MiBiz September 28, 2020 print edition by MiBiz

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‘No path back to normal’ Hotel industry on edge as summer tourism boost wanes By KATE CARLSON | MiBiz kcarlson@mibiz.com

O REMAIN VIGILANT After six months of the COVID-19 pandemic, West Michigan health experts warn of complacency as seasons change

s the weather cools and winter approaches, health professionals warn about complacency and encourage residents and businesses to remain vigilant in the COVID-19 pandemic. Health departments in Ottawa and Ingham counties each issued orders this month in response to COVID-19 outbreaks among students at Grand Valley State University and Michigan State University. More than six months into the pandemic, the situations at both universities reflect a sense of complacency toward the need for people to protect themselves from COVID-19, according to health professionals interviewed for this story. These experts worry about higher risk factors that come with cold weather and generate the potential for increased infection rates and outbreaks. “We’re at a very delicate position at this moment, and how the rest of this plays out really depends on people in the community continuing to be diligent,” said Dr. Adam London, director of the Kent County Health Department.

ccupancy rates are slowly inching back up, but regional tourism leaders say it will take years for hotels to make up for lost profits caused by the COVID-19 pandemic. While the pandemic initially caused occupancy rates to nosedive and hotels to reduce staff and cut rates, ongoing limited indoor gatherings have cramped another key source of revenue: business meetings and conventions. The end of summer tourism is exacerbating the concern. “We’re really hoping the governor will provide us some guidance in the near future on how we can re-engage meetings and events,” said Peter Beukema, CEO of Hudsonville-based Suburban Inns. “Without a path or timeline to reopen, there is no pipeline. Even the bookings going into next summer are really scarce just because there’s no path back to normal.” Suburban Inns — which operates eight hotels, most in West Michigan — has had about 170 wedding groups and events canceled since April, Beukema recently told MiBiz. Its hotels are now at around 50 percent occupancy, which industry officials say is roughly the break-even point. Doug Small, executive director of Experience Grand Rapids, said April was the worst month for hotels in Kent County as companies reported an 18 percent average occupancy rate. The rate was 66 percent in April 2019. The occupancy rate improved to about 43 percent by July, but that’s compared to 71 percent in July 2019, Small said.

See FALL HEALTH OUTLOOK on page 18

See HOTEL INDUSTRY on page 8

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

GR airport traffic rebounds, though business travel and stimulus concerns loom By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com GRAND RAPIDS — Passenger travel has steadily rebounded since the depths of the pandemic slowdown, but Grand Rapids airport officials are concerned about the uncertainty over future business travel as well as a looming CARES Act deadline that could cause tens of thousands of layoffs at airlines. Airlines’ $25 billion lifeline as part of the federal CARES Act required the

air travel companies to avoid layoffs and maintain operations through September. Without additional relief from Congress, airlines have said up to tens of thousands layoffs could come starting next month. “Sept. 30 is a big date for a lot of us,” Tory Richardson, president and CEO of the Gerald R. Ford International Airport, told MiBiz last week. Airlines want to see the federal Payroll Support Program — which provides airlines direct support for employee wages, salaries and benefits

— extended beyond Oct. 1, and the threat of layoffs may be “a little bit of hype in trying to leverage” action from federal lawmakers, Richardson said. But while he’s noticed airlines pivot to offering more “sun and fun” destination flights, the lingering uncertainty remains over business travel, which tends to guide airlines’ decision making in certain markets, including Grand Rapids. “Airlines are really concerned they’re not seeing business traffic See GR AIRPORT on page 3

The Gerald R. Ford International Airport recently announced an expansion that could support international flights long term, but passenger travel is filled with uncertainty in the coming months. COURTESY RENDERING

‘We’re back’ Angel investors emerge from pandemic lull PAGE 7

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Passenger data suggest travelers are growing more comfortable with airline travel, but the future of the crucial business segment remains unclear. COURTESY PHOTO

GR AIRPORT

Continued from page 1 come back,” Richardson said. “They’re not seeing healthy demand for traffic into the fall and winter months, and they’re concerned this recovery could take longer.” Without business demand from certain markets, airlines will likely cut back flights and employees. That makes it harder for airports like Grand Rapids to make connections in other cities. “At the end of that process, it will be harder for all of us,” Richardson said. Additionally, the Grand Rapids airport expects to exhaust the $16.2 million that it was allocated from the CARES Act next month, Richardson said. “At that point, we’ll hopefully be sufficient enough to break even on the operating side,” he said, adding that airport revenue goes into capital projects, such as a recent expansion Grand Rapids airport officials announced for a federal inspection station. In the short term, the project Richardson will add needed baggage claim capacity, but it also allows for direct international flights in the future. Meanwhile, airlines and airports aren’t alone in facing business travel uncertainty, which is also affecting area tourism agencies and hotels. Richardson said the airport’s recent survey of West Michigan businesses showed more optimism of when business travel might return compared to the national outlook, which suggests it may not fully return for up to two years. In the months since the COVID19 outbreak spread here in midMarch, Richardson has boosted his role as marketer to airlines, increasingly pitching Grand Rapids as a destination with air travel demand that would support flights. — TORY RICHARDSON “It’s more aggressive now with President and CEO of Gerald R. Ford less certainty,” he said, adding that airlines are also approaching International Airport airports to feel out “the vibe, the sentiment of businesses” to give

“We’re in the same boat as the airlines in terms of needing to see the business travel come back.”

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GERALD R. FORD INTERNATIONAL AIRPORT TOTAL PASSENGER TRAVEL May

June

July

August

2019

296,202

309,439

321,723

314,561

2020

39,749

76,387

127,905

138,287

SOURCE: GERALD R. FORD INTERNATIONAL AIRPORT

airlines “some indication about markets that are healthy. (Airlines) are asking us all the time what’s going on, what the business-to-business markets look like. The more we can get it from residents and business partners, the more helpful we are to airlines. They’ll look to restore service in markets that are healthy.”

Passenger travel trends Even before the CARES Act deadline, some airlines started cutting service at Michigan airports. Last month, the Kalamazoo/Battle Creek International Airport was among more than a dozen in the U.S. where American Airlines announced it would suspend service in October, citing low demand. While flights out of Grand Rapids to some destinations have been scaled back, the airport has seen a steady increase in passenger travel since April when total passengers were just 4 percent of what they were in April 2019. In May 2020, the Grand Rapids airport reported 39,739 total passengers. Counts nearly doubled in June before reaching more than 138,000 total passengers in August, according to the airport’s latest Aviation Activity Report. Year to date, the Grand Rapids airport’s total passenger traffic is half of what it was through August 2019. While those numbers reflect a growing willingness to fly among leisure travelers, the business community remains a big unknown, particularly because of the expected long-term shift to remote working. “We’re in the same boat as the airlines in terms of needing to see the business travel come back,” Richardson said.

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.

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MANUFACTURING

Great Lakes trade center helps manufacturers compete with imports By JAYSON BUSSA | MiBiz jbussa@mibiz.com

Staying sharp

ore than five years ago, Avio-Tech Ltd. quoted a project to produce control panels and components for industrial conglomerate Textron Inc. The Twin Lake-based manufacturer, which focuses primarily on the military/defense industry, lost out on the job to a Canadian supplier. The failed bid lost at the hands of foreign competition was ultimately the catalyst that led company president Lee Thomas to explore ways to make his business more competitive. Avio-Tech eventually connected with the Great Lakes Trade Adjustment Assistance Center (GLTAAC), where Thomas and his staff embarked on a five-year journey with the federally funded program that operates out of the University of Michigan’s Economic Growth Institute and is a bit of secret to many small manufacturers throughout the state. Trade Adjustment Assistance for Firms is a federal program designed to work with manufacturers that have been hurt by imports and are looking to take measures to enhance their competitiveness. As one of 11 across the country, the Great Lakes center works with small manufacturers throughout Michigan, Indiana and Ohio, providing them with general consultation and funds up to $75,000 that must be matched by the company itself. Working with the Great Lakes center, Thomas didn’t target changes to the shop floor first. Instead, he used the matching funds to overhaul the company’s web presence in addition to acquiring NIST SP 800-171 accreditation, which qualifies the company to be considered for certain government contracts. “We do a lot of partnering with local businesses in Michigan and a lot of our strength comes from the partnerships that we have established with those businesses,” Thomas said. “So, we spend effort in that regard to secure a good relationship with those businesses and I know, in part, the web presence we established has been very helpful in that.” Coming out on the other side of the GLTAAC initiative, Thomas said he saw the program as a worthwhile venture that he readily suggests to colleagues. Thomas said two measures of success are whether the company is growing and, if so, whether it’s profitable. “We are,” Thomas said of both. “That comes from a result of a number of things and indirectly I think the GLTAAC engagement has been part of that. Every day you end up having issues of one kind or another, which require something that needs to be solved and I’ve used them as a resource to talk about specifics.”

business owner should always be looking at how to improve (their) competitive advantage, imports notwithstanding.” When it comes to competing with China and low-cost countries, it’s no mystery that overseas suppliers are generally leaps and bounds ahead of the many small U.S. manufacturers on technology and automation. Still, when Rucinski and his team at GLTAAC work with clients to fine tune operations, many of the changes — as seen with Avio-Tech — aren’t even made on the shop floor. He said many inefficiencies can be weeded out by analyzing the marketing, sales and management areas of the business. “Everyone wants more sales but a lot of time manufacturing companies don’t have a sales and

marketing mindset — they have more of an operational mindset,” Rucinski said. “But, they know how to make stuff.” To qualify for the GLTAAC’s program, a company must show sales and employment declines period to period and demonstrate that it has been affected by imports. This can generally be determined through a brief phone call, and Rucinski said almost every manufacturer in the state can successfully argue that it has been affected by imports. Because of the economic hardships of COVID-19, many companies now meet the criteria of declines in both sales and employment, which could lead to a potential surge in companies leaning on the GLTAAC for funding.

Laurie Harbour — president and CEO of Southfield-based Harbour Results Inc., a consultant for small and medium-size manufacturers — has steered a number of her clients in GLTAAC’s direction, many of which had not heard of the program. When it comes to working with her clients and helping them stack up with competition both overseas and within the states, she said efficiency is an important point of emphasis. “We tend to keep around more labor than we need Harbour a nd not cha l lenge t he sort of status quo on how we’ve always done things,” Harbour said. “If we don’t challenge that status quo, we end up being less efficient than others.” Still, Harbour acknowledged that competing with imports can sometimes feel like bringing a knife to a gunfight. “The bigger challenge right now for China and for the low-cost countries is sheerly a wage rate issue,” she said. “We do have a lot of very efficient and productive companies in Michigan and in the U.S. but we struggle — their labor rates are so much lower and their governments also play with their currency. They have built a manufacturing base that they want to keep full so — for the lack of a better word — they drop their prices to win business and people here go, ‘How do you even build a tool or make a part for that kind of money?’” The pandemic has been felt not just among U.S. manufacturers but throughout the industry on a global scale. This means import competition could become even more fast and furious in the near future. “COVID has decimated a big portion of manufacturing around the globe, not just here,” Harbour said. “And the reason I say that is because China will keep coming back with vengeance. They want to win business over here and import products over here. So, they’re going to be even more competitive and that means we have to be competitive.”

Manufacturers face import competition According to GLTAAC, import exposure is high throughout the Great Lakes states. In Michigan, 78 percent of manufacturers are seeing more with year-over-year manufacturing imports up by an average of 4.2 percent. With the COVID-19 pandemic taking a bite out of sales, many small manufacturers around the state can’t afford to lose a significant client to imports, making programs like the GLTAAC and other measures to remain competitive so important. “I don’t think COVID has changed the world economy and imports aren’t going away,” said Kevin Rucinski, senior project manager at the Economic Growth Institute at the University of Michigan. “It has disrupted the global supply chain but the supply chain will adjust in some fashion. Every Visit www.mibiz.com

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FINANCE

Pandemic disruption creates new opportunities for angel investors By MARK SANCHEZ | MiBiz msanchez@mibiz.com

fter taking a step back in the early months of the COVID-19 pandemic, angel investors say they are actively seeking deals, particularly in startups that are able to take advantage of the resulting economic disruptions. Startups working on technologies for remote work and school as well as telehealth are among the areas that angel investors are chasing in an economy altered by the pandemic. “Disruption has really accelerated a lot of changes,” Craig Hall, an angel investor from Holland and president of Lee Shore Equities LLC, said during a panel discussion at the recent Michigan Angel Summit. Hall was among a trio of angel investors who spoke at the event organized by Ann Sponsored by: Arbor SPARK. TCF BANK “Yes, people are investing during the time of a pandemic,” said Skip Simms, senior vice president at Ann Arbor SPARK who leads Michigan Angel Community, a statewide initiative that promotes angel investing. “Some see this as a period to sit on the sidelines, while others see it as a time of opportunity.” As the coronavirus spread to the U.S. in February, Detroitbased ID Ventures — like many investment firms — focused on supporting existing portfolio companies by taking a pool of money set aside for new deals and using it for follow-on investments, said ID Ventures Managing Director Patti Glaza. ID Ventures then went to partners for a stabilization fund for technology startups in Michigan. The firm ended up deploying about $4 million to make sure companies had adequate capital “to figure out how they work from home, how the sales cycle changes, how we adjust to the new climate,” Hall Glaza said. ID Ventures “kind of got back to normal operations” by June as the state began lifting some restrictions, she said. “We’re back. We’re back funding new companies, looking at new deals, and trying to keep on doing business as normal,” Glaza said.

FINANCE

Glaza

Quick pivot

Speakers at the Michigan Angel Summit virtual session, moderated by Michigan Venture Capital Association Executive Director Ara Topouzian, said they and their portfolio companies had to quickly pivot when the pandemic hit Michigan and led to stay-athome orders from Gov. Gretchen Whitmer. ID Ventures during the pandemic has made “a little higher” initial investment in Cowell startups, Glaza said. The firm typically put $100,000 to $125,000 into a first funding round pre-COVID, she said. Now, initial investments in startups are $150,000 to $175,000 “from the perspective of understanding that the next 12 to 18 months is still not entirely clear,” and companies need extra capital to get through the present economic environment, Glaza said. “I don’t think things have to go back to the way they were, but there is still uncertainty and (startups are) still trying to figure out what that next stage of capital looks like and what milestones are required to get there,” she said. “We are adding a little to each investment to get a little bit more runway to address the length of time we want them to have to build out their companies.” Startups by nature are “always fragile,” said Casey Cowell of Boomerang-Catapult LLC, which invests in new companies in the Traverse City area. Boomerang-Catapult has an “A plan” for startups and “can come up with a B plan where maybe revenue is off 15 or 20 percent,” Cowell said. “But we really don’t have a plan where revenue goes to zero and just stays there for a while,” he said. “So, for some of these companies, they’re so fragile you immediately have to concoct a strategy to put money in and then figure out how to pivot, if you can, or find a partner or accentuate relationships with existing partners.” Visit www.mibiz.com

MICHIGAN ANGEL INVESTING Angel investing in Michigan has been on the rise for years. The past three years have resulted in increased investments, more startup support and a growing number of angel investors statewide.

2017

2018

2019

$41.9 million

$52.1 million

$73.6 million

Startups supported

106

Number of angel investors

797

859

1,322

Amount invested

SECTORS SUPPORTED BY ANGEL INVESTMENTS IN 2019 Sector

Deals

Amount invested

Life sciences

$29.5 million

Information technology

$21.7 million

Advanced materials/manufacturing

$12.7 million

Consumer products

$6.4 million

Mobility

$3.3 million

SOURCE: MICHIGAN ANGEL COMMUNITY 2020 RESEARCH REPORT AND MICHIGAN VENTURE CAPITAL ASSOCIATION

said. “This is really when the next great companies are formed, right now.” Meanwhile, angel investing and the number of angel investors in Michigan has been growing for years. Michigan had 13 angel groups that in 2019 invested $73.6 million in 106 startup companies. That compares to $52.1 million invested in 84 startups in 2018. Crain’s Detroit Business recently reported on the formation New technologies, of two new angel groups: Detroit-based Commune Angels and new opportunities the Ark Angel Fund. Investors have since come back to scouting the market for deals, As the pandemic continued through the summer and into the particularly in technologies that have accelerated and grown fall and likely winter, Boomerang-Catapult has been urging portrapidly during the pandemic. Telehealth and remote working folio companies to consider how they can adjust to the resulting “probably got five to 10 years of evolution disruptions and permanent changes in the compressed into six months,” Cowell said. economy, Cowell said, adding that startups “There are a lot of new opportunities. in particular “need to be opportunistic to act Our view is full speed ahead. If ever there fast.” was a time to dig in and get aggressive, this “What we’re trying to do is get the comis it,” he said. “The volume of opportunities panies to think more about not just business is overwhelming. It’s just made us sharpen as usual, but are there break-through events the pencil and get even clearer and more like now that they can really use to acceleraggressive in evaluating opportunities. We ate and pivot into other areas,” he said. “If we have a window here where things are going — CRAIG HALL can nurture them and have them recognize to get reset to a certain degree and we want that this is the time to maybe put the pedal President, Lee Shore Equities LLC to take advantage of that.” to the metal because all of a sudden we have The new opportunities result from the this opportunity.” pandemic’s economic disruptions that As startups need to “be ready to be oppor“accelerated on so many different levels,” said Hall, a founder tunistic and willing to act fast,” investors have to prepare themof Grand Rapids-based Grand Angels in 2004. selves to provide the quick capital companies require to pivot “To be able to align ourselves with like-minded organizations and take advantage of an emerging opportunity, Cowell said. and be able to have them help recognize the kind of changes that “That’s part of the environment,” he said, “being really precan be turned into catalytic positives, I think is really key,” Hall pared to check it out fast and make a decision.”

In two instances, Boomerang-Catapult opted to work out cashless mergers for portfolio companies with “larger partners that we had been working with, because the prospect of holding out on our own was too difficult,” Cowell said. Other companies have had to transform and adjust business models and customer bases in just a few months, he said.

“This is really when the next great companies are formed, right now.”

MiBiz / SEPTEMBER 28, 2020

REAL ESTATE & DEVELOPMENT HOTEL INDUSTRY Continued from page 1

“Each month we’ve been climbing the ladder but with that, rates have fallen, too,” Small said. “The end result is room revenue has fallen off dramatically, and that’s how (Experience Grand Rapids) is funded.”

CVBs face revenue hit Visitors bureaus are often funded almost entirely from revenue at area hotels, which is the case in Grand Rapids, Holland, Kalamazoo and Muskegon. Because of that direct funding tie to hotels, all of the West Michigan tourism organizations have had layoffs in varying degrees and are operating on fractions of the usual budget. Nearly 90 percent of Experience Grand Rapids’ budget comes directly from hotel sales, Small said. Prepandemic the agency forecasted REAL ESTATE + DEVELOPMENT an $11.7 million Sponsored by budget for 2020, ROCKFORD which has since CONSTRUCTION CO. been revised to about $6 million. The agency laid off 11 of its 32 full-time employees. The uncertainty of a potential second pandemic wave, future shutdowns and whether a vaccine is available has made it difficult for both hotels and tourism organizations to plan and budget for next year. Experience Grand Rapids is forecasting a 30 percent budget decline for 2021, though it could be bigger, Small said. The ability to pivot and be “fluid” from a budgeting standpoint is crucial, he added. The Holland Area Visitors Bureau is stretching its budget with a new marketing strategy focused less on print advertisements and more on radio, cable TV and music streaming platforms in 2021, said Interim Executive Director Linda Hart. Discover Kalamazoo’s marketing strategy includes planning for activities that may be reopened next, said Interim President and CEO T.J. Waldofsky. “We see leisure travel driving occupancies, which will hopefully be followed by sports,” Waldofsky said. “The third thing to come back

West Michigan hotel operators got a slight boost from tourism travel this summer, but they are hoping for more guidance from the state on when meetings and events — with public safety guidelines in place — may return. COURTESY PHOTO will be meetings and events. The final segment we have a little less control over is business travel.”

Business travel uncertainty Because of public health concerns and the widespread shift to remote working, the future of business travel is filled with uncertainty, which is trickling down to tourism agencies, lodging operators and airports. If business travel ever returns to 2019 levels, it may take several years. “I don’t know if we’ll ever return to normal, and I think the industry has probably changed at least in the short term for the next three to five years,” said Bob Lukens, community development director for Muskegon County. “Leisure travelers will be coming back, but meetings and conventions will take a while to come back.” Tory Richardson, president and CEO of the

Gerald R. Ford International Airport, echoes the sentiment. Airlines are now servicing more “sun and fun” destinations and fewer business markets, he said. “We just aren’t seeing the business travel come back yet,” he said, adding that a recent airport survey of West Michigan businesses suggests a return in early 2021, though that’s below expectations at the national level. “We certainly hope it will come back soon so we can go back to the airlines and tell them we’re connected back to the business market.” The airport also bottomed out with passenger travel in mid-April, reaching a 96 percent decline in passenger travel compared to April 2019. Those numbers have gradually increased, though. In August, the airport had 138,287 total passengers, which is just less than half as many as the same period last year. Year to date, the Grand Rapids airport has had about half as many

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passengers as last year. “For the most part that is because passengers do feel confident in the ability to fly and do so safely,” Richardson said. Allowing safe, in-person meetings with social distance and mask protocols remains crucial for the hotel industry, Lukens said. “In-person meetings are important to businesses and I think we’re moving in that direction,” Lukens said. “Hopefully we won’t backslide with the winter here and the virus and meetings will be able to open, even at half capacity.”

No closures, some openings Despite furloughs and budget reductions, area visitors bureaus report that no major hotel has permanently closed because of the pandemic. However, most hotels can’t sustain for too long at less than 50 percent occupancy, Small said. As many as 15 hotels in Kent County closed temporarily this summer. Amway Corp.-affiliate AHC Hospitality — which operates the Amway Grand Plaza, JW Marriott, Courtyard by Marriott and AC Hotel in Grand Rapids — had called back about half of the 1,200 employees it furloughed in April by late July. Despite the guarded outlook, some hotels have actually opened during the pandemic, including a $49 million, 155-room Canopy by Hilton in downtown Grand Rapids. The eight-story hotel in Studio Park was originally set to open in June, but construction was delayed because of COVID-19. It opened on Sept. 8. “The plan for the hotel was in place a long time before everything was going on with COVID-19,” said Tricia Shangle, director of sales and marketing at Lodgco Hospitality. “Our management company felt it was important to still open and be a shining light in this time.” Also because of the pandemic, the hotel didn’t hire as many staffers as originally planned, which helped avoid layoffs, Shangle said. The hotel employs 44 and is hiring for six more positions. “We’re going to make the most of this,” Small said. “I see us gaining a couple 2 to 5 points of occupancy each month. That’s a big victory, we’re making an impact. I want people to know we have a staff that’s grinding away and we’re going to be better for it.” MiBiz Managing Editor Andy Balaskovitz contributed reporting to this story.

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SMALL BIZ: COPING WITH COVID-19

Pandemic causes software team to rethink meeting-scheduling app By JAYSON BUSSA | MiBiz jbussa@mibiz.com In the summer of 2019, Chris Ake and a couple of fellow tech entrepreneurs entertained the idea of building out artificial intelligence-fueled smart scheduling software they were already using to quickly and easily schedule meetings. When the trio was finally ready to launch the first version of the software called Sidekick, the concept of business meetings had shifted drastically. “I made a joke back then: ‘It was just my luck that we’re going to launch a software project that helps schedule meetings with people and the world shuts down,’” laughed Ake, CEO of Sidekick Ai. Like so many other businesses that saw visions for 2020 rocked by the COVID-19 pandemic, the Sidekick Ai team — which also includes founder/partner duo Jon Butler and Nathan Jean — had to sift through the chaos to find opportunity. Despite the sudden extinction of in-person meetings, Ake and his team realized the era of digital meetings could benefit even more from a product like Sidekick, which utilizes machine learning as one way of scheduling meetings with clients and co-workers.

“It kind of opened my eyes. People are always going to have to meet and connect, but the method might change,” Ake said. Sidekick offers several ways to schedule meetings. One of the primary avenues is through forwarding emails to Sidekick that contain either requests to meet or specific meeting information, such as date, time and location. Through machine learning, Sidekick scans the email, processes the language and either responds with potential times to meet or sends an invite for a meeting. A user can also schedule meetings with others through Sidekick with a shareable link, by chatting with Sidekick or by setting auto scheduling, which allows specified users to schedule meetings directly without additional approval steps. The software can be integrated with Gmail, Google Calendar, Outlook, Outlook Calendar and Hangout. A Zoom integration is on its way, according to Ake. The Sidekick team has bootstrapped the project thus far. Ake and Butler founded Grand Apps in 2011, a Grand Rapids-based web application development firm. Two years ago, the duo joined Jean at Kyros Digital LLC, which specializes in custom software and mobile apps.

To weather COVID, GR restaurant owners launch pizza concept that may stay long-term

Wealthy Theatre ‘hardest hit’ for Grand Rapids Community Media Center By KATE CARLSON | MiBiz kcarlson@mibiz.com

By KATE CARLSON | MiBiz kcarlson@mibiz.com GRAND RAPIDS — The owners of That Early Bird Cafe and Little Bird restaurants — like countless other businesses — have taken stock of what works well during the pandemic, both to weather the short-term disruption as well as set themselves up for long-term success. For owners Sarah Wepman and husband Joel Wabeke, the solution to the challenge (as it so often is) was pizza. Detroit-style, to be exact. Using space across from That Early Bird they already lease for equipment storage and office purposes, the team in mid-August launched the aptly titled Quarantino’s, which has been selling 700-1,000 pizzas a week, according to Wabeke. “It resonates with people,” Wabeke said of the name. “It’s a very serious situation and we don’t want to take away from that, but you have to laugh a little bit and find some relief, and that’s the spirit of this place.” He also called pizza a “simple and solid” pivot: “I knew pizza would do well, and I know I can do pizza well.” Quarantino’s — which offers delivery and to-go options — is now open seven days a week and may adjust hours as the seasons change. Wabeke and Wepman aren’t sure whether the restaurant will continue post-pandemic, though the name of the restaurant would likely change. “I like the idea of expanding on what we’re doing and letting people come inside,” Wabeke said. “We could do food classes here, and we’d like to keep pizza as the revenue for other things to happen.” Quarantino’s is also part of the owners’ shifting portfolio. Wabeke and Wepman are the former owners of Kingfisher Restaurant and Deli in the nearby East Hills Neighborhood, which closed in

SEPTEMBER 28, 2020 / MiBiz

The Kyros team has developed Sidekick as a side project, and Ake hopes the new company can soon hire two full-time developers of its own to focus solely on Sidekick. Sidekick started with around 100 beta users — friends and colleagues — and it now has 350 users on its platform, fueled by their listing on AppSumo, a directory of apps and software for entrepreneurs. Sidekick has processed around 150,000 emails through its forward to schedule feature. “Our product kind of markets itself — once you get up to the 5,000 mark (for users), the numbers start to get pretty good, even with a pretty conservative conversion rate,” Ake said. “So (5,000 users) is our north star.”

Quarantino’s in Eastown Grand Rapids is a “simple and solid” pizza concept that’s helping the owners bring in revenue during the pandemic. MIBIZ PHOTO: ANDY BALASKOVITZ July after being open for about a year. A lack of name recognition, the end of the lease and the pandemic all contributed to Kingfisher’s short life. Meanwhile, Wabeke and Wepman are considering new concepts and other changes at That Early Bird and Little Bird. Plexiglass is being installed at Little Bird, where the menu will shift toward deli sandwiches and boxed lunches to serve downtown workers and build on catering, Wabeke said. At That Early Bird, Wabeke is considering a pop-up concept to rebrand the kitchen and avoid being perceived as a breakfast spot, even though the menu includes an array of lunch and dinner items. “The menu wouldn’t have too many more dinner things than we already have, but it would help us get that focus to shift,” Wabeke said, adding that maintaining the business through the winter to take care of employees is the main goal. Early Bird and Little Bird shut down over COVID-19 concerns shortly before Gov. Gretchen Whitmer’s March order closing in-person dining. Core employees were mostly all called back once the restaurants reopened at limited capacity, but some chose to pursue other jobs or career options, Wabeke said. “My biggest worry is how to take care of all the staff that we have and not leave anyone out,” Wabeke said. “I don’t know if that’s necessarily possible but I would like it to be possible. They’ve put in a lot of effort. We’ve done our best to take care of people.”

Grand Rapids Community Media Center — which runs WYCE-FM radio station, GRTV, The Rapidian news outlet and the Wealthy Theatre — continues to serve the community during the pandemic but had to scale back many of its operations this year. Wealthy Theatre has seen the most negative effects from the pandemic out of GRCMC’s orga n i zat ions, sa id GRCMC E xecut ive Director Linda Gellasch. Maintaining the historic venue built in 1911 with the lack of rent revenue from performances is no easy task. “Wealthy Theatre was the hardest hit,” Gellasch said. “If we’re not providing the venue then we don’t have any income coming in.” The theater was on track to have its best year yet before it shut down and canceled about 50 events. If it’s closed through 2020, which is likely, cancellations could reach 400. “Wealthy Theatre was just on such an upward trajectory in terms of the community taking part in events and performances,” Gellasch said. “It looks like theaters might be the last thing to open back up.” GRCMC’s other entities have been operating but are still at a limited capacity, Gellasch said. Filming equipment from GRTV is now rented out through a curbside program, and the radio station is still able to safely operate because such a small number of volunteers need to be in the studio. W YCE is primarily supported by fund drives and underwriting from local venues and restaurants. Though community funding support has decreased, the radio station is still at full capacity, Gellasch said. The Rapidian — a citizen-journa list driven online news outlet — turned to internal GRCMC staff to report stories, primarily focusing on information about the pandemic. “It’s fairly difficult to go out, find and train journalists right now,” Gellasch said. “It’s still open to citizen journalists, but we’re not able to be out in the community and can’t do it the same way we used to.” While persevering through virtual and remote work, it hasn’t been the same experience, Gellasch said.

“We call ourselves the media center because we want to gather people together and make use of all these facilities and tools,” she said. “We can kind of keep it going but engaging the community is hampered. People are really excited to get back and be around each other again. You miss something when it’s all virtual.” GRCMC secured a Paycheck Protection Program loan that allowed it to delay staff cuts, though the staff has shrunk with furloughs and two eliminated positions. “We had to make some tough decisions,” Gellasch said. “But we were able to keep everybody a bit longer and keep the majority of our staff, and that was very foundational.” The pandemic has been particularly hard for nonprofits like GRCMC as energy and resources are often prioritized for organizations serving needs like food and housing, and arts groups tend to follow, Gellasch said. But maintaining a strong arts community is crucial for the city, she added. “Art is quality of life, expressions of citizens,” Gellasch said. “It’s more than just surviving, it’s living, expressing and engaging with fellow community members and it directly goes to quality of life.”

Unlike the rest of the Grand Rapids Community Media Center’s operations, the Wealthy Theatre in Grand Rapids has seen little activity during the pandemic. MIBIZ PHOTO: ANDY BALASKOVITZ

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FOCUS: DIVERSITY, EQUITY & INCLUSION

‘Culture eats policy for lunch’ Advancing diversity, equity and inclusion means changing how businesses operate By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

t’s not enough to announce diversity, equity and inclusion hiring commitments, it takes leadership teams that reflect more cultures. Likewise, it’s not enough for banks to announce new lending programs for minority-owned businesses, it takes lenders’ understanding of how communities of color operate. These are a few of the conclusions from a recent MiBiz roundtable panel that sought to capture both nearand long-term changes VIDEO of the to the diversity, equity diversity, equity and inclusion moveand inclusion ment. Guests shared roundtable is at viewpoints from the mibiz.com. Asian American, Latinx, Black, Native American and LGBTQ communities — as well as women-owned businesses — on how their organizations have been particularly affected by the COVID-19 pandemic. The group also discussed ways the business community can adopt hiring practices that attract diverse talent, and how lenders can improve access to capital for non-white companies.

The panel featured: • Guillermo Cisneros, executive director of the West Michigan Hispanic Chamber of Commerce; • Sandra Gaddy, CEO of the Women’s Resource Center; • Tanya Gibbs, a descendant of the Little Traverse Bay Bands of Odawa Indians and partner at majority Native American-owned law firm Rosette LLP; • Bing Goei, owner of Eastern Floral and The Goei Center and board member of the Asian Pacific American Chamber of Commerce; and • Jonathan Sorensen, director of LGBTQ resource center Out on the Lakeshore. To Goei, a common theme emerged from the panel: A shared sense of “invisibility and constantly being ignored as a community tells us that we are going to have to be more visible … so that we have a collective voice that demands the necessary changes so all of us in this community can be enriched.”

The past six months The panelists lead organizations and communities that have faced unique challenges over the past six months.

“Pursuing equity in education, diversity in the workforce and an inclusive economy.”

Cisneros

Gaddy

Gibbs

Cisneros said communication with and among the Latinx business community has at times been hampered by a lack of technological infrastructure during the pandemic, including internet access and reliable phones and computers. “COVID really exposed the lack of resources and infrastructure we have in our communities of color,” he said, adding that the Latinx business community has been particularly hard hit from widespread closures. “We’ve seen many cases of anxiety, high stress and depression among our Latinx business owners,” he said. “Income of businesses and families has decreased significantly in the last six months, making our communities even more vulnerable than it was before.” Gaddy said women also have been particularly harmed during the pandemic. A McKinsey and Co. report from July found the pandemic having a “regressive effect on gender equality,” as women’s jobs were nearly twice as vulnerable during the crisis than men’s, and that women disproportionately carry the burden of unpaid childcare. As a workforce development agency, the Women’s Resource Center helps women secure employment and financial stability, including women re-entering the community from jail or prison. “We continue to experience women who are in crisis, coming from evictions or a job loss or movement to part-time hours and are having a hard time making ends meet,” Gaddy said. “That’s the story we’re hearing from so many families and individuals in the community.” Indigenous tribes, meanwhile, have seen a “wide variety of experiences,” Gibbs said, such as struggling to access personal protective equipment and federal stimulus funding. But the loss of revenue from casino gaming — which directly funds tribal education, health care and public safety programs — was “really scary,” she said. “My hope through all of this is tribal governments realize the importance of diversifying their economic portfolios,” Gibbs said. While the LGBTQ community saw some victories over the past six months, including a landmark U.S. Supreme Court ruling that bars workplace discrimination based on sexual orientation and gender identity and a non-discrimination ordinance adopted in Holland, Sorensen said Out on the Lakeshore has had to adjust or scale back its programming and make up for lost funding. “We are seeing an uptick in people who have lost their jobs” and are seeking recommendations for where to apply, he said. However: “A lot of the places we’d normally recommend because we’ve partnered with them in the past or we know have a good reputation within the (diversity, equity and inclusion) world have gone through their own layoffs and aren’t hiring a lot of people. It’s a struggle not knowing how to help someone.”

Workforce development, access to capital Turning to diversity, equity and inclusion in the workplace, the panel challenged companies to install leadership teams that reflect the DEI values they praise. “Within so many companies, not just in West Michigan but the state, you do not see diverse leadership teams,” Gaddy said. Alongside leadership diversity is fair pay for women, she added.

SEPTEMBER 28, 2020 / MiBiz

Goei

Sorensen

“We see that in Black, Latinx and Native American women: We are the three groups that are paid lower than any other women, and that has got to stop,” Gaddy said. Goei said it’s in the best interest of companies and lenders to change their culture from within to include greater input from minority communities, which are playing an increasing role in West Michigan’s economy. “Culture eats policy for lunch,” Goei said. “As long as the culture in banking institutions or companies is one that — because of their lack of knowledge of other cultures — all they know is to make assumptions about other ethnic communities based on sound bites, it doesn’t matter to me if the CEO says, ‘I’m committed to this.’ The culture in the workplace will determine whether that talent from another ethnic community will stay or even accept the job. Until those organizations and other businesses change their culture within their workplace, we will not retain those talents.” While the panel agreed access to capital for women- and minority-owned businesses needs to improve, they had differing viewpoints about the role of business owners and lenders. Cisneros cited the need for more “intentional partnerships” with grassroots organizations in communities of color, an issue that flared up this summer when Kent County tapped the Grand Rapids Area of Chamber of Commerce to distribute $25 million in CARES Act funding for small businesses. “It is embarrassing that after 100 years of the Latino community being here in West Michigan, we don’t have the resources and don’t have access to capital,” he said, adding that Latinx business owners could better prepare internally to seek outside financing. Gibbs said “we need to educate banks and their leadership and private equity firms and anybody else who can be a source of capital for our community. That is a real battle.” However, Goei — while not disagreeing with Cisneros and Gibbs — posed another view. “It is not our job to educate the bankers,” he said. “If you’re a financial institution and you’re going to make money by loaning people money, don’t ignore the fastest growing communities that are not part of our traditional customer base. We should not accept that (idea) that we aren’t ready for it. I’m sorry, we are ready — I think maybe you’re not ready and you don’t care if you don’t give us access to that capital that will eventually allow you to stay in business. I’m tired of always having the blame placed on the people who really have no control over the system.”

“The culture in the workplace will determine whether that talent from another ethnic community will stay or even accept the job. Until those organizations and other businesses change their culture within their workplace, we will not retain those talents.” — BING GOEI Owner of Eastern Floral and The Goei Center

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City of GR aims to incentivize use of minority, women-owned contractors By KATE CARLSON | MiBiz kcarlson@mibiz.com GRAND RAPIDS — The city of Grand Rapids is developing an inclusion program meant to encourage the contracting of minority-owned, womenowned and micro-local businesses in projects involving public investment through tax incentives. The initiative was discussed at the city’s Economic Development Project Team’s Sept. 15 meeting. Officials hope to launch the program in the first quarter of 2021, said Jeremiah Gracia, the city’s economic development director. The initiative is laid out in the city’s equitable economic development strategic plan and is being worked on in collaboration with the Office of Equity and Engagement. The program would require developers seeking tax incentives from the city to complete an inclusion scorecard that includes setting aspirational goals for the percentage of minorityowned, women-owned and micro-local businesses they aim to use, along with a list of contractors that would be solicited. “If you’re not presented with the opportunity, it’s not Gracia there for you,” said Jonathan Klooster, an economic development coordinator for the city. “We’re trying to increase the outreach for these projects so more companies that are targeted under this program have the opportunity to bid on these projects.” Though the city will Norris evaluate developers’ goals to create a more diverse base of contractors for projects, Klooster said the city can’t set a target for developers to meet for legal reasons — and every project is different. “Simply asking those questions means that’s something we’re prioritizing, which would encourage developers to share that information,” said

Alvin Hills IV, business developer in the city’s Office of Equity and Engagement, which will help review the program. Hills said his office will also serve as a resource for developers through the inclusion plan process. The inclusion program is subject to city commission approval before it launches. “I’m glad this inclusion plan has come together. I think it’s long overdue and will help enhance our city and business community as well,” Commissioner Nathaniel Moody said during the economic development meeting. The program is a step forward in allowing all players to become active in the construction industry, said Isaac Norris, principal, architect and owner of Isaac V. Norris & Associates P.C. “It’s very much needed because the majorityowned firms have always gotten the opportunity to do this work, but we as minority-operated firms should have inclusion,” Norris said. “There are most definitely disparities. The problem with the whole system in Grand Rapids is it just takes time. It also takes some people who are in your corner to give you a helping hand.” The construction industry also tends to grow through generations passing on talent, and most minority-owned firms are newer startups, Norris said. “I’m excited about this program because it allows smaller startup minority-owned companies to be a part of the process of growth and development,” Norris said. As a Latina-Hispanic woman, Santa Matias said it can be hard at times to build trust with developers and builders on projects as the owner of a startup company. Matias founded Wyomingbased United Freedom Painting two years ago. The company mostly specializes in interior painting for residential homeowners, and does a small amount of commercial work as well, Matias said. “It’s something I want to pursue, and I want to be an example for other women that are Hispanic and might be afraid or don’t know where to start with all the boundaries,” Matias said. “It shouldn’t matter what your background is to go into this business.”

Racial equity loan fund receives $500,000 for ‘excluded entrepreneurs’ By MARK SANCHEZ | MiBiz msanchez@mibiz.com Meijer Inc. recently invested $500,000 in Rende Progress Capital, a racial equity loan fund in Grand Rapids. The retailer’s investment will support lending, programs and services for small business owners of color in Kent County to “eliminate the racial wealth gap and barriers that they face in access to conventional loans,” according to a recent announcement. “Meijer is committed to doing our part to support a culture that promotes diversity and inclusion for our customers, team members, suppliers and communities we serve. In addition to investing in our teams and customers, we’re making meaningful investments that will make a lasting impact as we take a stand against racism and inequality,” Meijer President and CEO Rick Keyes said in a statement. “RPC’s work and increasing impact from its standard lending and COVID-19 relief lending to businesses owned by diverse groups align with our values and has inspired us to join in this cause.” Rende Progress Capital said “excluded entrepreneurs” statistically represent “the racial wealth gap, denials of conventional loans and are more likely to seek predatory loans due to small business loan exclusion. They experience 36 percent more conventional loan denials, even when some have similar credit worthiness to their white peers.” Past surveys also indicate that 12 percent Visit www.mibiz.com

of excluded entrepreneurs “engage in predatory loans because they have no other sources,” according to Rende Progress Capital, a community financial development institution (CDFI). The Meijer investment will “expand our racial-equity lending and services to excluded entrepreneurs who directly experience the pressures of the racial wealth gap and statistical barriers to conventional lending due to bias and other market realities,” said Eric Foster, RPC cofounder, chair and managing director. “Meijer’s financial support is simultaneously addressing those inequalities that our customers face as well as those we face in serving them,” Foster added. “To have such a corporation and brand willing to journey with us in our continued path toward sustainability is important. Rende Progress Capital also received a $125,000 technical assistance award last week from the U.S. Department of the Treasury’s Community Development Financial Institutions Fund. The technical assistance funding is intended to help build capacity at CDFIs, such as through equipment purchases, hiring consulting or contracting services or training staff and board members. The investment in various CDFIs is aimed at increasing lending and investment activity in lowincome and economically distressed communities across the nation, according to the Treasury. The organization was one of 14 Michiganbased private or tribal entities to receive $5.1 million in funding for the 2020 fiscal year.

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Being a part of West Michigan for over 50 years has not only shaped who we are as a company, it’s profoundly impacted us as individuals. Its work ethic and passion for innovation are infused in our DNA. We are known throughout the world for our excellence in developing automotive décor components, and we attribute much of our success to the place we call home.

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Metro Health – University of Michigan Health

A Commitment to Diversity, Equity & Inclusion Q: What is Metro Health doing to advance DEI? A: We are creating and sustaining environments where all individuals and groups feel welcomed, respected, supported and valued to fully participate and contribute toward our mission. Q: How do you approach this work? A: At Metro Health, it is impossible to have inclusion without diversity, equity, cultural competency and commitment. Each component is critical to closing gaps in outcomes across different groups and maximizing organizational effectiveness. Q: How do you track your progress? A: DEI is one of our top key performance indicators, drawing data from employee and patient surveys, workforce composition, hiring and retention, health outcomes for different groups, participation in training and more.

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MiBiz / SEPTEMBER 28, 2020

FOCUS: DIVERSITY, EQUITY & INCLUSION

Despite recent progress, diversity gap remains in venture capital By MARK SANCHEZ | MiBiz msanchez@mibiz.com

ust 13 of the 80 venture capital professionals working in Michigan in 2019 were racial minorities. An equal number of all VC professionals in the state, or 16 percent, were women. The representations in Michigan of both women and racial minorities working in the VC industry are below national averages and have changed little in the recent past, although firms are now pushing toward greater diversity in the workforce and the investments they make. “What I’ve noticed in the last several months

is there has been more of an intentional process among the investor community to really want to make a difference when it comes to diversity,” said Ara Topouzian, executive director of the Novi-based Michigan Venture Capital Association. “People are really trying to figure out what they can do and how they need to do it.” The effort among Michigan firms comes as the entire venture capital industry in the U.S. works to become more diverse amid greater attention across the economy on issues of equity and inclusion. Among the initiatives the association has been considering for members that want to further diversity has been the formation of formal

internship and mentorship programs to grow the potential talent pool, Topouzian said.

Underrepresented in workforce Across the U.S., the venture capital industry that historically has been dominated by white males and slow to change “has made progress toward increasing diversity and inclusion, especially among firms that have adopted strategies in this area. Yet, much work remains for the industry to take full advantage of all the talent available,” according to a June 2019 report by Deloitte and the National Venture Capital Association on a survey of VC firms nationwide.

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The NVCA-Deloitte Human Capital Survey conducted in late 2018 found that women were underrepresented in the VC industry in investment positions and leadership. Black and Hispanic employees at VC firms were underrepresented in all positions and leadership. The underrepresentation of minorities and women in the industry persists despite some progress nationally in the two years since the NVCA first surveyed VC firms on the issue. The percentage of investment professionals who are women increased to 21 percent in 2018 from 16 percent in 2016, according to the NVCADeloitte study. The number of female investment partners increased three percentage points over two years to 14 percent as of 2018. A little more than two-thirds of the 203 firms participating in the study reported having no female investment partner, versus 79 percent two years earlier. Black employees represented just 3 percent of the workforce at participating VC firms, and 3 percent of investment positions and investment partners. Hispanic employees were represented at a slightly higher rate of 5 percent of overall employees, according to the 2018 NVCADeloitte survey. The survey also found that VC firms with an inclusion strategy tended to have more diversity within the workforce. The NVCA is now conducting a third Human Capital Survey. As of mid-September, about 110 VC firms nationwide agreed to participate and pledged that they are “committed to advancing a more diverse, equitable and inclusive venture capital ecosystem.” Among the Michigan firms that agreed to participate in the survey was Grand Rapids-based Grand Ventures, which believes the pledge is “reflective of our fund’s philosophy.” “We believe diversity is extremely important. Diverse teams provide diverse ideas, thinking and skills to perform at a higher level and generate better results and returns,” Grand Ventures Partner Tim Streit told MiBiz. Streit noted that three hires the firm made in 2019 were all non-white. “We built a very diverse team for these reasons as well as to help us relate better to diverse companies and to better support them when we invest,” Streit said. Other Michigan VC firms in the NVCA’s 2020 survey are Augment Ventures, Huron River Ventures and Renaissance Venture Capital, all based in Ann Arbor, and Detroit-based Arboretum Ventures.

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The need for greater diversity in venture capital extends well beyond the workforce. Only a small percentage of the venture capital invested in the U.S. annually goes to startups owned or led by a female or racial minority. As of 2019, just 13 percent of venture capital backed companies in Michigan were led by a CEO who was a racial minority, and 10 percent were led by a woman, according to MVCA’s 2020 research report issued this spring. Of the more than $2.1 billion in venture capital investments in 71 Michigan startups last year, $146 million went to companies led by a CEO who is a member of an underrepresented group. Of that amount, $29.2 million was invested in startups led by women, and $109.2 million was for companies led by racial minorities. Another $7.6 million went to startups led by a CEO who identifies as LGBTQ. The annual report from the MVCA this year did note that over the last five years, the amount invested in minority-led startups increased by nearly 30 times to $109.2 million in 2019. See VENTURE CAPITAL on page 16 Visit www.mibiz.com

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Inclusive excellence exists when an organization is strategically positioned to meet the needs of a changing world and embraces a culture that values diversity as fundamental to its success.

We are looking to collaborate with others who share these values and who will join with us as we continue to work across lines of identity and difference to make an impact on the lives of our students, faculty and staff and the communities we serve.

Diversity, equity and inclusion are at the core of the Kalamazoo Valley Community College mission.

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

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

Health systems face financial crisis brought on by pandemic

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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

line in Bronson Methodist Hospital’s emergency state filing to temporarily add 300 beds By ANDY BALASKOVITZ | MiBiz epitomizes the main challenge abalaskovitz@mibiz.com for boosting capacity for an expected surge in COVID-19 hrinking revenue from sales, income patients in the coming weeks. and gasoline taxes could cost state The Kalamazoo hospital’s and local governments billions ability to put the added beds of dollars in the coming months, into operation “will be depenBy JOE BOOMGAARD | MiBiz hospitals a fighting chance against the highly potentially cutting already stretched services dent on staffing,” according jboomgaard@mibiz.com contagious COVID-19. and leading to a prolonged recession without to a filing with the Michigan Once they got past the chaos in which the rules sufficient federal support. Department of Health and all it the six stages of COVID-19 copseemingly changed by the hour, they all needed PAGE 13 State officials reported earlier this month Human Services. to take a step back, assess what their next steps ing: Experiencing shock. Assessing. that the fiscal year general fund and school As with every hospital durRecalibrating. Cash Flowing. Helping. would be and recalibrate their business strategy. www.mibiz.com aid budgets ending on ing the COVID-19 pandemic, In many cases, that strategy focused on figuring Imagining. Sept. 30 could see a $1 bilBronson has been planning That seems to sum up an emotional and intelout how best to take care of employees in the lion to $3 billion shortfall, for a patient surge by simultalectual path many West Michigan business ownshort term while also addressing the company’s a result of the public health neously looking at how to add ers have travelled recently as their companies viability in the long term as the crisis continues measures taken to prevent capacity and then staff those faced extraordinary circumstances brought on to play out without a realistic end date in sight. the spread of the coronabeds, if needed. by the spread of coronavirus. To that end, business owners also thrust virus. The higher range is “In order to care for an themselves into applying for government relief 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. programs, finding novel ways to generate revepercent. Next fiscal year, Bronson plans to redeploy staff No matter what sector they work in, they all nue, and — this being West Michigan — figuring Bartik the deficit could be up to members who are not curpretty much experienced the same rollercoaster out how they could use their platforms to help $4 billion. Yet those are just estimates at this rently in clinical roles, but who of emotions. others in need. point, and it’s difficult to predict the ultimate are clinically First came the shock at how fast the virus was Here are six stories of local executives dealing effect of the pandemic on the budget. licensed. We spreading throughout the United States, then with the crisis, coping with the “new normal,” “My own guess is it might be worse than h a ve ma n y panic when it became clear that all non-essenand looking ahead to how their companies and that,” said Tim Bartik, senior economist with RNs who society could change as a result of the pandemic. 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 identifyThe Michigan operations for Trinityhas forced investors to pivot Their immediate priority is to focus cess in parallel,” Tim to help them develop and implement ing those staff members 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 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 in Southeast 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

How employers can help with mental health

PAGE 2

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

VC, PE firms steer companies through crisis

Downtown Grand Haven. MIBIZ PHOTO: MARLA MILLER

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

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

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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.

See MENTAL HEALTH on page 6

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

INSIDE:

Industry 4.0 SEE PAGE 4

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

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EXPLORING WHAT’S NEXT

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 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 Presta

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

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FOCUS: DIVERSITY, EQUITY & INCLUSION

VC DIVERSITY IN MICHIGAN Since 2014, the Michigan Venture Capital Association has included diversity data in its annual research report. Here’s a look at the diversity among VC professionals in the workforce and in annual investments through the years.

WORKFORCE

New solutions that bring the flexibility employees need.

Year

Professionals

White males

Minorities

Women

LGBTQ

2014

103

2015

105

2016

2017

2018

2019

INVESTMENTS IN STARTUPS Year

White male-led

Minority-led

Women-led

LGBTQ-led

2014

110

2015

117

2016

117

2017

114

2018

114

2019

106

SOURCE: MICHIGAN VENTURE CAPITAL ASSOCIATION, 2020 RESEARCH REPORT

VENTURE CAPITAL Continued from page 14

Topouzian points to two recent developments in Michigan signaling a change: The formation in Grand Rapids earlier this year of the New Community Transformation Fund that’s working to raise up to $25 million to invest in startups and businesses owned by racial and ethnic minorities; and the launch this month of Commune Angels in Detroit that was founded by five Black professionals.

Peer network In an August webinar hosted by the MVCA, Carolyn Cassin, co-founder and general partner of the BELLE Impact Fund that invests in women-owned businesses and is backed by female investors, said the data in the association’s annual report “tells the whole story” about the imbalance in venture capital that “we need to correct.” That imbalance is why Cassin and her partners formed the women-led BELLE Impact Fund in 2018, which has gone on to invest in 10 companies. Part of the issue is a need to generate greater exposure for women-led startups “and make sure they get the same kind of opportunity to be an important part of this ecosystem,” said Cassin, who’s also president and CEO of Michigan Women Forward. Aaron McClendon, an entrepreneur-in-residence at Detroit Venture Partners, partly attributed the lack of capital invested in minority- and women-led startups to investors staying within their established peer and referral networks for deals. To further improve the flow of capital to women- and minority-led startups, VC professionals could reach out beyond their existing peer networks that for many firms have been a

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usual source for prospective deals and investment opportunities, McLendon said in the MVCA webinar. “If you look at the top of the funnel, most of the investors that are making investments don’t look like the people that are not getting funded. That’s one of the areas that’s creating a barrier to more success in this area,” McLendon said. “One of the reasons this is such a challenge is we tend to do business with friends and people that we’re comfortable with and we have kind of a familiarity with. So, if your friends are not necessarily people that don’t look like you, it’s kind of hard to recruit and identify entrepreneurs that fit that mold.” Women and minority entrepreneurs also need to “be tenacious” in networking with people who can assist them and in time help to secure needed capital, Cassin said. “It’s all out there. You just have to go ask for it. You just have to connect up with it,” she said during the MVCA webinar. “If you want things to change, be a part of the force that changes it.” The NVCA-Deloitte report on the 2018 survey said that reaching outward, rather than looking internally or using referrals from peer networks when filling an open position, can also help VC firms create a more diverse workforce. Slightly more than one-third of the firms surveyed nationally seek external candidates “always or most of the time” when recruiting for open positions, and 43 percent recruited externally for senior finance, operations, and administrative positions. Nearly half sought external candidates for junior investment positions and 52 percent did for junior finance, operations, and administrative positions. “Since VC firms do not have a sufficient representation of women and minorities, relying on referrals is likely to perpetuate the problem because people tend to recommend people that they have worked with or know within the industry,” according to the NVCA-Deloitte report.

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FOOD BIZ

Report outlines restaurant maintenance strategies to reduce operating costs By JAYSON BUSSA | MiBiz jbussa@mibiz.com

acing limited capacity and modified business models, restaurants in every segment are looking for all possible ways to whittle down costs. In many cases, tens of thousands of dollars can be found in an operator’s approach to repairing and maintaining equipment. Grand Rapids-based 86 Repairs, a business that provides end-to-end equipment repairs and maintenance processes for restaurant groups, recently released a study called “The State of Repairs.” Originally intending in March to release the study — which provides trends of repairs and maintenance in the restaurant industry, 86 Repairs held off to provide additional data and insight that accounted for the COVID-19 era, which has completely blown up standard operating procedures for restaurants across Michigan. “Restaurants do not have a lot of technology in the back of the house,” said Daniel Estrada, co-founder and CEO of 86 Repairs, which splits operations between Grand Rapids and Chicago in addition to staffing a remote team. “There isn’t much good data on what kind of repair and maintenance programs help save you money. That’s one of the big reasons we published this report — to provide visibility to what kind of things save restaurant operators money.” The report details the typical equipment repair and maintenance needs of quick service restaurants (QSR) and full-service restaurants (FSR). Many restaurant operators see these processes as death by a thousand cuts.

Common, costly pitfalls The average yearly spending on critical equipment repairs for QSRs is $9,360 per location, including $520 per service incident on average. That total is greater for FSRs, which see $13,161 average yearly spending on critical equipment repair and $457 per visit. On top of that is the cost and inconvenience that comes with having a critical piece of equipment offline. The report says a critical piece goes down roughly 1.5 times per month for QSRs and 2.4 per month for FSRs. Resolving these problems typically takes seven to nine communication touch points, 1.5 days to get a service person on site and three days to order parts. Some of the most common pieces of equipment that require servicing — based on 86 Repairs’ own clients — include refrigerated prep tables, walk-in coolers, ice makers, dishwashers and gas-powered fryers. On the job at 86 Repairs, Estrada said he regularly sees inefficiencies in a few different areas of the restaurant business. For starters, communication among large restaurant groups is one of them. “Within restaurant groups, there is a lot of miscommunication about repairs and there are mistakes that are made and it costs operators money,” Estrada said. “An example of this is paying a company to come out and flip a circuit breaker. In many cases, no one knew to ask that question.” Another area Estrada stresses is managing vendor relationships, which includes everything from finding the appropriate vendors for each market and making sure operators are leveraging them in a cost-effective way. Estrada said this can be challenging for operators. Visit www.mibiz.com

Also, Estrada said many operators find savings in preventative maintenance plans, of which 86 Repairs has seen an influx. “It’s something that many operators underutilize to save money,” he said. “Part of the reason is they don’t necessarily know where it’s proven. We believe that there is not good enough technology or data in that part of the industry so we’re collecting a lot of those insights on which PM programs actually save operators money.”

Taking time to assess Jeff Lobdell, president of Restaurant Partners Management Inc., also known as 4GR8Food Brands, utilizes 86 Repairs’ services for his portfolio of restaurants, which numbered 20 heading into the pandemic shutdown. He pointed out that having a reliable vendor in his company’s corner empowers managers of all levels with the ability to troubleshoot equipment repair and maintenance needs instead of it all falling on a single senior manager. Restaurant Partners Management — whose portfolio includes names such as Rockwell Republic, Beltline Bar and Sundance Grill & Bar in Grand Rapids — was able to step back and reassess its operations when restaurants were restricted from hosting dine-in patrons. “We’ve never been more proud of how our facilities look and how they function,” Lobdell said. “Because we took the time that we were unable to serve guests in our dining rooms and we upgraded as much as we could.” Lobdell’s group, like most operators, chose to make some upgrades and adjustments to accommodate for an influx of carry-out patrons. None of the changes, however, were monumental in nature. “Some of our restaurants, we got more cheese melters and pieces of equipment to help finish the product,” Lobdell said. “Rockwell Republic, because of the popularity of our sushi, we upgraded our sushi line where there could be packaging up above the sushi instead of having to run across the kitchen to get the packaging.” Through the chaos of the pandemic, Estrada said operators have shown innovation and resiliency when it comes to operating their businesses, which will ultimately benefit them on the other side of the pandemic. “When you compare pre-COVID revenue to revenue now, yes it’s down about 20 percent but (many operators) have been able to flex some of their costs down and shrink their menus and improve margins, focusing on more high margin items, lower their food costs, lower their labor costs,” Estrada said. “When you think about the restaurant business itself, good operators have been able to make a lot of changes to their business to survive and in some cases thrive.”

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HEALTH BIZ FALL HEALTH OUTLOOK Continued from page 1

People need to “buckle down” and keep following basic public health recommendations like using facial coverings in public places, maintaining social distance and good hygiene, London and others say. Complacency on top of the change in the seasons threatens the progress made over the summer to minimize COVID-19’s spread and contain outbreaks, London said. “At this moment, I think we’ve been victims of our own success to some extent. As things get cooler, and we have school and other things happening that bring people in tighter proximity, our risk is increasing,” London said. “If people think that this is over or that the next couple of months are going to play out the way the last handful of months have played out, that’s a mistake.” London “wasn’t really surprised” at the county orders for MSU and GVSU students after outbreaks appeared to result from students at social gatherings outside of school. Controlling the spread of the coronavirus has been more of a challenge at the college level than K-12 schools, he said. After all, college students “have a lot more leeway to behave how they want to behave and that’s not always great for disease prevention,” London said.

can prevent the kind of outbreaks other places have seen.”

Acting as partners

Key to controlling campus outbreaks London Elmouchi Biersack Grifka is college students “acting as partners with us in this,” London said. That’s been an issue Elmouchi, president of Spectrum Health West for health departments. Michigan. “In particular, when you start bringThe orders in Ingham and Ottawa counties ing people together for college and things like target students not following public health guidethis — where for the last six months have been lines. Ingham County Health Officer Linda Vail, really apart — it’s natural to want to congregate.” in announcing the order on housing around the As the weather cools and many people remain MSU campus, specifically cited how the outbreak indoors, Elmouchi worries that “it’s going to be was “being fueled in part by a lack of cooperation harder for people to do things that we need to do and compliance from some MSU students, many to keep this at bay,” he said. residing in the properties now under mandatory “I think we’ve gotten lucky because we had quarantine.” a beautiful spring and summer and so we all The Ottawa County Department of Public enjoyed being outdoors so much more. Once Health said in issuing a stay-in-place order Sept. we’re all indoors by virtue of what will invariably 16 that “many students report having no contacts come in the winter, I think we will have more or refuse to disclose contacts.” problems unless people can be very diligent with The Ottawa County stay-in-place order that the spread of COVID inside,” Elmouchi said. runs through September requires GVSU students After schools returned in recent weeks, who live in off-campus and on-campus housSpectrum Health has seen increases in hospitaling to remain in their residences. The order does izations from COVID and a slow rise in positive include exceptions that allow students to attend tests, Elmouchi said. in-person class or labs, get food, go to a medical Health departments for months had the appointment or religious event, as long as they “advantage of summer time and schools being ‘General fatigue’ obey “strict adherence to preventive measures.” out of session (and) people outdoors more,” Part of the complacency, especially among Ottawa County took the action after testing reducing the risk and spread of COVID, London younger people, comes from frustration after since Aug. 23 detected more than 600 cases of said, while Kent County hasn’t seen outbreaks months of restrictions and requirements for COVID-19 among students living on or near the near the degree as college campuses. social distancing and wearing face masks. GVSU campus in Allendale. “We have had cases, and that’s not a surprise “Without a doubt there’s a general fatigue In Ingham County, the Health Department at all. We know we’re going to have cases wherthat has set in for so many because this has this month quarantined 39 large houses around ever there are people at this point. The key is been going on for six months. It’s hard to be apart the MSU campus after a 315 percent increase in identifying them quickly and making sure they’re from people, it’s hard to wear masks and we’re COVID-19 cases since Sept. 1. isolated and their close contacts are in quarandefinitely seeing complacency,” said Dr. Darryl The targeted orders in Ottawa and Ingham tine,” London said. “If we can do that, I think we counties are preferential to the broader restrictions in place during the spring and early summer, said Brian Calley, president of the Small Business Association of Michigan. “It’s aimed at the problem, as opposed to saying, ‘Hey, we have these increased cases because of Michigan State or Grand Valley students, therefore we have to make these changes across the whole landscape,’” Calley said during a recent SBAM briefing. “It was targeted and we hope that’s the approach we take going forward.” www.triangle-inc.com Construction. Commitment. Unparalleled.

BUILDING ON OUR PROMISES

“If people think that this is over or that the next couple of months are going to play out the way the last handful of months have played out, that’s a mistake.” — ADAM LONDON Director, Kent County Health Department

‘Careful balance’ The outbreaks at MSU and GVSU — and to a lesser extent at other campuses and K-12 schools — illustrate the “careful balance” educators are seeking between resuming classes in a pandemic and the public health risk, said Dr. Matthew Biersack, chief medical officer at Mercy Health Saint Mary’s Hospital in Grand Rapids. The orders “definitely provide a strong message to the community and all of us that we can’t downplay the significance and severity of the virus and we have to be just as vigilant,” Biersack said. Outbreaks earlier in the pandemic affected people who are more vulnerable: the elderly and individuals in frail health or with chronic medical conditions. Of late, outbreaks have been occurring among a younger population. As of last week, nearly 20 percent of the COVID-19 cases in Michigan were among people ages 20 to 29 years old, which was the highest of eight age groups, according to a state database. “The tide has really shifted toward a younger population of people who are now being affected and I think in part because schools are returning and in part because it’s just hard to keep our guard up and our vigilance up after doing this for months,” Biersack said. Biersack is “terribly worried” about what happens this fall and winter when “we’re all cooped up indoors” with the onset of cold and flu season. “We still have a lot of the population at risk,” Biersack said. Over the past six months, much has been learned on how to contain the virus’ spread and to treat people who become infected, said Dr. Ronald Grifka, chief medical officer at Metro Health-University of Michigan Health. If “we completely let our guard down, we’ll be back to where we were in March,” he said. Grifka hopes to see a continued easing of remaining restrictions and the opening of businesses, although “we need to be smart about how we do it” and proceed with “good health practices and process. We still need to just continue to be careful.”

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TECHNOLOGY

Tech repair companies play key role as demand for electronic devices grows By JAYSON BUSSA | MiBiz jbussa@mibiz.com

t Tech Defenders — a business that specializes in repairing, refurbishing and reselling laptops and mobile devices — processing a used device and finding it a new home used to take about 60 days. Thanks to a demand boom from remote working and distance learning, the Grand Rapids-based company now processes and resells devices in as little as three or four days. “It’s really lopsided supply and demand right now,” said Josh Verhulst, director of business development at Tech Defenders. “When you look at it on the surface, having a strong demand for devices and products is very good — it’s a great problem triangle to solve at Tech Defenders. At the same time, you need to continue to bring devices in so we can fulfill the needs of our customers.” Tech Defenders, which belongs to the billion-dollar I.T. asset disposition industry, partners with clients that have high-volume device or technology needs, including school districts and businesses that have significant remote workforces. Tech Defenders is under the same ownership group as Mobile Defenders, which focuses specifically on cell phone and tablet parts distribution. The group also created — and eventually sold — Genius Phone Repair, which specializes in repairing broken cell phones, smartphones and tablets.

Pandemic pain points Tech Defenders has found unique opportunities in the remote-centric nature of schools and businesses during the pandemic. The market climate has certainly maintained business, but it has also created its share of pain points in the process. Scant inventory is one of those issues for a company that relies mostly on refurbishing and reselling devices for roughly 90 percent of its revenue. Tech Defenders also generates revenue by administering repairs and pre-paid repair programs. “Pretty low is an understatement,” Tech Defenders founder and CEO Garry VonMyhr said of the company’s inventory. “We actually went into the pandemic with good supply. …We ate through all of that and so we are processing (devices) just in time for the most part right now.” For Tech Defenders’ business model, the flood of devices that is slowly seeping into the

market from OEMs will eventually affect the company. VonMyhr acknowledged the excess could ultimately drive down prices for refurbished devices, but Tech Defenders has sufficient channels to easily find the devices a new home. “When we bring them back, quite a few of (the devices) stay in the U.S. but we ship them across the world at the end of their life cycle,” he said. “There is almost always a use for the devices, it just becomes a different challenge for us to find those markets, but we’re pretty well established throughout the globe.”

Laptop shortage hits nation, schools Tech Defenders has also helped clients through what has become a national laptop shortage. Recent reports using estimates from the world’s largest laptop makers Lenovo, HP and Dell found a shortage totaling around 5 million. Not only has demand skyrocketed, but the problem has been compounded with sanctions on Chinese suppliers. Verhulst and team work with school districts, some of which have felt this crunch more than others. He said the overwhelming need from schools is laptops and devices as well as more frequent repairs because devices don’t stay within school walls. “More than a resource for product, we are really trying to be a consultant to the schools,” Verhulst said, particularly with matching students with devices and protection plans. “And again, this pandemic has really forced a lot of these schools to jump into this, especially those that were a little reluctant. There are a lot of questions around how to do this whole thing.” Zeeland Public Schools I.T. Director Mark Washington said his district was fortunate to have robust technology pre-pandemic, including a one-to-one student-to-device program for about eight years. “From a device standpoint, we’ve been very fortunate in the fact that our community said technology is important and they’ve funded it,” Washington said. “We weren’t scrambling for devices. What we ended up scrambling for was getting devices repaired and parts availability. We had to hire a bunch of extra staff members to do the ZConnect program, and getting laptops was just brutal.” In fact, Washington was told by suppliers it would take six to nine weeks to secure 25 laptops for staff. He also doesn’t anticipate being able to

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SEPTEMBER 3, 2013 VOL. 25 • NO. 23

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

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

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

By NATHAN PECK | MiBiz

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

Make messes

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

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

FOUNDERS BREWING CO. ■

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

FEBRUARY 17, 2014 VOL. 26 • NO. 9

Keystone relies on product development business to drive contracts

An employee at Grand Rapids-based Tech Defenders repairs electronics, which have seen a surge in demand in light of remote working and virtual learning. COURTESY PHOTO fulfill new requests for laptops until December at the earliest. And these are pain points for a district that was well equipped. He said the problems are magnified in districts that lacked the necessary resources or were hesitant to embrace technology. Getting the gear is the “hard part,” he added, while some vendors are marking up prices. “It feels a lot like the (personal protective equipment) piece back when the states were competing against each other to get PPE,” Washington said. “Technology has now become, at times, the new PPE.”

Low-income households left behind? Some households rely on personal computers and devices to access school work, leaving lowincome families throughout West Michigan especially vulnerable. Comprenew, a Grand Rapids-based nonprofit that focuses on refurbishing and recycling electronics, created the Connect All Michigan Program (CAMP) to provide relief for these populations. Through the program, Comprenew connects low-income families who don’t have

a home computer with free or discounted technology. Sarah Laman, director of marketing and development at Comprenew, said some children are forced to access school work through a parent’s smartphone or a number of kids in one household are left to share a single desktop computer. Comprenew refurbishes old, broken and retired electronic devices from the community and corporations to either resell at one of its retail stores or use in programs. Despite the pandemic, Comprenew has been able to maintain a fresh flow of inventory with help from corporate partners. The pandemic has validated CAMP’s mission and shone a light on Michigan’s digital divide, Laman said. “I think everyone at Comprenew feels very refreshed in terms of their commitment to the cause,” Laman said. “We’ve always had a piece of our vision to help bridge the digital divide in our community. We’ve had programs that revolve around digital literacy and getting low cost, refurbished units into the hands of the people that need it most. … Right now is perhaps the biggest indicator that this is absolutely still a need.”

Dedicated to helping organizations create inclusive work environments!

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

FBC BARRELS PRODUCED

120,000

190,000

2014 proj.

112,000

100,000 80,000

70,886

60,000 40,000 20,000

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

24,501

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

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

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

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

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MiBiz / SEPTEMBER 28, 2020

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

SEPTEMBER 28, 2020 / MiBiz

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NONPROFIT ORGANIZATIONS

Kalamazoo expands housing protections, offers loan program for housing, nonprofit, equity projects By KATE CARLSON | MiBiz kcarlson@mibiz.com KALAMAZOO — The Kalamazoo Community Foundation has added a stronger racial equity analysis to its longtime Impact Investment Loan program. “What we’ve learned in the last couple of months is that we’re being impacted by a double pandemic of COVID but also racism and structural inequity,” said Martha Gonzalez-Cortes, KZCF’s vice president of community investment. “So we’re deeply concerned about the access of capital that has been so limited for people of color.” The loan program, which has been available for the past 15 years, is available to businesses or organizations for projects that support community growth in the areas of housing equity, creating an inclusive economy and developing nonprofit infrastructure. Gonzalez-Cortes The program has low interest rates based on the consumer price index plus 1 percent, often placing the loans below market rates with flexible terms and a shorter application process. Applications for the loans will be accepted on a rolling basis and reviewed four times a year by the foundation’s Impact Investment Committee using a racial equity assessment guide. The foundation hopes to issue a minimum of $2 million in loans a year, Gonzalez-Cortes said. “The Impact Investment Committee has a lot of newer faces, a lot of diverse community members, backgrounds and diverse racial representation,” Gonzalez-Cortes said. “Those pieces are newer and different.” Set to open in 2021, The Creamery housing development in Kalamazoo’s Edison Neighborhood is a past Impact Investment Loan recipient. The project will provide apartments for low- and middle-income residents and is equipped with a 24-hour childcare center and a small business accelerator. “Seeing forward-thinking projects like The Creamery become reality demonstrates how KZCF and community leaders can work together to create a stronger Kalamazoo,” Jim Escamilla, a member of the KZCF Board of Trustees and chair of the Impact Investment Committee, said in a recent statement. “We are excited to see how we can support similarly ambitious initiatives that align with our values.”

Housing barriers While the loan program has flexibility for projects that may fall outside of the three stated goals, housing equity is a key component. “Access to housing is a huge need in Kalamazoo, and we know there’s a housing gap,” Gonzalez-Cortes said. “We haven’t been building new housing at a pace that’s keeping up with the demand. Certainly we’re concerned about low and affordable housing, but we also have a lot of interest in mixed-use housing with a range of people earning different incomes.” City officials have also taken action to address housing equity. On Sept. 8, the Kalamazoo City Commission revised an ordinance to add housing protections for residents with previous evictions, those using housing vouchers and people who were previously incarcerated. The ordinance also limits fees associated with the cost of a background check. If an applicant is denied housing, the landlord now has to provide a written statement explaining the reasoning for rejection. Landlords who discriminate against the newly protected groups could face up to a $2,000 fine. The city commission also called for the formation of an appointed Civil Rights Board to review allegations and ordinance violations and make recommendations to the city about changing discriminatory practices and policies. “We are excited about the changes to the housing ordinance and believe they will help increase housing access for people of color in Kalamazoo,” Sholanna Lewis, director of truth, racial healing and transformation at the Kalamazoo Community Foundation, said in a statement. “Housing insecurity particularly impacts young people and the Black population in our area, so these protections have the opportunity to increase racial equity when it comes to housing.” The Civil Rights Board is a key part of the process and ensuring the policy works, Lewis added. Kalamazoo Vice Mayor Patrese Griffin helped draft the ordinance language. He said at the Sept. 8 meeting that he hopes the ordinance will help increase housing access and quality of life in Kalamazoo. “Housing is foundational and impacts the course of a person’s life, influencing everything from their health to the opportunities they have,” Griffin said. “We have studied the positive effects of policies like this in other communities in Michigan and across the nation.” Visit www.mibiz.com

Dam removal on the Grand River is expected in the coming years as part of a major, signature redevelopment for the city of Grand Rapids. MIBIZ FILE PHOTO

Equity gets closer look with Grand River restoration project By KATE CARLSON | MiBiz kcarlson@mibiz.com GRAND RAPIDS — The Grand River has historically divided the city of Grand Rapids in multiple ways, but as redevelopments have ramped up in recent years, leaders of a restoration plan are stressing the importance of making the river accessible to all residents. It could still be years before significant construction begins to restore the river rapids in what will be a yearslong, signature project for the city. The extensive redevelopment will include land acquisitions, facilitating programming, removing dams, informing the public about water safety, and giving space to micro local businesses along the riverbank. As of late last year, the nonprofit developer, Grand Rapids Whitewater, predicted construction would start in July 2021. Ensuring equity is included with Sueing future development was recently rein forced with new grant funding and organizational changes. The Grand Rapids Community Foundation Adkins recently awarded the city an $800,000 grant to continue river development equity work through 2024. Eugene Sueing, pr o g r a m d i r e ctor at t he Grand Blaha Rapids Community Foundation, said the foundation is investing in projects and programs with partners that share its commitment to becoming actively anti-racist. “The transformational river restoration will have significant environmental, social and economic impacts on our community, so it is critical equity is intentionally embedded,” Sueing said.

Engaging with the river

Equity work for the project has been guided by a statement that Adkins drafted, which reads: “To create a river for all that honors both the history and the future of our river by embedding racial and economic principles in all that we do both in the water and along the river banks. We understand that all river-related decisions today will have an immense generational impact on the residents of our city.

The River for All Racial & Economic Equity grant will allow the city to hire an analyst to embed racial and economic equity in the project, work with local organizations that focus on diverse leadership and engagement with nature, create dedicated business incubator spaces along the river for women and businesses of color, and install a water quality notification system. “There is a lot of distrust with peoNew nonprofit ple wanting to get into the river,” said Diversity and inclusion has been an Ciarra Adkins, equity analyst in the underlying principle throughout the city’s Office of Equity and Engagement. Grand River Restoration process, said “The (water quality notification sysKathy Blaha, a Florida-based projtem) is our attempt to educate the ect consultant to Downtown Grand public, specifically a public that’s not Rapids Inc. Blaha was hired last year often engaged in the river.” to help study potential organizational The barriers to green spaces like changes to help the project advance. the Grand River have always existed A newly created nonprofit plans to for people of color, Adkins said. She implement the vision added that COVIDand work on partner19 brought attention ships for the public to the issue for more investment project members of the comand spin offs that will munity, while the panSponsored by: occur in the city and demic has highlighted GRAND RAPIDS COMMUNITY the county, Blaha said. the importance and FOUNDATION A board of directors health benefits of being will be formed in 2021 outside. to help move forward “Recreation is a with an action plan. privilege as far as having the time, “It’s a matter of helping determine having the means to pay for different who does what,” Blaha said. “It’s a very activities, having the transportation as large vision with large action steps. It’s well as feeling welcome there,” Adkins best to divvy up the tasks.” said. “Typically people of color have The reimagining of the Grand River not been welcome in those areas, and is too large of a project for just the city clashes with people of color and nonor a department to carry out, Blaha people of color have taken place in said. Planners are looking at also formenvironmental spaces.” ing a separate recreational authority Adkins said intentionally includfor the river project that could form ing equity with the Grand River regional partnerships with public Restoration project — which was first agencies. proposed in 2008 — is meant to coun“These authorities are very useful ter the ongoing misconception that it and an effective way to align governwill only serve certain demographics. ment authorities,” Blaha said. “This While engagement efforts were slowed will really create a framework, and by the pandemic, strategic programwe’re in the process of building the ming will take place next year. team right now.” “We hope to work with local organiAdkins said the renewed equity zations of color to work with residents commitments are to help “all of our of color,” Adkins said. “Programming residents feel welcome. We’re using along the river banks and work to get this to bring all parts of the city people in the river will include differtogether. The river has divided us for ent activities that will be targeted to so long, hopefully it will be what brings children, families, adults, seniors and us together.” people with disabilities.”

NONPROFIT SECTOR NEWS

MiBiz / SEPTEMBER 28, 2020

Q&A Keli Christopher

IN THE NEWS

Founder, STEM Greenhouse

M&A Keli Christopher founded the Grand Ra p i d s - b a s e d n o n p ro f i t S T E M Greenhouse six years ago to help K-12 students — in particular, children of color — along an academic path more comfortable than she experienced. As the first Black person to receive a Ph.D. in agricultural engineering from the University of Illinois, Christopher endured a challenging and isolated path through higher education. Her mission now is to increase students’ exposure to science, technology, engineering and mathematics (STEM) in the greater Grand Rapids area, where she still sees a diversity gap in STEM education. Earlier this month, Christopher was a featured speaker at the Southeast Grand Rapids Community and Economic Development Conference hosted by the Grand Rapids African-American Community Task Force. In an interview with MiBiz, Christopher discussed inequities in the nonprofit sector as well as the ongoing barriers to engaging more non-white students in STEM education. STEM Greenhouse was founded in 2014. How has your work changed over that time? I’ve always had the same mission and vision for STEM Greenhouse. It’s a metaphor for having a place where children can grow and learn as opposed to a lot of STEM programming that’s like a day of coding or a week-long STEM camp. Vulnerable children, children of color, really require more educational enrichment opportunities over a longer period of time. I wanted relationships that would last several years with these students, and I want them to be successful as they approach college. How does your organization function? Are you going into the schools? It’s an after-school program twice a week. It typically runs for most of the school year, though not every month — October through April is the general time period. Our goal is to do 20 weeks of programming, 40 sessions of after-school STEM, focused mainly on science and math. The program is currently for middle school students. There is a desire to increase, expand and do different things. We just don’t receive the funding to expand the program to additional schools. (My talk at the Grand Rapids conference) is about the lack of equity in funding to nonprofits. Nonprofits like mine founded by a person of color do not receive a fair share of grant dollars in our community. … That inequity leads to additional inequity. People of color are not allowed to impact their own communities, even though we have the most resources and skills to do that. Who are your main funders now? One of our most successful partnerships is with the Steelcase Foundation. They have been really great about identifying programs that are impactful and are supporting those programs. Steelcase is really the only foundation that’s given us significant support. How many employees are at STEM Greenhouse? There’s me and I have an assistant. That’s it. There is no funding. … Like I said, there’s systemic racism in philanthropy. Donors generally feel more comfortable giving to people who look like them. Until people get more comfortable supporting people who they don’t look like, we will continue to perpetuate the system we say has a problem and we want to eradicate. A local researcher recently told me the COVID-19 pandemic is a “big test for philanthropy,” which faces “justifiable criticism” that it could “extend the concentration of power and resources.” What’s your response to that idea? I can’t necessarily say that I know what foundations are doing, but in terms of education to the vulnerable students living in poverty: Virtual learning is not an ideal mode of learning for them. It’s not always easy for parents to get the resources they need for their children, for whatever reason. I’m trying to let people understand these are problems in poor districts but not in districts where parents have more resources. I can imagine that after this pandemic there’s going to be an even larger gap in educational outcomes than there were prior, and the gaps were huge previously. Since founding STEM Greenhouse six years ago, are you seeing more diversity in STEM fields? No, which is the sad part and why I’m doing this. When I got my Ph.D. at the University of Illinois, I was the only Black person to get a Ph.D. in agricultural engineering at U-I. STEM fields are not diverse, though some are a little more diverse than others. In terms of people of color, we have a long way to go. I’m trying to fill a pipeline so there can be more STEM professionals in the future. What are the barriers to that? Why aren’t more people of color getting involved in STEM? One of the reasons is our education is typically inadequate. The second, when you go into these fields, there’s a lot of racism. Once you get in college, you’re socially isolated. First I went to a historically Black college and university — thank God — so I could learn in an environment where I wasn’t the only Black person. Then at U-I, I was the only Black person. I was by myself all of the time having to do science and activities alone. This makes it more difficult, less fun and more challenging. No one wants that stress on top of what else they have to achieve in their lives. There’s academic preparation that needs to increase. Throughout their education, a Black child these days is not getting an equitable education to begin with. There’s no one like you in the profession. I want my students to see someone who looks like them. There’s something about self-efficacy that’s so critical. If you don’t ever see yourself in that career, it’s impossible to envision yourself doing it.

Interview conducted and condensed by Andy Balaskovitz. COURTESY PHOTO.

SEPTEMBER 28, 2020 / MiBiz

n Grand Rapids-based M&A firm Calder Capital recently announced the sale of a Battle Creek-area manufacturing company, which was sold to individual investor Tom Tilma. Calder Capital served as the advisor for Integrated Manufacturing Concepts, which is located in Ceresco, southeast east of Battle Creek. The company manufactures tube fabrication and bending products, serving a variety of different industries. Terms of the sale were undisclosed. n Traverse City-based High Street Insurance Partners acquired insurance agencies Tracy, Driscoll & Co. Inc. in Bristol, Conn., and Millennium Alliance Group LLC in Long Island, New York. Since forming in 2018 with backing from Detroit private equity firm Huron Capital, High Street Insurance Partners has completed 15 acquisitions and continues to pursue an acquisition strategy. n Grand Rapids-based snack food maker Cheeze Kurls Inc. was acquired by a Florida private investment firm. Former Cheeze Kurls co-owners — President Timothy Dedinas and Vice President Robert Franzak — retained a minority ownership and remain in advisory roles with the company. Kilroy Partners of Boca Raton, Fla. invests across a variety of sectors in entrepreneurial, family-owned and non-institutionally controlled businesses in the lower middle market. In an announcement, Franzak described Kilroy Partners as the right buyer for Cheeze Kurls. Previous potential buyers have proposed closing the plant and moving operations out of state, though Kilroy Partners will maintain the company’s Grand Rapids operations, Franzak said. n A long-standing New Buffalo ice cream and yogurt shop Oink’s Dutch Treat has been sold to an individual investor. Grand Rapids-based Small Business Deal Advisors navigated the deal for Roger Vink, the former owner of the shop for 34 years, which features a variety of ice cream flavors in addition to memorabilia. The shop’s buyer is Michael Schimanski. “It is a fantastic business, and I look forward to continuing operations in the same manner that visitors have loved for years,” he said in a statement. n Grand Rapids Engineering consultant Foresight Management has acquired a long-standing pioneer in the realm of sustainable business practices. Foresight, which specializes in the area of energy management, closed on its acquisition of Sustainable Research Group, which was founded by Bill Stough, the inaugural inductee of the Michigan Sustainable Business Hall of Fame. n Grand Rapids-based office technology solutions provider Applied Imaging has grown its presence in Florida through a recent acquisition. Applied Imaging — which offers service s including copier and printer sales, document management, managed I.T. services and document shredding — recently acquired Upstream Office Solutions, which is headquartered in Tampa Bay. The acquisition gives Applied Imaging a total of 14 offices spread throughout Michigan, Ohio and Florida. Terms of the deal, which was finalized in late August, were undisclosed.

FINANCE

n Comerica Bank contributed $112,000 to Grand Rapids Opportunities for Women (GROW) to assist entrepreneurs and small businesses. The contribution supports GROW’s work to provide capital, financial resources and technical assistance to small businesses as they recover and reopen amid the COVID19 pandemic. GROW and Comerica since June also have partnered to provide technical services to small business owners through Business $ense Boot Camp events.

HIGHER ED

n Davenport University extended eligibility for the Launch Scholarship that was created in March for people unemployed, laid off or furloughed because of COVID-19. The scholarship offers up to $8,000 per year for 30 credit hours for up to four years to earn a graduate degree, finish a bachelor’s degree or take professional development classes. Davenport accepts scholarship applications until Jan. 11, 2021.

MANUFACTURING

n Grand Haven-based UV Angel added manufacturing capacity for the UV Angel Clean Air product line that neutralizes airborne pathogens through an agreement with Corning, N.Y.-based Corning Inc. Initially designed to address health care associated infections, the technology has been adapted for settings such as retail, restaurants, commercial real estate, schools, hotels, and other industries. n Office furniture manufacturer Steelcase Inc. continues to face headwinds related to the COVID-19 pandemic, as customers are slow to return to normal order patterns given the disruption the public health crisis has caused to traditional workspaces. The company reported a $577 million backlog of customer orders, 8 percent lower than this time a year ago. Orders declined an average of 38 percent during the first three weeks of September compared to the prior year, including by 41 percent in the Americas. Given that tough operating environment, Steelcase’s quarterly revenues fell 18 percent to $818.8 million, compared to $998 million a year ago.

REAL ESTATE & DEVELOPMENT n The owner of two industrial properties in West Michigan has launched a new joint venture with a boutique Saudi investment firm to take ownership of the commercial real estate. In the deal, Rosemont, Ill.-based Brennan Investment Group established a joint venture equity partnership with Saudi Arabiabased investment firm Arbah Capital to acquire 557,000 square feet of light industrial and flex space in Michigan, Minnesota, Illinois and Iowa. The five industrial properties include 5460 Executive Parkway in Cascade Charter Township, which is occupied by Tesla Tool and Die, and 1865 Industrial Drive in Grand Haven, which is occupied by Lakeshore Fittings Inc. The portfolio includes a mix of tenants in the automotive, manufacturing and the telecommunications industries. n The Michigan Strategic Fund recently approved a 10-year Renaissance Zone tax abatement for Gerber Products Co.’s $36 million expansion at its Fremont facility. The investment will support new product lines to advance production of Gerber melts, which are freeze-dried snacks made with yogurt and fruit. The snacks are designed to melt in a baby’s mouth, and are one of the fastest growing segments in the company’s snack portfolio with 15 percent growth year to date. The Renaissance Zone is expected to save the company up to $6.5 million in taxes over the 10-year period. n A federal grant will pay for an analysis on how groups that support entrepreneurs and startup companies in West Michigan can adjust for when the economy emerges from the COVID-19 pandemic. Grand Valley State University’s Innovation Hub in Muskegon plans to match the $68,250 from the U.S. Economic Development Administration with $17,000 to fund a study that will look at existing entrepreneurial support along the Lake Michigan shoreline and identify service gaps. The initiative aims to alter support for entrepreneurs as they have had to adjust their own business plans amid the economic fallout from the COVID-19 pandemic.

HEALTH CARE

n Ascension Borgess named Rob Mach administrator at Ascension Borgess Allegan Hospital. He joins Allegan Hospital on Oct. 12 after serving four years as CEO of Select Specialty Hospital - Battle Creek, a 25-bed long-term acute care facility.

LAW

n Grand Rapids law firm Warner Norcross + Judd LLP hired Paul Boehms as executive director. Boehms has two decades of operations, finance and leadership experience and will provide strategic direction and oversight of the law firm’s day-to-day operations. The firm has more than 230 attorneys practicing in 14 industry groups and 27 specialized practice areas at eight offices across Michigan. Boehms most recently served as business director for two business units at Clark Hill. Visit www.mibiz.com

ADVE RTIS E ME N T

Health Care Coverage Solutions for Your Business COVID-19 has hit the world hard, including the business landscape. Many companies are struggling under the strain the pandemic has put on our economy, from decreased spending to wide-scale shutdowns. In the face of this economic uncertainty, businesses of all sizes and their employees are facing tough choices when it comes to spending. To help offset some of that struggle, Blue Cross Blue Shield of Michigan and Blue Care Network are looking for ways to support their customers and members with choices that deliver great value and exceptional coverage at a stable price point. That’s why this year, Blue Care Network is bringing two health care plans to market: Blue Elect Plus SM point of service plan and BCN HMO Fixed CostSM. These new plans build on Blue Cross and Blue Care Network’s history of delivering innovative, cost-effective options for businesses. Get To Know Blue Elect Plus The improved point of service plan from Blue Care Network combines affordability

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with flexibility. Small and large group members can enjoy the ease of managed care benefits typically found in an HMO plan with the freedom to choose a provider or specialist without a referral, like in a PPO. Some highlights of this plan include: • Lower costs when employees choose to see an in-network provider • Comprehensive benefits both in and out of network • In-network essential health benefits • Prescription drug coverage is included for small groups and available for large groups • Access to the largest HMO network of doctors, hospitals and specialists in Michigan • Access to in-network providers outside of Michigan through the BlueCard® program

Here are some of the plan highlights: • No deductible or coinsurance for medical and pharmacy services • Members pay a copay for certain services instead of a deductible or coinsurance • Copay amounts vary based on the type of service and place of service • Prescription drug coverage included • Preventive care covered at 100% Today’s world is hard to predict, but Blue Cross and Blue Care Network believe it’s more important than ever to offer solutions Michigan businesses need to keep their companies running and their employees covered. To learn more about plans from Blue Cross Blue Shield of Michigan and Blue Care Network, visit bcbsm.com/employers.

A Great Solution for Small Businesses The new BCN HMO Fixed Cost plan provides members cost predictability and easy-to use benefits with a simple copayonly structure.

MiBiz / SEPTEMBER 28, 2020

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