve less than 1 percent of the more than 80,000 cases annually, he said. The amount is typically small, $50 or so, making it impractical to pursue arbitration, George added. “That’s not going to be worth going to arbitration for one case like that,” said George, who urged lawmakers to alter the bills to allow medical practices to bundle multiple cases for arbitration for aggregate amounts with an insurer. George worries that health insurers may drop some providers from their care networks to gain negotiating leverage in future contracts. The legislation could drive more consolidation in the industry, reducing competition and consumer choice and leading to higher prices, he said. “It changes the dynamic between insurance carriers and private practices like ours,” George said. “If this passes as is, it will just be another step toward the slow extinction of independent medical practices, much like the family farm. It won’t happen overnight, but you’ll contribute to the demise of small Michigan businesses.” A Blue Cross Blue Shield of Michigan representative dismissed concerns that the legislation would give insurers leverage over care providers in negotiating future reimbursement contracts. Insurers oppose giving care providers a wider arbitration process than what they accepted in the bills that cleared the House. Gabe Basso, Blue Cross Blue Shield’s manager of state government relations, claimed that a broader arbitration process could lead to physicians leaving care networks because they could ultimately get paid more. “We think it would be a tremendous incentive for even more of them to drop out of network because they know they’ll get what they’re getting today, and could in fact get even more (through arbitration),” Basso said during the recent hearing on the bills before the Ways and Means Committee.

‘Looking to grow’ Dominick Pallone, executive director of the Michigan Association of Health Plans that represents HMOs, said that health plans are required by state law and have a strong market incentive to maintain robust networks of care providers for members to use. Reducing the size of the care networks runs counter to market demands, Pallone said. “Generally speaking, we’re looking to grow networks,” he said. “Dropping core providers — especially large numbers of providers — out of the networks jeopardizes the ability to even bring a product to market if we cannot meet that network adequacy. “We can’t provide access to services if we don’t have providers within our networks.” When health insurers do drop providers from their care networks, it’s typically because of fraud, waste, abuse or quality issues, Pallone said. The surprise billing legislation was introduced in April 2019 and lawmakers have worked with concerns on both sides of the issue to craft a compromise. “In this current form, it may not be perfect to all sides and maybe that means that we’ve done our job,” said state Rep. Brandt Iden, a Kalamazoo-area Republican and chairman of the Ways and Means Committee. “If not every side is happy in this situation, then that means we’ve done the best we can to put good legislation forward.”

Wyoming-based eVideon Inc. launched its Hello product, above, to let hospitalized patients in isolation be able to connect virtually with family and friends using a tablet or smartphone. Meanwhile, Belmont-based AvaSure has generated additional orders of its remote video monitoring system during the pandemic. COURTESY PHOTOS

Health tech firms address emerging needs brought on by COVID-19 pandemic By MARK SANCHEZ | MiBiz msanchez@mibiz.com he COVID-19 pandemic and resulting emerging market needs gave opportunity to two Grand Rapids-area health care technology companies. Belmont-based AvaSure Inc. has generated additional business with a remote video monitoring device that hospitals can easily deploy in infectious environments to allow staff to keep an eye on patients who are in isolation, reducing how often people enter the room. Meanwhile, Wyomingbased eVideon Inc. in June quietly launched “Hello,” a system that allows hospitalized patients who are in isolation and unable to have visitors to connect virtually with family and friends. The company was already developing Hello when the pandemic hit. The system enables virtual visits at a time when hospitals have been prohibiting visitors to prevent the spread of the coronavirus, said eVideon CEO Jeff Fallon, noting the launch comes during a “huge spike” in the use of telemedicine and video conferencing apps like Zoom or Skype. Via a hospital tablet or smartphone, Hello allows patients to use a web address specific to each hospital to connect with friends and family on a video call, without having to download an app or set up an account. Patients only need to bring up the website and dial a number. As well, patients can run the program independent of nurses, who were “already ridiculously stretched thin” on a normal day, “much less during a pandemic,” Fallon said, adding that nurses often become patients’ de facto “tech support.” Hello is intended not as a replacement for patients who are physically able to use their smartphones or tablets, but rather for people who either do not have a smartphone or

are incapable of using one. The system allows them to do video visits “without the burden of causing that to happen falling on the nurse,” Fallon said. The system can improve staff efficiency and minimize the need for a volunteer or a nurse to assist a patient with a video visit. “Our belief is you don’t need a volunteer to come walking into the room with the iPad. You don’t need the nurse to come walking into the room to do tech support for that,” Fallon said. For health systems, eVideon offers a technology platform that’s already installed at about 100 hospitals nationwide, including Mary Free Bed Rehabilitation Hospital, Metro Health and Spectrum Health in Grand Rapids. The technology enables patients to watch instructional videos on their medical care, order meals or entertainment, and control the room lights and temperature. Earlier this year, the company received a capital investment from Spectrum Health Ventures LLC, the corporate venture capital arm of Grand Rapids-based Spectrum Health. Hello is now in an earlyadopter launch phase. The company has made the product available during the pandemic to a handful of existing hospital clients, such as Zuckerberg San Francisco General Hospital, to test and offer user feedback on the design, Fallon said. He believes Hello’s potential will extend beyond the pandemic. “I think the market potential is massive,” Fallon said. “It can certainly become as large as our existing business and it can be as durable as our current core business as well.”

Preserving PPE At AvaSure, the pandemic provided an opportunity to extend a remote video monitoring technology to infectious environments in hospitals. The company’s technology has been used in settings to monitor patients with dementia, for

example, or who are a threat to themselves or others. The device is now deployed at hospitals in 48 states. When the pandemic hit, AvaSure experienced a spike in demand from hospitals for remote monitoring of infectious areas and rooms used for COVID-19 patients who were in isolation. Where it’s been deployed, the remote monitoring device has helped hospitals significantly reduce patient falls and assaults on care providers, AvaSure CEO Brad Playford said. T h e p a n d e m i c d rov e higher interest in the device, he added. “Many of those customers called up and said, ‘I need 10 more now, I need 70 more right now,’ and we’ve satisfied those orders,” Playford said. “And then the ones in the field were pivoted for COVID cases as well.” With the remote monitoring system and the reduction in how often a caregiver has to enter patient rooms, hospitals have been able to preserve personal protection equipment (PPE) for staff during the pandemic, Playford said. Data show hospital staff were putting on and taking off PPE eight to 10 times a day per COVID-19 patient, he said. “When there was limited PPE available, we extended the life because they didn’t have to go into the patient room as often. They could talk to them remotely,” Playford said. The pandemic has accelerated the planned roll out of the remote monitoring device at some health systems, including Livonia-based Trinity Health, the parent corporation of Mercy Health in West Michigan. Some of the demand comes in preparation for a possible resurgence of the pandemic later this year, Playford said. “They’re now accelerating planned rollouts to prepare for the fall,” he said. “Our business has been growing annually very, very rapidly and it’s accelerating.” AvaSure has annual revenues of about $50 million and 150 fulltime employees. MiBiz / JULY 6, 2020

FOCUS: SMALL BIZ M&A

Pandemic injects some reluctance into small business M&A market By MARK SANCHEZ | MiBiz msanchez@mibiz.com couple of small business deals Andrew Longcore has been approached about lately illustrate the effects on the M&A market this year from the COVID-19 pandemic. The parties wanted to do a “try it before you buy it type of deal,” where the prospective buyer would run the business for an interim period under a management services agreement with the seller. The two would then execute the sale of the business at a later predetermined date, after they have better clarity on the pandemic’s path and its effect on the economy and business. The structure would allow a buyer to “get in and get a feel for how the business runs, see what the impact is and help with the recovery, then at a point in the future they can actually acquire the business,” said Longcore, an attorney at The Business Law Group in Grand Rapids that specializes in small business M&A. The structure reflects some hesitancy in the M&A market at midyear resulting from the pandemic and economic recession, Longcore said. “With the discussion on the potential fall spike, or the fall shutdown or partial shutdown, there are a lot of people who are hesitant. ‘If I do a deal now, I don’t want to take over the business and then have the economy go right into a shutdown again.’ That would be a problem,” he said. Overall, Longcore and other M&A professionals say deals are still getting done these days, although volume is down from a year ago and there are clear effects from the pandemic in how deals get gone. For instance, buyers and the lenders who finance deals are asking more questions and doing deeper due diligence. Seller financing, earnouts and delayed closings — where they agree on a deal, but put off the closing for a set period — now get used more often to structure a deal. The net of it is that a deal may take longer to put together and close, according to M&A professionals.

Alyx Schroeder, left, and Katie Sargent, right, recently acquired Corridor Coffee on Stocking Avenue NW in Grand Rapids. The business partners started looking at a deal for the coffee shop in February, but took time to see how the business would be affected by the pandemic before completing the purchase. COURTESY PHOTO

LLC in Grand Rapids, said he’s also heard from sellers who are worried about getting lowballed by buyers and opted not to put their businesses on the market. “They think they’re going to get low-balled, and you don’t really get excited about selling something when you think you’re going to get low-balled,” Friar said. “You have a lot of them who are going to grit their teeth and say, ‘I’m not going to take a discount. I’ll hunker down and get this thing back to where it was before I take a discount on my sale price.’” A “vast majority” of buyers will pay a fair price for a busiLongcore Friar Teeter Rua ness, although there On the seller side, M&A professionals are always some in the market “looking for a say they’ve seen some reluctance to sell. Some discount,” he said. prospective sellers are deciding whether to go In looking at the state of the market for small to market right now or have opted to wait as the business M&A, Friar said he’s been “pleasantly COVID-19 pandemic and its economic effects surprised” during the pandemic that most play out. deals he had under contract or letter of intent “I still have a lot of potential buyers that are moved toward a close or have continued to excited about buying now, but there are just more proceed. When the pandemic hit, Friar was “a complications thrown into the mix now than in bit pessimistic” about the effects on the small normal times because of the uncertainty about business M&A market. how the past is going to affect the business and However, Friar had a couple of deals “just what’s coming in the future,” said Jon Siebers, an totally fall apart.” One was a buyer who had a M&A attorney at Grand Rapids-based Rhoades company under a letter of intent and “just said, McKee PC. “Are we going to get a second wave? ‘Look, I’m out because I have to focus on my Are we going to go back to more restrictions? other business holdings here.’” He also had a Nobody knows.” seller who told him, “I want to go off the marMax Friar, managing partner at Calder ket … batten down the hatches and completely Capital LLC and Small Business Deal Advisors focus on our business right now.”

JULY 6, 2020 / MiBiz

‘Certainly had an effect’ As midyear approached, Calder Capital and Small Business Deal Advisors had closed 19 deals since Jan. 1, Friar said. That’s up from the same point last year, a lthough “that might be a bit of an anomaly” from what others in the market are seeing, said Friar, who recently sold a business, Corridor Coffee on the west side of Grand Rapids, that he owned for two years with a business partner, Melissa Somero. Katie Sargent and Alyx Schroeder closed June 14 on the acquisition of Corridor Coffee. They started talking to Friar and Somero in February, just before the pandemic hit, and had an agreement in place. They then decided to “still talk about it and consider it as an opportunity, but see where COVID would kind of take things business-wise,” Sargent said. After waiting and seeing how well the business was able to reopen for takeout and delivery, and that it remained profitable, the buyers decided to proceed after “coming up with a plan on how we would address COVID,” Sargent said. “It certainly had an effect, but (the business) was still doing pretty well. We just felt optimistic about it and still decided to go for it with all things considered,” said Sargent, a 24-year-old recent graduate from Davenport University with a business degree. “It was a little scary right at first, but we gave it some good thought, looked at the numbers, and all things considered, we decided it was still a good opportunity to pursue. I think we would have regretted it if we had let COVID scare us away,” she said. “We thought it would make a good fit, so we’re giving it a go.”

Coffee “was not necessarily my thing” when Sargent saw Corridor Coffee listed for sale on BizBuySell.com, an online marketplace for small businesses. She showed the listing to Schroeder, who had always wanted to open a coffee shop, Sargent said. “It just went from there,” said Sargent, who handles the “business side of things” while Schroeder “can do all of the fun barista side of things.” The two are among buyers who are proceeding on deals even during the pandemic, Friar said. He’s seen sellers “pull back pretty hard and buyers come out pretty forcefully.” “Right now, you kind of have a herd of buyers out there looking to buy, and you don’t have a herd of sellers,” Friar said.

‘See the light’ Going into 2020 after having its best year ever last year, Spring Lake-based M&A firm InVictus LLC “looked like we were going to knock ’19 out of the park,” Managing Partner Mike Teeter said. Then the pandemic hit and business slowed. In June, InVictus started to see business return and “we’ve really started to push again” as buyers and sellers got more active and “we’re starting to see people get ramped up again,” Teeter said. “Right now, we see the light at the end of the tunnel. We’re starting to see movement and we’re coming off a period of time where everybody just shut down,” he said. “We’re starting to see people feeling more confident in being able to do something now.” Buyers right now are “aggressive” in searching for deals, said Teeter, who as well has seen sellers holding back. Visit www.mibiz.com

“There are so many variables out there right now that can cause a lot of speculation and a lot of hesitancy, but I’m hoping that we’re still going to see the deal flow and some pent-up demand taking place. The money that is on the sideline is still going to get deployed.” — MIKE TEETER Managing Partner at InVictus LLC

Concerns persist about the pandemic’s potential second wave hitting Michigan, as well as uncertainty that comes with a presidential election year. “If this thing has a tail, it’s all going to change everything. If they find a vaccine for this thing, we’re having a different conversation, too,” Teeter said. “There are so many variables out there right now that can cause a lot of speculation and a lot of hesitancy, but I’m hoping that we’re still going to see the deal flow and some pent-up demand taking place. The money that is on the sideline is still going to get deployed.”

Inventory lacking At Rua Associates LLC, President Randy Rua also reports that buyer interest has picked up. That higher interest runs up against a relative lack of businesses for sale, as some prospective sellers hold back, Rua said. Rua described a plastics molder in Illinois he represents that wants to add immediate capacity in the U.S. and move work back from China that has been outsourced. The company told him it has “scoured all over the Midwest” and still had difficulty finding a prospect, Rua said. “We’re seeing a lot of buying activity in manufacturing. We’re getting calls daily from companies wanting to buy other manufacturing businesses and saying they can’t find opportunities,” he said. “There’s demand, but there’s not inventory because sellers are sitting on the sidelines.” Rua worries that “we’re going to be fighting this perception of sellers that they have to wait six months to a year” to sell, delaying deals well into 2021. Based on prospects he represents who recently started considering coming to the market and selling their companies, their hesitancy stems from the uncertainty about the economy and the pandemic’s trajectory, their lower sales from the economic downturn that have not fully recovered, and worry they’re “going to get beat up in the marketplace,” Rua said. “My sense is that’s not the case, given the demand that’s out there for acquisitions,” he said. The Illinois company is willing to pay a price that would have been expected pre-COVID and “would not discount (for) what happened in the last several months at all,” Rua said. Teeter said would-be buyers who believe they can drive a deal at a discount will find that many sellers will not bite and instead wait to sell. “You’re not going to have sellers that are going to be eager to sell at a discount because of something that happened that was out of everybody’s control,” Teeter said. “They’re not going to sell at a discount just because their numbers are down, nor are they expecting that if they thrived during this period that they’re going to get the uptick on it, either.” Visit www.mibiz.com

Liquid Finance offers distressed companies structure to ‘get back on their feet’ By MARK SANCHEZ | MiBiz msanchez@mibiz.com GRAND RAPIDS — Alternative lender Liquid Finance LLC completed its first deal last month with financing for a Pennsylvania-based maker of farm equipment. Business partners Bill Melvin Jr. and David Sassano expect Grand Rapids-based Liquid Finance to do many more deals in the near future, particularly given the level of economic distress brought on by the COVID-19 pandemic. “With everything going on, there’s a lot of demand for our work,” Melvin told MiBiz. “We see that we’re going to be able to help companies through the challenging times and thrive when we get back to normalcy.” Melvin, who serves as CEO of Grand Rapids-based Liquid Asset Partners LLC, partnered with Sassano this spring to co-found Liquid Finance, an asset-based finance company that structures financing for companies in distress. On some occasions, Liquid Finance will acquire a company’s assets under a lease-back arrangement. That was the case in the deal for Biglerville, Pa.based GVM Inc., a family-owned agricultural equipment maker of spreaders and sprayers that got overleveraged and sought Chapter 11 bankruptcy protection to restructure. GVM has operations in Pennsylvania, Ohio, Indiana, Missouri, Georgia, Washington, and California, and distributes its products in the U.S., Canada and Australia. Liquid Finance acquired GVM’s assets and leases Melvin Jr. them back to the previous owner to continue operating the company. The transaction “allows them to clean up their balance sheet, lower costs, and get back on their feet to grow in the years ahead,” said Melvin, the CEO of Liquid Finance whose father, Bill Melvin Jr., started Liquid Asset Partners in 1974. “The cool thing about it is we’re utilizing our skills as an appraisal and liquidation firm to help a company survive and exit bankruptcy,” he said. For years, Melvin saw the potential to form a Sassano finance company that would complement the work of Liquid Asset Partners, which does appraisals, auctions and liquidations and works with banks, retailers, bankruptcy courts, trustees, manufacturers and lenders. The opportunity to proceed came when he met Sassano, a finance professional who in his career has worked with hedge funds, private equity funds and family offices, as well as raised capital for startup companies. Liquid Finance started looking at deals about a year and a half ago and closed on the GVM transaction at the end of May. “I started looking at (forming a finance company) about five years ago and started realizing that it was a good avenue for us to go into. We needed the right person to help lead that group,” Melvin said. “It definitely has the potential to grow and flourish. It is an add-on to our core competencies and core services we provide, which is evaluating companies and assets and figuring out what they’re worth and what’s the plan of action.” Melvin found that leader in Sassano, who with his wife, Anne Sassano, moved from California to her native Grand Rapids three years ago. Anne Sassano also went to school with and is a good friend of Gwen Melvin, Bill Melvin’s wife. After the introduction from their wives, Sassano and Melvin “started chatting,” Sassano said. Sassano saw in Liquid Asset Partners an opportunity “that made a lot of sense.” The company “in essence really, really has the magic and experience to evaluate (the) value” of a business that was in distress, he said. “And that’s the hardest part. Knowing what the assets are worth and, if they have to be liquidated or sold in some manner, he has the whole infrastructure to actually sell it,” said Sassano, managing partner of Liquid Finance. “It just was a natural fit where I could bring investors and capital and structure expertise on the finance side to Bill’s expertise, which is asset valuation, liquidation and really the infrastructure to move the assets if there was a distressed situation.” Liquid Finance focuses on asset-heavy sectors, including manufacturing, distribution and retail. After doing some level of work on 10 or 11 potential deals, Liquid Finance found one of those “golden nuggets” in the 50-year-old GVM Inc., Sassano said. Liquid Finance could provide the financing GVM needed to restructure and continue to operate after emerging from bankruptcy. Liquid Finance ended up acquiring GVM’s assets under a lease-back arrangement. “It worked out real nice. They had a lot of assets and it’s a good company,” he said. “They just got into trouble. They borrowed too much money and overbuilt.”

Agricultural equipment maker GVM Inc. turned to Grand Rapidsbased alternative lender Liquid Finance LLC to help the company exit bankruptcy, clean up its balance sheet and lower costs. Liquid Finance acquired GVM’s assets and leased them back to the company’s owner. COURTESY PHOTO Liquid Finance gets involved in companies “after banks say ‘no’” and require an alternative lender, Sassano said. The firm typically looks at deals in the $1 million to $50 million range. Since Liquid Finance is “not cheap money,” borrowers are urged to refinance as soon as possible after returning to financial health, he said. “We get them into health, typically 12 months to 24 months, and then they’re able to do that,” Sassano said. “We help them refinance with another lender somewhere else at a much cheaper rate.” Backing for deals comes from private institutional capital that includes hedge funds, private equity firms and family offices “that understand the potential of distressed companies,” Sassano said. Liquid Finance will put its own capital into a deal as well, he added. “Banks have an appetite for cash flows, but really investors and institutional funds that focus on distressed lending understand it,” Sassano said. “We can see and help companies that others would walk away from, and when we do that we have the ability to save companies, save jobs, and not allow companies to fall through the cracks.” After closing the first deal in GVM, Melvin expects that Liquid Finance should evaluate plenty of opportunities over the next two years, given the economy and the effects of the pandemic. To that end, Liquid Finance Partners currently has a strong pipeline of potential financing transactions, he said. Because of the economic distress caused by the pandemic, “we are seeing some more opportunities and we do expect probably in the next month or two to see a wave coming in,” Sassano said. “We’ll have a larger opportunity to evaluate.”

Liquid Asset Partners consolidates into larger facility to support e-commerce business After outgrowing its two prior facilities, Liquid Asset Partners LLC went looking for a new location where it could consolidate its growing operation and accommodate future growth. That search led CEO Bill Melvin Jr. to a 110,000-square-foot industrial facility at 2700 Patterson Ave. SE, which it bought through an affiliate in July 2019 for $2.3 million. The new location houses Liquid Asset Partners, an appraisal, auction and liquidation firm; new affiliated alternative lender Liquid Finance LLC; the manufacturing operations of superbike brand EBR Motorcycle; and an e-commerce business. In part, Melvin said the need for more space grew out of the success of the e-commerce side of the business, which focuses on selling a range of parts, products and inventories the company buys via closeout. That could include everything from motorcycles, motorcycle parts and watersports equipment to tools, vintage cars and vehicle parts, according to Melvin. “It’s typically a lot of high-value stuff — we don’t do a lot of $5 items,” Melvin said. “It’s a motor or a transmission or a set of suspension, or a $300 water ski that we’re selling for $100.” With the growing e-commerce business, Liquid Asset Partners brings in the inventory to its facility, catalogs the items and then sells them through its own website, Amazon, eBay or other sales channels. Melvin said the e-commerce operation gives the company another way to generate value from the closeout deals it acquires, often from retailers that are restructuring their operations or looking to liquidate. “It opens new channels for us,” Melvin said. “There are certain projects that we look at and think, ‘This is a good liquidation,’ or ‘This is a good e-commerce addition.’ “For 40 years, we’ve sold some of these things to other people that would take them and put them in a retail or wholesale business and sell them out into the marketplace. Some of those we see as a good fit for the platform we built.” — Reported by Joe Boomgaard MiBiz / JULY 6, 2020

FOCUS: SMALL BIZ M&A

Q&A Jon Siebers

Attorney at Rhoades McKee PC The COVID-19 pandemic has slowed deal flow for Jon Siebers, an M&A attorney at Grand Rapids-based law firm Rhoades McKee PC. Siebers said closings are down and the number of deals he has in the pipeline are “probably down a little bit, but not much.” Siebers spoke with MiBiz about how the pandemic has affected the M&A market and offered some advice for both buyers and sellers.

As the pandemic now goes into the summer, what do buyers need to be mindful of as they look for a prospect to acquire? They need to figure out what impact the last three months have had on the business, and the best- and the worst-case scenario for the next twelve months until there’s a vaccine so that they understand not only what has happened to the business in the past, but what is likely to happen in the future and make sure they don’t overpay. Now is a great time to talk about earnouts and claw-back provisions if there’s a drop in performance post-closing — things that allow the buyer to acquire the company with less risk.

What does a seller need to consider these days given the circumstances? It depends on the strength of the seller. If it’s a seller that has not been impacted negatively by COVID, then they need to keep the pressure on the buyer and not fall into the (scenario of thinking), ‘These are hard times. We need to take more time.’ They need to set an expectation that it’s going to be business as usual for the sale of the company. If it’s a business that has been impacted, they need to understand what the impact is going to be on the value and decide, ‘Is this now still the right time (to sell)” depending on what that impact on the value is. If it’s a business that has been impacted severely and they’re distressed, then they need to probably be thinking about how they can accelerate a sale in order to stop the bleeding and work with their bank. I have some distressed deals right now where the bank is driving everything.

For business owners who decided to sell during the crisis, what’s the best thing they can do to position their companies to attract the attention of a prospective buyer? Any time you’re selling a business, whatever you can do to differentiate from other sellers in the market, that’s good. If you have a business that’s not been affected by COVID, that’s something that I would be pushing strongly.

If sellers decide to wait six months or a year before going to market, what should they spend their time doing to better position their companies? Early on, everybody was saying this is a great time to work on your marketing and a great time to renew your networks of people. I think they need to make sure that they understand the metrics they need to be watching to determine what impact this is having on them, and if they don’t know what those metrics are, they should learn them so that they can monitor their business (and) monitor the financial health because buyers are going to want to know that. If you take the company to market and you haven’t thought that through, you’re not going to look very good to buyers.

Do sellers need to temper their expectations during the crisis? If you are a business not impacted but COVID, I say no, but if you are (affected) — absolutely.

Do you see some buyers coming in low with their offers because of the pandemic and what it’s done to the economy? I think they’ve got to be cautious about overpaying. There’s opportunism in a good way, and opportunism

JULY 6, 2020 / MiBiz

in a bad way. There are going to be both. There are a lot of sellers that just are going to be taken advantage of because they don’t have any leverage anymore, but there are going to be a lot of opportunities for buyers that are looking for businesses that, with the right leadership and the right backing, can do very well. I think there will be great opportunities for buyers out there.

It’s been a seller’s market for a number of years. Is it transitioning to a buyer’s market? That’s hard to say. I don’t see that right now. Ask me again in a year and I may have a different answer, but at this point I don’t see it shifting.

How do you see deal flow holding up for the rest of 2020 and into 2021? It’s really going to depend a lot on what happens with restrictions. If the restrictions continue to ease and the second wave doesn’t hit like people are worried about, I think deal flow will pick up quicker. If the restriction easing gets paused or the more severe restrictions get put back in place, it’ll slow deal flow more.

Based on the transactions you’ve been involved with, what is the availability of credit to finance a deal? I haven’t heard anyone say that they can’t get a deal done because they can’t find the capital. I do think you’re probably going to see more seller financing involved just because if you’re a buyer, you want the seller to continue to have some skin in the game just in case we continue to have road bumps post-COVID. I do think the number of deals that include seller financing as a percentage of the purchase price that’s being financed by the seller is probably going to go up. But I don’t think it’s necessarily because they are unwilling to loan. Maybe banks may demand that sellers take more of the debt. From a buyer’s perspective, that’s what I would want to do. If I can’t get an earnout, I want seller financing as much as possible so that the seller is invested in helping me weather the storm post-COVID.

Many small businesses are holding PPP loans or Economic Injury Disaster Loans the U.S. Small Business Administration offered to provide relief from the pandemic. How might those affect deals? I’ve had a number of deals where clients have said, ‘Well, if we do this as an asset sale, can we assume that debt?’ because the terms are really good. I have not seen that happen yet, but I have clients who are looking into doing that. ‘If we do a stock sale, does that trigger a repayment obligation if there’s a PPP loan or an EDIL loan out there?’ I’m not sure there’s any clarity on that answer yet, but people are trying to figure out what the impact of the loans is on a deal, and if they can avoid paying that off at closing.

What’s another issue that has arisen during the pandemic? I have seen more stress in small companies where one partner wants to get out and the other doesn’t. We’re looking at partial buyouts (and) partner buyouts. We’re seeing a lot of that activity right now. Interview conducted and condensed by Mark Sanchez. COURTESY PHOTO

The brother and sister team of Dalshawn Tyler, left, and Erica Tyler, right, are planning to open the Southtown Market in southeast Grand Rapids to offer residents fresh food. The Tylers also want to provide entrepreneurial support for people in the neighborhood interested in starting up a business. COURTESY PHOTO

New market seeks to fill gap in southside GR neighborhood By KATE CARLSON | MiBiz kcarlson@mibiz.com GRAND RAPIDS — When the coronavirus pandemic hit, a pair of Grand Rapids natives scrapped their initial plans to open a cigar lounge on the city’s south side, deciding instead that a fresh food market and weekly farmers market would be a better resource for their neighborhood. Erica Tyler and her brother, Dalshawn Tyler, are in the process of opening Southtown Market at 821 Oakdale St. SE in Grand Rapids. The building has been owned for nearly 20 years by their grandmother, Mary McGhee, and currently houses Hi-Tech Hair Designs salon. Before that, it served as a daycare. “The south side of town is looked over a lot and not a place where you can get fresh fruits and vegetables,” Erica Tyler said. “A lot of people don’t have vehicles and it would be easier for people to get here” to buy food. Because the business plan recently changed from a lounge to a market, the Tylers are in the design phase and still working to secure an architect. But they have a concrete vision to use the space to uplift their community. The business partners said it was important for them to open the market in their own neighborhood and to give community members a place to shop with people they know. The goal is to open the market sometime in 2021 and carry fresh produce, meat, seafood and eventually wine. The business partners envision something similar to the Grand Rapids Downtown Market on a smaller scale. “We want to create an experience,” Dalshawn Tyler said. “We would like to have a little band with nice mellow music and a nice vibe for when people are shopping.” The Tylers are organizing a weekly farmers market outside of the building every weekend this summer, starting Aug. 15. Funds secured from renting tables to local vendors will go toward renovating the salon into Southtown Market. The plan is to shut down the street for the first weekend of the market event, and then have vendors set up on a grass lot across the street for future market events. “We had the idea to create a space for entrepreneurs to be able to come out every weekend to get exposure and just create that entrepreneurial space,” Erica Tyler said. “There is nothing like that on this side of town.” The weekly farmers market is planned to run through the end of September or early October, Erica Tyler said. Part of the goal is to get people accustomed to coming to the space when the market opens, as well as lifting up other local entrepreneurs. To that end, the Tylers are working to bring a business consultant to the market event to help people start their own companies. “So many of us don’t have that platform or direction,” Erica Tyler said. “We feel like that just trickles down into the next generation and so forth. We want to provide that space where we can grow as entrepreneurs.” Even after Southtown Market opens, the Tylers hope to continue holding the farmers market to serve as an important resource for the area, Dalshawn Tyler said. “On a personal level, growing up here, this area is riddled with crime and firsthand I know a lot of the young African American kids don’t go to college or leave Grand Rapids and are left with few options,” he said. “I just look at some of these younger kids and if they were to see someone doing something different, then maybe that could change their mindset.” Visit www.mibiz.com

SMALL BIZ ROUNDTABLE Continued from page 1

During a June 24 virtual roundtable held by MiBiz, restaurant owners and others agreed with the outlook that the industry will need to focus on “maintaining” for the foreseeable future. The panel featured: n Trey Malone, a Michigan State University professor of agriculture, food and resource economics; n Cindy Schneider, owner of San Chez: A Tapas Bistro and Roam by San Chez in Grand Rapids; n Smith, who co-founded Louise Earl Butcher with wife Cynthia Esch in early 2016; and n Jessica Ann Tyson, owner of The Candied Yam LLC in Grand Rapids. Schneider, who reopened her restaurants in mid June when dine-in services resumed with restrictions, said it’s difficult to get creative in the current environment. “Every time we try to get an idea, it’s scary — there’s a lot more fear involved,” she said. “So we’re maintaining.”

Supply disruptions Throughout the pandemic, the small business owners struggled with fluctuations in their supply chains, including increased prices and limited availability of products. “I’m still feeling that,” said Tyson, who opened her southern-style restaurant in 2016. At one point, prices per pound of ground beef more than doubled. At other times, chicken thighs were the only available cuts and “collard greens got mowed because they didn’t have enough people to pick the greens. It definitely trickles down and it does affect the people who want it the most, and that’s the customers.” Schneider said the switch from paper to digital menus that patrons access via QR code has helped with displaying what items are available. While Smith — who owns the small butcher shop on Wealthy Street that sources its meat from farms within 60 miles — wasn’t directly affected by COVID-19 outbreaks at large meat processing facilities, he saw the fallout trickle down to smaller producers. “We were very fortunate not to be involved with that,” he said, referring to processing plants. “We deal directly with the farmers. … We don’t essentially have any middlemen in our supply chain. I think all of (the farmers) have had increased demand.” Smith called the first six to eight weeks of the pandemic “pretty chaotic. We were very, very busy. The choices that people had for finding meat were getting more and more limited.” The slaughterhouses that process Louise Earl’s orders also saw demand spike, and the butcher shop had to give a longer lead time for orders. “We had to commit to all of our places for all of our animals through the end of the year,” he said. Malone, who studies various food supply systems and does outreach for MSU Extension, said figuring out what products go to restaurants versus grocery stores is key to understanding how systems will be disrupted. “These disruptions were COVID-related, but often public policy-related, which created a lot of uncertainty in terms of what is and isn’t allowed,” he said, adding that the meat supply chain “became top of mind” during much of April. “It’s been a roller coaster,” he said.

Trey Malone, Michigan State University. COURTESY PHOTO

Cindy Schneider, San Chez.

Matt Smith, Louise Earl Butcher.

COURTESY PHOTO

Northern Michigan counties were allowed to reopen for dine-in service on May 22, while the rest of the state followed on June 8. Schneider and Tyson said it’s been a challenge keeping employees despite the extra safety requirements and precautions. San Chez and ROAM are under three-stage back-to-work plans, which helped coordinate the restaurants’ reopening and also build up expenses that are covered under a federal Paycheck Protection Program loan, Schneider said. “It’s kind of a battle right now because it’s hard to tell if they don’t want to come back due to COVID or with their unemployment and stimulus they’re getting,” Schneider said. “It’s a strange battle we’re having, and I know we’re not alone.” Schneider added that the social unrest surrounding the Black Lives Matter movement has increased concern among some employees, particularly African Americans, who have asked the restaurant to have “better policies toward racism. Like every company, we have been reevaluating our inclusiveness.” Tyson said she’s lost four employees who haven’t returned to work, and believes at least some of that is due to COVID-19’s disproportionate effect on the Black community. Meanwhile, Tyson has picked up work washing dishes, cooking and taking orders. “I have been working my ass off,” she said. “It’s just been crazy. Then trying to find individuals to work has just been nothing but on the

other side of ridiculous. … For the most part, I deferred to how (employees) feel because it’s not me, it’s them, and if you’re in an environment and you’re not comfortable and are terrified of it, that’s no way to work.” In addition to employee safety, restaurants are also grappling with how consumer demand will play out, as well as attempting to figure out whether and how much patrons are clamoring to get back. Malone said it may be a combination of perception — how safe are the restaurants — and economics. “Now, as we’ve stepped into a recession, one of the first things that happens in terms of what people eat is they eat less at restaurants,” he said. “What’s going to be interesting to watch is if that’s true this time. Obviously, people have less money because of the constraints on income, but at the same time, we’ve been cooped up for months. There are a lot of folks out there who are thrilled to be spending time outside of their house.” However, he said this w ill likely var y depending on the type of restaurant. As well, the supply chains restaurants depend on are also different, whether they’re more local or national. Malone is also leading ongoing research on consumer perspectives related to COVID-19. “What we’re finding is well over two-thirds of U.S. food consumers are concerned about getting coronavirus from where they’re eating,

Jessica Ann Tyson, The Candied Yam LLC. COURTESY PHOTO

whether that be from the food they’re eating specifically or from the location of the food they purchased,” he said, adding that science doesn’t support such a concern. “This is still a real perception even if it’s not real in the science.”

Long-term changes Looking back on late February and early March is like an entirely different time period for Schneider, Smith, Tyson and Malone, whose research projects and priorities have shifted due to COVID-19. “Nothing has stayed the same in terms of my trajectory because of coronavirus,” Malone said. Tyson said she’s “a little nervous” moving forward with a different atmosphere inside her restaurant, increased reliance on catering and uncertainty around the rise in delivery services seeking to partner with restaurants. Delivery is just under a quarter of The Candied Yam’s business right now, she said. “Are those delivery companies going to stay relevant as people start to come out of their homes?” she said. “Some of the companies who are now asking us to do business with them, I’m not sure if they’re viable or not, or if it’s something we need right now. I don’t know how that all looks.” For now, though, she looks forward to carrying on: “We feel fortunate just to still be in the game.”

Employee, customer safety Restaurants are now in a new phase of the pandemic after being allowed to reopen dine-in services at 50-percent capacity. Under executive orders signed by Gov. Gretchen Whitmer, restaurants in the Upper Peninsula and 17 Visit www.mibiz.com

MiBiz / JULY 6, 2020

SMALL BIZ: COPING WITH COVID-19

GR 2030 District shifts focus to indoor air quality

Irie Kitchen rebounds after COVID-19 shutdown, vandalism By KATE CARLSON | MiBiz kcarlson@mibiz.com

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com For nearly five years, the U.S. Green Building Council of West Michigan has helped Grand Rapids property owners reduce their energy usage and hosts an annual competition celebrating the “biggest losers” statewide. The council’s Grand Rapids 2030 District and annual Battle of the Buildings are part of broad efforts to reduce buildings’ energy consumption, a key clean energy tool to help address climate change. But with widespread closures and a major shift to working from home because of COVID-19, organizers say the focus — at least temporarily — has shifted to indoor air quality. “We have been focusing on hea lt hy buildings,” said Cheri Holman, executive director of the U.S. Green Building Council of West Michigan. “We know the virus can be transmitted through the air. What we’ve Holman f ou n d i s f e w people are considering how their HVAC system plays into that.” Indoor air quality has long been a focus for the USGBC, but it’s been tough to spark interest in the topic among participants. For one, it doesn’t generate the type of return on investment that energy efficiency upgrades have, she said. Holman said the 2030 District and Battle of the Buildings have continued to hold webinars over the past three months. Instead of just cutting energy use, now participants are considering various ventilation control equipment. Those conversations will likely evolve, Holman added, to consider partial occupancy in buildings. “There is a lot to think about w it h COV I D a nd bu i ld i ngs,” Holman said. Each year, the Battle of the Buildings showcases energy efficiency projects across the state, and now encompasses nearly 235 million square feet of building space in commercial, industrial and multi-family facilities. Past winners have included Van Andel Arena, Spectrum Health and General Motors. Holman said organizers are still deliberating over whether to hold a virtual event this year. Another wrinkle will be how to factor in energy consumption losses “now that we have this period where people might not have used their buildings at all.”

JULY 6, 2020 / MiBiz

GAINES TOWNSHIP — Irie Kitchen LLC recently reopened for takeout, and proved it has a large base of support after raising more than $100,000 following vandalism in early June. The authentic Jamaican restaurant south of M-6 was still closed due to the pandemic at the time of the vandalism on June 3. Owner Vincent Mcintosh discovered shattered windows in the restaurant, but the cause of the vandalism is still unknown. Mcintosh said he filed a police report on the incident, and previously told MiBiz the restaurant was “basically targeted.” One of Mcintosh’s loyal customers and friends set up a GoFundMe in response to the incident, which garnered 2,800 donations totaling $106,705 — including a $5,000 donation from Food Network chef Ree Drummond. “We have a cult-like following in the area, but we got donations from not only local people, but from all over, it was crazy,” Mcintosh said. In addition to the financial support from the online fundraiser — which will help cover lost profits since Irie closed in mid-March — the GoFundMe was also good exposure, attracting attention from contributors who had never heard of the restaurant, Mcintosh said. “The first weekend (after the vandalism) we sold out of food in two days,” Mcintosh said. “It’s been great. I want to know if it will continue or if we’re just the flavor of the week, but the last few weekends it’s been busy, so that’s been great.” Irie Kitchen has successfully reopened, but Mcintosh is working with a smaller crew than he is used to. Irie Kitchen also prides itself on authentic Jamaican dishes using organic, fresh ingredients, which have been a struggle to adequately source amid the pandemic. To stay open and maintain Irie’s reputation for providing authentic food, Mcintosh raised prices, simplified the menu and temporarily reduced hours to just weekends. “The goal was to give people the ability to get organic food as cheaply as possible,” he said. “I wanted to give people healthy food, even if it was just something they could afford occasionally as a treat. But if I wanted my business to stay around, I had to raise the prices.” The restaurant is “definitely breaking even,” Mcintosh said, but his goal is not to try to turn a huge profit during the pandemic. The restaurateur

Vincent Mcintosh, founder of Irie Kitchen. COURTESY PHOTO said Irie Kitchen will only be operating on the weekends through at least the end of the summer. “As long as I can pay my staff and pay the bills, I’m happy with that — there is a pandemic going on right now,” he said. “COVID-19 has completely changed everything. We were always a clean restaurant before this and did a lot of takeout anyway, but with the new rules, it adds costs and we’re operating with a completely new system.” Irie Kitchen’s three-year anniversary since opening is July 24. Mcintosh opened the restaurant when he was 19, but struggled to find space for his business closer to downtown Grand Rapids. “Landowners and building owners in the city didn’t really believe in me, so I opened up in Caledonia more to prove a point,” he said. “People weren’t taking me seriously.” Mcintosh said extra pressure comes with being a Black business owner, and instead of being labeled as a good business, his restaurant is sometimes reduced to just being a Black-owned business, he said. However, in the light of global protests of racial injustice and police brutality against people of color, there is a movement to lift up and support Black-owned businesses like Irie Kitchen. “We run a good business, period,” Mcintosh said. “But it’s great that people are being intentional; we all need that support. In times like this, I am very proud of Grand Rapids for the support they’re showing.”

Tripelroot ‘reinventing new ways to stay relevant’ By KATE CARLSON | MiBiz kcarlson@mibiz.com ZEELAND — Outdoor seating has been a game changer for restaurants and bars reopening this summer, making Laura Gentry even more grateful that she expanded outdoor seating space at her Zeeland brewpub a few years ago. Even with the outdoor seating in Tripelroot’s beer garden next to the brewpub, the business has switched up its menu, seating and style of service. Navigating reopening during the coronavirus pandemic has required restaurants and bars to change how they operate to abide by new safety regulations and to reassure customers that their business is safe. “One of the biggest challenges is people weren’t allowed to eat out for three months,” said Gentry, who owns and manages Tripelroot. “It’s not necessarily always that people don’t feel safe, but they have gotten used to not eating out.” After a nearly three-month shutdown, restaurants and bars were able to reopen their dining rooms starting June 8 but are required to limit indoor capacity to 50 percent and space seating 6 feet apart. To help scale down operations and as an added safety precaution, Tripelroot has switched from its usual full table service to a walkup system to minimize contact with customers and cut down on labor costs. Gentry said she has not been able to call back all of her employees due to the new limited operations. “We also honed in on our menu because with capacity constraints it’s not conducive to have a whole bunch of ingredients,” Gentry said.

Tripelroot in Zeeland is leveraging its expanded beer garden to seat patrons amid capacity constraints for restaurants and bars. COURTESY PHOTO The first weekend of Tripelroot’s reopening didn’t get near the 50-percent capacity limit — sometimes it was close to getting full but the brewery never had to turn anyone away, Gentry said. “It’s really cool and awesome to see people in there again, but you have that weird feeling of, ‘This is going to be different,’ with people wearing masks and spaced apart,” Gentry said. “We’re trying to be flexible and accommodate these new rules and guidelines.” Business has been slower in downtown Zeeland compared to most summers, Gentry said, with some businesses still closed. Another challenge has been fewer tourists coming to West Michigan this summer with Tulip Time and all other large in-person events getting canceled because of COVID-19, she added. “We’re stronger together, and it will be great to have everybody open back up,” Gentry said.

“Hopefully we can get back there, I think it’s just definitely a struggle.” Tripelroot opted against offering takeout during the shutdown besides the first weekend, but instead had a popup pretzel shop and also sold handmade paczkis to help generate some revenue. “We made probably 800 paczkis and offered those for takeout on Tuesdays for a while,” she said. “Every Tuesday, I would schedule pickups and schedule pickup times about five minutes apart.” Gentry is considering expanding outdoor seating further into some parking space in front of Tripelroot, but she is concerned customers will not feel safe eating there if Main Avenue is not closed down. The Zeeland City Council on June 1 approved temporary changes to the right of way license agreement and a policy for the sale and consumption of alcohol on public property, allowing businesses to apply to stretch seating space into sidewalks and parking spaces. On June 15, the council voted to close Main Avenue if it becomes necessary to help businesses and restaurants, although no action has been taken to close the street. Gentry said if Main Avenue were closed, it might help raise comfort levels with eating outside in an expanded area, at least for her establishment. “In this industry, I feel like we’re going to have to become extremely flexible and keep reinventing new ways to stay relevant in people’s lives,” Gentry said. “We’re all kind of hoping that people open back up again and people can get back in their routines.” Visit www.mibiz.com

NONPROFIT ORGANIZATIONS

Pandemic clouds outlook after strong year for charitable giving By JANE SIMONS | MiBiz jsimons@mibiz.com

MICHIGAN FUNDRAISING CONDITIONS: 2016-2020

robust stock market, strong economy and low unemployment rate in 2019 created a trifecta that is credited for the second-best year in recorded history for charitable giving in the United States. American individuals, bequests, foundations and corporations gave an estimated $449.6 billion to U.S. charities in 2019, placing it among the top years ever for charitable giving, according to the Giving USA annual report on philanthropy released in mid June. “Through the period covered by Giving USA 2020, the national picture was a strong one,” said Michael Montgomery, owner and principal of Oakland County-based Montgomery Consulting Inc. Montgomery also serves as a lecturer in the Department of Health and Human Services at the University of Michigan-Dearborn. “Even then, however, the picture was a little different here in Michigan where a longer-term pattern of fewer organizations reporting improved year-over-year fundraising results continued,” he added. The annual report said total charitable giving rose 4.2 percent as measured in current dollars (2.4 percent adjusted for inflation) over the revised total of $431.4 billion contributed in 2018. Adjusted for inflation, total giving reached the second highest level on record, just slightly below the record amount achieved in 2017. Compared to the nation as a whole, a “somewhat different” economic and employment pattern is playing out in Michigan, “where the economy tends to go down before the national economy and stays down longer,” Montgomery said. The percentages in the Michigan Fundraising Climate Survey 2020 that he authored differ from those in the Giving USA report. For example, individual giving was listed as 69 percent in the Giving USA Report and 54 percent in Montgomery’s survey, while corSponsored by: porate giving was 5 percent in the GRAND RAPIDS national report and 22 percent in COMMUNITY the Michigan-focused survey. FOUNDATION Over the last six years, Montgomery said fewer organizations have reported improved results and the portion of them not meeting their fundraising goals has remained stable in the 33-36 percent range.

NONPROFIT SECTOR NEWS

Accounting for COVID Montgomery questions the relevance of the 2020 Giving USA report given the economic devastation brought by the coronavirus pandemic that took hold in the U.S. beginning in March. “In some ways, Giving USA isn’t very relevant this year and doesn’t tell us anything that helps us understand the future, but the global pandemic and its impact is just a whole different ball game,” Montgomery said. “It’s an interesting fun fact, but it doesn’t tell us much about what the future holds.” This year, he’s looking more closely at the recent report from the Fundraising Effectiveness Project, which estimates that giving was down 6 percent for the first quarter, driven by an 11-percent decline in March. The Fundraising Effectiveness Project is the provider of the Growth in Giving Database, the world’s largest publicly available database of actual donations to nonprofits in the U.S. and Canada.

15%

26%

19%

35%

4% 21%

38% 46%

56%

87%

n NO ANSWER n WORSE n ABOUT THE SAME

n BETTER

51%

70%

Broad-based giving

47% 27% 2016

2017

2018

12% 2019

“While it’s too soon to tell what that will mean in the uncharted territory we all find ourselves in today, these estimates provide an important baseline for understanding where giving stood at the outset of the current crisis,” Dunham said in a statement. “As importantly, Giving USA’s decades of data provide insight into how giving trends have been changing in recent years, offering context in these uncertain times.”

19% JANFEB 2020

6% 5% MAR. 23-24 2020

SOURCE: MONTGOMERY CONSULTING INC.

Montgomery said he’s also “looking with great interest” at a May survey from the Association of Fundraising Professionals in which 56 percent of respondents reported they expect to raise less in 2020 than they did in 2019. “Those two studies are very similar to what I found in a brief March 23-24 ‘update’ survey I did to get a sense of how the COVID19 outbreak might have changed how Michigan nonprofit leaders viewed the 2020 climate for successful fundraising,” Montgomery said. “What we saw was a change between January/February and the third week of March that was large, dramatic, and entirely negative — 87 percent of our respondents expected the conditions for successful fundraising to be worse in 2020 than they had been in 2019. “That was even a little more shocking because the January/ February survey reported somewhat higher levels of optimism about fundraising conditions than in the recent past.”

Some still optimistic For Keith Hopkins of Ada-based Hopkins Fundraising Consulting LLC, that optimism continues because of the levels of giving he has seen even in the middle of mass shutdowns and economic turmoil. While he agrees that in times of economic uncertainty people tend to give less, he has seen a “bunch of people who did some pretty significant amounts of giving to sizable organizations in need” that were able to continue their work because of local generosity. At any given time, he’s working on six or eight campaigns around the state. Despite the pandemic, each one received some major gifts, mostly in the six-figure range with one that was seven figures, he said. Hopkins and Montgomery also maintain that philanthropy looks different on the east and west sides of the state. “West Michigan is well known for its generosity and there are other generous pockets of the country like Green Bay, Wisconsin and the state of Utah,” Hopkins said. “Nationally, Grand Rapids would be in the top 10 and Kalamazoo would be in the top 20.” This generosity is being helped along by demographics, namely the aging U.S. population and subsequent massive transfer of wealth. “One thing that is remarkable to me is how consistent American generosity is. Even through this time, people continue to be generous,” Hopkins said. “Since 1969, we’ve had seven recessions, and in four of those, giving went up.” Rick Dunham, chairperson of Giving USA Foundation and founder and CEO of Dunham + Co., said the 2020 report demonstrates very clearly that Americans prioritize generosity as a key part of their lives.

Hopkins said despite being in a “different scenario” now, it was good for him to see that giving in 2019 was strong because that reinforced what he experienced locally. “One of the things I thought was interesting is that giving across the board to all categories was up for virtually everybody,” he said, including religious entities, educational institutions, health and human service organizations, and arts and cultural groups. “If the economic fallout from the pandemic continues and we still have huge unemployment rates, giving will shift from foundations and individuals to basic human needs, such as housing and food,” Hopkins said. “There are things that are nice to have, but not critical. The arts typically suffer when economies are down. I think the trend of giving in America as the country continues to age is that we’ll see more and more resources go to older Americans.” The organizations that are most heavily dependent on philanthropy as opposed to earned income may be in better shape, Montgomery said. Individual giving totaled an estimated $309.7 billion in 2019, an increase of 4.7 percent, according to the Giving USA report. Hopkins said individuals always make up 75-80 percent of giving throughout the U.S., but noted the percentage of individual giving is declining slightly, in part because of a gradually shrinking middle class and changes to the tax laws that limit opportunities to take charitable deductions to those who itemize.

Tax benefits return? On that front, a bipartisan group of U.S. Senators, led by Amy Klobuchar, D-Minnesota, and Mike Lee, R-Utah, offered a glimmer of hope last week when they introduced the Universal Giving Pandemic Response Act for the 2019 and 2020 tax years. The legislation would create an “above-the-line deduction for charitable giving on federal income taxes valued at up to one-third of the standard deduction,” or around $4,000 for an individual filer and $8,000 for married joint filers. Hopkins said he wishes they’d make this change permanent. “I don’t think the federal government should be choosing who gets to deduct. Anybody who gives money to a local charity ought to be able to deduct for taxes,” Hopkins said. “If you ask people if they’d rather give to a local charity or the federal government, 100 percent would say they want their donation to stay local.” As Hopkins looks ahead, he said he thinks the giving outlook will improve as the economy recovers and lockdown restrictions are eased. Montgomery sees it a bit differently. He said overall giving tends to hover around 2 percent of GDP. “We are now in a recession and giving will go down for the foreseeable future. It will be rough. We could see an increase in the fourth quarter, but that’s not likely,” Montgomery said. “Giving in 2020 is going to be less than in 2019 because the GDP is less than in 2019. That is one of the absolutes in philanthropic research.”

Our future is bright. Hats off to all graduates who followed their dreams and are ready to become tomorrow's leaders. Melanie Orozco-Zavala Union High School Class of 2020, Challenge Scholar Visit www.mibiz.com

Congratulations to the Class of 2020!

grfoundation.org MiBiz / JULY 6, 2020

Q&A Rebeca Ontiveros-Chavez Staff Attorney, Michigan Immigrant Rights Center

he U.S. Supreme Court issued a major and — to some immigration rights advocates, surprising — ruling on June 18 blocking the Trump administration’s effort to eliminate a program that offers young adults work permits and protections from deportation. The program — Deferred Action for Childhood Arrivals, or DACA — allows qualified individuals who were brought to the U.S. as children to gain temporary legal status in various circumstances. Created during the Obama administration as a negotiation after sweeping immigration reform failed to pass Congress, the program has benefitted hundreds of thousands of young adults in recent years. According to the Migration Policy Institute, Michigan has 5,250 DACA recipients. Since September 2017, the program has been in legal limbo after the Trump administration first announced it would phase out the program and stopped accepting new applications. Immigration advocates say the Supreme Court’s ruling is temporary and limited to the Trump administration’s procedure for eliminating the program, while concerns remain about DACA’s future. Rebeca Ontiveros-Chavez, staff attorney for the Michigan Immigrant Rights Center, spoke with MiBiz about the SCOTUS ruling and the need for permanent, comprehensive immigration reform.

What was your reaction to the Supreme Court’s June 18 decision on DACA? I was surprised the court held the administration had improperly rescinded DACA. It was a 5-4 decision and the court primarily focused on the procedure the agency followed in rescinding DACA. It didn’t necessarily rule on the legality of the program.

What’s next? Our interpretation of the case is that the program should be reinstated as it was before it was rescinded, such that it includes new applications and advance parole and allows people to travel for humanitarian purposes. Right now, we have to wait for the administration to respond and put out guidance.

It’s been nearly three years since the Trump administration announced it would rescind DACA. What has happened in that time? On Sept. 5, 2017, the Trump administration announced DACA would be rescinded. Cases were filed across the country to protect the DACA program, all challenging the DHS decision to rescind it. During that period of litigation for the past three years or so, U.S. Citizens and Immigration Services — the agency that adjudicates applications for immigration relief, including DACA — said they were no longer accepting first-time DACA applications and no longer accepting applications for advance parole. That meant only the people that had DACA were able to stay in but no new applications. That’s one of the major implications of the SCOTUS decision. Our understanding is it potentially reinstates the program back to 2012 allowing first applications, yet U.S. CIS has not issued any information or guidance. A few immigrant legal service providers and advocates have filed first-time DACA applications for people sort of as test cases to see what the government does. The best case scenario is it’s adjudicated. Worst case is they deny and reject and people lose their money. That’s what’s happened the last three years.

Who are DACA recipients and what is their status in the U.S.? There’s very specific requirements to apply for the DACA program. It’s mostly students or young professionals at this point because of the eligibility requirements. There are very narrow program guidelines. There’s literature out there that talks about people who were DACA eligible and accepted into the program because it provided the benefit for work authorization and a Social Security card — it’s not a pathway to becoming a permanent resident. But that opens the door for so many opportunities for people that they would not otherwise have. In Michigan, they would be able to get a driver’s license and able to have that work permit. Studies have shown DACA recipients bought homes and maybe had extra income. In Michigan, institutions of higher education have different eligibility for tuition and financial assistance based on status — in some cases having DACA could get them financial aid or lower the amount of tuition. Those who are enrolled in this program are no different than anyone else who wishes to function in society, but this deferral against deportation or immigration enforcement coupled with the benefit of a work permit has really profound implications on the daily lived realities of people.

Since this was a procedural ruling by the Supreme Court, are you still concerned about the future of DACA? One really important thing to know about the opinion is that it does not rule on the legality of the DACA program, meaning the Trump administration may try again to end the program but this time with different reasoning. The court made clear DHS could rescind it, they just had to follow the proper procedure. The court’s opinion laid out in great detail what would be sufficient or insufficient, and provided a roadmap to do so. That’s certainly a concern for people who already have DACA and are just wanting to renew it. The second thing that’s on my mind is the Supreme Court’s decision could also put the issue before Congress to offer a solution for DACA recipients and other undocumented people in the country, but currently lawmakers are yet to pass any legislative reforms for such a measure.

Bottom line: What is your takeaway from the ruling? While this is certainly a victory and something to celebrate, I think it’s really important for people to remember it’s only temporary, and the DACA program is temporary. There needs to be a solution that provides protection that’s permanent to not just DACA recipients but the undocumented community as a whole. Interview conducted and condensed by Andy Balaskovitz. COURTESY PHOTO

JULY 6, 2020 / MiBiz

IN THE NEWS M&A

n Grand Rapids-based TG Manufacturing Group acquired the gaming machine integration division of Turnkey Fabrication LLC, which operates in a 20,000-square-foot facility in Grand Rapids and supplies businesses in the gaming sector across North America. The new division of TGM Group is called TG Integration LLC and will continue to be based in Grand Rapids. The company will now manufacture complete integrated gaming machine assemblies following two prior acquisitions of Grand Rapids-based A2Z Powder Coating and the metal fabrication division from Turnkey Fabrication. Terms of the latest deal were not disclosed. n Harbor Springs-based Walstrom Marine Inc. has acquired Traverse City-based Traverse Bay Marine Inc. from longtime owner James Rautio, according to a report in the Traverse City Record-Eagle. Walstrom, a dealer for high-end freshwater boats including Sea Ray, Tiara Yachts, Chris Craft, and Pursuit Boats, adds new brands with the deal, including Lund Boats, Sea Doo and Crest Pontoons. The deal also included Traverse Bay Marine’s location at U.S. 31 in Traverse City, according to the report. n Private equity-backed CloudAccess LLC, a Traverse City-based cloud hosting provider that also operates an office in Poland, has completed the addon acquisition of Miller Media Inc., a 30-year-old Bloomfield Hills-based web development and search engine optimization company. The deal will allow teams at both companies to expand service offerings, according to a statement. Terms of the deal were not disclosed. CloudAccess is a portfolio company of New York City-based Cloud Equity Group, a private equity and investment management firm focused on companies in web hosting and cloud-based infrastructure. n Private equity-backed Heartland Home Services has acquired Jenison-based First Call Plumbing Inc., its second acquisition in the West Michigan area in the last nine months. A family-owned provider of residential plumbing services with a 20-year market history, First Call Plumbing joins the Macomb-based Heartland Home Services platform, which has completed four strategic acquisitions, including a deal for Grand Rapids-based Vredevoogd Heating & Cooling. Heartland Home Services is a portfolio company of North Branch Capital LLC, an Oak Brook, Ill.-based private equity firm. Terms of the First Call deal, which closed June 15, were not disclosed. n Lansing-based Liquid Web LLC, a private equitybacked hosting and application services provider, has acquired Fishers, Ind.-based ServerSide Inc., a web development and managed cloud services company, according to a statement. ServerSide founder and CEO Steve Oren and the company’s team remained in place after the acquisition. Terms of the deal were not disclosed. Liquid Web is a portfolio company of Chicago-based Madison Dearborn Partners LLC.

EXPANSION

n Chicago-based General Truck Parts & Equipment is investing more than $500,000 to launch a new facility in Walker, the company’s first operation in Michigan. Regional economic development firm The Right Place Inc. and the city of Walker announced the expansion, which is expected to include seven to 10 new jobs over the next three years. The new storefront, warehouse and remanufacturing facility at 2686 3 Mile Road opened on July 1.

FUNDING

n Eight Grand Rapids technology startups were among dozens of businesses statewide selected to receive financial support ranging from $10,000 to $125,000 from Michigan’s Tech Start Up Stabilization Fund. Local recipients were Assemble Technologies, CertifID LLC, EightySix Inc., Inductive Intelligence, The Patient Co., Sportsman Tracker, Towel Tracker and VNN Inc. The $3 million fund is administered by ID Ventures in Detroit and designed to help companies navigate the economic hardships brought on by the COVID19 pandemic. The fund garnered 214 applicants from around the state.

REAL ESTATE

n Grand Rapids-based Spectrum Health bought property at 320 Michigan St. NE for $2 million from Warren Radio Co. on June 12, according to property records. Spectrum has leased the space for multiple departments over the past decade, but there is no timeline around future use, said spokesperson Susan Krieger. The purchase of the 9,672-squarefoot, one-story commercial building was in motion prior to COVID-19.

BANKING

n Grand Rapids-based Independent Bank Corp.’s chief financial officer, Stephen Erickson, resigned June 23, effectively immediately. His resignation came about six months after he succeeded Robert Shuster, who retired Jan. 31. Shuster returned to Independent Bank to serve as part-time CFO “until such time that the Company retains a permanent CFO to replace Mr. Erickson,” according to a filing with federal securities regulators. n Sparta-based ChoiceOne Financial Services Inc. (Nasdaq: COFS) was added to the Russell 2000 Index, a small-cap stock market index. ChoiceOne has 33 offices in West and Southeastern Michigan with about $1.7 billion in assets. The corporation last week completed the acquisition of Muskegon-based Community Shores Bank Corp. for $20.8 million in a deal that added three offices in Muskegon County and one in Grand Haven in neighboring Ottawa County. n East Lansing-based MSU Federal Credit Union opened its first northern Michigan branch in downtown Traverse City and plans to build a second, which it will break ground on later this month.

HEALTH CARE

n A new deal with Bloomfield, Conn.-based commercial health insurance carrier Cigna Corp. gives Priority Health a broader care network across the U.S. to use when pitching potential national accounts. Under a new strategic alliance starting Jan. 1, 2021, Priority Health will get access to more of Cigna’s national care network of hospitals, physicians, outpatient centers and diagnostic labs, and at better discounts. The alliance allows the Grand Rapids-based Priority Health, which has about 1 million members, to more aggressively pursue national accounts to provide health coverage to employers within Michigan who have employees elsewhere, as well as with companies in other states that have locations in Michigan.

GAMING

n The Little River Band of Ottawa Indians has partnered with Chicago-based online gaming operator Rush Street Interactive LLC to run a sportsbook inside the Little River Casino Resort near Manistee. The relationship with Rush Street Interactive will start with the firm operating a retail sportsbook inside the casino, with sports betting becoming available to guests starting early in the third quarter, according to a statement. When allowed, the partners then plan to offer cobranded online sports betting and online casino gaming. Rush Street Interactive operates sportsbooks inside casinos in New York, Pennsylvania and Illinois, and offers online sportsbooks in Colorado, Indiana and Pennsylvania. Little River Casino has about 1,350 slot machines and 26 table games and operates on a campus that includes a 292-room hotel, RV park, and event and conference center. n Brimley-based Bay Mills Indian Community in the eastern Upper Peninsula signed a partnership with Boston-based DraftKings Inc. to operate the tribe’s sportsbook at Bay Mills Resort & Casino. The tribe also will look to expand into online sports betting with DraftKings once the state rules allow it. In a survey of Michigan consumers, DraftKings found that one-third of respondents said they had placed a legal sports bet via a mobile application or by traveling to a place it was legal. The survey found 55 percent of respondents “had never made an online wager before” and were possible new users of the mobile sportsbook when it launches. Visit www.mibiz.com

Building Your Culture August 11, 2020 The Center-West and MiBiz are teaming up to present an industrial-strength quarterly webinar series focused on best practices for small and mid-sized manufacturers. Each webinar in the 2020 series — Back to Manufacturing Basics — will feature experts on the topic at hand as well as Michigan manufacturers sharing their

Life is changing rapidly for manufacturers and their employees as we navigate the COVID-19 pandemic. As priorities shift, many companies are finding that their company culture is shifting, too. How can you, as a leader, embrace those changes and take an intentional approach to building your company’s culture for the future? This 50-minute webinar will feature experts from the Michigan Manufacturing Technology Center-West and executive coaching firm Vistage Michigan. They’ll share best practices for building culture and amplifying your values to assemble a high-functioning team that’s ready to take on the evolving challenges and changes ahead. To register, visit mibiz.com/backtobasics

stories. The 50-minute webinars will provide actionable, real-world information to help manufacturers improve their efficiency, enhance quality and drive profitability.

Visit www.mibiz.com

MiBiz / JULY 6, 2020

Fifth Third Means Business™ From revenue cycle optimization to working capital management, we know your organization requires unique solutions to meet the specific moments you’re navigating. That’s why, at Fifth Third Bank, we have a team of local experts who understand your organization. Whatever your organizational goals are, we’re here to help you succeed. Let’s build, together.

Fifth Third Means Business™

53.com/CommercialBank

Fifth Third Bank, National Association. Member FDIC. 24

JULY 6, 2020 / MiBiz

Visit www.mibiz.com