Motown Momentum
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20091207-NEWS--0001-NAT-CCI-CD_-- 12/4/2009 5:52 PM Page 1 ® www.crainsdetroit.com Vol. 25, No. 47 DECEMBER 7 – 13, 2009 $2 a copy; $59 a year ©Entire contents copyright 2009 by Crain Communications Inc. All rights reserved Page 3 Palace Sports slims down, sheds teams to stay healthy Highway funds in jeopardy A CEO driving a beater? See spend money if it could draw down why some are trading down State may not be able to match federal money all available federal revenue, and a reduced highway spending strate- BY AMY LANE the state is in danger of losing year that starts Oct. 1, they’re hop- gy that includes Inside CAPITOL CORRESPONDENT nearly $2.1 billion in federal fund- ing a legislative road funding solu- spending nearly ing through fiscal 2014 because tion will materialize. $2.4 billion less PROJECT LIST Defense work stays steady, LANSING – Next year, Michi- Michigan won’t be able to match “I will tell you I hope it does. Be- through fiscal Over a barrel: gan may have to walk away from all the funds it is eligible to re- cause I’ve been talking about (this) 2014. State shortfalls Page 6 $475 million in federal highway ceive. for three years,” said MDOT Direc- The reduced could delay this funds because it lacks $84 million It’s a scenario that state trans- tor Kirk Steudle. “I’ve been saying strategy would work, Page 32 Bill Ludwig on the future for a state match. portation officials and others have this day is coming, and it’s here.” delay more than And the losses pile up from warned of for years. And now, MDOT’s new draft of a five-year 375 miles of pavement improve- of Campbell-Ewald, Page 29 there. with this year’s $1.4 billion in state transportation plan, currently out ments equating to more than 100 Projections from the Michigan highway spending estimated to for public comment, lays out two Health Care Extra Department of Transportation show drop to $593 million in the fiscal scenarios: how the state would See Highway funds, Page 32 Medicare payment rules being Recticel, HHI reworked Motown momentum for hospice, revamp deals Page 19 Museum hopes to build on anniversary excitement BY SHERRI BEGIN WELCH in bankruptcy This Just In CRAIN’S DETROIT BUSINESS After hosting a star-studded, Some customers Tax credit in works for glitzy gala in November in cele- bration of Motown Records’ 50th Broderick, other projects anniversary, the Motown Historical call move attacks A tax credit for historic re- Museum is getting ready to do it all habilitation pending in the over again next fall. BY RYAN BEENE Legislature means the $55 The museum, which celebrates CRAIN’S DETROIT BUSINESS its 25th anniversary in 2010, is million redevelopment of the Two local auto suppliers have making plans not only for another David Broderick Tower in used the bankruptcy code to re- grand celebration but for its next Detroit could get started in vamp at least 80 percent of their 25 years. three months, said Fred Beal, customer contracts, bucking the It hopes one day, with support president of Motown Construc- norm of most automotive bank- from other anchor employers and tion Partners L.P., the legal en- ruptcies seen this year. businesses in its West Grand tity developing the project. Both companies, Recticel North Boulevard neighborhood, to get Beal is also president of De- America Inc. and HHI-FormTech the area renamed “the Motown troit-based J.C. Beal Construc- L.L.C., say the contracts were un- District.” tion Inc. NATHAN SKID/CRAIN’S DETROIT BUSINESS profitable and undermined the via- “We strongly believe it’s a CEO Audley “Kano” Smith Jr. calls the Motown Historical Museum on West The tax credit, versions of bility of their businesses. The strong tourist attraction not only Grand Boulevard in Detroit a strong tourist attraction for Southeast Michigan. which have been approved bankruptcy code provides an op- for Detroit but for Southeast by the state House and Sen- portunity for bankrupt businesses Michigan,” said Audley “Kano” they wouldn’t go otherwise.” around the Hitsville house,” ate, aids the 127-unit apart- to rewrite contracts to reflect the Smith Jr., 61, who became CEO of The arts as a part of a larger Smith said. ment development and 20,000 current market — not the market the museum in April. economic development strategy The museum has five parcels of square feet of office and re- that was projected two, three or “We could certainly be a cata- that includes for-profit business- land on its campus, consisting of tail space planned on Wood- four years ago. lyst for economic development in es, street improvements and Hitsville and Motown Studio A, ward Avenue near Grand But some customers have resist- the area.” housing works best, an attached building Circus Park. ed, saying Recticel and HHI- The museum wouldn’t be the she said. housing the museum The Senate last week FormTech essentially are holding first arts organization to consider A great example of WEB EXTRA galleries and gift shop, passed Bill 944, sponsored by guns to their heads, forcing them economic development. Pewabic that is Midtown, with Read more on how two administrative Jason Allen, R-Traverse City, to give the companies better terms Pottery and the Heidelberg Project its cultural anchor in- the classic Motown buildings and an emp- which would allow the Brod- in order to keep their own assem- on Detroit’s east side are both stitutions, apart- Records Corp. ty lot to the east of the erick Tower and two other bly lines, and those of their cus- spurring development in their ments, restaurants, sound became world museum. projects to use Michigan tomers, running on time. neighborhoods. the Inn on Ferry Street famous, plus the “We’ve talked about Business Tax historic reha- musical memories of “The arts definitely are a tool of bilitation tax credits. and service industries, Bill Clinton, Ted building new construc- The other projects are: economic development,” said Lyon said. Nugent, Patti tion on the other Starting over ■ Maud Lyon, executive director of “All of those things parcels” to showcase The $145 million A. Alfred LaBelle, Wynonna FormTech Industries L.L.C., a Royal the Cultural Alliance of Southeastern work together” to de- more of the museum’s Judd, Anita Baker Oak-based supplier of hot- and See This Just In, Page 2 Michigan. velop a neighborhood, and Leonard Slatkin, collection of more than cold-formed metal components, “They bring people to areas she said. www.crains 300,000 items, Smith filed for Chapter 11 bankruptcy The Motown Histor- detroit.com/extra said. earlier this fall with a new owner ical Museum had been “We’ve begun the lined up, Hephaestus Holdings Inc., looking to expand around conversations about picking the which is owned by New York- Hitsville USA, the birthplace of expansion plan back up, (but) based hedge fund KPS Capital Part- Motown Records, before the econ- much will depend on the econo- ners L.P. omy’s collapse, Smith said. my.” Hephaestus Holdings, or HHI, is “One day, in the not too distant Even during Motown Records adding FormTech to its portfolio of future, what we’d like to do is founder Berry Gordy Jr.’s at- automotive and industrial forged- NEWSPAPER build at least 29,000 square feet of additional space that wraps See Motown, Page 32 See Bankruptcy, Page 31 20091207-NEWS--0002-NAT-CCI-CD_-- 12/4/2009 5:53 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS December 7, 2009 tive Components using the third, goal is to complete the liquida- and technology practice. She some leadership coaching and THIS JUST IN an 80,000-square-foot building. tion process as quickly as possi- leads client development efforts consulting work after he retires. The buyer is a doctor who ble. for both practices at the firm’s Guenzel also serves on the ■ From Page 1 bought the buildings as an invest- — Chad Halcom Detroit office. boards of a number of nonprofit ment, the sources said. Ann Kenyon, co-leader of the De- organizations. Taubman Center for Design Education, Southfield-based Signature Asso- troit health practice, also was — Ryan Beene formerly called the Argonaut ciates was the broker on both sides Mount Clemens Medical Center promoted. She has served as a Building. The 11-story building, of the deal, managing director opens facility in Shelby Twp. project architect and project once the home of now-General Mo- Mark Woods said, but he could not manager for health care clients Tax lawyer joins Miller Canfield tor Co.’s design center, was redevel- confirm the sale price or buyer. Mount Clemens Regional Medical such as Henry Ford Health System Gregory Nowak, partner and for- oped as an expansion of the College — Daniel Duggan Center has opened a 60,000-square- and William Beaumont Hospitals. mer leader of the state and local for Creative Studies. The building foot medical center in northern — Daniel Duggan tax consulting practice at Pricewa- was completed in September. Macomb County. terhouseCoopers L.L.P., moved last Judge OKs liquidation plan The Shelby Creek Medical Center, Rehabilitation of the Federal Washtenaw’s Guenzel to retire week to Detroit-based Miller, Can- Building in downtown Grand for Noble International at 8180 26 Mile Road in Shelby field, Paddock and Stone P.L.C. as Rapids, to house Ferris State Uni- Township, includes offices for Washtenaw County Administra- senior counsel in the law firm’s versity’s Kendall College of Art and A federal judge last week ap- family practice physicians, or- tor Bob Guenzel plans to retire this business litigation and trial Design.