Alleged Scams Hit Foreign House Buyers Records: Flipping Distressed Detroit Homes a Lure

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Prime-time golf duel only latest sports marketing splash for Quicken Loans, PAGE 3 FEBRUARY 22-28, 2016 Alleged scams hit foreign house buyers Records: Flipping distressed Detroit homes a lure

By Robert Snell hoods and compounded blight [email protected] problems, officials said. Overseas investors have cooled Both alleged scams have drawn on buying distressed homes in De- the attention of federal investiga- troit after a pair of alleged scams tors. Crain’s has learned that the FBI targeting thousands of properties. is investigating Dearborn-based The alleged scams involved Metro Property Group LLC, the largest homes purchased for as little as single buyer of distressed homes at $500, in many cases through Wayne the county’s tax auctions in recent County tax auctions, according to years, according to a search war- property and federal court records. rant unsealed in federal court in How one of Michigan’s banking leaders made a big deal, The properties then were flipped, late December. chased a big dream … and raced into bankruptcy in one case for as much as $15,000, “Things have cooled,” said Darin to investors duped into buying McLeskey, managing partner of Breaking news, Jan. 12, 2016: Attorneys for Jack Krasula, prominent businessman and WJR radio show what they believed were bank-fore- Detroit-based Denovo Real Estate, host, ask an Oakland Circuit Court judge to find legendary banker Jerry Campbell in contempt of court over closed homes for more than fair who is helping foreign buyers sal- a $4.8 million debt, claiming he has been hiding assets. That same day, Campbell, a former longtime friend market value, court records say. vage investments in Detroit homes. and business partner of Krasula’s — in a very successful Florida bank and in a stunningly disastrous horse The alleged scams left scores of “A lot of buyers are going down in racing track in Huron Township — files for bankruptcy protection in Florida. abandoned homes across Detroit, flames, asking for help.” devastated struggling neighbor- There is data suggesting weak- By Tom Henderson One of Campbell’s students ening interest among foreign in- [email protected] Editor’s note: This story was was head of the personnel depart- vestors. It was 1969, at the beginning of compiled from interviews, court ment at the Bank of the Common- Cash purchases, seen as an indi- a storied career in banking, and records and published reports. wealth and offered him a job. For cation that buyers are acquiring Jerry Campbell was something of Jerry Campbell didn’t return calls two years, Campbell worked full property as an investment, fell to 45 a boy wonder. He and his partners to HomeBancorp and his time at the university and at the percent in the second quarter of had just bought the Owosso Sav- cellphone. Lisa Campbell didn’t bank before deciding to focus on 2015 in metro Detroit, down from a ings Bank. It was a tiny community respond to email requests. Jack finance. high of 74 percent in the fourth bank with just $40 million in as- Krasula didn’t return phone calls Campbell expanded Owosso quarter of 2011, according to the sets, but, nonetheless, he was a asking for comment. Savings Bank into a bank-holding real estate database firm Zillow. bank president at 29. company with $1.2 billion in as- The percentage of overseas in- Campbell, who had grown up up in a litigious dispute with his sets before selling it to Grand vestors searching online for Detroit on a farm near Allegan in West biggest partner, Jack Krasula. Rapids-based Old Kent Bank in properties fell to 5.7 percent of all Michigan, had had an unlikely ca- Campbell got a bachelor’s de- 1983. In 1986, after raising $3 mil- searches in January from 10.1 per- reer path by then. There had been gree in liberal arts in 1962 from lion from investors, he started all cent in February 2014, according to nothing to hint at a bank presi- Central Michigan University and over again, launching a small property website Trulia. The rate is dency to come. MBAs from Wayne State University community bank in Owosso the lowest in four years. Campbell’s career path ulti- and the University of Michigan. He called Republic Bancorp Inc. that Map of trouble The decline comes amid a rise in mately led him to run three spent the first two years of his ca- opened on April Fool’s Day. Online: An interactive map of the property scams targeting overseas banks, try his hand at horse reer at MichCon Gas Co. and then Investors bought into its model homes involved in a federal case alleging investors, particularly those from breeding and racing — including taught business classes for five of quickly opening mortgage of- that out-of-town investors were taken Europe, Wayne County Register of the construction of the now-razed years at WSU, in investments, fices in a wide footprint and ex- in by a real estate scam. Deeds Bernard Youngblood said. Pinnacle racetrack — and wind banking and finance. SEE CAMPBELL, PAGE 18 crainsdetroit.com/scams He created the nation’s first SEE SCAM, PAGE 20 FILE PHOTOS Jerry Campbell (above) built three banks © Entire contents copyright 2016 from scratch or nearly so, but had a lot of by Crain Communications Inc. All rights reserved. expensive trouble in his horse-racing crainsdetroit.com Vol. 32 No 8 $2 a copy. $59 a year. ventures, including Pinnacle Race Course in Wayne County. NEWSPAPER 20160222-NEWS--0002-NAT-CCI-CD_-- 2/19/2016 3:39 PM Page 1

2 CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016

Hart near popular tourist stop Silver nary, recreation and tourist destina- MICHIGAN Lake Sand Dunes. tion to include restaurants, a farm- INSIDE ers market, ice cream shop, micro- THIS ISSUE brewery, skating rink and a bakery. BANKRUPTCIES ...... 17 MICH-CELLANEOUS CALENDAR ...... 16 Daniel Ross, owner and developer CLASSIFIED ADS ...... 17 Ⅲ Old Irish Mill Six years after it was last in use, of in Brooklyn, told the DEALS & DETAILS ...... 14 the former Steelcase pyramid near Jackson Citizen Patriot that he OPINION ...... 6 BRIEFS Grand Rapids is again busy as its hopes to have the project complete OTHER VOICES ...... 6 new owner, Switch, begins a $400 in 2017. The development could PEOPLE ...... 16 House approves $30 million HopCat,Short’s to sell million build-out of its Supernap cost up to $8 million. RUMBLINGS ...... 22 for Flint water crisis aid statewide; Big Hart to brew Michigan Data Center. More than 70 Ⅲ A plan is moving forward to WEEK ON THE WEB ...... 22 workers from 25 West Michigan tear down the Park Place Hotel’s State and federal officials acted to Grand Rapids-based bar and companies are working at the for- domed banquet hall and pool send more help to Flint to deal with restaurant operator BarFly Ventures mer Steelcase Corporate Develop- building in downtown Traverse City COMPANY INDEX: its lead-contamination crisis, as the LLC has partnered with contract ment Center in Gaines Township, a as part of a broader development SEE PAGE 21 Michigan House approved $30 mil- brewery Brew Detroit LLC to market Switch spokesman told MLive.com. project. The approval last week by lion last week to help pay residents’ and distribute HopCat-branded He said the initial construction the Traverse City Historic Districts ignated a national historic land- water bills and Gov. Rick Snyder an- beer. According to MiBiz, Brew De- budget remains $400 million, but Commission removed a key hurdle to mark by the U.S. Department of the nounced a $2 million grant to help troit will produce HopCat’s Beer likely will exceed $1 billion in an ef- the proposal that includes plans to Interior, AP reported. The Badger is the city replace some of its pipes, Right Meow American India Pale fort to open on schedule this year. build a new convention center, said now a car and passenger ferry that The Associated Press reported. Ale for statewide distribution Ⅲ Kalamazooo-based medical a Traverse City Record-Eagle report. travels between Ludington and The federal government is giving through Kalamazoo-based Imperial technology company Stryker Corp. is Ⅲ An $11.2 million effort to elimi- Manitowoc, Wis. $500,000 to two health centers that Beverage to retailers and bars and buying Physio-Control International nate blighted homes in Saginaw Ⅲ The Ontario Hockey League sus- are treating and testing Flint resi- restaurants. Inc. of Redmond, Wash., for $1.28 bil- ended in December after two years pended Flint Firebirds owner Rolf dents exposed to the lead-tainted In more brewery news, Bellaire- lion, AP reported. Physio-Control of work, MLive.com reported. Offi- Nilsen after the major junior team, water. That aid comes as a new con- based Short’s Brewing will offer three develops, makes and markets moni- cials said the federally funded proj- formerly the Plymouth Whalers, gressional report by the nonparti- mainstay beers, a rotating seasonal tors/defibrillators and cardiopul- ect was a success, resulting in the fired its coaching staff for the second san Congressional Research Service selection and two ciders when it ex- monary resuscitation-assist devices. demolition of 862 vacant homes in time this season, AP reported. Head said the Environmental Protection pands out of state by beginning bot- Ⅲ A 70-year-old Port Huron busi- Saginaw and along the city borders. coach and General Manager John Agency waited too long to take en- tle distribution in Illinois by March, ness is closing next month due to a Ⅲ The Ludington-based SS Bad- Gruden and assistant coach Dave forcement action after learning of MLive.com reported. Short’s, which pension dispute with the Teamsters ger, a passenger ship that hauled Karpa were fired last week; they were elevated lead levels in Flint’s tap had pitched the “Michigan Only, Central States Pension Fund, said the rail cars across Lake Michigan from dismissed in November but reinstat- water. The EPA said it urged a quick- Michigan Forever” slogan, said in a Port Huron Times Herald. Port Huron the 1950s until 1990, has been des- ed after players protested. Ⅲ er state and local response. social media posting that it was ex- Building Supply is being sued in fed- Meanwhile, 10 regional financial tending its reach because of com- eral court in Illinois over its alleged Correction institutions rallied to give nearly petition and a desire not to sell out failure to contribute enough money $600,000 to the Flint Child Health & to investors or another brewery. to the union. A company official Ⅲ The story “State seeks to eliminate tax credit for auto insurers” on Development Fund, and the Meridian Meanwhile, West Michigan’s said the business has 14 employees. Page 3 of the Feb. 8 issue should have said that an insurance tax credit Winter Blast festival in Detroit an- Oceana County is getting its first Ⅲ Plans are moving forward to being claimed by auto insurers in Michigan equates to a 20 percent re- nounced it raised more than microbrewery. Big Hart Brewing Co. turn a former small auto parts plant duction in insurance tax revenue. $50,000 for the fund. was set to open last weekend in in southern Michigan into a culi-

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CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016 3 United Way trims focus for funding Agency to cut grantees list, target lead program areas

By Sherri Welch [email protected] An undetermined number of United Way for Southeastern Michigan grantees will lose Golf exhibition the newest their funding in the coming year, as the De- troit-based agency moves more resources be- hind three lead program areas. Those areas — child hunger, early childhood education and readiness, and club in Quicken’s sports college/career readiness — have the best chance for success and provide an opportunity for United Way to simplify for supporters the marketing bag messaging around its work, said President and CEO Herman Gray, M.D. Gray joined United Way last fall after holding leadership positions at By Bill Shea day before U.S. Open week begins at Oakmont Country Club in Detroit Medical Center and [email protected] suburban Pittsburgh. The match in Detroit would air live on DMC Children’s Hospital of Herman Gray: A push to have champion pro golfers Rory McIlroy and the Golf Channel and CBS. Michigan. United Way to focus Rickie Fowler square off under the lights at Detroit Golf Club Celebrities Justin Timberlake and Mark Wahlberg are ex- United Way notified its on basic needs. later this year is the latest high-profile sports marketing ini- pected to be paired with McIlroy and Fowler for the exhibi- Wayne, Oakland and Ma- tiative from Quicken Loans Inc. tion, Detroit ABC affiliate WXYZ-Channel 7 comb county grantees of the impending The Detroit-based mortgage lender led by Above: Rory McIlroy (front) reported last week. changes over the past few weeks and its plan real estate magnate and sports team owner walks on the first fairway with Quicken, which is the primary sponsor to continue to focus more broadly on basic Dan Gilbert has devoted up to 30 percent of its Rickie Fowler at a tournament of 2015 Players Championship winner needs, financial stability and educational enormous annual marketing spending to last month.They may soon Fowler, isn’t saying much about the exhi- preparedness. sports since 2011. square off under the lights in a bition other than it’s still in talks to create It’s now identifying which of roughly 50-60 PGA Quicken has branding deals with the night match at Detroit Golf the event. programs will lose funding and what part of Tour , motorsports, several pro sports teams, Club, which Quicken Loans is “We’re always looking for new ways to the revenue freed up by those cuts will shift to college sports, and earlier this month aired its working to make happen. do exciting things,” Farner said. “And if it’s its three lead program areas. first Super Bowl commercial. in Detroit, that’s even better. We’re still It plans to begin notifying affected non- “We’re always looking for the interesting working through that to see if something profits through one-on-one conversations angle or different way we could approach it,” Quicken Loans might happen.” toward the end of March, Gray said. President and CMO Jay Farner said in an interview with Sports-based marketing accounts for between 15 percent In making funding decisions, there’s no Crain’s. “We’re wide open to stuff.” and 30 percent of Quicken’s annual marketing spending dollar target or percentage of existing pro- The proposed golf match, first reported by The Associated since 2011, he said. The company’s internal metrics show a grams set to be cut at this time, he said. Gray Press, is tentatively scheduled to be played June 7, the Tues- SEE QUICKEN, PAGE 17 noted that he and senior leaders at United Way are developing criteria to guide funding PHOTO BY MARTIN DOKOUPIL/ASSOCIATED PRESS SEE UNITED WAY, PAGE 21 Cyber Range to open doors to biz wanting to learn to stop hackers

By Chad Halcom the state Department of Technology, fensive responses, and assist in said Jennifer Tisdale, cyber pro- [email protected] Management and Budget — has oper- software testing. grams manager for defense and au- Risky The Michigan Cyber Range, a test ated mainly as a tool to educate and Construction on the Sterling tomotive offices at MEDC. business program to hone security software certify cybersecurity professionals Heights hub of the Cyber Range “This is going to be a process to and train new specialists in cy- since it launched in 2012, its coordi- began about nine months ago and help us perfect the environment at Insurance firms berdefense, opens its doors to the nators said. is on pace to wrap up this week or first and get the companies using spread a safety local business community next But the Velocity Collaboration next, in time for a grand opening at the tools that would give them the net from online month in Sterling Heights. Center in Sterling Heights will Velocity on March 18. most accurate visualization of hackers. The range — a collaboration house the first location that’s ac- “As a program, we’ve run some what’s going on in their network Also, tips on how JenniferTisdale: among the Michigan Economic Devel- cessible for general business use. It exercises for professional develop- during testing.” to lower cyber Businesses set to opment Corp., several local and fed- will offer companies training ment, but so far a business has not Tisdale said 15 area businesses risk, start using Cyber eral government agencies, universi- space, host live exercises that can yet really used it. There are some and government representatives Pages 9-11 Range soon. ties, the Michigan National Guard and simulate data hacks and test de- that are scheduled now to start,” SEE CYBER, PAGE 21

MUST READS OF THE WEEK Entrepreneurial climate eases Van Conway out Dentists hungry for CT scans State’s environment is still improving, but gains Co-founder of Conway MacKenzie sues firm Industry pushes to eliminate Certificate of Need are flattening out, Page 8 after ouster, Page 4 requirement for class of imaging devices, Page 7 20160222-NEWS--0004-NAT-CCI-CD_-- 2/19/2016 4:44 PM Page 1

4 CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016 Conway MacKenzie co-founder sues after being ousted as CEO

By Dustin Walsh [email protected] “I don’t need the money, so Van Conway, a well-known Southeast Michigan business advis- I’m going to stack the deck er, is suing the firm he co-founded here. They’ve inspired the after its board of directors removed Van Conway him from his position as chairman, wrong guy.” CEO and president. The suit, filed in Oakland County Circuit Court on Feb. 17, alleges the of his agreement with the firm, but 80 percent cut in compensation. board of the Birmingham-based did not provide details. The board later voted to remove firm, Conway MacKenzie Inc., re- “We’re hopeful he acknowledges Conway from its board of directors, moved Conway as CEO while he his responsibilities, but it’s Ameri- which the suit claims wasn’t com- was on medical leave and cut his ca,” MacKenzie said. municated to Conway or the firm’s compensation by roughly 80 per- Conway recently leased the non-board shareholders until Feb. cent in an attempt to transition fourth floor at 401 S. Old Woodward 8. Conway responded with an email control to co-founder Don Ave. in Birmingham — one floor to the company’s shareholders con- MacKenzie. above Conway Mackenzie — for his cerning the actions, which MacKen- The suit is also against certain new company. He declined to dis- zie classified as a resignation, the board members of the firm, includ- cuss whether others from his for- suit alleges. ing MacKenzie, Joseph Geraghty, mer firm will join him in his new MacKenzie said the board did Gregory Charleston, John Young venture, but said a few “heavy hit- work with Conway to resolve the Career Opportunity and Jeffrey Zap- ters” will be hired shortly. matter privately. pone. The rift between Van Conway and “This is most unfortunate, but it’s “The claims Conway MacKenzie began in Octo- a reality that disagreements occur he’s alleged are ber when Conway had double knee- in business,” MacKenzie said. “This Business Coach completely with- replacement surgery, which resulted is complicated and (the decision) Successful Marketing Strategist looking to form a out merit,” in cardiac complications, the lawsuit didn’t happen without serious partnership with a small business coach/consultant MacKenzie said. says. Three days after Conway’s sur- thought, deliberation and proper “The firm will gery, while he remained in the hospi- conduct.” I’ve developed a process where I can find more than $10,000 vigorously de- tal, the board of directors called an Conway and MacKenzie co- for ANY small business owner… and do so in less than 45 minutes. fense itself from Don MacKenzie: unscheduled meeting to discuss a founded the firm in 1987, which fo- I've been offering this service to small business owners and it's this frivolous lit- Conway’s claims permanent change in the company’s cuses on turnaround advisory and “without merit.” resulting in more business than I can possibly handle. igation, and a management structure, the suit says. financial consulting, and expanded counterclaim will likely be filed.” Citing the meeting minutes, the the firm to more than 100 profes- If you’re an experienced business coach, In the meantime, Conway said he suit states MacKenzie was increas- sionals in Atlanta; Houston; New or you’re interested in becoming one and is starting his own firm, Conway and ingly frustrated by the way the firm York; Chicago; Dallas; Birmingham, you have a solid business background, I Partners LLC, to compete against his was currently managed and he Ala.; and Dayton, Ohio. would like to speak with you. former company, but potential legal “would like to see the frustration re- The firm gained local attention hurdles remain as Conway Macken- moved.” The board then voted for during the Great Recession for Willing to train the “Right Candidate” if zie claims his ability to work in the MacKenzie to serve as interim CEO working on the turnaround of sev- you have what it takes. field is limited by a contract agree- in Conway’s absence, according to eral automotive companies and, ment, the suit states. the filing. more recently, Detroit’s Chapter 9 For more information “There’s always a change of The suit alleges the move as a bankruptcy. email [email protected] guard, and we definitely had dead material breach of the firm’s share- “This firm has great core values wood. Who is dead wood is up for holder agreement, which calls for and will withstand this, but it is un-

or call 248-231-5205 interpretation,” Conway said in an Conway and Mackenzie to remain fortunate that we’re confronted interview with Crain’s. “We didn’t on the board as founding share- with this inconvenience,” MacKen- come to terms after they removed holders. zie said. “The long history of this me because they never intended to The suit also alleges Conway firm, and the history between Van settle and now they are nervous. I’m MacKenzie did not pay Conway a and I, transcends all of this.” not going to breach any obligations. bonus from its budgeted $14 mil- As of Friday morning, Conway But for 42 years I’ve done one thing. lion in bonus and equity distribu- MacKenzie or its shareholders had I don’t have hobbies; I don’t need tions for the year. Conway claims in yet to respond to Conway’s legal the money, so I’m going to stack the the suit he is owed a bonus ranging complaint or file a countersuit. Intellectual Property | Litigation | Technology deck here. They’ve inspired the from $400,000 to $700,000. The suit “The real question is whether I can wrong guy.” also alleges the firm cut his salary by do it again, to build a successful firm. MacKenzie said he’s hopeful 60 percent as well, which, coupled The beauty of the future is that we’re Conway will adhere to the conduct with a bonus nonpayment, totals an going to find out,” Conway said. Ⅲ Transactional experience on par Know a 20-something? Award nominations due soon with the major Silicon Valley law firms. It’s that time of year — time to Nominees must be 29 or younger nominate a 20-something profes- before June 1. Nominations are due – BRAD KANCIGOR,KANCIGOR, ASSOCIATEASSOCIATE GC sional who is making his or her Feb. 29. Synopsys,Synopsys, IncInc mark in metro Detroit. To fill out the form, visit This program recognizes the hard crainsdetroit.com/nominate. Read work of local rising stars while also about last year’s 20 in their 20s class YOUNG BASILE. giving them the opportunity to fur- at crainsdetroit.com/20. Strategic advisors to the world’s ther propel their careers. Employers, Questions? Contact Crain’s Assis- take note: This is your chance to originality as entrepreneurs, or tant Managing Editor Kristin Bull at most innovative companies. boast about internal talent. those who have made an impact in [email protected] or (313) 446-1608, Candidates for Crain’s 20 in their civic or community leadership or Special Projects Coordinator ANN ARBOR TROY SILICON VALLEY CHICAGO 20s include up-and-comers making roles. Keenan Covington at waves within a company, men and Winners will be profiled in [email protected] or (313) www.youngbasile.com women who have shown success or Crain’s. 446-0417. Ⅲ DBpageAD_DBpageAD.qxd 12/29/2015 11:01 AM Page 1 20160222-NEWS--0006-NAT-CCI-CD_-- 2/19/2016 4:11 PM Page 1

6 CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016 CRAIN’S DETROIT BUSINESS We must not neglect infrastructure repairs

s America observes National or a Big Four initiative, should cre- A Engineers Week, Feb. 21-27, ate a similar action group to assess there is no better time to focus on our infrastructure. Now is the per- OPINION the thin, brown horizontal line in fect time because SEMCOG and Southeast Michigan that demarks the Metropolitan Affairs Coalition our critical infrastructure at street have been working on a new re- level and beneath. port to develop an economic strat- For years, we have been warned OTHER VOICES egy for the region. Homebuyers’losses by the American Society of Civil En- The draft’s strategy stresses that gineers and others that our existing Joe Neussendorfer our region “maximize infrastructure infrastructure is crumbling above Neussendorfer is a member of the investments, where appropriate, and below us. Recent tragic events American Society of Civil Engineers, the make efficient use of resources for here in Michigan signal that our Engineering Society of Detroit and the better coordinating different types teach costly lesson state’s infrastructure — roads, Detroit Economic Club. of infrastructure projects. Engage in bridges, drinking water systems, collaborative efforts and seek inno- s with most investments, a healthy dose of the “buyer beware” wastewater/sewerage systems, gas and Warren Evans, when asked vation in financing, building, oper- mantra is always in order. Example: Exuberance over Detroit’s and other utility distribution sys- what was one of their primary ating and maintaining infrastruc- A “bargain” residential real estate led to some foreign investors tems — is in need of serious atten- concerns moving forward, re- ture systems. …” losing money. tion. We are reaping the results of a sponded, “the state of our infra- I recently overheard Dan Gilbert, As Robert Snell’s exclusive report on Page 1 shows, the buyers alleged- failure to act. structure.” in speaking about all of the new ly were duped into investing in house-flipping schemes involving thou- Now that our state’s infrastruc- Gov. Rick Snyder, in his recent construction coming to Detroit over sands of Detroit residential properties. The FBI is investigating one local ture is in the spotlight, we need to State of the State address, called the next few years, say that Detroit’s firm and has indicted 16 people in a second case. seize the opportunity to do some- for the formation of a commission skyline will be “going vertical,” and It undoubtedly sounded, to some property buyers, like a surefire in- thing about it. At a recent Detroit to make recommendations to we will be seeing all sorts of con- vestment. Homes purchased, in many cases, through the Wayne County Economic Club “Big Four” event at solve our state’s infrastructure struction cranes. I say we must also tax auctions for as little as $500, were allegedly flipped to investors for Cobo Center, Detroit Mayor Mike challenge. I submit that Southeast pay attention to the critical infra- $15,000 and positioned as bank-owned homes that could be resold for a Duggan and county executives Michigan, through the Southeast structure beneath Detroit and think profit. Pay $15,000 for a property, flip it for double the money or more, Mark Hackel, L. Brooks Patterson Michigan Council of Governments horizontal and underground. Ⅲ right? Wrong. The alleged scams ultimately left scores of abandoned homes across Detroit. One of the reasons for the wave of alleged scams was foreign in- LETTERS vestors buying properties site unseen. Another possible complicating factor: Batch transactions, many at the county level. Massive online auctions bundling many properties to- Remember lawmakers’role in housing crash gether are an efficient way to work through property backlogs. But it also can lead to skipped steps when it comes to buyer due diligence, proper- Editor: the job market?” (Feb. 8, Page 3) with ly verified appraisals, and other checks and balances built into the resi- Regarding Mary Kramer’s col- Send your letters: Crain’s Detroit great disappointment at what passes dential sales process — as we all learned in the national mortgage melt- umn (“‘The Big Short’ sheds light on Business will consider for for executive management in Ameri- down a few years ago. 2008 meltdown,” Feb. 8, Page 11): If publication all signed letters to the ca today. The haste to reduce work- Many foreign investors who lost money say they regret never visiting the movie only covers Wall Street editor that do not defame forces to bare-bones levels is very Detroit or failing to conduct more research. and the big banks, then the movie is individuals or organizations. Letters shortsighted and something time Just like most things in life, taking shortcuts usually ends with a bad re- telling only half the story. may be edited for length and clarity. will prove looked better on paper. sult. There is money to be made in Detroit’s residential and commercial If there was no political party and Email: [email protected] My experience has been that markets — and there are many case studies to be found to prove it. federal government involvement, most people, including the millen- there would have been no crash. nials who were predicted to be The legislation was the Commu- The subprime borrowers were eager adopters of this strategy, Program could fill home funding gaps nity Reinvestment Act, first passed just able to make the payments as loathe the impersonal automation by President Carter and then re- long as the prime interest rate was that’s become all too common. It Detroit does have residential bargains for buyers who want to occupy done by President Clinton in 1993. kept low. delivers a message that you’re not the home, not rent or flip it. The CRA of 1993 greatly strength- The parties forgot to warn the important enough to speak to in But the problem has been buyers who haven’t been able to secure ened the subprime mortgage and Federal Reserve about the problem person. The businesses that refuse mortgages that give them enough money to also spend fixing up the greatly increased the power of the of raising the prime interest rate to treat their clients as commodities home. federal government to push the and the massive number of sub- will come out on top. A program announced last week aims to help fill more of these fi- subprime with mortgage compa- prime mortgages, which existed at The article then makes the ap- nancing gaps. nies and banks. the end of 2006. ples-to-oranges comparison be- The new $40 million fund offers a second mortgage buyers can tap to The CRA threw out common The Federal Reserve started to tween services and manufacturing. help fix up neglected homes. The new initiative is the result of more than sense of requiring 20 percent and 10 raise interest rates in January 2007. In Robots cranking out parts and how a year of work by banks and Mayor Mike Duggan’s office. percent down and credit checks of response, subprime mortgages start- to plan our finances are not the The renewed bank interest is a positive sign along with market met- the potential borrowers. ed to default, which snowballed to same thing, folks! rics; with this new tool, the more than 500 mortgages that were ap- The movie should have shown the crash of September 2008. If we keep displacing people with proved in Detroit last year will grow. the passing of the legislation, and Neil Karl automation, there won’t be anyone then the actions of the Justice and Livonia earning wages to buy the products Treasury departments to strong- and services. Just because we can arm the mortgage companies and Don’t trade people for machines do something, doesn’t mean we the banks. should do it. The killer was tying the subprime Editor: James Aiello mortgage to the prime interest rate. I read the article “Will robots zap Grosse Pointe Woods

TALK ON THE WEB

Re: Republicans propose $770M Reader responses to stories and Re: Michigan would privatize Detroit schools rescue plan blogs that appeared on Crain’s mental health funding,services website. Comments may be edited Under emergency management, As social worker of 30 years, I for length and clarity. four state-appointed EMs drove have had the experience of watch- deficits above $300 million annually ing public schools be bought out by while watching enrollment plum- the state has the gall to suggest con- a myriad of private businesses and met and schools fall apart. Detroit’s tinuing to run the schools it has deci- corporate managers, only to watch district was in or near the black until mated and is preventing an elected them close in a couple years. Not 2008, and has since been in serious school board from stepping in for enough profit and not enough deficits every single year under more than 10 years. knowledge of how schools are run. emergency management. And now J Ben S Lahser Knight 20160222-NEWS--0007-NAT-CCI-CD_-- 2/19/2016 3:41 PM Page 1

CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016 7 Dentists push to cut dental CT scanners from CON regulation

By Jay Greene ments in cone-beam technology. University of Michigan School of Dentistry. said. “The technology is improving [email protected] Keshishian said the workgroup is “We tried to get the dental scan- and radiation doses are going Health insurers and business expected to be appointed within ner out from CON,” said Brooks, a down. It is the same as standard or- groups are lining up to oppose a bill two months and take up to three private practitioner in Ann Arbor. thodontic X-rays.” supported by the Michigan Dental Asso- more months to submit a report. “The radiologists were OK with it. It Health insurers oppose eliminat- ciation and introduced this month by “All high-tech equipment needs to primarily was the hospital adminis- ing cone beam CON permitting. A Sen. Rick Jones, R-Grand Ledge, that be regulated. Payers have a difficult trators, the insurance people and the spokesman for the Michigan Health would eliminate certificate-of-need U.S. FOOD AND DRUG ADMINISTRATION time paying for health care costs if Economic Alliance who opposed it.” and Hospital Association said the regulation for a type of dental CT scan. Cone beam imaging technology has you have extra infrastructure,” said Except for routine bite-wing X- group has no official position yet Dentists say they want the 10-year- become part of many oral procedures. Keshishian, who also is medical di- rays, which typically are used to de- but generally supports CON. old CON rules eliminated for dental rector with Blue Care Network. tect tooth decay and gum disease, Insurer Delta Dental of Michigan cone beam computed tomography to the dental association this year In 2013, a CON Commission com- Brooks said the cone beam is re- said it opposes legislation that reduce dental practice costs, expand asked the commission to change mittee studied CT regulations and placing standard dental X-rays. would remove dental CT from regu- access to the imaging devices, and ad- the standard without workgroup re- recommended against changing “More people who have missing lation because of the role CON plays dress patient convenience and quality. view. He said the commission then cone beam rules, said Sharon teeth get implants in place. The 3-D in controlling health care costs. Ⅲ Mark Johnston, dental associa- decided to review the standards in Brooks, who chaired the committee scanner evaluates where the nerve Jay Greene: (313) 446-0325 tion president, said cone beam im- light of new science and develop- and is professor emeritus with the canal is with impacted teeth,” she Twitter: @jaybgreene aging technology has advanced, becoming safer with less radiation exposure and is now a standard of care for surgical implants and a growing list of other oral procedures. Jones’ Senate Bill 741 is in the health policy committee. Michigan and Rhode Island are the only states that regulate dental CT scanners. Connecticut eliminated such regulation in 2012. Let us help you tell your story. “Cone beam-style X-rays give a very clear, 3-D picture of the tooth, vessels and nerves before surgery,” Crain Content Studio can tell your brand’s Jones said. “This should lead to story to the right audience. Our multiplat- much less pain by the patient. Den- form approach can include print, digital and tists should have more access to it.” Jones said he believes the CON in-person events. permitting process takes too long, is too costly for dentists and drives up To find out more, contact Dan Duggan at costs for patients. [email protected]. “The application fee typically costs $3,000, and another $5,000 for attorney’s fees. Then you have to wait nine months for approval,” Jones said. Despite the CON barrier, dental cone beam CT scanners, which average about $100,000, have increased 335 percent in Michigan to 74 in 2014 from 17 in 2010, according to the state Department of Health and Human Services. Patient scans have increased 341 percent, to more than 25,990 from 5,900, during that same period. In Southeast Michigan, cone beam scanners have increased to 35 facilities with 12,750 scans in 2014, up dramatically from three facilities and 302 scans in 2012, HHS said. Spillane & Reynolds Orthodontics of Novi performed the most with 2,400 in 2014, the state said. “To say that access (to cone beam technology) is somehow hindered is ludicrous,” said Bret Jackson, executive director of the Economic Alliance for Michigan, a coalition of business and union groups that oppose the change. Jackson said legislating CON elimination is the wrong approach, and CON rule changes should be handled through the Certificate-of- Need Commission. One week before Jones introduced SB 741, the CON Commis- sion ordered a workgroup to study cone beam CT regulations. Bill Sullivan, director of government and insurance affairs with the dental association, said dentists can’t wait on the CON Commission to study the issue because it has consistently rejected changes in cone beam regulation for years. PRINT | ONLINE | WEBINARS | VIDEO | EVENTS Marc Keshishian, M.D., chairman of the CON Commission, said 20160222-NEWS--0008-NAT-CCI-CD_-- 2/19/2016 4:43 PM Page 1

8 CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016 Report: Startups cool a bit

By Marti Benedetti [email protected] Michigan’s rapid entrepreneurial growth rate in the past five years is waning slightly but remains ahead of other Midwestern states, according to the Michigan Entrepreneurship Score Card released Monday by MiQuest. “Michigan had a huge takeoff after the Great Recession, and it can’t keep that pace forever,” said consultant Graham Toft, president of GrowthEco- nomics Inc. and author of the report. He added that this year’s data shows Ohio is nipping at Michigan’s entrepreneurial heels. “You have some competition to your south.” Diane Durance, MiQuest president, agreed that the entrepreneurship pace is slower because gains starting in 2009 were huge. The Score Card analyzes data from 2004 to 2014. MiQuest is a Lansing-based nonprofit serving entrepreneurs. Durance said entrepreneurism is a bit down because talented professionals are getting job offers from the booming auto industry, making them less inclined to start businesses. A look at the report’s primary entrepreneurial metrics — climate, change and vitality — reflects the slowdown (See box below). Michigan ranked in the top 10 states nationally in metrics including five-year business survival (ninth), university R&D performance (sixth), high-tech manufacturing employment (first) and business taxes (fifth). Ned Staebler, Wayne State Univer- Daily Monitoring and Systematic Rebalancing can capture more sity’s vice president for economic development, and president and Systematic gains from market volatility. Come learn how our process is CEO of TechTown, said he thinks the designed to keep your investments in balance. state may be better off now than Rebalancing when the study was completed. “We have more than a dozen ven- Is your advisor ture capital firms that are very active. equipped to monitor In 1999, there were two or three,” he said. your asset allocation The report is sponsored by Clark everyday? Hill PLC, Crain’s Detroit Business, Consumers Energy, DTE Energy Foun- dation, MiBiz, Michigan Association of State Universities, Michigan Municipal League, Michigan State Housing Devel- opment Authority and the Small Business Association of Michigan. Ⅲ

Michigan’s rankings Where Michigan ranks among the 50 states in the three main measurements in the Small Business Association of Michigan’s annual Entrepreneurship Score Card. The report reflects 2014 data. (Change in rank from 2004 in parentheses): Entrepreneurial climate: 23rd (+7) Entrepreneurial change: 12th (+32) 248.731.9500 | WWW.SCHECHTERWEALTH.COM Entrepreneurial vitality: 35th (+4) Note: Entrepreneurial climate measures general business conditions, change measures Investment Advisory Services offered through Schechter Investment Advisors, LLC. improvement relative to other states, and vitality measures relative level of entrepreneurial activity. 20160222-NEWS--0009-NAT-CCI-CD_-- 2/19/2016 10:56 AM Page 1

SPECIAL REPORT: BUSINESS

How to minimize cyber risk Passwords should be “long and strong,” according to the National Cyber INSURANCE Security Alliance. This means, despite the inconvenience, using creative mixtures of uppercase and lowercase letters, numerals and symbols. Be certain that passwords do not include personal information about an employee. For example, the name of the street she may live on. Require that employees change passwords according to a predetermined schedule, and that they are securely stored offline.

Train employees to recognize links contained in emails, attachments or online ads and how to properly delete them. Make certain that staff know how to effectively use email spam filters.

Emphasize to employees the importance of backing up their work and its role in protecting the company’s intellectual property. But don’t retain personal data on clients or employees Cyber insurance offers companies a safety net from online hackers that is no longer needed; it can cause unnecessary risk. By Paul Vachon weighing whether more than traditional business data can be later used to assist in future attacks. Special to Crain’s Detroit Business security IT systems and protocols are needed. And once a hacker invades a system, they often Most businesses and people are inextricably The right answers will depend on the industry have the opportunity to steal more information Encourage staff to connected to the digital world, from desktop served, client data stored and other theft risks, than they originally intended. “A bad guy may be PCs and the servers they link with to tablets, which will vary by business. after a company’s trade secrets, but since many remain ever watchful smartphones, smartwatches and a litany of The state of cyberattacks systems don’t segregate their departments’ infor- and to alert IT teams if other gadgets. mation, he might also get personal data on em- something out of the And don’t forget today’s high-tech cars. Intrusions into a company’s network can take ployees,” Giszczak said. ordinary appears on One characteristic all these devices share is on several forms. “The hackers today are both An example occurred in February 2015 when their computer or in connectivity, their link to the outside world. All more creative and more technologically sophisti- Indianapolis-based Anthem Inc., a large, for-profit their email. And, this integration comes at a price: the threat of cated,” said Jim Giszczak, member at McDonald health insurer, suffered a cyberattack affecting its obviously, if a data breaches by nefarious hackers. Hopkins, a business law firm with offices in entire organization, compromising both general Since digital technology is so new — and its ca- Bloomfield Hills. company data and medical information of some suspicious or pabilities so amazing — the vulnerability to at- “One common technique they employ is 80 million members. Despite having security pro- unfamiliar individual is tack at the corporate level may not be so evident. something called ‘spear phishing.’ This happens tocols in place, the company described the attack physically spotted But, as technical experts and local insurance ex- when a hacker penetrates a company’s system as very sophisticated. It was unable to determine near the company’s perts attest, the risk is all too real, making effective and sends a fraudulent email to an unsuspecting the precise origin of the attack. workstations or preparedness a necessity, not a luxury. employee, asking for sensitive information. As- Experts continue to advocate for companies to servers. The business threat is best managed by review- suming the request is legitimate, the employee ing the level of specialty insurance needed — and complies, compromising the information.” That SEE ONLINE, PAGE 10 Source: National Cyber Security Alliance, local insurance brokers 20160222-NEWS--0010-NAT-CCI-CD_-- 2/19/2016 10:58 AM Page 1

10 CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016

SPECIAL REPORT: BUSINESS INSURANCE “Buying cyber insurance is unlike purchasing a general liability policy.” David Derigiotis,seniorvice president of Farmington Hills-based Burns & Wilcox ONLINE FROM PAGE 9 Report: Cyberattacks cause collateral damage Last year was the year of collateral damage with respect to cyber use aggressive measures to prevent risks, with attacks touching people “who never dreamed they might be hacking on the front end, such as involved in a security breach,” said Hewlett-Packard Co. in a report is- system encryption, redundant fire- sued Wednesday. walls and cryptic passwords. But as The Palo Alto, Calif.-based information technology firm said in its Brian Lapidus, a managing director “Cyber Risk Report 2016” that the U.S. Office of Personnel Management at New York-based Kroll Inc. ex- and extramarital affairs website Ashley Madison were among those hit plained, implementing these meas- by cyber breaches in 2015. ures is like aiming at a moving target. “Data compromise is no longer just about getting payment card in- “I think organizations are getting formation. It’s about getting the information capable of changing better with their protection,” someone’s life forever,” said the report. Lapidus said. “But at the same time, Other key themes last year: the criminals are getting better and Ⅲ “Overreaching regulations push research underground.” Too better with their methods, so it’s a often, said the report, legislation “incurs unwanted consequences to vicious circle.” go along with the intended result.” Lapidus is managing director of Ⅲ “Moving from point fixes to broad impact solutions,” which identity theft and breach notifica- “strains the resources of both the vendor developing the patch and the tion; Kroll performs risk analysis as customer deploying the patch.” well as cybersecurity, incident re- Ⅲ “Political pressures attempt to decouple privacy and security ef- sponse and consumer remediation. forts.” Many lawmakers in the U.S., the United Kingdom and else- Liability: Coverage gaps where “claimed that security was only possible if fundamental rights of privacy and due process (were) abridged,” says the report. Further complicating matters is Ⅲ The industry’s failure to learn anything about patching in 2015. the issue of liability. In the absence “While vendors continue to produce security remediation, it does lit- of any insurance coverage, Lapidus tle good if they are not installed by the end user,” the report says. said, each company is on its own. Ⅲ Attackers have shifted their efforts to directly target applications. “Forty-eight states have their “They see this as the easiest route to accessing sensitive enterprise own breach notification laws,” he data and are doing everything they can to exploit it,” says the report. said. “So when data is compro- Ⅲ The “monetization” of malicious software, which “has led to an mised, the location of the employ- increase in ATM-related malware, banking Trojans and malware.” ees involved will determine how a Business Insurance company must respond. Each state’s laws are different, but all list specific rules by how affected par- fering stemming from having to cy,” he said. Business owners “really ties are notified and what remedy closely monitor her credit in the need an expert you can lean on who the company will provide.” months following the incident. appreciates and understands the Lapidus cited an example of a sit- Court rulings like this therefore complexity of your specific uation where his company’s servic- tend to argue against the need for situation.” es were needed. A client financial cyber insurance aimed at con- Too many people don’t under- institution suffered the theft of 15 sumers, since an individual’s losses stand all the details of these policies laptop computers that contained can usually be remediated by the — the available coverage, the op- customer financial data. Kroll used retailer involved. tional enhancements and a number investigators to locate the laptops New products of other features, he said. and assess the damage. It then in- When an agent doesn’t under- formed the client of the resulting Business-to-business cyber in- stand it, the client will have too customer notification and remedia- surance, by contrast, is concerned much uncertainty to make a pur- tion requirements. with much more complex scenar- chase. And they may put it off and Given these potentially steep fi- ios, but is very much an industry in put their company at risk. Right nancial consequences, a new fron- its infancy. Until very recently, there now, cyber insurance is a $2.5 bil- tier in the insurance industry is were no statistical models that un- lion per year industry. emerging. While evolving and proac- derwriters could use to assess risk “If everyone involved — retail tive security measures should always and develop policies. agents, wholesale brokers and carri- be the first line of defense, growing This changed in January when ers — better understood these poli- awareness of the risks has given rise Lloyd’s of London released a set of cies, that volume could be double to cyber insurance products. “core data requirements,” which ac- or triple what it currently is,” he Although major incidents, such complish two things, according to said. Derigiotis attributes this as those involving big retailers such Mary Jane Grandinetti, managing knowledge deficit to the fact that as Target and Home Depot, have in- editor of Business Insurance. “The the worlds of high technology and volved considerable liability on the Lloyd’s model codifies precisely the insurance have traditionally had lit- companies’ part, recent court specific cyber damages that need to tle in common. Until now. precedent has provided liability re- be addressed in this type of cover- At-risk industries lief for retailers. A 2015 U.S. District age. It also sets standardized meth- Court ruling in Suffolk County, N.Y., ods of assessing potential risks and Derigiotis stresses that the fields dismissed a suit filed by a customer developing appropriate levels of currently in greatest need for cyber of Michaels Stores, the arts and crafts coverage.” coverage are those that deal with retailer. This key development will un- highly sensitive or confidential in- The plaintiff, in what eventually doubtedly lead to more providers formation, such as financial servic- became a class-action suit, was one entering the field. es or health care. In addition to cus- of several thousand customers But the ever-increasing complexi- tomer liability, data breaches in whose credit card information was ty of this emerging field can prove these industries can trigger fines stolen in December 2013 due to overwhelming to the business owner. imposed for regulatory or HIPAA malware that had infected the David Derigiotis, senior vice (Health Insurance Portability and store’s point-of-sale system. president of Farmington Hills- Accountability Act) violations. Two fraudulent purchases were based Burns & Wilcox, cites this as Cyber policies are also being subsequently made, both of which one reason why hiring an expert written to cover companies from were later detected and removed specialized broker or agent is losses caused by cyberterrorism, from the customer’s account. In dis- important. such as business interruption when missing the case, the court rejected “Buying cyber insurance is unlike the plaintiff’s claim of pain and suf- purchasing a general liability poli- SEE NEXT PAGE 20160222-NEWS--0011-NAT-CCI-CD_-- 2/19/2016 11:01 AM Page 1

CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016 11

SPECIAL REPORT: BUSINESS INSURANCE Property insurance industry assesses new high-tech tools

By Matthew Lerner lutions’ property risk consulting Francisco-based director of catas- Business Insurance practice in Detroit. trophe risk engineering services at Technology will continue to be a The analysis, which focuses pri- the catastrophe modeler. Clients major force in the property insur- marily on property valuations as also can take advantage of site-spe- ance space as several new tools well as primary and secondary cific engineering consulting and make their way to the market. characteristics for natural catastro- outsourced modeling services to At the recent Property/Casualty phe modeling, produces a report help quantify their exposure . “As part of the Cohen & Company team, we deliver Insurance Joint Industry Forum in showing where property program Ⅲ Risk Management Solutions Inc. New York City, a panel of industry improvements are needed in an later this year plans to roll out RMS the strength and depth of more than 400 professionals executives said 2015 may be re- easy-to-read format, she said. One, its suite of open, real-time ex- to help private companies seize opportunity.” membered as the first year that Other tech-based tools from na- posure and risk management – Mike Lorenz, Partner technology issues dominated the tional companies highlighted at the applications. insurance industry discourse. Tech- forum: An area of increasing interest in one ﬁrm, better together | cohencpa.com/ghd nology also seems poised to make a Ⅲ Willis Towers Watson PLC Global portfolio management is imagery, as splash in 2016 . Peril Diagnostic gives clients a glob- greater use of satellites and drones One new tool at Aon Risk Solutions, al view of exposures across their en- melds with social media to maxi- for example, is the company’s Prop- tire portfolio by peril, including mize input of real-time information, erty Laser program, which Aon intro- earthquakes, river floods and storm said David Pedersen, senior vice duced at the end of last year with the surges. The diagnostic produces an president of business development aim of improving clients’ risk profiles overall perils score to allow bench- at CoreLogic Inc. in Indianapolis. Make a Big and lowering their costs of risk. marking to obtain a better picture of “The imagery is becoming more “Property Laser looks at all as- the overall risk. granular,” said Pedersen, thereby Impression pects of a property program, from Ⅲ At AIR Worldwide, risk managers generating more accurate data. values and brokerage to engineer- can use its Touchstone system “to Business Insurance is a sibling ing and claims processes,” said Anne access a global suite of catastrophe publication of Crain’s Detroit Parkin, a director with Aon Risk So- risk models,” said Andy Kao, San Business.

FROM PREVIOUS PAGE of continuously refining and “As an example, after a user’s strengthening security protocols. password is entered, a private mes- a website is disabled, or extortion. And beyond insurance products, sage is sent to their cellphone ask- An example of cyber extortion: there also are specialty vendors, ing if she or he is in fact attempting When a company’s entire system is technical experts, when it comes to to access the system. Their affirma- “held hostage” by an outside party blocking out the ever-increasing so- tive response proves that they are, unwilling to release it until a ran- phistication of cyber hackers. and access is granted.” som is paid. Ash Devata, vice president of Duo’s Platform Edition takes this Derigiotis and other experts products at Ann Arbor based Duo protection to the next level. “Plat- argue that in the future all business- Security, explains his company’s form assesses the characteristics of es will eventually need some type of “two-factor authentication” proto- the wireless devices used by all of an cyber coverage. The coming of the col as an extra layer of security organization’s employees. If it deter- Internet of Things — the connec- against hackers. mines that some have outdated tion of virtually all digital devices so “Ninety-five percent of all cyber software and are thus more vulner- that they may work together seam- breaches involve compromised able, it recommends corrective ac- lessly to drive more efficiency — will sign-in credentials,” Devata said. tions be taken so the security of this open exciting new possibilities, but “With our system, two independent separate channel is preserved.” also a multitude of new opportuni- channels are utilized to assure Yet another innovative (and Large Format Graphics, Building Wraps, Banners, Flags, ties for the bad guys. someone attempting to log on is amazingly low-tech) security-en- Vehicle Wraps, Event and Exhibit Graphic Solutions. Reducing risk also comes by way who they say they are.” hancing move is to put the organi- We do more than provide graphic branding solutions that attract and zation on what Lapidus calls a “data inspire. Our mission is to evoke a unique emotional experience and leave diet.” He advises clients to delete a lasting impression on our partners and their clients. As a national old information that will never be leader in large format graphics, we set the benchmark for quality. From legitimately needed. our passionate team of creative designers, expert printers, and “If you’re holding on to data from professional installers to our world-class facility and state-of-the-art technologies—we make you look remarkably good. 30 years ago — customer Social Se- curity numbers, dates of birth and the like, holding onto that serves no realistic business purpose and poses a significant liability risk,” Lapidus said. “Get rid of it.” Ⅲ iMBranded.com / (866) 717-4467

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CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016 13 CRAIN'S LIST: LARGEST MICHIGAN BUSINESS INSURANCE COMPANIES Ranked by 2015 revenue Premium Employees Company Revenue Revenue volume 2016 Worldwide Rank Address ($000,000) ($000,000) Percent ($000,000) Michigan/ employees Phone; website Top executive(s) 2015 2014 change 2015 Total U.S. 2016 Frankenmuth Insurance John Benson $597.0 $566.4 5.4% $638.7 527 642 1 1 Mutual Ave., Frankenmuth 48787-0001 chairman and CEO 642 (989) 652-6121; www.fmins.com Acrisure LLC Gregory Williams 423.0 206.0 105.3 NA 279 NA 2 5664 Prairie Creek Drive, SE, Caledonia 49316 CEO 2,009 (800) 748-0351; www.acrisure.com Meadowbrook Inc. Robert Cubbin 135.0 135.0 0.0 1,050.0 335 947 3 26255 American Drive, Southfield 48034-6112 president and CEO 947 (248) 358-1100; www.meadowbrook.com Aon Corp. Carol Williams 130.0 129.0 0.8 NA 179 NA 4 3000 Town Center, Suite 3000, Southfield 48075 resident managing director, CEO, Aon 36,000 (248) 936-5200; www.aon.com Risk Solutions Brown & Brown of Detroit Todd Piersol, executive vice president; 75.0 73.0 2.7 NA 456 NA 5 35735 Mound Road, Sterling Heights 48310 Angela Garner, president; Paul Glantz NA (586) 977-6300; www.bbdetroit.com and Doug Shepson, administration Marsh Nina Maggart 51.2 48.6 5.3 NA 141 NA 6 One Towne Square, Suite 100, Southfield 48076 Southfield office head NA (248) 945-5600; www.marsh.com Arthur J. Gallagher & Co. Bryan Hirn 46.0 44.4 3.5 NA 184 NA 7 30150 Telegraph Road, Suite 408, Bingham Farms 48025 area president, benefits and HR 16,000 (248) 203-0626; www.ajg.com consulting; Ryan Isaacs, area president, property and casualty consulting LSG Insurance Partners Jay Schreibman 32.5 26.9 20.9 1,220.8 111 111 8 2600 S. Telegraph Road, Suite 100, Bloomfield Hills 48302 president and CEO 111 (248) 332-3100; www.lsgip.com Marsh & McLennan Agency LLC - Michigan Thomas McGraw 32.4 30.9 4.8 1,404.0 139 139 9 3331 W. Big Beaver Road, Suite 200, Troy 48084 CEO, Michigan 139 (248) 822-8000 and (734) 525-2463; www.mma-mi.com Valenti, Trobec, Chandler Inc. Alan Chandler, president and CEO; Terry 29.2 25.0 16.9 157.4 147 150 10 1175 W. Long Lake Road, Troy 48098 Griffin, COO and Robert Trobec, CFO/ 150 (248) 828-3377; www.vtcins.com executive vice president Kapnick Insurance Group Jim Kapnick 27.3 24.8 10.1 NA 153 153 11 769 Chicago Road, Troy 48083 CEO 153 (248) 352-4455; www.kapnick.com Hylant Group Patrick McDaniel 25.7 25.5 0.8 338.6 141 601 12 24 Frank Lloyd Wright Drive, Suite J4100, Ann Arbor 48105 president, Detroit office 601 (734) 741-0044; www.hylant.com Michigan Financial Cos. Inc. Nick Valenti 17.7 16.2 9.3 16.1 95 125 13 28411 Northwestern Highway, Suite 1300, Southfield 48034 president and CEO 125 (248) 663-4700; www.michiganfinancial.com Daly Merritt Insurance Martin Daly 12.1 12.8 -5.5 118.6 56 56 14 100 Maple, Wyandotte 48192 president and CEO 56 (734) 283-1400; www.dalymerritt.com A. E. Mourad Agency Inc. Tim Mourad, president; Peter Mourad 9.9 10.3 -3.7 550.0 16 18 15 28277 Dequindre Road, Madison Heights 48071 and Steve Mourad, vice presidents 18 (248) 336-1600; www.aemourad.com Ralph C. Wilson Agency Inc. Stefano Vannelli 8.2 7.8 4.5 NA 50 NA 16 26026 Telegraph Road, Suite 100, Southfield 48086 president, CEO and owner 47 (800) 638-1174; www.rcwa.net Oswald Cos. Donald Engle 8.0 7.6 5.3 40.0 34 336 17 39572 Woodward Ave., Suite 201, Bloomfield Hills 48304 executive vice president, branch 336 (248) 433-1466; oswaldcompanies.com manager Korotkin Insurance Group Kenneth Korotkin 7.3 6.5 12.3 59.0 48 48 18 26877 Northwestern Highway, Suite 400, Southfield 48033 president 48 (248) 352-5140; www.korotkin.com The Huttenlocher Group David Huttenlocher 6.3 6.1 3.3 57.0 42 42 19 1007 W. Huron, Waterford Township 48328 CEO 42 (248) 681-2100; www.hgway.com Laurie Sall & Associates LLC Laurie Sall 5.1 4.4 15.7 NA 3 3 20 5435 Corporate Drive, Suite 205, Troy 48098-2624 president 3 (248) 641-2755; www.lauriesall.com J.S. Clark Agency Inc. Joel Clark 5.0 4.5 10.0 NA 30 30 21 25900 W. 11 Mile Road, Suite 210, Southfield 48034 president and CEO 30 (248) 355-9600; www.jsclarkagency.com The Timberland Group Joseph King 4.8 4.7 3.2 NA 14 14 22 1707 W. Big Beaver Road, Troy 48084 president 14 (248) 633-7000; www.timberlandgroup.com

This list is an approximate compilation of the largest such agencies in Michigan. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Michigan office. NA = not available.

LIST RESEARCHED BY SONYA D. HILL

Acquisitions drive record growth of insurance brokerage Acrisure Caledonia-based business insurance bro- company’s acquisition success to its business “We take a lot of pride in the way we act as sides Caledonia, offices in Michigan include kerage Acrisure LLC more than doubled its model. About 60 percent of its deals are a partner. There is little disruption to their sites in Grand Rapids, Kalamazoo, East Lans- sales revenue last year due to a record- sourced from existing insurance agency part- agency, as promised,” he added. “We’re an ating, Traverse City and Marquette. breaking number of acquisitions by the ners. tractive model to independent agencies.” Tuit would not speculate on growth for this company. “We find successful agencies, buy them Sales revenue jumped to $423 million last year, but said he expects “a healthy pace of The business insurance firm made 59 and they become an agency partner,” Tuit year compared to $206 million in 2014 — a adding new agency partners.” agency acquisitions last year, compared with said. “The agency continues to run independ- 105 percent increase. The insurance brokerage was founded by 23 in 2014. ently and grow, but we give them our corpo- Acrisure has 279 employees in six cities in Greg Williams and Ricky Norris in 2005. Dave Tuit, Acrisure’s CFO, attributed the rate support. Michigan and a total of 2,009 in 24 states. Be- Marti Benedetti 20160222-NEWS--0014-NAT-CCI-CD_-- 2/19/2016 11:03 AM Page 1

14 CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016

chel Cancer Center at the University of BEFORE MAKING BIG COVERAGE CHANGES, RETHINK. Missouri Hospital & Clinics, Colum- bia, Mo. Websites: infusystem.com, muhealth.org/locations/ DEALS & ellisfischelcancercenter. EXPANSIONS Bassett & Bassett Inc., Detroit, a public relations firm, has an Asia Pacific operations office in Pune, DETAILS India, and Middle East office in Beirut, Lebanon. Website: CONTRACTS DTE Energy Co., Detroit, announced bassettbassett.com. The Dream Network (Dream TV), a five-year service agreement with New York, an African-American tel- Duke Energy Renewable Services, part Cooper-Standard Holdings Inc., the evision network, has signed a deal of Duke Energy Renewables, Char- parent company of Cooper-Standard with WHPR (TV 33), Highland Park, lotte, N. C. Duke will operate and Automotive Inc., Novi, opened a fa- to launch on Comcast channel 91 maintain DTE’s seven wind parks cility in Chongquing, China, that and digital channel 33.4. Website: totaling 400 megawatts. The wind will manufacture fluid transfer sys- thedream-network.com. projects consist of 247 turbines in tems, fuel and brake delivery sys- Gratiot, Saline and Huron counties. tems and sealing systems for auto- Franklin Consulting Co. LLC, an affili- Websites: dteenergy.com, motive customers. The company ate of Franklin Property Corp., Birm- duke-energy.com. also opened a facility in Huai’an, ingham, with Hotel Investment Ser- Jiangsu province, China, a joint vices Inc., Troy, was awarded the Rubicon Genomics Inc., Ann Arbor, venture between Cooper-Standard contract to market the Yarrow Golf announced a distribution agree- and INOAC Corp., Japan, which will and Conference Resort, Augusta, ment with Beckman Coulter Inc., Life manufacture fluid transfer systems Mich. Websites: his-corp.com, Sciences Division, Brea, Calif., for products and establishes a manu- franklinpropertycorp.com. its ThruPlex Plasma-Seq Kits. Web- facturing hub. Website: sites: rubicongenomics.com, cooperstandard.com. Aqaba Technologies Inc., Sterling beckmancoulter.com. Heights, an Internet marketing and PGK Services Inc., Troy, a staffing so- certified Google partner agency, has Toggled, Troy, a developer and pro- lutions company, has opened a been retained by the Michigan ducer of lighting technology and a new office at the Center for Innova- Rheumatism Society, East Lansing, subsidiary of Altair Engineering Inc., tion and Entrepreneurship at Cleary to redesign the organization’s has added Mega Lighting, the LED University, 3678 Cleary Drive, official website. Websites: lighting subsidiary of Yankon Group Howell. Website: pgkservices.net. aqabatech.com, Co. Ltd., Zhejiang, China, to its li- mrheumatism.org. censing program. Website: DTE Energy Co., Detroit, has com- RETHINK toggled.com. pleted three new solar projects: the ZipLogix LLC, Fraser, a real estate Greenwood Energy Center, Avoca; technology company, has a Web SISU Mouthguard, manufactured Brownstown Township Solar Array services agreement with Roostify, by Akervall Technologies Inc., Saline, on Pennsylvania Road, Brown- Before you ink the deal on your commercial insurance, San Francisco, a provider of auto- has been named the official mouth- stown Township; and the Romulus have the Sterling Insurance Group “RETHINK” your risk mated mortgage technology. Cus- guard of USA Field Hockey Solar Array on Citrin Drive, exposure and effectively lower your insurance costs. tomers can submit a full loan pack- Association, Colorado Springs, Romulus. Website: dte.com. age in minutes, and loan officers Colo., the national governing body Domino’s Pizza Inc. 888.525.7575 | 586.323.5700 | sterlingagency.com can conduct closing activities elec- for field hockey. Websites: sisu , Ann Arbor, tronically. Websites: ziplogix.com, guard.com, usafieldhockey.com. opened its 1,000th store in India. Commercial Insurance • Employee Beneﬁts • Personal Insurance roostify.com. The Jubilant FoodWorks franchise Gentherm Inc., Northville, developer store is at Unity One Mall, 2015 Crypton Home Fabrics by Crypton of thermal management technolo- Janakpuri, Delhi. Website: Inc., Bloomfield Hills, announced gies, has been awarded a five-year dominos.com. that its performance fabrics are contract with a major automotive DeRonne True Value Hardware, East- available at the retail chain Pottery manufacturer for its new battery pointe, has opened a store at 28700 Barn, a division of Williams-Sonoma thermal management system for Harper Ave., St. Clair Shores. Tele- Inc., San Francisco. Crypton Home batteries used in hybrid and phone: (586) 779-1940. Website: Performance Everydaylinen, a new electrified vehicles. deronnehardware.com. designer fabric, will be available on Website: gentherm.com. any of Pottery Barn’s upholstered UHY LLP, Sterling Heights, a certified furniture collections. Websites: GKN Driveline, Auburn Hills, part of public accounting firm, has added crypton.com, potterybarn.com. GKN plc, announced its new light- Hassouneh Auditing Firm, Hebron, to weight VL3 constant velocity joint the UHY global accountancy net- Qualitech, Bingham Farms, a tech- (CV Joint) system, which enables work. The firm is in the process of nology integrator and software re- rear-wheel-drive platforms to save adopting the UHY branding. seller, was selected by Sterling Attor- more than 4kg of weight, has been Website: uhy.com. neys at Law PC, Bloomfield Hills, and selected by BMW AG to launch on its the Gold Law Firm PLLC, Bloomfield 7 Series. Website: gkn.com. Kramer Restaurant Group opened the Hills, to provide new Intel Xeon file Daily Dinette, a 24-hour restaurant, servers, Microsoft software and in- 1701 Express Inc., Detroit, a Citgo gas at 280 W. Nine Mile Road, Fern- stallation and implementation station and convenience store, has dale. Telephone: (248) 268-4783. services. Website: qualitech.net. signed an agreement with U-Haul In- Website: thedailydinette.com. ternational Inc., Phoenix, Ariz., and is Franklin Consulting Co. LLC, an affili- now offering U-Haul trucks, trailers, Intellectual Property Associates Net- ate of Franklin Property Corp., Birm- towing equipment, and support work GmbH, Munich, Germany, a ingham, was awarded the construc- items. Telephone: (313) 924-0494. provider of outsourced intellectual tion management contract with Website: uhaul.com/Locations/ property services, opened its U.S. Hunter Pasteur Homes LLC, Farming- Truck-Rentals-near-Detroit-MI- office at 900 Wilshire Drive, Troy. ton Hills, for land development im- 48211/045158. Telephone: (248) 817-2811. Website: provements for a 52-unit single- http://ipan.metk.de. family residential development, InfuSystem Holdings Inc., Madison Stoneleigh West, Lyon Township, the Heights, a national provider of infu- Tom and Chee Worldwide LLC, Cincin- with custom third phase to the existing sion pumps and related services for nati, opened a Tom+Chee restau- MAKE THE MOST Stoneleigh development. Franklin the health care industry, has imple- rant at 307 E. Big Beaver Road, OF YOUR EDITORIAL Reprints, was also awarded the entitlement mented InfuSystem Express soft- Troy. Website: tomandchee.com. COVERAGE IN CRAIN’S E-prints contract for the fourth phase. Web- ware, which includes the compa- sites: franklinpropertycorp.com, ny’s electronic medical record [email protected] and more! visithphomes.com. connectivity software, at the Ellis Fis- SEE NEXT PAGE 20160222-NEWS--0015-NAT-CCI-CD_-- 2/19/2016 11:04 AM Page 1

CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016 15

FROM PREVIOUS PAGE

MOVES Yemen Café has moved from 8731 Joseph Campau St., Hamtramck, to Now mandatory: 8740 Joseph Campau, Hamtramck. Telephone: (313) 871-4349. NEW PRODUCTS A strong digital defense ADAPT Technology LLC, Rochester Hills, an engineering services provider, is selling and implementing 8tree Inspection Systems, a new The average cyber attack takes nearly 50 days — product by 8tree LLC, Daisendorf, and costs close to $2 million — to resolve. Germany, to the automotive and aerospace industries. The system Letting your guard down is not an option. Rely instantly inspects for dents/protru- sions on show surface panels, as on Rehmann’s cyber security consultants to help well as inspecting fasteners/rivets fend off digital assaults that disrupt your business for proper installation at assembly. Websites: adapttechteam.com, and bruise your bottom line. 8-tree.com. Contact me today to learn more. NEW SERVICES Oak Electric Service Inc., Waterford Township, an electrical contractor, has a new heating, cooling and JESSICA DORE, CISA plumbing division, Oak HCP, provid- Principal ing heating and cooling installation 989.797.8391 and service for furnaces, air condi- [email protected] tioners, boilers and hot water heaters. Telephone: (248) 623-4900. Website: oakelectric.com.

Advantage One Federal Credit Union, SOURCE: Ponemon Institute’s 2015 Cost of Cyber Crime Study: United States. Brownstown Township, has added commercial loans to its loan products and services. Telephone: (734) 676-7000. Website: aofcu.com. rehmann.comrehmann.com | 866.799.9580 Flagstar Bancorp Inc., Troy, has launched a national homebuilder lending platform to support the ex- pansion and diversification of the company’s commercial lending business and boost its commercial banking presence nationally. Website: flagstar.com. STARTUPS Electronic Payments, Azoury Financial LLC has been estab- lished by Steve Azoury, a financial consultant, at 3150 Livernois Data Privacy and Road, Suite 145, Troy. Telephone: (248) 375-2853. Website: Security Law Experience azouryandassociates.com.

Yuzu Sushi Co., a sushi restaurant, ® opened at 32832 Woodward Ave., In Your Corner. Royal Oak. Telephone: (248) 556- 5444. Website: yuzusushico.com. ■ Data Security and Information law, privacy policies, breach notifi cation requirements. I Heart Dogs Rescue and Animal Haven, has opened at 22415 Groesbeck ■ Electronic payments, mobile payments, Highway, Warren. Telephone: (586) electronic fund transfers, stored value cards. 200-5977. Website: iheartdogs.org.

Clementine Live Answering Service, a new national telephone answering service offering 24/7 live answering to medical professionals, property management, home services and others, has opened at 19992 Kelly Road, Harper Woods. Telephone: (888) 398-CLEM. Website: clemen- tineanswers.com.

Deals & Details guidelines. Email [email protected]. Use any Deals & Details item as a model for your release, and look for the appropriate category. Without complete information, your item will not run. Photos are welcome, but we Contact Jill Miller at [email protected] cannot guarantee they will be used. Ŷ Detroit Ŷ Novi Ŷ Grand Rapids Ŷ Kalamazoo Ŷ Grand Haven Ŷ Lansing Ŷ Ann Arbor Ŷ Hastings 20160222-NEWS--0016-NAT-CCI-CD_-- 2/19/2016 11:24 AM Page 1

16 CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016

pact” to feature speakers Detroit DEC Presents Trevor Fetter. 11:30 PEOPLE: Mayor Mike Duggan and U.S. Sen. Deb- a.m.-1:30 p.m. March 14. Detroit SPOTLIGHT CALENDAR bie Stabenow, D-Mich. Moderated by Economic Club. Fetter, chairman Javier Palomarez, president and CEO, and CEO of Tenet Healthcare, will Army Tacom commander WEDNESDAY conference includes education and U.S. Hispanic Chamber of Commerce. speak. Westin Book Cadillac, De- FEB. 24 resources for women entrepre- MGM Grand, Detroit. $100. Contact: troit. $45 DEC members, $55 to leave post in Warren Detroit Policy Conference. 7:30 a.m.-4 neurs. JoAnne Purtan is emcee. Barb Lange, phone: (248) 792-2763; guests of members, $75 nonmem- The first female commander p.m. Detroit Regional Chamber. Keynote speaker is Bridget Tubbs email: [email protected]; website: bers. Website: econclub.org. at the U.S. Army Tacom Life Cycle Keynote remarks by David Maraniss, Carlon, CEO, AppleTree Learning Cen- mhcc.org. Management Command in Warren Pulitzer Prize-winning journalist. ters. Walsh College. $45; $25 stu- could soon conclude her assign- MotorCity Casino Hotel, Detroit. dents. Contact: Cindy Rush, phone: Government Forecast Breakfast. 9- ment in the post, after the Army $209 chamber members, $285 (248) 823-1238; email: 9:30 a.m. March 7. Birmingham Calendar guidelines. Visit named her successor last week. nonmembers. Contact: Janelle Ar- [email protected]; website: Bloomfield Chamber of crainsdetroit.com and click “Events” Maj. Gen. buckle, (313) 596-0340; email: walshcollege.edu/EYOU. Commerce. Speaker: U.S. Sen. Gary near the top of the home page. Gwen Bingham [email protected]. Peters., D-Mich. The Townsend Then, click “Submit Your Events” will be re- UPCOMING EVENTS Hotel, Birmingham. $50, $40 mem- from the drop-down menu that will placed as FRIDAY 12th annual MHCC Public Policy & Econom- bers, $290 corporate table of eight. appear. Fill out the submission form, commanding FEB. 26 ic Forum Breakfast. 7:30-10 a.m. March Contact: Birmingham Bloomfield then click “Submit event” at the general at Entrepreneur-You: The Conference. 7. Michigan Hispanic Chamber of Chamber of Commerce, phone: bottom of the page. Tacom by 8:30 a.m.-3 p.m. Inforum. Fifth an- Commerce. “Strengthening Ameri- (248) 644-1700; email: More Calendar items can be Maj. Gen. nual women’s entrepreneurship ca: Hispanic Opportunity and Im- [email protected]. found at crainsdetroit.com/events. Clark LeMas- Maj.Gen.Gwen ters Jr., Bingham deputy chief of staff for lo- ADVERTISING SECTION gistics and operations for the Army Materiel HEALTH CARE INSURANCE Command at Redstone Ar- senal in Al- Sharon Common, Jeffrey S. Belen, abama, the Fund Development VP of Legal and Finance, Maj.Gen.Clark Army said. LeMasters Jr. Officer, KIG Korotkin Insurance No effective Northeast Guidance Group date was Center given; the last two changes of KIG formally Korotkin command at Tacom were in Sharon Common is Northeast Insurance Group announces June of 2012 and 2014. FINANCE Guidance Center's new Fund Development Jeffrey Belen has achieved an equity Bingham, 56, came to Tacom Officer, bringing with her 15 years of partnership effective 1/1/16. In addition to in mid-2014 after serving as development and foundation experience. She servicing his customers Jeffrey also handles the commanding general of White Marc Labadie, will work with the Board of Directors, staff and agencies legal and financial matters. Sands Missile Range in New Mexi- neighborhood organizations to build Partner, co since 2012. LeMasters, 53, relationships, and focus on community Emily Korotkin, has been deputy chief of staff at CR Myers & Associates commitments that support integrated health VP of Carrier Relations, Redstone since August 2014. Marc Labadie was welcomed programs for children, adults and families. KIG Korotkin Insurance to the Society of Financial NEGC provides integrated healthcare to eligible Metro Timesnames Service Professionals' "Top Wayne, Macomb and Oakland County Group Leaders 40 and Under" for his residents, emphasizing emotional and physical KIG Formally Korotkin Blitchok editor-in-chief accomplishments and advancing credentials, well being. Insurance Group announces Detroit alt-weekly Metro and the Million Dollar Round Table's "Top of the Emily has achieved an equity partnership Times has named Dustin Blitchok Table" for his production and client service. Melissa Freel, effective 1/1/16. In addition to servicing her editor-in-chief, effective Feb. 25. Marc began his financial services career in 2000 Chief Operating Officer, customers Emily also oversees and manages Blitchok, 26, has been com- the agencies insurance carrier relationships. at Brown & Brown of Detroit, and is one of the Northeast Guidance munications director for Oak- youngest professionals in the country to hold Center land County Treasurer Andy both the Chartered Life Underwriter (CLU) and Matt Warsh, Meisner and before that was a Melissa Freeljoins Northeast Retirement Income Certified Professional (RICP) VP of Technology, reporter for The Oakland Press. Guidance Center's executive designations. Blitchok replaces Valerie team as Chief Executive Officer,previously KIG Korotkin Insurance Vande Panne, who was hired in serving as executive director for Wayne CHAP. Group April 2014 and left her role a year She has spent morethan 20 years designing, KIG Formally Korotkin ago. Vince Grzegorek, editor-in- TECHNOLOGY implementing and leading services for Insurance Group announces chief at Euclid Media Group LLC vulnerablepopulations. “Melissa’s leadershipin Matt has achieved an equity partnership sister paper Cleveland Scene, Detroit and in state-level policy positions is a effective 1/1/16. In addition to servicing his had been interim editor. Jeff Schultz, perfect fit for NEGC,” saidSherry McRill, customers Matt also manages the agencies Vice President, National president & ceo. NEGC iscommitted to technology and automation initiatives. Business Development, community-based services that promote total Real estate attorney Howe QStride, Inc. wellness for children,adults and families. begins private practice Schultz, after almost a Attorney J. Patrick Howe has decade with global IT leader launched a private practice, Genpact, will be responsible for national Birmingham-based JPHowe business development activities including client ACCOLADES PLLC, after working on downtown recruitment, operations, sales and business Detroit real estate and restaurant relations management. Schultz is a graduate of deals for Royal Oak-based Central Michigan University where he studied Warner Norcross & Judd LLP was recently recognized Howard & Howard Attorneys PLLC. business administration and was a member of by PulteGroup, Inc. as its 2015 Law Firm of the Year. The new firm specializes in the Men's Varsity Soccer program. He is a liquor licensing, land acquisi- "Friend" of the Michigan Ballet Theater and One of America’s largest homebuilding companies, Pulte recognized the tion, land use and zoning vari- enjoys spending time with his wife and law firm at its Legal Summit and highlighted the work of: ances. Howe, 36, said he also has daughter. formed a student housing devel- · Mary Jo Larson, client service manager for Pulte who oversees a opment business, Purpose Built Crain’s has moved its complete list Warner Norcross team of seven attorneys and staff focused on Properties LLC. of appointments and promotions to employee benefits issues for the 4,000-employee company Before starting at Howard & www.crainsdetroit.com/peopleonthemove. · Lisa Zimmer, who helped with special projects Howard in 2011, Howe was at- Guaranteed placement in print and · Jennifer Watkins, who assisted with compensation and EB issues torney/partner at Carlin, Edwards, online can be purchased at this · Norbert Kugele and April Goff, who focused on health care reform Brown & Howe PLLC and an attor- and other welfare issues ney with Plunkett Cooney PC. Ⅲ website. Larson 20160222-NEWS--0017-NAT-CCI-CD_-- 2/19/2016 3:40 PM Page 1

CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016 17

QUICKEN “We view ourselves in FROM PAGE 3 somewhat of a unique MARKET PLACE

return on investment that justifies situation from a service or LEGAL NOTICES such spending, Farner added. product perspective.” Quicken spent $157 million on U.S. measured-media in the first Jay Farner,Quicken Loans nine months of 2015, the most recent numbers available from New that at-bat,” Farner said. As part of the deal, Quicken be- York City-based data firm Kantar Quicken’s strategy also in- came the team’s official mortgage Media. For all of 2014, Quicken spent cludes getting noticed by media lender, and it sponsors a club PUBLIC NOTICE $361 million in measured and un- and those who get public atten- lounge for suite or club-level tick- measured ad spending, according tion by talking about marketing. et holders and has branding All Citizens are advised that the Detroit Transportation Corporation (DTC) has prepared an application for State of Michigan financial assistance for fiscal year 2017 as required to Advertising Age. Stories (including this one) are throughout the stadium. under Act 51 of the Public Acts of 1951, as amended, and for federal assistance as Quicken was the 10th fastest- free exposure. It also has deals with the Detroit required under the federal transit laws, as amended. The DTC is requesting estimated growing marketing spender in 2014, “What are you going to do Red Wings and the Detroit Belle Isle total capital funding through the following sources: Section 5307 for DTC Infrastructure and Equipment Upgrades $500,000; Section 5337 DTC Infrastructure and Equipment up 31 percent over the year before, that’s going to rise to the top of Grand Prix. Upgrades, $1,375,000; Section 5310 DTC Infrastructure and Equipment Upgrades, Ad Age reported last year. the list from a reporter’s per- Quicken also is investing in col- $440,625 and (MI) Act 51 Operating Assistance, $5,100,000. Notice of these federal The lender isn’t discussing its spective — different, interest- legiate sports marketing. funds has been previously published in the Transportation Improvement Plan prepared by SEMCOG. current spending specifics, but it’s ing, creative, that creates dis- In January, it announced sweep- The DTC ensures that the level and quality of transportation service is provided without known it wrote a big check to adver- cussion in communications, stakes at 26 colleges, including the regard to race, color, or national origin in accordance with Title VI of the Civil Rights Act tise in Super Bowl 50 on Feb. 7. public relations, and social University of Michigan and Michigan of 1964. For more information regarding our Title VI obligations or to file a complaint, It bought a 60-second spot to media?” Farner said. State University. Participants will please contact the DTC at the address listed below. tout its Rocket Mortgage, which The golf exhibition certainly have a chance to win tickets for the The proposed application is on file at the DTC and may be reviewed from Monday, promises consumers the ability to has drawn local attention. Quick- 2016-17 season. February 1, through Friday, March 4, 2016 between the hours of 9 a.m. and 4:30 p.m. Written comments or requests regarding the application and/or written requests for a get mortgage approval in as little en has heavily invested in the Quicken has used college bas- public hearing to review the application must be received by Wednesday, March 9, 2016. as 8 minutes on their mobile de- sport for years. ketball for marketing. In 2011, it If a hearing is requested, notice of the scheduled date, time and location will be provided vice or computer. In March 2014, it replaced AT&T was the title sponsor of the “Carri- at least 10 days in advance. Submittals should be sent to Mr. Oliver Lindsay, Grant Manager, Detroit Transportation Corporation, 535 Griswold Street, Suite 400, Detroit, MI The product was introduced in as title sponsor of the PGA Tour’s er Classic” between MSU and the 48226 or 313-224-2160. Barring any changes made in response to the written November, and Quicken thought Quicken Loans National invitational University of North Carolina played comments, this document will become final. the timing with the Super Bowl tournament that has been played on the flight deck of the U.S. Navy made sense. at courses around Washington, aircraft carrier USS Carl Vinson. BUSINESS OPPORTUNITIES “The Super Bowl was staring us D.C. This year’s event, hosted and In 2014, Quicken was co-spon- JOB LAUNDROMAT - DOWNTOWN DETROIT - $225K Tiger Woods Foun- Berkshire Hath- TIME SHARE CONDO - NEW YORK, NY - $10K right in the face,” Farner said. organized by the sor (along with LAND CONTRACT & FINANCE OPTIONS AVAIL. Gilbert approved the Super Bowl dation, is at Congressional Country away’s Warren Buffett and Yahoo FRONT CALL LANAY FOR DETAILS ~ 313-964-6884 buy, he added. Club in Bethesda, Md. Inc.) of an NCAA men’s basketball MISCELLANEOUS The game was seen nationally by Quicken is the official mort- tournament bracket contest that MISCELLANEOUS an average of 111.9 million viewers, gage sponsor of the PGA Tour and would pay $1 billion to anyone NEED WAREHOUSING? giving it the third-best American TV senior Champions Tour. who correctly predicted the win- Plymouth & Livonia Area audience in history, CBS said. While upping its golf market- ner of every game. (No one did.) SURVEY • Cross-Dock Services • Trucking Services National commercial airtime ing, Quicken has reduced its mo- Sports marketing insiders • Diverse Supplier • Reasonable Rates during this year’s Super Bowl torsports involvement. have been impressed with ANALYZE Call 810-701-0833 sold for $4.6 million to more “We wanted to stay in NASCAR Quicken’s efforts. than $5 million, Advertising Age but also give ourselves the flexi- “They’re definitely going for the MATCH INVESTMENT OPPORTUNITIES reported. Buyers typically get bility to try some new things,” wow factor, which is smart,” said discounts for multiple buys, Farner said. Mike Dietz, president of Dietz INVESTMENT OPPORTUNITY Sports & Entertainment and often the deals include dig- Last year, Quicken dropped in Farming- Current partners seeking an owner/ ital and social media elements. sponsorship of Michigan Interna- ton Hills, which helps companies operator to buy into and run an upscale Quicken’s Super Bowl spot show- tional Speedway’s June NASCAR with sponsorships. coffee shop in S.W. Oakland Co. Great staff in place now with positive cash flow. cased the risk in financial services race, but it remains a sponsor Quicken’s contests also are a CrainsDetroit.com/JobConnect | Serious inquiries only: advertising: There was backlash, with Hendrick Motorsports on a lim- strategic tool, said Dietz, who has Email Inquiries to: mostly on Twitter, that Rocket Mort- ited race schedule. done prep basketball marketing POSITIONS AVAILABLE [email protected] gage could lead to a subprime crisis Quicken is the primary sponsor work co-sponsored by Quicken. Reference box #2001 in subject line like the one that fueled the last re- of the Charlotte, N.C.-based rac- “Collecting fan data and leads ENGINEERING cession — a criticism the lender has ing team’s No. 5 Chevrolet SS driv- seems to be an important part of Hitachi Automotive Systems Americas, Inc. faced for several years. en by Kasey Kahne for three 2016 their sports marketing strategy,” has a Sr. Engineer available in Farmington Hills, REAL MI: Plan, implement and conduct activities for Quicken’s social media team re- NASCAR Sprint Cup Series races. he said. “Having fans register to multiple projects to ensure goals or objectives are accomplished within a prescribed time frame by sponded with assurances that its Quicken previously sponsored win high-value prizes allows performing any combination of technical, program ESTATE mortgage practice follows all gov- Ryan Newman and his No. 31 Quicken Loans to capture fan in- management or mentoring activities. ernment guidelines. Chevrolet with North Carolina- formation.” Mail resume to: COMMERCIAL PROPERTIES Hitachi Automotive Systems Americas, Inc. Quicken believes sports brand- based Richard Childress Racing for The mortgage company also Attn: T. Menning, ing is the key to its target customers. two years. Before that, Quicken gets free brand recognition 34500 Grand River Ave., Farmington Hills, MI 48335. WOODHAVEN CONDOS “When you start looking at the sponsored Newman when he from Gilbert’s ownership of the Must ref job code HR2015-04 to be considered $625,000 client segment we want to focus on, drove for another North Carolina- Cleveland Cavaliers. He bought 6 Leased Units in a sports jumps out,” Farner said. based team, Stewart-Haas Racing. the NBA club in 2005 as head of POSITIONS AVAILABLE 65 Unit Community. Building More. Quicken is targeting adults Those were full-season deals. an investment group for $375 Great for Downriver Company ages 25-55 who are technological- Quicken has a presence in million, and the deal included a EASTERN MICHIGAN UNIVERSITY ly savvy in their daily lives. other sports, too. naming rights provision that re- Executive Director Jonathan Brateman “When they choose to take out In September 2013, Quicken branded Gund Arena as Quick- Government & Community Relations Properties, Inc (248) 477-5000 time to watch programming, they inked a deal with the Detroit Lions en Loans Arena. Ⅲ Eastern Michigan University, a metropolitan Bill Shea: (313) 446-1626 University serving over 22,000 students, seeks watch sports,” Farner said. to turn 62 seats in one section of an experienced government and community People typically refinance or the southwest corner of Ford Twitter: @Bill_Shea19 relations leader to serve as Executive Director, [email protected] buy a home every five to seven Field into the “Quicken Loans Government & Community Relations. www.bratemanproperties.com years, Farner said. Dream Seat” of black leather re- This position serves as the lead Government and Community Relations Official to ensure INVESTMENT PROPERTY “We view ourselves in somewhat cliners embroidered with the Eastern Michigan University is represented in all aspects of government and community of a unique situation from a service company’s logo. Large high-defi- BANKRUPTCIES FOR SALE - SHELBY TWP. - 5,715 S.F. Industrial. or product perspective. We’re deal- nition LCD televisions are mount- relations. 16 foot clear, two overhead doors, extensive floor This position also develops and maintains an drain system. One general and two private offices. ing with a mortgage,” he said. “You ed in front of each seat. The following business filed for effective federal, state and local legislative Broker/Owner 248-705-0835 have to be front-of-mind when they Quicken has exclusive access, protection in U.S. Bankruptcy network for the advancement of University and OFFICE SPACE make that decision.” distribution and branding for Court in Detroit Feb. 12-18. Under community initiatives and priorities. To learn more about the job and to apply Hence Quicken’s heavy spend- those seats under what amounts Chapter 11, a company files for re- BRIGHTON - GRAND RIVER FRONTAGE online go to: http://www.emich.edu/jobs. ing on marketing to get itself in- to a five-year lease, the team said. organization. NEW OFFICE SPACE - FOR LEASE grained in people’s minds for The seats are expected to be used St. Jude Nursing Center Inc., 721 2,000 - 32,000 S.F. Suites mortgage consideration. for employees and clients of Elmwood, Troy, voluntary Chap- Advertise your Chestnut Development, LLC Products and Services in 6253 Grand River, Brighton MI “If we’re not part of their con- Quicken and its sibling compa- ter 11. Assets and liabilities not STEVE GRONOW ~ 810-599-5147 sideration set, we may not get nies owned by Gilbert. available. Crain’s Detroit Business www.chestnutrealestate.com/chestnut-landing 20160222-NEWS--0018,0019-NAT-CCI-CD_-- 2/19/2016 5:43 PM Page 1

18 CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016

“I like thoroughbreds better. It’s s

of Ann Arbor-based Republic Ban- CAMPBELL corp to Flint-based Citizens Banking FROM PAGE 1 Corp. on June 27, 2006 panding its full-service branch net- It only took a year to show that work across Southeast Michigan McEvoy nailed that one. And that Jerry and into Ohio. In five years, the Campbell was the smartest banker in bank raised $75 million in capital. Michigan or the luckiest. Or both. Campbell described himself then At the time of the deal, the Great as a contrarian, and would brag Recession was a tsunami yet to be about what he considered his detected, and the Republic deal was bank’s “contrarian nature.” praised as a merger of equals, of Indeed. Republic was headquar- banks with market capitalizations tered in a big, stately house on a tree- of $1 billion each that would com- shrouded lot on the outskirts of down- bine the commercial lending ex- town Owosso. A landmark in that city, pertise of Citizens with the residen- it had once been the home of an afflu- tial mortgage expertise of Republic. ent local dentist with the last name of Early in June 2007, William Hart- Smith. After he died, it went through a man, Citizens’ CEO, told Crain’s the handful of owners, and by the time acquisition was going to be a Republic was launched, had been a springboard to dramatically grow four-unit site for males on welfare. his bank’s footprint in the Midwest. THE NEWS HERALD Republic bought the house and 4 “The merger with Republic posi- A demolition crew takes down remnants of the failed Pinnacle Race Course last month. Sterling Heights-based Roncelli Inc., which acres of land for $90,000. As Campbell tions us to be better acquirers. More was the construction manager when Pinnacle was built, got the demolition contract, too told a reporter in 1994: “Four kitchens, capable acquirers,” he said. four bathrooms. It wasn’t pretty. It Later that month, though, on will be life after that.” — Jerry Camp- forth, but I’ll be spending 80 per- Jerry Campbell’s grandfather and smelled a little. But a little paint, a little June 27, 2007 — exactly one year bell, speaking of the mortgage busi- cent of my time there. The bank is father both owned standardbred imagination and a lot of wallpaper ... .” after the acquisition of Republic ness in 1994 my No. 1 future endeavor.” horses — the trotters and pacers Why such an unlikely building? was announced — Citizens stunned What William Hartman didn’t Campbell might soon wish it had who are the stars of county fairs “I’ve lived in this town and I like it the market by announcing it had re- know when the succession plan was been his only endeavor. around the state, the working-class here,” he said. “We wanted to have a viewed $750 million of Republic’s announced was that the wheels were David Sowerby, chief market cousins of the bigger, faster thor- bank here. We wanted to have some- loans, would take a charge for loan in motion for none of it to happen. strategist in the Bloomfield Hills office oughbreds. thing that was distinct, that had a losses of $30 million to $35 million, The mortgage market had of Loomis Sayles & Co. LP, said Camp- For 75 years between them, the good image.” and downgraded the rating of 180 crashed, and Jerry Campbell and bell chafed at the blame aimed at him Campbells served as the racing sec- Eight years after the bank’s loans worth $145 million. Dana Cluckey were about to prove by Hartman and wanted to prove he retaries at the Allegan County fairs. founding, Republic’s headquarters It instantly became clear that there would be a life after. could again build a successful bank “I like thoroughbreds better. It’s branch still had no drive-thru ac- Campbell had sold Republic at the In April 2007, just as Citizens was from scratch, and to do it with key something about the speed,” cess. It didn’t even have an ATM. absolute top of the market, at a time delving into the Republic loans, the members of his Republic team. Campbell said in a profile in the “Everything we’ve done has been when no one could have imagined first branch of the Community Nation- Nearly nine years after the open- Nov 18, 2006, issue of The Blood- contrarian and unconventional,” that a movie about a collapse of a al Bank of the South opened in Orlan- ing of the first branch in Orlando, Horse magazine. “So about 40 years he said. housing market would one day get do, Fla., soon after Campbell; Cluck- Cluckey is vice chairman of the ago, when I earned enough money, In the 1990s, as other banks nominated for an Academy Award. ey; Jack Krasula, who was the owner HomeBanc board; Debra Hanses I bought my first broodmare and branched into wealth management It wasn’t just mortgage loans that of the Southfield executive-search Novakoski, head of HR at Republic, bred her. I started a home-grown and trust services, selling mutual went bad in the Republic portfolio. firm of Trustinus LLC; and a handful of is an executive VP at HomeBanc; Jef- program and have been doing it funds and lobbying to sell insurance, There were millions in commercial partners from Southeast Michigan, frey Saunders, the CFO at Republic, ever since.” Republic stayed focused on mort- loans tied to housing. raised $49 million to launch a is CFO; and Stuart Forsyth, regional Campbell Stables LLC was in Grass gages. By 1994, the bank had expand- “Citizens had to write off all of Tampa, Fla.-based bank-holding president for commercial lending at Lake, near Jackson. At the time of ed into 16 states, but it had full banking Republic’s construction loans on company, CNBS Financial Group Inc., Republic, is chief lending officer. the Blood-Horse article, it had about branches only in Michigan and Ohio. It big houses out in Novi that never later renamed HomeBancorp Inc. “Campbell was regarded as a true 90 horses. had mortgage offices in the other got finished,” said McEvoy, now an The private placement to raise entrepreneur in his Republic days, “I have the privilege every morn- states and had become one of the 30 analyst with Little Rock, Ark.-based that money included some promi- and you have to give him credit for ing of getting up and looking out in largest loan originators in the U.S. Stephens Inc. nent Detroit-area investors. (Mary replicating Republic again,” said all directions and all you see are “We take somebody with a little Those losses were the tip of the Kramer, the publisher of Crain’s, Sowerby. horse paddocks,” said Campbell. white house and green shutters, a iceberg. bought 7,500 shares of stock, which Campbell’s venture has thrived, Campbell’s best horse was Post It, a nice little garage attached, and we Numbers once inconceivable be- she retains.) even if growth has been slower than 2-year-old filly he bought in 1994. allow them to borrow for 15 or 30 came painfully routine — Citizens Larger investors who became envisioned. The company has 14 She won five races in 14 starts and years cheaper than a Triple-A cor- recorded net losses of $405 million board members included Bob branches with assets approaching $1 won $200,710 in her career. poration. That’s our whole busi- in 2008, $534 million in 2009 and Liggett, then owner of Warren-based billion. Republic annually made the In 1998, after Ladbroke Detroit ness,” Campbell said at the time. $314.6 million in 2010. Big Boy Restaurants; Kathleen Mc- lists of best places to work in Michi- Race Course in Livonia announced it Analysts urged the bank to diver- What happened — loans gone bad Cann, then senior vice president of gan; last year American Banker was shutting down as Michigan’s sify, and they kept telling Campbell in a hurry — happened to everyone. Detroit-based Soave Enterprises LLC named HomeBanc as the second- only thoroughbred racetrack, it would be easier to pay more at- Twelve community banks in South- and now CEO of Romulus-based Unit- best bank to work for in the U.S., and it Campbell bought Muskegon Race tention to the bank if he’d move the east Michigan would be shut down by ed Road Services Inc.; William Rands III, has the highest rating of five stars from Course and converted it from a stan- headquarters to Ann Arbor. state and federal regulators. and Art Van Elslander, founder of BauerFinancial Inc., a Fort Lauderdale, dardbred track to a thoroughbred Eventually, he decided it was all At the time the Republic sale was Warren-based Art Van Furniture Inc. Fla., rating service. track named Great Lakes Downs. right to say the bank was co-head- announced, Citizens traded at $27.03 All but Liggett have subsequently Meanwhile, Hartman’s growth “It wasn’t our goal to open a quartered in Owosso and Ann a share, and the deal valued Republic left the HomeBanc board. strategy for Citizens Republic was track. We really opened a track just Arbor. By the time the bank was shares at $13.86. By May 2011, Citi- Campbell stayed on as chairman abandoned as the bank hemorrhaged to preserve thoroughbred racing in sold in 2006, it was calling itself an zens Republic’s market cap had fallen of Citizens Republic until April red. On Jan. 22, 2009, the bank report- Michigan,” he said. Ann Arbor bank. from $2 billion to $340 million, and 2008. Cluckey left Citizens at the ed it lost $405 million in 2008. On Jan. The next year, he married Lisa, By then, Campbell had long been a its share price had fallen below $1. end of 2007. 23, it announced that Hartman was who was his horses’ trainer. star on the Michigan banking scene. The merger succession plan called According to filings, Campbell retiring, effective in eight days. “I trained his horses for at least “He was a great marketer. He un- for Campbell to be chairman of the got $1.78 million when Citizens ac- “My retirement has been planned 12-15 years prior to getting mar- derstood the customer, and he was a combined entity; for Dana Cluckey, quired Republic and an additional and is voluntary and is something ried,” Lisa told Blood-Horse. “He dealmaker,” said David Provost, CEO Republic’s president, to be president $671,000 in severance pay. By the I’ve been thinking about. I’ve been tells everybody he married me to and president of Talmer Bancorp Inc. and COO; and for William Hartman to end of 2007, Campbell had also sold looking for the right time to step save money … but I always say, ‘You Bank dealmaking remain CEO and to replace Campbell 254,206 shares of Republic stock. aside,” Hartman told Crain’s with a found out how much I liked you be- as chairman in 2008. “We plan to open 50 branches in straight face when asked if he had cause I wasn’t charging you full rate, “Republic made a lot of money off That was the plan, anyway. the next five years, which is aggres- been forced by the board to retire. was I?’ ” the last mortgage cycle, but … I think Sunnier climes sive even by Florida standards,” said Racing after a dream Great Lakes Downs struggled they saw the next couple of years Campbell, chairman, president and with attendance and betting vol- were going to be tough” — Terry “Our pipeline is the biggest it’s CEO of the bank-holding company. “I know Jerry always dreamed of umes in its first year of 1999. A year McEvoy, an equity analyst for Op- ever been. It shows no signs of slow- “I’ll be transitioning myself to the winning the Kentucky Derby.” — after it opened, Toronto-based penheimer and Co. Inc., on the sale ing up. Someday, it will. And there Florida venture. I’ll be back and David Sowerby Magna Entertainment Corp. bought 20160222-NEWS--0018,0019-NAT-CCI-CD_-- 2/19/2016 5:43 PM Page 2

CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016 19

’s something about the speed.” Jerry Campbell

the track, with the Campbells taking would include 200,000 square feet of 11 days before the press release were restored to the schedule. That acquisition came after the stock in Magna and Jerry serving as retail and a 60,000-square-foot club- from the governor’s office, Claire In August, news broke that Pin- bank filed suit over the loan, made Magna’s CEO for six months in 2000. house with 20 private suites and McKenna, corporate counsel for the nacle hadn’t paid a total of $1.46 early in 2009 to Campbell and Krasula. “It sort of got away from us,” boxes looking down on an outer dirt MEDC, warned in an email that million in property taxes for 2009 After he bought the note, Krasula be- Campbell told Blood-Horse about track of a mile and an eighth in length Post It Stables had not filed its 2008 and 2010. Because the land for the came Campbell’s biggest creditor and, what it had been like running a and an inner turf track of a mile. annual report with the Michigan De- racetrack had previously been according to Oakland court records, racetrack. “I had never run a track. The complex, to be built in partment of Labor and Economic owned by the county, it hadn’t been reached an agreement with Campbell … Wven well-versed in how purse stages, would include a picnic area, Growth. on the tax rolls. After it was sold to in August 2011 to settle the debt for $6 pools were created, and how the eight or nine restaurants, a movie “They are supposed to report to Post It Stables, county and township million in monthly installments. track got paid and how the horse- theater, a 12,000-square-foot corpo- us that they are in ‘good standing,’ officials had forgot to put it back on Campbell paid about $1.2 million, men got paid, and where the risks rate pavilion, space for educational which they probably aren’t if they the rolls and hadn’t sent out bills. but has been in default since the and opportunities were.” and equestrian events, 30 barns are late on their filing,” she wrote. News also broke that the track agreement increased his payments Campbell likened owning a race- with 1,200 horse stalls, and quarters And the previous May, before the was $150,000 in arrears on its con- last September to $29,531 a month. track to owning a boat or a plane. for 100 grooms. track even opened, McInerney, de- tract for township police protection, “I have no further material assets “Your two happiest days are the day The plan was to spend $23 mil- spite his rosy forecasts to the media and that township-provided water that can be liquidated for (Krasula’s) when you buy it and the day when lion on construction in service had been cut off benefit,” Campbell said in an affidavit you sell it,” he said. 2008 and $50 million in to Pinnacle for a while in in September. “I may receive certain In 2006, after its racing career was 2009, and Pinnacle was ap- the winter because of an bonuses and/or additional equity in- over, the Campbells bought Fire proved for 63 days of racing unpaid bill. terests in the future, at which time I Blitz, a horse with what might have in 2008. DTE Energy had also may have additional funds available been the best bloodlines in Michi- On April 3, 2008, the briefly cut off electricity to to pay towards the judgment.” gan, from Stronach Stables in Ken- Wayne County Board of the track over unpaid Krasula’s attorneys responded in a tucky, stables owned by Magna’s Commissioners approved bills. On May 5, 2011, Pin- motion filed on Jan. 12, the same day founder, Frank Stronach. the sale of the land to Post nacle, which had been Campbell asked for bankruptcy pro- Fire Blitz had impeccable lineage. It Stables for $1. The deal searching in vain for mi- tection: “Campbell is doubling down He was sired by Storm Cat, whose required the creation of at nority investors, an- on his longtime strategy, which is to ig- stud fee at his peak was $500,000. least 1,100 jobs by 2014; nounced that despite nore Post Note, ignore the judgment, Storm Cat, in turn, was sired by a son failing that, Campbell being approved for 84 ignore this court and hope there are of the legendary Northern Dancer, would have to pay the days of live racing for the no consequences. … He has no re- and his dam was sired by the even county $50,000 an acre. upcoming season, it had spect for this court’s orders, and no in- more legendary Secretariat, arguably On April 4, there was a surrendered its racing li- tention of abiding by them.” the best racehorse of all time. ceremonial groundbreak- cense to the state. How bad had things gotten be- A Pinnacle that wasn’t ing. On July 18, on sched- Tragedy and tween the former colleagues? They ule, the racetrack opened, bankruptcy were arguing over how much money “Entrepreneurs either have the attracting a crowd of about Campbell should be able to give his knack for getting out at the right 9,500. On Feb. 21, 2012, a wife from his federal tax return. time, or they blow up big time.”— Conflicts of barn fire killed 27 horses The filing said that Campbell had bank analyst Terry McEvoy opinion at MEDC at Campbell Stables, in- reneged on a promise to give Krasu- Or in Jerry Campbell’s case, both. cluding Fire Blitz, the 13- la 65 percent of his 2014 federal tax Having resigned from the Citi- On Sept. 15, 2008, Crain’s year-old horse with the return. Krasula’s attorneys castigat- zens Republic board in April 2008, reported that Pinnacle said great bloodlines. The fire, ed Campbell for claiming that under Campbell was now a Florida banker, it had surpassed the daily which was ruled an acci- Florida law he could evenly split his but through Campbell Stables, he wagering average needed to Jerry Campbell was featured on the cover of Florida Banking dent, rose 100 feet into return with his wife, even though he remained a Michigan entrepreneur, earn a profit despite a sharp magazine in March of 2012. the sky. It took 25-30 fire- had signed the check in Michigan one who was sure he could save the dropoff in daily attendance. fighters from surround- and deposited it in a credit union — state’s thoroughbred industry. “From a financial standpoint, we’re about the track’s future, had painted ing communities to put it out. not a bank — in Michigan. Ladbroke DRC in Livonia had ahead of where we thought we would a much less optimistic picture in The Campbells, despite the loss of Included in the filing was part of closed in 1998, Saginaw Harness be,” said track President Michael correspondence to county officials. the track and the horses, hadn’t soured a transcript from a deposition with Raceway closed in 2005, and Great McInerney. McInerney wrote he didn’t expect on thoroughbreds. On March 7, 2014, Lisa Campbell. Lakes Downs was struggling. In On Sept. 23, Gov. Jennifer the track to break even until 2014 and a press release announced the forma- “Where is that cash (from the re- 2007, there was $14.7 billion wa- Granholm’s office issued a press re- even then would only “achieve very tion of a Florida company called Team fund) today?” gered on thoroughbred races in the lease saying that the Michigan Economic small returns on our investment.” Equest LLC, with Lisa Campbell serving “My half is at home.” U.S., just $2 million in Michigan. Development Corp. had approved a In April 2009, as the track was as chairman of the board and Jerry as “So, Jerry splits the refund into Before he resigned from Citizens, state tax credit valued at $982,000 over preparing to launch its second sea- a member of the board. two pieces?” Campbell began the process of 10 years, a new tax credit for compa- son, Lisa Campbell said trouble get- The aim was to attract new owners “We signed it, deposited it and building what he envisioned as the nies that serve as tourist attractions. ting bank loans had halted plans to to racing, in part by offering fractional then I pulled my half out.” Churchill Downs of the Midwest, a In addition, the company was build the clubhouse and 4,000-seat ownership of horses. The news re- “And then what happened to the $142 million racetrack on 320 acres approved for a state brownfield grandstand. lease said that Team Equest would other half?” at Pennsylvania and Vining roads in credit of $5.3 million. The brown- “It’s a tough time, and banks don’t focus on the purchase, conditioning “I don’t know what Jerry’s done Huron Township, a mile southwest field credit reversed earlier opposi- want to lend out money on gam- and racing of horses at major tracks in with the other half.” of Detroit Metropolitan Airport. tion from the MEDC that said the bling opportunities,” she said, Florida, Kentucky and the East Coast. The dream comes Magna Entertainment had applied credit was intended only for urban adding that her husband and Jack “I have been in the horse owner- crashing down in 2002 to build a track on the site. But areas, a decision questioned by Krasula had invested most of the $29 ship and racing business for many in August 2007, Magna said that, county executives and Granholm. million already spent on the track. years, and we have had our share of “When you fly into Metro Airport plagued by losses, it had dropped In all, the track was approved for up “At some point, you run out of cash- success,” Lisa Campbell said in the from the southwest, if you’re sitting plans for the track. It had been award- to $48 million in credits over 30 years. flow money. Jerry and Jack keep dig- release. “I am ready to step up my on the left side of the plane, you fly ed a license in 2005 but told the state it Wayne County, meanwhile, made ging deeper in their pockets.” involvement to a higher level in the right over the racetrack, and it’s a was relinquishing it. Moreover, Magna $26.6 million in sewer and other infra- If the Campbells thought cash flow sales ring and at the track. I also constant reminder of a deal gone said it would shut down Great Lakes structure improvements near the site. was a problem then, they were about want to share this experience with bad.” — David Provost Downs when the season ended in No- What wouldn’t be known for more to be blindsided by the state govern- others of like interests and passion No more. On Jan. 25, the main vember. than two years is that despite MEDC ment. After approving millions in tax so that it can be fun, as well as eco- pavilion at Pinnacle was torn apart In September 2007, Crain’s broke approval for the credits, there were credits for the track the previous fall, nomically rewarding.” by excavating equipment. The track the news Campbell wanted to fill already serious doubts by MEDC and approving 82 racing days for the On Jan. 15 this year, Crain’s reported was being leveled and its pieces Magna’s void. In October, Campbell staffers about Pinnacle’s viability. 2009 season, on June 2, the racing that Jerry Campbell had filed for vol- carted off, a field of graded dirt to be confirmed he was in talks with On Oct. 10, 2010, Tom Gantert, a commission dropped a bombshell: untary Chapter 11 bankruptcy protec- left as the only reminder of what the Wayne County to buy or lease the capital correspondent for Michigan Because of commission budget cuts tion in Florida. MEDC said was going to take Wayne same land for a track that would be Capital Confidential, a daily news ordered by Granholm, Pinnacle’s rac- Campbell, who has a salary of County into the global economy. called Pinnacle Race Course. Fittingly site for the conservative Mackinac ing schedule was being cut in half. about $290,000, said he owed about Sterling Heights-based Roncelli named, if all came to fruition. Center for Public Policy, wrote a story The state required commission $9 million, including $4.8 million to Inc., which was the construction Lisa was president and Jerry was based on 500 pages of documents officials to be at tracks on race days, Krasula, whose Post Note LLC had ac- manager when Pinnacle was built, chairman and CEO of a company he obtained through a Freedom of and by cutting Pinnacle’s schedule, quired a $5 million construction got the demolition contract, too. Ⅲ called Post It Stables Inc. It would Information Act request. it would save $154,000 in costs. loan from Bloomfield Hills-based Tom Henderson: (313) 446-0337 build and operate the project, which He wrote that on Sept. 12, 2008, Later in June, all but eight days PrivateBank. Twitter: @TomHenderson2 20160222-NEWS--0020-NAT-CCI-CD_-- 2/19/2016 5:13 PM Page 1

20 CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016

SCAM FROM PAGE 1

property fraud task force a decade ago. The task force has resulted in several convictions and returned more than $500,000 to victims last year, he said. “We can’t stop” scams, Young- blood said. “When people hear you can make 200 percent on your dollar, I think people are motivated by that and, perhaps, a little bit of greed.” And ignorance: Many foreign investors who lost money say they re- PHOTOS BY MIKE LEWIS II gret never visiting Detroit or not These homes in northwest and southwest Detroit were sold to investors who lost more than $20 million in an international telemarketing scheme. conducting more research. The alleged scams date to 2009 in a life of cons for Arsenault, 57, ac- court records. Arsenault solicited only about nine “If anything, it was poorly run, and involved homes throughout the cording to associates and court The alleged conspiracy involved investors and was paid $410,000 but there was no fraud whatsoever city and in nearly every neighbor- records. Arsenault and several companies, during the alleged conspiracy. John- that I was aware of,” he said. “I was hood as the Great Recession sent Nicknamed “Joey Ace,” Arsenault including Chase REO Group, Hartwell ston expects to reach a plea deal just an employee, and I always did foreclosure totals in Detroit soaring is a former Hollywood bit player Mortgage Group and U.S. Mortgage with prosecutors, according to a business ethically.” and depressed already-low housing who made cameos in the 1997 com- Specialists. filing. Sameer Beydoun, Makki and values. edy “Orgazmo” and a handful of One of the investors allegedly so- “He is a classic sociopath and has Messics did not return messages The pitch other films. licited by Arsenault’s group was no remorse about who he hurt,” from Crain’s seeking comment. “He’s always been a conniver, al- William Addy, 70, a “semi-retired” said brother Christopher Arsenault, Hong Kong banker Nelly Roque- In December 2009, a tan Holly- ways,” his brother Christopher Ar- insurance broker from Colorado who accuses his brother of stealing fort paid $49,500 to a Metro affiliate wood actor named Joseph Arse- senault told Crain’s. “His whole life Springs, Colo. the AbSolo invention. “He belongs for a colonial on the city’s west side nault teamed with 15 colleagues in has been questionable.” Addy says he was urged to invest in prison and should never get out. in May 2012. Months earlier, the a scheme to buy thousands of Growing up in the 1970s in New in bank-foreclosed homes that were He hurt a lot of people.” Dearborn affiliate had purchased homes in Southeast Michigan, ac- York in the Long Island suburb of appraised at about $30,000 but On Dec. 8, the same day Arse- the home from the Wayne County cording to federal prosecutors. Port Washington, the brothers could be purchased for about nault’s co-defendant, Florida resi- tax auction for $6,901. The team was based in New York would collect old newspapers and $4,000, he said. dent Joseph Haden, was sentenced Roquefort, 36, stopped receiving and Florida, where members drop them off at a recycling center “The pitch was there were buyers to more than four years in federal rent payments last year. When rent allegedly worked out of telemarket- for cash. Before the brothers arrived in China and other places that were prison for his role in the alleged was paid, it never covered alleged ing call centers. The telemarketers at the recycling center, Joseph Arse- interested in investing and didn’t conspiracy and ordered to pay vic- repair bills, Roquefort said. After bought homes, in some cases nault would dunk the papers in mind holding onto the homes until tims more than $17.8 million, FBI contacting a real estate agent to dis- through the Wayne County tax auc- water so they weighed more, and the economy picked up again,” special agents in Detroit quietly pose of the property, Roquefort dis- tions for $500 and pitched investors fetched more money, his brother Addy told Crain’s. “They showed me started investigating a separate case covered the home was stripped and what were described as underwater, said. beautiful homes.” involving the largest buyer of single- rendered almost unsellable. bank-owned homes, according to Joseph Arsenault worked in Man- Addy cashed out his retirement family homes in Detroit from 2010- Roquefort unloaded the home court records. hattan in the 1980s as a stock broker account and borrowed money on a 2013. for $20,000 in The pitch before moving to Los Angeles in the credit card so he could invest about On that day, agents executed a July. lured more than early 1990s. $120,000 in approximately 13 search warrant for the contents of “Definitely 290 people in 46 Arsenault was not a serious actor, homes, most on the city’s west side. email accounts belonging to four not going to in- states and Cana- his brother said. All were purchased in January 2011. officials with Metro Property Group vest in Detroit da, who bought “I think it was more about getting The homes were transferred to LLC, according to an unsealed ever again, like a the homes for women,” Christopher Arsenault shell companies controlled by the search warrant obtained by Crain’s. lot of foreign in- between $7,500 said. telemarketers and left to rot, prose- On Dec. 16, the FBI received from vestors, I sus- and $15,000. Rose Mary Judy worked for Arse- cutors said. Google a blue Toshiba hard drive pect,” Roquefort Telemarket- Joseph nault at a Florida commodities firm Addy said he called the FBI in containing records for email ac- Steve Graysmark: wrote in an ing operators Arsenault: From and a fitness company that sold the 2012 after he never received income counts belonging to Metro CEO “Very stupid email. made it appear Hollywood to AbSolo workout machine. She re- from his investment. Sameer Beydoun of Dearborn and purchase” cost him Steve that the homes housing. called Arsenault as a flashy dresser “I started doing more research company officials Ali Beydoun, about $130,000. Graysmark, a re- were flipped to who drove a black Mercedes-Benz and ran some of the addresses. One David Makki and Kathy Messics. tired London po- hedge funds and foreign buyers for convertible and told anyone who was an alley, there was nothing on The focus of the FBI investigation lice officer, says he lost about a profit, prosecutors allege. would listen about his acting career, it,” Addy said. “Quite a few of the is unclear, but the seizure came $130,000 after buying six homes Instead, the homes were trans- she said. homes were in pretty bad shape.” three months after a federal judge from Metro, lured by the prospect of ferred to shell companies controlled He stocked his office with copies Through March 2014, the alleged ordered Metro and three other firms profiting from Detroit’s rebirth. by the telemarketers. There were no of the films and handed them out to conspiracy targeted about 300 vic- to pay $625,000 to a group of over- Graysmark, 55, said he is prepar- profits, and victims lost more than employees, she said. tims who lost more than $20 mil- seas investors. ing a lawsuit along with nine other $20 million in what has been la- “He was very charismatic, very lion. In all, the alleged scam in- The investors accused Metro and investors. beled one of the most significant outgoing personality in the way he volved more than 2,000 homes, others of orchestrating a multimil- “It was a very stupid purchase,” telemarketing scams in metro De- talked and carried himself,” Judy, according to prosecutors. lion-dollar scheme that defrauded he wrote in an email to Crain’s. “I troit history, prosecutors said. 53, said. “He’s very smart. I don’t For Addy, the ensuing years have foreign investors in Detroit real did get someone to look at the Many victims were left with virtu- know if ‘megalomaniac’ is a good been filled with foreclosure, the end estate. properties before I bought them but ally worthless property saddled word, but somebody called him of his semi-retirement and a bitter Metro purchased thousands of they looked at them and said they with back taxes, liens and blight no- that a long time ago.” feeling about Detroit. foreclosed homes — largely unin- were OK. However, they were not.” tices, prosecutors said. One investor Arsenault ran into trouble in “Nothing personal against the habitable — for $500 to $5,000. “I would never invest in Detroit lost almost $1 million. Florida. city,” Addy said, “but this just rein- Along with others, Metro profited again and wouldn’t accept any Arsenault and others used In August 2009, Arsenault was or- forced the fact that struggling areas by duping investors into buying the property even if it was a gift. This homes in struggling neighborhoods dered to pay a $415,000 penalty to are not good areas to do business in.” homes for as much as $50,000, ac- has adversely affected the recovery like “Monopoly game board pieces the U.S. Commodity Futures Trad- Arsenault was indicted in No- cording to court records. of Detroit, and it’s a shame.” that they could sell for quick ing Commission after his firm Ster- vember 2014 alongside 15 others in Metro and others fraudulently The alleged scams have damp- money,” prosecutors wrote in a ling Trading Group Inc. was accused of connection with the alleged con- marketed the homes as refurbished ened but not killed interest in court filing. “As a result, communi- engaging in speculative trading of spiracy. He was captured in Thai- and rented, failed to manage the Detroit. ties have been destroyed as aban- illegal, foreign, currency futures. He land in March 2015 and returned to properties and billed the investors “There’s a little bit of buying from doned homes add to the blight and also was barred from “directly or the U.S. for phony repairs and management foreign investors, but I’m also see- danger for the neighbors who re- indirectly cheating or defrauding or He is being held at a federal expenses, according to the lawsuit. ing people who are priced out of main.” attempting to cheat or defraud prison in Milan and faces up to 20 Ali Beydoun, the company’s for- markets like New York and Miami,” Arsenault participated by posing other persons.” years in prison and a $250,000 fine if mer sales director, was unaware McLeskey said. “As the scams have as a foreigner named Kenneth Frue Four months later, however, in convicted of wire fraud and con- that the FBI seized his email ac- come into the limelight, the mes- who was interested in buying the December 2009, the alleged scheme spiracy to commit mail and wire count. Beydoun said he left Metro sages now is ‘buyer beware.’ ” Ⅲ investors’ homes, prosecutors said. involving Detroit homes was up fraud. two years ago and the company is Robert Snell: (313) 446-1654 The housing scam was the latest and running, according to federal His lawyer Dennis Johnston said defunct. Twitter: @robertsnellnews 20160222-NEWS--0021-NAT-CCI-CD_-- 2/19/2016 4:45 PM Page 1

CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016 21 CRAIN’S UNITED WAY DETROIT BUSINESS FROM PAGE 3 “If they are funding those fewer programs on a www.crainsdetroit.com bigger scale, I think that’s a good thing. ... It Editor-in-Chief Keith E. Crain priorities around the agencies Group Publisher Mary Kramer, allows you to do more things ... and serve more (313) 446-0399 or [email protected] most closely aligned with its focus Editor Jennette Smith, (313) 446-1622 or areas and exhibiting high levels of people.” Heather Rae,president and CEO,Common Ground [email protected] Director, Digital Strategy, Audience Development excellence. Nancy Hanus, (313) 446-1621 or United Way will look for ways it [email protected] Managing Editor Michael Lee, (313) 446-1630 or can help nonprofits that lose fund- bigger scale, I think that’s a good million in total revenue and an been leading in 15 area high schools [email protected] ing, Gray said, such as providing thing. ... It allows you to do more equal amount in expenses. with $27 million in funding from Managing Editor/Custom and Special Projects technical assistance for grant writ- things ... and serve more people.” Its audited financials for fiscal the General Motors Foundation that Daniel Duggan, (313) 446-0414 or [email protected] ing or data collection. United Way plans to continue to 2014 reported total revenue of $53.4 runs through June 30. Assistant Managing Editor Kristin Bull, The funding shifts will require fund other programs that fall under million, compared to total revenue As Crain’s reported in June 2013, (313) 446-1608 or [email protected] News Editor Beth Reeber Valone, (313) 446-5875 “hard-nosed decision-making that the three core areas of basic needs, of $42.9 million a year earlier and United Way made some headway in or [email protected] could be subject to gnashing of financial stability and educational $44.1 million in 2012. improving graduation rates through Senior Editor Gary Piatek, (313) 446-0357 teeth and criticism,” he said. “But preparedness as part of the com- Net revenue from its annual things such as improving absen- or [email protected] Research and Data EditorSonya Hill,(313) 446-0402 we will forge ahead, because we munity impact model it shifted to campaign increased to $28.3 teeism rates and addressing behav- or [email protected] have to make more progress.” eight years ago. And it will continue million in 2014 from $24.3 mil- ioral issues. And high college and Editorial Support (313) 446-0419; YahNica Craw- ford, (313) 446-0329 “We need to invest more heavily to fund and operate ancillary, sup- lion the year before and $23.8 community college acceptance Newsroom (313) 446-0329, FAX (313) 446-1687 , ... in the programs we believe have portive programs such as the 211 million in 2013. rates were up. TIP LINE (313) 446-6766 the most likelihood of success ... fit health and human services hotline, United Way ended 2014 with an “On the other hand, those things REPORTERS within (our) wheelhouse ... are Gray said. excess of $7.5 million, following don’t improve your ACT work all Jay Greene, senior reporter Covers health care, in- more easily explained to the public While the three lead program losses of $2.1 million in fiscal 2013 that much,” Gray said, noting the surance, energy, utilities and the environment. (313) 446-0325 or [email protected] and easier to raise money for, at- areas are more straightforward and $751,590 in 2012. work was expensive, with no corre- Chad Halcom Covers litigation, the defense indus- tract volunteers to and advocate than some of the complex pro- Crain’s Detroit Business Publisher lation between the amount invest- try and education. (313) 446-6796 or [email protected] for,” he said. grams United Way is funding, “the Mary Kramer is a member of United ed in each school and the improve- Tom Henderson Covers banking, finance, tech- The more quickly United Way means for identifying success Way’s board. ment in graduation rates, and had nology and biotechnology. (313) 446-0337 or makes decisions about which may be a little harder to under- inherent obstacles such as transient [email protected] Leading efforts Kirk Pinho Covers real estate, Oakland and Ma- agencies will lose funding, the stand,” Gray said. students and shifting priorities with comb counties. (313) 446-0412 or [email protected] better, said Heather Rae, presi- There’s not been a high level of Going forward, United Way’s lead principal turnover. Bill Shea, enterprise editor Covers media, dent and CEO of Bloomfield Hills- analysis done with all of the data early childhood program will build United Way will continue to work advertising and marketing, the business of sports, and transportation. based Common Ground, which is United Way is collecting, he said. To on earlier efforts and focus even in certain high schools in the region (313) 446-1626 or [email protected] operating on an annual budget of help on that front, United Way has more on getting children ready for and with local graduates as it shifts Robert Snell, reporter Covers city of Detroit and regional politics. (313) 446-1654 or just over $9 million and received a contracted its former research di- kindergarten, Gray said. to a focus on college and career [email protected] $63,000 grant this year from Unit- rector, Kurt Metzger, who founded A second lead program focused readiness, said Christopher Perry, Lindsay VanHulle, Lansing reporter. (517) 657- Data Driven Detroit 2204 or [email protected] ed Way to support its youth shel- , to create “a best- on child hunger/food instability will chief marketing and corporate de- Dustin Walsh, senior reporter Covers the busi- ter in Royal Oak. in-class data unit” that can analyze build on the “Meet Up and Eat Up” velopment officer. ness of law, auto suppliers, manufacturing and steel. (313) 446-6042 or [email protected] “Any of the programs that are data it collects to communicate im- summer food program United The focus will be less on gradua- Sherri Welch, senior reporter Covers nonprofits, winding down need that time to be pact, Gray said. Way launched in the region several tion rates and more on creating services, retail and hospitality. (313) 446-1694 or [email protected] able to transfer people to other The finances years ago, with a target of assuring pathways to careers and college by services” or to find new funding for that children can access three meals providing assistance in choosing ADVERTISING them, she said. United Way has not yet posted its a day, 365 days a year, he said. and applying for college, appren- Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Rae said she hopes that Common full audited financials for fiscal 2015 The third lead program, which ticeship or training programs, Senior Account Executive Matthew J. Langan Advertising Sales Catherine Grace, Joe Miller, Ground won’t be among those to ended June 30 on its website, but in will focus on college and career among other things, he said. Ⅲ Sarah Stachowicz lose funding. “But ... if they are a snapshot provided in its annual readiness, is an evolution of the Sherri Welch: (313) 446-1694 Classified Sales Manager Angela Schutte, (313) 446-6051 funding those fewer programs on a report for last year, it listed $57.1 turnaround work United Way has Twitter: @SherriWelch Classified Sales Lynn Calcaterra, (313) 446-6086 Events Manager Kacey Anderson Creative Services Director Pierrette Templeton fers cybersecurity training and fense capabilities into those hands.” Senior Art Director Sylvia Kolaski “This is right Marketing Coordinator Ariel Black CYBER certification as well as product The previous hubs, which have Special Projects Coordinator Keenan Covington FROM PAGE 3 testing and research space on in- within Merit’s been more education-focused, have Sales Support Suzanne Janik, YahNica Crawford dustrial control systems security. trained hundreds of Michigan pro- Editorial Assistant Nancy Powers mission to build a Production Manager Wendy Kobylarz plan to conduct private and secure Merit Network and the state fessionals in cyberdefense since the Production Supervisor Andrew Spanos testing on the Cyber Range hub at opened the first Cyber Range hub at community and a Eastern Michigan opening in 2012, Velocity next month, but declined Eastern Michigan Adams said. The Velocity range could CUSTOMER SERVICE workforce.” Main Number: Call (877) 824-9374 to elaborate. University in late be a kind of template or prototype or [email protected] The local hub will focus heavily 2012. Since then Joe Adams, vice president of research model for more industry-focused Subscriptions $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. Outside on the defense, homeland security other hubs have and executive director of the Michigan hubs that Merit Network hopes to U.S.A., add $48 per year to out-of-state rate for sur- and advanced manufacturing in- opened at Self- Cyber Range for Merit Network open later, elsewhere in the state. face mail. Call (313) 446-0450 or (877) 824-9374. Single Copies (877) 824-9374 dustries, she said, and the state ridge Air National “We have people in that area who Reprints (212) 210-0750; or Krista Bora at hopes to have three or more other Guard Base in Har- and executive director of the Michi- are looking for that kind of training, [email protected] To find a date a story was published (313) 446- centers soon that could focus on rison Township, gan Cyber Range for Merit Network. but also right around the corner 0406 or e-mail [email protected] other industries: health care, fi- the 110th Airlift But previous hubs have been lim- within Velocity there are plenty of Crain’s Detroit Business is published by nance, aerospace and even energy. Larry Herriman: Wing in Battle ited-access areas available to stu- startups who can make use of this,” Crain Communications Inc. Chairman Keith E. Crain The Michigan Cyber Range is a Hackers are Creek, Camp dents and instructors, or to military he said. “This is right within Merit’s President Rance Crain private cloud network built on ar- switching focus to Grayling, Ferris base personnel, or by direct invita- mission to build a community and a Treasurer Mary Kay Crain Executive Vice President/Operations chitecture supplied and operated smaller companies. State University, tion. The Velocity hub is the first that workforce, and it’s part of what we William A. Morrow by Merit Network Inc., an Ann Arbor- Northern Michigan would be open to any company are, to help small businesses and Executive Vice President/Director of Strategic based nonprofit owned by 12 of University and General Dynamics Land wanting to use it, particularly small school districts and (others).” Operations Chris Crain Executive Vice President/Director of Corporate Michigan’s public four-year uni- Systems’ Maneuver Collaboration businesses or first-time federal con- Funding to build and equip the Operations KC Crain versities. Proposed by Gov. Rick Center in Sterling Heights, said Joe tractors wanting to prove their secu- Velocity hub of the Cyber Range Vice President/Production & Manufacturing Dave Kamis Snyder in 2011, the program of- Adams, vice president of research rity defenses against simulated came from MEDC, Macomb County, Chief Financial Officer Thomas Stevens hacks, said Adams and Larry Herri- the city of Sterling Heights and the Chief Information Officer Anthony DiPonio New Economy Initiative G.D. Crain Jr. Founder (1885-1973) man, interim executive director at , Herriman and Mrs. G.D. Crain Jr. Chairman (1911-1996) Macomb-OU INCubator, a business ac- Tisdale said. Editorial & Business Offices INDEX TO COMPANIES celerator program housed at Future hubs could be built and 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 These companies have significant mention in this week’s Crain’s Detroit Business: Velocity. equipped using funds from a nearly Cable address: TWX 248-221-5122 AUTNEW DET Aon Risk Solutions...... 11 Merit Network...... 21 “Hackers have generally been $6 million U.S. Department of Defense CRAIN’S DETROITBUSINESS ISSN # 0882-1992 is pub- Burns & Wilcox ...... 10 Metro Property Group...... 1 lished weekly,except fora special issue the third weekof moving away from attacking larger grant to the Macomb/St. Clair Work- November,and no issue the third weekofDecemberby Common Ground...... 21 Michigan Dental Association...... 7 corporations, because they have force Development Board late last Crain Communications Inc.at 1155 Gratiot Ave.,Detroit Conway and Partners...... 4 Michigan Cyber Range...... 3 MI 48207-2732.Periodicals postage paid at Detroit,MI Conway MacKenzie ...... 4 Michigan Economic Development ...... 3 countermeasures in place, to smaller year, for a new workforce retraining and additional mailing offices.POSTMASTER: Send ad- companies like their suppliers or program managed by the Workforce dress changes to CRAIN’S DETROITBUSINESS,Circula- Denovo Real Estate ...... 1 MiQuest...... 8 tion Department,P.O.Box07925,Detroit,MI 48207-9732. Detroit Lions...... 17 Quicken Loans...... 3 service vendors that might have Intelligence Network for Southeast GST# 136760444.Printed in U.S.A. Duo Security ...... 11 United Way for Southeastern Michigan...... 3 some of the same data,” Herriman Michigan.Ⅲ Entire contents copyright 2015 byCrain Communica- Macomb-OU INCubator...... 21 Velocity Collaboration Center ...... 3 tions Inc.All rights reserved.Reproduction oruse ofedi- said. “And that’s the pressure we’re on Chad Halcom: (313) 446-6796 torial content in anymannerwithout permission is McDonald Hopkins ...... 9 right now, to get some of these de- Twitter: @chadhalcom strictly prohibited. 20160222-NEWS--0022-NAT-CCI-CD_-- 2/19/2016 4:44 PM Page 1

22 CRAIN’S DETROIT BUSINESS // FEBRUARY 22, 2016 ON THE WEB RUMBLINGS WEEK FEB. 13-19

Detroit Digits JCI’s automotive interiors business DiChiera to retire is based in Plymouth Township. A numbers-focused look at last Wilbur Ross Jr. from Michigan week’s headlines: (right) chats OTHER NEWS with Crain’s Opera Theatre Ⅲ Cobo Square, a new flexible reporter $2.6B downtown outdoor space that will Dustin Walsh avid DiChiera, founder and The price IBM Corp. is paying to include a large terrace overlook- at the Big artistic director of Michi- acquire Ann Arbor-based Truven ing the Detroit River, is set to open Deals event. D gan Opera Theatre, plans to Health Analytics. Truven provides this spring — the final piece of retire at the end of the 2016-17 cloud-based data management Cobo Center’s five-year, $279 mil- AARON ECKELS season, the Detroit-based non- and analytics to more than 8,500 lion renovation plan. The reuse of profit announced. DiChiera will health care clients. The deal is the center’s old arena will house become artistic director emeritus, expected to be completed later art fairs, biergartens and other Ross chats about career to advise MOT’s recently estab- this year. community events. lished resident artist program. Ⅲ Two affordable housing de- velopments in Southfield are get- at Crain’s Big Deals event COMPANY NEWS ting a $19.8 million overhaul, as 400 McDonnell Tower Apartments and Ⅲ The number of multifamily Maine-based outdoor retail- residential units Peter Cummings the tower and townhomes at River ttendees at Crain’s annual mated $50 million project cost for a er L.L. Bean plans to open its first Park Place are being upgraded. Big Deals event at The new four-story, 120,000-square-foot plans to add in the New Center Ⅲ Michigan store this summer at area of Detroit. The developer is The city of Rochester ap- A Roostertail last week got to building. In October, the Ilitch fam- The Mall at Partridge Creek in Clin- touting a $50 million plan to bring proved the building of a 34,000- hear the wit and wisdom of Wilbur ily and Wayne State announced a ton Township. L.L. Bean will occu- 230 apartments into a new square-foot mixed-use develop- Ross Jr., the night’s headliner, who $40 million donation for the new py 14,000 square feet in the mall’s development at a 1.4-acre surface ment at 804 N. Main St. for launched his New York-based W.L. school — $35 million in initial center court. lot in the area. one-bedroom luxury apartments Ross & Co. LLC in 2000 with funding and a $5 million endow- Ⅲ Troy-based Emagine Entertain- and condominiums. Designhaus $440 million under management ment. ment Inc. expects to extend its Architecture in Rochester handled and has grown it to about $9 billion. One naming-rights deal under movie theater footprint outside design on the project for new His conversation was billed as a discussion will likely have a multi- Michigan for the first time late $40M owner and developer Erich Becker. fireside chat with Crain’s reporter million-dollar value, with a corpo- The value of a fund unveiled by this year, after obtaining a con- Ⅲ Jonathon Triest, founder of Dustin Walsh. “All we’re missing is rate sponsor, Forsythe said. Anoth- Detroit Mayor Mike Duggan to help tract to acquire a former grocery Detroit-based Ludlow Ventures the fireside,” quipped Ross, in a er, for about $150,000, would be an 1,000 buyers obtain mortgages in store in Frankfort, Ill. The nine- LLC, is raising a second venture room sided with glass on three individual naming deal for a single Detroit to bridge property appraisal theater chain also plans to expand capital fund of up to $55 million, sides, overlooking ice all the way classroom overlooking Woodward gaps. The Detroit Home Mortgage its Emagine Macomb facility by according to a filing with the U.S. across the river to Belle Isle. Avenue on the new building’s east- program, the first of its kind summer. Securities and Exchange His Michigan investments in- ern face — with a condition that the nationwide, stems from a public- Ⅲ California-based Internet Commission. He has already raised cluded Troy-based Talmer Bancorp sponsor’s family be able to use the private partnership that includes giant Google Inc. has been scouting $25 million for the fund, named Inc. and International Automotive facility every year on Thanksgiving five banks, community foundations, Detroit suburbs for locations of at Ludlow Ventures Detroit I LP. Components Group in Southfield, Day to overlook the America’s nonprofits and the state. least 30,000 square feet for R&D Ⅲ Public housing authorities in which he formed in 2005 in a joint Thanksgiving Parade, held by The space related to autonomous ve- Michigan are getting $31 million venture with Lear Corp. to buy its in- Parade Co. hicles, sources said. Ⅲ Farmington Hills-based Level — with a high of $8.5 million terior trim business. Even if those deals are finalized, Ⅲ Auburn Hills supplier TI Au- One Bancorp Inc. opened its first going to Detroit — from the U.S. “Lear paid us to take over the as- Forsythe said, the school has a long tomotive LLC acquired Ligonier, Detroit branch, in the Julian Madi- Department of Housing and Urban sets,” he said. “You always have trep- way to go to cover the likely Ind.-based powertrain supplier son Building at 1420 Washington Development through the agency’s idations when you are doing a deal, $50 million project cost for the new Millennium Industries Corp. Terms Blvd. Capital Fund Program. but I felt better they were paying me building at Woodward and Temple were not disclosed. Ⅲ Nearly a year and a half after Ⅲ A plan newly proposed by money. … Eventually, I bought 15 Street. Ⅲ Lockheed Martin Corp. with- it originally planned to open, Republicans in the Michigan companies. Unfortunately, I had to Other naming opportunities drew its legal challenge to a $6.7 Sweet Lorraine’s Fabulous Mac n’ House to rescue the struggling De- pay for most of them.” range from $5 million for a two- billion contract awarded to Brewz is set to open in Detroit’s troit Public Schools includes imple- Walsh asked Ross what he would story atrium in the center of the Oshkosh Defense LLC by U.S. Army Midtown this week at Cass and menting an A-to-F school letter do differently in his career if he had U-shaped building and $3 million Tacom Life Cycle Management Com- West Warren avenues in the for- grading system, merit pay, re- a chance. “Grow old more careful- for an auditorium to $10,000 for a mand in Warren for the Joint Light mer Marwil Bookstore site. stricting employees’ collective ly,” said the 78-year-old Ross, who “sticky space” or student seating Tactical Vehicle. Ⅲ Hazel Park-based Mabel Gray bargaining rights and moving still plays tennis regularly. and lounging area, or $25,000 for a Ⅲ Music Hall Center for the Per- was named one of 26 semifinalists new hires into a 401(k) retirement Were there any bad deals whose group meeting room. forming Arts said it has met its im- for the James Beard Foundation’s plan, AP reported. memory keeps him up at night? mediate goal to raise $1.7 million Best New Restaurant award. The Ⅲ Little Caesars pizza chain “The only thing I get out of bed at Domino’s pushes buttons in cash, which will enable it to New York City foundation named founders Mike and Marian Ilitch will night for is to go to the bathroom,” for pizza orders meet its near-term debt obliga- Garrett Lipar of Marais in Grosse be inducted into the International he said. tions and stave off possible clo- Pointe a semifinalist as a Rising Franchise Association’s Hall of A pizza button on every gadget sure of its historic Detroit venue. Star Chef of the Year, and Andy Hol- Fame later this year. Ilitch business school may not be far off. Ⅲ The Detroit City Football Club lyday of Selden Standard in Detroit Ⅲ A special election was set for offers naming deals Ann Arbor-based Domino’s Pizza said its campaign to fund renova- and Nick Janutol of Forest in Birm- Aug. 2 to fill the state 28th District Inc. last week added pizza-ordering tions of its future home, Keyworth ingham as semifinalists for Best House seat vacated when Rep. Can’t spring for the likely $4 mil- on the Apple Watch to its arsenal of Stadium in Hamtramck, raised Chef of the Great Lakes region. Derek Miller resigned to become lion or more per year that goes into high-tech options. Those also in- $741,250 in 109 days, meaning the Ⅲ The Grosse Pointe Farms- Macomb County treasurer. a naming-rights deal for the new clude ordering via Ford Sync in their semipro club has functionally based Ralph C. Wilson Jr. Foundation Ⅲ Gov. Rick Snyder replaced the Detroit Red Wings arena opening in car or through Amazon’s voice-acti- reached its goal for work expected has made a $2.5 million grant to director of Michigan’s Veterans Af- September 2017? Well, the Mike Ilitch vated Echo gizmo. to be done in time for the start of the Pro Football Hall of Fame in fairs Agency after an audit uncov- School of Business up the street just Most of the ordering capabili- the season in May. Canton, Ohio. ered problems at a state-run might have a deal for you. ties rely on a saved profile Domi- Ⅲ A variety of banks and phil- Ⅲ General Motors Co. product Grand Rapids nursing home for The Wayne State University busi- no’s calls “Easy Order,” which anthropic organizations have of- development chief Mark Reuss is veterans. Jeff Barnes, who led the ness school hopes to complete ad- amounts to hitting a button to tell fered to help nonprofit Reclaim De- joining the board of trustees at agency since its creation in 2013, ditional naming-rights deals with your local Domino’s, “Send me the troit after its Highland Park The Henry Ford in Dearborn for a resigned at Snyder’s request, AP businesses and individuals in the usual.” warehouse was destroyed by fire three-year term. reported. next four months or so for facilities Gimmicky? Sure. But the saved this month. Ⅲ Beda Bolzenius will leave as within its new building in The Dis- profiles offer ease of ordering that Ⅲ Fujikura Automotive America president of Johnson Controls Inc.’s OBITUARIES trict Detroit — and some proposals Domino’s credits for some of the has moved its North American automotive business by March 31, have been fairly creative, business sales growth it has seen in recent headquarters to Farmington Hills Automotive News reported. The Ⅲ John J. Riccardo, who was school Dean Robert Forsythe said. years. from Novi, Automotive News re- automotive business at Milwau- president, chairman and CEO of So far the university has reached Online orders accounted for 45 ported. FAA is a subsidiary of kee-based JCI is set to be spun off Chrysler in the 1970s, died Feb. 13. at least two verbal agreements to percent of sales in 2014, and that Tokyo-based Fujikura Ltd. into the new Adient by October. He was 91. Ⅲ ŀ help cover the balance of an esti- share has no doubt risen since. Ⅲ DBpageAD_DBpageAD.qxd 2/9/2016 9:15 AM Page 1 DBpageAD_DBpageAD.qxd 2/16/2016 10:35 AM Page 1