20110411-NEWS--0001-NAT-CCI-CD_-- 4/8/20116:18PMPage1 ©Entire contentscopyright2011byCrainCommunicationsInc.Allrightsreserved Page 35 Largest Michiganlawfirms, and interiors,Page17 LEED-certified buildings strength, Page11 Battle Creekbuildsonits in-house counsels,Page21 New awardshonorgeneral, It’s not thatsimple,Page7 Name priceforPistons? by thinkingoutsidemailbox Coupon companygrows trio putuptheirownmoney Before firmraisesVCfunds, ness LeaderssaidFriday. Snyder collaboration withGov. based Inc. tank Lansing publicpolicythink tiative isbeingconductedby for Michigan CEO group launched bythestatewide their urbanareashasbeen help communitiesredevelop gies thatthestatecanuseto for urbanredevelopment CEO groupseeksstrategies
NEWSPAPER www.crainsdetroit.com Vol.27,No.15 Focus Inside This JustIn Page 3 Crain’s Crain’s MICHIGAN BUSINESS Among otherthings,the The UrbanStrategiesIni- A projecttodevelopstrate- and theWashington- Public SectorConsultants ’s administration,Busi- Brookings Institution See ThisJustIn,Page2 CRAIN’S Lists . Business Leaders Rick , in ing contingencyplans. search officeslookingforworkaroundsormak- Detroit paintandcoatingscompaniesre- cles areinshortsupply—andthathasmetro of othermetallic-infusedpaintsusedonvehi- Quake dryingupsupplyofflashypigmentfor carpaint rocked theislandnationinMarch. stroyed bythe8.9-magnitudeearthquakethat at itsOnahama,Japan,plant,whichwasde- duces itspatentedXirallicpaintpigmentsolely more oftenatpubliccourses,groupevents As economymends,image-consciousbizgolfers and privatecoursesdeclined1.6 played onMichigan’s825public as frivolous. viewed bysome client isstill the linkswitha afternoon on worry thatan ing sodespite creasingly do- business arein- the gamefor in Michigan,butthosewhouse to seemoredealmakersthisyear. Shepherd’s HollownearClarkston Some expectcourseslike Darmstadt, Germany-based Tuxedo Black,BlackberryPearlanddozens While workershavere-enteredtheplantto upswing The numberofroundsgolf Fewer peopleareplayinggolf On the CRAIN’S DETROITBUSINESS B CRAIN’S DETROITBUSINESS Y B B Y ILL D USTIN S Page 19 springs anew, Owners: Page 18 in Michigan, Pro tours: O HEA COURSE N W Hope ALSH Back Merck KGaA MARCH 11–17,2011 members todobusinessinava- The courseisregularlyusedby Club lessons at rise recentlyinpeopleseeking lines. from thepeopleongolf’sfront ees. ing dealsorrewardingemploy- building clientrelationships,do- rounds playedwiththeintentof gan becausenoonetracks health ofbusinessgolfinMichi- ness statisticsaboutthegame. Foundation Jupiter, Fla.-based percent in2010,accordingtothe APRIL 11–17,2011 COURTESY OFSHEPHERD’SHOLLOWGOLFCLUB For example,therehasbeena So, theevidenceisanecdotal It’s difficulttoquantifythe pro- in BloomfieldTownship. , whichtracksbusi- Oakland HillsCountry as theirsuppliesofXirallicrunout. tive suppliersarescramblingforalternatives clear crisistocomeundercontrol,U.S.automo- leaves itsfuturequestionable. from theFukujima-Daiichinuclearreactor— begin repairs,itslocation—amere28miles mance CoatingsNorthAmerica said K.NigelBudden,directorof Clemens, isaffectedbytheXirallicshortage, American automotivecoatingsbusinessinMt. DuPont Automotive And whiletheworldwaitsforJapan’snu- “DuPont ismakingeveryattempttowork See Golf,Page42 ainlGolf National , whichoperatesitsNorth is scheduledtoopenin2014. school atthepublicuniversity.It gift toestablishaprivatemedical an anonymous$100millioncash University age, expertssay. state’s impendingphysicianshort- training, doinglittletomendthe heading outofstatetocomplete residency slotsmayleavestudents nomic impact.Butafederalcapon schools nodoubtwillhaveaneco- in-training outofMichigan Funding caps pushdoctors- no M.D.cure-all 3 newschools ety Rapids. school inSeptemberGrand opened anosteopathicmedical erate privately. William BeaumontHospitals land’s, incollaborationwith ate asapublicentity,whileOak- state’s direshortageofdoctors. supply physicianstoaddressthe respectively. Allthreeexpectto ing newschoolsin2012and2013, Oakland University Central MichiganUniversity Last month, Michigan’s threenewmedical The Michigan StateUniversity CMU’s medicalschoolwilloper- . projects ashortageof4,500doc- See Paint,Page43 CRAIN’S DETROITBUSINESS Michigan StateMedicalSoci- B Y DuPont Perfor- in Kalamazooannounced D USTIN Western Michigan also arelaunch- W ALSH now-destroyed Onahama,Japan,plant. A MerckphotoshowsthemakingofXirallicatIts , willop- also and lation. the growingmedicalstudentpopu- enues tofundadditionalslotsfor to hiremoreandnoobviousav- its hospitals,withnofederalfunds from Medicare. funded, inpart,with$9.5billion dency programs. ber ofopeningsavailableinresi- cent morestudentsthanthenum- schools graduateroughly25per- ing hospitals—U.S.medical residency programatlocalteach- the problemisacceptanceintoa solve thephysicianshortage.But come fullyoperational. when thethreeotherschoolsbe- expected torise1,000annually sity sity ofMichigan gan’s medicalschoolsatthe graduate eachyearfromMichi- from 2009. according tothemostrecentdata internal medicineandpediatrics, family practice,generalmedicine, ly inlower-payingareassuchas tors inthestateby2020,specifical- Michigan has4,843residentsin These residencyprogramsare On thesurface,thishelpsre- Currently, about700students and MSU.Thatfigureis $2 acopy;$59year See Residencies,Page45 , Wayne StateUniver- Univer- ® 20110411-NEWS--0002-NAT-CCI-CD_-- 4/8/2011 6:06 PM Page 1
Page 2 CRAIN’S DETROIT BUSINESS April 11, 2011
that it was seeking a cheaper fundraising environment, but ing for a new executive director. Crain’s staffers win THIS JUST IN headquarters location than its we’re thrilled to finally be here,” LeAnn Auer, who joined the current leased Ann Arbor space said Managing Director Tim MVCA in the fall of 2006 after 13 excellence awards ■ From Page 1 as it works to emerge from the Streit. He and partner Ryan years with Barclay’s Global In- Chapter 11 bankruptcy protec- Waddington are both veteran capi- vestors in San Francisco, has ac- Crain’s Detroit Business and sev- project will: review data for tion it entered on Feb. 16. talists who returned to Michigan cepted a position with the trea- eral members of the editorial staff Michigan’s metropolitan statis- It’s been at its 458,000-square- to vie for MSF funding and start sury team at Ford Motor Co. received accolades in the 2010 Ex- tical areas and compare it to re- foot headquarters at 100 Phoenix their own firm, which will invest The MVCA, which was found- cellence in Journalism awards of gions nationally; review best Drive, just south of I-94 near Bri- in alternative energy, advanced ed in 2002, has 160 members, in- the Detroit chapter of the Society of practices nationally; assess arwood Mall, since the mid-1990s. materials and manufacturing cluding venture capital firms, Professional Journalists. Michigan and federal urban The building is owned by and homeland defense. angel investors, economic devel- Awards were presented April 6. policies and programs, philan- Farmington Hills-based real es- The fund expects to hold a sec- opment organizations, universi- In the online journalism catego- thropic priorities and alignment tate investment trust Agree ond close in the next two months ties and service providers. ry, Crain’s website, crainsdetroit with goals and strategies of Realty. and a final close in a year. Those interested in replacing .com, was given a first-place award — Tom Henderson Michigan metropolitan leaders, The chain said 475 people work her should send a cover letter for having a “well-designed, easy to foundations and others. in the Ann Arbor headquarters, and résumé to lauer@michigan- navigate site that covers local busi- The project, which will include and its lease runs through 2023. vca.org by May 6. ness exceptionally well,” according recommendations on changes to — Bill Shea Shore Financial has new CEO — Tom Henderson to the SPJ. state and federal policy, is ex- Birmingham-based Shore Fi- Crain’s multimedia reporter pected to be completed by year’s New Huron River VC firm nancial Services Inc., a national Nathan Skid and Web Developer end. mortgage lender, has named Kip Robotics Day beats expectations Steve Williams won first place in the — Amy Lane to announce $7M close Kirkpatrick as CEO. He replaces multimedia feature category for Kathy Welty, who assumes the Attendance is expected to be their work on Crain’s annual 20 in Huron River Venture Partners, a new position of COO. double the anticipated turnout their 20s awards. fledgling venture capital firm in New York firm helping Previously, Kirkpatrick was Tuesday, when the National Cen- Assistant News Editor Jeff John- Ann Arbor, is expected to an- president and CEO of Kirkpatrick ter for Manufacturing Sciences and ston won first-place awards in the Borders search for area HQ nounce today that it has had a & Co., a merchant banking firm Robotics and simulator research best feature page design and edito- Real estate sources say that first close of $7 million of what is in Chicago. company Soar Technology Inc. rial page design categories. The New York City-based DJM Realty expected to eventually be a $15 Shore, which provides mort- of Ann Arbor co-host Michigan feature page was for a Policy sec- is handling the Borders Group million seed-stage fund investing gage services to consumers Robotics Day, along with the tion cover design on the use of to- Inc.’s search for a new corporate in very young companies. through Shore Mortgage and to Michigan Economic Development bacco settlement funds. headquarters in metro Detroit. Last August, Huron River and brokers through United Wholesale Corp. Nonprofits and services reporter DJM and Borders declined to Grand Rapids-based Michigan Ac- Mortgage, is privately held and The event is above capacity in Sherri Welch took second place in comment. celerator Fund I were named as operates in 47 states and the Dis- pre-registration with 120 people the general news category for her It already is the broker for the winners of a state competition trict of Columbia. story about fraud at the Ann Arbor bankrupt bookseller’s retail loca- for new VC firms willing to focus from more than 75 companies ex- — Tom Henderson Amateur Hockey Association. tions. The agency on Friday list- on seed-stage investing. pected to attend — compared Bill Shea, enterprise editor and ed 205 Borders properties avail- Each firm got a commitment of with an initial turnout of about reporter, won second place in the able in 37 states, totaling more $6 million from the Michigan VC association director 50 companies, said NCMS Execu- commentary/blogging category. than 5 million square feet and Strategic Fund, contingent on tive Director Phil Callihan. A total of 163 Excellence in Jour- ranging in size from 14,286 to their ability to raise additional joins Ford treasury team For more information, see nalism honors were awarded to 42,770 square feet. funds. The Ann Arbor-based Michigan www.mirobotics.org. area journalists for their work Borders announced last week “It’s been a challenging Venture Capital Association is look- — Chad Halcom during 2010.
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April 11, 2011 CRAIN’S DETROIT BUSINESS Page 3 VC trio blaze Health Care Extra trail themselves Linkner, Gilbert, Hermelin invest in tech with own cash Nonpatient revenue: Boost to hospital budgets, Page 37 BY TOM HENDERSON chairman and founder of Quicken CRAIN’S DETROIT BUSINESS Loans Inc.; Josh Linkner, the founder and chairman of ePrize Inc.; Inside Not waiting until they raise mon- and Brian Hermelin, chairman and ey from institutional investors, the co-founder with Gilbert of Rock- Arts collaboration to launch founders of Detroit Venture Partners bridge Growth Equity LLC, a private- LLC are using their equity firm based in website for volunteers, own substantial Livonia. Page 44 funds to start doing I can’t imagine Detroit Venture deals. They’re ex- “ Partners also has pected to announce us doing a term sheets their first two in- drawn up and Company index vestments today. is awaiting deal that These organizations appear in this week’s Crain’s One is a San signatures on Detroit Business: Francisco-based doesn’t five other Allegra Print and Imaging ...... 4 company, Flud LLC, deals it hopes Ann Arbor Downtown Development Authority . . . . . 41 Association of Corporate Counsel ...... 21 which has devel- involve the to close on in BASF ...... 43 oped a news-reader the next few Birmingham Country Club ...... 19 application for months, in- Botsford Hospital ...... 37 city of Business Golf Unlimited ...... 42 smartphones that cluding a Butzel Long ...... 33 allows users to ag- Detroit. spinoff from CareTech Solutions ...... 38 Central Michigan University ...... 1 gregate news feeds ” the University of Charles H. Wright Museum ...... 44 and blogs. The com- Josh Linkner, Michigan. Chrysler Group ...... 27 GLENN TRIEST Detroit Venture Partners LLC Civil Engineering Solutions ...... 42 Save On Everything CEO Mike Gauthier began to focus his business on pany will open a The firm is look- Community EMS ...... 39 coupons when his Marketplace Magazine stalled in the 1980s. sales office in down- ing to invest in Cultural Alliance for Southeastern Michigan . . . . . 44 town Detroit. such sectors as the Internet, digi- Delphi Automotive ...... 25 Detroit Labs ...... 43 The other is in hiredMYway.com, tal media, marketing, direct-to- Detroit Medical Center ...... 37 a Birmingham-based job recruit- consumer, sports and entertain- Detroit Pistons ...... 7 Detroit Venture Partners ...... 3 ment site that claims to simplify the ment, social media, e-commerce DuPont Automotive ...... 1 hiring process for job seekers and and software. It will not invest in Dykema Gossett ...... 30 personnel managers. It soon will biotech or advanced manufactur- Energy Conversion Devices ...... 24 Outside EPrize ...... 26 move to Detroit. ing. Executive Women’s Golf Association ...... 42 Detroit Venture Partners is a The VC firm’s investment strat- Ford Motor ...... 21 Gage Products ...... 43 venture-capital firm founded in Goodwell’s Natural Foods Market ...... 41 November by Dan Gilbert, the See Venture, Page 43 Harley Ellis Devereaux ...... 16 Haworth ...... 16 Henry Ford Health System ...... 39 the mailbox Herman Miller ...... 16 IHS Automotive ...... 43 Indianwood Golf & Country Club ...... 18 Inforum ...... 15 Innovations keep coupon company growing Kellogg ...... 11 Kim’s Produce ...... 41 $1B plant upgrade steels Ludlow Ventures ...... 43 BY NANCY KAFFER Meyering ...... 42 CRAIN’S DETROIT BUSINESS Michigan Golf Course Owners Association ...... 42 Michigan Independent Providers Association ...... 6 Groupon did us Michigan State University ...... 1 Ask Mike Gauthier what an “ Midtown Detroit ...... 41 entrepreneur is, and he’ll tell all a favor by Severstal for the future Oakland County Bar Association ...... 21 Oakland Hills Country Club ...... 1 you: a person who has an unrea- Oakwood Healthcare ...... 37 sonable conviction based on in- making people BY DUSTIN WALSH my technology. PPG Industries ...... 43 Renaissance Venture Capital Fund ...... 43 adequate evidence. CRAIN’S DETROIT BUSINESS Severstal, a subsidiary of Rus- Resort & Golf Marketing ...... 19 In Gauthier’s case, unreason- understand ... that sia-based OAO Severstal, is negotiat- Save On Everything ...... 3 able conviction has paid off. Gau- Tightening safety and fuel econo- ing the loan interest rate with the Severstal Dearborn ...... 3 SPX ...... 22 thier presides over Troy-based you could save my standards have created oppor- U.S. government. The steelmaker St. John Providence Health System ...... 38 Save On Everything, a direct-mail tunity for the struggling steel in- seeks a 2.5 percent interest rate, State Bar of Michigan ...... 21 money by printing Steelcase ...... 16 coupon company in its 26th year dustry — including Severstal Bloomberg News reported last Taubman Centers ...... 25 of operation, with 95 full-time Dearborn Inc. — that hinge on a week. Trinity Health ...... 38 employees in three states and $24 coupons out. lighter and stronger steel. The expansion of Severstal University of Michigan Health Systems ...... 38 ” Val Pak Associates ...... 45 million in fiscal-2010 sales, up To capitalize on automaker de- Dearborn, a supplier to domestic Valassis Communications ...... 22 from $21 million in 2009. Mike Gauthier, Save On Everything mand, Severstal has begun con- and upstart automakers, will help Western Michigan University ...... 1 William Beaumont Hospitals ...... 37 Thanks to the addition of a struction on a $1 billion upgrade at the company meet the growing de- Ye Olde Butcher Shoppe ...... 41 new product, Save On Cars and in Chicago, circulation started at its Dearborn plant. The focus of mand for lightweight steel from Trucks, Gauthier expects revenue 150,000 and should reach 900,000 the improvements are manufac- automakers, said Katya Pruett, to jump again in fiscal 2011 to $26 by year’s end with an ultimate turing lines to make advanced communications manager at Sev- Department index million. goal of 1.7 million, Gauthier said. high-strength steel. erstal Dearborn. The company ex- BUSINESS DIARY ...... 36 Save On Everything is mailed Distribution in the Twin Cities Severstal requested a $730 mil- pects to add 76 jobs to run the new to more than 2.6 million house- starts in August. lion loan to help fund the expan- lines, she said, adding to 1,450 ex- CALENDAR ...... 40 holds each month: 1 million in Save On Everything launched sion through the U.S. Department of isting local jobs. CAPITOL BRIEFINGS...... 10 Detroit, 1.1 million in Chicago its main website in 2000, years Energy’s Advanced Technology Ve- Severstal’s expansion project in- CLASSIFIED ADS ...... 40 and 525,000 in Minneapolis-St. before Groupon was making hicle Manufacturing Incentive cludes: KEITH CRAIN...... 8 Paul. Save On Cars and Trucks headlines. But the company also Program — a $25 billion program A $280 million continuous an- LETTERS...... 8 goes to 1.2 million households in stemming from the 2008 stimulus Detroit. Launched two weeks ago See Coupons, Page 45 designed to encourage fuel econo- See Severstal, Page 44 MARY KRAMER ...... 11 OPINION ...... 8 OTHER VOICES ...... 9 Idea overview PDFs for posterity PEOPLE ...... 36 Catch up on the recent Idea: Detroit Like to save copies of Crain’s? THIS WEEK @ RUMBLINGS ...... 46 conference and people behind the winning Subscribers can get PDF versions, WWW.CRAINSDETROIT.COM ideas, crainsdetroit.com/section/IDEA-DetroitConference-2011. crainsdetroit.com/section/toca. STAGE TWO STRATEGIES ...... 4 WEEK ON THE WEB ...... 46 20110411-NEWS--0004-NAT-CCI-CD_-- 4/8/2011 5:35 PM Page 1
Page 4 CRAIN’S DETROIT BUSINESS April 11, 2011
THE MILLER LAW FIRM StageTwo Strategies a professional corporation A look at problem-solving by growing companies.
ALLEGRA PRINT AND IMAGING Location: Plymouth perts in the fields of marketing, Description: Handles in-house design and analytics. graphic design, printing service, “In September 2010, we brought marketing and mailing. Clients on six designers, two Web design- include professional sports teams, ers, one writer and a marketing Detroit-area hospitals, financial specialist,” Tyll said. “Since then, institutions and automakers. it’s really been a great success.” President: Brian Tyll, co-presi- Mario Grech, co-president and dent and co-owner; Mario Grech, co-owner of Allegra Print and Our firm specializes in litigation: co-president and co-owner. Imaging, said the decision was • Complex Commercial and Business Founded: 1975 Tyll Grech made because it was client-dri- Employees: 40 ven. • Shareholder and Partnership Revenue: $5 million in 2010; tribution, large format work, “Our relationships with (the • Automotive Supplier $6 million projected for 2011 signs, e-blasts, website develop- clients) showed that they wanted • Class Actions Problem to be solved: Customers ment, social media or analytics. us to provide more of the prod- of Allegra Print and Imaging, one of “Marketing has many more av- uct,” Grech said. “We always had • Employment the largest members of the Allegra enues than it did in the past,” Tyll a graphic person but never • Family Law and Probate Litigation Network LLC franchise system, said. “We understand that print- enough to handle all the work. I (248) 841-2200 were using new communications ing is not the only avenue to reach would say that customers have re- millerlawpc.com 950 West University Drive, Suite 300 technologies to do a lot more work out to prospects and clients, and ally loved it.” Rochester, Michigan 48307 themselves. social media and e-marketing can Expert opinion: Nick Wagner, “Today’s technology has made be overwhelming to most busi- president of the Printing Industries it possible for individuals and nesses.” of Michigan Inc., said Allegra Print businesses alike to produce some Allegra Print and Imaging re- and Imaging’s problem is com- products they used to pay us to trained its marketing department mon and will be one of the topics produce for them, things like let- to handle the technologies and covered during PIM’s summer concepts behind the new service terhead, business forms, résumés, management conference. approach. newsletters, bulletins, etc.,” said “The owners of these printing Tyll said Allegra can quickly Brian Tyll. “Also, ‘big box’ stores companies now have to recruit help its small and midsize busi- that offer online print ordering people with new skills,” Wagner ness customers determine what have cut into our market.” said. “You’re not just going to These weren’t the only prob- options are best for carrying tar- geted messages. hire a printing press operator. lems. Marketing department bud- You’re now looking for IT, mar- Detroit + = gets had been cut, causing compa- “In most scenarios, there is keting and sales people.” nies to rely on email blasts to never just one way to get your Wagner said change is always reduce printing expenses. “(And) message across,” Tyll said. “By difficult, but company leaders postage costs continue to rise,” having all these capabilities un- should think about how they fit Tyll said, “again pushing compa- der one roof, we can quickly offer into a changing economy. nies to email marketing in lieu of our clients an affordable solution “Everything has to be focused growing with a strong (& fun!) paying for direct-mail cam- to their marketing needs.” paigns.” Risks and considerations: To do around the needs of your cus- Solution: Allegra Print and this, Allegra Print and Imaging tomers,” he said. “The thinking MI based company! Imaging had to redirect its com- had to spend more than $2 million has to be that you’re an extension pany toward becoming a “one to build a 69,000-square-foot state- of the customer, and your busi- record sales growth! stop resource” for complete mar- of-the-art building in January. ness should be about helping your keting services and production of The company also increased its customer succeed.” all media, be it printing and dis- staff by 30 percent, bringing in ex- — Shawn Wright
waking up every morning! If your company has overcome a tough challenge, other growing businesses want to hear about it. Contact Web Editor Gary Anglebrandt at [email protected] to share your story. For other news on growing small businesses, sign up for Crain’s twice-monthly Second Stage newsletter at crainsdetroit.com/getemail. BIGGBY COFFEE Franchise Info www.biggby.com Borrowing not option for Bing’s next budget
BY NANCY KAFFER vices we should be in the business Understanding the deficit is just CRAIN’S DETROIT BUSINESS of providing.” as important as understanding the Jenkins said she hopes the ad- city’s revenue, said Sheila Cock- Detroit Mayor Dave Bing is run- ministration investigates sharing rel, who served 16 years on the ning out of options. resources with other government City Council and is now an adjunct Bing’s second budget, which he entities for everything from pur- professor at Wayne State University’s is set to present to the Detroit City chasing to road maintenance. Irvin D. Reid Honors College and own- Council on Tuesday, must address Although she doesn’t know er of Crossroads Consulting. the city’s growing accumulated whether those services should be Revenue sources in the budget and structural deficits, cutting ex- shared, Jenkins said, “we should should be solid, Jenkins said, not penses while financing the city’s be looking at it.” speculative. pension funds — against the back- The first thing the Detroit City “If we don’t know a check is on drop of an expected decrease in Council’s fiscal analyst, Irvin Cor- the way, we shouldn’t include it in state revenue sharing. ley Jr., hopes Bing will address is the budget,” she said. Bing has few choices. Both short- the general-fund deficit. Cockrel said Bing also must ad- and long-term borrowing are effec- “First of all, we in fiscal feel the dress the unfunded actuarial ac- tively halted by the city’s fiscal sit- administration needs to appropri- crued liabilities in the city’s pen- uation, says the council’s top finan- ately quantify what the deficit is as sion funds and develop a long-term cial analyst. That means the mayor of June 30, 2011,” the end of the strategy to manage health care must cut, consolidate or reduce city’s fiscal year, he said. costs for employees and retirees. services, City Hall insiders say. Corley said his department The city can’t fund its deficit with “The days of us kicking the can thinks the deficit is close to $180 borrowed money, Corley said. De- down the road don’t exist anymore,” million, not the $155 million re- troit’s low credit rating makes said council member Saunteel Jenk- ported in the city’s comprehensive short-term borrowing too expen- ins. “I’m hoping to see some pretty annual financial report. sive, long-term borrowing would re- bold initiatives on how to stream- The general-fund budget was quire state legislation, and the city line and restructure the ways we $1.8 billion in fiscal 2010. lacks a revenue stream to pledge as provide services in the city. Corley said it will take probably security for another bond sale. “At a minimum, there should be three to five years for the city to Nancy Kaffer: (313) 446-0412, some thought given to what ser- eliminate its deficit. [email protected] DBpageAD.qxp 12/10/2010 12:28 PM Page 1
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Page 6 CRAIN’S DETROIT BUSINESS April 11, 2011 Special tax not in plan to fund light-rail line operations
BY BILL SHEA briefing. a conservative estimate, White said. The state in 2008 approved an an- The remainder of the local fund- CRAIN’S DETROIT BUSINESS The 9.3-mile rail line from Hart The city’s plan to cover the nual appropriation of up to $8 mil- ing is $100 million from the private Plaza to Eight Mile Road will be line’s cost breaks down as: lion for the line’s operational costs. sector and a $25 million federal The $520 million plan to build a built entirely at once, and is ex- Ⅲ $2.8 million from fares (at The council is expected to ap- transportation stimulus grant. The streetcar-style light-rail line on De- pected to be operational by 2015, $1.50 per rider). prove the sale of up to $125 million local money, which accounts for troit’s Woodward Avenue isn’t ex- White said. Ⅲ $5 million from federal Con- in bonds for the project’s capital about 40 percent of the total project pected to require a special tax to The line’s yearly operations and gestion Mitigation and Air Quality costs. Of that, $73 million will be cost, will be used to leverage federal cover its annual operational costs. maintenance costs are estimated grants. used to cover the city’s portion of funds to cover the remainder. Instead, the city will blend a to start at $2.1 million when the Ⅲ $2 million from the state’s the rail project, and the remainder The rail plan is expected to qual- combination of fares, federal route begins service in 2015, and Public Act 51, which is transporta- will be spent on capital purchases, ify for the funding under the Feder- grants, state funds already ear- are expected to increase to $16 mil- tion project funding. such as new Detroit Department of al Transit Administration’s New marked for the project and about lion by 2030. Ⅲ $5 million from other state Transportation buses. Starts program, which is aimed at $2 million from the city’s general An analysis of the project pre- pledges. The bonds, expected to cost the partially funding qualified local fund to pay for the line annually. pared for the council forecasts the Ⅲ $1 million from federal Sec- city $10 million annually over 15 fixed guideway transit projects That’s what city CFO Norm line will carry 1.8 million riders an- tion 5309 Fixed Guideway Modern- years, are backed by federal funds such as rail. White, who is heading the rail pro- nually, or 22,000 daily riders — a ization Funds. already earmarked for capital pur- The project is wrapping up its fed- ject for Mayor Dave Bing, told the number kept flat through 2030 in Ⅲ $2 million from city’s general chases. No vote has been sched- erally required environmental im- City Council during a Thursday revenue and expense projections as fund. uled on the bonds. pact studies and will enter into pre- liminary engineering this summer. Construction is expected to be- gin next year. Bill Shea: (313) 446-1626, “HealthPlus takes care of my employees [email protected] so I can take care of business. That’s a Med equipment big Plus.” firms back bill to repeal bidding plan
BY JAY GREENE CRAIN’S DETROIT BUSINESS
Medical home equipment compa- nies in Michigan are supporting a federal bill that they say would pre- vent many of the companies from losing hundreds of thousands of dol- lars in revenue or going out of busi- ness. Federal bill HR 1041 would repeal Medicare’s plan to begin a competi- tive bidding program later this year for home medical equipment and services. “This program, which will put lo- cal home care providers out of busi- ness, will limit who Medicare bene- ficiaries can turn to for service,” said Robert Binson, chairman of the Lansing-based Michigan Independent Providers Association, one of the groups that support the bill. The program forces patients into longer, more expensive hospital stays, which raises Medicare costs, said Binson, also president of Binson’s Home Health Centers in Center Line. The competitive bidding system, which is intended to save Medicare more than $1 billion annually, is slated to be in Southeast Michigan, Grand Rapids and Flint later this year. It would affect many of Michi- gan’s 1.6 million Medicare benefi- ciaries. The Medicare regulation estab- HealthPlus goes above and beyond for employers. lishes a competitive bidding process for companies providing equipment to Medicare patients and also limits džƚĞŶƐŝǀĞƐƚĂƚĞǁŝĚĞĂŶĚŶĂƟŽŶĂůƉƌŽǀŝĚĞƌŶĞƚǁŽƌŬƐ the number of companies under Worldwide emergency coverage contract. While the regulation is intended WĞƌƐŽŶĂůĂƩĞŶƟŽŶďLJĂĚĞĚŝĐĂƚĞĚƵƐƚŽŵĞƌ^ĞƌǀŝĐĞƚĞĂŵ as a Medicare cost-containment de- vice, it could force 90 percent of the ĂƐLJƚƌĂŶƐŝƟŽŶĨƌŽŵŽƚŚĞƌŚĞĂůƚŚƉůĂŶƐ 500 Michigan home health supply vendors out of business, costing the Customizable HMO, PPO and self-funded health plans state hundreds of jobs, several com- pany executives have told Crain’s. To enroll, contact your independent agent or call: The National Hospital Coalition on Durable Medical Equipment, a locally formed group of hospital-based 1-800-530-9071 home medical equipment compa- www.healthplus.org nies, also supports the bill. Jay Greene: (313) 446-0325, HealthPlus HMO is a product of HealthPlus of Michigan, Inc. HealthPlus PPO is a product of HealthPlus Insurance Company. © 2011 HealthPlus of Michigan [email protected] 20110411-NEWS--0007-NAT-CCI-CD_-- 4/8/2011 5:46 PM Page 1
April 11, 2011 CRAIN’S DETROIT BUSINESS Page 7 Price tag doesn’t tell full story of Pistons sale Build-out begins for
BY BILL SHEA Deloitte’s new space CRAIN’S DETROIT BUSINESS Sometimes it’s not as The build-out has begun for Deloitte LLP’s In the hours after the Detroit Pistons sale “ new Detroit headquarters in the 200 Tower was finally officially announced Friday, clear-cut as it would be on of the Renaissance Center. what fans wanted to know was “How much The move to smaller but more high-tech did Karen Davidson sell the team for?” your typical M&A space will make the accounting firm the No one involved in the deal was saying, first LEED-certified tenant in the downtown but the number was expected to eventually market. Detroit landmark. leak out — possibly over the weekend. ” Deloitte is moving from 160,000 square Sports insiders caution that the price, ex- Michael Rapkoch, Sports Value Consulting LLC feet on nine floors of the 600 Tower into pected to top the Forbes.com estimated val- 100,000 to 110,000 square feet on six floors in ue of $360 million, should be taken with a Initial reports earlier this year of a deal the 200 Tower. The Detroit office employs grain of salt. between Davidson and Gores had the sale about 1,000 people. Managing Partner Whatever the Pistons price tag is, it’s price at $420 million, but negotiations Joseph Angileri said no downsizing of staff likely to be the final amount new owner lagged as the sides haggled over the final is involved. Tom Gores pays Karen Davidson — not price and terms. “We’ve actually been hiring,” he said. what he’s writing a check for now. Insiders also said it’s in the best interest “We’ve been in our current space since 1991, A source familiar with the situation said COURTESY OF PLATINUM EQUITY LLC of the NBA and its owners to have gargan- and the space is old and traditional and not that Davidson will retain an equity stake in Tom Gores succeeded in his bid to buy the tuan sale prices. That helps drive up the conducive to the way we do work now. the team and Palace Sports & Entertainment Detroit Pistons from owner Karen Davidson. sale of the next team. When half of your workforce only spends 20 Inc. That stake will decrease as Gores, a Los The Forbes.com value estimate from percent of their time in the office, you don’t Angeles private-equity billionaire who fo- tributed to the sale.” earlier this year of $360 million represents need to build the way you used to. cuses on turnarounds, continues to pay for He noted that the 2009 sale of the San a $119 million decline in value over 12 “It’s going to be an eye-opening environ- his increasing share of the franchise. Diego Padres for $500 million was an incre- months. The financial news website attrib- ment. It will be really next generation, cut- What will be difficult, without a copy of mental deal over five years, a transaction uted the lost value to declining attendance ting edge.” the sale agreement, is figuring out what is he termed as one of the more complicated and the Detroit-area economy. Blue Cross Blue Shield of Michigan is moving apportioned in the sale price to the team in recent years. In January 2010, Davidson announced into the 600 Tower space as part of its De- and to the venues. There also is value in The $175 million sale in February of the that she intended to sell the franchise troit expansion. Blue Cross will move 3,000 lesser-known aspects of the assets, such as Buffalo Sabres, on the other hand, was more bought by her late husband, who also was employees into Towers 500 and 600, with the the full TV studios inside The Palace of straightforward, Rapkoch said. chairman of Guardian Industries Inc. He first 200 moving into Tower 500 in May. Em- Auburn Hills. The Pistons deal includes Palace Sports, picked up the Pistons for $8 million in 1974 ployees are expected to begin moving into Sports franchise sales can be more com- the umbrella corporation for the Pistons, from Fred Zollner, who had moved the the 600 tower next year. plex than Wall Street deals. The Palace and DTE Energy Music Theatre, and franchise to Detroit from Fort Wayne, Ind., The Detroit office of Gensler will do the de- “Sometimes it’s not as clear-cut as it holder of the contract to manage Meadow where Zollner founded the team in 1957. sign work for Deloitte.The build-out will be would be on your typical M&A market,” Brook Music Festival for Oakland University. The remaining 24 percent of the Pistons by Turner Construction Co., a national firm said Michael Rapkoch, president of Addi- Comerica Bank is financing the sale, ac- was split among several people, who agreed based in New York with a Detroit office. son, Texas-based Sports Value Consulting cording to the Friday press release on the to sell their shares when Davidson sold the Work is expected to be finished in August or LLC. “You don’t know how much all the oth- deal, expected to be completed by June 30. majority. September. er assets are worth and how they con- The league’s other owners must approve it. Bill Shea: (313) 446-1626, [email protected] — Tom Henderson
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Page 8 CRAIN’S DETROIT BUSINESS April 11, 2011 OPINION New hitters step up to bat for Detroit
ho’s coming with me?” Dan Gilbert asked that ques- tion in 2007 as he closed the luncheon honoring him W as the Crain’s Detroit Business’ Newsmaker of the Year for 2006. If Quicken Loans would move downtown, Gilbert said, who else would follow? Today, he’s answering his own question. An investment fund he launched with two partners, Josh Linkner and Brian Hermelin, is making its first investments, and small Web-re- lated startups will soon become tenants in downtown incuba- tor space on the south end of Grand Circus Park. (See story, Page 3.) Private-sector leadership is reviving core downtowns across Michigan as savvy executives realize they need vibrant cities to attract and retain the best talent. Another example: Kellogg Co. in Battle Creek. (See story, Page 11.) No turnaround is ever accomplished without a leader who can shape a common vision that others can rally around. Detroit needs cheerleaders with skin in the game. Gilbert, Linkner and Hermelin are Detroit’s next generation, following LETTERS the earlier investments by Little Caesars’ Mike Ilitch and Compuware’s Peter Karmanos. Don’t wreck state no-fault law Fund more slots for med grads Editor: muench stated in a news release Crain’s Detroit Business Michigan drivers have the best (since removed from the IIM web- welcomes letters to the editor. The United States went 30 years before seeing a new school insurance system in the country, site) that “the benefits policyhold- All letters will be considered for open to grant M.D. degrees. But in the past decade, a handful of but some in the Legislature want to publication, provided they are ers receive under the no-fault poli- new schools have launched, including three soon-to-open dismantle that system so insurance signed and do not defame cy in Michigan far outpace benefits companies can reap even bigger available in any other state.” schools in Michigan. individuals or organizations. profits. Proposed bills would dis- Letters may be edited for length Previously, IIM and Kuhn- The three — at Oakland, Western Michigan and Central mantle important protections for and clarity. muench have heaped praise on drivers and shift the costs and bur- Michigan’s no-fault law, saying no- Michigan universities — are aimed at reducing a pending E-mail: [email protected] physician shortage in Michigan. Starting from scratch with den to Medicaid and the taxpayers. fault personal protection insurance (“Insurers seek medical fee schedule is “the most efficient and effective new curricula can also change the way physicians are trained. on car crash claims,” March 28.) Michigan’s auto accident thresh- auto insurance law in the United Startup costs aren’t cheap; Oakland University and Currently, under Michigan’s old law became the most difficult States” and that the Michigan law William Beaumont Hospitals are trying to raise $260 million to one-of-a-kind no-fault law, Michi- in the nation for innocent accident offers “the best no-fault medical victims to recover under. Even get their joint school off the ground. gan drivers who are seriously in- benefits of any state.” The Ameri- jured in a car crash are guaran- though auto accident lawsuit fil- can Insurance Association has said So it makes sense to look at the other side of the equation: teed unlimited lifetime medical ings dropped dramatically, insur- Michigan’s no-fault system “is cost- getting more federally funded residency slots that hospitals benefits, attendant care, wage loss ance rates kept increasing. As did effectively providing the nation’s rely on to train these new grads. Larger hospitals can often and replacement services. insurance company profits. most extensive auto insurance ben- I’ve been a staunch defender of fund portions of these residencies, but smaller hospitals rely And injured Michigan drivers efits at affordable rates.” receive those benefits regardless of no-fault for my entire legal career. The worthy goal of saving mon- heavily on graduate medical education funds coming from fed- who was at fault in causing the ac- It is one of the very best things we ey on insurance premiums can be eral Medicare and Medicaid programs. cident. have in our state. It isn’t just better achieved by regulating in- As more med school grads compete for more than 4,800 ex- Senate Bills 0293 and 0294 would lawyers, consumer groups, med- surance company profits in this ical groups and hospitals, the isting residencies, some grads may be forced to leave Michi- gut Michigan no-fault protections, state, as they are regulated in al- especially unlimited lifetime med- AARP, the Coalition Protecting most every other state in the na- gan for a residency. And doesn’t that defeat the purpose of ical benefits for seriously and cata- Auto No-Fault and the catastrophi- tion, not by eviscerating the best training more docs to reduce the state shortage? strophically injured drivers. cally injured who feel this way. insurance protection in America. Note to Michigan’s congressional delegation: The fix is at The sponsors say these bills will As recently as December 2010, Steven M. Gursten the Insurance Institute of Michigan the federal level, and Congress could make it happen. “lower insurance rates.” But we Michigan Auto Law heard these promises in 1995, when and Executive Director Pete Kuhn- Farmington Hills KEITH CRAIN: The governor needs to stay the course I’ve got a lot of complaints for our tant than ours — or any- — put their financial It would be bad enough if it were nor stays the course, he might be- newly elected Gov. Rick Snyder. one else’s. house in order. just the Michigan government. It come popular when people see the I’ve got quite a few items I hope We have simply run We elected Gov. Sny- isn’t. We have severe financial state getting stronger and more he might overlook eliminating in out of money, and it’s der to do exactly what crises in our counties and our companies hiring new employees. his new budget. In fact, everybody time to pay the piper for he’s doing. I don’t think cities, too. We have simply been Some special interests yelling I talk to has a few items that they all those years we lived anyone was dumb living well above our means. We’ve the loudest seem to have gotten the would like him to spare. high off the hog. enough to think that it been spending far more than we biggest tax breaks. But if not for If none of us is happy, I guess We seem to be at the was going to be a happy generate in revenue. We have to those breaks, would they have that means that he’s doing a pretty bottom of just about situation. It isn’t now face the stark reality of our debt. come to Michigan in the first good job. We’re sharing the pain. every list that catalogs and it won’t be tomor- Our governor won’t win any place? Or did the tax breaks just Oh sure, some special interests states with problems. row. But there is proba- popularity contests anytime soon. make us the cheapest place to do are whining louder than others. Well, I don’t want to be bly no one better But it’s time we understand the business? If so, the next state over But they will have a tough time at the top of the list of trained to put our state’s horrible financial condition can always offer a bigger break. convincing the rest of us that their states that declare bankruptcy be- state’s financial house in order and the ugly means necessary to It’s tough for everybody. Every- special interest is any more impor- cause they couldn’t — or wouldn’t than our governor. get it back in shape. If the gover- body. 20110411-NEWS--0009-NAT-CCI-CD_-- 4/8/2011 10:36 AM Page 1
April 11, 2011 CRAIN’S DETROIT BUSINESS Page 9 OTHER VOICES: This is the year we can redefine Detroit
With the dizzying activ- companies obtain much nois) aren’t lying ahead. Now I observe thousands of tal- economic tragedies of 2008 — that ity taking place in indus- greater amounts of ven- This is arguably the most impor- ented Michiganders who are, for are unique in our lifetime and try, education and govern- ture capital from else- tant development of the new ad- the first time, pursuing their could serve as the trigger for ment, it is sometimes where — so far, more than ministration and one that will help dreams of creating their own busi- tremendous growth. While noth- difficult to figure out 19 times the amount of our “economic gardening” (the forma- nesses or joining other young ing is assured, we have a once-in-a- whether our region is investment. tion and organic growth of Michi- companies — excited, nervous and lifetime chance to flip the script on moving forward or just Ⅲ (The) Capitol: The gan companies) tremendously. moving face first into the kinds of our region. moving in place. But from changes being proposed in Ⅲ Culture: Throughout my ca- risks that led to our biggest busi- If we have the courage and uni- my vantage point as some- Lansing now provide im- reer in venture capital and entre- ness successes a century ago. And fied focus, years from now we will one deeply involved in mense hope to entrepre- preneurial communities, there has their quest is being supported by look back at 2011 as the year that venture capital, alterna- neurs. The proposed new been a constant roadblock to our innovative young organizations redefined Detroit and marked the tive energy and economic Chris Rizik tax plan promises fairness region’s growth: our stubborn like NextEnergy, Ann Arbor Spark, Au- rebirth of one of America’s great development, and who has been and consistency — and combined aversion to risk and change. We’ve tomation Alley, TechTown and Biz- cities. critical of many disjointed efforts with a balanced state budget acted to preserve rather than dom U. Chris Rizik is CEO and fund in the past several years, I am demonstrates to businesses that grow. Our false security blanket of There is no question that we manager of the Renaissance Ven- more excited now about the direc- our state is seeking competitive- prosperity based on the status quo face significant challenges. But we ture Capital Fund in Ann Arbor tion in which the region is heading ness and stability, and that dra- frayed for years before shredding are in the middle of a confluence of and chairman of Detroit-based than I have been during my entire matic tax rate increases (as in Illi- completely three years ago. events — largely triggered by the NextEnergy. career. The economic meltdown of 2008 was tragic for Detroit, and our peo- ple are still reeling from its devas- tating effects. But as we sit here in 2011, I have hope — based on ob- served tangible, coordinated, uni- fied activity — that we, as a region, finally realize that a key to De- troit’s future is a level of entrepre- neurship that we haven’t experi- enced in two generations. What makes me the most bullish on our region right now is the progress that Detroit has made in what I call the “Five Cs,” the ele- ments for future entrepreneurial success: Ⅲ Cost: Wired’s Chris Anderson wrote a book last year called “Free,” describing how the costs of many business building blocks (es- pecially those related to informa- tion technology) are dropping, making it easier than ever to cre- ate a new business. That is doubly true in Detroit, where we have an abundance of physical assets available at historically low prices and a talented, reasonably priced workforce. Ⅲ Cooperation: After a long- standing tradition of parochialism by industry, location and race that held us back, we are now seeing unprecedented cooperation be- tween traditionally segregated groups ranging from city and sub- urb, to business and union, to gov- ernment and foundation. In fact, I’m involved in a pio- neering organization called Accel- erate Michigan that is working on new entrepreneurial efforts (in- cluding creating one of the na- When your capital works harder, tion’s biggest innovation competi- tions) based on partnerships of businesses, universities, founda- you can rest easier. tions and state government. The synergistic results we can obtain by collectively leveraging our sep- arate strengths are stunning. Ⅲ Capital: Without sufficient capital, entrepreneurship can’t thrive. Unfortunately, outside the automotive industry capital has long been scarce in our region. But times are changing for the positive. There are a number of Improve your cash flow and strengthen your business. new pools of money helping entre- preneurs such as the foundation- Cash flow is essential to the success of your business. Fifth Third’s comprehensive suite sponsored First Step Fund and the of Cash Management solutions can help maximize your receivables for quicker access to Michigan Pre-Seed Fund. Further, the number of venture capital. Our Business Bankers will take the time to listen, so we can recommend a customized capital funds in Michigan has tripled in the past few years. The solution for your specific business needs. Every business has a story. Tell us yours. Let’s start fund I’m honored to operate, the the conversation today. Stop in your local Fifth Third Bank, call us at 877-804-2091, Renaissance Venture Capital Fund, is the largest privately funded orga- or visit 53.com/workingcapital. nization of its kind. Using our rela- tively small investments in top- Fifth Third Bank, Member FDIC. Equal Housing Lender. tier venture capital funds and our network of major Michigan busi- nesses, we help young Michigan 20110411-NEWS--0010-NAT-CCI-CD_-- 4/8/2011 10:56 AM Page 1
Page 10 CRAIN’S DETROIT BUSINESS April 11, 2011 Republicans edge closer to Snyder’s tax plan LANSING — Amid companies, as well as The past couple of weeks have vate pension exemptions of up to Comings & goings hearings, internal cau- some smaller compa- included at least one meeting with $45,120 for single filers and $90,240 cus discussions and trial Capitol nies. the business community and meet- for joint returns. Social Security ■ Kim Trent, director of the balloons, the legislative Briefings Sole proprietorships, ings between Richardville, Bolger benefits would continue to be ex- Southeast Michigan office of for- wheels appear ready to LLCs and other individ- and Snyder. empt. mer Gov. Jennifer Granholm, has turn on Gov. Rick Sny- ually owned businesses A number of major business or- But taxing pensions has elicited become student recruitment man- der’s tax plan. would not be subject to ganizations have come together to strong opposition. ager for Michigan Future Schools. Lawmakers are re- the tax and would pay present a united front in support of One option being considered by Michigan Future Schools is a De- turning from a two-week only individual income Snyder’s tax proposal. Senate Republicans is to tax only troit-based initiative of Ann Ar- break, and in the House, tax. Those businesses “Our primary concern is that future retirees. By some estimates, bor’s Michigan Future Inc. to create hearings are expected to now pay both the MBT the business tax portion of the that could generate about a third new high schools in Detroit and its continue on both the bud- and individual income proposal remain intact as it was of the $900 million that Snyder’s inner-ring suburbs. get and tax bills, which taxes. proposed by the governor,” said proposal would generate from tax- ■ Amy Lane Paul Condino, former Democra- will start to move soon, Senate Republicans Charlie Owens, director of the Na- ing retirement income. tic state representative from said Ari Adler, press sec- had been considering tional Federation of Independent Richardville could not comment Southfield, has become vice presi- retary to House Speaker Jase Bol- raising the tax rate paid by C cor- Business-Michigan. “And the rea- on how the revenue difference dent of government relations for ger, R-Marshall. porations to 6.75 percent and hav- soning for that is that it’s a game- would be made up. the Farmington Hills-based Associ- Snyder’s proposal included both ing other business entities pay a changer as proposed, and … a real Among House Republicans, ated Food and Petroleum Dealers. business-tax changes and the more corporate income tax equal to the boon to Michigan from an eco- there are many different options ■ Andrew LaBarre, former district controversial idea of taxing retire- difference between the individual nomic development, job creation being discussed, but Adler de- administrator for U.S. Rep. John ment income. income tax rate they already pay perspective.” clined to give details or indicate Dingell, D-Dearborn, has become While various ideas have sur- and 6 percent. He also said that “on the idea of what is getting support. vice president of government rela- faced on the business-tax side, But Senate Majority Leader bringing in other entities and “No matter what plan you put tions for the Ann Arbor/Ypsilanti Re- like broadening the range of busi- Randy Richardville, R-Monroe, charging them some different rate, forward, there are going to be posi- gional Chamber. He fills a position nesses covered by Snyder’s pro- said that while “everything is still you’re ending up with complexity tives and negatives,” Adler said. posed 6 percent corporate income technically on the table,” he does- that you didn’t have before.” But in the end, lawmakers and the vacated in November by Kyle tax or raising the rate that “C” n’t think that anyone is pushing On the individual income tax governor will need to make tough Mazurek, who became a govern- corporations would pay to 6.75 for the 6.75 percent rate on C cor- side, Snyder’s plan includes elimi- choices and move ahead, he said. ment affairs associate with Com- percent, it appeared as of last porations anymore. nating most credits and deduc- “We are going into this with cast Corp. in Southfield. ■ week that Senate Republicans “I think we’re going to see some- tions and broadening the base to eyes wide open that we will never Jeff Cranson, deputy metro edi- may be moving closer to the para- thing closer to the governor’s orig- which income tax is applied — a please everyone,” Adler said. tor for the Grand Rapids Press, has meters of Snyder’s initial busi- inal proposal,” he said. move the administration says is He did not have a specific sched- been named director of communi- ness-tax plan. The additional tax on other busi- more equitable and will capture all ule for acting on Snyder’s tax plan cations for the Michigan Department Snyder’s plan would eliminate ness entities is being seriously re- individual income tax in the state in the House, but said House Re- of Transportation. He replaces Bill the Michigan Business Tax and considered, he said. at a uniform rate, regardless of publicans remain on a May 31 Shreck, who is becoming communi- impose the 6 percent corporate in- “(It) ended up being more puni- source. deadline for Capitol completion of ty outreach project manager for come tax only on C corporations, tive on the small businesses than That includes taxing public pen- the state budget and are focused on MDOT. which include most public compa- we wanted it to be,” Richardville sions, which are now exempt from getting the budget and tax plan Amy Lane: (517) 371-5355, nies and many large privately held said. state income tax, and ending pri- done on parallel tracks. [email protected] FAST INTERNET MAKES CHELI’S CHILI FASTER Catch us if you can
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April 11, 2011 CRAIN’S DETROIT BUSINESS Page 11
PUBLISHER’S NOTEBOOK
Mary Kramer CRAIN’S MICHIGAN BUSINESS Collaboration: Never too late Nearly three years ago, Peggy Dzierzawski’s father was dying. F rtified While she dealt with the inevitable, Dzierzawski knew she had the professional experience to help her father make end-of-life decisions. As president and CEO of the Michigan Downtown Battle Creek bulks up with emphasis on food Association of Certified Public Accountants, she had worked with BY MATTHEW GRYCZAN Hospice of Michigan to create a CRAIN’S MICHIGAN BUSINESS resource guide that could help patients and families prepare for the alk food with Jeff Samson, and his end of life. enthusiasm ignites like turning all She and her dad used it, then T eight burners of a Viking stove on tapped Hospice of Michigan for his high. end-of-life care. But his rapid-fire thoughts go well be- An artist rendering shows the W.K. Kellogg Institute for Food and Nutrition Research after a planned “He wasn’t supposed to last the yond the menu of his new restaurant in $54 million expansion. week,” Dzierzawski recalled recently, downtown Battle Creek. He believes that “and he lived more than 15 weeks. He every aspect of food — processing, safe- school districts in Barry, Branch and even went to the funeral home with ty, delivery — is the linchpin for Calhoun counties. me and picked out his casket. When the re-emergence of this city of Over the next year, the 45,000-square- he was relieved of all the (financial) 52,000. foot building will be renovated in a worry and free of pain, he was better Samson’s Malia Mediter- $14 million project funded equally by the and I was better.” ranean Bistro, opened about MATT GRYCZAN/CRAIN’S MICHIGAN BUSINESS Kellogg Foundation and the Kellogg Co. The resource guide, and a Hospice- three months ago, often has Jeff Samson says a sophisticated young to 25-Year Fund. The Kellogg Co. donated created workbook that helps people waiting lines — one result of middle-aged clientele for his new Malia the museum to Battle Creek Unlimited, a make decisions and discuss them an infusion of people and Mediterranean Bistro is a positive sign in central player in the city’s re-emergence with family members, are terrific tools money into downtown by downtown Battle Creek. plans. and a great collaboration between two the Kellogg Co., W.K. Kel- magnitude of Kellogg brings hundreds What were artists’ renderings and major statewide nonprofits. logg Founda- of employees to a downtown campus ... news releases are becoming reality. The idea was hatched when tion and other and you don’t listen to the reverberation At its meeting Tuesday, the Battle accountant Judy Trepeck served on entities. Two and start making adjust- Creek City Commission is slat- the board of the Southeast Michigan weeks ago, the ments, you’re crazy,” said ed to award construction hospice. “I heard the kind of Kellogg Co. Sampson, 53, who has been contracts for a $6.5 million questions that came to hospice staff held a ribbon-cutting watching and waiting five streetscaping project this members on a frequent basis,” for a location dubbed years for the optimum time summer that will close sec- Trepeck says. “Social workers and K2, where more than to open the restaurant he tions of Michigan Avenue, caregivers were being asked about 600 company employees named after his daughter. which winds through the financial decisions by people who had now work. Eddie Moore, 83 and a lo- heart of downtown. Work never used a CPA.” “When a corpo- cal institution as second- may begin as early as next So with the approval of the MACPA ration the board, she enlisted volunteers who shift attendant at the Michi- week, depending on the were experts in financial and tax gan Avenue parking ramp, weather. planning to begin compiling the guide. applies a different measure City Manager Kenneth The information is clear and useful, to Battle Creek’s new- Tsuchiyama said Battle from planning for the care of found bustle: You’re Creek may create a festival dependents and issuing advance lucky now to find a and events plaza for week- directives to planning a “green good parking spot. The failed Cereal City USA end activities that attract museum will reopen in 2012 funeral” and helping families connect Moore remem- visitors from around West bers how empty the as the new home of the Michigan. to the Social Security Administration. Battle Creek Mathematics ramp has been in re- “We created something from and Science Center. Construction starting scratch,” Trepeck said. The guide has cent years. The next week isn’t soon enough been embraced around the country by three-tier structure for Samson. accounting and financial associations, was built to accommodate visi- “The faster that people see we are se- which have adapted it for their own tors to the Cereal City USA mu- rious about wanting to turn this town states. seum. But the museum, around, the faster that people from the The resource guide complements a (Kellogg) needed to completed in 1998, outside are going to walk in here and hospice-created “Have you Had the “ closed four years ago put their money on the table” for invest- Talk Toolkit,” which offers consumers see a commitment by the and has stood vacant ment, he said. a checklist of questions and decisions since. that should be made before a health That probably The right recipe crisis occurs. community to ... make a will change soon. Nobody likes to think about these The Battle Creek By a number of accounts, 2011 is shap- things, but what’s worse is to face a major, dramatic change. Mathematics and ing up as a watershed for Battle Creek — health crisis in a family where Karl Dehn, ” Science Center will the culmination of projects and plans everyone has an opinion about what relocate from near- launched years ago that are finally the loved one “would want.” Battle Creek Unlimited by Springfield to the reaching completion. So much has hap- April is designated “financial former museum in pened piecemeal, involving so many literacy month.” Maybe that’s a good fall 2012. The cen- players, that the best way to keep every- time to resolve to consider the ter provides ac- thing straight is to follow one common inevitable — and the unexpected — celerated math thread: food. and make some decisions now. You and science In the past two years alone, there has can download the free guide, training to been a cascade of food-related news: “Financial Affairs at the End of Life,” 350 students Ⅲ A $54 million expansion of the W.K. in 16 on both organizations’ websites, See Battle Creek, Page 12 hom.org or www.michcpa.org.
JEFF JOHNSTON/CDB 20110411-NEWS--0012,0013-NAT-CCI-CD_-- 4/8/2011 10:33 AM Page 1
Page 12 CRAIN’S DETROIT BUSINESS April 11, 2011 CRAIN’S MICHIGAN BUSINESS Battle Creek: Downtown bulks up with emphasis on food ■ From Page 11 Kellogg Institute for Food and Nutri- city ever could help retain the lyst for downtown development. tion Research. highly educated and well-paid ex- The world’s leading producer of Ⅲ A $14 million investment by ecutives, researchers and techni- ready-to-eat cereals and a smorgas- one of the world’s largest food-test- cians at the Institute for Food Re- bord of other convenience foods ing companies in a laboratory to search, which was slated for posted earnings of $1.2 billion on serve the Midwest. expansion. revenue of $12.4 billion last year. Ⅲ The headquarters for a newly “There was concern by the com- The company has made Battle formed organization that serves as pany of the trend of deterioration Creek its home ever since founder the main partner with the U.S. Food that was going around down- W.K. Kellogg whipped up his first and Drug Administration to develop town,” says Karl Dehn, president batch of flaked grains, which ulti- national training for state and lo- and CEO of Bat- mately would become Kellogg’s cal food inspectors. tle Creek Unlim- Corn Flakes. Ⅲ The launch of the K2 building ited, a private, Dehn and James Hettinger, downtown, which consolidates nonprofit corpo- Dehn’s predecessor at Battle Creek several locations for Kellogg. COURTESY OF KELLOGG CO. ration that coor- Unlimited, oversaw research and Downtown Battle Creek is home to the Kellogg Co. world headquarters. While the dollars invested and dinates, plans developed a plan to leverage the square footage are impressive, it’s open kitchen — the whole experi- downtown Battle Creek has strug- and acquires area’s expertise in food science the steady rise of human activity ence of dining,” he says. gled over 50 years as suburban properties to and add emphasis in food protec- that tells downtown’s story. Two more restaurants are slated flight took hold and retailing foster economic tion, nationally and globally. Satis- “Our sales are up at least 30 per- to open this summer west of Malia moved to outlying malls. And like development. fied with Battle Creek Unlimited’s cent over last year at this time,” in the ground-floor space of the Grand Rapids and other communi- “They had con- overall direction, Kellogg’s top says Chris Stevenson, a manager parking ramp. ties, Battle Creek responded in the cerns about this Dehn brass approved the expansion of of the Arcadia Brewing Co., across A survey in February on behalf mid-1970s by bricking over a four- being a place where they could at- the Institute of Food and Nutrition the street from the Michigan Av- of the Battle Creek Downtown Part- block section of its main thorough- tract talent and recruit people, and Research in early 2007. enue parking ramp. “The average nership indicated that seven of 10 fare to create a pedestrian mall we needed to address that for their One outcome of the planning age of our customers is probably a business owners saw a marked in- downtown — only to reopen the long-term planning. was the creation of the International little lower than it used to be. We crease in customer traffic and rev- street in 1992 when the experiment “They needed to see a commit- Food Protection Training Institute, a get a lot of Kellogg employees for enue compared with July last failed. ment by the community to reverse nonprofit that is developing a na- happy hour and dinner after- year. It was hoped that Cereal City this trend and make a major, dra- tional curriculum for an integrat- ward.” But downtown finding itself would reinvigorate downtown six matic change in how we did down- ed food safety system. New types of customers are with more affluent and cosmopoli- years later. But the attraction town development.” During the past two years, the what Samson sees at Malia, too. tan residents and downtown work- closed after it mustered only about With a 157,000-square-foot ex- institute has trained more than “We have a young to middle- ers is far from a coincidence. a third of its projected attendance. pansion on the drawing boards 1,300 food inspectors from 47 states aged clientele who like fresh foods, The top management of Kellogg and a proposed consolidation of its and seven countries. It also provid- homemade pastas, local produce had discussions in late 2006 with Porter Street building and other ed emergency training for inspect- when available, scratch sauces, A frank exchange of views executives of Battle Creek Unlim- operations, Kellogg certainly had homemade dressings, view of an Like many Michigan cities, ited to determine whether the core the financial muscle to be the cata- See Next Page
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April 11, 2011 CRAIN’S DETROIT BUSINESS Page 13 CRAIN’S MICHIGAN BUSINESS
From Previous Page right now,” Atchu says, buoyed by en miles east of downtown hurt ing food products last year in re- a study from Battle Creek Unlimit- restaurant and entertainment in sponse to the BP oil spill in the We are making this progress ed that shows that office vacancy the central business district — in Gulf of Mexico. “ rates dropped to about 14 percent that the casino attracted people While Americans often think of in the face of the worst economy in January from about 28 percent who wanted to drink alcohol and federal regulators when it comes in July last year. smoke indoors. to food safety, most monitoring we’ve seen in Michigan Dehn, Hettinger and Cheryl “For the first year, we were real- and inspections are conducted un- Beard, director of commercial de- ly swimming upstream,” says der federal contracts by more than in a long time. velopment for Battle Creek Unlim- Dehn, Battle Creek Unlimited’s 30,000 state and local food techni- ” ited, speak with pride about how CEO. “But I think the appeal of cians under a patchwork of proce- James Hettinger, Battle Creek Unlimited far downtown has come in two downtown is starting to have some dures, says Ger- To create a campuslike environ- moves had to be orchestrated by years. But they are quick to men- impact. It’s a cool place to go.” ald Wojtala, ment, Kellogg shifted 600 employ- Hinman. tion that their organization owns Says Dehn’s predecessor, Het- executive direc- ees from its Porter Street complex With the 23 apartments devel- five downtown buildings that re- tinger: “We are making this pro- tor of the insti- to 140,000 square feet of leased oped in the Battle Creek Tower main vacant. Demolition is an op- gress in the face of the worst econ- tute. space in K2 and three floors in the last year — the first major project tion — even for the former J.C. Pen- omy we’ve seen in Michigan in a Since its Battle Creek Tower. Fourteen ten- in urban living for the city — the ney Co. store that Beard remembers long time. I think we have better launch in July ants that formerly leased space in tower is now 100 percent leased, as visiting as a schoolgirl. times ahead.” 2009, the insti- K2 took up residence in the Battle is K2. The opening of FireKeepers Casi- Matthew Gryczan: (616) 916-8158; tute has grown Creek Tower as well. All those “Battle Creek is a hot market no nearly two years ago about sev- [email protected] from four full- time employees Wojtala to more than 11 full-time and two part-time em- ployees.
A convergence of projects Last September, Kellogg cele- brated the opening of a 87,000- square-foot expansion of a pilot plant and a 70,000-square-foot ex- pansion of offices at the Institute of Food and Nutrition Research — creating a 400,000-square-foot oper- ation devoted to product develop- ment and process implementation. The expansion provided impe- tus for Covance Inc., one of the world’s largest companies in- volved in nutritional chemistry and food safety, to launch an ex- pansion of its own. Because of its decades-long relationship with Kellogg, Covance had employees stationed in Kellogg labs in Battle Creek. Concurrent with the Kellogg ex- pansion, Covance spent about $14 million to acquire and reno- vate a 30,000-square-foot building directly across from the institute. The lab, which opened in October, houses employees who will sup- port the work of Kellogg and other companies in the upper Midwest. More than 40 people now work at the lab. “When you look at the history in Battle Creek and broader central Michigan, there’s really the poten- tial to turn the area into almost like a Silicon Valley of food,” says James Lovett, a corporate senior vice president at Covance’s Princeton, N.J., headquarters. “Kellogg is a tremendous compa- ny, but there are other food compa- nies located there. ... There’s a lot of pieces there that can come to- gether to really drive economic growth of the area.”
‘More feet on the street’ “There would have been times in the past where you could have shot a cannon down Michigan Av- enue and not hit anyone,” says An- mar Atchu, vice president of mar- keting and leasing for The Hinman Co., based in Kalamazoo. “You would hit a lot of people now.” Over the past couple of years, Atchu and Hinman maneuvered tenants in leased space downtown to put “more feet on the street” — a phrase referenced by Kellogg Pres- ident and CEO John Bryant re- cently at the ribbon-cutting of the K2 building. Hinman owns K2 and the Battle Creek Tower across the street. 20110411-NEWS--0014-NAT-CCI-CD_-- 4/8/2011 10:28 AM Page 1
Page 14 CRAIN’S DETROIT BUSINESS April 11, 2011
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Michigan’s Bold Plan BRIEFLY Statewide groups combine ter found 121 solar-power supply- chain businesses in Michigan total- Re-Envisions Affordable Housing to push transportation agenda ing 6,300 jobs and 120 wind-power Emphasis on Green, Sustainable Projects A new coalition of business, supply-chain businesses totaling community, environmental and 4,000 jobs. About 50 companies oper- Helps Propel State in New Economic Direction other interests plans to press a ate in both sectors. transportation funding and policy For information or to register, agenda in Lansing, Washington contact Linda Haas at lhaas and locally. @svsu.edu or call (989) 964-7015. Every business challenge presents opportunities for those who are visionary Transportation For Michigan, or —Shawn Wright enough to recognize them. Trans4M, hopes to gain traction on issues such as more money for Coming May 5: List of 101 best Consider Vortex Hydro Energy CEO Gus Simiao. roads and bridges and matching funds that can leverage federal dol- companies to work for in W. Mich. An important component of making housing affordable is reducing energy lars for high-speed rail — items The Michigan Business and Profes- costs. Affordable renewable electricity can also make a big contribution to that have failed to win approval sional Association once again will the environment. despite other lobbying efforts. announce “West Michigan’s 101 “We’re hopeful we’ll be able to Best and Brightest Companies to Simiao and his Ann Arbor–based accomplish something by building Work For.” The companies will be firm has exclusive license to public awareness and awareness honored May 5 at the Pinnacle Cen- with policymakers on the need to ter in Hudsonville, 20 minutes commercialize a University of be investing in transportation,” southwest of Grand Rapids. Michigan–developed device that said Arnold Weinfeld, director of This year’s winners practice in- can produce electric power from strategic initiatives and federal af- novative strategies and represent the energy in water currents. The fairs with the Michigan Municipal best practices in human resources League, a member of the coalition. in industries as diverse as automo- technology is being tested in the Last week, the Snyder adminis- tive, insurance, hospitality, com- Detroit River but is already hailed tration last week submitted an ap- munications and nonprofit organi- as a breakthrough in marine plication to the U.S. Department of zations. renewable energy. Vortex Hydro Transportation for about $200 mil- An independent research firm lion for high-speed rail improve- evaluates each entry based on Energy is targeting its electricity ments, competing with other states communication, community ini- generation for remote communities for a share of $2.4 billion in rail tiatives, compensation and bene- that are not connected to the funds that Florida turned back. fits, diversity and multicultural- Another area of attention may ism, employee education and power grid. It can also supplement be regional funding mechanisms, communities that are on the grid, Among Michigan’s leading ‘green’ innovators development, employee engage- are (from left) Vortex Hydro Energy’s Rebecca such as a regional sales tax for in- ment and commitment, recogni- or at a smaller scale, can power Macklem, CEO Gus Simiao and Jim McBain. frastructure and transportation, tion and retention, recruitment homes, apartment buildings or Weinfeld said. and selection, small business and industrial facilities. Other coalition members are the work-life balance. Michigan Environmental Council, The winning 101 companies also Simiao and his team’s innovative approach to problem solving exemplify how Michigan Chamber of Commerce, Com- will vie for 10 elite awards — one munity Economic Development Associ- Michigan entrepreneurs are identifying opportunities and actively seizing them for each category. Also, an overall ation of Michigan, Detroit Branch winner, which has excelled in all to restore prosperity throughout our state. NAACP, Michigan Suburbs Alliance, categories, will receive a “Best of Transportation Riders United and The Similar success stories will be discussed during the 13th annual the Best” award. Winners will be Right Place Inc. in Grand Rapids. announced at the event’s lun- Michigan Conference on Affordable Housing, April 11–13, — Amy Lane cheon. at the Lansing Center. The conference is the nation’s largest event The “101 Best and Brightest of its kind and is attended by experts and advocates in housing, community Summit will shine a light on Companies to Work For” is pre- development, finance and public policy. sented annually in four markets: state’s emerging solar industry West Michigan, metro Detroit, Chicago and Atlanta. Among the highlights is a new public/private partnership – As Michigan’s solar industry continues to emerge, Saginaw Val- For more information, visit the Michigan Sense of Place Council. ley State University will host the 101bestandbrightest.com. —Shawn Wright The Council was formed to promote placemaking and public policy that Great Lakes Bay Region’s 2011 So- lar Summit on April 19 in the uni- assists Michigan’s large and small cities and towns in attracting talent, versity’s Curtiss Hall. Duro-Last Roofing names CEO sparking entrepreneurism and building affordable, energy-efficient housing. Solar industry experts and busi- The Council is dedicated to community revitalization and reducing nesses interested in installing so- – a new position for company sprawl through transit-oriented, mixed-use development and walkable lar will be able to learn, share and Thomas Saeli has been named collaborate on the solar industry neighborhoods. CEO of Saginaw-based Duro-Last and its future in Saginaw, Bay Roofing Inc., a new position created and Midland counties. by the board of directors. We’re re-envisioning Michigan’s “sense of place” by raising The event will feature two fo- Saeli was recently CEO of Noble awareness of the benefits of sustainable community revitalization. rums running simultaneously. International Ltd. Before that, he “Solar in the Great Lakes Bay was vice president of corporate de- The Michigan State Housing Development Authority (MSHDA) has partnered Region” will show presentations velopment for Lear Corp. from 1999 on industry trends, outlooks, inno- to 2006. Saeli’s experience involves with the Small Business Association of Michigan (SBAM) to produce a white vations and supply-chain opportu- paper titled “Blueprint for Propelling a New Economic Direction for Michigan” growing companies through acqui- nities. sitions, joint ventures and sales in- (https://www.sbam.org/SBAM-News/News/newsid370/283/). “Making Solar Work for Your creases. Business” will target business Besides Duro-Last, Saeli will At MSHDA and at SBAM, our goal is helping today’s leaders owners interested in installing so- oversee the operations of Duro- become stronger innovators. lar technology. The discussion will Last Roofing’s sister companies focus on understanding solar fun- Plastatech Engineering Ltd., Oscoda damentals, including cost, charac- Plastics Inc., Tip-Top Screw Manufac- That’s why we encourage our state’s best and brightest to attend teristics, implementation, avail- turing Inc., Energy Solutions Insula- the Michigan Conference on Affordable Housing. For more ability and payback. tion Inc. and JRB Personnel LLC. Michigan’s solar market has Salei has an MBA in finance and information, go to www.housingconference.org. been growing. Companies such as accounting from Columbia Universi- Midland-based Dow Corning Corp. ty and a bachelor’s in economics and Hemlock Semiconductor, among from Hamilton College. SMALL BUSINESS others, are using solar panels to Since 1978, Duro-Last has pro- AssociationA of MICHIGAN operate their companies, along duced a custom-fabricated, thermo- Focusing the power of small business. with Michigan State University and plastic, single-ply roofing system Saginaw Valley State. for flat or low-sloped commercial or A recent report from Chicago- industrial buildings. based Environmental Law & Policy Cen- —Shawn Wright 20110411-NEWS--0015-NAT-CCI-CD_-- 4/8/2011 11:02 AM Page 1
April 11, 2011 CRAIN’S DETROIT BUSINESS Page 15 CRAIN’S MICHIGAN BUSINESS West Michigan, metro Detroit Inforum groups see membership jump
BY MARTI BENEDETTI other regions regions have affinity groups, personally from these experiences.” members to stay ahead of health SPECIAL TO CRAIN’S MICHIGAN BUSINESS bring state which include smaller, specialized Drain said that at the table she care trends and network with oth- membership to gatherings for those who enjoy purchased for a recent Inforum ers about the changing field. West Don’t ask the growing member- nearly 1,800. wine tastings, arts and culture, event in Grand Rapids a woman Michigan soon may join the indus- ship of Inforum’s West Michigan re- Barclay at- book clubs, dining or outdoor ac- facing a layoff made a connection try group bandwagon. gion about the recession. tributed the tivities. Doris Drain, vice presi- with a member who knows about a Barclay said a trend now is us- The professional women’s orga- resurgence to dent of commercial loans for United job prospect. ing the organization’s connections nization has positioned itself as the economy Bank of Michigan in Grand Rapids Barclay said Southeast Michi- to do business statewide. the go-to resource to help boost stabilizing and and a founding member of Info- gan members are now going be- “I know women in West Michi- their business, even during chal- the realization rum’s West Michigan office, is in yond the affinity groups to what gan who are working on meeting lenging times. Barclay by businesspeo- an affinity group and has a variety they are calling industry groups. customers in Southeast Michigan Membership numbers at the ple that during of leadership roles. So far, the groups include Automo- through Inforum,” she added. West Michigan Regional Council of difficult times they need profes- “I find it a great place to gain tive Next, dedicated to bringing to- “Likewise, senior-level executives the club climbed sional organizations such as Info- knowledge,” Drain said. “I love the gether leaders in the automotive in Southeast Michigan want to more than 48 rum even more. networking and the contacts I make and manufacturing fields, and leverage themselves in western percent between Inforum members across all the attending the events, and I grow Health Care Next, which allows Michigan.” 2008 and 2010. “When the re- cession hit, Southeast Mich- igan got hit a lit- tle harder than us,” said Judy Welch, vice pres- Welch ident of Info- ACCURACY AND CREDIBILITY DELIVERED rum’s West Michigan office in Grand Rapids. Growth has been steady since the Grand Rapids office opened in BUSINESS VALUATIONS 2005. Its first event sold out, draw- FORENSIC ACCOUNTING ing 700. The speaker was Leslie Murphy when she was group man- EXPERT WITNESS TESTIMONY aging partner for Plante & Moran PLLC. Membership that year hit 214, followed by 343 in 2006, 465 in 2007, 445 in 2008 and 502 in 2009. Last year, it jumped to 660. Welch said membership in- creased last year because more people “are seeing the value of joining.” It costs $75 to join, and members can attend events at Info- rum’s various regions in the state, including Southeast Michigan, mid-Michigan and a formative council in Southwest Michigan. Welch said 80 percent of Info- rum’s new members come by word of mouth and the rest from the orga- nization’s corporate investor base, which has encouraged employees to join. Additionally, the West Michi- gan group has monthly, hourlong “Discover Inforum” sessions at businesses that explain what the group has to offer. She said the organization she leads made some signature moves as well. It has trained facilitators who welcome all members and provide extra help to those who are unemployed. For example, at events, facilitators seat them and introduce them to members who own companies or work for compa- nies that might be hiring. The Southeast Michigan Region- al Council of Inforum does not have trained facilitators to help members mingle, although it of- fered that service at one point. In- forum President and CEO Terry Barclay in Detroit said Southeast Credentialed Professional Support Michigan Regional Council mem- bers use Inforum a different way Doeren Mayhew provides you with the critical information necessary than their neighbors to the west. to support your business and litigation needs. We combine end-to- “Members use our events for business development and to en- end capabilities with unrivaled qualifications to accurately identify, tertain customers and clients,” she present, and support findings. Our professionals look beyond the said. “They don’t necessarily want to be seated at tables to meet new numbers to reconstruct financial information that is often hidden, people. They attend with a group identifying data that can be used in all facets of litigation and non- of people they invite.” litigation matters. Whether you’re facing challenges in the Accounting, Audit, and Tax International Tax and Consulting Barclay said Southeast Michi- Corporate Finance and Strategic Services Payroll Services gan’s declining membership num- boardroom or the courtroom, Doeren Mayhew has the experience Financial Advisory Services Litigation Support and Forensic Services bers recently “have bounced back and credentials to deliver timely, accurate conclusions and opinions. Troy, Michigan 248.244.3000 www.doeren.com with a vengeance.” Membership went from a low of about 850 in 2009 to more than 1,000 recently. Those numbers combined with the 20110411-NEWS--0016-NAT-CCI-CD_-- 4/8/2011 10:27 AM Page 1
Page 16 CRAIN’S DETROIT BUSINESS April 11, 2011 CRAIN’S MICHIGAN BUSINESS Greener on the west side: Grand Rapids leads in LEED
BY DANIEL DUGGAN fications. Lansing is second with “State by state, you’ll find a nu- LEADING IN LEED CRAIN’S MICHIGAN BUSINESS 10.7 percent of the space and De- anced pattern like there is here,” Here’s a look at LEED space in 10 Michigan cities, out of nearly 18 million troit third with 7.3 percent. King said. “It all depends on the square feet of LEED-certified buildings and office interiors in Michigan: While Detroit might be the auto But that still leaves nearly two- clients and what they are looking City Square feet Buildings/interiors % of state total capital of Michigan and Lansing is thirds of the 18 million square feet for. Some companies aren’t willing 1. Grand Rapids 3.6 million 65 19.74% the state capital, Grand Rapids is of LEED space spread across the to spend the extra money to get the 2. Lansing 1.9 million 6 10.66% the green-building capital. state. Many of the other cities with certifications. Some are commit- 3. Detroit 1.3 million 7 7.26% The West Michigan city has the high concentrations of space are in ted to the program as a corporate 4. Allen Park 828,000 3 4.61% highest concentration of buildings metro Detroit. statement.” 5. Trenton 826,000 1 4.59% and office spaces certified under Michigan isn’t unique in having LEED — Leadership in Energy 6. Holland 822,000 7 4.57% the U.S. Green Building Council’s LEED buildings spread around, and Environmental Design — was 7. Wyoming 753,000 8 4.19% LEED program. said Dennis King, corporate opera- set up by the Washington, D.C.- 8. Troy 683,000 4 3.79% Grand Rapids has 20 percent of tions officer for Southfield-based based Green Building Council to 9. Ann Arbor 672,000 7 3.73% the LEED-certified square footage Harley Ellis Devereaux, an architec- provide objective criteria to rate 10. Allendale 538,000 6 2.99% in Michigan, according to a tural firm that does business the environmental performance of Source: U.S. Green Building Council Crain’s analysis of the state’s certi- across the country. buildings and office spaces. Besides having the largest per- centage of Michigan’s LEED space, Grand Rapids dominates on the number of spaces, with 55 certified buildings and 10 certified interi- ors. The closest to Grand Rapids is Detroit, with five buildings and two interiors. Grand Rapids’ heavy LEED presence was sown by the office furniture industry, said Renae Hesselink, chairwoman of the West Michigan chapter of the Green Building Council. Grand Rapids-based Steelcase Inc., Holland-based Haworth Inc. and Zeeland-based Herman Miller Inc. were involved with the LEED movement early as they distributed office furniture to LEED projects across the country, Hesselink said. “The furniture industry has been building its supply chain around this program for a long time,” said Hesselink, who also is vice president of sustainability for Muskegon-based Nichols, a distrib- utor of custodial supplies and green cleaning products. “The furniture industry is still very active nationally on the USGBC committees, so we have a tight connection on the west side of the state,” she said. Herman Miller, for example, has two of its Zeeland buildings and their interiors certified. Steelcase has its 600,000-square- More flexible. More affordable. foot building in Caledonia certified, as well as two office spaces in near- by Grand Rapids. Haworth’s More small business-friendly. 300,000-square-foot headquarters building in Holland is also certified. But the commitment to LEED buildings is built into Grand Rapids’ philanthropic community as well, Hesselink said. Philanthropic groups that made their money from furniture — the Wege Foundation, for example, cre- ated by Steelcase founder Peter Wege — tend to push for environ- mentally responsible buildings. Running a small business is a big responsibility. Fortunately, we’re here to The Grand Rapids Art Museum, the help with a whole range of new small business-friendly plan designs—HMO, Grand Rapids Community Foundation building and the Grand Rapids Bal- PPO and EPO. Not only are they more affordable, they’re extremely flexible. let Co. are all examples of this em- phasis. You can virtually design your own plan. Many plan designs are even HSA “On all of those projects, some- compatible. Of course, they also include preventive care, our customizable where in donors you’re going to find the Wege name,” she said. wellness programs, and access to over 18,000 doctors and the leading area Harley Ellis’ King said he ex- hospitals. Contact your agent or call HAP today at (800) HAP-PLUS. pects Michigan to gain more LEED buildings as the economy picks up. “In Detroit, for example, there aren’t a lot of new buildings of any kind, let alone LEED-certified,” he said. “The LEED movement is a trend that has legs. So as we see hap.org companies starting to reap the re- wards, we’re going to see more companies looking for it.” Daniel Duggan: (313) 446-0414, [email protected] 20110411-NEWS--0017-NAT-CCI-CD_-- 4/7/2011 4:56 PM Page 1
April 11, 2011 CRAIN’S DETROIT BUSINESS Page 17
CRAIN’S MICHIGAN BUSINESS CRAIN'S LIST: MICHIGAN'S LARGEST LEED CERTIFIED BUILDINGS IN THE LEED Ranked by gross square footage Here’s a look at some of the largest buildings and interiors in Project name Michigan certified under the Rank Address Square feet of project Certification level Certification date Owner U.S. Green Building Council’s LEED program (details in lists at General Motors Lansing Delta Township Plant 1,500,000 Gold June 30, 2006 General Motors Co. 1. 8175 Millet Highway, Lansing 48917 left). Based on points for environmental features such as Chrysler Trenton Engine Plant 825,751 Gold March 10, 2010 Chrysler Group LLC energy efficiency, building 2. 2300 Van Horn Road, Trenton 48226 materials and proximity to public transportation, the projects are Blue Cross Blue Shield of Michigan * 792,630 Certified Oct. 9, 2007 Blue Cross Blue Shield of 3. 600 Lafayette, Detroit 48226 Michigan given a basic, silver, gold or platinum certification. Steelcase Wood Furniture Manufacturing Plant * 600,000 Silver Sept. 28, 2001 Steelcase Inc. 4. 4100 68th St., Caledonia 49316 LaSalle Bank Financial Center * 477,000 Gold April 26, 2007 LaSalle Bank 5. 2600 W. Big Beaver Road, Troy 48084 Metro Health Hospital * 468,801 Certified Nov. 13, 2008 Metropolitan Hospital 6. 5912 Byron Center, Wyoming 49509 Stryker Medical * 433,171 Silver N/A Stryker Corp. 7. 3800 E. Centre Ave., Portage 49002 Ice Mountain Bottling Plant 410,976 Certified Jan. 31, 2003 Nestle Waters North America 8. 19275 8 Mile Road, Stanwood 49346 Blue Cross Blue Shield of 404,040 Gold July 19, 2006 Archon Group / Ford Motor Co. Fairlane Green Phase I Michigan parking garage, Detroit 9. Fairlane Drive and Oakwood Blvd., Allen Park 48101 Fabri-Kal Kalamazoo 388,956 Silver April 22, 2010 Fabri-Kal 10. 4141 Manchester Road, Kalamazoo 49001 Skyline High School 380,450 Silver March 20, 2009 Ann Arbor Public School 11. 2555 Maple Road, Ann Arbor 48103 West Ottawa Public Schools - New High School 325,489 Certified May 12, 2006 West Ottawa Public Schools 12. 3685 Butternut Drive, Holland 49424 One Haworth Center * 308,000 Gold Feb. 19, 2010 Haworth Inc. 13. 1 Haworth Center, Holland 49423 Steelcase Wood Furniture Manufacturing Plant, Caledonia Renovation of the Motherhouse 300,000 Certified Aug. 2, 2006 St. Mary College and Academy 14. 610 W. Elm Ave., Monroe 48162 Michigan Technical Education Center - Lansing 290,536 Certified June 29, 2010 Lansing Community College 15. Community College 5708 Cornerstone Drive, Lansing 49817
Listed are buildings in Michigan that have been certified under the Leadership in Energy and Environmental Design award by the U.S. Green Building Council. Under the LEED program, buildings are awarded points based on environmental features such as energy efficiency, building materials and proximity to public transportation. Levels of certification are based on the number of points amassed. The projects are then given a basic, silver, gold or platinum certification. LaSalle Bank Financial Center, * Pictured at right. Troy SOURCE: U.S. GREEN BUSINESS COUNCIL CRAIN'S LIST: MICHIGAN'S LARGEST LEED CERTIFIED INTERIORS Ranked by gross square footage
Project name Rank Address Square feet of project Certification level Certification date Owner Metro Health Hospital, Wyoming Steelcase WorkLab * 90,000 Platinum Aug. 25, 2009 Steelcase Inc. 1. 1101 44th St. SE, Grand Rapids 49508 Walbridge Aldinger Project WOW 51,400 Silver May 26, 2010 Walbridge Aldinger 2. 1 Kennedy Square, Detroit 48226 United Way for Southeastern Michigan 50,000 Silver Sept. 29, 2010 United Way for Southeastern Michigan 3. 660 Woodward Ave., Detroit 48226 West Michigan Center for Arts and Technology 38,700 Silver Sept. 17, 2008 West Michigan Center for Arts and 4. 98 E. Fulton, Grand Rapids 49503 Technology Stryker Medical, Portage Siemens Industry Inc. 36,855 Certified Jan. 7, 2010 Siemens Industry Inc. 5. 45470 Commerce Center Drive, Plymouth 48170 Herman Miller Building B, west renovation 32,900 Gold Dec. 15, 2008 Herman Miller Inc. 6. 855 E. Main Ave., Zeeland 49464 Plante & Moran * 32,730 Gold Oct. 2, 2009 Plante & Moran PLLC 7. 634 Front Ave. NW, Grand Rapids 49504 8. Herman Miller BG main site 30,000 Certified Dec. 9, 2004 Herman Miller Inc. 855 E. Main, Zeeland 49464-0302 One Haworth Center, Holland URS 29,500 Silver Sept. 16, 2009 URS Corp. 9. 27777 Franklin Road, Suite 2000, Southfield 48034 United Building, second floor 28,800 Certified Aug. 16, 2007 Tower Pinkster Titus Associates Inc. 10. 242 E. Kalamazoo Ave., Suite 200, Kalamazoo 49007 Steelcase Global HQ 4E 28,380 Certified Feb. 18, 2010 Steelcase Inc. 11. 901 44th St., Grand Rapids 49501 Bicycle Factory - Grand Valley State University 25,603 Gold Aug. 16, 2010 Grand Valley State University 12. 201 Front St. SW, Grand Rapids 49504 13. Herman Miller Front Door Renovation 25,503 Gold Oct. 31, 2005 Herman Miller Inc. 375 W. 48th St., Holland 49423 Steelcase WorkLab, Grand Rapids Kandu Inc. 23,000 Certified March 4, 2008 Kandu Inc. 14. 11253 James St., Holland 49424 Aquinas College Academic Building 22,261 Silver June 5, 2009 Acquinas College 15. 1607 Robinson Road SE, Grand Rapids 49506
Listed are the office interiors in Michigan that have been certified under the Leadership in Energy and Environmental Design award by the U.S. Green Building Council. Under the LEED program, individual office spaces are awarded points based on environmental features such as energy efficiency, building materials and proximity to public transportation. Levels of certification are based on the number of points amassed. The projects are then given a basic, silver, gold or platinum certification. * Pictured at right.
SOURCE: U.S. GREEN BUSINESS COUNCIL Plante & Moran, Grand Rapids 20110411-NEWS--0018-NAT-CCI-CD_-- 4/7/2011 4:27 PM Page 1
Page 18 CRAIN’S DETROIT BUSINESS April 11, 2011 CRAIN’S MICHIGAN BUSINESS Pro golf tours return to tee it up in state
BY JASON DEEGAN SPECIAL TO CRAIN’S MICHIGAN BUSINESS
Better days are ahead for Michi- gan’s professional golf tournament scene, which withered away in 2010 as corporate sponsors tight- ened their belts. A new Futures Tour women’s pro- Working Capital fessional tournament in the Upper Peninsula — the Island Resort Cham- Hintz Aldridge pionship at Sweetgrass, near Escana- ba — debuts this June, nearly two Tour attracts up-and-coming years after the final Buick Open in women trying to advance to the IN ACTION Grand Blanc Township, the last LPGA Tour. major professional golf tourna- “We basically sold (sponsorship ment played in the state. opportunities) out in under a We partner with business owners across Michigan to help their second stage The real prizes come in 2012: two month,” Mancilla said. “It was a companies succeed beyond expectations. Our working capital options increase Champions Tour majors featuring huge response.” professional male golfers age 50 KitchenAid, a division of Benton cash flow and our network capital connects entrepreneurs with the people and and older and, possibly, a return of Harbor-based Whirlpool Corp., the PGA Tour to metro Detroit. signed on as presenting sponsor of resources they need to expand. For the first time, the U.S. Senior the Senior PGA Championship Open and Senior PGA Championship from 2011 through 2014. That agree- will be played in the same state. ment helped Benton Harbor land Let us put our growth capital and financial wisdom to work for your business! Yet tournament organizers don’t the tournament in 2012 and 2014. think they’re competing for media Hintz said the story behind Har- attention, corporate sponsors or bor Shores — how the entire resort fans. and real estate development is be- The Senior PGA, to be played ing used to rejuvenate the strug- HennesseyCap.com May 24-27, 2012, at the Golf Club at gling Lake Michigan city — should Harbor Shores in Benton Harbor, help attract corporate business. and the U.S. Senior Open, to be Hospitality packages include 10- held July 12-15 at Indianwood Golf & guest skyboxes for $14,000 on the Country Club in Lake Orion, will be 16th hole, 20-guest reserved skybox- separated by nearly 170 miles and es for $32,000 on hole 17 and 40-guest seven weeks’ time. The tourna- private suites for $84,000 on hole 15. ments will bring Champions Tour “It is just a good feeling when stars Tom Watson, Fred Couples you hear what they are doing” at and Bernhard Langer to Michigan. Harbor Shores, Hintz said. “We “I think we’ll have a little bit of hope it causes people to invest.” competition, but that will be good Over at Indianwood, Aldridge for everybody. It will make us said three rooms and six tables in work harder,” said Jeff Hintz, the clubhouse and four tents on tournament director for the Senior PRESENTS the course already have been sold PGA Championship. for the U.S. Senior Open. Packages His counterpart at the Senior range from $225,000 for a 100-per- Open — Keith Aldridge, vice presi- son package in the men’s grill of dent of Indianwood — expressed the clubhouse to $20,000 for 10 more concern about competition guests at a dining room table. from a potential PGA Tour event in “This summer will be a big push metro Detroit. The Detroit Golf Club for us” to sell more, Aldridge said. is actively seeking a tournament, Both tournaments expect to A sponsored webinar although a PGA Tour representa- boost their local economies. Ald- tive declined to comment. ridge said officials at the United “That would be some serious States Golf Association told him the PART ONE OF A THREE-PART SERIES competition,” Aldridge said. “I tournament will have an economic think it would hurt them and us to impact of $35 million to $40 million. have both at the same time. There Hintz said the most recent eco- Protecting are only so many dollars to go nomic impact numbers for the around.” Benton Harbor area come from the yourself At least one Michigan company 2007 Senior PGA Championship at Joe Angileri, Mark Ford, Robert Biskup, is starting to pump some of those Kiawah Island, S.C., an event that Partner, Principal , Director, dollars back into the game. In generated $23 million, according to from fraud: Deloitte LLP Deloitte & Deloitte Financial March, General Motors Co. returned the Office of Tourism Analysis at Touche LLP Advisory Services LLP to golf by sponsoring the Cadillac the College of Charleston. Data security, social media Championship in Miami. Nick The Senior Open could attract and cloud computing Twork, director of communications up to 120,000 spectators to metro Join us to learn more about: for Cadillac, said the GM luxury Detroit for the week, roughly dou- brand would “like to bring golf back ble the 60,000 people Hintz esti- Risks associated with social media (e.g. to Detroit,” but hurdles remain. mates for the Senior PGA Champi- potential damage to brand image from employee, “The biggest obstacle is the onship in Benton Harbor. customer, or other third-party postings). date,” Twork said. “There aren’t a Behind the scenes, contracts are whole lot of open weekends (on the being negotiated with local busi- Protecting your business when an out-of-sight, PGA Tour schedule) at this point.” nesses. Aldridge said the Warren- If the Island Resort Champi- based Andiamo Restaurant Group out-of-mind myriad of computer tasks happen on onship at Sweetgrass is any indica- will handle catering at the Senior April 28|Noon – 1 p.m. EST someone else’s equipment, i.e., in “the cloud”. tor, other Michigan companies ap- Open. He’s in talks to attract one of pear ready to invest in tournament the Detroit automakers as a car To learn more, please visit Preventing fraud, and mitigation strategies to golf. Tournament co-Chairman sponsor. Lexus is the national car www.crainsdetroit.com/crainsevents consider if/when fraud occurs. Tony Mancilla said his event, at sponsor of the USGA. the Island Resort & Casino, attracted Said Aldridge: “It would look FREE to Crain’s readers 22 major sponsors, including three pretty disappointing if we had just banks and a hospital. The Futures Lexus in the parking lot.” 20110411-NEWS--0019-NAT-CCI-CD_-- 4/7/2011 4:26 PM Page 1
April 11, 2011 CRAIN’S DETROIT BUSINESS Page 19 CRAIN’S MICHIGAN BUSINESS Golf course owners see fog lifting
BY JASON DEEGAN more choices for people to play. We SPECIAL TO CRAIN’S MICHIGAN BUSINESS have changed some of the price structures, but we also looked at the After several years of pessimism times and days that we needed peo- and doubt, golf course owners and ple (to fill up empty tee sheets). We operators around the state feel adjusted some twilight rates by good about their prospects for the changing the time of the day. We coming season. made specials for local people. We Positive signs — auto industry are trying to fill as many tee times bonus checks, pre-sold golf pack- with different price structures than ages at Michigan golf shows, the we ever used to.” continued funding of the state’s Growing the game and attract- Pure Michigan tourism promotion ing new players, including women campaign, the pent-up enthusiasm and juniors, remain major prob- of winter-weary golfers and better lems, however. vibes from the economy — all add “We’re building some momen- up to hope, something in short sup- tum,” said Graham of the Golf Asso- ply in recent years. BRIAN WALTERS ciation of Michigan. “Is that going According to Golf Datatech, an in- Shepherd’s Hollow in Clarkston is one to lead to growth year after year? I dustry research firm in Kissim- of the public courses expected to see hope so. I feel more bullish today mee, Fla., rounds of golf in the a bump in rounds played. than I have in quite a while. We’re state were down 1.6 percent last “There are very few country moving in the right direction.” year from 2009. But that number clubs that are stable,” Richards outperformed the national average said. “The middle-of-the-road coun- decline of 2.3 percent. try club has lost half its members. Gaylord Golf Mecca, a marketing That just freed up $6,000 to $8,000 to alliance of 21 courses near Gay- play at Shepherd’s Hollow (a 27-hole lord, reported a 4 percent increase course in Clarkston) and play up in rounds played last year. Paul north.” Beachnau, executive director of Joe Basso, secretary-treasurer the Gaylord Area Convention and Visi- of the Detroit Club Managers Associa- tors Bureau, which oversees the al- tion, said metro Detroit is oversat- liance, expects 3 percent to 5 per- urated with private clubs. David cent growth in rounds played this Graham, executive director of the season, a number Beachnau said Golf Association of Michigan, said he SM was conservative. can envision a future with fewer HEALTHBYCHOICE ACHIEVEMENTS. “The turnaround of the auto private clubs throughout the state. companies has been huge. People Basso, general manager and CEO are starting to put some money of Birmingham Country Club, said his back in their pockets. With high club has been fortunate, adding A NEW WAY TO IMPROVE YOUR gas prices, that will be to our bene- members the past 18 months. fit, too. People will stick close to “You’ve got clubs in the area that home.” have lost 50 to 100 members over BOTTOM LINE. Kevin McKinley, director of golf the past two to three years,” he at Treetops Resort in Gaylord, said said. “They are surviving, but they “the efforts of Travel Michigan and are having to reinvent them- the Pure Michigan golf campaign selves.” over the past few years, including Discounted greens fees are the the use of local Gaylord footage in new normal at public courses look- national media buys, has helped to ing to attract more players, al- increase our out-of-state golf busi- though some think the practice ness, which is higher than it ever must be scaled back for long-term has been.” success. Dave Richards, owner of Resort Jim Dewling, president of Total & Golf Marketing in Bloomfield Golf Inc., which operates seven Hills, said an informal poll last courses in Michigan, said Mystic year indicated that 10 percent of Creek, a 27-hole course in Milford, the business at high-end courses attracted 2,000 more rounds last he contacted came from out-of- year than in 2009. But discounting state golfers. He said one of his cut into a stagnant bottom line. clients, Forest Dunes Golf Club in “The revenue came from the dri- Roscommon, saw its rounds in- ving range and pro-shop sales in- crease 29 percent last year. stead of the greens fees,” Dewling “The group business is coming said. “Rounds are all driven by back. ... People are willing to spend price point. ... We’re all stealing more money,” Richards said. (customers) from each other.” Enhancing that economic im- Bernie Friedrich, vice president pact: The state now has fewer of golf, marketing and retail at courses competing for those addi- Boyne USA Resorts, takes a different tional dollars. approach. He thinks that creative The meltdown of the economy golf packaging last year helped changed the golf industry in Michi- Boyne have its best year since gan. There is less competition to- 2006. The company owns and oper- day — nearly 30 18-hole courses and ates eight courses and three re- as many as 25 nine-hole and shorter sorts in northern Michigan. so-called executive courses closed By offering so many choices and As health care costs climb and worker health declines, in the state over the past decade. prices, Boyne increased the num- The Traverse City area was hit ber of rounds of golf nearly 10 per- employers are asking for more from their benefits plans. We particularly hard, with three top- cent, Friedrich said. Some pack- can help. Our new HealthbyChoiceSM Achievements plan notch courses closing since 2008: ages included breakfast. Packages combines excellent benefits with opportunities to improve High Pointe and LochenHeath, both with unlimited golf were popular. your employees’ health and reduce costs — theirs and yours. in Williamsburg, and King’s Chal- The key, Friedrich said, is “get- lenge in Cedar. LochenHeath and ting the price of golf where the Call your agent or Priority Health at 800 471-2504 or visit King’s Challenge, now called Mani- masses can afford it, so the masses priorityhealth.com to learn more. tou Passage, have since reopened can play and grow the game.” under new owners. Richards calls northern Michigan The surviving public courses one of the best value golf trips in should benefit from the declining the country. memberships of private clubs. Said Freidrich: “We have a lot DBpageAD.qxp 4/5/2011 9:59 AM Page 1
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April 11, 2011 CRAIN’S DETROIT BUSINESS Page 21
general and in-house counsel awards In-house attorneys’ role in complicated times: Guides
through the maze ISTOCKPHOTO.COM From automaker bankruptcies to the Awards. More than 60 attorneys were lude towards retirement are long gone.” ness Law Section and the Oakland County reinvention or sale of major companies in nominated, and nine winners and final- Judges (see below) looked at evidence Bar Association. The awards will be pre- Michigan, the best legal minds shepherd- ists were selected in six categories. of significant achievements to idenfity sented in an evening reception and ing those transactions don’t always work Standout corporate and in-house counsel the winners. Examples include transac- strolling dinner that follows an afternoon for law firms. As in-house and general attorneys navigate complicated contract tions, cost containment and community summit with speakers, panels and educa- counsels, they serve a single client — the negotiations, defend their companies in legal service. tional sessions. The event will be held at company that employs them. high-stakes litigation and defend some of The May 3 summit and awards event to the Suburban Collection Showplace in Novi. This year, Crain’s joined three profes- an organization’s most important assets. honor the winners is presented in part- For a more detailed story on the awards sional organizations to create our first- As one nominee noted: “The days when nership with the Association of Corporate event and summit, see Page 29. To regis- ever General and In-House Counsel in-house counsel could be viewed as a pre- Counsel, the State Bar of Michigan’s Busi- ter, visit www.crainsdetroit.com/events
ment bailout amid the economic Overall Winner collapse in late 2008 but also has THE HONOREES slowed its efforts to return to an in- The contest judges felt so strongly t a glance, the legal strategy vestment-grade credit rating. about the accomplishments of at Ford Motor Co. under The SEC and capital markets David Leitch (left) of Ford Motor A David Leitch may seem team, a division of the corporate Co. that they created an overall counterintuitive — hold the line on and commercial practice group, winner category to provide special litigation, avoid delegating to out- oversees public disclosures updat- recognition. Other honorees: side firms, give your team members ing investors on its debt, which was Publicly Traded Companies, added responsibilities and eventual- reduced by $14.5 billion during 2010. Revenue Over $1 Billion ly you will have less work to do. The company also in February Winner: Todd Wiseley, Valassis But it seems to have worked. obtained final approval before U.S. Communications Inc., Page 22 Leitch, group vice president and District Judge Stephen Murphy in Finalist: Robert Spence, SPX Test general counsel at Ford for six Detroit on a settlement without and Measurement, Page 22 years, said the Dear- damages with a class of salaried and Publicly Traded Companies, UDGETS born automaker has hourly employees who sued in 2006 Revenue Under $1 Billion B cut his department for violations of the federal Employ- Winner: Jay Knoll, Energy Corporate about in half ee Retirement Income Security Act. Conversion Devices Inc., Page 24 Counsel through buyouts and At issue in that case was whether Finalist: Chris Heaphy, Taubman prez: Don’t structured cuts since Ford should have offered options Centers Inc., Page 25 expect spending to he took the post. To- within 401(k) plans that included Privately Held Companies, pick up with day around 100 attor- Ford stock, or advised employees Revenue Over $1 Billion economy, neys work in litiga- on the stock value, when it plunged Winner: David Sherbin, Delphi Page 32 tion, corporate and in the past decade while the compa- Automotive LLP, Page 25 commercial, intellec- ny went through employee buy- Finalist: Holly Leese, Chrysler tual property, tax law and regulato- outs, layoffs and lost market share. Group LLC, Page 26 ry compliance practices, plus the The company agreed to offer ad- Privately Held Companies, company’s general auditor’s office. visory services to employees on Revenue Under $1 Billion But Ford legal has adapted retirement investments, in lieu of Winner: Gabe Karp, ePrize LLC, through team members “wearing DAVID LEITCH damages, and paid less than Page 26 more hats” and finding greater de- $1.3 million to cover attorney fees Age: 50 Nonprofit partmental efficiency. Leitch said Title: Group vice in the settlement. By comparison, his department also makes initial General Motors Corp. in 2008 settled Winner: Carol L.J. Hustoles, president and general Western Michigan University, assessments on all litigation and counsel for $37.5 million a 401(k) class ac- Page 28 then prepares to take all cases to Company: Ford Motor Co. tion filed in 2005, after its stock trial after that stage. Claim to fame: Advising had dropped 75 percent. AWARDS JUDGES As a result, Leitch estimates law- Ford and overseeing “We made some good judgments suit caseloads dropped from around disclosures on the private early on in choosing not to settle Rob Kurnick Jr., president, 2,500 pending claims a few years ago borrowing that allowed the the case but also in making deci- Penske Automotive to about 2,000 today. He also esti- automaker to avoid a sions that really set the value of Michael Polotzke, CFO, mates that the automaker prevails government bailout, and its it,” Letich said of the Ford labor Plastipak Holdings Inc. in 80 percent of matters that go to subsequent $14.5 billion case. “It’s a little harder for the Lisa DeMoss, director, graduate trial, so the total payout on court reduction in debt. plaintiffs to make a case in court insurance program, Cooley Law judgments is lower over time than if that we should have advised them School (former Blue Cross Blue DAVID DALTON Shield of Michigan general counsel) the company had settled cases. not to invest with us after our The trial-ready strategy also is term strategy that only works if they were heavily involved in Toy- stock price went on later to make a Lorraine Shaloub, vice president, general counsel. intended as a deterrent to plaintiff you’re willing to execute it over an ota (over uncontrolled acceleration) very substantial rise.” External affairs and public policy firms looking for early settlements extended period. and factors that aren’t related to us.” The company also boasts a for Chrysler Canada on cases of marginal worth. “Our caseloads are down signifi- Leitch’s team also advised the 77 percent participation rate in pro Lloyd Semple, dean, University “This strategy started before I cantly, though showing the exact company in a 2006 mortgage of most bono legal work, including volun- of Detroit Mercy School of Law got here, so I can’t take credit for cause-and-effect is a tricky thing. of its assets to borrow $23.5 billion teer work for legal clinics or tax ad- Janet Kelley, senior vice president it — but we constantly tweak and The plaintiffs’ bar can also get dis- to finance restructuring, a move vice to low-income taxpayers. and general counsel, Meijer Inc. refine it,” he said. “And it’s a long- tracted, and we know for a while that helped Ford avoid a govern- — Chad Halcom 20110411-NEWS--0022,0023-NAT-CCI-CD_-- 4/7/2011 4:22 PM Page 1
Page 22 CRAIN’S DETROIT BUSINESS April 11, 2011 Focus: General and In- Ho Publicly Traded Companies, Revenue Over $1 Billion
cooley.edu TODD WISELEY Age: 41 Title: General counsel and senior vice president of administration and corporate secretary Company: Valassis Communications Inc., Livonia Claim to fame: Coordinated and led four law firms in Valassis’ successful lawsuit against its archrival that Cooley ended with a $500 million settlement.
odd Wiseley graduated from Year-round the University of Michigan’s T law school in December 2007 It was a big and became a full-fledged lawyer “ Options the following May — a career move project to jump into sought for him by his employer, right off the bat. ... It Winner Livonia-based January • May • September direct-mail and undoubtedly could be newspaper coupon marketer Valas- sis Communications Inc. the biggest case in RON, CLASS OF MAY 2011 He would end up quarterback- ing Valassis’ successful litigation my career. against Rupert Murdoch-owned ” At Cooley, many people are finding that it is possible to fit law school into their busy lives. competitor News America Marketing Todd Wiseley, Valassis Communications Inc. With four campuses across Michigan – Lansing, Auburn Hills, Grand Rapids, and Ann Arbor – Inc. in an unfair-competition case. The archrivals share the entire Cooley offers classes year-round, days, evenings, and weekends. Students receive a legal education U.S. coupon market. shared mail service for 10 years. that provides them with the knowledge, skills, and ethics that distinguishes Cooley’s over 15,000 News America settled for Wiseley had been working as a $500 million in January 2010, on the CPA on the finance side since 1992, graduates worldwide. eve of a trial before U.S. District but Valassis in 2005 told him it Learn about Cooley Law School at cooley.edu Court Judge Arthur Tarnow. Part wanted him to be a lawyer. He of the deal was an agreement that News America would use Valassis’ See Next Page Thomas M. Cooley Law School is committed to a fair and objective admissions policy. Subject to space limitations, Cooley offers the opportunity for legal education to all qualified applicants. Cooley abides by all federal and state laws against discrimination. In addition, Cooley abides by American Bar Association Standard 211(a), which provides that “a law school shall foster and maintain equality of opportunity in legal education, including employment of faculty and staff, without discrimination or segregation on the basis of race, color, religion, national origin, gender, sexual orientation, age or disability.” Scan this code to learn more about Cooley Publicly Traded Companies, Revenue Over $1 Billion ICG.0311.037.AD ROBERT SPENCE Age: 54 Title: Vice president of business development and general counsel Company: SPX Test and Measurement, Canton Township Claim to fame: Leading SPX through several acquisitions, including three in four months.
ver the past seven years, France, Germany and Scotland. Charlotte, N.C.-based SPX Spence was able to get the deals O Corp. grew its footprint done quickly because of his knowl- through more than a dozen acqui- edge and understanding of legal is- sitions, largely on the back of its sues and business development, in-house coun- said Tom Riordan, president and sel team led by CEO of Neenah Enterprises in Finalist Robert Spence. Neenah, Wis., and former group Spence, vice president at SPX. president of business development “Bob has a good sense of exist- and general counsel for SPX and ing business and how to put a deal based in Canton Township, navi- together,” Riordan said. “Because gated three acquisitions in just three months during 2007 — in See Next Page
HERO NOMINATIONS WANTED Crain’s Detroit Business responsible for a is seeking nominations discovery or for developing for Health Care Heroes, a a new procedure, device special report on health or service that can save care professionals that will run in lives or improve quality of life. the Sept. 12 issue. Physician — Honors a physician The program will honor top-notch whose performance is considered medical innovators and patient exemplary. advocates — the inspiring leaders Allied health — Honors an who bring new meaning to the word individual from nursing or allied “dedication” through their efforts to health fields deemed exemplary by save lives or improve access to care. patients and peers. Winners will be chosen in five Trustee — Honors leadership categories: and distinguished service by a Corporate achievement in health health care trustee. care — Honors a company that has A panel of health care judges will created an innovative health choose the winners. Visit benefits plan or has solved a www.crainsdetroit.com/nominate to problem in health care submit a nomination. The deadline administration. is May 6. Questions? Contact Advancements in health care — Jennette Smith at (313) 446-1622 Honors a company or individual or [email protected]. 20110411-NEWS--0022,0023-NAT-CCI-CD_-- 4/7/2011 4:23 PM Page 2
April 11, 2011 CRAIN’S DETROIT BUSINESS Page 23 In- House Counsel Awards
From Previous Page dominate. graduated in two-and-a-half years The Wayne County verdict was and was promoted to general coun- under appeal, but the federal court sel on July 1, 2009. settlement resolved both the feder- That meant he was Valassis’ in- al and state court matters, along house lead on the News America with a separate civil case at Los An- cases that had been in three differ- geles County Superior Court. ent courts since 2006, and he had to Now that the News America liti- coordinate the activities of the law gation is over, there’s a sense of re- firms the company was using: lief personally and among Valassis Miller, Canfield, Paddock and Stone executives, Wiseley said. PLC, Ann Arbor; Plunkett Cooney “It was obviously a historic PC, Bloomfield Hills; David Mendel- event in our company’s history,” son PC, Birmingham; and The he said. “There was a sense of Baskin Law Firm PC, Detroit. ‘Wow, I can’t believe it’s over.’ ” Innovative legal “It was pretty much a baptism by There’s also a little humor at the fire,” he said. “I had to really get up expense of the rookie general to speed and be the primary liaison counsel. strategies to for four local law firms that were “There were a lot of jokes about representing us. It was a big project peaking too early,” he said, chuck- to jump into right off the bat, for ling. help build your Valassis or any general counsel, pe- Wiseley was the only in-house riod. It undoubtedly could be the attorney working on the cases. biggest case in my career.” Three others in the internal legal business - one Valassis had been seeking $1 bil- department handled the day-to-day lion in damages. business of running the legal side It won a $300 million jury ver- of the company. block at a time. dict against News America in July Now he’s working on the legal 2009 before Wayne County Circuit paperwork stemming from the set- Judge Michael Sapala for unfair tlement. He also oversees the com- competition and tortious interfer- pany’s human resources depart- ence with business practices. ment, but the News America case Valassis alleged that News is never too far from his mind. America coerced client companies “I stop once a month and pinch Learn more at How can we assist? to participate in its freestanding myself. I can’t believe it’s behind P: 248.539.9900 insert, or FSI, newspaper products us,” he said. FOSTERSWIFT.COM E: [email protected] in markets where Valassis tends to — Bill Shea
From Previous Page LANSING | FARMINGTON HILLS | GRAND RAPIDS | DETROIT | MARQUETTE | HOLLAND of his financial and legal experi- ence, he can play the good cop or (Spence) has a bad cop in putting deals together, “ balancing the legal side and finan- good sense of cial liabilities without having to leave the negotiating room.” existing business SPX’s most recent transaction, led by Spence last summer, al- and how to put a deal lowed SPX to enter the China mar- together. ket by taking a minority stake in ” Launch Tech Co. Ltd. in Shenzhen. Tom Riordan, Neenah Enterprises “Entering these strategic mar- kets gave us the ability to show off motive test and measurement unit, our entire product portfolio, even which Spence works for, is based if the company represents only a in Canton Township. Spence was small part our overall goals,” he also the founding member of the said. Legal Issues Council for Troy- Since Spence joined SPX in 2001, based professional organization the manufacturer of equipment for Original Equipment Suppliers Associa- the power, auto and industrial in- tion. He served as chairman of the dustries has grown revenue from council in 2003. $3.9 billion to $4.9 billion. Its auto- — Dustin Walsh
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Page 24 CRAIN’S DETROIT BUSINESS April 11, 2011
Professional Jet Management Focus: General and In-House Counsel Awards Publicly Traded Companies, Revenue Under $1 Billion
just in money but also in time. You JAY KNOLL want to avoid it if you can.” Age: 47 Last year, ECD thought it might Title: General counsel and chief administrative officer be facing a possible lawsuit by a Company: Energy Conversion Devices Inc., Rochester large Chinese battery maker that Hills was considering not renewing a li- Claim to fame: A savvy negotiator who balances ECD’s cense. The key to a settlement, said need to protect intellectual property with a common- Knoll, was understanding the li- Experience the difference. sense approach based on the cost of litigation. censee’s need for ECD to be flexi- ble “and for us to have the disci- All inclusive management at an affordable fi xed cost. pline not to overreach in our nergy Conversion Devices has demands or to overreact when our •Forming partnerships now about 250 patents and has de- licensee’s demands didn’t meet out expectations. •Small, midsize and large cabin jets E veloped a reputation as an Litigation is very innovative but relatively small “ “We got the license renewed to •Reduce your total operating cost company on the worldwide stage. costly, not just in our satisfaction. Did we get all we •Maximize your aircraft effi ciency But it’s one wanted? No. Did they get every- while enhancing your aircraft that is willing to money but also in thing they wanted? No. But we Winner both got something we could live appearance, performance & value www.skywayavjets.comwww skywayavjets com litigate fiercely to protect its in- time. You want to with.” tellectual property. Knoll said his legal team was also Call today for more information, Geoff Sherman 1.248.568.0979 In fact, its two main business avoid it if you tested last year by ECD’s changing thrusts are the manufacturing business model. Over the past 12 and installation of its flexible so- can. months, it has evolved its solar lar roofing materials for large ” business from simply providing construction projects and licens- Jay Knoll, roofing materials for contractors to No one covers the ing its patents — particularly Energy Conversion Devices Inc. managing and developing large Detroit Regional BONUS patents involving nickel-metal roofing projects on its own. hydride batteries for consumer That required much more com- DISTRIBUTED TO ALL MACKINAC counsel and chief adminstrative Chamber Mackinac use. officer, said the secret is being able plex legal work. Instead of just CONFERENCE ATTENDEES Nearly every maker, if not all to reach an agreement short of a signing off on a contract to supply Policy Conference makers, of AA and AAA batteries lawsuit that leaves both ECD and a material to a project manager, Crain’s PLUS! DIGITAL DISTRIBUTION for consumer use worldwide have licensee satisfied. ECD now has to handle permits, like to 50,000 Web readers license agreements with ECD. “Our patent portfolio is battle- roof leases and contracts with sup- AD CLOSE: May 12 ECD’s annual revenue is $300 mil- tested, and we’re battle-tested in lit- pliers. “It’s far more complex and lion. igation,” said Knoll, who has been requires far more engagement and For advertising opportunities, call Marla Downs But lawsuits are time-consum- ECD’s general counsel for 10 years. creativity,” said Knoll. at 313.446.6032 or e-mail [email protected] ing and costly. Jay Knoll, general “But litigation is very costly, not — Tom Henderson Turn to the “deal-makers” at Howard & Howard.
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April 11, 2011 CRAIN’S DETROIT BUSINESS Page 25
Focus: General and In-House Counsel Awards Exceptional Leadership. Publicly Traded Companies, Revenue Under $1 Billion Privately Held Companies, Delivered. Revenue Over $1 Billion CHRIS HEAPHY Age: 53 DAVID Title: Senior vice president, general counsel and secretary SHERBIN Company: Taubman Centers Inc., Bloomfield Hills Age: 51 Claim to fame: Keeps the legal team involved early Title: Vice on in business processes, such as retail leasing, to president, speed things up and head off problems. general counsel and chief he most important legal is- Heaphy and the legal depart- compliance Michigan’s Premier Retained sues Chris Heaphy has re- ment are closely involved with officer T solved are perhaps the ones the company’s business units to Company: Delphi Automotive Executive Search Firm that didn’t occur. advise on business deals early on. LLP, Troy Heaphy, general counsel for And there’s no shortage of deals: Claim to fame: Navigating Bloomfield Taubman owns 26 malls across Delphi through its four-year Hills-based the country and signs leases regu- Chapter 11 bankruptcy in which Finalist Taubman Cen- larly. the supplier shed nearly $6 billion in debt and $22 billion ters Inc., has Part of being involved means LLC in liabilities. made it a priority that employees knowing how to help. He recently International Executive Search can raise issues or concerns moved the legal leasing function Tel: +1.248.645.1551 • www.huntergroup.com anonymously and without fear of in-house to speed up the leasing avid Sherbin faced the retribution. Through that, he’s process for potential tenants. challenge of his career in been able to reduce claims “That’s the advantage of having D October 2005 when his em- through early intervention. a general counsel, that you can ployer, then-Delphi Corp., filed “They have many ways to com- get involved early in the business Chapter 11 bankruptcy. municate with us, anonymously, meetings,” Heaphy said. He led a not anonymously, by phone, by Before joining Taubman in Winner team of in- email,” he said. “We keep posters June 2005, Heaphy represented house and ex- on the walls in the kitchens and Taubman for nearly 20 years. He ternal lawyers break rooms, and make sure the represented the company for 19 through four years of litigation information is available.” years at Miro Weiner & Kramer PC. involving a securities class-ac- It’s part of a larger compliance When the firm dissolved in 2004, tion suit, contract disputes with program focusing on extensive Heaphy went to work for Honig- the United Auto Workers and its for- training and education. Training man Miller Schwartz and Cohn and mer parent General Motors Corp., and education starts on the first continued to represent Taub- and a pullout by its reorganiza- day for company employees, fol- man. tion sponsors in 2008 during the lowed by regular retraining. — Daniel Duggan See Next Page 2 We get you
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Page 26 CRAIN’S DETROIT BUSINESS April 11, 2011
From Previous Page Privately Held Companies, industry downturn. “We had an extraordinarily Revenue Over $1 Billion complicated legal strategy,” he said. “We had to settle all the HOLLY LEESE bankruptcy issues as the econo- my was imploding, which at the Age: 55 time was unprecedented.” Title: Senior Delphi — which supplies vice president, general counsel electronics, entertainment sys- and secretary tems, and thermal, powertrain Company: and safety technology to the au- Chrysler Group tomotive industry, as well as LLC medical and consumer equip- Claim to fame: ment — exited bankruptcy in Overseeing and preparing October 2009 when Elliott Man- argument and brief templates for agement Corp. and Silver Point arbitration appeals by dealerships Capital LP acquired its assets, al- appealing their termination. lowing the supplier to emerge. Delphi shed nearly $6 billion in debt and $22 billion in pension, union and retiree liabilities. “Our entire legal team did a phenomenal job (through bankruptcy), and David’s lead- Privately Held Companies, ership was the cornerstone of that success,” said Rodney Revenue Under $1 Billion O’Neal, Delphi’s CEO. “He was a force and absolutely critical GABE KARP in leading us through to a bright future.” Age: 41 Earlier this month, Delphi Title: announced it would buy back Executive vice I’M AN MSU LAW ALUM... president and GM’s equity stake in the suppli- general counsel er for $3.8 billion to simplify its Company: capital structure and acquired EPrize LLC, Preparing future lawyers to use the Pension Benefit Guaranty intellect, ambition, and ethics Pleasant Ridge Corp.’s ownership stake for Claim to to solve the world’s problems. $594 million. fame: Leading ePrize through the www.law.msu.edu Sherbin serves as the first legal nettles of sweepstakes vice president of the Adat promotions based on new Shalom Synagogue in Farming- communications technologies. ton Hills and will serve as its president in 2012. n 2004, when Gabe Karp joined — Dustin Walsh what was then a 5-year-old I provider of online sweepstakes services to some major brands, he We had to settle was heading into uncharted legal “ territory. all the bankruptcy EPrize was Winner trying to get issues as the into sweep- stakes campaigns using text mes- economy was sage systems. The question at the time, he said, imploding, which wasn’t so much about existing laws regarding online sweepstakes — at the time was there weren’t any — but what other laws might be used against them. unprecedented. With brands such as Nextel and ” Coca-Cola among the early cus- David Sherbin, tomers asking for text-based cam- Delphi Automotive LLP paigns, Karp knew there would be 20110411-NEWS--0026,0027-NAT-CCI-CD_-- 4/7/2011 3:42 PM Page 2
April 11, 2011 CRAIN’S DETROIT BUSINESS Page 27 Focus: General and In-House Counsel Awards
icking the right battles — wasn’t prudent for a recipient of in its practice groups for corporate Leese said Chrysler legal lost sev- and spotting the top talent U.S. Treasury funds.” affairs, commercial affairs, trade- eral people in that period but offset P — have helped Holly Leese It was far more Instead, Chrysler in 2010 resolved marks, patents, employment, trade the downsizing with a “serendipi- navigate the tricky legal waters of “ disputes with 310 of the 418 dealer- and distribution and product lia- tous” influx of new talent. bankruptcy re- difficult than any ship claims in the federal arbitra- bility, including five attorneys in The automaker picked up new Finalist organization, tion process short of a hearing. Mexico and two in Canada. attorneys from the nation’s top staff cuts and one of us expected. The company prevailed in 76 of That’s around the same size as law firms that shed jobs after the the global eco- In fact, we had the 108 cases that reached a final before bankruptcy, when Robert lending market collapse that dried nomic downturn. outcome. Nardelli became chairman and a up several of their major practice Leese, a Chrysler staff attorney wanted to bring a Leese said 16 of the 32 winning series of buyout offers began to groups in early 2009. for 31 years and senior vice presi- dealers received letters of intent or trim the staff. — Chad Halcom dent, general counsel and secre- constitutional resolutions after the hearings; an- tary for the automaker since 2008, other 16 are litigating terms of rein- said up to half of her current staff challenge. statement in various courts, with FOR LEASE was involved in the national ” the lion’s share in Detroit. streamlining of dealers during re- CRYSTAL GLEN Holly Leese, Still, about 90 percent of all cas- 39555 ORCHARD HILL PLACE organization. Chrysler Group LLC es were resolved for “substantially NOVI, MI “It was far more difficult than less” than what a full arbitration any one of us expected. In fact, we was set up (by Congress),” she would cost, she said. had wanted to bring a constitu- said. “But we weren’t in a political Chrysler legal has 48 attorneys tional challenge to the process as it position to do that, or at least it
no way to fly under the radar. able to steer ePrize away from en- up promotions — whether the pro- “When you’re doing something tanglements with lottery regula- motions are run by ePrize or not. for Coca-Cola, you can’t hide that,” tions and subsequently became a His work caught the attention of Karp said. sought-after expert on modern the Puerto Rican government. In The main problem was that of a sweepstakes campaigns. He said 2009, the island wanted to rewrite concept associated with lotteries he has spoken at 30 conferences its regulations pertaining to called “consideration,” meaning is about online and text-based sweep- sweepstakes and invited Karp to there a financial cost to the con- stakes, related privacy issues and help. The regulations went into ef- » Beautifully Finished Suites FOR MORE INFORMATION PLEASE CONTACT: sumer when choosing to acquire online customer reward programs. fect later that year, turning the is- From 667 - 15,360 SqFt the ticket. EPrize today reports annual rev- land from a place notorious for its DAN VERDERBAR » Upgrade Your Image, Without [email protected] With a lottery, the answer is a enue of $49 million. difficult sweepstakes regulations Increasing Your Costs clear “yes” because the purchase Recognizing an opportunity to to one with a near-perfect model » Highly Visible, Easy to Locate, of a ticket is required to partici- use ePrize’s rare legal experience, that states can follow, Karp said. Professional Class A Offi ce Space 248.324.2000 pate. In the case of a text message, he turned ePrize’s legal department The rewrite means the common » Amenities Include: Café, Hair Salon, WWW.FRIEDMANREALESTATE.COM which can have a small fee from a cost-containment center to a verbiage on contests saying “void Tenant Conference Facility, Full charged for it by the mobile carri- profit-making one by offering cus- in Puerto Rico” could become a Service On-Site Management offi ce eCODE 160 er, the answer is less clear. tomers indemnification against law- thing of the past. INFORMATION IS SUBJECT TO VERIFICATION AND NO LIABILITY FOR ERRORS OR OMISSIONS IS ASSUMED. WE HAVE NO REASON TO DOUBT ITS ACCURACY, BUT WE DO NOT GUARANTEE IT. As general counsel, Karp was suits and consultations on setting — Gary Anglebrandt 20110411-NEWS--0028-NAT-CCI-CD_-- 4/7/2011 3:40 PM Page 1
Page 28 CRAIN’S DETROIT BUSINESS April 11, 2011 Focus: General and In-House Counsel Awards Nonprofit “It is a continuing, proactive, versity’s two foundations. CAROL HUSTOLES preventative approach throughout Hustoles said her risk manage- It is a continuing, Age: 58 each and every day that I am at the ment efforts have included a focus “ Title: Vice president for legal affairs and general university,” Hustoles said. “We on having people throughout the proactive, counsel try to work with our (university) university recognize that her office Employer: Western Michigan University clients to say call us before the fi- exists and can help with myriad preventative Claim to fame: Heightening awareness of how legal nal decision is made or the final matters. Examples include review- issues can impact university areas, and a preventative letter goes out, or if you’re think- ing policies and practices, drafting approach approach to reduce risk of litigation and legal liability. ing about policies, before imple- and reviewing contracts, address- menting them … call us so that we ing student affairs and faculty is- throughout each and can provide another set of eyes, sues, and advising on laws that af- every day that I am n her 12 years as Western Michi- cited in results: A drop in litigation the legal perspective.” fect areas including research, gan University’s chief legal coun- over the past One of two in-house attorneys, employment, intellectual property at the university. I sel, Carol Hustoles has main- Winner decade, from 12 Hustoles’ university clients in- and international subjects. ” tained a focus on outreach, lawsuits in vari- clude the board of trustees, presi- One item she instituted was a communication and prevention. ous stages in dent and vice presidents, adminis- Web page that contains information Carol Hustoles, It’s helped the university avoid 2001 to none currently, and no law- trators, deans and associate deans, and legal resources on such areas as Western Michigan University or reduce liability and is a factor suits lost during that time. and affiliated entities like the uni- copyright law, freedom of informa- tion requests, collective bargaining agreements and a contract review checklist. The checklist helps uni- versity administrators consider key questions like payment terms, indemnification issues and compli- ance with current law. Jan Van Der Kley, associate vice president for business and finance at the university, said Hustoles “has done extensive review of forms, practices and policies to en- sure that we are compliant with both federal and state require- ments” and is active nationally and with colleagues at other universi- ties, gathering knowledge that ben- efits Western. She said Hustoles has diverse expertise — whether it’s property transactions, contractual or personnel issues, or Michigan’s constitution — that is important in a university with broad operations. One current area of assistance is with a new school of medicine that the university is establishing, help- ing sort through such areas as legal structure and relationships with and between two hospitals and the university, Van Der Kley said. “She’s so dedicated and is so knowledgeable,” Van Der Kley said. “We have had significant pe- riods of time when we have actual- ly had no legal issues at all, and that’s because of the great advice and counsel she provides.” That not only saves the univer- sity money, but “it helps to set the tone of the institution as one of high standards and good ethics Every lawyer must pass the bar. and sound practice,” she said. Ours go on to raise it. — Amy Lane Online database gives access to nonprofits’ financial information Wayne Law, a Best Value Law School, offers students Attorney General Bill Schuette a strong and comprehensive legal education. And we and the state’s Charitable Trust Section have launched an online are always getting better. In the last month alone, we database to give access to the fi- nancial information filed by partnered with Windsor Law for North America’s first Michigan charities and others that have registered to do fundraising Transnational Environmental Law Clinic, celebrated in the state. The site, AGCharitySearch, in- a record number of outstanding student performances at moot court and cludes information on Michigan charities and out-of-state charities mock trial competitions, and brought more than a dozen legal scholars and that are raising money here, as well as professional fundraisers. practitioners to campus for innovative lectures. It’s no wonder our graduates The database also provides fi- nancial data for the charities, tak- go on to make significant contributions in their communities and beyond. en from their IRS tax forms, and for larger charities the audited statements they provide to the AG’s office. For smaller nonprofits law.wayne.edu not required to fill out 990 forms, AGCharitySearch provides finan- AIM HIGHER facebook.com/WayneStateLawSchool cials taken from their registration materials. — Sherri Welch 20110411-NEWS--0029-NAT-CCI-CD_-- 4/7/2011 5:16 PM Page 1
April 11, 2011 CRAIN’S DETROIT BUSINESS Page 29 Focus: General and In-House Counsel Awards Legal eagles fly high at Crain’s inaugural awards program, summit
BY ROGER CASTILLO ban Collection Showplace in Novi, nior vice president for labor, im- Crain’s awards) immigration and employee bene- SPECIAL TO CRAIN’S DETROIT BUSINESS will offer strategies and insights migration and employee benefits leads Ford’s liti- fits issues that are pending in Con- from some of the most influential le- for the U.S. Chamber of Commerce. gation, tax, cor- gress and the federal agencies, Crain’s Detroit Business and its gal leaders from our region and the Maura Corrigan, director of the porate and intel- while Corrigan was appointed Jan. partners in the inaugural General nation. Among the topics of inter- Michigan Department of Human Ser- lectual property 6 by Gov. Rick Snyder as the direc- and In-House Counsel Awards will est: labor and employment law, vices and a former Michigan efforts. tor of the Michigan Department of honor top legal minds and provide compliance, intellectual property, Supreme Court justice, will speak Before work- Human Services. a forum for legal education at a diversity and law department man- during the awards celebration. ing for Ford, For more information or to regis- May 3 summit. agement best practices, plus the lat- Solomon, a career NLRB attor- Leitch was ter, visit crainsdetroit.com/events or The Association of Corporate Coun- est trends in the automotive sector. ney, was named acting general deputy counsel call (313) 446-0300. The cost of the sel, Michigan Chapter is working Speakers for the event include: counsel by President Barack Oba- Leitch to President summit is $75 a person, $70 per per- with Crain’s — along with the Lafe Solomon, acting general coun- ma in June. It is the agency’s top George W. Bush, son for groups of 10 or more and $90 State Bar of Michigan Business Law sel for the National Labor Relations position for investigation and advising the president and his staff for walk-ins. For the awards recep- section and the Oakland County Bar Board; David Leitch, general counsel prosecution. on a variety of legal issues. (See sto- tion only, the cost is $60 each, $55 for Association — to co-host the event. and group vice president for Ford Leitch (named this year’s over- ry on Leitch, Page 21.) groups or 10 or more and $75 for The summit, 1-8 p.m. at the Subur- Motor Co.; and Randy Johnson, se- all winner for the inaugural Johnson is responsible for labor, walk-ins.
CRAIN’S SEEKS NOMINATIONS FOR 40 UNDER 40 AWARDS Crain’s Detroit Business is seeking nominations for the 2011 class of 40 Under 40, which recognizes young achievers based on factors such as financial impact and civic and community leadership. Winners will be profiled in the Oct. 3 issue, and Crain’s will celebrate their achievements at an October event. To be eligible, nominees must be under age 40 as of Oct. 3, 2011. For sponsorship opportunities, please call (313) 446-6052. Nominations must be received by April 13. Visit www.crainsdetroit.com/nominate to fill out the online form. Questions? Contact Jennette Smith, deputy managing editor, at [email protected] or (313) 446- 1622.
CRAIN’S SEEKS SALUTE TO ENTREPRENEURS NOMINATIONS Do you know an entrepreneur who deserves applause? Entrepreneurs make up a growing portion of Michigan’s employment base and are of increasing interest to the local business community. Crain’s Detroit Business will publish in its Nov. 21 issue a “Salute to Entrepreneurs.” These awards will recognize problem-solving, innovation and business acumen among entrepreneurs and second-stage companies. Winners will also be honored at an awards event on Nov. 17, at Greektown Casino Hotel. Our goal is to highlight the next generation of entrepreneurial Employers & Lawyers Working Together leaders who are helping to reinvent Southeast Michigan. Nominations %ORRP¿HOG+LOOV3DUNZD\6XLWH%ORRP¿HOG+LOOV0, are due by July 22. Visit www.crainsdetroit.com/nominate 3KRQH to submit a candidate or for more www.ogletreedeakins.com information. Questions? Contact Gary Anglebrandt at (313) 446- 1621 or [email protected]. 20110411-NEWS--0030,0031-NAT-CCI-CD_-- 4/7/2011 3:27 PM Page 1
Page 30 CRAIN’S DETROIT BUSINESS April 11, 2011 Focus: General and In-House Counsel Awards Flat fees for legal work can fall flat without proper planning
BY CLAIRE BUSHEY The catch-all term of alternative in use for the majority of legal CRAIN NEWS SERVICE fees describes a number of pricing work. According to a 2010 survey structures, including fixed fees, by the Washington, D.C.-based As- It was an awkward situation: contingency fees, volume dis- sociation of Corporate Counsel, The law firm had agreed to file the counts, or a combination of them. 84 percent of in-house counsel use client’s trademark application for In theory, the fees offer clients standard hourly rates for the bulk a fixed fee, but an unexpected de- more predictable legal expenses of their outside legal work. velopment pushed the legal work- and reward lawyers for efficient Most law firms aren’t rushing load outside the scope of the origi- service while removing the temp- to embrace alternative fees either. nal agreement. tation to tack on needless billable The same survey found that At least that’s hours. 86 percent of in-house counsel re- how the attor- But even with ported resistance from outside neys at Davis Mc- Many lawyers guideposts, some- firms about using a payment Grath LLC saw it. “ times the scope of arrangement other than the bill- The client didn’t are trained to get to work is unpre- able hour. agree, failing to dictable, leaving a understand that the bottom of firm in the lurch. the flat fee only Patrick Stanton, Learning from mistakes encompassed a something and 44, office managing Flat fees require discipline and straightforward member of Detroit- planning to make them profitable, filing with no le- spend whatever based Dykema Gos- and the legal profession possesses gal snags, firm sett PLLC, said his a spotty reputation when it comes member Kevin time necessary. firm recently han- to time-management and budget- Thompson says. ” dled a commercial ing. “The client David Brown, Much Shelist lease for a shop- “Many lawyers are trained to said, ‘I paid you ping center that get to the bottom of something and to file it,’ ” said grew more com- spend whatever time necessary ... Thompson, 40, who also heads the plex than expected. Although the and that may be inconsistent if law practice management and time “was way over the original you told the client $100,000 in fees,” technology committee for the deal,” the firm honored the said David Brown, 50, chairman of Chicago Bar Association. “It was a arranged fee to preserve the rela- the management committee at law little difficult. They finally real- tionship with its client. firm Much Shelist Denenberg Ament ized we weren’t trying to extort “We said, ‘We’ll stick by it, as & Rubenstein PC, also in Chicago, them for more money, but it was long as you remember next time which has annual revenue of uncomfortable at first.” that we did,’ ” he recalls. $40 million to $50 million. Alternative fee arrangements — Alternative fees are designed to To ensure lawyers don’t become so called because they present an provide transparency and pre- victims of their own zeal, experts alternative to the once-ubiquitous dictability for clients and lawyers say, they need to carefully choose billable hour — have gained trac- alike. But while flat-fee structures which legal matters to handle on a tion in the legal world in the past are becoming more commonplace, fee basis, use historical data to set few years thanks in part to the re- they aren’t the panacea some advo- realistic fees, learn from mistakes cession. The buzz prompted one lo- cates might have imagined. and sometimes prioritize the long- cal lawyer to jokingly dub alterna- And despite the furor to declare tive fees “the new black.” the billable hour dead, it remains See Next Page 20110411-NEWS--0030,0031-NAT-CCI-CD_-- 4/7/2011 3:27 PM Page 2
April 11, 2011 CRAIN’S DETROIT BUSINESS Page 31 Focus: General and In-House Counsel Awards
From Previous Page ity alternative fees bring to their outside counsel costs. But some in- term client relationship over house counselors, notably Richard short-term gain. Baer, general counsel for Denver- Julissa Ruiz, 36, is a solo practi- based Qwest Communications Inter- tioner in Homewood, Ill., who han- national Inc., have criticized flat dles family law, fees, arguing they immigration and encourage law real estate mat- To create a firms to cut cor- ters. She bills “ ners to maximize many cases on a successful profits. flat-fee basis and Allstate Corp.’s insists on pay- alternative fee law department ment up front to chief of staff, minimize her fi- arrangement, you Bruce Goldberg, nancial risk. Still, 51, said the North- she’s learned to need someone who brook, Ill.-based be choosy. She insurance giant is once accepted a works for the client testing fees. divorce case in- with legal “You can’t just volving children flip a switch,” he that exceeded experience. said. “We want to what she’d ” give alternative planned when cal- Mike Evers, Evers Legal Search fees a try, see how culating the fee. they work out, , She doesn’t take Leaders in the Making Today, more than ever learn from them those cases anymore. and proceed from there.” Explore over 100 undergraduate, global competition and corporate streamlining require innovative thinking and leadership abilities. “I took the risk and took the In the end, both parties must feel master’s, and doctoral programs hit,” she said. “It’s trial and error, Continuing your education can be key to ensuring your success. From biomedical engineering to like they’re benefiting or the in Colleges of Architecture and really, on these types of things.” health information technology management, Lawrence Technological University offers innovative arrangement won’t last. Matthew Design, Arts and Sciences, Historical data can cut the risk Share, director of marketing at of costly error, many attorneys Engineering, and Management. degrees and fast-track certificate programs to prepare you for the jobs of the future. Alfa International, a global network say. Knowing how long it took in of law firms, said lawyers and the past to file a summary judg- Waive your application fee at www.ltu.edu/applyfree clients share responsibility to ment motion or take a deposition keep tabs on billing and revisit the can help law firms predict how 2011 2011 2011 terms if a clear winner or loser AMERICA’S BEST BEST COLLEGES MILITARY much time and effort a similar UNIVERSITIES in the Midwest FRIENDLY emerges. U.S. News & Princeton SCHOOL measure will take in the future, World Report® Review® “Whenever you’re starting a G.I. Jobs® allowing them to set an appropri- brand-new process, it’s never go- ate fee. ing to be perfect the first time out,” Lawrence Technological University | 21000 West Ten Mile Road, Southfield, MI 48075-1058 | 800.225.5588 | [email protected] | www.ltu.edu Share said. In-house legal knowledge is key This story originally appeared in Even for clients, the advantages Crain’s Chicago Business. of alternative fees aren’t necessari- ly clear-cut. Unless a company em- ploys a general counsel, it’s proba- bly wiser to stick with the billable hour, said Mike Evers, 46, presi- dent of Evers Legal Search, a Chica- go firm with $1 million in annual revenue that places in-house lawyers with companies. CFOs usually lack the legal expertise to know whether a given fee consti- tutes a good deal. “To create a successful alterna- tive fee arrangement, you need someone who works for the client with legal experience who knows Congratulations to our clients who are it’s a good arrangement,” Evers said. Many clients praise the reliabil- Crain’s General and In-House Counsel
LEARN TO PROTECT YOUR Award winners and finalists BUSINESS FROM FRAUD Crain’s Detroit Business and Deloitte LLP present part one of a free, three-part webinar, “What Chris B. Heaphy Jay B. Knoll Every Private Company Needs to Know,” noon-1 p.m. April 28. The Taubman Company LLC Energy Conversion Devices, Inc. Panelists include Joe Angileri, managing partner for Michigan, Deloitte LLP; Mark Ford, principal, Deloitte & Touche LLP; and Robert Biskup, director, Deloitte Financial Advisory Services LLP. Among the topics to be discussed David G. Leitch will be data security in the world of social networking and cloud Ford Motor Company computing, and the top things you should consider to protect your business from fraud. For more information or to register, visit Honigman Miller Schwartz and Cohn LLP www.crainsdetroit.com/events. For DETROIT LANSING OAKLAND COUNTY ANN ARBOR KALAMAZOO sponsorship information, contact www.honigman.com Marla Downs at (313) 446-6052 or [email protected]. 20110411-NEWS--0032-NAT-CCI-CD_-- 4/7/2011 5:12 PM Page 1
Page 32 CRAIN’S DETROIT BUSINESS April 11, 2011 Focus: General and In-House Counsel Awards Corporate law budgets to remain lean despite uptick in the economy
BY CHAD HALCOM CRAIN’S DETROIT BUSINESS Companies are still reluctant Don’t expect corporate legal “ budgets to expand with the econo- to spend more and are hesitant to my, as most general counsel of- fices expect both internal and ex- revisit legal budgets for now. ternal spending to resist the ” recovery throughout 2011. Brian Smith, “You continually have pressure Association of Corporate Counsel on corporate counsel to do more with less. And I don’t expect that Corporate legal counsel re- on outside legal services nation- pressure is going to change anytime versed a budget growth trend of wide. The median U.S. legal budget soon,” said Brian Smith, president more than 10 years and cut total le- was $24 million. of the Association of Corporate Coun- gal spending by 1 percent in the Local experts don’t expect de- sel Michigan chapter since Jan. 1. U.S., according to the 2010 law de- mand for legal services to grow “The company may grow with partment survey released in Octo- again soon, even though the na- the economy, but what we tend to ber by Hildebrandt Baker Robbins, a tional recession ended more than find is when the economy does Houston-based legal consulting 18 months ago, according to the worse some areas of legal activity and professional services firm. U.S. Department of Commerce. expand, and others decline. Total legal spending growth “General counsel (attorneys) “As a whole, even though the ranged from 5 percent to 9 percent might be under less pressure, but economy is getting better, compa- over the preceding nine years, at just because business is improv- nies are still reluctant to spend an average of 7 percent. Inside le- ing doesn’t mean they’re going to more and are hesitant to revisit le- gal spending was up about 1 per- gal budgets for now.” cent, offset by a 5 percent decline See Next Page
Congratulations, counselor.
Western Michigan University General Counsel since 1999 and Vice President for Legal Affairs since 2002
Carol L.J. Hustoles
Winner of Crain’s 2011 Government/Nonprofit General Counsel Award 20110411-NEWS--0032,0033-NAT-CCI-CD_-- 4/8/2011 10:39 AM Page 2
April 11, 2011 CRAIN’S DETROIT BUSINESS Page 33 Focus: General and In-House Counsel Awards
From Previous Page The ratio of outside legal spend- have license to radically increase ing to internal spending dropped their legal spend,” said Justin Companies may from 2.2 to 1 in 2000 to 1.5 to 1 in Klimko, president and managing “ 2009, according to the 2010 “Manag- shareholder at Detroit-based try to reduce ing Outside Counsel Survey” by the Butzel Long PC. national ACC organization and “They can tend to get whip- legal Serengeti Law, a legal project man- sawed, too. Companies may agement and electronic billing firm. try to reduce legal spending spending by Total legal spending amounted by hiring outside lawyers, so to 0.56 percent of total corporate hiring outside revenue in 2009, compared with CODE RED some work moves outside again. But they still do want lawyers. 0.46 percent in 2000, according to arrangements (with outside the survey. ” There typically isn’t room in Are you in danger of compliance violations? firms) that give a continued Justin Klimko, corporate legal budgets for “like- sense of what their total legal Butzel Long PC budgets will be.” to-have” line items, experts say. Butzel convened an alternative State University Law School as well “You either have litigation to fee study group last year on best as past general counsel for the Fed- defend or you don’t, or there’s a practices among firms that man- eral Trade Commission. change in the law that requires age flat corporate legal budgets by “My little sense is, in-house de- some regulatory compliance,” offering various fee alternatives to partments have done a little more Smith said. “But you will either the standard billable hour. The hiring in specializations or niches have something to do, or don’t group is expected to present its they have a need to build on. When have something to do. There aren’t Business Systems Solutions findings to the firm’s leadership a specialty comes along, some- a lot of things in the budget that Management Systems Consulting | Training | System Improvements are just nice to do.” within two months, Klimko said. times an outside firm will lead on BUSINESSSYSTEMSOLUTIONS.ORG 313.505.5524 The ACC has 422 members in its that before a company may take at- Chad Halcom: (313) 446-6796, | Michigan chapter, and Smith said torneys in-house.” [email protected] most of the Southeast Michigan But Smith, who is also corporate membership, particularly the au- counsel at the Dundee office of tomakers or other local manufac- Waltham, Mass.-based Holcim Inc., turing companies, will probably said he expects some companies see flat total legal budgets in 2011 will actually try to handle “as even if company revenue im- much as possible” internally and proves with the economy. only outsource a few specialties, “The question is going to be, will such as environmental law or la- corporate counsel grow by more bor and employment litigation. hiring inside, or will the new He also said some pressures to billing and fee arrangements grow legal spending will come from they’ve created make their outside outside the company, like litigation counsel more appealing to hire? or compliance with new changes in That’s still difficult to answer,” federal law or heightened regulato- said Stephen Calkins, professor ry agency enforcement under the and past interim dean at the Wayne Barack Obama administration.
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